COAL INDUSTRY (No. 2) BILL (Hansard, 17 November 1949)

§ THE PAYMASTER-GENERAL (LORD MACDONALD OF GWAENYSGOR)
My Lords, this is a Bill which I feel sure will receive the general welcome of the whole House, and it does not need any words of mine to commend it. The reasons for the Bill are twofold: first, that the period specified to deal with complex agreements has proved insufficient, and secondly, that the Minister is unable to deal with lie matter by regulation, as it was thought he might. There were those of your Lordships who warned us of this possibility, and they are entitled, if they feel so inclined, to say, "I told you so." We were warned that two years might be inadequate, and also that if two years were inadequate the Minister would not have power to deal with it by regulation. Both those warnings have proved correct, and those who made them are certainly to be credited with good foresight.
There are one or two points in the Bill which I should mention and which make a slight difference to the previous posi- 803 tion. The Bill provides for revenue payments to be continued at one-third instead of one-half of the comparable ascertained revenue of a company, defined in the same way as in the 1946 Act, but it imposes no ultimate increase on the charges on the Exchequer. The Bill also provides that revenue payments for 1949 and subsequent years shall be payments on account of accumulating interest, and while any excess of accumulated interest over the total of revenue payments will continue to be payable, there is provision—and I know this will be acceptable to many colliery companies—for the repayment of any excess of the revenue payments over the aggregate of interest payments becoming due to a company. In effect, therefore, it provides merely for interest on account to be paid instead of its being accumulated until the amount of compensation is known. It is thought that one-third instead of one-half of comparable ascertained revenue will, in the majority of cases, approximate more closely to the interest payment becoming due. I ought to add —and this I know will also be welcomed by all my friends in the coal industry—that as a result of subsection (5) of Clause 1 it is expected to formulate detailed procedure by regulations for adequate protection to companies in regard to taxation where it is necessary to recover over-payment of revenue payments from them by deduction from compensation.
Here I ought to mention that where it is known that over-payment is likely—and this is rather an important point from the coalowner's point of view—the Ministry are prepared to pay a lesser amount than the one-third in order to avoid overpayment and the consequent difficulties. Revenue payments are, of course, subject to profits tax and income tax, and clearly this has to be allowed for in calculating the net amount to be repaid in the event of over-payment. A company should not —and with this I know your Lordships will agree—pay taxes on more than they ultimately retain. I am satisfied in my own mind that the primary reason for the Bill is that the job attempted was too big to be completed within two years. I beg to move.

LORD TEYNHAM
My Lords, we on these Benches certainly do not resist this Bill and we realise its necessity. On the other hand, however, I should like to make one or two observations upon it. In the first place, I trust that the noble Lord who introduced the Bill has been able to understand the drafting of it better than I have. In Clause 1 (2) there is a paragraph of twelve lines with only one or two commas, and I suggest it is a masterpiece of obscurity to anyone not versed in legal jargon. I would venture to draw your Lordships' attention to the fact that almost three years have elapsed since the passage of the Coal Nationalisation Act, and yet it is true to say that roughly 90 per cent. of the colliery companies have not yet received their compensation units on which, of course, final compensation must be based. I understand that this Bill is largely designed to extend those revenue payments to colliery companies in view of the fact that the principal Act laid down that such payment should be payable only for a period of two years. During the passage of the principal Act it was indicated by His Majesty's Government, as mentioned by the noble Lord who introduced the Bill, that compensation would be completed within two years. I do not think the noble Lord who introduced the Bill to-day has put forward any satisfactory reasons for the delay.
The Minister of Fuel and Power has stated in another place that the delay was in no way caused by the colliery companies—a statement for which the colliery interests are grateful. But, in fact, it is abundantly clear that the whole matter is within the responsibility of the Minister of Fuel and Power and his Department, and of no one else. It is not generally realised that no capital compensation of any kind has been paid except on account of certain assets which are outside the global sum. I hope the noble Lord who introduced the Bill will give some assurance that His Majesty's Government will' speed up the assessments and payment of compensation.
Your Lordships will notice that this Bill also lays down that revenue payments are to be continued at one-third instead of one-half the comparable ascertained revenue of the companies. I understand that this reduction has been 805 made because it is considered that one-third will approximate more closely to the actual interest payments which will fall due. I should like to ask whether during, the last two years it has been found that the figure of one-half of the comparable ascertained revenue has been too great. But my only real criticism is that there is nothing in the Bill as it stands to speed up compensation payments, and I hope we may have some assurance given us this evening in that respect.

LORD RENNELL
My Lords, I welcome this Bill. I do not think the complaint that there has been undue delay in settlement is valid. It is clear that in assessing compensation for an industry of this size a great deal more than the original two years provided for was inevitable. I personally have not heard of any complaint of undue delay, and it might he a little unfair to the Government if that accusation were to go out. At the same time, I want to express my apprehension about the obscurity of the wording of this amending Bill. There were a good many complaints about the wording of the original Coal Industry Nationalisation Act, as your Lordships may remember. Largely as a result of efforts made by the noble and learned Viscount the Lord Chancellor, a great many of these passages were cleared up and made more comprehensible. There are here three and a half pages of English which it is very difficult to understand. In contrast with this it is amusing to note the words of the Minister who introduced the Bill in another place. He summarised the Bill in one sentence of four lines. What he said was: In effect, it simply provides for interest on account to be paid instead of being accumulated and then paid at the end when the capital compensation is finally settled. The whole Bill is largely a question of words, and I take strong exception to the intolerable jargon employed, which I regard as deplorable.
Another point I wish to make is in connection with the method of compensation for the taking over of the coal mines, as compared with the method of compensation in other industries that have been nationalised. Perhaps I may be allowed to read an extract from the speech of the Parliamentary Secretary to the Ministry 806 of Fuel and Power in another place. He said: If anything, this debate has proved one thing, and that is that the Government were absolutely right when they decided not to proceed in subsequent nationalisation measures to secure compensation on the same basis as in the Coal Industry Nationalisation Act. I am not aware that anybody has complained in the case of the coal industry about delay, or that anybody would have preferred any other scheme of compensation such as was introduced in the case of the electricity, gas and railway nationalisation measures. The Bill does not in itself provide a motive for altering the system—or it should not. If it was right to compensate an industry in this way, I submit that it was right to compensate other industries in the same way; the justification advanced for changing the method was not, in my view, a justification which ought to have been advanced. I do not believe that anybody to-clay will complain on grounds of delay about the method of compensation in the coal industry and it is a pity that a conclusion of this sort was drawn in the debate in another place. What matters is that the compensation payment should be just—not necessarily that one method of payment is quicker than another.

§ LORD MACDONALD OF GWAENYSGOR
It is intended to speed up the machinery and, in particular, to explore the possibility of payment in partial satisfaction. On the other point that was raised, I do not think I can say any more, except that to-day I could not speak regarding overpayment of revenue payments until the amount of compensation is known. We do not know it at present.