§ Order of the Day for the Second Reading read.
§ THE EARL OF CLARENDON
My Lords, this Bill is intended to remove certain obstacles which at the present moment interfere with the production of minerals in a way contrary to the national interest. As your Lordships are probably aware among the Committees set up by the Ministry of Reconstruction after the war to consider the problems arising and facing the country at the end of the war were two which were asked to report upon the proper development of the natural resources of the country. The first Committee was known as the Coal Conservation Committee, and the noble and learned Viscount, Lord Haldane, was Chairman. The other Committee was known as the Acquisition and Valuation of Land Committee, over which Sir Leslie Scott presided. In the diagnosis which the Committees made of the situation the two Reports resembled each other, and in the remedies they proposed they were very similar.
The causes preventing or delaying the proper development of the natural resources of this country are all set forth in the third Report of the Acquisition and Valuation of Land Committee. The proposals to overcome the obstacles which these Committees considered are, of course, all embodied in the Reports 184 issued by the two Committees themselves, and I do not propose this afternoon to weary your Lordships with the details. The Report of the Acquisition and Valuation of Land Committee was the subject of very long and careful consideration by the Government Department and by all the interests concerned—namely, the landowners, the mineowners and the royalty owners. In so far as Part I of this Bill is concerned agreement has been reached. It represents the views of all parties concerned as to how it is best and most practicable to deal with the problem by legislation.
Your Lordships will remember that in 1920 Lord Gainford introduced a Bill on this subject. It was very similar indeed to the recommendations contained in the Report of Sir Leslie Scott's Committee. It proposed to set up a Mines Department—that Department has already been set up; it is part of the organisation of the Board of Trade—and also a sanctioning authority. The sanctioning authority was empowered, on an application by any person interested in minerals, to make an Order removing any impediment to the production of those minerals if it was in the national interest to do so. As your Lordships will remember, that Bill passed through your Lordships' House, but was rejected in another place.
There are two main differences between Part I of this Bill and Lord Gainford's Bill. The first is that the tribunal which is charged with the power of deciding whether or not an Order is to be made is not the sanctioning authority, as under Lord Gainford's Bill, but the Railway and Canal Commission. In making this proposal the Government has been influenced by two things. First, it follows the precedent of legislation which has been already passed with regard to the compulsory acquisition of land, and, secondly, it saves expense inasmuch as it does not set up a new tribunal. The Railway and Canal Commission is empowered to call in, if it so desires, expert knowledge; it has the power of calling in one or more qualified assessors. The power of making a compulsory Order is vested in the Board of Trade and thereby Ministerial responsibility to Parliament is preserved. No Order can be made by the Board of Trade unless it is in exact accordance with the recommendations of the Railway and Canal Commission. 185 The Board of Trade may also refrain from making any Order if it considers that it is not in the national interest to make one. That is the first difference between Part I of this Bill and Lord Gainford's Bill.
The second difference is this. In Part I of the present Bill the scope is far less wide and the powers much less drastic. The present Bill does not deal with every impediment to production; it covers only certain specified types of circumstances. No right of any sort can be granted unless it is impossible to obtain it by private negotiation for one or other of the reasons which are set out in Clause 4 of Part I of the Bill. The grant of the right to work minerals is also subject to further special restrictions. It is granted only to persons who already have a legal interest in those minerals or adjoining ones, and only where there exists a, danger of the minerals being left permanently unworked, or where the persons working the two adjoining mines have agreed on an adjustment of boundaries but the lessors refuse to concur. There is thus no possibility of a mineral owner or lessee being compulsorily deprived of minerals that he may in his discretion wish to work or develop himself.
With regard to ancillary rights the conditions governing these are set out in Clause 3 and the only special condition which is to be fulfilled is this—the inability or failure to obtain them must be shown to hamper unduly the proper and efficient working of these minerals. There is no provision, as in Lord Gainford's Bill, for the Government Department to apply for any Order. To have attempted to secure this would undoubtedly have wrecked the agreed basis of the Bill.
On the question of support, the Bill also differs from Lord Gainford's Bill, though not from the Report of Sir Leslie Scott's Committee. It provides for the compulsory imposition of restrictions or conditions on the working of minerals where the Railway and Canal Commission, on application by persons interested in the land, are satisfied that it is in the national interest that these restrictions or conditions should be imposed. In regard to the question of compensation, provision is made for this in consideration of the rights that are obtained, and the nature and the amount of it, if not settled by agreement, are determined by the Railway and Canal Commission.
186 There is undoubtedly, in this part of the Bill, some interference with the liberty and the rights of private ownership. The Bill does involve this, but the limits are strictly defined and the safeguards are ample. No compulsory acquisition can be made except after inquiry by an absolutely impartial tribunal, and upon grounds of national interest. With regard to the estimated amount of minerals which will be released by the Bill, it is impossible to give any accurate statement, but the experts are agreed that it will remove difficulties which in the aggregate interfere seriously with the economy, efficiency, and volume of mineral production, and which are necessarily a drag upon the prosperity of the industry itself. Their removal will promote the development of the mineral resources of the country without destroying private ownership and initiative.
Now I come to Part II of the Bill, which is equally important but is more limited in scope. It deals entirely with the minerals which lie adjacent to or under the railways, and is an amendment of the existing Mining Code in the Railways Clauses Consolidation Act, 1845. Under that Code the railway companies can prevent the working of minerals up to a distance of forty yards from the railway itself on paying compensation. If, on the other hand, that work is undertaken with the permission of the railways, they undertake to make good themselves any damage caused thereby. The greater depth of modern mining has long made those forty yards a totally inadequate distance, and a great deal of damage has undoubtedly been done to railways by working outside that distance, and over this the railway companies have, under the Code, no control and no remedy.
In the Howley Park case, however, which was brought by the London and North Western Railway some ten years ago, railway companies were declared by the judgment to have, in addition to their statutory right, a common law right to prohibit by injunction working outside the forty yards area if that working was likely to cause damage to the railways; or to recover the whole cost of making good any such damage. It follows, therefore, that no mine owner could obtain compensation under the Mining Code if his workings were stopped before they reached the forty 187 yards limit. The tables were thus completely turned, and the result was that minerals lying outside that area of forty yards were thereby sterilised, for no mine owner cared to face so great a contingent liability so long as the whole cost of it might fall upon his own shoulders.
Since that decision, many arrangements have been made between the railway companies and the mine owners to work those minerals. It is agreed, however, between all parties not only that this involves a lot of unnecessary expense, but that it is also likely to cause friction in some cases. Very often agreements are not capable of attainment. Accordingly, a general arrangement was reached The Acquisition and Valuation of Land Committee suggested that the royalty owners also should be consulted, and that any measure of agreement arrived at between these parties should be embodied in an Act of Parliament. Further and prolonged negotiations have taken place. The original agreement has been somewhat revised, and the result is represented by Part II of this Bill.
The terms, though complicated, are, I am informed, understood by all three parties, and the result is that a maximum amount of minerals adjacent to the railways will now be able to be worked at the least possible expense, not only to those concerned but also to the community itself. Shortly, Part II alters the existing situation in the following way. Railway companies surrender their common law right of prohibiting by injunction working outside the area of forty yards or to receive compensation for damage done by such work. Mine and royalty owners agree—(1) to an extension of the statutory distance; (2) to accept a limited measure of liability for the damage done by the working permitted by the railways within that distance; (3) to accept a less measure of compensation for minerals outside the forty yards which have to be left unworked than for those lying within that distance; and (4) instead of being able to recoup, as under the old Act, the whole extra cost thrown upon them where they have to drive through minerals left unworked in order to reach minerals lying beyond, they receive only a percentage of that cost diminishing with the increasing width of the area left.
188 There is still one point in this part of the Bill upon which agreement has not been reached. It is not a vital one, I believe, but your Lordships should be aware of it. It does not affect the railway companies; it affects the mine owners and the royalty owners. The proposed new Clause 79A of the Bill says that where a mine owner becomes liable for damage he can pass on part of that contribution to the royalty owner by way of deduction. This has been agreed to in principle. It is agreed, too, that in leases made after this Bill becomes an Act, unless the parties contract out of it the royalty owner must bear his share. But what will be the effect upon existing leases? These vary, but most of them contain the following two covenants:—that a royalty is to be paid free from any deduction whatever, and that the lessor shall be indemnified against any claims for damage done to the surface by working minerals underneath.
The basis of the agreement in Part II of the Bill lays it down that any expenses incurred in working minerals at present sterilised should be borne in certain proportions by all three parties concerned—namely, the railways, the mine owners, and the royalty owners. The mine owners' contention is as follows: that as a natural consequence of this agreement they are entitled to make these deductions from the royalty under any existing leases, whatever the terms of those leases may be. The royalty owners agree that no covenants in leases made before the Howley Park judgment ought to prevent deductions from being made, but that in leases made after the Howley Park judgment every lessee must be presumed to have understood the law, and if he agreed to pay rent without any deduction whatever, or to indemnify the lessor against any claims for damage done to the surface, he then should be held to his bargain and not allowed to make any deductions whatsoever.
The relevant provisions with regard to this matter your Lordships will find in tilt proposed new Clause 85B (1), proviso (ii), on pages 20 and 21 of the Bill. There the issue is determined in a manner which may be equitable in theory but may be difficult to apply in practice. Negotiations are proceeding on this part of the Bill, and I am authorised to say that the Government 189 do not insist upon the words that are here inserted. If the parties who are still negotiating can come to a better arrangement amongst themselves, I am authorised, on behalf of the Board of Trade, to state that we will bring an open mind to bear upon the consideration of this question when the Bill reaches a later stage.
There is only one more thing that I need say in connection with the Bill, and it is this. Part I applies to the whole of Great Britain. Part II at the present moment does not include Scotland, but the Scottish interests ate now considering the whole question as to whether they should, or should not, be included in Part II of the Bill, and it is possible that at a later stage in the proceedings in your Lordships' House I may be in a position to propose that Part II, equally with Part I, shall apply to Scotland. That, I think, is all that I need say upon the Bill itself. I have already pointed out that it is practically an agreed Bill. It. is the result of very careful and long negotiations between all the parties interested, and the Government Department. Those negotiations have taken place, I believe, over a period of something like two years.
I realise that probably some of your Lordships who are interested in this Bill will not care very much for the measure itself, but if does any rate accomplish three things it will release a very large amount of minerals that at the present moment are sterilised and lying idle. As a consequence of that it will relieve to a certain extent the conditions affecting employment in this country. Lastly, it will conduce to the more efficient working of our natural resources. I beg to move that, the Bill be read a second time.
§ Moved, That the Bill be now read 2a(The Earl of Clarendon.)
§ VISCOUNT HALDANE
My Lords, the first thing which I feel is that we ought to congratulate the noble Earl upon the lucidity with which he has explained an exceedingly intricate subject to the House. It is obvious that he has taken a great deal of trouble in mastering the law, statutory and common, upon this subject. As he has said, I presided over the first Committee which made recommendations on this subject—the Committee whose recommendations, together with those of the second Committee under 190 Sir Leslie Scott, are embodied in Part. I, which enables rights to be compulsorily acquired, when they cannot be got by private arrangement, for working minerals which have been left unworked because of such difficulties as boundary rights, water, &c. It is very important that this Bill should have been brought in to deal with the matter.
I am speaking from recollection, but I think that from the evidence of the eminent mining engineers who came before us, we found that there were 1,200 colliery companies which own coal in various parts of the country; that the boundaries are often very intricate; that at times, owing to disputes, large barriers of valuable coal have to be left to mark off one colliery from another; and that other large barriers have to be left to block out water, which could have been blocked out by less costly means had it not been for such difficulties as the intricacies of title. The Committee came to the conclusion that there was great waste of natural resources, and they made recommendations which are embodied in the Bill. Therefore, from the point of view of the public, the Bill is a very desirable one, but it is also, I think, a very desirable one from the point of view of the private owner. The Bill gives powers to the Board of Trade, safeguarded by the intervention of the Railway Commission, to prevent these obstacles of a technical character from operating any longer. That is the substance of Part I of the Bill, and the noble Earl has explained it so clearly that I need say nothing more about it.
Now I come to Part II. I heard, not with alarm but with apprehension, that the noble Earl was considering the application of Part II to Scotland. It may be quite right to apply it to Scotland, and the principle certainly ought to apply to Scotland as much as to England, but I should like to draw attention to the fact that the law of real property in Scotland is wholly different from the law of real property in England. And while it is right to apply the law to Scotland, my noble friend had better consult very carefully with the Lord Advocate—who is at leisure at this moment—upon the subject of how the principles of the Bill may be so moulded as not to cause confusion.
As to the matter which gave rise to the difficulties dealt with in Part II, I speak 191 with a little knowledge, because I was Lord Chancellor at the time the case came before this House, and I delivered the first judgment from the Woolsack. The Howley Park case was a very simple one. In the forties, when everything was going merrily concerning railways, there was passed the Railway Clauses Consolidation Act of 1845. That Bill contained a set of clauses to safeguard railways which ran through coalfields. As the noble Earl has explained, the railways had to be protected from the owners of the minerals who would want to get the minerals by the side of their lines. Under the Mining Code of that Act power was given to the owner of the minerals to work them, after giving notice to the railway, who, however, would have the opportunity of saying: "No, we are going to buy these minerals from you at their full price." It was ultimately decided that they could do that at any time. That was limited to an area of forty yards on each side of the railway itself. But mining operations are now going deeper and deeper, and people are seeking for minerals at much lower levels than they did before. Consequently it began to become apparent that, with the taking out of minerals all round and underneath, railways were not quite secured by the forty yards limit.
Then came the great case raised by the London and North Western Railway, in which the question was raised: "Have we not got some other rights in addition to those which the Statute confers?" I do not believe that people ever dreamed of those other rights when the Statute was framed in 1845. It was a day when landlords were powerful in Parliament, and, if they had dreamed of it, they would have taken good care that the mineral rights did not pass away from them. It was finally established by the tribunal of this House that the words of the Mining Code of the Railway Clauses Consolidation Act were not enough to take away the lateral support which the railway had from the land and minerals beyond forty yards. The result was that a large quantity of minerals were in this way impounded. People could not work them, and colliery owners and landlords and royalty owners alike suffered.
This Bill has been brought in to embody some kind of convention which has been come to between the railway companies, 192 the mine owners, and the royalty owners to this effect: It is now apparent (though it was not in 1845) that you want a larger lateral area than the forty yards provided under the Statute on each side of the line, therefore let it be forty yards or a length equal to one-half the depth of the seam of the coal below, whichever is the greater; and if the railway company wants the support of the minerals beyond the forty yard area, and does not wish them to be worked, it will have to compensate the owners of the minerals for the amount, but the owners of the minerals get less, by Clause 16, on a principle of which I did not first see the point, though I think I see it now. They are to get the full compensation for the inner area within the forty yards, but only one-third of the rate for the outer area, lying beyond the forty yards. That I presume to be because they could not work these outer minerals at all before they could work the inner minerals by giving notice to the railway companies. I suppose that is the basis on which the noble Earl and his colleagues have arrived at an agreement with the mineral owners and the royalty owners to take less than the full compensation—namely, only one third. It only shows in what an absurd position the law was.
That is the substance of the Bill. It seeks to get round these difficulties. We shall listen with interest to the explanation at subsequent stages about the further agreements to which the noble Earl referred at the end of his speech. The Bill gives effect to the recommendations of two Committees, and, if it passes, it will make a great deal of mineral available which is not now available, and it will also prevent a great deal of flooding. The noble Earl did not allude to that, but that was a matter which a mining engineer brought prominently before us. At any rate, the Bill is a great step in the right direction, and I hope that the House will agree to the Second Reading.
§ LORD DYNEVOR
My Lords, I cannot say that I altogether approve of this Bill. It is a drastic measure, and it contains provisions with which I do not agree. But it is not a Bill to be opposed on the Second Reading, and I can only hope that Amendments will be inserted to remove any objectionable features. I hardly think that it should have been described in the Memorandum as an agreed mea- 193 sure. I think my noble friend Lord Clarendon used the words "practically agreed"; he amended the words of the Memorandum to that extent. The Bill was only read a first time last Thursday; it was not printed then, and I do not think it was circulated till Saturday; its two Parts run to about 25 pages, and it requires a great deal of careful consideration and reading. I sincerely hope, therefore, that the Committee stage will not be put down for a very early date.
THE EARL OF JERSEY
My Lords, like my noble friend Lord Dynevor, I observe that the Memorandum describes Part II of the Bill as intended to give effect to an agreement between the different interests affected. The noble Earl in charge of the Bill somewhat modified that statement, and I am glad of it, because I am afraid that otherwise there might have been some misapprehension. I am not sure on what authority that statement was made. It is, I believe, correct that the various interests named were desirous of arriving at an agreement, so as to surmount certain difficulties which now obtain, and especially the difficulties arising from the recent decision mentioned in the Memorandum and also referred to by the noble Earl in charge of the Bill. It is also true that, in the public interest, all alike were prepared to make material concessions to reach a compromise.
I would ask your Lordships to bear in mind that the concessions asked for from royalty owners were by no means the least in importance. Your Lordships will agree, I think, that a measure of agreement on the general principle of acceptance so as to effect a compromise is somewhat different from a pledge to accept in detail all the proposals which may be set out in the Bill. I am glad, therefore, to note that the noble Earl realises that this measure is by no means pleasing to all. I am glad, too, that he appreciates the fact that the various interests did endeavour, and have for a long time endeavoured, in a most public spirited manner, to arrive at a compromise in the national interest. He appreciates also, I believe, that the Bill can hardly go through without some measure of criticism, and that there are very many important points of principle involved. I do not desire to detain your Lordships by any lengthy discussion of this matter, 194 but there are some proposals which will need examination. In view of the fact that it is perfectly true that this Bill represents a compromise and that there is general anxiety to see it passed, and to see it passed with all reasonable facilities, these Amendments, can probably be considered on the Committee stage.
My noble friend Lord Dynevor pointed out that this Bill was only printed about six days ago, and there has hardly been adequate time to examine the proposals with the necessary care and minuteness. Therefore, I trust that the noble Earl will not think it unreasonable if I support my noble friend's request for an adequate interval to elapse before your Lordships are asked to deal with the further stages of the Bill. I have no desire whatever to raise needless difficulties; at the same time, I hope that it will not be thought that the royalty owners unanimously welcome this Bill as something which is in their interests. They are, I believe, prepared to cooperate in the public interest in arriving at the compromise which has already been outlined, and they are willing, as the other interests are willing, to make very material concessions to attain that object. Therefore I would conclude by asking the noble Earl whether, in view of possible Amendments, he would grant a reasonable interval before the next stage of the Bill is taken.
§ THE EARL OF CLARENDON
My Lords. I do not know that I am called upon to reply to such criticisms as have been made by noble Lords who have spoken. But thee are two points on which, with your Lordships' permission, I should like to say a word or two. The noble and learned Viscount, Lord Haldane, drew attention to the fact that it would be wise not to include Scotland in Part II of the Bill. The noble and learned Viscount may not have heard what I said on that matter, but I endeavoured to point out in my speech that the interested parties in Scotland are at the present moment considering the whole question. If there are pitfalls, I am perfectly certain that they will avoid such pitfalls, and Scotland, therefore, will not lightly be included in Part II of the Bill. Of course, I cannot say at this moment what their decision will be. They have not definitely decided.
195 With regard to the question which was raised by Lord Dynevor and Lord Jersey, may I say on behalf of the Government that so far as the Committee stage of the Bill is concerned, I shall be only too pleased to study the convenience of your Lordships? In regard to the Board of Trade, I should like to say that one gentleman who has taken a prominent part in the whole subject-matter of this Bill, Mr. Evan Williams, has gone abroad. He will not be back before March 10, and the Board of Trade are most anxious that they should have facilities for further conference with him when he returns. Therefore, if it is the wish of your Lordships that the Committee stage should be taken on a date subsequent to March 10, I am quite certain that that arrangement could be made.
§ On Question, Bill read 2a; and committed to a Committee of the Whole House.