Lords Sitting of 13 May 1930

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
BOARD OF EDUCATION SCHEME (DEVON,CREDITON EXHIBITION FOUNDATION) CONFIRMATION BILL.
Brought from the Commons; read 1a; to be printed, and referred to the Examiners.
MINISTRY OF HEALTH PROVISIONAL ORDERS (FYLDE WATER BOARD, OLDHAM ANT ROCHDALE) BILL.
Brought from the Commons: read 1a; to be printed, and referred to the Examiners.
LONDON MIDLAND AND SCOTTISH RAILWAY (No.1) BILL.
Read 2a.
LONDON MIDLAND AND SCOTTISH RAILWAY (No.2) BILL.
Read 2a.
WEST HAM CORPORATION BILL. [H.L.]
Read 2a.
DERBY CORPORATION BILL.
Read 3a, with the Amendments: Further Amendments made: Bill passed, and returned to the Commons.
MIDDLESEX COUNTY COUNCIL BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
WALSALL CORPORATION BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
WEST BROMWICH CORPORATION BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
WEDNESBURY CORPORATION BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.

BUSINESS OF THE HOUSE.
THE MARQUESS OF SALISBURY: My Lords, perhaps it would be for the convenience of your Lordships if the noble and learned Lord the Leader of the House would indicate what he proposes to do with reference to the sitting of the House this evening and also to-morrow.
THE LORD PRESIDENT OF THE COUNCIL (LORD PARMOOR): My Lords, I propose, if it is convenient to the rest of the House—we should, of course, have regard to any suggestions the noble Marquess might make—that we should adjourn this evening from about a quarter to eight until nine o'clock. Then at nine o'clock we should resume and go on to an appropriate hour, which will depend upon how much progress is made. I think it would be better to leave any suggestion with regard to to-morrow's sitting until we see how far we have got on with the business to-night. Our desire is to have a full discussion with the maximum of convenience, if I may put it in that way. I am glad to say that the noble Lord, Lord Banbury of Southam, has intimated to me that he will defer the Question which he has put on the Paper for to-morrow, in order to meet the general convenience of the House, so that we shall have to-morrow quite free.
THE MARQUESS OF SALISBURY: The noble Lord has behaved exactly as one would expect him to behave, but I should like to ask the noble and learned Lord, if it should happen that the Committee stage is not finished to-morrow, what course he would take in those circumstances?
LORD PARMOOR: I propose that we should go straight on until we finish the Committee stage. I think I intimated that the other day. If the Committee stage is not finished to-morrow we shall continue on Thursday.

COAL MINES BILL.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DONOUGHMORE in the Chair.]
Clause 1:
Schemes regulating production, supply and sale of coal.
1.—(1) There shall be a scheme (hereafter in this Act referred to as "the central scheme") regulating the production, supply and sale of coal by owners of coal mines situated in Great Britain, which shall, subject to the provisions of the scheme, be administered by a body referred to in this Act as the "Central Council"; and, subject to the provisions of this Act, there shall be for every district a scheme (hereafter in this Act referred to as a "district scheme") regulating the production, supply and sale of coal by owners of coal mines situated in the district, which shall, subject to the provisions of the scheme, be administered by a body referred to in this Act as an "executive board."
(2) No scheme shall have effect under this Act unless it has been approved or made by the Board of Trade.
(3) If before the expiration of the period of four weeks from the passing of this Act or such further period as the Board of Trade may in any case allow, the central scheme or a district scheme for any district, is submitted to the Board by any voluntary association or other persons appearing to the Board to be representative of a majority of the owners of coal mines situated in Great Britain or in the district as the case may be, the Board may, if they are satisfied that the scheme complies with the requirements of this Act, approve the scheme with or without modifications, and in default of such a central or district scheme being so submitted and approved as aforesaid, the Board shall themselves make the scheme.
(4) For the purposes of the last foregoing subsection, the owners of coal mines which, during the period of six months ending on the thirty-first day of December, nineteen hundred and twenty-nine, produced more than half the output of Great Britain or of any district, shall, respectively, be deemed to be a majority of the owners of coal mines situated in Great Britain or in the district:
Provided that, if it appears to the Board of Trade that during the said period of six months the output of a substantial number of coal mines in any district was subject to regulation under any arrangements made by a voluntary association or otherwise, the Board may treat any scheme submitted to
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them for that district as if the latest period of six months during which the output of those coal mines was not so regulated had been the period mentioned in the foregoing provisions of this subsection.
(5) Any scheme may be amended with the approval of the Board of Trade, in manner provided by the scheme, and a new scheme to have effect in substitution for any scheme theretofore in force may at any time be submitted to the Board of Trade by the Central Council, and, in the case of a new scheme for any district, by the executive board for any district affected thereby, and any scheme so submitted shall, if approved by the Board, have effect accordingly.
(6) Every scheme shall come into force on such date as the Board of Trade may appoint, being (except where a scheme is made by the Board themselves or is to take effect in substitution for a previous scheme) a date not less than one month nor more than three months after the passing of this Act, and the Board may appoint different dates for different schemes, and any scheme for the time being in force shall have effect as if it were enacted in this Act.
(7) The Board of Trade shall, immediately after making or approving any scheme or any amendment thereof, publish the scheme or amendment, as the case may he, in the London Gazette and for the purpose of the Documentary Evidence Acts, 1868 to 1805, any such scheme or amendment shall be deemed to be an order of the Board.
LORD AIELCHETT LORD AIELCHETT moved, after subsection (1), to insert as a new subsection:—
"() Every scheme and every amendment to a scheme under this Act shall be published in the London Gazette and within twenty-eight days of such publications shall be considered and reported upon to the Board of Trade by the appropriate committee of investigation hereinafter referred to."
The noble Lord said: This Amendment is one which I have put down at the request of the Federation of British Industries who attach very great importance to it. Their desire is that all these schemes should have as much publicity as possible and that there should be every opportunity for those interested to make representations to the Board of Trade in regard to them. When one considers the importance of these schemes, which are going to regulate the production, sale and supply of coal in all the collieries in Great Britain, and when one considers, further, that these schemes after they have been approved and passed by the Board of Trade become statutory provisions, I think that any amendment of this character, which gives opportunity for more complete and close

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examination and provides for the fullest publicity, ought to receive the support of your Lordships. It will not be a very long delay that will take place, or might take place, in view of the importance of the subject under discussion. I hope the Government will see their way to accept this Amendment, which is really one of procedure and not of principle. I beg to move.
Amendment moved—
Page 1, line 20, at end insert the said new subsection.—(Lord ill elchett.)
THE SECRETARY OF STATE FOR AIR (LORD THOMSON): As the noble Lord himself pointed out, the first effect of this Amendment will be to delay the production of schemes, which is in itself undesirable. The object of the Amendment is quite clear. I think I am interpreting the noble Lord's ideas correctly when I say that it is designed to give interests other than the coal owners an opportunity of stating their case in regard to these schemes. As a matter of fact, all those interests have had ample opportunity, during the negotiations which have taken place in regard to this Bill, of stating their case to the authorities concerned. It remains to be seen, therefore, how they could gain by this suggestion. The interests to which I referred would be met before the schemes were put into operation, when complaints would be referred to the courts of investigation. Prior approval is given by the Board of Trade. It is submitted that the Board of Trade is really a far more competent authority to decide whether a scheme shall go forward or not than a court of investigation. A Committee of the Board of Trade in these circumstances would have to examine each scheme in order to find out whether it was in accordance with the will of Parliament and whether it was a practicable scheme. After that, the courts of investigation would protect all the interests concerned in the operation. I hope that this explanation will meet the point raised by the noble Lord, for I am afraid I shall have to resist this Amendment.
THE MARQUESS OF SALISBURY: As my noble friend has said, this is only a matter of procedure, but it is an important matter of procedure. Considering the nervousness with which various interests, and especially the
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public, regard this Bill, and the apprehension that it may lead to an increase in the price of coal and to great difficulties, I think the Government would be well advised not to shrink from any reasonable safeguard that may be put forward. I do not say that I desire that this Amendment should be pressed. My noble friend, as I say, has admitted that it is only a matter of procedure. But I hope the noble Lord and his colleagues will realise that they are on their defence in respect of this Bill and that they will do well to reassure the public as soon as they can.
On Question, Amendment negatived.
LORD GAINFORD LORD GAINFORD moved, in subsection (3), to substitute "ten weeks" for "four weeks." The noble Lord said: This Amendment deals with a point of some substance in connection with the preparation of schemes. Under the provisions of this Bill it is necessary for a, central scheme as well as district schemes to be promoted by the coal owners and, in the event of their failing to do so, it is necessary for the Board of Trade to establish a scheme in place of the central or district scheme. Under the provisions of the Bill owners in the district are given only four weeks for the preparation of a scheme, and the period is reckoned from the passing of the Bill. That is all the time allowed, except that there is a proviso allowing the Board of Trade to extend the period in certain circumstances. I submit that to allow four weeks to a whole district for preparing the scheme after the passing of this Bill is an absolutely unreasonable limitation of time. I propose to omit the word "four" and to insert the word "ten." If the Government will accept another figure, such as "eight," I do not demur, but I venture to point out that to suggest that four weeks is a reasonable time is almost preposterous.
I have been Chairman of one of the committees in a district, and it took us many weeks to secure almost complete agreement amongst the owners in the County of Durham in connection with one scheme. As soon as the Government's Bill was introduced that scheme was entirely dropped, and we in Durham, like the owners in every other district, will have to begin de novo. The first thing that will have to occur, even with a natural desire to move as rapidly as

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we can in securing a scheme, will be to come together in conference. The next procedure obviously must be the formation of a committee in order to prepare the scheme. There will not be only one committee, for, since coal is to be classified, you will have to have in every district a special meeting of all the salesmen in order to have a proper classification of the coal. It cannot be done in the time.
No recommendation of a scheme can be made under two or three weeks if we are to deal with all the points which will have to be considered. After that the matter will have to be considered by the coal owners again as a whole, and the owners will have to go back to their various firms and secure the views of their colleagues. The directors of each company will have to thrash out the proposals in the scheme, and then, undoubtedly, they will have to communicate with the Government and the authorities with a view to the scheme being adjusted to meet the various views of the coal owners in the district and to secure a system of general co-ordination, so that each scheme will work into the central scheme. These meetings are often very difficult to arrange and, with every desire to expedite the matter, I do not think it is possible for a scheme to be suggested within six weeks at the very least so as to meet the provisions of the Bill satisfactorily. I suggest, therefore, that the Government might well meet me in extending the period. I beg to move.
Amendment moved—
Page 2, line 4, leave out ("four") and insert ("ten").—(Lord Gainford.)
LORD MARLEY: The Government felt that this suggestion was at first sight a reasonable one, but on examination I think your Lordships will see that the matter is not so difficult as the noble Lord, Lord Gainford, made out. In the first place, the Bill provides that schemes under Part I shall be submitted to the Board of Trade within four weeks. We already have with the Board of Trade schemes for practically the whole of the districts, schemes that have been considered by the owners themselves and will require but the slightest modification as soon as the Bill has passed. In any case the Board has power under the Bill to extend the period beyond four weeks. I would also remind the House that the
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Board must approve the schemes within three months. If this Amendment were accepted and ten weeks were substituted for four weeks, it would only leave the Board two weeks in order to consider the schemes, if any of the districts took the maximum time before they submitted their schemes. In view of the fact that the schemes, with one or two exceptions, are already in the hands of the Board of Trade, I submit to your Lordships that it is unnecessary to make this alteration, and I hope the noble Lord will accept this explanation and withdraw his Amendment.
LORD GAINFORD: I do not see my way to accept the explanation, because as a practical man, having had some experience of these negotiations connected with schemes, I am certain that the schemes which have already been submitted to the Mines Department of the Board of Trade have not been generally accepted in the districts. It is absolutely vital, if you are going to make a success of this, that you should begin almost de note, and the Government must not be under the delusion that schemes proposed voluntarily, in different circumstances, are now going to be accepted as those upon which the districts are necessarily going to stand. They must reconsider the whole matter in connection with this new legislation, and they will have to consider the matter absolutely afresh. It is because of that that I venture to press my Amendment. As I have said before, if the Government are conciliatory and will extend the period even by two or three weeks, I shall not press the House to divide. Otherwise I feel that the Government are asking us to perform what is quite impassible.
LORD JOICEY: I quite confirm what has been said by. Lord Gainford. Only those who have had to deal with these proposed schemes know the difficulty in connection with them, and I think if the Government would realise the difficulty there is in getting coal owners, living in different parts of the county, together, and in fixing special days with gentlemen who have all kinds of engagements to fulfil, they will begin to realise how difficult it is to go into schemes with only four weeks allowed. The statement made by my noble friend is a perfectly right one, and I hope the Government

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on consideration will be a little more reasonable. You must understand that these schemes are schemes to take possession of property belonging to the different districts, and if those who own the property wish to have a little more time in which to consider various particulars with regard to schemes to take possession of their property, I hope the Government will give the matter further consideration and be a little more reasonable.
THE MARQUESS OF LONDONDERRY: I think the Amendment moved by my noble friend is one which the Government should consider, even if they do not go so far as to accept it at this stage of the Bill. As Lord Joicey has told us, there are certain difficulties attending the meeting together of coal owners in various parts of the country. If a little more time can be given my noble friend is prepared not to press the actual Amendment of ten weeks, but is willing to accept a smaller number of weeks. After all, these schemes are then likely to come forward in a better condition than they would be in if the coal owners had to formulate them in a hurry, and bring them forward as best they could. The noble Lord who answered for the Government has told your Lordships that these schemes are already more or less in the hands of the Board of Trade.
LORD MARLEY: The draft schemes are actually in the hands of the Board of Trade at this moment.
THE MARQUESS OF LONDONDERRY: That being so I would like to point out to him that there was what I may express as a certain amount of pressure put upon the coal owners last year, for the purpose of bringing forward schemes, and I think I am not far wrong in saying that those schemes were brought forward under duress, and are not accepted or received in full agreement by various coal owners in various districts. That is why I think that schemes which will be put forward will probably be different in character from those in the hands of the Board of Trade. For this reason I suggest to the noble Lord that if he can see his way to do it, and I think he ought, he should give us this latitude and allow us a little longer period than four weeks.
THE UNDER-SECRETARY OF STATE FOR INDIA (EARL RUSSELL): I think we
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might be able to meet the wishes of noble Lords who have spoken, but I would ask your Lordships to envisage just what the position is. The subsection says: "before the expiration of the period of four weeks from the passing of this Act, or such further period as the Board of Trade may in any case allow." It is perfectly obvious that if a scheme is maturing, but people have not quite come together, the Board of Trade will allow further time. In addition, your Lordships will appreciate that schemes are not going to be considered at the first moment after the Royal Assent is received. As Lord Marley said, there are some schemes already before the Department, and softie of the districts are reconsidering those schemes in the light of the Bill, and making necessary rearrangements in anticipation of the Royal Assent. So probably four weeks is not unreasonable. The Amendment proposes ten weeks. The noble Lord will see that schemes have to come into operation within three months, which is thirteen weeks, and that would hardly give time to the Board of Trade to make any readjustments that may be necessary. The noble Lord intimated that he would be satisfied if further time were given, and we should be prepared to make four weeks into six weeks, always reminding your Lordships that the Board of Trade can extend the period if there is proper reason why they should do so.
LORD GAINFORD: I recognise the advantage that the extra two weeks would be, and I accept that offer, and will move my Amendment in that form.
Amendment, by leave, withdrawn,
Amendment moved—
Page 2, line 4, leave out ("four") and insert ("six").—(Lord Gainford.)
On Question, Amendment agreed to.
LORD MELCHETT LORD MELCHETT moved to omit from subsection (3) all words after "modifications." The noble Lord said: Your Lordships will see that at the end of the subsection power is given to the Board of Trade, in default of a central scheme for the whole of the collieries or coal districts of Great Britain being presented to the Board of Trade, or in default of any district scheme being presented to the Board of Trade, to make a scheme themselves. I do not think it can be quite fully realised what enormous, far-reaching

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consequences the passage of this subsection, as it stands at present, would have. It really makes a Government Department the arbiter in any district, and even for the whole country, as to what quantity of coal the mines are to produce, what the quotas of different pits are to be, and at what price coal is to be sold. In fact, it is difficult to see, if this power were ever exercised, what the functions of the coal owner would be at all, because he would have no power regarding his production, and no power regarding its price, and I do not know whether all that remained to him would not be merely some power of bargaining about wages.
Surely, it cannot be contended that we ought to pass a Bill which enables a Government Department to override the wishes of the majority of the coal owners of any area, whether they wish to make a scheme or not. If a majority of owners in a certain district do not make a scheme, why should they be compelled to do so? They are not merely compelled to make a scheme themselves, but somebody else is empowered to make a scheme for them in certain circumstances. Even that is not the most serious thing. If you visualise it from the point of view of a central scheme the matter becomes much more important. Turn to the beginning of Clause 1, which states:—
"There shall be a scheme (hereafter in this Act referred to as the central scheme ') regulating the production, supply and sale of coal by owners of coal mines situated in Great Britain, which shall, subject to the provisions of the scheme, be administered by body referred to in this Act as the 'Central body'"
It is possible to have a scheme administered by a central council affecting the entire output of the country, and if such a scheme, which might be difficult to create on a voluntary basis—for many difficulties would arise—is not made by the coal industry, then apparently the Board of Trade is to step in and make a scheme affecting fundamentally the output and the price of coal of the whole of the collieries of this country.
I am not aware that such a power has ever existed in any Government Department in this country up to now. It is practically nationalisation in fact, there is very little left for nationalisation to do if the clause passes in its present form, because all the powers, except the power
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of losing money—which is, of course, left to the coal owners—are vested in a Government Department. I sincerely trust that this House, as the custodian—as it still is as long as it exists—of the rights of the private individual and also of the interests of the people of this country, will support this Amendment, upon which I certainly think we ought to divide.
Amendment moved—
Page 2, line 14, leave out from ("modifications") to end of subsection (3).—(Lord Melchett.)
EARL RUSSELL: During the Second Reading debate on this Bill in another place some merriment was aroused at the expense of my Party by the Leader of the Liberal Party in pointing out that this Bill gave everything to the owners and that the fixing of this, that, and the other was left to the owners under this Bill. That certainly has been the object of the Government, as I think appears in every clause of the Bill. The noble Lord admits, as he must admit, that this residual power of the Board of Trade would only come into force if the owners had failed to come to an agreement, or failed to submit a scheme. His Amendment would really cut across the whole structure of the Bill, because the object is to co-ordinate the whole coal industry, and you could not possibly have a district standing out of this structure. Every opportunity is given under this Bill to the coal owners to frame their own scheme, to arrange the matter in the way that they, with their experience, think best; but as was pointed out on the Second Reading, if they will not do that, then it has been thought necessary to have in the background a final element of compulsion, and so something of this kind must be done.
The basis of the whole of Part I is that there must be a central scheme and schemes in all districts. If the whole industry is not covered the advantages of the Bill will not be secured, and indeed it will be impossible for the schemes to function satisfactorily. Your central levy, if you have one, would not work, and your regulation of output would not work; nothing in this Bill would work. And, as a matter of fact, this position was fully understood, and, according to my instructions, was accepted by the coal owners themselves in the discussions when the Bill was drafted. The noble Lord, if he

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carries this Amendment, will make Part I of the Bill entirely useless. It is perfectly obvious that if you are going to maintain the Bill in any form in which it can be of any use to the coal industry, the residual element of compulsion must remain. But the tendency all through is to say: "Let the owners get together, let them frame their own scheme, let them use their own knowledge, make their own suggestions"; but if they simply will not take part in this re-arrangement and will do nothing, then ultimately some authority must make the scheme.
LORD LAMINGTON: Will the noble Earl say whether the clause as it now stands is as it was originally introduced in another place, because amalgamation came into the Bill owing to the log-rolling of another Party?
LORD THOMSON: I am not in a position to inform the noble Lord on that point; but I understand it is as originally drafted. The whole point is that if this Amendment is accepted one small coal concern could wreck the central scheme. That is the state of things to which the coal industry would be exposed if this Amendment were passed. Whatever happened in another place—and I understand nothing happened in the way of compulsion—I should like to point out that this matter was discussed at length with the coal owners before the Bill was originally drafted. In view of that, and of the possible dangers that lurk in letting such an Amendment through, I sincerely hope that your Lordships will not divide on this. The purpose of the Government has been most adequately explained by the noble Earl, Lord Russell, and there is no intention of bullying any owner. The whole idea of the Bill is to get the owners to work together, but in the end, for the purpose of introducing a central scheme, there must be some means of compulsion to keep a small recalcitrant minority in order.
LORD LAMINGTON: I hope the noble Lord will go to a Division. It has never been shown that the central schemes have done any good to the coal trade. So far they have been on a voluntary basis. I was impressed by the speech of the noble Lord, Lord Aberconway, the other day. He approved of amalgamation. I am a shareholder in one of his companies, as I hoped that with his
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ability and knowledge it would fructify to my benefit, but it has not. If owners want to come together, let them come together, but I object entirely to the element of compulsion. The central body composed under this Bill would not be able really to get a sound opinion on these matters, and it would be very dangerous to entrust them with compulsory powers.
LORD THOMSON: This central body consists of coal owners. There is no question of bringing constraint by an outside body of officials or anybody appointed arbitrarily, giving them these tremendous powers. It is a body of coal owners working in the interests of coal owners for the purpose of working this trade. Compulsion, if applied, would be on the recommendation of that body—a scheme drafted by coal owners for coal owners, except for a very small minority.
LORD BANBURY OF SOUTHAM: The noble Lord said that the Board of Trade had no intention of bullying the coal owners. That may be quite true of the present Board of Trade, but what we have to deal with is not the present Board of Trade but Boards of Trade to come, and if we allow a provision of this sort what safeguard have we that the officials of the Board of Trade in a few years time may not start bullying the coal owners? If it is not intended to do any harm, why not accept the Amendment of my noble friend and set the matter at rest at once?
THE MARQUESS OF SALISBURY: Your Lordships are placed in a considerable difficulty by this Bill. Using the most moderate language, I think I may say that the vast majority of your Lordships heartily dislike the Bill altogether. We think it to be a thoroughly bad Bill, and I do not entertain any hope that, after your Lordships have done with it, the Bill will be a good one. I hope it will be a much better Bill; but that is quite a different thing. It will not be a good Bill. Therefore, we are in this position. If we are to accept the Bill at all we must accept a certain number of provisions which we have no real confidence will work well in the least. My noble friend Lord Melchett, who is a great authority on these business matters, is probably much more likely to be correct

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—I hope I may not be thought to be using disrespectful language—than His Majesty's Government are as to the usefulness of this provision.
I also think it is true, and I must make this admission, that if the Amendment passes Part I of the Bill will become practically useless. The question we have to put to ourselves is this—Having agreed to the Second Reading, in my case with great reluctance, are we prepared to make Part I useless? I think my noble friend Lord Lamington was in error in thinking that questions of amalgamation arise on this clause. When we reach Clause 11 I hope he and others of your Lordships will help us in an effort which we shall certainly make to improve that Part of the Bill as far as we can. Then questions of amalgamation will be very properly raised; but they hardly arise here. What I would rather suggest to your Lordships is that we should not here this afternoon determine to destroy Part I of the Bill, but that, as we have accepted the Second Reading, we should allow Part I at any rate to go through in some form or other. If, after discussion in Committee, we come to the conclusion that the Bill is so irredeemably bad that nothing can be done with it, then there are future stages of the Bill on which we can make our opinion felt.
LORD MELCHETT: I am sorry that I cannot agree with the noble Marquess. My Amendment, according to the noble Lord opposite, will destroy Part I of the Bill. What is Part I of the Bill? Part I really gives Government sanction and statutory support to voluntary agreements made in various areas among coal owners. That is the real function of Part I. It gives a statutory sanction to what are now voluntary agreements. That, in itself, is going a very long way, much further than we have ever gone in this country and much further, I think, than, in my business experience, you ought to have to go. In itself it is a very far step, an important step and, perhaps, a useful step. That is really the object of Part I. If noble Lords will look at the next subsection it says that if a scheme is brought forward by the owners who have produced more than half the output of Great Britain they shall be deemed to be a majority of the owners of coal mines
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situate in Great Britain or the district, as the case may be, and on their votes, so to speak, the Board of Trade can act. What a farce that appears to be. What is the use of subsection (4) if, under subsection (3), whether the coal owners agree or not—even if they unanimously disagree—they can still have forced upon them a scheme they do not require? It seems to me to be the greatest contradiction imaginable.
Then I would ask why the Board of Trade, which right through Part I of the Bill acts in an advisory capacity, is suddently made to act in an executive capacity? Who is to criticise the schemes which are made by the Board of Trade? That Department is rightly put in a position to criticise the schemes put forward by the coal owners. If another body is to make schemes which the Board of Trade can make compulsory, surely the Board of Trade ought not themselves or on their own initiative to be the Department to make those schemes. That is extraordinarily objectionable, because the same person is both the judge and the executive. Look at the extraordinary position you get yourselves into. A scheme is brought from a district by the coal owners. Some people at the Board of Trade do not like it and, therefore, the Board can reject the whole scheme and introduce one of their own. You are giving power to the very people who are to be the judges of somebody else's scheme to substitute a scheme which they may like better. After all, the Board of Trade being, like other Departments, peopled by human beings who think they know better than others, will probably prefer any scheme that they work out to that brought forward by a body of coal owners.
Therefore, apart from the root objection that I have raised, I would seriously ask noble Lords opposite whether they are right in the form which they have given to this power. If it is necessary to have this power in reserve it ought to be put more into reserve. If you reached a point where in a given time, much longer than ten weeks, it was found necessary to exercise compulsory powers, surely some body could be set up and power given to the two Houses of Parliament to deal with the matter. With all due respect to the noble Marquess it seems an extraordinary demand to make on the members of your Lordships' House that we should

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agree to hand over England's greatest industry to the ipsi dixit of beaurocrats at the Board of Trade without any real redress or supervising authority except the cumbrous method of a Vote of Censure for which you would never get a day in another place.
I do not want to wreck this Bill particularly, but I would point out to the noble Earl who spoke that after all there are other people in this country besides the coal owners, and the fact that the Government and the coal owners have agreed on something is by no means a reason why this House should accept it as the last word on the subject. There is the British public to be considered. There is British industry to be considered. The very large British industries which buy coal are vitally interested in the question. Therefore, the fact that coal owners and the Government have agreed and that the coal owners are happy is not necessarily a conclusive answer. Could not the Government meet me in this matter if I withdraw my Amendment, and consider this question and leave it over for the Report stage to see whether could not at any rate make it make the clause a good deal more innocuous than it is at present? Otherwise I shall feel bound to press it to a Division, whatever the result may be.
VISCOUNT SUMNER: There is some slight hesitation on the Benches opposite as to whether the reasonable proposal of my noble friend Lord Melchett shall be accepted or not. May I supply a small reason which I think may tend to induce them to reconsider the matter and bring it up at a later stage? It is too soon to begin to talk about wrecking the Bill by this Amendment. I appreciate the case put by the noble Earl. If you have a recalcitrant body of coal owners who will not produce a scheme at all and there is no power in anybody to produce a scheme over their heads, the Bill would come to a standstill, as far as schemes are concerned. It would, therefore, be necessary to provide that in that event, but only in that event, there should be such power.
But look at your own words in this Bill. Going by the words of the Bill alone, if the Board of Trade chooses to say of any given scheme: "We do not approve of that scheme and we are not
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going to notify that scheme and that is that," they can then make their own scheme at once. There is no provision whatever obliging them to refer the matter back to the coal owners, saying: "We think that this, that or the other is objectionable, although the rest of it may be tolerable." There is no provision requiring them to keep the matter open. There are no words under which the coal owners are entitled to have another chance, and to bring in a modified scheme. If the Board of Trade chooses to do that, down comes the guillotine, out goes the coal owners' scheme and in comes the Board of Trade scheme. I dare say that was not thought of. If what I say is producing any impression on the noble Lord, whoever he is, who is in charge of this matter, I need not say any more, but I should like to add this. Do not please tell us you can leave it to the Board of Trade, because the longer one lives and the more one knows of the Board the more one is convinced that, although their virtues are almost super-human, they are not beyond the reach of the temptation to tyranny.
EARL RUSSELL: The noble Lord, Lord Melchett, said he would criticise and he would control these schemes, and he went on to draw for your Lordships the usual picture of the apparently totally irresponsible and quite ill-informed bureaucrat sitting down at his own seat while concocting some scheme which had no element whatever of reality. Your Lordships know, in spite of what the noble and learned Viscount has just said, that this is not the way business is conducted in public Departments. I will answer his question. If he asks who will be the critics of this scheme, my answer is, first of all the coal owners will be the critics of this scheme, and very acute and very well-informed critics they will be. They are critics who will be able to make their voices heard. In addition, the critics of these schemes will no doubt be the actual users and consumers. And when he asks who will control this scheme, the answer is, the President of the Board of Trade will control the fashioning of the scheme, and he himself will be controlled by Parliament. There you have every possible representation, and every possible pressure can be brought to bear upon him to do what is supposed to be the right thing to do.

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But, as the noble Marquess who leads the Opposition truly pointed out, you cannot run this scheme at all if you have a certain section of it standing out and saying: "We won't play. We will take no part in your scheme. We will have nothing to do with it. We will let the whole thing remain higgledy-piggledy and unorganised as it is now." It is essential that the trade should be organised, and these residual powers remain for that purpose. In spite of what the noble and learned Viscount said, I doubt whether any large section of your Lordships believe that any official of the Board of Trade, or any President of the Board of Trade, would be so amazingly foolish as to make a scheme which he knew was unworkable, and that is the reason why it is necessary and desirable it should be left to him. The noble Lord, Lord Melchett, said: "Why not set up some special tribunal for the purpose? "What better judges can you have in the first instance than the coal owners themselves who are asked to prepare the scheme. As to the tribunal of control surely the only tribunal of appeal which has any weight is the public opinion of this country, and that is represented by the President of the Board of Trade, who, in turn, is responsible to the House of Commons.
LORD CARSON: I do not profess to know anything about the working of these schemes, but there is one question that was raised by my noble and learned friend who sits beside me (Viscount Sumner) upon which I would like a specific answer. Is it the fact, as he says, that under the control—I offer no opinion myself—if the owners do put forward a scheme, the Board of Trade can say: "We do not like your scheme, and now we are going to make a scheme of our own"? Is that a fact? If that is a fact what you are doing is this, you are putting the Board of Trade in a judicial position, determining whether the scheme of the owners or the scheme of the Board of Trade is the better one. Does the House wish to do that? So far as my experience goes, when you get a conflict of that kind you are borne down by a Department and you have no control at all. As I understand, there is even no Parliamentary control provided in the Bill. There should be in the Bill a provision that, in the case of difference between the coal owners and the Board of Trade as to which was
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the best scheme, it could be referred to Parliament; the scheme should have to lie upon the Table of the House for so many days so that the whole thing might be raised and discussed. But, as I understand, there is no control of any kind given to either House of Parliament over the matter once the scheme has been rejected (by the Board of Trade.
I hope your Lordships, without a good deal more consideration, will not give such powers to a Department in the present day in a case where owners are being ousted from the whole management of their business which may, or may not, progress. The very conditions under which they will be compelled, according to the provisions of this Bill, to carry on their business may mean ruin to them. If any thing in the world is clearer than another to my mind it is this, that dual control of that kind must in the end lead to nationalisation, for you can never have a Department telling a coal owner how to carry on his business, and, if there is a dispute between them, the Department is the judge. I say no business in this country, whether coal or anything else, could possibly prosper under such conditions, and I hope the House will support my noble and learned friend if he goes to a Division.
LORD JOICEY: I quite appreciate what has been said by the two noble and learned Lords who have just spoken. Something ought to be done to deal with the matter that has been brought before your Lordships, and I think it is well worth consideration whether something could not be done on the Report stage. I quite admit that you cannot carry on any scheme without some form of compulsion. Suppose a third or a quarter of the coal owners in a particular district said: "We are not going to have a scheme," what would be the result? Do you not think that the other coal owners who were under the scheme would have their business practically destroyed? I was rather interested when the noble Earl, Lord Russell, said: "Do you think the Board of Trade is going to do a foolish thing?" I have known the Board of Trade at other times do very foolish things, and sometimes even the Government which is supposed to control the Board of Trade does foolish things. I hope that the Government will give way

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to a certain extent, and undertake to deal with the subject which has been brought forward. It is a very important thing that there should be an opportunity of reconsidering any scheme which is proposed by the Government, after a scheme brought forward by the coal owners has been thrown aside. If the Government cannot deal with the question now I hope at all events they will do so on the Report stage.
VISCOUNT HAILSHAM: I confess that the answer which the noble Earl, Lord Russell, gave has occasioned me some embarrassment and considerable I appointment. Speaking for myself, I do not entirely go with my noble friend Lord Melchett, in thinking that the only idea of Part I of the Bill is to enable the Board of Trade to sanction voluntary arrangements between coal owners. It seems to me that it is an essential part of the Bill as it is drawn that if the coal owners in any district, or if the coal owners in the country at, large, refuse to produce a scheme at all, there must be somebody in a position to make a scheme. I think a scheme is an essential part of Part I. That does not mean that I think Part I is good. On the other hand, I think there is very great force in the objection that it is not reasonable to say that any Government Department, however competent, should be put in the position of pronouncing upon a scheme without any appeal from their decision, and then to make an alternative scheme of their own which again is subject to no sort of representation or control. It is really no answer to say that the Minister at the head of the Department can be attacked in Parliament.
I should have thought that a very reasonable way out was afforded by the suggestion put forward by my noble and learned friend Lord Carson—namely, that the schemes when they are made shall be laid before each House of Parliament and shall be subject to the approval of the House. That is not a very unreasonable proposal. It seems to me to be very strongly indicated by the fact that that very provision is embodied in the Bill as it stands with regard to the amendment of any scheme. If your Lordships look at subsection (4) of Clause 2 you will find that if it is necessary to amend a scheme then the Board may lay before each House of Parliament an
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Order effecting an amendment and, if the House approves, then it shall become operative. It does not seem to me unreasonable to suggest that with regard to an original scheme some similar procedure—the same procedure in fact—shall be adopted, and therefore that each House of Parliament shall have control over the inauguration of a scheme which admittedly must very greatly affect a very important industry.
If only the Government would give an indication of their willingness to consider—I do not ask them, of course, to embody an Amendment in the Bill at this moment—and if necessary put forward at a later stage an Amendment on these lines, then so far as I am concerned my own main objection would be met, and the objection which I feel confident is shared very largely on this side of the House—namely, the objection that the Board of Trade under the Bill as it stands is put in the position of adjudicating upon a scheme, that it can arbitrarily refuse to approve a scheme for the mere purpose of saying that it has no scheme before it, and therefore it is going to make one of its own. That does not seem to me a fair position in which to put any Government Department. I think that the machinery I have indicated, while it would preserve the power of making a scheme if the coal owners either in the central scheme or in a district refuse to put one forward, would at the same time afford a reasonable protection against an arbitrary exercise of that power by the Government Department in question. I do hope the Government will see their way to be a little more sympathetic to the suggestion which my noble and learned friend Lord Carson put forward.
LORD THOMSON: There are one or two points which I should like to deal with on this Amendment. The noble and learned Viscount, Lord Sumner, said he did not quite know with whom he was dealing. I admit that it looks as if there were a three-headed dragon on this side of the House. May I say that I am the big head? I am the person in charge. The next point I wish to deal with is that of the noble and learned Lord, Lord Carson, who asked whether a scheme had to be submitted to and approved by the Board of Trade. Quite obviously that is so. It occurs in the subsection with which we are dealing. The element of compulsion is intended. Several noble

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Lords opposite have spoken about this Part of the Bill as though it were going on to all eternity and as though there was ample time to deal with all its provisions. As a matter of fact, this Part of the Bill expires on December 31, 1932. That is not a very long time ahead. But after the speeches that have been made, and more especially that of the noble and learned Viscount, Lord Hailsham, I will make this offer to the noble Lord, Lord Melchett. If he will co-operate with us in framing some Amendment or subsection to meet his point, I can assure him we shall be very grateful for his assistance, and we will endeavour to incorporate it in the Bill at the Report stage if it meets with the approval of the Department and the other authorities concerned. We are anxious to treat this Bill sympathetically. We appreciate the value of your Lordships' opinions on any part of it. It seems to me that it would be very difficult at this moment to insert this Amendment in the Bill, but we shall welcome the assistance of Lord Melchett if he will endeavour to find a, form of words for insertion on the Report stage.
Loan MELCHETT: I shall be very glad to do my best to meet the difficulties which many of us feel with regard to this clause. Having regard to the terms of the noble Lord's offer, I will, with the leave of the Committee, withdraw my Amendment now.
Amendment, by leave, withdrawn.
LORD MELCHETT LORD MELCHETT moved, in subsection (4), to leave out "half." The noble Lord said: The next Amendment which I have on the paper is to leave out the word "half" with the object later on of inserting "three-quarters." My reason for moving this Amendment is that as the clause now stands a bare majority of the owners of coal mines, if they produce half the output, are deemed to be a majority, and it has been represented to me that it would be much more in accordance with our usual practice to make the majority rather larger than half, to make it three-quarters. A bare majority seems an extremely small one to deal with such an important subject, and to enable you really to compel, say, 49 per cent. of coal owners into a scheme to which they objected. I think if the owners producing three-quarters of the
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Lord Thomson output agree on something then you might say that the minority of 25 per cent. should not be allowed to interfere with a scheme. I think unless you had some figure like that you really would not get a scheme at all which you could put forward.
Amendment moved—
Page 2, line 21, leave out ("half").(Lord Melehett.)
EARL RUSSELL: I had thought that this Amendment might be consequential on the noble Lord's previous Amendment, but as he has now moved it I gather that is not so. I am not sure whether it would really achieve the object he desires. It obviously would be undesirable that a scheme should have the assent of only 51 per cent. of the tonnage worked under that scheme, and if the other 49 per cent. were strongly opposed to the scheme it is likely that it would work badly. It would militate against the success of the scheme. But does the noble Lord see exactly what is done? These are schemes which are to be voluntarily submitted by coal owners to the Board of Trade. These are schemes which it is hoped they will make for themselves and the Board of Trade have power if they do not submit a scheme to make a scheme themselves ab initio. Presumably you would get a smaller number of schemes submitted voluntarily by the owners if you required a 75 per cent. majority than if you required one of 51 per cent., and therefore you would leave the initiative in making schemes to the Board of Trade in a larger number of cases. We think that very undesirable, as, I imagine, does the noble Lord himself. It is far better that these schemes should come from the coal owners themselves.
If the noble Lord is afraid that the interests of minorities would not be protected, he must remember that the Board of Trade have power to insist upon modification of schemes before approval if they think that there is anything in a scheme definitely unfair to a minority. The position of minorities is further protected, because even those who do not support the submission of a scheme and against whose will the scheme is made are still entitled to their fair representation on the executive board as it is first elected. I really think that the effect of this Amendment would be almost exactly

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the opposite of that which the noble Lord desires, and I hope, therefore, that he will withdraw it.
LORD DIELCHETT: I think there is a good deal of force in what the noble Lord says. If we had taken out the words which I wished to omit from subsection (3) it would be a different matter.
EARL RUSSELL: That is why I thought this was consequential.
LORD MELCHETT: Really I do not know why subsection (4) should be in the Bill, for it seems to me to be a mere concession to human weakness, but in the circumstances I agree to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD THOMSON LORD THOMSON moved, in subsection (6), to leave out "and" ["and, in the case of a new scheme"], and to insert "or." The noble Lord said: This is a drafting Amendment, designed to make it clear that a new district scheme, in substitution for an earlier district scheme, can be submitted by the executive board for the district.
Amendment moved—
Page 2, line 40 leave out ("and") and insert ("or").—(Lord Thomson.)
On Question, Amendment agreed to.
LORD BANBURY or SOUTHAM LORD BANBURY or SOUTHAM moved to leave out Clause 1. The noble Lord said: In rising to move the deletion of this clause, I should like to call your Lordships' attention to the fact that the other Amendments that I have put down, to leave out the remaining clauses of Part I, are consequential upon this and, if I do not succeed in inducing your Lordships to omit this clause, I shall not move them. There are two reasons, to my mind, why we should not accept this particular clause. The first is that it is an impossible clause, as I hope to show later on. The second reason—and I wish, if I may, to have the attention of my noble friend the Leader of the Opposition—is that the rejection of this clause, though it means the rejection of Part I, does not in any kind of way imperil the rest of the Bill, nor does it do anything that would imperil the object for which the Bill was introduced.
Your Lordships all know the real object of this Bill. Pledges were given during the Election that the coal miners should work only seven hours and be paid at the
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same rate as if they were working eight hours. That was the object of the Bill, and no other. If you leave out Part I, you do not interfere with that object at all. That comes in later. All you do, if you leave out Part I, is to leave out a project which has never been put before either House of Parliament, or even considered in the country. Just see what Clause 1 does. It says:—
"There shall be a scheme (hereinafter in this Act referred to as 'the central scheme') regulating the production, supply and sale of coal by owners of coal mines situated in Great Britain, which shall, subject to the provisions of the scheme, be administered by a body referred to in this Act as the Central Council'; and, subject to the provisions of this Act, there shall be for every district a scheme (hereafter in this Act referred to as a district scheme') regulating the production, supply and sale of coal by owners of coal mines situated in the district, which shall, subject to the provisions of the scheme, be administered by a body referred to in this Act as an executive hoard.'"
I will not trouble your Lordships by quoting the rest of Part I, if you will take it from me that all the safeguarding provisions are done away with in the long run. Whatever scheme the owners produce or whatever they do, the Board of Trade can say: "Take away your scheme and take away your committee; we are going to start a scheme and put in the people who are to administer it." That is all covered up, no doubt, but that is the effect of this clause and of Part I as it stands.
Let us see what it is they are going to do. They are going to regulate "the production, supply and sale of coal." What does that mean? It means that the business of the coal owner is to be regulated, not by him but by a body set up by a Government Department. If there is a loss, owing to bad management by the Department, it does not fall upon the Department nor upon the taxpayer, but upon the coal owner, who may have objected entirely to the scheme and who had to put up with a loss made by foolish administration on the part of the Government Department. Have we any record of administration by a Government Department? We know that during the War the Board of Trade administered the railways. At that time I had the honour of being Chairman of the Great Northern Railway Company, and therefore I know something of how the Board of Trade administered the railways. The result was a loss, but in that case the taxpayer

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had to pay. As soon as the administration of the Government ceased, the railways, under proper management, made a profit. In those circumstances it seems to me to be perfectly inconceivable that your Lordships should pass this Part of the Bill, which will enact provisions such as I have just outlined to you.
What is the real object of the Bill? Nationalisation. And it is bad nationalisation, because, under real nationalisation, the country would have to recompense the coal owner and, if there were a loss, the loss would fall upon the country. In this case nationalisation is hidden, and the result is that, while the effect is that of nationalisation, because the mines will be run by a Government Department, the loss will fall upon the coal owner. Is there anything else behind this? Supposing my noble friend Lord Melchett desires to purchase an undertaking. I think I am not doing him an injustice if I say that he does not 'proclaim loudly to the world that he is prepared to purchase that undertaking and, if somebody should do something by which the value of that undertaking is depreciated and my noble friend Lord Melchett is able to buy at a reduced price, I do not think he would object. Is this what the Government are trying to do? Are they now, under Part I of this Bill, trying so to depreciate the value of the coal owners property that if—and I hope such a thing is impossible—they should remain in office long enough to bring in a nationalising Bill, they will he able to buy a depreciated property at a less price than they would have to pay if they took the manly course now and said: "We are going to nationalise the mines." If I can get anybody to support me, I shall certainly go to a Division on this Amendment.
Amendment moved—
Leave out Clause 1.—(Lord Banbury of Southam.)
LORD THOMSON: I hope that the noble Lord, Lord Banbury of Southam, will not suspect me of any discourtesy if I do not reply to him at great length. In point of fact the answer to what he said has been very largely given by the noble Marquess, the Leader of the Opposition. This Amendment is really a wrecking Amendment, and it would mean the putting of the Bill into force without Part I. The object of Part I is
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to set up schemes whereby the coal industry shall be regulated and a senseless competition stopped between pit and pit, and concern and concern—a competition which has resulted in uneconomic prices and general distress throughout the industry. That is the effect on the industry of this Bill, and Part I provides the machinery for it. The noble Lord, I think, was mistaken when he said that these schemes had never been submitted to the country, and came like a bolt from the blue.
LORD BANBURY or SOUTHAM: I said that no scheme of this sort had ever been put into effect, not that it had never been submitted to the country.
LORD THOMSON: That is the point of my argument. These schemes have been put into effect, or something very like them, in South Wales and Yorkshire—the five-counties scheme even. Schemes which are almost identical have been applied as part of the voluntary efforts of coal owners themselves. That is, I think, the whole point. The schemes have been applied by practical men, and I am not sure that Lord Melchett has not applied them himself. They are the outcome of practical experience in two of the most progressive coalfields in this country, and it is based on that experience that the Government go forward with Part I which lasts only until December 31, 1932. It is hoped by the successful application of Part I of this Bill to mitigate any rise in the cost of production which may result from the reduction in hours. Therefore, Part I of this Bill is intimately bound up with other essential Parts of the Bill, and I am sorry to have to say to the noble Lord that it is quite impossible for the Government to accept this Amendment.
LORD BANBURY OF SOUTHAM: The noble Lord who has just sat down told us that in Yorkshire and South Wales certain schemes had already been put into operation, and were successful. Were not those schemes voluntary? The Board of Trade had no power under those schemes. Those schemes were voluntary ones. That is quite a different thing altogether. I have no objection to voluntary schemes. What I object to is the Board of Trade coming in and saying: "We are going to tell you how to conduct your business." I venture to.

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say it is a novel proceeding, and except in the case of the railways during the War has never been brought into any Bill before. I do not know what the view of your Lordships is, but if I can get support I shall certainly divide the Committee.
LORD LAMINGTON: We have been frankly told by the Lord Chancellor that he is in favour of nationalisation, and it is true that this is a step towards nationalisation. I think it would be fairer to have nationalisation, because then we should have some responsibility, and now there will be none, for the Board of Trade, who will frame the schemes, have no financial responsibility, nor will they have any cognisance of the difficulties attaching to the industry. I do not understand your Lordships passing Part I without a protest. It would almost seem as if you were in favour of some form, and a very bad form, of nationalisation. I beg to support the Amendment.
On Question, Clause 1, as amended, agreed to.
Clause 2:
Provisions of central scheme.
(2) The central scheme shall further provide for the following matters—
(b) for the allocation to each district by the council, after consultation with the executive board for the district, at such times and for such periods as the council thinks fit, of a maximum output for the district (in this Act referred to as "the district allocation");
(3) The central scheme may provide for such matters as appear to the Board of Trade to be incidental to, or consequential on, the foregoing provisions of this section or to he necessary for giving effect to those provisions.
THE EARL OF DUDLEY THE EARL OF DUDLEY moved to add to paragraph (b) of subsection (2) "such maximum not to be less than the ascertained home consumption of that district." The noble Earl said: So many years have elapsed since last I had the honour of addressing your Lordships that it is with feelings of the greatest diffidence, I might almost say trepidation, that I rise to move the Amendment which stands in my name. But the matter with which this Amendment deals
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is of such vital importance to the coal mining industry in South Staffordshire and East Worcestershire that I have ventured to bring it to the notice of the Committee. Let me say at once that this Amendment is not one that has been exhumed for your inspection after its demise in another place. A proposal on somewhat similar lines was, it is true, put on the Notice Paper in the House of Commons, but the time allowed was not sufficient to enable it to be reached. Therefore, so far as I know, this is the first occasion on which this matter has been referred to during the passage of the Bill through Parliament.
As your Lordships are, of course, very well aware, one of the principal features of this Bill is what is known as the quota arrangement, by which it is hoped, by limiting the output of coal, to approximate the supply very nearly to the demand. The theory of those who support this scheme is that as, throughout England generally, there is a lack of markets for the coal produced and a consequent heavy depression in price, therefore it is necessary artificially to raise that price by limiting the supply. Although that condition of affairs may perhaps be true with regard to most of the coalfields throughout Great Britain, there are nevertheless one or two areas in England where a very different state of things exists. In the Forest of Dean, for instance, and in the Bristol area, I understand there is no lank of markets. Especially is this the case in East Worcestershire and South Staffordshire, which is a district in which my family have been occupied in mining operations for many years past. In that district, owing to the rich deposits of coal, limestone, ironstone and fireclay, a great many local industries have gradually been built up. Those industries are large and constant, consumers of fuel, and are well served by easy and adequate transport services from the mines which lie near at hand. In fact I would impress upon your Lordships that in this particular part of England the demand for fuel has at the present time grown very much larger than the potential supply of the whole district.
The whole point, therefore, that I would make to the Committee is this, that in those circumstances it is unwise, and economically most unsound, that the output of coal should be compulsorily

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restricted in those areas where the local industries are calling out for all the fuel that they can get, and where they would be heavily penalised if they were unable to get it. These Black Country industries have been established and have in the main succeeded on the basis of cheap and readily accessible fuel. Now this Bill inevitably is going to raise very considerably the price of coal. That is, indeed, its avowed object. That may be all very well from the coal industry point of view, and it may enable them to stave off for the time being the difficulties in which they at present find themselves placed. But, as my noble friend Lord Melchett has just said, there are other people besides coal owners in England, and this arrangement is going to be a very serious matter indeed for those people who depend very largely for their success upon their power of obtaining as much fuel as they require at the lowest possible price.
Therefore, if the compulsory limitation of coal is to take place in South Stafford-shire, these local industries which want coal will have to supply the deficiency from outlying districts at a much greater cast to themselves. For, instead of being able to obtain the fuel that they need quickly and expeditiously from the mines which are near at hand, they will be forced to pay the transport charges on coal from areas lying much further afield—coal indeed which, when they get it, may not meet their requirements half as well as the local supply. Moreover, the extra expense to which they would be put would in no way enrich the owners of the outlying areas; it would merely represent an extra tax upon industry, the whole proceeds of which would be divided among the transporting companies. I would, therefore, conclude this portion of my remarks by submitting that in those areas where a large demand for fuel exists the already severe difficulties under which the local industries are at present suffering should not be increased and their trade arrangements disorganised by a compulsory limitation of their local fuel.
There is, however, another and I think an even weightier reason why a compulsory limitation of output in South Staffordshire would be particularly injurious, for it is a district which in one or two respects is quite unique as regards
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its physical mining conditions. In the first place, the whole of the area is terribly waterlogged, and, in order to preserve the mines from flooding, it is necessary that constant and most costly pumping operations should be carried on. But the only way in which the cost of those pumping operations can be borne, and at the same time a margin of profit provided for, is that the mines should be allowed to work full time in order that the greatest possible output of coal may be raised, so as to keep the cost of working as low as possible in comparison with the revenues derived from the sale of coal. Therefore, a compulsory stoppage of work in that area for one or two days a week would very largely indeed increase the cost of the pumping operations—so largely indeed that it might very easily lead to the permanent closing down of a great number of the pits—an eventuality which, I can assure the House, would constitute a very grave menace indeed to the existence of the whole area.
But there is another peculiarity which South Staffordshire possesses, and that is that its principal seam of coal is of a thickness of no less than 30 feet—by far the thickest coal seam in Great Britain. I dare say there is a certain number of people who may think that we are very lucky to have a seam of that thickness, and undoubtedly the Black Country is very proud of it as a geological curiosity. But on the other hand I can assure noble Lords opposite that the difficulty and expense of working it is very great indeed. I am not going to attempt to go into mining details, which only a mining expert can properly explain, but I am quite sure your Lordships will easily understand what a tremendous weight a great mass of that coal must be, and how friable therefore it is, and in consequence what a tremendous lot of constant, costly and careful work has to be done, both on the roads and on the working face, in maintenance and repair. As an illustration of that, it has been calculated that a stoppage of one day in these "thick" pits will add a cost of 6d. a ton to the output of the whole pit for one week. And if the stoppage is for two days, the increased cost of working will be at an even higher ratio. Another point is that if in any day's working you

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have a stoppage in these "thick" pits the proportion of slack and dirt to coal is very much greater than usual, and, as the value of slack is comparatively small, the overhead cost is correspondingly increased.
I hope I have already said enough to show that the position of the South Staffordshire coalfield is a totally different one from the position of most of the coalfields of Great Britain. For that reason any compulsory limitation of the output of coal in that district would have most injurious and perhaps disastrous results upon the industrial interests of the whole locality. I may be told presently by the noble Lord in charge of the Bill that under its provisions a Central Council and a Board of Referees have been set up, who are to allocate every three months or so to every mining area a certain output of coal which they may raise, and that it is to them and not to Parliament that we should make our representations. That is not a solution which finds the smallest favour in the eyes of those in whose interests I speak here this afternoon. This question of the limitation of output in South Staffordshire is such an important one to miners and industrialists alike that they naturally view with very great anxiety the delegation by Parliament of these most important powers to a board which may not fully appreciate and understand the particular mining difficulties of the district and which, indeed, may be composed to a certain extent of trade rivals. Nor do they want to be compelled every three months to send the most expert members of their technical staff to argue before these boards what allocation they are to have. I cannot conceive of any system more fraught with inconvenience and uncertainty.
As far as South Staffordshire is concerned, I can assure the House that any uncertainty with regard to the number of working hours per day in these thick pits may have a, very bad effect indeed upon our local labour supply. As it is we are finding large and increasing difficulty in obtaining the number of men we require, to work the thick pits, partly, as I have already pointed out, because the conditions in those pits are very exceptional and partly because, owing to those conditions, men have to have long and very careful training. Hitherto the great inducement we have been able to hold out
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is the prospect of full-time work from one year's end to the other. But if under the provisions of this Bill the thick pits of South Staffordshire are to stand idle one or two days a week that inducement will be removed, and it may very well be that the young men of the district will turn their attention to more continuous channels of employment for their livelihood.
Therefore we appeal to Parliament to safeguard us from those dangers by the simple enactment of this Amendment, so that the mines shall be allowed to work full time when the local markets are sufficient to enable them to do so. I submit that this is not an unreasonable request to make. It will not interfere in the least with the main objects of the Bill or hamper its working throughout the rest of the country. It merely maintains the principle, which, surely, is a sound one, that coal owners should be allowed to supply their local customers to the fullest extent of their resources and their plan and that in these days of fierce industrial competition and of widespread depression no further burden as to cost should be put unnecessarily upon the shoulders of manufacturers who are striving hard for better days. I beg to move.
Amendment moved—
Page 3, line 38, at end insert ("such maximum not to be less than the ascertained home consumption of that district").—(The Earl of Dudley.)
LORD MARLEY: It falls to me to deal with the Amendment of the noble Earl. May I, with the permission of the Committee, deal first of all with the point made that this Bill will inevitably raise prices. The Government have never taken that point of view. I would like in passing to deal with that point though it is actually not closely connected with this Amendment. In the first place, the Government believe that under the Bill prices may be raised in the world market; that is to say, that by international agreement and the allocation of neutral markets there is every reason to suppose that we shall be able to obtain a remunerative price for export coal in the future which we have definitely failed to do in the past. If there is in fact, and we have reason to believe it is the case, a source of income to be tapped for the coal mining industry from the international market, that will go far to meet

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any possible rise in price which may result from the shortening of the hours of the miners.
Then there is the fact that the quota system will tend to result in a concentration of production in the more efficient pits with the consequent lowering of the cost of production. We have it as a fact that public utility societies are not paying a remunerative price for the coal they purchase and there, again, will be a source of some extra income for the coal mining industry. From various other sources money will be available, and for this reason we believe that in point of fact the price of coal will not be raised in this country. Many experts believe in fact that there may result a lowering of the price of coal to the domestic consumer and to the iron and steel industry. With regard to the actual Amendment—
Several NOBLE LORDS: Hear, hear.
LORD MARLEY: I think I have a right to deal with points raised in a speech, though they may not have anything actually to do with the Amendment, particularly when those points have been raised in many parts of your Lordships' House and in the country. The Amendment seeks to lay down that the maximum output shall not be less than the ascertained home consumption in each district. I think that is the meaning of the Amendment. May I point out that in some disstricts consumption is actually greater than production. Therefore if this Amendment were carried such a district would receive a larger share of the national output, which would mean a lowering of the district allocation in other and less favourable districts.
Then there are a number of districts, such as South Staffordshire, with which the noble Earl is particularly concerned, in which most of the local output is consumed locally. I would point out to him that such a district would have the right to claim as a district allocation the full amount of its local consumption. It would have a right to claim that full amount, and if in any way it was not satisfied it could go to arbitration. But as South Staffordshire has been producing for some time the full amount required for local consumption there can be no reason for any alteration in the amount of the district allocation for South Staffordshire, because, under
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this scheme, there is no proposal to lower the total production of the country. On the contrary, it is hoped that by an increase in export trade we shall be able to raise the total production in the country. Districts which only sell a small proportion of their output within their own area will not be affected by the Amendment. I would therefore submit to your Lordships that this Amendment will do harm to South Staffordshire and not good, because under the Bill as it stands South Staffordshire will not suffer by a lower district allocation than its home consumption, whereas if the Amendment is passed there will be a district allocation for areas such as Lancashire, which are in fact consuming more than they produce, which will mean a lower district allocation for South Staffordshire and other similarly placed areas. I hope therefore the noble Earl will accept this explanation.
THE EARL OF DUDLEY: I do not want to interrupt, but do I understand the noble Lord to say that in the opinion of the Government a locality will receive its allocation according to the maximum market in that locality?
LORD MARLEY: No, according to the production over a number of years. The district allocation will be based on that production. If, therefore, South Staffordshire has been producing in fact the amount suggested by the noble Earl, that will be approximately the basis for the district allocation.
THE MARQUESS OF SALISBURY: I regret very much that the noble Lord representing the Government has not seen his way to accept the Amendment of my noble friend. May I say how much we welcome back to our counsels my noble friend [the Earl of Dudley]. As we listened to his well-balanced sentences we realised how much we had lost during all these years of his absence. I regret that upon his return he has not met with greater success on the merits of his proposal from the Government. The noble Lord said in the course of his speech that there was no suggestion by the Government to limit the production of coal. I thought it was the main point of the speech of the Lord Chancellor that supply had overtopped demand, and that there was urgent necessity to limit it.
LORD MARLEY: Potential supply, not actual supply.
THE MARQUESS OF SALISBURY: The Lord Chancellor said potential supply? It would be easier if the Lord Chancellor were here.
LORD MARLEY: In the coal mining industry consumption and production are virtually the same.
THE MARQUESS OF SALISBURY: I was confuting, or trying to confute, the observation of the noble Lord that there had been no intention on the part of His Majesty's Government to limit the supply of coal, and I ventured to say, in the absence for a moment of the noble and learned Lord Chancellor, that a large part of his argument depended upon his allegation, which other noble Lords do not quite accept, that the supply had overrun the demand, and that it was right and necessary to check supply. I confess that I was not at all reassured by the noble Lord's speech. He said that if South Staffordshire, or wherever it might be—for my noble friend's Amendment is quite general, and does not apply to Staffordshire only—if South Staffordshire was aggrieved by the decision it could appeal and go to arbitration. But we do not want to hamper the trade of his country with all these law suits. Those are the things which are so objectionable. The Government seem to think that by piling on one kind of appeal upon another, and arbitration upon the top of that, they can meet all the difficulties.
The great way to make an industry work smoothly is to avoid all these things, and, indeed, the noble Lord in his speech did not seem to have the least feeling for the consumer. The whole point of the contention of my noble friend behind me (the Earl of Dudley), and of noble Lords sitting near me is, that this Bill and the Government's defence of it seem to ignore the wishes of the consumer. They are always considering or saying they are considering the interests of the coal owners. We are very familiar with that, but we never get the consumer consulted except in the part at the end of the Bill, which is only of an advisory character. All the compulsory parts of the Bill, with which it abounds, are against the consumer, and my noble friend comes forward with a plea in their favour. He says in the mines with which he is familiar the
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provision of coal close at hand is of the greatest importance to the success of the local industries, and he asks why, in the name of all that is wonderful, should not the local people have the advantage of all the coal they require which is being got in the mines just at their door? I should have thought that was obvious common sense. The noble Lord says that will, of course, be considered when the calculation is made as to what the output of the mine has been in the last few years. Supposing the industry in Staffordshire increases; supposing it wants a little more coal. According to the noble Lord that would not necessarily be taken into consideration. It would depend upon what coal had been wanted in the past, not on what coal was wanted in the present. We do not wish to be hampered in that way and it appears to us to be mere common sense that we should lay down plainly on the face of the Act of Parliament that this maximum is not to be less than the ascertained home consumption of a district. That seems to be common sense, and we hope the Government will accept the Amendment.
LORD THOMSON: Without straying into the question of what we mean by production and consumption, because we hall have ample opportunity for studying that aspect of the problem when we get to Part II, what the Government mean by it, of course, is productive capacity. I listened with the greatest attention and interest to the speech of the noble Earl, Lord Dudley, fully appreciating all his points, and, speaking personally, I can see a great deal in them, but Part I of the Bill is not for local application. There is such a thing as equity with regard to the whole country. South Staffordshire is undoubtedly rather exceptional in this respect. Take Lancashire. As my noble friend has pointed out, if you put the words into the Bill that the noble Earl suggests, you would be tying the hands of the Central Council completely. They would be obliged to give an allocation to the district far in excess of its actual requirements as a district, from the point of view that the allocation would be based on the consumption in Lancashire, which is two or three times as great as its production. This scheme has to apply to the whole of the coalfields in an equitable manner. The Central Council, I keep on repeating, consists of coal

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owners, and the executive, boards in districts consist of coal owners. They will surely be able to arrange these matters in an equitable fashion between themselves. If they cannot, I cannot imagine who would be able to do it.
The noble Marquess says that you will have arbitration all the time. You cannot stop arbitration under these provisions. I wish I could suggest any method to your Lordships of avoiding arbitration, but I fail to see why the Bill as it stands should produce more arbitration than it would produce if the Amendment suggested by the noble Earl were inserted. I repeat that I listened with the greatest interest to the noble Earl's speech, and I thoroughly understood his points, but I hope he will understand my explanation also, that this Bill is for application throughout the entire country. It cannot take or give undue weight to purely local considerations. For these reasons I trust that the noble Earl will not press the Amendment because if he does I am afraid I shall have to resist it.
THE EARL OF DUDLEY: It seems to me that the words which I ask to be inserted are of general application. They really are such reasonable words that I confess I am not altogether satisfied with the reply that has been given by the noble Lord on the Government Benches. Therefore I would ask leave to be allowed to press this Amendment to a Division.
LORD GAINFORD: May I be allowed to intervene for a moment to say that in our meetings the Staffordshire representatives have made it quite clear that in their interests they dislike very much any idea of having their production limited in any way. They have been quite anxious to join a scheme in connection with regulation of price, but they have been absolutely consistent in arguing that on account of their great expenses in connection with de-watering their collieries, it is essential for them to have a certain definite output. Whilst I admit that, I am bound to say that some of the rest of the colliery owners think that Staffordshire would be put in a preferential position as compared with coal owners in the rest of England. We recognise that their special position is rather a hard case, but at the same time we do say it should not be possible for one district to be given their total output whilst in other districts coal owners would be subject to a quota reduction.
LORD DARYNGTON: I should like to suggest a possible way out by using some such words as "due attention being given to the home consumption." I think that would meet the point made by the noble Lord just now.
THE MARQUESS OF SALISBURY: Of course it is possible that the words may require to be slightly modified, but that might be done later on.
LORD AMULREE: I should like to call attention to one point. I am not quite sure if your Lordships fully appreciate the situation. Lancashire, as I understand, produces less coal than it consumes and certain other districts do the same. If the Amendment is accepted it would mean that Lancashire would really not come within the quota at all, because under the suggested Amendment as to maximum consumption she would produce far more coal than she consumes. Other districts on the other hand, the exporting districts, will not be affected. It seems to me if you are to have a general rule like this applying to all districts, you are going to put the whole scheme in jeopardy inasmuch as you will be giving a particular district such as Lancashire power to produce coal largely in excess of what she is producing at the present time or would be under the scheme. I submit that the Amendment suggested requires very serious consideration before it can be accepted.
LORD THOMSON: May I make a suggestion? If the noble Earl, Lord Dudley, would bring forward on the Report stage of the Bill an Amendment somewhat on the lines suggested by the noble Lord, Lord Daryngton, "having due regard to the district consumption" or words to that effect, I would certainly on behalf of the Government give it most careful and sympathetic consideration. But to accept the Amendment as it stands is really quite impossible.
THE MARQUESS OF SALISBURY: I am sure my noble friend will be well advised between this and the Report stage to consider whether the words are quite perfect, but I see no reason why the words on the Paper should not be inserted at the present stage and the matter considered between now and the Report stage.
On Question, Whether the said words shall be there inserted?
Resolved in the affirmative and Amendment agreed to accordingly.
Their Lordships divided: Contents, 136; Not-Contents, 38.

CONTENTS.

Beaufort, D.

Chaplin, V.

Gage, L. (V. Gage.)

Rutland, D.

Devonport, V.

Gifford, L.

Somerset, D.

Falkland, V.

Glanusk, L.

Wellington, D.

Falmouth, V.

Hanworth, L.

FitzAlan of Derwent, V.

Hardinge of Penshurst, L.

Ailesbury, M.

Goschen, V.

Harris, L.

Bath, M.

Hailsham, V.

Howard of Glossop, L.

Camden, M.

Hambleden, V.

Illingworth, L.

Lansdowne, M.

Hood, V.

Kenmare, L. (E. Kenmare.)

Linlithgow, M.

Hutchinson, V. (E. Donoughmore.)

Lamington, L. [Teller.]

Salisbury, M.

Lawrence, L.

Winchester, M.

Novar, V.

Leconfield, L.

Zetland, M.

Plumer, V.

Leigh, L.

Lloyd, L.

Abingdon, E.

Aberdare, L.

Luke, L.

Bathurst, E.

Abinger, L.

Meldrum, L. (M. Huntly.)

Bradford, E.

Addington, L.

Merthyr, L.

Cranbrook, E.

Aldenham, L.

Mildmay of Flete, L.

Denbigh, E.

Alvingham, L.

Monkswell, L.

Dudley, E. [Teller.]

Ampthill, L.

Monson, L.

Fitzwilliam, E.

Annaly, L.

Newton, L.

Halsbury, E.

Armstrong, L.

O'Hagan, L.

Ilchester, E.

Arundell of Wardour, L.

Oxenfoord, L. (E. Stair.)

Inchcape, E.

Auckland, L.

Ponsonby, L. (E. Bessborough.)

Iveagh, E.

Banbury of Southam, L.

Jellicoe, E.

Biddulph, L.

Rayleigh, L.

Lauderdale, E.

Bowes, L. (E. Strathmore and Kinghorn.)

Redesdale, L.

Lindsey, E.

Remnant, L.

Lucan, E.

Carson, L.

Ritchie of Dundee, L.

Lytton, E.

Clanwilliam, L. (E. Clanwilliam.)

Roundway, L.

Midleton, E.

Russell of Liverpool, L.

Midlothian, E. (E. Rosebery.)

Clifford of Chudleigh, L.

Sackville, L.

Morton, E.

Cornwallis, L.

Saltoun, L.

Mount Edgcumbe, E.

Cottesloe, L.

Sandys, L.

Onslow, E.

Cranworth, L.

Sherborne, L.

Peel, E.

Cullen of Ashbourne, L.

Sinclair, L.

Plymouth, E.

Cushondun, L.

Somerleyton, L.

Rosslyn, E.

Danesfort, L.

Sudeley, L.

Selborne, E.

Deramore, L.

Swansea, L.

Spencer, E.

Desborough, L.

Templemore, L.

Stanhope, E.

Digby, L.

Teynham, L.

Vane, E. (M. Londonderry.)

Elphinstone, L.

Trevor, L.

Yarborough, E.

Fairfax of Cameron, L.

Vivian, L.

Ypres, E.

Fairhaven, L.

Wavertree, L.

Fairlie, L. (E. Glasgow.)

Wemyss, L. (E. Wemyss.)

Bertie of Thame, V.

Faringdon, L.

Wharton, L.

Brentford, V.

Forester, L.

Wyfold, L.

Bridgeman, V.

Foxford, L. (E. Limerick.)

Wynford, L.

NOT-CONTENTS.

Sankey, L. (L. Chancellor.)

Leverhulme, V.

Joicey, L.

Mersey, V.

Kirkley, L.

Parmoor, L. (L. President.)

Marks, L. [Teller.]

Amulree, L.

Marley, L. [Teller.]

Northumberland, D.

Arnold, L.

Meston, L.

Askwith, L.

Morris, L.

Reading, M.

Clwyd, L.

Passfield, L.

Daryngton, L..

Ponsonby of Shulbrede, L.

Beauchamp, E.

Denman, L.

Rathcreedan, L.

Do La Warr, E.

Dickinson, L.

Sandhurst, L.

Grey, E.

FitzWalter, L.

Shandon, L.

Lindsay, E.

Gainford, L.

Stanmore, L.

Russell, E.

Gorell, L.

Thomson, L.

Hastings, L.

Wargrave, L.

Hereford, V.

Hemphill, L.

THE EARL OF PLYMOUTH THE EARL OF PLYMOUTH moved, in subsection (2), after paragraph (b), to insert:—
"Provided always that it shall be the duty of the Central Council in fixing the district allocation to provide that the maximum output thus allowed in any district shall be sufficient to ensure that the production, supply or sale of coal or coke destined for export overseas shall not be hampered or restricted."
The noble Earl said: The Amendment which I now submit to your Lordships is very closely connected with another Amendment which I have put down on Clause 3. The object of both these Amendments is to do what is possible within the structure of the Bill to prevent there being any restriction of the output of coal which is destined for export overseas. I take that as an object with which every member of the Committee will he in agreement. The noble and learned Lord, the Lord Chancellor, when moving the Second Reading of this Bill, laid stress upon the fact that one of its objects was to increase our export trade in coal, and throughout the debates on this Bill in the House of Commons the President of the Board of Trade laid stress upon the same point. My difficulty is this: I am confident that, unless some such provision as that which I have suggested is inserted in the Bill, it will, in spite of the noble Lord's professions to the contrary, have the effect of restricting our export trade, and this will be a very deplorable thing. I think your Lordships are all in agreement with me when I say that the more coal we are able to sell abroad the better for everybody concerned. There will naturally be less competition at home.
An Amendment was moved in another place in this connection which, if it had passed, would have had the effect of entirely exempting coal produced for export from the provisions of Part I of this Bill. It would have exempted that class of coal from the restrictions of quota and price. I want to make it clear that my Amendment does not interfere with the structure of the Bill. I read with great care the speech of the President of the Board of Trade when replying to this Amendment in another place, and although I am prepared to admit that he was able to make some case against the form of that Amend-
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ment—that is against exempting this class of coal from the provisions of Part I of the Bill—I do not think he allayed the fears of those of us who feel that the effect of this Bill, unless it is altered, will be to hamper and restrict our export trade in coal. The President of the Board of Trade said that in his view this Bill was elastic enough and capable of meeting any situation which might develop in our export trade, but I rather fear that this elasticity is more in his mind than actually in the Bill, and I am afraid that the machinery of this Bill is too complicated to be operated with great rapidity, unless we give that machinery every possible help.
Although there are references in Clause 3 to different classes of coal, and the way in which they may be dealt with by the executive board, there is no mention of classes of coal in Clause 2, which is the clause now under consideration; that is, in fixing the allocations for the various districts no reference has been made to class, and no suggestion has been made that the matter of class should be taken into consideration. It may be easy enough to apply the provisions of this Bill to coal which is produced for home consumption, but when we come to export coal matters are very different indeed, and I think it is quite clear that the too rigid application of the provisions as to quota and prices will result in our losing contracts abroad. It is quite impossible to put up the price of coal to the foreigner. You can put up the price in this country and make the consumer pay, but you cannot do it with regard to export coal, because if you do, and the foreigner is not satisfied, he can easily go elsewhere. Therefore I maintain that as it is particularly in this class of coal produced for export that we hope to get an expansion of trade, it is absolutely essential that we should have the greatest possible freedom in dealing with this class of coal.
The position of coal for export is undoubtedly different from that of coal produced for home consumption, and I suggest that it comes very near to madness to control and restrict our coal which is destined for export overseas, when the foreign producers of coal, who are our chief competitors, are not subject to these restrictions. It really is playing into

529
their hands. This is not just a question of world over-production of coal. It is merely a case of handing over to the foreigner markets which have been ours for years past and which we can justifiably look upon as ours, and it is quite certain that if once we lose those markets they will be difficult indeed to recover. I suggest that really the Government have got hold of the wrong end of the stick. Surely, before we start controlling and restricting our coal which is to compete with foreign coal in the world's markets, we should first try to come to some kind of international agreement. Till then we should have as free a hand as possible and as fair conditions as possible.
I am not making these statements at random. They are fully borne out by the facts. Your Lordships know that the position of our export trade in coal at the present moment is as bad as it can be. In South Wales we have a voluntary scheme, which has already been alluded to this evening, in existence. I am not going to suggest that the deplorable condition there is entirely due to that voluntary scheme, but I do say it has seriously aggravated the situation and increased the difficulty. In South Wales we have an annual production of about 50,000,000 tons, and out of that 30,000,000 tons is export. or foreign trade. Therefore I think it is quite clear to your Lordships that in South Wales we are almost entirely dependent upon our export trade.
I know of one company that has had a large contract halved owing to the uncertainty caused by the present Bill. The clients of this company have said that owing to this Bill, which is in the offing and which they believe will in due course become law, they have no confidence that the firm in question will be able to fulfil its contract, and therefore they have given half the contract to them and the other half has gone to some German company. Another company that I know has lost contract after contract in South America to the Germans, owing to the fact that their quotations have been slightly higher than those of the Germans, and these are contracts which we have had in this country for years, and on which the company in question is very largely dependent. I want to make it clear that it is not the coal owners who are chiefly suffering as the result of this. I believe I am
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right in saying that all the pits of the company in question are working at a. small profit; but it is the men who are suffering and who are going to suffer. Some of the principal exporting companies in South Wales are now only working a half week and that means that the men are earning greatly reduced wages indeed, they might almost as well be on the "dole."
I think your Lordships will see from what I have said to what a great extent South Wales is dependent upon its export trade, and how absolutely essential it is that we should have the greatest possible freedom and elasticity in this Bill to deal with this class of trade. For instance, it ought to he made possible to amend quotations if necessary. I understand that this opportunity is very often given by foreign consumers to companies with which they have dealt for a very long time. I hope that the effect of inserting the provision which I have suggested in the Bill will be that, when it becomes evident, during the course of the period for which an allocation is made in a certain district, that that district will be able to sell for export more coal than can be done under their allocation, it will then be possible for the executive board for that district to go to the Central Council and ask them to increase that allocation. With this provision in the Bill it will be incumbent upon the central body to deal fairly with this question. I honestly believe that some such Amendment is really quite essential in the Bill if we are to ensure that there is no unnecessary restriction put upon our export trade. It would be a real disaster, not only for those districts which are chiefly concerned with the export trade, but for the whole country, if that were so, because there would be greater competition at home and greater difficulty in selling the coal. The two points I desire to make in conclusion are, firstly, that this Amendment does not in any way alter the structure of the Bill and, secondly, the object which this Amendment has in view is an object common to all sides of the House.
Amendment moved—
Page 3, line 38, at end insert the said proviso.—(The Earl of Plyntouth.)
LORD THOMSON: I see that the noble Earl has read the reply of my right hon. friend the President of the Board of Trade with as much attention as I have

531
myself and therefore some of my arguments may be familiar to him, because I confess candidly that I am going to use the same arguments as were used by the President of the Board of Trade, with one or two exceptions. My first point is that I think the Amendment is largely met already by the Bill. So far as I am advised, if it is necessary to produce more coal for export a special quota, if necessary 100 per cent., can be applied at once to export coal.
THE EARL OF PLYMOUTH: That is Clause 3.
LORD THOMSON: Yes, that is the application of Clause 3.
THE EARL OF PLYMOUTH: Yes, but Clause 2 is the allocation.
LORD THOMSON: Yes, but the allocation is fixed by the Central Council on the advice of the executive board of the district. Is not that so? The noble Earl may fairly say, if it does no harm, if the Amendment has the same effect as the Bill, why not put it in? But there is this drawback to that course, that, though export coal is a particular class of coal, it is one of many classes of coal; and to give it special treatment in the Bill is considered most inadvisable. I am sure everybody who has thought about this problem has a good deal of sympathy with the noble Earl's argument, but to make it incumbent upon the Central Council is perhaps a little too strong. It the noble Earl would consider some such phrase as "shall take into consideration," it would be different.
THE MARQUESS OF SALISBURY: Will the noble Lord tell me the words in Clause 3 which he relies on? It does not appear in Clause 2, which we are discussing.
LORD THOMSON: Clause 3 (2) (d) says each scheme shall provide
"for the determination at such times and for such periods as may be decided in accordance with the provisions of the scheme, of the proportion (in this Act referred to as the quota) of the standard tonnage which each of the coal mines in the district is to be allowed to produce, so, however, that the scheme shall provide—
And paragraph (iii) goes on:—
"that all quotas shall be so calculated that, during any period for which the district allocation has been fixed by the Central Council, that allocation shall not be exceeded."
VISCOUNT BRENTFORD: That does not help.
THE MARQUESS OF SALISBURY: I understood the noble Lord to say that the Bill really does what my noble friend desired because there was some subsection which provided that in the case of export coal the quota would be fixed at 100 per cent.
LORD THOMSON: That is exactly what I did say. I regret extremely that for the moment I cannot lay my hands on the subsection. In view of my ignorance on that point, if the noble Earl can prove to me that that provision does not exist I will gladly see that his point is met on the Report stage.
THE MARQUESS OF LONDONDERRY: The Amendment does not really lay down anything very sensational, but is more in the nature of a pious opinion. The more active Amendment which my noble friend has down occurs on Clause 3, and I should say that, while the form of the words may not be entirely agreeable to the noble Lord, he might between now and the Report stage find such words as could, if necessary, be inserted in the Bill.
LORD THOMSON: I am quite prepared to accept that.
Amendment, by leave, withdrawn.
LORD VERNON LORD VERNON moved, in subsection (2), after paragraph (b), to insert as a new paragraph:—
"(c) For securing that any price determined by any executive board under paragraph (f) of subsection (2) of Section three of this Act for any class of coal shall be applied equally, irrespective of destination, by that executive board to all coal of that class the destination of which is within Great Britain."
The noble Lord said: This Part of the Bill sets out the regulations for output and for establishing minimum prices, but it will be observed that, whereas the output regulations are laid down both in Clause 2 and Clause 3—that is to say in so far as they affect the central scheme and the district scheme—the minimum price regulations only affect the district scheme. and nothing is said about them under the central scheme. Indeed, paragraph (f) of Clause 3 which lays down this regulation is very vague. The object of my Amendment is to bring the minimum

533
price regulations within the scope of the Central Council in order that they should see that they are fairly applied as between one district and another. The reason why I suggest this is that during the period of very bad trade through which the coal trade has been passing dumping has been extraordinarily prevalent. By "dumping" I mean the selling of coal at "cut" prices, often extraordinarily uneconomic prices, sometimes representing a price at pit-head which is practically nothing at all. That has been going on, and it is just as objectionable in the coal trade as I think it is agreed by everybody to be in international trade. It has been one of the greatest factors in bringing about the cut-throat competition of which we heard so much on Second Reading. It disturbs markets. It disturbs the rational working of the industry, and it is of no real or lasting benefit to the consumer.
The suggestion in this Amendment is really in accord with the intention of the Bill, as far as I can make out. I suppose it is really the intention of the Bill that the minimum prices determined under paragraph (f) shall be pit-head prices, although it does not say so. Any other alternative means that every district must fix delivered prices all over the country at every point to which they deliver coal. Indeed, I noticed last week that the President of the Board of Trade actually said in another place that so far as coal was concerned, this Bill carried it as far as the pit-head. If they are to be pit-head prices surely those prices should be fixed, no matter what the destination may be. It should not be within the power of any district to vary them or to set up differential rates according to where the coal is going; always provided, of course, that it is not export coal for which there are special arrangements and which is, therefore, excluded from the Amendrnent.
It may be said that if this is really the intention of the Bill there is no object in putting this Amendment into it; but I do not think that is clear, and I happen to know that there are people who will have to administer these schemes under the Bill who, at any rate, have not been under the impression that the prices to be fixed were necessarily pit-head prices. Further, if the matter is left
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entirely to the district boards it does not follow that a district board would have any particular interest in seeing that they are observed. In the case that I quoted of the dumping of coal in distant markets by any district, the board of that district would not have any particular object in seeing that the dumping did not go on; in fact, they would be very glad to see their own competitors trying to capture a foreign or distant market.
I submit that it is essential, therefore, that the central scheme shall be such as will give fair play between district schemes in the matter of these minimum prices. It is a rather extraordinary feature that these minimum prices which are so important are not mentioned in any way in the central scheme at all. As they are not in the central scheme, it follows that any district which is aggrieved by coal being dumped in its market at an uneconomic price below the fixed price has only one remedy; that is the remedy in paragraph (h) of Clause 2 (2) of the Bill, which lays it down that a district which is aggrieved can go to arbitration. In such a case as I have suggested, where there has been dumping of coal, I do not quite see what the result of that arbitration would be. The arbitrator might tell the district which had been dumping coal that they were not to do it again, but that seems to me to be about as far as he can go. What is essential in a case of that kind is that there shall be penalties as there are in regard to the output and quota regulations. If the minimum price is brought into the central scheme—that is to say, into Clause 2—then penalties will automatically ensue against any district which contravenes the regulations under paragraph (i).
It should be remembered that these are only minimum prices. They may do a great deal of good in the way of stopping the undercutting at ridiculous prices to which I have referred; but being minimum prices, I do not think they can do anything to force up the price of coal seriously. Many noble Lords dislike the whole idea of a minimum price. Even so, I do not think there is any Amendment on the Paper to delete the part of the Bill which deals with minimum prices. Presumably, therefore, it will go through. In that case it is right, surely, that we should

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say that it is to apply fairly as between one district and another. I suggest that the only way in which that can be done is to bring it into the central scheme on the same basis as the quota and output regulations. I beg to move.
Amendment moved—
Page 3, line 38, at end insert the said new paragraph.—(Lord Vernon.)
LORD THOMSON: The point of this Amendment is as to what is meant by a "class" of coal. A "class" of coal is defined later on in the Bill, in Clause 18 (1), as
"a class determined according to the nature of the coal or of the trade, industry or other category of consumer supplied, or according to whether it be supplied for use in Great Britain or for export to any other country."
In other words, the class of coal is not dependent only on its nature, as, I imagine, the noble Lord would like it to be. He would like to limit the definition of coal to the nature of the coal. But the definition in the Bill extends its class to include the consumer and the destination. That is the basis on which this clause has been framed.
I come now to what is really a practical point. Apparently, in the coal trade and, indeed, in other trades, it is not the custom to charge the same price for the same article to all consumers. If it is suspected that a certain class of consumer can pay a little more that price is demanded. I admit it is rather an astonishing state of affairs but I believe I have described it accurately. The minimum price for a particular class of coal as defined by the noble Lord would restrict sellers to asking, we will say, the same price for coking coal for coke furnaces and for gas concerns. As a matter of fact, I am told that they ask quite different prices from those two different sorts of consumers and the effect of the noble Lord's Amendment would be to limit the definition of a class of coal simply to its nature, and it would interfere with the custom of the trade. I am now speaking as a pure amateur in this matter, but I believe there is a custom of the trade which is extremely widespread, and is accepted by all concerned, sellers as well as buyers, and would in point of fact confer unfair advantages on certain of these buyers at
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the present time. It is a practical point. It is not really a point with which any one unacquainted can deal at all effectively, but that is how the position stands, as I am advised by those best qualified to advise upon the subject, and for that reason I trust the noble Lord will not press his Amendment.
LORD VERNON: The noble Lord has not really met the point that this aims at. I quite appreciate the point about the definition of the class of 'coal and the consumer supplied, but he does not deny that this is intended to fix pit-head prices. The prices to be determined under this paragraph are, I take it, to be pit-head prices. It was stated so in another place last week by the President of the Board of Trade, and, if he starts to work it out he will find that otherwise it will lead almost to absolute chaos. Does he suggest that every colliery district shall fix a delivery price to every destination and for every consumer? If so that is no longer a minimum price at all. It does not mean anything. If the people who are to produce the coal are to fix a price for the coal they produce, then it must surely be a pit-head price, and if it is to be a pit-head price, then, even if the actual wording of the Amendment which I have put down is not quite correct, the point is still there, and that is the geographical distance between different areas.
The area in which I am interested, for instance, is in Lancashire, and in Lancashire we have suffered a great deal from this dumped coal and cut prices. As I have already said, cases have been known where coal has been sold at prices which represented really nothing at the pit-head, and practically only the cost of the transport. It is the geographical question with which I am trying to deal. No district should be able to cut prices, and to have differential prices for areas away from their home market and recoup themselves out of the higher prices which they charge in that home market. That I think must surely be the intention of the paragraph in the Bill. The noble Lord will hardly deny that. If that is the intention, then I say it should be carried out, and I submit it is not carried out under the paragraph as it is at present.
LORD GALNFORD: I do not think the noble Lord realises the effect of this Amendment in the coal trade. It is very necessary to arrange with other colliery owners that certain prices be charged for certain classes of coal. We desire to have as much freedom as possible, and we do not want to be restricted to pithead prices. I realise that what the noble Lord has in his mind is that it is desirable to the Lancashire coal owners that other coal should not come into Lancashire and interfere with the Lancashire trade, but it is essential in the interests of the consumers that they should have the option of getting other coal if they like to do so. Apart from that, if the noble Lord's Amendment were carried it would prevent us making arrangements in connection with our export trade. Most of our coal is sold free on board at our ports, and it is not a question of pit-head prices at all so far as a very large portion of coal is concerned. In other cases we sell c.i.f. delivered to our customers abroad. As long as there is an arrangement among ourselves what is to be the minimum price, whether it is c.i.f. or f.o.b. or pit-head, it is equally effective, and we want the liberty and freedom which this Amendment would take from us.
On Question, Amendment negatived.
LORD GAINFORD LORD GAINFORD moved, in subsection (3), after "The central scheme may provide," to insert:—
"(a) for the collection from the executive boards for the several districts of levies, imposed upon them at such times and for such periods as the Central Council thinks fit in proportion to the output or disposal of their respective districts, for the purpose of facilitating the sale of any class of coal;"
The noble Lord said: This Amendment is one of some substance to which I referred when I addressed your Lordships on Second Reading. I press this Amendment mainly on two grounds. The first is that it is unfair to a large number of districts if the Bill is left with a power to raise a district levy and does not contain the power, which I seek to give by this Amendment, of securing a central levy also. The second point which I want to make is that it is absolutely necessary, in our national interests, that in any negotiations with foreign countries we shall have exactly the same powers to raise a. central levy as they have in competition with us. This Amendment was
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included in the Bill when it was introduced into the other House, but after a long debate it was only thrown out at the instance of the Liberal Party. by a majority 'of eight. The result is the Bill has been left in what appears to me to be an emasculated condition.
I want to make it quite clear how unfair would be a district levy without a central levy. I am interested in Yorkshire as well as in Northumberland and Durham, but I am bound to say, on behalf of Northumberland and Durham, that they regard the Bill in its present form as very unfair to themselves. The County of Northumberland sends 51 per cent. of its coal to foreign countries, and it sends seaborne 31 per cent.—in other words 82 per cent. of the Northumberland coal is seaborne. Therefore, if they were to raise a levy in their district on the home consumer, they would get a very small amount of money with which to subsidise their export trade. Yorkshire, on the other hand, does not export 10 per cent., and its export and sea-borne trade is only 10 per cent. of the total production. They, therefore, can raise by a comparatively small levy on the 90 per cent. of their inland trade a very large sum to subsidise their export trade, or, in other words, they are prepared, if this Bill passes in its present form, to subsidise Yorkshire coal with a levy and take away from Northumberland its whole trade, or a very large portion of it indeed. The Northumberland coal owners and workmen themselves realise that, and feel very strongly on the point that you ought to have a central levy as well as a district levy in order that justice may be done.
But there is another point which I said I wanted to emphasise, and that is the international arrangement. The Ruhr and Silesia both have the power of raising money from their own consumers by increasing the price, and of exporting a very large volume of coal abroad which they are prepared to sell at even less than cost price, gaining the advantage in some cases by very much larger prices charged to their own home consumers. We are in communication with the German and also with the Polish Silesian coal owners with a view to considering whether we cannot come to some better understanding so that, instead of cutting each other's throats where we meet in competition, we in common with the other countries could have certain allocations of the requirements

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of these customers abroad. If we have no power to raise a levy by a central demand on the consumers of this country as a whole we shall lose what is one of the most vital interests of our country—namely, the exportation of coal in large quantities in order to pay for the raw materials and the food which we in this country require from foreign countries. Therefore, the export trade in competition with Germany and with Polish Silesia especially is very important to us.
If we have the power, I do not believe myself that it will be really necessary to exercise it, but on this point I should like if I may to read one or two passages from the Deutsche Bergwerks-Zeitung. That paper, in its issue of April 29, says in a leading article dealing with this question:"
"The British Coal Mines Bill will soon be passed. … This will enable the British mining industry to establish district syndicate arrangements on a better and more solid basis than has hitherto been possible."
It goes on to say:—
"It is sufficient to point out that in important circles in the British coal mining industry, strong efforts are being made to arrange for an inter-district levy with the help of which it would he possible to establish a fund for the subsidising of British coal exports. … It is clear that with the help of such a subsidy the British coal industry could very easily overcome the competition of other countries."
In other words, the Germans are afraid of our having this power because they think we would be able to make better terms in regard to the amount of coal which we export. On this ground I do think there is a strong case for the reinsertion of the clause giving this power —I do not believe, as I say, it would be very much exercised—to raise a central levy in order to place us on an equal footing with our competitors abroad. I have therefore great pleasure in moving the Amendment.
Amendment moved—
Page 5, line 1, after ("provide") insert the said new subsection.—(Lord Gainford.)
THE EARL OF LINDSAY: I rise to offer the most strenuous opposition I can to the Amendment that has just been moved by the noble Lord. I hope the Government will resist this Amendment. What the noble Lord really is trying to bring before your Lordships is the fact that Northumberland and Durham have such
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a very small inland sale of coal that any levy raised upon it would have very little effect upon them. The exporting districts, up to now, I would remind your Lordships, have always managed to conduct their export trade without a subsidy and have taken a world price for coal in competition with foreign exporting countries. The position in Yorkshire is entirely different. Before the War, as the noble Lord has pointed out, Yorkshire only exported about 10 per cent. of its total output. Since the War that had increasingly diminished until in 1927 we only exported 2,000,000 tons. With the assistance of the five-counties scheme, however, we have now managed to improve on that export trade to the extent of 7,000,000 tons.
The implications of this Amendment are very important. The real point is one of sale proceeds and wages. If a central levy is made it will mean that the coal owners and the mine workers will be deprived of any advantage that they would obtain under the marketing provisions in Part I of this Bill. They will have to hand them over to the exporting districts of Northumberland, Durham, South Wales and even Scotland. If coal mining is successful in the five-counties area it will increase the proceeds of the sale of coal, and under an agreement entered into, as many of your Lordships know, any advantage goes to the extent of 85 per cent. to the miners and 15 per cent. to the coal owners. Therefore such a proposition as the noble Lord, Lord Gainford, has made, would mean in effect that the wages of the mine workers would be raided by this levy as well as any increased advantage that the owners might derive.
Each district in this country up to now has always had to provide for and stimulate its own export trade. Furthermore, the exporting districts have since 1926 been working generally eight hours a day, which is a great advantage as compared with Yorkshire. In addition to that, they have had the advantage of the fact that the standard of wages in Northumberland and Durham is considerably lower than that in Yorkshire and under the five-counties scheme. Therefore I say that the Midlands will be severely handicapped and I hope the Government will resist this Amendment.
LORD JOICEY: I must support my noble friend Lord Gainford in this matter. It is a vital point both to Durham and Northumberland. No doubt the coal owners in Yorkshire are in a specially favoured position. At present they have a 7½-hour day while in other places they have been working more. Why? Because they have new pits, good seams that they can work much more economically and they are in a position to increase their output very considerably. If they put, as my noble friend says, a tax of 3d. upon the home consumers it gives them about 2s. 3d. a ton to deal with in competition with other exporters. I have not the slightest doubt in my own mind that unless this question is dealt with it will simply mean that instead of fighting, as we want to fight, the foreign exporter, we shall be fighting each other, and unfortunately Durham and Northumberland will not be able to fight successfully against the specially favourable position in which Yorkshire stands at the present time.
I cannot help thinking that when you pass a measure of this kind one object which you should have in view is to see that it is fair to all parties? How can you say that there is anything fair in connection with the scheme which has been put forward by my noble friend in favour of Yorkshire? Look at the large number of people who are interested in this question. It is not confined to the miners of Durham or Northumberland. It extends to the whole district represented by Northumberland and Durham. I see in his place my noble friend who is Chairman of the River Tyne Conservancy. I should like to ask him how he would like to have the export trade of Tyneside cut down by the Yorkshire people in the way that is proposed if we do not get this Amendment. I am certain that it will have effects upon Durham and Northumberland far more disastrous than people realise. I hope that, whatever the Government do, they will protect Durham and Northumberland from the unfair competition, which is brought about by their own Bill to a large extent, in connection with the export trade.
I think a very strong feeling will be created against the Bill if this Amendment is not accepted. So far as I am concerned—and I think this probably
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holds good of many of your Lordships-1 do not like this Bill. But you may depend upon it that, unless certain Amendments are passed, you will find that there will be very strong opposition, even to the point of moving the rejection of the Bill on the Third Reading. So far as I am concerned—and I am not speaking for any organisation in either Durham or Northumberland, but am simply representing my own views—I prefer doing without the Bill altogether unless this Amendment is accepted. There are other Amendments with which we shall have to deal, which I hope the Government, in the interests of their own child, will try to meet in a reasonable way. I hope that they will meet the views that we put forward, when we are making such great sacrifices in accepting a Bill which we so much dislike.
EARL RUSSELL: This Bill and the industry with which it deals are so difficult and complicated and the questions involved are so full of snags that one cannot help feeling that one ought to walk very warily. Indeed, in addressing your Lordships on any of these technical points I feel a little like a schoolmaster who is only one lesson ahead of his class, coupled with the fact that in the class are a great many experts who are a long way ahead of the master. Accordingly one has to be very careful. This export question is a very interesting one. The noble Earl, Lord Plymouth, moved an Amendment just now which was designed to make sure that the export trade was protected. I am sure that it was admirably worded for that purpose. He said at the end of his speech, as is quite true, that we all agree that we should be willing to do anything we could to promote and increase our export trade. That is clearly of the first importance.
This central levy which has been suggested is rather intimately connected with that point. Earlier in the evening, when we were discussing the powers of the Central Council and the making of schemes and so on, it was suggested by one noble Lord (I forget at the moment who it was) that we might make our international agreement first and our regulations and quota schemes afterwards. The answer to that I think I can understand, and I believe I am right about it. Who is there that can make an international agreement for the coal

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trade of this country? There is no body that can do it. There is no body that can speak for the coal trade of this country or make an international agreement with any prospect of success or of having it observed in this country.
Once you have the coal trade unified, so to speak, and under one hand in the form of a Central Council, you are in a position to go to foreign countries and you have behind you some possible support for the export of coal, either by a district levy or by what is probably quite as suitable a system—namely, a, central levy. Then you can go to a foreign country and say: "Unless we get some share of the business we are in a position to deal with the situation and to undersell and undercut you." That is the way that business is obtained, not as a matter of kindness but as a matter of bargaining and of price; and that I understand to be the real international importance of this scheme. But you cannot get an international agreement unless you have some such body or some such scheme as the central levy, which would possibly give you an instrument that would be very powerful to bargain with. I understand also, though not so clearly, that there are differences between the conditions of the various coal areas in this country and that, as your Lordships have already seen, some take one view and some another. What, of course, the Central Council or whoever is responsible would have to consider would be the balance of advantage.
LORD DARYNGTON: I should like to say one word in reference to that which the noble Earl has just said. The reason why there is a difference of view between the different coal areas of the country is quite simple. It is the reason given by noble Lords in, the last two or three speeches. It is very difficult to say exactly how a tax affects coal. I remember that years ago in the House of Commons, when the export tax of is, was put on coal, the miners said that they paid it, the owners said that they paid it, the shipowners said that they paid it, and the consumers said that they paid it. It is very difficult to say who pays a tax. This is a very important matter from the point of view of Durham and Northumberland, for the simple reason that in Northumberland something like 75 or 80 per cent. of the coal is seaborne,
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and in Durham about 46 per cent. It is also very plain that, if this Bill passes in its present form, there will be a very considerable increase in the cost of production of coal. In order, therefore, to keep up our exports to anything like their present level, it is necessary to have some sort of central levy, and I hope very much that the Government will consider that point.
LORD MELCHETT: The noble Earl who spoke from the Government Bench seemed to make a very sympathetic speech in reference to the Amendment of the noble Lord. He pointed out very clearly what its effect would be, and that a central levy is essentially important from the point of view of an international agreement, which I take it the Government favours. Incidentally, I think he sat down without telling us whether the Government would accept the Amendment or not. That is what we should really like to know. The history of this matter is well worth recording. The original scheme included a central levy. It was, I suppose, in the minds of those who framed this very elaborate scheme that the central levy was an essential part of it. Apparently the central levy was deleted in the House of Commons because certain people did not like any levy, but inconsequentially they did not delete the district levy, as they ought to have done if they do not like levies. The result is that the scheme is left in the most absurd position of having no central levy and a compulsory district levy. Many of us feel that you should have either both or none.
Personally I think I agree with Lord Gainford. After all, South Wales is in a very similar position as regards export. We have no great home market hinterland to build upon, like Yorkshire, in order to help our export of coal. If we had, why should we export at all? But, if you have a central scheme, you must equalise these conditions. You cannot possibly leave the thing in the illogical position in which it rests at the present time. I take it that the whole upbuilding of this scheme, if it has any purport, is designed to lead to some international arrangement. Such an arrangement will undoubtedly come about. To-day nobody engaged in any big industry ever thinks in any other terms than those of international arrangements, because it is the only way in which you can conduct

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business. We are already sufficiently hampered in this country in our international arrangements by the terrible system of no tariffs. That has always hampered us very much, for we have nothing to give away. We have had very few big sticks to flourish. What my noble friend wants is a thick stick, with which to threaten, if not, perhaps, to hit with, behind him, and I hope we shall give it to him for the ultimate benefit of the whole of the coal industry. I think we should deal with this matter not sectionally but nationally.
THE MARQUESS OF SALISBURY: I quite agree with my noble friend who has just sat down that the Bill, as it has reached this House, is in the last degree. illogical, because there was, as has been said, in the Bill when it was introduced in another place a central levy and a district levy. The two branches of the Opposition, the Liberal Party and the Conservative Party, combined to induce the House of Commons to strike out the central levy. Then something happened. None of us quite know what did happen, but something happened, under which the Liberal Party found at any rate to a certain degree salvation, and were persuaded no longer to oppose the Government Bill, and consequently when the district levy was reached, although logically, and I might almost say consequentially, the district levy ought to have followed the fate of the central levy, it was left in the Bill and it has now reached this House. Personally, I can have no doubt whatever as to the course which I should pursue, and which I think most of my friends will pursue, in this matter. We quite realise the great difficulties in which the export trade stands, but to bountify the export trade is an immense departure from received British traditions.
LORD DARYNGTON: So is the Bill.
THE MARQUESS OF SALISBURY: I agree, but there is no reason why we should make it worse than it would be. Actually to bountify the coal trade at a moment when we are protesting against the Germans sending bounty-fed corn into this country is an inconsistency which it is almost impossible to defend. Let me recall in one or two words all that we urged when the Second Reading discussion was before your Lordships. We pointed out how grievously British
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industry was suffering at the present moment. The British coal industry is suffering. The great steel industry is suffering. Are you going to lay an extra burden upon them? That is what is proposed by this Amendment. In order to help the export of coal we are to lay an extra burden upon the great staple industries of this country. I am sure none of us ought to countenance such a course. We know from countless inquiries and reports that British industry cannot stand any more burdens, and I cannot assent to adding to them by this central levy.
LORD THOMSON: The idea of a central levy has always been favoured by the Party to which I belong.
THE MARQUESS OF SALISBURY: Not always. It used to be Free Trade.
LORD THOMSON: I will come to that in a minute. The only occasion on which the Government was defeated in the House of Commons was on this particular question of a central levy. I am not referring to the highly honourable and desirable arrangement come to later for the benefit of the country. There was one point in the speech of the noble Marquess to which I would like to refer at once. Does he really think that a levy raised by the industry within the industry is the same thing as a Government bounty? This is a, levy to be raised within the industry by the industry and not a levy to be raised within the industry by people outside dictating to the industry.
THE MARQUESS OF SALISBURY: To be paid by the consumer, of course?
LORD THOMSON: It is a levy by the industry within the industry, to be fixed by the coal owners who ought to know their trade if any one does, and I submit that the noble Marquess ought to revise his description of "bountified," because it is a vastly different proposition from a Government bounty. The Labour Party have favoured a central levy for two excellent reasons: (1) It puts us on a level with the foreigner.
LORD MELCHETT: Hear, hear. Protectionist !
LORD THOMSON: The noble Lord has also changed his views on that subject, but undoubtedly it is the fact that in foreign countries the internal trade supports the export trade, and if we follow

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that example, whatever principle may be involved, I think my statement remains true that we are putting this country on a level with its foreign competitors. The other point is that it is not a question of cheap coal to the foreigner. That was dealt with very ably by Lord Onslow in his speech on derating, if I remember aright. He there said it was a great mistake to suppose that the great bulk of British coal exported abroad went to competing industries. I do not want to labour the point, because there may be a variety of opinions upon it, but at the same time I think it is true to say of the Bill that in its early effects it will not give the foreigner cheap coal, and that if we improve our foreign export trade we shall prevent competition by exporting coal concerns with the coal concerns that cater for the home market, and there again the general public in this country will largely benefit. I have reserved for myself the pleasing task of accepting an Amendment, and I propose to do so now, and I sincerely trust the House will not be put to a Division.
THE EARL OF MIDLETON: I only ask for one moment in which to make a protest against the course taken by the Government. From one point of view I am very glad that the noble Lord opposite is gradually seeing the light, and is coming through bounties to some idea that absolute Free Trade is not practicable in the relations of this country with foreign countries, but I do protest that if your Lordships are going to vote for this Amendment you should consider this point, that while a very strong case has been made for the Counties of Durham and Northumberland, where undoubtedly there is a very large export trade and a, very small amount of coal on which the levy can he made, you are going heavily to penalise the Yorkshire mines, which, by reason of their distance from the coast, are unable to compete on
equal terms with those of Durham and Northumberland. The coal owners there will have an amount put upon them which, in addition to the difficulty already made by the Bill, will undoubtedly highly prejudice the Yorkshire coal trade. I think your Lordships would be taking a most retrograde step if you followed the advice of the noble Lord opposite, and I urge your Lordships to follow the advice of the noble Marquess.
EARL RUSSELL: The speech of the noble Marquess surprised me very much, and I should like to say a word in answer to it. The difficulty in this Bill really arises from the multitude of coal owners. In consequence you find in it a word like "levy" which suggests a tax, or impost, or something extra. But let the noble Marquess suppose that the whole coal industry of this country was in one hand, say of some gigantic American trust, and that it was necessary for the industry to sell the whole of its coal at an average price, let us say, of 20 s. a ton. What is there improper in that one hand that controls the industry selling some of its coal at 22 s. and some at 18 s. in order to capture the market? That is all that is really meant by a levy. It is really because there are a number of different owners, between whom you have to equalise things. But if the whole thing were in one hand, naturally the people who controlled it would say: "Very well, if to compete abroad we have to sell at 18 s., we will sell at 18 s.; and if we can get 22 s. at home to balance it, very well, we will get 22 s. at home." I cannot, see anything unreasonable in that simple process when you translate it into the complications of a central and district levy in this Bill.
On Question, Whether the proposed words shall be there inserted?—
Their Lordships divided: Contents, 35; Not-Contents, 82.

CONTENTS.

Winchester, M.

Ampthill, L.

Hastings, L.

Amulree, L.

Joicey, L.

De La Warr, E.

Armstrong, L.

Kirkley, L.

Grey, E.

Arnold, L.

Luke, L.

Midlothian, E. (E. Rosebery.)

Auckland, L.

Marks, L. [Teller.]

Rosslyn, E.

Brancepeth, L. (V. Boyne.)

Marley, L. [Teller.]

Russell, E.

Cranworth, L.

Melchett, L.

Daryngton, L.

Meston, L.

Chaplin, V.

Dickinson, L.

Ponsonby of Shulbrede, L.

Cowdray, V.

Faringdon, L.

Sandhurst, L.

Leverhulme, V.

Gainford, L.

Thomson, L.

Mersey, V.

Gorell, L.

Trenchard, L. Weir, L.

NOT-CONTENTS.

Beaufort, D.

Brentford, V.

Fairlie, L. (E. Glasgow.)

Rutland, D.

Bridgeman, V.

Fitz Walter, L.

Somerset, D.

Elibank, V.

Forester, L.

Wellington, D.

Falkland, V.

Foxford, L. (E. Limerick.)

Falmouth, V.

Gage, L. (V. Gage.) [Teller.]

Bath, M.

FitzAlan of Derwent, V.

Hampton, L.

Camden, M.

Goschen, V.

Harris, L.

Lansdowne, M.

Hailsham, V.

Howard of Glossop, L.

Linlithgow, M.

Hereford, V.

Kenmare, L. (E. Kenmare.)

Salisbury, M.

Hood, V.

Lawrence, L.

Zetland, M.

Hutchinson, V. (E. Donoughmore.)

Leconfield, L.

Leigh, L.

Bathurst, E.

Novar, V.

Meldrum, L. (M. Huntly.)

Bradford, E.

Mildmay of Flete, L.

Cranbrook, E.

Abinger, L.

Monkswell, L.

Dudley, E.

Addington, L.

Oxenfoord, L. (E. Stair.)

Iveagh, E.

Alvingham, L.

Rayleigh, L.

Lauderdale, E.

Annaly, L.

Redesdale, L.

Lindsay, E.

Arundell of Wardour, L.

Ritchie of Dundee, L.

Lucan, E. [Teller.]

Clanwilliam, L. (E. Clanwilliam.)

Russell of Liverpool, L.

Midleton, E.

Sandys, L.

Morton, E.

Clifford of Chudleigh, L.

Sinclair, L.

Onslow, E.

Cushendun, L.

Somerleyton, L.

Peel, E.

Deramore, L.

Templemore, L.

Plymouth, E.

Desborough, L.

Trevor, L.

Stanhope, E.

Digby, L.

Vernon, L.

Vane, E. (M. Londonderry.)

Ebbisham, L.

Wavertree, L.

Ypres, E.

Fairfax of Cameron, L.

Wester Wemyss, L.

Fairhaven, L.

Wharton, L.

Bertie of Thame, V.

On Question, Amendment agreed to.

LORD THOMSON: There is a drafting Amendment here in subsection (4).
Amendment moved
Page 5, line 22, leave out ("shall") and insert ("may").—(Lord Thomson.)
Clause 2, as amended, agreed to.
[The sitting was suspended at eight o'clock, and resumed at half past nine.]
Clause 3:
Provisions of district scheme.
(2) Every district scheme shall further provide for the following matters—
(c) for the determination, at such times and for such periods as may be decided in accordance with the provisions of the scheme, of the standard tonnage of every coal mine in the district in respect of coal and, if it is so decided in accordance with the provisions of the scheme, in respect of any class of coal, so, however, that the method of determination shall be specified in the scheme; and shall be such a method as will insure that, for the purpose of the determination, regard shall be had to the special circumstances of every coal mine, including the efficiency and economy of the working of the coal mine, the extent to which it has been developed, the extent to which its output has been increasing or decreasing, and, in the
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case of the first determination, the proportion which the output of the coal mine bore to the output of the district during some recent period during which no arrangements made by a voluntary association or otherwise were in force regulating the output of any substantial number of coal mines in the district;
(d) for the determination at such times and for such periods as may he decided in accordance with the provisions of the scheme, of the proportion (in this Act referred to as the "quota") of the standard tonnage which each of the coal mines in the district is to be allowed to produce, so, however, that the scheme shall provide—
(iii) that all quotas shall be so calculated that, during any period for which the district allocation has been fixed by the central council, that allocation shall not be exceeded;
(e) for enabling arrangements to be made by the owners of coal mines in the district, whereby the output of coal or any class of coal from any such mine may exceed the quota fixed for that mine, as respects coal or that class of coal, so long as the output of coal or that class of coal from some other mine in the district is lower than the quota fixed for that other mine, as respects coal or that class of coal, by an amount not less than the excess;
(f) for the determination, at such times and for such periods as may be decided in accordance with the provisions of the scheme, of the price below which every class of coal produced in the district may not be sold or supplied, and for securing

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that the actual consideration obtained by the sale or supply of the several classes of coal shall not be less in value than the price so determined;
(g) for the collection by the executive board from the owners of coal mines in the district of levies, imposed upon the several owners in proportion to the output or disposal of their respective coal mines in the district, for the purpose of defraying the expenses of the executive board and any penalties imposed on, or levies payable by, that board under the provisions of the central scheme;
(k) for the production to and inspection by an accountant authorised by the executive board for this purpose of books and accounts relating to any coal mine in the district and for the submission by him of a report to the executive board;
(3) A district scheme may further pro-vide—
(b) for empowering the executive board, subject to the consent of the central council, to collect from the owners of coal mines in the district levies, imposed upon them at such times and for such periods as may be determined in accordance with the provisions of the scheme in proportion to the output or disposal of their respective coal mines in the district, for the purpose of facilitating the sale of any class of coal produced in the district;
LORD CLWYD LORD CLWYD moved, in paragraph (c) of subsection (2) after "including" ["circumstances of every coal mine, including"], to insert "the continuance in their employment of the number of mine workers employed at the coal mine." The noble Lord said: There are a very large number of Amendments to be dealt with and I will be very brief in moving this one. As the Committee will remember, Clause 3 deals with the provisions of the district schemes, their machinery and their powers. Every scheme has to provide for certain matters—first, for the appointment of the necessary officers, secondly, for the determination of the class to which the coal produced in the district belongs, and, thirdly, for the determination of the standard tonnage of every mine in the district. Subsection (2) of Clause 3 sets out the various considerations to which regard must be paid in the determination of this point—namely, the special circumstances, the economy of the working of the mine, the extent to which it is developed, the extent to which the output has been increasing or decreasing, and, lastly, the relation of its output to the output of the district.
The object of my Amendment is to add another consideration which shall be regarded in the process of determining the standard tonnage and that consideration is the number of mine workers employed in the mine. The purpose of the insertion of these words is not to provide for any compulsory number of men employed in the mine, because that would be altogether impracticable and unworkable. All my Amendment seeks to do is to add this point, that the number of men usually employed in the mine is a consideration which ought to be within the ambit of the regard which is paid to the various considerations set out in paragraph (c). No one will be surprised to hear that there is considerable anxiety in regard to the possibility that fixing the standard tonnage in certain mines may result in somewhat large dismissals of men, and the object of my Amendment is to ensure that, under the process of determining that standard tonnage, the point with regard to the number of men employed in the mine will at all events have consideration at the same time as the other considerations to which I have alluded. I have little doubt that not only the Government but the House generally will view with sympathy the object, at all events, which the Amendment has in view, and without further delaying your Lordships in explaining the grounds upon which I move it, I beg to move.
Amendment moved—
Page 6, line 12, after ("including") insert ("the continuance in their employment of the number of mine workers employed at the coal mine.")—(Lord Clwyd.)
LORD MARLEY: I am sure that every member of your Lordships' House will sympathise with the object of this Amendment, but I suggest that it does not attain the object 'which the mover has in view. This Bill is not a Bill to restrict the output of coal, but to regulate it, and the total output of coal will not, in fact, be appreciably altered; so that there should be no unemployment resulting from the Bill. What may happen is that the less efficient pits may tend to become less occupied and, therefore, in those pits there may be less employment. But the production will be transferred to more efficient pits where there will be more employment. In that connection the Bill already provides that account shall be taken, in allocating the standard

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tonnage, of the growth or decrease ox the production of a pit. Therefore, instead of considering the mere static number of workers employed, they will be considering the increase or decrease in the number of workers employed as shown by the increase or decrease in the amount of coal raised by the pit. I suggest, therefore, that in point of fact the Amendment is not necessary, but that the spirit of the Amendment is already included in the Bill in the arrangements for the determination of the standard tonnage. I hope the noble Lord will accept that explanation.
THE EARL OF HALSBURY: I did not intend to raise my voice in this debate except on a perfectly innocent Amendment which may come later. But I should very much like to know what the spirit of a static employment in a mine means, because I do not know what it means. Nor do I know why, in the name of creation, it should be said that because one mine does not pay it is a necessity that the people who are out of employment in that mine should get employment in another mine, which happens to be paying, but is not necessarily paying any better than it was before. Is it to take more people in when it cannot employ them? Is the other mine to try to carry on? I should like an explanation because I do not know.
LORD MARLEY: Let me attempt to explain that. The idea of this Bill is to make production more economic; that is to say, we are hoping—I express regret at having to go away from the actual wording of this Amendment—that the quota system will secure a gradual increase in amalgamations by less drastic methods, perhaps, than by compulsory amalgamation; by the method which has actually been used with great success in Westphalia; that is to say, the application of a quota to encourage amalgamation. Amalgamation really means a concentration of production in the more efficient pits and the closing down of the less efficient pits. If this Amendment were carried that movement towards the concentration of production in the more efficient pits would be virtually stopped. We want more efficient production. We want the gradual transference of quotas from the less efficient to the more efficient pits, and we do not want to have the
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movement held up by an Amendment such as this which, in point of fact, will not carry out the spirit of the mover of the Amendment, because in any case employment is safeguarded by the fact that we are not restricting production; we are simply regulating it.
LORD CLWYD: After the information which has been given on behalf of the Government, I will not trouble the Committee with a Division.
Amendment, by leave, withdrawn.
LORD GAINFORD LORD GAINFORD moved, in paragraph (c) of subsection (2), after "developed," to insert "or should be developed for economic working." The noble Lord said: The Amendment I now move is to meet a case where a colliery is being developed. These are words which are essential in the interests of certain collieries. For instance, in Yorkshire there are very deep seams where it would take a long time to develop a large coalfield underground, and the only justification for the capital which is sunk in a colliery of that kind is to secure an economic output. In the course of the development of a colliery such as Hatfield near Doncaster, or a colliery in which I am interested called Thorne, the development is comparatively slow for the first few years after reaching the coal seams at more than half a mile below the surface of the ground. In the case of Thorne, after nearly two years of developing and driving roads through what is termed the pillar of coal, which has to be left intact round the shaft in order to prevent the loss of coal permanently to the nation, it is necessary to obtain for a time only a small portion of the coal. The proper way of working a mine is to go through a large portion of the coalfield towards the extremity and then work back to the shaft gradually by pillar working, or the long face system.
In the case of Thorne, we have reached the position of developing the colliery up to about 3,000 tons a day. We hope by next year to produce something like 4,000 tons a day, and in the following year we hope to obtain 5,000 tons per day. By that time the colliery will have become an economic one, and eventually, we hope, a profitable one; but if no regard is going to be had to the proper economic development of the colliery, it is obvious that this colliery, which would

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be one of the most economic in the country, will be prejudiced. Therefore it is essential that between colliery and colliery justice should be done to the collieries which are not fully developed, but are in a condition of increasing development. I propose that the words standing in my name should be inserted in order to meet a case which has arisen, and no doubt will continue to arise in the future. I beg to move.
Amendment moved—
Page 6, line 15, after ("developed") insert ("or should he developed for economic working").—(Lord Gainford.)
LORD THOMSON: The concluding words of the noble Lord's remarks on this Amendment force me to repeat what I have said several times in the course of these debates—namely, that the period for which this Part of the Act is going to operate is only to December 31, 1932. The period of two years to which the noble Lord refers is really not pertinent to the argument. I quite appreciate the point of his remarks, and their applicability to a certain special case, but the effect of this Amendment would be that the body charged with taking into account definite factors in regard to mines would also be obliged to pass an opinion as to whether the mine ought to be developed. That is not a matter upon which definite facts can be adduced. It is largely a matter of opinion, of conjecture, and it would put this body in the very difficult position of expressing an opinion on a state of affairs on which they really have not got all the facts before them. It would indeed put them in the position of being prophets and therefore without honour in their own district. They would have to prophesy as far as they could as to whether a certain mine should or should not be developed. That is the undesirable part about this Amendment.
I believe I am correct in saying that the noble Lord's point will be met by a provision in the Bill which lays down that there shall be periodical revision of standard tonnage, which will enable them to be varied as the condition of the mine varies. It seems to me therefore that the noble Lord's point is met in so far as it is not undesirable. There is another provision in the Bill which deals with the position when output has been increased. That is in the same
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clause in the Bill. It seems to me that every point which the noble Lord desires to raise is met already by the Bill except the one by which he would attempt to impose upon this body the duty of fixing standard tonnage on a definite basis, to ask them to prophesy in the case of any particular mine that had not been developed. I therefore trust that the noble Lord will not press this Amendment.
THE MARQUESS OF LONDONDERRY: I think there is more in the Amendment of the noble Lord than the noble Lord, Lord Thomson, has said. He has fallen back on what has been said on more than one occasion when this Bill has been under discussion, that there are changes to be made in a very short time and therefore there is no need to put in Amendments of this description; but I think what the noble Lord does not realise is that this Bill involves vast changes and it is quite impossible when these changes are made that they should be set aside in a comparatively short space of time. As the noble Lord knows, there are many developments in different parts of the country which come under the Amendment moved by my noble friend. I think these are words which really cover a great many undertakings in all parts of the country, and I hope that the noble Lord will accept the Amendment. The noble Lord has spoken of the undertaking with which he is closely connected. It is one of those vast enterprises which would never have come into being at all if it had been worked under the system so pointedly put forward by the noble and learned Lord on the Woolsack in his speech on Second Reading. I should be unwilling to state exactly the money which his colleagues have invested in this great undertaking. I do feel that for the benefit of the undertaking of which he is one of the promoters some such words as these should be inserted in the Bill, but I should have thought that the words would have been more applicable if the Amendment had read "is being developed for economic working" rather than "should be developed."
LORD GAINFORD: The words in my Amendment are, I acknowledge, my own. I do not pretend to be a Government draftsman and they may not be the best. I should like to tell the noble Lord in

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charge a the Bill that if he had even the technical knowledge I have it would have been quite impossible for him to make the speech that he made. The position is not one of speculative development at all. You drive, let us say, through 400 yards of coal roadways in coal measures, and you then find a quarter of a mile from the shaft a seam absolutely intact all the way round. It is then only a question of gradually extending your operations round the circle of coal outside the solid pillar protecting the shafts until you get more coal. Until you have an economic output in the colliery—that is, the amount that can be drawn up the shaft—it means an expenditure of capital on very expensive machinery and appliances until you reach your output of, say, 5,000 tons a day. It is not until that output is reached that you have a perfectly up-to-date colliery. If you are going to restrict output by a quota based upon past tonnage, you are not going to give that colliery a chance to develop in the proper way. I hope I have made my point clear. I feel that this Amendment ought to be inserted in order to secure the proper economic development of our coal mines.
LORD THOMSON: I need hardly say that I do not pretend to any detailed knowledge of the working of coal mines, and I am quite prepared to accept the noble Lord's Amendment in the manner in which the noble Marquess proposes to amend it, if that will meet the noble Lord's view.
LORD GAINFORD: I am much obliged to the noble Lord.
Amendment, by leave, withdrawn.
Amendment moved—
Page 6, line 15, after ("developed") insert ("or is being developed for economic working").—(Lord Gin ford.)
LORD CLWYD LORD CLWYD moved to leave cut of paragraph (c) of subsection (2) all words after "some recent period." The noble Lord said: My Amendment proposes to omit the qualifications placing the voluntary association out of bounds, so to speak, in the process of determining the standard tonnage, and I will state very briefly my reasons for proposing it. The point at issue relates to a dispute internal to one or two districts in the coal trade
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between pits that are in voluntary schemes and these that are not. The words as they stand in the Bill seem to me to be so drafted as to favour the pits that are not in voluntary schemes by making the independent pits, which are not in voluntary schemes, go back to a previous period for the determination of output. I have nothing whatever to say against those pits which have made arrangements by way of voluntary associations. They have done so because they were of opinion that it was desirable in their own interests to do so. They had a perfect right to enter into these voluntary associations, but at the same time I think we ought to remember that the coal undertakings which did not decide to enter into the voluntary associations had equal rights.
They did not enter into these voluntary associations because they felt that it would not be advantageous to them to do so, and the object of my Amendment is that in the process of reaching the standard tonnage there should be no distinction between these two classes of pits. It seems to me rather unfortunate that by these words in paragraph (c) the Government appear in this Bill to take sides in this dispute between the two classes of pits. It seems to me that the fairest result would be obtained by relating the standard tonnage not to any far-off period of years ago, when conditions were different from what they are to-day, but to the most recent times. To go back several years, beyond the voluntary association period, it seems to me in many cases may possibly create artificial results, and that will not be in the public interest. Upon the ground that I think it is on the whole the fairest arrangement that in fixing the quota all these pits should be placed upon exactly the same footing, I beg to move my Amendment.
Amendment moved—
Page 6, line 19, leave out from ("period") to the end of line 23.—(Lord Clwyd.)
LORD THOMSON: I am afraid that the Amendment moved by Lord Clwyd strikes directly against one of the purposes of this clause. I may as well be quite frank. I think I am stating the position of the Government correctly when I say that we do want to take sides in this matter, and to deprive the pits which stood outside the voluntary schemes of any advantages which they

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gained under artificial conditions. It is an admitted fact among coal owners that the success of those voluntary schemes was in many cases gravely impaired by the fact that certain pits stood outside, and now that we are getting a Bill in operation we want to relate it to a normal period, even if it is some distance back—to a period when everybody was working on equal terms, and one set of pits by standing outside the scheme sought to reap an unfair advantage.
It is not as though under this Bill pits situated as described by the noble Lord are entirely without redress. If the noble Lord will look at Clause 3 subsection (2) (c) he will see that there are other considerations mentioned which are to be taken into account in fixing standard tonnages. I think it is a matter of common equity, and indeed will appeal to the sporting instincts of everybody,' that now that the voluntary schemes are becoming compulsory they should not get an unfair advantage because they stood outside the schemes in difficult days. I think Lord Melchett described those people as nuisances, and that is the attitude of the Government and the attitude which the Bill takes with regard to that particular sort of person. It would be very difficult to get this through and I sincerely hope that the noble Lord. Lord Clwyd, will not press his Amendment.
LORD CLWYD: I will certainly not press the Amendment after what the noble Lord has said.
Amendment, by leave, withdrawn.
LORD MELCHETT LORD MELCHETT moved, after paragraph (d) (iii) of subsection (2), to insert:
"Provided that in determining the quota with respect to a coal mine which is owned or controlled by a manufacturing or industrial company or undertaking the coal which is supplied, whether as coal or coke by that coal mine to that company or undertaking for consumption in the works of that company or undertaking shall not be included in either the standard tonnage or quota of that mine."
The noble Lord said: Although the language of the Amendment is naturally somewhat involved, the object of it is fortunately fairly simple, and in itself the whole problem is one of difficulty but of great importance. Perhaps one weakness of the Bill as it stands and of its conception is that it conceives the coal
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industry merely in the phase of a horizontal integration. It seems to me to overlook the very serious problem of the vertical integration. The horizontal integration means merely amalgamation of collieries with collieries, and treats coal as a separate item; but in the very important problem of vertical integration collieries become only a part, though perhaps a very important substratum to other industries, such, for instance, as steel, pig-iron. and possibly many other developments, of which oil from coal may become not one of the least important in the not very distant future.
Therefore it is important that the question of vertical integration should not be overlooked, and as the Bill is drafted now, I think myself—and those with whom I have consulted are of that opinion—that the vertical integration is endangered. An undertaking may have acquired complete control of a colliery with the object of supplying itself. It may have bought because that particular quality of coal may be of very vital importance to it in its manufacture. I am thinking of the case of a company with which I am connected, which deliberately bought a certain anthracite pit, not so much because of price, as because it required a very special sulphur-free anthracite, of which there was very little to be obtained, and of which it wanted to have control for its process. If that is interfered with you may very easily arrive—and will arrive—at very grave difficulties and dangers. You will defeat the objects with which these collieries have been bought. They might be allotted a quota inferior to that which is necessary even to supply the other part of the whole concern, of which it forms an integral part. That, I am sure, is nobody's intention, and would probably have very disastrous results.
My point is that it is one of the questions that were gone into fairly fully by the Coal Industry Commission, which stated in their Report that any nationalisation scheme which does not propose to nationalise any part of the vast combination which is gradually being evolved, except the mines themselves and those coking plants which are situated at the collieries, would, if mining were nationalised and the other associated industries remained in private hands, have the effect that integrations

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which have already been made would have to be broken up, because the combinations would be disintegrated, and a serious obstacle would be raised against further integrations. Any minimum price fixing scheme which would not exclude the owner-user pit would have precisely the same effect, and the foresight and initiative of the promoters of economic and successful integrations would be thrown away.
I know this is a subject which has attracted a good deal of attention and of discussion and I understand that the attitude of the Government has to some extent been determined by the experience on this subject of the Rhenish Westphalian syndicate, who found, naturally, great difficulties in dealing with this problem of finding a scheme which would meet the case of the owner-user without jeopardising the success of the whole scheme. As far as I can ascertain, the main trouble in the German scheme seems to have been the objection of the non-integrated concerns to the working cost of the scheme and the small contribution made by the integrated pits. There was more trouble there because of the working cost than on the question of principle. Obviously the owner-user cannot have it both ways—he must not be allowed to produce for sale a quota based on his normal output in addition to fulfilling his purpose as an integrated concern. You would have to fix his quota on a different basis, naturally on a smaller basis than the possible outlet of his colliery, disregarding what you might call his home supply. What I am especially anxious for is that you should not reach a position, which seems to me quite possible, that the quota would be even below what you might call the sheltered supply, and that concerns having collieries, which they have acquired and on which the whole of their mechanism rests, coke ovens and the rest of it, would be put in a position that they could not work their own collieries to the full but would have to work them for part of their capacity and then go to outside collieries, which would be more expensive and possibly much less suitable.
It is for that purpose I have put down this Amendment, which I hope the Government will see their way to accept. I am not contending that this is the only
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way in which this can be carried out, but I have endeavoured to have it drafted as widely as possible so as to cover as large an area as possible and I have not confined it, as my noble friend Lord Gainford has done, to a small part of the industry, the coke industry. This is really an Amendment of the first importance, deserving the careful attention and study of the Committee. It is admittedly a subject not free from difficulty. I do not think it passes the wit of man to find a method which will manage to obtain the value of the integrating merger which has been made at the same time without doing unfairness to other collieries which are not in the same position.
Amendment moved—
Page 6, line 44, at end insert the said proviso.—(Lord Melchett.)
LORD GAINFORD: I have an Amendment on the Paper and perhaps I may be allowed to intervene, as I raise practically the same point in principle as my noble friend Lord Melchett. The point is one which is felt to be very serious in the interests of the iron and steel industry. I want it to be clearly understood that I am not speaking purely as a coal owner now when I say that it is the iron and steel industry for which I am speaking in support of the Amendment. A majority of the coal owners are quite prepared to accept the Government's proposal that all the coal shall be subjected to a limitation in accordance with particular standards of output required in the tonnage, but the iron and steel industry runs a very great danger unless an Amendment of this kind is accepted by your Lordships. The iron and steel industry at the present moment is in a very precarious condition. Those who invested money in the iron and steel industry have also invested money in collieries in order to supply their iron and steel works with fuel suitable to themselves, and they only place upon the market a very small proportion of that fuel.
If I may take a case which I know best in the Cleveland district. Messrs. Dorman, Long & Co., Messrs. Bolekow Vaughan, the Consett Iron Company and the firm of which I am Chairman represented by Pease & Partners, send to their own ovens in order to meet the demand for the iron and steel industry. 55 per

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cent. of their total output. They send to their other departments for their own purposes 10¼ per cent. They only supply to their inland customers 10¾ per cent. of their total output and they export the balance of 22.¾ per cent. It must be obvious to your Lordships that if there is to be a quota reduction on the coal that the iron and steel companies have bought for their own purposes, they are at once taking off the market some of the coal produced at those collieries. If they are to be subject to a quota on a great portion of their output they will have to diminish the amount of coal they consume themselves, and if they are to keep their iron and steel works going they must buy coal from outside at an increased cost to themselves.
Every shilling increase in cost which they have to give would mean something like 4s. 6d. to 5s. per ton on the finished steel which is going to be placed on the market. We have the greatest difficulty at present in keeping our plant going, and when I tell your Lordships that in Great Britain there are now only 178 blast furnaces as compared with the 311 which existed in 1912, you will see what a great reduction there has been in the production of iron and steel. It is true that the blast furnaces now at work produce a greater quantity than the blast furnaces did in 1912. Still, the aggregate production is about 20 per cent. less. In the last three or four days I have heard of four or five additional blast furnaces which have gone out of blast because there is no market for the pig iron which they produce. The industry is in no condition whatsoever to stand the placing of an increased cost upon it in the way proposed by the Government compelling those who consume their own coal to accept the same quota reduction as in regard to the coal they place on the market.
My Amendment is exactly the same as the noble Lord's in principle. I suggest that all the coal which is going to coke ovens and to make by-products and other things and is taken off the market, should be eliminated. The noble Lord has a different Amendment dealing with composite undertakings, but the principle is really the same. I urge that the Government should realise the danger of that large number of iron and steel firms who have their own collieries for their own purposes being compelled to reduce their
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output in order to meet the wishes of other coal owners, so that all coal, for whatever purpose it is used, should be reduced equally. This coal is not placed upon the market and therefore it ought to be eliminated in any scheme. This is a scheme which deals with coal placed on the market and not with coal which a firm uses for its own purpose. Frequent allusion has been made to the five-counties scheme which has been in operation in connection with the sale of coal. They have fixed their own prices, and they have reduced proportionately their output, but they found it absolutely impossible in the case of 42 per cent. of the output in the five-counties scheme to secure agreement amongst all those who work coal in those Midland areas unless a provision of this kind is made. There is a clause in all their agreements making exception to coal going to coke ovens and we feel that there is a strong case to have the coal for the iron and steel industry removed from the reduction which would otherwise take place.
LORD JOICEY: I am sorry to have to oppose my two noble friends upon this Amendment. The whole question has been discussed by the coal owners of Durham, and they came to the conclusion that they could not accept this Amendment because they did not consider it was a fair thing to reduce the quota of those producers of coal in the County of Durham. It is really an advantage to a producer of coal to have a customer he can thoroughly depend upon taking a certain quantity of the coal he produces, and instead of its being a disadvantage it is possibly an advantage to these composite concerns to have at all events a certain quantity of their produce safe and secure from competition. But they maintain there is no competition with regard to this coal with the other coal owners. What are the facts? If you go to the County of Durham you will find advertisements of coke nuts everywhere. These are nuts which are made from the coke derived from the coke ovens. We find that there is a strong and an increasing competition taking place between these nuts and house coal, and some seem to think that these coke nuts are better for their purpose than coal. If the producers can persuade the consumers that the coke nuts are better no doubt the consumption will be very considerably increased.

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My noble friend has spoken of the Consett Iron Company. That company has some wonderful coke ovens which consume a large quantity of coal and make coke. One of our salesmen happened to go to the Newcastle Gas Company to renew a contract which had been in our hands for forty or fifty years, and he was told by the general manager: "We cannot take so much of your coal because we are getting gas from the Consett Iron Company." They are getting millions of cubic feet of gas from the Consett Iron Company, and of course that is going to increase. If they can buy their gas at 5d. or 6d. per thousand feet and dispose of it at 1s. 6d. or 1s. 9d. per thousand feet they will find it a very good business indeed, although they may lose the benefit of by-products. Surely in these circumstances it cannot be a matter of surprise that the County of Durham should oppose this Amendment, and I hope that the Government will not accept it. It has been very fully and carefully considered more than once in connection with our Durham coal trade association and I hope the Government will act, as they seem to be anxious to act, fairly by all the collieries and refuse to accept this Amendment.
EARL RUSSELL: In this case of the vertical undertaking, as the noble Lord calls it, or the mixed mine, as I believe it is sometimes called, there is a very natural appeal. One may look at it at the first blush in this way. You may say here is an industry—let us say the iron and steel industry—which has had forethought, which recognised that coal and coke are required in its business and which for that purpose has had forethought and has bought a mine. It has bought that mine as an ancillary to its business. Its object was not primarily to be a coal producer. Its object was to be a producer of steel, but it bought the mine because it wanted coal in its business and it bought the mine as an ancillary. Is it not rather hard and is it not rather unfair that these people who have had that foresight should be penalised under this Bill by being put in a position no better than those people who had not got foresight? That is an argument which may be, and I think has been to some extent, presented to your Lordships. But your Lordships will see that there is another side to the story.
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I am bound to remind your Lordships, again—because even this evening it seems not to have been fully grasped—what is the intention of this Part of the Bill. The total productive capacity of the mines in this country was given roughly as 325,000,000 tons.
THE MARQUESS OF LONDONDERRY: That is exaggerated.
LORD GAINFORD: It is not more than 300,000,000 tons.
EARL RUSSELL: Well, that is the figure given to us, and I have not heard it challenged before. The consumption is about 260,000,000 tons. There seems to be some sort of an idea that, because it is desired that production should be regulated, therefore production will be reduced, but of course production does not exceed and never has exceeded and could not exceed consumption by any appreciable amount. You cannot store 60,000,000 tons of coal and wait for somebody to come and buy it. Therefore coal production has always followed very closely the actual consumption. But what has happened, as I think has been explained before, is that that margin of production or that margin of possible production has brought down the price to an uneconomic level. The object of this regulation—this artificial regulation, I admit—is to prevent that.
To go back to the mixed mine, the mixed mine is after all a colliery and a coal mine. It employs colliers, it will have to pay the standard rate of wages, it is subject to the special Acts which apply to collieries, and it is in all respects a colliery except, as the noble Lord, Lord Joicey, said, that it has a good and certain customer for a large part or even the largest part of its output. A colliery may have been acquired not only by an iron and steel undertaking. It may perfectly well have been acquired by a railway company. It may have been acquired by a gas company for its own purposes. But still it is a colliery and if you are going to deal with the general coal output of this country it is quite impossible to except it. I would ask your Lordships to consider what would happen if you exclude it. You would very quickly find more of these vertical undertakings, these mixed mines—many of them no doubt with the nexus between them only on

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paper—but you would have many more if there was a prospect of their escaping the arrangements made by this Bill.
If there is any suggestion that the people who own the mine will not be able to get their coal from it, that surely is unreasonable. There is full power in this Bill to raise the quota if necessary to enable the mine to supply the people who have bought it and have bought it for their own enterprise. You have heard from the noble Lord who spoke last that many of these mixed mines are competitors in the market with other mines which are not mixed mines. Therefore it would be impossible to accept an Amendment of this sort unless you are going to give up the scheme of regulating coal altogether. You cannot have a coal mine excluded from the general scheme because it happens to feed iron and steel works or a railway company. When your Lordships come to look into it, I think you will agree that there is no reason for excluding such a mine.
THE EARL OF HALSBURY: Will the noble Earl answer a perfectly easy question? What on earth does he mean by a mixed mine? He talked about vertical and horizontal mines. In South Wales we generally call them "slants." I want to know what his adjectives mean. Would he kindly tell me?
EARL RUSSELL: If the noble Earl had applied to the noble Lord, Lord Melchett, he would have obtained a full answer.
THE EARL OF HAISBURY: No, I should not. I have never heard the expression before.
EARL RUSSELL: That is what I was regretting. They are both technical expressions, and if the noble Earl proposed to discuss this point, he would have done well to have heard them.
THE EARL OF HALSBURY: All I can tell the noble Earl is that the terms are not known in the South Wales coalfield. I have been there, prosecuting 900 of his friends, many of whom were convicted. I have heard no such expression in my life. I have been down many coal mines and I am supposed to know something about the coalfields. Those adjectives would not be recognised in a place like Llandilo.
LORD DARYNGTON: The noble Earl, in the beginning of his speech, put the case so well from the point of view that I hold that it would be hardly necessary for me to say anything if he had not added certain remarks at the end. I wish to support my noble friend Lord Gainford in regard to the position in the North of England. It is, from a broad point of view, a matter of supreme importance. The position there is that there is a considerable import of steel and great difficulty in selling both iron and steel. I am not sure that the position is not worse than it has been for a very long time. It seems to me that, when a man has had the foresight to acquire iron and steel works, there is no reason why he should not get some little benefit. Under this Bill he will be at some disadvantage. It is not generally known that a small blast furnace uses as much coal in a week as a town of 80,000 people. I should like to emphasise my view that Lord Gainford's statement was very sound.
LORD COZENS-HARDY: I wish to support this Amendment in a very few words by giving the facts regarding an industrial undertaking with which I happen to be connected—a glass undertaking which uses very large quantities of coal. For the last twenty years it has had collieries within the works and 70 or 8O per cent. of their output is used in the works, while large quantities of coal have to be bought from outside. Six different seams are worked in order to get the qualities necessary for the different parts of the process. As the Bill now stands a quota can be imposed on that colliery portion of the undertaking and instead of being able to use the particular seams of coal which are in the works—the qualities found by seventy years experience to be suitable—we shall be compelled to seek coal from outside. That, I think, is a pretty clear case which is not covered by the Bill as it stands. The noble Lord in charge of the Bill said that exceptions of this kind could not be made or there would be danger of new undertakings being set up. Surely that danger could be safeguarded by limiting this Amendment to cases where the mine was ancillary to the undertaking before this change took place.
LORD THOMSON: I think everybody has sympathy with the idea that such undertakings as have been mentioned are entitled to a certain amount of credit and practical reward. Lord Cozens-Hardy mentioned a case in point. I would submit for his consideration that that particular sort of case is already provided for in the Bill. Will he look at Clause 3, subsection (2) (d) (i), which says:
"that in any district in which a standard tonnage has been determined for any class of coal, a separate quota may be fixed as respects that class."
There is no desire to penalise a pit situated as the noble and learned Lord has mentioned. There is no reason why special consideration should not be given to it in circumstances such as the noble and learned Lord has described, and as Lord Joicey has pointed out, I should imagine that a coal pit or concern has a considerable advantage in the steady demand of its own ancillary undertaking.
There is another point not brought out so far in the debate on this Amendment, and that is that all iron and steel works are not associated with ancillary pits, and you are giving an unduly great advantage to those that are, if this Amendment passes. The majority of iron and steel concerns in this country are not possessors of pits of their own and they also have got to be considered in this connection. I have noticed some references to the five-counties scheme here, and how in all their scheme they had something to this effect about vertical undertakings. The five-counties scheme was one of the 'very few voluntary schemes in this country, and in those days it had to struggle for existence and compound with its enemies in the gate. That should not be necessary under this Bill. In view of all these considerations the Amendment is really not necessary to avoid injustice to those concerns which have displayed vision, and, if it were inserted, it might even involve injustice for other concerns which are not so fortunately placed as the concerns which have got ancillary pits. I trust the Amendment will not be pressed; if it is, I am afraid it will have to be resisted.
THE EARL OF HALSBURY: The noble Lord told us that he had great difficulty in finding the reference, but he has referred eventually to Clause 3 (2) (d) (i).
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I have been reading it, and also Clause 3 (2) (d) (ii). I should very much like him to say whether they bear any meaning whatsoever, and if so what meaning. I cannot see what they mean. Nor do I understand whether they have any bearing whatever on the answer just given.
LORD MELOHETT: I should like to ask the noble Lord what relevance the provision which he read has to my Amendment. It seems to deal with something entirely different. It deals with a class of coal which you find later in the Bill. There is no class of coal that you can call coal for steel works, coal for glass works, coal for chemical works. It is not a class, like gas coal, or steam coal, or coking coal. Therefore I really think there must be some misconception. I do not think what the noble Lord has said covers the point at all.
EARL RUSSELL: The noble Lord was referring, I suppose, to this paragraph:—
"in any district in which a standard tonnage has been determined for any class of coal, a separate quota may be fixed as respects that class."
I understood that a class of coal used for steel was a definite class of coal, and could be described as a distinct class of coal. I also understand that what this paragraph means is that if necessary you can give a mine, if it is proper and suitable, a 100 per cent. quota, which would meet all the objections that are raised.
LORD MELCHETT: In what way is coal delivered to a steel works a class? The definition does not seem to make it clear what is meant by "class," which is exactly the point which wants bringing out. It is really a question of interpretation. This Bill has been carefully examined by experts, and the Amendment I have put down has been drawn up by experts. They have seen this Bill, and none of them has understood this point. It may be that the word "class" wants more elaborate interpretation later on.
LORD JOICEY: I think we are discussing this on rather limited lines. Supposing the Gas Light and Coke Company, which uses 200 million tons of coal in London, were to buy up some of the Durham collieries. If they do, I hope they will buy mine. The fact is that they would have to be exempt. Supposing my noble friend, who is the Chairman

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of that great Imperial Chemical Company which has got very large works in Durham, takes it into his head to buy a colliery or two to supply him with coal, that would be exempt too. We do not know to what extent that limit would be removed. I hope the Government, whatever pursuasive voices we may have in favour of the Amendment, will not agree to it.
THE EARL OF HALSBURY: Might I suggest that the two noble Lords in charge of the Bill might come to some arrangement to postpone this question until the Report stage when they have finally made up their minds what in fact they mean by what they have put in the Bill?
LORD THOMSON: I feel some answer should be given to my noble friend Lord Melchett, who appears to be under a misapprehension as to what is meant by "class." It is defined in Clause 18 on page 23. It is not only the kind of coal, but there are various other factors. It is a very technical matter and I shall read the definition:—
"In this Act the following expressions lave the meanings hereby respectively assigned to them:—
'Class,' in relation to coal, means a class determined according to the nature of the coal or of the trade, industry or other category of consumer supplied "—
"Consumer supplied" in the case of the noble Lord, Lord Cozens Hardy, was his glass works—
"or according to whether it be supplied for use in Great Britain or for export to any other country:"
It is not only a question of the nature of the coal, it is its destination and consumer. I have already referred to it once on the question of trade custom because the trade distinguishes between its customers in the price.
I should like to read a paragraph of a letter addressed by the President of the Board of Trade to Lord Gainford dealing with this very subject:—
"To attempt to meet the position as far as we feel able to do so, provision has been made which would allow a special quota to be given to any class of coal. By that means an additional quota could be given to coking coal, if the owners are convinced that this is justified, but the additional quota would have to he given to all coking coal and not merely to that produced by composite undertakings. Except in this last essential provision
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it would remain for you to satisfy the other owners of the justice of your case with ultimate recourse, if necessary, to arbitration."
I hope I have cleared up the point raised by my noble friend Lord Melchett. I had already referred to this definition of class of coal earlier in the debate. There is a vital distinction between the definition he had in mind and that in the Bill.
LORD GAINFORD: I have just been quoted in connection with a letter I received from the Minister in charge of the Bill in another place. It is perfectly true that that clause was inserted with the very object of allowing some alteration to be made in favour of the iron and steel industry, but I want to point out that the clause referred to is no value whatsoever to the iron and steel industry, for the reason that the majority of the coal owners are opposed to anything else than uniformity in connection with quota production. Those who have had the foresight to secure collieries, whether for their mills in Lancashire or for chemical works in order to secure their fuel, or iron and steel firms, feel that an injustice is going to be done them if they take off the coal from the market by buying a colliery themselves and consuming the coal for their own purposes in connection with the manufacture of some other article.
In the County of Durham, which is the strongest case in favour of uniformity, 25 per cent. of the output goes to iron and steel works and 75 per cent., represented very ably in your Lordships' House by my noble friend Lord Joicey, who owns a great portion of that output, is sent elsewhere. The iron and steel interest say: We cannot afford to go outside and buy coal at an enhanced price from our neighbours—Lord Joicey, for instance—who might be able to sell us coal. We have had the foresight to secure collieries of suitable coal for ourselves, but we are to be subject to a reduction of the coal we require for ourselves. In other words, we have to go into the open market and pay a higher price for the coal we want, although we are in such dire distress at present in the iron and steel trade that we cannot afford to do it. We feel in justice to the iron and steel industry, that when the majority of coal owners in every district

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would like to see uniformity, something is due to the iron and steel industry which is struggling to compete with the foreign production of iron and steel.
Resolved in the affirmative and Amendment agreed to accordingly.
LORD GAINFORD LORD GAINFORD had given Notice of an Amendment, after paragraph (d) (iii) of subsection (2), to insert:—
"provided that where a coalowner shall raise and supply coking coal to coke ovens (other than gas works) situated within the United Kingdom, the tonnage of such coking coal shall be excluded for the purpose of computing the quota of the coalowner producing such coal."
The noble Lord said: I do not think this is consequential upon the Amendment which has just been carried but possibly the same point will be raised later and I do not move the Amendment now.
On Question, Whether the said Proviso shall be these inserted?
Their Lordships divided: Contents, 105; Not-Contents, 13.

CONTENTS.

Norfolk, D. (E. Marshal.)

Elibank, V.

Faringdon, L.

Northumberland, D.

Falkland, V.

FitzWalter, L.

Rutland, D.

FitzAlan of Derwent, V.

Foxford, L. (E. Limerick.)

Somerset, D.

Hood, V.

Gainford, L. [Teller.]

Wellington, D.

Hutchinson, V. (E. Donoughmore.)

Gifford, L.

Glanusk, L.

Camden, M.

Leverhulme, V.

Hampton, L.

Lansdowne, M.

Novar, V.

Hanworth, L.

Linlithgow, M.

Sumner, V.

Hastings, L.

Winchester, M.

Howard of Glossop, L.

Zetland, M.

Aberdare, L.

Joicey, L.

Abinger, L.

Kenmare, L. (E. Kenmare.)

Bathurst, E.

Aldenham, L,.

Lamington, L.

Bradford, E.

Ampthill, L.

Lawrence, L.

Clarendon, E.

Annaly, L.

Leconfield, L.

Cranbrook, E.

Armstrong, L.

Leigh, L.

Eldon, E.

Arundell of Wardour, L.

Lloyd, L.

Feversham, E.

Auckland, L.

Melchett, L. [Teller.]

Fitzwilliam, E.

Banbury of Southam, L.

Monkswell, L.

Grey, E.

Biddulph, L.

Newton, L.

Halsbury, E.

Brancepeth, L. (V. Boyne.)

O'Hagan, L.

Ilchester, E.

Cawley, L.

Oxenfoord, L. (E. Stair.)

Inchcape, E.

Clanwilliam, L.(E. Clanwilliam.)

Queenborough, L.

Iveagh, E.

Redesdale, L.

Lauderdale, E.

Cozens-Hardy, L.

Roundway, L.

Midleton, E.

Cranworth, L.

Russell of Liverpool, L.

Midlothian, E. (E. Rosebery.)

Danesfort, L.

Sandys, L.

Morton, E.

Darling, L.

Sherborne, L.

Mount Edgcumbe, E.

Daryngton, L.

Sinclair, L.

Spencer, E.

Dawnay, L. (V. Downe.)

Somerleyton, L.

Yarborough, E.

Deramore, L.

Sudeley, L.

Ypres, E.

Digby, L.

Swansea, L.

Dynevor, L.

Trevor, L.

Bertie of Thame, V.

Elphinstone, L.

Wavertree, L.

Bridgeman, V.

Fairfax of Cameron, L.

Weir, L.

Chaplin, V.

Fairhaven, L.

Wester Wemyss, L.

Churchill, V.

Fairlie, L. (E. Glasgow.)

Wharton, L.

NOT-CONTENTS.

De La Warr, E.

Amulree, L.

Marks, L. [Teller.]

Lindsay, E.

Balfour of Burleigh, L.

Marley, L. [Teller.]

Russell, E.

Clwyd, L.

Meston, L.

Dickinson, L.

Thomson, L.

Hereford, V.

Gage, L, (V. Gage.)

Loan THOMSON: The next is a drafting Amendment.
Amendment moved—
Page 7, line 1, leave out ("the").—(Lord Thomson.)
On Question, Amendment agreed to.
LORD VERNON LORD VERNON moved, in paragraph (f) of subsection (2), before the first "price," to insert "pit-head." The noble Lord said: I gather from what the noble Lord said in reference to my previous Amendment that he will not look on this Amendment with favour. I must say, however, that I find it difficult to reconcile his point of view with what

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was said quite definitely by the President of the Board of Trade in another place. He said he wished to make the matter perfectly clear and he went on to say that up to the pit-head the price of coal was regulated by this Bill and from that point it was regulated by the Consumers' Council Bill. He was of course referring to the Bill with regard to retail prices which is now in another place. Obviously if the view which the noble Lord put forward on my previous Amendment, and indeed which Lord Gainford supported, is held, it follows that these prices may be retail prices. Therefore it is obvious that they may easily conflict with the prices proposed to be fixed by this other Bill which is now in another place.
I submit that it is quite impracticable to fix minimum prices unless they can be referred to something comparable. Lord Gainford said it. was a perfectly well-known custom in the trade and so forth as to what charge was customary, but he knows perfectly well that, the only way in which you can fix prices is to refer to the pit-head price. If that were not so why is it that the ascertainment price for the regulation of wages is always related to the pit-head price? If all the different prices to consumers in different parts of the country were taken, the result of the ascertainment would be curious, to say the least of it. It is essential to reduce it to a comparable basis, which can only be the pit-head price. To take a simple case, supposing coal is sold at 10s. a ton in Sheffield and also at some far distant place at which the transport cost is 9s., the pit-head price of that coal becomes 1s. The whole of the provisions regarding minimum prices fail if you use that basis. I do not know how the noble Lord proposes that the clause should be worked, but I have yet to meet any one who understands how it can be worked except on a pit-head basis.
Amendment moved—
Page 7, line 13, after the third ("the") insert ("pit-head").—(Lord Vernon.)
LORD THOMSON: I am afraid I must give the same answer to the noble Lord as I gave him before. It is hoped that Part I will be worked by the coal owners in their own interests and those of the nation. I have described their customs on a previous Amendment. They sell the same article at different prices to different
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people under different titles—c.i.f., f.o.r., f.o.b. and so on. It is a complicated business, and to that extent I am in thorough sympathy with the noble Lord, Lord Banbury. I wish he were here to support me. We do not want to interfere with the customs of the trade, which are highly complicated and, if any civil servant attempted to interfere with them, I think he would regret it. I admit that the procedure is not entirely satisfactory. I should like very much, in the name of a dictatorship, to fix pit-head prices. I quite agree with the noble Lord. The fact remains that it is almost impossible to do so, for that reason, and in the interests of the coal owners themselves and their long established practice, I am forced to resist this Amendment, which I hope the noble Lord will not press.
On Question, Amendment negatived.
LORD THOMSON: I have a drafting Amendment to make it clear that fixation of minimum prices is limited to coal sold or supplied by owners of coal mines.
Amendment moved—
Page 7, line 15, at end insert ("by owners of coal mines in the district").—(Lord Thomson.)
On Question, Amendment agreed to.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, in paragraph (k) of subsection (2), after "inspection by" to insert "on production of his authority in writing if so required." The noble Viscount said: Where, under various Acts of Parliament, bureaucrats are empowered to enter upon people's premises, I think it is usual that they should have to produce their authority. Under Clause 8 heavy penalties are imposed for giving away information obtained in the course of duty. An outsider could go and say:" I am So-and So, and I want certain information," and he would not, I think, be liable to a penalty. To prevent that kind of occurrence, I propose this Amendment.
Amendment moved—
Page 8, line 9, after ("by") insert ("on production of his authority in writing if so required").—(Viscount Bertie of Thame.)
LORD THOMSON: I think this Amendment is based on a misconception of what the accountant would do. He is not a person with a roving commission who could go and visit any coal company he likes and demand to look at their

577
accounts. In each case where it is necessary to go the length of examining books there would be correspondence between the executive board and the coal owners and the board would have informed the coal owners in writing that they had decided that their accountant must examine the books. In that case the accountant would have been possessed of the form of introduction which the noble Viscount desires. It seems to me his Amendment is quite unnecessary.
VISCOUNT BERTIE OF THAME: I think it is a very inoffensive Amendment. The man simply has to produce his authority and I am going to press this matter.
EARL RUSSELL: The noble Viscount really must not talk of this man as if he were a policeman going to inspect an illicit still or stop a motor car in the middle of the road. He is an accountant and on rare occasions will examine the books. There will be correspondence and it will be merely one man calling on another.
VISCOUNT BERTIE OF THAME: I wish to prevent a person impersonating the accountant.
On Question, Amendment negatived.
THE EARL OF PLYMOUTH THE EARL OF PLYMOUTH moved, after paragraph (n) of subsection (2), to insert as a new paragraph:
"() For securing that in respect of the determination of the quota for each of the coal mines within the district and in respect of the prices below which every class of coal produced in the district may not be sold or supplied, the maximum output allowable and the permissible price for sale shall be so fixed as not to hamper or restrict the production, supply or sale of coal or coke destined for export overseas."
The noble Earl said: This Amendment is very similar to one I moved in connection with Clause 2. The reason that I brought it forward was that those connected. with the export trade are very much frightened that with the Bill in its present state there will be restriction and hampering of production for export purposes. We feel that there ought to be the greatest possible elasticity in this scheme with regard to this class of trade. The noble and gallant Lord was good enough to say in connection with my last Amendment that he would be prepared to consider other words which might meet the case I had in view. I do not know
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whether he is prepared to do the same thing in regard to this Amendment?
Amendment moved—
Page 8, line 33, at end insert the said new paragraph.—(The Earl of Plymouth.)
LORD THOMSON: I am prepared to do anything I can to oblige the noble Earl, but I submit that there is same slight misconception of what the Bill does and how its principles are carried into effect. The owners fix the quotas themselves, having regard to what they expect to be able to sell. They will naturally fix those quotas as high as possible. I have a case given to me in which a 67 per cent. quota was raised in ten hours to 100 per cent. quota by the five-counties scheme, to meet a sudden demand for coal. Those figures were given to me officially. It does seem to me the noble Earl's point is met, but I am willing to consider, sympathetically too, any suggestion put forward. Provided the noble Earl does not interfere with the principle of the Bill I will consider any proposal he may suggest for making things doubly sure. But I have gone into this point very carefully with the official advisers of the Government, and they assure me that the noble Earl's point is already met in the Bill, and they give me this illustration to prove it. Obviously if the owners are working this Part of the Bill they will do their best.
THE MARQUESS OF SALISBURY: I quite think that, especially as the night is getting on, it is not worth while taking time over a discussion of which the noble Lord in charge of the Bill offers an issue. He has said to my noble friend that he believes that my noble friend and himself are intent upon the same object, and it is only a question between them as to whether the words of the Bill achieve what they both desire. The last time when this particular point arose they came to an agreement that the matter should stand over to the next stage. If the noble Lord says again, as I understand him to say, that he is willing to consider whether words like my noble friend's are necessary, I am almost sure my noble friend will be satisfied with that assurance.
THE EARL OF PLYMOUTH: I am very grateful to the noble Lord for what he has said, and I will certainly withdraw the Amendment.
Amendment, by leave, withdrawn.
THE EARL OF PLYMOUTH THE EARL OF PLYMOUTH moved to leave out paragraph (b) of subsection (3). The noble Earl said: This paragraph enables the executive board of a district, if the majority of that board are of that opinion, to impose a levy upon all owners in their district to facilitate the sale of a certain class of coal. A short time ago we discussed the question of the central levy. In another place that provision had been deleted from the Bill, and we this evening adhered to that decision. I think there are a great many reasons for deleting this district levy as well, but I think that the perfectly obvious one is that you really cannot leave the district levy if you have once deleted the central levy. It is entirely unfair and illogical to leave the one in with the other out. And, as a matter of fact, I think that every argument that was brought forward by the noble Lord, Lord Gainford, in favour of re-inserting the central levy can now be used in favour of deleting the district levy. On the whole probably the central levy is the less objectionable of the two. It is much more logical to deal with this matter taking the country as a whole, rather than by districts, as these districts are, we know, arbitrary districts, and can be changed in certain circumstances.
I read with considerable care the speech of the President of the Board of Trade when this matter was discussed in another place, but I confess I found no arguments whatever to substantiate his contention that there was a, very great distinction between the central levy and the district levy. One cannot get away from the fact that in principle they are entirely the same, and I do not think that there is any argument in favour of the district levy which cannot be advanced in favour of the central levy and vice versa. The provisions of the district levy are really unfair in certain respects. To begin with, as has been pointed out in connection with the central levy—and you are doing the same in this case—you are actually taxing the home consumer of coal in this country so that the foreigner may be able to get his coal more cheaply. I know it is contended that the great part of the coal which is exported does not go to industries which compete with our industries here at home. That may be so, but at any rate a certain amount does go to industries which are competitors. We
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may also be told that this can be done now under a. voluntary scheme. That is quite true and it may be wise in certain circumstances to formulate a scheme of this kind, but, at any rate, that scheme is voluntary and anybody can come out of it if they want to. To make it statutory and compulsory would be a very dangerous thing to do.
There is a great deal to be said in favour of fixing the price of our export coal low enough to enable us to compete with foreigners and to retain our markets abroad, but there is nothing to be said for actually taxing the home consumer in this country to enable the foreigner to get his coal more cheaply. In the second place this levy would act very inequitably between one district and another. In some districts you can operate this district levy with ease, in others it is entirely impracticable. I gather that this levy is primarily intended, as the central levy was, to help coal which is produced for export. In South Wales, the area I know best, out of the 50,000,000 tons we produce a year, 30,000,000 tons are export coal and to try to apply that scheme in South Wales would lead to complete failure. It would mean that, in order to subsidise export coal to the extent of 1s. 6d. a ton, you would have to levy on coal produced in South Wales for inland consumption to the extent of something like 3s. 9d. a ton. That is absolutely ridiculous and shows that it is quite impracticable in that area.
It is of course quite different in the five counties, as we have already heard. They have a huge output there of something like 100,000,000 tons and of that not very much over 5,000,000 tons goes in export overseas. Therefore it is perfectly obvious that, with an infinitesimal levy, they are able to subsidise their export coal to such an extent that other districts could certainly not compete with them. In view of these facts it is impossible to discover any reason for maintaining this district levy when the central levy has gone. 75 per cent. of the original proposal has gone and the Prime Minister very rightly acknowledged, when the central levy was deleted, that the central levy was not vital to the Bill. Equally this provision is not vital to the Bill. I say it is entirely illogical. To leave it in leaves the Bill

581
lopsided. It is quite inequitable in its operation and I hope your Lordships will agree to delete it.
Amendment moved—
Page 9, line 6, leave out paragraph (b). —(The Earl of Plymouth.)
LORD THOMSON: With a great deal of what the noble Earl has said in regard to the leaving in of this provision making the Bill lopsided I am prepared to agree. At the same time I cannot let the Amendment go by default. I do not propose to repeat to your Lordships all the arguments that were used on the central levy Amendment. It would only be vain repetition as the principles are exactly the same. The only new point I could raise would be in connection with the County of Fife and I do not think it is worth while to fatigue your Lordships with it. It is obvious that this Amendment can be carried. I am afraid I shall have to go through the formality of saying "Not-Content," but I do not propose to proceed to a Division.
On Question, Amendment agreed to.
Clause 3, as amended, agreed to.
THE MARQUESS OF SALISBURY: Before the noble Lord rises I wish to put to him the question which, at this time of night, he must expect. To what point in the Bill does he propose to proceed before we bring our labours temporarily to an end?
LORD THOMSON: I suggest that our winding time should come when we have done Part I of the Bill, if that is agreeable to your Lordships. There is very little left on that Part and there is not a great deal in it. It will enable us to start fresh with amalgamation if we go to the end of Clause 10 to-night. If the noble Marquess will allow us to go-on for another quarter of an hour or twenty minutes I think we shall be able to do that.
THE MARQUESS OF SALISBURY: If the noble Lord asks my opinion I think it not at all unreasonable that he should go on for another quarter of an hour.
Clause 4:
Effect of schemes on contracts.
(2) Where the output or disposal of a coal mine exceeds during any period the quota of that mine for that period, the
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owner of the mine shall not be liable to any penalty under any district scheme, nor shall any deduction be made from the quota of the mine for any subsequent period, in respect of the excess, if it is adjudged by the persons having power under the scheme to impose the penalty or make the deduction or, in the event of an arbitration, by the arbitrator,—
(a) that the excess was solely occasioned by the performance of contracts made before the eleventh day of December, nineteen hundred and twenty-nine;
LORD THOMSON: The next Amendment is purely drafting. I beg to move.
Amendment moved—
Page 10, line 6, leave out ("Part I") and insert ("this Part").—(Lord Thomson.)
On Question, Amendment agreed to.
LORD GAINFORD LORD GAINFORD moved, in paragraph (a) of subsection (2), to leave out "the eleventh day of December, one thousand nine hundred and twenty-nine" and insert "passing of this Act." The noble Lord said: This is an Amendment to meet a case which has been brought to my attention of a firm which has sold nearly the whole of its output in the spring of the year because it supplies gas coal. I understand that it is customary in the gas industry to buy in the spring the coal required for the subsequent year. Unless some words like these are inserted those who carry on the usual practice of making yearly contracts in the spring of the year will be prejudiced in connection with the contracts they have made. Not only would the coal producer, who has, of course, accepted the market price of the day in regard to the contract, be prejudiced, but the consumer who has had the foresight to buy his coal for a year in anticipation, possibly, that prices might rise subsequently, would not be supplied by the producer with the coal he had contracted for.
In consequence of the case which has been brought before me I suggest that the date should be altered, so that some regard may be had to the sanctity of contract. In no case, I think, would the speculator be encouraged to speculate having regard to the prospect of increased prices; but existing contracts which have been made subsequent to the date in the Bill would be respected. Under my suggestion instead of contracts being respected merely up to the end of

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last year's contracts they will be respected until the passing of the Bill into law. I beg to move.
Amendment moved—
Page 10, leave out lines 19 and 20, and insert ("passing of this Act").—(Lord Gainford.)
EARL RUSSELL: I am afraid this really will not do even with the great phrase "sanctity of contract" which the noble Lord used. He is always very plausible and persuasive, but, after all, this Bill was published on December 11, 1929, and the fact that it was pending was known for a long time before that date. I do not think it will do to give people time to make contracts in order to make the provisions of this Bill up to the date of its passing. It is well known that a good many coal owners have endeavoured since tile terms of the Bill were known to discount the effect of it in this way and it is certain many others would. I think we must stick to the usual rule of binding people on the date they knew this legislation was coming and not allow them to make contracts to cover a period for its becoming operative.
LORD JOICEY: I protest very much against what the noble Earl has said. These contracts are made to retain contracts people have had for years. If we had not taken many of these contracts we would have had no sales at all. I think it would be a very unwise thing and produce a bad effect abroad if we attempted to avoid these contracts. In some cases they are undoubtedly a loss to the coal owners who have made them. To interfere with contracts by Act of Parliament would he extremely unwise and I support my noble friend Lord Gainford on this point.
LORD DANESFORT: The noble Earl who spoke against this Amendment apparently gave as his reason that the Bill was printed on December 11 last year, and his assumption was that everyone who saw that Bill printed was bound to assume that it would pass into law and that therefore anyone who made a contract after that date deserves no consideration whatever. I think that is a very rash assumption for anyone to make. We know the Bill was very nearly wrecked and that if it had met its deserts in another place it probably would have
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been destroyed, but owing to some mysterious combination of parties, which has never been explained and I suppose never will be explained, the Bill got through the House of Commons. The noble Earl wants to penalise the man who, in good faith and justly having regard to his business, made contracts after that date because forsooth he should assume that any legislation brought in by the late Government would pass into law. I understand that is his argument and I trust your Lordships will not give effect to an argument of that character.
EARL RUSSELL: The noble Lord understands that that is my argument, but he understands quite wrongly. What I want to prevent him doing is having an unfair advantage over his fellow coal owners. If the noble Lord will look at the clause on page 10 he will find that what it says is that:—
"Where the output or disposal of a coal mine exceeds during any period the quota of that mine for that period, the owner of the mine shall not be liable to any penalty under any district scheme, nor shall any deduction be made from the quota of the mine for any subsequent period, in respect of the excess, if it is adjudged"—
I am reading the material words—
"that the excess was solely occasioned by the performance of contracts made before the eleventh day of December, nineteen hundred and twenty-nine."
That preserves fairness as between them and the other coal owners. It prevents one getting a quota to which he is not entitled and, by getting it, to deprive his neighbour coal owners, because he has made contracts after it was known that this Bill was likely to be in operation. That seems to me to be a most equitable thing, and I think if the noble Lord had read the Bill he would not have said what he has just said.
LORD JOICEY: I quite agree with the noble Lord. I think it will be an extraordinary thing if we deal with these contracts. The noble Earl has given the impression that people who do business with the coaltradearenever to be trusted. As a matter of fact the people we are dealing with are people of the very highest honour. I think it is a monstrous thing to shirk these contracts. I think it is altogether wrong. It would have a very bad effect abroad and, depend upon it, we cannot afford that at the present time.
EARL RUSSELL: The noble Lord who has just spoken is quite as wrong as Lord Danesfort. There is no question of cancelling contracts. It is a question of what is to be taken into account in fixing the quota.
LORD GAINFORD: Surely the noble Earl does not suggest that when an individual who has an output of, say, 10,000 tons a week and who has been in the habit every year of selling that output to the gas companies of London, renews his contracts—in the case I have in mind in the spring of this year—not knowing whether this Bill was going to pass into law or not, in the ordinary course of business, he is not to be allowed to fulfil those contracts but is to be made subject to a quota which will reduce his output? It seems to me grossly unfair that business of that kind cannot be carried on after this Bill was introduced. Was it to be assumed that the Bill would pass? No attempt has been made to take advantage of the possibilities of the quota by the individual I have in mind. He sold his coal in exactly the same way as he has sold it for many years past, to the gas companies in London in the same quantity. The consumer would have got the benefit of the lower price, but now, if he is going to be subject to the quota, not only will the contract have to be cancelled, but very likely law costs will occur in connection with the gas companies, and the gas companies will have to go into the market and pay a higher price for the coal for which they had already contracted to the great loss of the consumers of gas.
VISCOUNT MERSEY: I should like, if I may, to put the case from the gas companies' point of view. It is the invariable practice of the gas companies, as many of your Lordships know, to buy forward for twelve months or even eighteen months. What does the noble Earl think would have been the correct procedure for these large gas companies of London, who purchase two or three million tons of coal, to have followed when this Bill was introduced? Were they to do nothing? They had been buying in the ordinary way from coal owners with whom they had done business for fifty or even 100 years. Were they suddenly to stop and leave themselves without coal? It seems an intolerable
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suggestion that gas companies supplying many of your Lordships—supplying, I might say, everybody in the Metropolis—should be subject to that position.
LORD JOICEY: Treating them as scraps of paper.
VISCOUNT MERSEY: I hope the noble Lord will press his Amendment.
EARL RUSSELL: All this special pleading is really very clever, but it is very remote from the facts. I must again ask your Lordships to look at page ten of the Bill. The question of breaking contracts was mentioned by Lord Gainford. There is nothing in the Bill that will make a man break his contracts. If your Lordships look at page ten of the Bill you will see:—
"A contract for the sale or supply of coal, whether made before or after the passing of this Act, shall not …be void or unenforceable as between the parties by reason that it cannot be performed without contravening the provisions of a scheme …"
It says quite definitely therefore that a contract is not void and not unenforceable but can be performed. But if the body that fixes the quota—a body, remember, that is composed of coal owners themselves—consider that that contract has been obtained, not in the ordinary course of business, but for the purpose, so to speak, of jumping the claim and getting an unfair proportion of the coal to be allotted, then those coal owners, sitting as the executive board, will be entitled to say: "You will not get so large a quota as you would otherwise have got; you will lose something next year to make up for what you got by trying to jump claims. The contract is not void or unenforceable, but your quota will be less next year because you tried to get more than your fair share." That is a fair decision, taken by a board acting fairly as between one coal owner and another. It is simply that and nothing else.
On Question, Amendment negatived.
Clause 4, as amended, agreed to.
THE MARQUESS OF SALISBURY: The next Amendment to come before us, standing in the name of the noble and learned Earl, Lord Halsbury, is an important one and will take us some time.
LORD THOMSON: In those circum stances I had better move that the House be resumed.
Moved, That the House be resumed.— (Lord Thomson.)
On Question, Motion agreed to, and House resumed accordingly.
House adjourned at twenty minutes before twelve o'clock.