Sitting of 3 December 1958

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
DEATH OF A MEMBER
Mr. Speaker: I regret to have to inform the House of the death of Alan John McKibbin, esquire, O.B.E., Member for Belfast, East, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.
PRIVATE BUSINESS
  NORTH OF SCOTLAND ELECTRICITY ORDER CONFIRMATION BILL
  Read the Third time and passed.
  SOCIETY IN SCOTLAND FOR PROPAGATING CHRISTIAN KNOWLEDGE ORDER CONFIRMATION BILL
  Considered; to be read the Third time Tomorrow.
ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Dundee
    Mr. G. M. Thomsonasked the Minister of Labour the number of persons in Dundee registered as unemployed in the jute industry and building industry, respectively; and what percentage they form of the insured workers in each category.
    The Parliamentary Secretary to the Ministry of Labour and National Service (Mr. Richard Wood): Before I answer the Question, Mr. Speaker, I wonder whether I might have your permission and that of the House to remain standing. I think that it would probably save time.
    Mr. Speaker: I am sure that the House w ill be very glad to give that consideration to the hon. Member.
    Mr. Wood: Thank you, Sir.
    The Answer is that at 17th November, 1958, 741 workers in the jute industry and 299 in the building industry were registered as unemployed at the Dundee and Broughty Ferry Employment Exchanges. The respective percentages were 4·7 and 6·1.
    Mr. Thomson: Is the Parliamentary Secretary aware that, while things are a bit better in the jute industry at the moment, the rise in unemployment in the building trade continues to be rather alarming? What steps are being taken to deal with it?
    Mr. Wood: I hope very much that the building workers who are at present unemployed may benefit not only from the recent measures the Government have taken but also from the new factory building projects which have been already announced for the hon. Gentleman's area.
    Mr. G. M. Thomsonasked the Minister of Labour the percentage rates of unemployment at the Dundee and Broughty Ferry Employment Exchanges, combined, at the most convenient date in November.
    Mr. Wood: 4·8 per cent. at 17th November, 1958.
    Mr. Thomson: Is the hon. Gentleman aware that, owing to a dispute in the shipbuilding industry in Dundee, the shipbuilding yard will be closed down completely on Monday night unless there is a resumption of work? Can he say what effect this will have on the unemployment figures in Dundee?
    Mr. Wood: I am afraid that I cannot say with any accuracy what effect that will have, but, as the hon. Gentleman knows, during the past year eight projects for new factories or extensions, six of them with Government assistance, have been announced. As the hon. Member knows, my right hon. Friends are urgently trying to persuade further industry to go to his constituency.
    Mr. Thomson: In view of the very serious unemployment situation in the city, may I draw the Parliamentary Secretary's attention to the shipbuilding situation, which is of the utmost gravity, and seek his mediation to prevent further unemployment there?
    Mr. Wood: I will take note of what the hon. Member says.
    Mr. Nabarro: In view of the high level of unemployment in the building trade in Dundee, will my hon. Friend make representations to the Secretary of State for Scotland to the effect that he should reverse his earlier decision to proceed with a hydro-electric scheme in the far North and should instead substitute an atomic power station on the Firth of Tay, where conditions are ideal and where building workers could be gainfully employed?
    Mr. Wood: I will see that my right hon. Friend receives my hon. Friend's suggestion.

    Unfilled Vacancies
    Mr. G. M. Thomsonasked the Minister of Labour how many unfilled vacancies there were for every 100 persons registered as wholly unemployed at the most convenient date in November.
    Mr. Wood: The number of unfilled vacancies for every 100 persons registered as wholly unemployed in November is not yet available. The October figure for Great Britain was 37 unfilled vacancies for every 100 persons wholly unemployed.
    Mr. Robens: If there is this lockout on Monday night in the shipbuilding industry in Dundee, will the 2,000 men who will then be out of work by being locked out by their employers go on to the local register of unemployed or in what way will these figures appear?
    Mr. Wood: I do not know in what precise circumstances it will occur. The right hon. Gentleman knows, however, that if they are put out of work, the men will presumably go on to the register of unemployed.

    Coventry
    Miss Burtonasked the Minister of Labour whether he is aware that there is anxiety in Coventry concerning the duration of unemployment, both male and female, that the figure for the quarter ended in June was 244 men and 63 women out of work for more than six months, and that these had increased, respectively, to 332 and 86 in the quarter ended September; and what steps he proposes to take to deal with this problem.
    Mr. Wood: Yes, Sir. My local officers are continuing with some success to submit unemployed people to the increasing number of vacancies being notified to them.
    Miss Burton: Is the Parliamentary Secretary aware that the position is getting worse and that his officers are not meeting with any success? Does he realise that for the past two quarters, the figure has increased and there is every indication it will get still greater? Does not the hon. Gentleman feel that the Government should dissociate themselves from the statement made yesterday by the President of the British Employers' Confederation? What hope is there for men and women when we have a statement like that?
    Mr. Wood: The reason for the slight optimism in my Answer was that between October and this month there were in the hon. Lady's area 350 fewer wholly unemployed, and in the same period unfilled vacancies increased from 824 to 979.
    Miss Burton: The hon. Gentleman is, I think, answering the next Question—we have not got there yet. I am dealing with the duration of unemployment and the figure has been greater, and not less.
    Mr. Wood: Yes, indeed. That is why I suggested that my local officers were continuing with some success in submitting people. I quite admit to the hon. Lady—I have said so already—that the numbers unemployed for over six months have, unfortunately, increased.
    Miss Burtonasked the Minister of Labour whether he is aware that a number of young people in Coventry is unable to find work of any kind, that this number includes many who left school last July, and that the position is made worse by the increasing number of men and women also remaining unemployed; and, in view of the fact that many more children will be leaving school in December next, if he will make a statement concerning the employment position for young people in Coventry.
    Mr. Wood: On 17th November, 59 boys and 72 girls were unemployed in Coventry, of whom 14 boys and 19 girls left school in July. The placing of December school leavers in employment may take a little longer this year.
    Miss Burton: Does the Parliamentary Secretary realise what gravity underlines that statement of his? Is he aware, for example, that the long-term prospects for our school leavers in Coventry—I have this on very good authority—are worse than at any time since the war? Does he appreciate that the number of school leavers is 10 per cent. up on last year and that by 1962 it will be 50 per cent. up? Can the hon. Gentleman hold out any hope for us?
    Mr. Wood: The hope I would hold out is that at the moment the number of boys unemployed is 59, whereas there are 190 vacancies for them. On the other hand, the serious aspect of the situation is that there are many fewer vacancies for girls. For 72 girls unemployed, there are, unfortunately, only 64 vacancies. Therefore, it is on the girls' side that I feel the most disquiet. It is, however, too early to say whether any pessimism about the December school leavers will prove eventually to be justified. There was a great deal of pessimism about the July school leavers, who in most areas have been able to find jobs.

    Apprenticeships
    Mr. Mossasked the Minister of Labour whether he is aware that the number of applicants for apprenticeship far outnumbers the number of apprenticeships available; and what steps he is taking to improve the position.
    Mr. Wood: I am aware that there is, in general, competition among young people for apprenticeships. The Industrial Training Council is in touch with industries regarding their future requirements for trained workpeople in the light of the increased numbers of school leavers becoming available. Youth employment committees throughout the country are bringing to the attention of local industry the need to train more apprentices.
    Mr. Moss: Is the hon. Gentleman aware that I have it on good authority that in the City of Coventry an engineering firm offered 20 apprenticeships and interviewed 150 suitable school leavers, themselves selected from a far greater number? Further, is he aware that in the City of Cardiff a suggestion has been made to set up an apprentice-
    1162
    ship training centre under the youth employment committee there because a serious view is taken of the grave situation that is coming upon the country and particularly upon certain localities?
    Mr. Wood: I am personally examining that second suggestion. In reply to the first part of the question, I am aware that figures like that may be found in various parts of the country. That is why I am so anxious that the recommendations of the Report "Training for Skill" should be put into practice as quickly as possible and that employers generally should widen the opportunities for training in industry.
    Mr. Fletcher-Cooke: If these measures that my hon. Friend has in mind do not produce the desired result, will he consider something more drastic in the way of a commission of inquiry or something on similar lines to consider the whole matter of opportunities for apprenticeship? This will be one of the serious defects for the future unless it is tackled radically fairly soon.
    Mr. Wood: I certainly take as serious a view as my hon. and learned Friend of the need. At the moment, however, this is primarily a matter for the Industrial Training Council, which has started work and is investigating what exactly is the position in industry.
    Mr. Mossasked the Minister of Labour whether he is aware that pupils who are advised to stay on at school to obtain a qualification are frequently over the age for entry into apprenticeships when they leave school; and what steps he will take to remedy this situation.
    Mr. Wood: The Carr Committee recommended that young people who stay on longer at school should be allowed to enter apprenticeship at a later age. This recommendation has been brought to the attention of the employers' and workers' organisations in each industry.
    Mr. Moss: What progress has been made? Headmasters have complained to me that they are in a quandary. What advice would the Parliamentary Secretary give to headmasters who are torn between the desire to advise young people to stay on at school and the knowledge that, if they do stay on, they may be too late to enter an apprenticeship?
    Mr. Wood: As the hon. Member knows, a number of apprenticeship schemes have provision for boys who have continued their education and stayed on at school to start their apprenticeship at a later age, but it is also true that some of these provisions are not always implemented. I am anxious that they should be. What is happening at the moment is that the Industrial Training Council has asked different industries for information and very shortly will be asking different industries what action they have taken on the recommendations of the Carr Report, which included what the hon. Member has mentioned.
    Mr. Lee: Is the hon. Gentleman aware that whilst on both sides we are very concerned about this matter and want to see every facility for more apprenticeships, the situation is bound to be bedevilled by the constantly increasing rise in the unemployment of skilled men? Therefore, one of the best ways to get more apprenticeships is to ensure that there are more jobs for adults at the same time.
    Mr. Wood: Both the employment and the training of young people depend to a very large extent, as the hon. Member would agree, on the general employment situation much more than on the temporary increase of school leavers in the "bulge". Therefore, our objective is, as my right hon. Friend the Chancellor of the Exchequer has announced, to widen employment opportunities generally.

    Industrial Hygiene
    Mr. Brockwayasked the Minister of Labour what recommendations have been made by the Industrial Health Advisory Committee of his Department regarding the extension of laboratory facilities for industrial hygiene testing.
    Mr. Wood: The Industrial Health Advisory Committee has appointed a subcommittee to collect and assess information as to the needs in this field, and to consider how such needs can best be met.
    Mr. Brockway: While thanking the Parliamentary Secretary for that Answer, may I ask whether he has knowledge of the three pioneer laboratories at Slough which are examining the effects on health of noise and heat and dust in factories? If he has that information, could not it be incorporated in some national plan in order to carry out research into industrial diseases to try to prevent them?
    Mr. Wood: I should very much like to consider the hon. Gentleman's suggestion. I will do so.

    Tees-side
    Mr. Marquandasked the Minister of Labour the total number of workers registered as unemployed at the Employment Exchanges included within the Parliamentary constituencies of Darlington, Sedgefield, The Hartlepools, Cleveland, Stockton-on-Tees, Middlesbrough, West, and Middlesbrough, East, at a convenient date early in October, and at the latest date for which the information is available.
    Mr. Wood: As the reply includes a table of figures, I will, if I may, circulate it in the OFFICIAL REPORT.
    Mr. Marquand: Is the hon. Gentleman aware that I am rather surprised? I asked for only two figures, the total number unemployed in October and the total number unemployed today. Perhaps he can give me those figures now orally.
    Mr. Wood: I apologise. I thought the right hon. Gentleman was asking for the number of unemployed in all the Parliamentary constituencies referred to in his Question and I have tried to give him that information. The Answer shows that in most of the areas named by the right hon. Gentleman, there has been a slight increase of unemployment. The increase has been greatest in Middlesbrough sod in Saltburn. In Middlesbrough, it was due mainly to a substantial growth of the number temporarily stopped in the iron and steel smelting and rolling industry.
    Mr. Marquand: Is the hon. Gentleman aware that unemployment in this area is now twice as heavy as it was a year ago? As he has just said, the unemployment is increasing and the position shows no sign of improvement. Is the Parliamentary Secretary aware that large numbers of men who are working short time are not drawing unemployment benefit? In these circumstances, what prospect can he hold out for the future of Tees-side?
    Mr. Wood: The right hon. Gentleman knows much better than I that it repends very largely on the prospects for iron and steel and allied industries. As he also

    1165
    knows, however, the whole area is in the North-Eastern Development Area. Therefore, I hope it will be possible to bring new industry to this area, as to other areas.
    Mr. Chetwynd: In view of this considerable increase in the numbers of unemployed, is the Parliamentary Secretary satisfied that his Department has adequate

    NUMBERS OF UNEMPLOYED PERSONS ON THE REGISTERS OF THE UNDERMENTIONED EMPLOYMENT EXCHANGES AT 13TH OCTOBER AND 17TH NOVEMBER, 1958

    Employment Exchange (including Youth Employment Office where appropriate)

    13th October, 1958

    17th November, 1958

    Males

    Females

    Total

    Males

    Females

    Total

    Hartlepool

    …

    194

    87

    281

    155

    98

    253

    West Hartlepool

    …

    881

    312

    1,193

    938

    353

    1,291

    Sedgefield

    …

    12

    3

    15

    20

    4

    24

    Darlington

    …

    638

    273

    911

    562

    315

    877

    Stockton and Thornaby

    …

    890

    393

    1,283

    825

    471

    1,296

    Haverton Hill

    …

    61

    110

    171

    110

    140

    250

    Middlesbrough

    …

    1,803

    750

    2,553

    2,123

    1,013

    3,136

    Redcar

    …

    135

    138

    273

    183

    111

    294

    South Bank

    …

    386

    97

    483

    391

    103

    494

    Saltburn

    …

    83

    66

    149

    499

    58

    557

    Guisborough

    …

    82

    23

    105

    124

    26

    150

    Loftus

    …

    141

    53

    194

    147

    60

    207

    Trade Unionists
    Mr. Ellis Smithasked the Minister of Labour to what extent the pre-war arrangements have been restored for trade unionists who register for employment at the employment exchanges.
    Mr. Wood: The pre-war arrangements for co-operation between employment exchanges and trade union branches in placing their members in employment have continued unchanged.
    Mr. Smith: Does that apply to the prewar facilities for signing on?
    Mr. Wood: It applies to the kind of facilities where if a local office has no suitable man or woman registered for a particular job then the branch secretary of he appropriate trade union would be asked to submit a name; and, of course, the co-operation works in the reverse direction as well.
    Mr. Smith: In the circumstances, though I do not want to press this too hard at this stage, will the Parliamentary Secretary give me an undertaking that he will consult his right hon. Friend with a view to consulting the National Advisory Committee on this matter?
    Staff at the employment exchanges to deal with them?
    Mr. Wood: As far as I know. I am completely satisfied. If, however, the hon. Member would like definitive information, perhaps he would put down a Question.
    The following table gives the information desired:
    Mr. Wood: I will certainly talk to my right hon. Friend, but I am not quite clear at the moment what I have to talk to him about.
    Mr. Smith: I will talk to the Parliamentary Secretary.

    International Labour Conference (Conventions and Recommendations)
    Mr. Ellis Smithasked the Minister of Labour how many conventions and recommendations have been made at the 'International Labour Conference since 1950; and how many have been applied or ratified during the same period by Her Majesty's Government.
    Mr. Wood: Since 1950, the International Labour Conference has adopted 13 conventions and 24 recommendations. During the same period the United Kingdom has ratified 17 conventions and has accepted 15 recommendation, including four conventions and 11 recommendations among those adopted since 1950. The action to be taken by the United Kingdom on the conventions and recommendations adopted at sessions of the Conference held earlier this year is under consideration.
    Mr. Smith: I have just thought about my previous supplementary question on Question No. 12. I would explain that I intended no reflection whatever on the Parliamentary Secretary.

    Employment Exchanges, Stoke-on-Trent
    Mr. Ellis Smithasked the Minister of Labour if he is satisfied with the facilities and standards of accommodation in the employment exchanges within the City of Stoke-on-Trent, and with the siting of the Longton Employment Exchange; and if he will make a statement.
    Mr. Wood: I recently visited one of these employment exchanges and am satisfied that their standards of accommodation are reasonable and provide adequate facilities within the City of Stoke-on-Trent for the present and foreseeable needs of my Department. Three of the employment exchanges are in buildings specially designed for the purpose. The Hanley Exchange is in premises suitably adapted.
    I think the position of the Longton Employment Exchange is reasonable.
    Mr. Smith: What does "reasonable" mean?
    Mr. Wood: I think it may be taken to mean "reasonably central".
    Mr. Smith: Then will the Parliamentary Secretary reconsider this, after taking advice from the local people, and reconsider the site?
    Mr. Wood: I will certainly reconsider it. I was anxious to see how central it was, and I looked at a map. I understand there is a new housing estate, which makes the exchange site a good deal more central than it used to be. I will certainly look at it again.
    Mr. Smith: I thank the Parliamentary Secretary.

    Greenock and Port Glasgow
    Dr. Dickson Mabonasked the Minister of Labour the percentage rates of unemployment in the burghs of Greenock and Port Glasgow, respectively, at the most convenient date in November.
    Mr. Wood: A percentage rate of unemployment is available only for the Greenock and Port Glasgow area as a
    1168
    whole. At 17th November, 1958, the rate for this area was 8·4 per cent.
    Dr. Mabon: Does the Parliamentary Secretary agree that that confirms the continuing and progressive rise in unemployment during the last eighteen months in particular? Would he make representations to his colleagues in the Government, and to the First Lord of the Admiralty in particular, to prevent the transfer of the experimental establishment, thus adding 200 more men to the unemployment queue?
    Mr. Wood: I will certainly bring that to the notice of the First Lord.
    Mr. Robens: How many dockers would be unemployed, but not appearing in the Parliamentary Secretary's figures because they have special arrangements about signing on?
    Mr. Wood: I am afraid I have not any figures for dockers. They are in a special category, as the right hon. Gentleman knows. It is, no doubt, a matter of difference of opinion between us how far they can be said to be unemployed. I have not the figures.
    Mr. Woodburn: Would the hon. Gentleman call his right hon. Friend's attention—indeed, the whole Government's attention—to the fact that these experimental stations are one way in which the Government can direct industry to different parts of the country? The Greenock area is a very desirable place even for scientists to live, and might prove an attraction to move if they once got there.
    Mr. Wood: I will bear that in mind.
    Dr. Dickson Mabonasked the Minister of Labour, for the most convenient date in November, the number of wholly unemployed persons on the registers of the Greenock Employment Exchange in respect of duration of unemployment.
    Mr. Wood: On 17th November, 1958, 2,804 persons were registered as wholly unemployed at Greenock Employment Exchange. Of these 456 had been unemployed for less than two weeks, 777 for more than two but less than eight weeks, and 1,571 for more than eight weeks.
    Dr. Mabon: Would the Parliamentary Secretary agree that this confirms the Government's complete inability to solve this problem, which has persisted for some two years now? Surely the Government must take much more vigorous steps than they have so far?
    Mr. Wood: The hon. Gentleman, I think, knows what my right hon. Friends are trying to do in this area, and, as I promised in answer to his last supplementary question, I will bring to the First Lord's notice the suggestion the hon. Member made.

    B.O.A.C. Dispute (Report)
    Mr. Beswickasked the Minister of Labour when he expects to receive the Report of the commission of inquiry into the British Overseas Airways Corporation dispute; in what form it will be published; and when.
    Mr. Wood: My right hon. Friend has now received the Report of the Court of Inquiry set up for the recent dispute at London Airport. It will be published as a Command Paper and I hope it will be possible to lay it before Parliament some time next week.
    Mr. Beswick: While thanking the Parliamentary Secretary for that reply, may I ask if he would convey to the Leader of the House the fact that there will be a widespread desire to have time to discuss the matter in this House?
    Mr. Wood: I will see that my right hon. Friend has that in mind.

    National Service (Deferment)
    Mr. Shinwellasked the Minister of Labour whether, in view of the decision of Her Majesty's Government to terminate the call-up in 1960, he will regard with greater leniency claims made for deferment on compassionate grounds.
    Mr. Wood: Applications for postponement of call-up on grounds of exceptional hardship are considered with the fullest sympathy. Amending Regulations which were laid before the House in February, 1957, provided more lenient conditions for the grant of postponement and during the current year more than 68 per cent. of the applications have been granted.
    Mr. Shinwell: Is the hon. Gentleman aware that within my own experience, arising from communications I have
    1170
    received from persons concerned, the attitude of some of the hardship tribunals is rather more rigid now than heretofore? In view of the early termination of the call-up, would not it be desirable at any rate to show rather more compassion in particular to men with family responsibilities?
    Mr. Wood: The right hon. Gentleman' view is not borne out by the figures for the country, which show that from 1956 to 1958 the numbers of applications granted have increased from 59 per cent. to 68 per cent. In answer to his personal case, about which I know he has written to my right hon. Friend, I would point out that this man had his call-up postponed till next January, and he was told that if his family circumstances continued to be difficult in January, he could apply again, and, no doubt, the hardship committee would reconsider it.
    Mr. Blenkinsop: Would the hon. Gentleman consider the problem of the number of men who have been doing some service with the Merchant Navy and who, to my mind, are being treated rather unfairly when they come back to deal with family problems? That type of case is a very real one.
    Mr. Wood: If the hon. Gentleman will give me particulars, I will look into them. It is very difficult to do so without knowing the cases.
    Mr. Mossasked the Minister of Labour whether he will modify the deferment regulations so that young men who have completed their apprenticeships and are denied further day-release can attempt to obtain a professional qualification within a short period afterwards by attending evening classes.
    Mr. Wood: No, Sir. I think that the existing rule is a good one and serves the best interests of all concerned.
    Mr. Moss: Is there not a conflict between the national policy of encouraging young men to obtain technical and professional qualifications, and the present deferment regulations? The regulations prevent a young man from qualifying if he has completed his apprenticeship and has to take the fifth year of a five-year course in his own time and at his own expense by attending evening classes instead of taking part in a day-release scheme. Is not this a good point which has nothing to do with employers?
    Mr. Wood: The hon. Member recently wrote to my right hon. Friend about a personal case which has been settled. However, the main points of this rule are to secure that a substantial amount of training as opposed to employment takes place, and to encourage part-time day release in order to help a young man to have plenty of time to study when he is fresh and able to do so, rather than at the end of the day.

    Banks (Negotiating Machinery)
    Mr. Swinglerasked the Minister of Labour if he will now initiate further discussions with bank employers and representatives of bank employees in England and Wales with a view to setting up national negotiating machinery for the banking industry.
    Mr. Wood: No, Sir. As my right hon. Friend said in answer to a similar Question on 12th November, there is in existing circumstances no scope for further action on his part.
    Mr. Swingler: For how long is the patience of the members of the National Union of Bank Employees to be exploited? Does not the hon. Gentleman agree that the attitude of the bank employers to this matter is wholly unreasonable and has created a deadlock in the situation for a considerable time? Is not it the responsibility now of the Ministry of Labour to do something to break the deadlock before the patience of the bank employees is strained beyond endurance?
    Mr. Wood: I do not know what the hon. Member has heard about the patience of the N.U.B.E., but my right hon. Friend has had no request from any source for further assistance. [HON. MEMBERS: "Oh."] It is quite true. Beyond that, my right hon. Friend is not aware of any movement to try to secure a greater unity of purpose as between internal staff associations and the Union.
    Mr. Robens: Is not it the case that the question of the bank employees and the attitude of bank chairmen has been raised on this side of the House many times in the last two years? Does not the hon. Gentleman agree that the bank chairmen, who are nominally responsible for sending out monthly reviews containing articles on industrial relations, might at least consider their own position and recognise the
    1172
    N.U.B.E. as an integral part of the negotiating machinery?
    Mr. Wood: I would answer that if my right hon. Friend received an approach from any of the interested parties he would certainly consider making an approach himself, but he is very anxious that this matter should proceed smoothly, and the decision on how to obtain the best result must be left to him.
    Mr. Shinwell: After more than 100 years of trade unionism, with trade unions now officially recognised by the great body of employers in the country, what earthly reason is there for withholding recognition from this organisation?
    Mr. Wood: It is not a question for my right hon. Friend as to which unions are recognised in these discussions.

    Aircraft Industry
    Mr. Edelmanasked the Minister of Labour his plans for the re-employment of workers made redundant in the aircraft industry as a result of the readjustment of the military programme.
    Mr. Wood: My local officers will make every effort to find suitable alternative employment for any workers from the aircraft industry who register at employment exchanges. Hitherto their efforts have met with marked success.
    Mr. Edelman: Is not the problem now a grave one? Is not it a fact that before the Government's Defence White Paper was published 64 per cent. of the industry's total output went to Government orders? Is it the case that if the programme for conventional aircraft is run down by half more than 90,000 workers will become redundant? Does not that constitute a very serious situation in areas like Coventry which depend largely on the aircraft industry and the machine tool industry?
    Mr. Wood: A number of the supplementary questions which the hon. Member has asked are for my right hon. Friend the President of the Board of Trade, but the Question on the Order Paper refers to the workers who have presumably been discharged in the past, and in the last year the numbers employed in the aircraft industry have fallen from about 258,000 to 247,000. Of the 11,000 discharged only 2,140 were registering at employment exchanges. Therefore, so far the problem is not one of very great proportions.
    Mr. Lee: Does not this problem arise because the Government at one and the same time depressed military orders and the civil work which would otherwise have been available? Cannot the hon. Gentleman get his right hon. Friend to agree that at a time when we ate rightly reducing our defence requirements the accompaniment to that should be an increase in employment in the civil aircraft industry?
    Mr. Wood: That raises a number of questions which I do not think are for me. I was merely asked about the arrangements we were making for the re-employment of those who had lost their jobs.

    Newcastle-under-Lyme
    Mr. Swinglerasked the Minister of Labour the latest figure of unemployment in Newcastle-under-Lyme; what proportion of the working population this represents; how this compares with the national average; how many are disabled persons; and if he will draw the attention of all Departments to these figures so that they may be taken into account in the consideration of public schemes.
    Mr. Wood: I apologise, Mr. Speaker, for the length of my reply.
    On 17th November, 1958, 1,211 people were registered as unemployed in Newcastle-under-Lyme, representing 4·6 per cent. of the insured employees. National figures are not yet available for comparison, but on 13th October the percentage rate in Newcastle-under-Lyme was 4·6 compared with a national average of 2·3. Included in the figure for 17th November, were 197 registered disabled persons suitable for employment under normal conditions and 35 severely disabled persons unlikely to obtain employment except under sheltered conditions. Nearly a third of those unemployed in Newcastle-under-Lyme were temporarily stopped on the day of the count.
    The town is within daily travelling distance of the City of Stoke-on-Trent and the proportion of wholly unemployed people in the wider area was the same as the corresponding national average. I would not be justified in suggesting to my right hon. Friends that priority should be given public schemes in the area at the expense of other areas with a more serious unemployment problem.
    Mr. Swingler: Whilst thanking the Parliamentary Secretary for that lengthy reply, may I ask whether he recognises, therefore, that since the last General Election unemployment in Newcastle-under-Lyme has continuously increased and has now reached a very serious figure? In the interest of those who are placed in enforced idleness there, will the hon. Gentleman draw this matter to the attention of his right hon. Friends, to whom I have continuously suggested a variety of schemes? These schemes range from a reduction of the tax on pottery to building necessary roads and an increased number of schools, to prevent the situation from becoming still worse.
    Mr. Wood: The hon. Member knows that the Board of Trade has discussed the opportunities which are offered by North Staffordshire, including Newcastle-under-Lyme, with a large number of firms, and it will continue to do so in every case that it considers suitable.
    Mr. Swingler: With no result?

    Tees-side Bridle and Engineering Works, Middlesbrough
    Mr. Marquandasked the Minister of Labour what reports he has received from the Factory Inspectorate concerning excessive noise at the Tees-side Bridge and Enginering works in Middlesbrough.
    Mr. Wood: None, Sir.
    Mr. Marquand: Is the hon. Gentleman aware that the noise from this works has recently been so great as to lead to very strong protests from residents in houses quite a long distance away? If the noise so badly affects the residents in the district, does not it follow that it must affect equally adversely the workers at the works? Whilst recognising that his right hon. Friend has no special responsibility at the moment for the prevention of noise, may I ask the hon. Gentleman whether he would consider instituting the sort of study on Tees-side of this problem which he suggested in a recent speech. He can find many examples there of noisy undertakings and one or two examples of undertakings which take great care to prevent noise.
    Mr. Wood: The right hon. Gentleman's remarks raise many issues that are outside the Question. I understand that complaints were made about the noise

    1175
    but not to the Factory Inspectorate. They were made to local councils by people who could not get to sleep because of it. As the right hon. Gentleman has pointed out, this is not a matter for the Factory Inspectorate or the Ministry of Labour. I will look into the other things to which the right hon. Gentleman referred, and perhaps he will table a Question about them.

    Factory Inspectors
    Dr. Strossasked the Minister of Labour how many of the 96 districts have junior factory inspectors who possess a technical qualification; and how many have no one who is technically qualified.
    Mr. Wood: There are now 97 districts. In 76 of these there are inspectors with technical qualifications, including 63 in which there are junior inspectors with such qualifications. In the remaining 21 districts the inspectors have no technical qualifications.
    Dr. Stross: Does the hon. Gentleman agree that it is not a happy situation to have any district with no one at all who has any technical qualification? Are there any plans in mind for finding a remedy for this situation?
    Mr. Wood: I know the hon. Member's interest in this matter, and we may have opportunities to discuss it in greater detail shortly in Committee. I am sure that he would agree that the difficulty is that the general inspectorate needs people both with and without technical qualifications, and it is difficult to know exactly what the balance should be. There is a certain amount to be said for having those with technical qualifications spread as widely as possible, and a good deal to be said for what we are trying to do at the moment, which is to give each division qualified personnel. But it is difficult to give to each district those with the right technical qualifications, even if we give them all technically qualified inspectors.
    Dr. Stressasked the Minister of Labour the difference in pay per annum between the initial salary of a grade II inspector and the Works Group scale of payment.
    Mr. Wood: The initial salary of a Works Group entrant, at the age of 25, is £85 per annum above that of Her
    1176
    Majesty's Inspector of Factories Class II at the same age.
    Dr. Stross: Do I gather that it is the difference in salary scales that is responsible for the problem which I mentioned in previous Questions, and that if we could give a rise which would make the scale approximate to the Works Group scale we should be able to solve that problem quite easily? May I put it this way? If the Minister is not prepared to see the scale rise in this way, would he at least accept that it is desirable to go half or three quarters of the way?
    Mr. Wood: This has been frequently discussed and, as the hon. Member probably knows, members of the specialist branches of H.M. Inspectorate are paid on these higher scales, but not members of the general inspectorate. The whole point is that higher scales are paid to certain classes throughout the Civil Service who have professional qualifications and are doing work of a professional character.

    Deaf Persons (Vocational Training)
    Mr. Hastingsasked the Minister of Labour how many local authorities have provided schemes of training for the deaf; and whether he will give some indication of the nature of these schemes and of their results.
    Mr. Wood: Vocational training for the deaf, as for other disabled persons, is provided by my Department under the Disabled Persons (Employment) Acts and not by local authorities. It may take place at Government training centres, residential training colleges, technical or commercial colleges or with selected employers. In practice, the number of deaf persons who are suitable for vocational training and who avail themselves of these facilities is relatively small.
    Mr. Hastings: Does the Parliamentary Secretary realise that quite a number of people suffer from deafness for which nothing can be done by mechanical aid and that the psychological condition of the very deaf is a very serious one? It is often worse than that of the blind, in that they tend to be suspicious and depressed. Will the hon. Gentleman see whether more can be done for this very unfortunate class in our community?
    Mr. Wood: I have the greatest sympathy with what the hon. Gentleman says, because I think that total deafness is a very great disability. We shall always consider what further provision we could make; but facilities exist to train these people for employment and, for one reason or another, they are not used. One of the things we are trying to do at the moment is to co-operate with the voluntary bodies and we have recently issued a little pamphlet, which I expect the hon. Gentleman has seen, called "Deafness and Employment". That, I hope, will be of help.
    Mr. Dugdale: Is the hon. Gentleman aware that the Minister of Health said recently that he would look into this matter and pay special attention to it? Will the hon. Gentleman consult him about it?
    Mr. Wood: I will indeed, but this is a question about training, which my right hon. Friend said quite rightly, was in the hands of the Ministry of Labour.
    Mr. Edward Evans: Is the hon. Gentleman aware that, through lack of capital resources, the voluntary societies are inhibited from embarking on a scheme of training, such as has been suggested by my hon. Friend the Member for Barking (Mr. Hastings)? Further, is he aware that I have been in contact with his Minister and with the Minister of Health on this topic in order to find out how we can get sufficient capital grants to establish the right type of workshop and training centre for the adolescent deaf, and that we have been referred back to the big trusts? Will the hon. Gentleman consult the Minister to see if there are any funds available from Government resources with which we could establish a training centre, as is done for other handicapped people?
    Mr. Wood: I will discuss that with my right hon. Friend, although it goes a little outside the Question I was asked.

    School Leavers
    Mr. Brockwayasked the Minister of Labour what action is being taken to provide employment for children in Slough and other towns where it is estimated that the effect of the post-war birth rate bulge will be largely above the national average by the year 1962.
    Mr. Wood: The capacity of a particular area to absorb the additional number of school leavers into employment will normally be determined more by the general employment situation in that area than by the size of the "bulge". The employment situation in Slough is good.
    Mr. Brockway: While noting the fact that not a single hon. Member on the opposite benches has put down a Question about unemployment, may I ask whether the Parliamentary Secretary is aware how seriously we view this situation, particularly for the boys and girls leaving school? Is he also aware that in Slough the youth employment officer estimates that, between 1954 and 1902, the number of school leavers will increase by 90 per cent. compared with 52 per cent. as the national average? Is this Tory freedom—the freedom to start life on the scrapheap?
    Mr. Wood: Certainly my right hon. and hon. Friends are not responsible for the size of the bulge which will, in fact, be a little greater than the hon. Gentleman suggested. Whatever the views of the youth employment officer in Slough, I argue from the past and I say that every single one of the 746 boys and girls in Slough who left school in July had been placed by the end of September.
    Mr. Brockway: On a point of order. As I have been asked to withdraw, may I say that at the present time that statement is not true? [HON. MEMBERS: "Oh."] As I have been asked to withdraw—
    Mr. Speaker: Order. I did not hear the hon. Member being asked to withdraw. I do not think he said anything he ought to withdraw.
    Mr. Brockway: May I press the point of order, Mr. Speaker'? It was suggested that I was not stating the truth. At the present time, the boys and girls of Slough cannot get jobs.
    Mr. Spriggsasked the Minister of Labour how many students, having left schools in the County Borough of St. Helens, are signing the employment exchange register; how many students have remained at school because employment cannot be found for them; and what steps he is taking to induce employers to accept young people into apprenticeships.
    Mr. Wood: Fourteen boys and 13 girls who left school last term are registered as unemployed. I cannot say whether any boys or girls remained at school because of the employment situation, but no cases are known of any returning to school because they could not get work. Youth employment committees have been invited to take the lead in sponsoring local action in furtherance of the recommendations contained in the Report "Training for Skill".
    Mr. Spriggs: Is the Parliamentary Secretary aware that I met a young people's deputation in St. Helens whose main complaint was that youth could not find work? Further, I found that employers were very reluctant to develop apprenticeship schemes because National Service tended to give youngsters the idea that when they had finished their Service they should go elsewhere or do something fresh—[HON. MEMBERS: "Speech."] Is the Parliamentary Secretary aware that one of my hon. Friends stated a little while ago that the main cause of youth unemployment was the Government's economic policy?
    Mr. Wood: I am not quite sure what is the question I should answer. I can only give the figures. Out of 407 boys and 340 girls who, as I said in my Answer, left school, 14 boys and 13 girls are registered as unemployed. Therefore, I do not think the difficulties should be over-emphasised, although I agree with the hon. Gentleman that it is vitally necessary for us to increase the opportunities for apprenticeship as quickly as possible.
    Mr. Frank Allaunasked the Minister of Labour how many vacancies were notified for Salford boys leaving school this July compared with July last year; how much longer it took to place the boys; and if he will give some indication of the prospects for those leaving school there this Christmas.
    Mr. Wood: Thirty-three vacancies were notified in July, compared with 62 last year. The placing of all boys leaving school took about a month longer this year than last. It is not yet possible to forecast what will be the prospects for those leaving school at Christmas.
    Mr. Allaun: Does the Minister agree that unemployment is a most disheartening way for a boy to start his industrial life? Is he aware that the school leaver,
    1180
    who previously had a choice of jobs, now has to take the third or fourth choice, if that, which means that he is unhappily stuck in an unsuitable job, possibly for the rest of his life? Would his right hon. Friend consider providing unemployment pay for these boys or their parents, because at present they do not receive any?
    Mr. Wood: I agree with the hon. Gentleman in that I think that there is nothing more frustrating at the beginning of a career than to find it very difficult to obtain work. That is not so far the case in most areas, and I hope it will not be. I am pleased that in what has not been a very easy year all the boys leaving school at the end of the summer term in the hon. Gentleman's constituency had been placed in employment by the middle of October. As to his second suggestion, I should want notice of that and should like to see a Question on the Order Paper

    Scottish Aviation Ltd., Prestwick
    Sir T. Mooreasked the Minister of Labour if he is aware of the persistent and growing redundancy at Scottish Aviation Limited, Prestwick Airport; and what plans he has to deal with this situation.
    Mr. Wood: Yes, Sir. My local officers will register before their discharge all who need help in finding other work, and will do everything possible to submit them to vacancies.
    Sir T. Moore: Is my hon. Friend aware that these are skilled men who have been accustomed to doing this kind of work, and that they want badly to secure work for which they are equipped, rather than to be directed to some other job and perhaps lost to the industry for all time?
    Mr. Wood: Of about 180 who were discharged last September, only 56 are still unemployed. The others are either known to have work or thought to have been offered employment.
    Mr. C. Pannell: Is the Minister aware that of the 70 Questions to the Minister of Labour which are on the Order Paper today only four are from hon. Gentlemen behind him, and that those four are all about redundancy? Does not he think, in view of the fact that we will not get through all the Questions today, that it is about time that the Minister of Labour, in the worsening industrial situation, had two days allocated in which to answer Questions on unemployment?

    Remploy
    Mr. Awberyasked the Minister of Labour, in view of the work being done by Remploy in maintaining severely handicapped men in productive employment despite the recession in the commercial markets, if he will take steps to increase the orders from Government Departments, which in recent months have been declining, and thus help Remploy and be an example to other purchasers of the goods manufactured by them.
    Mr. Wood: I gladly endorse the hon. Member's tribute to the work being done by Remploy. As my right hon. Friend, the Chancellor of the Exchequer, said on 15th July in reply to the hon. Member for Sunderland, North (Mr. Willey) the arrangements for placing Government contracts with priority suppliers, including R employ, are being examined by the Departments concerned. The object of the Committee to which my right hon. Friend referred, is to promote closer relations between the priority suppliers and the main purchasing Departments. It has held its first meeting.
    Mr. Awbery: Is the Minister aware that, although the sales of Remploy are going up, the demand from Government Departments is falling? This is no encouragement to outsiders, so will he do what he can to get the various Government Departments to buy more from Remploy, and so encourage outside purchasers?
    Mr. Wood: It is true that there has been a fall, and it is due to the sharp fall in Government requirements, largely because of the cutting back of the defence programme. This matter will certainly be considered by the Committee and I hope there will be progress as a result.

    Commonwealth Immigrants
    Captain Pilkingtonasked the Minister of Labour what new arrangements have been made in employment exchanges to keep a record of Commonwealth immigrants who may be unemployed.
    Mr. Wood: No special records are at present Kept of unemployed Commonwealth immigrants who register at employment exchanges. My right hon. Friend is considering whether records of this kind should be kept to enable the
    1182
    Ministry to provide such unemployment statistics as may be necessary.
    Captain Pilkington: Does my hon. Friend anticipate that it will be difficult to make such arrangements?
    Mr. Wood: I think it would certainly be possible if it were seen to be desirable.

    Lanarkshire Metal Manufacturing Industry
    Mr. Lawsonasked the Minister of Labour the number of boys registered as unemployed at youth employment offices in Lanarkshire in October, 1958, whose last employment was in the metal manufacturing industry; and what percentage of boys under 18 years of age in the metal manufacturing industry of Lanarkshire this represented.
    Mr. Wood: In Lanarkshire, including Glasgow. 44 wholly unemployed and 101 temporarily stopped. It is not possible to say what proportion these represent of the boys employed in this industry.
    Mr. Lawson: If my calculation is anything like correct, it appears to me that well over 20 per cent. of youths under 18 in this industry are at present unemployed. Is it not a sad reflection on an industry which has boasted so often of its good labour relations that it should be so ready to put off youngsters? Will the hon. Gentleman make representations to try to have those youngsters treated as proper apprentices?
    Mr. Wood: The hon. Gentleman will know better than myself that this is merely a reflection of the general difficulties in the industry. I need not tell him what difficulties the industry is going through at the present time.
    Mr. Lawsonasked the Minister of Labour the number of persons registered as unemployed at each of the Ministry of Labour offices in the County of Lanark in October, 1958, and October, 1957, and whose last employment was in the metal manufacturing industry.
    Mr. Wood: As the reply consists of a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Lawson: I put the Question down because I have not got the exact figures but, again, if my understanding of the position is at all correct, there is more than a tenfold increase in unemployment in this trade in that part of the country.

    1183
    Will the hon. Gentleman take especial steps to ensure that steel orders are sent to Lanarkshire?
    Mr. Wood: The hon. Gentleman has been told already that the Board of Trade

    NUMBERS REGISTERED AS UNEMPLOYED IN LANARKSHIRE WHOSE LAST EMPLOYMENT WAS IN METAL MANUFACTURE

    Employment Exchanges

    14th October, 1957

    13th October, 1958

    Wholly Unemployed

    Temporarily Stopped

    Total

    Wholly Unemployed

    Temporarily Stopped

    Total

    Airdrie

    23

    —

    23

    49

    137

    486

    Bellshill

    17

    —

    17

    73

    273

    346

    Blantyre

    5

    —

    5

    50

    6

    56

    Cambuslang

    13

    —

    13

    310

    11

    321

    Carluke

    2

    —

    2

    14

    6

    20

    Coatbridge

    39

    —

    39

    135

    465

    600

    East Kilbride

    —

    —

    —

    2

    5

    7

    Hamilton

    31

    1

    32

    167

    50

    217

    Lanark

    2

    —

    2

    4

    3

    7

    Larkhall

    5

    —

    5

    24

    16

    43

    Lesmahgow

    1

    —

    1

    1

    1

    2

    Motherwell

    31

    8

    39

    107

    207

    314

    Shotts

    2

    —

    2

    8

    8

    16

    Uddingston

    11

    —

    11

    43

    68

    111

    Wishaw

    31

    3

    34

    112

    124

    236

    Bridgeton

    42

    4

    46

    106

    32

    138

    Glasgow Central

    30

    —

    30

    63

    16

    79

    Glasgow South Side

    49

    2

    51

    190

    13

    203

    Govan

    15

    —

    15

    22

    17

    39

    Kinning Park

    7

    —

    7

    23

    3

    26

    Maryhill

    23

    —

    23

    65

    34

    99

    Parkhead

    62

    —

    62

    191

    251

    442

    Partick

    5

    —

    5

    2

    5

    7

    Springburn

    50

    2

    52

    153

    19

    172

    Rutherglen

    9

    —

    9

    39

    8

    47

    Youth Employment Offices

    Airdrie

    —

    —

    —

    6

    12

    18

    Bellshill

    5

    —

    5

    7

    4

    11

    Blantyre

    —

    —

    —

    —

    —

    —

    Cambuslang

    —

    —

    —

    1

    —

    1

    Coatbridge

    1

    —

    1

    1

    55

    56

    Hamilton

    2

    —

    2

    2

    6

    8

    Lanark

    1

    —

    1

    1

    —

    1

    Motherwell and Wishaw

    3

    1

    4

    13

    17

    30

    Shotts

    —

    —

    —

    2

    1

    3

    Baillieston

    —

    —

    —

    3

    5

    8

    Bridgeton

    —

    —

    —

    —

    —

    —

    Glasgow City

    —

    —

    —

    —

    —

    —

    Larkhal

    —

    —

    —

    —

    —

    —

    Glasgow South Side

    —

    —

    —

    2

    —

    2

    Govan

    —

    —

    —

    1

    —

    1

    Maryhill

    4

    —

    4

    6

    —

    6

    Parkhead

    —

    —

    —

    2

    —

    2

    Partick

    —

    —

    —

    —

    —

    —

    Rutherglen

    1

    —

    1

    —

    —

    —

    Springburn

    1

    —

    1

    —

    6

    6

    Total

    527

    17

    544

    2,003

    1,884

    3,887

    intends to do everything it can to bring to the notice of industrialists who may have suitable projects the difficulties to which he has been drawing our attention.
    Following is the table:

    Lowestoft Area
    Mr. Edward Evansasked the Minister of Labour whether he is aware of the rising incidence of unemployment in Lowestoft and in adjacent areas; and if he will give the latest figures for Lowestoft, Beccles, Bungay, and Hales-worth, with a comparison with figures in November, 1957.
    Mr. Wood: Yes, Sir. As the Answer to the second part of the Question consists of a table of figures I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Evans: Is the hon. Gentleman aware of the very grave anxiety caused in the area by the sudden steep rise in unemployment? Will he consult the President of the Board of Trade to ascertain whether Beccles and Lowestoft could be covered by the Distribution of Industry Act, from which they were specifically excluded? Is he aware of the disastrous results of the complete failure of the herring fishing season this year and the fact that very few young boys leaving school can get apprenticeships owing to the depression in the shipbuilding trade?
    Mr. Wood: The hon. Gentleman put Questions to my right hon. Friend the President of the Board of Trade recently. As he knows, the unemployment figure at Beccles is 2·9 per cent., and although it is over 4 per cent. at Lowestoft it has increased there very recently, for in July it was only 1·3 per cent. My right hon. Friend the President of the Board of Trade does not, therefore, consider that these two areas should be given assistance under the Distribution of Industry Act.
    Following is the table:

    PERSONS REGISTERING AS UNEMPLOYED AT CERTAIN EMPLOYMENT EXCHANGES IN SUFFOLK

    Area

    November, 1957

    November, 1958

    Lowestoft

    564

    817

    Beccles

    100

    120

    Bungay

    84

    100

    Southwold including Halesworth

    111

    148

    Disabled Persons
    Mr. Edward Evansasked the Minister of Labour how far the project to publish a booklet on devices and
    1186
    gadgets to help disabled persons to overcome their handicaps has progressed; and if he will ensure that the suggestion made to him that this publication should be illustrated will be given effect.
    Mr. Wood: Some material for a booklet on work aids for the disabled has been collected and employers and voluntary organisations are being asked for details of other aids which may be suitable for inclusion. It is intended that the booklet should be illustrated.
    Mr. Evans: Can the hon. Gentleman say when we may expect the booklet? How will it be distributed when it is available?
    Mr. Wood: I cannot answer the second part of the hon. Gentleman's supplementary question. With regard to the first part, we are anxious that it shall be illustrated as the result of a suggestion the hon. Member made about a year ago. Although that is not necessarily what will hold us up, our artists are very busy at the moment and it may be a little time before we can get the booklet out, but we shall do so as quickly as we can.
    Mr. McCann: Is the hon. Gentleman aware that an exhibition of these devices was recently held by the Youth Services Committee of the County Borough of Rochdale, that it created a tremendous amount of interest locally, and that it would bring a great deal of happiness to disabled persons if the devices were more widely known?
    Mr. Wood: Yes, Sir.

    Unemployment
    Mr. Sparksasked the Minister of Labour the causes which have resulted in the continuous rise in the numbers of registered unemployed.
    Mr. Wood: The increase in unemployment during the past year has been due to a variety of causes both at home and abroad. My right hon. Friends the Chancellor of the Exchequer and the President of the Board of Trade explained them during the recent debate on the Address. In recent months a large part of the increase has been due to seasonal factors.
    Mr. Sparks: Would it be correct to say that the continuous rise in unemployment in recent months is the direct result of deliberate Government policy?
    Mr. Wood: No, Sir; it would be incorrect to say that. As the hon. Member knows, a number of factors has caused the rise in unemployment, one of them, probably the most important, being the falling off in demand both at home and abroad for our products.
    Mr. Gower: Will my hon. Friend resist the implication in some of the supplementary questions put to him that there is not a real desire on the part of the Government to maintain a high level of employment? Will he also make it clear that it is in the interests of the Conservative Party to maintain full employment, as only social distress and unemployment on a high scale are likely to induce a large number of people to adopt the half-baked policies of Socialism?
    Mr. Lee: Would the hon. Gentleman agree that his right hon. Friend has on more than one occasion agreed that the increase in unemployment is due to Government policies? Is he aware that for the last hour hon. Friends of mine from all over the country have been stressing the importance of this issue, that the answers which he has given show that unemployment is rising in all the areas, and that we should need yet another hour to get through all the Questions on the Order Paper dealing with this issue? What do the Government intend to do to reduce the unemployment figures?
    Mr. Wood: My right hon. Friend has frequently stated that the measures which the Government have taken are directed to providing the highest amount of employment consistent with the avoidance of inflation. That has been our objective, and that remains our objective.
    Mr. Dudley Williams: Does my hon. Friend agree that the present standard of unemployment is well within the limits set by Lord Beveridge in his Report when deciding what was full employment?
    Mr. Jay: Is the hon. Gentleman not aware that the Minister of Labour himself said at Blackpool last autumn that the rise in unemployment was due to the Government's policies?
    Mr. Speaker: Order. We cannot have a debate on unemployment at Question Time.

    St. Helen's
    Mr. Spriggsasked the Minister of Labour the percentage increase in unemployment in St. Helen's, Lancashire, in comparison with the same period in 1956 and 1957.
    Mr. Wood: One hundred and four per cent. in both cases.
    Mr. Spriggs: Has the hon. Gentleman seen a Press statement suggesting that in the very near future a further 600 men will be made redundant in one industry in this area? Will he use his good offices to see if these men can be retained in their own industry in St. Helen's?
    Mr. Wood: I have not seen that report, but I will examine it when I see it.

QUESTIONS TO MINISTERS
Mr. V. Yates: On a point of order. There are 70 Questions to the Minister of Labour on the Order Paper, but only 40 have been answered.
Mr. G. Thomas: None about Wales.
Mr. V. Yates: Can you take some action, Mr. Speaker, to try to see that the Minister of Labour is present to answer Questions at least once before the Christmas Recess, since if we leave the situation in this way, the right hon. Gentleman will not answer Questions again until February'? All hon. Members are keenly interested in the increasing unemployment. Could some action be taken to get our Questions answered?
Mr. Speaker: I am not responsible for the number of Questions on the Order Paper. However, we should have made better progress if some supplementary questions had been shorter.
Mr. Shinwell: I also seek your guidance, Mr. Speaker. You will recall that some time ago the House decided to try the experiment of devoting two days to Colonial Questions, because of the number of such Questions which appeared on the Order Paper. In view of the large number of Questions on unemployment and since it is only in the course of seven or eight weeks that Ministry of Labour Questions appear first on the Order Paper, can we now revert to the old method of giving one day to Colonial Questions, in the normal fashion, so that

1189
Ministry of Labour Questions can be answered—at any rate, until the Government have succeeded in solving the unemployment problem?
Mr. Speaker: Those are not matters for me. They ought to be discussed through the usual channels and both sides of the House should agree on them.
Sir T. Moore: Would it he in order for me to congratulate my hon. Friend the Parliamentary Secretary on his magnificent achievement in answering Questions for 55 minutes solid?
Mr. Speaker: I do not know that it would be in order to do so.

COAL INDUSTRY (BORROWING POWERS)
3.35 p.m.
The Parliamentary Secretary to the Ministry of Power (Sir Ian Horobin): I beg to move,
That the Coal Industry Nationalisation (Borrowing Powers) Order, 1958, a draft of which was laid before this House on 25th November, be approved.
In some respects, the financial arrangements of the coal industry are unique. I must make it plain that we are not here concerned with the total borrowing of the industry. Unlike some nationalised industries, the coal industry is well within the total amount of borrowing authorised by Parliament. However, by a provision unique to nationalised industries, the coal industry has to come to Parliament if it takes more than £75 million of what it is authorised to take in any one year.
This provision was purposely made to satisfy Members on both sides of the House, certainly on this side, who felt that the coal industry merited fairly frequent consideration by Parliament. I therefore make no apology for introducing this Order. It was foreseen and it is fulfilling its purpose. The Order substitutes the figure of £130 million for that of £75 million as the maximum which the industry can take from its total.
In fairness to the industry, and to be clear about what we are doing, I must start by categorically stating that this is not deficit financing in any sense. In fact, the revenue loss this year, I am happy to say, will almost certainly be very substantially less than was feared at the beginning of the year. I remind hon. Members that the coal industry's financial year is the calendar year, while ours runs from March to March. The House will recall that the industry began its year with an accumulated deficit of approximately £30 million, and that in 1957 alone it had lost £5 minion.
It began the year with a prospect of perhaps doubling that accumulated deficit in twelve months. I need not detail the drastic steps which the National Coal Board took to deal with that serious prospect—the restrictions on recruitment, cessation of Saturday working, and various administrative economies.

1191
Again in fairness to all concerned, and in view of its fundamental importance to the industry and its financial out-turn, I must refer to the response of miners in most United Kingdom coalfields to the pleas for an improvement of productivity. Output per man-shift is fundamental to the industry and at present—we do not know whether it will continue—it is running at a record rate of about 26 cwt., as compared with the best pre-war figure of 24 cwt. It is only fair to say that the Board and the industry have met what was a very serious situation at the beginning of the year with some success.
Even with only a few weeks to go until the end of the year, it is difficult to give precise figures for the industry, but it looks as though the probable revenue loss for 1958 will not be very different from the £5 million loss of last year. Compared with the prospect at the beginning of the year, it might have been a lot worse. It is only fair to note that the Board has been assisted this year by a nonrecurring Income Tax windfall. I know that some hon. Members opposite do not like the Government taking credit for good luck, but perhaps they will not mind the Coal Board doing so. Anybody who can get money out of the Inland Revenue without actually going to prison is a friend of mine. [HON. MEMBERS: "Oh."] The Coal Board has, in fact—
Mr. Emrys Hughes: On a point of order. The last remark of the Parliamentary Secretary was hardly heard in this part of the House. Could it be repeated?
Sir I. Horobin: I do not think that it needs repetition. Most hon. Members heard it, and seemed to find it somewhat encouraging.
The Coal Board has, in one way or another, got through this year very much better—
Mr. Alfred Robens: Having made that gaff, will the Parliamentary Secretary return to the point he was making, which he has not yet finished? He was about to tell us of a windfall which the Coal Board got by receiving an Income Tax repayment. The Board had provided for Income Tax payments which must necessarily have been part of its previous deficit. The Parliamentary Secretary might be good enough to
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explain that this is not money from heaven. [HON. MEMBERS: "Oh."] Oh, yes; it has already been provided for in the losses of the Coal Board, about which hon. Members opposite have had so much to say.
Sir I. Horobin: The point is quite plain to everybody, even to the right hon. Member. The deficit this year would have been bigger if it had not been for the very satisfactory fact that the Board has succeeded in getting money which it had had to put aside for Income Tax. The figures will be given, as usual, in the Board's accounts, when they are published [HON. MEMBERS: "What are they?"] I do not know what all this fuss is about.
Mr. Robens: Shall I explain?
Sir I. Horobin: The Board's financial position this year is very much more satisfactory than anyone thought it would be, partly, but not solely, or even mainly, because certain provisions for Income Tax will no longer be necessary.
I now come to the breakdown of the £130 million for which we are now asking. First, we have to allow for an increase in stocks. In the Order we have allowed for £57 million, which will finance an increase, since April, of an extra 13 million tons of coal and 2 million tons of coke, with a possible further rise of 3 million tons of coal, for which we have thought it prudent to allow.
At this point I ought to make it clear that we have satisfied ourselves that the valuation which the Board puts upon the stocks is a prudent one. It is sometimes suggested that proper allowances have not been made for laying down, picking up, de-gradation, and so on. We have allowed for a capital investment of £108 million, which is not greatly different from the figure for the previous year. These two sums together make the £165 million needed, but we estimate that the Board will be able to make available, from its internal funds, about £35 million, mainly in depreciation, and the difference between the £165 million and the £35 million which it will be able to get from its internal resources accounts for the £130 million in the Order.
Before I leave this purely arithmetical part of my task I would remind the House that in calculating ahead, even

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for four months, as we are doing here, we cannot be very accurate, for the reason which I have pointed out on previous occasions, namely, that the position of the Board fluctuates in the most extraordinary manner. There may be a fluctuation of between £30 million and £40 million in the course of a fortnight, for reasons which are not material. It will, therefore, be seen that we must leave a certain margin for contingencies.
So much for the arithmetic of the Order.
Mr. Gerald Nabarro: May I ask my hon. Friend an arithmetical question? It was announced three hours ago, in a Press statement from Sir James Bowman's office, that a wage increase equal to 7s. 6d. a week has been awarded to 350,000 men in the industry. I am not disputing whether that award is right or wrong, but the cost will be about £10 million per annum. Does my hon. Friend's arithmetic take account of the incidence of that one increase during the remainder of this financial year?
Sir I. Horobin: I hope that I may be allowed to continue my exposition. Most of the points being raised are fairly well known, and they will be considered in the course of my speech. If I have to keep giving way I shall detain the House for a much longer time than I wish to do—and I would prefer to deal with the points in a certain order.
Having started by pointing out that the need for the Order stems largely from stocks, I ought to say something about the stock problem itself. It has sometimes been suggested that the Board and the Minister were too late in appreciating the very rapid change which took place in the coal industry position this year and last year.
I would put it simply in this way. In 1955, we were importing over 11 million tons of coal, over 4 million tons of which were going to power stations. The landed value of that coal was £70 million. Even in 1956 we were importing between 5 m Ilion and 6 million tons, which cost the Board about £17 million. It was not until 1957 that a very serious shortage of coal began to disappear. It was early in the summer of that year that steps were first taken by the Ministry to endeavour to renegotiate the contracts for oil used in power stations, which had been entered
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into when the power position was as serious as the figures I have given indicate.
Early in 1958 the Board began to take steps—which could not have been taken without much consideration—to cut down production. Therefore, in fairness to all concerned we must realise that if we complain that the steps should have been taken earlier—and looking back I think that they might have been taken a few months earlier—we are 'talking of a period of only six months in which to alter the whole basis upon which the coal industry has been working for ten years. We cannot criticise the Board or the Government for taking that period of time to investigate and consider a fundamental change which, even when it is made, provokes very serious and natural repercussions. No change could possibly have been considered earlier than the first half of 1957, and the most drastic steps were taken in the winter of 1957–58.
My next point about stocks is that there is a good deal of exaggeration in the views sometimes expressed. To begin with, they amount to four weeks' production undistributed. They are less than in the European Coal and Steel Community; and less than half of the stocks of things like rubber, timber, cotton and so on. In the matter of coal we have become used for so many years to living in hand-to-mouth fashion that sometimes we take quite an exaggerated and unbalanced attitude towards having available a few weeks' supply of that valuable commodity. I repeat that these stocks are a valuable asset. They require financing, but they are extremely valuable.
What I have to say about stocks may be put most clearly in this way. Would the country rather have stocks of a few weeks' supply, rising output per man-shift and a small profit, or a situation such as exists in Scotland, where there are no stocks, a falling output per man-shift and a coalfield which is costing the Coal Board £1 million a month? We should not take an unreasonable attitude towards the policy of the Coal Board, which is allowing a certain rise in stocks in this country. That does not alter the fact that there is now a gap between demand and supply. Exports are substantially down, but, nevertheless, demand, which is always particularly important to the coal industry, is down.

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There is no denying the fact that an increase in coal prices has priced the industry out of several markets. I will give one illustration. It is by no means the strongest, but it will show what I have in mind, and, clearly, it has nothing at all to do with a recession. Deliveries of house coal in the London area in the last four years have fallen by about one-third. This is not due to any recession, but to people choosing alternative sources of fuel for various reasons.
Mr. William Hamilton: Distribution costs account for half the total price.
Sir I. Horobin: That may well be, but we must not take the view that people will still buy coal at any price.
Mr. Robens: That also applies to electricity.
Sir I. Horobin: To some extent.
I am pointing out that people will no longer buy coal at any price. It is not a monopoly, and the industry must carefully consider its competitive position.
Let us see what this boils down to in terms of the prospects for 1959. With the best will in the world, we cannot be tied down to the odd million tons, but the most careful estimate which the Coal Board and the Ministry can make is that the total demand in 1959 will probably be about 200 million tons. If nothing were done, and things went on just as they are, the total coal production in this country would be about 209 million tons.
Mr. Robens: Deep mined?
Sir I. Horobin: No, that is the total. In other words, if nothing were done, stocks would rise by another 9 million tons, and that, of course, is quite unacceptable.
If that be so, the first point which arises is: can anything be done to increase demand? We cannot enter into a general economic debate now—even though it is not Question Time. I shall go no further than refer to the fact that, rightly or wrongly—this is outside the scope of this debate and my Department—the Government have a great many measures under consideration, and are pledged to the view and policy that such conditions of recession as exist—not only in this
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country, but elsewhere—are of a temporary nature; and we do not feel that the situation calls for the taking of any panic measures.
Apart from that, the suggestion is frequently made that a direct step to increase the demand for coal should be taken by making it over-expensive or impossible to use alternative fuels, particularly oil. The Government feel very strongly that any action of that sort would not be in the best interests of British industry. People do not move from the use of coal to the use of oil for fun. If the use of oil in any industrial process is the most economical way to carry out that process, it would be a most dangerous thing, in our opinion, to increase the difficulties facing our great export industries by adding in any way to their net fuel costs.
If we cannot increase the demand for coal, what can we do about production, to bring it into balance? I think that there are three criteria, if I may so put it, that we ought to have in mind in laying down any production policy. The first, and perhaps the most important in the interests of everyone, is that any policy should, so far as possible, improve the financial position of the industry, and thereby improve its competitive position. It is for that reason that one cannot, for instance, contemplate a further general increase in coal prices.
Remarkable advances have been made by some of our competitors in improving their production efficiency. In America —admittedly, the geological conditions, and so on, are very different—the daily output per man has increased by over 60 per cent, during the last ten years; with the result that the price at pithead has remained practically stable while our price has more than doubled. I am not making a point about whether anybody is to blame for that. It is fact. We are competitors their price has remained stable; ours has gone up.
It may interest the House to refer to some recent events in Germany, another of our great competitors. There, it will be seen that their problem and their way of dealing with it is similar to ours. Only last week the Ruhr coal industry formally decided to suspend recruitment. The numbers employed have fallen drastically and their output per man-shift has gone

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up by about 6 per cent. That is the first point. Anything we do must, if possible, improve the competitive and financial position of the coal industry.
The other two things will not take me so long to deal with, but they are important. In reducing its output to deal with this temporary situation, the coal industry should be careful not to reduce output to such an extent that it cannot be increased later, so that we run into a coal shortage again, with all that that implies. The other thing—here I am sure that I shall carry everyone with me—is that so far as possible, and to the fullest extent, any changes should minimise social disturbances both from the point of view of unemployment and the amenities of the countryside.
If these are the broad lines on which we should move in dealing with a situation where output looks like being about 9 million tons more than demand in the corning year, how does the Coal Board and the Minister envisage policy in the next twelve months? I feel that this is the line upon which our discussions should proceed this afternoon. There can be little doubt that the money must be forthcoming. I cannot imagine that anyone would vote against it. What the House and the country wish to know is what the Board will do with the money, and how the Board proposes to run the industry if it gets it.
Manpower has been reduced already from an approximate figure of 712,000 to under 690,000, and that decline will continue. Fortunately, as I pointed out in an earlier debate, broadly speaking, that can be done, and is being done, without redundancy, because, naturally, wastage in the industry is high; so that merely by holding back on recruitment we can achieve the level we require. I want to point out that the present total is still appreciably greater than the original estimate the Coal Board had for 1960 of 682,000.
So much for manpower. I come to the question of opencast working. Opencast working is far and away the cheapest and generally the most profitable of all the ways open to the Coal Board for getting coal. The average profit is about 14s. a ton, and output per man-shift is 50 per cent. better than in the best divisions, deep-mined, and nearly five times the national average. Therefore, in the light
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of what I have said about the importance of preserving the financial position, one can appreciate the Coal Board's anxiety in this respect.
The next thing about opencast is that we cannot turn it on and off like a tap. Companies have come in employing most expensive and heavy specialised machines which are practically useless for doing anything else. In the light of the principle I was enunciating earlier, of ensuring that we are in a position to boost production later if we need to, we must be sure that we do not wreck the opencast industry. I could, of course, elaborate on all these things, but I do not want to keep the House too long in surveying the whole field. The great bulk of next year's output is, in any case, largely covered by strict commercial contracts. I do not think that anyone in the House would lightly ask the Coal Board, or anyone else, to embark on a policy of breaking contracts.
Finally, and this is of some importance, there are 12,000 men engaged in opencast coal and their jobs are as sacred as those of anyone else. Nevertheless, as we all know—and I need not enunciate them—there are on both sides of the House very grave objections to opencast working. I shall not enumerate them. On a balance of advantage, the Coal Board proposes, with the utmost approval, that opencast production next year shall be cut to about 11 million tons, which is a cut of nearly one quarter.
Sir Albert Braithwaite: Shame.
Mr. Nabarro: It is a jolly good thing.
Sir I. Horobin: I think that other hon. Members might make their speeches later.
Mr. Roy Mason: Is that not what would happen in any case? Will there not be a slowing down of opencast working because it will be more difficult to get authorisations under the Opencast Coal Act?
Sir I. Horobin: No, that is very exaggerated.
Passing from manpower and opencast working, I come to the closure of certain high cost pits. Next year, the Coal Board proposes to close an additional 36 collieries. That is over and above those which will be coming to an end any way

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as part of the long term programme. Broadly speaking, they are collieries which cannot be made economic. The number of men affected will be approximately 12,000. Of those, I am very happy to say—I got the very latest figure only a few hours before this debate —the Coal Board says that it will be able to find immediate jobs for two-thirds.
I think that that is much more satisfactory than some people may perhaps have feared. For those who cannot get jobs, redundancy compensation up to 26 weeks will be provided. The details of that, of course, are a matter for the Coal Board and I shall not go into them.
Mr. Hamilton: Could the hon. Gentleman break down the number into areas?
Sir I. Horobin: I think that the details of the redundancy compensation had better be left to the Coal Board. That is primarily a matter for the Board, which does, in fact, propose to make redundancy compensation payable up to 26 weeks. If hon. Members opposite would like more details, I shall see that they are given by my right hon. Friend in the winding-up speech.
Mr. Robens: Apart from the details, I am wondering whether this is a special redundancy scheme, as there is already a redundancy scheme provided for 26 weeks.
Sir I. Horobin: Whether this will vary from the existing one I do not know. I have not seen the details beyond the statement that the Board undertakes to do that. Whether it will be more attractive I should not like to say.
Mr. A. Woodburn: I understand from rumours that a great deal of this redundancy is to occur in Scotland, that more pits are to be closed in Scotland than anywhere else. Can the hon. Gentleman give us any information about that?
Sir I. Horobin: I have a long list of pits, but I think that the details about that are primarily a matter for the Coal Board.
Mr. James Griffiths: The Parliamentary Secretary has said that 36 collieries are to be closed. If he says no more than that he will appreciate that the B.B.C. will broadcast the news
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all over the coalfields in an hour or two and that there will be fear everywhere. Are we to understand that he is not going to tell us where these pits are which are to be closed? Does he realise that there will be deep concern? It has been rumoured that South Wales and Scotland will be badly hit. Does he realise that in my area 8 per cent. to 9 per cent, of the men are already unemployed and this is a matter of great importance? Do the Government consider that they have a responsibility for finding alternative employment for men put out of work?
Sir I. Horobin: I do not think we can get into a general debate on unemployment. What I am putting to the House is the broad outlines of the policy the Coal Board has agreed with the Government for dealing with the situation. What I want to draw the attention of the House to, before leaving this part of the survey, is the extreme degree of uneconomicalness—if I may coin a horrible word—of some of these pits. One I have in mind, for instance, lost last year over 63s. a ton. [HON. MEMBERS: "Where is that?"] Another lost 64s. a ton. [HON. MEMBERS: "Where is that?"] That is not relevant to the argument I am putting. When a pit is losing 60s. a ton on coal it makes no difference if it is in Scotland, South Wales or Lancashire.
Hon. Members: Of course it does.
Mr. Robens: Will the hon. Gentleman tell us whether the pits are producing good coking coal?
Sir I. Horobin: These I have mentioned are producing general purpose coal.
Mr. Robens: Will the hon. Gentleman permit another interruption?
Sir I. Horobin: I have given way a great deal.
Mr. Robens: That is only because the Parliamentary Secretary is confusing all of us who have some knowledge of the industry by the statements he is making. He must know that losses of coal production are justified by shortage of a particular kind of coal. That is why we are anxious to know what kind of coal is being produced at these pits.
Mr. Geoffrey Hirst: Losses are never justified.
Mr. Robens: Losses are justified if they have to be produced to maintain the steel industry. I would not expect the hon. Member to understand that, because the greatest contribution he makes is that of sitting grinning like a jackanapes and acting in that stupid way.
The statements made by the Parliamentary Secretary are very serious to those representing coal mining areas. When he brings forward the loss of 63s. a ton as justification for closing a pit it is natural to ask where the pit is and what kind of coal it produces.
Sir I. Horobin: I cannot, offhand, answer that long intervention—[HON. MEMBERS: "Oh!"] I do not think that we want this ill-feeling. Everything I have said is perfectly factual. These are pits producing general purpose coal. The Coal Board which, after all, is a nationalised body, ought to know. I am merely stating that the Board has had to pick out some of the pits that are incurring quite impossible losses. I am merely stating a fact and not blaming anyone at all—not the workers in the pits or anyone else. These are simple facts which the Coal Board has to face.
All the pits that I have mentioned are general purpose pits. One is making a loss of over 60s. a ton, another 64s. a ton, another 60s. a ton, another 65s. a ton, and of two—I shall not pursue this, because these are anthracite pits—one is losing 87s. a ton and the other 90s. a ton. Ignoring the anthracite ones, these are general purpose pits that are losing these very large sums. Six pits lost £2 million between them in the last twelve months. That is a fact, and one cannot get away from it. I cannot say that the Coal Board, faced with this difficult situation, is not right in saying that a contribution towards this problem must come —only a contribution —from closing some of these grossly uneconomic collieries.
Mr. Tom Brown: What is worrying me at the moment is that we are embarking on a very serious era and the hon. Gentleman is keeping back, definitely and specifically, information which would be of value to us. If there is some purpose in maintaining a high degree of secrecy over the names of these pits, will he tell us what it is?
Sir I. Horobin: The only reason that I have in mind is that of courtesy to the Coal Board. I was proposing immediately I had sat down to find out whether the Coal Board has any objection to the announcement of the names of these pits. I feel that it is simply a matter of confidence with the Board. I have not yet acquired from the Board consent to announce the names, but I cannot imagine that there will be any difficulty. If there is none, as soon as I can get the matter cleared up with the Coal Board, my right hon. Friend will either announce it in his winding-up speech, or possibly the Coal Board will itself announce it this afternoon. I think that that is fair enough. There is no question of secrecy about the information. It is purely a matter of proper courtesy and confidence with the Coal Board.
To sum up this matter of policy, it boils down to this. We had to find 9 million tons and we are finding it roughly in three bits—3 million tons from closures, 3 million tons from a cut in opencast and 3 million tons which we are expecting will have to be added to stocks. So much for that. I am leaving out some of what I intended to say because I have been rather delayed and I will now come straight to another point.
Here, I take up the point put by my hon. Friend the Member for Kidderminster (Mr. Nabarro), of the award which we have only just heard. I ought to say to the House that when these measures were discussed between the Coal Board and Her Majesty's Government it appeared that, provided there was co-operation from all concerned and productivity continued to improve—as of course it should with the very large sums being invested in the industry—and provided that no further burdens fell on the Board, there was at least some prospect of avoiding substantial losses in the coming year.
We have today heard the announcement of the new wage award, the direct effect of which—and for once I do not quarrel with the figures of my hon. Friend, though I often do—will be to increase the Board's costs by perhaps about £10 million in the next year. The Board will need to consider how it is to meet this new situation, but, clearly, it underlines the need for co-operation on

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the part of all engaged in the industry to increase still further its productivity if the Coal Board is to be able to avoid unpleasant measures which cannot be long delayed, for any general rise in the price of coal, even if that were acceptable, would be liable to defeat its own object.
There is one important matter which I should refer to in outlining the position of the Board and the Government to the House. That is the question of capital expenditure. The House will remember that £108 million of this sum which we are talking about is for long-term capital investment. It is often asked—and I have inquired into it very carefully myself since I have been in the Ministry —whether the present scale of long-term capital investment in the industry is any longer realistic.
It is certainly no longer realistic to expect the demand for coal to go up to the higher figures which were envisaged in the Coal Board's last investment programme. The Board is now making a review of its present investment programme from the point of view, agreed with Her Majesty's Government, that the emphasis now must be on productivity and not on production. We must bear in mind that it is only comparatively recently that investment in the coal industry has been anything like a proper figure. From 1947 to 1951—and, again, I am not at this stage criticising anyone; I am merely stating the fact—investment in the coal industry averaged only £27 million a year, which is completely inadequate on any basis. [HON. MEMBERS: "Hear, hear."] Do not let us get into politics.
Whatever we think about it, that fact remains. Between 1947 and 1951—we can have our own views whether it ought to have been more or could have been more—the coal industry had only the derisory sum, on average, of £27 million a year.
Since 1952 and up to date that average has gone up from £27 million to £85 million. I do not think that anyone can establish the view that the "wicked" Tory Government have been starving the industry.
Mr. Nabarro: That is just my point.
Sir I. Horobin: When we consider whether this can now be cut, we have to
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bear in mind one or two developments. First, the original plan assumed continuance of full opencast workings, the continuance of Saturday working and very limited closure of these very uneconomic high cost pits. Although the original figures of production are no longer realistic, many of them would not have happened anyway, because of the changes that have taken place in these three respects. The original plan provided that about three-quarters of production would be from modern collieries. All that amount, on any calculation of probable demand, will still be required.
Having given perhaps some depressing figures for certain collieries, I should now like to give more encouraging figures for other collieries. It must be appreciated that a very great deal of improvement has occurred in collieries in which large sums of money have been invested. I hope that I shall not in any case be asked to give the names here, because that might be invidious. There is a colliery—I will go so far as to say that it is in Scotland —where the O.M.S., before substantial schemes were carried out, was the shocking figure of 14·4 cwt, and, afterwards, it was 24·6 cwt., nearly double. There is a new pit, where the present O.M.S. is as high as 50 cwt. In another pit it is as high as 64 cwt. and in another the O.M.S. has risen from 28·9 cwt., before the work was done, to 47·3 cwt.
The point which I make is, first, that a large amount of continued capital investment must go into the coal industry even though we no longer expect to need such a large amount of coal and, secondly, that there is substantial evidence, at any rate in certain parts of the country—I will put it no higher than that—that where we have spent a lot of money we have had good results. [HON. MEMBERS: "Hear, hear."] I am glad that that meets with the approval of hon. Members opposite, but the next point which I am about to make may not be quite as acceptable to them. If we are to face, as I think we probably shall have to face, a smaller demand for coal than we originally expected, the sensible thing is not to cut the capital investment in the economic pits but to speed up the closing of the uneconomic pits.
I have taken rather longer than I intended. I have attempted to give a reasonably balanced picture of how the coal industry and the Government face

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this very serious problem. In conclusion, I am absolutely convinced that the future of this industry, and, indeed, the future of the country, in which for many years it must contribute the major part of our fuel supply, depends on increasing its productivity quickly. There is no hope of doing that if the industry is torn by fratricidal struggles. Only by the cooperation of all concerned can the present level of output be continued and improved.
If that is done, while I have no doubt that we shall have many difficult years ahead of us, I believe that there is hope for a perhaps smaller but more efficient coal industry in filling a vital part in the country's economy. I believe that the money which I am asking Parliament to authorise today will be well spent if devoted to that end.
4.22 p.m.
Mr. Alfred Robens: There has never been any lack on this side of the House of enthusiasm for increasing production and increasing efficiency in the coal mines. I would, however, add one further point, perhaps the most important, to what the Parliamentary Secretary said at the end of his speech about the importance of increased production. He must not forget that the way in which to get increased production in this industry, as in most others, is to maintain the confidence of the people working in it, to let them know that they are in an industry which will provide them with security of employment over many years.
That is particularly so in the coal industry, where miners are recruited only from miners' homes. We cannot look to the whole of the United Kingdom for recruits to the mining industry—only to miners' homes; and when we say a few words about the pit closures there are some aspects to which we shall have to draw the Parliamentary Secretary's attention.
The Parliamentary Secretary began by telling us that output per man-shift had improved considerably, and we were glad to hear the latest figure of 26 cwt. which he gave us. Later, he confused a number of us by talking about the deficits and surpluses of the Board. In a newspaper report last week there was a suggestion that the Government were being asked to subsidise the mining industry, and I thought that the Parliamentary Secretary
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would perhaps put it on record that this is not an industry which has been subsidised in any way, nor is it asking to be subsidised. It is paying its way and carrying out its statutory obligations. The fact that it has deficits today is due very largely to circumstances imposed upon it by reason of Government policy.
That is why I was particularly quick, if I may say so, without being offensive to the Parliamentary Secretary, to jump to my feet when he talked rather airily about the mysterious windfall which had come from the Inland Revenue. He did not tell us how much it was, nor do I know how much it was, but he said that this year, instead of having a very large deficit, the Board might have a deficit of only £5 million, but we were very lucky in this because we had had a windfall. He said that some money which had been placed presumably on one side to pay taxation has no longer to be used for that purpose, by whatever arrangements have been made, and, therefore, it has been brought back into the accounts. That is the situation as I understand it.
But if it is now to be brought back into the accounts, it is not a windfall. Provision has been made for it and it must have appeared at some stage in the past years, when the fund has been accumulated, as a deficit in the years when we were running a deficit or as a reduction of the surplus in the years when we were running a surplus.
I am glad that I provided myself with these figures; I did not think that they would be required, but in view of what the Parliamentary Secretary said it is worth noting that the net deficit is about £28·9 million. The Parliamentary Secretary said that it is £30 million, which probably includes this year's figures. I calculate the deficits to be £61·7 million in the years when we have had deficits and the surpluses to be £32·8 million, giving a net deficit of £28·9 million.
The losses on imported coal were £71 million, and they were imposed upon the Coal Board by the Government. It was never the business of the Board to act as an importer of coal. When the coal industry had to buy steel abroad because the British steel industry was unable to supply the steel which it wanted, it had to pay the increased cost of foreign steel, but when the steel industry wanted coal the Coal Board bought the coal from

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the United States and subsidised it in order to sell it to the steel industry at home-produced prices. We must, therefore, take into account, when looking at the overall figures, that there was an enormous loss of £71 million due entirely to Government policy and not to Coal Board policy.
Sir I. Horobin: If the right hon. Gentleman intends to take into account the losses on imported coal, then to keep the record straight he should also take into account the profits on exports. Over the years, considering all its trade in imports and exports, the Coal Board made a very substantial profit.
Mr. Robens: That is where the Parliamentary Secretary is wrong. It is part of the function of the coal trade, and has been for 100 years, to export coal; it has never been a coal importer. Its function is to dig coal here and to sell it both here and abroad. The importation of coal has been artificially brought about by circumstances which have never occurred in this country before, except during the 1926 General Strike, when Polish coal was imported but for a very different reason. The Parliamentary Secretary shakes his head. Can he, then, explain to me why the steel industry should not have paid the imported price for its coal if the Coal Board had to pay the imported price for its steel?
Sir I. Horobin: I am not talking about steel. I am talking about coal, and I am simply putting the record straight. This question of loss on imports was raised by the right hon. Gentleman and not by me. I have made no reference to it. The right hon. Gentleman said that a deficit has been accumulated over the years, but that we ought not to regard that as a correct statement of the financial position because many losses were made when we could not produce enough coal and had to import some. I merely make the obvious comment that, if we do that, then we must, in fairness, bear in mind the other side of the account—the profits when we export coal.
Mr. Robens: I will leave it to the record and to people to judge. All I say is that the Coal Board was compelled by Government order to do a job which it is not obliged under Statute to do—to import coal at a loss. It was prevented
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from passing on the loss. I will leave the point there, except to say that the whole of the outgoings of the Coal Board, all its obligations to the former coal owners in interest and the interest on its borrowing, have been fully met. That has been done throughout the period in which the Board has been in operation.
If he had taken into consideration the artificial loss on imported coal, the Parliamentary Secretary would have told us today that after ten years of operation the Coal Board was showing a surplus of £40 million. To that extent these borrowings would not have been necessary, because the Board could have self-financed itself to the extent of £40 million, plus the £35 million about which the Parliamentary Secretary spoke, giving, £75 million of self-financing.
I make these points only to keep the record straight. I am only sorry that the Parliamentary Secretary himself did not feel it right to reply to a good deal of the uninformed criticism, coming both from outside and from his own benches behind him, which continually tries to label the Coal Board as a subsidised industry, which is not what it is at all—
Sir William Robson Brown: The right hon. Gentleman has mentioned the steel trade. Would he state the tonnage of imported steel that the Coal Board was compelled to bring into the country? Would he say whether it bore any relation to the overall value of the imported coal? I submit that it was infinitesimal. Would he also admit that if we had had the level of output that we have today we might well not have wanted to import coal at all, but could have financed it ourselves without harm to the balance of payments?
Finally—and I am speaking slowly, because these are important matters—would he not also admit that if the Coal Board has the power, the absolute monopoly in the control of price and supply of coal, it also has responsibility to maintain supplies? Private industry was for years quite prepared to buy its own coal from outside, but was prevented from doing so.
Mr. Robens: The point that I am making is simple enough. It is that the Coal Board subsidised the price of coal for the steel industry, but had to pay

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higher prices for foreign steel when our private steel industry could not provide the steel from its own production.
What the Parliamentary Secretary has told us today is that about £57 million is required for stocks; £108 million for capital investment—a total of £165 million—but that as the Coal Board is providing £35 million, we are invited to agree to the amount shown in the Order. I say immediately, on behalf of this side of the House, that we accept the suggestion and approve these extra borrowing powers.
It is, however, what the new pattern of the industry is to be that attracts our attention much more than the arguments that the hon. Gentleman has used in defence of the increased borrowing powers. Not one single word of his argument about the necessity for stocks need have been addressed to this side, because we put forward the same arguments in July last, and we made them during the debate on the Gracious Speech.
We then made it perfectly clear that we thought that stocking was right, but, recognising that there would come a time when it would be quite physically impossible to continue stocking, because stocking grounds would not be available anywhere, we asked what was to be the pattern for the future. Therefore, this long argument justifying the capital invested in stocks must be addressed elsewhere—certainly not to this side of the House.
As I understand the Parliamentary Secretary, we shall have a surplus of supply over demand of 9 million tons next year. The proposal of the Coal Board, which, presumably, the Government are now underwriting, is that opencast production will be cut back by 3 million tons; the closure of pits will account for, roughly, another 3 million tons, and that the Board will agree to the stocking of a further 3 million tons, thus equating demand with supply.
When we last debated the coal industry, the Parliamentary Secretary referred to the competition from oil, and he made a slight reference to it today, in which he has, again, vehemently laid down the doctrine that consumers, whether industrial or private, must be perfectly free to have the fuel of their choice; that competition must be the deciding factor as to
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who gets the business. I shall come back to that a little later, but there are, of course, two reasons for the present sate of the coal industry.
The first is competition from oil. The increase in the amount of oil used is far higher than was originally estimated when the long-scale plans and estimates were made for our fuel requirements. Speaking from memory, the estimate was of a fuel requirement of about 310 million tons of coal equivalent by 1965. Those figures have to be revised, with the figure for indigenous coal coming down rather heavily, and the oil proportion of our coal-equivalent fuel requirements increasing rather more quickly than was thought would be so at the time when the estimates were made.
The second reason for this peculiar position in the fuel and power industry as a whole—of which coal is part—is, undoubtedly, the stagnation of production. This is Government policy. I do not have to quote from HANSARD. It has been announced by more than one Chancellor of the Exchequer and by other Ministers, from the Treasury Bench, that production was permitted, indeed, was compelled, to come down to prevent inflation. That is the choice that was made, but as we are not now having an economic debate we are not discussing whether it was right or wrong.
What we do say is that the Parliamentary Secretary cannot escape from the fact that one of the two reasons for the decline in the use of indigenous coal is that Government policy created stagnation in industry. It is very interesting to note that the surplus of 9 million tons with which we are concerned is almost accounted for, comparing 1956 with 1958, by the reduction in the demands of the steel industry of 1·7 million tons; coke ovens, 1·1 million tons; railways, 1·9 million tons; while the reduction in the demand of industry generally is 4 million tons. That makes a total of 8·7 million tons, of which 4·7 million tons is in those three industries that have relied upon the coal industry very extensively—,steel, coke ovens and railways—
Mr. Nabarro Mr. Nabarro rose—
Mr. Robens: I will give way if what the hon. Gentleman wants to say is germane, but I may say that I will not make any more of this except just to say that

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the stagnation in production has undoubtedly reduced the need for the amount of coal we estimated that we should need.
All or most of the estimates have been based very largely on an average increase in production of 3 per cent. per annum. It was on that figure that the Lord Privy Seal based his famous pronouncement of a few years ago that we were to double the standard of living in twenty-five years. It is because we have not increased production at the rate of 3 per cent. per annum—and the figures that I have given merely indicate it in tons of coal—that we have the present situation.
What I say to the Parliamentary Secretary and to the Government is that this problem of surplus production need not—must not—be at the expense of the miners in terms of unemployment and short-time working. We on this side stand for full employment not merely as a symbol, not merely as a figure of speech from a political platform, but because we believe that full employment is fundamental to our economic prosperity and to the happiness of our people.
Therefore, when looking at the problem of over-production of coal, we say that the answer cannot lie in putting this burden upon the miner, either by unemployment or by short-time working. Month after month, year after year, for ten years, in the mining constituencies, in this House, from public platformseverywhere—we have been urging and encouraging our miners to produce more coal. We have been telling them—and I am as guilty of this as anybody—
Mr. J. Griffiths: And the young men went back to the mines.
Mr. Robens: Exactly. We told the miners that the demand was more than they could possibly meet in a lifetime. As my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) has said, we have encouraged miners' sons not to teach in the schools but to go back into the mines, to become technicians, mine managers, and the like. We have been doing this for ten years. The Government cannot come here today and simply say that 12,000 or 14,000 men are to be affected by some pit closures, and expect the mining industry to take it as calmly as the Parliamentary Secretary thought it
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might when he said that it is only a little contribution. It is a little contribution if one is not one of the 12,000 or 14,000, but it is a very big contribution if one is.
Sir A. Braithwaite: I am obliged to the right hon. Gentleman for giving way. I am sure that he would be the last Member in the House to advocate the production of coal which was entirely uneconomic, and that he appreciates that there are phases of production which are uneconomic, and should be cut out, because they are at present to the detriment of the Coal Board. What we all want to see is that the Coal Board is successful, but the Board cannot carry people; everyone must pull his weight and make the industry prosperous.
Mr. Robens: The hon. Gentleman can be satisfied that I shall not leave the question of uneconomic pits alone. I am making this position clear.
I say that we cannot suddenly, overnight, change a 10-year policy of full employment and encouragement to get the last ounce. These miners agreed to work Saturday morning shifts and they worked longer hours than any miners in Europe. They gave up a week's holiday. Instead of taking their full holiday, they sacrificed a week. In every sort of way miners have been encouraged to dig as much coal as possible.
Last July, the hon. Member for Kidderminster (Mr. Nabarro) was saying that this country needs as much coal as it could get. It is all here on the record, and others have said it. The Government cannot change—
Sir Peter Roberts Sir Peter Roberts (Sheffield, Heeley) rose—
Mr. Robens: If I may finish this point, may I say that we cannot have this quick change. Therefore, there must be rather a different approach to this question to the closure of mines.
Sir P. Roberts: I am much obliged to to right hon. Gentleman. We appreciate what he and his friends have said in encouraging recruitment in the industry over the years. I would only suggest that he might put out a warning that all this is no good if the miners are to price themselves out of the market.
Mr. Robens: I do not accept that the miners have priced themselves out of the

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market, but I am concerned with the average miner, who gets about one-third or a quarter of the income which the hon. Member receives. I would not say that that was an undue reward for working in the bowels of the earth. Personally, I would not go down into the bowels of the earth to dig coal. I would not work in a mine for what a miner is paid, nor would the hon. Member. Do not let us talk about the miners pricing themselves out of the market. The average pay of the miner is 51s. 10d. per ton, and I pay £12 per ton at my home.
Let us look at the difference between those figures and see where the money goes. It is absurd. The hon. Gentleman has been associated with the mining industry, and he knows full well the conditions of that industry. This is not a question of miners pricing themselves out of the industry. The miners are getting a fair return for the work they put into the mining of coal, and if the hon. Gentleman does not think so let him send his sons or relatives into the mines, where they will be very gladly received. We know that he will not do so, because they will be put into a much better, cushier job and earn a good deal more.
When the Parliamentary Secretary tells us that the miners are now increasing their output to 26 cwt. per man-shift I say that that is the sort of encouragement that is required. The miners will go on increasing their output to meet the needs of the country, and, in a period of mechanisation, have welcomed that mechanisation and the introduction of new machines into the mines. We cannot say that of any other industry. The miners have welcomed the machines, and have done everything they possibly could to increase output per man-shift. I repeat what I have said before—that the British miner has given British industry the cheapest coal in Europe. He cannot do more than that.
Mr. J. Griffiths: And given it particularly to the steel owners.
Mr. Robens: I resent very much this attack on men who work down in the bowels of the earth in an industry which is not pleasant in any circumstances for the wages they get. It would be a very bad thing for the country if we failed to maintain the capacity of the mining
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industry at a high rate, merely because. of this stagnation which the Government themselves have produced. It would be foolish to run the other way and drag down the capacity. Who knows when the Middle East oil will be stopped next?
Mr. Griffiths: If we have another Suez, what then?
Mr. Robens: People should read Randolph Churchill today. If the mining industry is now to be panicked into reducing its capacity the country will be in a very sad way indeed if there is an interruption of supplies of oil. We cannot run the other way.
I approve very much of what the Parliamentary Secretary said when advocating the use of £108 million, which, I think he said, is a further investment in the industry. We ought to know, and I am surprised that the Parliamentary Secretary did not tell us, what is the position of the coal industry now and what are the energy requirements of the country. Mining is not like an industry in which one can put on more machines to increase production or in which you can turn off production like a tap. The capacity has to be there, the face room has to be there and it is not possible, therefore, to have the flexibility at the speed which we can get it in an ordinary engineering industry.
The industry as a whole ought to know where it stands. We are probably not now thinking in terms of 240 million tons maximum which was estimated some years ago in the coal plan, but is it 240 million tons, 220 million tons, 200 million tons, or even 180 million tons? Surely the industry must know, and must be protected to this extent. If it is told that the figure is either 200 million tons or 210 million tons, the industry can safely invest and organise its manpower and everything else to produce that amount for the country. It seems to me that the Government must look again at their fuel and power policy, and determine just what position the mining industry is to occupy in our economy as a whole.
Now we come to the question of the closing of pits. The Parliamentary Secretary addressed our attention very properly to the fact that the pits which have been closed are pits which would have been closed any way, either because

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of the shortness of their lives—and I doubt whether some of them had a life of not more than five years—because of the exhaustion of their reserves, or because they are high-cost pits. Quite frankly, I would not dream of saying that we should maintain high-cost pits at any price, but the truth is that on vesting day, over half of the pits taken over were losing money.
If we had been merely looking at surpluses, we would have shut down half the pits, and the country would have gone bankrupt. But these high-cost pits were maintained only and solely for the reason that the coal they were producing was necessary. The hon. Member for Shipley (Mr. Hirst), who interrupted me earlier, is not now in his place, which is a pity, because he might have learned something. It was essential to maintain these high-cost pits in production because the coal was more valuable than the money which was lost.
Now, however, we have come to a different stage—the stage when capacity is no longer required, and we look round and consider how we can get rid of 3 million tons of surplus capacity. It is very proper, in the circumstances, to look at the high-cost pits, and, having looked at them, the Parliamentary Secretary tells us that there are 30 or 36 of them and that 12,000 or 14,000 men are likely to be affected. He then gave us the rather good news, at this stage, that only about a quarter of these men are likely to find themselves redundant, that about 9,000 of them will, presumably, he transferred.
Sir I. Horobin: I said about one-third. I think that the figure of redundancies will be between 3,000 and 4,000.
Mr. Robens: Obviously, the figures are in the air at the moment. We could say that about like 8,000 men will be found employment out of the 12,000, and about 4,000 will be redundant. It may be that a large number of men are over retirement age and that wastage, and so on, will take care of a good deal of these. But, as I understand, these pits are largely centred in South Wales and Scotland, in areas where there is already a high incidence of unemployment. There are no alternative jobs to go to. Therefore, if these closures are to take place it becomes for the Govern-
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ment a matter of high policy and speed in order to make sure that alternative work is made available in those areas where the pits are being closed.
I believe that to make the normal redundancy agreement payment in these circumstances is not good enough. The agreement, which covered 26 weeks, was intended to provide for the normal redundancies which inevitably arose when a pit was closed because the seams were exhausted and the reserves had gone. The agreement provided for 26 weeks during which period other work might possibly be found.
In many of the pits to which the Parliamentary Secretary referred, normally these men could have been expected to carry on for another four or five years. In that time men of 60 would have reached retirement age. Now, they will not reach retirement age; they will be out of work. It is difficult enough for men of 60 to get another job when there are other jobs available, when there are men of 40 competing with them, but when a man of 60 is out of a job in Scotland, for example, where unemployment is at the rate of 8 per cent. or more, his chances of getting a job are negligible. At the age of 60 it is difficult to move from the South Wales coalfield and start life anew in the Midlands or somewhere else. That being so, some special arrangements ought to be made for redundancy payments in excess of 26 weeks for those who cannot be found alternative employment either in the industry or in other employment by the Ministry of Labour.
As the Government know that these pits are to be closed, they should make it a matter of prior importance, in relation to the President of the Board of Trade and in the distribution of industry, to begin now to make some arrangements to mop up the unemployment which will follow.
Sir I. Horobin: I thought that the right hon. Gentleman would like to know that I have now heard from the Coal Board that a list of pits has just been issued.
Mr. Robens: We are obliged for that information. Without the list a good many anxieties would be expressed by miners everywhere and by Members representing mining constituencies. Now they will know what the position is. I am

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hoping to make some proposals, before I reach the end of my speech, which will obviate the premature closing of these pits and will make the closures much slower so that more time is given to deal with the social consequences from the closures.
I should like to take up the point mentioned by the Parliamentary Secretary, about competition from oil—
Mr. Bernard Taylor: If, as my right hon. Friend has stated, long-term unemployment persists and men 60 years of age and over are unable to get work, with the lapse of Section 62 of the National Insurance Act, 1946, at some time and after not more than 19 months. their unemployment benefit ceases as well.
Mr. Robens: I am glad that my hon. Friend has drawn attention to that aspect of social insurance on which he is an authority. I hope the Government have taken note of that fact. It is extremely serious when an industry is closed down over people's heads and they cannot help it. We must protect them from absolute poverty, the means test or public assistance if at all possible.
Mr. Cyril Osborne: Is the right hon. Gentleman going to deal with the question, as he promised he would, when he said that the miner was getting on average 51s. a ton and that he himself was paying £12 a ton? Is he going to deal with the difference and state how it can be obviated?
Mr. Robens: No, because we have discussed this question in the House before and it is not germane to this debate. However, I shall be happy to discuss the difference between pithead and consumer prices on a suitable occasion.
I now want to deal with the question of competition from oil. The House should remember that total coal consumption in the last two years has dropped by 16·7 million tons, but fuel requirements have not dropped by that amount. Undoubtedly oil has taken the place of a good deal of coal. The Parliamentary Secretary has said—and, indeed, I think this has been echoed by many speakers—that the consumer must have complete freedom of choice and—I think I am quoting him correctly—that competition is the best stimulus. I would not quarrel too much with either
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of those assertions. The consumer chooses for a number of different reasons; convenience, cleanliness and price enter into the matter to a considerable extent.
All I would say is this: if it is the Government's policy that competition is the best stimulus, they must permit the Coal Board to be competitive, because the Coal Board is fighting oil with one hand tied behind its back. Oil companies can go anywhere they like. They can give all sorts of discounts and they can undercut coal at any time to suit themselves.
Sir I. Horobin: I do not differ from the right hon. Gentleman at all, but in fairness he ought to point out that if the Coal Board is tied it is tied by the Statute which he and his friends passed.
Mr. Robens: Certainly. If the Parliamentary Secretary wants to enter into polemics I will engage in such a discussion by all means, but I thought we were discussing a serious letter. Certainly the Statute says that there shall be nondiscrimination, but at the time when nondiscrimination was safeguarded there was no question of competition with oil. It was a question of supplying coal or any fuel at all. I hope the Parliamentary Secretary did not mean that ten years later we are still to be bound by what we were thinking then. I hope he did not mean, because we had a Statute which provided non-discrimination to protect consumers of coal from monopoly practices ten years ago, that the same should apply today.
It is very important for the Government and other people to understand this. The oil industry is not competing with coal on a fair basis. It is able to undercut by all sorts and manners of devious means. The number of times that representatives of the industry were going round to the garages on the subject of petrol, the number of garage overalls they supplied, the number of times the garages were painted and the special terms they put on the pumps is nobody's business. Let us make no mistake that if the coal industry were as free as the oil industry to compete, the oil industry would not have had such a great success.
This is not peculiar to this country. It is happening all over the Continent. The Schumann group are making the same complaint about oil, that whilst there are

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non-discriminatory clauses in their agreements oil is coming into Europe and unfair competition is taking place while coal stocks are mounting. I say to the Government that if they are not prepared to protect coal production at a certain level they must free the Coal Board to enable it to fight oil on a fair basis.
I turn now to another aspect of oil—
Mr. Dudley Williams: I am sorry to interrupt the right hon. Gentleman, but I am trying to follow his argument. Would he be good enough to expand on his suggestion about how the Coal Board could fight oil if it had freedom?
Mr. Robens: I do not want to expand that at all.
Mr. J. C. George: Why not?
Mr. Robens: I will tell hon. Members why not. I could go on until 7 o'clock this evening talking about this, but neither the hon. Member for Glasgow, Pollok (Mr. George) nor the hon. Member for Exeter (Mr. Dudley Williams) would like that, nor, I am sure, would anybody else. I have made the point, and the Parliamentary Secretary and the Paymaster-General know very well what it is. I have no doubt that it can be expanded and, within the next few days, no doubt the matter will be discussed in the Financial Times and other newspapers, because it is a subject of vital importance.
Mr. George: We are not trying to make difficulties at all; we are genuinely asking about it. We should greatly appreciate an explanation.
Mr. RobensI am sorry that the hon. Gentleman should be genuinely puzzled. This is not a primary class; it is a debating Chamber.
Mr. George: Oh.
Mr. Robens: Indeed, yes. This is really a little bit of nonsense. If the hon. Member for Glasgow, Pollok, who knows all about the coal industry, has the impertinence to ask me an elementary question like that, all I can do is to tell him to go back to his books. I am not here to act as his teacher. I have made a statement which the Parliamentary Secretary knows is perfectly correct; the Coal Board is
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not free to compete with oil. I demand that, if the Government take the view that the oil industry is free to compete with coal, they must free the Coal Board to compete with oil.
I come now to another aspect of the same problem, namely, the policy with regard to power stations. This is where one could save a good many of the problems produced by pit closures, not by saying that at no time must pits ever close, but by taking the process over a somewhat longer time.
There is something here that I do not understand. In his speech this afternoon, the Parliamentary Secretary took us back to 1956. That was the time when production was moving up and consumption was moving up. Estimates were made on that basis. In 1957 came the first feeling of uncertainty. The hon. Gentleman was right to tell us that all the problems came upon us in six months. Why was it that in 1958, with millions of tons of coal lying on the ground, the Government went on ordering the conversion of power stations from coal to oil? Why was that done? I can understand that one cannot break off commercial contracts immediately, but the conversion of power stations to oil was never done on the basis of competition; it was not done on the basis that the coal industry could not provide a cheaper fuel for making electricity. It was done, quite properly in order to bridge the gap between demand and supply. It has no commercial basis at all. Why did the Government go on allowing these conversions?
Does the Parliamentary Secretary know, or has he been made aware, that four power stations, Brunswick Wharf, Belvedere, Plymouth and Portishead, are now, as we sit here in this Chamber, being converted to oil from coal?
Sir I. Horobin Sir I. Horobin indicated assent.
Mr. Robens: Does it make sense? With 12,000 jobs in the industry about to disappear, why is it that while we sit here engineers are busy converting power stations from coal to oil, and not on a commercial basis? I am told by the leaders of the National Union of Mineworkers that, on a commercial basis, coal can beat oil at most power stations in the country.
The Parliamentary Secretary said the problem was 9 million tons of coal.

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Three millions we were going to stock. Three millions were to be cut back from opencast mining. Three millions were to be saved by pulling production down as a result of pit closures. By 1959, power stations which have been converted from coal to oil, not on a commercial basis but on the instructions of the Government as deliberate policy to bridge the gap, will be burning 6 million tons of coal equivalent. If one adds 6 million tons of coal equivalent to 3 million cut back in opencast, there are the 9 million tons without closing a pit.
The Paymaster-General (Mr. Reginald Maudling): I want to deal with this when I speak later, but may I ask the right hon. Gentleman now whether he appreciates, when he speaks of things being done on a commercial basis or not on a commercial basis, that the important consideration is the contractual basis?
Mr. Robens: I agree.
Mr. Maudling: Does the right hon. Gentleman adhere to the point he used to stand by, that contracts must not be broken?
Mr. Robens: Of course. I want to show the House the difference between the two. This is not competition between coal and oil. This was not done on a commercial basis but on a contractual basis, to bridge the gap. I am saying that these stations should be converted back. These things are not done overnight. Just as one cannot cut back the opencast coal programme by more than 3 million tons because of contractual obligations, so one cannot turn the power stations back overnight. But there was no word today from the Parliamentary Secretary to suggest that the Government were even considering it. Even at the risk of breaking contracts or even at the risk of paying an indemnity for having broken contracts, it is absolutely absurd to go on permitting further work on four power stations, which are now burning coal, in order to turn them over to oil.
The work could go on so that we should have dual-fired power stations. That is a sensible programme. Let us have as many power stations as possible capable of dual firing, in order to give flexibility; when we have more coal than oil, let us burn coal, and when we have more oil than coal available, let us burn oil. That is surely sensible. All I am saying is
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that, in discussing this matter today, the Parliamentary Secretary did not mention this policy once. This is one of the ways in which the cut could have been made and should have been made, not to the full 6 million tons in a short time, but by a start being made in turning the stations back.
To cut back opencast production by 3 million tons is inevitable in the circumstances, and no one will complain very much about that.
Sir A. Braithwaite: A good many people will complain.
Mr. Robens: Power stations should be converted back to coal, just as we are cutting back opencast production. The Coal Board should be free to fight oil competitively in general industry. The Government should define the plan whereby indigenous coal is to fit into the fuel and power policy of the nation and provide a proper investment plan accordingly.
Lastly, we must not destroy the confidence of the miners in long-term employment in the industry. For as long as this nation lasts and we have coal reserves we shall never be safe unless we maximise the use of indigenous materials. For that purpose, we shall always need men. Men will go to industries which will provide them with jobs and security. On this side of the House, we accept the Motion moved by the Parliamentary Secretary, but in doing so, we have in mind the views which have been expressed from this Despatch Box and others which will, no doubt, be expressed during the course of the debate.
5.8 p.m.
Mr. Gerald Nabarro: This is the first time the House of Commons has debated, on a Statutory Instrument, the annual investment programme of the National Coal Board, or, indeed, the annual investment programme of any of the nationalised industries. The reason that we are debating it today, of course, is traceable back to the 10th May, 1956, when 26 of my hon. Friends and I voted against the Conservative Government on the matter of accountability of the nationalised industries, notably the National Coal Board.
On that occasion, the Second Reading of the Coal Industry Bill, as it then was. Her Majesty's Government came to the

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House to increase the borrowing powers of the industry from £350 million to £650 million. I said that that was too much to be granted under one Bill. I said that I wanted about half that amount to be granted, and, concurrently, I wanted an annual scrutiny of the industry's investment. The Government resisted that. They came only a short distance with my hon. Friends and myself, by saying that there would be a Statutory Instrument if or when the borrowing requirements of the Board exceeded by £75 million the borrowing of the preceding year. The financial year we are here discussing is the financial year of the nation, not of the National Coal Board. The Order deals with borrowing powers up to 31st March, 1959, and is of special significance on that account.
The situation is, I think, a little quixotic, in that my hon. Friend the Parliamentary Secretary voted with me on 10th May, 1956, and against the Government, in favour of a Statutory Instrument of this kind. My hon. Friend is honourable indeed. He has pledged himself in support of a particular line of policy, and it falls to him today to move the acceptance of this important Instrument.
I want to get down to plain language and fundamentals. This debate means something to me that, I think, is not perhaps shared by right hon. Members or hon. Members on either side of the House. The issue in my mind is whether the National Coal Board is to be run as a social welfare club or as a commercial organisation. If it is to be run as a social welfare club, Parliament must give it a subsidy. If it is not so to be run, Parliament must not give it a subsidy.
Mr. Robens: It does not subsidise it.
Mr. Nabarro: I did not say that it did. The right hon. Gentleman is a little more impetuous than usual.
What I am saying is that if the National Coal Board is to be regarded as a social welfare club, then we shall have to subsidise it. But Parliament has always so far decided that the Board should pay its way taking year with year. There seated below the Gangway is the right hon. Member for Easington (Mr. Shinwell), the progenitor of nationalised coal, who insisted from the inception that the National Coal Board should pay its
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way within the Statutes, taking year with year.
The right hon. Member for Easington was right. The Board is a commercial organisation and should pay its way, taking year with year. It follows, therefore—and I think this will be supported in all parts of the House—that if we accept the proposition that it should pay its way all necessary steps must now be enjoined to ensure that uneconomic production is eliminated, that the industry is made progressive, efficient and solvent, and that the taxpayers of the country should not be called upon to continue to finance losses which are inherent in any demand to Parliament for increased borrowing powers.
My right hon. Friend the Member for Hall Green (Mr. Aubrey Jones), who was then the Minister of Fuel and Power, said on 10th May, 1956:
"What happens when a nationalised undertaking increases its deficit? [HON. MEMBERS: "It puts up prices."]"—
they were Tory Members who interpolated—
"It does not pass them on immediately; it carries on adding to its borrowing. I can see no justification for leaning on the assumption that the deficit is to continue indefinitely."—[OFFICIAL REPORT, 10th May. 1956; Vol. 552. c. 1440.]
My right hon. Friend was verbose on that occasion. What he might have said in simple, homely terms was that he expected the industry to make a profit at an early date. But he put it the other way round. What is meant by "indefinitely"?
This all took place two years ago. The industry is still in deficit and is likely to go on making a deficit, or loss. As I understand it, the deficit is getting larger, not smaller. My right hon. Friend must really apply himself to this problem. Under the Statutory Instrument he is only dealing with finance up to 31st March next, but the losses are going to continue long after that date. How does he propose to finance this continuing deficit, and does he accept the fact that deficits are likely to continue after 31st March? Has he looked any further ahead than that date?
Surely, when my right hon. Friend comes to the House for these huge sums of taxpayers' money he has an obligation and a responsibility to tell the House

1225
and the taxpayers how the money is to be employed in the future and what are the prospects of the industry being made solvent.
My hon. Friend the Parliamentary Secretary was kind enough to say in the course of his speech that sometimes he agreed with me. It is notorious that more often than not he disagrees with me.
Mr. Robens: Not when he voted with the hon. Gentleman.
Mr. Nabarro: The right hon. Gentleman is exactly right, of course, but that was a matter of two and a half years ago.
As recently as 17th November last, an interesting exchange took place at Question Time. I want to put this financial matter into the perspective as I see it, because a lot of my hon. Friends see it in the same way. In the course of a supplementary question, I asked my hon. Friend the Parliamentary Secretary:
"Could my hon. Friend say whether the Board will continue to be in a position to finance losses from its own resources, having regard to the fact that the accummulated losses by the end of this calendar year will probably be of the order of £40 million, added to a figure of £60 million, being the value of the large quantities of unsold stocks, and as that represents in aggregation a figure of £100 million, can my hon. Friend say whether the Minister views with equanimity such a large sum of capital being sterilised?"
That is the issue before us today; £100 million is sterilised. The hon. Member for Neath (Mr. D. J. Williams), I think it is, is nodding his head. It is indubitably the fact that £100 million is sterilised. My hon. Friend the Parliamentary Secretary responded in the most scornful way. He said:
"I do not think we would view it with equanimity if it existed anywhere but in my hon. Friend's brain."—[OFFICIAL REPORT, 17th November, 1958; Vol. 595, c. 832.]
That is very funny. My hon. Friend scored a debating point at Question Time. But the fact is, whether one sterilises capital or effects a diminution of the liquid resources of the National Coal Board, it is still £100 million—£40 million in respect of accumulated losses up to the end of this year, plus £60 million in stocks. It is £100 million which could have been applied, had the losses not been earned and had stocks not been necessary, to further capital investment.
I am a modest fellow. I quote from the pamphlet "The Future Labour Offers
1226
You". [HON. MEMBERS: "Hear, hear."] I am quoting from it in the context of the matter which we are discussing, for written in the document are these words:
"£70 million worth of unsold coal piled up at pitheads, in quarries and in dumps all over the country."
As I say, I am a modest fellow. I put the figure at £60 million in respect of those stocks.
Sir I. Horobin: My hon. Friend and the Labour Party are wrong.
Mr. Nabarro: I am grateful to my hon. Friend. I will deal with him in one moment.
The Labour Party's manifesto calls it £70 million and I called it £60 million. Now my hon. Friend the Parliamentary Secretary says that we are both wrong. Let us have a look at the average pithead cost of coal. On the latest published figures, the average cost is £4 3s. 1½d. per ton—I commend this to my hon. Friend the Parliamentary Secretary; he said that I was wrong so perhaps he will listen to the figure—but most of the accumulated stocks are fines and low grade coal. It would not be fair to take them in at the average cost.
I have consulted experts in the matter within the National Coal Board, and they have told me that the proper figure at which to average these 18 million tons is £3 15s. per ton. Eighteen million times £3 15s. is £67·5 million. I put £60 million on the stocks and the Labour Party puts £70 million on them. The correct figure is £67·5 million. The Labour Party is a little closer to it than I am. I hope that before the debate is finished my hon. Friend will have the kindness and generosity to admit that the £100 million of sterilised capital, or, perhaps, a diminution of liquid financial resources, is a grave matter and one of the major considerations inherent in the Borrowing Order.
How are we to deal with the situation? I am not sure that the policy of the Government is entirely correct. There are bound to be differences of view on how we should deal with the situation. I readily concede to the right hon. Member for Blyth (Mr. Robens) that I have always warmly supported him in public debates, on the radio and in this House and elsewhere on two desiderata. First, we should mine the maximum

1227
economic tonnage of coal, and secondly, we should always use that coal as efficiently as possible. I do not think anybody would quarrel with those twin desiderata. We have all been trying to achieve them in the last few years.
From 1951 to 1957 we mined an annual average of 223 million tons of deep mined coal and opencast coal. This year, the total production of the two will be about 215 million tons. I think that it is correct to say that in 1959 production may be of the order of 209 million tons if we make no immediate changes. Having regard to all the present circumstances, coal production next year, and possibly in the ensuing two years, should be rationalised to 200 million tons annually, which is a good deal lower than the figure the Parliamentary Secretary suggested.
I would not make the reduction in deep mined coal. I would make it in opencast coal. This year opencast coal production is at a very high level. It is at the highest level in our history. My right hon. Friend, who is now Minister of Supply, will remember that on 10th May, 1956, on Second Reading of the Coal Industry Bill, he said that as far as could be envisaged 10 million tons of opencast coal per annum would be mined over the next ten years. That was his estimate. But this year we are mining 14 million tons—the highest level in our history. In view of the fact that, in the last five or six years, average opencast output has been of the order of 10 to 11 million tons a year, all that my hon. Friend is doing by saying that he proposes to take 3 million tons off opencast production is to revert to the position of 1956. That is not sensible.
We have had reasonably good weather and other favourable factors this year for opencast production, and that is why it has been at such a high level. I am downright on this matter. My hon. Friend the Member for Harrow, West (Sir A. Braithwaite) introduced opencast coal mining from America during the war, and he was right in doing it then. He has been concerned with opencast coal mining for many years past. He has a direct interest in it; I have not. I say emphatically and in downright fashion that if I had to make the decision I would do two things in opencast coal mining. Because it is responsible, the National Coal Board should say to opencast coal
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mining contractors, "We will guarantee to take from you 6 million tons of opencast coal in each of the seven years from 1959 to 1965, inclusive", thereby ensuring that those contractors know what commitments they can enter into in respect of their valuable machinery and plant.
My hon. Friend the Parliamentary Secretary said, I thought in quite the wrong context, that 12,000 persons are engaged in opencast coal mining. That is correct; but opencast coal mining is a civil engineering process. Most of those men could be diverted with 50 per cent. of the plant and be employed on building roads which, in the present coal situation, would be much better than carrying on at the present high level of opencast mining. I would reduce opencast coal mining from 14 million tons this year to 6 million tons, and I would give the contractors a seven-year guarantee to take 6 million tons per annum, all of which would avoid wholesale sackings from some of the deep mine pits.
Sir A. Braithwaite: I should like to say to my hon. Friend that if I were reviewing the position I would increase opencast coal mining by at least 100 per cent. and would endeavour to sell the 40 million tons of coal in the export market, thereby improving the position in the mines and the economic position of the whole country. If my hon. Friend's policy were pursued, the Coal Board would have lost in the last four years at least £30 million and my hon. Friend would have had to provide a bigger estimate than his present one.
Mr. Nabarro: My hon. Friend is not such a good businessman as I thought. His arithmetic is faulty. He said that there would be a loss of £30 million in four years had there been no opencast mining.
Sir A. Braithwaite: I did not.
Mr. Nabarro: What did my hon. Friend say then?
Sir A. Braithwaite: A profit of £9 million this year was made on opencast mining, which was the only profit shown in the National Coal Board's account. An average of over £7 million profit has been made each year for several years.
Mr. Nabarro: I must take up at once the error in my hon. Friend's argument. As I said, his arithmetic is faulty, and he should look at the profits in the accounts of, for example, the East Midlands Division or the Yorkshire Division.
Sir A. Braithwaite: I am talking about the National Coal Board as a whole, not divisions.
Mr. Nabarro: My hon. Friend should study these matters more closely. The fact is that a profit has been made in opencast mining, and if he had allowed me to continue my argument—he pressed me to give way—I would have dealt with the point about diminished profits from opencast mining if my suggestion of making a reduction to 6 million tons annually were followed. But the proper way to offset that loss surely is to shut down some of the most grossly uneconomic deep pits. The one should balance the other, and with a little intelligent handling and manipulation they will balance one another.
The right hon. Member for Blyth has often referred to the many pits which have been kept in production in the last five or seven years simply because of the pressing and overwhelming need to mine every possible ton of coal. It is those pits that now ought to be closed. I do not think the number need be as great as forty, which is the figure that Sir James Bowman suggests. But he ought to know because he is the Chairman of the National Coal Board and I am not. Whatever may be the number of uneconomic pits which should be shut down, I suggest that the most grossly uneconomic should be selected for closure. The avoidance of losses from those pits should balance the loss of profits arising from the substantial reduction of 8 million tons annually in open-cast mining which I contemplate. The one should balance the other without causing the National Coal Board further losses.
I want to say a word about the decline in coal consumption. The right hon. Member for Blyth, as a Labour politician, world say that most of the decline in consumption is due to the wicked economic and financial policy of the Tory Government.
Mr. Robens: Hear, hear.
Mr. Nabarro: That is Socialist Party polemics.
Mr. Arthur Palmer: That is correct.
Mr. Nabarro: I am surprised that the hon. Member for Cleveland (Mr. Palmer) is interpolating that it is correct. It is a half truth or, perhaps, a one-third truth.
The right hon. Member for Blyth spoke of it as the stagnation of industrial production. My right hon. Friend the Paymaster-General is winding up this debate. He is an economist of no mean order. He will confirm that the general production of the country is approximately 4 per cent. below last year. That 4 per cent. drop in general production has certainly led to a decline of coal consumption of a few million tons per annum. It might be 4 million or 5 million tons in a full year directly attributable to a declined national production.
There is, however, also the issue that we have now spent years in this House, all of us on both sides, passing legislation to increase the efficiency with which fuel is used, thus diminishing consumption. Neither side has mentioned this. The clean air legislation is leading to large savings in fuels all over the country. We all intended that it should, but please do not let us forget to mention it today. It is the second contributory factor in the declined demand and consumption for coal. The first contributory factor is the 4 per cent. fall in national production and the second is the great increase in fuel efficiency. The third, however, is the most important and powerful—
Mr. Palmer: Is it not a fact that steel, another basic industry, is suffering in just the same way as the coal industry for the same reason: that is, a general fall in industrial productivity?
Mr. Nabarro: Yes, I took that into account in my 4 per cent. I will deal with steel presently, for I know of the hon. Member's special interest, in his Cleveland constituency in Yorkshire, in the steel industry.
The third factor is the powerful intervention of oil. Let us look at some of these figures, starting with steel. In 1958 compared with 1957, coal consumption

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in the steel industry dropped by 18·6 per cent.; oil consumption rose by 9·5 per cent. In engineering, coal consumption dropped by 1·5 per cent.; oil consumption rose by 30·6 per cent. In food, drink and tobacco, in 1958 as compared with 1957, coal consumption dropped by 7·7 per cent.; oil consumption rose by 35·5 per cent. In the chemical industry, coal consumption dropped by 15·2 per cent.; oil consumption rose by 23·6 per cent. I could go on through the whole gamut of industries. They all have one thing in common; coal consumption has dropped and oil consumption has risen. These figures are extracted from the Economist of 29th November, 1958, published four days ago. I think we would all accept them as correct.
While that process is going on, however, does anybody deny that my rationalisation of coal production at 200 million tons for 1959 forward for the next two or three years is not more realistic than the figure given by the Front Bench? This competition from oil is virulent I would not in any way deny it.
The policy of the Labour Party is misplaced. Its policy is to limit the use of oil. Does the right hon. Member for Blyth say "No"? Would he like to say that it is not the policy of the Labour Party?
Mr. RobensNo.
Mr. Nabarro: On 3rd October last, a resolution was moved by the President of the National Union of Mineworkers.
"calling for the adoption of a national fuel policy designed to secure the maximum use of indigenous fuel and the limiting of unnecessary fuel imports".
Mr. Robens: That is right.
Mr. Nabarro: I am not at present suggesting whether it is right or wrong; I will come to that. What I am saying is that that resolution was moved at the Labour Party Conference by the President of the National Union of Mineworkers. It called for limitation in imported fuels. There is only one imported fuel and that is oil.
Mr. Robens: We are still importing coal.
Mr. Nabarro: We are importing no coal this year.
Mr. Robens: We are importing coal this year—this week.
Mr. Nabarro: It might be the dreg ends of contracts, but the quantity is so infinitesimal as to be of no consequence. What I am saying is that the Labour Party has pledged itself to a policy of limiting fuel imports. There is at present only one major imported fuel and that is oil. One cannot do two things at one and the same time. We cannot limit oil imports without restricting consumer choice, and we cannot limit consumer choice while supporting maximum efficiency in industry, for only industry knows which fuel for which purpose is best, most efficient and cheapest in its own interests.
The one thing I want powerfully reinforced by my right hon. Friend the Paymaster-General is that nothing is contained in the present policy of Her Majesty's Government which would in any way restrict the full competition and the free interplay of forces between oil and coal.
Mr. Robens: Does the hon. Member subscribe to the view which I expressed that in those circumstances the Coal Board should be completely free to compete with oil?
Mr. Nabarro: I must confess that one of my hon. Friends behind me spoke of being puzzled by the right hon. Member. I was equally puzzled by the words he used. He said, "free the coal industry to compete with oil". I do not understand—I hope that the right hon. Gentleman will tell me some time—in what way coal is at present hampered in its competition with oil. I do not understand that. [Interruption.] The right hon. Member talks about petrol stations, but petrol does not compete with coal. Fuel oil competes with coal.
Mr. Robens: I was giving an indication that when the oil industry wants to enter a market, it will use all sorts of devious ways of undercutting its competitors. Today, the oil industry is using devious ways of undercutting coal. If the Coal Board were as free as the oil industry in relation to pricing policy, it could oust oil from many of the markets which oil possesses in this country.
Mr. Nabarro: I am an obtuse and simple-minded man and I do not understand this at all. The right hon. Gentleman was at one time Parliamentary

1233
Secretary to the Ministry of Fuel and Power. He knows as well as anybody in this Chamber that it is not possible to produce motor spirit and aviation spirit without producing in balanced quantities fuel oil and other products from the crude. The petrol companies are fully justified in penetrating to the utmost the market for the sale of aviation and motor spirit and balancing that against their production and sales of fuel oil. The more motor cars there are on our roads, the more motor spirit is wanted, and the more fuel oil that the oil companies must sell as an essential derivative from the crude, and sell it in direct competition with coal. [Interruption.] I am glad that the right hon. Member for Easington so warmly supports what I am saying.
Mr. E. Shinwell: The last thing anyone would expect of me is that I should concede any support to the hon. Member. I am not, however, quarrelling with his suggestion that we cannot dispose of oil imports. I am not suggesting that for one moment, because I agree that crude oil must be converted into fuel oil and fuel oil into petrol and aviation spirit, but I do not believe that that is tackling the problem in the right way. The hon. Member for Kidderrninster (Mr. Nabarro) was quite right in some of his other observations, but on this matter I do not think that he is approaching a solution at all.
Mr. Nabarro: I am sorry the right hon. Gentleman should say that. I am really pained by that confession on his part. I thought he was about to rise to support me in condemning his right hon. Friend. My optimism was obviously misplaced.
What I am saying is that it is inescapable in the years ahead, if we are to have adequate motor and aviation spirit, that we produce balancing quantities of fuel oil as well, and that fuel oil will compete directly with coal. The drug on the market at the present time is the 18 million tons of undistributed coal stocks, of which 9 million tons is normal. We need not worry about that anyway. There is only a temporary excess of 9 million tons of fines and of small, low-grade coals. The way to sell it is the way any commercial business disposes of temporarily surplus and unwanted stocks. It marks them down to bargain basement
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prices and sells them off as fast as they can go. Then it will be up to the National Coal Board to see that it does not replace in its stocks material of a kind which has no ready sale.
Mr. Iorwerth Thomas: Does the hon. Member remember the speech he made in this House on 14th July last, when he argued with the House—
Mr. Nabarro: Would the hon. Gentleman give me the reference for that speech? I have it here, of course.
Mr. Thomas: In the OFFICIAL REPORT, c. 909 of 14th July. I shall not bore the House by quoting the hon. Member's speech, but I want to know whether he is still of the same opinion he was then, when he was making the point that for strategical purposes and military purposes there should be a restriction on the quantities of oil coming from the Middle East.
Mr. Nabarro: I know my own speeches by heart. I cannot see any reference in c. 909 to strategical purposes requiring a limitation.
Mr. Thomas: Shall I quote the speech?
Mr. Nabarro: The hon. Gentleman says, c. 909 on 14th July, 1958. I cannot see any reference to what the hon. Gentleman says. No doubt he can explain.
Mr. Thomas: Perhaps the hon. Gentleman will allow me that freedom. The hon. Member had been discussing the question of surplus coal, and then he said:
"Iraq is in a state of revolution. Britain's principal ally in the Middle East is prostrate and her Prime Minister murdered. Nuri Al Said was here just eleven days ago. A substantial part of Britain's imported oil comes from Iraq. Suppose that source of supply is lost to us? The next step would be the grave imperilling of our supplies of fuel oil.… In view of this new political crisis in the Middle East, we would be ill advised to place increasing dependence on fuel oil. Rather would I have a policy here at home of continuing to mine the maximum tonnage of coal even if it means storing increasing quantities."—[OFFICIAL REPORT, 14th July, 1958; Vol. 591, c. 905.]
I think that it is sufficiently clear to theHouse—[HON. MEMBERS: "Hear, hear."]—that the hon. Member was arguing for a limitation on importing oil from the Middle East, and having regard to the numbers of coups d'état and murders

1235
which have happened in the last six months, the point of view he expressed then is stronger today.
Mr. Nabarro: I think the quotation which the hon. Gentleman has made from my speech of 14th July, 1958, is an impeccable statement of fact. I spoke of maximum tonnage of coal and increasing stocks, if necessary. If the hon. Member will go back to that date and look up our stocks at that time he will find that the total stocks of coal then were of the order of—[HON. MEMBERS: ""Oh."] Let me finish this. They were of the order of 15 million tons, compared with 38 million today.
I go a great deal further than that. It may not be possible in the next year or two to avoid coal stocks rising still further. We may want all that coal within a year or two. [HON. MEMBERS: "Why sell it off?"] Why sell it off? Because certain parts of the coal stocks at present are very, very low in quality and are deteriorating. It is those I would get rid of. If we are to mine 200 million tons of coal a year, the rationalised figure I referred to, I would not regard it as unreasonable to have an aggregation of distributed and undistributed stocks of 50 million tons, which is one-quarter of a year's production. Any prudent business engaged in large-scale operations normally keeps about three months' stocks in hand at any one time, and 50 million tons is 12 million tons more than the 38 million tons which we have today. So I claim, in response to the hon. Gentleman's intervention, that there is nothing incompatible between what I then said five months ago and what I said today.
Finally, very large sums of money are now involved in the National Coal Board's investment programme. Nearly all this money is being provided by below-the-line surplus in the Budget. It is directly raised year by year from the taxpayers. I am not satisfied that there is adequate scrutiny over the expenditure of that money. I believe the time has now come in the case of the National Coal Board as in the case of expenditure by Government Departments, to have an Auditor and Comptroller-General who will go around these industries and bring to light in periodical reports the worst cases of extravagance which are evident to many members of the general public.
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No reply has ever been given by my right hon. Friend on this point. If we should do it with Government expenditure involving taxpayers' funds I see no reason at all why we should not do it in the nationalised industries which are similarly consuming year by year large sums of taxpayers' money.
I am not going to repeat my performance of 10th May, 1956 and vote against the Government tonight. I cannot amend by the rules of order of this House, the amount of money in this Order. I should be tempted to do that if I could. I cannot amend it. I can only support the Order or vote against the Order. As, quite clearly, the Coal Board in its present financial dilemma must have more money to finance stocks and must keep as many skilled miners in employment as it possibly can, I believe there are thus powerful and valid reasons for supporting the Order. As this money only provides for a period up to 31st March, 1959, only a matter of four months hence, we shall have to deal with another of these orders within the next six or eight months, and I may take a very different attitude to my attitude today unless my right hon. Friend persuades the members of the National Coal Board to put their house in good order financially, during the next few months.
5.48 p.m.
Mr. John Timmons: I do not propose to follow the speech of the hon. Member for Kidderminster (Mr. Nabarro), as I think that hon. Members are becoming dizzy with statistics. I propose to deal with various other aspects of the matter, aspects which will affect seriously the everyday life of the people of Scotland.
I think that right hon. and hon. Members will very well remember that I never did find myself in entire agreement with the National Coal Board. Nevertheless, I have to pay a tribute to the Board for the tasks that it has carried out since vesting day. It has done a great deal. It has carried out that job. With the co-operation of the Miners' Union and the men employed in the industry it has reorganised the industry to meet the needs of the nation at a most difficult period in our history.
The Coal Board took over the industry in 1947. It was an industry which was obsolescent and running down to its

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lowest possible level of production. The Board also had to carry huge financial burdens which never should have been placed upon it. The compensation claimed against the Board, on behalf of the colliery owners, was £338 million and the interest charges are in the region of £13 or £14 million annually. The Board has made a capital repayment of £21 million since 1947, and that does not take into account the loss of £70 million which it has had to meet on imported coal.
I am particularly interested in the Scottish coalfield. I have good reason to be. I have had cause to study the compensation payments made to the Scottish coal owners. Many of my hon. Friends who represent Scottish constituencies will possibly remember that early in 1947 the Scottish Regional Coal Board summoned us to Edinburgh to tell us how many pits it was intended to close within a matter of months. The Board has closed 70 pits out of a total of 196 pits in Scotland, and most of these were closed within two years of vesting day.
The reasons given for the closures were, first, that the pits were uneconomic and, secondly, that their reserves of coal had been exhausted. If these pits were uneconomic, and the reserves of many of them had been exhausted, why should the Board continue to pay interest charges to coal owners for something from which we receive no value? Like all my fellow Scots, I like to have value for money. People are not getting value for the obsolescent mines and the mines which have gone out of existence in Scotland.
The time is long overdue for a general review of the compensation payments which the Coal Board must continue to make. I think that everyone will agree that if the capital repayments, interest charges and subsidy payments made by the Board were disregarded, it would be found that, instead of running at a loss, the Board has been making fairly substantial profits. During the past year I have watched the general trend very carefully. The new situation in which the Board, the industry and the miners find themselves is nothing strange to me. I have foreseen this situation, and I had thought that it would have come about long before now.
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Apart from the trade recession with which we have been faced, I firmly believe that the policy of the Government, which is causing stagnation in industry has aggravated to a great extent the present crisis in the coalfields. Steel production is down, as can be plainly seen in the industrial areas of Lanarkshire and Western Scotland. Heavy engineering production has gone down, and many other industries have suffered considerably as a result of the Government's financial and economic policies. The plans of the Central Electricity Authority to use fuel oil is part of this same policy. Is it the Government's policy to continue to encourage the use of oil fuels and to restrict the use of solid fuels? The miners and those who live in the mining communities are entitled to have that question answered. The Government should make up their mind to adopt a national fuel policy.
Last year, in a debate on the coal industry, the Paymaster-General said that Britain would require all the coal that the industry could provide. Quite apart from the contributions which industrial atomic energy would offer, we should have to bring in oil to bridge the gap. Apparently, it was intended that only atomic energy and oil should bridge the gap between demand and supply.
I understand that the Coal Board's proposals for further closures in the mining industry will affect Scotland far more than any other part of the British coalfield. My own county, Lanark, is already one of the worst affected, and it will be one of the worst affected again when further closures are effected. We shall have few, if any, pits left in our coalfield if the Board's new reorganisation plans are put into effect. All this is coming at a time when unemployment in Lanarkshire is standing at 9 per cent. or 10 per cent. The Parliamentary Secretary has said that two-thirds of the redundant miners will be absorbed inside the industry, but that just will not apply to Lanarkshire. Pits are closing down in the constituency of my hon. Friend the Member for Lanarkshire, North (Miss Herbison) as well as in mine.
I know the conditions in which these people are living in Lanarkshire. It is not easy to ask a miner to transfer to another area when members of his family are being educated and employed in a

1239
certain district. I have resisted this policy on the part of the Board ever since it began to transfer miners from Lanarkshire and send them to Fife and Midlothian. I notice that 20 mines are to be closed and among them are mines in the Fife coalfield. Therefore, there will be a number of redundant miners in Fife, and any vacancies which may occur in the better areas of Fife will be filled by the redudant miners already in the area. The same applies in The Lothians and in Ayrshire.
I cannot, therefore, see redundant miners moving from Lanarkshire into any of those areas. Incidentally, men employed in some of the pits on the border of Lanarkshire travel 20 miles to and from work each day. This adds at least two hours to their working day. These men cannot be absorbed into the industry within the county.
What are the intentions of the Government? Yesterday, from Questions put in the House to the Parliamentary Secretary to the Board of Trade, we heard about factories standing empty, and attempts to get new industries for the Development Areas. The general impression that the Front Bench gave me was that the Government were far too complacent. The figures I have here are alarming. The total manpower in the 20 pits that are to be closed in Scotland represents almost 50 per cent. of the total of 12,000, of whom 5,630 are to be thrown out of work. This leaves Scotland with half the redundant manpower involved in the reorganisation scheme of the Coal Board. That is serious, and since we have the highest unemployment figures throughout the United Kingdom, I am entitled to ask the Government what they will do about it.
We have had a bitter experience in the past, but it is true that a certain amount of progress was made in absorbing those miners who were made redundant years ago. Many of those men went into new industries which came to the West of Scotland, some from the South, some from the United States. Since then, there has been stagnation. I know the difficulties with which we were confronted. I myself made a great effort to try to induce industrialists to come to the West of Scotland, but because of the lack of principal raw materials, strip steel and sheet steel, they went to other parts of Europe.
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I was glad to learn from the statement of the Prime Minister, a fortnight ago, that the Government have decided to give the Lanarkshire area a strip and sheet mill. During that statement I was sitting here thinking that it was exactly four years ago, during a debate on Scottish affairs, that I appealed to the Government to realise that a strip and sheet mill was needed to attract new industries to this area. I appealed to them then to do something about it, but nothing was done. Had this decision been taken then, that strip mill would have been in production today, and we might have had a greater opportunity of attracting new industries to the West of Scotland. However, we must be thankful. We hope that progress will be made, and made rapidly, with the development of the new mill.
Finally, may I ask the Government this question: should the country find itself in another trade boom, with a heavy demand for coal, what will be the position? Have we the necessary manpower on which we can rely to produce that coal? I say that we have not and that we shall not be able to get it, for the following reason. In the mining industry today, there are 187,960 men over 50 and 57,033 men over 60. Roughly, that is a total of 245,000 men who will be going out of the industry shortly and there has been no recruitment to it during the past few years.
Does the Coal Board believe that we shall attract young men to an industry which gives no guarantee of continuity of employment and no guarantee for the future? If the Government or the Coal Board believe that they will get young men to go into such an industry, they are making a big mistake and we shall find ourselves again in the position in which we were during 1945, 1946 and 1947. with a shortage of manpower.
That is the situation as I see it. I have asked the Government a number of questions to which I am entitled to receive answers, because our people who are becoming redundant in the coalfields of Scotland, particularly in Lanarkshire, and their dependants are awaiting an answer. Must they queue at the employment exchanges, where there are already large queues? Must they go to the National Assistance Board to get supplementation to enable them to live? These are all problems to which our people want to know the answers. As I see the situation,

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their fate lies in the hands of the Government, and we would like the Government to tell us what the future holds for redundant miners in the mining areas.
6.7 p.m.
Colonel Richard H. Glyn: I feel that the hon. Member for Bothwell (Mr. Timmons) has put forward very clearly the difficulties of those miners and constituents of his who may suffer as a result of the redundancy which may be coming, and in some cases has come. I wish to examine how we have got into this position. It seems to me that we are having a fuel crisis in reverse. The National Coal Board is saddled with a large amount of low grade coal which it is not in a position to sell because, frankly, so we have been told, it has cost between £60 million and £70 million. I think it is right to say that it could not be sold for more than perhaps one-half or two-thirds of that amount.
It has been said in this debate that the coal is worth £60 million or £70 million. I think that to be a mistake because any article is worth only what it will fetch and not what it cost. Many hon. Members will know the story of the rich woman who went to a picture sale. She brought home a picture which her husband did not like, and she said, "This picture is worth £200". He replied, "I do not think so." She said, "Yes, it must be, because I have just paid £200 for it." However, it was not worth £200, at all events not in the open market. I think that is the position of this coal which it is said has cost £60 million or £70 million; it is not worth that amount.
I welcome one thing in the announcements made today, namely, the cut in opencast working. I join with my hon. Friend the Member for Kidderminster (Mr. Nabarro) in saying that I could wish this cut had been heavier. I think that would be a proper step. Of course, one cannot judge these things without having all the official statistics and without having the full information before one, but I would have liked to see a bigger cut in opencast mining.
It seems to me to be essential that the problem should be looked on as a national one. Our coal mining industry is nationalised and it is vital to us all that we should have an efficient coal mining industry in Britain. By tradition, this nation is a great user of coal. Before
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the war, coal was our principal source of power for nearly all industries, and for hundreds of years it was a traditional source of heat for warmth and cooking for the household. Since the war this has to some extent changed. First, the shortage of coal led to an official drive to substitute other fuels. We had the coal-oil conversion scheme and other conversion schemes. The quality of some of the fuel supplied offended manufacturers and housewives while the relatively high price of the coal enabled other fuels to compete. That is how oil really began to get the hold which it at present has in many places.
All these dangers were foreseen, and the National Union of Mineworkers was warned of them at the very beginning of nationalisation by the right hon. Member for Leeds, South (Mr. Gaitskell) who made a speech in July, 1948—it is very relevant today—to delegates of the union at Whitley Bay. He warned them fairly and squarely that the man in the street, who is directly involved—the money that we are considering today will, in the long run, come from the man in the street—would judge the nationalised coal industry by six tests.
Dealing with the first test, the right hon. Member said:
"First of all, the man in the street expects that the nationalised coal industry should produce enough coal for the rest of our industry."
Unfortunately, that did not happen. There was a need to import expensive foreign coal to make up for the coal which our mining industry did not provide. The expense of importing that foreign coal has bedevilled the National Coal Board's finances ever since and contributed substantially to the difficulties that it is now in.
It is worth remembering that before the war our imports of coal were absolutely negligible. By 1948 they were nine times the pre-war tonnage, by 1951 130 times the pre-war figure, and by 1955 1,200 times the pre-war tonnage. Those enormous imports of coal, which at that time were necessary, have gone a long way towards producing the present unfortunate position.
The right hon. Gentleman went on to say in his warning to the industry:
"Secondly, I think the ordinary man-in-the-street expects that the coal industry should

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meet its export commitments, steadily expanding sales of coal abroad until our customers' needs are met."
It is within the knowledge of the House that that simply did not happen. Our exports before the war were between 30 and 40 million tons. In 1949 they were 14 million tons, and they went down in the next two years, in 1951 they were under 8 million tons and since 1951 we have done a little better but never more than 40 per cent. of pre-war. If we had held our pre-war markets the present position might have been very different.
The right hon. Gentleman continued:
"Thirdly, the man in the street expects that there should be a progressive improvement in the supply of coal for domestic consumers so that before long they, too, will be able to get all the coal they require."
It took ten years to get away from coal rationing.
The fourth test was:
"The man in the street expects everything possible should be done to get the dirt out of coal, and by 'dirt' I mean the same thing as he does, not just dirt but stone, rock and slate as well."
The housewife would say that that has not been done.
The right hon. Gentleman went on:
"Fifthly, the man in the street expects the industry to pay its way financially so that if there are losses in one year they must be paid off by profits in other years."
We all know that that simply has not happened.
The last test is perhaps one of the most significant. The right hon. Gentleman went on:
"Finally, the ordinary man does not expect prices to rise much more, if at all. On the contrary, as technical improvements take place in the pits, he expects that part at least of the benefits from these improvements should go in the form of reduced prices to consumers."
At the time the right hon. Gentleman was speaking the cost of pit-head coal was about two and three-quarter times the 1938 cost, and since then it has more than doubled, being nearly six times the 1938 figure.
I believe this increase in cost is a big factor in the sales resistance to coal both among industrialists, who are much the most important on a national scale, and among housewives. It is because the price has continued to go up that coal is no longer easily able to compete
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against other fuels. I take the view—it is a gloomy one—that the nationalised coal industry has failed every one of those six tests which the right hon. Gentleman put forward ten years ago. He bowled six balls by delayed action and every one has knocked out the Board's middle stump.
Mr. Bernard Taylor: While on the question of the price of the commodity, will the hon. and gallant Gentleman tell the House what the average pithead price for a ton of coal is at the moment and the price at which it is retailed to the ordinary domestic consumer?
Colonel Glyn: That is a very interesting question. The hon. Gentleman must tell me what area he has in mind because prices vary. The News Chronicle today published a pit-head price of £4 5s. per ton, and I think that is right within a shilling or two. The point of the hon. Gentleman's intervention is that the retail price is too high and that it should not be as high as it is. That is something which very few people will seriously dispute. It is the pit-head price of which I speak as having more than doubled since the right hon. Member for Leeds. South said that it must not increase and should go down. It has more than doubled since then because the pit-head price then was £2 Is. per ton and it is now £4 5s.
Mr. E. Fernyhough: Can the hon. and gallant Gentleman tell me how the increase in the price of coal compares with the increase in the price of potatoes?
Colonel Glyn: If the hon. Gentleman really wants to go into the facts of agricultural life, I should be delighted to give him a number of figures in that respect. He must take average current prices against the pre-war prices, and in making that comparison he will find that potatoes are not a happy commodity for him to choose.
The point is that the right hon. Member for Leeds, South warned the National Union of Mineworkers in July, 1948, what would happen if the price of coal went up very much more and pointed out that it ought to come down, the price of coal then being nearly three times the pre-war price. But instead of the price being

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held steady or even being brought down, it has been allowed to double itself. I should be delighted to talk about agricultural subjects, but I should not be in order in doing so in this debate.
Mr. Emrys Hughes: Surely an analogy between agriculture and coal is in order. The hon. and gallant Gentleman and I are both interested in agriculture. Does he not think that agricultural prices have also gone up, and would he argue that the agricultural subsidies should not be paid because agricultural prices have gone up?
Colonel Glyn: The facts of agricultural life are complicated. This is not a debate in which one can fully deploy the facts of agricultural life. Although I am willing to do so, I might be drawn into a great number of issues which would be sadly out of order, but I am very willing to meet the hon. Gentleman in the Library with reference books for two and coffee for one and we will see how far we can get with the subject. I am not ashamed of agricultural prices, which can be defended, but I am now pointing out that, instead of being held steady and if possible reduced, as the right hon. Member for Leeds, South said should happen—and he was warning the delegates of the National Union of Mineworkers—the price of pithead coal has rather more than doubled.
Mr. T. Brown: The hon. and gallant Member has quoted increases in pithead prices. Will he tell the House the percentage increases since 1947 in the cost of materials used in the pits? Is he aware that some of those increases have been 155 per cent. and have had to be met out of the price of coal? Is not that one of the reasons why the pit-head price has had to be increased?
Colonel Glyn: I appreciate the point of the hon. Member's intervention, but it does not in any way detract from my argument. The right hon. Member for Leeds, South was warning the delegates of the National Union of Mineworkers of the consequences of failing any of those six tests, and, on the figures I have given to the House, all those tests have been failed. That is the important point.
It is the duty of the Government to regard this very important industry from the national point of view. It is a nationalised industry and thus the business of
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the nation. It must be run in the best interests of the nation as a whole. It must be made efficient, and by that I mean that it must be able to sell its products at an economic price. That is absolutely essential.
I am a little surprised by the criticism which seems to be seeping through from hon. Members opposite. It will be within the memory of hon. Members that the nationalisation of this important industry was put through at a rather fast pace when hon. Members opposite formed the Government. Among my notes I have an interesting quotation. It will be remembered that in the 1945 General Election there was great talk of a blueprint for the nationalisation of the coal mines. In a very revealing and frank statement, the right hon. Member for Easington (Mr. Shinwell)—and I regret that he is no longer in his place—said in page 172 of his book "Conflict Without Malice":
"For the whole of my political life I have listened to the party speakers advocating State ownership and control of the coal mines and I have myself spoken of it as the primary task once the Labour Party was in power. I believed, as other members had, that in the Party archives a blue-print was ready. Now, as Minister of Fuel and Power, I found that nothing practical and tangible existed. There were some pamphlets, some memoranda produced for private circulation, and nothing else."
That is how nationalisation was done. It was put through hurriedly and without due preparation. There was no blueprint. What the right hon. Member for Easington found on his desk was not a blue-print, but a pink smudge. From that he had to do his best. The present position has grown from that position. The tests put forward by the right hon. Member for Leeds, South have all failed. Now the Government are faced with the difficult but necessary task of putting this vital industry into shape.
6.24 p.m.
Miss Jennie Lee: One would have hoped that by now it would be possible to discuss such issues as the selling price of coal and the quality and grading of coal with a certain amount of common knowledge in all parts of the House, and with some measure of fair play in the arguments. At one time hon. Members opposite resisted the nationalisation of the coal mining industry, but that is a long time ago. I do not think that any of them would now advocate that coal should again return to the realm

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of private enterprise. There is not the slightest likelihood of any take-over bids for the coal mines of Great Britain.
When we last had a debate on the Coal Board's affairs, I was interested to hear hon. Members opposite beginning to get down to the realities of the issues. Instead of having a knockabout turn from the hon. Member for Kidderminster (Mr. Nabarro), about stones in coal and lazy miners, we applied ourselves to the problem: how was it possible for a compact, highly exposed industrial community like Great Britain, so sensitively dependent on its export trade, to run its major industries if some products—steel products and those of I.C.I., for instance—could command an economic price, while coal was sold at a social price.
That is the essence of the issue. How absurd it is, remembering this, for us to be treated to the kind of homily which we have had from several hon. Members opposite who have talked about coal not paying. In the last ten years, there have been at least ten occasions when the Government and not the Coal Board have decided the price of coal. Those decisions have been made while coal still commanded a seller's market. I go back to 1947 and include events which took place during a Labour Government as well as during Conservative Governments.
On the first occasion when the Coal Board asked that the price of its commodity should be raised, it was refused. There were four occasions on which it asked for an increase to be considered, but instead of getting the increase for which it asked, it was given less than it asked. I do not want to weary the House with too many details, but I have every date in my possession at this moment and can give any hon. Member who wants it specific information.
There were at least four occasions when the Coal Board asked for an upward adjustment and was given not all it asked for and not when it asked. There was more than a suspicion of dirty politics once or twice in the adjustment of the date of increases. What nonsense it is for the House of Commons at this time to talk about whether coal pays! Whether it has paid has depended on the price it commanded back through the last seven, eight or nine years, and that price was determined by the Government.
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If the price over those years had been higher, instead of showing a deficit it would have been showing a profit and would have been able to compare fairly with other industries when it came to providing money for capital development. The first thing I want to say to my farmer friend opposite who has just spoken is that no one can make a profit by selling coal, or potatoes or turnips if the price of the commodity is fixed by the Government, and if the Government deliberately fix that price below what the market would bear.
Successive Governments, Conservative and Labour, have behaved in that way because when we are dealing with a nationalised industry we have a different morality from when we are dealing with private industry. Once an industry is nationalised, no one wants it to profiteer. Everyone wants it to give good service, and efficiently to produce at the minimum price, not the maximum, while also making allowance for development capital. Our post-war Governments did not want to make a great profit out of coal.
The hon. and gallant Member for Dorset, North (Colonel Glyn) knows a great deal about agriculture. He will forgive me if I say that he does not seem to know very much about mining. He knows that there are many obsolete farms, and many small farmers who cannot make a go of it, and that successive Governments have carried out a policy, which they claim to be in the national interests, of providing money for agriculture to build up its resources. I have never heard of any hon. Member opposite who considered it a reproach to the farmer, the agricultural labourer or the farming industry in general that millions of pounds of public money have been shovelled into the industry. Why is there one morality for farming and another for coal mining?
Mr. J. E. B. Hill: Surely agriculture differs from coal mining in that the latter is an extractive industry and the former a productive one. Also, in the case of agriculture we are supporting a home industry against large world surpluses which may temporarily be available. That is not the case with the coal industry. Coal imports have been very expensive.
Miss Lee: I am afraid that the truth is the exact opposite. We can buy cheaper food from abroad than we can grow at home, but we cannot buy cheaper coal from abroad. There is no substance in the hon. Member's point.
I want to talk as simply as I can, and I apologise to those of my colleagues who are intimately acquainted with this problem if they feel that I talk too simply. But I do not apologise to those hon. Members opposite who, year after year, bring out points of prejudice in these debates and do not attempt to give the public the true facts of the situation. I have dealt fully enough with the fact that it is the Government who decide the selling price of coal and who, therefore, during all these years of a seller's market, have decided whether the industry shall make a large or a small profit, or no profit at all.
Just as, under the beneficent rule of the party opposite in the years before the war, many of our farms were allowed to get into a derelict condition, so were our coal mines. It ought not to be necessary to make these primitive and elementary points, but. I repeat, I must make them for the sake of some hon. Members opposite.
One reason why private enterprise has no wish to take the coal industry back again is that it was allowed to get into such a derelict condition that not sufficient private capital was available to put it on its feet again. We had reached the stage where there were no easy profits in coal. Therefore, the nation had to come to the rescue. When hon. Members complain about the price of coal they should bear in mind, as was pointed out by my hon. Friend the Member for Ince (Mr. T. Brown) and others, the expenditure that has been necessary to bring many of our obsolete coal pits up to date. I should have thought that that was fairly obvious, and that hon. Members opposite would be taking a little more pride than they are in some of the figures given today, which show how immensely greater is the output per man shift in many of the collieries which are now being modernised.
I now turn to the haunting sadness of the fact that, once again, the colliery towns are frightened by the shadow of unemployment. I grew up in the Scottish coalfields; I have certain associations
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with the Welsh coalfields, and I am fortunate enough to be the Member of Parliament for a Midlands coalfield constituency, where the coalfield is expanding, and we do not have the problem of derelict pits to the extent that that exists in Scotland and South Wales. The Parliamentary Secretary tells us that on his reckoning, by closing down the least efficient of the pits 4,000 miners will be put out of work. That is a very large figure in terms of human suffering, but a very small one in terms of the resources required to provide the men concerned with alternative employment.
Hon. Members on this side of the House have never stated that it is the responsibility of a Government to promise any man or woman that he or she can go on forever with the same job. As Socialists we do not believe that. But we have said that it is the Government's responsibility to see that a job is available. Miners will not man the barricades in order to keep obsolete pits open if they can be provided with satisfactory alternative work.
There are two ways of tackling the problem of providing this work. One is to bring light industry right to the points where unemployment exists; the other is to see that there is an adequate transport system in the area, so that the men who are caught in a village where no work is available can travel in comfort to a new place of work even though it may be five, ten, fifteen or twenty miles away. In terms of social furniture this would mean far less expense than uprooting them, for they would still have their homes and schools, and all their normal community associations.
The Chancellor's predecessor came to the House in an hysterical condition more than a year ago and told us that we had to cut back on every front. Nobody would question the fact that, last year, we produced roughly £1,500 million worth of goods less than we could have produced if we had been using our coal, steel and other resources to the maximum. Why ask a Government who are responsible for economic turpitude on that scale to deal with the problem of 3,000 or 4,000 miners? It is too much for them.
The whole background of this debate is simple. We do not have a surplus of coal. Would anyone say, in the month

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of December—when we all have personal knowledge of families who have not enough coal to burn—that we have surplus coal in this country? We could use up our surplus overnight if we had a Labour Government. One way of doing this would be to carry out the Labour Party's pledge to the old-age pensioners straight away. Many of them could use more coal than they are using now. The answer in respect of the coal industry is the answer for British industry as a whole: we must have a Government with a planned economy, and that planned economy cannot stop at coal.
Sir I. Horobin: To be fair, not a single ton of these undistributed surplus stocks of coal could be burned in any old-age pensioner's grate; it is all smalls.
Miss Lee: I understood a previous hon. Member to say that the surplus coal consisted of two categories; about 50 per cent. of it was the lowest quality coal but about half was coal which could be consumed domestically in one form or another.
Sir L Horobin: I am not making any debating point. This surplus is all smalls and fines. It cannot be used, or no appreciable proportion of it could be used, in domestic grates. Sooner or later, and I think sooner rather than later, it will be burnt in its proper place, which is in the power stations of this country.
Mr. William Blyton (Houghtonle Spring): The Minister cannot have seen the Durham coalfield, where there is any amount of good class coal which could be used in any grate.
Miss Lee: If the hon. Gentleman had seen some of the coal which we picked up and used in 1926, he would be astonished at what can be burnt. I do not want to exaggerate and to talk about millions, but certainly there are hundreds of thousands of families in this country who, if they had just a little extra purchasing power, would buy a little extra warmth, an electric fire may be. That is one way of absorbing this inferior coal. It is all a matter of social planning and caring about such human needs.
I wish to attempt to answer the question, that has been asked today repeatedly, how can we bring down the price of coal? To begin with, I am
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disturbed about what is being done by some coal merchants. The Coal Board and the Government advise the price at which grades of coal should be sold. An investigation into this situation is urgently needed. We have every reason to know that there are coal merchants who mix the various grades of coal and sell it at top price. If the Government are concerned about the coal industry, about the good name of the Coal Board and the reputation of our miners, they should set about rescuing the industry from this situation. Nothing causes more heartache among housewives than to find that they have paid the top price for top-grade coal and have received something which is nothing like the commodity which they thought they were purchasing. I suggest that we should look carefully into everything that happens from the moment the coal leaves the pit surface until it has been burned in the industrial furnaces or at domestic firesides. In that way, we should discover means of closing a number of gaps.
Coal cannot be produced without the use of steel, and too high a price has been charged for the steel used in the coal industry. We have had an expansionist policy for coal. The Government, in their wisdom, have been encouraging coal miners to go all out. They have told the miners that they would never be unemployed again, and that there should be maximum production and minimum prices.
The Steel Board has been very "canny". We are in trouble, and unless the Government keep up a sufficient margin of unemployment, we shall be in greater trouble; because our steel production is not keeping pace with what ought to be our industrial needs in the next year or two. Why is it that almost every time the Coal Board has asked for an upward adjustment of prices the Government have refused its application? Why have the Coal Board's finances been cut and why have there been repeated postponements? Why, when the steel industry has asked for an upward adjustment in prices, has it been given generous consideration by the Government? Why is that? I am making allowance for the complication resulting from the fact that the steel industry is partly publicly and partly privately-owned, but it has been given generous consideration.

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If we look up the figures, what do we find? We find that the steel industry is sharply over-charging the coal industry. We find, for instance, that the Steel Company of Wales made £19 million in 1957 against £14 million in 1956, and that its dividend money went up from £589,000 to £1,380,000. That is too much. It is profiteering. I suggest that the reason why hon. Members opposite are so keen to keep the steel industry in private hands is that they, somehow, have an arrangement—although the industry is semi-publicly owned—by which they can get the prices they want for steel and Government sanction for upward adjustments in the price of steel which cannot be obtained in the case of coal.
The United Steel Company made £20,470,000 in 1957 against a figure of £14,700.000 in 1956 and the dividend went up from 8½ per cent. to 11½ per cent. Colville's made £11,861,000 in 1957, which was £3 million more than in 1956, and the dividend went up from 10 per cent. to 13 per cent. South Durham Steel made £3,760,000 last year against £2,120,000 in 1956 and the dividend went up from 7½ per cent. to per cent. This represents only a small corner of what is going on.
If Great Britain is to keep the place that she should occupy in the world; if she is to play the game, not by some, but by all of her citizens, it is intolerable that we should have an economic price for some commodities and a social price for others. I think it was the hon. Member for Kidderminster—I apologise if it was not him this time, but he is usually the whipping boy—who said that we must have another investigation and make quite certain that we are getting our money's worth.
It is not so long ago that Sir Alexander Fleck, the leader of I.C.I., acted as chairman of a board of investigation into the coal industry. Sir Alexander Fleck is a high priest of private industry. He does not believe in nationalisation and economic planning. On the grounds of elementary fair play, I suggest that it is about time we had a board to investigate the affairs of I.C.I., and a great many other large monopolies in this country, which we have every reason to believe are over-charging.
Mr. Hamilton: Let the leader be a trade union leader.
Miss Lee: Certainly, and let us pick a good one, someone who is just as keen on nationalisation and economic planning and the economic good of our whole community as is Sir Alexander Fleck on keeping the profitable sections of British industry in private hands.
If we could make that kind of approach, we might begin to inject a little sense into these matters. We are living in a strange, transitional society, in an in-between world. There is one law for the nationalised industry and another for private industry. It is all very well for the State to have to take over obsolete rolling stock and railways and mines, and to be constantly criticised, but all the nice juicy plums from which profit can still be easily extracted have to remain in the hands of private enterprise. That is the kind of world in which hon. Members opposite believe; it is the kind of world which we on these benches detest, and that we will do all in our power to change.
6.48 p.m.
Colonel C. G. Lancaster: The hon. Member for Cannock (Miss Lee) speaks with charm and sincerity about an industry with which she has been associated for many years. I do not agree with all that the hon. Lady says, but I propose to give her support on one point to which I will refer later in my speech. I wish, first, to get back to the basic problem of the situation we are discussing. It is, of course, the change-over from the conditions of a sellers' market to that of a buyers' market, with all the problems that that involves.
I recognise that the Coal Board has tackled this matter with the best of its means, both in relation to costs and regarding more sensible proportions of the large and small coal which it is producing. Having said that, I must also say a word of criticism. Sellers' and buyers' markets are part and parcel of the normal economic laws. They are bound to happen from time to time. No prudent board of management, whether nationalised or otherwise, can assume that it will live continuously in a world of sellers' markets. If we look back over the years, it is surprising to see how all the plans and proposals of the Coal Board seem to be based on the assumption that a sellers' market will continue for ever and a day.

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Of course, that could not happen. Indeed, eighteen months ago it was becoming obvious, first in the drop of world commodity prices, and then in a recession in this country and elsewhere, that the end of a sellers' market had been reached and we were in for a period—I hope not a very long period, but certainly a period —of a buyers' market. It is only prudent, when we anticipate such a situation, to take such steps as are possible to cushion the economy or the industry against this possibility, but what, in fact, happened in the industry? It was production at any price, and costs rose.
There was the introduction of the type of power loading machinery which was most wasteful of the coal itself, an immense increase in shot firing, the introduction of skip winding and vertical chutes, all of which were making for the degradation of the article and were going to create immense difficulties when the change over had to occur. Now the Coal Board is faced with these difficulties.
Mr. R. Moss (Meriden): Is it not true that those difficulties were anticipated to occur in the late 1960s and the fact that they have to be faced now has deceived both the Coal Board and the Government?
Colonel Lancaster: I do not quite follow that point. Until we emerged into a buyers' market few, if any, of those steps were taken. That is one of the main reasons why we find ourselves in the particular difficulties we have today. During this period there was an almost total disregard of export markets. The effect of these things has been twofold. First, there has been the building up of stocks. Here I want to try to get the problem into reasonable proportions. We need have no worry over the distributed stocks. They are coals for which there is already a known sale. In undistributed stocks there seems to be some variation, certainly in opinion and in regard to facts.
In this, I find myself on the side of the hon. Lady the Member for Cannock. I was discussing this matter today with members of the Coal Merchants' Federation. It gave as its opinion that 50 per cent. of the stocks were, as the hon. Lady said, untreated smalls, fines, and the like, and the other 50 per cent. were the normal range of coals, although they did not include the larger sizes. I
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think that that is probably nearer the mark. I cannot believe that these men, who have spent their working lives in the industry, can be very wide of the mark.
We have to look at those stocks with a great deal of care. I do not think that the 50 per cent., about 9 million tons, of untreated smalls will lose their quality, which, in the first instance, is not very high, but nevertheless, they will represent a very real problem of sales. There are only a certain number of directions in which those untreated small can be sold. First, and by far the largest consumer is the electrical industry, which already has its commitments before it for a long period ahead, and a certain range of the bigger industries which pulverise coal and burn it under water tube boilers.
The market for that is small and I see no immediate prospect of any of that coal going, short of dispensing with it at cut prices in the export market. I do not think that that is necessarily a very wise thing to do, but it would ease the burden on the requirement for moneys, although it would have a very injurious effect on the trading accounts of the coal industry.
As to the other 50 per cent.—I am still of the opinion that it is not confined to untreated smalls—there must be a considerable degree of degradation and loss occurring. There have been a number of articles recently in technical papers seeking to claim that the loss in calorific values and the like is of an insignificant nature. That goes against all experience I have had. I believe that, from the process of oxidation, combustion, fragmentation and the like, it will be found that when these coals are brought up very real loss will have occurred. I am wondering how much longer the auditors to the Coal Board can go on accepting these stocks at the prices at which they were originally put down. I know that there are considerable allowances being made for various matters in regard to laying this coal down and taking it up and to the loss of revenue, and so on, but on top of that I believe that there are very real losses occurring. When the time comes it will be found when taking up 50 per cent. of the stocks which have accumulated a big gap will appear in the accounts of the industry for that reason.
I want for a moment to deal with the debate we had in July, which is the annual review of the previous year's working of

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the coal industry. I find it quite extraordinary that no reference whatever was made from the Government Front Bench to the question of costs or proceeds. If the ordinary board of a company, in its annual review, particularly during bad time—when referring to the year's results—could,get away with leaving out any reference either to costs or proceeds it would be making a great mistake. My hon. Friend the Parliamentary Secretary need not feel unduly humble about this, because during a period of more than four years in debates in this House, spokesmen from neither Front Bench have mentioned the word "costs" in the annual review, so this is in line with past precedent.
Nevertheless, it is important at this time because the question of costs comes very drastically into the matter we are considering today. The loss on the year is, very fortunately, no more than about £5 million, but costs are showing themselves in the proceeds of the industry and it is in the proceeds of the industry that the competitive aspect emerges. We find ourselves today with the rise in the importation of oil at the expense of coal for use in an increasing number of industrial concerns.
We cannot reasonably oppose that. For many years before the war I was on the Coal Utilisation Council. One of our main purposes in those days was to see that coal held its place as against imported oil. In those days there was a wide margin. We had prices on our side almost to the tune of four times. Unfortunately, the margin today, the gap, is narrowed. The difference between the price of oil and the price of coal is a very narrow one.
I would not myself be altogether despondent about this because I believe that, in many instances, coal could hold the field as against oil. I think that the right hon. Gentleman the Member for Blyth (Mr. Robens) was perfectly justified in saying that particularly in power stations it could be shown, and can be shown, that pulverised fuel burned under water tube boilers can be not only as efficient, but as cheap a commodity as oil. I very much hope that the process, at the time inevitable, of the installation of oil-burning appliances in power stations can, in due course, be reversed and some part of the low-grade fuel can once again find its natural market.
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While talking about markets, I wonder whether a small advantage could not be obtained if the Minister of Housing and Local Government, who, the other day, made a statement about grants which could be given for the improvement of house property, would, not in the areas which are clean areas but throughout the country, be prepared to allow some part of those grants to be directed towards coal-burning appliances, which would enable the householder to make use of the less expensive qualities to burn in the household grates. That might mean some improvement in the direction of these very large stocks which we hold.
I want to say a word about exports. It was emphasised the time that we discussed the coal industry that it was wholly unrealistic to imagine that we could have maintained the export market at a time when every ton of coal we produced was required for our own use and when, indeed, we were importing expensive dollar coal. On the face of it, that looks a very reasonable argument. But it is not the first time in the history of industry that export markets have to be retained at a high cost during periods of a sellers' market. It is not always wholly unwise to expend money in that way. It forms a natural cushion to meet the change-over from the sellers' to the buyers' market and, indeed, it would have formed on this occasion a basis for further expansion in the export market.
What is wholly unrealistic is to imagine that we can get into the export market by dumping unwanted coal. That is not the way to build up the export market. It is a long-term matter. If it has to cost us money during the period of a sellers' market, it is not a wholly unwise thing to do. Indeed, money, whether in the form of capital or otherwise, is as wisely spent in building up markets as it is in reconstruction or new development. It is unsound to think that this is otherwise.
I ask the Government to recognise that the expansion of our export markets must be a primary consideration in the interest of the coal industry as a whole. We have talked today about the effect of these quite reasonable cuts which have been made by closing down wholly uneconomic pits and the like, but, as has been rightly said, this results in many human tragedies. It means possibly only 4,000 men, but 4,000 men having to lose

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their livelihood in their traditional work. A few of these 4,000 men may find jobs elsewhere, but the great majority of them have now to face a phase of unemployment which may continue for the rest of their lives. Rather than do that, I feel that every effort should be made in creating a natural market for our surplus coal, which alone is by export.
I know that it is said that it is impossible now to export to the Continent of Europe. It has already its own piles of coal and coal coming in from America. I know all that, but it has been coming from America because we neglected this export market. Although it may not be possible now to do it, there will come a time when it will be possible, at the end of these long-term American contracts, once again to get into that market and I hope that we shall spend all our energies in doing so.
Finally, I must say a word about the capital expenditure in this industry of £108 million. Of course, we must go ahead with capital expenditure. Of course, we must develop new mines and reconstruct old ones. But we are justified in saying, "Is that money being spent efficiently?"
We hear in these debates a good deal about O.M.S., but we hear very little about O.M.Y. O.M.S., on its own, can be, and very often is, a fictitious guide. O.M.Y. is a figure on which, in the last resort, all industry must depend. Based on that factor, when we look at the second plan, "Investing for Coal", I very much regret to say that at this stage of development the plan is further behind than was the first plan for coal at a comparable date.
We are aiming for a figure of 319 tons O.M.Y. by 1960, twelve months' hence. I very much doubt whether we are travelling now at any better figure than 294. It is pure pie in the sky whether we are in hail of what we are aiming at. It does not matter whether the level of production in the country is 210, 200 or 190 million tons per annum. What does matter is the level of efficiency with which we are expending these large sums of money. I imagine that every hon. Member in the House feels that it is essential that we should go on with development. It is equally essential that we should scrutinise this expenditure
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very closely and discover why we are falling so far behind in the second plan. It behoves us to take a very careful look at how that money is being spent.
I want to end on this note. I have been interested in the coal industry for many years and I do not for a moment despair of it. But great changes have to occur, not changes of ownership but changes of control and of organisation. I believe that the Government and my right hon. and hon. Friends are well seized of this point. I believe that they recognise the problem, the complexity and deep severity of the situation in which we find ourselves. I hope that they will grasp the nettle before it is too late.
7.10 p.m.
Mr. Joseph Slater: We have listened to a very interesting speech by the hon. and gallant Member for South Fylde (Colonel Lancaster). Many of us on this side of the House are aware of the interest which he had in the industry before nationalisation. I shall seek to develop some of the points he raised as I proceed with my speech.
First, I should like to compliment my right hon. Friend the Member for Blyth (Mr. Robens) and my two hon. Friends, the hon. Lady the Member for Cannock (Miss Lee) and my hon. Friend the Member for Bothwell (Mr. Timmons), on their speeches. Many debates have taken place on this industry during the last eleven years of nationalisation. Pleas have been made in the past by hon. Members opposite that we ought to take the subject of coal out of politics. Criticisms have been made of those responsible for the operation of the industry and their praises have been sung. I do not doubt that the pattern will continue to be the same as long as these debates are held in this Chamber.
Over the last eleven years agitation for increased production to meet the demand of the home market has ever been to the fore. The response to that appeal has been shown in the figures of the yearly returns which we have had presented to us. In my opinion, the National Coal Board ought to be complimented on the way in which it has used the existing capacity of the industry to increase production since nationalisation. It ought not to be forgotten—and I remind the House of it—that increased mechanisation and general improvements

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in working succeeded in raising output from this industry by no less than 12 per cent., and this took place in spite of the technical difficulties which have had to be overcome.
The industry has been able to show an impressive financial record, which has upset the pessimists, and this was mentioned by my hon. Friend the Member for Cannock in her speech. They never believed that this nationalised industry could have the success which it has had since vesting day. Profits totalling over £100 million over the period of nationalisation to some of the critics have not been of great importance in view of the heavy capital expenditure involved. That may be a fair criticism, but it is important that we should bear in mind the technical difficulties which have had to be overcome in the industry. In the circumstances, I do not believe that this is unreasonable. If we have now reached the position in which we are making comparisons with the rest of Europe, let us not forget that since nationalisation British coal has been the cheapest.
We can expect criticism in an industry like this. I am one of those who believes in criticism, if it is constructive, but to criticise for the sake of criticising leads us nowhere. I therefore ask that the House should reflect a little, should see what has taken place and should see what is the cause of the present position and the reason for the application for this money for which we have been asked today.
Before 1945 the consumption of coal in this country was running at the rate of 179·4 million tons a year. By 1956 it had risen from that figure to 218 million tons a year. In other words, the consumption of coal was on average rising by 3 million tons a year. It may be argued that we have had full employment and that full employment has brought with it an increased consumption of coal. It was accepted by all parties interested in the great project of the nationalisation of this industry that the total fuel consumption of the country would reach no less a figure than 300 million tons a year of coal equivalent by 1965. The mining industry was earmarked to find 240 million tons of that and atomic energy 18 million tons, and the oil industry was to provide the balance in order to meet the deficiency.
What is the position today? Coal consumption dropped by no less than 5
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million tons in 1957, which was a complete reversal of what had been expected in the first place. Instead of a national agitation for more output to meet consumer demands, we have a recession in consumption. The importation of coal has almost ceased, after it had been a heavy burden imposed on the National Coal Board, carrying into its accounts £70 million to meet a liability imposed upon it by the Government of the day.
Certain reasons have been given for this recession in the consumption of coal. Many are based on external factors. I want to emphasise one of the points which my hon. Friends have made. As I see it, the Government's policy over the last two years to meet world economic difficulties has been responsible in a very large measure for the aggravation of the problems confronting not only the mining industry but the whole economy of the country. The unemployment figures are still rising and it naturally follows, if we contract employment, that there is a smaller demand for coal. It must be understood that we on this side of the House, as representatives from the mining industry, will not stand for a cheap labour market, nor will we stand for the worsening of the conditions of our people within the mining industry.
In the last few days we have seen reports in the Press to the effect that forty pits are to be closed. We have now been told that the number will be thirty-six. I understand that 12,000 men are to be affected. What a different picture from that of eighteen months to two years ago. What was then the cry? The cry raised in the House then was for men to go into the pits. We were told that we ought to attract the younger element of our towns, cities and villages into making a career within this industry. Now extended hours of work and overtime, which the nation has called upon the men in the industry to work in the years of shortage, are almost extinct and we have been told that over 30 million tons of coal is in stock. Of that total, over 18 million tons is on the ground and it is costing up to 13s. 6d. a ton to put it on the ground and to lift it up again. Side by side with this situation, the use of oil is growing apace.
It is easy for me to understand the reason for the conclusions reached by the oil industry. What has been said is that

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the present circumstances of the mining industry, with a stock of 18 million tons of coal on the surface, are only temporary and that before long the fuel demands of the country will increase at a rate which will allow plenty of room for expansion of both oil and coal. By the industry and to those responsible for running it the position is not viewed in that context. The conditions of the early postwar years are unlikely to be repeated. We shall be faced with competition, and it may be that some tonnage will have to be sacrificed.
Because of the coal shortage, the Government's policy over the last few years has been to encourage the use of alternative fuels, but in view of the present position in the use of oil at power stations, in my opinion the policy of conversion should at this stage be reversed. I know that I shall not take everyone with me in that opinion. I would, however, point out that nine power stations have gone over to oil and that four more will complete the programme of converting to oil in the next few months. When this has been completed, the annual oil consumption by these power stations will have reached a rate equivalent to 6 million tons of coal.
I pose this question: are we to stand by and see this natural fuel—natural to our own country—being put to one side in the interests of the oil companies? Are we to stand aside and to see our men put on the dole because there is no work for them? Is village life and all that it means to be broken up again, as it was in the past, because of the lack of a fuel policy?
If I feel heated about this, it is because of my past experience inside the industry. Hon. Members will understand why I ask those questions, when I tell them that I worked below for over 30 years and know the conditions that prevail there.
Why have the Government not come to a political decision to turn over these new generators to coal? We are told that 12,000 to 14,000 men are likely to be finished when these pits close, but to make those generators coal-fired would give employment to 8,000 miners. This country owes something to the men in the industry. When other industries were working a five-day week the miners
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worked Saturday shifts to give the increased production then being asked for, and that production ran at a rate of over 11 million tons a year.
The closing of these collieries will throw out of work the 12,000 men who have been referred to, but, in addition, other collieries are carrying on with a smaller manpower than they had two years ago. My own colliery is to reduce its manpower by no less than 250 men at the end of this year. If that is happening at that colliery the same will be happening at others.
If these pits close, what is to happen to the men who worked in them? Are they just to be discarded? Whatever may be our opinions about the closing of these mines, there is a good case for compensating the men for loss of their employment. It should also be remembered that just a little over twelve months ago the plea was for the young people to go into the mines, to make mining a career. What of the promises then made?
It will be generally agreed that opencast mining has played a very important part in increasing our production of coal. I do not suggest that we could have done without it, and I appreciate that a great deal of capital has gone into it. It is true that profits have been made, but it is also true that, since 1952, 80 million tons of coal have been extracted by this method. I readily concede that had it not been for opencast mining we would have had to increase our imports of coal in order to meet the home demand. Again, had it not been for opencast production, we could not have supported even our limited export trade.
Let us not forget, however, that opencast mining was brought in to meet an emergency. The argument now advanced is that this type of mining should be allowed to continue because of the heavy investment in machinery, etc., and the profits accruing from it. Since this form of mining was introduced in 1952, it has brought in about £42 million profit to the industry, and has, no doubt, helped to balance unprofitable production from deep mines.
Nevertheless, we must remember that opencast mining was an emergency measure, and, bearing in mind the numbers of men likely to be thrown out of

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work in the near future, we must seriously consider whether it is sound economics to continue this form of operation because of its profitability, and to finish men who will later be required should the industry expand. I understand that opencast production is to be cut by 3 million tons. When I think of the present situation, I wish that the cut was to be twice as big.
I should like the Minister to tell us what it would cost to compensate the opencast contractors if their agreements were ended, and I should also like him to tell us what are the hopes for the export trade. In this month's Colliery Guardian it is stated that the Board has recently decided to reduce the export prices of many of our coals for 1959—in some cases reducing them even below the inland prices.
We all know what is happening on the Continent as the result of long-term contracts with America. What are our hopes of recapturing what were our traditional markets?
At one time, various countries were always ready to take our coal, even at prices that they regarded as rather high. As a result of our heavy home demand we had to let those markets go, and we have probably very little hope of recapturing them until those long-term American contracts end. My own County of Durham once depended, as did South Wales and Scotland, mainly on exports. We were called the exporting areas, and we are, therefore, naturally very interested in the export position.
We all appreciate that the Board's present problems are not easy of solution. For instance, in 1956 we were able to sell 1(1 million tons for export and foreign bunkers. The forecast is that this year we will be very fortunate indeed if we export 5 million tons. We must be honest about this. If 1959 does not see an upturn in our economy, sales of coal could slip further back, with devastating results.
Therefore, the Government have here a responsibility that they cannot shirk—unless, of course, they still feel that to balance the economy we should let things rip with a resultant increase in unemployment, which already stands at half a million workers. That policy is not new to us. We have seen it in operation
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in other industries. We have heard appeals in this House from Lancashire and elsewhere for action to be taken to offset rising unemployment. Overproduction is not something new. We have it in America and in Europe.
Everything possible must be done to stimulate the sales of this great commodity. I remember that when the late Ernest Bevin was Foreign Secretary he addressed my mining colleagues at the Durham Miners' Gala, saying "You give me an extra 3 million tons of coal, and I will be able to negotiate much better in the councils of the world on these great matters that now confront us." Today, we have too much coal. Therefore, we must learn to sell it. I believe that the marketing section of the Board will have to make a much more vigorous approach to the sales problem than it has done in the past.
Mr. Nabarro: Hear, hear.
Mr. Slater: Bearing in mind all these economic factors, we must look again at our fuel policy, make the greatest possible use of our indigenous supplies, and vigorously tackle the problem of the disposal of our coal.
As I see it, the Government ought to go ahead with a national fuel policy designed to secure the maximum use of our indigenous fuel and the limiting of unnecessary oil imports. A policy of this nature, I believe, apart from making the maximum use of our indigenous resources, would help the country at the moment in its balance of payments. I know that these views have been expressed previously through the union of which I am a member. If the Government are not prepared to proceed along these lines, then we ought to be told from the Government if they have any policy for fuel at all, and what it is.
It is not only us here today who are asking this of the Government, but the men in the industry as well. I believe that the men are awaiting the result of this debate, and that they will want to know why it is that the Government are prepared to see the inland consumption of coal going down much more than it did last year and oil consumption going up. We shall want to know why oil imports should reach the figure of £440 million for last year against the better utilisation of the home product. I say

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to the Minister and to the Government that these are the questions which will be asked by the men who are in danger of losing their jobs. Because of that danger, they want to know why.
The News Chronicle, in its caption chart today, said that miners' wages had gone up from £6 13s. in 1947 to £14 2s. 9d. in the second quarter of 1958. As it is set out, it would appear that our men are receiving this figure of £14 2s. 9d. a week. I want to place on record the fact that, even though the News Chronicle may really believe that it may have been doing a good job to present this chart in regard to the National Coal Board and the production of coal, inside this industry over 350,000 of our men working on the surface and underground have a fixed rate. Surface workers, before today's announcement, were paid £8 10s. a week, and those working below £9 10s. The announcement of the Tribunal will raise these rates by 7s. 6d. Therefore, the average figure today—although the News Chronicle does not say that it is the average figure—could be very misleading, both to the general public and the people inside the industry.
I want to say, in conclusion, that hon. Members ought to remember that two important Acts have been placed upon the Statute Book since this Government came into power. One is the new Mines and Quarries Act, for which we are very grateful, because it does not allow young boys to work underground until they reach the age of 16 years. The other is the Mining Subsidence Act of 1957. Both of these Acts have increased the liabilities of the National Coal Board, but little or no reference has been made to these Acts today.
I heard very little objection from hon. Members opposite when these Acts were going through the House, or of the effect which they would have upon the National Coal Board and its administration. I wonder what their reactions would have been if it had been suggested that, out of the global figure of compensation of £338 million which was earmarked for the old coalowners on taking over this industry, a certain amount ought to have been set aside to meet contingencies that might arise, as they are arising under the Mining Subsidence Act. I wonder what hon. Members opposite would have had to say to that. Instead of that, they threw
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all these responsibilities on to the National Coal Board.
Today, we have to accept the position as it is. The industry is faced with problems which even the National Coal Board cannot solve by itself. The National Union of Mineworkers, I have no doubt, through its representatives, will assist wherever possible, if they are given the full facts of the situation. I believe that they are big enough to face up to their responsibilities as a trade union, but, having said that, I must point out that this is not a one-way traffic, and that the union cannot be expected to make its contribution to the solution of these problems unless it is provided with all the available evidence, which the Minister has, whereby it can judge what is the best to be done in the circumstances. I hope that, as the position is developed, we shall see better prospects for those people who at this moment are looking with great suspicion because of the attitude that has been adopted in regard to the closing of pits.
7.35 p.m.
Mr. J. C. George: The hon. Member for Sedgefield (Mr. Slater) put his case with great feeling, and I can fully appreciate the strength of his feelings towards these collieries which are to be closed down. I come from a mining village, and I, too, know the pain that can be caused in these circumstances.
I will take up at the moment only one point which the hon. Member made, and I think it was a good point. It is what we are to do about fighting back and regaining our original export markets. Indeed, I would go further and say that that is not the whole question facing us, that there is one to which we should give even more attention. That is how we are to recapture the home markets —on merit, and not by any restrictions on the use of any form of fuel.
The hon. and gallant Member for South Fylde (Col. Lancaster) said, I thought very wisely, that at this time we should not be completely concerned with the present day, but should be very much more concerned with what is being got for the money being spent. The fate of the industry will not be settled here today. It will be settled underground, with the success or failure of the new coal plan, and by the results of mechanisation which

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will flow from it. I propose to look at what is happening with investment, because I think that is where the success of this industry will lie in the future.
There should be no doubt about where we on this side stand in relation to this great industry. It should be made quite clear from this side of the House that, whatever has been said in the past, no one here wants to see it become a failure. Everybody wants it to be a success. The nation has willingly poured out hundreds of millions of pounds in order to have an up-to-date and efficient industry, and the country is wondering today whether it will get it. It is also nervous about what is going to happen as the result of the expenditure of the £1,000 million, whether all the benefits which may accrue from mechanisation are to be absorbed along the road, with nothing left flowing to the consumer or the country.
I want to make it plain, first of all—and here I take up another point made by the hon. Member for Sedgefield—that we give full credit to the National Coal Board for the burdens, which ought to be incentives, which it has had to bear since nationalisation. The five-day week presented a heavy problem, and there is the two weeks' holiday, with the Coal Board having to make up the loss of one week's coal. Then there are the pensions schemes, welfare facilities and the new safety regulations, which are much more expensive than I think the House realises, and involve the labour of many more men than we imagine. Then we have the burden of subsidence, dust suppression and capital benefits still to come. I want to get the position of the National Coal Board in proper perspective and to give it full credit for what it has done.
I want to impress upon the House that I am aware of these burdens on the Coal Board, but, now, I want to look at the benefits from the money that has been spent. We have engaged in a very necessary campaign of reconstruction and mechanisation. This House has very willingly voted £1,000 million for that purpose, and that scheme involves the reconstruction of haulage systems, roadways, mining works, new shafts and tunnels and the installation of new machinery. We all know what is happening at the present time, and I want to see if it gives us a guide to the hopes we have for the future.
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Let us look, first of all, at shafts, and I spoke very strongly on shafts some time ago. At the present time, 26 new shafts have been completed, 26 are in the process of being sunk and 14 others have not yet been started. In the last few years, substantial progress has been made in shaft sinking methods, but even today —we must not deceive ourselves—with the improved ways of sinking shafts, it is still done more slowly than in any other mining country in the world. The National Coal Board last year mentioned a figure of 40 yards a month in Seafield Colliery in Scotland, and that was much above the average. It is, in fact, 11 yards a day.
When I was a young man of 20 I was working in a shaft. We were in the charge of a brutal Irishman with a choice flow of foul language, and we had to get four feet a shift. That was over thirty years ago. That represented four yards per day. Yet at Seafield Colliery the advance which is commended is only 1½ yards a day. The speed of shaft sinking all over should and could be doubled. I should like my right hon. Friend to tell us what is happening to the experiment in which a South African contractor has been brought to this country to sink shafts. I understand that this contractor has been sinking shafts here for some time, and it would be useful to know what progress is being made.
The shaft is one limiting factor. While it is being sunk, costly buildings are being erected on the surface, washeries, pithead baths and cleaning plants, etc., costing a great deal of money, and no return will be achieved until the coal is produced. The link between the shaft and the coal, and between the coal and the customer, is the tunnel. In the Report for 1955 the National Coal Board said that the new scheme involved driving 3,000 miles of tunnels in fifteen years, a gigantic operation. I estimate that that will cost £150 million, and I do not think it will be far out. Tunnels cannot normally be driven until the shafts are dug. Therefore, it is absolutely vital that the greatest vigour should be applied to driving these tunnels quickly in order to get coal as soon as possible and get a return on the capital invested.
The National Coal Board, in my view, has done all it can. In the 1957 Report it outlines what it has done. It states

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that it has used the most efficient methods of tunnel driving. It has created a demonstration mine in England, down which teams of men have gone to see how tunnels should be driven efficiently and speedily. Last year 90 per cent, of all the tunnels in Britain were power-loaded.
The Coal Board is not failing in its efforts to supply the requisite plant and demonstrate the proper methods. But in that same Report we are told that in 260 major tunnels 52 miles were driven last year. That is 7½ yards a week. The average rate of driving tunnels in Britain today is under 10 yards a week. At the rate of progress which is experienced today, with the most up-to-date and efficient methods, it will not take 15 years to drive 3,000 miles of tunnels; it will take 60 years.
It is right that we should examine these figures. In 1944 I was driving a tunnel in Scotland and I employed power loading. The Ministry of Fuel and Power hired the machines, and this system was employed in this country for the first time. We got the men interested in the job and they put their backs into it. Nine months afterwards we celebrated the achievement of a distance of 48 yards driven in one week. That was in 1944. Yet fourteen years later the average rate is 10 yards a week over Britain as a whole.
There is a great gap which must be filled. The present director of production of the National Coal Board said a fortnight ago in a report that 40 yards was easily obtainable with the present apparatus. That gap between 10 yards and 40 yards must be filled. If we can drive 40 yards a week, the job can be done in 15 years. If we can only get 10 yards a week it will take 60 years. This is a great problem which must be solved rapidly. Two of the fifteen years have already passed. This slow rate of tunnel driving is menacing the future of "Investment in Coal" and the whole success of the great venture.
After we sink our shafts and drive our tunnels we get into production, and we hope and pray that in these majestic new mines which we are driving—and they are lovely jobs; they are beautiful examples of fine engineering, though they are slow and costly—we shall be able to use
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modern appliances to obtain high output per man. I thought that the Parliamentary Secretary was particularly unfortunate in the example which he gave of the effect of modernisation on output. He chose a place with an output of 13 cwt. which when modernised was increased to 24 cwt. But 13 cwt. is a remarkably low figure, and 24 cwt. is not what we would expect after modernisation. This will not do. It must be substantially higher than 24 cwt., or we shall have no chance whatever of recapturing the markets.
Mr. David Griffiths: I agree that 24 cwt. will not do under modernisation, but I should like to know who is responsible for the fact that output is not higher. Is it the fault of the men, or the colliery managers? Whose fault is it?
Mr. George: I agree with the hon. Gentleman. It is not the fault of the National Coal Board, which has made all the facilities available. It may be that both management and men are to blame. The fact remains that 24 cwt. will not do.
Let me turn to the question of production. In the last twelve years there has been a campaign to modernise existing mines and create new ones, and it is right to examine what has been done in those twelve years and see what hopes there are for the future. As hon. Members opposite know, we have installed large numbers of locomotives, and wherever they are used they reduce the number of men needed and make work easier. In such mines one would expect to find fewer men employed, or more production. We are told in the Annual Report that every conveyor face in Britain today has a belt taking the coal away. That should mean a substantial cut in men employed, and those collieries possessing those advantages ought to have shown a reduction in the number of men employed or else a transfer of men to production.
We have seen an expansion in the use of face conveyors, and this, too, should have resulted in a reduction in men or greater output. In addition, in recent years power loading has been introduced, and its use has increased rapidly. Now we get 55 million tons from power loading and 30 million tons from new shafts and reconstructed pits. All these—loco-motives, gate conveyors, power loading,

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new shafts and so on—are benefits which one would have hoped would show results. We should expect either a higher output with the same number of men or the same output with fewer men. But neither of these things has happened. In spite of mechanisation, power loading and new shafts, we have the same output with the same number of men.
Mr. D. Griffiths: I am following the hon. Gentleman's argument with close attention. I appreciate that output is not as much as one would like, but can we have an explanation from him as to why it is not?
Mr. George: I am about to make certain suggestions. I have made a statement that, with all these benefits and all the millions we have expended on new systems and machines, we have the same output for the same number of men.
Mr. D. Griffiths: No, with fewer men.
Mr. George: Just a moment. I will remind the hon. Gentleman that the yardstick of comparison, a very sound yardstick, is found in the number of manshifts needed to produce 1,000 tons of coal. During the last four years, all these things I have enumerated have come to fruition and have begun to yield results. The effect ought to have been that the number of manshifts to produce 1,000 tons fell appreciably. Yet here are the figures, the Coal Board's own figures, not mine. They show a staggering consistency throughout the period when all these improvements took place.
In 1954, 629 shifts were needed underground to produce 1,000 tons of coal. In 1955, 634 shifts ware needed. In 1956, 634 shifts were needed. In 1957, 635 shifts were needed. Those are the figures for the period when we ought to have saved in the number of men required underground or produced more output. During that time, power-loaded coal went from 16 million tons in 1954 to 55 million tons in 1957, and we had 30 million tons in 1957 from new schemes.
Mr. D. Griffiths: Will the hon. Gentleman break down those figures and tell us the number of men producing the coal, the number of men doing development work, and the increase in the number of juvenile personnel, taking the management side of it?
Mr. George: No. Of course, I cannot break those figures down in that detail, although I admit that it would be useful. I have only the figures which come to us from the National Coal Board, which does not break the figures down. I can break them down to this extent, which would be useful; I can give the number of men at the face and the number of men elsewhere underground. The Coal Board did not give these figures in 1954, but, in 1955, the figures were 295 at the coal face and 339 elsewhere underground. In 1956, the figures were 291 at the coal face and 343 elswhere underground. In 1957, the figures were 290 at the face and 345 elswhere underground. That is all I can do to break the figures down, and those are the figures which the Coal Board give. They do help a little, as the hon. Gentleman will admit.
Something is plainly being lost along the line. The benefits are being absorbed. I shall be quite frank; it may be, of course—the hon. Member for Rother Valley (Mr. D. Griffiths) raised a valid point—that there is a vast number of men on development. I do not know, and I should be glad to have that information. Perhaps my right hon. Friend can help us, or perhaps we can find out from the National Coal Board. The fact remains that there is a substantial leak somewhere along the line. The saving is not coming from the money which has been spent underground in mechanisation.
The saving can be tremendous. I have been speaking of the number of manshifts per thousand tons produced. In Britain, the saving of one manshift per thousand tons produced represents a saving of £540,000 per annum. The prizes are glittering prizes, yet they are being lost. The Coal Board must find out why. There is a great reward for finding out and putting things right. These are Important matters. I am not trying to colour the facts. I am a technician, a mining engineer. I want to put the position clearly before the Minister and the Coal Board in the hope that they will be helped to focus attention upon the shortcomings.
Mr. Emrys Hughes: Before the hon. Gentleman leaves that technical point, may I remind him of the visit that he and I paid to one of the great new collieries

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in South Ayrshire, at Killoch? Is he satisfied with the rate of development at this colliery? Has he any constructive proposals to make?
Mr. George: The shaft is now down, and there is no rate of development at all. I have no idea of the rate at which the tunnels are moving. I have given the rate of advance of tunnels in Britain as a whole, including the colliery to which the hon. Gentleman refers. I am merely putting the facts. I have said that it has been ten yards. The Director of Production says that forty yards is possible. A rate of forty yards is needed to drive 3,000 miles in fifteen years. That is the gap.
Mr. Emrys Hughes: The hon. Gentleman made certain allegations about this colliery two years ago. Is it not a fact that it is now going into production, before the time which was expected?
Mr. George: I made no allegations against the management whatever. I made the broad, general statement about the shafts being sunk in Scotland, and I said that, in every shaft except one, there had been a fundamental blunder which condemned those shafts to being sunk far too slowly. In every shaft in Scotland —the hon. Gentleman has forced me into this; I had no intention of discussing it —the people there had only one bucket, and the farther they went down the slower their rate of travel. But that has been rectified. It was no criticism of the management.
Mr. Emrys Hughes: It is rectified.
Mr. George: That pit, of course, will not be in production for a number of years, so it cannot be said to be coming into production earlier than expected, though I very much hope that it will.
I want now to look at the broad picture of the industry. It is an industry in which I have spent many years, and it is an industry which hon. Members opposite know very well. I do not want it to be felt that the industry, because it is in trouble, must lie down and accept permanent defeat under the onslaught of oil, electricity, and now, even nuclear power. That is not the way to face the future, and it need not be. We can fight that onslaught. There is one nation which has fought back in its coal mining
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industry. In this century, coal mining in America has been on its back, in dire poverty, twice.
Mr. W. R. Williams: It very nearly is now.
Mr. George: Twice during this century the coal mining industry of America has been on its back, faced with the onslaught of the terrible three, electricty, natural gas and oil. The people in coal mining in America did not say that they had lost their markets and the advance of their three competitors was inevitable. They said, "We shall get together with the engineering firms which supply us and try to find a way out." They did do so. New contrivances were invented and were willingly accepted by the trade unions. This is the point, and everyone who has worked in the mines knows it. The miners of America said, "Yes, we will gladly accept your new machines", but, very forcibly, they said, "We must have a share of the proceeds".
Thus began what we know as the American methods. There is sometimes confusion between American machines and American methods. The American methods gave success, the methods which meant that one had the highest output possible from the machines in an atmosphere of co-operation. That is the reason for the great American success in raising output per manshift.
I do not underestimate the difference in conditions. I know American conditions very well; every year, I go down American mines. Of course, there is a vast difference, but if we take the last ten years, as Mr. H. E. Longden did in the Cadman Memorial Lecture a week or two ago, we find this comparison. Ten years ago, working in those good conditions, the Americans thought that they had reached the peak, and we thought that we were in more or less the same position. We thought that we were reasonably making use of our conditions. Yet what has happened during those ten years?
In America, the O.M.S. has risen by 60 per cent. Ours has risen by 13 per cent. The American miners today are producing eight tons per shift approximately, and we are producing roughly one and a quarter tons. Earnings in the American mines have risen 84 per cent. with a 60 per cent. increase in output. Ours have risen 107 per cent. with a 13 per cent.

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increase in output. The American miner is earning £8 a shift. The British miner is earning roughly £3 a shift. But the big J point, and the Parliamentary Secretary made it today, is that prices in America in the last ten years have risen 23 per cent.; prices here have risen 104 per cent. American coal is costing £2 a ton. Our coal is costing £4 2s. a ton.
I think there is a tremendous lesson to be learned from this. The atmosphere in America is one of co-operation. Small teams are working together. Small teams do not quarrel as much as big teams in our big pits. Small teams in America are making the best use of their machinery, sometimes getting fantastic results. In America the overlying atmosphere is one of getting the best out of the machinery, and getting the highest income possible.
That is what is wanted here. I believe that in this country today—I say this in all seriousness—the mines are not operating much above 50 per cent. efficiency. There is an immense gap in which gains can be made if we decide in this industry that it is co-operation and not conflict which we want. Let the National Coal Board set up a small team to estimate the rewards which could be won by the men getting together and making the best use of our pits and our machinery. That can save this industry, as the Americans saved their industry.
Our trade union leaders might take a lesson from John Lewis. Let the National Coal Board send them out to John Lewis and see him, or bring him here. He found the right way. He faced the situation the right way. He saw that his men got a high reward. The owners got maximum output. Prices were stable. When it was a question of closing down pits, just as we today have been sadly discussing closing down our pits, he did not raise the issues which hon. Members opposite have raised here. He said, "I will gladly look at contracting the industry and having far fewer pits and fewer men, but the men who remain must be more highly paid, the others can get a good reward elsewhere." That was his view. He was right.
What we have to do is to get back our market at home. I say we can have success if we can induce—I know it may sound a cliché—the men to agree to seek the high rewards from co-operation
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rather than from puny gains of conflict with the Board. Let us paint a new picture. The Vice-President of the United States told us the other day that we should think less of fears of Communism and more of the profits of free enterprise. Let us do likewise in our coal industry and think more of the rewards of co-operation and less of the puny gains from conflict. There are great rewards to be picked up. I hope the Board can get that atmosphere in the days that lie ahead, the result can be dramatic.
Mr. Woodburn: It looks as though many pits will be closed down, and the hon. Gentleman knows the situation very well. Would he say whether, if that atmosphere of which he speaks could be got in those pits, they could be saved from being closed down?
Mr. George: I have not the faintest conception of what pits are being closed down or what the conditions are.
8.3 p.m.
Mr. Iorwerth Thomas: I have no desire to follow the hon. Member for Glasgow, Pollok (Mr. George) in all the matters he discussed, but there was one thing he said which is calculated to leave a very bad and wrong impression. It was something he said about the relations between the miners and the National Coal Board since nationalisation began.
I do not know whether the hon. Member meant it to be thought—but he said—that what we want is a greater measure of co-operation, and the eradication of all the bitterness and hate that permeates industrial relations in many industries in this country. On that I just want to make this very important correction. The miners' unions have shown a greater degree of responsibility and moderation than any other organised union during the post-war period.
To have asked the miners in pre-war days to submit their wage claims to compulsory arbitration would have been to have asked for what at that time one may say would have been impossible. The moderation which has been shown all along by the miners in their relations with the Coal Board has been of an exemplary character. They have been prepared to submit their wage claims from time to time to arbitration, though had they

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wished—and this is the important point —in the post-war period to have exercised the power which they held they would have reached their present wage levels very much earlier than they have through the processes of compulsory arbitration.
The hon. Member is wrong in his inference or suggestion that what we want is a better spirit of co-operation. The record shows, it is in the official records of the Coal Board, that a very happy relationship has existed between the Coal Board and the unions. Successive Governments have paid compliments to it. It is true we have had a lot of go-slows and walk-outs, but I am speaking about the official unions of the miners.
I believe that in our discussion of the immediate problem tonight we are limiting our sight to a canvas which is really too small. One would be entitled to ask whether the present situation, ugly as it is, is not a portent of worse to come. We must, in this debate, relate the present position of the coal industry to the anticipations and calculations and all the plans of the past few years, for which we are all responsible, and which both Governments believed, from the facts in their possession, were accurate. Whether or not events have overtaken us, we are likely to remain within the long shadows cast by the new social forces which are now emerging. When we have the basic industries cutting back production and the consumer industries expanding, every economist will agree, I think, that there is something really socially contradictory in the occurrence.
To deal with the coal industry in its present plight we must take not only the short view and adopt policies to meet the present situation, but take very serious thought for the long view. We are likely to be so bogged down in and bedevilled by statistics as to lose the principles which are involved in this debate, but I must quote just one or two figures. Just to show what I have in mind, the Manchester Guardian or the News Chronicle today stated that by 1965 the increased consumption of oil would be equivalent to the displacement of 20 million tons of coal and that the production of energy by atomic power is also calculated to displace the equivalent of 20 million tons
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of coal. Therefore, we can say that, on those two counts alone, in 1965 the demand for coal will have dropped by 40 million tons.
We must also give full value to the fact that atomic energy is still in its infancy, and as the years roll by—ten years is a very short period in the life of an industry or a nation—with the development of more efficient and more prolific atomic energy power stations side by side with increased quantities of oil consumed by industries and domestic users, what is likely to be the picture in 1970 or 1975?
We cannot predict with any degree of accuracy. I wonder whether, if present trends continue, we are not facing a new industrial revolution. Oil is now coming to the forefront, because it is important and because of the military and strategic considerations mentioned by the hon. Member for Kidderminster (Mr. Nabarro) in his speech on 14th July, 1944—
Mr. Nabarro: It was 1958. The hon. Member is fourteen years out.
Mr. Thomas: Yes, it was 1958. The development of atomic power in this country will push even oil out of the way, as well as other fuels. Technical writers say that the future inevitably lies with the production of atomic power, eventually at a competitive price.
In the light of all these circumstances and trends—I intend to do no more than mention a third factor, the famous Zeta project, now in the hands of the back-room boys—we have some forms of fuel production which will challenge our present power and fuel policy. Not only must we take a very short-term view of the situation, but we must plan ahead to meet the new social forces which are emerging. The view of hon. Members on this side of the House is that in dealing with the immediate problem and the long-term prospects no Government can permit those forces to affect our society and economy by drifting blindly. There must be some kind of political interference. In the light of the changes which will inevitably take place, the Government have a responsibility. They must produce a fuel policy for the nation. If the changes I visualise are inevitable, the transition, in twenty or thirty years' time in my view, will be fundamental, and the Government have a responsibility to plan the future

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of the coal industry against that background.
To return to the present situation, the keynote of most of the speeches delivered from the Government benches has been an insistence that if the coal industry is to survive and to avoid deficits and coming to the House for additional borrowing powers, it must make itself competitive. Having regard to the financial burdens with which the Coal Beard is saddled—they have been mentioned by some hon. Members opposite—and the extra burdens which will be put on it as a result of the present crisis, I believe that in the foreseeable future the Board will be unable, through its own efforts, to fight for markets at a competitive price on an equal basis with oil or any other fuel. I believe that the time is now opportune for the Government to consider that problem from this point of view.
The hon. Member for Kidderminster always wants to test the financial success or the efficiency of the mining industry by applying the slide rule which is applied to private enterprise.
Mr. Nabarro: Hear, hear.
Mr. Thomas: I am very glad that the hon. Member has echoed his sentiments with a very melodious "Hear, hear." Let us assume that the Board was prepared to accept his advice. Let us assume that he was the Minister of Power.
Mr. Nabarro: The hon. Gentleman must not make these prognostications. Does he suppose that after my speech today, which was listened to by the Parliamentary Secretary, I could ever be the Minister of Power?
Mr. Thomas: The hon. Gentleman always applies the slide rule test which applies to private industry. Let us assume, by the wildest stretch of imagination, that the hon. Member became Minister of Power. Let us assume that he had the statutory right to give directions to the Board on the lines that he has been arguing. What would have been the result if he had been the Minister of Power for the last ten years?
Mr. Nabarro: Efficiency.
Mr. Thomas: For ten years we have had 167 pits showing a loss of more than £1 per ton, and another 40 or 50 have
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been showing a loss of between 5s. and £l a ton. Let us say that the total number of pits in that category has been about 220. If the hon. Member applies strict commercial standards to the coal industry, those 220 pits should have closed in the last ten years.
Mr. Nabarro Mr. Nabarro indicated dissent.
Mr. Thomas: What would have been the result? Deprived of the production of those 220 pits, the country would have faced a grave shortage of coal. Instead of possibly 12,000 more men out of work in the mining industry, there would have been a problem of mass unemployment and short-time working throughout industry. To have avoided such mass unemployment, we would have had to buy coal from America, and thus be faced year after year with a balance of payments problem.
Let us take another test of the hon. Member's obsession with applying private enterprise standards to a nationalised industry. Would he be prepared to apply those standards to price policy? This is a basic industry which in the post-war period has powered the country's industries with the cheapest coal in Europe. To have followed commercial practice, the Coal Board would have had to raise the price of coal. Assuming that the Board had been able to market coal at an economic price, it would have had to charge 5s. a ton more, and it could have charged 5s. a ton more to industry but excluded the domestic consumers from that price increase—and even the Federation of British Industries has admitted that British coal is too cheap.
The Board would have had no trouble in selling coal at 5s. a ton more to industrial users who take about 170 million tons a year. Scarcity would have compelled them to pay the extra money. If the Coal Board had been allowed the latitude given to private industry, the 5s. a ton extra for industrial coal would have resulted in the Board getting £400 million more revenue than it received, and there would then have been no need for the Board to ask Parliament for more borrowing powers.
The hon. Member for Pollok said that the American coal industry was on its back. Unfortunately, Britain's coal industry and the Coal Board have been crawling on their bellies to obtain permission from the Government to get

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higher prices. It is not Hobart House which has been controlling the post-war situation. The controlling hand has been that of the Treasury, and the industry has provided a hidden subsidy for the British economy.
Mr. Nabarro Mr. Nabarro indicated dissent.
Mr. Thomas: In conclusion, I want to eradicate certain impressions which have been deliberately given to domestic consumers. As we all know, the pithead cost of coal for the second quarter of 1958 was 83s. a ton.
Mr. Nabarro: 83s. 1½d.
Mr. Thomas: Let us leave the lid. It is no good the hon. Member objecting to a gnat if he swallows elephants. Wages represent 48s. a ton, or about 57 per cent. of the pithead price, and 35s. represents the cost of materials and depreciation. The Board cannot put by a few hundred thousand pounds as a general reserve to finance new developments, for reasons which have been explained.
The woman who has to pay £8 a ton has always been under the impression—because of Press articles and the speeches of hon. Members opposite—that the in-ability of the Board to make profits, the rise of its deficits, and the Board's constant requests for increased borrowing powers were due to the wages of the men in the pits being so high. She has believed that the miners take the biggest share of that £8 a ton. The figure of 48s. is only 30 per cent. of the average price of ES per ton. The other 70 per cent. of the price is due to something else. In fact, the cost of distribution of coal is equal to that of its production.
Mr. Nabarro: British Railways!
Mr. Thomas: Therefore, when the public read the report of this debate, and read the speech of the hon. Member for Kidderminster—
Mr. Nabarro: A jolly good speech.
Mr. Thomas: —they should realise that the reason they have to pay £8 per ton is not the high cost of wages.
The agricultural industry has been mentioned by some hon. Members. Every time the Coal Board's annual report shows a slight deficiency, or the Board
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requires more borrowing powers, the hon. Member for Kidderminster and his hon. Friends raise a howl about the inefficiency of the industry. We must realise that its twin sister industry—agriculture—which is also a basic industry, has had thousands of millions of pounds pumped into it by the Government from time to time during the past ten years to maintain its economy and to keep prices low for the consumer.
I do not disagree with that policy; it is the right one. It is a very healthy and sober attitude to adopt to a basic industry. But when hon. Members opposite howl because the Coal Board shows a deficit of £30 million they should remember the way in which the private industry of farming has been treated by the Treasury in post-war years. The Coal Board would not want thousands of millions of pounds from the Treasury to help it out of its difficulties.
Hon. Members have referred to the importation of coal and the question of compensation. Compensation is still being paid in respect of 200 collieries which have gone out of existence. But what about the miners who will be "turfed out" of those collieries which the Government propose to close? There will be no compensation for them.
I now turn to the question of stocks. The hon. Member for Kidderminster and his hon. Friends want the Board to show a profit and to eliminate its deficiencies but, at the same time, to write down the value of its stocks, which are now spread all over the country. Who will bear the cost of that? Is it fair that the Board, which, in response to the appeals made by the present Government and the Labour Government, has so planned its industry to meet their requirements and has been overtaken by unpredictable events, so that it is now in the dilemma of having £60 million worth of coal on the floor, should be asked to sell that coal at cut prices, thus increasing its financial responsibility?
As for the immediate position, unless the closure of the collieries is well planned and phased, and provided that the Government do not, by irresponsible action, close down collieries too hurriedly, thereby putting a substantial number of miners on the dole, we can expect our miners to demand the restoration of a privilege which they enjoyed up to

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1926—the seven-hour day. The miners can help to cure this situation by insisting upon a seven-hour day if the number of unemployed miners warrants such action. The closing of the pits must be phased and planned, and those miners who have to travel to neighbouring collieries should be assisted in the matter of transport. The Coal Board has its own transport for these people.
There are men who have given forty years and forty-five years to the service of the mining industry. There are even some men who have given fifty years or more, but let us deal with those who have spent forty-five years in the industry. What chance have they in the labour market? I suggest that the Government consider in what way these men may be compensated and how far other men can be helped. There are about 14,000 men in the industry who are over 65, and thousands of them continue working only to reach a higher pension level.
How far are the Government prepared to consider the purchasing of credits for these men so that they may leave the industry voluntarily with the hope and expectation of obtaining a pension at a higher level than is merited by their present age? How far can we extend the period of 26 weeks' redundancy pay so that it may be continued far beyond the present limits imposed by regulation?
I trust that the Government will face their responsibilities. If they argue that the present position is temporary and that, when the investment policy of the Coal Board brings forth its full results, the industry will be established again on a sound financial basis, then there is an obligation on the Government to help the Board until it stands on a firmer financial footing and to help to bring about the economic stability which we all desire to see.
8.36 p.m.
Mr. R. W. Elliott (Newcastle-upon-Tyne, North): I am very pleased to follow the hon. Member for Rhondda, West (Mr. Iorwerth Thomas). The hon. Gentleman, like myself, comes from an area famed for its coal production. He has spoken with great sincerity and against a background of long experience of the industry and a great knowledge of it. I wish to take up the first and most important point which he made regarding the long-term future for the industry, and I agree
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with a great deal of what he said about the future of those men at present employed in it who may become redundant.
Regarding the remarks of the hon. Member about housewives and how much they pay for coal, I suggest—and here I am open to correction—that in some areas, I believe in the North-West, the National Coal Board sells directly to the consumer without profit. Housewives in such areas will have a very good idea of the exact cost of production and, in consequence, firm views upon it.
I appreciated many of the speeches from the benches opposite because so many of them were made by hon. Members who have a lengthy experience of coal-mining. The only criticism I would make is that in many cases the speakers were not facing the problems of the present time. There was a great deal of harking back to days and to periods when the selling of coal was much easier. There is a tremendous difference between a seller's market and a buyer's market which we must recognise, and we should attempt to see the problems of the industry from that point of view.
I come from and have the honour to represent a constituency within the City of Newcastle, the traditional capital of a great coal-producing area. The present problems regarding the future of coal production are closely associated with the future of my city.
As I see it, there is a short-term and a long-term problem in the coal industry of the United Kingdom. The short-term problem is that of effecting quickly, efficient production. I appreciate the very great need for a continuation of the encouragement of efficient production. It has already been stated that falling consumption and mounting coal stocks are caused by a number of factors, not least being the fact that we have quite deliberately improved conditions of health by our Clean Air Act. That has caused a fall off in coal consumption in certain ways.
We have also converted to oil. I was very interested in the remarks of the right hon. Member for Blyth (Mr. Robens) at the beginning of the debate about the possibility of going back to coal from oil. In listening to one speech from the benches opposite, I felt that there has not been enough appreciation of the need to convert to oil in the past. We heard

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tonight a recollection of the late Ernest Bevin, when Foreign Secretary, appealing for an increase in the production of coal as a means of strengthening his position at that time as Foreign Secretary. Of course, an increase in the production of coal at that time would, and did, have that effect. The Foreign Secretary needed the basis of a sound economy at home from which to work. An increase of coal production at that time was essential. By the same token it was sound policy also to convert to oil in some cases. I hope the possibility of a cessation of conversion to oil might be considered by the Government in the light of our mounting existing stocks of coal.
The other all-important factor which has led to mounting stocks of coal is the fact that we have lost much of our export trade. Coal and coke exports from the Tyne have fallen steadily over the past few years. I notice with some regret that in the nine months of 1958 11·4 per cent. less coal and coke has gone from the Tyne, which, it once was said, would only prosper so long as coal was shipped from it. It is my hope and, I am sure, the hope of us all that the National Coal Board investment programme will produce greater efficiency. It is our hope that coal will be produced and put on sale as the consumer wants it, whether the consumer is abroad or here at home. I was very pleased indeed to hear from the benches opposite a new appreciation of the need for the N.C.B. to think in terms of efficient marketing; and in these days when it is much more difficult to sell coal to think in terms of making the product saleable.
The reorganisation of the industry means the closing of pits. That has been made very clear to us. We are to have thirty-six pits closed, and possibly that will mean an extension of unemployment—temporarily we hope—in my part of the world and other parts where coal is mined. That brings me to the second point I wish to make, a point on which I wish to follow the hon. Member for Rhondda, West. That is the long-term problem of the coal industry of this country. We must face the fact that we are moving out of the coal age as we have known it just as surely as we moved out of the bronze age. To blind ourselves to the advance of atomic power is a
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failure to recognise the major problem for the coal industry at this time and in the future. To ignore the advance of atomic power would be like destroying the railway to save the stage coach.
Atomic power, when it comes to us cheaply, as it will with fusion, will not only be cheap but clean, and one cannot help confessing that there is a great deal to be said for the eventual removal in such areas of the country as mine of the age-long dread of men meeting death and mutilation in deep mining underground. It will eliminate danger to life and limb; it will bring cheap power and efficient power. I feel that we should take due regard of its advance. It will be with us probably before twenty years have elapsed. Therefore, as a representative in this House of a city which is the capital of a coal-producing area, and as a representative of a coal-producing area, I express the hope that the Government will have due regard to what, I believe, will be the gradual passing of coal mining and will, in consequence, take constant measures to alleviate the possible increasing unemployment in the North-East and other coalfields of the country.
The record of Conservative Governments in bringing employment to areas where unemployment has come is extremely good, and in the North-East we are proud indeed of our Team Valley Trading Estate. I believe that we should have due regard to the possible advance of unemployment in the North-East by bringing such estates as the Team Valley Estate again to the North-East and extending existing ones.
8.47 p.m.
Mr. Arthur Palmer: In the short time now left before the winding up speeches, I want to make three main points. In the first place, as one who has followed fuel and power matters fairly closely over a number of years, I cannot help contrasting the situation in fuel and power, particularly coal, with the position only three years ago. The emphasis then was on the scarcity of coal. But today it seems that there is too much coal, or at any rate too much industrial coal, for comfort. Many of us had hoped, thinking that this change would eventually come about, that the industry might move through a period when things came

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roughly into balance, but it has not worked out that way.
Looking at the situation as objectively as I can and allowing for all my natural and proper political prejudices, I cannot help thinking that there are three principal reasons for things not coming into balance. The first is the one that has been discussed already by my hon. Friends —the fact that the Government have reduced the alleged inflation in the economy by damping down production. That seems to me to be one primary reason for the change in the situation, and in that sense the Government are to blame.
One cannot help contrasting the coal position with that in steel, because the steel industry also has been feeling the draught brought about by the same restrictionist policies of the Government. It has unemployment, short-time working, and there is the same reluctance in the new situation by customers to hold stocks. But there is this financial difference between the position of the steel industry in relation to the general fallback in industrial productivity and the position of the coal industry, that in recent rather better times the steel industry was not obliged to import steel at its own expense and sell it at a lower cost to the consumer at home. That is a tremendous difference. The steel industry at the time when domestic consumers were short was actually exporting.
The second reason why we are in the present embarrassment of too much small coal—and here the Government are at least partly to blame—is the failure in forward planning to foresee the effect of improved utilisation efficiency on energy consumption in this country. After a very slow start, fuel-saving propaganda is now making tremendous headway. I also agree that the higher prices of coal have contributed something, but so has the work of the National Industrial Fuel Efficiency Service, among others. It is ironical to know that the work of this service is being subsidised by the nationalised fuel and power industries, and yet it is the nationalised fuel and power industries which, in the commercial sense—I am not talking about the value of the work as such —tend to lose by the operations of the National Industrial Fuel Efficiency Service. It seems to me that in their forward planning the Ministry should
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have seen the possibility of this occurring. It is not the slightest good blaming the National Coal Board, which in its position cannot necessarily see the whole fuel and power picture.
We have not had the extra production which was expected, but even had we had that extra production I think that the assumptions which have been made until fairly recently about 6 million tons of extra coal or coal equivalent being needed each year for the next twenty-five years are obviously already being falsified by the march of events.
As I have said. I have much shortened what was intended to be a longer speech. But finally, may I give another reason for the present embarrassment of small coal—and here I think the major fault can be placed at the Government's door. Conservative Ministers have greatly neglected their obvious obligations to develop a broad fuel and power policy, while at the same time they have tended to meddle unnecessarily on occasion in the operations of the boards. For instance, in spite of the recommendation of the Select Committee on the Nationalised Industries that the coal industry should have commercial freedom subject to general Ministerial direction, they have continued to control prices, and in advertising the nationalised boards have generally been greatly inhibited by the Government's outlook.
There are matters in which the Minister could probably have guide policy—but from which he apparently shrinks. I will list them. The first is that power stations were switched to oil—the point has been made, but it is worth repeating—by the former Minister because of the shortage of small coal. Surely now that there is a surplus of small coal the present Minister should have the courage to switch them back. There must be escape clauses in the contracts. Also, the railways and municipal authorities should be advised to concentrate on direct electrification for traction and to avoid the use of oil. That at least could be done. The gas industry should be urged to concentrate its efforts on making use of indigenous small coal instead of importing methane gas from across the world.
I have been an advocate and, in the ultimate, I remain a firm advocate of the nuclear power programme, but as we have a surplus of small coal and as at the

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moment the capital cost of nuclear power stations tends to climb in relation to the lower cost now of coal-fired power stations, I think that there is at least a case to be examined for rephasing and retiming the development of the nuclear power programme. There might be a case for rephasing its development at least until industrial production picks up again. As to hopes that production will pick up again, perhaps it is no good expecting the reformation of present Ministers. The best way in which we could improve production, and so indirectly help the coal industry, would be to change the politics of the Government.
8.56 p.m.
Mr. Harold Neal: Our debate has covered many aspects of the coal industry. We have heard some excellent speeches from both sides of the House, many of which have revealed widespread concern over the plight of the industry. I hope to deal with some of the criticisms that have been made.
I was surprised to learn that the Parliamentary Secretary was to open the debate, because he brings to the discussion a much more burdened conscience than does the Paymaster-General. Two years ago, when the Bill that fixed the present borrowing powers of the Board was before us, the Parliamentary Secretary was one of the 23 rebels who voted against the Government. I listened carefully to him today, in the expectation of hearing some recantation before he took on the rôle of poacher turned gamekeeper. Instead of a recantation, we heard a most unusual tribute to the tax dodgers, which seemed altogether irrelevant to his case.
When the present Minister of Supply was moving the Second Reading of the 1956 Bill, he said that he had come to the
"…inescapable conclusion that coal must remain the foundation of our fuel economy, and no Government, having come to that conclusion, could do other than seek sanction for continued investment in the coal industry."—[OFFICIAL REPORT, 10th May, 1956; Vol. 552, c. 1127.]
Most of us, at some time or other, have indulged in similar platitudes, but our faith is worth just what we are prepared to venture on it, and we should like to know how far the Government have departed from the belief that coal is to
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remain the foundation of the country's fuel economy.
The position was very different when that Bill was introduced. Demand was rising, there was a fuel gap that had to be bridged by oil and by imported coal, and the miners were working a six-day week. There were many miscalculations made by those managing the industry, and by Government spokesmen. It is only eighteen months since the Paymaster-General indulged in some impossible calculations about the future coal output, but I shall not embarrass him by quoting those figures.
We do not condemn his optimism, nor do we quarrel with the reasons given by the Parliamentary Secretary for these borrowing powers. Where we part company with the hon. Gentleman is when he describes the events that have led to the present financial position of the industry. The real reasons are being concealed from the House and from the country.
The Explanatory Note to the draft Order says that these borrowing powers are necessary
"to make advances to the National Coal Board to enable them to defray expenditure properly chargeable to capital account."
That is a surprising understatement, but one thing must be made abundantly clear. This is not a subsidy; it is only a loan for working capital.
What the Government are, in effect, saying to us today is, "Here is a simple problem of arithmetic. The present borrowing powers are at their maximum of £75 million. Raise them to £130 million, and, hey presto, all the troubles are ended." I profoundly wish that the mere concession of an extra £55 million in borrowing powers would solve the problems of this industry, but it is more than a matter of tinkling cymbals. It is a problem of grave economic and social import, involving the readjustment of our ideas about the nation's fuel policy.
The distressing feature about today's debate to me is the absence of a plan. We have not been told what the production is calculated to be for 1959. The hon. Member for Kidderminster (Mr. Nabarro) sought, by means of a Question a week last Monday, to extract from the Paymaster-General what the calculations were for production for 1959. There was no adequate answer to his Question. It

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is significant that, in the last two Economic Surveys, the Government have not fixed a coal target at all. We have not been told today how much the Government intend to encourage the use of indigenous fuels. We have not been told whether there are any concrete proposals for reducing stocks. Neither have we been told how the Government are to encourage the export programme.
The Parliamentary Secretary, in his opening speech, spoke as though a meteorite had hit the coal industry from out of the economic stratosphere, and all that we could do about it was to pray that the calamity would not be repeated. Any keen observer of the coal industry knows that we have been moving into this crisis for the last two years. To increase the borrowing powers now, without having, alongside that borrowing power, a plan for the future, is merely buying time, and nothing more.
What is the matter with the coal industry? What strange malady has overtaken this once virile giant? The disease is easy to diagnose, but he would be a bold practitioner who would prescribe a quick and easy cure. Four years ago, I would not have hesitated to advise any parent to send his or her boy into the pits to carve out a career. I should do so today with considerable perturbation. Four years ago, this industry was booming and demand was rising. Today, it is in danger of deceleration into a state reminiscent of the 1930s, when, in South Wales and in other coalfields, the gaunt, silent headgear was a symbol of desolation.
There is always a danger in these things of spreading alarm and despondency, but I should be insincere if I said that anybody could entertain arty confident hopes of a quick recovery of the coal industry. When we have made all allowances for the general coal recession in Europe, we are bound to admit that, after all, much of our trouble is of our own making. Though I do not absolve the Coal Board from all responsibility, I do say that the main responsibility for the present plight of the coal industry rests mainly on the shoulders of the Government. There are the guilty men.
It was not until the miners made their demand for increased wages and a sick pay scheme, in March of this year, that
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we began to hear the doleful stories of the bankruptcy and decline of the industry. Sir James Bowman, in introducing the four-point programme arising out of that demand, suddenly discovered that production was out of balance. Both he and the Government ought to have made the discovery that distribution was also out of balance.
I should like to comment upon the policy which I have just mentioned. Three of its points were selective recruitment, the closing of uneconomic pits and the reduction in capital expenditure. Mr. Ernest Jones, the President of the National Union of Mineworkers, whom I always regard as a pillar of sanity in the trade union movement—and let me say, in parenthesis, that he and his colleagues have used their great economic power over the past ten years with commendable moderation—when this policy was announced, in language which was unusual for him to use, called it the "cockeyed policy of the Coal Board".
I should like to offer one or two comments upon it. Let us take, first, selective recruitment. I content myself by saying this about that point in the programme. Any industry which declines to accept the infusion of young blood will very soon lose its economic health. There have been complaints for years that the average age of miners was rising and that that was the reason why output per man-shift was declining. Now we are saying that there are too many men. I opposed the policy at the time when it was discussed in this House and outside, but how right the miners were in refusing to accept the infiltration of Hungarians into the pits.
Secondly, let us consider the question of the closing of uneconomic pits. I accept at once that little valid argument can be adduced in favour of keeping pits open that are losing enormous sums of money.
Mr. Nabarro: Hear, hear.
Mr. Neal: Yes, but if we are to close pits that are uneconomic it should be as a result of a planned operation and not as a result of panic measures which are now being followed.
Some of my hon. Friends and I have advocated for years a policy of concentration—concentration on the better and more remunerative seams. But if we are

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going to close pit A, as we have been told will be done, and transfer men to pit B, we should ensure that the housing should be diverted to the area where the men are being transferred, that cultural centres, schools and chapels should be provided for them so that they will not be without the social amenities in the new areas to which they go.
What is more, in the areas where the pits are being closed we ought to have the co-operation of the Government Departments to ensure that new industries will be settled in the areas that are going to be derelict. In my own and in many of my colleagues' constituencies there are villages and small towns which are dependent entirely upon a colliery, and when that is closed there is nothing of an industrial nature to which men can go to find employment. It is those, areas which ought to receive the attention of the Government, or else I fear there will be a social convulsion arising out of the closing of these pits such as we have not seen for thirty years in this country.
Let me now turn to capital expenditure, and in this connection I hope that we shall be careful not to lessen the efficiency which the industry has gained since vesting day. After all, in an extractive industry like coal we have always got to be putting capital into it to regain lost capacity. The roads get further out, the seams become worked out, the transport system and the shaft capacity depreciate. We have always got to be putting new capital in, not to improve output but to maintain it. I hope that we shall not see economy run mad as far as capital expenditure is concerned.
I know that some hon. Members opposite have lifted their hands in holy horror and have said, "£661 million have been invested in this industry in ten years." Yes, and it has been a good investment, especially when one compares it with other industries. I am all in favour of putting capital into the atomic energy industry in this country. I am proud of the fact that we lead the world in the peaceful uses of atomic energy, and I hope that we shall continue to invest in that industry and keep our lead in the world.
Let us, however, compare the atomic energy industry with the coal industry. The plan to erect atomic power stations
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began in 1955 with a capital of £300 million, and that figure has increased considerably since. It was to be £300 million in ten years. What do we have at the end of it?—the coal equivalent of 18 million tons. That is all. Compared with the coal industry, it is a much more costly investment.
In response to the programme which the Coal Board put forward, through Sir James Bowman, the reply of the miners, at first, was to say, "Abandon opencast mining". I am glad to see now that the National Union of Mineworkers has secured a recruit for its platform in the person of the hon. Gentleman the Member for Kidderminster.
Mr. Nabarro: I have always been there. Really, the hon. Gentleman must not impute these things to me. He was sitting in his place on 24th March, 1950, when I made my maiden speech in the House. On that occasion, I had a great deal to say in condemnation of the policy of continued opencast mining. Who was it who most stoutly defended that policy? None other than the right hon. Gentleman the Member for Blyth (Mr. Robens). The hon. Member for Bolsover (Mr. Neal) should put the blame in the right place, on his own Front Bench.
Mr. Neal: I never said that the hon. Member for Kidderminster was a recent convert to opposition against opencast mining. I said that the National Union of Mineworkers had secured a recruit for its platform, and I am very glad indeed to know it. I have a distinction shared by few. I have conducted the hon. Member for Kidderminster down a deep mine pit, and I am glad that I convinced him in favour of deep-mined coal.
What is the reply of the Coal Board and the Parliamentary Secretary to the contention of the National Union of Mineworkers that opencast mining should be discontinued—that a profit is being made of about 13s. or 14s. a ton, and that, on those grounds, the Coal Board cannot afford to stop opencast mining? I would remind the Parliamentary Secretary that the Coal Board made its biggest profit when it bore no responsibility at all from opencast mining.
Today, we have 5¾ million tons of opencast coal in stock. That is about half the annual output. What sense is there in continuing this production at the

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rate of 11 million tons a year when so much of it is unsold? I can think of nothing more likely to exacerbate the feelings of a miner on the dole than the sight of his pit closed and opencast working in the adjoining meadow. Yet that is what will happen if this policy is pursued.
I come now to exports, a subject very closely related to the stocks which, we have been told, have rendered necessary these additional borrowing powers. In 1947, when the Labour Government nationalised the coal industry, they, together with the first Coal Board—in response, perhaps, to pleas from the Tory benches at the time—recognised that we must export to live, and the Coal Board recognised that it must obtain a foothold on the Continent, and, what is more, sell coal to our traditional customers.
We began exporting coal not long after vesting date, and the export programme was painfully built up, often at the sacrifice of the domestic and industrial consumer in this country, until it reached 13 million tons. Burt what did the present Government do in 1955? They began, in their panic, to slash the export programme, and now, as one of my hon. Friends said, we shall be lucky if we export 5 million tons this year. The wheel has turned full circle. We are now looking for customers, and we cannot find them on the Continent, as the Parliamentary Secretary admits.
What the foreign importer wants is two things. He wants good quality coal and continuity of supply. It is no good going to one of the continental countries and saying, "We will let you have half a million tons this year," and then, next year, saying, "We cannot let you have any," and the following year saying, "Please do buy our coal." I was recently one of an all-party group of Members who met representatives of importers' organisations 'in many countries on the Continent. Those importers told us that because we refused them supplies two or three years ago they had to go elsewhere and had placed many long-term contracts and, as a consequence, could not buy British coal.
The result is easily seen in the records. This year, 26 million tons of coal from the United States of America is being sent into continental countries, coal coming a haul of 3,500 miles and competing
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with coal from this country which would have only to cross the narrow English Channel. And that is the result of the policy of the Government.
The Prime Minister recently made a statement which was very agreeable on this subject. He said:
"We intend to remain in the export market for a long time to come."
In view of that statement is it unfair to ask the Government what they are doing to recover the markets they have lost? The Paymaster-General is now an accepted authority on European trade. Perhaps, when he is winding up the debate, he will tell us what prospects there are of increasing the exports to the countries of Europe.
I want to say a word or two about stocks of coal. The question has been much debated today and I do not want to labour it too much. For a long time the Opposition have been putting Questions to Government spokesmen about stocks, and repeatedly they have told us that they are not perturbed about stocks. We have heard today that they are only four weeks' production, and that it does not matter very much. The real problem of stocks they have said, is the small coal.
I have said many times in the House, and I shall go on saying it until somebody takes notice, that small coal has the same calorific value as large coal in proportion to its size. What we need is a proper use of small coal. It is the job of the colliery manager to produce coal. It is the job of the combustion engineer and scientist to find means of using it. Of course, the electricity industry has saved us a good deal in this respect; the electricity industry, a nationalised industry, please observe. That is the only industry which has adapted its firing equipment to use inferior and small coal which the Coal Board has to dispose of.
But what is the situation today? I gather that the Parliamentary Secretary is in favour of a change-over from oil to coal. We hope that it will soon take place, but at present there is a plan for 14 stations to be using oil which could have been using coal. No evidence has yet been submitted to prove that oil is cheaper than coal to generate electricity. For that reason those dual firing stations should at present be using small coal and using some of those stocks of smalls which

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are embarrassing the Government and the Coal Board.
Another way of using small coal is briquetting. It is not very popular in this country, but it is on the Continent. The trouble with making briquettes is that one requires a binder, and the binder has often to be pitch. Here is where we come into conflict with the hon. Member for Kidderminster once more, and his colleagues who are supporters of the Clean Air Act. The briquette makes so much smoke when it is bound with pitch. A good deal of research has been done on this subject by the Coal Board, and attempts have been made to produce a briquette without a binder. Last year, £290,000 was spent on research into briquetting, and a loss of £172,000 was made on the manufacture of briquettes. After all this research and expenditure we ought to be getting some result, and the people concerned ought to be stirred up to produce some means of using up small coal.
Turning to oil competition, I support the remarks of my right hon. Friend the Member for Blyth when he said that oil lacks the continuity of supply which coal can provide. It only requires some fool to blow up a pipeline or pumping station in the Middle East or Colonel Nasser to block the Suez Canal to cut off our supplies of oil. Yet, despite this danger, we are allowing oil competition to proceed at such a pace that by 1965 it will be taking the place of 40 million tons of coal.
Can the Government look with equanimity upon this competition? Can they look with equanimity on the tremendous amount of capital expenditure which has gone into the oil distributive industry over the past few years, which is out of all proportion to the capital investment in productive industry? Without taking a Luddite viewpoint on this subject, I believe that the Government cannot permit this competition to proceed without regulation. They ought to take steps to regulate the consumption of oil when the coal industry is in such a depressed condition.
The Opposition accept the calculation of £130 million as the requirement of the Coal Board for the current year. As my right hon. Friend indicated, we do not propose to divide the House on this Order.
Mr. Nabarro: Nor do I.
Mr. Neal: Perhaps the hon. Member dare not risk the danger a second time.
Our complaint about today's debate is the sparseness of information. We want to know what are the spheres of influence in fuel in the future. The gas and electricity industries have a right to know how they fit into the picture of the Government's fuel policy. The miners want to know what future is in store for them. I know that they are sometimes in a turbulent mood, but I have not lived a life-time among them without knowing their characteristics. Generally speaking, they are good, hard-working citizens. I assert that nothing can assail the belief of the miners in nationalisation, but at present they are very perturbed about the policy of the Government and the Board. They wonder what the consequences will be in short-time working and the closing of pits, and they have a right to know.
For these reasons, while expressing our concern, we give general approval to the borrowing powers, because we admit that they are necessary. But the greater need is for a national fuel policy, a policy in which coal has an accepted place and a policy which will make the maximum use of our indigenous products.
9.25 p.m.
The Paymaster-General (Mr. Reginald Maudling): We have had a most interesting debate on a most important subject, and the only disappointment has been that so few hon. Members have thought it necessary or desirable to attend the later stages of the debate. Coal is a basic industry of great importance to the country and I noted that throughout the speech of the hon. Member for Bolsover (Mr. Neal), who has a lifetime's experience in the industry, there were never more than thirty or forty Members in the Chamber.
That suggests to me that the concern about the policy of the National Coal Board and the Government, which, according to the newspapers, is so widespread and intense, is by no means so acute as one might think. To judge by some recent Press reports, my hon. Friend and I were to be subjected to a violent barrage from both sides of the Chamber—and I shall have a few kind words for my hon. Friend the Member

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for Kidderminster (Mr. Nabarro) in a moment. There has not been a violent barrage. Perhaps, as sometimes happens, the warning of an exterior fog has driven Members to their homes before transport becomes too difficult and no doubt the fact that the official Opposition and my hon. Friend the Member for Kidderminster have announced that they do not intend to divide the House has had something to do with it. Perhaps for those reasons, there has not been that atmosphere of urgency and passion which some of us had been led to expect.
Nevertheless, to come to the serious substance of what I have to say, there is no doubt that the coal industry's position must give concern to everyone who has a proper interest in the affairs of the country and this great industry. I want to deal with a wide range of problems which have been raised. I must apologise to those Members whose speeches I was not able to hear, although I have been given a note of what they said and I shall carefully study HANSARD tomorrow to see the exact details of their speeches. I was sorry, in particular, to have missed the speeches of my hon. and gallant Friend the Member for Dorset, North (Colonel R. H. Glyn) and my hon. Friend the Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott). Many important matters have been raised, and I shall try to deal with them.
The debate divides into two separate topics. There is the narrow issue of the Order relating to the borrowing powers of the Coal Board, and there is the wide general issue of the present position of the coal industry. Both matters are intimately inter-related. It is impossible to challenge the need for the Order. Were it possible to challenge it, no doubt my hon. Friend the Member for Kidderminster would have done so, but, since even he has restrained himself, we all recognise that it is essential for the Board to have these extended borrowing powers.
The reason for the Order is well known. The Board is under an obligation, which is peculiar to the National Coal Board, relating to the level of its net outstanding borrowings in any one year. Under the 1956 Act, if the Board's net borrowings at any given time exceed by more than £75 million the peak of its net borrowings in the preceding financial year, an Order
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such as this must be laid before the House of Commons.
I should point out that this is a question of net borrowings and not of the level of investment, which is a quite different matter. When we last debated the subject, in July, my hon. Friend the Member for Kidderminster suggested that the matter in concern was the level of investment. It is not; it is the level of net borrowing. This is the first time that it has been necessary to introduce an Order under the 1956 Act and the first time that net borrowings have risen to the point at which it has been necessary to bring the matter to the House.
As my hon. Friend the Parliamentary Secretary explained, it is essentially a problem of stocks. The cost of additional stockpiling in this financial year, at £57 million, is more than the figure of £55 million, which is the difference between £75 million, which is the normal limit, and £130 million for which we are asking today. The whole excess over the statutory limit of £75 million is accounted for by the increase in the stockpiling programme upon which the Board has been forced to embark.
Reference has been made to the loss which the Board is suffering in the course of the present financial year, and the fact that, to the extent to which it makes a loss, its borrowing requirements to finance its working capital are increased. But, as my hon. Friend the Parliamentary Secretary pointed out, it now looks as if the financial experience of the Board for the current period will be less difficult than was at one time feared.
I now turn to the arguments put forward about the necessity for the Order. In justifying the case for the Order I must try to deal with such criticisms as have been made of the necessity for this large additional borrowing. First, it may be argued that the Board should never have allowed its stocks to rise to their present level. That is not a fair criticism of the Board. It took action early this year, by way of stopping recruitment and cutting out Saturday working—action designed to reduce production and, thereby, the accumulation of stocks. It would have been very difficult for the Board to go any further at the time.
We must recognise that there is a certain inflexibility in the coal industry,

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which is peculiar to that industry. Most industries, faced with an accumulation of stocks, would go on to short-time working. The right hon. Member for Blyth (Mr. Robens) referred to the importance of avoiding short-time working, but in any event, in the peculiar circumstances of the coal industry—both in relation to the overheads involved in short-time working, and the guaranteed week—the Board has not the flexibility available to industry generally. If it had wanted to do more to curtail production than it did in stopping recruitment and Saturday working it could not have embarked upon a policy of short-time working.
The only thing it could have done was to cut back production by taking certain units of production out of action. That, surely, would be a very difficult step to take, both on social grounds, which have been rightly stressed in the debate, and on economic grounds. The effect of taking pits out of action or closing collieries has been stressed by hon. Members on both sides of the House, including my hon. Friend the Member for Glasgow, Pollok (Mr. George). We are all aware of the difficulties involved.
Similarly, once we decide to close a colliery we must remember that it is not practicable to reopen it in a short time if the demand for coal increases. Therefore, the step of closing collieries is a very serious one, to be taken by the Board only after very prolonged and serious consideration. The Board was absolutely right to restrict the measures it took early this year to the stopping of recruitment and Saturday working. It is therefore in no way to be blamed for the fact that stocks have piled up to their present level.
Several hon. Members, including the hon. Member for Sedgefield (Mr. Slater) and my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster), referred to the importance of trying to sell a greater amount of coal by more aggressive selling methods. The question of exports was raised by the hon. Member for Bolsover. I agree with him that continuity of supply may very often be more important than a matter of a few shillings per ton in price, but I would ask him to bear in mind the fact that in 1955, when the Government took action to restrict coal exports, we were having to
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import coal to the tune of over £70 million a year. Most of that would be paid for in dollars. To a great extent we imported coal at high prices, and often dollar prices, in order to export it, sometimes, at lower prices, in exchange for soft currencies, because we wanted to retain our markets.
I think that that was wise. But there is a limit to the extent to which that can be done, bearing in mind the large imports of coal in 1955, although I agree with the hon. Member for Bolsover and with my hon. and gallant Friend the Member for South Fylde that we must not look at this matter merely in terms of immediate profit or loss in coal exports this year, but in terms of maintaining markets for the future, because of the great importance of continuity of supply.
At present, the prospects of resuming large-scale exports to the Continent of Europe are not very great. This is a matter to which several hon. Members referred. The fact is that the position regarding coal stocks with many of our European customers is, on the whole, rather worse than in this country. They have great stocks of coal. My hon. Friend the Parliamentary Secretary referred to the position in Germany. Belgium too is experiencing difficulty and is having to cut back production and large stocks of coal are piling up there. They also have long-term contracts with the United States to which a number of references have been made in today's debate.
We must bear in mind that competition is intense. The level of Atlantic freight rates is extremely low and that, coupled with a remarkable increase in productivity by the American coal miners, means that America can deliver in Europe at prices which are extremely competitive. We have also to face the competition of Poland. The Poles are pursuing a vigorous policy of cutting export prices. So we must recognise that at the moment the prospects of re-entering the European market on a large scale are not very great. The Coal Board is making great efforts in this matter. It has recently fixed contracts for the sale of steam coal which I think is encouraging.
I should refer to the question of prices because the right hon. Member for Blyth, in a supplementary question the other day asked whether there was any control over the export prices charged by the

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Coal Board. I can confirm that there is not. It charges what it likes in the export markets. I agree with my hon. and gallant Friend the Member for South Fylde that it would not be a wise policy to try to increase exports now by dumping coal on the European market at cut prices.
Mr. J. Griffiths: I must declare an interest, as this question affects my constituency, but will the Government discuss with the Coal Board the possibility of resuming the export of anthracite to Canada on a large scale? At one time this was a very profitable export.
Mr. Maudling: It would be excellent if that could be done, and I am sure that the Coal Board will do everything possible to sell anthracite. I do not know what is the position in Canada, but I am sure that the Board will make every effort to sell anthracite.
Other uses are also being actively examined by the Coal Board, and there is, in addition, the question of selling more on the home market. I suggest to my hon. Friends who have mentioned this matter that no advantage would be gained by disposing of these stocks at drastically cut prices on the home market. By and large, industrial consumers of coal buy as much as they need to carry out their processes. The amount is determined by the demand for steel, motor cars or anything else. If the Board sells more coal to the steel industry this month, it merely means that so much less will be sold in a few months' time. I do not see how in the long term the Coal Board can sell more coal by cutting prices at the present time.
What would be effective in encouraging a long-term demand for coal would be an indication that the long-term trend of coal prices was likely to be a downward trend, but that is another matter. To cut prices now would not increase the total consumption over a period, it would merely make greater financial difficulties for the Coal Board.
Mr. Osborne: Surely, if the price of coal on the domestic market were cut by as much as it costs to stock it and then picked it up again, the Coal Board would be no worse off in its net receipts; and that would tend to cause sections of industry which otherwise would be going over to oil to refrain from doing so, and thereby create a wider market for coal?
Mr. Maudling: I do not think so. I do not think that the conversion from coal to oil would be affected by what is done now in the case of a particular class of coal. If the Coal Board offered coal at £1 a ton cheaper to dispose of stocks, that would not sell more coal to the steel industry in the long run, because the demand for coal by that industry is settled by the demand for steel. I suggest that what matters is the long-term trend of coal prices, and that a short-term price cut would defer purchases rather than increase them.
Mr. Nabarro: Would my hon. Friend allow me to put a question? He has referred to the steel industry. This coal in stock is of no use to the steel industry. This coal in stock is only applicable to power stations. It is all fines and low-grade coal. I had that confirmed at a luncheon only today.
Mr. Maudling: It is an extraordinary thing, but two of my hon. Friends went to the same lunch and they received information in opposite directions. It must have been a very good lunch. One says that the stocks are entirely fines and my other hon. Friend says they are not entirely fines. The actual figures I have asked for from the Coal Board are 90 per cent., either small or unscreened, 4½ per cent. large coal, I per cent. anthracite and 4½ per cent. graded.
One of the large problems recently for the Coal Board has been the fall in demand from the steel industry for coking coals. I have been trying to put before the House the argument that these borrowing powers are essential because the Coal Board must carry these stocks. I think that now we must look both at the short-term and the long-term problem of the coal industry. There are three problems affecting the industry at present. There is the competition from oil, the increase in fuel efficiency to which my hon. Friend the Member for Kidderminster so rightly referred, and the decline in the total consumption of energy.
I would hesitate to allocate exactly the proportions which should be assigned to each cause in the decline of the consumption of coal, but these are the three causes, decline in total industrial consumption, the increase in fuel efficiency and competition of oil. Looking at the future demands for coal, the right hon. Member for Blyth referred to the estimates I made last year

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of the probable demand for energy in 1965, which I put at about 300 million tons of coal equivalent, plus 10 million tons additional exports. I still see no reason why those targets should not be achieved, although I agree that their fulfilment will depend now on the speed and timing at which the re-expansion of industrial production takes place.
As a long-term target, I think we should still hold to that. The question was raised this afternoon of what should be the share of the coal industry in achieving that target. The plan was that the Coal Board should supply 228 million tons in 1960 and 240 million tons in 1965. I agree with what so many hon. Members have said today, that it is unlikely that that will be fully realised, particularly in view of the growing competition of oil. That there will be an increase from the low level at present envisaged I am confident, but the extent of that increase is clearly bound to depend upon the competitive position of coal relative to other fuels, and particularly relative to oil.
I take up a very important point raised by the right hon. Member for Blyth when he said that the coal industry was inhibited to some extent from competing with oil. I think he was on a good point there. That is a point which has been made about other industries which are subject to statutory limitations. For example, in a rather different way the railway industry is competing with the roads. It can be argued that the Coal Board, because of obligations upon it, is inhibited and cannot discriminate, and therefore has far less freedom in discounts than the oil industry. This is a matter which the Coal Board is studying. It is a difficult and complex matter, and I can assure the House that any proposals the Coal Board likes to put to the Government, whether or not they would involve legislation, will be most seriously considered. I cannot go further than that today.
Mr. S. O. Davies (Merthyr Tydvil): Does the right hon. Gentleman mean sympathetically as well as seriously?
Mr. Maudling: It depends on the meaning of "sympathetically". Another point which was echoed in many speeches and with which I wish particularly to deal is the question of competition with oil. A
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number of hon. Members opposite seem to think that action should be taken to restrict the competition of oil with coal. I think we should be quite clear about what they really want in this context. We often hear the phrase "a national fuel policy". That is a phrase which conceals a great deal of mystification and muddle on the whole subject. I think it means looking into some of the statements made on limitations of imports of oil or, to use the phrase of the hon. Member for Bolsover, the regulation of competition. That can mean nothing else than limiting the competition of oil with coal. I take first the power station contracts, a very important point raised by the right hon. Member.
The position of the power station contracts is this. In 1955 when I said that our coal imports were costing us £73 million, the electricity industry, with the support of the Government, embarked upon a series of contracts for the purchase of oil for use in power stations. These contracts involved purchasing certain quantities of oil for the period of the middle sixties.
Obviously, the oil companies were involved in very large capital expenditure, and as a result of these long-term contracts they quoted prices which, I think, were regarded by the electricity industry as very reasonable. So there were these contracts in 1955 to expand consumption of oil at the power stations up to something like a peak figure of 9 million tons of coal equivalent annually in the sixties, and the programme for conversion of power stations was entirely geared to the consumption of oil under those contracts.
When the coal position changed last year, discussion took place with the oil companies to reduce the amount of oil to be delivered under those long-term contracts. The oil companies were prepared to accept a reduction of 3 million tons coal equivalent, from 9 million to 6 million tons a year. After the great co-operation of the oil companies with us in these matters, it would be unfair to ask them to go further; because these are definite contracts and, on the basis of those contracts, they have engaged in very substantial capital expenditure.
To go beyond this and to reduce even further the consumption of oil must

1309
involve a breach of contract. I understood very clearly from the right hon. Member for Blyth that he would not advocate a breach of contract in this manner. Surely he would not advocate reducing still further the consumption of oil in the power stations, and as the conversion of power stations to oil is entirely geared to the consumption of oil, I do not see how he could possibly complain of the conversion programme. The scaling down from the original standards is in line with the scaling down of total oil consumption, and the total conversion is, in fact, very nearly completed.
Apart from the power stations, what do the Opposition want? How would they restrict competition and limit the imports? Would they put on quotas? That would be breaking their international agreements signed in the last few years of their Government. Would they control its use by having a system of licensing, saying that one factory should use oil and not another factory and so on? Would they put a tax on oil to discourage its use? That is the only possible way of regulating competition. If they want to limit imports and regulate competition they must either impose quotas, have a system of licensing, or impose a tax. I think we are entitled to know which is their policy. That is what I wanted to say about the question of oil, because I think that it is a very important matter.
I now turn to the long-term investment plans of the National Coal Board. I am sure that the Coal Board was right not to cut back drastically its long-term investment plans because of a temporary surplus of coal. The Board is reviewing its investment plans, particularly any plans designed to increase total output. The whole emphasis of the Board's investment is increasingly being concentrated on the reduction of costs and on increasing efficiency within the existing level of output, and from what I have heard today I am sure that both sides of the House will endorse that policy. The Board applies very stringent tests of profitability to the investment projects which come before it. This was a matter discussed by the Select Committee in its Second Report, which we discussed a little while ago, and in which it recommended that the major schemes showing a very low level of profitability should
1310
be subject to special review by the Ministry of Power. That has been arranged.
There is no doubt that the right line for the Coal Board to take towards fixed investment is to review the situation in the light of the probability that the peak output at which the Board was aiming in 1965 will not be fully attained and to concentrate as much as it can on increasing the profitability of the mines, increasing efficiency and increasing output per man-shift.
We have the short-term problem of a period of slack demand and high stocks. I should like to go into the question of the policy of stagnation which I am told that the Government are following. It is one of those slogans which once again conceals a great deal of misunderstanding. If I had to choose I should prefer a policy of stagnation to a policy of ruination, but in any case ours is not a policy of stagnation. If the Opposition have a method of running the economy flat out indefinitely they ought to tell us, because they certainly could not do so when they were in power. If they have some mystic formula for the rapid expansion of the economy without any strain on the balance of payments, on exports, imports or prices, they ought to tell us, because they have never produced a policy capable of doing that. I will, however, resist the temptation of embarking on a general economic debate, even in the presence of the Leader of the Opposition, because I fear that that would be outside the rules of order on this occasion.
May I therefore return to what has been proposed to meet the short-term problems. I suggest that the Coal Board is right to concentrate on reducing output in the immediate future without reducing the efficient capacity available for long-term production. I am sure that that is right. Secondly, the Board should concentrate, as it is concentrating, on reducing costs. In all these things it must have regard for both the economic and the social factors involved.
The Board is reducing output from the deep mines by closing a number of very uneconomic pits rather ahead of their normal period of exhaustion. Many of these pits are running at a very high loss per ton indeed, and most of them would, in any case, have been exhausted

1311
within the next two to four years. Their earlier closure will not affect the long-term productive capacity of the industry.
The Board is also substantially reducing opencast production. The problem of opencast production is that it is a very profitable occupation for the Coal Board, which is important, while on the other hand it creates great amenity problems, which many hon. Members have often brought to the Government's notice. We must also recognise that the opencast industry is not as flexible as we should like to think it is; as my hon. Friend the Parliamentary Secretary has said, we cannot turn it on and off like a tap. The contracting organisations built up to support opencast production would collapse if drastic and extreme reductions were forced upon opencast mining at the present moment.
The Coal Board has tried to reach a balance in trying to cover this gap of 9 million tons between prospective demand and prospective supply next year, and it has done this by dividing the 9 million tons between stocking—another 3 million tons of additional stocks—a reduction of 3 million tons in deep-mined output and a reduction of 3 million tons in opencast output. I suggest that overall this is a very reasonable plan.
The increase of 3 million tons in stocks is about as much as can be financially and physically tolerated in the course of the next year. The reduction in deep-mined output, represents only 1½ per cent. of total deep-mined output, and it both helps the financial position of the Coal Board by eliminating very uneconomic production and also does nothing to harm the long-term productive capacity of the industry, because most of the pits concerned would have gone out of production in any case in the next four or five years.
The reduction in opencast output is as much as 25 per cent., and I think that reasonably reflects the social considerations which underlie this decision. I do not think the House should underestimate the financial sacrifice which is involved by the Coal Board in making such a large reduction in opencast production—25 per cent. compared with 1½ per cent. reduction in production from the deep mines.
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I would, therefore, suggest to the House that in facing this problem of surpluses next year the Board has acted wisely in deciding to divide its policy between the stocks held, deep-mined coal —concentrating on the least economic production—and a quite substantial reduction in opencast. The Board, as I am sure the whole House appreciates, recognises the serious problems created socially for the individuals concerned and for the communities in which they live and work. It is encouraging that it hopes to find alternative employment for, I think, at least two-thirds of the men affected; and for those men for whom there is not alternative employment within the Board's activities there are, of course, both the pensions and compensation schemes of the Board and the full facilities of the Government—the Ministry of Labour, the Board of Trade and so on, all of whom are concerned in those matters—
Mr. Osborne: Before my right hon. Friend finishes, will he deal for just a moment with the point raised by the right hon. Gentleman the Member for Blyth (Mr. Robens) about whether we could sell more coal at home? The right hon. Gentleman told the House that the miners got, on average, 51s. per ton, while he himself was paying £12 a ton at his own home? Can the Board do nothing to narrow that difference? If it could, we could expand the home market.
Mr. Maudling: I think that the right hon. Gentleman was quoting a sort of general figure of pithead prices for all grades of coal and quoting, possibly, a high price for the coal delivered at his home, which is some distance from the pithead—and the coal, is, I hope, good coal. However, the question of the distributors' margins has been fairly dealt with and well covered by the Report of the Robson Committee. That Report is an excellent document produced by a distinguished Committee after much study, and I doubt whether there is much scope for a reduction in the price to the consumer through a reduction of the distributors' margins. Indeed, the Robson Committee rather suggested that justice might lie in the other direction. In any case, distributors' margins have been fairly well held in the last year or two.
Miss Margaret Herbison: Before he was interrupted by

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his hon. Friend, the Paymaster-General was talking about the 4,000 miners for whom no work will be found—and, of course, the hon. Member for Glasgow, Pollok (Mr. George) made it very clear that the majority of those men would be from Lanarkshire. Have there been discussions between the Ministers responsible for fuel and power, the President of the Board of Trade and the Minister of Labour? Scottish Members have bean raising this matter for several years now, but so far the Ministries that the right hon. Gentleman has mentioned have done nothing at all.
Mr. Maudling: Of course, these prospective closures are notified as soon as possible to the other Departments—the Ministry of Labour, the Department of my right hon. Friend the Secretary of State for Scotland, the Board of Trade and so on—and today, the Board was discussing with the National Union of Mineworkers the details of the closures, as I understand they do in the normal way whenever these closures take place and redundancies are threatened.
The debate has ranged very wide over the whole industry, and we have looked at both the short-term and the long-term problem. Perhaps I could conclude by saying that, as has been said earlier today, we must take as a basic principle that the future of the industry is still a very great one, and an encouraging one. There must be and will be more concentration on efficiency and costs, but in the context of the new developments that are taking place, I have no doubt that coal will continue to be in the future, as it is now, the greatest source of energy for the British economy.
Question put and agreed to.
Resolved,
That the Coal Industry Nationalisation (Borrowing Powers) Order, 1958, a draft of which was laid before this House on 25th November, be approved.

ACQUISITION OF LAND
Mr. J. A. Sparks Mr. J. A. Sparks (Acton)
rose—
10.0 p.m.
Mr. Speaker: Before the hon. Member begins to move the Motion standing in the name of his hon. and learned Friend the Member for Kettering (Mr. Mitchison), may I say that I have looked at the Motion and also at the one which stands in the name of the hon. Member for Hamilton (Mr. T. Fraser) and that they both appear to me to be in identical terms? I was wondering whether they could be discussed together. If that is agreeable, I think that it would be for the convenience of the House.
Mr. Sparks: It would suit us quite well, Mr. Speaker, to take both Motions together.
I beg to move,
That an humble Address be presented to Her Majesty, praying that the Acquisition of Land (Rate of Interest on Entry) (No. 2) Regulations, 1958 (S.I., 1958, No. 1803), dated 29th October, 1958, a copy of which was laid before this House on 4th November, be annulled.
These Regulations are concerned, in the main, with the procedure adopted by local authorities for the acquisition of land for their own purposes. The local authority first serves a notice to treat upon the owner, and then serves a notice of entry, leaving the compensation which has to be paid for the land for settlement at a later time. When, finally, the amount of compensation is agreed, the local authority is responsible for paying a rate of interest upon that compensation money which is back-dated to the date of the notice to treat.
The Regulations before us reduce the rate of interest to be paid upon the backdating from 6¼ per cent. to 5½ per cent. We think that the reduction is inadequate. We believe that 5½ per cent. is too high. It is important to realise that this procedure for the acquisition of land under Section 57 of the Town and Country Planning Act, 1947, is extensively used by local authorities, first, in slum clearance schemes, in redevelopment under the planning Acts, in housing schemes and also for many other purposes.
Therefore, we may ask to what extent land purchases by local authorities are

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made in this connection. I doubt whether the hon. and learned Gentleman is in a position to give us an exact figure, but the Minister of Housing and Local Government has made an estimate of the amount spent by local authorities on the acquisition of land in 1957–58. This estimate appears in the Financial Memorandum to the Town and Country Planning Bill, which is now upstairs in Standing Committee.
The Minister of Housing and Local Government estimates that in 1957–58 local authorities spent £33 million on the acquisition of land for their own purposes. It is also estimated that, as a result of that Bill, if it becomes an Act in its present form, the cost of the acquisition of land to local authorities on this figure of £33 million will be increased by a further £8 million, giving us a figure of £41 million, which is estimated to be the amount which local authorities would spend on land purchases in 1957–58.
I have endeavoured to arrive at an estimate of the amount of interest payments involved in connection with these Regulations, and I think it must be said at the outset that it is quite impossible to get anything like a near figure. But we can obtain some sort if picture of the liability upon local authorities for interest charges if we take the estimate of expenditure of £41 million for land in 1957–58. Assuming, for instance, that 5½ per cent. interest was paid on this sum for a whole year, the amount of interest payments would be £2,255,000.
Of course, that would be a high figure, I admit, and it would not be a realistic one, because the expenditure upon land is not embarked upon in the first month of the year but is spread throughout the whole year, and, obviously, in the course of one year the full rate of interest would not fall upon this amount. But if we assume that for six months of the year this rate of interest was applicable to land purchases we should have a figure of £1¼ million, which local authorities can be assumed to have to find in interest payments. If the Financial Secretary is able to correct us on that figure and give us a more realistic one I am sure that we shall be very pleased to hear what it is.
It is known that in cases of this kind, where local authorities enter into possession by serving a notice of entry, the
1316
amount of interest back-dated from the time that compensation has been agreed varies very much from a few weeks to perhaps six months or nine months, or more, according to the Financial Secretary; and in many cases where there is disagreement and the matter is referred to the Lands Tribunal it may well be twelve months. So I think that we can say that the cost to the local authorities is about £1 million a year, taking the figures for 1957–58.
We believe that this is too large a sum to call upon local authorities to pay in interest charges, but I should like to ask the Financial Secretary why the Treasury has arrived at a figure of 5½ per cent. interest to be charged to local authorities for this purpose when, at the same time, the Treasury has reduced the Bank Rate to 4 per cent. It seems a most extraordinary proceeding to have the Bank Rate reduced to 4 per cent. and yet to maintain an interest rate of 5½ per cent. to local authorities in interest payments of this kind.
I should like to draw the attention of the Financial Secretary to another Order, the contents of which I cannot discuss this evening except to say that under the Opencast Coal (Rate of Interest of Compensation) Order, No. 1804, the Coal Board pursues a very similar procedure to the local authorities in connection with opencast mining. For instance, it also enters into possession of land, leaving the amount of compensation to be settled at a later date, and, when it is finally settled, then to pay a rate of interest upon the compensation money back-dated to the date when it entered into possession. In this case, the Treasury proposes that the Coal Board need pay only 4½ per cent. interest. We feel that that is a far more realistic rate than 5½ per cent., which is the rate charged to local authorities.
Why should there be this distinction? After all is said and done, looking at it in another way, why should the owner of land purchased by a local authority receive a rate of interest I per cent. higher than the rate received by an owner of land taken by the Coal Board? If there is any equity in this matter at all, I should have thought that the rate in both cases should be about the same. The rate of interest which the Coal Board is to be called upon to pay is a realistic one, and the local authorities should be called upon to pay about the same figure.

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Can the Financial Secretary tell us why 5½ per cent. has been fixed for local authorities, when Bank Rate has been reduced to 4 per cent.? Will he not reduce the 5½ per cent. to the figure charged to the Coal Board, namely, 4½ per cent.?
From 1947 until 1951, during the time of the Labour Government, the rate of interest charged to local authorities for purposes of this kind was 3½ per cent. It was not until hon. Gentlemen opposite returned to power that they, in March, 1952, increased the rate of interest to 4½ per cent., and, at later stages, increased it to 6½ per cent. Here they propose to reduce it to 5½ per cent. The interest rate to be paid by local authorities, even on the present basis of 51 per cent., is 2 per cent. greater than it was during the whole period of the Labour Government.
Why have the Government chosen to maintain so high a rate of interest in present circumstances? Rates of interest are falling, and we feel that local authorities should be entitled to receive a benefit from the decline in interest rates far greater than is proposed by the Treasury here.
We do not intend to divide against the Regulations, because we cannot divide against a concession which the Treasury is giving to local authorities. At the same time, we register a most emphatic protest that the reduction is not sufficient. It is not in line with the general downward trend in interest rates. In view of the many burdens which local authorities have to shoulder, and the ever-increasing expenditure which falls upon them and their ratepayers, we feel that this rate should be still further reduced.
We shall not complain if the Financial Secretary says that he thinks there is a case for reducing the rate of interest from 5½ to 4½ per cent. or even, if he wants to compete with the Labour Government, to what it then was, a 3½ per cent. figure. So, in moving this Motion, I look forward with some interest to the Financial Secretary's response to our appeal and to hear what justification he has for this differential between the Bank Rate and the Coal Board regulations, on the one hand, and, on the other, the present Regulations which we are praying against. What is the justification for maintaining this differential in these figures, when we
1318
believe that with the general downward trend 5½ per cent. is too high and that it should be brought down to a much lower figure?
Any concession that the hon. and learned Gentleman is able to make in this matter will be of considerable importance, although the amount of money is not exceptionally large. Nevertheless, if the figure is about £1 million a year, which. I think, it would be, it is a fairly substantial sum of money, and if a large part of that is saved by the local authority, by a reduction still further of the rate of interest, the advantage of that reduction will go to the local authority in financing the costs of many of its services, including slum clearance, redevelopment and housing.
I therefore do hope that what I have said will convince the hon. and learned Gentleman that something needs to be done to reduce this rate of 5½ per cent. to a more realistic figure.
10.17 p.m.
Mr. James McInnes: I beg to second the Motion.
There are one or two points I should like to add to those made by my hon. Friend the Member for Acton (Mr. Sparks). Unlike my hon. Friend, I am not in possession of the information which has been made available to him through the Ministry of Housing and Local Government about the volume of the land which has been acquired by local authorities over a given period, nor that about the amount of money involved in respect of land of which the local authorities have entered into possession without paying compensation.
However, that is nothing unusual for a Member from Scotland, because the Scottish Office is absolutely bankrupt of statistics. I have taken the Scottish Office to task so often in the House. Indeed, not long ago I was able to reveal that statistics for seven years had not been published. The Joint Under-Secretary himself confessed to that failure. So I am at that disadvantage tonight in not being in possession of knowledge of that kind.
Like my hon. Friend the Member for Acton, I want to know just precisely—because I confess my ignorance—what is the relationship between the Bank Rate and the rate of interest laid down in these Regulations.

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We know that in the last four years the Bank Rate has fluctuated on no fewer than eleven occasions. I wonder whether there is any relationship between the rate of interest provided for in these Regulations and that operating under the Public Works Loan Board, where fluctuations have occurred on no fewer than eighteen occasions since the Government came into power. I should like to know exactly what the relationship is. I find that similar Regulations were laid on 17th July when the rate of interest was reduced from 7 to 6¼ per cent., and on this occasion it is sought to reduce it to 5½ per cent.
Why must we relate the rate of interest, if we do, to either the Bank Rate or the Public Works Loan Board rate? Would I not be correct in asserting that the compensation which is outstanding would
1320
be payable at least within a period of three years? I thought I heard the Financial Secretary indicate to my hon. Friend, when he suggested nine months, that it would be longer. If what I say is the case, why do not the Regulations make some provision for charging interest at the rate which would be in operation in respect of borrowings for short-term loans? Borrowing for short-term loans is much cheaper than borrowing over a much longer period, and three years is one of the periods provided for in short-term borrowing.
I hope that the Financial Secretary will refer to some of the issues which I have raised, but I am not overlooking the obligation of the Joint Under-Secretary of State for Scotland, and I also hope to hear from him about his omissions and failures in this matter.
10.23 p.m.
Mr. G. R. Mitchison: I support the English Prayer. If we had had the Scottish Prayer formally before us I should have done the same with that.
We are concerned here with a fairly simple matter. We are not called on to discuss the general question of the excessively high rates of interest which we believe are charged to local authorities. What we are considering is the rate to be paid when a local authority compulsorily acquiring land enters it and has to pay interest from the date of entry until the date when compensation is agreed or assessed and paid. I think we can safely take it that that is a period which will probably be a good deal less than a year, but it is unlikely to exceed a year. No doubt the Financial Secretary will correct me if there are many cases of longer duration than that, and will also give us some idea of the amount of money involved, for I feel sure that he would not authorise the issue of Regulations of this kind without knowing the extent of the burden they laid on local authorities in the course of a year.
One can look at this matter in several ways, but one might begin by looking at the question of time. These Regulations were issued on 29th October, 1958, and were signed, as always in these cases, by two of the Lords Commissioners of Her Majesty's Treasury, presumably, as the phrase goes, "in their own hand". Probably on the same day they signed the Order about opencast coal, which is exactly similar as a case. It is true that what is being acquired there is compulsory rights of occupation, but again the payment of interest is to be made over the period from entry or occupation, whichever one likes to call it, until the assessment in the terms of the Act. In that case it is not always a legal assessment, but it is until the final determination. We are therefore dealing with comparatively short periods.
On 20th November, the Bank Rate was reduced to 4 per cent., but no change has been made in the Regulations. I suggest to the Financial Secretary that he might take that matter into account. What we are here considering is not the kind of loan that comes from the Public Works Loan Board, which is usually of considerably longer duration and
1322
might well run up to forty or sixty years in the case of the purchase of a house.
What we are here considering is money loaned for a short period. Present bill rates are about 3½ per cent. for Bank bills and a little over 4½ per cent. for fine trade bills. We know that money can be borrowed from day to day much more cheaply than at the Bank Rate, and this is a different sort of transaction from a long-term loan. The prices of short-dated securities in the market fall somewhere between the very short rates of hills and the somewhat higher rates at present ruling for longer term loans. Therefore, some allowance ought to be made for the fact that these are quite short-term loans.
There is another way of considering the matter. Let us suppose that the person who is to get this compensation is remarkably "broke" and has to get a bank overdraft. With the change in the Bank Rate, the rate on his hank overdraft will have fallen. There are few people nowadays—although the man who is completely broke might be one—who would have to pay 5½ per cent. on a bank overdraft. The current rate on a good bank overdraft is about 4½ per cent., and that is very much nearer the mark than this rate.
Let us consider the matter from the point of view of public advantage, because even the Treasury ought to do that, and I hope from the smile on the hon. and learned Gentleman's face that in fact it does do so. The position is that if local authorities are discouraged from entering a piece of acquired property until the compensation can be assessed, during the interval there is a remarkably inconvenient state of affairs which does no good to anybody.
A local authority cannot compulsorily acquire without Ministerial leave—at any rate I cannot think of an instance, and certainly in the vast majority of cases Ministerial leave is required. By the time the local authority enters the property it will have had Ministerial leave to acquire compulsorily and Ministerial leave to make an early entry, and it could not get those leaves if it were not for the good of the community that it should not only carry out the acquisition but proceed with it immediately.

1323
Those are the most obvious reasons, and it can serve no possible purpose to hold up the work of local authorities because they fail to pay what I regard as an excessive rate of interest over the period between entry and determination of compensation. On public grounds, there is every advantage in keeping this rate as low as possible.
I have an idea of what the hon. and learned Gentleman will say about the opencast coal case. He will say that it is quite different, that there is somebody else behind it, and that there are special relations between the Treasury and the Coal Board, or something of the sort. After all, the point is a simple one. My hon. Friend the Member for Acton (Mr. Sparks) put it very clearly. He made his first speech from the Dispatch Box in a manner which attracted the admiration of us all.
The Financial Secretary to the Treasury (Mr. J. E. S. Simon)The Financial Secretary to the Treasury (Mr. J. E. S. Simon) indicated assent.
Mr. Mitchison: I am glad to see the hon. and learned Gentleman nodding agreement with me.
If fairness is the test, is it fair that a man whose land is being occupied under the compulsory powers of the National Coal Board should get the advantage of a lower rate of interest, while the man whose land is acquired by a local authority should receive a higher rate of interest? Surely, the fair thing to do is to look at the market value, as the Government are constantly urging us to do. For money for a short period we should take the test of the money market or of the overdraft; or we should have regard to the fall in the Bank Rate and say that in ordinary good sense that should have an effect on the rate of interest charged. Therefore one comes to the conclusion that these Regulations, which were made before the fall in the rate which accompanied the change in the Bank Rate ought to be revoked and replaced by Regulations specifying a distinctly low rate of interest. That is quite apart from the general point that these rates tend to be too high.
I am concerned with these Regulations. I do not complain about the open-
1324
cast coal rate, we are not concerned with that today. I am complaining about these Regulations. The hon. and learned Gentleman is present to deal with what is a comparatively small matter but one concerned with justice and fairness both to the people being compensated and to the local authorities carrying out public work. I hope he will not feel bound to uphold this rate but will tell us that his right hon. Friend will reconsider the matter and will make a substantial reduction in it.
When dealing with short-term loans of this character in future, I hope it will be borne in mind that as a rule they ought to be at a very low rate of interest. It should be remembered that to have a rate of interest which seems too high to the acquiring authority will have the effect of tempting the authority to wait until it can get in at a more reasonable rate. I agree that the inducement is not high, that the amount of money is probably not large, but there is no reason to neglect the point on that score.
Let us hope that tonight we shall not have the all too frequent ending to a Prayer upon which there is to be no Division when the Minister concerned says, "Yes, but…yes, but …yes, but …" and does not really consider the public advantage and, as in this case, fairness between the acquiring authority and the owner and between one owner and another. So, hoping for the best, I urge the hon. and learned Gentleman to think carefully and to weigh this matter carefully.
10.34 p.m.
The Financial Secretary to the Treasury (Mr. J. E. S. Simon): It is agreeable to find that the hon. and learned Member for Kettering (Mr. Mitchison) expects a spokesman from this Dispatch Box to say, "Yes, but…" rather than, "No, but…" in reply to a Motion of this kind. Before dealing with what, I agree, is an important matter affecting compensation to private individuals dispossessed of land and which may result in a burden being put on the ratepayers, may I extend congratulations to the hon. Member for Acton (Mr. Sparks) on his first speech from the Opposition Front Bench. We know that the hon. Gentleman is a master of these matters of local government. The way in which he gave

1325
the background to this subject was particularly agreeable to me, because it saves me from having to go into the details which it is necessary to know in order to discuss the point at issue. It was a very great pleasure to see him speaking there, and I hope he will speak from that Bench and that Box for many years to come.
I have not enjoyed the felicities of the Scottish Standing Committee, so I have not had to answer the hon. Member for Glasgow, Central (Mr. McInnes) before, but, if I may say so with respect, he made what seemed to be a very important point, namely, whether the interest should be in any way geared to the longterm interest rates or short-term interest rates. That point the hon. and learned Member took up later, and I propose to deal with it.
This is an important matter, because it concerns, on the one hand, the rights of the private individual dispossessed of his land in the public interest and, on the other hand, the expenditure of public moneys through the local authorities. We would be probably agreed on two general principles. So far as I can see, both in principle and in practice there has been no difference here between what happened under the former Government and the present Government. Although, as the hon. Member for Acton mentioned, the rates of interest were lower, the way the matter was dealt with was the same.
Looking at the point of principle, I think we would all be agreed that in a perfect world no individual would be dispossessed of his land in advance of compensation. It would obviously be desirable if possible that he should be paid full compensation at the moment the local authority or the public authority —for of course this order concerns more than local authorities—enters upon his land. But this is a less than perfect world, and in many cases it is necessary for the public authority to enter on land in advance of agreement on compensation.
That agreement may be considerably delayed. I think the hon. Member for Glasgow, Central was right when he said it may extend to a matter of years, although I think he was right in saying that one would be disturbed if one found it was more than three years. One
1326
knows there are cases where there are difficulties in negotiations and sometimes, as the hon. and learned Member knows from his professional practice, there are difficulties in making title and that sort of thing which cause delay. Therefore, the interest to be paid during the period of delay may be an important matter.
The first general consideration is that we would all want to put the dispossessed subject in the same financial position as he would have been if at the point of entry he had managed to secure an agreed sum in compensation. The second general point of principle on which I think we all would be agreed is that there should be an incentive to a rapid completion of the transaction, as rapid an agreement as possible, or, if the matter cannot be agreed, as rapid a determination as possible. Negotiations should not be prolonged beyond what is justifiable in order to secure fair compensation.
It is against those two general principles that the interest rates have been fixed by the Treasury under successive Governments. To take the point of view of the private individual who is dispossessed, one must envisage him as seeking accommodation from the bank in order to put himself in the meantime in the sort of position he would have been if compensation had been paid at the point of entry.
For the individual, therefore, one looks to the current overdraft rate. If he is paid at a higher rate, obviously he has an incentive to prolong negotiations, which is undesirable. If he is paid at a considerably lower rate, he will be out of pocket, which is unfair to him. That is from the point of view of the private individual.
The local authority, on the other hand, is saving interest on a long-term loan which it would otherwise have had to raise in order to pay compensation in a case of normal compulsory compensation. I will deal later with the point raised by the hon. Member for Glasgow, Central—whether this should be geared to the short-term rates—but, assuming that the compensation had been paid at the point of entry, it would be a long-term loan which the public authority would normally be raising in acquiring property permanently.
Mr. Mitchison: What I think the hon. and learned Member is forgetting is the very high proportion of loans which is now being raised by local authorities, particularly perhaps the smaller authorities, on mortgages for quite short periods. For example, small local authorities such as the district councils in Northampton-shire raise a lot of money at 5 per cent.
Mr. Simon: It is undoubtedly true that a great many current transactions are financed on the mortgage market. Nevertheless, in looking at what it is necessary to raise in order to complete a long-term transaction—I see that the hon. Member for Glasgow, Central agrees—it is right that one should look at the long-term rates. For example, in acquiring land for a school, although the local authority might need immediate accommodation in the mortgage market, it would be in the long-term market that it would raise the funds necessary for such a transaction.
In the case of a public authority one looks to the long-term interest rate, and one can view that in the same way as one views the position of the individual; if the rate fixed by the Treasury is very much above the long-term interest rate, the local authority is having to pay too much, while if it is fixed very much below that rate, there is an incentive for the public authority to prolong the negotiations, It is exactly reciprocal to the case of the individual.
What the Treasury seeks to do, and has sought to do over all the years that this power has rested with it, is to fix a rate in relation to both those considerations —the rate at which the individual has to borrow from the bank on the one hand and, on the other hand, the rate at which the public authority has to borrow for the appropriate term in the market or from the Public Works Loan Board or—for a great many public authorities, like the new towns and the Hydro-Electric Board in Scotland—from the Exchequer.
If the bank borrowing rate is above the long-term interest rate in the market, as it might well be, then if a rate under this Act is fixed half-way between the two there is an equal incentive in respect of both parties to complete, or an equal disincentive to prolong negotiations. If, on the other hand, as sometimes happens, the two rates are reversed, and this rate is fixed halfway between them, both
1328
parties are again equally treated. It was for that reason that the rate was fixed in the present case at 5½ per cent. The prevailing overdraft charges at that time were 5½ per cent.—that is, Bank Rate plus 1 per cent. in the usual way.
Mr. Mitchison: At that time.
Mr. Simon: Yes, at that time. There was a 4½ per cent. Bank Rate at the time when the Regulations were made.
On the other hand, looking at the other consideration that has to be borne in mind, the average long-term borrowing cost to the various public authorities stood at a fraction above that rate, so that in fixing the rate at 5½ per cent. one was, if anything, penalising the dispossessed landowner and favouring the local authority. However, as I say, it was marginal, and done really because 5½ per cent. was the nearest convenient figure; indeed, if anything, it erred in favour of the public authority.
The hon. Member for Glasgow, Central asked—very pertinently, if I may say so —why the rate was geared to the long-term and not to the short-term rate, since in theory a public authority could raise money in the short-term market to finance what is essentially a short-term transaction. If the House has followed my analysis, it will see that the reason for gearing the rate to the long-term market is that one wants to give incentive to rapid completion. If it were geared to the short-term rate—considerably below, as it sometimes is, the long-term rate—the public authority quite clearly would have a strong incentive not to complete. So, since what is relevant is to ask what would the public authority have to pay if it paid the compensation at the moment of entry, it is the long-term rate that is relevant.
The hon. Member for Acton asked, and his question was echoed by his hon. and learned Friend, why the rate is only 4½ per cent. in relation to opencast coal operations—
Mr. Mitchison: Before the hon. and learned Gentleman turns to that, will he deal with what seems to me to be the more serious question of the disincentive to the public authority entering early? If the rate is or seems to it to be too high, it will wait until the compensation is

1329
assessed before entering. Not all compulsory acquisition entails an early entry. It has to be weighed by the authority.
Secondly, the Financial Secretary gave us the figures before Bank Rate was changed. He will appreciate that a different figure results from the same premises now that Bank Rate has been lowered.
Mr. Simon: I do not think it is right that there is a disincentive to early entry. If the local authority entered at the same time as it had to pay the compensation, it would have to raise the money at the long-term rate, so there is no such disincentive. As I said at the beginning, the ideal position, as we would all admit, would be that the local authority should be able to know what compensation is payable at the moment of entry; and the compensation payable would be the full value of the land—for which it would have to raise a loan in the long-term market. There is, therefore, no disincentive in the authority having to pay long-term rates of interest from the beginning.
I had intended to deal with the hon. and learned Gentleman's second point at a later stage, but it is quite convenient to deal with it now. It is, of course, right that this rate was fixed when the Bank Rate was 4½ per cent., but the Bank Rate has since been reduced to 4 per cent. and the hon. Member for Glasgow, Central, in drawing attention to this, asked what was the relationship. There is a close relationship between the Bank Rate and the short-term market rate. There is also a direct relationship between the Bank Rate and the overdraft rate.
Mr. Mackie: Hear, hear. Call it by its proper name.
Mr. Simon: But that is only one side. The other side is the long-term market rate, but that is not directly affected by a reduction in the Bank Rate, although it does tend—indirectly, and after a time —to reflect movements in Bank Rate.
Therefore, all I can say is that a movement in the Bank Rate is certainly a relevant consideration but does not necessarily determine a move in this interest rate any more than it does in the Public Works Loan Board rate. That further movement down in the Bank Rate
1330
is something which we are hound to take into consideration. We are keeping these interest rates under review, but at the moment it does not appear that public authorities' borrowing rates, medium and long-term, have yet been correspondingly affected.
Mr. Mitchison: I apologise for interrupting the hon. and learned Gentleman, but he himself told us how this rate was fixed. It was fixed at half-way between the overdraft rate and the Public Works Loan Board rate. The overdraft rate has now fallen by a half per cent., and unless the hon. and learned Gentleman's reasoning varies with Bank Rate, we appear to be entitled to at least a quarter per cent. reduction, and I wonder what interest he is going to allow to local authorities for the period between the time when this is put to him and when it is acted upon.
Mr. Simon: The hon. and learned Gentleman has apparently not done me the courtesy of following what I said. At the time this interest rate was fixed, I pointed out that the overdraft rate was 5½ per cent. The public authorities' medium and long-term borrowing rate was slightly above that, and therefore the rate of 5½ per cent. was fixed favourably to the public authorities. Since then it may be that the overdraft rate has dropped by a half per cent., but there has been, so far as we have been able to measure, no corresponding movement yet in the medium and long-term rates of the public authorities. Therefore, although we keep this matter under review and are prepared to move, there is not yet a case for shifting the interest rates.
I was going to deal with the important point made by the hon. Member for Acton, the hon. Member for Glasgow, Central and the hon. and learned Member for Kettering, namely, the question why in the case of entry on land used for opencast coal workings the rate was fixed at 4½ per cent. I think the difference arises precisely from the analysis I ventured to make, because there one is not acquiring land permanently and it is not therefore reelvant to look at the medium and long-term rates. It is there that the short-term rate is relevant. Therefore, one gives greater weight to the short-term rate in fixing the rate of

1331
interest payable where there is delay in entry on to land being used temporarily for opencast coal working.
Finally, I am bound to point out that in doing what we are doing we are acting quite consistently with the practice adopted by hon. Members opposite when they were in power. The rate of interest under the Town and Country Planning Act stood at 4 per cent. from 1944 until 1st May, 1947, and then, as the hon. Gentleman pointed out, it went down to 3½ per cent. But during that time the Bank Rate stood at no more than 2 per cent., and that meant that at a time when the private land owner could get a loan at about 3½ per cent. from his own bank at overdraft rate the local authorities were obliged to pay him 4 per cent, if they could not reach agreement.
During that time the local authorities—I am taking purely the local authorities in this case—had to borrow from the public Works Loans Board at rates varying between 3½ per cent, and 2½ per cent. As I say, they had to pay 4 per cent. at the beginning of that time and subsequently 3½ per cent. to the land owners. As so often, I find that the practice of the hon. and learned Gentleman and his friends is so much better than the principles that they preach—
Mr. Mitchison: At least we put it right, and that is what we are asking the hon. and learned Gentleman to do.
Mr. Simon: The hon. and learned Gentleman is quite incorrect. Even when it came down to 3½ per cent. it was still substantially above both the overdraft rate and the Public Works Loans Board rate. We on the contrary tried to put it between those two so as to provide an incentive to quick completion and so as to act fairly between the conflicting interests of the dispossessed land owner on the one hand and the ratepayers on the other.
I was very glad to hear that the hon. and learned Gentleman was not going to call a Division, because it would only have the effect that the interest rate would be kept still higher. All I can say is that this is a flexible instrument. We shall continue, as the party opposite did, to use it consistently with the principles that I have laid before the House, which seem to me to be fair to all concerned.
Mr. Sparks: In view of the remarks of the hon. and learned Gentleman the Financial Secretary, although we do not agree with all he said, I beg to ask leave to withdraw the Motion.
Motion, by leave, withdrawn.

ADJOURNMENT
Resolved, That this House do now adjourn.—[Mr. Hughes-Young.]
Adjourned accordingly at two minutes to Eleven o'clock.

EMPLOYMENT
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Preamble
The House met at half past two of the clock. The LORD CHANCELLOR on the Woolsack.
Prayers
The Viscount Bledisloe—Sat first in Parliament after the death of his father.

POLLUTION OF RIVERS
2.35 p.m.
LORD FRASER OF
LONSDALE: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government if they are aware that many rivers in Britain are polluted by untreated or inadequately treated sewage and by industrial effluent, so that beaches are spoiled. fish are killed and beautiful places are often unpleasant and sometimes disgusting, and if Her Majesty's Government will take action, and encourage and help local authorities to take action, to remedy this situation.]
EARL BATHURST: My Lords, my right honourable friend is very much aware of the facts of the Question which has been raised by my noble and gallant friend. In particular cases the adequate treatment of domestic sewage and industrial waste is a very grave problem caused by housing and new industrial development. In the past years it has not been possible to authorise unlimited capital expenditure on sewage disposal schemes to keep up with this development. In the main that is the solution to the problem which has been raised by my noble and gallant friend. Nevertheless, I believe that the position is improving, if only a little. By the Rivers (Prevention of Pollution) Act, 1951, the consent of river boards is required for all new or altered discharges into rivers under the boards' administration. In general, close co-operation exists between the river boards and local authorities and the interested parties concerned, and new pollution now rarely Occurs.
Since 1945, some £237 million has been spent by local authorities in the United
1062
Kingdom as a whole upon new sewage works. In addition, industry has spent large amounts of money on the pretreatment of its own waste. The Trade Effluent Committee, under the chairmanship of Sir Frederick Armer, K.C.B., is examining the current problems and is expected to make its Report in the course of the next year. On November 17, my right honourable friend sent a circular, No. 60/58, to all local authorities announcing the relaxation of capital investment for new sewage schemes. In 1957, in England and Wales, £24.9 million was authorised for sewage disposal schemes, and from January to October of this year £27 million has been authorised—a greater sum than ever before.
I should like to thank my noble and gallant friend for raising this question in your Lordships' House to-day, and for providing this opportunity to state the concern that my right honourable friend has for this subject. He has publicly emphasised his determination to clean up the country's river system so far as is practicable. The measures I have described will in time have a long and large part to play in
the remedying of this situation.
LORD FRASER OF LONSDALE:My Lords, is my noble friend aware that in the River Ribble on the West Coast, as indeed in the River Tyne on the East Coast, forty or fifty years ago there were 20,000 or 30,000 salmon coming up the river each season? Now there are only 300 or 400 in the River Ribble and only a handful, if any, in the River Tyne. That in itself the noble Earl may not think so very important, but it is not good, he may agree, for children to paddle and bathe in water in which salmon cannot live. Now that the Government are finding it possible and, indeed, desirable, to release a little more money and credit for local authorities, will Her Majesty's Government give a fair and reasonable priority to the cleaning up of our rivers, bearing in mind that even if this subject does not come first of all the charges upon us, if we do not have a programme for some years it tends to fall to the bottom of the list, and it is bad for the community, both as regards its health and, in the end, its wealth, that its rivers should be fi hy.
EARL BATHURST: My Lords, I beg to assure the noble Lord that my right honourable friend is indeed aware of the situation that exists with the River Ribble and all the rivers in the industrial areas of the United Kingdom. Although I cannot say that I, personally, picked up my copy of the Angling Times, it has been put before my right honourable friend that the noble and gallant Lord, together with an honourable lady Member of another place held a meeting at Preston where this problem was discussed. I daresay it was the most lively and best attended public meeting that I suspect the noble Lord and the honourable lady from another place will hold this side of the next Election. I beg to assure the noble and gallant Lord that my right honourable friend has the River Ribble and all the industrial rivers under his special care, and the measures I have announced will go a long way to prevent the pollution which undoubtedly exists.
VISCOUNT ELIBANK: My Lords, may I ask the noble Earl a question interlocked with this? While it is true that the mid-November circular to local authorities gave them greater freedom to embark upon water schemes, I would point out that these schemes will mean greater extraction from the rivers unless, at the same time, a large-scale water storage scheme is carried into effect for the benefit both of the domestic supplies and of the rivers. Is not an adequate water supply one of the prime necessities of our age?
EARL BATHURST: My Lords, I think that that is not entirely relevant to the Question on the Order Paper, but in the circular water schemes and sewerage go hand in hand. That is the purpose of the circular.
VISCOUNT ELIBANK: I referred to water storage schemes.
LORD SALTOUN: My Lords, may I ask whether it is not the case that the situation is very much complicated by the mingling of trade effluent with domestic sewage; whether there is any really good
1064
reason why the public should have to pay the cost of cleansing trade effluents which ought really to be borne by the manufacturers; and whether it is not possible for the Minister to take a sterner attitude in regard to the provision in the original Act of 1878 and the subsequent Acts under which the licence for the discharge of trade effluents into our streams and rivers has always proceeded?
EARL BATHURST: My Lords, under the 1951 Act, through the co-operation of the river boards and the authorities concerned it is no longer possible to make new pollution. Whilst I agree that trade effluent is one of the most complicated difficulties for the sewage authority, nevertheless industry does provide a great deal of money for pre-treatment, and indeed local authorities often charge industry for the treatment at the works.
LORD LATHAM: Is the noble Earl aware that while it may be true that under the Act of 1951 new pollution cannot be created, nevertheless the existing pollution can be greatly added to?
EARL BATHURST: My Lords, it should be possible under the Act, if authorities co-operate, for the interested parties to see that pollution is not greatly added to.
LORD DOUGLAS OF BARLOCH: Is the noble Lord not aware that since the passage of the Act referred to pollution has been very much increased by domestic effluent containing enormous quantities of detergents?
EARL BATHURST: My Lords, a special Committee is at present sitting with regard to detergents and has already reported; and a copy of the Report is in your Lordships' Library. An Interim Report from the Standing Technical Committee on Synthetic Detergents is available to your Lordships, and the Committee will be reporting again next year.
LORD LATHAM: Would it not be correct to say the Committee is floating rather than sitting?

TAXATION ON HIGHER INCOMES
2.44 p.m.
THE EARL OF WOOLTON: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what would be the cost to the Revenue in a year if the maximum taxation levied on any individual income from whatever source was limited to 15s. Od. in the pound.]
THE MINISTER WITHOUT PORT FOLIO (THE EARL OF DUNDEE): My Lords, to retain the present surtax scale on incomes up to £6,000, when the rate now reaches 6s. 6d. in the pound, and to charge all income in excess of that amount at 6s. 6d. so that the maximum combined rate of income tax and surtax was 15s. in the pound, would cost about £17 million a year.
THE EARL OF WOOLTON: My Lords, may ask Her Majesty's Government whether, in view of the comparatively insignificant yield of this punitive tax, it is retained for the purposes of revenue or for political purposes?
THE EARL OF DUNDEE: My Lords, I will put that distinction to my right honourable friend the Chancellor of the Exchequer with conviction, but without much hope.
VISCOUNT STANSGATE: My Lords, in view of the importance of the Question asked by the late chief of the Conservative Party, may I ask the noble Earl whether he has made any suggestion as to which taxpayer should pay the deficit caused by the exemption of the surtax payer?
THE EARL OF DUNDEE: I have made no suggestion and I do not think anybody else has.
LORD HAWKE: My Lords, do the figures given by my noble friend make any allowance for the increased revenue from the increase in taxable profits of firms and partnerships which could be expected if the proprietors were to have a stake of 25 per cent. instead of the minimum of 5 per cent. in the financial decisions of the firm?
THE EARL OF DUNDEE: No, they do not. I think my noble friend might make something more out of that.
VISCOUNT ALEXANDER OF HILLS BOROUGH: My Lords, could we have an estimate from the noble Earl—I am sure he has been into the matter, in view of the Question—of what has been the total relief given by the present Government to the surtax payer, both in,the remission of 1s. off income tax and the remission of surtax, which we believe in one year alone was over £30 million?
THE EARL OF DUNDEE: My Lords, there has been no alteration in surtax rates, I think, since 1947, when the highest surtax rates went to 10s. in the pound where they still remain. As for relief, I think some noble Lords opposite look at it from the point of view that you are giving people something when in fact you are merely taking away less from them.
VISCOUNT ALEXANDER OF HILLS BOROUGH: My Lords, what is the total relief, then, from the reduction of income tax in the one case and the surtax reliefs in the other?
THE EARL OF DUNDEE: If the noble Viscount is referring to the reduction of income tax, I do not think that has anything to do with the Question.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, it would be enormously greater than the sum of £17 million. Would it not be better to put it back where it was before, so that there was more justice to those less well off?
THE EARL OF DUNDEE: The Question of the noble Earl, Lord Woolton, is a very specific question relating to how much revenue would be sacrificed if a certain thing was done, and I have answered that Question correctly.
LORD STONHAM: May I ask the noble Earl whether, if he is going to make representations to his right honourable friend the Chancellor of the Exchequer about the burdens borne by those whose incomes invite tax above 15s. in the pound, he will at the same time represent the claims of the old age pensioners to a 10s. Christmas gift, and perhaps a restoration of the concessions on babies' milk, and, if there is any small change, something for the Arts Council?
LORD LAWSON: My Lords, is not the noble Earl on rather dangerous ground in giving the answers he is giving to-day?
THE EARL OF DUNDEE: My Lords, I am nearly always on dangerous ground at one time or another.

PARKING RESTRICTIONS AND FACILITIES
2.50 p.m.
LORD WALERAN: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government if they will indicate what steps they are taking, if any, to prevent serious hardship and inconvenience to motorists being caused by the introduction of additional parking restrictions without the provision of off-street parking facilities.]
THE EARL OF GOSFORD: My Lords, Section 19 of the Road Traffic Act, 1956, requires that, before making an order designating metered parking places on highways, my right honourable friend the Minister of Transport and Civil Aviation should have regard, inter alia, to the extent to which off-street parking accommodation in the neighbourhood is available or likely to be encouraged by the introduction of such parking schemes. My noble friend may rest assured that my right honourable friend will have this matter very much in mind in considering any such schemes as may be put before him for approval.
LORD WALERAN: My Lords, I am not entirely happy with that Answer. Perhaps, on behalf of Her Majesty's Government, the noble Earl would tell me whether constructive action will be taken to secure the provision of adequate off-street parking accommodation before authority is given for the introduction of any further parking meter schemes in central London.
THE EARL OF GOSFORD: My Lords, I am glad to hear that my noble friend is at least not entirely unhappy. However, I feel that I have already answered his question. The Minister must take into account, among other things, what possibility there is for off-street parking before he approves a scheme.

CHURCH OF SCOTLAND TRUST ORDER CONFIRMATION BILL
Brought from the Commons; read la, and (pursuant to the Private Legislation Procedure (Scotland) Act, 1936) deemed to have been read 2a and reported from the Committee.

COUNCIL ON TRIBUNALS
2.52 p.m.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I wonder whether the House would give me permission, before the noble Lord, Lord Pethick-Lawrence, speaks, to make a statement on the Council on Tribunals. Your Lordships will recollect that Section 1 of the Tribunals and Inquiries Act, 1958, which received the Royal Assent on the 1st August last, provided for a Council on Tribunals to be set up by the Secretary of State for Scotland and myself. The function of the Council will be to keep under review, and report upon, the constitution and working of administrative tribunals and also of those administrative procedures which involve or may involve the holding of a statutory inquiry by or on behalf of a Minister of the Crown. The need for a supervisory body or bodies to watch over these tribunals and procedures was perhaps the most important recommendation of Sir Oliver Franks's Committee. Her Majesty's Government readily accepted the need for such a Council, and I am glad to say that the Secretary of State for Scotland and I have been fortunate enough to secure the services of the noble Marquess, Lord Reading, as Chairman of the Council. His knowledge of the wide field to be surveyed by this Council is very well known to your Lordships, and I doubt not that his appointment will be warmly welcomed.
Your Lordships will also recall that the Act provided for the constitution of a Scottish Committee, composed partly of members of the Council and partly of others, whose function will be to consider Scottish tribunals and matters relating only to Scotland. Your Lordships will be glad to hear that Sir Hugh Rose, Bt., T.D., has accepted our invitation to become Chairman of the Scottish Committee and a member of the Council. The

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other members of the Council will be as follows:—
The Honourable R. E. B. Beaumont, T.D.,
Mr. David B. Bogle, W.S.,
Sir Herbert Brittain, K.C.B., K.B.E.,
Mr. Harold Collison,
The Earl of Cranbrook, C.B.E.,
Miss Vera Dart, O.B.E.,
Mr. E. Milner Holland, C.B.E., Q.C.,
Major-General Sir Aymer Maxwell, C.B.E., M.C.,
Mr. H. Wentworth Pritchard,
The Viscountess Ridley, O.B.E.,
The Lord Strathalmond, C.B.E.,
Mr. H. W. R. Wade.
In addition to Sir Hugh Rose, the Scottish Committee will include Sir Aymer Maxwell, Mr. Bogle, Mr. W. P. McGinniss, O.B.E., Mr. J. P. Morrison, O.B.E., Mr. I. H. Shearer, Q.C., and one other member still to be appointed.
The Secretary of the Council will be Mr. Alistair Macdonald, at present of the Law Officers' Department, and the Secretary of the Scottish Committee will be Mr. I. M. Wilson, of the Scottish Home Department.
2.55 p.m.
LORD SILKIN: My Lords, we are most grateful to the noble and learned Viscount for making this statement, and for so speedily implementing the section of the Act. under which this Committee is set up. I should like to ask him one or two questions. First of all, is it proposed that there shall be two separate bodies, the English and the Scottish, and that they should act independently? Secondly, on the assumption that they do act independently, will they be reporting periodically—annually or at some kind of regular periods—to the respective Ministers; and will their reports be available to Parliament and to members of the general public? Some of us who have taken a great interest in this matter would like to know what the Council and the Committee are doing. Will it be possible for the public to make representations to either or both of these bodies in respect of any matters where they feel aggrieved? Lastly, could the noble and learned Viscount say what would be the relevance of this Council to wage disputes? Would any tribunal dealing with wage disputes come within their purview?
THE LORD CHANCELLOR: My Lords, I hope I have the noble Lord's five points, and I shall do my best to answer them. On the first point, I may say that there will be the Council operating as a council, which will deal with tribunals and procedures which are common to England and Wales, on the one hand, and Scotland, on the other. The Scottish Committee which will include members of the Council and the other members I have mentioned, will deal with points which are particularly and peculiarly Scottish. The Scottish Committee will then report to the Council, who will report as I shall mention in a moment, in answer to the noble Lord's second question. The noble Lord may remember that his Committee recommended two Councils, but in the Act we made one Council because we thought there were so many tribunals which were common to the United Kingdom, and therefore one Council was the most suitable instrument for dealing with them.
With regard to the question of reports, perhaps I may give my general impression, and then, if there is any point that arises, the noble Lord will perhaps see me afterwards about it. The need to report can arise in a number of ways. In the first place, my right honourable friend the Secretary of State for Scotland and I, or either of us, may refer matters to the Council on Tribunals. In that case I should assume, subject to the wishes of the Council, that they would report to us on the matter which had been referred to them; and, so far as I am concerned, I. see no objection to such a report being made public at once in the usual way. That seems to be the right way to deal with it, although of course I should like to discuss that matter with the noble Marquess when he and his Council have had a chance to consider it.
The second possibility is that the Council may raise a matter of their own motion; and, again, if they report I do not see the slightest objecton to that report being published—in fact, I see everything in its favour. I think that covers the third point of the noble Lord, as to availability of reports. With regard to representations, it will be possible for any member of the public to make representations to the Council, and the Council will then consider whether the matter raised is of sufficient importance. My

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writing is getting a little difficult on the fifth point. I wonder whether the noble Lord could remind me of it.
LORD SILKIN: My Lords, the last point was: what will be the position of this Council with regard to tribunals dealing with wages?
THE LORD CHANCELLOR: My Lords, I think that if the noble Lord will look again at the Act he will find that the wage machinery was deliberately excluded; and I believe that that matter was discussed in your Lordships' House. The ordinary procedures for collective bargaining will still obtain, and will not be affected by the setting up of this Council.
LORD SILKIN: My Lords, while thanking the noble and learned Viscount for his full reply, may I make one suggestion? Would he consider the desirability for the Council to make a periodic report and to have it published?
THE LORD CHANCELLOR: My Lords, the noble Lord has reminded me of my own omission. Apart from other reports which I have mentioned, there is (if my memory serves me aright) a statutory requirement to make an annual report; and that will, of course, be done.
LORD TREFGARNE: My Lords, I am sure that there will be satisfaction at the constitution of this Council, but may I ask whether any terms of reference have been published or whether the making of reports, and so on, will rest on the initiative of the Council itself.
THE LORD CHANCELLOR: My Lords, the noble Lord will find the terms of reference in Section 1 of the Act. Those were very carefully considered in a debate in your Lordships' House and, if I may say so with gratitude, were improved by suggestions made by your Lordships' House in the course of the passage of the Bill. I believe that at the end, judging by what was said, everyone in your Lordships' House was satisfied that the terms of reference expressed fully the flatters upon which inquiry was wanted.
VISCOUNT ALEXANDER OF HILLS BOROUGH: My Lords, may I ask, first, if a Scottish Committee is to be set up, what will be the basis of its composition? Apparently the Council itself is to
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have a membership of what one might call mixed character—some professional and some political. I see that there are to be two members of the Labour Party on the Council, though I cannot see any others. If there is a Scottish Committee will there be political representation of Labour on that Committee also? May I also ask whether, in view of the subsequent action of Her Majesty's Government in refusing to renew the procedure for industrial tribunals to inquire into certain kinds of wage disputes, so that that procedure is no longer available, some such Council as this could be set up for all other tribunals? Is it not high time that Her Majesty's Government revised their policy? If any member of the public can come under this procedure and bring new matters to the attention of the Council, why cannot that other question be dealt with in a similar way?
THE LORD CHANCELLOR: My Lords, on the first point, I would say that Party political considerations did not enter into my mind in selecting the members of this Council. But I am most grateful for the fact that on the Council there will be Mr. Harold Collison who, as the noble Viscount who leads the Opposition is well aware. is not only a member of the National Union of Agricultural Workers but Chairman of the Trades Union Congress Social Services Committee, and therefore seemed to me an admirable person to consider the many tribunals that deal with social service matters. It happens that Miss Vera Dart is a Labour member of the London County Council, and again I should like to stress—and I am sure that the noble Viscount will realise what is in my mind —that Miss Dart was Chairman of the London County Council Children's Committee from 1949 to 1952 and a member of the Central Training Council on Child Care from 1951 to 1952; and that there are, therefore, claims other than those of political representation.
With regard to Scotland, I believe that the noble Viscount must have missed one name. He will have noticed that the Scottish Committee includes Mr. W. P. McGinniss, a former Chairman of the Scottish Trades Union Congress who was also a member of the recent Royal Commission on Scottish affairs. The membership of the Scottish Committee, if I may

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repeat it for the noble Viscount to have in mind, will be: Sir Hugh Rose, Sir Aymer Maxwell, Mr. Bogle, Mr. McGinniss, Mr. Morrison and Mr. Ian H Shearer, Q.C., and one other member. They will deal with matters which are peculiar to Scotland and are not United Kingdom matters.
With regard to the second point, I am sure that another opportunity will come for the noble Viscount to raise the question of the action of my right honourable friend the Minister of Labour in regard to one of the tribunals. I would only remind him that at the moment it leaves the other Tribunal still in existence, and also leaves unimpaired the powers of my right honourable friend under the Conciliation Act, 1896, and the Ministry of Labour Act, 1919. I hope that the noble Viscount will not take it amiss if I do not debate the matter further, if only because I am sure that we shall have another chance of discussing it.

PROVISION FOR OLD AGE
3.7 p.m.
LORD PETHICK-LAWRENCE LORD PETHICK-LAWRENCE rose to call attention to the White Paper Provision for Old Age (Cmnd. 538); and to move for Papers. The noble Lord said: My Lords, when I spoke on this matter on October 30, during the debate on the Address in reply to the gracious Speech from the Throne, I expressed the hope that this House might have an opportunity of a further discussion on this matter—provision for old age—before it became embodied. in a Bill and was discussed in another place. I am grateful to your Lordships that that proposal which was supported by the noble and learned Viscount on the Woolsack, has been brought into effect to-day; and I am further gratified that noble Lords in all parts of the House are, I understand, proposing to take part in this debate. I notice that there are to be two maiden speeches, and we are all greatly looking forward to hearing them. If I may add just one personal note, this question of pensions for the old is one that I have had close at heart for practically the whole of my political life, running into something like sixty years, and I was first acquainted with it in connection with my old friend, Keir Hardie, who was the pioneer of the Labour movement in the other place.
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In my speech on October 30 I covered a fairly wide range. I do not propose to do that to-day. I propose to confine myself to two or three subjects, leaving other aspects of the question to be dealt with by speakers on both sides who follow me. The points with which I propose to deal are principally these. First, I want to discuss what were the objects of introducing this new proposal and how far the White Paper of Her Majesty's Government indicates that those objects will be fulfilled. In the second place, I want to discuss what limits there should be on the universality of the scheme and how far that is provided for in the proposals of Her Majesty's Government. In the third place, I want to deal with the question of contracting-out; and, in the fourth place, with the question of how far such payments as are made shall be expressed in terms of pounds, shillings and pence, or whether they should provide for any variability by comparison with some index or other.
Coming to the first of those questions, I think the objects of the scheme are three in number. In the first place, it is quite clear to all of us, on whichever side of this House we sit, that the finances of the old age pension scheme are to some extent breaking down. We are all aware of the reason why that is happening. It is due to the change in costs and in the standard of living, and the consequent fact that a number of amending Bills have been introduced and carried through both Houses of Parliament in order to bring the pensions up to date. That has destroyed the actuarial accuracy of the pension scheme, and that is one of the reasons why a new scheme is required and is being introduced by the Government in the form of their White Paper.
In the second place, there is no doubt that the pensions provided for a very large number of those who receive them are not up to what is required. Therefore, a large number of pensioners think it right to make supplementary provision for their old age in various ways, from the lowest, who receive supplement by means of the National Assistance Board, to the highest, who make schemes of their own or provide through their employers' superannuation funds. In the third place, it is now generally recognised that a pension, to be of any real

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value to the recipient, should bear some relation to the income which he has been in the habit of receiving during the years of his active life.
With regard to the first of those three points, the financial breakdown of the existing scheme, I do not think we are yet in a position fully to judge, because we have not, I believe, had a full actuarial report; but that is promised us later on, and when we have it we shall be able to judge how far the Government's scheme fully meets that question. As for the two other reasons for the introduction of this scheme, I would claim that the Government's proposals do not fully meet the situation. They do not meet it with regard to the people at the lower end, because a great proportion of them have to seek relief from the National Assistance Board; and they do not meet it higher up, because I do not think that the pensions, even as projected to be provided in the Government's scheme, will be fully adequate to enable the recipients to live on them.
In particular, in that connection, I suggest that the upper limit fixed by the Government is quite inadequate for the purpose of satisfying them. I know what the Government's answer is. Their answer is that they are not supposed to be adequate; they are supposed to be a help, and the rest should be done by the private resources of the individual. I know that argument and I shall deal with it more or less later on. At any rate, by themselves, these proposals, from my point of view, fail in both those respects.
With regard to the question of the upper limit, I would say just this: that this is, to some extent, a new idea. The original old age pension scheme was merely to provide bread and butter and shelter and a few absolute necessaries for every person. The scheme is supposed to go further than that, and it goes on the principle which I mentioned just now: that where a man has been having a certain income during his life, his pension ought to bear some relation to it. That, of course, is a now idea. It is recognised both in the Government scheme and in the scheme which was prepared by the Labour Party, but it is a new idea. It conflicts with the old ideological conception of equality, but in the case of both Parties it is accepted now that that must
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be done and that what may be wealth, or at any rate a sufficiency, for one man, is quite inadequate for another man, because when he has reached a certain stage in his life he has commitments of various kinds which make a small amount quite inadequate for his requirements. The point I am making is this: that if it be true that the £15-a-week man needs in his retirement a higher pension than the £8-a-week man, it is equally true that the £24-a-week man needs a higher rate of income or pension than the £15-a-week man. That is where I think the Government's figures stop short. They do not carry the graduation further up the scale as I think they should.
I want to turn from that matter to the question of universality. One of the great deficiencies of the Government's scheme that I pointed out on October 30 is that the self-employed are left out of the scheme. The noble and learned Viscount on the Woolsack said that it was because it was administratively difficult to bring them in. That may be true; it may be difficult, but I do not think it is impossible. I have been told in the course of my political life of a great many things that were administratively quite impossible, and to my surprise at first, but now to my expectation, before very long they have been found perfectly workable and are in effect to-day. I cannot give a better illustration of that than P.A.Y.E., the method of collecting income tax week by week from the wage-earning part of society. That, we were told at the beginning, was utterly out of the question, yet now it is an accomplished fact which is practised every week of the year.
Then it is said by the Government that the self-employed could not be brought in except by their having to pay a very large premium. That may be the case but that is no reason whatever why the self-employed man should not have the option. He could assess his own income for the purpose of the scheme at any figure within reason, and if he were outrageously wrong it could be checked, because the authorities have knowledge of his income from his income-tax returns. He could put his figure at anything within reason; and if the figure he was asked to pay as premium was too high, at any rate he should have the opportunity of saying he would pay it or he would not pay it.
But personally I should go a great deal further than that, because I do not understand why the scheme should stop short at people below a certain income or because they are self-employed; I think that a really satisfactory scheme should extend to the whole community. There were days gone by when some people had a great deal of money or held high positions bringing in large salaries, people who perhaps were important professional people and were fairly sure that in their old age they would be able to meet the position that came along. But, from our point of view in your Lordships' House, I venture to ask: who could be quite certain that either he or his grandchildren in fifty years' time, when they come to the old, will not need some form of pension? I am not casting any aspersion upon anybody, but the fact is that conditions of modern life are now so different that I think it really is the duty of everyone to make quite sure that he has a pension in his old age.
The Government say: "Yes, that is all right, but that is a private matter for the individual. He should take steps in his own way. through an insurance company, to provide a pension for himself." That may he true: to some extent it is a personal question. I venture to say, however, that it is not entirely a personal question but is also a community question. I say that for this reason. Take the case of a person who does not make any provision for his old age—and I know lots of people who do not. When they come to be old, we cannot say to them: "You should have provided for your old age. You can just go to the dogs now." We know perfectly well that that is quite contrary to the modern community idea in this country. When people get old, whether they have made provision for themselves or not, we know perfectly well that the community will make provision for them. It may be that they have been very unfortunate. They may have taken every good step to make provision for themselves but it has proved impossible; or they may have lost the opportunity that they thought they had secured. It may be that circumstances came along which demanded capital from them for some very important reason and that they had spent the money which they had provided for their old age. I do not think that such an answer is good enough. The whole community must make sure that
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those people are paying their share—and anyone who does not pay his share is shirking his liability.
Therefore I would go a great deal further. I would bring everybody—even rentiers—into a scheme of this kind. It may be said that that is flying too high at the present moment. It may be said that that will be a thing for the future but that it is not suitable in this particular proposal. If that be so, then I say that although that may be right, I feel convinced that before many years have passed we shall have a scheme which will include everyone. I should like to remind your Lordships that, whereas an individual can put money into a money-box or into an insurance company and can save in his own way, the community as a whole cannot pay for the pensions at any particular time except out of the income which it is at that time receiving. It is like a war. Some people think that you can pay for a war in advance or that you can pay for it in arrear. You cannot do anything of the kind. It is the work and service of the people at the time the war is being conducted which must pay for the war.
It is precisely the same in the case of the old. One absolute essential is that the active members of the community must pay for the pensions that are being paid to the old; and all that we can do is to make sure that the active members to-day pay for the old of to-day. By virtue of that they have, as I have said before, a kind of contract with posterity, that, if they bear the burden in their active days, then the young people of the future will bear the burden of supporting them when their time comes. Of course, that does not mean that in the purely monetary sense the contributions will go into some fund on paper and will be used by the Government, first of all for paying the pensioners of to-day, and then if there is anything over, for investment. The community has no money-box into which it can pay contributions and to which it can go in order to find the pensions for the old.
I come now to the point of contracting out. Your Lordships may remember that in the course of the remarks I made when we were dealing with this question of contracting out on October 30 I said that although it might be necessary to provide for contracting out at the present

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time, in the first place I was not altogether satisfied that the choice should rest with the employer. In the second place I thought—and this is something which is much more important—that as time went on the part played by contracting out would gradually fade away, just as the friendly societies had done with the introduction of the earlier schemes of insurance. Having made that remark, I was very much interested to find that, in the middle of last month, a gentleman named Mr. Jackson, who is the pensions officer of Unilever Limited and who has great experience both in this country and in other countries of the world where their business runs, made a statement on this matter, part of which was reported in The Times (I think it was The Times of November 15) in which, to a very large extent, he supported the view that I had taken. He did not, of course, support me, because he probably did not know that I had spoken about it, but from his own point of view he took almost precisely the same line as that which I had taken and which I take to-day.
He said that there were certain advantages in the possibility of contracting out but that he thought that there were far more serious disadvantages in contracting out than had been envisaged by anyone up to that time. I will briefly state the three principal disadvantages which he saw. In the first place, he recognised that an employer, in deciding whether or not to contract out, would naturally consult his workpeople; but he foresaw that it would be to the interests of certain of the workpeople not to contract out and of others to contract out, largely depending on the amount of their wages. He thought that any good employer would have to explain to his workpeople what were the advantages and disadvantages—the pros and cons—of contracting out, and that there would therefore be a conflict of interest between one part of his staff and the other part. He thought that whichever course the employer took it would in the end be contrary not only to the wishes but to the interests of one half of his employees who were adversely affected by his decision, and that he would have no desire to be placed in that very uncomfortable position of to some extent injuring part of his workers, even though he would be benefiting others.
That is a very strong reason, but I think the other reasons are even stronger. He pointed out that when the employer contracts out it covers the whole of his staff and his workers. At that time the whole of his staff is contracted out; but after a while Mr. Brown, Mr. Jones and Mr. Smith decide to leave the firm and work for another employer, an employer who has not contracted out. At the same time, the first firm is taking on new workers who, for a certain number of years, have been with employers who have not contracted out. I think that the noble and learned Viscount the Lord Chancellor, who saw great difficulties of administration in regard to individual men, is bound to agree with me that many of those difficulties which he saw in giving the option to the workers will arise in a different form owing to the migration out of a firm which has contracted out and into firms which have not contracted out; and in these large firms, with hundreds of thousands of workers, it will be going on all the time. According to Mr. Jackson—and it seems to me that it is a very sound point—that is going to make for great difficulties, and I venture to think that it is a very important matter.
However, there is a third matter which I think is, in some ways, even more important than either of the other two. We have had the experience over the last fifteen years, since the scheme was in operation (and still longer if one goes back to the earlier schemes) of all sorts of changes being made. They have been brought about by the rise in the cost of living and in wages and by all sorts of things. It seems to me exceedingly likely that this scheme, even if it is a great deal better than it appears to be at the present time, is not likely to survive unchanged for countless years into the future. It is much more likely that within ten years, and certainly within twenty, it will be altered; it will be improved, and in all probability larger pensions will be paid in future days than are paid when the scheme is first inaugurated.
What is going to be the position? Noble Lords should just think this out. An employer may say that his scheme is every bit as good as the Government's scheme and that he is going to contract out. Then at the end of five years he may find that the Government scheme has been improved. What is the employer

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going to do then? He has two alternatives. He may say to his workers that he has contracted out up until then but that his scheme is not so good as the improved. Government scheme and that he will guarantee to improve it so that it keeps pace with the Government scheme. That is all very well, if he can afford it and the company and shareholders like it, because it may involve a considerable sum of money. On the other hand, he may say that he is not going to do all this and that contracting out is going to stop. And if he does that he will have to find some money in order that his workpeople may come into the Government scheme in the same way as the people who have been in it all the time. Mr. Jackson points out, with a great deal of force, that that argument is a very difficult one; and the conclusion he reaches, which I shall read to your Lordships, is this:
" My last word on this matter is that whilst being superficially attractive at first sight, an exhaustive examination of the proposals shows that any form of contracting out is likely to be both unreasonable and unworkable. It should he withdrawn from the proposals."
I pass from that to my last point—the question of whether the future payment should be rigidly expressed in terms of pounds. shillings and pence, or whether it should be variable on the basis of some index. The Government believe in fixing a "pounds, shillings and pence" basis, firm, consistent and lasting. Of course, the Government must do that, because in their scheme they want an actuarial basis for the proposal. If they are going to base it on pure, actuarial terms any deviation from that position will obviously upset the scheme. On the other hand, the Labour Party proposes a sliding scale, variable, owing to the fact that there may be changes in the wealth of the country, in earnings, in the standard of living and in the index of the cost of production.
I am not going to say now—it is much too detailed a question—how far either of these proposals is satisfactory. What I am going to point out is that Mr. Jackson has something to say on that question, too. He said it with some reserve, and some provisos; but he does say that in certain circumstances, if there is a State scheme, he sees no objection to the amount of pension being fixed on what he calls "an earnings index." In
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his opinion, that is perfectly workable and would achieve its purpose. If we recognise that, in the last resort, the pension is paid out of the active work of those members of the community who are in work during part of their working lives, the fact that there is so much more money about will enable them to pay these pensions in precisely the same way as they would if the cost of living and standard of life had remained entirely stationary.
I may say here that when I was not here one day the noble Earl, Lord Selkirk, twitted me with having looked forward to inflation. I do not think that this is a question of inflation. There is no question of the kind of thing we have had during the last fifteen years, which is admitted on all sides to have been inflation. I cannot think that the noble Earl himself would he willing to prophesy that for the next fifteen years the prices of articles and the indices of consumption and earnings are likely to remain entirely identical with what they are at the present time. I do not think that any Member of your Lordships' House would be so foolish as to make any such promise. Assuming that there will be a change, I think it is desirable that we should have some idea of how it is going to be met, and this proposal which emanates from a man of the practical knowledge of Mr. Jackson is certainly worthy of consideration by the Government. I do not say that it is workable or sound: I say merely that it is put forward by a very reliable man, and that I think it deserves the highest consideration of all concerned.
I hope that I have not taken up too long but I am coming to the end of my remarks. I think that this scheme has merits and that the Labour Party scheme has merits. The Government scheme has defects and I have endeavoured to show what, in my opinion, are some of those defects, and to show how, on some issues, I would go further in my mind than either scheme and look forward to an almost entirely different view with regard to pensions. I may have looked too far. As politicians we are dealing with the actual proposals, but we must nevertheless, I think, examine what has been said by Mr. Jackson. I believe that it has pointers which those introducing the present scheme should bear in mind.
I am certainly satisfied with one thing —and I believe that most of your Lordships will agree with me: that this scheme, any scheme, however well composed, is not the end of the road. I am sure that in the course of the years there will be modifications and amendments, and that these will continue for a long time. Therefore I should like my final words to your Lordships to be this. Do not imagine that in this matter there is any finality. We shall not reach finality; we must be prepared for continued alteration of the scheme. All I hope is that on every occasion we amend the scheme we may get a better scheme, because in this country of ours, as we live on from generation to generation, and our civilisation goes marching forward to a fairer conception of life, we must be prepared to hold our heads high, to hold up our flag and press forward year by year to the goal. I beg to move for Papers.
3.41 p.m.
LORD BEVERIDGE: My Lords. I must begin, as I think you will all want me to begin, by expressing my gratitude, and the gratitude of all of us, to the noble Lord. Lord Pethick-Lawrence, for bringing before the House this question of provision for old age. It is, I suggest, beyond question the most important, and in some ways the most difficult, of all social problems facing Britain at the present time and in the near future. To show what I mean by that, it is sufficient to mention three essential figures. When National Insurance began in 1911, roughly one in fifteen, or 2 to 3 million, of all the people in this country were of what I will call old age. I speak as one nearing eighty, and when I speak of "old age," I mean sixty-five or over, in the case of a man, and sixty or more, in the case of a woman. To-day there are 5 million old people in that definition, representing one in seven of our whole population. In 1980, about twenty years from now, there will be 9½ million, or one in five of our whole population, in that definition. That is the problem which faces us, of making provision for those people in their old age.
There are, broadly, three quite different plans for dealing with that problem. There is the plan which is at present in force, of the social insurance Report of 1942, for which I was personally respon
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sible, as applied, with one most important difference, by the Labour Government of 1946. By that plan the State, by social insurance, guarantees an equal subsistence income to the old, as to all others whose earnings have failed, as of right, without any means lest, treating all alike and not doing more for the rich than for the poor. The State was to guarantee the individual against want and to leave him free and responsible for managing his own life above the subsistence level; for deciding whether he would spend more when young, or save more for old age. That Report of 1942, as carried out in 1946, was a great development of the State's responsibility for welfare, but it did not make the State alone responsible for all welfare: it was for welfare by responsible co-operation between the State and the free individual.
The way in which that plan has been carried out is subject to-day to two criticisms, one of them relatively unimportant, but the other much more serious. One criticism is this. If any of your Lordships has read those interesting and important articles that appeared yesterday and to-day in The Times on these social insurance and allied problems, you may have noticed that the first article said that the plan of 1942 overestimated the speed of Britain's recovery from war and, therefore, was responsible, to some extent, for landing us in the financial morass in which we are. I can only say that the plan of 1942 did nothing of the sort.
It so happened that when I was engaged in preparing that plan, their Lordships of the Treasury expressed great interest in its possible effect upon the finances of the country after the war; and I made a deal with the man who was then the leading spirit in the Treasury, John Maynard Keynes, that I would keep down the expenses for a certain time if he would support the scheme otherwise. The method of keeping down the expenses was to adopt for Britain in regard to pensions the same kind of plan that had been adopted by New Zealand of not giving pensions as of right at once to everybody already of pensionable age, even though they had not made any contribution at all. I said that pensions should rise, over a period of twenty years (New Zealand had said twenty-eight years), to full subsistence, and that in the

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meantime there would have to be a certain amount of assistance under a means test. The Government in 1946, rejected that deal between the author of the Report and the Treasury, and gave full pensions at once; and that is one of the reasons why the scheme has been in financial difficulties.
But a much more serious criticism of the plan of 1942 is that it has failed to accomplish its main object of ultimately abolishing the need for assistance and public charity subject to a means test. That aim is expressly and repeatedly put in the Report. It has failed to do that, not because of any fault in the plan itself, but because the State have failed in the very difficult duty of stopping inflation and keeping prices stable. Even with pensions as we have them to-day, one in four of all persons of pensionable age finds the pension not enough to live on and has to ask for assistance, which he gets on proof of poverty. That is due to inflation. Those are the two criticisms of the way the 1942 plan has been carried out: that it has not put an end to public charity, subject to a means test, and that it has not solved the problem of the financial burden on the State.
How can we guarantee the old against want and need of public charity? How can we meet the growing burden of this increasing number of old people without taxing everybody else out of existence? There are before us two other schemes: the Government scheme in the White Paper, which is the main subject of our debate to-day, and the Labour Party scheme, which was published, I think, at the end of 1957. Both of those schemes depart from the principle of both the Report of 1942 and the Act of 1946—that of treating all men equally in social insurance, irrespective of their rates of wages or other earnings. I am not going to describe either of those schemes in detail (my time is limited, and I must confine myself to certain points; I hope that many noble Lords will want to join in this important discussion), but I will begin what I have to say with a few criticisms of the Government scheme. I say at once in regard to the Government scheme, prepared, if I may say so, with much care and after much technical argument, that I may occasionally have misunderstood exactly what they were after; and if so, I
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apologise for any wrong criticism that I may make.
My first criticism is that the Government scheme fails to secure the essential priority of guaranteeing a subsistence pension as of right for all. No existing pensioner gets anything more than the £2 10s. a week for himself and £1 10s. a week added for his wife; nobody earning £9 a week, or less, in future will get more than that same sum—and that is the pension that has to be supplemented by public assistance to-day in one case out of four. I do beg the Government, whatever else they do about pensions, to recognise that first priority, that was promised to the people of this country years ago, of having pensions as of right, having enough to live on, and not subject to a means test, so that, if people do save for themselves as well, they will have the benefit of their savings.
That is my first criticism of the Government scheme. That is on the basis of present prices. I must go on to say that that is a scheme which, so far as I can see, contains not even a mention of the problem of inflation—and I am bound to come back to that in a moment—and no provision against it. I must add that it fails to tackle the difficult problem of transferability in occupational schemes. That, your Lordships may remember, was the subject of a long debate in this House initiated by myself last January, in which I and many others urged—the Phillips Committee also urged, although they did not see their way to give effect to their desire—that to make people lose pensions if they changed their occupation was an obstacle to the free movement of labour and, therefore, to the best use of labour. I will say at once that transferability is a very difficult question. Because the Government rightly attach such importance to occupational schemes they ought to give further consideration to that problem.
Finally, if I am not mistaken—and I think I am not—the Government, in proposing graded contributions and pensions, require people above certain earnings to pay larger contributions for pensions. That does not mean that anyone who pays that larger contribution will get the whole benefit of his extra contribution. Some of the money that will come from taxing

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people of incomes over a certain level will be used to maintain the finances of the scheme as a whole. That is clearly so, and I think that if one went to an ordinary life society one would often find that they were prepared, on the terms that are proposed for these higher earnings, to give equal benefits more cheaply. Those are my criticisms of the scheme.
I must add that I do not myself accept at all the argument set out in paragraphs 23 and 26 of the White Paper against the flat rate system of treating all citizens equally according to their essential needs. I would rather treat all citizens equally, and if anybody wants to have more in old age because he has had more in youth, it is easy for him to arrange to get that, or not to get it if he would rather "blue" it in youth or give it to his children. I believe in freedom and responsibility, and not in the State organising everybody's life for him from the beginning on. If I am right in the suggestion that this grading in the Government's scheme of higher contributions for people above certain incomes is also a financial device for getting more money to support the scheme, then it begins to look as if one aspect of the scheme (which I admire for the trouble with which it has been prepared) was the purpose of keeping the Exchequer contributions down to a steady £170 million. In other words, it is a financial scheme even more than a pension scheme. That is a point I ask the Government to consider carefully.
Let me turn from that to say that I have made a few criticisms of the Government scheme but, to my regret, I dislike the Labour Party's scheme, if possible, even more. I am not going into that in detail because it is not formally before the House, but it is only fair to say why. My first reason is that it throws a tremendous burden of contributions upon the earners in relation to their earnings—5s. 4—d. for everybody, plus 3 per cent. of his earnings. That is not all he is going to pay. He is going to pay a share of taxation, and he is going to pay in higher prices. If you put up the cost to the employer, the employer will put up his prices. That heavy burden —some people have described it as insupportable, and although I am not going into details I think it probably would prove insupportable—it would certainly I
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not be accepted by most of the workers in this country without their demanding higher money earnings as compensation. In other words, it looks to me a direct incentive to more inflation. That would be stimulated by the fact that the Labour Party's scheme includes the proposal that if inflation occurs, then the pensions will go up. That is as good as saying. "Do not mind inflation; you will be all right." That is a further incentive to inflation.
I should like to give your Lordships two or three simple figures to show what inflation means to pensions and how it happens. For that I refer to some exceedingly interesting figures given on November 20 in another place by the Chancellor of the Exchequer showing how two things have moved from 1946 to 1957. One was the average earnings per man, and the other the average industrial output per man. The Chancellor of the Exchequer, for some reason of his own, gave those figures only from year to year. I wanted to sum it up, and I did, by a simple calculation, sum up what that has meant between 1946 and 1957. Let me add that the calculation which I made with my own hand has been checked and found correct by a machine—we always trust a machine.
These are the figures. Earnings per man, from being 100 in 1946 are in 1957, eleven years after, 210. They have rather more than doubled. Output per man in those same years has risen from 100 to 129. That has gone up by slightly more than a quarter. What that means is that of this doubling and more of earnings, one-quarter has been earned by extra output. Where has the other three-quarters of those extra earnings come from? They have come out of the pockets of someone else. Let me say that I am sure they have not come out of the pockets or the profits of the employer. The employer puts prices up. They come out of the pockets of people like myself living on savings, or people like the Civil Service pensioners living on fixed pensions. They have come either from taxation or from the effects of inflation. They have come from defenceless people. Three-quarters of the money profit made by workers in the last eleven years has come from the pockets of defenceless people, not as a result of work done.
Let me just cite for one moment the case of a body for whom I have pleaded

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in the past because I belonged to them. That is the First Division Civil Service pensioners. Any number of them are living on pensions which were fixed when the salary of a head of a Department was £1,500 or £2,000; it is now £6,000. The pension is related to the £1,500 or £2,000. Of course, it is worth in money terms perhaps one-fifth or one-third or one-quarter of what it was when they got it. The Government have been approached, and hope they will be again. They have done a little but nothing like enough. I cite that as one example.
I suggest that, difficult as it is, the stabilising of money is the duty of the Government; it is secondary only to the duty of securing peace (if they can) abroad, and order at home; it is the next most important thing, because money is the instrument by which each of us manages his own life. If you want to have the freedom and responsibility of the individual in managing his own life, in deciding when to spend and when to save, you must make money stable; and because the Labour Party scheme goes absolutely contrary to that and disregards it altogether, I beg them, from the bottom of my heart, to reconsider it completely.
Provision for old age (I return to my beginning) is the greatest social problem of our nation for a generation and more ahead. It is a double problem; it is that of providing for the old and that of not ruining everybody else either by taxation or by inflation. Here I am equally unhappy, or almost equally unhappy, both about the Government scheme because it does not really give subsistence, and the Labour Party scheme because it is an incitement to inflation. Neither really solves certain other minor problems, but I will not dwell upon those. My final hesitation about them is that each is the product of a Party which, quite rightly and necessarily, is considering a coming General Election. Is not the problem of old age, the greatest of our social problems, a thing so important that it ought to be taken out of politics altogether and treated as something national? I believe that an all-Party round-table conference might find a way to guarantee the welfare of old people without crushing all those of working and taxable age and without ruining us all by inflation; but no Party can agree that if it is always looking
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over its shoulder to ask what this or that group of voters might think about it.
4.5 p.m.
LORD FERRIER: My Lords, one of the first tasks I set myself, when I had taken my seat amongst your Lordships, was to study the debates which had taken place on the Life Peerages Bill. I did so because when the debates took place I had not the faintest idea that I should find myself in the situation in which I find myself this afternoon. I studied the debates, and now I rather wish that I had not done so, not because they impressed upon me more than ever the importance of the responsibilities which fall to people in my situation, but because they seemed to add to the anxieties which, as your Lordships will know, go with the makng of a speech such as this. I would say that it had another effect, which was that this question of anxieties over a maiden speech is in some measure a two-way traffic and in so far as to that extent some anxieties are yours, my Lords, you have my sympathy. I am also emboldened in the course I am taking by the fact that it was a course which my noble friend Lady Elliot of Harwood did not fear to tread.
I find it difficult to lead up to my notes after hearing the speeches which we have just heard from the noble Lords opposite. In one case it is difficult to comment without being controversial; in the other, I feel that much of what was said flows into what I am about to say. But the way my mind is working is this. As I see it, this question of pensions for the aged—and goodness knows ! I agree most fully, as we all do, I think, that pensions for the aged are one of the biggest problems of the moment—depends essentially upon the ability to pay these pensions. Provision cannot be made for the aged except from a sound national economy. It is in that light that I feel it fair to say that the proposals of the White Paper which are now under consideration seem to indicate a sound basis.
At the same time, I cannot help feeling strongly that the problem raised by the noble Lord, Lord Beveridge, has a momentous bearing on the matter; namely, how much easier would be the task of the designer of a pension scheme if he were not looking over his shoulder, and how comparatively easy it would be to satisfy the people

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as a whole that any scheme adopted is a sound one if its soundness was accepted right through industry from top to bottom—and not only in industry, but in the professions and everywhere else; not only on the shop floor but in the board room: in the field and in the market: in the fo'c'sle, as on the bridge.
With those general comments, I should like to move on to three minor points which strike me as being worth mentioning in connection with the White Paper. First of all, I was interested, at a meeting in Edinburgh only last week, to find that there were very real doubts in the minds of a number of men and a number of women about the fairness of the provisions for women in the White Paper. I am not suggesting that the proposals as outlined are unfair; indeed it seems that there are very good and sound reasons for the suggested contributions and benefits. I do know, however, that not everyone is satisfied, and, though this is a healthy sign, my suggestion is that the remedy is to enlarge, if possible, upon the details given showing the considerations that have led up to the proposals made in the White Paper. I will not go further in connection with the figures lest I became over-technical—and I am no expert; or, further, I might become controversial.
My next point concerns contracting out, but contracting out in the reverse direction. Would it be possible to embody in any legislation which takes shape a provision that a man or a woman, while retaining United Kingdom citizenship and domicile, but working overseas for a number of years, could return to this country and enter or re-enter the scheme by a down payment of adequate and proper proportion and could re-enter employment in this country on a level with the person who has not gone abroad? As so many of us know, taxation abroad is very onerous. I think it is fair to say that the days are past when a job overseas meant the prospect of wealth, and, perhaps, early retirement to ease at an age a good deal of advance of the expectation of life to-day. Those days are over. Indeed, it is difficult enough to get men to go overseas and adventure in the way that they did twenty, thirty, or forty years ago. Is it possible to consider providing that a man—let us say, a free lance technician, or a self-employed person—who proposes, on returning to this country, to
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become an employed person should be able to establish himself again in this country in no worse position than the man at the next machine who had not adventured abroad.
The other point that I feel worth mentioning is a very oblique one. The words National Assistance are not mentioned in the White Paper, but noble Lords who have spoken before me have mentioned National Assistance, and I think it can be generally accepted that National Assistance forms an integral part of the whole set-up of the pension arrangements of the country to-day. As we all know there are people at both ends of the social scale (if I may use that phrase), and in the middle, who are too proud or too stubborn, or both, to seek National Assistance, let alone accept it. It occurs to me that something could be done in this respect. Successful attempts are being made to break down this resistance, certainly in my neighbourhood, in Scotland, where I know that people would rather starve than apply for National Assistance they call it "going on the parish." That is surely an out-of-date idea; yet the fact remains that it exists. I think I am right in saying that figures go to show that the number of such people is declining; but that does not mean (that the number is not still very great. Something might be done to ensure that more use is made by such people of National Assistance and of the discretionary allowances which are available under that scheme.
I am a trustee of a benevolent fund in Edinburgh. We come across the same sort of thing. We have the utmost difficulty, on account of their pride, in getting information out of needy people. If I may put forward one small suggestion, it is that every encouragement should be given to National Assistance boards to extend the house visitation method of getting in touch with these people. Only today I was talking with a lady who is concerned with benevolent work. She says that she has found that house visitation is the only real way of getting to the bottom of some people's troubles. One of her visitors had got in touch with an elderly, middle-class lady who had no coal in the house at all. That fact would never have been found out had there not been this visit.
It has been suggested that the name "National Assistance" could be changed

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to something like "uncovenanted allocation". I imagine that that would be impossible. Nevertheless, I do put forward for serious consideration the idea of linking up the development of a pension scheme such as this with an assurance that the fullest possible assistance will be given to the people who can properly claim National Assistance. After all, a pension scheme such as we have before us at the moment is one from which all who have contributed are entitled to draw their pension. Surely that fact is one which should weigh in dealing with those people who are not making use of National Assistance. Many of those who are drawing pensions are well above the subsistence level. My Lords, I feel that my contribution has been of light calibre compared to those which came from the other side of the House, and I have done. I trust that I have not wearied your Lordships. More than that, I trust that I have said nothing which might give offence. Speaking for myself, I like to think that there is none more jealous than I that the dignity and the traditions of your Lordships' ancient House should be upheld.
4.18 p.m.
LORD STONHAM: My Lords, I count myself extremely fortunate that it falls to me to congratulate the noble Lord. Lord Ferrier, on the speech to which we have just listened. I hope that he will not mind that the first congratulations he receives come from one who only so recently as two weeks ago himself made a maiden essay. It gives me this advantage, that I am in a nearer position to detect the signs in maiden speakers. I can assure the noble Lord that he showed none of the signs of nervousness of which I am quite sure I was myself guilty. It was a speech by no means of a light character, but one which indicated the close and serious study of the subject, and which brought forth a number of points which I had not thought of, and which I am quite sure are well worthy of consideration. I feel certain that your Lordships will look forward eagerly, as I do, to the further contributions which will come from the noble Lord. He had one advantage over me, in that he read the debate on the Life Peerages Bill before he had any idea that he himself would receive a visitation. I read the debate only after I had received the
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visitation, but it is probable that we found it equally unenlightening in reaching the same conclusion.
I, too, am in a position of some difficulty to-day in that, in following first my noble friend Lord Pethick-Lawrence and the noble Lord, Lord Beveridge, I am following two noble Lords who between them have an absolutely unequalled experience of social service and effort on behalf of old people and the subject we are discussing to-day. Between them, they have covered not only the White Paper but parts of the Labour Party scheme and, indeed, certain aspects of the case which I do not recognise as having appeared in either. That means that there is little left of a new character for me or perhaps any noble Lord who follows in the debate to bring up afresh. All we can do is to put our own individual viewpoint on some of the matters that have been already discussed.
I feel that we owe a debt of gratitude to my noble friend for giving us this opportunity to debate this subject which, as he said, was so close to his heart, and I am sure is very close to everyone's heart. The only questions that arise are questions of method and degree—although of course they are extremely important. I thought my noble friend covered the matter extremely well in his four points. I was particularly interested in his idea of the provision for old age as a contribution to a kind of national "money-box." That is an idea to which we might well adhere. I was interested, too, in the views he expressed on the very important point of contracting out, views which I thought were supported in large degree by the noble Lord, Lord Beveridge. But I feel that the point of greatest importance made by my noble friend was the fact that we have not reached finality. Whatever is decided or discussed in this debate, whatever the eventual outcome, by way of legislation, of the White Paper, it is important to realise that we have not, by any means, reached finality.
We all remember during the days of the war when the news was first published of the Beveridge Scheme, and what a thrill it brought to the minds of so many people. It is quite remarkable to-day, fifteen years or so later, to have the privilege once more of listening to the author of that scheme and to realise that, fifteen years later, there is no radical change

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proposed. In those fifteen years there have, of course, been alterations in money, in contributions and in regulations; but no radical change is proposed to-day except the new principle that the rate shall no longer be a flat rate and that extra contributions and superannuation can be added.
I was particularly pleased to hear the noble Lord, Lord Beveridge, say that the plan of Her Majesty's Government fails to do what we all originally hoped would be done by the State pension scheme: that is, to abolish public charity based on the means test. Unquestionably we have moved no further forward at all in that field, and unfortunately the proposals of the White Paper do not suggest ending it. The noble Lord asked: how can we meet the burden without taxing people out of existence? He begged, as I do, for pensions as of right—enough to live on.
The noble Lord, Lord Beveridge, also made criticisms of the Labour Party scheme, the most important of which was that he thought it was inflationary. I am extremely diffident of disagreeing with the noble Lord on this subject, because many years ago I sat at his feet (though a long way off) in a seat of learning in London; and one is always a little anxious when disagreeing with a former headmaster. None of the many causes of inflation could possibly be related to the proposal of the Labour Party unless the increase in the contribution produced a demand for increased wages; and I believe it does a disservice to the workers who would be involved to suggest that this would be the case. That has not happened in the case of the nationalised industries where they have been called upon to make increased contributions to the nationalised industries' additional pensions scheme. I am not arguing that there have not been increased wages paid to workers in nationalised industries, just as they have been paid to workers in other industries, but I am arguing that it is wrong to suppose that other workers would immediately show less balance and less judgment than either workers in nationalised industries or middle-class people who have made contributions to a contributory pension scheme. I cannot see for a moment, therefore, why it should be expected that the proposal of the
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Labour Party should of itself be inflationary.
One would be tempted to ask the noble Lord, if we are going to provide pensions which in his words "would provide enough to live on": at what level? Is not that precisely what the Labour Party is hoping to do? And in what other way can we do that unless somebody pays? We can only pay by means of contributions, wherever they come from, and by means of higher taxes. It is just not good enough to pose the problem without saying what one expects to do about it.
I want to say a few things about the White Paper in its general aspects and where I believe it fails. I suggest that basically the proposals in the White Paper fail completely to make proper provision for the aged because Her Majesty's Government have not even begun to understand what old age is. Like previous Governments, including Labour Governments, they have based their plans on the totally wrong belief that an old man is a different man, whereas we all know, or should know, that, despite physical changes, he is the same man—the same brain made wiser by experience, the same personality strengthened by the additional courage required, perhaps, to bear infirmity, the same eyes looking out upon the world, perhaps a bit more bravely.
I wonder whether your Lordships remember Ernest Hemingway's description of the old fisherman in his famous story the Old Man and the Sea'? Of that old man he said:
" Everything about him was old, except the eyes, and they were cheerful and undefeated."
Hemingway is one of the few people who can see through the ageing mask of flesh to the man within. I once had the experience of being in charge of some 1,700 hospital beds, many for old people, and I would say that that description applies to most old people not overtaken by senility. Their tastes, their qualities, their attributes, their desires and sometimes even their ambitions are unchanged, except that most of them have attained humility without loss of proper pride. And it is because of that fact and because they have attained humility that they accept without complaint the ingratitude of Governments and the impatience and patronage of even the best-intentioned of

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their juniors; because in my view it is base ingratitude to impose on the generation which bred us and suffered for us the burden which is least supportable when one is old—the burden of extreme poverty.
I will not deny, and I have no doubt that the noble Earl will make the point in any case. that a pension of 50s. per week in terms of purchasing power is equal to or perhaps 1s. a week better than the pension of 26s. per week granted by the Labour Government in 1946; but this, as the White Paper admits—and I quote the White Paper:
" was based on a projection of the State of the nation as it was before the war."
It looked back, back to the days of mass unemployment; and, in my view, when we were in a near-bankrupt post-war condition the 26s. was an act of faith and courage. But now, to quote the White Paper again:
"The whole economic climate is altered…. The general standard of living is higher."
But not the living standards of the old age pensioners. They are just where they were in 1946. One million, as my noble friend has mentioned, are on National Assistance, and one million more, according to surveys made in Bethnal Green and Salford, are entitled because of poverty to claim National Assistance but are too proud to do so. In other words, half of the four million pensioners in the country are living at starvation level—and I do not consider those words are an exaggeration, because I have been among them, particularly in the East. End of London.
The White Paper seeks to perpetuate that situation. It lifts the pension to 50s. and says, "If that is not enough, then go for National Assistance." It does not offer a crumb. I would say that it goes further than that (and the noble Lord, Lord Beveridge, made this point) and condemns 7 million wage earners—people like farm workers of whom there are none more worthy, and most women workers—to the same prospect when they eventually retire, because for those earning; below the figure of £9 per week it is said, "There is nothing for you. No hope."
I think it is deplorable that the Government are not looking forward. Mr. R. A. Butler, the Lord Privy Seal, has said again quite recently that he is still
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confident that we can double living standards in twenty-five years. I entirely agree with that. Indeed, in my view we should do it in a much shorter period of years, having regard to the fact that in the first six years after the war we increased production by something like 50 per cent. But surely—and this is the point—if we have this hope, a very good hope, of increasing national wealth to such an extent, it is utterly wrong to perpetuate a system which deprives the workers of to-day, the creators of that hope, of a share in it when they retire. And since the old person is the same person, we surely cannot approve a pension scheme which plunges a man overnight from reasonable living to poverty, because that is exactly what happens. It means changing his home. his life, his habits, his pleasures, and in effect it converts retirement from a pleasant prospect to a terror.
I would submit that in a nation like ours, with an expanding, forward-looking economy there should be three essential elements in a State pension scheme. The first is that pensions must be on a scale which avoids the need for a radical reduction in living standards—that was one of the points made by the noble Lord. Lord Beveridge. Secondly, there must be built into the pension scheme provision to protect the pension against inflation and also to ensure that the pensioner participates in the improvements in national living standards as they come about. In my submission, the pensioners of to-day, being the workers of yesterday, earned those improvements, or at least laid the basis for them, when they provided the capital goods which eventually made the increased production. The third essential is to have contributions so scaled that they ensure a proportionately heavier burden being borne by the well-to-do. I would submit that if those three principles of a sound State pension scheme are accepted, the White Paper proposals fail completely on those three counts.
I would say that the millions of people with wages under £9 a week, who have the least chance of having private savings, are the very ones excluded from superannuation and will be condemned to eventual poverty. 'The White Paper is most anxious—and here I quote:
" not to undermine their personal responsibility to make such provision as they can."

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But what provision can be made out of such wages, particularly when their crumbs of savings have been almost destroyed by inflation? And the £9 to £15-a-week wage group are not much better off. An 18-year-old man—and I should like the noble Earl to deal with this point—entering insurance in 1960, and earning £15 a week from the time he starts until the time he finishes fifty years later, would in the year 2010 get an extra pension of 41s. a week; and for that he and his employer will have to pay more than £1.000 extra. If he is married, his total pension in the year 2010 would he £6 1 s. That must entail a cruel reduction in living standards. Is it possible that we can contemplate a scheme that in fifty years, three generations hence, will give £6 a week as the maximum pension?
Surely we cannot accept the White Paper's contention that this is "reasonable provision for old age" or—and here I quote:
" For the State to go further would seriously undermine the individual's sense of responsibility for his own affairs."
That seems to me to be nonsense, particularly when the State is arbitrarily compelling him to pay more in contributions than would he necessary for similar benefits under private insurance. It is utterly wrong that those earning between £9 and £15 a week—broadly speaking, the industrial workers—should pay the whole cost, as indeed they will, for putting the scheme on what the Government call "a sound financial basis", thus making it possible to limit the taxpayers' contribution to £170 million.
I think it is right to put an upper limit on the amount of pension, but the maximum must be higher than £6 per week and in no case should the pensions accruing to modest earnings be less than half the worker's income at the date of retirement. It is also right to say that the contributions of the well-to-do people should continue beyond the point at which they will get benefit through a maximum pension. If, up to a certain point, they continue to pay contributions without some benefit, they will have, in addition to a comfortable pension, the satisfaction of augmenting the pensions of people with low incomes. I would submit that these things are surely funda
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mental. If they are, then they render the Government scheme indefensible. I believe that it is immoral—I repeat, immoral—partially to excuse the rich and totally to exclude the poor; and I would submit, in the light of the White Paper we are discussing, that no-one in your Lordships' House believes that the pension can be limited to 50s. We do not believe it.
But if that is so, why condemn old people to the kind of thing that has been happening in recent years—to the humiliating twelve months' struggle every year for an extra few shillings? Why cannot we show more confidence in Britain's future? Let each of us, as contributors and taxpayers, pay a little more, just as if we were farmers we should not consume the whole of our harvest but save some and plant trees for our children. But I say that we should ourselves raise existing pensioners above the poverty line and we should give contributors a prospect worth working for.
It may well be that the slogan which we in the Labour Party have used for some years—" Security in old age "—is no longer the ideal to aim at, but bare security had to be our target because of the backlog of bad relationships between employer and employed and even, at times, between Government and citizen. However, it was a negative approach. I think we should be more positive and that we should substitute the word certainty" for the word "security ". It would help to preserve the idea which I think most of us would like to see—the idea of trying for something extra. in the knowledge that if the something extra did not come up, then there would still be the certainty of reasonable comfort in retirement. But the point is that everyone must have that certainty.
My Lords, it is unfortunately true that millions of old people in this country —millions of the generation which saved and made this country—are suffering hardships, particularly during the winter, and they are being given nothing in the White Paper. There are millions more of the generation which bore the brunt of the hungry 'thirties who face the prospect of retirement within the next few years, and they are given nothing to hope for. I submit that we owe it to

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them, to ourselves, and to our country, that this shame should not be put upon them and upon us.
4.43 p.m.
LORD JESSEL: As a Back-Bencher who speaks rarely, I should like to congratulate the noble Lord, Lord Ferrier, on his maiden speech, and I would tell him that. to me, every speech feels like a maiden speech. I am sure the House is grateful to Lord Pethick-Lawrence for initiating this debate on the Government White Paper. Provision for Old Age.. As the Minister of Pensions said in another place, the object of issuing the White Paper in advance of legislation was to elicit views and opinions from all sections of the community.
The noble Lord, Lord PethickLawrence, spoke with his usual clarity, but it seemed to me that his criticisms of the Government White Paper and his approval of the policy of his own Party were a little lukewarm. I think the reason for that is that fundamentally the Labour Party plan is in its very nature inflationary, as the noble Lord, Lord Beveridge, so eloquently pointed out. We talk glibly about employers' contributions, employees' contributions, and Exchequer contributions. But in the end it is the consumer who usually pays, for it is quite obvious that the manufacturer will try to get his contributions back by putting something on the price of the articles which he sells, and, equally, that the employee will try to get his contributions back by asking for higher wages. The Exchequer contribution, of course, comes out of general taxation. That is why I am glad that the Government scheme provides for a contribution of £170 million a year which is going to be used to keep down the size of the contributions of the lower-paid workers —men earning up to £11 a week and women earning up to £10 a week. They are the people who need whatever help can be given from general taxation. In fact, under the proposed Government scheme, most of these people will pay less than they are paying now.
I also like the conception of the graduated scheme under which pensions will be paid in relation to higher contributions from increased earnings, and this is to apply to people who go into the scheme late in life. I have in my time been associated with the introduction of several occupational schemes, and it has always
1102
been a headache to try to include the older people: what we used to call, if I remember aright, "paying for back pensions"—and very expensive it was! Under this new scheme newcomers get the standard pension straightaway and also additional benefits according to their graduated contributions. There is one point in connection with the graduated contributions which I think should be noted. They are based, as I see it, on actual earnings, and therefore each week the amount of the employer's stamp and the amount of the employee's stamp may change, at least for a large proportion of the workers. At the end of the year, the cards will show many varieties of stamps, and the extra clerical work will be tremendous. I doubt whether this fact is fully appreciated.
I feel sure that most people will agree that the part of the Government scheme which is going to cause the greatest difficulty is that which deals with the relationship between the State scheme and occupational schemes. Some firms will want to contract out, as they are entitled to do under certain conditions, but some will certainly have to modify their schemes if they wish to do this. It could happen that there would be a division of opinion among the employees of a firm operating an occupational scheme, and that the employer would be in some difficulty in knowing what to decide. Then there is the problem of the employee changing his job, going say, from a contracted-out occupational scheme to a State scheme. I agree that the White Paper tries to deal with every foreseeable eventuality, but I am sure that a great deal more consultation with industry is essential before legislation is introduced. Broadly speaking, however, I support the Government's proposals. They seem to me to be realistic, and I believe they can be made to work.
The Labour Party scheme claims to guarantee its pensions against inflation. wonder whether the electors will buy "that one—or the very stiff compulsory contributions demanded from all those earning more than a modest income. My Lords, it is possible that the Labour Party will try to persuade the voters that existing rates of pension will be raised immediately if they are returned to power. Their record on pensions, however, is not very good. As the noble Lord, Lord Stonham, mentioned, the real purchasing

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power of the pension in October, 1951, even after the rise given just before the General Election, was still lower than the 1946 rate. By contrast, existing pension rates to-day—50s. for a single man and 80s. for a married couple—give substantially better value for money than at any previous time. I will not worry your Lordships with details of the figures, which were given by the Minister of Health during the debate in another place. But surely it is the value for money that matters—and those who will be paying more under the graduated scheme will want to be sure that this is what they are getting. Under the graduated scheme, a man earning £15 a week or more, entering at eighteen (and Lord Stonham has given this figure) will get a pension of 91s. on retirement. That is perfectly true. But it is to be supposed that during the man's working life he will increase the amount of his earnings, and he can make his own arrangements at any time for a larger pension. But he may not want to do so; and as the noble Lord, Lord Beveridge, has pointed out, he has the right to do what he likes with his own money.
I agree that we must look after the aged, but do we want to pile up unnecessary contributions from those who are working? I think that it would be better to increase the rates of National Assistance, if they are insufficient. At least then we shall be sure that the money is going where it is most needed. In his famous dictionary, Dr. Johnson's definition of a pension was:
"An allowance made to anyone without an equivalent. In England it is generally understood to mean pay given to a State hireling for treason to his country."
However, my Lords, that definition did not prevent the doctor from accepting a pension later when he got the opportunity. As the noble Lord, Lord Ferrier, has pointed out, there should be no stigma attached to the acceptance of National Assistance by those who need it; and, like him, when I have come across this attitude I have tried to persuade those concerned to apply for National Assistance, as is their right. When we come to consider pensions automatically paid, I think it is a different story. The White Paper shows what is going to happen to the Fund during the next ten years. From now onwards it will get more and more
1104
into the red. The Government scheme aims to put the Fund on a permanently sound footing and at the same time to give employed persons some measure of pension related to their earnings. I suppose that these objectives may not sound exciting or new, but in fact they are completely new and revolutionary and they have my support.
4.52 p.m.
LORD GEDDES OF EPSOM: My Lords, this is the first occasion on which I have addressed your Lordships' House, and I ask for your indulgence. It is very difficult to make a speech of this kind after so many learned speeches have been made, particularly when one is bound by the wise tradition of your Lordships' House regarding maiden speeches. I am bound to say that, as one who has been surrounded by controversy for the last forty years, I am going to find it extremely difficult to keep within that tradition; but I assure your Lordships that I shall certainly not intentionally break with it.
Necessarily, I must confine myself to the general aspects of the White Paper. I want particularly to draw your Lordships' attention to what I believe to be an attitude of mind growing un within a large section of the community—and this would appear to be borne out in the White Paper: the attitude to provision for old age which, as it were, says "Well, there are old people amongst us. It is a pity. I suppose we must do something about it." It seems to me, with great respect. that one can quote from the White Paper in support of this view. May I draw your Lordships' attention to the first paragraph of Part I? I agree that I quote out of context, but it uses the words "within the resources available." But why "within the resources available"? Is it not of paramount importance that the State should make the resources available? Then the White Paper goes on to say, "if opportunity permits." But why "if opportunity permits"? Why not, "if the necessity arises "?
Furthermore, when we come to paragraph 12, we find reference, to which the noble Lord, Lord Beveridge, drew attention, to the greater number of people who will reach old age by 1979. Is this a matter to be regretted? Are we looking back on 1911, as it were, with a certain nostalgia, which does not make it necessary for us to face up to the benefits

1105
that medical science and the advance in all social life have brought us, making it possible for people to live to a greater age? Should not we accept that as a challenge, rather than look upon it as a burden which must be borne? It is my submission that unless we approach this matter with the right attitude, we are very unlikely to reach the right conclusion.
There is a reference in paragraph 26 which I find extremely difficult to comprehend, but which nevertheless seems to have the same implication. It says:
" To leave the scheme dependent on rapidly growing subsidies from general taxation would amount to drawing a blank cheque on the future."
But does the future owe nothing to the past? Do the present and the future owe nothing, to the past? Surely it is clear that we cannot commit the future to unlimited and unknown liabilities. Is not the obligation imposed upon us at least to meet reasonable liabilities and not to throw on posterity the need to meet future liabilities in respect of the past?
My noble friend Lord Stonham has already referred to the aged of to-day. The aged, the weak, the dependent of to-day—these were the strong and virile, the independent of yesterday. They were the men and women who at the turn of the century were still making the name of this nation greater throughout the world, making it one of the greatest nations, if not: the greatest, in the world. They were the parents of the present generation. From 1914 to 1918, they were the men who fought to keep this nation great, who made the sacrifices, who slogged across the mud of Flanders and lived in the trenches. They were the men and women who, from 1939 to 1945, after working round the clock in many cases, donned the blue tunic of the Civil Defence and went out and damned Hitler to do his worst. Do we owe nothing to this generation but a mathematical calculation of how much we can pay? Ought we not to look at this matter from the point of view of what we owe? It is not a matter of how much we can spare from the petty cash that is left after all our wants have been satisfied. Is it not desirable and necessary that we should look on this not as an arithmetical provision for old age but rather as a study of the humanities?
My Lords. I apologise if I have outraged the sense of your Lordships' House by my feeling in this matter. Let me
1106
tell your Lordships of an experience, because I think it amply illustrates the point I am trying to get across. Some five months ago I was an in-patient in one of the big London hospitals. In the same ward was an old man in his seventies, who was still working and had suffered an industrial injury. The one thing this old chap feared, above all others, was the time when he would have to leave hospital. And why? Because in hospital he got meat at least once a day; he got warmth; service willingly given, and comradeship which he could not get elsewhere. Some three monthes later I had a telephone call asking whether I could do something for "Bert". because he had had to go into hosiptal again and on his discharge would be unable to go back to the relatives with whom he had stayed. I was asked what I could do. What can anyone do in this year of Grace, 1958, for an unwanted old man. with 50s. a week income? My Lords, I am almost moved to ask whether anyone in this House knows of a decent "doss-house "—because that is the only place to which this old chap could hope to go; and that without comfort and without hope.
My plea, therefore, is this: that when the Government finally consider their full provisions for old age, they will, as I say, not look upon it as an arithmetical calculation but rather as one of paying a debt to those who have given so much to us. I agree that not everyone who is old is poor; and there are many in honourable positions. But is it not time that old age was in itself a badge of honour, and did not, as it does for so many to-day, carry the stigma of reproach?
5.1 p.m.
LORD HAWKE: My Lords, it is both an honour and a pleasure to follow so distinguished a figure as a past President of the General Council of the Trades Union Congress. It is men of that calibre that I, for one, hope to find created Life Peers and speaking in this House to give us the benefit of their long and wise experience in industry. Particularly, perhaps, does this apply to the noble Lord, Lord Geddes of Epsom, who for so much of his career has seen that our Posts arrived in time and the postmen never went on strike. I had great pleasure in listening to what the noble Lord said, and I feel sure that your Lordships' House will always listen to anybody who

1107
expounds practical humanity with such deep sincerity as he obviously does. I hope that we shall hear him again often.
" Honour thy father and thy mother …"
is one of the Commandments of God. Once that was done by sons and daughters in looking after their parents. To-day it has fallen, by stages, to the lot of the State, and the State, having that duty, has the natural obligation to see that people make the maximum possible provision for themselves during their working lifetime, though, of course, as has been said to-day, there are many old people now whose opportunities for doing that have been poor. But, at any rate, we have a contributory national insurance scheme. The trouble is that it never was an insurance scheme, from the very fact, as the noble Lord, Lord Beveridge, pointed out, that people were let in to benefit long before they had paid sufficient contributions: and, in fact, it is a scheme for extracting sufficient from the working age to look after the retirement age.
it fails for two reasons. First of all, the contributions are not enough to prevent the Government's subvention from becoming intolerable in the future; and secondly, the flat-rate contributions from the lower income group in the country are already very burdensome and, if increased, would become quite intolerable. I must say that I admire the ingenuity of the new scheme: it lessens the burden on the lower paid people without decreasing their benefits, and it provides a method by which the higher paid people can supplement their pensions on a strictly actuarial basis. It carries one very curious by-product of which your Lordships may not have thought: namely, that the greater the degree of inflation in the economy, the nearer this scheme becomes to actuarial propriety.
One is entitled to ask questions about the scheme. First of all, is the pension as at present, and that visualised in the future, sufficient to keep the bulk of the aged off National Assistance? One must admit straight away that it is a most meagre living; but at the same time the vast majority of the retirement pensioners are not dependent merely on their retirement pension. Undoubtedly a case could be made out for an increase of the basic
1108
pension. There are 5¼ million drawing national retirement pensions at the moment, and approximately 1 million of those have recourse to the National Assistance Board. There are obviously others who are too diffident to do so, and if we call that another 250,000, that is out of 5¼ million in total 1¼ million find the pension too low to live on. These people have no contribution grounds to draw their existing pension. let alone any increase, and therefore morally there is no difference whatsoever between the amount they would draw as increased pension and what they are drawing as National Assistance; it is precisely the same pocket or, if I may so call it, precisely the same spring of charity. It is, I think, arguable that to increase the pensions of .5¼ million people in order to reach 1¼ million is rather silly finance.
Suppose that £1 a week were the necessary amount—and I would not put it lower than that—that would cost about £270 million a year. The present 1 million who are going for National Assistance are drawing about £42 million a year. I assume that if the pensions went up, the National Assistance charge would drop proportionately. But £270 million, even if there is some saving on National Assistance. is a very large sum. Where is it to come from? if you take it from the National Insurance cards, it is an average of about 4s. 6d. per card, and that means more for a man and less for a woman and a child. if you take it from taxation, it is approximately 1s. on the income tax, or getting on for doubling the petrol duty. One is entitled to ask this question. which the noble Lord, Lord Beveridge, has more or less answered for me. If you add it to the stamp, would it increase the cost of living? I think it definitely would, because the manufacturer's costs would go up by his contribution and the workers would almost certainly expect a higher rate of pay to pay for their contribution.
If you take it out of further taxation. I at any rate believe that further taxation would be inflationary. All this would mean paying extra pensions to 5¼ million people in order to reach 1¼ million. I believe that much the better course, as the noble Lord, Lord Ferrier, suggested, is to see that people lose their

1109
diffidence of going to the National Assistance Board and, if necessary, see that the National Assistance scales are more adequate. Moreover, in that way you would direct more money at the unfortunate old non-contributory pensioners. seven-eighths of whom are now over seventy-five years of age. There are fewer than 250,000 of them left, and 140,000 of those are partially supported by the National Assistance Board.
When one is arguing these things, one must try to get away from the emotional field. We all want to see the aged properly supported, but what is the optimum amount we can transfer from the working population without inflation? I do not believe that it is a much bigger amount, if at all, than we are transferring at the moment, particularly having regard to the fact that the aged proportion of the population is going up. The noble Lord, Lord Beveridge, was dissatisfied with the present pension. He thought that if the principles of his scheme had been stuck to, the whole thing would have been all right. But, quite frankly, I do not follow that, because pensions have gone up more than the cost of living, and yet there are still 1 million of these people having recourse to the National Assistance Board. I should have said that if there was anything wrong with it, it was the noble Lord's starting point of 26s.
Under the new scheme, I greatly welcome the decreased contribution for the lower paid people, but one must have some slight doubts about the increased contributions. It runs up to about 7s. 2d. a card—that is 4s. 6d. for a man's own share—and I am doubtful whether Her Majesty's Government are going to extract 4s. 6d. a week from even the more highly paid workers of this country without their asking for a rise in pay of considerably more to pay the amount. Of course, the risk could be avoided by bringing in this scheme to coincide with a reduction in the Pay-As-You-Earn deductions. But that is complicated, of course, by the fact that the taxation of a man earning £15 a week, or nearly £800 a year, varies enormously according to his family position. If he is a single man he pays quite substantial tax, whereas if he has a sufficient number of children he does not pay any tax. So
1110
it is rather difficult to relieve anybody by P.A.Y.E. nowadays.
The trouble is that if you embark on the field of what are, in effect, compulsory savings, you are bound to get these difficulties. The ideal situation is where the citizens save according to their inclination, and according to the ability they have to abstain for the present in order to provide for the future. That, I believe, is the reverse of inflation. Therefore, I believe that in all schemes one should aim at keeping the compulsory element to the minimum and the voluntary element to the maximum. In my opinion. this scheme does this. It does not touch the private schemes. I am not going into this contracting-in and contracting-out. because it is much too complicated and I do not understand it. But I have no doubt that it can be made to work if the Minister says it can.
Of course, these arguments of mine could be advanced against having any State scheme at all, but I think that so long as the State has assumed the residual obligation to support in old age, the State is entitled to say that people must make a provision during their working, lives and, moreover, make a provision on a basis which is actuarially sound in the case of new entrants. The new scheme, as it carries such a large volume of non-actuarial beneficiaries, is bound to be rather rough on the young and much too favourable to the old. In fact, it is not really insurance at all. But inasmuch as the cash inflow and cash outflow, with the State subsidy at a constant rate, about balance, I believe it is rough justice, and in the result you get the working population providing support for the aged. At the same time, the aged are encouraged to do better for themselves. This, I believe, carries out the letter of the Fifth Commandment, at any rate, and I believe that, working within the limits of practical politics, the Minister has produced an ingenious scheme.
LORD SHEPHERD: My Lords, before the noble Lord sits down, may I ask him a question? In the course of his speech he used the phrase, "with the spring of charity." I think he used it in the same context as his remarks on National Assistance and pensions to which a certain group have not contributed. I hope he does not mean that National Assistance is a form of charity.
LORD HAWKE: It is a matter of definition. If the noble Lord can think of a better word to mean getting money for which you have not contributed, I will accept that better word. It is a word chosen on the spur of the moment, and perhaps it was not the happiest one. But it is benefit for which no contribution in the past has been made.
LORD SHEPHERD: The noble Lord would agree that though it has not been a contribution in cash it has been, as my noble friend Lord Geddes said, a contribution of service. Surely, that is of equal value as the contribution of money.
LORD HAWKE: At the moment we are dealing with money in a White Paper, and naturally there could not be any contribution at all unless there had been a contribution of service.
5.13 p.m.
LORD GRANTCHESTER: My Lords, it is customary and right that, when speaking on a subject with which we have to deal outside this House, we should mention the fact. Sometimes our words may carry less weight on this account, but I think usually the interests that are declared in this House are sufficiently remote to be a comparatively unimportant factor. I hope that in my case this will be accepted, and that experience gained outside this House may make it possible to make some useful contribution on this rather difficult subject.
I should like to refer specifically to some paragraphs of this White Paper, and then to challenge some of the assumptions it makes. The White Paper starts its story in 1926 with the establishment of a State pension as of right. The idea of a State pension as of right was given fresh impetus in 1946, when a bold attempt was made to put a genuine face upon this matter of earned right—a right that was earned because contributions were paid for it. But this face was never really more than a facade, as more than one speaker has pointed out, because there was an element of substantial subsidy, and subsequent increases in the rate of pension have made havoc of the scheme as it was planned, as shown in paragraph 11 of the White Paper before us. I think the wording of paragraph 11 is a little unfortunate. To the ordinary reader it gives an impression of almost wizardry. It implies that the State is producing a
1112
capital value of £2,650 out of contributions of only £200. Perhaps this is relevant to the question raised by the noble Lord, Lord Shepherd. If the tax paid in the purchase of every packet of cigarettes or the tax paid when a bottle of beer is purchased were clearly marked on the packet or on the bottle, as the purchase tax is marked when one buys a car, the ordinary citizen might realise better than he does that in some way or other what the State provides has to be paid for, plus the usual service overheads. just as surely as when a purchase is made in the market. We should not encourage the idea that the State can give something for nothing; it cannot. I think it is quite clear to most of us to-day that 9d. for 4d. has become 9d. for 10d
Looking back, even to a date as recent as 1946, and commenting on the changed conditions, the White Paper, in paragraph 4, declares that
" to-day the general standard of living is higher than any cautious person considering the state of affairs during or immediately after the war could have dared to hope."
That is one of the new and cheerful factors to which greater significance should, I submit, be attached. The implications are that as a society we are growing up to individual independence; like children who have become self supporting, we can begin to act for ourselves instead of having things arranged for us, and this is a cause, or should be, for rejoicing.
I should like to refer next to paragraph 12, which has already been referred to by the noble Lord, Lord Geddes of Epsom. How gloomy I, too, think this sounds. Instead of having to look after one old person for every fifteen of the population we now have double that number to care for, and soon it is going to be even worse. That is what the paragraph tells us. I should like the story told very differently; something like this: owing to what our doctors have been able to do we are living longer, we are feeling better and we are able to work longer. That is fine, and surely an indication that some need not begin to think of drawing a pension quite so soon as they had thought it would be necessary.
Paragraph 13 plunges us again into gloom when it speaks of the deficit, which is running up to £400 million a year which will have to be found if we are to meet

1113
the liabilities under the existing scheme. The remarks made in reply to me by the noble and learned Viscount, Lord Hailsham, when referring briefly to this matter in the debate following the gracious Speech, made it clear that graduated contributions were introduced not on their merits or because Her Majesty's Government particularly liked the idea of graduated contributions, but to deal with this bugbear of a mounting deficit. It is true that £54 million is to be put in as an extra payment from general taxation to help towards that deficit, but the rest of it is to come out of the graduated contributions. Once more I would ask Her Majesty's Government to look at this matter again. There are other ways of bringing this mounting deficit within manageable proportions, and having regard to the record of improved health and longer living to which I have already referred, surely the first adjustment should be to extend the retirement age by, say, two years in the case of men. and perhaps four years to age 64 in the case of women. That would be a means of handling at any rate part of the deficit. Perhaps Her Majesty's Government could tell us at some time w tat the effect of that would be. It follows very largely one of the recommendations of the Phillips Committee.
I now come to paragraphs 15 and 16. These detail a remarkable record of achievement, not by any Government; a remarkable record of what directors and staff have done already for some 9 million workers now covered by occupational schemes. Surely here we can find the key to what is needed. What is needed is a rapid expansion of the number of people who are covered by occupational schemes, to include, for instance, the more casual workers. I should have thought this was a matter which might well receive the attention of our great trade unions, and I would ask the noble Lord, Lord Geddes of Epsom, whether he would not think it worth while for the trade unions to make a study of this matter of workers who are not yet covered by occupational schemes and help with employers' associations to work out suitable schemes. I know from my personal experience of at least one scheme which might have helped a group of men who change their jobs frequently but which was held up because it was anticipated that the Government would
1114
come out with a scheme. That shows how people stop acting for themselves as soon as Government announces an intention to intervene.
Then there is the question of transferability which has been mentioned by several noble Lords. We had a debate, I remember, in this House some year or two ago, in which a Government speaker said that there was too much changing of jobs in some industries; and that he was very doubtful whether transferability of pension rights would be a good thing or not. But if it is desired—and I personally think it would be a good thing under present conditions —it is perfectly simple to achieve transferability within existing occupational schemes. They all are approved. A request that transferability should be introduced would make it more costly, of course, but it could he managed fairly easily within a short period.
LORD PETHICK-LAWRENCE: My Lords, would the noble Lord allow me to interrupt him? It is quite simple when all the schemes are approved schemes from which one can contract out. The difficulty I put forward, which was the one put forward to me by Mr. Jackson, was that of a man going from an employment where he had contracted in and then contracted out, to an employment where he could not contract out and would come under the Government scheme; and finally, later in his life, going back into the original scheme. That is the problem which the noble Lord has not properly examined.
LORD GRANTCHESTER: My Lords, I think the noble Lord has misunderstood what I was referring to. I was referring to existing occupational schemes, few of which have provision for transferability. They could be modified, and I am sure that those who run these occupational schemes would be pleased to carry out the necessary modifications, if that is the wish of Her Majesty's Government. So remarkable, indeed, is the development which has taken place with occupational schemes covering 9 million workers that Her Majesty's Government have, I think. had pangs of conscience, and I am sure it is this which has prompted them to introduce the contracting out provisions in paragraph 67 of the White Paper.

1115
My own view is that these contracting out provisions, except for certain rather privileged groups of workers in a high wage bracket, will prove to be administratively tedious and excessively expensive and complicated both to employers and to the Administration, not to mention the insurance offices who handle many group schemes. That there is much work which would have to be done if there is to be contracting out is recognised in paragraph 74 of the White Paper. which suggests that there should be a delay of two years before the scheme could come into operation. That, I think, is already recognised as quite insufficient time to go into this matter. But is it not time that a halt is called to the passing of more and more administrative work from Government Departments to industry'? First, there was the burden of Pay-As-You-Earn accountancy which has already been referred to to-day, a system made possible only by throwing upon industry the extra work of collection on behalf of a Government Department. Then a great deal of work has been thrown on to industry as a result of the provisions of the Finance Act, 1956, under which many pension schemes originally taken out under Section 388 have had to be converted into schemes under Section 379. I think that was a Quite unnecessary burden. Now Her Majesty's Government are suggesting the remodelling and sorting out of pension schemes which affect some 9 million workers, without Thinking of the complications or the work that will have to he done.
So complicated is this matter of contracting out that I, personally, think there will be little of it. What is much more likely to happen is that, in view of the extra cost to employers of the proposed State scheme, occupational schemes will be modified to take into account the benefits of the new State scheme, if it is ever brought in. If what I anticipate is correct, that the extra cost is deducted from the contributions which are put into occupational schemes, and the benefits correspondingly reduced, no very clever result will have been achieved by these proposals. What sort of a build-up have we got now'? Faced with the complication of a growing deficit, graduated contributions are suggested, which are really a new social security tax; and
1116
because it is known that occupational schemes are really the best method of providing a pension, contracting-out provisions are introduced into the proposals. This brings new complications, the choice of going through the costly procedures of contracting out or of paying the extra tax and of reducing the benefits of an existing scheme if the costs of production are not to rise.
My Lords, what is the overriding reason why Her Majesty's Government have come forward with these proposals? I fear it is the fact that the Labour Party produced a new State pension scheme. That was not surprising. The Labour Party believe that they can do things for people much better than the people can do them for themselves. That is their philosophy—the Directing, Planned State, of which they are to be the bankers. levying the tolls and paying out, if not strictly according to need. then as the controllers think best. If the Labour Party are campaigning in favour of a new pension scheme, I suppose the candidates of the Conservative Party must be put in a position to stand up on the platform and say, "We also have a pension scheme—a less damaging pension scheme."
My Lords, is it not time to ask if democracy has so degenerated that there are no votes to be got for a Party which says, "If you are doing well you can put aside something to help sustain you in your old age. You will get the benefit of any contributions paid by your employer, and both you and your employer can charge" (I should like to see this made possible in the simplest way) your contributions against gross income "—and when I say "gross income", I mean any gross income derived from any source—and finally, to say "If by any chance you cannot do this: if you cannot make this provision, we, the State, will stand behind you and see that you do not want."? I do not mind going even further than that, and saying "Even if you could have done this and did not do it. if you neglected to make provision when you very well could have done, we will still stand behind you and see that you are not in need. for we hate want." I would go a little further on the road to freedom than my noble friend Lord Beveridge. Such a policy would, I submit, enable us to pay without strain

1117
more than £2 10s. to a man who was really in need.
Surely, in these days of modern and sympathetic administration, too much is made of the bugbear of a means test. Are we not all subjected to a means test when we are asked to fill up an income tax return? Perhaps those income tax returns which everyone has to make might come to be the dividing line between those who need and those who do not need. If education is worth anything, and if technological advances are bringing in their train higher material standards. we can expect more and more people to grow up and be able to act for themselves. It is no good harking back to 1926, or even to 1946. A new world is before us and we must speak the language of to-day, the language of responsibility and freedom. The White Paper still speaks the language of yesterday, the language of dependence. I know that it is easy to criticise—please forgive me: but this White Paper should be forgotten, Her Majesty's Government should think again.
5.41 p.m.
LORD SINCLAIR OF CLEEVE: My Lords, though I am myself a very junior Member of your Lordships' House, it is my very pleasant duty and privilege to oiler my mead of congratulations to the noble Lords, Lord Ferrier and Lord Geddes of Epsom, on their maiden speeches which delighted your Lordships this afternoon. If I may introduce a brief personal note. I should like to record that an experience some years ago in sitting on a court of inquiry with the noble Lord, Lord Geddes of Epsom, led me to expect just that forthrightness of expression, clarity and sincerity that we heard to-day.
At this; late hour it is unnecessary, and probably undesirable, to attempt to elaborate on the complications and complexities of the White Paper now under discussion, for those complications and complexities are considerable. Efforts are being made at the present time to obtain clarification on a number of important points, and in support of what was said by the noble Lord. Lord Grantchester, in one part of his speech, I should like to reserve judgment before making any final appraisal of many of those detailed points. I feel that if we could somehow or other, for a space,
1118
close our ears to the more clamant calls of Party politics, as the noble Lord, Lord Beveridge, suggested, and look at this question as the great national issue that it is, we should find in all sections of this House a great measure of agreement on the kind of plan, or certainly the objective, which would help to increase the standard and widen the range of provision for old age.
In doing so I would feel, as the noble Lord, Lord Beveridge, so eloquently expressed, that the first condition must be that the plan should be economically sound. For, as he said, if I remember his words, "Any Government to-day has an obligation to preserve the stability of money which is second only to its obligation to preserve peace with honour." I believe that the stability of money is the foundation of savings, and that without it we cannot expect to get real savings. I believe, also, that without real savings we shall never have a pension plan that offers scope for individuality—which, I believe. is one of the foundations of this country's greatness.
A second point emphasised by the noble Lord, Lord Beveridge. also struck a note of sympathy in my mind—namely, that a Government should look very care. fully before they go beyond the provision of a flat-rate pension. I am not presuming to state what the level of that flat-rate pension should be, or the extent of the inadequacy of the present level; but I believe that the principle of a flat-rate pension, supplemented by what individuals can themselves find from their own earnings, is the right principle on which we should look at this question. That is a principle from which there is a departure in the Government White Paper; and that departure I regret. Like the noble Lord, Lord Beveridge, I myself should dissent from the views expressed in paragraphs 23 to 26 in the White Paper.
Lastly, on a point which is very close to my own experience, namely occupational schemes, I would say that I entirely agree that provisions for contracting out are most complicated and that it is difficult at this stage fully to appreciate how they are going to work. In the early part of the White Paper there is an acknowledgement by Her Majesty's Government of the contribution which these occupational schemes make to the

1119
solution of this problem. They are described as a great national asset I cannot help feeling, however, on coming to the second part of the White Paper and looking at the provisions therein described, that there is a good deal of what appears, at any rate at first sight, to be active discouragement of occupational schemes. I very much hope Her Majesty's Government will look at that point again.
I cannot for the life of me see the logic of the argument that, to qualify for contracting out, a scheme must provide pensions at least equal to the maximum graduated pensions, while on the other hand it has to pay the full flat-rate contribution and not the reduced rate applicable to earnings between £9 and £11 in the Government scheme. This can mean, of course, that a man in an occupational scheme which has contracted out whose average earnings are £10 a week has to get a graduated pension equivalent to that of a man earning £15 a week. Yet, on the other hand—because there is an element of contribution to the national fund in the graduated contribution—it is only fair (I believe that is the sense of the wording used in paragraph 42) that the contracting-out firm should pay the full flat-rate contribution. Those two things seem very inconsistent, and at first sight they are a definite deterrent to the extension of occupational schemes which I firmly believe are bound to be one of the most effective measures for improving provision for old age, at any rate for a large section of the population in this day and age.
In conclusion, therefore—and I apologise for having spoken so long—may I, with great respect, urge Her Majesty's Government, in framing their proposals for inclusion in a Bill, first to examine with the utmost care, and to re-examine, anything which appears to have in it the least seeds of danger of inflation, because I believe that that is the major hazard we have to face; and secondly, to look again at the provisions in relation to occupational schemes so that, in effect, whatever the final form of the proposals, those schemes may receive encouragement, not discouragement.
5.50 p.m.
LORD LATHAM: My Lords, we are moving to the conclusion of a lengthy debate, which has been comprehensive and dealing with what I think we shall all agree is one of the outstanding and important social questions of the day. The problem is the provision for old age, which really becomes the problem of banishing want in old age. Old age has become, for a large section of the people of this country, a nightmare. The eventide of life is dreaded. Where there should be serenity and a sense of security, there is for a large section of the elderly people of this country denial, distress and destitution.
We have been told this afternoon that over one million pensioners and their spouses are in receipt of National Assistance; and social inquiries and surveys which have been made—though limited in extent, I agree—indicate that there is a very large number of old people who are so poor that they would be entitled, if they sought it, to have help from the National Assistance Board. I think we shall all agree, without concern for Party, that the present state of affairs as regards the aged of our country is one which constitutes a challenge to the social conscience of the nation.
LORD AMWELL: My Lords, I am sorry to intervene, but the last official figure of people actually in receipt of National Assistance is 1,640,000. That is approaching 2 million.
LORD LATHAM: I am obliged to the noble Lord for giving me that information, but I was relying on information that has been quoted officially in the other place. If the noble Lord is correct, then the problem is worse and its extent is much wider.
I confess, if I may say so, that I was a little surprised, indeed, a little shocked, at what was said by the noble Lord, Lord Hawke, who I regret is not in his place at the moment. I understood him to say that he thought the State should limit its provision to the very minimum, and that anyone in need beyond that minimum should have an extended right of applying for National Assistance. That seems to me to be an attitude of mind which is reminiscent of the early days of this century, when there was considerable opposition to the modest pension of

1121
5s a week, dependent upon a means test, for a person at age seventy.
We can, I submit, abolish poverty in old age. With the growth of national output, and therefore of national income, we could bear the cost without, as the noble Lord, Lord Beveridge, suggested, our being sunk in excessive taxation. After all, it was Mr. Butler who said that we can double the standard of living in twenty-five years. If that he so, the aged are entitled to a proper share of it, and the way in which we treat the aged is an element in the standard of living. The Times recently said this in discussing the White Paper:
" The increasing numbers of the old present no serious economic difficulty."
I think that is true. It went on to say:
"… as for the prospective increase over the next two decades in the Exchequer charge, a mere 6 per cent. increase in national output could dispose of it without raising the level of taxation."
If that be the case—and my submission is that all the facts point to that—then we can banish poverty in old age.
The Government's proposals, in our view, are not designed for that purpose. Their purpose is a limited one. The principal purpose is, of course, to place the National Insurance Scheme on a sound financial basis. That is the primary purpose. in my submission, of this scheme. It is the dominating purpose; and all other proposals, whether they refer to the flat-rate scheme or to the graded-pension scheme, are subservient and subsidiary to that declared aim: the aim of putting the present National Insurance Scheme on a sound financial basis. And these words, of course, mean simply: to transfer most. of the accumulating deficit of the flat-rate pension scheme from the Exchequer to one class of new contributor, who will be getting a limited graduated pension; in short, to transfer to the middle-grade worker, the man earning £11-plus. the burden of most of the deficit which will arise on the flat-rate scheme and which at present must be borne by the Exchequer. That heavy burden is to be borne by 13 million contributors alone, under the provisions of this scheme.
As the Economist of October 18 of this year said—and the Economist is not a Socialist paper, and it is not embarrassingly favourable to us in most of its comments:
1122
" The main feature of the scheme, indeed, in some ways its whole essence, is that it is expected to save the Exchequer £99 million in the first year of its operation and £428 million in 1981–82."
And this White Paper, forsooth! is entitled, Provision for Old Age. As I have said, it is no provision for old age; it: is, I think, a shoddy and a shabby pretence. It is a graduated scheme for a limited number as a device to secure this transfer of liability for accruing deficits. As The Times of October 20 said, it was a crude form of income tax related to benefits which were not themselves related to contributions. And it went on to say:
" What is surprising is the way in which the White Paper obscures the essential financial mechanism of the plan. It contains no actuarial data."
Then, a little further down, the article went on:
"The Labour Party, though lacking the Government's command of experts, was not afraid to publish the arithmetic of its pension plan for all to criticise."
Therefore we think that these proposals must be seen not as primarily a scheme for pensions but as a scheme to transfer accruing liabilities.
We take the view, therefore, that the scheme as set out in the White Paper is unsatisfactory on general grounds. The problem has been approached from the wrong angle and in the wrong way. There are also a number of particular features in the scheme as set out in the White Paper which are unsatisfactory. There is, for instance, no provision for the existing pensioners, and there is no provision for the non-contributory pensioners, of whom I believe there are still some 250,000. They are left to go to the Assistance Board in order to avoid destitution.
Moreover, the scheme is not a comprehensive or a national scheme. As my noble friend Lord Pethick-Lawrence pointed out with clarity and force, the scheme is not universal; and he went on to say, as I gathered, that schemes of this kind sooner or later must become universal. In this scheme 7¾ million workers (of whom 70 per cent. are women) get nothing except a temporary reduction in contribution of ls. 7d. for the man and 1s. 2d. for the woman—and there is a notice in the White Paper that in 1965 there will be an increase in contribution and that. following that, there will be a further three increases with an interval

1123
of five years between each. In short, as has been said in another place, these 7¾ million workers, getting £9 a week or less, will become second-class citizens with no rights to be included in a superannuation scheme where the benefits are related to contributions and where both are related to wages. They must rest upon the existing fixed pension scheme, which is not even guaranteed against inflation.
When we look at the graduated pension proposals, we find that these really are almost derisory. Only 13 million of the 24 million insured workers will come within the scheme. That equals something like 54 per cent., whereas in Germany 77.5 per cent. of the insured workers are within a wage-related pension scheme; and I am informed that in the U.S.A. the comparable percentage is 84–4. The scheme for pensions. but not for contributions, stops at £15. As my noble friend Lord Pethick-Lawrence said in his earlier speech on this subject during the debate on the Address in reply to the gracious Speech. it is difficult to understand why the scheme stops at £15. Very few private schemes, if any, would stop at this relatively low figure. Most of these schemes embrace membership carrying salaries very much higher than £15, and it means, as I have said. that the burden of the relief to the Exchequer from the deficit arising from the flat-rate pension scheme will be principally borne by no more than 13 million contributors.
The only thing which is definite about this scheme—perhaps not the only definite, thing, but one of the things which are quite clear and definite in this scheme—is that the Treasury's liability is to be limited to £170 million a year as regards the whole comprehensive scheme. The Minister quite frankly said in another place on October 29 [OFFiCIAL. REPORT (Commons), Vol. 594 (No. 2). col. 166]:
" the subsidy payable universally up to £9 is gradually withdrawn on the steps up to £15 ",
and at £15 a week the Exchequer contribution is completely withdrawn. As I have already indicated, The Times said that this proposal is "a somewhat crude form of income tax, charging variable contributions towards fixed benefits." I submit, my Lords, that the whole framework of this scheme and all its elements have been determined by the overriding
1124
consideration of relieving the Exchequer of its liability for deficits.
Then a question has been raised as to
" whether it is right that the machinery of the State should he used to compel people to make provision for their old age beyond a fairly modest and reasonable provision."
Those were the words used by the noble and learned Viscount on the Woolsack in his speech on this matter on October 30 last [OFFICIAL REPORT, Vol. 212 (No. 3), col. 122]. I should have thought that that was a rather curious philosophy in these days. Nearly 1½ million persons who are in public service, either central or local, are compelled by the State (and, as regards local government, by Act of Parliament) to make provision, whether they like it or whether they do not. If they are to be employed in the Civil Service or in local government, they must become members of a pension scheme. The 1½ million figure does not include the large number of industrial workers who are employed by the central Government and local government and who are compulsorily within pension schemes. nor does it include 250,000 teachers. It is a little ironic to reflect that recently these teachers, against whom the machinery of the State must not be used to compel them to make provision for their old age, were compelled to agree to increase from 5 per cent. to 6 per cent. their contribution towards a pension. It seems to me that there is no case on those grounds why the scheme should be limited to earnings which do not go beyond £15 a week.
There is another difficulty, to which my noble friend Lord Pethick-Lawrence referred with searching results—that is. the exclusion of the self-employed from the scheme. I understand that there are something in the region of 1½million self-employed persons within the National Insurance Scheme who are paying contributions of the employers and the employed within that flat-rate pension scheme. It is true that the self-employed person until 1956 did not have the benefit of tax concessions in respect of premiums paid for pensions and that he now has that concession; but there are many of the 1½ million who will be unable to make provision, even with those tax concessions, because normally the procedure is the formulation of schemes. I admit that it will be difficult to

1125
apply the scheme to the self-employed. One can readily imagine the difficulties which would be involved. But I submit that that is no reason why they should be left with the flat-rate pension scheme only or why the Government should not face up to the difficulties and resolve them rather than run away from them.
There is also the rather miserly treatment of widows. If a woman is over sixty she can draw half of the accrued pension when her husband dies, but if a widow is under sixty, she gets only a widow's pension. I gather that the cost of remedying this and having no distinction between over or under sixty years of age would be trifling. It seems to me that the Government ought to do something to remedy this disadvantage, because the position of widows is really tragic, as many of your Lordships must know. Then there is the scale of pension which has no comparison with contributions. My noble friend Lord Stonham has referred to young men who earn £15 a week at eighteen years of age, pay their contributions and in 2010 will have their flat-rate pension increased under the scheme by 41s. That is not exactly wringing the poverty out of old age. The Times has pointed out in a leader how poor is the scale of benefits. This is due to the fact that a substantial proportion of the contributions under the graded scheme is to go in relief of Exchequer subsidies. That is the real reason, in my submission, why the scale of benefits is so low and is less satisfactory than could be obtained from an insurance company.
To sum up, we take the view that the scheme is unsatisfactory, for, among other reasons, it excludes nearly 8 million persons from superannuation; it limits the scheme to 54 per cent. of insured persons; it transfers the liability for the deficit on the flat-rate pensions scheme from the Exchequer to the contributors under the graduated scheme; it makes no provision for the self-employed; the arrangements for contracting out are unsatisfactory and may well prove to be unworkable; the pensions are too low for the contributions which have to be paid; the scheme does nothing at all to relieve the present and gathering distress of existing pensioners, and it
1126
does nothing to protect the meagre pensions from inflation. The scheme will not work. It is not a scheme which will operate in the years to come to banish the spectre of poverty and destitution in old age. In our view, it is more likely to perpetuate it. In these circumstances, we cannot regard the scheme as being in any sense a proper and adequate provision for old age.
LORD FERRIER: My Lords, may I ask a question of the noble Lord opposite in order to get some:figures right? He gave the figure of 1,640,000 in receipt of National Assistance. Am I not correct in saying that only 50 per cent. of these are aged people?
LORD AMWELL: My Lords, I merely stated the official figure of those receiving National Assistance. I am not familiar with the breakdown of the figure.
LORD FERRIER: I thank the noble Lord for making that clear. I obtained some figures this morning which showed that of those, 70 per cent. are receiving National Insurance and of those 72 per cent. are old people, making my figure about .84 million aged people actually in receipt of National Assistance.
6.20 p.m.
THE EARL OF DUNDEE: My Lords, the White Paper which we are discussing to-day begins by stating in the introduction that the Government would like everybody concerned to have an opportunity of expressing his views before the details of the scheme are fixed, and I am sure my right honourable friend the Minister of Pensions will give particular attention to what your Lordships have said in this debate. The noble Lord who introduced the Motion, Lord PethickLawrence, has been a high authority on public finance for the whole of my life—I have had the privilege of hearing him on many occasions since I came into the House—and the noble Lord, Lord Beveridge, is the author of the Report which has done more than anything else to determine the shape of our modern social insurance system. Although the noble Lord seems to be rather doubtful about the advisability of having any kind of graduated scheme, I do not think that affects the objective of trying to overcome want. I doubt if we ever shall achieve freedom from want., because as

1127
soon as you conquer the wants of one generation the next generation always wants a great many other things which the previous one did not; but it is a good thing always to keep trying.
In this debate we have had two excellent maiden speeches: from the noble Lord, Lord Ferrier, who made some valuable suggestions in regard to the finance of the women's position under this scheme, and also about persons who resided abroad and who wanted to be brought into it on coming back again; and from the noble Lord, Lord Geddes of Epsom, whose deep sincerity and sympathy for the old people was, I am sure, greatly appreciated by your Lordships. We hope often to have the opportunity of hearing them both again.
Most people want social security, particularly in old age, or at least some kind of security. Most people also want personal freedom; and it is not easy for a Government at the same time to guarantee social security and to protect personal freedom. Mr. Hilaire Belloc, who was at one time for a few years a Liberal Member of Parliament, but who got tired of being one before Mr. Lloyd George introduced his first insurance scheme, wrote a book a little later on in which he foretold the development of our modern Welfare State. But he did not call it the Welfare State. He called it "The Servile State", which was the title of his book, because he argued that if all the worker had to do was to earn his wage, and if the Government decided for him how much of his wages, and in what manner, should be used to provide for his own future and that of his family, then the wage-earner had become a slave.
A year or two before Sir Winston Churchill extended National Insurance to include old age and widows' pensions, in the early 'twenties, I remember another Liberal politician, of a very different type from Mr. Hilaire Belloc, Sir Alfred Mond, coming down to Oxford and making a tremendously powerful speech against the whole principle of compulsion in our National Insurance system. "Why", he asked, should you take away a man's money for an old age that he will never reach and for a widow that he has not got?" I think we are all agreed now, except perhaps for a few superannuated Liberals, that it is
1128
desirable that we should take away some of a man's earnings in order to make some provision for other people's old age and for other people's widows, including, of course, his own, if he should ever acquire either of these things.
LORD LATHAM: What about somebody else's?
THE EARL OF DUNDEE: Including his own, if he should ever acquire either of them. But how much of his wages we ought to take, without unreasonably limiting his personal freedom, cannot be defined by a figure or by a percentage. It is a question that must be decided by the common sense of the Legislature, which desires to protect freedom as well as to promote security.
In my own view, if we were to take away in compulsory contributions so much of a man's earnings as to restrict unreasonably his ability to make such other provision as he might prefer for the future of himself and his family, then we should be building in this country not a Welfare State, but "a Servile State". As the Beveridge Report states (I think it is paragraph 21):
" Management of one's own income is an essential element of a citizen's freedom."
I was glad to hear the noble Lord, Lord Beveridge, repeat that principle with great emphasis in his speech this afternoon. I am also glad to see that this White Paper affirms the same principle, in paragraph 32, where it says:
"The Government believe that it would not be right to force everyone to contribute more through a State scheme than would be needed for a reasonable provision for old age. For the State to go further would be to arrogate to itself the individual's right to dispose of his income in what he thinks the right way, and would seriously undermine the individual's sense of responsibility for his own affairs."
The purpose of the Government is that the State insurance scheme should not supersede but should supplement other methods of individual provision for old age, whether they be ordinary saving, private insurance polices taken out in the ordinary way, or occupational schemes. All of these things may be better fitted to the personal needs of the individual than a uniform State scheme, and we want to give the individual as much freedom of choice as we can. In the State insurance scheme, the Exchequer subvention, which is to be £170 million a

1129
year, is used mainly to weight the payments in favour of the lower-paid workers, who would not be able to afford such adequate provision for themselves as the higher paid ones; and the graduated scheme, which affects only, on the present basis of wages, those earning between £9 and £15 a week, is not intended to abolish other schemes, but to give those workers who have not at present got a chance of insuring themselves under an occupational scheme the alternative opportunity of doing so under this new State proposal.
LORD LATHAM: It is not an alternative; they are bound to go in.
THE EARL OF DUNDEE: I am sorry. I am referring to the workers who have no chance of having any occupational scheme at all. It is mainly intended to give them an opportunity to do something which will relate their future pensions to their present wages.
I ought perhaps to say one word here on the question of contracting out. I am afraid that it is a vast subject which one would not have time to go into in great detail. As the noble Lord, Lord Pethick-Lawrence—who was the first to raise it—is aware, there are no fewer that, 38,000 occupational schemes of every imaginable variety, from the Civil Service scheme, which is a condition of employment, the teachers' scheme or the miners' insurance scheme, with large numbers of State employees and hundreds of thousands of people in one scheme, down to vast numbers of small schemes with perhaps not more than a dozen in each. The conditions in these schemes vary a great deal. In some cases the employer pays the whole of the contribution; in some cases the worker contributes part. In some cases, the scheme, like the teachers' scheme, is a condition of employment, while in other cases it is not. The usual criticism so far against the White Paper proposals on this point has been that the initiative in contracting out is left to the employer, whereas I understand that the Labour Party's national superannuation scheme would allow an individual choice to the worker, which we believe to be impracticable, for many reasons. It is the employer who has to make all the returns and carry out the management of the scheme, and we do not think it would
1130
be practicable to have individual people contracting out.
It seems to the Government that, since most of these schemes of private industry have been set up in order to preserve good industrial relations, it is extraordinarily unlikely that the employer would act without consulting the employees and first ascertaining their wishes. I understand that the noble Lord, Lord PethickLawrence, takes a different view. He thinks that it would be impracticable even to have collective contracting out. That is to say, he presumably does not think that the more complicated and difficult proposal to have individual contracting out could be really considered at all. He also thinks that the proposals in the White Paper for collective contracting out which, I agree, have not as yet been worked out in detail, would not be practicable.
LORD PETHICK-LAWRENCE: My Lords, as the noble Earl has referred to me. may I make my position perfectly clear? I can see a great deal to be said for the Labour scheme which allows individual workmen to contract out. It may not be practicable. The Government say it is not. I have not addressed myself this afternoon to the Labour scheme, because the Government say that it is impracticable, and it is not the scheme they are proposing. I have addressed myself solely to the Government scheme. I pointed out in my speech that a leading member, in charge of one of these schemes in Unilever's, gave certain definite reasons why he regarded the scheme as unacceptable; and he. for one, will not have anything to do with it. That is all I said. I have not said that the Labour scheme is impracticable; I say the Government have said that. I was discussing the White Paper, and I have not discussed the merits of the other scheme.
THE EARL OF DUNDEE: My Lords, I am extremely grateful to the noble Lord for his intervention. I think it may be that in some cases—we cannot tell yet—occupational schemes may be extremely difficult to contract out of. As the noble Lord. Lord Grantchester, suggested, it may be that in some cases occupational schemes may be revised in order not to take too much away in contributions from the worker, and there may not be contracting out in these cases. In other

1131
cases, if the scheme is a small one, it may be that both the occupational scheme and the State graduated scheme will run together.
The noble Lord mentioned that it might be in the interests of certain groups of workers in one industry to remain in the occupational scheme and contract out of the State scheme, and to the interest of other groups in that industry not to contract out but to get the benefit of both schemes at the same time. I think that would apply often to workers getting between £9 and £11 a week, because the contributions of people with a wage of over £9 who are in occupational schemes remains at 18s. 4d.—they are not reduced —and the graduated contributions do not reach the height of 18s. 4d. until a man gets to £ 11 a week. Therefore, if you take the group between £9 and £11, if the employer will still go on paying his contributions, plainly it will be in the interest of the worker to remain in both schemes; and it may well be that in some firms the employer might arrange one scheme for one group of workers who want to stay in, and another for another group who want to stay out. What would be hopelessly complicated would be if a few individual workers in each group took a line different from all the others. I think that would make the thing impracticable.
The noble Lord. Lord Sinclair of Cleeve, in a helpful speech, in which he recognised the great value of these occupational schemes, was inclined to think that in paragraph 68 of the White Paper, which lays down the conditions for transferability, some injustice was done and it was made too difficult. I am sure that if there is any injustice to any contributor or any employer, the Minister of Pensions will be willing to look at it again. But we must provide that any worker who does contract out of the State graduated scheme, and who then changes his employment, shall not be put in a worse position by having done so. That is the first consideration which we must enforce. Subject to that, I am sure that everything will be done to encourage the growth of these occupational schemes which the Government wish to see increase.
During the war, all political Parties agreed on the Beveridge Report, and. although since that time the economic
1132
position of the majority of wage-earners in this country has changed a great deal, I think there is still a great deal of common ground between the Parties about our policy of making provision for old age. There are also, as the debate to-day and debates in another place have shown, a great many differences. I am not quite sure whether these differences ought really to be described as differences of principle or differences of emphasis but I am afraid that at the moment they do not seem likely to diminish while the possibility of an Election draws nearer. The noble Lord, Lord Beveridge, proposed that we should have an all-Party conference to put provision for old age outside Party politics. I think that is an excellent plan. It is rather like the Summit Conference, and the chances of its being achieved are perhaps even less. But, in principle, I cannot argue against such a proposal, because I personally think it a most admirable plan.
The main differences against the White Paper—whether you call them differences of principle or of emphasis—which 'have been brought out in:this debate, and which were discussed by noble Lords opposite and by the noble Lord, Lord Beveridge, were, first, that the present pension does not provide adequate subsistence and, next, that the scheme does not make any provision against inflation.
Now, my Lords, the evidence for the assertion that the present pension does not provide adequate subsistence is the fact that a large number 'of pensioners are receiving benefits from National Assistance. and as there appears to have been a little uncertainty about the figures, I have tried to get the right figures on that subject while this debate was going on. As I think the noble Lord, Lord Amwell, said in his last intervention, the figure of 1,600,000-odd is the whole figure—all the applicants whose case is entertained by the National Assistance Board.
LORD AMWELL: There is no point there. They all want it or they would not get it.
THE EARL OF DUNDEE: This is the total number of successful applicants, those whose claims are admitted; the figure is 1,640,000; that is all those who are receiving assistance from the National Assistance Board, including those who are below pensionable age, unemployed, young persons and sick persons.
LORD AMWELL: That is what I said.
THE EARL OF DUNDEE: I think there was some uncertainty about the figures, which were rightly given by the noble Lord, Lord Ferrier. With regard to old age pensions, I think about 21 per cent. of families with an old age pensioner in them are in receipt of National Assistance. That would presumably give one a figure of about 1 million old age pensioners. The noble Lord has the correct figure, but I thought I would just be quite clear about the distinction between the old age pensioners and those on National Assistance.
LORD LATHAM: Would it help if I read it out?
THE EARL OF DUNDEE: No, I think it is quite plain now. The Beveridge Report contains the phrase "adequate subsistence" again and again all the way through, and I have always greatly admired the care and perseverance with which Lord Beveridge and his collaborators who drew up the Beveridge Report examined the household budgets of so many families, drew up so many scales of subsistence having regard to prevailing price indexes and so on: I think their researches and their publications are of great value to social science. But our conceptions of what constitutes adequate subsistence are continually changing. If you know all the circumstances of two families you may be able to say, "According to my present ideas this family has adequate subsistence and that family has not". That, indeed, is what the National Assistance Board are expected to do, and I think that the officers of the Board carry out their duties with humanity and understanding.
But when you come to apply the concept of adequate subsistence to a statutory pension which is received as of right and is paid for by contributions, it always seems to me that you meet very great difficulties indeed. I feel it is rather like the question which so often used to be asked at political meetings, although it is not so often asked now: "What figure do you consider is a living wage?", a question I always think no one but a fool would ask and no one but a worse fool would try to answer. My doubts about the applicability of this phrase are certainly not diminished by reading the booklet of
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the Party opposite, National Superannuation, giving the Labour Party's policy on old age. They have undertaken to raise the present old age pension immediately from 50s. to 60s. in the case of a single person and from 80s. to 90s. in the case of a married couple, and they commit themselves in this booklet, on page 19, to the statement that these increases will provide adequate subsistence, not, of course, in about twenty years' time but at this moment. They say that in the immediate future this substantial increase, raising the basic rate of pension to £3 a week—that is for a single person—will provide adequate subsistence. That is perhaps rather an incautious statement. I think there might be people who would argue that it was not adequate subsistence.
But may I compare that with the other statement, on page 5. in which this booklet says:
" In Great Britain to-day grinding poverty is still the rule and not the exception among retired workers with no superannuation or private insurance."—
that is to say, those who are getting 50s. if they are single and 80s. if they are married. I think we certainly all appreciate that for an elderly couple whose income is about £4 a week 10s. is a very substantial sum. But it seems to me a little rash to commit oneself to the statement, as this Labour Party booklet does, that the difference between 80s. and 90s. is the difference between grinding poverty on the one hand and adequate subsistence on the other. I cannot help feeling that these terms are being used here in a polemical rather than a scientific sense. The obvious answer is that the present pension of 80s. for a man and wife is worth in terms of purchasing power 15s. 6d. more than the pension at the time when the Labour Government went out of office in 1951. It had then just been raised from 26s. and 42s. to 30s. and 50s. If the present rate of 80s. represents grinding poverty, then the poverty which the Labour Government imposed on the old age pensioner must have been harsh indeed; it was 20 or:30 per cent. worse than the present position.
The next criticism of the White Paper proposals is that we do not provide a sliding scale of pension, or rather a scale of pension linked to a cost of living index, as the Labour Party's National Superannuation proposes to do, in order

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to protect the pensioner against inflation. I am sorry the noble Lord, Lord Beveridge, is not here; he would be able to correct me if I am wrong. I think that in his speech to your Lordships last January he said that in his view this would make hay of the finances of any superannuation scheme, and I believe it would be very difficult to take away the authority of Parliament to review the scheme every few years—to make an automatic rise and fall, or at least, rise with the cost of living. The noble Lord will remember that when Mr. Griffiths, who has presumably changed his mind now, was Minister of Pensions in 1946, he pointed out that it would be quite impracticable to have a pension linked to the cost of living, and he reminded Parliament of the unhappy precedent of trying to do that in the case of Service pensions which broke down and led to such melancholy results.
Loan LATHAM: It is the case, is it not, that the Minister of Defence is proposing to do it for Service people now?
THE EARL OF DUNDEE: The Service pensions do not go up and down any more with the cost of living. The reasons given by the Labour Party on page 27 for wishing to link the superannuation pension with the cost of living are perhaps instructive. They say:"
The best safeguard is to attack the problem at source and stop inflation "—
I think we should all agree with that. Then they go on to say:
" A Labour Government would take such steps as are necessary to do this "7—
that is, to stop inflation—
" but we cannot guarantee that Labour will always be in control."
Therefore, in order to protect the pensioner against inflation under Tory Governments they must have the pension linked to a cost of living figure. I do not think that either Party is entirely unblemished in regard to the matter of fighting inflation, but when the pot calls the kettle black in this way it is legitimate for the kettle to retort perhaps a little sharply that its own blackness is not quite so sombre as that of its accuser. Not only was inflation more rapid from 1945 to 1951 than it has been since, but the old age pension during that period of inflation did not go up at all until just
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before the election of October, 1951, when it was put up from 26s. to 30s., with a married couple's pension going up from 32s. to 40s. That did not in any way compensate the pensioner for the very heavy rate of increase in the cost of living.
But since 1951 the pension has been raised, first, in 1955, from 50s. to 65s. for a married couple, and then in 1958 from 65s. to 80s. for a married couple, and it is now higher in relation to the cost of living than it has ever been. The fact is that the only time the pensioner would have needed protection against a rise in the cost of living was under the Labour Government before 1951. Since 1951 he would actually have suffered in that his pension would not have gone up so much if it had been linked to a price index, because the present pension is worth more in terms of purchasing power than it has ever been at any time since it was introduced in 1946. It is now worth 15s. 6d. more than it was in 1951, and the rises between 1951 and 1958, the last of which was in January of this year, have outstripped the rise in the cost of living which has taken place in the intervening years.
The noble Lord, Lord Beveridge, argued, and I think most of us on this side of the House would agree with him, that the Labour Party proposals for national superannuation would put what he called "an unsupportable burden" on the workers and would be likely to cause inflation; and he added that it would also be a further incentive to inflation. That is a statement with which I am inclined to agree—I do not think that the noble Lord overstated it. But when he himself attacked the Government's White Paper scheme for not giving adequate subsistence, I wondered what other proposals he would have put forward to do it if he thinks that the proposals which the Labour Party have put forward are likely to cause so much inflation that the value of the pension would actually become less instead of more. I will not pursue that, because the noble Lord has been unable to stay here and he might have been able to make some further observations about it.
But while this debate has furnished us not only with a great many interesting and useful speeches but also with some

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useful suggestions, it has not done anything to convince me that the main principles of the Government's scheme in this White Paper ought fundamentally to be changed; nor has it convinced me that the alternative plan put forward by the Labour Party ought to be supported in preference to ours. It seems to me that if you try to do too much, and impose too heavy a strain upon your economic resources and possibly set in motion new inflationary forces, you may then destroy your own ability to do what you want later on. Some noble Lords have suggested that under the White Paper plan the pension will be tied for ever to the figure of £2 10s. That is not so. In paragraph 34 of the White Paper it is clearly stated that the pension can be reviewed from time to time. It seems to me that your Lordships ought to give approval to the general principles of the plan contained in the White Paper. It may be a modest plan, but it is a plan which we know can be carried out on the existing basis of our economy and one which is capable of expansion if the general prosperity of our country should rise to a much higher level.
6.56 p.m.
LORD PETHICK -LAWRENCE: My Lords, it is not my practice, and it is certainly not my intention to-day, to make a long statement before asking your Lordships' permission to withdraw my Motion. There are, however, just two or three points that I propose to deal with very shortly before I make that request. First of all, I must join with what has been said on both sides of the House in my appreciation of the two maiden speeches that have been made to-day. There have been some suggestions by those speakers that they hoped they were not going to infringe the "noncontroversial" rule. I think there is some misunderstanding about that. I think that all that is expected of maiden speakers is that they shall not be aggressively controversial or make personal attacks. I think it is perfectly right that in a debate they should take a Party side or whatever they feel is their accurate position. I should like to congratulate both noble Lords in conforming in full detail to any tradition or understanding that there is in this House.
We had a most interesting speech from the noble Lord, Lord Ferrier. I did not
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agree with a great deal of it, but that is purely a Party question and has nothing whatever to do with the merits of the speech. I congratulate him, and I hope that we shall hear from him again. Turning to my noble friend behind me, Lord Geddes of Epsom, I was delighted with his speech. I thought he made some excellent points, and I am quite sure that his vigour and sincerity appealed to the whole House.
Now I come to the two questions of fact dealing with the situation. I should I like to make perfectly clear my position with regard to this business of contracting out. I have no ideological objection at all to private schemes of superannuation. The people who have founded them, the people who have supported them and the people who have worked with them, are deserving of the highest praise. They have initiated this method of superannuation having some relation to wages, and it is a great tribute to them that the Government are now introducing a national scheme embodying the principle which these pioneering employers and employed have initiated in their own industries. I have no ideological objection, and I think it is exceedingly likely that some employers may decide to contract out. For the reasons which I have already given, it is perfectly clear that there is a strong case for employers to say "We will not contract out ". Mr. Jackson, speaking for Unilever, takes that view strongly, and I must say that his speech convinces me that it will be a very doubtful thing for any employer to stay out. I am not complaining that Her Majesty's Government have decided in their minds that the decision must be made by the employers. So far as I can see, there would be considerable administrative difficulties if it were left to the individual workman, and other, slightly different, administrative difficulties if it were left to the employer.
The reason why I dealt only with the one scheme was that it is the only scheme under discussion. I am not complaining that others should have brought in the Labour Party scheme, but we are not here to-day to defend that scheme: we are here to discuss the scheme of Her Majesty's Government, and that is why I addressed myself to that question. I take no exception at all to what has been said on that point. The noble Earl who

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wound up the debate said some very sensible things, particularly in dealing with the question of compulsion. It is no good attempting to shed any wish to compel people, for that is part of our modern system. In certain respects it is countenanced by Her Majesty's Government, as well as by ourselves. As my friend Lord Latham has pointed out, Her Majesty's Government only recently insisted on a compulsory scheme of superannuation for the teachers. I am not saying that they were right or wrong; but the point is that they made that decision and stick to it. It is not a Party issue, therefore, but a general principle that is coming.
Noble Lords not sitting at the present time on the Liberal Benches probably would disagree; but, putting them out of account. I believe that noble Lords on both sides of the House consider compulsion desirable in certain circumstances. I have no desire to compel every employer not to contract out. I believe that in practice it will be found that a great number will not contract out if the scheme is put into effect; and in course of time we shall find that those who do will fade away, as the friendly societies faded out of the other scheme.
There is one thing about which I do complain a little. Whenever anything is proposed from these Benches some people in different parts of the House (I am going to be rude) get up and say "Yah, inflation!" A great many of those who make that remark do not really know what inflation is, but they think it is a nasty poke at noble Lords on this side of the House. I am not saying that the noble Lord, Lord Beveridge, does not know what inflation is, for he does; and he made the charge. I do not think there is any noble Lord in this House who has taken a stronger line against inflation than I have—I have opposed inflation, ever since I began to understand economics; and I have taken as strong a view as anyone else that we should avoid it. But whatever we propose, a great many noble Lords opposite say that it will mean inflation. One noble Lord has said to-day that the Labour Government propose to put on new taxes, and that, in his opinion, that is inflationary; that wages may go up and that
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that is inflationary. Those noble Lords are not really working to the mark.
This scheme of the Labour Party, which I have not introduced hitherto because I feel it is not the issue at stake to-day, claims at any rate that it will produce a large surplus of money at the present time which will be available for the Government; and that, far from increasing inflation, it will produce the opposite effect. That is the claim and there is a great deal to be said for it. However, this is not the occasion to argue it out: it is much too elaborate a question, and there must be a proper consideration of what causes inflation and what does not. I do not want to make a Party issue of this matter, but since many noble Lords have done so I will say that I thought the noble Earl was fair in saying there has been inflation during both Governments, and that it was a mistake for the pot to call the kettle black. It was also a mistake for the kettle to call the pot black, as has been done from the other side.
There was a considerable rise of prices, some of which was inflationary, under the Labour Government, and there has been a considerable rise of prices under the present Government. One can call that inflationary if one likes. The fact is that the Labour Government had to face the extraordinarily difficult circumstances of the end of the war and the reemployment of all the people, which was something very difficult to tackle. In the second place, they had to tackle the Korean war, Indo-China and so on. They were faced with those difficulties and with a rise in prices all over the world.
The Conservative Government have had the benefit of two enormous drops in world prices, yet prices in this country have gone up. I will not argue that matter further, butt since that accusation has been thrown at noble Lords on this side I wanted to make that Party rejoinder to them. I will admit that it is a Party point, but I feel that I am entitled to make it. We say that our proposal is not inflationary, and I do not think it helps the matter at all to throw that accusation across the Floor at this side of the House, and I hope it will not be done. I attribute to the noble Earl a careful expression of opinion which avoided a charge of that kind, but I wanted to say that, because in my speech I aimed to look at the issue, so far as

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posssible, from a non-partisan point of view.
My Lords, I thank all who have taken pact in this debate. If we have performed any service in putting forward our view for the use of those who will take part in discussing the Bill when it comes on, and of Her Majesty's Government if
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they deign to take notice of our point of view, I shall feel glad that we have had this debate. Now, with great pleasure, I ask permission to withdraw my Motion.
Motion for Papers, by leave, withdrawn.
House adjourned at six minutes past seven o'clock.