§ 2.39 p.m.
§ LORD LAWSON rose to call attention to the recent Report on Fuel Conservation of the British Productivity Council on a National Fuel Policy; and to move for Papers. The noble Lord said: My Lords, it will be remembered that originally this Motion was to be moved by my noble friend Lord Macdonald of Gwaenysgor. Unfortunately, he found it impossible to be here to-day, and I have been asked to move it on his behalf. I have done the best I can in the short space of time available, but this is a complicated and technical Report, and not one that I would recommend for bedside reading—I refer to the Report of the British Productivity Council, which I understand was part of the Anglo-American Productivity Committee. For reasons of finance, I believe the Joint Committee, which was set up by the late Sir Stafford Cripps in 1948, and which did splendid work, had to be dissolved, but the British section remains in being.
I feel that it is a matter for congratulation that the representatives of the great employers' organisations, the Confederation and the Federation of British Industries, working with the Trades Union Congress, in addition to their statesman-like efforts to deal with the economic situation of this country and with relations with other countries, can still find time to grapple with this fundamental problem of fuel economy. There are something like forty recommendations in the Report to which I have referred, but I propose to deal, in a rather general way, with only the first three. Having read the Report as well as I could, I am going to be careful not to get "bogged down" in the technical aspects of it. The first recommendation is that
Every means should be taken to inform the public of the serious fuel and power problem facing this country.
The second is:
The Government should make an early declaration on the broad policy it intends to follow in regard to fuel and power.
The third is:
The Government should set up a commission to formulate a national policy; and/or the nationalised industries, coal, gas and electricity, should be co-ordinated under a Fuel and Power Board.
At an early stage in the Report it is stated that every means should be taken to
inform the public of the serious fuel and power problems facing this country. That, I think, every serious citizen in this country would take for granted—that the fuel situation is so serious from the point of view of the dependence of the State upon it and from the point of view of economy, that it should receive the serious consideration of the public.
§ May I say that this is not new to some of us who, as miners, had to deal with questions of wages. Those of us who worked in the coalfields and knew from experience that wages had to be based upon prices, sometimes thought that the coal produced, particularly in the export areas, might better have been left in the ground rather than that some of the prices which were paid for it by foreigners should have been accepted. I felt very strongly upon that matter when I was a young man. In the Coal Plan there is a statement to the effect that in the west of Durham there is some of the best coal in the world—or there was and still is a certain amount. That coal was very good indeed for steel, but it was mixed with other coal and, therefore, very low prices were paid for it, which brought low wages and a considerable amount of trouble.
§ The two great wars of our time have underlined our complete dependence on coal as the foundation upon which our economic and social life as a nation is built. If it needed any proof, the Report which we are considering to-day gives abundant evidence to substantiate that point. Let me say at an early stage that when one considers the nature of the work of those who produce the coal, and the conditions under which they work and to some extent live, one must come to the conclusion that it is more than time that we took steps to abolish waste and to make the best possible use of their product. There are about 700,000 workers, men and boys, in the industry. They go down shafts of depths ranging from hundreds of feet to over 3,000 feet. They go long distances under ground. It is a strenuous type of labour, and in some pits the men work in very low seams. About 500 workers were killed last year. I am glad to say that that is a reduction on the average numbers killed over the bulk of our lifetime. Great numbers of men are injured every year and, indeed, he is a fairly fortunate man who, at some time in his working experience, does not 867 have an accident of some kind. The noble Viscount, Lord Hall, and I could produce the marks of our calling to show the kind of experiences we have had.
I recall these things—which are not unfamiliar to your Lordships—only because it is necessary to bring home to the average citizen the nature of the conditions men must face if Britain is to live as a great nation, and the need to make the best use of this God-given gift in which we are comparatively rich. It is worth while to remember that coal is a wasting asset. The Report says:
We must face up to the fact that coal is virtually our only source of heat and energy; it is too precious to permit of its profligate and wasteful use, even if it could be produced in great abundance and even if our reserves were vastly greater than they are.
That is a plain statement of fact, from the Report, in language more effective than that of which I am capable. If I may quote again, the Report says:
It is a sad commentary upon our national intelligence that from all the hard-won coal we consume, some 80 per cent. of the heat is lost, a great deal of it because of ineffective utilisation.
Again the Report says:
It is an anomalous position that we have in Great Britain industrial units which compare in efficiency with the best in the world, while our general standard of fuel utilisation is perhaps the lowest of any country in Europe.
I do not think it is necessary to emphasise that fact. It is an amazing thing that our industrial units can earn such praise and yet are so far away from making proper use of this fuel for their own purposes. I was glad to note from the debate on the Estimates in another place—last week, I think—that the ex-Minister for Fuel and Power had given figures showing that the National Coal Board itself is improving in its proper use of coal, and to a certain extent is reducing waste. That, of course, is just as it should be; but it is generally agreed that this is recognised only as a beginning.
§ I think your Lordships may like to know that the National Coal Board is doing a great deal in economising fuel for the purpose of fires for its employees. I seem to have heard people say quite often: "They have great big fires and big grates, and very often they keep these fires burning night and day." Well, my 868 Lords, that is a fact. It may seem strange to people outside the mining areas; but if you have two or three workers in the home, some of them may be on the night shift, some may be going out at two, three or four o'clock in the morning and others coming in at that time. In such a case, it is necessary that these workers find some sort of rest and warmth after the kind of labour which they have to do.
§ The old grates were made to meet the conditions of that time. When we came home from work, as we did, wet with sweat—there were no pithead baths then—after having, been working in water and in conditions that are difficult to describe, it was necessary that the home should be in at least a fairly decent condition of warmth. Nowadays, the system of pithead baths has made it possible to have a second look at that question. The companies are in constant communication and negotiation with the men's representatives in the colliery upon this question of economising in the use of coal.
§ Moreover, of course, some of the women there with modern ideas are just as keen on having tasteful and attractive fireplaces as those outside the coal field; and they have been making themselves felt, too, in this matter. To my knowledge, in my own particular area great changes have taken place in that matter. I understand that the National Coal Board is to build some 20,000 houses (at any rate, that is a statement which I have seen), and these will have grates that are more efficient, more æsthetic in appearance, to meet the needs of the home.
§ I say quite frankly that I do not want to see the widespread establishment of central heating in this country. I struck it in America for the first time; and, frankly, I do not like it. They have a different climate from ours, of course, in America—the climate varies considerably. I can tell your Lordships that at the first hotel I went into—this was in winter: last January—I turned off the radiator and opened the window. They warned me what would happen to me, and I said, "You need not trouble: in any case, I live in the Arctic Circle." I make that point because I should not like to see a stampede into the use of central heating. It has its uses for the people who use it at the present time; it has 869 its uses for the Americans. But it is of no purpose, I think, and will not bring great satisfaction, to this country. I understand that some noble Lords have technical information upon these matters, and I am hoping that someone may deal with this question. I am open to advice on the matter, but I do not think it will have very much effect in the light of my experience. The National Coal Board, too, I think, is itself economising, and saving coal to a degree which is hardly apprehended. I am surprised not to have seen that matter dealt with, either in the debates in another place or in Reports. Those of us who have spent a lifetime in the coal trade could tell a grim story of waste in the years gone by. Some of it, of course, was due to the fact that we were just learning the science of mining. That has been a tremendous uphill fight.
§ Sometimes the industry here is compared with that in America. I am glad to see that the Report has something to say upon that matter, and I shall have something to say upon it, too. There was a time when some of my noble friends and myself were working in the mines under the old "board and pillar" system, which was a considerable improvement upon the greater part of the nineteenth century method of working. Under the "board and pillar" system a block of coal of forty or sixty yards, as might be the case, was taken. Sometimes only half the coal was obtained. I have left a place standing five feet high—a place, I was going to say, almost as pleasant as your Lordships' Chamber; at any rate, a very pleasant place. I have left it for the week-end and have returned on the Monday morning to find it was barely three feet high. The upheaval that had taken place was like a volcanic eruption, for the simple reason that the old unbalanced way of working the coal had led to the floor heaving, the roof coming down and the general destruction of normal conditions characteristic of mining. I do not think it is appreciated how much the long-wall face method of working, in itself, with its more scientific method, has saved us from a great deal of waste.
§ There are throughout the country at the present moment a great many mines which are flooded out. We had that problem to deal with in a striking way in my own county. People on the moors of Wear dale, on the edge of the coalfield, had worked small mines. When they no 870 longer paid and were not economical, the people simply left them. A stream was coming down from the Pennines on to the moors, and gradually it broke into some of those mines. Indeed, one well-known stream disappeared altogether into the mines. Mine after mine was flooded and had to be closed. That caused a great deal of perturbation among those responsible for the running of various mines lower down. Indeed, I was told by one mining engineer that it gave him something of a nightmare to think about what might happen, because, of course, water will find a way in. Representations were made for many years that steps should be taken to pump the water out of some of these areas. I should think some hundreds of millions of tons of coal were at stake but no one would accept the responsibility—and, of course, it was no one's responsibility in the conditions that were then prevailing. But ultimately it became the National Coal Board's responsibility, because they had to get the coal that had been lost through this flooding, and I am glad to tell your Lordships that water pumping has proceeded at a pace that has, at last, reopened one of those mines. The pumping is continuing, and, in due time, that great mass of coal which was apparently lost will be saved by the National Coal Board.
I give your Lordships those facts to show that the method of working the coal to-day is having the effect of saving coal which would otherwise be lost. Up and down Great Britain there are mines which have been flooded because they have gone out of commission through lack of means to run them and other various causes. I take it for granted that in time they, too, will be de-watered and that the coal will be used. I think it is worth while pointing out in this way that the National Coal Board is fulfilling a great national duty in saving coal, as well as doing what it can to economise in the use of coal. I notice that the Report has a chapter upon the fuel resources of America, as compared with those of Britain. In that chapter a comparison made between the coal seams of the U.S.A. and those of Britain. The Report says:
The U.S. seams are generally of considerable thickness, lying close to the surface. In addition, they are usually fairly level, which facilitates large scale production. …
I took the opportunity, when I was in I America last year, of seeing some of the
mines. I wish that we had some like them. I "hand it" to the American workmen—I have heard a good deal about this, and I give them all credit for the quickness of their movements, for their eagerness to get the job done and to get the coal out. The seam I have particularly in mind at the present moment is something like six feet thick. I said to myself, "Well, it is a creditable thing to be moving about like that. I should like to see them do that in a two-foot or three-foot seam in Durham, or some other parts of the country." I am glad that those who are responsible for the Report have made it quite clear that there is no comparison between conditions in America and those in this country.
§ They also draw attention to the fact that in about ten places gas is being piped out of the pits to supplement our fuel resources. That is very encouraging. The noble Lord, Lord Adams, is taking an active part in that work in Cumberland. I have seen the efforts they are making in that part of the country, and they are interesting for this reason. The first gas that was piped out of mines anywhere in Great Britain was piped out by Mr. Spedding, of Whitehaven, in the latter part of the 18th century, and it is rather a striking thing that we should in these days be counting it as very unusual that gas can be piped out. Spedding, of course, did it for the reason that there was a need to clear the pits of that which was dangerous.
§ Your Lordships will, no doubt, have noticed that I have steered clear of the technical side of the Report, for the simple reason that I know nothing about it. But what I have read in this Report has deeply impressed me. It appears that we have scarcely touched the edge of possible savings and of the sheer waste of coal, and I have sufficient faith in my own fellow men and women in this country to say that if we could present to the country, in simple and convincing terms, the facts of the situation, then the country would respond. Before I sit down I should like to ask the noble Earl who is to reply whether he will tell us something about the Board recommended by the Ridley Committee, which was to give concentrated attention to economy in the use of coal. Has that Board been 872 formed? I read the Minister's speech in the other place, and from what he said I could not quite gather whether it was definitely formed or not. Has it commenced operations? If so, what are the terms under which it works? Of course, if we could have its personnel, that, too, would be of some value.
§ Let me say, in conclusion, that we have at our disposal great resources representing great potential wealth. I do not think we have anything to weep about. In the National Coal Board Accounts we have a statement of the real and potential resources of this country. As a humble observer of the ground and strata that go to make up coal, I appreciate the statement which they made, that you can never tell where coal is. I think we have great resources to fall back on, but with the present needs of the country we are limited in time. If we could turn that hidden wealth in the country to proper use, in spite of all our financial difficulties we need have no fear. Indeed, with this potential wealth at our disposal, I think we could almost start a new period of prosperity in our history. We have sent to various parts of the Commonwealth very able and fine types of workmen. I came across a rather striking example of that when I was in America. I was shown a very fine colliery—a remarkable piece of engineering. I said to the youngish man who was in charge, "You might well be proud of your work. If I may say so, I think you are a good pit-man," and he said. "Well, I should be. My father came from a colliery in your county." From Wales, England and Scotland, there have gone great masses of people who have done great things for America; and, indeed, one of the great mining organisations in America owes a great deal to the personality of a great Welshman. But once the miners and the people of this country understand in simple terms the problem before them, I have no doubt whatever that, under the guidance of the particular body which is set up for that purpose, they will concentrate upon this problem and will probably win the economic Battle of Britain. I beg to move for Papers.
§ 3.17 p.m.
My Lords, the noble Lord who has just spoken told us that he had undertaken to speak at short notice on this subject, but he has no need 873 to fear that he has not been able to give us a very interesting speech. Incidentally, I find myself in agreement with most of what he said regarding the large amount of detail in the Report of the productivity team, which, as he says, is fairly hard reading. Like the noble Lord, I have done my best to understand as much of it as I can, having a particular interest in this subject which is closely related to the work of the Committee of which I was Chairman a year or more ago—in-deed, it covers a large part of the ground in a rather different way. Many of the matters discussed are, of course, technical details arising from the need to make the best use of our fuel and power resources. Those are points which we covered in outline, and they are gone into in this Report in some detail, after comparison with American methods and practice. It is interesting to observe that in by no means every case do the productivity team say that the American practice is far ahead, at any rate of the best examples of industrial practice in this country. Nevertheless, there is a great deal of room for improvement in our methods of using coal, and I think there can be little disagreement on the proposals regarding that matter brought forward in the Report of the productivity team.
I would, however, question one or two proposals of policy which they have included. In their recommendations they refer, on page 6, to the need for "a national fuel policy," and I would submit that there is little in the investigations in America which they report which would substantiate a discussion on that point. This is by no means a new proposal, nor is it a new subject. I think that those who stress the need for what is called "a national policy" should be more specific as to what they have in mind. In this case, the productivity team proposed that there should be a commission to study the subject, and that certain interim measures should be taken and declared to be Government policy. The commission, as they proposed, would formulate a national fuel policy. On what instructions should such a commission work? What should be their object? Should it be to conserve fuel of all kinds, strictly on the basis of fuel efficiency? Should it be to conserve fuel and other resources—that is to say, to achieve the maximum overall economy both of coal and of other things, such as building 874 equipment and machinery? And should it be a policy which would be applied by direction from the Government, or from some other source? Or should it be a policy which people in this country who use coal in so many different ways would naturally follow?
This question of what is called "a national fuel policy" very naturally occupied the attention of the Committee of which I was Chairman for some considerable time. It is a matter which has been discussed for many years, and, thinking along the lines of the questions to which I have referred, our conclusion was that there is no policy which can be adopted unless the Government decide that in the interests of the nation they must impose certain conditions of use from above. That was a policy which we in our Committee, and I think, most other people in this country, decided definitely against following. The questions in the Report of the productivity team which led up to that are on page 5. There is a series of questions there in which they ask, after some introductory matter:Is it in the national interest that electricity, a costly and refined product, should be used for space heating …?A further question asks:Is it not essential, in view of industry's future needs for power, that the functions of electricity be confined to the provision of power, light …and so on. That is a policy of what, colloquially, one might refer to as the best use of each fuel, for whatever purpose it is best suited.
We, in the Committee, went closely into what, in fact, was the best use of these different forms of coal—whether raw coal, coke, electricity or gas. In so far as we could get figures on each which we could rely upon, after taking a good deal of trouble to get them and having a very considerable amount of help from various sources—including the Ministry of Fuel and research bodies connected with them—in so far as we could find evidence, it became clear that, in fact, on the basis of thermal efficiency, which is the direct measure of conservation of coal in that sense, there is very little in it. Incidentally, 1 would inform the noble Lord, Lord Lawson, that amongst other things we concluded, from the evidence before us, that central heating has the highest 875 efficiency of any method which uses coal for the heating of rooms or buildings. I would sympathise with him, and I might perhaps interpret his views by saying that in America they prefer to have their houses much warmer than we do in this country. Undoubtedly central heating is far and away the best method for that purpose. In fact, it is the only case of the use of coal for the particular purpose of heating a room in respect of which we found that one method was outstandingly better than any other, simply on the basis of the fuel used. There is, however, very little argument as to what is the best use of fuels—gas, electricity, coal and so on—on the basis of total cost and the total effort required to produce them.
On the basis of what one might call capital investment it seems there are variations. Here is one case in point. I do not want to weary your Lordships with a mass of detail, but I think that as an illustration worth referring to we might consider the use of electricity for space heating. I think that the minds of most people in this country were rather conditioned to look on such a process with some suspicion, because of the difficulty we had in very cold winters when suffering from shortage of electricity generating plant after the war. It then became Government policy, and I think quite rightly, that electricity should not be so used, because the demand came at the peak hour of industrial and other demand. That, we must remind ourselves—and during the process of working on this Report we had to remind ourselves—was a basis not of the amount of coal consumed but of the amount of plant available for generating electricity. But even if that is taken into consideration, I think there is no clearly valid argument against the use of electricity for such purposes.
We must remember that, far from new plant being built and electricity made available for peak hour use by everyone, for heating or anything else, the present situation is that the electricity generating system of this country is in the process of being renewed. The last report of the British Electricity Authority gave the average thermal efficiency of all their plants over the whole of the country as something like 22 per cent. This arose from the use of old plant which has been 876 kept in use longer than was originally intended, because of the war and because of the rapid increase of demand. As opposed to that figure, modern plants show a thermal efficiency of 31 per cent. or, perhaps, 32 per cent. So, whichever way we look at it, there is from the point of view of coal consumption alone urgent need to invest a fairly large sum in the replacement of much older plant. That being so, we are not likely, at any rate within the next ten or fifteen years, to be in a situation to build new plant for the exclusive purpose of meeting a particular peak demand such as that to which I have referred. I only mention that point. It is, I think, useful when we try to analyse what are our objectives when we talk about a national fuel policy and the use of all fuels for the purpose for which they are best suited.
I would submit that, provided that the prices paid by the user of each type of fuel do actually correspond with the fuel or the services he gets, and provided there are sufficient incentives to use the fuel in the most efficient way, we shall find, as that process works itself out, that the best use of all those fuels in the national interest will, in fact, turn out to be the use which people in those circumstances want to make of them. Therefore, I do not favour the proposals in the productivity team's Report, which envisage the setting up of a Commission to inquire into points such as that, both for the reasons I have stated and because I believe the matter dealt with in this Report and also, in less detail, in the Report of the Committee of which I was Chairman, have been discussed very thoroughly. The proposals we made and those of the productivity team largely coincide on technical points. I do not think that either the productivity team or the Committee would pretend that they are new points. They are matters which have been before the public eye for a long time. I submit there is no need for a Commission or an interim statement. From time to time the Government have announced their policy on these matters, and I believe they are all matters which will work themselves out as a result of the active work done by the various Government Departments in pushing them forward.
The other point made in the productivity team Report about which I feel some doubt is the rather parallel proposal 877 that the nationalised coal, gas and electricity industries should be co-ordinated under a Fuel and Power Board. Little is said in the Report on the subject, and again it is perhaps not too much to say that it does not appear to be a direct consequence of the investigations made by this team in America. Again, the subject is one which must be discussed on its merits. Those who propose an all-embracing board for these nationalised industries envisage a system separated from the Ministry of Fuel. As is said in the Report:Would it not be better to establish a simple, permanent and non-political fuel and power board?That envisages a body outside the Government altogether. The writers of this Report and others interested in this subject make this suggestion in the general belief that there are many opportunities where, by mutual action, the Coal, Gas and Electricity Boards can effect savings in output and distribution.
After considering the actual need for such a Board, the Committee found some need for a link between all these industries, but in our view only to the extent that there were new processes where techniques of production would need to be developed by more than one board—for instance, the combined generation of gas and electricity. For the moment, and for a long time maybe, these new operations are only on the fringe of the work of these two Boards. We thought there was need for a board composed of these industries to give the Minister advice as these new techniques develop—we had only these new techniques in mind—so that practical means of putting them into effect could be worked out. The Government have not adopted that recommendation, but in my view—and I think a large proportion of the members of the Committee would agree—so long as the Government see that these industries do get together and discuss these things, it is not a matter of so much concern whether they do it within the Ministry or more formally by the machinery which we proposed. The important thing to me is that it is done.
Of course, that is a very different matter from having a board to run and manage the whole of the three nationalised industries. It seems to me impos- 878 sible to have such a large section of public activities entirely out of the control of Parliament and in the hands of a separate and independent body without any Minister capable of answering to Parliament and without any connection with the general policy of the country. The Committee took the view that it was clearly the function of the Minister of Fuel to supervise the Gas, Coal and Electricity Boards. That duty is written into the Acts which set up these Boards. The Minister has power to give directions. We are all familiar with the various ways in which the Minister can make these industries work together. It seemed to the Committee (and I can see no difficulty about is at all) that the Minister of Fuel and his staff are responsible for co-ordination by fitting in the programmes of the three industries. Indeed, would it be impertinent to ask: If he did not have that duty, what would he have to do at all? If that duty were taken away and placed outside the control of Parliament altogether, there would be no need for a Minister of Fuel, so far as I can see.
I do not make that argument for the sake of saying there ought not to be a Minister of Fuel. The fact is that as these three industries are organised, the only possible way of any co-ordination of their activities is to have a Minister of Fuel who is answerable to Parliament for their general policy. That being so, it seems to me entirely unwarrantable to interpose a board of the kind suggested between the Minister and the three Boards running these industries. It seems fairly simple to me that if the Minister is responsible to Parliament and it is his duty to give directions to these three Boards, there is little point in interposing a separate authority between him and them. These are the points on which I do not feel at one with the report of this productivity team, but that does not mean that I have not a great respect for the work they have done in other directions—for the technical problems they have elucidated and the solutions they have suggested. It is my opinion that these are of the greatest possible value and I hope we can have a little more energy and drive in their application by the Government.
There is another feature of the coal problem to which I would venture to 879 refer. It is not mentioned in the productivity team Report but it is closely related. The feature is the actual total quantity of coal which is, or is not, going to be available year by year in this country. I have not the practical experience of the coal industry which the noble Lord, Lord Lawson, has, and I can look at it only from the consumer's end. The consumer's end is connected with the problems of use and efficiency. In their Plan for Coal the National Coal Board state (I do not want to misquote them, but I speak from memory) that they believe that by 1965 or thereabouts they should be able to sell inland 210 million tons plus probably 30 million tons for export. They gave a figure of 240 million tons as their target. The way they put it was that that was what they thought they could sell, but it is clearly related to what they are planning to achieve. That is 240 million tons in something like ten years from now.
The Committee of which I was Chairman made some investigations, and, without wanting to be dogmatic about it, because the demand for coal in ten years' time is not something which anybody who is wise would like to predict with accuracy, we had a strong impression that if all goes well with this country in other ways, the demand may be higher than that. We thought the figure might be something like 20 million tons higher, making the same allowance for export of coal. The figure we had in mind was based largely on the assumption that there would be a continued increase in the output of industry in this country, and consequently a demand by industry for coal. It did, however, recognise the fact that there is a large unsatisfied demand at the present time from the domestic consumer who is limited in the amount of coal he can get. We thought there was also quite a large, as it were, hidden demand, due to the fact that industrial consumers, while they are getting the quantities they need, are not always getting the qualities which they would prefer. There seems to be a hidden demand there which will increase the output of certain classes of coal.
I should be the last person to be dogmatic and to say that the figure we consider should be achieved is going to be achieved, but I certainly feel that we ought to look into the whole question. 880 First, how quickly are the Coal Board approaching the output which they have planned? Secondly, how possible is it that they can achieve that amount in something like the time stated? Or, if it becomes necessary, how possible is it for them to achieve output on the larger scale which at the time our Committee were sitting we thought was likely to be necessary? I will quote just two figures from the Report of the Coal Board. The actual output of mined coal in 1947 was 187 million tons, and in 1952 it was 214 million tons. That is a substantial rise. I have for this purpose ignored the output of opencast coal, which has varied from 9 million and 10 million to 11 million tons a year, because in the period to which I am hoping we can look forward it seems to be generally agreed that that source of coal will no longer be available, whether we want it or not, because it will have gone. But, leaving that aside, we have to see an increase of from 214 million to 240 million tons in rather less than 10 years; that is, according to the situation as the National Coal Board saw it in their paper Plan for Coal.
When we consider that the largest step-up in output occurred soon after the Coal Board acquired the responsibility for running the collieries—as indeed, was to be expected, owing to the amalgamation and what could be done with larger units than were used before—we must remember that the rate of increase has been slowing down since those first few years. I should like to be reassured upon that matter. There seems to me to be some doubt as to how quickly the Coal Board can achieve the figure which they have stated to be their objective; and, indeed, more doubt as to whether they can achieve the higher figure which, at least, appears as if it might be necessary, though, as I say, I should be reluctant to state categorically that it will be so. There is one pointer that is somewhat alarming—namely, the rate of capital investment in new machinery in the collieries. Again, figures have been published in the Report of the National Coal Board. I will not repeat them, but they show that the amount of new machinery, equipment, engineering work and so on which the Coal Board have attempted to carry out is noticeably greater than the amount they have succeeded in getting done. That makes one feel a little doubtful whether, at their present rate of progress, they are going 881 to achieve their objective. It has been said that their main difficulty was in getting enough trained and qualified mining engineers to work out the schemes and put them into practice—I have seen that fact published. But I believe that by now they have had every opportunity of getting the men they want from anywhere, training them and setting them to work.
I hope the Coal Board will achieve the figure at which they are aiming. But what I really want to emphasise now is not so much whether the higher estimate that we made is right, or whether the estimate of the Coal Board is right, but that we should get a clear picture of what is going to happen. That is the important thing. How much coal is there going to be? I would say that, while we see electricity consumption going up, gas consumption going up, and the demands from industry slightly increasing every year—fortunately, industry has taken it over the whole range—we should not sit down and not worry about whether they are going to demand more coal than is available. I do not at this moment wish to pass judgment on what the Coal Board have done; I only wish to emphasise the importance of getting the facts as accurately as we can.
I believe there is cause for anxiety. We do not want to go on with a shortage of coal for export, a shortage of coal for the ration of domestic consumers, and a shortage of the right kind of coal for different industrial processes, We want to get away from this atmosphere of shortage, and the sooner we know where we are, the better. I submit that we do not know just where we stand at the moment. If, in fact, it turns out that in three, four or five years' time we shall still have a shortage of coal, we must do one of two things: we must either—by some means which I am afraid I am unable to suggest—see that the National Coal Board alter their plans and increase the output they are working for; or we must do something definite about seeing that we use less coal. My inclination is at once to say that what we should do is to see that we use less coal in this country. The way to do that is to see that we do not waste so much. The figures in this Report show a saving of 30 million tons a year; and I should not be surprised if that amount, or even more, could be saved by more efficient methods. No doubt there are 882 good reasons which make it almost impossible to predict what the output will be from the collieries—I am prepared to be told that. In that case, I would say it is absolutely essential that we should be more positive and urgent about these methods of saving. They are all fairly well known; they have been underlined and well worked out in the industrial field in the Report of these productivity teams.
In the domestic field they are also fairly well known. I do not wish to be critical of the Government in their policy in this matter, because they have signified their agreement to a large percentage of the things which we in our Committee recommended should be done for the saving of industrial coal. However, I think it is permissible to say that, since they have accepted the policy in regard to most of these things, one would like to see them push a good deal harder, because it may be that in a few years' time we shall still have this difficulty of a coal shortage, which I believe is something we must get rid of, and also for the reasons quoted by the noble Lord, Lord Lawson. He described the work of the miners in the coalfield, and I agree with him that one should see that the coal that is got is not wasted.
One of the steps proposed as being a deterrent to the waste of coal was an increase in its price. It is widely held that, if the price is increased, coal becomes scarce and more valuable; that people will be willing to spend more or, fuel-saving equipment, and will therefore use less coal. To me, the main argument against that is that the actual bill for coal used in a wide range of manufacturing industry—excluding steel, bricks, cement and things of that sort—is small in relation to the annual expenses of such a concern. Therefore, an increase of, say, 30 per cent. in the price of coal has little influence on the cost of such an industry, whereas, of course, it would be almost entirely destructive of industries like steel, cement and bricks, where coal represents a high percentage of the cost of the material, So this proposal seems to me an impossible one to work.
I would, however, stress that the important thing in securing the adoption of measures for fuel economy is to find some other means of making these 883 measures attractive to the user, whether he be an industrial consumer, a steel maker or a private person wanting to burn a fire to keep his house warm. Various methods, including financial incentives and so on, have been suggested. In passing, I would say that I am sorry that the new Bill on rents and houses does not refer to the proposals which we made with regard to the installation, both in new houses and in existing houses, of the new types of grates which burn coal in an open grate, and look and feel just the same as the old-fashioned grate, but in fact use a substantially less quantity of coal. I should have liked to see one of the minor but important suggestions which we made adopted. I believe that this productivity team have done a useful service in elaborating these technical points, and I should like to see a great deal of increased activity in that direction.
The Government, I am glad to say, have announced the formation of what we referred to as the Independent Fuel Service. They have created such a body, which I think is the body about which the noble Lord, Lord Lawson, was asking when he spoke. That was one of the recommendations we made. We did say that, while we recommended the formation of such a modest body, run by industry, for the purpose of achieving fuel economy by advice, instruction and so on, we also recommended that the existing Government Fuel Efficiency Service should be kept going. I do not want to miss the opportunity of saying how much I think the men in that service have done in the interests of fuel efficiency. They have done a good job. It is one of the Government activities which, to my mind, has been really well run.
We had thought that it would be wise to have two of these Fuel Efficiency Services, one for all the Government Departments, Government interests, Government buildings, schools and local authority institutions of all kinds—and they are by no means always the most efficient as regards fuel—and the other having the range of activities proposed in the Government's announcement recently of the National Fuel Service. I am glad that they are starting such a service, and whilst I regret that the Fuel Efficiency Service within the Government is not to 884 be continued, I suppose it is not impossible that such work within Government Departments can be carried out in some way, perhaps by direct advice from the Ministry of Fuel or by some means of that sort. That is very important. I have gone on longer than I intended, but I feel that there are so many important things in this productivity team's report that your Lordships will forgive me. I hope, therefore, that everything will be done to carry out all these technical proposals which are contained in this Report.
§ 3.57 p.m.
§ VISCOUNT HALL
My Lords, I am sure that all your Lordships will regret the reason for the absence of my noble friend Lord Macdonald, who was to have opened the debate to-day. We are grateful to the noble Viscount, Lord Ridley, for that valuable speech. He has had a long experience in inquiring into the coal industry and its uses. The Government are not lacking in advice as to what should be done to bring about a great improvement in the supply of coal in this country, if they have the will to do it—that is the important thing.
I was pleased that my noble friend Lord Lawson opened this debate. It is exactly sixty years ago that he and I commenced our working life in the coal pits at twelve years of age—he in Durham, and I in South Wales. Nearly thirty years in the pit and thirty years in politics—what a mixture ! And, indeed, not a bad mixture at all. I have enjoyed every minute in both industries. I should like to refer to conditions as they existed at the time when we commenced in 1893. The numbers employed in the coal mines of this country were about the same as they are now—about 715,000. The output per man per year was also about the same. At that time coal was large, cheap and plentiful. Wages were low and the proceeds to the industry itself were low. The average wage in 1893 was 25s. a week. At the present time it is 228s. per week. The proceeds per ton—that is, the coal sold at the pit—were 6s. 2d. in 1893 and to-day 61s.
Those figures indicate some of the changes which have taken place. But that is not all. Working conditions have completely changed. The miners now have a five-day week—and they deserve it; they have shorter working hours and holidays with pay. There are fewer 885 accidents. The industry is almost completely mechanised, but there is an insufficient labour force. And, of course, the coal industry has been nationalised. Deep-mined coal is in short supply, and there is little possibility of any substantial increase in production in the near future. We have to use our open-cast reserves to the extent of 12 million tons a year; and we also import coal. These are the changes that have taken place. I wish that even in this House, and among people throughout the country, there were some realisation of the importance of coal and of the part which it has played in building up our national industry and national wealth.
Coal is still the basis of Britain's industrial life, upon which our economy and our prosperity depend. Ninety-one per cent. of our total industrial energy consumed comes from coal, as compared with 46 per cent. in America, because they have other means of power production. Many people seem to think that there is an unlimited supply of large coal in this island that could be made available if someone did something about it. It has not yet been realised that this great source of our national wealth is a rapidly diminishing asset. For hundreds of years millions of tons of coal have been taken out of the earth in this country. I have tried to ascertain the amount of coal which has been produced in this country since my noble friend and I commenced work, sixty years ago. I wonder whether noble Lords, if I asked them, could give a figure within several thousands of millions of tons. The fact is that during the last sixty years about 15,000 million tons of coal have been taken out of the earth in this country—an incredible figure. Of that amount I should think that between 1,500 million and 2,000 million tons have been exported.
I put this one point to your Lordships. We are using in this country at present, for industrial, domestic and all purposes, about 200 million tons of coal a year. If we had to import half that amount at the price we paid for imported coal last winter, it would cost the State something like £800 million a year—an indication that it would be quite impossible for industry to carry on without this cheap coal which it is using at the present time. When I hear so many people talking 886 about increasing output I should like to refer them to the Report which we are discussing to-day. After all, the team which produced this Report is made up of men who have had scientific, technical and practical knowledge of some of our largest fuel-using industries. The noble Viscount, Lord Ridley, and my noble friend Lord Lawson, referred to the fact that one of the first statements in this Report is that with greater efficiency Britain could save no less than 30 million tons of coal a year, without slowing down any service or industry. Thirty million tons a year, my Lords—a greater figure than that which is produced in South Wales at the present time.
Moreover, this Report, in its vigorous criticism of the wasteful use of this fuel, goes further, as my noble friend said. The words which he has quoted are worth repeating. They are, as your Lordships may remember:It is a sad commentary upon our national intelligence that from all the hard-won coal we consume, some 80 per cent. of the heat is lost, a great deal of it because of ineffective utilisation.The Report goes on to say:Wastage that is avoidable offers an affront to our current ideas of efficiency, and stands as a challenge to the British technician.I could go on quoting, not only from this Report but from persons such as the Secretary of the Department of Scientific and Industrial Research—a man who knows what he is talking about. He said a few months ago:It is not necessary to leave this country to find industrial examples of the efficient use of solid fuel as worthy as any in the world. We lack neither science nor technology to save from 15 million to 20 million tons of coal per year, at no greater cost than the additional expense which we have to shoulder by importing coal since the end of the war. It may be that at bottom it is one of attitude of mind, habit, custom or prejudice.Many other instances can be given by experts. We are told that if one-half of the Lancashire boilers in the country now being fired by hand were changed to mechanical stokers we could save 3½ million tons of coal a year. We are told that if the railways were modernised we could save seven million torts of coal a year. If collieries had all their power plant modernised, it would save five million tons a year. We are also told that if we had more economical grates put into our homes the entire output of 10,000 miners, 887 which is at present wasted, could be used for other purposes.
The miner is not an unintelligent man; and when he reads Reports such as this what inducement is there for him to go and sacrifice his life underground? Why should my noble friend or myself work in the pits for thirty years, knowing that the product of our labour is used in this fashion? I want to impress, not only upon your Lordships and upon another place but upon the whole country, the importance of seeing that everything possible is done to prevent the continuance of such a situation as this. I know that for many years voluntary organisations, such as the Coal Utilisation Council, with which I was closely associated in the early days, the Institute of Fuel, which was established by the first Lord Melchett, the Smoke Abatement Society, the National Coal Association and the Fuel Efficiency Committee have all done useful work, and it can be said that some of the Reports which we have had have not been quite fair to what has been done in effecting the savings which have already taken place. We should give due credit for what has been done.
First, the noble Lord referred to the Fuel Efficiency Organisation, which during the war gave its attention to all forms of fuel usage, including domestic, and it was calculated that an annual saving of some 14 million tons of coal was made. Unfortunately, this has not been sustained since the end of the war. Then the electricity industry has certainly done a good deal in increasing thermal efficiency, as the noble Viscount, Lord Ridley, rightly said. In 1920 the thermal efficiency at our generating stations was 9 per cent.; at present it is an average of 22 per cent. Some of the modern stations achieve 30 or 31 per cent., and it is hoped that progress will be made in this direction.
Reference is made to the much higher efficiency which is obtained from generating stations in America. If noble Lords saw some of the fuel which is being used at the present time by the British Electricity Authority in their generating stations, they would be amazed at the results which are produced. Indeed, 90 per cent. of the fuel is of a most inferior kind, which cannot be sold elsewhere. I went to one of the generating stations a 888 short time ago and saw that slurry, which had been on the river bed for years and years, had been brought up and was being used, and used most effectively, as fuel. Two years ago I was in America and I saw some of their modern generating stations with dumps of coal of 250,000 to 300,000 tons, every particle of it cleaned and every particle of it graded. What a contrast between the one and the other! Is there any wonder that, of the results that are indicated in the Report, the American results are so good whilst ours, though good, could be very much better?
The railways now are taking some of the inferior fuel instead of large coal. The collieries, too, which have been complained about, have done a good deal, because output last year was 40 million tons more than it was in 1945, and the amount of coal and power used at the collieries last year was no greater than that used in 1945. That is an indication. But it does not indicate for a moment that we should be complacent about this matter. The Coal Board should take note of the cost in some of the divisions: for instance, in Derby the amount of coal and power used per ton of coal produced costs 1s. 2d., while in South Wales and the South-Western Division it costs three times as much. In Leicester it costs 1s. 4d. per ton; but in Kent it costs 5s. 7d. That is an indication that we ought to look into every coal-using industry in this country and see to it that every effort is made to save coal.
Take the steel industry. In the last twenty-five years, the amount of coal needed to produce a ton of steel has fallen from over three tons to less than two tons. Efforts have been made, but they have not been sufficient. I would go so far as to say that there are few fuel users who want to waste fuel wantonly, but they are faced with many difficulties, some of which have been specially mentioned in the Report. Here is one instance. The Report says:By and large British industry has not replaced or materially modified its fuel and power equipment since the First World War. It is old and inefficient. But machinery that was good enough when coal was in abundant supply and cost little is not good enough today and remains an obstinate barrier to the achievement of real fuel efficiency. Much plant in this category has already reached obsolescence, but is not replaced for various reasons, principally the capital cost involved.That is the plea of almost every efficiency expert. If we really want to economise 889 in the use of coal, all obsolescent plant must be replaced and brought up to date. That will cost a considerable amount of money, but it will also save much more money. Much comment has been made in the Report about the more efficient American power-producing methods as compared with our own. The Americans spend more money and get these results. Here is a comparison. The labour force employed in manufacturing industry in this country in 1951 was 8½ million; in the United States of America it was 16 million. We number a little more than half. But the expenditure on new plant and equipment in 1951 was; Great Britain, £595 million: the United States of America, £3,980 million. That is six and a half times as much as is spent upon new plant and equipment in this country. It works out per capita in Great Britain, £70; and in the United States of America, £250. This greater expenditure can give results. We cannot attempt to compete with such sums, but we should do more than we are doing at the present time. I should like to ask the noble Earl who is to reply whether Her Majesty's Government are going to be a little more forthcoming in this matter.
It has been pointed out that there are no fewer than forty recommendations in this Report. These recommendations should receive the closest consideration by the Coal Board and Her Majesty's Government, and action upon them should not be delayed. In recommendation 4 the Report urges that financial incentive should be provided to encourage industry to install efficient fuel-burning plant and equipment. I should like to ask whether the last word of Her Majesty's Government is contained in the recent statement made in another place by the Minister of Fuel and Power. It is true that a loan was introduced last year, but it was so unsuccessful that it has been modified. But even this scheme is not satisfactory, for I have been informed that the only practical financial inducement is tax exemption—that is, to allow industry to charge all coal-saving expenditure to revenue, instead of to capital. I would beg the Minister and the Coal Board to consult with industrialists and the representatives of domestic consumers in this country to ascertain what would be regarded as a suitable inducement to enable them to 890 bring about the changes which can cause such an enormous saving.
Then there is recommendation 5. Is top priority to be given to the production of plant and equipment required by industry for this purpose, if the money is available? I am not going to touch upon the question of the Fuel Board, which was referred to by the noble Viscount, Lord Ridley, but I should like to ask whether the noble Earl can say anything about the National Industrial Fuel Efficiency Service which has been set up. I hope that this is not just another Committee, but that Her Majesty's Government will render it every assistance to enable it to give great service to the fuel-using industries. Hits this Board commenced its work?
That is all I am going to say in relation to the recommendations, other than a word upon the question of research. Research into the coal industry and coal usage ought to be one of the principal concerns of the Coal Board. I am not satisfied that the Coal Board is spending sufficient money upon research. The expenditure works out at 1¼d. per ton of coal produced—not a very creditable example to be followed by private industry. I think that the Coal Board could be much more generous in the grants which it gives to voluntary organisations, who, it is admitted on all sides, have done a great amount of excellent work. The total cost to the Coal Board last year was only £161,000. There should be a much greater drive in this matter of research, particularly in relation to the enormous amount of small coal and the difficulty of disposing of it, which is a problem we have to cope with at the present time. One of the most important changes brought about by mechanised mining is the serious decline in the proportion of large coal to small coal. The latest figures given by Sir Hubert Houldsworth a short time ago show that the proportion of large coal to small coal is only 28 per cent.; of the coal produced in this country, over 70 per cent. is small coal. As compared with what it used to be, that is a revolution. I worked in a dry steam coal pit. Small coal could not be sold. As a penalty for sending out small coal the miners were not paid for it. For some years I was a check weigh man at the colliery, and my work was to see that 891 the deduction by weight over a screen of the small coal from the large coal was accurate, and not a penny was paid for this small coal.
§ VISCOUNT HALL
This small coal was useless twenty-five years ago. A good deal has been done since, as a result of installing efficient boilers and introducing new methods of usage; that is the change which has taken place. Tens of millions of tons of this great asset, which this nation is and will be dependent upon for some considerable time, has been wasted—thrown into the gob. I remember seeing within two or three miles of my home a dump of this small coal amounting to nearly 300,000 tons. It was offered to a nearby electricity generating station for 2s. 6d. a ton. They refused it. Then there was introduced this system of pulverised fuel, which at once put up the value of small coal, and it could not be bought for 15s. a ton. This small coal is used in some ways, but at the present time there is such a large proportion of it that it has become a real drug on the market. I read in a report the other day that 75 per cent. of the large coal, three-quarters of the annual output, is used by the domestic consumers of this country and by the railways, and only about 15 million tons is left for other purposes. So bad is the situation that the Coal Board, or the Government, has this year to import 600,000 tons of large coal; and last year on every ton of coal which was imported into this country there was a loss of £5 3s. 0d.
That shows the seriousness of the position and the importance of research into the use of small coal. One half of the 140 million to 150 million tons of small coal is duff or fines, quite unacceptable for export and generally unsuitable for grates or small boilers. I have referred to the fact that had it not been for the work of the British Electricity Authority a much larger proportion of this coal would be on the market. I know something is being done. Phurnacite is a good substitute for large coal in suitable grates. I am pleased to see that the output is now to be increased from 300,000 tons to double that amount, and that the sale of briquettes is increasing, but it is still 892 less than a million tons a year. That also is not a bad fuel for suitable grates. Ovoids is another fuel which has been used, but the sale of this fuel has declined. For some unaccountable reason, the Coal Board has sold some of the plants and closed down others, putting them on a care and maintenance basis. That, again, indicates the need for additional research.
One thing about which I want to warn the Coal Board and the Minister of Fuel and Power, is the very high cost of some of these fuels, which makes them almost prohibitive. Some friends of mine, with myself, have gone to the expense of putting in special grates to try out some of these fuels. We now find that the prices of some of the fuels are almost too high for us to purchase them. That is particularly so in the case of Phurnacite. A short time ago complaint was made in another place about the price of briquettes—£6 17s. 2d. per ton, compared with £5 3s. 10d. a ton for Grade III house coal. But the cost of briquettes is nothing compared with the cost of Phurnacite. I saw an account for a ton of Phurnacite last year, and its price was then £8 12s. 4d. a ton. This year it is £9 6s. 4d. a ton. These prices are really fantastic, and people cannot afford to pay them. My home is within a few miles of the Phurnacite plant. The fuel they use for manufacturing this product is of the lowest volatile content; it would be unsaleable if it were not used for this purpose. The other raw material which is employed is very inexpensive. When Phurnacite was first manufactured it was sold at about one-third of the price now charged. An interesting point in this connection is this. Last year the profits made on these patent fuels—particularly Phurnacite and briquettes—almost doubled. They rose from £333,000 in 1951 to £564,000 in 1952.
My Lords, this is not the time to increase prices because of greater demand. Rather, is it a time when every effort should be made to encourage people to use the fuel which has been produced out of this otherwise non-useable material. I beg the noble Earl, and indeed the Coal Board, to endeavour to relate the cost of these patent fuels to the prices of coal, and I suggest that, before they advocate the changing of the old system of domestic firing from the open grate to the new type of grate, they should see that some 893 indication is given to the domestic user regarding the cost of the fuel which is most suitable. That is not asking the Government too much. The use of these fuels should be encouraged; they should not be exploited. If the Coal Board and the Ministry want to popularise them, something must be done on the lines that I have suggested.
I regret keeping your Lordships all this time. I have endeavoured not to make apolitical speech and to be quite constructive in my remarks. At the same time, I want the Government to realise that the time has arrived for very vigorous action in this matter, for in addition to the Report we are discussing we have had the Ridley Report, and, recently, the British Electricity Authority's Report for 1952–53 and the Report of the Department of Scientific and Industrial Research on District Heating, Parts 1 to 6. All these Reports make depressing reading, and indicate growing concern about the fuel situation. The fuel crisis of 1947 is a warning that we should remember, for then a relatively small shortage of coal, over a matter of a few days. closed down a large part of industry in this country. A large number of workpeople were thrown out of employment, and the cost to the country was £200 million. This nation cannot afford scarcities of fuel, either from the point of view of importing or from that of the wastage which takes place. Our reformation in the use of fuel should commence without delay, and the Government should encourage it to come into operation.
§ 4.35 p.m.
My Lords, I should like at the outset to offer the apology which I think is due to the noble Lord, Lord Lawson, for not having been in my place to hear his earlier remarks. I was unavoidably prevented from listening to the first part of his speech, and I am sure, having listened with great interest to the second half, that I was the loser. I hope your Lordships will forgive me if I draw a comparison between the number of noble Lords who have indicated their intention of speaking in this debate and the number who spoke in the debate on television last week. I would not for a moment try to belittle in any way the importance of the discussions that took place on television. Anything that can mould public opinion as television can is of vital importance. But 894 this subject of our national fuel resources, and the question of whether those that are available are going to balance the need, is just as important—indeed, it is absolutely vital to our future.
Other noble Lords have referred to the fact—and it is mentioned in the Report which we are now discussing—that coal is virtually our only source of heat and energy. If I may, I will just read one or two lines of the Report, for I think it indicates how the nation as a whole regards this matter. The Report says:The problem of conserving Britain's coal resources effectively … is"—I think it would have been truer to say "should be"—of deep concern to the nation.The Report goes on:Complex as it is, lamentably few appreciate its urgency … it is certainly not generally recognised by the public that our coal resources, as limited as they are valuable, are being burnt up at a rate culpably prodigal.That is the position. Therefore, perhaps I shall be forgiven if I suggest that the comparatively slender interest shown in your Lordships' House in this subject is no more than a projection of what the country generally feels on this matter. Why is this? Two or three noble Lords to-day have pointedly avoided technicalities. Is it that the general public regard this matter as too technical? There may be something in that, but I do not think that is the real obstacle which we have to contend with and overcome. I do not think that the real obstacle is a technical one.
Those of your Lordships who have studied the Report will have noticed certain, to my mind, very important things. They will have noticed that the team which went to America discovered nothing very new, and nothing that was not already known to technologists in this country. They will have discovered that good plants in America were found to be no better than good plants in this country. They will have noted that technicians in America are probably no better, and probably have no more skill, than technicians in this country. Noble Lords will also have gathered that combustion engineers in America are no better than combustion engineers in this country. In fact, I have heard it suggested that this Report which we are discussing could have been written fifteen years ago in this country, without anyone having 895 gone to America to make inquiries at all. I believe that, technically, that is true, though I do not wish to appear to belittle in any way the importance of the work of the productivity teams that have visited America. They have done immensely valuable work and we are all grateful for the hospitality we have received from the United States. That is true of this Report as of any other. There is one point which alone justifies the team's visit to America, and which is of outstanding importance. Whereas it may be true that there is no more technical knowledge in America, the fact remains that apparently they know how to apply it much better than we do in this country. We have to take that with some reservation, because, obviously, conditions in this country are in many ways different from those in the United States. But the fact remains that, whilst we have as much knowledge as there is over on the other side of the Atlantic, we have not applied it in all cases to the extent they have and to the extent we must apply it.
Why is this so immensely important? I think it is generally recognised that if we are to maintain our position as an industrial country, and to maintain our standard of living, let alone improve it, we have to increase our general productivity by, broadly speaking, 5 per cent. per year. That means, if we do nothing to save, that whereas to-day industry is using 100 million tons of coal a year, in ten years' time the amount will have gone up to 150 million tons of coal a year. Will that amount of coal be available? As my noble friend Lord Ridley said, the answer is to be found in the National Coal Board's own Plan for Coal. They hope to be able to raise their total output from approximately 204 million tons in 1950 to approximately 240 million tons somewhere between 1960 and 1965. Taking account of the increase in domestic use and, we hope, in exports and in other directions, will that increase in production balance the increase in our industrial consumption? It is a matter of elementary arithmetic to see that, unless we do something about saving fuel and cutting down that consumption, the increased production will be far short of the increased consumption.
Somehow, those industries which use coal have to see where and how it can 896 be saved. I want to confine my remarks to the industrial use and not the domestic use of fuel, though I realise that in some respects the latter is equally important—and, in some respects, almost more difficult. The Report refers to the possibility of a saving of 30 million tons per annum. Where can this amount be saved? Unfortunately, it is not just a matter of spreading that 30 million tons of saving over the whole of industry. It is not so easy as that. The spheres in which savings can be made are limited, because already many of the larger users of coal have plants that are highly efficient and leave very little scope for increased efficiency. At the other end of the scale are the very small users, and it is difficult sometimes to see how we can get them to do much about it. I would suggest, therefore, that the major saving has to come from the medium-sized firms who to-day are not always as efficient as they could be.
What is the obstacle these firms are up against? Why do they not put in all the equipment which is so well known and has had so much practical use? I think the obstacles to putting in this equipment are two. There is the psychological aspect and there is the financial aspect, which the noble Viscount, Lord Hall, covered, and with which I mostly wish to deal. It is a question of shortage of capital. That shortage exists not only in private industry but also, I suggest, in the nationalised industries. There is only a limited amount of capital available in this country, and the Government of the day have to decide where it can best be spent. Obviously, they will spend it where the immediate results in increased production for our immediate needs can be most pronounced. Exactly the same thing happens with a private firm. A board of directors will spend their limited resources of capital on plant and equipment which will give them the most immediate returns for that expenditure.
Where we come up against difficulty—and this is not generally appreciated—is that the expenditure on fuel forms only a small part of the total cost of any product. In only 3 per cent. of industry does the fuel bill amount to more than 10 per cent. of the total cost of production, and in more than 88 per cent. of industry the fuel bill amounts to less than 5 per cent. of the total cost of production. 897 So we must realise that a saving in coal of even 30 per cent. or 40per cent. has very little effect on the overall cost of industrial production. When it is also realised that to achieve that saving and obtain, say, a 10 per cent. return on the capital invested is far from easy, we can see that there is little financial incentive to spend money on fuel-saving equipment, whether it be chain grates for boilers, automatic stokers or anything else. Therefore, the question is: how do we get over this lack of incentive to put in fuel-saving equipment?
There are two schools of thought about how that should be approached. There is the school of thought that asks for compulsion and the school of thought that wishes to do it by means of education. I do not think anyone would like to do it by compulsion, except as a matter of the very last resort—certainly I should not. But we have to see whether education will get us what is needed, and needed quickly. It is difficult to get this across to an industry. A small industrialist who uses very little coal is likely to say, "I use so little, I shall be all right in any event. I am not going to worry about it." Yet it is only by every industry making its contribution to saving that the overall national saving will be achieved.
As the noble Viscount, Lord Hall, so clearly pointed out, in 1947 we learned only too well that, if there is an overall shortage of coal, the wheels of industry come to a full stop; and that affects everyone, however much or however little coal he uses. Therefore, somehow we have got to get it across to those who use fuel, whether they use large or small quantities, how vital it is to use as little as they possibly can. To this end, I very much welcome idle setting up of the National Industrial Fuel Efficiency Service. That is an important step in the right direction. They have a difficult task before them, and I am sure we all wish them well. I would add merely that I hope that if, as time goes on and they gain experience, they find their powers, or their terms of reference, inadequate to carry out that task, Her Majesty's Government will be the first to make sure that the matter is put right, so that nothing will prevent them from pursuing this all-important task.
It would be wrong for anyone, having said so much, not to say something about 898 the considerable degree of fuel saving which, in certain respects, has already been made. Had there not been the degree of fuel saving in the last twenty or thirty years that has been achieved, then the problem to-day would be even more difficult than it is; and instead of having to try to save 30 million tons a year now, the amount might be twice as much, or even more than that. Therefore, we can feel that there are many in this country who appreciate the problem, and who, whether from their own point of view or in the national interest, have gone out of their way to put in the requisite plant to use coal as efficiently as possible. But we cannot leave it there. We must pursue this matter ruthlessly and constantly, because, unless the problem is solved, there is no doubt that we shall be cutting away from the very foundations of our economy the one cornerstone on which we depend.
§ 4.52 p.m.
§ THE PAYMASTER GENERAL (THE EARL OF SELKIRK)
My Lords, I should first like to express my regret that the, noble Lord, Lord Macdonald of Gwaenysgor, is not with us to-day. I know it is the earnest wish of your Lordships that he will be with us in full health at a very early date. The noble Lord, Lord Lawson, has raised what we all recognise to be a most important subject. One of the points which he made early in the debate was the, importance of getting the significance of this subject fully understood throughout the country. I find it hard to understand why there should be difficulty about doing so. It is not easy to conceive of a more colourful speech than that made by the noble Viscount, Lord Hall, who gave the picture vividly and forcefully. One could only wish that his speech would have wider currency. I felt, too, that there was great force in the comparison made by the noble Lord, Lord Rochdale, in comparing this debate with the one which took place last week. Of course, comparisons are always odious, and perhaps I may leave it at that.
The economics of this subject are so complicated, the nature of the problems to be solved so intractable, and it is so easy, as noble Lords have said, to lapse into great obscurity in what one is saying, 899 that it is difficult to put across clearly what the position is. However, today we have the advantage of having before us this Report by high-grade experts and technicians who have examined this problem closely. As the noble Lord, Lord Lawson, said, we are grateful to them. I feel that we should also recognise our indebtedness to Sir Stafford Cripps, along with Mr. Paul Hoffman, I believe, who first setup the Anglo-American Productivity Council. Nevertheless, as other noble Lords have said it is idle to pretend that there are not great differences between this country and the United States. That does not mean, however, that we should allow ourselves to be prevented by any petty rivalry from learning as much as we can from the varied and wide developments which have taken place in the United States.
The Report emphasises the dependence of industrial productivity in this country on the availability of energy, both as heat and as power. I might add that on industrial productivity depends not only the standard of life which we are able to enjoy, but, to some extent, our continued existence at all. Therefore I agree entirely that it is impossible to exaggerate the importance of seeing that power is available. The Report compares—and I think it is an interesting comparison—the sources of energy available in the United States with those available in this country. It finds that in the United States the sources of power are plentiful. For instance, it says that a new oil well is opened every twenty-three minutes, which is twice the speed at which oil wells become exhausted. It says, also that the resources are wider and more varied. For instance, they have natural gas, of which we have little in this country. Moreover, the resources of the United States can be more easily expanded than our own. For example, during the war they expanded their coal production by something like 50 per cent., to a figure which is just about three times our present production of coal.
The varied nature of the supplies of the United States can be shown by the following percentages—and I wish to give these, though percentages are not much more than an order of magnitude. The United States depend to about 40 per cent. on coal, 37 per cent. on crude 900 petroleum, 5 per cent. on hydro power and 18 per cent. on natural gas. That is a much more balanced state of affairs than we have in this country, where we find (I vary the figures of the noble Viscount, Lord Hall, a little, but this is no more than an order of magnitude) that we depend on coal to the extent of 90 per cent., on oil to about 9 per cent. and on hydro power to not more than one-half of 1 per cent. An interesting point which is brought out by the Report is that, in spite of this abundance in the United States, Americans are more efficient and more economical in the use of fuel than we are. That is a general line which runs through the Report of the Committee. It appears to me that the reasons for it, as seen from the Report, are, first, the competition between the different sources of energy; and, secondly—and this is a point which was emphasised by the noble Viscount, Lord Hall—their readiness to scrap obsolete equipment and to instal better and more economical plant in its place.
Quite rightly, in these circumstances, the Report devotes a great deal of space to the subject of how energy produced from coal is used in this country. I agree entirely that this subject cannot be over-emphasised, although I should like to make this point. It was said that 80 per cent. of the energy in coal is lost in use. It is not quite fair to put it in that way, because one cannot produce an electricity generating plant to-day which is more than about 30 per cent. efficient, so that the loss of 80 per cent. cannot be ascribed to wasteful use by human beings. The Report deals with a large number of technological questions, such as whether we have too much standby plant, problems of insulation, and many others. I do not propose to discuss them, though it is interesting to note—this point was made by the noble Viscount, Lord Ridley, and other noble Lords—that in a number of cases the British practice, if anything, seems rather better than the American practice, and that, in any case, the best British practice is at least as good as the best American practice. I do not think these matters are suitable for discussion in the House in detail, particularly because in many cases their application depends on the individual circumstances; and the National Industrial Fuel Efficiency Service has been set up precisely to deal with these technical subjects.
901 I am glad to be able to tell your Lordships that that organisation was incorported to-day, and so it is already under way and, I hope, will soon be able to attain results. Your Lordships may know that the Chairman is Air Chief Marshal Sir Leslie Hollinghurst. Anyone who knew the dynamic vigour with which he handled questions of supply at the Air Ministry during the war will readily recognise that we are fortunate to have him fill this position. He has been on the Air Council since the war as Air Member for Personnel, and retired only last December. Strictly speaking, he is not a technical man, but is an administrator who has been accustomed to handle a wide range of technical problems from an administrative angle. The noble Lord, Lord Lawson, asked for the names of the members, and if your Lordships desire, I will give them. They are: Sir Patrick Dollan, Mr. G. M. Flather, Mr. L. A. W. Jenkins, Sir Edward Herbert, Mr. Jack Tanner, Sir John Hacking, Mr. Henry Jones, and Mr. Julian Pode.
As already announced, the Fuel Efficiency Service to Industry, carried on by the Ministry of Fuel and Power, will be wound up. I should like to take this opportunity of thanking the noble Viscount, Lord Ridley, for what he has said in respect of that organisation. The new service will take over a much wider field. They will take over the greater part of the technical staff of that branch, in so far as they want to go to the new organization; and it is not easy to find people for that type of work. We think the new organisation will employ outside consultants where it is appropriate to do so. We have wound up the branch in the Ministry because we think that it would be pure duplication. The new Service can cover a wider field, and we also think that the service—the object of which is to enable industry to make itself more efficient—should be run by a non-profit making organisation, supported by the people whom it is intended to benefit. The organisation is receiving extensive help from the coal, electricity and gas industries, and its task will be to assist commercial and industrial organisations. This is held to include, for this purpose, schools, hospitals, Government Departments and other public institutions of any sort or kind. On the domestic side, the Coal Utilisation Council will continue to do its important work in advising 902 domestic consumers in the use of solid fuels in their homes.
I should like to make one or two comments on some of the more general recommendations of this Report, to show that we are making some progress. It emphasises the importance of parallel running and that interchange with public electricity supplies should be encouraged. The electricity boards have now abandoned the restrictive conditions on private generation, as was recommended in the Ridley Report, and are prepared to supply stand-by power at economic prices. A point was raised by the noble Viscount, Lord Hall, as to the use of coal by the railways. He suggested that the railways were too particular about the use of large coals. I am glad to say that British Railways have agreed to take a. substantial tonnage of small coals in place of the large, and they have also agreed to take a substantial amount of briquettes, which is helping in its way.
The Report also emphasises the need to install dual-purpose plants—I do not want to become too technical, but this is a matter which has been considerably stressed—combining the generation of both heat and power. Common service installations for heat have, of course, been in operation for many years on trading estates, and the British Electricity Authority, in consultation with other interests, is studying the whole question of dual-purpose plants; they are willing to undertake production on this basis where it can be shown to be economic-ally justified. There are, of course, two main types. One is the generation of power as a by-product of heat, and the; other is heat as a by-product of power. The former—that is, the generation of power as a by-product of heat—is at the present time much easier as an economic proposition and, of course, is, and has been for a long time, widely used, though. there is considerable scope for extending the use of this type of plant. The latter—that is the generation of heat as a by product of power—is more difficult. It is being done at Battersea at the present time, but it is not yet possible to reach any general conclusion.
I should like to make one general point in regard to these matters. It is always easy at any stage in history to say how much better it would be if all our plants were brought up to the best available practice at any given time. But, as has 903 been said by more than one noble Lord to-day, that would involve an enormous capital cost. Not only that, it would tend towards standardisation, which would make it more difficult to adapt our layout and resources to new developments as they occur. What I suggest is needed is a constant process of revision to the best possible practice with the resources available, always keeping open the way for further improvement as resources become available.
I would also echo one point which has been made by several noble Lords. In emphasising the importance of conserving our resources we must not forget what has happened in the past, and the developments which have, and are now, taking place. Several noble Lords have mentioned that matter. Our ability to increase the amount of energy for industry has been directly dependent on a steadily improving efficiency in the use of plant. Let me give an example of this. Our consumption of coal to-day has not increased a great deal since the beginning of this century—it has increased about 25 per cent. The figure of home consumption, in the earlier period, was about 170 million tons a year, and it is now about 209 million tons a year. To that falls to be added 18 million tons of oil, but the volume of these resources alone is quite inadequate to explain the fact that the real national income has doubled during that period.
I think one may take it that useful power and heat has now also about doubled, and this could have happened only through a steady, progressive increase of efficiency in the use of resources in this country. To give one example of that, 1 lb. of coal to-day produces three times as much electricity as it did in 1920. There is, of course, no doubt that oil has played an important part. Indeed, in the first fifty years of the twentieth century the increased rate of world consumption and production of oil each year has been fantastic. Its development this century has been far faster than ever was the development of the coal industry when at the height of its expansion in the nineteenth century. The oil industry may now be said to be in mid-course. While not in any way underestimating the tremendous possibilities of its future in this country, we 904 cannot, of course, consider that it will replace in the immediate future our dependence on coal.
I should like to answer one or two points which have been raised. The noble Viscount, Lord Ridley, raised the general question of production of coal. If I may say so, that subject is outside this debate, and I do not propose to say much about it. It is, however, I think, fair to say this. So far, the output per man-shift this year is running, for a comparable period, higher than it was last year; and we are always glad about that. I am not saying, that the position is entirely satisfactory, because it is not. What I can also say is that the rate of capital investment in collieries is progressively increasing. We shall not be up this year to the figure which was laid down in Plan for Coal. The Plan for Coal said that last year investment should have been £59 million at prevailing prices, and, in fact, it was £38 million. But I am told that by 1954, the capital investment will be greater than that in Plan for Coal. It will, however, take some time to make up the arrears of investment which have accumulated in previous years. This is due, to a large extent, to the need to allow the Board to increase their complement of engineers.
The noble Viscount, Lord Hall, got angry with me about Phurnacite, but there is no exploitation by the National Coal Board in this respect. I am informed that this is high-grade fuel, expensive to produce, and that the National Coal Board are making, if any profit at all, a very small one. That is the information which I have.
§ VISCOUNT HALL
I thank the noble Earl, but is it possible to have a discussion upon this point? I know the actual cost of this fuel when these works were introduced; and the profits shown in last year's Coal Board Report are an indication that the figure has substantially risen. If other fuels cost less than £9 5s. a ton, there will be no inducement to people to put in special grates to burn this fuel.
§ THE EARL OF SELKIRK
The noble Viscount will appreciate that this is a fuel which is more efficient than the comparable amount of coal.
§ THE EARL OF SELKIRK
The noble Viscount evidently thinks not, but there is a difference between personal experience and scientific advice. I am informed by scientific advisers that it is a more efficient fuel. It also takes more expensive plant to produce it. It is true that there was a profit on the briquettes last year, but these profits were made on the briquettes exported. That, I think, is as far as I can go on this matter at the moment.
The noble Viscount talked about the loan scheme, which is a very important matter. It goes much further than mere tax exemption: it is a loan for the improvement of facilities for fuel efficiency. You get two years free of interest, and repayment is extended over twenty years—which is quite important. The response is much better; at present there are under consideration from forty to fifty applications, which may involve an expenditure of perhaps £250,000.
§ VISCOUNT HALL
May I ask the noble Earl—I am sorry to interrupt him again—whether, before these schemes ware launched, any discussions took place between the Minister and those who represent the industry, and, of course, the domestic users? This is of great importance, because I have heard complaints that even the new scheme—although I am quite prepared to accept what the noble Earl has said—is not satisfactory.
§ THE EARL OF SELKIRK
I think the noble Viscount is quite right about discussions; I think that careful discussions were held with the interests involved. I cannot, however, give an answer as to the nature of the discussions which led up to the formulation of this scheme. I will try to see whether I can give the noble Viscount some more information.
Two points in this report were mentioned by the noble Viscount, Lord Ridley, and I am grateful to him for having spoken, with the full authority he has as the Chairman of the Committee which produced an extremely comprehensive Report. I am especially grateful to him because he has, I understand, come 906 down from Northumberland to speak. It has been argued that fuel conservation is of much greater importance to the country than it is to the individual industrialist. That is a point which Lord Ridley made. To attempt to achieve 15 per cent. greater efficiency in fuel consumption is not, perhaps, of great financial importance to some firms. The report says that industry should he "actively assisted," persuaded or "coerced" into more efficient use of fuel, and that accordingly the Government should lay down, definitely and clearly, precisely the purposes for which different forms of fuel should be used. It is argued that electricity, for instance, is the most efficient form of lighting, and that therefore it should be compulsory that all lighting should be done by electricity; that solid fuel is the most efficient for space heating, and that therefore we should use nothing bet solid fuel for that purpose.
Lord Ridley's Report, the most exhaustive and, by general admission, the most authoritative Report on this subject, came to an entirely different conclusion. I am grateful to Lord Ridley for having put this matter so clearly. There is a great deal of loose talk about a national fuel policy as if it ought to be imposed upon the people. Our view is that persuasion should be used, as far as it can be—otherwise Lord Lawson might find himself in a house which was completely centrally heated; and. I am sure he would dislike that intensely. In our view, a far more effective fuel policy can be bunt on the Ridley Committee's recognition that the choice between fuels must be left to the individual consumer, and that the industries should compete with one another to supply his needs efficiently. But it must be an individual choice related to price. I am grateful to Lord Ridley, also, for dealing with the peak use of electricity. His Committee recommended, and the Government agreed, that prices and tariffs should be related to the "relevant costs." This is well understood by the boards; and they review their tariffs and prices from time to time and the Minister keeps in touch with this important work through his Co-ordinating Committee to which I will refer in a moment.
The second general point which I would mention is also one that has been mentioned by Lord Ridley. His Com- 907 mittee recommended that there should be some permanent, non-political fuel and power board to undertake the higher direction of the three nationalised industries concerned. We appreciate the importance of a high measure of co-ordination between these industries, which was referred to in the Ridley Report, and we think that that can be covered most effectively by meetings which are now being held by the Minister's Co-ordination Committee, where the three heads of the nationalised industries meet the Minister. A good deal of co-ordination is already taking place and they can take steps when necessary to form ad hoc committees. But a National Fuel Board of the sort recommended in the Report would either be a sort of Post Office between the industries concerned and the responsible Minister and Parliament, or alternatively, it would be a sort of barrier between Parliament and the responsible Minister and the industry. If the latter, it would certainly undermine the authority of the boards responsible and, moreover, would reduce their sense of responsibility for the industries themselves. It is unthinkable that great industries like this should be completely divorced from Ministerial or Parliamentary control, and it is absurd to suppose that industries which are entirely dependent for their capital resources on either Treasury money or Treasury-guaranteed money should be removed from Parliamentary control. It seems to me that this is quite impossible. The Report would have added to the five rather theoretical freedoms of Mr. Roosevelt, a sixth freedom: a freedom from political sway. It is a pure figment of the imagination to believe that people can live together in a community without political considerations impinging on their lives in some form. If we do not like the way in which they impinge, then the solution is to change the nature of the political impact, rather than to pretend that we can just abolish politics in the same way as we have abolished child labour or the slave trade.
So far, I have been dealing substantially with coal, the importance of which I do not underestimate; but we must raise our eyes to other sources of energy. The noble Viscount, Lord Hall, has emphasised the importance of research. Perhaps 908 I may mention one or two developments which are taking place. First of all, the Government have decided to build two experimental generating stations powered by atomic energy. These stations are being constructed in consultation with the British Electricity Authority. It is, however, clear that large-scale development of atomic power will take many years. It is still in the future and its economic efficiency has yet to be established. That is, of course, by far the most important possibility of development that we see at the present time. However, there are other important developments which may be of significance. I should like to mention the underground gasification of coal, and it is important here to remember that this is coal which can probably never be economically worked by ordinary mining or opencast operations. The process has been demonstrated experimentally, and it remains to be seen whether it can be made economic on a large scale.
The noble Lord, Lord Lawson, mentioned energy from methane from coal seams. We are hoping to make some use of that. Another possible source of energy is the small percentage of methane or fire-damp in mine ventilation. The Ministry are developing a gas turbine to run on this very weak gas, and the National Coal Board are arranging to install and test the machine in a colliery. Various other types of gas turbine are being developed, and they have the advantage that they can give power without the use of big boiler plant or great quantities of cooling water. It is hoped to find means of operating large gas turbines for power stations by the use of indigenous fuels such as peat, and a wide range of low-grade coals. Such turbines have been successfully run on an experimental basis, both on coal and on peat, and an experimental turbine will shortly be installed at a peat bog for further development. Oil-burning gas turbines are already used for driving locomotives, on an experimental basis, and a coal-burning gas turbine locomotive is now under construction.
§ LORD LAWSON
I am sorry to interrupt the noble Earl but in how many areas are they extracting gas now? How many operations and explorations are going on?
§ THE EARL OF SELKIRK
I am just coming to that. The noble Lord is referring, I think, to the Gas Council?
§ THE EARL OF SELKIRK
I may mention that the British Electricity Authority and the North of Scotland Hydro-Electric Board have each erected, for test, experimental windmills, and wind velocities are being tested in various parts of the country. It is too early to for many firm judgment yet, but indications are at least promising.
The Gas Council have examined geological reports on the question of natural gas, and are satisfied, from that survey, that they are justified in carrying out a systematic search; they are doing that in association with the Anglo-Iranian Oil Company. I cannot say more on the subject than that, except that it is being done on quite a large scale. Water power is also used in Scotland and England. It is not, however, expected that any very important new source is likely to be revealed here. Tidal power has been closely studied, but the economic case for embarking on what seems the best possible instance—that is the Severn Barrage—has not been established. Research still continues on this subject, however.
I will now reply to Lord Hall's question. The National Industrial Fuel Efficiency Service was set up on the advice of the Pilkington Committee which, in turn, was set up after consultation with the National Production Advisory Council on industry, of which the Chancellor of the Exchequer is Chairman. So I think that we can assume that this Committee was set up after fairly close consultation with what are generally called "both sides of industry."
§ VISCOUNT HALL
To which Committee is the noble Earl referring? I thought I should receive some information about consultation between employers and industrialists and the Minister in relation to the setting up of the loan system.
§ THE EARL OF SELKIRK
I beg the noble Viscount's pardon, that is quite 910 true. I am afraid I shall have to let him know the answer to that.
It only remains for me to say this: that I most warmly thank the team for what they have done, and for their valuable Report, which I hope will receive the fullest publicity. I thank the noble Lords who have taken part in this debate, which not only emphasises to the country the importance of the report but gives a large measure of publicity which we all recognise to be extremely desirable. I think we can never know too much about the United States of America; we can never be too ready to learn. But that does not mean in any way that we should treat them with adulation or endeavour to mimic them. We have our own problems in this country, and our own resources, and we must endeavour to meet our requirements with such resources as we have.
§ 5.28 p.m.
§ LORD LAWSON
My Lords, I should like to thank the noble Earl who has answered for the Government, and I think answered fairly fully, the various points that have been put to him. I should also like to thank noble Lords who have taken part in this debate. Your Lordships will agree that it has been well worth while discussing this important subject. Although there has not been what we might call a crowded House—the noble Lord, Lord Rochdale, referred to another debate—I feel that there has come out of this debate sufficient information, and some pointed information, as will, while not creating what one might call a public sensation, yet give information and draw the attention of intelligent men and women throughout the country who are deeply concerned with the national welfare to this matter. If that is so, then not only will it have brought pressure to bear upon the Government, but it will have helped on the cause, in which we all have a part, of bringing a sense of responsibility generally in this country to bear upon this matter of fuel economy. Having said those few words, I ask the leave of the House to withdraw the Motion.
§ Motion for Papers, by leave, withdrawn