Lords Sitting of 26 April 1949

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

  COAL INDUSTRY BILL
  2.35 p.m.
  Order of the Day for the Second Reading read.
  THE PAYMASTER - GENERAL (LORD MACDONALD OF GWAENYSGOR): My Lords, your Lordships will not be surprised to learn that when I first received the intimation that I was to move the Second Reading of this Bill during the first Sitting of your Lordships' House after the Recess, I experienced something of a shock. That shock was intensified a few hours later when I heard a sentence attributed to Lord Morley. Lord Morley was referring to his experience in addressing your Lordships' House, and he used these words:
  "I have had fifty years' experience of public life, and your Lordships' House is by far the most difficult assembly which I have had to address. What disturbs the speaker is not opposition, because that stimulates and brings out reserves of power; it is the silent resentment evident in your Lordships' faces."
  That sentence would have been devastating, were it, not that in another place I had been privileged to look at the faces of many who are now members of this House. It is true that sometimes I saw those faces frown with disdain when
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  listening to an inconclusive and unconvincing argument, but on the whole they were friendly faces, and that encouraged me most. I was further encouraged by the noble Viscount the Leader of the House, Lord Addison, whose absence from to-day's proceedings I know we all deplore. He said to me: "Don't you worry too much. You will find the House of Lords, to one of their members venturing forth for the first time, the most sympathetic Assembly in the world. Further, you are dealing with a subject with which you ought to be intimately acquainted."
  It is now well-nigh fifty years since I was brought into very close and direct contact with this industry. The day that I was thirteen I entered a pit cage for the first time, and I was almost literally hurled some 1,500 to 1,600 feet into the bowels of the earth. There, I was employed fifty-four hours a week and I received in return for my weekly wage a golden half-sovereign. I was rather interested in looking back, and I asked for some figures so that we might compare them and also learn what this industry has done in various ways during the first half of this century. I asked what was the cost per ton raised in 1901, and I was told that it was 8s. 9d. In 1947, the latest year for which figures are available, it was 40s. 3d. per ton. I also asked what was the average yearly wage of a miner in 1901, and I was told that it was £79. In 1947 it was £347. Those figures indicate that this industry has made some progress during this century. I do not think that any industry has occupied so much Parliamentary time during that

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  period as has the coal industry. The number of references in Hansard of both Houses to the coal industry during this century is amazing. There is a mass of legislation, and to-day I am asking your Lordships to agree to add to that mass of legislation.
  The Bill before us attempts to amend two Acts of Parliament, the Coal Mines Act, 1911, and the Coal Industry Nationalisation Act, 1946. Part I deals with the latter of those Acts. I know that there will be general agreement in your Lordships' House that the 1946 Act needs amendment. I should be amazed if any member of this House were to rise to his feet to-day and suggest that that is not so. I anticipate unanimity on the need for amendment. It may be—I sometimes fear that it will be—an ominous unanimity, to be used later on to emphasise that what is wrong with this Bill is that it does not do enough, that it is too small, that it niggles instead of dealing drastically with matters which need to be dealt with in relation to the 1946 Act. The Government feel that the day has not yet arrived when a general revision of the provisions of the 1946 Act is required. They agree that that day will come, and may come before long, but the experience up to date indicates that though a drastic revision is unnecessary at the moment there is need to-day for some modifying amendments.
  Clause 1, which may be the most contentious clause in the Bill, deals with the constitution of the National Coal Board. I would like here—and I am sure your Lordships will agree—to pay a tribute to the National Coal Board. They are a body of men who have been sorely and severely criticised, but I wonder how much better any eight or nine of us, having been entrusted with the same obligations and the same responsibilities, would have done since the vesting date in January, 1947. The members of the Board have had a difficult task, but they have realised that changes are required, and they have made changes on their own. As your Lordships know, the original Board was composed of nine men, including the Chairman, a Deputy Chairman and seven members, all of whom had functional responsibilities. To-day, we find that, apart from the Chairman and Deputy Chairman, the
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  Board has been increased by one part-time member. We also find that more than half the Board have been relieved of their functional responsibilities and have only general responsibilities. That is a massive change.
  I know your Lordships will agree that to set up a perfect board would be utterly impossible. Deciding the best type of board is a difficult thing. Many of the biggest industrial concerns in the country have a board of full-time directors; others have some full-time and some part-time directors. It has been necessary to gain some experience in deciding which type fits best into this nationalised industry. The Minister of Fuel and Power himself, some ten or eleven months ago, indicated that he felt the time was approaching when it would be necessary to have part-time members of the Board. The committee set up by the Coal Board itself—a committee of three, with a part-time member—recommended that additional part-time members, along with an additional Deputy Chairman, might be added to the Board. Clause 1 of the Bill carries out that recommendation in its entirety.
  If I needed any support in this matter of the necessity for part-time members of this Board I should refer to the noble Viscount, Lord Swinton. On June 18, 1946, in the debate in your Lordships' House on the Committee stage of the original Bill, the noble Viscount said:
  "I am sure there could not be any greater fallacy than to say that nobody is going to be a director of one of these concerns unless he is going to devote his whole time to it."
  Earlier, the noble Viscount had said:
  "… or you can have a 'mixed grill' …"
  The noble Viscount must have been thinking about the pre-war type of mixed grill! I have found further support from another member of your Lordships' House, the noble Earl, Lord Selkirk, who will perhaps allow me to quote him. The quotation is a fairly lengthy one, but I would ask your Lordships' indulgence to read it, because I have never seen a finer defence of the principle of part-time members of a board of this kind. Speaking on November 3, 1948, in a debate on nationalised industries, the noble Earl used these words:
  "I suggest further that the only way to secure independence, or some element of independence, at the present moment is by having part-time directors. I would press this

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  point. I believe that our thoughts are moving in that direction. There are three things which make that essential. The first is greater independence. In nationalised industries there is a grave danger that a man has the alternative of continuing in a situation of complete frustration or of going out into the wilderness, where his own special capacity and ability can have no scope. The Jesuit is that he has to do what he is told, or leave and lose his means of livelihood. The second advantage of having part-lime directors is their wider experience in other fields, and the third is that administration and advice are not always identical they are separate. The man who can give advice is not always a good administrator, and that is particularly true among trade union men. When it comes to advice, many of them are first-class, but their administrative ability is nil. I suggest, therefore, that more consideration should be given to part-time directors."
  I need not add a single word, my Lords, to that convincing statement. All I would say is that Clause 1 is the result of such recommendations and of other contributions made in this House by noble Lords opposite. I know that the clause may not go far enough, and no doubt the noble Viscount, Lord Swinton, will emphasise that when he speaks. But I think it does go far enough to justify my asking for the approval of your Lordships' House to this Bill, even though the constitution of the Board may not be quite what some desire.
  Clause 2, though possibly less contentious, is a very important clause. We know that at the moment the activities of the National Coal Board are confined to this country. They cannot do anything abroad. Clause 2 is designed to assist them to do what their predecessors did abroad, and to free them of all those limitations imposed by the Act. In this House, of all places, I need not emphasise the importance of the export trade; there is no body of men in this country more conscious of the importance of safeguarding the development of the export trade in general, and of coal in particular. It would be wrong of me to cast any reflection on the exporters. I think they have done, and are doing, a very fine job indeed. At the same time, I do not think that we ought to ask the National Coal Board, with the responsibilities that we have placed upon them by the Act of 1946, to do what is required of them in the Act, without affording them the same liberty of action that their predecessors had in all fields in this country and other countries.
  I know that for the Coal Board to become an exporting agency may have its
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  risks; it would be useless to deny that possibility. At the same time, however, I do not think it right or proper to make the Coal Board in any degree dependent upon a body outside itself. I have paid a well-deserved tribute to the exporters, but the exporters in that trade could create difficulties for the Coal Board. It may be said that it is hardly likely that they will do so. I agree, but I do not think that the Coal Board should be asked to be dependent on the good will of an outside body. For that reason, it is thought that this power ought to be given to the Coal Board—maybe not to be exercised—certainly not immediately—but there to be exercised if and when the occasion arises, as well it may. There might be difficulties with which the Coal Board itself would not be in a position to deal, but which the Coal Board could try to level out. For that reason, it is thought proper to ask for power to be given for the Coal Beard to do as much overseas as their predecessors did.
  I am aware that we shall later on hear comments made regarding the bunkering of coal, or the storage of coal on the water-front. The question will be asked: "What about the milling of coal?" But those are possibilities inside the limits of this clause. They are possibilities. Surely no one would expect the National Coal Board to exercise the power given to them by Parliament in a manner which would endanger the interests of this country or of this industry. Surely the Coal Board can be entrusted, both in bunkering coal and in sinking coal mines outside this country, to act with a wisdom that will safeguard the interests of the coal industry under the British people. Although this clause may create an uneasiness in the hearts of many noble Lords in this House, I trust that they will realise the importance of giving this power to the Coal Board.
  Clause 3 deals again with a knotty problem. Those of us associated with this industry know that in the past contracts were made between those then controlling the industry and the users of coal in various capacities—contracts about which those on the workers' side of the industry were a little concerned. Those in control of the industry seemed to be giving far too great concessions. Many of those contracts specified the size and the type of the coal to be

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  supplied, in some cases without any limitation of time; they were to go on for ever and sometimes at a very low price. There were not many contracts of that kind; I was told by the Minister last evening that there were under forty. But contracts of that kind need to be dealt with by the Coal Board, for they are hampering the Coal Board in their work. I heard only yesterday of a coal-consuming industry in close relationship with the Coal Board, which had a very fine contract for the supply for ever more of a certain quality of coal. Yet that quality of coal is no longer available, except at very high expenditure. The Coal Board feel that they have been hampered and hindered by that type of contract. This clause asks for them to be allowed, when they feel themselves hampered or hindered by such contracts, to bring about their termination, and to do that by the payment of compensation where that is agreed upon by an arbitrator. I do not think I need say any more with regard to Clause 3.
  Clause 4 deals with a sore problem of some people engaged in the industry—namely, superannuation and other rights. It happens occasionally that an Act of Parliament is not tested in the courts with regard to the construction of certain of its terms. Quite frankly, that is what has happened in this case. It was felt that certain words in the Act could be read in various ways, and that, before any occasion arose for taking a case to court, they should be altered to carry out what was intended by Parliament in 1946. We recognise the difficulty. This Bill does two things. First, it makes perfectly plain which people are entitled to receive compensation; secondly, it makes equally plain who are the people not so entitled. I need not enumerate the different classes, but quite a number of people who thought they might come in will no longer qualify. They are people engaged in those industries which have not been nationalised. The test is: Was their industry nationalised? Was the work that they were doing inside an industry that was nationalised? It is on that point that great difficulty has arisen—for instance, in the case of accountants, estate agents, distributors and the like. The Board are not empowered to compensate that class of person.
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  As regards the classes who are to be compensated, experience has shown the need to make quite plain what is meant by the words—I quote them, recognising that I am in the presence of high legal luminaries—
  "expectation of accruer of any particular benefit."
  Perhaps, as a layman, I may put it in this way. We are familiar, for instance, with the case of a colliery company which has an understanding that certain classes of workpeople can retire after, say, thirty years' service, and receive benefits for which they pay no contribution. Maybe one of those men has done ten years' service. He himself is confident in his own capacity, and can see himself, ten or twenty years' hence, as the managing director of that same colliery company. He thinks that, if he is now out of a job, in deciding his compensation regard should be paid to the fact that he might later have held a much more highly-paid post. But he overlooks the possibility that in the intervening period something might happen which would leave him without a job and also deprive him of his pension. In any case, he bases his claim upon his interpretation of those words. The intention of the words in this Bill is to make quite plain what matters will be considered when deciding whether compensation is due under the Coal Industry Nationalisation Act. Clause 5 is an agreed clause. The Scottish Church trustees and other people have felt that their interests have been endangered, and Clause 5 is an agreed clause to meet this point.
  I can now leave Part I and come to Part II, which is a happier Part for me and, I think, for the whole House. Part II attempts to introduce certain Amendments to the Act of 1911. We are today a long way from 1911, and I think we ought here and now to pay a compliment to the Liberal Government of 1911 who were able to design legislation which has worked so well for so long. Again, if I may, I should like to refer to some figures, because I have asked for the figures of men killed or injured in the coal industry in 1910 and 1948. The figures are as follows: killed in 1910, 1,775; killed in 1948, 468; injured in 1910, 5,432; injured in 1948, 2,390. Those figures, showing substantial reductions, indicate the foresight of that Liberal Government and the value of the actions

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  taken in the meantime by various Ministers of Mines and individuals responsible to the industry.
  In reading through the Second Reading debate of 1911 in another place, I noticed that only one who took part in that debate is now with us. He was then the Home Secretary in the Liberal Government, and you will not be surprised to hear that he is now the Leader of the Conservative Party. He was there then, and if I were to read from his (as one would expect) very fine phrasing describing the industry, I could keep the House for quite a while. A member of this House, who spoke for the Opposition in those days and whose name will ever be remembered in the political life of this country was the late Lord Birkenhead. He it was who followed the then Home Secretary, Mr. Winston Churchill. During that debate it was made perfectly plain that the Government were confining themselves to the industry as they knew it and, so far as they could carry their minds into the future, to the technical changes that were likely to take place.
  In the meantime, as your Lordships know, this industry has been revolutionised. The men who could discharge the responsible official duties in the mines of those days are, frankly; not the type who can discharge them to-day; thus Part II makes provision for some improvements in regard to the officials. The word "deputy" will convey but little to many members present, but to those of us who are familiar with the industry it can mean the man who, very possibly, is most responsible for carrying out the safety regulations at all the faces in the mine. It is true that the final responsibility rests upon the manager, but whereas the visits of the manager need be few, the deputy is at the pit every day, and must visit twice a day, with the result that the qualifications fixed in 1911 will not apply to-day. This undoubtedly means that we have to make regulations in order to provide the right type of man to-day. Ministers are engaged in endeavouring to find and train men suitable to discharge the onerous duties of a deputy in a mine.
  Regarding the examination board, I think we all agree that changes in the coal industry also require changes in the tests higher up. The inspectorate of the industry in this country have never received the praise to which they are
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  entitled. They have done very fine work but have seldom been referred to, except
  to be criticised. The inspectorate must be manned by men of the highest
  qualifications. The inspectorate also need to have the finest examination board possible; and this Bill provides for that. Let this be understood: that although the Bill extends the power of the Minister, it still carries the obligation for him to consult the industry before deciding upon an alteration in the regulations; and if there is a difference of opinion the matter must go to arbitration for final decision. All those safeguards are here now. My Lords, I have kept the House long enough to-day. I realise that some parts of this Bill will go too far to please all, and that they will not go far enough to please some, but I think the Bill as a whole will go far enough to enable me to ask the House, to give it a Second Reading.
  Moved, That the Bill be now read 2a.—(Lord Macdonald of Gwaenysgor.)
  3.5 p.m.
  VISCOUNT SWINTON: My Lords, it has often fallen to me, both here and in another place, to congratulate a new member upon a maiden speech, but I cannot recollect that I have ever had the good fortune to congratulate a new member in making a maiden speech as a Minister in charge of a first-class Bill. There may have been some hereditary fear on the part of Lord Morley before he came into this House which made him a little nervous, but the noble Lord who has just sat down has charmed us all by the manner and the matter of his exposition, and I am bound to say that in a long experience of both Houses I have seldom, if ever, met such a wise and experienced "virgin."
  The noble Lord said that I referred to the Coal Board on an earlier occasion as a "mixed grill." I might indeed refer to this Bill as a "mixed grill" or, more accurately, as what in my family we call a "dog's meal"—we collect any odds and ends that may be left from our exiguous rations and put them into a bowl and hope that the dog will thrive. But this is rather an odd mixture. As the noble Lord has rather apologetically admitted, Clause 1 purports to deal effectively with—although it fails entirely in that object—the organisation of the Coal Board and the mining industry. Clauses 2, 3 and 4, as he has explained to us, contain a number of "odds and ends"—some very odd.

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  Part II, which we all welcome, contains some sound reforms of the 1911 Act on lines recommended by the Royal Commission.
  Let me deal for a few moments with Clause 1, because however much it fails to do what ought to be done, and as indeed the Minister admitted will have to be done sooner or later, I think we ought on this occasion to give some consideration to the organisation of this, the first of the nationalised industries, of which we have now had two or more years' working experience. There is only one thing on which everyone is agreed—nationalisers and non-nationalisers alike—namely, that the organisation of the industry to-day is far from satisfactory. And I would add that, equally, we all agree that it is important to get it right. The Minister himself has said that although the Government do not regard this organisation as being right, they do not consider this is the proper moment to reconsider the whole structure, but that that will be desirable at some future time. Consequently the Bill introduces no new principles.
  But if the organisation of this key industry is entirely wrong in principle, surely it ought to be changed at once. There is overwhelming evidence to show that it is wrong. Sir Charles Reid, the greatest technician in the mining industry—himself a strong supporter of nationalisation and a member of the Coal Board—saw the working of the Board from the inside and was convinced that the structure was wrong in principle. Another authority, this time an opponent of nationalisation, with almost equal experience, is Colonel Lancaster, who for a very long period was one of the ablest managers of a successful mining undertaking. Both are in agreement as to what is wrong; and, what is much more important, both are in substantial agreement as to how it ought to be put right. In their recommendations, which I am bound to say I fully support, they have the general support of practical experience in business management.
  This enormous octopus of an enterprise is much too large and too varied to be centralised in a functional administration. In a normal-sized business, I think—and I have said so before—that functional directors are generally right. I like to
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  see executives on the board, but I like some outside element of broad and wide experience as well. But this business is so vast—1,000 pits and a mass of other undertakings, farms, brick kilns, and I do not know what else—and the conditions vary so much in different areas, that functional directors at the centre cannot function in the sense of getting quick, effective action. I am sure it is essential that the local boards with local knowledge should have the necessary authority and initiative and that the Central Board should be concerned with broad policy, finance, major development plans and research; in fact—I use what is becoming a hackneyed phrase but this is all-important in almost every field now—they should be responsible for the overall plan. There seems to me to be no justification in experience and practice for the interposition of the regional boards—of which the noble Lord has said little—between the Central Board and the areas with whom responsibility should rest.
  As Colonel Lancaster said in another place, administrative emphasis should be as near to the point of production as possible, and superimposed above that should be a Central Board, whose main purpose is that of deciding policy and such other activities as are obviously of a national character. That would enable decisions to be given on day-to-day matters as they arise, rapidly, and not, as at present, by formal consultation with divisional boards and at monthly intervals. I do not believe that anyone, least of all the Minister himself, would deny that that is sound, and I think that I shall carry him with me when I say that those essentials can be obtained in only two ways. The first is by giving to the local board in each area adequate powers of decision and action within the general plan. The second is by relieving the Central Board of a mass of detail work, giving them more time to concentrate on the overall plan and to obtain quick and close contact with the area boards. Both these essentials—the devolution of responsibility on the local boards and the right division of responsibility as between the Central Board and the area boards—are hampered if you interpose between the centre and the responsible area regional boards.
  I must say that I think there is too much of the Civil Service model in all this outfit. I have the greatest possible

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  respect for the Civil Service when it is doing its proper job, but its proper job is not running a diversified industry. The Civil Service and anything organised on the lines of the Civil Service will always be centralised and uniform, because the normal job of a Civil Service Department is to carry out a uniform task. I have said once before that it would clearly be ridiculous if the Board of Inland Revenue functioned in a variety of financial ways. Income tax must, of course, be collected in a uniform way, but that is a very different matter from running the coal industry of the country. And, what is more, this cumbrous and centralised administration always means excessive staff. I do not know whether your Lordships have realised that in the last twelve months—the noble Lord will check my figures if I am wrong, but I think they are right—while there has been only a 4 per cent. increase in the number of mineworkers a 14 per cent. increase has taken place in the administrative and non-industrial staffs.
  It is increasingly difficult to see why we should have these regional boards at all. The Minister of Fuel and Power himself said only a few months ago that:
  "… it was always the intention and idea of the National Coal Board that the areas—not the divisions—should be the truly executive operational units which employed the labour and mined and sold the coal. There is no doubt that as area management develops the divisional bounds will become more and more merely co-ordinating and supervising …"
  If that is right—and it is emphasised by two years' experience—why should we keep the regional boards going? The National Board supervises the supervisors, and the regional boards supervise the areas. That is dangerously like the extraordinary picture which Sir Arthur Street (who is, I think, the respected Deputy Chairman of the National Coal Board) drew of an endless chain of supervising authorities rising in a pyramid to a Ministry of Supervision. And Sir Arthur was pleased to picture a Supervising Corporation supervising all the National Boards. He went on to say:
  "Does this point to a need for a Corporation appointed, say, by a Minister of Socialised Industries to co-ordinate the work of all Corporations?"
  I am bound, in fairness, to say that on another occasion when we had a debate on the administration of these nationalised industries, on a Motion put forward by
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  the former Master of Balliol, who showed himself in the course of it to be even more dissatisfied than I was, we found ourselves in a strophe and anti-strophe of condemnation. The Lord Chancellor also joined in the damning chorus and said that he entirely dissented from Sir Arthur Street. But that is all very well. It seems to me that "His master's voice" is that of Sir Arthur Street and not that of His Majesty's responsible Ministers.
  The only arguments which the Minister of Fuel and Power has advanced against
  increased independence for these area boards are two. First, he says, "Are these boards—and it is desirable for them to be independent or to have a large measure of independence—to own the assets in their own areas? That is the real criterion of independence." It is really not so at all. It is quite unnecessary: the Central Board can own the coal and the area boards can operate it. There is no reason why they should not. I know that Ministers are not very good at maintaining contact and co-ordination with their fellow Ministers, but I would have thought that the Minister of Fuel and Power and the Minister of
  Supply need not be so completely at loggerheads over this. Just look at the Steel Bill and what is proposed there. The Minister of Supply does not say: "It is quite impossible to have one body owning steel and another body operating steel." On the contrary, he says, "That is the only way in which steel can be nationalised. There will be a Steel Corporation owning it and 107 companies operating." If that is the right thing to do in the case of steel, why is it the wrong thing to do in the case of coal?
  The only other argument the Minister of Fuel and Power advanced is this: "How far are they expected to pay their way?—because some of them will operate at a loss." That is an equally fallacious argument. The overall plan of the Central Board must decide broadly how much each area should produce. Targets are common form to-day: the Chancellor of the Exchequer sets then for the country, and the President of the Board of Trade distributes them throughout industries. There is nothing new, or apparently difficult, in the Government or any of their organisations or agencies setting targets. That is a function of the Board, and it is a function of the Board to plan where

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  large developments should take place. It may well be that some areas will operate at a profit and others at a loss, but I am certain that we shall get cheaper and more efficient production if the area boards are given wide authority to achieve their targets and manage their business in the best way they can. We shall then have local knowledge, local pride and local encouragement and, in so far as we can get it within nationalised industry, local competition; and all these would be very good things. The only test should be: What will produce the best results, material and moral, from each area? I think we should make a great deal better appeal to the capacity of those working in the industry, as well as have different minds trying out their own ideas, if we gave responsibility to the areas.
  Because I have, as many of my friends have, very definite views as to the reforms which should be made, and because the noble Lord himself has said that they have to be made sooner or later, I have thought it right to say what in our opinion these reforms should be, in order that we may waste as little time as possible in a situation where time is not necessarily on our side. I am not going to divide the House against this Bill. But the appointment of a few part-time directors on the Central Board, while shirking all the outstanding problems of central, regional and local organisation and administration, is just tinkering with the situation. In the classic phrase of the former Minister of Fuel and Power, I do not think it is worth "a tinker's cuss."
  I come to Clause 2, with which the noble Lord dealt in a persuasive manner. It is general and obscure in its language, but it conceals a complete reversal of the policy which Parliament laid down in the Act of 1946. If we passed this clause, it would enable the Board to conduct any activities outside the United Kingdom. The policy which it is now proposed to reverse represented the deliberate decision of Parliament. It was not a decision imposed upon the Government by the Opposition. It was the Government's own proposal to Parliament. What justification has been given by the noble Lord to-day for this drastic change in policy, which the Government themselves commended and which Parliament put into the Act? The Board are overwhelmed
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  by their present duties. They have themselves frequently drawn attention to the vastness and variety of the duties imposed upon them. They have complained, not unreasonably, that they have had to undertake these vast and varied duties prematurely, without any prearranged plan and, as is apparent, these activities have taxed the capacity of the Board to the utmost; and, indeed, have proved beyond their capacity. Why, in these circumstances, should they seek to extend their duties, and to extend them in fields which are well covered and served?
  The noble Lord has given us no case, no particular instance, to justify this change in what Parliament has enacted. Neither the Government nor the Board know which of these new powers they want to exercise, how they would exercise them if we gave them the powers, and why they should have them. If Parliament passes this, the Board are to have power to engage in merchanting and bunkering coal anywhere overseas and, as the noble Lord, Lord Macdonald, has said, these transactions are vitally important to our export trade. These are fields which are already very efficiently covered. I speak from some personal knowledge of this. The noble Lord was good enough to refer to my knowledge of the industry. As a buyer of coal, as a director of various overseas undertakings which are large consumers of coal, I have always made it my aim to direct as many contracts as possible to buying British coal; and we have not been unsuccessful. From my experience I can say that the coal merchants know the needs of their clients, and they compete for service. Our anxiety as buyers of British coal is not about the merchant, who we know will serve as well, but about the Coal Board. Will they produce enough coal of the right quality? Quality is vital to us; price is a secondary consideration. Let the Coal Board stick to their job of producing enough coal of good quality—that is a big enough one.
  I know that the Under-Secretary said the Government wanted to follow the example of Poland. He did not explain why. I do not know why Poland should be a kind of Delphic Oracle, and why, because Poland does it, we must do it. As Poland is a totalitarian country, run on a Communist model, it would be better if the Coal Board made less use

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  of her as a model and applied more of a self-denying ordinance. Where the Government seek to override the considered opinion of Parliament and the provisions of an Act which we passed only two years ago, I suggest that they should come to your Lordships' House with full justification for any new powers they require. No justification has been given, and no attempt has been made to give any. What the noble Lord said to-day amounts to this: that he thought these merchants were doing a successful job, but they might not serve the country so well as the Board. I wish we could count on the Coal Board with as much confidence as we can count on the competitive coal merchants! This hypothetical reason is not a very good one for asking Parliament to change its policy within two years.
  It was said that we might be faced with a new situation and might want to act quickly, and that it takes a long time to pass an Act of Parliament or to amend an Act. I will give the Minister a simple way of overcoming this difficulty. Do not let him take this unjustified power to override an Act of Parliament, but let him take in the Bill a power to come to Parliament, when he has a case, to make an Order which would be subject to Parliamentary approval—I do not care much whether it is by a positive or a negative Resolution. When he has a case—either a specific case or a more general case—where the Coal Board, or the Minister of Fuel and Power, can show to Parliament that the merchants ought to be supplanted, then I am certain that Parliament would be prepared to deal with such an Order, rapidly, fairly and on its merits.
  The only other argument I heard was that the Minister needs to direct exports, as if coal, which was a rare commodity two years ago, were now a rare commodity like industrial diamonds or radium. That is not my anxiety in the world situation as I see it developing to-day. With a potential development in Poland (I think almost an actual development to-day) with its Silesian mines, of something like 100,000,000 tons, with the United States, whose capacity for production is enormous, having entered the export market, which they used not to worry about, and 20,000,000 or 30,000,000 tons being sent into the
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  export market; and with other Continental coalfields resuming their old position, I do not think coal is going to be a rare commodity. I am more anxious because we may find in the next four or five years that we have a glut of coal, and that we shall have to sell coal in keen competition overseas, as we used to in the old days. If that turns out to be the case, we shall need all the brains, connections and good will of the coal merchants to sell our coal.
  I now come to Clause 3, which the noble Lord "slid over." This is a clause which gives power to break contracts. Here again, when the Coal Industry Nationalisation Act was before Parliament, we debated this matter very fully, and we came to an agreed solution. The broad proposition was that the Board should have power to reopen or set aside contracts only if they had been entered into after the decision to nationalise coal had been announced, if they were contracts which (if I may paraphrase what was decided) had not been entered into in good faith—that is to say, contracts entered into with the object of defeating nationalisation after it had been announced—or contracts entered into with an unreasonable want of prudence. The lawyers had a great discussion in arriving at that agreed phrase. Your Lordships will see that that was provided for in Section 7 of the Act. But subject to that, the Board, like any other company, were to take over, subject to existing contracts.
  What is proposed now? It is proposed that the Board should have power to terminate contracts of various kinds (it was said that there were about 40; I am not concerned with the number, but with the principle) if the Board are of opinion that they are, or are likely to be, hampered by the operation of those provisions. Why should the Board have this extraordinary power? If the Board can set aside any past contract which they think may hamper them in the efficient performance of their functions it would be a short step to saying that they can set aside future contracts if they find them hampering them. Let the Government realise what a dangerous precedent they may be setting, not only in this country but outside it. Let thorn look at their own experience. We are negotiating to-day in the Argentine for a new meat

  19
  contract. What is the Government's charge—and it is a perfectly justified charge—against the Argentine Government? It is that the Argentine Government failed to carry out the contract which was entered into by both parties. The Argentine Government allege—I do not know with what truth—that it was unduly onerous. What was the answer of His Majesety's Government to the Argentine Government? They said: "Whether the contract was onerous or not, it was a contract which you entered into."
  All business and commerce rests on the confidence that contracts and engagements between Governments or individuals will be honoured, unless they are varied by mutual consent. It may be said that a particular contract does not pay, or that it is difficult to deliver the kind of coal. I leave aside the contract, if there be one, where particular favour was accorded. But let not the Minister suppose there was anything unreasonable about this. I speak as one who knows a good deal about entering into contracts for a particular type of coal—it may be a particular type of coking coal, or a particular size or quality of coal. In the business with which I am connected, we have for years analysed carefully every cargo of coal we have bought in order to see that the chemical analysis is right. We have always bought on that analysis, and had a guarantee. These contracts are not entered into for fun; the terms are laid down because particular industries need a certain type of coal. To say that the Board can set aside a contract because they find it onerous—that is to say, inconvenient—or because it does not show a profit (and every contract cannot show a profit) is a precedent which I think the Government are most ill-advised to start.
  The noble Lord said that compensation will be paid if the contract is not abnormal—if it is entered into at arm's length, or as if it were entered into at arm's length in the open market. If it is a special contract, of course, it is not entered into in the open market. If the Minister and I make a special bargain which at the time we both consider a reasonable bargain to make, we do not make it in the open market. These are difficult words to interpret. Who is to interpret them? Who is to decide
  20
  whether it is a contract entered into, as it were, at arm's length? As I read the clause, it is not the arbitrator but the Minister who is to decide that. As I read the clause, the arbitrator comes in only when the Minister agrees that the contract was entered into at arm's length. If it was, I cannot see why it should be determined. But it is only then that the arbitrator comes in to decide what the compensation should be. I think the clause is thoroughly bad in principle; but if we are to have a clause of this kind, then certainly the whole business from start to finish ought to be subject to an independent tribunal. I will not say more on that; I am sure that in Committee your Lordships—and nobody is better qualified—will scrutinise that clause very carefully.
  I apologise for being so long, but this is a very important Bill. There is then Clause 4, which deals with superannuation rights in any scheme. This does not apply only with this Parliament; it goes back into the whole history of Parliament in dealing with amalgamations. In any scheme of amalgamation or nationalisation Parliament has been scrupulously careful to see that
  superannuation agreements are honoured. In the Coal Industry Nationalisation Act
  that was done. The then Minister of Fuel and Power, Mr. Shinwell, gave an absolute pledge that this principle would be followed, and great pains were taken to see that the intention was made effective in the Act. If your Lordships will look at Section 37 of the Coal Industry Act, you will see that it provides for regulations, but it lays down that the regulations should be framed so as to secure that where a right to or an expectation of accruer of benefits ceases or is prejudiced by reason of the person ceasing to be employed by his previous employer, the same benefits or substituted benefits not less advantageous shall be provided for under the regulations. We all accept that. That has been common form in our legislation wherever Parliament has sanctioned an amalgamation. It is a Homeric clause. Now the Minister wants to change it.
  I wonder if this is one of the contracts of which the Government seek to be relieved because they are unduly onerous? It may be that Clause 4 ought to run with Clause 3, but it would not have looked quite so well if it had been done like this: "The Coal Board shall have the

  21
  right to be relieved of a contract to honour engagements to their employees if they find them unduly onerous." It looks better to put it in a separate clause. The Minister himself admitted that the new clause may in some cases inure to the advantage of the person who claims an expectation, and in some cases it may be the reverse.
  LORD MACDONALD OF GWAENYSGOR: Not the Minister, the Solicitor-General.
  VISCOUNT SWINTON: I beg pardon. I must draw the distinction. When the Solicitor-General gets up to address Parliament, speaking as the spokesman of the Government, do I understand that we are not to pay attention to him?
  LORD MACDONALD OF GWAENYSGOR: No.
  VISCOUNT SWINTON: Then what is the subtle distinction?
  LORD MACDONALD OF GWAENYSGOR: The only point is that if it is the Solicitor-General, he should be so named.
  VISCOUNT SWINTON: Let me accept the ruling of the Solicitor-General, because I am not quarrelling with what he said. He is quite right; he is a very good lawyer and he told the truth. He said that in some cases the person who claims an expectation is going to be better off, and in other cases he is going to be worse off. There is no doubt about it that in some cases he is going to be worse off. I will come to what the Minister said in a moment, and his declaration is much more open to question.
  If the Minister or the Coal Board consider that someone in the nationalised industry ought to receive better treatment than he would have received from his old company, by all means let them give it, because the Coal Board ought to be a model employer. It is quite right to improve the conditions. But because a good employer in the old days gave better terms than the Coal Board like, and having regard to the fact that Parliament has promised that those terms shall be carried out, why on earth should that man be deprived of the benefits he would have received from the old employer and which Parliament has underwritten firm? I really think that is a most disgraceful thing.
  22
  Now I come to the Minister—and this will not be denied. The Minister of Fuel has made the most extraordinary statement. He admitted that there was a pledge and that it was given effect to by Clause 37, but he said this—and here I quote his words:
  "There was no pledge given to refrain in all circumstances from introducing an amending Bill to clarify the position."
  That is a nice way to express the taking away from a man, an old employee, of a right which he had as against his old employer and a right which Parliament has laid down he should continue to have. That is what is called "clarifying the position"! It is quite true that Parliament is omnipotent and can pass any Act it likes, but hitherto it has been accepted that where the Government enter into an honourable undertaking of this kind, and fortifies it by a statutory enactment, the Government will keep faith. All I can say is that, in the light of this extraordinary ministerial declaration, and the proposal which has been made and now carried through another place, it is open to us to review it here—and it will be our duty to review it. I hope that the workers in other industries now threatened with nationalisation will note, on the authority of the Minister of Fuel, that ministerial pledges, even when backed by legislation, are not worth the paper they are written on.
  I turn for a moment to the happier part of this Bill, Part II, which contains the power to make regulations. I quite agree that new regulations are necessary, but I believe that the right way is to have an up-to-date Act to take the place of the old Act of 1911. That Act was passed as a result of a comprehensive Inquiry. Another Inquiry was set up in 1936 when the Conservative Government were in power, and a full Report was made in 1938. Legislation would have followed but for the war. Indeed, I think it is true that actually before the National Government went out of office we had begun to draft such a Bill. If we must have regulations, we must but I hope that as soon as possible we may do this in the proper way by having a Bill to amend the Act of 1911. I am bound to say that I think it would be a much better Bill than the one which has now been introduced into your Lordships' House.

  THE YANGTSE INCIDENT
  3.46 p.m.
  THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): My Lords, I ask leave of your Lordships to intervene to make a statement on the circumstances in which His Majesty's ships were fired upon in the Yangtse River. The statement is similar to one now being made by the Prime Minister in another place.
  The House will wish to have a full account of the circumstances in which His Majesty's ships were fired upon in the Yangtse River, with grievous casualties and damage. I will first explain what our position is with regard to the civil war in China. It has been repeatedly stated in this House that our policy has been governed by the Moscow Declaration of December, 1945, in which the United Kingdom, the United States and the Soviet Union declared a policy of non-intervention in China's internal affairs. In view of the considerable British interests in China and of the presence of large British communities, His Majesty's Government decided some months ago that His Majesty's Ambassador and His Majesty's consular officers in China should remain at their posts, and this
  was announced to the House by my right honourable friend the Foreign Secretary on December 9. We were not alone in the decision to remain at Nanking. Other Powers represented there, with the exception of the Soviet Union, reached the same decision, and there has since been full consultation between the members of the Diplomatic Corps at Nanking.
  In the disturbed conditions which have prevailed in recent months, warships of various Powers have been at Shanghai and Nanking so that in the event of a breakdown of law and order as the result of hostilities they would be able to assist in the evacuation of their nationals. When the Chinese Government decided to move to Canton, it is true that a warning was issued about warships in the Yangtse. Nevertheless it is a fact that since that time the movements of our warships in the Yangtse have taken place with the full knowledge and consent of the National Government of China. I want to make the point, therefore, that, when the incident took place to which I am about to refer, H.M.S. "Amethyst" was
  24
  proceeding on her lawful occasions, and that there was no other properly constituted authority to whom His Majesty's Government were under an obligation to notify her movements even had they been in a position to do so.
  The House will wish to know whether any steps were taken by our authorities in China to make contact with the Communist authorities. Some time has lapsed since Communist forces overran Mukden, Peking and Tientsin where we have consular posts. His Majesty's consular officers at these posts have been endeavouring for some time past to reach day-to-day working arrangements with the local authorities. Their approaches have, however, been rejected on every occasion, without any reason being given for such a rejection. The same policy was followed in rejecting a letter from His Majesty's Consul in Peking about the "Amethyst" when the incident had occurred.
  In conformity with the decision to remain at Nanking, His Majesty's ships had been relieving one another at that port at regular intervals for some months past. On this occasion the object of the passage of H.M.S. "Amethyst" was to relieve H.M.S. "Consort" at Nanking. Opposing Chinese forces had been massed along the banks of the Yangtse for a considerable time and there were repeated rumours for some weeks that the Communists were about to cross the river. H.M.S. "Consort" was already overdue for relief, but this relief was postponed in view of a Communist ultimatum which was due to expire on April 12 and which might have been followed by the crossing of the Yangtse. On April 12 His Majesty's Ambassador learned that the ultimatum had been extended to April 15. The relief had therefore still to be postponed. Only on April 18 was it learned that the final expiry of the ultimatum might lead to the crossing of the Yangtse by the Communist forces on April 21. The necessity for relieving H.M.S. "Consort" as early as possible remained. She was running short of supplies after a long stay at Nanking and in any case a frigate was considered more suitable than a destroyer to be stationed at that port. The Flag Officer therefore decided, with the agreement of His Majesty's Ambassador, that the passage should be timed to allow "Amethyst" to reach Nanking a clear twenty-four hours before

  25
  the expiry of the latest Communist ultimatum. Had there been no incident, "Amethyst" would have reached Nanking on April 20. It was in the light of these known facts that the decision was made for "Amethyst" to sail, and this decision was in my opinion correct.
  Thus early on Tuesday, April 19, the frigate H.M.S. "Amethyst" (Lieutenant-Commander Skinner) sailed f r o m Shanghai for Nanking, wearing the White Ensign and the Union Jack and with the Union Jack painted on her hull. When "Amethyst" reached a point on the Yangtse River some sixty miles from Nanking, at about nine o'clock, Chinese time, in the morning of the 20th, she came under heavy fire from batteries on the north bank, suffered considerable damage and casualties and eventually grounded on Rose Island. After this, the captain decided to land about sixty of her crew, including her wounded, who got ashore by swimming or in sampans, being shelled and machine-gunned as they did so. We know that a large proportion have, with Chinese help, arrived at Shanghai.
  Vice - Admiral Madden, the Flag Officer Second in Command Far Eastern Station, ordered the destroyer H.M.S. "Consort" (Commander Robertson) from Nanking to go to "Amethyst's" assistance, and the frigate H.M.S. "Black Swan" (Captain Jay) from Shanghai to Kiang Yin, forty miles down river from the "Amethyst." "Consort" reached "Amethyst" at about three in the afternoon and was immediately heavily engaged. She found the fire too heavy to approach "Amethyst" and therefore passed her at speed down river. She turned two miles below and again closed "Amethyst" to take her in tow. But she again came under such heavy fire that she was obliged to abandon the attempt, although she answered the shore batteries with her full armament and signalled that she had silenced most of the opposition. Half an hour later her signals ceased, though in fact she was making a second attempt to take "Amethyst" in tow, having turned downstream again. This attempt also failed and she sustained further damage and casualties during which her steering was affected. She therefore had to continue downstream out of the firing area.
  Meanwhile, the cruiser H.M.S. "London" (Captain Cazalet), wearing
  26
  the flag of Flag Officer Second in Command, was also proceeding up the Yangtse at best speed. The three ships "London," "Black Swan," and "Consort" met at Kiang Yin at about eight that evening. It was found that "Consort" was extensively damaged; she was ordered to proceed to Shanghai to land her dead and wounded and effect repairs. At about two o'clock in the morning of the 21st, the "Amethyst" succeeded in refloating herself by her own efforts and anchored two miles above Rose Island. She could go no further, as her chart was destroyed. Her hull was holed in several places, her captain severely wounded, her first lieutenant wounded, and her doctor killed. There were only four unwounded officers left, and one telegraphist to carry out all wireless communications.
  Later the same morning the "London" and the "Black Swan" endeavoured to close the "Amethyst," but met with heavy fire causing some casualties. The fire was, of course, returned, but the Flag Officer then decided that it would not be possible to bring the damaged "Amethyst" down river without further serious loss of life in all ships; he therefore ordered the "London" and "Black Swan" to return to Kiang Yin. At Kiang Yin they were fired upon by batteries, and suffered considerable casualties and damage. Both ships afterwards proceeded to Shanghai to land their dead and wounded and to effect repairs. That afternoon a naval and a Royal Air Force doctor, with medical supplies and charts, were flown
  by a Sunderland aircraft of the Royal Air Force to the "Amethyst." Both the aircraft and the "Amethyst" were fired upon. The ship was hit, but the Sunderland managed to transfer the R.A.F. doctor and some medical supplies before being forced to take off. The "Amethyst" then took shelter in a creek.
  During the night of the 21st-22nd, "Amethyst" succeeded in evacuating a further batch of her wounded to a nearby town. After doing so, she moved ten miles up river under cover of darkness, though under rifle fire from the banks, and again anchored; she then completed the landing of all her more seriously wounded, including her captain. I regret to say that this very gallant officer, who

  27
  had insisted on remaining with his ship up to this time, died of his wounds soon after. There remained on board three Royal Navy officers, one Royal Air Force doctor, fifty-two ratings and eight Chinese. At about this time Lieutenant-Commander Kerans, the Assistant Naval Attaché at Nanking, reached the ship and assumed command.
  Another courageous effort to reach "Amethyst" was made by the R.A.F. in a Sunderland on the afternoon of the 22, but the aircraft was driven off by artillery fire without succeeding in making contact. The "Amethyst" then moved a further four miles up river. She was in close touch with the Flag Officer, and after a number of courses had been considered, it was decided that she should remain where she was. Perhaps I may at this point anticipate two questions which may possibly be asked: first, how was it that His Majesty's ships suffered such extensive damage and casualties; and second, why they were not able to silence the opposing batteries and fight their way through. In answer to the first, I would only say that warships are not designed to operate in rivers against massed artillery and infantry sheltered by reeds and mudbanks. The Communist forces appear to have been concentrated in considerable strength and are reported as being lavishly equipped with howitzers, medium artillery and field guns. The above facts also provide much of the answer to the second question, only I would add this. The Flag Officer's policy throughout was designed only to rescue H.M.S. "Amethyst" and to avoid unnecessary casualties. There was no question of a punitive expedition and His Majesty's ships fired only to silence the forces firing against them.
  I will at this point briefly summarise the losses and damage which resulted. The casualties were: H.M.S. "London," 13 killed, 15 wounded; H.M.S. "Consort," 10 killed, 4 seriously wounded H.M.S. "Amethyst," 19 killed, 27 wounded; H.M.S. "Black Swan," 7 wounded. In addition, 12 ratings are still missing. Of the damage to the ships, the "London" suffered the most severely, having been holed repeatedly in her hull and upper works. The damage to the "Consort" and the "Black
  28
  Swan" was less serious. "London" and the "Black Swan" have already completed their emergency repairs. The "Amethyst" suffered severe damage but was repaired by the efforts of her own crew to be capable of a speed of seventeen knots.
  When H.M.S. "Amethyst" was fired upon by Communist forces, His Majesty's Ambassador instructed His Majesty's Consular Officer in charge at Peking to communicate to the highest competent Chinese Communist authority, by whatever means possible, a message informing them of this and seeking the issue of immediate instructions by them to their military commanders along the Yangtse to desist from such firing. A subsequent message emphasised the urgent need of medical attention of the casualties and reiterated the request for instructions to prevent further firing upon these ships of the Royal Navy engaged in peaceful and humanitarian tasks. The local Communist authorities, however, refused to accept the Consul's letters.
  At this time Mr. Edward Youde, a Third Secretary in His Majesty's Foreign Service who has a good knowledge of Chinese, volunteered to try and contact the Communist forces north of Pukou in the hope of reaching some commanding officer with sufficient authority to stop the firing. His Majesty's Ambassador agreed to this attempt, and Mr. Youde passed through the Nationalist lines on the night of April 21. Thanks to his courage and determination, Mr. Youde succeeded in reaching the forward headquarters of the People's Liberation Army in the Pukou area on April 23. He described the situation as he knew it when he left Nanking on April 21, and pointed out to them the peaceful and humanitarian nature of the mission of H.M.S. "Amethyst," and requested that she be allowed to proceed to Nanking or Shanghai without further molestation. Their headquarters took the line that clearance had not been obtained from the People's Liberation Army, and that she had entered the war area. They also complained of heavy casualties incurred by their troops as a result of fire from His Majesty's ships. They refused to admit justification of self-defence. After consulting higher authority, the headquarters stated that in the circumstances they would be prepared to allow the ship

  29
  to proceed to Nanking, but only on condition that she should assist the People's Liberation Army to cross the Yangtse. Such a condition was obviously unacceptable.
  My attention has been drawn to a communiqué broadcast by the Communists which said that on the date in question warships on the Yangtse opened fire to prevent its crossing by Communist forces. It further stated that it was not until the following day that they learned that these ships were not all Chinese but that four British ships were among them. The Communists state that their forces suffered 252 casualties as a result of this firing, and claim that His Majesty's Government have directly participated in the Chinese civil war by firing on Communist positions. These claims are, of course, so far as they relate to His Majesty's Government or the Royal Navy, as fantastic as they are unfounded.
  If there was any initial misunderstanding as to the nationality of H.M.S. "Amethyst." this would have been speedily resolved had the authorities in Peking acted on His Majesty's Ambassador's message. Moreover, had the Communist authorities objected in the past to the movement of British ships on the Yangtse, it was always open to them to raise these through our consular authorities in North China. It is the fact that for reasons best known to themselves the Communists have failed to notify any foreign authority present in areas which they have occupied of the channels through which contact can be maintained, and that they have rejected all communications made to them. In these circumstances, His Majesty's Government can only reserve their position.
  The House will wish to join me in expressing sympathy with the relatives of all those who have been killed or wounded in this action, and in expressing admiration of the courage of all those who took part in it. Five names deserve special tribute. Lieutenant-Commander Skinner, R.N., the captain of the "Amethyst," behaved with the utmost gallantry till he succumbed to his wounds. The first lieutenant, Lieutenant J. C. Weston, refused to leave the "Amethyst," although dangerously wounded, until relieved in command by Lieutenant-Commander Kerans fifty-six
  30
  hours later. Telegraphist J. L. French showed superlative devotion to duty. He was the only telegraphist left in the "Amethyst" after the early hours of April 21; and from then onwards his efforts kept the ship in almost continuous communication with Shanghai. The name should also be mentioned of Flight-Lieutenant K. H. Letford, D.S.O., D.F.C., who landed a Sunderland aircraft under fire to convey the naval and R.A.F. doctors to "Amethyst." The fifth name is that of Mr. Youde, whose one-man mission through the Communist armies I have already mentioned.
  Without a doubt many other cases of bravery and devotion will be revealed when all the facts are known. But we already have ample evidence that the conduct of the whole ship's company of H.M.S. "Amethyst" was beyond all praise, though a considerable proportion were young sailors under fire for the first time. We have had reports of seamen and marines remaining at their task for up to twenty-four hours, though badly wounded, and of men declining to have their wounds treated until cases they considered more urgent had been dealt with. I have heard too that in H.M.S. "London" and "Black Swan," when there was a possibility of volunteers being flown to "Amethyst," there was almost acrimonious rivalry for selection to take on this heroic task.
  I should mention that the United States naval authorities at Shanghai placed their resources unstintingly at our disposal, and the kindness and help of the British communities at Shanghai have been beyond all praise. Finally, the Chinese Nationalist forces in the Chinkiang area were most helpful in providing medical aid and stores which they could ill afford. The House will join with me in expressing our gratitude to all of these. I should like, in concluding this statement, to pay a tribute to the British communities in China, who have shown such steadfast behaviour in the difficult conditions in which they find themselves, and whose decision to remain in China in spite of the uncertainties created by the civil war is in accordance with the best British tradition.
  The House is now in full possession of the facts known to His Majesty's Government, and we shall, of course, continue to keep the House informed of

  31
  developments as they occur. It will be realised that the situation is at present very fluid, but if, at a later stage, there is a general desire for a debate on this matter, I am sure that this can be considered through the usual channels.
  4.15 p.m.
  VISCOUNT SWINTON: My Lords, your Lordships will have awaited with keen anxiety the statement which has just been made by the First Lord. On one thing we can all be agreed—namely, our deep sympathy with the relatives of more than forty officers and men who have lost their lives, and in our admiration and appreciation of every officer and man concerned, either in the ships of His Majesty's Navy or in the aircraft of the Royal Air Force, who have made such gallant endeavours to go to the rescue of the stricken ship. There we can all be at one. We shall certainly have to debate the First Lord's statement at a later stage, in the light of further study and possibly of fuller knowledge, but I am bound at this moment to make some comments and to put some questions to the First Lord—
  LORD STRABOLGI: On a point of order, I think we ought to be quite clear as to our procedure on this Government statement which I understand is open to questions. I did not understand that it is open to a debate. I do not in any way want to stop the noble Viscount putting his remarks, but I think it should also be possible to reply to them.
  VISCOUNT SWINTON: Certainly. My object in making the observations was to elicit a reply. I understand that it has been the traditional procedure in this House, as in another place, that when a statement of cardinal importance is made by His Majesty's Government the Leaders of Parties, and indeed other members of the House should make such observations as they think right and proper. If it were necessary to put myself in order, the matter would be very simple—I could move the adjournment of the debate, and then withdraw the Motion. But perhaps I may now proceed, I think strictly in accordance with precedent, and I am sure with the wishes of all my noble friends, to make one or two comments and to put my questions to the First Lord.
  In a long, but not too long, statement (because we all wanted the facts). we
  32
  have heard from the First Lord a factual account of what happened on the Yangtse River and in Nanking. We have heard about the policy of the Flag Officer on the spot, and the policy of action of His Majesty's Ambassador in Nanking. I waited to hear, but did not hear, what had been the policy of His Majesty's Government, of the Minister of Defence and, indeed, of the First Lord himself in this matter. Here is a situation in which we are not, or should not be, concerned only or mainly with the action of the men on the spot—I speak in the presence of many who like myself have been Service Ministers or Chiefs of Staff. Here was a situation where essentially Ministers and the Government were concerned to give their advice and direction to the men on the spot. It is with the action, or inaction, of His Majesty's Ministers that we are concerned. It must have been plain from the moment that it was known, that great Communist forces, armed with weapons which had been supplied to the Nationalists through years of war, and which had been taken from them, ably led and heavily armed, were advancing upon the whole line of the Yangtse. Quite obviously the attack was going to be on Nanking, to cross the Yangtse and cut off Shanghai.
  My Lords, my first question is: At what moment did His Majesty's Ministers know, or should they have known, that this advance on the Yangtse was going to take place? It was not a surprise move; it was not a question of a sudden ambush. The whole great advance was moving across, first to occupy the bank and so to command the river, which is the greatest waterway of China. When did they first know? In the light of that I ask: What appraisal did His Majesty's Government make of that situation and what instructions as a result of their appreciation did they give? Not only were they the responsible people to give instructions but they were in much the best position to give them. What appraisal did they give to their officers on the spot, either ambassadorial or naval? It was said that there was an armistice or truce. It does not seem to me that that was any concern of His Majesty's Ministers. This was an armistice between the two warring factions in China, upon which, surely, it was extraordinarily unwise of His Majesty's Government to place any

  33
  reliance. The truce might be ended at any moment, and the fighting might break out again.
  Then I ask this. It was known that the Communist armies were advancing upon, and would soon occupy, the whole length of the Yangtse River, and would thus become the responsible people. I am not concerned with the technicalities of what was the recognised Government; here we are dealing with terrible facts of war and fighting, and I believe that we should have been concerned with the question of whether they were people who were likely to put us in peril. If a ship was to be sent up or down the Yangtse, what attempt was made (this is not clear from the statement which the First Lord has made, and of which he was good enough to give me a copy) to approach the Communist leaders and to obtain their assent, or at any rate an undertaking that ships would not be molested if they were sent along the Yangtse?
  Having just heard the statement for the first time, I must apologise for not putting my questions in perfect sequence, but I think they are very relevant questions. I would preface my next question by speaking of the "Amethyst" going up the river. As I understand it, a ship had been kept at Nanking—it was, I believe, a destroyer, the "Consort"—on the chance that it might have to be used to evacuate the seventy British people in that city. That, I think, is right. May I ask why that ship was kept there? Surely, if it was the intention of His Majesty's Government, maybe in agreement with the United States and other Governments, to keep their Ambassador and their staff in Nanking until the Communists were at the gates, and even possibly after the Communists had entered, what was the sense of keeping the "Consort" there? That seems to me a very important question. Surely, it was not the natural or the obvious way to evacuate people from Nanking.
  I am told that aeroplanes have been regularly flying into Nanking. If you wish to evacuate people rapidly, as has been clone in the case of a number of other places, the practical and quick way to get them out is to put them in aeroplanes, not to put them on a destroyer to sail down the Yangtse River with 500,000 Communists entrenched with their bat-
  34
  teries along the banks of that river. I ask why, when the authorities knew of this danger, and knew what was taking place, the "Consort" was kept there. Why was she not sent down the river to Shanghai? If communication had to be maintained, as it had, and if the possibility had to be envisaged of flying out the very limited number of people in Nanking, why was that not left to be carried out by aircraft? That should have been done earlier, I suggest.
  Then I would ask the noble Viscount the First Lord to answer this question specifically. He told us, I think, that at an earlier stage we, the United States and the French, each had a ship at Nanking. But, apparently, we alone retained our ship there.
  VISCOUNT CECIL OF CHELWOOD: I shall be very glad if the noble Viscount can get this clear. It is not at all clear to me at present what was the situation when the "Amethyst" was sent up the river. The "Consort" was, at that time, as I understand it, at Nanking and had been there for some time. The "Amethyst" was sent up to relieve the "Consort." I understood from what my noble friend said just now that the "Consort" was kept there after consultation with the French and the United States authorities, in order to deal with any situation that might arise.
  VISCOUNT SWINTON: That is exactly what I am trying to bring out. It is difficult to follow, but what I understand happened is this. Originally, there were the "Consort," a United States ship of some size and a French ship in Nanking. That is what I understood. But in the critical period the only Allied ship which remained at Nanking was the "Consort"—I am not sure if I am right about that, but that is what I understand. If that is so, it makes it all the more extraordinary that the "Consort" should have been kept there. Then there was apparently a time when the Chinese Government decided to move to Canton—I am not sure what the date was. It is true that a warning was issued about warships in the Yangtse. At what date was that warning given, by whom was it given, and what effect did it have? Presumably it was communicated immediately to His Majesty's Government. What action did they take upon it?

  35
  Then I would ask this. Why was the "Amethyst" sent up? I know that the "Consort" was overdue for relief. As I have said, by all the canons of prudence and common sense the wise thing to do when this danger threatened, it seems to me, would have been not to relieve her by another ship sent up to run the gauntlet of these batteries but to send her down from a place where she could be no possible use, and to rely on aeroplanes. Why was the Amethyst "sent up? And why, if in the face of all these dangers the "Amethyst" and other ships were sent were they sent up without air cover? I think this is a point of vital importance. It is elementary to-day that if ships are sent into a risky position like this, air cover should be provided for them.
  The noble Viscount the First Lord has stated that these ships were not suitable for engaging in hostilities in a river. Everyone knows that you cannot deflect the guns of a cruiser to fire on batteries hidden in the reeds beside a river. That is elementary. But if you are unwise enough to send ships they can be given a good deal of protection by means of aircraft. Why were aircraft not sent for protection purposes in this case? If it be said that there were no aircraft on the spot, then I am bound to say that that cannot be a responsibility of the men on the spot. That is the responsibility of His Majesty's Government.
  LORD AMMON: I am sorry to interrupt the noble Viscount, but the Royal Commission is now due and the Commons are waiting.
  VISCOUNT SWINTON: I will finish what I have to say in a few moments. I was asking why were not aircraft available for that purpose. Finally, I would say this. These are questions which I am sure the First Lord will answer now, but I would ask him again, as I did at the beginning, when did His Majesty's Government, in the Ministry of Defence, in the Admiralty, in the Cabinet, consider this matter? What action did they take? What instructions did they give to the men on the spot in what was essentially the responsibility of His Majesty's Ministers?

  AGRICULTURAL WAGES (SCOTLAND) BILL [H.L.]
  Returned from the Commons, agreed to.
  House adjourned during pleasure.
  House resumed.

  ROYAL COMMISSION
  4.30 p.m.
  The following Bills received the Royal Assent:

  Juries,

  Army and Air Force (Annual),

  Consular Conventions,

  Agricultural Wages (Scotland),

  Clyde Navigation (Superannuation) Order, Confirmation,

  Wandsworth and District Gas,

  Hurst Park Race Course.

  House adjourned during pleasure.
  House resumed.

  THE YANGTSE INCIDENT
  4.46 p.m.
  Debate resumed.
  THE EARL OF PERTH: My Lords, we on these Benches would also wish to express our extreme admiration for the valour and fortitude shown by the officers and men of the four ships of His Majesty's Navy which have recently been engaged in these troubles on the Yangtse. We would also wish to express our deepest sympathy with the relatives of those who have fallen, doing their duty, as the Navy always does. I very much hope that we shall not have a debate on this subject this afternoon; I do not think we have sufficient information. I do not wish to enter into controversy with the noble Viscount who leads the Opposition, although there are some things he said which I cannot possibly accept. To-day I would like to confine myself to two questions which I think are legitimate. I hope the noble Lord, Lord Strabolgi, will not think I am entering into a debate. The noble Viscount the First Lord in his statement said that in the light of certain known facts a decision was made for the "Amethyst" to sail. I would like to ask him by whom that decision was taken. I

  37
  think that is a legitimate point to make. The noble Viscount said that, in his view, the decision was a correct one. I do not think we are in a position to-day to judge whether it was correct or not. It is for that purpose that I would ask him whether he will not consent to publish a short White Paper giving the exchange of views and information between what I may call the regional authorities—namely, His Majesty's Ambassador and the Commander-in-Chief of the Station—and His Majesty's Government, so that we can arrive at our own conclusion as to where the ultimate responsibility lies. Having obtained that information, we could then proceed to hold a full debate.
  LORD STRABOLGI: My Lords, I could not agree more with what has just fallen from the lips of the noble Earl. The whole of this procedure is grossly disorderly. The statement made by my noble friend the First Lord of the Admiralty is subject to questions, like any other Parliamentary statement, but we have embarked on what are really the beginnings of a full-dress debate. I thought the speech of the noble Viscount, Lord Swinton, was not only out of order but thoroughly mischievous. I want to say that as plainly as I can. As the noble Earl, Lord Perth, has said, we are not in possession of the whole facts my noble friend the First Lord is not in possession of the whole facts; nobody can be. It is a most confused and delicate situation out there. At least, we should have reserved judgment until we had the whole facts before us.
  I do want to say this, however, disorderly though I may be. Our warships have been sailing the Yangtse Kiang for generations. I have myself sailed through Chunking on more than one occasion. Our warships have flown the White Ensign on the Yangtse Kiang for the preservation of order and the succour of our nationals in need for over fifty years. It is perfectly true that, by recent arrange-merits, we always notify the appropriate authorities when our ships are sailing up there. This apparently was done, and H.M.S. "Amethyst" had every right to proceed to Nanking, and every right to come back again when she had done her work, as had the other warships. This act of firing upon His Majesty's ships was either a confusion or a mistake—as I hope was the case, because they may
  38
  have thought she was a Nationalist warship flying other colours which is always possible in war—or it was deliberate. If it was deliberate, a most serious situation arises. We cannot afford to have our Flag affronted and our seamen murdered in this way, especially in Asia, without taking the most serious notice of it and doing our utmost to obtain redress, which I am confident His Majesty's Government will do.
  In those circumstances, this is not the time for sniping at His Majesty's Government, as the acting Leader of the Opposition has done to-day, and asking stupid questions, if he will allow me to say so, about air cover. If he knows the merest facts about the situation, he knows perfectly well that air cover is not only not available—
  VISCOUNT SWINTON: Why not?
  LORD STRABOLGI: Is it suggested that we should send a punitive expedition up the river? That is what it amounts to.
  VISCOUNT SWINTON: My suggestion was that as we knew that this situation was likely to develop three months ago, we ought to have had aircraft in support.
  LORD STRABOLGI: That, indeed, is a case of being wise after the event! The strength of the "Amethyst's" position was that she was proceeding legitimately on her proper occasions on a peaceful mission, and to have sent air cover would have been provocative and asking for trouble. Naturally, one side or the other might suppose that it was a hostile expedition aiding their enemies. We would have put ourselves out of court at once. The whole idea is utterly fantastic. This is a part of the river where the banks narrow and which has always been known as highly dangerous. We had a similar decision to take nearly fifty years ago at the time of the Boxer Rebellion. We did not know the attitude of the Imperial troops and Government up river, but we had to send warships to protect our people at Nanking and Hankow, and we sent them up at the risk of being fired upon. I was on the station at the time, and I remember the difficult decisions which had to be taken. The ships were not fired upon, and they carried out their mission. They undoubtedly saved a great deal of suffering

  39
  by their presence. No doubt if the "Amethyst" had got through she would have saved a great deal of the confusion and trouble which has since taken place at Nanking with the fall of the city.
  In view of the most intricate situation that has arisen on the Yangtse Kiang, with a recognised Government on the one bank and an unrecognised Government on the other, with whom we have, with the best will in the world, been unable to reach an understanding, His Majesty's Government desires a little support and sympathy, and I had hoped to hear a little more support and sympathy also for the Flag Officer on the Station. He had to make difficult decisions, and I prefer to trust his judgment rather than what I believe are the unpremeditated criticisms of the noble Viscount. As the noble Earl, Lord Perth, has said, we must of course await the full facts; but, whatever comes of this, there has been a grievous loss of life. We all sympathise with the relatives of the officers and men who have suffered. The Navy has carried out its very ancient and honourable traditions in this matter and deserves every support. Whatever happens in the end, we must demand full redress for this outrage—for there is no other word to describe it—for the insult to our Flag and to our warships.
  4.55 p.m.
  EARL BEATTY: My Lords, I do not wish to say anything at any great length, but I should like to ask the First Lord one question. In view of the fact that one of the greatest lessons of the war was that a fleet, to be effective, had to be a composite fleet—which includes aircraft carriers as well as cruisers and destroyers—when was the decision made that an aircraft carrier should be withdrawn from what is quite an important fleet, the Far Eastern Fleet, and why was that decision ever taken? Does the noble Viscount not consider that, if an aircraft carrier had been on the spot, it might have been easier to extricate the "Amethyst" from the position she was in? It is all very well for the noble Lord to say it would be punitive to do it, but we did send some ships to attempt to rescue them, and if we had had aircraft I feel that the task could have been accomplished more easily than by
  40
  placing our ships in that dangerous position. If the noble Viscount, Lord Hall, agrees with that assumption, why are we not now taking steps to send an aircraft carrier out there, in case any future incident should arise, perhaps around Hong Kong? Let us try to look ahead and get an aircraft carrier there, rather than send a cruiser, which I understand from the Press is being sent to reinforce the Fleet.
  4.57 p.m.
  VISCOUNT HALL: My Lords, as there is no Motion before the House, I must ask leave of your Lordships to reply to some of the questions which have been put, although I am not going to follow the very bad example of the noble Viscount, Lord Swinton, in debating this matter. Indeed, a debate on the statement was never visualised, and it would be entirely at variance with whatever Standing Orders there may be, or, if not Standing Orders, with the tradition of the House. Indeed, the noble Viscount himself in his opening remarks said that we must have a debate at a later stage. He then went on to initiate a debate. I am not going to be drawn, but I would like to reply to some of the questions which he has put. In the first place, he mentioned in his speech that the statement did not contain any policy of His Majesty's Government, only the policy of the Minister of Defence and the First Lord of the Admiralty.
  VISCOUNT SWINTON: With great respect, may I say that if the noble Viscount reads the OFFICIAL REPORT to-morrow, he will find that I said the statement contains what was done by the Flag Officer on the spot, but no statement of what was the policy of His Majesty's Government, the Minister of Defence or the First Lord of the Admiralty.
  VISCOUNT HALL: That makes little difference to what I am going to say, because it is evident that the noble Viscount did not read even the second paragraph of my statement. Indeed, he could not have listened very attentively to what I said. In the statement I said—and the House will pardon my quoting it again—
  "In view of the considerable British interests in China and of the presence of large British communities, His Majesty's Government decided some months ago that His Majesty's Ambassador and His Majesty's consular officers

  41
  in China should remain at their posts, and this was announced by my right honourable friend the Foreign Secretary in another place on December 9. We were not alone in the decision.…"
  That was the policy which was laid down by His Majesty's Government: that even if Nanking were taken by the Communists, His Majesty's Ambassador should remain, as he is remaining, and that the consular officers should also remain where they have been, and still are, in parts of the territory which have been taken by the Communists. One would imagine from the speech of the noble Viscount that we were at war with the Communists in China. We are not at war with them.
  In reply to the question put by the noble Viscount, Lord Cecil, I would say that had "Amethyst" reached Nanking she would have been there to relieve the "Consort" and would have stayed at Nanking. That was the policy of His Majesty's Government. In reply to the question of the noble Earl, Lord Perth, as to who took the decision to which I referred in my statement, I may say that consultations were held between His Majesty's Ambassador at Nanking and the Flag Officer Second in Command, and their decision was based upon the policy of His Majesty's Government, and upon instructions that ships were to proceed, as they had been proceeding from Shanghai to Nanking during this difficult period without being molested. As one noble Lord rightly said, we have not the whole of the facts before us. There are certain facts that have been brought to our notice today, concerning which further investigation will have to take place. We ought not to make things more difficult than they are at the present time, when the interests of thousands of British people still in China have to be considered. These people, or a large number of them, are in places which are under the control of the Communist Government; and speeches such as that made by the noble Viscount, Lord Swinton, are liable to make the position of these people more difficult than it is at present.
  THE EARL OF PERTH: I hope the noble Viscount does not think that I have been guilty of that.
  VISCOUNT HALL: No, I should like to express appreciation of the most helpful
  42
  remarks of the noble Earl, made as they are out of experience and knowledge which he has of situations perhaps not always as difficult as this but still difficult. We appreciate the noble Earl's wise counsel. The situation in China is at present most fluid and as I mentioned in the course of my statement, this matter will be the occasion of a debate if necessary; but at the present Lime sufficient facts are not in the hands of His Majesty's Government.
  I wish to conclude by expressing deepest sympathy with the families and relatives of the men who have lost their lives, and with the wounded and their relatives. I wish also to acknowledge the helpful remarks of the noble Earl, Lord Perth, and the noble Lord, Lord Strabolgi, and to thank them for not making a difficult situation more difficult than it is at present.

  COAL INDUSTRY BILL
  5.3 p.m.
  Debate on the Motion for the Second Reading resumed.
  LORD RENNELL: My Lords, it falls upon me to resume the debate on the coal industry with which this afternoon's proceedings in this House started. Had the noble Lord, Lord Macdonald, who introduced the Second Reacting of this Bill been in his place, I should have liked to say that I do not think the Bill very worthy of the talent he displayed in moving the Second Reading. On the noble Lord's own admission, the Bill appears to be a very small and rather indifferent object. If the noble Lord in due course returns to his place perhaps I may, with your Lordships' permission, repeat some of the remarks which I am about to make.
  I feel sure that your Lordships will give this Bill the Second Reading asked for, and will go on to discuss some of the clauses in greater detail on the Committee stage. My own personal inclination, I am afraid, would be not to accept the Bill at all, on account of the very trumpery nature of the amendments to the Coal Industry Nationalisation Act which it seeks to introduce. It is not that we on these Benches do not feel that an Amending Bill is necessary—indeed it would be surprising to any of us if a

  43
  major Act nationalising an industry such as the coal industry did not already stand in need of amendment to a much greater extent than is contained in this Coal Industry Bill. What we feel is that the amendments now proposed should have been allowed to stand over, pending the major amendments which must in-inevitably come in dealing with the organisation of the Coal Board and the provincial bodies which depend on that Board, rather than that there should have been introduced a Bill which, by general admission, is only a stopgap and is, in fact, as the noble Lord, Lord Macdonald, himself said, a niggling piece of legislation.
  At best, I think all that can be said about the Bill is that Part II is necessary. Of Part I, I think all that can properly be said is that two of the four clauses to which the noble Lord referred seek to do something which cannot redound to the credit of this Government and could not to any other, for they seek to give the Coal Board and the Government power to break contracts. That is what Clauses 3 and 4 amount to. The matters with which they deal were considered at the time of the original Act, and all that we have here, as a contribution to the better ordering of the coal industry, is a Bill containing two clauses seeking to give power to break contracts. This, surely, is not very creditable.
  So far as the other two clauses are concerned, the original conception of a Coal Board, or of the Board of any other nationalised industry—a Board which is composed of functional members with a functional channel of communication from a person on the regional to a person on the area organisation—is one which in business is fundamentally wrong, and which has always been found to be wrong. After all, we need not look any further afield than the structure of Cabinet government in this country to see that this organisation is wholly divorced from our tradition. The members of a Cabinet are responsible for what the Government do—just as the board of a big corporation are responsible for what that corporation does. I believe this set-up to be only a palliative, a confession of weakness and error in the past set-up of the Coal Board. We on this side of the House believe it to be a confession of failure.
  44
  Clause 2, which deals with an extension of certain powers—notably the power for the Coal Board to be represented abroad—does not, in itself, seem to me to be a particularly mischievous proposal—though, on the wording of the clause, it could become mischievous if the Coal Board tried to compete with other people who know foreign bunkering and foreign trade better than they are likely to do. But, in the main, as I understand, it is an attempt to enable the National Coal Board to be represented abroad, as for instance the Rheinish-Westphalian Coal Board was represented in one foreign place, and as the Polish Export Coal institution is represented in foreign countries. As such, it does not seem to me to be per se mischievous. The main criticism is that this was a subject which was debated and was turned down when the Coal Industry Nationalisation Act was introduced. This, therefore, represents an attempted revision of what was then admittedly the will of Parliament.
  As such it seems to me to need a little more explanation of the reasons and purports for which the powers are sought than were given us by the noble Lord, Lord Macdonald of Gwaenysgor, who moved the Second Reading. Indeed, except in so far as he talked about the composition of the Board, the impression that I derived from his speech was that he sought to justify the absence of a greater amendment of the 1946 Act rather than the inclusion of the four particular clauses in Part I of this Bill. He did not give us—or, if he did, I am afraid I did not appreciate it—any statement or explanation of precisely what the Coal Board or the Government wish to do, or would wish to do if the powers under Clause 2 were extended, as it has been asked that they should be.
  On the other two clauses, I can only repeat what I said before the noble Lord came into the Chamber. In what I think he himself described as a "niggling Bill," it seems to me a pity to introduce into two out of four clauses powers to break contracts. That in itself is undesirable. It must lead to a good deal of criticism, notably where the termination of a contract involving pension and superannuation rights is concerned. It does not taste or look nice, and I am sure that it will not smell nice. Of the Bill as a whole, therefore, I can say only this. I

  45
  regret that the amendments now proposed were not held over until the major amendments which will be required in the Coal Act come to be considered and are introduced. I have heard of no plea of urgency for any of the four amendments contained in Part I. As for Part II, surely there also it would have been better to hold over the amendment necessary in the 1911 Act to some period when the whole conception of the 1911 Act could be brought into greater relation to present-day requirements.
  5.14 p.m.
  LORD HAWKE: My Lords, may I first pay a humble tribute to the delightful maiden speech we heard from the noble Lord, Lord Macdonald of Gwaenysgor. I have seldom heard a better one in this House. I have no doubt that he will make many more and remain a target for our shafts for a long time. It was a delightful mixture of modesty and boldness. I think he will agree that anybody who tries to interpret to this House "expectation of accruer" is a bold man. I also think that anybody who shows such touching faith in the capabilities of the Coal Board is also a man of some degree of boldness. Members of the Party opposite are apt to think that we on this side of the House rejoice in the difficulties of the Coal Board. Of course, nothing could be farther from the truth. Coal is the only raw material of any consequence that we have in this country and we hate to see it mishandled, as it is being mishandled now. In my youth the miner was the aristocrat of British labour. He and his whippet lived on the fat of the land and, if he had a good manager as a wife, his family did not do too badly either. He went down the pit when he liked, and when he wanted to go to cricket or to the races he stayed out without any accusations of absenteeism. When he wanted to get some "brass" to buy the "missus" a piano or a fur coat, he worked very hard. He was a free man.
  Between the wars his position deteriorated. His leaders told him it was a result of the hard-hearted, wicked capitalists, but of course it is nothing of the sort. The real villains of the piece are the innocent people who saved their money, dug holes in the stony deserts of the world and in their innocence thought they were conferring a benefit on mankind by producing a cheaper and
  46
  cleaner fuel In fact, coal was a contracting industry and the miners' leaders, instead of co-operating with the employers to see how production could be increased and the redundancy managed in an orderly fashion, merely went round preaching hate and nationalisation. Now they have nationalisation, what of it? The miner has exchanged boss for board. The worst bosses die, but boards go on for ever and he is no forrarder. He sees a horde of officials going round in cars, which they park at the pithead at places where he ought to be able to park his car.
  How did this trouble start? Private capitalist enterprise was managed by
  technicians responsible to directors, in turn responsible to the proprietors, the shareholders. The directors, generally living on or near the spot, men of local as well as wide knowledge, were responsible for policy decisions, but, above all, they had the residual function of sacking and appointing the management. The former Minister of Fuel and Power knew nothing whatsoever of the functions or character of directors, save as "Aunt Sallies" for his week-end speeches. When he was faced with the task of producing this new State organisation, he determined that nothing which smacked of a director in any shape or form should play any part in it. As a result, he inevitably had a tendency towards centralisation. This was clinched when he called in a most eminent civil servant, a master of centralisation, to help design the machinery. That appointment at first sight might be thought sensible. What organisation is of such a size as to parallel this coal monopoly? Surely, only that of one of the Armed Services. Those Services had just won a great war, and it was asked, why not reproduce their organisation for the coal monopoly? That was superficially admirable but, on second thoughts, absolutely erroneous, because the peace-time organisation of the Forces is designed purely to stop action; it is to stop the Minister being plagued in Parliament about Private Blogg's pay and allowances. As soon as war starts, freedom has to be given to the commander in the field to override all the rules of the system, and that is how we managed to win the war.
  The coal monopoly has precisely the same objectives; it has positive objec-

  47
  tives. It has to dig more coal, above all to produce cheaper coal and cleaner coal. Therefore, if it is to do any good the responsibility must be passed right down the line to the commander in the field—in this case the pit manager or the area manager. He must have complete authority over all his troops and, what is more, there must be no by-passing. Some of his subordinates must not receive their commands from divisions or areas or Hobart House behind his back. Unless he has complete power, the whole organisation is hopeless. An organisation based on the Civil Service, then, is obviously quite wrong for this great monopoly, and yet a civil servant who could have been experienced only in such an organisation was the man called in to set it up. So the monopoly started off on the wrong, foot. The Minister knows it is wrong. But he does not need this Bill to put it right—he can sack the whole Coal Board to-morrow if he wants to; he has the power under the 1946 Act.
  Clause 1 in this Bill merely tinkers at the thing. This mishandling has imposed a heavy burden on the community. Coal is virtually three times its pre-war price and much dirtier. Moreover, to keep it down to that price there is an export cess of about £1 a ton in addition. No wonder foreign countries ask that their sterling should be convertible, or try to pay us out in meat for what we take out of them in coal. That is the burden which lies heavy upon us at the moment. Clause 2 I believe can throw a serious burden on our diplomacy in the future. Once upon a time I read the Historical Tripos at Cambridge, and amongst the subjects was International Law, a subject I found rather uninteresting, but in the outcome I was lucky for I had the stock question, the subject of belligerent rights under a submarine blockade. Suppose those examiners could have dreamed that a British Government would not only set up a coal monopoly, but would give that monopoly power to extend its operations beyond the seas. What wonderful scope for questions in the field of international law that would raise; what permutations and combinations—and what complications! It is the Foreign Office who will have to get us out of those complications. I wonder if they were consulted when this Bill was drafted. I very much doubt it. The tendency of State monopoly
  48
  is always to cast covetous eyes on any profitable ancillary enterprise which is being carried on by private individuals—rather like the child who rushes to pick up the lump of snow. State monopoly hopes to bring the profit of the ancillary in to redress its burden of loss, but, like the child, once it gets that profit into its hands, it will find it will melt away.
  Time is short, and Clauses 3 and 4 will obviously be dealt with more suitably on Committee. But there is a point which has not been included in the Bill, which seems to be rather more important than some of the things in the Bill—namely, the question of workmen's compensation. The National Coal Board have taken over the administration of the liabilities for workmen's compensation of the colliery companies, but they cannot take over the legal liability without some statutory authority, and until they do so the colliery mutual associations cannot go into liquidation. Therefore, I suggest to His Majesty's Government that perhaps it would be advisable to draft and introduce something to that end on the Committee stage; otherwise I do not see what are the real objects of the Bill. The Minister has the power to re-organise the entire Coal Board tomorrow without this Bill. With the examples of his colleagues before him, I should have thought an astute young man like the Minister would at all costs have avoided extending the monopoly beyond our shores.
  I should have thought that the long-term contracts under Clause 3 could have
  been honourably dealt with by some perfectly legal process. As for Clause 4, I know the Minister received a sound education in moral principles up to the age of 18½. What has happened to him since then I do not know. Probably he has not read the clause. The real answer is that the Minister and the Ministry have bitten off more than they can chew. They have got coal, electricity and gas on their plates and they have lost the power and the time to think. It has been said that too much government is the enemy of good government, and I only hope that that will not be the epitaph and the doom of democracy in this country.
  5.27 p.m.
  LORD ROCHDALE: My Lords, I have only one very general point that I want to make and I will endeavour to

  49
  be as brief as I possibly can. We cannot get away from the fact that there are far too many rumours, doubts and misgivings as to what is going on within the coal industry and what is going on with regard to the service that that industry is giving to industry in general in this country. At any rate, I think it would be fair to say that the average person who thinks about these things cannot feel at ease in his mind as regards the present set-up. I do not in any way want to be unfair about an organisation which may well be said to be still in its youth and finding its feet nor, certainly, do I want to be unfair to individual members of the National Coal Board who, after all, have tremendous problems to tackle and also have very onerous responsibilities to the country as a whole. But I think it is fair to say that there are ominous signs, and those ominous signs and comments that one hears often come from the most unexpected quarters.
  We find important members of the National Coal Board resigning we find that the industry is at pains to make a financial success until the price of coal has been raised to a level which must inevitably be an embarrassment to industry as a whole, more particularly so when we find increasing competition from other coal exporting countries such as Poland, the United States of America and the Ruhr. In debates, we have been told that the absolute minimum targets that have been set are so-and-so. Yet we find that these targets are never reached. On the subject of the quality of coal, a good deal is still said, but I personally am inclined to think that there is less justification now for criticism than there was formerly. The information which I have is that the quality of coal is improving.
  Perhaps more important than any of these factors is the point that of the targets that have so far been mentioned for recruiting for the industry not one, we are given to understand, has yet been reached. That is a most important matter. Again, I do not wish in any way to be unfair, but in view of all these misgivings, which I think are fairly general throughout the country, the least that we could expect before any further legislation was put before Parliament, and certainly before any further powers were asked for, was that we
  50
  should be given a full and frank disclosure of the position of the industry to-day. In asking for that, I am not by any means anxious to hear only of what is wrong. I should be very glad—indeed, I should be delighted—to hear what grounds exist for optimism. There may well be such grounds, just as there may be some matters which would warrant serious concern.
  It may be argued, in reply to that, that we have the Report of the Burrows Committee. But the Report which we have received appears to me to be very attenuated, and certainly the recommendations made do not appear to be always substantiated by the reasons given for the various suggestions which are put forward. I am not asking that there should be anything in the nature of interference with the executive day-to-day responsibility of the Coal Board, and certainly I do not wish in any way to try to make Party political capital out of this matter. We are all far too deeply concerned with the coal industry, which has to meet such a vital need of the country as a whole. When I say that, of course, I include the welfare of all those, from top to bottom of its
  organisation, who work within the industry. It is a vital industry, but whilst those responsible for running it might in certain circumstances feel justified in keeping the public largely in the dark as to what they are doing, I feel that that is not good enough when we are asked to agree to further powers such as are set out in this measure.
  What does the Bill say? Does it in any way do anything, or have the debates which have arisen upon it done anything, to relieve our misgivings? First, let us take Clause 1, concerning which a good deal has already been said this afternoon. It is true that that clause arises as the result of one of the recommendations of the Burrows Committee. I have no doubt that a Committee with such distinguished membership could not but feel they had good reasons for that recommendation, but surely only in relation to all the other recommendations that they put forward in their Report. I cannot possibly conceive that, by itself, the one recommendation that is made use of in Clause 1 could be regarded in any way as fundamental.
  Turning to Clause 2, we have here an immense subject dealt with in a very

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  small clause. In moving the Second Reading of the Bill this afternoon, the Minister gave us no reasons whatever why the new provisions in this clause were required. I can well imagine that there may be some instances where the National Coal Board feel slightly embarrassed because their activities are limited strictly to this country. But is it really necessary, in order to meet those cases, to have a clause of this nature with such unlimited implications as obviously there are in it? I do not think that I should be far wrong if I were to suggest that, as the result of the experience gained so far in this country with State trading, the country as a whole realises that there are very definite dangers inherent in such trading, particularly in peace time. It may have been all right in certain circumstances in war, but in peace time there are inherent dangers in it. This clause opens the door to unlimited opportunities for State trading, and the Minister has given us no information as to how it is intended that the new powers are to be used. It may be that he intends to use them only to a limited extent. All one can say, if that is the case, is: Then why ask for such unlimited powers? Surely, if a sound case can be made out for some additional power here or there it would be the easiest thing—as one noble Lord has already said—to come to Parliament and say: "We want to do this specific thing, and we want powers to enable us to do it." But to ask for unlimited powers such as are included in Clause 2 is, to my mind, definitely dangerous.
  Other speakers have dealt with Clauses 3 and 4, and I do not propose to say anything about them. I would, however, like to make one reference to Part II of the Bill. The matters dealt with there, in common with all matters that affect the safety of any industry, are clearly of great importance and provisions to that end should be welcomed. But this matter of safety in coal mines is a technical matter on which I am not qualified to speak, and I do not propose to do so. May I just say that I believe that His Majesty's Government, knowing—at least, I assume they know—that Part I of this Bill must inevitably be highly controversial would have been well advised, if only as an earnest of their good intentions, to
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  introduce Part II as an entirely separate measure? I feel strongly about that. I think the Government have made a great mistake in not following that line.
  At the beginning of my remarks, I said that I had only one general point to make, and I now come back to it. We are all deeply concerned with this industry. However it is organised, we are all intent that it should thrive. We have many misgivings about present arrangements. Some of those misgivings may be justified; some may have arisen simply by reason of the fact that we are not given sufficient information, and they may be misplaced. This Bill, and the discussions which have taken place upon it, have done nothing to remove those misgivings. If only we could be told what the position really is, whether there really is ground for some optimism or whether in other directions the misgivings which we feel are justified, then I personally should feel much happier about accepting the Bill as it is.
  5.40 p.m.
  LORD CLYDESMUIR: The noble Lord who moved the Second Reading of this Bill in a happy and persuasive speech, gave it the best launching it could have had. In view of his great knowledge of the coal industry, his interventions in our debates will always be welcome in this House. Perhaps we may hope that at some date not very far ahead he may be entrusted with another measure designed to deal more radically with some of the difficulties which have been discussed by your Lordships to-day. Be that as it may, I should like to add my tribute to those of other noble Lords and to say how much we have enjoyed the noble Lord's speech to-day.
  In another place this Bill was described by the Minister as "a good, simple
  little Bill." Little it is, but I do not think your Lordships would agree that it is altogther simple, or altogether good. Though the Bill is little, the subject is an immense one. We could discuss few more important subjects than the coal industry. I think it would be right to say that no more valuable contribution could be made to our country's progress at the present time than that the coal target set out by the Government should be attained. The Economic Survey for 1948 says:

  53
  "The first object must be to produce at least 200,000,000 tons of coal, and this must be regarded as an absolute minimum."
  As your Lordships know, production in 1948 was 3,000,000 tons below that target, and I feel we must all try to contribute in a helpful spirit towards any suggestions that may be valuable in bridging that gap.
  As the noble Lord, Lord Hawke, has said, coal is our greatest raw material, the basis of many of our industries. In former times it was the most valuable export we had. It is nationalised property. Nationalisation was carried out by another
  Government. As a junior Minister, I remember the long discussions and adjustments of the nationalisation of the coal royalties. The industry is worked now by a nationalised organisation. It is therefore right and proper that your Lordships should take this opportunity to discuss in a constructive spirit whether all is well with the industry and, if not, how far this Bill goes to meet any defect. Before proceeding to say a few words on the points of the Bill which are to some extent controversial and have been criticised this afternoon, I should like to give a warm welcome to Part II, which deals with safety. The measures here proposed are wise and timely, and it would be the desire of all your Lordships that they should be successful in further safeguarding the lives and the health of the miners. In that connection, I particularly welcome the proposal that deputies and other higher production officials should submit to statutory examinations. I think that is a sound proposal. My only comment on Part II is that the time may well have arrived when there should be a new Coal Mines Act, involving a thorough overhaul of the law in the light of changing conditions and technique since 1911. This point was fully dealt with by my noble friend Lord Swinton, and I shall not elaborate it. This was said also in another place, both by a former Minister and by the present Minister of Fuel and Power. It is not a matter of dispute. I hope the time may come when such a Bill will be brought forward. I should be happy if it were brought forward by the noble Lord, Lord Macdonald.
  Part I of the Bill has been subjected to criticism. As regards Clause 1, it is generally agreed by all sides that the industry is suffering from over-centralisa
  54
  tion and too much remote control on the part of the National Coal Board. The remedies are not immediately obvious, although some valuable suggestions have been made in the course of the debate. Whatever the merits of the schemes put forward, and I shall not set them out again, one thing is clear—namely, that the proposals in the first clause, though in the right direction, are not in themselves adequate to change the state of affairs. The three new part-time members of the Board would need to perform whole-time miracles. It would be better to lead the Board away from this over-functionalised tendency and put it to the work for which it was really intended—to direct policy.
  It is true that without fresh legislation the National Coal Board can reorganise itself entirely to meet some of the troubles apparently present. I should have liked more evidence that the Minister appreciated the admitted difficulties from which the National Coal Board suffer, and which in the light of experience they may themselves be able to remedy. There is general agreement that their policy should be decided at the head, but that administration in the highest degree possible should be conducted in the area or at the pit. The noble Viscount, Lord Swinton, has pointed out the very considerable increase of the non-productive staff in the industry. These are early days yet in nationalisation, and we are learning lessons as we go along—but we must be sure we are, in fact, learning them. I hope it will not be long before the Government make some definite moves as the result of these lessons.
  To my mind, Clause 2 contains the seeds of future difficulty. The Government have striven to make the case that they must have powers to compete with other countries which have their own selling agencies. I hold the view, however, that the public, as owners, ought to be allowed to scrutinise carefully the new functions which the Board propose to undertake, because there are many snags to be encountered in the new wide field of selling coal abroad. The noble Lord, Lord Rennell, seemed to argue that there was substance in the Government's view that they ought to be able to establish their own agency and instanced the case of the Rheinish-Westphalian Coal Syndicate. I would remind your Lordships that that syndicate, which was

  55
  responsible for selling Ruhr coal in foreign markets, was closed down by the British Military Government in October, 1945, and the reason they gave at that time was that the syndicate represented an excessive concentration of economic power. That might be right or wrong, but it has a lesson for us; and it is that lesson that I should like to point to now. There will be many snags ahead. For example, in many countries politics enter much more closely into commerce than in this country, and when our Government become an export agency, is there not a real danger that countries which do not like our democratic way of life, our methods and our Government—I am not speaking in any Party sense but in a much wider sense—would seek to retaliate by not buying our coal? That is a real danger, and one which I hope the Government have fully visualised in entering this new field.
  Several noble Lords have referred to the complicated question of bunkering and the interrelation of the coal export trade with invisible exports, an expert field into which the Government are venturing, I hope, with sufficient knowledge and consideration. This is a field which has been exploited and in which the technique has been built up over many years by people who have given much study to it. It has been agreed that, before extending their activities over such a wide field as this clause envisages, it would have been better if the National Coal Board had gained more experience in their own field of producing coal. We have pointed out where the dangers lie. While the Government will undoubtedly go their own way, I hope they will watch for these dangers.
  I come to Clause 3, which deals with the termination of contracts. If this clause struck only at the peculiar and unreasonable contract, I should not feel I could oppose it; but it goes much further than that. As my noble friend Lord Swinton pointed out—and I would like to enlarge upon it a little—there are many special contracts which are not unreasonable. For example, it was common practice in other days for a firm to contract for specific grades of coal from a specific area, in order, say, to operate their steam-producing plant to the best possible advantage, and to run it most economically. To-day the same firms are
  56
  making complaints that they are unable to get those precise types of coal, that their plant has to run less economically and requires attention and repair. That type of contract does not seem to me to be unreasonable. Is it really intended that all such contracts should be determined, or should run the risk of being determined? I would like to reinforce the point of my noble friend Lord Swinton, and I think of Lord Rochdale, that there is a strong case for the right of appeal and arbitration on the question of whether, in a particular case, the National Coal Board are warranted in exercising the power given by this clause—that is to say, that there should be arbitration not only on the amount of compensation but on whether a particular case is the type of case which this clause should cover. We attach great importance to this, and we shall return to it in Committee.
  Clause 4 has also come in for some criticism. I am sure your Lordships will agree that there is no intention of committing anything approaching an act of bad faith in respect of former employees. I suggest that the point requires further examination in Committee, to ensure that there is not a breach of such understanding, for a breach of such understanding would be unhappy and would have results far outside this industry. Your Lordships will have noticed that there is little public interest in this Bill. It has been described as a small and simple Bill and, therefore, possibly the public have not shown much interest in it. But that is not to say that the country is not very much alive to the importance of this great industry, and to the importance of reaching our production target. I have just been reading a publication which I obtained in the Printed Paper Office today. It is a statistical publication issued by the National Coal Board giving tables of comparable figures covering a number of years. There are some figures to encourage us, and there are others to give us serious food for thought. I commend it to your Lordships for study, and perhaps on the Committee stage we may hear more about it, because some of the figures may be valuable to us in our considerations. Do not be put off by the fact that on the front it says, "April 1, 1949"! The publication gives a plain statement of figures which may be of some value to us.

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  In another place it was claimed by more than one speaker that since the
  nationalisation of the industry there has been a better spirit abroad among the workers. Whether or not that is the case I do not profess to say, but without reservation we must all hope that it is so. We would all wish that there should be a good spirit throughout the industry. But one thing cannot be in dispute—namely, that the workers in this industry are entitled to have the best possible administrative machine at the top. It is because I do not feel that this Bill goes far to provide such a machine that I have my doubts about it. So far as it does progress in that direction, we welcome it; where its shortcomings lie, we have endeavoured to point them out.
  5.53 p.m.
  LORD MACDONALD OF GWAENYSGOR: My Lords, in a very brief reply—I feel that many of the questions raised can be better dealt with on the Committee stage—I would like to thank noble Lords who have made so many kind personal references. They have differentiated between the person who moved the Second Reading and the contents of the Bill. To take the Bill clause by clause, all the points were made in the speech of the noble Viscount, Lord Swinton, and have been more or less underlined by subsequent speakers. Lord Swinton paid a high tribute both to Sir Charles Reid and to Colonel Lancaster. Knowing both those gentlemen, I would agree with his tribute. It is usual, when we are quoting, to give a standard to the authority we are quoting. In some respects I think the approach of both those gentlemen to the industry is the right one, but I am not too sure about that on the question of the abolition of the regions.
  I had the privilege of being Regional Controller, under the Ministry of Fuel and Power, during a period of the war. I found that though the regions were not doing all they might be doing they were a good link between headquarters and the collieries. After all, we have to be very careful, in dealing with this machinery, not to deal with it in too drastic a manner all at once. It may be necessary later to consider the question of replacing the regional boards by some other machinery, but I would suggest that it would be wrong—even if it were neces
  58
  sary —to deal with it in this Bill. As the noble Lord, Lord Clydesmuir, said, to-day we can abolish all the regional boards; there is no need to provide in the Bill for that.
  With regard to another point raised by the noble Viscount, Lord Swinton, and by many other noble Lords, I feel we have to be careful about over-emphasising decentralisation. It has its virtues. The same remark applies to the question of functionaries on the National Coal Board. I think the National Union of Mineworkers would insist that wages be dealt with nationally. For that alone we need one functionary, at least, on the National Coal Board. The same would apply to labour questions in general. The regulation of hours, the question of working an extra half-hour, and so on, would be national questions for the labour officer. The labour officer must be a functionary. And I am quite certain that that applies to scientific research. There are some, it seems to me, who must be executives on the Coal Board. To-day, more than half the present members of the National Coal Board have been relieved of all functionary responsibilities.
  Much has been said with regard to Clause 2, and here I would like to make reference to Lord Swinton's remarks. I do not think it is correct to say that the restriction of overseas activities was the deliberate intention of Parliament. From reading Hansard (I was elsewhere at the time) I think what happened was that Parliament was anxious to prevent the overseas assets of collieries from vesting. In their anxiety to do this, Parliament overlooked the necessity of making reference to those overseas activities as regards the sale of coal. I do not think noble Lords need have any anxiety. I must say that I felt the picture as to what could happen under this clause was being drawn rather too darkly. I would not deny the possibility of its happening, but I would certainly deny the probability. No Coal Board in this country would take a course which would endanger the coal industry and the real interests of the British people. I would say on Clause 2 that it is as well to keep in mind that among those now exercising the powers as exporters, are probably men who have been advisers to the National Coal Board.

  59
  Let me emphasise what I said in my opening speech. It is not right that the Coal Board should depend on a body outside itself. They should not be told, "Your job is production, and production only. You attend to that, and leave the rest to somebody else." That, in my opinion, would not be a good thing for nationalisation or for the country. The miners never looked at nationalisation in the sense that we simply nationalised production and left the rest as it was.
  LORD HAWKE: If I may interrupt the noble Lord, I do not think he has grasped our point. It does not really matter what the miners say about it. What matters is what the customers say. My knowledge of foreigners is that they do not like buying from a State; they know they will get a dirty deal.
  LORD MACDONALD OF GWAENYSGOR: I would not say they know they will get a dirty deal. In my opinion you will find that the foreign customer will buy from anybody who can provide him with it at a reasonable price.
  LORD HAWKE: He wants to buy from somebody he can sue at law.
  LORD MACDONALD OF GWAENYSGOR: We cannot pursue that matter any further now, and no doubt it will come up on the Committee stage. I was rather alarmed when the noble Viscount, Lord Swinton, suggested—I took his words down—that the exercise of these new powers could be permitted only providing the Minister himself brought an Order to Parliament asking permission. The noble Viscount can hardly seriously suggest that if a foreign buyer asks for a c.i.f. quotation from the National Coal Board, a Parliamentary Order should be issued before that request can be met.
  VISCOUNT SWINTON: I did not mean that every time somebody wanted to buy a cargo of coal there must be an Order. What I meant was that if there was a case in which the Coal Board could persuade the Minister that in a particular market they ought to go into the export trade, he should then make an Order permitting them to do so, subject to confirmation by Parliament.
  LORD MACDONALD OF GWAENYSGOR: Is not the other way better? The Coal Board have already persuaded the Minister to entrust them with this power for use when they consider it necessary. That seems far better than saying: Withhold this legislation until the condition arises, when the Coal Board will go to the Minister and say that they are now making a case for him to make an Order.
  VISCOUNT SWINTON: I will put down an Amendment on the Committee stage, and we can see what is the Parliamentary view.
  LORD MACDONALD OF GWAENYSGOR: On the question of Clause 3, again I think there must be some misunderstanding regarding the type of contract to be dealt with. The position before nationalisation was that the buyer and seller were in a certain relationship, and often a friendly relationship. In many cases the financial interests were the same interests, and they made arrangements and contracts because of their intimate relationship. One of those parties has gone out. The coal-producing part has gone, but you are still left with a contract made on some such basis, with a friendly feeling and understanding. We do not think it is fair to say to the Board: "You must take up the same contract, no matter how much it hampers you." There is no intention of breaking contracts wholesale. The only intention is to deal with the question whether these contracts are fair contracts, having regard to the new position.
  The noble Lord, Lord Clydesmuir, and other noble Lords, emphasised that it should be possible for these questions to be dealt with by arbitration, apart from the amount of compensation. I am advised that under Clause 3 the arbitrator, in assessing the compensation for the determination of the contract, considers whether the terms are such as would be expected in a contract made in the ordinary course. In the consideration of the compensation the question whether the contract is one that ought to come into that category will be considered.
  VISCOUNT SWINTON: Let me be clear about this matter. Supposing the Coal Board says: "I want to determine this

  61
  particular contract," and the man with whom the contract is made says: "I want that contract continued," will the determination of the contract be a subject for arbitration, or only the amount of compensation if the contract is determined?
  LORD MACDONALD OF GWAENYSGOR: Let me read these words again. This is the advice I have received. Under this clause the arbitrator, in assessing the compensation to be paid as a result of determination of the contract, considers whether the terms of the contract now to be determined are such as would be expected in a contract made in the ordinary way. In the old days contracts were made in a different way.
  VISCOUNT SWINTON: I think I have it clear, and I think I was right. The Coal Board will have an absolute right to determine the contract. The other party to the contract cannot go to arbitration and say: "I want the contract to go on."
  LORD MACDONALD OF GWAENYSGOR: Not at that point.
  VISCOUNT SWINTON: We say he should. It is a very serious thing to determine a contract. If a contract is to be determined, then the Coal Board, if challenged, should state their case, and the other party should state his case. The arbitrator should then say whether the contract should be determined or not, in addition to saying what the compensation should be.
  LORD MACDONALD OF GWAENYSGOR: That had better be left to the Committee stage. With regard to Clause 4, I was rather surprised to hear it suggested that somebody was going to lose something. The noble Viscount, Lord Swinton, referred to it as "a clarifying clause" and he
  almost made it into a scarifying clause. Since the Act was put on the Statute Book the Government have noticed that certain words could be interpreted in a way they never intended. Because of that, rather than risk going to the courts on that issue, they themselves decided that they would put in the form of words which would carry out their intention. I quite agree that had someone interpreted the words in such a way that he would benefit to a certain extent, and then under the new
  62
  words he would benefit to a less extent, he could be said to have suffered something. No one suffers or gains anything under this clause. It simply puts it in plainer language. I do not think any other point has been raised.
  VISCOUNT SWINTON: The noble Lord has been so kind to us that I would put this to him. He is saying exactly the opposite to what the Minister said. If the noble Lord looks at Hansard of February 8, 1949, column 374, he will find these words:
  "… the new clause may in some cases inure to the advantage of a person who claims an expectation and in some cases it may be the reverse."
  If that does not mean that in some cases a man may be better off and in other cases worse off, I do not know what it means.
  LORD MACDONALD OF GWAENYSGOR: Accepting a certain interpretation, it would mean what the noble Viscount has quoted, but that is an interpretation which was never intended. If that had been inserted in the previous Bill there would have been no loss whatever. I quite agree that if this section is interpreted in a certain way it would appear that a beneficiary would receive a certain fixed compensation, whereas under this amendment he will not. The Government are taking action before it goes to the courts. There is only one other point I would like to make on Clause 4, and that is that it is not intended, as the noble Viscount seemed to indicate, that all workers in nationalised industry should beware and watch out. It is not intended that fair compensation shall not be paid where it ought to be paid. What is intended is that unreasonable compensation shall not be paid. I was asked a very definite question—and I thank the noble Lord, Lord Hawke, for putting it to me—as to whether we will consider, between now and the Committee stage, introducing a new clause to deal with the various societies who have been, in the past, and still are, responsible for dealing with the payment of compensation. I can assure him that such a clause will be brought forward, and I hope that it will meet with the approval of the Committee.
  On Question, Bill read 2a, and committed to a Committee of the Whole House.

  BUSINESS OF THE HOUSE
  6.9 p.m.
  LORD AMMON: My Lords, before the House adjourns I ask leave to make two announcements. The first is that it is proposed to postpone until a later date the Second Reading of the Representation of the People Bill, and to take tomorrow the Second Reading of the House of Commons (Redistribution of Seats) Bill and the Committee stage of the Consolidation of Enactments (Procedure) Bill.
  VISCOUNT SWINTON: To be taken after the Motion to-morrow?
  LORD AMMON: Yes. May I also say that before going on to the usual business to-morrow, reference will be made to the memory of the late Lord Lucan?

  REPRESENTATION OF THE PEOPLE BILL [H.L.]
  Order of the Day for the Second Reading read, and discharged.

  CERTIFICATES FROM EXAMINERS
  The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that the Standing Orders have not been complied with in
  64
  respect of the Petitions for the following Bills:
  LONDON COUNTY COUNCIL (WOOD LANE SITE);
  SHOREHAM HARBOUR:
  And also the Certificates that no further Standing Orders are applicable to the following Bills:
  TEIGNMOUTH AND SHALDON BRIDGE;
  UNIVERSITY OF NOTTINGHAM:
  The same were ordered to lie on the Table.

  ROCHDALE CANAL BILL [H.L.]
  The Chairman of Committees informed the House that the opposition to the Bill was withdrawn: The Order made on February 15 last discharged, and Bill committed.

  PRIVATE LEGISLATION PROCEDURE (SCOTLAND) ACT, 1936
  Report from the Committee of Selection, That the Lords following be proposed to the House as Members of the panel of Lords to act as Commissioners under the Act during the present Session—namely:
  L. Ker (M. Lothian),
  L. Ettrick (L. Napier):
  Agreed to, and the said Lords appointed accordingly.
  House adjourned at ten minutes past six o'clock.