Orders of the Day — Small Coal Mines (Operation)

– in the House of Commons at 12:00 am on 5th April 1960.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]

11.4 p.m.

Photo of Sir Rupert Speir Sir Rupert Speir , Hexham

I apologise to you, Mr. Deputy-Speaker, to the Minister and the House for raising yet another subject at this rather late hour. I realise that by so doing I have prevented you and other Members from going out of the Palace of Westminster and into St. James's Park to witness the fireworks display there. I fear that my own fireworks display will be very subdued by comparison, but I must make it clear that I nevertheless feel very strongly, as do many others, about the subject which I wish to raise. It is the subject of the issue and control by the National Coal Board of licences to operate small coal mines.

Many people who have nothing to do with the coal trade imagine that when the Socialist Government of 1945, in the full flush of victory, carried out their nationalisation of the coal industry, they nationalised the whole of the industry and destroyed any private enterprise in coal mining. In fact—and it is important to realise this—that was not the case. Even the Socialists, in their heyday of nationalisation, when they thought that nationalisation had come to stay, allowed the small mines, that is to say, small coal mines or small clay mines employing not more than 30 men, to continue to be private owned and operated.

Today, there are between 500 and 600 small privately owned and operated mines, employing about 8,000 men. These mines are scattered all over Britain, from the difficult and remote mountainous country of South Wales through the Midlands and North of England into the lowlands of Scotland. For the most part, these small mines are owned and operated by small men. By that I mean ordinary miners gifted with courage and initiative; men with an independent spirit; men whom, I should have thought, we would want to encourage and reward. They are men who, although small in numbers, are great in spirit and are the kind of people who have made Britain great.

Until recently things have been going reasonably well with these small mines, although they have had no subsidies from the Exchequer and no assistance from the taxpayer. Their number has grown since they wore allowed to remain in private hands under the 1946 Nationalisation Act. The Minister will remember that soon after he took office, in the autumn of last year, I warned him that I thought that the National Coal Board was not treating these small mines in a fair and reasonable manner. Since then a new situation has developed, particularly in the last few weeks, because, in the majority of cases, the licences to operate these mines came to an end at the end of March.

The terms and conditions which these small mines have been offered—perhaps I should say the terms which have been dictated, because they have scarcely been offered these terms—for the renewal of their licences would, if they had been accepted in the first instance, have meant the closure and death of dozens, if not hundreds, of these small mines.

I realise that it can be argued that because these small mines are so small; because their output by comparison with the Coal Board is infinitesimal—it is, in fact, less than 2 per cent. of the total production of the Board—they should be safely forgotten and ignored. Some people might even take the view that in these days of large nationalised industries and State monopolies these small mines are an anachronism which ought to be wiped out. I cannot accept that view, and it is not a view which would commend itself to the House or to the country if the full facts were known to all concerned.

I know that it may be suggested that since there is over-production of coal from all the mines in Britain today, and since the Coal Board is unable to pay its way and there are 30 million tons of coal stocked above ground, these small mines ought to be discouraged. It may be said that they ought to be prevented from adding to the difficulties of the Board. I can see that that is a debatable argument; it is a point of view which some people may possibly hold. I can understand people suggesting all that, although I cannot accept it myself.

People can argue that, because there is this problem of coal stocks, and because the Board is losing money and closing down a large number of pits which are uneconomic and unable to pay, the small mines, too, ought to close although they are economic pits; and I emphasise, economic pits. They must be economic because, otherwise, they would not stay in existence. They have no Treasury subsidy or support from the taxpayers.

Furthermore, it can be said that the small mines ought to bear the same reduction in output as is being borne by the Coal Board. That, too, seems a reasonable argument, but as a matter of fact, even if it were a fair cut all round, this would not be fair for a number of reasons to the small mines. But this is not the proposition which was put forward by the Board when it came forward with its revised plan for coal last autumn. It came forward, as I understand it, with the suggestion that production from the small mines, which last year amounted to about 2½ million tons, should be reduced this year to 2 million tons, and to 1½ million tons by 1962. That meant that, whereas the Coal Board, taking into account its reduction in opencast mining, was to make a reduction of 12 per cent. in output, the small mines would have to make a reduction of 40 per cent.

That was the first plan put forward and, in addition, it was said that there was to be an increase of royalty amounting in some cases to as much as 500 per cent. So I say straight away that I have heard no good reason why there should be such a vast increase in royalty payments and I would particularly welcome any enlightenment which the Minister might be able to give on that aspect of this matter.

Since that plan was first put forward certain negotiations have taken place; and I admit that they have led to an improved offer being made by the Coal Board. The Minister probably was largely responsible for this improvement; but even so, I cannot pretend that these latest proposals are satisfactory, or that the small mines are being offered a fair deal. They are still being asked to do more than that Coal Board mines in cutting production. The present proposals are that the small mines should cut their sales by 12 per cent. this year, but by 32 per cent. in 1962. That is based on the 1958 production, which will mean that the cut that is being asked from South Wales will amount to no less than 38 per cent. by 1962.

What would acceptance of these terms mean? First, it would undoubtedly mean, particularly concerning South Wales, the irretrievable loss of recent capital expenditure of some of the small mines, of which literally dozens have been opened up only in the last few years at the encouragement of the Coal Board.

Secondly, it would mean that dozens of small mines which now pay their way and earn their keep without any subsidy from the taxpayer would be bludgeoned out of existence and forcibly closed down, not by competition, but by the dictates of a great State monopoly.

Thirdly, it would mean that at a time when the Government and the Chancellor of the Exchequer are continually asking business and commerce to reduce prices, the Coal Board, by this policy of reducing the sales from the small mines, would be forcing the existing customers of those small mines to pay more for their coal. As, generally, the small mines are producing better coal than the Coal Board mines, it would mean, at the same time, that the customers of the small mines will get an inferior coal.

That is an extraordinary state of affairs in the 'sixties, at a time when we thought that we had got back to an opportunity Britain, at a time when we thought that Britain, in General Election after General Election, had demonstrated that it was "fed up" with nationalisation and wanted to see enterprise encouraged and rewarded.

Finally, since there is a national shortage of anthracite and since some of the small mines in the North of England, in Cumberland, produce anthracite, unless a special exception is made in the case of these mines there will be a forced curtailment of the supply of anthracite at a time when there is a national shortage of it. Therefore, when my right hon. Friend the Minister replies to this debate—I realise that for various reasons he must be guarded and circumspect in what he says—I hope that, at least, he will be able to deal with that aspect of the problem.

I shall also be grateful if my right hon. Friend will say something about the selling price not only of anthracite, but of all coal produced and sold by the small mines. Can he, for instance, give a clear and definite assurance that, whatever the Coal Board may do or say to the small mines, they will not be in any way discouraged or prevented from selling their coal just as cheaply as they think fit?

I realise that one or two other hon. Members may wish to intervene, and I do not want to detain the House much longer, but we are in an extraordinary position. I realise that this is a delicate moment. The so-called negotiations are still continuing. For my part, although my right hon. Friend may not agree with me, I think that a much more apt word than "negotiation" would be "dictation." I know, however, that some of the owners of these small mines are prepared to accept the Coal Board's offer. Others are reluctant to do so, and, frankly, I sympathise greatly with them in their dilemma. I have no doubt at all that they have justice on their side, but, unfortunately, they have not the power, the numbers, the influence, the money or the time.

I say to these small men that I cannot accept the responsibility of advising them to refuse the terms now suggested by the Board. In fact, I must reluctantly advise them to sign the new licences, as many small men have had to do in history, under duress. All I can do on behalf of the small men who are up against this vast State monopoly at this stage of the proceedings is to plead with the Minister to give an undertaking that if and when coal stocks are used up, and production equals consumption, he will see that the position of these small mines is reviewed and reconsidered. I plead with the Minister at least to give that undertaking.

11.21 p.m.

Photo of Mr William Blyton Mr William Blyton , Houghton-le-Spring

I intervene because I fundamentally disagree with the hon. Member for Hexham (Mr. Speir). He and I are good friends, but we are on entirely different platforms in this matter. I do not want, through my intervention, to prevent the Minister from replying to the hon. Member, but I am not quite certain what time the Adjournment debate began.

The small mine owners cannot continue to have the best of both worlds. They have had it for a long time. When the National Coal Board could not export because we needed the coal here the small mine owner was getting the benefit of the high prices in the export market. Now that the export market prices have fallen far below the internal price of coal, they are fighting to get as much as they can of the free market within the home market with a contracting mining industry. They cannot have the best of both worlds any longer.

The case made by the hon. Member for Hexham has been that of the small mine owners and not so much that of the men employed in the small mines. The National Union of Mineworkers refuses to support the small mine owners in their present agitation.

Photo of Sir Rupert Speir Sir Rupert Speir , Hexham

Is the hon. Member speaking as a member of the National Union of Mineworkers?

Photo of Mr William Blyton Mr William Blyton , Houghton-le-Spring

I can speak on behalf of the union. If a small mine is closed, the union will do what it usually does for its members, placing the displaced men in other collieries. Men in my consituency are having to go 10 to 12 miles to work because local collieries, to which thousands of pounds of capital expenditure has been devoted, have been closed —not uneconomic pits but pits with a life of only six to ten years in front of them.

We cannot, as we did last year, put 16 million tons of coal on the ground and let the small mine owners produce all they can and not accept their fair share of the contracting mining industry which is meeting competition from fuel oil and liquid methane. What does the Board say? "All you will do is take a fair share of the cut which the deep mines are facing between now and 1965." I did not hear the hon. Member for Hexham express one word of sympathy. Between now and 1965 we shall close 240 mines.

Photo of Mr William Blyton Mr William Blyton , Houghton-le-Spring

No. Not uneconomic pits. Pits with only six to ten years' life have to close down because we cannot find a market for coal. Not only are we facing that. We may face a further contraction, if oil eats still further into the home market and if liquid methane imports are increased. What the hon. Member for Hexham is arguing is that the little mine owners should have the field and that as many nationalised pits as we like should be closed, so long as the small mine owner has the field to himself. That is the kernel of the hon. Member's argument. We are not prepared to accept that position.

Do not let it be said that the Coal Board is trying to close the small mines. But they must take their share of the burden; they must take their share of the contraction of the mining industry. If that does not happen, more deep-mine pits will close.

11.26 p.m.

Photo of Hon. Richard Wood Hon. Richard Wood , Bridlington

I apologise for the absence of my hon. Friend the Parliamentary Secretary, who has recently been making a special study of this question. At the moment, he is in South Wales and has asked me to reply to this debate tonight.

What the hon. Member for Houghton-le-Spring (Mr. Blyton) has just said has shown this—although I suspect that my hon. Friend the Member for Hexham (Mr. Speir) was not entirely in agreement with his remarks—that the situation between the small mines, on the one side, and the National Coal Board on the other, is not, in fact, exactly comparable The suggestion that there can be a comparable cut has never seemed to me to be an accurate idea. There are the differences which the hon. Member has mentioned—the export position and the stocking position—and those are not exactly comparable.

Recently, there has been a great deal of interest in this question, and, as the House will be aware, a deputation from the Federation of Small Mines came to see me in February. As this was a matter for which the National Coal Board was responsible, I naturally communicated the views which the Federation expressed to me to the Chairman of the Coal Board.

I should like to contradict what my hon. Friend said about there being an absence of negotiations. Negotiations, as he knows, have restarted. The Coal Board has gone a long way to meet many of the objections of the Federation, and the House is most anxious, as I perceived very clearly at Question Time last week, to have a settlement. This issue at the moment, and, in fact, all the time, is one between the Board and the Federation, and I do not think that it is for me to discuss the details of the negotiations. I understand that there is a very good chance of a settlement. I was glad to hear what my hon. Friend said about not wishing to spoil the chances of a settlement. I think that a settlement will be reached which is acceptable to both sides, and I do not want to say anything tonight which will prejudice it.

I should like to take the opportunity, in the four minutes which are left to me, to answer one or two of the points raised by my hon. Friend. The present royalties were fixed ten years ago, when the primary consideration was to get the maximum coal production. Therefore, the fixing of an economic royalty was a secondary consideration. There has been a great deal of change between 1950 and 1960, and the Board felt that the 1950 criteria were no longer appropriate to 1960. Therefore, what the Board has done—whether my hon. Friend agrees or not—is to try to arrive at what it believes to be a fair economic royalty, bearing in mind, at the same time, the change in the price of coal between 1950 and 1960.

My hon. Friend asked for an undertaking about the ability of the small mines to sell as cheaply as possible. I understand that part of the discussions which are taking place have centred round an agreement, which I think the Federation is willing to reach with the Board, about the need of consultation between the Board and the Federation in the future if at any time the Board wishes to exercise control over prices. Except for the Scottish division, where there is a special agreement between the division and the local federation, the Coal Board has not operated any control over the selling prices of small mines.

My hon. Friend painted the picture in South Wales and elsewhere in, I think, very much too dark colours. First, if hardship threatens there is the possibility—and here I am on difficult ground, because I am only talking of possibilities which, I gather, are being discussed in the negotiations—of the divisional boards being able to suspend the limit on disposals of such scarce coals as anthracite and the possibility of the divisions being able to increase the limit up to 10 per cent. if exceptional hardship is likely to be caused by it.

I again contradict my hon. Friend when he suggests that the small mines have had to sign under duress. These discussions began in September and they were told clearly then that the Coal Board would have to limit the disposals when licences expired on 31st March.

The last thing which my hon. Friend asked was whether the Coal Board would be willing to review the position later if the demand for coal revived. I understand that after the early discussions with the Board the Federation decided to recommend acceptance of negotiated levels of output for the next three years.

I would certainly give my hon. Friend, on behalf of the Coal Board, an undertaking that the Board will keep the quotas under review in the light of changing demand. I believe that the Board has actually told the Federation that in those terms. I would like to put in my hon. Friend's mind the thought that these new licences which are being issued at present are being issued until 1970, and that, therefore, the licensed operators are assured if not of as large a quota as they would like, at least—unlike the Coal Board—of a minimum level of production for ten years. That, I think, is quite an important point.

I hope that I have shown that I am not unsympathetic to the problem of the small mines, but in the present condition of reduced demand I am quite convinced that they must be prepared to accept some restriction on their output. My hon. Friend, I think, agrees that the Coal Board has made considerable attempts to meet the Federation's point of view. I am quite convinced that the House urgently wants a settlement, and I am confidently hopeful that an agreement which will be mutually satisfactory to both sides will very soon be reached.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes to Twelve o'clock.