Prices (Hansard, 7 May 1962)

§ 3. Mrs. Castle
asked the Minister of Power why the price of coal in the North West is to be increased by £1 a ton next November, compared with 10s. per ton for the rest of England and Wales.

§ Mr. Wood
The National Coal Board thought a special increase of 6s. a ton was necessary on coals in the North West to offset the heavy losses on production in its North Western Division.

§ Mrs. Castle
Is it not intolerable to penalise the consumers of the North-West in this way because they happen to live in an area where the pits are older and less economic than elsewhere, particularly in view of the fact that the North-West consumers import at least two-thirds of their needs from the newer pits elsewhere and are still being charged an extra 6s. on imports? Is this not contrary to the whole purpose of nationalisation? [HON. MEMBERS: "Oh."] Is it not destroying the principle of nationalisation which was intended to give a national product at a national price?

§ Mr. Wood
Even after taking the importation of the relatively cheaper-produced coal into account, the 6s. 7 special increase will not yield as much as the deficit in this coalfield last year. I feel, for the reasons that I have expressed in correspondence with the Domestic Coal Consumers' Council, that the National Coal Board was right to make special selective increases in the areas where its production is most expensive.

§ Mr. Nabarro
Has my right hon. Friend perceived a resolution which was sent to him by the Domestic Coal Consumers' Council on the 21st February objecting to this principle of regional increases in the price of coal, and would he now declare to the House that he has abandoned the hallowed practice since nationalisation of general coal price increases to enable the Board as a whole to pay its way, taking year with year, in favour of regional price increases to support each region paying its way, taking year with year?

§ Mr. Wood
Not only have I perceived the resolution, but I referred to it in answer to the hon. Member for Blackburn (Mrs. Castle). I drew attention to the correspondence in which I had argued with the Domestic Coal Consumers' Council that it was right for the Board to make the selective price increases in order to reduce the burden placed by Scottish and North-West losses on the general finances of the National Coal Board.

§ Mr. Blyton
Is the right hon. Gentleman aware that we view with apprehension the differential price system that is now operating, which we think is the forerunner of autonomous districts, contrary to previous statements? Does the Minister not consider that this differential price system will price Scotland, Lancashire and South Wales out of the market?

§ Mr. Wood
Perhaps it would be helpful if I drew attention to the "Plan for Coal", published in 1950, when the party opposite was governing in this country, in which it was stated that internal subsidies from one coalfield to another would be reduced to the greatest possible extent. This is the whole purpose of the selective price increases that are now being incurred.

§ Mr. J. Griffiths
Will the right hon. Gentleman give an undertaking that his assurance concerning the National Coal Board's intention to introduce selective prices to districts will not be a first step towards district agreements, and is he going to be logical about it and charge different prices from one pit to another?

§ Mr. Wood
If the right hon. Gentleman is referring to district wage agreements, I gave an undertaking in July, 1960, which I will willingly repeat now.

§ 9. Lady Tweedsmuir
asked the Minister of Power whether he will reverse the policy of charging increased selective coal prices in the Aberdeen area in view of the fact that 90 per cent. of supplies are obtained from English pits, and have been so obtained since 1880.

§ 10. Mr. Hector Hughes
asked the Minister of Power if he is aware that the selective additional increase of 10s. a ton on house coal in Aberdeen operates there in a way which, having regard to transport charges and other local features, inflicts undue hardship on the citizens of that city; and if he will now take steps to have that increase withdrawn.

§ Mr. Wood
The pricing of coal in particular areas is a matter for the National Coal Board. As my hon. Friend knows, her suggestion for dealing with the pricing of coal in Aberdeen has been passed to the Chairman of the Board for his consideration.

§ Lady Tweedsmuir
While it is in my right hon. Friend's power to have consultations with the National Coal Board on all these matters, may I ask whether he has recommended to the Board that the separate price zone area, 59A, should apply to the Aberdeen area? Secondly, can my right hon. Friend say whether he had consultations with the Coal Board in January when industrial users were allowed to obtain coal supplies from English pits at prevailing prices? Could my right hon. Friend, therefore, give his opinion why industrial users should have preference but domestic consumers should not?

§ Mr. Wood
I am sorry that the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) is not here to ask a fiery supplementary question 9 and I hope that he will be soon recovered. In answer to my hon. Friend the Member for Aberdeen, South (Lady Tweedsmuir), she will know that arrangements for domestic and commercial coal supplies and their sales are substantially different, and whether there should be fragmentation of the North of Scotland zone 59 to allow different prices to be charged in Aberdeen compared with the rest of the North of Scotland is very much a matter which the National Coal Board itself should decide. As I have told my hon. Friend, I have referred her point to the Chairman of the Board and no doubt he will give an answer in due course.

§ Mr. J. Griffiths
I am sure that all of us would wish to be associated with the good wishes which the Minister has expressed for the complete recovery of my hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes). May I ask the right hon. Gentleman whether he has had consultations with his colleagues who are interested in legislation to promote the establishment of new industries in some of these areas? Has the right hon. Gentleman borne in mind, and will he bear in mind, that some of these selective increases, apart from our objections in the mining industry, will make it difficult for industry to come to an area where the price of coal will be higher?

§ Mr. Wood
That is one of the matters which the Coal Board took into consideration and which I put before it, but the Board still felt that the reasons for making these selective increases were quite unanswerable.

§ 11. Mr. Ross
asked the Minister of Power what representations he has received from distributors in Scotland about the increased charges for domestic coal.

§ Mr. Wood
When I was considering the Board's proposals I had two meetings with the Chamber of Coal Traders, which represents distributors in all parts of Great Britain. I have since received letters from merchants' associations in Scotland to which replies will be sent shortly.

§ Mr. Ross
Is the right hon. Gentleman aware that it is no great satisfaction to 10 us to learn that coal traders in England and Wales were fixing the price of domestic coal in Scotland? What representations has the Minister since received from coal traders in Scotland? I am sure that the right hon. Gentleman is aware that the Coal Board, together with the traders, have been trying to fight a competitive war against oil in the matter of fuel consumption in Scotland. How will not only an increase but a selective increase of 10s. help?

§ Mr. Wood
The hon. Member asked what bodies have made representations. They are the Coal Merchants' Association of Scotland Ltd., the North-East of Scotland Coal Merchants' Association, and the Northern Co-operative Society Ltd., Aberdeen. I am well aware that the coal traders were most upset by this increase, but I still feel, having heard what it said, that the Coal Board was right.

§ Lady Tweedsmuir
Is my right hon. Friend aware that the Aberdeen Chamber of Commerce also made representations on this issue? Did he express any view to the Chairman of the Coal Board about development areas, such as the north-east of Scotland, that where industrial users apparently have a privilege in this respect domestic coal users should also have it?

§ Mr. Wood
The Chairman of the Coal Board was well aware of the particular difficulties which selective increases in places like Scotland would impose, but he still felt that it was right—and I agree that it was right—that they should take place.

§ Mr. Ross
Is the Minister aware that feeling is growing considerably in Scotland that the Chairman of the National Coal Board knows nothing about the problems of the mining areas and of coal consumption in Scotland?

§ 13. Mr. Nabarro
asked the Minister of Power what consultations took place between the Chairman of the National Coal Board and himself prior to coal price increases; to what areas such increases are to apply; for what reason these areas were selected; and, having regard to financial losses forward of the National Coal Board, what estimate he has made of loss reduction or profits' earning as a result of the coal price 11 increases, and the revenue yield of the latter, in the Board's current financial year ending 31st December, 1962.

§ Mr. Wood
During my regular meetings with the Chairman, I have discussed prices both generally and in relation to the recommendations of the Domestic Coal Consumers' Council. All parts of the United Kingdom are affected by the increases in house coal, but there are additional increases in Scotland and the North West where heavy losses have been incurred. The increases on industrial and house coals taken together should yield about £25 million during this year.

§ Mr. Nabarro
Will my right hon. Friend now be quite unequivocal in answering whether he is abandoning the principle of the Coal Board paying its way overall, taking year with year, and substituting for that principle a system whereby every region is required to pay its way, taking year with year? If the second assumption is correct, does he expect Scotland to pay its way, and the North West and South Wales to pay their way? What is his policy now?

§ Mr. Wood
No, Sir. I make the confident prophecy that, when I make a statement about the National Coal Board's obligations in the future five years under the recent White Paper, it will be about obligations which relate to the National Coal Board. That does not at all mean that the National Coal Board should not be free to try to reduce the burden on its total finances by making selective price increases where the losses are greatest.

§ 24. Miss Herbison
asked the Minister of Power what representations he has received from the Colville Group on the subject of the selective coal prices now to be charged to them.

§ Mr. Wood
The company has drawn my attention to the substantial increase in costs caused by the rise in coal prices last January, and says it could make considerable savings if it were allowed to import coal from the United States.

§ Miss Herbison
Is the Minister aware that in reply to a previous Question he suggested that our share of steel production would improve when the hot strip mill was functioning at Ravenscraig? Is he also aware that the cold 12 strip mill is already functioning at Gartcosh but that one of the tragedies is that the President of the Board of Trade has not yet been able to bring in industry to use the cold strip? Is he not also aware that these selective coal prices are not only making Colvilles and others wish to import coal, but are preventing other industries from coming to use the strip steel? Does not the Minister realise that there should be co-ordination between his Department and the Board of Trade if there is to be any hope for these areas?

§ Mr. Wood
The hon. Lady will readily recognise that the coal price increase for Colvilles and other steel producers could only have been avoided if the National Coal Board was prepared to carry on its operations at a greater loss than it will do in the future. I do not think that in the present state of the National Coal Board's finances I could possibly ask it to do so.

§ Miss Herbison
Can the Minister tell us on this side whether he has had any consultation with the President of the Board of Trade concerning alternative industry and with the Minister of Labour concerning the high unemployment figures? Is he aware that about 20,000 fewer men are working in the coal-mining industry as compared with a few years ago and that this is a serious matter for those of us who are interested in the well-being of our country, which is something in which the Government do not seem to have any interest?

§ Mr. Wood
The hon. Lady knows quite well that I appreciate the problems that exist. I certainly assure her that I am in constant touch with both my right hon. Friends about these problems. I hope that it will be possible to solve them.

§ 25. Mr. Steele
asked the Minister of Power in the exercise of his statutory duty to promote economy in the fuel and power industries, what estimate he made of the additional annual cost to the electricity industry in Scotland of the selective coal price increases now to be charged;

§ 26. Mr. Ross
asked the Minister of Power in the exercise of his statutory duty to promote economy in the fuel 13 and power industries, what estimate he made of the additional annual cost to the gas industry in Scotland of the selective coal price increases now to be charged.

§ Mr. Wood
The selective increases in the price of industrial coals in Scotland came into effect on 1st January last. Their extra cost in Scotland was estimated at rather more than £1½ million for the electricity industry and at about £1 million for the gas industry.

§ Mr. Steele
Is the Minister telling us that the electricity industry in Scotland has to find another £1½ million? How does he expect Scottish industry to recover? How does he expect the Board of Trade to encourage or persuade other industries to come from England to Scotland if by these selective prices he makes it impossible for them to do so?

§ Mr. Wood
I must point out to the hon. Member that there is no easy way out of these problems of the National Coal Board. It is clearly only possible to relieve the gas and electricity industries of the extra charges that I have announced by offering supplies at well below the economic cost of producing them. In the present position of the National Coal Board, that is not a practicable step to take.

§ Mr. Ross
When the Minister talks about the economic cost of production, does he mean the economic cost in Britain, in Ayrshire or in Scotland? Is there any co-ordination at all in this miserable Government? Is the Minister aware that in the debate to which he referred, and which is still continuing, we have been told that the Government are doing everything they can to promote and develop industry in Scotland? Is he aware that he is doing everything he can to prevent it?

§ Mr. Wood
The National Coal Board must have regard to the economic costs of producing the coal which the gas and electricity industries in Scotland want. The National Coal Board made a loss in Scotland last year of £19 million. Altogether, the accumulated loss is greater than the whole of the Board's loss since nationalisation and it would not be practicable for the Board to provide those coals at considerably lower than the economic cost of obtaining them.

§ Mr. Blyton
Is the Minister aware that the Gas Council told the Select Committee that it would try to do some self-financing and obtain a better market for gas? Does he not think that this policy will affect the gas industry? Will it not ensure that to produce cheaper gas, the Gas Council will want to import further methane, to the detriment of the coal industry?

§ Mr. Wood
I certainly do not think that it would be right for me to upset the plans of the Gas Council by forcing the Coal Board to allow the Gas Council to have coal at far less than its economic cost of production.