§ Order of the Day for the Second Reading read.
§ THE EARL OF MUNSTER
My Lords, I beg to move that this Bill be now read a second time. It falls to my lot to-day to present to your Lordships the Government's proposals, as embodied in this Bill, to deal with the great coal mining industry. As many noble Lords will desire to speak on this Bill, I shall endeavour to confine my remarks within the narrowest possible compass, but the measure is one of first class importance, and I trust therefore the House will hear with me while I unfold the explanations it is my duty to offer. The House must 745 now be fairly familiar with the three Parts of this Bill, all of which are inter-related and complementary to one another, and my efforts will be directed to explain the principal portions of each Part which I believe are likely to be of interest and concern to this House. Part I of the Bill deals with the unification of coal royalties, and will come as no surprise to noble Lords, for I have the clearest recollection that during our discussions last summer on the Coal (Registration of Ownership) Act, the noble Viscount, Lord Halifax, and I both informed your Lordships that that Bill was the preliminary of a more lengthy and comprehensive measure which the Government hoped to submit to Parliament this Session. For generations we in these islands have legally recognised the owner of the surface as the rightful possessor of minerals—other than gold and silver—found beneath it. Moreover the owner is the individual undoubtedly entitled either to work or lease the minerals—as he may think fit—for his own benefit. Thus, any measure submitted by the Government which seeks to transfer the ownership of coal from the hands of some thousands of private persons to the single ownership of a statutory Commission, must involve a Bill not only of a highly complicated and legal character, but one also affecting matters of vital importance to the industry at large.
The majority of this House will regard private ownership as something inherent in the system of trade and commerce which has been built up in this country over a period of centuries. For my part I yield to no one in my belief in the system of private enterprise, but I have long realised that the ownership of this raw material in private hands is not conducive to the better economical working and organisation of the industry. Nevertheless, if this valuable institution is to be discontinued it is fundamental that any transfer of private property to a statutory Commission set up by the State should be accompanied by payment of compensation upon a basis which Parliament is satisfied is both fair and equitable. Over a period of many months this vast project has been shaped and developed, and I believe that in the proposals contained in this Bill we have an effective, efficient and workable substitute for the existing system as we know it. 746 The purpose of the Government has throughout been that of unification, as opposed to nationalisation, recommended from time to time by noble Lords opposite; and, in pursuance of our policy of unification, we propose that the ownership of coal will vest in an independent statutory body free from all political interference in its day-to-day administration, and with a non-Civil Service staff. Moreover, on the matter of finance, the Commission will itself, backed if necessary by a Treasury guarantee, raise the money required for the purchasing of the property and the financing of the scheme. There is no question apart from the element of risk involved in a Treasury guarantee of either profit or loss to the taxpayer. Any profits which will accrue from the ownership of the coal after the vesting date will be devoted not to the State but to the relief of rentcharges at present imposed upon the production of coal. I thought it necessary to make those very brief observations so as to bring out in a distinct and clear light the essential differences between unification and nationalisation of the raw material of the industry.
I pass now to explain to the House how the method of purchase was arrived at. The Government and the Mineral Owners' joint Committee agreed from the beginning of their conversations that the proper method of compensation was the fixing of a global sum equivalent to the value of all the coal-property to be acquired; and, to help in determining this figure, the average net annual income for the seven years 1928 to 1934 was agreed at £4,430,000. All that was, therefore, necessary was to agree the number of years' purchase of this sum which should be taken to represent the value of the ownership of all coal in the future. After a period of negotiations there seemed little prospect of any settlement being reached between the Government and the Mineral Owners' Joint Committee, and by agreement with the latter body the issue was submitted to arbitration. The Government and the Mineral Owners' Joint Committee accepted the personnel and terms of reference of that tribunal, and the Mineral Owners' Joint Committee undertook to accept the findings of this tribunal as representing the compensation properly payable in the event of the Government proceeding with their Bill for the unification of coal royalties. But the 747 Government with its many financial responsibilities could not agree to accept an unknown figure, and it reserved the right to reject the findings, but it did give a most important guarantee to this Joint Committee that in such circumstances it would not proceed with a Bill for the unification of coal royalties except on a basis of some global figure previously determined between the two parties.
The terms of reference invited the tribunal to determine the amount to be paid for the fee simple of all unworked coal and mines of coal in Great Britain, and certain rights agreed between the parties. These included such underground rights as are necessary for getting the coal, including the right to let down the surface (1) where the rights as to compensation or otherwise are now defined, subject to those rights, and (2) in the case of coal unsevered from the surface, on the basis of reasonable compensation for damage due to letting down the surface and any buildings or works thereon. For the purpose of this global figure no surface rights are included, and the property to be transferred is subject to and has the benefit of all working agreements and existing colliery leases in so far as they relate to coal and underground rights. It was, therefore, made clear and accepted by both parties that the global figure should represent the total value of all coal, known or unknown, proved or unproved, in this country, together with the underground rights of working it. Just over a year ago, the tribunal reported to the effect that fifteen was the appropriate number of years' purchase, and that the compensation would amount to the figure of £66,450,000.
There is no need for me to enter into a long historical review of this great industry, but it is desirable that I should remind the House of two important events which are relevant to this Bill. In 1919 a Royal Commission was set up and presided over by my noble friend Lord Sankey, and, although in their Report the members of that Commission disagreed on nearly every issue before them, they were unanimous in favour of the State acquisition of coal. In 1925 another Royal Commission was set up and presided over by the noble Viscount, Lord Samuel, and in their Report the members of that Commis- 748 sion were in favour of the nationalisation of coal royalties by the method of "out and out purchase." They believed that there was great discontent aroused, particularly amongst the miners, by the system of privately-owned royalties and they held, to quote their own words, thatA system which vests the ownership of minerals under the surface in the owner of the surface means that the planning of the mines is influenced continually by surface boundaries and surface rights. But surface boundaries have no relevance at all, and surface rights only a minor relevance, to the proper organisation of the industry underground.Fifteen years after the Sankey Commission reported my noble friend Lord Gainford wrote these words:The antiquated provisions in many of the royalty leases ought no longer to exist, as they prevent working the coal underground to the best advantage. Possibly it would be better if royalties were nationalised, or at any rate in the hands of one body by whom the best terms could be given so as to secure the best underground working conditions and the most economical production.If your Lordships accept my noble friend as one of the authorities on coal mining in this House, it is clear that in the opinion of this great expert the industry is hampered by petty restrictions and unscientific developments which by their nature add to the difficulties of an inherently difficult industry.
We are fortunate to have as members of this House both noble Viscounts who were Chairmen of the Royal Commissions to which I have referred, and I hope that during the course of our discussions we shall hear the reasons which led them to the recommendations contained in their Reports nineteen and thirteen years ago respectively. It is perfectly true to say that following the publication of the Reports of both Royal Commissions, legislation was introduced which proved to be a useful deterrent to the unreasonable mineral owner; but, nevertheless, it has been constantly represented to us that the present system of separate ownership of royalties is an inherent obstacle to the better organisation and to the effective and efficient working of the industry. In our proposals we are neither advocating universal confiscation, nor are we suggesting the repudiation of royalties without compensation. Indeed we would never be parties to the abolition of the system of royalties except on the basis of the payment of fair compensation. To a very great extent the procedure to be 749 followed until the vesting day has been formulated with the assistance, co-operation, and advice of the Mineral Owners' Joint Committee, to whose constructive criticism of the machinery clauses of the Bill I should like to pay a well-deserved tribute.
I now turn to an explanation of the principal clauses of Part I of the Bill. Clause 1 and the First Schedule set out and explain the constitution of the Coal Commission, and their general functions in carrying out the provisions of Part I of the Bill are dealt with in the second clause. The House will observe that, except for searching and boring for coal, they are not to engage in the business of coal mining, but their duty is to control and manage the property transferred to them on the vesting date, by granting leases to colliery undertakings and otherwise, and thus promoting the interests, efficiency, and better organisation of the coal industry. I said earlier that the Commission would not be subject to interference in the day-to-day administration of their property, but subsection (2) of this clause provides, quite properly in my opinion, that the Government shall be able, through the Board of Trade, to give genera] directions on matters of national interest, and this responsibility given to my right honourable friend will bring the policy of the Commission before Parliament.
Under Clause 3, the Commission will acquire the fee simple in all coal and mines of coal now being worked or not, and whether now known to exist or not, and there are included in the acquisition any surface servitudes which are found to be, in a legal sense, inseparably annexed to coal, and, except as provided, such minerals other than coal as are actually comprised (with coal) in any coal-mining lease. Your Lordships will notice that the property is to be transferred to the Commission on the 1st July, 1942, called the vesting date, and the coal is to be held until that date by the existing owners as though a contract for sale had been executed by them on the 1st January next, called the valuation date, with provision for completion on the vesting date. During this period of three and a half years the present owners will retain their property but must not depreciate it, and, broadly, the normal rules of law and equity will apply. Clause 4 makes it 750 clear that the property will vest in the Commission with the benefit of such rights and subject to the burden of such obligations as would attach to the property if transferred by a -normal conveyance as described in the Second Schedule. The House will observe that by Clause 5 existing colliery leases, and working rights secured by working facilities orders, are untouched and safeguarded by the Bill.
I now turn to Clauses 6 and 7 and the Third Schedule which deal with the ascertainment of the value of each holding to be acquired and the distribution of compensation. The House will recall that the object of the Registration Act passed last summer was to establish a Register of coal properties. It provided for the collection and elucidation of particulars of the property and rights for which compensation would ultimately become due. We propose to transfer to the Commission the functions and liabilities of the Board of Trade under the Registration Act, and to extend until the valuation date the period of liability for the payment of applicants' costs. On the passing of this Bill a Central Valuation Board will be set up in accordance with the procedure specified in the Third Schedule, and its duty will be to divide the country into a number of regions and allocate a portion of the global sum to each region. Immediately after that a Valuation Board for each such region will be appointed. It will be generally known to your Lordships that the valuation of mineral properties is a highly technical process, and the constitution of these Boards provides for the fullest possible use of the existing body of expert knowledge. Their duties will be to value each separate coal holding, as defined in Part I of the Schedule. including any subsidiary minerals or other subsidiary coal hereditaments which may be comprised in it; these latter, of course, will be paid for separately and as an addition to the global figure I have already mentioned.
Each holding will be valued on its merits, and all relevant factors will be taken into consideration. The fifteen years' purchase upon which the global figure was based will not necessarily be applicable to the valuation of individual properties, but the valuation in every case will be scaled up or down to bring the total of the individual valuations in each region to the amount of the regional share of the global figure, which was accepted by the Mineral Owners' Joint Committee. 751 Noble Lords will know that some properties will have far too short a remaining life to merit a valuation at fifteen years' purchase, and it seems only reasonable to believe that, even after taking account of compensation for undeveloped properties, some developed areas will secure far more than fifteen years' purchase of their expected future yield. Any claimant who is dissatisfied with the valuation given to his property by the Regional Valuation Board can give notice to the Board of Trade to have his claim referred for determination by a referee selected from a panel appointed by the Board of Trade. Payment of compensation becomes due on the vesting date, that is 1st July, 1942, and from this date interest will become payable on all outstanding payments. There is in the Third Schedule, as noble Lords will have noticed, an important provision enabling the Commission, subject to certain conditions as to notice and so forth, to make payments-on-account in advance of the vesting date or before a valuation has been certified for assessment and payment.
Clauses 8 and 9 carry out what I have already said about the position of the present owners during the interim period. Clause 9 contains a provision requiring notice to be given to the Commission during this period of any alterations, variations or renewals of any leases, and generally for enabling owners to ascertain within a limited time whether there is any objection to any proposed dealing with their property. Clause 10 and the Fourth Schedule empower the Commission, when it thinks fit, to require the formal dissection after the vesting date of leases which comprise both premises which are and are not vested in the Commission. I think that one of the main objects of the unification of coal royalties is to remove the difficulties caused by a multiplicity of leases covering the coal of a single colliery or undertaking. My advisers have informed me that cases are known where a single colliery company has many leases each containing different terms for working the coal and each with a minimum rent—and as an extreme example, one case is known of a colliery with as many as thirty separate leases. It must be obvious that a system such as this does not lead to efficient or economical production of coal and after the vesting date the 752 Commission will, of course, have power to grant a consolidated lease in agreement with the lessee, but it did appear to the Government that the work of unifying the various interests should not be held up until that date and accordingly Clause II provides an opportunity for consolidating leases before the vesting date, but it guarantees to the royalty owners concerned the net rent which they would have received up to the vesting date had the leases not been consolidated.
Clause 12 also deals with a special and important class of case. Your Lordships will, I think, have appreciated that throughout the Bill the rights of colliery lessees are respected, but there are a number of mines where the coal is worked by the individual or company owning the freehold, and of course in such cases there is no lease in existence. This clause provides that such individuals or companies shall, after the vesting date, be entitled to a lease on the terms and conditions ruling in the district or on more favourable terms and conditions if in the opinion of the Commission the acquisition of the royalty and the grant of a lease on the normal terms would seriously affect their financial position. Clause 14 extends to the Commission (or its licensee) subject to proper restrictions, such underground rights as are necessary for the working of coal. The House will observe that the coal in the Commission's hands will not be liable to any new payments for underground way-leaves.
I now turn to the financial provisions of the measure. Clause 20 provides for the establishment of a reserve fund, by annual appropriations from any annual surplus, of such an amount as the Government may require. Clause 21 provides that if at any time it appears to the Commission that, after providing for the service of the loan and other expenses and appropriation to reserve, it is likely to have a surplus income, that surplus may be used to make reduction in rents payable in respect of underground way-leaves or to remove anomalies in royalty payments in a particular district or between districts. After reduction of rents of the kinds I have mentioned has been substantially fulfilled, Parliament is to have an opportunity of considering in what form any further reductions in rents shall be made.
I am not in a position to give the House any indication when sufficient sums 753 will become available to make one or more of these reductions. It must depend on a variety of factors including, in particular, the amount of the loan which the Commission will require to raise, the terms upon which it raises it and the output of the coal industry after the vesting date; which last depends both upon the course of trade and also on the continuation of peace in the industry and the settling of all differences by peaceful negotiation. I would like, however, to remind the House that, whilst it would be absurd to suggest that any reduction in royalties now averaging less than 6d. a ton could, of itself, have any outstanding effect upon the economics of the industry, it is a fact that any reduction in costs which result in any form from this Bill would assist the level of wages of colliery workers. The House will notice that the maximum sum which the Commission is authorised to borrow is £10,000,000 in excess of the £66,450,000 of the global figure for coal. This additional sum is to cover all such things as subsidiary minerals and surface servitudes acquired with coal; costs of registration, valuation and payment of compensation; interest on compensation-payments; interest on any loans which become due before royalties are available to meet it; and finally administrative expenses during the initial period.
Clauses 29 and 30 deal with bodies of the character of statutory undertakings, the maintenance of whose undertakings is obviously a matter of public importance. Clause 29 provides that un-worked coal actually owned by such a body and supporting its undertaking shall not be worked except with its consent or, on appeal, the consent of the Railway and Canal Commission, and Clause 30 makes it clear that any rights that any such bodies have, under any statutory mining codes, to restrict the working of minerals not owned by them are not affected by this Bill.
Let me now summarise quite briefly the advantages which we think will accrue to the coal industry after the vesting date—that is to say, the date upon which the coal is transferred to the Commission's ownership. It will make for the better organisation of the coal industry and the easier development of the mining of coal, for up to the present colliery companies have had to adapt their workings to the consideration of surface ownership 754 by leaving barriers of coal underground as a boundary indication to the different royalty owners. If, by unification, we can sweep away these conflicting claims and interests and remove the difficulties experienced, the mining of coal in the future can be undertaken upon better economical terms and conditions. As I have said, in the course of time a surplus will be available for the reduction of royalty rents and this benefit will in the main be felt by a betterment of the organisation of the industry and there is of course the psychological effect of removing for all time one of the causes of discontent and unrest felt by the colliery worker. I have heard it said that the postponement of the final vesting of the property in the hands of the Commission until July I, 1942, will delay any advantages of unification to that extent, but there are clauses in the Bill, to which I have referred, for providing a substantial measure of control and influence over development on the part of the Commission during the interim period. The whole of Part I is designed as a constructive reform to assist the industry in the variety of ways I have mentioned.
I now turn to offer your Lordships an explanation of Part II of the Bill. This is not by any means the first time that your Lordships have been called upon to discuss the case for reducing the number of coal mining undertakings. Proposals of this nature have been argued again and again ever since it became the subject of recommendations contained in the Reports of Committees and Commissions issued since the War. With the knowledge that I have obtained during the last three years I do believe that there exists a case for amalgamations of colliery undertakings if rightly and properly selected, but I am under no illusion whatever that the mere act of amalgamation will provide the solution of all difficulties of the industry or that they are in all circumstances of beneficial and lasting value. I know that an examination of the constituent units of the industry and the distribution of productive capacity among them reveals that no less than 798 undertakings out of a total of 963 are producing 40 per cent. of the output, and this alone, I submit, quite clearly shows that a very considerable degree of amalgamation particularly in the case of medium sized concerns is at any rate in theory possible.
755 In proper cases—and the Commission must, naturally, exercise great care in making recommendations to the Board of Trade—the promotion of such schemes will assist in reducing the costs of production and increasing efficiency which should result in improving the financial position of the industry and enable it to yield higher wages, increased profits and possibly reduced prices. Surely, is it not essential that if we give to the industry powers in regard to selling prices, we shall at the same time ensure that no remediable defects in internal organisation are left untouched? I can assure the House that I am only too conscious of the objections and difficulties of compelling amalgamations; but the industry has never availed itself sufficiently of the opportunity for voluntary reorganisation from within, and it was for that reason that Part II of the 1930 Act first contained machinery for compulsory powers. Noble Lords will recall that under that Act any scheme submitted by the Coal Mines Reorganisation Commission was not to be confirmed by the Railway and Canal Commission unless they were satisfied that it would be in the national interest to do so; that it would result in lowering the cost of production or disposal of coal; that it would not be financially injurious to any of the undertakings proposed to be amalgamated; and that the terms of the scheme were fair and equitable to all persons affected thereby. It ultimately proved that the provisions of the 1930 Act were quite ineffective, and it therefore became obvious that they could not possibly be retained.
It seems clear upon consideration that the question of national interest is not capable of proof before a Court of Law or, indeed, one that it would be proper to ask a judicial body to decide. Accordingly the responsibility for that decision is, by this Bill, transferred to Parliament, which by its very composition is the one and only body which can give a decision on any question of national interest. The House will recall that my noble friend Viscount Runciman, in May, 1936, introduced into another place a Bill which was ultimately withdrawn after he had given an undertaking that it would be amended to provide for a two years' respite from compulsion, to exclude ancillary undertakings, and to provide for an "independent impartial authority" to examine 756 schemes before their submission to Parliament. Part 11 of this Bill goes a great deal further, by providing that questions affecting the national interest shall be investigated and considered by Parliament itself, and that subsequent questions as to the propriety and equity of any scheme when formulated shall remain with the Railway and Canal Commission.
Clause 42 provides that the Coal Mines Reorganisation Commission shall cease to exist, and transfers its responsibilities, powers and duties to the new Coal Commission; but the expenses of this work will continue, as before, to be borne by the Exchequer. Noble Lords will, I think, agree that, having set up a Commission charged with the duty of administering the landlord interest in all coal, this is the appropriate body to be charged with the duty of promoting desirable amalgamations and, where necessary, taking steps to have compulsion applied. Possibly it would be useful if I summarised the general effect and intention of these proposals. It will not be possible for any compulsory scheme to be submitted to the Board of Trade before December 31, 1939—that is to say, more than two years after the date of the introduction of this Bill. Even at that time there will still be no amalgamation by compulsion unless certain conditions are or have been fulfilled. The Commission will have to declare that the colliery owners in a specified area have not made adequate progress voluntarily. The Board of Trade have to accept this view, and submit to Parliament that it is expedient that the number of undertakings should be reduced by amalgamation in that area. Then Parliament has to approve by passing a Bill confirming an order laid before it by the Board of Trade to the effect that it is expedient that the Commission's powers should be exercisable in the specified area. Under Provisional Order procedure every affected person, whether coal owner, coal miner or local authority, will have an opportunity to appear and state his case.
Not until Parliament has approved for any specified area does the machinery for compulsion contained in the 1930 Act come to life again; and this in itself gives yet another opportunity for voluntary action before compulsion becomes operative. As before, these compulsory powers will reside in the Railway and Canal Commission on the application of the Coal Commission, but since Parliament will 757 have already accepted the view that amalgamation is expedient in the locality in question, it will no longer be for this Court to consider whether amalgamations are or are not in the national interest. It will, however, still be necessary to prove to the Commission that the terms of any scheme submitted are fair and equitable to everyone concerned, and that it is calculated to avoid financial injury to the interests affected, and, further, that it will enable the amalgamated companies to be efficiently carried on. If the Court are satisfied as to these requirements, they will confirm the scheme. If not, they can modify it, or, if their view is that it cannot be made satisfactory by modification, they have power to reject the scheme. We hope that these powers will never be invoked, but that the industry itself will proceed without delay to proper reorganisation, which under this Bill is simplified by unification of coal royalties under a single ownership. It is far preferable that the industry should plan and make its own developments on a voluntary basis, than that the new Commission should exert the powers proposed to be given to it. Only in cases of complete and utter failure of the industry will the Commission take the necessary steps of having compulsion applied.
I come next to Part III of the Bill. The House must know that for some years the root cause of the troubles in the industry has been the excess of productive capacity over market demands and requirements. This has led to fierce competition between colliery companies, with the result that the proceeds of the industry have been continually reduced. The schemes which were introduced in 1930 provided for a system of quantitative regulation in order to bring production nearer demand and also for a system of minimum prices designed to restore prices to an economic level. Although these schemes did not succeed in raising prices or even maintaining the level, they did steady the fall during the worst years of depression, and they have now come to stay as an integral part of the coal industry. Three years ago, as your Lordships will remember, immediate trouble was threatening in the coal industry. The owners were faced with a demand for increased wages, and it was perfectly clear that the proceeds of the industry were quite insufficient to meet any such demand. Certain consumers were asked 758 by colliery companies to agree voluntarily to an increase in their contract prices, in order to assist in the immediate grant of some improvement in wages. Although a large number of consumers readily agreed to this course, it is not one which can be repeated, and surely it falls upon the colliery owners to put their house in order as quickly and as rapidly as possible, in order to meet the unsatisfied part of the wage demand. These owners did indeed give a guarantee arid undertaking to the Government that by the middle of 1936 there would be in operation an organisation for the complete and effective control of the sale of coal in each mining district, with co-ordination between districts through the Central Council. These organisations were brought into operation by means of amendments to the schemes then in force under Part I of the 193o Act.
Although it is true that increase in price coincided with the introduction of selling schemes, the greater part was due to the increased demand for coal. I wonder if the House realises that wages for colliery workers follow prices the whole time and that any increase in the pithead price of coal directly affects the wages of those engaged in the industry. I am not in a position, nor, I think, is it possible, to say whether the output wll remain at the high level of 1937, but if trade conditions should weaken the industry will again be faced with an excess of productive capacity which, if unchecked, would bring about the same chaotic conditions as were prevailing in the past, and the continuation of these schemes is necessary if only as an adequate insurance against possible difficulties arising in the future.
I think it had always been understood that the Government would invite Parliament to extend Part I of the 1930 Act for a further five years from 1937. Indeed, without that understanding the threatened dispute of 1935 would never have been settled. Part III of the Bill proposes that Part I of the 1930 Act should be extended for a further period of five years, and that Section 5 of that Act, which deals with the committees of investigation, and Section 8, which deals with the disclosure of information by those committees, should be amended. Since the selling schemes conferred extensive powers on the coal industry, it was obviously necessary to afford consumers 759 protection against possible exploitation, and committees of investigation were set up in each district and charged with the duty of inquiring into any complaint. Although the number of complaints has been surprisingly small, the Government believe that this strengthening of the powers given to the industry over the price of coal must have as a complement the strengthening of the committees of investigation, and the proposals in the Eighth Schedule are designed to this effect.
Representations have been made in the past to the Secretary for Mines by the Conjoint Conference of Public Utility Undertakings and the Central Council of Colliery Owners, that the independent chairmen of the committees of investigation should be of the legal profession, and although this has been done already by administrative action, paragraph I of the Eighth Schedule makes this statutorily binding on the Minister. The rest of the constitution of the committees of investigation remains unaltered, but there will be consultation with the noble and learned Lord on the Woolsack concerning the appointment of a member of the legal profession as Chairman of any Committee of Investigation or of the Central Appeal Tribunal. We further propose that, to avoid delay, if there should be a large increase in the number of cases brought before the committees of investigation, the Board of Trade shall set up a panel of reserve Chairmen, and in addition appoint two alternate members with each member of the committee. Under rules which are at present made by the Board of Trade the committees of investigation meet in private, unless they decide otherwise. It is now proposed, in accordance with the general rules of English justice, that these committees shall take evidence in public unless it relates to any particular business or for any special reason the committee otherwise decide, but in all cases their decisions must be delivered in public.
Organised consumers were somewhat doubtful whether these committees of investigation gave them adequate protection against exploitation under the schemes, and at the request of the Government the Central Council of Colliery Owners have given certain assurances, and without additional legislation the principle of these 760 assurances will be embodied in the selling schemes, and thus be given statutory force. I attach considerable importance to these assurances, which perhaps I might quite briefly describe. Firstly, if a consumer desires to change his source of supply for good and sufficient reason—other than reasons of price—difficulties will not be put in the way. Secondly, the executive board in each district will be prepared to meet representative bodies of consumers, to discuss questions appertaining to the supply of coal, including the general level of prices. Thirdly, arrangements will be made whereby a purchaser will be able to refer to a committee of investigation any price quoted to him by a coal owner, and not merely the price fixed by the controlling authority, as was formerly the case. Fourthly and lastly, pending the result of a complaint lodged with a committee of investigation, the coal forming the subject of complaint will be reserved for the complainant on his giving an undertaking to purchase it when the proceedings are over, at the price resulting therefrom, and an amendment of price will follow a recommendation of the committee which is accepted by the executive board. And, finally, we propose to set in motion a Central Appeal Tribunal to which appeals can be taken from the committees of investigation. Its composition will be in accordance with the Eighth Schedule and its award will be final and binding on all parties. I feel that these assurances will go far towards meeting, the difficulties and the fears with regard to the operation of the schemes that might have been experienced or felt by consumers.
I have now completed my summary of the principal clauses of the three Parts of the Bill, and if I have delayed your Lordships too long, I plead to be excused on the grounds of the importance and the intricacy of the measure. The contribution we offer to the industry for its reorganisation and better efficiency is that of a long-term policy devoted to removing the difficulties experienced at the present time. If, as the mineral owners have stated, it is not their wish to be obstructive, we can with their help and the advice of your Lordships assist in the new development of an old industry, and by removing the causes of unrest and disquiet look to the future with more happiness than the past twenty distracted years. This Bill will, I feel sure, receive 761 from the hands of your Lordships that careful deliberation that is due to it, and the House will recollect during the course of the debate that on this Bill rests the happiness, the security and the welfare of the homes of hundreds of thousands of our fellow citizens. I submit the Bill with every confidence for Second Reading.
§ Moved, That the Bill be now read 2£.—(The Earl of Munster.)
§ LORD ADDISON
My Lords, I am sure every one of your Lordships will have listened with great interest to the lucid exposition of the Bill which the noble Earl has given us, but I would recall your Lordships to some of his opening observations. The noble Earl said that this Bill represented the policy of His Majesty's Government for dealing with the coal industry. I hope that that somewhat narrow view of what the coal industry really includes is not the final word of His Majesty's Government. At all events, I do not think it will be at all difficult in the course of this discussion to show that the coal industry—using that expression in its proper and comprehensive form—includes very much more than is in this Bill, complicated as it is. I notice also that the noble Earl, quite properly, with the solicitudes he has to bear in mind, opened his observations with a tribute to private enterprise and a fervent disclaimer that the last thing His Majesty's Government desired was to interfere with the ark of the covenant. I confess that his logic is not quite so apparent as the charm with which he stated his case. Because if the "past twenty distracted years" (to use his own expression) are the outward and visible sign of the success of the conduct of this industry by private enterprise, it is a strange logic that the noble Earl commends to us.
After all, however we examine this Bill, from start to finish it is a limitation, or a control, or an alteration of the operation of private enterprise and, as such we on our side, represented by so tiny a section in this House but, I suggest, representing a much greater body of opinion outside, receive the proposals of the Bill in an entirely friendly spirit, although I shall have, on my noble friends' behalf, some criticisms to make as to its limitations. I would refer your Lordships to the first limitation—a very important one—in Clause 2: 762The Commission shall not themselves engage in the business of coal-mining or carry on any operations for coal-mining purposes ….Why is this limitation placed upon the Commission? It will be a highly efficient body. I confess that "the past twenty distracted years" do not seem to me to offer a very good justification for this veto upon the operations of the Commission. The noble Earl told us that the ownership in private hands of the underground minerals had not been conducive to the best development of the industry, that it had been hampered by unscientific development—I am using his own words. Well, if that is so, and it is so evidently, then why should not this Commission be allowed to make use of the skill and resources which it will be able to command and, at all events in some modest measure here or there, try an experiment or two in management by a National Commission of the business of the industry? I know it will be hopeless for us to suggest that this veto shall be removed, but I do suggest that its imposition is entirely out of accord with the whole of the speech of the noble Earl, and out of accord with the circumstances which have led to the presentation of the Bill.
However, I pass from that and will make a few observations on the question of the global sum. Those of us who take the view of things that I do notice that fifteen years' purchase of these undertakings is the estimate of the proper figure which an independent tribunal has arrived at. I have no doubt that this very instructive case will furnish material in the future for many speeches. Some of us think that much more than underground minerals ought to belong to the State, and some of us—I myself at different times in generous moods—have suggested that more than fifteen years' purchase might be equitable. But we know that in this case an independent tribunal has come to the conclusion that fifteen years is enough. I make no further comment. My friends, of course, would not say a word against that limitation, but we note it with interest. But I see that at all events there is a considerable period of grace. It is not to be till 1942, and I see that the calculations made in another place were to the effect that that would add about another £20,000,000 to the £66,450,000 in terms 763 of receipts between now and then. Well, it will be at all events some comfort to those who had their claims reduced in this startling fashion, that at all events this sum will be added to the £66,450,000. I expect that the most reverend Primate who was here a few moments ago will have something to say later on about the way in which ecclesiastical funds will be affected by the global sum. It will be claimed, I feel sure, that ecclesiastical funds will be reduced to a considerable extent. But I surmise with considerable confidence that the frugal and efficient administration of ecclesiastical funds will not leave them much worse off.
Now I pass to the other and undefined section of compensation which I consider worthy of closer examination than the noble Earl permitted himself to furnish us with in his opening speech. I refer to the compensation which is to be accorded for subsidiary coal hereditaments. I am not quite sure what they are—I am not quite sure whether anybody knows what they are—but at all events a sum of £10,000,000 is allotted. If that sum is exceeded, sooner or later the Commission will come to Parliament and, like Oliver, ask for more. I suggest with a good deal of confidence that they will certainly come to Parliament and ask for more, and the reason is to be found in some words in subsection (4) of Clause 7 on page 7 to which I think exception must be taken. When the time comes, whether I am supported or not to any material extent, I shall certainly move an Amendment on this point.
I ask your Lordships to notice the basis of valuation for these acquired undertakings. It is to this effect:The value of a holding shall be taken to be the amount which the holding might have been expected to realise if … the holding had been sold on the valuation date in the open market by the existing owners thereof, selling as willing vendors to a willing purchaser.These words, "a willing purchaser," should not be there. In the old Lands Clauses Act, which gave rise as we know to some very unjust awards against authorities acquiring land for public purposes, the injustice of the awards came in the end because of the existence in the old Act of these words, and they were removed in the Acquisition of Land Act, 1919. I would remind your Lordships of 764 the formula which is embodied in that Act and which has worked with justice and smoothness ever since:The value of the land shall, subject as hereinafter provided, be the amount which the land, if sold in the open market by a willing seller, might be expected to realise.Your Lordships will notice that the words, "to a willing purchaser," are not there, and they were deliberately omitted because it is clear that the value of a property to the purchaser is not an item in its value.
This change arose out of the extraordinary Thirlmere case which your Lordships will remember in which the Manchester Corporation acquired a considerable amount of land for its reservoir, which was relatively valueless hillside land. The value to the sellers was trifling; it would have been generous to have valued it at £5 an acre; at all events it was a very small sum; but the value of the land as a catchment area to the citizens of Manchester in providing them with water was, of course, very high, and accordingly the Manchester Corporation, because of the existence in the Act of the words "to a willing purchaser" had to pay a most exorbitant sum because the land was valuable to them for the purpose for which they wanted it. Another objection to these words is that a purchaser may make various uses of an undertaking or property so acquired. One purchaser may use it so as to enhance its value in a much greater way than another purchaser, but whatever may be the object and the ultimate operations of the purchaser they have nothing whatever to do with the existing value of the undertaking to be acquired. I suggest that it is a reversion to a very bad and unfortunate precedent, which Parliament had to remove in the public interest, that these words have been allowed, somehow or other, to creep into this Bill. I hope that before your Lordships have done with the Bill you will remove them.
Those who are concerned with the present ownership of these subsidiary coal hereditaments will derive great comfort from the Bill because all their costs are going to be paid. There will be registration of particulars, and all the claims for compensation and the fees of those who represent them are, I gather, going to be paid under the provisions of this Bill. 765 According to the Schedule on page 68 the Commission will pay all the costs of the claimants unless they are in some degree amazingly unreasonable. I can see there will be a real good time for the members of the legal profession in contesting the claims here because the claimants will feel quite free, knowing that in any case they will not be prejudiced by the findings of the tribunal so far as costs are concerned.
I would like to turn to another important item in the Bill, and I deliberately confine myself to important items because so many of your Lordships wish to speak. The point here is, what is to happen in the fortunate event of the Commission having a surplus in its funds? I suspect it will be some time before that happens, considering all the costs that may fall upon them, but if the Commission has a surplus at any time, under Clause 21 on page 23 that surplus will be devoted to a reduction of rents. No one would take objection to a reasonable reduction of rents so far as the funds available may allow if the rents are held to be unreasonable, but why should the profits, if there are any profits, be confined to this purpose? I suggest that there are other people intimately concerned in the well-being of the industry besides those who happen to be running an undertaking for which they are paying rent. What about the miners? Surely they are entitled to some consideration in the event of this undertaking being profitable and successful?
There are also the consumers. I do not think the consumers will derive very great comfort from the amendments in respect of the Commission which the noble Earl has explained. I hope they will get something out of it, but it is a laborious and prolonged procedure. Surely it would have been better, if the Commission make a profit, that they should be enabled if they so wish to use some of that profit for helping the miners or for doing something to mitigate the costs of distribution. My noble friend Viscount Samuel will speak to us later and because of that I do not propose to say anything about the charges for the consumers and the costs of distribution, but the Sankey Commission and the Samuel Commission devoted a great deal of time and a great part of the Reports which they issued to the defects which at present attach to the selling organisations, and to the margin of increase of cost between the pithead and the 766 consumer. There is not a word about any of that in this Bill, yet the noble Earl would have us believe that it is the last word of His Majesty's Government in the reform of the coal industry. I suggest that the costs between the pithead and the householder are just as worthy of control and scientific management, and need it just as much as the inequalities which have been shown to exist in other branches of the industry. It is an amazing thing that the Government should present proposals professing, at all events, to deal with the inequalities and inadequacies of the existing coal industry without providing any power whatever, so far as I can see, for the Commission that will help to remove the serious waste that at present attaches to distribution and marketing, apart entirely from any proposals to give the miners any share in the benefits which the Bill may bring.
The next topic to which I should like to refer for a few minutes is that of amalgamation. The noble Earl said that amalgamation was very necessary, that the Bill of 1930 had been provided for the purpose of promoting amalgamations, with necessary compulsion in the last instance, that it had been a failure, and that voluntary amalgamations of a private kind had proceeded too slowly, and so on. Here we are now to have at long last a proposal for achieving amalgamation, if necessary by compulsion, and the machinery is before your Lordships. I suggest that any manager of a colliery undertaking that objects to amalgamation may lose no sleep because of the proposals of the Bill, for anything more ludicrously inefficient it would be impossible to imagine. A report will be made to the Board of Trade, and they will then make a Provisional Order which will come before Parliament. May I remind your Lordships as to the limitations of that procedure? I believe I am correct in saying that the Provisional Order Bill will have to be laid some time or other between February and May and that all the rest of the year is excluded by the Standing Orders. That Provisional Order procedure requires the Bill to be laid before Whitsuntide, therefore none of these operations will be possible in any other part of the year.
Then, better still for some, the Bill will be referred to the usual Committee, and every party, as the noble Earl 767 assured us, who may be interested, directly or indirectly, will be represented by counsel before the Provisional Order Bill Committee, and the proceedings will be, I dare say, exceedingly prolonged. Perhaps the noble Earl will tell us if the Commission are going to pay all the expenses of that procedure. So far as I can see they are, and it will be open, I gather, to any party to brief the most expensive Parliamentary counsel that he may be able to employ. If the Commission are to pay all the costs, if an Amending Order is ever made and reported by the Board of Trade we shall be presenting the Parliamentary Bar with largesse in an extraordinarily generous manner. I think the members of the Parliamentary Bar will not fail in their usual wisdom to take advantage of our generosity. Perhaps the noble Earl will tell us if it is really proposed that all the expense of this exceedingly costly procedure is to fall upon the Commission. I think it is. It is very important, however, that that point should be cleared up. If we have regard to the limitations which now apply to Provisional Order procedure and to the fight which will be possible before any order of the simplest and of the most reasonable kind can be made statutory by this procedure in Parliament, I think it is a fair thing to prophesy that the compulsory amalgamation orders that will be made under this Bill will be exceedingly few in number. For my part I think the procedure is now so cumbrous and is certain to be so costly that we cannot expect that there will be any compulsory amalgamation that matters at all so far as this Bill is concerned.
The one part of the Bill to which the Party I represent can give a modest measure of support is that dealing with the case some of us have tried to make so vainly outside. It is recognised that these minerals, if they are to be sensibly and properly developed, should belong to a national authority whose responsibility it should be to see that they are made scientific and good use of, but it is much to be regretted, I think, that a Bill which sets out to reform the coal industry should confine the benefits, if any, that are to be derived from these operations to the lowering of rents, that they should be limited to that one single monetary benefit, and that nothing should be done 768 under the provisions of the Bill for those who get the coal, and that there is no substantial mention anywhere in the Bill of, and certainly no benefit so far as I can see for, any of those who use the coal. With those two remarkable limitations in the Bill I hope that the noble Earl will not persist in his presentation of it as representing the views of His Majesty's Government as to what ought to be done for the coal industry. But for its small blessings, limited as they are and cumbered as they are with so much costly procedure, recognising that they are there and that they are a little of the something that those of us who take my view have always wished for, we should give the Bill what support we can, moving a few Amendments in Committee.
THE MARQUESS OF CREWE
My Lords, in the first instance I wish to express my thanks, and I am sure the thanks also of my friends here, to the noble Earl who moved the Second Reading for the manner in which he performed his task. Speaking from some experience I can truly say that I cannot recall a case in which an important and complicated measure has been moved from the Government Bench by one of its occupants—not the most senior—more forcibly, or more lucidly, and, I would add with gratitude, more audibly. This, of course, cannot be regarded in any sense as a Party measure, because in its essence it does not contravene the principles either of the Conservative Party or the Liberal Party or the Socialist Party; but it is a measure which causes in many minds a strong degree of prejudice. The noble Lord who has just spoken did not pretend to regard it with a purely unprejudiced eye, and I equally confess that I do not approach it in any way without bias, because I am myself an owner of some mineral royalties, although on a very much more modest scale than that of some who will be later taking part in this debate.
The Bill divides itself into two main divisions, that is to say, one dealing with the transference of royalty rents and the other with certain matters affecting the actual working of the mines. These are in a sense completely independent of each other. I think we are all well aware that the royalty owner as such is not a particularly popular figure. The ownership of the minerals below the surface is not regarded as being precisely on all fours 769 with the ownership of the surface itself even by some of us who, unlike noble Lords on the front Opposition Bench, do not hold that there ought to be no private ownership of either. But the difference between the surface and what is below the surface is not quite simple enough definitely to draw a sharp line between the two. A man who owns the surface digs a hole in the ground and from it he takes a quantity of sand. Even if it is common sand it is of some value, and if it is glass making sand he gets a very high price per cubic foot. He digs a rather deeper hole and he finds himself in possession of a stone quarry. Possibly if it is a very large hole, indeed it may be a slate quarry of far greater value than any coal enterprise covering a similar surface. But if he lets down a cage into a colliery apparently the position is quite different, and although, as we know very well, coal itself and other minerals, particularly lead, have been frequently worked from the surface, yet a distinction is attempted to be drawn between the two.
The result is, as I say, that the owners of minerals have been more shyly looked on than the owners of agricultural land. I venture to think that that is not quite fair. They have been regarded rather as the less considerate landlords in the South and West of Ireland were regarded before the land legislation there; that is to say, as people who abstracted a considerable revenue from other people's industry and did nothing whatever to assist it. That, as I say, I think is not quite fair. I think if the reports of the skilled mining engineers who manage the mineral estates were looked into it would be found that royalty owners very often have spent considerable sums in assisting the industry itself in such ways as by paying for experimental borings and so on, and in assisting the industry on the social side by contributions to churches, Nonconformist chapels and schools. Therefore I think they need not be so completely attired in a white sheet as some people seem to consider just.
At the same time I imagine that practically all royalty owners have realised for some time that their expropriation was inevitable since two Royal Commissions, that of the noble Viscount, Lord Sankey, and that of my noble friend beside me (Viscount Samuel), both recommended that it would be to the public advantage 770 that such expropriation should take place. That was enforced in the debates on the Registration Bill by what fell from the noble Viscount, Lord Halifax—namely, that where it could be shown that expropriation was required in the public interest, it always would be carried out with due compensation to those who suffered. Consider for a moment the different interests involved by the operation of this Bill. In the first place, because they come first in order of the clauses, are the royalty owners; then the mineowners, those who work the mines; thirdly, those whom many people would consider most important of all, the mine workers, the miners themselves; then the consumers, and finally the general public or taxpayers.
The royalty owner, who certainly received no sympathy from the noble Lord who has just spoken, is not going to come off very well under this Bill. The Inland Revenue says to him: "If you have got such a fine gilt-edged security as you apparently think it is, why is it not as marketable as Bank of England stock or War Loan, and if you want the money, why do you not put it on the market and get the same number of years' purchase as you would for one of those securities?" The royalty owner replies: "I beg your pardon, but I do not regard this as a gilt-edged security at all; I regard it as the annual sale of a portion of a property which has come to me either by inheritance or by purchase. Of course, I do not argue the point whether such property ought to exist at all; but for hundreds of years it has existed. I am in the position of a man who has fortunately inherited twenty-five or thirty valuable works of art or manuscripts and, not being able to put them all on the market at once, sells one every year. When they are all gone, his income ceases, precisely like that of a man who has let a seam of coal on a twenty-five years' lease; it is worked out and all gone."lb/> Then he adds to the Inland Revenue: "You want to treat it entirely as a gilt-edged security. In the first place—of this I do not complain—you take the two special taxes applicable, no doubt, to the special character of the industry: Mineral Rights Duty and Miners' Welfare; but in addition to those you take the full amount of Income Tax and of Surtax on it as though it were a gilt-edged security, and 771 the result is that you get 70 per cent. and I get about 30 per cent. of the income. In spite of that, the new arrangement will mulct me to an extent which I cannot precisely estimate, but it is quite evident that under the figures as presented in the Bill there will be a considerable loss to the owners of royalties." That may be inevitable. But what deserves comment is that it is hardly possible that this loss will not fall very unfairly. I do not see how it is possible to prevent a most inequitable result from this system of district valuations. That was made quite clear in the noble Earl's speech, because he stated—which is undoubtedly true—that, when a particular property has been valued, it by no means follows that the owner will get the whole amount upon which the valuers agreed, because the amount will always be liable to be scaled down to the proportion which that particular property can get from the total which is allotted to the particular district. I say, therefore, that I do not see how it will be possible to avoid considerable unfairness to individuals when this valuation takes place.
I am anxious not to attempt to go into any detail, but it appears to me that some very difficult questions will be asked in the course of the debate with regard to what is to happen in the case of land valuable for other purposes—perhaps very valuable for building purposes—when the ownership of the surface is separated from that of the minerals. That is obviously a most complicated matter, and I feel that it will be very difficult to arrive at a just appreciation of what can be done to meet those cases.
I pass on to the mineowner, on whom I need not spend so much time. It will be for him to say if he prefers the possibly somewhat mechanical dealings of the Coal Commission to dealing with his previous landlord, on whom he has perhaps been able to put more friendly pressure than he could upon this rather formidable body. That is altogether apart from the questions arising under Part II. But I should like to ask whether there has not been a great deal of exaggeration of the advantage which the colliery owners are likely to get from the abolition of the boundaries between estates. My impression is that the effect of those 772 boundaries between estates has been greatly exaggerated in much that has been said and written on the subject; and one very competent coal owner in another place devoted a considerable part of his speech to showing how much people had been deluded by that exaggeration.
Now I come for a moment to the miners. No one in your Lordships' House has a higher opinion of coal miners than I have. A great number of years ago, for a year and a half I was a candidate for the House of Commons for one of the principal mining constituencies in England. Untoward circumstances prevented my having the honour of representing them, but I had many excellent friends among the miners' leaders both in Yorkshire, where I was standing for Parliament, and in other parts of England. Therefore I can say fairly that I regard them most highly, and I thoroughly sympathise with their feeling that they have not by any means always received fair treatment. But I cannot help feeling that the miners have been considerably misled as to the effect in their favour of measures such as this Bill. Can you look forward to anything going to happen under this Bill which will result in a general system of higher wages, or what is even more important than higher wages, to regular and continuous work? I confess that I find it difficult to foresee it. I am bound to say that, looking at the industry as a whole, as the noble Lord on the Front Bench desired should be done, I cannot see, the industry being what it is, that the realisation of the noble Lord's hope—that is to say, the nationalisation of the collieries themselves as well as of the minerals—would tend to make a serious difference in the miners' favour, even supposing that all these collieries were unified or nationalised under whatever the official might be—a Coal-Master General, or whatever his title might be.
Of course, if the national object was to extract as soon as possible, in the quickest way, all the coal that can be got, I could quite understand that a system of that kind would help rapidly and largely in that regard; but that not being the case the question of the consumer comes in, and of the price which he is prepared to pay for coal, either for domestic purposes or for industrial purposes. Surely that would still apply if 773 all the industries that used coal were nationalised, because it is obvious that it would be impossible in any circumstances to go on working all the collieries of England at a loss—that is to say, if the wages paid and the upkeep of the collieries themselves were not met by the productive results of the coal, when used either for domestic purposes or for industrial purposes. I cannot see how any of the varieties of coal, either steam coal or gas coal or bituminous coal for domestic consumption, can be cheapened by what is proposed in this Bill.
Then, finally, I would touch on the last of the interests I mentioned, those of the taxpayer. The noble Earl very clearly said that the taxpayer had nothing to expect from this Bill, and, as the noble Lord, Lord Addison, has pointed out, if any profits are obtained—and I think myself that those extra profits are some way off—whatever happens to them the public, the taxpayer, will not get the advantage. But then the taxpayer, surely, stands to lose something. It is impossible to estimate what the diminution of income of the owners of mineral royalties will be under this Bill, but I do not think you could put the loss to the taxpayer on Income Tax and Surtax which will result from this Bill at less than a million a year. I can imagine that it might be more. In these spacious times a million a year is not considered to be worth thinking of, but the taxpayer, I think, will be disposed to ask, if he does not see any rapid advantage arriving to any of the parties immediately involved, how it is that he is himself losing something on the entire transaction.
I do not pause for more than a moment on Part II of the Bill and the question of amalgamation. I can hardly suppose that this House will refuse to deal with this matter in some form, and I should hope very much in the form in which it appears in this Bill. My impression is—I shall be corrected if I am wrong—that in the first instance it was proposed to make these amalgamations compulsorily, by the issue of a kind of decree which would be more suitable to some countries on the Continent of Europe than to our practice here. The noble Lord, Lord Addison, thinks that the safeguards have gone too far the other way. That, I am sure, will be a matter for full consideration in Committee. I have no doubt that there are some large scale amalgamations that 774 ought to take place, and that have been unduly held up, but from all I know of business the process of amalgamation can be overdone. There are some small collieries, dealing with some special kind of coal, which are quite satisfactory from every point of view, both of the mine-owner and of the miners, and which might definitely suffer from being hurled into a large amalgamation with other collieries that are doing an entirely different kind of business. But I hope that this matter will receive full consideration in Committee. I feel I have spoken rather grudgingly about this measure, but I fully recognise the great pains His Majesty's Government have taken in framing it and the strong hope that they have that this will enure to the real benefit of the industry. I confess I do not approach it with any very sanguine hopes myself, but certainly there will be no prospect of any opposition to it from these Benches.
THE LORD ARCHBISHOP OF CANTERBURY
My Lords, I must take some part in this debate, though I am little qualified by any expert knowledge to do so, because I represent a body which has by far the largest income from royalties in the Kingdom: I mean of course the Ecclesiastical Commissioners. And here at once may I associate myself with what has been said by the noble Marquess as to the speech with which this Bill was introduced. I must congratulate the noble Earl upon what seemed to me a most astonishing grasp of a most complicated and intricate Bill. I shall say nothing about Part II and Part III, because I am quite incompetent to do so, but I must speak about Part I—about what is called unification. Unification is a very pleasant euphemism: It might, I think, quite as reasonably be described as expropriation or nationalisation. I wonder whether in the history of euphemisms anyone has been more ingenious than this, and I congratulate the Government upon their ingenuity in discovering the expression. Undoubtedly this Bill inflicts a most grievous loss upon the Ecclesiastical Commissioners and, as I need hardly remind your Lordships, through them upon a class which is singularly unable to bear any additional loss, the clergy of the Church of England. For I need not remind your Lordships that the Ecclesiastical Commissioners exist upon a trust imposed upon them by Parliament 775 to devote their resources primarily and mainly to the relief of the poorer clergy of the Church.
The loss may be measured in a very simple way. At present the Commissioners have an income of £230,000 from mining royalties. The compensation provided by this Bill will be only £110,000, leaving an annual loss of £120,000, which must be borne in the main by those who are little able to bear it. Your Lordships will remember that they are called upon to bear this loss after another much more grievous, for by recent tithe legislation a very large proportion of the legitimate property of the benefices of the Church has been taken away. I admit the very great advantages of the Tithe Act, but the fact remains that it took from some 7,000 benefices of the Church of England a sum in capital value of £20,000,000. As these benefices are vacated, the incumbents will find in all these cases that their income is reduced by 20 per cent. It is on the top of losses of that kind—I think your Lordships will admit, very patiently borne by the Church—that this additional loss is inflicted. By £120,000 a year the Commissioners will be less able to do what they are pledged to do, to augment these poor benefices—by £120,000 less able to do what everyone in the country knows ought to be done to enable the clergy more fitly to maintain themselves and their families.
But having said that I must at once admit that that £120,000 does not represent the actual net loss which the Commissioners will suffer. But that is not owing to any provisions of the Bill but to the prudent policy of the Commissioners. For the last thirty years the Commissioners have set aside from their mineral income a sum of no less than £80,000 a year. That, I must point out, has been not in order to meet any possible expropriation of royalties but to meet any possible exhaustion of coal. Moreover, though that sum of £80,000 has been invested every year, the income has not been accumulating and has been used to increase the spendable income of the Commissioners for the grants which they are under trust to give. I also ought to point out that this large sum set aside necessitates, and has necessitated, great reductions in the capacity of the Commissioners 776 to meet their obligations. But there it is, and, thanks to that prudent policy—not in any way to His Majesty's Government—the actual net loss will be less. The £70,000 which represents the sum put aside from coal income (exclusive of income from other minerals) must be set against that £120,000, and therefore the actual net loss to the Commissioners will be £50,000 a year. That is of itself a very grievous loss. The surplus income available in the hands of the Commissioners for making its grants is this year £400,000. Now £45,000 a year has gone or is about to go through the loss of tithe, and to that must be added this £50,000. That is to say, the Commissioners lose one quarter of the income which they are charged to spend, and which they are eager to spend for the benefit of the poorer benefices of the country and of the new parishes which are now being rapidly created—I think at the rate of about one every fortnight—in the new housing areas which are rising in every part of the country.
But, quite apart from the loss which the Commissioners may suffer from the unification of their mineral income, your Lordships have to remember the case of some 2,000 or 3,000 benefices which own coal under their glebes. I think the losses may be stated thus—that whereas, speaking in round numbers, these benefices have £20,000 a year in royalties they will now, even under the compensation of this Bill, only have £10,000 a year, and the loss to them will obviously be very great. Here perhaps I may be permitted to make an interpolation. In the extremely complicated and laborious work of registering the ownership of these benefices and the claims that they have for compensation, the Commissioners have been most generously assisted by the co-operation of the Ministry of Mines and of the coal administration of the Board of Trade, and I am very glad to have this opportunity of expressing in public my gratitude to these Departments for their assistance.
Since such compensation as this Bill affords is so inadequate, since even with it a loss so grave is inflicted upon those who are least able to bear it, your Lordships might reasonably expect that I should advocate that a Second Reading be refused to this Bill. I make no apology that the Church possesses and has possessed these royalties. They are as legiti- 777 mate a form of property as any in the country, and I venture to say that in the case of the Ecclesiastical Commissioners these royalties have been administered for no private benefit but for the public advantage. I wish I could see the end of the first Part of this Bill, of course. I am distressed when I think of those who will ultimately suffer, when I think of the loss it will entail. I do not know what my noble friend Lord Hastings, who has been so actively associated with this matter, may propose to your Lordships, but there are two reasons, I must at once say, which make it impossible for me on behalf of the Commissioners and therefore indirectly of the Church to take any such course.
I will deal with one of these reasons now and with the other when I come very shortly to the close of what I have to say. The first reason is that the Mineral Owners' Joint Committee, with which the Commissioners have been from the first associated and of which I believe the very able First Estates Commissioner, Sir George Middleton, acted as Chairman, asked the Government to allow compensation to be assessed by an impartial and judicial tribunal, and, wisely or unwisely I will not say, agreed to accept the award of such a tribunal. No one can question either the impartiality or the ability of the tribunal which was actually established, and although I am bound to say I am greatly disappointed by the award, it is impossible for the reason I have given now to raise objection to it.
I have no doubt that the Bill is capable of amendment in Committee. I hope very much that its incidence in certain respects may be less onerous than it is at present, but there is just one point I feel bound to mention at this stage. It is an important but a very complicated and legal point, and it might be thought it was one which ought to be kept for the Committee stage, but I bring it forward now because it is one to which I hope the Government may give serious attention and perhaps be able to deal with in Committee on their own initiative. The point is this. The Bill makes provision for the way in which the award is to be paid to various classes of owners, but there is one sphere of ownership of mineral rights about which the Bill so far as I can see is silent, and that is the case of manors. The relationship between the lord of the 778 manor and the ex-copyholder is, as many of your Lordships know, one of extreme complication. Manors are very ancient and regulated by very varying customs, but the question has to be faced in regard to these manors—who owns the coal? To whom is the compensation to be paid? Ought the coal to be regarded as the sole property of the lord of the manor? Is the consent of the ex-copyholder to its working, which is necessary by law, to be regarded as an interest in the coal or, so to say, an interest against the coal?
The matter affects the Commissioners very closely because they are owners of a very great number of very ancient manors throughout the country. They have no wish to be left, as this Bill apparently would leave them, to establish their rights possibly by recourse to the Courts, or to involve the ex-copyholders, who are usually men of very little substance, in litigation. I submit that the matter is one that will concern the Coal Commission itself because it will be left, so far as I can see, to establish its own rights possibly by recourse to the Courts. It is in every way desirable that this Bill should make clear just how we are to deal with these rights and to whom the compensation should be paid in these manors up and down the country. I apologise for dealing with a point which might seem to be more naturally a Committee point, but in my opinion it is one to which the Government might give their attention and possibly deal with in their own way.
Now I come to the second reason why, most reluctantly, I do not feel able to oppose the Second Reading of this Bill. The coal industry is, as the noble Earl who introduced the Bill so fully indicated, one of the most important in the country. On it depend other industries, our export trade, the necessity almost of our people as well as the maintenance of a vast number of miners and their families. The Government, with full possession of the facts and with their special responsibility, have been driven to the conclusion both that the industry needs, for its future, drastic reorganisation and that it is essential in any such reorganisation that these royalties should be unified. The Church is bound, even more than private individuals, in the management of its property to consider the public welfare. I cannot bring myself, in the name of the Commissioners and therefore indirectly in 779 the name of the Church, to oppose an essential part of a scheme which the responsible Government consider to be necessary for the welfare of this great industry. I have thought it right to explain the very grave loss which this Bill will inflict upon the property of the Church; I have not concealed from your Lordships that I regard this with the greatest possible regret; but I have done so in order to show what a very real sacrifice the Church is content to make for the good of the whole community.
§ LORD HASTINGS
My Lords, the noble Earl who presented this measure to your Lordships gave a most lucid exposition of its contents, an exposition upon which he has been congratulated by all the speakers who have succeeded him, and I would also like if I may to add my word of congratulation. But I confess that the remarks with which he prefaced that exposition were of greater interest to me. For the reason that a measure which proposes so drastic a reversal of previous policy and proposes to establish a precedent so dangerous to our accepted state of society, it is necessary that such a measure should have a justification which can only be described as one of urgent national need. I was, therefore, most particularly interested to hear what the noble Earl might have to say by way of commending to the House the necessity for this measure, and I confess that I thought his commendation was particularly thin. What had the noble Earl to say? He very unfairly, I thought, quoted to the House certain remarks made by my noble friend Lord Gainford fifteen years ago.
§ LORD HASTINGS
Fifteen years after the Commission reported. I apologise to the noble Earl. It was at any rate some long time ago. I suggest unfairly because he should at the same time have reminded the House that since those remarks were made certain amendments in the law have enabled the colliery proprietor, the colliery lessee, suffering from an unreasonable and recalcitrant lessor to take that lessor before the Railway and Canal Commission and have his grievance there redressed, and consequently the state of 780 affairs to which my noble friend referred when he made his remarks no longer exists. There is no longer, from the colliery lessee point of view, the urgent need for a Bill of this character. That was held out as the case by the noble Earl when introducing the measure.
Then the noble Earl went on to commend the Bill to the House because it would act as the satisfaction of a long-felt grievance on the part of the workers in the industry. What he said in that direction might be equally applied to any enterprise, to any industry in which the "have-nots" coveted that which the "haves" possess. It was a very dangerous doctrine, I thought. The noble Earl paid lip service to the sanctity of private ownership, which should not be expropriated without full and fair compensation, evidently forgetting what he had previously said. At a later stage he proceeded with considerable gusto to commend the Bill to the House by reason of the surplus which would be available for division. That is a comment upon the fairness of the compensation offered which really answered itself. You do not acquire great surpluses available for the advantage of, maybe, colliery lessees or workers in the industry without having first taken the money from somebody else without paying for it, and, inasmuch as the Government propose under this measure to give to the Coal Commission a surplus of some £2,000,000 a year, acquired by reason of the fact that the compensation is by that much less than would constitute fair compensation, he is hardly, I think, entitled to say that "here is this surplus thus acquired available for such and such" and at the same time to claim that the compensation itself is fair.
On this occasion I do not propose to labour the matter of compensation. I would like to stress the danger, to my mind, of introducing a system of wholesale nationalisation such as this, conceal it by any other term that you will. His Majesty's Government, I feel sure, will not mistake the action or lack of action which is now being adopted by the House. I would, had it been reasonably possible, most gladly have tabled a Motion for the rejection of this measure on Second Reading, but it would not have been a reasonable thing to do. Neither I nor those whose advice I am always glad to take thought so. And what is the reason of that? The reason of that is that this Bill 781 displays in a particularly blatant fashion the old vice of "tacking." "Tacking," as the House knows has been the subject of Parliamentary dissension ever since the days of Queen Anne, and here we have a very remarkable example of it. In Parts II and III of the Bill there are important proposals for the conduct of the industry and the machinery of government which obviously require to be debated in Committee. Part I, on the other hand—although the noble Earl who introduced the measure claimed that it was linked with the other Parts, a contention which I entirely deny—proposes to establish a principle not accepted in either Parliament or the State. It clearly should form a separate Bill and it now requires separate discussion. How is that to be achieved?
I hold the opinion that a large membership of this House would, however reluctant they may be to oppose the whole Bill—and their lack of action proves that reluctance—not be indisposed to challenge the proposals contained in Part I. People who feel as strongly about the subject as I do are apt to delude themselves in thinking that others must think the same. On the other hand, it may not prove to be a delusion at all, and I think it is only right that the opportunity should be given to those who feel as I do to give expression to their thoughts. With the consent of the House I propose, in order to get over the difficulty in which I find myself and in which others, I think, find themselves, to take a particular line of action, and it is this, that when on Thursday, the ninteenth day of this month, the Lord Chancellor proposes that the House do now resolve itself into Committee I shall then have a Motion upon the Paper that it shall be an instruction to the Committee to omit Part I. We shall then see whether the House is prepared to accept the principle of the nationalisation of private property on the great scale that this Bill proposes or whether it is not. That will also give us an opportunity of debating at length the whole question of compensation, the fairness or unfairness thereof, and the machinery of Part I of the Bill.
When the occasion arises it will be impossible to forget the remarkable arguments with which the noble Earl, Lord Munster, concluded his speech in commending this Bill to the House. He there used arguments which could be used 782 with equal aptitude by any member of the Labour Party in commending to his own Party, or to any Parliament here or in the other House, the compulsory acquisition of any form of industry or enterprise in this country. It amazed me that a Minister in the National Government—a National Government supported in the main by the Conservative Party—should have felt himself compelled by circumstances to commend a Bill in the terms in which he did. My Lords, I do not intend to trespass on the time of the House for another moment. Given the consent of the House and the opportunity when we are about to enter into Committee, I shall take the liberty of dealing with the matter much more fully. For the time being I can but register a protest against the Bill and I would beg the House not to think that my failure or the failure of any other of us to move its rejection now implies consent either to its principle or to its detail in any part.
§ VISCOUNT SAMUEL
My Lords, the noble Lord who has just spoken has announced the course he proposes to take at a later stage of this Bill and he justified it on the ground that Part I is really an example of "tacking." But surely Part I is of the very essence of this Bill. This Bill was introduced by His Majesty's Government in accordance with a pledge given at the last General Election and that was so announced in another place by the Minister in charge of the Bill. The pledge that was given at the General Election related not to any of the matters in Part II or Part III or in later parts of the Bill, but to what is called unification of royalties. Furthermore, if my memory does not mislead me, when this Bill was announced in the King's Speech at the opening of the present Session again reference was made to the unification of royalties. To imagine that such a pledge could be fulfilled if Part I were omitted from the Bill, which is what the noble Lord, Lord Hastings, proposes, is obviously wrong. I venture to suggest that those noble Lords who are opposed to the unification of royalties ought properly to move the rejection of this Bill on Second Reading rather than to assent to the Second Reading and afterwards to propose the omission of that Part of the Bill which is really of its very essence.
My own view is the very opposite of that of the noble Lord who has just 783 spoken. It appears to me that Part I is a measure long overdue. As the noble Earl who introduced the Bill said, in a speech which has won such universal and merited compliment, it was as long ago as the days of the Sankey Commission in 1919 that this measure was first advocated by a Commission which disagreed on all other matters but was united on this. That Commission included a number of representatives of the mineowners themselves. That was nineteen years ago. Then in 1926 the Royal Commission over which I had the honour to preside went once more closely into this matter. We had submitted to us an immense volume of evidence from every section of this industry and from all districts of the country, and we came unanimously to the conclusion that the coal-mining industry was on the whole badly organised, that its difficulties arose largely from that fact, and that it would be impossible to secure a really efficient organisation of the industry unless the mineral itself was in one hand, and in our view that hand should be the hand of the State. We were men drawn from different political bodies, representing different standpoints in economics and politics, but we were quite unanimous on this point.
We felt very strongly about it. Without any doubt or qualification we unanimously recommended unification of mining royalties. We held that the evidence was overwhelming; that the planning of mines in some degree, being largely dependent upon surface boundaries and rights, had been hindered and thwarted in its proper development since the development map underground had to conform to the estate map on the surface. We found that on the average each mine had to make its arrangements for working the mineral with no fewer than five mineral owners. That was the average, and of course in many cases there were very many more. We came definitely to the conclusion that the present system involved undue expense in development and great waste of time of the miners in travelling underground long distances owing to the difficulties that had been placed in the way of proper development of the mines. Furthermore, we found that our British system exists nowhere in the world in any important coal-producing country except the United States. The United States, where the law follows the 784 English law, does admit these difficulties and complications, but every other important coal-producing country has ensured that the planning of the coalfields shall be controlled by an authority representing the community as a whole. We found with equal unanimity against nationalisation of the mines for reasons which seemed good to us and which are given expression in our Report. We found most strongly that there was a case for nationalisation of royalties.
That was twelve years ago. Even that is not all. After the Act of 1930 a Coal Mines Reorganisation Commission was set up to secure the better ordering of the industry as a whole. That Commission had not been long at work before its members found that their task was a hopeless one unless they could control the leases of the mineral itself and the future planning of the industry. With equal unanimity they again, men selected by the Government as being of a representative and authoritative character, found that it was essential for their work that there should be unification of royalties. That was five years ago. It is only now that after these repeated recommendations Parliament has taken action.
When my noble friend the Marquess of Crew asks what advantage is to be obtained to the public at large and the consumers from a measure such as this, the answer is that the proper organisation of this industry must bring economic advantages and enable production to be effected more economically, thereby reducing costs to the public without imposing losses on the producers, and that this measure is an essential part in such reorganisation. When my noble friend the Marquess of Crewe says that the taxpayer will lose £1,000,000 a year on Income Tax and Surtax, I think, if I may respectfully say so, he will find that he has been misinformed. The Coal Commission under this Bill when it has to make its financial arrangements will be hound year by year to pay Income Tax on any surplus it receives, while the present mineral owners will have to pay Income Tax, of course, on the sum they derive from the future investment of money they have received.
THE MARQUESS OF CREWE
On a very much smaller amount. That is my point. They will only pay about half in Income Tax or Surtax.
§ VISCOUNT SAMUEL
They may pay half, but the mineral owners will pay the other half, because they will receive income from investment of the compensation money they receive. They will get an income from that, and that will of course be liable to Income Tax and Surtax like every other source of income. The Commission itself will pay Income Tax on its own income, but there is a loss; there is a loss of Surtax. It will not pay Surtax on that half, and that is a loss to the State, but it is a comparatively small fraction of the £1,000,000 which my noble friend mentioned.
The noble Lord who has just spoken said that the position is different now from what it was when these various Commissions and Committees reported, because of legislation that has since been passed enabling mine owners to secure redress if they are badly treated by the royalty owners. But I venture to say that that legislation is totally inadequate to serve all the purposes that we have in view. My own view is that, although it has effected some mitigation of the position, it has by no means cured the whole evil of the underground planning depending upon the surface rights.
Turning to the question of the terms, of which the noble Lord who has just spoken complained as unfair, it has been asked why, when the Royal Commission of 1925 reported that the cost to the State of nationalisation would be in the neighbourhood of £100,000,000, the mineral owners are now to receive £66,500,000: why they are to receive only two-thirds of what a short time ago was found by a Royal Commission to be the right sum. In the first place, that is not a correct statement of the facts. The Royal Commission of 1925 recommended that the sum that would be payable for the royalties themselves and other incidental adjuncts was about £92,000,000, and about £8,000,000 was allowed for contingencies. The present sum allows £10,000,000 for contingencies. The valuation that we recommended was made by the chief valuer of the Valuation Department of the Board of Inland Revenue, and he took precisely the same number of years' purchase as is now taken—namely, fifteen years' purchase. The difference in the total between £92,000,000 and £66,000,000 is due to the fact that during the intervening twelve years the income from royalties has, from 786 a number of various causes, declined. It is now £4,430,000, the agreed figure. It was then £6,000,000. That is why the sum now, at fifteen years' purchase, is different from what it was at that time.
I would point out that necessarily the sum payable must depend upon the income at the time. If mineral royalties had been nationalised fifty years ago, when the demand was first made, the owners would have received less even than they are receiving under this Bill. At that time the gross income—not the net income—from royalties was £4,150,000 and the net income was even less than £4,000,000. That is fifty years ago. So that those who think that they are receiving much less than the value of their property as it was in the hands of their predecessors may take some little consolation from the fact that, if the property owners had been bought out fifty years ago, they would have received very much less.
§ VISCOUNT SAMUEL
Undoubtedly, and that is why the compensation now is less than it would have been in 1925 or 1926. Similarly, ten years hence or fifty years hence we do not know but that the output may be less than it is now. Coal is subjected to many severe competitors, and it is quite possible that the British coalfields may in a few years time have a far smaller output than now. If that were so, and if this Bill is not passed, and if a similar measure is introduced then, the compensation to royalty owners will have to be even less than the sum of which complaint is now made. Of course, the essence of the matter is this, as has been pointed out by one previous speaker: that coal is a wasting asset. It is not like a permanent investment; it is not like land, which goes on producing, or like a factory, which, if you provide for depreciation, goes on yielding an income, everything being equal—
§ LORD CROMWELL
Can I ask the noble Lord whether he does not consider 500 years more or less correct?
§ VISCOUNT SAMUEL
No, but my noble friend forgets that an investment of capital in, let us say, Government 787 securities goes on paying its income indefinitely unless it comes to an end, unless it is a terminable security, in which case he gets his money back and can invest it somewhere else. But a man who has minerals in the ground has what is really a petrified forest, and he sells a piece of it every year. When he has sold it all, it is gone. It is not a permanent asset, but a wasting asset.
LORD DARCY (DE KNAYTH)
Would the noble Viscount tell us in how long he expects that income would come to an end? Would he tell us the estimate which he puts on this asset?
§ VISCOUNT SAMUEL
It depends, of course, upon the quantity of coal that there is in the property and the speed at which it is being worked.
LORD DARCY (DE KNAYTH)
The noble Lord's argument depends on the figure at which he puts it. Could he enlighten us as to the figure on which he is basing his argument?
§ VISCOUNT SAMUEL
It is perfectly impossible, of course, to say offhand what the figure is, but this impartial tribunal has assessed it at fifteen years' purchase, confirming what the noble Lord said: that it is a wasting and not a permanent asset. On the average, it is fifteen years. Of course, in some cases it may be less, and in some it will be more. This fact is realised by the Ecclesiastical Commissioners and by the law. With regard to the coal that forms part of the glebe properties, I believe that the Statute requires that all income from it has to be put to capital. It is regarded not as annual income, but as capital. The Ecclesiastical Commissioners, as the most reverend Primate has told us, have put by £80,000 for the last thirty years because their asset is a wasting asset. It is perfectly right and quite prudent. But he has mentioned also that the income from that sinking fund which has been put by has not been regarded as part of the mineral property but has been spent on other purposes, which is perhaps not quite so prudent and not quite such sound finance. Now if the Ecclesiastical Commissioners have put by, as they have done, £80,000 for thirty years, they have 788 accumulated under this head against possible future loss £2,400,000, and the income on that sum, I submit, is properly attributable to this head and ought not to be eliminated from it.
If the income from £2,400,000, which at 3¼ per cent. is £78,000 a year, is regarded as port of their mineral property—and the capital from which it is derived has been accumulated precisely because of some possible loss on royalties in general—then there would be no loss to the Ecclesiastical Commissioners from this, because the loss of income will be made good from the income of the depreciation fund which they have very properly been putting by for the last thirty years. In addition to that, they will no longer, as the most reverend Primate said, have to put by the £80,000 a year which they have been putting by in the past, and £70,000 of which is attributable to coal. Noble Lords seem somewhat sceptical about that argument!
§ VISCOUNT SAMUEL
; They lose £50,000 a year, because they have spent, year by year, £70,000 on other purposes which is derived as interest from their sinking fund for coal—which I submit they ought not to have done. If they put by £80,000 a year because their coal income is liable to loss, then that ought to be regarded as a separate sinking fund and the interest should be devoted to the same purpose. If that had been done, they would not now be suffering this loss.
§ LORD DARYNGTON
May I interrupt for a moment, as an Ecclesiastical Commissioner? If the noble Viscount will read what the most reverend Primate said, he will see that he made a mistake in regard to this matter. It is rather complicated.
§ VISCOUNT SAMUEL
With great respect, I have taken the trouble to inform myself from a most reliable quarter, and what I have been saying represents, I think, the facts: that the £80,000 a year is put by to be capital, and the income from it, as I think the most reverend Primate said, is devoted to the general purposes of the Ecclesiastical Commissioners. But there is one other point to be borne in mind. Those who have complained about this valuation forget that 789 when these royalties are valued for Death Duties, they are not assessed at fifteen years' purchase. They are assessed on nine- or ten-year periods, that is all.
§ VISCOUNT SAMUEL
I am not saying that is universal. No doubt the President of the Board of Trade was quoting an average figure, but the President of the Board of Trade was in charge of this Bill in the House of Commons, and on the Third Reading of this Bill he made that statement. If members of this House are not to accept as accurate a statement of a Cabinet Minister in charge of a Bill it is rather difficult for us to conduct these discussions. No doubt the valuation for Death Duties is customarily, and as a general rule, far less than fifteen years, and that being so I do not see how complaint can be made, or why they should complain at getting half as much again as the value at which taxes are paid for the purpose of Death Duties. In any case I submit that the noble Lord who has just spoken, and other noble Lords, are debarred from making this point, for the reason that it was agreed that this particular point should be referred to an independent tribunal. The composition of that tribunal was agreed with the royalty owners, the terms of reference were agreed, and the royalty owners agreed to abide by the award. The award now having been given, it appears to me that they are estopped from further argument. It is rather like the trade unionist who said: "Call this arbitration; he has given it against us!" I submit, therefore, that this question has now become irrelevant. The matter has been adjudicated. The award has been given, and since there was an undertaking given beforehand that the award would be accepted there is clearly nothing more to be said.
§ VISCOUNT SAMUEL
That is not my concern. I merely state the facts as they are. But not only that. In addition to 790 the £66,500,000 awarded they have now received the equivalent of another £7,500,000 owing to the fact that for the three and a half years between the valuation date and the vesting date they are to receive their former income. The noble Lord, Lord Addison, said that the difference was £20,000,000, but I cannot see how he makes that out, and I do not think that figure can be substantiated. As a matter of fact it is for three and a half years the difference between the present income and the income of future investments and I think it works out at £7,500,000. So, although the award was given and accepted as £66,500,000, it is in fact £74,000,000 that the owners will receive. I do not quarrel with that. I think it is quite desirable to lubricate the transaction, but it is rather hard, after we have paid for the oil, that we should still have friction when the wheels revolve, and still hear a piercing note of complaint.
My criticism of that Part of the Bill is different from that of the noble Lord who has just spoken. I think an error has been made in dissipating what should be a national possession. The Bill provides that the Commission shall first be called upon to pay for service of the loan, including sinking fund, and its own administrative expenses and then equalise more or less the charges for royalties, so as to lessen any which are particularly burdensome, but after that any future income is not to go to the taxpayer but that the charges are to be extinguished altogether. I do not see why this natural resource, having come into national possession, should not yield a revenue to the taxpayer. It is almost an accident that it was not a national possession long ago. The matter was adjudicated upon as long ago as the reign of Queen Elizabeth, when it was held that gold and silver were royal metals, and coal was not a royal mineral. Three and a half centuries having elapsed there is now an absolute claim in law and equity in the mineral owners, but if that judgment had been the other way what an invaluable national possession there would have been, continuing ever since the time of Elizabeth until our own day.
Now that we are purchasing the mineral we are apparently going to make the same mistake that was made in the time of Elizabeth, and we are going to dissipate it for posterity. I do not see why those 791 engaged in this industry, whether mine-owners or miners, should have this valuable property for nothing, and it was never claimed by the miners. The point was put clearly before their principal representative before the Royal Commission, and his answer was specific and definite. I, as Chairman, put to the representative of the Miners Federation, their principal witness, Mr. Tawney, this:… should royalties, or rent, or payment for the mineral itself—no matter how you may choose to phrase it—still continue to be payable?This is, after nationalisation. He replied:My view is, Yes—that the State should step into the position of the royalty owner.Q. That it is legitimate to charge for the coal itself—to debit the industry for the value of the actual coal itself?—The State would become the proprietor of the minerals, and as such it would charge a royalty for them against the industry.Q. The point I have in mind is whether the present sum of £6,000,000, or whatever it may be, which is derived from royalties should be thrown into the general finances of the industry and used to raise wages, for example?—That has not been contemplated. I have never heard that suggested.To make it perfectly clear I put these questions:But the State itself should receive that as the future owner of the minerals?—Certainly, qua owner.As representing the community?—Yes.That is their view, expressed on behalf of the Miners Federation, beyond any possibility of doubt, but now this Bill provides entirely differently and you have Clause 21 which says that the money for all future time is never to belong to the taxpayer, but to go wholly to the industry, first in the acquisition of royalties and after that to the owners and then the miners through the wage ascertainments will get the greater part. What has been the position of the Labour Party in this matter? They have forgotten their Socialism. Socialism intends to nationalise property in order that the community as a whole may get the benefit, but since the sectional interest concerned is the body of miners the Labour Party have forgotten all their principles in this regard and are willing to distribute what is really a national asset partly among the mine owners and partly among the miners.
§ LORD ADDISON
The noble Viscount did net listen to what I said. That was 792 the very Part of the Bill to which I raised serious objection. I said it was wrong.
§ VISCOUNT SAMUEL
I only wish my noble friend's colleagues in another place had raised their voices in indignant protest against this particular clause, but I do not think there was even a murmur in the other House from that quarter to that effect. There is another defect to which I wish to draw attention. During the period of transition between now and the time that the Commission gets control of the property what is going to happen? After the valuation day, that is January 1 next, until the vesting day there is a period of three and a half years, and during that time it is possible that arrangements might be made between the mineowners and the mineral owners which might seriously handicap the Commission in securing a better layout of the industry in the future—arrangements which may have effect over a long period of years. Clause 8 is intended to be a safeguard against that, but I very much doubt whether it will really prove to be adequate. But even if it does prove to be adequate, what is to be the position during the present year, before there is any restriction of any kind upon these arrangements? And I must say I feel some alarm as to the arrangements which it may be to the interest of the landlord and the mineowner to make as between themselves, which may very seriously handicap the work of the Coal Commission in the future. I should be very grateful if someone speaking from the Government Bench at a later stage could reassure me on that point and define what action might be taken if during the present year such contingencies prove to be realised. It might even invite retrospective legislation in the future if anything is done during this year to defeat the plain intentions of Parliament.
I shall only speak for a very few moments about amalgamations. I support the provisions of the Bill in that regard, although I am sorry that the procedure to be adopted is so cumbrous and so dilatory. Although it is pointed out that after all there are only 120 undertakings that produce 77 per cent. of the product, still there are 843 undertakings that produce 23 per cent. of the coal, and in the words of Sir Lynden Macassey, who has an immense knowledge of this industry, as arbitrator and in other ways: 793In every district a number of small collieries exist, the independent continuance of which is a drag on the coalmining industry, a menace to their efficient competitors, and a constant source of difficulty to the trade unions.We do not propose that there should be universal amalgamation on any rigid and arbitrary principles—the Royal Commission strongly deprecated that. The most efficient size of the operating unit varies of course with the circumstances, and every case must be carefully examined on its merits. I notice in this connection that two arguments are advanced on behalf of the mineowners who oppose compulsory amalgamation. They say in the first instance that the importance of amalgamations is very much exaggerated, that they are of little value in any case, and often do harm; and then they say, in the second place, that the industry recognises the value of amalgamations, is already rapidly proceeding on a voluntary basis with them, and it is quite unnecessary to introduce legislation. Those two arguments are mutually destructive.
The fact is of course that amalgamations may sometimes be wrong, but are very often right. When they are right they are sometimes effected voluntarily, but they very often are not, and that is why legislation is essential. Even when all the economic and financial factors are in favour of amalgamation personal questions frequently arise which block them, and individual directors are unwilling to give up, perhaps very naturally, occupations in which they have been long engaged and have been deeply interested. Other considerations arise in this connection, but I will postpone any observations on that till the Committee stage. Finally there are, as Lord Addison said, other matters which might have been included in a Coal Bill, dealing with distribution and possibly retail profit, but on that a public inquiry is about to be held. Also the question of mineral transport is not dealt with in this Bill. But, faulty as it is in some particulars, on the whole the Bill is calculated to render service to the coal mining industry and therefore to the nation as a whole, and I trust it will receive the support of your Lordships' House.
THE EARL OF CRAWFORD
My Lords, I cannot help thinking that the noble Viscount who has just spoken has 794 been very optimistic in his view of the advantages likely to arise from the unification of royalties. He seems to think that the Coal Commission are going to pay Surtax. Of course they will not.
THE EARL OF CRAWFORD
I beg the noble Viscount's pardon. We understood that he thought they would pay Surtax, in other words that the State was not going to lose the Surtax. But at any rate the State will lose the Death Duties. And the Death Duties have been rather higher in cases with which I am acquainted than he seems to think. I am a royalty owner, though I expect that for every pound I receive I pay three or four to other people. But I have some experience of them. The property in which I am concerned has eighty leases. We have no grievance against the people who take the coal. It all works perfectly smoothly, and if we had a grievance we could quite easily get it put right through the Act of Parliament passed some years ago. But where I differ most from the noble Viscount is in his assumption that the ease of removing mine pillars and boundaries and various things like that is going to make effective the reorganisation of the coalmining industry. Well, I think a good deal too much is talked about reorganisation. One thing that the coal industry is suffering from is excessive reorganisation, and when my noble friend below me talks, like others, about the coalowners putting their house in order—in that very admirable speech of his in which the tones alternated between those which were minatory and those which were dulcet—he underestimates the difficulties of the situation.
Let us look into the recent history of the coal industry. The coal industry was controlled by the State through the War and for a considerable time afterwards. That was during a period when coal was worth almost anything—when every country in the world was competing, not for coal as such, but for British coal. In spite of that the State, that is to say the taxpayer, was losing up to £1,000,000 per week. That was the effect of State intervention when the whole world was calling for English coal. What happened? The Treasury very naturally got tired. They gave the coal industry three months' notice, decontrolled it, and said to the 795 owners: "You look after your loss of £1,000,000 a week, and do your best with it." The immediate result of course was chaos. The noble Viscount, Lord Sankey, was invited to hold an inquiry, which he did. The sudden decontrol forced the Government into taking some action. I think I was a member of the Government, so I am not blaming anybody in particular. The Sankey Commission reported in 1919. The Report was hardly concluded when an Act of Parliament, thoroughly ill considered, was passed. It began to break down. Then successive inquiries followed, one connected with the name of the noble Viscount, Lord Samuel, others under Lord Buckmaster, Lord Macmillan, Mr. Shinwell and Mr. McKenna, and each was followed by more confusion and more chaos. Most of them were followed by Acts of Parliament so ill drawn and so ill considered that they had to be amended year after year. Last year we had a Bill brought in and it broke down. This year we have another Bill brought in. I think the mineral part, from the technical point of view, has practically broken down already. I do not see how it can be worked fairly.
In spite of all these inflictions of the State upon the coal industry, that industry has managed to survive in a manner in which I defy any other industry to survive. When I hear people talk in this gay way of reorganising the coal industry because it is inefficient, I say, "Come and see for yourselves what is being done." There is no other industry in this country that has got a complete profit-sharing scheme. There are very few industries of our size which are working a complete annual holiday. We have done a very thorough re-equipment during the last ten or fifteen years of the technique of pits. I say no other industry could have done what the coal industry has done. For members on this side of the House I should like to quote the words of Lord Baldwin a few years ago in which he said:No general charge of inefficiency can be brought against the management of the coal industry.I think myself that is thoroughly correct.
I wish to deal with two portions of the Bill. In Clause 2 there is a reference to safety. I was astonished in reading the introduction of this Bill in another place— 796 twenty columns of it or more—to find that the word "safety" never occurred to the Minister. Again this afternoon, though I did not hear the whole of Lord Munster's speech, I learn from my friends that he did not deal with the question of safety at all. We people in the coal trade believe that coal cannot be considered apart from the question of safety. In the very forefront of this Bill there is this extraordinary passage dealing with safety, on page 2, Clause 2:The Board of Trade may give to the Commission general directions … in relation to … all matters affecting the safety of the working of coal.The safety of the working of coal is the safety of the men who are working the coal, and unless we can get very good explanations of this from Lord Stanhope I for one shall certainly put down an Amendment to omit these words and, if I can find a Teller, take it to a Division.
I want members of the House to understand that the safety of people working coal is a very solemn obligation. The manager who does the wrong thing may be charged and convicted of manslaughter, and here this Bill is going to transfer to an amateur body of five gentlemen duties connected with all matters affecting the safety of coal and its working. I am amazed that anything of that sort should be put in and not be referred to by the Ministers in charge. Who are these gentlemen? There are only five of them. One of them, I suppose, must be an actuary or an accountant. One of them, I take it, will have to be a mine surveyor—that is to say, a member of a profession whose interests are very seriously disregarded in this Bill and to which the Government would do well to give some attention. Presumably there will be a miners' agent and a representative of the coalowners. There will be five altogether who are to be appointed only for five years. They are to have the power to execute orders given to them by the Board of Trade in all matters affecting the safety of coal working. A good deal more explanation is required than that. The organisation of safety in the mines is admirable. It is now vested in the Mines Department with an extremely highly skilled and efficient staff, many, if not most, of whom have been actually drawn from the coal face. If these people are to be brought under these five gentlemen in Westminster 797 a situation will arise in which you will find that the mine managers of this country will make such a protest to the Government that this provision will have to be withdrawn. We demand complete explanations on this point before Clause 2 is passed.
Then I notice the ridiculous provision about the Commissioners. They have got to sell every share they have got in anything that is concerned with coal, machinery, or plant. If one of these gentlemen has got money in a gas company, which deals with a by-product of coal, he has got to sell his shares. He cannot belong to a company that makes locomotives or mining machinery or pitprops or electrical machinery. There is all this ridiculous nonsense about securing that these people will not be corrupt. I should have thought that these things were really unnecessary at this time of day. They are not only futile, they are insolent as well.
I will say one word, and one word only, about amalgamation. I read amalgamation very much in terms of safety. I believe you can amalgamate so much that safety will not receive the attention from the management that safety demands. A few years ago, when they were talking about amalgamation in Lancashire they proposed to divide the south coalfield between West Lancashire, East Lancashire, and Mid-Lancashire. That would have meant a number of units of coal production too great for supervision by a single firm. I am concerned with a firm which has twelve units of production. In my opinion that is about as many as can be managed unless the further amalgamation is one which naturally falls into the area of concentration. If you have to bring in all the other neighbouring and adjacent collieries—ten, twenty, forty, or even more of them—you are putting a number of danger points into a particular control which is greater than the demands of safety would justify.
I am all for amalgamation. My own affairs were amalgamated sixty or seventy years ago, and the business with which I am concerned was amalgamated with others quite recently. Where amalgamation is spontaneous and voluntary between persons of good will who know one another and realise the mutual advantages to be gained, by all means have 798 amalgamation, but to force amalgamation upon companies with people who may not have the same views of how coal should be worked and who may be unsympathetic to one another is a very dangerous thing indeed. I consider it would have been excessively dangerous to have amalgamated the south coalfield of Lancashire into three groups from the point of view of safety. So far as I can make out, we are now back at the position that the amalgamation proposals occupied a few years ago. I thought these had been entirely discredited. The whole tendency in Germany is to de-amalgamate. These excessive amalgamations are bad business. They involve bad supervision. You get people who call themselves presidents and vice-presidents, but they do not get near the coal face. If you make amalgamations which are forced on a variety of units which do not wish to be amalgamated, it will not only be bad from the economic point of view but it will be dangerous to life and limb as well. This is a matter to which I attach the deepest importance, and I earnestly hope the House will pay attention to this aspect of the question which was so curiously neglected in the discussions in another place. I distrust the whole measure.
My Lords, I, too, should like to join with other noble Lords in congratulating my noble friend the Earl of Munster upon the very excellent way in which he has propounded the Bill, but I fear I cannot follow him in his commendation of it. The President of the Board of Trade in another place said that this Bill was an attempt to strengthen the organisation of the coal industry, not only to help it in good times but to give it some protection in bad times. In so far as the Bill extends the operation of the selling schemes of the 1930 Act it certainly does so, but I do not think that the other parts of the Bill will be of any material benefit to the industry. I make no apology for referring in detail again to many matters in this complex Bill which have already been mentioned, and I hope your Lordships will bear with me for a short time at this very late hour.
The industry does not oppose the principle of the unification of royalties by State purchase as it considers that the transaction will rid the industry of a sub- 799 ject of agitation that has been going on for very many years. On the other hand it considers that it will be of no material benefit to the industry because it believes that the powers given to the Railway and Canal Commission by the Mines (Working Facilities and Support) Act of 1923 is quite sufficient to deal with all the various difficulties which have been advanced from time to time as arguments against private ownership of the minerals. The Government of the day will, by virtue of Part I of the Bill, have absolute control of the coal mining industry. I need hardly remind your Lordships, as has already been done by the noble Earl, Lord Crawford, that the Board of Trade are empowered to give to the Commissiongeneral directions as to the exercise and performance of their functionsand further, the Coal Commission ischarged with the duty of controlling and managing the premises acquired by them by granting coal mining leases.Consolidation of coal mining leases may give certain benefits to the industry. On the other hand, the renewal of a lease may be refused not only for reasons connected with the industry but under certain circumstances in which the Government of the day may have a different complexion to the present one, for political reasons, and in that event the colliery undertaking and in many cases the public as shareholders would lose all their capital invested in the undertaking.
There is only one category of colliery owner to whom security of tenure is given under this Bill and that is the colliery owner who owns his own freehold. That class of owner comprises about one-eighth of the industry, the remainder, the large majority, having no security whatever that the leases on which the whole value of their undertaking depends will be renewed on their expiration, or will be renewed on equitable terms. The Commission have absolute power to dictate terms and conditions which they as owners of the minerals may decide or to offer a lease to another party or to close or curtail the operations of the colliery by refusing to renew a lease at all. At the present time in the event of a royalty owner refusing to renew a lease, the lessee can make application to the Railway and Canal Commission who, under the Mines (Working Facilities and Support) Act 800 have the power of granting the lessee the right to work the minerals if they think fit by exercising compulsory powers over the royalty owner. I do not suggest that every colliery lessee should have an absolute right to the renewal of his lease, but I do maintain that he should have a presumptive right, and if the Commission propose for reasons which appear sound to them to grant the lease to another party or refuse to re-lease the minerals, and if there is a dispute as to terms and conditions of renewal, the owner of the lease should be able to appeal to an independent tribunal.
The point I wish to make is that there is no provision in the Bill for an appeal to an independent tribunal such as the Railway and Canal Commission against the findings of the Coal Commission. In the Electricity (Supply) Acts of 1919 and 1936 there are provisions for appeal on the part of supply undertakings from decisions of the Electricity Commissioner and also of the Central Electricity Board, which occupies a somewhat analogous position to that of the Coal Commission, and moreover—an important point to remember—it is the general practice to-day to include an arbitration clause in coal mining leases. I shall propose at a later stage that the powers of the Board of Trade and the Coal Commission under Clause 2 of the Bill shall be curtailed by making provision for a right of appeal to an independent tribunal against the directions of the Board of Trade and the findings of the Commission.
Now let us consider what other supposed benefits there may be in this Bill for the industry. The main arguments that have been advanced in favour of the acquisition of the coal by the State as put forward by two celebrated Royal Commissions has been that the unification of royalties would be a great material benefit to the industry in having consolidated leases under one landlord, but I would venture to suggest that the separation of the ownership of the mineral from the ownership of the surface may give rise to difficulties and expenses which have not been previously experienced. At the present time when the surface owner and the coal owner are one and the same person, it is to his advantage to afford the colliery undertaking reasonable surface facilities for working the coal, but now that the coal is to be owned by 801 the State and the mineral owner is to be bought out he will have no incentive to give any more facilities to the colliery company than he may be compelled to grant by law, and in many cases the result of the transfer of the coal to the State will mean the sterilisation of a large quantity of coal owing to the heavy compensation exacted by the surface owner if the coal is worked and subsidence takes place.
It has been said that one of the great advantages that will accrue to the coal industry through the nationalisation of royalties will be a reduction in royalty payments. I venture to suggest that the more closely the financial results of the nationalisation of royalties are examined the less attractive they become. It has been said that approximately £1,500,000 per annum will be available for the reduction of wayleaves and royalties, but this estimate appears to ignore the not unimportant items of taxation and expenses. At the present time the annual gross revenue from royalty is about £5,000,000, but on this figure Income Tax, which has already been mentioned, would be paid amounting approximately to £1,250,000, leaving a surplus of £3,750,000. The Coal Commission is also liable for Mineral Rights Duty, welfare levy, and any other tax, duty or rate now paid by the present royalty owner, whether general or local, and the aggregate taxation under these headings, apart from Income Tax, will probably be not less than £400,000 per annum, which will reduce the surplus to £3,350,000. Against this figure must be set the annual cost of the loan, including redemption. This cannot be less than £2,400,000, even after allowing for rebate of Income Tax on the interest, and there would then remain a surplus of only £950,000. In addition the Coal Commission will have to pay rent and other expenses for central and local offices, the salaries of its five full-time members and of its staff, including presumably provision for pensions, and of all the surveyors and other officials who will be necessary.
I understand it has been agreed by the Treasury and the Mines Department that the annual value of the services of the present mineral agents is approximately £220,000 and that these services will be utilised as soon as the Coal Commission takes over its property. The total expenses of the Commission, including the 802 mineral agents, is unlikely to be less than £250,000 per annum and the surplus is therefore reduced to the very small sum of £700,000 per annum.
§ VISCOUNT SAMUEL
Would the noble Lord permit me to interrupt for a moment? He is assuming, is he not, that the Commission would have to pay Income Tax on the whole £5,000,000? Surely they would pay only on the income which is in their own hands, a much less sum.
I understand Income Tax will be paid on the net revenue received from royalties by the Commission.
The amount of relief that the industry may expect is in any case reduced to very small proportions and against this problematical benefit must be set the additional expenses in which colliery undertakings will be involved as a result of the severance of the ownership of the minerals from that of the surface. In fact, the benefits of the financial transactions are so small that had the award of the Greene Tribunal been higher than the £66,450,000 the transaction would have been almost impossible, and the present royalty owners are now being asked to accept this award, which is certainly lower than the actual value of their property, and the whole transaction is going to be of very problematical value to the industry. The effect of this transaction, as mentioned by the noble Lord, Lord Hastings, is to reduce the total income of the mineral owners by approximately £2,000,000 per annum, which sum is transferred by the Bill from the pockets of the individual owners to those of the Commission without any compensation.
Another point to which I wish to draw attention is that in 1942, when the vesting date occurs, the present royalty owners will be deprived of their income from the coal, and I think it is highly probable that the Commission may not then be in a position to pay the complete purchase 803 price. Certainly, judging by the activities of the Tithe Commission and the enormous delays which have occurred, that is highly probable. Default in payment of the purchase price may involve royalty owners who have to pay mortgage interests, etc., in great hardship and there should certainly be some provision to meet this situation. Another point is that there is apparently no provision in the Bill placing on the Commission an obligation to compensate mineral surveyors and their employees who may not be engaged by the Coal Commission. In fact, when the Greene Tribunal arrived at the figure of £66,450,000 a substantial reduction was made for the management from the royalty income. There is therefore all the more reason, apart from common justice, that compensation should be paid.
I wish to put a question to the Government which, as far as I know, has never been answered in connection with a scheme for unification of royalties without nationalisation. A draft scheme was prepared by eminent authorities and submitted to the Mines Department which would have secured unification of royalties without State acquisition. It was a proposal to form five coal-owning corporations to acquire and control the royalty owners' interests in the different coalfields of Great Britain. Each corporation was to be controlled by a board of directors or commissioners, appointed by the Board of Trade. I do not propose to elaborate further on this proposal. It was not asked that the scheme be accepted or rejected as it stood, but that it should form the basis for a policy of unification with adequate State control and without the dangerous controversial feature of nationalisation, but it was met by a complete refusal by the Government in spite of the fact that the noble Viscount, Lord Halifax, gave an assurance in the debate on the Second Reading of the Government's Coal (Registration of Ownership) Bill last year, that any alternative of the kind suggested would receive careful consideration. No doubt the noble Lord who is replying for the Government in this debate will be able to elucidate the facts of this matter.
There is another aspect of this Bill and that is the position of the colliery undertaking that already owns the minerals it is working. At least one-eighth of the 804 total output of coal in this country has been raised in the past few years from areas which are in the freehold of the colliery owner, and an important point to note is that this section of the industry has had no chance of expressing an opinion or of being consulted as to the amount to be paid to them in compensation for their property. That section of the industry which now owns its own coal is bound to suffer a heavy loss when the mineral is acquired by the State. I know of a case where a colliery undertaking has had to buy the whole area because the royalty owner said, "I won't lease to you, I will only sell to you." This undertaking has been working for about fifteen years and has, of course, been writing off in the balance sheet a sum in proportion to the amount of coal extracted. Under this Bill on the very best calculation one could make this colliery company cannot lose less than between £60,000 and £70,000. The only reasons that can really justify the introduction of this Bill are that it should provide relief to the industry and in turn benefit the working miner, and I can see no justification for colliery undertakings to be put in a worse position than they are in at present.
It would be only equitable to give to the collieries owning their own minerals the option of either declining compensation and obtaining a lease in perpetuity at a purely nominal rent or receiving the compensation awarded and then taking the new lease on the usual terms and conditions. This option the Bill does not give but compels the colliery owner to accept compensation and a new lease. It can be argued that there is no reason why the colliery undertaking owning its own freehold should be in a better position than the royalty owner, but I would point out that as matters are to-day the public through the colliery owners have risked their money. The colliery owners have had the responsibility and energy to make use of it, whereas the royalty owner in most cases has not been in a position to risk anything. I shall propose at a later stage to introduce a suitable Amendment to rectify this gross injustice on a large section of the industry. It is true that a clause in the Bill has been already amended by the Government in an attempt to deal with this matter, but the position as it is is neither fair nor satisfactory to the industry.
805 A great deal of agitation and discussion has been directed to Part II of the Bill both in the Press and elsewhere, but I should like to take this opportunity of making it plain that the opposition of the industry is certainly not to amalgamations as such provided there are really adequate safeguards. The plain fact is that amalgamations have been going on in the industry quite fast enough for all practical purposes. Amalgamation, as was said by the noble Earl, Lord Crawford, is satisfactory only when it is natural. When it is forced it has many bad effects. The colliery owner who is forced into an amalgamation cannot have the same sympathy towards the men who are displaced as when amalgamation takes place under voluntary conditions. A former secretary of the Mine Workers' Federation in a letter to the Press recently—I will not read it in full, owing to shortness of time—said:It is a matter of grave moment that not one 'tittle' of evidence has so far been submitted by any responsible Commission or Minister that compulsory amalgamations will be of benefit to the industry.He went on to say that:The Commissioners of the Special Areas and the Nuffield Trust are all endeavouring to overtake the evils consequent upon too hurried amalgamation and ill-advised rationalisation.The noble Viscount, Lord Samuel, during a debate in 1930 on the Coal Bill, if he will allow me to repeat his words, said:The question arises, should amalgamation be compulsory? I am strongly of the opinion that voluntary combinations are better, they are certainly preferable, and the Royal Commission came very definitely to that conclusion.
§ VISCOUNT SAMUEL
But I was in favour of compulsion when the voluntary agreements were not effected.
My Lords, we have the statement of another member of the Government. The present Parliamentary Secretary to the Treasury, not very long ago, used these words:We, are proposing to create a new profession in this country: the profession of whole-time compulsory amalgamators, who will have full Parliamentary powers to coerce buyers and sellers—to make them willing, whether they intend to be willing or not.Part II of the Bill gives power to a State organisation, the Coal Commiission being under the direction of the Board of Trade, to take the control of an undertaking out of the hands of its present owners with- 806 out provision for compensation in cash, but only in exchange for securities of doubtful value. It is in fact a blank cheque to any future Government—I particularly stress "any future Government"—to do what it likes with any British industry. The noble Viscount, Lord Runciman, not so long ago stated his views in connection with the amalgamation of the coal industry in these words:What is sauce for one industry is sauce for another, and I really do not see why we should be asked to apply this kind of principle to the coal industry if those of us who are engaged in other industries would look very much askance at hearing it proposed to them.The Government, after a great deal of pressure from other interests besides coal interests, have incorporated in the Bill Provisional Order procedure to examine the recommendations for amalgamation in a certain area that may be proposed by the Coal Commission and laid before Parliament by the Board of Trade. It is felt by the industry that, as the Bill is drawn, the Provisional Order need not contain any details of the scheme which the Coal Commission intend to put forward. Under the 1930 Act the national interest was determined by the Railway and Canal Commission. Now, however, very properly, it is to be determined by Parliament. But I maintain that Parliament should have before it all the evidence that can be obtained, so that the individuals concerned may have an opportunity of stating their case. As the Bill is drawn at present, the Coal Commission, through the Board of Trade, can put before Parliament a defined area which is considered suitable for the exercise of compulsory amalgamation. A colliery undertaking need not be told precisely what it will receive for its property until after the amalgamation is already in operation. The undertaking is therefore prevented from formulating a case to prove that the scheme would be unfair or injurious. It is a little unfortunate that the Government, after their previous experience with their Coal Mines Reorganisation Bill in the summer of 1936, did not take the industry into their confidence before launching the present measure. If they had done so, I feel that a large number of the difficulties in this Bill could have been avoided without altering its principle. I shall propose at a later stage to put forward a suitable Amendment to strengthen the clause gov- 807 erning amalgamation by Provisional Order so that all interests concerned may be protected.
I cannot conceive any Bill more calculated to please no one. The miners themselves dislike it because it does not go far enough along the road to Socialism and they realise that it will mean unemployment in the event of compulsory amalgamations. The industry itself does not like the Bill because it feels that increased costs and difficulties will be thrown upon it. Last but not least, the royalty owners realise that they are going to lose a large part of their income and property in return for a very problematical benefit to the industry, and benefit to the industry can be the only reason for the introduction of this Bill.
THE LORD SPEAKER (VISCOUNT MERSEY)
My Lords, on behalf of my noble and learned friend the Lord Chancellor, I beg to move that this debate be now adjourned.
§ Moved, That the debate be now adjourned.—(Viscount Mersey.)
§ On Question, Motion agreed to and debate adjourned accordingly.