HC Deb 06 July 1920 vol 131 cc1251-2W

Major HENDERSON asked the President of the Board of Trade why, as coal merchants received compensation for losses on their stocks when the price was reduced in 1919, no steps were taken to ensure that the increase of 14s. 2d. a ton was not passed on to the consumer in so far as stocks in hand before May were concerned?

Mr. BRIDGEMAN: The circumstances which led to the Government giving an undertaking to compensate merchants for losses on their stocks held at the date of the reduction of the price of household coal by 10s. a ton in December, 1919, were exceptional. Owing to the notice which it was considered desirable to give of the prospective change in price, there was a considerable danger of the public and merchants withholding orders and thus causing a serious dislocation in the flow of coal. In the then existing state of supplies this would have been disastrous. In addition, the stocks held by merchants at the begnning of the winter are always larger than at any other period of the year, and had on the occasion mentioned been specially built up at the request of the Coal Controller in order to safeguard domestic supplies as much as possible during the winter months. It was, therefore, considered necessary to compensate merchants for coal in stock or in transit, but a condition was made that the Government should take into account the gain made by merchants at the time of the increase in price by 6s. a ton on all coal in the previous July, and also the amount by which stocks appreciated when the increase in railway rates (varying from 6d. to 2s. a ton on all coal) was effected in January, 1920.

When the last increase in price was made the position was entirely different. As I pointed out during the Debate which took place on the 12th May, stocks of coal were very low, as they usually are at the end of the winter, and there was little chance of the merchants exploiting the public. In addition, as was pointed out in the answer given to the hon. and gallant Member on the 30th June, the new prices are maximum prices, and not, as formerly, fixed prices, and no instructions were given by the Coal Mines Department to merchants to charge the new maximum prices as from the date when the increase became effective. On the other hand, in view of the low stocks and the fact that merchants had an abnormally large number of orders on hand at the date of the increase, it would have been impossible to insist on merchants meeting all their outstanding orders at the old price.

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