HL Deb 03 March 1927 vol 66 cc329-35

Order of the Day for the Second Reading read.


My Lords, in moving the Second Reading of this Bill I think I can save time if I read a letter that has been sent to the Town Clerk of Liverpool by the Assistant-Secretary of the Ministry of Health. Your Lordships will see that three members of your Lordships' House have given notice to move that it should be an instruction to the Committee that Clause 214 [Power to buy, sell, import and deal in coal] should be omitted. The letter is as follows:— With reference to the Bill promoted by the Corporation in the present Session of Parliament, the Minister observes that, in Clause 214, the City Council propose to take powers to engage in the sale of coal. I am directed to inform you that the Government consider that this is not a matter which is suited for local legislation and that, if and when they are satisfied that action is necessary, they will deal with it as a general question. In the circumstances the Minister hopes that the Council will see their way to withdraw the clause. That being so, the promoters have communicated with me and, I believe, also with my noble friend, saying that when the Bill reaches the Committee they will ask those of your Lordships who serve on the Committee to omit that clause.

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

LORD FORREShad given Notice to move, in the event of the Bill being committed, That it be an instruction to the Committee to which the Bill may be referred to strike out Clause 214. The noble Lord said: My Lords, while the action taken by the promoters of this Bill under the inspiration of the Government renders entirely unnecessary the Motion that I had intended to move, I should like on the Second Reading to make some reference to the principles which it is proposed to carry into legislation in this Bill. The larger portion of the Bill is, I think, unobjectionable, and I do not propose to refer to any of the points that will come under review by the Committee and will, no doubt, receive the care and attention that are always given by Committees of this House. Nevertheless, Committees of this House are small in numbers and not all of us sit upon them, and we have not therefore an opportunity of examining in detail many of the interesting points that arise.

This particular clause, Clause 214, though it is proposed to withdraw it in Committee, is still in the Bill, so far as this House is concerned at the moment, and it brings before us a question of very vital importance to the trading community and the consumers of this country. This question of municipal trading is one on which it is difficult to lay down an absolutely hard and fast rule as to how far it can be permitted. It is obvious that such matters as the supply of gas, water, electric light and so forth may be called municipal trading; but they are, after all, public utilities and are concerned with cutting up the public streets which are in the charge of the municipalities concerned. These public utilities occupy, in my judgment, a very different position from a trade in such an article as coal. In matters of trading it appears to me that private enterprise can better supply the needs of the community and at a cheaper cost than municipal trading can supply them. Therefore there is no need for municipalities to undertake that branch of activity, although it may be quite reasonable that they should undertake the supply of water, gas and electricity. The two things are on an entirely different footing. And while I believe that municipal trading has already been allowed to go to some extent beyond what are called public utilities—I believe, for example, that the Legislature has sanctioned municipal trading in electric light fittings—still we have to be very jealous and very careful not to allow this policy to be generally adopted.

This power would have given Liverpool the right to deal in coal, not only in the case of a strike but also in the case of an apprehended rise in prices. Well, if Liverpool may speculate in coal because the Town Clerk and the Corporation think that there is to be a rise in the price of coal, why should not Manchester and a great many other towns also do so? We should then have the spectacle of municipalities entering upon speculations which might end disastrously and the cost of which might fall upon the ratepayer. I think the principle is a dangerous one. It was for that reason that I put down the Motion which stands in my name, but I did so on my own initiative and only subsequently did I receive representations from a number of bodies who entirely objected to this clause. I am very glad that the Government have taken my Motion into consideration and recommended the promoters of the Bill to withdraw the clause. I shall be interested to know whether they have done so on principle or because of the details of the clause, but that perhaps is immaterial at the moment. They have taken that step and therefore the object I had in view has been achieved. I wish to say for my part as a trader and merchant, that the principle suggested in this clause is one which I think is a very bad one, and I hope we shall not have it brought again before this House.


My Lords, it must not be taken that those who sit on this Bench agree with all the principles laid down by the noble Lord who has just spoken. If he wishes to see an example of what is aimed at let him look at the price of coal that is being charged by the coal merchants in London to-day and compare it with the price that is being charged in Scotland. There is no doubt that somewhere or other there is a great taking of profit and adding to profits going on at this moment which ought to be checked. I quite appreciate the proposition that legislation ought to be entered into in a general fashion, but pending that it must not be taken that some of us here do not recognise the great grievance from which the public is suffering at the hands of the private vendors of coal in comparison with what might be if the sale of coal were put on a different footing. It is all very well to take this as a proposition which is concerned with Socialism, but your Lordships have already embarked upon Socialism in the case of water, light and gas, and the time will come when you will have to embark upon it in connection with public conveyance.


My Lords, I quite agree with what was said by the noble Lord, Lord Forres, with regard to Clause 214. I confess I am somewhat surprised that a Corporation with such a reputation as Liverpool should put a clause of this kind into their Bill practically containing as it does the principle of bringing Socialism into every question affecting marketing and selling—a clause, indeed, which would enable them to buy and sell coal when they think the price too high. Whether the price is high or not it will always be too high for gentlemen who are anxious to get votes. This principle is one which could be developed to any extent, and I cannot see why coal is specially selected. If you give the power to buy and sell coal, why not give it in the case of flour and meat, in fact everything that a Corporation might think was too dear? I think there is a great deal of ignorance prevalent with regard to these matters, but to give a municipality this power would be a very foolish and unwise policy on the part of your Lordships. The price of coal varies constantly and I have always found that competition is the best means of fixing its value.

I know that people are accustomed to compare the price of coal coming out of the pit with the price of coal supplied to the consumer. They are altogether different things. The price of coal which comes out of the pit is for the whole of the coal produced from the mine, containing stones, which have to be picked out, and dirt, and it has to be screened to a large extent before you can supply it for domestic use. There are some cases where thirty, forty and I have even known cases where seventy per cent, of the coal is slack and small coal which has to be taken out of house coal intended for domestic use. The price of the latter is therefore altogether altered because screened coal commands a high price and small coal usually a very low price. Then you have to consider the cost of taking it to the consumer. I have had some experience of retailing coal to small people. They do not usually take a very large quantity, and a man who is dealing with 20,000 tons of coal in the year, selling by cart, has very heavy expenses. He has offices to keep up, he has rates and taxes to pay, he has clerks, and he finds that in handling the coal it is often very much broken and he has to take a large quantity of small coal out of it. All that means that there is no comparison whatever between the price paid by the consumer and the price realised at the pit for the whole of the production. It is quite impossible at the moment to give an exact figure because in every town and district the figures vary.

I am bound to say that if the Liverpool Corporation attempts to undertake this trade it will lead to very great difficulties in connection with many other matters. I am not a believer in all this legislation against profits. What is business for but to make profit? Who benefits? Of any profit that I make the Government takes fifty per cent., and I suppose when I die they will take fifty per cent. of my savings. I feel sure of this, that if you allow this clause to pass you will create many very great difficulties in other ways. Municipal authorities cannot compete with private enterprise any more than a Government can compete with private enterprise. In Newcastle we have a very good system of trams, but what has happened? The Corporation will not give a licence for a single omnibus because they know very well that if they allow omnibuses to run they will very soon have to close down the trams altogether. Omnibuses are very much more convenient, they do not stop the traffic and can be run at very much less cost, I am sure, than the ordinary tramway.

I do not think that on consideration your Lordships will allow this Bill to pass without giving an instruction to the Committee to remove Clause 214. Whatever may be the opinion of the Liverpool Corporation and other municipalities who intend to go into these social questions, I do hope that your Lordships, in the interests of the community at large, will not allow such a clause to pass. The community has a very great interest in this matter. Do you think that the private retailer is going to compete with a municipality which has the rates behind it and which, if it makes a loss, will be able to make it good out of the rates? As a very large ratepayer I know perfectly well that it would be extremely unwise to allow any municipality or any Government to carry on business of this kind. This is the beginning of an attempt to get hold of the general trade of the country and I feel quite sure that if your Lordships do not pass the instruction you will have a great many similar Bills brought forward by those extreme men who, in my judgment, do not quite understand these questions. I hope that your Lordships will prevent municipalities from going in for trading against the regular traders of the country. The regular traders are the people who pay the rates. I feel sure that as time goes on if we do allow such a clause as this to pass, it Will have a very serious and bad influence upon all these matters, which we are so anxious to carry on for the benefit of the community.


My Lords, as various noble Lords were not present when the letter was read by the Lord Chairman I think it would be well if I read it again. It is a letter sent by the Ministry of Health to the Town Clerk of Liverpool and is as follows:— With reference to the Bill promoted by the Corporation in the present Session of Parliament the Minister observes that, in Clause 214, the City Council propose to take powers to engage in the sale of coal. I am directed to inform you that the Government consider that this is not a matter which is suited for local legislation and that, if and when they are satisfied that action is necessary, they will deal with it as a general question. In the circumstances the Minister hopes that the Council will see their way to withdraw, the clause. The Government understand that in deference to their wishes an undertaking has been given that this clause will be withdrawn. Therefore the general considerations which have been put forward by various noble Lords do not arise in this particular case.

On Question, Bill read 2a, and committed: The Committee to be proposed by the Committee of Selection.