HL Deb 28 July 1915 vol 19 cc765-72

Order of the Day for the Second Reading read.


My Lords, in moving the Second Reading of this Bill I hope it will not be necessary to detain your Lordships at any length, as I venture to think you are familiar with the circumstances which have led to its introduction. We are all aware, probably from painful experience, that during the last winter the price of coal, particularly in the South of England and in London, advanced to figures much above those which are usually paid in rime of active trade. It is difficult, perhaps, completely to trace the reasons for that increase, but there is no doubt that it was largely due to the shortage of labour in consequence of a large number of miners having enlisted, particularly in the early period of the war. It has been reckoned that at the end of February last more than one-sixth of the men employed in mines had joined the Colours. It is true that some 50,000 men have been drafted into the mines from other areas, but still the shortage amounted to nearly 14 per cent., and since the end of February further reduction is understood to have occurred in the numbers at work. The natural result was a diminution of output. At the same time there were certain counteracting features, such as the limitation of the amount of coal exported.

In the latter half of the past twelve months the decrease both in the production of coal and in the amount available for home use was less than in the first half. This was to a certain extent due to the Railway Executive Committee dealing will the congestion on the railways, and I hope that the difficulties with which they then had to contend have been very much reduced if not removed. The difficulties which this question involves, owing to the exceptional nature of the industry and its variations not only in different districts but almost in the same mines, make any alteration far from easy to manage. Every effort was made to avoid having to take legislative measures to procure this result. The President of the Board of Trade has been able to enter into arrangements with a number of leading coal merchants by which a limitation has been placed upon the price of coal, and the figure at which they sell the coal in the wagon or in the trolley is limited to a certain price above that which they pay at the depôts where they receive the coal. It was hoped that this could have been still further extended, but unfortunately it was found that arrangements could not be effected without having recourse to legislation.

The essential feature of the Bill which I now have the honour to present to your Lordships is that the price of coal is limited by Clause 1 to an amount of 4s. above the price at the corresponding time last year. It has been no easy matter to arrive at an exact comparison of like with like, but efforts have been made as far as possible to do so. All corresponding terms being equal the price is not to exceed 4s. per ton above the price at the pitmouth on the corresponding date last year. That has been agreed to after a good deal of discussion, and the remaining portions of Clause 1 set up the machinery for carrying that into effect.

I now come to Clause 2. As your Lordships are probably aware, there are a number of collieries which do not possess sufficient wagons of their own to carry their coal, and wagons have to be used belonging to other collieries. A limitation is put upon the profit which those wagons can earn. This will, I hope, have some effect also in preventing high prices being charged for coal. There are, of course, many difficulties in connection with this measure. I cannot ask your Lordships for one moment to consider it to be a water-tight measure, and I certainly would not like to suggest that I regard it as a great economic instrument. It is a temporary measure solely for war purposes, and designed solely to get over a very serious and difficult problem.

There are two main sources of criticism. One is that we shall not have any check on the retail prices. As regards that I have already made allusion to the action which the President of the Board of Trade has taken. It is impossible to fix a maximum price, but we hope that the arrangements which have been made between the President of the Board of Trade and the leading London coal merchants will have the effect of preventing anything like a very large increase in the retail price. I then come to the second of the main criticisms which I know will be directed to the Bill. We have to deal with the question of existing contracts. This has provided the greatest amount of difficulty in the House of Commons, but I am glad to say that an arrangement has been effected which, if I may respectfully say so, reflects credit upon my right hon. friend the President of the Board of Trade and his advisers, who have taken great pains in endeavouring to get what was a fair compromise. It also reflects the greatest credit on the draftsmen who have been able to get into the clause the number of conflicting claims of the various contending parties. But above all I think the greatest credit is due in that this Clause has been made possible by the good sense and the good spirit shown by the various Members representing different interests. I dare say the clause is not altogether quite a simple one for anybody except an expert lawyer or draftsman to deal with, but at any rate it does represent a compromise which has been effected, and which I hope and have every reason to believe will be successful.

This Bill as it now reaches your Lordships will, I hope, have some effect upon preventing anything like panic prices occurring in the coal trade. But it will be a great mistake for anyone to suppose that under this Bill there is going to be anything like cheap coal. The Bill is not going to lower the price of coal; it is only going to prevent the price of coal being raised to undue limits. It will also have another effect, and that is to prove to those who are engaged in the industry that, whatever may have been the case in the past, undue profits through the war will not be made in the future. The question of undue profits is not one that comes within the scope of this Bill. It is a matter with which the Chancellor of the Exchequer may or may not be in a position to deal later; but at any rate it does not arise on this occasion. I say this Bill is not a perfect Bill. It deals with a difficult and complicated subject, and represents the best thought which those who have the amplest means of knowing the difficulties have been able to give to it, and they hope they have produced a Bill which will be of material use during the period for which it may be called upon to run.

Moved, That the Bill be now read 2a.—(The Duke of Devonshire.)

LORD STRACHIE had the following Motion on the Paper—

On the Motion for the Second Reading to move to resolve, That in the opinion of this House the proposals of the Bill in regard to the regulation of the price of coal are futile or inadequate. The noble Lord said: My Lords, the Motion which I have had on the Paper for some days has been amply justified by the action of the Board of Trade in another place. The noble Duke in charge of the Bill said that no doubt your Lordships were aware of what the Bill contained, but I very much doubt whether any of your Lordships, unless they were present in the House of Commons yesterday during the discussion on the Report stage or perused Hansard this morning, are really aware of the contents of the measure. I do not think the noble Duke will for one moment deny that the Bill has been practically turned inside out by the action of the Government only yesterday in the abnormal alterations that have been made. There has been very little opportunity to see this Bill in its amended form, but I suppose I cannot complain, because it does not seem to be the custom of your Lordships' House to object seriously on the ground that a Bill has been only circulated for one day, however big that Bill may be.

Your Lordships are asked to consider this Bill and pass it through all its stages to-day. I believe we are to have a Committee stage, but that will be merely formal, because I understand that no Amendments can be accepted, on the ground that in that case the Bill would have to go back to the House of Commons and would not be able to receive the Royal Assent to-morrow. Although we are to have a Committee Stage for all practical purposes we are asked to pass this important Bill without any time for consideration or any opportunity to make such Amendments as the House might deem desirable. As I have said, the President of the Board of Trade has entirely justified my assertion that the Bill was "futile or inadequate," because the measure has been recast. The Bill as introduced was a shop-window Bill—useful at an election, but for practical purposes no good at all. As a matter of fact, it only dealt with twenty per cent. of the coal that would be sold during the next twelve months. It is now true that under a provision which was introduced yesterday by the President of the Board of Trade contracts are to be broken under the Bill. When that was first suggested the President of the Board of Trade said he did not like the idea of breaking contracts, and I dare say there are many in your Lordships' House who do not like the idea; but it may be fairly said that during a great war it is a ease of "necessity knows no laws," and any previous objections that might have been entertained on the ground of the sacredness of contracts disappear under present conditions. Although contracts are allowed to be broken, they can only be broken after three months; until November they will remain in force, and eighty per cent. of the coal consumed during that period will not come under it.

The noble Duke did not tell us why the recommendations contained in the Report of the Departmental Committee set up by the President of the Board of Trade at the beginning of this year have not been adopted by the Board of Trade. Not one of those recommendations has been adopted in this Bill; on the contrary, the Bill goes in the face of the recommendation that it was undesirable to set up a maximum price at the pit head. It is extraordinary when a Government Department sets up a Departmental Committee and then legislates upon the particular subject with which the Committee had dealt, not only without adopting any of the recommendations of the Committee, but actually going in the face of them. It would have been interesting had the noble Duke explained that matter to us.

I am well aware of the reason for not wishing to put any limit on exported coal, the ground being that in these days it is very important that we should export coal in order to get paid for it and thus bring more gold into the country, though it is true that the Departmental Committee say in their recommendations that it would be a good thing to have less coal exported because prices would then have a tendency to fall. Then with regard to the position of the Admiralty under this Bill. They are in no better position than any one else as regards the coal exported for their own use or for the benefit of our Allies. It has been asserted that the Admiralty were paying 10s. per ton more for coal than the open market price in this country, and although the President of the Board of Trade said that the Admiralty were not behaving in that extravagant manner he did not say what was the amount they were paying in comparison with the current rate. I know it will be said that our Allies have very good contracts running, and that therefore as far as they are concerned they are well taken care of. But, as probably will be the case, those contracts will run out before the end of the war; then our Allies will not have any advantage and will have to pay for their coal just like any other customer. I hope the noble Duke will assure me that the reason why the Admiralty prefer only having private arrangements of their own has nothing to do with any question of commission, because it occurred to my mind that the Admiralty had been making large contracts and putting money into the hands of middlemen who buy coal on contract, and that that might be the reason why they had not come under the arrangement. When interrogated on the matter the only answer given by the President of the Board of Trade in another place—and it is rather curious that the representatives of the Board of Admiralty were conspicuous by their absence—was that it was against the public interest to make any statement. It is peculiar why it should be against the public interest to make a statement when the question was one of putting the Admiralty in a position that they need not pay more than 1s. a ton extra at the pit head.

The noble Duke saw at once that the principal objection to the Bill would be that although the coalowners' profits are limited there is no limitation of the profits of the merchants; the merchants under this Bill are exempt. The noble Duke told the House that the Board of Trade had made an arrangement with the principal coal merchants of London. That may turn out to be a good arrangement, but I am afraid it will have no effect except as regards the well-to-do people in the West-end. The poor people in the East-end, I expect, will have no benefit under that arrangement and will be exploited, as in the past, by the coal dealers. As regards the provinces, there is no guarantee that in our large cities such as Liverpool, Birmingham, and Bristol, there will be any arrangement there. I expect the difficulty was so great that it was not attempted to be got over. Although the arrangement may be satisfactory from the point of view of London, though I doubt it, it is not satisfactory from the point of view of the provinces that there has been no protection whatever for the small consumer. To my mind this question of regulating prices is a very doubtful one indeed. I am an old-fashioned Liberal who believes in the principle of supply and demand, and no doubt if you once begin regulating prices in one particular you will have demands for regulating prices of all kinds. I do not know whether any of your Lordships read an article on this Bill in the Spectator, which expressed very much the views I have endeavoured to enunciate as regards the seriousness and difficulty of dealing with the question of fixing prices generally. I will quote one sentence, which puts the whole thing in a nutshell— Politicians never seem capable of understanding that high prices, if left alone, kill themselves—first, by reducing consumption; secondly, by stimulating production. I believe that to be absolutely true, and that in the long run it will be very likely found that this Bill has done more harm than good.


Does the noble Lord move the Motion standing in his name on the Paper?



On Question, Bill read 2a.


My Lords, I know that this Bill is rather different from other Bills, but it would be a matter of great convenience not only to the Government and to the House of Commons but to the coalowners themselves if this Bill could go through its remaining stages to-night. As to the point put to me by the noble Lord, I do not know all the facts relating to the Admiralty, but I understand they did not wish to be included. They prefer to make their own arrangements; they consider their present arrangements satisfactory, and prefer to remain outside the Bill.


There is no question of commission?



Committee negatived.

Then (Standing Order No. XXXIX having been suspended): Moved, That the Bill be now read 3a.—(The Duke of Devonshire.)


On that Motion, I should like to ask the noble Duke why Ireland has been excluded from the Bill? It is very difficult to follow the debates in another place, especially as they are not now reported in the newspapers at any length, but I understood the reason to be that there are a number of small coal pits there that it is thought unfair to include within the operations of this Bill. There are also a large number of small collieries in other parts of the kingdom, and if it is fair to exclude small collieries in Ireland why is it not equally fair to exclude small collieries in this country? I hope the noble Duke will not give me the answer that one must remember the Irish vote in the House of Commons, and that that may be the reason for the exclusion.


I am quite aware of the Irish vote. I also know something about Irish coal; and, though it may be used for local purposes, I do not think it worth bothering about and bringing under the Bill.

On Question, Bill read 3a, and passed.