COAL INDUSTRY BILL

HL Deb 26 April 1949 vol 162 cc42-62

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 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.

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 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 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- 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 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 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 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 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 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: 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 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 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 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.

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 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.

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 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 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 2^a, and committed to a Committee of the Whole House.