§ Amendments reported (according to order).
§ Clause 1:
§ Establishment of National Coal Board and functions thereof.
§ 1.—(1) There shall be a National Coal Board which shall, on and after the primary vesting date, be charged with the duties of—
- (a) working and getting the coal in Great Britain, to the exclusion (save as in this Act provided) of any other person;
- (b) securing the efficient development of the coal-mining industry; and
- (c) making supplies of coal available, of such qualities and sizes, in such quantities and at such prices, as may seem to them best calculated to further the public interest, without giving any undue or unreasonable preference or advantage to or in favour of any particular person or company or any particular class of trade, business, manufacture or industry.
(4) The policy of the Board shall be directed to securing, consistently with the proper discharge of their duties under subsection (1) this section,—
(a) the safety, health and welfare or persons in their employment;
THE LORD CHANCELLOR (LORD JOWITT) moved, in subsection (1) (c), to leave out "without giving" and to insert "in all respects, including the avoid-
ance of." The noble and learned Lord said: My Lords, I beg to move the Amendment which stands in my name. Your Lordships will remember that on the Committee stage we had a Division, and the words which I am now proposing to alter were the words which were inserted as a result of that Division. I am very anxious, if I can, to find some way out of this difficulty, one which will satisfy all Parties. I very much hope that by this Amendment that purpose may have been achieved. If my Amendment is agreed to, paragraph (c) will read as follows.
making supplies of coal available, of such qualities and sizes, in such quantities and at such prices, as may seem to them best calculated to further the public interest in all respects, including the avoidance of any undue or unreasonable preference or advantage …
I may say at once that an Amendment which makes it impossible to give a preference or advantage in favour of any particular class of trade, business, manufacture, or industry, for instance, would manifestly be quite unsatisfactory, because the custom of the coal trade for many years has been to set different prices for coal for different classes of industry. For instance, one price is quoted for steel works, another, it may be, for brickworks, another price for export, and so on. I am very far from saying that that practice is a desirable one, or one which ought to continue. I express no opinion, because I have not got adequate knowledge on the subject, but the new Coal Board ought to consider, as one of their first functions, whether or not that shall continue. On the other hand it would be wholly improper to supply coal to a steel works, for instance, taken over by the Government, at a different price from the price at which coal was supplied to an exactly comparable steel works which remained under private ownership. That would not be honest, and plainly would not be within the public interest.
§ I think the words I am now proposing are better calculated than the words now in the Bill to further the public interest in all respects. They allow sufficient latitude to the Coal Board to carry on the business on the best lines, as it has hitherto been carried on, and will make it impossible for them to do those things which are characterized as manifestly improper. Accordingly I beg to move.4
Page 1, line 17, leave out ("without giving") and insert ("in all respects, including the avoidance of").—(The Lord Chancellor.)
§ 2.45 p.m.
§ VISCOUNT SWINTON
My Lords, I think the whole House is really indebted to the noble and learned Lord, the Lord Chancellor, for having dealt so thoroughly, and if I may say so, so effectively with this matter. I think the whole House was extremely anxious that the Act should lay down quite clearly that undue preference should not be possible and should not be practised. At the same time I fully agree with the noble and learned Lord that there should be latitude given to the Board. It may very well be that the Board should be able to continue the practice of selling coal at different prices to different industries if it is in the national interest. There may be justification for selling coal to the steel industry, a great basic industry, at a different price from the price at which it is sold to certain other industries. It would certainly be acceptable to us that it should be made plain that that latitude was allowed to the Board. At the same time, we were anxious that it should be clearly laid down that, though the Board might differentiate between one industry and another, yet they must treat all units within a class in exactly the same way.
The noble and learned Lord has taken the extreme case of a nationalized steel undertaking and a non-nationalized steel undertaking. We must obviously compare like with like. I appreciate that you can sell a whole trainload of coal at a different price from which you sell a truckload, but assuming the commercial transaction is the same in character and degree, then all industries within a particular class should obviously be treated in the same way. We now have it on the highest possible legal authority that the words he has designed will do all three things. They will prohibit any undue or improper preference, they will allow differentiation between one industry and another, but they will also compel the Board to treat all units within an industry in the same way. That being the position, it is entirely satisfactory.
§ VISCOUNT MAUGHAM
My Lords, may I raise the question whether the proposed words are in the best Parliamentary style. I do not like the word "including" after a number of things that are permissive. 5 The substance of it is that the Coal Board are given under Clause 1 (1) (c) a number of powers of a very wide nature, and then the clause will read "including the avoidance of preference or advantage." The words should be, I venture to think, "without giving any preference or advantage". In other words, the language here used is not really a good specimen of English. If the noble and learned Lord, the Lord Chancellor, is content I shall say nothing, because I am sure the Courts may be trusted to give effect to the clause, but I venture to think that it is not really right, and I suggest that the noble and learned Lord should see whether as a matter of grammatical English it ought not to be improved on Third Reading.
§ On Question, Amendment agreed to.
§ THE LORD CHANCELLOR
had given notice to move, in subsection (1) (c), to leave out "or in favour of any particular person or company or any particular class of trade, business, manufacture or industry." The noble and learned Lord said: My Lords, I beg to move this Amendment.
Page 1, line 18, leave out from ("advantage") to the end of line 20.—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
§ 2.48 p.m.
THE LORD CHANCELLOR moved, in subsection (4), after paragraph (a), to insert:
(b) the benefit of the practical knowledge and experience of such persons in the organisation and conduct of the activities in which they are employed.
The noble and learned Lord said: My Lords, I think the whole House is indebted to the noble Viscount, Lord Cecil of Chelwood, for raising this matter on the Committee stage. When I answered him I said that I thought Clause 46 was the more appropriate place for this Amendment.
§ But I have considered the matter and found myself on reflection, as I very often do, coming to the conclusion that he was right and that I was wrong. At the same time I think he will perhaps agree with me that there was something to be said for my point of view, and I am accordingly suggesting that we should have some words in this clause and also some words in Clause 46. In principle I entirely 6 agree, as I said on the last occasion, with what the noble Lord then said. I think the most important and most difficult task that this new Coal Board will have will be to get these relationships right. If you have a sort of dichotomy of management and workers, and if you say to the workers, "Your job is merely to do what you are told; it is for the management to exercise all the brain and to think the thing out," then you will get off on the wrong foot altogether. The long and short of the matter is that although in the past (whether we accept the word "partnership" or not, of course the wages, which the miners got depended very largely on the price of coal) you might have had a form of partnership, you certainly had not got the inward and spiritual grace of partnership. You had these two sets of people looking at each other from absolutely antagonistic points of view.
§ What I want to achieve, and what I think the noble Viscount wants to achieve, is that in future a man working in the industry—not only in the pits but in the brickworks or the coke ovens—will be consulted not merely as to conditions of work and hours of labour but as to the conduct of the activities of the industry. That is what I have tried to do by this Amendment. Your Lordships will see that the Amendment proposes to insert after the statement, "The policy of the Board shall be directed to securing, consistently with the proper discharge of their duties under Subsection (1) of this Section—(a) the safety, health and welfare of all persons" the words "the benefit of the practical knowledge and experience of such persons in the organization and conduct of the activities in which they are engaged."
§ I call your Lordships' attention to the word "activities," which is used through out the Bill. It occurs, for instance, on the third line of this very page, page 2—"shall include the carrying on of all such activities." It means the business. It is defined in the definition clause on page 51 so far as "colliery activities" are concerned, but of course the phrase here is wider than mere colliery activities. Throughout this Bill the word "activities" means the business operations of the Board. What I have tried to do (and I do not think there is anything really between the intentions of the noble Viscount, who also has an Amendment on the paper, and myself) is to select 7 words to make it quite plain that the men working in the pits, in the brickworks or in the coke ovens shall be consulted as to the way in which the business is run and shall be partners and co-operators in a concern which is of such vital importance to the entire industry of this country. Accepting the noble Viscount's suggestion, I propose to put in some words to make it plain from the outset what the policy of the Board is to be, and I also propose (if I may anticipate for a moment and deal with the later amendment, to page 44) to put some words into Clause 46 which sets out what the duty of the Board is. After "(b) consultation on," I want to insert at the beginning of (11), "the organization and conduct of the activities in which such persons are employed and."
§ I think, I hope and I believe that with those two Amendments I have covered the ground. If I may criticize for a moment, with great hesitation, the words which the noble Viscount has used, I would say that although we are absolutely in sympathy in outlook, I think he has drawn them rather too widely. His words are: "the recognition of the right of such persons to be consulted as to the operations in which they are employed." He does not, of course, mean that you should consult, for instance, those working in the brickworks, as to whether they would like to work in the coke-ovens or in the pit or perhaps to work as school teachers. What I think he means is that they should be consulted as to the running of the business, and that they should contribute to the running of the business. I think his words are rather too wide for that purpose, and although I have had considerable hesitation in selecting my words, having had the benefit of his guidance and advice I venture to think that the words I have suggested here really cover the point he has in mind. We are going to get these men concerned in the whole question of the organization and conduct of the business, in which they should, I sincerely hope, hereafter regard themselves as fellow-partners with those who manage. It would perhaps be convenient if we discussed this Amendment together with the Amendment proposed by the noble Viscount. I beg to move.8
Page 2, line 46, at end, insert the proposed new paragraph.—(The Lord Chancellor.)
§ 2.55 p.m.
§ VISCOUNT CECIL OF CHELWOOD
My Lords, I am honestly extremely grateful to the noble and learned Lord for the great trouble he has taken and for the great effort he has made to deal with the point I raised. I am very grateful, and I believe the great majority of members of this House are equally grateful, to him for what he has done. I hope, therefore he will not mind if I venture to make one or two verbal criticisms of the words he proposes to use. The great object which I understand he has in view (and which I certainly have in view) is to produce a state of affairs in this industry in which the manual workers will feel themselves genuinely responsible for the industry as a whole, or, at any rate, for the part of the industry in which they are engaged. I am not especially concerned with the question of hours or wages; they are dealt with very fully in Clause 46 and I do not wish to raise any point upon them. I want to make it quite clear that we are not saying to them, "You have the right to be heard on anything which affects your individual work, but you are not entitled to be heard on anything which affects the industry as a whole, or the general policy and development of the industry," because I am afraid you would not then get the spirit of responsibility for the general wellbeing of the industry which seems to me, from what everybody has said in the debates on this Bill, to be the essential thing if the industry is to be restored to a condition in which we can all look upon it with pride.
For that reason I am a little frightened of the word "activities." If you use it as in the interpretation clause as referring to "colliery activities," then you evidently mean activities of the sort which affect the colliery. I think there is some other similar interpretation of "coal industry activities." But that is not the way in which you are using it in this instance. Here you are using the word in connexion with the activities of the manual workers in the industry, and you are saying, "On anything which affects those activities, we shall be very glad to have your opinion and advice." I cannot help thinking that that will make it very difficult indeed for the Coal Board to say, "That is quite true, but we want to see 9 that these men are heard generally, giving their opinion as experts in the business and also as citizens of the country, as to what will be the best way of developing the industry." That is the spirit at which I am aiming. I cannot help feeling that "operations" does not go too far for the purpose and I cannot see that there will be any objection to it. I appreciate what the noble and learned Lord, the Lord Chancellor, has said about the use of the word "activities" elsewhere, but in a way I think that makes the case a little better for me than if it was not used anywhere else. It is used always with some qualifying phrase such as, "colliery activities" or the like. The interpretation clause does not propose to define the word activities. If there was a phrase in the interpretation clause which said activities shall mean this, that or the other I think in point of fact it would have to be said that "activities" meant "operations," because I do not see how you can put it more clearly than that.
That is the criticism to which I venture very respectfully to ask the noble and learned Lord, the Lord Chancellor, even now to devote attention, because I am quite sure he wants to do the very thing which I am anxious to see done.
There is one other paint in which he does disagree and always has disagreed with me. I quite recognize that he does not like to say that these men shall have a right which is to be recognized. I quite realize that there is a disagreement of that kind, but I am not much afraid of it. If you say to a man, "You have got a right to do these things; we are going to recognize it, and you must show you are worthy of the exercise of that right," I cannot help thinking that that is the kind of way you will get at their minds better than you will if you say, "We are anxious to see what you have got to say from that point of view." However, I do not want to stress the question of right if it is thought it goes too far and that it may shock some of the advisers. I cannot believe it would shock a Labour Government as a whole, but if the noble and learned Lord thinks it does go too far for some of his advisers I do not want to press the question of right. On the other question, of activities and operations, I do very earnestly ask him to say whether he cannot move one step further in my direction.
§ THE LORD CHANCELLOR
My Lords, in answer to the noble Viscount, I would say quite frankly that I have no objection myself to the word "operations." It is exactly what I mean by the word "activities." I shall certainly take the opportunity of consulting the Parliamentary draftsman again. We have used the word "activities" throughout this Bill, as the noble-Viscount will see if he will turn to the long title: "An Act to establish public ownership and control of the coal-mining industry and certain allied activities." We have always used the word "activities" in that sense, and I am afraid the purists would say, "You have now changed your word to 'operations' which means the same thing." However, being completely at one with the noble Viscount, I will consult again with the draftsman and see if I can accept the word "operations" instead of the word "activities."
§ On Question, Amendment agreed to.
§ 3.5 p.m.
§ LORD TEYNHAM moved, after Clause 3, to insert the following new clause:
§ Coal Export Advisory Committee
§ ".—(1) The Minister shall after consultation with the Board appoint a Coal Export Advisory Committee consisting of such number of persons as he may think fit being persons—
- (a) appointed by him to represent the Board, and
- (b) appointed by him from amongst such number of persons nominated by such bodies as the Minister thinks fit, to represent persons having special knowledge of the business of selling coal in foreign markets and to foreign consumers and for bunker purposes. Provided that the Minister shall be entitled to appoint in addition a person not so nominated if he is satisfied that such person is particularly well qualified to serve on such committee.
§ (2) The Coal Export Advisory Committee shall be charged with the duty of considering all questions and matters relative to the promotion and development of the export trade in coal and products of coal and of the coal bunker trade and of advising the Board in respect thereto."
The noble Lord said: My Lords, during the Committee stage of the Bill I put down an Amendment to secure the appointment of a Coal Export Council to be charged with looking after the export trade in coal. The noble and learned Lord on the Woolsack would not accept that Amendment for various reasons. One of the reasons put forward against the
Amendment was that the proposed Export Council would report to the Minister and not to the Coal Board. Perhaps I may quote the words of the noble and learned Lord:
The right way to deal with this matter is to set up an organization to advise the Board, who are responsible for this thing, and not to set up an organization parallel to the Consumers' Council.
I think the proposed Export Committee which I propose in this Amendment fully covers his objection; it would make its report to the Board and not to the Minister. Your Lordships will no doubt note in subsection (1) (b) of the proposed new clause the material words: "Persons having special knowledge of the business of selling coal in foreign markets." At the present time the British Coal Exporters' Federation is the organization which has studied this question of foreign markets very thoroughly, and has built up a very great knowledge of these markets. Whatever may happen, whether there is a Statutory Commission or not, the Government will have to turn to this export organization in order to get this information about export.
§ The Federation came into existence twenty-six years ago, and it is interesting to note that during the 1926 strike it reversed its activities and imported 20,000,000 tons of coal into this country. Therefore it should be well versed in the export and import of coal. The Federation has been reorganized and is prepared to assist the Minister and Coal Board in any way. I need hardly say that at the present time they are disturbed with the quality and grading of coal which is now going out of the country. It really is essential that we should improve that at the very earliest possible moment, otherwise our foreign markets will be lost.
§ In another place there was a question put to the Minister of Transport, and his reply was that 500,000 tons of bunker coal had been bought during the last six months by our ships, and cost something like four million dollars. I think it is essential that we should look after our export trade to the very best of our ability. I beg to move.
After Clause 3, insert the said new clause.—(Lord Teynham.)
§ VISCOUNT LONG
My Lords, I rise to support my noble friend who has moved 12 the insertion of this new clause. It occurs to me on reading through this Bill that no special attention is paid to this vital aspect of our trade in coal, the export trade. I cannot help feeling that there should be some specially qualified people appointed not only to advise the Minister but to look into all the technical questions arising from the export of this vital commodity in which, I understand, prior to the war we were the greatest exporting country in the world. Unless we do have experts on this matter to advise the Board and the Minister, we shall be running a grave risk of losing certain very vital markets which, had we had the expert advice suggested in this new clause by my noble friend, we should have been able to obtain. I therefore support the new clause.
§ THE MINISTER OF CIVIL AVIATION (LORD WINSTER)
My Lords, I can assure the noble Lords who have spoken that the Government fully appreciate the importance which attaches to the export trade, and will certainly do everything in their power to foster and support that trade. As regards the proposals to that end contained in the Amendment, the new clause would require the Minister to appoint a Coal Export Advisory Committee, consisting of representatives of the Board and of persons nominated by exporters' interests. The Committee would act in an advisory capacity to the Coal Board. There are substantial reasons for resisting this Amendment. The Bill, after all, is a legal instrument, and not a manifesto. Expressions of good intentions are not in themselves sufficient reason for introducing new clauses into the Bill. Experience has shown that statutory advisory committees have a way of outliving their usefulness. An example of that is the Coal Advisory Committee which died a natural death, and whose interment is provided for by Clause 39 of the present Bill.
The noble Lord, Lord Teynham, in drafting this new clause, seems to me to have accepted the Lord Chancellor's reasoning that an Export Committee would essentially be advisory to the Coal Board, but the noble Lord's attempts to give that statutory recognition seem to me to have led him into something of an inconsistency. He proposes the appointment by the Minister of a Committee to advise the Board. This would be a completely unsatisfactory arrangement from 13 the point of view of the Board, who would really have very just grounds for complaining if this provision were enacted. They would have the right to complain that the Bill then would not leave them sufficient elbow room to get on with the job in their own way. The Board's organization for exports is essentially one which might be expected to be subdivided into regional schemes, where the nature and conditions of the export markets—as for instance, those for South Wales and Durham—differ so very materially from each other. Yet in spite of his anxiety that the consumers' councils should be capable of being appointed on a regional basis, the noble Lord now seems to suggest limiting provisions in the case of export which would tie the Board to one statutory exports committee. This I feel would inevitably prove hampering to the Board's regional organization. These are substantial objections to the new clause, as proposed, and while fully sympathizing with the noble Lord's anxiety and care for the export trade, I hope that in view of the arguments which I have advanced he will feel able to withdraw his Amendment.
§ VISCOUNT SWINTON
My Lords, I think that in his reply the Minister was dealing with two separate things as if they were one. The suggestion which was originally made was that there should be an Export Council like the Industrial Consumers' Council and the Domestic Consumers' Council. But we got away from that during the debate in the Committee stage, and I thought that we rightly got away from it. If we were back in that position (which we are not) then there might be force in the argument that if we set up a consumers' council for exports we ought to provide that there should be regional councils as well. But that is not what my noble friend is now proposing. I should like to ask where, if there is complaint in connexion with the export trade (which after all is a great and important branch of our industry) it should go. Would it be appropriate for the Industrial Coal Consumers' Council to deal with a complaint of, say, inadequacy in regard to the export industry? I imagine that that is so.
§ VISCOUNT SWINTON
Then, speaking for myself, I should be perfectly satisfied 14 that there should not be a consumers' council for export. That is not put forward. What is put forward is that there should be an advisory body which would assist the Coal Board in developing the export industry. I am speaking now without consultation with my noble friends, but I think that the proposed committee ought to work in the closest touch with the Board, that it ought not to cramp the style of the Board, but be advisory in character. You cannot have two executive authorities. Therefore the appointment of such a body might well rest with the Board and not with the Minister. I think that that would make the association close and intimate. At this initial stage, I think it would be very wise of the Board to associate with themselves (they have an extremely good export director) some of those men who are very closely acquainted with the export business. This would not cramp the style of the Board, it would not give them a perpetual tenure, and I believe that the Board would get value from them. I have often used such people in a Ministerial capacity myself, and in this connexion I may take an example from the U.K.C.C., which worked entirely with Government capital, and did a pretty big job during the war. We found it valuable to have panels of men in different business circles upon whom we could call. I should have thought it would have been a wise thing to use that system here. Whether anything is put in the Act or not to ensure it, I should have thought an assurance could easily be given that the Board would, at any rate, give consideration to the appointment of an advisory committee, that committee being appointed, if it is thought preferable, by the Board itself.
§ LORD WINSTER
My Lords, I feel very considerable sympathy with many of the points which the noble Viscount has raised but I will deal with only two of them now. I think it may be taken as absolutely certain that the Board will consult with these experts of great experience to whom the noble Viscount has referred. But it seems to me that there are objections to making that a statutory requirement. The noble Viscount's suggestion about the appointment of the coal export advisory committee by the Board raises a different point. The noble Lord, Lord Teynham, has suggested that the Minister should appoint a committee 15 whose duty it would be to advise the Board and, as I have said, I see considerable objections to that course. I feel that the Board would object to such an arrangement and, indeed, would have very just grounds for complaining about it. For these reasons I hope that the noble Lord may now see fit to withdraw his Amendment.
My Lords, I am sorry that the Minister is not prepared to accept the formation of a statutory export advisory committee. He has expressed his views on the importance of the export trade and agrees that the Coal Board must have expert advisers. It is just as important, I suggest, to have an export committee under nationalization as under private enterprise. This Bill will affect a very large number of foreign coal importers all over the world, and as the noble Viscount, Lord Swinton, has said, unless there is provision to enable them to put forward their complaints they will feel aggrieved. I understand that they will be able to do so under the Industrial Consumers' Council.
Then perhaps it would be possible to put in some words to make that clear. At the moment I do not think it is at all clear. I do hope that perhaps in the next stage of the Bill the Government will consider putting some words in Clause 1 to show that export is one of the functions of the Coal Board. I feel that export has been entirely left out and that it is essential that it should be included somewhere, even if the Government are not prepared to accept this Amendment.
§ VISCOUNT MAUGHAM
It is just possible that my noble friend's desires would be met by putting the words "at home or abroad" in Clause 4 (2) (a). The subsection describes the Coal Consumers' Councils, and their duties, and says they are to represent "consumers of coal, coke and manufactured fuel respectively …" We may perhaps add to that, the words "at home and abroad."
§ THE LORD CHANCELLOR
My Lords, We will certainly look into that, although I personally do not think that it is necessary. I do not for one moment doubt that people who buy coal are consumers 16 of the coal, and that therefore they would come in under that clause. Neither do I doubt for a moment that the Board will establish these Export Councils. I think it is quite essential that they should. I should imagine, as the noble Lord has pointed out, that the problems of Durham are different from those of South Wales; the conditions are different. I am anxious to keep this matter flexible and as I said last time I would wager a very large sum of money on this. Obviously I cannot assert positively what the Coal Board will do, because the Board are not constitutionally in existence. Of course there will be these Export Councils. I want these Councils to be appointed by the Board, and not by the Minister, and I want the whole machinery to be as flexible as possible. I hope that the noble Lord will be satisfied.
I am very grateful for the assurance from the noble and learned Lord on the Woolsack, and I beg leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 4:
§ Consumers' Councils.
§ 4.—(1) There shall be established for the purposes mentioned in this section two consumers' councils, to be known respectively as the Industrial Coal Consumers' Council and the Domestic Coal Consumers' Council.
§ (2) Each of the said councils shall consist of such number of persons as the Minister may think fit, appointed by him to represent the Board, and
- (a) in the case of the Industrial Coal Consumers' Council, after consultation with such bodies representative of the interests concerned as the Minister thinks fit, to represent consumers of coal, coke and manufactured fuel respectively, for industrial purposes or other purposes involving supply in bulk, and persons engaged in organising or effecting the sale or supply of coal, coke and manufactured fuel respectively, for those purposes;
- (b) in the case of the Domestic Coal Consumers' Council, after consultation with such bodies representative of the interests concerned as the Minister thinks fit, to represent consumers of coal, coke and manufactured fuel respectively, for domestic purposes and other purposes not falling within the preceding paragraph, and persons engaged in organising or effecting the sale or supply of coal, coke and manufactured fuel respectively, for those purposes.
§ (3) The Industrial Coal Consumers' Council shall be charged with the duties—
- (a) of considering any matter affecting the sale or supply of coal, coke or manufactured fuel for the purposes mentioned in paragraph
17 (a) of subsection (2) of this section which is the subject of a representation made to them by consumers for those purposes of coal, coke or manufactured fuel, as the case may be, or which appears to them to be a matter to which consideration ought to be given apart from any such representation, and, where action appears to them to be requisite as to any such matter, of notifying their conclusions to the Minister;
- (b) of considering, and reporting to the Minister on, any such matter which may be referred to them by the Minister.
§ (4) The Domestic Coal Consumers' Council shall be charged with the like duties in relation to the sale or supply of coal, coke and manufactured fuel for the purposes mentioned in paragraph (b) of subsection (2) of this section.
§ (5) On the notification or making to the Minister by either of the said councils of their conclusions or report on any matter, if it appears to him, after consultation with the Board, that a defect is disclosed in the Board's general arrangements for the production, sale or supply of coal, coke or manufactured fuel, as the case may be, he may give to the Board such directions as he may think requisite for remedying the defect, and the Board shall give effect to any such directions.
§ (6) The said councils shall be furnished by the Minister with such clerks, officers and staff as appear to him, with the concurrence of the Treasury as to numbers, to be requisite for the proper discharge of their functions, and the Minister shall pay to the members of the said council such allowances, and to the clerks, officers and staff of the said councils such remuneration and allowances, as he may with the approval of the Treasury determine, and shall pay such expenses incurred by the said councils as he may so determine.
§ (7) Provision may be made by regulations for or in connection with any such matters in relation to the said consumers' councils as are mentioned in subsection (7) of section two of this Act in relation to the Board, and for the appointment of a chairman of each of the said councils, with or without provision for another to act in his place, and, subject to the provisions of any such regulations, the said councils shall have power to regulate their own procedure.
§ 3.21 p.m.
LORD BALFOUR OF INCHRYE moved, at the end of subsection (2), to insert:
(c) for the purposes of the two preceding paragraphs the Minister shall invite the said representative bodies to nominate such number of persons as he may think fit and the Minister shall appoint the members to represent the said consumers on each of the said Councils from the persons so nominated provided that the Minister shall be entitled to appoint to each council in addition a person or persons who have not been so nominated if he is satisfied that such persons are particularly well qualified to serve on such council.
The noble Lord said: My Lords, this Amendment follows a debate which your
Lordships will recollect we had on the Committee stage on this particular point. The purpose of the Amendment is to put on the Minister the obligation to consult the large organizations representative of various interests when he is appointing the members of the Consumers' Councils, industrial and domestic. At the same time this Amendment is so framed as to endeavour to meet the two points made very forcibly by the noble and learned Lord, the Lord Chancellor. The noble and learned Lord was averse to any suggestion of forcing delegates upon the Minister. He said he felt that the very essence of a panel was to have a large number of names from which to select. This Amendment lays down that the Minister can demand from those organizations such a number of names as the Minister thinks necessary. I hope therefore that the Government will feel that the point made in their first objection has been met.
§ The second point which the noble and learned Lord, the Lord Chancellor, made, was that the Minister might wish to go outside these representative organizations in selecting the personnel for these Councils. I have met that point in the provision which allows the Minister, if he so wishes, to go to people outside these representative organizations if he is satisfied that such persons are particularly well qualified to serve on the Council. We do not approach this question in any suspicious frame of mind but I recollect the words uttered by the noble Lord, Lord Winster, a moment ago when he stated that this Bill is a legal instrument. We want to put into a legal instrument certain provisions, and assurances are not enough. Governments come and Governments go. What we have to look at is the legal instrument as written and interpreted, if necessary, by the Courts. These Consumers' Councils are the only instruments by which the public can voice their protest, should they desire to protest. Therefore, I hope that the Government will feel that this Amendment is so worded as to fulfil the purpose that we have in mind while at the same time we have met the two objections voiced by the noble and learned Lord, the Lord Chancellor, on the Committee stage. I beg to move.
Page 4, line 42, at end insert the said new paragraph.—(Lord Balfour of Inchrye.)
§ VISCOUNT SWINTON
My Lords, Ds the noble and learned Lord, the Lord Chancellor, was so kind to me about this Amendment on the last occasion I will just add a word or two to the plea of my noble friend who has moved this Amendment. Those of your Lordships who were not able to be present last time will not have heard the remarks of the noble and learned Lord, the Lord Chancellor, and so perhaps I may be forgiven if I quote what he said on that occasion. The noble and learned Lord said:I do not think that there is very much between the noble Viscount and myself. I shall recommend my right honourable friend the Minister of Fuel and Power to give that suggestion very favourable consideration. I agree with the noble Viscount that what is wanted is public confidence. I think that is very important. I am not at all disposed to disagree with the idea that a panel is a good suggestion, provided it is a sufficiently large panel to give the Minister a sufficiently large measure of selection. …Here we make the panel exactly as large as the Minister himself wishes it to be. Then, on the last occasion, the noble and learned Lord, the Lord Chancellor, went on:… with the safeguard with which the noble Viscount agrees, to meet cases—I do not think they will often arise—in which somebody who has not been suggested should obviously he put on it.Your Lordships will see that this Amendment proposes that the Minister shall have the opportunity of appointing additional persons, who have not been recommended on the panel, if the Minister thinks that they have peculiar qualifications for the purpose. Therefore, I think, we have met both the points which the noble and learned Lord raised last time. The noble and learned Lord, the Lord Chancellor, if I may quote further from what he said last time, went on:I suggest that this Amendment should be withdrawn because the word ' nominated ' is unsatisfactory, and that he should allow me a little latitude to discuss the matter and devise some method of meeting that point.I am very grateful to the noble and learned Lord for the way that he has recast one or two Amendments that I have moved. I think he will agree that we have recast this one in a form which meets all the points raised on the previous occasion. We have accepted readily that members of the Board should be represented upon these Consumers' Councils and I want to stress only what the noble 20 and learned Lord himself said last time, that what is wanted is public confidence.
These Consumers' Councils are the one recourse which the consumer has if he is dissatisfied. It is of the utmost importance not only to the public, but equally to the Government, if I may respectfully say so, that there should be a good tribunal to which the consumers can go and that the public should feel confident that they have a good and wise tribunal. They will not have that confidence if the Minister takes the power—after consultation, if you please, with certain bodies—to appoint these councils' "without giving any opportunity of putting up a panel of names. It will be said in that event—I daresay unjustly—that the Minister will not try to make a good selection. It is human nature, if you have not been satisfied, to blame the tribunal. I do most respectfully suggest that the Minister would be very ill advised to give people who will not get satisfaction from the tribunal the opportunity of saying what they would not be slow to say if this Amendment is not inserted, "Ah well, the Minister appointed the tribunal; the Minister was the judge in his own court."
We want to avoid that. I want, as we all do, to get the best tribunal. We all want to feel—not merely those of us in this House, but everybody outside it because everybody is concerned as a consumer of coal—that we have got the best tribunal. We on this side have tried to meet, and I think have successfully met, exactly those very sound points which the Lord Chancellor made in the Committee stage, and have recast the Amendment in this form.
§ 3.32 p.m.
§ LORD WINSTER
My Lords, the Government have given consideration to the points raised in the debate on this matter in Committee, and have given consideration also to this Amendment. The Government recognizes the attempt which has been made in this Amendment to meet the points raised by the noble and learned Lord on the Woolsack. But in spite of that careful consideration, the Government are unable to accept the Amendment. It would have the effect of requiring the Minister to invite nominations from such bodies representative of the industries concerned as the Minister might think fit, and also of requiring him to appoint members of the Councils from 21 amongst those nominations, together with any other persons who are, in the words of the Amendment, "particularly well qualified to serve on such Council."
I doubt it the Amendment as drafted would be very effective for the purpose which the noble Lord has in view, because there would be no limit to the number of persons whom the Minister might require to be nominated by each representative body. There would also be no specified number of nominees which the Minister was required to appoint; therefore, if he so wished, he might appoint only two members. Again, there is no limit on the number of "particularly well qualified" persons whom the Minister might appoint to the Councils. For those reasons, I doubt if the Amendment would be completely effective for the end which the noble Lord has in view.
Apart from those practical considerations, there are also certain objections of principle involved. The Minister has deliberately sought to avoid the appointment of nominees, and the Board are not drawn from nominees of any particular interest but from persons who are, in effect, to use the words of this Amendment, "particularly well qualified." There seems to be no case for accepting nominees in the case of the Councils, but rejecting them in the case of the Board. I think it would be very difficult indeed for the Minister, under such a provision, to resist the claims of a great variety of bodies representative of some aspect of coal consumers' interests, and each claiming to be allowed to nominate candidates to the Councils. I think it much easier to discriminate regarding the appointments to the Councils than to limit the number and variety of nominations to panels. A very large number of bodies indeed would certainly expect to be given the right to nominate to the panels. Every trade organization, for instance, would probably expect to be allowed to nominate, and it would be an extremely difficult and invidious task for the Minister to discriminate between them. There would be a grave possibility that the task would be so difficult and so invidious that probably the matter would end by accepting the nominations of all and sundry, and that would certainly be objectionable, because what we hope to do is to keep the Councils down to small numbers of specially qualified people who 22 will not be bound by any narrow or sectional interest. So I feel that there are objections, both practical and of principle, to the Amendment which is proposed, and therefore, while fully recognizing the objective which the noble Lord has in view, I regret the Government cannot accept it.
§ 3.35 p.m.
My Lords, I would make one last appeal to the Government to moderate their attitude to this proposal, which indeed is a very reasonable one. I think all of us, on whatever side of the House we sit, fully recognize the anxiety of the Minister that he should not be compelled to accept individual nominees who are imposed upon him by somebody else. It may be a good plan that he should do so, or it may be a bad plan, but most Ministers would object to that, from whatever Party they came. This Amendment, for that reason, has been extremely broadly and moderately drawn. There is no intention to impose or foist any specific individuals on the Minister. The object of the Amendment is merely to provide the Minister with a panel, selected by those who, after all, are most qualified to know who is a suitable person to sit upon the Committee, from which panel the Minister himself can choose whatever individuals he likes. The final choice is left entirely to him.
Nor is that all. I had a slight impression from the last speech of the noble Lord, Lord Winster, that these individuals were to constitute the whole Council. They are not. We have specifically tried to meet the Government on this point, and, as my noble friend Viscount Swinton has already said, it is definitely laid down that the Minister can add anyone he thinks proper to the individuals who are chosen from the panels. He can have one or two or as many as he likes. We have made it as easy for the Minister as we possibly can. I do urge on the Government that this is a very moderate proposal, and it is designed only to ensure that those who are selected for what, after all, are these extremely important Councils, should have the confidence of those who are immediately concerned in the issues which are likely to be raised before them. After all, the position of the consumers is important. It is intended that the position 23 of the Government, as producer, will be safeguarded in this Bill.
In order to get a true balance it is therefore essential that the interests of the consumers should also be safeguarded, and that they should be fully satisfied that their interests are safeguarded. I do not think anyone will disagree with that proposition. It is already agreed in this Bill, in the wording already approved, that the Minister will consult with the interests concerned as to representation on the Councils. I really cannot see why this small advance on that should be refused. The noble Lord, Lord Winster, said—I thought rather surprisingly, if he will allow me to say so—that he could imagine utter confusion and chaos, with all sorts of organizations coming in and saying they represented consumers of coal. The Bill already says, in the case of the Industrial Consumers' Council, that the members shall be appointed by the Minister "after consultation with such bodies representative of the interests concerned as the Minister thinks fit." If he can decide what are the bodies with whom he consults, surely he can decide what are the bodies to whom he has to apply to send him a panel of names. There really is no difference between the two, and if what is suggested is impossible, then the whole of the clause drafted by the Government falls by the board.
I believe that this is an eminently democratic proposal. I should have thought that this would have appealed to noble Lords opposite. Indeed, I thought we had won our point on Committee stage. I am sure I never heard such a sympathetic reception given to any other Amendment as was given by the noble and learned Lord, the Lord Chancellor. The words which he used have already been read out by my noble friend Viscount Swinton, and therefore I do not wish to repeat them at length, but the noble and learned Lord in effect did say that he thought a panel was a very good idea, so long as it was sufficiently large. This panel can be as large as the Minister wishes it to be. How large that panel is, is left entirely to him. In view of what the noble and learned Lord said, I cannot see why the Government are unable to accept the proposal. I have a faint suspicion that the noble and learned Lord is perhaps rather more sympathetic to the proposal than is 24 the Minister. I do not know whether that is so. The noble and learned Lord, the Lord Chancellor, has an admirable Liberal past. The Minister, so far as I know, has not. It may be a reversion to his earlier views—
He has both, I am sure. At any rate, I do regard this as what may be called a Liberal proposal. I do not want to press the Amendment to a Division—we do not wish to press any Amendments to a Division if it can be avoided—but unless the Government are prepared to modify their view, I am afraid we have no option.
§ THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON)
My Lords, we desire to be accommodating. Perhaps the noble Lord will let us report the discussion again to the Minister, and we will consider whether on Third Reading we cannot meet the point.
My Lords, if we are going to press on with this Amendment, which is thought to be so important by noble Lords. I think there is one alteration needed in the wording of the last line but one. I am surprised that the noble and learned Viscount, Lord Maugham, has not spotted this.
I am sure he will agree with me that where the noble Lord, Lord Balfour of Inchrye, says "the Minister shall be entitled to appoint to each council in addition a person or persons who have not been so nominated if he is satisfied," it should continue, not "that such persons are particularly well qualified" but "that such person or persons is or are particularly well qualified." Otherwise it does not make English.
THE MARQUESS OF READING
My Lords, I am glad to hear from the noble Viscount the Leader of the House that this matter will be reconsidered before the final stage of the Bill. I desire to add only one word to support the Amendment which has been moved and to which the noble Viscount, Lord Cranborne, has spoken, in order if possible to emphasize what has already been said about the 25 desirability of accepting not necessarily the actual form, but something in the form of the Amendment. In Clause 4 (2) (a) as it now stands, it is the duty of the Minister, after consultation with such bodies representative of the interests concerned as he thinks fit, to take certain action, and to select people who are to represent the consumers of coal. Who are the persons best calculated to represent the consumers of coal? Surely the persons whose names have been put forward by those organizations which the Minister himself has chosen as being representative.
§ LORD BALFOUR OF INCHRYE
My Lords, I am sure the whole House is grateful to the noble Lord, Lord Strabolgi, for his suggestion of a drafting Amendment. As the Government are going to look into this matter again, on that assurance I beg leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ 3.45 p.m.
VISCOUNT SWINTON moved, after subsection (8), to insert:
(9) A regional industrial coal consumers' council or a regional domestic coal consumers' council may be appointed by the Minister for any prescribed locality for which such appointment appears to him to be expedient, whether in consequence of or apart from a recommendation in that behalf of the Industrial Council or the Domestic Council, as the case may be, established under subsection (1) of this section, and provision may be made by regulations for the dissolution of a regional council appointed for any locality if it appears to the Minister that such a council is no longer needed for that locality, or for the variation of the locality for which such a council is to act.
(10) Where there is a regional council for any locality, then, as regards consumers and sale or supply in that locality, the regional council shall be charged with the performance of such of the duties imposed on the Industrial Council or the Domestic Council, as the case may be, by subsection (3) or (4) of this section as may be prescribed, and provision may be made by regulations as to the regional council's reporting to the Industrial Council or the Domestic Council, as the case may be, established under subsection (1) of this section or direct to the Minister, and generally as to the relations between the regional council and the said Industrial Council or Domestic Council.
(11) Subsections (2), (6) and (7) of this section shall apply to a regional council as they apply to the Industrial Council or the Domestic Council, as the case may be, established under subsection (1) of this section, with the substitution of references to consumers in the locality for which the regional
council is to act and to sale or supply therein for references to consumers and to sale or supply generally, and subsection (5) of this section shall apply on the notification or making direct to the Minister of conclusions or a report of a regional council.
The noble Viscount said: My Lords, in moving this Amendment which is to establish regional councils, I should like at once to acknowledge my indebtedness to the noble and learned Lord and to the Ministry for a great deal of help in getting the Amendment into a convenient form. I will not read the whole of these long subsections, but what the Amendment does in a word is this. It gives the Minister a discretion to appoint regional councils either where such appointment is recommended by the central council itself or on his own initiative if he thinks it would be wise. It also gives the Minister a discretion to order such regional councils to report direct to him, as might be desirable in the case of a very large regional council, say a Scottish council reporting on some important matter of principle, or, as would I think probably be generally a convenient course, that these regional sub-councils should report and work through the main consumers' councils, industrial and domestic. It also gives—which I think it was important to safeguard—power to the Minister to give to these regional councils all those facilities which he can give to the two main councils, which includes paying their expenses. There was a suggestion made that probably the Board could do that, but I think we all felt it was desirable that the Minister should be directly responsible for that and that it should not be left to the Board. I think all the points we discussed last time have been met, and the drafting I highly commend: it is not my own; it is that of the most expert draftsmen who can be secured. I therefore beg to move.
Page 5, line 43, at end, insert the said new subsections.—(Viscount Swinton.)
§ THE LORD CHANCELLOR
This Amendment really arose from the discussion we had on the Committee stage on an Amendment moved by my noble friend Lord Llewellin which was not satisfactory. The noble Viscount, Lord Maugham, made some suggestion and the noble Viscount, Lord Swinton, followed it up. I think this is an improvement on the 27 Bill and I will not detain your Lordships longer. I simply say that we are prepared to accept it.
§ On Question, Amendment agreed to.
§ Clause 7:
§ Transfer of rights and liabilities under contracts.
§ (2)If in the case of any of the provisions of such a contract as is mentioned in the Second Schedule to this Act, being provisions so entered into as to render that Schedule applicable to them subject to the limitations contained in this section, the Board are of opinion that that Schedule ought not to apply thereto, either at all or to any particular extent, on the ground that they were not reasonably necessary for the purposes mentioned in paragraph 1 of that Schedule, or that they were entered into with unreasonable want of prudence, the Board may, at any time within twelve months from the date as from which the Board would become subject to liabilities thereunder apart from this provision, give notice to the effect that they are of that opinion to each of the parties to the contract, and if the Board give such a notice, the Second Schedule to this Act shall not apply to the provisions to which the notice relates, either at all or to the extent specified in the notice, as the case may be:
§ (3)In the case of a provision for the rendering of personal services or for the giving of consideration therefore, being a provision which)- was entered into on or after the first day of August, nineteen hundred and forty-five, or which has been varied after that date, a reference to arbitration as aforesaid shall not be made unless the Minister consents.
THE LORD CHANCELLOR moved, in subsection (2), after "section" to insert
and being provisions which were entered into on or after the first day of August, nineteen hundred and forty-five, or which have been varied after that date".
The noble and learned Lord said: My Lords, this is in substance the Amendment that was moved by my noble friend lord De L'Isle and Dudley. I am not sure I am not giving him, I will not say more than he deserves, but more 'than he asks for. By this clause, if we could show that a contract entered into was an unreasonable one, we could take it to arbitration. The question was raised whether or not we could terminate. I have come across an extraordinary contract at 3s. a ton which is still running. But on reflection, and moved by the advocacy of the noble Lord, I have thought I would content myself with saying that even this power should only apply to a contract entered into or varied after August 1, 1945.
Your Lordships will remember the significance of that day. It was on that day that the Government pledged themselves to nationalize the coal mines. The Central Committee of the Miners' Association held their meeting on the following day, after which they made a statement that they noted the Government's decision and the colliery owners placed themselves at the Government's disposal. Then there was a meeting at which no fewer than forty-three representatives of the Mining Association, from every district of the country, were received by the Minister, who made the following statement about colliery liabilities:
We shall accept responsibility for such liabilities with this exception. Fresh liabilities and liabilities that are unusual may require to be examined. I am trying to put this as delicately as I can. It may be that it has occurred to some people in the industry to incur fresh liabilities of a personal kind in the hope that they will be accepted by the Government. I should like to say that we must safeguard ourselves against that.
To that statement the spokesman of the Mining Association replied, "You have made it quite clear what you mean." I think I am honouring that when I say that I will not seek to go back beyond a contract made earlier than August 1, 1945. I beg to move.
Page so, line 29, after ("section") insert the said words.—(The Lord Chancellor.)
§ LORD DE L'ISLE AND DUDLEY
My Lords, I rise to thank the noble and learned Lord on the Woolsack for moving this Amendment. It is a great relief to me, and I think to other noble Lords on this side of the House, that he has thought fit to meet us in this. We attach great importance to seeing that there are words in the Bill which do not reverse contracts which have been entered into between citizens and corporations before this very important date. I would like to express my very warm gratitude to him for meeting us in this way.
§ VISCOUNT MAUGHAM
My Lords, I should like to associate myself with what the noble Lord, Lord de L'Isle and Dudley, has just said. I think the noble and learned Lord on the Woolsack is to be congratulated on moving this Amendment.
§ On Question, Amendment agreed to.29
§ 3.53 p.m.
LORD BALFOUR OF INCHRYE moved, at end of subsection (3), to insert
provided that such consent shall not be refused unless the Minister has given to the person entitled to the benefit of the contract an opportunity to make representations in support of an application in writing for such consent.
The noble Lord said: My Lords, this is a point which was not dealt with on the Committee stage. My noble friends on this side of the House and myself felt it was worth putting down an Amendment to ensure that all those affected by the Bill should get the greatest degree of fair treatment. As the Bill stands at the present time, personal service contracts entered into after 1st August, 1945, cannot go to arbitration except with the Minister's consent, and we feel that that is not fair. First of all, it denies the employee with a contract made after 1st August, 1945, the right to go to arbitration, if the Board repudiates the contract, unless he first receives the Minister's consent. If the Minister does not give his consent, it means that the man affected will not have the right to be heard necessarily either by the Board (who can repudiate the contract) or by an arbitrator. Indeed there is nothing laid down to ensure that he will be heard by the Minister. The purpose of this Amendment is to make sure that if the man applies in writing to the Minister, the Minister shall hear his representations before refusing his consent for the case to go to arbitration.
§ The second thing we want is to get rid of what we feel is a bad precedent. According to the programme announced by the present Government we are going to see measures in the future for the nationalization of other industries. There are gas, electricity and railways—enough to keep them busy for some time, I think. In many of these projects the period of waiting is likely to be longer than it has been in the case of the coal industry, and undoubtedly the number of contracts affected will be greater. Therefore I submit to your Lordships that it is worth looking at this matter, not only from the point of view of the Bill we are now considering but also from the broader point of view of the personnel affected by all nationalization proposals.
§ Let me make it quite clear that we do not in any way seek to protect or 30 shelter any transaction which is not bona-fide; in fact we will do everything we can to discourage it. Any service contract of an unrasonable nature or any fresh liabilities of a personal kind at all which should not have been entered into, we would not countenance at all. What we want to do is to get over the practical difficulty so that during the waiting period after August, 1945, new and proper contracts can be entered into without a man feeling that he is running an unfair risk. Undoubtedly during this waiting period contracts will have to be made, due to deaths, retirements and promotions. As I see it at present, employees are faced with the choice of either refusing a new contract—let us say on promotion to some new job—or of abandoning their existing contract, with its fight to arbitration, and in its place accepting a new contract, without any such rights. It is in order to protect men affected by perfectly bona-fide transactions that I beg to move this Amendment.
Page 11, line 9, at end insert the said proviso.—(Lord Balfour of Inchrye.)
§ THE LORD CHANCELLOR
My Lords, I am afraid we cannot accept this Amendment. I think we have done your Lordships rather proud in this direction already. From what I hear, I gather that there is no doubt that there have been cases (I am afraid their name may be legion) in which after August 1 1945, some people who had previously been directors have been given some sort of official position as servants of the company, at high salaries. If we were simply going to send those cases to arbitration, they would be extremely difficult to arbitrate about because the company would say, "We thought he was a valuable man. We happened to have a vacancy and therefore we appointed him." It would be very difficult to prove that the fellow was not worth it. Having regard to the observations, which I read to your Lordships, made at the interview on August 1, 1945, I feel that all those contracts should be suspect, although I have no doubt that the Minister will act reasonably and properly and that almost certainly a man will be able to put his case before the Minister in writing. I do not think I am unreasonable in adhering to the clause as it stands, and consequently I very much hope the noble Lord will withdraw his Amendment.
§ LORD BALFOUR OF INCHRYE
My Lords, it is quite true, as the noble and learned Lord says, that he has done us pretty proud in this direction, and therefore I do not press the Amendment. I only hope that those who trying to do the fair thing will not be penalized by the administration of this Act. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 15 [Payment by the Minister of costs of compensation procedings]:
§ 3.58 p.m.
§ LORD WINSTER moved, in subsection (1), to leave out the second "compensation" and insert "valuation." The noble Lord said: My Lords, this is a drafting Amendment only.
Page 20, line 28, leave out ("compensation") and insert ("valuation").—(Lord Winster.)
§ On Question, Amendment agreed to.
§ Clause 17:
§ Compensation for overhead expenses increase caused by severance.
§ 17.—(1) Compensation shall be made in respect of any increase in the proportion of the overhead expenses of the business of a company or other person having assets which included (but did not consist solely of) transferred interests to the volume of the business over which those expenses are spread, in so far as such increase is one due to the severance of those interests from the residue of those assets and not reasonably capable of being avoided or mitigated.
§ (2) The amount of the compensation to be made under this section in the case of any business shall be determined by a District Valuation Board designated by the Minister, by reference to the extent of the loss sustained or likely to be sustained at any time during the five years beginning with the primary vesting date in consequence of such increase as aforesaid by the company or other person whose assets are severed, subject to provision to be made by regulations for review of such determinations by referees in such cases and in accordance with such provisions as may be prescribed.
§ 3.59 p.m.
THE EARL OF DUDLEY moved to leave out subsections (1) and (2) and insert:
(1) In addition to any compensation payable under the provisions of this Act in respect of the transfer of any transferred interest, the owner of such an interest shall be entitled to receive compensation from the Board for any loss or damage, other than loss or damage sustained by the cessation of continuity of supplies of coal otherwise than under contract, which be may suffer in consequence of such transfer including any loss or damage suffered by reason of the severance of such transferred
interest from any other of the interests of that owner which are not transferred or by reason of such other interest being injuriously affected by anything done under the provisions of this Act.
(2) The amount of the compensation to be made under this section shall be determined by a District Valuation Board designated by the Minister.
The noble Earl said: My Lords, this is an important Amendment because it appears that a high principle of common justice is involved here. The point was raised on the Committee stage by my noble friend, Lord Teynham, and this Amendment is virtually the same with the exception that there have been some words added to it, to which I will refer in a moment. On the Committee stage the noble and learned Lord, the Lord Chancellor, promised to look into this, and I hope very much that he will accept this Amendment at this stage of the Bill. The Amendment aims at widening the grounds for claims for compensation by owners of transferred interests in cases where hardship has been imposed by virtue of the severance.
§ As the Bill is drafted the claim for compensation is limited, as your Lordships are probably aware, to overhead expenses, but there may be, and indeed there will be, many other cases of hardship caused by severance, which lie outside overhead expenses. When the noble Lord, Lord Teynham, moved this Amendment on the Committee stage, he referred to an instance where a combined undertaking gets a very low contract for power by virtue of its being a combined undertaking—that is to say, a colliery, steel works, or brickworks, and so on. After severance takes place, the assets which remain will have to pay a great deal more for their power, and hardship will be involved. There will be many other cases of a like nature.
The noble and learned Lord, the Lord Chancellor, when he replied to my noble friend on the Committee stage, admitted that the Bill is drafted quite deliberately to limit severance to claims in respect of expenses. He then went to to say:
If we widen the clause there would be an enormous variety of claims which could be brought on account of severance. Undoubtedly the cost of meeting the claims would be very heavy, and the difficulty of assessment … would be insuperable.
Surely that is a very unjust argument. If there is a just claim for hardship, that claim should be inquired into and met. To refuse a just claim for hardship in this
dictatorial way is something which we on this side of the House could not possibly accept. He goes on to say:
There is the exception in paragraph 19 (1) of the First Schedule, but broadly speaking my statement is right. In Part II it is an absolute obligation"—
that is, to transfer assets, either unconditionally or subject to arbitration under Parts III and IV
but under Parts III and IV it is possible to say, if they do not agree to arbitration, 'It is very hard to leave this pitch, which is virtually derelict. We demand that you take it over'.
That is not the right way of dealing with these claims. The owners may not want the assets taken over, and they may wish to retain them. If there is a just claim for damage on the part of those owners, caused by severance, that claim should be met and looked into, as we suggest by the District Valuation Board. The Lord Chancellor referred to the fact that they might claim in the future that these are transferred assets, and
… that they were prevented from obtaining their value on those favourable terms which they enjoyed when they owned their own coalmines. What is to be done there?
§ In order to meet that particular point, we have inserted the words, since the Committee stage, "loss or damage sustained by the cessation of continuity of supplies of coal otherwise than under contract." That is to meet the Lord Chancellor's point. That particular point has been dealt with earlier in this debate, and it is right, of course, that under the nationalized mines, equality of interest should be given to all industries, although very likely under present conditions, in the case of a combined undertaking, it may be quite right that coal should be sold to an ancillary undertaking at a lower price than it is sold to other industries and to the outside public. For example, the coalmine may have been sunk entirely with the funds provided by the iron and steel works. In view of the fact that great hardship and injustice will be imposed on owners of transferred interests if this clause is not widened, I hope very much that the Minister will accept this Amendment.
Page 22, line 15, leave out subsections (1) and (2) and insert the said new subsections.—(The Earl of Dudley.)
My Lords, I should like to support this Amendment. Perhaps 34 your Lordships will remember that during the Committee stage I moved a similar Amendment. I raised one point which I do not think has been touched upon, and that is in connexion with iron and steel works which may have had their colliery separate. It may occur, if and when nationalization of iron and steel takes place, that owing to damage caused by severance, the iron and steel part of the concern may be assessed at a very much lower value than it would otherwise have been. I think the noble and learned Lord, the Lord Chancellor, said he would look into that point and see what could be done about it. I would like to stress that again, and I hope it will be possible for the Government to meet our desire.
§ THE MARQUESS OF LONDONDERRY
My Lords, I hope the Government will agree with this Amendment, which my noble friend has proposed. It seems to me from the attitude of the Government, that they do not realize that the coal industry has been in existence for a great number of years. It is obvious that various interests have grown up which have been dependent to a very large extent on that industry. One realizes that ancillary industries of mines which have been on the downward grade have had to make their own arrangements for the future. A great many of these industries, however, are flourishing and prosperous by reason of their dependence on the coal industry which exists in the district. I think it would be right that the Government should consider all these interests on their merits and do what they can to assist them in the difficult position in which they will find themselves.
§ 4.7 p.m.
§ VISCOUNT SWINTON
My Lords, I would like to put one thing to the Government for their consideration, if not perhaps at this moment. The Lord Chancellor said last time that there was a remedy, and that if you are taking my land on the right-hand side, I can call on you to take the land on the left-hand side, and you must do it. In this way the owner will prevent severance arising. I should have thought that that might easily land the Government either in doing a great deal more than they meant to do, or in taking over a great deal more than they meant to take over. Obviously, there are some cases in which it is quite right to impose upon the Government the 35 obligation to take over. If you have been treating agricultural land badly in your mining operations, it is really quite worthless. You cultivate it in order to get what you can out of it, but it is a complete loss as an agricultural operation. It has been profitable to incur that loss, however, in order to get coal. It is right that whoever is working the coal should take over the farms and run them as best they can.
It does seem to me that both the Government and the owner might easily get into great difficulty in this matter. Here you have a case where the Government does not want to take the property over, and the owner does not want to get rid of the property, yet some damage has been done to that property by severance. Now the Government say that you have a remedy. They say, "We will not pay you compensation for damage by severance." This has got to be very carefully assessed, because we do not want fictitious claims made out, but it has always been recognized as a principle, ever since land was compulsorily acquired by any authority, either Government or local authorities, or railways or anybody, that compensation for damage by severance should be paid, and it ought to be most strictly assessed. It does seem to me to be a strange way of giving that compensation to say to the owner, "Well, all right, you have suffered some damage; you can force the Government to take over the brickworks, or farms, or any property which you own." I am sure the Lord Chancellor has construed this quite correctly. The Government would be bound to take that property over and pay for it. If they do not want it, and the owner does not want to part with it, the result is that a great deal more of public money will pass than would have passed by reason of a modest arrangement in respect of damage by severance. It would seem that everybody would be placed at a disadvantage—the Coal Board, the owner, and of course the taxpayer who would have to pay out more in compensation. If I have understood this aright—and I have considered the Lord Chancellor's legal opinion very carefully—it seems to me that we are making rather nonsense of this thing. Had not the Government better look at the matter again?
§ VISCOUNT MAUGHAM
My Lords, I wish to support what has been said in relation to this clause. I think the illustration given by my noble friend who has just sat down is not at all a bad one, and I would suggest another. It may be that the property which is not taken over is property the value of which depends very largely upon the use of the colliery land, the colliery surface, for purposes of access to markets or something of that sort. I am unable to see how, under the Bill as it stands, the owner of that piece of land which is not taken over is going to be compensated, since it may not lead, properly speaking, to an increase in the overhead expenses of the business such as are referred to in Clause 17. It would not be a question of overheads at all, but of another sort of damage. As the noble Viscount, Lord Swinton, has said (he did not actually mention the date but I will mention it because it is one of the dates, like 1066, which I can remember) since 1845, that is just 101 years ago, there has been in these compulsory purchase cases the right to damages by reason of severance. I cannot see that there should not be a right to damages by reason of severance in addition to the sum given in respect of increase in overhead expenses, in those cases where the owner of the land does not wish to part with the piece of land which is left to him and declines to exercise his option of insisting on its being bought by the Government. There is no reason in that case, so far as I know, why compensation should not be given to such an owner. We know, and I think we accept the view, that the Government under this Bill, which relates to very large items of property which are going to be acquired on behalf of the State and vested in the Board, are desirous of giving fair and adequate compensation for all property taken over. This is an item of loss which certain of the people whose property is being taken over will suffer, and no reason, that I know of, has been given why in the particular cases where the option is not the proper remedy, that compensation should not be given. I therefore support the Amendment.
§ LORD WINSTER
My Lords, compensation for severance is now dealt with in Clause 17 of the Bill, which provides that it shall be payable in respect of increases (due to severance) in the proportion of the "overhead expenses" of 37 a business to the volume of business over which they are spread; the amount being determined by reference to the loss sustained or likely to be sustained in the five years beginning with the primary vesting date.
The Amendment proposed by the noble Earl seeks to make provision differing from the provision made in the Bill in the following respects. Under the Amendment, compensation would be made for all loss or damage suffered by reason of the transfer of any transferred interest (with one specified exception which the noble Lord has read out) including loss or damage due to severance. Again, no limit is to be set to the period in respect of which the compensation is payable, and the compensation is to be made by the Board instead of by the Government.
The noble Earl referred to a similar Amendment which was moved by Lord Teynham in Committee. To the best of my recollection, it was pointed out on that occasion that the noble Lord's Amendment was outside the terms of the Money Resolution, and on that the noble Lord withdrew his Amendment.
§ LORD WINSTER
I would say that the present Amendment is within the terms of the Money Resolution, but the Amendment would certainly involve a very heavy financial burden upon the Board. Moreover, it would create really serious uncertainty as to the amount of the eventual liability, and as to the Board's ability to meet it out of their revenues. It would involve a great deal of extremely difficult assessment work by the District Valuation Boards, and also the probability of very numerous reviews before referees. It would constitute an encouragement to the Board to seek to take over assets which they might not really need as a means of avoiding possible claims for severance. The owner of the severed assets would apparently get compensation for any loss of profits he may have suffered as a result of severance, notwithstanding that he would 38 be receiving compensation in Government Stock for the transferred assets on the principles laid down in the Bill. The idea of compensation for severance being charged against the Board, it seems to me, would be open to the suggestion that the idea was a device with a view to getting round the terms of the Money Resolution.
In regard to the last point, it is true that there is an example in Clause 20 (3) of the Bill of an obligation to pay compensation being laid on the Board, namely where a payment is to be made to a person beneficially interested in respect of a restriction, right or liability, from which a transferred interest is freed under Regulations made under Clause 5 (7) (b). The two cases, however, are not parallel, because these payments would be offset by an appreciation in value of the transferred interest freed from the restriction.
Assuming that the noble Earl's Amendment were accepted, let us look at some of the kind of claims which could then be brought. Any increase in the price of the coal supplied by the Board, as compared with the price at which it was transferred to the severed part of the undertaking, could become the subject of a claim. So could any deterioration in the quality of the coal supplied by the Board, as compared with the quality formerly available from the undertaking's own pits. Any increase in transport costs resulting from having to draw supplies from a more distant colliery—for example, if the Board decided it was not in the public interest to continue to operate a particular colliery from which supplies had been drawn in the past—might give rise to a claim. Any inability to take advantage of the bulk purchase of supplies required for transferred assets and severed assets or a stiffening of the terms for severed assets as compared with the original undertaking—all those matters (and there are others as well) might give rise to claims. The Government therefore consider that the Bill as drafted affords all the protection against losses on account of severance which it would be reasonable and proper to provide. The Government are not prepared to accept any extension of the cases for which compensation may be claimed, because they are not prepared to put this burden on the Board. For those reasons I regret that the Government cannot accept the Amendment moved by the noble Earl.
39 The noble Lord, Lord Teynham, referred to a point in which concern was expressed on the Committee stage in another place about a composite undertaking which either had no right, or was unwilling, to transfer its residual property to the Board. An undertaking owning an iron and steel works was cited as an illustration of this point, which was raised in particular relation to what would be the effect of valuation on the property. It is a question which cannot be dealt with in the Coal Bill. For the reasons which I have given, the Government are unable to accept the Amendment of the noble Earl, and I hope he will not wish to proceed with it.
§ 4.23 p.m.
My Lords, I would like to suggest to the Government that this is a matter which at any rate might properly be given a little further consideration. We still have one stage of the Bill left, and I know that the Government wish to meet the House as far as they can. This is a very difficult and technical question, and I do not pretend that I understand it completely—no doubt like other members of your Lordships' House. One thing is clear: that this is not an Amendment which merely asks for higher compensation for severance. It raises the whole principle of compensation, the basis on which compensation is paid, and tries to take the Bill back to the basis which has been generally accepted in this country for the last hundred years. That is, as the noble Viscount, Lord Maugham, said, a very big issue to raise. The curious thing is that in all the speeches we have heard from the Government they do not deny the justice of our case. The noble Lord, Lord Winster, never contraverted that, and he said—in very bald words if I may say so—that "It may be just but it costs too much." That is a very discreditable thing for a spokesman in any Government to say. Here is this universally-accepted principle of English law. This Amendment asks for that principle to be adopted to the extent to which people are entitled to it under all past precedents. The Government say they may be entitled to it but it costs too much. I suggest to noble Lords opposite that that is not very defensible ground on which to stand, and I ask them once more if they will take the matter up with the Minister and consider it further. I do not think we are 40 asking too much. We do not want Divisions if they can be avoided; but if what is admitted on both sides of this House to be justice is sacrificed to pure expediency, we should be doing less than justice to ourselves.
§ LORD AMMON
My Lords, there is another point. If this Amendment were adopted it would delay indefinitely any settlement of compensation and would hold up all the outstanding questions of compensation. Secondly, by putting in the words "the Board will be responsible" it removes it from within the terms of the Money Resolution. At the same time it would have the effect, as has been already mentioned, of greatly increasing the cost, and would entail a very large number of Amendments throughout the Bill.
This is a new point which has been made—the suggestion that the Amendment involves an enormous number of consequential Amendments. It is also new to suggest that my Amendment would postpone indefinitely calculation of compensation. I cannot see that, although I am speaking without the book. There must be elaborate compensation in any case, and I cannot see any reason why my Amendment should cause an indefinite postponement of compensation. If justice is to be done, it is possible that a little delay may be necessary. At any rate I urge that noble Lords opposite, who have not made a particularly good showing on the principles involved and who have made a very frank statement of the reasons why the Government worded the Bill as they did, should give the matter a little more consideration.
THE MARQUESS OF READING
My Lords, I should like very briefly to support what the noble Viscount, Lord Swinton, has said. I do not propose to go into the technical aspect, but the one thing that has emerged and is disconcerting to the House is that the Government should say, "Whatever may be the fundamental justice of this question, we do not propose to consider what would be the just course, because either it is too expensive or it would take too much time." I have been brought up all my life more or less in the shadow of the law, and sometimes in close contact with the substance of it, and I must say that I find this a very horrifying doctrine to hear put forward 41 by the Government on a Bill of this magnitude. If this be just, and it is recognized as being just by noble Lords on both sides of the House, surely we are not going to have this subsidiary argument against doing what is admitted to be the just thing?
§ 4.29 p.m.
§ THE LORD CHANCELLOR
My Lords, may I say a word or two—I am always tempted by the noble Viscount who leads the Opposition. I should not be right in concealing from your Lordships that there is no chance whatever of the Government accepting this Amendment. If I were to get out of the difficulty by promising to consider it further I should not be playing fair with you. The terms of the Money Resolution, which are carefully drawn, are these:making compensation in respect of increased expenses due to the severance of transferred interests from other assets.This Amendment, I think, is drawn very skilfully to try to get out of the Money Resolution by putting what is a very heavy burden not on the Consolidated Fund but on the Board. We therefore would have two forms of compensation, one coming from the Consolidated Fund and the other from the Board, and the Board would be saddled with a very heavy burden of expense. If that expense ought to be borne at all, it ought to be borne on the Consolidated Fund. That is one reason why I am quite sure that we could not do it. There is another point, as I explained to your Lordships. In view of the fact that we have drawn the thing tightly in this way, we have included a provision in the Bill whereby a man may say, "If you are taking all that, and leaving me with this, subject to arbitration you must also take that." I agree in certain cases—not in all cases—we must take that over too. Therefore I think I am right in telling your Lordships what the position is. I have discussed all these matters very carefully with my colleagues. I am not ashamed to say we have put very considerable pressure on them, to try to get them to meet your Lordships. But on this point—I know the mind of the Government—they are not prepared to concede to this Amendment. I think it is only right that I should tell your Lordships that in order that your Lordships may take with regard to it the course you think proper.
§ 4.31 p.m.
§ VISCOUNT SWINTON
My Lords, with the leave of the House I should like to intervene again for one moment. The Lord Chancellor is always so fair with the House, that I want to put to him a point which I may have put wrongly, using the argument which he used the last time. I really put a twofold point to him. He has repeated the argument that in certain cases where a grievous wrong would be suffered, the owner can say, "I want you to take it over," and the Government will have to take the property over. It does seem to me a cumbrous way of doing business. I cited an example of a property which the Coal Board do not want to take over at all, where there is damage by severance, but where the owner says, "If I cannot be compensated for the damage by severance, which is much less than the purchase price of the whole property, then rather than suffer this damage, and get no compensation, I must ask the Coal Board to take my property over." He can force them to do it, with the net result that the Coal Board is forced to take over a property they do not want to manage, and the owner is forced to part with a property he does want to go on managing.
The noble Lord spoke of the net cost of this. There is no doubt there is compensation or payment in that case, which comes out of the Consolidated Fund, and the net amount paid out of the Consolidated Fund will be much larger than would be paid for damage by severance. That is the first point. The second point I should like to put to the Lord Chancellor is this. What is worrying most of us is not the scale of compensation. I do not know that I should personally feel so anxious about that. What has come out now and did not really come out the last time, and what does seem terribly unjust, is that there is damage suffered for which no compensation at all is going to be paid, unless the damage which is suffered is so great that it falls on the side of the line where you say, "Take over my property." Is that really the position? What is the justification of not paying any compensation to an individual who suffers a damage for which he receives no compensation in the purchase price of his mine or in any other way? It may be depriving him of a right of way. Is that really the position—that no regard is to be paid for such damage? 43 If I could see that the owner was going to get it by some other provision in the Bill, or by being relieved of some liability, it would be different, but is it really true that you are deliberately taking something away from him and giving him no chance of compensation?
§ VISCOUNT SAMUEL
My Lords, this raises an important matter of principle. During all the discussions on the question of nationalization in general, it has always been stated by the advocates of nationalization that they would carry out the process with complete fairness to all existing interests; that where a case could be made out that a person had suffered material damage, he would get compensation in one form or another. That has hitherto been the essence of the Government's policy. I must say that I was rather shocked by the speech of the noble Lord, Lord Winster, who made on my mind exactly the same impression as he did upon the mind of the Leader of the Opposition, namely, that he never discussed at all whether there was any equitable claim to be made. He said there would be very serious disadvantages if such a claim were held to be equitable, and were in fact made. It would cost a great deal, would involve difficulties of assessment, and might cause delay. Another point has been raised: it might be regarded as an evasion of the terms of the Money Resolution. But as to the equity of the matter, not a word was said. I should be perfectly prepared to accept the argument of the Government, if they showed that a claim was not in itself sound, but I am not at all prepared to accept an argument which deals, so to speak, with the concomitants of the question, and not with its essence, and the reply so far given can only remind me of what was said by a character in an old English play, "I never commit an injustice save with sufficient reason."
My Lords, it seems to me that we are in something of a difficulty. Regardless of the question of right or wrong, there is this question of the Money Resolution. The noble and learned Lord on the Woolsack stated, I thought, an unanswerable case—that this was a charge, if it was to be a charge, which should come not on the Board, but on the Consolidated Fund. If that is the 44 case, then clearly it is a matter which should have been argued and which should have been decided in one form or another in another place. What happens supposing your Lordships pass this Amendment today? It will—and I accept the noble and learned Lord's statement on this—in fact, be a charge on the Coal Board which should not rest upon the Coal Board. Supposing this Amendment goes back to another place, what will happen to it then? It will have to be disallowed as a charge on the Coal Board. But it has not been, and cannot be suggested here that it has been, a charge on the Consolidated Fund. Therefore it does seem to me that we are in a very difficult position. Frankly I do not know the answer to this question, and I should like to hear it.
§ 4.39 p.m.
My Lords, I think it is admitted that the House is in a very difficult position over this, because it has become apparent that a very big principle is involved, and what appeared to be a very relatively minor matter now raises an issue of the highest consequence. There is also the point of which the noble Lord, Lord Faringdon, has spoken, as to whether we are in fact competent to deal with this question at all. I would suggest the correct course is for us to have a Division on this Amendment—I am driven to that conclusion—so as to force the matter back to the other House and see that it gets further consideration. What happens after that, we shall have to think about when the time comes. The very big principle which is raised has been entirely ignored by the answer we have had from the noble Lord, Lord Winster. I agree with the noble Viscount, Lord Samuel. It is a complete expediency, but a shocking expediency, to let it go by the board. Therefore I see no option but to have a Division on this Amendment. I am sorry about it. I would much rather that the Government would have beeen willing to take the matter back for further consideration in view of the big issues raised, and we could have seen what their conclusions were on the Third Reading. It is still open for them to do that. If they are willing to take the matter back to the Minister and consider it further, we will not press for a Division. But if they are not prepared to do that, then we have no option.
§ THE LORD CHANCELLOR
My Lords, I am of course willing to do anything which courtesy demands. I am willing to put this to the Minister again but I would inform your Lordships that I have already discussed this very fully with the Minister, and I have revealed to you what his answer was. If it would satisfy your Lordships I would gladly discuss this with the Minister again and tell the Minister the purport of our discussion here. If the Minister then takes a different line, well and good, but I do not think he will. However, there is no harm in trying, and if your Lordships would like me to do that, so long as I am not in any way leading your Lordships astray, then I am ready to discuss it again.
I think the noble and learned Lord Chancellor has treated us with the utmost courtesy. He has told us all the facts as he understood them, and has given us our own choice. But I am sure that he, too, as a very eminent lawyer, has been impressed by the principle which has been raised. I think it would be better, without dividing now and forcing the matter to a conclusion, for the noble and learned Lord, the Lord Chancellor, and other noble Lords, to have a chance of representing what has been said to-day to the Minister and I willingly accept his undertaking to do that.
§ THE EARL OF DUDLEY
In view of the undertaking which the noble and learned Lord has just given that he will discuss the matter further with his colleagues before the next stage of the Bill, I am willing to withdraw my Amendment, but he has not given us much hope and unless we are satisfied the next time we shall have to divide.
§ Amendment, by leave, withdrawn.
§ Clause 22:
§ Interim income pending satisfaction of compensation.
§ 22.—(1) The right conferred by subsection (2) of section nineteen of this Act to interim income for the period between the primary vesting date and the date of the satisfaction in full of compensation in respect of a transfer of transferred interests, or of an overhead expenses increase, shall be satisfied in accordance with the provisions of this section.
(3) The following provisions of this subsection shall have effect as to the making to colliery concerns, and to subsidiaries within the meaning of the First Schedule to this Act
of such concerns, of payments in respect of each of the two years beginning with the primary vesting date and the first anniversary thereof respectively, that is to say,—
(a) a colliery concern or such a subsidiary shall be entitled in respect of each of the said two years to a payment of an amount equal to one half of the comparable ascertained revenue of the concern, or of the subsidiary, as the case may be, attributable to activities thereof for which the transferred interests thereof were used or owned;
§ 4.45 p.m.
§ LORD TEYNHAM moved, in subsection 3 (a), to leave out "one half" and to insert "sixty per cent." The noble Lord said: My Lords, during the Committee stage of the Bill, as your Lordships will remember, I raised the question of interim income for two years after the primary vesting date. As the Bill is now drawn, interim income is to amount to only fifty per cent. of the average profits over the period set out in the clause, though compensation may not be payable for quite a number of years. I do not propose to repeat all the arguments as to the unfairness of this, but I would point out that the proposed interim payment of fifty per cent. of the average profits and payable for only two years, is insufficient in the case of some collieries to cover the charges which will arise. The noble and learned Lord pointed out on the Committee stage that the reason why such a low percentage was to be paid, was due to the fact that the payment would be a gilt-edged payment and it was by no means certain that the profits of the company would in fact Continue. Surely the question is really more than that. The question is, whether the payment is sufficient to cover charges and outgoings which the collieries must meet in the two years' period. It seems unfair that good companies making profits should be penalized because of some bad companies who might not make profits in two years. My Amendment would raise it by the very modest figure of ten per cent. The noble and learned Lord was kind enough during the Committee stage to say that he would look into this matter and I hope it will be possible to agree to my modest increase of ten per cent. I beg to move.
Page 27, line 24 leave out ("one half") and insert ("sixty per cent.").—(Lord Teynham.)
§ VISCOUNT LONG
My Lords, I would like to support very strongly the Amendment moved by my noble friend Lord 47 Teynham. I have no doubt whatever that if the percentage is kept as low as 5o per cent. a great deal of hardship will be caused in many cases. This is aimed at moderating that hardship.
§ LORD AMMON
My Lords, this matter has been considered in the interim, and substantially the answer still is that which was given by my noble and learned friend the Lord Chancellor. I think that full weight has not been given to what is contained in the Bill. This fifty per cent. is assured and is not speculative, as might be the case with an ordinary trading concern. Yet another point has been missed: that the fifty per cent. is assured on the actual profits and not the declared profits. In that connexion I think it is as well to remember that the owners of the colliery will no longer have the task of managing it. The profit distribution by colliery concerns is normally between sixty and seventy per cent. of profit realized. The remaining profit is retained in reserves and other funds. Here you have a Government assurance of fifty per cent. declared profits which I venture to suggest to the noble Lord, in view of all the circumstances, is a pretty generous profit. I am afraid in the circumstances I cannot see my way to accept the Amendment.
§ THE MARQUESS OF LONDONDERRY
My Lords, I do not know whether the noble Lord who has spoken for the Government can give us a little more accurate definition of how they have arrived at the figure of fifty per cent. I agree that these are very difficult matters and the points he has made are strong ones, but after all we are, on the basis of actuarial calculation, trying to do justice to everyone and I do not know how the figure of fifty per cent. fits in.
§ LORD AMMON
My Lords, perhaps I might meet the noble Marquess's point if I say that this was the point which was raised by the noble Lord, Lord Rennell, in the recent discussion of cases where fifty per cent. might not cover the charges of the colliery and other expenses. It is that case which the new clause introduced in Committee was designed to meet. That clause enables a company, if steps are taken to enforce liability in the interim period, to apply to a tribunal, and the extent to which profits would have been applied in payment of dividends is exactly 48 the sort of matter which the tribunal may have to consider. Of the declared profits of the company itself, fifty per cent. will be paid. That is very much larger and safer than can be assumed from any enterprise run on a commercial basis.
§ THE EARL OF DUDLEY
But that does not answer the noble Marquess's question. He asked, why fifty per cent.? What is the basis on which fifty per cent. has been arrived at? If fifty per cent., why not sixty per cent., which is what we are asking for? Can the noble Lord explain what is the difference between fifty per cent. and sixty per cent? If there is justice in fifty per cent., why is there injustice in sixty per cent.?
§ LORD AMMON
The answer is that this is not a question of injustice. I tried to point out that the average declared profits of colliery undertakings are between sixty and seventy per cent. of realized profit. The remaining profit is carried to reserve. Under the terms of this Bill, one is assured of more generous treatment in getting fifty per cent. gilt-edged stocks under the Government plan.
§ THE MARQUESS OF LONDONDERRY
The noble Lord speaks of gilt-edged stocks. I do not know if in this debate we are going to have an opportunity of discussing that.
My Lords, I am not at all satisfied with the reply of the noble Lord. I still think it is unfair in cases where a company receives fifty per cent. and that is not sufficient to pay out its outgoings in the two-year period. In view, however, of what has been said, I do not wish to press this Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 23:
§ Restrictions on disposal of stock issued for compensation of companies.
§ 23.—(1) Stock issued for compensation to a company legally entitled to the compensation by virtue of paragraph (a) of subsection (1) of Section twenty of this Act, and any stock issued to the company in exchange therefor under subsection (4) of this section, shall be subject to restrictions as to the disposal thereof to the extent specified in this section.
§ (2) Such stock may be disposed of—
- (a)at any time, by way of transfer to holders of debentures issued by the company in satisfaction of rights of theirs as such holders, or to members of the company in satisfaction of rights of theirs to a return of capital or to participation in surplus assets;
- (b)when the company is being wound up, by way of sale, or in any other manner, for
49 any purpose other than satisfying rights of holders of debentures issued by the company, or of members of the company, as such holders or members;
- (c) when the company is not being wound up, by way of sale of so much of such stock as it may be requisite to sell for the purpose of satisfying rights of, or obligations of the company to, persons other than holders of debentures issued by the company as such or members of the company as such;
- (d) when the company is not being wound up, by way of sale of so much of such stock as it may be shown to the satisfaction of the Treasury to be requisite to sell for the purpose of raising an amount of liquid capital which in the opinion of the company is needed for business of the company or of a subsidiary within the meaning of the First Schedule to this Act of the company or in order to facilitate a development or extension of business to be carried on by the company or such a subsidiary thereof, and which apart from this section the company would be entitled to raise;
§ (3) Except as provided by the last preceding subsection such stock shall not be sold or otherwise disposed of.
§ 4.50 p.m.
LORD AMMON moved, in subsection (2), at the end, to insert:
Provided that an illegality by virtue of this subsection of a disposal of stock shall not in any way affect the title to that stock.
The noble Lord said: My Lords, this Amendment will, I am sure, give great satisfaction to your Lordships in all parts of the House. In a review of the Bill it has been observed that sufficient protection is not given to third parties who are concerned in the disposal of stock, and this Amendment is designed to set aside, in the case of third persons, Clause 23 (3) relating to the disposal of compensation stock. Noble Lords are aware that that can only be disposed of by the companies themselves. To make it quite clear that third parties are not to be put upon inquiry as to the title to compensation stock by reason of Clause 23, it is intended that the restrictions which the Government have found it necessary to impose by that clause should be restrictions only on dealings by the companies concerned and should not in any way affect third parties. It is therefore proposed to insert this proviso which will afford clear protection to third parties. I beg to move.
Page 29, line 34, at end insert the said proviso.—(Lord Ammon.)
§ On Question, Amendment agreed to.
§ Clause 29:
§ Reserve Fund of the Board.
§ 29.—(1) The Board shall establish a reserve fund, and shall, at such times as the Minister, with the approval of the Treasury, may direct, carry to the credit of that fund out of their revenues such sums as he may so direct.
§ (2) The reserve fund shall be managed in such manner and applied for such of the purposes of the Board as the Minister, with the approval of the Treasury, may direct.
§ 4.52 p.m.
THE LORD CHANCELLOR moved to leave out all words after the first "fund" to the end of the section and insert:
(2) The management of the said fund, the sums to be carried from time to time to the credit thereof, and the application thereof, shall be as the Board may determine:
§ Provided that—
- (a) no part of the said fund shall be applied otherwise than for purposes of the Board; and
- (b) the power of the Minister to give directions to the Board shall extend to the giving to them, with the approval of the Treasury, of directions as to any matter relating to the establishment or management of the said fund, the carrying of sums to the credit thereof, or the application thereof, notwithstanding that the directions may be of a specific character."
§ My object in moving this Amendment is to carry out an undertaking which I gave to your Lordships last time. I want this Board to be a real Board; I want them to have the sort of powers which the ordinary board of a commercial undertaking has—and I quite agree that one of the most important powers of such a board is in regard to the reserve fund. On the other hand, however, we are here dealing with very large sums of public money, and I think the right doctrine is that the Chancellor of the Exchequer must have the last word in these matters.
§ Therefore I have drawn my subsection in this way. In the first instance, the 51 Board is given power to do exactly what they like with regard to this reserve fund, but in the last resort, if the Minister differs from them, then the Minister, with the approval of the Chancellor of the Exchequer, can give them certain directions. If you compare the effect of my Amendment with the effect of the Amendments proposed by the noble Viscount, you will find, I think, that there is really only this point of difference. He is willing that the Minister, with the approval of the Chancellor of the Exchequer, shall give directions so long as they are general directions. He refers to the power (which is, I think, in Clause 3 of the Bill, if I remember right) of the Minister to give to the Board directions of a general character. I am content with the use of the words "general character" in that clause, because I think it will be quite obvious that the matters with which the Minister is there dealing are matters which are, beyond all argument, general. They are so big that they are general. However, when it comes to the establishment of a reserve fund and that sort of thing, I am frankly alarmed at the use of the word "general." Although one can say that certain things are obviously general and certain things are obviously particular, to draw an exact line between what is general and what is particular is an extraordinarily difficult thing to do. For instance, we are dealing here with a reserve fund, which may amount to £250,000. If the Minister gives directions about that, are those directions general or particular? And would it make a difference if instead of being £250,000 it was only £250? I do not know where you draw the line.
§ Consequently, so far as directions in regard to this fund are concerned, I think we must follow what I believe is the proper constitutional practice and allow the Chancellor of the Exchequer to have the last word. He must be able to give directions, and to avoid any ambiguity I have therefore made it quite plain in my Amendment that he can give directions be they general or be they particular. I hope he will not have to give any directions at all. I hope he will be able to leave the Coal Board to work out their own destiny on their own lines, and it is very desirable that he should. But if unfortunately he thinks he has to give 52 some directions through the Minister, I do not think we can get into an argument as to whether he can do it or not because the direction is not general but particular, specific, or whatever is the contradistinction to the word general. Subject to that point, I really think there is nothing between my Amendment and the Amendment of the noble Viscount, Lord Swinton.
§ I will show your Lordships one other thing before leaving this Amendment. I have drafted a proviso, and you will see that paragraph (a) of the proviso says: "No part of the said fund shall be applied otherwise than for purposes of the Board." I have put that in so that we can have on the face of the Statute a statutory prohibition against this fund being raided as the Road Fund was raided. This money has to be applied for purposes of the Board. I suggest to your Lordships that we really have to adopt the right and businesslike procedure here in giving to the Board power in the first instance to make up their minds what they are going to do, and in giving to the Minister, with the approval of the Chancellor of the Exchequer, power in the last resort over what is public money, whether the directions can be argued to be specific or whether they can be argued to be general. I beg to move.
Page 33, line 35, leave out from ("fund") to the end of the section and insert the said new subsection.—(The Lord Chancellor.)
§ VISCOUNT SWINTON
My Lords, the noble and learned Lord, the Lord Chancellor, has, I think, gone a long way to meet the wishes of the House in this matter. I think we all appreciate that the point is arguable and that it is probably necessary that there should be an overriding power. I sought to meet that point by making it plain in the proposed subsection (3) that general directions might be given, notwithstanding the particular words of this clause. Of course, the clause as originally drafted was an impossible one, if I may say so, because the whole responsibility was taken from the Board, and the Chancellor of the Exchequer or the Minister could tell them what to put to reserve, when to put it, how to invest it, and how to manage it. Now that has gone. I must admit that on consideration, and after hearing the noble and learned Lord, I do not think my Amendment really does give powers 53 to the Chancellor of the Exchequer to do what I admit he ought to have power to do, or at any rate it leaves the matter in doubt.
But the noble and learned Lord, the Lord Chancellor, also has difficulty with his words. Although we all mean the same thing and we want this to be exercised only as an overriding power, it is no good shutting the stable door after the horse has bolted; the directions will have to be given before the Board has acted. The words of the Lord Chancellor, if they are construed in one way, do appear to give to the Minister or to the Chancellor of the Exchequer power to interfere on almost any matter. However, I think if we read the clause as a whole it really does give us the best arrangement we can get. First of all, it is laid down quite clearly that the business of creating and managing a reserve fund is vested in the Board, and unless the Minister or the Chancellor of the Exchequer sees something to which he strongly objects, nobody will interfere. I think that is very important. The power of interference comes in only as a proviso. In the second place, I think it is most desirable that there should be plainly inserted in the Bill a provision that no part of the fund shall be applied otherwise than for the purposes of the Board. That takes away the greatest temptation.
That being so, I think that the Lord Chancellor has devised about the best form of words to give effect to our common intention, and I am very glad to accept them.
§ 5.0 p.m.
§ THE MARQUESS OF LONDONDERRY
My Lords, I am certainly not differing from the words which have fallen from my noble friend on the Front Bench, but the noble and learned Lord who sits on the Woolsack knows that I have endeavoured for years past to establish an analogy in this matter. I have always hoped that if the Government decided to nationalize the coal industry, they would allow the industry itself to be run on the best business principles. In this debate we have had certain matters raised in which this point has been discussed. I am looking on the Board as corresponding to the boards which govern great institutions in this country and elsewhere. I had hoped that the Board would be placed in a more important position than it is at the present moment.
54 In the change which has been brought about, the Minister of Fuel and Power really represents the shareholders, and one would have thought that when the Board was making its report it would have an amount of money to dispose of in dividends which it would give to the shareholders—that is, to the Minister of Fuel and Power, who represents the Government. The remaining money, which would be put by for the benefit of the industry and for the development of plans in the future, is the reserve, and I do not look happily on the possibility of the Chancellor of the Exchequer coming in and raiding that Fund. That is the only danger which I see in this proposition. I want to maintain that particular analogy. We have an industrial organization in this country which has been for centuries in front of the industrial organization of every other nation, and I only hope that the Government will not stultify and atrophy the great power of people in this country to develop business on the highest possible lines. I sincerely hope that when the allocation to the Government in the form of dividend has been given, the extra fund—for we hope there is going to be a profit in the industry—will not be at the mercy of the Chancellor of the Exchequer.
My Lords, I must admit I am not very happy about this, although I do not venture to differ from the views expressed by those who have just spoken. The reason for my unhappiness is that under the Lord Chancellor's Amendment, the Minister may, with the approval of the Treasury, give directions that not a single penny is to be taken out of the reserve fund. I quite agree that the general power of control over such an institution as this must be left with the Treasury. What I do not like is the fact that it might suggest to the Treasury that they must approve of every single penny which is applied out of the reserve fund. I cannot think that is the intention; and if the Government would consent to inserting somewhere in the clause a reference to the fact that this power as regards the application of the fund should be exercised only as relating to matters involving or concerning items of substantial outlay of capital, I would be quite happy—although I agree that "substantial outlay" is a very vague term and is open to the comment that it ought not to be used in an Act of Parliament 55 unless it is absolutely necessary. It has, however, been applied by an existing clause, which we have approved. Clause 3 (2) relates to programmes "involving substantial outlay on capital account".
If I were sure that such a reference could be accepted by the Government, I would withdraw my objections to this clause with regard to the reserve fund. I am not sure, having regard to what has been said on the subject of carrying Amendments to a Division, that I should be in favour of taking that somewhat exceptional course in this case. It is for the Government to make the scheme work, and if they are quite satisfied—and I should be happy if I was told they were satisfied—that it is not the intention of the Treasury to clamp down under paragraph (b) a right to investigate every single penny of expense, I should let the matter go in its present form.
§ THE LORD CHANCELLOR
My Lords, I wish to give an assurance about this. That certainly is not the intention of the Treasury, who very much hope that they will never have to use this power at all. They feel they must have this power in reserve, and that it is very undesirable that the Treasury's power should be hampered by words like "general character." It is a very undesirable term because one man's conception of what is substantial differs from another's. I really think this is the best arrangement. With regard to the remarks of the noble Marquess, may I add that I think there is no danger of this fund being raided. The proviso is designed for that very purpose. I think that has achieved the end, and we cannot have this money taken out of the business.
§ On Question, Amendment agreed to.
§ VISCOUNT SWINTON
My Lords, I accept the Lord Chancellor's Amendment, and in view of that I do not think it is necessary to move the Amendments standing in my name.
§ Clause 30:
§ Application of surplus revenues of the Board.
§ 30. Any excess of the Board's revenues for any financial year of the Board over their outgoings for that year properly chargeable to revenue account (including, without prejudice to the generality of that expression, provisions in respect of their obligations under the two last preceding sections) shall be applied 56 for such of the purposes of the Board as the Minister, with the approval of the Treasury, may direct.
§ 5.8 p.m.
§ VISCOUNT SWINTON
had an Amendment on the Paper to leave out "for such of the purposes of the Board as the Minister, with the approval of the Treasury, may direct" and to insert "consistently with the discharge by the Board of their functions under this Act in or towards the reduction of the prices charged for coal." The noble Viscount said: My Lords, in this case it will obviously be convenient if we follow the course taken before, but this time I have to come first and the Lord Chancellor second. I was inclined to think we ought to insist upon making it plain that any surplus in the fund should go to reduce the price of coal. On the other hand, on further consideration I believe that the right way of managing this business is not to have large funds in the surplus fund at all. After all expenses have been paid out, and after liberal reserves have been carried to the reserve fund, then there ought not to be considerable piling up of surplus profits. The surplus should go to adjust the price of coal, and we hope adjustments will be in a downward and not in an upward direction.
I turn, if I may, from my own Amendment to the Lord Chancellor's Amendment, which follows what he proposed on Clause 29. Again he lays down, if we accept his Amendment, that the fund cannot be raided. I regard that as vitally important in this clause—more important really than in the reserve fund clause. If this fund could be raided for the benefit of the Chancellor of the Exchequer—which means all of us in the long run, just as all the expenditure comes out of our pockets—there would be an inducement for the Chancellor of the Exchequer to try to pile up profits in the fund in order that they might be used in relief of taxation. After all, that is only human—and "Satan finds some mischief still." That would apply to the best of Ministers, if they were going to get a good share out of it to use. But if the Treasury can get no share out of it at all, there can be no inducement to give directions to make this fund any larger than it ought to be in the interests of sound and economical administration. Therefore I, personally, would be quite satisfied to accept the Lord Chancellor's Amendment, which will ensure that the fund never gets raided. 57 There will be the power of the Minister to give his general directions, or indeed specific directions, but, again, this is primarily a matter for the Board. For these reasons, therefore, I am prepared to accept the Lord Chancellor's Amendment, and I do not move my Amendment.
My Lords, I think we should all congratulate ourselves on the way this part of the Bill has been dealt with in your Lordships' House, and, as an old opponent of his, perhaps I may be allowed, very respectfully, to congratulate my noble friend Viscount Swinton on what he has just said. I would ask your Lordships, first of all, to observe that there is general expectation—except for some proviso by the noble Marquess, Lord Londonderry—that there are going to be large surpluses; in other words, that a result of this great scheme of reorganization is going to be the making of large profits. In the second place, the noble Viscount, Lord Swinton, has just retreated from the position that such surpluses must of necessity be applied to the reduction of the price of coal. I really think that is a tremendous change of sentiment in your Lordships' House, and we can all congratulate ourselves upon it. Suppose such a directive had been given to the Board that they had to use the surplus for the reduction of the price of coal. I do not think that that would really be in accordance with the best business practice. I think many of your Lordships will agree that this is an industry in which it may be most desirable to plough back surplus profits.
I will give only one example to illustrate this, for I do not wish to detain your Lordships. Take the whole question of the proper use of coal, in the matter of its by-products. That may mean immense capital expenditure, and I am sure that your Lordships will agree that it would be wrong to hamper and handicap the Board by asking that that surplus should always go finally to the reduction of coal prices, whereas they have much larger and more far-reaching plans to carry out for the general benefit of the community. I do congratulate the noble Viscount on the arrangement to which we have now come.
§ 5.14 p.m.
THE LORD CHANCELLOR moved, to leave out from "such" to the end of the clause and insert:
purposes as the Board may determine:
The noble and learned Lord said: My Lords, there is no reed now for me to say anything upon this. I beg to move.
Page 34, line 1, leave out from ("such") to the end of the clause, and insert the said new words.—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
§ Clause 31:
§ Board's accounts and audit thereof.
§ 31.—(1) The Board shall keep proper accounts and other records in relation thereto, and shall prepare in respect of each financial year of the Board a statement of accounts in such form as the Minister may direct.
§ (2) The accounts of the Board shall be audited by auditors to be appointed annually by the Minister.
§ 5.15 p.m.
LORD WINSTER moved, in subsection (1), to leave out "other records in relation thereto, and shall prepare in respect of each financial year of the Board a statement of accounts in such form as the Minister may direct," and to insert:
in doing so shall follow the best commercial practice. They shall prepare in respect of each financial year of the Board a statement of accounts in such form as the Minister may direct for the purpose of showing the financial results of the activities of the Board.
The noble Lord said: My Lords, I think it may be convenient to your Lordships if we discuss this Amendment and the following Amendment which stands in the name of the noble Viscount, Lord Swinton, together. The Amendment with which I am now dealing is the one which begins at page 34, line 5. This Amendment is proposed as representing a substantial concession along the lines which clearly form the objective of the Amendment to be moved by the noble Viscount. This Amendment recognizes the fact that the Board's accounts must be prepared in a manner which reflects the best commercial practice in accord with the Companies Acts, but it leaves the Minister free to prescribe the actual form of the statement of accounts which is to be given
to Parliament and to the public. The form accords with Section 30 of the Coal Act. The Amendment in the name of the noble Viscount, which follows the general trend of proceedings in the Committee stage, seems to me to aim at two things. The first is that the Board should keep detailed accounts of its separate activities for the separate districts in which the Board will operate; and that the form of the accounts should follow the best commercial practice designed in compliance with the Companies Acts. The second is, that the annual statement of accounts published by the Minister should be compiled by the Board in such a fashion as to show a full profit and loss statement, with details of the outturn not only of the colliery activities of the Board, but of the separate activities which the Board may carry on.
§ There is no doubt that the Board, in compliance with the requirement to "keep proper accounts and other records in relation thereto," will follow from time to time the most up-to-date commercial methods, and that their accounts and records will contain full details of the financial results of activities of each kind carried on. But it will, of course, be quite impossible to publish all the details. I am now dealing with the noble Viscount's Amendment. As regards the second point, which I have said I regard as the object of the Amendment, the annual statement of accounts is to be compiled in such a way as to exhibit a full profit and loss account. On that point common form was allowed, and the clause is, in fact, in the same form as Clause 30 of the Coal Act of 1938 (which was a Conservative measure) and many others. The Minister may be relied upon to require that the Board's accounts as published shall, together with the Report of the Board, contain ample information to enable Parliament and the public to form a proper judgment on the Board's work, but the precise form must be expected to vary with the passage of time.
§ It is in any case undesirable that the Statute should lay down in precise detail the exact form of the statements to be given. If it did so, then over the passage of years that form might prove unsuitable or unsatisfactory for the purpose for which it was made. I have said that the best and highest commercial practice will be followed. Undoubtedly the Board 60 will have properly-kept costing accounts of each separate establishment in its charge. But to issue all these accounts would involve an enormous publication. As I have said, the Board will follow the best commercial practice but no commercial undertaking does publish costing accounts such as those of which I have spoken. The Minister, therefore, will publish more than it is the practice of commercial undertakings to publish. For those reasons, which I hope your Lordships will find satisfactory, the Government find it impossible to accept the Amendment of the noble Viscount.
Page 34, line 5, leave out from ("and") to the end of line 7, and insert ("in doing so shall follow the best commercial practice. They shall prepare in respect of each financial year of the Board a statement of accounts in such form as the Minister may direct for the purpose of showing the financial results of the activities of the Board.")—(Lord Winster.)
§ THE LORD CHANCELLOR
My Lords, I understand that the noble Lord, Lord Balfour of Inchrye, has an Amendment to this Amendment. The noble Viscount, Lord Swinton, also has an Amendment, if I understand him rightly, which would come up at the end of this Amendment. If this Amendment now before the House were carried I think the noble Viscount's Amendment would be considered then.
§ VISCOUNT SWINTON
My Lords, I should have thought, with great respect, that my Amendment was really a substitute for the Amendment now moved. If my Amendment were carried I think that probably the Government would not wish to put their Amendment, because this question of "the best commercial practice" is largely common to both Amendments. For the rest, my Amendment prescribes certain things which the Minister shall do in presenting his accounts, whereas the Government Amendment merely says that the Government will present the accounts without Parliament giving any directions about what is to be in them. I have seen the noble Lord, Lord Balfour, whose Amendment is, again, a sort of half-way house. His Amendment requires a separate presentation of accounts of ancillary industries and those of the general business of coal working. With respect, I would suggest that the most convenient course is to discuss all three Amendments 61 together, as we did on the Committee stage, and discuss what is the right form for these accounts. The appropriate Amendment can then be agreed or passed.
§ THE LORD CHANCELLOR
That is convenient. We can have a general discussion, but at the same time we have to formulate a definite Amendment. I will work out what that should be.
§ 5.23 p.m.
§ VISCOUNT SWINTON
My Lords, I am afraid that I regard the speech which we have just heard from the Minister of Civil Aviation as very far from satisfactory. What it comes to is this. He says: "We shall present the balance sheet and the profit and loss accounts in a commercial manner. Beyond that it will be for the Minister to decide what accounts shall be presented to Parliament and what Parliament shall see." I do not want to be too long over this, because we debated it at very considerable length last time and I think many noble Lords in this House were very insistent that Parliament should be fully informed and that by the only means possible—that is, by putting it into the Act. Parliament should give the Minister general directions as to the way in which accounts should be presented. There are two quite separate points here. The first concerns the presentation of a balance sheet and profit and loss account. Here we take the analogy of the ordinary commercial firm.
What I think your Lordships wish to have here is that a balance sheet and profit and loss account shall be presented in the most informative way, consistent with ordinary commercial practice. That is one point. There is an entirely different point which I think Parliament would be well-advised to insist upon. That is that Parliament—as has been said over and over again by Government spokesmen in this House—should have the fullest possible information. What Parliament will want to know is how the business of coal-getting is being conducted; whether it is being conducted at a profit; and how these ancillary industries are being conducted, whether they are being conducted at a profit. The one thing which Parliament will, rightly I think, insist upon, is that there should not be camouflage or concealment of what is happening in the main business of coal- 62 working or coal-selling by a number of ancillary industries. The last people to object to this should be His Majesty's Government.
My memory of these coal matters goes back almost as long as that of the noble Viscount, the Leader of time House. I remember a most eloquent plea being constantly put up in "the bad old days," that miners were not getting a square deal because coalowners were putting some part, or too large a part, of the profit into the ancillary industries and it did not go into the wages, so that profits were prevented from getting in the proper coal-working accounts. I do not know how much truth there was in that, but I do know that as long as I have been a member of either House I have heard members of the Labour Party say it is absolutely essential that the clearest possible accounts should be continually presented to Parliament showing the expenses of coal-getting and its profits, the expenses and profits of the ancillary industries, and also what was put into the coal-getting side of the ancillary industries. Our second claim, therefore, is that in the accounts which are presented to Parliament a perfectly clear distinction should be drawn between coal-getting and the ancillary industries which this Coal Board is to conduct. I regard this point as absolutely vital.
The third point, to which I attach rather less importance, is that we should be able to see, district by district, how these businesses are being conducted. There is nothing very unreasonable about that, because I believe at the present time the Government present to Parliament every quarter a small volume in which district ascertainments are set out with the cost of coal-winning and the tonnage of coal. There is nothing new in that. The Minister has not read my Amendment, or at any rate he has not understood it. He was against laying down the precise forms of accounts, on the ground that if you want to amend them you would have to have a new Act. I have never proposed any such thing. I have not been so foolish. My Amendment does not attempt to lay down the detailed form of the accounts. All it does is to give, to use modern jargon, a general directive to the Minister of what he should put in. My Amendment leaves to the Minister the framing of the directions which he will give to the Board and the framing of the accounts, which 63 he can alter from time to time, because it is providing that the Board shall prepare in respect of each financial year of the Board a statement of accounts in such form as the Minister may direct.
He can alter that form of accounts as often as he likes to meet changing conditions, provided that he gives Parliament the information which Parliament wants to have; provided also that the form of accounts distinguishes between the colliery activities and each of the ancillary activities of the Board, shows separately the results of each activity for each mining district, and includes a balance sheet and profit and loss account in a form which conforms to the best commercial standards. It does not at all lay down with precision the form of accounts as was done in the Railway Acts and, I think, in the Electricity Acts. On the contrary, it leaves a Minister complete freedom to prescribe the form of accounts to be presented to Parliament, provided always the Minister does two things; that he gives Parliament the information they require regarding ancillary and other industries, and the districts, and that he presents a profit and loss account and balance sheet which are in the most up to date and informative commercial form. That, I would submit, is entirely practical. I believe I speak for almost everybody in the House when I say that this is what people want, and I really must stress the point.
§ LORD LINDSAY OF BIRKER
May I ask the noble Lord a small point about the form of the Amendment? Should it not read: "… being a form which conforms to the best commercial standards and shall …"? As it reads now, might it not be taken to mean that all that was to conform to the best commercial standards was the balance sheet?
§ VISCOUNT SWINTON
Look at line 7. It would read: "… being a form which shall distinguish the colliery activities and each of the ancillary activities of the Board, and shall show separately the results of each such activity for each Mining District and shall include a balance sheet and profit and loss account in a form which conforms to the best commercial standards."
§ VISCOUNT SWINTON
The requirement to conform to the best commercial standards is confined to the profit and loss account and the balance sheet, because these are the only things with which Company Law and commercial practice are concerned.
§ VISCOUNT SWINTON
The separation of the particulars regarding colliery working and ancillary working, and of the various districts, is a matter which will have to be laid down by the Minister, because it happily applies only to this industry.
§ LORD LINDSAY OF BIRKER
May I explain that it has been my experience in the only commercial sphere of which I have knowledge, which is a publishing house, that it is the auditor who explains how the different accounts are to be treated, so that the ordinary person can understand them. I should have thought it rather important that the words "the best commercial practice" should have been put at the beginning, in order that they should apply to the whole matter. I do not know if the noble Viscount can see my point. I should have thought that the auditors would help enormously in seeing that these accounts as a whole were kept according to the best commercial practice.
§ VISCOUNT SWINTON
If I can get the substance, I think we can easily get on to the further stage. I entirely agree with the noble Lord on the function of auditors. In every business with which I am connected, I have always approached my auditors, who have sat down with me, or I with them, because they understand these things, and I do not, and we have decided how the accounts are to be kept. Auditors are accountancy partners in a business. They are not people who come in and see whether or not you are cheating—that is not the kind of businesses with which the noble Lord and I are concerned. I think this does apply to the balance sheet and profit and loss account. I do not think the best commercial practice does apply (although I would have the auditors' advice on the form of the accounts) to what is peculiar to this curious Government undertaking.
LORD DE LISLE AND DUDLEY
I have listened with great interest to the 65 debate on this very important part of the Bill. I must confess that I was disappointed with the reply of the noble Lord, the Minister of Civil Aviation. He seemed to me to avoid the point at issue in a masterly manner. We can see the sort of contest that goes on: on one side, the Minister and his advisers, and on the other, Parliament. The Minister—irrespective of political Party—says: "Let us leave it so that we have room for manœuvre. Do not let us get tied down." And his advisers entirely agree with him. They say: "Let us give Parliament some good intentions, and see if they are satisfied with that." But I do not think that Parliament ought to be satisfied in this case with an expression of good intentions. We quite agree that we cannot lay down the precise form of accounts—that would take too long. But certainly we ought to lay down what the intentions of Parliament are.
I cannot see that there is anything in my noble friend's Amendment to which the Government can object. If it is their intention to publish full and frank accounts, then surely they can accept an Amendment which tells them to do so. I can see nothing in this Amendment which will prove embarrassing to the Board in future, when some new method of accountancy is invented, if ever. May I say that the present system of double-entry accounting has stood for a long time, and I do not think it is likely to be altered for some time yet. Even if it were, I cannot see that there is anything embarrassing in the Amendment as it now stands. I think that Parliament should insist that the Minister be given instructions. There are two points. One concerns what accounts are to be kept—I am not concerned about that. I am quite certain that the Board, being advised by accountants, will keep good accounts. The point that concerns me is that they shall tell Parliament, the British public and the world. There must always be a temptation, when things are going not so well, to be a little less frank than when they are going well. It is to meet that point that we are legislating.
Therefore we ought to tell the Minister and the Board what it is we want. We require, first of all, the separation of the colliery activities from the ancillary activities. Secondly, we should like the accounts by regions or districts, so that we can see the picture not only as a whole 66 but in part. In addition—although we have not put this into the Bill—we should like a great many statistics, such as are already published. Behind it all we must have the accounts, whether they are the consolidated accounts or the district accounts or the statistics, in a form which can be compared from year to year; and, if there is a variation made, then the basis of that variation must be stated. I do not think we are asking too much by asking the Government to insert some words in the Bill which will enshrine the intention of Parliament. I, for one, would be most unwilling to accept an expression of good intentions. I do not, if I may respectfully say so to the Noble Lord, think that the Amendment that was put down in his name really does meet our point. Let me take the last line—"… in such form as the Minister may direct for the purpose of showing the financial results of the activities of the Board." That really means "showing to Parliament" What we want to know, and what we want shown, are the financial results of the activities, and the inertia, if any, of the Board.
So we must have accounts which mean something. Do not let us delude ourselves that they will ever mean anything to the general public at large, but they must be open to the gaze of experts who can pull these things to pieces and explain to the general public, all these people who are not versed in accounts, something about the position. But one thing we will not have is accounts which do not conform to a recognized basis and are used not to reveal but to conceal.
§ 5.40 p.m.
§ LORD BALFOUR OF INCHRYE
My Lords, in this general discussion I might perhaps be allowed to refer to a manuscript Amendment which I intended to move, which was in effect a half-way house between the Amendment of my noble friend Viscount Swinton and the Amendment put on the Paper by the noble and learned Lord, the Lord Chancellor. The Amendment was to propose to add to the noble and learned Lord's Amendment at the end the words "keeping separate the main and ancillary activities." This would not have satisfied some of my noble friends who want to see each district separated, but it would have fulfilled one main purpose which I personally consider of paramount importance—that is, being 67 able to see the relation to the whole picture of each particular activity carried out by the Coal Board. As the Bill stands at present—and, with respect, I think even if there be incorporated in it the noble and learned Lord's Amendment—there could be presented a consolidated balance sheet, as it were, instead of a balance sheet broken down to show the different activities.
If your Lordships look at the debates in another place and in this House in the past, you will see that the coalowners have been called wicked people who hid losses from one particular enterprise and who, when something showed a particularly good profit, so juggled with figures that it was made to show a loss if it suited the coalowners' purposes. I do not in any way agree that that happened. But if it was something to be prevented in the past, surely the Government ought to be glad to put themselves in such a position that they can come forward perfectly happily saying, "We are not as other men in the past; we come forward cleanly and innocently, glad to have the safeguard from practices which we know were used in years gone by." That is why I intended to move this half-way-house Amendment, but as the reply of the Minister of Civil Aviation was, if I may say so, unforthcoming—it did not give anything away to us at all—I do not propose to move my Amendment. I do, however, wish to support most strongly the Amendment put on the Paper by the noble Viscount, Lord Swinton.
§ LORD LINDSAY OF BIRKER
My Lords, I do not think we really quite understand one another. This is new business. The general thing in front of us is that accounts have got to be presented to Parliament. The Amendment in the name of the noble and learned Lord, the Lord Chancellor, says that the Minister "may direct for the purpose of showing the financial results of the activities of the Board." That means it will be open to Parliament to say "These forms of accounts do not show the financial activities and they are very unsatisfactory." I would agree, speaking again as an outsider, that it would help to have the noble and learned Lord's Amendment giving a general direction, but I do also submit it is perfectly right to say if you make this too detailed you are forgetting it is 68 going to be vetted by Parliament year after year. The advisers of Parliament are going to say "This is not sufficient. We would know much better if it was done in this or that way." I submit that is much better.
§ LORD WINSTER
My Lords, the noble Viscount, Lord Swinton, in his remarks on this Amendment, referred to statements made in the past on behalf of the Labour Party about the necessity of having the clearest possible accounts. Certainly we stand by that. It is the intention of the Government that the clearest possible accounts shall be kept in regard to the mining industry and that Parliament and the public shall be given all the information which Parliament and the public require. The noble Viscount said that Parliament would want to know two things: how the coal-getting and ancillary industries are being conducted, and how the industry is being conducted district by district. I endeavoured to make it clear in my previous remarks that the Board will most certainly keep costing accounts of each separate establishment of the work of which it is in charge. The question which arises is how much of that enormous mass and volume of costing accounts it is necessary to publish. In this respect I pointed out that if all the information was to be published, the Board would be setting itself a far higher standard in this matter than the most up-to-date requirements of commercial practice.
I am speaking a second time in this matter, and therefore I must speak as briefly as possible; but as regards the noble Viscount's point that Parliament will want to know how the coal-getting and ancillary industries are being conducted, and to see district by district how the industry is being conducted, I venture to suggest, with great respect, that Clause 31 of the Bill properly interpreted gives the two safeguards which the noble Viscount requires. The clause says that the Minister is to direct the form in which the statement of accounts of the Board is to be kept, and the accounts of the Board shall be audited by auditors to be appointed annually by the Minister. There is the first safeguard. The Minister is to direct the form in which the accounts are to be kept, and I think we may assume that any Minister of any political Party will want those accounts kept in the most accurate and informative 69 manner. But the accounts have to be audited by the auditors. When I spoke on this subject in the Committee stage I said that the auditors who would be employed would be auditors of some status, and would certainly make their views known to the Minister if they felt that the form in which the accounts were being kept was not such as to give a full, accurate and proper picture of the undertaking. On that occasion the noble Viscount, I will not say contradicted me, but differed from me and used words which implied that that is not the function of auditors at all; that that is not what they are charged with; they are charged with other duties in regard to the accounts of an undertaking. I now notice the noble Viscount has altered his position.
§ VISCOUNT SWINTON
I have not altered it in the least, with great respect. What I said was that it was not the business of the auditors to tell the Minister what accounts should be presented to Parliament. It is the business of Parliament to tell the Minister what accounts should be presented to Parliament, and of course the auditors will advise on the proper way of keeping the accounts. But that has nothing whatever to do with the accounts which Parliament will see.
§ LORD WINSTER
The noble Viscount is always so anxious to avoid being misrepresented that he gets a little hasty. I was not misrepresenting the noble Viscount. I was pointing out that on the last occasion the noble Viscount differed from me on the point that the auditors would say if they were not correct, and this afternoon the noble Viscount said: "You will of course regard your auditors as partners in the business." That will be the exact relationship between the auditors in this matter and the Minister. If the auditors feel the accounts should be kept in some form which would afford better information to Parliament and the public, the auditors will not hesitate to make their opinion known to the Minister. That is the first point. The Minister directs the form in which the accounts are to be kept and the accounts are to be audited and the auditors will certainly make their views known to the Minister. To come to the noble Viscount's second point, that Parliament will want to know how these industries are being conducted and will wish to be 70 able to see district by district how the industry is being conducted, the accounts have to be presented to Parliament. If Parliament does not consider that the accounts are being presented in such a fashion as to show the progress of the coal-getting industry and of the ancillary industries and are not being presented in such a form as to give Parliament proper means of making comparisons between one district and another and one part of the industry and another, then Parliament may impose its wishes upon the Minister in that matter.
§ LORD WINSTER
The noble Lord will surely know that Parliament has means of making its opinion felt.
§ VISCOUNT SIMON
My question is put quite seriously. The noble Lord has just said that if we followed his advice Parliament would have no difficulty in imposing its will on the Minister. I ask the noble Lord how Parliament would do that.
§ LORD WINSTER
I am really not going to be drawn into an argument on that point. The noble Viscount and many other noble Lords who have had experience of the other place know there is no question about it; Parliament can make its opinion felt in no unmistakable fashion if it is not satisfied with the way in which a Minister is conducting the business of his Department. Occasion after occasion arises in the course of a Parliamentary year when Parliament has its opportunity of doing that. The first safeguard is that the auditors will certainly inform the Minister if they do not think the form of accounts which he has directed should be kept is sufficient. The second safeguard is that if Parliament is not satisfied that it is getting the information which it is perfectly entitled to get in the public interest, it will have means of making its views known and, if it makes out its case, of causing the Minister to alter the form in which the accounts are kept, so that Parliament shall have the information which it legitimately requires. There is no question whatever, as I have said, that the Minister, of whatever political party he may be, who is in charge of this industry may be relied upon to require that the Board's accounts as published shall, together with the report of the Board, contain sufficient information fully to enable 71 Parliament and the public to pass judgment upon the work of the Board. That being so, I have to repeat that the Government feel unable to accept the Amendment proposed by the noble Viscount.
§ 5.52 p.m.
§ VISCOUNT SIMON
My Lords, it appears to me that if we concentrate upon the matters on which we are agreed there ought not to be much difficulty in finding the right solution, and even the right form of words. I understand from the Government (and indeed it appears in the noble and learned Lord's Amendment) that there is no dispute that we are to follow the best commercial practice. It is rather a difficult thing to challenge, because if there was a challenge I suppose it would have to be in the Courts, but still, the principle that we are to follow the best commercial practice is one about which there is no dispute. There is, I think, having regard to what has just been said by the noble Lord, Lord Winster, no dispute that Parliament ought to have full information—I mean reasonably full—on all relevant points. I think we may take both those propositions as accepted, and if they are accepted the question which I should like to ask and to which I think there can be but one answer is this: What is there asked for in the Amendment proposed by the noble Viscount, Lord Swinton, which it is not quite proper to ask for in view of the agreed and admitted facts that we want to follow the best commercial practice and that we want Parliament to be fully informed? Can it be disputed that there ought to be a distinction between colliery activities, properly so-called, and the ancillary businesses? It is not capable of dispute. There is nobody acquainted with business and there is nobody who has had any sort of connexion with accounts who would dream for a moment of disputing that it would be right, according to the best commercial practice, to distinguish between the main business of colliery activities and the ancillary activities, all the more so because it has often been suggested that one of them is made to pay for the other. There can be no doubt about that at all.
In view of the two tests which have been, I think, universally accepted by the House as proper, is there any doubt that the accounts should include a balance sheet and a profit and loss account 72 which conform to the best commercial practice? There cannot be any dispute about that. The noble Lord says that no doubt the auditors would advise the Minister if he happened to be so ill-instructed that he did not know that, but at any rate there is no doubt that that is the proper practice and there is no doubt that Parliament would wish to be informed about it. The only remaining thing is that you should separate the results of each mining district. Considering that for many purposes for many years past the different mining districts have been distinguished and for many purposes have been dealt with as independent though subsidiary units, that too, I should have thought, beyond question is a thing which the best commercial practice and the reasoning powers of Parliament would call for.
I therefore ask myself: why is it that the Government adopt the attitude just stated by the noble Lord opposite when he said that for the reasons he gave (and I will examine those reasons very briefly in a moment if I may) he cannot accept the Amendment of the noble Viscount, Lord Swinton? The reasons that he gave, as I understood him, were these. If I do not state them correctly I hope he will stop me and put me right. His first reason was that the Minister, of course, would draw up his accounts, making use of suggestions from the auditors, if necessary, as to how they should be drawn up. Secondly he says that if in spite of that the Minister did not draw up the accounts in a form satisfactory to Parliament, Parliament would soon see to it that he did. Those I think were the reasons he gave.
As to the first, I do not know enough about the relations between auditors and directors or Ministers at the head of a business to know how far an auditor would think it right actually to volunteer suggestions of his own. I should have thought a good deal would depend on the temper of the Minister and I can imagine some who might have presented certain difficulties. I should like to see a picture of an auditor explaining to the late Sir Michael Hicks-Beach how to make his Budget statement! As to the second reason, I really do not understand the noble Lord, and yet he understands Parliamentary procedure so well. He says there is a perfect guarantee that all this will be done as it ought to be 73 done (and we are agreed as to how it ought to be done) because if the Minister's accounts did not satisfy these reasonable conditions Parliament would soon see to it that he was made to do what Parliament wanted. I ventured (I am afraid rather irregularly in this House) to interrupt my noble friend, I hope courteously and I hope pointedly, to ask him how Parliament would do that.
Let us assume for the sake of argument that it occurred at a time when there was a Labour Minister and a Labour majority in the other place. Perhaps the noble Lord has thought more about my question and would like to give me the answer now which he could not give when he was on his feet. How is it supposed that the other place is going to compel a Labour Minister to deliver accounts which the other place thinks proper if the Labour Minister has got behind him a large, and on this occasion let us suppose an obedient, majority to support him? It simply does not happen. In this House it might be that somebody would object and might conceivably carry such a Motion but that would not affect the Minister, because there is nothing here about laying the thing on the Table and allowing either House to challenge it. So we are really left, as it seems to me, in this position, and I have done nothing more than state it as simply as I can. We are all of us agreed that the accounts should be such accounts as would give proper information to Parliament and we are agreed that they should follow the best commercial practice.
I dare not say we are agreed—unless silence gives consent—but I cannot see anything in the noble Lord's Amendment which would not satisfy those tests and does not go beyond them. All we are left with is the assurance from the Front Bench opposite that if those tests were not applied Parliament somehow or other would see that the thing was put right. It is just because Parliament might not see to it that we are entitled to see to it now, because we are entitled to say it is not a question of whether the Minister is satisfied. It is not even a question of whether his auditors are satisfied, although I assume they are the most enterprising auditors in the matter. It is a question as to whether Parliament ought to leave this unprovided for. I will only say in conclusion that I entirely agree with what 74 I think the noble Lord, Lord Lindsay, indicated just now, that you certainly do not want to lay down a precise and elaborate formula in all sorts of respects. I know very well the form of accounts in some Acts of Parliament relating to railways and other things, and I do not suggest anything of the sort here. I do say that if the conditions are reasonable conditions, having regard to the agreement of everybody that Parliament is entitled to have reasonably full information according to the best commercial practice, then, with great respect to the noble Lord opposite, he has made no real effective answer to the noble Viscount, Lord Swinton.
§ LORD LINDSAY OF BIRKER
My Lords, does the noble Viscount really mean that each ancillary activity should be accounted for? That is what I take it is really in his mind: that there should be an account of each separate ancillary activity. This clause as it stands applies to all the activities. If a man is keeping a cow he should keep accounts. I remember a long time ago a noble Lord, when he was a young lawyer, telling me of an argument he had with Horatio Bottomley. He pointed out to Horatio Bottomley that he really must put certain things in his prospectus. Mr. Bottomley, being convinced of that, said, "Yes, certainly." He then produced a prospectus of something like 565 pages with the necessary words in.
§ VISCOUNT SWINTON
I wanted to say quite simply, "main ancillary activity," and that could be quite easily adjusted on the Third Reading. Of course, we do not mean that if a man keeps a cow you have got to keep a special account.
§ VISCOUNT SWINTON
I am taking the substance. We mean to have a proper account showing the position of the main ancillary activities distinguishing one from another and each from coal, and the Government are determined not to have it.
§ On Question, Whether the words proposed to be left out shall stand part of the Clause?
§ Their Lordships divided: Contents, 55, Not-Contents, 19.75
|Albemarle, E.||Simon, V.||Harris, L.|
|Beatty, E.||Swinton, V.||Hemingford, L.|
|Craven, E.||Hindlip, L.|
|Aberdare, L.||Hothfield, L.|
|Fortescue, E. [Teller.]||Altrincham, L.||Merthyr, L.|
|Howe, E.||Ashton of Hyde, L.||Middleton, L.|
|Iddesleigh, E.||Balfour of Inchrye, L.||Monson, L.|
|Lucan, E.||Bingley, L.||O'Hagan, L.|
|Munster, E.||Broughshane, L.||Palmer, L.|
|Scarbrough, E.||Carrington, L.||Remnant, L.|
|Selborne, E.||Cecil, L. (V. Cranborne.)||Sandhurst, L.|
|Vane, E. (M. Londonderry.)||Cherwell, L.||Selsdon, L.|
|Clanwilliam, L.(E. Clanwilliam.)||Somers, L.|
|Bridgeman, V.||Strathcona and Mount Royal, L.|
|Chelmsford, V.||Courthope, L.|
|FitzAlan of Derwent, V.||De L'Isle and Dudley, L.||Teynham, L.|
|Hailsham, V.||Denham, L. [Teller.]||Waleran, L.|
|Lambert, V.||Doverdale, L.||Windlesham, L.|
|Long, V.||Fairfax of Cameron, L.||Wolverton, L.|
|Maugham, V.||Forester, L.|
|Jowitt, L. (L. Chancellor.)||Darwen, L.||Nathan, L.|
|Henderson, L. [Teller.]||Pakenham, L. [Teller.]|
|Addison, V.||Holden, L.||Piercy, L.|
|St. Davids, V.||Inman, L.||Rochdale, L.|
|Lindsay of Birker, L.||Rusholme, L.|
|Ammon, L.||Morrison, L.||Walkden, L.|
|Calverley, L.||Mountevans, L.||Winster, L.|
§ Resolved in the affirmative, and Amendment disagreed to accordingly.
§ VISCOUNT ADDISON
My Lords, might I intervene for one moment in the interests, shall we say, of order. It is the rule of the House—which I believe is accepted by all of goodwill—that to distinguish this from the Committee stage it is not the practice for any noble Lord to speak more than once on a particular Amendment, except the mover of it in reply to whatever may be said, or except with the special consent of the House. I cannot help feeling that we might have been, perhaps, a little clearer on the present issue if that salutary rule had been observed. I do hope that your Lordships will observe it in the future.
§ 6.18 p.m.
§ VISCOUNT SWINTON
had given notice to move, at the end of subsection. (1), to insert:being a form which shall distinguish the colliery activities and each of the ancillary activities of the Board and shall show separately the results of each such activity for each Mining District and shall include a balance sheet and profit and loss account in a form which conforms to the best commercial standards.The noble Viscount said: My Lords, I have not spoken on the next Amendment on the Paper, but I should like to move 76 it in a form which will satisfy my noble friend Lord Lindsay of Birker, to whom I am much obliged. I would therefore ask your Lordships' leave to insert the word "main" before "ancillary", and to alter the last line but one so that the end of the Amendment shall read "and profit and loss accounts in conformity with the best commercial standards". I think that would be better English. I beg to move.
Page 34 line 7, at end insert ("being a form which shall distinguish the colliery activities and each of the main ancillary activities of the Board and shall show separately the results of each such activity for each Mining District and shall include a balance sheet and profit and loss account in conformity with the best commercial standards").—(Viscount Swinton.)
§ On Question, Amendment agreed to.
§ 6.20 p.m.
LORD DE L'ISLE AND DUDLEY moved, in subsection (2), at end to insert:
("No person shall be qualified to be appointed unless he is a member of one or more of the following bodies: the Institute of Chartered Accountants in England and Wales; the Society of Incorporated Accountants and Auditors; the Society of Accountants in Edinburgh; the Institute of Accountants and Actuaries in Glasgow; the Society of Accountants in Aberdeen; the London Association of Certified Accountants Limited; the Corporation of Accountants, Limited.")
§ The noble Lord said: My Lords, these words are taken from the Local Government Act, 1933. Some of your Lordships will recall that I moved an Amendment upon this clause in the Committee stage, but it was not acceptable to the Government. It seemed to me that there was an excellent precedent for these words in another Act of Parliament, by which Parliament showed its desire that auditors of public bodies should be qualified people. I thought that I could do no better than to borrow those words from the 1933 Act, and when this clause was brought to my attention I thought I would include them in the form of an Amendment. It is certainly important, as has been conceded by the Government, that the auditors should have the best possible qualifications, and this seems to me the best manner to ensure that that is achieved.
Page 34, line 9, at end insert the said new words.—(Lord De L'Isle and Dudley.)
§ THE LORD CHANCELLOR
My Lords, I have only just seen this Amendment, and I am not prepared to accept it without a good deal of consideration. I do not pretend that I am not rather familiar with this question, because for many years I have been concerned about the connotation of that word "accountant." After all, in the medical profession anybody can practice the healing art but may not hold himself out as a doctor. Yet anybody in this country can call himself an accountant. I have always thought that that is rather unsatisfactory. There are all sorts of accountants—turf accountants, for instance. I dare say the tick-tack man, when he has finished tick-tacking, becomes an accountant. The young lady at the back of a shop may consider herself an accountant. The word means very little, and for some time past I have been urging these various societies to get together. The first thing is that they should all agree, and when they have agreed I hope that the difficulties which have hitherto been put in their way will be surmounted. I gather that my efforts have not been altogether in vain, and that it is probable that there will be some agreement. At the present moment, however, I am not prepared to anticipate that.
78 As things are, anybody can audit accounts. It is perfectly within the law for the accounts of a company to be audited by someone who has no professional skill—I believe I am right in saying that. But it is ridiculous to suppose that any considerable company would have their accounts audited by anybody other than a professional accountant. Charities, sometimes large charities, often do; but I think it is a great mistake. The auditing should be done by a qualified person. This Amendment seems to have a very exhaustive list. I do not know if any societies are omitted. There may be some in the Isle of Man or the Channel Islands, for instance, who ought to be considered. I am told that this Amendment is based on the Local Government Act. Except in the possible but unlikely event of these accounts being audited by the Controller and Auditor-General—who is not, I think, a member of any of these societies—I should think it is perfectly obvious that accounts of this importance will be audited by a properly qualified and competent person. As I have only just seen this Amendment, I am sure that I shall not be expected to accept it, although I view the noble Lord's point with a great deal of sympathy.
§ LORD DE L'ISLE AND DUDLEY
My Lords, I have listened with great interest and respect to the words of the noble and learned Lord, the Lord Chancellor. I do not propose to press this Amendment, but I hope there will be an assurance—although, as I have made clear, I do not like assurances—that the Board will employ a properly qualified accountant.
§ Amendment, by leave, withdrawn.
§ Clause 40 [Provision as to the Miners Welfare Commission. 2 & 3 Geo. 6, c. 9]:
§ 6.28 p.m.
§ LORD AMMON moved to leave out subsection (7). The noble and learned Lord said: My Lords, this is in fact a drafting Amendment. Its only effect is to transfer from Clause 40 to Clause 63 the definition of "Miners" Welfare Fund," so as to render it applicable to Clause 41 as well as to Clause 40.
Page 40, line 27, leave out subsection (7).—(Lord Ammon.)
§ On Question, Amendment agreed to.79
§ Clause 46:
§ Duty of the Board as to establishment of machinery for settlement of terms and conditions of employment, etc.
§ 46.—(1) It shall be the duty of the Board to enter into consultation with organisations appearing to them to represent substantial proportions of the persons in the employment of the Board, or of any class of such persons, as to the Board's concluding with those organizations agreements providing for the establishment and maintenance of joint machinery for—
- (a)the settlement by negotiation of terms and conditions of employment, with provision for reference to arbitation in default of such settlement in such cases as may be determined by or under the agreements; and
- (b) consultation on—
- (i) questions relating to the safety, health or welfare of such persons;
- (ii)other matters of mutual interest to the Board and such persons arising out of the exercise and performance by the Board of their functions.
§ THE LORD CHANCELLOR moved, in subsection (1) (b), at the beginning of (ii), to insert "the organization and conduct of the activities in which such persons are employed and." The noble and learned Lord said: My Lords, we had our discussion on this on the Amendment moved by the noble Viscount, Lord Cecil of Chelwood, and this is a corollary to that Amendment.
Page 44, line 25, at beginning insert the said new words.—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
§ Clause 54 [Annual report of the Board]:
THE LORD CHANCELLOR moved, at the end of the clause, to insert:
(2) The report for any year shall set out any direction given by the Minister to the Board during that year unless the Minister has notified to the Board his opinion that it is against the national interest so to do.
The noble and learned Lord said: My Lords, it would be convenient to discuss this Amendment with the very similar Amendment in the name of the noble Viscount, Lord Swinton. I think there is very little between us. It really is a very small matter. I have drafted the Amendment in such a way as to make it obligatory upon the Board to set out in their Annual Report the fact, if it be the fact, that they have received certain
directions, so that that Report, which is, of course, to be published, comes before the two Houses of Parliament, and any Member of either House can thereupon raise questions, debate the matter and elucidate the policy which underlay the directions.
§ The noble Viscount's Amendment covers that, and as I follow the two Amendments it is simply a question whether the Minister shall make a written statement setting out the directions he has given, or whether that shall be made by the Board. As an old Parliamentarian, like the noble Viscount, I like what has been called the cut and thrust of debate, and so long as you have the report by the Board, which sets out the directions which have been given by the Minister, and you thereupon put on the alert everyone who wants to discuss the matter, I think you have done all that is necessary. The Minister will then, on the floor of the House, have to justify the attitude he has taken. Both the noble Viscount and I agree that we must have this clause, because there may be occasions when the directions should not be made public. We have both provided for that, so there really is very little between us. I hope that the noble Viscount on this occasion will be satisfied with the effort I have made to meet him.
Page 47, line 12, at end insert the said new subsection.—(The Lord Chancellor.)
§ VISCOUNT SWINTON
My Lords, I am much obliged to the noble and learned Lord. We both agree that there should be disclosure of the directions by the Minister to the Board. In Particular, I am concerned where the Minister overrules the opinion of the Board. Equally we are agreed that the Minister should not be forced to disclose directions where it would be contrary to the public interest so to do. The Lord Chancellor proposed that this should be done in the report. I thought that was a little invidious, and preferred that it should be done by a parallel statement of the Minister. I prefer my own Amendment, but I gratefully accept the Lord Chancellor's Amendment.
§ On Question, Amendment agreed to.
§ Clause 61:
§ Arbitration under this Act.
§ 61.—(1) For the purposes of the determination of any question as to which this Act provides that it is to be determined by arbitra- 81 tion thereunder, a panel of persons to act as arbitrators shall be appointed by the Lord Chancellor, and the Lord Chancellor shall nominate two members of the panel as chairman thereof and as deputy chairman respectively.
§ (2) Any such question as aforesaid shall be determined by the arbitration of such member of the panel as the chairman, or, in event of the chairman's being temporarily absent or unable to act, the deputy chairman may select.
LORD AMMON moved after "Act" to insert "or any regulation made thereunder." The noble Lord said: My Lords, with your Lordships' permission, perhaps we could take the next two Amendments together. They are almost drafting Amendments. The effect of the Amendments is to make sub-section (1) of Clause 61 read:
For the purposes of the determination of any question as to which this Act or any regulation made thereunder provides that it is to be determined by arbitration under this Act, a panel of persons to act as arbitrators shall be appointed by the Lord Chancellor …
and it then reads on as in the printed Bill. Questions of fact will arise for the determination of which, in pursuance of the power contained in Clause 62 (1) (c), it will be necessary to make provision in Regulations. It will be convenient for this purpose simply to say in the Regulations that such questions "shall be determined by arbitration under the Act", thereby attracting the provisions of Clause 61 of the Bill and Section 24 of the Arbitration Act, 1889. These Amendments make it possible for this to be done.
Page 49, line 29, after ("Act") insert ("or any regulation made thereunder").—(Lord Ammon.)
§ On Question, Amendment agreed to.
Page 49, line 30, leave out ("thereunder") and insert ("under this Act").—(Lord Ammon.)
§ On Question, Amendment agreed to.
§ Clause 63:
63.—(1) In this Act, unless the context otherwise requires, the following expressions have the meanings hereby assigned to them respectively, that is to say,—
former freeholder's lease" has the meaning assigned to it by the proviso to subsection (8) of section eleven of this Act;
Page 52, line 2, leave out ("the proviso to").—(Lord Ammon.)
§ On Question, Amendment agreed to.
LORD AMMON moved to insert:
the Miners' Welfare Fund" means the fund constituted by subsection (1) of section twenty of the Mining Industry Act, 1920;
The noble and learned Lord said: My Lords, I beg to move this Amendment. The effect of it is to transfer from Clause 40 to this clause the definition of "Miners' Welfare Fund" so as to render it applicable to Clause 41 as well as to Clause 40.
§ On Question, Amendment agreed to.
§ First Schedule:
§ Assets to be transferred to the Board.