Lords Sitting of 20 June 1946

Preamble
The House met at half-past two of the clock. The LORD CHANCELLOR on the Woolsack.
Prayers.

BIRMINGHAM CORPORATION BILL.
Read 2a, and committed: The Committee to be proposed by the Committee of Selection.
RHODES TRUST BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.

COAL INDUSTRY NATIONALISATION BILL.
House again in Committee (according to order): [The EARL OF DROGHEDA in the Chair].
Clause 28:
Reserve fund of the Board.
28.—(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.
Amendment moved—
Page 31, line 35, leave out from the second ("shall") to ("carry") in line 37.—(Viscount Swinton.)
THE LORD CHANCELLOR (LORD JOWITT): Since the House rose yesterday I have been looking into this matter. I am, as I hope your Lordships realize, always very anxious if I can to meet the views of noble Lords opposite. After all, the whole essence of democracy, as I see it, is government by discussion, and give and take, and so on.
I have a suggestion rather on these lines to make to your Lordships. Noble Lords opposite, as I understand them, are concerned about this. They are very anxious that this Board should be a real affair, that the members should not be,
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as it were, mere civil servants dressed up in commercial garb. When I say "mere civil servants," please do not think that I mean to say anything derogatory about the Civil Service, because I would be the last person to do that. I only want to emphasize that on any important matter the function of civil servants is to put the relevant facts before the Ministers in order that the Ministers may decide, and then to see that the Ministerial decision is carried out. We are all anxious to see that this Board does do a real job of work as commercial men do a job of work.
On the other hand, I think it is foolish to push too far this analogy of an ordinary commercial business, and I think so for several reasons. First of all, I think that the very size of the undertaking differentiates this business from any other business. Secondly, I think that the repercussions of the whole business on the full employment policy are obviously very great. Therefore what I am anxious to do is this. I want to preserve complete and absolute Treasury control in the last resort, because we are dealing here with public money in a broad, general effect, and with very large sums of public money. The Chancellor of the Exchequer must, therefore, have the last word, but the Board should be allowed to function as they normally would function, and set up such a reserve fund such as they think fit and deal with it as they like, carrying revenue to it or not as they desire subject to an overriding power of the Minister to give directions in certain matters.
I have myself attempted to draft something, but may I point out that I am not wedded to this particular form of words. Indeed, I have not shown these particular words to the Parliamentary draftsman as yet, and possibly they are very defective. I am dealing now with Clause 28, and I have in mind some such words as these: "The Board shall establish a reserve fund and shall carry to the credit of the fund out of their revenues such sums as they think proper. The reserve fund shall be managed in such manner and applied for such purposes of the Board as the Board may direct."
Down to that point there is absolute authority with the Board. Now I come to my overriding power. "Provided always that the power of the Minister with the approval of the Treasury to give

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directions shall extend to any matters relating to the constitution, management or application of the reserve fund and the method of dealing with the revenues of the Board." I am not, of course, asking that this be accepted now, because I only evolved it in the course of the morning. I shall be very ready, if your Lordships think it is a convenient course, to enter into discussions with your Lordships to see whether, between now and the Report stage, we can hammer out something on these lines agreeable to both sides. Of course, if we do adopt this way of getting out of the difficulty in Clause 28, it follows that the same principle would apply to Clause 29. Mutatis mutandis, we should have to alter the words a little, but the same principle applies. I think, however, that this meets the criticism which may fairly be made here that as the clause is drawn the Board would be merely acting as creatures of the Minister and have no independent right at all. Clause 28 (1) as originally drafted reads:
"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."
The difference between that form of words and my form of words is that under my form of words initiative is with the Board, so that they may be prepared to do whatever they think, as commercial men, is right to be done. Having said that, I reserve to the Minister, with the approval of the Treasury, the most complete power to see that these vast sums of public moneys are dealt with in a way which is consistent with the whole policy of the Government of the day. That is my suggestion. It is the best I can make in view of the very limited time which I have had to see if I could find some compromise between the two points of view which have been expressed.
VISCOUNT SWINTON: I am sure that the whole House will feel under a real obligation to the Lord Chancellor for the trouble which he has taken in this matter. He has approached it in a very fair and reasonable spirit, if I may say so, and he has had very little time to deal with it. I can say at once, on behalf of my noble friends, that we accept the suggestion that we should take some further time to consider this and to see if we can get the correct form of words. I am very glad
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that the Lord Chancellor does not hold himself in any way bound to the words which he has just used. I know the difficulty of drafting at short notice. I have tried my hand on this Bill, and the Lord Chancellor has already proved to me that, on at least half a dozen occasions, I had drafted something which did not really carry out what I intended, and he has corrected it for me. What he has said to-day is that the duty of creating and managing the reserve should rest primarily with the Board—that, indeed, I think, all agreed yesterday must be the function of a board of directors—but that there should be an over-riding power in the Minister and the Treasury. As the Lord Chancellor put it, if a really serious matter arises the Treasury should have the power to intervene in the last resort. I do not think any of us would dissent from that. What I would venture to suggest, however, is that his words do much more than that. I think we all believe the same thing. The Lord Chancellor recalled that the noble Lord who spoke at the beginning of the second day of the Second Reading debate said:
"The Minister does not want to intervene except on the rarest occasions and on the broadest matters of national interest."
I should have thought, with respect, that Clause 3, which we have already passed, does, in fact, exactly give to the Minister general power in matters of over-riding importance. If your Lordships will look back to Clause 3 (1) you will see that it states that:
"The Minister may, after consultation with the Board, give to the Board directions of a general character as to the exercise and performance by the Board of their functions in relation to matters appearing to the Minister to affect the national interest, and the Board shall give effect to any such directions."
I should have thought that this is exactly the general over-riding power which the Lord Chancellor says—and I agree with him—the Minister must have in a case like this. Speaking for myself, I would have been quite content to accept either my Amendment or, on first glance, the first part of the suggested Amendment which the Lord Chancellor has read out, with the proviso that nothing in this clause shall detract from the power of the Minister under Clause 3 to give directions of a general character. I should have thought that that really gave the protection which the Lord Chancellor wants for the Minister, and, at the same time,

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gave the Board the assurance that they would not Abe interfered with except on what I may broadly call matters of principle. If the Lord Chancellor will forgive me, I would say that his proposed Amendment goes very much farther than this. It is not confined to a matter of general principle nor to powers to be used in the last resort.
I agree with him that the first two clauses give power to the Board to create and manage the fund, provided always that the power of the Minister, with the approval of the Treasury, to give directions shall extend to any matters relating to the constitution, management or application of the reserve fund, and the method of dealing with the revenue of the Board. Those cover absolutely everything. The important thing is to see that the words we put in this Bill express our intention. His proposal would mean that the Minister and the Treasury can come in, not in the last resort, but at any time before, during or after any consideration by the Board of any matter in relation to the creation, establishment or management of a reserve.
I feel sure that he will agree that it goes, in terms, far beyond what he is reasonably contending for, and I would ask him to consider very favourably my alternative suggestion. This would provide expressly that the general powers of the Minister in Clause 3 should extend a any activities which the Board conduct under Clause 28. I am very much obliged to the noble and learned Lord, the Lord Chancellor, for having given some of us the opportunity of seeing the results of his labours before we came in to-day. Consequently, we have been able to deal with them more intelligently than we otherwise would. While I fully agree that the right thing to do is to withdraw my Amendment, I thought it would be helpful to the discussions we shall have between ourselves, now and hereafter, if I gave the House my criticisms of the alternative he has proposed.
THE LORD CHANCELLOR: I did not expect that there would be no criticisms of my words, but the noble Viscount will realize that I have not an easy task.
VISCOUNT MAUGHAM: I hope your Lordships will allow me to make one remark on this matter. It is a question on which I have been greatly concerned. It
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seems to me that the proposal made by the Lord Chancellor is one which the Opposition might well accept, so long as the powers in the proviso were limited in somewhat the same way as the Government have limited the powers of the Minister to interfere under Clause 3. I suggest that subsection (2) of that clause might be married to the clause which the noble and learned Lord, the Lord Chancellor, has told us about.
" In framing programmes of reorganization or development involving substantial outlay on capital account the Board shall act on lines settled from time to time with the approval of the Minister."
That leaves the Board power to deal with all minor outlays, whether on capital account or on revenue account. My fear is that the clause which the noble and learned Lord, the Lord Chancellor, has read to us might result in the Board being interfered with on a number of minor matters, and if the words "substantial outlay on capital account," or similar words, were inserted in the proposed clause that the noble and learned Lord, the Lord Chancellor, has suggested to us, I should be content.
Amendment, by leave, withdrawn.
Clause 28 agreed to.
Clause 29:
Application of surplus revenues of the Board.
29. Any excess of the Board's revenues for any financial year 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 for such of the purposes of the Board as the Minister, with the approval of the Treasury, may direct.
2.53 p.m.
LORD AMMON: This is a drafting Amendment, but perhaps it is as well that a word of explanation should be given and placed on record. The financial year referred to is the Board's financial year, as defined in Clause 20, and not the Exchequer financial year, which ends on 31st March.
I beg to move.
Amendment moved—
Page 31, line 42, after ("year") insert ("of the Board ").—(Lord Ammon.)
On Question, Amendment agreed to.
2.54 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved 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: This is an entirely separate point and affects the whole principle of how the surplus revenue should be applied. If we were to leave this matter to the discretion of the Board, then the sort of arguments which we have been hearing upon the previous clauses in regard to the compromise which has been suggested, might be repeated here. I think there is a great case here for Parliament itself to say how the ultimate surplus revenue should be applied. And by surplus revenue I mean what is left after the Board (and the Minister, in so far as he has to come in), have discharged all their obligations, dealt with all their development work and taken all the proper financial precautions by the creation of the reserve. They would be able to plough money back into the business. They would be able, and indeed it would be their duty, to depreciate assets in whatever manner they thought right and business-like, just as would the board of any progressive company. They would carry to the reserve the amount they think right, subject to any agreement which may be made as to the power of the Ministry and of the Treasury in that respect.
But when proper reserve funds have been created, there may be—I hope there will be—if the business is well managed, some reduction in overhead costs and a consequent reduction in operating costs. If this materializes, one of two things can happen. Either you can reduce the price of your commodity or you can make a large profit. In this case the Government have announced quite plainly that they do not intend that a large profit shall be made. They have said categorically that the Treasury is to have no interest in this business. There is to be no repetition of the Road Fund. I am not going to argue whether assigned revenues are right or wrong—personally I think they are wrong—but at any rate no argument of that sort applies here, since the Treasury have clearly stated that in no circumstances is the general
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Treasury Fund—the Budget—to have any call upon the surplus revenues which this Board may create. Therefore in this case I think it falls to Parliament to say what should happen to this surplus revenue.
The great object of this Bill as has been said, is to give us cheap and abundant coal. Cheap coal is almost as important as abundant coal. Everybody is agreed how vital it is that we shall not only get coal in quantity but that we should cheapen the price. Coal goes into everything; not only into the daily life of every consumer but into every industry twice over—in fact, three times over. It goes in as raw materials, as power and also for every form of transportation. Therefore, we are all vitally interested in getting the price of coal down, and I think it would be the right thing, and I believe it is the object of this new measure, to turn the coal industry into a public utility. That means a service of use to the public; and the greatest service that can be rendered to the public, whether domestic or industrial, is to reduce the price of coal.
Therefore I venture to suggest that it would be wise and right for Parliament now, while giving to the Minister and the Board the fullest discretion to create a reserve to discharge obligations and carry on development, to enact that if and when surplus revenues do occur they should be applied to the reduction of the price of coal. I think that would be a stimulation to the Board and an encouragement to the public. I have no doubt that this is a case where it would be right that the Minister should also have his say, because it is a big policy matter, but if the House agrees with this I would in perfectly general terms lay down that if the revenue is sufficient the price of coal should be reduced. We should not attempt to lay down whether this or that kind of coal should be reduced in price, or whether the reduction should go to the domestic consumer, the industrial consumer or to export. That should be left entirely to the discretion of the Board and the Minister, but we should establish the principle that, if surplus revenues are made, they should go to the reduction of the price of coal. That I am sure would be a wise thing to do, and it is in that spirit that I submit this Amendment to your Lordships.
Amendment moved—
Page 32, line 1, leave out from ("applied") to end of line 3 and 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 ").—(Viscount Swinton.)
LORD TEYNHAM: I should like t6 support this Amendment, which I consider very important. There are certainly a number of precedents in which Parliament has considered it necessary to protect the consumer by a clause containing the substance of this Amendment. If we look at the London and Home Counties Electricity Order, 1935, we find Section 27 provides that, after the Electricity Board have carried out certain directions;
"any balance of such revenue, after making payments for the purposes aforesaid, shall be applied in making such a rateable reduction in the charges made by the Company for the supply of electricity."
I feel that the consumers' interest in this case should be protected by a somewhat similar clause. It may possibly be argued by the noble and learned Lord, the Lord Chancellor, that the words of the Amendment will have too limiting an effect. I do not think that is really a very substantial criticism because, as the Amendment is drawn, the surplus revenue would be devoted towards a reduction in the price of coal after the Beard has discharged all the other functions set out in the Bill. I hope that the Government will accept this Amendment, as cheap coal is absolutely vital to the industrial life of this country.
LORD AMMON: The arguments with regard to this Amendment are very much the same as those in the one we discussed a short time ago. I have authority to say that this will be considered with the other, with a view to dealing with it at a later stage, on lines similar to those already suggested.
VISCOUNT CRANBORNE: With all due deference to the noble Lord, I think the argument is quite a different one. The other Amendment dealt with the question whether the Board or the Minister should have the ultimate say, or even the initial say, in the creation of a reserve. This is quite a different question. It is whether Parliament in its sovereign power should lay it down that the ultimate profit from the industry, if there is such a thing, after all the other expenses have been defrayed, and money
1020
has been put to reserve, should be devoted to a reduction in the price of coal. That is quite a different point. It may be considered alongside the other, but it is not the same point, and it cannot be considered with it.
LORD AMMON: The same position arises. Might I draw the noble Lord's attention to the statement made by the Prime Minister in the House a little while ago? He said:
" Policy will be directed to the latter rather than the former objective; but the two objectives "—
VISCOUNT CRANBORNE: What are the objectives?
LORD AMMON: It is relevant to recall the answer given by the Prime Minister when asked in Parliament "Whether it is the policy of the Government that nationalized industries shall endeavour to make a profit for the benefit of the Exchequer, or provide the public with the best possible service at the lowest practicable cost. The answer given was:
"Policy will be directed to the latter rather than to the former objective; but the two objectives do not represent a complete statement of the possible bases of policy, and it would be quite impracticable to make a general pronouncement which would cover all circumstances in all the nationalized industries."
Might I say that with a policy of nationalization of basic industries there is the possibility of real control over a wide field, and if influence over non-nationalized industries, and industries managed by local authorities is desirable, then a fortiori there should be control over such expenditure by nationalized industries. That control is made possible by this clause.
VISCOUND SWINTON: With great respect to the noble Lord, what he has been reading really has nothing to do with the important question which is before the House. There is a perfectly simple issue before the House. When in this particular nationalized industry there is a surplus, after discharging every obligation and putting everything to reserve, how is that surplus going to be dealt with? Certainly the first of the alternatives which the Prime Minister in a general answer referred to, must be wholly irrelevant, because the noble Lord, Lord Winster, on the Second Reading debate, stated categorically on the authority of His Majesty's Government that in no circumstances

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whatever would the Treasury levy a penny of toll upon the proceeds of this industry. Therefore the first alternative is obviously entirely excluded. The Treasury is going to take nothing away, and therefore they are left with this fund.
If the noble Lord says that the Government must have more time to consider this, and they would prefer to debate it on Report, that is one thing, but he will appreciate that it has nothing whatever to do with what should be the function of the Board, and what should be the function of the Minister. This is a perfectly simple proposal, that Parliament should lay down that where there is surplus revenue, that surplus revenue shall be applied to the reduction of the price of coal. If the Minister says that the Government have not considered this, and do not know what it is that they wish to do, then it may be reasonable that we should debate this thing when the Government do know what they intend, but do not let me leave this matter with the Government under any misapprehension as to what the issue is. Have I made it clear?
THE LORD CHANCELLOR: May I tell you how this matter strikes me? I think, and I certainly hope, that in the vast majority of cases any surplus revenue—which surplus means after constituting a reserve—would be applied to reducing the price of coal. Like the noble Viscount, I will not specify any particular sort of coal. But I do not think that it would be wise to have a statutory obligation, because if we set down in this Statute something which is going to prevail into the indefinite future then all sorts of circumstances which we cannot foresee may arise. I understand it may be considered necessary to increase wages or to increase welfare funds.
The obvious way to deal with surplus revenue is to reduce the price of coal and I repeat what I have said before that we do not intend to allow this fund to be raided in the way the Road Fund was raided for the benefit of the Treasury. But I do say that in the future it is possible that situations may arise which may make it desirable to spend the revenue in some other way. I think it unlikely, but I would advise your Lordships that it is really not safe here and now to lay down in this Statute an absolute direction which must apply in cases of all sorts that may
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arise in years to come which we can hardly now foresee. Therefore, I do not think it would be wise to commit ourselves in this way.
LORD CHORLEY: May I express the hope that the Government will not give way on this point. Noble Lords on the other side have based the whole of their argument in the course of these proceedings in Committee on the need of leaving it to the Board to control this industry. Now they are trying to tic it down; they are trying to limit it. Obviously if this Board is to work this industry efficiently and capably it has got to have discretion in regard to the employment of this surplus. It may be found necessary to employ it in this direction or in that. While obviously reduction of the price of coal is a very important matter, I agree with the noble and learned Lord, the Lord Chancellor, that it would be a mistake to try and write into an Act of Parliament an express direction to the Board as to the way in which it has to deal with the surplus.
VISCOUNT CRANBORNE: I do not think the point the noble and learned Lord Chancellor made is quite relevant. He said, quite rightly, that it might be necessary or desirable to increase wages. I should have thought that is a part of the expenses of the industry and that would be allowed for before this ultimate profit would be declared at all. We do not mean there is to be a limitation on the raising of wages at all. What we do mean is that ultimately if the scheme is successful there may be a profit which is not kept by the industry at all. What is to happen to it? Either it can be taken by the Treasury and used for some different purpose, or it can be used for the reduction of the price of coal.
THE LORD CHANCELLOR: May I give an illustration of what it might be used for? It might be used for giving compensation to people who have suffered injury in the mines, and if there was any change in the value of money it might be very important that it should be used in that way.
VISCOUNT CRANBORNE: All that would be allowed for, as I understand it, before this final surplus was calculated at all. I think there is a difference of understanding between the Government and us on that point. We are only referring to

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that surplus which is not kept for any of the purposes of the industry. It is the function of the Board and the Minister to decide what is needed for the industry. But there may be an ultimate surplus which would either have to go to the Exchequer to be used for some other purposes or, in our view, should be used for a reduction in the price of coal. This is not a frivolous point and it is not intended to affect a rise in wages or any other purpose connected with the industry at all. I do not want to press this matter to extremes at all. I think the spirit of this Committee largely has been very good and neither side wishes to press matters more than is necessary. But I do hope the Government will consider the point we make before the Report Stage and see whether there is anything that can be done to meet us. I am not asking any more at the present stage.
THE LORD CHANCELLOR: I am very ready to do that. I do not suggest this is a frivolous Amendment. The fact that it is put forward and pressed in itself justifies me in giving it consideration. Therefore I undertake to do what the noble Viscount asks, but I do not want to hold out very much hope on this.
VISCOUNT SWINTON: In that case, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 29 agreed to.
Clause 30:
Board's accounts and audit thereof.
30.—(i) 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.
(3) So soon as the accounts of the Board have been audited, they shall send a copy of the statement of accounts referred to in subsection (1) of this section to the Minister together with a copy of any report made by the auditors on that statement or on the accounts of the Board.
(4) The Minister shall lay a copy of every such statement and report before each House of Parliament.
3.16 p.m.
LORD LLEWELLIN LORD LLEWELLIN moved, in subsection (1), after "thereto," to insert:
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"in accordance with the requirements in regard to keeping proper books of account contained in the Companies Act, 1929, or any statutory modification thereof."
The noble Lord said: I beg to move the Amendment standing in my name. Clause 30 (1) now reads: "The Board shall keep proper accounts …" We are all agreed, I think, that they should keep proper accounts. The question is: what are proper accounts? We have a very good statutory definition of what accounts should be in all limited liability companies. That has been on the Statute Book since 1929. My proposal is that we should give in the Bill some definition of proper accounts and say that they should be in accordance with the requirements in regard to keeping books of account contained in the Companies Act, 1929, or any statutory modifications thereafter. I appreciate that all the provisions in the Companies Act as to proper books of account may not apply to a statutory Board such as that set up under this Bill, so perhaps the words "so far as are applicable" ought to have been put into my Amendment. But I would like to hear from the Government whether they can see their way to define what "proper accounts" are. I certainly submit that they ought to be the same for a Board of this sort as they are for the vast mass of industrial undertakings in this country, especially when the money to develop this industry will be money collected from the taxpayers or received in some way by the Treasury. I think in those circumstances it is most important that this Board should keep its accounts as strictly in accordance with the statutory obligations as any company operating with private capital.
Amendment moved—
Page 32, line 5, after ("thereto") insert ("in accordance with the requirements in regard to keeping proper books of account contained in the Companies Act, 1929, or any statutory modification thereof ").—(Lord Llewellin.)
THE MINISTER OF CIVIL AVIATION (LORD WINSTER): This Amendment proposes to make the beginning of Clause 30 (1) read as follows:
"The Board shall keep proper accounts and other records in relation thereto in accordance with"—
and these are the important words—
"the requirements in regard to keeping proper books of account contained in the

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companies Act, 1929, or any statutory modification thereof."
If we look at the Companies Act, 1929, we see that Section 122 of that Act provides that every company shall cause to be kept proper books of account with respect to, first, all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure take place; secondly, all sales and purchases of goods by the company; and thirdly, the assets and liabilities of the company.
I notice that there are a number of Amendments on the paper for discussion on Clause 30. All these Amendments seek variously to define more closely the requirements about keeping accounts in the form in which they are published. In view of the numerous Amendments I think it may be useful to your Lordships for me to state at once that the Government view is that more may be lost than gained by attempting to tie everything up too closely in the Bill. If one looks at the terms of the Amendment moved by the noble Lord I think the Amendment itself recognizes that what has been considered best in the past may possibly be improved on in the future, as it refers not only to the Companies Act, 1929, but to "any statutory modification thereof." I take that as implying that what has been considered quite adequate and suitable in the past may conceivably be improved upon in the future.
LORD LLEWELIN: I did not want to tie this down for ever to the 1929 Act if Parliament modifies that Act in the course of time, as it may well do.
LORD WINSTER: I agree. As I have said, the Government take the view that more may be lost than gained by an attempt to tie everything up too closely. I must not try to put words into the noble Lord's mouth or attempt to read his mind, but when I read those words "or any statutory modification thereof," it occurred to me that the noble Lord might have been thinking about the findings of the Cohen Committee. At any rate, I think it is relevant in connexion with this Amendment to refer to the findings of that Committee, which commented in this way on the existing provision in the Companies Act:
"We consider that there are circumstances in which a company could comply with Section 122"—
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I have read three of the provisions of that section—
"but, nevertheless, would not keep adequate books of account for the nature of its business."
While the Committee suggested a new wording by which Section 122 might be improved, they gave as their opinion:
"It seems to us impracticable to set out in a Statute all the matters in respect to which books of account should be kept, owing to the difficulty of compiling a comprehensive list which would cover the circumstances of every company."
I think that that expression of opinion by the Cohen Committee affords a very adequate answer to the Amendment moved by the noble Lord. While the Board will not be subject to direction in respect of the form of accounts they are to keep, they will clearly have to keep them in such form as will enable them to prepare their annual statement of accounts in the form in which they are directed to prepare it, and this may very well entail the keeping of far more elaborate books of account than are required by the Companies Act. I would assure the noble Lord that the Board are certainly not going to do otherwise than adopt a very high standard in regard to accounts. They will keep their accounts most strictly and will not even be limited by the provisions of the Companies Act to which I have referred. In view of that, I hope the noble Lord may feel able to withdraw his Amendment, which otherwise I am bound to say I should feel unable to accept.
LORD BALFOUR OF INCHRYE: Before my noble friend follows whatever course he considers necessary on this particular Amendment, I should like to say that the noble Lord, the Minister of Civil Aviation, anticipated something which we were going to suggest from this side of the House. We were going to suggest that once this Amendment had been dealt with, then, if the Committee agreed, we should have a general discussion on all the other Amendments on Clause 30 down to the final Amendment by my noble friend Lord de L'Isle and Dudley.
VISCOUNT ELIBANK: Before we go on to that, it seems to me that this Amendment stands by itself, quite apart from the other Amendments. It deals specifically with the power that the Minister shall have over decisions as to how the accounts are to be kept. I wish

1027
to submit to the Government that it is not right that in the keeping of accounts companies should be guided by one set of regulations—regulations laid down by Parliament and amended from time to time, as has been suggested by my noble friend—whilst this nationalized Board should be governed only by decisions of the Minister concerned. I have over and over again in my Parliamentary experience heard Ministers get up and say that so and so will happen under a particular section; that that is what they intend and that that is what they 'believe is going to happen. But as the years pass by the discussions which took place in Parliament pass out of account altogether; people do not remember them and are, therefore, guided by what is contained in the particular section concerned.
My noble friend suggested that the particular Amendment which he has put down should be inserted in the middle of a clause. If he would agree, and if the Government would agree, I would suggest that it should be inserted at the end of the clause, so that the clause would read
"… shall prepare in respect of each financial year of the Board a statement of accounts in such form as the Minister may direct and
adding two or three words to the begining of his Amendment—
" that that statement shall be in accordance 'with the requirements with regard to keeping proper books of account contained in the Companies Act 1929 or any statutory modification thereof ".
If that were added to the section it would at least insist that the Minister should be guided by the Statute in being in regard to keeping accounts and there would be no differentiation between an ordinary company and this Board as to how accounts should 'be kept. I can foresee that if something of this sort is not inserted, we may have any kind of accounts.
I remember that some years ago a certain investment came before the investment committee of a company of which I was a director. It happened that the investment was in a company concerned with the distribution of electricity—a joint electricity authority which was guaranteed by the Government. We looked at the accounts and we saw from them that the authority had not met its full obligations except by adding on an
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estimate of what it expected to receive between December 9 and December 31 of that year, the calendar year being the period of their accounts. We objected to that, because we knew that if any private company or any public company had put forward accounts of that kind it would have been "plastered" from one end of the City of London to another—accounts containing an estimate of what was going to be received in order to balance the accounts exactly. There were certain objections on the part of the committee, but on its being stated that whatever happened the authority was guaranteed by the Government, we continued the investment. What I want to point out is that if the Minister has the power to decide at any moment the form in which those accounts shall be rendered, he might find himself in a very similar position. Surely that is not what the Government desire in this case.
We understand that whilst the coal industry is to be nationalized it is to be conducted on a business basis. If that is a right assumption—and I assure the Government that it is the assumption which is held throughout the country—then we ought to be sure that the accounts, when they are presented, shall be presented in such a form as is understood by every person in the country who knows anything about these things,. and in the form in which they are usually presented by public companies. I venture to suggest, in support of my noble friend, if he would agree with me, that instead of having his Amendment inserted in the middle of the subsection, it be inserted with a few explanatory words at the end of the clause.
3.31 p.m.
THE MARQUESS OF READING: May I say one word on this matter. I quite agree with the suggestion that there should be a general discussion on the remaining Amendments to this clause. But I am wondering whether it would not be more helpful if this particular Amendment were considered in the general discussion, because although I assent to the proposition that we want some definition of the accounts that are going to be required, I am not myself convinced that the accounts prescribed by the 1929 Statute may be actually sufficient. They may be a minimum, but they may not be entirely adequate. For that purpose I suggest

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that this particular Amendment should form part of the general discussion. What we want to ensure is that we do not have Treasury accounts, and that they will be commercial accounts. I think if the form in which accounts in general are to be kept was to be discussed as one topic, we might perhaps arrive at some profitable solution.
LORD WINSTER: I should be quite agreeable to the course proposed by the noble Marquess. As regards what was said by my noble friend, I regret that he thought that I was not paying attention. I assure him that I was paying the fullest attention. At this moment I will only point out this fact in regard to the specific Amendment proposed by the noble Lord. It is quite true that the Bill provides that there should be a statement of accounts in such form as the Minister may direct. That is so. But subsection (2) says that the accounts shall be audited by auditors to be appointed annually by the Minister. The Minister will have no power to direct the auditors as to what form the audit shall take, or what remarks they shall make. The accounts will be subject to the impartial scrutiny of a firm of auditors. Nobody would doubt that such a firm of auditors as would be employed would be completely impartial in their report upon the accounts. The matter does not end there, because subsection (4) provides that the Minister shall lay a copy of every such statement and report before each House of Parliament.
I take it that the object of the noble Lord's Amendment was primarily to ensure that the accounts of the Board are properly and fully kept, and I suggest to the noble Lord that as the accounts are to be scrutinized by auditors, and are subsequently to be laid before Parliament, we really may quite safely assume that the accounts will be kept very fully and very properly and will give a proper account of the transactions of the Board.
VISCOUNT SWINTON: With great respect, I do not think the argument about auditors is a satisfactory one. All the auditor says is that the accounts do not misrepresent the condition of the business. I put it bluntly. The auditor, as such, has no right to say in what form accounts are to be kept, provided they comply with the rules of the company.
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A wise company takes its auditor, so to speak, into partnership with it, and goes most carefully with the auditors into the form the accounts are to take—that is, if it is a business which wishes to give the fullest possible information and keep accounts in the most satisfactory manner. But the mere fact that accounts are audited does not in the least mean they are going to be informative. One knows that the Cohen Committee have had to report about consolidated balance sheets. Those are made necessary because audited accounts, audited by the most respectable auditors in the world, have been completely uninformative to the shareholders.
I therefore only rise to say that the fact that there is an independent audit is no sort of guarantee that the accounts are going to be what Parliament would wish them to be. I fully agree that the practical course is to get down to a general discussion on what directions Parliament wishes to give in regard to the form the accounts should take.
LORD WINSTER: Many of the facts stated are correct, but if we look at subsection (3) we see:
"So soon as the accounts of the Board have been audited, they shall send a copy of the statement of accounts referred to in subsection (1) of this section to the Minister together with a copy any report made by the auditors on that statement or on the accounts of the Board."
Subsection (4) goes on to say:
"The Minister shall lay a copy of every such statement and repot before each House of Parliament."
Therefore the auditors are not precluded from making a report on the manner in which the accounts are kept, and a copy of that report must be laid before Parliament. I think the noble Viscount will agree that the other place is quite capable of scrutinizing such matters very closely indeed, and any question of loose accounting is hardly likely to escape their notice.
VISCOUNT SWINTON: I regard that as completely unsatisfactory. Whatever the other place may do, that does not relieve us of doing our duty here. The fact that the auditor is going to make a report does not mean that the auditor is going to say that he thinks there would be a better way of keeping the accounts. The accounts are going to be kept in the

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way in which Parliament in this clause directs that they should be kept and Parliament can lay down what it pleases. It can lay down directions which will make the accounts informative, or it can leave the question at large. The sole duty of the auditor—and I really do speak with some knowledge of these things, as indeed can every member of this House who has been in business for many years—is to see that the accounts are not incorrect, and I venture to say he would be travelling far outside his functions as an auditor if he were to do anything else. It is not his business to say what Parliament might have laid down or should have laid down—that is for us to do. If any comments are to be made, it is for the Minister to make them. The only statement which will be in the auditor's report will be that the accounts are correct, and of course the accounts are going to be kept correctly. All you will get in the auditor's report, unless he thinks there is something very odd about them—which I suppose is very unlikely—will be that the final report is a true and correct representation of the Company's accounts, drawn up in compliance with the Companies Act.
LORD FAIRFAX OF CAMERON: I should like to support the Amendment, for the simple reason that accounts are the only yardstick of the progress, the success or failure of an industry which is unique in importance because of the fact that it represents the investment of public money. Its success or failure for this reason is of tremendous importance. The accounts afford the only check on whether it has been a success or a failure. If from that point of view alone, surely it is necessary to give accounts that will clearly show, without hiding anything at all, whether the industry has been a success or a failure. It is easy to hide figures in accounts. Often that is not done intentionally, but is done because people who know all the figures are apt to forget that other people do not also know them. That may be a tendency in some cases. I do believe, for these reasons, that accounts should be as full as possible, and also that the function of Parliament should not be stifled by the accounts. I consider it would be most unhealthy if Parliament's function were
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stifled by the fact that the accounts were not full enough.
LORD LLEWELLIN: I have been trying for some time to get in a word before the general discussion started. I quite appreciate that my Amendment is not completely applicable to the Board's accounts, and I was, to a certain extent, reassured by the Minister of Civil Aviation saying that really accounts would be produced which would comply with the best commercial standards. That was what I attempted to achieve, and I think it is probably right not to press my Amendment, which, as I say, is not completely applicable to a Board of this sort. Therefore, I now do what I have been trying to do for some little time, and ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.42 p.m.
LORD DE L'ISLE AND DUDLEY LORD DE L'ISLE AND DUDLEY moved in subsection (1), to leave out "a statement of accounts in such form as the Minister may direct," and insert
"a balance sheet and trading and profit and loss accounts, together with accounts showing for each mining district the financial results respectively of the colliery activities and of each of the ancillary activities of the Board, with in each case, particulars, under appropriate headings, of the items making up the revenue and expenditure, details of the capital expenditure and the depreciation charged to revenue in respect thereof.
Such accounts to be compiled in a form which permits a comparison from year to year and which discloses the cost of each item of expenditure per ton of output in the case of coal and per normal unit of output in the case of ancillary activities, and the realised prices per ton of coal sold and per unit of output sold in the case of ancillary activities."
The noble Lord said: I have been rather fortified in my intention to move this Amendment by the remarks which have lately fallen from the lips of the Minister of Civil Aviation. I am afraid I thought he showed undue optimism in regard to the discrimination of Parliament in looking at accounts the form of which they have not laid down. It is extremely important that Parliament should express its intention in this matter. I do not think it is sufficient for Parliament to say that accounts should be kept in such form as the Minister may direct. I agree that it is difficult to lay down a comprehensive schedule and to tie the Board to a schedule in the way Parliament attempted to do in the past, under, I think, the Railways Accounts and Finance Act,

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1911. It is a recognized thing, as that Act shows, that where Parliament entrusts a service to a monopoly, that monopoly should account not only to Parliament but to the public and to consumers. I think that the words of the Bill, as they stand, are inadequate, although I put forward my Amendment with humility, because I recognize that it may be improved upon. But it does attempt to lay down the principle on which the accounts should be kept, so that information should be given to Parliament and to the public.
There are, as your Lordships no doubt realize, two distinct aspects to this matter. The first is that of the technical accuracy of the books of account, and the second is the informativeness of the statements of account which are published. They are entirely distinct matters. If I may, with humility, support the remarks which fell from the lips of the noble and learned Lord, the Lord Chancellor, earlier to-day, I would say that we can pay too much attention to commercial practice in these matters. When we set up a Board such as this to run our coal industry, we must require more of them than has been required in the past of commercial concerns, because the public should know and should be in a position to understand exactly how the thing is being run. I think I am correct in saying that it was the Webbs who, in one of their books on Socialism, wrote that "A nationalized industry should work within glass walls and should be subject to measurement." I think that that should be so, and that the way to ensure it is to see that the accounts are extremely full and informative.
The principles I have attempted to enunciate are that there should be a profit and loss account and separate accounts for each coal mining district, and separate accounts for ancillary activities, so that results may thereby be judged financially; that particulars should be disclosed so that, from year to year, the results obtained and what is expended per ton of coal and per normal unit of output in ancillary activities can be compared. I do attach great importance to being able to make comparisons from year to year. Unless you keep the accounts in stable form, or unless when you alter them you say how you have altered them, to make comparisons is difficult. So I think that Parliament should lay down that that is their intention, and possibly leave it to
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the Minister to make regulations and set out in detail how the accounts should be kept. But I do not think it is sufficient merely to say that the statement of accounts should be prepared in a form which the Minister may direct, because the Minister is an interested party, and Parliament should be in a position to regulate or lay down the general form of these accounts. I beg to move.
Amendment moved—
Page 32, line 6, leave out from ("Board") to end of line 7 and insert the said words.—(Lord de L'Isle and Dudley.)
LORD TEYNHAM: I consider this clause is one of the most important in the Bill. Unless it is properly drafted, Parliament may never know, or may not know until a very long time after damage has been done, the facts as to the success or otherwise of the operations of the Coal Board. I think it is essential that separate trading and profit and loss accounts should be printed which will differentiate between coal winning and the operation of coke ovens and other ancillary activities in each district. If this is not done it will be quite possible for coal winning to be run in some districts at a heavy loss, possibly for a number of years, without it being discovered. The result may be that an uneconomic group of mires may be kept going at the expense of economic districts. Perhaps there may be a tendency to do this because of political pressure, and this is one of the main difficulties which some of us have foreseen in connexion with this nationalization.
During the Second Reading we were told by the noble and learned Lord, the Lord Chancellor, that nationalization of the coal industry was a great experiment; therefore it seems to me to be all the more necessary that the country should be able to compare the results of the activities of the Coal Board with what has gone before and what is going on now. Unless separate accounts are kept, Parliament may never know the true state of affairs. In addition it is very essential that competition of some sort should exist in the various districts. This would not be possible unless the accounts showed a complete picture of the results in each district.
LORD BALFOUR OF INCHRYE: I have an Amendment which is coupled by the general discussion with matters raised by the noble Lord, Lord De L'Isle and

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Dudley. My Amendment proposes that the accounts should be so designed
…as to reveal the proceeds, costs and expenses attributable to the duties mentioned in subsection (1) of Section 1 of this Act and to each activity of the Board ancillary thereto."
The noble Lord, Lord De L'Isle and Dudley, put his finger on the most important point when he said that we want separate accounts in respect, first, of districts, and secondly, of activities. I believe there is no difference of view about that. Only by such separate accounts can one analyze the past, and, what is almost as important, watch tendencies for the future. Only by such accounts can Parliament be ensured knowledge of where those tendencies are going, and so take appropriate action, by advice, or pressure, or request to the Minister, in order either to endorse or to alter such tendencies of commercial activity as are revealed in the accounts.
No doubt the noble Lord will remember that in the British Overseas Airways Act, 1939, there was a condition that certain accounts were to be presented to Parliament. If my memory serves me right, the provisions in that Act are very similar to the provisions proposed by the Government in this Bill, as it is at present drafted. But the execution of that provision of the 1939 Act has never satisfied another place and there has been constant pressure on successive Governments to make certain that more detailed accounts are presented. There have been difficulties during the war, through staff and other troubles, but I want to make it clear that the provisions of this Act will not satisfy another place, nor this House. And, I think, quite rightly. I support most strongly the proposal put forward by my noble friend in this Amendment, that we should have separate accounts in respect of separate districts or activities.
VISCOUNT MAUGHAM: I should like to support the argument that has just been put before the House. It has been said by wise people that language was given to us to conceal our thoughts. It is still more true that accounts have been constantly used for the purpose of concealing the real nature of work done by a company or corporation. I have too constantly been brought into contact with those cases to be quite sure that the
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general clause which now exists in the Bill is sufficient. I see considerable weight in the argument that it is impossible to define precisely the nature of the accounts which should be kept by the Board, but I do not think there would be any insuperable difficulty in providing a clause to state the objects for which accounts are being framed and to indicate what they are intended to show. I think it would be sufficient if the Government could say that they would insert such words as those proposed after the reference to the accounts in Clause 30 (1). If they could do that I think the House would be satisfied, and I think these five or six Amendments would become unnecessary.
VISCOUNT BRIDGEMAN: I should like to say one word in support of the Amendment of the noble Lord, Lord De L'Isle and Dudley. At the present time the accounts of the colliery undertakings which it is proposed shall be taken over are very full, and a great deal of information can be obtained from them. I do not think it would be right to disguise from noble Lords opposite that there are many of us who wish to follow the progress of these colliery undertakings once they are nationalized. I think we should all be right in doing so. With everybody else, I hope the results will be satisfactory, but when one comes to look at the drafting of these clauses which deal with accounts they seem to me—perhaps I am wrong—to provide a lot of loopholes to allow the production of less informative and less clear accounts than have to be produced at the present time under the Companies Act. If anything went wrong with these collieries under nationalization it would be very wrong to put temptation in front of certain people in the Government service who might be inclined not to be so informative as they would have to be under the Companies Act.
THE MARQUESS OF READING: Might I add one word. Two points seem to have emerged from the general discussion which has taken place. The first is that the limitation which is imposed by making it depend on the form of accounts which the Minister may direct is not a welcome solution to the difficulty—at least on this side of the House. We have in some way to go beyond that stage and not leave it exclusively in the hands of the Minister. I think that it has become apparent that no really useful or final form of words is

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likely to emerge from discussion across the floor of the House. Accordingly, I suggest that at this stage we might perhaps leave it to the Government, in the hope that they will appreciate that we are not satisfied with the clause as it stands, and that they will devise something wider and more representative of the view of the House.
VISCOUNT SWINTON: If I may say so, I think that is a very helpful suggestion. I would like to clarify this a little further before we part. I do not think this is quite the right form of words, and I would like to have three undertakings from the Government, if I am not being too categorical. The first is the one for which the noble Marquess has just asked: that is, that we shall not leave it solely to the Minister's discretion to say what form he will direct. It may be all right that the Minister should act under certain general directions given him by Parliament as to what Parliament wants him to do, and for him to tell the auditor. Therefore, in the first place, we would like the Bill to be so amended that the Minister shall have certain directions from Parliament as to how these accounts are to be kept and presented. Secondly, we all want to have it stated in terms in the Bill that these accounts shall conform to the best commercial practice. An undertaking on these lines was given us on Second Reading, and as I do not think there is any difference of opinion between us on this I think it is just as well to have it included in the Bill. When Parliament has legislated about companies, we have always, on all sides, laid down a lot of new requirements for inclusion in the accounts. That led to really informative, consolidated balance sheets being presented. When Parliament is dealing with a nationally-owned undertaking, it ought not only to order accounts to be kept in the best possible form, but to say on the face of the Act of Parliament which creates the undertaking that that is what it is going to do. That is the second thing I would ask for.
The third is this—and I think it is more difficult. I believe there is a general feeling that the accounts should be so kept that we can distinguish between the coal-winning activities and the various ancillary undertakings set out in one of the earlier clauses. I rather doubt if it would be wise to lay down with the complete
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precision proposed by the noble Lord, the Lord De L'Isle and Dudley—although I followed each argument with interest and with general agreement—just how those accounts can be kept. I agree with him in principle because it is very desirable that we should know two sets of things: first, the distinction between the ordinary coal undertaking and the ancillary businesses, and secondly the comparison of district with district. Whether we put this in the Act or not, Parliament will insist on having those things in regular accounts. I am a little doubtful, however, if it would be wise to put in precise language exactly how that is to be carried out, because once it is in an Act of Parliament you cannot depart from it. I would like the noble and learned Lord, the Lord Chancellor, to assure us that the best commercial practice will be followed, and that we shall have accounts which distinguish between the different elements of the businesses which this great corporation is going to undertake.
If the Government could give a general undertaking on those lines and, in reasonable time in advance of the Report stage, put down an Amendment which they thought met the general feeling of the House, providing for the most practical and convenient method of achieving that object, we could have a look at it and perhaps accept it, as very likely we would, or make certain suggestions. I make that appeal.
4.5 p.m.
LORD WINSTER: I feel that there is really very little between us on either side with regard to this point. Indeed, I find myself in complete agreement with the remarks from the other side of the House. If I may refer M particular to the speech of the mover of the Amendment, Lord De L'Isle and Dudley, I would express my complete sympathy with the object which I feel he has in view in moving his Amendment, namely, that the accounts should be as informative as possible. The Government entirely subscribe to the doctrine which the noble Lord quoted as having been enunciated by the Webbs and the remarks they made on accounts. Perhaps I may remind the noble Lord that it is said that people who live in glass houses should undress in the dark. But they should not undress in the dark where the accounts of this undertaking are concerned. It is

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the intention of the Government that the accounts should be as informative as possible. I have a similar problem to consider with regard to the accounts of the three Corporations which are to be set up under the civil aviation policy of the Government. I have laid it down that those accounts should give all the information possible to Parliament and to the people. They should be completely informative.
With regard to the accounts of the Board, the very lowest standard we should set ourselves should be that they should conform to the normal commercial practice. I said in my remarks on the Amendment moved by the noble Lord, Lord Llewellin, that we shall set the very highest standards possible in the keeping and presentation of the accounts. As to the three points specifically raised by the noble Viscount, first, that the Minister should have directions from Parliament as to the form in which accounts have to be kept, I pointed out in my previous remarks that in whatever form the Minister may direct their keeping, those accounts will be submitted to the scrutiny of auditors. I noticed very particularly what the noble Viscount said on that point about the function of auditors, but really I cannot conceive that auditors of the standing and prestige of those who will be employed in a matter of this sort, would fail to make very pointed remarks indeed to the Minister if they felt that the accounts were not being kept in the form in which he had directed, or if they did not regard that form as entirely satisfactory. If the Minister was not susceptible to argument on that point, I cannot conceive of a firm of auditors continuing to deal with those accounts. I cannot conceive that any Minister would face a situation in which a firm of auditors had declined to act any longer for the Board on the ground that the Minister had directed an unsatisfactory form in which the accounts should be kept. And, in any case, behind that is the scrutiny of Parliament. The accounts are submitted to Parliament, and if Parliament is not satisfied with their form, they will certainly give to the Minister those directions of which the noble Viscount has spoken, and give them in no uncertain terms.
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The noble Viscount asked for a second assurance, that the accounts shall conform to commercial practice. I do not know if there is anything that I can add to the remarks which I have made on that point in order to assure and satisfy the noble Viscount that that is indeed the intention of the Government with regard to all industries which they are passing into public ownership—that the accounts which are kept in those industries shall conform to the very highest standards of normal commercial practice. The noble Viscount asked for an assurance that the accounts should distinguish between coal winning and ancillary undertakings, and that they should distinguish between district and district. Certainly the accounts will be kept in that form. Certainly those things will be provided for in the manner in which the accounts are kept. But I do not think it wise—and I think your Lordships will agree that it is really not wise—to attempt to lay down all those things in an Act of Parliament. Certainly there is no question whatever about it, that the accounts will be kept in such a form as will provide for those distinguishments of which the noble Viscount has spoken.
As I have said, I feel there is really very little between us on both sides of the House in this matter. What noble Lords have sought by the Amendments they have proposed is that these accounts shall be kept in a thoroughly satisfactory manner, that they shall be as informative as possible, and be kept in such a way as, in the words of the noble Viscount, Lord Bridgeman, will enable Parliament to be given a completely accurate and detailed picture of the progress of those industries when they are passed into public ownership. That certainly is our intention. I know that my right honourable friend the Minister of Fuel and Power will certainly follow with great attention and great interest the remarks which have been made in the course of the discussion on this Amendment, because no one is more anxious than my right honourable friend that these accounts should be kept in such a way as to conform to the opinion expressed by noble Lords to-day.
In those circumstances I hope that the suggestion of the noble Marquess may be adopted. I will certainly bring this matter to the attention of my right honourable

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friend, and if he feels that there is any form of words which he can introduce into the Bill to meet the general tenor and spirit of the debate this afternoon, I feel sure that will be done.
VISCOUNT SWINTON: Until the noble Lord's closing words, I really thought we were not going very far. What I asked for was not an assurance of what the Minister intended to do. I am afraid I must have been extraordinarily obscure when I was speaking before, because I did not at all convey to my noble friend what was my desire, and what I think is the general desire of the House. The general desire of the House is that there shall be included in this Bill in certain, simple, general language—I think I speak with the consensus of opinion on all sides here—what I may call a general directive to the Minister that in laying down the form of accounts he shall provide for certain things, namely, that those accounts shall be in accordance with the best commercial practice and distinguish between the various kinds of business. The assurance I asked for was that that would be given effect to in an Amendment drafted by a Government draftsman. I understand that the noble Lord will consider this. Well, the advice I would give to my friend would be this.
Let us be at one in what we wish to see put in this Bill. I hope the Government themselves will table an Amendment which gives effect to generally expressed desires, but we will try our hands at it too. The sort of Amendment we would try to produce is one which gives a general direction to the Minister to see that the accounts conform to the best commercial practice and show the results of the different classes of activity in separate forms. I do hope the Government themselves will do this, because that would be more satisfactory, as they have to administer this Bill. We will try too. After all, this is a partnership business—at least I hope it is—upon which we are engaged. All we are asking is that this may be put in simple and general language into an Act of Parliament.
LORD DE L'ISLE AND DUDLEY: I do not wish to prolong this discussion except to say that I am in general agreement with my noble friend, although I think he has been a little less than kind to my drafting. I thought I had put it
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in fairly general terms and expressed the minimum which a Minister wishing to give information to the public would put into his accounts. I am not wedded to the form of words, but I am wedded to the principles contained therein. Like my noble friend, I am not really going to be satisfied with assurances from the Minister of Civil Aviation if they are not expressed in general terms in the Bill. I think Parliament should express its intention and should mot be satisfied with assurances, because we must put on record what the intention is. I beg leave to withdraw the Amendment.
Amendment, by leave withdrawn.
4.15 p.m.
LORD DE L'ISLE AND DUDLEY LORD DE L'ISLE AND DUDLEY moved, in subsection (2), after the first "by," to insert "independent." The noble Lord said: I put down a short Amendment here to ensure that the accounts shall be audited by independent accountants. I notI7ed from the words that fell from the lips of the noble Lord the Minister of Civil Aviation a short while ago that it was the intention of the Government that the auditors should be independent auditors, and, therefore, I presume, independent accountants. I should like to see that in the Bill. May I say again that I would join issue with him in his statement that the fact that accounts are audited means that they are informative, or that it is a guarantee that they are an accurate statement of the company's affairs. They reflect the books of account, but they may be in a telescoped form. Unless you tell the auditors what is to go into the accounts, they cannot certify them in accordance with those instructions. That is what you do under the Companies Act. I do attach importance to there being in the Bill an instruction that accounts should be audited by independent accountants. I do not think it is a great deal to ask. As I know it was the intention of the Government to do it, I hope they will accept the Amendment.
Amendment moved—
Page 32, line 8, after ("by") insert ("independent").—(Lord De L'Isle and Dudley.)
LORD WINSTER: I regret to have to inform the noble Lord that, in spite of his appeal, I feel unable to accept the Amendment which he has moved. I take it the

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noble Lord is moving the two Amendments. Clause 30 (2) provides that the accounts of the Board shall be audited by auditors appointed by the Minister. The effect of these Amendments would be to provide that the accounts should be audited by independent accountants appointed by the Minister. I feel that the use of the expression "independent accountants" might lead to some confusion with the same expression used in relation to the compensation provisions. Perhaps I might ask the noble Lord to look at Clause 11 (4) as an illustration of what I mean. I imagine that the noble Lord has in mind, in using the term "independant accountants," that they should not be accountants who have acted in connexion with district wage ascertainments. I am not sure, but I think that is what the noble Lord has in mind.
These two Amendments do not strengthen the clause, as I imagine is the wish and intention of the noble Lord, because almost anybody might set up as an accountant. The safeguard that a proper audit by qualified auditors will be carried out lies in the fact that the appointment of the auditors will be by the Minister, and that the audited accounts will thereafter be laid before Parliament. My right honourable friend wishes to reserve to himself the widest possible scope for the selection of the most suitable and qualified persons to act as auditors. That wish, which I am sure your Lordships will endorse as right and proper, would be much more effectively provided for by the words in the Bill than by the alternative words proposed in the Amendments. For those reasons, because I feel that the Amendments proposed by the noble Lord would weaken and not strengthen what is the intention of my right honourable friend, I regret that I feel unable to accept them.
LORD WOLVERTON: The word in the Bill is "auditors" and not "independent auditors." It is very important that they should be quite independent and not working for the Board.
LORD WINSTER: I am not seeking to put a debating point to my noble friend, if I may assure him so, but in speaking of independent auditors, independent of whom?
LORD WOLVERTON: The Minister. I do not want them to be connected in any way with the Ministry.
LORD WINSTER: I am not clear how the auditors can be independent of the Minister since they are appointed by the Minister.
LORD WOLVERTON: They should be in private practice outside.
LORD WINSTER: Any auditors appointed by the Minister for this purpose will certainly be auditors who are in what the noble Lord describes as "private practice outside." He will make his selection from such firms and appoint one.
LORD REA: Surely the term "independent auditors" is a term well understood throughout the commercial world. We want to be quite sure that the Government does not appoint somebody to act as auditor who is not qualified. Because an auditor need not have any qualifications. As anybody who runs a charitable organization knows, accounts are audited by anybody. We want to be quite sure the auditor is somebody who is not a member of the Department taking his orders from the Ministry.
LORD WINSTER: As I said in the debate on the previous Amendment, it is perfectly obvious that the Minister, in his choice of auditors, will choose from amongst the auditors who are at the very top of their profession.
LORD REA: Why not state it?
LORD WINSTER: Why state what is an obvious fact? If you are going to state every obvious fact you will have a Bill of two thousand clauses.
THE LORD CHANCELLOR: I have had a good deal to do with auditors, and I fully realize that you may have an audit carried out in accordance with the best commercial practice which shows you nothing at all about the affairs of the company. I remember such a case, and I remember afterwards that the accountants in question came to me and asked me whether I could draft an Act of Parliament telling them what their duties were. I remember telling them quite plainly that I could no more do it than I could draft in an Act of Parliament a definition of conduct unbecoming the character of an officer and a gentleman. It simply cannot be done. With regard

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to this word "independent", if I had to construe the words "independent auditors" I should not have the least idea what they meant. I have never heard the phrase "independent auditors" and I do not know what it means. It is inconceivable that the Minister would be such a fool as to appoint some official within the Ministry to audit the accounts. If it had been some twenty years ago, when I used to deal with these matters, I have no doubt it would probably have been a joint audit by Messrs. Price Waterhouse and Co. and Messrs. Deloitte, Plender, Griffiths and Co. It obviously will be something of that sort.
LORD DE L'ISLE AND DUDLEY: I am sorry to pursue this point. I must say I was not very much impressed by the argument of the Minister of Civil Aviation that our job was to avoid having a Bill of 2,000 clauses, or whatever it may be. Surely if it is right to put it in, the length of the Bill does not matter. My intention was apparently the same as that of the Minister of Fuel and Power, but I still think it is better that the intention should be expressed in the Bill and not by assurances across the floor of the House. I am sorry that the noble and learned Lord should not be able to construe the words "independent auditors", especially when, as the noble Lord; Lord Winster, has pointed out that the words "independent accountants" appear in the Bill already in Clause 11, which says "… by two accountants being members respectively of firms of independent accountants. …" I am not wedded to my own words and if the Government will adopt the wording of Clause,11 I do not mind a bit. An independent accountant is one who is in private practice and not an employee of the Minister or of the Coal Board. That is what I want to get into the Bill.
On Question, Amendment negatived.
LORD DE L'ISLE AND DUDLEY: beg to move the next Amendment standing in my name.
Amendment moved—
Page 32, line 8, leave out (" auditors ") and insert (" accountants ").—(Lord De L'Isle and Dudley.)
On Question, Amendment negatived.
Clause 30 agreed to.
Clauses 31 to 35 agreed to.
Clause 36:
Provisions as to superannuation, etc., rights.
36.—(i) Regulations shall be made for all or any of the following purposes relating to pensions, gratuities and other like benefits, that is to say,—
(c) for the establishment and administration of schemes or other arrangements and of funds for the purposes of the preceding paragraphs, for the amendment or revocation of existing schemes or other arrangements relating to the like purposes (whether subsisting by virtue of trust, contract or otherwise) and of trust deeds or other instruments under which they are regulated, and far the transfer in whole or in part, or winding up, of funds held for the purposes of any such existing schemes or arrangements, so however that nothing in this paragraph shall be construed as authorising diversion of any such funds to purposes other than those of the preceding paragraphs.
4.28 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (1) (c), to insert before "amendment," "continuance". The noble and learned Lord said: This is an Amendment which will have the approval, I think, of all your Lordships. This, and the other Amendments on this point, are drafting Amendments, but we want to be quite certain that when we transfer the whole obligation to pay pensions to the Board we safeguard the rights of pensioners, whether they are under a contractual right or whether they are merely paid as of grace. If it is convenient, perhaps I may deal at the same time with the various Amendments to lines 9, 12, and 13 together.
The object of the Amendment to line 9 is to answer a question which has been put as to whether provision can be made for preventing interruption of such a piece of machinery as weekly contributions by employees. We are inserting the word "continuance" to show that that can go on. Then we propose to insert the word "rules" in line 12, in order to show that the requisite adaptations can be made in the rules of Friendly Societies, through the medium of which pension schemes are sometimes operated. The Amendment to line 13 is intended to describe "instruments" sufficiently widely, because there may be instruments such as policies which are sometimes taken out by coal companies to provide money for the payment of pensions. We must be careful to see that the wording we have got is adequate

1047
to see that all these pension arrangements, whether as a matter of contract or as a matter of grace, can be honoured by the Board. I know your Lordships will be in agreement with me over this.
Amendment moved—
Page 35, line 9, after the second ("the") insert ("continuance").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I beg to move the second Amendment to which I have referred.
Amendment moved—
Page 35, line 12, after ("deeds") insert ("rules").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I beg to move the third Amendment to which I have referred.
Amendment moved—
Page 35, line 13, leave out ("under which they are regulated") and insert ("made for the purposes thereof").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after subsection (2), to insert
"(3) Regulations made for the purposes of this section may be made so as to have effect from a date earlier than that on which they are made."
The noble and learned Lord said: I beg to move this Amendment.
Amendment moved—
Page 35, line 47, at end insert the said new subsection.—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, at the end of sub-section (2), to insert—
"(4)Liabilities (whether of obligation or under customary practice) in relation to pensions, gratuities and other like benefits, of a kind subsisting under such existing schemes or arrangements as aforesaid in connexion with the carrying on of any coal industry activities or transferred allied activities, shall be taken into account in the valuation of compensation units comprising transferred interests owned, or in things used, for such activities, and the amount referred to in subsection (4) of Section thirteen of this Act which a compensation unit might have been expected to realise on the assumed sale therein referred to shall be estimated on the basis that the purchaser would be in the like position as the owner of the transferred interests comprised in the unit as respects such liabilities and as respects resort to any transferred funds held for the purposes of such existing schemes or arrangements."
The noble and learned Lord said: I beg to move this Amendment.
Amendment moved—
Page 35, line 47, at end insert the said new sub-section.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 36, as amended, agreed to.
Clauses 37 to 39 agreed to.
4.30 p.m.
LORD AMMON LORD AMMON moved, after Clause 39, to insert the following new clause.
"Power to vary trusts of property provided out of the Miners' Welfare Fund.
—(1) Where trusts have been declared on which property representing an application of money standing to the credit of the Miners' Welfare Fund is to be held, and it appears to the Minister that purposes specified in subsection (1) of section twenty of the Mining Industry Act, 1920, would be better secured by a variation of the trusts, either as respects that property or as respects other property held on the same trusts or both, he may, subject to the provisions of this section, make provision for that variation by an order made by him.
(2) The Minister shall not make an order under this section as respects any property until he is satisfied that the substance of the proposed variation has been put before a meeting open to all persons for whose benefit in particular that property is held under the subsisting trusts and has been approved by a majority of such of those persons as were present at the meeting.
(3) Trusts as varied by an order under this section may be varied by a subsequent order made thereunder.
(4)Subsection (4) of section twenty-nine of the Settled Land Act, 1925 (which relates to the sending to the Charity Commissioners, for record, of assurances of land to charitable uses) shall apply to an order under this section that relates to land, or to personal estate to be laid out of the purchase of land, as it applies to the instruments mentioned in that subsection."
The noble Lord said: There are in the mining areas a number of trusts which have been declared on which property representing an application of money standing to the credit of the Miners' Welfare Fund is to be held. Some of these funds, although there was no legal obligation to do so, have been entered as trusts of a charitable nature. To get that altered one would have to go to the Charity Commissioners or to the Courts. In the course of time, owing perhaps to failure of the mines, or the removal of miners, a good many of them have not been sufficiently used or have not had sufficient members to enable them to pay their way. It happens that in many of

1049
these trusts the terms of the trust deeds are so limited that only mineworkers can make use of such facilities as pithead baths, recreation grounds and so forth. Therefore it is possible, if I may use the illustration, that a miner can use the pithead bath and go home washed, but the worker at the coke ovens has no power whatever to do that owing to the application of the trust.
What is sought in this Amendment, in order that there may be greater flexibility in the use of the trusts, is that the Miners' Welfare Commission shall have the power to extend the use of these facilities to a larger clientele than the mineworkers specifically. In some cases the mineworkers' section of the community is by itself insufficient to keep alive a wide range of activities without support from others. This will particularly affect schemes designed to develop cultural and non-vocational educational activities for mineworkers.
This Amendment will make it possible for other persons who work in connexion with the mines, who will be brought into the ambit of this Bill when it becomes an Act, to participate in these various activities. That I hope is sufficient explanation for the purpose of showing that no subtle or ulterior motive exists to misuse these funds. The object is simply that they may be made readily accessible and brought into immediate use by the persons concerned.
Amendment moved—
After Clause 39, insert the said new clause.—(Lord Ammon.)
On Question, Amendment agreed to.
Clauses 40, 41 and 42 agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 42, to insert the following new clause:
Provisions as to Doncaster Drainage District and certain dock etc., undertakings.
". —(1) His Majesty may by Order in Council make such provision as appears to him to be requisite or expedient in consequence of the passing of this Act for—

(a) modifying or discharging rights conferred and obligations imposed by the Doncaster Area Drainage Act, 1929, or the Doncaster Area Drainage Act, 1933, on mine-owners working or proposing to work minerals under any lands situated within the Doncaster Drainage District or on the Catchment Board of the River Ouse (Yorks) Catchment Area or the Catchment Board of the River Trent Catchment Area, or for substituting other rights and obligations in lieu
1050
of all or any of the rights and obligations so conferred and imposed;

(b) varying the constitutions of the said Catchment Boards.

(2) His Majesty may by Order in Council make such provision as appears to him to be requisite or expedient in consequence of the passing of this Act with respect to the Blyth Harbour Commissioners, the Upper Mersey Navigation Commissioners, the Commissioners of the Port or Harbour of Newport and the Tyne Improvement Commission, and any other body carrying on a dock, harbour, canal or inland navigation undertaking under authorisation conferred by an Act or by an order or scheme made under, or confirmed by, an Act, being an Act, or an order or scheme, as the case may be, which provides for the representation on the body of the interests of persons of a class of which the Board are members.
(3) An Order in Council under either of the preceding subsections may make provision for any incidental or supplementary matters for which it appears to His Majesty in Council to be requisite or expedient for the purposes of the Order to provide and for any requisite amendment or repeal (in the case of an Order under subsection (1)) of any provision of the Doncaster Area Drainage Act, 1929, or the Doncaster Area Drainage Act, 1933, and (in the case of an Order under subsection (2)) of any provision of any Act, order or scheme regulating the constitution of any such body as is mentioned in that subsection.
(4) The draft of any Order in Council proposed to be made under subsection (1) or (2) of this section shall not be submitted to His Majesty until it has lain before each House of Parliament for a period of forty days, and if within that period either House of Parliament resolves that the draft be not submitted to His Majesty, no further proceedings shall be taken thereon, but without prejudice to the laying before Parliament of a new draft.
In reckoning any such period of forty days as aforesaid, no account shall be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.
(5) An Order in Council under subsection (1) or (2) of this section may be varied or revoked by a subsequent Order in Council thereunder."
The noble and learned Lord said: The object of this new clause is to clear away certain difficulties which arise under various local Acts of Parliament. May I give an illustration of the sort of thing I have in mind? There are certain areas which are liable to flooding, and therefore Catchment Boards and like authorities are concerned. They are constituted under local Acts by the appointment of certain members of this colliery and of that colliery, or by the other colliery, and so on. Now that all the collieries are going to come under one management, there must obviously be some alternative arrangements, and the object of this

1051
clause is to enable such Orders in Council to be made as are requisite or expedient in consequence of the passing of this Act. I beg to move.
Amendment moved—
After Clause 42, insert the said new clause.—(The Lord Chancellor.)
LORD LLEWELLIN: We appreciate that this new clause is necessary, and have no objection to it.
On Question, Amendment agreed to.
Clause 43 agreed to.
4.35 p.m.
VISCOUNT FALMOUTH VISCOUNT FALMOUTH moved, after Clause 43, to insert the following new clause:
" Determination of questions as to quality of coal.
(1) If any consumer of coal by notice in writing to the Board alleges that coal sold to him by the Board is of a quality inferior in any respect to that of coal of the class or description to which the price per ton or other unit demanded for the coal so sold applies in accordance with any scale of prices for the time being in force, any question between the Board and the consumer arising out of that allegation shall be determined by arbitration under this Act and the Arbitrator may by his award direct that such adjustment (if any) of the price so demanded as he may think proper shall be made.
(2) In this section the expression 'quality' includes size."
The noble Viscount said: The object of this new clause is to enable the consumer to get good coal. As your Lordships know, before the war coal contracts were drawn up in which the calorific value was stated and the various other attributes of the coal were also laid down. There was a further clause under which, if that coal did not come up to standard, compensation could be paid. During the war, things have been very unsatisfactory as regards the type of coal which has been supplied to the consumer. Frequently coal has contained double the amount of ash, and that has put consumers to very great expense and has also reduced the efficiency of the plants which they were working. Consumers have gone to great expense to establish various steam equipments to burn certain classes of coal. If that coal is not available then of course that equipment ceases to be of any use, and as a result there is a considerable falling off in efficiency. I think your Lordships will agree that it is more than ever essential
1052
that we should maintain the efficiency of the electricity undertakings and also the production of gas.
This new clause seeks to enable anybody who is not satisfied with the type of coal he is receiving to approach an arbitrator established under the Act in order that adjustment in price may be arrived at so that the proper value of the coal supplied to the consumer may be assessed. From reading the Bill it would appear that the only redress the consumer has is to grumble to the Consumers' Council or to write to his Member of Parliament. I think that power to apply to an arbitrator will be valuable to the consumer and make the Coal Board very keen to ensure that the coal supplied is up to the standard which is so necessary if industries are to maintain their efficiency. I beg to move.
Amendment moved—
After Clause 43, insert the said new clause.—(Viscount Falmouth.)
THE LORD CHANCELLOR: I am afraid I could not possibly accept this Amendment, because I do not think it would be in the interests of the consumer. The noble Lord is apparently contemplating a case where there is a contract. If there is a contract for the sale of any particular type of coal and a man complains that he has not got the coal which under the contract he is entitled to get, he has the right to go to the Courts and bring an action for breach of contract. If his contract contains, as contracts very often contain, an arbitration clause, then he is entitled to go to arbitration under the contract. The arbitration that he wants in a case of this sort, if his contract is not honoured, is an arbitration under the contract, and if there is no arbitration under the contract, then it is his right to go to the Courts.
If the noble Lord tells me that he has not been able to get by contract the class of coal he would like to have, I directly agree with him. We all know it to be a fact. It is owing to the fact that there is this shortage of coal that we have all had to put up with a lower quality of coal than we would have liked. One of the main functions of the Board will be to try to get a plentiful supply of coal properly graded so that people can buy the sort of coal they want. I would like to say—and I think every

1053
noble Lord will agree with me—that at the present moment the whole price structure in this industry is in an absolutely chaotic state. You buy all sorts of different coal under different names, which practically convey nothing to you at all. You have no idea what you are buying or what quality it is. If some sort of nomenclature could be introduced classifying coal into a comparatively small number of varieties, so that we all knew what we were supposed to be buying, it would be a wonderful thing. That is one of the things the Board are undertaking.
It is impossible to do what is sought to be done by this clause. First of all, as I have said already, to have arbitration under the Act to decide whether a contract is or is not fulfilled is quite impracticable, and to have arbitration under the Act in spite of the fact that the contract has been fulfilled because a man wishes he had been able to make a better contract, is equally impossible. Under the circumstances I am sure the noble Viscount will see that whilst I have every sympathy with his desire to improve the nomenclature under which coal is sold, it would be quite impracticable for us to accept this Amendment.
VISCOUNT FALMOUTH: In view of the explanation of the noble and learned Lord I beg leave to withdraw.
Amendment, by leave, withdrawn.
Clause 44 agreed to.
Clause 45:
Transfer of liability for subsidence from colliery concerns to the Board.
45. Liabilities to which, apart from this section, colliery concerns would be subject either—

(a) for breaches of rights of support, being breaches arising from acts or omissions done or occurring in the course of colliery activities, or

(b) to pay compensation for, or to make good, by virtue of terms or conditions on or subject to which rights to withdraw support are exercisable, damage arising from acts or omissions so done or occurring,

shall, in any case where the cause of action in respect of the breach of the right of support accrues, or the damage to be compensated or made good arises, as the case may be, on or after the primary vesting date, be enforceable against the Board as if the acts or omissions in question had been those of the Board and not of those concerns.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after paragraph (b), to insert
"or
(c) to contribute, under Section seventy-nine A of the provisions substituted by Part II of the Mines (Working Facilities and Support) Act, 1923, for Sections seventy-eight to eighty-five of the Railways Clauses Consolidation Act, 1845, towards expenses properly incurred by a railway company in making good damage so arising."
The noble and learned Lord said: This Amendment at page 40, line 43, and the Amendment arising on the same clause at page 41, line 1, I think may conveniently be taken together. Under Section 79A of the provisions substituted by Part II of the Mines (Working Facilities and Support) Act, 1923, a mine-owner is under a liability to contribute towards the cost of repairing damage caused by mine workings. The transfer of liability to contribute under this section to the National Coal Board was raised in another place, and the Government agreed to look at the point. The first Amendment makes provision for the transfer: that is to say, the liability will be transferred to the Coal Board. The Amendment to page 41 makes the date of transfer dependent on the date when the repairs to the damage have been commenced. If the repairs have been commenced before the primary vesting date, the colliery owner will be liable; if after, the Coil Board. We have taken the dates when the repairs have been commenced as being the deciding factor, because railways are of necessity compelled to carry out repairs immediately the subsidence appears, and, therefore, the date of the cause of action (which is the date of subsidence) and the date of the repairs are almost identical; and this date seems to be an easily ascertainable and convenient one. I beg to move.
Amendment moved—
Page 40, line 43, at end insert the said new paragraph.—(The Lord Chancellor.)
LORD LLEWELLIN: I understand that this settles some doubt as to the position of the railway companies, and I understand that it meets views expressed during the Committee stage in another place. I am grateful to the Lord Chancellor for introducing it.
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out "arise" and insert "by virtue of the said terms or conditions arise, or

1055
the execution by the railway company of works for making good the damage is begun." The noble and learned Lord said: I have already explained this. I beg to move.
Amendment moved—
Page 41, line 1, leave out (" arises ") and insert the said new words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, at the end of the Clause, to insert
("(2) The Board shall indemnify colliery concerns against expense reasonably incurred by them in disposing of claims in respect of such liabilities as are mentioned in the preceding subsection but are not thereby rendered enforceable against the Board, being expense falling due for discharge on or after the primary vesting date:
Provided that provision may be made by regulations for rendering the right to indemnity under this subsection subject to conditions as to the giving of notices of claims and the furnishing of information with respect thereto, the making of settlements, payments or admissions, the conduct and control of the defence in proceedings, subrogation, and such other matters as may be prescribed, and such conditions may extend to things done or omitted before the date on which the regulations are made.")
The noble and learned Lord said: This is an Amendment to meet a point that was raised in another place which I think is a fair one. The liability for subsidence damage, which is to some extent always going on, is a continuing liability, and consequently when Lord Greene's Committee which is now determining the equitable figure come to assess that figure, they will have to make a deduction in respect of that liability. As I said, it is always going on, to some extent. Indeed all collieries have their special funds or other arrangements for that purpose. You have to consider whether it would be fair, in those circumstances, to make a colliery owner pay for subsidences which occur after the vesting date, the liability for which had been incurred before. It seemed to us that if we make him pay that, we should be making him suffer twice over, once by the deduction to be made by Lord Greene's Committee and secondly by making him pay in respect of this liability, a liability incurred before the vesting date. Therefore the object of this Amendment is to indemnify colliery concerns in the respects indicated.
Amendment moved—
Page 41, line 4, at end, insert the said new subsection.—(The Lord Chancellor.)
LORD LLEWELLIN: This seems to us to be a very fair Amendment and I have again to express gratitude to the Lord Chancellor.
On Question, Amendment agreed to.
Clause 45, as amended, agreed to.
Clause 46:
Provisions as to liability of the Board in actions, etc.
(4) For the avoidance of doubt it is hereby declared that the authorisations conferred on the Board by section one of this Act, whilst discharging them in the exercise and performance of the junctions therein mentioned from limitations to which they might otherwise have been subject arising from the law relating to the capacity of statutory corporations, are not to be construed as authorising disregard of any enactment or any act or omission unlawful on any other ground.
4.48 p.m.
LORD LLEWELLIN LORD LLEWELLIN moved, at the end of subsection (4), to insert "or as constituting the Board an agent of the Minister." The noble Lord said: The final subsection of this clause, to which I am seeking; to add some words, starts off by stating that it is "For the avoidance of doubt." There is one doubt in my mind, and I was glad to hear the noble and learned Lord, the Lord Chancellor, in reply to the suggested new clause which the noble Viscount, Lord Falmouth, proposed, say that there would be a right quite clearly to sue for any breaches of contract by the Board. What I want to ensure—and if my words are not the right ones, I think the noble and learned Lord, the Lord Chancellor, may consider (unless they are provided somewhere else) that there should be some such words included—is that it will be plain that the Board will not be able to shelter behind the prerogative of the Crown. That is the whole effect I want to secure.
It is only right that when they have entered into a contract, or indeed if they have committed a tort, they should be liable as any other body or person is liable. Therefore I seek to put in, for the avoidance of doubt, that the Board will not be constituted an agent of the Minister for the purpose of any legal proceedings. I think that unless we have some such words in the Bill when it finally becomes law, there may be some

1057
doubt as to how far Ministerial direction may have affected matters with regard to the Board. Outside parties contracting with the Board may not be aware of those directions and it puts them into an extremely difficult position. In some way or other we should make it clear in the Bill that this Board cannot put, as a barrier to any proceedings, the claim that they are acting under Royal Prerogative, that they are really the Crown, and so leave anybody desiring to proceed against them with no remedy at all except the cumbrous remedy of proceeding by Petition of Right, which is not easily accessible to His Majesty's subjects and is indeed a very cumbrous method of proceeding. So I hope I shall be able to get from the Lord Chancellor some assurance, either that these words will be put in—unless already we can find them somewhere in this Bill—or that other words will be inserted to show quite clearly that the position is as I think we all want it to be. I beg to move.
Amendment moved—
Page 41, line 26, at end insert the said words.—(Lord Llewellin.)
THE LORD CHANCELLOR: I am grateful to the noble Lord for moving this Amendment. I wish to make it plain that there should be no doubt whatever that this Board is not the Crown. It can be sued in contract or in tort. There is no need for anybody wishing to sue the Board to have reference to the cumbrous procedure of Petition of Right. I would not mind putting in words to that effect were it not for this reason which I am sure the noble Lord will appreciate. If it is inserted in one case, its absence in another might be used in argument. Someone might say: "Ah, they have put it in here, but it is not in that other Act." And it might therefore be argued that some other Board could shelter behind the Royal Prerogative.
May I rather irregularly say this, that I hope I shall live long enough to see proceedings against the Crown put on the same footing as proceedings by subject against subject. It would be of enormous advantage if we had such a system. Therefore, I hope this doctrine will not matter very much longer. But this is the position. You cannot bring an action against the Crown in tort at all, and if the noble Lord will look at this clause he will see that in subsection (2) it is plainly implied that against this body
1058
you can bring an action both in contract and in tort.
The subsection sets out that
"In their application to any such action as aforesaid Sections two and three of the Limitation Act, 1939 (which relate to the limitation of actions of contract and tort, and certain other actions) shall have effect with the substitution for references therein to six years of references to three years."
There it is plainly indicated that you can bring an action both of tort and of contract against the Board, and of course it is quite inconsistent with the Board having the shelter of the Prerogative of the Crown if you can bring an action of tort against them. I have looked at this with my advisers who me, and I agree with them, that there is no doubt at all that this Board cannot shelter behind the Prerogative of the Crown. Certainly this Bill does not intend that they should.
LORD LLEWELLIN: I am very much obliged to the noble and learned Lord, the Lord Chancellor. I thought it a matter which should be raised and settled beyond possible doubt. In view of the explanation we have just heard, I beg leave to withdraw.
Amendment, by leave, withdrawn.
Clause 46 agreed to.
Clause 47 agreed to.
4.51 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 47, to insert the following new clause:
Documents of the Board to be public records.
"—(1) Documents belonging to the Board shall be deemed, for the purposes of the Public Record Office Acts, 1838 to 1898, to be public records under the charge and superintendence of the Master of the Rolls.
(2) The power conferred on the Master of the Rolls by section one of the Public Record Office Act, 1877, to make rules respecting the disposal of documents which are deposited in or can be removed to the Public Record Office, shall, in relation to documents belonging to the Board, be exercisable subject to the approval of the chairman of the Board in addition to that of the Treasury."
The noble and learned Lord said: I beg formally to move this new clause but I think in this case I may fairly leave "the labouring o'er" to my noble and learned friend the Master of the Rolls, who is, of course, in charge of Public Records. It is really at his suggestion that this clause has been moved and the Government entirely agree with the principle which the clause sets out. We think it is important that

1059
the records, or such of them as matter, should be in the public keeping. I for-madly beg to move.
Amendment moved—
After Clause 47, insert the said new clause.—(The Lord Chancellor.)
LORD GREENE: As my noble and learned friend the Lord Chancellor has invited me to address your Lordships on this Amendment I may perhaps be pardoned if I say a word or two about it. Public Record Office Acts, of course, are old Acts and their language is not sufficiently comprehensive to cover modern developments. In recent years there have been set up a number of bodies which are not Government Departments, nor in many cases are they under the control of Government Departments. But their functions are, nevertheless, of a public nature, and their records ought to be treated as Public Records, dealing as they do with their administrative duties on behalf of the nation. Doubts which have arisen have been very difficult to resolve in the case of individual bodies, and there has not always been agreement as to whether their documents should come under the jurisdiction of the Master of the Rolls and should take their place in the Public Record Office. It was thought very desirable that wherever possible those doubts should be set at rest.
In the case of such a board as the Coal Board the view was expressed, and I understand it has been accepted, that the Board's functions are of such a high public administrative nature that their records should be regarded as Public Records, notwithstanding the fact that there might be some doubt whether they would be covered by the actual language of the existing Public Records Acts. Accordingly, subsection (1) of the proposed new clause has the effect of giving to the records of the Board the status of Public Records, similar to the records of other organs of the Government. So far as subsection (2) is concerned it merely refers to the statutory powers to destroy records which are not considered worthy of preservation in the Public Records Office. In every Government Department, of course, there are masses of documents which come into existence and which are not worthy of permanent preservation. Accordingly, the practice laid down by the Act of 1877 is to empower the destruction of such documents, subject to the consent of Parliament.
1060
Schedules have to be prepared. They have to be signed by the inspecting officers of the Record Office, in consultation with the officials of the Department, and signed by the head of the Department and the Master of the Rolls.
The object of this Amendment is merely to make that procedure apply to the records of the Coal Board, so that unwanted materials can be duly destroyed in the same way as the worthless records of Government Departments. The reason it is necessary is that the language of the 1877 Act, which authorizes the destruction of unwanted documents, refers to "the head of the Department." In the case of the Coal Board, of course, there is no head of the Department, with in the meaning of that provision of the Act of 1877, and it is necessary to bring it into line by this special clause. In effect, the Chairman of the Board, for the purpose of preparing such schedules of destruction, will be in exactly the same position as the head of a Government Department; but for that purpose only.
On Question, Amendment agreed to.
Clauses 48 and 49 agreed to.
Clause 50
[Annual Report of the Board]:
4.57 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved, at the end, to insert:
"(2) If under subsection (1) of Section three of this Act the Minister has given to the Board directions which are contrary to the opinion or advice of the Board, the Minister shall lay before each House of Parliament a statement setting out the directions he has given and the reasons for the giving of such directions. Provided that if the Minister is satisfied that it would be contrary to the national interest to disclose the directions which he has given to the Board, the Minister shall be under no obligation to lay any statement with regard to such directions."
The noble Viscount said: I have tried to follow the advice of the noble and learned Lord, the Lord Chancellor, and produce an Amendment to this clause in order to deal with cases where the Minister overrides the Board. I put it down originally as an Amendment to Clause 3, because it is only intended to relate to those cases where the Minister, giving general direction on matters of a broad, general and important character, after consultation with the Board, decides to overrule the Board. I think there was general agreement that these cases ought to be made public. There is one excep

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tion, with which I fully agree. Apart from that the noble and learned Lord, the Lord Chancellor, said the more publicity the better on ordinary matters, although there might be cases of international consequence where directions are quite rightly given by the Government but where it is undesirable to publish them at the time. I will add, not only at the time, but at any time. The noble and learned Lord, the Lord Chancellor, invited me to try my hand at producing an Amendment which he thought would conveniently come on Clause 50 which is the clause dealing with the actual report of the Board.
As your Lordships will see what is proposed is this: if the Minister has given the Board directions which are contrary to the opinion or advice of the Board the Minister shall lay before each House of Parliament a statement giving the directions he has issued and his reasons for issuing them, provided that if the Minister is satisfied it would be contrary to the national interest to disclose the directions he shall be under no obligation to do so. In such a case that leaves the responsibility of deciding with the Minister, but I think it meets the contention of the noble and learned Lord, the Lord Chancellor. I do not think we need be unduly bound by precedent, but there are, of course, precedents for this. There is a very apposite precedent in the Unemployment Act, 1934. There Parliament set up Public Assistance Boards, and the Minister was given power to make regulations. But the Minister has to agree these regulations with the Board. In the first instance, I think, the Board are invited to submit draft regulations, and the Minister discusses them with the Board. The regulations are ultimately presented to Parliament, but the Act lays down that if the Minister dissents from the Board, and varies their recommendations in presenting his own regulations, he shall also state to Parliament what were the recommendations of the Board and why he overruled them.
I do not think I need press this case, because the noble and learned Lord, the Lord Chancellor, said on the last occasion that where public interest is not obviously involved in keeping the matter secret, the more publicity the better. I will just say in passing that I have discarded the suggestion which was made—and which I do not think appeals to any
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one in the House—that the Board themselves should in their Report state the occasions on which the Minister had overruled them. As I said at the time, I do not think that that is a fair onus to put upon the Board. The responsibility of overruling them is that of the Minister. He should have the responsibility for that, and he should have the responsibility of reporting to Parliament when he has done so, or why. I think therefore that this proposal I now make meets the general desire of the House, and I beg to move.
Amendment moved—
Page 42, line 28, at end insert the said new subsection.—(Viscount Swinton.)
THE LORD CHANCELLOR: I am afraid I have not had the time to give to this clause the attention it obviously deserves or discuss it with my colleagues. Therefore I am really speaking on the spur of the moment. Subject to further consideration, I am inclined to think it would be better to impose upon the Board the statutory duty to refer to directions. If they have a duty imposed upon them, it would not be invidious to do so. They could not say, "We are not bound to do it" They would be bound to do it. But there must be a provision, as the noble Viscount suggests, that if there is something which is obviously secret, that should not be referred to. It must not be referred to. Then we should get the thing before the House in this way.
The Board make their Report. On the face of that Report you can see there has been this, that or the other direction, and then when the annual vote comes up, you have there got the Minister to deal with and there you are getting the cut and thrust of debate, and he has got to defend what he has done. I think that is better than making the Minister publish a White Paper or something of that kind beforehand. I am inclined to think we have got enough White Papers. I think the old Parliamentary procedure had a good deal to commend it. Therefore if the noble Viscount will not mind my not giving him a definite answer now, because I have not had time to consider it, I would like him to consider whether perhaps something on those lines might achieve the object we all have in mind of having full publicity, always provided there is a safeguard as we all realize may be necessary.
VISCOUNT SWINTON: I am much obliged to the noble and learned Lord. He has been given a good deal to do over this Bill, and he has other duties as Lord Chancellor. I can well understand that he has not had sufficient time to be able to deal with this Amendment. I gave him a copy as soon as I drafted it, and it was only on the Order Paper this morning. I shall withdraw this Amendment at this stage. We certainly will give very careful consideration to his suggestion. I would like him at the same time to consider this point. This giving of contrary directions will not happen always. At least, I hope not. When it does happen, it will happen on a matter of great general importance, and may be a matter of urgency. As I said on another occasion, if a thing is to be announced, it is better that it should be announced by the Minister rather than that it should come out in a roundabout way. The disadvantage of putting it into the Report arises from the fact that the Report is an annual report. If there had been an overruling during the first two months of the year, Parliament except, so to speak, by a side-wind, will know nothing about that until the Annual Report is presented a year after. I would like the Lord Chancellor to consider that point. Not only do we want the information, but we want the information at the appropriate time. Subject to that, we will certainly consider his suggestion, if he will consider our suggestion. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 50 agreed to.
Clauses 51, 52 and 53 agreed to.
Clause 54:
Penalties for false information, etc.
54. If any person—

(a) being required under regulations made under this Act to produce any document, with intent to deceive produces any document which he knows to be false in a material particular; or

(b) being required under regulations so made to furnish any information, makes any statement which he knows to be false in a material particular, or recklessly makes any statement which is false in a material particular;

he shall be guilty of an offence and liable on summary conviction, to imprisonment for a term not exceeding three months, or to a fine not exceeding one hundred pounds, or to both such imprisonment and such fine, or, on conviction on indictment, to imprisonment for
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a term not exceeding two years, or to a fine not exceeding five hundred pounds, or to both such imprisonment and such fine.
5.16 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in paragraph (a), after the second "document," to insert:
"or without being so required but for the purpose of obtaining for himself or any other person any compensation, interim income or capital outlay refund under this Act."
The noble and learned Lord said: I beg to move this Amendment, to make it plain that anybody who tells falsehoods or gives false information in order to secure benefits under this Bill is guilty of a criminal offence. Of course, he is already guilty, I suppose, of the offence of obtaining money by false pretences, but the War Damage Commission found it was very much more convenient to have a special Act for dealing with this matter. Therefore I am proposing to put this in line with what has been done in that regard. I beg to move.
Amendment moved—
Page 43, line 29, after ("document") insert ("or without being so required but for the purpose of obtaining for himself or any other person any compensation, interim income or capital outlay refund under this Act,").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is consequential. I beg to move.
Amendment moved—
Page 43 line 33, after ("information") insert ("or without being so required but for the purpose aforesaid").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 54, as amended, agreed to.
Clause 55:
Provisions as to offences.
55.—(1) Proceedings for an offence against this Act or regulations made thereunder shall not, in England, be instituted except by or with the consent of the Minister or by the Director of Public Prosecutions.
VISCOUNT SWINTON VISCOUNT SWINTON moved, in subsection (1), to leave out "the Minister or by". The noble Viscount said: I have put down this Amendment to ask the Lord Chancellor why it is desirable that a prosecution should have the consent of the Minister. As your Lordships will see, the clause reads:
"Proceedings for an offence against this Act or regulations made thereunder shall not, in England, be instituted except by, or with the consent of, the Minister or by the Director of Public Prosecutions."

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I can understand proceedings being instituted by the Director of Public Prosecutions. I take it you do not want a common informer; you do not want anybody to bring a Prosecution. I should have thought the right person to authorize prosecutions was the Director of Public Prosecutions, and that the Minister should not be brought in to say whether a prosecution should take place or not. I beg to move.
Amendment moved—
Page 43, line 45, leave out ("the Minister or by").—(Viscount Swinton.)
THE LORD CHANCELLOR: In the normal case, of course, prosecutions should be instituted by the Director of Public Prosecutions, but with the number of small prosecutions there may be it would be absolutely impracticable to get every such case before him. We are following precedent. Under the Prevention of Fraud (Investments) Act, you have to get either the consent of the Board of Trade or the Director of Public Prosecutions, and in certain other cases, you have to get the consent either of the head of the Department or the Director of Public Prosecutions. It could not all be placed on the Director of Public Prosecutions, because there would be a breakdown.
VISCOUNT SWINTON: I beg to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 55 agreed to.
Clauses 56, 57 and 58 agreed to.
Clause 59:
Interpretation.
59.—(1) In this Act, unless the context otherwise requires, the following expressions have the meanings hereby assigned to them respectively, that is to say,—
"coal industry activities" means colliery production, electricity, transport, sales and welfare activities, as defined in Part I of the First Schedule to this Act;
"colliery concern" means a company whose business includes the working of coal (excluding working undertaken for the purpose of digging or carrying away coal in the course of activities other than colliery activities, and working undertaken only as ancillary to the working of minerals other than coal), and any other person whose business includes such working of coal as aforesaid;
"transferred allied activities" means such activities as are—

(a) of a kind referred to in Part II or III of the First Schedule to this Act in relation to the vesting in the Board by option of interests as being interests in things used, or as being owned, for certain activities, and

(b) of a kind for which interests that in fact so vest were owned at the date of the vesting or for which things wherein those interests then subsisted were then used,

and that expression includes also activities in connection with farms interests in which in fact so vest, and activities of a kind for which interests that so vest by virtue of paragraph 19 of that Schedule were owned exclusively or mainly at the date of the vesting or for which things wherein those interests then subsisted were then exclusively or mainly used;
LORD WINSTER LORD WINSTER moved, at the end of the interpretation of "coal industry activities," to insert "and the activities incidental thereto mentioned in paragraph 7 of that Schedule." The noble Lord said: The first Amendment to this clause is a drafting Amendment and is rendered necessary by the insertion of paragraph 7 in the First Schedule of the Bill. It was inserted in another place on the Report stage of the Bill. The relevance of the definition of "coal industry activities" in this clause is that pensions, and like things, of staff employed on such activities are the subject of Clause 36 of the Bill, and contracts entered into for the purposes of such activities are the subject of the Second Schedule of the Bill. I beg to move.
Amendment moved—
Page 46, line 19, at end insert ("and the activities incidental thereto mentioned in paragraph 7 of that Schedule").—(Lord Winster.)
On Question, Amendment agreed to.
LORD WINSTER LORD WINSTER moved, in the interpretation of "colliery concern," after the first "includes," to insert "or at any time on or after the first day of January, nineteen hundred and forty-six included." The noble Lord said: It will be convenient if I explain the next two Amendments together. These are drafting Amendments again, and they are rendered necessary for two purposes. First of all, numerous references in the Bill to colliery concerns relate to a time after the Board has taken over, when the working of coal by the concerns must necessarily have ceased. Secondly, it is conceivable that there might be an attempt at evasion by

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cesser of working before the primary vesting date. It is therefore desirable to include in the definition a concern whose business included the working of coal at January 1, 1946. I beg to move.
Amendment moved—
Line 29, after ("includes") insert the said words.—(Lord Winster.)
On Question, Amendment agreed to.
LORD WINSTER: I beg to move the next Amendment.
Amendment moved—
Page 46, line 34, after ("includes") insert ("or at any such time included").—(Lord Winster.)
On Question, Amendment agreed to.
LORD WINSTER: Perhaps I might explain the next two Amendments together. These again are drafting Amendments. Their effect is slightly to alter the wording used in the definition of "transferred allied activities," so as to bring the wording into line with that employed in the First Schedule. Your Lordships will see that the words "available for use" in the first Amendment are comparable with the words used in paragraph 9 (1) of that Schedule (page 51, line 42); and the word "required" with the use of this word in paragraph 9 (2) of Schedule I. The second Amendment (line 39), brings the wording of the definition into line with the wording of paragraph 19 (2) of the first Schedule. I beg to move.
Amendment moved—
Page 47, line 32, after ("used") insert ("available for use or required for certain activities").—(Lord Winster.)
On Question, Amendment agreed to.
LORD WINSTER: I beg to move the next Amendment.
Amendment moved—
Page 47, leave out lines 40 to 44 and insert ("such activities as are mentioned in sub-paragraph (2) of paragraph 19 of that Schedule")—(Lord Winster.)
On Question, Amendment agreed to.
Clause 59, as amended, agreed to.
Clause 60:
Application to Scotland.
60.—(1) The provisions of this section shall have effect for the purpose of the application of this Act to Scotland.
(2) For any reference to the High Court there shall be substituted a reference to the Court of Session; the expression "easement"
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means servitude; the expression "leasehold interest" means the interest of a lessee in property subject to a lease.
(3) The assets vested in the Board by virtue of Section five of this Act shall, so far as consisting of feudal property, include any right of superiority therein other than that of the Crown.
(4) Subsection (7) of Section five of this Act shall have effect as if for paragraph (e) there were substituted the following paragraph:—
"(e) for the completion of the title of the Board to heritable property vesting in them by virtue of this section by the execution and recording in the General Register of Sasines of conveyances of or instruments relating to such property."
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, at the end of subsection (2), to insert:
"and for any reference to section one of the Courts (Emergency Powers) Act, 1943, there shall be substituted a reference to section one of the Courts (Emergency Powers) (Scotland) Act, 1939."
The noble and learned Lord said: The Amendments to this clause are little more than drafting Amendments. I beg to move.
Amendment moved—
Page 48, line 27, at end insert the said words.—(The Lord Chancellor.)
VISCOUNT CRANBORNE: I am advised they are satisfactory.
THE LORD CHANCELLOR: I can assure you they are eminently satisfactory.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I beg to move the next Amendment.
Amendment moved—
Page 48, line 32, leave out from ("if") to ("for") in line 34 and insert ("there were added at the end thereof the following paragraph"):
(h)").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I beg to move the next Amendment.
Amendment moved—
Page 48, line 38, at end insert—
"(5) Regulations under section twenty-four or twenty-five of this Act shall provide for the establishment of separate tribunals for Scotland, and subsection (6) of the said section twenty-four shall apply to the tribunal to be established for Scotland for the purposes of that section or of section twenty-five with the substitution of a reference to an advocate for the reference to a barrister.
(6) Subsection 4 of section forty-one of this Act shall not apply to orders relating to land in Scotland or to personal estate to be laid out in the purchase of such land.
(7) Section forty-five of this Act shall have effect as if in paragraph (c) thereof for the reference to section seventy-nine A of the provisions therein mentioned there was substituted a reference to section seventy-two A of the provisions substituted by Part II of the Mines (Working Facilities and Support) Act,1923, as that Part applies to Scotland for sections seventy-one to seventy-eight of the Railways Clauses Consolidation (Scotland) Act, 1845."—(The Lord Chancellor.)
On Question, Amendment agreed to.
LORD WINSTER LORD WINSTER moved, at the end of subsection (5), to insert:
"() Documents belonging to the Board shall for the purposes of subsection (1) of section five of the Public Records (Scotland) Act, 1937, be deemed to be records belonging to His Majesty."
The noble Lord said: The application by this Amendment is of Section 5 (1) of the Public Record of Scotland Act, 1937. It will enable the Board, with the consent of the Master of the Rolls, to send for preservation by the Keepers of the Rights and Records of Scotland any documents which relate exclusively or mainly to Scotland. I beg to move.
Amendment moved—
Page 48, line 41, at end, insert the proposed new subsection.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 60, as amended, agreed to.
Clause 61:
Short title, extent and repeal.
61.—(1) This Act may be cited as the Coal Industry Nationalisation Act, 1946.
(2) This Act shall not extend to Northern Ireland.
(3) The enactments mentioned in the first and second columns of the Fourth Schedule to this Act are hereby repealed to the extent specified in the third column of that Schedule as from the primary vesting date, and Regulation sixty B of the Defence (General) Regulations, 1939, is hereby revoked as from that date.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (3), to leave out "Regulation sixty B of the Defence (General) Regulations, 1939, is" and insert "paragraph (5) of Regulation fifty-five AA of the Defence (General) Regulations, 1939, and Regulation sixty B of those Regulations are".
The noble and learned Lord said: This Amendment, revoking paragraph (5) of Regulation 55AA of the Defence (General) Regulations, is consequent upon the repeal by the Bill of the Coal Mines Act, 1930. The paragraph to be revoked deals with power of executive boards set up under the 1930 Act to disclose information. As the 1930 Act is repealed by this Bill, the Defence Regulation power is no longer necessary. I beg to move.
Amendment moved—
Page 49, line 7, leave out ("Regulation sixty B of the Defence (General) Regulations, 1939, is") and insert the said new words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 61, as amended, agreed to.
First Schedule:

PART II.
Assets to be transferred at option of the Board or of owners.
10. Interests of colliery concerns and of class A subsidiaries thereof—

(a) in fixed and movable property used for the purposes of the making of bricks, tiles, or earthenware pipes, or other products manufactured from colliery debris or brick clay or earth, or in connection with those purposes; and

(b) in fixed and movable property used for supplying water from a mine of coal;

and interests of such concerns and subsidiaries in consumable or spare stores available for use for such activities as are mentioned in sub-paragraph (a) or (b) of this paragraph.

PART IV.
Other assets to be transferred at option of the Board or of owners subject to arbitration in case of objection.
(2) Where an option is exercised for the vesting in the Board of an interest in property falling within this paragraph, activities for which that property is exclusively or mainly used by the colliery concern or its class A or class B subsidiary, or for which that interest is exclusively or mainly owned, shall be treated for the purposes of paragraphs 3 to 8 of this Schedule as if those activities had been colliery production activities.

PART V.
Provisions supplementary to the preceding provisions of this Schedule.
21. Where an interest in a thing was owned by any concern, company or other person or for any purpose, or a thing was used for or in connection with any purpose or available for use for any purpose, at any time between the first day of January, nineteen hundred and forty-six, and the primary vesting date or a relevant option notice date, but was no

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longer owned by that concern, company or other person or for that purpose, or used for or in connection with that purpose or available for use for that purpose, as the case may be, immediately before that date, it shall be treated for the purposes of this Act as if it had been so owned, used or available immediately before that date, unless it is proved by the person whose interest in that thing would vest in the Board by virtue of this paragraph, that the fact that it was not so owned, used or available immediately before that date was due to something done or occurring in the ordinary course of business, and was in no way connected with any provision made by this Act or with any anticipation of the making of any such provision
23. In this Schedule the following expressions have the meanings hereby assigned to them respectively, that is to say,—
5.28 p.m.
LORD FAIRFAX OF CAMERON LORD FAIRFAX OF CAMERON moved, in paragraph 10, to leave out subparagraph (a). The noble Lord said: I would like to speak on the three Amendments standing in my name. The effect of this Amendment is to transfer the provision regarding brickfields from where it is now, subparagraph (a) of paragraph 10 of Part II of the First Schedule, to Part III of the Schedule, so that the transfer of assets in property used for making bricks, tiles, or earthenware pipes, etc., will become subject to arbitration. As the matter now stands, the brickfields, etc., can be transferred to the Board at the option of either the Board or the owners, and solely on that account, without any account being taken of extenuating circumstances or arguments put up by the dissenting parties if disagreement arises. There is no check on the transfer. It could of course (I am not saying it would) become indiscriminate. Brickfields vary in relation to the coal industry. Some are very closely enmeshed in the industry and cannot be easily extricated. The right thing to do under those circumstances would be to transfer those brickfields to the Coal Board. But other brickfields are not so completely enmeshed with the coal industry and there would be no real reason for transferring them under the Board. Furthermore, the transferring of brickfields to the Coal Board is a most dangerous precedent and one which might be followed on future nationalization Bills in regard to an industry other than that being nationalized.
One has to draw the line somewhere in nationalization Bills as to where other industries must be brought into the industry
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that is being nationalized. I do feel that it is our duty to make quite clear just how far other industries should be brought in and how far we should overstep the needs of utility. Brickmaking is quite a different thing to coalmining; a person may understand how to mine coal, but it does not necessarily follow that he knows how to make bricks. I feel that these brickfields coming under the Coal Board are going to be of no help at all to the Board. It is quite a different job and I think it would be far better, wherever possible, to leave the brickfields in the hands of those people whose job it is to deal with them.
There is one last point which I think I should not leave out, because it may be of some importance. The wage structure of brickmaking is controlled by the brick industry; it is quite different from that in the coal industry, and I feel considerable complications may arise over the difference in the scales of pay. I feel that the question of bringing ancillary industries under the Board needs some clarification and that there should be some set rules to guide us.
Amendment moved—
Page 52, line 5, leave out subparagraph (a).—(Lord Fairfax of Cameron.)
THE EARL OF DUDLEY: I should like to support the Amendment which has been moved by my noble friend. I cannot see any logical reason for transferring compulsorily an ancillary industry such as brickmaking to the nationalized colliery undertakings. These brick kilns have sprung up, as your Lordships are no doubt aware, in close proximity to collieries because they use a certain amount of raw material which is thrown up by the collieries, but in other respects they have nothing to do with them and in most cases they are very easily severed from them. They will continue to be of use to nationalized colliery undertakings because they will continue to be an outlet for the sale of these raw materials of which the collieries wish to dispose. Noble Lords opposite have told us that the object of this Bill is to reorganize the coal industry, which they say has been such a great failure in the past. Surely it would be much wiser for them to concentrate on that and not to become involved in the small or moderately small ancillary undertakings, such as brickmaking, which have nothing whatever to do with the raising of coal from the ground.

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There may be cases, of course, where it is very difficult indeed to sever a brickworks from a colliery, and where indeed the owners may prefer that the brickworks should pass over to the State together with the colliery; but those are all matters which would be dealt with in arbitration. It seems entirely wrong to me that they should be compulsorily passed over to the State and not passed over under arbitration. I agree with my noble friend when he says this is a very dangerous precedent. On several occasions we have been told by noble Lords opposite that industries become ripe for nationalization under certain circumstances. If a part of this brickmaking industry is going compulsorily to pass into the Government's hands without any option on the part of the present owners, the time may very shortly arrive when the Government will say that the brick industry is ripe for nationalization. I hope that the Lord Chancellor will see fit to transfer this from the part of the Schedule which lays it down as an option on the part of the Government or on the part of the owner to that part of the Schedule which will ensure that the brickworks are not taken from the present owners without arbitration.
THE LORD CHANCELLOR: Noble Lords have quite accurately stated the effect of this Amendment, which is simply to move the transfer of brickworks from Part II of the Schedule to Part III, with the result that there will be arbitration on the question of whether or not brickworks should be transferred. The difference between Part II and Part III is, of course, clear to your Lordships. In Part II there is an absolute right vested in the Board to acquire assets and an absolute right vested in the owners to transfer them, on the ground that the assets in question are major ancillary activities carried on in connexion with collieries. Such major assets would be liable materially to affect the efficient operation of the Board's undertaking and the Board should, therefore, have an absolute right to acquire them. In the circumstances, of course, it is only fair, too, that the owners should have an absolute right to get rid of them and to be paid the appropriate compensation therefor; otherwise they might be left with a major asset for which they would have little use after losing their primary asset, namely, the colliery. Part II procedure, therefore, obliges the Board to
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take the rough with the smooth. Part III, on the other hand, enables the Board to have recourse to arbitration if the owners wish to transfer to them some unwanted property.
In regard to brickworks there are certain considerations which make them of especial importance to collieries. First of all, collieries have to consume large quantities of bricks, especially for their underground workings, and it is important for them to have quantities of bricks constantly at hand. Secondly, many collieries produce the raw material from which bricks are made—shale and clay; those are unavoidably produced in mining operations or found in association with the coal seam and mined with the coal. Thirdly, the availability of coal and brick-making materials in the same place enables the heavy transport and fuel costs associated with brickmaking to be reduced to a minimum, and moreover certain low grade fuels for which there may be no outlet can be used in brickworks. Therefore it seems to us from every point of view that brickworks are preminently activities which can advantageously be carried on by the Board "by reason"—and I am reading now the words of Clause 1 (2) (d)
"of their having materials or facilities for the production or manufacture thereof in connection with the working and getting of coal or any other of their activities"
There are, it is true, certain large brickworks under the same ownership as the collieries which could readily be detached from them and could be worked separately. Some are mixed up, but some could be worked separately. I think it is quite impossible to define which of such brickworks it would be inappropriate for the Board to take over, and the Board themselves will be in the best position to assess the advantages and disadvantages in each case after the examination of the problem on the spot. It is right, we submit, to leave them discretionary power in the matter. For this reason, therefore, I could not agree to the proposition that brickworks should be transferred from Part II to Part III.
VISCOUNT CRANBORNE: I would like to say one or two words. I cannot be called an expert, either upon collieries or brickyards, and I am speaking merely from the point of view of the ordinary listener to this debate. I think that the noble and learned Lord, the Lord Chancellor,

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made out a very good case for the transfer of brickworks to colliery undertakings under certain conditions. It is quite obvious that there are certain brickworks so closely integrated with the collieries that they may almost be regarded as one single undertaking. On the other hand, the noble Earl, Lord Dudley, who speaks with considerable knowledge of these questions, pointed out that there are others which are not so closely integrated, and although in the same neighbourhood are not part of the same undertaking, and where the connexion could easily be severed.
It seems to me one of those cases where arbitration is extremely desirable. The Coal Board may take over a particular brickyard and the owner may not wish them to do so. The Coal Board may be absolutely right, but the owner ought to feel that he has had every chance of stating his case. If the thing goes to arbitration both sides put their case before an impartial arbitrator, and if the owner is defeated he has no further complaint. I think all of us feel that one of the most important things is that nobody should have a legitimate grievance. To transfer this provision from Part II to Part III would avoid any possibility of grievance arising, and would provide for an absolutely full and impartial inquiry in cases where there was a difference of opinion. I cannot feel that that is an unjust or wrong thing, and I hope the Government will consider the matter further. It would be the greatest possible pity if in numbers of cases where owners had been operating these brickworks with the greatest assiduity to the advantage of the country those owners felt that they had been badly treated, and the Amendment of the noble Lord, Lord Fairfax, is designed to avoid that.
THE EARL OF DUDLEY: This is really a very important point, and I would like to make one or two observations in reply to the extremely clear statement of the noble and learned Lord, the Lord Chancellor. He said that bricks were required for the purposes of the colliery. I do not know of a single instance—and I do not believe there exists a single instance—where brick kilns have been set up alongside the colliery for the purpose of supplying bricks to the colliery, because the requirements of the colliery from the total output of even a very small kiln
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would be so infinitesimal as to make such a thing quite ridiculous. Obviously collieries buy their brick requirements in the open market the same as anyone else, and in many cases they get their bricks very much cheaper in that way than by operating kilns for the purposes of supplying themselves with bricks. I think that shoots—if I may respectfully say so—all the gunpowder out of the Lord Chancellor's first argument.
The noble and learned Lord then said that it was necessary for the Government to take over these brickworks because the collieries produce raw materials which are used in the brick-making. That is quite true, but that is no reason why the State should take over the brickworks, because they could go on selling this material to the brickworks under contract in the same way as they are sold now. In most instances they are separate companies, and the brickworks buys from the colliery, under contract, the raw material, whatever it may be, dirt, shale, or slack. That could go on just as well if the brickworks remained separate from the State-owned colliery. I think that disposes of his second argument.
Then there was the third argument, in which I admit there was a good deal more weight, which dealt with the question of overheads. It is true that in some cases a certain amount of supervision is carried on between the collieries and the brickworks, but that is no reason why an amicable arrangement should not be arrived at in this respect between the State-owned collieries and the privately owned brickworks. Collieries sell power to all sorts of people under present conditions. If they have power to spare from their power-houses they can sell it to an adjoining industrial undertaking of any sort, and there would be really no objection whatsoever under the noble and learned Lord's third head.
He said it was quite impossible to differentiate between those brickworks which are so closely allied to the colliery as to be impossible of severance, and those which could be quite easily severed. I agree with the noble Viscount, Lord Cranborne that there are certain brick works which are so closely allied that they cannot possibly be severed, but all those things would be brought out in arbitration proceedings. I cannot see any reason for this arbitrary and dictatorial

1077
method of taking over brickworks without any logic, rhyme or reason. I hope the noble Lord will press these Amendments unless we are assured that between now and the Report stage further consideration will be given to this principle.
LORD FAIRFAX OF CAMERON: I would like the noble and learned Lord if possible to explain to me one point which I must confess I cannot make out at all. The question has been asked twice on this particular Amendment: Why is it that the arbitration tribunal cannot judge each individual case as well as the Board? Why is it that the arbitration cannot be done by a tribunal set up for that purpose as well as it can be done by the Board? I should be grateful if the noble and learned Lord, the Lord Chancellor, would explain that point to me.
THE LORD CHANCELLOR: Because, speaking broadly, these are major ancillary industries. After all, the scheme of the Bill is that when you are taking over the collieries you are taking over automatically the major ancillary industries. As I have tried to say, they are so very closely intertwined in the colliery working. I have been asked to look at this matter, but I have not yet had an opportunity of finding out the views of my right honourable friend the Minister. I will find out what view he takes about this, although I hold out no grounds for hope. Indeed, the reverse.
VISCOUNT CRANBORNE: I am grateful for what the noble and learned Lord has said. We attach considerable importance to this provision for we regard it as an undue extension to the Bill. We shall be glad to hear the result of his consultation with the Minister. If he cannot produce a satisfactory result, we shall be inclined to press this matter. I was not really greatly impressed by the argument of the noble and learned Lord, the Lord Chancellor, about ancillary undertakings. The only reason that they are ancillary is because they use what comes out of the mines. If we are to proceed on that basis, then the noble Earl, Lord Dudley's steel undertakings and other industries all over the country are ancillaries in that sense. Not all, but some of these brickyards are, in fact, separate undertakings, and if it is suggested they should be taken over without the owners being given any
1078
option, I think that would be a hardship upon them. We feel that they should have a fair opportunity of stating their case before an impartial arbitrator. That is surely fair and I hope the noble Lord will find it possible to persuade the Minister that it is. Otherwise we shall be obliged to return to the attack at a later stage.
LORD FAIRFAX OF CAMERON: In view of the assurance given by the noble and learned Lord, the Lord Chancellor, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
5.40 p.m.
LORD WINSTER LORD WINSTER moved, in paragraph 19 (2), after the first "activities" to insert" of a kind specified by the Board in their notice exercising the option as being activities for which they intend to use that property, or, if the option is exercised by the owner, activities of a kind" The noble Lord said: This is an Amendment of some importance, and I will endeavour to explain it to your Lordships as clearly as I can. Paragraph 19 (2) of the First Schedule, as it now stands, provides that where property mentioned in paragraph 19 is used for certain activities, and that property, by the exercise of an option, vests in the Board, ancillary equipment (as is mentioned in paragraphs 3 to 8 of the Schedule) which is needed in order that property may be used for these activities, shall also vest in the Board—for example, transport equipment.
It was, however, overlooked when that paragraph was drafted that property acquired in this way might have been used both in respect of activities for which the Board were proposing to use the property, and also in respect of activities which the colliery-owner will continue to carry on. It is not intended to vest in the Board ancillary equipment relating to these latter activities, that is to those activities which the colliery-owner will continue to carry on. The proposal, therefore, is to draw a distinction between, on the one hand, those activities in connexion with which the property which is the subject of the option was used by the colliery owner, and will continue to be used by, the Board and on the other hand, those activities in connexion with which the property was used by the colliery-owner, but will not be used by the Board in that connexion.
The Amendment which I am proposing makes the necessary distinction between these two classes of activities, on the basis of the Board's intention in taking the property under option. To give an example, if the Board take under option from a composite undertaking property used partly for coal carbonization and partly for some other activity such as steel making, intending to use the property for coal carbonization, then transport and equipment of the undertaking used in connexion with coal carbonization will vest compulsorily, but similar equipment used for other activities of the undertakings will not so vest. Where the option is exercised by the owner, this Amendment makes a similar distinction between the two classes of activities on the basis of what the property was mainly used for before. This Amendment puts straight a matter which was overlooked when the Bill was drafted. I beg to move.
Amendment moved—
Page 53, line 30, after ("activities") insert the said words.—(Lord Winster.)
On Question, Amendment agreed to.
LORD AMMON LORD AMMON moved, at the end of paragraph 20, to insert
("(2) References in this Schedule to any business or activities, and references in the definition therein of the expression "subsidiary" to ownership of capital of a company, shall be construed as references to the business or activities as carried on immediately before the dates respectively mentioned in the preceding sub-paragraph, or to the ownership of the capital as held immediately before those dates respectively, subject however to the provisions of the next succeeding paragraph")
The noble Lord said: This Amendment and the next one on the Paper go together, and with the permission of the Committee, I propose so to deal with them. They really are Amendments of paragraphs 20 and 21 of the First Schedule to the Bill, which constitute a provision for preventing evasion of the vesting provisions of the Bill; that is, to prevent the sale of assets between the date of publication of the Bill and the vesting dates. It is, of course, possible that attempts at evasion might be made by diversion of ownership or use between the dates of the publication of the Bill and those future dates. Neither paragraph deals adequately with the position so far as vesting depends on ownership by subsidiary companies, or on use for particular
1080
businesses or activities. This point is covered by the Amendment which is now moved. The first Amendment clarifies the use of references to "subsidiaries", as can be seen in paragraph (2) of the second Amendment and safeguards the operation of the Schedules against a change in the ownership of a subsidiary designed to evade the vesting of assets owned by such a subsidiary.
Secondly, some forms of diversion are not covered by the wording as it stands. For example, the retention of a freehold interest but the draining of the substance out of it by the creation of a long lease at a peppercorn rent is not covered. It is now proposed to substitute a general reference to all forms of dealing with interests. This defect is remedied by subparagraph (a) of the second Amendment where the many relevant ways of diversion are set out. Further, the Amendment makes clearer on whom is the onus of proving that diversion is within the exception for bona fide diversion in the ordinary course of business, namely, on the person concerned. This is set out in paragraph I of the second Amendment. A further point is that provision is proposed for the protection, as regards compensation, of bona fide purchasers who may be dispossessed by the operation of these paragraphs. Lastly, the opportunity is taken to make a verbal amendment for removing an ambiguity as to whether a diversion on the first day of the "close" period (the 1st January, 1946) is within the scope of the provision.
Amendment moved—
Page 53, line 48, at end insert the said new sub-paragraph.—(Lord Ammon).
On Question, Amendment agreed to.
LORD AMMON LORD AMMON moved, in paragraph 21, to leave out "between the first day of January, nineteen hundred and forty-six, and the primary vesting date or a relevant option notice date, but was no longer owned by that concern, company or other person or for that purpose, or used for or in connection with that purpose or available for use for that purpose, as the case may be, immediately before that date, it shall be treated for the purposes of this Act as if it had been so owned, used or available immediately before that date, unless it is proved by the person whose interest in that thing would vest in the Board by virtue of this paragraph, that the fact that it was not so owned used or available immediately

1081
before that date was due to something done or occurring in the ordinary course of business, and was in no way connected with any provision made by this Act or with any anticipation of the making of any such provision, and to insert:
"during the period beginning with the first day of January, nineteen hundred and forty-six, and ending with the primary vesting date or a relevant option notice date, then—

(a) if that interest has been dealt with in any manner during that period, whether by sale, exchange, surrender, creation thereout of a lease or other inferior interest, diversion to another purpose, or otherwise howsoever, this Act shall have effect as if the interest had not been so dealt with but had remained subsisting in all respects as it would have been if it had not been so dealt with, and

(b) If that thing has ceased during that period to be used for or in connection with, or to be available for use, as the case may be, for the purpose in question, this Act shall have effect as if it had not so ceased, unless, on a question being raised as to the vesting in the Board of that interest having regard to the preceding provisions of this paragraph it is proved by the person contesting such vesting that the dealing in question, or the cesser of use or availability for use, as the case may be, was due to something done or occurring in the ordinary course of business, and was in no way connected with any provision made by this Act or with any anticipation of the making of any such provision.

(2) Where during the period aforesaid there has been a discontinuance of any business or activities mentioned in this Schedule or a change relevant to provisions thereof in the circumstances of the carrying on of any such business or activities, or there has been a change relevant to the definition therein contained of the expression 'subsidiary' in the ownership of the capital of a company, this Act shall have effect as if the discontinuance or change had not taken place, unless the like matters as are mentioned in the preceding sub-paragraph are proved as to the discontinuance or change.
(3) The regulations as to disposal of compensation to be made under section twenty of this Act may make provision for securing that compensation for the transfer of an interest vesting in the Board having regard to the preceding provisions of this paragraph shall be disposed of with due regard to the rights of any person who has purchased or otherwise dealt with that interest during the period aforesaid in good faith."
LORD AMMON: I beg to move this Amendment which I have already explained.
Amendment moved—
Page 54, line 4, leave out from ("time") to the end of line 16 and insert the said new paragraphs"—(Lord Ammon.)
On question, Amendment agreed to.
LORD WINSTER LORD WINSTER moved, in paragraph 23, to insert "'interest' does not include
1082
a mortgage estate or other interest held by way of security." The noble Lord said: Clause 5 (6) extinguishes mortgage interests. It follows, therefore, that compensation for interests acquired by the Board is assessed on the basis of such extinguishment. It is important to exclude a mortgage interest from being treated as a "transferred interest," since if it was not excluded it would follow that double compensation would be paid, both on account of it being extinguished and on account of it being treated as a transferred interest. Normally a mortgage interest would not vest in the Board, since it would not be owned by a person carrying on activities of the coal industry; however, it is just possible that in exceptional cases it might happen that vesting would take place, and this Amendment is drafted to exclude any such possibility of the payment of double compensation. I beg to move.
Amendment moved—
Page 53, line 48, at end insert the said words.—(Lord Winster.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in paragraph 24 (Application to Scotland), to insert—
"the expression 'mortgage estate' means the right of the creditor in a heritable security"
The noble and learned Lord said: This Amendment deals with the application of the definition to Scotland. It is consequential on the insertion in the interpretation clause of the definition of "interest" and not including mortgage estate or other interest held by way of security. I beg to move.
Amendment moved—
Page 55, line 45, at end insert the said new words—(The Lord Chancellor.)
On Question, Amendment agreed to.
First Schedule, as amended, agreed to.
Second Schedule:
Transfer to the Board of Rights and Liabilities under Contracts.
2. Provisions of a contract being provisions to which this Schedule applies shall have effect in favour of and against the Board so far as the performance thereof is due under the contract on or after the primary vesting date (or, where the application of this Schedule depends upon the vesting of an interest in the Board by virtue of the exercise of an option, on or after the date of its vesting), as if the Board had been a party to the contract instead of the concern, subsidiary or owner mentioned in subparagraph

1083
(1) or (2) of paragraph r of this Schedule:
Provided that—

(a) rights and liabilities in respect of payments due on or after the date aforesaid for goods or utilities delivered or supplied before that date, or for work done or services rendered before that date, shall be excepted from the operation of this paragraph; and

(b) the operation of this paragraph may be excluded, as respects all or any rights or liabilities as respects which it would otherwise have effect, by agreement made between the Board and the concern, subsidiary or owner mentioned in sub-paragraph (1) or (2) of paragraph r of this Schedule and notified to the other party to the contract, but, if such a notice is served after this paragraph has taken effect as to the provision in question, so far only as regards performance thereof due under the contract on or after the date of service of the notice.

THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in paragraph 2 (b), to leave out "but, if such a notice is served after this paragraph has taken effect as to the provision in question, so far only as regards performance thereof due under the contract on or after the date of service of the notice," and insert:
"but subject to the following provisions, namely, that if the other party to the contract (or any of them if more than one) objects to the exclusion he may within the prescribed period from the date of the 'notification to him refer the matter to arbitration under this Act, and in that event the arbitrator shall determine whether and to 15 hat extent the exclusion is to be effective, and except, in accordance with the determination of an arbitrator on such a reference, the exclusion shall not extend to performance of the contract due thereunder before the notification."
The noble and learned Lord said: This Second Schedule makes provision for the transfer of contracts of the Coal Board. By paragraph 2 (b) operation of the Schedule may be excluded, in the case of some particular contract, by agreement between the Board and the colliery concern or other person mentioned in the paragraph. This provision is desirable as in certain cases it may be convenient for the colliery concerned to carry out the contract, rather than the Coal Board. It has been pointed out that such exclusion might produce hardship to a third party to the contract. This Amendment makes it possible for a third party who objects to the contract being excluded from the operation of the Schedule to take the matter to arbitration. The arbitrator will decide to what extent exclusion shall apply. I beg to move.
Amendment moved—
Page 57, line 6, leave out from ("contract") to the end of line 10, and insert the said new words.—(The Lord Chancellor.)
LORD LLEWELLIN: We have no objections whatever.
On Question, Amendment agreed to.
Second Schedule, as amended, agreed to.
Third Schedule:
Provisions as to Selling Schemes under Part I of the Coal Mines Act, 1930, and as to the South Yorkshire Mines Drainage Committee.
Contracts.
4.—(1) Subject to the provisions of subparagraph (3) of this paragraph, as from the primary vesting date a contract to which the body administering a selling scheme, other than a central selling scheme, is a party shall have effect in favour of and against the Board as if the Board had been a party to the con_ tract instead of that body.
(2) Subject to the provisions of sub-paragraph (3) of this paragraph, as from the primary vesting date—

(a) a contract to which the body administering a central selling scheme is a party; and

(b) a contract for the rendering, for the purposes of colliery sales activities, of personal services to a selling agent appointed under a group selling scheme;

shall have effect in favour of and against the Board, so far as the performance thereof is due on or after the primary vesting date, as if the Board had been a party thereto instead of the body or agent aforesaid.
(3) Subsection (2) to (4) of Section seven of this Act and subsection (3) of Section nine thereof shall apply to the contracts mentioned in sub-paragraph (1) and sub-paragraph (2) of this paragraph respectively as they apply to the contracts mentioned in the Second Schedule to this Act with the substitution, for references to that Schedule, of references to the said sub-paragraph (r) and to the said sub-paragraph (2), respectively.
THE LORD CHANCELLOR: The first Amendment is a mere drafting Amendment.
Amendment moved—
Page 59, line 1, at beginning insert ("The provisions of")—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next is also a drafting Amendment.
Amendment moved—
Page 59, line 1, after ("and" insert ("of").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is a third drafting Amendment. I beg to move.
Amendment moved—
Page 59, line 5, leave out from "substitution "to end of paragraph and insert:

("(a) for the reference in subsection (2) of the said section seven to the purposes mentioned in paragraph 1 of that Schedule, of a reference to the purposes of the selling scheme in question; and

(b) for references generally in those provisions to that Schedule, of references to this paragraph.").—(The Lord Chancellor.)

On Question, Amendment agreed to.
Third Schedule, as amended, agreed to.
Remaining Schedule agreed to.
House resumed.

BUSINESS OF THE HOUSE.
5.58 p.m.
LORD AMMON: My Lords, with reference to the further stages of the Coal Industry Nationalisation Bill, I should like to acquaint your Lordships that we propose to take the Report stage on Tuesday and Wednesday, July 2 and 3, and the Third Reading on Friday, July 5.
THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON): My Lords, might I add a sentence to that? There is a Motion on the Wednesday relating to broadcasting which I know is attracting considerable interest. Of course if the Report stage of this Bill does not occupy the whole of Wednesday there might be time for that discussion. If there is not I should be glad, in consultation with noble Lords opposite, to try and arrange another suitable time for the discussion on Broadcasting.
VISCOUNT CRANBORNE: My Lords, I am most grateful. I think it is quite possible that we shall get through the Report stage in one day, in which case the noble Lord, Lord Brabazon, will have Wednesday for his debate. If I were he I should leave the Motion on the Paper.
VISCOUNT ADDISON: My Lords, I am afraid I was incorrectly informed. I was trying to do good, but I find I have done so unnecessarily. Apparently the debate on broadcasting is next Wednesday, June 26. However, if there should be an important debate on the Paper for that day I will endeavour to be equally accommodating in these circumstances.

BIRMINGHAM CORPORATION BILL.
Report from the Committee of Selection that the following Lords be proposed to the House to form the Select Committee for consideration of the said Bill, namely:

E. Iddesleigh.

L. O'Hagan (Chairman).

L. Amherst of Hackney.

L. Doverdale.

L. Quibell.

Agreed to, and the said Lords appointed accordingly.

WEST SUSSEX COUNTY COUNCIL BILL. [H.L.]
Reported from the Select Committee with Amendments.