§ House again in Committee (according to Order).
§ [The EARL OF ONSLOW in the Chair.]
§ Clause 6:
§ Compensation payable in respect of acquisition as a whole.
§ (4) The Central Valuation Board established under the Third Schedule to this Act shall prepare and deposit with the Board of Trade a map showing a division of the whole of Great Britain into regions (in this Act referred to as "valuation regions"), and shall allocate a part (in this Act referred to as a "regional allocation") of the said sum of sixty-six million, four hundred and fifty thousand pounds to each valuation region.
LORD HASTINGS moved to leave out subsection (3). The noble Lord said: I should like to make it clear to the House that this Amendment is the first of a short sequence of Amendments all of which stand or fall by the degree of acceptance which is accorded to the Amendment to which I am now speaking; and it has this convenience, that we are able to debate this Amendment without the further complications which sometimes ensue when an Amendment has to be selected as the one on which to divide. My Amendment is designed to exclude subsection (3) of Clause 6, which reads:
The aggregate amount of the compensation payable in respect of all principal coal hereditaments shall be the sum of sixty-six million, four hundred and fifty thousand pounds.
It will be obvious to the Committee that that challenges at once the principle of valuation, if such it can be called, which the Government have adopted and embodied in this Bill.
§ I would desire, if I may, at the outset to disabuse the mind of your Lordships of the contention that this Amendment seeks to derange the findings of the Greene Tribunal, or to question in any way either the method or the manner of that Tribunal's proceedings or the findings at which it arrived. I would also like to disabuse your minds of any suspicion that this seeks to impose a charge upon the public additional to that which has already been agreed in the Financial Resolution in another place. It does nothing of the kind. It does not question the findings of the Greene Tribunal; it does not seek to impose a charge upon the public; it does not conflict with Privilege inasmuch as the Coal Commission itself is a body which derives no profit or gain from the taxpayer, imposes no charge upon the taxpayer, and whose profits, if there be any, are not going to redound to the advantage of the taxpayer. The taxpayer does not come into this matter at all.463
§ During the Second Reading and again during the debate upon my Motion there was developed a very strong case against the principle of valuation, so-called, which has been put into this Bill by His Majesty's Government. There was expressed by very numerous speakers the opinion that valuation, as provided in Clause 7, was the form of valuation to which this country was accustomed, and that the principle of establishing first a sum to which the valuation would have to conform was not in itself in any way in accord with what is now the Common Law of the country, and was a new principle to which noble Lord after noble Lord took the gravest exception. In Clause 7 provision is made for a valuation unit by unit which shall eventually be made to relate to the regional allocation made by the Central Valuation Board, and it is of no interest to the Government whether the aggregation of the regional valuations accords with the sum allotted to that region or whether it does not. It is a valuation as between one owner and another, and not as between the owners of the property and the acquiring party. That, it will be admitted, is a new principle.
§ The Lord Chancellor and others have said that it is impossile to submit the State to unlimited liability. I have said, and I repeat, that if that is unfair and impossible it is equally unfair to say "This is the sum which we able to afford, and this is the sum you have to accept, and no matter what your valuations may be they have to be scaled to that particular sum." That is not compensation as we have hitherto understood it; it is compulsory acquisition at a previously fixed figure which shall not be exceeded, and it is, in effect, partial confiscation. This Amendment does not necessarily increase the amount of money which is to be received by the royalty owners, and in that connection I think it is only right and proper to call to the mind of the Committee the view which was taken by those professional representatives of the royalty owners who met the Government and negotiated the global figure. There are those, both among mineral owners themselves and among the professional advisers of the mineral owners, who are not averse from the principle of the global figure. Their reasons are various, and it is right to say that neither in mineral owning circles nor in professional circles is 464 there any unanimity on the subject, but it would be improper for me not to mention the fact that there are those who are not wholly averse from this particular method upon which the compensation is based. They are of course bitterly disappointed at the multiplier which was applied to the global figure of £4,430,000, but that is an entirely different matter from expressing dissent from the method of arriving at the global figure.
§ I approach the matter from a somewhat different angle from that of either the mineral owner or the professional adviser of the mineral owner. I look rather further perhaps than those who are considering the immediate consequences of this method of valuation. I hold that here we have a precedent established containing within it very grave risks to the owners of any kind of property whose property may be in the future required by the State. It would, up to date, have come as a very great shock to any property owner to be told—no matter what his property may be, whether in houses, land, coal, docks or tolls—that the value of the property is to be appraised, not upon its own value, but upon the value of his neighbour's property. That is the principle that this Bill seeks to establish. We have been given reasons why the Government have adopted this peculiar method, and I make bold to say that these reasons, as far as my own estimation is concerned, are wholly inadequate and do not meet the case.
§ Let us suppose for a moment that that party in the State which is anxious for a wholesale development of our motor roads were to succeed in inducing the Government to set up the system which in Germany is known as the Autobahn, and that it was decided to thread our country with this vast motor highway. How immensely convenient it would be to the Ministry of Transport, basing themselves upon the precedent of this Bill, to be able to have a figure fixed for them as to the value of the whole of the land which this great motor highway was to absorb and, having fixed that figure, to say to the owners of the innumerable properties along the whole length of that great motor highway that they must squabble between themselves for such share of the already-fixed compensation as was available. That is exactly the kind of thing which would follow from the establishment of this particular precedent.465
§ You are inviting, nay compelling, the owner of this particular kind of property to be dependent for his compensation upon the sum which has been allowed to his region, in respect of which it is quite impossible for him to know in advance how much or how little he will get, because, however good an estimation he may be able to secure of the value of his own property, he is quite unable to ascertain what is likely to be the value of his neighbour's property; and until the: value of all his neighbours' properties is put into the pool he cannot know how much he is going to get. From the standpoint of the owner of that particular kind of property, the unfairness of this proposal really requires no further demonstration. It inflicts upon him the gravest possible hardship, and where he is a person of small resources, whose resources are also charged to others, the hardship becomes one which is really greater than any citizen of this country ought to be required to bear.
§ But, as I have said, it does more than that. It establishes a precedent in contravention of what I would beg to assert is the Common Law. I am no lawyer, but it does not require the advice of a lawyer, still less the dictation of a lawyer, to enable any ordinary man to understand exactly how this particular matter is going to work out and what its implications are in relation to the law as it stands today. No authority, public or otherwise, has ever attempted previous to this to acquire, compulsorily, private property without negotiating with the owner, eventually perhaps submitting to arbitration, but at least negotiating with the owner as to the value which is to be paid for his property. I truly am not concerned with the view of the individual professionally concerned with royalties, or the view of the mineral owner who thinks that, bad as the terms are, he had better get out. I am looking at this matter from a wider standpoint altogether, as I have endeavoured to look at this Bill altogether, not from the standpoint of the royalty owner—in fact, not principally of the royalty owner—but from the standpoint of property owners as a whole, owners of all kinds of property. The Government are committed to a method of valuation which, however convenient it may be, is an improper method. Nothing that has been said, or can be 466 said, will convince me that it is other than an improper method of valuation.
§ In the course of this debate a good deal of criticism has been levelled at the representatives of the mineral owners who negotiated and accepted this particular form of valuation, if such it can be called, and it would not be inappropriate here to analyse to some extent exactly how that valuation was arrived at. Your Lordships will know that the Greene Tribunal did no more than apply, under the terms of reference which were given to them, a multiplier to the original global figure of £4,430,000. It is, therefore, much more easy for us, for the House and for the country, to analyse and criticise the original global figure to which the Greene Tribunal applied the multiplier than it is for us to enter into the realms of controversy upon the propriety or otherwise of the Greene Tribunal's findings.
§ The original global figure of £4,430,000 was arrived at, in the first instance, by taking the average of the net rents receivable by royalty owners over a period of seven years commencing with 1928 and terminating with 1934. I would like here to interpose this fact, that the owners of freehold coal—that is to say, colliery proprietors who have at one time or another acquired by purchase the coal which they are working—do not pay royalty rents obviously, and that the equivalent of their royalty rents was estimated, doubtless with such accuracy as they could ensure, by the Treasury for the purpose of inclusion inside that estimation of net rents. That was the figure supplied by the Treasury, no doubt through the intervention of the Inland Revenue—a figure which the royalty owners were unable to dispute because they had no facts at their command.
§ These revenues were estimated over a period of seven years, and I would like here to say that that period of seven years included three of the very worst years that have ever been known in the coal trade. They not only included years in which the royalty owner himself received a very small return by reason of the diminished output, but they included years during which many royalty owners had remitted even dead rents to their colliery tenants. Therefore, by their own action, the returns were diminished over that period of years. I have been at 467 some considerable pains to find out what a true average of years might have been, and I would like to inform the House that I have taken certain sets of figures over a period of thirty years which have quite clearly embodied or contained within them certain very bad years, including the three bad ones to which I have just referred. I have taken figures from 1908 to 1937 inclusive, and I find that those figures give an average net receipt of 12 per cent, more than the average of the seven years taken and included in this Bill. Twelve per cent, is a very large sum, and it gives some idea of the ill fortune suffered by the mineral owners when I point out that an average of those seven particular years was the one that was forced upon them for acceptance.
§ We began like that. There then followed the capitalization of the special charges upon mineral rents. Mineral Rights Duty was the first. I think I can hardly make any complaint about that because that is a statutory charge, almost in the nature of a Super Income Tax, and there is no term to its application, or, shall I say, infliction. That was capitalized and deducted from the whole of the gross of these average rents. But also there was deducted and capitalized the 1s. in the pound which is paid in respect of Miners' Welfare Duty. Miners' Welfare Duty is in a sense not a tax. It is a statutory charge, of course, but it has a term to it, and it is not really, I submit, a proper thing to have capitalized and deducted from these rents. But so it was done.
§ In addition to that, management was also capitalized and deducted, and the deduction made in respect of management was no less than £3,200,000. The £66,400,000 would have been £3,200,000 more if it had not been for this particular deduction. The majority of your Lordships are well acquainted with what is called a maintenance claim. It is no doubt equally familiar to your Lordships, as it is to me, that the costs of management are a proper deduction from tax, and that it is possible to claim from the Inland Revenue respecting expenditure in that regard. It is also common knowledge that mineral management does not as a rule run higher than 2 per cent, of gross receipts, but because a certain number of royalty owners, employing, I 468 would suggest, expensive firms of solicitors to act for them, were able to claim through the maintenance claim substantially more than 4 per cent, in respect of their management costs, all mineral owners have been subjected to deduction of 4.47 per cent, in respect of the management costs, although a very large number of them do not pay more than 2 per cent. That 4.47 per cent, was capitalized and realised £3,200,000. Mineral Rights Duty, Miners' Welfare Duty and management were all capitalized and deducted, and a seven-year average was taken, which included the three worst years royalty owners have ever known within living memory. So the figure of £4,430,000 was arrived at to which the Greene Tribunal applied a multiplier.
§ This figure of £4,430,000 has been claimed by many, speaking in this House and elsewhere, to have been agreed on their behalf by persons who had no agency powers, who were not competent—I do not mean in the sense of mentally competent, but not competent in the sense of their powers—to mike this arrangement; and, in respect of that, I do feel that having some inside knowledge of the matter I ought to make the mind of the House quite clear. In December, 1936, a general meeting of the members of the Mineral Owners' Association was held at which they were informed of what had hitherto been done by the negotiating Committee. Considerably previous to that date those particular negotiations had been completed. The global figure basis of £4,430,000 had not been agreed before this particular date. At that meeting the owners who are members of that Association were asked to give the necessary powers to their Executive Committee to enable them to go forward both with further negotiations and with what was then in mind, and approach their friends in both Houses of Parliament with the request that they would advise them how they were to deal with the impassewhich had been reached after negotiations with the Government on the capital figure to be paid.
§ It is therefore not open to any royalty owner, assuming always that he is a member of the Royalty Owners' Association, to say that he does not know, or he did not know, what was toward after December, 1936, but it is open to any royalty owner to say that he did not 469 know what had been done prior to December, 1936. Inasmuch as this global figure basis had not been agreed prior to that date, it is not improper to say that, with the exception of a very few royalty owners, none was acquainted with this particular method of valuation which was proposed, and which I say, in justice to those who proposed and agreed it, is still maintained by them to be the best method. I do not wish to be unfair to anybody, or to disguise anything whatever from the House. It is still maintained by the majority, not unanimously but by the majority, that that is the best basis of valuation. But it does not touch upon these wider issues which I have ventured to develop; that is to say, it departs from the practice now common to our law in the compulsory acquisition of property and establishes a precedent which I maintain is an exceedingly dangerous one to establish.
§ Therefore I am not particularly interested in whether or not a certain section of royalty owners think this is good or bad. I think it wholly bad for the reasons which I have ventured to adduce, and by my Amendment I am seeking to do certain things. My Amendment proposes to leave out the maximum figure which has been proposed by the Greene Tribunal and accepted by His Majesty's Government as the figure at which these properties are to be purchased. I wish to go forward and to establish Clause 7 of the Bill, under which owners' properties will be individually valued and also individually compensated at those values. There is no saying what might be the ultimate figure. I defy anybody even to make an estimate. It is quite true that the mineral owners have been expecting to receive a very much larger sum than the Greene Tribunal awarded to them. That is because they have recognised that their royalties represent a perpetuity, and I think it not unreasonable to expect that these royalty rents should be regarded as pari passu with other investments, and that they would be bought out at a figure which would compare with the figure which would be paid for the compulsory purchase of other forms of investment. But, nobody has the faintest idea what the true value of these properties may be.
§ We have had in the course of these debates the probable, possible, and unlikely values which may attach to un-leased coal. It is quite obvious that the 470 distance of time which a valuer would consider is likely to elapse before that coal not now in lease comes into work or does not come into work, is going quite properly to affect his estimation of the value of that particular kind of coal. There are various principles—secrets I might almost say—of the valuing community which are not commonly known and which might have application wholly dissimilar to that which some royalty owners expect. But that does not affect the principle in the least degree. The principle is that an individual who has something to sell is entitled to be paid for that, and ought not to be expected to take as his compensation something which is dependent upon the value given and attributed to his neighbour.
§ There develops from that another feature which I think on this particular occasion is worthy of some examination. You will find in subsection (4) of this clause a proposal that the Central Valuation Board shall allocate to regions each region's share of what has come to be known as the global sum. On what basis is the Central Valuation Board going to do that? It is a matter of really very great interest not only to mineral owners but to the Government. We would like to know on what basis this is going to be done, because at the moment the Central Valuation Board have nothing to go upon. The Central Valuation Board will be able to take out of the books of the Inland Revenue, I presume, the income, gross and net, receivable by the group of mineral owners in that region. At a time when, perhaps somewhat foolishly, we hoped that the Government might be willing to accept a true scheme of unification instead of a whole-hearted scheme of nationalisation, we were able to supply the Minister of Mines with a table of figures drawn up upon that basis. But that is no use to the Central Valuation Board, because they cannot know until after the valuations have been completed how much unleased coal there is in a particular area. They cannot know from an aggregation of rents how much the valuers are going to allot to individuals within the region. They have no conception whether North, East, North-East, North-West, South, West, South-East, South-West are going to absorb this, that or the other figure, because they have no means of knowing how 471 much reserved coal there is in those particular areas. They cannot know.
§ How on earth are the Central Valuation Board going fairly to allot between regions this global sum? We want to know. It is very urgent that we should know, because otherwise there is going to be hideous muddle and desperate injustice. Who is going to produce evidence before them? Although there is a much criticised Mineral Owners' Association, that is a national organisation. There is no association representing one region against another. There are not eight associations representing eight prospective regions. There is nobody who can appear in a corporate capacity before the Central Valuation Board and give any evidence whatever which will help them in their allocation. There is, so far as we are able to ascertain—I am not speaking merely from my own poor knowledge, but after having consulted experts—no proper way whereby the Central Valuation Board can make the regional allocation until after valuation. After valuation there will be no difficulty about it, but how on earth can they do it before? They cannot. The spirit may be willing, but the flesh will indeed be weak in this case. They will do their best, but whatever they do must be unjust to somebody because they have no means of estimating how the allocation should be made. I would like to hear from any member of the Government who considers himself sufficiently apprised of the facts of the case what kind of instructions are going to be issued to the Central Valuation Board, and how they are going to function, because at the moment they have no possibility of functioning. The thing is really absurd as it stands in the Bill, and however expert these men may be who are appointed to the Central Valuation Board, you are asking them to perform the impossible.
§ There is another point. Why exactly am I so anxious that we should get back to the valuation of individual properties, get back to the accepted principle which has hitherto prevailed, and get away from this, perhaps convenient but otherwise reprehensible, method of valuation by an estimation of net rents? I have given one reason, perhaps more than one reason, but I have another. I cannot myself see how the excessive hardships which this Bill is bound to impose upon a minority are 472 to be got over unless this particular Amendment is agreed to. I wish I could devise a better way, but I cannot. Upon more than one occasion—certainly on one occasion with some force—I have brought home to your Lordships' House the dreadful position in which mineral owners will be placed who will find, when the scaling down of their valuation has been completed, that the capital sum available to them will be entirely absorbed by mortgagees and chargees who have charges upon their estates. I have been asked, both in this House and outside it, if I have any knowledge of the numbers of persons who would be placed in that appalling category. I have none. I do not see how it would be possible to find out, because the only people who could give the information would be the Special Commissioners of Income Tax—those responsible for the collection of Surtax—and as the majority of those who would suffer are not Surtax payers, therefore they do not come within the purview of these Special Commissioners.
§ I know of no way of ascertaining the exact number of those who are going so to suffer, but I do know that their number is large because it is quite certain that all of them will not have written to me and the number of those who have written is infinitely larger than I would have expected and has reached a very terrifying figure. It is perfectly evident that there are going to be an appreciable number—I do not want to overstate the case, but certainly a large number—of persons who are going to find that when their compensation is paid over to them, that compensation is going to be almost entirely, and in some cases entirely, absorbed by these charges. The mortgagees will take the bulk of it, and if there is a family charge upon it, the trustees of that family charge will be entitled to take, and it will be their duty to take, what is necessary for investment to meet the annuity for which they are responsible. The mineral owner will be left with nothing.
§ This morning there appeared upon the Amendment Paper an Amendment in the names of the noble and learned Lord Chancellor and the noble Earl, Lord Stanhope, which purports to deal with one side of this case. There is a proposal there that the situation shall be alleviated as far as may be by a widen- 473 ing of the trusts of corporations and of the trustees of private individuals and enabling them to invest the trust money in a broader sense than the Trustees Acts now permits. All I can say to that is that it is really very good of His Majesty's Government, it is extremely courteous of His Majesty's Government, to allow other people's trustees to risk the money for which they are responsible. But I cannot think that much real gratitude is due on that account. After all, it is not their money the Government are saving. All that they are doing is to permit trustees to do something that may be not altogether in conformity with the best interests of the trust which they have under their control. I do not say that they would do it. But at any rate it is so trifling an alleviation of the damage which is going to be done as not to relieve the situation in any degree.
§ It is quite true that this Amendment, of a very highly technical character, only appeared upon the Paper this morning, and it would be unwise of me to say here and now, without legal advice, whether there is anything more in that Amendment. There may be. I can only say that, as a layman, it has been hidden from me up to date. If, when members of the Government reply to this Amendment, they have more to say upon the subject, nobody would be more delighted to listen to them and to acknowledge what efforts they have made than I. But, so far as I can see, no attempt has yet been put forward by His Majesty's Government to meet these cases. It is very largely because these particular cases have to be met that I have put down this Amendment on the Paper. I cannot for the life of me devise any other way of meeting them than to ensure that their properties are valued on their own merits and are not going to depend for their value or for the compensation paid for them upon the value of other people's property. If a man receives for his property the value which is attributed to it by a competent person, he may complain bitterly of being expropriated, but he has no real and lasting grievance. No man can expect to receive more than the value of his property. The principle of expropriation is a political one. It is a different subject altogether; we have debated it and I will say no more about it.
§ But this matter which I am now debating is not a political issue at all. It 474 has nothing whatever to do with that. The man will have no grievance if his property is paid for on valuation by competent persons, but if it is taken away on the basis of the Government valuation, what happens? Now, my Lords, I am going to say something I would much rather not say, but from that side of the House, the side to which I belong— because I am only on this side for convenience and not in perpetuity—
§ LORD HASTINGS
—because it is convenient to see the faces of His Majesty's Government rather than their necks. What are these people going to say? They are going, in large or small numbers, to be put into the Bankruptcy Court. The noble Earl, the Leader of the House, told us yesterday that we must remember the unpopularity of our cause, and that it would not do to offend either the proletariat or the members of another House. But I ask him, can he, as the Leader of the Government in this House, afford to offend large numbers of the Government's own supporters? It is a question that requires balancing—not answering, but balancing. That is what is going to happen. Every individual who is driven into penury by this action is going to be a lifelong enemy o£ His Majesty's Government—and His Majesty's Government will deserve it. Apart from the iniquity of the proposal, the impropriety of such a thing being done, I cannot understand how members of the Government, with a tradition to put it no higher, of respectability—but whose tradition is of course vastly higher than that, who stand high in the estimation of their fellow-men—can lend themselves to this dirty little trick. That is what it is. You are going to impoverish men for no fault of theirs because you have not been able to devise words in your Bill to let them out of an impossible situation.
My capacity is very limited, and I do not know how to meet the position other than by putting down an Amendment of this character, which I have done. One of the prime motives which I had for putting down this Amendment is to avoid the ghastly hardships which this Bill will inflict upon a minority. I shall be very glad indeed to hear how the Government propose to deal with this matter, because 475 it is vital. You cannot, in this Committee, inflict this hardship with equanimity of mind or of purpose. Somehow or other means have got to be found of letting these people out, and I have suggested this way. Can we, on the basis of a shibboleth, merely that the findings of the Greene Tribunal, whose names were Media, Persia and the other, are incontrovertible, sacrifice these people? I think not. I do not want to challenge the findings of the Greene Tribunal. I know it would be useless, and I cannot. But I can challenge the basis of valuation to which they applied their multiplier; and I do, because it is the basis of valuation to which they applied their multiplier which is at the bottom of all this trouble. It is a rotten system, a system which this Committee ought to discard. No matter what mineral royalty owners or what the professional advisers of mineral royalty owners think in the matter, I think, and the Committee will think, that we ought to revert to what has been the common practice hitherto and demolish the possibility of all these hardships accruing, as they must accrue.
I apologise to the Committee. This is a very difficult subject to deal with. I find that I have very nearly made a Second Reading speech again on this subject, but I have, mercifully, nothing more to say. I have pressed the point as far as I can press it, and I beg to move the Amendment which stands in my name, and to assure the Committee that the remaining Amendments which stand in my name are merely a short sequence following the one which I move now, and that they stand or fall together.
Page 7, line 1, leave out subsection (3).—(Lord Hastings.)
§ THE EARL OF DUDLEY
This Amendment is, as your Lordships will realise, one of great weight and importance, and the noble Lord who has just moved it has covered it, necessarily and quite rightly in my opinion, very thoroughly. It seeks, as your Lordships will have gathered, to pay the compensation to the royalty owners by means of machinery which the Government have themselves set up in the Bill: that of the Central Valuation Board and the Regional Valuation Board, and not tying them down to 476 the global figure of £66,500,000, which we maintain has been arrived at in an illogical way and, indeed, in an unfair way. I, with the noble Lord, do not seek to question this global figure. It is, of course, impossible for us to say at this stage whether it is too large or too small, and we have never questioned it, as I told your Lordships yesterday. That will be shown by the Regional Valuation Boards. But I must support this Amendment, not only for all the reasons which the noble Lord who has moved it has just covered in such an able, lucid and fair way, but also for one or two other reasons as well, which I should like to point out at this stage.
To begin with, I cannot assent to, nor indeed can I follow—I am sure it is on account of my stupidity—this "non-marketable" argument of the Government. We say, although we do not question the size of the Greene Committee's award, that it has been arrived at in an unfair way, that the undeveloped coal and the freehold coal have not been properly assessed. Now the Government say that the undeveloped coal has no value because it is not immediately marketable. I cannot follow the argument that because a commodity is not immediately marketable, or may not be marketable for fifteen years, it therefore has no value, because we know quite well that in thousands and thousands of other transactions that is not so. Take land on the edge of an important town, which will obviously develop in the future. Such land, of course, has a larger value than a mere agricultural value, as your Lordships well know. It may be that that land will not be ripe for development for more than fifteen years, but as between a willing vendor and a willing purchaser that land has a greater value than an agricultural value.
It is exactly the same thing with these minerals, and I want to remind your Lordships of the principle in this Bill in Clause 7. Subsection (4) of that clause states the fundamental instruction to the Regional Valuation Boards as follows:The value of a holding shall be taken to be the amount which the holding might have been expected to realise if this Act had not been passed and the holding had been sold on the valuation date in the open market by the existing owners thereof, selling as willing vendors to a willing purchaser.…So, quite rightly, the Government have laid down that it shall be a good-will 477 transaction. That is all we are asking for. Your Lordships know quite well that in all your sundry transactions in land, if you buy land that has coal underneath it, you have to pay for the value of that coal. It may not be very much, because the probable development of that coal may be so far ahead that the value is small, but you have to pay for it just the same, and that value, with the assistance of expert valuers and plans, is quite easy to assess, as it will be found when the Regional Boards get to work, and as between a willing vendor and a willing purchaser a fair and reasonable valuation agreeable to both parties is placed upon that land. But it has to be paid for. It may be that the vendor's idea of value is greater than that of the purchaser. That often happens, and the deal falls through, unless they can arrive at an agreement, but they both recognise that the coal has a value. There are thousands of persons in this country who every year buy a piece of freehold land on which to build a house, and in order to secure the foundations of that house they very wisely seek to purchase the minerals underneath it, if there be any. It may be years before those minerals are developed, but they have to pay for those minerals. They always have to pay for the value of those minerals, and they never complain. It is the recognised law of the land, and I cannot understand why the Government should seek, as the noble Lord says, quite a new principle in this respect.
I would like to give a parallel example that I have experience of, in respect of another mineral with which your Lordships will be equally familiar with myself—namely, ironstone. For the past twenty-five years I, and my father before me, have been buying up various ironstone properties, now united as one large property at a very famous spot in England, Edge Hill in Warwickshire. We have done that to secure a future reserve supply of that essential raw material for the steel works which I control. That stone is quite undeveloped. It has never been worked, and it may be that it will not be worked for some years to come; but it has an enormous value. It is the last remaining undeveloped ironstone field in Great Britain, and in all the transactions that have taken place when I and my father have bought these various parcels of land, we have always had to pay for the value of that ironstone, 478 although it was obvious that a great many years would elapse before it was worked. It would surely be extremely unfair if the Government were to expropriate that mineral from me at a purely agricultural value, which they might quite well do under the principle embodied in this Bill. It is an exactly parallel case. I do not want to labour it any longer, but I want to assure the Lord Chancellor—it may simply be my own stupidity—that I cannot comprehend his "non-marketable" argument. We should clear it up, because it is an essential issue on this Bill.
There is another point, and a further reason why I support the argument of my noble friend. It is in respect of the multiple employed by the Greene Committee in arriving at the value of the leases, apart from undeveloped coal, which is not brought into consideration. They have used a multiple on the average leases of seven very lean years in the coal trade. I raised the point on a previous Amendment, but I got no reply, and so I want to take up your time in order to get an explanation from the Lord Chancellor. The Greene Committee, I understand, applied the 7 per cent, table as a multiple for those leases, because they regarded these coal royalties as a 7 per cent, risk, which is a value taken by the Inland Revenue authorities for a considerable number of years in respect of Death Duties, and they so regarded them at a time when gilt-edged securities gave a yield of 5 per cent., at a time when money was much dearer I understand. I do not believe the Lord Chancellor will argue with me that they have never varied that 7 per cent, table, even when gilt-edged securities dropped lower than 5 per cent., because they took the view that money would again become dearer and that gilt-edged securities would return to 5 per cent.
Actually, at the time the arbitration took place gilt-edged securities averaged slightly below 3½ per cent., and so I submit that it was very inequitable to apply the 7 per cent, table, and indeed at the present moment, as I explained the other day, the average yield of colliery debentures, which rank after royalties, because royalties have to be paid before debentures, stands at 5 per cent. Therefore it is still more inequitable to regard coal royalties as a 7 per cent. risk, when the debentures, which rank behind them, averaged a 5 per cent. 479 risk. Therefore it seems to me very inequitable that the 7 per cent, table, which gives you about fifteen years' purchase, should have been applied by the Greene Committee. I do hope that the Lord Chancellor will deal with that point. For these reasons, as well as for the many reasons of inequity which the noble Lord has so ably given, I shall support this Amendment.
§ LORD CROMWELL
I will try if possible not to go over the whole ground again or to repeat what has been said on the three separate occasions when this subject has been discussed. But I do think your Lordships have a right to know from the Government whether they intend to treat this House and this debate seriously or not. Whenever any of your Lordships suggest any change in the Bill there are only two replies that we receive. One is that the Government stand by the Tribunal, and the second is that, in any case, if an Amendment of this nature is made in this House it will not be accepted in the other. Well, that argument leaves me cold. If it is fair, let us put it in, and if it is fair another place will accept it. If another place does not think it is fair and re-inserts the words, then surely fairness established in this House is more important than a clash between the two Houses. I would be the last to make any speech in a die-hard spirit. Times have obviously changed, and there have been occasions, I think, in this House when points have been insisted upon which proved to be unreasonable. But provided we can develop a reasonable argument to show that what we are asking is fair, I do not think it is right for the Government to say, "We cannot accept it because it will not be accepted in another place." I have heard it stated by members who have been in your Lordships' House for many years, that in the past—and not in the distant past, but quite a short time ago—when a Bill had been introduced into your Lordships' House which practically every speaker condemned from start to finish, the Government would have withdrawn it.
The noble Lord, Lord Hastings, put down a Motion which he afterwards withdrew, and the principal reason he gave for doing so was that on the principle of compulsory purchase he did not think 480 he had the House with him. But one of the reasons he gave was that the Government made an appeal to him not to press the Motion then, and every Amendment which was put down during this stage would have fair consideration. When the Amendment of the noble Lord, Lord Balfour of Burleigh, was passed last night, and passed by a considerable majority, it simplified the Bill in large measure, and there will be redundant machinery clauses which can now be done away with altogether, such as the clauses for making advance payments before the actual values are known; and all the very complicated machinery involved, which is not fully covered now—I think it is admitted by the Government—will not be necessary in the Bill at all. As soon as the valuations are complete, the vesting date will come into operation, the property will pass, and payment for it will be made. I venture to suggest that this very subsection which my noble friend Lord Hastings wishes to delete— in my view quite rightly—is one of those redundant passages in the Bill which are now no longer necessary. Until that Amendment was passed last night it was necessary, or else the whole framework of the Bill would have had to be altered. But now this subsection can be left out, and the whole of the valuation is covered under the next clause. There can, therefore, be no harm in leaving it out and it is only fair and right so to do.
Do the Government, in fact, want to give a fair price? They have said so on numerous occasions, and I must believe them. We must act on that assumption; but turn to a passage in the speech of the noble Earl, the Leader of the House, last night and you will find these words. The point arose out of this very question as to whether the price could be fixed on the individual valuations. The noble Earl said:A further thing would of course happen. The Government would be quite unable to say how much capital would have to be found for the purchase of this property. Until the whole of that valuation was completed about the vesting date four years hence, we should not know whether we were to find £55,000,000 or £66,000,000, or £106,000,000, or whatever the figure might be,"—and please take special note of this—and, obviously, the Government could not be permitted to buy coal at an unknown price.481 The Government say they are going to buy it; they say they are willing to give a fair price; then why should not that price be unknown until it is valued? By Clause 7 you put it in the hands of perfectly competent people to value. Therefore will not they accept a valuation which can only be fair?
I will pass to another angle of this subject. It has already been referred to by the noble Earl, Lord Dudley, who stressed the point of a willing buyer and a willing seller. That is the whole point of difference between the Government and ourselves. It is true we are not willing sellers, we do not want to sell, but the Government apparently intend to buy. Well, following that out to its logical conclusion, if you have someone who wants to buy and someone who is unwilling to sell, then, if he is obliged to sell, the owner gets not only the value of the property but compensation added on top of it for having to sell. We are not asking for that, because we are treated in this Bill as a willing seller. We make no complaint of that, but we do complain that the Government will not be a willing purchaser at a fair price.
There is another matter to which I should like to refer in illustration of what I am about to say. I have already stated this, and have challenged the Government to deny it, and have had no answer. I state most emphatically from my personal knowledge that the terms of reference of the Greene Tribunal, and the Tribunal itself, were accepted by the Mineral Owners' Association under duress, and third degree methods were used to get them to accept. The noble Earl, Lord Munster, says that is quite wrong. I accept that statement, but I should like it to be amplified by some argument to prove that I am wrong. When we were young, one said "It is," and the other said "It is not," but as one grows up, if one is flatly contradicted, one has the right to know in what way one is wrong.
If I may be allowed, I should like to refer to a passage in the speech made by the noble Viscount, Lord Home, during the Second Reading debate. It referred in particular to the Tribunal and to the Government not being bound by the award while the royalty owners were so bound. Lord Home said:Following Lord Gainford, I think it was quite unfair to choose these lean years of the 482 coal trade as the basis upon which the amount to which the royalty owners were entitled was to be calculated.And he went on to say, and I should like to emphasize these words:It was also mean of the Government to put forward as a condition of arbitration that the royalty owners should be bound while the Government were still free. That is a condition which I am perfectly certain would never be put forward by any reputable business man in this country in any negotiations into which he was entering.Those are not my words. They are the words of the noble Viscount who sits on the other side of the House for the time being—whether in perpetuity or for fifteen years I do not know—but he used them in all seriousness, and they must have great weight with your Lordships.
I have practically finished. I am afraid that, like Lord Hastings's, mine has been almost a Second Reading speech again, but I feel so strongly on this matter, and I do not often venture to address your Lordships, that when, as I said before, I think I know a little about the subject and can make some useful contribution, I hope your Lordships will bear with me a few moments longer. I state quite categorically that it is within my information that the members who were trying to negotiate for the royalty owners were told that if they did not agree to an amount which was far below the amount indicated by the Samuel Commission, the negotiations were at an end—that was on the Tuesday—and on the Thursday before Parliament rose a Bill would be placed on the Table which would have that amount in it; and on that, and on that alone, they were driven to accept going to the Tribunal. It is true to say that those unfortunate royalty owners who were represented are in a sense bound by that award, but it is not true to say that those royalty owners who were not represented are bound at all, as has been driven home time and again by the noble Earl, Lord Dudley. It is even more untrue to say that any member of your Lordships' House is so bound, and that of course includes members of the Government. I am confident that the noble Lord, Lord Hastings, will press this matter, and I should be very glad indeed to follow him into the Lobby.
THE EARL OF RADNOR
It is with considerable diffidence that I intervene at all because I have no knowledge of 483 the coal industry, nor have I any interest in it whatever. But there are two points on which I feel I would like a little enlightenment from those who are supporting this Amendment. Last night in the course of the debate my noble friend Lord Hastings mentioned that the accredited valuers who were negotiating with the Government over the global figure anticipated they would get something like thirty years' purchase of the value of the holding for which they were negotiating. That is a considerable figure. The noble Earl, Lord Dudley, argued at some length to-day that, because royalties stood before the debentures, therefore they should not have been valued on a 7 per cent, basis, but on a much higher basis. The figure chosen by the Greene Tribunal was fifteen years' purchase.
I have experience in property, but not in coal property. My experience is in landed property, particularly agricultural property. Coal is a wasting asset. The surface of the land is not a wasting asset. Coal may have a life of thirty, fifty, or one hundred years, but it is a wasting asset; but even five hundred years hence, we presume, unless there has been some cataclysm, the surface of the land will still be there. So far as my knowledge goes, the ordinary value of agricultural land, which is not a wasting asset, is only twenty years' purchase as a general rule, and fifteen years' purchase for a wasting asset like coal seems to me quite fair in relation to the value of the surface. From there I go back to Lord Hastings's figure of thirty years' purchase, and suggest to him that even such things as well-secured ground rents, with very often reversionary value, hardly ever bring as much as thirty years' purchase. The surface of the land is strictly comparable to coal royalties in that the rent is payable before any other payments are made.
That is one point to which I should like to draw your Lordships' attention, and see whether there is any answer from the other side. The other point concerns this ungotten coal, about which a great deal has been said. Here I speak with considerable diffidence because I do not know a great deal about the subject. We have had such a spate of words in these days over coal in this House that 484 the uninstructed like myself are beginning to wonder where we stand at all in the matter. The argument of the Government is that the value must only be based upon marketability. I think that is probably sound. A figure has been arrived at, and I am not going to argue whether that figure is the right one or not; but taking the Government view that the value can be based only on marketability, surely the value of the ungotten coal is included in the price to be paid for the whole of the coal of the country? It must be included, because that ungotten coal cannot be marketed until either there is a very great increase in the demand for coal or until other mines have gone out of production and there is room in the market for the ungotten coal. Surely that must be so. Surely the value of the ungotten coal is already included in the figure arrived at as the value of the whole coal in the country?
§ THE EARL OF DUDLEY
The only coal that has been taken into account is the coal that will be mined during the next fifteen years. The coal we are talking about is the coal of the future.
THE EARL OF RADNOR
I do not know enough of the details. I am asking a question as much as anything else. But that is the impression I got, and I feel that when the time comes for the money that is going to be paid for the whole of the coal of the country to be distributed, the value of the ungotten coal will not be excluded from that distribution. Those are two points which have occurred to me as an ignorant person but one with a certain amount of experience of property in other directions, and I should very much hope in the course of the debate that we shall have them answered.
§ THE LORD CHANCELLOR (LORD MAUGHAM)
I should first like, if I may, to say that I always listen to my noble friend Lord Hastings with the greatest pleasure, even when I am being myself attacked, because nobody can state a case better or use more admirable rhetoric even if, occasionally, he seasons it with a little invective. But the Amendment which we are now called upon to discuss is one which, if passed, requires the House to delete from the Bill a clause which alone fixes as the vital standpoint from which the Bill proceeds what we 485 have called till we are all tired of hearing it, the global figure. If you leave that out of the Bill, the Bill is gone so far as the Government are concerned and so far as the House is concerned. Therefore it is that, much as I admire the speech which I have referred to, I cannot understand how Lord Hastings was able to say that he was not attacking the Greene Committee or the figure of £66,450,000. You do attack a tribunal if you say that their decision is to be wiped out, and you do attack a figure if you pass across it a lead pencil or some similar deleting thing and make it nothing.
What does the Amendment mean? I do not in the least resent the fact that we have had from Lord Hastings a species of Second Reading speech repeated for a third time, but I have taken up your Lordships' time too much to think myself justified in repeating what I have said to the best of my ability in two Second Reading speeches, and I do not think your Lordships would expect me to say again what I have said. But may I, as a matter of courtesy to people for whose opinions I have a gnat regard, just say a few things in reference to what I consider to be the most important points which have been once more raised before your Lordships.
Now I think something ought to be said, because so far as I know it has not yet been said, in explanation of Clause 6, subsection (4), where the Central Valuation Board established under the Third Schedule is required to allocate a part, in this Act referred to as a regional allocation, of the global sum to each valuation region. Lord Hastings has asked with his usual point how are they to do it, and he has questioned the possibility of their doing it. It is the fact that the Bill in this respect is elliptical in the sense that it does not say that the tribunal of valuation called the Central Valuation Board should act fairly and like reasonable men, and are to exercise the whole of the powers, mental and others, which they possess in fairly fixing this proportion, which is called the regional allocation, of that sum. But if you look at the Third Schedule where you see what sort of tribunal this is, you will see that it consists not only—which is perhaps not important—of a member of the legal profession—let me forget that—but of two independent persons, and—this is the 486 part to which I wish to draw the attention of the noble Lord—"in respect of each valuation region one person who is at the date of his appointment engaged in the management of mineral estates in that region and who has a knowledge of coal mining and experience in the valuation of minerals." If you want to put in this subsection which I am dealing with the fact that these gentlemen are expected to exercise their knowledge and their powers, and that they are to act, each one, in favour so to speak of the region which he represents so as to put their case before the Central Valuation Board and to get a fair allocation of the sum; well you can put that in and nobody will be a penny the worse, but I venture to think they will be none the better, because it is obviously implied.
That is the first thing I want to say in answer to Lord Hastings. And may I add this? It was not the Government who invented or who alone thought that this was a reasonable way of dealing with the matter. I have here in my hand a document called The Ownership of Coal Royalties, bought by the Leader of the House on a public bookstall.
§ THE LORD CHANCELLOR
Well I have seen it on a great number of bookstalls and I myself have not up to the present bought one. It has a foreword by Lord Hastings, and in this document it appears that there is an appendix dated February 4, 1936, headed "State Acquisition of Coal Royalties. Copy Memorandum submitted to the Secretary for Mines by the Executive Committee of the Mineral Owners' Joint Committee." Now once more let me say, because I hate misconception, that it does not bind everybody. Of course it does not, but it is relevant to the point I am making, that this method of valuation is not an unfair one and was not invented by the Government at all. Now let us see what it says. You find that on page 49 there is this under the heading "The Process of Valuation":Although the valuation of every individual property is a laborious undertaking, it is comparatively easy to determine the value of coal royalties treated as a whole.I did not know that was in this book when I addressed this House before, and when 487 I pointed out that the valuation of coal royalties as a whole was a comparatively easy job—not very easy, I agree, but a comparatively easy job compared with the job of ascertaining the individual values of all the properties belonging to mineral owners.
§ THE LORD CHANCELLOR
The value, it says here, of coal royalties. Let me go on:Moreover, it seems probable to us that the Government would welcome a scheme which would make it possible for the total compensation to be fixed by the Act instead of asking the Legislature to commit itself to an uncertain liability. We therefore submit proposals on that basis.Well, my Lords, I should have thought that was the most reasonable observation you can conceive and I should have thought that nobody could complain of the Government saying, "You are quite right, we welcome a scheme which will make it possible for the total compensation to be fixed by the Act." Then the proposals go on. They give the value of the royalties and, naturally enough, they give reasons why in their view a high multiplying figure of the average royalties obtained during a series of years should be used as a multiplier of that average for the purpose of ascertaining the global figure. That is precisely the basis which the Government adopted and precisely the basis on which the Greene Tribunal acted. It is perfectly true, as my noble friend says, that in this document the word "royalty" is used and not the larger words which are used in the special terms which have already been read to your Lordships as the terms on which the Greene Tribunal were to work.
If you look at page 48 you will find:We therefore suggest that the property and rights to be acquired by the Crown should include, but should be limited to, the following:—That was the basis on which the value of the royalties was set out in this document and reasons were given for a high multiplier in order to ascertain not the value, as my noble friend thought, of the coal royalties alone, but the value of 488 the coal in this country. Having said that that was the basis on which it was to be done, there was a provision for apportionment for each coalfield. That is to be found on page 51.
- (a) All coal and all other minerals worked or to be worked with coal whether such coal is leased or unleased; proved or unproved."We suggest that the first and immediate duty of the Commissioners should be to appoint:—and a barrister, to be appointed, it is suggested, by me in this country, who should be chairman.
- (a) a District Panel of Assessors for each coalfield or district area (as defined by the Commissioners) composed of persons having a knowledge of coal mining and now engaged in the management of mineral estates in that coalfield together with the mineral valuer of the Inland Revenue Valuation Department—"
That is exactly—I do not hesitate to say exactly—the principle on which the Government acted on this Bill and the principle which has been attacked by your Lordships, in perfect good faith, as being unfair, unjust, a departure from Common Law, something which no Government worthy of the name ought to put before such a House as this. I cannot understand how, having regard to the facts I have mentioned, there can be any good reason for saying that the Government have acted in this matter improperly or unfairly. I quite agree that those who are not bound by the Committee I have mentioned are entitled to say that the Committee were fools, that they did not know what they were talking about, that they owned 75 per cent, of the coal in this country but could not be relied upon to protect their own interests, and that everything they did in this matter is now to be ripped up by this House and be scrapped by the Government. Well, anybody is entitled to say that, just as, if you were one of twelve jurymen, you would be entitled to say "The other eleven are fools and I am right"—of course you might be right—but you cannot say the Government are acting unfairly in adopting the principles which were suggested to us in that way. My noble friend Lord Hastings will forgive me if that is all I say on the present occasion with regard to his speech asking us to destroy the Bill by leaving out subsection (3) of Clause 6.
Although I am not desirous of taking up much time, I do not want entirely to leave out answers which I think may be put to my noble friends the Earl of Dudley and Lord Cromwell. It is true that if you are considering the 489 market value of all the coal in the country you are considering that market value in the light of what can be expected to be sold year by year by all these mines and whether they can sell it at a sufficient profit to produce a certain lump sum of royalty for all the owners in the country. That is perfectly true. You are limited, therefore, to what you expect they can sell and what royalties would be obtained.
May I with great respect to the noble Lord suggest this as a test by which one can see the fairness of the system proposed by the Committee and accepted by the Government. Consider this possibility, which, of course, is wildly out of the realm of ordinary politics, but take it as a test. Suppose it were shown that 200,000,000 tons of coal could be sold in each year, that the sale would produce £x of royalties per year and that that was going to last in perpetuity. Then you get a certain sum which you could be confident you would always obtain, and as it was a certain sum and going to last in perpetuity, a very high multiplying factor would be put upon the ascertained global figure. You would need nothing more than that in order to ascertain that figure. You would not need to look into a single mining plan or go down a single shaft, because the whole sum is based upon what you can get, and that does not depend on the amount of coal you have got but on how much you can sell and whether you can sell it at a profit. The global figure is really independent of how much coal there is in the earth in England. There might be 20,000,000 years of coal. It would not affect the question, how much can you sell? That being so, the question to be determined by a tribunal which is given the figure which has been the subject of criticism I am not going to deal with now, is: "Will that sum continue to be paid, will it go up or will it go down?" If it is going up, there will be not only fifteen years but a great deal more than that. If it is going down the figure cannot possibly be twenty years' purchase.
Once more—I think I have said this before—I am not going to say anything about the reasons which may have influenced the Greene Committee. I know there was a most eminent accountant who took part in the Committee. I know that there were different views held, and that the people who 490 represented the Committee argued for a very high multiplying factor, and argued that the sales of coal would probably go up; and everything was put in a most rosy light. The Crown, represented by the Attorney-General, took another view. But, after all, we cannot try that over again. They may have been wrong; I see no reason to think so; but we cannot here try that again. We cannot get the evidence again, and hear it again, and make the same speeches. We have to accept it. That, I think, is the reason why the noble Earl, Lord Dudley, is not usefully occupying your Lordships' time when he seeks to persuade you that the decision of the Committee is wrong, or that the Committee did not value the whole of the coal, worked or unworked, on the basis I have mentioned.
I have just a word to say before I sit down in reference to what the noble Lord, Lord Cromwell, has said. It does not seem to me to be quite an adequate representation of what has fallen from the Government to say that we only had two arguments, and that one of them was that every Amendment must be rejected because the Bill must be passed as it is or the Amendments would be rejected in another place. Nothing of the sort is further from being true. I am saying for myself, and for my colleagues who are with me in this matter, that if you will accept the basis of the Bill, every reasonable Amendment will be considered and, as far as possible, accepted. We have already indicated that we are going to accept some Amendments. I do not know how far we shall be able to accept a number of others, but I am sure we shall be able to accept some important ones. So I reject the notion that we are here trying to force this Bill in its present form through the Committee. The last thing I have to say is that, even if anybody in this Committee really thinks that third-degree methods were employed to force the Mineral Owners' Joint Committee to take the steps they took, and that duress was employed, nobody at any rate can think that I am anything but innocent in that matter, because I had not appeared at that time on the scene at all; and if anybody has been guilty of these third-degree methods, I shall wait till the name or names of those malefactors are given to the Committee and leave them to reply for themselves!
§ VISCOUNT SAMUEL
I do not rise to continue the debate, but only to put one question to the noble and learned Lord. Perhaps he would be kind enough to supplement his observations with reference to one point. I well understand that he has not been able to pursue all the various matters that have been raised by the previous speakers this afternoon, but there was one point in the speech of the noble Earl, Lord Dudley, which I think impressed the Committee and which, if the noble Earl is right, would cause some of us to take a different view of some provisions of the Bill. I refer to the passage in his speech in which the noble Earl gave as an example the purchase of an ironstone field by himself and his predecessor, a field which has not yet been worked and which is therefore bringing in no revenue. He said it would be a very unjust thing, he and his predecessor having spent much money in purchasing this field for future development, if on being subjected to a compulsory purchase it were regarded as of no value and no compensation were paid for it. But, he said, that is just what is going to happen in a similar case where the mineral is coal. Perhaps the Lord Chancellor will tell us if that is so or not.
I should have thought myself, from reading the Bill as a layman, that such a field, if it were an undeveloped coalfield, would have a market value. The noble Earl's family, having paid sums of money for its purchase, would not be willing to sell it unless they were recouped for their expenditure. That being so, I should have thought that similarly, if the mineral were coal instead of iron and came within the purview of the compensation clauses of this Bill, it would be paid for. If not, the Bill would commit an inequity, and although I am strongly in favour of the principle of the Bill and desire to see its passage for the sake of the well-being of the coal industry, I would not support any provision in it which I thought was unjust. That is why I venture to ask the Lord Chancellor that specific question.
Further, with regard to the global figure taking into account such a coalfield as that, which has not yet been worked and from which no royalties are at present drawn, I should have thought that the Greene Committee would have taken such a coalfield into their purview and would 492 have had regard to it in assessing the £66,000,000, just as at the other end of the scale they took into account the fact that some coalfields or portions of coalfields were now obsolescent and in less than fifteen years would lose their earning capacity: that these future coalfields are brought in at one end of the scale to replace those that are disappearing at the other, and that is how the fifteen years' purchase was arrived at. The Committee may feel that the Lord Chancellor has made his case with regard to the general principle applied in the Bill, but the question is whether, in applying that principle to particular cases, injustice will not be done. The noble Earl, Lord Dudley, seemed to present a case in which, if he was correct, injustice would be done. That is why I venture to ask the Lord Chancellor if he would be good enough in a few words to answer those two specific points.
§ THE LORD CHANCELLOR
If your Lordships will pardon me, I have on two previous occasions pointed out the complete distinction between the ascertainment of the value of the whole of the coal in this country and the ascertainment either of the regional allocation or of the individual holding of a particular owner. In ascertaining the regional allocation, certainly the Central Valuation Board will have to take into account that in one district the coal will perhaps be worked out at an earlier date, and that in another district it is just beginning to come into operation. Accordingly all those considerations will be taken into account by the experts, who come from every district and who are bound to carry out this allocation.
§ THE LORD CHANCELLOR
Certainly; I said "coming into working," meaning thereby that it is something that is known. Either the colliery is beginning to be developed by the sinking of shafts, or at any rate it is known that in a reasonable time that coal is going to be used. With regard to the value of the individual holding of a coalowner, nothing, I submit, could be clearer than Clause 7 (4). It is obvious that there, for the purpose of distributing among the owners of coal the fair amount of their interest, you are going to take into ac- 493 count not only the coal which is being worked at the time but also any other coal which they possess which has in any sense a market value. Of course, I think that those who know anything about valuation know that coal which is not going to be worked for fifteen years has only a decimal point of value, and that valuers will give you very little for it; but if it is anything within a lifetime then it has a value and will have to be valued for this purpose. And it will have to be valued (pace the noble Lord who sits in front of me, and who has an Amendment shortly coming on) as between a willing vendor and a willing purchaser, and as if it had been sold on the valuation date in the open market on that footing. Of course the purchaser is going to have to pay for anything which has a market value, whether worked now or ten years pass before you reach it.
§ THE EARL OF DUDLEY
What I think the noble and learned Lord neglected to say is that that valuation has to be disregarded and scaled down to meet the global figure.
LORD BALFOUR OF BURLEIGH
I am a little bit sorry that the noble and learned Lord Chancellor has returned to the thesis that because the global method of ascertainment was agreed, as it is now admitted to have been agreed, by the Mineral Orders' Joint Committee, therefore it must necessarily be fairer to all concerned. I emphasize the words "all concerned," because the noble and learned Lord has once again passed over the cast; which I have made now on two occasions in this House, and which I do not intend to repeat at this moment, that while the global method may have been convenient to some large royalty owners of coal now in working, it is not at all convenient to the owners of undeveloped coal, whose interests, with great respect, are not identical with those who own both coal which is in working and undeveloped coal. Therefore the global figure may, and in my opinion will, even assuming the total is fair, give rise to unfairness between the different parties who are going to divide the compensation.
I just want to say a word in regard to the point made by the noble Lord opposite 494 who supports the Government, and that is as to marketability, because I want to be fair to the Government. I have started on these debates with the idea that I believe the Government wish to be fair, and I want to be fair to them. Therefore I am quite prepared to admit that I see a certain force in the argument about marketability. The argument, if I may state it, is that that which you cannot market has no value, and therefore the whole compensation to be given must be limited by the total amount of coal you anticipate will be marketed from one year to another in the future. I do not think that that is quite a complete argument, because it overlooks the fact, which has already been mentioned to-day by my noble friend, that if an individual wishes to buy a house with coal under it he has to pay for the coal, and if the individual holding the coal wishes to sell he can sell it. To argue that if all the coalowners wish to sell at once they can only sell between them so much, is one thing, but it is not a convincing answer to the argument that each individual owner can sell his individual holding.
The argument of marketability might be applied to other things. You might take War Loan, the finest security in the world, which consists of a block, I think, of £1,500,000,000. If you were to postulate that all the owners of War Loan were going to sell at once the price for War Loan would go to pot, if I may use the expression. It would be quite inequitable to postulate anything of that sort. You would have to postulate its being sold bit by bit. If you were to argue that it was all going to be placed on the market in one year, that would completely destroy the market in War Loan, and it would be quite unfair for some great authority—obviously not the Government, because it is their own security—it would be unfair for anybody who sought Parliamentary powers to acquire the whole of the War Loan to acquire it on the basis of everyone selling it at once.
That is what I venture to call a lawyers' point. Lawyers, if I may say so with great respect, are admirable people. Lawyers and valuers are admirable people, but they ought to be kept in their proper places. I venture to say that this question of the acquisition of the royalties is not a lawyers' question. It is a 495 great question of public policy. I would not for one moment wish to say anything derogatory of Lord Justice Greene, the Chairman of the Tribunal. Everybody knows his wonderful qualities, and the eminent position he holds, but I think I can say that in my opinion this is where the mistake occurred. This Tribunal consisted of two lawyers and an accountant. The proper tribunal would have been one presided over by some great layman, with great public experience of accounts, who could sit there as arbitrator and have the advantage of the services of great lawyers and valuers to assist him. Then I think he would have got a result which a reasonable man could have commended to reasonable men. The noble Earl who leads the House has consistently refused to commend this Bill to us as reasonable men because he says it is technical. If the course which I have suggested had been followed I think the noble Earl would have been in a much happier position, and could have put forward this as a proposal, in the national interest, to buy out the holders of coal royalties—a proposal which had been
§ examined and passed as fair by this great tribunal, presided over by whoever it might be, with the assistance of the finest legal brains and the greatest valuer brains, and your Lordships could have accepted it as a reasonable proposition. That would have been a very different state of affairs from that which we have to-day.
§ Finally, there is this point. Nobody can deny that the property which the State is acquiring in the aggregate as a monopoly is going to be of greater value than any aggregate of small individual holdings of which it is going to consist. The monopoly value adds greatly to the value of those holdings. Is it not rather mean that in these circumstances the Government should take advantage of this legal quibble to take away from these owners, many of whom are small people, that property which is theirs by right, and leave them with the feeling that they have been diddled out of their property by a legal fiction?
§ On Question, Whether subsection (3) shall stand part of the clause?
§ Their Lordships divided:—Contents, 73; Not-Contents, 52.497
|Maugham, L. (L. Chancellor.)||Stanhope, E.||Forteviot, L.|
|Gage, L. (V. Gage.) [Teller.]|
|Hailsham, V. (L. President.)||Buckmaster, V.||Hare, L. (E. Listowel.)|
|Goschen, V.||Harlech, L.|
|De La Warr, E. (L. Privy Seal.)||Halifax, V.||Holden, L.|
|Hampden, V.||Hunsdon of Hunsdon, L.|
|Ridley, V.||Hutchison of Montrose, L.|
|Somerset, D.||Samuel, V.||Jessel, L.|
|Ullswater, V.||Mancroft, L.|
|Bath, M.||Marks, L.|
|Dufferin and Ava, M.||Addington, L.||Merthyr, L.|
|Zetland, M.||Addison, L.||Mildmay of Flete, L.|
|Annaly, L.||Monkswell, L.|
|Airlie, E.||Arnold, L.||Mottistone, L.|
|Baldwin of Bewdley, E.||Basing, L.||Newton, L.|
|Bessborough, E.||Belstead, L.||Rea, L.|
|Birkenhead, E.||Bingley, L.||Rennell, L.|
|Lucan, E. [Teller.]||Blythswood, L.||Rushcliffe, L.|
|Midleton, E.||Cadman, L.||Sackville, L.|
|Midlothian, E. (E. Rosebery.)||Clanwilliam, L. (E. Clanwilliam.)||Snell, L.|
|Mount Edgcumbe, E.||Stanmore, L.|
|Munster, E.||Clwyd, L.||Strathcona and Mount Royal, L.|
|Onslow, E.||Denman, L.|
|Plymouth, E.||Dickinson, L.||Sudeley, L.|
|Radnor, E.||Fairlie, L. (E. Glasgow.)||Templemore, L.|
|Sandwich, E.||Faringdon, L.||Windlesham, L.|
|Shaftesbury, E.||Fermanagh, L. (E. Erne.)||Woodbridge, L.|
|Spencer, E.||Forester, L.|
|Northumberland, D.||Bathurst, E.||Dudley, E.|
|Wellington, D.||Bradford, E.||Fitzwilliam, E.|
|Cawdor, E.||Grey, E.|
|Abergavenny, M.||Dartmouth, E.||Lindsay, E.|
|Lindsey and Abingdon, E.||Darcy (de Knayth), L.||Oriel, L. (V. Massereene.)|
|Liverpool, E.||Doverdale, L.||Oxenfoord, L. (E. Stair.)|
|Mar and Kellie, E.||Dunmore, L. (E. Dunmore.)||Perry, L.|
|Vane, E. (M. Londonderry.)||Fairfax of Cameron, L. [Teller.]||Redesdale, L.|
|Bertie of Thame, V. [Teller.]||Foxford, L. (E. Limerick.)||Sandhurst, L.|
|Falmouth, V.||Gainford, L.||Shute, L. (V. Barrington.)|
|Hereford, V.||Gerard, L.||Stafford, L.|
|Hastings, L.||Strickland, L.|
|Aberdare, L.||Hindlip, L.||Teynham, L.|
|Askwith, L.||Lamington, L.||Waleran, L.|
|Belper, L.||Leconfield, L.||Wigan, L. (E. Crawford.)|
|Biddulph, L.||Middleton, L.||Wolverton, L.|
|Cornwallis, L.||Mowbray, L.||Wyfold, L.|
|Cromwell, L.||O'Hagan, L.|
§ Resolved in the affirmative, and Amendment disagreed to accordingly.
§ THE MARQUESS OF LOTHIAN moved, in subsection (4), after "shall," where that word occurs for the second time, to insert "as soon as possible after the valuations of the Regional Valuation Boards have been received." The noble Marquess said: Although this Amendment deals with almost the same subject as the Amendment moved by the noble Lord, Lord Hastings, it has quite a different purpose in view. As far as I understand it—and I think that something that the Lord Chancellor said in his speech confirmed it—it is the intention that the Central Valuation Board should allocate the global sum before the regional valuations have been prepared. I think if that is carried out you are liable to have exactly the same kind of difficulty as has convulsed this House for the last two days.
§ The Central Valuation Board, as the noble and learned Lord pointed out, consists of an independent Chairman (a legal Chairman), two independent people, and a member of each of the Regional Valuation Boards. If the Central Valuation Board, for some abstract reason of its own, allocates between the districts the £66,000,000 before the regional valuations have been received, and there has been some discussion on the Central Valuation Board between those representatives of the Regional Valuation Boards who will sit on the Central Valuation Board, in order to test whether those valuations have or have not been on approximately the same basis, the result you are going to get is that one region will get 12s. 6d. in the pound of the regional valuations, being its proportion of the £66,000,000, another district may get 10s. in the pound, and a third district may get 17s. 6d. in the pound, according to whether the regional 498 valuations are or are not on the same basis. Your Lordships can understand the sort of indignation which will arise in this country, and will certainly be reflected in your Lordships' House, when people find that they are getting, in point of fact, say, only 10s. in the pound of the regional valuation among themselves, and that they are not all even getting the 10s.; some are getting 7s. 6d., some 12s. 6d. I think you are going to encounter a much greater and more serious cause of resentment based on the inequity of this distribution of an inadequate sum between these eventual recipients.
§ It is my suggestion—and I hope the Government will give some consideration to it—that the Central Valuation Board should not allocate the £66,000,000 between the regions until, at any rate, they have before them the figures of the regional valuations and have discussed these figures so as to satisfy themselves that their ultimate award will be really fair as between the districts. I do not think, in abstract, it is impossible to do so. It will say, presumably, that each regional valuation district has a proportion of the £4,430,000. My noble friend Lord Hastings made a convincing case that there are other elements which will have to be taken into account, such as un-worked coal or the amount of coal coming into working, which will affect, not perhaps in a vital way but in a considerable way, the regional valuations. I therefore suggest that the right course is that the date of the allocation of the £66,000,000 between the various regions should be a date after the preliminary valuations by the Regional Boards have been completed and when those valuations have been considered by the Central Valuation Board. It is with the object of getting the view of the Government on this point, and the view of the Committee, that I am moving this Amendment.499
Page 7, line 9, after ("shall") insert ("as soon as possible after the valuations of the Regional Valuation Boards have been received").—(The Marquess of Lothian.)
§ LORD CROMWELL
Certainly the Government can admit right away that this is a very reasonable Amendment, moved by a very reasonable man in a very reasonable way. If my experience so far had been that the Government really thought fit to give way whenever they saw a chance, I should not be on my feet. But I would like to stress one point which the noble Marquess did not stress, and that is that if the central valuation is done before the regional valuations are done, there can be only one method by which the central valuers can arrive at the figure to be allotted, and that is on the average amount of royalties paid within the boundaries, whatever they are, over a period up to, say, January 1, 1939. As the noble Marquess pointed out, that is one relevant point, but it is not by any means the only one. In the same way as this £66,000,000 has been arrived at by taking £4,430,000 and multiplying it by fifteen, in our view that £4,000,000 odd represents the addition of the royalties being received in the districts. With all the sincerity at my command I ask the Government whether they cannot see their way to give way at this moment. It will cost them nothing and, as the noble Marquess pointed out, they will otherwise stir up for themselves all sorts of trouble which they can readily avoid by giving way at this moment.
§ EARL STANHOPE
I confess I was considerably attracted by the noble Marquess's Amendment, but I should like to put these considerations before him. Supposing the central allocation is postponed until all these regional valuations have come in, one of two things must happen. Either the Central Valuation Board must disregard these regional valuations altogether, in which case we are in exactly the same position as if they had made the allocation before they received the valuations, or they will take account of them. Or if they take account of these valuations, they might, perhaps, say, "We think it would be very unfair, as the noble Marquess pointed out, that certain individuals in one region should get 7s. 6d. while someone else should get 500 12s. 6d." They would then be inclined to give a higher valuation to those whose valuation comes to 7s. 6d. But why have they got a valuation of 7s. 6d.? Possibly because—this is one of the things at any rate that might happen—that particular region has put a very high assessment on its coal.
My noble friend would, I think, agree that that would be extraordinarily unfair to the other regions, and the Central Valuation Board would be put in a difficult position. They would be faced with the difficulty that one region took a different view from that taken by another region. If they disregard it, there will still be all the objection that my noble friend anticipates. On the other hand, if they give way, they will be doing an injustice. I have hopes that we may possibly escape this dilemma altogether. It is possible—I do not say more than that—that this regional allocation may be an agreed allocation. There is still plenty of time before that allocation is necessary, and it may be that the Central Valuation Board will think it wise to postpone that valuation until not very far from the vesting date, if indeed they do not do what my noble friend suggests. But it would be unfortunate if we bind them to wait until the regional valuations come in, because there are these difficulties which I have pointed out, and frankly I am not quite sure which is the lesser of two evils.
THE MARQUESS OF LOTHIAN
Do I understand that the Government, in point of fact, reject the Amendment? I am not going to press it to a Division, but I want it considered. There is an answer to what the noble Earl said, which is that, assuming the Central Valuation Board is well composed, the representatives of the various Regional Valuation Boards, each of which has one representative on the Central Board, discussing it among themselves in the presence of the legal Chairman and the two independent members, ought to arrive at some estimate as to whether one region is valuing higher or lower than another. They might say, "The reason you are getting 7s. 6d. is that we have satisfied ourselves that it is a proper valuation and therefore the 7s. 6d. in your case is the equivalent of 12s. 6d. in the other case." They will, at any rate, be able to answer that they have weighed all the objections, 501 whereas if they do it on some arbitrary basis it will be said, "You did not take into account unworked coal or the total volume of it, and you get a result without having weighed all the facts and considerations." I do not propose to press the Amendment. I have done what is necessary in bringing the matter home to the Government, and I hope they will weigh it. Do I understand that the Government are now rejecting the Amendment?
§ EARL STANHOPE
For the moment I am rather in the hands of the Committee in this matter, because the Government have no very strong views about it. On the whole we are inclined to think it would be better to leave it out, because if an agreed valuation is arrived at obviously this Amendment would be unfortunate. On the other hand, speaking with regard to other objections, I entirely agree that the Central Committee should take into consideration the points which my noble friend has just raised. I am not quite so optimistic as he is that they will be able to persuade particular regions that their assessments stand too high. Therefore I think there will be a good deal of pressure on the Central Committee to take into consideration a figure which they know to be an exaggerated figure as compared with the figures for other regions.
THE MARQUESS OF LOTHIAN
What I would like to do is to withdraw the Amendment now, but to give notice that I may bring it up again on Report stage if, after consideration, I think I ought to.
§ Amendment, by leave, withdrawn.
§ Clause 6 agreed to.
§ Clause 7:
§ Ascertainment and distribution of compensation.
§ (4) The value of a holding shall be taken to be the amount which the holding might have been expected to realise if this Act had not been passed and the holding had been sold on the valuation date in the open market by the existing owners thereof, selling as willing vendors to a willing purchaser, under a contract providing for completion thereof on the vesting date, so however that, where a right to withdraw support is to vest in the Commission with coal or a mine of coal in which a holding subsisted, it shall be valued as if each of the existing owners thereof, having power to grant that right to the purchaser for an interest corresponding to the existing owner's interest in the 502 coal or mine, had agreed so to grant it in addition to any acquired rights in which the holding subsisted.
§ (7) There shall be paid in respect of each holding in any valuation region for which compensation is payable—
- (a) a sum bearing to the amount certified in respect thereof as attributable to principal coal hereditaments the same proportion as the amount of the regional allocation for that valuation region bears to the aggregate of the amounts so certified in respect of all such holdings in that valuation region; and
§ LORD ADDISON moved, in subsection (4), to leave out "to a willing purchaser." The noble Lord said: The Amendment which I will ask your Lordships to consider appears perhaps to be only a verbal Amendment but it does in fact raise a very important question of public principle. In moving it may I say that the Party for which I speak is actuated by a desire, in any proposals that it might ever make to acquire for public purposes any person's private property, to pay fairly for it. That is the principle that the Party to which I belong has deliberately adopted. I confess that while I have listened to the storm of the last three days' debate on the Bill I have counted myself fortunate that the proposals in this Bill had not been introduced by a Socialist Government. I can imagine what a hurricane would have swept over the House if we had been so rash as to introduce a Bill like this. However the learned Lord Chancellor and the noble Earl opposite, and others, are no doubt quite capable of taking care of themselves. At the same time I am not quite sure whether the royalty owners have not as a body had a raw deal. They might have done better from the Socialists. Still, if so, I think that they must blame their friends rather than anyone else.
This particular Amendment is very important in that I am asking your Lordships not to revert to a very bad practice—a practice which gave rise to grave difficulty all over the country, and I am very surprised that the Government have allowed it to leap back into this Bill. In order to explain it may I call attention to the first item of reference to the Tribunal which has often been quoted in this House and which even was quoted with approval by the noble Lord, Lord Hastings. It is this:
The Tribunal is to determine the amount which the fee simple of all unworked coal and all mines of coal in Great Britain … might be expected to realise if sold in the open market by a willing seller.
It ends with the word "seller" and the noble Lord, Lord Hastings, said that this is a principle to which no one of your Lordships, no matter what form of property you own, could conceivably object, because it is the principle which has prevailed hitherto in the compulsory or voluntary acquisition of all forms of property. He was not historically quite correct, but at any rate he gave the formula his blessing and it ends with the word "seller." Now in subsection (4) of Clause 7 we are invited to prescribe as the basis of value the amount a holding might have been expected to realise if
sold on the valuation date in the open market by the existing owners thereof, selling as willing vendors to a willing purchaser.
Those words were formerly in our Land Acquisition Acts, and they were deliberately dropped from that procedure because of the difficulty to which they had given rise.
In that connection I will draw your Lordships' attention to Section 2 of the Acquisition of Land Act, 1919, which is the Act that governs the acquisition of land by local authorities and Governments and has done so quite fairly ever since. Subsection (2) of Section 2 of that Act says:
The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise.
That is perfectly fair. Your Lordships will notice that there is no reference there to a willing purchaser. Why is that omitted? Purchasers are omitted because the value that the property may possess, either then or ultimately, to a purchaser is not an element in its value to its present owner. The purchaser may devote the land to all manner of purposes. He may do well with it or he may do badly with it. He may build a shop on it or leave it as a garden. In one case it will have a higher value than in another; but whatever the purchaser may do to it in time to come is no element of its present value to its existing owner.
§ In consequence of this consideration of the value that it might possess to a purchaser there were some very grotesque 504 and indeed most unjust decisions given under the old Lands Clauses Act in which this provision appeared before it was repealed in 1919. It will be within the recollection of many of your Lordships that local authorities, for example the London County Council, paid very extravagant values for parcels of land, and this gave rise to much resentment because of the obvious inflation of the price. But the argument before the tribunal then used was that this land for the County Council, considering the purpose for which it was being acquired, would be of much greater value than it was to the selling owner. Therefore inflated valuations were attached to the land. The worst case of the kind occurred just before the Act to which I have referred was passed. May I say in the presence of the learned Lord Chancellor that I myself piloted that Act as a Bill through the House of Commons, and negotiated this form of words with a Committee of this House in 1919, and it was passed without dissent. The Manchester Corporation had to acquire a lot of land near Thirlmere as a catchment area for the reservoir. The land was the usual hillside land of that district. It was worth very little per acre to the existing owner, and it never would have been worth much more to any owner there. But the arbitrator said: "We have to take account of the value of this land to the purchaser, and this land as a catchment area for water for the citizens of Manchester will be of very high value indeed." It was in consequence of considerations of that kind—the value of the land to a purchaser—that an enormously inflated value was attached to the land and the citizens of Manchester had to pay a most extravagant price for it. That was clearly inequitable.
§ Now it is true that in this case there will be one purchaser. That purchaser will be the Commission, I take it, and the items subject to this method of valuation will be what are described here as subsidiary coal hereditaments. What that means I do not know, but something other than the coal which is dealt with under the major provision, and which is described as a principal coal hereditament. It is the rest of the things for which it is suggested £10,000,000 should be paid. As far as the Bill is concerned it might be £20,000,000 or £50,000,000. If these words are left in I do not know what it will be. I suggest that owners 505 ought to be paid what their property is fairly worth. They are paid what it is fairly worth under the provisions of the existing law which I have quoted, and the insertion of these words has led in times past to serious difficulties, great injustice, and much public resentment. I suggest therefore that they ought not to be in this Bill.
Page 7, line 38, leave out ("to a willing purchaser").—(Lord Addison.)
§ THE LORD CHANCELLOR
I was interested to hear the noble Lord tell us, as I understood him, that coalowners, in his view, have been given something of a raw deal in this present Bill, and that if the Bill had been introduced by the Party to which he is proud to belong there would have been an uproar. I naturally supposed that, having said that, he was going to explain that he thought something should be done to remedy the injustice to which the coalowners were being exposed under this Bill. But instead of that, having given vent to these generous phrases—which I must observe are quite different to the phrases which were used in another place by his own Party—he proceeded to suggest that the sums payable to the owners of coal should be reduced in so far as they related to subsidiary coal hereditaments.
§ THE LORD CHANCELLOR
It must be so, because the noble Lord suggests that a less sum will be payable to those owners of coal in respect of subsidiary coal hereditaments if we omit from Clause 7 (4) a reference to the fact that the Commission are willing purchasers. That is the whole sense of this Amendment. If it were true that omitting these words would diminish the amount payable to the coalowners, I should have thought that would be most unjust and unfair and, if the expressions of opinion with which the noble Lord began are genuine, the last thing which he would advocate. Then he told us that it is subsidiary coal hereditaments and their value which are concerned here, and he professed not to know what they were. Well, he has only to look at Clause 2, subsection (2), to find out all he wants to know about them. Having found that out—namely, that amongst other things they include 506 minerals other than coal—it may be china clay, it may be some ironstone mixed up with the coal—he will find that they also include surface servitudes, and he must look in the Schedules to see what that word means.
He asked us to say that subsidiary coal hereditaments should be treated like the acquisition of land by, for instance, a public utility company, and that the principle upon which the value should be ascertained and paid by the Commission should be the same as that. But this property is not being acquired by a public utility company. He is perfectly right in saying, if I may say so with great respect, that when a local authority was acquiring land for the purpose of a water supply it was found in the past that in estimating the value of a particular piece of land or particular fields necessary for that purpose, the vendor got more than he was entitled to get because his counsel was able to say, "You cannot get this scheme through without buying my fields, and they are therefore worth £1,000 an acre, although three months ago they were only worth £10." It was to prevent that that the provision in the Act which has been referred to was piloted by the noble Lord through another place and became law.
I venture to say that the circumstances here are entirely different. If the Commission have got to buy, for instance, some china clay or minerals other than coal, they are buying them for their own purposes because they cannot work the coal without working these other things. They are the people who are desirous of getting these things, and they ought to pay for them the fair value. There is no other method of obtaining a perfectly fair value than by assuming on the one hand a willing purchaser and on the other hand a willing vendor, and then taking the market price ascertained on that footing. I would add, because I have always thought that it is incumbent on me not to mislead the House on a matter of law, that I doubt very much whether the omission of the reference to a willing purchaser will make the smallest difference as a matter of law. I think the Courts would hold in a case such as we have before us that if you have a willing vendor you must assume a willing purchaser. There is not a true market in the ordinary sense in cases of this kind unless both 507 people are willing. But I am not going to run any risk about it. I submit that the formula set out in this subsection is a fair and just formula and the noble Lord ought to be very glad, if he sticks to his principles that coalowners are at any rate on this point going to get justice.
§ LORD ADDISON
With much ingenuity the noble and learned Lord Chancellor has evaded the point. It is quite immaterial who buys the property. I am not concerned with who purchases it, whether it is a Commission or a county council or a private individual. The point is what is the prescription in an Act of Parliament which will secure that the existing owner is fairly paid. It is no answer at all to my plea in connection with these subsidiary hereditaments that I expressed the opinion that on the principal matter, which was not included in them at all, the royalty owners have had a bit of a raw deal. That is the impression I have got from three days' debate, and I honestly say so. But that was in respect to the major sale of their royalties. This is another matter altogether. This concerns what is to be the basis of valuation of something other than that, with which we have not yet dealt.
I suggest with the greatest respect to the noble and learned Lord that in 1919 there was a mountain of complaint as to what had happened because of the inclusion of the words "a willing purchaser." The result was that the value of the property to the purchaser was taken into account in assessing its value to the existing owner. With great respect, the noble and learned Lord Chancellor is not historically correct when he says there is no other method than this. As a matter of fact, there is a method in practice now, which has worked for twenty years with remarkable smoothness, in which these words do not occur at all. Those words were deliberately omitted because of the difficulties to which they had given rise. So, with the greatest respect to the noble and learned Lord Chancellor, I suggest that his statement needs some amendment; that the present method is satisfactory and does work; and that there is no reason, so far as I can gather from anything that he has said, why we should revert to a practice which was previously found to be unsatisfactory.
THE MARQUESS OF LOTHIAN
Is not this Amendment really rather irrelevant to the matter under discussion? I am gratified that the noble Lord feels that the mineral owners have had a raw deal, but none of this trouble would have arisen if the Greene Committee had inserted as the multiplier twenty or twenty-two instead of fifteen.
THE MARQUESS OF LOTHIAN
I think that most noble Lords who have listened to this discussion have come to the conclusion that that really ought to have been the proper multiplier, but in this case it is not a question, despite the earnestness of the noble Lord, of getting a fair price, because the price has already been fixed in the Bill.
§ On Question, Amendment negatived.
THE MARQUESS OF LOTHIAN moved, in subsection (4), to omit all words after "vesting date." The noble Marquess said: This Amendment is really to give me an opportunity of asking the noble and learned Lord, the Lord Chancellor, the meaning of the words which I propose to leave out. I should like to read the subsection, because I have taken legal advice, but my legal adviser is not able to explain to me what the meaning is. It says:
The value of a holding shall be taken to be the amount which the holding might have been expected to realise if this Act had not been passed and the holding had been sold on the valuation date in the open market by the existing owners thereof, selling as willing vendors to a willing purchaser, under a contract providing for completion thereof on the vesting date.
That is all right, but then come these words:
so however that, where a right to withdraw support is to vest in the Commission with coal or a mine of coal in which a holding subsisted, it shall be valued as if each of the existing owners thereof, having power to grant that right to the purchaser for an interest corre-
sponding to the existing owner's interest in the coal or mine, had agreed so to grant it in addition to any acquired rights in which the holding subsisted.
I wonder if the noble and learned Lord will explain what those later words mean.
Page 7, line 40, leave out from ("date") to the end of the subsection.—(The Marquess of Lothian.)
§ EARL STANHOPE
I think it may be strange to some noble Lords opposite that this is to the advantage of the owner of unsevered coal. I understand that the effect of the words is this: A holding consists of the coal and mines comprised in it and the rights annexed thereto. Coal which has not been severed from the surface until it was severed by this Act has not had annexed to it any rights to let down the surface. If that coal was valued without rights to let down the surface, obviously its value would be very much lower than if it had those rights annexed to it. The meaning of these words is that this unworked coal has a right to let down the surface and therefore "shall be valued" accordingly. Of course, this does not in any way affect the compensation payable for letting down the surface, but it does improve the value of that coal, because it has those rights annexed to it.
§ Amendment, by leave, withdrawn.
§ LORD TEYNHAM had given Notice of an Amendment to insert three new subsections. The noble Lord said: In view of the Division in this Committee yesterday on Lord Balfour's Amendment, I will not move this Amendment now, but I should like to introduce it again in a simplified form on the Report stage to cover the payment of interest in the event of the Commission not making payment of compensation by any date to which the vesting date may be extended.
§ EARL STANHOPE
May I say that of course the Government accepted the principle of my noble friend's Amendment before the Division yesterday, and of course as a result of the Division, as he very rightly says, his Amendment drops. I think he is fully justified in seeing whether there is some place where he can put it in the Bill, because, supposing that 510 another place rejects the Amendment which your Lordships made yesterday, then there would be no method by which compensation could be paid to the owners under the proposal which he puts forward, because it would not be a clause amended before it went to another place.
§ LORD HASTINGS
What the noble Earl has just said presupposes that this House would not insist on this Amendment, a supposition to which I should not care to subscribe.
§ EARL STANHOPE
If this House preferred not to abide by the Amendment which the Committee inserted yesterday, then the noble Lord might lose an opportunity of putting this Amendment in.
§ LORD SALTOUN moved, after Clause 7, to insert the following new clause:
§ Compensation to persons displaced.
§ ". In addition to the compensation payable under Section six of this Act the Commission shall pay to the persons specified or defined in the Schedule (Ascertainment of compensation to persons displaced) to this Act compensation for any loss suffered by them in consequence of the provisions of this Part of this Act. The provisions of the said Schedule shall have effect with respect to the determination of the nature and amount of such compensation and with respect to the payment thereof and the settlement of differences or questions concerning such compensation or the right of any person to receive the same."
§ The noble Lord said: The object of this Amendment, which stands here in my name and that of my noble friend Lord Cromwell, is carried out by the words proposed here to be inserted, and by the addition to the First Schedule which is proposed on page 19 of the Marshalled List, and by the Amendment on page 25 to insert a new Fourth Schedule. The object of these Amendments, which are all one, is to enable compensation to be paid to principals and employees of mineral surveyors who lose their employment and are not employed by the Commission after the vesting date. Mineral surveyors find their employment, and it is almost their sole employment, in conducting the delicate negotiations and very 511 technical relations which exist between the owners and the mine managers. The relationship between these two parties to which many noble Lords have referred both on the Second Reading and on the debate on the first Amendment moved by the noble Lord, Lord Hastings, is ample testimony to the skill, tact and integrity with which these mineral surveyors carry out these tasks. Except for those who may be taken into Government service, all the persons to whom these Amendments refer, the principals and the employees, will become unemployed after the vesting date, because there will be no more work for them to do.
§ Your Lordships will note that the Amendment excludes from its scope those who take service with the Commission. It is very important, because that is required to meet the objection made to this Amendment by the Government, both in another place and yesterday by the noble Earl who leads the House. Under the law of unemployment insurance it has for some time past been recognised as a duty of all our Governments to institute and administer funds for the relief of unemployment amongst certain, possibly favoured, classes, and that even though some blame for the misfortune of unemployment may be laid at the door of the claimant. I submit, therefore, that persons who are rendered idle in the way in which these men will be rendered idle by this Bill have a moral claim against the State for compensation which I do not think can wisely be rejected. I will not try to rouse your Lordships' pity by giving instances of the kind of case that is certain to arise, but I will give you one case of which I happen to know, the case of a firm of mineral surveyors who are capable of many more years of activity but who are rather too old to take on a new profession and whose business is confined to that of mineral surveyors. These gentlemen may retire, but what is to become of their confidential clerk? He is not even a surveyor; he is a confidential clerk and his real stock-in-trade in this world is the confidence that his conduct in the past has engendered in the minds and hearts of those who employed him. He cannot find that capital again in any other employment, and he had a reasonable prospect of that employment for the course of his natural life. He is going 512 to have this employment taken away from him, and if he receives no compensation I submit that he will be very hardly used.
§ I think that is sufficient to say. I am quite content to rely upon the justice of my case. It may be replied that the unemployment funds to which I have referred have been contributed jointly by employers and employed of the trades benefited, but in the case covered by this Amendment there has also been a contribution, although it was solely made by the mineral owners, because the total figure for royalties, the global figure, was only struck after there had been deducted from the gross figure, among other items, the sum of £220,000 on account of expenses. A large part of those expenses were payments made in the course of business to mineral surveyors. Had these payments not been deducted the price paid to the royalty owners would have been higher, presumably by some £3,300,000, which is fifteen years' purchase of £220,000. The State, therefore, will receive from the royalties, on this account alone, a sum of £220,000 per annum more than the sum which formed the basis of the computation, and I submit that it is only fair to use that sum, or part of it, to compensate those people who are to be so roughly treated.
§ Moreover, your Lordships will observe that this fact makes it quite clear that the plea of Privilege cannot be urged against this Amendment, as it does not involve anything in the nature of an increase in the charge. Of course it may be claimed that mineral surveyors form an independent profession, and are not technically in the employment of royalty owners, but their whole employment does in fact depend upon the royalty owners, and the fees paid to them have been reckoned off the price paid for the property, just as wages would in fact have been. I think I might go further and say that the noble Earl who leads the House, in discussing this matter, said that these mineral surveyors were so much in the employment of mineral owners as to unfit them to be valuers. I think that is placing them in a very unique position.
§ There is a further consideration. I do not think the Government can really claim that the steps leading up to the present stage of the Bill had been altogether satisfactory. I do not understand myself 513 what has been the real relationship between the Treasury and the Mineral Owners' Association. It has been clearly established, I think, that the Mineral Owners' Association had no authority to treat on this particular matter with the Treasury, to initiate the sale of the interests with which they were concerned, and I cannot understand why that was not put before the Treasury. Nor can I understand why the Treasury, in these negotiations, did not say: "This is a very serious thing; we had better find out if these people really have authority to enter into these conversations with us, and also whether they represent every kind of interest." I am not suggesting for a moment that there is anything wrong about this, but I merely say that I do not understand it, and I think it is a regrettable thing that the negotiations should have been so far from clear. I think there is a very strong obligation on the Government to see that everything that happens from now onwards can be subjected to the closest criticism.
§ The noble Earl dealt with the point of this Amendment last night and said he did not think there would be many mineral surveyors who would not be employed by the Commission. I think that is possibly founded on figures supplied to him by the Surveyors' Institution, and I am authorised by the Institution to say that those figures were prepared for a completely different purpose, and that further inquiry has shown that the figures given by the noble Earl were only a small fraction of the total number. Whether the noble Earl is right in saying that only a small fraction of these people will be unemployed, or whether I am right in thinking that a large number will not be employed, there are two things to be said. If there are no unemployed then this clause can have no effect, whether it is in the Bill or out, but if there are any mineral surveyors unemployed it is of importance that the Government should see that they receive some compensation, otherwise there would be the greatest inducement on these people to enter into the service of the Commission on any terms they can get, and it cannot be expected that you will get the highest conditions in this great profession if they are going to be subjected to heavy pressure in order to become the mere spokesmen of one-sided views.514
§ The nature of this Bill before us is so unprecedented that it would not be surprising in the least if no precedent could be found to support my case, but I am able to point to many precedents. There is the Metropolis Water Act of 1902, the Port of London Act of 1908, the Railways Act of 1921, and the London Passenger Transport Act of 1933. These are only a few out of many, and they all contain provisions for the compensation of any officer or servant of the superseded concern who suffers by the particular Act. The Railways Act goes further, and considers as an officer or servant any solicitor who was continuously retained by a Railway Company as a chief legal adviser for five years before the passing of the Act. Your Lordships will notice that the Amendment is more modest, and insists on seven years' service. The principle here laid down certainly covers the inclusion of the heads of firms of mineral surveyors. And if the principals, who not the employees? Their case is just as hard, and is certainly harder than that of the solicitors, because the more technical and specialised a profession is, the harder it becomes for its members to turn to something else. Besides, I must point out to your Lordships that the Railways Act of 1921 did not abolish the profession of a solicitor. Possibly it ought to have done so, but it did not. This Bill, however, does abolish completely the whole independent profession of mineral surveyors.
After Clause 7 insert the said new clause.— (Lord Saltoun.)
§ LORD CROMWELL
Practically every point in regard to this matter has already been touched on by the noble Lord who moved the Amendment, but lest it should be thought that only one speaker in your Lordships' House had placed arguments before you in favour of a proposal of such merit I will add a few words. With the utmost confidence I ask the Government to accept this Amendment. It is quite a different form of Amendment from any other Amendment moved up till now. There is what I consider an unanswerable case. The arguments we have used in support of previous Amendments may have had an answer, although we have not received it, but in this case I think even the Gov- 515 ernment will admit that the case is unanswerable. There are two other Amendments which arise out of this, but if this Amendment is passed that does not in any way mean that your Lordships approve of the other two Amendments. Those will be debated on their merits.
I should like to point out that compensation payment will only be made to those people who are thrown out of their jobs by this measure, whether they are receiving commission or direct salary, and those who are taken on by the Commission at a lower salary than they are receiving now. If there is no compensation the Commission will be able to take on all these gentlemen at a lower salary than they have been receiving up till now because there is no other outlet for their services. It is true, the Leader of the House has said that a great number, if not all, will be taken on during the valuation period, but he went on to say—and no doubt it is true, but there may be two meanings to it—"Ought not they to be content with the fact that they will have very much more employment during the valuation period?" That is not an argument which convinces me as to the fairness of paying no compensation to them afterwards, when they are in fact out of employment. If this Bill should not pass into law they would receive, practically speaking, employment in perpetuity—which will not be fifteen years in this case—and therefore they would suffer no loss. But that will not be so under the Bill.
It is a pleasure from my point of view to argue this case for a body of men who have served the owners of coal so loyally in the past, and to whom we owe a deep debt of gratitude. In this case the Tribunal cannot be quoted at all, because the money for management, amounting to £221,000 a year, has been deducted, and if capitalised it comes to £3,315,000 approximately. According to a good many of your Lordships the Commission will already be in possession of a surplus income of £2,000,000 a year. If this is to be added to it, that amount will be increased by nearly a quarter of a million, which I do not think is just. Several Acts of Parliament were quoted by the noble Lord who moved this Amendment, and I confirm that all those cases, according to my advice, are similar to the ones 516 we are now discussing. An Amendment similar to this was moved in another place, and, having read the debate there, I personally—and I think a great many others—have come to the conclusion that it is abundantly clear that the Minister in charge did not at the time fully appreciate that compensation is only proposed for those not taken on by the Commission in permanent employment.
§ EARL STANHOPE
May I at once repudiate the suggestion made by my noble friend Lord Saltoun that I thought that these valuers were likely to be unfair. The point I was making was that when a valuer acts on behalf of a purchaser his valuation is likely to be a different one from that made by the valuer on behalf of the seller. Everybody knows that when you get two valuers, perhaps valuing the amounts due from an outgoing tenant, almost invariably there is a considerable difference between the valuation made by the valuer on one side and the valuation made on the other. That does not mean that the valuation is unfair. One takes an optimistic view and the other a pessimistic view. Therefore I cannot allow the noble Lord to say that I imputed anything against these gentlemen, who have a very high reputation.
I apologise if I expressed myself badly. The noble Earl said that they were unfitted. I did not consciously wish to suggest that he made an imputation of the kind to which he has referred. I am sure he is not capable of it.
§ EARL STANHOPE
As regards the Amendment, my noble friend quoted several cases where compensation has been given. They are really not quite on all fours with this case. In each case it is the servants and the employees who receive compensation, and therefore it would be very unfair to deal only with mineral agents and those who are engaged in the management of coal. If you are going to do this at all you ought to include the whole of the miners who might be displaced. But actually the argument is much more the other way, because in regard to the question of tithe, the tithe collectors had really much less good terms than the mineral agents are likely to get. First of all, they will have a very great deal of work in regard to 517 valuation, in addition to all the other work they do now, but after the vesting date coal concerns will still have to be managed, and, as I pointed out yesterday, the Coal Commission will have to employ mineral agents and their servants in order to carry out the work. There is nobody else capable of doing it.
My right honourable friend the President of the Board of Trade, when he was discussing a similar Amendment in another place, gave a definite pledge that he would approach the Coal Commission and ask them to consider the qualifications of these gentlemen and give a preference to any who had experience of mineral agency in a technical or semi-technical capacity, and who, for not less than ten years prior to the passing of the Act, had been wholly or mainly engaged in that class of work. He is also going to suggest to the Commission that a Committee should be set up representing professional interests who will advise the Commission as to whom it would be competent to employ and so on. We understood that that had been satisfactory to the mineral agents as a whole. Your Lordships know, though perhaps it has not been made quite clear by my noble friend, that many of these gentlemen are only employed part time, and some of them for only a very small part of their time, whereas others are employed altogether. As I said, the price suggested by the Greene Tribunal was less the cost of the management of the coal for the simple reason that the management of the coal will go on and, as I pointed out yesterday, the management of the coal will have to be undertaken by these experts. Therefore I think my noble friend, on further consideration, will find that these gentlemen are really going to receive employment in most cases in future under the Coal Commission, and, in view of that and other considerations which I have suggested, I hope he will withdraw his Amendment.
§ LORD HASTINGS
The noble Earl has only dealt with a part of this case. When he says that mineral agents will stand a good chance of being employed he speaks nothing but the truth. I have no fault to find with what the noble Earl has said, but it is only half the story. These mineral agents have in a very large number of cases purchased the good will of 518 the business in which they are engaged. A man buys himself a partnership or he purchases, as do other professional men, the good will of that particular district, hoping that the employment which his predecessor enjoyed will pass to him. This is a matter of investment. When this Bill becomes an Act of Parliament these men will at a certain later date lose that employment, with no absolute certainty of re-employment—a reasonable chance of re-employment I grant you. But there is one thing absolutely certain, and that is they will have no good will to sell, because they cannot guarantee— and it would be quite improper if they were able to guarantee—that when they as individuals lose the temporary or even permanent employment they will be given under the Coal Commission, the person who has bought from them the right to succeed them will also be employed. Clearly that good will has gone.
There are many men in this profession who have invested substantial sums in this business, and unless you provide for compensation to meet that point you will be literally and actually depriving them of their investment. That is a point that has not yet been dealt with. It has not been, so far as I know, even raised. These mineral agents will have, if I may use an expression not entirely appropriate, to take pot luck in respect of their future employment. The probabilities are that if they are competent they will be offered employment by the Coal Commission. We grant that. We know that a sum amounting to £3,200,000 has been deducted from the mineral owners on account of management costs, and we know, as the noble Earl has described to the House, that these will be continuing costs. Whether it is going to cost the Coal Commission 4.47 per cent, of their gross income to run their business I do not know. My own experience of bureaucracy is that it is likely to cost 40.47 per cent., but that is by the way. I think myself there will be no saving. The office staff of the Coal Commission will see to that. We can leave that to them. But that does not deal with the point I have raised, and that is that this capital investment is not met by the provision which is under reference. It is a point that ought to be dealt with, and it is a point for which provision has not yet been made. It requires consideration, 519 and I beg therefore to support my coble friend's Amendment.
I listened with great attention to what the noble Earl said, and I would like to make one or two remarks upon it. In the first place, as to the question of whether miners are to be compensated who are put out of employment by amalgamations, I believe that the miners have their own unemployment insurance fund. In the second place, any question of amalgamation should properly take into consideration, amongst the expenses of the amalgamation, compensation for those persons who are hurt. I base my argument on the Railways Act of 1921, which definitely laid down that a solicitor who had been employed as a chief adviser by a railway company for five years continuously before the passing of the Act was a servant or officer of the company for the purpose of compensation. I submit that mineral surveyors who have been in continuous employment for seven years before the passing of this Bill are equally entitled to compensation. I do not care whether the Government receive the fund out of which these men should be compensated or not. What I want to know is who is going to look after the old confidential clerks, not even mineral surveyors, who will be displaced and whom this provision is going to wipe out? Some of them, some of the best brains, will be taken into the service of the Commission, but if there is any flotsam or jetsam flung aside by the Government in the furtherance of their policy it is surely the duty of the Government to see that these men do not suffer this great havoc which will be brought upon them. I do not feel inclined to withdraw this Amendment if any noble Lord will support me, because I think we should have a clear decision as to what is going to happen.
§ always contended that their businesses never come on the market, and therefore I do not understand the point put forward by Lord Hastings.
§ LORD HASTINGS
Is it not a fact that the medical profession never put their businesses on the market, yet they invariably purchase the goodwill of them? The case is on all fours.
I do not think any good business is ever put on the market. A man looks round for the person who is considered a desirable partner and tells him what has to be paid.
§ EARL STANHOPE
Naturally if a mineral agent has got a great reputation he builds up a great business, but, suppose he dies, what happens to the people in his employment? I might go into that business qualified as a mineral agent, but they might say I was of different calibre from the man I had replaced, and therefore no one might employ me. I have no claim and the people in my office would have no claim. It all depends on the individual. That is exactly what would happen with the Coal Commission. They will come along as big employers, and say, "Here is an extraordinarily able man who has had a great deal of employment as a mineral agent in this district. We shall take him on, and his clerks." But that there should be a guarantee that does not exist to-day is a matter the Government cannot accept.
§ LORD HASTINGS
I never asked for a guarantee that he will continue to be employed. That would be most unreasonable. What I asked for is that he should be compensated for the loss of the goodwill, which is a saleable commodity.
§ On Question, Whether the said new clause shall be there inserted?
§ Their Lordships divided: Contents, 58; Not-Contents, 59.521
|Northumberland, D.||Dudley, E.||Vane, E. (M. Londonderry.)|
|Portland, D.||Fitzwilliam, E.|
|Wellington, D.||Grey, E.||Bertie of Thame, V.|
|Lindsey and Abingdon, E.||Elibank, V.|
|Bathurst, E.||Liverpool, E.||Falmouth, V.|
|Bradford, E.||Malmesbury, E.||Hereford, V.|
|Cawdor, E.||Mar and Kellie, E.||Horne of Slamannan, V.|
|Dartmouth, E.||Scarbrough, E.||Ridley, V.|
|Aberdare, L.||Dunmore, L. (E. Dunmore.)||Merthyr, L.|
|Addington, L.||Elphinstone, L.||Middleton, L.|
|Addison, L.||Fairfax of Cameron, L.||Mowbray, L.|
|Balfour of Burleigh, L.||Fairlie, L. (E. Glasgow.)||Oriel, L. (V. Massereene.)|
|Belper, L.||Faringdon, L.||Rushcliffe, L.|
|Biddulph, L.||Foxford, L. (E. Limerick.)||Saltoun, L. [Teller.]|
|Cornwallis, L.||Gerard, L.||Sandhurst, L.|
|Cromwell, L.||Hastings, L. [Teller.]||Shute, L. (V. Barrington.)|
|Darcy (de Knayth), L.||Hindlip, L.||Stafford, L.|
|Daryngton, L.||Howard of Glossop, L.||Teynham, L.|
|Dickinson, L.||Lawrence, L.||Wigan, L. (E. Crawford.)|
|Doverdale, L.||Leconfield, L.||Wolverton, L.|
|Maugham, L. (L. Chancellor.)||Plymouth, E.||Fermanagh, L. (E. Erne.)|
|Sandwich, E.||Forester, L.|
|Hailsham, V. (L. President.)||Shaftesbury, E.||Gage, L. (V. Gage.) [Teller.]|
|Spencer, E.||Gainford, L.|
|Somerset, D.||Stanhope, E.||Holden, L.|
|Hunsdon of Hunsdon, L.|
|Bath, M.||Bridgeman, V.||Hutchison of Montrose, L.|
|Duiferin and Ava, M.||Davidson, V.||Ker, L. (M. Lothian.)|
|Zetland, M.||FitzAlan of Derwent, V.||Lamington, L.|
|Goschen, V.||Mancroft, L.|
|Airlie, E.||Halifax, V.||Marks, L.|
|Ancaster, E.||Hampden, V.||Rea, L.|
|Baldwin of Bewdley, E.||Mersey, V.||Rennell, L.|
|Bessborough, E.||Samuel, V.||Sackville, L.|
|Birkenhead, E.||Stanley of Alderley, L. (L, Sheffield.)|
|Iddesleigh, E.||Arnold, L.|
|Lindsay, E.||Basing, L.||Stanmore, L.|
|Lucan, E. [Teller.]||Belstead, L.||Strathcona and Mount Royal, L.|
|Midleton, E.||Bingley, L.|
|Midlothian, E. (E. Rosebery.)||Brancepeth, L. (V. Boyne).||Templemore, L.|
|Mount Edgcumbe, E.||Clanwilliam L. (E. Clanwilliam.)||Windlesham, L.|
|Munster, E||Woodbridge, L.|
|Onslow, E.||Clwyd, L.|
On Question, Motion agreed to.
§ THE EARL OF DUDLEY had given Notice of an Amendment to insert a new clause—"As to mode of investment of compensation payable to trustees." The noble Earl said: There has been tabled in the Marshalled List of Amendments this morning, standing in the name of the Lord Chancellor and the Leader of the House, an Amendment which, as far as I can see, covers this Amendment entirely, and I am very grateful to the noble Lords for having put down that Amendment. I think it covers this one in every respect, but I would just like to know whether proviso (a) is covered. If the noble and learned Lord will tell me when his Amendment is reached whether it is, I shall be quite content and not move this Amendment.
§ THE LORD CHANCELLOR
It must be considered whether the whole of this Amendment of the noble Earl is covered. I think it is, but before the Amendment standing in my name is reached there 522 will be lots of time, I think, to determine whether the noble Earl's Amendment is exactly covered, and if not he will no doubt inform me.
§ THE EARL OF DUDLEY
I am very grateful to the noble and learned Lord and will not move this Amendment.
§ Clause 8:
§ Rights and obligations arising from contract for sale to have effect in respect of interim period.
8. The rules of law and equity that regulate rights and obligations in relation to land that is the subject of a contract for sale in respect of the period between the date of the contract and the date fixed for completion thereof shall have effect in relation to the premises that are to vest in the Commission by virtue of this Part of this Act in respect of the interim period, subject to and in accordance with the following provisions, that is to say:—
(c) the contract for sale to be assumed for the purposes of the said rules shall be a contract providing expressly that the vendor should be entitled to the possession and enjoyment of the property until the date fixed for completion and to the benefit of the rents and profits thereof accruing up to that date, and that rents and profits accruing, or coal worked, before that date from
a mine of coal that is opened after the date of the contract should be treated in like manner as if the mine had been open at the date thereof.
LORD MIDDLETON moved, in paragraph (c), after "expressly," to insert (1), in order to add the following to the paragraph:
(2) that on completion the purchaser shall pay to the vendor in addition to a proper proportion of the rents and profits accruing to the date of completion a sum to be agreed or failing agreement to be determined by arbitration in respect of any arrears of rent and profits due to the vendor at such date.
§ The noble Lord said: The two Amendments standing in my name hang together. So far I think it cannot be said that the noble Earl in charge of the Bill has treated those who have moved Amendments with great generosity, but I hope he will realise that these Amendments are designed to help very considerably and that he will accept them. No new principle is introduced, and it is intended to follow the practice that usually obtains when real estate changes hands. I have had a good deal of experience myself in dealing with problems such as are bound to arise when coal property passes from its present ownership to the new Commission, that is, questions of outstanding rents due from present-day tenants. In my experience of disposing of real estate in England and Scotland I have in nearly every case had to make arrangements with the purchaser to deal with the question of rents outstanding. I have found in every case that there has been good will and that there has been no hardship involved to any one.
§ The rules of law and equity relating to such sales provide that the vendor is entitled to a proportion of the current rents and profits on the completion of the sale. If arrears of rent exist the vendor must recover from his old tenant as best he can and if he can. But it must be remembered that after the completion the vendor loses the right to distrain and the only remedy is to sue the tenant, a course which is probably most distasteful to him. If he takes such action he is bound to disturb the tenant, to the disadvantage not only of the tenant but also of the purchaser of the property. To avoid that the practice is for the purchaser to pay on completion an agreed sum for arrears of rent and for him to retain the sole right of dealing with the tenant. In this 524 case I submit that it is far better, in the interests not only of the royalty owners but of the Commission, the tenants and miners, that there should be an exactly similar course followed on completion of the conveyance under this Bill.
§ Every one of the parties, I think, will be liable to suffer for three reasons. Firstly, the royalty owners will have no power to enforce payment except by suing the lessees or by distraining on surface buildings which do not pass to the Commission, and it is easily seen what difficulties may occur. Secondly, the Commission will have to face the situation that the lessees may be forced into liquidation by any action taken against them, and they may be compelled to finance the lessees in order to enable them to carry on. Thirdly, the national interest must undoubtedly suffer if the lessees are unable to satisfy judgment given against them for arrears, and as a result the coal workings cease and the miners are thrown out of work. My Amendments provide machinery for dealing with any dispute that may occur between vendor and purchaser.
§ Under the existing system the owner always has the coal as an asset, and as an offset against any liability from his tenant. I think the noble Earl pointed out yesterday that it has been usual for the royally owner to temper the wind to the shorn lamb. He has dealt with his tenants generously and very often has arranged to remit portions of the rent or allowed them to be spread over a period if times have been bad. I think most royalty owners know that if they give their tenants a reasonable chance they will meet their obligations. Unless the Bill is amended in this way I think there will be friction which should be avoided. I can only foresee one objection which the Government might make and that is that they might be taking over unknown liabilities. But that, I think, cuts both ways, because if they do not accept these Amendments they may be facing unknown liabilities to enable tenants to carry on, when royalty owners have themselves, probably because they are not free agents, to take action against them.
THE LORD CHAIRMAN
The first Amendment is really a printing Amendment which necessarily follows if the second Amendment is agreed to. I think therefore it will be for the convenience 525 of your Lordships if I put the second Amendment on the Paper and if that is agreed to the other will be inserted automatically.
Page 10, line 8, at end insert the said new subsection.—(Lord Middleton.)
§ THE LORD CHANCELLOR
I fully admit the reasonable spirit and the good intention with which this Amendment has been moved, but there are difficulties which have finally led the Government to the view that they ought not to accept it. These difficulties I will attempt very shortly to state. The Commission, as we know, are going to buy a large amount of coal, all the coal in the country. This Amendment suggests that in addition to that they must buy something which is really not at all in pari materiato coal—namely, all the debts due by the existing lessees to the recent owners whose coal is being bought for rents due prior to the completion date. That includes not only rents which may have been foregone, but not in the legal sense discharged, some years ago. It includes the rents which will become due for an apportioned period up to the date of completion. It includes concessions in respect of rents which have not become legal in any way; and it involves that the Commission when they start their duties are going to have some species of trouble with a large number of their lessees as from the very beginning of their ownership and practically extending in respect of an apportioned purchase to every one who has a lease.
It is thought much better that the Commission should not interfere with relations which have existed between the owners of coal and their lessees prior to the date of completion. The owners know the position. They know whether certain sums were ever intended to be exacted. They have, no doubt, in most cases, a friendly feeling towards the tenants, and it is much easier for them to arrange on such terms as they may think proper for the payment of anything that may remain due from those tenants to their landlords. It is thought that it is very undesirable that the Commission should be saddled at the very beginning with a series of debts due in respect of rent as well as accrued sums and having to start the period during which they intend to act as good landlords with a source of trouble and difficulty. It is 526 for these reasons that it is thought better to leave the mineral owners to settle with their tenants as they think fit before the vesting date.
§ LORD HASTINGS
It is quite evident that the Government intend, so far as they can, to have the best of both worlds and to get everything that can be extracted out of this Bill. On this particular occasion, however, they have overreached themselves. There are quite a number of colliery tenants in arrear with their rent. The owner knows quite well that if he insists on the payment of those arrears he will put his colliery tenant into liquidation, and in his own interest he refrains from so doing. He does so knowing always that, if his colliery tenant ultimately is unable to recover, he has the worked coal on which to distrain. But directly you provide, as you do in this Bill, for the transfer of the coal without also the transfer of liability, you leave the owner with no alternative but to sue that colliery tenant for those arrears. That he must do, with the consequence that the Coal Commission, when they take over, will find themselves in possession of a certain number of collieries where the tenant company has, been in default and there is no tenant.
Therefore, in endeavouring to start fair, as the noble and learned Lord Chancellor said, and to leave the royalty owner encumbered with his own trouble and not to take over any of it—in other words, to collar the assets and leave the liabilities to somebody else, which is the principle of this Bill—the Government are proposing on this occasion to cut off their own noses in order to spite their faces, and to leave themselves with a certain number of derelict and defaulting companies, because they have forced the owners to take action which they have hitherto refrained from taking and will not now take unless the Government insist upon the letter of their Bill. I beg to support my noble friend behind me in pressing his Amendment.
It seems to me that the noble and learned Lord Chancellor has read into the words that I have tabled a meaning which certainly was not intended by those who drafted them. There was no intention that these words should render the Commission liable to have to take over all outstanding debts, remissions of rent, and 527 so on, that have taken place in the past. The intention is that they should examine each case on its merits; and it is not very difficult—it is quite easy—to examine the records of a colliery company and see if they are stable or unstable, if they have been in the habit of meeting obligations fairly or not. I wonder if the Lord Chancellor could suggest that it would be possible to introduce this Amendment in a slightly different form in order that we may avoid great hardships to all concerned, including the Commission and the nation generally.
§ THE LORD CHANCELLOR
My point is that you very often cannot tell what arrears of rent exist. In a case where trade has been bad, everybody who is concerned with coal knows that the generous owner does not insist on the whole of the royalties, just as anybody who owns any land knows quite well that in bad times he does not ask his tenant to pay the whole or even sometimes a part of the rent due. But as a rule there is no deed executed; there is no circumstance by which in law the tenant has been absolved from his liability. There are all sorts of little things that may take place between a landlord and a tenant which make it exceedingly difficult for a stranger coming along to settle what is properly due from that tenant. I do not know any words which will really settle that. If the only thing called for here were a payment of a proportion of the rents and profits accruing since the date of the last quarter-day or other days on which rents and profits were payable under the lease, the Amendment would be of very little harm, and I think I might say it would be favourably considered. But if you are asking the Commission, when they come on the scene, to go back I do not know how many years to ascertain whether or not a particular sum was due in a particular year from the tenant, and take that value from the vendor, and then have an agreement as to how much should be paid in respect of it, I think that is a thing which ought not to be put upon the Commission and to which I cannot assent on behalf of the Government.
I seem to remember, I think it was in the Second Reading debate, that the noble and 528 learned Lord then on the Woolsack likened the action of the Government in taking over the coal industry to taking over a grocery business.
If the Government were in this instance taking over a grocery business, they would value not only the assets but also the liabilities, and they would have to take over both the assets and the liabilities. What my noble friends are asking is not that the liabilities which have been abandoned should be assessed for this purpose, but that the actual and true liabilities should be assessed in this operation in the same way as if you were taking over any other business. I feel that my noble friends have put up a very strong case, and I urge the Government in this instance to see if they cannot find a form of words which would meet it. This Bill bristles with anomalies, and I think this is an anomaly in itself. I venture to hope that the Government will see their way to meet the royalty owners in this instance and to deal with them fairly, as they ask them to do.
I can only say that I am extremely disappointed that it has not been possible for the Government to meet me at all. I am afraid that what will happen will be that, when the colliery lessees become the tenants of the Commission, they will find that it is a very different thing being the tenants of a Government Department from being the tenants of the present royalty owners, and I do not think they will enjoy their future career.
§ LORD CROMWELL
If I might say just one final word in respect of this Amendment: some indication has been given by the noble and learned Lord Chancellor that he might accept an Amendment which limited the time to six months. Would he give an indication that he might increase that six months to so many years, to see whether he could meet the Amendment? That perhaps might be acceptable to the noble Lord.
§ THE LORD CHANCELLOR
I do not think there is any chance of those who are instructing me accepting anything but a very short period, which might perhaps 529 be assented to. That point might be considered later on. At the moment, however, I can hold out no hope that anything but a small concession might be made with regard to this Amendment.
A small concession is of no use, because that is already dealt with under the rules of equity, and so on, which are mentioned in this clause. I do not intend to press this Amendment, but I can only say that I am very disappointed.
§ Amendment, by leave, withdrawn.
§ Clause 8 agreed to.
§ Clause 9 agreed to
§ Clause 10 [Separation of vested and non-vested premises that are demised together by a subsisting lease]:
§ THE LORD CHANCELLOR moved to leave out Clause 10, and insert the following new clause:
§ Apportionment of rent and determination of questions on severance of subsisting leases.
§ 10.— (1) In the case of every coal-mining lease subsisting on the vesting date in the case of which either—
- (a) a severance of the reversion immediately expectant on the lease is effected, by the vesting in the Commission by virtue of this Part of this Act of that reversion as regards a part only of the premises which are comprised in the lease; or
- (b) a severance of the interests arising under the lease is effected, by the vesting in the Commission by virtue of this Part of this Act of those interests as regards a part only of the premises which are comprised in the lease and the immediate reversion in which is vested in the Commission;
§ (2) In the case of every coal-mining lease subsisting on the valuation date in the case of which such a severance as aforesaid is effected as aforesaid, the Commission shall pay the costs reasonably incurred by any person in connection with any application to the Court that may be requisite for the purpose of determining any question as to the rights or liabilities of any person under the lease (including any question as to the apportionment to be made under the preceding subsection) that arises in consequence of the severance;
§ Provided that the Court may direct that the Commission shall not be liable to pay any such coats as aforesaid incurred by a person who appears to the Court to have made an 530 application or prosecuted proceedings thereon unreasonably, or to have been guilty of any such unreasonable failure to agree with the Commission or with any other party, or of any such negligence or default, as to disentitle him to payment of those costs, and, if it appears to the Court that the necessity for the determination of the question raised on an application arose in part only in consequence of such a severance as aforesaid, the Court may direct that the Commission shall be liable to pay a proportionate part only of such costs as aforesaid.
§ (3) A Regional Valuation Board shall cause proper records to be kept of apportionments of rent made by them for the purposes of valuations made by them and of any alteration of any such apportionment made by a referee on a review of a valuation made by them, and any entry in any book or other document kept for the purposes of this subsection, or a copy thereof upon which is endorsed a certificate purporting to be signed by a person authorised in that behalf by the Board stating that the copy is a true copy, shall in all legal proceedings be evidence of the entry and of the apportionment referred to."
§ The noble and learned Lord said: The new Clause 10 which stands in my name on the Paper is an endeavour to meet the views of a number of people who are interested in the measure, and in particular a number of owners of coal. The old clause required a rather complicated arrangement under which separate leases of the premises would have to be framed, granted and executed in a case where the premises were such that they included both vested and non-vested land or coal, the normal case being that in which the owner owned the surface of his land as well as the coal underneath, and it was said, and I think with much force, that although there is a severance the law constantly provides for severance on these occasions when no coal is involved at all. On consideration the Government have been advised, and have come to the conclusion, that the whole idea which they put forward in Clause 10 was one which involved unnecessary trouble and complication, and that it would be sufficient to provide for the apportionment of the land and for the determination of questions of severance of the existing leases.
We had to put something of the sort in, although it might have been left to the Common Law, because, amongst other reasons, if there is a coal-mining lease in existence without severance being effected the Commission have got to pay the costs reasonably incurred by any
person in taking proceedings for ascertaining what his rights under the lease are as a result of the operation of the Bill. For that reason, and perhaps some other technical reasons, it was thought better to provide specifically here that in such a case as we are dealing with
the rent reserved by the lease shall be apportioned, and in all cases in which an apportionment of that rent is required in relation to the like severance for the purposes of a valuation under the Third Schedule to this Act, the apportionment under this subsection shall be made on the basis of the apportionment made for the purposes of that valuation.
I do not think there is anything else which it is necessary to call to the attention of your Lordships. It is an attempt to carry out in simpler form what was originally in Clause 10, following suggestions made by a number of owners of coal. I beg to move.
Leave out Clause 10 and insert the said new clause.—(The Lord Chancellor.)
§ LORD MIDDLETON had given Notice of an Amendment to the proposed new clause—namely, after paragraph (b) in subsection (1), to insert "and the lease does not reserve separate rents for the premises vested in the Commission and those not so vested." The noble Lord said: I think those with whom I am associated certainly prefer Clause 10 in its new form to that in which it stood before, but I suggest that the clause requires a certain amount of amplification so as to prevent the difficulties that I think must arise hereafter. This clause makes it obligatory upon the Regional Valuation Board to apportion the rent reserved by the lease. Such a step is unnecessary in cases where the lease already reserves separate rents for the vested premises, that is, the coal, and the non-vested premises, that is the surface, and /or any associated minerals which the Commission do not acquire. To meet this objection my Amendment has been framed.
§ It is assumed that under the new clause in cases where a mineral lease reserves a royalty of x pence per ton in respect of the coal, and also reserves a further payment of y pence for every ton of coal worked, in consideration of which payment the lessee is granted the right to let down the surface, no apportionment in such a case would be necessary, 532 and that the Commission would after the vesting date receive the x pence per ton in respect of the coal, and the surface owner would continue to receive the y pence per ton in respect of the right to let down the surface. In cases, however, where there is a single royalty reserved under the lease and in arriving at that royalty the parties to the lease had in mind that part of it would represent the consideration payable by the lessee for the right to let down the surface, it is not clear under the new clause whether such a rental would fall to be apportioned by the Regional Valuation Board or whether it would all be treated as a rent from the coal, which after the vesting date would be payable to the Commission. I beg to move the Amendment standing in my name.
Amendment to the proposed new clause moved—
After paragraph (b) of subsection (1) to insert: ("and the lease does not reserve separate rents for the premises vested in the Commission and those not so vested").—(Lord Middleton.)
§ THE LORD CHANCELLOR
I think there is great weight in what the noble Lord has said, and it would probably make the clause which I have proposed clearer if the words he has suggested were put in, or the substance of them. The only point I wish to reserve is this. I am not quite sure that he has suggested inserting the words in exactly the right place, or that the words are exactly what a draftsman would require. The substance of what he suggests I willingly accept, and perhaps he will allow us on Report, if necessary, to alter the place in which these words are to be put in, or do something of that sort, and that he will not think he is being improperly treated.
I am very grateful to the noble and learned Lord. I have moved a great many Amendments in this House, and this is the only one that has been accepted.
§ Clause 11:
§ Powers of Commission for consolidation of leases before the vesting date.
(7) In this Section and in the Fifth Schedule to this Act—
(a) the expression "colliery area" means an area comprising all parcels of coal which are capable of being conveniently and economically worked to the shafts of a single colliery, and in respect of which the same person is working lessee;
§ LORD GAINFORD moved, in paragraph (a) of subsection (7), after "single colliery," to insert "or of a group of neighbouring colllieries belonging to the same working lessee." The noble Lord said: I understand from my legal advisers that this is really a drafting Amendment. The purpose is to enable the Coal Commission to consolidate the leases not merely of a single colliery but of all the collieries of a company in the same neighbourhood into a single lease. The principle of this Amendment has been accepted by the Government, and the wording of the clause was modified by Amendments on the Report stage in another place, but the principle, I am informed by my legal advisers, has not really been achieved because in subsection (7) "colliery area" is still defined as "an area comprising all parcels of coal … capable of being … worked to the shafts of a single colliery." The main object of the consolidation of leases is to merge all liabilities to minimum rents in respect of individual parcels of coal into a single liability in respect of the whole of the coal, in the interests of more economic working.
Page 14, line 2, after ("colliery") insert ("or of a group of neighbouring collieries belonging to the same working lessee").—(Lord Gainford.)
I should like to support my noble friend. The Amendment would have the effect of simplifying the consolidation of leases under the Coal Commission, it would merge all liabilities for maximum rents on individual parcels of coal into a single liability, and it would be in the interests of more economic working. My noble friend Lord Gainford has pointed out that it appears that the Government intended to accept the principle of this Amendment, but the clause as now drawn still does not quite meet the case. I would suggest that this Amendment makes it more clear that the Coal Commission would have power to consolidate the leases, not merely of a single colliery, but of all the collieries of a company in the same neighbourhood into a single lease.
§ THE EARL OF MUNSTER
I am advised that this clause states that if you consolidate any of the leases of a colliery you must also include the leases of all its leasehold coal which is workable to the same shaft. My noble friend is anxious that where there is a colliery company operating more than one colliery in the same neighbourhood it should be able to get a consolidated lease comprising all the leases held by that company, even though the coal is not all worked to the same colliery. There is no objection to this proposition, either by the Government or, as far as I am aware, by the royalty owners or the Mining Association, and my advice is that the clause already permits exactly that which my noble friend desires to see done.
§ LORD GAINFORD
I know that the Government have advisers, and the Mining Association have also advisers. But I think I may take it that the matter will be looked into—it is really a drafting point—and if there is substance in my point it will be dealt with on Report. I beg leave to withdraw.
§ Amendment, by leave, withdrawn.
§ Clause 11 agreed to.
§ Clause 12:
§ Right of freeholder in possession of coal to lease thereof.
§ 12.—(1) A person carrying on the business of coal-mining immediately before the vesting date, who is then beneficially entitled (whether or not subject to a mortgage) to the entire fee simply in coal or a mine of coal that is not subject at that date to any coalmining lease, shall have the right, if he has made an application in writing in that behalf to the Commission before the vesting date, to a grant from the Commission of a coalmining lease comprising any coal or mine of coal specified in his application to which he is so entitled and any property and rights that vest in the Commission therewith:
§ Provided that a person shall not be entitled under this section to a lease the grant of which would interfere with the exercise of a right granted by a working facilities order, or with the use or exercise under a coal-mining lease of any property or right comprised therein.
§ (2) A lease granted under this section shall be granted for such a term, commencing on the vesting date, as the person entitled to the lease may require, not being longer as regards the coal comprised therein than may be reasonably requisite for enabling that coal to be worked out, and subject to conditions with respect to rent and otherwise not more onerous to the lessee than the conditions customary in the district or, where there are no customary conditions or the customary conditions are not applicable, than the conditions 535 to which a person not entitled to the benefit of this section might reasonably have been expected to agree, and the Commission may grant a lease to the person entitled on conditions less onerous than the conditions aforesaid where it appears to them that the situation of that person in respect of the business of coal-mining carried on by him would otherwise be unduly unfavourable as compared with his situation in that respect as owner of the fee simple in the premises.
§ (3) The provisions of the Sixth Schedule to this Act shall have effect with respect to the granting of leases under this section, and the substitution or variation of securities in the case of premises that were subject to a mortgage.
§ VISCOUNT BERTIE OF THAME moved, after "mortgage" in subsection (1), to insert "or other charge." The noble Viscount said: If your Lordships will look at the clause you will see that a person carrying on the business of coalmining immediately before the vesting date, who is then beneficially entitled (whether or not subject to a mortgage) to the entire fee simple in coal or a mine of coal that is not subject at that date to any coal-mining lease, shall have certain rights. Your Lordships will note that there are other forms of charge, such as a settlement, and I cannot see why a person carrying on a business subject to a settlement should not be in the same position as a person who carries on a business subject to a mortgage. It may have been deliberately done—I do not know—but I should be very grateful if one of the triumvirate who are conducting the Bill would explain the matter or, better still, accept the Amendment.
Page 14, line 19, after ("mortgage") insert ("or other charge").—(Viscount Bertie of Thame.)
§ THE EARL OF MUNSTER
I understand that the Lord Chancellor proposes at a later stage of this Bill to introduce an Amendment defining the meaning of the word "mortgage." If my noble friend will wait till that stage the Lord Chancellor's Amendment will probably meet this point.
§ VISCOUNT BERTIE OF THAME
I am sure I shall be satisfied with what the Lord Chancellor does on Report. I beg to withdraw.
§ Amendment, by leave, withdrawn.
§ VISCOUNT HORNE OF SLAMANNAN moved, in subsection (1), after "there 536 with," immediately preceding the proviso, to insert" and any person so obtaining a lease under this section shall take in lieu of compensation as provided by Section six of this Act a lease for the term and subject to the conditions herein mentioned save only that the rent annually payable thereunder throughout the said term or any renewal thereof shall be one peppercorn." The noble Viscount said: This Amendment concerns the interests of the man who owns the coal in fee simple and also works it as a colliery proprietor. The proposal of the Bill in regard to a man who is in that position at the time when the Bill passes is that there should be granted to him a lease of the coal that he had previously owned, for such term of years as it would be necessary to work the coal out, upon conditions which would be the ordinary conditions of the district; that is to say, that the royalty which would be charged upon him would be such as was the ordinary royalty in the district to which he belonged, and the conditions would not be more onerous than those which would be imposed upon others. He would himself of course receive compensation for the coal as owner in the same way as any other owner of coal would be compensated, that is to say, probably by some number of years' purchase or some share of what might be granted under the regional valuation out of the global sum based upon fifteen years' purchase of the royalties of the country as a whole.
§ Now I would ask the Committee to consider who these people are who are to be thus dealt with. They are to some minor extent people to whom the coal has come down over many generations and who have started to work their own coal. I venture to say with regard to these people that there cannot at least be pointed at them the finger of scorn which has been very ordinarily used upon platforms in this country with regard to people who are supposed to be doing nothing but only sitting still to derive a large royalty rental from the coal which they own. They are people who, having owned the coal, have taken part in the development of their own coal and have embarked their finances upon such enterprises, and within the borders of this House I see to-day some noble Lords, friends of my own, who have imperilled their fortunes in their efforts to develop 537 the coal industry of the country, using their own coal. But far and away the larger portion of the people who are in the position which is dealt with under Clause 12 are colliery proprietors whose business is in the main to develop colliery industries and who have purchased coal for the purposes of their own enterprise. These are people who certainly ought to enjoy the favour and commendation of the Government. They have done on their own part and at their own expense the very thing which the Government say they are attempting to do by this Bill. They indeed have been engaged in a process of unification of the coal, without expropriation. They have been doing that which the Government express a great desire to do—to have the coal worked without undue restrictions. They have acquired the coal in order that from right or left they could not have any difficulties in proceeding through barriers, and also that they would be in a supreme position with regard to the surface.
§ It has been said repeatedly in connection with this Bill by the Government spokesmen—and I think that without saying it they could not have had any chance even to begin an argument in this House—that their sole desire is to give fair compensation to people who are expropriated. Now there is only one way, as I see it, by which you can give fair compensation to a man who has purchased the coal for the purpose of working it, and that is by allowing him to go on working that coal until it is exhausted, without having to pay any rent for it. There is no other way in which you can genuinely compensate a man who is in that position. But supposing the terms of this Bill apply to these people, as undoubtedly they do in present circumstances, what is going to be the result? I could give you out of my own knowledge, from communications which have been sent to me, one or two definite examples of what will happen.
§ There is a case of a colliery company who could not obtain any lease of their coal upon a royalty basis but were compelled to purchase in order that they could work the coal. They had not the funds with which that coal could be purchased, and they had to raise them by means of debentures secured upon the colliery property and raised at five and a half 538 per cent., which was quite an ordinary rate for a debenture upon colliery property at the time. What is going to be the position of such a company in these circumstances? The fact is that by way of interest upon such compensation as this Bill would provide for them they could not nearly meet the amount that they have got to pay on their debenture bonds. I take another example. It is that of a very large company which has purchased a large amount of coal, and their estimate is that the difference between what they would have to pay upon royalties after the coal has been acquired by the Coal Commission—royalties based upon the ordinary district rates—and what they would get in the shape of interest upon the compensation money, would be as much as £7,000 a year. I am told of another instance in which the difference would be as much as £20,000 a year.
§ I give you, as a final illustration, what has taken place in connection with one very large colliery company. Its name is very well known in this House, and if anybody thought it necessary I would mention it. This company has been one of the most enterprising companies we have within our shores, and, for the very purposes which the Government have laid out as a counsel of perfection in the Bill, they have acquired very large amounts of coal. It is difficult, in fact it is impossible, to tell what the precise price is that they have paid for the coal itself, because they acquired it in many cases in company with colliery plant, and no division has been made as between what they paid for the plant and what they paid for the coal. But on that coal, taking the average of the last five years, they have been paying for the purpose of Mineral Rights Duty and Welfare Fund on the equivalent of £43,000 a year. Multiplied by fifteen years, which is the figure on which the estimated value of the coal for the purposes of the global sum has been based, that would amount to something like £650,000; but the actual value of the coal which these people have purchased is, on the estimate, £1,500,000, in respect of which they are going to receive in compensation £650,000.
§ I submit to your Lordships that that situation is intolerable, and it is entirely contrary to the principles laid down for the Coal Commission, because one of the 539 things enjoined upon the Coal Commission is that they shall have special regard to the interest and efficiency of the coal industry. How are you going to make the coal industry efficient if you are going to rob it of a very large portion of the capital on which it has to work? This is not a small matter. It concerns one-eighth of all the coal in the country, and therefore I submit to your Lordships it is a matter that has got to be dealt with, with great gravity and due regard to the interests not merely of these particular companies, some of which would be rendered bankrupt by the results of this Bill, but with due regard to the interests and efficiency of the coal industry and, by and large, to the interests of the country itself.
§ By the Amendment which I am proposing no single person is going to suffer any disadvantage. It does not deprive any other royalty owner of any portion of that which would come to him as the result of this Bill. It leaves his compensation, such as it is, entirely intact. But it would do something like justice towards this body of people who form so large a portion of the coal industry. The Amendment which I am proposing has the effect I have described—namely, that these people, while their coal no doubt vests in the Coal Commission along with all the other coal in the country, shall get a lease by which they can work it to the point of exhaustion, but that at a peppercorn rent. There follows upon that one other circumstance. Of course, as the people working the coal, and as they are at present working their own coal, they are liable to pay the Mineral Rights Duty and also to what is called the Miners' Welfare Levy. One would not seek to exempt them from these impositions. They would be required to bear them as before, and therefore there follows a consequential Amendment in my name to the effect that they should still be so liable.
§ I hope I have been able to apply an impartial mind to this topic. Perhaps in some cases, in one or two of my speeches on this question, I may have been unduly rhetorical, but it is impossible to conceive a situation which, as it seems to me, could create greater injustice than would result from the Government's proposals with regard to the people who are known as the free- 540 hold owners of coal. I submit to the House that this injustice has got to be remedied and that the House should take upon itself the responsibility of doing so.
Page 14, line 27, at end insert the said new words.—(Viscount Home of Slamannan.)
§ EARL STANHOPE
My noble friend painted in such glowing colours the good works of these colliery proprietors that I almost saw the halo beginning to grow round his head as their representative. He told us he thought there was only one way to meet this situation. Perhaps there are more. I observe that his Amendment would enable any mineral owner to sell his coal at any time up to the vesting date to the colliery company, and that would automatically become freehold coal and get the advantage of his Amendment. That obviously would be a situation that I do not think he had quite visualised, because if colliery companies were prepared to give a larger sum than royalty owners would get under the Commission that would be a way of getting round the Bill.
§ VISCOUNT HORNE OF SLAMANNAN
I am perfectly willing that any provision should be made to prevent abuses. It is the main principle I am fighting for.
§ EARL STANHOPE
That is exactly what I expected my noble friend to say. We have tried to meet the situation to some extent in another place, and Amendments were moved by my right honourable friend the President of the Board of Trade to try to leave the working proprietors very much in the position in which they are to-day. Some of the difficulties in regard to accepting my noble friend's Amendment are these. You have to change the actual global figure, because if you are going to leave the working proprietors out of the coal which is to be taken over by the Commission naturally you must alter the price. That is obvious. You get into difficulties with regard to valuation, but perhaps the greatest difficulty of all is in regard to this House. If my noble friend moves the Amendment which he has on the Paper to re-impose Mineral Rights Duty and Miners Welfare Levy I am not at all certain that would not be considered a Privileged Amendment in another place, and I am told it would certainly involve a Financial Resolution.
541 We think there is perhaps another way of meeting this suggestion, which is that put down by my noble friend in subsequent Amendments—that is to say, that the Coal Commission, in assessing the rent, should take into consideration the price that has been paid by the colliery proprietor for the purchase of the minerals, and his company should have a right to receive a rent and not merely the opportunity of getting it—in other words, that the word "may" should be changed into the word "shall." But we feel the words which my noble friend suggests later on—that is to say, his next three Amendments, those to leave out of subsection (2) "with respect to rent and otherwise," to substitute "shall" for "may" and to leave out the word "unduly"—perhaps do not quite meet the situation which he and I wish to meet. I am quite prepared to accept those Amendments now, but we should like to have further consideration of this matter on a later stage of the Bill, because we think, in order to carry out the objects which my noble friend has in mind, and which the Government have in mind, it might be necessary to insert words something of this character:The Commission shall grant a lease to a person who is entitled to it on conditions which will give full consideration to the terms on which that person acquired the coal.I only throw that out as a suggestion, because the Government have not really had sufficient consideration to decide whether actually the words I have read out fulfil the object. If my noble friend will agree that we are really doing our best to meet his views and the situation which he has described, I think there ought to be no difficulty between us in arriving at some Amendment which will enable this Bill to be altered so as to do that. Whether the actual words I have read out will do, perhaps neither he nor I would at the moment be prepared to say, but that is the general intention we have in our mind. I think perhaps my noble friend will feel that we have tried to meet him on this matter.
§ VISCOUNT HORNE OF SLAMANNAN
I am very much obliged to my noble friend for the way in which he has met my suggestion. I gather that the Government are as much impressed with the difficulty of this situation as we are. If he is willing to meet us to the fullest extent—if I am correct in thinking that—then undoubtedly I have no wish to insist on any particular form of words, 542 nor indeed upon any particular form of procedure which might involve the embarrassments of a Financial Resolution in the House of Commons. If that can be avoided, and we can really put the matter straight in this House by an Amendment which we are competent to make, then I would willingly conform to that suggestion. But I do not wish that there should be any doubt about this; if nothing could be done to put this right except by going back to the House of Commons and having a Financial Resolution proposed for that purpose, I would venture to insist that that course should be followed rather than that the injustice perpetrated by the Bill should continue. But I take it that my noble friend is really in the same mind as I am on the subject, and if that is so then I am delighted that we should consort together to find the proper form of words in order to remedy an injustice.
§ LORD GAINFORD
I want to say just one or two words. This to me is the most vital matter to collieries of anything in the whole Bill. I have dealt with it in speeches that I made in your Lordships' House. If the position is going to be made by the Government satisfactory to the owners of freehold coal so that they are not going to be any worse off than they are at the present time in regard to the transfer of their coal from the present royalty owners to the Commission, then I think we can agree not to proceed with the Amendments which are on the Paper; but I do feel that we ought to consider very carefully the words of the Government which are going to redress this grievance which is felt by all freehold colliery owners. My suggestion is that we should have the opportunity forthwith, if we could, of considering exactly what the Government proposals are in actual words. We do not want to lose a Committee stage of the debate if the Government's words are not satisfactory. I wonder whether the Government would in these particular circumstances be prepared to postpone the further consideration of this clause for a few days while we are debating the other points, and let us have the opportunity of considering a Government Amendment? I do not know whether that procedure would be acceptable to the Government, but I believe it might be asented to by the whole House. In that way we would have a full opportunity 543 of considering the Amendments of the Government, or be able to confer with the Government in regard to the proposals and of trying to reach an amicable arrangement so that the injustice which we feel is going to be done by the Bill as it now reads may be removed.
§ THE MARQUESS OF LONDONDERRY
I agree with my noble friend who has just spoken that this point is perhaps one of the most important in the Bill. It is really surprising to me, if I may say so, that the Government do not seem to have appreciated the great importance which underlies this matter. There are a great many collieries which have looked ahead, and far ahead, and have acquired coal for the purpose of working it themselves for a long period of years to come, and it seems to me that those particular owners of free coal deserve very special consideration from the Government. I do not know how far their foresight in acquiring the coal will come within what the Government have in mind as marketable coal and what is not marketable, but I do feel that in the position in which those owners are placed by this Bill it would hardly be satisfactory that they should be subject to all those formalities that they may be called upon to submit to by reason of the Bill as it now reads. If those who have looked ahead and have taken this matter into their consideration for a long time past are penalised by this Bill, they will have a proper cause of grievance. I say "penalised," but when listening to the Lord Chancellor I noticed that through all his speeches he has used the expression "scaling down." The noble Earl, Lord Dudley, says he does not know whether it is scaling up or scaling down, but I feel that in this matter in which colliery owners have shown proper foresight they should be left in the position they are in at the present moment.
§ THE EARL OF DUDLEY
I do not want to take up more time than is necessary, but I do hope that any words which are agreed upon by the noble Viscount, Lord Home, and the Government will embody the principle that individual companies who have exercised the foresight which they have been encouraged to do by successive Governments since the War, and have bought their coal in order to regulate its working in the best possible manner, should 544 not suffer financial loss in any way. We are speaking now on behalf of a very much larger number of persons in this country than we have been representing so far. So far we have been representing only the poor wretched royalty owners whom every one admits have been the political stalking horse of this country for many years past, but now we are representing every colliery debenture holder and shareholder—and they are a very large number—who are going to suffer.
I would like to raise one more point which I believe has not yet been raised, and that is that I do not think the Greene Tribunal when assessing the global figure took into consideration the fact that the freehold coal owned by colliery companies must be of greater value than the coal owned by individual owners, because generally speaking individual owners do not know for certain whether their coal is going to be worked or not. It depends entirely on the leases they are able to contract with colliery companies. But colliery companies owning their freehold coal know for a certainty that that coal is going to be worked. Therefore it must have a higher value. In the one case you are selling the horse without the cart, and in this case both the cart and the horse. I do not know whether that is a proper simile, but I hope your Lordships will see what I mean. The coal must have a higher value because they know for certain that it will be worked. Therefore that coal owned by colliery companies has a potential value, and a very large potential value, because unless something disastrous happens to the colliery company it will of a certainty be worked.
Here is a case where we can certainly say that the coal has been assessed by the Greene Tribunal without any possible relation or regard to the price paid for it. It does seem to me to be most iniquitous if colliery shareholders are allowed to suffer by reason of your Lordships not passing this Amendment, because those in charge of the management of the colliery did the very thing which they have been encouraged to do by Governments ever since the War; that is, to acquire their own coal and work it under proper conditions. I trust your Lordships wil insist that this principle shall be maintained in any words agreed upon, and that there will be no financial 545 loss whatever to the shareholders of colliery companies.
§ EARL STANHOPE
I cannot go into any detail at the moment, because this is a matter of general principle. I do not know whether your Lordships would like now to adjourn for dinner and that immediately after dinner I should move that this clause be considered after Clause 54 of the Bill, or whether you would like me to move that now. It might well be that conversation outside the Chamber might result in a general agreement. I do not mean that we could settle the exact form of words, but it might be seen that the Government really intend to carry out what your Lordships wish us to do.
§ LORD GAINFORD
I think it would be better to move that the clause be postponed until we come to the Schedules.
§ EARL STANHOPE
Very well, in that case I will move that consideration of Clause 12 be postponed until after the consideration of Clause 54 of the Bill.
§ VISCOUNT HORNE OF SLAMANNAN
In those circumstances I beg leave to withdraw my Amendment now, but I take it that I shall have an opportunity of moving it again later when this clause is considered.
§ Amendment, by leave, withdrawn.
§ Moved, That the further consideration of Clause 12 be postponed until after consideration of Clause 54 of the Bill.— (Earl Stanhope.)
§ LORD HASTINGS
Might I ask the noble Earl if he could possibly assist us by saying that the discussion to-night will not be continued later than eleven o'clock? A number of noble Lords have to work in the morning and those who, like members of the Government and ourselves, have to deal with this Bill find twelve o'clock a really unreasonable hour.
§ EARL STANHOPE
My difficulty is that we are now only on page 7 of an Amendment Paper of 31 pages. We must try to get through before we adjourn for Whitsuntide. Both Tuesday and Thursday next week are already very full days, and Wednesday is a day upon which I fancy your Lordships would prefer to be occupied in another capacity. I am afraid I have had to ask your Lordships to 546 attend with great regularity and for long hours lately, and I suggest that both the members and the officers of the House should have a holiday on Wednesday if possible. That only leaves to-morrow and Monday. Unless we can make really good progress to-day it may be necessary to sit extremely late to-morrow and also on Monday to get through.
§ LORD HASTINGS
The House of Commons gave fifteen days to the Bill. Surely if they could find that length of time with the immense amount of business before them, more time ought to be found in this House than the noble Earl proposes.
§ EARL STANHOPE
I think this is already the fifth day, and there are more to follow, so that we should not fall very far short of the House of Commons' number of days. But I am in your Lordships' hands entirely on this. I suggest to my noble friend opposite that, if we can manage to adjourn round about eleven o'clock, no one will be more grateful than I shall. But let us see what progress we make, and do our best to get a good way on with the Bill before we adjourn to-night.
§ [The sitting was suspended at ten minutes before eight o'clock and resumed at five minutes past nine o'clock.]
LORD TEYNHAM had an Amendment on the Paper to insert, after Clause 12, the following new clauses:
.On and after the vesting date if a lessee gives notice in writing to the Commission of his desire to renew a lease of coal or mines in force at that date not less than six months before the date of the termination prescribed therein the consent of the Commission to such renewal on reasonable terms and conditions shall not be unreasonably withheld and any question whether such consent is being unreasonably withheld or whether the proposed terms and conditions or any of them are reasonable and what other terms and conditions are reasonable shall, if the lessee so require, be referred to arbitration and the lessee shall be entitled to a renewal of his lease on such terms and conditions as may be found in such arbitration to be reasonable.
.On and after the valuation date a clause shall be included in all leases of coal or mines granted by the Commission providing for arbitration in the case of any dispute between the Commission and the lessee in respect of any provision of the lease or any matter arising therefrom.
§ The noble Lord said: I beg to move these clauses on behalf of the noble Lord, Lord Gainford, in whose name they stand 547 as well as my own. The purpose of the Amendment is to give security of tenure to the present holder of a lease of coal. Without this Amendment the lessee under this Bill would have no security that the leases of the minerals on which the whole value of his undertaking depends will be renewed on expiry, or even will be renewed on equitable terms. As the Bill stands, there is no appeal from a decision of the Commission as to the terms on which they will renew a lease, or from a refusal to renew a lease, or in the event of the Commission declining to give any decision. I need hardly point out that this last aspect of the matter is one of very great importance to a colliery undertaking, which is faced with the necessity of very considerable capital expenditure and must therefore have a decision in regard to the renewal of the lease some years before its current lease expires.
§ Under present conditions, if a royalty owner refuses to renew a lease the lessee can make application to the Railway and Canal Commission, who, under the Mines (Working Facilities and Support) Act, 1923, have the power of granting the lessee the right to work the minerals, if they think fit, by exercising compulsory powers over the royalty owners. I do not suggest that every colliery lessee should have an absolute right to the renewal of his lease, but I do maintain that he should have a presumptive right, and that if he fails to obtain a renewal on terms that are reasonable he should be entitled to take the matter to arbitration, and the provisions of the Arbitration Act should apply to such arbitration. I should like to make it clear that the proposal set out in the Amendment is not contrary to the usual practice, as an arbitration clause has always been included in coal-mining leases.
§ As regards the second of the two proposed new clauses, it would give a right to the lessee, in the case of all leases granted in the future by the Commission, on and after the valuation date, to appeal to arbitration in the case of any dispute with the Coal Commission as to any provision of the lease or any matter arising therefrom. The two new clauses make it possible for an appeal by the lessee to an independent body, such as the Railway and Canal Commission, against the findings of the Coal Commission.548
Page 15, line 20, at end, insert the said new clauses.—(Lord Teynham.)
I hope your Lordships will accept the Amendment, as it is framed in the same spirit as the last Amendment, which was withdrawn on the understanding that some words would be found to meet it. This follows the same principle, because it attempts to leave the coal companies in the same position as they are in at the present time. That is the principle which I think is in the mind of the House as far as possible to maintain in this Bill. A presumptive right to the renewal of the lease has been more or less established, within the limits of arbitration, since the Act of 1923. Before that date it was possible for any owner, if he so wished, to refuse a lease, or only to grant it upon unfavourable and onerous terms. The Act of 1923 was passed for the purpose of rendering that impossible. Under this Bill the Act of 1923 is revoked, and the coal company will be in a worse position than before the Act of 1923, because there will be one big landlord to deal with and nor several small ones. I think your Lordships will agree that the main object of the Bill is to bring improvement and better conditions to the coal trade, and we should be very careful to see that nothing is done to place the trade in a worse position than at present.
This Amendment falls into two parts. One deals with what is called a presumptive right to renewal of lease, subject to appeal, and the other is to make it compulsory for the Commission to insert in their leases the usual clause which is in every mining lease at the present time, that there is a right of appeal to arbitration to settle any dispute on any matters as to the interpretation of the lease or any matter arising therefrom. It is I think a perfectly natural and reasonable suggestion, but may I refer to what was said in another place, when it was contended that it was only natural to assume that a Commission of this sort must be taken to be a reasonable body of men, and that it was not therefore necessary that there should be an appeal against their decision. No doubt the Commission will behave in a reasonable and sensible way, and in general it will not be necessary to have recourse to arbitration, but the very fact that they are intended to be a reasonable body of men would 549 surely indicate that there is no harm whatever in having a right in the coal company of appeal against them. Even if it be not often used it will leave a feeding in those interested in the matter that they have been fairly treated and are to be no worse off than at the present time.
§ LORD HASTINGS
This Amendment is also of great interest to mineral owners, who will not of course be mineral owners after the vesting date, but will be surface owners. Under Clause 10 procedure is laid down under which a subdivision of property is to be made, and the coal which at present belongs to the mineral owner will be acquired from him at a figure which is to be arrived at in the way with which we are familiar; but the surface properties, which may be extremely extensive, will continue to be leased by him to the colliery lessee. At the expiry of the lease those properties would become wholly valueless unless the Coal Commission permitted either the existing lessee to continue or found a new coal lessee. So that the mineral owner has a very definite interest in this Amendment. The mineral owner is in the position of being at the mercy of the Coal Commission at the moment. If the Coal Commission, for reasons that appealed to them, refused to grant a renewal of the lease, they could thereby so to speak give a back-hander to the royalty owner, who would then be the surface owner, and throw out of value the whole of this surface property which he would be letting to the lessee under Clause 10. So it must not be thought that this is merely a colliery proprietors' Amendment. It is one of most vital interest to the mineral owner, or, as I should more properly say, the surface owner, after the vesting date. I greatly hope that the Government will see the justice of the Amendment and accept it.
§ THE EARL OF MUNSTER
The first proposed new clause which stands in the name of the noble Lord, Lord Teynham, is one that would, in effect, transfer from the Commission to an arbitrator in each case the decision whether or not an expired lease should be renewed and on what terms and conditions. This therefore raises the very large question whether the responsibility, to quote the words of Clause 2 (1), for "controlling and managing" the coal of the country "as 550 they think best for promoting the interests, efficiency and better organisation of the coal mining industry" is to be entrusted to a permanent statutory Commission appointed for that purpose or to a series of ad hoc arbitrators. It is true that the private owners of coal are today subject to the Mines Working Facilities legislation and can be compelled by order of the Railway and Canal Commission to grant rights to work coal which they do not wish to grant, or to grant them on terms and conditions which they have refused. We cannot help feeling that to include in this Bill any provisions enabling an external authority, whether an arbitrator or a Court, to override the new Coal Commission in the performance of its statutory duties would be not only unnecessary but quite contradictory to the whole conception of this Bill.
To turn to the second clause which the noble Lord has moved, I understand that it is quite usual for coal-mining leases to include a clause to the effect that any dispute between the parties about the meaning of the terms of the lease should be submitted to arbitration, instead of to the Courts. Where the Commission grant a lease in which it will be in accordance with the usual practice to include such a clause, no doubt they will be willing to do so. I think it would be far better to leave that to the Commission, who will carry out their obligations as a good landlord. I hope that the noble Lord will not press these two new clauses which he has on the Paper.
§ THE MARQUESS OF LONDONDERRY
I am bound to say I do not feel very satisfied with the answer that has been given from the Front Bench, though I recognise the difficulties in which the Government find themselves. The Commissioners are a new body with powers which are a novelty, and I suggest it would be so much better to revert to those old customs by which we who are interested in the coal trade have been governed in the past. When the noble Earl says that this power should be vested in the Commission and that they should have a jurisdiction of their own, I hardly think that is consistent with the idea we have been led to believe is in the minds of those who are responsible for the promotion of this Bill. We feel that there is a certain continuity in the coal trade and that matters have been carried on for years past in a manner which has 551 been wholly satisfactory in every sense of the word. I should feel very sorry if under this Bill, which, after all, is ostensibly for the purpose of the unification of royalties and for dealing with matters of amalgamation, there should be brought about a change which is entirely different to anything to which we have been accustomed. I should have thought it would have been the object of the Government to follow the lines of the coal trade which have proved so satisfactory in nearly every case. The Government in its support of the Commission is endeavouring to justify the existence of that Commission. In an old-established industry like the coal trade, apart from the propaganda which has been used in criticism of it for matters which are entirely different to what is put forward as the ostensible object of this Bill, it would be much better to follow the customs with which we have been familiar.
§ THE EARL OF DUDLEY
I must quarrel with the remark that fell from the noble Earl in his reply when he foresaw that in every case there would have to be recourse to arbitration. That is not foreseen by us in the least degree. We foresee that in practically every case there will be no difficulty whatsoever. We presume that the Commission will be reasonable people and that they will be only too anxious to continue a lease which has in every way proved satisfactory in the years which have preceded the completion of that lease. It is therefore only in an extreme case that there is any idea that there should be recourse to arbitration. The very fact of putting these strong and highly dangerous powers, these dictatorial powers, into the hands of the Commission would indeed, psychologically, make them more difficult to deal with and make them perhaps less friendly and less understanding with regard to the renewal of leases and, in fact, make the necessity for a board of arbitrators more acute.
It would be very dangerous indeed to put these strong powers into the hands of the Commission under which they can refuse, for no good reason at all, the renewal of a lease which is essential to a colliery company and the refusal of which might entail a vast loss of money to that colliery company and its shareholders. I see no reason whatever, nor is it any new 552 thing, for it entails no new precedent, why there should not be a board of arbitrators, such as there is at present in the case of the Railway and Canal Commission, set up to adjudicate misunderstandings or difficulties. I do hope the Government will accept this Amendment. Before I sit down I would like to suggest—I do not know whether it would meet with the approval of the noble Lord who moved this Amendment—that since it appears to me that this Amendment would become unnecessary if agreement is reached with the Government on the preceding Amendment moved by my noble friend Lord Home, this Amendment should be postponed for consideration by the Government, but if my noble friend or the Government are not agreeable to it then I hope the noble Lord will press his Amendment to a Division.
§ EARL STANHOPE
This is rather a different subject from that which we were discussing under Clause 12. This matter deals with all leases, and not merely with leases of freehold coal. It is for leases in general. It does seem to me that your Lordships are rather throwing suspicion on the Coal Commission if you think leases should go to an arbitrator where there is a question of disagreement. The only reason why there has been arbitration in the past is that in quite a number of cases colliery owners were tied by terms of settlement or some arrangement under their trustees by which they could not do various things they may have wished to do; therefore there was a reference to some outside body, in that case the Railway and Canal Commissioners, who were enabled to override the trust and see that what both sides required was done. The Coal Commission is not tied by any disability of that kind, and I suggest to your Lordships that it really does seem rather unnecessary to put in this proposal that you should be allowed to go to an arbitrator on any case where there is disagreement when you have a body such as this, which under Clause 1, to which we have already agreed is seized with the importance of doing everything desirable for promoting the interests of the industry.
§ LORD HASTINGS
That is exactly the reason. It is because they are commissioned to do this particular thing that there is a great risk. They might take 553 the view that a bench of magistrates sometimes takes with regard to the number of public-houses in an area. They might say that these bodies are redundant, and they would have complete authority not to issue a new lease, because all they have to do is to quote Clause 2 and say that it is in the best interests of the industry that these leases should not be given. It is an immense power, and they would be extraordinarily difficult to get at, if I may use that term, just because of Clause 2. That would be the rock against which they would lean. I think it is inevitable that an arbitrator should be provided for in this particular matter, or some body which can gainsay the Commission. From the standpoint of the mineral owner, who would then be the surface owner, this is of vital importance. Why should the mineral owner be deprived of such little property as is left to him because the Coal Commission consider the operations of a particular colliery are redundant and refuse to give a renewed lease on those particular grounds? The answer of the noble Earl has merely accentuated my objection to the whole thing, and I hope my noble friend will press his Amendment.
§ VISCOUNT HORNE OF SLAMANNAN
I hope the Government will take into very serious consideration the Amendment, as under the Bill there would be put into the hands of the Coal Commission an opportunity for doing that to which the whole principle of the Bill is opposed. For example, this would give power to the Commission to insist upon amalgamation without going through the ordinary process which the Bill prescribes.
§ THE EARL OF MUNSTER
No, it would not. A special guarantee was given by the President of the Board of Trade that no such instruction would be given by the Board of Trade.
§ VISCOUNT HORNE OF SLAMANNAN
Nothing is worth anything at all that is not in the Bill. Anything that cannot be expressed in the Bill is wrong. We ought to have the terms here and now. It is quite obvious that no assurance in the House of Commons as to what the Bill means is worth anything, as the noble and learned Lord the Lord Chancellor knows. The whole question in a Court of Law is what is the 554 expression in the Bill and you cannot refer to any speech made in the House of Commons or in the House of Lords to interpret any Act of Parliament. We must have it expressed specifically in the Act of Parliament. I do think it would give the Coal Commission great power of abuse if we leave the situation as it is now, and I would beg the noble Earl who leads the House to take the matter into serious consideration. To preserve continuity in the coal-fields is a matter of very great importance. The confidence of the industry is involved. I am sure it would be a very serious thing to allow such a thing in the Bill.
§ THE MARQUESS OF LONDONDERRY
If I may venture to trespass on the attention of the Committee again I would like to say that I think the noble Earl is on very dangerous ground. The Commission, I would venture to suggest, is far closer to the Government than was admitted by the noble Lord. Whereas the influence of the present Government over the Commission might be very beneficial we may find when authority is placed in the hands of another Government who are dead set on bureaucracy, if I may use the expression, that the Coal Commission is an arbitrary body at the beck and call of a Socialist Government. When we are impressed with the virtues of democratic institutions in this country, as we are on this side of the House and those on the other side are not, it would be better to leave arbitrament to those bodies in which we have confidence. I should be very sorry to hand over powers to a Coal Commission which will come more and more under the influence of the Government.
LORD BALFOUR OF BURLEIGH
May I ask the noble Earl what harm can be done by admitting the principle of arbitration? My own feeling is that if resort to arbitration is put in the Bill it would never be needed, but if it is not there the want of it may soon be felt.
§ EARL STANHOPE
I am quite prepared to consider the matter again, and of course it will be open to any noble Lord to bring it up on the next stage of the Bill. At the present moment I do not think we can agree, but perhaps between then and now we may change our minds.
I appreciate the point raised by the noble Earl, but I 555 am not asking for anything unusual in asking for some form of arbitration. In the Electricity (Supply) Act, 1926, there is a clause providing for arbitration, and the Electricity Commissioners are somewhat analogous to the Coal Commission.
§ Resolved in the affirmative and Amendment agreed to accordingly.
§ Clause 13 agreed to.
§ Clause 14:
§ Powers of the Commission in relation to underground land other than coal.
§ 14. In respect of any underground land not vested in them by virtue of this Part of this Act, the Commission shall themselves have the right, and shall have power to grant a licence to any person, to do any of the following acts in the course of operations carried on for coal-mining purposes on or after the vesting date, that is to say, to enter upon, remove, execute works in, pass through and occupy any such land and to do all such other acts in relation to any such land as are requisite or convenient for the purposes of any such operations:
Provided that neither the Commission nor a person to whom a licence has been granted under this section shall be entitled by virtue of this section or of the licence—
(e)to do any other act which, if this section had not been enacted, would be
§ I see no reason why we should not have arbitration and I feel I must go to a Division.
§ On Question, Whether the first proposed new clause shall be there inserted?
Their Lordships divided: Contents, 46; Not-Contents 26.
actionable as a trespass or as a nuisance and which, if done, would cause actual damage of a substantial amount.
|Northumberland, D.||Bridgeman, V.||Daryngton, L.|
|Portland, D.||Hereford, V.||Doverdale, L.|
|Somerset, D.||Horne of Slamannan, V.||Fairfax of Cameron, L.|
|Ridley, V.||Fairlie, L. (E. Glasgow.)|
|Bathurst, E.||Gerard, L.|
|Dartmouth, E.||Aberdare, L.||Hastings, L.|
|Dudley, E.||Addington, L.||Lamington, L.|
|Grey, E.||Balfour of Burleigh, L.||Merthyr, L.|
|Lindsey and Abingdon, E.||Basing, L.||Middleton, L.|
|Liverpool, E.||Belper, L.||Mowbray, L.|
|Mar and Kellie, E.||Belstead, L.||Saltoun, L.|
|Midleton, E.||Berwick, L.||Sandhurst, L.|
|Onslow, E.||Biddulph, L.||Sherborne, L.|
|Scarbrough, E.||Bingley, L.||Stafford, L.|
|Vane, E. (M. Londonderry.)||Cromwell, L.||Teynham, L. [Teller.]|
|Darcy (de Knayth), L.||Wolverton, L.|
|Bertie of Thame, V. [Teller.]|
|Maugham, L. (L. Chancellor.)||Munster, E.||Clanwilliam, L. (E. Clanwilliam.)|
|Hailsham, V. (L. President.)||Sandwich, E.||Dickinson, L.|
|Shaftesbury, E.||Fermanagh, L. (E. Erne.)|
|Bath, M.||Spencer, E.||Gage, L. (V. Gage). [Teller.]|
|Stanhope, E.||Rushcliffe, L.|
|Ancastcr, E.||Snell, L.|
|Birkenhead, E.||Samuel, V.||Strathcona and Mount Royal, L.|
|Lucan, E. [Teller.]||Amulree, L.||Templemore, L.|
|Midlothian, E. (E. Rosebery.)||Arnold, L.||Windlesham, L.|
On Question, second proposed new clause agreed to.
LORD DARCY (DE KNAYTH) moved a manuscript Amendment to leave out "not" in the first line of the clause. The noble Lord said: I apologise very much for handing in a manuscript Amendment at this stage. It is not intended to be a mere verbal Amendment, but is designed to raise a question which I did not realise until I came into this House this afternoon. It deals with underground coal. The Commission have power by themselves, and also have a power to grant licences to other persons, to commit acts which would otherwise be illegal. The acts they can do, and grant licences for, are:
any of the following acts in the course of operations carried on for coal-mining purposes … that is to say, to enter upon, remove, execute works in, pass through and occupy any such land and to do all such other acts in relation to any such land as are requisite or convenient for the purposes of any such operations.
§ Your Lordships may realise what are coal-raining operations if you look at Clause 40, on page 37, where you find: "'coal-mining purpose' means searching and boring for, winning, working, getting, carrying away, making merchantable or disposing of, coal." I imagine there will be no dispute that that will involve the storage of coal.
§ Where are these powers exercisable? You will see in the first line of the clause "in respect of any underground land not vested in them by virtue of this Part of this Act." In fact they can do it anywhere that complies with four requirements. In the first place it must be on land, secondly underground, and thirdly not be vested in the Commission, and therefore not vested by this measure. That definite description is a very wide one indeed. It describes precisely the underground railways in London, the cellars in which you normally store coal under the pavement in front of your house, the Cheddar Caves, and any air-raid shelter you may have put up underground. It seems to me to be perfectly obvious that the Government do not desire any such thing, or any such power, and I only raise this matter in order that we should get an opportunity of hearing what power the Government really do want, and of seeing if they cannot put it in a more reasonable and less vague compass.
Page 17, line 19, leave out ("not").— (Lord Darcy (de Knayth).)
§ THE LORD CHANCELLOR
The object of Clause 14 and, so far as my opinion goes, the legal effect is not that which the noble Lord has attributed to it. It is a clause empowering the Commission to have the right, but also—much more important—to have the power to grant to various people engaged in the mining industry the right, to do things underground which could be objected to only on the ground that they were technical trespasses. For example, at the present time a man who owns the surface of land prima facie, unless he has parted with the underground rights, has a right to go to the centre of the earth, and he has also a right to the stratum of air above his land up to the limit at any rate of the habitable globe. But it does not hurt him if somebody travels over his land at the height of ten thousand feet, and it does not hurt him if somebody is boring a thousand feet below his 558 ground. This is intended to prevent actions being brought to restrain what you may call perfectly technical interferences with his land in order that the Commission may enable their lessees and others to carry on the business of coal mining to the greatest advantage.
As the noble Lord has truly said, there are here four conditions which together prevent any injury being done, as far as I can see, to any living human being except this, that he is deprived of rights which have a nuisance value. The licensee of the Commission cannot interfere with the carrying on of underground operations for a purpose not connected with coal-mining; for example, if he has got some other mine or if he is sinking for water, or if he is pumping or anything of that sort, you cannot touch him. You cannot interfere with the surface of any mine. It has been suggested that all sorts of things might be done, for example that the same rights are given as to persons who own a coal shoot in front of their premises, but I have never known a coal shoot without a place for shooting coal, and that is an interference with the surface—and very inconvenient it is on occasions when the coal shoot is open. Again, you cannot withdraw support from any land—a positive prohibition. That means that you are not going to hurt the surface by altering the level, or do anything which will interfere with support. You cannot do any other act which, if the clause had not been enacted, would be actionable by virtue of any servitude, restrictive covenant or statutory prohibition. Servitude for this purpose may be taken to mean any easement of any sort. If a man has got any kind of easement you cannot interfere with him.
Lastly, you cannot do any other act which, if the clause had not been enacted, would be actionable as a trespass or a nuisance and which, if done, would cause actual damage of a substantial amount. Of course, if you are going to exclude nuisance value in respect of surface, it is necessary also to say that there shall not be a technical action for trespass, claiming either a shilling or forty shillings damage. You must have substantial damage. If you have got anything at all, if you have £5 of damage, the whole of that clause will come into force and the person licensed under its provisions will have no right to do it. I submit that this is an innocent clause which will not hurt 559 the pocket of any human being and will greatly enable the Commission to help the people who are mining coal Lo advantage.
LORD DARCY (DE KNAYTH)
I am surprised at the line that the noble and learned Lord has taken. He has not justified for one moment the extraordinarily wide extent over which these powers are exercisable. I do not know whether he would like to deal with that point.
§ THE LORD CHANCELLOR
I can only repeat that if the conditions (a)to (e)are complied with, there are no such wide powers which affect any living human being.
LORD DARCY (DE KNAYTH)
May I suggest it is not the wideness of the powers but the wideness of the area of ground over which they can be exercised? I can see quite easily that there are certain powers which might be necessary for boring for virgin coal. Is that what this clause is aimed at? I rather suspect it is, but, if that is so, it is quite clearly unnecessary to give, for instance, powers to people entering, for the purpose of making merchantable or disposing of coal, any underground land which may have no connection with the mine at all. I must say I am very disappointed that the noble and learned Lord cannot help us a little bit more over that because at the moment the whole clause seems to be bristling with unnecessary words. They are otiose, they are not clear, and it is very difficult to imagine any clause that could be drafted, shall we say, less precise for the purpose for which we suspect this clause has been drafted.
§ THE LORD CHANCELLOR
I hesitate to take up another moment of your Lordships' time, but let me say out of courtesy to the noble Lord that these things can only be done in the course of operations carried on for coal-mining purposes, and with that in your minds, together with all these restrictions on the powers, I venture to think that the dangers anticipated are in the nature of a gigantic mare's nest.
LORD DARCY (DE KNAYTH)
I shall not take up the time of the Committee any longer, but I will draw my noble 560 friend's attention to the fact that coalmining purposes may be carried out miles away from any mine of coal, and include pretty well the whole purpose of marketing coal.
§ Amendment, by leave, withdrawn.
§ LORD DARCY (DE KNAYTH) moved in paragraph (e)in the proviso, to leave out all words after "nuisance." The noble Lord said: I should like to say I was very sorry to differ from the noble and learned Lord on the last Amendment, but I have the great advantage of finding myself in precise agreement with him immediately afterwards. He has most cogently and lucidly moved this Amendment for me in his reply to the last Amendment, and on behalf of my noble friend I beg to move.
Page 18, leave out from ("nuisance") in line 5 to end of line 6.—(Lord Darcy (De Knayth.)
§ EARL STANHOPE
The Amendment which my noble friend has moved entirely wipes out the whole object of this clause. What has happened in the past, as noble Lords know, is that colliery companies have had to pay enormous sums in order to get the use of wayleaves under other people's property, and the existing way-leaves are preserved under the Bill, but it is proposed that we should try and prevent colliery companies being put under a similar disability in the future. The Amendment of my noble friend leaves out the words at the end of the clause "and which, if done, would cause actual damage of a substantial amount." If he leaves out those words it means that nothing can be done which is a trespass or a nuisance; and there is no limitation of that trespass or nuisance by saying that it has to be of a substantial kind, otherwise it need not be taken notice of. Therefore all trespass and nuisance would be forbidden, and once more wayleaves would have to be paid for, possibly at a very heavy charge, and the whole object of this clause, which is to escape that happening in the future which has happened in the past, would be entirely wiped out.
LORD DARCY (DE KNAYTH)
Perhaps we could get over the difficulty that is raised by the noble Earl and at the same time get out of a difficulty which I feel that these words import into this clause. We are very much concerned 561 with the word "substantial" and the reason for that is this. A very large number of people, who may be rich corporations or may be poor corporations, will find themselves up against this great statutory body which has authority to do certain things, and if we find it doing actual damage it seems to me that that is not what is intended that it should do. In those circumstances if we left out the words "substantial amount" we would find that in the case my noble friend described, of a person who had proceeded to pass under somebody else's property, it would do no actual damage, and in another case altogether, where wholly different circumstances and considerations arose, it would avoid having to go and discuss whether the amount was substantial. It is going to be very unfortunate for people who know that some damage is being done to their property that they may be brought right up to your Lordships' House on the question whether the damage; was in fact substantial. Providing there is actual physical damage I submit there is no reason why there should not be an action. I think that is a proper cause of action, and I hope the noble Lord will agree to leave out the words "substantial amount" or something to that effect.
I should like to support my noble friend on that point. I think it is a serious danger and one I have long been aware of, the way in which great corporations can commit injury, sometimes quite serious injury, to little people, and if the latter object they are threatened with having to fight an action right up to your Lordships' House. I think it is one of the things that the Government ought to be most careful about.
§ THE LORD CHANCELLOR
It is one of the things the Government are most careful of. "Substantial" here only means other than nominal. In law there are two sorts of damage. There is nominal damage which will arise if you fly over a person's property at the height of 10,000 feet dropping nothing on the way, and he is entitled to nominal damage because you have committed an act of trespass. If you have walked over his fields and broken the gate or interfered with some pasture or something of that sort you may have damage which 562 only amounts to £1. But that is something other than nominal damage if you prove it. In other words, it is not a technical trespass. That is what these words "for a substantial amount" are intended to exclude. If you do not exclude it, you cannot rely on this clause at all. It is possible, if anybody really thinks that this is a danger, that one could meet the case by saying "would cause damage of an amount otherwise than nominal damage" or something of that sort. But that is what it means. "Substantial" does not mean that you can do any real damage. I will consider it, if that will pacify the noble Lord who moved the Amendment, before the Report stage.
§ VISCOUNT HORNE OF SLAMANNAN
Does my noble and learned friend attribute no significance to the word "actual"?
§ THE LORD CHANCELLOR
I am not sure. Let me put this to my noble friend, who I know is an expert. A man has property, and a thousand feet below the surface somebody makes a hole. I am not satisfied that that is not actual damage. I am satisfied he would only get nominal damages in respect of it. That is why I am unwilling to accept the view of my noble friend on this little matter of law.
§ THE EARL OF DUDLEY
I am very glad the noble and learned Lord Chancellor has dealt with this point, because I feel that it is a point of considerable substance. Personally I am quite satisfied that the Government see eye to eye with us on this Amendment and that it is merely a matter of finding the right words. I know the law of trespass from a surface point of view is very complicated, but we want to feel that there should be no damage committed which is in fact actionable; that there should be the same rights of prosecution below ground as on the surface, and that there should be no privileges granted to the Commission or to their nominees, the people to whom they have granted leases, which they have not at present got—that they 563 should not commit damage in the name of the Government because they have got a lease from the Government. I think the reply of the noble and learned Lord Chancellor with his deep knowledge of the law is sufficient to set our minds at rest, and I hope that satisfactory words will be found before the next stage.
LORD DARCY (DE KNAYTH)
I thank the noble and learned Lord for his statement and I beg leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ VISCOUNT BERTIE OF THAME moved, in paragraph (e)in the proviso, after "would," to insert "be likely to." The noble Viscount said: I understand my noble friend is prepared to advise your Lordships to accept this Amendment. I thank him and I beg to move.
Page 18, line 5, after ("would") insert ("be likely to").—(Viscount Bertie of Thame.)
§ One Question, Amendment agreed to.
§ Clause 14, as amended, agreed to.
§ Clauses 15 and 16 agreed to.
§ THE LORD CHANCELLOR had an Amendment on the Paper to insert a new-clause after Clause 16.
THE LORD CHAIRMAN
A manuscript Amendment has been handed in by the noble Lord, Lord Hastings, to amend the proposed new clause. His proposed Amendment is, after the word "Act," in the first line of the proposed new clause, to insert "until the valuation date."
§ THE LORD CHANCELLOR
The Amendment proposed by the noble Lord, Lord Hastings, renders the new clause more perfect, I think, and on behalf of the Government I am perfectly willing to accept it. The object of the clause is in the interests of everybody. When I say "everybody" I mean everybody in your Lordships' House. I do not think there is the smallest doubt of any of your Lordships acting in the matter which we are trying to prevent by this new clause, but there may be people who, acting under a sense of grievance—not members of the House—might be inclined, after the Act comes into force and before the date of the valuation—the words that are 564 now inserted at the suggestion of the noble Lord, Lord Hastings—to do one of the things which are prohibited here: namely, enter upon a dealing otherwise than in the ordinary course of business which might be "calculated to give a factitious or artificial value to a holding or to prejudice the interests or powers to be acquired by the Commission under this Part of this Act." The matter was debated in another place and the hope was expressed by various Members that it would be possible in this House to put in some clause which would prevent an improper dealing intended to make the Bill inoperative to some substantial extent. This does no more than prevent people doing that which I venture to think no honest person would be likely to do.
THE LORD CHAIRMAN
Does the noble and learned Lord move the Amendment in the form suggested by the noble Lord, Lord Hastings?
THE LORD CHAIRMAN
Then that would be with the addition of the Amendment of the noble Lord, Lord Hastings.
§ Amendment moved—
§ After Clause 16 insert the following new clause—
§ Coal not to be dealt with to the prejudice of the Commission after passing of this Act.
§ (".As from the date of the passing of this Act until the valuation date all persons interested in coal or a mine of coal shall be treated as holding their respective interests in a fiduciary capacity for giving effect to the provisions of this Part of this Act, and as being subject accordingly to an obligation to refrain from any dealing therewith (not being a disposition or other dealing which might reasonably have been effected in the ordinary course of business if this Act had not been passed) calculated to give a factitious or artificial value to a holding or to prejudice the interests or powers to be acquired by the Commission under this Part of this Act.").—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
§ Clause 17 agreed to.
§ LORD HASTINGS
The Lord Chairman must occasionally look this way. I had a considerable desire to say a few words upon that clause.
§ LORD HASTINGS
The noble Earl never gave me an opportunity. It was wholly unimportant and I do not press it, but if now and again he would look in this direction, I should be grateful.
§ Clauses 18 and 19 agreed to.
§ Clause 20:
§ Reserve fund.
§ (3) At any time at which the value of the reserve fund is greater than the prescribed minimum reserve, the Commission may apply a part thereof, not exceeding in value the amount of the excess, in purchasing for cancellation stock issued by them under this Part of this Act or otherwise for the redemption of debt.
§ THE MARQUESS OF LONDONDERRY moved to leave out subsection (3). The noble Marquess said: I have been given to understand that the policy which the Government have decided to bring forward for the acquisition of royalties— what is called the unification of royalties —is for the benefit of the coal industry and for the removing of grievances which are said to exist. I have taken a somewhat dispassionate view of this question of policy. It has been my privilege to work Government coal for a considerable number of years, because all coal which exists under the sea comes under the jurisdiction of the Office of Woods and Forests. I have always had very satisfactory relations with that Office, and I thought that prior to 1933 I was in a more or less privileged position in that, instead of having to negotiate with individuals who might be considered unreasonable, I could not call to mind any experience in which they had been unreasonable. Nevertheless, in view of my experience in working Government coal, I have never had any objection to the acquisition of the property in royalties by the Government.
§ I have never accepted the reasons which have been given. The noble Lord who sits on the Cross Benches made up his mind, when President of the Royal Commission, that it was of the greatest importance that royalties should be acquired by the State, and I think he was impressed by what I might call the sentimental value which attached to this question. We know quite well that through the propaganda on this matter property in royalties is very much discredited. That is the propaganda put for- 566 ward by the Federation on every opportunity which has been presented to them. I would in this connection say that there is no difference between property in royalties and property in anything else, but I would go so far as to say that the propaganda brought about by the Federation, and subscribed to by the friends of the noble Lord on the Cross Benches, is that because it is property in royalties it should be acquired by the State. Many people in this country have been very susceptible to this propaganda, and we have now come to the stage when the property in royalties has been taken over by the State, for no very good reason that I can see.
§ I am not contesting that proposition at all, but it does surprise me that, apart from the sentimental value attaching to the acquisition of royalties by the State, we are told that this policy of the Government is to benefit the coal industry, and I cannot understand why they should feel it incumbent upon them, after having been successful in acquiring a very valuable property, or thinking they have, to seek at such an early date to extinguish the capital value by taking from the capital value and the income received a certain amount for the extinguishment of that debt. I believe it would be much better if under the extraordinary deal which the Government have brought about, which is to be so beneficial to the country, the surplus of the money which is derived from this policy should be used for the benefit of the coal trade itself, whether it is in reducing the amount which will be paid for the leasing of the coal, or whether it is for the benefit of the mining population, or whether it may be for the purposes of research, or in establishing to a greater extent the safety of the miners, which is after all the prime consideration in all our minds when we consider these matters.
§ But I feel there is no need for any haste in providing money for the extinguishment of a debt which the Government have taken upon themselves to pay to the royalty owners. The amount which they have undertaken to pay has been open to a good deal of question in this House, and I should not think of trespassing on your Lordships' attention in order to go into the matter again, but I would venture to put before you the proposition that the Government have made 567 a very good bargain in this matter, and it there is any surplus—which it may be difficult to provide, by reason of the expenses of this expensive Commission— I feel that that money could be made use of for far better purposes than the extinguishing of a debt which the country is going to incur by buying the coal. For that reason I venture to move this Amendment. I move it for the purpose really of hearing from the Government what their view is on the matter. I venture to suggest that one of the reasons why this great move in policy has been made is that by reason of acquiring the property in royalties it would bring a great benefit to the coal trade itself.
Page 22, line 18, leave out subsection (3).— (The Marquess of Londonderry.)
§ VISCOUNT HORNE OF SLAMANNAN
I venture to support the Amendment. In fact, if you analyse what it is intended to do by this subsection you find that it really amounts to this, that the royalty owners are to buy themselves out. The surplus which is to be derived from the benefits of the purchase by the Government of the royalties of this country is to be devoted, after a minimum reserve has been created, to getting rid of the loan which is necessary in order to make the purchase. That is a somewhat sinister aspect to put upon the whole of this transaction, which has been advocated before the country as one which is for the benefit, not of the Government but of the coal trade, and in particular has now and again been advocated as for the benefit of the miners and the wages they will get when things are better. There is nothing, it seems to me, in the point of view of the finance of the Coal Commission to justify the position taken up in this subsection.
In the ordinary way let us suppose that a property is purchased. It is purchased, let us say, by raising money from a variety of people who believe in the proposition you are putting forward. That is to say, there are a certain number of shareholders who take up £1, £5 or £xo shares, and your balance sheet exhibits on one side the value of the assets, and on the other side, as a liability, the amount that you owe to your shareholders. Take that as an analogy. The Coal Commission will have as an asset 568 the coal which they have obtained; on the other side they will have as a liability the loan which is necessarily in existence. But you do not proceed to pay out your shareholders, and there is no sense in asking you to proceed here to pay off the loan money. Accordingly I suggest that in fact the Coal Commission should carry out the object which seems to be laid down in their instructions under this Bill, and that they should not act in order to get rid of the liability which they have incurred in purchasing the coal, against which they have got a great asset, but that they should really work the whole affair in order to benefit the coal industry as a whole. You will keep in mind that it is provided that they must first of all make a minimum reserve. That will be sufficient for any deficiencies that there may happen to be and any unexpected claims.
§ EARL STANHOPE
May I point out that this clause is only permissive? It only enables the Coal Commission to redeem stock should they so desire. That is very different from saying that that is the way in which they are going to spend their money. This of course raises the whole question as to how the surplus from this transaction is going to be spent. My own view, frankly, is that I am by no means certain that the Government have made a good bargain over this matter, but I do not wish to reopen that question. But if you think of the possibility that the use of coal may become a great deal less in I he future than in the past, of course these various reserve funds have to be built up. The proposals under the Bill are that rents and excessive wayleaves should be greatly reduced in cost. But there may be occasions when the Coal Commission do not see that in the subsequent years—the second and third years—they are likely to have as large a revenue as they have had, say, in the current year. It may be that they foresee a slump coming in trade, and that factories are going to use less coal in the second and third years than they use now. They would then not feel justified in making a reduction of rents in perpetuity, and obviously they could not make a reduction which they would not be able to keep going if their revenue fell considerably in the following year. Therefore they might feel that the best thing on behalf of the industry would be to expend such small surplus as they might have—and 569 this is, I believe, what this deals with and not with a large sum—in redeeming stock. The whole of that goes to the benefit of the industry eventually.
The State does not propose to leave this debt in perpetuity. As my noble friends know, there is a sinking fund through which, in the course of time, it will be paid off. It may be that a packet of stock is available at what is considered a low price, and it would be an advantage to the industry if the Coal Commission could reduce the amount of stock outstanding and the interest due on that stock. Obviously the less interest they have to find the greater will be their surplus to reduce the cost of mining, way-leaves, etc. The whole point is to enable the Coal Commission to expend money in that way if they do not expend it in the way laid down in Clause 21. I hope your Lordships will not take away from them this power, which is to the benefit of the industry as a whole if you take a long-distance view of the whole transaction.
It may be said that this provision is one which affects not the actual surplus that is available but the disposition of it in so far as it makes a difference from the point of view of whether the surplus is to be available at the present time or in years to come. It would be wrong to encourage the Commission to take too short a view of their financial responsibilities, but equally is it unwise to encourage them in any way to take too long a view. We have in mind, in considering this Bill, the benefits to the coal industry. It is by operations such as are suggested in this subsection that these benefits will be put off into the far distant future. I hope that your Lordships will not agree to this provision remaining in the Bill, because it seems to me one of the most important things in the Bill is that it should, in effect, somehow or other, produce some benefits to the coal trade so as to enable the increase of profits to be passed on to the men engaged in the industry. The sooner that is done the better. To enable the Commission to buy up stock in this way is a mistake. Your Lordships will notice on the preceding page that there is a special arrangement permitting them to set aside an amount of money for the repayment of the capital which they have borrowed. That is a reasonable and, indeed, necessary precaution, but to add to that this 570 special power is, to my way of thinking, unnecessary and to be deprecated.
Here we are up against the thing we have been up against time and again. Even in my short experience we have been told that in these instructions to the Departments the word "may" equals "must." We are told on this occasion that this provision is merely permissive, and that it means "may" and not "must." There should be some Parliamentary definition of this word to let us know when "may" means "must" and when it means only "may."
THE EARL OF RADNOR
I find it extremely difficult to understand the arguments of those who favour this Amendment. As I have said, I know nothing about the coal industry, but this particular subsection which it is sought to remove strikes me as either an incursion or even a retrogression into Conservative Victorian finance which is very welcome indeed. As I understand the position, the Coal Commission as a body are not working for private profit or for any body of shareholders. They are working either for the people of this country or for the coal industry. Therefore in whatever way they can strengthen their financial position, either as suggested in this subsection or in any other way, they are benefiting either the country or the coal industry, it does not matter which. It is sought under this subsection to give them the opportunity if possible to strengthen their financial position for the benefit either of the country or of the coal industry.
§ THE EARL OF DUDLEY
That is all very well, but I have always understood, and I believe your Lordships have always understood, that this Bill was brought in to help the coal industry. The main criticism of this Bill from all sections of the industry is that it does not help it at all. I think the Government realise to the full the great opposition there is to this Bill from those who are engaged in the coal-mining industry. I suggest to the Government that they ought to accept this Amendment if only as a gesture, showing that they are anxious to do something to help that industry by this machinery at the earliest possible moment. This, after all, does not interfere in any way with the normal functions of the reserve fund, which in 571 time wipes off the debt. It only applies to excesses of that reserve fund. I feel that those excesses ought to be applied for the benefit of the coal industry, and I suggest to the Government it would go a long way to mollify the criticism, which is very acute from the coal industry, that the Bill does not help them quickly enough.
§ EARL STANHOPE
Does the noble Earl suggests that this subsection is to the detriment of the coal industry? I submit it is to its benefit.
§ THE EARL OF DUDLEY
No, but it naturally does not help the coal industry as quickly as it would do if the excesses were used for the reduction of rents.
§ THE MARQUESS OF LONDONDERRY
I feel that when we see an exhibition of prudence in finance on the part of the Government we should commend the Government with alacrity for such an excellent exhibition. In regard to the Amendment I will not venture to put your Lordships to the inconvenience of taking a Division on this point. Any sign of economy on the part of the Government is one that we should welcome. I agree with my noble friend who sits behind the Lord Chancellor. But while I have said that, I am sorry to feel that the pessimistic spirit of the Lord Chancellor has permeated my noble friend the noble Earl who leads this House. I have always looked upon him as an optimist, but now that he has fallen into the clutches of the Lord Chancellor he seems to be a pessimist in regard to the coal trade.
This is something which I feel we ought to look at very seriously indeed. I do not know why the noble Earl and the noble and learned Lord Chancellor take this very pessimistic view. I have seen a different expression on the faces of most coalowners in the last two years, and I see no reason why the prosperous condition of the coal trade should not continue. After all, it is the source of power which we have in this country, and I believe that if it is fostered and nurtured and carried on in a proper spirit, we shall find as the years go by we shall be more dependent on the coal trade than we have been in the past. I take an entirely different view from that taken by those behind the Government advocating this measure. I do not feel that they have 572 imparted their views to the noble and learned Lord, the Lord Chancellor, but I feel perfectly sure that they are convinced in- their own minds that they have made a remarkably good bargain with the coalowners, and that they are looking forward to an era of prosperity for all the property that they are acquiring. That property will increase in value as the years go by. I venture to say that with this remarkable security which is behind it there is no necessity even for the prudence which I have ventured to commend in the noble Earl.
They think it necessary to extinguish the debt, and it is a very large debt. I feel that it would be far more consistent with the expressions of opinion that they have put forward if they used this extra money—and I think there will be a good surplus, unless the Commission are more extravagant than I expect—for the benefit of the coal trade itself. I hope that the prudence of the noble Lord will not overwhelm the desire of his colleagues to use the surplus for the benefit of the coal industry. I beg leave to withdraw.
§ Amendment, by leave, withdrawn.
§ Clause 20 agreed to.
§ Clause 21:
§ Reduction by the Commission of rents.
§ 21.— (1) If at any time, on an estimate made by the Commission, it appears to them that their annual surplus for future financial years is likely on the average to exceed the amount which is at that time the prescribed appropriation to reserve, they may reduce any such rents within their control as are specified in the next succeeding subsection by amounts not exceeding in the aggregate one-half, or if the value of the reserve fund is then greater than the prescribed minimum reserve the whole, of the estimated excess of their annual surplus over the prescribed appropriation to reserve.
§ (2) The rents which may be reduced under the preceding subsection shall be—
- (a) rents payable in respect of underground wayleaves, whether expressly reserved in respect thereof or not;
- (b)rents payable by particular lessees working coal in any district or part of a district which are, having regard to all the circumstances, more onerous than the average of the rents payable by lessees working coal under similar conditions in that district or part of a district; and
- (c)rents payable by lessees generally working coal in any district or part of a district which are, having regard to all the circumstances, more onerous than the average of the rents payable by lessees generally working coal under similar conditions in other districts or in another part of that district:
§ Provided that if at any time the Commission report to the Board of Trade that such reduction of rents as they have power to effect under the foregoing provisions of this subsection has been substantially completed, the Board of Trade may make and lay before Parliament an order making provision to the effect that the preceding subsection shall apply to rents within the control of the Commission generally or to any class of such rents, and, if each House of Parliament resolves that the order be approved, the order shall have effect from such date as the Board of Trade may appoint.
§ (3) Subject as (aforesaid the Commission shall not reduce any rent during the currency of the lease by which it is reserved, and in granting leases, other than leases to be substituted for subsisting leases under Section ten of this Act, the Commission shall reserve the best rent which in their opinion can reasonably be obtained, regard being had to any power to reduce rents for the time being exercisable by them in accordance with the preceding provisions of this section, to any money laid out or to be laid out by the lessee and generally to the circumstances of the case:
§ Provided that …
§ LORD MERTHYR moved, in subsection (1), to leave out "may reduce any such rents within their control as are specified in the next succeeding subsection by amounts" and insert "shall make such reductions in rents as they may consider reasonable, taking all the relevant circumstances of each case into account." The noble Lord said: This Amendment is coupled with and stands or falls with the next Amendment in my name to leave out subsection (2). The purpose of this Amendment is twofold. Firstly, it is to remove what I submit is a very serious doubt as to the interpretation and purpose of subsection (2) of this clause. Secondly, it is to effect a reasonable compromise between the conflicting interests of coalowners in various parts of the country. May I direct your Lordships' attention to the words of subsection (2) for a moment. It states how the expected surplus is to be distributed and used. Your Lordships will observe that it is divided into three parts, (a), (b) and (c). My submission is that unless this Amendment is carried there is bound to be substantial doubt as to whether these three parts, (a), (b) and (c) are in any order of priority or whether they are all alike equal. It was said 574 with some force a little time ago that when this Bill leaves this House there should be in the minds of nobody any avoidable doubt as to its interpretation which might possibly give rise to litigation. It is to further that object that I move this Amendment.
This point was discussed at some length in another place and what was said then shows that there is a danger of doubt. There were no fewer than four spokesmen of His Majesty's Government in another place on this point. Two of the speakers took one side, and indicated, or at any rate strongly suggested, that there was in this subsection a definite priority laid down in the form of an instruction or at least a very strong suggestion to the Commssion. A lawyer and a layman took that view. On the other side two other spokesmen of His Majesty's Government, a lawyer and a layman, took the view that all these three parts were equal and that there was no priority at all. The right honourable gentleman the President of the Board of Trade said the surplus
is to be devoted, in the first place, to the abolition of underground wayleaves; in the second place, to removing anomalies between individual undertakings in a particular district; and, in the third place, to removing anomalies between the various districts themselves.
The right honourable gentleman the Chancellor of the Exchequer said:
…the Bill describes the sort of order in which this ought to be done, first in respect of underground wayleaves; second, rents payable by particular undertakings which are more than the average of the rents in the district.
Those two views seem to agree: that a definite order of priority was laid down. This is an important matter for colliery undertakings.
On the other hand, the Minister for Mines made it quite clear that in his opinion there was no priority and that it would be open to the Courts to treat these three parts as equal and merely placed in that order by accident. He said:
These subsections are really in the nature of a general guidance, not to be taken specifically in the order (a), (b), and (c), though clearly, from the very fact that wayleaves are in so many cases a very heavy burden, probably the Commission would deal with them first.
Those latter words, I submit, indicate the danger of a legal doubt in this matter. Finally, the Attorney-General, when he was called in to advise the Committee on this matter, said:
The answer is, I think, clear, that as a matter of law they impose no priority.
I hope I have quoted enough to satisfy your Lordships of the danger of the doubt which may arise in the Courts and produce very costly litigation. If I am right, now is the time when this doubt should be removed by a clear statement from His Majesty's Government whether, if this subsection remains in the Bill, there is this order or not.
§ I would remind your Lordships of the point that arose just now—namely, that undertakings and guarantees, even on behalf of the Government, will not necessarily satisfy a Court of Law. But, my Amendment is to remove this subsection altogether, and I submit that an advantage will be gained thereby. You will cease to do what you are doing now: tying the hands of the Commission many years in advance and directing them, subject to this doubt, to do things in a certain way. I submit that it would be very much better not so to tie their hands but to leave the question much more open and in their discretion. If the hands of the Commission are to be tied and if a priority is to be laid down, then there exists a dispute in various parts of the country as to what that priority should be.
There is a compromise which has been arrived at and universally agreed amongst the coal undertakings, and it is represented by the first part of this Amendment. It says this, very simply:
shall make such reductions in rents as they may consider reasonable, taking all the relevant circumstances of each case into account.
The necessity for a decision on this point may not arise for a number of years. In that time all kinds of things may have changed, and views may be held then which are very different from those held now. The desirability of any sort of priority may, even in official minds, be quite different then from what it is now. It would be better to make these Amendments. They make the clause briefer and simpler, less likely to cause dispute in the future, and most certainly less likely to cause litigation in the Courts and doubt in the minds of those who are trying to interpret this Bill. I beg to move.
Page 22, line 43, leave out from ("they") to ("not") on page 23, line 2, and insert ("shall make such reductions in rents as
they may consider reasonable, taking all the relevant circumstances of each case into account,").—(Lord Merthyr.)
I hope your Lordships will support this Amendment, especially as we are told that it will appeal as a compromise to the coal trade in different parts of the country. There has been considerable discussion on this question among those who are acquainted with the problem of the coal trade in different districts, and this compromise has been suggested as the fairest solution. It is worth noticing, I think, that the order suggested in subsection (2) starts off first of all with rents in respect of underground wayleaves, and there is a very good argument that these should not be the first to be reduced, if there is to be any priority. There is also a dispute as to what would be the right sentence to put into paragraph (c) instead of what is here, and there is the doubt and confusion to which the noble Lord has referred, and which was particularly and most emphatically shown to exist when the matter was discussed in another place. I hope your Lordships will agree that those who are expecting in many years to come the benefit from the results of this Bill should be satisfied that the method by which the benefits are to be distributed is a reasonable one. I think this Amendment which is suggested by the noble Lord is one which they would think to be reasonable.
§ VISCOUNT HORNE OF SLAMANNAN
I support the Amendment which has been suggested. I do so not merely for the reasons which have been adduced by noble Lords who have addressed your Lordships, but for the reason that the provisions in the Bill seem to me to be entirely unfair. Subsection (2) of the clause says that the rents which may be reduced under the preceding subsection shall be (a) rents payable in respect of underground wayleaves, whether expressly reserved in respect thereof or not, (b) rents payable by particular lessees working coal, having regard to all the circumstances, and (c) rents payable by lessees generally working coal, again having regard to all the circumstances. Therefore, as the subsection stands it makes compulsory the remission of way-leaves, but only, according to the discretion of the Commission, the royalties which the lessee may have to pay. That seems to me to avoid what is, I think, 577 very well known in the coalfields of this country to be a quite ordinary state of circumstances. You may have in a particular coalfield a wayleave of 2d. and a royalty of 3d., and in a neighbouring coalfield no wayleave at all but a royalty of 5d. If you proceed according to subsection (2) the result would be that you imperatively reduce the wayleave in the first place, and then there would be no arrangement for assimilating the two royalties. Accordingly I think this subsection has been conceived upon an entirely erroneous principle. What you must have regard to is all the circumstances in all cases. The Amendment which is proposed seems to me to realise that possibility, and accordingly I support it as against the clause.
§ EARL STANHOPE
I hope the three noble Lords who have spoken will tell us that they are speaking on behalf of the coal industry as a whole, and that there will be no doubt whatever about that point, because your Lordships will observe what they have done. They have been unable to agree among themselves as to what is the best course to pursue, and therefore they have left the whole thing in the hands of the Coal Commission, which at last comes into its own, and is recognised as the suitable body to solve all difficulties and look after the coal trade better than anybody else outside can do. On the whole I do not know that I go quite so far as that; I think Parliament should have some say in this matter. I always feel that the opinion of this House is of far greater value than any opinion that can be expressed in another place, and on the best authority I have it that there is no precedence between (a), (b) and (c) in subsection (2). Therefore what we propose is that Parliament should decide how this thing should be done and should not leave it entirely to the Coal Commission, but we do give them great latitude.
For instance, as regards (a) and (b), the idea is entirely as was suggested by Lord Ridley, and I think also by the noble Viscount after him, that in some cases you get a fairly high wayleave rent and rather a low royalty. In another case there is no wayleave to pay and a high royalty. Well, those two things will be taken into consideration together, and where there is a wayleave to be paid, then either the wayleave will be reduced 578 and the royalty will be left, or in other cases the royalty will be reduced because there is no wayleave to pay. Therefore (a) and (b) will come into consideration together. I am doubtful as to the Amendment, because it only talks about making "such reductions in rent," and I think it leaves it open to considerable question as to whether they could reduce the amount which is paid for a wayleave, which, as at present advised, does not appear under the definition clause as a rent. Therefore it might be that where you have already a heavy wayleave to pay, which everybody will agree it would be just to reduce, you would cut out the Coal Commission from having the power to do it. I hope that my noble friends will not press this Amendment. If there is any doubt in your Lordships' minds as to whether (a), (b) and (c) can be taken in any order, and that they are not in that order of preference, we should be prepared to leave the matter open for consideration at the next stage.
§ VISCOUNT HORNE OF SLAMANNAN
Would it not be better left in the form that the Coal Commission should be permitted to reduce wayleaves? As the Bill stands it is a matter of discretion as to the order in which affairs should be taken.
§ THE LORD CHANCELLOR
I am not quite sure that I rightly understand my noble friend. In my opinion there is no doubt that (a), (b) and (c) are not things which have got to be done in that order. Let the noble Viscount look at the last, line on page 22. In the circumstances mentioned, it is said,they may reduce any such rents within their control as are specified in the next succeeding subsection.You may reduce (a), (b) and (c), any of them; and to my mind it is perfectly plain that if you say you can do any of (a), (b) and (c), you may pick out those which you will do. You are not bound to do one of them first and then the other and then the third. But if my noble friend has any doubt about it, a few words can be added on the Report stage to make it perfectly plain that there is no precedence here within these three paragraphs, as has been supposed.
§ VISCOUNT HORNE OF SLAMANNAN
I beg the Lord Chancellor's pardon for insisting on this, but surely there is a 579 variation of expression as between (a), (b) and (c). In the first you have a peremptory order and in the others you have a discretion. The Commission proceeds "having regard to all the circumstances" under (b) and (c). With regard to (a), they have no discretion with regard to the circumstances. Surely that indicates a difference of attitude at least. So far as I am concerned, I am very willing to accept the Lord Chancellor's view on the interpretation of a clause, but there is a variation of expression which causes me some anxiety. If that can be remedied when we come to the Report stage I should be grateful. I think it must be acknowledged that these three things are treated differently in the language of the clause.
§ THE LORD CHANCELLOR
It is all governed by the words "may reduce any such rents …as are specified." It does not mean to say you have to do them all. If you may drink any of the drinks on a particular sideboard, you have not got to swallow the lot.
§ VISCOUNT HORNE OF SLAMANNAN
No, but if it says, "You shall drink sherry in the first place," then that is at least incumbent upon you.
§ THE LORD CHANCELLOR
It does not say so. However, if my noble and learned friend continues to have any doubt about it, it is only a matter of adding a word or two, and it shall be done.
I want to make it clear that this Amendment is moved on behalf of the industry as a whole, and has the support of the Mining Association. In view of what the noble and learned Lord has said, and in view of the indication which he has given that the Government—I hope I am not misinterpreting him—will raise no objection if suitable words are added on the Report stage in order to make it abundantly clear that these three parts are of equal merit and in no sort of order of priority, I do not propose to trouble your Lordships to divide on this Amendment. I beg leave to withdraw.
§ Amendment, by leave, withdrawn.
LORD SNELL moved to insert at the end subsection (1):
Provided that not less than half of the reduction of rent so provided shall be devoted to an increase of the rates of wages then prevailing of the miners employed at the collieries affected.
§ The noble Lord said: On behalf of my noble friend Lord Addison, I beg to move the Amendment which stands in his name. I do not think that any words are required to justify it. The Amendment seems to be proved the moment it is stated. In the general desire to do justice to those who operate the coal industry, I venture to plead that those who work at the face of the coal should not be forgotten. I have not heard, except for one word which fell from the noble Viscount, Lord Home, that anybody in this debate has paid the slightest attention to the needs, rights, and possible disadvantages of the miner himself. That is all I need say in moving this Amendment. I would not for the world try further to increase that interesting revolt which has caused a sudden emigration from the congested areas opposite to the wide open spaces on this side of the House.
Page 23, line 6, at end insert the said proviso.—(Lord Snell.)
§ EARL STANHOPE
I hope the noble Lord will not press this Amendment. I think it will cut across wage agreements, and it may cause extraordinary difficulties as between one area and another, which as he knows, have very often quite different conditions. Under the terms of the district wages agreements any advantage to the coal trade goes as to 85 per cent, to increase wages. Therefore we believe that those working on the surface perhaps will get as much advantage as anybody under the Bill. I hope the noble Lord will not press the Amendment which I do not think will really carry out the objects he has in mind.
§ LORD SNELL
While not satisfied with what the noble Earl has said I am in no position to defy him. I therefore withdraw the Amendment.
§ Amendment, by leave, withdrawn.
LORD MERTHYR had given Notice that he would move to insert in subsection (2), before paragraph (a):
(a)First, rents payable by particular lessees working coal which are, having regard to all the circumstances, more onerous than
the average of the rents payable by lessees generally working coal under similar conditions in all of the districts and so as to secure as soon as reasonably practicable that in no district shall the rent payable by any particular lessees be more onerous, having regard to all the circumstances, than the average of the rents payable by lessees generally working coal under similar conditions in all of the districts.
The noble Lord said: I only want to say with regard to this Amendment that in view of the fact that my earlier Amendment has not been pressed, I do not ask your Lordships to divide on this one, but it does illustrate the fact that this point is of some importance, because there is a dispute in various parts of the country as to which should come first. If I may use the illustration put forward by the noble and learned Lord, it is a very unhappy thing if there is to be a quarrel as to whether the sherry or the port is to be drunk first, but as this Amendment goes further than the one I already moved I will not move it.
§ VISCOUNT SAMUEL moved, in subsection (2), to leave out the proviso. The noble Lord said: I am sorry to have to detain your Lordships at almost the eleventh hour with an Amendment which, however, is one in my submission of real importance, and it is one to which I would ask the very serious attention of His Majesty's Government. It raises a very large question of principle which, although not of immediate moment, is of very great ultimate moment from the point of view of public policy. The clause with which we have been dealing provides methods by which any funds in the hands of the Coal Commission are to be disbursed. In the first place they have to pay for the expenses of the Commission. Then they must pay the interest on any debt they have incurred, and any sinking fund which is obligatory upon them to provide under the terms of their loans. Then they must put by money to reserve. Thereafter they have the option of repaying the debt if they so desire, or any part of it. Then they may reduce royalties which are excessive, or wayleaves or other charges on the industry that are burdensome. Finally, we come to this subsection, and if and when all these various provisions have been fulfilled then they may make a general reduction of all the remaining rents. They are not required to do so, but this subsection indicates that Parliament in passing this Bill regards that as 582 a proper destination for the residue of any funds that may remain.
§ Certainly it will be impossible that this should come into force in the near future; but we legislate here not for this year or this decade; we are passing a Statute establishing a great new system applying to one of the chief industries of the whole country, and what we do now will have an influence in years to come. I submit that the nation having purchased—that is in effect what we are doing—this great natural resource, this mineral wealth which is in this island, the ultimate proceeds from this purchase ought not to be distributed to the benefit of any sectional interest whatsoever. It is a national possession and should remain a national possession. Suppose, to give another illustration, a county council purchases an area of land for smallholdings and uses its credit and funds for that purpose. The rents derived are naturally used for paying interest and sinking fund on the loan and expenses, but no one would suggest that if after that there was a residue it should be distributed among the individuals cultivating that land. In countries where they have nationalised railways, in the British Dominions or in India, no one would suggest that, the State having purchased by the use of its credit and resources those great industries, if any profit is derived in years to come it should be distributed among people who work the railways. Similarly, in this case I hold very strongly that Parliament should legislate in the interests of the country as a whole and not for any particular interest.
§ I mentioned this point on Second Reading and then I drew attention to the fact that this matter was dealt with by the Royal Commission of 1925. I then quoted the evidence of the chief accredited witness who presented the case for the Miners' Federation. I do not propose to repeat the quotation, but this point was put to him specifically whether he thought that if royalties were purchased by the State the ultimate advantage should accrue to the industry, or whether the State should step into the position of the present royalty owners and regard this is a national possession. He said in the most unqualified terms that certainly the public interest must be supreme and this wealth should belong to the nation as a whole. I well remember that the late 583 Duke of Northumberland, when he appeared as a witness on behalf of the royalty owners before the Commission, was challenged by one of our assessors, one of the miners' representatives, who said, "I always thought that the earth was the Lord's and the fullness thereof," to which the noble Duke replied in a flash, "At all events it does not belong to the miners then, does it?"
Although we have the greatest respect and regard for the miners and appreciate the dangers to which they are subject, and the services they render to the whole community, this is not a fund which ought properly ultimately to go to them or the mineowners—and if it is distributed under the present system of ascertainment 85 per cent, would go to the miners. No section, no matter how powerful electorally or how much they command the respect of the country, ought to have their interests preferred to the interest of the nation as a whole. Some noble Lords below the gangway have given very clear expression to that view in the debate. The noble Lord, Lord Hastings, said:
We are acting not for the royalty owners but for the State, the interests of the State in the future.
And the noble Viscount, Lord Home, said:
The Government are supposed to be a National Government protecting the interests of the nation.
Yet in this subsection the interest of the nation is neglected and not protected.
§ The noble Earl, Lord Stanhope, said just now that it may be that the revenue would greatly diminish and that there would be only a small surplus either in the near or distant future. That may be, but also there may be an increase. Suppose some great new coalfield develops. Thirty or forty years ago no one thought that Kent would become a great coalmining area. It may be that in the next generation some other great coalfield may be found. Suppose that engineering skill finds that it can, without detriment to the workers, mine right down to a depth of five or six thousand feet, and that vast new coalfields are so developed in the next generation, yet under this paragraph the omission of which I am moving, all revenue to be derived from those fields shall, as has been indicated to be 584 the desire of Parliament, be distributed among the industry of that day and shall not redound to the benefit of the citizens of the nation as a whole. Surely that is wrong, and for that reason I move this Amendment.
§ Let me add one other point which might perhaps interest some of your Lordships. There are many royalty owners in this House, and they are undoubtedly called upon by this Bill to make a financial sacrifice. They are giving up properties which perhaps their families have held for many generations, in which they have taken great interest and great pride. Why should they be called upon to do this for the benefit of any other interest, whether it be mineowners or miners? If they are being sacrificed on the altar of their country, then possibly they could bear that with more equanimity than if this property were merely being taken away from them to be distributed to other sectional interests. I do not suggest inserting any other words, and specifically requiring that this residue of revenue should in the future go to the State, because I think it exceedingly difficult to foresee what the conditions will be then and I think Parliament of those days should determine what should be done. At all events Parliament to-day, in 1938, ought not to give a direction by including this proviso give an indication by including this proviso that in their view the whole of the residue ought to be distributed among the sectional interests to which I have referred. I beg to move.
Page 23, line 25, leave out lines 25 to 35. —(Viscount Samuel.)
THE MARQUESS OF LOTHIAN
I should like to support the Amendment. My noble friend has raised a point of real and essential substance. Just consider where the principle embodied in this Bill is going to lead. There is a considerable body of opinion in the country in favour of the nationalisation of the land. It is represented on this Committee at this moment by the lonely figure of the noble Lord, Lord Snell, but he claims over and over again that he has very large support in the country, and he anticipates that before very long that support will constitute the majority. Are we now going to decide that when the land is nationalised the rents are to be appro- 585 priated for the benefit of the farmer or the people who work on the land? It is a preposterous suggestion. It seems to me an essential principle of property that land or coal has a rental value which belongs to the landlord, and if the State is going to become the landlord the rent should belong to the State and be appropriated to the purposes which the State, the landlord, considers to be in the best interest of the nation.
Moreover, I want to draw your attention to this aspect. Some years ago, before the selling schemes were inaugurated, when the revenue of the industry was very low and when the wages of the miners were much too low, there was possibly a case for finding by any means that you could a new source of revenue by which you might raise those wages. But that is no longer the case, Under the selling schemes inaugurated some two years ago under the arrangements made between the Government and the mineowner and now embodied in a Schedule to this Bill, with the protection of the consumer which is given in the Eighth Schedule, the industry has a means of ensuring under normal circumstances that it can get a price for the coal which will pay an adequate living wage to the miners and a reasonable profit to the undertaker. In these circumstances, why should the rent for the coal be applied to the sectional interests which my noble friend mentioned?
It seems to me an absolutely clear and incontrovertible principle that the rents of the coal which belongs to the State under this Bill, which I personally think, contrary to the opinion of my noble friend the Leader of the House, will amount to some £2,000,000 a year, are going to be taken away out of the pockets of unfortunate royalty-owners to belong to the State and be used for whatever purposes Parliament shall decide, and should not be, under this Bill, permanently attributed to the mining industry. I therefore beg to support the Amendment.
§ LORD SNELL
I would not like the noble Marquess to leave your Lordships under the impression that the Labour Party take the view that this clause intends to enforce. We have never been syndicalists in the sense that the profits on the coal trade must go to people engaged in the coal trade, or that the profits of the Post Office must go to the Post 586 Office workers, and those of the railways to railway workers. That is a programme which would create certain bands of aristocrats of industry, and what people like myself, who do not belong to these aristrocratic trades, would do I do not know. Secondly, I wish to say how rejoiced I am that the noble Viscount and the noble Marquess on the Liberal Benches have suddenly become aware of the virtues of nationalisation.
§ LORD HASTINGS
I also have risen to support Lord Samuel and Lord Snell. I have felt very strongly, and endeavoured to express it more than once, that it is improper, provided always you have determined to nationalise this particular property, not to say that the profits derived from it ought to belong to the State as a whole and that every taxpayer should have a share in it. I trust that Lord Samuel will press his Amendment. I trust still more that the Government will give way and accept the Amendment, because it is of vital importance. Lord Samuel, if I may say so with respect, put it in an admirable way. Who can tell what coalfield is going to be developed in the future? And it would be absurd to throw away these vast potentialities which exist in coal in this particular way and debar the taxpayer from what may be of enormous value in time to come.
§ LORD CROMWELL
Although I have not crossed to the other side of the House I also would like to support the Amendment. I was inclined to ask at one time why it was that Lord Samuel did not give an alternative, but I see now the reason why he did not mention an alternative for the disposal of the surplus. I agree that it should be left to future generations to decide. I think certainly that when all the rates and other expenses have been brought down to normal level either the balance should be accumulated or used for purposes decided by Parliament at the time, or Parliament should decide directly there is a surplus how it is to be spent from year to year. I have much pleasure in supporting the Amendment.
§ THE LORD CHANCELLOR
This proviso is of course one which does not necessarily bind the country or Parliament at a future date. What it does is to point in this direction, that the Commission may report to the Board of Trade that they have made certain reductions of rent under the preceding sub- 587 section (2), and the Board of Trade may then make, and lay before Parliament, an order making provision for all the rents to be reduced, or that any particular class of such rents should be reduced. Then, if each House of Parliament resolves that the order be approved, the order shall have effect. But although, as I say, it is not compulsory on this House or another place to resolve that the order be approved, this proviso undoubtedly does point in this direction, that the main object of this Bill is the improvement of the mining industry, and particularly the happiness and contentment of the workers in it. As your Lordships know very well, the cost of mining really is so high that roughly 85 per cent. —in some years more—of any sum which is derived from a reduction of rent goes direct to the miners who are engaged in the industry. Fifteen per cent, on an average no doubt would go, if these Resolutions were passed, to the leaseholders whose rents were being reduced.
That is a pointer as to the object of the Government in putting forward this measure. It is a measure believed to be for the advantage of the industry, and it seems to me a complete mistake to suppose that this Bill is in the same position as it would be if Government money was expected to be spent in buying out the owners of the coal. This Bill, if it fulfils the expectations of the promoters, is not going to cost the Government money. The money is going to be provided, it is thought no doubt with the possible use of Government credit, but the money is going to be provided, we think, by the advantages that are going to be gained by unification —and now I shall use the word quite deliberately—of the royalties, so that there shall in future be one single landlord of all coal in this country. That is believed by the promoters, and has been believed by many people before all the Commissions that have reported, including the Commission over which the noble Viscount, Lord Samuel, presided, to be a great advantage, and to be likely to enable various savings to be made and the industry to be carried on to greater advantage.
All that is said in this proviso is that if the Houses of Parliament approve, the ultimate sums that are derived from these advantages which are anticipated shall be 588 employed to the reduction of rents generally or to any class of rents mainly (I think I have stated distinctly) for the purpose of improving the position of the persons engaged in this arduous and dangerous business. And I confess it is a great surprise to those who sit with me on these Benches that some of your Lordships opposite should think that that is a wrong thing to do, even in a case where Government money is not being used at all. The words are used that these mines will be Government property and it is said that everybody will say so. I shall never say so. It is not true. They will not become Government property. They will become the property of a Commission, a public body, set up by the Government, who are not going to carry on their business for the benefit of anybody except the industry itself.
If your Lordships who take this view are going to be logical, how can you think it right that the powers contained in subsections (1) and (2) ought to be exercised out of the surpluses which arise in various financial years? If you have any sense of logical reasoning you should say that not one penny of the sums received by the Commission in excess of the reserve necessary for paying off the loan ought to be applied in reduction of way-leaves or reduction of rents payable by particular lessees or by lessees generally. Why should you stop? I do not know how many years it is going to take to pay the various sums mentioned in subsection (2), but when all these sums have been paid I submit it is reasonable to find a proviso in this Bill to say that, subject to the report of the Commission, to the view of the Board of Trade, and to the final approval of both Houses of Parliament, further sums, so long as Parliament thinks fit to allow it, shall be used for the benefit of this industry in the form of reducing all rents.
§ VISCOUNT SAMUEL
I am sure many of your Lordships will have heard with much surprise the reply that has been given by the Lord Chancellor. There is an easy answer to what he has said on the point that the other subsections are not objected to. Certainly when this industry comes to some extent under the purview of a public authority the first duty is to remove any legitimate grievances that may arise within the industry; and, if some royalties are excessive or some wayleaves burdensome 589 when the new state of things comes in, the first duty is to put that right.
§ THE LORD CHANCELLOR
Put it right at whose expense? If you say the money belongs to the Government—
§ VISCOUNT SAMUEL
I never said the money belongs to the Government. This Coal Commission is of course a public authority, and it has the duties that naturally devolve upon such an authority. First of all it has got to pay its establishment and its debts, and it has to remove the legitimate grievances of all those who come within the sphere of its authority; but, after that, why should it distribute its resources to any particular industry? It stands, indeed, not in the position of a Government Department, but very much in the same position as the Electricity Commission or the London Passenger Transport Board. It may raise its own funds and it has a quasi-Governmental authority, but no one would suggest for a single moment that because the Electricity Commission is not a Government Department, therefore any profits which it makes must be distributed among those working in the electrical industry, or that the London Passenger Transport Board's profits must in the last resort be distributed amongst the people employed by them.
I submit that the Lord Chancellor has given no answer at all to the contentions that I laid before the Committee with regard to the possibility of the development of future coalfields or of deep-level mining of minerals occurring in future. Furthermore, when he says that these words are not mandatory, surely they either mean something or they mean nothing. If they mean something they mean something which is wrong. They give an indication that that should be done which probably ought not to be done. If they mean nothing then they ought to come out and there is no reason for retaining them in the Bill. During the debates on this Bill there never has been an occasion on which there has been such a remarkable agreement among representatives of all different points of view. Those who sit on these Benches, my noble friend who from time to time plays so admirably the role of Casabianca, and the noble Lords representing various 590 sections of the coal industry have all agreed in favour of this Amendment, and surely, if a Government is to be guided by the general expression of the House in Committee on a Bill—and the Government has a duty so to be guided when there is almost unanimity and no dissentient voice—why should not Ministers agree on this occasion to accept the Amendment I have moved? I again must press upon them to accept it.
§ LORD CROMWELL
May I ask the noble and learned Lord Chancellor one specific question? If this particular part of the clause remains in, eventually there will be no rents payable at all. The rents payable will be reduced to nil. Has ho any suggestion to make as to what will then happen? Will they be allowed to mine the coal and pay nothing at all for it?
THE EARL OF RADNOR
I find myself in a difficulty. I do not understand the coal industry. The noble and learned Lord Chancellor stated that these abatements of rents would accrue to the industry as a whole, but as I read the proviso they do not accrue to the industry; they accrue to the lessees, which is a very different thing. As I understand it, the Commission will have no control over the lessees in that they cannot mine coal in any form, and it seems to me that it is rather as though I, as a rural landlord, having had shall we say a good year on the Stock Exchange, abate the rents of my tenants because I have had a good year on the Stock Exchange and so do good to rural agriculture, whereas I am only helping my own tenants and no one else.
I do not want the noble Viscount who moved this Amendment to think all those interested in the coal trade are in agreement with him. In my view there is no purpose whatever in this Bill unless it can in fact benefit those in the industry. I think there are many present owners of coal who would feel that the sacrifices which they are asked to accept and would accept willingly under this Bill would be more than justified if in fact they did produce better conditions and possibly to some small extent a better standard of living for those employed in the industry itself. If this proviso is taken out the ultimate object of this Bill will in my view be entirely and absolutely removed.
591 In the way I see it there is all the difference in the world between the London Passenger Transport Board, mentioned by the noble Viscount, and the proposed Coal Commission. The Coal Commission, after all, are particularly connected with the coal trade and are in the very beginning charged with the duty of managing and looking after their property. Their property is the coalfield and the mines of coal in that field. It has been suggested that there may be a time when it will be no longer necessary to pay any royalty rents at all; that there might be a minimum possibly to meet the expenses of the Commission. At that time provision will have to be made for special arrangements to pay Mineral Rights Duty and perhaps Miners' Welfare Levy as well. I submit it is not at all comparable with having a good year on the Stock Exchange and reducing the rents of farm tenants, because the Stock Exchange profit would not be returned to the source from which it is derived.
§ VISCOUNT SAMUEL
I do not want to trouble your Lordships with a Division, if the noble and learned Lord would confer with me and consider an Amendment on Report which would leave the matter open.
§ meet anybody on any point on which I fairly can meet them, but I feel strongly that this is only something which is of a temporary character. The noble Viscount rather accused me of not having answered the point that coal might become of enormous value. I wish to heaven it would happen. If it did the Board of Trade would not use this power to give enormous benefits to these people. But the probability is that for many years there is no hope of a general reduction of all the mines in the country. There is a possible hope that they will be reduced and there is a possible hope that accordingly the wages of the miners may go up. But nobody, I think, who has studied the finance of this at all can imagine that there is any hope of complete removal of all rents and royalties or of anything but a fair and decent wage being paid to the miners of the country by the operation of this Bill within a great number of years. The proviso being a temporary proviso which can be put an end to whenever Parliament thinks fit, I am unable to suggest that there are any words which would meet the wishes of the noble Viscount.
§ On Question, Whether the words proposed to be left out shall stand part of the clause?
§ Their Lordships divided: Contents, 49; Not-Contents, 35.593
|Maugham, L. (L. Chancellor.)||Grey, E.||Basing, L.|
|Iddesleigh, E.||Belstead, L.|
|Hailsham, V. (L. President.)||Lucan, E. [Teller.]||Clanwilliam, L. (E. Clanwilliam.)|
|De La Warr, E. (L. Privy Seal.)||Mar and Kellie, E.||Digby, L.|
|Midleton, E.||Fairlie, L. (E. Glasgow.)|
|Munster, E.||Fermanagh, L. (E. Erne.)|
|Northumberland, D.||Plymouth, E.||Gage, L. (V. Gage.) [Teller.]|
|Wellington, D.||Sandwich, E.||Luke, L.|
|Shaftesbury, E.||Merthyr, L.|
|Bath, M.||Spencer, E.||Sherborne L.|
|Dufferin and Ava, M.||Stanhope, E.||Stafford, L.|
|Zetland, M.||Vane, E. (M. Londonderry.)||Stanley of Alderley, L. (L. Sheffield.)|
|Ancaster, E.||Bridgeman, V.||Strathcona and Mount Royal, L.|
|Bessborough, E.||Ridley, V.|
|Birkenhead, E.||Templemore, L.|
|Carlisle, E.||Aberconway, L.||Teynham, L.|
|Dartmouth, E.||Aberdare, L.||Windlesham, L.|
|Dudley, E.||Addington, L.||Wolverton, L.|
|Bathurst, E.||Radnor, E.||Samuel, V. [Teller.]|
|Fitzwilliam, E.||Scarbrough, E.|
|Lindsey and Abingdon, E.||Amulree, L.|
|Onslow, E.||Bertie of Thame, V.||Balfour of Burleigh, L.|
|Poulett, E.||Mersey, V.||Belper, L.|
|Berwick, L.||Hastings, L.||Rushcliffe, L.|
|Cromwell, L.||Ker, L. (M. Lothian.)||Saltoun, L.|
|Darcy (de Knayth), L.[Teller.]||Lamington, L.||Sandhurst, L.|
|Middleton, L.||Shute, L. (V. Barrington.)|
|Denman, L.||Mowbray, L.||Snell, L.|
|Fairfax of Cameron, L.||Oxenfoord, L. (E. Stair.)||Stanmore, L.|
|Gerard, L.||Redesdale, L.||Strickland, L.|
|Gifford, L.||Rennell, L.|
On Question, Amendment agreed to.
§ Resolved in the affirmative and Amendment disagreed to accordingly.
LORD MERTHYR moved, after subsection (2), to insert the following new subsection:
(3) Where with respect to any coalmining lease subsisting on the vesting date there was in operation immediately before the 1st day of January 1936 any concession by the lessor to the lessee by way of a reduction of the rent reserved by the lease the Commission shall make to the lessee the same concession during the currency of the lease.
§ The noble Lord said: In the course of these debates we have heard a good deal, especially from the noble Earl who leads the House, about good landlords. There is in the industry a somewhat widespread apprehension. In the recent lean years a large number of concessions have been made by the owners of the coal in favour of the lessees in order that they may be better able to carry on the industry, and j in some cases able to carry it on at all. I believe that these concessions reach quite large proportions. I am told that in South Wales alone, in recent years, they may approach a figure of as much as £100,000. The colliery owners are a little perturbed lest, after the passing of this Bill, they may lose a number of these concessions. I hope that the noble Earl will be able to give me some hope and satisfaction on this point. Should the Commission really be a good landlord, I submit that this Amendment is reasonable and that the Commission will be able, and ought, to continue those concessions which have been made, perhaps at some considerable sacrifice, by the owners of the coal in favour of the lessees. The withdrawal of these concessions suddenly or in bulk would cause damage to the industry, which I take it is the very thing which this Bill does not seek to do. I have always understood that the underlying object of this Bill was to benefit the industry, and I think that your Lordships have shown by a majority in the last Division that that is so. I hope that the underlying idea will be continued and that this Amendment will be accepted.594
Page 23, line 35, at end, insert the said new subsection.—(Lord Merthyr.)
§ EARL STANHOPE
I do not know if my noble friend is aware that, according to the terms of his Amendment as he has drafted it, if a reduction in rent had been given on January 1, 1936, and already withdrawn, nevertheless the Coal Commission would be compelled, once the vesting date had been passed, to continue that reduction. I am sure that is not what my noble friend intended. I think he will agree that the whole object of the Bill, and indeed the obligation laid upon the Coal Commission, is that they should do their best for the industry and for the nation as a whole. Therefore I think he will agree that we must expect them, as reasonable people, to behave as good landlords. I really feel that under the circumstances he ought to trust the Coal Commission to do what is right in this matter. Of course, there is no question that, if it is bad for the industry as a whole to withdraw concessions which have been given up to the vesting date, they would ever dream of withdrawing them and imposing a higher rent. Therefore, both from that point of view and also because I think this Amendment goes a great deal further than the noble Lord intended, I hope he will not press it.
I should just like to explain that the reason for the insertion of this particular date, January 1, 1936, was that it could not be affected in any way by the introduction of this Bill. I see the force of the point which the noble Earl has put to me, and I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ EARL STANHOPE moved, in subsection (3), to leave out "other than leases to be substituted for subsisting leases under Section ten of this Act." The noble Earl said: This is a purely consequential Amendment, put down owing to the alteration already made in the Bill.595
Page 23, line 38, leave out from ("leases") to ("the") in line 40.—(Earl Stanhope.)
§ Clause 21, as amended, agreed to.
§ Clause 22 agreed to.
§ Clause 23 [Purposes for which the Commission may borrow]:
EARL STANHOPE moved to insert in subsection (1):
(c)the payment of the sum payable by the Commission under this Act to the Board of Trade in respect of the expenses incurred by the Board under the Registration Act;".
The noble Earl said: This is merely to make it clear that the borrowing powers of the Commission extend to the whole of the payment due under Clause 31 (2) from the Commission to the Board of Trade in reimbursement of the Board's expenses under the Registration Act. The terms of Clause 23 (1) (b) might be interpreted as covering only that part of
the Board's expenses which consists of costs paid to applicants and not to cover administration expenses.
Page 25, line 10, at end insert the said paragraph.—(Earl Stanhope.)
§ Clause 23, as amended, agreed to.
§ Clauses 24 to 26 agreed to.
§ EARL STANHOPE
We have now reached another part of the Bill, and I suggest to your Lordships that it might be a good moment for the House to resume. If that is your Lordships' wish I move that the House do resume.
§ Moved, That the House do now resume.—(Earl Stanhope.)
§ On Question, Motion agreed to: House resumed accordingly.
§ House adjourned at a quarter before twelve o'clock.