Coal Industry (Borrowing Powers)

Part of the debate – in the House of Commons at 12:00 am on 3rd December 1958.

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Photo of Mr Richard Glyn Mr Richard Glyn , North Dorset 12:00 am, 3rd December 1958

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 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 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 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.