MINING INDUSTRY BILL. (Hansard, 3 August 1926)

HL Deb 03 August 1926 vol 65 cc475-98 475

§ Amendments reported (according to Order).

§ Contents of total amalgamation schemes.

§ 2. A total amalgamation scheme under this Part of this Act may contain such provisions as may be necessary or expedient for giving effect to the objects of the scheme, and in particular, but without prejudice to the generality of the foregoing provision—

(a) may provide either for the constitution and incorporation of a new company, or companies, under the Companies Acts, 1908 to 1917, with or without the dissolution of all or any of the constituent companies, and the transfer to the new company of the undertakings of the constituent companies, or the distribution thereof amongst the new companies and such of the constituent companies as are not dissolved, or for the continuance (with or without change of name) of one or more of the constituent companies, and the dissolution of the other constituent companies, and the transfer of their undertakings to the continued company or the distribution thereof amongst the continued companies;
(b) may provide for vesting in the new or continued company or any of the new or continued companies any or all of the property, rights, powers duties and liabilities of the constituent companies;
(c) may provide generally as to the terms and conditions of amalgamation, and for the winding up of the constituent companies or such of them as are to be dissolved, including the allocation to holders of securities of the constituent companies, in substitution therefor and in satisfaction of all claims arising thereunder, of such securities of the new or continued company or any of the new or continued companies and of such amounts as may be specified in the scheme;
(d) may make such provision as may be necessary with regard to the share and loan capital of the new or continued company or companies, including provision for increasing all or any of the existing classes of loan or share capital of any such company, or creating new classes of loan or share capital of 476 any such company, with such rights, priorities, and conditions as may be specified in the scheme;
(e) may provide for any of the matters for which provision is made by Part V of the Railways Clauses Act, 1863;
(f) may make such incidental, consequential and supplemental provisions as appear necessary or expedient in order to give full effect to the purposes of the scheme.

§ LORD DARLING moved, after paragraph (e), to insert as a new paragraph: (f) Shall provide for the annual publication of the accounts of a new or continued company, including particulars as to the amount of coal used for the purpose of any business or operations carried on in the interest of a constituent company and the price charged therefor, and particulars as to the number of persons employed in each grade or class by the new or continued company, and the aggregate wages and allowances paid to each grade or class, such accounts to be published in a form to be prescribed by the Board of Trade.

§ The noble Lord said: My Lords, I have put on the Paper the Amendment which your Lordships have seen, to bring into harmony the practice of keeping accounts and other matters, not in certain collieries but in collieries generally, so that there may be one practice all over the country. It has seemed to me, and I think the noble Viscount in charge of the Bill agrees, that under Clause 21 of this Bill practically all that is aimed at in the Amendment can be accomplished and will be accomplished when this Bill becomes law. I am perfectly conscious that at this present moment it might be difficult so to word the Amendment as to make it quite satisfactory with regard to all other rules and regulations applying to collieries in the country, and therefore I am in hope that the noble Viscount in charge of the Bill can assure your Lordships definitely as to what will be the effect of the Bill even if this Amendment be not made.

§ Amendment moved— Page 4, line 3, at end insert the said new paragraph.—(Lord Darling.)

§ THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT CECIL OF CHELWOOD)
My Lords, I am very much obliged to my noble friend for the way in which he has brought this proposal before your Lordships. For the reasons I described to him yesterday the Government do not find it possible to accept this 477 Amendment, which would only apply to the amalgamated and absorbed companies, because that would make a distinction between them and other companies; but my noble friend has very rightly said that the general purpose for which this Amendment is moved can be secured by Regulations giving to the pit committees powers under Clause 21 of the Bill. I explained yesterday that the object of that clause was to secure that opportunity should be afforded by the owner, agent and manager of the mine for the establishment of machinery for mutual discussion between representatives of the management of the mine and representatives of workers employed in or about the mine, of matters of common interest in regard to the working of the mine. The object of the clause is to secure that that shall be accomplished by the establishment of pit committees.
I venture to think that if that is done honestly and fairly it will carry out all the substantial objects contained in this suggestion of my noble friend, and will apply it not only to amalgamated and absorbed companies but to all colliery companies under the Bill. That is the belief of the Government—I can state that quite positively. And I can say further that the Government attach great importance to the policy embodied in Clause 21, and they are quite prepared to see that that policy is carried out. If, contrary to their belief, it should turn out that there is some difficulty in carrying it out under Clause 21, the Government will always be prepared to take whatever steps are necessary to see that that policy is effective. In those circumstances perhaps my noble friend may not think it necessary to proceed to a Division on this Amendment.

§ LORD DARLING
I do not in the circumstances think it necessary to proceed further with this Amendment.

THE EARL OF CRAWFORD
My Lords, I must say that the more we hear about this Bill the more far-reaching it becomes. The noble Viscount now tells us that under the clause by which pit committees are established everything that is in Lord Darling's Amendment can be carried out. In other words, that the annual publication of accounts is to take place.

478

§ VISCOUNT CECIL OF CHELWOOD
No, I did not say that. I said the substance of what he desires.

THE EARL OF CRAWFORD
That is the substance of the first line of what Lord Darling desires. I think that is most objectionable.

§ VISCOUNT CECIL OF CHELWOOD
Might I be allowed to intervene? Yesterday I explained that that is the very point on which there would be a difficulty in utilising the pit committees. There is an express provision in an existing Act of Parliament against publication. It would not be necessary to have publication because the representatives of the miners on the committee would obtain the information.

THE EARL OF CRAWFORD
I am glad to have that reassurance. The accountants already report on these figures. They are already at the disposal of the trade unions themselves and it seems to me utterly unnecessary that there should be any publication in the sense indicated in Lord Darling's Amendment.

§ Amendment, by leave, withdrawn.

§ LORD THOMSON
had on the Paper an Amendment to move at the end of the clause to insert as a new subsection: (2) When any question arises in the course of wages' ascertainments in the mining industry, the authorised representatives of the miners in the district concerned shall have the right to receive information regarding the selling price of coal transferred to ancillary undertakings. The noble Lord said: My Lords, I am afraid that, through my own carelessness, I have rather prejudiced such prospects as there may have been of the success of this Amendment. I am afraid I put it in the wrong part of the Bill. I do not think it ought to have stood as part of Part I at all, which deals with amalgamations. More properly I think it should have come in Part VI, because, in point of fact, this Amendment would fall upon the just and unjust alike, the new company or the old company—the just company which would not mind it in the least, and the unjust which might be persuaded to mend its ways. The Amendment, therefore, meets the main argument of the noble Viscount in regard to the objections which he raised, because it would apply to all companies, and I suggest that, if the rules of 479 the House could be altered to some slight extent to meet my case this Amendment might come in Part VI as a new clause, as Clause 23, in which case it would simply make it possible for authorised representatives of the men in any particular area to have access to the transfer prices paid by any ancillary company.

§ THE LORD CHANCELLOR (VISCOUNT CAVE)
My Lords, I am afraid I should have difficulty in putting that Amendment. It would be one without notice.

§ LORD THOMSON
My only plea on that score is that I really have had very little time. We have been rather rushed with this measure in the House, because we have done the whole of this Bill practically in two days. This is a way of meeting the objections of the noble Viscount. After all, the purpose is to do justice as far as possible to the case, and if I could, by permission of the House, transfer this Amendment to Part VI, I should be very grateful. I quite see that where it stands now it is quite impossible of application.

§ THE LORD CHANCELLOR
I understand the noble Lord does not move?

§ LORD THOMSON
I have not moved. I was putting it as a request for permission to move it later.

§ VISCOUNT CECIL OF CHELWOOD
My Lords, I do not know what my duty is. I am a comparatively new comer to your Lordships' House. I understand the noble Lord to suggest that he should not move his Amendment now, but should be allowed to move it in Part VI of the Bill, which can be done, I understand, with the general assent of the House. But I am afraid that I shall have to oppose it wherever the noble Lord moves it, because I do not think that the Amendment, as it stands, is an admissible Amendment, whether it is in Part I or Part VI. He might, therefore, think it convenient to take the discussion now, and the question of where it ought to go in the Bill could be dealt with after the discussion of the Amendment.

§ LORD THOMSON
I do not propose to weary your Lordships with a repetition of the arguments which were used yesterday, I used all that I could, and the 480 noble Earl, Lord Buxton, did the same on another subject, but after all the idea is very similar. So, if I have to wait until this matter comes up again for the permission of the House to move it in Part VI of the Bill, I will content myself with not moving the Amendment now.

§ Clause 7:

§ Power of Railway and Canal Commission to confirm schemes.

§ 7.—(1) Where a scheme has been referred to the Railway and Canal Commission, the Commission, if satisfied that the scheme conforms to the requirements of this Part of this Act, shall take into consideration all objections to the scheme which may be lodged by any person or by any class or body of persons within such time and in such manner as may be directed by the Commission, and where any objections have been so lodged shall hear any objectors whom they consider entitled to appear.

§ (6) Where any such scheme makes provision for additions to existing or the creation of new classes of share or loan capital of any existing company, then, notwithstanding anything in the memorandum or articles of association of the company, the additional capital of each class shall form part of and rank pari passu with the existing capital of that class, and any new class of capital may rank before any existing class of capital.

§ LORD BANBURY OF SOUTHAM moved to leave out subsection (6). The noble Lord said: My Lords, I beg to move the Amendment which stands in my name to omit subsection (6). I do not know whether your Lordships agree, but in my opinion this is an extremely important subsection. What is the effect of it? The effect is to destroy the security on which a person has invested his money and to allow some other person to take payment in front of him and so to depreciate his security. Such a thing has never been sanctioned by either House in the history of Parliament. Somewhere about the beginning of the present century (I cannot remember the exact date) late one night in the House of Commons, I found in a Bill, the name of which I cannot remember at the moment, a clause similar to this dealing with railways. It was something like two or three o'clock in the morning in the course of a very late sitting. I protested strongly against the clause and I was told by the representative of the Government who was in charge of the 481 Bill that unless a clause of the sort was put into the Bill it would be impossible for some Irish Railways to obtain money.

§ I said: "That does not seem to me to be a good reason for upsetting the whole principle on which trustees invest money. You must remember that if you do this sort of thing you will interfere with the security of marriage settlements, of all trusts, of every kind of security, and of the reserves of private and public companies which have been put into this class of security because it is secure and not because they wanted a high rate of interest. You will upset all those securities." But I got no support. I divided the House. I forget how many were in my Lobby but it was an infinitesimal number and the clause was passed. I saw the late Lord Avebury, who was then a member of your Lordships' House and a prominent member of a well-known banking firm. He had had great experience of the City and of all financial matters and he took my view at once. He came specially to your Lordships' House when the clause came up for consideration and your Lordships rejected it, and when the Bill went back to another place they agreed with the Amendment which had been made by your Lordships.

§ I appeal most earnestly to the Government to accept my Amendment. It is not moved with any view of wrecking the Bill, nor would it wreck the Bill in any way or prevent the various clauses in the Bill from coming into operation. But if this subsection is accepted it will destroy the security on which large numbers of innocent people have invested their hard-earned savings, and it will do it with no good object and no result at all. Without this subsection the money could be obtained possibly at a slightly higher rate of interest or it might be that, with the consent of the debenture holders, something might be put in front of them, but that would be a voluntary matter and for them to decide. I earnestly implore your Lordships to consider well before passing this subsection in order that money may be obtained at a smaller rate of interest. My noble friend told me yesterday that he would consider this matter, and I had hoped that he would accept the Amendment. I am rather afraid that when he came into this House he had determined 482 not to do so. Having heard what I have said, however, I hope he will accept the Amendment. If not, I hope your Lordships will support me in the Division Lobby, because from a financial point of view this is really a most serious matter. I beg to move.

§ Amendment moved— Page 7, Lines 23 to 30, leave out subsection (6).—(Lord Banbury of Southam.)

§ VISCOUNT CECIL OF CHELWOOD
My Lords, I think my noble friend is really proceeding under a misapprehension in this matter. That some provision of this kind is absolutely essential I think your Lordships will see in a moment if you consider what may happen under an absorption measure, under this Bill. In that case the existing company continues. It takes into it other companies, but it continues. But something must be done for the shareholders and others interested in the absorbed company. They must be put into a position which is no worse than that which they had in the absorbed company. For that purpose it must or it may be necessary to give them shares in the existing company which shall rank pari passu with the old shares of the existing company. The shareholders in the absorbed company would obviously be very unfairly treated if no such possibility was open.
I agree that the power to do that is one that must be carefully watched lest injustice should be done to the original shareholders in the existing company. That is very important, I agree, and that is the reason why, under subsection (2) of Clause 7, such very wide powers are given to the Commission to see that no injustice of that kind is done in any circumstances. The words are:— .… the Commission (a) shall confirm a scheme if satisfied that it would be in the national interest to do so, and that the terms of the scheme are fair and equitable to all persons affected thereby. And the clause goes on to say in paragraph (b), that the Commission may in particular if, upon an objection lodged by the holder of any securities in a constituent or absorbed company to whom by the scheme securities in the amalgamated or principal company are allocated in substitution therefor, they are satisfied that the substitution would not be fair in his case, order that in lieu of the proposed substitution his existing securities shall be purchased at a price to be determined in such manner as the Commission may direct. 483 Therefore, the greatest possible precautions are taken to avoid any injustice to the original shareholders and owners of securities in the absorbed company.
In those circumstances I really think my noble friend ought to be satisfied that we have done everything to protect the financial integrity of the companies concerned and the financial reputation of Parliament. I feel sure that unless some power of this kind is given in the Bill it is not a question of a little more or a little less money, but you will run grave risk of doing serious injustice to shareholders in the absorbed company.

THE EARL OF CRAWFORD
My Lords, it is a very singular thing that this clause should be necessary in what is practically a Mines Amalgamation Bill, but that no such clause was inserted in the recent Railway Amalgamation Act. What is the explanation?

§ VISCOUNT CECIL OF CHELWOOD
I will give the noble Earl the explanation of that. It is because, except in the case of the Great Western Railway Company, no existing company went on. It was a new company altogether. Therefore, new shares were created and there was no difficulty arising between the shares in the old companies and the new shares. The difficulty here is this. You have an existing company going on and the shareholders of the absorbed company coming into it. You have to take some protection to see that they shall not be unfairly dealt with on coming into the existing company. In the case of the one company which did continue its existence—namely, the Great Western Railway Company—a clause of a similar kind but not altogether the same was adopted.

THE EARL OF CRAWFORD
Not the Great Western Company.

§ VISCOUNT CECIL OF CHELWOOD
It was not the same clause but it was a similar one.

THE EARL OF CRAWFORD
These last lines do not agree with those in the Great Western Railway Company's Act.

§ VISCOUNT CECIL OF CHELWOOD
This is the clause: Notwithstanding anything in any special Act affecting the Great Western Railway Company, or the holders of any 484 class of loan or share capital in that company, the additional capital of each class shall form part of, and rank pari passu with, the existing capital of that class, and any new class of capital may, with the consent of the majority in value of the holders of any class of security affected, rank before any existing class of capital. It is quite true the protection is different because there was no Railway and Canal Commission in that case to see that no injustice was done to the shareholder. It was left to a chance majority of the class of shareholders—a far less protection than is provided for by this Bill.

THE EARL OF CRAWFORD
The noble Viscount concedes my argument of fact. When amalgamation takes places now those who have what are called prior rights, in the way of debentures for instance, have to express their sanction to a change in the nature of their security, be the majority what it may, as set out in the articles of association or in the charter governing the company. That was the principle applied to the Great Western Railway Company. The amalgamated companies had to proceed according to their own articles and, up to a 50 per cent. majority as laid down in the Statute, they had to agree or to disagree. In point of fact they were sensible enough, I believe, in every case to agree to the change. But the proper method of procedure is to allow these things to be settled firstly on the authority and on the initiative of the directors of the company and ultimately by permission of the shareholders or debenture holders of the company. In most companies' articles of association or memorandum it is laid down on what terms and by what majority these changes can be made. It would be infinitely better if the same course were pursued in this case as was pursued in the Great Western Railway case. I think it is most unfortunate that in this Bill we should have very large and very far-reaching amendments of the Companies and Finance Acts and I think the result of this must be to depreciate trustee securities. It is another of those interventions by the State into the industry, like the one to which referred yesterday and to which I shall refer again later on to-day, that are going to make it more difficult for the industry to raise money or to reduce its 485 cost of production. It is no good dividing, but I must record my regret that Lord Cecil cannot accept this Amendment.

LORD BANBUBY OF SOUTHAM
My Lords, may I, with your Lordships' permission, say one word in answer to my noble friend Lord Cecil? He is quite mistaken in what he said about the railways. He said there were no new companies with the exception of the Great Western.

§ VISCOUNT CECIL OF CHELWOOD
No, I said they were all new companies.

§ LORD BANBURY OF SOUTHAM
Then I apologise. That is correct. Yet there was nothing which compelled them to put any debentures in front of existing debentures without the consent of the debenture holders. The whole of my noble friend's speech was directed to the rights of the shareholders. That has nothing whatever to do with it. I have no concern with the shareholders, for they are in a very different position altogether. I do not object to the clause so far as it relates to the shareholders. I speak only for those people who have been content with a small rate of interest for their money in consideration of a special security having been given to them. It is the security of those people that I am desirous of maintaining; I do not care twopence about the shareholders. It has nothing to do with the shareholders, it has to do with debenture holders and debenture holders only.

§ LORD SUMNER
My Lords, I think your Lordships should be informed of one aspect of this matter. I sympathise very much with my noble friend. Anything that interferes with prior rights or with the holders of prior securities is a very grave thing indeed. It is a very serious matter to introduce new capital which takes priority over capital that has already been invested in a concern. But one must remember that this Bill is supposed to be dealing with a condition of great emergency and the assumption is that there may be cases in which the amalgamation of concerns is absolutely necessary to prevent those concerns going under. I understand that to be the kind of case that is referred to. My noble friend Lord Banbury 486 says he does not object to the provisions with regard to the shareholders. I think it is obvious that when by your scheme you provide for the creation of additional share capital of whatever class and it is duly sanctioned, the new capital must rank pari passu with the old. The point is that objection is taken to any new class of capital being allowed to rank before any existing class of capital. But that is subject to considerable limitations. This subsection merely makes it possible for the scheme to contain such a provision.
It does not get any further, as the noble Viscount has pointed out, unless the Commission have been satisfied that they ought to confirm the scheme for two reasons. One is that it is in the national interest to do so and the other is that the terms of the scheme are fair and equitable to all persons affected thereby. It is evident that the Commission could not confirm such a scheme as this unless they said to themselves that the proposition was for the national interest and that it was fair to all parties concerned to make an issue of debentures and put it in front of the existing debentures and turn the former first debentures into second debentures. I can only imagine that that could be done by the Commission if, first of all, the circumstances of the amalgamation were such that the concerns combining were unable to continue economically when separated and could only combine if they raised fresh capital—that it was really of national importance that they should pull together and turn into a combined company which could work collectively as the separate companies could not do separately—and if they were satisfied, in the second place, that it could not do that without new capital, the old capital being all paid up and all put into the mine and yet not yielding satisfactory results, so that the thing must come to a standstill unless new capital could be got on some terms or other.
Now, if the first debenture holders as they stood before the scheme were left to exercise their legal rights, they could dig in their heels and say there was nothing doing and in no circumstances would they consent to anything; and if that was so there would be no fresh capital and the amalgamation would fall flat. Therefore, in order to prevent a small class of 487 persons who are already in very deep water ex hypothesi from exercising their rights in that extreme way and preventing anything being done, these words are put in, making it possible for a scheme to raise the new capital and for it to be put before the Commission as a scheme which is absolutely necessary in the national interest and fair and equitable to the persons affected. After all, some new capital must be got into the concern on the only terms possible so that the thing may be started again. That is, as far as I can tell, the idea in the minds of those who framed this clause.
I object very much to anything that impairs the security of debentures and debenture stock, but then the whole thing which is being done by this Bill is of a most exceptional character. If one looks at it from the point of view of forty or fifty years ago every clause makes one shudder afresh. Still, the situation is that His Majesty's Government have committed themselves and us to passing this measure. It has become a pledge the failure of which would gravely affect the negotiations which we are all hoping may come to something some time. In those circumstances, as I do not think it can apply except in very unusual circumstances, and as it is safeguarded by the judgment of the Railway and Canal Commissioners, I shall be prepared to lend support to the clause.

§ On Question, Amendment negatived.

§ Clause 14:

§ Royalties welfare levy.

§ 14.—(1) Every person liable to pay mineral rights duty on the rental value of rights to work coal and of mineral wayleaves in connection with coal, or who would be so liable but for any exception by common law or statute, shall be liable to pay for the financial year ending the thirty-first day of March, nineteen hundred and twenty-seven, and for every subsequent financial year a levy (hereinafter referred to a "the royalties welfare levy") at the rate in each case of one shilling for every twenty shillings of that rental value:

§ Provided that no person shall be liable to pay the royalties welfare levy in respect of any coil worked, or to be worked, by means of any mine of which the principal object is the getting of fire-clay, ganister, ironstone, or other similar minerals.

§ VISCOUNT NOVAR
My Lords, on behalf of my noble friend Lord Lamington, 488 I beg to move, in subsection (1), after "rental value," to insert "save that Mineral Rights Duty shall be deducted therefrom." I think the noble Viscount in charge of the Bill undertook to consider the point before Report.

§ Amendment moved— Page 10, line 17, at end insert ("save that Mineral Rights Duty shall be deducted therefrom").—(Viscount Novar.)

§ VISCOUNT CECIL OF CHELWOOD
My Lords, I have faithfully fulfilled the pledge I gave to my noble friend to consider his Amendment very carefully, and I asked the Departments concerned also to consider it very carefully in order to see whether it would be possible for me to recommend your Lordships to accept the Amendment. I am really sorry to have to say that the conclusion come to is that it would never do for me to take that course the whole thing works in an exceptionally narrow compass. The object of the Government—as I am afraid I have said much too often already—is to carry out as far as they possibly can the recommendations of the Royal Commission. There is not the slightest doubt that the recommendation of the Royal Commission was that this should be a five per cent. levy, and that it should be levied on the whole amount and not on the amount less the Mineral Rights Duty.
It is very easy to argue that it would have been a better arrangement to make to do the other thing but, although I know it is a delicate thing to do, I venture very respectfully to appeal to your Lordships to consider whether it really would be desirable, after this Bill has been considered in the other House, and based as it is in this respect on a perfectly clear recommendation of the Royal Commission, to make such a change as is proposed by the Amendment. I can well understand arguments in principle being urged, as they were urged by my noble friend the Duke of Northumberland yesterday, against the whole idea of a levy for this purpose. I admit that that is a fair question of principle to be discussed, but once that principle is conceded I think, if I may say so without offence, that for your Lordships to put in Amendments whittling it away as it were would produce a most unfortunate impression and really would be of very little advantage to anyone concerned. It is for this reason, and not 489 because I am out of sympathy with the general point of view which has been expressed on the subject, that I venture to appeal to your Lordships not to accept the Amendment.

§ On Question, Amendment negatived.

§ Clause 18:

§ Recruitment.

§ 18.—(1) The Minister of Labour may, after consultation with associations representing respectively employers and persons employed in the coal mining industry, make Regulations for securing that in the recruitment of persons over the age of eighteen years for employment to which this section applies preference is given, while this section is in force, to persons who were employed in such employment during the period of seven days ending on the thirtieth day of April, nineteen hundred and twenty-six, or when last before that date in regular employment, and in particular such Regulations may impose restrictions on the engagement of persons for employment to which this section applies, and on the employment of persons engaged in contravention of the Regulations, and may provide for requiring the owners, agents and managers of coal mines and persons employed in or seeking such employment to furnish the Minister of Labour with such information as he may require for the purpose of securing compliance with the Regulations:

§ Provided that no such Regulations shall impose restrictions on the engagement for employment of any person in actual receipt of a pension granted out of moneys provided by Parliament in respect of a disability arising out of his service with His Majesty's forces during the War.

§ LORD BANBURY OF SOUTHAM rose to move, in subsection (1), to omit all words after "employment," where that word occurs for the third time, down to the proviso. The noble Lord said: My Lords, I beg to move the Amendment which stands in my name. The words I propose to leave out are "and in particular—"

§ VISCOUNT CECIL OF CHELWOOD
My Lords, I hope my noble friend will forgive me, but I ought to have moved an Amendment which comes before his Amendment and which I think may meet to some extent the point raised. I am extremely sorry to interrupt my noble friend—

§ LORD BANBURY OF SOUTHAM
Much the simpler way would be to accept my Amendment.

490

§ VISCOUNT CECIL OF CHELWOOD
I am afraid I cannot quite do that, but I am anxious to meet the point which was raised by my noble friend the Earl of Crawford—namely, to limit these words and to make it quite clear that they are not put in in order to give a roving power. For that purpose I propose with the leave of the House—I shall have to ask leave, because I have not given notice of the Amendment which is a very simple one—to insert in line 6 after "make regulations for" the words "the purpose of." That is merely verbal. The clause will then read: "make regulations for the purpose of securing," and so on. That makes no difference in the sense. It is merely to introduce the word "purpose." If your Lordships accept that Amendment I shall then move in line 13 to leave out the word "restrictions" ["in particular such regulations may impose restrictions"] and make the sentence read in this way: "and in particular such regulations may impose such restrictions as may be necessary for that purpose." That will confine the restrictions strictly to the purpose already indicated in the earlier part of the clause.
I hope that this Amendment will meet the point made by my noble friend Lord Crawford, and also the Amendment put down by my noble friend Lord Banbury, to whom I apologise for having interrupted him in his observations. Perhaps the most regular thing would be for me to move the first verbal Amendment now and, if that is carried, we could take the discussion either on my subsequent Amendment or on the Amendment of Lord Banbury.

§ Amendment moved— Page 12, line 6, after ("for") insert ("the purpose of")—(Viscount Cecil of Chelwood.)

§ On Question, Amendment agreed to.

§ LORD BANBURY OF SOUTHAM moved, in subsection (1), to omit all words after "employment," where that word occurs for the third time, down to the proviso. The noble Lord said: My Lords, I must now move my Amendment, or otherwise I shall be cut out altogether. The Amendment to which we have just agreed is really only a drafting Amendment and does not very much matter. It is a little difficult to understand the noble Viscount's proposed 491 Amendment without having seen it on the Paper, but, so far as I can makeout—my noble friend will contradict me if I am wrong—its effect is to restrict the clause to people who were in employment seven days before April 30. The mine owners must give preference to persons who were in their employ before April 30 and, if anybody else comes forward and there is also an applicant who was so employed, he must give preference to the latter. I think that my noble friend's Amendment will limit it to that, and that nothing further can be done.

§ That, of course, is an improvement, but it does not altogether meet my point, and I should hope that it does not meet the point of members of the Liberal Party opposite, who are still, I believe, individualists. The doctrine of an individualist—I am proud to call myself one, if there is no objection on that side of the House—is that a man shall have the right to sell his labour to the best buyer on the best terms that he can obtain, and that another man has the right to purchase the labour on the best terms that he can obtain. This is really giving practically a monopoly to the persons who were employed before April 30 and, though I admit that the Amendment does to some extent improve the clause, it does not altogether do away with my objection and, if I can get any support, I shall certainly divide on my Amendment. At any rate I will move it, in order to see if I can get any support.

§ THE LORD CHANCELLOR
In order to safeguard the Amendment of the noble Viscount, I must put it that the Amendment of the noble Lord is to leave out "and in particular such regulations may impose."

§ Amendment moved— Page 12, line 12, leave out ("and in particular such regulations may impose")—(Lord Banbury of Southam.)

§ LORD GAINFORD
My Lords, before the noble Viscount replies, and before returning to the point that I made on Thursday last, I should like to say that I am not ashamed to call myself an individualist in connection with a matter of this kind, and I do feel that there is very strong ground for supporting the noble Lord, Lord Banbury of Southam. At the present moment our great difficulty in the coal trade is to be 492 able to produce coal at a price lower than the selling price, and the very object, as it appears to me, of this Amendment is to restrict the power to employ efficient labour. No doubt the desire of the Government is to save the taxpayers' money in one direction by reducing the number of men who may be either upon the "dole" or receiving Poor Law relief, but, looking at it from the industrial point of view, it seems to me most important that those who are engaged in the opening of collieries should not necessarily be compelled to employ those who have been engaged at other collieries in other coalfields. In order to have efficient production, it is necessary that you should be able to employ the most efficient labour obtainable, and all these proposals to restrict the recruitment to a particular class seem to me to be unfair to the community.
This proposal gives to a man who has been employed in the mines and who went out on strike a preference over every other kind of man, because not only may he be employed in the mines but he may, in competition with other classes of labour, seek employment elsewhere; whilst those in other industries cannot seek any employment whatsoever in the mines. I gave your Lordships an illustration of this last Thursday. It does seem to me that it is wrong, especially when you have unskilled operatives working on the surface, to have to go into another district to take men who were not re-engaged on the opening of other collieries and to refuse labour to those who live in the district and are able, as unskilled labourers, to be employed at better wages than they obtain from the work which they are now performing. If the noble Lord goes to a Division, I shall support him.

§ VISCOUNT CECIL OF CHELWOOD
My Lords, I hope that my noble friend will not decide quite definitely until he realises the effect of the Amendment that has been proposed.

§ LORD GAINFORD
I do not quite follow the noble Viscount's words.

§ VISCOUNT CECIL OF CHELWOOD
The Amendment upon the Paper is to leave certain words out. That would not in any way, as I understand it, restrict 493 the operation of this clause. The clause, if these words were left out altogether, would still give to the Ministry of Labour the power to make Regulations for the purpose of securing that in the recruitment of persons over the age of eighteen years for employment to which this section applies preference is given, while this section is in force, to persons who were employed …. and so on. That power of making Regulations will remain, and all that would be changed would be that if you read the clause with the Amendment which I propose, the words would be:— in particular such regulations may impose such restrictions as may be necessary for that purpose.… That is to say, the restrictions are to be confined to that purpose, and the Ministry of Labour is not, under the guise of making these Regulations regarding recruitment, to go beyond that purpose. Accordingly, the words, as amended, would really, in my judgment, be rather a restraint of the words in the first part of the clause than an enlargement.
We are not discussing now, as my noble friend Lord Banbury seems to think, the general principle of this clause. As I told the House with great candour—at least, I meant to be perfectly candid—this is a clause to which great objection on principle can obviously be made. I said so on the Second Reading and, in my judgment, the only defence of it is the defence on which so much that is to be found in this Bill rests—namely, that we are doing our best to carry out the Report, because that is the policy to which the Government are pledged, and that we cannot take this provision out and say that we will not have it unless there is some overwhelming reason, as in the case of the nationalisation of royalties, why we cannot accept the recommendation of the Commission. It is for that reason that this clause was supported and, when it was challenged yesterday in Committee, the House did not think fit to strike it out.
My noble friend Lord Crawford, in the course of the discussion yesterday, raised an important objection to certain words which, as printed in the Bill, do look at first sight as if, so far from restricting the general power, they would enlarge it. The words of the Bill are: and in particular such regulations may impose restrictions ell the engagement of 494 persons for employment to which this section applies. My noble friend Lord Crawford very rightly pointed out that this was a wide power to give to the Ministry of Labour, who might extend such a provision to require that every person engaged should be a member of a trade union, or something of that kind. That seemed to me to be a perfectly just criticism on the part of my noble friend, and I said so yesterday on the authority of my noble friend the Lord Chancellor. We are proposing words to meet the difficulty which was raised by Lord Crawford, and that is the only point raised by my Amendment. The general policy of the clause is not really raised by this Amendment, and if my noble friend Lord Banbury of Southam succeeded he would not really in any way cut down the powers of this clause. Indeed, if I had to choose between the clause without the Amendment which I propose and the clause with his Amendment, I think from his point of view I should prefer the clause as it stands on the Paper. For that reason I hope my noble friend will reconsider his determination to support Lord Banbury in the Division Lobby.

THE EARL OF CRAWFORD
My Lords, I am very much obliged to my noble friend below me for having introduced his Amendment. I think it meets, at any rate to some extent, the plea that I made yesterday, but of course the word preference" still remains, and it is almost as easy to exaggerate and perhaps abuse the word "preference," as to abuse or perhaps exaggerate the word "restriction." So there remains a certain danger that the excellent intentions of Lord Cecil of Chelwood and of Sir Herbert Samuel may ultimately find themselves falsified. I want to say one word upon the general use of these words in the two Amendments. They really relate to the principle underlying the clause. There is no doubt at all about it, this clause does limit the area of recruiting. That indeed is its avowed intention. That is all it is put into the Bill for—namely, to make it difficult for outsiders to obtain employment in the coal trade.
What is the actual position? Of course these excellent people who reported in a very interesting and valuable Report only 495 began to learn about the coal industry by visiting the mines a few days before they began to take evidence. The future development of our minerals lies broadly in the big area around Retford, and again in the area lying between Canterbury and Folkestone. Considerable developments are taking place in those areas now. There are no indigenous colliers east of Retford, or in all the Kent coalfields. All the employees must be imported, if the preference laid down in this clause is carried into effect. How and when? If, as is possible, there is a considerable reduction in employment in the older pits elsewhere there will be, as Sir Herbert Samuel thought, a surplus of colliers in the Midlands or Durham, or wherever it may be, and it is innocently imagined that these people will migrate from Durham to Kent. They will not. They do not want to do so. The one thing in the world that they loathe is moving But they may find themselves obliged to move, and under those conditions it will very likely happen, as has happened before, that a number of men will move from one coalfield to another. They will soon get tired of it and then retire, but meanwhile you have always the uncertainty whether you are going to be allowed to recruit from local persons, when you have got a surplus elsewhere who may claim their preference to be taken on in place of the local people.

§ VISCOUNT CECIL OF CHELWOOD
It only lasts for three years.

THE EARL OF CRAWFORD
I thought it was five years, but even so I think it is a mistake in principle. I think anything which demobilises labour is in itself a rather dangerous thing. One of the impressions left upon the minds of the parties of artisans, workmen, colliers and others who have recently been visiting the United States is the freedom which artisans and workmen over there possess and enjoy of being able, if they wish, to change from one trade to another. If a mechanic wishes to become a collier he may do so, and if a collier wishes to become a builder he may do so. It gave a sense of mobility, enterprise and freedom, which impressed our people over there very much indeed. We know the scandal of building to-day. Hundreds of thousands of houses are wanted. Disease 496 is rife in this country to-day because building has become a close trade, and for three and a half years you are applying to the coal trade a bad principle, which has been fatal in the case of the building trade. In three and a half years we shall not have begun to scratch the Kent coalfield or the coalfields to the east of Retford. This is one of the many clauses in the Bill which I am afraid is going to increase the cost of the Bill.

§ THE LORD CHANCELLOR
My Lords, I think there is some misapprehension as to the effect of the Amendment, because the noble Earl based his argument on the pith of the earlier part of the clause. If Lord Banbury's Amendment is carried the main part of the clause will stand, and it will still be the duty of the Minister of Labour to make Regulations to secure preference, and the only effect of this Amendment is to take away a part of the machinery for giving effect to the main part of the clause. I do not think your Lordships wish to do that. The effect of the Amendment proposed by my noble friend Lord Cecil is to confine these powers in the latter part of the clause to the purpose of the earlier part of the clause. To leave these words out and destroy that machinery would have this further effect. The last words of this paragraph enable the Minister to obtain information from the owners of collieries which would assist him in securing compliance with the Regulations. If a preference is to be given it is only right that he should be able to call upon the colliery owners to tell him what they know as to the men they desire to employ, the vacancies they have and so on, so that the Minister might give them information as to the miners out of work. I cannot help thinking that if your Lordships were to leave the main part of the clause standing, and to destroy the machinery, that Amendment would not be likely to secure acceptance elsewhere. I hope that your Lordships will not carry this Amendment but will prefer the Amendment of my noble friend.

§ LORD BANBURY OF SOUTHAM
My Lords, I was quite aware, in moving my Amendment, that it did not omit the first few lines of the clause, which say that the Minister of Labour may, after consultation, 497 make Regulations for securing that preference is given to certain men. I should have liked to omit the whole thing. I did move to omit the clause yesterday, but I did not get very much support, and I was afraid that if I tried to omit the whole clause again my noble friend would say that I was politically courageous, and had tried to do again what I was defeated in yesterday. Therefore I endeavoured to come to a compromise. The whole thing really turns upon the question of restrictions. If my Amendment is carried the Minister may, after consulting employers, make Regulations for securing preference. That is all. If my Amendment is not carried out he may go further and make restrictions. Now, Regulations for giving preference to people are a very different matter from putting restrictions on employment. You do not in the least know what interpretation may be given to the word "restrictions," and therefore I think it had better be left out altogether.
When you come to the last lines, which have been alluded to by the Lord Chancellor, I would ask why on earth should "owners, agents and managers of coal mines and persons employed in or seeking such employment" be compelled to furnish the Minister of Labour with such information as he may require. More forms to fill up, more time wasted and diverted from the proper purpose of the owners and managers, who should be looking after the mines and not filling up forms! More people required in the Ministry of Labour at the expense of the taxpayer, and nothing whatever done, except trouble and worry caused to everybody. I therefore earnestly hope that I shall be able to carry the Amendment.

§ On Question, Amendment negatived.

§ VISCOUNT CECIL OF CHELWOOD
I beg to move to insert the words I have already read out to your Lordships, which carry out the wishes which, I understood, Lord Crawford has expressed.

§ Amendment moved— Clause 18, page 12, line 13, leave out ("restrictions") and insert ("such restrictions as may be necessary for that purpose")—(Viscount Cecil of Chelwood.)

§ On Question, Amendment agreed to.

498

§ Then (Standing Order No. XXXIX having been suspended), Bill read 3ª, with the Amendments, and passed, and returned to the Commons.