Lords Sitting of 26 October 1960

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Jenkins

VISCOUNT AMORY
The Right Honourable Derick Heath-coat Amory, T.D., having been created Viscount Amory, of Tiverton in the County of Devon—Was (in the usual manner) introduced.

LORD SANDERSON OF AYOT
Basil Sanderson, Esquire, M.C., having been created Baron Sanderson of Ayot, of Welwyn in the County of Hertfordshire—Was (in the usual manner) introduced.
The Marquess of Bristol—Sat first in Parliament after the death of his father.

UNITED NATIONS FINANCES
2.52 p.m.
LORD FRASER OF LONSDALE: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government if they will give full particulars of the total regular budget of the United Nations with the names of those countries who subscribe and of those, if any, who are in default for two years or more; and if they will explain how the United Nations finances special enterprises, such as Emergency Forces in the Middle East and the Congo, stating which countries are paying and how much they are paying.]
THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF HOME): My Lords, the budget approved by the 14th General Assembly for 1960 was 63,149,700 dollars gross; this latter figure excludes possible supplementaries. All members of the United Nations contribute to the regular budget according to a percentage assessment which is based broadly on their ability to pay. No Member State is at present in arrears in the payment of its contributions to such an extent that Article 19, which could in certain circumstances disqualify a member from voting, may be deemed to apply.
Whatever form the "special enterprises", to which the noble Lord refers, may take, the General Assembly is responsible for deciding how they shall be financed. Generally, the more limited operations are financed from the regular budget under the Chapter "Special Missions and Related Activities"; that is to say, their costs fall to be met by all Member States. Operations of a larger nature, such as the despatch of the United Nations Emergency Force to the Egypt/Israel border, and to the Congo, are treated by the General Assembly on an ad hoc basis. Because of opposition by certain members of the General Assembly, to the inclusion of the costs of the United Nations Emergency Force in the regular budget, a Special Account was set up to which all Member countries are required to contribute according to their percentage assessment of the regular budget. For example, the United Kingdom contributes 7·78 per cent. of the regular budget of the United Nations; and is therefore bound to contribute 7·78 per cent. of the costs of United Nations Emergency Force. With the permission of the House, I will circulate details in the OFFICIAL REPORT.
The method of financing the Congo operation will come before the current General Assembly for decision as soon as the Secretary-General has submitted an estimate of the costs. A voluntary fund with a ceiling of 100 million dollars has already been set up to meet some of the short-term financial and budgetary needs of the Congo and Her Majesty's Government have indicated that they will make a contribution to this fund.
Following are the details referred to:

STATEMENT OF CONTRIBUTIONS TO THE UNITED NATIONS EMERGENCY FORCE SPECIAL ACCOUNT FOR 1960 AS AT 2OTH SEPTEMBER, 1960

Member States

Net Assessments to the UNEF Special Account for 1960 U.S. $

Amount unpaid at 20 th September, 1960 U.S. $

Afghanistan

5,926·00

5,926·00

Albania

3,951·00

3,951·00

Argentine

109,594·00

109,594·00

Australia

176,998·00

—

Austria

42,561·00

42,561·00

Belgium

128,465·00

—

Bolivia

3,939·00

3,939·00

Brazil*

100,693·00

—

Bulgaria

15,826·00

15,826·00

Burma

7,878·00

—

Byelorussian Soviet Socialist Republic

46,419·00

46,419·00

Cambodia

3,951·00

—

Canada

307,182·00

—

Ceylon

9,865·00

—

Chile

26,643·00

26,643·00

China

989,797·00

989,797·00

Colombia

30,559·00

30,559·00

Costa Rica

3,951·00

3,951·00

Cuba

24,679·00

24,679·00

Czechoslovakia

85,983·00

85,983·00

Denmark

59,212·00

59,212·00

Dominican Republic

4,938·00

—

Ecuador

5,938·00

5,938·00

El Salvador

4,926·00

4,926·00

Ethiopia

5,868·00

5,868·00

Federation of Malaya

16,732·00

—

Finland

35,555·00

—

France

1,272,584·00

636,000·00

Ghana

6,913·00

6,913·00

Greece

22,762·00

22,762·00

Guatemala

4,915·00

4,915·00

Haiti

3,951·00

3,951·00

Honduras

3,951·00

3,951·00

Hungary

41,516·00

41,516·00

Iceland

3,951·00

3,951·00

India*

242,453·00

242,453·00

Indonesia

46,385·00

46,385·00

Iran

20,682·00

20,682·00

Iraq

8,854·00

8,854·00

Ireland

15,779·00

—

Israel

13,805·00

—

Italy

222,476·00

—

Japan

216,609·00

216,609·00

Jordan

3,951·00

3,951·00

Laos

3,951·00

—

Lebanon

4,938·00

4,938·00

Liberia

3,951·00

3,951·00

Libya

3,951·00

3,951·00

Luxembourg

5,926·00

—

Mexico

70,158·00

70,158·00

Morocco

13,851·00

13,851·00

Nepal

3,951·00

3,951·00

Netherlands

99,626·00

—

New Zealand

41,481·00

—

Member States

Net Assessments to the UNEF Special Account for 1960 U.S. $

Amount unpaid at 20 th September 1960 U.S. $

Nicaragua

3,951·00

3,951·00

Norway

48,407·00

—

Pakistan

39,343·00

39,343·00

Panama

3,939·00

3,939·00

Paraguay

3,951·00

3,951·00

Peru

10,817·00

10,817·00

Philippines

42,504·00

42,504·00

Poland

135,134·00

135,134·00

Portugal

19,707·00

—

Roumania

33,406·00

33.406·00

Saudi Arabia

5,915·00

5,915·00

Spain

91,643·00

91,643·00

Sudan

5,868·00

5,868·00

Sweden

137,237·00

—

Thailand

15,803·00

—

Tunisia

4,938·00

—

Turkey

58,248·00

—

Ukrainian Soviet Socialist Republic

177,778·00

177,778·00

Union of South Africa

55,180·00

—

Union of Soviet Socialist Republics

2,706,146·00

2,706,146·00

United Arab Republic

31,477·00

31,477·00

United Kingdom of Great Britain and Northern Ireland

1,545,987·00

—

United States of America

6,497,064 ·00

—

Uruguay

11,806·00

11,806·00

Venezuela

49,475·00

49,475·00

Yemen

3,951·00

3,951·00

Yugoslavia*

34,567·00

34,567·00

*Invoices when received for services rendered in connexion with the contingents provided by Brazil, India and Yugoslavia to UNEF will be set off against the unpaid contributions.
UNITED NATIONS REGULAR BUDGET
Details about the contributions of Member States to the United Nations regular budget, including arrears of payments, can be found in United Nations Document No. A/C 5/824 of September 26, 1960. This document is available in the Library of the House.
LORD FRASE.R OF LONSDALE: My Lords, while venturing to welcome the Foreign Secretary in answering his first question, which answer I regard as not wholly unsatisfactory, may I ask the noble Earl if the paper which he is going to circulate will show whether certain members will have voted when they were in default; and, if so, which they were? In regard to the last part of his Answer, especially on the Congo, would it not be fairer and follow precedent if the retiring Colonial Power were to pay the bill instead of the British taxpayer?
THE EARL OF HOME: My Lords, the information which I will circulate will no doubt show the countries which are in arrears, but they are not in arrears to such an extent as to affect their voting rights up to now. I think that if the noble Lord studies the information I shall circulate he will see that that is so, and Article 19, therefore, is not brought, so far, into operation. So far as the cost of the Congo enterprise is concerned, I have no doubt that a heavy charge will fall upon ourselves, but if the noble Lord or any other noble Lord can suggest any other solution I should be only too glad. But so long as the United Nations operation in the Congo continues we must bear at least our fair share of the charge.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, could I ask the Foreign Secretary whether he would answer this question? He said that the cost of the United Nations Congo expedition would be considered at the next meeting of the Assembly, I think, or the current one. I see there has been an estimate that up to the present about £24 million is the cost. But is this consideration by the Assembly to take place at this stage or when the operation is completed?
THE EARL OF HOME: My Lords, I think that what I said was that a voluntary fund with a ceiling of 100 million dollars (that is roughly £34 million) has already been set up to meet some of the cost. But I think the cost, looking ahead over the next nine months or so, will have to be settled during this session of the Assembly.
EARL WINTERTON: My Lords, might I ask my noble friend the Foreign Secretary whether, since we make a large contribution, it will be open to Her Majesty's Government, if they think fit, to make representations on the wholly ineffective use of the United Nations troops in the Congo and the fact that they stand idly by while Africans are massacred by Africans?
THE EARL OF HOME: My Lords, that I think is a separate question altogether from the question of the actual cost of the operation.

WAR PENSIONS
2.56 p.m.
LORD FRASER OF LONSDALE: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have any statement to make as to any improvement which they may be contemplating in War Pensions and/or War Widows' Pensions.]
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, I have no statement to make on this subject at present.
LORD FRASER OF LONSDALE: My Lords, may I ask my noble friend, while congratulating Her Majesty's Government on the fact that the cost of living has remained stable for three years and that wages have risen by 12 per cent. in the last three years since a major reform of war pensions was made, whether the time has not now come when war widows and war pensioners should share in these good things; and could he not make a statement or foreshadow that one will be made soon?
THE EARL OF DUNDEE: My Lords, the Government, of course, have these considerations in mind. But I do not think it is likely that a statement will be made in the present Session of Parliament.

CASUALTY SERVICES IN HOSPITALS
EARL WINTERTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the criticisms made by an unofficial committee of the methods for dealing with casualty cases in National Health hospitals and of other evidence to the same effect, they will appoint a Committee of Inquiry to examine the question.]
LORD ST. OSWALD: My Lords, the Standing Medical Advisory Committee of the Central Health Services Council

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appointed, earlier this year, a subcommittee under the chairmanship of Sir Harry Platt to consider the organisation of hospital casualty and accident services and to make recommendations regarding their future development. The Scottish Health Services Council has set up a similar Committee. I have no doubt that these Committees will consider the recommendations made in the study, based on twenty casualty Departments, which was recently published for the Nuffield Provincial Hospitals Trust.
EARL WINTERTON: My Lords, may I ask the noble Lord who answered the Question whether his attention has been called, as am sure it has been, to a most serious indictment of the arrangements for dealing with casualties which appeared by a responsible writer in The Times newspaper lately? In that case there was a mixture of inhumane and most ineffective treatment of a man who had broken his thigh and was suffering from shock? Are the Ministry of Health prepared to take any action in this particular case, in view of the fact that the answer given by one hospital made no mention of one of the worst features of the treatment—namely, that the patient was refused a cup of tea?
LORD ST. OSWALD: My Lords, my noble friend's Question was phrased in more general terms. I had not in fact read an account of the case to which he refers. All I think I can say this afternoon is that if my noble friend will acquaint me with the details, I, through my right honourable friend, will see to it that the sub-committee is informed of this case.
EARL WINTERTON: I am much obliged to my noble friend.
LORD STONHAM: Is the noble Lord aware that, at the instance of the Minister, every Regional Board has been very seriously considering this problem; that they are proposing to concentrate major casualty centres in the hospitals in each group, but that what is needed is more money to equip, expand and provide more casualty centres? And can he say whether that will be forthcoming?
LORD ST. OSWALD: I think that any decisions of that nature must naturally rest upon the findings of this sub-
1094
committee, which has been set up specifically for the purpose of discovering what the facts are, and of suggesting remedies.

THE POLARIS AND SKYBOLT MISSILES
3.2 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on the present stage of development of the United States missile Polaris and whether negotiations are taking place with the United States of America for its use, and what effect these negotiations will have upon the plans of Her Majesty's Government for Skybolt and the possible future of Blue Streak.]
THE FIRST LORD OF THE ADMIRALTY (LORD CARRINGTON): My Lords. Her Majesty's Government have no responsibility for the development of Polaris. So far as the possibility of its use by British forces is concerned, no negotiations are taking place between Her Majesty's Government and the United States Government, although we are very interested in this particular development and, as has previously been said, are in continuous and close touch with the United States Navy's programme of development.
In these circumstances, there can be no effect on the plans which have already been announced to acquire Skybolt missiles with which to equip certain aircraft of Bomber Command, in parallel with those of the United States Strategic Air Command. This partnership is an essential part of the deterrent, and it must be maintained. Nor does the Polaris programme in any way affect the decision to cease the development of Blue Streak as a military weapon.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am much obliged to the First Lord of the Admiralty for his Answer. I presume that, as the British Government have had no part in the development of Polaris, and no responsibility at all, that

1095
is the reason why we get the information in the first instance through an American film on Panorama—a most magnificent film, I think, and very demonstrative of the power of this almost entirely new operational deterrent. But may I ask the noble Lord, there having been no conversations as to the possible use of this weapon by the British member of N.A.T.O., whether it is proposed to extend its use to other members of N.A.T.O., or will this matter be discussed; particularly (I hope the noble Lord will forgive the length of the question) having regard to the view expressed from the American naval standpoint in the London Times series of articles on defence a few days ago, that this new form of submarine armed with such missiles could be destroyed only at base before it left or at base when it arrived back from its work? Further, has there been any conversation, as hinted in the Press, as to when one of these bases might be situated in this country? That would perhaps raise a fresh, serious difficulty for some people in this country.
LORD CARRINGTON: With regard to the noble Viscount's first supplementary, I have seen, as he has, a great deal of speculation in the Press about the possibility of offers by the United States of Polaris in one form or another for use by N.A.T.O. countries. So far as I am aware, no firm offer has been made and no decision has been reached. With regard to the second part of the noble Viscount's supplementary, this is an entirely different question from his Question on the Order Paper; and, as has been previously said, discussions have been taking place with the United States, but no statement can yet be made.
LORD SHACKLETON: My Lords, do we gather from the noble Lord that Her Majesty's Government have to wait for an offer, or are discussions taking place? And are Her Majesty's Government considering the suggestions that were made from a number of different parts of this House as to the possibility of the use of Polaris, not necessarily on a nuclear submarine of the kind we may not be able to afford to build, but on surface vessels?
LORD CARRINGTON: What I said—I think the noble Lord must have misheard me—was that, with regard to N.A.T.O., no offer has yet been made, so far as I am aware, by the United States Government.
LORD OGMORE: May I ask the noble Lord whether it is not a fact that Skybolt does not exist? Is it not also a fact that, even if it did exist, we have no aircraft from which it could be launched?
LORD CARRINGTON: The answer to the first question is, Yes. The answer to the second question is, No.
LORD OGMORE: In view of the answer to the second question, would the noble Lord indicate what the aircraft are?
LORD CARRINGTON: The Vulcan.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I hope the First Lord of the Admiralty will not mind my pursuing this matter, but the House is always exceedingly anxious about decisions on such vital questions as this. Of course, we do not want to impinge upon very secret conversations, but we think that on such matters of importance as I mentioned in my last supplementary question there ought to be consultation very early, and that Parliament ought to be informed and be able to give a view.
VISCOUNT STANSGATE: My Lords, after what happened with the U.2, are we going to embark on more adventures with this very secret weapon, which we cannot discuss without knowing how we are going to prevent their being used for illegal purposes?
LORD CARRINGTON: I think, if I may say so, that the noble Viscount is jumping to all sorts of conclusions.
VISCOUNT STANSGATE: I am very much obliged for the comment, but I should like an answer.
LORD FARINGDON: My Lords, I wonder if the First Lord would tell us whether he is aware that there is considerable anxiety in the country due to this request, or supposed request, by the Americans for the use of British bases for submarines in connection with Polaris, and whether Her Majesty's Government have any ideas which they

1097
can put forward as to the control of the use of this weapon when these submarines are operating from bases in this territory? American bases in this country, as the noble Lord is aware, are under our joint control. Will this in fact be the case? How can it be the case when Polaris submarines are based on British bases?
LORD CARRINGTON: My Lords, I have already pointed out that discussions have been taking place with the United States Government, but at the moment no statement can be made. Perhaps the noble Lord would be good enough to wait to see if a statement is made before he asks these questions, which are very difficult to answer when the situation has not arisen.
VISCOUNT STANSGATE: When the statement is ready, could it include a word as to whether the pledge given by President Eisenhower about the U.2 incident will be binding on his successor?
LORD CARRINGTON: I am afraid I have no idea what will be included in the statement. Perhaps the noble Viscount will be able to raise that question if and when the statement is made.

INCIDENT DURING THE QUEEN'S FLIGHT
LORD REA: My Lords, I beg to ask Her Majesty's Government the Question of which I have given them Private Notice, namely, whether they have any statement to make on the incident which occurred during the flight of Her Majesty the Queen from Denmark yesterday?
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, I am grateful to the noble Lord for asking this Question, but there is, I think, a Private Notice Question in another place resulting in a statement there; and, with the permission of the House, I would ask that my noble friend the First Lord of the Admiralty be allowed to make a statement, which will be an answer to the noble Lord's Question, at a suitable moment later in the Sitting.
LORD REA: I am much obliged to the noble Viscount.

ROAD TRAFFIC (DRIVING OF MOTOR CYCLES) BILL
Returned from the Commons, with the Amendments agreed to.

ADMINISTRATION OF JUSTICE BILL [H.L.]
3.9 p.m.
Order of the Day for the consideration of Commons Amendments read.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I rise to move that the Commons Amendments to this Bill be now considered. I am anxious to meet the convenience of the House, and not unnecessarily to impinge upon the time for the Motion set down by the noble Viscount, Lord Hall. It might be convenient, therefore, if I inform your Lordships now that these Amendments are all drafting or consequential Amendments, with the exception of three minor points. Amendments Nos. 1, 2 and 3 extend the time for applying for leave to appeal from seven to fourteen days, and thus meet a point raised by the Law Society. Amendments Nos. 6, 9 and 10 make provision to close a gap by providing for an appeal to the Divisional Court against certain Orders made by magistrates, and the substitution of the words "High Court" for "Queen's Bench Division" is to enable the Rules of the Court to decide to which Division of the High Court the appeal is to go. Apart from these relatively minor points, all the other Amendments are, as I say, drafting or consequential, and unless your Lordships express any view to the contrary, or wish to raise any point on any particular Amendment, which your Lordships can do on the next Question, I shall take them en bloc. In the meantime, I beg to move that the Commons Amendments be now considered.
Moved, That the Commons Amendments he now considered.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
Clause 2, page 2, line 15, leave out ("seven") and insert ("fourteen")
Clause 2, page 2, line 17, leave out ("seven") and insert ("fourteen")
Clause 2, page 2, line 23, leave out ("seven") and insert ("fourteen").
Clause 4, page 3, line 20, after ("applicant") insert ("or any surety").
Clause 7, page 4, line 25, after ("property") insert ("made on conviction on indictment").
Clause 13, page 8, line 22, leave out ("Queen's Bench Division") and insert ("High Court");
Clause 13, page 8, line 42, after ("one") insert ("and section two");
Clause 13, page 8, line 44, leave out ("that section") and insert ("the said section one");
Page 9, line 12, at end insert—
("(c) to an order or decision of a magistrates' court under subsection (3) of section fifty-four of the Magistrates' Courts Act, 1952.")
Page 9, line 14, leave out from ("1869") to ("confer") in line 18 and insert ("or under any provision of the Magistrates' Courts Act, 1952, or the County Courts Act, 1959, except those referred to in paragraphs (b) and (c) of this subsection and except sections seventy-four and one hundred and ninety-five of the last mentioned Act so far as those sections").
Clause 18, page 12, line 2, at end insert—
("(2) For the purposes of section six of the Government of Ireland Act, 1920, this Act shall, so far as it relates to matters within the powers of the Parliament of Northern Ireland, be deemed to be an Act passed before the appointed day within the meaning of that section.")
First Schedule, page 13, leave out lines 5 and 6.
Second Schedule, page 16, line 36, leave out ("for an appeal certificate or");
Page 17, line 12, leave out from ("given") to ("under") in line 13 and insert ("where bail is granted to a person under section four or section five of this Act pending an appeal");
Page 17, line 17, leave out ("such persons") and insert ("any person to whom bail is so granted");
Page 17, line 24, leave out ("defect") and insert ("other mental disorder");
Page 17, line 29, after second ("Court") insert ("or of any court having the powers of the High Court or a judge of that Court");
Page 17, line 47, at end insert—
("(c) to an order or decision of a magistrates' court under subsection (2) of section thirty-four of the Summary Jurisdiction Act, 1879, or under any corresponding enactment for the time being in force in Northern Ireland.");
Page 18, line 2, leave out from ("or") to ("confer") in line 5 and insert ("the County
1100
Courts Act (Northern Ireland), 1959, except those referred to in paragraphs (b) and (c) of this subsection and except sections seventy-one and one hundred and forty of the last-mentioned Act so far as those sections").
Third Schedule, page 19, line 3, at end insert—

("The Summary Jurisdiction Act, 1857. 20 & 21 Vict. c. 43.

In section six, after the words 'seem fit; and' there shall be inserted the words 'except as provided by the Administration of Justice Act, 1960'.")

Third Schedule, page 19, line 24, column 2, at beginning insert ("In section six, in subsection (1), for the words from the beginning to 'subject thereto' there shall be substituted the words 'Except as provided by the Administration of Justice Act, 1960'").
Fourth Schedule, page 21, leave out lines 5 to 7;
Third Schedule, page 19, line 23, column 3, leave out ("Section six") and insert ("In section six, subsection (2)").
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

THE FUEL AND POWER INDUSTRY
3.11 p.m.
VISCOUNT HALL VISCOUNT HALL rose to call attention to the fuel and power industry; and to move for Papers. The noble Viscount said: My Lords, it is some time since your Lordships' House has had an opportunity of considering the fuel and power position in this country, and as there has been quite a bit of criticism from many quarters about the recent increase in the pay of certain sections of the coal miners, I thought that the time was opportune to have this debate. The main facts for and against the recent price increase have been lost in a welter of protests from consumers and in very gloomy prophecies contained in some of the leading articles in certain of the Press of this country about the future of the coal industry.
Coal prices, unlike the prices of many other commodities, have remained unchanged since July, 1957, and this increase means merely that the Government and the Coal Board want to sell the coal at a price sufficient to cover

1101
the cost of operating the industry, plus a very substantial amount to be paid to the Government for compensation for the mines and interest on the heavy capital cost of the rehabilitation of the industry since nationalisation. Now, what was the increase? Not 10s. a ton, as most people understood, but an average, covering all consumers, of 6s. 8d. per ton. The fixed amount of 10s. applies to house coal, smokeless fuel and coal for the railways. To other consumers the increase varies from 8s. 11d. to 5s. ld. per ton. The direct effect of these increases on retail prices will be about one-fifth of a per cent. point; and on the steel and other industrial products about one-third of a per cent. point.
And what was the amount of the pay increase? Five shillings a week was given to 370,000 day wage men; no increase was given to piece-workers. In addition, there was a reduction of one hour in the working week. Both of these were granted by the Tribunal and both will cost about £3¼ million a year. Little attention has been given to the fact that between January and August of this year weekly rates of wages for 7,540,000 work-people have been increased by far more than 5s, a week, and there has been a reduction in the working hours of some 5½ million workpeople.
It was not the increase of wages and the one-hour reduction in the working week that caused the increase in the price of coal; about 2s. per ton would have covered that cost. It was almost covered already by the increase in productivity, which during 1959 had reached a record level average for all mine workers of 5·3 per cent. over productivity in 1958, and which, in spite of extra cost, brought about a reduction of Is. 6d. per ton in the average cost over the year. That gave an operating profit for the year of some £13 million. But then, the Minister of Power came along and held out his hand for the sum of £38 million in payment of interest due, which left a deficit of some £24 million, the largest deficit since 1947.
It is not generally known that Her Majesty's Government have had control over the price policy of the industry, and in the first ten years after nationalisation the price of coal was kept well below market level. Coal then could have been
1102
sold for at least 15s. to £1 per ton more than it fetched, and if it had been sold at that price it would have provided a basis for the Coal Board to accumulate by now a substantial surplus of profits. Instead, the Coal Board have to bear the heavy financial burden of compensation for the take-over of the collieries, the heavy capital outlays required for the rehabilitation of the industry, and, in the last three years, I understand without any Government assistance—in contrast to the position in the coal-producing countries of Western Europe—the high costs of the stocking of coal. Last year alone the cost amounted to no less than £27 million.
My Lords, notwithstanding all this cost, the National Coal Board had an operating surplus on all collieries since vesting date of some £186 million, and in addition the surplus on the opencast working and ancillaries, which means another £67 million. This operating surplus has been turned into a deficit of some £52 million by the payment of £258 million interest to the Government. The recession in the coal industry is still proceeding. This year, up to the end of September, output was reduced by some 10 million tons as compared with last year. By the end of this year, 126 pits will have been closed and manpower will be down to about 580,000 men, the lowest for the last 90 years and 90,000 below 1959. The programme for next year, 1961, includes the closure of some 35 more pits, and a further reduction in employment of some 10,000 men. What will happen after 1961 no one knows.
It is good to know that, for the first time in four years, coal stocks are falling slightly, and I understand that possibly they will be down by a few million tons by the end of the year. I am in complete agreement with Her Majesty's Government and the National Coal Board, as I am sure are other noble Lords, in putting the surplus coal in stock rather than having thousands of miners unemployed, which would have cost millions of pounds in unemployment benefit, or selling coal at bargain prices, which also would have cost millions of pounds in revenue, without necessarily leading to more sales. And, to cut back more drastically would have destroyed the morale of the miners and

1103
their confidence in this important industry. Not that I desire that men should have to work in the pits in danger and dust to toil and sweat any longer than is absolutely necessary; nor, I am sure, do my two noble friends, who have had long experience of colliery work.
Much of the criticism which has centred on the Coal Board has been made without giving the slightest thought to what the fuel situation would have been had it not been for the valuable work which has been done since vesting date. The last five difficult years have presented problems which could be solved, without irreparable harm to the industry, only by the kind of determined leadership given by the Chairman of the National Coal Board, Sir James Bowman, and his colleagues on the Board and in the divisions. It is only which could overlook these obvious facts. All the coal industry really wants is a breathing space to continue its work in providing the nation's coal free from hostility, acrimony and bitterness. For, with all the dangers that have to be faced, the miners will get the coal.
As an example of pit modernisation, I may mention a 90-years-old pit, which ten years ago was very much worn out, has been modernised and is now one of the most efficient pits in its division. Output at the coal face before modernisation was 81 cwt. per man-shift; at the present time it is 121 cwt. And in the same colliery there is a team of fillers whose average is 20 tons per day.
A statement recently issued by the T.U.C. and the Labour Party on the nation's fuel and power points out that one of the worst features of the fuel situation is not that the coal industry is contracting but that contraction has been allowed to take place without any consideration of present or long-term needs. In the last few years while each of the fuel and power industries has been encouraged to proceed with its own plans, the Government have ignored the crucial need for co-ordination between them. Trusting to unregulated competition between coal, electricity, gas and atomic energy, the Government appear to be giving little thought to a positive policy, which is necessary especially in relation to the future of the coal industry.
Coal is cheap and efficient and is the only source of fuel supply which the nation has completely under its own control. To rely on imported fuel, especially oil, which at any time can go up in price, or the imports of which can be curtailed or seriously reduced at any time, can do great injury to our balance of payments. And this is the most serious factor in the falling demand for coal. In the first six months of this year oil was replacing coal at the rate of 38 million tons, an increase of 22 million tons over the figure in 1956. The Electricity Generating Board is coal's largest consumer—it used about 43 million tons last year. And the Board makes very good use of this coal. It was pleasing to read in the Annual Report of the Generating Board for last year that not only have construction costs of generating stations been greatly reduced but operating costs have also moved favourably in line with improved thermal efficiency. This can best be illustrated by saying that in 1959–60 the output of electricity per ton of standard fuel was 25 per cent. greater than in 1948–49, the standard fuel being coal. The Board and the fuel deserve great praise.
Notwithstanding the efficiency of coal, the Electricity Generating Board has increased its oil consumption from 250,000 tons in 1956–57 to 4 ½ million tons last year—a coal equivalent of some 7 ½ million tons—and we are told that by 1965 10 per cent. of the electricity generated will be generated by oil, 10 per cent. by nuclear power and the remainder by coal. It has been stated, however, that the recent price increase of coal may lead the Electricity Generating Board to revise its policy on the use of coal in power stations. One can see no reason for any change owing to the present price of coal, for the increase in price to the Electricity Generating Board is 5s. 1d. per ton. In 1959–60 the Board was fortunate, in that while the general level of pithead prices remained the same during the year, the delivered cost fell by 4s. 1d. per ton. So coal cost after the last increase is only 1s. 4d. per ton more than it was in 1948–49. With coal at that cost, about £3 15s. a ton, two tons of coal can be purchased for the price of one ton of oil. I picked some figures out of the Minister of Power's Digest for 1959. There I find

1105
that the falling price of oil was the cheapest for the last twenty years. It came out at £7 11s. 2d. per ton for oil which was used for the purpose of generating electricity. The average cost per ton of oil in the five years 1951 to 1956 was £10 11s. 6d., and in the two years 1956 to 1958 it was £8 5s. As the thermal equivalent of coal to oil is 1·7, coal is the much cheaper fuel. Its operating costs may be a little lower, but who can guarantee that fuel oil will remain at this low cost?
Last month a five-nation oil conference met in Baghdad to consider the unhealthy competition between the oil-producing countries. At the close of the conference it was reported that it was resolved that participating countries should take all measures to raise prices to the same level as existed before the cuts were made by the oil companies and all were to maintain stable prices. A second Arab petroleum conference was held in Beirut over the weekend, attended by delegates from fifteen countries. That conference denounced the oil companies for reducing the price of crude oil and petroleum products without the approval of the Governments of the Arab producing countries. The low cost of oil is causing a good deal of anxiety to them. America is a large oil producer, but as the imported oil from foreign fields is much cheaper than even America can produce, she has now put a protective restriction on the import of oil.
My Lords, it is strange that in the very few years of coal scarcity the nation has searched almost world-wide, and has spent large sums of money, for fuels to compete with our basic fuel upon which the prosperity of this nation and our great industries was based and maintained. Now we have more coal than is required; we import oil and uranium at very heavy costs. Most of it has to be stored, and we are told that it costs several million pounds per year to pay the interest upon locked-up capital. Now, we are informed by the Press that there is the possibility that the Gas Council will approve the purchasing of some thousands of millions of metres of natural gas or methane a year from the Sahara into Britain, starting in 1962.
This was confirmed by the Chairman of the West Midlands Gas Board at a Press conference held on October 9. He
1106
said that there was a good chance that the Sahara methane project will come off, for it was warmly received by the Gas Council. He said that the question of whether it was economic to import this methane depended upon differences in the price, and there was some hard bargaining going on between the Gas Council and the Continental authorities. The Gas Council should know whether it is economic, for it is said in the Report of the Gas Council that the ship used to import liquefied gas has been in operation now for about two years and has made seven voyages, and the subsequent treatment of this liquefied gas has proved that its importation is technically possible. New studies have been made on the economic aspects of large-scale importation of this oil. Again I repeat that the Gas Council should know the economic aspects of this liquid methane, because the experiment has been going on for two years and a substantial amount of money, almost £400,000, has been spent upon it.
I am sure that the Minister of Power will take note of the report of the Wilson Committee on Coal Derivatives, which should be debated in your Lordships' House soon. This Committee has spent much of its time dealing with the product of gas. The Report, which dealt with the use of natural gas, said:
"Gas made by non-traditional methods must therefore approximate the traditional gas, unless its cost could be so reduced as to make it profitable to adapt or change all the existing domestic appliances at home."
In the United States of America abundant supplies of cheap, natural gas have become available. The latter policy was adopted—the changing of domestic appliances. But it is estimated that the cost of a similar action in Great Britain would average about £10 per consumer. In the summing up the Committee said that it seems unlikely that any of the processes which we have considered would show a sufficient margin of advantage to justify this change. The conclusions of the Committee stated that cost rules out methanation as a means of enriching gas for most purposes.
The Deputy Chairman of the Gas Council was a member of this Committee, and he must have approved the findings of that Committee. As a result,

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I trust that the Minister and the Government will think very seriously before they proceed with the importation of these thousands of millions of metres of liquified gas into this country. The nation's finance bill for the importation of fuels to compete with coal has now become a great burden to our balance of trade, and many persons and organisations are convinced that the time has come when the Government should look more closely at the situation which is being created by the increasing flow of fuel oil imports from overseas refineries, the possibility of imports of natural gas and, indeed, the cost of the importation and the storage of uranium. Last year, fuel oil alone amounted to 30 million tons of coal equivalent—90 per cent. up on that of 1956—and so far this year it has increased by 30 per cent. upon 1959, with little, if any, advantage to its users.
Sir Christopher Hinton, whose excellent work at the Atomic Energy Authority and in his present position is greatly appreciated, in an article about electricity generation, said that developments in the conventional field are far more exciting than those in the nuclear field. The economies have steadily made it more difficult for nuclear generation to break even with power from coal or oil. At the same time, the still substantial programme of nuclear investment to which the Generating Board is still committed, largely to encourage the manufacturers to keep on with the development of the nuclear-fired stations towards the break-even point with coal, reacts back on the advance of coal-fired stations. The nuclear stations which have been built will have such very high capital costs that they will shave to stay on the base load for the whole of their operating lives, and it is estimated that the operating life of a nuclear power station is about ten years.
I read with interest a speech made by a nuclear scientist speaking at Cardiff last February, who said that Britain's nuclear power stations lead the world, but when their useful days are over they will be an eyesore. Britain's folly was building reactors to generate electricity above the ground. He preferred the American and the Russian system of building reactors and stations underground. As a result, coal-fired station
1108
using super-critical steam conditions will have to be regulated to part-time running earlier—this is from Professor Hinton—than would have been the case, making the present economies that their thermal efficiency can offer far more marginal than they deserve to be. This was supported by the Chairman of the Atomic Energy Authority who, at a conference of the International Atomic Energy Authorities in Vienna, said that nuclear power generation was unlikely to be economically competitive before the late 'sixties. He said the impression, when the Agency was established three years ago, that atomic energy was a key ready to hand which with little effort could open the door to an age of plenty, was proved by experience to have been too facile. Since then, there has been a growing understanding of the effort and expense involved in even a small atomic energy programme.
If it only breaks even in generating costs, as stated, is it still the intention of Her Majesty's Government to carry through the present plan, which states that in 1965 nuclear power and oil will each contribute something like 10 per cent. of the Board's total energy requirements with solid fuels supplying the remainder? If a break-even in costs is all it can do, does it mean that the policy of importing in larger quantities the fuel oil, uranium and, possibly methane, will be continued, whilst we have a suitable fuel on our doorstep giving results as good, if not better, than what is imported?
What should be uppermost in the minds of Her Majesty's Government are the disquieting figures given of the nation's balance of trade, which showed a reduction of some £38 million in the first six months of this year; and the trend still is that our exports are not rising fast enough and our imports are rising too fast. The largest import is under the heading of oil petroleum and its products. That includes fuel oil, gas and diesel oil. Its cost last year was £465 million, of which the diesel gas and fuel cost £66 million. We exported £120 million out of that, but that left a balance against our balance of trade of no less than £343 million. As we produce very little oil in this country we must, of course, import oil to live; but to continue to permit the unrestricted inflow of fuel oil and possibly natural

1109
gas at any time, but particularly when there are difficulties in balance of trade such as there are, while we have an abundance of fuel which gives us as good results on our doorstep, is surely nonsensical.
My Lords, there is little prospect of preventing the continued recession of the coal industry unless Her Majesty's Government can be persuaded to limit the importation of fuel and other heavy oils, or, as has been suggested, to place the fuel and other heavy oils on the same basis as almost all other oils which are imported—that is, to restore the tax on them which existed from 1933 to 1947, when it was removed only because of the then scarcity of coal. Even a small tax, 1½d. or 2d., would bring in revenue of from 35s. to £2 per ton, which the oil industry can well afford to pay. For a long time the nation must rely primarily upon home-produced coal, with United Kingdom refined oil and possibly a limited import of some fuel oil. Nuclear energy cannot play a major part in the generating of electricity for at least another decade, if then, but its potential contribution, of course, must not be forgotten. For those reasons the Government should immediately set up a minimum figure of coal production for sonic years ahead. This is the coal industry's major need, for without a specific target the National Coal Board will not be able to plan its investment and production programmes; nor will the crisis of confidence which the miners working in the pits are now experiencing be overcome. I beg to move for Papers.

INCIDENT DURING THE QUEEN'S FLIGHT
3.53 p.m.
LORD CARRINGTON: My Lords, earlier this afternoon the noble Lord, Lord Rea, asked a Question about the incident during the flight of Her Majesty from Denmark yesterday. My right honourable friend the Secretary of State for Air has just made the following announcement in another place:
"Her Majesty The Queen was returning yesterday from Copenhagen in a Comet of Royal Air Force Transport Command. At about 11 o'clock, when the aircraft was flying at a height of 35,000 feet near the Ems estuary, the co-pilot saw two fighters which
1110
approached the Comet head-on and passed very close to it. These fighters appeared to bear the markings of the Federal German Air Force. My right honourable Friend the Secretary of State for Air has set up a Board of inquiry with which officers of the Federal German Air Force will be associated and the incident will be fully investigated."
LORD REA: My Lords, I am grateful to the noble Lord for that answer, giving us such a full explanation. In view of the fact that a Board of Inquiry is to be set up, it would not be suitable to pursue this matter now. I feel sure that I am voicing the feelings of all your Lordships when I say how deeply grateful we are that the threatened accident did not come about.
LORD SHACKLETON: My Lords, I am sure we all share the feeling of relief in the country that what might have been a shocking incident was, in fact, only an alarming one. While I appreciate that it is impossible to give more information at this stage, I would ask that in this inquiry certain things should be borne in mind. I think the public will be expecting a full explanation of what has happened. Some of the statements that are alleged to have been made before the security ban was put on certain people rather suggest that certain things are seriously awry, and it will do no good if these are not dealt with in any report that may be published.
Secondly, I should like to ask whether the Government will consider as the Inquiry proceeds, the possibility of extending it into a rather wider field. There has been a good deal of alarm about these incidents. I think there are probably noble Lords like myself who have had an uncomfortable feeling approaching Rome airport, and only the other day I saw an aircraft flying exceedingly close as we were coming in to land. This threat which has now created such a stir is, of course, one that threatens, in the minds of air passengers, everybody who goes in an air liner. It is almost impossible for an air liner which is under control all the time it is in the air—it is passed from control point to control point—to be seriously off course, but the dangers of fighters losing their way is a very real one, as noble Lords will be aware, and I think quite clearly some

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fairly drastic international action must be taken. I hope that these matters will be borne in mind in the course of the Inquiry.
LORD CARRINGTON: My Lords, to take the noble Lord's second question first, he will be aware that Eurocontrol has been set up, precisely for the purpose which he has stated. But, of course, at the present time the organisation is not yet in being, so it may be some little time before recommendations are made.
With regard to his other points, I will make sure that they are brought to the attention of my right honourable friend the Secretary of State for Air.
LORD SHEPHERD: My Lords, in view of the answer to the second supplementary question put by my noble friend, does the Minister realise that this is a matter of very great urgency? The new organisation has not been set up. Months and months go by, and we still have these reports of very serious near-misses.

THE FUEL AND POWER INDUSTRY
3.58 p.m.
Debate resumed.
LORD FERRIER: My Lords, I feel that I cannot just turn back to this debate without associating myself with the sentiments expressed by the noble Lord, Lord Rea: that all of us, in every part of this House feel profound relief that Her Majesty was spared, and pray that she may live long to reign over us.
Having addressed your Lordships' House only yesterday, I hesitate to do so again, and my only excuse is that the important subject raised by the noble Lord opposite happens to be one in which I have some considerable experience, certainly in so far as electric supply is concerned. That, my Lords, is my only excuse, but I will endeavour to purge my misdemeanour, if such it is, by being remarkably brief. Indeed, I have selected only two points on this subject which I feel bound to mention, and both are matters which I have mentioned before in your Lordships' House. I may say that my financial interest in electric supply is that of a domestic consumer of electricity, and of coal, solid fuel, I also am a consumer.
1112
The first point I wish to bring to the attention of the noble Lord who is to reply is the problem of off-peak tariffs. While congratulating the electricity supply organisation on holding rates very steady, despite the rise in the cost of basic fuel, I would ask: are Electricity Boards sufficiently alive to the far-reaching effects of off-peak tariffs? I know that they are alive to them—in fact, we have seen a steady lowering of off-peak rates, acceptable though small, but not, to my mind, bringing the rates low enough to be as attractive as they might be, and indeed as low as they could be. The electricity authorities may be bringing them as low as they can within the four corners of their franchise as laid down by the Act. But we must face the fact that the Coal Board is posed the problem of great unsold stocks of slack coal which for a number of years, have cost and are costing, as the noble Viscount, Lord Hall, pointed out, a great deal of money in terms of finance, and is of course fractionally deteriorating in storage.
If it were a practical proposition to get these stocks off the Coal Board books at a cut price, could they not be employed in electricity generation to enable off-peak tariffs to be still further reduced? My own belief is that off-peak tariffs could, in the interests of the nation as a whole, be brought down almost to bare fuel cost. Here, I know that we come into the realm of Treasury control, and that there is a problem which is more complex than either the Electricity Boards or the Coal Board can tackle. But I urge the noble Lord and his right honourable friend to keep at this problem of whether or not it is possible for redundant stocks of slack coal to be made available at cut prices for the production of electricity.
Is it that the availability of low off-peak rates enables the United States of America to have an industry which operates three shifts? It seems to me that there is a little bit of both here; and where we say, "No, we cannot operate off-peak tariffs because there is not a third shift", may it be that there is not a third shift because the off-peak tariffs are not attractive enough to bring industry into production under night conditions?

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We all know, and recognise, that Pumped Storage is an effective and spectacular means of using off-peak power and adjusting the load factor of the industry as a whole. But I think I am right in saying that this question of Pumped Storage is not nearly big enough to affect the load factor to any very great extent. Of course it touches on the fringe of the off-peak potential. Britain's load factor as a whole is, I think we must agree, far too low in terms of what is ruling in other parts of the world. In addition to industrial third-shift working, we must remember that there are many potential off-peak loads which would be encouraged by lower rates. They range from space heating, both domestic and industrial, water pumping, the de-watering of mines, the pumping of water for public supply, and even railway traction, of which advantage is already being taken; and I should not be surprised if, in the not far distant future, there were a substantial demand for low-rate electricity for the charging of batteries for the propulsion of electric battery vehicles in our over-crowded and oily streets.
It is with domestic heating that my next point is concerned, and it arises from this off-peak consideration, as it affects thermal storage heaters. As your Lordships are aware, these are not machines but are simply radiators which heat up overnight and retain heat until the power comes on hours later. These are extremely attractive from the point of view of off-peak power, but they are not available for domestic use—or am I wrong? If they are not available, then why are they not available? I was told by a supplier that I could have one if I bought it in bits and put it together myself. I suspect that that means that there is some purchase tax factor which enters into the question. Frankly, I do not understand it. There is something odd here, and I urge the noble Lord and his right honourable friend to take up with the trade, and perhaps even with the Treasury—for, as I say, purchase tax may well be involved—this rather curious matter. In referring to the Treasury, I think I should be voicing your Lordships' feelings in saying that we welcome this afternoon the acquisition of the noble Viscount, Lord
1114
Amory, to the sum total of our understanding of Treasury matters.
My Lords, I have adequately fulfilled my undertaking to be brief, and, in being brief, I should like to assure the noble Viscount opposite that I mean no discourtesy to him or to the theme of the important Motion which he has raised. We thank him for giving us the opportunity of debating it.
4.7 p.m.
LORD MACDONALD OF GWAENYSGOR: My Lords, there may be points of disagreement during this debate, but on one thing we shall all agree—namely, our indebtedness to the noble Viscount, Lord Hall, for introducing this Motion. It is something like a year ago since we last discussed this matter in your Lordships' House, and I think that an annual discussion on this important industry is warranted.
When listening to my noble friend I went back to the many years when he and I, and others on this side of your Lordships' House, were advocating nationalisation. We did that throughout the whole of our adult lives. We did it for a great number of reasons. Three of those reasons came to my mind while my noble friend was speaking. They came to my mind because all three have been discussed to-day in the country.
The first reason why we supported nationalisation was because we thought that the proceeds of the industry in their entirety should be shared equitably throughout the British coalfields. We were against district settlements. We felt that district settlements were unfair, and we fought hard against their continuance. What I liked about those fights was this—and we should not forget what those fights were. In 1920 there was a three weeks' stoppage for this principle. In 1921 there was a thirteen weeks' stoppage for this principle. In 1926 there was a 30 weeks' stoppage with the same principle involved. In those five years there was one year of stoppages—all because we felt that the industry was not giving what it should to its workers and was not doing it because, to some extent, of district agreements.
I happen to be the only man alive to-day who served on the executive in 1919, 1920 and 1921. The most

1115
encouraging feature of those years was this. What we liked about it was that the good districts where men were making comparatively high wages were as keen about this as those in the bad districts. They realised that the miner, wherever he was working, had to work just as hard in poor seams, and sometimes harder than in good ones. They realised they were faced with the same dangers and ran the same risks, and they said: "Very well, we will support your claim."
I raise this issue to-day because there are rumours in the coalfields that Her Majesty's Government may be contemplating getting back to district settlements and may be influencing the National Coal Board in that direction. Although I may have to leave before the noble Lord the Minister replies, I hope he will find it possible to make some reassuring statement that Her Majesty's Government are not thinking at all in this direction or encouraging the National Coal Board to do so. We believe that the coal industry is one big unity, one entity, and should be treated as such, especially where closures are concerned.
The other point which came to my mind was this: we thought nationalisation would bring a better spirit into the industry. The atmosphere was far from good. There was distrust and suspicion in almost every colliery. We thought nationalisation might help in this direction. During the Recess I spent quite a little time among some of my old friends, men still working on the coal face—fine, loyal, straightforward men with good judgment. I learned from them that many of the unofficial strikes are due to a lack of a good feeling in the coalfields. Yesterday we had a discussion regarding good management. I have a very simple definition of a good manager—one who can get the best out of his workers. That, to me, is a good manager. If that is necessary in any industry at all, it is necessary in this industry; and I was a little disturbed to hear that many of our unofficial stoppages are due to lack of good management. Let us not forget that all the unofficial stoppages add up to a big loss of output every year. It is no use saying, "Oh, they are just unofficial
1116
strikes", for that is not enough. Something causes those unofficial strikes and generally it is a grievance that is not dealt with immediately. It is the delay that is dangerous. Here is a case where prevention is better than cure, and I should like the Minister to discuss with the National Coal Board the possibility of creating machinery whereby grievances can be dealt with on the spot.
The noble Lord knows as well as I do that where discussions are delayed the men involved get together and before long someone says, "Let us go out"—and out they go. I know that there is good conciliation machinery in this industry I helped to create some of it—but I am wondering whether that machinery is operated as quickly as it should be at the point where the trouble is. That would avoid unofficial stoppages. I hope the Minister will find time to have a look at that.
Thirdly, we supported nationalisation because we thought it would raise the standard of life of the miner. No one in your Lordships' House will argue for a moment that the standard of life of the miner in pre-war days was satisfactory. It was very low—disgustingly low. We thought, in our innocence maybe, that nationalisation would improve his position and that we should get far better wages for the miner; and he has them. The miner's wage to-day is immeasurably higher in purchasing power than it was before the war. We realise that, but we are constantly being taunted that that has come about only because of the increase in the price of coal.
My noble friend, in what I thought was a very good passage in his speech, made quite clear that the increase in the miner's wages is only partially responsible for the vast increase in the price of coal. I know that on this question of wages the noble Lord will concede at once that the Government have had a say in it, but in case he may not remember all that has happened I will quote from an article I found in the Guardian—I had better say in the Manchester Guardian, because there is a paper called the Colliery Guardian. The article is by one who, I think, can speak with authority: Mr. Aubrey Jones, M.P., who, as we know, was Minister of Fuel and Power from 1955 to 1957 and

1117
Minister of Supply from 1957 to 1959. This whole article is most thought-provoking, but I want to read just a couple of paragraphs. The first is a little lengthy but I have to read it all in order to make sense:
"The pattern of intervention on wages is now well known. Here is Government concerned over the inflationary effect of the competitive race in incomes. To indulge in general pleas for restraint to the whole of industry seems an anodyne procedure; how much more tempting to seek to appear forceful in the sector which is its own—the public sector. And so, on the first appearance of a wage claim, it whispers to the nationalised undertaking to stand firm—even though the undertaking may think that some concession may well be reasonable. The fact that the undertaking is not speaking its own voice but is merely the echo of another's soon becomes known. The indignation of the trade union mounts; there is the threat of a strike; Government, which fears a strike more than the nationalised undertaking, sounds the call for retreat; and amid paeans of praise for everybody's wisdom in choosing the path of peace the claim is settled—more generously than it could have been in the first place."
There we are told by a man who can speak with some authority on this issue that the Government do intervene in these wage negotiations, and not only intervene but almost direct them and decide on what shall be done. That being the case, I think it should be made clear how far the increases in wages affect the price of coal. One agrees that to some extent they do, but it is unfair to suggest that it is a big extent. My noble friend gave figures. He stated quite clearly that it amounts to about 2s. in the pound.
LORD MILLS: My Lords, I believe the noble Lord means "per ton".
LORD MACDONALD OF GWAENYSGOR: Yes—it amounts to about two shillings per ton. I found another authority on this subject. This person calls himself the final authority on all mining questions. His name is Gerald Nabarro, M.P., and he had a word to say on this very issue in the Liverpool Daily Post on Monday last—do not forget that this is the "final authority" speaking now:
"On September 19 last for the umpteenth time since nationalisation thirteen years ago the price bounced up again"—
one would expect such a word from him—
"by an amount three times as great as the increase in miners' pay last summer justified. To be exact, the rise in pay would cost the
1118
National Coal Board £20 million in a full year whereas price increases are about 8 per cent., or an average of 6s. 6d. per ton—10s. per ton or more in the South-West of England—which the Board say will yield an extra revenue of £60 million in a year."
I hope the Minister will be able to dispel this idea that increases in miners' wages are responsible for the high price of coal. We agree that it is a factor, but it should be specified in the country how much of a factor it is in fixing the price of coal. The same article by Mr. Aubrey Jones says this—and do not forget he is speaking from experience inside the Government:
"The pattern of Government intervention on prices is also by now well publicised."
There are a few scathing remarks and then:
"This is not just a teething trouble; this is a gathering crisis. True, the picture drawn relates in the main to the British Transport Commission and the National Coal Board, whose relations with Government have never been brought to so low a pitch as they are now. But Government attitudes formed towards the more difficult of the nationalised undertakings must also affect attitudes towards the more prosperous."
LORD MILLS: My Lords, could the noble Lord kindly let me have the date of these statements?
LORD MACDONALD OF GWAENYSGOR: Yes, indeed; I ought to have done so. It was September 22 of this year, last month. I am sorry that I did not give it earlier. These are statements made riot 'by miners' leaders or branch officials but by an ex-Minister. And may I say, in passing, that this ex-Minister is a prominent name among Ministers of the Crown. He has that attitude, and I ask the Minister to look into these statements. He naturally has my sympathy. If the Government are responsible for wages (and to a great extent they are) and for prices—and they are to a greater extent, I would say—I hope that the Minister will find it possible to make some statement that will remove the suspicion that surrounds these things in the minds of the miners. I need not tell your Lordships' House that the miners have never had much confidence in the Conservative Party. One has only to look at a mining division and to see who represents them to appreciate that. The miners have never had much confidence in the Conservatives and have never looked upon them as friends; and it is far

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more important, since we have a Conservative Government, that nothing is done to undermine any confidence there may be.
On the question of stocking, I agree with my noble friend that it is a difficult choice. Stocking means heavy expenditure. But what does the alternative mean? In the same issue of the Manchester Guardian I notice a letter from John Raven, Director of the British Coal Exporters' Federation, and I cannot do better in putting my opinion than to read from this letter. Its heading is "Increased Price of Coal", and it says:
"Had the Board reacted to falling demand by immediate sackings, as so many other British industries do—notably the motor-car industry—the nation might well have had to pay out in unemployment benefit at least as much as the cost of stocking. Furthermore, because miners live in communities and are not spread out in large towns among people of every other calling, unemployment would have been concentrated and social unrest could well have flared spontaneously at many points in Scotland, South Wales and the North East."
On the question of price, he raises in this letter a point which I had intended to raise: that the price paid by other undertakings and other industries for coal is a factor to be considered. This is what he says—and here he expresses my personal view and, I think. that of those on this side of the House:
"For years we have seen deficit-financed coal carried on deficit-financed railways to an electricity industry which then makes a profit. Both the Coal Board and the British Transport Commission have incurred a great deal of public odium while the Electricity Boards have been congratulated. Yet if the Coal Board and the railways had charged the cost of their product and their services properly to the consumer, the electricity industry might have been in a very different position."
After all, my Lords, we in the coal industry have no desire to create difficulties for anybody in any other industry, but we ask that some regard should be had to the coal industry when dealing with other industries. The lower the cost at which we sell to them the less the profits in the mining industry. We have asked for a plan year in and year out. Surely it is possible to get a plan whereby all consumers of coal, as well as the producers, are treated fairly. That is all we ask.
There is one small item to which I want to refer—it was brought to my
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notice by my noble friend Lord Hall. He omitted to mention it, and he would like me to deal with it. It is a small point, but it is worth considering, and concerns the distribution of coal in the areas. I would mention Gainsborough, and that might be enough said, because the matter has been raised with the Minister of Power himself. It is a case of the Domestic Consumers' Control Council finding out certain malpractices. One merchant sells coal for £6 a ton, and in the same area the same quality coal is sold for £8 a ton. There is something wrong somewhere, and I should like the Minister, if he would be good enough, to have an inquiry made into that point. Could not the local authorities have some watching brief, as it were, regarding merchants in the different areas, in order to see that fair play is done to the distributors—I have no objection to that—and to the consumers?
My final word is that we believe in nationalisation. I gave a hint on the last occasion on which I spoke on the subject that many of my friends thought that nationalisation was not a success because it had been managed by antinationalisers. I think that that is a conclusion which is quite natural. Of course, if a person is against nationalisation he does not appear to me to be the best person to handle nationalisation. There are suspicions in the country—I have said it before and I say it again—that we are not getting as much as we should out of nationalisation because the Government themselves as a body are antinationalisers. I should like that point to be cleared up if possible. These rumours which undermine confidence are not good for the coal industry, and what is not good for the coal industry is not good for Britain. I would appeal to the Minister to find some way of dealing with this question. I have nothing more to add to-day; I leave it at that.
4.27 p.m.
LORD LAWSON: My Lords, the House has been very patient in listening to two miners, speaking one after the other—but to two very good speeches. I shall not inflict myself upon the House for more than a few minutes, although I am well aware that I have heard people make that comment before and that they

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have usually gone on to speak at considerable length. My noble friend Lord Hall drew attention to the fact that there had been an international conference upon this matter. Things are so bad, so far as coal miners and the communities around them are concerned, that the International Labour Office decided to call a conference. I did not know that it had already been held: I thought it was on the way to being held. However, that is only an indication of how acute is this question of the production of coal in the world at large—not merely in Europe but in the world at large. In looking at national problems which are emerging as European economic problems in the light of this situation concerning coal, I myself foresee almost a world-wide conference having to be held ultimately in order to control the economic situation.
I live in the middle of a coal field, I live next door to a mining community, in a street of fewer than twenty houses, and more than half of them are occupied by miners. Because, like my friends, I carry the marks of my high calling about with me, when mines have to be closed the Coal Board and the miners' lodges in the district usually invite me to attend their gatherings. I wish the Members of your Lordships' House could be present at sonic of these gatherings. One remembers what took place some years ago, before the last war, when there were those terrible things called the depressed areas. I lived right in the centre of one, and I know very well how the average person in Great Britain was moved by the condition of men. It was an awful experience to see men in colliery after colliery drop out of labour: men who had been used to exercising their muscles, their genius and their courage, and who then were stopped. To men like that, it was a real pain. I saw good men who said, "Well, we ought to be all right, anyhow". They were men proud of their craft; first-class craftsmen in the mine. But they, too, went. They were not the worst men in the industry. Some of the finest workmen that ever walked in this country were involved in that situation.
I am sure the noble Lord, Lord Mills, will remember that when this situation arose because of the use of oil I made a very impassioned speech in the House. I visualised a repetition of this situation;
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and I can imagine nothing more awful for any human being to endure than for good men—better men than oneself—to have to come to one's door and ask for the old clothes that have been sent from different parts of the country. I was afraid; and I want to congratulate the National Coal Board on the way they handled the question. I think they are entitled to the gratitude of the people of this country for so handling it that they have kept masses of men in work, and have avoided those awful things called the depressed areas. I said that I was wrong in my first estimate of the situation, and I think I told the House so on one occasion.
What is the situation now? When a colliery has to close, the Coal Board face the situation. They have what they call "redundancy payments". The older miners get a certain amount and the younger men are sent to other pits further away. One of the most delightful experiences I have had is be present at one of these farewells held at the closing of a mine, when they give these older men these payments. The heads of the N.C.B. for the district are there; we have tea, together with the men and their wives. I can imagine no finer spirit for elderly citizens than the way the N.C.B. handle that problem. As I say, I think that they are entitled to our thanks, and I hope that there is going to be no interference with them. It is a fine thing to see men who have given their services to the country in the form of labour in mines. My Lords, for many long years the miners of Great Britain were not properly treated: that was the great trouble. Twelve hundred men and boys a year used to be killed: it was as common an occurrence as anything possibly could be. When a private company was short of finance, they sometimes came back to the shaft arid got the coal near at hand. Many mines were ruined in that way, because that kind of thing extends almost endlessly.
I am not going to speak any longer in this debate, but I thought I ought to get up and express the feeling that there is in the coalfields to-day as compared with things as they were. As a matter of fact, those who are interested in that side of life may like to know that they are all in the churches now. At harvest festivals, they used merely to bring in the sheaves, as though the service was an agricultural

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affair. Now, they bring in great lumps of coal. The miners' lodge goes almost as a body to the service, and the chiefs of the National Coal Board are there. I have said this only because I have tried to deal with the more human side of it, which I have seen for some years at first-hand. I hope that the National Coal Board have the full support of the Government, and that nobody will interfere with their conduct of this matter.
There are several points that I wanted to make, but I am not going to impinge any longer upon the House. All I say is that the Government (I want to make this one last point) ought to give consideration to the proper application of the Local Employment Act which was passed last year, so that factories are sent to those mining areas where these men and their women are such good work-people. All night long—sometimes it awakens me—they go past my home and up to the Consett steel works. Some of the men from round about work in the steel works. They give themselves to it. We make sheet steel—along with Middlesbrough, of course—for cars. If the factories are down in the South, it gives the Minister of Transport a problem, because the steel is often sent by road. Why cannot the factories be sent up to these areas, or into Wales, or into areas which produce the steel for the cars and for all kinds of vehicles? I am obliged to your Lordships for listening to me for so long.
4.40 p.m.
LORD HAWKE: My Lords, the older I get, the more I realise that a doctrinaire approach to economics is the wrong one; but one has to be pragmatical and empirical, and that is the traditional Conservative Party policy to all its problems. Of late my Party has become rather addicted to laissez-faire. There is a danger of such an outlook becoming doctrinaire, and one can create just as much a graven image of laissez-faire and freedom of competition as one can of State ownership and the like. The laissez-faire outlook on economics involves rapid, sudden and great changes—scrap and turn to new—and in an age when capital formation is rapid, it is justified. But in an age of consumer spending like the present, of low capital formation and dear money, it has to be
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very carefully examined to see whether it is justified. The economics of laissez-faire mean frequent change, and calculations can show one the savings or the result of change. But the secondary losses are apt to be hidden, and perhaps in an era of plentiful capital they can be ignored. But in an era of scarce capital the secondary losses ought to be taken fully into account.
These general principles, my Lords, seem to me to apply to the economics of fuel and power just as much as to any other part of our economy. I have no doubt that figures could be produced to-day justifying the vast switch from coal to oil over very big areas of our economy, but the secondary capital costs involved would remain hidden. For instance, judging from the cost of new towns the cost of moving a family and providing it with a house and amenities in an entirely new area is something in the order of £3,000 to £4,000. To relocate 100,000 miners in areas where labour is needed in new employment might involve £300 million or £400 million, without taking into account the capital required to provide the jobs. Then the areas which the families left would still have their standing charges but would be without their contribution to the rates to lighten them; and there would be many people left in those areas whose livelihood depended entirely upon the wages of the miners. But perhaps this is the extreme case.
The question, then, is one of degree. I derive comfort from the Report for 1959 of the National Coal Board—in fact, rather more comfort than from any of the preceding Reports—because they definitely seem to be contracting the industry by closing down the most uneconomical pits, and contracting at such a rate that the miners find work at neighbouring pits or elsewhere. This policy has, of course, involved the creation of these extensive stockpiles. I must say I agree that under this policy that is inevitable, and, who knows, we might find that they will come in useful one day. However, one wonders if the process is going quite fast enough, and whether some little inroad into stocks ought not to have been made last year.
As for the future, I remain convinced that the future of coal lies in piped fuel, and the aim must be to turn out

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coal in bulk on the most economical lines, for conversion into electric current as near the pits as possible. The aims of the electricity industry should be to use the cheapest 'possible coal on the largest possible scale, which would fit in with the tendency of modern mass production machine mining. One might say that gas is trying to do this too, but am rather doubtful whether we are justified in putting much in the way of fresh borrowings into gas. Gas is quite a good boy, in that two-thirds of its capital expenditure comes from its own internal resources, and if I were the Minister I should be inclined to tell them: "Leave it at that; don't come and ask me for any more". On the whole, gas uses either scarce coal or else imported oil. If it is going to use imported oil it is no particular help to the coal industry; and we might just as well use oil in its natural state without putting it through the gas works.
Noble Lords opposite, as has been quite clear from their Party programme for some time, would like a quota on oil and a tariff or tax. Personally, I do not like a quota, but I should certainly be willing to see a duty on oil. I think it would fit in with what I believe should be the tendency of revenue collecting these days, which is to reduce the proportion of the revenue raised from direct taxation and to increase that raised from indirect taxation. To what extent this duty would affect the demand, I just do not know. Oil at the moment is still the dearer fuel for domestic heating, but it is much less trouble and it is much cleaner, and at present price-levels it will certainly continue to gain ground rapidly, owing to the mere reason of human laziness, to which we are all addicted—one's being able to turn on the oil with no trouble at all, whereas to heat our houses with solid fuel means cleaning out the ashes, stoking, and so on.
The effect of this transfer of house heating to oil is a very complex one. In so far as oil replaces coke, it would seem that it would result in less sale of coke. The sale of coke is already going down, which presumably means more water gas produced by the gas works from imported oil plus coke. Therefore there will be less coking coal required and less house coal, but perhaps not less electricity. A great many of the heating
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installations are not in replacement of solid fuel but are completely new installations; and quite frankly, the effect of those on the market for various fuels is too complex to speculate about in a short speech.
To turn back to coal, I do not know whether people appreciate it, but it is, I suppose, our second largest industry, second only to agriculture, with the value of pit-head production of about £800 million, representing some 200 million tons. The noble Lord, Lord Macdonald of Gwaenysgor, said—I thought I heard him say this—"What is good for coal is good for Britain". I seem to remember some prominent American who is quoted as saying: "What is good for General Motors is good for the United States", and I think they both have slightly overdrawn the picture there. I notice that production from the pits which are considered to have no future is down since 1952 from 60 to 38 million tons, but production from pits which are considered to have a great future by reason of being new or reconstructed is up only from 39 to 44 million tons over the same period. I think that that is a rather disappointing figure. It seems to show how remarkably slow we are in carrying out these engineering works.
I was interested to read the paragraph in the Board's report about shaft sinking. When I happened to be the most junior spokesman for the Ministry of Fuel and Power in your Lordships' House, I more than once called the attention of the officials of the Ministry to the tremendous speed at which shaft sinking goes on in South Africa. Whether it is cause or effect or not, I now see that a South African team has been active in this country and has set several British records. I hope that they have managed to impart some of their speed and skill to our home shaft sinkers.
As regards future demand, the National Coal Board has trotted round to its various consumers and asked how much coal they are going to consume in 1965. I should have thought that that was a rather naïve question and that the answers are almost worthless. It looks to me as if the Board themselves do not believe very much in them. They say that the demand may be anything from 190 to 205 million tons. I should have

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thought that the latter is a very optimistic figure, because we used only 192 million tons last year and, whatever we do, oil is bound to make further impact on the market. But the Board is prepared to carry out a flexible policy. They say that, if demand reaches the top figure, 35 pits will be closed and, if it reaches only the bottom figure, about 70 pits will be closed. One wonders now if 35 will be few enough.
I certainly do not like district settlements. I am sure that the ills of the coal industry could have been greatly lessened many years ago if there had been a selling monopoly in the industry. One cannot help noticing the heavy burden put on the industry by the Scottish District, with 22 million tons at 14s. 2d. a ton loss, which makes an enormous hole in the accounts of the National Coal Board. One only wishes that some enthusiastic Scottish national body would take the whole thing off the hands of the National Coal Board. What a relief it would be to all of us!
I am glad to see that the Board are realistic about contracting the industry, but all their intentions will be set at nought if their economies in production—and they are making economies in production—and more, are swallowed up in increased wages costs. In an argument that I could not follow, the noble Lord, Lord Macdonald of Gwaenyseor, tried to prove that wages costs do not matter in the case of coal. But in 1959, out of a pit price of 82s. 5d., 48s. 5d. represented wages costs so I should have thought that they were a very important element in deed. If wages costs go up, this can only lower the competitive power of the industry and lead to still earlier closing of the more uneconomic pits.
In 1959, weekly earnings were a few pence less than 1958—£14 4s. 2d. The average per man-shift worked was up by 1s. 4d. to 68s. 5d. The average number of shifts worked went down from 4·38 to 4·24 per week, so that the slight improvement in the miners' terms of service was taken in slightly more leisure and not in more money. I am sorry to see that the number of injuries was up. There was a terrible disaster which naturally considerably affected the figures
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of deaths, but I think that I am right in saying that the figure for injuries was also up. In spite of the passing of the Mines and Quarries Act and all the progress that has been made, it is rather disheartening that these figures do not come down. By improved efficiency the cost of coal has gone down by 1s. 6d. a ton as contrasted with an increase of 2s. 5d. a ton between the years 1957 and 1958.
In these circumstances, I do not think that we can expect the consumer to be very willing to see any sort of quota on oil. At long last—and it has been a long haul—he has now achieved freedom from pure anxiety. I am not sure that noble Lords opposite appreciate the great relief that this is to the householder. He now knows that he can more or less buy the quantity and type of fuel he wants, rather than remain, as he did for many years, in constant anxiety about what he could get. Rightly or wrongly, the public think that the stability of coal price that has existed since 1957 is due to competition from oil.
Of course the price the public pay and the price the National Coal Board get are very different: 82s. 5d. is the average pit price, and I pay about £10 10s. 0d. per ton. British Transport has its "cut" out of that, and so has the local coal merchant. I think that one of the most gloomy outlooks I can see for nationalised industry in general is the fact that any lowering of demand for coal is going to have deleterious consequences on the accounts of British Transport, and if they put up their charges to compensate for smaller volume that will make the price even higher. I am sure that distribution is still terribly old-fashioned in this country. A Royal Commission sat on this subject. I have read their Report, but I am afraid that it was not very convincing: it "whitewashed" everybody. There seems to be remarkably little ingenuity in designing coal delivery vehicles, at any rate on a scale which reaches out into the countryside. Much of it is still done by a man shovelling coal into a sack, humping it into a lorry and humping it off. I feel that there is room for a great deal more research into that side of the business. I am glad to see that the National Coal Board are actively pursuing their policy of increased production of patent fuels, particularly of Phurnacite, which is very good, but I would

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ask the Board whether they think that they are really justified in charging £15 a ton for it.
4.59 p.m.
LORD WILMOT OF SELMESTON: My Lords, I venture to say a few words towards the end of this debate, not because I have, like several noble Lords who have addressed your Lordships, any specialised knowledge of the coal industry, but because, like other noble Lords, I have taken a great interest in the industry for many years. I wish that I could share the confidence of the noble Lord, Lord Hawke, that the consumer has achieved at last full fuel freedom. He appears to have done at the moment, but it is because I am unsure of that freedom in future that I am so disturbed at the drift of the policy with regard to the future of coal.
I think we must agree that coal is still our most important source of fuel and power, and although we hope that atomic energy and other sources of power will make an increasing contribution, the fact remains that coal is not only still the most important source but the only home-grown one. Those of us who have lived through the last 50 or 60 years have seen all the many vicissitudes affecting our fuel position and can feel no assurance as to the future unless everything possible is done to take a long-term view of the whole problem. It is because it seems to me that that is not the way in which the problems are being approached that I say a few critical words this evening.
Between 1958 and 1959 coal output fell by 17½ million tons, and 70,000 miners went out of the industry; and I understand that in the year ahead some 12,000 more will go. I have always hoped to live to see the day when nobody was required to go and work underground, and none of us can regret that, in the long run, coal mining will be a thing of the past. But we must remember that we still depend upon the miners, and to run down this industry too fast without the assurance of alternative sources of fuel and power would be folly indeed. Let us remember that not only are we unable to get these men back once they have gone, but the mere fact that the industry is being shrunk discourages every kind of recruitment:
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young men naturally will not go into the mines any more. If for some reason we have to call for a rapidly increased output of coal, as we have had to do in times gone by, we shall be in a very dangerous position.
I think it is essential that the Government should take in hand a comprehensive review of the whole fuel situation, and in the light of that review determine a national coal target figure. They must take the financial responsibility involved in maintaining that target figure and the stockpiling to which it will lead. Anything short of that, it seems to me, will lead to an unplanned closure of pits, the loss of pit personnel and a destroying of the possibility of reopening, with the consequent throwing away of our greatest mineral reserve upon which, more than any other thing, we still depend. This is the least that can be done in the present situation. The cost will be far less than the cost of all sorts of other expedients to which we shall be driven if, for any reason, the supply of overseas oil fails or the expected achievements of atomic energy generation fail to continue. I should be glad to hear from the Minister, when he replies, what sort of comprehensive measures the Government have in mind to deal with this aspect of the problem.
It seems to me that there is no advantage in using imported oil, except the cost advantage, and it is doubtful whether one can rely upon a continuation of cost advantage. I feel sure that the Government must be aware of that. It is surely in the interests of freedom from recurring balance-of-payments crises that we should do everything possible to conserve the home supplies of fuel and power. Already the cost of imported oil is a major item in the import bill. We see the cost of imports mounting and the revenues from exports falling, and I cannot see, in the short-term years ahead, any great chance of that situation improving: every factor that one can see is against it. Unless this proves to be wrong, as I hope indeed it will, sooner or later we shall be bound to cut down the imports of fuel oil, and then we shall pay bitterly for the follies of premature mine closure. Let us remember that the freedom which the consumer now enjoys, and in which the noble Lord, Lord Hawke rejoiced, is a freedom based upon the reserves of

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British coal. Towards the maintenance of those reserves the consumer has a duty to contribute, and the Government have a duty to see that the consumer does contribute by maintaining the reserves and by fixing a long-term target figure, with planned reduction, having regard to the longest view that can be taken. I should be grateful if the Minister would give us some information as to what steps the Government are taking to comply with what I feel are the minimum requirements of a sane fuel policy.
5.7 p.m.
THE PAYMASTER GENERAL (LORD MILLS): My Lords, since we last debated this problem, in July of last year, the Coal Board have issued their Revised Plan for Coal: that was in October, 1959. I should like, first of all, to join with those who have said what a good job the Coal Board have done—and I am glad that my right honourable friend the Minister of Power is present to hear that said. They have done a very good job indeed in most difficult circumstances, and they have explained that job in this publication. I am sure that the noble Viscount, Lord Hall, will forgive me if in the course of my remarks I correct some of his statements, or, rather, some misapprehensions under which I am sure he is labouring.
He started his remarks by referring to the question of the recent wages award made by the Tribunal which is empowered to act in these matters between the Coal Board and the National Union of Mineworkers. He said that there was no increase to piece-workers; and, of course, that is quite true. But the noble Viscount knows as well as I do that it is not long before the piece-workers are active to secure their betterment, too. Although the figure he gave of 2s. a ton is about right, that is not the whole story. It is three years since the National Coal Board put up prices. In 1959 the Board was working at a deficit of £24 million, and by the end of the year there was an accumulated deficit of £57 million. The increase in price in September was not only to cover increases in wages and reduction in hours, but to meet increasing costs generally at that time, and to take account of the fact that the industry was working at a loss.
VISCOUNT HALL: The operative profit for the last year was £13 million. The sum of £27 million went in storage of coal. It was that £27 million that brought about the deficit of £24 million.
LORD MILLS: Yes, my Lords, but the fact remains that the Board were facing increasing charges. There was an increase in interest and depreciation on charges and on expenditure not yet fully operative. Of course, there was the question of interest. I should like to talk for a moment about that question of interest, because no business can borrow money to get its assets together, to finance the running of its assets, without paying interest. I should like to record what the facts are. The interest paid by the Board during 1959 on the cost of its vested assets was £13 million, about per cent. of the industry's total costs. To finance its capital investment programme, including finance of stock reserves, the industry has borrowed from the Government, up to the end of 1959, £585 million. Interest paid during the year amounted to £24 million on that borrowing. The average rate of interest paid on compensation for vested assets is £3 10s. 8d. per cent., and on money borrowed subsequently £4 15s. 5d. interest rates to-day are considerably more than that.
But I am sure the Coal Board would not wish to decline that liability: it is a normal thing for business. If there was a mistake, it was that there was no equity capital left. Under the nationalisation Act it was all loan money and pays interest. But the £60 million which these price increases were to cover, was the amount by which the Coal Board wished themselves to increase their revenues, and hoped not only to get again into the black, but to start, perhaps in a modest way, to reduce their deficit. I think it was the right thing
The noble Viscount said that the recession is still proceeding. It is in the sense that the Coal Board are still gradually reducing production in their intention to achieve an equilibrium, and to take account of the new and reconstructed pits that are coming in, and the old and exhausted pits that are going out. But it is only in that sense that there is still a recession. Sales of coal, fortunately, are starting to go up; and I think that is one of the satisfactory

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things about this picture. If we can see the sale of coal tending upwards instead of tending downwards, we shall then be assured that the Coal Board will have a much happier time—because they have in the past had a very anxious time, and I believe that they have done very well in that anxious time.
The noble Viscount also mentioned that there seemed to be no co-ordination. I am glad to be able to tell him that that is far from the fact. The Ministry of Power is the co-ordinating authority, and it works in this way. The Minister himself has regular meetings with the chairmen of the various nationalised industries for which he is responsible, and his Ministry officials, of course, have regular consultations with the officials of these bodies, too. Time and time again he brings them together to discuss problems which affect more than one of them. He brings the oil companies into discussion, too, as he did in relation to the question of the Generating Board burning oil in some of its stations.
LORD LATHAM: Is that in company with the representatives of the nationalised industry, or separately?
LORD MILLS: He puts the oil companies in contact with the nationalised industries, and as a result a considerable reduction in oil-burning capacity—I am not talking about the amount of oil being burned; that is another matter—was achieved. It is true that it is impossible to carry on an operation of this kind—a contraction, a streamlining—of an industry without a certain amount of hardship, and a great deal of work and anxiety. But the Coal Board have done everything they can to obviate hardship. They have discussed with the unions the question of where pits should be closed. Of course, in an extractive industry of this kind, as noble Lords will know, there are always pits being closed because of exhaustion. This year the Board are closing 50 pits, of which 44 are approaching exhaustion. In 1959, 11,000 men (and this will be of particular interest to the noble Lord, Lord Lawson, to whose moving speech I listened with great interest) were displaced by the closing of certain pits that year. But of that number only 400 were still unemployed in the middle of this year. This year, so far, of the 10,500 men dis-
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placed all but 570 have been placed in other work.
While Coal Board planning has been successful in this respect, it has been possible only by accumulating stocks at considerable financial cost to the Board. I am glad to say for the first time that some of that coal is being lifted. Of course it depends upon the grades, because in some cases more coal is put down and in others more is taken up; but on balance they are beginning to touch those stocks. The Coal Board have now, I think, reached a state of equilibrium, which they set out to do nearly three years ago, and it has taken so long-one noble Lord said that it had taken too long, but I do not think it has-because of their anxiety to avoid hardship wherever they could.
It was hinted this afternoon that we ought to fix a target for the Coal Board, a long-term target, and that the Government should be prepared to take any steps to see that that amount is consumed. I do not think that is practicable. The Labour Panty and Trades Union Congress pamphlet, which has been referred to, entitled Fuel and Power—An Immediate Policy, states this:
"This target figure should be kept under constant review and adjusted according to changing trends in consumer preference, the growth of energy requirements, fuel and power technology, and long-term changes in the balance-of-payments posit on."
But, my Lords, this is, in effect, just what the Coal Board have been doing, and the Government have been doing all they can to help the Board in their endeavours.
LORD WILMOT OF SELMESTON: May I be allowed to say this. It is no good having a target without a policy on which the target is based; and it is the lack of a Government long-term policy, and their refusal to face the financial consequences of it, that are the gravamen of the complaint.
LORD MILLS: I will endeavour to show that the Government have a policy and that there are many factors which have to be taken into account. Each year when the Coal Board make estimates of what they want to achieve in that year, they discuss plans with my right honourable friend the Minister of Power, in case he has reason to question or to add to the assumptions upon which

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their targets are built. So that there is a very constant review of the situation, and decisions are taken to do certain things to achieve what the Coal Board wish to do.
The document to which I have referred goes on to make certain specific suggestions. It first deals with oil-fired generating stations and says that, since there is no cost advantage in using oil, those which now burn oil should be converted to coal and reasonable compensation paid to the oil companies. I suggest that that is far too general a statement. It is not true to say, for example, that there is no cost advantage in burning oil. The cost situation depends on location and on transport, but, as I have already said, my right honourable friend has been very active in securing the co-operation of the oil companies to the advantage of coal consumption wherever that is possible.
The second point in that circular deals with opencast output. This I can say has been drastically reduced and will continue to have attention. But that, again, is not just a straightforward question. Certain kinds of coal would be in short supply if it were not for opencast working, and therefore in such cases it must be continued. But, in general, although opencast working is one of the most profitable forms of mining the Coal Board are doing all they can to eliminate it in favour of the deep mines.
LORD SHEPHERD: Before the noble Lord moves on, I should like to go back to that statement he made on the policy discussions that his colleague the Minister of Power has with the Coal Board and the oil companies. I gathered from his speech—he may correct me—that this was a rather short-term outlook and a discussion of what was to be done for the current year or the next year. As I understand it, the point that was being made by my noble friend Lord Wilmot of Selmeston was on long-term policy, not looking at this year but looking at 5, 10 or maybe 20 years hence.
LORD MILLS: I am quite aware of what the noble Lord, Lord Wilmot of Selmeston, means; but what I tried to stress was that it was not possible to fix a target and stick to it. And this
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pamphlet by the Labour Party acknowledges that fact. It has got to be constantly reviewed. However, the third suggestion was to tax fuel oil with the object not of raising revenue but of making it less competitive with coal. The noble Lord, Lord Hawke, said, I think, that he did not mind oil being taxed, and perhaps therefore he too would listen to what I have to say about it. I am not questioning the right of the Chancellor of the Exchequer, if he wants to raise revenue, to tax anything, but that is not the purpose of this suggestion; the purpose of this suggestion is to protect consumption of coal.
LORD LATHAM: Which Germany has done.
LORD MILLS: It does not follow that because Germany has done it, it is a right thing to do.
LORD WILMOT OF SELMESTON: It is also to protect the balance of payments.
LORD MILLS: That is what I am coming to. Germany is in a very different position from the position we are in. There was this suggestion to tax fuel oil, and that was accompanied by two further suggestions, for an independent investigation into the production cost of fuel oil and for discussions with the oil companies to get them voluntarily to regulate fuel oil imports. It is commonly believed in some quarters that, in addition to producing fuel oil from crude in our refineries, we import large quantities. This is true, but it is also true that we export considerable quantities. On balance, our exports, including bunkers, are in excess of our imports. I must ask the noble Viscount to accept my word for that at the moment. Does he want to say anything?
VISCOUNT HALL: That is quite con, trary to the figures which have been issued. Last year, the imports of diesel oil, gas oil and fuel oil were £66 million. The exports of the same oil amounted to £38 million. There was that difference between the imports and exports. The figures are to be found in the Board of Trade Journal issued one month last year.
LORD MILLS: I am talking about fuel oil. I should be glad to give the noble Viscount the figures upon which my

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statement is based. In other words, if I am correct—and I believe I am—we produce in this country more fuel oil than we consume. Often an oil company is both an importer and an exporter of fuel oil, as in the case of other petroleum products. This is due to the complex structure of the international oil industry in which we have such a large share. If we take into account the fact that we depend upon the lighter oils for much of our road transport and for much of our agricultural requirements, we see that this in itself means that fuel oil is produced in increasing quantities. I ask noble Lords, where would be the sense in taxing fuel oil unless the taxation is needed as a means of increasing revenue?
VISCOUNT HALL: My Lords, I am sorry to interrupt the noble Lord again, but I would ask, if we provide more fuel oil in this country than we can use, why do we go to the expense of importing any fuel oil at all?
LORD MILLS: Because we get a valuable export from refining the oil that we need.
VISCOUNT HALL: I am talking about fuel oil.
LORD MILLS: The noble Viscount is talking about the importation of fuel oil. This international oil business is a most complex structure; certain fuel oils are imported and certain fuel oils are exported. The moment the fuel oil comes into this country it becomes just the same as if it had been produced in the refineries, and is dealt with in the international trade.
LORD WILMOT OF SELMESTON: This is most important. I wonder whether the noble Lord would say, looked at from a balance of payments angle, would there be more revenue from exports than oexpenditure upon imports?
LORD MILLS: I am coming to that point in a moment. I am now dealing with fuel ail, because I want to get that clear; then I will deal with the general oil situation.
It has been said mare than once, though not this afternoon, that fuel oil has been dumped into this country. The general level of fuel oil prices—as is the case with other petroleum products in the United Kingdom—is mainly determined
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in relation to prices in the United States Gulf market. The United States still consumes nearly as much as all the other countries put together. With regard to prices, on the Continent of Europe fuel oil prices are lower than they are here. That is because of the low cost of Russian oil supplies which we restrict here by import licensing, thus protecting coal. It has also been said, in support of the argument that the price of fuel oil is too low, that it is lower than that of crude oil. That is no new thing, as fuel oil traditionally sells at a lower price than crude oil in the United States and in other parts of the world. Crude oil is more valuable because of the high-priced things it yields in the refineries.
LORD HAWKE: My Lords, is my noble friend leaving the subject of oil?
LORD MILLS: No; I am just going on with it. On this question of the balance of payments, the British oil companies trading overseas make a large contribution to United Kingdom invisible export earnings. Their overseas sales amount to about four times the sales of oil in the United Kingdom. Oil is the largest item in international trade, and British controlled companies handle about one-third of the international oil business. Large quantities of oil are sent across the seas in British ships. The United Kingdom invisible earnings on oil, which include the net earnings of the British controlled oil companies and their shipping earnings, together with the exports of petroleum equipment to the oil industry abroad, are normally—and this is important—more than enough to cover the cost to our balance of payments of the total United Kingdom imports of oil. I think that is important. It puts a different picture on it.
LORD WILMOT OF SELMESTON: That is most important; it is invisible.
LORD MILLS: What I want to suggest is that, in view of that suggestion, it would be quite wrong to try to get the oil companies voluntarily to restrict their imports of oil into this country. I should like to turn for a moment—
LORD HAWKE: My Lords, is my noble friend leaving oil now?
LORD MILLS: I am.
LORD HAWKE: My noble friend has given no real answer against a duty on oil, because any export of oil would be recovered by drawback, just as in the case of sugar—by an internal levy. If not, how does he propose to protect this basic industry from the competition of oil which is definitely going to drive it out of more and more markets? The policy of the Conservative Party has always been to protect our basic industries.
LORD MILLS: I do not think that my noble friend realises the value to this country also of the oil industry, and I personally think it would be quite wrong to tax oil in order to stop its being consumed here. And, so far as the taxing of oil for other purposes is concerned, that is not what I am referring to.
I should like to say one more word about the financing of excess coal stocks. I think it would be a retrograde step for the Government to undertake that responsibility. The existence of stocks has been one of the consequences of running down the industry to the level of demand. I think that if one reflects one would come to the conclusion that the coal industry is not the only one which might put in a claim of that kind, but I do not think the coal industry ever thought of doing so. They have accepted it as one of the consequences of the change of demand. The pamphlet to which I referred suggests that the Government's policy should be urgently directed to increasing the export of coal. Well, there has been a world-wide change in this picture. Three years ago it was just beginning to appear. Most European countries had entered into long-term contracts for American coal because we were unable to supply coal; and I well remember that situation. We were importing coal, which I took the step of stopping; and therefore the Coal Board, while they are anxious to sell abroad every bit of coal they can, even though prices now show losses, are restricted to what they can sell. But there is no lack of desire to export, either on the part of the Coal Board or of Her Majesty's Government.
While I am mentioning that change I should like to say a word about the nuclear power programme. That was planning for a long time ahead. We were looking at the increase in the total
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demand for energy, how year by year it was increasing—electricity doubling itself in ten years; and we came to the conclusion that we could not deny ourselves this new source of energy. Coal by itself had never produced the amount that it was envisaged would be required and which it is still envisaged will be required. Oil was going to help, but something more was needed, and so we settled upon an ambitious nuclear power programme. It is true that with the change in the circumstances of coal we have thought it wise to alter that programme, to delay it, but to keep working at a programme, in order that our manufacturers can get experience and that we can get costs down, as the original plan was to do. It is right, therefore, that the nuclear power programme should continue in its modified form, because one day we shall need it, as well as all the coal we can get.
Now I will just run through some of the specific points which were made in the debate. I was a little surprised when the noble Viscount said there should be no hostility, acrimony or bitterness. I do not think there is anything of the kind among thinking people. I believe we all appreciate the difficult conditions which a miner has to face in his calling, and in my dealings with the National Coal Board and with the Government I have never found anything except understanding and a helpful attitude. I hope that that will be believed, because there is no need for hostility, acrimony or bitterness. I believe it was the noble Lord, Lord Macdonald of Gwaenysgor, who said that the miners did not believe in a Conservative Government. We know that too, but it does not spring from the fact that the Conservative Government do not understand the problems of the coal people.
VISCOUNT HALL: My Lords, may I just deal with the point that the noble Lord, the Minister, has put. When I referred to those feelings I had in mind some of the statements that were made by some of the large industrialists when it was announced that there was to be an increase in the price of coal, and particularly a statement made by the Federation of British Industries.
LORD MILLS: My Lords, I am glad the noble Viscount has mentioned that,

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because, as I have already said, there had been no increase in the cost of coal for three years, and the National Coal Board were anxious that there should not be an increase in cost; but the increase was a justifiable one—and I have no hesitation in saying that from this Table. The noble Viscount also said that the increase in the price might lead the Generating Board to revise their policy. I do not think that that is a fear he need have. The Generating Board are very sympathetic to the use of coal, and the increase in price to them was a moderate one. So I hope that the noble Viscount will forget his anxiety in that respect.
The noble Viscount also drew my attention to the price of oil and the reduction in its price, and quoted a five-year period from 1951 to 1956, and the period 1957 and 1958. It was only when Bankside started that we really began to use fuel oil. Before that, diesel oil was used for generating sets and that kind of thing; and therefore very little comparison is possible. It is true that fuel oil has been getting cheaper. When they made their contracts in 1955 the Electricity Authority had a clause which allowed for adjustment in price with the level of world prices, coal costs and so on, and the result has been that they have been getting steadily lower prices; but that is proper and right. There is no suggestion, as the noble Viscount seemed to think, of cut-throat competition between oil companies bringing about that situation.
VISCOUNT HALL: May I interrupt the noble Lord again—and this is the last time I will do so? All the figures I mentioned here were taken, as I said, from the Minister of Power's Digest, and in the space devoted to the generating of electricity there is a column for the amount of coal used and its cost. The next column gives the amount of oil which was used, still for generating. The cost and the figures which I quoted were taken out of that Digest.
LORD MILLS: My Lords, that I quite understand, and I can understand how the mistake has arisen, because prior to Bankside there was no power station burning oil as such; they were using diesel oil. Now we are faced with large contracts for fuel oil which started in
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1955. That explains some of the extraordinary figures which the noble Viscount quoted.
He also referred to the situation in the producer countries in the Middle East, and to the conferences at Baghdad and Beirut. Of course they will try to get better prices. The noble Viscount also referred to this question of liquid methane. It is true that there have been seven experimental shipments, and technically they have been successful; but there has been no proposal as yet for any large-scale importation. These shipments were quite small—I think about 1 per cent. of the particular Gas Board's output. That is all that was covered by these seven shipments. But as yet no proposal has been put to my right honourable friend the Minister of Power. If such a proposal is put to him your Lordships may rest assured that he will take every consideration into account, including the situation of the coal industry. So I do not think I can really say anything more about it, because there has not as yet been a proposal submitted to the Minister.
I have explained about the balance of payments. I think it was the noble Lord, Lord Macdonald of Gwaenysgor—or perhaps it was the noble Viscount, Lord Hall—who said that there was a feeling that the Government were against nationalisation. I should like just to answer that point. It is well known that this Government do not believe in further nationalisation, the nationalisation of private industry, but this Government have never sought to undo the nationalisation of the coal industry. And if it has existed, as it has, for eight years without their even thinking about it, I think it is a pretty safe bet that the Government have no intention to interfere with the nationalisation of coal.
LORD WILMOT OF SELMESTON: It would be hard to find a buyer.
LORD MILLS: But that is not the reason. The reason is that the miners believe in the nationalisation of their industry; they have had it nationalised, and the Government have been trying to do all they can to make it work properly, and that is all they will seek to do.

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My noble friend Lord Hawke touched on many points. I have tried to explain to him why the process of streamlining the industry is going as fast as it should go. I was interested in his reference to piped coal. I am sure that that is being carefully studied. I know that some people think that the cost of handling coal could thus be reduced.
LORD HAWKE: My Lords, I think that I have put the noble Lord under a misapprehension. By "piped coal" I meant coal from wires and gas pipes: I did not mean any technical pipes between collieries and towns, or anything like that.
LORD MILLS: My Lords, I thank the noble Lord. He also referred to the distribution as being old-fashioned and to the high cost of patent fuels. His remarks will be put before the Coal Board, although the Coal Board is responsible for only a certain amount of distribution—by no means all of it.
Now I should like to deal with the remarks of the noble Lord, Lord Macdonald of Gwaenysgor. He seemed to have some fear that the Government were encouraging the National Coal Board to consider the question of district settlements. I do not think he need have any fear, because I do not think the Government are doing anything of the sort. The noble Lord outlined the three things which they had expected to get from nationalisation. I think they have got a certain amount from nationalisation. Certainly the standards of the miners are much better, as they should be, and they have been dealt with centrally by the Coal Board.
The noble Lord mentioned this question of unofficial strikes, and said that in his view it was due to the lack of good management. He pleaded that there should be machinery which would allow very quick discussion and settlement and thus prevent these unofficial strikes. In my view—it was said in this House yesterday, too—strikes are very often the result of bad management; they are certainly the result of not dealing with the matter promptly. I think he had a good point there, and my right honourable friend the Minister of Power, I have no doubt, will discuss the matter with the Coal Board. Then the noble
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Lord, Lord Wilmot of Selmeston, said that coal is still our most important source of power. I am sure that he expects me to agree with him.
LORD WILMOT OF SELMESTONHe does.
LORD MILLS: In that, I do agree with him. And I am sure that the Government are looking at this problem on this understanding: that coal is our most important source of power. We shall need the coal we are able to mine properly and efficiently, and one good thing about this Revised Plan for Coal is that more and more reconstructed and new pits are coming into use, to the benefit of the men working there, as well as to the benefit of the Coal Board. In my general remarks on balance of payments, and so on, I have tried to deal with the points which the noble Lord made.
The noble Lord, Lord Macdonald of Gwaenysgor, also referred to certain newspaper articles. I cannot be responsible for what men write; but I was sorry to hear one thing, because I do not believe it: that is, that relations with the Coal Board are now worse than they have ever been.
LORD WILMOT OF SELMESTON: I did not say that.
LORD MILLS: No, you did not. It was in this article that the noble Lord, Lord Macdonald of Gwaenysgor, read.
LORD WILMOT OF SELMESTON: I do not think that is true.
LORD MILLS: I do not think it is true, either. I should have said just the opposite.
LORD WILMOT OF SELMESTON: So should I.
LORD MILLS: But I am prevented from writing articles, and, therefore, it will just have to be said here.
My Lords, I think we have had a very useful debate. I believe that we all have the same thing at heart: we all want to do well for the coal industry, and we want to see that it serves the nation well. It is just that we differ, probably, as to methods. I think that the policies which have been followed are those which, in

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the long run, will serve the country and the coal industry best. I am sure that we should get ourselves into a great tangle if we said, "This is to be the consumption of coal in this country, and we will stop anything else happening by any means in our power." I think the consequences of taking up such a line would be very grave.
I want to add one more thing. The noble Lord, Lord Ferrier, was kind enough to mention two points to which I should like to reply. The first was the question of the off-peak tariff. It is a very important problem, and it is one which has constant study by the Board. A lot has been done. Perhaps not enough has been done; but it by no means follows that if we could have cheaper electricity at off-peak periods we should get an extension of the three-shift system, although I think it is fairly clear that if we had an extension of the three-shift system we should get cheaper electricity. However, I can only say to my noble friend that I will bring the matter to the notice of my right honourable friend, and I am sure that he, in his turn, will take it up with the Electricity Board.
The other point was the question of bulk storage devices. I was very interested in what the noble Lord told me about the parts which would be supplied if he would put them together. I can only imagine that that is a device to get round purchase tax. It would be much more satisfactory to do away with purchase tax, but I must leave that to the Chancellor of the Exchequer. Finally, I should like to thank the noble Viscount and all noble Lords who have taken part in this debate. I am sure that it is a very useful thing to discuss from time to time the problems of our fuel industry, because it is so vital to this country.
6.5 p.m.
VISCOUNT HALL: My Lords, I will take just a few seconds to thank all the noble Lords who have joined me in this debate. As the noble Lord, Lord Mills, rightly said, this has been a useful debate. I want to thank him particularly for the very patient and persuasive way in which he has replied to the many points raised. There are still a few points on which I disagree with him. I might go into the fuel oil question with him; and, if the Digest issued by the Government is wrong, then that will have to be altered.
LORD MILLS: May I interrupt the noble Lord? I did not say that the Digest was wrong. I said that it was referring to different things.
VISCOUNT HALL: But I did not say that the noble Lord said that it was wrong. As to the question of the importation of methane, in my view there are too many people going to the Press about things of this kind. I was quoting from one of the officials, who said that he was in touch with the Minister in relation to this question and that he was hopeful that the Minister was going to approve of it. Again, I will discuss that matter with the noble Lord. Once more I thank him for his replies, and I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

BUSINESS OF THE HOUSE
EARE, ST. ALDWYN: My Lords, I beg to inform your Lordships that the House will meet at 11.30 a.m. tomorrow, and it is probable that the Royal Commission will be at 12 noon.
House adjourned at seven minutes past six o'clock,