§ GRANTS IN CONNECTION WITH STOCKS OF COAL OR COKE
§ 11.7 a.m.
§ Mr. Hamish Gray (Ross and Cromarty)
I beg to move Amendment No. 1, in page 3, line 12, after "Board" insert "(a)".
§ Mr. Deputy Speaker (Mr. Oscar Murton)
With this we may take Amendment No. 2, in page 3, line 15, at end insert—(b) in building up and maintaining stocks of coal and coke for the benefit of industrial consumers, and(c) in building up and maintaining stocks of coal and coke to meet the requirements of the domestic market in coal and coke".
§ Mr. Gray
It is significant that we are debating the Report stage of this very important measure on a Friday. I think we all feel that it is a great pity that the Government found it necessary to put on this sort of programme on a Friday. There is no doubt that a great many hon. Members would have liked to take part in this debate.
§ Mr. Eric Ogden (Liverpool, West Derby)
There are more hon. Members here this morning than on a normal Friday.
§ Mr. Gray
I accept that there are more hon. Members here than on a normal Friday, but a great many hon. Members who would have liked to be here are not here. This is the second occasion on which the Government have made a mistake with this Bill. Hon. Members will remember that the first time they tried to bring the Bill forward on Report not all the documentation was available and the Government had to change the date. One would have thought that the Government would change it to a time that was for the convenience of the House and not for the inconvenience of so many hon. Members. I do not wish to make a great issue of it, merely to get this point on the record.
§ Mr. Gray
It is very important that we do not rush through these matters merely because we all want to get away on a Friday. The business is being taken today and we must consider the amendments very carefully.
The Bill provides for grants to be made available for stocking within the Board's wholly-owned distributive companies. Unfortunately, it appears that it does not provide for similar treatment for private sector distributors.
General industrial users ordinarily carry stocks on their own premises and at their own cost. These amount to between 1.5 million tons and 2 million tons. They average overall between five weeks' and six weeks' supply at peak winter consumption levels and run down to about two weeks' supply by the end of the winter.
Over the past two years, because of the low level of industrial activity and higher fuel prices, the trend has been to reduce these stocks. This is particularly applicable to smaller concerns, but even now many of the larger concerns are reviewing their policy. We believe that there could 1925 be very serious results if the outcome of this policy review were to he a cut-back on stocks.
Coal sales to general industry in 1076-77 amounted to just under 11 million tons and supporting coal stocks reached only approximately 1.3 million tons. Most of this is carried by large to medium processing steam raising industries, notably cement, which carries approximately nine to 10 weeks' stock, aluminium smelting, which carries approximately 10 weeks' stock, and paper textiles and chemical industries, which carry about seven to eight weeks' stock.
With the present cash flow pressures, however, these larger concerns are much more aware of the amount of their capital that is tied up in these stocks and, with the attendant interest charges and land charges, great temptation is put upon them to allow these financial implications and the problems they create to override the traditional view of what is needed to ensure security of supply throughout the winter.
These trends could impose a real burden on pits and on the transportation system during peak winter demand periods.
In addition to the stocks held by industry itself, the Board traditionally carries strategic industrial quality coal stocks at the pithead amounting by end summer to about 1 million tons. These are specifically to meet the space heating demand for those categories of user who are unable to hold sufficient buffer stocks themselves. These include mainly hospitals, schools and smaller industrial and commercial premises. If the Board had to meet an extra demand from larger and medium coal users during the crucial winter months it would mean adding substantially to the strategic stock levels. This, in turn, would overload the transport system even more, which would certainly, in practice, act particularly to the detriment of smaller users who cannot stock.
We believe that it would be in the national interest to include larger general industry coal users in the provisions in the Bill for assistance with coal stocking.
A number of approaches have been made to the Government on this subject. Indeed, the Minister met representatives of the Chamber of Coal Traders. As a 1926 result of that meeting, the Minister wrote to the secretary of the chamber and tried to clarify a number of points raised by the chamber.
I regret that the chamber still feels apprehensive about the situation and would have liked something like this amendment written into the Bill. If the Minister is not able to accept the amendment, I hope that he will reiterate some of the things that he said in his letter to the secretary of the chamber.
The suggestion in the ministerial letter to the secretary of the chamber was that the Bill would extend the period in which assistance could be given. The suggestion is that the position under the 1973 Act is not fundamentally changed by this clause and that under both the previous Act and the present Bill aid would be forthcoming in respect of all qualifying stocks of coal—including domestic—owned by the National Coal Board or other producers wherever located.
On the face of it, this might appear to have removed the chamber's anxiety, but the wording of subsection (3), which specifically mentions only stocks of coal or coke built up by the two generating boards and the British Steel Corporation, might well enable the Treasury to withhold sanction for grants for stocks of coal for general industrial consumers and the domestic market on the ground that they are not Board customers of the same kind as those named in the subsection and are not, therefore, covered by the clause.
This was not clearly stated during our debates in Committee and we merely have the letter written by the Minister as confirmation. It would be very helpful if the Minister could give us some assurances on the matter, because some of the utterances in Committee do not altogether bear out the sentiment expressed in the ministerial letter. For example, the Minister stated in Committee on 5th April that:10 million tons of stock are anyway financed by the board's customers. The purpose is to help not with any stocks but with exceptional stocks … There is no need for distributors to build up exceptional stocks."— [Official Report, Standing Committee A, 5th April 1977; c. 174].These two views seem to conflict, and they cause the Chamber of Coal Traders considerable apprehension.
1927 The Minister said later that the trade accepts that it would be impracticable to bring 8,000 merchants within a stocking scheme and also that this might offend European Coal and Steel Community regulations. That is really irrelevant, because this is not what the Chamber of Coal Traders is asking the Minister to do. We are left in a state of flux. We are not sure of the Government's intention. I hope that the Minister will be able to put on record some of the implications that he expressed in the letter that he wrote to the chamber.
§ Mr. Peter Rost (Derbyshire, South-East)
I support the amendment. It is important for us to have a clear explanation from the Minister why the proposed subsidy for coal stocking is to be limited to the electricity supply industry and the British Steel Corporation. My main point is that in my assessment this is a selective application of the subsidy which is contrary to the best interests of energy conservation and a more rational use of energy.
If we are to have subsidies—and we are not arguing today whether we are in favour of subsidies—surely it would be contrary to the current tide of events and political intervention by Governments in energy strategy if such subsidies were to operate contrary to the more rational use of energy. It would be contrary to the type of proposals that President Carter is advocating in the United States and to the policy which this Government claim to be following.
I say that because presumably subsidies for coal stocking are intended to encourage coal-burn. If subsidies are to be given exclusively for the supply of electricity rather than to other large consumers in industry an artificial subsidy will be given to electricity consumption, which will be a disincentive for coal-burn in industries which use more efficient systems such as the fluidised combustion bed system. The provision in the Bill is contrary to what we are led to believe is the Government's policy—not just to encourage more coal-burn but to encourage the more efficient use of energy.
Even the most efficient power station converts only one-third of the fuel into useful electricity. The rest is rejected as heat and waste. On the other hand, in industry where there is coal-burn using 1928 the more efficient plant that is available, including the fluidised combustion bed system, where one can operate the combined heat and power cycle, the thermal efficiency of the fuel is 60 to 70 per cent. compared with 30 to 35 per cent. using electricity.
The Minister should therefore seriously consider the amendment. At least he should explain why, in proposing this subsidy in such a selective way, he has discriminated against the more efficient use of energy by the efficient use of coal-burn. This is at a time when the Government and all those who have anything constructive to say about energy strategy are advocating coal-burn and the recovery of markets which were lost in the past in industries which could use coal-burn more efficiently.
If a subsidy is needed at all, surely it is needed more where private industry has to undertake substantial capital investment to install modern plant in order to burn coal more efficiently. That is where the subsidy is really needed and where coal should be burnt more extensively, to the benefit of the coal and mining industries which we are here to promote. If we were not we would be opposing this legislation.
The Minister should seriously reconsider his line if thinking. If the Government are really concerned about energy conservation and genuinely interested in a more rational use of our energy they should take a proper view of the market. They should help to extend the market in coal in the most efficient and constructive way. That demands the extension of this subsidy to those in industry who wish to burn coal and to stock it. That would be in the best interests of the coal industry.
§ Mr. Nigel Spearing (Newham, South)
On a point of order, Mr. Deputy Speaker. I apologise to the House for raising a matter that is not related to the Bill. The first item of public business, the European Assembly Elections Bill, was presented on behalf of Mr. Secretary Rees, whose name is on the Order Paper. However, the Bill shows that it is presented by Mr. Secretary Ross.
I am not aware that there is a Minister of that name at present. There used to be a Mr. Secretary Ross, but he is no longer a Minister. This discrepancy has been 1929 noticed not only in the House but outside. Could you, Mr. Deputy Speaker, tell us if this in any way changes the status of the First Reading of the Bill?
§ Mr. Deputy Speaker
I have no doubt that the hon. Member's information will have been noticed elsewhere and that any steps necessary to correct the error will be taken in due course. I am advised that it in no way invalidates the Bill itself.
§ Mr. Ogden
The House will be grateful to my hon. Friend the Member for New-ham, South (Mr. Spearing). Whether we agree or disagree with him, we have to admit that he never misses a trick, even on a Friday.
I should declare an interest in the amendment, because I have solid fuel central heating in my "castle". No one will catch me on that. If the amendment were pased I might have some financial advantage. I doubt it, but just to be on the safe side I tell the House that that is the situation. Opposition Members might like to say what form of heating they use in their domestic establishments.
The amendment, as explained by the hon. Member for Ross and Cromarty (Mr. Gray), is different from what I thought when I first looked at it. It is not a proposal for paying direct subsidies to individual householders or companies, large or small, for their coal stocks; it is a subsidy to the National Coal Board.
The complaint has been made that the three organisations that are mentioned— the South of Scotland Electricity Board, the Central Electricity Generating Board and the British Steel Corporation—have an advantage. I hope that my hon. Friend can explain whether the advantage of the subsidy for stocking is limited to those three organisations or is spread wider. I think that it is spread wider than the three organisations that are mentioned.
I should support the amendment if its intention was that the National Coal Board should receive some financial support from central Government for taking on to its own books the extra cost of stocking coal. Stocks are insurance, whether they are in a personal bunker or in industry. Perhaps I may insert a plug for coal. Prices are down at the moment because summer prices are available. It is a good time to stock up.
1930 One of the objections to an extension of the subsidy is the limit on the amount of money available to either the NCB or the Government. The hon. Member for Ross and Cromarty did not spell out how much this proposal would cost. Is it a matter of sharing the amount of money available in a wider range, so that the Board would not have any more money available at the end?
Perhaps the hon. Member for Ross and Cromarty will give us a better indication of what he means. It is an attractive amendment, but it is limited by the amount of money that will be available and by the sheer organisation that it might require.
§ 11.30 a.m.
§ Mr. Neil Macfarlane (Sutton and Cheam)
I support the amendment, which stands in my name as well as that of my hon. Friend the Member for Ross and Cromarty (Mr. Gray), who so ably moved it. The hon. Member for Liverpool, West Derby (Mr. Ogden) was perhaps guilty of some slight inaccuracies here and there in his observations and interpretation. Perhaps he was also guilty of a little wishful thinking in certain parts. I imagine that the Minister will be able to highlight some of his arguments when he sums up.
I hope that the Minister will not dismiss the amendment as he dismissed those that we put before him in Committee. I do not want to be too churlish at the outset of my brief remarks, but the Minister will note that the Bill provides for grants to be made available for stocking only in the NCB's wholly owned distributive companies, whereas the amendment seeks to enable similar benefits for private sector distributors.
A look at the stocks held by the industrial users in the United Kingdom shows that there are between 1½ million and 2 million tons of coal lying fallow for several weeks at the users' own cost. I draw the cost to the Minister's attention and ask him to reflect upon the pressure on cash flow and capital. He will realise that it has had a massive effect upon many of the larger users.
I draw the attention of the House to some of the annual offtakes of some of the large private organisations and the traditional end of summer stock holding tonnages. For example, Alcan Aluminium's annual offtake is 1 million tons. At the 1931 end of the summer it has about 200,000 tons of coal stock held for several months. The annual offtake of Bowater Limited is 600,000 tons. It is left with 100,000 tons at the end of the summer. Courtaulds has an annual offtake of 500,000 tons and is left with 60,000 tons. ICI buys 400,000 tons of coal and coke a year and has 50,000 tons left over.
That represents a spectrum of between six and 10 weeks of winter stock for that spread of organisations. The cumulative offtake of the 20 largest private industrial users in the United Kingdom is about 8 million tons and over 1½ million tons are left at the summer end. That is the tonnage that is spread between the largest 20 or 25 industrial users at the end of the summer.
If the large or medium buyers decide, for economic reasons, that they can no longer continue to carry that level of stock holding, a very real burden will be added to the ability of the pits and the transportation system in coping during the peak demand of the winter months.
This is an important amendment. Many important points have been made from both sides of the House and I hope that the Minister will not dismiss the amendment. Many serious difficulties could arise if it is not taken on board. There are massive amounts of coal and coke outstanding at the end of the summer. It could become a serious issue and a major problem affecting the coal industry and the National Coal Board. I can see no reason for the Minister not being able to accept the amendment.
§ Mr. Robin Maxwell-Hyslop (Tiverton)
On a point of order, Mr. Deputy Speaker. Further to the point of order raised by the hon. Member for Newham, South (Mr. Spearing), I have been to the Public Bill Office to see the Table copy of the Bill to ascertain whose name is engrossed on the European Assembly Elections Bill as presenting it. I have to tell you, Mr. Deputy Speaker, that there is no Table copy. There is no such copy anywhere in the precincts of the House. It has not been delivered to the Table Office.
By precedent we have to rely on the Bill as presented and available in the Vote Office and not on the Table copy. If there is an error in a printed Bill made available at the Vote Office and there is a Table copy on the Table of the House, I 1932 understand that it is the Table copy that is regarded as correct. As there is no Table copy on the Table of the House we must regard as the authentic Bill the one that has been made available to hon. Members at the Vote Office. As there is no Mr. Secretary Ross in existence, will you confirm, Mr. Deputy Speaker, that the Bill has not been presented to the House?
§ Mr. Deputy Speaker
I understand that the copy to which the hon. Gentleman alludes is in the Journal Office. I can inform the hon. Gentleman that it does not effect today's business.
§ Mr. Gwynfor Evans (Carmarthen)
I raise a specific matter involving the stocking of coal at collieries that are dependent on the Carmarthen Bay Power Station. This is a matter that the Minister knows well. He will recall meeting a deputation from the area concerned some months ago. The deputation represented the National Coal Board, the Central Electricity Generating Board and the Action Committee of the Carmarthen Bay Power Station, as well as the Dyfed County Council. There was a large public meeting. I believe that the deputation impressed the Minister by being articulate and sincere in the way in which it put its case. The Minister impressed the deputation by his sincerity and the sympathy with which he listened to its case.
Although the deputation's case was put to him some months ago, nothing has since been heard. There is still a great deal of anxiety about the future of an important power station that is the only industry of any size in the area. It is an industry that burns low volatile coal, which is not done at any other power station of this type except, perhaps, at Aberthaw Power Station, where they have to use gas and electricity in order to do so.
The men in the industry and the people in the district wish to know whether the industry has a future. The Minister said at the meeting that he could say that it had a future for a year at least but he could not go much further than that. The people want to know whether they can look forward to a future extending to 1985 or 1990. I shall be grateful to the Minister, for whom we all have the 1933 greatest respect, if he will refer to this matter when he replies.
§ Mr. Gwilym Roberts (Cannock)
I do not wish to be in any way controversial in a friendly debate of this sort, but it seems that the Opposition must make up their minds somewhere along the line whether they are for or against subsidies. There is no indication in the amendment whether they are talking about additional moneys being made available for this purpose or merely a redistribution of the existing subsidy cake.
I feel that the real reason for there being an apparent limitation in the clause is that we are dealing, unfortunately, with somewhat limited resources. My concern throughout the Bill is the limited amount of money that is made available to the Board. We are aware of the increasing financial pressures that operate even over a short period, although I can see no real reason for us having to deal with somewhat limited resources.
My hon. Friend the Under-Secretary of State will probably indicate, as he did in Committee, that it would be complex and difficult to bring into the ambit of any scheme the 8,000 dealers in the domestic sector. In any case, in talking about coal we are not talking about a depreciating asset in the normal sense of the term, so the problems may not be as great as they appear.
I think that my hon. Friend the Mem-for Liverpool, West Derby (Mr. Ogden) is somewhat optimistic in hoping to be able to take advantage of any offer by the Government if the amendment is carried. I say that from my own sad experiences and those of my constituents with one or two of the private dealers. My constituents have made bitter complaints to me about the situation.
On the commercial side, too much is being made of the cash flow problem. I appreciate that these are very large stocks and that there is a problem, but we are dealing generally with very large firms here. They have very long throughputs and work not on a four-monthly basis but on a 10-year basis. This is an expected liability that they have to meet. Their calculations will have taken these factors into account at least months before the holding of the stock is involved. This is a predictable holding 1934 at every point, so I do not think that it adds particularly to their cash flow problem.
§ Mr. Macfarlane
The hon. Gentleman cannot really talk in terms of a 10-year projection of the cost cycle. Furthermore, the whole question of the funding of the annual coal stocks is an annual revenue item not a capital item. The hon. Gentleman talks about four months, but Alcan or Courtaulds have hundreds of thousands of pounds tied up in stocks, which could present serious problems.
§ Mr. Gwilym Roberts
I was not talking of 10-year predictions in this situation, but in general it is known months ahead what the level will be. It is predictable in that sense, so I do not think that the problem is very great.
There is an overwhelming argument for an encouragement to industry to invest in very high technology equipment which uses coal, but if we are to subsidise or support industry in that direction it should be directed towards investment in the complicated plant concern rather than given indirectly in support measures of this kind.
§ Mr. Patrick McNair-Wilson (New Forest)
I support the amendment for three main reasons. First, we must recognise that within the coal industry there has been a quite serious fall-off in morale as a result of the undistributed stocks being visible to the miners, who are at the same time being asked to dig more and more coal. Therefore, it has been the policy of the Government, which I support entirely, to ensure that as much of this coal is distributed as possible. The Government have chosen to make this distribution very largely to two major customers of the industry, the Central Electricity Generating Board and the iron and steel industry. I believe that to be unfair and unreasonable.
I recognise the importance of those two customers to the NCB, but if, as Minister after Minister really means what he has told us, the intention is to broaden the sales base of the industry, we must have fairness in the distribution of the subsidies and not merely have them directed towards these two giants. Many people in it believe that the domestic market is being deliberately strangled by the National 1935 Coal Board. The Minister says that that is not so, but he knows the rumours.
Secondly, we are told that the Government are instituting an inquiry into the question whether there should be more chimneys on the top of council houses. I would like to see that happen, but there will not be much point in doing it if we do not have a domestic coal market left. It behoves the Government to support their brave words by action to support that market by ensuring that our constituents are not deprived of solid smokeless or other fuel during the winter months. I have never known a winter in this House without hon. Members pointing to shortages that exist. One way of getting over shortages is to ensure adequate stocks in the hands of the domestic market.
Thirdly, industrial customers are reducing their stocks. The Minister knows it as well as I do. I have here a letter from the industrial sales manager of the National Coal Board, and I have no doubt that it has been quoted already. These stocks are reducing to a period of three to four weeks. We must recognise that if we do not build up stocks for the domestic market, and we allow the industrial market, apart from the electricity and iron and steel industries, to reduce stocks, and if we get the cold winter that must come in both North and South, we could have a desperately serious situation, in which the coal industry would not be able to meet the demand. It is a shortsighted policy merely to pander to the demands of the two giant customers and to forget the rest.
The Minister knows as much as I do what Hobart House wants. It wants to see this stocking-up provided on a much wider basis. The final sentence in the letter I have referred to reads:We believe, therefore, that it is in the national interest that larger General Industry coal users should be included in the provisions of the Bill for assisted coal stocking.That is straight from the NCB, and it speaks for itself.
§ The Under-Secretary of State for Energy (Mr. Alex Eadie)
I have listened with great interest to the points made by hon. Members on both sides of the House. The hon. Member for Ross and Cromarty (Mr. Gray) commented on the timing of these proceedings. He will 1936 remember the story of the parishioner in Scotland who was congratulated by his kirk minister on the fact that he had a new house with a bath for the first time. He told the Minister "I am looking forward to the weekend coming, when I shall be able to have a bath." He did not realise the time was now, that he could have a bath whenever he liked. I say to the hon. Gentleman that the time is now when the House should get ahead with putting this progressive measure on the statute book.
The meeting that I had with the Chamber of Coal Traders, to which the hon. Gentleman referred, was a good and harmonious one. The representatives expressed their appreciation of what the Government had done to sustain the domestic market. The hon. Gentleman will recall that coal was imported to sustain the domestic market. I tried to explain the position. In the letter which the hon. Gentleman quoted I even undertook to try to deal with some of the other problems which the chamber raised with me. The chamber made it clear that its relationship with the NCB was of a high order and that it was grateful for the assistance which it received. I hope to be able to give the hon. Gentleman some of the clarification he seeks.
The hon. Member for Derbyshire, South-East (Mr. Rost) said that we had to restore the markets. I hope that he agrees that the sooner the Bill is passed the sooner confidence in the industry will be restored and the sooner we shall get the markets. That is what the Bill is about.
§ Mr. Eadie
I certainly do not accept that. What I am saying is that the Bill is such a tremendous vote of confidence in the industry that the industry will respond and we shall get the markets.
I must tell my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) that the clause is not of direct benefit to the electricity boards or the British Steel Corporation. In so far as assistance to the NCB enables it to hold down price increases, electricity and coal consumers will benefit as a consequence.
The hon. Member for New Forest (Mr. McNair-Wilson) talked about morale. 1937 This Bill will do more for the morale of the industry than anything else, and the sooner we enact it the better. The same applies for the difficulty of meeting demand—the sooner we implement the Bill, the sooner the industry can carry out the policy laid down by the House, a policy the industry itself wants, and the sooner we shall be able to meet demand each winter.
In Committee, we were talking particularly about smokeless fuel. I am sure that the hon. Member for Carmarthen (Mr. Evans) knows that when Bettws Colliery comes into production we shall be able to assist in the anthracite market. I appreciated the tone of the speech of the hon. Member for Carmarthen and his kind remarks to me. We had a productive meeting about Carmarthen Bay Power Station, in which he has a constituency interest. But without the Bill we cannot deal with these problems, because the money necessary is provided under the Bill.
I hope soon to make recommendations arising from the work of the working party which was set up to deal with these matters. However, I can make all the recommendations I like—the hon. Member for Dundee, East (Mr. Wilson) can make all the recommendations that he likes about Scottish coal-burn—but without the Bill we cannot solve the problems. These clauses are probably the most important legislation for the industry since the nationalisation Acts.
Section 3 of the National Coal Board (Finance) Act 1976 amended the stocking aid power in the 1973 Act to enable stocking aid to be provided to the NCB not only in respect of coal in the Board's ownership but also in respect of coal which might have passed into the ownership of the Central Electricity Generating Board, the South of Scotland Electricity Board and the British Steel Corporation but which was still financed by the NCB under deferred payments arrangements.
I explained in Committee that it was sensible for the NCB to make use of such deferred payments schemes to avoid the cost of double handling and to keep coal moving from the pithead. As the 1973 Act stood, the Board was discouraged 1938 from making the best use of such schemes.
The reason why Section 3 of the 1976 Act refers only to stocks held by the electricity boards and the British Steel Corporation is that they are major users of coal, with large facilities for stocking. Those facilities are large enough to take substantial quantities of coal, over and above the amounts which organisations judge necessary for their own commercial or operational reasons.
At the end of May, the NCB was financing over 5 million tons of stocks held by the electricity boards. That is a substantion amount, and is included in the total stocks on which the NCB claims stocking aid. It is thus of substantial benefit to the Board. No similar substantial benefit would arise from extending the scope of stocking aid to include stocks financed by the NCB but held by other industrial consumers, merchants and distributors.
These consumers must maintain a certain level of stocks in their own interests. It may be mutually convenient for them and the Board to reach an agreement whereby the customer takes delivery of stocks on deferred payment terms. It is also true that the Board's practice is to allow a summer discount on domestic solid fuel. At the peak period of the year, about 300,000 tons of coal is financed by the NCB on deferred payment terms with industrial consumers and merchants. This should be contrasted with the 5 million tons financed by the Board with the electricity boards at the end of May. The scale is quite different.
If the quantity of stocks for industrial or domestic consumption is insufficient to guard against a temporary interruption of supply, this is a matter for discussion and mutual arrangement between industrial consumers, the coal trade and the National Coal Board. In any event, as I said in Committee when we discussed a similar amendment, the purpose of stocking aid is to help with exceptional stocks and not normal stocks which are built up to cope with seasonal variations in demand or to provide a contingency against local shortages or distribution difficulties. If aid was given other than for exceptional stocks, it would run counter to ECSC rules on aids to coal industries by member States.
§ Mr. Gordon Wilson (Dundee, East)
I think, generally speaking, that this amendment would be received sympathetically by hon. Members on both sides of the House, were it possible. But what would be the impact on coal-burning centres under this clause if the amendment were carried extending the scheme but without any increase in the amount of subsidy available? Would not that have a deleterious effect on any agreement which was reached, for instance, with the South of Scotland Electricity Board?
§ Mr. Eadie
It could alter the sums. I should not like to say off the cuff how serious the effect would be, but obviously more money would be involved. I am not in a position to give a direct reply to the hon. Gentleman. I always try to be accurate. My instinct is probably to agree with the hon. Gentleman. But, in the interests of accuracy, I should prefer to write to him about it because it is a matter deserving some clarification.
§ Mr. Rost
The Minister is justifying his opposition to our amendment on the ground that if the subsidy were available to industrial consumers in addition to the limited availability to the electricity industry it might contravene ECSC regulations. Can he explain why, apparently, the British Steel Corporation is included? It is, after all, part of industry. Why is that to be allowable when it is not allowable to industry at large, such as ICI, for example?
§ Mr. Eadie
The hon. Member for Derbyshire, South-East has long experience of these matters. He should know that different rules apply to the steel industry, where one is talking primarily about coke. The hon. Member raised the same matter in Committee, and I gave my reply to him on that occasion.
I was saying that the National Coal Board may wish, in the interests of efficient distribution and security of supply, to maintain stocks of industrial or domestic coal throughout the country, whether it is in merchants' premises or elsewhere. Provided that the title to this coal remains with the Board, the stocks can be included in the overall calculation of the Board's exceptional stocks for the purposes of stocking aid. This is the case under the existing powers of the 1973 Coal Industry Act and under 1940 the clause. To the extent that such stocks are more enduring than mere seasonal increases, they will count towards the total amount of stocking aid.
The hon. Member for Sutton and Cheam (Mr. Macfarlane) raised a matter related to some extent to the last point that I made. Arising out of his remarks, it is not the case that the clause applies only to the National Coal Board and its subsidiary, National Smokeless Fuels; it applies to any producer who meets the definition in subsection (2).
I hope that these explanations and the assurance that I have given that any stocks owned by the Board which are not merely seasonal in character would count towards stocking aid will satisfy hon. Members. I hope also that the House will bear in mind that when I begun my reply to the debate I commented on the good relationship which exists between the Board and the coal traders and the very helpful meeting which took place between us, when the traders expressed their appreciation of the help that we were trying to give. However, in fairness to what the hon. Member for Sutton and Cheam said, it must be pointed out that they wanted us to go further.
§ Mr. Macfarlane
I have been listening to the hon. Gentleman for the past four or five minutes, and I imagine that he is bringing his remarks to a conclusion. I have been baffled by what he said so far. Many of our arguments have not been discussed in any detail. May I ask him especially to reply to one matter which I raised? There are some 20 or 25 large industrial private users who have the better part of 10 million tons of coal outstanding at the end of the summer period. If, for economic reasons, those organisation? decided to run down their stocks seriously and drastically in order to improve their cash flow positions, what action would the Government and the National Coal Board take to try to offset a potentially serious problem?
§ Mr. Eadie
It is not the job of a Minister to answer hypothetical questions. The hon. Member is implying that this could not be done, for whatever reason it might be. To an extent, this Bill is a vote of confidence in the industry. I think that the hon. Gentleman exaggerates. It may be my inadequacy in not being able to explain the position. But I 1941 am replying to the debate on the amendment and to matters arising from the amendment. The hon. Gentleman may be unable to comprehend what I have said, or it may be due to my inability to communicate with him. But I felt that I had answered the debate. The hon. Gentleman may be dissatisfied with what I am saying. In that case, we shall have to disagree.
The hon. Gentleman is right on one matter. I am coming to the end of my remarks. I have tried to explain as best I can. I am sorry if I have not been able to explain the position to the hon. Member for Sutton and Cheam. I thought that it was perfectly clear. I have explained the implications of the clause. I have explained the relationship between industry and the National Coal Board. I am afraid that I cannot go any further.
§ Mr. Macfarlane
I comprehend what the Minister has said. My only dissatisfaction is that he has not applied his argument to our amendment.
§ Mr. Eadie
Of course, we could have this kind of exchange all the time. I thought that I had replied to all the arguments put forward in the debate, though possibly to the dissatisfaction of the hon. Member for Sutton and Cheam. But, as he anticipated, my remarks are really coming to an end.
I explained to the House that I had met the coal traders. It was a line and friendly meeting. They appreciated the help that I had given as a Minister. They appreciated the help that the National Coal Board had given. They made it clear that relations between us were of the best. I also explained the terms of the proposed legislation, and I touched on the question of the ECSC rules. Their existence is a fact which the House cannot ignore.
Having given that explanation, I hope that the Opposition will see fit to ask leave to withdraw the amendment.
§ Mr. Gray
There is no question of our withdrawing the amendment. It was interesting to hear the Minister describe the meeting that he had with the Chamber of Coal Traders. He told us that it 1942 was friendly, each side thought that the other was very nice, everyone thought the world of the National Coal Board, everyone thought the world of the help being given—but still there is a demand for our amendment. It is as simple as that.
Although the Minister has been very charming, as he always is, and he gave us a variety of reasons which, in his view, justified refusal of the amendment, he completely missed the main point. For example, he did not refer to the important matter of conservation, to which my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) referred. The amendment is important in that connection. He did not mention the important fact that the National Coal Board itself approves of what the amendment is designed to do. My hon. Friend the Member for New Forest (Mr. McNair-Wilson) made that clear at the end of his speech, quoting from a letter from the Board.
The Minister did not answer the points and questions that we have raised. He did not shoot down our arguments. He said that he did not agree with them, but at the end of it all we remain convinced that the present system is not working to the best advantage of consumers or of the country, and that our amendment would provide a much fairer basis.
For example, why should the British Steel Corporation be subsidised for the investment it has made in coal stocks, while ICI cannot be? It is as simple as that. In our view, where these moneys are available they should be made available on an equal basis. If the Minister is sincere in what he says, there is no reason why he cannot accept the amendment. It could be written into the Bill, it would make an improvement, and at the same time it would confirm the good will which the Minister told us was evinced at the highly successful meeting to which he referred.
However, we are anxious to move on and we wish to bring the debate to a conclusion. We cannot accept the Minister's answer, and we shall press the matter to a Division.
§ Question put, That the amendment be made: —
§ Question accordingly negatived.