Lords Sitting of 12 May 1949

Preamble
The House met at three of the clock, The EARL OF DROGHEDA on the Wool sack.
Prayers
3.5 p.m.
SWINDON CORPORATION BILL
Read 2a, and committed.
LONDON COUNTY COUNCIL (WOOD LANE SITE) BILL [H.L.]
Read 2a.
CITY OF LONDON (VARIOUS POWERS) BILL
Read 2a, and committed.

BUSINESS OF THE HOUSE
LORD AMMON: My Lords, I beg to move the Motion which stands on the Order Paper in the name of my noble friend the Leader of the House.
Moved, That Standing Order No. XXI be considered in order to its being dispensed with for the purpose of postponing the Order for the House to be put into Committee on the Coal Industry Bill until after the Second Reading of the Representation of the People Bill [H.L.].—(Lord Ammon.)
On Question, Motion agreed to, and ordered accordingly.

COMMONWEALTH TELEGRAPHS BILL
3.7 p.m.
Order of the Day for the Second Reading read.
THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF LISTOWEL): My Lords, this Bill of which I am now moving the Second Reading represents a necessary stage in the postwar reorganisation of the Commonwealth system of telephone and telegraph communications, that vast system and network of cables and wireless which has done so much in the past to link trade and facilitate co-operation, both in peace and war, among all the members of the Commonwealth. The Bill represents one
590
feature, and one only, in the working out of broad reorganisation plans thought out and agreed by all the Commonwealth Governments. Its full significance can therefore be grasped only in relation to the whole scheme of which it forms a part. But I will not weary the House, as I might otherwise do, by repeating a long chapter of past history. I would only ask your Lordships to cast your minds back to the Commonwealth Telecommunications Conference of 1945, which made the policy recommendations on which this reorganisation has been based, all of these recommendations being subsequently approved by the Governments concerned. They were later embodied in the Commonwealth Telecommunications Agreement of 1948, and for its detailed implementation that Agreement requires, among other things, the provisions of the present Bill.
The 1945 Conference, having in mind the need for public control of this vital Commonwealth interest—a need that became particularly obvious to all concerned with these matters during the war—recommended that the private shareholders in the overseas telecommunication services of the Commonwealth countries should be bought out by the various Commonwealth Governments. The Conference therefore accepted the broad principle of nationalisation which had been strongly urged by the noble Lord, Lord Reith, after his valuable tour of the whole Commonwealth towards the end of the war. If any single individual can be called the father and architect of the new conception of Commonwealth communications it is, as I am sure your Lordships will agree, the noble Lord, Lord Reith. He has deserved well of the Commonwealth, both on account of his past services and for what he is now doing in his capacity as Chairman of the Commonwealth Communications Council; and I am sure that he would wish those senior technical and administrative officials of the Post Office in the United Kingdom whose work has contributed to this happy solution to be included in a public acknowledgment.
The first step by this country in making effective the new Commonwealth partnership agreed at the 1945 Conference was taken in 1946, when the Cable and Wireless Act turned Cable and Wireless Limited into a publicly owned company. Since that date, other Commonwealth

591
countries have gone a step further in the fulfilment of their share in the Agreement by nationalising their external telephone and telegraph services. But when the Commonwealth Governments agreed to acquire the communication assets of Cable and Wireless Limited, and of the local companies within their respective territories, they naturally left each Government to decide for itself the particular form in which it would operate its own external telecommunication services.
It would, I think, have been contrary to Commonwealth traditions to impose a common form of "national body" on all countries. In fact, while South Africa and New Zealand have already passed this new responsibility to their respective Postal and Telegraph Departments, and India has set up a body called "Overseas Communication Services" which is, in fact, under the Communications Department, Australia has set up a public corporation under Government control. Canada has not yet decided which type of management to choose. The decision in the United Kingdom was to make the Post Office, which already operated our other overseas telephone and telegraph services, the national body for the purposes of Commonwealth communications in this country. This important decision was taken while I was serving at the Post Office, and I can assure your Lordships from personal recollection that it was determined entirely on the grounds of technical and administrative efficiency, and on economy in operation, in accordance with the best available technical advice, and that politics did not enter into the minds of any of those who were concerned with the matter.
One of the two main purposes of this Bill is to give practical effect to this decision—namely, that the services and property of Cable and Wireless Limited in the United Kingdom should pass to the Post Office, and that its staff in the United Kingdom should join the ranks of Post Office employees. I would remind the House that the company will continue, as at present, to hold its assets overseas, both in foreign countries and in the Colonies, and also its submarine cables, and to operate its services overseas. The present Bill, which I am commending to your Lordships, will make no change, I think, in the existing relationship outside the
592
United Kingdom between the Post Office and the company.
The other main purpose of the Bill is to carry out the vital recommendation of the 1945 Conference about the setting up of a Commonwealth Telecommunications Board as a further stage in the growth and development of the existing Commonwealth Communications Council. The functions of the Board will be rather wider and more important than those of the Council, and will include advice to Commonwealth Governments on maintenance and planning for their telecommunications system as a whole. The Bill, therefore, proposes to establish the representative central body of this partnership, the Commonwealth Telecommunications Board, as agreed by all the partner Governments. Besides the United Kingdom, Australia, New Zealand, South Africa, India, Canada, Ceylon and Southern Rhodesia are already members of the Commonwealth Communications Council, while Pakistan sends an observer to its meetings and is now considering whether to become a full member. Since 1945, the functions of the Commonwealth Communications Council have in practice expanded as compared with those which it exercised before the war, and it has been advising Commonwealth Governments on all aspects of their overseas telecommunications. The Bill will, in fact, only regularise what has already become an accepted and most successful form of Commonwealth co-operation. It puts the hall-mark of legal approval on a system which has been tried out and has worked well.
May I now turn to the more important provisions in the contents of the Bill? It starts with an abnormally long recital, as your Lordships will observe, which gives that part of the immediate historical background essential for a thorough grasp of what is there proposed. Clause 1 establishes the Commonwealth Telecommunications Board with a constitution and functions as set out in detail in Part I of the First Schedule. This clause goes on to say that Part I of the Schedule shall be supplemented by Part II which defines "national body" to cover whatever form of public ownership a partner Government may decide to set up. The object of Clause 2 is to give flexibility to this new piece of Commonwealth machinery, to make it adjustable in times

593
to come, by enabling the Postmaster-General to give effect to any changes in the Commonwealth Telecommunications Agreement desired by all the partner Governments. Clause 3 authorises the Postmaster-General to pay the United Kingdom's share of the Board's expenses. By Clause 4, subject, of course, to a contemplated agreement with Cable and Wireless Limited, the company's land and other assets in Great Britain, will, with a few exceptions, be vested in the Postmaster-General in April next year. Clause 5 of the Bill provides financial powers for the acquisition by the Post Office of the company's property in this country.
Clauses 6, 7 and 8, deal with the pension and compensation rights of the company's staff. The total staff employed by the company is nearly 13,000, and of these nearly 5,000 are serving in this country. After the Bill has become operative, the great majority of its employees in the United Kingdom will be taken over by the Post Office. This transfer of staff does not, of course, require legislation in itself, but statutory provision is needed for dealing with pension rights; Clause 6 requires regulations to be made for this purpose. The intention is to guarantee the existing pension rights of the staff taken over, and the specific arrangements under existing pensions schemes will be agreed with the staff organisations. Clause 7 provides for the making of regulations for the payment of compensation to individuals who may be displaced or who, on transfer to the Civil Service, may suffer diminution of their earnings or pension rights. We hope that in practice this provision will not be necessary, but it will safeguard the position of existing employees of the company taken over by the Post Office. Clause 9 gives the Postmaster-General authority to introduce a new revenue-pooling scheme with the company. It is actually an extension of the existing arrangement, and is designed to avoid harmful competition between the cable and wireless services of the United Kingdom by removing all financial inducement to the Post Office or the company to use one method rather than the other.
My Lords, this is, I think, a noncontroversial Bill. It is not a major Bill, but it is a Bill of some considerable importance,
594
both to us and to our friends in the Commonwealth family. I can without any hesitation at all commend this measure to your Lordships for your approval, and I beg to move that it be now given a Second Reading.
Moved, That the Bill be now read 2a.—(The Earl of Listowel.)
3.19 p.m.
LORD TWEEDSMUIR: My Lords, I am indebted to the noble Earl, Lord Listowel, for his clear exposition of this Bill. I have not many observations to make upon it. The noble Earl has sketched something of the history of the communications. The start which the Eastern Telegraph Company made back in 1872 was responsible for our emerging with a lead in long-distance telegraph cables—a lead which we still hold to-day. The Conference of 1929 merged Commonwealth overseas communications in what we came to know as Cable and Wireless Limited. By the Act of 1946, the communications for which the company were responsible were submerged in Government ownership. Clauses 1 to 3 of this Bill, as the noble Earl has pointed out, deal with the Natioanal Telecommunications Board, and I think they give it the flexibility which he claims.
I will not labour the question as to whether or not the Post Office is the correct national body to handle these responsibilities—perhaps "body" is not the right word, because by this piece of legislation the Post Office has the whole of the work of what used to be the body, whilst the overseas arms and legs continue to vibrate under their own volition. I very much hope that the penny-a-word Press telegraph rate will be maintained. It was a bold, imaginative step on the part of the old private enterprise Cable and Wireless Company. It has proved a powerful and excellent influence in spreading news throughout the Empire. I sometimes feel that the shade of Sir Rowland Hill must think rather ruefully of what has happened to the penny post. I hope that the penny-a-word Press telegraph rate will not be a casualty, too.
I have some misgivings about Clauses 6, 7 and 8, which the noble Earl has kindly defined for us. By Clause 6 the Postmaster-General has complete power over pension funds and by subsection (4) of Clause 6, a board of referees, or a single referee, may be set up to hear

595
any disputes and petitions from aggrieved people that may be brought to his notice. That is excellent, but the aggrieved person may find himself further aggrieved in the case (which he is bringing) because he finds himself facing a financial disadvantage. I think it is only fair that provision should be made in this Bill for reimbursing such a person for all the further financial disadvantage that he suffers in attending the tribunal. Provision can easily be made to withhold that compensation if his claim is merely frivolous. Clause 8 makes provision for an allowance to be paid to the referee, or board of referees, and to any witnesses who may be called, but makes no provision whatever for paying the expenses of an aggrieved person who is laying his petition.
Let us imagine a hypothetical case of the kind that might easily arise. An aggrieved person comes down to London from some northern part of England, say Northumberland, to put his case, bringing with him one single material witness. They travel down in the same railway carriage. Both are put to fairly considerable expense. The witness gives his evidence, and is reimbursed for everything it has cost him; but not so the unfortunate aggrieved person. That seems to me very strange, and on Committee stage we shall put down an Amendment which I hope the Government will see their way to accept.
In Clause 7 the Postmaster-General, with the concurrence of the Treasury, has power to compensate all those who have suffered loss of employment or diminution of earnings. That is very right and proper, but I do not think it is enough to say, as the Bill does, merely that he has the power to do that, that he can do it. I think there should be concrete statutory provision that he should. In the 1946 Act, which nationalised the Cable and Wireless Company, certain assurances were given to the then employees that they would not suffer. Certainly those who more recently joined, and those in the lower brackets of salary, have not done too badly. But some of those who have served far longer, and have reached a higher bracket, have suffered. It is a poor reward for a man who joined that company many years ago, and who saw himself with his foot on what he thought was the bottom rung
596
of the ladder, which he was determined to climb to the topmost rung in the course of a lifetime, suddenly to find that by a piece of legislation he is on a snake instead of a ladder. I have no more observations to make at this stage of the Bill and, subject to the reservations I have made, I can say that we on this side of the House do not oppose the Bill, and hope that it succeeds.
3.25 p.m.
LORD RENNELL: My Lords, may I associate myself with what the noble Lord, Lord Tweedsmuir, has said? This Bill is the logical outcome of a series of negotiations, of which perhaps the happiest of all the elements is the constitution of the Imperial Telecommunications Board. In its own way that in itself is a very great achievement; it is one further link among the Commonwealth countries. In introducing the Bill the noble Earl, Lord Listowel, referred to the fact that in their external communications services all the individual members of the Commonwealth had sought their own solution of the method to be adopted. That is right, and in the tradition of the development of our Commonwealth relations. But the noble Earl used one word which I think must have been a slip of the tongue. If I understood him aright, he said that it was no part of our wish to impose any particular solution to this problem on any of the Overseas Dominions. I think the word "impose" must have been a slip of the tongue, because we have no right, and certainly no desire, to impose any solution an any overseas Dominion. I feel sure that what the noble Earl intended to say, if I may put the words into his mouth, was that we did not seek to establish a uniform system which suited us, but preferred to let them have a freedom of choice.
3.27 p.m.
THE EARL OF LISTOWEL: My Lords, I am obliged to the House and to both the noble Lords who have spoken for the approval which has been given to this Bill. I will gladly deal on the Committee stage of the Bill with the points raised by the noble Lord, Lord Tweedsmuir, on Clauses 6, 7 and 8, and I am obliged to him for giving me notice of the considerations which he has in mind. I think that possibly the noble Lord, Lord Rennell, misunderstood what I said. I stick to the word "impose" in

597
the context in which I used it. I think he will see that what I meant was that the Commonwealth Conference did not seek to impose on the different Commonwealth countries which were there represented any common, uniform national form of body. The choice of national body was deliberately left to the different Governments and Parliaments concerned.
On Question, Bill read 2a.

AGRICULTURE (MISCELLANEOUS PROVISIONS) BILL
3.28 p.m.
Amendments reported (according to Order).
Clause 9 [Minister's right to certain tenants' compensation on giving up requisitioned land]:
LORD CRANWORTH LORD CRANWORTH moved to add to the clause as a new subsection:
"( ) Without prejudice to the right of the person to whom possession is or was given up to claim compensation for damage under Section 2 (1) (b) of the Compensation (Defence) Act, 1939, the Minister shall be liable and shall be deemed always to have been liable in the circumstances hereinbefore referred to for the payment of compensation for dilapidation, deterioration or damage under Section 58 of the Agricultural Holdings Act, 1948."
The noble Lord said: My Lords, this Amendment deals with a matter which I raised on Second reading. Under Clause 9, when he gives up a farm, the Minister retains the tenant's right to compensation. It did not seem to me to contain anything which provided for the possibility of compensation to the owner. The noble Earl, Lord Huntington, said he thought that there was compensation right, and that he would look into the matter. He very kindly wrote to me, and explained this, I wrote back, and said that I thought perhaps I would introduce an Amendment at a later date so that he could make public his views. Since that time those on whose behalf I move this Amendment, the Central Landowners' Association, who have been rather worried about this point have taken counsel's opinion on it. I am afraid that counsel's opinion is not entirely in agreement with the noble Earl, because they say that a landlord's right to counterclaim is provided in the Compensation (Defence) Act, 1939; but that does not give as full rights of claim to the landlord as are provided by Sections
598
58 and 59 of the Agricultural (Holdings) Act, 1948. It is from that Act, as I understand it, that the Ministry derive their claim for tenant right.
So far as I am concerned, while the present Minister of Agriculture and the noble Earl occupy their respective positions, I am entirely satisfied with the assurance that the noble Earl has given. But no one occupies those positions for ever; changes take place, sad though they are. It might even be that a wicked Tory Government will come back and, as is their custom, start grinding the faces of the poor land owner; and they might take advantage of this lapse in the Bill to grind them still deeper! Therefore it seems to me that if there is any doubt—and it appears that there may be—some advantage would be gained by the acceptance of this Amendment. I therefore beg to move.
Amendment moved—
Page 8, line 20, at end insert the said subsection.—(Lord Cranworth.)
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF HUNTINGDON): My Lords, this is a small but complicated pant. I hope to be able to show the noble Lord who moved the Amendment that his worries are unfounded. The position under Clause 9 concerns only the Minister in connection with requisitioned land which the Minister is giving back to the land owner. It was decided that it would be only fair for the Minister to have tenant right when he gave up the land—in other words, to get back from the land owner the value of cultivations, and so on, which had been carried out. I think the noble Lord agrees that that is quite justified.
The doubt in the noble Lord's mind is whether the land owner can claim compensation for dilapidation or deterioration of the land while it was requisitioned and in the hands of the Minister. I suggest that that is covered by the wording of the clause. Clause 9, page 7, at line 36, says:
"… in all respects as if the appropriate Minister had, throughout the period of such possession, been in possession by virtue of a contract of tenancy …"
As the noble Lord knows, when tenant right is claimed, the custom is always to set off against the amount claimed for tenant right any deterioration of the

599
land, whatever it may be. We consider that this will apply if the Minister is regarded as having had a contract of tenancy. Therefore, any deterioration of the land will be set off against the amount claimed for tenant right. To substantiate that even further, I may say that in every case where land has been given back and in which there has been a claim for deterioration of the land, we have automatically conceded that claim against tenant right. I can assure noble Lords opposite that my right honourable friend the Minister intends to adopt that procedure in any new case that arises.
There is a final point which I think is important. Even if it is argued that there is some doubt about this clause (we do not think that is so; I am advised that the situation is completely safeguarded), the Compensation (Defence) Act, 1939, will still operate. This applies to all land, whether agricultural or not. If noble Lords will look at Section 2, (1), (b), of the Act they will see that compensation payable under that Act is to be
"a sum equal to the cost of making good any damage to the land which may have occurred during the period for which possession thereof is so retained."
So even if there is any doubt under this clause—there should not be—the Compensation (Defence) Act, 1939, still operates, and the landlord could apply for full damages of any kind under Section 2, (1), (b). I hope that will satisfy the noble Lord that this Amendment is really unnecessary.
LORD CRANWORTH: My Lords, I thank the noble Earl for his long and careful explanation. The only part of it with which I was not quite satisfied was that I understood him to say that in cases of this sort the Ministry were already paying for dilapidations. To my knowledge, the Ministry were already claiming tenant right, and getting it, long before this Bill came into being. But that is neither here nor there. I have heard the noble Earl's very kind explanation, and I shall have it to refer to in future should anything happen.
EARL DE LA WARR: My Lords, I thank the noble Earl very much for his answer, but there is one point which is not quite clear. He referred to Section 2
600
(1) (b), of the Compensation (Defence) Act, 1939. I think we are all clear about the questions dealt with there; it deals with definite damage. But there is also the question of deterioration of the land, which really comes under Section 2 (1) (c), dealing with tenant right. I do not think the noble Earl in any part of his reply dealt with that matter. There is the question, for instance, of fouled land, and so on. I do not think that is covered by Section 2 (1) (b). Could the noble Earl give us a full assurance on that point?
THE EARL OF HUNTINGDON: My Lords, I can give noble Lords an assurance on that point. There is one matter I should like to clear up. The whole trouble has arisen here because when the land was requisitioned in the first place no provision was made for the Minister to get tenant right when the land was given up. One must confess that tenant right has been claimed by the Minister without the statutory safeguard. This Bill merely regularises the position. All this clause does is to say that the Minister has the right to collect tenant right, and it in no way nullifies any of the rights of the landlord for claiming back for dilapidations, or, as the noble Earl has just said, for deterioration of the land by fouling, damage to cropping, and so on. I hope that will satisfy noble Lords.
LORD CRANWORTH: My Lords, I thank the noble Earl for that explanation. In view of the fact that I shall shortly be in a position to procure a copy of Hansard containing his reply, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.

REPRESENTATION OF THE PEOPLE BILL [H.L.]
Order of the Day for the Second Reading read.
THY LORD PRIVY SEAL (VISCOUNT ADDISON): My Lords, on behalf of my noble and learned friend the Lord Chancellor, I beg to move that this Bill be read a second time.
Moved, That the Bill be now read 2a.—(Viscount Addison.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.
House adjourned during pleasure, and resumed by the Lord Chancellor.

COAL INDUSTRY BILL
3.40 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Macdonald of Gwaenysgor.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DROGHEDA in the Chair]
Clause 1:
Alteration of composition of National Coal Board
(3) The Minister may appoint one of the members of the Board to act as deputy chair-roan thereof in addition to the member appointed by him under subsection (5) of section two of the principal Act so to act.
LORD RENNELL LORD RENNELL moved to add to subsection (3):
"Provided that at least one of the persons appointed so to act shall be a person having experience of the coal-mining industry."
The noble Lord said: The Amendment which stands in my name and the names of certain other noble Lords is a simple and modest Amendment, which seeks to make it obligatory that at least one person on the Coal Board shall have had some experience of the coal industry. That is asking for very little and, indeed, for so little that I cannot believe the noble Lord, Lord Macdonald of Gwaenysgor, will fail to meet us on the point. The principal Act lays down that the Beard is to be composed of persons who
"shall be appointed … from amongst persons appearing to him"—
that is the Minister—
"to be qualified as having had experience of, and having shown capacity in industrial, commercial, or financial matters, applied science, administration, or the organisation of workers."
In that Act, the list of persons from which the Board are to be selected does not include "persons in or having knowledge of the coal industry."
In subsequent Acts such a category was included—in the Electricity Act by Amendment, and in subsequent Acts by inclusion in the original draft. It seems to me elementary that, in dealing with this major industry which in this country is under a single control, provision should
602
be made that experienced persons in that industry should be included. What we on this side of the House mean by "experienced people," is people who have grown up and have for many years been intimately associated with the industry, and not people who, in the course of the last two and a half years, have acquired that experience.
It is perfectly true—and I, for one, would agree with what Mr. Shinwell said at that time—that people with administrative experience are required in the administration of this industry. But in addition to ordinary administrative experience, direct personal experience of the trade or industry seems to me to be essential. As the Government have seen fit to introduce certain Amendments in the Bill which is now before your Lordships' House, altering the possible coin-position in numbers of the Board, this seems an appropriate moment to require that at least one person with experience or the coal mining industry should be included. If, as appears reasonable, that should be extended to more than one person, I, for one, would be glad to accept an Amendment to the Amendment to that effect. I beg to move.
Amendment moved—
Page 2, line 11, at end insert the said proviso.—(Lord Rennell.)
THE PAYMASTER-GENERAL (LORD MACDONALD OF CWAENYSGOR): I can assure your Lordships that I am exceedingly pleased that the first Amendment with which I have to deal in your Lordships' House is one which recognises the valuable experience and capacity of those engaged in the coal industry. I am only sorry that for years past this was not recognised. I am quite satisfied that if it had been, the history of the industry would have been far happier. I am quite satisfied also that no National Coal Board can function efficiently without some members of that Board having had experience in the coal industry. That was recognised by the first Minister of Fuel and Power responsible for nationalisation, and it is also recognised by my right honourable friend the present Minister. Out of the nine members—eight full-time and one part-time—there are at the present moment four who have had experience in tie coal industry. Therefore, there is no difference between the two sides on this issue. No Coal

603
Board will do the job as it ought to be done who have not the right connection with the coal face, where the coal is got, and that right connection will never be obtained without men on the Board who can speak from personal experience. I would not confine it to the managerial side, because there are those who have not been on the managerial side who could make a very valuable contribution to any Coal Board.
Having said that, and looking at this Amendment, I feel that to accept it would hardly do justice to the Coal Board. The Amendment reads:
"Provided that at least one of the persons appointed so to act shall be a person having experience of the coal-mining industry."
We are not told anything about the quality of the experience or the length of the experience. An individual who has for some unknown purpose spent six months in the manager's office could qualify under this Amendment. I am quite sure the noble Lord did not intend that and, therefore, the wording of the Amendment is such that I could not possibly accept it. As provision has been made—and I would say adequate provision—I trust the noble Lord will not press the Amendment. I do not feel that I can give an undertaking to-day that for ever more the percentage of those experienced on the Coal Board shall stand as it is to-day, but I am quite certain that no Minister responsible for appointing the Board will ever overlook the need for having on it those experienced in the industry. For that reason, since we are assured of having at least one—and I should say more than one—I hope the Amendment will not be pressed to a Division.
VISCOUNT SWINTON: I am rather sorry that the Minister has taken this line. I thought that the beginning of his speech was quite admirable, when he said that of course we must have on the Coal Board people who really understand the coal industry. I naturally thought he was going on to say: "And I therefore accept the proposal that at least one of the persons appointed shall have experience." I have a proposition to make. I really thought that this was a matter upon which we were all agreed. The particular proposal here is that one of the new part-time directors shall be a person with mining experience. I can conceive that,
604
among the part-time directors the Minister is empowered to appoint under this clause, he may want people of rather special part-time qualifications. I feel sure that my noble friend who moved the Amendment would be quite content with an undertaking (and an Amendment can easily be moved as a manuscript Amendment or put down on Report) that of the whole Board—which will in future consist of any number up to eleven—there shall be at least three people who have practical knowledge of the coal mining industry. We are legislating for all time, and I hope that will be accepted.
LORD MACDONALD OF GWAENYSGOR: Let us be clear what the Amendment means. There may be misunderstanding.
VISCOUNT SWINTON: I said exactly what the Amendment means. The Amendment says that one of the three part-time people it is now sought to appoint must be a man of practical experience of the coal trade. What I suggest now, and what I am sure is the aim of this Amendment, is that we should consider the Coal Board as a whole—that is to say, the existing eight members, plus the three whom we are proposing to give to the Government. It is not, I am sure, too much to ask that the Government should give us an undertaking that they will accept the provision that at least three people of this Board of eleven shall be people who know something about the coal trade.
LORD MACDONALD OF GWAENYSGOR: Let me be quite clear about this. I have read this Amendment as it is down on the paper. Let me read it out:
"Provided that at least one of the persons appointed so to act shall be a person having experience of the coal-mining industry."
That is to be added to subsection (3) of Clause 1. If I am told that all that it means is that one of the part-time members shall be a person who has had experience, I am prepared to give the Amendment consideration, though I am not saying that I can accept it. All I can promise is that between now and the Report stage it shall be considered.
THE LORD CHANCELLOR (VISCOUNT JOWITT): If I may say a word here, I think that that would be the wise course. It is inconceivable to me that any

605
Minister would appoint these members to the Board without having at least three who knew something about the industry. I can well understand the slight hesitation on the part of the Minister to accept this Amendment, because he may feel, by implication, "The House must think I have been acting like an absolute fool." I took the Amendment in its present form in the same way as did the noble Viscount, Lord Swinton; and if there is a misapprehension it may be due to me. I am not sure that it does not mean that one of the deputy chairmen must have had experience of the coal-mining industry. That is not what the noble Lord meant, but if he looks at the words again he will see that that may seem to be their meaning. I discussed the matter with the noble Lord yesterday, and it was not until I looked at the Amendment again that it seemed to me that that was not the meaning. I suggest that we leave this matter for the time being. That would give us an opportunity to get together and consider what the Amendment means, and whether we cannot reach some compromise which satisfies everybody.
LORD RENNELL: I entirely agree with what the noble and learned Viscount says. My intention was only to ensure that among the categories of person from whom the Minister should choose shall be included people who have experience of the coal-mining industry. If the noble Lord, Lord Macdonald, can assure me that an Amendment will be put down, in such form as he considers proper, I shall be happy to withdraw my Amendment at this stage.
THE LORD CHANCELLOR: I would rather put it this way, if I may, since the Minister is a little hesitant: He does not doubt that it would be foolish to say that there should not be at least three persons on the Board who have experience, but he is a little reluctant to have the matter put down quite in this way, since it is so obvious. Without having consulted the Minister, I would rather not commit myself further at the present time.
LORD RENNELL: Something analogous has been included in the other nationalisation boards, and I cannot see why the Minister should hesitate to include such a provision in this Bill. However, on the assurance given by the noble
606
and learned Viscount, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Extension of area within which the Board's activities may be carried on.]
VISCOUNT SWINTON VISCOUNT SWINTON moved to add to the clause:
"Provided that before the Board carry on any of the activities referred to in paragraphs (b), (c), (d) or (e) of subsection (2) of section one of the principal Act in any country or place overseas the carrying on by them of that activity in that country or place shall have been approved by resclution of each House of Parliament."
The noble Viscount said: We come now to a matter of cardinal importance in this Bill, on which I hope the Government will be equally ready to meet us. Your Lordships will remember that the principal Act which this Bill seeks to amend definitely prohibited the National Coal Board from engaging in overseas activities, the chief of which would be the mining of coal and, even more important, merchanting and bunkering. Clause 2 of this Bill now seeks to give the Coal Board an unlimited power to do what, under the Act passed by Parliament two years ago, they are prohibited from doing. It was said that that was an oversight. But I am bound to say that I sat here on these Benches all through the discussions on the Coal Industry Nationalisation Bill, and I do not think it was an oversight at all. I can say with complete certainty that if it had been sought under that Bill to give the National Coal Board power to engage in the marketing and bunkering business overseas, I would certainly have moved, and, I hope, have carried your Lordships with me, to reject any such provision from that measure.
It is admitted that this business to-day is being admirably done by experienced and efficient merchants, with world-wide organisation and good will. The noble Lord who introduced the Bill paid a high tribute to their efficiency, competence and value. It was said, I think by him and other speakers, that the Coal Board had no desire to supplant but wanted these powers only as an insurance; that they would not dream of exercising the powers except in case of need. I was a little taken in by that at the moment, though I did not

607
think it a good reason for giving the powers, for no proof of need had been advanced. But when I came to look up, as I have done, the Minister's own speech, I felt that if insurance was all that was sought, my Amendment would exactly meet the case. But the responsible Minister, the Minister of Fuel and Power, said something different. On the Third Reading of this Bill in another place, on March 28, the Minister said (column 948):
"I would only add one or two remarks in reply to the comments by the honourable Member for Chippenham (Mr. Eccles). All we ask is that the Coal Board should be allowed themselves to compete as traders in the world market, and I cannot see why honourable Members opposite are so terrified of the competition of the National Coal Board. If the Board are as inefficient as some honourable Members like to make out, there need not be any anxiety about it whatever.… This may inspire a little healthy competition, but I am quite certain that the result will be thoroughly beneficial to the British export trade …"
There may be two opinions about that! But this power is not wanted as insurance; it is wanted, as the Minister himself says, in order that he may go "barging into" this export trade all over the world. That is his intention; and if your Lordships pass this clause in the present form, you will be giving him power which was denied to him after consideration by Parliament.
If we are now asked, two years after we passed an Act of Parliament denying those powers, to grant them it should not be only because some theoretical argument has been advanced. But in fact not a single practical argument has been advanced for changing Parliament's decision. I submit to your Lordships that there are overwhelming arguments against it. After all, the Coal Board have a big enough job on their hands at the moment. They have taken over, on a scale upon which no corporation anywhere, in the world has ever attempted, the production and treatment of coal. In addition to that, they have these other activities, such as coke ovens, land owning and all the rest of it. Surely it is enough of a task for that Board to produce coal in sufficient quantities, of good quality and at a price which home industry can afford and which foreign buyers will be prepared to pay. No one has ever before attempted a business on this scale. I appreciate the difficulties which the Coal Board have had, but I am
608
bound to say that I do not think that hitherto they have made a conspicuous success of their primary job of getting this coal.
But whatever views we may hold about the nationalisation of domestic production, I do not think that anyone—certainly anybody with any practical experience—will deny the very great risks and handicaps which arise when a Government, or a Government agency, begin to engage in foreign trade. I leave aside the question of experience, although I would remind your Lordships that in the old days there was hardly any colliery company which, with all its experience, found it good business to go into this trade and to try to supplant the merchants. The colliery companies found that their proper job was getting coal. But the moment a Government engage in this kind of business, there is a tendency for them to be "shot at" on political grounds. Any of us who has had experience in government knows that that is so; and the present Government must know it. They stand to be attacked in two ways. They are attacked by foreign sellers who are their competitors. It is alleged—and I have heard it said over and over again where Governments are concerned—that political pressure is being brought to bear in order to obtain a contract, that the Government are subsidising the sale of their own produce. Those charges may be completely unfounded but, when a Government are in business, the fact that the charges are unfounded does not stop such charges being made. Once those charges are made, they impair the whole of the foreign relations. The Government are also always liable to political pressure by foreign Governments who are the buyers, or whose nationals are the buyers, of whatever the commodity is—in this case, coal. When they are in the business as a Government, they are pressed to make, not a commercial bargain but a political bargain.
The Leader of the House will know this well—and I challenge him to deny that what I say is true. It is said to-day: "Well, if you are trying to get a low price out of us as a Government in what you buy, we ask you to sell to us at a low price." In all this haggling which goes on in those contracts which, unfortunately, Governments are now engaged in negotiating, they find at every turn

609
that not only are they up against the ordinary commercial difficulties but they have every piece of political ammunition and weapons brought to bear against them. It is perfectly natural that it should be so. Therefore, on the broadest grounds I say—and this has nothing to do with domestic nationalisation—that it is extremely unwise for Governments and Government agencies to go into international trade, unless there is some overriding reason which compels them to do it.
Is there any such reason here? I submit that there is not a vestige of reason. The export trade in coal has been built up largely, I would say almost entirely, by the efficiency of British merchants all over the world. They have sunk vast sums in establishing stores, bunkering stations, agencies and facilities. They have formed subsidiary companies in foreign countries, in accordance with the local laws; they have often taken into partnership foreign nationals—a thing which no Government agency would be permitted to do in a foreign country, but which an individual merchant is welcome to do. All that they have done. They have built up a world-wide good will by studying and meeting an infinite variety of their customers' needs.
As far back as 1916, the United States Government appointed a Federal Commission to consider and report upon foreign trade and, in detail, upon the coal trade. They reported that this combination of facilities, good will and what our American friends call the "know-how," which the British merchants have established and operated all over the world, was the chief reason for the success of our export trade in coal. These merchants not only know how to meet the varied requirements of foreign customers, how to arrange all the shipping for them, to arrange the loading and unloading but they put vast sums into these loading and unloading facilities. They also deliver the coal; and they deliver the coal that the consumer wants, where he wants it and when he wants it—that is, if they can obtain it from the Coal Board to-day: they used to have no difficulty. More than that, the merchants have been in the habit of carrying large stocks at their own risks, both for bunkers and for local requirements, so that they can supply the small buyer all over the world.
They do another thing: they give credit. In the Baltic it was quite common for the merchants to supply the coal before the Baltic froze, and to give credit—though they gave credit wisely. I remember that Lord Cunliffe, the wise old Governor of the Bank of England, was once asked, "How do you know a good bill from a bad one?" He said, "By the smell." They knew who were the people to whom to give credit. I dare say they had a bad debt or two, but not many. That is something which a Government organisation have difficulty in doing. They do not know where to give credit. The moment they discriminate, they are "shot at" by the Government of a particular foreign national to whom they do not give credit. The ordinary merchant is not in that difficulty. It is recognised that, as between him and the foreign trader, he gives or withholds credit entirely on the merits of the case. These merchants all over the world have taken exchange risks in the past, and will be ready to do so again.
Moreover, that was a world-wide organisation. I think we are unique in this—it applies to-day to coal and oil—that you can arrange in London with a merchant to bunker a ship, British or foreign, for a voyage round the world; and that ship will get what it wants, where it wants it and at a firm price.
The whole of this enormously intricate system of trade, upon which the whole of our export depends, has been carried on on a narrow margin of profit. No one has suggested that the margin is excessive; indeed, it is a margin of profit which is agreed with the Cod Board, and I am pretty sure that the Coal Board themselves could not do it more cheaply. It does not end there. In many countries, these merchants have added to their business of supplying coal, the supplying of ships' stores and other merchanting activities. This has been very good business, and it has also enabled them to get extra good will and extra contracts in the supply of coal. This vast network of experience is always at the disposal of the Coal Board, together with all the invaluable information about the markets, and it will continue to be available to them unless the Coal Board come into competition, If, as the Minister says, they are to enter into competition with these merchants, then the Board can hardly expect the merchants to put the whole of their information

611
at the disposal of the Coal Board, subsidised by the taxpayers' money, to compete with them.
To-day these merchants are producing invaluable invisible exports. Are the Government not anxious about their export trade? I have been reading some of the things the President of the Board of Trade has been saying. I have been reading the experiences of sellers at the British Industries Fair. It is not all plain sailing. More and more are we going into the buyers' market, where the seller is courtier and the buyer is king. Surely these invisible exports, upon which we depend to make up this increasing gap—it increased by £20,000,000 last month—are more important than ever. I should have thought that if there is any co-ordination in planning in the Government, they should seek to stimulate and encourage the people who have created these invisible exports.
In coal it will not be plain sailing. There was talk (I am not sure whether here, but certainly there was in another place) about the Minister directing the coal here and there. Soon he will not be directing coal; he will be hunting for places where he can sell it. I venture to prophesy that in five years' time there will be not a shortage but a glut of coal in the world. The Silesian coalfields will be able to produce at least 100,000,000 tons of coal in a year; the Ruhr will get going; Belgium has a surplus of coal at the present moment; and the French coalfields will expand. There are also the Americans who never entered this field of coal export before the war. But they have entered it now, and they have vast resources. It is easy for the Americans, in their stride, to export 20,000,000 or 30,000,000 tons of coal. In those circumstances, I am perfectly certain the Coal Board will have a full-time job in trying to produce coal of the right quality and at a price at which people will be willing to buy it. As I have said, and as the American Commission themselves report, these merchants have built up this export trade in British coal, and they have maintained it; and I would have thought that more than ever in the difficult times to come, the Coal Board would need the whole of the experience, the facilities, the connections and the good will of the merchants of British coal.
I do not believe there is anybody in this House who will challenge any of the
612
statements which I have made. In those circumstances, could there be a more ill-advised moment to introduce such a proposal as this, or a more unfortunate moment for the Minister to try to butt in on this business. I submit that no case has been made for this new activity, and that an unanswerable case has been made against it. There is a tremendous amount of competition between these merchants; the only place in which there is no competition is in the nationalised industries. There is plenty of competition between merchants themselves—I know because I go from one to another—and between them and their foreign competitors.
If the Government merely want an insurance why cannot they accept my Amendment? It says that if the Government can establish a case where they ought to come in and exercise these overseas activities, let them make an Order and justify it; let them make an Order, either general or limited in its scope. Parliament would have to consider that Order at once. There would not be any delay, and Parliament would certainly consider it upon its merits and decide what to do. I submit that that is the proper way to deal with the matter, instead of asking to be allowed to do it without a vestige of justification, merely because the Minister wants new worlds to conquer—or perhaps a more appropriate metaphor would be that he wants new worlds to lose. Two years ago, Parliament declined to give him that power. The situation in regard to international trade is far more difficult to-day. The need for encouraging and maintaining the good will of these merchants is greater to-day than it was two years ago. I submit that there is no reason for giving the Minister these new powers. Therefore I ask the Government to accept this Amendment. I beg to move.
Amendment moved—
Page 2, line 23, at end insert the said proviso.—(Viscount Swinton.)
LORD RENNELL: I would like to add one word on a slightly different line. I think the noble Viscount tended to limit his remarks to a certain aspect of the anticipated activities of the Coal Board, should these powers be granted. There is, however, a matter of general principle involved here which is of great importance, not only in the context of coal but in the context also of future

613
programmes of the Labour Party. The Coal Act specifically limited the activities of the Coal Board to this country. This clause allows those activities to be extended, unfettered and untrammelled by any Parliamentary regulation or by any Parliamentary knowledge, to foreign countries. That in fact produces, or might produce, exactly the situation that so many of us have objected to in the case of other foreign countries. Your Lordships do not need to be reminded of the political, economic and diplomatic difficulties caused by Government selling agencies in foreign countries. We have had experiences of foreign Government selling agencies here, and those experiences have not been happy. Our relations might have been better in the past, but these agencies were a source of quite unnecessary friction. Therefore these powers ought not at this stage to be left within the unfettered discretion of the Coal Board itself, without Parliament having an opportunity of refusing its sanction to any one or other of these activities.
I know that an attractive case can be made for the setting up of a selling agency of the Coal Board in France or Italy—a large importer of British coal—or in other foreign countries. It may be an attractive set-up and some people may say that it is only right that this great industry should have its commercial representative, its own ambassador, who can take and accept orders. But consider where that will lead to if the nationalisation schemes are extended to other industries. Take the example of the chemical industry. Would not the nationalisation of that industry inevitably entail the chemical industry in this country having a Government selling agency in the United States, where a great many British chemical products are sold to-day? Your Lordships will begin to see, from this, the sources of friction which could arise. Although I am not prepared to go so far as to say that there should not be cases such as selling coal cargoes c.i.f., or having trade representation in certain places, I do say that these activities should not be embarked upon by the National Coal Board entirely at its own discretion without Parliament having a proper opportunity of refusing permission. On those grounds, I support the Amendment which has been moved by the noble Viscount, Lord Swinton.
LORD HAWKE: My noble Leader has covered the ground in such an excellent way that I am going to make only a few comments, but I cannot let the occasion pass without saying something on a matter about which I feel very strongly. The noble Lord who has just sat down has pointed out the dangers arising from Government trade agencies operating overseas What I would like to stress—and I am sure this is well known to the Minister already—are the reasons why proposals of this sort come forward. We know the very facile case that can be made out for selling c.i.f., and this, I have no doubt, is prompted by the fact that buyers are telling the National Coal Board that British coal is far too dear. They are probably saying to the Board: "Why cannot we buy coal from you direct? It would then be much cheaper." I spoke about that matter not long ago to a foreign buyer. He was not aware that the agent's commission was some sixpence per ton. Foreign buyers talk of coal as being at least £1 or 30s. a ton too dear. They hope that if the National Coal Board can be persuaded to sell c.i.f., 30s. will come off. We here know that, if it does, it will come off at the expense of the British taxpayer.
This suggestion of the foreign buyer is actively helped by a movement from within the National Coal Board itself. Anyone who has served in a gigantic State organisation, as I have done and as I think the Minister has done also, knows well the constant pressure there is to increase the ambit of its activities. Prestige, promotion and various other considerations come into it. Such things vary according to the number of people employed in a person's Department. No opportunity will ever be lost, therefore, for backing up some suggested further extension. There is no profit motive in this the motive is purely prestige, "Empire building" and so on. For that reason it is the Minister's duty to draw a line round these nationalised undertakings and say to them: "You shall go so far and no further." Because, unless that is done, I well know that annually there will come to Parliament requests from one or other of these organisations to expand its activities into some very plausible new line. The next step to selling c.i.f. is, of course, shipowning; it is logical from that to own bunker depôts overseas, and after that to go into the

615
oil business, and so on. There is no end to it. But I think I have said enough to show what is in my mind.
LORD MACDONALD OF GWAENYSGOR: I am not at all surprised that noble Lords opposite take this stand regarding the question of expansion of activities of the National Coal Board. It would be contrary to their political philosophy if they did not. This is a case where a fundamental difference exists between the two sides, and it is useless to pretend that it does not. And certainly it is a difference to which we shall find it difficult to accommodate ourselves. The National Coal Board have been in existence now over two years. They have had a rich experience, and that experience has taught them that it is necessary to do something with regard to exporting. The Committee may be amazed to learn, but I want your Lordships to know and I think you ought to know, that it has been brought to my knowledge that some British exporters have been engaged in selling Polish coal in markets supplied hitherto with British coal.
LORD HAWKE: May I ask whether it has not been the function of British merchants throughout the ages to sell goods throughout the world from one country to another?
LORD MACDONALD OF GWAENYSGOR: That may be so, but let us look at the Coal Board in all fairness. Here are a Board with multifarious and very onerous obligations imposed upon them. They are asked to run an industry in the interests of the country and they find British exporters trying to oust them from a market which they have had for a number of years.
VISCOUNT ELIBANK: May I ask the noble Lord whether British coal was available to these exporters at the same price?
LORD MACDONALD OF GWAENYSGOR: That market was, at that time, in the hands of the National Coal Board. British exporters then came along and robbed the National Coal Board of their market.
LORD HAWKE: The noble Lord has made very serious accusations against these people. Was this before or after
616
the National Coal Board put up the price of coal for export by 25s. a ton?
LORD MACDONALD OF GWAENYSGOR: It is useless to quibble on this issue—
VISCOUNT SWINTON: Really, the noble Lord has made a very grave allegation and he should substantiate it by chapter and verse.
LORD MACDONALD OF GWAENYSGOR: Let me substantiate it to this extent by chapter and verse. In a country not many miles from here the National Coal Board were selling coal, and they then found that a British exporter was endeavouring and, in fact, succeeding in selling Polish coal in that same market, and robbing the National Coal Board of that market.
VISCOUNT SWINTON: It is most important to get this right. The noble Lord says that the National Coal Board were selling coal. This must have been a domestic market, presumably, where the Coal Board had the right to sell coal. That was, I suggest, exactly the position which the Minister said he wanted to have, the position where he and other people would be selling in competition. Apparently the National Coal Board were so incompetent, even in a market which they held, that they could not continue to hold it.
LORD MACDONALD OF GWAENYSGOR: I do not think the noble Viscount, Lord Swinton, is in any way helping by continually making these disparaging remarks regarding the National Coal Board. I do not think that helps in any shape or form. The National Coal Board discovered this activity of which I have spoken, and they realised that they must safeguard their interests. What did they do? They said: "Place us in the same position as our predecessors held. We ask for no more than that." So long as exporters continue to do their job efficiently, they have nothing to fear from this clause. Let me state that categorically. Exporters, so long as they do their job efficiently, have nothing in the world to fear from this clause.
"But," say the National Coal Board, "if we are entrusted with these obligations, then enable us to carry them out." But what does the Amendment say? It

617
says that if the Board find they ought to engage in some minor overseas activity, they have to publicise it by going to both Houses of Parliament and then waiting for a decision. Does anyone suggest that we can carry on business successfully on those lines. This Amendment does not differentiate between major and minor operations. I did not expect it to do that, because of fundamental differences. Had the Opposition said that there were certain major operations, such as boring for coal or sinking a shaft, which ought to be subjected to some kind of Parliamentary approval, we could have understood. But to say that all minor operations shall be treated in the same way as major ones is entirely unfair to the National Coal Board.
Knowing the noble Viscount as I do, and knowing his knowledge of this industry, I thought he was going too far when he emphasised that in many cases merchants were carrying large stocks at overseas depôts at their own risk. Who were these exporters? In many cases, they were the coal owners themselves. And what were they doing? Like good business men they were saying, "It is rather heavy weather for us at home. We want to keep our colliers at work. That is far better, because the on-cost is so high when they are not working. We will ship our stock overseas." All the clause asks is that the National Coal Board should be given a chance to do something similar. They will have periods of heavy weather when the demand in this country will fall below the level of production. We should enable them to do the same as their predecessors. It is good business in the coal industry. I am prepared to say that I feel there are certain activities of a major kind which should be subject to Parliamentary control. I do not know whether the supporters of the Amendment would accept the idea that those should have the approval of the Minister.
VISCOUNT SWINTON: I thought it was of Parliament.
LORD MACDONALD OF GWAENYSGOR: I thought the noble Viscount might accept that as a compromise. The noble Viscount referred to the National Coal Board as an agency of the Government. That is a misconception which needs to be cleared away. The National Coal Board is not an
618
agency of the Government. Would the noble Viscount suggest that the British Transport Commission or B.O.A.C. experienced the diplomatic difficulties of which he spoke?
VISCOUNT SWINTON: The British Transport Commission do not carry out any such activities abroad the B.O.A.C., yes.
LORD MACDONALD OF GWAENYSGOR: Do the French National Railways experience these difficulties in running their activities in this country?
VISCOUNT SWINTON: I am not aware that the French National Railways run in England. I thought they ran in France.
LORD MACDONALD OF GWAENYSGOR: The French Railways are in this country. It is useless for the noble Viscount to try to create the kind of scarifying scene which I thought he made on Second Reading by pretending that this clause is going to create international dissension. We know that the Poles to-day are busy in different countries and in London, trying to sell Polish coal. In my opinion, it is very unfair to saddle the National Coal Board with all these heavy responsibilities and deny to them the machinery they need in order to discharge those responsibilities. I do not know what mood the noble Viscount is in to-day, but it might be that between now and Report stage we could come to a compromise regarding some kind of Parliamentary approval of major operations. But frankly this Amendment could not be accepted.
LORD TEVIOT: In order to get this matter clear, may I ask the noble Lord a question? He has made a very serious accusation against some of our coal agents abroad. Does that mean that they have deliberately not sold coal that was available, and have instead substituted other coal at the same price? Does it mean that there was a demand for British coal and the agents refused to sell it. Was that the accusation?
LORD MACDONALD OF GWAENYSGOR: Let us be quite clear on this matter. Sometimes we may accept inferior coal because of differentiations of price, as the noble Lord suggests. What happened in a country very near here was that British coal was being sold. A British

619
exporter offered Polish coal in preference to British coal and the Polish coal was bought and the British coal left unsold.
LORD TEVIOT: Was ours available?
LORD MACDONALD OF GWAENYSGOR: Our coal was available, the same kind of coal as they had been receiving for years.
SEVERAL NOBLE LORDS: And the price?
LORD MACDONALD OF GWAENYSGOR: I could not say about price. It may be that the point I am putting over is not acceptable. It is that the British exporter himself was busily engaged in an activity which to some extent was hampering the National Coal Board. Hence the National Coal Board say that they should be in the same position as the coal owners were in before nationalisation.
VISCOUNT SWINTON: My Lords, I gather that Ireland is the country referred to by the noble Lord in this roundabout way. I do not see why it cannot be mentioned by name.
LORD MACDONALD OF GWAENYSGOR: I thought it might not be mentioned to-day.
VISCOUNT SWINTON: The Republic of Ireland or Eire—we all know where it was. The National Coal Board were selling English coal, whereas the buyer wanted coal presumably of a certain quality and at a certain price. It is absurd to say that a British merchant would rather sell Polish coal than British. It is much simpler to get delivery of British coal and ship it from Cardiff to Dublin than to bring in Polish coal from Gdynia. Of course a merchant, whatever his nationality, would much rather ship British coal than any other. But I gather that British coal was beaten in the Irish market because it was either too dear or not of the quality the buyer wanted. The "wickedness" of this was that the Irish buyer insisted on having a particular kind of coal at a particular price and, the National Coal Board being unable to provide coal at that price, a British merchant filled the order with Polish coal. What would have happened if he had not? A Polish merchant would have filled the order with the Polish coal. Was it then so iniquitous?
LORD MACDONALD OF GWAENYSGOR: My Lords, in regard to the price, I am advised that the price of the Polish coal was comparable c.i.f. with British coal and the coal was comparable in quality. I do not need to remind your Lordships that the Poles do not usually give coal away.
4.39 p.m.
LORD CLYDESMUIR: My Lords, having known the noble Lord, Lord Macdonald, in another place for many years, and having always admired his fair-minded attitude towards problems which arise, I feel that, perhaps through lack of information on this subject, he has been less than usually generous to the coal exporters on the great part which they are playing at the present time towards our economic recovery. In the few words I am going to say, I shall quote to your Lordships figures from the publication, Coal Figures, issued by the National Coal Board, to which I drew attention on Second Reading. The position is that while in 1938 our coal exports to all countries were 35,000,000 tons, they dropped to something almost negligible in 1947—to a figure of a little over 1,000,000 tons. They had been slightly higher the year before, but due to various difficulties that we all know, they dropped to that very low figure.
It is of real interest, in connection with this Amendment, that between 1947 and 1948 coal exports rose to 10,500,000 tons—a substantial rise. There is still a long way to go to attain our pre-war figures, but that is a notable contribution towards our economic recovery: more coal has been raised and a considerable amount more coal exported. I feel, therefore, that we are perhaps losing sight of the wood and looking at the trees. The noble Lord instanced one case of a shortcoming on the part of certain coal exporters. But why, for that reason, plunge into such a wide departure as is proposed in the Bill? The Amendment enables the Minister, if he has evidence of some real shortcoming, to come to Parliament and ask for power to deal with it but the Bill provides a very wide departure into a new field fraught with danger. I do not intend to go over the points so admirably made by my noble friend, but I do put it to your Lordships that the figures I have quoted show a very marked improvement in our exports.

621
By whom has that improvement been brought about? It has been brought about by the very exporters to whom to-day the Government and the noble Lord, briefed as he has been, are not paying a very high tribute. Some of the countries where the greatest exports have taken place are worth noting. In 1947 we exported to Spain only 9,000 tons; last year it went up to 627,000 tons, well on the way to the pre-war figure. Will the Government increase their exports to Spain by going into the trade themselves? Will the Government increase their exports to other countries by going into the trade themselves? In Italy we increased our exports very largely; and in the Argentine Republic we increased our exports from nothing to nearly 1,000,000 tons. I quote these figures only to show that our exporters are making real progress in markets which might not be so susceptible to Government trading.
THE MARQUESS OF SALISBURY: My Lords, we had the suggestion a moment ago from the noble Lord, Lord Macdonald, that we should allow this matter to run over to the Report stage. I do not think he put forward that suggestion in order that the Government might have time to consider the situation further, but so that we might have time to consider the situation further; at least, that is the impression I gained from his remarks. I would agree with him that the issue with which we are here involved is a profound and fundamental one: it is really the issue between monopoly and competition. After all, the whole tempo of the noble Lord's speech was that of a monopolist. It is quite easy for the Government, if they have a majority in Parliament, to create a monopoly at home. They can say that nobody shall produce a certain commodity but themselves, and nobody shall sell it but themselves; and if the price is rather higher than the people like to pay, they still have to pay it, because the Government have a monopoly. That is the position in the home market.
But when we come to the foreign market there is a very different situation. There the Government are up against competition, it may be from the home merchants, and it may be from foreign merchants. They do not like it, and I do not altogether blame them. They are
622
monopolists used to controlling the situation, and they suddenly find a situation which they cannot control. The noble Lord complained bitterly, and said: "Here is the Coal Board wanting to sell coal at a certain price, and they find somebody else selling coal at a price at which they cannot compete." I am afraid—I do not say this of the noble Lord; I have too great a respect for him—that the Government are going to extend the operation of the Coal Board in order to cover the foreign market, and the next thing will be that they will deprive the home merchants of their export business. That is the issue, and it is a fundamental one.
We are always being told by the Government that in this and that trade (it is going to happen in the steel trade, I understand, if the Iron and Steel Bill becomes an Act) there is to be competition between the Government and private enterprise, which it is said will be to the advantage of both. But what will happen is the sort of thing with which we are faced here; it will merely be made impossible for private enterprise to carry on. It is our policy to avoid that in this country: that is what we stand for, and that is why we consider this to be a very important issue. For that reason, though I appreciate the noble Lord's offer that the matter should be considered further, I am afraid there is no ground for conversation on this particular Amendment, and I think it had better go to a Division.
LORD MACDONALD OF GWAENYSGOR: My Lords, to avoid misunderstanding, I would just say that my suggestion was not only that the noble Viscount, Lord Swinton, and his colleagues should consider the Amendment further, but also that the Government should consider it, in order to find out what major operations might be made the subject of control.
VISCOUNT SWINTON: My Lords, I do not think there is any difference. The issue is quite clear. We do not think the Coal Board, which to-day is forbidden by Parliament to engage in these activities, should engage in them without coming to Parliament and justifying themselves. If they have a big case, they can justify a big case; if they have a small one, they can justify that.

623
But the issue is not the size of the illegitimate child. It is: Is this a legitimate or an illegitimate child? Quite frankly, we say it is illegitimate.
Resolved in the affirmative, and Amendment agreed to accordingly.
Clause 2, as amended, agreed to.
Clause 3:
Termination of certain long-term contracts transferred to the Board.
3.—(1) This section applies to provisions of any contract made before the primary vesting date to which a colliery concern or a class A or class B subsidiary of a colliery concern is a party, being provisions—
(2) If the Board are of opinion that they are, or are likely to be, hampered in the efficient performance of their functions by the operation of provisions of a contract, being provisions to which this section applies, they may, by notice in writing served on the purchaser, agent or transferee, as the case may be, determine the operation of the provisions on such date during the period of two years beginning with the first day of January, nineteen hundred and fifty, as may be specified in the notice, not being a date earlier than six months from the date of the service of the notice, and—
(a) if the contract does not comprise provisions other than those to which this section applies, it shall, as between the Board and the purchaser, agent or transferee, as the case may be, be deemed to be frustrated on that date, and the Board and the purchaser, agent or transferee, as the case may
On Question: Whether the said proviso shall be there inserted?
Their Lordships divided: Contents, 49; Not-Contents, 18.

CONTENTS

Cholmondeley, M.

Lambert, V.

Gifford, L.

Salisbury, M.

Long, V.

Hatherton, L. [Teller.]

Townshend, M.

Margesson, V.

Hawke, L.

Willingdon, M.

Swinton, V.

Hutchison of Montrose, L.

Trenchard, V.

Kenilworth, L.

Bathurst, E.

Llewellin, L.

Buckinghamshire, E.

Aberdare, L.

O'Hagan, L.

De La Warr, E.

Ashburton, L.

Rennell, L.

Doncaster, E. (D. Buccleuch and Queensberry.)

Braye, L.

Rochdale, L.

Carrington, L. [Teller.]

Sandhurst, L.

Munster, E.

Clanwilliam, L. (E. Clanwilliam.)

Savile, L.

Onslow, E.

Sempill, L.

Scarbrough, E.

Clydesmuir, L.

Sinclair, L.

Cranworth, L.

Soulbury, L.

Bridgeman, V.

Cunliffe, L.

Teviot, L.

Elibank, V.

Derwent, L.

Teynham, L.

Esher, V.

Fairfax of Cameron, L.

Tweedsmuir, L.

Hailsham, V.

Gage, L. (V. Gage.)

Wolverton, L.

NOT-CONTENTS

Jowitt, V. (L. Chancellor.)

Ammon, L.

Macdonald of Gwaenysgor, L.

Douglas of Kirtleside, L.

Marley, L.

Addison, V. (L. Privy Seal.)

Hare, L. (E. Listowel.)

Merthyr, L.

Henderson, L.

Pethick-Lawrence, L.

St. Davids, V.

Holden, L.

Rochester, L.

Kershaw, L.

Shepherd, L. [Teller.]

Adams, L.

Lucas of Chilworth, L. [Teller.]

Williams, L.

be, shall for that reason be deemed to be discharged from the further performance of their obligations by virtue of the provisions; and
(b) if the contract comprises provisions other than provisions to which this section applies, so much of it as comprises provisions to which this section applies shall be treated as being a separate contract which shall, as between the Board and the purchaser, agent or transferee, as the case may be, be deemed to be frustrated on that date, and the Board and the purchaser, agent or transferee, as the case may be, shall, for that reason, be deemed to be discharged from the further performance of their obligations by virtue of the provisions to which this section applies.
4.55 p.m.
LORD HAWKE LORD HAWKE moved, in subsection (1), after "contract" to insert:
"being a contract other than one entered into in the ordinary course of business and made between parties independent of each other who negotiated at arms length—".
The noble Lord said: Clause 3 of the Bill deals with contracts, and in moving this Amendment I think one should refer to the condition of contracts generally under the Bill. Under the principal Act of 1946 the Coal Board in the main took

625
over the assets and the liabilities of the collieries, and their contracts. It had no power under that Act to terminate contracts unless they had been entered into after the magic date of August, 1945. This Bill gives the Board power to terminate contracts if they think they will hamper, or are liable to hamper, them in their legitimate operations.
The contracts which can be cancelled are of various sorts. They must be not terminable before the end of 1951, and they must fall into three categories—in connection with the selling of their products, the employment of agencies or the restriction of the activities of a colliery or a subsidiary. To terminate the contracts, the Board must give six months' notice, and the termination must take place during the years 1950 or 1951. The Board pay compensation, and the compensation can be assessed by a tribunal. In assessing that compensation, the tribunal must consider what would have been the terms of the contracts if they had been entered into between parties who were not connected and who were bargaining as if in the open market.
In this Amendment, we are trying to take out of the zone or region of terminability certain types of contract. They must, first, have been contracts made in the ordinary course of business; secondly, contracts made between parties independent of each other, and thirdly, contracts made between parties who negotiated at arms length. In another place, and at other times, various statements have been made about the contracts inherited by the National Coal Board. They were alleged to have been peculiar, and so on. The Committee will note that there are three qualifications for removal from this terminability, which are designed to cover only those contracts which it clearly seems equitable should not be terminated. Now our reason for doing this is on the general ground of the sanctity of contracts. As a nation, we stand to gain or lose more than any other by the sanctity of contracts, and we believe that any opportunity given to the Board to terminate legitimate contracts would be most unfortunate, in that it would create awkward precedents against the Board and against other of our nationalised activities in other countries.
Admittedly, there must be compensation under the clause for any act of termination.
626
On the other hand, compensation is not everything; a contract is often much more valuable than compensation. And, in any case, compensation does nothing towards restoring the doctrine of the sanctity of contracts. Moreover, we cannot find any provision in the Bill for enabling the other side to cancel contracts if they hamper or are likely to hamper the other side—and as a result of the change of ownership there may be such contracts. What is sauce for the goose should be sauce for the gander; but we do not go so far as giving the other side a chance. In another place, the Parliamentary Secretary admitted that power was not required to terminate contracts of the straightforward kind that I instance; and in seeking to make sure that the Bill carries this out we are virtually giving effect to the wishes of the Parliamentary Secretary himself. I beg to move.
Amendment moved—
Page 2, line 24, at end insert the said words.—(Lord Hawke.)
LORD MACDONALD OF GWAENYSGOR: I would like at once to dispel any idea that this clause affects the sanctity of contracts. It is not intended to do that. What it deals with is a specific type of contract that was made prior to nationalisation. As regards the particular Amendment, I have much sympathy with it, and I would like to suggest to the Committee that we might consider whether it is possible, in dealing with the question, of date, to come to an agreement. Mention is made in the Amendment of negotiation "at arms length," and the question is, prior to what date should a contract have been made to have the advantage of this Amendment? I suggest, for the consideration of noble Lords opposite, that the vesting date may be the testing date. I think that if that were acceptable there is no reason why we should not accept the Amendment; but we must have some specific date.
VISCOUNT SWINTON: By that I think the noble Lord means that the parties were at arm's length when the contract was made and remained at arms length as at the vesting date.
LORD MACDONALD OF GWAENYSGOR: Yes, that is all.
LORD HAWKE: If it is the intention of His Majesty's Government to bring forward an Amendment on the Report stage to that effect, I think that will prove acceptable to us, and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD HAWKE LORD HAWKE moved, in subsection (2) after "may" to insert "subject as hereinafter provided—". The noble Lord said: We move still further into this morass of contracts. Clause 3 (2) (b) of the Bill, in abbreviated form, runs:
"if the contract comprises provisions other than provisions to which this section applies, so much of it as comprises provisions to which this section applies shall be treated as being a separate contract … and shall be deemed to be frustrated on that date …"
By this Amendment we are seeking to put right a position which is, I must confess, by no means clear to us. We believe that under the wording of the Bill it is quite possible for there to be in existence a contract between the National Coal Board and some other party, part of the provisions of which could be terminated under the provisions of this clause, but part of which could not. It might redound to the advantage of the National Coal Board to terminate that part which they can terminate, leaving high and dry that portion of the contract which might prove burdensome upon the other party.
The sort of thing I tentatively put forward as a contract which might fall within that definition would be this. Suppose they had a contract for the sale of coal to some agent, and a part of that contract or consideration was that he should keep a branch open in Timbuctoo. Under this clause the National Coal Board could terminate the burdensome contract for selling coal, but the other portion of the contract, to keep the branch open in Timbuctoo, would still persist; it might well be to the advantage of the National Coal Board to have a British agent with an office in Timbuctoo, notwithstanding that they did not have to supply him with coal. It is to relieve the other party in such cases that we have put forward this Amendment. I trust I have made myself clear to the noble and learned Viscount and that he will be able to give us some assurance in the matter. I beg to move.
Amendment moved—
Page 3, line 20, after ("may") insert ("subject as hereinafter provided—").—(Lord Hawke.)
THE LORD CHANCELLOR: As the words "subject as hereinafter provided—" are, of course, a mere paving Amendment for what is to come, it may be to your Lordships' convenience if I follow the noble Lord's example and discuss the substance rather than the form that is here involved. I think there is a little danger of confusion here, and I agree with the noble Lord that the matter is not very clear. I think that what we have to consider is this. What is proposed is not that the Coal Board should be able to get rid of part of a contract; the Board cannot pick and choose and get rid of bits of the contract. But, of course, an obligation arises from the fact that the Coal Board took over sometimes, not a whole contract, but only part of a contract. Take the rather fanciful case of the contract to supply coal for a long period of time, and suppose there is an obligation to keep an office open in Timbuctoo. That is a contract made between A and B before the Coal Board came on the scene, and the Board took over only that part of the contract which relates to the supply of coal. The particular part of the contract which relates to the office in Timbuctoo remains a contract between A and B. The Coal Board cannot possibly give notice of termination of that, or indeed act on it in any way, because they are not parties to it, and they have no concern with it. I believe the underlying fallacy is that the noble Lord has thought that the Coal Board can repudiate a part of a contract and not repudiate another part of the same contract. I readily agree that, if that were so, it would be a most monstrous doctrine; but it is not so. I can give the noble Lord further information about this which will reassure him. The Coal Board have to think out their policy; and they have, in certain circumstances, for instance, to make up their minds whether to utilise a particular pit or a particular group of pits, or whether they are going to close them down as uneconomical.
The noble Viscount, Lord Swinton, knows much better than I do that it not infrequently happens that there is a particular contract to supply coal from a particular pit, or it may be coal of a particular quality which is obtained only from that particular pit or group of pits. In the interests of policy and in the public interest it may be that it would

629
be right to close down those pits altogether because they are uneconomical. It really would be a lamentable thing that the Coal Board should be obliged to keep open a particular pit, which ex hypothesi is uneconomical, because there is attached to it a string in the nature of a contract that they shall supply coal from that particular pit. It is for that reason that we think it necessary to have these provisions, and that is the sort of case we have in mind. It is not merely a case of an old contract to supply at a low price which is now uneconomical; the case which we have in mind is where there is an obligation to supply either a particular grade of coal or coal from a particular pit, and where policy will be that that grade or that pit is no longer wanted in the future. In those circumstances, we think it is essential that the Coal Board should have this right to terminate a contract, while, of course, paying compensation. I hope that I have made it plain that they must terminate the whole of the contract, and that they should not, and cannot, be allowed to pick and choose as to what part they shall terminate. I hope that with that assurance the noble Lord will understand the position, and will not press his Amendment.
VISCOUNT SWINTON: Your Lordships are deeply indebted to the noble and learned Viscount the Lord Chancellor for that extremely clear explanation of what I am bound to say is a difficult clause to understand. If I may venture to offer advice to my noble friend, I suggest that probably the wise thing would be not to move any of these Amendments now. In the light of the elucidating remarks made by the Lord Chancellor perhaps he on his part and we on our part may consider further (though I am not sure that that applies with regard to what goes to arbitration) whether the clause ought to be amended in order to effect what is the common intention. It is very satisfactory to know that the Board would have to terminate all or nothing. The only words, to which my attention has been drawn, which I would like the Lord Chancellor to consider, are the words in line 36 of page 3:
"… so much of it as comprises provisions to which this section applies."
I take it that that does not mean some part of the contract as subsisting between
630
the Coal Board and the party concerned, but all that part of a contract which exists between the Coal Board and the individual, although another part of the contract may subsist between the individual and somebody else?
THE LORD CHANCELLOR: That is precisely right.
VISCOUNT SWINTON: Then those words seem to be all right. Another point I wish to raise is this. "Hampered" is a word for which there is no definition in the Interpretation Clause, and I read Clause 3 as meaning, that if the Coal Board had entered into a contract to supply coal at a low price, that might be regarded by them as a hampering contract, because the coal might be supplied at half the price which they could obtain from somebody else to-day on the open market. The Lord Chancellor has told us that that is not in the least the intention, that the only contract which can be determined is a contract which really (to paraphrase it) in the future it will become impossible for the Coal Board to honour. In my youth, I learned that there was a doctrine of supervenient impossibility.
THE LORD CHANCELLOR: That is right.
VISCOUNT SWINTON: It becomes impossible. It is a contract which is going to become impossible, not one which is going to become merely inconvenient. I think that the draftsman ought to look at this and see whether any words ought to be added to qualify "hampered," such as: "by reason of its being, in the opinion of the Coal Board, impossible to do it." That would show that the reason for the termination is not commercial: that the Board cannot terminate a contract because it is commercially inconvenient; but only because it will become impossible to honour it. Provided that that is the intention, as I am sure it is, then I agree that the Coal Board must be the judge, because it seems to me that it is only the Coal Board who can say: "This pit is going to close down in three years' time." In the light of the natural conditions which follow from that closing down, there must be the right to terminate, because events will terminate it for you. I think the whole clause could be looked at to see that those intentions are given effect to, and that these points are met.
THE LORD CHANCELLOR: I will certainly ask the draftsman to look at it again. I will consult with anyone my noble friend desires me to. The difficulty of putting it into words is this. In a case where it is obviously sensible to give up working from a particular pit which is running at a heavy loss, I doubt whether that would be a supervenient impossibility because by a deliberate act the Board give up working that particular pit. I do not think that the doctrine of supervenient impossibility would come in, as it would if there were a landslide or a flood. That is the difficulty of having other words. I have given your Lordships an assurance that I will ask the draftsman to look at the clause again to see if he can devise some form of words (although I doubt if he can) to put down on paper.
LORD HAWKE: Light is beginning to dawn, but even now it is extremely difficult for a simple and wicked Tory to understand this clause. I hope that the Lord Chancellor will ask the draftsman to look at it from the point of view that, as it stands at present, read by a layman, the clause appears to provide that the National Coal Board can get rid of half of a contract and leave somebody else with the other half. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
5.19 p.m.
LORD CLYDESMUIR LORD CLYDESMUIR moved, after subsection (2) to insert:
"(3) The purchaser, agent or transferee, as the case may be, may within two months after the date of the service upon him of the notice given by the Board under the last foregoing subsection refer to arbitration under the principal Act the question whether or not the operation of the provisions of the contract or any of them ought to be determined under this section and no such notice as aforesaid shall be valid or have any effect unless it contains a statement of the right hereinbefore conferred to refer the said question to arbitration as aforesaid and if the arbitration tribunal are satisfied on any such reference that the Board are hampered in the efficient performance of their functions the tribunal shall confirm the notice and if not so satisfied shall determine that the notice shall be of no effect."
The noble Lord said: It would appear convenient that we should discuss this Amendment and the next one, at page 4, line 33, at the same time, because they concern the same point—the question of arbitration. May I put forward my arguments to cover both Amendments? Much
632
of what the Lord Chancellor has said affects what I was going to say and reassures us considerably on various points. Yet there remain some points that I would like to argue for a moment. The Amendments which I move would give the right to the purchaser, agent or transferee to go to arbitration under the terms of the principal Act. This Amendment refers not to the question of compensation, but to whether there should be a right to go to arbitration on the Board's opinion in relation to the determination of a contract.
I do not want to enlarge on what has been said already, but it seems that the powers which the Board are taking are very great, and that it would not be unreasonable that anyone affected should be able to call arbitration to his aid. The second Amendment goes into some detail on several points which might be the subject of arbitration, but does not add materially to the main point which I make. The purpose of the Amendment is to give the opportunity to anyone so affected to take the whole question, and not merely the amount of compensation, to arbitration. I hope the noble and learned Viscount the Lord Chancellor can make a statement on that subject.
Amendment moved—
Page 3, line 45, at end insert the said subsection.—(Lord Clydesmuir.)
THE LORD CHANCELLOR: The noble Lord has put the position clearly and correctly, as he always does. What I feel is that this is really not a fit and proper matter for arbitration. I do not quite see how one can arbitrate on it. Let us take the case we were taking just now, where the Coal Board make up their mind to close down a group of pits in some part of the country and concentrate on pits in another part of the country; and they make up their mind that that is the right, the best, and the most sensible policy to pursue. What we have just done is more or less to agree (it being the fact that they take that policy, and assuming that it is the sensible and right policy) that they should not be hampered, in taking it, by the leading strings of some long-term contract applying to some particular pit. I do not think it is possible to leave the question of policy to an arbitrator. Whether they are going to close down this pit or that group of pits depends upon

633
the whole outline of policy on their general plan. I do not see how we can leave a particular question of that sort to an arbitrator. I think the only way it can be dealt with is to say that the Coal Board must make up their minds about policy, and having made up their minds, if they create hardship for somebody by breaking a contract, they must pay compensation. I believe the noble Lord will agree that it is impossible to take before an arbitrator this judiciable issue as to whether or not the Board should stop working this particular pit or that group of pits. It would be impossible to form an opinion upon it unless one surveyed the whole field, and I do not believe that that is possible. For that reason, I hope the noble Lord will consider it and, if he thinks I am right, that he will withdraw his Amendment.
VISCOUNT SWINTON: I am inclined to agree with that, now that we know the position. We had put down this Amendment owing to a misunderstanding about the word "hampered." Obviously, if it meant commercially hampered, then that would be a judiciable issue. On the other hand, where it is a question of the Coal Board deciding whether or not to close down a particular pit, I entirely agree that that is the duty upon the Coal Board—and nobody but the Coal Board can discharge it. Once they have discharged it, then the contract terminates, and the whole question of what is reasonable in the way of compensation goes to the arbitrator. So long as that is the intention, I do not think we can ask for more.
LORD CLYDESMUIR: I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clause 4:
Superannuation, etc., rights
(2) Subsection (2) of the said section thirty-seven (which provides that, in the case of persons who have been in employment in or in connection with coal industry activities or transferred allied activities before the primary or other relevant vesting date, the regulations to be made for the purposes of subsection (1) of that section shall be so framed as to secure, amongst other things, that where an expectation of accruer, whether as of right or under customary practice, of any particular benefits in favour of any such person, or in favour of another person by reference to his
634
employment, ceases or is prejudiced by reason of his ceasing in consequence of the passing of that Act to be employed by his previous employer or to be employed in the activities aforesaid, the same benefits, or substituted benefits not less advantageous, shall be provided for under the regulations), shall be deemed to have been enacted with the omission of the words "or an expectation of accruer (whether as of right or under customary practice) of," but the said regulations shall be so framed as to secure that where, in the case of a person to whom the said subsection (2), as amended by the foregoing subsection, applies, such an expectation as aforesaid ceases or prejudiced by reason of his ceasing in consequence of the passing of the principal Act to be employed by his previous employer or to be employed in activities to which paragraph (a) of that subsection, as so amended, applies, there shall be provided in his favour or in favour of another person by reference to his employment, as compensation for the Lesser of or prejudice to that expectation, benefits ascertained by reference—

(a) to the period of employment to service wherein that expectation was ascribable; and

(b) (except where the benefits expected to accrue would not have been ascertained by reference to emoluments enjoyed by him), to the emoluments enjoyed by him during that period:

Provided that this subsection, so far as it relates to the framing of regulations, shall have effect subject to such limitations as may be prescribed for meeting cases in which any such expectations as aforesaid may have been created, otherwise than in the ordinary course, in connection with any provision made by the principal Act or with any anticipation of the making of any such provision.
VISCOUNT SWINTON VISCOUNT SWINTON moved to leave out subsection (2). The noble Viscount said: We now come to an issue which is, I think, a very simple but very important one—namely, whether the Government are, in fact, by subsection (2)—I do not take exception to subsection (1)—seeking to avoid or evade the clear pledge which was given on the introduction or before the introduction of the principal Act, and which is given effect to by Section 37 of that Act. I must trouble your Lordships for a few moments, because we must see exactly what the pledge was and what the Act of Parliament lays down. Your Lordships will agree that Parliament has always been scrupulous to safeguard the position of employees, not only in nationalisation Bills but in any of the old amalgamation Bills to which we were accustomed in pre-nationalisation times. Parliament has always been scrupulous

635
to safeguard the position of an employee, not only in his legal rights, which, indeed, might remain enforceable, but in his justifiable expectations. If I may put it in a common phrase, what Parliament has always to safeguard is that, by reason of an amalgamation, nationalisation or public purchase, a man employed in the industry should not be worse off.
I think that was common ground in regard to coal nationalisation. Mr. Shinwell, who was the first Minister, made that perfectly clear when on April 2, 1946, in Standing Committee, he said:
"It is our intention that this model employer, the National Coal Board, shall deal fairly and squarely with its employees, and with those who have been in the service of colliery undertakings and subsidiary undertakings. That is our intention, and I have no doubt that it will be fully complied with."
I must say that I think the Minister was as good as his word. I forget whether we made any Amendments here, but there was no dispute between the two Houses about it at all. Section 37 (2) of the principal Act carried out this intention perfectly clearly. I must read it to your Lordships. It is:
"In the case of persons, whether taken into the service of the Board or not, who have been in employment in or in connection with coal industry activities or transferred allied activities before the primary or other relevant vesting date, the regulations"—
that is, the regulations for compensation—
"to be made for the purposes of the preceding subsection"—
that, as I say, deals with compensation—
"shall be so framed as to secure that, where either (a) a right to"—
that is a legal right, and now we come to the important words—
"or an expectation of accruer (whether as of right or under customary practice) of, any particular benefits in favour of any such person, or in favour of another person by reference to his employment, ceases or is prejudiced by reason of his ceasing in consequence of the passing of this Act to be employed by his previous employer or to be employed in the activities aforesaid"—
and then I need not bother your Lordships with (b). Then it goes on:
"the same benefits, or substituted benefits not less advantageous, shall be provided for under the regulations."
That entirely confirms the pledge that, as I have commonly put it, nobody should be worse off. Indeed, the present Minister confirmed that that was the position
636
under the regulations which he would have to make, and on July 9, 1946, he said:
"I would emphasise, however, that the regulations which are made must provide for the same benefits or substituted benefits not less advantageous than those previously enjoyed either as of tight or under customary practice."
That was the position under the principal Act. Subsection (2) of Clause 4 of this Bill would, quite definitely, revoke that protection which Parliament laid down. If the Committee look at subsection (2), they will see that at line 30 on page 5 it says that subsection (2) of Section 37, which is the section giving the protection:
"shall be deemed to have been enacted with the omission of the words or an expectation of accruer (whether as of right or under customary practice) of,'…"
Then it goes on to lay down what the regulations shall provide instead. There is no doubt at all that this new clause will take away from some men what Section 37 of the principal Act deliberately gave them. The Solicitor-General said that in terms. I think I quoted his words on Second Reading, but I would again read what he said:
"… Section 37 (2) (a) of the Coal Industry Nationalisation Act, 1946, created the obligation that regulations must not be less advantageous than the right or expectation in substitution for which they provide a benefit. It is these words 'or expectation' which have been found in practice not really satisfactory.…"
I am not quite sure who found them not really satisfactory. It may well be that the Coal Board who were under obligation to pay thought they were not satisfactory. But the man who was going to be paid, I should think, found them highly satisfactory.
The Solicitor-General went on to say:
"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."
There is not the least doubt that in some cases it will be the reverse. I am not saying that the Coal Board were not quite right to improve the conditions of some of their employees if they thought those conditions were not good enough. Of course they were right—they are "model employers." If necessary, they ought to improve conditions, pensions or whatever it may be. But that is no excuse for taking away something from someone else. Because you are making

637
one man better off, that is no reason for making someone else worse off. It is all right, of course, to make the rich poorer and to make the poor richer, but there is not even that excuse here. It is deliberately making men worse off. The Minister was very frank and he spoke bluntly of the thesis that Parliament can break a statutory pledge if it pleases. Of course, legally, a Parliament may do anything at all; but surely there are certain moral obligations resting upon it.
The Minister's language was so odd that I think your Lordships ought to appreciate it. He said, on February 10 this year:
"It is perfectly clear that all I was saying in reply … was that the regulations had to be made and had to provide the same benefits or substituted benefits not less advantageous than those previously enjoyed either as of right or under customary practice. In fact, regulations were made, so if any pledge was given it was carried out."
There was no doubt about the pledge. The Minister went on to say:
"but there was no pledge given to refrain in all circumstances from introducing an amending Bill to clarify the position."
"Clarify the position," it would seem, means to make someone worse off than Parliament made him under Section 37 of the principal Act. I think that "clarify the position" in that connection is a terminological inexactitude. At any rate, it is not exactly the phrase one would have used. "Clarify" here, is, apparently, to alter the position to the detriment of the individual. Ribbentrop, I believe, used to say that pledges and undertakings only held rebus sic stantibus—the conditions altered and the pledge was not binding. I do not think that, as a matter of fact, Ribbentrop worried very much whether the conditions altered or not. Here the conditions have not altered at all. The Minister says frankly—if that is the right word—the pledge is not to be binding if the Government find it unsatisfactory or inconvenient.
I should say in passing that although it is true that the words which the noble Lord, Lord Macdonald, has put down, to make alterations in line 41 and line 43, clarify the position a little, I think he would agree that they do not alter what I have said. The man would still be worse off. Let me make that clear. Hitherto a man has been entitled to say:
638
"I have an expectation of accruer. If I went on in my employment I should rise to such and such a position, or have the chance of doing so. If I did, I should get this pension right." What the clause says, even with Lord Macdonald's Amendments to it, is that the man shall have nothing in respect of his future expectations; he shall have compensation but that compensation will be based on the number of years during which he has been serving and upon the emoluments he has received during those years. He shall have nothing, the clause says, for his future chance. That is certainly taking away something from a man.
It is said that it would be very difficult to assess this future chance. I do not know that it would be so very difficult. I believe that, in firms which actually had this practice, if a man went on and attained to a position, he received all the emoluments which belonged to that position, including the pension rights. If he left, I believe he was given something as a sort of assessment of the future which he might have expected to enjoy. I do not say that it is not difficult to assess what the chance is. One cannot say for certain that a particular racehorse is going to win a race; but it has a certain value because it has a sporting chance, even if it is only an outside chance. You do not say: "We do not know for certain that that horse is going to win the race; therefore, let us discount all its hopes and expectations, treating them as valueless." As I say, this may be a difficult matter to assess, but it is not an impossible one. The noble Lord, Lord Macdonald, knows that quite well, because he constantly wagers his expectation on these hopes.
The real issue here is, are we going to keep faith or are we frit? I put aside the Minister's argument that it is all right for Parliament to give a pledge (and admittedly he made some regulations), but, of course, there was nothing to stop him changing them all round and abandoning the pledge. I am sure that that argument will not be advanced here. Certainly, it would not be heard with great tolerance if it were. We are driven back to this question: Are we to get out of this pledge because it may be very difficult to assess what future chance a man has? It is not always easy to keep faith, in any walk of life, bug it has not hitherto,

639
I think, been held in religion or in morals that a good reason for breaking faith is that it is difficult to keep faith. I submit, whether difficult or not, we should keep faith and that we should not accept this subsection. I beg to move.
Amendment moved—
Page 5, line 17, leave out subsection (2).—(Viscount Swinton.)
5.40 p.m.
THE LORD CHANCELLOR: This is a difficult clause to expound, and I do not think the noble Viscount has quite done justice to it by treating it as though we were seeking to break faith. May I give your Lordships a simple illustration, and ask you what you would do? Let us suppose that on the same day there appeared before the arbitrator two young men who had been in the employment of the same coal concern. Both had served for fifteen years, and were receiving a salary of £750 a year. They had not been taken on by the National Coal Board, and both brought their case and asked for compensation. As arbitrators, would you or would you not think it right to award these two men the same sum of money? Or would you think it right to say, "That fellow seems to us to be a very bright specimen and we think he will go far. His expectation is better than that of the other fellow, who seems a bit dumb?" That is the problem. Of course it is extremely difficult to imagine what will happen in the future. The man might be run over by a bus or, after all, he might be no good in a position of higher authority. A hundred and one things might happen, and it is far beyond the wit of man to come to any accurate conclusion about what the future holds.
It is to overcome that difficulty that the clause is drafted in this form. Be it observed that, owing to the noble Lord, Lord Macdonald's Amendment, we are not seeking to avoid paying fair and reasonable compensation. The noble Lord's Amendment will make the clause read as follows, at line 40:
"… there shall be provided in his favour or in favour of another person by reference to his employment, fair and reasonable compensation for the cesser of or prejudice to that expectation—being compensation ascertained by reference …"
to paragraphs (a) and (b)—the period of employment and the emoluments enjoyed by him during his service. That is to say,
640
the arbitrator is to ascertain what is a fair and reasonable compensation for loss of expectation, but is to consider it primarily from the point of view of the ascertainable facts—namely, how long the employee served and what his emoluments were. I do not think for a moment that it can be suggested that we are breaking faith or getting out of this cheaply. Globally, I do not think it is going to make the slightest difference to the National Coal Board. I conceive that it is possible that one man might get less and another more, according to whether compensation is based on the expectation of the future or based solidly on the past. But to differentiate between two men on the basis of guessing what is going to happen in the future, when their past service and emoluments were exactly the same, is unfair.
I remember that Lord Keynes started his book A Treatise on Probability by the illustration of a girl who brought an action for damages for being deprived of the right to enter a beauty competition. The jury had to assess the damages without seeing the other entrants! To assess expectation is, of course, an extraordinarily difficult thing to do. There would be much heart searching between two such men as I have instanced if we based their compensation on the strength of a guess—because that is all it can be—as to what would happen in the future. I do not want to rule out expectation. I want these men to be compensated fairly and reasonably for everything they have lost, including their expectations, but I suggest that we should do greater justice and give more satisfaction by basing it on something which is fixed and ascertainable, rather than on a mere speculation with which it is impossible to deal. That is the object of this clause, which amends Section 37 (2) (a) of the old Act. This section laid down that regulations had to be formulated to deal with this matter, but the regulations did not give the unhappy arbitrator any guidance on what he was to do. If your Lordships will consider yourselves as arbitrators, and examine the actual case I have given you, and will ask yourselves, taking the words of the Act unamended, what you would do, I venture to say that your Lordships will see the ground for this amendment of the principal Act. We believe that instead of basing compensation on a hopelessly vague and indefinite

641
expectation, it is better to base it on the ascertainable facts of long service and emoluments.
VISCOUNT SWINTON: It seems to me that the noble and learned Viscount the Lord Chancellor has given a much firmer explanation than the noble Lord, Lord Macdonald of Gwaenysgor. We want to do justice here, but I think he is still doing an injustice if there are no words about expectations. The noble and learned Viscount said that compensation should be based on years of service, and the amount of money earned during those years. There is no word about cesser or expectation of the future. When a man is "sacked," the least that we can do is to say that since he is getting £10 a week we assess his loss of employment on that. That means we are giving him something because of his past or, to put it better, because of the present position of which he is being deprived. What the Act said, and, what is more important, what was the custom of employers, was that he should be given something more, something for his loss of expectation for the future. I do not think there is a difference of fact between us. The proposal of the noble and learned Viscount would be treating a man reasonably and fairly if all the man had been entitled to was compensation for his present loss of employment and for his earnings and length of service in the past.
But what we promised to do under the principal Act—and what I believe we still want to do—is to ensure that because a man has either been taken over by the National Coal Board or "sacked" because the Board had made economies, he should not be worse off than in his old employment: that he should have compensation for what he might have expected to get. That is what the cesser and right of expectation means. It occurs only in the case of good firms who were generous to their employees and who gave them opportunities and extra pension rights in the future. Under this clause, as the noble and learned Viscount would have it, I think we should deal fairly by a man who had no such expectation, but we should deal unfairly with a man who had expectation, for while Section 37 says that such a man shall be compensated this clause gives him nothing for that expectation. I think that is wrong. In the Act of 1946 we certainly meant to give him compensation for this,
642
and we gave it to him in words which we considered carefully at the time in both Houses of Parliament. I do not think, because it is difficult of assessment, that we ought to deprive him of that to-day.
THE LORD CHANCELLOR: That is not my understanding of the clause. The clause says that a man must be paid compensation, and, by the proposed Government Amendment, "fair and reasonable compensation" for the cesser of or prejudice to that expectation. I think it is fallacious to read the clause as though those words were not there. If I were the arbitrator I should try to make up my mind what sum the man should have. Then, if I had to do a series of these cases, I should try to base compensation on his past service and emoluments so that, comparing one ease with another, I did not differentiate unfairly between two men.
5.51 p.m.
THE MARQUESS OF SALISBURY: This is a very difficult point. We certainly' do not want to make it a controversial point, and are anxious only to be fair. When I first listened to the Lord Chancellor I formed the impression—which I now see was wrong—that he was saying that as the original wording in the main Act was obscure, and one man might, possibly unfairly, get more than another, it was better to give nothing to either. That certainly the Lord Chancellor did not mean, and, of course, it would not be a right thing to do. I agree with the Lord Chancellor that the sort of consideration which some people might have in mind, that one man is very clever and the other very stupid, is something which cannot be assessed. But the sort of thing which can be assessed is this. Here is a man who has had a certain number of years' service, and has certain emoluments; a comparable man in the firm with that period of service would reach a certain standard of emoluments by the time he reached the end of his working life and would be receiving higher emoluments than he is at present. That is a possible calculation. What I want to know is this: Is the meaning of the words "benefits ascertained by reference" in line 43 merely that you consider the present emoluments and length of service and

643
base the compensation on them? Or does it mean that you say: "Here is a man who is at present getting these emoluments after so many years' service. We might have expected him, if his employment had not ceased, eventually to rise to such-and-such a standard," and then base your compensation on that?
THE LORD CHANCELLOR: My understanding is the latter, because if it were the former, plainly I should not be paying the man fair and reasonable compensation for an expectation, and that is what I have to do. If I can devise more satisfactory words to make it plain that it is not intended to pay the man for what he has to-day, disregarding the future altogether, I shall be only too pleased. On the other hand, I do not want to base the compensation on a mere guess as to the future, which I am sure will cause heart-burning.
VISCOUNT SWINTON: I would like to clear this up. You begin by saying that the principal Act shall have effect as if the words "expectation of accruer" had never been in at all. What everybody read that as meaning was that a man is to get nothing for "expectation of accruer," because it has been removed from the Act. On the other hand you then put back here:
"… there shall be provided in his favour or in favour of another person … fair and reasonable compensation for the cesser of or prejudice to that expectation. …"
THE LORD CHANCELLOR: Line 36 gives you the expectation.
VISCOUNT SWINTON: At line 35 it says:
"… subsection (2), as amended by the foregoing subsection, applies, such an expectation as aforesaid …"
THE LORD CHANCELLOR:
"… ceases or is prejudiced.…"
VISCOUNT SWINTON: That is an expectation of benefits to come?
THE LORD CHANCELLOR: Yes.
VISCOUNT SWINTON: Merely calling the thing "fair and reasonable compensation" does not make it fair and reasonable compensation, if you limit it to (a) and (b). But if (a) and (b) are a sort of minimum standard, a yardstick which is to be applied, and you are going to give
644
him something more than just compensation for past service then I agree you are giving him something for the future. I would not like to divide if there is nothing between us on this, but I think it is important, because I am advised that the words as drawn (I do not think the words the noble Lord, Lord Macdonald, wishes to introduce make any difference) give him merely something for the past, and do not give him something for his hopes for the future.
THE LORD CHANCELLOR: Frankly, it is not my intention here to "do down" any of these people. I think we could easily agree, if it would be any satisfaction to your Lordships, that the compensation a man should receive should be no less than he would have received if he had been dismissed by his old employer without the Coal Board having come into it. We have had an exchange of views about this, and I do not think we are very far apart. I would suggest that we discuss it between now and the Report stage—our experts and Parliamentary draftsmen can meet; I cannot promise anything, and the noble Marquess cannot promise anything—and endeavour to come to a satisfactory decision.
THE MARQUESS OF SALISBURY: I think that is the best course. After all, we both want the same thing. We may have different views as to the interpretation, but neither of us wants to be unfair. We have a few days in which we can talk it over to see whether we can find a solution.
VISCOUNT ELIBANK: Before this Amendment is withdrawn, I would like to put this from the employees' point of view. The employees had a provision in the old Act under which they believed they would receive absolute justice. A new clause is introduced into this Bill under which they are told by the Solicitor-General that some will be better off and some will be worse off. That has caused a great deal of feeling amongst the employees. To-day, this matter has been argued with great force, but I feel that one cannot leave the discussion which has taken place without pointing out the employees' point of view. Unless something is settled under which they can receive a guarantee that they will not be worse off under the clause, there will

645
be a great deal of dissatisfaction, and they will also feel that the Government have broken faith with them.
THE LORD CHANCELLOR: We will certainly bear that in mind.
VISCOUNT SWINTON: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.59 p.m.
LORD MACDONALD OF GWAENYSGORhad given notice of three Amendments to subsection (2), the first of which was to leave out "as" ["as compensation"] and insert "fair and reasonable"; the second, to leave out "benefits" in the last line of the first paragraph and insert "being compensation," and the third to insert a new subsection. The noble Lord said: I think it will be helpful if we take the next three Amendments together. The proposed new subsection is by far the more important of the three Amendments. That provides for arbitration as to whether the Board's obligations to protect certain pension rights and to pay compensation for the cesser or prejudice of certain expectations have been fully discharged in particular cases. This is an Amendment partly, if not mainly, in response to an undertaking given during Report stage in another place. The Parliamentary Secretary then used these words:
"There is no real need for arbitration on those circumstances because the fund itself provides for reference to a board of management which is usually composed of members of the fund and of the management. There is also the group of persons who have service under the old undertakings and who have certain rights and expectations. I do not think that we have really any objection to arbitration in relation to those people. We will look at that point, and if we can do something in any way for those people we will do it."
The discussion we have just had helps us to appreciate what this Amendment means, and I do not think it is necessary for me to say very much except this. Here we do provide that, in particular cases, the benefits provided by the Board are the same as, or not less advantageous than, those to which the individual concerned had a right, or of which he was already in receipt, and that the compensation provided is fair and reasonable in relation to the value of the expectations which have ceased or been prejudiced. Those matters can all be referred to arbitration, and I think the three Amendments
646
combined will be acceptable to the Committee. I beg to move.
Amendment moved—
Page 5, line 41, leave out ("as") and insert ("fair and reasonable").—(Lord Macdonald of Gwaenysgor.)
VISCOUNT SWINTON: I am much obliged to the noble Lord. I think this is a distinct improvement, not only in that it provides going to arbitration, but that it re-emphasises that the expectation of accruer is something for which there should be compensation. I think it helps us along our road.
On Question, Amendment agreed to.
Amendment moved—
Page 5, line 43, leave out ("benefits") and insert ("being compensation")—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
"( ) Regulations made for the purposes of the said section thirty-seven shall provide for the reference to a referee or board of referees appointed by the Minister of Labour and National Service of any dispute arising—
(a) in a case where—

(i) a right to any particular benefits in favour of a person to whom subsection (2) of that section, as amended by subsection (1) of this section, applies, or in favour of another person by reference to his employment, has ceased or been prejudiced by reason of his ceasing in consequence of the passing of the principal Act to be employed by his previous employer or to be employed in activities to which paragraph (a) of the said subsection (2), as so amended applies; or

(ii) any such person retired from employment before the primary or other relevant vesting date, and he, or another person by reference to his employment, had been in receipt of benefits granted in respect of his employment;

whether benefits provided in pursuance of regulations so made are the same as, or not less advantageous than, those the right to which has so ceased or been prejudiced, or, as the case may be, those that had been received;
(b) in a case where an expectation of accruer of any particular benefits in favour of a person to whom the said subsection (2), as amended as aforesaid, applies, or in favour of another person by reference to his employment, has ceased or been prejudiced as aforesaid, whether compensation provided in pursuance of regulations so made satisfies the requirements of the regulations;
and where, upon a reference under a provision of regulations having effect by virtue of this subsection, the referee or board of referees determines what benefits or compensation must be provided in order to satisfy the requirements of the regulations, it shall be the duty

647
of the person charged by the regulations with the provision of the benefits or compensation to give effect to the determination."—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
LORD MACDONALD OF GWAENYSGOR LORD MACDONALD OF GWAENYSGOR moved after Clause 4 to insert the following new clause:
Power to provide for enforcement against the Board certain workmen's compensation liabilities
" .—(1) If it apears to His Majesty in Council that arrangements have been made—

(a) between the Board and a person who at any time before the primary vesting date was the owner of an interest in property that vested in the Board under the principal Act, for the assumption by the Board of all or any of the workmen's compensation liabilities of that person; or

(b) between the Board and a mutual indemnity association of which any such person as aforesaid is, or was at any time, a member, for the assumption by the Board of all or any of such of the liabilities of the association under a contract of insurance entered into between them and any person (whether such a person as aforesaid or not) whereby he is or was insured against workmen's compensation liabilities to any workmen as, by virtue of the happening of any of the events mentioned in subsection (1) of section seven of the Workmen's Compensation Act, 1925 (which relates to bankruptcy, the winding up of companies, etc.), are enforceable against the association by the workmen, their legal personal representatives or their dependants or others to whom or for whose benefit compensation is payable;

he may by Order in Council provide for the enforcement of the liabilities to which the arrangements relate against the Board instead of against that person or, as the case may be, the association, as if the employment out of which the liabilities arise had been employment by the Board instead of by that or some other person or, as the case may be, the Board had subscribed the contract instead of the association and, in connection therewith, for conferring on the Board the rights and remedies which that person or, as the case may be, the association would have had in respect of the liabilities if they had remained enforceable against that person or, as the case may be, the association.
(2) Where the discharge of a workmen's compensation liability which, by virtue of an Order in Council under the foregoing subsection, is rendered enforceable against the Board, is secured by virtue of a compensation trust, the Order may extinguish the liability of the trustees under the trust to make a payment in or towards the discharge of the first-mentioned liability.
(3) Where a person the discharge of any of whose workmen's compensation liabilities is severed by a compensation trust was at any lime before the primary vesting date the owner
648
of an interest in property that vested in the Board under the principal Act, the trustees under the trust shall have power, and be deemed always to have had power, to make to the Board, out of the trust fund created for the purposes of the trust, payments in consideration of the assumption by the Board, under arrangements made between the Board and that person, of any of those liabilities of that person the discharge of which is secured by the trust.
(4) An Order in Council under this section may contain such incidental and supplementary provisions as appear to His Majesty in Council to be requisite or expedient for the purposes of the Order, and—

(a) without prejudice to the generality of the foregoing provision, where an Order in Council under this section makes provision for rendering enforceable against the Board any liabilities of the Durham Colliery Owners' Mutual Protection Association, it may make such provision with respect to the exercise of all or any of the powers conferred by any order under paragraph (16) of the Second Schedule to the Workmen's Compensation Act, 1906, on a committee representative of that Association and an association of workmen as appears to His Majesty in Council to be requisite or expedient having regard to the provisions of the Order in Council; and

(b) without prejudice to the generality of the said provision or to the power conferred on His Majesty in Council by subsection (3) of section eighty-nine of the National Insurance (Industrial Injuries) Act, 1946, to provide for winding up compensation trusts, where an Order in Council under this section extinguishes liabilities of the trustees under such a trust it may, if it appears to His Majesty in Council to be requisite or expedient so to do, provide for the winding up of that trust;

and rules made under section four of the Workmen's Compensation (Coal Mines) Act, 1934, in relation to deposits made under that section by mutual indemnity associations may, notwithstanding the repeal of that Act by the said section eighty-nine, make provision for any matters consequential on the passing of this section.
(5) An Order in Council under this section may be varied or revoked by a subsequent Order in Council thereunder.
(6) In this section—

(a) the expression 'compensation trust' means a trust established for the purposes of the Workmen's Compensation (Coal Mines) Act, 1934, and the expression 'mutual indemnity association' has the same meaning as in that Act; and

(b) the expression 'workmen's compensation liability' means a liability under the Workmen's Compensation Acts. 1925 to 1945, or the enactments repealed by the Workmen's Compensation Act, 1925, or the enactments repealed by the Workmen's Compensation Act, 1906, but does not include, in relation to any person, any such liability as aforesaid against which he is insured

649
under a contract of insurance subscribed by a person other than a mutual indemnity association;

and references in this section to liabilities shall be construed as including references as well to contingent as to accrued liabilities."
The noble Lord said: It will be remembered that the noble Lord, Lord Hawke, during the debate on the Second Reading, suggested further consideration of a matter which he thought might be included in this Bill. This new clause is submitted in response to the suggestion he made. It is a very simple matter. For over twelve months there have been constant negotiations regarding what to do-with certain mutual indemnity societies who are responsible for the payment of compensation in various parts of the country. They were no longer associated directly with the industry, and they felt that they could not carry on the responsibility of paying compensation for too long a time. Somebody had to take the responsibility in their place. They approached the Board, and finally it was agreed that the new clause which appears on the Marshalled List could be accepted by both sides. It was submitted to the National Union of Mineworkers to see whether they had any objection, and they agreed unanimously to accept it. We have before us an agreed clause to do something which must be done in this industry to safeguard the compensation for each injured workman. I beg to move.
Amendment moved—
After Clause 4, insert the said new clause.—(Lord Macdonald of Gwaenysgor.)
LORD HAWKE: I thank the noble Lord for meeting the point which I made on Second Reading. I think it is only fitting that your Lordships' House should be the medium for an addition of humanity to this Bill.
On Question, Amendment agreed to.
LORD MACDONALD OF GWAENYSGOR LORD MACDONALD OF GWAENYSGOR moved, after Clause 4 to insert the following new clause:
Repeal of s. 23 of the Act of 1946
" . Section twenty-three of the principal Act (which imposes restrictions on the disposal
650
of government stock issued to a company in or towards satisfaction of compensation in respect of a transfer to the Board of assets, property, rights and liabilities of the company), and, in section thirty-three of that Act, the words 'stock issued in exchange under subsection (4) of section twenty-three of this Act' in subsection (1), and the words ('other than inalienable stock') in subsection (6), are hereby repealed."
The noble Lord said: I think this is also an Amendment which the Opposition will accept, particularly because they will be able to say to me: "We told you so." It will be remembered that during the discussion on the 1946 Act, Section 23 attracted a great deal of attention in both Houses. The Opposition in both Houses felt that the precautionary measure being taken in Section 23 was unnecessary. It has now been discovered that they were right, and it is my pleasure to say that what they told us then we are prepared to do now. I beg to move.
Amendment moved—
After Clause 4, insert the said new clause.—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Remaining clauses agreed to.
The Title:
LORD MACDONALD OF GWAENYSGOR: The next three Amendments are all consequential. I beg to move.
Amendments moved—
In the Title, line 3, leave out ("and")
In the Title, line 4, after ("contracts") insert ("and provide for the enforcement against them of certain workmen's compensation liabilities")
In the Title, line 9, after ("thirty-seven") insert ("and to repeal the provisions of that Act imposing restrictions on the disposal of government stock issued for compensation to companies").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendments agreed to.
Title, as amended, agreed to.
House resumed.
House adjourned at seven minutes past six o'clock.