COAL MINES BILL.

HL Deb 29 April 1930 vol 77 cc165-220

Order of the Day for the Second Reading read.

THE LORD CHANCELLOR (LORD SANKEY)

My Lords, I beg to move that this Bill be now read a second time. I must ask for the indulgence of the House in presenting a difficult and intricate subject,, especially as this is the first occasion upon which I have had the honour of addressing your Lordships in debate. I could wish, in these circumstances, an easier task, and regret that this duty has not been entrusted to the more capable and experienced hands of the noble and learned Lord who is the Leader of the House. One thing, however, I share with him—and indeed, with all your Lordships—and that is a great desire to do anything and everything possible to restore peace and prosperity to the great industry upon which the commercial supremacy of our Empire depends, and to ensure a fair and just reward to those who by their labour, their skill or their savings contribute to the success of the undertaking. When we remember that the number of our fellow-countrymen directly engaged in coalmining is nearly a million, and the number of those dependent on them is nearly two million, we must recognise that this is not an occasion for personal triumphs or Party advantage. We must pool our brains and experience to arrive at a satisfactory solution of the problem.

I do not propose to weary your Lordships with endless statistics. Unless otherwise stated, those I shall quote have been obtained from the Mines Department, and I trust that, as to many important and difficult matters, we may have the advantage of your advice and criticism in the Committee stage which we hope you will give to the Bill. In order to make my remarks as clear and as concise as possible, permit me to address your Lordships on three topics; namely:—1, The present condition of the industry and the causes for it; 2, what this Bill proposes to do; 3, why your Lordships should give the Bill a Second Reading.

Firstly, then, as to the present condition of the industry and the causes for it. In considering the coal trade we are not dealing with an industry in its infancy or one whose production is likely to expand. The world's consumption of coal has settled down to a yearly quantity of about 1,300,000,000 metric tons. About 40 per cent. is produced in the United States of America, little of which is exported to Europe. About 50 per cent.—roughly 650 million tons—is produced in this Continent, and for all practical purposes that amount has of late tended to become static, although a prophecy may be hazarded that the use of electricity derived from waterpower, of oil and, above all, the more scientific uses of coal itself, will tend to diminish the demand. This is a fact which must not be lost sight of by those who take a long view of the problem. Even if there is an improvement in our industrial conditions, it is not likely that there will be any appreciable increase in the total of coal consumed. Coal has formidable rivals. It seems idle to have a cut-throat competition either nationally or internationally to supply the demand. Such competition is only carried on at the expense of those who work, or have saved, to support the industry. On the other hand, care must be taken to prevent either a national or international monopoly unduly raising the price of coal to the consumer, whose livelihood, and even whose life, in many countries depends upon a cheap supply of the commodity.

As far as we are concerned, our maximum production was in the year 1913, when we produced 287,000,000 statute tons, out of which we exported about 73,400,000 tons, excluding bunkers. For the four years 1924, 1925, 1927 and 1928 we raised an average of 250,000,000 tons, out of which we exported an average of 53,000,000 tons, excluding bunkers—unfortunately either on an unremunerative basis or at a loss. The returns for 1929 show an estimate of 256,000,000, out of which we exported 60,000,000 excluding bunkers, but at a very small profit. The loss per ton of coal disposable commercially was—in 1927, 5¾d.; in 1928, 11d. For 1929 there was a small profit of about 4d. Our productive annual capacity is somewhere between 325,000,000 and 330,000,000 tons.

The War produced universal dislocation. Let it not be forgotten that once again in our island story the miners poured to war in such numbers that many had to be recalled ! About four hundred thousand joined the Army or the Navy, and as a result our output went down 40,000,000 tons. The places of those who remained in the Forces were not always filled up by experienced men. The industry was placed under control, and when the Armistice arrived at the end of 1918 we had lost all our markets except France and Italy. Over and above that a large proportion of the world's mercantile marine had taken to oil fuel. At the end of June, 1929, 10 per cent. of the tonnage registered at Lloyd's consisted of motor ships and 29 per cent. consisted of ships fitted for burning oil fuel. It has been calculated by competent observers that in eight European countries water-power resources have been developed to such an extent that work is now being done by electricity which formerly it required 28,000,000 tons of coal a year to perform. Here at home a large number of tons which it is not easy to estimate has been lost in the same way. I fear we have lost some of those markets beyond hope of recovery because foreign nations are beginning to develop their own supplies and are not likely to rely upon us so much in the future as they did in the past.

Before the War Holland produced 1,500,000 metric tons. To-day she produces 10,000,000. France has increased her consumption, but she has also increased her production to a slightly higher amount. Before the War we sold 21,000,000 tons for bunkers; to-day we only sell 16,000,000 for that purpose. Russia was a customer for 6,000,000 tons; but in 1929 we sent 712,000 tons only. To add to our post-War difficulties two further misfortunes overtook the trade. Under the Treaty of Versailles the Reparations Agreement which became operative on January 10, 1920, compelled Germany to supply with coal the only two markets we then had left—France and Italy—and, as if to administer a knockout blow, the Government on March 31, 1921, decontrolled the industry long before it was ready for its freedom and left the owners and the men to the fight which inevitably followed. Since that time our policy has been to lower the price by reducing the cost of production in the hope of regaining lost markets, some of which had gone for ever. Longer hours, lower wages, bank overdrafts, reduction of royalties, concessions from railways and docks, derating—we have taken every device to cut prices in the bone of regaining the pre-War business. Every device but, with a few exceptions, that of reconditioning and reconditioning the industry.

In 1921 the wages bill was drastically reduced. So it was in 1922. The men worked well, but they were badly paid. I am sure the employers honestly believed they would secure their desired end, but the British coalmining industry led the price-cutting process throughout the world, and to no purpose. The Government had no settled policy, no well-thought-out plan; they improvised only an aimless opportunism in the face of a rising tide of difficulty which bewildered them. In 1925 they voted a subsidy of £23,000,000; by the Act of 1926 they compelled the majority of miners to work another hour a day. What has been the effect of the Eight Hours Act? In a word, over-production. There was more coal coming into the market than there was a market for. With what result? Fewer men employed and coal still sold at unremunerative prices. Do not misunderstand me. I am not arrogating superior knowledge nor apportioning blame. I am trying to persuade you that something must be done, that some change must be made. The wise profit by the experience of others, foolish men by their own. During the period under discussion many inquiries were held, many persons called into consultation, whose advice was rejected in favour of doing nothing. In 1925 there was a Royal Commission under the presidency of Sir Herbert Samuel. In 1926 there was the Lewis Committee, who inquired into marketing schemes, in 1925 an inquiry under Mr. Macmillan and in 1919 a Royal Commission with which my name is to some extent associated.

Since then I have not said or written a word on the subject. My Report must speak for itself. But I would ask a few minutes of your Lordships' patience and forbearance while I make a first and last personal statement upon it. I have not changed my mind. I still firmly believe that nationalisation is the only solution of our difficulties. Two settlements are wanted—a national settlement and an international settlement. Till we have the one we shall never have peace and till we have the other we shall never have prosperity in the industry. I had good grounds for believing that my suggestions would be accepted. My hopes were to provide a system founded on local and individual effort with central control; to see the best brains in the trade working directly for the good of the State rather than indirectly through over-capitalised companies struggling to pay dividends by using obsolete methods and antiquated machinery which ought long ago to have been consigned to the scrap heap; to improve and regulate the sale and distribution of the product of the industry. What we wanted was modern minds, modern methods, modern machinery and willing workers. But it was not to be.

Some one may say: "But if you believe in nationalisation why are you supporting the present Bill?" The answer is simple. I am a member of a Minority Government. In my view no Minority Government is entitled to put forward so sweeping a measure as nationalisation. That in the near future there will be a substantial majority for it I do not doubt. Already the signs of national and international agreements may be seen on the horizon. Meanwhile I ask your Lordships to give this Bill a Second Reading because it is a possible step and a proper step to take to relieve the present unfortunate state of affairs.

What has been the result of our coal policy? Collieries selling coal at a loss, unable to pay in some cases their dividends, in other cases even their interest on debentures, overdrafts piled up, royalties reduced and yet in arrears, anxiety for the owners, misery for the miners, poverty for many small people who have lost their savings or who get no return for them. Such, my Lords, is the present situation. Is there a sensible man who is satisfied with it? What is to be done? Are we to do nothing? There are a few who say: "Leave it alone. Leave the trade to itself." That is the cry of a certain class of people who see in every reform the ruin of the Empire. "Leave it alone" they said when women were forbidden to work in the mines, and one of the most discreditable episodes in the history of British labour was brought to an end. "Leave it alone" they said when child labour was abolished. Shall we leave the industry entirely to itself? Shall we abolish the safety regulations? They are peculiar people who, when an industry is sick, or when an individual is ill, say "Leave it alone; leave him alone." We did not leave it alone when in 1887 we regulated the industry by the Coal Mines Regulation Act, or when we improved the regulations by the Coal Mines Act of 1911. Did those Acts ruin the industry?

My Lords, you cannot pass by on the other side when there is this crisis in an industry upon which not only the livelihood and happiness of millions of our fellow countrymen depend, but in which the commercial supremacy of our Empire is involved. Nowadays politics and economics cannot be separated into watertight compartments. Some risks must be taken, for it is a law inflexible and inexorable that he who will not risk cannot win. We ought not, however, to reckon every risk. Nothing will ever be attempted if all possible objections must first be overcome. But while it is wise and prudent to ascertain and face the facts, there is no cause for despair. I am still an optimist. The coal trade is not down and out any more than England is down and out. Those defeatists who go about saying so with faint hearts and dismal prophecies are doing a great disservice to their fellow-countrymen and to the future of our race.

Everyone knows how easy it is to criticise and how difficult it is to construct, and I will ask your Lordships to remember this as I now pass to my second topic—what this Bill proposes to do. This Bill proposes to do four things:—1, To regulate the production, supply and sale of coal; 2, to facilitate a reorganisation of the industry; 3, to deal with hours; 4, to establish a Coal Mines National Industrial Board. The proposals to regulate the production, supply and sale of coal are contained in Part I of the Bill and are to remain in force till December 31, 1932, unless Parliament otherwise determines.

Dealing with these proposals, before going into details it may be convenient to discuss the principle involved. Mining is not like agriculture, where a bounteous nature year by year renews the produce of the fields. Coal is a wasting asset and when once used cannot be replaced; and not only is it a wasting asset, but as time passes it becomes increasingly difficult to win, by reason of the fact either that the working face is farther from the bottom of the pit shaft, or that you have to go deeper to find it. It is therefore of the first national importance that our coal supplies should not be depleted by improper usage. In fact we might apply to them the old philosophy and say that "the mean is the object to be attained and an excess or a defect is to be avoided." In other words, we should endeavour to correlate production with demand. To produce too much coal is bad and wasteful; to produce too little is harmful not only to the individual but to the general industry of the country. We must endeavour therefore to ascertain as nearly as possible what the demand is and produce sufficient, with a margin if you like, to satisfy the demand. The principle is obvious. The only difficulty is the machinery to ensure the proper application of the principle. This Bill adopts that principle and permits the erection of machinery which it is thought will be the most efficient to secure the desired end. Let me endeavour to state the provisions quite generally.

A central scheme and a number of district schemes are to be set up subject to the approval of the Board of Trade (under Clause 1). A Central Council and a number of executive boards are to be created to carry out the schemes with power to enforce their orders by penalties. The Central Council—this is provided in Clause 2—is to be composed of representative coal owners. The main duty of this Council will be to co-ordinate the districts and to decide the maximum amount (called tile district allocation) which each district shall be entitled to produce. There are to be twenty-one such districts, as set out in the Schedule. The Central Council will say "District No. 1 shall be entitled to raise so many million tons; District No. 2 so many," and so forth. There are various other provisions setting up the machinery; there is power to appoint officers, to make a levy for expenses, to appoint trustees, to call for returns from districts, and, further, there is a right of appeal to any executive board against any act or omission of the Central Council to independent arbitrators appointed under the scheme.

The Central Council having thus allotted to each district its maximum output, district schemes are formed. That is in Clause 3. Each district will have its own executive board to be elected by all the owners of coal mines in the district. Such executive boards will determine what is called the standard tonnage of each coal mine. Having determined the standard tonnage, they will decide upon that basis what proportion, called the quota, of its standard tonnage each coal mine shall be entitled to produce. There are provisions which enable a coal mine to deal with its quota, and for fixing a minimum price. Further, there may be provisions for making a levy on the owners of coal mines in the district for the purpose of developing the sale of any class of coal—for example, export coal—produced in the district.

The principle is obvious. What this Bill seeks to do, and what it is thought that the machinery set up under the Bill will enable to be done is:—

1. (1) To prevent as far as possible over-production or under-production of coal—an object which is not now so difficult since the quantity consumed, as I have stated, has tended to become static;
2. (2) to prevent cut-throat competition, which causes coal to be sold at an uneconomic price;
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3. (3) to assist the export trade; and
4. (4) by means of certain committees of investigation (which I shall now explain) to prevent the producer unduly raising the price of coal against the consumer.

These committees of investigation are to be set up by the Board of Trade. Part of the members of them are to represent the interests of the consumers. The committees may enquire into any complaint made against the Central Council or an executive board and report thereon to the Board of Trade, who may act upon the report.

Any objection or any opposition to the objects of the Bill can hardly be imagined, but criticism has been directed against four points:—(1) The method of examining the standard tonnage; (2) the quota; (3) the fixation of prices; and (4) the levy to assist the export trade. The details of these can be better given on the Committee stage of the Bill. Nothing has as yet been suggested to take their place. Indeed, they are only machinery set up to accomplish the object of the Bill. Not only that; they have been discussed, approved and put forward by many of the best brains in the coal mining industry, as I shall now proceed to show.

When in 1928 the owners recognised that the situation could not remain as it was and that something must be done, they met together in different parts of the country to devise schemes on the lines indicated, but on a voluntary basis. The chief of them was the five-county scheme in Yorkshire, covering nine counties in all, including Yorkshire, Nottinghamshire, Derbyshire, Lancashire, Cheshire and parts of Warwickshire. In due course that organisation covered 90 per cent. of the output. It provided, amongst other things, for, 1, a standard tonnage; 2, the application to that standard tonnage of a quota; and 3, a power to make a levy for the express purpose of assisting the export trade. In South Wales there was a scheme to regulate minimum prices. In Northumberland and Durham a fixation of prices scheme; in Scotland a scheme for a levy on all coal other than export coal to provide for the temporary extinction of uneconomic mines. It will be within your Lordships' recollection that when the present Government came into office numerous consultations took place between them and the coal owners and the miners. The owners themselves, in an early interview with the Prime Minister and the members of the Cabinet Committee, stated that they were taking steps to deal with the marketing of coal, but that they would not be able to complete their arrangements unless they had compulsory powers; that is, powers to bring in a minority in any district where that minority proposed to remain outside. This element of compulsion therefore so far has the approval of many of the owners themselves.

The proposals to facilitate a reorganisation of the industry are contained in Part II of the Bill. If the argument is correct that the present condition of the industry is unsatisfactory and that something must be done, one turns at once, as far as amalgamations are concerned, to a measure promoted by the Conservative Party in 1926. That Act, which is known as the Mining Industry Act, 1926, sought to induce amalgamations upon a voluntary basis, but it has not been a great success, and only a few schemes have been sanctioned under it. The present proposals differ in that they introduce an additional element of compulsion. Before going into the details it might not be out of place to discuss the policy with regard to amalgamation. Unfortunately, the term is in danger of acquiring the reputation of the blessed word "Mesopotamia," and there are some who see in it a universal panacea. The real object of an amalgamation is to ensure the large scale production of coal more in accordance with modern practice, and instead of having a number of small concerns to have a few large ones. It is urged that by doing so you reduce overhead charges to begin with. If this were the only advantage to be derived from the proposal it is doubtful whether it would be worth while considering it, for the reduction in overhead charges when spread over a total tonnage of a large amount does not very materially affect the price per ton. An amalgamation, however, has two other advantages which do make for a reduction in price. Firstly, it enables the amalgamated concern to buy larger quantities of material, machinery, oil, pit props, and so forth, at a reduced price; and, secondly, it also enables better marketing and better distribution of the product; and no doubt these are real advantages.

Amalgamations properly conceived and properly carried out will undoubtedly assist the industry, and the problem is how to conceive and how to carry them out properly. What we want is real amalgamations and not financial deals. A financier is not seldom a gentleman Who helps himself instead of helping the industry. It is the Get-Rich-Quick Brigade who are the curse of the trade, and voluntary amalgamations entered into upon the basis of capital which has been heavily watered cannot hope to be successful. Forgive me an example to illustrate my meaning. Supposing in order to make a number of persons come into an amalgamation scheme you offer too much in respect of each individual item, the amalgamated companies can never hope to pay a reasonable dividend; you cannot pay on a capital of £7,000,000 when the property it represents is only worth £2,500,000. The object of the present scheme is to endeavour to promote proper amalgamations and prevent financial juggling. The difficulty in the way is not the question of policy, but the machinery for carrying it out. The Act of 1926 will not provide for that machinery, as it was an Act drafted to meet voluntary amalgamations only, but it can be made use of to some extent.

This Bill proposes to set up a tribunal known as the Coal Mines Reorganisation Commission, to be appointed by the Board of Trade and consisting of five Commissioners. They may require two or more owners to prepare and submit to the Board of Trade an amalgamation or absorption scheme, and in default, may submit such a scheme themselves, and the Board of Trade are to refer the scheme to the Railway and Canal Commission under the provisions of the 1926 Act for decision. The amalgamations will not be made upon existing capital with its artificial value of watered stock, but upon a valuation basis as between a willing buyer and a willing seller to be made by the Commission. Each of the amalgamated companies will be extinguished and will receive its due proportion of shares from the amalgamated concern, or some other fair compensation. I have indicated now the object and the method of amalgamation, leaving all the rather intricate details for the Committee stage upon which you will have the advantage of hearing the noble Lord who, I trust, will be in charge of the Bill.

The proposal as to hours are contained in Part III of the Bill. In respect of hours the object is to reduce the 8 hours a day to 7½ plus one winding time. One of the chief difficulties in the way of a proper understanding of the coal trade is the peculiar manner in which they make their calculations. The way in which wages are ascertained is a mystery to the outsider. As far as hours are concerned there is no such thing in law as a 7-hour day or an 8-hour day. It is a purely arbitrary term meaning the period that has to elapse from the time when the last man on the shift goes down until the time when the first man on the shift comes up. The present proposal will give a working day of 8 hours, possibly 8 hours and one or two minutes, largely spent underground. Give me leave to develop my argument for such a system. First of all it is a fact that the majority of British miners work longer hours than the majority of Continental miners. The figures are a little difficult to ascertain. They were given by Sir Herbert Samuel's Commission, have been revised by the International Labour Office, and comparing like with like, they are: Belgium, 8 hours; Czecho-Slovakia, 7½ hours; France, 7¾ hours; Germany, 8 hours: Poland, 8 hours; Holland, 8 hours and 10 minutes. In Great Britain, at the present moment the majority of miners work for 8½ hours per day.

Do not forget this consideration, that units of labour are more important than length of time. There may be workmen whose natural characteristics and aptitudes are such that 7 hours of their work is worth 8 hours of the time of other men. There may be willing and satisfied workmen 8 hours of whose time are worth 9 hours of the unwilling and dissatisfied. Then again, you must remember that over a great part of England this system of 7½ hours and one winding time is already in operation. It is worked in Yorkshire, Derbyshire and Nottinghamshire, and by hewers in Northumberland and Durham. In respect of 100,000,000 tons out of 250,000,000 tons this 7½ hours and one winding time is in operation.

Lastly, I would ask you to consider the psychological aspect of this proposal. Do not imagine that nothing exists but what is gross and material. In many a colliery balance sheet I have noticed the item of good will. It is an intangible, an incalculable asset, but none the less it exists. The old customers remain with the old firm, but it is not only the good will of the customer that is worth having, the good will of the collier is equally precious. My ambition is to restore peace within the industry and this proposal is the first step towards peace. At the moment the industry is a house divided against itself. What would we not give to get for the next ten years the work of willing workmen; to have certainty and agreement, instead of uncertainty and disputes?

The conditions in the coal fields are the cause, not the result, of agitation. I read recently with great interest and great profit an article written by the noble Marquess who sits on the Front Opposition Bench, himself a great coal owner, in which he appealed for justice for the workmen. Give them that justice and they will cling to you, but as long as it is denied them, you will never have peace. Already one can see a tendency in this direction. On the question of hours many of the owners are in agreement with the men. The Party to which I have the honour to belong support them. So do the Liberal Party. So, if I mistake not, do many of your Lordships.

Let us take this step towards conciliation. But some one will say: "What will it cost? Will a 7½-hour day increase the price of coal?" No one supposes that if you reduce hours it will make no difference. The loss of time must be reflected in the cost of production. Do not however be misled by the absurd estimates and scare statistics of political partisans. The increase which must at first take place will be gradually reduced to vanishing point. You can make up for shorter hours—1, by raising the price; or 2, by reorganising the industry. No one wants to raise the price and it is confidently anticipated that the increase in cost which must at first follow will be gradually reduced and will finally disappear with the improved organisation. This Part of the Bill is to come into force four months after the passing of the Act and is to remain in force during the continuance of the Act of 1926—that is, until 31st July, 1931.

I must not weary your Lordships by longer speech, but the proposals as to the Coal Mines National Industrial Board are contained in Part IV, the last Part, of the Bill. The object is to establish a tribunal of seventeen members, to be appointed by the Board of Trade, and representing not only the Mining Association of Great Britain and the Miners' Federation of Great Britain, but other important organisations, both of masters and men, with whom agreements between the owners and the workers in coal mines may be registered and recorded, and who, in case of any dispute as to wages or other conditions of labour, may enquire into it and report thereon to the parties concerned. It will be observed that the tribunal has no coercive or compulsory powers; its sole duty is to make inquiries and to report. It is a common experience that many disputes arise because the parties to them do not accurately know the facts and are not able to appreciate the real position of the other side, and it is thought that disputes will not so often arise or at any rate will be more satisfactorily settled if all parties know the circumstances surrounding the case. The experiment was tried in the ease of railway workers in 1921 and found to be successful. In this country it is important that the general public should have a true appreciation of the facts, for after all in our system public opinion in the long run makes itself felt. Due care is taken in the Bill to prevent the exposure of any secrets which might do harm to the parties.

I now pass to my third and last topic: Why your Lordships should give the Bill a Second Reading. Permit a new member, who after fifteen years spent as one of His Majesty's Judges comes among you without political experience, to state the position in which (as it appears to him) we find ourselves. The great benefit which this House as at present constituted, and with its present rights, can confer upon the political situation is to review and to revise. Your right to reject is beyond dispute, but your wisdom will probably persuade you not to do so out of hand on Second Reading, and indeed not in Committee, without putting forward some alternative suggestions for future consideration. In a crisis like the present I conceive it to be your desire to act as a great Advisory Council to the nation. It has often been pointed out that this House has lost much of its power, but what it has lost in power it has gained in prestige. Great questions are debated here upon which members can express their opinions untrammelled by previous pledges; and indeed on all questions whether connected with the Forces or the professions, commerce or politics, we have amongst us men who are entitled to speak with expert knowledge. I could wish that more of the younger members and Back Benchers would take part in our deliberations. By their education and their position they are equipped to help us. To them much has been given, and from them much is rightly expected. I hope that the Bill will go into Committee and that we shall have the advantage of hearing their suggestions.

It is not an easy or a pleasant task always to be addressing an audience the overwhelming majority of which is usually against you. We who sit on the Government Benches in this House will endeavour to place before the House—and I doubt not you will be glad to hear—the views and desires of the millions of your fellow-countrymen who agree with us. Under our system of government, the accumulated wisdom of our history, Parliament is the final arbitrator in our differences and it will be a bad day for Britain when her sons become tired of knocking at Parliament's door. What does the country want? It wants a revival, a great ethical revival, both in this industry and throughout society. Let us renew a right spirit within ourselves not only in one class but in every class. There is an old motto which runs: "Plenty of work and the heart to do it." That is the secret of success and the source of happiness. We shall never get plenty of work as long as our industries remain in their present antiquated condition.

Time was when our Continental competitors were far behind us in the race. Now they are pressing on our heels. Time was when we could afford to take things easily. That time has gone. We have no use for slackers. What we want is not only the opportunity for work but, what is more important, the will to work. If we work and stand together, if we are not divided into hostile political Parties, a united British effort will put us far in front again. Without such an effort we shall have difficulty in maintaining a population already over large for our area and activities.

But I have left till last the most important consideration: the heart to do it. You may multiply the most modern of machines, you may adopt the most modern of methods, but the human element is, and will remain, the key to the situation. It is there that the economists and calculators fail. They make the mistake of regarding men as mere machines, but it is men, not machines, who have made and who will maintain our Empire. Let us have a truce to Party politics and political manoeuvres. It is the country that matters. Let us see that there is a fair and just reward for those whose brains contribute to the success of the industry; a fair and just reward for those who by their savings have enabled it to be started and supported; above all, a fair and just reward to those who day by day risk their lives in working for it. That assured, the industry will give a fair and just return to the country at large. I see in this Bill a beginning of better things. I do not believe for a moment it will be a final solution of our difficulties or that it will provide a "happy issue out of all our afflictions," but I am persuaded it is a step in the right direction. Let us take that step. Then we shall have done something to dispel the cloud which is hanging over a great industry and something to remove the sense of bitterness which for too long has darkened many a British home.

Moved, That the Bill be now read 2^a.—(The Lord Chancellor.)

THE MARQUESS OF LONDONDERRY

My Lords, it falls to me to follow the noble and learned Lord on the Woolsack, not after he has made his maiden speech, but on the first occasion on which he has introduced a Bill into your Lordships' House and, as he put it himself, has joined in debate, and I am sure that I am voicing your Lordships' opinion when I say with what satisfaction and admiration we have listened to the speech which the noble and learned Lord has delivered. Perhaps I may add with all respect and humility, in the customary phraseology, that your Lordships sincerely hope that he will often take part in our debates. The noble and learned Lord has ranged over a very wide area and he has certainly made a very moving appeal to myself in relation to many objects to which I have endeavoured to devote my life. He has spoken of this Bill as the means of achieving those objects. I wish I felt myself in full agreement with him on that point. I somehow feel that this Bill is not the manner in which the objects and the ideas that he has in view are likely to be achieved. Nevertheless I want further to congratulate the noble and learned Lord on the manner in which he has put before your Lordships the Bill as it has emerged from another place and comes up to us for discussion.

Although a certain time has elapsed, your Lordships will remember that this Bill was threatened, assailed and defended by practically equal forces in another place. Its daily and nightly fortunes depended upon the somewhat changeable attitude of the Liberal Party, but, for reasons that I need not go into now, the Liberal Party were prepared to go back on many of those principles that they have held for a great number of years, and this Bill, with all its faults and failings, which I shall endeavour as best I can to put to your Lordships, has now reached your Lordships' House. In my judgment the Bill appears to contravene many of those basic economic principles on which we have been brought up. It is a further contribution to the policy of bureaucratic control, with the corresponding loss of initiative, and the sterilisation, in my judgment, of the spirit of enterprise.

The noble and learned Lord on the Woolsack has told us quite plainly that he believes in the nationalisation of all industries, and I presume that he looks upon this Bill as a stepping-stone in that direction. I agree with him. I think there are provisions in this Bill which certainly open up a far wider discussion than I should be allowed to enter into on this Bill to-night. The Bill reduces working hours in an industry which at the present moment is finding great difficulty in paying its way. It raises prices to the consumers who can ill-afford to pay those prices, and I go so far as to say that in Part I of the Bill it is a very dangerous concession to owners to compel by Statute dissenting minorities to come in. I am of opinion that this statutory provision will in the future provide encouragement to other industries who find themselves in an analogous position, when they see that by pressure of Party politics they can bring the same benefits to their own particular industries.

There is another feature in this Bill which makes me deplore its introduction, and that is that it has created a measure of disunion among coal owners themselves at a time when there were signs in every direction that owners were coming together and recognising the great difficulties with which the industry was faced, and were hoping by mutual cooperation to come through those difficulties. The National Board, which the noble and learned Lord dealt with last, is a Committee which in my judgment, and from my experience of the coal trade, will cut across all those conciliation committees which have done so much in the past in overcoming difficulties of which the general public have never heard, and In making the path of the coal owners smoother. The Bill provides for a cost of administration amounting to £285,000, which is entirely unnecessary. It creates a period of uncertainty and of insecurity, because this change in the hours of working will go on until 1931, when it is proposed to enact another change, and in 1932 Part I of the Bill comes to an end.

If I may quote the words which the Lord Chancellor used, he spoke of peace for the next ten years, and of certainty and agreement. That is what we want, and what the industry is gasping for—that it may have peace and security, and be able to formulate its own plans on certain knowledge of how the industry will be conducted in the next ten years—and this legislation is being enacted at a time when we are threatened with prospective legislation respecting mineral rights. If I were to state my own views, I am prepared to say that I am not in opposition to all the proposals in this Bill, but I profoundly object to the principle of this Bill being enacted by Statute, because I am quite sure that the statutory enactment of proposals which have been brought forward in some cases, and which might have been developed, could result in no success whatever by the provisions which are included in this Bill.

I now come to the duty of your Lordships in respect of this Bill. The noble and learned Lord on the Woolsack has made a special and very eloquent appeal to your Lordships not to reject the Bill, and whereas I have ventured in my remarks to make some very adverse criticisms upon the Bill, still I am sure that the right course which your Lordships should pursue, and the most patriotic course, is not to reject this Bill on Second Reading, because in my judgment there are very few Bills which come to your Lordships' House which I think your Lordships would take a wise course in rejecting. Very few Bills can be said to be entirely incapable of amendment and, therefore, when a Bill of this description comes before your Lordships, so many of whom are so particularly competent to deal with all these matters, it is only right that we should subject the measure to very searching and minute criticism, and do everything which lies in our power to remove or modify or amend objectionable principles, and endeavour to return the Bill to another place in a form which is less dangerous than that in which it appears at the present moment. In fact I hope that we may be able to fashion something which may be preferable to the measure as we see it now; but I feel strongly that the main reason why we should be wrong to reject this measure is that the chaos and confusion which would follow its rejection would be such as none of us could face with equanimity. That is the reason why I hope it may be possible, by means of amendment and by that conciliatory exchange of opinion to which the noble and learned Lord referred, to eliminate some of the more dangerous proposals and return the Bill in a better form than that in which it has reached this House.

The history of the coal trade during the last twenty years cannot be said to be a very satisfactory narrative. I think everyone will agree that the coal trade is the basis of our commercial prosperity. It has been responsible for the making of fortunes and for the losing of fortunes. It has brought about good times for the employer and good times for the employed. It has gone through times of unparalleled depression. The owners have had to take grave financial risks, and the industry has demanded from the men courage and endurance of the highest possible quality. It has been a subject round which political discussion has raged with unabated fury. Whatever difficulties we have had to face in the past, or may be called upon to face in the future—and this is where I differ somewhat from the noble and learned Lord on the Woolsack —I believe that the industry can be an expanding industry. There are more developments possible in the coal trade than we perhaps now know of, and if coal can be sold at a reasonable price that industry will expand. Coal, I believe, affords the best agent for the production of power, and I am sure that if we can come through our difficulties we shall find that the coal trade, as before, will restore the country to the financial prosperity which it enjoyed not so very long ago. What the industry requires at the present moment is a respite—not interference but a time in front of it in which it will be able to settle down and pursue its own methods of development. I am sure that the interference proposed by this Bill is one which cannot benefit the industry but only retard its progress in the future.

It is the fashion to blame the coal owners. I venture to say that the coal owners as a whole can compare in capacity and efficiency with any of our great captains of industry, and I think there is very conclusive proof of that, notwithstanding the fact that in the last ten years the coal trade has passed through a period of almost overwhelming difficulty. With your Lordships' permission I will give a few figures in support of my contention. The noble and learned Lord on the Woolsack went through a portion of the history of the coal trade since the War, but I think we should remember, first of all, that in the two years immediately following the end of the War, during which industry remained under Government control, the cost of production at the pit was practically double what it had been before. I venture to say that we should have a similar experience under the policy of nationalisation which the noble and learned Lord has advocated to-day. The price at the pit rose from an average of 21s. 6d. per ton in the last quarter of 1918 to no less than 40s. 3d. per ton in the first quarter of 1921. This compares with the 1913 figure of 9s. 6d. The introduction of the seven-hour day in 1919, for which the noble and learned Lord was, as he says himself responsible, was among the most potent causes of the decline of the British coal industry in the post-War period. By 1925, even with the seven-hour day, and in spite of the many other difficulties with which the industry had to contend, the cost of production had dropped under private ownership to less than 18s. per ton.

But this was too high to enable the industry to compete effectively in the world's markets, and towards the latter end of 1925 the exports of British coal, which constituted a third of our coal trade before the War, had shrunk to less than 40,000,000 tons a year, or half the 1913 quantity. The re-introduction of the eight-hour day after the stoppage of 1926 gave a new lease of life to the industry: The cost of production has been reduced since then by nearly 5s. per ton, and last year the coal industry produced no less than 257,000,000 tons, or only 10 per cent. less than the peak figure of 1913, and we were able to export no less than 60,000,000 tons. Surely it does seem unfortunate that at a time when the coal industry is staggering to its feet from the position which it has occupied for the last ten years the Government should think it necessary, for the purpose of fulfilling a pledge gaily and lightly given at the General Election, to bring in a Bill for the purpose of shortening hours, thereby, I am quite sure, retarding the recovery of an industry on which so much in this country depends.

The task which I have to discharge today is not altogether an easy one. I am afraid your Lordships may look on me with some suspicion, and feel that I perhaps stand here holding a brief for the coal owners, or some of the coal owners. I can assure you that that is not the case at all; in fact, some of my brother coal owners might say that they have not always found me in agreement with them, nor have I always found myself in agreement with them. I think, however, there is hardly any need for me to give any assurance that I do not look at this problem solely from the point of view of the coal industry; I look at it from the point of view of the nation, and that is the only way in which it is possible for us to consider this Bill. I hope that, if your Lordships give this Bill a Second Reading, in the Committee stage our de- liberations will be marked by a desire on all sides to get something out of the measure which may assist not only the industry but also the country.

The coal industry, I suppose, is a more complicated industry than any other in the country, and I believe it is less understood. It is less understood because there are so many conditions applying to other industries which are wholly inapplicable to the coal industry. I think I am not altogether wrong in saying that the processes by which the coal is extracted from the earth and placed in the coal scuttles of the consumers are processes of which those consumers are wholly ignorant. The price of coal may be forced up in the home market by means of this Bill, and the demand for that coal will depend upon the capacity of the consuming and competitive industries to pay for it. Increased costs are bound to follow the higher price of coal, and the competition in the foreign markets instead of getting less, gets more strenuous and more acute as the years go by. If you raise the price of coal in this country, it means that we shall have still further and greater difficulty in competing in foreign markets.

We must realise that if we do lose our foreign markets, and if the demand for coal in this country does decrease in consequence of the price being raised, that will mean a further addition to our unemployment, not only in the coalfields, but also in the kindred industries and in the transport industries, in fact, in every other industry in the country. Moreover, it will give the export trade districts a blow from which they will take a long time to recover. South Wales is almost entirely dependent upon its export trade. It has relied on this trade for a great number of years, and it is quite obvious that if it is unable to sell its coal abroad it will endeavour, somehow, to sell it in the home market. The rolling stock in South Wales is by no means adequate for that. They have never contemplated this different extension of their trade. Further, the physical conditions of the valleys in Wales do not lend themselves to a trade in the home market, because of the difficulties of access.

It is very easy to criticise the coal industry, and it is done broadcast from a very superficial knowledge. As we are all well aware, all industry in the last few years has undergone great and far-reaching changes, and I venture to say that the coal industry, in the efficiency with which it is conducted, has certainly kept itself abreast of the times. The noble and learned Lord on the Woolsack spoke of the difference in trade which exists at the present time. I entirely agree with him because, owing to our geographical position and the immunity we had from invasion, we were able with very disorganised forces, if I may use the expression, to control and dominate the markets of the world. But those same markets, by reason of our exploitation, have learned to organise and have come together, and it behoves all our industries to do exactly the same thing. I am sure your Lordships will agree with me after this debate has finished that whereas it may be said that the coal trade by reason of its inherent difficulties has lagged behind—shall I put it?—other industries in the methods which have built up the far easier organisations which appertain to them, still the lessons of the times have not been lost on the coal trade. We have seen signs of real organisation throughout the coal industry in all parts of the country. There is the five-counties scheme for one, and there hare been the meetings of the coal owners during these last few years which have shown very clearly that the signs of the times have not been lost on them and that it is their desire and determination to go forward on the lines of organisation.

The main question in this Bill upon which I wish to say a few words is naturally the question of hours. As your Lordships are aware, the question of hours has always been a vexed one. The present situation has no bearing whatsoever on the situation of 100 years ago. The humanitarian principle is naturally in all our minds, but it is one which does not come up particularly at this moment. There is not one of your Lordships who is not particularly anxious to see high wages and shorter hours, but I think you will agree that there can be a reductio ad absurdum of high wages and shorter hours and that such matters must be tempered by certain considerations. At the present moment the question of hours, which are to be arbitrarily altered under this Bill, is one of international importance. We are all well aware that at no distant date some very definite international decisions will be taken on this particular question, and it appears to me to be a complete lack of statesmanship and of courage on the part of the Government that, in the implementation of a pledge given at the General Election, they should bring in a Bill of this description which is bound to place them in a stereotyped position when it comes to negotiation on the question of hours at Geneva.

Your Lordships will pardon me if I say a few words on the misconceptions which exist about hours. The noble and learned Lord on the Woolsack has given your Lordships the hours in the various countries in Europe, but he has not told your Lordships that the custom of working abroad is different to the custom here, and that whereas on the sixth day we work for half a day or perhaps not at all, it is the custom in countries abroad, where shorter hours in the day may be actually worked, to work for six days and only to have a holiday on Sunday at the end of the week. I was particularly interested in some figures given a short time ago by an authority so well known as Sir George Hunter of Swan and Hunter. He writes in the public Press that according to figures published by the Mines Department, the average hours worked by British miners at the coal face are 37 hours 5 minutes per week. By the new Coal Mines Bill these will be reduced to 34½. Engineers and shipbuilders work 47 hours per week. Under the new Bill adult miners will be paid for 34½ hours' work at the coal face as much as or more than engineers or shipbuilders are paid for 47 hours' work. In fact, for the time spent in productive work they will receive about 30 per cent. per hour more. The 34½ hours do not include the time occupied in getting to and from the coal fact.

According to the figures of the Mines Department, our miners' wages are 9s. 7d. per day, the French miners earn 6s. 3d., the Belgian 5s. 2d. and the Polish 4s. 5d. Those are very striking figures and it will be seen that under the conditions hours are not too long and wages are not low. But I agree with the noble and learned Lord on the Woolsack that the question of working hours does interest us more in the coal trade than in other industries, because we all fully recognise that when a miner leaves the surface to engage in his occupation in the earth he is always surrounded by danger, and the shorter the time we can have for the miners underground the better it will be for the industry and for all concerned. But it does seem unfortunate that at a time when, as I said, the industry is staggering to its feet, the Government should, in the implementation of a pledge, bring in a Bill which will inevitably raise the cost of coal to the consumers. Let me say one further word with regard to hours. Your Lordships are aware, I think, that there have been negotiations between the owners and the men with reference to what is termed the "spread-over of hours." Whilst it is true that a definite decision has been arrived at by the Miners Federation, I hope that the door is not closed and that that will be a subject which we can discuss on the Committee stage and be able to arrive at some solution of it which will be satisfactory to all concerned. So much for hours.

I would now say a few words regarding Part I of the Bill which deals with the quota. Your Lordships know quite well that on this matter there is a difference of opinion among the coal owners themselves. I should be the last person to make any indictment of any section of those with whom I am associated, but I cannot help feeling that the Government have put the quota system into the Bill because they happen to have studied the Yorkshire system and that those who are in support of the system are not really considering the national interest. I do not disguise the fact that there are many coal owners who are going to do well under the Bill, but I am sure that if this quota system is made the subject of statutory enactment it will be found that it will not assist the industry in the way in which the noble and Learned Lord on the Woolsack seems to think. I am bound to say that I am not profoundly in disagreement with the quota system, but I object most profoundly to the system being enacted by Statute.

I am sure that as the result of what was in the minds of the coal owners in their desire to come together to exercise mutual co-operation, schemes of this kind might have been devised. Instead of that the State has stepped in and is proposing to increase the price of coal and to establish a statutory minimum price. It is intending to compel the dissentient owner to come into whatever organisation is set up. I am inclined to think that the dissentient owner is an individual who looks after, to a very large extent, the interests of the consumer, and do your Lordships imagine that by the committees which it is proposed to set up you will provide a substitute for the healthy influence on trade such as the dissentient owner exercises? I do not think that is the best way of dealing with what is called the reorganisation of the coal trade. The President of the Board of Trade in another place had something to say on this subject, and it is amazing bow certain obsessions warp the convictions of otherwise very estimable men. The right hon. gentleman spoke of the ruthless policy of trust organisations by which minorities have been forced to come in by the pressure of economic forces. It is very interesting to hear that in the heart of a Socialist Minister there is some sympathy for the harassed trader. But that is not the particular point I want to make to-day. I am quite sure that the healthy influence which is brought to bear, whether it is in a trust or whether it is in the organisation of industry, is a far better influence than that it is proposed to enact in the Bill which is now before your Lordships.

I am quite willing to agree that coal has been sold at uneconomic prices, and I also am fully in agreement with what the noble and learned Lord on the Woolsack has told us, that it is necessary in the evolution of all modern commercial activities to realise that there must be some relation between the potential production and the capacity of consumption. But I return to the theme which I have really been trying to put before your Lordships. That is that all these things could gradually have come about and that this statutory enactment is putting back the hands of the clock and retarding the wheels of progress. We have spoken of the last ten or twelve years in industry. That is a moment of time in historical analysis, and yet consider the changes we have seen. The Government, however, are desirous of speeding up these wheels of progress and of not allowing all these factors, which are so obvious and clear to all those who care to look at the industry as a whole, to fructify themselves and bring about their own successful conclusion.

There is only one word more that I need say, because there are so many members of your Lordships' House who are far better qualified than I am to deal with these manifold and intricate questions, and that word will be upon the question of amalgamations. The noble and learned Lord upon the Woolsack dealt with that subject, but he did not tell your Lordships, what we all know very well, that this provision in the Bill is an excrescence. It is a super-imposition on the original structure of the Bill. It is, if I may put it quite plainly, a fad of Sir Herbert Samuel which he derived from the Commission over which he presided, and I think that what influenced his mind was that there are a great number of undertakings connected with the coal industry in all parts of the country and that it would be more convenient for many reasons that there should be fewer undertakings. In one respect I feel myself in a certain measure of agreement, and that is in relation to our being able to speak to foreign countries. I should like to see a closer cooperation in the coal trade—and I do see that co-operation arriving—by which we should be able to negotiate as a whole with the coal trade in other parts of the world.

As regards amalgamations it is quite possible to draw a picture which would make the whole situation a ridiculous one, but I am not proposing to do that. I think that there are a great many misunderstandings in relation to amalgamations. There are very few analogies in the amalgamations of pits and collieries with other industries. I am not sure that in the actual amalgamation of two or three pits there is any advantage whatosever. The noble and learned Lord touched upon one point in which I am more or less in agreement with him and that is that the larger undertaking is enabled to purchase its stores and other necessaries on a large scale, and that may reduce the cost of production. But as regards management you cannot reduce your costs of management. The costs of management at this time are very small, but the whole management of a pit under statutory requirements is such that if you amalgamate any number of pits you cannot reduce your costs of management. There is another very important matter in amalgamation which is likely to be lost sight of, and that is the question of management itself. If you have an undertaking of far too large a size, the difficulty of management is one which it is very hard to overcome.

These, however, are matters of detail which will arise on the Committee stage, and I do not feel that I ought to trespass further on your Lordships' indulgence. I have ventured to put before you the defects which I see in this Bill. I sincerely hope that you will go so far as to give the measure a Second Reading, and that when it comes before us in Committee we shall endeavour to bring in Amendments, I hope with the assistance of noble Lords opposite, which will make it a better Bill than it is at the present moment.

LORD MELCHETT

My Lords, if I intervene for a moment at this stage of the debate it is because I approach this problem in a dual capacity, on the one hand as chairman of a coal company which produces four million tons of coal, and on the other hand as chairman of a corporation which consumes about two million tons of coal a year. Therefore from the point of view of the coal industry one sees both sides of the question fairly clearly and without much doubt. From the producer's point of view there can be no doubt that the introduction of this or any other Bill at the present moment is most unfortunate. The coal industry, after a long period during which it had become rather a political plaything than an industry, has been settling down under the Eight Hours Act to a reconstitution, which is open to anyone to see. In fact, as was to be anticipated, the restoration of what I would call a fairly normal working day resulted certainly in a large reduction in the cost of production, and resulted in an increase in our export, the difference between the years 1928 and 1929 being from 20,000,000 to 24,000,000 tons.

Nobody really quite understands why this Bill should be introduced, and the noble and learned Lord on the Woolsack, who made a very eloquent and very interesting speech, never gave us any reason why it should be introduced. He spoke about the feeling on the coalfield. I can assure him there never has been a time when there has been more harmony in the coalfield than at the present moment. There has never been a time when the collier has worked better, or when there was more co-operation. People are now only anxious to be allowed to come back to the pits and get out of the terrible unemployment from which they have been suffering. Speaking for the area of South Wales, of which I can claim to know something, if you took a ballot of the South Wales miners and presented them with the simple question, which they will be faced with very shortly, whether they wish to have a reduction of hours and a reduction of wages or whether they wish to remain on the wages they have now with the present hours, I have not the slightest doubt of the answer. That, is one of the points which seems to me to have been entirely ignored in the discussions on this Bill in both Houses.

Obviously in those areas where these hours are already being worked there is no reason why either the owners or the miners should take much interest in the proposal which is now being made, but when you come to a great exporting district like South Wales, the trade of which is two-thirds export trade, which has no home trade on which to levy to benefit its exports, where unemployment has been so terrible, where men have left the pits and gone to other industries and have only recently come back, then I say that so far from bringing peace into the coalfields the noble and learned Lord on the Woolsack is bringing the sword of war back into valleys now peaceful. I think that is no exaggeration and that those who know that area best will agree with what I have said.

It is one of the most curious and most extraordinary fashions of the present day in economic matters continually to endeavour to fix one point without fixing another. In the mining industry you by law fix hours and you do not fix wages. In agriculture you fix wages and you do not fix prices. In fact, although you have three or four complicated economic factors like the price of coal, the length of hours, the wages that you can afford to pay for a certain number of hours, Parliament fixes one point without any regard to the other. What is bound to happen when you come to discuss a new wages agreement is that you will have to begin discussing it on the basis of a reduction of wages to correspond with the reduction of hours, which both the President of the Board of Trade and the noble and learned Lord on the Woolsack agree is bound otherwise to create a rise in the cost of production. Why is this going to promote a beatific attitude in the coalfields and that spirit of harmony and friendship which we are all so anxious to bring about? Why endeavour to stabilise the same conditions for entirely different coalfields? When we get to the Committee stage I hope to be able to give your Lordships more details of the very great difference in the working conditions of the deep pits of South Wales as compared with, say, the pits of Yorkshire and the pits of Nottinghamshire. Why should we not have a little elasticity and enable different districts to save their own souls, to allow them as free citizens of this country to determine for themselves what they really would like to do?

I am terrified when I see this endeavour continually to force uniformity under the most different circumstances. People talk of coal mines as if they were just all the same, whereas anyone with, experience of them knows that even in the same coalfield working conditions are different, that the wages of men vary from stall to stall. Yet in this delicate and complex organisation you are endeavouring to fix by rule and rote conditions which must to my mind tend to damage the industry. And what for? Are we settling anything at all? What an absurdity it is. If this Bill becomes law, it will not operate for four months. At the end of that four months it will operate until July of next year. So all this colossal controversy, this upsetting of an industry so vitally important to the Empire, as we heard from the noble and learned Lord on the Woolsack, on which the happiness of millions of people depends, is only to deal with the period which will end in July of next year. It means that men who will have to sit down to make new agreements for wages and conditions will have to do it in a period of time so short that it is impossible to reorganise anything. Nor to my mind does it fulfil any pledge, because no pledge was ever given of a 7½-hour day. It is done, to my mind, really to satisfy quite academic ideas.

How can you make up your mind as to what pits you will have to close? and I say here that this Bill will mean to my knowledge the closing of certain pits in South Wales. In an industry which depends largely on exports, in which we have to compete with Germany and Poland and now Russia in the markets of the world, we cannot afford higher costs of production or to run pits at a loss. It is quite possible that very reluctantly—very reluctantly indeed—owners may have to reclose pits which they have only been able to reopen in the last few months after a period of long idleness. Really it becomes heartbreaking for anyone who tries to take an intelligent interest in the industry. You can accommodate yourselves to almost anything except perpetual change and uncertainty. The noble and learned Lord said that in time these higher costs will be absorbed in economies but in what time? Mines are most difficult things to change. Mines are much more difficult to make alterations in than ordinary factories. The re-conditioning of old collieries, as most mining engineers will agree, is so unprofitable and costly that it will never be undertaken. It would be much cheaper to sink a good new pit and abandon the old one.

All the advantages you can derive from amalgamation, the advantages of central washing, the working of contiguous pits together, all the many technical points involved, imply two things. They take time and they take money. I would like to ask your Lordships where the money is to come from. It is to-day practically impossible to find money in the ordinary financial sense for the colliery industry. How can you make an issue of capital to-day with a Bill like this suspended like the sword of Damocles over the industry? What firm would underwrite it, what investment house would take it up, what would the public say? They would say: "We will wait and see what happens." Month by month is being lost. Time is passing, our competitors are making headway while the British coal industry is hamstrung and paralysed by one Act and one Bill after another.

The noble Marquess said in the course of his remarks that it would not be wise for us to reject this Bill and the noble and learned Lord on the Woolsack asked us to be advisory rather than executive. Tactically, probably, we may be wise in following this course. Whether really we are doing our duty to the nation, whether we are doing our duty to the country in allowing a Bill which only had a majority of eight in the House of Commons on Second Reading, out of which some of the most important provisions have been taken, like the central levy, into which other provisions like amalgamation have been forced apparently against the wish of the Government, which only reached this House after a most tortuous course of considerations which have nothing to do with the merits of the Bill—because this Bill on its merits would never have reached your Lordships' House—is another matter.

The representatives of the democracy of England might well have rejected this measure. Accordingly we can at any rate feel that we have a certain freedom in dealing with this Bill in Committee, of which I hope that we shall make the fullest use. It is a Bill that cannot claim as some Bills can claim, to have behind it the large and influential opinion of the elected representatives of the country in another place. Personally I should be inclined to follow the advice of the noble Marquess. We shall have to see what we can do to improve this Bill. I look upon the question of hours as vital. I believe that we might introduce elasticity into the provisions regarding hours in such a way as to satisfy everybody and, while not making the hours longer, enable the industry to arrange matters in order to avoid some of the difficulties that I am putting forward on the advice of those whom I can only regard as most competent mining engineers and authorities, who speak with the utmost sincerity.

As regards the other Parts of the Bill. I do not attach equal importance to them. Selling pools are already in existence. I have always been an advocate of the coal industry obtaining reasonable prices for its product. There is no reason why the industry should be sweated, any more than any other industry, if it can avoid it. It has too long been proceeding on lines of entire disorganisation, with practically no salesmanship in the modern sense, and handing over its product to factors and merchants and all kinds of other people in the hope that they will some day sell the coal to some consumer. I have known the coal industry for forty years. There are always half a dozen agents round the colliery offices all trying to cut each other down by sixpence. I think that coal prices want stabilising, and I do not think that even the largest consumer could object, or does seriously object, to the coal industry being put in a position to carry on without disturbances, without strikes, and with some hope of being put into a financial position in which it can once more attract capital. Obviously, unless we can attract fresh capital, the coal industry of this country will slowly come to an end. New developments will not take place and new pits will not be sunk.

The Committee presided over by Sir Frederick Lewis, with the exception of two gentlemen, one of whom I think has since very much changed his views, reported in favour of selling pools, and even ventured to suggest some measure of compulsion if 75 per cent. of the owners in an area desired it. In this connection I cannot quite agree with my noble friend who spoke from the Front Opposition Bench. I do not look upon the man who always wants to stop outside any concerted effort as a friend to the consumer or to anybody else. I think that he is just a nuisance to industry, and is very often inclined to create a nuisance-value for himself by endeavouring to get blackmailing terms to which he is not entitled. I do not take the view that he should be treated gently. As a matter of fact, in the last Companies Act, we took measures by which, through application to the Court, you could compel minority interests to agree to amalgamations and surrender their shares on terms sanctioned by the Court. I did not hear that objected to as a revolutionary measure when the Companies Act was considered, and I may add that I think some such provision essential if you wish to carry out the amalgamations which today are necessary for the future organisation and running of businesses in an industrial country like ours. Accordingly, although the machinery may be somewhat creaky, I see no great objection on principle.

The question of amalgamations was discussed at considerable length on the Mining Industry Bill, 1926, and I remember that in Committee in another place Sir Leslie Scott and others joined in putting down an Amendment to strengthen the hands of the Board of Trade in order to see that amalgamations were carried through. That Amendment was withdrawn—I have since looked up the debate—partly on the plea of the then Secretary of State for War, who was in charge of the Bill, that the powers already contained in it were sufficiently strong for the Board of Trade and no Amendment was necessary. I do not think that any powers have been exercised, although a good many amalgamation schemes have taken place. Some 233 pits, I believe, have been amalgamated since 1926. The question whether amalgamations are proceeding as rapidly as can reasonably be expected is one that requires very considerable consideration. I am sure that none of us want to introduce machinery for compulsion if it can be avoided. On the other hand, we cannot be content to stand still through apathy or obstruction. There is always a balance of advantage and disadvantage, and accordingly I would reserve my opinion on that subject. I am well aware of the notion that amalgamations may reduce prices while selling pools will not do so. That is a pious hope to which I would not attach too much importance if I were advocating this Bill before the consumers of coal. Amalgamations, on the whole, have just as good a chance of raising prices as selling pools, but of course they have the opportunity, or at any rate the possibility, of reducing prices.

This is undoubtedly a dear coal Bill. Do not let us have any illusions about that. It is a Bill every clause of which is designed to make coal more expensive Some of us think that, if the coal industry does not pay, if it cannot give decent wages or produce reasonable dividends, the only thing that can happen is that coal must temporarily, at any rate, become dearer. The noble and learned Lord on the Woolsack is, I think, too gloomy about the future position of the industry. He takes rather too static a point of view. He pointed out with great force that which we all unfortunately know—namely, the increasing use of hydro-electric power throughout the world and especially in Southern France and Italy, and the increased use of oil fuel by steamers. These developments have very much diminished the natural increase that we hoped to see in our coal exports.

We are now making some progress with powdered fuel for steamers, and it is possible, to judge from what I have recently heard, that progress in the use of powdered fuel for firing boilers at sea has a chance of once more restoring the balance between that valuable carbon in which this country is so rich and the hydro-carbon in which we are so deficient. At any rate I think we are making substantial progress technically and commercially in the very important development of turning our carbon in this country into such hydro-carbons as petrol and fuel oil. The work that has been done the last year or so in this matter fills one with encouragement, and I am more hopeful than I have been at any other time that this may develop into a very large industry in years to come and may lead to an entirely new method of utilising our coal. If this is so; the question of district quotas may become very important, because it may be desirable to operate in certain districts and to demand millions of tons of coal a year in an area where the coal is specially suitable for that kind of treatment, and this will entirely upset the central quota figures.

There are other directions, too, in which the coal industry has not got such a very bad prospect. For instance, if instead of importing as we do very large quantities of foreign steel, we adopted the method of putting a duty upon steel and producing it here, you would immediately have a very much larger consumption of British coal which at the present time is not being consumed at all. The truth is you have enormous means of consumption which you refuse to make use of, however depressed any industry may be, and the common sense of this country is getting a little tired of that line of thought. I have made these few observations on the Bill as I see it. It is not an easy Bill to understand. The drafting seems a little obscure and the hours clause requires quite a search to see what is really meant. I am sure it must be admitted that if it were not for that inconspicuous clause, hidden away like a pill in a large amount of jam, it would not be necessary to discuss the Bill at any great length this afternoon.

THE MARQUESS OF LINLITHGOW

My Lords, I listened with attention and much admiration to the speech in which the Lord Chancellor moved the Second Reading of the Bill. I admired in particular the remarkable powers of extempore utterance which he displayed, but even his formidable equipment has not succeeded in changing my view that this Bill is in itself as bad a measure as has been before Parliament for many a long day. It contains proposals which are contrary to sound economic principles and the assumptions upon which it has been drafted, some of which I thought I detected in the utterance of the noble and learned Lord, are refuted by all human experience, run contrary to the teachings of every recognised authority upon political economy, alive or dead, and will not bear the test of impartial examination in the light of ordinary common sense. If this Bill is put upon the Statute Book, it will hurt the coal trade of the country, both for home and for export, from the largest shareholder to the youngest pit boy, for it is an attack upon wages as well as upon profits. It is one more instance which shows that lavish as are the gifts which the present Government showers upon a man when it has lost him his job, it intends to do nothing to better the lot of the man who remains in work. By raising the price of coal the Bill will hit the home consumer, commercial and domestic. It will hurt the competitive power in the world's markets of every industry from Land's End to John o' Groats. Incidentally, by exposing the fallacious nature of some of the economic theories advocated by supporters of the present Government, it may well result in the return of a substantially smaller number of Socialists to the next House of Commons.

Why then, if that is to be so, has the Bill been brought forward by the Government? Only because, as has been said before this afternoon, in contesting the last General Election Socialist candidates contesting mining constituencies as well as important members of the present Government in their own constituencies, for the sake of catching votes, promised to do something which they knew they could not do when they made the promise and which they have since admitted they cannot do. They promised to give the miners a 7-hour day, and are now seeking to palm off upon them a 7½-hour day with a reduction in earnings. The Bill is neither more nor less than a smoke screen of words behind which is sought to conceal the fact that under a 7½-hour day earnings must drop. The construction of the Bill is clever and even plausible. The false postulates upon which it rests are well concealed at first sight, but when you look into the Bill a little deeper it becomes clear beyond dispute that the whole fabric of its provisions is poised upon foundations that are absolutely rotten.

If this be so, as was well said by the noble Lord who has just sat down, why should not this House reject the measure on Second Reading Would the Prime Minister seek a Dissolution in that event and go to the country on the policy of clearer coal to the consumer and lower wages to the miner? If I thought so, I would myself have ventured without hesitation to move to reject the Bill on Second Reading. Nor, in such circumstances, should I be in the slightest degree deterred by threats against the life of your Lordships' House which I know would emerge from the Benches opposite, or by the passionate appeal to the instincts of hereditary legislators which I should expect to hear from the Benches above the Gangway. I think there are many reasons for supposing that it will fall to this House to take the initial step which will one day lead to the fall of the Government. When that time comes I do not believe that this House will hesitate for a moment to do its duty. Is it too much to ask that when that moment arrives we may be spared the threats to which I have referred?

I yield to no man in my respect for this House and for its great past and for the services which it renders to-day. Nor do I hold that there is any Chamber in any Legislature in the world better qualified by the calibre of its membership both to initiate and to amend legislative measures. But of what service is this House to the community if we are here merely to ease the susceptibilities of the vast majority of our countrymen who still adhere to the principle of two-chamber government, while measure after measure receives the imprint of our authority but escapes the corrective function of our judgment; and if there pass on to the Statute Book Act after Act "by and with our advice, consent, and authority," which this House as a whole regards as inimical to the true interests of this Realm? In those circumstances this House would become not a safe- guard of the Constitution but a sham, a lie, and a danger. The personal aspect will be deemed by your Lordships the lesser, but its reality must not escape us. Where is the privilege in sitting and voting in such a House? Under conditions such as I have described, what would this House become if it were not a place of humiliation for your Lordships and, in prospect, of lifelong political imprisonment for your sons?

Therefore let us hear no more of threats designed to persuade this House to vote against its opinion and conscience. The friends of the noble Lords opposite are not so anxious to destroy the House of Lords as they sometimes would have us believe. The corpse of this House would hang heavy on the hand that strikes it down, and it would tax to the full the ingenuity of noble Lords opposite and their friends to devise a substitute which, by its constitution or its powers, would serve half as well the rôle for which we are now to be cast—therôle of stalking horse to a half-baked Socialism. It may be that there are advantages in not throwing out this Bill. Mr. Bagehot, among others, noticed how important was the educative function of Parliament. If I may say so without disrespect, the speeches of members of His Majesty's present Government do not attract me for their educative virtue. But this Bill is going to educate the public both about elementary economics and about the true value of most of the theories entertained by the Socialist Party. To that extent I think its passage will do good.

What is the central point in the economic theory upon which this Bill is founded? It is that you can raise the wage costs of an industry above their natural or economic level, and recoup that industry for the increase by raising in turn the primary selling price in your own country, when the commodity produced is one of general consumption, and one produced at many points throughout the world, which meets a world-wide competition in a world-wide market, and which enjoys a virtual monopoly of its home market; that you can do this—so the theory runs—by limiting the output of your own pits, while the foreign pits remain uncontrolled; and that, without inflicting commercial hurt upon your own country, you can carry out your policy by diverting some part of the artificial increase in price obtained in your home market towards subsidising your export trade, in order to enable your coal to compete for foreign trade, though produced at a cost above the price ruling in the world market. What does that mean? Simply this, that in order to offset higher wage costs you will tax every user of coal in Great Britain. You are going to put a dead weight on the competitive power in world markets of every exporting industry in this country. You are going further to weaken your flagging home market for all commodities by reducing the general purchasing power of your people. And you are going to ensure to our foreign competitors throughout the world's markets the advantage over their British rivals of coal relatively cheaper than that at present available to them.

Why not run straight, and finance shorter hours for miners by putting another shilling on the Income Tax? Taxation helps trade, the Paymaster-General told the House the other day. I am sorry he is not in his place. I do not know whether other noble Lords opposite take that view; I am quite prepared to transfer the label to them if they desire it. But the Paymaster-General says it does. Were he alone in his view I should have suspected that his judgment had been set a little awry by the fact that his function, judging from its name, is disbursement without having to worry where the money comes from. But he is able to cite in support of this strange theory the evidence of two eminent authorities, Mr. Pethick-Lawrence and the Chancellor of the Exchequer. No one denies that dearer coal will hamper industry, but why this should be when a tax on its reserves and having to pay more for new capital gives industry a lift in the world, is a matter which perhaps we had better leave to those who, though their theories are many, have, in fact, never had in their hands the solvent conduct of so much as a fried fish shop.

The President of the Board of Trade in another place and the noble and learned Lord on the Woolsack to-day have made plain that in formulating the provisions of this Bill they have felt justified in regarding the world market for coal as static. The noble Marquess. Lord Londonderry, and the noble Lord, Lord Melchett, attached great importance to this point. I entirely agree with those two speakers. It easy to show that, while the trade is relatively static, there are indications that it is, in fact, a growing trade. There were 536,000,000 metric tons of coal consumed in Europe in 1925; in 1926, a year of unfortunate memories, the quantity was 485,000,000 metric tons: in 1927, it was 588,000,000; in 1928, 574,000,000; while, basing the calculation on the first three quarters of last year, European consumption had risen to 607,000,000 metric tons in 1929. Those increases no doubt are comparatively small, but they do show that coal, as regards a part of its market, is fighting inch by inch against other forms of energy. Of course, the world consumption of coal is rising, and in this connection I hope your Lordships will notice that Italy, Switzerland and Scandinavia—countries in which there has recently been a great expansion in hydro-electric energy—the consumption of coal has risen substantially since the War. So it is plain beyond dispute that, in those countries at any rate, coal is having a running fight with another prime form of energy—namely, water power; and it is reasonable to presume that the fight of coal for markets vis-à-vis oil is just as severe and the result no doubt just as uncertain.

The position is this then, that if, by the clauses of this Bill, you raise even fractionally the cost of coal in Europe, you will hurt the coal trade by the consequent loss of markets to other forms of energy; while, if you limit or impair to any sensible extent the competitive power of British coal without affecting European prices. You will at best deny to British pits any share in such expansion of demand as may take place. There were signs in the discussion upon this Bill in another place that among the supporters of this measure are some who hoped that one effect of this Bill may be the raising of the price of coal in European markets as a whole. From his speech to-day I rather think I am entitled to number the noble and learned Lord on the Woolsack among those who harbour that hope. If I thought that the price of coal in Europe could be raised, as one interested in coal mining I should not be sorry. It may be that producers all over Europe would not be averse from helping themselves and us by encouraging such a rise in price. But, although I do not in the least wish to exaggerate or overstress the point, I venture to suggest that potential competition from the United States of America is a far more important matter than some people suppose. Thus, in January, 1929, 19,000 tons of coal were imported into Italy from the United States; in February, 6,000 tons; in March, 17,000 tons; in April, 6,000 tons; in May, 17,000 tons and—here is the critical figure—in June, when we raised our price, 69,000 tons. That is not a substantial market at the moment, but it shows that coal from the United States can be carried across the Atlantic and, at any rate as regards certain of our markets in Europe, can compete with us with success.

Again, take the question of our export market in coal to the Argentine and to Brazil. At some seasons that trade rises almost to half a million tons a month, and there we are meeting the most keen and active competition from the United States. If the effect of this Bill is to reduce by even a fractional amount the competitive power of British coal in world markets it may well be that we shall lose an important part of that South American trade. I find difficulty in accounting for the fact that the right hon. gentleman the President of the Board of Trade and the noble and learned Lord have failed to grasp the essentially dynamic nature of the world demand for coal. With great respect, I am bound to say that I can only regard it as one more case of the manner in which adherence to a curious superstition, which I have tried hard understand but so far have failed, called Socialism, can blunt the acumen of a mind otherwise beyond reproach, indeed alert beyond the ordinary and endowed with many high qualities.

If this Bill is a studied attempt to throw dust in the eyes of the British public I admire its cleverness. If it is designed to help this country in the hour of her commercial distress, I am bound without offence to say that I think it extremely silly. I have reason to suppose that I voice the unanimous opinion of the coal owners in Scotland when I ask your Lordship's to accept the view that some of the worst effects of this Bill as it came to this House will be mitigated in sonic degree if its provisions are so amended as to strike out that part which introduces for the first time in this country the principle of the compulsory amalgamation of one industrial concern with another. I trust also that this House will accept and insist upon an Amendment making a ninety hours spread-over per fortnight a permissive alternative to a 7½-hour working day, and I shall venture to offer one or two observations on those points during the Committee stage of the Bill.

I can understand the Socialist Party initiating this measure because, in spite of the millions sterling spent on public education, they as a Party live politically, in my opinion, by bamboozling the British working man about the elementary truths of political economy. But what about the Party of Peace, Retrenchment and Reform, the Party of the pure milk of Cobdenism, the Party even of harsh and rigid adherence to a certain fiscal policy? If the Liberal Party persists in keeping this Government in office they will give to our industries the peace of death, while their leaders' contribution to retrenchment is loudly to cheer a Socialist Government when it helps trade by raising the Income Tax to 4s. 6d. ten years after the conclusion of a victorious war.

What is the Liberal Party doing in this company? It is all very puzzling, but I think I can enlighten your Lordships. I am perfectly sure that noble Lords opposite can do it far better than I, but I will try to do it—they are not free agents. Men must live, but without advertisement politicians die. There is no demand for the old game of reviling a landed aristocracy, now shorn of its privileges and, alas, of most of its cash. It is not like the good old days. Nor can the Liberal Party afford to choose their opportunities too meticulously. After all, the jackal lacks the strength to kill and he must eat what others choose to kill for him. Be it noted that the tiger is sometimes not above taking the advice of his humble follower the jackal. I venture to predict that there will be a poor return for the heavy cost of this advertisement. Mr. Lloyd George does not attract the working classes. His appeal is partly to those who mistake him for the late Mr. Gladstone, and part to those who envy other people's; means but lack the courage to join the Labour Party. (I expected a cheer for that from the Benches opposite but I did not get it.) His message is to the depleted ranks of respectable Radicalism. His, beyond doubt, is an epistle to the genteel. But as to this Bill, I am not without hope that its course through your Lordships' House may see some change of heart on the part of the Liberal Party. It is hardly necessary for me to remind your Lordships that the Naval Treaty, once in jeopardy, is now as safe as we in this country can really make it.

The Chancellor of the Exchequer pats himself on the back because Government stocks stand high. I believe he is teasing us. He knows as well as we all know that the true reason for this is that trade is so bad and enterprise so dead that money is forced to seek a meagre return from the only safe investment that is open to it. Where is the money that used to flow into the coal trade for the refreshing of existing concerns and the setting up of new enterprises? In gilt-edged stock, what is left of it. Where is the capital which was accustomed to support and extend the heavy industries? Half asleep in Government stock, or watching for a chance to go to America where men "put their backs" into their job, knowing that their Government will support them, where workmen understand that consumers and not capitalists pay their wages, and where the Paymaster-General, the Chancellor of the Exchequer and Mr. Pethick-Lawrence do not think that taxation helps trade or grumble "guinea-pig!" at a gentleman who has the brains and the character to do a job of work.

The Government have accepted the principle of rationalisation. I think they expect a little too much of it, because they show signs in this Bill of supposing that by merging any three bankrupt concerns you can produce a solvent whole. But—and I would ask your Lordships' attention to this—what is the position to-day when the case for amalgamation is good, let us say, in the steel trade? He is an optimist who supposes that you will find the cash to meet the heavy initial cost from shareholders old and new, particularly in a country where it is seriously held by high officers of State that taxation helps trade. Loan capital, then, has to be resorted to. A scheme is worked out upon the basis of existing costs. The plan will take, let us say, two or three years to mature. Before you can say "Jack Robinson" this Government, unless they are checked, will produce a scheme designed to purchase another million votes and disguised as a social service. Your figures of costs are falsified and the merger is doomed to bankruptcy. We cannot go on in this way or we shall starve. Taxation of the rich will not keep us afloat for long. It is only old-fashioned Radicals like the Chancellor of the Exchequer, Mr. Snowden, who beguile themselves with notions such as that. The younger men of the Labour Party are learning the truth more rapidly than many suppose, and so is the working man. I say to noble Lords opposite that, wriggle and twist, shuffle and dodge as you will, the force of economic law will catch you yet, and that at no distant date.

What remedies lie to hand?—and this matter is at the root of the difficulties of the coal trade and is germane to the discussion of this Bill. If you would learn the ultimate cause of our present afflictions, turn to the fall in the value of raw materials, of wholesale commodity values throughout the whole world. The fact of that fall is by far the most important economic fact that has occurred since the signing of the Peace. We are actually approaching the point in wholesale values at which we stood in 1913, and which appertained as long ago as about 1870. So far as raw materials go the abnormal levels of the War period have passed. For the first time since Armageddon, natural economic law has been able to re-assert itself so far as wholesale commodity values go. It is my opinion at any rate that, broadly speaking, the world has before it a prolonged period of low commodity values at what are sometimes termed approximately natural levels.

Now turn to retail prices. The spread between wholesale and retail prices is widening constantly at the expense of the retail purchaser. I have the figures, but I do not trouble your Lordships with them, but those of your Lordships who take an interest in this matter know that the spread between wholesale and retail prices is expanding at a phenomenal rate; in fact it is three or four times as wide as it was in 1924. Why is this? Is it the exhorbitant profits of middlemen? I have spent some considerable part of my life exploring middlemen's and distributors' margins, and I think it is indisputably true that capital engaged in the distributing business has profited largely by the same post War circumstances which have dealt so deadly a blow at producers. But that is not by any means the end of the story The fact is that the price of every finished or part-finished article, if you buy over the counter, is replete with labour costs at inflated post-War rates. Look at the facts. Examine, for instance, railwaymen's wages and conditions—because you must take the two together—and the wages and conditions of labour engaged in distribution—the "sheltered trades" we call them. They are fixed largely on a cost of living basis, and those who earn them are able for that reason, and because of the power of their labour organisations, to retain standards of purchasing power and hours and conditions of work attained during the abnormal conditions of the War and the post-War period.

There is a school, not at all a Socialist school, which maintains that this is all to the good, since, in effect, what happens is that Labour benefits at the expense of the rentier and the investor in industry. That is so far true, but it is a narrow and limited view. It takes no account of the first effect of this movement, which is to starve the primary producer, capital, and labour; nor of the secondary result, and this is now beginning to be felt, and why it has not been felt long ago no one who takes the slightest interest in these matters but wonders, and fails altogether, so far as I know, to offer an explanation. But the next phase, which has been so long delayed, is now coming. The secondary result is to cause a sagging in general retail demand by reason of the reduced purchasing power of the public, and in particular, of all primary producers, with a consequent falling away in the general business of the world, including, of course, that of the distributor himself. It goes without saying that all taxation—with all respect to those on the Front Bench opposite who differ—Imperial and local, and all direct contributions from industry to social services do but add to the load and expedite the final collapse.

Coal is a primary product and so is agricultural produce, and look at both those industries, coal and agriculture. I venture to warn those fortunate ones in the distributing and transportation trades, whether they represent capital or labour, that the forces of natural law will ultimately search them out, sheltered though their occupations may appear to be. No one should blame them. No fault attaches to them. The search for a scapegoat is useless. What is wanted is that those who lead and who know the facts should speak the truth, and go on speaking the truth. Labour charges and profits in the sheltered trades must come down. There is no other way by which the general level of prosperity in this country can be restored, and the sooner this is realised the better for all. It is no use being a vigorous limb on a rotting trunk. The poison is certain to spread, and death is only postponed for a little while.

The circumstances of post-War trade and commerce require that we waste no time. In the heyday of our prosperity our population rose from 9,000,000 in 1801 to about 42,000,000 in 1921, taking Ireland in to make the figures comparable. During those years we got a long start in industry, and we taught the rest of the world to look to us for manufactured articles of trade. But war in four short years has taught other peoples that they can do for themselves many things that we used to do fur them. Competition is fierce and ruthless. The signs are far from reassuring, but we must be of good heart. Our people in their staunchness, in their common sense, and in their power of work are without peers in all the world. It is a shame to blind their eyes and to pander to their natural and human weaknesses. It is a shame to tell them that taxation helps trade. It is a crime to starve them because a Chancellor of the Exchequer has forgotten nothing and learned nothing since 1913. It is wicked to teach them that nothing stands between them and new and yet more costly social services except the cupidity of those who have had the good fortune to inherit wealth, or possess the brains and character to earn it for themselves.

Rather should we encourage those who can to save and to invest; and we must distinguish plainly between those who claim for capital at labour's expense more than its fair share of prosperity, and those who, by self-denial, thrift, sound judgment and driving force, have been able to accumulate in their own hands much wealth. The first should be put down, the second deserves every encouragement. In accumulating wealth and putting it to good use, they perform a function vital to the community and one which no Government in any country at any time, so far as I am aware, has ever yet achieved, because the moment a Government has a little money, there are a good many people who know where the money can best be spent, and away it goes. I see no signs, looking about me with an impartial eye, in the whole world that any Government is likely now, or in the future, to be in a position to accumulate itself and invest wealth in industry. The pressure to spend is too great. Tell the people rather the ancient, simple truths by which their fathers made this country great and themselves prosperous. Tell them that Governments can do little to help them. Tell them that salvation lies in their own strong hearts, in their courage, in their determination, in their skill, and in their enterprise, and bring again conditions in which successful venturings reap the rich reward which is their due. If you can see your way to do so spare us, if you can, another Bill such as this before the House.

LORD ABERCONWAY

My Lords, the Second Reading of this Bill has been moved by the noble and learned Lord on the Woolsack in a speech of admirable force and clearness, a speech based upon life-long experience of this most complicated and difficult question. The noble and learned Lord during the greater part of his distinguished career has been most intimately associated with the coal trade and nothing I think could have been better than the broad ground on which he based his advocacy of this Bill and the clearness with which lie stated the necessity for its introduction. I regret that among the interesting speeches we have listened to there has been none that has dealt with the situation as a whole, none that has taken a broad view of what is wanted. While a great many of the points brought forward will be interesting in Committee, they have very little bearing on the fortunes of the Second Reading of the Bill.

Look for a moment at the facts of the case. Here is a measure brought in upon lines which have been laid down and successfully acted upon by collieries representing practically two-thirds of the output of this country, entirely supported by the miners, as we understand from their agencies, a Bill which those who are most intimately connected with the coal trade feel is essential if our trade is not to go to ruin. We were faced by the fact two years ago that our exports had fallen 28,000,000 tons in a year. We were faced by the fact that Germany and Westphalia, our great opponents, had increased their output by nearly double that amount and that those two centres were competing with our coal trade in what are called the neutral markets of the world. Our foreign trade, which has always been the basis of the success of our coal trade, does not consist of exports to producing countries like Germany or Poland. It consists of exporting coal to South America, to the Mediterranean, to the Far East, to the Baltic, now even to Australia, and but for the competition of Germany and Poland we should still hold the balance of that trade at practically our own prices.

But Germany and Poland, working under highly organised conditions, conditions such as this Bill would give us the advantage of, feel that unless the British coal owner has some kind of organisation which will enable them to discuss questions of prices with the Englishman, to discuss questions of dividing the neutral markets of the world between ourselves, Germany and Poland, there is no use attempting to negotiate on the mere question of price. The result is that the Poles and the Germans are undercutting us in all these neutral markets. Yet they come over here, they hold out their hands, they say: "Cannot you organise some body that can speak for the whole of the British coal trade and deal with us on rational grounds in respect of our common interests as exporters of coal?" That, your Lordships will see, we have never been able to do. We have gone on the principle of pure individualism, individualism of the crudest character. We have sat still, adopting the policy of laissez faire, doing nothing, hoping for the best, believing all will come right in the end, yet year after year since the War our coal trade has been slipping away from us. Only last year we exported coal worth, I suppose, about £50,000,000. That meant wages for miners, for railwaymen, for dockers and for people connected with ancillary trades, and all that money was paid into the fist of this country by the foreigner.

We do not want to lose that trade. We want to keep it, and unless we do so pull ourselves together that we can hold that trade, the value of the home trade will take a very much smaller position in our financial outlook. The great necessity, as has been pointed out by previous speakers, is, of course, to reduce the cost of working and at the same time to get a reasonable profit on the coal sold. It is no use disguising the fact that we coal owners want increased prices—not a large increase, a moderate increase, an increase of one shilling or two shillings a ton would be all that we require to put ourselves in a permanently better position than we occupy to-day.

Some of the leading coal owners in Yorkshire two years ago, seeing the situation, met together and we established what is called the five-counties scheme. Yorkshire and South Wales together produce about half the coal tonnage of this country, and we adopted the quota system. We came together and we arranged that each pit should be looked at and valued and should have a certain quota of output allotted to it, and no more. We settled nothing about minimum price. That was put forward, but nothing was done. The fact that the output was rationally reduced and that there was a feeling of cohesion created among the coal owners improved the state of things enormously. Pits that were losing money began to make money. I could quote cases of surprising profit made since that five-counties scheme was inaugurated. But the difficulty was that there was a margin of about 15 per cent. in Yorkshire, Derbyshire, Nottinghamshire, Warwickshire and Leicestershire remaining outside, and the Continental buyers felt that unless there was stability in this system it was risking too much to buy coal on a forward basis. The result was that we felt our strength was being frittered away.

I can assure noble Lords that nothing is more welcome to the great mass of the coal owners in this country than the Bill which the present Government have introduced. In its main features it is drafted entirely on the lines of the five-counties scheme. It is supported formally by them, as noble Lords will see from the statement which appears in The Times this morning, which I consider one of the most powerful arguments to be used in favour of this measure. Noble Lords will recollect that it is not merely the profit of the coal owner that is in question to-day, but the repayment of money that has been lent to the trade by the debenture holders, the repayment of large sums most generously provided by the great joint stock banks to support an industry which was in a very risky and dangerous position. It is not merely that we want to make legitimate profits on coal, and to put these banks in the right position, but we want to improve and develop our collieries. We have no money with which to do it. Since the great strike we have lost the whole of our working capital. We are £10,000,000 short of capital on the basis of the arrangement made by the miners and coal owners in 1926 at the end of the strike.

LORD GAINFORD

In Yorkshire alone.

LORD ABERCONWAY

As my noble friend reminds me, that is in Yorkshire alone. I suppose that money will never be recovered. We must remember that a great change is coming in all mechanical operations. Steam is giving place to electricity. There is not a first-class coal mine that could not spend £25,000 or £50,000 to-day in improving its mechanical operations. New screens, steel arches underground, electrical appliances, underground haulage, pumps, fans, everything which goes to equip a first-class pit, has to be maintained, improved and developed, and we have no money for doing it.

People say that if we increase the price of coal we shall injure other trades. What trades? The collieries are the best customers of the engineering trade of this country. They give an enormous number of orders to every engineering works for all the articles that I have just mentioned. They provide wages in districts that are impoverished for want of orders, they improve the railway returns, they help shipping and, in that way, I consider that a reasonable increase in the price of coal to give a fair profit per ton would not only do no harm to the consumer of coal but would indirectly benefit him because the country as a whole would gain enormously by it. As a matter of fact, in Yorkshire we have, by this scheme, reduced colliery costs by nearly 2s. per ton. We have pulled ourselves together, got rid of superfluous charges, adopted better methods of marketing, and I think I am right in saying that the whole of this has resulted in a charge of only 6d. a ton more to the consumer, which is a very moderate increase. Consider the great profits made in the coal industry, not by the collieries but by the middle men, by those great and very prosperous companies—against whom I have nothing to say—whose names are familiar to all of us. Eight or nine of these are absorbing all the distributing trade. We cannot do without them; there must be distributors, and I am glad to see that they are prospering; but when you talk, as Mr. Lloyd George talked, of a hearth tax of 3d. a ton which the poor man has to pay because of this levy to help exports, the charge is ridiculous. That 3d. is lost altogether in the difference between 20s. per ton at the pit and 45s. in London. It does not count at all, and in any case it is more than covered by the Berating clauses of the Act of the last Government.

I do not want to stand here as a man who is greedy or working for his own advantage, but I do represent, not only some of the largest colliery concerns in every part of the country, but also in a sense hundreds of thousands of capital invested by debenture holders, who naturally ask themselves whether they are going to get interest on their capital. I feel that I represent the view of hundreds of thousands of shareholders who put their money at par into these concerns and see the value of their shares down to, perhaps, 5s. instead of £1, with very little prospect of anything more coming out. The worst of it is that we cannot raise any more capital. As Lord Melchett said, you cannot raise money to-day on a colliery. Debentures are looked at askance and you cannot issue shares except at par. When your shares are at 5s. it is useless to offer them to the public at £1. This is a very wide financial question, which goes to the root of the welfare of the saving and investing classes of this country. If your Lord- ships send this Bill down to the House of Commons, as I trust you will, accepted in all its main principles, with such detailed Amendments as I quite agree should be made, you will have taken part in one of the most necessary and statesmanlike pieces of legislation in the interests of the trade of this country that has ever been passed through Parliament.

EARL BEAUCHAMP

My Lords, I should not like to begin my remarks this evening, few though they will be, without referring to the most eloquent speech with which this debate was opened by the Lord Chancellor. I am sure that there is no member of your Lordships' House who heard it who will not always think of it as one of the most eloquent speeches ever heard in this House of Parliament. I venture to say, with a recollection that goes back far beyond that of anybody here to-night—indeed, so far back as the Home Rule debates of 1893—that it is very seldom in that long course of time that I have heard a speech that ranks so worthily with the great orations of the past as that which we have heard from the noble and learned Lord upon the Woolsack.

I wish, indeed, that the debate could have been maintained at so high a level. We have just heard a very temperate and well-informed speech from the noble Lord behind me, but it was preceded by a speech from the noble Marquess now sitting beside me to which I am afraid I cannot apply either of those epithets. It contained a good deal of full-blooded abuse of the Liberal Party. I do not quite know how it came in, but it really seemed to me that it would have been more suitably delivered at a meeting of Primrose League ladies in the very backwoods of the country. They, no doubt, would have appreciated it a great deal more than most members of your Lordships' House, on whichever side of the House they may be sitting. There was a great deal of abuse of us, but I did not very much mind it because I could not help feeling that there was also a great deal of full-blooded abuse of the noble Marquess his own Leader, because the noble Marquess, Lord Linlithgow, was telling us that this Bill was a sham, a lie and a deception, and yet he is quite prepared to follow the noble Marquess in not offering any opposition to it, in the Lobby.

THE MARQUESS OF LINLITHGOW

I dislike to interrupt the noble Earl, but he is quite wrong in suggesting that I said that this Bill was a sham and a lie.

EARL BEAUCHAMP

I am very sorry. I took down the words at the time. Something was a sham, a lie and a deception. I am afraid I made a mistake.

THE MARQUESS OF LINLITHGOW

I said that this House was a sham and a lie if we agreed to pass Bill after Bill which we thought inimical to the interests of the country.

EARL BEAUCHAMP

I am very much obliged to the noble Marquess, and I am sorry to have misunderstood him, but there was so much abuse in the course of his speech that he must forgive me if I applied the wrong abuse to the wrong thing. Perhaps he will allow me to say that I hope he will attend this House more often in the future, listen to our debates—he could not do better than take a course of training from the speeches made by the noble Marquess, his own Leader—and then once more take part in our discussions in this House.

To turn to the Bill itself and what has been said about it, surely we are taking part in the Second Reading debate in something of the spirit of a mock fight. We all know that the real discussion is going to take place in Committee. Here we find ourselves in a difficulty which is not at all unusual in the experience of politicians who are dealing with measures of a long and complicated character. This, of course, is not the Bill of the Liberal Party. There is a good deal in it that we like, but we do not like it all. We do not pretend to like every part of it as much as every other part. If it had been a Bill introduced by us, we should have approached the matter from different angles, from a different side. If I may venture to say so, I think His Majesty's Government have rather approached this question from the point of view of the miners, while the Liberal Party would have approached it more from the point of the consumers of coal in this country.

At any rate, this Bill is a better Bill than would, I think, have been introduced by a Conservative Government. It certainly abolishes some injustices and some absurdities. The abolition of eight hours is a very welcome provision in this Bill—one to which I imagine that no objection will be made when we come into Committee. It is important indeed that we should abolish this eight hours provision because, I believe, it has poisoned the relationships of the whole industry since it was enacted by the late Government. The miners feel, rightly or wrongly, that it was an act of vengeance for the General Strike, and men with a grievance will never work hard. Therefore, I welcome the abolition of the eight hours as being likely to restore good feeling in the industry, which is one of the important things in so large and important an industry as the coal mines. At a moment when the industry is suffering from over-production, to increase the hours of labour must be a futile way of trying to remedy the position. It is like giving a dose of invalid port to a man who has been suffering from delirium tremens, and obviously in this case would do nothing to improve the position. Now that the 8-hour day is going there will be a new spirit of cooperation in the industry.

The Bill, of course, or different parts of the Bill, have been supported by different parts of the House. I would say, too, that it would be a very serious responsibility upon us in this House if, after protracted negotiations and long consideration in another place, we were to throw out the Bill to-day. As to the point of view of the Liberal Party, I would venture to remind your Lordships that on the Second Reading in another place they laid down four Amendments which they wished to see inserted. They were accepted by the Government, not before the Second Reading but in the course of Committee. That was why the Liberal Party voted against the Bill on the Second Reading. First of all there was compulsory amalgamation. Then the second Amendment was that the amalgamation should take place at present value and not at an artificial value created by the Bill. Then there was the quota, which we thought likely to raise prices. Fourthly, there was effective control of prices—that an arbitral tribunal should be set up to review prices, and that owners should be compelled to accept those revisions.

I admit that there is one special provision which I do not much like, having to do with the artificial restriction of output. It is too much like a vicious form of protection, to my mind. However, it is restricted by time and we cannot pick and choose with regard to Government Bills introduced in this House. We have to weigh the good against the bad, and for my own part I shall be anxious to see this Bill emerge from Committee in the same state in which it reached your Lordships' House. We are glad to know that there will be no Division upon the Second Reading, and I would venture to point out a very remarkable article which appeared in The Times, which is not usually a supporter of the Labour Government, in which they evidently wished to express the hope that the Bill would emerge in practically the same condition as fit is at the present time. That is a remarkable testimony, I think, to the fact that upon the whole the Bill is a well-balanced piece of legislation. With these few remarks, unnecessary though it is to commend the Second Reading I venture to hope that the Bill will finally emerge in the same condition as that in which it is found to-day.

THE UNDER-SECRETARY OF STATE FOR INDIA (EARL RUSSELL)

My Lords, I beg to move that the debate be now adjourned.

Moved, That the debate be now adjourned.—(Earl Russell.)

On Question, Motion agreed to, and debate adjourned accordingly till tomorrow.