COAL INDUSTRY

HC Deb 24 October 1961 vol 646 cc758-837

12.22 p.m.

The Minister of Power (Mr. Richard Wood)

I beg to move, That this House takes note of the Annual Report, Accounts and Statistical Tables of the National Coal Board for the year ended 31st December, 1960 (H.C. 195) and (H.C. 196). Eight months ago we had a general discussion on fuel policy in which, naturally and inevitably, coal took a prominent place. Today, we have a debate, admittedly rather compressed within just over four hours, which will be devoted wholly to the problems and progress of the coal industry. I hope that neither my hon. Friend the Parliamentary Secretary nor I will take an unfair share of the time available. For my part—my hon. Friend shares this view—I am one who supports Front Bench brevity and, if I may say so, back bench brevity, too. Also, on this occasion, I wish to set a good example of relevance because in all the debates on reports and accounts to which I have so far listened I have very seldom heard much reference to the reports and accounts in question. I shall, therefore, begin by speaking directly about the Board's revenue account.

The accounts we are discussing show a revenue deficit in 1960 of £21 million. They show an accumulated deficit at the end of that year of £78 million. Since then, the recent half-yearly statement published by the Coal Board has shown that, in the first half of this year, the Board made a small surplus of £2½ million, which is to be compared with the result of the first half of 1960, when it made a loss of £7 million. But, as those who study these affairs know very well, the second half of every year is always difficult, and I am sorry to have to say that a further revenue deficit this year is certain.

As the House will agree, this is a very serious problem. Neither the Government nor the Board underestimates its gravity. In my view, there are two questions, one, the fundamental one of putting the Board's finances on a permanently sound basis, the other, the important but limited question of how the deficit should be financed. I shall speak first about the fundamental problem.

Last April, about six months ago, the Government published their White Paper on the Financial and Economic Obligations of the Nationalised Industries in which they laid down the general lines along which those obligations would be interpreted. Since then, the Government have been discussing with the National Coal Board and with each autonomous nationalised board the financial objectives which those boards should have before them for an experimental five-year period. The Coal Board immediately began to prepare for a discussion with me of its financial objectives, a discussion which would be both realistic and satisfactory, and it, therefore, quite rightly, put in hand an intensive examination of the industry's financial position and prospects. In order to help it in its examination, the Board retained a leading firm of chartered accountants, Messrs. Cooper Brothers, to advise it on the kind of discussion we might have. It will be some time before the Board can make proposals for putting its finances on a sound basis, and I cannot, therefore, yet suggest to the House of Commons what steps will be thought necessary and suitable to deal with this fundamental problem. However, I undertake to give to the House information as soon as the Government and the Board have together reached their conclusions.

I come now to the question of financing the deficit. At the end of 1960, the Board's accumulated deficit was £78 million. This is about £16 million more than the internal funds within the Board which have hitherto been regarded as available to cover it. The difference between the deficit at the end of last year and the total internal funds would, normally, have been bridged by bank borrowings under Section 27 of the 1946 Act, but the necessary accommodation was not forthcoming from the banks last December owing to the then shortage of credit, and the sum was, therefore, temporarily advanced to the National Coal Board and repaid out of the Board's trading surpluses in the first quarter of this year.

Even a relatively small further loss at the end of this year—I have already told the House that there will be a further deficit—will bring the Board's accumulated deficit beyond its probable internal resources and the £20 million borrowing limit taken together. The Government have taken the view that this is a very serious situation. We have been considering various possible means of dealing with it. I cannot say at present whether further legislation will be needed, but, if legislation turns out to be necessary, I undertake to bring my proposals before the House of Commons as soon as possible.

Having spoken of the Board's finances, I should like to say a word or two about its organisation. A year ago much attention was paid both by this House and by the mining industry to rumours of plans for decentralising the National Coal Board. I hope that any fears which were then expressed of the consequences of any steps which might be taken have since been allayed by the practical approach to this problem of the Chairman and of the Deputy Chairman and by the good sense of the changes which the Board has introduced. The Chairman and I have, on several occasions—in particular, I have in answer to Questions in the House—denied any intention to return to district wage agreements. This was never any part of the meaning which we attached to the word "decentralisation". That meaning has become plainer this year, during which the Board has progressively increased the responsibilities of divisions and areas. It has already introduced a substantial number of administrative changes.

I should now like to talk about the tasks ahead of the Board this year and in the years to come. Recently, I celebrated my second anniversary at the Ministry of Power and I reflected on the significant change in the industry's circumstances over this very short period. Unfortunately, as I have pointed out, its financial difficulties remain, but we can all remember, casting our minds back quite a short time, that the levels of production and disposals are now in a very different relationship.

The Board's undistributed stocks are likely to be reduced this year by between 7 million and 10 million tons. I gather that deep-mined production may be about 5 million tons less than last year, due to a number of factors: first, the different incidence of holidays; secondly, the influenza outbreak in February, and, thirdly, the strike in Yorkshire in March. Another serious difficulty to which, I am sure, a number of hon. Members will draw attention, is the drop in manpower in the industry. [HON. MEMBERS: "Hear, hear."] To some extent, but only to some extent, this has been offset by an increase in productivity.

The question of manpower is serious. Today, throughout Britain, there are 20,000 less miners in the industry than there were in January last. Although the rate of loss of manpower has been more than halved this year, the figures for this year still cause considerable concern. One thing which can do a great deal to ease the situation is the existence of more houses in the right places. Since the war, as the House knows, the Board has built, about 20,000 houses in areas where miners were urgently needed, and it has plans to build more. What it needs is the active and willing cooperation of local authorities, many of whom have already given extremely valuable help.

May I give just two examples. They are both in the West Midlands Division. The Rugeley U.D.C. has built 100 houses for the new Lea Hall Colliery and is considering the building of 250 more. The Wellington R.D.C. is building 90 for the reconstructed pit at Granville. There are discussions going on with several local authorities, and I appeal to them to do all that they can to help the Board in this difficult situation.

However, even if the housing situation improved, there is no doubt, particularly in the Board's most profitable areas, about the pulling and attractive power of alternative industry. I suppose that no one who has ever been down a pit could have failed to feel something of the hold which coal mining has on those who work in the industry. I have certainly found that on the visits that I have made. Equally, I am sure that no one would deny that it is a very tough job, with difficulties, discomfort and danger. At the same time, a thousand or two feet above the coal face and, perhaps, within a mile or two of the shaft are what Lord Robens has described as clean, comfortable factories with all the best working facilities". The pulling power of the "clean, comfortable factories" is bound to be extremely strong.

I agree with the House that the shortage of men is undoubtedly serious, and we should lack realism if we imagined that the present trends will be swiftly or dramatically reversed. Therefore, in order to maintain, and, indeed, to increase, the output of coal there must, in my opinion, be a fast increase in productivity. Only increased productivity can enable the industry, first, to meet competition from other sources of energy, secondly, to pay its men a proper reward, and, thirdly, to produce a reasonable return on the capital which the State has invested in the industry. This is a most vital and fundamental matter.

The relationship between productivity and the colliery costs of production is clear enough, but the relationship between productivity and the trading results of divisions is even clearer. As the House knows, a number of divisions are making heavy losses. In one of them there has been practically no improvement in o.m.s. since 1947. After the payment of interest, the losses in Scotland, as I think the Chairman of the Board made plain over the weekend, were something like £100 million—

Mr. Gerald Nabarro (Kidderminster)

To which division is my right hon. Friend referring?

Mr. Wood

Scotland. Perhaps my hon. Friend did not hear what I said.

Up to the end of last year, Scotland's losses were about £100 million compared with the total national deficit of £78 million—£22 million greater. The fact is that these losing divisions are being supported by the profitable heart of England, while the ability of the low-cost coalfields in the West Midlands, East Midlands and Yorkshire to compete with other sources of energy is sapped by the dead weight of the high-cost areas selling their output at a loss. This is a statement of the problem with which all hon. Members will, I am sure, agree. Those are the facts.

As part of its general review, the Board, rightly, is giving close attention to the problem which lies at the very root of its financial difficulties, both in the last few years and at the present time. The Board's objective, which I share and which, I hope, the House shares, is to get itself out of the "red" as soon as possible. It will not do so this year and it will be hard for it ever to do so while its highly productive capacity is beset by heavy losses.

Therefore, I can see no escape from measures to deal with these losses and, at the same time, to concentrate as intensively as possible on the expansion of its economic production. However, this must certainly drive the Board to hard and painful decisions which, in my opinion, must be faced if the great opportunities ahead of the industry are to be firmly seized.

I have no doubt about those opportunities. Now, in 1961, well over half of the schemes for new collieries, coal preparation plants and for major reconstructions have been completed. A great deal of old capacity has already been closed with, I am glad to say, little hardship to the men employed in those mines.

Not all these projects have been as successful as was expected. Indeed, there have been certain disappointments. I do not think that anyone who knows the coal mining industry would be surprised that there should be certain disappointments in as speculative an industry as coal mining. I hope that the House will agree with me in my anxiety to see the industry face those disappointments realistically and to act swiftly to try to redress them.

Mechanisation has made a substantial advance this year. In 1960, about 38 per cent. of output was power loaded. By the end of this year, the Board expects more than half the output to be power loaded. That is a substantial advance. At the beginning of this year, 1,200 power loaders were working and 400 new ones will be added by the end of the year. The Board is also introducing power-operated supports and is carrying out important development work on the mechanisation of underground tasks. Therefore, while the shortage of men has encouraged the Board to pay increasing attention to the efficient use of its labour, the growth of capital which is now employed in the mines has rightly directed its attention to the efficient use of capital and material.

As I said earlier, during the last few years the Board has successfully brought its production into line with demand, but in spite of substantial stocks, which are now running down fairly quickly, there have none the less from time to time been shortages or threatened shortages of certain types of coal.

The reasons for this are simple. The mechanisation drive is bound to affect the production of large coal; that is unavoidable. It was always realised that deep-mined production of certain coals such as Welsh anthracite might be insufficient to meet the large national demand. I announced two years ago that the Board intended to reduce its opencast production to a low level in 1965. Since then, the Board's task has changed from the need to cut back production to the need to increase it, and particularly to increase the production of coals in short supply.

The reduction, therefore, in the output of opencast coal which was foreshadowed by me two years ago has been arrested and the output this year is likely to be rather more than 8 million tons compared with 7½ million tons in 1960. This reflects the changed circumstances of the industry. Whereas in 1959 it was confronted with a growing surplus of coal and the need to safeguard mining employment in the deep mines, demand today exceeds production, stocks are being rapidly run down, some grades of coal are already in short supply and the Board is concerned about manpower shortage.

Therefore, the Board has decided, and the Government has agreed, that it must postpone the rundown of opencast output and for the time being keep it at about its present level. Any new developments will be subject to the comprehensive provisions of the Opencast Coal Act, 1958, with its important safeguards for the private citizen, for agricultural interests, for amenity and for the avoidance of nuisance.

Recently, there has been much public interest in the Government's rejection of two applications to import coal from abroad. On this matter, as occasionally happens, a number of wellwishers have been only too ready to offer me solutions of various kinds. Despite all their advice, however, I came to the conclusion—it was the only easy conclusion to reach—that this is a highly difficult problem.

As has been pointed out to me on many occasions, the coal industry is a particularly inflexible one. It takes many years to develop new capacity and, once a pit has been closed, it is virtually impossible to reopen it. Therefore, if foreign coal were to be freely imported whenever circumstances such as low shipping costs gave it a price advantage over British coal, the capacity of the British coal industry to supply our needs when the pendulum swung the other way would be seriously affected and after that we should not only be paying unnecessarily high prices for coal but we should be paying them in foreign currency.

So far I think that I have the agreement of hon. Members opposite, but they may be less willing to agree with what I am going to say now. There is, as I hope they will be ready to admit, another side to the picture. The firms which were concerned with foreign coal of the type they wanted being offered to them at prices lower than the National Coal Board could quote were, naturally, anxious to claim the advantage of cheap fuel to compete in the export market. The decision which the Government reached was that it was not in the national interest to grant applications and that no import licences should be granted, at least until the Government had had an opportunity of considering the implications of such imports against the background of the general review that was taking place of the Coal Board's future prospects.

In that connection, Britain's future relationship with Europe has an obvious relevance. When my right hon. Friend the Lord Privy Seal discussed the application for membership of the European Economic Community, he added that if the Community wished us also to join the European Coal and Steel Community, we were ready to enter into negotiations. It is certainly too early for me to forecast the precise effects of membership, but I have good reason to think that membership of the European Coal and Steel Community would confer benefits both on the National Coal Board and on coal consumers in this country. I believe—and the Chairman of the Board has said several times that he shares this view—that the industry would benefit from an expanded market. I am also certain that the consumer could expect the benefit of having wider sources of supply.

Mr. Roy Mason (Barnsley)

The Minister has said that if we enter the European Common Market and, hence, the European Coal and Steel Community, the Coal Board would benefit and so would the consumer. I gather from his statement that the right hon. Gentleman means that the Board would benefit commercially. To what extent would the workers in the industry benefit?

Mr. Wood

I meant that if the Board benefited commercially by being able to sell more coal than it can at present, that would automatically confer benefit upon those who work in the industry.

Mr. John Morris (Aberavon)

Will the Minister say why there was such a long delay before a decision was reached on the application to import American coal? Is he aware that a great deal of confidence was lost as a result of this delay?

Mr. Wood

I have explained that the reason for the long delay was that, in my opinion, this was one of the most difficult problems which in the last two years I have had to try to decide. I do not think that we took too long.

I have tried to describe some of the problems of the industry and the task before it in the changed circumstances of this year. The position is that a great deal of uneconomic capacity still remains and, on the other hand, great advances in productivity in other quarters still remain possible.

I am convinced that the future of the industry lies in high mechanisation and increasing concentration and in the industry employing a skilled and well-paid labour force with a high level of productivity. It does not seem to me to matter how well our pits are designed, how much machinery is installed or how expert the working plans may be if management and men, at all levels, are not certain of their purpose and the part which each has to play in achieving it.

I have often spoken of the great debt that the industry owes to Sir James Bowman. On this occasion, I should like to pay tribute to his successor, who, during this year, has tackled his work with courage, vision and complete confidence. He has no doubt whatever about the industry's future and he has done a great deal to spread his confidence both throughout the coalfields and, I believe, also among the consumers of coal. Therefore, I hope that by agreeing to this Motion, the House of Commons will give support to the Chairman and the Board in the steps which they are taking to reap the proper rewards, both of the skill of management and men and of the investment which has taken place in the industry since the war.

12.50 p.m.

Mr. Ray Gunter (Southwark)

I can easily join with the Minister in his remarks about the necessity for brevity among Front Benchers in this debate, because of the short time that we have for it. Knowing that I have so many experts behind me, perhaps I shall enjoy brevity in dealing with only some of the major problems which arise.

Towards the conclusion of his speech, the Minister brought to the attention of the House the necessity of all those engaged in the mining industry having some degree of confidence in that industry and of knowing where they were going and of what they were up to. I find going my industrial background that one of the most difficult and complicated operations which not only the Government but industry on both sides have to perform is that of the adjustment of a great, basic, traditional industry to new designs, new techniques and new conditions.

We have in this country two great, basic industries which brought us to great prosperity after the Industrial Revolution, and which are in the throes of this adjustment. The transport industry has seen the monopoly of rail transport disappear and has to adjust itself to new forms and new techniques; and the coal industry, which was for so long the basis of our prosperity, and our economy, is, in a sense, also in that position today.

One of the greatest difficulties which always arises in these circumstances is how to maintain the morale of an indus- try which is going through the agony of adjustment, of adaptation. It is how to maintain the morale of those men in the industry when they are in a state of confusion and when the path is not clear before them. This is one of the foremost problems of the mining industry today. Here we have coming about new forms of power and in the minds of all of us there must be the knowledge that not only through the use of oil, but also through the development of nuclear power, these dramatic changes are taking place in a comparatively short time.

It is the maintenance of morale and confidence in the industry today which is so essential. I have always believed that during a period of transition, during a period of adjustment, when may be the industry must contract, become slimmer, when manpower must be reduced because of new techniques, it is the duty of any Government in that period of transition to give us protection at that time.

I am not talking of direct subsidies; I am not talking in that sense; but there is the necessity of giving the industry, in those circumstances, the feeling that the Government do understand its problems and are prepared to ease the passage into a new situation. It is, to me, imperative that the Government, of whichever side of the House composed, should, give the appearance to the industry, when the industry has to be adjusted, as it must be, has to be adapted, as it must be, that it has the understanding and confidence of the Government.

Having said that, I would for one moment turn to the position which the Minister outlined on the finances of the industry. I will take only a moment or two on this. The Government's policy on this matter is one cause of the lack of confidence at present. The Minister very rightly says that he is to have a look at this and, if need be, produce new legislation. I hope that, in his own fair-minded way, when he does have a look at it he will remember the costs which have fallen on the National Coal Board because of Government policy and because of social needs.

I hope that the right hon. Gentleman will remember that in the days of great demand in this country, not many years ago, prices were kept very stable; I hope that he will remember, in his review of the finances of the Board, what it cost the Board to import coal for the steel industry; and I hope that he will also remember that coal had to be put down to stock, which was really put down to prevent unemployment and to meet the social needs of so many communities, and that it was the Board who had to pay for them. I hope that he will remember all those facts when he reviews the position.

To turn to the main points I wish to make on this matter of confidence in the industry and its future, whatever we may say about adjustments, however much the Minister may say that it is a serious matter, the position is very serious, very serious indeed. At the end of 1960 the number of men on the colliery books was 582,950, as the Minister has said, a reduction of 51,000 compared with the manpower of 633,990 at the end of 1959, and a reduction of 130,000 in this industry since the beginning of 1958. The number of face workers at the end of 1960 was 220,570, a reduction of 26,810 compared with the number at the coal face at the end of 1959. The fall in manpower has continued this year. It can be said, as the Minister has indicated, that in the past three years there has been a decline of about 18½ per cent. in all manpower in the coalfields and of 21½ per cent. at the coal face.

No one will argue that there has not to be adjustment in manpower. There will be little purpose in pouring millions of pounds worth of machines into the pits unless there were, but if this adjustment is maintained at this rate—that indicates a lack of confidence in the men in the pits—in a year's time manpower will be around 470,000 and in six years' time, in 1967, we may arrive at a position where the manpower in the coalfields in Britain may be less than 400,000.

I do not know what is in the Minister's mind. He has avoided any targets, but I would have thought, taking all these facts into consideration, that we cannot allow the annual output of our pits to fall much below the figure of 200 million tons.

We have to bear these two figures in mind, but if the decline in manpower becomes the torrent which it looks like becoming we may not even be able to fulfil our commitments with all the other sources of power taken into consideration. I hope, therefore, that the Minister will very seriously consider how the position will be maintained even if there is slimming and cutting down, and how men may be retained in the industry.

One of the main troubles about this great decline in manpower, this hurried decline, is that the younger men are leaving the pits. The men below 31 years of age are going away. When the Minister says he hopes that local authorities will see how they can help to make labour more mobile by house building to facilitate the transfer of men from one area to another, I hope that he will address his remarks also to the Chancellor of the Exchequer, so that he may give the local authorities an opportunity in proper conditions of providing houses. When the Minister says that one of the things to do is to provide alternative industry in the coalfields, again I suggest that he turns to his colleagues in the Government to produce the planning that they have in mind and see whether they can look at the controls which are necessary to this planning so that we may have this question properly met.

There is one more word I should like to say on this question before I leave it for another matter. I was very glad to note that the Minister did bring forward the figures about productivity. Whatever may be the insults which are sometimes poured on this industry I am bound to say that it would appear that the men in the pits are using the machines to the best of their ability at present.

It is not without interest that an all-time record for output per man shift overall has been created during the period which we are now considering. During the week ended 14th October the output per man shift overall reached a record of 1.488 tons per man, I say, therefore, that we are making progress in this respect, but further progress will depend on how much the confidence of the men is maintained.

The Minister did not deal in his speech with the future of the coal industry and the future development of other sources of power. I should have liked to have some information from him on the economics of the Lurgi process. I understand that the Gas Council has submitted plans to the Minister of Power for the importation of methane. It was expected in certain quarters that we might have had a statement today on the Minister's attitude, but I now understand that he is awaiting a report from a study group.

The facts as I understand them—and this is what is worrying miners at present—is that it is estimated that gas manufactured from imported methane would be available at about 8½d. a therm. It is now public property that the Gas Council's plans are to import one-tenth of the gas requirements of Great Britain from a country which we know has a certain instability in its political life.

In passing, I might say that the importation of methane from the Sahara at present would require a great deal of careful thought before it was allowed. Newly independent countries have generally a marked desire to participate in profits from the exportation of their raw materials and, as oil revenue would be the Algerian Government's only income, this might have an effect on prices.

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

As the Algerian Government would be participating in this, would not that guarantee be a certain degree of stability?

Mr. Gunter

I do not agree. We know what certain agreements have meant in the Middle East. In the event of the continuity of supply from the Sahara being broken, I imagine that the Gas Council would have to seek a source of methane elsewhere. This would involve much heavier freight charges and ultimately higher prices, and, since the Coal Board would have to adjust production plans if methane imports were allowed, the coal would probably not be available at the time it was required to replace the methane.

There is one Lurgi plant in operation at Westfield, in Scotland, and another is being erected at Coleshill. The Westfield plant will have a capacity of 30 million cubic feet a day and the Coleshill plant 40 million cubic feet a day. Both these plants are considered to be unecomonic in their present form and, therefore, the Coal Board has examined the possibility of erecting further Lurgi plants at col- lieries in the East Midlands and Yorkshire where suitable coal is available. Five sites have been selected, at each of which about 1 million tons of coal per annum could be made available. One of these sites has been used by a contractor as a basis for the study of the design and cost of operation of a Lurgi plant. The cost of the gas is estimated at 9.16d. per therm, making, after enrichment with butane at 7.5d., per therm, a final cost of 8.89d. per therm, Therefore, we are talking in terms of the difference between 8½d. per therm and 9d. per therm.

Since the scheme was prepared, substantial improvements have been effected in the Lurgi process at the Dorsten plant in Germany, and these have reduced the cost of the gas by about 20 per cent. In addition, recent investigations have shown that enriching hydrocarbons can be made available at considerably less than 7.5d. per therm. It is true, therefore, that those concerned with the Lurgi process have always been conservative in their estimates and that considerably larger quantities of gas have been obtained than were originally estimated.

The National Coal Board is now engaged with the Gas Council in a joint study group to estimate the cost of a number of Lurgi plants. There is already evidence to show that the Lurgi process can produce town gas as cheaply as it can be produced by the use of imported methane. It is, however, very necessary that we should have firm figures. These will be obtained from the tenders put forward by the contractors to the study group. If the Lurgi plants replaced the present method of making gas by carbonisation of coal, much less than 20 million tons of coal per annum would be required to produce the amount of gas produced at present and the cost would be substantially reduced. It would be reasonable to expect, therefore, that with reduced cost the consumption of gas would increase so that the net decrease in coal requirement would he offset to some extent.

I hope that when the Minister studies the report from the study group he will keep carefully in mind that it is an economic proposition to make gas out of our own indigenous fuel at present and that he will come down on the side of our own coal industry, because it is not always the actual comparison between the price of methane imports and the cost of coal production that matters. There are always also the social costs to be considered. The cost involved in the possible dereliction of our coal townships would have to be taken into account.

As to the future of the coal industry in the light of competition from other fuel, the Coal Board, obviously, like every other public corporation, has to operate within the limits of Government policy. It has to compete with other fuels and pay its way. The future of the industry lies in its ability to compete in the markets. We should not delude ourselves into thinking that we can keep the coal industry or any other industry open as a historical monument.

The Coal Board's power of competition depends upon two factors—its comparison of cost with other fuels on a calorific value basis and its ability to maintain stable prices. Generally speaking, coal can compete with other fuels in most parts of the country on a cost basis, but I am with the Chairman of the Coal Board in this at least, if not in all things—that the biggest threat to the future of the industry would be instability of prices. The one sure way to convince consumers of the Board's ability to maintain stable prices is to conclude long-term contracts at fixed prices. This should be the aim.

The Minister rightly emphasised that the way to stability of prices is mechanisation. This year the Board is installing 400 new machines and 150 have been installed so far. The aim is to get 50 per cent. of output mechanically cut and loaded by the end of the year and it is hoped that ultimately 80 per cent. of output will be cut and loaded. I am sure that we all welcome the initiative and drive of the Chairman of the Board in going forward with increased mechanisation. If he does that, and, at the same time, retains the confidence of the men engaged in the industry, he will have done a good job.

I want to say something about oil, but I put it in an interrogatory form, because I am not an economist and I do not know the answer. If we break down this year's figure of total energy consumption of 264 million tons coal equivalent, we find that coal is 196 mil- lion tons, nuclear and hydro 3 million tons, and oil 65 million tons. What puzzles me a little—and perhaps the Government will tell us their thoughts upon this matter—is that it is assumed that by approximately 1969 the total energy consumption of the country will be about 300 million tons coal equivalent.

I believe that we should assume—and I think that this is in the right hon. Gentleman's mind, although he was not too forthcoming; it is certainly in the mind of the industry—that the 200 million tons coal output will me maintained, as it should be if confidence is kept up. The underlying assumption which economists have made is that nuclear and hydro resources will have come to about 14 million tons, which means that 86 million tons coal equivalent of oil will have to be imported. What are the thoughts of the Government about that amount of oil and about the effect that the cost will have on the balance of payments?

In conclusion, I want to put forward what my party feels about the future of the coal industry and our resources of fuel and power. I suppose that it is accepted that the mechanical energy per head of the population is a fairly simple index of the standard of living, although it is rough and ready. Here in Britain we have 2½ horse power available per man; in the United States the figures is 8½ h.p. Energy comes through fuel and power industries—coal, gas, electricity, oil and atomic energy. I emphasise that it is nonsensical to treat them as separate fuels without regard to the country's overall energy needs. Yet that is what has happened up to now.

I still submit to the Minister for his consideration—and neither of us is very doctrinaire in approach—that we ought to set up a national fuel and power council of some sort—call it what one likes—to develop a co-ordinated and comprehensive policy for all the industries concerned. At present, the Government are encouraging the nationalised sections—coal, gas, electricity and atomic energy—and the private oil industry to pursue different and competitive lines of action, apparently regardless of the wider national interest.

Yet, whatever we may think of nationalisation, the fact is that by far the major part of the whole is in public hands, which provides an opportunity for a common policy. The tasks for such a council as I suggest would be to assess the future energy needs of the country, to review the current position and trends, to determine how each fuel can be used most efficiently and to the best national advantage, and to co-ordinate research and development in energy. I would not like the House to think that I am arguing for another committee of politicians. I argue that we should get the best brains in technology and science together to give us the assessment we need.

The recent difficulties in the mining industry have overshadowed longer-term energy requirements. It is a strange thought that if industrial production were to increase each year by anything like the rate of increase in Western Germany or France, we should face a greatly increased demand for fuels of all kind.

I believe that coal remains, and will remain for a long time, our principal national asset. I therefore believe that, if we can get a policy of co-ordinated gazing into the future, where sectional interests are put aside and the needs of the nation in this almost frightening scientific age can be seen clearly and properly, it will be for the good of the nation. It would also give to the mining community a belief in the fact that it could see far ahead with confidence, and an understanding of the part which the industry is to play in the last forty years of this century.

I hope that the Minister will again give most careful thought to the request of my party that there should be a far greater degree of co-ordination and of thoughtfulness upon this problem. I thank the right hon. Gentleman for the detailed report that he gave to the House of the Coal Board's annual accounts, and I hope that he will see our point of view increasingly in these matters.

1.16 p.m.

Colonel C. G. Lancaster (South Fylde)

If I do not follow the hon. Member for Southwark (Mr. Gunter) in great detail, it is because I want specifically to turn to one or two matters mentioned by my right hon. Friend. I will take up one point made by the hon. Gentleman, however, and that concerns the Lurgi production of gas. As the hon. Member is no doubt aware, the competing claims of gas made by the Lurgi system and by methane were carefully gone into by the Select Committee of this House which recently considered the gas industry. No doubt, when the Committee's Report is debated in the House, we shall be able to consider the situation and the Committee's own views on this rather involved problem.

Early in his speech, my right hon. Friend did the House considerable service by putting the question of decentralisation into its proper context. As he said, I hope that we need no longer fall into the idea of imagining that decentralisation has behind it the idea of a return to district wages and the like. We who have offered advice on decentralisation have had in mind particularly the centre of control for production.

What is the background to our present set up? The nationalisation structure was a very hastily put together scheme by Sir Arthur Street and the right hon. Member for Easington (Mr. Shinwell), and I am sure that neither of them had in mind that it was necessarily the form of organisation that would remain constant throughout the industry. The trouble is that very little has been done since then to alter it. We had the abortive Fleck recommendations which, if they did anything, merely solidified something which was already highly centralised and bureaucratic. If we are sensible about the problem, we should realise that what we have tried to do is what no other nation has succeeded in doing or has even attempted to do, even behind the Iron Curtain, that is, to run this great industry from our capital city.

Many years ago I was invited by the Soviet Government to spend three months in the great coalfield in the Don Valley, which is run from Rostov-on-Don, and not from Moscow. The Poles do not run their coal industry from Warsaw, and the French do not run their coalfield in the Pas-de-Calais from Paris, but from Lens. The West Germans run their industry in the Ruhr from Hamborn and Dusseldorf. The Americans run their industry from centres like Pittsburg and Columbus, Ohio. We are the only country out of step with world opinion in this matter, and it is all to the good that, administratively, there is to be a change from emphasis on control from London to the periphery.

Let me take one example to show why I think that we are justified in urging that. Hon. Members who may have been keen on nationalisation as such must have had in mind that one of the greatest benefits which could flow from nationalisation would be the dissemination of knowledge throughout the industry. Has that, in fact, occurred? Let us take a simple example. With a few exceptions, such as the narrow valleys of Wales, there need be very little difference between surface conditions from one pit to another, and there is no reason why any pit should not have the full benefit of all the mechanical devices—mine car circuits, turntable sorters, preparation plants and the like. So long as manpower is adjusted to production, there is no reason why, where geology does not come into it, there should be any marked difference in output per man employed on the surface between one pit and another.

However, throughout the industry there is more than 100 per cent. difference as between pits and even areas and that is purely because we have not had the dissemination of knowledge and new developments which we had the right to expect. All development, theoretical or practical, can emanate only from the point of production, and that is a stage in the development of the industry which is eminently important at this moment.

I want to say a few words about the accounts, although it is always somewhat academic to talk about the accounts of a previous year ten months after they have been produced. Last year was very expensive, the third most expensive in the history of the industry since nationalisation. As my right hon. Friend told the House, we are likely to have a considerable deficit this year. As my right hon. Friend said, in great part this is due to the uneven results up and down the country. It would be invidious for an ordinary hon. Member to point to a particular part of the country in this matter, and so I will confine myself to the sort of problem which uneconomic production entails and which my right hon. Friend and the Chairman of the Coal Board have to consider when dealing with this vexed question.

I take as an analogy a Transatlantic liner. Let us compare the "Queen Mary" with a pit. The "Queen Mary" cost about £18 million and has a life of thirty years. It needs to pay its way while in operation, and also to amortise the original £18 million and to put on one side additional funds for replacement in due course. Unless the "Queen Mary" operates on that basis she is not a viable entity.

Exactly the same holds good in a pit. I remember that before the 1914–18 war the basis on which the economy of a pit was formed was the figure of 11s. 6d. per ton of annual output—these were mostly half million-ton pits costing about £270,000. Throughout the intervening years, that figure rose to 22s. immediately after the First World War and to 38s. just before the Second World War, followed by £5 to £8, and it is probably now £10 per ton annual output in a million-ton pit.

It is possible to deal with that pit only as I have suggested the "Queen Mary" is dealt with—although with a life of one hundred years rather than thirty years—not only paying its way but carrying out amortisation of the original £10 million and being able to put money aside for its replacement. If the cost begins to get very much higher than that figure of £8 million or £10 million, it is very doubtful whether it is a viable pit. We know only too well that there are several very large pits which have recently come into production costing £15 million, £18 million or even £20 million, which must be very doubtful economic propositions.

My right hon. Friend paid a generous tribute to the new Chairman of the National Coal Board, a tribute which was reinforced by the hon. Member for Southwark. I was opposed to the appointment, not on personal grounds but because I was anxious to see a trained industrialist, possibly with coalmining experience, appointed to this job. I think that Lord Robens would be the first to admit that he cannot claim to be a trained industrialist. He has, however, made an extremely favourable impression all through the industry. I have heard from all sorts of quarters that he has shown great enthusiasm and has immersed himself in the problems confronting him. He has had the courage to ask questions and the good sense to listen to the answers. He has a keen, active mind and I am certain that he is getting a very clear view of the problems confronting him and the men he will have to call upon to help him solve them.

They are major problems. We have already said that last year showed a large deficit and the present year may show a considerable deficit, too. We have great variations in the productivity on the various parts of the industry. If we are to enter the Common Market, we must hope to be able to bargain from strength, and it is no good ignoring the fact that in recent years we have fallen behind and that one of our chief competitors on the Continent is now ahead of us in costs and in production.

If we are to make up that leeway, it will require all the energy and enthusiasm of the new Chairman of the Coal Board and those around him. But he has many good things on which he can fall back. There is now a generation of senior technicians, trained before vesting day, who can bear comparison with men in any other coal industry in Europe, or the United States of America. It is very much to the credit of the Coal Board that it has kept alive that system of training and there are many good young men following on in their footsteps. In my long years of speaking on this subject, I have always emphasised that we have colliers as good as those anywhere else.

These are considerable advantages on the side of the new Chairman. We have made great advances in mechanisation. I recently went down a pit to see one of the new trepanners working in conjunction with the armoured conveyors about which we heard today, and it was a most impressive sight. If I may bring a personal note into the debate, it was a source of great pride to me when it was recently announced in the Press that my old pits had achieved a production during the month of September of 50 cwt. a man in advance of anything not only in this country but in Europe itself.

The new Chairman and my right hon. Friend have the opportunity, an opportunity which has not been taken by successive Chairmen of the Board, or by successive Ministers, up to now to put their house in order. But I believe that in these new two men we have both a Minister and a Chairman who are seized of the problem. If they face it as I am confident they will, we can hope in the near future to see the coal industry going in the direction which the whole House would wish it to take.

1.30 p.m.

Mr. D. J. Williams (Neath)

I shall be very brief, because this is a short day, shorter than we expected, and I know that many hon. Members wish to speak.

We are today debating the Annual Report and Accounts of the National Coal Board for 1960. This Report was published some time ago. We have all had time to read it, and I think that we can all agree that it makes interesting reading. It gives a detailed account of the performance of the industry during 1960, a clear picture of the situation in the industry at the end of the year.

During 1960 consumption rose by 9 million tons; output fell by £12½ tans; and stocks fell by 6½ tons. Over 93,000 men and boys left the industry, more than the total labour force employed in the South-Western Division. Manpower in the industry fell by 51,000, more than the total labour force employed in the West Midlands Division. The number of face workers fell by 27,000.

The last time we debated coal in this House was in February of this year. That debate was on fuel and power, but the main theme of the debate was the situation in the mining industry. I remember on that occasion that grave anxieties were expressed, especially by hon. Members on this side of the House, about the situation as it existed then, and about the future prospects of the industry.

Some changes have taken place since then. In the first 38 weeks of this year—this is the latest figure that I have—consumption fell by 2¾ million tons; production was down by 4 millions tons; and stocks fell by 7 million tons. From July, 1960, to July of this year the manpower figure fell by 30,000. The face-workers are down by 15,000. Because of these trends, our anxieties are not allayed. They are still there—on this side of the House, in the National Union of Mineworkers, in the mining industry generally, and certainly in the mining communities.

Over the years we have had innumerable debates in this House on coal. It has been said that coal has been the subject of more debates in Parliament than any other industry. That is probably true, and it will not surprise anybody who has experience of this industry. Certainly, during my fairly lengthy association with the mining industry there has been no shortage of coal problems.

In the main, those problems are of two kinds. Either they arise internally, like the problem of technical backwardness during the inter-war years, or they arise from the impact of external forces. This is a constantly recurring problem in the history of the mining industry, and this, I think, is the kind of problem we are facing now.

The real troubles in this industry during the last fifty years have arisen from violent fluctuations in the demand for coal, and these violent fluctuations have plagued and bedevilled the industry for as long as I can remember. At one time there is a sudden upsurge in demand. At another time there is an equally sudden slump in demand. I do not remember a time when supply and demand were in equilibrium. Either supply exceeded demand, or vice versa.

The result has been that for fifty years this industry has lurched from crisis to crisis. That is the history of the mining industry over the last half century. At one time there is too much coal. There is a crisis of over-production. There is a glut of coal which cannot be sold. At another time there is not enough coal, and there is a crisis of under-production. At one time there are too many miners. At another time there is a shortage of them, and a manpower crisis results in intensive recruiting campaigns for men for the pits.

The coal industry has suffered from these violent fluctuations in demand more than any other industry. By its nature and structure this industry is less fitted than any other to withstand the shocks, strains, and stresses of these sudden changes in demand. Coal mining is an extractive industry. A pit is not a factory. It is not operated on the same lines as a factory. The supply of coal cannot be turned on and off like a tap.

These constant and violent fluctuations in the demand for coal have caused immense difficulties to the industry. Indeed, this is our problem now. A few years ago there was a desperate shortage of coal. There was a clamour for production, and still more production, irrespective of the price, quality, or cost. The resources of the industry had to be strained to meet what appeared to be an insatiable and inexhaustible demand for coal. The Board had to work uneconomic pits and uneconomic seams. It had to neglect development work to concentrate on immediate production, and it had to cut down exports to meet the insatiable demands of the home market.

There was then an acute shortage of miners; a desperate shortage of men for the pits. I remember intensive campaigns being conducted by the Coal Board—indeed, some of us took part in them—to recruit more men for this industry. The great inducement we then offered men to enter the industry was that it promised prospects of security of employment. The prospects then were very bright. It seemed that the future growth, expansion, development, and prosperity of the industry were assured. The industry was geared to produce 240 million tons of coal a year by 1965. That was the 1950 plan for coal.

Throughout the industry there was an atmosphere of optimism, buoyancy and confidence, but the situation changed suddenly and dramatically Once more there was a slump in demand. Once more the industry was faced with the problem of over-production. Once more we had too much coal and too many miners. This new situation presented the Coal Board with considerable difficulties. It was a difficult situation because the industry was geared to meet a rising demand, and that demand slumped. The Board had to take drastic measures to deal with the situation.

It is not my intention to deal with the measures adopted by the Board; they are familiar to all of us. I do not criticise the Board for doing what it did. Those measures were probably unavoidable in the circumstances. At least, the Board applied them in a far more rational way than the old coal owners would have done, and dealt with the situation in a more human way than the owners dealt with similar situations in the past. But those measures created certain serious social consequences, especially in some areas, and they had a profound effect upon the psychology of the miners everywhere.

Those measures have left a deep scar on the consciousness of the mining community. They have shaken the faith of the miners in the future of the industry, and in the anthracite coalfields they have revived all the old doubts, suspicions, fears and apprehensions that haunted the industry for half a century. I have seen this happening in my own coalfields. Collieries were closed down a few years ago and some villages became deprived of the only industry they had, which was a very serious matter for them.

This has created a very awkward situation in the anthracite coalfields, because it has shaken the confidence of the men in the industry. There has been a wholesale migration of men from it. Young men, in particular, are leaving, and miners' sons are not going into the pits. In the anthracite areas mining has been almost a hereditary occupation. The father took his son to the pit as a matter of course. This is a very old anthracite tradition, but that tradition is now broken. This is bound to have serious consequences for the future of the anthracite coalfields.

At present, there is an acute shortage of anthracite. This was referred to by the right hon. Gentleman this afternoon. In every anthracite pit there is also a serious shortage of miners. There are two gigantic new mining projects in the anthracite coalfields at Cynheidre and Abernant. We heard something about them in the House recently. The hon. Member for Cardiff, North (Mr. Box) was kind enough to give us some secondhand information about these two pits some time ago. He told us that there were certain technical and geological difficulties. Of course there are. I have never heard of an anthracite pit that has not met technical and geological difficulties in the course of its development, but I am confident that these difficulties will be overcome by the technicians and engineers of the Coal Board.

But the hon. Member for Cardiff, North misses the real problem in the anthracite coalfields. It is not technical or geological; it is social and human. The real long-term problem in the two pits to which I have referred is to recruit enough labour to man them efficiently. That is the problem that is worrying the Coal Board, and the hon. Member for Cardiff, North, in his misguided and misinformed campaign of allegations against the Coal Board, is aggravating the manpower problem in the anthracite coalfields and is not helping the industry to overcome its difficulties.

Mr. Donald Box (Cardiff, North)

I take it that the hon. Member will confirm that there was a fail of 10,000 in the number of employees of the Coal Board in 1960, which is the year under review. I did not raise the question of Cynheidre and Abernant until May or June of this year.

Mr. Williams

I am not familiar with the hon. Member's dates. I do not see that they are of any relevance to this argument. He has been trying to make out that the Coal Board has misjudged the situation in these two pits and that it is a bungler and an amateur, and does not know its job. I have yet to learn that the hon. Member has the technical skill to run a colliery.

The basic problem of the mining industry today is the mass migration of men from it. From 1957 to 1960—a period of four years—nearly 300,000 men left the industry. That is not a trickle; it is a trek—a mass exodus on a scale which has no precedent or parallel in any other industry. My hon. Friend the Member for Southwark (Mr. Gunter) referred to the question of morale in the mining industry. A mass migration on this scale of men from the industry is bound to be disastrous for the morale of the men who are left. It is contagious, and it runs through the industry like a disease.

We have heard a great deal about mechanisation. Machinery can do a lot. It can replace men, in certain circumstances, but it cannot replace morale. Machinery can raise output, but it cannot raise morale. I warn the Parliamentary Secretary not to underestimate the importance of this for the future of the mining industry.

The only way to deal with it is to give the industry some kind of perspective or guidance, and to give the men employed in it some confidence that the industry has a future. They have not got that confidence now, and nothing that the Government have done will give them that confidence. Today, men are coming out more rapidly than they can be replaced by machines. They are leaving the industry for all sort of reasons, but in the anthracite coalfields the main reason is that they have no confidence in the future. The only way to give them that confidence is to give the industry some degree of stability and some perspective for the future.

We should try to define its place in the national economy and to assess the contribution that it can make towards meeting our national fuel requirements. Without some such policy—and I do not want to go into details now—the manpower crisis will deepen. The contraction that is going on will become decline, and decline will become disaster. That is why a co-ordinated national fuel power is a matter of vital urgency.

1.48 p.m.

Mr. Gerald Nabarro (Kidderminster)

The quest of my right hon. Friend the Minister of Power for brevity today, as the Motion before the House is not to reduce his salary as it was on 20th February last, caused him to omit some important figures, without which a balanced view of the financial condition of the nationalised coal industry cannot be formed. He spoke for 26 minutes today and on 24th February he spoke for 41 minutes. Both are improvements on the length of the speeches of his predecessors, which often ran up to 75 or even 90 minutes, thereby excluding much well-informed opinion from the back benches on both sides of the House.

At the outset, my right hon. Friend dwelt upon the somewhat parlous financial condition of the coal industry. He pointed to a deficit amounting to £78 million at the end of 1960 and a surplus of £21 million earned in the first half of 1961, and thus, on 30th June last, a net deficit forward of approximately £75½ million. He assured the House that he would be bringing measures to us later this year—I presume early in the days of the new Session, with emphasis upon "early"—for a further critical examination of the future financing of the industry. What he omitted to tell us today, and what must have a direct bearing on the future finances of the industry, is how much the National Coal Board is spending in the calendar year 1961 on capital account and of that sum spent on capital account or, if hon. Members wish, on capital investment, how much the Board itself is providing from its internal resources.

As the Parliamentary Secretary will readily confirm, the investment of the Board has been steadily declining in recent years. In 1959 the investment was £112 million. In 1960 it was £86 million. We have no idea at all what the capital investment of the Board is to be this year and of that investment how much is to be self-financing. My first question, therefore, to my hon. Friend the Parliamentary Secretary is whether he will tell us the amount of investment of the Board this year; how much it is finding from its own resources, and then what resort must be had to additional borrowing from the Government, if any borrowing be needed, to finance the residual which the Board cannot itself finance from its own resources.

My hon. Friend will recall that under the appropriate statutes he is required to lay a Statutory Instrument before this House whenever the total or aggregation of borrowings of the Board exceeds by the sum of £50 million or more the aggregation of the borrowings of the Board in the year immediately preceding. We have had no such Statutory Instrument this year, and I presume, therefore, that the borrowing of the Board can not have exceeded £50 million? But, what are they? The second figure, therefore, which my right hon. Friend omitted to give the House is that of the net borrowings of the Board anticipated in the current year. I hope that the Parliamentary Secretary will repair that omission, the second omission of my right hon. Friend.

I wish to spend a moment on the question of manpower. It is, of course, perfectly true that there has been a large decline in the manpower of the National Coal Board during the last year or two. In my judgment that is a very satisfactory state of affairs—

Mr. David Griffiths (Rother Valley)

Good God.

Mr. Nabarro

I said a very satisfactory state of affairs and the hon. Member for Rother Valley (Mr. D. Griffiths) immediately interjected, "Good God!"

Mr. D. J. Williams

Is the hon. Member suggesting that miners are acting wisely in getting out of the pits?

Mr. Nabarro

No, but a modern industry of the kind we are all seeking, including, I hope, the hon. Member for Neath (Mr. D. J. Williams)—and having regard to the hundreds of millions of pounds of public money poured into the pits, we should be seeking a highly mechanised and efficient industry which should be capable of competing on equal terms with any of the West European coal industries. It was the hon. Member for Southwark (Mr. Gunter) who said, parodying the late Mr. Aneurin Bevan, that collieries ought not to be maintained as historical monuments. We should not be employing in the pits one man more than is absolutely necessary and so long as the nation is getting the amount of coal it requires, then the manpower force in the pits is adequate.

The present position is that the manpower in the pits dropped greatly between 1959 and 1969, but it has not dropped very much this year. It declined from a figure of approximately 634,000 to 583,000 between the beginning and the end of 1960. But, as compared with 583,000 at the beginning of this year, on 15th October, only nine days ago, the manpower figure had dropped only by another 10,000, to 573,000. So the rate of decline of overall manpower in the pits is a great deal less this year than last year.

I would go further than these figures seem to indicate. I anticipate that within three or four years the coalmining manpower of this country should be approximately 500,000 contributing to an aggregation of coal output of approximately 200 million tons a year. Those are figures which should be the objective of all hon. Members concerned about the finances of the Coal Board; their present derangement, getting them on to an even keel, and, later, on to a profit-earning basis; and—supremely important—the competitiveness of National Coal Board products if and when we enter the Common Market. I will repeat those figures because the hon. Member for Houghton-le-Spring (Mr. Blyton) will, I hope, take a careful note. A 500,000 manpower—73,000 lower than at present, and a figure reached progressively over the next three or four years—contributing to a coal output of 200 million tons. I am not alone in these opinions. I believe—

Mr. Norman Pentland (Chester-le-Street)

The hon. Gentleman is quite right when he says that we ought not to have more men in the pits than are required and we accept that, provided that, if there is a surplus of miners, alternative employment is found for men who have to come out of the pits. But one of the most disturbing features today is that the hon. Gentleman's figure may not be reached in the future because it is the young men who are leaving the pits. I have been informed by the Minister of Defence that 11,500 young men between 18 and 30 have already joined Her Majesty's Forces. Thousands of craftsmen are among them and are leaving the pits for alternative service. That is a dangerous situation.

Mr. Nabarro

I do not think that it is a dangerous situation at all. There are certain parts of certain coal fields which are undermanned and there are other parts of other coal fields in different parts of the country where there is a surplus. The situation in the valleys of South Wales cannot be the same as in the Midlands, and especially in the West Midlands, where there is remunerative alternative employment generally available in good, modern factories a short distance away.

I am delighted to see that my right hon. Friend has returned to the Chamber. I have been castigating him for statistical omissions in his statement. He will readily confirm that he did not give the House his estimate of what the total coal output is likely to be this year. He did say that it might be about 4 million tons less than last year. In 1960 the figure was 193 million tons. This year I estimate that it will be about 189 million tons. The consumption of coal this year ought to be between 199 million and 200 million tons. In other words, we shall be consuming about 10 million tons more than we are producing. That is desirable, having regard to the bulging stocks of the Board, which for financial reasons must be brought down, and the gap between production and consumption has this year offset the reduction in stocks which, in my opinion, were too high at this time last year.

Let me return to the competitiveness of the Board's products. In their wisdom Her Majesty's Government decided to initiate negotiations for Great Britain entering the Common Market. I hope that we shall be debating the terms of that entry into the Common Market at a later date. Of one thing I am perfectly certain. It is that the decisions of my right hon. Friend to deny to the Steel Company of Wales an import licence for American coal and to deny to the Tunnel Portland Cement Company an import licence for Polish coal are incompatible with a policy of freeing European trade. The National Coal Board and Her Majesty's Government cannot have it both ways.

Let me preface my comments on policy in this regard by saying at once that in the present financial conditions of our country I support my right hon. Friend's refusal to grant to the Steel Company of Wales a licence to import American coal. The reason I think that that was a wise decision—had I been Minister I should have made the same decision—is that we are in a period of very heavy deficit on balance of payments oversea. But such a policy can surely be only of a temporary character.

It is manifest nonsense for Her Majesty's Ministers to parade the country and make the kind of speeches which were made so recently at the Brighton Conservative Conference—[HON. MEMBERS: "Hear, hear."] Wait for it please—by my right hon. Friend the then President of the Board of Trade, now the Secretary of State for the Colonies, that is, my right hon. Friend the Member for Barnet (Mr. Maudling), and by my right hon. and learned Friend the Chancellor of the Exchequer exhorting all manufacturers to go out into the markets of the world and sell more of their British products and—more important—to sell them more highly competitively, and yet take actions which deliberately increase the cost of production of what those manufacturers are required to sell.

Take the case of cement. I am not selecting it as a single example, but cement happens to be notoriously a product which consumes a great deal of coal per ton produced. Our cement manufacturers in Britain are now being called upon to pay nearly £3 per ton more for their coal supplies than cement manufacturers in Western Europe are called upon to pay for local coal. So, with a substantial element of cost in the production of cement, our manufacturers have their hands tied behind them and are not allowed by Government action to try to reduce the cost of their fuel by bringing in foreign coal at a much cheaper price.

Mr. D. Griffiths rose—

Mr. Nabarro

The hon. Member for bother Valley so readily interjected "Good God" a moment ago but was then contradicted by his hon. Friend the Member for Chester-le-Street (Mr. Pentland). Both are members of the National Union of Mineworkers.

Mr. James Griffiths (Llanelly)

A very good union too.

Mr. Nabarro

Fratricidal strife! My right hon. Friend the Minister of Power refuses the Tunnel Portland Cement Company its application to bring in Polish coal—

Mr. J. Griffiths

May I ask a question?

Mr. Nabarro

As it is from the Opposition Front Bench and the Deputy Leader of the Opposition—no, I am sorry, lately the Deputy Leader of the Opposition—I shall give way.

Mr, J. Griffiths

I thank the hon. Gentleman very much. Since he is developing the point, would he care, because it is important to the House and to the country to get the figures correct, to give the price at which Polish coal was offered to the company, what relation that had to production in Poland and by how much it is subsidised?

Mr. Nabarro

They may well be the facts, but I have to reply that Her Majesty's Ministers consistently refuse to divulge prices which are submitted when an industrial private enterprise firm applies for an import licence for fuel. For example, the right hon. Member for Llanelly (Mr. J. Griffiths) will recall very clearly that the Steel Company of Wales, headed by Sir Julian Pode, made the application for the importing of American coal, but none of us could drag out of the Minister of Power even what tonnage had been applied for, let alone the price at which it was offered, or the comparable price of British coal. Similarly, in the case of the Tunnel Portland Cement Company, we could not drag out of the Ministers the price of Polish coal or the relative price of British coal.

All we have is a statement by the company and a report in the Financial Times which I shall quote to the House. I am not suggesting that there should be unrestricted entry of Polish coal, but I am drawing attention to the fact that Britain is becoming an island of dear fuel in a continent of cheap and cheapening fuel and that supplies of fuel, indigenously mined, in the West of Europe are consistently cheaper than ours. This is what the Financial Times said about the higher costs in the case of the cement company: The effect of these decisions on costs has been substantial. In the case of cement, U.K. companies now appear to he paying over £3 a ton more for their fuel than their Continental competitors; since profit margins on exports tended to be thin even before this differential appeared, this increasing cost has been a major factor in the sharp fall in cement exports this year. Polish coal, which is cheap and of the quality required, would reduce costs. I hope that my right hon. Friend the Minister is listening to these words of wisdom. If the Government really means what it has been saying about the need to increase exports and to make U.K. industries competitive, there is a strong case for a licence being granted. In the present circumstances I would not have granted a licence, but I say to my right hon. Friend that if we really mean to enter the Common Market it does infer that we cannot exclude from free trade in Western Europe minerals, of an indigenous character, mined in West European countries and mined here, for there will have to be two-way traffic. That means that West European coals will enter Britain and British coals will be expected to enter Western Europe without restriction.

It is interesting to relate that the Chairman of the National Coal Board—I refer to Lord Robens—is passionately anxious to enter the Common Market. The leader of the mineworkers in the House of Commons, the hon. Member for Houghton-le-Spring (Mr. Blyton), is passionately anxious to keep Britain out of the Common Market.

Mr, William Baxter (West Stirlingshire)

And so are many of his colleagues.

Mr. Nabarro

And so are many of his colleagues; I am glad to have confirmation of what I am saying.

Mr. Charles Grey (Durham)

Where does the hon. Member for Kidderminster (Mr. Nabarro) stand?

Mr. Nabarro

I shall tell the hon. Member at an opportune moment. The point I am making is that this has to be two-way traffic. It is quite futile for the National Coal Board, backed by the Government and supported by the National Union of Mineworkers, to deny British manufacturers, who are expected to export their products all over the world, access to the cheapest sources of fuel. I hope the Parliamentary Secretary will say a few words about my commentary when he replies to this debate.

I wind up on a domestic note. What are the house coal prospects for the coming winter? I do not want to be told that we have so many million tons of large coal in stock. I want to be told that there is, or is likely to be, adequate good quality house coal available, spread evenly and distributed properly in Kidderminster, as well as Shrewsbury and Ludlow. I am delighted to see my hon. Friend the Member for Shrewsbury (Mr. Langford-Holt) in his place. [Laughter.] This is no laughing matter, for he was associated with me last winter in protesting about the shortage of house coal in Shrewsbury—

Mr. Jasper More (Ludlow)

And me.

Mr. Nabarro

And Ludlow—

Mr. Peter Walker (Worcester)

And me.

Mr. Nabarro

And Worcester, and Kidderminster. All those places were short of good quality house coal. [Interruption.] It is all very fine for members of the National Union of Mineworkers opposite who support miners' concessionary coal. They are sitting pretty. What I want is that my constituents should participate adequately in good house coal supplies this winter.

I wish to ask my hon. Friend the Parliamentary Secretary two questions in this connection. First, will there be ample supplies available through normal merchanting channels? Associated with that question I must ask the Parliamentary Secretary when he replies to say a word about prices. We have had huge increases in the price of house coal in the last few years. The general public, certainly in my constituency could not be less interested in the highfalutin' statistics related to the House today by the Minister of Power. All they are interested to know is when their house coal is going to get a bit cheaper, because it is much too dear, quality is still not as goad as it should be and supplies are not adequate to meet their winter needs.

Mr. Pentland

The hon. Member asserted that it was all right for the representatives of the National Union of Mineworkers to talk about household coal because they have free concessionary coal. In order to keep the record straight, it must be made clear that the Members of Parliament sponsored by the miners have no free concessionary coal. We have to buy it.

Mr. Nabarro

The hon. Member and his hon. Friends from the National Union of Mineworkers in the House support a policy whereby their colleagues in the union, indeed all colliers, receive concessionary coal. I am not opposed to concessionary coal. I am merely pleading that my householder constituents should have coal of equal quality and should be allowed to participate in the fruits of the national coal industry, if "fruits" is the proper description.

Mr. J. Griffiths

The miners make heavy sacrifices.

Mr. Nabarro

The consumer makes a heavy sacrifice, too, by the high cost which he has to pay for his household coal.

Mr. Griffiths

There is no comparison.

Mr. Nabarro

The behaviour of this Privy Councillor, recently Deputy Leader of the Opposition, is appalling. He does not stop talking.

Miss Margaret Herbison (Lanarkshire, North)

On a point of order. You are aware, Mr. Deputy-Speaker, of the number of hon. Members who have an interest in this debate. Is it not possible for you as Deputy-Speaker to prevent time from being wasted on the exhibitionism of the hon. Member for Kidderminster (Mr. Nabarro)?

Mr. Deputy-Speaker (Sir Gordon Touche)

I have no control over the length of speeches made by hon. and right hon. Members.

Mr. Nabarro

I am asking you, Mr. Deputy-Speaker, to try to prevent the sedentary interruptions of the right hon. Member for Llanelly. I hope that in his reply to the debate my hon. Friend the Parliamentary Secretary will disregard completely the last point of order and will treat the allegation of exhibitionism with the contempt which it so properly deserves. Also, I hope that my hon. Friend will apply himself to answering the very valid criticisms of his conduct of the nationalised coal industry which I have been privileged to address to him during the last 25 minutes.

2.14 p.m.

Mr. G. Elfed Davies (Rhondda, East)

The hon. Member for Kidderminster (Mr. Nabarro) has referred to the need of this country for cheap coal. We on this side of the House have argued for many years that there ought to be a good look into the question of who gets the profit when the coal is sold to the consumer, because there is a vast difference between the price of coal sold at the pithead and the price of coal sold to the consumer.

I want to begin my short speech by quoting from the Annual Report of the National Coal Board for 1959. Paragraph 2 of that Report, which is very important in present conditions, states: Between the end of 1956 and the end of 1959, the total consumption of British coal fell by 33 million tons. There was a comparable fall between 1929 and 1932, and at the end of 1932 350,000 miners were unemployed and most of the rest were on short time. The Board were determined that such a catastrophe should not, this time, befall the industry. Their policy was to continue the gradual reduction in deep-mined and opencast production that had begun in 1958, and to refrain from large-scale closures of collieries which would have caused the loss of valuable reserves of coal and heavy redundancy. That is a very significant statement. It briefly states the main factors which signified a new but none the less important crisis in the mining industry. What were the underlying reasons for this extraordinary change in the fortunes of the Coal Board and the miners, a change which was in complete reversal of normal trends? Up to 1956 the main danger experienced in this industry was that of an acute shortage of coal. Suddenly, as my hon. Friend the Member for Neath (Mr. D. J Williams) said earlier, as if overnight, there was a complete transformation, and that shortage of coal became one of glut. No one wanted the coal which increasing efficiency in production was producing in this country.

I believe that there were two major causes of this situation. One was of a short-term character and the other was long-term. The short-term reason was the recession in 1957 the effects of which extended in the economy of the country into the beginning of 1959 and which was the deliberate policy of the Government. Then, when there was a change in this policy and we had the boom period before the General Election of 1959, the demand for coal did not rise in the expected manner. It then became crystal clear that there was some other and more long-term reason for the continued decline in coal consumption.

Oil had emerged as a major competitor with coal for the inland market. The rapid increase in oil consumption and its effect upon the coal industry can best be shown by a table produced in the Economic Survey of 1961, which showed the production of coal in 1956 to be 214 million tons and in 1960 to be 196 million tons, a drop in coal production of nearly 20 million tons. In the same period the figure for oil increased from 38 million tons coal equivalent in 1956 to 65 million tons coal equivalent in 1960, an increase of nearly 30 million tons coal equivalent. That is an indication of the situation which existed in this industry.

Apart from the increase in the consumption of oil, there were other factors which together accelerated this decline. There was the ever-increasing efficiency in the use of coal which had been encouraged by the Government during times of shortage. There was a fall in the demand for gas and coal and a change in the basic pattern of industrial output. But one thing was clear: all these factors and causes were completely outside the influence and the control of the Coal Board or the mining industry. It is unfair to hold the coal industry responsible for this situation. On the other hand, it should be congratulated upon its achievement in minimising the serious social consequences and economic effects that would normally have resulted from such a situation were the industry still in private hands.

The House should be reminded that this was done at great cost to the Board, without any financial assistance from the Government. Instead of the wholesale closing of collieries and the indiscriminate sacking of miners—the remedy always used by the old coal owners—the unwanted production was stopped, at a cost to the Board of £27 million in 1959 alone and a further £12½ million in 1960. This tremendous burden was borne by the industry with no assistance from the Government, although the Board's policy prevented grave social consequences and was a safeguard for the future capacity of the industry. I can recall many Conservative Members protesting and arguing against this policy when it was introduced by the Board. I shudder to contemplate what would now be the position in the industry if the other method had been applied as advocated by Conservative Members.

Last year, 1960, saw the fruits of the Board's policy beginning to mature. Today, with manpower within the industry falling rapidly, the wisdom of Sir James Bowman, late Chairman of the Board, and his colleagues has been demonstrated even more effectively. In 1960, output, at 193.6 million tons, was nearly 9 million tons less than consumption at 202.4 million tons. At the same time, stocks fell by 6½ million tons. It is planned by the Board that production this year will again be lower than the estimated consumption, thus allowing for a further rundown of stocks. I am informed that up to mid-September there was a further reduction in stocks of 7 million tons.

I believe that the most serious matter facing the industry at present is the increasing loss of manpower. I know that this is worrying both sides of the industry alike. Unless this trend is halted, I believe that it will have serious consequences to the industry and to the nation as a whole. The figures in this respect are revealing and alarming. At the end of 1960 the total number of men on colliery books was 582,950, a reduction of 51,040 as compared with the end of 1959 and of 130,000 since the beginning of 1958.

The decline still continues during 1961, because at the end of September, 1961, manpower was down to 563,000, a further fall of nearly 20,000 since January. What is not generally realised and appreciated by the mass of people is that most of those who are leaving the industry are under the age of 30 or are skilled craftsmen.

I have here the latest figures of manpower requirements in the South Wales coalfield at present. I will not bother to go through the different areas. I will content myself with telling the House that in South Wales alone there are immediate requirements for 6,022 men. These are startling figures. In fact, only last week notice was given of the closure of Llanbradach Colliery because the men were wanted in other collieries which were more productive.

I notice from yesterday's Western Mail that a colliery not far from my constituency and the constituency of my hon. Friend the Member, for Rhondda, West (Mr. Iorwerth Thomas)—Gelli—is to be closed for the same reason. I do not know what the reserve position at Llanbradach is, but I am informed that at Gelli there are reserves for over twenty years. However, the pit must be closed because other collieries need the manpower. This is a very alarming position in South Wales.

I turn to the Board's financial position. For the three years 1957, 1958 and 1959 the Board's operational costs were reduced by £50 million. Costs per ton in 1959 were Is. 9d. less than in 1958, but in 1960 costs per ton rose by 2s. These financial burdens do not arise from internal causes, but are the direct result of external burdens imposed upon the Board. Same of these factors have adversely affected the accounts in no small degree. For instance, since nationalisation the Government have always had control over the price policy of the industry. For the first ten years of this period the price was held well below market level, sometimes at less than the cost of production. During this time coal could have been sold for at least £1 per ton more than it was. If the Board had not been restricted but had sold at £1 a ton more, it would have ment an accumulated surplus of £2,000 million for the Board.

That should be remembered when there is talk of importing coal. It would be well, too, for some of our industrial concerns which benefited from that policy and now speak in terms of purchasing foreign coal to keep this fact firmly in mind. Further, the industry was forced to bear a loss of £70 million on the importation of foreign coal during this time of great shortage. Subsidence costs, which, in the main, were due to mining previous to nationalisation of the industry, have cost £28 million. Payments of interest on compensation to the former coal owners have cost the Board the colossal figure of over £300 million since vesting date. These payments, £15 million in 1947, jumped to £41 million in 1960. To all this can be added the high cost of coal stocking during the past three years.

I believe that the time has come when these burdens should be removed from the shoulders of the industry, particularly in relation to costs of stocking and the Board's capital liabilities and interest payments. All these burdens are the direct result of Government decision. It was the Government who, for ten years, fixed coal prices below world prices, thereby giving an indirect subsidy of £2,000 million to private industry. It was the Government's decision that compelled the industry to carry the loss of £70 million on imported coal during shortage. Similarly with subsidence costs and the cost of coal stocking, both resulting from Government decisions.

I add my voice to those of my hon. Friends who have repeatedly asked the Minister to reconsider his attitude to this matter. I ask him, too, to get down seriously to the task of planning the future of fuel and power. We are entitled to know what part the mining industry is expected to play. We are entitled to know, also, what part oil is to play in the coming years. This should be clearly defined.

Returning, for a moment, to the subject of manpower, I have in the past two weeks spoken to quite a number of young men in my constituency, many of whom work in the industry still but many of whom have left it for better jobs outside. I am satisfied that the decline in manpower is largely due, first, to a complete loss of confidence in the future of the industry, and, secondly, to its diminishing attractiveness as compared with outside industry.

To make the industry more attractive, many things could be done. Not the least important of these is to increase the wage of the day-wage man, who now takes home less than £10 a week, and bring him far higher up in the list of wage rates of industrial workers. I will say no more about that, because it is soon to be discussed between the National Union of Mineworkers and the Board.

Again, our miners have argued for many years that seven hours per shift is sufficient for men to work in the bowels of the earth. As one who had experience of mining all his working days prior to coming to this House two years ago, I agree with that contention, and would urge that the seven-hour day be forthwith conceded. One way of keeping young men in the industry would be to pay the adult rate to young lads of 18 years of age who, by then, are in any case doing men's work. These ways of attracting manpower into the industry, and keeping in it the youth that is leaving, could be done immediately without seriously affecting the finances of the Board.

I hope that the Minister will urge upon the Government the need to relieve the Board of the burdens that I and some of my hon. Friends have mentioned. I warn the right hon. Gentleman and the Government that if no heed is taken of what we have said the industry will soon face one of its most serious and difficult crises—the crisis of a further and rapid contraction that will result in a consequential reckless abandonment of the only major indigenous resource we have. That, in the long run, would be a tragedy for the nation.

2.32 p.m.

Mr. Donald Box (Cardiff, North)

As opportunities of debating the affairs of the National Coal Board in this House are comparatively rare, I count myself fortunate in being called upon to take part in this present important debate. As it is virtually impossible for hon. Members to put down Questions of any consequence on affairs affecting the Board, I hope that my right hon. Friend the Leader of the House will give us further opportunities to discuss these matters in the future. I am sure that all hon. Members would welcome those opportunities, although I am rather more dubious about the Board.

Paragraph 1 of the Introductory Note in Volume 2 of the Report and Accounts of the Board states that the Minister of Power requires that this Report and these Accounts shall conform with the best commercial standards. In my opinion, they more than fulfil that requirement, and a word of congratulation is due to those who have prepared such lucid accounts in connection with what is admittedly a vast and complex industry. They have been compiled in such a way that even I can understand them, most of them. Although there are one or two omissions, they are, on the whole, excellent documents.

There are, however, certain aspects of the Board's policy that are a little more difficult to understand. and I am glad that we have had the benefit of hearing my right hon. Friend the Minister and the hon. Member for Southwark (Mr. Gunter) developing some of these points of policy. For example, we read in the Report that it was definite policy in 1960 for the Board to reduce production below the level of consumption in order to diminish its rather inflated stocks. In theory, I suppose that that policy sounds easy to carry out; in practice, I am sure that it is far more difficult, and although the Report says that that object has been reached I wonder at what cost it has been achieved, particularly in the matter of good will.

Obviously, with so many grades and qualities of coal it is impossible to carry out such a policy without some sacrifice by the consumer. By that I mean that the consumer often has to accept inferior grades of coal from stock when the Board either cannot or will not supply the grades he really requires. That is rather like asking the greengrocer for a cauliflower and getting a cabbage instead, or asking for carrots and being fobbed off with parsnips.

I am quite sure that the Sales Division of the Coal Board would be the first to agree that none of these customers can be regarded as being fully satisfied until they get the grades of fuel they require, and at the right price. This applies not only to industrial, but to domestic users.

On the domestic side, I note that 1½ million tons more domestic fuel were sold by the Board in 1960 than in 1959. Although it does not seem to be specifically mentioned in the Report, I believe that at least part of this increased sale of domestic coal must have followed on the Board's drive to increase its retail sales.

In this respect, I understand that the Board's Cardiff office recently installed an Answerphone so as to be able to accept orders for coal either during the day or through the night. This service was advertised, and fairly prompt delivery was promised. I understand that, as a result, that office has been so flooded with orders that it has had to suspend the service, for the time being, at any rate.

Personally, I regret that the Board should find it necessary to compete with the retail coal merchants in this sphere, but if, as I suppose is the case, it intends to continue in this way, I hope that the Minister will give a definite undertaking that such competition will always be conducted on a scrupulously fair basis. For instance, I hope that the Board will never offer grades or qualities superior to those obtainable from other coal merchants in the area at the particular time.

There is cause for concern here, because it is probably well known that retail coal merchants are restricted to the quota they sold in the previous year, which means that they can never increase their sales. On the other hand, I understand that the Board has considerably increased its retail sales in recent years, so it would seem to have an unfair advantage there.

I am sorry to see that the Board's efforts to encourage increased stocking during the summer months have not been more successful. As we know, it tried to encourage merchants and industrial and domestic users to stock up during the warmer months by offering an incentive of a price reduction of up to 20s. a ton. If this could be worked effectively it would certainly remove a very big headache for the Board.

I wonder whether one solution might not be a more aggressive sales campaign by the Board to the merchants, and by the merchants to the consumers during the summer months. In respect of an account customer, particularly, I do not think that there would be any objection if the coal merchant telephoned or called to ask the customer whether he could not take 1, 2 or even 5 tons of coal at a reduced price into his coal cellar during the summer months. I understand, however, that the best qualities of coal are always in demand at this time of the year, that is, the period from May to August. Realising that, this policy can only be carried out provided that these supplies are always available.

My hon. Friend the Member for Kidderminster (Mr. Nabarro) referred to stocks for the coming winter. Domestic stocks, I understand, are only fractionally above the danger level for the coming winter and I am sure that if we can impress even now on the consumers that they should stock up before we get the really cold spell—and if they are forewarned that it is possible that we may get a very bad cold period during the winter—a fuel crisis will be avoided.

The loss of a domestic customer is always the cause for concern by the Coal Board. The loss of an industrial customer is something of a calamity. I am sorry, therefore, to read in the Report that oil consumption had increased in the period under review by the equivalent of 7½ million tons of coal. I also read with regret—and my hon. Friend the Member for Kidderminster mentioned this, also —the decision of two leading cement companies to change, after many, many years, from coal to oil. One of these companies, Aberthaw Cement, is situated not far from my constituency and I have discussed with its chairman the reason for this change.

It appears that in the manufacture of cement the consistency of the fuel is of importance because if there are wide variations in its consistency it is reflected by wide variations in the consistency of the manufactured article.

Price, of course, enters into this and hon. Members have already heard something about it during the debate; indeed, the hon. Member for Kidderminster referred to the subject. So far as consistency is concerned. I understand that Aberthaw Cement experienced such a variation—not week by week or month by month, but delivery by delivery—that they were more or less forced to take this serious decision. It is a big and vital decision for a manufacturer who is situated virtually on the edge of a vast coalfield. He must make the change at considerable cost and much change from a fuel that should be obtainable in vast quantities with good consistency from nearby to a fuel that has to be brought thousands of miles by sea.

It would seem that there is still very great scope for improvement in this question of quality and consistency in the output of the Coal Board.

Mr. Elwyn Jones (West Ham, South)

Can the hon. Gentleman say whether the cement company in question consulted the Coal Board, or any of its technical staff, for advice on this problem of consistency? I should have thought that the function of the coal was to provide heat in the operation and that technical advice would have been available to produce the necessary consistency. It seems a remarkable state of affairs that the Coal Board, with its vast organisation, could not have assisted in this matter.

Mr. Box

I understand that this decision was taken only after careful and serious thought. I am quite certain that the Coal Board—although I cannot say so categorically—was called in and, strangely enough, the Board also supplies large quantities of fuel to a power station which is situated about half a mile from these works.

The Report shows a modest increase in coal exports for 1960 over those of the previous year and the Board emphasises that it was its main concern to retain British interests in the traditional markets—to keep the pipelines open, in other words. The Board also reports that prices in the export markets were unattractive and meant competing with Russia and Poland, about which we have heard this morning. In the light of these remarks I can hardly see how the Chairman of the Coal Board was warranted in his optimism when he welcomed Britain's possible entry into the Common Market as being an opportunity to increase Britain's sales abroad.

I hope that he is right, but I do not think, in the light of the facts now before us, that his optimism was justified. Trade is essentially a two-way business, and despite what has been said today, I am sorry that the Board of Trade found it necessary to refuse the importation of cheap American coal earlier this year. I can understand that it may have been undesirable to allow the Steel Company of Wales to import it direct, but I find it more difficult to understand why the Coal Board was itself unwilling to import it. It might have provided an opportunity of getting used to competition from abroad and, at the same time, have brought a handsome profit into the bargain. Had the importation of cheap Polish coal to the Tunnel Cement Company been allowed I do not know whether the change-over to oil decision would have been made by other concerns. If the change-over could have been avoided, then surely that importation would have been worth while.

With reference to capital expenditure, my constituency lies in the South-Western area. This subject was dealt with in some detail in Appendix II, Vol. II of the Report. Included in the table on page 71 of the Report is a reference to capital expenditure authorised for Cynheidre and Abernant. Since the hon. Gentleman the Member for Neath (Mr. D. J. Williams) referred to secondhand information, may I point out to him that all the basic information supplied to me when I sought an Adjournment debate in July of this year, was supplied in writing by the Chairman of the Coal Board.

Although my references have always been to national expenditure, and because some hon. Members opposite may have used this as an excuse for being somewhat touchy, I informed them earlier that I intended to mention this subject today and I am glad to see at least two of those I informed are present. Since the debate in July I have received a fair amount of encouragement from some unexpected quarters and I have also been subjected to what I might call a mild pressure campaign. There has been some friendly persuasion and some more in the nature of a threat—a threat that if I pursued the matter then some mysterious revelations would take place, about the source that inspired my original inquiries.

I have no intention of revealing the source of any information I have received, because that might lead to some victimisation. The fear is that in a nationalised industry if a person is an employee or a supplier and had been responsible for inspiring my original inquiries, he might be victimised.

In answering the debate on Cynheidre and Abernant, the Parliamentary Secretary did what I can only describe as a fairly good whitewashing job. He refuted in some detail the doubts I expressed about the wisdom of the past and future expenditure on these mines. "The Board is confident" and "The Board is satisfied" were expressions the Parliamentary Secretary used frequently in reply to that debate. It became apparent that less than three months later, on 19th September, the Board, or at least its Chairman, Lord Robens, was not nearly as confident or satisfied as the Parliamentary Secretary was in July.

After a visit to Cynheidre on 19th September, Lord Robens said: We have already spent £10 million on this pit, and we are faced now with further development expenditure of £5 or £6 million to provide access to reserves of anthracite which we would be getting in five or six years' time. We shall have to decide whether it is going to be an economic proposition to invest a further large sum of money in going for other reserves which are not available at the moment. I find it very difficult to reconcile those remarks with the remarks of my hon. Friend the Parliamentary Secretary as recently as July. One comes to the inevitable conclusion, therefore, that either my hon. Friend the Parliamentary Secretary was misinformed in July, or that there has been a material change in the situation at Cynheidre in the past few months. I hope that when he replies he will answer that point in some detail.

Lady Megan Lloyd George (Carmarthen)

I wondered whether the hon. Gentleman was going to continue the remarks made by Lord Robens in that same report from which I think the hon. Gentleman must have quoted. The report said: Asked about his impressions of the colliery, Lord Robens said he was 'very impressed' by the lay-out. He said 'The coal is good, the seams are good, and it is now a question of getting the manpower and management to work as a team to develop the output'. Does the hon. Gentleman really think that by helping to create a crisis of confidence he is assisting in efficient production?

Mr. Box

I agree with the hon. Lady that those remarks are quoted lower down in the report from which I quoted. I do not think I am creating a crisis of confidence by quoting those remarks and the original remarks by the Parliamentary Secretary which do not tie up.

There was also disclosed in the debate in July a decision to rephrase—that was the expression used by the Parliamentary Secretary; I called it a "slash"—the target output of Cynheidre from 1 million tons on a certain date to just about half that figure. But this decision was taken early in 1960. This is presumably an important and vital decision, and I think that we might reasonably have expected some reference to it in the Report under review today. This sort of omission only leads to suspicion that other similar rephasing has gone on in respect of other projects both in the south-western area and elsewhere.

It therefore seems to me that the public relations of the Coal Board leave much to be desired. What has the Board got to hide? Why does not the Board "come clean" on this question of national expenditure? If it did, I am quite sure that it would earn far more respect and sympathy from the general public for the difficult job that it has to do.

Mr. J. Griffiths

Let me say at once that I do not want the Coal Board or anybody else to hide anything. I want everything to be public. May I therefore ask the hon. Member a question, since I am an old anthracite miner, and so is my hon. Friend the Member for Neath (Mr. D. J. Williams). I know that last year we could have sold 172,000 tons more if we had had it.

Will the hon. Member for Cardiff, North (Mr. Box) stop hiding the names of his informants? If there are people inside the industry who have been informing him—perhaps misinforming him—I think that they are very disloyal. I therefore ask him: is he prepared to give to the Minister in confidence the names of his informants, so that the whole question can be discussed with them and the whole matter cleared up?

Mr. Box

The suggestion behind the right hon. Gentleman's intervention is that somebody should be brought to book for giving information.

Mr. J. Griffiths

No.

Mr. Box

That was the basis of my reply to the hon. Lady opposite. I would only repeat that I have no intention of disclosing the names or anything other than the basic information which has been provided by the Chairman of the National Coal Board himself. After all, I could not go higher than that.

With a capital investment approaching about £1,000 million in the coal industry since vesting date, I think that the public can reasonably expect the Board to take them into its confidence and tell them something not only of its successes but of its failures too. I am sure that is the right way to bring about a more sympathetic attitude to the industry.

Mr. D. J. Williams

Will the hon. Gentleman give way?

Mr. Box

I will give way in due course.

The results that we are reviewing today after deduction of interest show a very substantial loss, though with the increase of 7s. per ton which was granted in September last year I had hoped that we would have seen a profit in the current year.

Mr. D. Griffiths

Ridiculous.

Mr. Box

It is not ridiculous. If we look at the figures of loss per ton we see that 7s. a ton is higher than the loss per ton throughout any division last year. I hope that we may yet be able to turn this deficit into a profit, provided always that we can keep costs down and productivity up.

Mr. D. J. Williams

Will the hon. Gentleman tell us exactly what kind of information he is alleging the Coal Board is concealing?

Mr. Box

I am not alleging anything. I am pointing out that there is some cause for concern in that when a target figure for production, on which capital expenditure of so many million pounds was authorised, is reduced from 1 million tons to about half that figure, no announcement was made about it until I wrote to the Chairman of the National Coal Board for the information. I suggest that if I have to write for that information, there might well be other information that we do not know about lurking behind the scenes.

If it will satisfy the hon. Gentleman or any hon. Members opposite, I will challenge the Coal Board to issue a statement stating what targets were expected and how far those targets have been achieved on the capital projects at present being expanded in the southwestern area and in any other part of the United Kingdom.

We have heard a great deal this morning about the fall in manpower. This, as most hon. Members have pointed out, was partly as a result of the increased industrial activity throughout the country. Certainly, it applied in South Wales. I mean by that that there were so many other attractive jobs available to miners, that if they wanted to leave the industry it was not difficult for them to find those jobs. But it was also as a result of direct National Coal Board policy in reducing or curtailing production during 1960. We must not forget that that followed on the 1959 policy decision to retire about 10,000 miners who had reached the age of 65. It seems to me that the shortage is likely to become more acute in future.

The Coal Board must learn to live with prosperity and not only live with prosperity but share in prosperity, too. I wonder whether we are rapidly coming to the age of the super-miner, the man who is a specalist in the coalfield, armed with the latest in machinery, free from restrictions and backed by his union, producing sufficient coal to warrant very much higher salaries than are received now. It is possible to increase productivity per man, as we shall soon see, I fear, in the weeks approaching Christmas. Until we can devise a way of developing this pre-Christmas productivity all the year round, until we can supply the right coal at the right price in the right place and at the right time, there will be no hope of stopping the drift to oil.

3.0 p.m.

Miss Margaret Herbison (Lanarkshire, North)

Among those who have taken part in the debate so far, the only hon. Member who does not seem to be at all worried about manpower is the hon. Member for Kidderminster (Mr. Nabarro). Even the hon. Member for Cardiff, North (Mr. Box) showed in the last part of his speech that there is a manpower problem in the industry. Of course, we are used to the kind of speech we had today from the hon. Member for Kidderminster. He so desires to—

Mr. F. H. Hayman (Falmouth and Camborne)

Show off.

Miss Herbison

One could call it showing off. I call it exhibitionism.

If there is a shortage of manpower in the industry, the Minister is aware of it, the Chairman of the National Coal Board is aware of it and almost anyone who has any interest in the mining industry is aware of it. If it really does exist, as almost everyone believes it does, then the hon. Member for Kidderminster with his speech today has made the position even worse. Throughout his speech there was what I can only term an impudent condescension towards the Minister, towards the Board and towards the miners.

The Minister pointed out that the Coal Board had an accumulated deficit of £78 million. He pointed out also that, taking the Scottish Division alone, our accumulated deficit is £100 million. I shall deal with the Scottish position later. It is surely only fair, when the Minister is dealing with these figures—I think he tries to be as fair as he possibly canto set forth the burdens which the National Coal Board has had to carry but which were not of its making at all. These have been mentioned today. There was the £28 million compensation for subsidence. Much of that subsidence, as the Minister must know, was not due to workings which have taken place since the Coal Board took over but to workings which took place when the mines were privately owned.

There is the vexed question of importing and exporting coal. The accumulated deficit is £78 million, but the single burden of importing coal into this country for industry cost the Board £74 million. The figures are almost the same. If the Coal Board had not had to carry that burden, there would have been a very small deficit indeed.

The hon. Member for Kidderminster continually harped on what our position would be if we were to join the Common Market, and then, almost in the same breath, referred to the cement companies being refused permission to import coal from Poland, pointing out that Polish coal was cheaper. Even the hon. Member for Kidderminster should know that Poland is not within the Common Market area. Something else he ought to know but does not is that Poland itself is so desperately short of many world currencies that, in order to acquire those currencies, she is willing to adopt measures which we do not adopt. One such measure—one cannot blame Poland too much for it if one considers her overall position—is the selling of coal more cheaply in other countries than in her own. This is not because the Polish coalfields are run in a more businesslike way but because, owing to her need for currency, Poland's coal is sold more cheaply to gain the market. I wish that the hon. Gentleman would either try to get his facts right, or, if he knows the facts, not be so intensely desirous of blackening this industry and the people who work in it.

I wish to deal with one point made by the hon. Member for Cardiff, North. He made a great deal of the fact that the Coal Board had hidden information, had not given all the information that it should have given. He said, in effect, "When it was decided that the Board would not ask for as much production of coal, why did it not let the people know? Why did it not publish its reasons?" Does he say that to private industry? Does he ask the owners of private industry, when a decision has to be taken or reversed, "You ought as a private industrial concern to give everyone in the country the reasons for your decision."? Surely he ought not to hesitate to ask for the same standards from one as he does from the other.

Mr. Box

I agree with the hon. Lady. However, she will agree that private industry has annual general meetings every year and prepares reports and accounts in which it has to be accountable for the results. If losses are made, they have to be explained. I am looking forward to future debates of this nature as a sort of annual general meeting of the National Coal Board.

Miss Herbison

I imagine that the chance that we in this House get to ask questions in debate about the Coal Board is very often much better than that which thousands and thousands of shareholders in private industry ever get. I am sure that the hon. Gentleman knows that only too well.

I turn to the Minister's statement today. I felt that it was a most ominous statement. Perhaps it was necessary for him to make it, but it augured ill for the Scottish coal industry in particular. He said that although the cumulative deficit was £78 million Scotland had lost £100 million. I feel that when the Minister makes these statements the reasons for the losses, which are many, ought to be given. I hope that when the Parliamentary Secretary, who knows the Scottish coalfield so well, winds up he will give us all the reasons for the very great losses in the Scottish coalfield. I know many of the reasons, but I think it is important that others should know them, too.

The Minister said that close attention was being given to the financial problem and to the problem of the deficit, and that he and the Chairman of the Board wished to get the industry out of the "red" as soon as possible. I wish that to happen, too. He said that, in order to do this, it was likely that hard and painful decisions would have to be made. I have had some experience among my own people of the hard and painful decisions made by the Coal Board. I know that they meant hard and painful decisions for some of my people.

The Minister spoke about previous closures taking place with little hardship to the men. I think that, by and large, that is possibly correct. However, one cannot live among them, as I have done for many years, and not realise that grave hardship has been brought to many homes as a result of pit closures. If I examine the signs sufficiently well from the Minister's statement today, it seems to me that there will be a great many more closures and that Scotland will once again be the worst hit. I hope that when the Parliamentary Secretary replies he will give us as much information as possible.

Even if there have been no hardships for the people—which I do not for one moment accept—the closures which have taken place in Scotland, particularly in my area, have left what were once thriving communities merely dormitory areas. A dormitory area is not a good area in which to live. Although in the recent closures the Coal Board has done everything possible to find face room and oncost work for the men within travelling distance, the area is still left a dormitory area and the only evidence that the mining industry once thrived there is the ugly pit heaps scattered all around the place.

The Minister has spoken about consultation between himself and the Chairman of the Board. I hope that consultation will not end there. From his speech today, the Minister seems to be playing a big part in whatever future decisions will be made by the Board. In other words, they will not be merely Coal Board decisions; they will be very much influenced by the attitude of the Government. If those decisions are influenced by the Government's attitude, the whole Government have a great responsibility towards places like Scotland for the decisions that will be made between the Minister and the Coal Board.

My hon. Friend the Member for Southwark (Mr. Gunter), who opened the debate from this side of the House, spoke about alternative industry. We do not want pie in the sky. We do not want pious statements from Ministers that the Government will do their best to try to bring alternative industry to the areas which are hit by closures. In our area, we have had experience of the Government simply not doing that.

In whatever decisions he makes, I beg the Minister, with his colleagues and the Cabinet, to ensure that those decisions do not make further parts of Scotland derelict. I ask the Parliamentary Secretary, who knows the Scottish position not only in the coal fields but also as regards Scotland's high unemployment figures, to realise that those decisions must not be taken in isolation. They must be taken in conjunction with what the results will be and with the Government's responsibility to mitigate the grave hardships that otherwise might arise.

3.14 p.m.

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

At what is virtually the end of the debate, I am limited to only a small amount of time to deal with the various, subjects which I should like to raise. The hon. Lady the Member for Lanarkshire, North (Miss Herbison) certainly brought in a number of points concerning Scotland. The industry is subject to permanent change. That is inevitable. There must be redeployment. I agree, too, that the Government must be prepared to face the social implications of these upheavals.

The hon. Lady mentioned also, the possibility of going into the Common Market. Lord Robens has indicated that he is fully in favour of such a move; he has expressed enthusiasm and zeal for it. I know that the hon. Member for Houghton-le-Spring (Mr. Blyton), who is to wind up the debate for the Opposition, is rather against that movement and I dare say that we will hear more reasons for that when he speaks to us presently.

There may be possibilities for the additional marketing of coal. Lord Robens has said that from the French coast right up to the Baltic there are export opportunities for British coal, but I want to make this reservation. If we take Western Germany, in 1959, the proportion or allocation of the town energy consumption of coal and oil was roughly 60 per cent. and 20 per cent. According to W. J. Levy, a petroleum technologist of some standing, by 1975 those proportions will fall to 43 per cent. each, that is, for coal and oil. It would seem that the opportunity for marked expansion of exports to Europe or the West German market will be small, except for marginal quantities. Then, again, there is the case of France where, over the last decade the allocation for coal has dropped from 70 per cent. to 50 per cent.

I think that all of us in the House have to bear in mind the radical alterations which will be brought about by importing methane into Europe. Not only will it be brought by tankers, but also by pipeline across the Mediterranean. I am very glad I am carrying the hon. Member for Houghton-le-Spring with me on this. I think that he is looking a little further ahead and can see, too, that the possibility of a pipeline from Europe is envisaged underneath the channel to the United Kingdom. Then we should have to consider how far we should go ahead with developments here, within the context of a broader fuel policy.

Lord Robens has in mind, perhaps quite correctly, a remarkable expansion in the market for electrical energy. In France, one of the largest markets for natural gas is in the electrical power industries, and we have seen recently a new line constructed across the Channel from France to the United Kingdom which will bring hydro-electric power to the United Kingdom. I think that the right hon. Gentleman has also in mind a possible line coming across from Holland for off-peak periods, or it may be for peak periods.

As we integrate further with Europe we shall share Europe's facilities in fuel. It would seem to me—I must be perfectly frank about it—that if we are to consider ourselves in the framework of the Common Market we shall have to consider the nature of what it is we are up against. Is it right that we should go further with the full development of our indigenous coal, or should we take supplies of alternative fuels which are certainly abundantly available? Here we have got a glut of oil on the market.

I agree that we should consider the situation of the miners. We should consider accelerated redeployment of miners, as some other hon. Members have put forward today, into collar-and-tie jobs. I admire them for their persistence and their courage and for many things which they have done in past years, but when we come to consider this overall picture let us look at it really dispassionately.

Since 1953, the price of coal in the United Kingdom has gone up by 59 per cent; in the Common Market countries, by only 16 per cent. British manufacturers who are exporting to Europe are faced with severe competition, and with the gradual movement up of basic costs. Lord Robens is perfectly right in saying that he hopes that there will be no further price increases of the order of September, 1960. He expects stability in the price of coal. He says, "No more increase in my time of the order it was in September, 1960." According to The Times of 23rd October, he said that the coal industry must be prepared to lose on the swings what it gains on the roundabouts. He also said: But we have now reached the stage when we are perilously near having the losing swings creating more losses than the profits of the roundabouts can stand. We hear that the miners are preparing to submit a £20 million wage claim. Where is the stability in prices which Lord Robens envisages? On the other hand—and I put this forward today only as an argument—the policy of the oil industry is to keep the basic costs of British industry at a low level to enable them to compete on level terms.

The hon. Member for Southwark (Mr. Gunter) mentioned the Lurgi plants in the United Kingdom. We have had a number of reports of these already. One which has been available in another field—the Report of the Advisory Council on Scientific Policy—stated: We agree with the view put to us by the Ministry of Power that, having regard to such estimates of cost trends as can be made and to the problem of the size and continuity of our indigenous coal industry, it is justifiable to strengthen research effort on coal utilisation, including the development of processes for the complete gasification of coal, which we consider to be particularly important. I accept that, of course, and I do not think that the gas industry wants to eliminate Lurgi plants from the United Kingdom.

What the industry says is that a little more research should go into it to find out whether the estimates which have been put forward are really satisfactory. At the same time, the industry wants supplementary forms of energy which it can utilise, that is, methane or natural gas from abroad. There have been several reports on this subject. The Desford study was laid before the Gas Council and now we have the joint study which has not yet been completed, but enough water has already flowed under the bridge and it is high time that the Minister reached a decision. Either he rejects the methane project out of hand, which would be a tragedy for the industry and for the consumer in the United Kingdom, or, he can say that we will go ahead with Lurgi plants after they have proved themselves.

The Minister can also say that, running in parallel, 10 per cent. to 12 per cent. of current consumption of gas will be provided by the importation of liquid methane. My right hon. Friend also has the possibility of cracking petroleum feedstock in the United Kingdom which would produce gas and make it available substantially below the prices now quoted—a matter to which reference was made in the Report of the Select Committee on Nationalised Industries which deals with the gas industry.

The first Lurgi plant at Westfield, in Scotland, produces gas at a cost of 9.62d. per therm. Gas from the Coleshill plant, because it is not working on opencast but on hard coal, will cost 11.25d. per therm. The hon. Member for Southwark did not mention that because of methane enrichment the price can be brought down to 8.89d. per therm. It is also thought that through the further utilisation of new techniques with knowledge derived from the Desford study and from experience in Scotland it will be possible to reduce the price to 8d. or 8½d. per therm. But it is one thing for the Coal Board which has a vested interest to state the price. The Gas Council, in the Report, says that it does not regard 8¼d. to 8½. a therm as a realistic estimate of the cost of gas delivered to boards from large-scale Lurgi plants if the coal has to be paid for at the published price.

I have confined myself to the cost price of Lurgi gas. Transmission costs also have to be taken into account. One must add approximately 1d. a therm for transmission, and one must also consider getting planning permission in various parts of the country to locate these very expensive plants. The Desford plant would cost about £18 million and would probably be located in a coalfield. Because such a plant has an effluent, sewerage arrangements must be available. Therefore, not many people want it.

Nowhere in the United Kingdom as yet have we large-scale production of gas from hard coal by the Lurgi process. This brings me to the position that if we could import methane from overseas, then, on the assumption that the liquefaction plant in North Africa would not be a charge on the gas industry, and that the tankers would be jointly managed, the charge to the gas industry would be not approximately £18 million for Lurgi, but only £l0½ million. When one sees that, it begins to make sense.

I do not seek to exclude the Coal Board from holding a good market, but I simply say to it: why not share that market with others if it is advantageous to British industry? Is the morale of the coal industry so low? Is it being squeezed into a little corner? Let us be honest about this. The proportion of the total energy which it supplies in the United Kingdom is 75 per cent. Oil supplies approximately 24 per cent. Coal is not, therefore, a minor industry.

It is an immense industry, and will remain for many years a vital industry. But let us not get the matter upside down. As a long-term policy it would be possible to import methane and then, after reforming it, to deliver it at a price of about 7d. a therm. Would that not be advantageous to some other nationalised industries? Would not Members opposite and my right hon. Friend be prepared to accede to the view that he should now come to a decision and say that the gas industry should be given the opportunity of obtaining part of its supplies from other quarters?

I do not want to say any more about that now, because I have only two minutes left, but the hon. Lady the Member for Lanarkshire, North mentioned coal imports into the United Kingdom. These have been frustrated on two occasions. When one considers the fuel policy in this country, one must, apparently, determine that one cannot import coal from abroad and that there is a fuel oil tax to inhibit the expanded use of oil.

Several power stations have been converted to coal and it would seem that a subsidy has been granted, indirectly, to the mining industry in order to give it a moratorium to reduce itself to the correct size. I could not agree with the hon. Member for Southwark when he said that we must maintain a productive capacity of 200 million tons a year. I think that that figure is too high and that he knows in his own mind that a smaller but thoroughly efficient industry would be able to stand up to any competition in the home market, provided it was the right and optimum size.

I want to draw the hon. Lady's attention to a very high authority, Mr. S. W. G. Ford, who reports that since nationalisation about 20 million tons of coal has been lost through unofficial action and that, during the same period, the Coal Board imported 26¼ million tons. Had this 20 million tons not been lost, the Board could have avoided a substantial part of the loss of £74 million on imported coal, Mr. Ford said. Mr. Ford is the very distinguished President of the National Union of Mineworkers. I simply utilise his argument.

I appreciate that the Coal Board must look ahead, but if coal had been imported from Virginia on this basis—that the Steel Company of Wales agreed to take the imports providing that it agreed to do so for a period of ten to twelve years and would not come back to the Board during that period and further would agree to carry the burden of freights—the arrangement would have been thoroughly unobjectionable.

I have now exceeded my time. I say, in conclusion, that it is time that we considered not merely the miner, but also the consumer. When we consider Europe, we have to consider whether we have the right weapons to deal with Europe—I am talking in the peaceful sense. We should also consider whether we have a fuel policy at all in the United Kingdom, not, as the hon. Member for Southwark said, accepting nationalisation in principle, but considering whether we have the competitive system which will satisfy all and all alike and ensure that justice is done among the various parties concerned.

I am certain that the hon. Member is convinced, as are all hon. Members oppo- site, that the policy which they are pursuing is wrong, but many of them do not have the courage to say so.

3.31 p.m.

Mr. William Blyton (Houghton-le-Spring)

We have had a very interesting debate and I congratulate the hon. Member for Willesden, East (Mr. Skeet) on his defence of the oil interests, which was as good as any I have heard. He was actuated not by the overall national interest, but by the oil interests, which are well represented on the Government benches.

We have heard informative and interesting speeches from my hon. Friend the Member for Neath (Mr. D. J. Williams), my hon. Friend the Member for Rhondda, East (Mr. G. Elfed Davies), and my hon. Friend the Member for Lanarkshire, North (Miss Herbison). I agree with my hon. Friend the Member for Lanarkshire, North that the Minister's reference to Scotland and the pending legislation about the finances of the Coal Board mean that the Scottish industry can look forward to a very bleak time. If we are wrong, I hope that the Parliamentary Secretary will dispel our fears.

The hon. Member for Kidderminster (Mr. Nabarro) is not here. We wholeheartedly agree with the Minister's decision about the import of coal on the application of the Steel Company of Wales and a cement company. Here are two industries which are protected by tariffs and which wanted to import coal to the detriment of the British industry. If we had attempted to remove their protection, they would certainly have fought tenaciously. It must not be forgotten that neither the steel nor the cement industry cried loudly at the fuel policy when we were importing coal at a loss of £3 10s. a ton and selling it to them at the inland price. I regard their action as unpatriotic.

Many years ago I was told by a businessman that there was no patriotism or sentiment in business, and I remember that at the Bank Rate leak inquiry one man said, "It may be unpatriotic to do this, but it makes sense to me." I do not want to spend too much time on this, but I regard the applications by the steel and cement industries as rank impudence in the light of the history which I have outlined.

The difficulty I always find when we debate the National Coal Board's Report and Accounts is that the debate is held nine months after the end of the financial year, and during that time many changes can take place for better or for worse. As a result, these debates cannot be related solely to a Report which is at least nine months old.

When we look at the Report for 1960, we must look at it in the light of events over the last few years. This period has been one of severe depression in the demand for coal, and as a result the industry has been faced with serious problems. The consumption of coal has fallen by over £33 million. I remind the hon. Member for Willesden, East that there was a comparable fall in demand between 1929 and 1932 when this was a private industry, and that then 300,000 miners were put on the dole and the rest of our people were on short time, doing three or four days a week in the pits.

It is to the eternal credit of the Coal Board and those associated with it, and to the Ministry, that a tragedy like that was avoided in similar circumstances in the last few years. We have also had to face a policy of gradual reduction of deep-mined coal and of opencast production, and to refrain from large-scale closures which would have caused valuable reserves of coal to be lost forever.

It is generally accepted that oil has emerged as the greatest competitor to coal, but there are other factors apart from oil. There has been an increase in coal efficiency; a fall in the demand for gas and coke compared with the national output; and a change in the basic pattern of industrial output. It is clear to anyone who looks at them without bias that almost all these factors were outside the control of the Coal Board.

It is, therefore, wrong to hold the Board responsible for the decline in its fortunes. In fact, to me it is remarkable that the Board, without any financial help from the Government, has succeeded in minimising the bad social and economic effects which such a fall in demand would normally have caused in this industry.

Instead of sacking miners and closing pits, the Board chose to stock coal. By the end of 1959 it had stocked 36 million tons, and cut down its opencast production. This was a costly business. In 1959, the stocking of coal cost £27 million, and in 1960 it cost £12..5 million. No Government help was given to maintain these stocks. The cost was borne by the Coal Board to prevent mass unemployment and to safeguard the future capacity of the industry.

During this period, by a planned policy of reducing the number of men coming into the industry, rather than one of wholesale dismissals, we were able to offset the social effects of a cut in the labour force.

The Board refused to be stampeded into sharp cuts in production, and, nevertheless, succeeded in bringing the stocks down by 6½ million tons last year, and will bring them down by another 7 million tons this year, thereby being assured of an improvement in its finances.

During the last few years some people have raised a considerable cry for the closing down of all the uneconomic pits and the working of only the profitable ones, thereby bringing down our capacity to between 150 million and 170 million tons. These people never concern themselves with the social consequences, or consider how this country will find the foreign currency to replace the coal by imports of fuel. We all know that since the war our greatest problem has been the recurrent balance of payment crisis. Those critics who advocate the closure of the collieries have always put forward the industry's financial position in support of their argument.

I want to put the matter in perspective. In the fourteen years of nationalised mining the Board has made profits, before taxation and interest charges, of £245 million at the collieries and £75 million on ancillaries and opencast work. During that period imports of coal have cost the Board £74 million, and the stocking of coal has cost nearly £40 million. This has been done to prevent widespread unemployment, as I have said. The profits have, therefore, been reduced, by this alone, to £206 million over the period. Tax liability and interest charges on capital have amounted to £300 million, which has been paid to the Minister, and a deficiency of £78 million has now accumulated—about the same figure as that which we lost on imported coal.

Last year the profit was £20 million, and after paying the Minister £41 million by way of interest on capital there was a deficiency of £21 million. Last year, too, there was an operating profit of 1s. 8d. per ton, but interest charges turned that into a loss of 2s. 4d. per ton. The Board has said that it hopes to reach an all-clear position by 1962. I think that it will take longer than that to wipe out the accumulated deficiency. I hope that the Board succeeds, and I wish it well, but I do not share its optimism about being all-clear on this year's balance sheet. Taking everything into consideration, and I put this very forcibly to the Minister, the Board has done exceptionally well in the circumstances that I have illustrated, in connection with its accounts.

I sat for twelve months as a member of the Select Committee in investigating the gas industry. We spent many hours under the capable chairmanship of the right hon. Member for Blackpool, North (Sir T. Low). It would not be right, nor would it be possible, for me to deal today with the Select Committee's Report on that industry. Therefore, I shall deal with it only in relation to the important methane problem and the Lurgi plant, to the extent that coal is involved. The future of the gas industry rests on lowering its costs and producing a cheaper therm to complete with other fuel.

My grievance with the Gas Council is that for years it has been spending more money on research on the gasification of oil than an the development of the Lurgi process. I wish to tell the House how this came about. In the difference of opinion on coal prices in 1955 was started the breakaway from the use of coal. After all, prices are fixed under a gentleman's agreement and they must have the blessing of the Minister. We recommended some years ago a form of prices for the Coal Board subject to an Order in Council upsetting that decision in the national interest. It must be remembered that the Board, by statute, is prevented from discriminating among its customers, unlike oil companies who can give rebates to their customers.

I have always taken the view that nationalised industries should have the same freedom as have commercial undertakings to fix their prices, subject to the overriding question of the national interest. We must remember that in many of the nationalised industries, because the Minister has refused to sanction the prices at the time when they were applied for, or refused to give tariffs, the boards have lost money. This has happened when political expediency rather than commercialism has determined the Minister's actions.

There is no doubt that the relations between the Gas Council and the Coal Board have not been at all happy over the last few years. There was a long disagreement on coal prices and there was disagreement about the building of coke ovens. Now there is disagreement over the importing of the methane product. In the free-for-all competition which exists, I do not expect the Council and the Board to be genial towards each other while they are competing against each other. But I think that it is very important that they do not act in a manner which is detrimental to each other. It seems to me that what happens in this industry is what set the march away from coal to the gasification of oil.

In 1959, the plant for the gasification of oil produced 130 million cu. ft. By 1965, the figure will be 340 million cu. ft., an increase of 250 per cent. Compare these figures with the Lurgi process. One plant with a capacity of 30 million cu. ft. and another with a capacity of 40 million cu. ft., both uneconomic in size. That is the total available in 1965–66. The coal-based gas will fall from 87 per cent. in 1960 to 71 per cent. in 1966. Gas made direct from coal will fall from 61 per cent. to 49 per cent. in 1966, and if the methane proposal is sanctioned, the total quantity of coal-based gas will drop from 71 per cent. to 69 per cent. by 1966. So the outlook in this connection is anything but bright for coal.

If we join the European Coal and Steel Community we might be sacrificed to the discrimination which would result in favour of Saharan oil products and our coal and steel industries would be directly controlled in matters such as planning investments, labour mobility and most certainly in exports. I say to the Minister that if we have to put British coal on the Continent at 32s. a ton less than our inland price the Coal Board will start carrying another loss. No doubt there will be opportunities in future to discuss the economics of this matter, so I shall leave it there at the moment.

What I want to impress on the Minister is this. We know that the Coal Board is engaged in a joint study of Lurgi plants and that tenders have been got out now in relation to that. I believe that if Lurgi plants can replace present methods of making gas by carbonisation, about 20 million tons of coal per annum would be required to produce the present annual output of gas. If we can be successful in this venture it is likely that that 20 million tons will be increased by increased gas consumption. We have never opposed the increase of refinery tail gases, but until investigation has proved in firm figures that Lurgi cannot produce gas as cheaply as methane the Minister ought not to allow this importation to take place.

Mr. Skeet

Is there not a provisional arrangement between the Gas Council and French and other companies on fixed figures on the methane front, but we have no fixed figures on the Lurgi front?

Mr. D. Griffiths

Has not the Chairman of the Gas Council made it quite clear that he will do nothing to damn the nationalised gas and coal industries?

Mr. Blyton

We have the figures which were quoted by my hon. Friend and what he said about the Desford plant is quite true, that it can produce 20 per cent. more than was originally estimated. All I ask the Minister is that he should not give a decision on this very important question—I shall not deal with the question of fuel coming from Algeria and all that might happen in the future—until it is proved one way or another by experiment that we can produce more cheaply by the Lurgi than by imported methane.

I wish to pass on to look at the future of the mining industry, especially in the scientific field and the development of production and manpower. There is no doubt that the future of this industry lies in a much more scientific industry making the fullest use of modern mechanised and electronic devices to win coal. I believe that is the way to stabilise prices and to have a chance to conclude long-term contracts at fixed prices.

All this means that miners of the future will have to be a highly-skilled labour force. They will have to have first-class conditions and first-class rewards. It will also mean a much smaller labour force even than that contemplated in the revised Plan for Coal. We have to look more and more at the ways in which we can make mining a more socially attractive job.

There were many people who seemed surprised when Lord Robens talked about a 32-hour week, a four-day week, working the pits on six days. As I look at the new machinery being brought into the pits, such as the Midget Miner, and such as that which the Director of Production is introducing for seams of 2 ft. 6 ins., and when I see a great tunnelling machine with one man making an 18-ft. diameter road, I believe that by 1970 we shall face entirely different pits from those which we face today. It is because these great scientific developments are coming that Lord Robens makes those comments, and I believe that by 1970, with the huge reduction in manpower, which will come to about 350,000, and with the small labour force of highly skilled men in the pits, these things may come about.

Much depends on the future Government policy towards coal. We have to face the fact that adjustments must be made as oil and other fuels take over, as they are doing now, and take an ever-increasing share of our energy needs. The real difference between us is how best this can be done. The only way—and it is one which we have persistently urged in the House—is long-term, flexible planning for fuel and power, a plan which will cover not only oil but gas, electricity and atomic energy, too.

The case for planning the fuel and power industries is now very strong. No one can dispute that as our economy grows so must the total supply of energy grow. But it must be remembered that an increase in the output in the fuel and power industries cannot be rapidly achieved, because the sinking of new pits and the construction of new electricity plants and oil refineries is very costly and they are very long-term projects.

In my opinion, if we are to avoid a future of shortages, on the one hand, and gluts, on the other, there must be an overall plan to relate output to demand. I believe that that is essential, because in this world of very rapid change in the supply of fuel, long-term requirements may be difficult to judge, because much will depend on the rate of growth of our economy as a whole and on the pace of our technical developments.

We therefore again say to the Minister that planning is now not a dirty word. In his Budget speech the Chancellor of the Exchequer talked about planning. He also told us that he would seek the help of the T.U.C. I know that it must be painful to hon. Members opposite, who came into office on the slogan of setting the people free from Socialist planning, now to raise the planning banner themselves. If all that mattered were party advantage we could rejoice that the Conservative balloon has burst and that at last there is to be some planning in the economy, but that would be too narrow a view to take.

The nation as a whole is in trouble. The generous scheme of co-operation from the continental bankers may enable us to weather the immediate balance-of-payments problem, and some of the short-term restrictions may help, too. But the startling fact has emerged that the Government now realise that there must be long-term planning. It is because they recognise that there must be planning in the larger sphere that I now urge the Minister to listen to us on the question of the planning of a fuel policy for the nation which would be for the benefit of all.

4.0 p.m.

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

What strikes me, as one who has taken part in many debates on the coal industry, is the remarkable fall in temperature which has taken place over the last year or two. The whole House is now convinced that the task of the Coal Board is so enormous that it should be given freedom from rancour and serious criticism to get on with the job. It is convinced that the Chairman should not have to look over his shoulder to see what the politicians are thinking or saying. The change is all to the good. I am certain that in the last year or two the Board has got on with its work better than it did in the old atmosphere, and I express my gratitude to those who brought about the change.

The debate began with an able, temperate and realistic speech by the hon. Member for Southwark (Mr. Gunter). It ended with an equally realistic speech by the hon. Member for Houghton-le-Spring (Mr. Blyton). Both hon. Members asked the Minister for the same thing. They have asked for it time and time again. They asked for a fuel policy. I have never been able to ascertain from the details given in speeches of hon. Members opposite what a fuel policy means in their minds. However, in the debate on 20th February my right hon. Friend made the Government's position clear. He rejected the path of protection for the coal industry. If that is what hon. Members opposite mean by a fuel policy, my right hon. Friend rejected the path of protection for the coal industry and also the opposite extreme of unrestricted competition.

Our policy is so simple that hon. Members opposite do not notice it working. It is free competition between the fuel industries and freedom of choice for the consumer. That is the whole policy succinctly stated, and it works. It works effectively. With competition, the consumer's interests are protected and the industries are kept on their toes. They have to keep themselves efficient to face competition. Therefore, we believe that competition is the right thing. We also believe that the consumer should and does know what is the best fuel for his or her purpose. Therefore, freedom of choice for the consumer is a fundamental part of our fuel policy.

Let me now take the hon. Member for Southwark to task. He made a very able speech. I admire the way in which he tackled the serious problems involved in the coal industry and other industries. He said midway through his speech, with great emphasis, that the coal industry must be able to compete. My hon. Friends and I agree with that. Of course it must be able to compete. He then asked the Minister to evolve a policy which would make competition unnecessary. The hon. Member would, through his national fuel council, which I appreciate he put forward very seriously, have everybody's share nicely allocated.

Mr. Gunter

I must have been very obtuse. I have been long enough in politics to know that a policy can never be determined merely by someone say- ing that in 1970 an industry will do a certain thing. That is not the point. What we are arguing is that sufficient forethought is not being given to the proper assessment of the roles and functions of different sections of the fuel industry. The best brains in the country should examine the problem with a view to determining what planning is necessary, what will be the share of various sections of the industry and what the farm is to be for the industry.

Mr. George

We think that the best brains in the country are looking at it now. If I misjudged the hon. Member for Southwark in his intentions, I apologise, but they were quite clearly stated from behind him. It was stated time and time again that the output should be fixed. The hon. Member mentioned 200 million tons so consistently that I thought that his intention was to have it fixed by his new body. In any case, it is no part of our policy to fix what tonnage or output any industry should be allocated. We believe that competition should direct the size of any industry; that that should be determined by its competitive ability, and by nothing else. That is done in full, free and fair competition such as we on this side of the House believe in most sincerely. We believe it to be best for the country, for the industry and for the consumer.

Miss Herbison

I am trying to follow the Minister. He says that we do not seem to understand the Government's case, but it is very difficult to do so, particularly after his last statement that his Government believe that there should be competition in industry and that each industry should face up to this competition. If one were to accept that as a general view, what about our food industry? Do the Government accept that point there?

Mr. George

I thought that today we were discussing the coal industry, and that all our remarks were in that context.

The hon. Members for Southwark, for Neath (Mr. D. J. Williams) for Rhondda, East (Mr. G. Elfed Davies) and for Houghton-le-Spring all raised the very serious question of the fall in manpower. Nobody can ignore the fact that this fall has gone beyond the point planned. It may well be true that the number of men now in the industry would be sufficient to produce the necessary output if they were in the right place, but they are not in the right place.

We have to face the fact that we now have new collieries and reconstructed collieries that are short of staff but which would be able to produce high output with high o.m.s. and thus be able to play a great part in raising productivity and removing many of the industry's troubles. But we have not the men. We have coal seams in which the coals are no longer as accessible as they used to be and which could well do with the men working them being taken from them, or going by their own decision to more productive areas.

The situation is out of balance, and the anxiety, of course, is to get it back in to balance. That is tremendously important. My right hon. Friend the Minister has said that here the local authorities are being helpful, and I would add my voice to his plea to the local authorities. If they can see their way to helping the Board in its tremendous task, it can be of great value not only to their own localities but to the nation as a whole. We do not underestimate the position—

Mr. D. Griffiths

How does the hon. Gentleman reconcile the Minister's wish to be assisted by the local authorities with the Minister of Housing's decision to knock off subsidies, as a result of which very few councils find that they can build houses at all?

Mr. George

In point of fact, the local authorities in some districts are helping the Board in their own interests and to the ultimate benefit of their own localities. I only hope, with my right hon. Friend, that that movement will spread and so assist the Board with its problems.

The hon. Member for Southwark raised the broad question of methane and the Lurgi process, as did several other hon. Members. My hon. Friend the Member for Willesden, East (Mr. Skeet), with his great knowledge of the subject, made a very eloquent speech about it, and the hon. Member for Houghton-le-Spring also referred to it. The Lurgi issue is one that must be decided on the facts when they are available. We do not yet know what the decision ought to be, but the study group is now operating and, I should say, is operating on the most friendly terms. It is looking for a real basis for the adoption of the Lurgi process in this country. The gas industry is sincere in the part it is playing in this study group and is ready, if the facts which emerge show that Lurgi is the most economic system, to find a place for it in its development plans. But the industry must await the results of the study group and base its decisions on that report.

I was surprised to hear the hon. Member for Houghton-le-Spring say that Coleshill and Westfield were uneconomic. Where did the hon. Gentleman get that information? They may not be up to the minute—after all, every plant is built sometime after it has emerged from the drawing board—but believe me, the cost of production at Westfield and Coleshill will be substantially lower than that of the carbonising plant in use. They are economic units. They were built because they would show a profitable return on the capital that would be used and I hope that, as a result of these remarks, I have removed any misconceptions.

Further, the picture that was painted by the hon. Member for Houghton-le-Spring was that the coal and gas industries were literally at each others throats. That is quite wrong.

Mr. Blyton

We took the evidence from these people.

Mr. George

Yes, but on a certain issue. There are far wider fields than a single issue and when thrashing out the right result for any particular industry or group of industries there should be differences of views and it is only by considering conflicting opinions that we get the best results. I can ease the mind of the hon. Member for Houghton-le-Spring by informing him that in the day-to-day relations these two industries get together as allies in the struggle.

In his speech the hon. Member for Southwark seemed to imply that little co-ordination existed, and he said that things were allowed to run on regardless of the consequences. Let me inform him that co-ordination is a terribly important factor and it would be most remiss of my right hon. Friend if he was not able to stand up in this House and say that he was carrying out his duties of ensuring effective co-ordination between the fuel industries. I can give the assurance that co-ordination is real, continuous, effective and acceptable.

There is continuous contact, monthly meetings at least, between my right hon. Friend and the Chairman of the N.C.B., and his staff if need be. There are meetings, if required, between my right hon. Friend and the chairmen of other nationalised fuel industries together if need be and the chairmen meet almost weekly to discuss their common problems. As I say, there is real and effective co-ordination at the moment.

The capital expenditure of all the industries is studied by the Ministry and the plans are known. I can assure the House that there is no chance of overlapping or of over or under expansion. The thing is seen as a whole and, as I have said, co-ordination is effective.

The hon. Member for Southwark raised the question of youth flowing from the industry. May I inform him that it is the youth who flow from any industry. Some have said that the youth have gone and only the aged remain. That is not true. In 1948 the average age at the face was 39.1. In 1960 it was 39.1. In 1957, when the outflow started, the average age of all wage earners was 40.5 and today it is 41.5. That is the position now so it is clear that the youth are not flowing out and it not correct to say that the industry is becoming an ageing industry.

Mr. Thomas Swain (Derbyshire, North-East)

What about compulsory retirement?

Mr. George

I listened with interest to the remarks of the hon. Member for Neath who made a sincere and well informed speech. I noted one remark which he made about the deep scar which has been left in the anthracite coalfields and the loss of confidence which the last three or four years have brought about. I was happy that he took up the question of Cynheidre and Abernant and made known to the House some of the confidence which he has in that adventure—for it is a great mining adventure. I will deal in a few moments with some of the problems that he raised.

I was sorry that my hon. Friend the Member for Cardiff, North (Mr. Box) did not make his best speech today. I am sure he will make many better speeches in the future. He charged me with giving him some wrong information during an Adjournment debate. I can assure him that it is not my task to give him wrong information, nor is it the Coal Board's task to give me wrong information. The information that he got was correct. In fact, his own speech today showed that it was correct, for he quoted Lord Robens as saying that after his visit to Cynheidre he would perhaps not invest further large sums to develop new resources. My hon. Friend said that I had been wrong in telling him that the present resources already developed were all right. Lord Robens was talking about new developments ahead, not about the developments at Cynheidre at that time. Lord Robens and the Board—I want to say this most emphatically—had, and have now, every confidence that this great investment will bring prosperity to West Wales, to the Welsh-speaking part of the country, and will help the national position increasingly as the years go on.

My hon. Friend charged me with referring to "rephasing" the target or something of the kind which, he said, I ought not to have said. He said the word should have been "slashed". It was obvious that the existing target could not be mot. Wise men face up to an issue and correct it, and that is what the National Coal Board did. The Board decided to reduce the target. I told my hon. Friend this in my speech. The target has been rephased, pushed back for a time and reduced for a time. But, the hopes for that target are now no less than they were.

Mr. Box

My criticism was not that it had been rephased but that the Coal Board apparently wanted to keep as a deep dark secret the fact that it had been rephased. The Coal Board made an important change in policy relating to output and did not say anything about it until it was asked for the information. I ask that the Board will be a little more forthcoming with its information about its failures as well as its successes.

Mr. George

There is no intention of concealing anything. The Coal Board is most open. As my hon. Friend admitted, he got all the facts and figures from the Chairman. He will always be able to get that information and I ask him to believe that the Coal Board is not concealing anything. It is doing its best to establish first-class public relations.

I now wish to turn to the remarks of my hon. Friend the Member for Kidderminster (Mr. Nabarro) in his well-informed contribution—and I mean that sincerely. He referred to the handicap—and he was right to do so—in not having available the figures for capital expenditure and for borrowing from the Exchequer by the National Coal Board. I am able now to give him some advance information which will ensure that next year when a similar debate takes place he will have had an opportunity to study this information.

The position is this. The forthcoming White Paper on public investment which will be published in a week or so, gives these figures for the coal industry. The capital investment figure for 1960–61 was £94 million for 1961–62, £97 million, and for 1962–63, £95 million. This is the first time that these figures have been disclosed.

With regard to borrowings from the Exchequer by the Coal Board, against £94 million expenditure in 1960–61, as my hon. Friend knows, the National Coal Board borrowed £2 million. This year, it is expected to borrow £12 million. It is right that I should say to my hon. Friend and to the House that these figures are somewhat distorted by the fact that coal stocks are being lifted and money is flowing into the Coal Board which enables it to borrow less from the Exchequer than it might otherwise do.

Mr. Nabarro

Do these figures indicate that good progress has been made towards the policy continually enunciated from these benches in recent years, that the Coal Board should overwhelmingly finance from its own resources its capital investment programmes year by year? Is it a proper interpretation of those figures that it is doing so now?

Mr. George

A reading of the "Revised Plan for Coal" will show that the Coal Board in its planning is reaching as quickly as possible the day when it can be relieved from turning to the Exchequer for money to finance its development, and it is making progress along that line.

My hon. Friend said also that British cement plants were paying £3 per ton more for coal than Continental plants were paying.

Mr. Nabarro

For Polish coal.

Mr. George

Paid on the Continent. My hon. Friend referred to Polish coal, but the assumption was that it was within the Common Market.

Mr. Nabarro

No. I quoted very carefully from the Financial Times, and my hon. Friend has an answer from his Ministerial advisers. I said that the price of British coal to the Tunnel Portland Cement Company was £3 per ton more than an offer of the equivalent grade of Polish coal. I did not say Common Market coal. I said Polish coal.

Mr. George

The answer is exactly the same. There are cheap packets of coal on offer just now in the European market, cheap packets of coal which may not be repeated. In general, British coal prices are lower than Continental prices, and, in general, British manufacturers enjoy cheaper coal than is enjoyed by manufacturers on the Continent of Europe.

There have been many points raised in the debate and I cannot deal with them all. I turn now to the very serious point raised by the hon. Lady the Member for Lanarkshire, North (Miss Herbison) in her anxious and sincere speech. Naturally, she is worried about what the Minister said. She read into my right hon. Friend's speech the implication that, somehow, Scotland would be seriously affected. It is true that losses in Scotland are becoming chronic. Year after year, the industry is showing heavy losses, and now they amount to over £100 million—more than the whole loss in the National Coal Board.

It has never been the practice for the Minister to communicate to the House any proposals for closures made by the National Coal Board, which alone is responsible. The National Union of Mineworkers is always informed first of decisions made by the Coal Board with regard to closures, and that usually takes place at about the end of the year. Scotland's losses are serious and, as I said, they may be chronic. They stem from one single fact, the failure of Scotland to raise its productivity, and that failure itself stems from another unfortunate fact, that great misfortunes in geology have befallen Scotland during the past few years. The deepest seams upon which, with much sound reason, Scotland based so much hope have in some cases proved terribly disappointing.

I give the hon. Lady the assurance that the National Coal Board, the Minister and the Government will consult very closely on the issues before they arise. They will consult on these matters as they have done hitherto on the social consequences of mining closures. Everything the hon. Lady has said will be studied carefully by my right hon. Friend and myself.

Miss Herbison

The Minister has said, as has been said in the past, that there will be consultation about the social consequences. I urge on him that we should have not merely consultation but results, which we have not had up to the present.

Mr. George

There will be consultation with a view to action.

I had intended to follow along the path of productivity and to emphasise what has been said today, namely, that the cure for the Coal Board's troubles lies in a rapid increase in productivity. That is true. But what the industry requires more than anything else is a revival of confidence in itself and its own future. The coal industry has had a tremendous shock. Nothing comparable has shattered the prospects of any major industry in this country at any time. As has been said, consumption fell by 30 million tons and 140,000 men left the industry. Oil, its ablest and most vigorous competitor, surged ahead, stealing its markets. Is it surprising that there should be some doubts and fears? I think that it is not. I am certain that, if the full facts and prospects were clearly stated, confidence could be regained.

I have said elsewhere that new leaders can create new moods and Lord Robens has used his great energy and enthusiasm to dispel some of the gloom. However, he cannot win his battle over- night or singlehanded. He must have allies with the same confidence in the future of coal as has been expressed by hon. Members today. Both sides can play a part in regaining confidence in the mining industry, and, as an old member of the National Union of Mineworkers, I should like to see the union organising a campaign of confidence throughout the country, getting into its mind the fact that coal has a future and putting that over to the men who, admittedly, are so worried.

The miner has a hard life and he likes to be presented with hard facts. Let me try to assess the factors which should inspire confidence in the industry. The upward surge of oil has been checked. Coal has abandoned its silent approach to sales and is proclaiming the virtues of its product with substantial success. We are selling more than we can produce. The need is higher output, not more consumption. Provided that costs can be kept under control, there is no reason why the present level of consumption should not be maintained. The industry is in a position to control its costs.

It has been said, and I say it again, that by 1965 we shall have virtually a new mining industry, perhaps 80 per cent, of output power-loaded, with able research and development teams planning more and better machines to banish the hard grinding labour from mining in order to obtain still higher output with fewer men. As the hon. Member for Houghton-le-Spring said, there are many new machines coming along, but he did not mention an important one, a ripping machine, which is almost as important as the power-loader. There are many new and important aids to productivity flowing from the pipeline. Manpower may fall, but output can rise, given the right numbers of men in the right places. I know that the Board is wrestling with this problem.

We have good leadership. My hon. and gallant Friend the Member for South Fylde (Col. Lancaster) made that clear. We have good leadership at present, good leadership coming up for the future. We now have aggressive and informed selling and virtually a new industry with concentrated working—no longer working North, South, East and West but in one direction and for as many hours as possible per day with complete mechanisation. I mean "complete" in the real sense of the word—stable holing, ripping, and all the other jobs mechanised. The days of the pick and shovel are numbered. These things are coining.

With manpower in the right places, the coal industry is in a position to fix its own share of the energy market. The ingredients of success are there and it is up to the men and management in the industry to make them a reality. Success can mean what has been pictured—shorter hours and higher rewards, less muscle, more brain, fewer toilers, more technicians and higher status all round. This is no flight of fancy. All this can be done with the tools which are now in the men's hands and with the tools which are being forged. The industry can indeed thrive and prosper in the future.

4.29 p.m.

Mr. Roy Mason (Barnsley)

I wonder whether hon. Members are aware that the Minister has misled them, particularly those who know what is happening in the mining industry. He referred to the fact that the average age of miners in the pits is less than it was twelve months ago. He should have enlightened the House that men over 65 years of age have been compulsorily retired during the past eighteen months. The Minister must not use that argument to try to point out that the mining industry is not ageing, because it is. We are urging the need for more younger people, particularly mechanics, electricians and fitters.

Since 1955 only 640,000 new industrial jobs have been created in the country and 620,000 of them have been in the South of England and the Midlands. In the whole of Scotland there has not been one new job created in the past five years. There is a dearth of young people in the mining industry in Scotland. They are gradually drifting towards the South. The Parliamentary Secretary should have explained to the House precisely the problem facing the mining industry of the dearth of young labour. We are urgently in need of young people and particularly skilled labour.

Mr. George

Perhaps these things can be dealt with in the debate on the Address.