§ Order of the Day for the House to be put into Committee read.
§ THE PRESIDENT OF THE BOARD OF EDUCATION (EARL STANHOPE)
My Lords, before Lord Hastings is called upon to move the instruction of which he has given Notice in relation to the Coal Bill, I think your Lordships will desire me in a very few words to refer to the unfortunate disaster which took place in a colliery in Derbyshire last week. When speaking on the Second Reading of the Coal Bill I remarked that unfortunately in this industry severe disaster sometimes took place. I little thought, and I do not suppose any of your Lordships thought then, that we were so near having to regret an occasion of that kind. My Lords, valuable lives have been lost, and many other men have been seriously injured, and, as always on these occasions: wonderful heroism has been shown, not only by the rescuers but also by the relatives of those working in the pit. I feel sure that whatever our views on this Bill may be and in whatever quarter of the House we may sit, your Lordships would desire me to say on behalf of this House how deeply we deplore this unfortunate accident with the consequent loss of life and suffering involved, how much we regret that loss of life has occurred, how earnestly we hope that those who have been injured will make an early recovery, and perhaps above all how deeply we sympathise with the relatives of those who have lost their lives in this disaster.
§ LORD SNELL
My Lords, I think your Lordships will wish to join with me in thanking the noble Earl, the Leader of the House, for enabling us formally to register our sincere grief at the disaster which has occurred at the Markham Colliery. Our hearts go out in deep sympathy to those who were so suddenly bereaved of husbands, brothers and sons. Our words cannot reduce the extent of 218 that loss, yet words are all that we can give, and we offer them to-day, with our reverent sympathy, in the hope that poor as they are they will comfort those sadly bereaved homes.
THE MARQUESS OF CREWE
My Lords, may I add one word to what has been so well said by both noble Lords who have spoken in offering the full sympathy that we feel with those who are mourning their lost relatives, and those who were injured in the calamity? In the whole stress of the War, when people were waiting for news, there could have been no scene more moving than that which can be witnessed at the pithead of a colliery after a disaster of this kind. These men also were engaged in warfare—warfare against the pitiless forces of nature. I believe that in this particular case the firm, one of whose pits has suffered this disaster, stands in every way among the highest in reputation, and therefore there can be no question that any defect of management, or any failure in equipment, could be the cause of this particular accident. That only brings into stronger relief the amount of peril through which these brave men whom we mourn have to pass in undertaking the great national work which they carry on.
§ LORD HASTINGS had given Notice that on the Motion that the House do resolve itself into Committee he would move, That it be an instruction to the Committee to leave out so much of the Bill as relates to the unification of coal mining royalties, that is to say, Clauses 2 to 41 and Schedules Two to Six. The noble Lord said: My Lords, I would desire, if the House will permit me, to associate myself with the sympathetic references which have fallen from the Leaders of the three Parties in respect of the shocking disaster in the Markham Pit, and I would desire to do that for a very particular reason. To all those who are in any way associated with the coal industry, the daily risk run by the man who goes down into the pit is ever present to the mind, and it is indeed a fortunate circumstance that the Part of the Coal Bill which we are to debate to-day has no bearing at all upon the well-being, the livelihood, or the safety of the mining community. For, if it had, it would be most difficult, nay impossible, for me to attempt to present the case for one of the sections concerned in the mining industry 219 when the House is so conscious of the risks and disasters which may befall another section. It was for that reason in particular that I desired to be allowed to associate myself with what has fallen from the Leaders of the three Parties.
§ Before I pass to an examination of the Motion which appears on the Paper in my name, I must attempt a brief introduction. I gave notice on the Second Reading of my intention to put this Motion upon the Paper, and I then indicated very briefly my reasons for so doing. The Government's spokesmen here and in another place have claimed that the three Parts of this Bill are so closely inter-related as to form a composite whole. I would submit that they have not produced any evidence in substantiation of their claim; but, be that as it may, I have from the outset entirely dissented from that view. Parts II and III of the Bill propose to deal with the regulation of industry. They are fit and proper subjects for discussion in Committee. Part I of the Bill seeks to impose a new principle not yet accepted by both Houses of Parliament, and in my view—and I was substantiated in that view during the Second Reading debate by several speakers—it should have formed a separate measure.
§ The House is familiar with the fact that on the occasion of a Second Reading it is not possible to put down a Motion proposing the rejection of a Part of a Bill. The whole Bill has to be accepted or rejected, and a difficulty presents itself to a member or members of this House who, while appreciating the necessity for passing into Committee on certain Parts of the Bill, object to the whole principle contained in another Part. For that situation a remedy has been found by your Lordships' predecessors in the procedure which I have ventured to adopt. There is plenty of precedent, both ancient and modern, for this procedure, or clearly I should not have ventured to adopt it. It gives to the House the opportunity of rejecting a portion of a Bill, of subdividing a Bill into two Parts, of dealing as it will with any measure which in its estimation should not have been put together under one cover. In a word it is a protection which the House has devised for itself against the vice of tacking, which is a power of the Executive 220 which Parliament has always been disposed to resist. That is the reason why I put this Motion upon the Paper—in order that this particular principle which is contained in Part I of the Bill should be independently and separately debated, and should not be confused with those great and highly contentious issues dealing with the regulation of industry which are contained in the other Parts of the Bill.
§ With that brief explanation of my intention and purpose, I would pass, if I may, to a discussion of the subject in hand. To my mind this Part of the Bill, just as the whole Bill itself divides itself into several Parts, divides itself automatically into two parts. There is first the great question of principle entailed in the transfer under compulsion of a great block of privately owned property to the hands of a corporation controlled by the State. Secondly, there is the machinery under which this transfer is to be given effect, and the compensation which is to be paid in respect of it. In respect of the first part, that is to say the acceptance of the principle, that would be exceedingly difficult to discuss in Committee. Principles are not very suitable subjects for discussion at that stage of a measure. The machinery of the Part would, of course, be very suitably discussed in Committee, but as I could not go as far as to divide Part I into two parts, as I have attempted to divide the Bill into two parts, I am bound on this occasion to take the opportunity of discussing both parts of Part I under the Resolution which appears in my name on the Paper.
§ In respect of this principle and proposal to transfer private property to a corporation controlled by the State, words have been put into my mouth which I have not used, and expressions of opinion have been attributed to me which I do not hold. I make no complaint of that, for I am conscious of the fact that it is my own fault. It is not always easy fully to explain one's purposes in speaking intentionally briefly, and I have waited for this opportunity in order to put the matter right. It has been a commonplace for a generation and more in this country for the needs of the State to take precedence over the private property of the individual. For many years we have been accustomed to 221 the transfer, under certain conditions, of private property, be it land or buildings, docks, market tolls, or what not, from private hands into the hands either of the State through its Departments or into the hands of the local authorities—in other words into public possession. He would be a bold man indeed who at this date of time would venture to suggest that these transfers were improper and should cease; not only that, but that they might react to the gravest disadvantage of the owner of private property.
§ I am deeply conscious of certain properties which, if they were disposed of at valuation, would leave their owners considerably better off than they are to-day; and it would be unwise as well as out of date to oppose oneself to a principle so well accepted, so well founded, so necessary to the well-being of the State as that which has been the practice for many years. It has never been my purpose to assert the rights of private property as against the prior rights of the State in this particular matter. I am not concerned with this principle from the standpoint of the owner of private property at all, whether of surface or minerals or whatever it may be. I approach the subject solely from the standpoint of a legislator, sharing with all other members of both Houses of Parliament responsibility for sound legislation. It is as a legislator that I take exception to this particular proposal, and not in any way as a. private owner.
§ I think it was the Leader of the House who stated, either on the Second Reading or on some earlier occasion, that this principle which we are now asked to accept, and which is embodied in the Bill, was a mere extension of the practice to which I have already referred. I submit to your Lordships that there is absolutely no analogy. In every case hitherto where it has been necessary to acquire private property for the purpose of the State or the local authority, where it has not been possible to arrange that transfer by agreement, it has gone to arbitration, and the price has been fixed at valuation upon that individual property; and that valuation, having been necessarily accepted by both parties, the property, whatever it might be, has passed into the administration of one of the Departments of the State or one of 222 the many local authorities which exist in this country. No special machinery has had to be set up for its administration and acceptance.
§ Here we have a new set of circumstances. It is proposed by this Bill to create a Commission appointed by, and responsible to, the Board of Trade, a satellite, in fact, of a State Department; a new Commission which is to take over and administer this vast block of property. This is not analogous to what has preceded it. It is quite definitely new, and it has no really close relation to those other corporations which have been set up in recent years and to which reference was made during the Second Reading debate by my noble friend Lord Phillimore. It is, in effect, new. The property is to be compulsorily acquired on the great scale, and it is to be handed over for its administration to a corporation set up by, and responsible to, the State.
§ In connection with this proposed transfer there has, from its inception, been used the term "unification." The most reverend Primate when he spoke on the Second Reading described that word as a euphemism, but to all royalty owners and to very many other persons of all Parties in the State that word is not merely a euphemism, it is base coinage struck and circulated with the express purpose of causing ambiguity of intention and confusion of thought. I cannot share the view of the most reverend Primate that the inventor of that term deserves congratulation. On the contrary, I have thought that the inventor of that term and the Government who have thought it well to adopt it, have greater reasons to be ashamed than to be congratulated. The word has served the political purpose for which it was invented, but, if this Part of the Bill should become an Act of Parliament, Press and people alike will hereafter hold that the coal of the country is now owned by the nation and they will be right. Inasmuch as they will be right, I propose to deal with this matter as if it were the nationalisation of this particular class of property. Technical matters set aside, I should have the support of all commonsense men in holding that that is what is actually proposed. Indeed, the Labour Party have made no bones about the matter from the outset. They have welcomed 223 this as an instalment of their own particular programme of nationalisation, and if members of the Labour Party in both Houses of Parliament are to be excused for taking that particular view of the proposals of His Majesty's Government, how much more may be excused the man in the street who has never heard before of the term "unification," and who, I hope, will never hear of it again? So much for that.
§ If the House is agreed that it would be more honest to treat this matter as a proposal for nationalising private property, I can then the more easily proceed to develop my objections to this particular kind of nationalisation. I have explained to the House that I do not approach this matter in the least degree from the standpoint of the private owner. I am trying to look forward to the consequences of this particular proposed Act. The Government are intending to set up a Commission to take over this great asset and to administer it. Hitherto it has been administered in private hands, sometimes very efficiently, sometimes less efficiently, sometimes to the great satisfaction of those who actually work the coal, sometimes to the less satisfaction of those who work the coal. There have been advantages, there have been disadvantages; let all that be well admitted; but the disadvantages have been greatly minimised by the extension of the powers of the Railway and Canal Commission to which my noble friend Lord Gainford referred on the Second Reading, and to which other noble Lords also referred. It may be that certain disadvantages still remain. Had the Government really intended a scheme for unification it would have been easy for them to have amended the present law, or to have introduced a short measure providing for the central control of royalties and coal ownership and assuring the State that in future there would be no inconsistency in leases, no terms imposed which were not consistent with the best interests of the industry. That, apparently, from the outset was never the intention of the Government, although a very large number of persons thought it was. No, the intention was, as this Bill proposes, to transfer this property in private hands en bloc to those of the State, even though the State is disguised in this case under the term of the Coal Commission.224
§ When this property passes into the administrative hands of the Coal Commission certain risks are to be run. Whatever the disadvantage of holding this property in private hands may have been it is a certain fact that it has contributed enormously to the national income. The larger royalty owners automatically pay Income Tax and Surtax amounting certainly to never less and sometimes to more than 10s. in the pound, and in addition 1s. Mineral Rights Duty and 1s. for miners' welfare, so that more than 12s. of every pound goes direct in tax to the Chancellor of the Exchequer. This is an immense contribution, and inasmuch as the owner of the coal is at all times intending to get the best that he can out of his property, you may take it for certain that the gross amount of income received in mineral royalties is always as large as the mineowners of the country can make it. Therefore coal contributes as much to the Exchequer as the mineowners as a community can make it. It passes to the hands of the Coal Commission. The incentive to private profit goes with it. You set up an administrative body composed, as I think the noble Earl, Lord Munster, said, not of civil servants but of persons who are quite indistinguishable from civil servants, who are bureaucrats whose interest does not lie in producing the maximum amount of revenue for the State but who will, if I may say so without offence, be yet another colony of parasites who will proceed to eat up the national income.
§ There are those who will hold that the royalty owner himself is no more than a parasite to-day, but at least he does not eat up the national income. He contributes some sixty per cent. of his gross income towards the needs of that national income. The Coal Commission will be concerned with the many duties which are placed upon it in the Bill, and the first of those will be to create a surplus, not for the purpose of reducing the charges upon the State, but a surplus which may go to the industry itself for ameliorating certain conditions which are thought to need it. By this transaction the State is deliberately shutting the door upon a source of revenue which to-day is of the greatest possible value to it. It is from that standpoint that I view with alarm these particular proposals. I dislike to think that the dead hand will take 225 the place of the active hand. But that potential source of income will be gone. More land and more property will have passed into the hands of an administrative body whose interests do not lie in the making of profit which contributes a proper share to the income of the State, but in a wholly different direction. We are by this proposed measure cutting off yet one other source of national income, not private income, that is still most badly needed for the general purposes of the State.
§ Where does it lead to further? The Coal Commission, when in full operation; is going to find, it must inevitably find, immense difficulty in accommodating its own requirements and interests, and the needs, the urgent needs, of the coal-mining industry itself, to the legal rights of the surface owner. To-day, where the surface and the minerals beneath are united in one hand, the owner endeavours to obtain the best of both worlds, and to a large measure he succeeds. He has certain obligations to his mineral tenants. He has other obligations to his surface tenants, and he has always the incentive to get the most he can from both above and below, and in order to do so he accommodates the interests of the one to the other. He endeavours to ensure that the operations of coal mining may be carried on with the least possible inconvenience and expense while at the same time he endeavours also to ensure that those who are his tenants upon the surface shall not suffer from earthquake conditions induced by indiscriminate mining below.
§ That co-operation passes with the passing of this Bill into an Act. It passes for all time. The surface owner in future will not even know, except by the courtesy of the Coal Commission, what is taking place beneath, and he will in self defence, rightly and properly, endeavour to recoup himself so far as he may for the losses which will be inflicted upon him, unintentionally no doubt but which will be inflicted upon him by this Bill by development of the surface without regard to the land beneath, and there will arise a condition of affairs which will be so impossible, so difficult, that whatever Government may happen to be in power they will have to deal with it. And how will they deal with it? 226 They will be faced with the alternative either of bringing their coalmining operations to an end in all areas where surface development is desired, or they will have to acquire complete rights over the surface. Some members, but by no means all, of the Labour Party put as one of the planks of their programme the nationalisation of the land. But I said "not all" with intent, because there are members of that Party as there are members of all three Parties in the State, who recognise the incredible difficulties, the insurmountable difficulties, which would arise in any attempt to nationalise the surface in industrial areas, already to some extent highly developed and where a vast number of the buildings belong to small men, the occupiers themselves.
§ The problem is practically insurmountable. Yet out of this Bill it will inevitably arise. The individual surface owner will be unable to compete and the lessee equally will be unable to compete. You have severed their co-operation, and you are proposing to bring upon yourself a degree of chaos such as has not been thought of or heard of at any time in the mineral areas of Great Britain. My noble friend Lord Gainford and others, speaking from the standpoint of the Mining Association both here and also outside this House, have expressed their gravest fears, and those fears are by no means exaggerated. Now it is because I deeply regret the sacrifice of national revenue, because I cannot bring myself to believe in an assemblage of bureaucrats set up to effect an entirely, different purpose to that which the private owner endeavours to bring into effect, and because of the inevitable consequence of the measure, that I have ventured to put upon the Paper a Motion which gives this House an opportunity of independently considering it without being in any way confused by the machinery of the measure or the contentious parts of the measure, Parts I and II.
§ It is a separate problem of itself. There is no occasion for me to elaborate it any further. I have brought it to your Lordships' notice with the express purpose of giving the House an opportunity of determining its action upon it. I would invite from those speakers who may follow me an expression of opinion upon it. If in their view I should be wrong, if my 227 fears are misplaced, if the House as a whole feels that the action proposed by the Government is justified in the circumstances of to-day, very well, my Lords, I do not admit defeat—because it is not a question of victory or defeat—I admit that the weight of opinion is against me, that I must be wrong and they must be right, and as is the custom and practice of this House I shall accept that decision with proper humility. I felt it was right that I should present it to the consideration of the House and give an opportunity for this particular subject to be debated and to be decided upon, as was not done in another place.
I have exhausted I think all that I can usefully say upon that particular subject, all that I desire to say, and I would pass from that to consider as we well may usefully do on this occasion, the machinery proposals of the Bill. The noble Earl, Lord Munster, in introducing this Bill, made a statement of the greatest interest. He said:
…it is fundamental that any transfer of private property to a statutory Commission set up by the State should be accompanied by payment of compensation upon a basis which Parliament is satisfied is both fair and equitable.
That is rather new in its way, because it has hitherto been held that the compulsory acquisition of private property should be fair and equitable; it has never hitherto been held that Parliament should be the judge. Nevertheless, I make no complaint of that. Parliament, after all, in its two Houses, is the supreme authority in this country, and who better can be the judge? I make no complaint, but I do mention the fact that it is a new definition.
§ Here am I with the privilege of speaking to one of the Houses of Parliament and therefore it is necessary for me in order to justify my speech at all to convince, if I can, this particular House of Parliament that the fundamental requirements of this Bill are not fulfilled—in other words, that Parliament is not satisfied that the conditions proposed in this Bill are fair and equitable. That, I think, is a reasonable development of the introductory speech of my noble friend Earl Munster, and I do not think he will make any complaint if I take him up in 228 that particular way. On the Second Reading debate my noble friend the Marquess of Lothian, in an analytical speech which I think was universally acclaimed as being of the greatest helpfulness to the House, hit upon the real reason why the Government hold that this Bill is fair and why almost all other persons—I think I would say all other persons—know that it is not fair. The reason is this. The structure of the Bill is quite unsound. The compensation proposals are built up upon a multiplier applied to the estimation of net rents arbitrarily arrived at and the compensation is not to be based upon the value of the property which the State is to acquire. My noble friend made that very clear, but here we are on a different occasion and it would be improper if I did not endeavour to press home the exceptionally important point then made.
I would refer, if I may, to the terms of reference to the Tribunal. Term 1 is as follows:
1. The Tribunal is to determine the amount which the fee simple of all unworked coal and all mines of coal in Great Britain and certain rights agreed to between the parties as being ancillary thereto might be expected to realise if sold in the open market by a willing seller.
In the terms of reference to the Tribunal it is expressly laid down that the Tribunal shall base the compensation upon the value of the coal which the State is to acquire. That is a principle to which no one of your Lordships, no matter what form of property you own, could conceivably object, because it is the principle which has prevailed hitherto in the compulsory or voluntary acquisition of all forms of property. Term 2 says:
In order to facilitate the reference it is agreed that the average net annual income derived from such property during the seven years 1928 to 1934, shall be taken at £4,430,000.
That is merely a facilitating condition under which the Tribunal shall be enabled to form its estimation of value under Term 1.
Then there is Term 3:
3. The Tribunal is to express its decision in the form of stating the appropriate number of years' purchase to be applied to the aggregate figure of £4,430,000 but, in determining the appropriate number of years' purchase, shall take into account such variations,
if any, in the amount of the net income as may reasonably be expected in the light of its source or otherwise.
Terms 1 and 2 are complementary. Term 3 is utterly destructive of the other two. You ask the Tribunal to perform the impossible. You tell it to form its estimation of value on the basis of the value of the coal itself. You give it as a help the estimation of annual net rents, and you tell it at the end that it has to apply a multiplier of the net rents in order to arrive at the value of the coal. In other words, you put the cart before the horse.
§ The Tribunal did its best. The noble and learned Lord, the Lord Chancellor, paid the Tribunal a tribute. He said the Tribunal could have done no other than fix the number of years' purchase at fifteen. Well, combined with the bitterness of disappointment experienced by royalty owners when that figure was announced, there was also the astonishment of most other persons in the State. Much has been said outside this House in respect of the treatment by the Tribunal of evidence, and of the method of giving its findings, which is not complimentary, but it would be to no purpose to refer to it here. The Tribunal was set up, the Tribunal gave its findings. The owners are said to have agreed, and I think did agree, to accept these findings in advance, and no conceivable purpose would be served by finding fault with the number of years' purchase, or by criticising the Tribunal, or by doing any of the things which can lead nowhere. I do not propose to fall into that trap. What I do propose to do is to try to explain the reason why the Tribunal's findings are unsound. The Tribunal's own findings were based upon a fallacy. They were built upon an assumption of fact which had no relation to real fact. Whereas the State is acquiring the coal of the country, the royalty rents were the basis of their valuation.
I should like to emphasize this point, because it is the absolute gravamen of the whole matter. The Lord Chancellor, in his speech on the Second Reading, said:
What is there which can possibly be said to persuade a valuer, whoever he may be, that the output of coal from that particular colliery is going to continue in perpetuity, or say, if you like, for fifty years? Surely it all depends upon output.
Never a truer word was said. Surely it all depends upon output. And what does
it mean? It means this: rents bear no. relation in the coal industry to value; none. The owner may be drawing an income of £20,000 from a fully-developed pit with ten years life; he may be drawing an income of £1,000 from a newly-developed pit with a hundred years life. How can you arrive at value by an estimation of rents? What is of value to the State? And after all, only relatively few noble Lords in this House are royalty owners. We are concerned with the interests of the State in this House. We are not speaking for royalty owners; we are legislators with an hereditary responsibility. What is of value to the State? It is not the coal which has been paying great royalties to a man who is now to be dispossessed. It is the coal which is lying dormant there and which will be dug out to the advantage of the State, if this Bill is passed, in the future. It is that coal which is not only being of value to the State but would also be of value to the individual owner if he were to be allowed to remain in possession; and that is the coal which ought to be valued.
§ A valuation by estimation of net rentals arbitrarily arrived at is no valuation at all. The only valuation can be the class of valuation which has prevailed in the transfer of property from the beginning of time until now, and that is on the merits of the individual property that is to pass. I should, I think, be asked at once, "Why on earth, therefore, did the mineral owners consent to the system of the global figure?" and a very pertinent question indeed it would be. That global figure was agreed at £4,430,000. How it was arrived at we will come to deal with directly, but for the moment my purpose is to answer my own question, and it is germane to the answer to answer another question at the same time. I have been asked in this House by many noble Lords, and outside by many interested persons: What is the Mineral Owners' Association? Who are these people who agreed to the assessment of coal values upon the basis of an estimation of net rent—in other words, the global figure? Many of your Lordships know, though some do not, and for the advantage of those who do not know I can tell you quite briefly.
§ In the year 1911 my noble friend Lord Fitzwilliam was seized with the need of setting up an organisation competent to 231 compete with the Inland Revenue upon revenue questions affecting mineral owners as a class. This necessity arose from the passing of the Budget of 1909, I think it was, and the establishment of what was then called the Super-tax. That Association proceeded to form an executive committee on which there were, quite properly and rightly, appointed solicitors, mineral agents, valuers, surveyors, persons who by reason of their professional knowledge were competent—and none other was competent—to deal with the intricate Inland Revenue questions which then arose for the first time. That executive committee remained in existence for a long term of years, doing throughout its life invaluable work for the royalty owners' interest as a whole, but always of a technical and professional character. It was to that committee that His Majesty's Government sent the Minister of Mines with a request for assistance in framing a scheme for the unification of royalties. They sent the governor of the prison to the prisoner and gave him the choice of the type of death by which he would prefer to die! The committee, after great hesitation (so I am told) eventually, as being the less bad alternative, chose the course of rendering assistance, and began a long period of negotiation which culminated in the acceptance of the global figure, the amount of which is well known to us all and which I have just quoted.
§ There are large numbers of mineral owners who now, too late, are bitterly annoyed that their name should, as they consider, have been taken in vain as permitting the acceptance of this astonishing system of valuation. But, although I was no party whatever to that, I have a word to say for this professional committee which must be said. The Government put a Bill in draft, and into it they put a clause wherein it was proposed that the vesting date, the date upon which these great properties should pass from private hands to those of the Coal Commission under the State, should be the date on which this Bill became an Act of Parliament, and that thereafter, between the vesting date and the date when each individual valuation was completed, all income received by the pseudo-owner of those properties, the person who had been left in possession 232 because nobody, until the valuation was completed, knew how to turn him out, should be treated as payments on account of the capital. It was a shocking suggestion, it was a terrible suggestion, it w as a cruel suggestion; it was a suggestion which bears shame to any man who thought it proper. This committee found itself unable to accept such a condition, and it was under that form of duress that it agreed to the acceptance of this global figure proposition.
§ When my noble friend Lord Balfour suspected that there had been Ogpu methods in the dealings of the Treasury officials with the Mineral Royalty Owners' Association, and when my noble friend the Leader of the House laughed his suspicion to scorn and said "So much for your big stick!" it was Lord Balfour who was right and the Leader of the House who was utterly wrong. That is what happened, and although I think that the acceptance of the global figure was the gravest possible error of judgment, and that it would have been infinitely better to trust to Parliament to rectify an obvious wrong, yet that was the reason why the global figure was accepted, and why we find here today that ludicrous figure of valuation. Anything more in contradiction of the usual practice, or more hard and cruel upon the individual, could never have been devised. That is why I say that the structure of the Bill is fundamentally unsound, and why I move that this Bill be thrown back into the limbo of forgotten things.
§ From that, which after all is the fundamental and most important part of what anybody could say in criticism of this Bill, I would pass, if I may, to deal with what in my opinion are one or two other fallacies uttered here and in another place. Noble Lords have been good enough to inform the House—and they have merely taken their cue from others—that by reason of the graciousness of the Government in permitting the vesting date to be postponed for three or four years a greater sum in compensation will be given to the royalty owners. One noble Lord put it as high as £20,000,000, but the noble Viscount, Lord Samuel, placed it at £7,250,000. The noble and learned Lord on the Woolsack committed himself to the statement, for I have the OFFICIAL 233 REPORT behind me, that in fact it was £7,000,000. I hesitate to place myself in opposition to the distinguished opinion of anyone, still more when it comes with the acknowledged authority of an occupant of the Woolsack, but I invite the Lord Chancellor and others to consider this point. Why do not he and the Government postpone the vesting date for fifteen years, and tell the royalty owners at the end of that time that they have compensated themselves out of their own money, and that therefore no compensation will be payable at all? It is exactly the same principle. There is nothing different. The noble and learned Lord told us that after all it was their own money that the royalty owners would be continuing to receive, and he never said a truer word, and indeed if we add another £7,000,000 to our compensation by being in possession of our own income for three and a half years, it would be only a logical consequence of what it is stated you have already done, to postpone the vesting date still further.
§ Personally I do not regard it as quite fair that anybody in authority should put it forward that the compensation has been increased by £7,000,000, £10,000,000 or £20,000,000, because it has in fact been increased by nothing of the kind. During those three and a half years the income of the royalty owner will be subject to taxation and duties of various kinds, and the royalty owner will be lucky if he puts into his own pocket forty per cent. of the gross income. Forty per cent. of the gross income, treated as capital, would leave him so much to live upon, so much to meet mortgage interest and family charges and other commitments, and how much would he have left to put aside as additional compensation? You cannot have it both ways. You cannot treat the income during the next three or four years as income, and tax as such, and then call it capital, whether it be £20,000,000 or £7,000,000. It would be far better, much cheaper, and infinitely more convenient to all concerned, to postpone the vesting date, do away with all this nonsense of compensation, and take over this property at the end of the period without paying anything at all.
§ Then there is another little matter which it would be improper for me not to touch upon quite briefly. We have been told that the mineral owner can have no complaint that the number of 234 years' purchase has been placed so low because he, for generations, has been in the habit of inducing the Inland Revenue to place a lower value upon property that passes at death than fifteen years' purchase. The Inland Revenue is a relentless instrument of State, and there is no single one of your Lordships who is not fully aware of that fact. If any one of your Lordships, or any royalty owner outside this House, has ever been able to induce the Inland Revenue to accept one farthing less than the Inland Revenue could extract, his ability deserves to be publicly known. It is not done, for the reason that it cannot be done. Why, then, is the Inland Revenue prepared to accept the figure which it does accept for Death Duties? The reason is a perfectly good reason—namely, that it cannot get any more.
§ Why cannot it get any more? A man dies, his executors and successor find themselves in the possession of properties on the surface, every one of which is saleable—although I admit that the valuation of land is a very different thing from the saleable value of land—and every one of which is saleable at the exact amount required for the payment of Death Duties. Apply that to coal. No man can sell part of the pit, or pay out of the receipts of the pit more than he gets. You can but pay upon the coal in it only by selling the whole. The Death Duties may be £200,000. The value of the coal may be £400,000. Even the Inland Revenue is unable—probably it is illegal—to compel the owner to sell £400,000 worth of property in order to pay £200,000. Clearly they can only take what he can pay, and are bound to put the figure at such a valuation as will enable them to receive the maximum amount that the individual can pay. That is why the Death Duties are levied upon coal in the way that they are, and are so levied merely because there is a limitation upon the amount which can be extracted from the owner and his successor. We have been told in that particular connection, too, that coal is so much a wasting asset that its value must be treated accordingly, and we are told at the same time that its risks are so great, that the income derived from coal is so uncertain, that its value must be diminished for that reason. It is very difficult to put those two things together.235
§ I would like to endeavour just for a moment to explain to the Government why risks having their bearing upon income can really be discounted in this particular matter. Agreed that a great strike may bring a royalty owner's income absolutely to an end—an exceedingly inconvenient thing to happen to it, but in the long run it does not matter because coal which has not been dug out is still there. Although coal is assessed to Income Tax and Surtax as if it was income, in fact those taxes are a capital levy. In actual fact coal is being sold ton by ton at the low price which is described as a royalty. If it is not being sold, it is still there. Remainder men are glad of strikes because tenants for life cannot get everything out before their own turn comes. Look at it from that standpoint and you will see at once why the risks which apply to the annual income derivable from coal do not at the same time apply to the property which lies in coal.
§ I think it is easily demonstrated to anyone that those risks can be discounted. If the royalty owner can get over the inconvenience of going short, or entirely without, income for a year or two he has at least the satisfaction of knowing that his capital has by so much improved. And I am not able, when following up that argument, to agree that the risks sustained by the mineral owner are ever as great as will be sustained by that owner when bought out of his present property and left free to invest that income in other securities, gilt-edged or otherwise. We all of us are only too familiar with what has happened to what not so very many years ago would have been looked upon as perfectly proper investments even for trustees. What has happened to good class railway shares in this country? It is true many stocks and shares, little thought of thirty years ago, are to-day of immense value, but others in which our forbears invested, others in which the black-coated man invested the savings of his life in order to provide for his retirement and his widow on his death—they have gone. The owner of minerals knows what he has got, and while there have been good times and bad times, and the owner of minerals has had his difficulties like other people, he has never been willing to exchange 236 that property for any other, and he is not willing to do so to-day upon any temptation. He knows his good years overweight his bad, and that his security is at least as good, and he thinks it is very much better, than anybody else's.
§ I have done with generalities, and I would like to refer as briefly as I may to one or two features of the Bill as drawn. The method of valuation as laid down in this Bill, provides—and this is of course without relation to the figure which is fixed as the maximum compensation—that these valuations shall be done within regions and that when they are all complete compensation shall be paid, not upon the actual valuation, but upon the relation which that valuation bears to the amount of money in the pool, that is to say, the amount of money allotted to that particular region. It means, therefore, that the individual, however soon his own valuation may be completed, however clearly he may have an indication of the value of his own property, is wholly unable even to estimate the amount of compensation that he will receive, because the amount of compensation that he is to receive is wholly dependent, not upon his own valuation, but upon the valuation of his neighbour's property. It produces a situation which is really impossible.
§ Granted that a man is willing to accept the Bill. Granted that a man even feels that the times are such that he would get out at any price—because there are some like that: I do not happen to be one—even he does not know what to do when he is unable to estimate within many thousands of pounds how much he is going to get. He cannot know what the valuations of other owners in his great region are going to be. He cannot know how large an area in their leases is reserved coal. He cannot know how many seams in those pits have been worked out, and how many remain to be worked. He has no information, and he is not going to be able to get it by any means, fair or foul. He has to possess his soul in patience and wait, with a sword of Damocles hanging over him, until the regional valuation is complete, and then he is going to know. And he is going to know then—and not till then—whether he is going to receive 10, 20, 50, 70 per cent. of his own valuation. For it is inconceivable that 237 he will ever receive more. Fifty per cent. is likely to be the maximum; it may be infinitely less. What an impossible position to place any man in. What has this community done to deserve such treatment on the part of the State? Why should men be held in this suspense—men, many of whom have great commitments? Why should they be held in this cruel suspense? No man can ask to be paid more than the value of his property, but why should he be invited to receive compensation on the basis of somebody else's property? And that, my Lords, is what this iniquitous provision proposes.
§ I set out to try to show that Parliament cannot be satisfied that this Bill is fair and equitable, and I hope that I am in the process of proving my contention. I pass from that to another and equally serious kind of hardship. Very few mineral estates are free of charges of one kind and another. The generation which preceded ours was, as many of us know, grossly extravagant: taxes were low, rates were almost non-existent, tastes were expensive. And they placed large charges upon their mineral properties, which were then corning to full development. I would not even go so far as to say that they were wholly unjustified. It was hard on their successors, but they had their reasons. They had their possessions, and they had their rights. And whether they had reasons or rights, at least they did what they chose, and we have inherited their doings. If for nearly four years you hold up an individual mineral owner without knowledge of what he is going to get, and at the end you pay him approximately 50 per cent. of the value of his own property, and he has upon that property mortgages and family charges which, combined, amount to 50 per cent. of the capital value, then you leave your royalty owner bankrupt and penniless.
§ If my correspondence is to be believed—and, after all, people do not write and tell one these things without there being truth in what they say—the number of persons who will be driven into the Bankruptcy Court by reason of the action of His Majesty's Government will be very many. It is unthinkable that, deliberately, leaders of the Party such as we are happy to have, men of the highest personal character, should intentionally 238 perpetrate an outrage of this character. But it is going to be done unless amendment of this Bill can be contrived. You cannot suddenly take away half a man's capital and leave him to exist upon the other half which somebody else owns, and that is what is going to be done in a large number of cases.
§ It is not going to be done to the greatest of the royalty owners whose prudence, probably, in establishing sinking funds, with other resources, will enable them, while suffering greatly from the loss of income inflicted upon them by the Government which they have supported all their lives, to maintain an exiguous existence. It is going to be done to the man who to-day lives in genteel poverty, arid the man whom your action is going to extinguish is going back into his part of the country filled with a bitterness toward His Majesty's Government which will be very great, because it is one thing to deal with a natural hatred of your inveterate political enemy, but that is as nothing to the bitter hatred of your deserted friend. That is what His Majesty's Government are going to get out of this Bill, and it is deserved. So thoughtless, so heartlessly drawn a measure as this, which makes no provision for the monstrously cruel cases which it will create, is not a Bill which will commend itself to this or any House of Parliament.
§ I have spoken long enough, but it is a big subject, and I apologise to the House. There is much more I could say, but there is a limit to patience and tolerance, and I know it well myself. I will pass rapidly through sundry points I would like to make to others that are perhaps of greater importance, but I would not like to pass without making one reference to the loss which is to be inflicted upon the Established Church. My noble friend the Foreign Secretary, in a letter to The Times which caused much interest not so long ago, committed himself, and quite rightly, to the statement that any further diminution of clergy income would create chaos. Here are His Majesty's Government proposing to deprive the Church of England of a great slice of its income and to inflict on the poor clergy a diminution of that income which it is not fair they should be asked to bear and for which, incidentally, there is no reason. I could not pass without the briefest reference to that point because it is one of the major iniquities of this Bill. 239 Whereas there are members of the Government, perhaps, who would not look so sourly at the diminution of income of certain royalty owners, although I have no reason to suppose that is so, yet there cannot be one who can view without dismay the consequences of their own actions to the Church to which they belong.
§ I pass from that to a point which is really of the greatest importance. Spokesmen for the Government have told us time and again, and they have been supported in this by many outside and by the whole Press, that the royalty owners have agreed to the findings of the Tribunal; that they have submitted to Cæesar and to the judgment of Cæesar they must bend, and therefore they have no case, although I have endeavoured to prove that, as a matter of fact, there is a very strong case. But that has been held to us by the Government, and has been substantiated in the Press of the country. If the royalty owners are to be held to what the Government maintain was their agreement, it is not unreasonable to expect that the Government, in turn, should be held to their side of the agreement. I would draw the attention of the House in very great seriousness to a provision in one of the Schedules of this Bill which I shall read after I have first read a letter from the Secretary to the Treasury addressed to the Secretary of the Royalty Owners' Association, the original of which I have in my hand.
The letter begins:
It appears desirable at this stage to draw a clear distinction between the terms of reference to the Tribunal and the objects which the Tribunal's decision is to serve.
The important paragraph is number four:
The global figure arrived at as a result of the determination of the Tribunal on the basis laid down in the terms of reference is to be accepted by the Committee"—
that is the Royalty Owners' Committee—
as covering in addition to the fee simple of all unworked coal and mines of coal in Great Britain the following rights: that is to say, such underground rights as are necessary for effectively getting the coal, including the right to let down the surface, upon the following bases: (1) Where the rights as to compensation or otherwise are now defined subject to those rights; and (2) in the case of mines of coal unsevered from the surface on the basis of payment of reasonable compensation for damage due to letting down the surface, and buildings and works thereon.
For the purposes of the global figure, no surface rights are included, and it is also agreed that the property to be transferred for the global figure shall be transferred subject to and with the benefit of all working agreements and existing leases.
"For the purposes of the global figure, no surface rights are included," and "compensation for damage due to letting down the surface, and buildings and works thereon" shall be paid.
This letter derives from Storey's Gate. It is an official communication. On page 54 of the Bill in the Second Schedule, the paragraph reads:
In a case in which the fee simple in the coal or mine…there shall vest…a right to withdraw support from that land so far as may be reasonably requisite for the working of any coal, proper compensation for…
In the letter which supplemented the terms of reference to the Tribunal there was no mention of the words "to make good," and the difference between making good and paying compensation is the difference between a pound of putty and a hundred pounds—a very important difference, but a very trifling difference compared to what is contained in subparagraph (2) of paragraph (6) of the Second Schedule, which says:
The Commission shall, on the occasion of their first exercising, or granting to a lessee the benefit of, a right vested in them by this paragraph give public notice that they propose so to do by advertisements in the London Gazette and in one or more newspapers circulating in the locality, and, in the case of buildings or works whose construction is begun after the date of the first publication of the notice, the obligation to make good or to pay compensation referred to in the preceding sub-paragraph shall be limited to damage which could not have been avoided by reasonable and proper precautions taken in the design and construction of the buildings or works to minimise damage in the event of subsidence.
That is the way in which His Majesty's Government implement their words, stick to their side of the agreement, and they have the temerity to tell the royalty owners that they must abide by the decision of the Tribunal which has been arrived at however much they dislike it!
§ His Majesty's Government know, as every one of us acquainted with the subject knows, that this difficulty of surface and coal mining is immense. I referred to it in the early part of my speech and I shall not say more about it now. This is the way His Majesty's Government 241 propose to get out of it. The surface owner was to be immune from interference, and, in the terms of their Treasury letter, was not to be interfered with; the references to the Tribunal expressly excluded any interference with surface, and that interference therefore was not taken into account in any valuation made by the Tribunal. Yet the Government have put into this Bill a clause hidden away in a Schedule which cuts the ground from underneath their own feet, makes their own word of no account, and seeks to convey to the Coal Commission a property of illimitable value for which they have not paid one sixpence. And we are asked to believe that the terms are such as Parliament will consider fair and equitable. That paragraph of the Schedule is a blot on the escutcheon of the Bill. It is shameful that it should be there in face of the letter, and while it remains the Government have no shred of claim to assert that the royalty owners are bound by anything to which they may in their turn have given their word.
§ I have finished except for one matter which I touch upon with the greatest reluctance, and yet I feel I must. A reference was made by the noble and learned Lord on the Woolsack to the influences which might affect members of your Lordships' House in regard to the action which they might take or were taking in respect of this particular measure. Anything that falls from noble and learned Lords on the Woolsack is necessarily of the greatest importance, and although I with other noble Lords was somewhat startled by the dictum to which the noble and learned Lord committed himself on that occasion, I certainly would not have felt disposed to say anything in respect of it other than after the fullest reflection. I have thought over the matter. I have had the privilege of sitting in your Lordships' House for very many years and I am as jealous of the privileges, prerogatives and rights of this House as any man, and after the fullest possible reflection I find myself unable to accept the thesis advanced by the noble and learned Lord. I have felt myself unable so to do not so much because of its effect on and references to this particular debate but because of the inference which may be drawn and the effect that it may have upon the future usefulness of your Lordships' House.242
§ It is a commonplace that the chief utility of this House lies in the fact that it contains within its membership persons of all interests whose experience is valuable for the nation's benefit when their particular interest comes up for discussion in this House, and it is also I think a matter of public knowledge that, although of course there would be exceptions in the case of students, yet generally speaking knowledge only comes from long experience, and there is no incentive to experience so strong as that of personal interest. Consequently, there is practically bound to be some element of personal interest in the expressions of any noble Lord speaking on a subject with which he is intimately acquainted, and it would impose I think upon the House a situation more difficult than it could compete with if all considerations of personal interest were to debar its possessors from taking the active part which they have hitherto been expected to take. Moreover, it presupposes that personal interest takes priority over public interest, and that, my Lords, is not I think entirely a proper thing to impute to any single member of your Lordships' House.
§ Though it be on this occasion a fact that there are contained in this House a number of owners of minerals there is an infinitely larger number outside. Are they not to be entitled to have their case heard here before the High Court of Parliament? My Lords, they are. I cannot accept this dictum of the noble and learned Lord. I would wish to apologise to him and to the House for venturing to raise this matter. It has been most distasteful to me. At the same time I must account for my own actions. I wish to justify them, and I wish to justify them not only in my own interests, but in the interests of the House as a whole when it has ceased to deal with the Coal Bill and comes to other subjects of domestic interest which must arise before it as the Session proceeds. I have said all I can reasonably and properly say upon the subject, except once again to repudiate that particular dictum and to say that, while I regret my repudiation, I am still of the opinion that it is right. I beg to move the instruction to the Committee which stands in my name upon the Order Paper.243
§ Moved, That it be an instruction to the Committee to leave out so much of the Bill as relates to the unification of coal mining royalties, that is to say, Clauses 2 to 41 and Schedules Two to Six.—(Lord Hastings.)
§ THE LORD CHANCELLOR (LORD MAUGHAM)
My Lords, the noble Lord, Lord Hastings, has explained to the House that he was approaching this matter from the point of view of a legislator. There is no better method of approaching it, and in the speech which he delivered he showed to your Lordships his own view as to the careful and moderate language which a legislator should possess and the balanced and judicial way in which he would approach a question of legislation. At the end of his speech the noble Lord proceeded to deal with something with which I shall at once deal, for the reason that it involves in some sense an attack upon myself.
He was complaining of what he called a dictum from the Lord Chancellor. He referred several times to that dictum but with the book in his hands he did not read it. What is it that I am alleged to have said to this House? A noble Lord, on the last occasion, suggested that I had had the presumption to tell some of your Lordships how they should vote if they were interested in this matter or to tell them that they should abstain from voting upon the Bill. My Lords, that statement is without any foundation, and it is completely without foundation to suggest that I have in any sense, remotely or directly, suggested that any member of this House is going to allow his personal interests to outweigh the interests of the public. I have said nothing of the sort. Your Lordships know that I have occupied this place for a very short time, and it may be that I shall not very much longer continue to occupy it, but believe me while I am here I do not propose to lecture your Lordships on any such principle as that.
What I have said was something entirely different. I was pointing out that on the question whether this Bill was a right Bill for the Government to introduce, the Government were dealing with the fact that every Commission or Committee or other body that had touched 244 the question in any way had with complete unanimity stated that this particular dealing with royalties was one which was in the interests of the industry as a whole. Having said that I went on to say that those who took their own view about it, and thought that all these Committees and Commissions and people who had previously dealt with it and all the witnesses whose views had been considered by those bodies were wrong, should hesitate if they were personally interested and ask whether their view that all these people were wrong might not be affected by their personal interests. That is a wholly different proposition to the proposition which it is suggested I have laid down and it is wholly different from the dictum that my noble friend Lord Hastings attributes to me. Nothing of the sort. What I have said I am not going to recant. I think it is a true proposition, and it bears no sort of reflection on the honour of any single noble Lord here.
§ LORD HASTINGS
If the noble and learned Lord Chancellor will permit me to interrupt him for a moment I would like to say at once, following upon what has fallen from his lips, that if there has been, as I fear there has been, some misunderstanding of what he said on Second Reading on the part of myself and of those who act with me, I would at once wish to apologise to him and to make the fullest apology for any misunderstanding that has arisen. I hope that the noble and learned Lord will accept that from me here and now.
§ THE LORD CHANCELLOR
I am grateful to my noble friend. I was going to say before parting from the subject that one noble Lord who had paid great attention—an attention which I value—to what fell from me—namely, the noble Marquess, Lord Lothian—went out of his way to say that he thought the remarks I had made on the last occasion were fully justified, a thing for which I was grateful.
Now, my Lords, let me pass away from that and consider for a moment the arguments that are placed before us to lead us to suppose that this measure connotes that the term "unification" is false coin minted by persons who are desirous of deceiving the public, that the promises of His Majesty's Government 245 have been broken and that from first to last the measure is unfair and in every sense unjust and inequitable. Let me deal first with some of the particular grounds on which that charge is made. Why is unification a word of base coin, and who is sugegsted as having a fraudulent purpose in using it and putting it in the Bill? I should have thought that the very shortest examination of this difficult and rather complex Bill would have disclosed perfectly clearly what it is the Bill seeks to do. It is unification in this sense, that if the Bill becomes an Act all the royalties will be payable to a single landlord, the Commission which is to be set up by the Bill. But if anybody supposes that the word was used with a view to prevent people reading any further in the Bill—going beyond I suppose the third or fourth clause of it—he must be singularly innocent. It is a word which in my opinion represents quite fairly the nature of the transaction that is proposed, but I am quite willing, as far as I am concerned, to accept the word used by the most reverend Primate on the last occasion and say that this is a species of expropriation, and there is given with respect to that expropriation which is alleged to be, for the reasons I have already touched upon, in the interests of the industry as a whole, a compensation arranged on a system which I am perfectly ready to defend before anybody who is open to conviction, and I am sure that includes noble Lords who are here present.
One of the objections made by the noble Lord is, he says, that he is horrified at the thought that a source of revenue will be gone if this Bill becomes an Act; and he harrowed us with the notion of the large amount which a royalty owner has to pay to the Crown as things are. Of course if you are a large royalty owner, just as if you are a large owner of any other source of income, everybody knows that a large part of your income is payable in Income Tax and Surtax, and in the case of mining royalties we all know that these additional payments have to be made. But, my Lords, does he suppose that the whole of these sums are going to be lost to the Crown, or does his heart bleed as he thinks that the Government have not considered sufficiently the losses they are going to incur if this Bill becomes an Act of Parliament? Of course it is perfectly well known to 246 the Government that certain results will follow as regards the amounts which they can recover from royalty owners "owners of coal" is the more accurate phrase—who are going to be compensated under this Act. But Income Tax will continue to be payable by the Commissioners, and also other sums will continue to be payable by the Commissioners, and these enormous losses which he foresees are, like some of the other consequences of this Bill which he also foresees, purely imaginary.
Then we are told that one disastrous consequence of the Bill is that the surface owner will no longer know what is going on beneath his surface. The vast amount of the coal which is being mined at the present moment is under lease. It is true that some 12 per cent. or so of the coal which is now being produced is coal in respect of which the colliery company has acquired the freehold reversion, and accordingly the position as regards the coal itself is that it is not on lease. But the person who is working the surface all over the country does not know, as a rule, what the colliery lessee is doing underneath the surface. There may be occasions when he does, but to suppose that there is going to be, as a result of this measure, any very great difference in the position of the person who is working at the surface, or who owns the surface, or who has buildings on the surface, as regards the question of letting-down, is once more, in my opinion, a complete fallacy.
The noble Lord then proceeded to consider the machinery of this measure. He said that the structure is unsound. It is true that the measure does not propose to examine into the case of every owner of coal in this country, ascertain precisely the value of his interest, and give it to him. The noble Lord must know, because he has an intimate acquaintance with the earlier history which subsequently involved this Bill being presented to Parliament, that as soon as the matter was considered at all it became evident that to go into the personal compensation payable to every owner of coal in the country and then to agree to pay that, was an impossible task for the Government to undertake. No Government in these days can agree to make the country liable for a completely unknown sum in order to purchase all the 247 coal underlying all the lands in the United Kingdom, and at an early stage it was represented that by far the best method was to ascertain the value of the whole of the coal and divide it up among the persons entitled.
Now here it is; and I did not think at the time that the noble Lord was right in the way in which he treated the agreed terms of reference to the Tribunal. He stated quite accurately, as one would expect, the first and the second terms of reference, the first being as he said perfectly rightly:to determine the amount which the fee simple of all unworked coal and all mines of coal in Great Britain"—and certain other rights—might be expected to realise if sold in the open market by a willing seller.Here I must admit that when, on the last occasion, the noble Marquess, Lord Lothian, pointed out that I had been guilty of a certain slip, and a repeated slip, when I remarked that the sum was in respect of the value of the royalties, that was quite wrong. Anybody who occupies the position which I have here must never, as a supposed lawyer, complain if the accuracy of his language is attacked. His only course, if he is wrong, is to admit it. Well, I was wrong; it was not an effort to determine the value of the royalties, it was an effort to determine the fee simple of all unworked coal and all mines of coal in Great Britain and certain ancillary rights.
The second term, as he again quite rightly stated, was:In order to facilitate the reference it is agreed that the average net annual income derived from such property during the seven years.…which is an agreed term of seven years—shall be taken at £4,430,000.Then comes the third term, and this is the one which the noble Lord, if I may say so with respect, jumps upon:The Tribunal is to express its decision in the form of stating the appropriate number of years purchase to be applied to the aggregate figure of £4,430,000"—and then he stopped at the "but," and to me the "but" is all-important—but, in determining the appropriate number of years purchase, shall take into account such variations, if any, in the amount of 248 the net income as may reasonably be expected in the light of its source or otherwise.That is the whole point which was discussed before the Tribunal: the number of years' purchase by which you are to multiply the average annual income of the period of seven years, which had been agreed—I must say at once, agreed only with this Mineral Owners' Committee—to get the sum which should be taken as representing the value of the fee simple of the unworked coal and the mines of coal. And, to my surprise, I heard the noble Lord suggest to you that that was an altogether fresh method of valuation—something strange, unjust and unheard of. Heaven knows why.
How can you determine the value of the coal? You cannot measure all the unworked coal in the land. You cannot go down 4,000 feet, or whatever it may be, in every coal area in Great Britain. You cannot even ascertain what the cost will be of working that coal. You cannot ascertain all the broken ground, and all the other circumstances of water and gas and the hundred and one circumstances which will affect the amount which can be got by working the coal. Nor does any sensible person adopt such a system when buying, or taking in such a way as has been taken here, a profit-owning concern. If you are buying a grocer's business—to take the simplest case I can think of—you would not proceed to consider what the grocer's business will bring in by discussing with people how many customers it can get during the next few years. You would not do that in estimating the value of a water undertaking, or any other profit-making concern that imagination can conceive. The only thing you can do is to try to see how much money that concern will bring in by consideration of what it has brought in during fair years in the past.
Having taken that into consideration, the next thing, and I agree in this case the most important and most difficult thing, was to ascertain how far you could expect that the £4,000,000 odd would continue to be paid in the future. That is the thing which the Tribunal discussed, and that is what the evidence was led to deal with before the Tribunal. They had drafts, they had statistics and evidence of all sorts, of people who 249 endeavoured to show on the side of the mineral owners that this sum of £4,000,000 odd was a stable sum, which might be expected never to decrease, except possibly for a year or two, and might be expected to continue. On the other side endeavours were made to prove that the export trade had fallen off, that the consumption of coal had diminished, that for many purposes coal was being used more economically, and for that and many other reasons the fair view to take was that this £4,430,000 would diminish. The Tribunal had to consider that evidence and to make up its mind.
There is one thing that I want to point out very clearly, in order that I should not be misunderstood by anybody else in the future. I want to point out that the sum, whatever it was, which was to be the annuity for the purpose of ascertaining the global figure was taken to be a sum payable in perpetuity. It was never suggested, and rightly never suggested, that that fluctuating annuity which could be got ay royalties on coal all over the United Kingdom was a wasting security that was going to come to an end. The whale thing was based upon the footing that although the £4,000,000 odd might reduce in the future, it was for the purpose with which the Tribunal had to deal a perpetual annuity of an uncertain sum, and this was because one mine, after all the money had been spent upon it, might come to an end, while normally speaking another mine in the same or another district takes its place for a series of years. Therefore the fact that a mine is a wasting security was entirely irrelevant to the question of what should be paid as the global figure for all mines at present and in the future in the United Kingdom.
Now I want to make this distinction very clearly, because I think the noble Lord who has addressed your Lordships really has not taken in some of the things which have been said on the subject in this House. In ascertaining the global figure you treat the annuity as in perpetuity and not as a wasting asset, but in ascertaining the interest of a particular mine owner that is not true. His interest is a wasting security. He cannot say that his interest will last for ever. Collectively your interests may last for ever, bat individually they are open to all sorts of chances which may put an end to the value of your mine and of your coal, and 250 may lead to your annuity or to your royalties coming to an end. There is an example known to many in this House. Within modern memories one of the best mines in the whole land, owing to a couple of explosions and surrounding circumstances, had to be stopped and given up, and although it has been restarted it has been restarted without any royalties at all being payable to the noble Earl whose land it is. That is not a solitary instance. Other instances can be given, and therefore it is that the individual right of a coalowner is not like the global right, if I may use that phrase, of the whole of the owners of coal. It is not perpetual. It is open to all sorts of circumstances which may bring it to an end.
I wish to say two things. First of all, that the system adopted for ascertaining the global figure was a fair and just one. I do not believe that if you go further, if you throw out this Bill, if you get some other tribunal as good as the last and once more leave to them the question what the global figure should be for the value of the whole of the coal in this country, you will get a better figure than that which was arrived at by the Tribunal which we know. Secondly, I say that the system of doing it by reference to the experience of seven years, plus the consideration of all the evidence which was available to show whether the average royalties of those seven years would go down or would go up, was a perfectly proper way of dealing with this problem. And I would add that in my opinion it was the only possible way of dealing with it.
When you come to the question of what any particular coalowner is going to get, that is going to be settled as the result of the regional valuation and the separation of the rights of the individual owner by an impartial tribunal. With regard to that, it is only fair that some of these owners whose coal is so situated that it is rapidly approaching exhaustion will get very much less than fifteen years' purchase on the royalties which they have been getting; whereas those who have coal in a mine which is going to last for anything over fifty years are going to get put upon the value of their interests something substantially greater than fifteen years' purchase. The noble Lord asked me—or rather asked the question of the air—who is going to tell owners of coal what they are going to get. Of course the answer is "No one." 251 You have to ascertain it ultimately by going into the individual interests of every single coalowner in this country. But that does not mean that there is anything unjust in the system of first ascertaining the global rights of all these owners and separating them as fairly as you can.
That is the comment that I have to make in reference to the criticisms of the machinery of this Bill. Then the noble Lord points out that there are hard cases. There is no need to deny that there will be hard cases, and I do not know, any instance where there is a compulsory acquisition, either for the State or for such a Government concern as this Commission, where there are not hard cases. You have a vast scheme, it may be for making a circular road round London or for acquiring a vast area of land which is not to be built upon, and you acquire the land on the ordinary system under an Act of 1919 (I think it is) where a value has to be put upon the land. One man is unfortunately in this position, that when prices were high he bought his plot or his estate at a very high price, and the valuation comes at a time of slump, so that he gets, maybe, a very large percentage less than the amount which he paid. It is a very hard case, I do not deny it. But what else can you do if you are acquiring a very large amount of property in the public interest, whether it be for the State itself or for a public body? You cannot in that case relieve the people who have made a bad bargain—that would be an impossible position—any more than you can deprive those of the benefit who made a good bargain.
Supposing there be a man who has been fortunate enough to buy coal at a very low price. It may very well be that he is going to make a large profit out of his share of the compensation. The Government cannot deal with that. You have to deal with all alike. And with regard to those who are going to suffer owing to the unfortunate circumstance that they have bought coal at a high price, or that they have unfortunately mortgaged the property to the extent which is now shown to be unwise, I cannot myself see how any provision can be put in such a Bill as this to take away that misfortune from them. It is again true that the income of many people is going to be reduced. So it is when there is conversion 252 of a loan which is issued by the Government. I think we have all known the hardest possible cases where old men and ladies had the whole of their money invested in a security bearing interest at 5 per cent. and it was reduced by the Government. Well, the Government could not compensate them, because you cannot impose upon the Government compensation in such a case. That is only one illustration, but I could give many. I submit to your Lordships that hard cases cannot be held to affect the position here.
It has been suggested that the argument from the Inland Revenue valuation is a very poor one. I was glad to hear that my noble friend Lord Hastings did not think that the Inland Revenue officers were apt to write down out of their own kindness of heart the value of the hereditaments of which the deceased died possessed. He was not so innocent as one of the noble Lords who addressed your Lordships last week. Of course they do not. But I was surprised to find that he had another theory of the way in which Inland Revenue officers performed their duty. In his view they are in the habit of considering how much they can get from a particular person who has to pay Estate Duty and exacting the maximum from that person. That is an absolutely visionary picture of the mental processes of the Inland Revenue officers.
I have had to deal with many such cases in the course of a life at the bar, and I have never found, since the year 1894 at any rate, that the Inland Revenue officials do anything other than this. They proceed under an Act which requires them under Section 7, subsection (5) of the Finance Act, 1894, to estimate the value of the property of which the deceased died possessed at the price which it would obtain in the open market if there were a willing purchaser. There is an exception in the case of agricultural land. But it is the open market figure of the property held at the date of death. And they ascertain that without in the least considering what the capacity to pay is of the executor or heir at law. If the figure is £100,000 the proper rate of Estate Duty on that has to be paid, either by an annuity which is spread over eight years, or by some other means; or, if not, the property will be sold. They are neither soft-hearted, as some noble Lords 253 seemed to think, nor hard-hearted, nor is their aim to get the utmost farthing out of a person after estimating his ability to pay. All that is, with all respect, in the nature of a fallacy.
We have heard something about the wrong to the Church. That has been described as one of the major iniquities of this Bill. If it be so, if they are going to lose a great deal of money, no one will be sorrier than myself, but at present I am not sure that the loss which it is suggested they are going to suffer has not been greatly exaggerated, because we know that, quite rightly, the Ecclesiastical Commissioners have put aside £80,000 for a number of years in order to meet the point that the royalties they were getting were payments on capital and should not be wholly applied as income. If they had also decided to set aside the interest on that £80,000, they would not have suffered a penny loss of income. They have not done that, but they still have a very large sum to put aside out of that £80,000 annual income. And it has to be remembered that the calculation which they make as to their own loss of income at present is based on the circumstance that they may have to invest the whole of the compensation which they get in Government securities. I do not agree that that would be altogether fair, and I propose on behalf of the Government to introduce into this measure a clause by which they will be allowed a wider range of investment than Government securities, a range of investment which, when all is said and done, will produce a more certain return than the return from coal.
There may be other points which might be dealt with, but I hope I have not left out anything of very great importance. There is the very ingenious and extraordinarily well put argument with regard to the three and a half years during which the coalowner is to retain possession of his royalties, which it is said should pot be treated as compensation. In a sense that is true, but at the same time it is equally true that his position is better at the present moment, having regard to that circumstance, than it was under the system which was suggested before that the vesting date should be the date of the Act.
I have only one other thing to say, and that is that there was a suggestion, not 254 perhaps that rubber truncheons were used by the Government in this case, but something almost as bad—namely, that the methods of Ogpu were employed for the purpose of inducing the Committee who represent more than half of the owners—the Mineral Owners' Joint Committee—to accept the global figure of £4,430,000. I need not say that I entirely accept the view that Lord Hastings, in the account which he gave your Lordships of that transaction, was speaking with entire good faith, but his facts are absolutely and entirely wrong. The Mineral Owners' memorandum suggesting a global valuation was made in February, 1936. The precise figure which was put in the terms of reference, £4,430,000, was agreed eight months later—namely, in October, 1936. The Greene Tribunal was appointed in April, 1937, and the first time the Committee saw any draft of the present Bill was not until the summer of 1937, long after the so-called global figure of £4,430,000 had been agreed. Therefore, if we are to suppose that Ogpu methods were employed, we must assume that they were employed long before the Bill was in existence, and the idea that the owners were compelled by terror of the provisions of the Bill to agree to the £4,430,000 is once more a fairy tale.
I have kept your Lordships too long, but I have felt it right to express my view of the contentions put forward with great ability by the noble Lord. In my humble opinion these views are largely based on misconception of the facts, and they are also largely based on an entirely wrong view of the way in which the valuation of such a vast area of property as we are concerned with here can alone be carried out. I would submit to your Lordships that, in fairness, this method cannot really be attacked. I quite agree that Lord Hastings, since he and many other noble Lords have nothing to do with the Mineral Owners' Joint Committee, is at liberty to hold his own views and to attack as violently as he pleases the global figure which has been obtained, but I do not agree that he is right in saying that there was anything unjust or unfair in that system, or, having regard to that great and important party who were consulted as to the global sum and as to the means of using that for the purpose of ascertaining the value of the coal, that the Government were in any way wrong 255 in accepting their suggestions and agreeing to their figures. I submit to your Lordships that this instruction is wholly wrong and that the Motion to go into Committee on the Bill should be agreed to.
§ THE EARL OF DUDLEY
My Lords, the noble Lord who has moved this Motion has dealt with Part I of the Bill in such a wide, lucid, able, and unbiased way, on which I should like to be allowed to congratulate him, that it leaves me, I am glad to say, very little to say except to deal with one or two points which were perhaps not entirely dealt with by himself, as one who has been closely connected with the coal industry for a good many years, and as chairman of a colliery company owning its own coal and working its own coal as well as smaller properties adjoining its own fields. I am also a receiver of royalties—not a very large sum—paid upon coal owned by my trustees and worked by various colliery companies over which I have no control. I would like to say in passing that, although I am a life tenant of a very strict trust, I receive to the full the rents and royalties without any deduction made by my trustees. I only mention that because the noble and learned Lord on the Woolsack, during his speech in the Second Reading debate, told your Lordships that under a term for life a man in the ordinary way would not have been allowed to take the whole of the rent and royalties which he can get from such mines. I do not wish to quarrel with the noble and learned Lord on the Woolsack, but either he is wrong or my trustees are wrong, and from what I know of the close-fisted and ungenerous characteristics of those hard-headed gentlemen, I would not feel at all safe in taking the opinion of the noble and learned Lord.
§ THE LORD CHANCELLOR
Will the noble Earl allow me to say that there probably is some clause in the settlement in the will under which the trustees act and under which he is entitled to the whole of the income. I never said it was universal, but if the noble Earl likes to study the Settled Land Act I should be very glad to lend him a copy of it.
§ The Earl of DUDLEY
I think the noble and learned Lord will agree that he made a fairly wide statement, though 256 he did say only "in the ordinary way." I do not of course wish to quarrel with the noble and learned Lord. I am only too glad to think that I enjoy these royalties in an extraordinary way, and therefore perhaps noble Lords may think I have no right to criticise if I am going to lose them in an extraordinary way. I am bound to say that I feel myself under no moral restraint for these reasons from supporting this Motion, which I think the noble Lord ought to press unless he gets a very definite assurance from the Government this afternoon that they are going to do something to mitigate the many hardships and iniquities which are apparent in this Part of the Bill, as well as a very much fuller story and explanation than we have yet had from them as to the negotiations which took place between themselves and the so-called royalty owners' representatives, the agreements reached which are popularly assumed to be binding upon them and the calculations employed by which this figure of £66,450,000 was reached. As far as I am personally concerned, I feel I am in no way bound by any of those negotiations and agreements, nor am I a party to any assessment which may have been arrived at as regards the value of any minerals as part of this global total. That to me is quite plain and quite definite.
I am not a member of this Mineral Owners' Association, which I understand is a purely private body, and is indeed no more representative of the mineral owners as a whole than, for instance, the Stockbreeders' Association is representative of all those who breed stock on the thousands of farms throughout the country, or the Landowners' Association is representative of all those who own land. I do want to ask the Government very definitely under whose authority that Association represented the four thousand mineral owners in these important negotiations with the Government? What were their agency powers, and did they have a proper constitution? I have here the constitution of a federation with which I am very familiar, and of which I act in fact as an agent on behalf of the industry which it represents—the British Iron and Steel Federation. This is a property constituted body and it has in its Articles of Association very definite agency powers which are all enumerated in detail. There is a whole page. It 257 says that they are empowered to afford facilities in the communication and interchange of views between the members of the Federation and between the Federation and the Government and Government Departments and so on on all matters directly or entirely affecting the industry and to take action with regard thereto as may be considered desirable. They have an accurate definition of what an accredited representative means. They are agents elected by the members of the industry as a whole.
I do not believe that this self-appointed body, the Mineral Owners' Association, ever pretended to represent the royalty owners as a whole. I am perfectly sure that your Lordships would be most jealous of the sanctity of that authority and those responsibilities which you delegated to your agents, and that you will agree with me when I say that nobody has a right to usurp those powers without your official permission and connivance. There exists in my estate office no document whatsoever from the Board of Trade, the Ministry of Mines, the Treasury, or any other official body informing me or my mineral agent of the intention that this private association should represent me in regard to these most important official negotiations. Neither I nor my agent was officially informed of this iniquitous decision, that the value of my minerals was to be arbitrarily assessed by a tribunal before which I had no chance of giving evidence or of stating my case, and that I was to abide by the result, whereas the Government were free to take it or leave it. And indeed I believe that this was the experience of all mineral owners who were not directly represented on that Committee.
Not one of them was given any official intimation whatsoever of these mysterious negotiations and yet now we are presented with a fait accompli and told we must not say a word. I have no desire to minimise the efforts which were made by the Mineral Owners' Association on behalf of the owners whom they purported to represent, but I submit that they could not possibly represent them officially because they had not agency powers, and it is obvious, as the noble Lord who moved this Motion has told us, that they got themselves into a hopeless position. They had arrived at a complete deadlock in their negotiations, they did not know what on earth to do, 258 and in desperation they agreed to refer the whole matter to a Tribunal which they had no right to do at all in this case. They would have had no right to do it even had they been agents without reference back to the main body of those whom they represented. I submit that the Government had no right to place them in such a hopeless position in the first place, or to treat them as authorised agents for the mineral owners as a whole. It appears to me, and I think many of your Lordships will agree, that the whole matter was, to say the least of it, extremely unconstitutional. I am not at all sure that a point of legality is not involved which I hope the noble and learned Lord on the Woolsack will look into.
I have no desire to labour the question of principle involved in Part I of the Bill. That has been dealt with very fully by the noble Lord who moved the Amendment. I personally have always been opposed to the principle of nationalisation, but in the rapidly moving events and conditions of these modern days it seems to me that we must all be ready to sacrifice our principles to expediency with as little worry as we change our coat. I agree entirely with what was said by the noble Lord, Lord Hastings. I feel sure, however, basing my opinion on a fairly intimate knowledge of these matters and after full thought, that the chaotic situation which must arise from the entire divorcement of mineral and surface interests can only be rectified by the subsequent nationalisation of the surface. We are at any rate, as he pointed out, familiar with the principle of compulsory purchase. I would not have any objection at all to this Bill if that compulsory purchase were being carried out in a fair way. I should be whole-heartedly in favour of the Bill if I thought it was going to be of real benefit to the coal industry. But unfortunately, in common I think with the majority of those engaged in the industry, that is not my opinion, for reasons which have already been dealt with fully by other noble Lords in the Second Reading debate and which I do not propose to reiterate. I feel it will be one of the greatest millstones ever hung round the neck of that long-suffering industry.
259 What appears to me so grossly unjust about Part I is that while it sets up a perfectly good, reasonable and logical method of arriving at the true valuation of the minerals, both leased and unleased, in the hands of private owners, which I think I am right in saying they would be perfectly willing to accept and abide by, the Bill then completely and entirely destroys the logic and fairness of that by scaling the total figure up or down to a fixed and rigid sum which bears no relation whatsoever to the valuation that has been arrived at by what appears to us to be very arbitrary methods. I feel that the only possible way in which the Government can deal with Part I of this Bill without for ever leaving a black mark of gross injustice on their record, is to disregard this fictitious figure of £66,500,000 and to pay the full amount of compensation arrived at by the Regional Valuation Boards.
The noble and learned Lord on the Woolsack told us that we had better accept the findings of the Greene Tribunal because if the matter went to another tribunal we should not get such a fair deal. But it is quite unnecessary to go to another tribunal. Why should we not stand by the machinery set up in this Bill? What is the objection? The noble Lord, Lord Balfour of Burleigh, has an Amendment on the Paper which seeks to postpone the vesting date until after all the regional valuations are completed, and I hope your Lordships will insist on the embodiment of that Amendment in the Bill, in order that at least we can know before any compensation is paid what the total valuation figure is and whether this is a confiscatory Bill or not.
I want to say only one word on the point which was so ably dealt with by the noble Marquess, Lord Lothian, in the Second Reading debate. He pointed out that this global figure of £66,500,000 is based upon fifteen years' purchase of actual mining leases and that it does not take into account the fee simple on unleased but proven coal which the Government are going to expropriate for nothing. I am afraid I am not persuaded by the argument put before us by the noble and learned Lord on the Woolsack because it is quite obvious that only the actual leases have been taken 260 into consideration by the Greene Tribunal. That cannot possibly be fair. This fee simple has a definite value and that value has been recognised through past centuries in all transactions which have taken place between a willing vendor and a willing buyer. Surely the owners are entitled to a proper value on those minerals which, although they are not now under lease and may indeed not come under lease for fifteen years or more, yet have in many cases been bought by them to ensure their future income and have enhanced in value since the date of purchase. The Government say that all those minerals will come under the consideration of the Regional Valuation Board and compensation will be given. But what compensation? A compensation that is scaled down to meet the global total and a compensation which was not brought into consideration when the global total was fixed and therefore must be deducted from the amount of compensation available for the actually leased coal. Could anything possibly be more unfair? I submit that in spite of what the noble and learned Lord on the Woolsack has told us, that is the actual fact.
The noble Marquess said he thought that fifteen years' purchase was a perfectly fair valuation for the leased coal, but there I disagree with him for the following reason. It is true that the Inland Revenue authorities do generally use the 7 per cent, table in valuing mining royalties for Death Duties which they consider to be a 7 per cent. risk. The 7 per cent, table gives you approximately fifteen years' purchase. But they used that table when gilt-edged securities gave a yield of 5 per cent., and when the arbitration took place gilt-edged securities stood below 3½ per cent. Therefore it was quite unfair and illogical to use the 7 per cent, table. To-day, colliery debentures, which rank after royalties, stand at an average of 5 per cent., and therefore it is still more unfair and illogical in my opinion to say that royalties are still a 7 per cent. risk. In my opinion twenty years' or even twenty-two years' purchase would be a much fairer basis, taking leases alone.
Finally, I do hope that the noble Lord, Lord Hastings, will not withdraw this Motion unless he obtains an assurance from the Government that they will alter 261 and amend Clause 12 in respect of the freehold coal owned by colliery companies. Obviously in their case the risk is very much smaller than in the case of coal held by the private owner and the coal therefore must be more valuable. I think I am not wrong in saying that the noble and learned Lord on the Woolsack drew a distinction in his speech on the Second Reading debate between coal owned by colliery companies and coal owned by private owners: the risk of the future working of coal held by private owners was greater than in the case of that owned by colliery companies. At least that is the way I interpreted what he said. I do not know whether that is what was in the noble and learned Lord's mind. Of course it is not. Therefore it is most unjust that they should be compensated on the same basis, a basis which bears no relation whatever to the price which they have paid for the coal. It seems to me most unjust also that they should be penalised, as they will be, for having exercised that very foresight in regard to the wise working of their mines which successive Governments have very rightly encouraged them to do.
There are in my view other very dangerous aspects of the Bill which I am not going to deal with here but which will be adequately dealt with, I have no doubt, by your Lordships at a later stage. There is the grave danger of giving very much greater power in the future to the Commission in regard to the actual working of the mines and the safety of the mines and the miners than the owners have at present. I am extremely disappointed to see that nothing has yet been embodied in the Bill to compensate that great body of mineral agents who will be unemployed as a result of the Bill. I know the royalty owners are in a very weak position, but it is a position which I submit arises entirely from the paucity of their numbers and not from the poverty of their case. It arises from a lack of understanding of the technicalities of this question both by the general public and by members of the House of Commons. It arises, I submit, not from any fault of theirs; they have been the: political stalking-horse of the coal industry for several years past. But none of these reasons preclude them from claiming full protection and fair play from Parliament and this Government in respect of that property which is undoubtedly legally theirs, and of that justice which should 262 always be indiscriminately meted out to all classes and all sections of the British public.
§ VISCOUNT HORNE of SLAMANNAN
My Lords, I shall not occupy the attention of your Lordships for more than a few moments, but I desire to take advantage of the opportunity afforded by the Motion which has been put upon the Paper and so eloquently moved to-day by the noble Lord, Lord Hastings, to ask a few questions from the representative of the Government in order at least to clarify my own mind upon some of the topics which are raised by Part I of this Bill. On the last occasion when I addressed the House I stated what I still feel: that I do not feel any undue pessimism at the taking over of the coal royalties as a matter of principle. I do not associate it with nationalisation at all. So far as that argument addressed to your Lordships by Lord Hastings is concerned, I do not propose in any way to support it.
Of course, it is very obvious that a vast property is being taken away from the royalty owners of this country with what seems to me to be very inadequate compensation. Their incomes will be reduced by one-half, and that is not a situation which anybody can be expected to contemplate with equanimity. The noble and learned Lord on the Woolsack said that of course there would be hard cases, and he instanced two cases which he thought were parellel with that of the royalty owner under the present Bill. I tremble at the knees whenever I think of questioning the opinions of the noble and learned Lord Chancellor, as I was accustomed long ago to plead at the Bar of this House, and acquired a respect amounting to a tremulous admiration which rather ties my tongue when I come to question anything which the noble and learned Lord has said. But, if he will forgive me, I do not think that either of the cases which he gave was in any way apposite.
He instanced the case of the Government reducing the amount of interest to be paid upon the War Loan as an instance where the Government interfered to the detriment of the pockets of the people and the people could not take any exception. But the House will, I am sure, notice this discriminating feature of the case of the man who was affected by 263 the conversion of War Loan: he was entitled to take out his money. He was entitled to get his capital, and that is what is being denied to the royalty owners in the present instance. Another of the parallels which the noble and learned Lord ventured to put to the House was that of a man whose property was taken when a circular road was being built round any community. He said that that man was a hard case who had purchased his property at a higher value than he got at the time he was being compensated. But the man in that case was getting the market value of his property as valued by an expert valuer at the time. The royalty owner does not claim anything more than that here. He would be perfectly content if his royalty were valued and he were paid that amount which an expert judged to be due. These two cases, therefore, instead of inducing me to take the Government's point of view, seem entirely to fortify the case which the royalty owners are putting before this House.
That brings me to the first point upon which I want to ask a question. The coal is to be valued between now and the year 1942 according to the system put forward in this Bill: by a whole series of individual valuations. What is the difficulty to the Government of giving the value which has been arrived at by these expert valuers under that system? I confess I failed to follow the noble and learned Lord on the Woolsack when he suggested that it was impossible to do the very thing which the Bill is providing for. These valuations are individually going to be taken, and I confess that I have great sympathy with the Amendment which is to be put forward by my noble friend Lord Balfour of Burleigh to postpone the vesting date under this Bill to the period at which all these valuations shall be completed. Then the House and the country will be made aware of what the actual expert valuation of these properties is as compared with the global figure which has been arrived at by the multiplication of £4,000,000 odd by fifteen. I am sure that the royalty owners will be willing to accept whatever valuations are arrived at by these experts, but I hope the Government will equally recognise that the amount by which they are preparing to compensate the royalty owners for the property which they are 264 getting is very inadequate compared with the actual valuation of the properties.
It is said—and of course this is a difficulty from which the royalty owners suffer in certain cases—that you have here the decision of the Greene Committee. Of course, no body of men more expert and more distinguished could have been got to serve upon such a Committee. They were restricted within very narrow limits. They were told that they had to find a certain number of years' purchase for a certain figure of £4,430,000.
§ The LORD CHANCELLOR
No, that is wrong. It is absolutely wrong to suggest that what they had to do was to give the number of years' purchase based on the figure £4,430,000 and no more. What they had to do was to ascertain the value of the coal, with that piece of information given them and with the evidence that was necessary to establish before them whether that figure would go up or go down. That is quite different from what my noble friend has said.
§ VISCOUNT HORNE of SLAMANNAN
Well, they were given a figure of £4,430,000 which, it was said, had been agreed to by a joint committee of royalty owners in negotiation with the Government.
§ The LORD CHANCELLOR
Had been agreed to as what? As the result of the working for seven agreed years, which was a past figure. The whole point was, what was going to happen in the future. That they had to ascertain in order to fix their number of years' purchase.
§ VISCOUNT HORNE of SLAMANNAN
After listening to the explanation of the Lord Chancellor, I am not sure that his description of what took place differed very much from what I put forward.
§ VISCOUNT HORNE of SLAMANNAN
In fact what they did was to multiply this £4,430,000 by fifteen. That is the actual fact, and that figure of £4,430,000 was not a figure that they had arrived at, but a figure which had been arrived at independently of the Greene Committee. Let us see how this figure of £4,430,000 was arrived at. I must confess that my disquiet and anxiety have been greatly 265 increased to-day by the revelation which the noble Earl, Lord Dudley, has presented to the House. He says that there is not in his estate office a single communication, either from the royalty owners or from the Government, with regard to these negotiations which have taken place. I should like to ask the noble Earl who is to reply at the end of this debate what the facts about this matter are: how many royalty owners are there who have sent in claims for registration since the Bill was announced.
§ VISCOUNT HORNE OF SLAMANNAN
Then I would like the noble Earl to inform us how many royalty owners were represented on that Committee, and what action did the Government take in order to discover whether these people were accredited representatives of the royalty owners—whether they can be taken as in any way representing the royalty owners. They are not a body constituted by Statute in any shape or form, and how can they" be regarded as people accredited to bind all the other royalty owners? I could quite well understand the Government meeting a body, supposed to be expert, for the purpose of consultation, but the Government in this case did something far more. What they did was to get these people to agree, on the part of all the royalty owners, to this figure of £4,430,000, and further and worse than that, they got this Committee, as if they were accredited representatives of all the royalty owners, to agree the result of an arbitration, and in effect to bind all the royalty owners of the country.
I want to know what right they had to do that and what inquiries the Government made as to the rights of these particular people. The Lord Chancellor is, of course very familiar with the company laws, but under the Companies Acts you could not affect the interest of any single shareholder in a company in this way without sending a notice to each of them, and the royalty owners, to the number of 17,000, ire supposed to 266 have consented to the result of an arbitration in which they were not effectively represented at all. If these are the facts they are very disquieting facts, and the reply made to Lord Dudley and others, that they were entitled to come forward and present their own case, and refuse to accept the decision of these people, does not improve matters, because unfortunately the harm has been done. The country has been informed that the royalty owners as a whole are bound to accept the results of an arbitration to which the bulk of them were never parties. I would like an answer from the noble Earl in reply, in order to see exactly where we stand in that matter.
There is another question which I would like to ask, and that is as to the separate position of freehold owners of coal, the great bulk of whom have purchased for the purpose of getting rid of all restrictions on the working of coal. Was their case ever put before the Greene Committee? We are very much hampered by not knowing what happened before the Greene Committee. What kind of evidence was led, and who was supposed to give the testimony which is regarded by the whole country to-day as binding upon this large body of people? I think the Government have a very serious responsibility in this matter. It is a very difficult thing in this House, with all the prejudice created against members of this House, to seek to defend the holding of property in this country. Prejudice has already been disseminated in some of the newspapers as to the individual interests of noble Lords. I recognise the delicacy of that position, and I think it is very incumbent upon the Government to see that nothing that has the semblance of unfairness should be created by this Bill. I think they have a very deep and real responsibility in this matter, for they are a National Government, supposed to represent the interests of the nation, and I do beg that all these matters, which are creating deep anxiety, should be taken carefully, into consideration before the Government make up their mind as to which particular clauses of this Bill they are going to proceed with.
My Lords, I rise to support Lord Hastings, even though I am not quite sure how far I can go with him with regard to his views on the 267 sanctity of private property, and in his hostility to compulsory acquisition of it. I think he made his position abundantly clear in the debate on the gracious Speech in October last, and I must say that I felt then, and still feel, more in accord with the sentiments expressed by Lord Halifax, when he replied for the Government and used these words:I cannot feel that, provided a case can be made out for the expropriation by the State of individual property, there is anything inimical either to private property or to Conservative principles provided that fair compensation is paid for it.I would underline the last words.
We have heard a great deal about the need for unification of royalties, and it appears from the evidence which has been provided that in some places the existing system does answer satisfactorily, and does not answer quite so well elsewhere. On the whole I should say that a good case can be made out for unification, provided that it can be shown, without any shadow of doubt, that the provision for settlement of disputes by the Railway and Canal Commission has failed. But can it be said that the compensation which is now suggested for royalty owners under this Bill is fair? Candidly, I think that the method of valuation is not only grotesque but absurd and extremely clumsy. It must inevitably lead to great unfairness to mineral owners. The noble Lord on the Woolsack, in the Second Reading debate, mentioned the compulsory acquisition of land in the past for railway construction. Of course that was necessary, but I venture to suggest that if a system of compensation had been adopted then similar to the one contemplated now for the acquisition of coal royalties, the development of the railways would have been delayed for many years. For railways land was valued field by field on its merits. I submit that that is the only fair system, and if coal properties were valued now in the same way I do not suppose that we should have much cause for complaint.
In the Second Reading debate Lord Munster and the noble and learned Lord on the Woolsack dealt with the question of the global figure which the Government insisted was the only method of dealing with the valuation. I have the noble Earl's words in the Official Report and I think he did say that the 268 arrival at that figure was a necessary preliminary to bringing in this Bill. We are told that we must abide by the award of the Tribunal. But who were the gentlemen who negotiated on our behalf? Who appointed them? And whom did they really represent? I think it has been explained quite fully by Lord Hastings that these gentlemen were chosen by an Executive Committee of the Mineral Owners' Association who were never selected for that particular work, and I wonder whom they did really represent. I think that if we, who are members of that Association, had known what was going on we should have taken care to be represented as a body by men who are accustomed to negotiating with Government Departments and other authorities. My experience of them leads me to suppose that the first article of equipment of which they possess themselves is a very long spoon, and I do not think that they are in the habit of being led up the garden path to agreements that are perfectly preposterous.
It seems to have been stated over and over again that the royalty owners outside the Mineral Owners' Association are insignificant in numbers because 80 per cent, of the royalties are owned by members of the Association. I do not think that figure is by any means impressive, because we know that a very few owners own an immense proportion of royalties. We have had the number of royalty owners put at 4,000, we have heard elsewhere that it is 6,000 or 7,000, and we have heard this afternoon that 17,000 registered under the Registration Act. I would like to press the noble Earl, Lord Stanhope, to inform us, if he can, whether the Mineral Owners' Association actually represents 10 per cent, or 20 per cent., or more or less, of the mineral owners, and I would also like to know if any intimation of the Government's intentions was sent to the mineral owners outside the Association.
In spite of what the noble and learned Lord on the Woolsack has said this afternoon, I cannot agree that the figure of £4,430,000 that was given as a basis of consideration by the Tribunal was a correct basis. I have it on the authority of those who have dealt with these things for very many years that it was an incorrect basis, and that it was in fact nonsense. Nonsense was multiplied by 269 fifteen and, though I am no mathematician, I believe that, however many times you multiply nonsense, it still remains nonsense. I must confess that, supposing they had multiplied it by an appreciably larger figure, I should perhaps not have felt so aggrieved, although the method of arriving at it was peculiar. As it is, in spite of what has been said this afternoon, I feel perfectly sure—and I think that many of us. are in agreement—that even those who have thirty or forty years' life in their collieries have no hope of receiving anything like adequate compensation, probably nowhere near fifteen years' purchase.
One word about the unworked coal. Of course we do not know what facts and figures were presented before the Greene Tribunal. We do most certainly know that there are several hundred years' coal yet to be got. It is quite impossible to value that unworked coal, and one wonders if the Tribunal assigned any cash value to it whatsoever. It appears that the Government, or the Commission, is getting the whole of that for nothing. It may not be a very real hardship in many cases to individuals, because it may be that in their lifetime there would never be any return, but it is very different for those who maybe called abiding corporations, like the Church, colleges, and indeed families, who have looked forward to a future income when existing collieries are worked out. It seems that the Tribunal has said in effect, "There is no present cash value for this reserve coal, therefore the coal will be taken for nothing." I contend that if the Government really mean to deal with this matter in an equitable manner they will leave reserve coal in its present ownership and treat for its acquisition when the time is ripe for development.
Two noble Lords in the Second Reading debate expressed their intention not to vote on this Bill. I think the noble Marquess, Lord Lothian, made some qualification. I hare no quarrel with them; they are at perfect liberty to vote or not vote as they like. But I think that some of us without any moral turpitude can feel that we have a right, and indeed a duty, to vote on behalf of those who must inevitably lose their employment if we do not receive adequate compensation under this Bill. Many of these, by reason of age and infirmity, will never 270 find employment again, and I think they deserve our anxious consideration.
Twice this afternoon that red herring that was drawn across the trail in the Second Reading debate has been mentioned—the question of valuation for Death Duties, and one hesitates to square yards with a distinguished lawyer like the noble and learned Lord on the Woolsack. But there are others whose opinion also is worth having. I had to pay a double dose of Death Duties in 1924, and I engaged to look after my affairs a past President of the Surveyors' Institute, who I think knows his way about. Only yesterday he told me that the system then obtaining obtains to-day, and that the value accepted by the Revenue Department is for a flooded sale, and not for a normal sale between a willing buyer and a willing seller. If that be so, then the comparison with the case now before us is wholly irrelevant.
In conclusion I would say this. If we were being called upon to make a great sacrifice for a national cause I think our attitude would be quite different, but many of us feel that the motive behind this Bill is purely political in character. It is a sop to Cerberus, and Cerberus has shown its contempt for it in the way that members of its species have. We can see in this Bill no benefit to the industry, to the consumers, or to the men who work at the coal face, and I believe that we are within our right to protest against and to resist the parts of it that are unfair, in the hope that the Government may reopen the question of compensation and remove glaring injustices.
THE MARQUESS OF LOTHIAN
My Lords, I do not propose at this late hour to do more than ask the Government one question. The noble and learned Lord!on the Woolsack has given a very full and considered answer to certain criticisms of the methods of valuation which I ventured to make to your Lordships on the Second Reading of the Bill. He has said that the reason why the valuation has been fixed at fifteen years* purchase of the annual sum of £4,430,000, involving a loss of £2,000,000 a year to the owners, is because evidence was led before the Greene Committee to show that the revenue from this revenue-producing asset was liable to fall for various reasons. I venture to ask the 271 noble and learned Lord and the Leader of the House whether, in view of the feeling of disquiet and the sense of injustice which exist among noble Lords, and the stories which are going about as to the way in which these figures were reached, it would not be right and proper that the proceedings before the Greene Committee should be published.
I do not understand why in a matter of public concern like this the proceedings were not published at the time. In matters of this kind affecting the public interest I should have thought that the normal procedure would be that the evidence on which this great decision is to be based should be made public at the time. Why cannot a Report be published now? It is a public question: What is the true value of the fee simple of all the coal in this country? I think it would at any rate remove some disquiet, and it might convince noble Lords that they are not being unjustly treated if the evidence led by learned counsel before this Commission was made public. We should at any rate know where we were. The ordinary process of a Court is to hear evidence on both sides, the Judge then sums up and gives a verdict, and I do not see why these proceedings should not be made public. I do not suppose the Report could be published before next Tuesday, but I would ask the Government whether at the earliest possible date they will publish the proceedings about this vital question, the arguments that were used, and the evidence that was led.
§ LORD CROMWELL
My Lords, before I address myself to the subject we are discussing I should like to be allowed to make one reference. In my speech on the Second Reading I made a reference to Mr. J. P. Dickie and a publication entitled Mining Royalties in Relation to the Coal Bill. In that speech, which I have confirmed from the Official Report, I implied that the figure quoted in that publication was wrong in that the author said that the value which the Samuel Commission attributed was £100,000,000, and I said that Lord Samuel had corrected that in this House by saying it was £92,000,000 plus £8,000,000. It is true to that extent that he did say that and I was wrong in saying £100,000,000 was quoted by Mr. Dickie. I apologise to him for any misunderstanding in that connection.
272 It is now late, and I fully realise that I had perhaps more than my share of your Lordships' time during the Second Reading debate, so that I will endeavour to be as brief as possible. But it must be clear to all your Lordships that there cannot be any desire on the part of anyone connected with the industry that this Part, at any rate, of the Bill should become law. One can only regretfully come to the conclusion that the Government are insisting on carrying this Part of the Bill for political purposes, in the belief that they are carrying out their Election pledges. It is true that "unification" appeared in the Election pledges, and I am not going to labour the point whether this is unification or nationalisation. I tried in my Second Reading speech to show that it was not, in fact, nationalisation in the true sense in that it did not interfere with the management of the industry itself. Before I pass from that, I must say I feel a certain disquiet because of some words which have fallen from noble Lords opposite representing the Socialist Party, who have certainly indicated that they intend to do their best to use this as a stepping stone to nationalisation. It would appear from the remarks of the noble Earl, Lord Munster, that the Government admit that the purchase of royalties will make no financial contribution either in the direction of making coal cheaper for the public or facilitating the more economic working of the mines themselves. The Government appear to base their case chiefly on the fact that they wish to remove grievances from the minds of uninformed miners. I do not think these grievances exist in the case of informed miners. It has been stressed that one reason for purchasing the coal is in order to place it in one hand, because the surface boundaries are stated to be a handicap to the economic development of the coal underneath.
All the arguments used in support of this Part of the Bill by the Government are arguments which were to a certain extent valid before the Railway and Canal Commission was set up, but it is very doubtful whether they have any validity at all at the present moment. The Government can easily achieve anything they desire in the way of unification by quite a different method. It has been stated that the collieries are handicapped by 273 having so many owners with whom to deal. I should have thought that they themselves would be the best judges of that, and those who represent them have quite clearly indicated in this debate that they would, in fact, prefer the present system to having to deal with a cold-blooded body working from Whitehall, as the Commission of necessity must be. Actually, of course, in a lot of cases the owners of coal have to deal with several collieries. The reason for that is that colliery proprietors have found that established boundaries were inconvenient, and they have disregarded them altogether and set up spheres of influence, disregarding surface boundaries and working quite regardless of them. So it cannot be said that there is any particular reason for dissociating the surface from the coal. They have also said they would much prefer the personal touch which exists with the present owners to dealing with a public body.
I should like at this stage to mention that there was an alternative scheme suggested to the Government, to which the then Leader of the House, Lord Halifax, said he would give clue consideration. I admit that that scheme was introduced at the very last moment, as I said on the Second Reading, and I also said, as I must repeat, that there could not have been sufficient time for consideration of that suggestion because it was turned down in the course of a very few hours. That scheme does, in fact, carry out the whole of the Election pledges of the Government in that it anifies the whole of the coal under one ownership. But let it be said there was no mention made in the Election pledges of purchase. It was only "unification," and the scheme we put up would be exactly the same as the present one with the exception that the Commission, instead of owning the coal, would have the full powers which they have under this; measure, while the owners of the coal would become shareholders in the concern. If the coal income decreased they would suffer accordingly, if it increased they would benefit accordingly. That is all we are asking for. We are asking for fair treatment and to be allowed to enjoy the income from a property which it has been admitted is ours by right, morally and actually.
274 It is quite fair to say that neither the Government nor any member of your Lordships' House is obliged to accept the verdict of the Tribunal. We are perfectly independent bodies of people, and if perhaps you can correctly say that individual owners are bound to accept it, that does not in the least bind us or the Government to accept it. It has been already emphasized, and I confirm it, that the valuation is the valuation of the leases and not the valuation of the coal as a whole. The noble Earl, Lord Munster, said in effect—and I was very interested to hear him say it, and it has been confirmed to-day by the noble and learned Lord who sits on the Woolsack—that some owners would get less than fifteen years' purchase and some would get more. I can only say that in my own circumstances, if anybody gets more, I should, because I consider my coal is in perpetuity and the income is not likely to lessen. I am therefore happy to get that announcement confirmed by the noble Lord on the Woolsack. I will add this, that if I do get more than fifteen years' purchase, I shall be perfectly prepared to eat my hat, and I shall take the precaution of seeing that the hat is made of some edible material like that of the gentleman we read of in the newspapers the other day. I think it is certainly true to say that if any proportion of owners get more than fifteen years' purchase, then anyone who has coal not in lease, and more particularly anyone who has coal which is not proved, will get nothing better than the usual farthing damages. If you think that is fair I do not. It is expropriation. We have had a definition of expropriation, so that one is safe in using that term.
Perhaps I may be permitted to allude to something said by the noble and learned Lord who sits on the Woolsack. He is not in his place at this moment, but I think it is in order in his absence to make the allusion. What he said about the facts and the information upon which the Tribunal based their award is a two-edged sword. He said that, of course, there were individual risks which a concern ran which were not applicable to the whole of the coal in the country. I was very glad to hear him say that, because that had been obvious to me all the time. It is proof that the valuation for Death Duties of an individual concern has no bearing whatever on the number 275 of years' purchase or the value which the whole of the coal of the country is worth. The Death Duties calculation has no bearing upon value at all for this purpose. I said during the Second Reading debate that I was perhaps the only member of your Lordships House who sat through practically the entire sittings of the Tribunal. I was admitted by ticket, and I heard practically all the evidence. I definitely came to the opinion, rightly or wrongly, that from the evidence given from the Government side the award was based chiefly, and indeed almost entirely I might say, on the evidence in regard to Death Duties. I think the idea that Death Duties are a criterion for this purpose has been entirely exploded, and therefore I think that the Government ought to give up what has been called this nonsense method of calculation.
The noble Earl the Leader of the House, in replying to the debate on the Second Reading, said the facts presented indicated to his mind that the Government had not in fact used rubber truncheons. I would agree that they were not rubber truncheons. They were third degree methods, and I would prefer rubber truncheons to third degree methods. I do not think, although certain aspersions have been cast on what the representatives of some of the coalowners did at the Committee, they could have done anything else. Whether they were right or not is another matter, but they could not have done anything else faced as they were with the Government's statement. It cannot be denied by any member of the Government—and I challenge any member of the Government to deny it—that the coalowners' representatives were told that they must suggest a figure which the coal was worth. That they did, and it was something in the nature of the value which had been placed upon the coal by Commissions in the past. They were told that that figure was quite out of the question. The Government then were asked what was their alternative offer, and they had none. The royalty owners were asked again to state a figure, and they gave a figure which was not very much lower than that appearing in the Samuel Commission's Report. It was decided that it was not worth considering. They were told that the negotiations were at an end and that they would see in forty-eight hours from 276 then a figure set out in a Bill which would be placed on the Table of the House of Commons. I challenge any member of the Government to disprove that statement. If it is wrong I shall be only too glad to hear a statement to that effect.
It was also stated in the Press that the Tribunal had awarded a lower figure than that offered to the royalty owners by the Government. I am not saying the Government said it, but it was said in the Press. It was contradicted by someone but the contradiction was put in very small print. I also challenge the Government to say that they made any offer at all or quoted anything. They did not. I should say myself that in any transaction between a willing buyer and a willing seller any reputable firm acting as a purchaser would be bound to make a reasonable counter offer to any suggestion of price which may have been made. One has to bear in mind that the figure arrived at by the Samuel Commission was £92,000,000 as opposed to the £66,450,000 in this Bill, and then the interest rate of gilt-edged securities was 5 per cent., while now it is barely 3¼ per cent. Having regard to the altered value of money, to produce the income of £92,000,000 suggested by the Samuel Commission as fair would now require at least £120,000,000.
The noble Earl the Leader of the House said in his reply that he thought we could not compare coal with gilt-edged securities, and that if you were to try and invest the capital sum in gilt-edged securities you were bound to have a decreased income. He admitted that, and of course it is true, but he went on to say that he did not see any reason why the capital sum should not be reinvested at 5 per cent, although he qualified that statement by saying that 5 per cent, investments would be difficult to come by. I think your Lordships would certainly subscribe at any rate to this latter part of his statement. No doubt your Lordships were interested to hear the noble and learned Lord on the Woolsack say that he intended to introduce an Amendment which would give wider investment powers to trustees on behalf of tenants for life. That was a welcome contribution which I hope when we come to see it in words as an Amendment will really implement what one would normally understand from that statement.
277 There is one thing which at this stage I might be allowed to say a word about. There is an Amendment down about this matter which appears in the Third Schedule. It will be quite impossible for any trustee to know how to deal with the capital when he gets it. I would like the Government spokesman if he would be so kind as to clarify that position before we go very much further. I am advised that unless some Amendment is introduced which gives the trustees power to allot the sum in the way they think fit, it will mean in every case where there is a trust that they will have to go to the Courts to decide exactly how the sum is to be distributed. That will be a costly matter, and the expense will be put upon the individual and will not come under this Bill. I was also very glad to hear what the noble Lord who sits on the Woolsack said about the wasting property. I would like to confirm what the noble Earl, Lord Dudley, said, and that is that it is the general rule that very few royalty owners have had to put aside anything for capital. As the law stands it says that unless there is a clause in the trust which says no annual amount need be set aside for capital then some must be set aside, but unless a clause to that effect is included in every trust it means, as the noble Earl, Lord Dudley, said, that the owner of the coal can enjoy the full increment of his royalties. Whether that is right or wrong is not the point. It is the law.
Coal has been referred to as a 7 per cent, investment. That to my mind is putting it in the category of slum property. One has to bear in mind that coal royalties, rightly or wrongly, are the very first charge on the industry. As the noble Earl, Lord Dudley, said they come before debentures. Therefore if the colliery is working at all the royalty owners are bound to receive their money. It may be wrong or it may be right, but that is a fact. Therefore in my view it makes it a gilt-edged security. In addition to that there is no upkeep whatever, because the figure arrived at is a net figure. Management has been deducted and as it is a net figure there is no outlay whatever. You have the whole of your money to spend, whereas in the case of other property you have upkeep. Income Tax, Surtax, Mineral Rights Duty and Welfare Levy of approximately 50 per 278 cent., is already deducted, and then we are told that the other half or thereabouts should be treated as capital. The Government cannot have it both ways. They must make up their minds which way they prefer. The noble Marquess, Lord Londonderry, said that bad as the measure was, it was our duty to support the Prime Minister in very difficult times. There must be some value in that statement. Of course, there are a certain number of royalty owners who are prepared to take anything now rather than perhaps get something less later on.
I only want to make one other allusion and that is to the speech of the noble Viscount, Lord Home, on Second Reading. Speaking as an ex-Chancellor of the Exchequer and as one with no interest whatever in the industry one could not fail to be impressed by what he said about the Bill. It would appear to resemble robbing Peter to pay Paul, with the difference that it is robbing Peter to pay Peter. The Government are giving us something and half the income will be used gradually to pay off the stock. Provided you ignore the fact that there must be some expenses of the Commission, it means that at the end of twenty years they will have repaid the whole of the stock and be in possession of the whole of the coal having paid nothing for it. One can only say it is "the Tribunal, the Tribunal, and nothing but the Tribunal, so help me God." I should like in conclusion to associate myself with what has been said about mineral agents. I think they have a just claim to be compensated, because in fact the expense of management was deducted from the figure and there is an absolute right that they should be allowed to have it.
§ Moved, That the debate be now adjourned.—(Lord Balfour of Burleigh.)
§ On Question, Motion agreed to and debate adjourned accordingly.