On a point of order. As we are clearly three hours later than we expected to be in starting the Bill, which is an extremely important Measure, involving about £330 million, I wonder whether you would give me leave, Sir Eric, to move a Motion to report progress purely to elicit from the Minister how far he expects us to get in these very new circumstances.
Further to that point of order. I hope that we will be able to complete the Bill this evening—[HON. MEMBERS: "Oh."] It is, as the hon. Lady the Member for Finchley (Mrs. Thatcher) said, a very important Measure, involving a great deal of money and, under the National Coal Board, the management of an important industry at a crucial period. I t is, therefore, important that the Bill should be through before Christmas.
Even more important, it already involves, in its social provisions, payments to about 2,500 men. It would be a great tragedy if this Committee were unable—it applies to either side: I make no point of it—in an issue involving human considerations of this magnitude, to see the Bill through to the end, even if it means tomorrow, mid-day.
The complaint, justifiably, of my h on. Friend the Member for Finchley (Mrs. Thatcher) is that the House of Commons is once again being treated by this Administration with nothing short of insolence. I have a good deal of sympathy—
Order. We cannot have an irregular debate on points of order. Questions have been raised and answered under the guise of points of order for the benefit of the Committee to ascertain something with regard to the intentions about the proceedings of the Committee stage, but we cannot debate that matter in the guise of points of order.
—that matter is something which, I suggest, the Committee might well consider at a later stage, but it is most irregular to have a Motion to report progress in order to ascertain the Government's intentions at the outset of the Committee stage proceedings. The normal course is to allow the Committee stage to proceed for a time and then, perhaps, to ascertain what are the Government's intentions with regard to proceedings. We really cannot pursue this on points of order and it would not be in accordance with any precedent for me to accept a Motion to report progress at this stage.
I am on an entirely different point of order. It will be within your recollection, Sir Eric, that, on 19th July, the House sat through until 8.12 a.m. the following morning debating the affairs of the coal industry, due not to any filibustering on this side of the House or on the other side, but simply due to the mismanagement created by the Leader of the House in putting that Order—
I advised you, Sir Eric, that I was on a different point of order and the words which I uttered were merely a preamble. What I want to ask in one short sentence, is this: having regard to the notorious habits of the right hon. Gentleman, may we not have the Leader of the House here to rearrange business?
—because we are dealing here with major matters. I accept, of course, that it is no fault of his that another subject has been debated over the last three hours, but I say this to the Leader of the House. To ask the House of Commons to make the kind of precipitate progress which is demanded of it, to cover the Amendments on the Paper, is an exorbitant demand, and—
That is not terribly difficult.
I want to give a cordial welcome to the Leader of the House so that he may, in listening to my speech, gain some recognition of the immensity of the problems which we are discussing, and will be moved by the large residues of common sense which possess him to extend the time available.
I beg to move, Amendment No. 1, in page 1, line 10, leave out '£900,000,000' and insert '£850,000,000'.
This Amendment is very important. It seeks to give effect to the cry which my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), I and others have been making for many years. The general point of principle here—we do not feel that we are in any way unreasonable in pressing it again and again—is that the House of Commons should resume its erstwhile control over the country's financial resources and should not make them blindly over to the Government or to their creature, in this case the National Coal Board.
I do not intend to make a long speech on this Amendment, but there are two questions which I would ask hon. Members carefully to apply their minds to. First, how reliable are the forecasts on which past policy has been framed and, therefore, how reliable are the forecasts on which the provisions of the Bill are based? Second, how much confidence can we properly place in the National Coal Board?
On the first question, I would remind the Committee of various quotations from the mouths of Ministers. On 25th November, 1965, the right hon. Gentleman who is now Chancellor of the Duchy of Lancaster said, introducing a similar Bill:
… the provisions of the Bill are intended to provide the financial framework within which the industry can be healthy and viable.
He went on:
… it is necessary for the Coal Board to accelerate its policies for consolidating production in the economic pits and improving efficiency.
Later, he said:
I believe that, given the changes which we seek in the Bill, we will get a great viable industry which will maintain Britain as the most coal concentrated economy of any of the industrial nations."—[OFFICIAL REPORT, 25th November, 1965; Vol. 721, c. 779, 780, 793.]
None of these prophecies has come true. What has happened is that we have another, very similar Bill, and I am sure that I need not remind the Committee that the last operation was a financial one of some dimensions. It wrote off just over £400 million of the Coal Board's indebtedness.
Having heard those quotations, the Committee will he interested to hear what was said by the present Minister almost exactly two years later:
The measures outlined in the Bill are a deliberate distortion of the market trend to give coal the breathing space it needs to improve its competitive position …
What grounds does the Minister have for asking us to accept this assurance when such similar statements made by his right hon. Friend two years ago are now like torn-up paper about his feet? The present Minister also said:
But I am in no doubt at all that if we tell these men the truth"—
he can say that again—
and persuade society to meet the social consequences, the coal industry can enter the 'seventies in a sound position to play its part In future."—[OFFICIAL REPORT, 28th November, 1967; Vol. 755, c. 246–61.]
It is only fair to concede to the Minister that the forecast which he has given are not as rosy as those given by the Chancellor of the Duchy when he occupied his position. However, we are
more than justified in telling the Government that they have made these large and hopeful statements before. They introduced a massive financial measure to rescue the coal industry two years ago. That has not succeeded. Now they are back again and we find ourselves where we started, going through the same operation yet again. One wonders how the Minister can hold out well-founded hopes in these circumstances.
Indeed, it is worth while looking at the precise forecasts which the two right hon. Gentlemen gave in their turn. In November, 1965, the then Minister of Power said:
… I consider that it would not be prudent to count on a coal market in 1970 above the range of 170–180 million tons."—[OFFICIAL REPORT, 25th November, 1965; Vol. 721, c. 781.]
Two years later the present Minister had this to say:
With this extra help, coal demand in 1970 might be about 155 million tons, compared with total sales this year of 166 million tons".—[OFFICIAL REPORT, 28th November, 1967; Vol. 755, c. 252.]
The Committee will be in some difficulty in basing any conclusions on the forecasts which the Government now make, having in mind the fact that the forecasts of only two years ago have had to be so radically altered.
Is not the position even worse than my hon. Friend states? Is he aware that in the Prices and Incomes Report No. 12, published in February, 1966, it was indicated, even at that time, that the estimate was 170–180 million tons? Those figures were, therefore, given less than two years ago.
I am grateful to my hon. Friend, who has kindly drawn attention to the restraint with which I am approaching the matter. The Government's forecasts made less than two years ago have been so falsified that it is difficult for any hon. Member to take seriously the forecasts now being made.
How far is the House of Commons justified in placing further confidence in the Chairman of the National Coal Board and the Board which serves under him? Personally, I do not have that measure of confidence because for far too long Lord Robens pinned his faith—indeed, he nailed it to the mast—on the figure of 200 million tons. Although he had many opportunities to accept a more realistic figure, he adhered to that one, in my view disastrously for the coal industry.
Neither have I any confidence in diversification. In the N.C.B.'s Annual Report and Accounts I cannot find sufficient information about how the subsidiaries and diversified activities are progressing. We can he certain that the work done by the N.C.B. in producing smokeless fuels has been exceedingly expensive. The remarks—I will not weary the Committee by reciting them—in the Annual Report on the subject of home fires, room heat and so on are uninformative and lacking in candour.
The attitude of the Chairman to other fuel industries is profoundly unhelpful, particularly to gas and electricity, two industries which have given substantial help to coal in the past. The Chairman's conduct after the Aberfan disaster—
On a point of order. I am following the hon. Gentleman's line of argument attentively and I am not asleep this time. I am wondering when the hon. Gentleman will be asked to address his remarks to the Amendment. I cannot see any words in the Amendment about the Chairman of the N.C.B.
I am approaching this problem on two counts. The first is that the Government's forecasts are not sound and that they have been proved to be unsound in the past. The second is that I do not have the confidence in the Chairman of the N.C.B. and his Board that I feel we should have before reposing such financial powers and confidence in them.
I was referring to Aberfan. I do not wish to say anything about that terrible disaster, but I do wish to say something about the Chairman following it. I wish to briefly quote—
Further to that point of order. Is it not a fact that the N.C.B. is charged with important responsibilities for safety in connection with spoil heaps and that a part of the money to be voted under the Bill will be devoted to this purpose? Is not any reference to Aberfan therefore completely in order? [Interruption.]
Order. I hope that both hon. Gentlemen will leave matters of order to the Chair. I am listening carefully to the remarks of the hon. Member for Yeovil (Mr. Peyton). When or if he gets out of order, I will be quick to tell him so.
It must be unique in the history of hearings before courts or tribunals that a counsel should say of his principal client:
I invite the Tribunal to say that nothing in his evidence assisted the Tribunal at all and that the position is exactly the same as if he had given no evidence at all.
That does not fortify me with confidence in the Chairman or the Board.
Why, in the very tender situation in which the coal industry finds itself—with the anxieties felt by hundreds of thousands of men—did the Chairman see fit, just before the publication of the Government's White Paper, to say that there would be jobs for only 65,000 men by 1980? I hope that I do not embarrass the Minister by saying that I agree with him that no one can tell what will be happening in 1980 or how many jobs there will be.
That contribution of the Chairman was profoundly unhelpful. One is left with the unanswered question: why did he do what he did? I agree with the remarks of the hon. Member for Bolsover (Mr. Neal) on Second Reading, when he said that it was disastrous that this feud should exist between the Minister and the Chairman of the N.C.B. I profoundly agree with that comment, which was greatly restrained.
I have sought in these remarks to avoid using strong or excessive language. However. I do not believe that it would be right for the Committee, in dealing with sums of money of over £300 million, either to ignore the real difficulty of accurate forecasting and to fail to point out the danger of founding huge investments on forecasts which may prove to be wholly false within a couple of years. We must also point out that there are, and have been for some time, grounds for unease and lack of confidence in the N.C.B. I hope that none of my remarks will be taken in an unduly partisan sense, but I feel it right that I should have made them tonight.
It may or may not interest my colleagues on these benches to learn that I am strongly tempted to support the hon. Member for Yeovil (Mr. Peyton), though for reasons quite different from those he gave. I understand the hon. Gentleman, and I understand his opinions and the opinions of hon. Members opposite. Hon. Members opposite dislike nationalisation, they dislike the National Coal Board, and they obviously have very little enthusiasm for its Chairman.
On Second Reading last week, we debated, not this Bill but the White Paper. It was the White Paper that became the foundation for most of the arguments then adduced. I ventured to take a rather different line. I made a very short speech. It lasted only 13 minutes—it was, perhaps, the shortest speech in that debate. I did so because I was advised that as many hon. Members wished to address the House it was preferable that speeches should be rather briefer than usual. I make no promise on this occasion.
This is a very important Amendment. Indeed, it is the essence of the whole argument. If, for example, the Committee decided not to concede further borrowing powers to the National Coal Board, but to curtail those borrowing powers by several millions of pounds, as the Amendment proposes, it would affect the future of the coal mining industry. It might also affect the future of the Chairman of the National Coal Board. It is therefore an important Amendment, and upon our decision on it depend all the other Amendments: settle this Amendment, and the rest is comparatively easy to follow, to argue and to decide.
In last week's debate I ventured on behalf of my miner constituents—indeed, I had express instructions from them—to put a few questions to my right hon. Friend the Minister. In doing so, I remarked that I might not be able to stay to hear the Parliamentary Secretary's winding-up speech—which was to take place some time after 11 o'clock—but that I would read in the OFFICIAL REPORT what he had to say. I did so. And disappointed as I was during the debate at the line of argument adduced, at the irrelevancies—and, over and above all that, concerned as I was with the disappointment and frustration in the industry—I was even more disappointed when I read my hon. Friend's observations.
I submit, with respect, that I would be in order if I were to repeat very briefly the questions I put to my right hon. Friend on that occasion. I repeat that these were not my questions but questions addressed to me by the people who matter—the miners themselves; miners, living in a condition of insecurity and unaware of what was to happen.
My first question was: how many pit closures are likely to take place in 1968? That question obviously concerns miners not only in my constiuency but throughout the coalfields. Not a word was said in that debate about the possibility of further closures, and no answer was furnished by the Minister to my question. We are therefore still in the dark. We are unable to tell our miner constituents how many closures are likely to take place in the next 12 months—
Order. I am afraid that the right hon. Gentleman is turning an Amendment debate into a Second Reading debate. I must tell him that his remarks would be much more appropriate on an Amendment to Clause 2—which, in any case, deals with pit closures. I therefore hope that he will defer his remarks in that respect to that Amendment.
On a point of order, Mr. Irving. We are debating a Clause which deals with the extension of the Board's borrowing powers. The amount involved is an additional £200 million, and we are seeking to reduce that amount. Inherent in all these arguments is the length of time the money will last, and I say, with great respect to the Chair, that the right hon. Gentleman the Member for Easington (Mr. Shinwell) is only dealing with the important matter of how long the money will last. Surely that is in order.
The hon. Gentleman is incorrect in this respect, that we are dealing with an Amendment which, in effect, reduces the borrowing powers stipulated in the Clause. This limits the debate to the question of the reduction. It may be more appropriate to talk about the total borrowing powers on the Question "That the Clause stand part of the Bill", but the effect of the Amendment is to reduce the debate, rather than allow a stand-part debate.
How right you are, Mr. Irving. I naturally accept what you say.
I also asked the Minister what assurance he could provide of alternative employment before the closures took place. Is not that an important question? My miner colleagues here will agree that it is a most important question. The subject is on the lips of almost every miner who is afraid of redundancy. There was no answer to that, except to refer us to the Board of Trade but the Board of Trade did not take part in that debate. So we require another debate for that purpose. Unless I get a satisfactory answer, I am even prepared to vote against the provision of further borrowing powers for the National Coal Board, because in my judgment unless we can get satisfactory replies the Board does not deserve to be furnished with further borrowing powers.
Ever since the Coal Board was created—and I was responsible for its creation on behalf of the Attlee Cabinet when I was Minister of Fuel and Power—the Board has been seeking to modernise the coal mining industry. I am sure that I am within the knowledge of my miner colleagues when I say that hundreds of millions of pounds have been expended in modernisation. The most modern machinery, the most modern equipment and the most modern methods have been deployed at great expense, and many of the pits upon which vast sums of money have been expended for this purpose have been closed. I am not prepared to provide the Board with more money for modernisation for this purpose unless I have an assurance that these rapid—much too rapid—closures are to cease.
That is another point, but it would be completely out of order to discuss it. The question of spending money on modernisation is not out of order. I am very much concerned about providing Lord Robens and his colleagues on the Board with further borrowing powers, many more millions for modernisation, unless I have an assurance that the money will be used not only for the benefit of the country but also for the purpose of conferring certain social and industrial advantages on the men employed in the industry. I received no answer to the question I put on that occasion.
We also ought to know what the Board's intentions are. For what are they to use this money? I have suggested that the Board intends to use it for modernisation, but it may use it for some other reason. We ought to know what the reason is before we vote this money. In Second Reading a great deal was said about productivity, greater and higher productivity. No doubt many of these millions we are to vote for the Board will be used for the purpose of that form of modernisation which leads to higher productivity. I want an assurance that higher productivity, sometimes described as greater efficiency, should not cause greater unemployment among miners. These are very simple issues. These are the kind of questions which concern t he miners themselves. They are the kind of questions which are talked about in working men's clubs and at the street corner. We are entitled to have satisfactory assurances on these issues.
I refer to the nature of the answers I received during the Second Reading debate. I have no personal feeling against the Parliamentary Secretary, any more than I have against the Minister, but I was astounded when I read what he had said. I have heard a great many platitudes in this House and clichés galore, but this was the most classic example of clichés which I have read for a long time. I am almost afraid to read them out. I do not want to do the Parliamentary Secretary any harm, but some of these statements were in the form of jargon straight from the Civil Service.
This is the way civil servants talk, but I am quite satisfied that some of my miner friends in my constituency would describe this as Cockney jargon. I dislike this language intensely. I shall not bother to read it out for my colleagues can read it for themselves. If they go over that ground they will discover that not a single question relating to the conditions of the miners, their insecurity and their sentiments and how they feel, was answered. Perhaps that was not the fault of my hon. Friend. Perhaps he had nothing very satisfactory to say. If so, we shall have to go on asking these questions.
I do not want to proceed further on this line because I get into a bad temper over this business. Why not? I go to my constituency and I am accosted by miners at meetings and other functions and sometimes when I visit some of the working men's clubs. Oh, the language they use! I am certain that in this respectable assembly it would be completely out of order and quite unparliamentary.
My hon. Friend the Member for Ince (Mr. McGuire) suggests that if I used the language it would enliven the proceedings, but that is not my intention. I feel strongly about this matter, not only because of what my miner constituents say to me and the advice they give me, but because I have an idea of what the coal mining industry could produce and I am afraid of what might happen in future. I hope that my right hon. Friend in replying to this part of the debate will at least give one answer. That is an answer to the first question I put—how many pits are likely to be closed in the next 12 months? How many will be closed in the County of Durham, how many in the North-East and elsewhere, and in Wales—
—and in Scotland. We are entitled to know. Could we also have an assurance that before any pits are about to be closed the men will be consulted and have an opportunity of expressing themselves? I know that there have been consultations with the National Union of Mineworkers, but somehow that does not percolate down to pit level. The men are entitled to have some information about this because it affects their future. I do not want to proceed further. It may be that I have been slightly out of order; but it is sometimes worth while being out of order in this assembly to enable one to express one's sentiments and do a good turn for one's constituents. I hope that, as a result of what I have said, even if I have been somewhat harsh and aggressive in my expression, my right hon. Friend will make an effort to reply to the questions I have put.
I rise to support my hon. Friend the Member for Yeovil (Mr. Peyton) and I wish at once to allude to the speech by the Minister in introducing the Second Reading of the Bill. He said, as reported in column 249 of the OFFICIAL REPORT:
I am trying to make an uncontroversial speech."—[OFFICIAL REPORT, 28th November, 1967; Vol. 755, c. 249.]
Whoever heard of an uncontroversial speech on the coal industry? I shall not emulate, nor seek to emulate, the example of the right hon. Gentleman. I intend to make an intensely controversial speech, not necessarily in the same vein as the right hon. Member for Easington (Mr. Shinwell), though we have a good deal in common, about the future of coal mining in Britain and the use of coal as our basic indigenous fuel in preference to other alternative fuels, notably imported fuels.
I shall address myself, first, to the chronic inaccuracies of forecasting by the members of the Coal Board. Never in the history of national or international finance has there been such a disgraceful exhibition of miscalculation and wastage of the nation's finance as has been manifested by the Coal Board in the past three years.
The hon. Gentleman has had a serious lapse of memory. Private enterprise has made enormous miscalculations resulting in great damage to the public welfare. My immediate response was to mention Ferranti—and that is God's truth.
I shall not call in aid the Almighty, but I shall reply to the hon. Gentleman, and I hope that he will remain silent while I complete my argument. The Ferranti case involved £4 million, and it was a claim in respect of excess profits. My complaint against the Coal Board involves loss and wastage in excess of £100 million, 25 times as great as the alleged surplus or excess profits in the Ferranti case.
A moment or two, and then I shall give way. I always give way to the hon. Member for Bosworth. I wish to finish this part of my speech tracing the financial course of events since 1965 and the Coal Industry Act of that year. Under the 1965 Act, the borrowing powers of the Coal Board were set at a maximum of £750 million, being increased under that Act by approximately £250 million. The Minister then said that the additional borrowing powers would last the Board for all purposes until March, 1971. He now asks the Committee for more money in December, 1967. The degree of Ministerial error was 40 months, or three and one-third years.
The average businessman in private enterprise might make a mistake in calculation of capital expenditure equal, in chronological terms, to one month in budgeting one year ahead. But here is the Coal Board spending £250 million of additional borrowing provided under the 1965 Act by December, 1968, instead of by March, 1971. Am I guilty of hyperbole in suggesting that this is the most chronic and disastrous wastage of public funds which the House has ever witnessed?
I take it that the hon. Gentleman objects because he regards these losses as a sort of subsidy to the coal industry. Why does he not object similarly to the much larger subsidies paid to agriculture, and paid for precisely the same reason, to save imports? We do not want to import more foodstuffs than necessary, and we do not want to import too much fuel oil, do we?
I knew that the hon. Gentleman, who has ants in his pants, would jump in too early. He sits for a mining constituency. He ought to know the facts. He ought to be able to tell the miners in minute detail about the finances of their industry, but he is ignorant of the facts. Since 1965, until this year, there have been no losses on current account by the coal industry. The industry has been operating roughly on a basis of no profit and no loss.
Where has all the money gone? It has gone probably in the fashion shown by the right hon. Member for Easington, in pouring Good money after bad, into the modernisation of pits now to be shut down, into an industry which is declining very rapidly—too fast and too far, for my liking.
We are asked to put another £200 million into the industry. How long is this amount to last? It is to last for about 16 months. That is all. Perhaps, the Minister will confirm that when he replies. I see the Parliamentary Secretary nodding dissent. He has already been castigated by his right hon. Friend the Member for Easington, who spoke of clichés and unsatisfactory answers. I shall not add to the evidence given by the right hon. Gentleman, but there was no better example given in earlier rebates on the coal industry of the fashion in which the House of Commons is fobbed off by bureaucratic and inexact answers than the Parliamentary Secretary's answer on 18th July last to my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph).
At 8 o'clock in the morning, after an all-night sitting, my right hon. Friend intervened to say:
The Parliamentary Secretary has not dealt with the point that the Minister's predecessor, in November, 1965 expected that £750 million would last through to 1971. Is the hon. Gentleman saying that it is just the extra 12 million tons of stock which explains the change in the Minister's prediction?
To that the Parliamentary Secretary gave this grossly inconclusive and futile reply:
No. The point is that, if there is a different figure and a higher rate of run-down, as has occurred since 1965, that leads to greater expenditure over a shorter period. Without going onto detail, that is the general answer on that point."—[OFFICIAL REPORT, 18th July, 1967; Vol. 750, c. 2027–8.]
What in the name of glory does that means? Everything the hon. Gentleman said in his reply might have accounted for
a few million pounds, nothing like £200 million.
The Coal Board has been running at no profit and no loss for two years. Where has the £250 million gone which we voted two years ago, in the autumn of 1965? It has not gone into revenue account to offset losses. It is all hushed up in the accounts and not precisely accounted for, but I believe that the right hon. Member for Easington is nearer the truth.
I turn now to the future. I have expressed my lack of confidence in the financial budgeting of the Board. My lack of confidence in the Ministerial parent has always been manifest. Any Minister who says in a coal debate that he will make an uncontroversial speech destroys any vestige of confidence which I might have had in him.
The right hon. Member for Easington did not do his homework. Had he done so and read the White Paper, "Fuel Policy", in the great detail in which I read it he would have found in paragraph 131 a detailed account of what the sums of money in the Clause are to be devoted to in the next 16 months, which is the period of their expenditure. This is of the greatest importance if we are to economise in public funds. The paragraph says:
1. Outstanding long-term borrowings March, 1967 … £610 million".
£610 million. That is the cumulative long-term borrowing figure at the time of the presentation of the White Paper. It goes on:
2. Additional long-term borrowings 1967–68 … £90 million".
That makes it up to the £700 million the expenditure of which the Minister has virtually authorised already.
3. Provision for day-to-day and seasonal fluctuations in temporary borrowings for working capital … £70 million.
4 Net capital investment in collieries and ancillary activities"—
that is highly suspect—
in 1968–69 to 1970– … £60 million.
5. Additional coal stocks … £25 million.
6. Provision for deficits … £50 million.
7. All other contingencies … £45 million".
The Committee should give its attention to those last three items, which make up a total of £120 million out of the
additional sums to be voted under the Clause. Is it the Ministerial intention that coal stocks shall continue to rise unremittingly, through a further unsold surplus of coal? If so. the figure of £25 million budgeted in the White Paper divided by 100s. 7d. per ton, which is the 1967 average price of coal at the pit head, would account for an additional 5 million tons of undistributed stocks. As there are at present 28 million tons of undistributed stocks, the Coal Board is evidently budgeting for 33 million tons, to which must be added a further 20 million tons this autumn of distributed stocks, or a total of 53 million tons of coal unsold and unused at a given period. I suppose that that is in the next 12 months, which is approximately within the ambit of the financial provisions.
Is the Minister telling the Committee that during the next 16 months the Coal Board will lose £50 million? The Bill goes only 16 months forward According to the White Paper, there is provision for deficits of £50 million. Will the House of Commons countenance the Coal Board's losing money over the next 16 months like a drunken sailor? I believe that that remark is strictly in order and very appropriate, having regard to contemporary circumstance.
Only 1½ hours ago the Chancellor of the Exchequer was talking about our passing through a critical period; only a week ago the Government were calling for the utmost economy in public expenditure. This is public expenditure. Is the Committee to vote £50 million tonight for Coal Board losses in the next 16 months?
I hesitate to interrupt the hon. Gentleman in mid-flight. But I am not sure where he gets his 16-month point from. The Bill is perfectly clear that we are talking about March, 1971. What is possible is that in the meantime a Minister might come back for an extension of the order. I am sure that the hon. Gentleman would be the first to think it right and proper.
Sixteen months is nearer the truth. The Coal Board has run through £250 million in two years, with a declining industry. It is now proposed to continue to run the industry down at the same rate. If £250 million was lost in two years, the £200 million will last for about 16 months. It may be 20 months, but it will be roughly within that range. I do not accept that it will last until 1971. It was the Minister's predecessor who estimated in 1965 that the £250 million would last until 1971, and the Board is already out of money after just two years.
But the point I am trying to impress on the right hon. Member for Easington and all the coal-mining hon. Members opposite, who give general support to the Bill, that only £60 million of the £200 million is to be spent on genuine colliery improvements and increases in productivity and efficiency. Nearly all the remainder of the money is to finance additional stocks of coal, to finance losses by the Board, and for ancillary purposes, which is a pretty disgraceful state of affairs having regard to the dismal and inaccurate record of the Board in financial budgeting on earlier occasions.
I want to ask the Minister one or two more points before I leave the financial provisions. There can be no doubt that he is budgeting for an increase in coal stocks. At what point do we stop putting coal on the ground? At the end of the year there will be, say, 30 million tons of undistributed stocks. That is worth £160 million at book value and it is locked up capital. The coal cannot be sold in this country, and it goes on increasing. We have nothing but pious hopes from the Ministry that at some future, indeterminate date he may reduce these coal stocks.
In my Second Reading speech he pooh-poohed my peroration—[HON. MEMBERS: "Hear, hear."] I am sorry to be alliterative, but that is excellent alliteration. Repetition is to follow. [An HON. MEMBER: "Marvellous."] It is nice of the hon. Gentleman to say that I am marvellous. I want to finish this sentence. What is the Minister to do with all that coal? He cannot sell it in this country. I asked him what action was being taken to secure additional export markets. He pooh-poohed the question and said, "Oh, of course, immediately after devaluation a Coal Board team was despatched to Europe." Hon. Members opposite asked me if I did not know that coal contracts in Western Europe were long-term contracts. But none of the money under the Clause would be wanted if the liability of 160 million tons of coal stocks were eroded and finally liquidated.
How long is the coal to remain there? More pertinent, how long has much of it been there? Looking back over my records, I believe that 10 million tons has been lying on the same tips for many years—unsold, deteriorating, poor in quality and not worth the value in the books.
I wonder whether the Coal Board's accountants are compiling this figure at the lower cost or market value. I doubt it. None of the money under this Clause would be wanted if the Minister displayed some energy in the disposal of these excessive stocks of unsold coal and if it cannot be sold at market price my advice is simple and straightforward.
The Americans are putting coal into Europe today at under 100s. per ton c.i.f. We,t. European ports. It would be cheaper for this nation to "flog" 20 million tons of its unwanted coal on our tips to European customers at, say, 80s. a ton post-devaluation rather than keep it longer on the ground in this country against some future hypothetical demand for the coal.
Is not the hon. Gentleman aware that, in many European countries, the coal industries are faced with the same difficulties as we face here? Does he think that they would take kindly to the dumping of British coal at a time when they are trying to find jobs for their own miners?
The hon. Gentleman is naive if he believes that I have not looked up the answers to all these posers before I started. Of course the European coal mining countries have surpluses of bituminous coal but this year the Americans have landed in Western Europe 21·7 million tons of Coal from the United States.
No—under contracts mostly expiring by next May, some of them expiring in January and some in February. The hon. Member for Dearne Valley (Mr. Edwin Wainwright) scoffs at a Tory Member who is notoriously a friend of every coal miner in Britain. I cannot understand him. I am trying to demonstrate to him how to make the coal miner's job more secure by selling the products of his labour. The hon. Member scoffs at my salesmanship activities.
Does the hon. Gentleman realize—I am certain he does—that, when there were coal stocks under the Tory Government of 50 million tons, there were no sales on the Continent because of certain reasons, which he knows—that our industries did not want our coal to be Sold abroad at a cheap price to our competitors.
The hon. Member is talking the most drivelling rot. He does not understand the most elementary economics of the fuel and power industries. In the years in which the Tories held fairly high stocks, of about 20 million tons, it was in relation to a mining output in excess of 220 million tons. Under the present Government, 174 million tons were produced last year and 165 million tons this year. The Tory Party mined the coal. The Labour Party has let the coal miners down. I want to know the answer to the future of these stocks from the Minister, because my question is short, succinct and valid. None of the money under this Clause would be wanted if he dealt with the 160 million £s tied up today in surplus coal stocks.
I almost always agree with my hon. Friend, but on this occasion how could he justify selling coal to the Italian and German steel works at 80s, a ton when steel works in Scotland have to pay at present 130s, a ton? Why not have the experiment of selling more by lower prices here?
My hon. Friend reinforces my point. The Government would do far better to sell this surplus coal to Scottish steel works at a lower than cost price in contemporary circumstances rather than pay all the costs of keeping it in stock. I say to my hon. Friend that the Government would be far better advised financially to follow a policy of that sort than building advance factories in Scotland and the North-East which are not being occupied.
Before the hon. Gentleman bursts out in a cacophony of cackling, perhaps he will read on in my speech. I said, in the vernacular, "flog it". I will wager that there is not a coal miner in this Committee who does not know what "flog it" means. "Sell at the best price"—that is what "flog" means. Get 88s. per ton if you can; if not, get 80s. But even 80s. C.I.F. West European ports would be a far better return than leaving these 30 million tons of coal lying on the ground for an indefinite period ahead.
The right hon. Gentleman says, "Hear, hear." This is the nub of the Bill. Compensation to miners is not the nub of the Bill. The major part of the Bill is the borrowing powers and the Tories have views on finance as well as Labour Members sitting for mining constituencies. That magnificent writer on fuel and power economics, Mr. Christopher Tugendhat, energy editor of the Financial Times, wrote this morning:
The Central Electricity Generating Board has already been waiting for some time for a reply to its application to build a nuclear power station at Seaton Carew near Hartlepool, and there is no sign of an official announcement.
I want that power station to be fired by the coal produced in the Durham coalfield. I have proclaimed that loud and clear all over the country as the friend of the coal miners, however much it makes the hon. Member for Dearne Valley (Mr. Edwin Wainwright) writhe.
I say to the Minister that we have waited for long weary months while this controversy over the Seaton Carew power station has gone on. It will involve the Coal Board in a certain amount of capital expenditure if it is coal-fired. May we have an answer before the Bill leaves this House? Is the station to be coal-fired or nuclear-powered, because a part of the expenditure entailed, if it is a coal-fired will fall on the National Coal Board and, therefore, within the provisions of Clause 1? Will he give us an answer? If he will not give us an answer, perhaps he will say that he will not.
I must say that the contempt with which the right hon. Gentleman responds to the legitimate demands from the miners in Durham and the non-miners in South Worcestershire ought to bring the opprobrium of the House on his head. Were I a Minister responding to coal miners, I would try to understand their legitimate fears in present conditions and the greatest psychological blunder the right hon. Gentleman could make would be to build a nuclear power station on a major British coalfield. I hope that he does not, because coal would be far better for the purpose. I hope that he will give an answer to my question before the Bill leaves this House.
May I direct the hon. Gentleman's attention to Amendment No. 30, standing in my name and the names of some of my hon. Friends, which deals precisely with this question?
In Clause 6, page 4, line 11, at end insert:
Provided that the Minister may withhold permission for the construction of an electricity generating station using any fuel other than coal, and shall take into consideration the social and economic effects on a particular area or district caused by the reduction in the number of persons employed in the coal industry within a thirty mile radius of the site of the aforesaid electricity generating station.
I am grateful to the right hon. Gentleman, as always. I am not sure whether Amendment No. 30 has been selected but I will not trespass on your generosity, Sir Ronald. I see that you have become a little impatient with me. I merely respond by thanking the right hon. Member for Easington and I hope that we may be favoured by the selection at a propitious moment of that Amendment, so that we may discuss the question of this power station in greater depth and detail.
The hon. Member has been very patient and I am grateful to him for giving way again. I remind him that his name is on an Amendment seeking to reduce the borrowing power of the Board. Later, we are to deal with a Clause providing £45 million in subsidy to the Central Electricity Generating Board, other generating boards, and area gas boards for the use of coal where they would sooner use some other fuel. That is Clause 6. If the hon. Gentleman's suggestion is accepted and Seton Carew is a coal-fired station, the C.E.G.B. will require to be paid any difference in generating costs by the Minister and the £45 million we are to vote under Clause 6 will probably have to be doubled.
That is a spurious argument from Orpington. The short answer to Orpington is, of course, that, in the case of Seaton Carew, generating costs per kilowatt hour of electricity from a major coal-fired station using 500 megawatt turbo alternators would be cheaper than the use of nuclear fuel.
The hon. Gentleman continues to bawl, "Absolute nonsense" at me. He is entitled to his view. I profoundly believe to be true what I have said.
With those few comments of a preliminary nature, I will return later in our debates, after the Minister has answered seriatim each of the points I have put to him, I invite hon. Members on both sides of the Committee to join my hon. Friend the Member for Yeovil (Mr. Peyton) and myself in the Lobby if we do not obtain satisfaction. I want to know, in a time of extreme stringency in capital and finance, how this huge additional sum of £200 million is to be expended. Alternatively, I would bring the Minister back to the House for financial accountability earlier than 16 months ahead.
I shall not say, as I did last time, that it gives me great pleasure to follow the hon. Member for Worcestershire, South (Sir G. Nabarro). Listening to him and the hon. Member for Yeovil (Mr. Peyton), I was reminded of Evelyn Waugh's words:
When one is in politics one must inevitably associate with some frightful people.
Having listened to the hon. Member for Worcestershire, South make a speech based mainly on other people's interventions, those words have been more than confirmed for me.
I shall address myself to the Amendment and I warn the hon. Member for Worcestershire, South, the hon. Member for Yeovil and my right hon. Friend the Member for Easington (Mr. Shinwell) that if they want answers from the Minister then, judging by the way they have been talking this last hour and a half, they will perhaps have to wait until 5 a.m. to get them, because I hope that every one of my colleagues speaks on this wrecking Amendment. If we had done the same as those hon. Members—so-called—in the last debate, and read the Minister's reply in HANSARD next day instead of waiting to hear it, the Bill would not have had a Second Reading. It would have been counted out by the Tories.
We stuck it, and if they are prepared to stick it until one o'clock tomorrow afternoon, so shall we in the miners' group. If they want the answers, they will have to stay with Tom Swain, M.P. and the other members of the miners' group until we have finished debating the Clause. If they like, they can do what they did on Second Reading and go home when they have made their speeches and leave the "slaves" to carry on the debate.
I hope that the Committee will reject the Amendment out of hand. It is clearly a wrecking Amendment.
I wish that hon. Members who disagree would get up and do so instead of mumbling like a crocodile with the toothache.
All I regret about the Clause is that the total figure is not higher. If it is reduced by £50 million, as the Amendment suggests, the Coal Board's total liability will be spread over a smaller number of pits, which will mean more money in the long term to finance the liabilities. I wish that the Minister had categorically told the House that the Government would write off a tremendous amount of the Board's capital liability. My right hon. Friend who is now the Chancellor of the Duchy of Lancaster wrote off £415 million in 1965. Assuming a gradual decline in mining, the benefit of that £415 million write-off would have been considerable, but circumstances and events beyond the control of Lord Robens or anybody else overtook the industry.
I must applaud Lord Robens for the magnificent case which he put up in his effort to substantiate the argument that the industry could be fully viable. Incidentally, his estimates of manpower and tonnage in mining in 1980 were no wilder or more ridiculous than the estimates of the Government of the hon. Member for Yeovil in 1955, when they said that the industry should produce 240 million tons by 1970. The industry's capital liabilities today are as heavy as they are as a consequence of its capitalisation to produce 240 million tons under the terms of reference given to it by Tory Ministers of the time.
The industry is still suffering from the effects of that over-capitalisation and of the forecasts of the Tory Government in 1959, or as expounded in the "Plan for Coal" of 1955. They were hopelessly wrong to the tune of nearly 60 million tons of coal. Hon. Members opposite criticise Lord Robens, but he only did the sums from the figures provided by his teacher, and if the teacher is to criticise the pupil for arriving at the wrong equations from the teacher's figures, I wonder where we are getting.
The hon. Member for Worcestershire, South made his hypocritical statements about being the friend of the miners. As I have said before—God shield me from my friends if he is one of them. Our old friend "Cross-bencher" will have two more allies to link up in his column on Sunday, my right hon. Friend the Member for Easington and the hon. Member for Worcestershire, South. What a team to go to bat on!
I am glad my right hon. Friend has interjected. We called on the other miners not to bring pressure on the Government, but to make a commonsense case to the Government to explain why the title of the White Paper should be altered, and my right hon. Friend's constituents have had as much pleasure from the results of those negotiations as have those of North-East Derbyshire or any other mining constituencies.
My right hon. Friend has mentioned the closed shop on other occasions. In the mining group we are a closed shop. We have put down many Amendments and I hope that my hon. Friends will speak to them. The miners group's discussions are independent because we are not inhibited by the language of university dons; we do not suffer from the inconsistencies of the economists; our brains do not have to undergo the clinical diagnoses of the doctors and we do not have to sit and listen to the lectures of the teachers whose job mainly was to put sums on the board for kiddies after someone else had provided the answers. Occasionally, we have had to suffer the interferences of junior Ministers, but they are necessary and we have been able to tolerate them at most times. I am glad that we are an independent group.
Other wrecking Amendments are suggested, but this, as the hon. Member for Worcestershire, South said, is the nub of the whole argument. Without the total amount provided by Clause 1, the Coal Board cannot operate its proper fuel policy. That is why there is such an attempt to wreck the Clause. Our Amendments would be useless if by any mischance this Amendment were carried. I appeal to my hon. Friends, when at about three o'clock in the morning the Division is called, to troop through the Lobby and give the hon. Member for Worcestershire, South the biggest tab dusting he has had in his life.
The speech of the hon. Member for Derbyshire, North-East (Mr. Swain) was one of the most unfortunate of the evening. This has been a useful and constructive debate so far and in describing this as a wrecking Amendment the hon. Gentleman was extremely unfair to my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) and my hon. Friend the Member for Yeovil (Mr. Peyton) who made serious and constructive contributions.
There was only one thing on which I agreed with the hon. Gentleman.
The hon. Gentleman referred to those who are to be slaves this evening. It is unfortunate that we should have to discuss this matter so late, because it may not be possible to give these issues the consideration which they deserve. I know that the Minister specialises in late nights. I remember that we had a few of them on the Steel Bill when we had a Parliamentary Secretary falling asleep. I am sure that the present Parliamentary Secretary will not do that, but we ought not to discuss these important matters at so late an hour.
Every speaker so far has referred to £200 million of additional borrowing power. If it were only £200 million, my hon. Friends and I would still object to such an amount without the normal discipline of returning to the House, but a careful reading of the White Paper shows the figure to be more than £200 million. This is made clear on page 52 when the White Paper shows that the Coal Board is nearing the statutory limit of £750 million because of seasonal circumstances. Obviously, stocks fluctuate and to that extent borrowing powers or limits fluctuate. If we take a limit of £750 million at a time of the year when stocks are extremely high for seasonal reasons, asking for a further £200 million is to that extent asking for a little more leeway.
But that apart, from our experience of the Coal Board we know that to give £200 million borrowing powers to take the Board up to 1971 is allowing far too much leeway. It would be utter madness at this time, and I emphasise "time". The hon. Member for Derbyshire, North-East gave the impression that we were trying to curtail the industry's necessary capital investment, but that is not our invention. We do not want to provide a blank cheque for capital investment and borrowing powers when so many of the Board's decisions and estimates have proved to be wrong or inaccurate.
I was influenced a great deal by Report No. 12 of the Prices and Incomes Board. Hon. Members may have reservations about the Incomes Board and its rôle in fixing wages and determining wage policies, but we can all agree that its reports have been of a high quality. Certainly Report No. 12 on coal prices is extremely interesting.
Paragraphs 62 and 63 of that Report say some alarming and damaging things about the Coal Board. It talks about its investment policy and says in effect that terrible mistakes have been made, wonder whether it is wise for us to give complete freedom on borrowing powers up till 1971 when we see what actually happened in the years which are referred to.
I think the hon. Gentleman will remember that I made a speech on the same Report. He should tell the Committee that that Report demonstrates that it costs more to distribute coal than to produce it.
The point which the hon. Member has made is correct, and the final conclusion of the Report is that there should be an inquiry into distribution prices.
On the question of borrowing powers, I wonder whether it is wise to give such substantial borrowing powers when we see the record of investment outlined in paragraph 62:
First, investment has proved excessive in relation to market demand.
When it talks about the estimates it says:
These have proved to be over-estimates. By basing its estimates on present prices and costs the Coal Board has failed to make due allowance for the changing competitive position of coal. The industry, as a result, has been faced with a burden of depreciation and other fixed costs higher than the market warranted.
It also mentions:
In order to secure a better control over investment in the future we consider that the
Government should assume greater responsibility for identifying and examining more critically the vital assumptions on which the forecasts of yield on new investment are based and should equip itself technically to do this.
I know that the Minister has made some very real attempts to get more information. Probably one of the difficulties that we have had in the coal industry is that we have not had all the information.
When we are considering borrowing powers, surely one thing which the House should do is to make sure that from time to time we have an opportunity to review the situation in the coal industry, to review investment policy, and see just how accurate are the estimates which have been made. Quite frankly, if we are to give what amounts to a blank cheque on borrowing powers up to 1971, even if this estimate is accurate—[Interruption.]—know that my hon. Friend has stated his opinion, and I respect his opinion, because he is usually right. In fact, his record of making estimates has been extremely accurate.
Even if we assume on this one occasion that the Government's estimate be right, are we going to give them this carte blanche up to 1971?
Mention is also made in this Report of the Board's estimates about 1970. This was published in February, 1966. It says that the result will not be as the Board hoped at 200 million tons, but probably 170 to 180 million tons. When we consider 170 to 180 million tons being mentioned in February, 1966, and then we have the Government coming along with a White Paper in which they say they are doing the coal industry a favour in trying to get to 155 million tons, I think it is crystal clear that the estimates which have been made have been based on wrong assumptions or have been very wild or else perhaps have been deliberately optimistic on the part of the Coal Board and have been unnecessarily accepted by the Minister.
When the hon. Gentleman makes reference to a Labour Government, will he bear in mind that we were all led astray—including the hon. Member for Worcestershire, South (Sir G. Nabarro)—during the early 1950s, when we were controlled by a Conservative Government. We were led to believe that we should consume 250 million tons of coal by 1965. One can well understand the reason why the Coal Board to some extent has been led astray by such a Government over the period of 13 years.
I was here in 1952 and 1953, the period to which the hon. Member for Normanton (Mr. Albert Roberts) is referring. That was before nuclear energy and before the oil programme launched by my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd). The 250 million tons that the hon. Member for Normanton is referring to is 250 million tons of coal equivalent estimated, not bituminous coal.
I am grateful to my hon. Friend for helping me out. When we have had such major technical developments in nuclear power and also in oil-fired stations, it is unfair to say that estimates should be entirely accurate. Even if we said that this figure of 250 million tons had proved to be wrong, surely it is an even greater error to move from 200 million tons three years ago to 180 tons in February, 1966, and then to a White Paper talking about 155 million tons, as though this was some kind of major advance.
I would suggest that this record does not necessarily prove that we have idiots in the Coal Board or in the Ministry of Power. It shows two things: first, that estimates are very difficult indeed to make, and, secondly, that all our estimates in the past have proved to be wrong and perhaps disastrously so. In these circumstances, is it not utter madness for the Government to suggest that we should now lay down our policies up to 1971, or at least give the Board borrowing powers until then? Surely what is required are frequent, if not constant reviews, and I suggest that the Government would be wiser to give the additional borrowing powers—
Would not the hon. Gentleman agree with his hon. Friend the Member for Louth (Sir C. Osborne) and other of his colleagues who have congratulated the Chairman of the Board on his forecast, and have criticised the Government for not making more money available for the social consequences of it?
My hon. Friend takes a great interest in this industry, and when he makes estimates they usually prove to be correct, but I think the point that he was making was that it was as well to make realistic estimates in future, if it was possible to do so. My point is that I doubt whether such realistic estimates can be made, and for this reason it is important that we should regularly review the position.
I am a relatively new Member, but it occurs to me that one of the few opportunities which we get of discussing the affairs of the coal industry is when we are presented with Orders dealing with increased borrowing powers. Days are set aside to discuss the nationalised industries, but there are only a few such days, and not all of them are devoted to discussing, the coal industry. This proposal gives us an opportunity to review the situation in the coal industry from time to time. Would hon. Gentlemen opposite be satisfied to know that if the Government's estimate was right we might be deprived of an opportunity to discuss the position of the coal industry some years ahead?
There are other questions which need to be answered. For example, is it wise to give borrowing powers up to 1971. If the Government's forecast is right, and if many major questions of policy will have to be determined in the future? My hon. Friend the Member for Worcestershire, South touched upon one which is very important to Scotland, namely, the pricing policy of the coal industry. How can we in the House have any control over pricing policy, and the fundamental principles involved in it, if we do not have frequent opportunities to consider the borrowing powers of the industry?
I was surprised to hear my hon. Friend talking about the possibility of selling coal at 80s. or 88s. a ton. The steel works of Scotland have to pay 133s. 6d. per ton for coking coal. I suggest that the Minister should consider the possibility of having a uniform price for coal throughout the country, to see what effect this would have on coal consumption. The Government are doing what they think is best to encourage regional development, but the plain fact is that the differential in fuel prices is a real ball and chain around the Scottish economy, and that of other areas, too.
In Yorkshire, coking coal can be bought for 100s. a ton, whereas, as I have said, in Scotland we pay 133s. 6d. for it. It is therefore clear that our heavy industry starts at a real disadvantage. Even in Wales such coal can be bought at about 115s. a ton. The effect of this increased cost is felt throughout the whole of Scottish industry. Our electricity board has to pay £1 a ton more for its coal than is paid by the English board, and this has a major effect on the price of electricity in Scotland. The Report of the Scottish Gas Board, published only a few weeks ago, said that the additional charge cost it £300,000. This is the kind of fundamental policy on which we in this Committee should have an opportunity of expressing an opinion.
Does not the hon. Gentleman realise that the position would be worse if we were to depend on nuclear power? Hunterston A is costing an enormous amount. Would not the position be worse if the pits were to be closed as a result of not giving them the amount of money which we intend to give under the Bill?
I agree with the hon. Gentleman about Hunterston A, which has proved to be slightly disastrous from the point of view of cost. We look for better things from Hunterston B when it comes along. But the point is that in Scotland we have this terrible problem of differential prices. We should like an opportunity to consider the matter from time to time by discussing the Orders on increased borrowing.
I do not want hon. Members to think that the intention of those who put forward the Amendment is to restrict necessary capital expenditure by the coal industry. That is certainly not our intention, and my hon. Friend the Member for Yeovil made it absolutely clear. All that we are concerned to have is an opportunity from time to time to review the progress and the capital spending of the coal industry. If we sanction this vast sum of £200 million, which could mean a three or four years' delay, we will not have that opportunity. I know that the hon. Member for Ince (Mr. McGuire) takes a great interest in power matters. It should be in his interest to ensure that we have the opportunity to review progress from time to time. That is extremely necessary, and I hope that it will happen.
As the right hon. Member for Easing-ton (Mr. Shinwell) said, this is not only a problem of big business but a very human problem. We have the difficulties with the National Union of Mineworkers. From what I have seen and heard, this is a good union as unions go. But the problem is keeping in touch with the average person who is affected by closures. If a man's job is affected, clearly it is right that the Government should be able to give real assurances.
This brings us back to the question of borrowing powers. Would the Minister tell us, if we do not accept the Amendment, precisely when we shall have an opportunity to debate the progress of the coal industry to see whether all the wonderful estimates prove to be correct? It would be in the interests of the industry and of democracy if we did not give such large increases in borrowing but gave, as we suggest, £50 million less. If I had tabled the Amendment, the sum would have been much smaller.
We must regularly review progress in the coal industry and not consider it once every three or four years. For that reason, I hope that the Amendment will be accepted. I wish to make it clear that those who put it forward do not intend to restrict capital investment if it can be proved to be necessary, helpful and in the national interest. It would, however, be utter folly to give such complete carte blanche for so many years as is provided for in the Clause. I hope that the Minister will accept the Amendment.
I agree with the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) on one point, namely, that it should be a regular feature of out Parliamentary year that one day a year we debate the National Coal Board and the coal industry. That is a point which we have made several times before. However, I could hardly agree with the hon. Gentleman's remark that this had been a useful and interesting debate until my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) came in. I am wondering whether Radio 4 is being piped through to the microphones of hon. Members opposite and that we cannot hear it.
There is some formality coming into our debates on the coal industry concerning the Members who will be called and the order in which they will be called. They are not pre-ordained, but at least there is a certain amount of predetermination. If we were betting Members on this side of the Committee as against those on the benches opposite, we would say that the hon. Member for Yeovil (Mr. Peyton) would get up, more in sorrow than in anger, and make a bitter complaint about the time at which the debate was being held, as he did tonight, and that he would send out a cry for the Leader of the House and that shortly afterwards my right hon. Friend would arrive, as he did tonight.
I hope that the hon. Gentleman will understand that I am not responsible for this state of affairs. The reactions which I very modestly put forward were caused entirely by the conduct of the Leader of the House. I am sorry that the hon. Gentleman has not the perspicacity to see that.
I am saying that precisely this happens. Despite what the hon. Member for Cathcart said, the debate has followed its normal pattern. Whether it is 11 o'clock on a Friday morning or two o'clock on a Tuesday night, there is a cry for the Leader of the House, and eventually we get around to the subject of the debate. The hon. Member for Yeovil has made a number of personal attacks and is present to hear my criticism of him. Still ignoring his Amendment, he makes a bitter attack on the Chairman of the Coal Board and gives one-tenth of his time to his Amendment. He has failed tonight to convince me that it would be worthwhile to reduce the expenditure.
Then the debate progresses from Yeovil to Worcestershire, South. I congratulate the hon. Member for Worcestershire, South (Sir G. Nabarro) on his knowledge of the industry. Basically, he is friendly to the miners, and I agree with him on several points. I congratulate him on his ability to catch the eye of the Chair—this is no criticism of the occupant—and particularly on his timing, because to make a major speech on this or any other Bill at this time is the best way to catch the next day's papers, but I am doubtful about his points—
The hon. Member seems to have failed to observe that it was only because Mr. Speaker accepted the Adjournment of the House yesterday under Standing Order No. 9 that the debate began at 7 o'clock. Otherwise, it would have begun at 3.30, which would have allowed me to catch the evening papers as a result of my Parliamentary perspicacity and that of my hon. Friend the Member for Yeovil (Mr. Peyton) in filling, the Notice Paper with Amendments before North-East Derbyshire could get a look in.
We agree on the timing, but I still wonder what the hon. Gentleman's speeches would be like at one or two o'clock in the morning.
On two points, I agree with the hon. Member—
On the point of the Amendment, which is to remove the borrowing powers, the hon. Gentleman said something with which I agree—that there are greater possibilities for exporting to Europe than before, not only because of devaluation but because of the dropping of contracts. My conclusion from this, however, is the opposite of his. He regards it as a possible way of reducing the burden but I see it as an opportunity, and the money would be needed just as much.
I disagree, however, with the suggestion that it should be possible to reduce the sum involved by selling existing coal stocks for less than cost. The hon. Member for Cathcart referred to the price in Scotland, but he must accept that, if we are to sell to Scotland at a reduced price coal now lying on the ground in England the only effect would be to reduce the output of Scottish mines and thus replace one set of coal at less than cost with another set. If the hon. Member has thought out what he suggests, he will realise that it would result in more rather than less unemployment in Scottish mines—
On many occasions, the hon. Member for Cathcart has asked me to give way and I intend to do so this time, but not at the beck and call of any hon. Member, no matter where he sits. The hon. Member for Worcestershire, South was asked several times to give way and did not always do so immediately. I will give way to the hon. Member for Cathcart, but in my time and not in the time of the hon. Member for Weston-super-Mare (Mr. Webster).
Would the hon. Gentleman not agree that I was suggesting that we should try to get uniform prices throughout the country and that the effect of this on consumption would help Scottish industry and should be welcome, instead of having differential prices, and that this would mean a slightly lower price in Scotland although a slightly higher one in Yorkshire?
This might be considered, but the hon. Gentleman's point related to selling off coal more cheaply, which would only close down Scottish coal mines.
I understand that Amendments Nos. 45 and 46 are not called. They were posted to the House from the North-West last Thursday and it is not my fault that they are not on the Notice Paper. This is no criticism of the Table. They arrived on Saturday and were not in time to be considered for selection—
Some varied points have been made. I regret that I was not able to speak on Second Reading. We are talking of a sum comparable to half that spent on nationalising the steel industry, which will be spent between now and 1971 or in the next 16 months. In fact, it is a blank cheque, unless we or some other mechanism check that it will be borrowed and then spent wisely.
I had hoped to move the Amendment it my name to provide that the increased sum shall only be dispersed on the coal mining activities of the Board, but that Amendment has not been called. Had I been able to speak on Second Reading, as I wished, I would have raised points which I raised two years ago in the debates on the 1965 Coal Industry Act. Since then many disturbing things have happened. We should not take part in a debate of this type without bearing in mind the earlier debate that took up our time for about three hours.
Mr. Schweitzer, the O.E.C.D. and the I.M.F. are concerned about how we in this country spend our money, particularly in the public sector. Assurances will be required that this money is being spent to create wealth and not merely as a means of extending Socialisation. This is particularly relevant today compared with even two years ago, when I advocated the need for a cheap energy policy. I was greatly relieved to read on page 38 of the White Paper that this policy has been accepted by the Minister. It is as necessary now for our industries as it was then because unless we follow this policy our industries will not be able to compete in export markets.
Two years ago I queried whether the business objective of the N.C.B. was rightly solely to win, gain and mine coal as efficiently as possible and to concentrate on that task. When debating the 1965 Act on the coal industry—and I advise hon. Members to refer to the Committee proceedings on that Measure—I supported a move to delete the provision which is now Section 1(2,c) for acquiring an undertaking or part of an undertaking. We had considerable dis- cussions on the topic and I would now like to know how much of the money that has already been loaned to the N.C.B. has been spent on activities which are not primarily concerned with winning, gaining and mining coal.
We have debated the subject of devaluation and the discussion that has taken place for the I.M.F. Ioan. On 30th November the Paris correspondent of the Financial Times reported:
The United Kingdom claim that the inflationary effects of higher State spending can he offset by increased taxation"—
This had not assured a number of delegates—
But another factor in their reserve was probably the widesperad belief on the Continent that the present Government is overtaxing the private sector to support its public programmes.
Bearing this in mind, it is wrong to have this debate and discuss the future of miners and mines without elevating it into the wider context of the economy. During the past three years the State has become heavily involved in a variety of trading activities, activities which, two or three years ago, would probably have been considered not to be any business of State organisations and nationalised industries. If we are not careful these activities may jeopardise the very bread and butter that feeds us.
From time to time the boards of nationalised industries must go cap in hand to the Treasury for increased borrowing powers. At present, these increased powers may enable these State Organisations to compete unfairly with people who are already in business. We must, therefore, carefully watch this aspect of the problem.
Hon. Members on both sides of the Committee have shared the view that the N.C.B., in a declining industry, should have power to diversify. Hon. Members might consider it wrong to dispute whether or not this money should be spent in that way. However, if diversification is to take place, it must occur under the same rules that the private sector must obey, otherwise State organisations will be competing unfairly.
A number of smaller matters must be raised in a debate of this kind. I looked, without success, through the N.C.B.'s Annual Report and Accounts in the hope of finding a reference to the decision to install a new electric arc furnace at the Tredomen Engineering Works. But the Minister has answered Questions about this. Some hon. Members—except those who represent Welsh constituencies—will wonder what this subject has to do with the debate. I looked on pages 26 and 27 of the N.C.B.'s annual Report and Accounts, but could find no reference to these engineering works.
Thus, on Thursday, 22nd March, I asked a series of Questions of the Parliamentary Secretary. One was about annual capacity and output. The Parliamentary Secretary replied that he had asked the Chairman of the Board to write to me giving me whatever information he could. I received a letter from the Chairman of the N.C.B. and I have been able to release the information contained in it to the Press. It is the sort of information that those judging the affairs of the N.C.B. would not normally be able to acquire. An hon. Member may ask for it and the Minister may arrange for him to receive it. The yearly output of the Tredomen works is of the order of 1,200, 1,300, sometimes 1,400 tons. Hon. Members may ask, "What is that?" but the amount of steel castings sold ouside is increasing. What evidence have we of the capital going to this works? There is a fair profit on steel foundry activities in engineering, and this works gives a fair measure of what can be achieved in this field.
On 4th April, I asked the Parliamentary Secretary if he would consider selling this particular activity. Off the cuff, in the House, he said "Certainly not", but this is something that should be looked at. If the Board is to come to the House for increased sums for its activities—
As this works is situated in my constituency, and was established long before the coal industry was nationalised, and as it is now being used to test cast supplies for the Coal Board and is a place where pilot schemes can be run to test the cost of production and the prices of various supplies, I should have thought that it was doing a first-class job of getting value for money for the Board.
I thank the right hon. Gentleman for that interruption—he knows my interest in the matter—and perhaps tonight he will make a speech advising us what capital is employed, what the turnover is and whether or not the whole engineering works is making a profit corresponding to the target set by the White Paper for these nationalised industries. If we can have the assurance that that is so, without having to probe and probe again, everyone will be satisfied, and if the works is providing employment in the right hon. Gentleman's area, it is to be welcomed. Perhaps he will make his contribution later, and let the House know more about this important activity.
The hon. Gentleman is asking me to make a speech. If he asks questions he must have an answer. The answer is that I do not regard this Chamber as the right place to get accountability of the detailed operations of any nationalised industry. I should have thought that the right place was in the Specialist Committees, which the officers concerned can be requested to attend, and be examined as to the details. Our general debates in the House seldom achieve anything.
I am glad that the right hon. Gentleman has raised that point, because I wanted to deal with the value of our Specialist Committees. I do not want to decry the work of the Select Committee on Nationalised Industries, but if he reads page iii of the Select Committee's Second Report he will find that the Committee deals with 14 nationalised industries. It states:
There is, therefore, liable to be a long interval between the Sessions in which it is possible to examine the Report and Accounts of any one industry. Your Committee, therefore, decided this Session to invite the Chairmen of certain industries, whose Reports and Accounts have not recently been examined, to appear before them …
It points out that the coal industry was examined in 1958 and 1962.
We had a meeting at which Lord Robens of Woldingham, Chairman of the National Coal Board, appeared, attended by a Mr. R. G. C. Cowe. I was not present at the meeting, but I imagine that it took one morning—one morning has constituted close examination by the House of the activities of the Board. That Report was published on 16th February, 1966, before the last General Election. Perhaps the Select Committee on Nationalised Industries is giving more attention to the Coal Board's activities, but this House has no mechanism for examining in detail the blank cheque that is offered time and time again.
The right hon. Gentleman must realise this, because those who are lending money to the country at present realise that although we have the mechanism for increasing the activities of the public sector we are completely incapable of controlling the activities of Chairmen and Boards, and it is the taxpayers who find that it is their standard of living which is at stake. So, while the right hon. Gentleman's interruption in a case like this is welcome, it is only a small episode in what we have to deal with.
Clearly, the hon. Member feels strongly on this point and he has made a major factor of it. This is a criticism which has been made from time to time in the past. I think that it can be argued that there is quite a lot of information on the Board's diversified activities in the 1966–67 accounts. As a result of the strong views expressed, with which I have some sympathy, I have arranged that where the Board owns half or more of the capital, the accounts should be placed in the Library.
I am obliged to the Minister. This is referred to, I believe, in one of the Reports, but we might have some difficulty about this particular factory, because I think that it comes under the heading of a maintenance shop and not of a wholly-owned or other subsidiary.
I have dealt with one small issue, but the importance of this matter rests on the fact that the Minister of Power and other Ministers are now responsible for over 10 per cent. of the steel foundry industry in competition with the private sector. Are not the activities over which the Minister has control or discipline using finance, some of which will be provided under the borrowing powers to provide unfair competition? We discussed it on the Steel Bill and I do not wish to pursue this particular issue.
I must apologise for taking rather more time than I had intended, but I must go on to the question of the brick industry. In Vol. 1 of the Report of Accounts there is a report on the manufacture of bricks. It is a very illuminating report, occupying two pages. We learn that the brick activities of the Coal Board made a loss of £492,000 before charging interest against a profit in the previous year of £93,000. Reference is made to the Whittlesea Central Brick Company. We learn that a changing sales policy in the market is aimed at moving from output of non-Fletton bricks to a more balanced output of facing bricks as well as the Fletton and non-Fletton bricks. There, obviously, the Board is in competition with some of the big brick producers. There is reference to Throckley, in Northumberland, and Desford, in Leicestershire. The Coal Board is the second largest brick manufacturer in the country.
I remind the Committee of a Question asked by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) on 12th April. My hon. Friend
asked the Minister of Power why the Brickworks Division of the National Coal Board paid £132,000 interest on £2,200,000 capital in 1964–65, but only £92,000 interest on £2,400,000 capital in 1965–66.
The reply by the Parliamentary Secretary was:
I am informed by the Board that the interest charged to the Brickworks Division in 1965–66 reflected the reduction in the Board's total interest liability following capital reconstruction."—[OFFICIAL REPORT, 12th April, 1967; Vol. 744, c. 216.]
So some of the effects of the 1965 Act were to write down the capital of activities in competition with the private sector. This, I suggest, is a reason why we should examine how the money we vote on these occasions is spent. This is one of the aspects of the unfair competition with the private sector.
In the 1967 accounts the capital is £789 million whereas two years before it was £1,150 million which again shows the effects of previous legislation. The diversified activities of the Coal Board are such that we must be assured that if any of this money—perhaps £45 million mentioned by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) or perhaps a lower figure stated in the White Paper—is not spent on buying up other activities which have nothing to do with coal mining. We must be assured that money so spent is not devalued to provide the Coal Board and other nationalised industries with opportunities for setting up in unfair competition against the private sector.
It is time that the House had an assurance that the top management of the Coal Board had decided whether it was in business to gain coal. Is it not time that the Coal Board decided that its sole object is to rationalise its activities so that it did what it is supposed to do efficiently and effectively? The private sector is subjected to exactly this discipline. There is the Industrial Reorganisation Corporation. If the private sector does not of its own volition rationalise its activities, there is an organisation to ensure chat it does. Will the Minister discuss—
It is not a Second Reading debate. We are not discussing all the activities of the Coal Board. The debate is limited to borrowing powers and, therefore, an argument about relations with the private sector, which the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) was developing, is out of order.
I shall bring my remarks on this matter to a close, Sir Eric. We must have an assurance that money borrowed under this Clause is spent in the right way, namely, in coal mining and the activities connected therewith and not on a lot of other ancillary activities. The Minister might well consider establishing a nationalised industries reorganisation corporation—perhaps he will discuss it in t he Cabinet—to ensure that this money is spent where it is needed, on the coal mines, and that the Coal Board and other nationalised industries divest themselves of activities which are a drain on the public purse and a threat to the private sector.
I agree that there is a problem in establishing the correct rate at which our mines should be closed, but, before we vote the money here provided for, we should have an assurance that there is a better mechanism for vetting the Coal Board's activities. Accountants should report to us on how the money is being spent, and on how money has been spent in the past. Without sufficient assurances, it would be wrong to vote for the additional sum proposed by the Government. At the most, it should be a lower figure. The Coal Board and the other nationalised industries should have their activities properly vetted.
Admittedly, much of the money which it is proposed to borrow would go to help the miners. Those who face redundancy and insecurity have the compassion of all of us. But let us not forget that the money is provided by the taxpayer, and the nation is in severe economic straits. If the money is provided by taxpayers, it must come from wage and salary earners in other industries.
I doubt that the Minister has any proper mechanism available to him to show whether sums spent in the pact have been spent wisely or whether this money will be spent wisely. I doubt that the chairman of the Coal Board has such a mechanism, either. For these reasons, I support the Amendment.
The hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) suggests that we should probe the finances of the National Coal Board, even in the past, so that we may have some idea whether to approve the borrowing powers now proposed. It has been a wide-ranging debate and, among other topics, I hope to say a word about that. I was rather surprised to hear the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) bring in the subject of coal distribution during a discussion on the whole question of costs.
It is rather ironic to realise, when the whole efficacy of nationalisation is challenged, that in the main private enterprise distributes coal. Yet it costs more to distribute it than to produce it, and therefore I do not know the logic in the argument about nationalisation when we are discussing the provision of money. That argument does not fill me with enthusiasm for going over to private enterprise or some other method as a way to begin to save money.
It is important that the Committee should probe, and like my right hon. Friend the Member for Easington (Mr. Shinwell) I have a number of questions to ask my right hon. Friend the Minister. I do not intend to be as dogmatic as some hon. Members opposite and some of my hon. Friends. It is important that we give due consideration to the spending of the money, particularly in view of devaluation; I believe that that is relevant to our being about to vote money to the National Coal Board.
When we think about bankers and money, it is interesting to recall what I think Mark Twain said, that a banker is a man who lends you an umbrella when the weather is fair, and takes it away from you when it rains. That may well be the predicament we are in.
I should like to put some suggestions to my right hon. Friend which may help the Committee in deciding whether to approve the borrowing powers. On 20th November we discovered that quite a lot of money was paid out by the Board as compensation to former owners of coal mines. The hon. Member for Sheffield, Hallam said that we must probe into the past to find out whether the money had been spent wisely, and it may interest the hon. Member for Glasgow, Cathcart to know that the amount paid in compensation for vested assets in Scotland was £35,951,068. That is an awful lot of money, and we are entitled to ask if it is right and proper that it should have been given to the private owners. It was suggested by the hon. Member for Worcestershire, South (Sir G. Nabarro) that we must carefully examine the Board's finances, be careful about how we spend money and make sure who has spent it.
I should like to know how the Coal Board spent money in payment to private owners. Did they deserve it? We understand that many of the collieries were handed over for a sum based on "unforeseen profits". But we also know that some of those collieries never made a penny of profit. Some of them were closed, but I understand that the owners were paid "unforeseen profits" all the same. I am not a financial expert, but I know that the miners question whether that money should have been paid. Is there any more to pay? Do the people who get it, deserve it? When they get it, where do they invest it? Do they invest in industries ancillary to mining or in industries antagonistic to mining? These are important questions.
It would be parochial of me merely to concentrate on compensation paid in Scotland. We have the information here. In South Wales, the position is worse; there, over £36 million has been paid in compensation. I wonder whether my right hon. Friend will address himself to this vital problem. It might be possible for us to save some money here. Perhaps it would not be necessary to vote the sum under this Bill if we could save some money in compensation—even reclaim some of it. If we did, I am sure that the hon. Member for Worcestershire, South would be in accord with me because he made searching observations in relation to financing.
Compensation in Kent has totalled nearly £2 million; in Somerset over £984,000; in the Forest of Dean over £942,000. Thus we have a valid case to examine. We are entitled to ask whether there is any more to pay and whether some of it could come back. In Yorkshire, there is a staggering total of nearly £67 million; in South Staffordshire and East Worcestershire over £1·4 million; in North Staffordshire, £8½ million; in Cannock Chase, £7½ million; in Leicestershire about £4¾ million. These figures are catastrophic. I hope that my right hon. Friend the Minister of Power will listen because this is important. We are dealing with money which we could perhaps save. In Nottinghamshire it is over £29¼ million.
I am not a financial wizard—I have not been in the House long enough to know who has got this money. But I worked in the pit 30 years before coming here and I speak with great authority in saying that the miners resent all this payment in compensation and they are entitled to, particularly when we get arguments against nationalisation. Indeed, we get arguments about the productivity value of miners in relation to their work. They are entitled to resent this.
I have more figures. In South Derbyshire, the total is over £4 million; in North Derbyshire, over £22 million and in Yorkshire, as I have said it is nearly £67 million. Something should be done and I hope that my right hon. Friend will try and bring some of this money back. In North Wales it is nearly £2¾ million; in Lancashire and Cheshire, nearly £40½ million; in Cumberland it is over £1,600 million, in Durham, it is £41½ million and in Northumberland over £17¼ million. If we are talking in terms of finance, those figures are relevant. I do not suggest that every hon. Member will share my enthusiasm for the proposition that we should get some of this money back.
My right hon. Friend the Member for Easington made a very good speech, although I know that it probably did not please m any hon. Members opposite.
My right hon. Friend made some strong observations I should like to be associated with. One of the arguments always advanced by my right hon. Friend the Minister of Power is that we must consider this Bill in conjunction with the White Paper. The argument for the White Paper is that we must know the size of the problem in order to be able to do something about it. We are told that we must know the social problems attendant on the contraction of the mining industry so that we can do something about them. That is a fair proposition and I would not quarrel with it.
But it is difficult to know the problem in my constituency or for my right hon. Friend the Member for Easington to know it in his constituency when we do not know how many pits are to close. I was urged to support the White Paper. I put down Questions asking what the problem would be in my constituency, and my right hon. Friend could not tell me. How can we plan for problems attendant on the contraction of the in- dustry if my right hon. Friend cannot tell me what they are? It is time that this information was forthcoming. It is no good my right hon. Friend saying that we can expect a contraction in the mining industry of X number of people. Only when we know the areas and the locations shall we be able to plan for the future. I appeal to my right hon. Friend to provide this important information.
When we discuss the costs of the rundown, I hope that hon. Members opposite will remember the policy which they pursued from 1966 onwards. I have charged my right hon. Friend with culpability in connection with gas production. It is clear that right hon. Gentlemen opposite have an equal culpability in connection with the Magnox programme, the first nuclear power programme. Hon. Gentlemen opposite have said that we must consider our resources carefully, but we might not have had this problem if they had given proper attention to the operation of the Magnox programme where the misapplication of money was nearly a misappropriation of public funds. While it is true that that programme will result in the generation of electricity, the coal industry would not now be facing its present financial problems if hon. Members opposite had given more thought to it, for production in the mining industry would have been much greater. I hope that my right hon. Friend can provide satisfactory answers to all these questions.
The hon. Member for Midlothian (Mr. Eadie) will not expect me to agree with his remarks about the Magnox programme which was extremely valuable to the country because of certain consequences which flowed from it, in particular, the provision of large quantities of plutonium which will be available when the fast reactors come into commission in the mid-1970s and which we would otherwise not possess.
Nuclear power is far less susceptible to the effects of inflation than is conventional electricity generation where the running costs are much more important than capital costs. For example, according to a paper by Sir Ronald Edwards, the last increase in the price of coal on 1st April, 1966, added more than £30 million to the costs of the electricity supply industry.
I should be extremely surprised, if over the lifetime of the stations now being constructed, that was the last occasion on which coal prices had to be increased, whereas over the next 20 years one certainly hopes that the cost of uranium in nuclear power stations will remain much as it is and, even if there are price increases, they will have much less effect on the overall costs of generation, because they do not represent such a large proportion of costs.
The hon. Gentleman mentioned the compensation paid on nationalisation, but he will find that there is no mention of those figures in the accounts of the Coal Board, because they were paid out 20 years ago and are no longer relevant. It may have been because undoubtedly large amounts were paid in compensation that we had to reconstruct the Board's finances two years ago and write off about £400 million from the accumulated deficit, but that cannot be used as an argument for retaining the borrowing limits provided in the Bill and for rejecting the Amendments. The hon. Gentleman is too late to say that the finances of the Board could have been helped by clawing back something from those who received compensation.
The argument that the Coal Board's affairs should be scrutinised by the House well this side of March, 1971, is valid. Whatever one thinks about the future of mining, whether it should be larger or smaller, I would have thought that that proposition would command general agreement, whether or not one takes the view of the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) that we should subject the Board's ancillary activities to much more scrutiny. I do not think that that is particularly important when the accounts show only £3½ million invested in those ancillary undertakings at the end of last year. I hope that some of the ancillary activities will be increased, particularly investment in North Sea gas which I expect to be an extremely profitable investment for the Board, one which will help to reduce the amount which the Board would otherwise need to borrow.
This was the opinion of the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd), a former Minister of Power, who, in the debate in 1965, com- mended the Board for its enterprise in branching out into exploring for North Sea gas. But, nevertheless, I should like to be assured that we shall have an opportunity of looking at the progress which the Coal Board has made, in conjunction with its partners, in the exploration of the North Sea gas some time in the next couple of years. This is the reason why I am supporting the Amendment. It is not because I want to limit or constrain the Coal Board within impossible limits so that it could not meet its commitments over the next few years, but because I think that we are entitled to have a look at the progress which is being made towards the objective set out in the White Paper.
The hon. Member for Hallam made some comments on the Select Committee on Nationalised Industries. He said that in the last couple of years only once has the Chairman of the Coal Board given evidence before that Committee, that this was for a single morning, and that during that time that Committee could not possibly probe all the details that the hon. Gentleman would have liked it to go into, such as the affairs of the Whittlesea Brick Company, and so on.
I have a certain amount of sympathy with him on this point, although I do not agree with the opinion once exspressed by the hon. Member for Worcestershire, South (Sir G. Nabarro) that the Select Committee on Nationalised Industries was a febrile and vacuous body. With the enormous number of nationalised undertakings that that Committee has to investigate, it is asking too much for it to do the job of the House and thoroughly probe the affairs of the Coal Board and make reports at intervals of sufficient frequency to give us a picture of what is happening.
I would draw the Minister's attention to one of the recommendations of the Select Committee on Science and Technology: that the House should have a special Select Committee, perhaps staffed by experts, to look at the energy industries of this country on a continuous basis. I think that if we had set up a Select Committee of that nature it would not have been necessary to have the argument which has occupied so much of the time of the Committee this evening. It is essential, to my mind, that the energy industries, which are so important to our economy—the coal industry, the electricity supply industry and the gas undertakings—should be subjected to continuous scrutiny.
This can only be done by the establishment of a specialist committee for the job and not at the very infrequent intervals when the Committee or the House of Commons as a whole manages to get around to it. Meanwhile, as we have not got such a Select Committee in existence. I think that the only answer is for us to grant an increase in the borrowing powers of the Coal Board of such a dimension that will ensure that the Minister has to come hack to the House with another Bill well before 1971.
Looking at the developments which have taken place, even the forecasts which have been presented by the Minister in his present White Paper may be falsified. We have heard a lot of discussion about how wrong previous estimates were. The Ridley Committee, which was set up under the Tory Government, predicted 240 million tons output in 1962. However, this was not the only forecast that was hopelessly wrong when the time came to examine it in the light of actual experience. It may well be that we have not yet seen the ultimate effect of North Sea gas on the National Coal Board. We cannot make a judgment upon this unless we know what price the Gas Council is to pay for this gas and, therefore, how much it will eat into the traditional markets of the coal industry.
We can look at the figures in the White Paper of the amount of coal equivalent which may be consumed in the form of gas by 1975, but we cannot evaluate the Minister's forecasts unless we know how the price of this gas will compare with coal in the intervening period. We know that nuclear energy is coming down in price as each successive station is built. Even with Dungeness B it is already 10 per cent. cheaper than the best coal-fired station in the country.
The hon. Gentleman says "Not true", but I suggest that he looks at one of the appendices to the Report of the Select Committee on Science and Technology where not only are figures set out which were arrived at by the Minister of Power's Working Party, but also the subsequent report of a group, including representatives of the Coal Board, which went through those figures with a fine tooth comb. The representatives of the Coal Board on that Committee agreed with the Working Party's figures, although Lord Robens subsequently tried to repudiate them.
s: Does not the hon. Gentleman know that the C.E.G.B.'s estimate of the cost of nuclear energy at Dungeness B, which is to come into existence three years from now, is only one-hundredth of a penny better than at Cottam, and that this does not take into account the effect of devaluation which will increase the price of imported uranium. There is no advantage at all.
I do not agree with the hon. Gentleman that devaluation will increase the price of uranium, because we have substantial stocks of it. It will not affect the enrichment costs, because this will be undertaken by the Atomic Energy Authority at its Capenhurst works. The hon. Gentleman may try to adjust the figures, as Lord Robens does, but he cannot get out of this. There is a 10 per cent. differential between the first of the advanced gas-cooled reactors and the best coal-fired stations coming into operation at the same date.
If he looks further ahead, to Hinkley Point B Station, and Hunterston B, to which the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) referred, he will see that costs are coming down to about 0·45d. per kilowatt hour. According to the Chairman of the South of Scotland Electricity Board, this represents a difference of not 10 per cent., but 30 per cent., compared with the cost of coal-fired stations which will be coming into operation at the same time, because, as the hon. Member for Cathcart said, the cost of coal in Scotland is 34s. 10d. more per ton than that from the cheapest coalfields in England.
I think the hon. Gentleman will agree that we write off coal-powered stations after 30 years, whereas the period of amortisation for nuclear stations is 20 years. This means a 10 per cent. difference in the cost per kilowatt hour.
The hon. Gentleman is right, but I have never understood why the C.E.G.B. adopts rules which are unfavourable to nuclear power. This is not the only one. There are other ways in which it is possible to compare the cost of nuclear power and conventional power. If the same ground rules were applied to nuclear power as to conventional power, the differential in favour of nuclear power would be very much greater than it is already.
I suggest to hon. Gentlemen opposite, and to hon. Members like the hon. Member for Worcestershire, South (Sir G. Nabarro), that they should not try to sustain the consumption of coal at some predetermined level by artificial means. The hon. Member for Cathcart suggested that there should be the same price for coal all over the United Kingdom. Somebody will have to pay for that, and we are already facing a large bill in this Measure before us, due to the increase in the borrowing powers, the amount which we are subsequently going to vote under other Clauses, the subsidy to the electricity undertakings and gas boards for the consumption of coal as opposed to some alternative fuel, and so on.
If these suggestions are accepted, somebody will have to pay for them, and no doubt it will be the taxpayer. People will then say, "You are increasing public expense beyond all reason" and the hon. Member for Cathcart, the hon. Member for Worcestershire, South, and others, will criticise the Government for that. I daresay that after this afternoon we might find that the I.M.F. will have something to say about it as well. They say that the growth of public expenditure must be controlled within certain limits, and this is part of the price that the Government are having to pay for a very large loan.
If the suggestion that fresh subsidies be given to the coal industry were accepted, not only would these borrowing limits have to be increased still further, but some very difficult explanations would have to be given to the I.M.F.
Even in terms of Adam Smith economics, this is a complete heresy. The argument which the hon. Gentleman is putting forward—and I am astonished that, as a Liberal, he can put it forward—surely amounts to this. He is completely forgetting that this country has 200 years known supplies of coal, the greatest single economic asset which it posseses. The hon. Gentleman's argument completely ignores that. One cannot just wipe it off and say that it does not affect the price of other things. I have heard much hostile criticism about the phoneyness or suspect nature of the statistics put forward by the Coal Board. The statistics being put forward by the North Sea gas and atomic energy people are extremely suspect.
I accept that, according to Lord Robens's figures, we have 200 years' supply of coal under our feet at the present rate of consumption. But that does not mean that it is worth using it if it costs so much more than alternative sources of energy. The hon. Gentleman might just as well say, "Let us go back to burning wood in the locomotives because there are plenty of trees in the country. We are not making use of this very important national asset but are merely letting it grow and accumulate uselessly in our forests."
That is the logic of his argument—that simply because we have a natural asset it is wasteful not to use it. His economics are fallacious. If we can produce natural gas from the North Sea or electricity from nuclear energy at very much cheaper rates than we can produce the equivalent from coal, it is worth making use of these alternative sources of energy.
As long as the hon. Gentleman and his hon. Friends try to sustain the consumption of coal at a predetermined level and try to sustain employment at 380,000, or whatever the figure is, they will not tackle the real job with this Minister, and that is how to provide alternative employment for the miners being displaced from their existing jobs and how to pump new industries into the areas affected, not only into the development areas but into Yorkshire and parts of England which are not at present in development areas.
These are the important problems which the hon. Gentleman and mining Members and the National Union of Mineworkers are neglecting. If they would cease preaching the maintenance by artificial means of the coal industry at a given level and started to attack the Minister for his failure to provide jobs in the mining areas and to give adequate assistance to industry going to those areas, they would do their jobs much better than they are doing them.
We have had a very long debate on the first Clause of a very important Bill. It is right that it should have been a big debate because, as the hon. Member for Worcestershire, South (Sir G. Nabarro), with his characteristic Victorian elegance, said, this is the guts of the entire Bill. It is right that we should have had a more wide-ranging debate than will be the case on any of the other Clauses.
The hon. Member for Orpington (Mr. Lubbock) made a number of points and took full advantage of the width of the Clause. He ranged around the needs of an energy board, which is not covered in the Bill, and which I would be prepared to debate and disagree violently upon at any time. He also mentioned nuclear power and it is significant that whatever decisions were taken about power stations, whether nuclear or coal-fired, they could not come on stream or have any effect until long after the Bill expires, so are not relevant.
The hon. Member for Yeovil (Mr. Peyton), who normally "kicks off" on these occasions, asked how reliable are the forecasts on which this proposition is based. It is beyond dispute that forecasts of coal production and consumption have always been wrong in the past and in the same direction. They have always been over-optimistic. This is a danger not merely in terms of managing, but, far more than that, because much of the human suffering in the industry has resulted from the failure to recognise the size of the social problem in time. We have always considered a level of output and demand which was comforting at the time but never achieved—
My right hon. Friend has repeated this proposition—it is on a tape, I think—about the size of the problem. How can he, in the Bill, deal with the size of the problem when he consistently answers my hon. Friends that he does not know and cannot forecast the size of the problem in their industries?
I intend to come to this point later, because it also follows on some of the questions of my right hon. Friend the Member for Easington (Mr. Shinwell), to whom I apologise for the fact that he did not get answers before.
This is important, because no one knows what will happen in the industry. There is no claim that the White Paper produces the final solution. It is the result of 18 months' work to find the best possible global estimate. In 1970, I think, we are likely to be fairly close to the truth, about 1975 I am less certain, and it is nonsense to estimate about 1980, because no one knows what equipment the industry will have or what other factors will apply. So the hon. Member for Yeovil—this is probably the last time that we will agree: I hope so—is right to cast these doubts. I have never pretended that the figures is the White Paper are more than the best estimate that we can make with the available sophisticated techniques.
Therefore, we are recognising what is happening in the industry and saying that it is too rapid. That is why we come to the Committee tonight for further legislation of this type, because to prevent the rate of rundown and to minimise some of the social hardships which will result, society has to pay the bill. This bill is not just on investment for equipment, but is part of a large exercise intended to slow down what would otherwise be the rate of contraction in the industry and thereby minimise some of the social consequences.
There has been much discussion about diversified activities. It is right that the Committee should concern itself with the spending of public money, particularly sums as large as this, and I think that the House of Commons will be asked again to look at the industry. No one would suggest that the Board's diversified activities are in themselves a central issue. It worries some and is a source of query, which is why I think it right to say that we have agreed that copies of the accounts of companies in which the Board owns half or more of the equity will in future be placed in the Library for hon. Members to consult.
It would be a great pity—here I take issue with the hon. Member for Yeovil—to use the Bill as a vehicle for doctrinal arguments about private enterprise and diversification, paying off old scores against the Lord Robenses or any other individuals in the industry—
I assure the right hon. Gentleman that I am not paying off any old scores nor indulging in doctrinal arguments. I am simply concerned that the nation's resources, which are at the moment not overflowing, should be decently safeguarded by the House of Commons, and nothing else.
I realise, on reflection, that my reference to old scores could have meen misconstrued and I apologise. I meant that there is no point in turning this into an argument about personalities. Whoever headed the Coal Board would face one of the biggest managerial and social problems of any industrial management.
Reference is sometimes made to our colleagues across the Channel, who are doing a grand job, but who, in every European country—perhaps with the exception of the Poles—face problems in coal mining. The Coal Board is handling its problems more efficiently and humanely than any other country with problems of this size. When there are arguments about nationalisation, no hon. Member on either side has the faintest doubt what would have happened to this industry in these circumstances under private enterprise. It would have ceased to be profitable under private enterprise in large blocks of the country years ago if it ceased to be profitable under the Coal Board.
The difference with private enterprise, now that the coal industry is under central control, is that it is possible to approach this with a central direction and inject into the problem more than a straight and rather squalid argument about whether something does or does not pay. This argument must be taken into the equasion and cannot be ignored. It enables us, with the system of public ownership which we have in this industry, to approach it with a degree of efficiency and humanity which I again say is better than the system existing in most other countries with similar problems. Ask the coal miners of the Ruhr whether they find their privately owned coal industry a particularly attractive proposition.
I am interested to hear my right hon. Friend's remarks about the humane treatment, more or less, being given to coal miners who are knocked out of work, compared with the treatment that they would have received under private enterprise. This may be true in some cases, but I urge my right hon. Friend to consider the position in West Stirlingshire, where 14 pits have been closed during the last six or seven years. What humane treatment has been meted out to the miners who have lost their jobs in my constituency.
I am not for the moment pretending that the present position does not involve, and has not involved for years, enormous hardships and enormous social problems for large numbers of our people.
The Bill—this is of vital importance to the people I represent—does not seem to provide very much for the miners who are knocked out of work in my constituency. Any advantage that will accrue will occur from the time of the passage of the Bill. What about the miners who have been knocked out of work in the last two or three years? What compensation will they get?
I would be trespassing upon the rules of order if I were to try to deal with this and similar matters. My hon. Friend will have a chance to raise this issue on a subsequent Clause. The Bill sets out to provide the first basis, following the White Paper, to tackle this problem. A lot more needs to be done and I will be dealing with that when we come to later clauses, which may not receive the unanimous support of the Committee. At this stage I am arguing the need to get this problem dealt with on a co-ordinated and regional basis.
I return to the question of the sums involved—