HL Deb 14 July 1938 vol 110 cc858-71

Page 15, line 20, after Clause is, insert the following new clause:

"Provisions affecting renewal of leases.

".On and after the vesting date, if a lessee gives notice in writing to the Commission of his desire to renew a lease of coal or mines in force at that date not less than six months before the date of the termination prescribed therein, the consent of the Commission to such renewal on reasonable terms and conditions shall not be unreasonably withheld, and any question whether such consent is being unreasonably withheld or whether the proposed terms and conditions or any of them are reasonable and what other terms and conditions are reasonable shall, if the lessee so require, be referred to arbitration and the lessee shall be entitled to a renewal of his lease on such terms and conditions as may be found in such arbitration to be reasonable.")

The Commons disagree to the above Amendment for the following Reason:

Because it is inexpedient that the exercise by the Commission of their functions in relation to the granting of leases should be subject to review by arbitrators.

LORD GAINFORD moved, That this House doth not insist upon its Amendment after Clause 12 on page 15, line 20, but proposes in lieu thereof the following Amendment:

Provisions affecting renewal of leases.

".On and after the vesting date if a lessee of coal or mine of coal not later than nine months before the date of termination of the lease makes application in writing to the Commission for the renewal thereof the Commission shall have regard to the existing custom to grant a renewal and shall not unreasonably withhold its consent to a renewal on reasonable terms and conditions such renewal to be granted or refused not later than three months before the date of termination of the lease."

The noble Lord said: My Lords, I should like for one moment to be allowed to state the reasons why there has been some lack of vision on the part of another place in rejecting a very reasonable Amendment, proposing arbitration when leases are renewed and the colliery proprietor takes exception to the terms which are granted by the Coal Commission. If the miners' representatives in another place had realised the possibility that blunders might be performed by a Commission of this kind, and how their own industry might be prejudiced in the event of conditions being imposed upon a colliery proprietor which might reflect upon their industry, I think they would have realised that the arbitration was not an objectionable feature which your Lordships imposed in connection with the renewal of leases in the event of their being unsatisfactory.

A Commission of this kind, however excellent its personnel—and I cast no aspersions upon the individuals whom it is proposed to appoint to this Commission—is not necessarily infallible. Moreover, members will not live for ever, and other members, who might be still more fallible, take their places. It is vitally important to a great industry that, when they have spent enormous sums of money in the development of a colliery, in mechanisation, in putting down plant on the surface, in erecting coke ovens and byproduct plant, when they have laid out their colliery with a view to developing in a particular way, when they have entered into an arrangement for ventilating large areas of coal, they should be entitled to the usual custom in connection with the renewal of a lease. To give an arbitrary power to a Commission of this kind seems to every colliery owner to whom I have spoken—and I have spoken to a great number of representative colliery owners—to be unfair. There ought to be directions that the usual terms, according to the words of my Amendment, should be accepted and passed into law.

All that my Amendment suggests is that the Commission shall have regard to the existing custom to grant a renewal, and shall not unreasonably withhold its consent. That is a considerable modification of the power of arbitration accepted by your Lordships when this Bill went to another place on the last occasion. Moreover, at the present time, in the event of a colliery lessor not dealing fairly with a lessee in regard to renewal, the colliery proprietor has an opportunity of appealing direct to the Railway and Canal Commission in order to secure justice in the national interest and in the interest of that firm, and the lessor can be compelled to give reasonable terms. To deprive colliery proprietors of that right, as the Bill would if it were passed in the form in which it has come back from another place, seems to be inequitable and unfair. The reasons of inexpediency put forward seems to me to have no justification whatever. An arbitrary body can impose any conditions it likes. For instance, if the Commission thought it advisable that one colliery proprietor should be compelled to amalgamate with another colliery proprietor, when a lease was to be renewed, the Commission could say: "Unless you are going to do this, that or the other thing in connection with amalgamation, we decline to renew the lease," or "We will penalise you with regard to working part of your coal." That is a power which would be unreasonable, but which might easily be exercised.

One knows how often in real life influence can be brought to bear upon a Commission, of which they might be quite unconscious of giving way to. In the renewal of a lease you may have a coinheritor, and the competitor may come along to the Commission and say: "I am quite prepared to take this lease at lower terms than the existing proprietor," and for that reason the existing colliery company might have its lease taken away, and the whole of its organisation in connection with development and safety, and everything else, destroyed by the arbitrary act of the Commission. Surely your Lordships will realise that it is unfair to a great industrial concern that it should be entirely at the disposition of a Commission of this character, and will agree that the Commission ought in reason to be directed as to how they should renew leases, on which large sums of money and the prosperity of the industry so largely depend. A Commission sitting in London, of this character, has no local knowledge. It is vitally important that the Commission should be directed as to the renewal of leases, and that the law should not remain as it would be if the Amendment which I now move were not accepted.

My Amendment is a compromise. I am an old Parliamentary hand. I have had a great deal of practice in troubles between the two Houses, and I do not want to see such trouble again; but I have been pressed to resist the House of Commons in connection with this matter, and I have put down my own Amendment in lieu of that with which the Commons disagreed. I am aware that there are those of your Lordships who would desire to see arbitration, but what I ask for is a compromise, and I ask that we should give directions to the Commissions such as are contained in my Amendment. I hope your Lordships will realise that there is a very real desire on the part of the industry as a whole that directions should be given, as we are for the moment no longer retaining that power of arbitration which we thought was essential in the interests of the industry.

Moved, That this House doth not insist upon its Amendment after Clause 12, on page 15, line 20, but proposes in lieu thereof the said new Amendment.—(Lord Gainford.)

LORD TEYNHAM

My Lords, I should like to support my noble friend Lord Gainford in his Amendment, as I moved the original Amendment, dealing with the provision affecting the renewal of leases, on the Committee stage, which Amendment, as your Lordships may remember, was carried on a Division. Both Amendments have been designed to give security of tenure to the present owner of a colliery lease. By this Bill we are proposing to give very great powers to the Coal Commission, and I do not suggest for a moment that they will not use those powers wisely and well, having due regard to all the circumstances of any case which they may consider, but I cannot help feeling that the provision of arbitration would have been beneficial to the working of the whole organisation. I think it is a great pity that it is proposed to omit it from the Bill. It would not, I feel, have been often used, and the industry would have felt that there existed the means by which any decision which was deemed unreasonable could be reconsidered. The Amendment in the name of Lord Gainford is a very modified provision, affecting the renewal of leases, and it will, as he has explained, help to place the industry in a position no worse off than it would have been in but for the present Bill. This is a state of affairs which the Government have themselves accepted in other directions, and I hope the Government will see their way to accept this compromise Amendment, which would undoubtedly give to the industry a feeling of security.

THE LORD CHANCELLOR

My Lords, I regret that I am unable, on behalf of the Government, to agree with the Amendment proposed by the noble Lord, Lord Gainford, in lieu of the original Amendment which stood in the Bill. Your Lordships will appreciate that the Amendment relates only to cases in which the existing lessee has no right to a renewal of his lease. There are a good many leases in which there is such a clause, but you have to visualise here a case where the lease contains no such right of renewal as against the existing landlord. It is proposed to insert such a right in a lease which has become vested in the Coal Commission, and to insert such a right in cases where the Coal Commission have granted a lease to a tenant willing to take it without a clause providing for renewal. In the other place it no doubt looked as if the Coal Commission were being put in an invidious position, compared with other landlords. The contract which had been entered into voluntarily with the Commission was to be altered, in the sense that the Coal Commission were to be deprived of a right which they otherwise had of discussing the question of renewal, or granting a fresh lease, with a free hand.

I want to try and persuade your Lordships that the effect of the Amendment proposed by Lord Gainford is of a much more serious character than I think the noble Lord intends or, perhaps, appreciates. The point is this. On the renewal of a lease so complex and difficult, as ii often is in the case of a coal mine, there are, as some of your Lordships are aware, pages and pages of clauses and conditions—sometimes as many as one hundred pages of draft in connection with a particular lease, and some of the clauses are of great complexity. Assume a lease which does not contain any clause of renewal, which is approaching its end, and the lessee not unnaturally wishes to have a renewal. Assume the normal case, which I can confidently ask your Lordships to assume, that the Coal Commission will be only too glad, if there is coal to be worked, to renew the lease in favour of that same tenant, who has, on the assumption that I am going on, properly carried out his provisions under the existing but expiring lease. What happens in real life is that the terms and conditions of the new lease will be of a controversial character. There may be a score of differences on which the Coal Commission's view as to the proper lease will differ from the view of the existing tenant who requires a new lease—on all sorts of details which I need not trouble your Lordships with. It is on those matters that this Amendment, if it were agreed to, would have the effect of bringing the Coal Commission into the position of having to fight an action in every case of a new lease as to which there was some reasonable doubt (I assume it is reasonable) as to what its terms shall be.

I think—perhaps I am wrong but I think—that the noble Lord suggested by a slip that it would go to arbitration. That is not the effect of this Amendment. The Amendment would have the effect that an action would be brought. In every case in which the Coal Commission had, in the performance of their duty, to grant a renewal of a lease—or equally if they wanted to grant and had some reason for granting a new lease to some person, though the normal case would be to grant a renewal—there might be an action with regard to the terms and conditions, and it would put them in the position that they could not, if I may use the language of the disagreement Reasons, exercise their discretion as to the granting of the renewal of a lease without that discretion being subject to review by a Court of Judges, or possibly by an arbitrator. It is obvious that there would be in every case the most cogent reasons to induce the Commission to grant the renewal to the existing tenant, because of course nothing can be more difficult to arrange in the case of a colliery than to substitute for the existing tenant a new tenant. All sorts of difficulties arise. You would have to arrange long before the termination of the lease for such things as the employment of workmen if the old tenant goes out; there would be arrangements with regard to sending in emergency men to prevent any damage taking place at the colliery at the midnight on the day that the term comes to an end; and a great many other circumstances of that kind. And it is inconceivable in my opinion, unless for very good reasons, that the lease will not be renewed, that is to say renewed by the grant of a continuing lease to the existing tenant.

That, I venture to think, is not the trouble at all. The trouble is that there may be disputes about the terms and conditions. The whole Bill is drafted on the view that the Commission are going to be a Commission of skilled people who are going to be fair, and who are going to do their duty to the best of their ability. Unless you assume that, obviously the Bill ought never to be passed at all. But if you assume that, it is not right to take the view that the Coal Commission ought to be saddled in the performance of the principal duty which they have under this Bill, which is to grant leases or to renew leases—in such cases they ought not to be saddled with this position of having, if I may say so, a kind of Old Man of the Sea on their backs. At any rate there is this on their backs all the time, that every case of granting a renewal of a lease is going possibly to lead to an action in the High Court, and, it may be, in the Court of Appeal, which may result in very great delay before the terms of the lease are finally accepted.

And I do not know what is going to happen in the meantime. You have got a lease expiring, we will say at the end of the year. Nine months before, you, the tenant, tell the Commission that you want a new lease. The Coal Commission say "Certainly." They send you a draft. The draft is objected to. The terms are not agreed, and the Court is appealed to to decide the question. The case may not come on in Court, I regret to tell you, for nine months. If it does come on in nine months in the High Court of Justice it may then go to the Court of Appeal, and it may take much longer than nine months before you settle the terms of the lease. There is no saying what is going to happen in the meantime. The old tenant may say, "I cannot go on without knowing the terms of my new lease." Or again, the Coal Commission may say, "Well we cannot grant it until you have agreed to our terms." You may say that the rent ought to be halved. That is the sort of trouble that may arise under this Amendment, and in my view this would be a case where it is most inexpedient for this House to agree to the Amendment that is before us.

LORD HASTINGS

My Lords, as has so often before happened in the debates on this Bill, general principles of equity have been flooded by considerations doubtless of great importance but of relative triviality compared with the great principle. One of the disadvantages of possessing a simple mind is that one sees the objective and does not trouble too much about the thistles which may stand in the way. And here we have definitely a case in point. It so happens that each of the three interests concerned in this industry is equally interested in this particular Amendment. The noble Lords, Lord Gainford and Lord Teynham, have put with great clarity the point of view of the colliery proprietors. I would draw the attention of the House to the fact that under Clause II of this Bill the mineral owner is to receive an apportioned rent for his property; that is to say, he will have his present royalty rent appor- tioned as between coal and surface property, and so much of that rent as is apportioned to coal will be capitalised and compensated for—inadequately, as we all believe, but nevertheless it will be purchased, capitalised and compensated for. The amount which he is to receive under the apportionment of Clause II for his surface properties will continue to be paid by his colliery tenant. That in many cases will be a very substantial proportion of the whole. At the moment, when the lease to a colliery company expires, the owner has of course his own interest to serve in continuing that lease if there is still coal to be worked. Under the Bill, he will no longer have any say in the matter at all. The Coal Commission will be in a position to refuse the renewal of a lease to the mineral owner's tenant, and by one stroke of the pen to devaluate the whole of the surface properties without payment of any compensation therefor. That is a very important point.

If there were to be provisions for compensation in respect of surface properties in the event of a refusal to renew a lease, of course there would be nothing more to be said, but there are no such proposals in this Bill, and valuable property—property which continues to be valuable so long as the coal is in lease—is devaluated and ceases to have any value at the behest of the Coal Commission. Therefore, it is very much to the interest of the mineral owner, who will then be the surface owner, to support the view of the colliery proprietor in inserting an Amendment of the character moved by Lord Gainford. Then again, there is the interest of the mine worker. Very clearly that is an exceedingly important interest. Custom and self-interest on the part of the mineral owner to-day give to the mine worker practical security of the continuance of his employment in that particular area. But when you have the Coal Commission actuated, as they must be, by far wider considerations than those that can apply to an individual owner, then the mine worker's position becomes as precarious as does that of the mineral (or, as he will be, surface) owner or the colliery proprietor. All three interests are at the mercy of the Coal Commission who, however wisely they may work and administer their business, yet will be moved by considerations which do not apply to the individual owner.

The noble and learned Lord on the Woolsack has given as his opinion that the battle would arise not so much upon the re-issue of a lease as on the terms and conditions of that lease. He will be as well aware as I am that a colliery company proposing to dispute terms before a Court of Law would have, in the first place, to be very satisfied that their case was almost unanswerable, and they would also have to be prepared to incur a very great expense, because they would be disputing the ruling of a great corporation which would be in a position to take that colliery company from Court to Court to the highest Court of Appeal—not a matter which any colliery company would take up lightly. Apart from that, surely the noble and learned Lord would agree that neither the Coal Commission nor any other body, corporate or otherwise, in this country should be immune from the supervision of the Courts of justice. Why should the Coal Commission be set up as a kind of super-authority, having only their own rules to obey and their own considerations to consider?

THE LORD CHANCELLOR

No more than the present owner.

LORD HASTINGS

The noble and learned Lord reminds me, and it is perfectly true, that the present owner has the right to refuse renewal of the lease, but the motives which apply to him are not motives that would apply to the Coal Commission, which must approach the whole matter from a much wider viewpoint than any individual owner can possibly approach it. Enough has been said to show that the interests of three sections of this community are here bound together, and whereas no one of the three has reason to suppose that the Coal Commission would in any way be inequitable in the administration of their duties, at the same time the very propriety which may appeal to them may be a propriety which may place the individual coal company, surface owner, and group of mine workers in very grave jeopardy. I beg to support my noble friend Lord Gainford.

THE EARL OF LINDSAY

My Lords, I cannot help feeling that amongst colliery proprietors there will be a feeling of great disappointment that the very moderate Amendment moved by Lord Gainford will not be accepted by the Government. I cannot help feeling—and I say so with the greatest respect—that the noble and learned Lord on the Woolsack has assumed a case that may not exist. He has skated lightly over difficulties, and I rather think he has taken for granted that a colliery company might have no opposition at the end of a lease. That does not follow at all, because very likely there might be competition on the part of another company to get control of the lease that had just expired. In that case all the money spent on the making of roads, on ventilation, and so forth will have been wasted by the company that formerly held that lease. Then again, it was said that we must assume that the Coal Commission will be composed of men with reasonable and moderate views, who will not be unreasonable in withholding a renewal; but it must also be assumed that the colliery proprietors and those responsible for the working of the collieries will also be men of reason who will not make unreasonable objections to any conditions that are laid down in the granting of a new lease. I most sincerely hope that the Government will see their way to accept this extremely moderate Amendment.

EARL STANHOPE

My Lords, if I may say just a few words, the noble Lord opposite remarked that the Coal Commission would be moved by considerations which would not apply to the individual owner. I entirely agree with him. That is really why we object to this provision now proposed. In present circumstances the individual owner only looks to his individual interests, and therefore, in order to safeguard a colliery property, there is a right of appeal over the head of the mineral owner to the Railway and Canal Commission. The difference between the individual owner and the Coal Commission is this, that under the Bill the Commission are charged in Clause 2 to consider the national interest. Does the noble Lord imagine for one moment—I am quite certain he cannot—that they would not weigh in that connection such considerations as derelict villages; that if collieries are closed down they would not have, inevitably, to consider the whole question of the housing conditions of the miners; that if you close this pit the men now living in these cottages will no longer live in these cottages, but will have to give them up and have to live somewhere, and that someone will have to provide the houses? That at once becomes a national interest, increasing the obligation on local authorities to provide houses elsewhere. Similarly, in regard to schools for the children. Not only have the local authorities to provide schools, but my Department has to come to the Treasury, to the taxpayer, and to Parliament, and say they will pay, at the present moment, 50 per cent. of the cost.

At once the national interest arises, and therefore it does seem to me that it is quite unnecessary to be fearful that the Coal Commission are going to do anything so unwise as to bring a lease to an end unless there are overwhelming reasons for that decision to be taken. There may be occasions where you have a really bad leaseholder of whom you wish to get rid—a man who obeys none of the conditions of his lease. One of your Lordships told me of such a case in the course of these debates. It was the case of a man who under his lease was compelled to leave a pillar of coal for the safety of the building above it, and when the owner investigated the matter he found that that pillar of coal had been taken away. A man of that kind it may be necessary to get out at the earliest possible moment, and certainly at the end of his lease. But certainly I cannot imagine that the Coal Commission, any more than any private owner, are going to get rid of a colliery company and put in somebody else except for good reason. I do not profess to know anything about coal, as your Lordships know, but I do know something about tenancies coming to an end. I know that in every single instance it involves inevitably very largely increased expenditure on the unfortunate owner, and, except in cases where an owner is saddled with a tenant who not only in his own interest but in everybody's interest he has to get rid of, he never attempts to get rid of a tenant either of the surface or of a mine.

To bring the lease of a colliery company to an end is, I am told, far more serious than bringing the lease of a surface tenant to an end, because all the machinery in the colliery belongs to the colliery proprietor, and he can take it out and do apparently a great deal of damage to the mine which can be avoided by giving him a renewal of the lease. Why, under those conditions, should the Coal Commission hesitate for a moment to do so? It does seem to me that, charged as they are under the provisions of Clause 2 to consider the national interest, they will have all those considerations and many others that I have not mentioned to your Lordships in mind. Therefore it seems to me quite unnecessary to burden them with the prospect of having to fight cases in the Courts of Law. For those reasons I am afraid that the Government cannot possibly accept the Amendment which has been proposed by my noble friend Lord Gainford as an alternative for the one he had on the Paper before.

LORD GAINFORD

My Lords, there is an Act known as the Mining Facilities Act, 1923, and that Act does give coal owners the opportunity under the existing law, in the event of a colliery lessor not giving satisfactory terms to the lessee, of going to the Railway and Canal Commissioners. If coal is not let which ought to be let in the national interest, again the colliery proprietor can go to the Railway and Canal Commission. Under this Bill we shall not have the right to appeal to anybody except, apparently, under some extravagent process such as that to which the noble and learned Lord on the Woolsack has alluded. The position should not differ in this case. The Government have proposed and accepted the principle in relation to freehold coal that by the transfer of this coal the freeholders should not be any worse or any better off than they are now, but I submit that if no direction is given to the Commission coal proprietors may be a good deal worse off under the provisions of this Bill than they are now.

It is not that we doubt that in most cases, and indeed in nearly every case, the Coal Commission would be reasonable, but we do say that they are not infallible, and that there may be cases where it may be necessary that they should have the guidance to be reasonable which would be given by the words I suggest in my Amendment. All we are asking as a Mining Association, and as colliery proprietors on behalf of the industry, is that we shall have the opportunity in this Bill of directing the Commission that they shall be reasonable in regard to their attitude towards the renewal of leases. If they have a cogent reason why they should not renew the leases they will not, of course, renew the leases, and will take the consequences. I would like to tell the noble and learned Lord on the Woolsack that we are not in the habit in connection with the renewal of our leases of ever going to law. We do not want to go to law; it is very expensive; and it delays operations underground. All we want is that the Commission should act reasonably towards us, and if there should ever be Commissioners

Resolved in the negative and Amendment disagreed to accordingly.