HL Deb 22 October 1918 vol 31 cc734-53

Order of the day for the Second Reading read.


My Lords, the Bill to which I am asking your Lordships to give a Second Reading to-day is a very short and a very simple Bill, and one which is exceedingly limited in its scope. I cannot help thinking that there may be, and indeed that there must be, in the minds of some of your Lordships a certain amount of misconception as to what the intentions of the Government really are in this matter and as to what the effect of this Bill is. As your Lordships are no doubt aware, a previous Bill dealing, with this subject was introduced in another place some six months ago or thereabouts. That Bill differed from this one in that it raised several acutely controversial questions, and the Government were of the opinion that it would not be right or proper at this moment, in the crisis of this world-wide war, to press what evidently was a controversial measure. Therefore, that Bill was withdrawn, and it has been superseded by this one, from which I think your Lordships will agree all these controversial points are absent.

In one respect I am quite sure that we are all agreed, and that is that if it should be proved that petroleum does exist in this country it is absolutely necessary that it should be properly protected and not allowed to be wasted. That, my Lords, is the only thing which this Bill sets out to do. It is true that the question of petroleum in this country is a novel one, and one as yet entirely unproved. At the same time we have the experience of other oil-producing countries to guide us in this matter, and I think your Lordships will agree that it would be a national calamity if indiscriminate and wasteful borings were to be allowed when the war is over. In some parts of America it has been calculated that as much as front 25 to 85 per cent. of the oil has been wasted in the ground, and that, owing to indiscriminate and wasteful methods of boring, the extraordinary supplies of that country are in great danger of being exhausted in the comparatively short period of about thirty years.

The sole aim and object of this Bill is to protect the petroleum in this country from a similar fate; granted, of course, that any petroleum exists here. That is done by prohibiting, when the war is over and when the Defence of the Realm Regulations have lapsed, all boring or searching for petroleum except with the authority of the Government. Beyond that this Bill does not profess to go, and I would point out that it leaves absolutely unprejudiced all controversial questions—such as, for instance, who has any right in petroleum if it should be found. It does not prejudge one way or the other the rights or claims of the owners of the surface. All these questions will have to be decided by Parliament when the war is over; and the reason that. I say that all these questions will have to be decided then is this. If your Lordships will look at Clause 2, subsection (1), you will notice that the Bill is so drawn, and deliberately so drawn, that further legislation will be necessary before the industry, if petroleum is found in the interval, can be carried on.

It is true that in Clause 1 the Bill makes it impossible for any individual to bore on his own account, but it equally will be impossible for the Government to do so when their present war powers lapse, for the Bill confers no power on the Government to enter upon any one's land for the purpose of boring. Therefore a deadlock is created, and the Government of the day will be forced then to come to Parliament, and that is the time when all these very difficult and controversial points will have to be settled—questions such as who has any rights in the petroleum if it is there, and on what basis it is to be worked. All these questions of the rights or claims of landowners are in no way prejudiced by this Bill. They are neither denied nor are they admitted, but they are left to be decided by Parliament when hostilities are over and when our thoughts can once more be diverted from the all-aborbing topic of the war.

I might, perhaps, in case there is any misunderstanding on the point, briefly sum up what the position as regards oil in this country is at the moment. The position is that as long as the war lasts the Government, as your Lordships are aware, are proceeding under the Defence of the Realm Regulations; and neither the Bill which I am bringing forward to-day, nor the Bill which the noble Duke is bringing in, can affect the situation as long as those Regulations hold good. During the time that the Government is working under the Defence of the Realm Regulations, compensation is provided for under those Regulations. It is open to the landowner to appeal for whatever compensation he thinks is due to him, to the Defence of the Realm Losses Commission. That is already provided for.

But, my Lords, when the war is over and the Defence of the Realm Regulations are no longer operative, there would, in the absence of any legislation such as I am proposing, be a scramble of speculators, and great waste in the oil, if it exists. Equally, when the Defence of the Realm Regulations lapse, the Government have no further power to enter on any land for the purpose of boring, for this Act will be the Act that deals with the subject. But at that moment, as you see by Clause 2, subsection (1), of this Bill, nobody can bore, and the right is not given to the Government to go on anybody's land for that purpose. That is the deadlock to which I referred, and that is why, if the oil industry has in the interval been proved, it will be absolutely necessary for the Government to come to Parliament to have all these points of controversy settled.

I hope, my Lords, that I have been able to dispel some of the fears of opponents of this measure, and that I have shown that the claims and rights of landowners are in no way prejudiced by this Bill; they are left exactly as they were. By reading the Bill a second time to-day, all that your Lordships do is to signify your agreement that if there should be oil in this country it must be properly protected against indiscriminate boring. And I hope, my Lords, I have shown that it will be necessary, before the industry can be carried on, that the Government of the day shall come to Parliament to settle on what lines it is to be carried on.

Before formally moving the Second Reading of the Bill, I think it would probably be for the convenience of this House, and would possibly save time and also a certain amount of duplication of debate, if I were to refer for a few moments to the Bill which is being brought in by the noble Duke and to the Motion which stands on the Paper in his name. On one point—it is a very important point—I am glad to see that we are agreed, and that is as to the necessity of protecting petroleum from indiscriminate boring. I might almost have hoped, as the noble Duke feels that as strongly as we do, to have found him an ardent supporter of the Bill of which I am in charge, because this really is all that the Bill sets out to do—to protect the oil. But when we home to the Bill introduced by the noble Duke, what do we find? We find later on all those controversial points, or the principal ones, raised in his Bill which it is the aim and the object of the Government to avoid raising now during the war, leaving them, as I have said, to be settled by Parliament when the war is over.

Take, for example, Clause 5 of the noble Duke's Bill. That introduces what is, I think, the most controversial question of all—the question of royalties. It is true that in the Bill they are not called royalties; they are clothed in different language; but the fact remains that they are royalties. And, my Lords, the royalty is not, as was suggested in the previous Bill, a certain fixed sum, but, as far as I can make out, is to vary according to the success of individual landlords in driving a bargain with the licensee. I would ask the noble Duke whether he really seriously thinks for a moment that there would be the slightest chance of the House of Commons accepting his Bill with that clause in it when one considers the fate of the Bill six months ago which proposed a certain definite small royalty; here you have an indefinite, possibly a large, one.

My Lords, I do not think it is necessary for me to go into the noble Duke's Bill at any length, although I think it might, on reflection, be found that Clause 6, for instance, might work to the detriment of certain landlords under his proposal as to the division of the proceeds, whatever they may be, amongst the landlords in a certain specified area, not according to the oil which has been extracted from below their land, but according to the surface acreage which they possess in that area. I do not wish, however, to go into those questions, because, as I have already said, the Government base their objections to his Bill on the grounds that I have already stated—that in their opinion this is not the moment to attempt to pass a very controversial measure. The Government, my Lords, prefer to leave these questions unprejudiced either way, to be solved by Parliament after the war.

I recollect on more than one occasion in this House hearing the accusation made against His Majesty's Government having brought in controversial measures during the war. In my opinion, this is really what the noble Duke and his friends are now doing, and I would most respectfully suggest to him that the moment for bringing forward his suggestions as to the methods in which oil should be worked in this country is not now, but when the war powers under which the Government are at present acting lapse, and when the Government are forced, as forced they will be, to come back to Parliament under their own Bill to settle all these difficult and controversial points. For these reasons, my Lords, the Government are unable to accede to the noble Duke's Motion that both Bills be read a second time and then committeed to a Select Committee. And I very much hope that I have been, successful in showing that the Bill is not what, I think, some of the opponents, thought it was, and that it merely protects the oil from indiscriminate boring, leaving all questions as to the ownership to, be settled later. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Elphinstone.)


My Lords, the noble Lord has made it perfectly clear what the object of the Bill is, and, if I might say so at once, I think he has acted wisely. The Bill proposes to separate two things altogether from each other. The one is inquiry as to what petroleum is available, and its preservation from destruction in the meantime. The second is a stage which is not attempted in his Bill—the stage defining the rights, personal or otherwise, for getting it. The Bill of the noble Duke goes further. For myself, I think there is a great deal in what has fallen from the noble Lord about the impossibility of getting a more controversial debate on at this stage, and there fore it is wise to proceed with the limited Bill which the noble Lord has explained, and to which I shall confine my observations.

The purpose of the Government is to find out what petroleum there is available, and to protect it. That is all. Clause 2, in the middle proviso, makes it clear that the Bill interferes with no existing right. It does not exhaust anybody's title. That is left for subsequent legislation. But there is a point to which I take some exception. The noble Lord's Bill provides for obtaining knowledge of what petroleum is there. And what powers does it give? It empowers any officer of the Ministry of Munitions to exercise the same rights for the production and examination of plans and sections kept at a mine in pursuance of section 20 of the Coal Mines Act and section 19 of the Metalliferous Mines Act, 1872, as are by those Acts conferred on inspectors. Now, my Lords, that is wholly inadequate for the purposes of the Bill. The question of what petroleum is underground is a very complicated one. I speak as one having sat for two years as Chairman of the Coal Conservation Committee. All these matters came under our review, and it became clear to us that what is needed above everything else is more knowledge. There is a Department which is charged with this business, and for some reason—I suppose because the Bill was drawn up by the Ministry of Munitions who did not give much attention to it—they are wholly excluded from the Bill. I am not sure at this moment what the position of the Geological Survey is, but I hope that it will presently come under the noble Earl who leads the House, and who is President of the Council and President of the Department of Scientific Research which has recently been established. Anyhow, it is there to obtain all the information that can be got regarding such questions as the strata which contain the hydro-carbons of the petroleum as well as of other oils. The noble Duke in this respect has, much better than the Government, provided for an Advisory Committee nominated by the Director of the Geological Survey to inquire into all these things and obtain the necessary knowledge.

But here is a Bill which is introduced for the purpose not only of the production of the petroleum that is under the ground, but for finding out where that petroleum lies, and yet it sets up no machinery which is even approaching adequacy for the purpose. All that the Ministry of Munitions officers will be able to do is to exercise the powers of the inspectors of mines to call for plans. That is not enough. The full research power which is under the noble Earl should be called into counsel, and the Director of the Geological Survey should be the person to give the advice and information which is needed. It would be very easy in Committee for the Government to introduce a clause to that effect. A few words would Do, carrying out the spirit of the noble Duke's Bill. That would make the Government's Bill worth a great deal mote than it is at present. So far as getting knowledge is concerned, I hope to see that change made, and will introduce an Amendment myself if the Government prefer it, though I think it would be very much better that the Government should do it themselves. I think, however, that the Bill is a very good one as a sort of step in the desired direction, if it is amended in this respect.


My Lords, I think that your Lordships will all agree that the main purpose of any measure such as that the Second Reading of which the noble Lord has moved to-day should be to ensure the production of a maximum amount of petroleum in the shortest possible time, and it should safeguard as far as possible the interests of all those concerned in petroleum production, and, most important of all, should ensure that Government control, in so far as it is necessary, should be exercised in as fair and as impartial and disinterested manner as possible. I would draw your Lordships' attention to Clause 2 of the noble Lord's Bill. Clause 2 confers absolute power upon the Minister of Munitions to grant or to withdraw licences as he may please to anybody. Furthermore, it empowers him to impose any terms or conditions upon licensees—that is to say, the Minister of Munitions may favour one person and may reject another, or he may impose such terms upon one man that it will not pay him to bore for petroleum. It seems to me worth while inquiring whether it is desirable that the Minister of Munitions should be granted these powers. These powers, in fact, perpetuate the present conditions under the Defence of the Realm Act, and I think it can be shown that the powers which have under that Act been granted to the Ministry of Munitions have been used in a way to retard and to hamper instead of hastening the production of petroleum; that they have not safeguarded the interests of those concerned in its production, and that they have been used in a manner which is the very reverse of impartial. If that can be shown, I think that your Lordships will agree that a very strong case has been made out for at any rate not allowing this Government Bill to pass in its present form.

In order that these charges may be substantiated, I will draw your Lordships' attention to the Government's record in this matter. The Government made a declaration as long ago as June, 1917, that drilling for oil in this country was an urgent necessity. Nothing was, however, done after that declaration until October of that year, when a Bill was introduced and failed to pass the House of Commons. Another three months elapsed, until January of the present year when this Defence of the Realm Act Regulation was issued empowering the Government, practically in the same words as in Clause 2 of this Bill, to enter on and to acquire land for the purpose of boring for petroleum and to grant licences to anybody they pleased. One would naturally have supposed that after the issue of that Regulation the Government would have lost no time in setting to work; but strange to relate, it was not until a few days ago that the first well was drilled on the Duke of Devonshire's property—that is to say, the first well was drilled nine months after this Defence of the Realm Act Regulation was issued, and sixteen months after the Government had declared that oil production was an urgent necessity.

This very strange delay in the production of petroleum has aroused a considerable amount of public interest in the Press, and various insinuations have been made against the good faith of the Government, which I venture to think, failing a satisfactory explanation, must rather tend to have the effect of undermining public confidence in the Government to a serious degree. In order that I may make what I am going to say quite clear, I must refer still further to the past history. About three and a half years ago certain landowners were in negotiation with Messrs. Pearson for boring petroleum on their estates. Those negotiations lasted a considerable time, and eventually fell through because Messrs. Pearson wished for an option of such an extended character that it practically amounted to a monopoly. These negotiations having fallen through, Messrs. Pearson entered into negotiations with the Government, and it is a remarkable fact that from the moment that Messrs. Pearson entered upon negotiations with the Government a course of consistent and apparently—I only say apparently—but on the face of it deliberate, obstruction has been adopted by the Government to all those persons trying to bore for petroleum in this country.

In order to explain what was the state of affairs produced by this obstruction I should like to read to your Lordships an extract from a letter written to the Daily Chronicle by Mr. Cunningham Craig. Mr. Cunningham Craig was an expert employed by the Research Department of the Ministry of Munitions on this subject of petroleum production, and this is what he writes— Unfortunately the Production Department was put into the hands of officials with a very meagre knowledge of the subject, and to that alone the whole mess and muddle is due. Possibly resenting the necessary control by research, possibly from mere ignorance, the Production Department threw itself into the hands of certain interests, which, rightly or wrongly, believed that the development of a British oil industry would affect them adversely. Representatives of some of these interests co-operated with, or were actually employed by, the Controller of Production, and instead of carrying out the recommendations forwarded to them the officials attempted research work themselves and Commenced a course of criticism and obstruction which has lasted almost up to the present. Colliery owners and others who were anxious to produce oil by distillation and were willing to risk their own money for that end, were discouraged or even deliberately prevented from getting to work. He goes on to say— This state of affairs caused great dissatisfaction in many quarters, while precious time was slipping away, and the dissatisfaction was not inarticulate. But something like a conspiracy of silence seems to have been deliberately engineered, possibly to save the reputation of certain incompetent officials, possibly in the interests of established industries that objected to the development of an oil industry not within their control He proceeds to speak of the very irrelevant answers given to Questions in another place on this subject. This obstruction has continued up to the present time. Latterly the excuse given was that intended legislation rendered it undesirable to grant any more licences that had already been granted under the Defence of the Realm Act Regulation. But although this has been done in the case of nearly every firm, a remarkable exception has been made in the case of Messrs. Pearson, to whom a very strange and almost excessive partiality has been shown. This firm styles itself "Agents to the Ministry of Munitions." It asserts that it has t n agreement which consists, so we are told, in Messrs. Pearson providing all the machinery and staff for the work of prospecting for petroleum in this country, the Government, of Course, bearing all this expense but Messrs. Pearson deriving no profit whatever.

The first question, I think, which must occur is, Why was this particular firm selected for this purpose? More than a year ago there was another firm, the Darcy Company, which is a branch of the Anglo-Persian Oil Company, which possessed all the machinery and staff and the capital to get to work at once on boring for petroleum. It possessed all that plant and machinery at a time when Messrs. Pearson had not a single scrap of machinery in this country—they had to bring it all from America. The efforts of the Darcy Company have been steadily obstructed, partly by uncertainty, which appears to have been deliberately engendered as to what legislation was going to be introduced, and at the present moment two licences for which they have applied have been held up in the Ministry of Munitions, and every effort which they have made to get to work and to obtain licences has been obstructed in every possible way. The treatment of this company has been very curious. They lately came to an arrangement with another company which owned certain lands for boring on the latter's property. They were suddenly informed that this agreement had been made and that they must give way to Messrs. Pearson, and this in spite of the fact that their proposal to drill was passed by the advisers of the Government on March 19 last. And the sole reason why they have not been producing petroleum for nearly a year past is that the Government deliberately delayed the granting of their priority for material. It is worthy of remark also that in taking this action Messrs. Pearson appear to have used information which they could only have obtained from Government sources. I should like to ask the Government whether it is true that the Darcy Company has recently been informed that no licences can be granted except on such terms as would not be likely to be satisfactory to any company or persons desiring to bore for oil.

I think you will agree that the only possible inference which the public can draw from all these circumstances is that the Government are applying Government funds and Government plant in order to create a monopoly for the benefit of a private firm, and that in order to carry out this policy they have deliberately delayed and discouraged the production of material which is urgently required for war purposes. And in order to establish this monopoly they have not hesitated to adopt a course which is designed to squeeze out other firms. It is also, I venture to think, a very remarkable coincidence that the Bill is now only to become law at a period when Messrs. Pearson have been given time and opportunity to transfer sufficient machinery from America in order to get to work.

It may or may not be a good thing to grant a monopoly; that may or may not be the Government's policy, but at any rate it is directly contrary to the Government's engagement. An undertaking was given by Sir L. Worthington Evans on the Third Reading of this Bill in another place that no monopoly would be granted to any one firm. It is also contrary to the policy announced by Sir Arthur Churchman, who is Controller of the Mineral Oil Production Department of the Ministry of Munitions. He has stated that it was desirable that those wishing to bore for oil in the United Kingdom should first arrange with landowners and then apply to the Ministry of Munitions for licences, which licences would, subject to the Ministry being satisfied with the geological evidence, thereafter be issued to such persons.

To come back to Messrs. Pearson, it is, I think, not wholly irrelevant that Messrs. Pearson who are now willing to work for nothing, were not always willing to derive no benefit whatever from the work they undertook in boring for petroleum. Their ascent to these sublime heights of altruism was a somewhat gradual one. Some two years ago, when this firm was in negotiation with these landowners, they were willing to give a royalty of no less than 2s. per ton of petroleum produced, and it is sufficiently remarkable—I may say incidentally that this shows that they thought they could reap a very substantial benefit from this work—it is somewhat remarkable now that they should be willing to forgo all profit whatever.

This Bill might have been tolerated as a war measure, and the noble Lord has tried to represent to us that it is in fact a war measure; but the whole raison d'etre of this Bill is that it ensures the position of a prospector who wishes to bore for petroleum at the present time. Without legislation he was solely dependent upon the Defence of the Realm Act Regulation. It would not be worth his while to sink the capital and undertake the work because of the uncertainty as to future conditions. Therefore, if there is any object whatever in this Bill, it is to perpetuate the conditions under the Defence of the Realm Act Regulation. And the Minister who was in charge of this Bill in the other House distinctly stated that it would be necessary to introduce further legislation in order that the Defence of the Realm Act should be perpetuated. I think that, in view of these circumstances, in view of the extraordinary and very exceptional powers which are conferred upon the Ministry of Munitions and the way in which they have used them, we are entitled to ask for considerably more information that the noble Lord has vouchsafed to us. I should like to ask him, with regard to this agreement which has been entered into with Messrs. Pearsons, whether he is prepared to lay a copy of this agreement on the Table of the House.

Now, the noble Lord has said that all controversial questions are excluded from this Bill. In a sense that is true. They are so carefully excluded that, as a matter of fact, it has exactly the opposite effect of what he supposes, in that, so far from safeguarding the position of the landowner, it does exactly the reverse. The question of ownership and of compensation is completely omitted, and, as the noble Lord has told us, the only redress the landowner has is to come before the Defence of the Realm Losses Commission. Judging by the rulings which that Commission has given in the past they will allow compensation only on substantial loss, therefore the only compensation the landowner will get will be for the use and destruction of such land as may have been used for the purpose of boring for petroleum. I think it is almost certain that this Commission would not grant any compensation for loss of immunity, and, I believe, would not grant any claim which the landowner might put in as owner of the petroleum which is being produced.

I do not wish to enter into the vexed question of royalties, although I cannot admit the noble Lord's contention that in the Bill which I have had the honour to introduce any controversial question is raised. But with regard to this question of royalties, I should like to point out that "what is sauce for the goose is sauce for the gander"; and at the present moment on certain Government land a prospector is boring for petroleum, and he not only has to pay a surface rent to the Government but a royalty to the Government as well. I think that if the Government as landowner is entitled to a royalty the private individual as landowner is equally entitled to one; and if the noble Lord wishes all these contentious questions to be deferred until after the war, he might examine that particular agreement and see that this royalty which is now being granted to the Government is also deferred until the war is over. However great popular prejudice may be against the system of royalties, I think that the public are not likely to view with satisfaction an attempt by the Government to obtain something which does not belong to them without paying for it, in order that they may establish a monopoly for the benefit of a private firm. I am of opinion that the defects of this Government measure are so many and so glaring that this House would be failing in its duty if it allowed the Bill to pass in its present form; and it was with a view of meeting this situation that I have had the honour of introducing this second Bill. At the same time I do not suppose that it will be the wish of this House to reject or to obstruct any measure which can be represented as satisfying a national necessity in a time of emergency like the present. I shall therefore move that this No. 2 Bill be read a second time, and that both Bills be referred to a Select Committee.

I do not propose to enter into any details with regard to the No. 2 Bill, but I will refer to one or two points only. The first is the provision in Clause 2 which defines petroleum prospecting areas by an Advisory Committee appinted by the Director of the Geological Survey, who for this purpose takes the place of the Minister of Munitions. The second point is subsection (1) of Clause 3, in which the Ministry of Munitions would be compelled to grant a licence to search or bore for and to get petroleum. This ensures equitable treatment for all persons who wish to work petroleum, and avoids the grave objections in the Government Bill. My third point is with regard to Clauses 5 and 6. Clause 5 provides for payment for all petroleum obtained by a licensee to those persons who prove themselves legally entitled to it. The noble Lord says that this appears to give every opportunity to a landowner to drive as hard[...] a bargain as he may please. I do not quite understand where he sees that. I do not see that this clause can in any way be given that interpretation. Nor do I see that it is in any way controversial. It is perfectly obvious that the question of the ownership of the petroleum must be settled sooner or later. The effect of the Government Bill is to vest the petroleum in the Crown; it is an attempt to establish the right of the Crown to the petroleum, because under the Defence of the Realm Regulation no claim made by the landowner as owner of the petroleum would be allowed; and all that Clause 5 says is that the Crown shall prove its claim in the only proper tribunal—the Law Courts. I think that this clause fulfils the purpose of safeguarding the interests of the public and of all concerned in the production of petroleum, and would place that production on a firm and unequivocal foundation instead of on the slippery and insecure foundation which is provided in the Government Bill.


Can the Government say whether they will deal with the point of getting information with regard to the question I raised—I mean through the Research Department of the Geological Survey?


The suggestion of the noble and learned Viscount, which of course carries great authority, will be very carefully examined. I happen to be the head of the Department to which it is proposed that the Geological Survey shall be transferred, but this question has not yet come to my notice. However, I can safely promise that it will be considered, and before we come to the Committee stage information will be given upon the matter.


My Lords, it may, perhaps, cause some little surprise to the House that the definite request made by the noble Duke for some further information from the Front Bench opposite, in view of the very explicit charges which he made against the conduct of this business by His Majesty's Government, was not immediately replied to by somebody from the Government Bench; but as nobody has risen I will say only one or two words on the general question.

In the first place, perhaps I may be allowed to express my sense of the addition which is made to the forces of your Lordships' House in the presence of the noble Duke above the gangway. He stated his case with much vigour and force, and I am quite certain that the close attention which was always paid in this House to the utterances of his noble father, whose presence here we all remember and whose speeches were so greatly regarded by us, will be repeated in the case of the noble Duke. I am not in a position to express any opinion on the merits of the particular charge which the noble Duke has brought against the Ministry of Munitions. That charge consists in fact in a statement that an undue preference—if that is the phrase—has been given to the firm of Messrs. Pearson and Company in respect of the powers for boring for petroleum and presumably for getting petroleum if and when it is found. As to that, not knowing the circumstances, I can express no opinion. I do know that the firm of Messrs. Pearson and Company—which is, as we all know, represented in this House by Lord Cowdray—is one of the highest repute, not merely in this country but all over the world, and I should certainly be slow to believe any charge which was made against them as a firm, although I think I am right in saying that the noble Duke does not make any charge against the firm but rather against His Majesty's Government, and especially the Department of Munitions, for undue indulgence, if that be the word, given to the interests of the firm.

There was one point made by the noble Duke, however, upon which I should like to say a word. He complained that this Bill was introduced only at a period after Messrs. Pearson and Company had actually begun to initiate their first boring, instead of at an earlier date, before they were in a position to do anything. On that I think it is only fair to state that before the adjournment in the summer, as the noble Earl who leads the House will remember, some pressure was put upon him to proceed with the Bill in the last day or two of the session; and there is no harm in my saying now that it was at the special request of Lord Cowdray that I made that demand, if it was a demand, of the noble Earl opposite, to which he was unable to accede. Therefore it is not fair to conclude that the postponing of the Bill was in any way effected in the interests of the firm.

There is one other point in the noble Duke's speech upon which I wish to make what I think may be a correction. He quoted a statement made by a well-known engineer, Mr. Cunningham Craig, on the subject, again, of the undue preference given to certain parties for the possible production of oil. Unless I am greatly mistaken, that statement of Mr. Cunningham Craig had no reference whatever to this matter of boring for petroleum oil. It had, I think, reference solely to the somewhat animated controversy which existed between the Petroleum Production Department and the Petroleum Research Department, in respect of which a Committee was appointed, over which I had the honour to preside, and which reported with reference to the distillation of Cannel coal and other kindred products for the purpose of obtaining fuel oil for the Navy and other purposes. I do not think that the paragraph which the noble Duke read had in fact the smallest bearing upon the matter with which we for the moment are concerned.

It is difficult, without hearing some further statement from the Government, to express any opinion on the course which your Lordships ought to take. In my opinion it cannot be disputed that the vexed question of royalties—which, as we know, in the case of liquid petroleum do stand and are bound to stand upon a somewhat different footing from the royalties paid for ironstone or other stone and coal, and possess, perhaps, a somewhat closer analogy to the difficult case of the ownership of salt under particular land—is somewhat prejudged in the Bill of the noble Duke, and I agree with the noble Lord opposite that for your Lordships to attempt now to express an opinion upon that exceedingly difficult point would be in the highest degree undesirable. It should not, I think, be held, as I think the noble Duke is disposed to hold, that the silence of your Lordships' House on this matter ought to be taken in a contrary sense to prejudge the matter in the other direction. That, I think, would be an unfair inference from any action your. Lordships may take in declining to consider that particular part, at all events, of the noble Duke's Bill.

I confess that as at present advised there does not appear to me to be much material for an examination by a Select Committee of the two Bills. If noble Lords opposite are able to enforce the view that their Bill is purely and simply a suspensory Bill and does not prejudice one way or the other future action or the tights of anybody—if, in fact, they are able to combat the argument of the noble Duke that what is called suspension is in reality the granting of a permanent monopoly to Messrs. Pearson—then I think the House would be wise to allow the Government Bill to be read a second time without any question of its going to a Select Committee; but I confess that I await some further explanation on the part of the Government.


My Lords, the noble Marquess expressed surprise that no answer was made by one of my noble friends. I assure him that no discourtesy was meant to your Lordships. The fact was that there is another Bill on the same subject on the Paper which, if read, a second time, is to be followed by further debate on procedure; and I confess that I rather thought the noble Duke, or another of your Lordships, would be talking on the second Bill, and that therefore no immediate answer was necessary. I must, however, say that although I listened with the greatest attention to the interesting speech delivered by the noble Duke opposite, I confess I was rather surprised at the form and substance of his speech. It consisted in very grave charges against the Ministry of Munitions, and, I think, against the firm of Messrs. Pearson. Lord Crewe indicated that no charge was brought against that firm—


I understood so.


I cannot help feeling that if the charges brought, against the try of Munitions are correct they could scarcely stand without collusion on the part of Messrs. Pearson, and so far as the agreement between the Ministry of Munitions and this firm is concerned it is freely at the disposal of your Lordships and of the public. If necessary it could he printed in our Papers, though I imagine the more convenient course would probably be to lay certain copies of the document on the Table. There is nothing in the agreement that could not be made public.

The charges brought against the Ministry of Munitions are serious too—that excessive partiality has been shown towards this firm of Messrs. Pearson; that the Government have deliberately introduced delays in order to injure Messrs. Darcy; that the Government have created a monopoly for a private firm; that they have deliberately delayed the production of war material; that the course has been designed to squeeze out other firms, and that they took it at a moment when Messrs. Pearson were ready to act. I do not know anything about the case. All I know is that Messrs. Pearson have foregone financial advantages which they might have gained, and have voluntarily placed at the disposal of the Government, without any remuneration, the services of their highly-trained staff and of their plant, as well as the experience gained by the firm in many years of research. I cannot help feeling that it would have been more convenient, and more in consonance with our ordinary methods, if notice had been given to the Ministry of Munitions on these points, and no doubt then a considered reply could have been submitted.

If I may I should like just to refer to the later stage of our conversation to-day. The noble Duke has a variant Bill on the Table, and also, I think, a Motion to refer both Bills to a Select Committee. Of course, that means delay. This Bill was introduced into Parliament many months ago and it has been in your Lordships' hands for two or three months at least, while the new Bill of the Duke of Northumberland has been in our hands for forty-eight hours. The noble Duke has blamed the Government for being slow in the matter. I cannot help thinking that his Proposal is going to introduce a fresh series of delays, and if, as I think is generally conceded, the matter is one of some urgency, I would suggest that the Committee stage should be taken by your Lordships in Committee of the whole House rather than that the Bill should go to a Select Committee.

The Duke of Northumberland did not criticise the Government Bill for what it contains. He has introduced an amendment to which the noble and learned Viscount opposite referred. From what the Leader of the House has said, apparently that is a point to which sympathetic attention will be given. What the Duke of Northumberland criticised is what was omitted from the Government Bill. Any point raised in his alternative measure can perfectly well, under our Rules of Order, be introduced during the Committee stage of the Government Bill, should the House think such a course necessary. I do not, therefore, see the necessity of a second Bill, still less of referring both Bills to a Select Committee.

I would, in conclusion, refer to one further aspect of the matter. My noble friend Lord Elphinstone has made it perfectly clear that the matter in the Duke of Northumberland's Bill, which is not referred to in the Government Bill, must at, a later stage be dealt with by legislation. The whole essence of the Government Bill is to exclude these highly technical and indeed very contentious points which the Duke of Northumberland has incorporated in his Bill. The fact of passing the Government Bill as it stands neither prejudges nor impairs any of the rights which the noble Duke is trying to safeguard. All these rights have got to be dealt with, defined, and safeguarded at some later stage; and in order to press forward with what I believe is conceded on all sides to be an urgent matter, I most respectfully impress upon your Lordships the desirability of giving a Second Reading to this Bill and of dealing with its Committee stage in Committee of the whole House rather than of sending it to a Select Committee, which must mean delay at a moment when time is the essence of success.


My Lords, I do not think your Lordships will look upon the answer of my noble friend Lord Crawford as very convincing. I think he himself said that he did not know very much about the matter. Still, we must remember as regards the Ministry of Munition—I think I am right in this—that the Government have found it necessary to appoint a Committee or a Commission to look into the matter. I do not know the particulars. I think there were certain officials of the Ministry who were shareholders of this particular company. However, it is, I think, most desirable, whether what the noble Duke has said is correct or not, that a more really definite answer should be made. It is correct, as I think my noble friend said, that Messrs. Pearson were in negotiations with a large number of landowners which did not come to any definite understanding, and since then the Government have come forward with the Bill.

When told of the great urgency of the Bill your Lordships should remember that a Bill was introduced in the House of Commons about a year ago and that it was dropped after an adverse division there. I think my noble friend Lord Elphinstone said something about another Bill being dropped; or was it the same one? Anyhow, the Bill was very hurriedly introduced in another place shortly before the recess. I believe I am right in saying that it was rushed through all its stages in the course of one sitting, or very nearly so, and then it was brought to your lordships' House, and the noble Marquess stated that it was put off until after the recess.

I think your Lordships must have some farther assurance about certain charges that have been made. It may be said that Messrs. Pearson have no financial interest; and I really do not wish to say a word of any kind against them. But other people to think that they are not being fairly dealt with. I am informed, if, for instance, it is going to be the case that Messrs. Pearson and no other firm is to be allowed to test all the likely areas in this country, that it will practically be impossible for the Ministry of Munitions or any other Government Department to avoid giving them preference over all other firms after the war is over. And it is also possible, if they have all the information before them, to keep out other firms. I cannot see why these Bills should not be committed to Select Committee. My noble friend Lord Elphinstone said there was no great hurry far this Bill, that it practically meant nothing more than regularising matters after the war is over, and then further legislation can taken place. And we have so very little information before us that it seems to me right, and I hope your Lordships will see your way to that course, to give a Second Reading to these Bills and refer them to the Committee as proposed by my noble friend.

On Question, Bill read 2a, and committed to a Committee of the Whole House.