§ 4.3 p.m.
§ Debate on Second Reading resumed.
§ LORD STONHAM
My Lords, I interrupted my speech, by leave of the House, to allow the House to discuss a matter of great importance, and I hope your Lordships will agree that we should now resume the debate on another matter of great importance to the people of this country and of particular importance to the miners of this country. I was saying that over the last twenty years there have been many expert estimates of our future coal requirements, all of them carefully thought out and well-meaning and all of them obviously wrong. The Ridley Committee forecast the forward requirement of coal to be 240 million tons of coal at the end of the 1950s. They were 40 million tons out. In 1952 that self-acknowledged expert, Sir Gerald Nabarro, wrote a book, in which he said:If present methods continue we shall need by 1960 an aggregate of 284 million tons.The actual coal output in 1960 was 194 million tons. Present methods did not continue. With fuel they seldom do.
In fact, before this Government came to power no attempt was made to establish in the round and correlate the trends in fuel use. In the White Paper, taking into account all that is at present known 1036 and can be reasonably foreseen, my right honourable friend has made forecasts of our total future fuel requirements in 1970 and 1975 and the proportions of the total likely to be supplied by oil, coal, nuclear energy and natural gas. These assessments are not fixed and immutable. They are not targets, but an indication of trends. They will be continuously reviewed as circumstances change—as they undoubtedly will. On this point, paragraph 6 of the White Paper sets out the position fairly, clearly and honestly. The precise level of coal demand in the 1970s will depend on the degree to which productivity of the coal mining industry can be further improved and costs brought down. We shall all be delighted if the industry can improve on the White Paper estimates.
Meanwhile, in order to control the probable run-down in the period up to March, 1971, we are providing in this Bill for the cost of a further deliberate distortion of market trends and the social consequences of inevitable pit closures and redundancies. I mentioned distortion of market trends in favour of the coal industry. This has been going on for some time with a virtual prohibition of coal imports, the oil tax and special preference for coal at power stations which is adding to the costs of the electricity industry. Despite these measures, it was estimated that demand for coal would fall from the current rate of 166 million tons to 149 million tons in 1970. But this year production has been running at about 10 million tons higher than demand, and stocks have been rising steadily. To bring production into balance with a demand of 149 million tons in 1970 would have entailed an unacceptably high rate of manpower rundown. The Government have accepted the advice of the National Coal Board that an annual rate of rundown of 35,000 men a year would be manageable for the industry. On this basis, coal production in 1970 might be as much as 155 million tons. This would be some 6 million tons above the estimated demand and add further to our stocks if no further assistance were given.
To ensure, therefore, the consumption of an additional 6 million tons or so of coal, if that should prove necessary, Clause 6 of the Bill authorises the payment, up to a maximum of £45 million, of the additional costs which may be incurred by the Electricity Boards and the 1037 Gas Boards in using extra coal for the generation of electricity or the production of gas. It may be argued that in so distorting for social reasons the expected demand, we are adding to the competitive difficulties of British industry. That is why this additional burden is to be borne by the taxpayer, who in so doing will be paying part of the debt we all owe to the men who work in one of our greatest industries. This is not only a Bill about money and fuel. It is about people. Only ten years ago we were employing 703,000 miners; last month only 387,000. That is an average contraction of more than 30,000 a year. It has been as high as 51,000 in a single year.
The industry's needs are falling not only because of the closure of worn-out and uneconomic pits but because, with growing efficiency through mechanisation and the concentration of output on the more economic collieries, fewer miners can produce the same output. This is graphically illustrated by the fact that whereas in the last ten years manpower has declined by nearly 45 per cent., output has fallen less than 20 per cent. Indeed, if coal production remained at its present level from now until 1970 we should still need 100,000 fewer miners to produce it than we had in 1966. I ask my noble friends to realise this and to ask their miner colleagues to realise that it is not a matter of politics. It is not a failure; it is an immutable fact of economic life in 1967.
Fortunately, this substantial decline in manpower does not mean anything like a comparable number of redundancies. Every year about 20,000 miners reach retirement age, or are invalided, and a large number change their jobs. By comparison with this figure of 35,000 the total number of actual redundancies over the last four years has varied between a low of 2,463 and a top figure of 3,943. These, nevertheless, are serious figures and we have done our utmost to lessen the human impact of these changes by creating as many new jobs as possible in the areas affected. Over the next few years, as I have already explained, the reduction in manpower is expected to average 35,000 men a year. This is only a little higher than the average for the last ten years and, as in the past, a major part of this run-down will be accounted for by normal net wastage, after allowing for some continuing recruitment. We shall make specially increased efforts to 1038 provide new jobs for those who will need them.
My right honourable friend the President of the Board of Trade is taking new steps to bring work to the areas which will be most affected by pit closures. The miners, who know more about this than anyone, recognise that if productivity rises it means fewer men. If it does not rise it means higher coal prices and less coal sold which also means fewer men. There is no way out of this difficulty, but it is the aim of Government policy and the object of this Bill to give the industry a breathing space to realise its potential for further increasing its efficiency so as to make coal more competitive with other fuels.
The industry will need to press ahead with mechanisation and concentration of output on the more efficient pits. Where pits have to be closed we are introducing a new system of discussing closures in advance with the regional economic planning council chairmen, and some deferments may be agreed in order to deal with acute local employment problems. Sixteen pit closures have been deferred this winter, and Clause 5 of the Bill will enable the Government to reimburse the Board for the losses it incurs. Unfortunately, it will be difficult for some of the older miners who become redundant to obtain new jobs. To meet this situation Clause 3 of the Bill empowers my right honourable friend to make a scheme for mineworkers of 55 and over, who become redundant through pit closures between July 17 last and March 28, 1971. Subject to a minimum service in the industry, they will have their income supplemented to up to about 90 per cent. of their previous take home pay for a period of three years after they cease work in the pits, or until the age of 65 if that comes sooner. Miners who benefit under the scheme will also receive, under Clause 4, their mineworkers' pension at the end of the three year period without waiting until they reach the age of 65.
The Exchequer will bear the whole cost of this scheme and the early payment of pensions, estimated at £35 million. This does not solve the whole problem, but I think it will be agreed that it goes a substantial way towards it. It is fair to point out that during the last 10 years of contraction, when more than 30,000 miners left the industry each year, they 1039 went out with their normal notice and nothing more. When we consider this Bill we must bear that in mind. Of course we shall do our best to help them to find other jobs, because that is preferable to a pension. But if they cannot find other jobs, they will not suffer poverty.
For the closure programme as a whole the Government already provide grants under Section 3 of the Coal Industry Act 1965 towards the cost of various benefits to assist employees of the coal industry affected by pit closures. Clause 2 of this Bill increases the Exchequer contribution. The total Exchequer cost of what I would call the social measures in the Bill, plus the cost of burning additional coal in electricity and gas stations, is estimated to amount to £133 million. Of this, £17 million would otherwise fall to be paid under other State benefit schemes, and about £25 million represents existing commitments under Section 3 of the Coal Industry Act 1965.
I turn now to the other financing provision in the Bill in Clause 1 which raises the existing limit under Section 1 of the Coal Industry Act 1965 on borrowings by the Board from £750 million to £900 million, or by Order to £950 million. This £200 million increase in the Board's borrowing powers arises from two main causes. The first is that in 1965 it was thought that undistributed coal stocks, then about 20 million tons, would be run down to 10 million tons by the end of 1970, and thus release about £50 million of working capital. Unfortunately, the stockpiles have gone the other way; they have increased to about 28 million tons and, despite the measures we are taking to increase coal consumption, we must make provision for a possible further increase in stocks. Thus, over the five-year period, instead of reducing capital tied up in stocks by some £50 million, the amount so tied up may increase by £60 million before demand and production are brought into balance. This represents a swing of £110 million in expected borrowings to finance coal stocks.
The other main cause for increased borrowing is that two years ago it was assumed that the Board would be able to set aside £10 million a year towards 1040 meeting the difference between depreciation of assets at historic and replacement costs. Here again the expected trend has been reversed, and more external finance than expected will be required to maintain colliery investment at the level necessary to secure the increased efficiency, which is the key to the competitive position of a smaller though still large coal industry, on which the country will still be dependent in the 1970s and thereafter.
My Lords, there is a sharp cleavage of opinion between those who advocate policies which would in effect mean piling up coal stocks regardless, and those who argue that we should speed up pit closures to avoid adding to the already over-large stocks. To the advocates of the "keep digging" policy, I would say that it makes even less sense to risk men's lives in digging more coal than we can sell, than to employ them digging holes in the ground and then filling them up again. To those who say stop digging, regardless of what happens to the miners, I say that such a policy is quite unacceptable to Her Majesty's Government.
What we propose to do deserves, and I think will receive, the support of the whole House, and of the great majority of people in the country. The measures we propose are not charity, not even benevolence; they are to assist men who, through not fault of their own, are no longer required in a great industry to which they have devoted their lives. This Bill is not the death knell of the coal industry. Many coal-fired power stations exist or are under construction, and there will be a big demand for coal for many years to come. I am sure that with the help and the good will the industry deserves, coal will enter the 'seventies in good shape to play an important part in the country's future. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Stonham.)
§ 4.19 p.m.
§ LORD NUGENT OF GUILDFORD
My Lords, may I thank the noble Lord, Lord Stonham, for his very lucid and interesting description of the purpose of this Bill? Despite the interruption, as my noble friend said in mid-stream, but as I should prefer to say, in mid-sea, his lucidity was not lost and his theme carried on as convincingly as before. I would say straight away that, although 1041 I have some comments and some criticisms to make, I support the general purpose of the Bill, which is, as the noble Lord has told us, to raise the borrowing powers of the coal industry from £750 million to £950 million, which sum is expected to last until 1971.
Noble Lords will often have had borrowing-powers Bills coming before them for the nationalised industries, and usually they are a routine affair and do not arouse a great deal of interest. This Bill is the exception. Indeed, reading the debates in another place, I saw that not only did it arouse great interest but that at the time it raised perhaps more heat than light. And, as we all know, behind this Bill lies an intensely difficult national problem which goes to the very heart of our nation's economic crisis. This is the problem of reducing the size of industries which are shrinking because of changing needs and circumstances, and providing for the smooth transfer of the manpower to good jobs elsewhere. And, as the noble Lord, Lord Stonham, told us, deep human problems are here involved. In the main, of course, this process has been the fate of all, or almost all, our great 19th century industries with which we led the world. I suppose it would be true to say that these postwar years our greatest fault as a nation has been our slowness in making these adaptations, because the skilled and vigorous manpower which has been locked up in these great 19th century industries has been, and still is, desperately wanted in the new and developing industries.
I welcome the noble Lord's statement that the White Paper, Fuel Policy, still continues to be the policy of Her Majesty's Government. From the debates in another place it was not entirely clear whether that was so or not, and his statement this afternoon that it is substantially still the policy of Her Majesty's Government, with perhaps some marginal adjustments, will be helpful to all of us. The aim of this policy is fully stated in the White Paper, and was stated again by the noble Lord. It is a cheap-fuel policy; and this must be right for the whole of industry, and indeed for all consumers. It is true to say that fuel costs in this country at the present time tend to be above those of our competitors. 1042 This is a most serious handicap to all our export industries.
I have a figure showing the cost of delivered heat at the power station for the United States of America of 2.16d. per therm, compared with a figure in this country of 4.28d. per therm—in other words, nearly double. This is a disparity which we simply cannot afford to carry. It really is essential to reduce the unit cost of fuel, and the implication here is that with the new fuels of nuclear power, which is being so successfully developed in this country, and North Sea gas we have the prospect of cheapening fuel costs, so enabling us to tackle processes that we have not been able to tackle in the past. I have in mind particularly heavy fuel-consuming processes, such as the making of aluminium, with the advantage that would bring of reducing oar imports and probably helping our export position as well.
Therefore I warmly support the Government's policy, although I recognise, as the noble Lord has explained to us, that this inevitably implies the acceptance of the continued run-down of coal production in our pits, and especially in our uneconomic pits. I sympathise with the very strong feelings of mining communities against this policy. This Bill provides a sum of about £130 million to enable Her Majesty's Government to smooth this inevitably miserable process of running down manpower in the pits over the next four years. I agree in principle, and I believe the whole nation does, with making a sum of public money available for this purpose. I think the whole nation feels, with the noble Lord, a sense of appreciation of the great services which the miners have given to the community in this dangerous and unpleasant industry, and would wish to do well by them in this difficult period of transition through which they are now going.
This is a national problem, and the noble Lord, and indeed the Government, are asking the nation to agree to this substantial contribution from our national resources in order to smooth this inevitably difficult path. I believe it is right that this should be done, and that we should make our comments on it. I feel sure that noble Lords who have a distinguished past in the mining industry will not take it amiss if I, as someone 1043 outside the industry, make one or two comments on it. It is in this spirit that I should like to put a few points to the noble Lord, Lord Stonham.
I listened carefully to his explanation about the 1965 Coal Industry Act and the 1965 White Paper, and I must say that I thought he was on rather shaky ground when he claimed that the present Government were the first to produce comprehensive fuel policies and White Papers—implying that past Conservative Governments were deficient in this respect. Of course, past Conservative Governments made their predictions and indicated them from time to time, and as the noble Lord rightly said, they nearly all turned out to be wrong. But, of course, so did the 1965 White Paper; and the fact that one puts these predictions in a White Paper does not make them more right. I accept that the noble Lord and his honourable friends have done all that man can do in making this prediction, but the fact is that the fuel industry is the fastest changing industry in the country to-day, and it is impossible to predict ahead for more than a few years without being wrong. Even so, it is essential to look ahead and to make some plans, and if we recognise that the chances of being right here are about 50–50 we shall probably not be far out.
In fact, Conservative Governments gave substantial protection to the industry by the highly controversial 2d. a gallon fuel oil duty, and indeed by prohibiting imports. In the main, this was felt to be the right course, and I supported it. The economy rested substantially on coal, and it was felt that this was the right thing to do. Perhaps we did not change our policies fast enough, but looking at the 1965 Act, which predicted that the £200 million then provided would last until 1971, I think the noble Lord would agree that we can all be wrong on this. However, I congratulate him on this White Paper. I think it sets the matter out clearly and makes the best prediction that can be made. I think he is wise to say that 1975 is as far ahead as anyone dare look in such a fast-moving situation. But in view of the 1965 prediction that £200 million would be enough to carry the industry for six years, and the fact that this prediction turned out to be so completely wrong and inadequate, I 1044 would ask whether the noble Lord can say anything further which might convince your Lordships that this prediction now, in 1967, that a further £200 million will be sufficient to carry us through until 1971, is accurate.
I turn to my second point, the methods proposed to help the coal industry in slowing down the rate of reduction of coal production. As the noble Lord indicated, the possible run-down of 45.000 men per annum was something which, in the judgment of the National Coal Board, was quite unacceptable, and they advised that 35,000 was the most that would be reasonably manageable. I would accept that, and that we must have the Board's advice as to what is the largest number that can be handled reasonably, either by retirement or by moving men into other suitable jobs. As the noble Lord said, this leaves us with the position that there is going to be extra production for which there is no immediate economic consumption. And that brings me to the point of extra stocks.
The noble Lord told us that the stocks now are about 28 million tons at the collieries, which is a pretty large amount, plus something like the normal 19 million tons of distributed stocks. That makes a total of 47 million tons of stocked coal. The proposition is that this total shall be added to by a further 5 million or 6 million tons over the coming four years. I do not doubt that this has been thought about very carefully, but it seems highly undesirable. I imagine that there is a considerable element of deterioration of coal that is stocked. Perhaps the noble Lord can tell us what is the rate of deterioration; how much of this stocked coal is likely to be lost by deterioration over the years?
This brings me to my third point. Is there no other way of disposing of this surplus? Is it not possible to find further markets in the export world? The noble Lord did not deal with the possibility of exports. But we have had devaluation since the publication of this White Paper. The noble Lord and his right honourable friends in Government have stressed, and I think rightly stressed, that the great advantage of devaluation to this country, among its many disadvantages, is that it gives us an edge in the export market. I understand that the pre-devaluation 1045 price of coal at the pithead averaged about 100s. 7d. per ton. After devaluation presumably this is about 88s. per ton for the export market.
The White Paper informs us that at the present time our exports are only some 3 million tons per annum to Europe, which must of course be our best prospect as a market. But we know that this year the United States is exporting some 21 million tons to Europe, and that the average cost of American coal landed at Western European ports is about 99s. a ton. This seems to give us a quite considerable price advantage if we make full use of the effect of devaluation; it seems to give an advantage of something like 10s. a ton. Is it not possible to expand our export market to Europe? There can be no difficulty in guaranteeing long-term supplies. We have before us the prospect of contraction. Is it not possible to do something more to try to win some of these markets? I know they are difficult markets, but nevertheless they are there. Is it not possible to try to win some of these from the Americans or someone else? Will the noble Lord please say something about this when he replies to the debate? Nothing could be more helpful both to colliers and the national economy than further sales in this way.
The fourth point I wanted to put to the noble Lord he has dealt with in his speech: that is, the arrangements under Clause 6 for meeting the uneconomic cost of the coal taken by the Electricity and Gas Boards in order to help the situation. I think it is right that the taxpayer should pay this extra cost of £45 million, rather than that the consumer should pay it by higher electricity or gas charges.
The last point I would make is this. Looking at our present economic background nationally, is this £200 million provided in the Bill being used in the most productive way possible? It is a large sum of money to ask the taxpayers of this country to pay in addition to all the other things they have to pay. We are all of us now extremely aware of the limitations on our resources. We have been driven into devaluation because we have been spending more than we have been earning; because we have exceeded our resources. It must be in the front of all our minds that our resources are 1046 not unlimited and that what we devote to this purpose we cannot devote to some other purpose. Indeed, a statement has been made by one of the senior Ministers that hard and harsh cuts are coming in all spending. Bearing in mind the need to use our limited resources in the best way possible, is the noble Lord really satisfied that this money could not be used more productively? Such a large part of it seems to be going to be used unproductively. The noble Lord said that the President of the Board of Trade was taking new action to try to stimulate new industries in the areas where collieries being closed down. Could not something more be done in this respect?
§ LORD STONHAM
My Lords, if I may interrupt the noble Lord, as I have understood his speech so far, with a great deal of which I agree, he approves the £133 million. The point he is now on is that of the additional borrowing powers of another £200 million, a large part of which is for payment for stocks and the other part for the difference between the historic and replacement costs. Is that the money he is suggesting could be better spent?
§ LORD NUGENT OF GUILDFORD
Yes, my Lords, it is indeed—part of the £130 million which is being used for the extra stocks. I queried whether it was not possible to use some of this money for promoting extra export drive. This would be better than further stock-piling of stocks that are too big already.
Now I come to my last point, dealing particularly with the provision made for pensions at 55. The men in the mining world, Heaven knows! are among the toughest and most virile men you can find anywhere, and I am sure that they would rather have another job than be given a pension earlier. Is it not possible to use these sums of money more productively than here indicated, for instance on retraining schemes, encouraging fresh industries, in order to get more of this money into productive purposes, which would be far better for the miners displaced and far better for the national economy? I hone I have made my point clear. I would conclude by saying that in general I support the Bill. I sympathise with the difficult task which the noble Lord discharged, if I may say 1047 so, extremely well, and I wish him well in getting this Bill on to the Statute Book.
§ 4.40 p.m.
§ LORD TAYLOR OF MANSFIELD
My Lords, two years ago when the 1965 White Paper on Fuel Policy was published, on the eve of the debate which took place on that policy, the Daily Telegraph had a very interesting article. There is a paragraph I should like to read to your Lordships, because I think it is as apposite to-day as it was two years ago:The coal industry has at various times been short of men, money, coal and customers. But it is never short of difficulties or documentation, which tend to flourish together in sinister alliance.May I make this submission to your Lordships as far as the coal industry is concerned: that for generations it was the cockpit of struggle—a struggle for wages, a struggle for hours, a struggle for better conditions, a struggle for better compensation payments. But it is a different kind of cockpit to-day. It is now the cockpit of argument and of differing ideas as to the place that coal should take in regard to the energy supplies of the nation.
We have listened to two most interesting speeches. The detailed exposition of my noble friend of the Bill was most enlightening. I was also pleased to hear the noble Lord opposite say that he agrees with the financial commitments into which the Government are entering consequent upon the implications in the White Paper. He also made some reference to the question of our export trade. For a long time that has been in grave difficulty. We are not the only country in the world that is having coal troubles. We are not the only country which has large stocks of coal. When demand by other countries for this commodity is low because of their own stock position it is not an easy matter to do a lot so far as exports are concerned.
May I make just one other comment respecting an observation which was made by my noble friend? It is interesting, and indicates the co-operation that has existed between the men in the pits and the National Coal Board towards employing the most up-to-date technical and mechanical means, with a view to increasing productivity and also to decreasing the price of coal. I think the figures that my noble friend gave in this field are most 1048 interesting. He said, quite rightly, that during the last ten years—it does not matter what the period is—manpower had declined by 45 per cent. and output had declined by only 20 per cent. I would summarise that by saying that nobody can accuse the mining community in this period of technical change of acting as Luddites.
The Bill which is before your Lordships' House to-day I support, for two special reasons. First, it deals, though not entirely and not as much as one would like, but in some measure, with the consequences contemplated in the recent White Paper on Fuel Policy—I refer to the 1967 edition and not that of 1965. Secondly, it increases the borrowing powers of the National Coal Board, enabling them to push along with reorganisation of the industry. Over the past years, in fact ever since 1967, for the National Coal Board and for the men in the mines this has been a colossal test. But in terms of productivity it is now beginning to pay off. We can see the results of the huge investment of capital made during the past twenty years, but particularly during the past decade. I have here a report that in the last five years alone—one could go back over the last 19 years, and the same principle applies—there has been an increase in productivity in the coal mining industry; and the mining industry to-day has one of the best productivity records in Britain. That is due to two factors; namely, the amount of capital that has been infused into the industry and the co-operation that has been given by the miners themselves.
My noble friend Lord Blyton will have more to say than I about the recent White Paper on Fuel Policy, but I understand that it is now the subject of further consideration consequent upon devaluation having taken place. As my noble friend indicated in his most interesting speech, devaluation is sure to affect the price of imported primary fuels, such as oil and uranium. If that is so, and I think it is undeniable, that will adversely affect our balance of payments. I could not quite follow my noble friend when he was speaking on the importation of oil. I am informed from a most reliable source that between now and 1975 the importation of oil will increase by 41 per cent. I mention that figure only to indicate that that will 1049 mean an additional 41 per cent. so far as our balance of payments is concerned, outside the effects of any devaluation.
§ LORD STONHAM
My Lords, perhaps my noble friend will allow me to interrupt him, because I should not like there to be any misunderstanding. Of course there will be an increase in the consumption of oil, because our total fuel requirements will increase as the White Paper forecasts. The point that I was making, and must adhere to, is that according to present trends and the information at present available and forecasts which can be made of the consumption in 1975, out of the total fuel consumption in that year oil will account for 41.5 per cent., which is only marginally more than the share of oil in the present total fuel consumption.
§ LORD TAYLOR OF MANSFIELD
Well, my Lords, there may be some dispute about the figures between my noble friend and myself; but if there is an increase in oil importation, the size of that increase will affect the balance of payments. That is the point I am trying to make. The only difference between my noble friend and me appears to be not one of principle but one of degree. From many quarters and for a number of years now, although there has been information respecting the effect that the importation of oil has upon our balance of payments, I and many others have found that there has always been a reluctance to state what the net effect is. If to-day, when he comes to reply, my noble friend could say whether it is £200 million or £400 million, after taking into account the residue of refined oil, the export of petrochemicals and so on and so forth, I and many others would be much obliged to him. I wonder whether he could say what is the net effect of the importation of oil upon our balance of payments: because at this time particularly it is really a serious matter.
We have heard a good deal in the past, and still hear to-day, about the competitiveness of coal, and this was implicit in the speech of my noble friend this afternoon. We also hear quite a lot about the protection which is given to coal by the tax on oil and by the embargo on imported coal. I would say that the protective tax is only a fractional compensation for the tremendous expenditure overseas in protecting oil interests in many parts of 1050 the world. In the sphere of fuel policy outlined in the White Paper and in the assumptions which are made in regard to the use of coal, one of our four primary fuels providing energy requirements up to 1975, there has been a considerable change. Once coal was king. Now it is less than king. It is not going to be in the next few years even a two-fuel economy; it is going to be four.
I should like to make two observations on this matter. In many quarters, and certainly in the miners' union and among miners generally, there are some doubts about the wisdom of the implications in the White Paper. I would not put it any higher than that at this stage, but certainly the implications in the White Paper are a disappointment both to the National Coal Board and to the National Union of Mineworkers. That is quite understandable, since the prospect of the loss of employment by those who will be affected without their having a firm guarantee of alternative employment—and this applies particularly to the older men—is a source of worry and anxiety. I think all of us, on both sides of the House, feel that position acutely. I would also mention the dissipation of invested capital in the industry, authorised by successive Governments in the post-war period, all aimed at coal meeting the energy demands of the nation. The contemplated further contraction of the industry is a serious matter to all those who are engaged in it. Having made those strictures in regard to the policy outlined in the White Paper, I hasten to say that this is recognised in the Bill. Whatever reservations one might have about the policy in the White Paper, I can give my full support to the Bill which is before your Lordships' House to-day.
I turn briefly to the question of fuel requirements as distinct from energy needs. They are two different matters. The position at the moment is that the energy needs of our country are about 300 million tons of coal equivalent. That is expected in the next few years to rise to 340 or 350 million tons. That brings me to the question of estimates, with which my noble friend dealt in such an interesting fashion. Frankly, I have a good deal of suspicion so far as the exports are concerned who provide the estimates. In the mid-'fifties it was estimated 1051 that 250 million tons of coal would be needed to meet the energy demands by 1965. The main point here is that the National Coal Board were asked, no doubt requested, to plan on this estimate and to invest accordingly.
What was the position in 1965? I know my noble friend gave the figures, but it would not be a bad thing to reinforce what he said. The position in 1965 is a totally different picture from what was estimated by the experts in the mid-'fifties. Only 184 million tons, 56 million tons less than the estimate, was the total of deep-mined coal. The estimate now is 155 million in 1970, and 120 million in 1975. But almost before the ink is dry on the recent White Paper, one understands that in the coal industry by the end of 1968, on the experience of the trends of the last two years, coal consumption will be down to the 1970 estimate of 155 million tons, unless steps are taken to prevent further erosion of the coal industry by the use of oil, which is an important fuel but which affects our balance of payments, as I hope I have shown your Lordships. This is a very big subject and affects many people. It is not altogether a question of statistics and of figures given by the experts. It is a great human problem affecting the lives of good, decent, honourable men and women in the mining communities.
I should like now to say a word or two on Clause 6 of the Bill, which makes provision for increased "coal-burn" by the Generating Boards in England, Wales and Scotland and the Area Gas Boards—but it is limited in amount to £45 million, and in time to 1971. Would my noble friend answer three or four questions which I should like to put to him on this matter? The first is, how will this proposal work between the Generating Boards and the Area Gas Boards? Second, what is the additional amount of tonnage involved in this provision—is it 6 million, or 3 million? What is the proportion of the total as between the Generating Boards and the Area Gas Boards? And, lastly, could my noble friend indicate to your Lordships why it is limited only to 1971?
Clauses 2 and 3 deal specifically with the social consequences of contemplated contraction and possible redundancy 1052 arising therefrom. I agree with the noble Lord opposite that the eminently desirable things should be, first, retraining; and, secondly, alternative employment. As one who has been a member of the miners' union for many years, and as one who has been connected with this industry for a long time, may I say that the miners' union and the individual miners themselves feel very strongly indeed on those two points.
Look at the position, my Lords. For ten, twenty, thirty, forty and, in some cases, more years men have given their whole working lives to provide the energy needs of the nation, and at great cost—the cost of life and the cost of limb. It is the case—and I think this is very creditable—that through their public spirit many men have consented over the past decade to transfer from contracting to expanding areas of the coalfield. To many it has been a painful process. It has meant picking up their roots. But it has not only meant that: it has been costly, too. There has been the cost of transfer. A great amount of social capital has been involved, and this fact should not be overlooked.
I mention this, my Lords, only to make the point that, prior to 1965 the whole cost was borne exclusively by the National Coal Board. While the proposal in this Bill is much more generous than the scheme under the 1965 Act, it still remains the case that the National Coal Board will have to bear one-third of the cost up to £45 million for the redeployment and transfer of men, where their consent is obtained, from contracting to expanding areas. May I ask my noble friend this question? If up to 1971 the sum of £45 million is exceeded for the purpose described in Section 3 of the 1965 Act, what will then be the position? I think this is important, and I hope that my noble friend will give some answer to it.
Clause 3 of the Bill certainly merits the attention of your Lordships: in fact, it merits the attention of the whole country. The principle laid down in Clause 3 is quite good, but I fear that the arbitrary line of 55 years of age will, in its application, give rise to a lot of dissatisfaction. I shall endeavour to give reasons why this is so. First, there are those disabled by accident or disease. 1053 In the coalfields of Britain those cases are not isolated; they are many. For many years the incidence of accidents and disease was higher in the mining industry than in any other industry of the country. Over the whole coalfield there must be thousands of these men, and the percentage related to the number employed in the industry must be exceedingly high. I would also point out that many will be severely disabled.
I should be remiss if I did not take this opportunity of paying a tribute to the National Coal Board. They have been very good employers in fitting these unfortunate people into jobs. However, while under this clause the over-55s will have three years of benefit, the under-55s will immediately have not only no job but little prospect, as disabled people, of obtaining other employment. That will be for two reasons: first, they have disabilities; and, secondly, employers to whom they might apply for jobs have become a little more selective to-day than they were formerly. I put the point to my noble friend that those disabled by accident or disease, particularly the pneumoconiotics, of any age, who are made redundant by pit closures should at least benefit by the proposals laid down in the Bill for the over-55s. I was very anxious to make that point, and to state the case for the disabled of any age who may be affected by pit closures, because I think it important and necessary that it should be done.
May I now put a few questions to my noble friend? How are the calculations to be made in arriving at 90 per cent.? First, can it be made clear that disablement benefits, special hardship allowance and benefit from the mineworkers' supplementary scheme will not be taken into account? Perhaps my noble friend will give us some information about that.
I think that Clause 7, to which I now come, is unnecessary. I hope that Clause 7 will be deleted before the final stages of this Bill are reached. I ask: Why increase the numbers of full-time members of the National Coal Board, when on the basis of the White Paper estimates there are going to be fewer collieries, lower manpower and reduced tonnages? I really do not know the reasons for this proposal. I would put forward one reason, which I consider valid, why this clause should be deleted, and that is that 1054 the psychological impact on the people in the industry and outside will be very unfavourable indeed. I cannot see the sense or reason in it. In fact, apart from Clause 7 the Bill deals only with contraction. This clause is the only part of expansion in the Bill and, with the conditions prevailing in the industry, I do not see the sense or reason in it. I trust and hope that my noble friend will advise his right honourable friend the Minister to have another think about this, and delete this clause before the final stages are reached.
I know that I have gone on for a long time, and I hope that I may be forgiven. Finally, I want to say one or two words about the financial burden which the National Coal Board have been, and still are, carrying. It really is terrific. In the 19 years of nationalisation, payments in the form of interest to the Minister of Power have been almost £538 million. Although there has been an operating profit during that period, in collieries alone, of £372½ million and although, including opencast operations and ancillaries coming under the National Coal Board, the total operating profit in the last 19 years has been £492½ million, these operating surpluses have been turned into a deficit of £115 million. And perhaps I may remind your Lordships that £74 million of that £115 million is for the losses incurred on imported coal, which should not have been the responsibility of the National Coal Board. Two years ago the first recognition was given to the heavy financial burdens of the National Coal Board, and steps were taken to bring relief by a writing down of capital; and it is the case that in the last two years the interest payments by the Board have been considerably eased.
My Lords, the miners' union have been, and still are, concerned. They have given much thought to the fuel question, over the past few years particularly; and I want to say this about them: they are responsible people, and, as I have intimated, they have co-operated in the technical reorganisation of the industry. But they are concerned about the accelerated pace of the intrusion of non-indigenous supplies of fuel. They are concerned about the risk to the economy, and certainly of the social consequences, arising 1055 from too rapid a decline in coal's contribution to the energy of the nation, as envisaged in the White Paper.
§ 5.12 p.m.
§ LORD BLYTON
My Lords, I listened to my noble friend Lord Stonham putting the Government case, and I think he did it wonderfully well, although in the course of my speech I shall fundamentally disagree with him on many issues. I also listened to the noble Lord, Lord Nugent of Guildford, speak on fuel and power matters. This must be the first time that he has tackled this problem. I remember the noble Lord speaking in the House of Commons, particularly on agriculture and transport, but never on fuel and power, and I compliment him on entering this controversial field for the first time since I have known him, which is now twenty years.
The argument advanced by the noble Lord, Lord Nugent of Guildford, was that we must have a cheap fuel policy. That reminds me of the 1926 strike. All the arguments then were that we must have cheap fuel for our industry, and that we must get our prices down in order to get into the export field. It brought us down to 6s. 6½d. a day; and while I know that in the old days a cheap fuel policy meant a reduction in wages, a cheap fuel policy to-day means the annihilation of the mining industry. Therefore, I am not at all impressed by this cheap fuel policy.
I listened to the Minister, my noble friend Lord Stonham, and heard him say that you could not project into 1980 and estimate the position of coal or anything else; and much less can you project into 1980 in the case of nuclear power. If this White Paper is based upon an econometric system (which is the economist's jargon for trying to project trends of fuel consumption into the future), and if by this formula you can project and say that the coal industry will produce 120 million tons in 1975, what is wrong with using the same formula to say that the coal industry will produce only 80 million tons in 1980? And why cannot you project this system into the 1990s? I am not going to say it will be right, but if the formula in the White Paper is right and you can project to 1975, then surely on the same basis you can project it to 1980. The noble Lord, 1056 Lord Nugent of Guildford, talked about exports to the Continent. My Lords, American coal would not get to the Continent at all, with the coal they have lying in the ground, if it were not that the Americans have long-term agreements. If those long-term agreements could be ended to-morrow, no British coal would get in, because there is any amount of coal lying on the ground in Germany and France.
If this Bill implied an acceptance of the White Paper, I would oppose it, but to the extent that it seeks to soften the social and economic effect of the industry's inevitable contraction, it has my support. It is not my intention to go over the past forecasts of this industry, except to say that every one that has been produced, both by ourselves and by the Conservatives—by every Government over the last 12 years—has been wrong. But I must say this to the Minister—and I have lived in this industry all my life. There is bitterness and disillusionment among the mining community, and I am confident that no mother or father will consider mining as a career for their sons. In the light of this savage contraction, a boy of 15 going into the pits to-day can be thrown on the scrapheap when he is 23 years of age. Who would want a boy to take up a job in which there was no future security?
Among other things, the Bill sets out the Government's proposals for dealing with the manpower rundown in the mining industry which flow from the White Paper Fuel Policy. The first question is this: Does the rundown have to be as big and as rapid as the White Paper leads us to believe? I would have been very critical of the White Paper if it had not been withdrawn so that it could be revised to take into account the effects of devaluation. Since it is being reconsidered, I shall concentrate what I have to say on the factors that the Government must take into account in the review of the White Paper. The most important facts—and these should dominate all the Government thinking—are, first, that coal is the only fuel that will not cost more as a result of devaluation; and, secondly, to quote the White Paper, coal isthe only fuel that contains no foreign exchange element in its costs".These twin facts are the basis on which the Government should build an entirely 1057 new fuel policy, with a much bigger share for coal.
May I try to show the House the effect of devaluation on other primary fuels, like nuclear power, North Sea gas and oil? The White Paper shows that the estimated difference in cost per unit of electricity sent out from Dungeness "B", the first of the advanced gas-cooled reactor nuclear stations, and Cottam, a coal-fired station in Nottinghamshire is only one-hundredth of a penny per unit. Table F on page 78 of the White Paper gives 0.52d. per unit for Dungeness, and 0.53d. for Cottam. Devaluation means that the imported uranium which is needed to fuel the nuclear stations will cost more. Indeed, the increase in uranium prices alone may wipe out this theoretical price advantage in favour of Dungeness "B". And the Government should bear in mind that Cottam is already built and will soon be operating whereas Dungeness will not produce any electricity for at least another three years. Much can happen in that time to push up the estimated cost of Dungeness "B" which has already escalated by 11 per cent.
However, nuclear station costs are all suspect. As the Comptroller and Auditor-General points out in the Atomic Energy Authority's Annual Report (pages 120–123) the Authority has been unable to recover from electricity undertakings the past costs of research and development work which they have done for the nuclear stations. Many millions of pounds of royalties have been waived; and this means that public money provided for the Atomic Energy Authority by the Exchequer is being used to subsidise nuclear power against coal in the electricity market—with a resulting loss of their jobs by many thousands of miners.
My Lords, I urge the Government to accept the demand by the Coal Industry Consultative Council for an independent inquiry into the technical and financial aspects of nuclear power costs. Until this is done the mining industry will never accept that it is losing this market for fair commercial reasons. Again, the Report of a Select Committee of the House of Commons on Science and Technology has also said that there should be an independent inquiry into all these matters. Why do not the Government 1058 act as these important bodies request? Nuclear costs are suspect, and the whole matter should be cleared up by being thoroughly investigated.
Before leaving the field of nuclear energy, may I say a word or two on the question of whether the proposed station at Seaton Carew, in my home county of Durham, should be nuclear or coal-fired? Up to the moment, no nuclear station has been built in the coalfields. To build a nuclear station at Seaton Carew, on the coalfield of Durham, a seriously contracting area, would be a scandal. In the past when mines have closed we have been able to get our men fixed up at collieries in Durham—which means commuting 12 to 14 miles a day; but this source is now drying up. Then the receiving areas of the prosperous coalfields—as a result of the White Paper—to protect their own people will close this avenue to places like Durham, Scotland and Wales; so that our problem now is more difficult than ever.
In July of this year, the Prime Minister met the Durham miners' officials over the question of whether Seaton Carew should be a coal-fired or a nuclear station. He promised that the costs of each would be considered and that a decision would be given in due course. The Minister is still considering whether it should be, coal or nuclear. Yet we have Sir Ronald Edwards in The Times Business News yesterday stating that if we do not have a nuclear station at Hartlepool there will be no need to have a station there at all and that he will probably bring in power from Yorkshire. Here is clear prejudice against coal, irrespective of the costs of coal as compared with nuclear energy, in a statement made at a time when we are awaiting the results of an investigation by the Prime Minister and the Minister. I say to the noble Lord the Minister on the Front Bench that this is just not good enough.
Adjacent to the Seaton Carew site are some of the most highly developed collieries along the coastal belt of County Durham. It the siting of this station were to be shifted a few miles, coal could be brought in by conveyor to provide energy more cheaply than by nuclear power. But even on the site selected the forecast of the Coal Board, of 3¼d. a therm, compares favourably with the computations about the cost of nuclear power. If this station is coal-fired it will keep 10,000 1059 of our men in employment in the future for many years. Manpower in Durham has gone down in six years by 26,000 men and will go down at the rate of 7,000 a year until 1972 or 1973. It is against this background—and with all the sincerity that I can put into what I am saying—that I state that, because coal is competitive with nuclear power, it would be nothing short of disgraceful if this station were given to nuclear power. And it will most certainly kill the attitude of the Durham miners towards the Labour Party.
My Lords, I move now to the subject of North Sea gas. I understand that before devaluation the Gas Council and the oil companies were on the verge of agreeing on a price for North Sea gas. However, many of the companies engaged in the North Sea are foreign companies and I am informed that when devaluation was announced they said that negotiations would have to start all over again; and they are now demanding a higher sterling price to compensate them for devaluation. Clearly, the price of natural gas is going up. But there is another aspect of North Sea gas that worries me. The Minister has committed himself to saying that gas will be brought into use very quickly and in great quantities. But gas is going up in price and it will have to carry a still bigger increase because of the oil price rises. I do not believe for one minute that we shall see the demand for natural gas growing as rapidly as the Minister expects. My fear is that he will be left with vast quantities of gas on his hands—especially in the summer when the demand is low. Can we not get from the Government an undertaking that they will not seek to solve this problem by using the surplus gas under power station boilers? To do this would be to deal another body blow at the coal industry.
My Lords, what of oil? It was extraordinary that the White Paper, as originally written, should have proposed an increase in fuel oil usage of about one-third between now and 1975—and this is an important fuel—and at the same time forecast a one-third decrease in the use of indigenous coal, which imposes no burden on our balance of payments. That made no sense at all even before devaluation, and must surely be looked at very closely in this review of the White 1060 Paper. Will the Government tell us what the extra cost to the balance of payments would have been with the proposed increase in the use of oil? Will they further tell us by how much devaluation will push up that cost if the original estimates of oil consumption are not revised? The Prime Minister has said that the fantastically high prices we have to pay for oil as a result of the Arab-Israeli war are one of the reasons why we had to devalue. Surely, with the memory of Suez little more than ten years away, the Government will seek to get away from too great a dependence on oil imports, especially as the producing countries are pressing for higher crude oil prices and are likely to continue on those lines as their living standards rise.
My Lords, there is another big factor which the Government must have in mind when revising their fuel policy. Coal is an industry in which most of the capital has been spent. The job is nearing completion and the nation is getting a return in the form of rapidly rising productivity. During November, the overall output per man-shift was over two tons, a figure undreamed of a few years ago. Coal is outstripping the rest of British industry in this respect. The capital expenditure picture is very different in the case of gas and electricity. The White Paper says that the gas industry will require £300 million a year for the next five years to spend on the conversion to North Sea gas. The electricity industry is proposing to spend £170 million more on the remainder of the second programme of nuclear power stations than would be needed if conventional stations of the same capacity were to be built.
Here I indicate to the Government what I would do to revise the fuel policy, help the balance of payments problem and save capital. I would slow down the nuclear power building programme. One justification for our building nuclear stations used to be that this would help our chances of selling abroad. But no other country has yet bought an advanced gas-cooled reactor of this type, and I believe that no other country ever will. Secondly, I would reduce our dependence on oil. That would save foreign exchange and make our supplies more secure. As a start, I would put all the present dual-fired electricity stations on to coal. This would 1061 provide an extra market for 1½ million tons of coal a year and safeguard the jobs of 3,750 miners. Finally, I would slow down the conversion to North Sea gas and rule out the possibility of using gas in power stations.
All these measures, my Lords, would reduce the run-down in mining jobs and save the Government money which is to be provided under the Bill for social costs; and it would greatly reduce unemployment in our mining villages. The Bill is generous in the approach to these problems and I support it, especially if the problems are reduced in the way I have suggested. If they are not, we shall certainly be unable to create new jobs as rapidly as the old jobs will disappear in the mining areas, despite all that the Board of Trade is trying to do. So far, we have had very little success in providing new jobs for adult males in the development areas. Therefore, I leave these suggestions with the Government.
Clause 3 of the Bill provides for special payment to miners who are over 55 years of age. This is the only clause about which I shall speak. For the first three years the benefits are reasonable, and far more helpful than ever before; but after that time the man who is still redundant comes down with a bump to his State benefit and £1 from the miners' pension scheme. Further, some of these people will get no unemployment benefit after three years, as it will have been exhausted. So if a man has a wife who is working and whose wage is above the national assistance scale, he will not get any national assistance and will be dependent on his wife for his keep. Such men will be put into a very undignified position. I support the clause simply because it will reduce hardship. But what of the social philosophy in which a man who could reasonably expect another ten years of work is told, "We are going to pay you to stay at home. You are no further use to us." It is far better to avoid making people redundant—
§ LORD STONHAM
My Lords, may I interrupt my noble friend to say that we are not saying anything of the kind, about people being of no further use to us. It is true we are saying, "We have no further job for you in the pit where you are employed, but we will do our utmost 1062 to find you another and suitable job elsewhere."
§ LORD BLYTON
That is, my Lords, if you can get a man to leave his job after he has been working in the pits for so long. You cannot train a man at that stage. Therefore the prospects in the labour market for a man of 58 are pretty hopeless. And it is not only the older men who will be affected by the rundown; there will be far fewer jobs in the mining areas for youngsters who leave school. In many mining villages youngsters will have two alternatives to face when they leave school: they may either leave home to find work, or start their working life at the labour exchange. Both those alternatives are socially undesirable. It is socially wrong to have immature youngsters leaving home at a tender age, and it is wrong to tell them that the labour exchange is the place for them.
My Lords, I want to see the White Paper radically re-written to remove the problems which the Bill seeks to remedy. If this is done, it will save some of the money that will be provided for the Minister of Power through this Bill. The effect of what is taking place is not only felt in the sphere of economics and finance as far as mining is concerned; it has a big effect on our people. My people in the mining areas have always regarded Labour as their hope for the future. Over all my years the mining communities have been a bastion of support for the Labour movement on which they pin their hopes for the future. What has taken place in this last few weeks has shaken their faith. It has destroyed the faith and hopes that from our movement would come a different future. It is destroying their faith in nationalisation, because as a result of the White Paper policies are being pursued that are narrowing the area of nationalisation in fuel production, while private enterprise is expanding. Miners never thought that nationalisation would be the vehicle by which the experiences vie have had in recent years could ever come, and there are sore hearts in the industry.
My Lords, I have put the situation as I see it, understanding the feelings of the men, and I ask even now for the White Paper to be re-written. The Secretary of the Miners' Union, speaking at Edinburgh on Saturday, said—and I think 1063 that the Government should take note of it—that unless action was taken to stabilise the market for coal, the present Government would be the one which closed the greatest number of pits in the shortest time, which pioneered the principle of permanent unemployment for miners at 55 years of age, and removed the economic base for hundreds of mining communities without first providing an alternative. That reveals the miners' terrible bitterness to the White Paper. In conclusion, I urge the Government to listen to the voice of the National Union of Mineworkers, who speak for the whole of the mining industry. The Miners' Union are very angry, and this does not augur well for the future. I ask for a reappraisal of the policy of the White Paper.
§ 5.40 p.m.
§ LORD MAELOR
My Lords, I never miss an opportunity to take part in a debate which has to do with the miners and coal-mining. I live in a mining community and have no desire to live elsewhere. As a class of workers their good qualities are predominant. They are noted for their native wit, their great courage and their superior intelligence. Every experienced public speaker and preacher will readily agree, I am sure, that he derives greater pleasure from addressing an audience of miners than any other audience or congregation in the country. The nature of the miner's work has much to do with this. Every minute of the day he has to be on the alert. Every sound he hears may be a warning to him of danger. And, subconsciously, the miner listens in that way, even to addresses which are given to him, and does not miss a sound: he is all eyes and ears. I love these people, and I am anxious that everything should be done to alleviate their present despair when they find themselves becoming redundant and unwanted in the various coalfields.
I can never be persuaded to be critical of the present Government. Indeed, I regard Harold Wilson as the most enlightened Prime Minister of the 20th century. I see cynical smiles on faces opposite. Let us have a look at the Prime Ministers they have provided—and I am frightened when I hear the noble Lord the Leader of the Opposition say so often 1064 from that Dispatch Box, "When we come back into power …". God forbid! Let us have a look at what they provided. Stanley Baldwin, recognised as the laziest Prime Minister who ever occupied No. 10 Downing Street; Neville Chamberlain, so naïve that in 1940 the late Lloyd George said that he was "a figure fit for a stained glass window"; Anthony Eden, the hero of Suez; Harold Macmillan, the author and the promoter of premium bonds; Sir Alec Douglas-Home, declared redundant by his own supporters. That is what the Party of noble Lords opposite have provided. And we hear them declaring, time and again, what they will do "when they come back into power."
It will be seen from what I have said that the present Prime Minister will not have much competition in earning the epithet that I have given him. But while I am not prepared to criticise the Government I do feel disposed to be critical of the set-up of the nationalised industries, particularly in relation to coal-mining and transport. I wish that I could prevail upon the Minister of Power and the Minister of Transport to read once again In Place of Fear, by the late Nye Bevan. He clearly indicates in that book the weaknesses of the present set-up of these industries, and also suggests the remedies.
I am particularly interested in the North Wales coalfield, and would base my criticism on my knowledge of the situation there. The North Wales coalfield, which as recently as forty years ago had 27 collieries, now finds itself with only four remaining. Hafod Colliery, with 35 million tons of coal still available, is to be closed in two months' time. I hope that the Coal Board will have another look at this colliery and not make its decision irrevocable. I say that for two reasons. The production in that colliery last week was 40½ cwt. per man per shift. Furthermore, people who are qualified to express an opinion believe that the coal produced there could, within a short period of time, be sold in the shape of gas at 3d. per therm and within the next three months at less than 4d. per therm. These facts alone, I believe, should reprieve that colliery from the sentence of death passed upon it.
I believe that the North Wales coalfield could have done better, and could be better; but you cannot run a colliery 1065 and a coalface from the head office of an Area Board. The management of the National Coal Board is a bureaucracy, where form-filling and "bandwaggonism" and "keeping noses clean" are tops. I am sure of that. Let me give a classical example. Only a month ago the manager of a colliery in North Wales would not allow poppy-sellers to sell poppies on the premises because he had not had permission from the area office in Manchester. Well, I ask you! The once proud, resourceful and decisive colliery manager, with the lives of hundreds of men as his responsibility, has now to refer to the Board for a decision as to whether the local British Legion branch can sell poppies at the colliery pay office. This is an example with a vengeance, it is true, of running a colliery from the head office.
Communications between the colliery and the area office are so formal, as I find it, that it is appropriate to the age of the minuet and curling pin and bears no resemblance to the hurly-burly of the 20th century. This formality breeds an attitude of remoteness, which, in the North Wales coalfield, is intensified by the fact that the high management of the industry is in the hands of people who are alien in their traditions and customs to North Wales. There is no connection between North Wales and Manchester. We live in different worlds; we have a different way of living; we have different traditions and different customs. Yet every colliery in North Wales is directed by this office at Manchester, about 80 miles away.
I have said that Hafod is to be closed, and a cloud hangs over the entire coalfield. I can only hope that the cloud will be blown away by the exertions of the miners and the inspiration of managers. But for this inspiration of managers, the management of the industry in North Wales must realise that battles are won in the hearts of men and not in the watches of the time and motion engineers, that men can be led more easily than they can be driven; that instructions are no substitute for personal warmth; and, finally and most importantly, that coal is won in collieries and not in offices.
My criticism has been of the set-up of the industry, not of the Government, because the attitude of the Government is 1066 reflected in the Bill which we are considering this afternoon. I want to congratulate the Minister in particular on Clause 3 of the Bill. This clause provides, as has already been pointed out by my colleagues, that mineworkers of 55 years of age and over who are made redundant as a result of the closure of pits will have their incomes supplemented to give them something like 90 per cent. of the previous take-home pay for three years, or until the age of 65, if sooner. For the miners, I contend that it was worth having a Labour Government if only to secure that. I wonder what our fathers would have said in the coal mining areas had it been suggested even 3C years ago that the day would arrive in Britain when the miner at 55, if he was declared redundant, would still be able to enjoy nine-tenths of his previous wages. At the age of 55 an ex-miner would find it difficult to secure alternative employment, and would have formerly found himself simply thrown on the scrap-heap and on the dole. He will now be a contented person, with 90 per cent. of his wages guaranteed to him for the next three years.
I can only hope that the Minister will exert his influence to persuade the appropriate department to provide State pensions for the miners at 60. I know that Mr. Richard Marsh has been criticised over this. The Minister of Power has nothing to do with State pensions, but probably he can exert his influence on his colleagues in the right department. Many classes of workers are pensioned at 60, and if any workers are worthy of this consideration there can be none more worthy than the colliers, who have risked life and limb for forty years to provide this country with its means of energy.
In conclusion, I would say that the paradoxical situation, so far as the coal industry is concerned, was well summed-up in an article in the New Statesman recently. It said:In theory the closing of a coal mine ought to be an occasion of rejoicing. Future generations will look back in amazement and repulsion at this grim, unpleasant and dangerous way of earning a living and of providing fuel. That people should plead for its preservation is a sad commentary on 20th century life. But the true reproach, alike to the present Government and to society at its present stage of development, is that the alternative offered to the miner whose product we no longer need is too often simply unemployment.1067 My plea, therefore, is: do not close a single pit, whatever it may cost, until alternative employment has been found for the redundant miners. The collier is too good a fellow to be thrown on the scrap-heap.
§ 5.56 p.m.
§ LORD JACKSON OF BURNLEY
My Lords, the first point I should like to make concerns Clauses 3 and 4 of the Bill. The provisions of these clauses are illustrative of what must be done in circumstances where elderly men and women are made redundant by changes such as are now occurring within the coal industry, and which are likely to occur elsewhere, changes which are consequences of the impact of technological progress on the structure of industry and on the nature of individual employment. But, as several speakers have said, the provisions of these two clauses cover only a part of what needs to be done. As several have said, these changes affect not only elderly people, but younger people, both men and women, who must be retrained for alternative employment. I understand well enough that this is not a matter to be included in this Bill, but I want to endorse what others have said, that this is a matter of the greatest possible importance.
The need is referred to in the White Paper Fuel Policy, and I feel obliged to say that what is said in it does not leave me very satisfied. It says:In order to ensure that there is a sufficient supply of skilled labour available for incoming industry in the development areas the number and capacity of Government training centres has been greatly expanded.I should like to know what the actual number and capacity of the existing and planned training centres amount to, because my impression is that they do not justify the words "greatly expanded" in relation to the magnitude and nature of the problems that are emerging. In particular, I should like something to be said about the words "skilled labour". and what these words are intended to connote in relation to the coal industry, in the light of another sentence in the White Paper, which if I may I will quote. It says:The National Coal Board's objective is to develop means of production which are not only highly mechanised, but operate largely by remote control, so that much of the labour 1068 will eventually consist of highly skilled technicians.This sentence touches on the rapidly growing importance of the technician, who must be distinguished from the craftsman and the operative as needing to possess a much wider and deeper understanding of the technicalities of the job for which he is responsible. I hope that we may be told in due course whether the Coal Board has yet quantified its forward looking need for technicians of different kinds appropriate to the operation of the automated collieries which it is said in the White Paper are to be the normal method of coal production in the 'seventies. I should like to know what steps they are taking to ensure the availability of these technicians.
I ask this because I have had occasion recently to study the development of technician courses, and I took particular care to study the position in relation to the mining industry. I found the position surprising and disturbing. If I may quote, the entries for Higher National Diplomas and Higher National Certificates taken together, in mining and mine surveying, fell from 587 in 1960 to 208 in 1966, and the corresponding awards fell from 398 to 148. At the ordinary levels of the National Diploma and National Certificate the entries fell from 1,548 to 888, and the passes from 901 to 482. For the City and Guilds Advanced Technicians Certificate for Colliery Mechanics and Electricians, and for coal mining, the number of candidates over 1962 to 1966 rose only marginally from 979 to 1,022.
By my understanding these figures, even in the 1960 context, are really very small, and I find it remarkable that they have been decreasing at this rate. It may be that the information for which I have been searching lies in a different sector of further education. It may be that the prospective technicians are not following courses related to mining, and I should be obliged if we could be informed whether this is so. If it is not so, I find it extremely difficult to understand how the proposed transformation of the collieries within the next decade is to be achieved.
My second point has perhaps already been covered. It is to express satisfaction with the insertion of Clause 6 in the Bill. As your Lordships will know, the obligation which has been placed on 1069 the electricity supply industry to give priority to the use of coal; to carry in its costs of generation the increasing costs of coal, and pass those on to consumers through the Area Boards, was a major responsible factor for the considerable increase in the price of electricity which was recently announced. This obligation to coal has meant that the Central Electricity Generating Board and the consumers of electricity have been providing a considerable subsidy for the coal industry.
I do not question the desirability of this in the basic sense, and therefore I accept without question the need for a continuing obligation by the Central Electricity Generating Board, the Area Boards and, therefore, electricity consumers to help the coal industry through its present difficulties, and I think this applies equally to the Gas Board. But I welcome very greatly the proposal within the Bill that since the changes within the coal industry are arising in large measure for wider economic and social reasons, it is right that this burden should not wholly be carried by electricity supply and gas supply, but by the general public. Therefore I strongly endorse the inclusion of Clause 6 in the Bill. Finally, may I say that I was interested in the questions asked by the noble Lord, Lord Taylor of Mansfield, because I wished to ask a number of similar questions. Perhaps I need not now ask them, as I hope they will be answered when the noble Lord, Lord Stonham, replies to the debate.
§ 6.5 p.m.
THE LORD BISHOP OF DURHAM
My Lords, I greatly regret that unavoidable duties elsewhere prevented me from being present for the earlier stages of the debate, and to make amends I can only wait for Hansard. I should like to say at the outset how much we in the North-East, like many living in other coal mining areas, appreciate the Government's intentions and concern that lie behind the provisions of this Bill; the supplementary income and then the pension for redundant miners over 55; the financial assistance over the social cost of pit closures; even the provision for Electricity and Gas Boards to use more coal. Further, I am not unmindful of what has been done already for the coal industry, whether by way of import restrictions, tax on oil or otherwise.
1070 It is therefore with no lack of appreciation that I now urge that these monetary provisions in the Bill are not in themselves enough. Money is certainly necessary, but it is not by itself enough. What is also wanted is work, as the noble Lord, Lord Taylor of Mansfield, and the noble Lord, Lord Maelor, have said, and there is no time to lose. To the younger man who is redundant—and in Durham the net redundancy over the next three years is likely to be about 7,000 coal miners per annum—we have a duty, as a society which has benefited from these men's work and service in the past, to see that they are offered work which will give them a genuine possibility of personal fulfilment and which makes possible the wellbeing of themselves and their families.
May I say that it is not enough for us to wait until pit closures occur before plans are drawn up and decisions made; otherwise there is a disastrous gap of unemployment. Yet such is the lack of evidence of a major work policy for the North-East being vigorously planned and implemented that the miners are beginning to think—and they have said to me—that alternative work will not be provided for them too soon, because the Government fear that if it were it would empty the pits of men. That view may be utterly mistaken and utterly unfounded. It is certainly ironic. But I mention it here as evidence of the way in which confidence and trust is sagging (and has sagged) in the North-East. As the noble Lord, Lord Blyton, would agree, uncertainty about the possible nuclear station at Seaton Carew does not help, but that is another point. Leaving that aside, we need something to restore this trust and confidence, some clear unmistakable evidence of a good faith, and I suggest it might be done in terms of something that looks beyond monetary provision for redundancy, however necessary that may be, to the certain provision of new jobs.
New diversified industries are wanted and not, if I may say so, industries that depend largely on female labour, as some of the new industries in the North-East do. Further, they should be integrated industries and not branch factories out on a limb which, in a small colliery village, everyone thinks will be the first to close when the clouds approach. Where better than the North-East, which pioneered so 1071 much of our earlier technological society, born from coal mining and engineering—where better would be suited to industries and work based on modem technology? And it might well benefit, as the noble Lord, Lord Jackson of Burnley, has just argued, from forward-looking concerns in the mining industry itself. This is the kind of forward-looking vision suited to its possibilities that the North-East needs. If I may put it like this, all our Peterlees look for this kind of transformation.
Here I may insert a word about Silksworth, where reaction has been so much misunderstood. I spoke recently to officials of the miners' lodge there, who had joined with the Labour Party in a memorial service to the late Lord Attlee. I found them, these members of the miners' lodge, eminently realistic and reasonable. My Lords, they are not obstinate Luddites refusing to face facts; they are not refusing to acknowledge the necessity of the major economic and industrial turmoils through which we are passing. They were not at all concerned to have the coal industry artificially protected for ever. They were not in the least averse to going to different work. They had no nostalgia for mining. But they were concerned, as I am now, that new industries of the right kind should be steered to the North-East, so that they could have the satisfaction of genuine work and be able to meet the responsibilities of their homes and their families in the communities which mining had created.
Here, like the noble Lord, Lord Blyton, and others, may I put in a special word for the older man, for whom admittedly pension and other provision is made in the Bill? As the noble Lord, Lord Maelor, said, it is well that we realise the almost revolutionary character of this kind of provision. But here especially—and I repeat, I am not unappreciative of the help which the Bill gives—money is not enough. At the age of 58, men's lives will so often seem, when that pension comes, to be at an end. This is no luxury of an early retirement. As a boy I saw enough of men like these, and walked with some of them, from the mining and engineering industries, whose spirits were utterly broken, whose lives were shattered, and 1072 who trudged "down and out", from one works gate to another, yearning to be offered even a brush with which to sweep up; and they were never given it.
I know there is a great difference on a broad and lone-term view between unemployment that arises from economic depression and unemployment that arises from rapidly changing patterns of industrial life. But the man at 58, out of a job, even with financial provision such as this Bill gives, needs more than that general consolation, and also some- thing more than money can buy, in order that he and his family may have a life, rather than a bare existence. If we have broken his spirit, money will be only a charity which is a travesty of the name and an insult to the man's personality. Of course, and I hope obviously, the Churches will do all they can, along with all men of good will, to help restore a sense of purpose and hope for men like these. But my point is that the responsibility of the State cannot finish with this Bill, and perhaps I discerned in Lord Stonham's remarks to the noble Lord, Lord Blyton, that this point had, at least in part, been taken.
While, then, I welcome this Bill and its provisions, I repeat, money is not enough, especially in the North-East which has for so long been an underprivileged area, often a forgotten area, or, what is even more likely at 250 miles distance, an unknown area. We need plans for work conceived with vision and executed with energy. The men of the North-East and elsewhere must surely have the work they need and deserve, and for which they have a legitimate desire. I welcome the Bill before your Lordships' House, but more than this Bill is surely wanted to meet the problems of the men in the mining industry to-day.
§ 6.14 p.m.
§ LORD ARWYN
My Lords, may I offer my congratulations to the right reverend Prelate upon saying so many things which touch our hearts.
Noble Lords on this side of the House have dealt very thoroughly with several points I wanted to develop, especially the doubt cast by my noble friend Lord Blyton on this premature obsession with nuclear energy. The noble Lord, Lord Jackson of Burnley, touched upon the 1073 main subject of my speech which I feel now free to develop, which is the problem of the redundant mining technologists. The National Coal Board, especially during the last ten years, have gathered together a first-class team of scientists and technologists for research and development, and the results of their studies are now becoming evident. I am very concerned about keeping this team intact for use in a much wider sphere, as well as to finish the job they are doing. I will develop this point later.
Every industry depends for its success on the quality of its technical management. Each year the N.C.B. offer 100 university scholarships, 50 for students already in the industry and 50 from outside. This year they have had a very poor response indeed, which confirms the opinion given by the noble Lord, Lord Jackson of Burnley. Let us take the case of the young man of 18, with the necessary "A" levels, who to-day wishes to become a coalmining engineer. It may take him three years to graduate. He has to spend two years in a colliery doing practical work. During that time, he can study for his Home Office certificate. He cannot hold one until he has done two years' practical work underground. A brilliant "First" at the university does not entitle him to manage a colliery: he has first to pass the Home Office examination. At the same time, if he studies hard enough he can sit his Institute of Mining Engineers' examination, which he also has to pass before he becomes a chartered mining engineer. Even provided that he is possessed of all the aptitudes, and is keen and industrious, he has to work intensely for five years, by which time he is 23. Then, again, he has to wait another two years before he is at the minimum age of 25 when, by law, he is old enough to assume responsibility as a manager. In actual practice, this is the age when he joins the end of the queue—seven years after he starts his first university term. It is a long, hard training. Only those of us who have been through it know what it means. And to-day the prospects of promotion are not encouraging.
My Lords, there are some 420 collieries still working. I do not know how many redundant mining engineers there are already, but if the last Government figures are right we can expect to mine all 1074 the coal we shall need by 1975 from about half the collieries now at work. This means redundancy or retirement for some 400 mining engineers, and at least an equivalent number of mining technologists. This is not a rosy prospect for a young man of 18 wishing to become a mining engineer. He may, of course, find work abroad; but this means that someone else will benefit from the training paid for by the N.C.B. So we have a problem of redundant mining technologists, as well as of skilled technicians; and, believe me, my Lords, today's miners are very highly skilled technicians. Anyone who has been in a mechanised coalpit will have realised that after a few minutes.
All this may seem outside the scope of a Government Bill to raise the limit of borrowing by the N.C.B. I agree wholeheartedly with the Bill, but I am much concerned about the future of the National Coal Board itself. Back in 1946, over twenty years ago, I was a member of a Mineral Development Committee set up by my right honourable friend the Member for Easington under the chairmanship of the noble Lord, Lord Westwood. We worked for some two and a half years. One of the other members was the noble Lord, Lord Thorneycroft. I wish he were here tonight. The evidence proved that no real attempt had ever been made to assess the total mineral wealth of this country or the sea beds. We made recommendations, but any plans which might have come to fruition were scrapped because there was a change of Government in 1951.
A move has been made recently in the creation of the Institute of Geological Services, which I understand is to be sited at Nottingham and will work in close co-operation with the appropriate departments at that university. But that is not enough. It might take years to get into full swing, and we need the most comprehensive assessment of our natural resources now to save every penny on imports.
I suggest that the National Coal Board should be renamed the National Mineral Resources Board. Its scientists and technologists already welded into an effective team, can be used and expanded. We might even bring hope into the hearts of those mining engineers now awaiting 1075 the axe, and to the young mining students who are already too far committed to change their courses. The scope of the National Mineral Resources Board which I have suggested will extend to all the extractive industries—that is, to all mineral ores and the quarrying of all stone; to everything under plough depth. The training of the future mining engineers should include coal, ore bodies and quarrying. The Institute of Mining Engineers and the Institute of Mining and Metallurgy should be amalgamated into one, and their examinations should embrace a much wider curriculum. Out of 14 subjects there are only two which the metallurgist mining engineer takes and which make him slightly different from the coalmining engineer. There is but a short gap between them, and there is not such a big step towards becoming a civil engineer.
The need for evaluating our mineral resources has never been more urgent. We have the tools, the technologists and the technicians. All we need is to realise the opportunities which have to be uncovered and to organise the teams we already have. I hope we shall not make the same mistake as the Australians, when they allowed that wonderful consortium of Snowy Mountain engineers to disperse, with the monumental mineral resources discoveries just around the corner. The N.C.B. has built up resources of management accustomed to making decisions and spending money economically. It has trained geologists, geophysicists, diamond drillers, operational research men and computer staff. All these can be allied to the new Institute of Geological Science, Warren Springs Laboratory, and even the Atomic Energy Board, to have a real look at all our mineral resources. This sort of work is beyond private enterprise. There are too many restrictions.
I should like to remind your Lordships that Ireland, in the few short years since she started to encourage the development of her mineral resources, has doubled the value of that which we are producing from our mineral ore bodies, just by providing tax incentives such as we should have made and as are being made in every other mining country. Our administrators seem incapable of realising what this means. We are told that we are as well off by the various grants 1076 operating in Development Areas, all of which could be rescinded by the Chancellor of the Exchequer to-morrow. I hope to have the opportunity of raising this matter once more in your Lordships' House and, if possible, before the Chancellor has completed his Budget proposals.
I know I have exceeded my usual average of ten minutes, but this is a most important subject concerned with the future of mining engineers. So far as I know, I am the only chartered mining engineer in your Lordships' House. I do not know how many there are in the other place; in fact, I do not know of one, offhand. The miners are well-represented, but this is not so in regard to mining engineers and technologists. I have been concerned with several branches of mining, starting with coal, and I know from experience that it requires little extra training for a coal mining engineer to branch out into other forms of mining and quarrying and other spheres.
The future of the profession is one that requires urgent attention. Our energy capital lies in our fossil fuels: coal, oil, and natural gas. But so far—I want to emphasise "so far"—there have been little, if any, commercial quantities of radioactive minerals. So we must be concerned with the conservation and the economic utilisation of our present energy capital. Even the apparently staggering supplies of natural gas which appear to exist under the sea will become a wasting asset, and with any leap in the standard of living it may not last us long enough to bring nuclear energy into full capacity to take its place.
I now come to what I hope is the most important part of my speech. In suggesting wider powers for the N.C.B. to develop all other minerals, I may have given the impression that I have almost written off any future development so far as coal is concerned. I should like to correct now any such impression. In a fascinating book called Electricity without Dynamos and sub-titled The Corning Revolution in Power Generation, the distinguished physicist, Dr. John W. Gardner, describes how plants absorb solar energy to build up complex molecules from simple ones; and he shows how coal, which is the product of such processes, will behave like other giant complex molecules in releasing its energy. 1077 When these complex coal molecules are broken down again into simple molecules or atoms, the stored energy is released in the form of heat; but the release of this chemical energy could possibly he diverted directly into electrical energy, instead of heat only, and thus coal might be exploited as the material for making fuel cells.
I should like to draw attention to this remarkable development of fuel cells now, at a stage when the concept of producing electricity direct from chemical energy without dynamos is no longer a pipe dream. It has arrived, and the next decade will see fuel cells being exported to areas of the world where fossil fuels are non-existent, and the ingredients of the fuel cells can be developed from coal. Geological circumstances have blessed Britain with a complete range of coal types, many of which will lend themselves to the new material requirements of a power-hungry world. We are on the threshold of a new look, which could be as dramatic as the one which took place when we first showed the world how coal could be used to smelt iron. Mining engineers and technologists must be nurtured carefully until these developments emerge. The miner of the future will be a most highly respected technician, not the drab, almost downtrodden, creature that I remember.
Before I sit down I will touch on one of the many developments in the pipeline. Scientists in this country are hopeful of liquefying coal. They think that the bacteria and fungi which converted the undergrowth of the carboniferous jungles into coal can be stimulated to carry this process further and so liquefy the coal. Searches are in hand to find bacteria or fungi to perform this biological operation, which I understand consists of discovering an organism which will consume the free carbon in the coal at an enormous rate and to do it continuously and thus liquify coal. It is not as impossible as it may sound. The use of bacteria for the removal and recovery of phenols from coke-oven effluents is done in this way already. It started from a small laboratory experiment only about five years ago. To-day this method has developed into an industrial process which supplies the greater part of needs for phenols in this country.
1078 The immediate object is to conserve and encourage the continuation of the work of the research establishments and technologists of the National Coal Board. These dedicated men, up to now, have been working themselves out of a job. They are in the same boat as the miner. They, together with the new Institute of Geological Sciences, could expand their laboratory work to a commercial scale. Why not select mines of marginal commercial value and use them mainly for research purposes? Certain coals contain new biochemicals of great medicinal interest, but no way has yet been found to extract them on a large scale. The utilisation of whole coal faces as fuel cells for the direct conversion of chemical energy into electricity could be explored and developed. The mass production of trace metals is within the range of possibilities if working faces of coal were freely available for scientists.
The outlook is far from bleak for the mineral resources technologist and the high-grade technical operative of the future, provided that we do not allow ourselves to be bamboozled by the negative pattern of thinking in our administrative departments. In conclusion, I would say that no word in this speech has been inspired by the National Coal Board. I have never been near any of their laboratories. It is based upon my own experience and reflects a consensus of opinion among my scientific colleagues.
§ 6.33 p.m.
§ LORD STONHAM
My Lords, it is more than 22 years since I listened in this Chamber to my first debate on coal. I have enjoyed listening to many coal debates since then, and the one thing that has always delighted me in all those debates has been the music—the music of miners' voices. We have had it to-day from my noble friends from Durham, from the Midlands and from Wales; and I was particularly pleased to note that the words have been as sweet as the music, because almost every noble Lord who has spoken about the Bill has welcomed it.
My noble friend Lord Blyton was the exception. He said that under certain conditions this Bill means the annihilation of the mining industry. My Lords, I reject that completely. I regard it as both harmful and manifest nonsense. The mining industry has a future unless, as my right honourable friend has said, it 1079 frightens itself to death. My noble friend Lord Blyton said that there is bitterness and disillusionment in the mining industry, and he was confident that no mothers or fathers would want a son of 15 to go into it because, if he did, he would only be thrown on the scrapheap at 23. That again is utterly wrong.
The noble Lord, Lord Jackson of Burnley, asked me about training centres and about places. He apparently is not aware that this year a total of 6,126 boys were indentured under the mining apprenticeship scheme—virtually the same number as in the previous year—for a 3½-year apprenticeship: a very wide training course, finishing up with six months' full-time training at the coal face. Again, in the same year 3,900 men, including officials, engineers, craftsmen and face workers, attended mechanisation courses. And 1,451 men attended courses leading to the deputy's certificate. These are not insignificant figures, and they all refer to courses provided by the National Coal Board. These are not signs of annihilation of the mining industry.
The noble Lord, Lord Jackson of Burnley (who I regret is not able to be here to hear my reply), asked about training centre places. Three years ago there were only 3,900 places in Government training centres. To-day there are 7,800. It is not bad in three years to double the figure. It would certainly be nice if some noble Lord had got up and referred to this fact and said, "What d first-class job is being done—about twice or three times as good as any Government have ever done before!"
My noble friend Lord Blyton said that the Secretary of the Mineworkers' Federation, Mr. Will Paynter, is reported as saying that if we went on in this way we should go down in history as the Party—the Labour Party—which pioneered the permanent unemployment for miners at 55. Will Paynter should be ashamed of himself. It would be far more true to say that the Labour Party will go down to history as the Party—the first Party—which refused to allow the economic movements in industry, and particularly in the coal industry, to destroy the miners: the first to refuse to allow them to be thrown on the scrap-heap. That is true.
1080 I have a number of ex-miner friends, close friends, friends for many years, some of them who have worked with my noble friend Lord Blyton at the coal face. From 1926 to 1929 they did not have jobs. They were good men, young men, and they started walking: and they went on walking until they got to the West Country. They had to go there before they could get a job. That is why I knew them, and still know them. One of them reads every word we say in this House. It was a very different picture in those days from the picture which is outlined in this Bill. We are told that because we seek to augment an elderly miner's income, if he cannot get a job, by up to 90 per cent. of what he was earning at the pits we are pioneering permanent unemployment of miners at 55. I think it not only untrue talk, but disgraceful talk. Despite what has been said, this industry still has a future. We still want young people to go into it. It is true that it will be a totally different industry, a smaller industry, a more highly technical industry—it will be virtually and completely mechanised—but it will still be a substantial industry with a future.
I was very interested and moved by the speech of the right reverend Prelate the Lord Bishop of Durham who quite rightly said that money is not enough, that what is wanted is work and that there is no time to lose. We agree with that, and so far as lies in our power we are not losing any time. The right reverend Prelate suggested that miners in Durham thought that the Government were not providing facilities by way of factories, and so on, because if they did it would empty the pit. It is not necessary to provide facilities of that kind until they are needed. The point is that when they are needed they should be there. That was the point I made in my speech when I moved the Second Reading: that these special consultations are going on with the economic chairmen in the various regions so that if a pit is going to be closed and the facilities are not ready the closure can be re-phased. That is the whole object of that exercise. The right reverend Prelate mentioned that over the next few years there is likely to be a run-down in the Durham pits of some 7,000 men per annum. That is right, but fortunately 1081 there will not be that number of redundancies; it will be more like 2,000 redundancies per annum. It is quite a problem, and an important problem, and work must be found for those men, but the size of the problem job-wise is not 7,000 per annum.
My noble friend Lord Blyton questioned the figures for the cost of production of power at new stations, and the relative cost of the same production by nuclear energy. He questioned the figures in Table F. The estimates in Appendix 3 of the White Paper include all relevant costs, including the supply and reprocessing of nuclear fuel and radioactive waste. They also include a royalty which will cover amply all forward avoidable costs in further development work for the second nuclear power programme. In the comparison between costs of future nuclear and conventional generation there are hound to be uncertainties—we recognise that—because we are concerned with stations which will perhaps not come into production until 1973 or later, but we have made a careful assessment by trying to get the right balance between optimism and caution. It is surely inherent in the thinking of my noble friend that it would be utterly impossible for my right honourable friend, or for me, representing the Government, to stand up at the Box to advocate a policy which meant a run-down of the coal industry, unless it was absolutely inevitable and unavoidable.
§ LORD BLYTON
My Lords, will my noble friend not agree that the nuclear costs are definitely suspect, and that the Select Committee of all Parties in the House of Commons have asked in their Report for an urgent debate in Committee to investigate nuclear costs?
§ LORD STONHAM
Yes, my Lords, I am aware of that. These matters are being considered. But, as my noble friend knows better than anyone, one cannot change these things in mid-air. We have almost completed the first nuclear programme and have embarked on the second, both of which were fully debated in this House. But the ground rules which we used to calculate the return on nuclear plant are cautious, and its higher capital costs are much more than offset by lower running costs.
I want to come to the point about Seaton Carew which was raised by my 1082 noble friend and which the right reverend Prelate also mentioned. The Government have taken no decision on this or any other station, unless the decision has already been announced, and the criteria for the decision will be those set out in paragraph 98 of the White Paper. I refer in particular to the last sentence of paragraph 98, but I shall not bother to read it out. But I would say this, in view of what my noble friend said about the Chairman of the electricity organisation. The job of that organisation is to make an economic assessment of the method of generating which will give the lowest system supply cost. The Government's job, however—and this is the assurance which I give my noble friend—is to take into account also the wider economic considerations, a very important one of which is the 10,000 jobs, where they are wanted. I say this to indicate that these matters are very much in our minds.
§ LORD BLYTON
My Lords, am I to take my noble friend to mean that, in order for there to be a coal station the Government should declare that there will be a coal station, and that Sir Ronald Edwards's statement that unless it is a nuclear one they will not build a power station, is wrong?
§ LORD STONHAM
My Lords, when I am trying to deal with him perfectly honestly, my noble friend should try not to put what I regard as catch questions to me. What I am saying, and what I say again, is that it is the job of Sir Ronald Edwards and his organisation to give their view of the kind of fuel necessary to produce their product at the lowest cost. It is the job of the Government, once they have that advice, to take into consideration all other factors which have a bearing on what fuel should be used; and I say again that no decision has yet been taken about this particular station.
I should like to try, as quickly as I can, to answer some of the many questions which have been put to me. One was from my noble friend Lord Taylor of Mansfield, who objected to Clause 7 of the Bill because of its unfavourable psychological impact on the people in the mining industry. It is a proposal to increase the maximum membership of e Coal Board at a time when the industry is being run down. The intention behind this clause was to meet the 1083 situation arising from the reorganisation of the Board earlier this year, and to satisfy the need for co-ordination at regional level within the Board's organisation, and externally with other bodies operating at a regional level.
The Board have, in the Government's view, rightly shortened their internal lines of communication by eliminating their divisional tier and concentrating coalfield production into 17 areas with direct responsibility to the Board. These are natural groupings of collieries to provide areas of convenient size for efficient management, but this does not produce a regional entity for Scotland, Wales and parts of England where regional coordination is necessary—and it is fast developing in other fields. The primary role of the additional members was to give the Board the means and capacity to deal with regional problems, without losing the advantage of the more direct management structure now in operation. This was the reason behind the Government's thinking in including this clause in the Bill. But as your Lordships will be aware, my right honourable friend the Minister of Power undertook in the course of the Committee stage in another place to reconsider the matter. As a result of that, and considering also the views expressed this afternoon, the Government decided to put forward an Amendment for consideration during the Committee stage seeking the agreement of your Lordships to delete Clause 7 from the Bill.
§ SEVERAL NOBLE LORDS: Hear, hear!
§ LORD STONHAM
My Lords, my noble friend Lord Taylor of Mansfield also asked me about extra coal tonnage under Clause 6, and about the share between electricity and gas. It is estimated that if necessary an extra 6 million tons will be burned or consumed by the electricity and gas boards, and that is the reason for the £45 million compensation. One cannot be exact about the division between gas and electricity, but it would appear that about 1 million tons will be consumed by the gas industry, and the remaining 5 million tons by the electricity industry.
My noble friend also asked me why we did not extend this beyond 1971, and also said that the time under Clause 2 1084 should be extended beyond 1971. The intention of this Bill, and particularly of Clauses 1 and 2, is to give the coal industry a breathing space so that it may realise its potential for further raising its efficiency and reducing its costs. Because of the exceptionally rapid changes which the next few years will bring, the Government decided that in the period up to 1970–71 the industry needed the further help provided by the Bill, and I think there is general agreement about that. But it would be wrong to assume that this additional coal burn will be required for a longer period than that. The point is that if we had not had this provision regarding the 6 million tons, the run-down of 35,000 a year would have meant that we should have had this extra 6 million tons still in stock.
This is the justification for one of the questions which the noble Lord, Lord Nugent of Guildford, put to me; namely, is this the best way of spending this money? In our view it is, because it means we shall not have this 6 million tons in stock. The noble Lord approves the social clauses, which will not put more miners out of work in any given year, and therefore he should also approve the economic means of properly and usefully disposing of the coal which those extra men will produce.
§ LORD NUGENT OF GUILDFORD
My Lords, may I interrupt the noble Lord for one minute? I was concerned at the very large part of this expenditure being spent on relatively negative purposes. I was asking whether it was not possible to use a larger part of these large sums of money for the promotion of new industry in the areas in order to provide new jobs. This was really my thought: that a good deal of this expenditure—I quite understand the purpose, and sympathise with it—seemed to be going on rather negative purposes.
§ LORD STONHAM
Negative, if it is negative at all, only in the sense that it is keeping at work men who otherwise would not be at work, or for whom other jobs would have to be found. That £45 million will be keeping several thousands of miners at work. I do not regard that as a negative purpose. Nor, I am sure, does the noble Lord.
§ LORD NUGENT OF GUILDFORD
I am sorry if I did not make myself clear. 1085 I quite understand what the noble Lord is getting at, and I want to help him with the orderly run-down, which I recognise is difficult enough anyhow. But I should have preferred these large sums of public money to be spent on some positive, creative purpose, in order to save the more steep run-down of the industry, rather than the approach of producing unwanted coal and paying a subsidy in order to get it used. I hope that I make my point clear.
§ LORD STONHAM
My Lords, in fact I am quite sure the noble Lord and I are in agreement on this.
Large sums of money are needed under this Bill for the purposes I have explained, but, in addition, large sums of money are needed—and, indeed, are being spent—for Government training centres and for the provision of new jobs by means of new factories, by means of extra grants under S.E.T. in development areas, by means of 45 per cent. investment and property grants and by means of substantial rents rebates for firms coming into the area. These are all substantial sums of money which are to be spent in other ways, but under this Bill we need this money for these purposes.
My Lords, my noble friend Lord Taylor of Mansfield also asked me how oil import costs will be put up by devaluation. I cannot give him, or my noble friend Lord Blyton, who also asked the same question, any exact answer on that point. My right honourable friend answered a Question on it in another place to-day, but he indicated that he had not yet completed his examination of the effects on oil prices of devaluation, and therefore the answer to that question must wait a little longer. But I would say that in our view the effect of devaluation on price relativities is likely to be well within the range examined in the Fuel Policy review, and I would emphasise that devaluation will not cause any major or important change in our basic assumptions, in the guidelines. That is why I said—and the noble Lord, Lord Nugent of Guildford, repeated it and, indeed, welcomed the fact—that the White Paper policy stands. To some extent some of the figures may be altered marginally, but we do not think considerably.
1086 My noble friend Lord Taylor of Mansfield also questioned my figure about the 41.5 per cent., and he used the figure of 55 per cent. It is true that, despite the protection given by the oil tax and discrimination against oil at power stations, oil has gained ground very fast over the past ten years, and has increased two-and-a-half times in proportion, mainly at the expense of coal; but with a four-fuel economy, a very sharp check has been given to this rate of growth, and in our view the 40 per cent. share now will be only 41½ per cent. in eight years' time.
My noble friend also asked me about the net cost of oil imports. Of course, there is the figure given in the White Paper of £300 million as the net cost of fuel imports. There is no secret about that. But what we also say (and there is a graph in the While Paper which my noble friend might like to look at) is that, with the growth of home refinement and the changing proportions of use of the various oil products, we expect to have a net surplus of fuel oil for export. After all, the crude oil comes in and there are all the various processes of refinery. In fact, we had hoped that this net export would have occurred much sooner; it has been slower coming than We had hoped. But this is what we are very confidently expecting for the future. My noble friends will not forget that 40 per cent. of our total use of oil is for purposes for which oil has no substitute.
My Lords, my noble friend also referred to how the scheme will work, and what the chaps will get—that is, the miners who retire at 55 and are paid up to 90 per cent. of their previous earnings before—
§ LORD STONHAM
I was not trying to misquote my noble friend. I mean the men who will become redundant and who will come under this scheme. The position will be that unemployment benefit, including earnings-related supplement and sickness benefit, will be offset against the supplement under the scheme. In other words, they will get that first and then it will be supplemented up to 90 per cent. of earnings. If one takes a typical case of a married man without 1087 children, where his supplemented income is to be on a level of, say, £11 6s. a week, the make-up will be like this. In weeks 3 to 26, he would get £7 6s. unemployment benefit, £2 earnings-related supplement and £2 scheme supplement—£11 6s. in all. In weeks 27 to 52 he would still get the same unemployment benefit, but he would get no earnings-related supplement, so he would get a £4 scheme supplement—making the same total of £11 6s.
After that—that is, after the first 52 weeks—for three years there would be no unemployment benefit and no earnings-related supplement, but there would be a scheme supplement, therefore, for the whole of the £11 6s. But the hardship allowances, due to accident and disablement benefit, which are State benefits, figure among certain benefits which would be offset against supplements; that is, they would be regarded as part of the beneficiary's income, but only to the extent that they are awarded or increased in amount because of redundancy. Generally speaking, redundancy will not affect the amount of those two benefits, so that in effect the men will continue to get both those benefits free of the scheme, in addition to the benefits under the scheme. I hope that I have cleared up that point.
About the scheme, however, I would say that it is intended that it should apply to men and women in the coal industry at coal mines. That does not mean opencast work, which is a different thing. But it will apply not only to miners going below, but to those in ancillary jobs—coal-washing and things like that—and therefore will include women.
§ LORD TAYLOR OF MANSFIELD
In a word, it means the producers and manipulators of coal. That is what it means.
§ LORD STONHAM
I do not know whether you can call a man who is engaged in coal-washing a manipulator of coal. I suppose you can. It means miners and men and women employed at coal mines in jobs ancillary to production, in getting and marketing coal, but not the 1088 clerks. I apologise for leaving the noble Lord, Lord Nugent of Guildford, until last. He asked why, if the 1965 prediction about the N.C.B.'s borrowing requirements were so far out, I am so confident that these are going to be all right. That is a fair question. I gave the main reasons for the increase in my opening speech; the increase in stocks and the need for more external finances than was realised in 1965, for the reason that our expectations were not realised. But we have come closer I think this time. Our reasons are given in paragraphs 128 to 131 of the White Paper. This is the best estimate that we can make. They are not fixed or immutable, any more than are the forecasts of supply and demand of the various fuels. Is it the right way to spend the money? I have dealt with this over the £200 million.
Now may I turn to the prospects for increased coal exports to Europe following devaluation. It is true that devaluation will make British coal exports cheaper, and therefore more competitive overseas. American coal exports to Western Europe—I think my noble friend Lord Blyton mentioned this—comprise substantial quantities of coking coal; whereas our coal exports are mainly for electricity generation. The average prices are not entirely comparable. There was mention of a 10s. per ton advantage in our favour; but, as I say, the prices are not comparable. The other trouble is that the U.S.A. exports are protected to some extent by existing long-term contracts. The National Coal Board hope to increase coal exports within the next three years by 2 million to 3 million tons a year.
On the question of the deterioration of coal in stock—there are 28 million tons in stock and it is being added to—I can say that it tends to suffer degradation in size; but as most of the stock will in any case comprise small coal which can be used in most modern, coal-fired power stations it does not in itself present any serious problem. The stocks themselves present a serious problem: but the selling would not if we could get a market. On this point, I think it is wholly right to say that the National Coal Board has tried very hard. My noble friend Lord Arwyn, with his great experience as a mining engineer, I think would agree that of course there are 1089 mining engineers in the Coal Board and that they do their utmost to employ their expertise. They are most dedicated men who really want to succeed. Their lives are devoted to coal.
§ LORD ARWYN
My Lords, I agree with my noble friend. The whole of my speech was directed towards the saving of these people; that they should not emigrate and go abroad. We want them here.
§ LORD STONHAM
I agree with that. We heard yesterday of the 50 doctors in America who want to come back. Perhaps they have come to agree with me. I think this country is the best in the world; I do not need to go to another country to find that out. This has been a very helpful and constructive debate, and I have tried to reply to all the questions. But I will read the debate again, and in particular I shall read carefully the speech of my noble friend Lord Arwyn because it was a highly technical one and I may have missed some of the points. I shall also read other speeches that have been made.
I should like your Lordships to be left with this thought. We believe that in this White Paper and in this Bill we are doing the best for our country. In this Bill, and within the framework of circumstances which have been enforced upon us, we are doing our best for the miners who have done so much for us. If it should prove that things work out better than our estimates, that the coal industry can be larger in 1975 than we think, it will delight us all. That is a consummation we hope to see.
On the particular aspect of good will, the right reverend Prelate said that it would have a wonderful effect in showing good will if we could bring in industries like that, to convince people that we are doing something really important, really worth while. This is of major importance. Of course, my right honourable friend the Minister will read every word of this debate. I am sure that he, too, regards this as a most important matter. I know that he and the Government will do all they can not only to show these gestures of good will—and they are not merely gestures—but to show that by constructive action we mean to make the best use of the manpower available to us.
§ LORD TAYLOR OF MANSFIELD
My Lords, may I express my appreciation for the new thinking of my noble friend and his right honourable friend the Minister of Power in the suggestion that an Amendment will be brought forward at a later stage for the deletion of Clause 7?
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.