§ Debate resumed (according to Order) on the Motion for the Second Reading, made yesterday by the Earl of Munster.
§ THE LORD CHANCELLOR (LORD MAUGHAM)
My Lords, this is a controversial and difficult matter and I confess that I had originally intended to address 839 your Lordships at some length. After what took place yesterday, however, and having regard also to the time at your Lordships' disposal and the number of noble Lords who wish to speak, I am going to take the course merely of replying to the criticisms which have been raised against the Bill and of dealing with them to the best of my ability. If some criticisms are not dealt with I hope that noble Lords who are concerned in regard to them will feel that it is only because I think that they can be dealt with more adequately on the Committee stage than at the present time. The first thing I want to deal with is a tendentious word used by the most reverend Primate. He told us that this measure was a measure of expropriation. That is a word which carries to the minds of many people a somewhat sinister meaning. It is, however, like all the words which fall from the most reverend Primate, perfectly accurate. It is in a sense a measure of expropriation, since property belonging to a number of very worthy people is taken away from them on the terms which are contained in the Bill. But the same word is also applicable to every case where property is taken away from private owners for public purposes.
There would not have been a railway of any size constructed in this country if it had not been for the expropriation of a large number of the interested landlords on whose property the railway line was built. The same thing is true not only of railways but of practically every public undertaking throughout the whole country. If your Lordships care to go back a hundred years to reports of debates which took place in the years between 1835 and 1845, you will find perfectly honest members of this House protesting in the most violent language against private property being interfered with for the purposes of constructing a railway or a dock or other undertaking of that kind. And the matter does not stop there, because whenever our incorruptible Chancellor of the Exchequer gets up in another place and proposes a measure which takes 5s. 6d. in the pound from the pockets of all your Lordships there is no doubt that that is a measure of expropriation. At the same time, I do not suppose there is anyone here or that there is any sensible person who, if 840 he chooses to use the word "expropriation" in connection with such an operation as that, feels that he is really stating that an act of injustice is being perpetrated. It has got to be done in the public interest. It is on the same ground that the "expropriation" which is involved in the present Bill has to be defended.
The most reverend Primate went on to paint a pathetic picture of the very serious effect which in his view would be caused by this measure to the funds of the Ecclesiastical Commissioners. I do not myself doubt that they and other people who at present are owners of coal royalties are going to suffer a very serious diminution in income if this Bill becomes an Act. But is that really a ground on which the Bill can be attacked? Coal royalties have never been treated in this country as if they were in the same position as what are called gilt-edged securities, and the noble Marquess, Lord Crewe, stated yesterday that he never thought the royalties with which he was concerned could be regarded as an investment of that character. That question as to the inadequacy of the consideration which these owners will receive under the Bill has to be considered in the light of facts. A tribunal was instituted to determine the value of all the coal royalties in this country. The tribunal consisted of three gentlemen, and I do not think I am going beyond my rights as a speaker in this House in saying that I am intimately acquainted with two of them and very well acquainted with the third. I do not quite see how you could have got three gentlemen more disinterested, who had better judicial spirit and who were more likely to arrive at the fair number of years' purchase to be given for the coal royalties belonging to those 4,000 persons who are interested.
Though I have not thought it right, because it is never right, to discuss with any of these gentlemen the reasons why they arived at the figure fifteen as the correct multiplier, I have had the opportunity of knowing from counsel who appeared before them something of the reasons which must have influenced them in coming to the conclusion they did come to. It is true that in this country coal royalties have never been regarded as worth a large number of years' purchase. It is true that the royalty owners in this 841 country ever since the year 1894 have been able to persuade the Inland Revenue officials that for Estate Duty purposes a multiplier less than the number fifteen was a justifiable figure to apply in ascertaining the market value of coal royalties.
Those noble Lords who were yesterday indignant on this matter must really, I think, take a somewhat wider view of the matter than they were disposed then to take. I would remind your Lordships of this, that the yield of the royalties to a particular owner depends on the output of coal from the land which he has leased to some colliery company. What is there which can possibly be said to persuade a valuer, whoever he may be, that the output of coal from that particular colliery is going to continue in perpetuity, or say, if you like, for fifty years? Surely it all depends upon output, and output will depend very largely on whether the export of coal continues at the present price. There are all sorts of possibilities with regard to the mine. There is the chance of coming upon faults, or finding other difficulties in the working of the mine. There are strikes, and all sorts of other possible difficulties. If you take those facts into consideration and add to them the circumstance that the mine is a wasting asset, I cannot see how you can escape the conclusion that you have to apply a smaller number of years' purchase than you would to a rent derived from a lease of the surface.
It is not to the purpose of anything before your Lordships to-day that the legal view has long been in accordance with that which I suggest. As many of your Lordships well know, the tenant for life of mines has never in the ordinary way been allowed to take the whole of the rent and royalties which he can get from those mines. Ever since the law devoted its attention to this matter, and certainly since the year 1882, which is at least going back a good long way, the law has treated the tenant for life as entitled to something less than the royalties which he gets from the minerals which are included in the settlement. Under the present Act, the Settled Land Act, 1925, Section 47, the tenant for life, if he is impeachable for waste, can only get one-quarter of the royalties which come from a lease included in the settlement, and the whole of the other three-quarters have got to go to capital. If he is not imp- 842 peachable for waste, he gets three-quarters and a quarter goes to capital. That is only an illustration of the fact that coal and other minerals are really not in the same position as the surface. They are open to all sorts of considerations, and in particular the consideration that a mine is not inexhaustible.
So it was not from any political predilection that any one of those three persons who were members of the tribunal came to the conclusion that fifteen years' purchase was an adequate figure to take. It was because, from the materials before those gentlemen, it was not reasonably possible to fix a larger number of years' purchase than fifteen. When you add to that fact the circumstance that the Government have taken the course of agreeing that for an extra three-and-a-half years the royalty owners are going to receive the royalties which belong to them, and an addition to the sum of £66,000,000 odd which amounts to £7,000,000 altogether, I think any really disinterested man will come to the conclusion that although he may suffer and his brethren may suffer a substantial reduction in their income, that is because he is getting, instead of coal royalties, a sum of cash which he may invest in a permanent security not liable to the chances and risks of coal.
However that may be, as his Grace, with his usual fairness, pointed out, the tribunal agreed, the tribunal made a report, and they fixed upon the number of years' purchase which I have mentioned. I should like to ask any member of this House what the Government—the National Government—could have done but accept that figure or throw up the whole project included in this Bill. Is it conceivable that a National Government, after appointing an agreed tribunal of three eminent persons, could have said, "We know better, and the owners of coal royalties ought to be given a larger sum"? My Lords, it was not possible, of course. The three-and-a-half years is a sort of windfall which comes to the royalty owners by reason of the circumstance that it will take three-and-a-half years before the matter is ripe for payment, before they are able to arrive at the date of vesting. During those years of a postponement that was not due to anything but the actual facts of the case, it was only fair that the 843 royalty owners should continue to take what, after all, is still their property. When the time comes they will have a sum of cash ascertained, as I said, in a fair manner.
Now I come to the second point, which was raised, with his usual great dialectical skill, by the noble Lord, Lord Hastings. He asked your Lordships to believe that there was really no interest of the State sufficient to justify such a Bill as is now before you. It is no doubt perfectly honest opposition, both from the noble Lord and from the other noble Lords who object to this measure. But I urge them to be very sure, before they vote against the Second Reading of this measure—it there should be a Division on the Second Reading—that their own personal interests do not, to some extent at any rate, cause them to come to that conclusion. Let me point this out to your Lordships. There never has been a greater unanimity among the independent bodies who have considered this question than there has been in relation to the unification—as I prefer to call it—of coal royalties. The Coal Industry Commission, 1919, the Royal Commission of 1925, which still goes by the name of the Samuel Commission, the Report in 1933 of the Coal Mines Reorganisation Commission—all those bodies, and other bodies and persons whom I have not mentioned, have been unanimous in the opinion that it would be to the interest of the coal industry that the royalties should be acquired by a single body or by the State.
Anybody who thinks that they are all wrong is perfectly justified in holding to his view. Perhaps they are all wrong! But he cannot ask the independent persons, the disinterested persons, to come to the same conclusion. Governments dealing with a very highly complex and, to some extent, a very technical matter such as the coal industry cannot act in any other way but by following the conclusions come to by independent bodies of inquiry, who report unanimously on this point in a particular direction. If I may take up your Lordships' time on the question of interest I would like to tell you a story for the truth of which I can vouch. Some forty years ago there used to preside or sit in this House, in a judicial capacity, a learned Lord who was by universal 844 acknowledgment the greatest authority in this country on questions of equity, and on questions of the construction of documents. Under a certain will be was an interested person. He formed a view as to the true construction of that will which, as it happened, was in his own interest and involved several thousand pounds. He expressed his opinion in correspondence, and he found that his views were not agreed to. He then sent a case for opinion to a young and, at that time, unknown member of the Chancery Bar, and the latter thought it right to write an opinion contrary to the views of this great expert. The noble Lord of whom I am speaking accepted this adverse view without a single word of remonstrance. And when he was asked why he did so he said that a long life had taught him that no man was a judge where his interests were affected. I think, although it is a different case, that the principle is one that those of your Lordships who are inclined to think that this measure is ill-designed and unfair may well take to heart.
I would like to say just a word on the subject of amalgamations. There there has been difference of opinion among your Lordships. One noble Lord yesterday said that a blank cheque had been given by the Government to compel amalgamations. Another noble Lord said that while those members who were concerned about amalgamations were afraid of them, in his view they might well sleep happily at night notwithstanding the provisions at present to be found in this Bill. A blank cheque is very easy to fill up but I should never have thought that the case which that transaction involves was very similar to the efforts of the Coal Commission in getting over all the obstacles placed in their way before a compulsory amalgamation may be made. If one may use another metaphor I should say that you have first a difficult fence, then a water jump, then a stone wall and then a double-oxer and all these four obstacles have got to be overcome before you reach the winning post. I do not think there is going to be much actual resort or much successful resort to these measures; but then on the other hand I do not think there are a great many cases where amalgamation is necessary. There are some cases and I think it is idle to suggest that this Part of the Bill is either going to cause unfair amalgamations to 845 be forced upon constituent bodies or that there will be very much resort to the provisions of the Bill in that respect at all. That the provisions exist will be important because if there are cases, as Lord Crewe said there were, where amalgamation is overdue, then the existence of these provisions will enable steps to be taken and it will very likely lead to voluntary amalgamation if it be really necessary. That at any rate is my view with regard to amalgamations, and I think the view taken in the early days of this Bill in another place, that it did not offer enough scope for effective criticism, is an objection which no one will raise who has read the provisions which really apply to Part II of the Bill as it stands.
I now want to say a word about marketing. I do not think any of your Lordships will doubt that the provision as to marketing of such a commodity as coal is absolutely necessary. I remember when I was young reading books on political economy and being much impressed by the law of supply and demand. I thought then that everything I read was gospel truth, but it has become perfectly apparent that where there is unrestricted and cut-throat competition it is impossible for the producers to get fair prices for their produce. In the commercial world at the present time in regard to butter, pigs, milk, and I do not know how many other things, it has been found necessary to have some provision for limiting cut-throat competition by a marketing scheme. For my part, and I believe my view is shared by the vast majority of the people concerned in the sale of coal, the provisions for the marketing of coal are absolutely essential, more especially when the demand tends to fall. They have been amended in another place very largely at the suggestion of the people concerned most directly in the matter—namely, the colliery owners—and I would suggest to your Lordships that that part also of this proposed scheme will be of great advantage, at any rate of substantial advantage, to those who are most concerned.
There are just one or two things which I would like to mention which do not fall exactly within the scope of my speech, but I shall be very short. The most reverend Primate asks for some assurance on the question of the coal to be found in the wastes of manors and copy-holds. I think that has been fully pro- 846 vided for. At any rate I am prepared to give an assurance that the matter shall be looked into with the greatest care to see if anything else is needed for the purpose of ensuring that those who have rights in coal as lords of the manor shall be properly protected. There is one other matter. Lord Addison objected to the prohibition of the Commission engaging in the business of coal mining. From the point of view of the Government it is absolutely vital to the proposals included in this Bill. We do not want the Commission, and it would be quite wrong to put the Commission in a position, to engage in the business of mining coal. This is a measure primarily for the unification of the royalties only—to institute one body which will be the landlord of the whole of the industry, but not to put upon that body the duty of engaging in a business so difficult and so highly technical as that of the actual extracting of coal.
The noble Earl, Lord Crawford, sought to terrify—and he may have succeeded in terrifying—some of your Lordships by reminding you that the Government lost a sum of £1,000,000 a week by carrying on the business of coal-mining during the War. That may very well be. I do not know how much the Government would lose if they took the view of the noble Lord, Lord Addison, and empowered the Commission to engage in the process of coal-mining at the present time. But the noble Earl, Lord Crawford, knows perfectly well that that loss had no connection with the ownership of coal royalties, but was a loss caused by the Government engaging in the difficult and complex business of mining and marketing the coal. This Government at any rate, I can assure your Lordships, have no intention whatever of repeating the mistake—unless they are forced by another war or other circumstances of that sort—of endeavouring to carry on the business of coal-mining itself.
One other point mentioned by the noble Earl, Lord Crawford, was the question of the safety of the miners referred to in Clause 2. That is a matter which perhaps might be discussed at some length on the Committee stage. As it appears in Clause 2 at the present time, generally speaking the powers of the Commission will be chiefly employed in granting leases on such terms that the utmost possible care will be taken to avoid accidents by impos- 847 ing obligations on colliery proprietors to take special precautions in the matter. Whether there is any other way in which the Commission can usefully operate in this respect I am not at all sure, but at any rate that can be a matter for discussion in Committee.
Now I suggest to your Lordships that each of the three limbs of this legislation has an enormous weight of expert and disinterested approval behind it. All these Commissions are in favour of the steps that we are taking. Part II and Part III of the Bill have got just as much authority of practical men behind them as Part I has the authority of all the Commissions and Committees to which I have referred. The Third Reading of the Bill in another place was not contested. The Bill is undoubtedly not a panacea for all ills, and it would be a most unfair thing to suggest that it is. It will not have any very great immediate effect on this industry. But it is, as I contend, a perfectly honest measure intended to secure benefits to the industry by providing all the colliery proprietors in this country with a single landlord, and not only a single landlord but a landlord who has no interest whatever in making money out of the industry. An honest and disinterested landlord of all the colliery undertakings in this country does seem to me to be a thing which must finally be to the benefit of the industry as a whole.
A great point has been made with regard to reduction of rents being the only thing at present mentioned in, I think, Clause 21. It is possible in Committee that something else might be mentioned in that respect, but any reduction of rents must enure to the extent of an average of 85 per cent. for the benefit of the miners. If it is asked why it should be the miners rather than the public, the answer is that in the view of the Government and in the view taken in another place it is high time that something was done to improve the position of this industry and to improve the position of that very fine body of men, the working miners of this country. I confidently ask your Lordships to give this measure a Second Reading on the grounds which I have given.
§ LORD GAINFORD
My Lords, we have had, I think, three maiden speeches this afternoon, and I am quite sure we 848 have all listened with great pleasure to the speech which the noble and learned Lord has just delivered from the Woolsack. I think we may say that we realise that he has done his very best to commend this Bill to your Lordships' approval. If my words are somewhat less well chosen, I hope that I may be able to contribute some suggestions of value which, if adopted by His Majesty's Government, may at any rate diminish the harm which may be done to the industry and remove many of the injustices which are apprehended by many of those interested in the measure.
Last year on the Coal (Registration of Ownership) Bill I ventured to point out that I thought it would be very difficult to make a good case for the introduction and passage of a Coal Bill this Session. The result of that Bill which was passed last year, so we are told by the Minister of Mines, has been that 17,105 royalty owners have already applied to have their coal registered, and up to the present time only 404 have passed the preliminary examination for registration. At that rate of progress it seems to me as if it will take not three and a half but about forty years, spending £30,000 a year (which is the figure given by the Minister of Mines) before these properties will be properly examined and registered. But let that pass. If the registration procedure is going to be expedited it must mean the expenditure of a still further considerable sum in connection with this process. I wonder how many of those 17,105 royalty owners are regarded by the Government as morally liable for the acceptance of the Greene Report. I am told that not more than 1 per cent. of those 17,105 had any knowledge of the proceedings before the Greene tribunal, that only about twenty royalty owners took any part in connection with the negotiations, and I feel that the whole matter was very badly mishandled by those who represented the royalty owners.
The Coal Reorganisation Committee has lasted for eight years and has done no real valuable work. I am told it costs something like £50,000 a year. That is, £400,000 have been thrown away on that organisation; and I suppose some of the members of it will now be employed in connection with the new Coal Commission. Personally, I am tired of all these Committees and Commissions in connec- 849 tion with the coal trade. There are two new bodies going to be created, and they will have to be financed of course out of public funds in one way or another—the Coal Commission and the Investigation Committee in this Bill. I have yet to be convinced that anything is going to be gained by anything in this Bill for the benefit of the industry—far from it. Colliery owners as a whole are very apprehensive that the Bill will do damage to the industry and not benefit it. It was, of course, necessary that Part III should be passed, but it might have been passed, and might still be passed, by an amendment of the Expiring Laws Continuance Bill just as well as through being introduced into a coal measure. Who is suggested as going to benefit by this Bill? The miners are not convinced. The miners, in spite of what Lord Samuel said yesterday, quoting Mr. Tawney, a don of Oxford, in connection with some evidence he gave before the Commission—
§ VISCOUNT SAMUEL
Mr. Tawney appeared officially before the Royal Commission of which I was Chairman to present the evidence-in-chief of the Miners' Federation.
§ LORD GAINFORD
What the noble Viscount has said is quite true, but still I am quite sure on this point: Having represented miners and been elected over and over again by miners for the other House and for the county council in my own county, I know that the miners did not agree with Mr. Tawney for one moment in connection with the examination which was conducted by the noble Viscount when Mr. Tawney was present. I was there throughout the whole of the sittings. I know he represented and spoke for the Miners' Federation, but at the same time he did not represent their views in connection with the object of their nationalisation desires. Their desire for nationalisation has always been on the ground that they were going to get rid of what they thought was an unfair charge on the industry in connection with the mining royalties, and the only benefit which they see now in connection with this Bill is that at some deferred date it is possible there may be some reduction of the higher royalty rents which have been imposed by royalty owners upon the industry recently.
The miners are opposed to other portions of this Bill. They are very appre- 850 hensive of amalgamation, and they could find no better spokesman than the gentleman who was for a very long time secretary of their federation and who is now working collieries himself. In the very able letter which he wrote to The Times he pointed out, on behalf of the miners as well as of those who conduct the industry, that amalgamations, and compulsory ones, do not tend to the safety of mining. The miners are also opposed to the limitation of pithead prices because 85 per cent. of the proceeds go towards the miners' wages, and so long as there is a limitation of pithead prices by an authority such as is now going to be set up the miners are apprehensive that it may reduce the 85 per cent. of the additional price which might go to the benefit of themselves in connection with wages. The consumers, as far as I know—and I have seen a good number of them—do not resent the miners being well paid, but they do object to the high charges which they think are often made for coal in connection with the cost of distribution and the delivery price.
I come to the mineowners. As I have already said they do not feel there is anything to be gained by this Bill, and I will deal with one or two points later. Before that I wish to deal with the question of the royalty owners. If I had spoken yesterday I should not have referred to this matter, but I was impressed more than I can say by the very moderate language of the most reverend Primate in connection with the confiscation of property belonging to the Ecclesiastical Commissioners of which I have some knowledge. I have been also impressed with the attitude of Peers in their hesitation in coming forward to denounce this Bill as royalty owners when their own pockets are to be affected. We were told, however, yesterday by two speakers who knew what they were talking about that in addition to the £120,000 which is going to be lost by the poor clergy who are already not sufficiently well paid in this country, the royalty owners are going to lose £2,000,000 a year under the proposals of this Bill. There is no objection whatsoever in any quarter to the personnel of the Greene Committee. I do not think a better tribunal could have been appointed, and I have no doubt the period they named—fifteen years—was a very fair number of years in connection 851 with such a property as coal. But what those of us who know something about the industry feel very strongly is that the £4,430,000 upon which that period of fifteen years was based in order to obtain the global sum of £66,450,000, was not a fair figure for an ascertainment of that kind.
First of all, during the period 1928–34 we went through a depressed period of several years in which the quantity of coal was very much reduced in this country, and coalowners went to the royalty owners and asked for concessions—my firm went to the Ecclesiastical Commissioners and asked for concessions. Therefore when these particular years are taken into account the calculation ignores the fair amount which the Ecclesiastical Commissioners and other royalty owners should have obtained in a normal period for the value of their coal. The amount of £6,000,000, to which Lord Samuel alluded as the figure at the time of his Commission in 1925–26, was a much fairer figure if the latter had been dealt, with equitably. Therefore, I am not surprised when members of this House and royalty owners all over the country take exception to the amount of money of which they are going to be deprived in these circumstances. The whole case was not before the tribunal as it ought to have been presented. The Treasury figure of £4,430,000 was accepted by the Commission, whereas in my judgment it was a wholly unfair figure. If you look at the aggregate output of coal between 1928 and 1934—that is, the years which were taken—the average quantity was six per cent., less even, with one or two good years included, than in the year 1937 which we have just passed, and if the assessment had been made on the amount of rent in 1937 a very much larger award would have been given by the Greene Committee. Therefore I come to this conclusion, speaking not as a royalty owner, that there has been under the proposals of this Bill confiscation and spoliation as against what ought to be equitable and fair compensation for property. To me it is a question of right or wrongdoing, and I protest against this sum as being wholly inadequate for the interests which I think are being attacked by this Bill, and, so far as I can, I appeal to the Government to look into this matter 852 again and see whether some revision of the figures is not due.
I come now to a matter in which I am personally interested but only as a shareholder and director, and that is the freehold coal, which amounts to one-eighth of the whole of the coal that is included in this £66,000,000. Now we do claim that it is unfair upon those who have bought freehold coal for themselves, after great pecuniary sacrifice, in order to consolidate their underground operations and to produce economical working, that when they have acquired this coal at one price they should be compelled by law to sell it at another and lose thousands of pounds, as many firms will do year by year in consequence. The noble Lord, Lord Teynham, last night alluded to one case of a company which would lose between £60,000 and £70,000 by compensation such as is proposed in this Bill. That is one firm alone. Such treatment deprives the firm of an enormous amount of capital which would enable it to spend money on improvements. But I have case after case which I shall be able to give on the Committee stage making, I think, an unanswerable case for the exemption of all freehold coal which has been bought by coalowners with a view to working it themselves. We are quite prepared to have it leased by the Government on a peppercorn rent, but we decline to accept any decision of the Greene Committee upon this matter. We were never consulted, and one member of the Greene Committee told me himself that the matter was never brought before that Committee, and that if it had been he thought the proposal which I am now making would have been a very fair one—namely, that freehold coal should be exempted from the provisions of such a measure as this.
Now I come to the question of unification. The noble Earl, Lord Munster, thought that he was making rather a clever point against me by quoting some words that I spoke in connection with my approval of the principle of unification. If he had looked at many of my other references he would have found many of them condemning nationalisation root and branch. But circumstances vary, and after the passage of the Coal Mines Bill of 1930 district boards were set up, as the noble and learned Lord on the Woolsack said, with a view to bringing under- 853 cutting between competing firms to an end. District boards having been established they had to arrange for standard tonnages for all the firms, and the amount of coal which they can produce, as well the control of prices. We came to the conclusion in the industry that under the powers we then possessed we had no alternative but to refuse to carry out certain provisions of our leases, and we also came to the conclusion that the principle of unification might then be justified. However, I must admit that in the last five years we have had such concessions from royalty owners in connection with the terms of our leases that we have no complaint at present in regard to our treatment by them.
§ THE EARL or MUNSTER
The noble Lord will remember that he made the statement in 1934, which is not five years ago.
§ Loan GAINFORD
I thought it was 1933. I added fifteen years to 1918 and I thought it came to 1933. However it does not matter whether it was four or five years. Since then, as I have said, we have gone through very serious times. Adversity is a hard task-master, and we have done a good deal in connection with the rearrangement of our leases, with the consent of royalty owners, and, as I say, at the present moment we have no complaint to make in regard to our treatment. What we ask for is that there should be fair compensation in connection with the application of this principle, and we all agree with the royalty owners that they are not receiving fair compensation under the provisions of this Bill. One of the things which we as mineowners feel very acutely about this Bill is that we are going to lose so many great advantages which we have had through the ownership of the coal and of the surface being in one hand. Facilities have been granted to us for the building of houses for our workpeople and for the erection of our plant and coke ovens and other things. The facilities that we have received in this respect have been of enormous value, and we fear that if this Bill becomes law the owner of the surface, riot being interested in the coal, will be in a position to exploit the mineowner and to extort the highest terms he can in respect of any claims for damage to the surface and so on.
854 Now I come to the question of amalgamation. Probably, I suppose, no one has had more experience of amalgamations of iron and steel and coal enterprises than myself. There are a great many views as to how amalgamation should be best carried out. I for one believe in leaving business men to settle their own amalgamations for their mutual benefit, and not to rely upon the State to interfere by forcing compulsory amalgamation upon people who do not desire it. I must divert for a moment to refer to the attitude which my right honourable friend Mr. Stanley, if I may so call him, has adopted towards the Mining Association. He is very sore that in connection with amalgamations we entered into a public agitation in order to secure the safeguards which were put in the 1930 Act by your Lordships in order to prevent amalgamations being enforced on any parties. This Bill not having any of those safeguards in it, we asked the Minister responsible for the Bill to receive a deputation. Time after time he refused to hear us, to see us, or to have anything to do with us, and if anybody has a grievance it is the Mining Association who were refused a hearing for their views by the Minister of the Crown responsible for the Bill before he produced it.
We had no alternative but to raise that agitation which induced the public through their representatives in the House of Commons to secure for us an appeal court as now introduced into the Bill, although I regard that appeal court as a very cumbersome and expensive method of settling troubles in connection with the industry. It is a political body and I would much sooner have a matter of this kind left to a judicial tribunal rather than to political Committees of either House of Parliament with all the expense entailed. However, what we do insist upon as a mining association—and I hope the Government will accept our Amendments—is that we should know the reasons for an amalgamation before these Committees sit so that we shall have an opportunity of knowing the case for an amalgamation and be able to oppose an amalgamation if we think that any of our interests are prejudiced. That I think is only fair. Under the provisions of the Bill, however, the reasons need not be produced, although they are essential to those who are interested in the question whether their concerns should be amalgamated.
855 To the inconsistency of Ministers perhaps I need hardly refer, but I feel justified at any rate in re-reading an extract from a speech by the noble Earl, Lord Baldwin, in connection with amalgamations, because it represents so truly what was I believe the view of the whole Conservative Party in the year 1930. I cannot understand why any of them should differ from those views to-day. Speaking on April 3, 1930, on the Coal Bill, Mr. Baldwin, as he then was said:… coal pits differ very much from each other … and there is a real fear that the end of your compulsory amalgamation … may be simply this—that you take a progressive, productive concern, and you kill it by hanging half a dozen duds round its neck.He went on to say:Compulsory amalgamation I do dread very much, and I also dread it from the financial point of view.Mr. Baldwin added:All the books of orthodox political economy will be thrown into the funeral pyre. The indecency of that proceeding takes from me the further power of speech.Now, if I may, I turn to what is the main case put forward for this Bill and that is that the industry does require reorganisation. Those were the words used by the noble Earl who introduced the Bill in his great speech yesterday, and the same charge was made against the industry by the noble Viscount, Lord Samuel, in his speech. We as coalowners entirely repudiate the charge that the industry is not well organised. As the noble Earl, Lord Crawford, said yesterday, it is the only industry which has an arrangement with its workmen by which they receive 85 per cent. of the proceeds. We have had troublous times. I do not deny that. We lost trade in the War. Our output was reduced from 280,000,000 tons to about 200,000,000 tons, and our exports so went down from 70,000,000 tons that last year there were only 37,000.000 tons. But that has not been due to any mismanagement on the part of the coalowners. Coalowners, although they have had very little capital to spend on improvements, and although they have had no dividends for their shareholders in very many cases, have managed in recent times to spend a lot of money in development work, in putting down electrical plant for hauling, ventilation, pumping and mechanisation. In 856 1928 we had 2,200 conveyors and to-day we have over 5,000 mechanical conveyors. Mechanical contrivances for drilling instead of hand-work which were installed in 11.8 per cent. of our collieries in 1928 are now installed in over 5o per cent. of the collieries. In connection with sorting, cleaning and marketing and in the provision of safety appliances I believe we are the best organised coal industry in the world, and I repudiate the idea that a Coal Bill is necessary in connection with reorganisation.
I am only going to make two other remarks. One is in connection with prices. We have given assurances, to which we shall adhere, in connection with the price of our coal that I believe will be satisfactory to our consumers. I would point out that in conducting our business it is always to our interest to do our very utmost not to exploit our customers but to retain their good will and their custom. It is not to our interest to exploit them and to end that friendship which has always existed between buyer and seller in the industry. I do not believe there will be much work for this new Commission and on the whole I have very little exception to take to Part III of the Bill.
If I may I will sum up what I regard as the greatest defects of the Bill. There is, first, the inadequate compensation for royalties, with which this House I know cannot deal. Then there is the question of the exemption of freehold coal which this House can deal with by Amendment to Clause 12. There is the matter of arbitration where differences occur in connection with leases which are made by the Commission or arising in connection with their interpretation. There is the point that cash payment should be made and not payment in scrip. Where compulsory amalgamation is forced upon us there should be full particulars made public to justify amalgamation before a Committee of either House sits. There is another small point which I think must be left to the House of Lords to settle. It is a question on which mineowners differ. That is whether there should be a uniform reduction in royalty rents when there is any money for that purpose, or whether, as proposed in the Bill, high royalty rents should be brought down to the level of the lower rents. Many of us feel that the high rents are due to the 857 increased value of particular coal such as exists in Wales, and that it would be much better to have a uniform reduction of rents all round rather than have the higher rents where the coal is of most value reduced to the figure of rents where coal is of less value. I fear I have occupied rather more time than I intended to, and I only want in conclusion to refer to what Mr. Oliver Stanley said in the House of Commons. He said it was up to Parliament to see that the rights of mine-owners were not to be injuriously affected by this Bill, and he added "I say that deliberately." I am relying on the noble Lord in charge of the Bill to make certain that that assurance will be observed.
§ LORD SNELL
My Lords, I am wholly incompetent to enter into the complex details of this Bill. I have never been a miner, and I am sorry to say I have never been a royalty owner! I intervene for the sole purpose of reminding your Lordships of a side of this Bill that is in danger of being forgotten, a side that the miners themselves, the Labour Party as a whole and a vast number of workers in the country regard as most essential: that is, the welfare of the mine workers themselves. Granted that this Bill becomes an Act, we cannot, with the most generous view of it, see that the lot of the mine worker is going to be very much improved, if improved at all. The miners themselves and the Labour Party are not unwilling that complete justice should be rendered to the royalty owner, but they also want justice to be rendered to the coal hewer, who is a very important factor in the mining industry of this country. The case for the Bill was presented to us by the noble Earl, Lord Munster, whose growing competence in your Lordships' House is a matter of great satisfaction to us all. As a very old offender in public speaking, I congratulate the Government on the speech that he made. At the same time I give the noble Earl, the Leader of the House, fair warning that if I see the slightest chance of annexing him to my own purposes on this side of the House, I shall do it without hesitation!
The case against the Bill was presented with a note of personal injury, which might have been anticipated in a debate of this kind, by those who consider that the provisions of the Bill touch the sacred ark of the covenant of unrestrained private enterprise. Their grief was, however, too 858 angry to be at all impressive—at least to myself. The Bill, so far as we could judge from its reception yesterday, had no enthusiastic support in any part of your Lordships' House. It does not settle the problem attached to the coal industry. At the most it will diminish some acute grievances; it leaves untouched the fundamental problem. Its aim would appear to be to safeguard whatever may be left of private enterprise in an industry which is destined at no distant date to come wholly under public control.
The noble Lord who has just spoken, Lord Gainford, whose authority in this matter all of us would wish to recognise, said that the miners themselves were only interested in the question of royalties. They are interested in that, but they are interested in something else even more acutely: they are interested in the question of personal security in their work in the mines. They remember that in Holland, for example, where the coal industry is nationalised, the accidents are only half of what they are in this country. The conditions may be different. I make no accusation about it; I merely wish to point out in passing that security for the miner's life while he earns his daily bread is the supreme consideration. The noble Lord also said that the miners did riot want amalgamation. At least the miners' representatives in the House of Commons, who ought to know one side of the industry at any rate, supported this Bill and let it go through its Third Reading without a Division.
The Labour Party as a whole regards this Bid as better than nothing and is willing to accept the Bill as the beginning of a dealing with the problem, but in no sense regards it as an end. Unification, in its view, is a step forward, but the compulsory amalgamation clauses appear to render quite uncertain and possibly quite futile the proposals for amalgamation. The Act may be proved to be unworkable except when all the interests are agreed. The big interests may, and probably will, buy out the smaller interests, the result of which may be to strengthen monopoly practices without giving the public any kind of effective control. In any case, the Bill will not provide effective organisation. It has been said that the owners have risked their capital in this industry. That is true, but it is also true that the miners have invested their lives in it. As 859 it is an exceptional industry, where the dangers to human life are so great, the coalowners must accept the inclusion of unusual regulations for the protection of human life.
My desire is to end very quickly. I will merely, therefore, say that the miners appear to pay a very heavy price for our present system. If I am correctly informed, during the last sixty-four years up to September last there have been no fewer than 72,000 fatal accidents in British mines, and during the last sixteen years the non-fatal accidents have grown to 2,000,000 or more. In regard to compensation, we think that the proposals are at least adequate, if not generous. When the miner is disturbed, either through the closing of a pit or in any other way, the kind of compensation that is given to him is a mere pittance.
In conclusion, I would just say that we are unable to welcome this Bill. The principle of the mere amalgamation of profits, without regard to social finance and the welfare of the people, does not attract us. We dislike the Bill in so far as it perpetuates a system in which social considerations are subordinated to commercial success. This Bill will not be the end of the controversy; that will probably be postponed until another type of Government is in power. The nation as a whole is completely tired of this industry, and wishes some action to be taken. Since 186o there have been nine Royal Commissions, thirty Commissions of Inquiry, and over thirty separate Acts of Parliament, all of which suggests that nationalisation, so terrifying to my noble friend Lord Gainford and to your Lordships, is the end which will have to be faced. I understand that at a later stage of this Bill the noble Lord, Lord Hastings, and his friends, are going to move that it be an instruction to the Committee to leave out Part I of the Bill. My Lords, we, as I have said, dislike this Bill—dislike it for what it leaves undone—but there are things in it which will help, and on that account we shall have the humiliation of having to go into the Division Lobby to save the Government from the zeal of its own friends. On that principle His Majesty's Opposition will vote as one man, and I hope we may thereby acquire temporary merit from His Majesty's Government. We, in any case, shall deserve it, for an Opposition can show no greater 860 self-denial than that it will save the life of its enemies.
§ LORD CROMWELL
My Lords, when I entered this House, a comparatively short time ago, after signing my name at the Table I walked towards the then Lord Chancellor, who was good enough to shake me by the hand. I was told that I was on that occasion breaking the only rule of the House—that was, in passing in front of the Woolsack. Obviously there was a very good reason for that rule, because in so passing I trod upon the then Lord Chancellor's toe, and he had to restrain himself from telling me exactly what he thought of my actions. Being told that that was the only rule of the House, I was rather surprised to hear, if I may say so, fall from the lips of the present Lord Chancellor—who as is the custom left the Woolsack to deliver his address—a lecture to your Lordships, which, although I have had no experience of the other place, would I am sure not be in order for the right honourable gentleman who occupies a similar position there to have delivered. I am sure the Lord Chancellor will not shelter himself behind his great office or the Woolsack, if I just make this comment, in regard to the implication that certain members of your Lordships' House would vote a certain way because it was in their own personal interest to do so, that I myself without any offence take a certain amount of objection to being lectured in that way.
In venturing to address your Lordships I make no apology for the fact that I am vitally interested, financially, in this measure, and therefore, as was indicated by the noble Marquess, Lord Crewe, I do not claim to be impartial; but, like the noble Marquess, I claim to be trying to view the whole question from an impartial point of view. I think that your Lordships will agree with me that there are not a great number of your Lordships in this House who have a personal knowledge of the intricacies and technicalities of this Bill who are not themselves interested in the financial or other side of the measure, in some way or other. In fact one of your Lordships, who is not now in the House, indicated not so long ago that he was not sure that he could take part in this debate at all, and was satisfied that he would not vote in any case if there was a Division, because of 861 the fact that he was interested in the outcome of this measure. It was very quickly pointed out by another member of your Lordships' House, who is in his place now, that if that was carried to its logical conclusion there would hardly be any measure at all on which any member of the House could either deliberate or vote, because if not directly and intimately interested he would be indirectly interested as concerned in the welfare of the nation, and therefore he would not be able to vote upon any measure at all.
Therefore your Lordships will see that I am taking part in the discussion, and if any vote is taken I shall certainly vote in the way that my conscience directs me, and I hope my conscience will direct me to vote ill the interests of the community as a whole. There can be no doubt, to my mind, that this measure has been introduced by the Government, if not entirely at any rate mainly, for the reason that it is a political Bill. I do not mean a Party Bill, but it is introduced, I contend, mostly for political reasons, although of course there are some features in the Bill which continue existing legislation and attempt to improve it. Therefore, as was pointed out by Lord Hastings, it is not possible at this stage to oppose the Bill as a whole, because there are some parts of it which obviously should go anyhow as far as the Committee stage. But I do submit to your Lordships that the measure requires a good deal of close examination before a departure from an accepted principle—that is, in regard to the wholesale purchase of a raw material such as this—can be undertaken or justified.
No one, I think, would suggest that vested interests should take precedence over the general interests of the community, and one readily admits that under existing legislation compulsory purchases already take place. Both the State and county councils do, almost day by day, as alluded to by the Lord Chancellor, have to make compulsory purchases of land for public purposes. Otherwise, any individual owner who liked to be unreasonable could prevent any scheme of this sort taking place at all. The Lord Chancellor did, however, think fit to make a comment on an observation which fell from the lips of the most reverend Primate. He defined for us, as of course he is entitled to do, what the word "expropriation" means, and he gave as an 862 example that it could be applied in its logical conclusion to the Income Tax of 5s. 6d. in the pound proposed in another place. If I may carry that argument a little further, supposing the Chancellor of the Exchequer of the day were to introduce into the Budget an Income Tax of 21s. in the pound, that might perhaps be put in a different category from a 5s. 6d. Income Tax. So apparently there are degrees of expropriation, and I suggest that the proposal contained in this measure is a degree of expropriation and is something half way between the 5s. 6d. in the pound and the 21S.
All of us object when any scheme of improvement is suggested, however much we have advocated it in principle, if it involves the pulling down of one of the walls round our garden so that the public are able to gaze straight into our front window. Therefore I suppose it may fairly be said that because the coal is being forcibly taken from us we have reason to object, and especially if we do not think we are getting reasonable compensation for it. I suppose it is true to say that, apart from the land, coal is about our only stable national asset. I do not think anyone would dare on this account alone to justify the purchase of the coal. So to justify this Bill one must look for some other reason. It has already been stated in several quarters, and in particular by the noble Earl who introduced the Bill, that actually there is no question whatever that the present owners have a right to their coal. Up to about three hundred years ago anyone owning land who thought fit to do so could obtain quarried coal or stone or gravel from his property, and he is entitled to do so now. It will not be asserted, I think, that there is any reason why coal should be treated differently from gravel or sand.
As was pointed out by the noble Marquess, Lord Crewe, if one were to dig a hole in the ground and get something, and then went on to dig a little further and get something else, and if one were to dig further still and get something else, how on earth could it be suggested that those commodities should be treated in a different way? He then went on to say that, for some reason which he was himself unable to explain, because coal is brought up in a lift it appeared that there was some difference between coal and the other commodities. As your Lordships are well aware, about three hundred years 863 ago a case, which has already been referred to, came before the Courts and it was decided that the owner of the surface owned all the minerals underneath, apart from precious metals, and the only exception to that is oil, the right to which by recent legislation has been removed from the owners of the land.
I think it is impossible to suggest that you can compare oil and coal. For example, coal is a static body, of which the boundaries can be defined, and oil is a fluid which may be found anywhere; and anyone drilling a hole in the ground may take oil which comes perhaps from an oilshed (if that is the technical expresion) under someone else's property. Therefore it cannot be said in any way to resemble coal. It could more readily be compared to water. If a spring rises in a certain person's property he is entitled to that water wherever it comes from, though the watershed may be underneath the land of a great number of his neighbours. It has been suggested that in the case where the owner of the surface and the owner of the coal are different people there should be some difference in the way they are treated in this Bill. I do not wish to labour this point now, but one noble Lord suggested that the coal owned by the colliery proprietors should be excluded from this Bill. I myself would certainly subscribe to that, provided it was also excluded from the 66,450,000 at which the coal is valued. If that were done I think it certainly would be a way of giving fairer treatment to the present owners of coal.
I have especially avoided using the word "royalties" because that expression has given rise to a great deal of misunderstanding. Most members of the public would assume that coal royalties are the same as the royalties which an author receives from a book, but they are no such thing. They represent the actual purchase price of the coal. A royalty is not a permission given for a colliery to work the coal, and for which they pay so much, it is the actual price per ton which the colliery company pays to the owner of the coal for the coal actually drawn from its seam. If that were more clearly understood, by your Lordships in particular, I think those noble Lords who have taken a certain line in argument might perhaps alter their 864 tune to some extent. The only difference is that in most cases when the coal is sold it is sold for a period of years and, instead of selling the coal and receiving a cash payment the same day, there is an agreement between the colliery owner and the owner of the coal to pay so much a ton for the coal, and only to pay for the coal when it is actually taken out of the seam.
Having now explained my view of the nature of royalties, may I say that I think it has already been admitted by the noble Earl, Lord Munster, that the average coal royalty would be something under sixpence a ton. When one deals with an average figure one is very apt to get into trouble, and of course there are coal royalties which are higher than that, but there are also some which are lower. It cannot be seriously argued that the price of sixpence a ton on coal materially affects the actual price which the small buyer in the house has to pay when the coal is delivered into his cellar. In point of fact, there is a very big difference, as your Lordships know, between the cost of the coal at the pithead and the price charged when it is delivered into the cellar. Whereas there is only a question of a few pence involved in the royalty, there is a question of many shillings between the price charged at the pithead and that received when it is put into the cellar. I suggest that there are economies which could be made in distribution which would completely swamp any effect which the sixpence or so—be it a smaller or greater amount—has on the actual cost of the coal.
I think it was admitted by the noble Earl, Lord Munster, that the price of royalties would not in itself have been sufficient ground for introducing this measure because—he did not use these words—it would not make any practical contribution towards assisting the industry. Your Lordships will be aware that the royalties are to continue under this measure. It simply means that instead of being paid to individuals, they will be paid to the Commission. I can quite see the point of the noble Lord who speaks for the Opposition when he says that if anything is to be taken off the price of coal it should go to the taxpayer. I can quite see the force of that argument if one is going to introduce a measure of this sort at all. In point of fact, as has been pointed out 865 by several of your Lordships, there will be no immediate economies at all, and it will be some time before anything is derived from this measure which will help the industry or help the price of coal.
On what argument, therefore, do the Government justify this measure? It would appear that, administratively, it could be claimed that vesting the coal in one ownership would be an advantage, but that ownership need not necessarily be the State. As the noble Viscount, Lord Samuel, pointed out, the Commission over which he presided recommended that it should be in the hands of one owner, but they did not recommend that it should be in the hands of the State. They said that the State might be considered as one possible owner. I do not think that Commission went further than that in their recommendation. But if it actually passes into the hands of the State, there can be no question it is a Bill for nationalisation. This I intend to deal with a little later, if I may. Meanwhile the whole question bristles with difficulty and, most important, the separation of the ownership of the coal and the ownership of the land will involve the greatest difficulties for all concerned. As will be known to most of your Lordships, subsidence does not occur at once when the coal is withdrawn, and also it does not happen uniformly. It may be some time after the coal face has passed beyond individual property before any effect is shown at all. When that effect occurs it does not happen uniformly. It is not a sudden drop. It drops according to the soil which is underneath. And it is not regular, and therefore very great damage may be done to any building, however constructed. I do not intend to refer to that part of the Bill which sets out that the Commission will have to be satisfied that the construction of the building is such that it will withstand such an occurrence, because that is not possible. It would not be possible to construct any building which in every case would withstand that form of subsidence.
I would suggest, as has been done by other speakers, that the very fact that the owner of the surface is not now to be the owner of the coal will at once create difficulties. Up to now the owner of the surface, being the owner of the coal, has worked as a helpful partner with the colliery concerned. Now he will be working 866 directly against the colliery company because, although in the past he has derived income both from coal and from land, he has weighed it up with the colliery company, both of them thinking of the interests of the community first, whether it would pay either of the parties to work that coal or leave it, depending on the actual compensation which the colliery company would have to pay for putting the estate in the same position as it was before the coal was removed. The Government may well answer that if any individual is going to be so selfish as to prevent the proper working of the coal underneath his land they will very quickly pass a measure which will bring that impasse to an end. It would not be a bad prophecy to say that that will be inevitable. It will be inevitable in some form or other that the land should be purchased by the State or such restrictions should be placed on the land as to take away completely any enjoyment of that land from its owner. One has to bear in mind that it may not necessarily be some grasping individual with whom one has to deal. In many cases, in by far the larger number of cases, it will be trustees and these trustees will be bound to see that the value of the property is kept intact.
If I may be so bold as to question the ruling of law as given by the Lord Chancellor—I know it is a big step to take—if his ruling is right that three-quarters or one quarter as the case may be (I cannot remember the legal language he used) of all moneys derived from the sale of coal—in other words, coal royalties—must be set aside and treated as capital, I suggest that the Ecclesiastical Commissioners are the only people drawing money from coal who are carrying out the law. I would say that in a great number of cases nothing is put aside for capital, and I would suggest that 10 per cent. is a high figure. I know a case of 10 per cent., I know a case of nothing, and therefore I quote these particular figures. I suggest that it depends entirely on what appears in the settlement. If it is settled land, it will depend entirely on what appears in the settlement whether anything derived from coal royalties is set aside for capital.
I feel convinced myself that the owner of the surface must of necessity be the next victim, but until I actually see that come to pass I shall not believe it. I 867 believe that the present Government, a National Government as it is, will almost entirely support the words which fell from the noble Earl, Lord Munster, when, in moving the Second Reading, he said that private enterprise was to be maintained and could only be interfered with when it was in the national interest to do so. If that is so, then I should like to know whether the noble Earl thinks it will be in the national interest to buy the land above the coal in a short time. That may not be his view, but it is my own view. As I stated earlier, this, in my opinion, is a measure which has been brought in not entirely but chiefly for political motives. The unification of coal was mentioned in His Majesty's gracious Speech certainly once, if not twice, and so far as that is concerned I think the Government are entitled to bring in a measure for the unification of coal, but I submit most strongly that they are not obliged, because of those words in the gracious Speech, to bring in this particular measure, and that they have no authority for doing so. They are quite entitled to do so, but they must not, I think, quote what appeared in the gracious Speech from the Throne in justification of bringing in such a measure as this.
The noble Earl, Lord Munster, admitted that the owners of coal had a perfect right to it in every way. If I do not misquote him he meant by that actually and morally, though he did not use those words. I would suggest that it is quite common to hear it stated that it is almost a crime to be the owner of coal, but the majority of the people who say that do not, I think, subscribe in any way to the doctrine of private ownership of anything. I do not believe that is the Government's view, and in fact I have been assured that it is not their view. I do not see that coal can be treated in any different way from the inheritance and ownership of, say, stocks and shares, either Government shares or any other. It would be true to say, I think, that the Government have the majority in the country in numbers behind them in introducing this measure, because, owing to the gross misrepresentation which has taken place, for some reason or other royalty owners are well nigh placed in the class of people living on immoral earnings. I am a member of 868 the Church Assembly, and I actually took part in a debate in which there was a proposal put forward quite formally on the Paper by a member that the Church should refuse to receive any more rents from coal because it was immoral to do so. That is the sort of thing we have to contend with. It is not just. Either you believe in the sanctity of private property or you do not. I suppose if one went back far enough every single possession in the hands of your Lordships at present was got by piracy. There were various forms of pleasing the King or Parliament, and at some time in the history of a family something was given for something which one gave them.
As I say, one must subscribe to the doctrine of private property, which includes coal, or leave it alone altogether. Under the democratic system which we enjoy at the moment there are, of course, many disadvantages, but I do not for a moment suggest that those disadvantages are not much worse in any dictator State whether the dictator be from the Right or whether he be from the Left; they are dictators just the same. We at least have a certain amount of privilege. We can walk reasonably outside the pedestrian crossings without being run into gaol, and we have the liberty of walking on those crossings if we want to be safe. As I say, there are disadvantages in the democratic principle, and one of these, I think, is apparent now. The Government think that a pledge has been given to introduce such a measure as this, and they are trying to justify it on that account. I have endeavoured to show that from the financial point of view the acquisition of the coal is not justified, and that politically it is only justified if our rulers are governed by their hearts and not their heads. One must therefore see if there is any justification for it. In my view the only possible justification might be if, as has in fact been stated, the economic development of the coal was being retarded by the unreasonableness of certain owners and, most important, there was no existing way of bringing them into line. As is well known, the Railway and Canal Commission have full power, where the national interest demands it, to insist on any coal being worked, and the owner is bound to accept a fair price for it. This, therefore, to my mind explodes the last possible argument which can be used in favour of this 869 measure other than the political one. In this I am referring to Part I.
There are two angles, I submit, from which one should examine the measure. Firstly, is it necessary, taking all the circumstances into account, or expedient that the coal should be nationalised? Secondly, if you come to the conclusion that it is, are the owners of the coal receiving a fair price? In what I am going to say now I am only using certain words which fell from one of your Lordships not now in the House. He put this into my head, and, if I am cribbing from him, I thank him and apologise for doing so. If one took the narrow point of view at this stage, one would try to prove that in fact this is a Bill for the nationalisation of the coal industry, and that it can be used as a precedent by this Government or, which is perhaps more important, by some alternative Government, to nationalise or socialise all forms of property, starting with the land, continuing with the railways, and eventually embracing all forms of industry. When the noble Lord, Lord Addison, spoke he emphasized—your Lordships can read what he said on this matter in the OFFICIAL REPORT if you care to look at it—the point that his Party took note of this measure, and that fifteen years' purchase is the most that it is considered any property is worth, and that they will see to it that that is not neglected in future. I am going to try, if I can, to disprove that this measure can be used either by this Government or by any future Government as a precedent for the nationalisation of any industry. It is difficult, but I am going to try.
In another place a certain member who was not at all friendly to the Government, when the matter of the appropriation of oil by the Mexican Government was being discussed, asked how a British Government could in fairness object to the Mexican Government doing for oil exactly what the British Government was doing for coal. I think there was a certain amount of truth in what he said. He did not, as far as I know, use the word "confiscate" but he implied that that was what was being done in both cases. I think that although one may do harm to oneself at the present time, yet looking back one may at some future time be consoled by the fact that one did try at this stage to point out, however diffi- 870 cult it was to do so, that in fact this measure did not propose to nationalise the coal industry but to deal with it in the same way as electricity and other concerns of that sort have been dealt with by way of boards and commissions, and that therefore nationalisation could not be introduced using the Coal Bill as a precedent. I suppose the argument one would use in support of the theory would be that pure nationalisation involves the running of the industry by the State and the using by the State of any profits, as noble Lords opposite desire. Not that any profits for the State would be likely. There would be profits to the Commission of £2,000,000, as we know, each year. One would go on to say that in fact it was not the intention that the State should take part in the day-to-day administration of the coal industry, but that the Commission should have full control, subject to the supervision of the Board of Trade in certain aspects, and that the profits, which would as I have stated be about £2,000,000 per year, would be used eventually in one form or other for the benefit of the coal industry, commencing with extinction of the royalties. It has been stated that that is the only way in which the balance could be used, and I will accept that.
If I may I should like to be allowed at this stage to suggest a correction in what the most reverend Primate said. In connection with the Marriage Bill, I think it was—I forget its exact title—I told him that his mathematics were not as good as his other attainments. I suggest that he showed that yesterday. By a process of deduction, which he explained, he said that by this measure the Ecclesiastical Commissioners and through them the Church would lose £50,000 a year. That is wrong. They would lose £120,000. The fact that they have been prudent in putting aside certain sums—and apparently they are under a legal obligation to do so—amounting to £70,000 a year does not mean that they are only losing £50,000. They are losing £120,000. It is true that the recipients will not lose as much as if the Ecclesiastical Commissioners had been distributing the whole of that sum before, but the Ecclesiastical Commissioners are losing £120,000. I was very sorry to see glaring headlines in the newspaper. They were correct, of course, because it is the most reverend 871 Primate's figure that was wrong. £120,000 is the figure. Every famous man—I need hardly say I do not describe myself as one—is likely in the future to have to face up to something which he said in the past. There were instances of that yesterday in reference to words used by two noble Lords opposite. They could not deny them, but they were able to say that of course circumstances were so different that the words were not applicable in this particular case. I must remember that for future reference.
I claim rightly or wrongly to have a certain intimate knowledge of this industry, and if I may be allowed to develop my argument to its conclusion I will be as brief as possible. As a humble member of your Lordships' House what I am saying will be recorded, and I should like to go down as having suggested that no Government in the future can use this Bill as a precedent for wholesale nationalisation. It is quite possible that when a doctor recommends a dose of salts to a patient it may do him good, but if another doctor recommends him to take the whole bottle it may kill rather than cure the patient. If I may refer at this stage to the fact which was pointed out by the noble Lord, Lord Teynham, that there was an alternative scheme suggested to the Government for the unification of royalties, I would admit that it was presented at rather a late stage in the proceedings. But it was presented in good faith on the assurance given by the noble Viscount, Lord Halifax, who was then Leader of your Lordships' House, that any suggestion submitted by the mineral owners' association would receive consideration. This proposal, which among other things suggested sharing some of the £2,000,000 surplus of the Commission between the State and some of the colliery undertakings, was turned down, to my way of thinking, out of hand, because we were told so soon that it was no good, that the Government could not have had time properly to consider the proposal.
In this connection the noble Viscount, Lord Samuel, quite rightly said that Part I was of the essence of the Bill. He did not go on to say, although I think he cannot deny it, that Part II and Part III can be proceeded with even if Part I is not. They are not interlinked. Part II and Part III in large measure renew pre- 872 vious legislation. As appears in the Bill the Government propose to pay £66,000,000. This is a point I really want to get home. That sum is for all the coal in the country, whatever it may be, leased or unleased, proved or unproved. The Bill is taking away more than that: it is taking away, at the price set out by the tribunal, something which was never put before the tribunal. They were only asked to value the coal; they are taking all the underground workings as well. In that sense the royalty owners certainly have a grievance. The only thing which was asked of the tribunal was that they should fix some figure by which the £4,300,000 should be multiplied; for some reason or other that was to be the actual value of all the coal in the country. The line of thought which must have gone through the minds of those members of the Commission was that, as Death Duties—to use no stronger term—were calculated on less than fifteen years—I suppose something like thirteen would be nearer the correct figure—it would not be right to give any more for all the coal in the country.
That is the fallacy on which the whole Report is based. When Death Duties are settled on an individual property, they are settled with regard to the risks special to that particular property. The risks special to practically all properties are strikes, faults and—which God forbid!—accidents. For that reason it is suggested that the income of the undertaking might fall, and so not more than fifteen years is suggested as its value. Now you cannot apply that reasoning to all the coal in the country, for this very good reason. Suppose one pit gets up less coal, that is immediately transferred to some other pit, and if there are not enough pits to get it up, then you immediately go and tap all the five hundred years' worth of coal which is known to be at present underneath the ground and which, if worked at the present rate, would still leave some there. It is therefore not possible to compare any valuation you put on an individual pit with the valuation of all the coal as a whole. I will not labour that point, but I hope I have made it clear. Perhaps I have already insulted too many people, but I suggest that, if you were to see the report of the tribunal, it would merely consist of the figure 15 written on an envelope. That may not be true, but I am suggest- 873 ing that that is all the tribunal did: they wrote "15" on an envelope, and the whole of this measure is based on that figure.
It has been suggested that the advisers of the mineral owners prepared a bad case. I am afraid that I could not subscribe to that suggestion, but I could subscribe to this: that the terms of reference submitted to the tribunal were most unfortunate. When the noble Viscount, Lord Samuel, was asked this question he said he could not help that, or words to that effect; that it was no concern of his. But imagine, my Lords, finding yourselves in the position of having to fight the Government. You cannot compare it with two ordinary interests competing. The Government said, in point of fact: "If you cannot suggest a figure which the coal is worth to which we will agree, you will see it in the Bill next week." What alternative had the royalty owners' advisers but to say: "Well, we will clutch at the last straw, an independent tribunal." They agreed to terms of reference to which I, as a royalty owner, also agreed, but a very important part of the terms of reference was that the income should be considered in perpetuity. Any income which is considered in perpetuity must, I contend, be worth more than fifteen years' purchase.
I have nearly finished, as your Lordships will be glad to hear, but I do not think it is fair to suggest that a bad case was presented. I was perhaps the only members of your Lordships' House who sat through practically the entire proceedings of the Commission. I listened with great interest and was astounded at the decision given. I would suggest that if the evidence given to that tribunal were published, no one could but be surprised that fifteen years was the award actually made. I have here a book labelled Mining Royalties in Relation to the Coal Bill and written by Mr. J. B. Dickie. I suppose that Mr. Dickie is an authority, because in the foreword appears this remarkable statement by the present Chancellor of the Exchequer, that he has read the book with interest from cover to cover and would recommend anyone else to do the same. I do not want to make any reference to the book which I cannot prove. In it appears the following, which is most interesting: that the Samuel Commission gave an award of 874 £100,000,000. That has been corrected by the noble Viscount: he said it was £92,000,000 plus £8,000,000. We must therefore regard the £92,00,000 as a comparable figure to £66,000,000. Mr. Dickie, who is apparently an authority upon whom the Chancellor of the Exchequer relies, goes on to say that no doubt the royalty owners would want a higher figure than this now because the rates of interest are different now from what they were then. When the Samuel Commission gave their opinion the rate was something around 5 per cent.; now it is 3¼ per cent., and if you were to reinvest £92,000,000 at 5 per cent. you would get a very different income from that which you would get by investing £66,000,000 at 3¼ per cent., which is all we have to do. I would go so far as to suggest that if £100,000,000 had been the award, I should have accepted it without comment, still thinking it to be low.
I think I have now dealt with practically everything. I know I have bored a good many of your Lordships, but I wanted to get this off my chest! I do not know much about anything, but I do know a little about this, as I have been too much in the mill myself. In conclusion, I would make one other reference to Mr. Dickie, with particular reference to what the noble Marquess, Lord Crewe, said about gilt-edged securities. He said it is perfectly true that it is not a gilt-edged security, because it is not an income, it is a capital. That is what the noble Lord said. But it is gilt-edged, I suggest, from every other point of view, in so far as Mr. Dickie actually says this. He quotes the figure of £5,000,000, which was then the figure before the Samuel Commission, I believe, and he said that it was largely maintained by minimum rents. Now either you think minimum rents are bad or good, but the fact remains that they are there. He goes on to say that the income of the royalty owners did not actually suffer to any marked degree over all the bad period of the coal industry because of that very fact that it was secured by a minimum income. Therefore, although it is not a gilt-edged security as interest it is a gilt-edged security of capital in every other way, and I suggest that it could not be treated really in any other respect than that. The tribunal treated it as a 7 per cent. security, which is really equivalent to a property which is either in a bad state 875 of repair or which is difficult to let. I hope I have made out my case, and I shall try to bring up a few points which I have omitted at the next opportunity.
THE EARL OF LINDSAY
My Lords, may I put your minds at ease at once, and say that I do not intend to detain you for more than a few moments. The Bill before us has been criticised in almost every part of the House, and so it necessarily follows that there is very little to add to those criticisms. I for one would not venture to address your Lordships on this matter after hearing the speeches of certain noble Lords, like Lord Gainford, who knows the industry from A to Z, but for the fact that I have had nearly thirty years' association with the industry. This Bill is divided into four Parts, but to all intents and purposes Part I and Part II are the contentious parts. Part I, I hope the Government will not mind my saying, is camouflaged under the tile of "Unification of coal mining royalties." Part II deals with amalgamations. The group of collieries with which I am associated have as many leases to deal with almost as could be found in any coal undertaking, owing to the fact that there is such an immense number of small proprietors, and I cannot remember, in all the years I have been chairman of the company, that we have ever had any very great difficulty, in dealing with those leases, in coming to satisfactory arrangements.
Furthermore, I must add that in addition to this large number of small royalty owners, with which we have to deal, we have also two royalty owners who own considerable royalties in the area we work. I should like to say that in our dealings with them our experience has been exactly the same as that of which Lord Gainford told us a short time ago—namely, that during the bad years of 1926 and later on we received from them every assistance, every consideration, and all the help it was possible to expect. I am bound to say that I should not care to bet that we should get that same amount of consideration from the proposed Coal Commission. I do not think so, and I base my view on this fact. In another place, during the Committee stage, the honourable member for North Leeds, Captain Osbert Peake, moved what I consider to have been a very 876 reasonable Amendment. It was the one dealing with the case where a colliery owned its own royalties, and he suggested, as I think very reasonably, that where the colliery company owned the royalty and paid for it nothing should happen, that it should be in plain language a "washout," the colliery company, of course, acknowledging the superiority of the Commission by paying a peppercorn rent. What could be more reasonable than that? But it was turned down.
In addition to that I should like to call the attention of the Government to the case where a colliery company has on its books a very unpleasant item called "Paid for, but not yet worked" That is a very serious item appearing in the balance sheets of many colliery companies. As I understand it (and it is a little difficult for a person of a non-legal mind to follow all the clauses of this Bill) the intention of this Bill is that the company should not go on paying these minimum rents, but that when they are cleared off then they should commence to pay a royalty to the Coal Commission. I do not consider that fair. I think that if the Coal Commission, or anybody, take over the whole of the property, as they are doing in this case, then they should take over all the liabilities. It is all very well to say, "We won't take anything from you until you commence to have overpayments," but all this time we may not begin to work the coal, which will give us the overpayments, for ten, fifteen or any number of years you like, and that, I think, is a hardship which should be remedied. I will not deal with the treatment of the royalty owners, because that has been dealt with over and over again. There is only one thing left out, which appeals to me as a Scotsman, and it is this. It has never yet been mentioned that royalties in Scotland, in addition to paying Income Tax, Surtax, 10 per cent. duty, and miners' welfare, also contribute to the rates in Scotland. In these days, when we are very nearly rated out of existence, we can hardly afford to lose a penny, and I hope later on attention will be called to this matter.
One more word about amalgamation. Everything in this Bill goes on assumption. Why should it be assumed for a single moment that because you amalgamate a lot of companies they will be more efficiently worked, that there will 877 be economies, and fewer accidents? On what do you base that expectation? We are never told these things. My feeling and my fear is that these large amalgamations will lead to and cause a great deal of trouble and I will tell your Lordships why. There is not the slightest doubt that one of the reasons why amalgamations are favoured by the Labour Party and the Socialist Party is that it is so very much easier to stir up trouble when you have a lot of men under one control. I would like, if I may, to give your Lordships a very clear example of this. Last year in South Yorkshire a large voluntary amalgamation took place. It all went like a wedding day, no one objecting, all friendly, everybody agreed. And, what is more to the point, several of the concerns amalgamated were first-rate. There was the Bullcroft, and there was the Brodsworth, the Hickleton and three other collieries. Now follow what happened. The ink is scarcely dry on the deed completing this combine when out breaks a strike—what they are pleased to call a "lightning strike"—at one of these collieries. I went into it. It was, I understand started by the boys, and I will say that the miners' leaders and the other men working in the collieries did their best to dissuade them, but it was of no avail. What happened? Instantly there broke out what is called a sympathetic strike, and I think I am right in saying that there was a five weeks' stoppage. It resulted in great loss of time and very serious financial loss. These people who organise these stoppages and strikes think that when you begin again you can start where you left off. Of course you cannot do such a thing. The strikes are very serious in these days when one wants all the capital one can lay one's hand on.
If I may revert to what I was saying, in what way will this Bill lead to greater efficiency? In the very admirable speech of the noble Earl who introduced the Bill there was one thing to which I objected. He wound up his remarks by saying, "You must reorganise, you must put your house in order." How can you reorganise when there is nothing to re organise? Why should you be told to put your house in order when it is not out of order? They will not tell us what is wrong. It seems to me to be a most extraordinary thing that here we are in 878 this country advocating large combines, big amalgamations, and over the water you have President Roosevelt attributing all the evils that country has undergone in the last few years to large combines and amalgamations, which he says are destructive of individual enterprise and free competition. I have been long enough in your Lordships' House to prognosticate that this Bill will receive assent, but I do hope that when it comes to the Committee stage the Government will not be averse from having Amendments made which in my opinion will make it a fairer and more workable measure.
LORD BALFOUR OF BURLEIGH
My Lords, you have had a long debate to-clay, and at this late hour I will do my very utmost to condense my remarks into the smallest possible compass. We have had a good deal of discussion as to whether this is confiscation or unification. Let it be simply called by the name of State purchase, which in fact is what it is; it is a vast scheme of State purchase of royalties. Now that can only be justified on two assumptions: first, that it is really necessary in the national interest; and, secondly, that the compensation, the price which is proposed to be paid, is fair. Neither of these assumptions is justified in the present instance. We have had dissertations from a number of noble Lords—from the noble and learned Lord on the Woolsack, from the noble Viscount, Lord Samuel, from the noble Lord, Lord Addison, and others—telling us of all the Committees and Commissions which recommend unification. By some odd coincidence they all forgot to tell us that in practical effect no difficulty is being experienced to-day. It is the fact that the Railway and Canal Commission, under the legislation which has been passed since all these Committees sat, have every single power that is required to bring coal into operation in the teeth of any recalcitrant owner. I believe the only power that Commission has not got is to interfere with existing leases. Existing leases are safeguarded under this Bill.
I would like to support what the noble Earl, Lord Lindsay, said. Another Scottish colliery owner said to me that he had not the faintest expectation of getting as favourable treatment from the Coal Commission in the future as he has had from the Scottish royalty owners in the past. He told me of the consideration which 879 had been extended to him in the depression, when fixed rents were voluntarily forgone, and he said that they had not the slightest difficulty about getting any concession in reason they wanted from their royalty owners. There is another very strong consideration which would weigh with me in favour of this measure, that is, if it would contribute in the remotest degree to the safety of the men who are actually getting the coal. There is no member of your Lordships' House who does not recognise that they are the front rank soldiers in this fight to win the coal from the bowels of the earth. Care and consideration for these men is not limited to noble Lords who sit on the Front Bench opposite; and indeed when the noble Earl, Lord Munster, was telling us why it was necessary to introduce this Bill he was driven back on asserting that it would have a beneficial psychological effect on the miners. What is the psychological effect? I will tell your Lordships. For years now mud has been thrown at the royalty owners, and an entirely fictitious case has been produced that the royalty owners are the scum of the earth and deserve no better fate than hanging, drawing and quartering. The Government seem to think that there may be some benefit to be got in meeting that feeling—which is entirely imaginary and fictitious. That is your psychological effect, if there is one. There is nothing else, for it is admitted that the actual amount in money of the royalty is not sufficient to make any difference to the miner, at all events for years and years to come, and nobody has yet suggested that it is going to make his admittedly dangerous work more safe or more comfortable.
The point I should like to examine so far as Part I is concerned is the compensation payable. We must all have been interested to hear the remarks of the noble Lord, Lord Addison. It was only too clear that he was delighted to have this highly respectable precedent brought in by this highly respectable Government; it would be very useful in the future. He noted it with interest, and he talked about the startling reductions which were being made. That is only an indication, a straw showing which way the wind is going to blow. In passing I should like to refer to Lord Addison's remarks about tacking. My noble friend Lord Hastings said that this was a blatant 880 example of tacking. That was disputed by Lord Addison and Lord Samuel. They said this cannot be tacking, because it is such an important part of this Bill. That only makes it worse. The more important the part and the more irrelevant the worse is the example of tacking. Parts II and III could perfectly well be brought in by themselves. The noble Earl, Lord Munster, said that the trouble of the coal trade was due to the production being in excess of demand, which is perfectly true. That will not be affected by the purchase of the royalties. Parts II and III are what are necessary to deal with that, and therefore if there ever was an example of tacking this is tacking, and the noble Lord, Lord Hastings, is more than justified.
I am going to pass very quickly over Parts II and III. All I want to say about Part III is that I doubt, myself, whether the interests of the consumer have been fully protected. Here is a monopoly. The coal trade have been given a monopoly, and I think it would be right that there should be an independent tribunal to decide whether a demanded increase in price or the maintenance of price at a time of falling prices is justified. The iron and steel trade have much less of a monopoly than the coal trade. There, there is an independent tribunal, but I am perhaps talking of things of which I do not know enough to justify the comparison. With regard to Part II, amalgamations, I will only say this. It does seem to me as a layman that the theoretical advantages of amalgamations are very apt to outweigh the practical. It may easily be that great trouble can be taken to bring about compulsory amalgamations which in theory might be beneficial, but from which in point of fact these practical advantages might not accrue. Probably the Bill is all right as it stands on that point, but there again I prefer not to say more.
It is on Part I that I wish really to draw your Lordships' attention to one or two points which I do not think have had the attention they deserve. I am going to work on the assumption that it is the intention of the Government to be fair. They have said it is, and I believe that is so. If that is so, I shall hope to get answers to the questions that I put, and I shall hope to find that they are willing to make some reasonable con- 881 cession. The noble Earl, Lord Munster, made use of a very remarkable phrase on the subject of fairness. He said this:The 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.That is all right, but I would like to know whether the noble Earl himself is satisfied that the basis is fair and equitable and whether other members of the Government are satisfied as reasonable men that it is fair and equitable. We have had arguments about the Greene tribunal and so on, but these I shall deal with later on. There may be no significance in that phrase used by the noble Earl at all, but it did strike me as being a remarkable phrase. I am not satisfied with the basis on which this measure is presented to your Lordships under pressure by a Government with a huge majority—apparently a docile majority—in another place, and I would have preferred a recommendation from a reasonable man and reasonable men that they themselves are satisfied that this is fully fair, fully reasonable, and what the royalty owners might expect.
I do think that insufficient attention has been directed to the global figure. All the noble Earl told us was that the global figure represented fifteen years' purchase, but the global figure I am interested in, in the first instance, is the £4,430,000. I would like to know how that global figure came to be admitted as a basis of discussion. The noble Earl said that 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. I have no reason to doubt the veracity of the noble Earl, but that is a most astonishing statement. Never before has property been acquired in that way, and I would like to be told more about that. If it is the fact that these representatives of the mineral owners themselves agreed that it was fair to take a global revenue, and multiply it by a number of years' purchase, I would like to know who these representatives were. I am a small royalty owner myself, and therefore I am personally interested, but I never heard of it. I know very few owners who did. I would like to hear 882 what the most reverend Primate has to say about that. He told us he was seized of the proposal to pay a number of years' purchase before the tribunal, but he did not say anything about the global revenue. Was he or were his representatives a party to this proposal to agree the global revenue? I should be surprised if they were. It suggests to me something very strange.
Under what pressure did these representatives of the mineral owners agree that it was fair to take that global figure? It suggests to me nothing so much as the evidence we saw given in those Russian trials, when eminent men came forward and admitted themselves guilty of the most extraordinary crimes. One wondered what pressure had been put on them in the background, whether it was rubber truncheons or what it was. I do not know whether rubber truncheons were applied to the mineral owners, but I cannot conceive any set of business men agreeing to have their property valued on that basis unless it was under duress of some kind or other. I shall be grateful if the Government will give us more information about that. Just suppose the Government applied that principle in their housing legislation. I have said some hard things in this House about slum property owners, but when the Government wanted to buy a slum area in which there were many different interests—freehold, leasehold, sub-leases, and other interests—I have never suggested that the whole of these interests in one area should be put into one pot, a global total taken, a number of years' purchase fixed, and then that the owners should be left to scramble for the proceeds. That is what is being done with coal. It seems to me a perfect analogy. Why? I would like an answer. I cannot see why that global figure should have been taken in the first instance.
Then I would like the Government to tell us how the global figure was arrived at. We understand that the gross royalties were taken, and that a deduction was made for mineral rights duty. I would like to know how much. Another deduction was made for the welfare levy. I would like to know how much. Another deduction was made for management. I would like to know how much deduction was made for management. What other deductions were made? There may 883 have been quite a lot. Without that information I do not see how members of your Lordships' House can be expected to judge whether this proposed compensation is really fair. The noble Viscount, Lord Samuel, seemed to indicate that the royalty owners had been very ill-advised not to take this compensation, when it would have been more, a few years ago. Of course, the diminution is due to the bad years which have followed, and I do not suppose there is a single royalty owner who would not be prepared to take the risk of a worse bargain in the future. We do not believe that our property is such a diminishing asset as we are told. We know cases of colliery after colliery with two or three hundred years' coal in sight. We are not afraid of getting less than fifteen years' purchase for that, and therefore that is another point on which I think the compensation is inadequate—fifteen years' purchase.
Great play has been made with the argument that Death Duties have been calculated on an average on a lower basis. Frankly I do not think the Death Duties argument is quite a fair one. Everyone knows that it has been a common convention that property is not valued for Death Duties at the highest possible figure which can be put on it. If it were, Death Duties would have been uncollectable. I think it is not quite fair to take the Death Duty analogy. Everybody knows there is a difference in price between a buyer and a seller. You have only to try and sell a motor car which you bought new two days before, or some furniture, to find out that there is a very big difference between a buying and selling price, and I think there is an element of that in this valuation of royalties. It is remarkable that we are told in this valuation that so much emphasis has got to be laid on the fact that coal is a wasting asset. It is quite a different story when we have to account for our incomes and have to pay Income Tax and Surtax. No question of that sort then arises. We have to pay the full rate as though it was an annual revenue. How can that be justifiable? One end or the other must be wrong.
I would like to refer to just one point about this freehold coal in the ownership of the collieries, because I would like to know how much was included for that in 884 the global figure of £4,430,000. I understand that certain collieries do account in their Income Tax for the royalties which are due on the freehold coal which they own themselves. The Inland Revenue see to that because a matter of taxation is involved. I understand that there is a tonnage output formula which has been agreed with the Inland Revenue. That is all right as far as the coal is concerned which is being worked, but it has never been suggested that anything is included for a fixed rent on the reserves of coal. Now if this freehold coal owned by the collieries is to be the subject of leases granted by the Commission as provided by the Bill, these leases are to be subject to the ordinary conditions under which such leases are given and presumably one of them will be a fixed rental. The noble Lord opposite will correct me if I am wrong. If, therefore, a fixed rent has to be paid, two consequences follow. One is that the Commission will be given a rent for something they have not paid for and the other is that if compensation is given for them that compensation has to come out of the £66,000,000. That was never before the Greene Committee. I would like to know what the answer to that is. I do not think it is escapable that the Government have something else to pay for which is not included in the £66,000,000.
Again I would like to emphasize the inadequacy of the compensation from the point of view of undeveloped coal. The noble Earl told us that fifteen years' purchase was an average for coal in full working. He said, I think, that some people might get more and some people might get less, according to the degree to which the coal was worked out. Then it would not be surprising if they averaged out. That, therefore, will be likely to mop up the whole of the fifteen years' purchase which is provided. That leaves the undeveloped coal wholly out of reckoning. Let me give your Lordships an example from my own case. I do not put it forward because I am anxious to secure the sympathy of your Lordships for my own case, but because I think the facts are interesting in this connection and they are facts which are familiar to me. The coal in question is very deep coal. It is only to-day that that deep coal is coming within the range of practical working. The seams are below what is called the millstone grit, a long way down and the whole trend of the 885 strata is downwards from east to west. I am talking of the valley of the River Forth; the coal rises again on the other side. For many years this coal has been worked in Fife on the east and in Stirling-shire on the west and south. It is a saucer shaped bed of coal. As science teaches the colliery owners how to do it they are able to work that coal at ever deepening levels. The fact that this coal has not been developed is no fault of the royalty owner.
My Socialist friends will no doubt say "You ought to have developed it before." But it was not possible to develop it before because for one thing the coal was not proved nor could it be worked at the depth. Now, as time goes on, ever deeper shafts are being sunk in progression from east to west. Had it not been for the uncertainty engendered by the Government's legislation I think I am entitled to say that a shaft would have been sunk to work my coal to-day. It has not been sunk because of the action of the Government in proposing this legislation and in injecting this uncertainty into the industry. I cannot see that there is anything left of the £66,000,000 with which to acquire that asset. The Government seem to think that no coal is of any value except the coal which is subject to a lease. That is a most extraordinary delusion. That coal has an enormous potential value; in fact it is the coal of the future; and that illustrates the absurdity of thinking that you can put a fair value on the coal which remains in the ground by having regard to the value of coal which has been taken out of the ground. The two things have nothing in the world to do with one another, and it is patent to your Lordships that if this compensation were to bear a relation to value it would be by the most extraordinary fluke in the history of the world. What the Government are buying is the coal which is in the ground and, therefore, it is all the more extraordinary that the people who are going to get most compensation are the people who have had the coal extracted and, therefore, have had the royalties. In many cases the people who own undeveloped coal, who own the coal of the future, have not had the royalties and, therefore, they are not going to get the compensation How can you say that that is a fair arrangement?
886 Finally, one other example of unfairness. There is to be a Central Valuation Board set up, and that Board is going to allocate this purchase price among the different coal regions of the country. We are not told how. Is it to be on a basis of tonnage output? It would be ridiculous if it were, because it is putting a dying area on a level with a coming area. That would be patently absurd. I would like to know on what basis the Central Valuation Board is going to allocate the global amounts of this compensation for the different regions. The amount having been allocated, there are to be Regional Valuation Boards which are going to ascertain the value of each individual owner's holding; then, as your Lordships know, there is to be a scaling down. It will be a scaling down all right. There is no question of a scaling up, and thus the owner is to get the proportion which the value of his section bears to the proportion of the purchase price. It follows, therefore, that precisely similar holdings, if you will postulate such a thing, in two different regions are quite obviously going to be paid a different compensation unless again by some extraordinary fluke all the circumstances correspond in the two areas. That is mighty unlikely.
These are a few of the patent unfairnesses of this compensation and in spite, if I may respectfully say so, of the soothing syrup which was poured over your Lordships' House by the noble Lord on the Woolsack at the beginning of this afternoon's sitting, I remain unrepentantly of the opinion that this measure will involve a large degree of confiscation. I have made quite clear to your Lordships that I am personally interested in this matter, and, arising out of what has been said on the question of interest both by the noble Lord on the Woolsack and the noble Lord, Lord Cromwell, I am bound to tell your Lordships that, although I personally feel at liberty to criticise the Bill and to do what I can by argument to secure its amendment, I should not feel justified myself in voting on the part which directly affects my financial interests. I need hardly say that in expressing that opinion I am speaking for myself alone. I have not the faintest desire to offer criticism of anybody else who takes a different view. It is a question which every one has to decide for himself. I think indirect concern in other 887 matters is too remote to matter, but this is a matter of direct concern and as such I think it is a little difficult to vote as judge of one's own interests. I mention that only because of references that have been already made.
In conclusion I only want to say that the Government have introduced this Bill as being likely to get rid of difficulties with which this industry is faced. They have not referred to the difficulties which are going to be caused by severance. The noble Lord, Lord Gainford, and other noble Lords, have said something about that, and at this late hour I will not detain your Lordships long, but the difficulties due to severance are going to be in my opinion—and I have lived in a coal mining area all my life—very much greater than any difficulties that will be solved by this Bill. Let me give one example. Suppose the Commission grant a new lease of some coal in a territory which has been already the subject of previous leases. The lessee may say "I will only take that coal on condition that I am not responsible for any damage caused by subsidence except that due to my own working." The Commission will be quite glad to grant a lease subject to that condition, and indeed the new lessee may very well be tempted to offer a larger royalty if he is freed from any liability except that caused by his own workings than if he had to accept liability for any damage that occurred. But think of the position of the unfortunate landlord of the surface, on one side, with the Commission and the mineral tenant both together on the opposite side against him, both out to prove that any subsidence was due to the workings of a previous lessee. That is only one example. It could be multiplied by hundreds. It is no use saying that other countries have this arrangement. It is one thing to start from the word "Go" with a system of law and to carry it through with all safeguards to its logical conclusion. It is quite another matter to swop horses in the middle of the stream by which obviously one gets the worst of both worlds. I venture to hope that even at this late stage the Government will realise that Part I is a misbegotten infant and that they will quietly drop it into the river.
My Lords, I am sure you will all agree with me that it 888 is a great pity that there is not a larger House to listen to the admirable and, I may add, devastating speech which we have just heard. I have none of that deplorable knowledge that comes from lifetime association with the industry. I can therefore take a completely detached view. But I have in common with all your Lordships a great interest in the welfare of the State, and it is on that side of the matter that I am going to speak to-night. I am not going to speak of royalties. I am not going to speak of amalgamations. I am going to speak about the Coal Commission and its powers and the effect of setting up this sort of body to control this sort of interest. I regret that the State should take upon itself the invidious and very difficult tasks which often accompany the fact of being a landlord and which in this particular case are enormously multiplied by that severance of property to which the noble Lord who has just sat down alluded. I venture to suggest to the noble and learned Lord, the Lord Chancellor, that the difficulties of a landlord's job are by no means so small in comparison to the difficulties of the colliery proprietor as he seemed to depict.
I think that if we examine the full implications of this Bill we shall see more and more that this Coal Commission will be faced with matters of an extremely ticklish nature. I am told—here I go back to my position as a citizen of the State—that the beauty of this Bill largely consists in the fact that the royalties are to be unified and not nationalised. In other words the State and the Government of the State will have this particular responsibility lifted from their shoulders. Does that bear examination? Who do we find under the Bill gives instructions to the Commission? The Board of Trade. What is the Board of Trade? It is a Department of State. It is answerable to Parliament. Who do we find appoints the members of the Commission? The Board of Trade, a Department of State. To whom do the Commission report? They report annually to the Board of Trade, and the Board of Trade lays their report before Parliament. How is it possible with provisions such as these, to pretend that the odium of being the landlord of this property is lifted from the shoulders of the State? I do not think that we need labour that point very particularly. But I would draw attention to one matter which 889 I think is likely to cause no end of trouble in the future. That is the special reservation to the Board of Trade of questions which affect the national interest. I venture to say that in years to come the application, and the attempt to extend the application, of this phrase will provide Parliament and the Government of the day with a great deal of trouble.
Be that as it may, and whether or not there is any real distinction between unification and nationalisation, there is no doubt that at the present time an increasing number of problems involving the economic conditions of large bodies of men and of large aggregations of wealth do present themselves to all Governments in all countries, especially the Governments who are Governments of industrialised countries. These problems do demand a solution and that no doubt is the justification for attempting the solution which is put forward in this Bill. The number of persons interested and the wealth invested and the wealth derived from this industry do lift these matters up to the level of real national concern. They may be partly due to the fiend of rationalisation, and partly due, I think, to the possession by the workers in those countries of the vote. Very naturally their first interest is in their own economic conditions. I think we must admit that there are these problems to be faced. We have passed through, until quite recently, a long period, a period I think of seventy years, during which a laissez faire philosophy has governed the relation of the State with its subjects. The result is both interesting and very natural. There is no body of experience built up within modern times, no body of legislation of the character of that with which we are now dealing. There is a want of precedents, and there has been very little long-distance consideration of the real problems which are now confronting us. In fact, I doubt whether there is a national policy in respect of this class of problem.
There is, of course, the Socialist remedy, riot very well represented in this House; but, as we all know, that policy is probably not believed in up to the limit even by its own advocates, and would inevitably lead to a general bankruptcy. We can therefore leave that aside and agree that there is at present no national policy on this class of ques 890 tion at all. But there is growing up slowly a national practice, and, in the ordinary English way, we shall find that the national practice gets deified into the national policy. That is just where the risk comes in. This Bill is an instance. It is desired by this Bill, as it has recently been desired in respect of other commodities, to erect some central authority which will unify and control to some extent, which will centralise and rationalise, the interests involved. There have recently been several interesting forerunners of this Bill. If your Lordships will turn to the Central Electricity Act and the Board which was set up under it in 1936, you will find that, just as in this Bill, a Commission is set up consisting of so many members and a Chairman, that it reports to the Board of Trade, that it is appointed by the Board of Trade, that it makes the usual annual report to Parliament, arid that it is not constituted—though I am not sure that this is said in the present Bill—of persons who have prior interests in the industry. Turn again to the Sugar Commission set up in 1936, and you will find almost precisely the same organisation set up. The same principle applies to the Cotton Spinning Industry Act, 1936, and is followed to a lesser extent by the Royal Charter granted to the British Broadcasting Corporation, and in the London Passenger Transport Act.
In effect, what is the nature of these bodies that are set up? I think we may agree, in the light of what we know of the short history of those other bodies which have already been set up and which have already reported to Parliament, that the very minimum of Parliamentary supervision is ensured; that in effect these bodies become practically autonomous bodies carrying out their own task without any real supervision from either the Minister or Parliament. They are, in fact, bodies satellite to the Departments of State, manned—let us put it quite plainly—by bureaucrats, "eminent persons," in the words of the Lord Chancellor, no doubt; and a very lucky people we are that we can still command such a number of disinterested and honourable men to fulfil those tasks. But their position is the position of a bureaucrat, and we are gradually extending, by the creation of these satellite bodies, a gigantic and, to a large extent, an irresponsible bureaucracy. We are giving—and this is a point 891 which I have never seen discussed before—these bodies power over sources of wealth on which the nation has to rely for its income, not only for the income of individuals, but also for the income of the State.
To illustrate my point, you will notice in Clause 1 (2) of this Bill that the Coal Commissionshall be a body corporate … with perpetual succession … and with power to hold land without licence in mortmain.It would have been better expressed if it had said "to hold land in mortmain without licence." That is what it comes to. The same identical words occur in the Electricity Act. Has any one given consideration to the importance of that power? Shades of Bracton, Littleton and Coke, and of the old Common Law doctrine against anything which militates against the freedom of alienation! Has the noble and learned Lord, the Lord Chancellor, given his attention to this, and has he considered why the Statute of Mortmain was first passed? As I understand it, it was first passed in order that the feudal fees which passed at death should accrue to the feudal barons and also to the King. In other words, it was a question of raising taxation. In so far as you leave land—and I may add, in cases like this, other wealth-producing assets—in mortmain, in the dead hand, so far you are depriving the State as well as the individual of the possibility of revenue. At any rate, the Coal Commission as contemplated will never die. It will therefore never pay Death Duty, and, as at the present moment the royalty owners must pay Death Duty on at least £5,000,000 or £6,000,000 every year, that source of revenue to the Chancellor of the Exchequer will disappear for ever. In fact, to quote the noble and learned Lord Chancellor again, one expropriation defeats the other expropriation. I may add that, in so far as the royalty owners suffer a diminution of their income—and I think no one denies that they will—both the Income Tax and the Surtax on their income will be diminished, and nobody else will pay it.
It would be useless to say all this were the practice which has grown up, of setting up these bureaucratic and satellite bodies, the only possible practice. It is not. Other countries, and especially more modern States, from whom, I hope, the 892 barrier of national prejudice will never prevent us from learning, have met this difficulty in quite different ways. They have seen that even a poor landlord, the object of so much abuse, has his uses. They have seen that an industry understands, that the component people in an industry understand, the wants and needs of that industry better in the long run than an outside, imported official is ever likely to understand it. They have recognised that at any rate the common interest in the flourishing of that industry will act as a powerful lever to pull the whole three interests together. In this particular case I can speak for the three interests: the landlord, the worker and the colliery company; and so far from sweeping away one limb of the structure they have deliberately encouraged the incorporation of all those three different items of industry in one corporate and active body. Now, my Lords, have we even considered whether that class of treatment is not more appropriate to the problem which I admit is raised by modern conditions? I do not think we have. We have simply slipped into what is the most facile and easy method, and one which I think in the long run is somewhat shortsighted.
My Lords, I do not wish to take up much of the time of the House at this hour, particularly having regard to the members of the House who I know wish to take part, and to those who have already taken part, who have greater knowledge than I have myself of this subject; but I do feel that those members of the House who, like myself, have personal connection with and interest in the question with which this Bill deals should attempt to define their attitude. As a royalty owner I was very interested to hear what the noble Lord on the Woolsack said, as to the hope that this industry would come under one honest and good owner, instead of being under many, when this Bill comes into operation. I very much hope he will admit that a few of the royalty owners are to some extent honest at the present time. Much has been said to-day on the question first of all of the necessity and desirability of Part I of this Bill. A great deal also has been said about the negotiations for the price that was to be paid, and the method by which the purchase price was arrived at. I can only say that I am not yet convinced 893 of the desirability or necessity of this purchase being accomplished, but I do feel that if it can be proved to the satisfaction of Parliament that it is a necessity, and can be done with consideration for the interests of all concerned, and with sufficient safeguards to protect as far as possible all the interests involved, it would be wrong for anyone personally interested in opposing the Bill to attempt to oppose it on that ground.
As to the award which was made, and the number of years' purchase to be paid, I think it is rather difficult to state that the royalty owners as a body are bound by an understanding which was made by the negotiating committee who were to represent them. I do not feel that there is in fact any useful or sensible purpose to be served in suggesting that the figures should be altered, but I do feel that the way in which the negotiations were conducted does leave, and should leave, every individual member of this House free to express his own opinion on what has taken place. I would hesitate to use the word "confiscation" or "expropriation." One must remember it was the result of a tribunal which was independently appointed, and I would rather say that in my opinion the royalty owners were unlucky to the extent that they have made a very bad bargain indeed. I do not think any one would be better off by attempting to deny that in fact the owners of this property are going to lose a considerable proportion of what they once had. I would rather admit that as a fact, and, having done so, I should expect that the owners of this property which is to be nationalised would take a reasonable attitude, and say that they were willing to accept this personal loss and this sacrifice, provided they were satisfied an improvement was going to be effected in the mining industry and other parts of the coal industry. That, I think, is the right attitude for the royalty owner to adopt.
I do not think that opposition to Part I, as presented to your Lordships, by anybody who is an owner of royalties, is a right course to take, but I think it is right and proper to ask your Lordships to consider closely and adopt certain Amendments, which will make the Bill both fairer and more equitable and much more easy to work. I think there is no doubt that if the affairs of the Commission are properly conducted they 894 will have a surplus every year, and it is quite natural that the late owners of the property should take a sentimental interest in the disposal of this surplus. Therefore I take the liberty of disagreeing with the noble Viscount, Lord Samuel, who said yesterday that he felt that the general taxpayer should have the benefit of any surplus. I entertain the diametrically opposite view, and I would say that the only justification for this particular bargain is that the money which is derived from it, when a surplus is available, should be devoted to the interests of the industry. The noble and learned Lord on the Woolsack said that the Government's intention was to help the industry, and that it was high time something was done for the coal industry. In this Bill something is being done, not at the expense of the Government but from a source derived from private ownership at present.
I should like to see Amendments inserted in that part of the Bill which deals with the finances of the Commission. I should like to see somewhere a definition of the loan which the Commission are to raise to finance their operations. It makes a very considerable difference whether they borrow for thirty years and pay it back, or whether they borrow for ninety years. It may make all the difference between a surplus being available and not available, and I take it that the direction as to the form of loan will be in the hands of the Treasury operating, of course, through the Board of Trade. I should like to see in the Bill some provision as to what the terms of the loan should be, and as to the application of the surplus which will result. It will, I think, be necessary to have some instruction or arrangement by which the terms of the loan would be long enough to result in a surplus, and I do not think that a loan of ninety years on the total coal of the country would be too long a period to justify. As to the provisions for a statutory reserve, and the minimum sum to be set aside for reserve every year, I think they could have been framed in a more direct way, so as to give much better help to the industry, which is the one underlying purpose of the Bill. I notice that none of the help which the Government propose to give is to come from Government sources. The Coal Commission are to pay taxes in the same way 895 as the coalowners are paying them. There will be no diminution of income accruing to the State from that source. There will be no diminution of Mineral Rights Duty, which was a duty put on some years ago as a kind of special duty on one particular kind of property. It would be rather odd for the Government to keep on a duty of 5 per cent. which was put on as a kind of discrimination against one kind of property when that particular form of property is in the ownership of a body controlled by the State.
One more aspect of the Bill which has been mentioned already is the future relationship between the surface and the coal underground. It has been said in the past that the coal trade has suffered because the workings underground have to be worked to fit in with the planning above ground. Is it not the case that in a very large number of cases they have been planned so as to work out together? Is it not a fact that an owner of the surface and of the coal will take every precaution he can, in his lease or arrangements with the colliery company, to see that the coal is developed in such a way as not to interfere with the surface and at the same time not to sterilise too large a quantity of valuable coal. I do not put that forward as a sufficient reason by any means against the severance of the surface and the mineral, but I do put it forward as a point which needs a great deal more consideration and more detailed provisions to deal with it than are embodied in this Bill.
There is no reference, for example, to any kind of concerted planning of development as between the surface and the mineral. There might be all sorts of provisions to ensure that land was not unnecessarily let down or spoilt which should have been for various purposes kept solid. Then another very difficult situation comes in when the Bill goes on to deal in the Second Schedule with coal which is not at present in lease. To my mind it produces a new kind of surface servitude, as it is called in the Bill, and I cannot help feeling that it will lead to a considerable amount of litigation and difficulty if it is not amended. Again in Clause 29 or 30, referring to statutory authorities or undertakings, special provisions are quite rightly made whereby local authorities, public utility companies 896 and so on, have a special process whereby they can get support and have coal sterilized on their property. Is there any reason why other people—large business enterprises, even individuals—who have property which, for one reason or another, either because of its value or even because of its national interest, should not be damaged, should not have the same protection? The reason why that is necessary with reference to coal which is at present unlet is of course the wording in part of the Second Schedule, where it says that the obligation on the Commission shall be to make good or to pay compensation. There are some things which it is impossible to make good, and there are other things which if made good in a temporary and makeshift sort of way would be spoilt and ruined.
I think this Bill in its present state is a bad Bill, but I think it is not impossible for it to be improved by Amendment. I do not offer these criticisms in an obstructive or over-critical spirit, but I think your Lordships will agree, after what has been said in this debate, that there are many members of this House who will be glad to see modifications and Amendments introduced which will make this into a workable Bill instead of, as it is at present, a piece of legislation which will lead to many pitfalls and much confusion.
My Lords, I desire to put forward a point of view which has not been dealt with, at any rate adequately, in this debate. I am very sorry to have to inflict a speech on your Lordships at this time of night but we ought not to have been placed in this position. I hope that the noble Lord, Lord Cromwell, the next time he addresses your Lordships on a subject on which he has so much knowledge, will have greater consideration for those fellow-Peers who also wish to put their point of view. First of all I should like to congratulate the noble Earl, Lord Munster, on the speech with which he opened this debate. I have not heard a speech in opening the Second Reading of a Bill in this House which, for clarity, lucidity and the information it contained, was more admirable. I stand before your Lordships not as one connected with a colliery nor as a royalty owner. I do not know whether the noble and learned Lord on the Woolsack will agree that I have 897 no bias when I say that I stand here as a consumer of coal—as a consumer of coal through manufacture, and a consumer of coal domestically. From that point of view I have attempted to examine this Bill and the principles contained in it.
Looking at Part I, I feel that the Government had no option but to proceed with the main object aimed at in that Part. Many Commissions have sat and there is no doubt that the country has become accustomed to the principle of the unification of royalties; and if the Government had not carried out that principle in this Bill they might have been very seriously assailed. But at the same time I would like to join with those noble Lords who have spoken in regard to the actual amount of compensation payable. I do not feel at all happy about that. It is true that the basis has been arbitrated, but any basis of compensation, whether arbitraged or not, which deprives owners of 50 per cent. of their income, however that may be calculated, seems to me inequitable, especially when that action is taken by Government and it is a case of force majeure.
I am chiefly concerned with the principle raised by that, and how it may affect transactions of a similar nature. As the noble Lord, Lord Phillimore, has said, we live in a rapidly changing age, and we see more and more Government control and interference in industry. Gradually all the big industries in one way or another are being brought under Government ægis, and when the Socialists some day come into power, as I suppose they will, we shall no doubt see a quicker advance in that direction. Land nationalisation, railway nationalisation, bank nationalisation, insurance nationalisation—we have beers threatened with all these, and if they get a chance they will take it. For that reason also I deplore any action of this Government which invades the principle of fair compensation in the case of private property which is expropriated by force of law. I sincerely hope that this principle is not going to be adopted in any other measures that this Government may feel constrained to bring forward of a similar nature before it dies a natural death.
I should like to have said more about that, but I shall pass on to the question 898 of compulsory amalgamation. Anyone who has had any business experience at all must know that to amalgamate compulsorily any businesses or concerns must lead in most cases, at any rate, to greater expense and greater difficulties. A mere increase in the size of a unit does not in itself necessarily mean economy. Amalgamations can only be in the national interest—I am talking about the amalgamation of coal pits—if they mean the lowering of the costs of production and a reduction in the price of coal. If none of these advantages are there, then amalgamation is not justified. If justified, then they should be on a voluntary basis, which is a more effective and more economical arrangement as a rule. I want to quote only one sentence from the speech made by the President of the Board of Trade on the Third Reading in another place, which I take from the OFFICIAL REPORT. Although he was responsible for this Bill and guided it through another place on the Third Reading, he went so far as to use these words:I would like to see these amalgamations voluntary amalgamations because, if they are voluntary, they start in a better atmosphere and with better prospects for the direction in future years.I hope that is the spirit that will guide the Government in the carrying out of that particular part of the measure when it become law.
Now I come to Part III, the selling schemes. I was a little surprised to hear my noble friend Lord Phillimore, in the course of his remarks, say that there were only three interests in this Bill—royalty owners, colliery owners, and colliery workers. I did not interrupt him because I knew I was going to speak very shortly after him, but I would like to remind my noble friend that the consumers' interests are in point of numbers equally as great as, if not greater than, the whole of these three interests put together. When I looked at this Part of the Bill, and when I listened to the noble Earl, I felt that while perhaps there were more safeguards inserted in the Bill during its passage through another place, these safeguards were possibly not everything that they seemed. They are certainly not everything they seem as far as the small consumers are concerned because the machinery is cumbersome. First of all we have the Coal Commission which will fix, as I understand, certain minimum 899 prices. I should like to have seen some machinery whereby maximum prices might be fixed at the same time. Then we have got the Investigation Committee and, thirdly, the Central Appeal Tribunal. How will it be possible, from the point of view of expense alone, for the small consumer or the small manufacturer to fight his case through all these tribunals? I can see many of the small consumers being left in the lurch unless something is done to give them a greater opportunity to put their case before these tribunals. It is perfectly true that consumers can combine for that purpose but there are many cases of small factories, small concerns and individuals who do not form part of a bigger unit and who would be forced to try and put their case individually.
The cost of coal affects our manufacturing costs very much indeed. Coal is very much the life-blood of our export trade. If coal is too dear we cannot produce at a cost to enable us to compete in foreign markets, and this applies not only to the cost of coal but to wages. The increased price of coal during the past fifteen years has made engineers study the efficient use of coal with vastly improved results—even as much as 100 per cent. greater efficiency per ton of coal. I am doubtful if this efficiency can be improved. To such a degree is this now the position that coal is at a disadvantage with oil, and any increase in price will naturally make this disadvantage greater. When we consider the industries dependent on coal for their life-blood, if I may use the phrase again, we know that the whole country in every direction is permeated by that necessity. Take railways alone. In the case of one railway which I know, something like 40,000 to 50,000 tons of coal per week are consumed. An increase of a shilling a ton means 40,000 to 50,000 shillings which, being translated into pounds, means £2,500 a week or £125,000 a year. That is the cost to that railway. You can go on and think of the gas industry, the cotton industry, and many other industries which use coal for motive and operating power, including the electrical industry which is using many thousands of tons of coal per annum.
I should like to give your Lordships figures as to how the electrical industry has been affected since 1934 when the coal 900 selling schemes came into operation. In 1934 the Central Electricity Board, under their coal clause agreement for the bulk supply to retail distributors, charged 16s. per ton. In 1938 that had risen to 21s., or an increase of 5s. a ton, equivalent to 33 per cent. on the cost of the coal, and, actually, the cost of the electric current bulk supply to the distributors had been increased by 23 per cent. All over the country there is a very insistent demand by retail consumers for a reduction in the price of electricity, and they are probably quite unaware that, whilst they are demanding these reductions, the price of bulk supply electrical current is rising all the time. This is making it impossible for the retail suppliers to meet the wishes of the consumers who desire a reduction.
I desire to warn the Government that it is absolutely necessary—if the noble Lord who is in charge of the Bill will listen to me—for the Government to look into the question of the increased cost of coal which may arise as a result of this Bill. The consumers in the country numerically are far more interested perhaps in this Bill than the other concerns, and unless there is some control by the Government behind these rather cumbrous arrangements and assurances which are contained in the Bill on this particular matter the consumers' interests are bound to suffer, and to suffer even more than they have done already. I am sorry to have kept your Lordships so long at this late hour but it is not my fault. Again, I would say that the matter with which I have dealt is very important, and I do wish to impress upon the Government that unless they have the full cooperation of all the interests which I have named, the object of the Bill which, as stated by the noble Earl, Lord Munster, at the end of his speech, is for the welfare of the country and everybody in it, will certainly not be carried out.
THE EARL OF LUCAN
My Lords, on behalf of my noble friend Lord Lothian I beg to move that this debate be now adjourned.
§ Moved, That the debate be now adjourned.—(The Earl of Lucan.)
§ On Question, Motion agreed to, and debate adjourned accordingly.
§ House adjourned at twenty-five minutes before nine o'clock.