§ 2.35 p.m.
§ Order of the Day for the Second Reading read.
§ THE PAYMASTER - GENERAL (LORD MACDONALD OF GWAENYSGOR)
My Lords, your Lordships will not be surprised to learn that when I first received the intimation that I was to move the Second Reading of this Bill during the first Sitting of your Lordships' House after the Recess, I experienced something of a shock. That shock was intensified a few hours later when I heard a sentence attributed to Lord Morley. Lord Morley was referring to his experience in addressing your Lordships' House, and he used these words:I have had fifty years' experience of public life, and your Lordships' House is by far the most difficult assembly which I have had to address. What disturbs the speaker is not opposition, because that stimulates and brings out reserves of power; it is the silent resentment evident in your Lordships' faces.That sentence would have been devastating, were it, not that in another place I had been privileged to look at the faces of many who are now members of this House. It is true that sometimes I saw those faces frown with disdain when 2 listening to an inconclusive and unconvincing argument, but on the whole they were friendly faces, and that encouraged me most. I was further encouraged by the noble Viscount the Leader of the House, Lord Addison, whose absence from to-day's proceedings I know we all deplore. He said to me: "Don't you worry too much. You will find the House of Lords, to one of their members venturing forth for the first time, the most sympathetic Assembly in the world. Further, you are dealing with a subject with which you ought to be intimately acquainted."
It is now well-nigh fifty years since I was brought into very close and direct contact with this industry. The day that I was thirteen I entered a pit cage for the first time, and I was almost literally hurled some 1,500 to 1,600 feet into the bowels of the earth. There, I was employed fifty-four hours a week and I received in return for my weekly wage a golden half-sovereign. I was rather interested in looking back, and I asked for some figures so that we might compare them and also learn what this industry has done in various ways during the first half of this century. I asked what was the cost per ton raised in 1901, and I was told that it was 8s. 9d. In 1947, the latest year for which figures are available, it was 40s. 3d. per ton. I also asked what was the average yearly wage of a miner in 1901, and I was told that it was £79. In 1947 it was £347. Those figures indicate that this industry has made some progress during this century. I do not think that any industry has occupied so much Parliamentary time during that 3 period as has the coal industry. The number of references in Hansard of both Houses to the coal industry during this century is amazing. There is a mass of legislation, and to-day I am asking your Lordships to agree to add to that mass of legislation.
The Bill before us attempts to amend two Acts of Parliament, the Coal Mines Act, 1911, and the Coal Industry Nationalisation Act, 1946. Part I deals with the latter of those Acts. I know that there will be general agreement in your Lordships' House that the 1946 Act needs amendment. I should be amazed if any member of this House were to rise to his feet to-day and suggest that that is not so. I anticipate unanimity on the need for amendment. It may be—I sometimes fear that it will be—an ominous unanimity, to be used later on to emphasise that what is wrong with this Bill is that it does not do enough, that it is too small, that it niggles instead of dealing drastically with matters which need to be dealt with in relation to the 1946 Act. The Government feel that the day has not yet arrived when a general revision of the provisions of the 1946 Act is required. They agree that that day will come, and may come before long, but the experience up to date indicates that though a drastic revision is unnecessary at the moment there is need to-day for some modifying amendments.
Clause 1, which may be the most contentious clause in the Bill, deals with the constitution of the National Coal Board. I would like here—and I am sure your Lordships will agree—to pay a tribute to the National Coal Board. They are a body of men who have been sorely and severely criticised, but I wonder how much better any eight or nine of us, having been entrusted with the same obligations and the same responsibilities, would have done since the vesting date in January, 1947. The members of the Board have had a difficult task, but they have realised that changes are required, and they have made changes on their own. As your Lordships know, the original Board was composed of nine men, including the Chairman, a Deputy Chairman and seven members, all of whom had functional responsibilities. To-day, we find that, apart from the Chairman and Deputy Chairman, the 4 Board has been increased by one part-time member. We also find that more than half the Board have been relieved of their functional responsibilities and have only general responsibilities. That is a massive change.
I know your Lordships will agree that to set up a perfect board would be utterly impossible. Deciding the best type of board is a difficult thing. Many of the biggest industrial concerns in the country have a board of full-time directors; others have some full-time and some part-time directors. It has been necessary to gain some experience in deciding which type fits best into this nationalised industry. The Minister of Fuel and Power himself, some ten or eleven months ago, indicated that he felt the time was approaching when it would be necessary to have part-time members of the Board. The committee set up by the Coal Board itself—a committee of three, with a part-time member—recommended that additional part-time members, along with an additional Deputy Chairman, might be added to the Board. Clause 1 of the Bill carries out that recommendation in its entirety.
If I needed any support in this matter of the necessity for part-time members of this Board I should refer to the noble Viscount, Lord Swinton. On June 18, 1946, in the debate in your Lordships' House on the Committee stage of the original Bill, the noble Viscount said:I am sure there could not be any greater fallacy than to say that nobody is going to be a director of one of these concerns unless he is going to devote his whole time to it.Earlier, the noble Viscount had said:… or you can have a 'mixed grill' …The noble Viscount must have been thinking about the pre-war type of mixed grill! I have found further support from another member of your Lordships' House, the noble Earl, Lord Selkirk, who will perhaps allow me to quote him. The quotation is a fairly lengthy one, but I would ask your Lordships' indulgence to read it, because I have never seen a finer defence of the principle of part-time members of a board of this kind. Speaking on November 3, 1948, in a debate on nationalised industries, the noble Earl used these words:I suggest further that the only way to secure independence, or some element of independence, at the present moment is by having part-time directors. I would press this 5 point. I believe that our thoughts are moving in that direction. There are three things which make that essential. The first is greater independence. In nationalised industries there is a grave danger that a man has the alternative of continuing in a situation of complete frustration or of going out into the wilderness, where his own special capacity and ability can have no scope. The Jesuit is that he has to do what he is told, or leave and lose his means of livelihood. The second advantage of having part-lime directors is their wider experience in other fields, and the third is that administration and advice are not always identical they are separate. The man who can give advice is not always a good administrator, and that is particularly true among trade union men. When it comes to advice, many of them are first-class, but their administrative ability is nil. I suggest, therefore, that more consideration should be given to part-time directors.I need not add a single word, my Lords, to that convincing statement. All I would say is that Clause 1 is the result of such recommendations and of other contributions made in this House by noble Lords opposite. I know that the clause may not go far enough, and no doubt the noble Viscount, Lord Swinton, will emphasise that when he speaks. But I think it does go far enough to justify my asking for the approval of your Lordships' House to this Bill, even though the constitution of the Board may not be quite what some desire.
Clause 2, though possibly less contentious, is a very important clause. We know that at the moment the activities of the National Coal Board are confined to this country. They cannot do anything abroad. Clause 2 is designed to assist them to do what their predecessors did abroad, and to free them of all those limitations imposed by the Act. In this House, of all places, I need not emphasise the importance of the export trade; there is no body of men in this country more conscious of the importance of safeguarding the development of the export trade in general, and of coal in particular. It would be wrong of me to cast any reflection on the exporters. I think they have done, and are doing, a very fine job indeed. At the same time, I do not think that we ought to ask the National Coal Board, with the responsibilities that we have placed upon them by the Act of 1946, to do what is required of them in the Act, without affording them the same liberty of action that their predecessors had in all fields in this country and other countries.
I know that for the Coal Board to become an exporting agency may have its 6 risks; it would be useless to deny that possibility. At the same time, however, I do not think it right or proper to make the Coal Board in any degree dependent upon a body outside itself. I have paid a well-deserved tribute to the exporters, but the exporters in that trade could create difficulties for the Coal Board. It may be said that it is hardly likely that they will do so. I agree, but I do not think that the Coal Board should be asked to be dependent on the good will of an outside body. For that reason, it is thought that this power ought to be given to the Coal Board—maybe not to be exercised—certainly not immediately—but there to be exercised if and when the occasion arises, as well it may. There might be difficulties with which the Coal Board itself would not be in a position to deal, but which the Coal Board could try to level out. For that reason, it is thought proper to ask for power to be given for the Coal Beard to do as much overseas as their predecessors did.
I am aware that we shall later on hear comments made regarding the bunkering of coal, or the storage of coal on the water-front. The question will be asked: "What about the milling of coal?" But those are possibilities inside the limits of this clause. They are possibilities. Surely no one would expect the National Coal Board to exercise the power given to them by Parliament in a manner which would endanger the interests of this country or of this industry. Surely the Coal Board can be entrusted, both in bunkering coal and in sinking coal mines outside this country, to act with a wisdom that will safeguard the interests of the coal industry under the British people. Although this clause may create an uneasiness in the hearts of many noble Lords in this House, I trust that they will realise the importance of giving this power to the Coal Board.
Clause 3 deals again with a knotty problem. Those of us associated with this industry know that in the past contracts were made between those then controlling the industry and the users of coal in various capacities—contracts about which those on the workers' side of the industry were a little concerned. Those in control of the industry seemed to be giving far too great concessions. Many of those contracts specified the size and the type of the coal to be 7 supplied, in some cases without any limitation of time; they were to go on for ever and sometimes at a very low price. There were not many contracts of that kind; I was told by the Minister last evening that there were under forty. But contracts of that kind need to be dealt with by the Coal Board, for they are hampering the Coal Board in their work. I heard only yesterday of a coal-consuming industry in close relationship with the Coal Board, which had a very fine contract for the supply for ever more of a certain quality of coal. Yet that quality of coal is no longer available, except at very high expenditure. The Coal Board feel that they have been hampered and hindered by that type of contract. This clause asks for them to be allowed, when they feel themselves hampered or hindered by such contracts, to bring about their termination, and to do that by the payment of compensation where that is agreed upon by an arbitrator. I do not think I need say any more with regard to Clause 3.
Clause 4 deals with a sore problem of some people engaged in the industry—namely, superannuation and other rights. It happens occasionally that an Act of Parliament is not tested in the courts with regard to the construction of certain of its terms. Quite frankly, that is what has happened in this case. It was felt that certain words in the Act could be read in various ways, and that, before any occasion arose for taking a case to court, they should be altered to carry out what was intended by Parliament in 1946. We recognise the difficulty. This Bill does two things. First, it makes perfectly plain which people are entitled to receive compensation; secondly, it makes equally plain who are the people not so entitled. I need not enumerate the different classes, but quite a number of people who thought they might come in will no longer qualify. They are people engaged in those industries which have not been nationalised. The test is: Was their industry nationalised? Was the work that they were doing inside an industry that was nationalised? It is on that point that great difficulty has arisen—for instance, in the case of accountants, estate agents, distributors and the like. The Board are not empowered to compensate that class of person.
8 As regards the classes who are to be compensated, experience has shown the need to make quite plain what is meant by the words—I quote them, recognising that I am in the presence of high legal luminaries—expectation of accruer of any particular benefit.Perhaps, as a layman, I may put it in this way. We are familiar, for instance, with the case of a colliery company which has an understanding that certain classes of workpeople can retire after, say, thirty years' service, and receive benefits for which they pay no contribution. Maybe one of those men has done ten years' service. He himself is confident in his own capacity, and can see himself, ten or twenty years' hence, as the managing director of that same colliery company. He thinks that, if he is now out of a job, in deciding his compensation regard should be paid to the fact that he might later have held a much more highly-paid post. But he overlooks the possibility that in the intervening period something might happen which would leave him without a job and also deprive him of his pension. In any case, he bases his claim upon his interpretation of those words. The intention of the words in this Bill is to make quite plain what matters will be considered when deciding whether compensation is due under the Coal Industry Nationalisation Act. Clause 5 is an agreed clause. The Scottish Church trustees and other people have felt that their interests have been endangered, and Clause 5 is an agreed clause to meet this point.
I can now leave Part I and come to Part II, which is a happier Part for me and, I think, for the whole House. Part II attempts to introduce certain Amendments to the Act of 1911. We are today a long way from 1911, and I think we ought here and now to pay a compliment to the Liberal Government of 1911 who were able to design legislation which has worked so well for so long. Again, if I may, I should like to refer to some figures, because I have asked for the figures of men killed or injured in the coal industry in 1910 and 1948. The figures are as follows: killed in 1910, 1,775; killed in 1948, 468; injured in 1910, 5,432; injured in 1948, 2,390. Those figures, showing substantial reductions, indicate the foresight of that Liberal Government and the value of the actions 9 taken in the meantime by various Ministers of Mines and individuals responsible to the industry.
In reading through the Second Reading debate of 1911 in another place, I noticed that only one who took part in that debate is now with us. He was then the Home Secretary in the Liberal Government, and you will not be surprised to hear that he is now the Leader of the Conservative Party. He was there then, and if I were to read from his (as one would expect) very fine phrasing describing the industry, I could keep the House for quite a while. A member of this House, who spoke for the Opposition in those days and whose name will ever be remembered in the political life of this country was the late Lord Birkenhead. He it was who followed the then Home Secretary, Mr. Winston Churchill. During that debate it was made perfectly plain that the Government were confining themselves to the industry as they knew it and, so far as they could carry their minds into the future, to the technical changes that were likely to take place.
In the meantime, as your Lordships know, this industry has been revolutionised. The men who could discharge the responsible official duties in the mines of those days are, frankly; not the type who can discharge them to-day; thus Part II makes provision for some improvements in regard to the officials. The word "deputy" will convey but little to many members present, but to those of us who are familiar with the industry it can mean the man who, very possibly, is most responsible for carrying out the safety regulations at all the faces in the mine. It is true that the final responsibility rests upon the manager, but whereas the visits of the manager need be few, the deputy is at the pit every day, and must visit twice a day, with the result that the qualifications fixed in 1911 will not apply to-day. This undoubtedly means that we have to make regulations in order to provide the right type of man to-day. Ministers are engaged in endeavouring to find and train men suitable to discharge the onerous duties of a deputy in a mine.
Regarding the examination board, I think we all agree that changes in the coal industry also require changes in the tests higher up. The inspectorate of the industry in this country have never received the praise to which they are 10 entitled. They have done very fine work but have seldom been referred to, except to be criticised. The inspectorate must be manned by men of the highest qualifications. The inspectorate also need to have the finest examination board possible; and this Bill provides for that. Let this be understood: that although the Bill extends the power of the Minister, it still carries the obligation for him to consult the industry before deciding upon an alteration in the regulations; and if there is a difference of opinion the matter must go to arbitration for final decision. All those safeguards are here now. My Lords, I have kept the House long enough to-day. I realise that some parts of this Bill will go too far to please all, and that they will not go far enough to please some, but I think the Bill as a whole will go far enough to enable me to ask the House, to give it a Second Reading.
§ Moved, That the Bill be now read 2a.—(Lord Macdonald of Gwaenysgor.)
§ 3.5 p.m.
§ VISCOUNT SWINTON
My Lords, it has often fallen to me, both here and in another place, to congratulate a new member upon a maiden speech, but I cannot recollect that I have ever had the good fortune to congratulate a new member in making a maiden speech as a Minister in charge of a first-class Bill. There may have been some hereditary fear on the part of Lord Morley before he came into this House which made him a little nervous, but the noble Lord who has just sat down has charmed us all by the manner and the matter of his exposition, and I am bound to say that in a long experience of both Houses I have seldom, if ever, met such a wise and experienced "virgin."
The noble Lord said that I referred to the Coal Board on an earlier occasion as a "mixed grill." I might indeed refer to this Bill as a "mixed grill" or, more accurately, as what in my family we call a "dog's meal"—we collect any odds and ends that may be left from our exiguous rations and put them into a bowl and hope that the dog will thrive. But this is rather an odd mixture. As the noble Lord has rather apologetically admitted, Clause 1 purports to deal effectively with—although it fails entirely in that object—the organisation of the Coal Board and the mining industry. Clauses 2, 3 and 4, as he has explained to us, contain a number of "odds and ends"—some very odd. 11 Part II, which we all welcome, contains some sound reforms of the 1911 Act on lines recommended by the Royal Commission.
Let me deal for a few moments with Clause 1, because however much it fails to do what ought to be done, and as indeed the Minister admitted will have to be done sooner or later, I think we ought on this occasion to give some consideration to the organisation of this, the first of the nationalised industries, of which we have now had two or more years' working experience. There is only one thing on which everyone is agreed—nationalisers and non-nationalisers alike—namely, that the organisation of the industry to-day is far from satisfactory. And I would add that, equally, we all agree that it is important to get it right. The Minister himself has said that although the Government do not regard this organisation as being right, they do not consider this is the proper moment to reconsider the whole structure, but that that will be desirable at some future time. Consequently the Bill introduces no new principles.
But if the organisation of this key industry is entirely wrong in principle, surely it ought to be changed at once. There is overwhelming evidence to show that it is wrong. Sir Charles Reid, the greatest technician in the mining industry—himself a strong supporter of nationalisation and a member of the Coal Board—saw the working of the Board from the inside and was convinced that the structure was wrong in principle. Another authority, this time an opponent of nationalisation, with almost equal experience, is Colonel Lancaster, who for a very long period was one of the ablest managers of a successful mining undertaking. Both are in agreement as to what is wrong; and, what is much more important, both are in substantial agreement as to how it ought to be put right. In their recommendations, which I am bound to say I fully support, they have the general support of practical experience in business management.
This enormous octopus of an enterprise is much too large and too varied to be centralised in a functional administration. In a normal-sized business, I think—and I have said so before—that functional directors are generally right. I like to 12 see executives on the board, but I like some outside element of broad and wide experience as well. But this business is so vast—1,000 pits and a mass of other undertakings, farms, brick kilns, and I do not know what else—and the conditions vary so much in different areas, that functional directors at the centre cannot function in the sense of getting quick, effective action. I am sure it is essential that the local boards with local knowledge should have the necessary authority and initiative and that the Central Board should be concerned with broad policy, finance, major development plans and research; in fact—I use what is becoming a hackneyed phrase but this is all-important in almost every field now—they should be responsible for the overall plan. There seems to me to be no justification in experience and practice for the interposition of the regional boards—of which the noble Lord has said little—between the Central Board and the areas with whom responsibility should rest.
As Colonel Lancaster said in another place, administrative emphasis should be as near to the point of production as possible, and superimposed above that should be a Central Board, whose main purpose is that of deciding policy and such other activities as are obviously of a national character. That would enable decisions to be given on day-to-day matters as they arise, rapidly, and not, as at present, by formal consultation with divisional boards and at monthly intervals. I do not believe that anyone, least of all the Minister himself, would deny that that is sound, and I think that I shall carry him with me when I say that those essentials can be obtained in only two ways. The first is by giving to the local board in each area adequate powers of decision and action within the general plan. The second is by relieving the Central Board of a mass of detail work, giving them more time to concentrate on the overall plan and to obtain quick and close contact with the area boards. Both these essentials—the devolution of responsibility on the local boards and the right division of responsibility as between the Central Board and the area boards—are hampered if you interpose between the centre and the responsible area regional boards.
I must say that I think there is too much of the Civil Service model in all this outfit. I have the greatest possible 13 respect for the Civil Service when it is doing its proper job, but its proper job is not running a diversified industry. The Civil Service and anything organised on the lines of the Civil Service will always be centralised and uniform, because the normal job of a Civil Service Department is to carry out a uniform task. I have said once before that it would clearly be ridiculous if the Board of Inland Revenue functioned in a variety of financial ways. Income tax must, of course, be collected in a uniform way, but that is a very different matter from running the coal industry of the country. And, what is more, this cumbrous and centralised administration always means excessive staff. I do not know whether your Lordships have realised that in the last twelve months—the noble Lord will check my figures if I am wrong, but I think they are right—while there has been only a 4 per cent. increase in the number of mineworkers a 14 per cent. increase has taken place in the administrative and non-industrial staffs.
It is increasingly difficult to see why we should have these regional boards at all. The Minister of Fuel and Power himself said only a few months ago that:… it was always the intention and idea of the National Coal Board that the areas—not the divisions—should be the truly executive operational units which employed the labour and mined and sold the coal. There is no doubt that as area management develops the divisional bounds will become more and more merely co-ordinating and supervising …If that is right—and it is emphasised by two years' experience—why should we keep the regional boards going? The National Board supervises the supervisors, and the regional boards supervise the areas. That is dangerously like the extraordinary picture which Sir Arthur Street (who is, I think, the respected Deputy Chairman of the National Coal Board) drew of an endless chain of supervising authorities rising in a pyramid to a Ministry of Supervision. And Sir Arthur was pleased to picture a Supervising Corporation supervising all the National Boards. He went on to say:Does this point to a need for a Corporation appointed, say, by a Minister of Socialised Industries to co-ordinate the work of all Corporations?I am bound, in fairness, to say that on another occasion when we had a debate on the administration of these nationalised industries, on a Motion put forward by 14 the former Master of Balliol, who showed himself in the course of it to be even more dissatisfied than I was, we found ourselves in a strophe and anti-strophe of condemnation. The Lord Chancellor also joined in the damning chorus and said that he entirely dissented from Sir Arthur Street. But that is all very well. It seems to me that "His master's voice" is that of Sir Arthur Street and not that of His Majesty's responsible Ministers.
The only arguments which the Minister of Fuel and Power has advanced against increased independence for these area boards are two. First, he says, "Are these boards—and it is desirable for them to be independent or to have a large measure of independence—to own the assets in their own areas? That is the real criterion of independence." It is really not so at all. It is quite unnecessary: the Central Board can own the coal and the area boards can operate it. There is no reason why they should not. I know that Ministers are not very good at maintaining contact and co-ordination with their fellow Ministers, but I would have thought that the Minister of Fuel and Power and the Minister of Supply need not be so completely at loggerheads over this. Just look at the Steel Bill and what is proposed there. The Minister of Supply does not say: "It is quite impossible to have one body owning steel and another body operating steel." On the contrary, he says, "That is the only way in which steel can be nationalised. There will be a Steel Corporation owning it and 107 companies operating." If that is the right thing to do in the case of steel, why is it the wrong thing to do in the case of coal?
The only other argument the Minister of Fuel and Power advanced is this: "How far are they expected to pay their way?—because some of them will operate at a loss." That is an equally fallacious argument. The overall plan of the Central Board must decide broadly how much each area should produce. Targets are common form to-day: the Chancellor of the Exchequer sets then for the country, and the President of the Board of Trade distributes them throughout industries. There is nothing new, or apparently difficult, in the Government or any of their organisations or agencies setting targets. That is a function of the Board, and it is a function of the Board to plan where 15 large developments should take place. It may well be that some areas will operate at a profit and others at a loss, but I am certain that we shall get cheaper and more efficient production if the area boards are given wide authority to achieve their targets and manage their business in the best way they can. We shall then have local knowledge, local pride and local encouragement and, in so far as we can get it within nationalised industry, local competition; and all these would be very good things. The only test should be: What will produce the best results, material and moral, from each area? I think we should make a great deal better appeal to the capacity of those working in the industry, as well as have different minds trying out their own ideas, if we gave responsibility to the areas.
Because I have, as many of my friends have, very definite views as to the reforms which should be made, and because the noble Lord himself has said that they have to be made sooner or later, I have thought it right to say what in our opinion these reforms should be, in order that we may waste as little time as possible in a situation where time is not necessarily on our side. I am not going to divide the House against this Bill. But the appointment of a few part-time directors on the Central Board, while shirking all the outstanding problems of central, regional and local organisation and administration, is just tinkering with the situation. In the classic phrase of the former Minister of Fuel and Power, I do not think it is worth "a tinker's cuss."
I come to Clause 2, with which the noble Lord dealt in a persuasive manner. It is general and obscure in its language, but it conceals a complete reversal of the policy which Parliament laid down in the Act of 1946. If we passed this clause, it would enable the Board to conduct any activities outside the United Kingdom. The policy which it is now proposed to reverse represented the deliberate decision of Parliament. It was not a decision imposed upon the Government by the Opposition. It was the Government's own proposal to Parliament. What justification has been given by the noble Lord to-day for this drastic change in policy, which the Government themselves commended and which Parliament put into the Act? The Board are overwhelmed 16 by their present duties. They have themselves frequently drawn attention to the vastness and variety of the duties imposed upon them. They have complained, not unreasonably, that they have had to undertake these vast and varied duties prematurely, without any prearranged plan and, as is apparent, these activities have taxed the capacity of the Board to the utmost; and, indeed, have proved beyond their capacity. Why, in these circumstances, should they seek to extend their duties, and to extend them in fields which are well covered and served?
The noble Lord has given us no case, no particular instance, to justify this change in what Parliament has enacted. Neither the Government nor the Board know which of these new powers they want to exercise, how they would exercise them if we gave them the powers, and why they should have them. If Parliament passes this, the Board are to have power to engage in merchanting and bunkering coal anywhere overseas and, as the noble Lord, Lord Macdonald, has said, these transactions are vitally important to our export trade. These are fields which are already very efficiently covered. I speak from some personal knowledge of this. The noble Lord was good enough to refer to my knowledge of the industry. As a buyer of coal, as a director of various overseas undertakings which are large consumers of coal, I have always made it my aim to direct as many contracts as possible to buying British coal; and we have not been unsuccessful. From my experience I can say that the coal merchants know the needs of their clients, and they compete for service. Our anxiety as buyers of British coal is not about the merchant, who we know will serve as well, but about the Coal Board. Will they produce enough coal of the right quality? Quality is vital to us; price is a secondary consideration. Let the Coal Board stick to their job of producing enough coal of good quality—that is a big enough one.
I know that the Under-Secretary said the Government wanted to follow the example of Poland. He did not explain why. I do not know why Poland should be a kind of Delphic Oracle, and why, because Poland does it, we must do it. As Poland is a totalitarian country, run on a Communist model, it would be better if the Coal Board made less use 17 of her as a model and applied more of a self-denying ordinance. Where the Government seek to override the considered opinion of Parliament and the provisions of an Act which we passed only two years ago, I suggest that they should come to your Lordships' House with full justification for any new powers they require. No justification has been given, and no attempt has been made to give any. What the noble Lord said to-day amounts to this: that he thought these merchants were doing a successful job, but they might not serve the country so well as the Board. I wish we could count on the Coal Board with as much confidence as we can count on the competitive coal merchants! This hypothetical reason is not a very good one for asking Parliament to change its policy within two years.
It was said that we might be faced with a new situation and might want to act quickly, and that it takes a long time to pass an Act of Parliament or to amend an Act. I will give the Minister a simple way of overcoming this difficulty. Do not let him take this unjustified power to override an Act of Parliament, but let him take in the Bill a power to come to Parliament, when he has a case, to make an Order which would be subject to Parliamentary approval—I do not care much whether it is by a positive or a negative Resolution. When he has a case—either a specific case or a more general case—where the Coal Board, or the Minister of Fuel and Power, can show to Parliament that the merchants ought to be supplanted, then I am certain that Parliament would be prepared to deal with such an Order, rapidly, fairly and on its merits.
The only other argument I heard was that the Minister needs to direct exports, as if coal, which was a rare commodity two years ago, were now a rare commodity like industrial diamonds or radium. That is not my anxiety in the world situation as I see it developing to-day. With a potential development in Poland (I think almost an actual development to-day) with its Silesian mines, of something like 100,000,000 tons, with the United States, whose capacity for production is enormous, having entered the export market, which they used not to worry about, and 20,000,000 or 30,000,000 tons being sent into the 18 export market; and with other Continental coalfields resuming their old position, I do not think coal is going to be a rare commodity. I am more anxious because we may find in the next four or five years that we have a glut of coal, and that we shall have to sell coal in keen competition overseas, as we used to in the old days. If that turns out to be the case, we shall need all the brains, connections and good will of the coal merchants to sell our coal.
I now come to Clause 3, which the noble Lord "slid over." This is a clause which gives power to break contracts. Here again, when the Coal Industry Nationalisation Act was before Parliament, we debated this matter very fully, and we came to an agreed solution. The broad proposition was that the Board should have power to reopen or set aside contracts only if they had been entered into after the decision to nationalise coal had been announced, if they were contracts which (if I may paraphrase what was decided) had not been entered into in good faith—that is to say, contracts entered into with the object of defeating nationalisation after it had been announced—or contracts entered into with an unreasonable want of prudence. The lawyers had a great discussion in arriving at that agreed phrase. Your Lordships will see that that was provided for in Section 7 of the Act. But subject to that, the Board, like any other company, were to take over, subject to existing contracts.
What is proposed now? It is proposed that the Board should have power to terminate contracts of various kinds (it was said that there were about 40; I am not concerned with the number, but with the principle) if the Board are of opinion that they are, or are likely to be, hampered by the operation of those provisions. Why should the Board have this extraordinary power? If the Board can set aside any past contract which they think may hamper them in the efficient performance of their functions it would be a short step to saying that they can set aside future contracts if they find them hampering them. Let the Government realise what a dangerous precedent they may be setting, not only in this country but outside it. Let thorn look at their own experience. We are negotiating to-day in the Argentine for a new meat 19 contract. What is the Government's charge—and it is a perfectly justified charge—against the Argentine Government? It is that the Argentine Government failed to carry out the contract which was entered into by both parties. The Argentine Government allege—I do not know with what truth—that it was unduly onerous. What was the answer of His Majesety's Government to the Argentine Government? They said: "Whether the contract was onerous or not, it was a contract which you entered into."
All business and commerce rests on the confidence that contracts and engagements between Governments or individuals will be honoured, unless they are varied by mutual consent. It may be said that a particular contract does not pay, or that it is difficult to deliver the kind of coal. I leave aside the contract, if there be one, where particular favour was accorded. But let not the Minister suppose there was anything unreasonable about this. I speak as one who knows a good deal about entering into contracts for a particular type of coal—it may be a particular type of coking coal, or a particular size or quality of coal. In the business with which I am connected, we have for years analysed carefully every cargo of coal we have bought in order to see that the chemical analysis is right. We have always bought on that analysis, and had a guarantee. These contracts are not entered into for fun; the terms are laid down because particular industries need a certain type of coal. To say that the Board can set aside a contract because they find it onerous—that is to say, inconvenient—or because it does not show a profit (and every contract cannot show a profit) is a precedent which I think the Government are most ill-advised to start.
The noble Lord said that compensation will be paid if the contract is not abnormal—if it is entered into at arm's length, or as if it were entered into at arm's length in the open market. If it is a special contract, of course, it is not entered into in the open market. If the Minister and I make a special bargain which at the time we both consider a reasonable bargain to make, we do not make it in the open market. These are difficult words to interpret. Who is to interpret them? Who is to decide 20 whether it is a contract entered into, as it were, at arm's length? As I read the clause, it is not the arbitrator but the Minister who is to decide that. As I read the clause, the arbitrator comes in only when the Minister agrees that the contract was entered into at arm's length. If it was, I cannot see why it should be determined. But it is only then that the arbitrator comes in to decide what the compensation should be. I think the clause is thoroughly bad in principle; but if we are to have a clause of this kind, then certainly the whole business from start to finish ought to be subject to an independent tribunal. I will not say more on that; I am sure that in Committee your Lordships—and nobody is better qualified—will scrutinise that clause very carefully.
I apologise for being so long, but this is a very important Bill. There is then Clause 4, which deals with superannuation rights in any scheme. This does not apply only with this Parliament; it goes back into the whole history of Parliament in dealing with amalgamations. In any scheme of amalgamation or nationalisation Parliament has been scrupulously careful to see that superannuation agreements are honoured. In the Coal Industry Nationalisation Act that was done. The then Minister of Fuel and Power, Mr. Shinwell, gave an absolute pledge that this principle would be followed, and great pains were taken to see that the intention was made effective in the Act. If your Lordships will look at Section 37 of the Coal Industry Act, you will see that it provides for regulations, but it lays down that the regulations should be framed so as to secure that where a right to or an expectation of accruer of benefits ceases or is prejudiced by reason of the person ceasing to be employed by his previous employer, the same benefits or substituted benefits not less advantageous shall be provided for under the regulations. We all accept that. That has been common form in our legislation wherever Parliament has sanctioned an amalgamation. It is a Homeric clause. Now the Minister wants to change it.
I wonder if this is one of the contracts of which the Government seek to be relieved because they are unduly onerous? It may be that Clause 4 ought to run with Clause 3, but it would not have looked quite so well if it had been done like this: "The Coal Board shall have the 21 right to be relieved of a contract to honour engagements to their employees if they find them unduly onerous." It looks better to put it in a separate clause. The Minister himself admitted that the new clause may in some cases inure to the advantage of the person who claims an expectation, and in some cases it may be the reverse.
§ VISCOUNT SWINTON
I beg pardon. I must draw the distinction. When the Solicitor-General gets up to address Parliament, speaking as the spokesman of the Government, do I understand that we are not to pay attention to him?
§ LORD MACDONALD OF GWAENYSGOR
The only point is that if it is the Solicitor-General, he should be so named.
§ VISCOUNT SWINTON
Let me accept the ruling of the Solicitor-General, because I am not quarrelling with what he said. He is quite right; he is a very good lawyer and he told the truth. He said that in some cases the person who claims an expectation is going to be better off, and in other cases he is going to be worse off. There is no doubt about it that in some cases he is going to be worse off. I will come to what the Minister said in a moment, and his declaration is much more open to question.
If the Minister or the Coal Board consider that someone in the nationalised industry ought to receive better treatment than he would have received from his old company, by all means let them give it, because the Coal Board ought to be a model employer. It is quite right to improve the conditions. But because a good employer in the old days gave better terms than the Coal Board like, and having regard to the fact that Parliament has promised that those terms shall be carried out, why on earth should that man be deprived of the benefits he would have received from the old employer and which Parliament has underwritten firm? I really think that is a most disgraceful thing.
22 Now I come to the Minister—and this will not be denied. The Minister of Fuel has made the most extraordinary statement. He admitted that there was a pledge and that it was given effect to by Clause 37, but he said this—and here I quote his words:There was no pledge given to refrain in all circumstances from introducing an amending Bill to clarify the position.That is a nice way to express the taking away from a man, an old employee, of a right which he had as against his old employer and a right which Parliament has laid down he should continue to have. That is what is called "clarifying the position"! It is quite true that Parliament is omnipotent and can pass any Act it likes, but hitherto it has been accepted that where the Government enter into an honourable undertaking of this kind, and fortifies it by a statutory enactment, the Government will keep faith. All I can say is that, in the light of this extraordinary ministerial declaration, and the proposal which has been made and now carried through another place, it is open to us to review it here—and it will be our duty to review it. I hope that the workers in other industries now threatened with nationalisation will note, on the authority of the Minister of Fuel, that ministerial pledges, even when backed by legislation, are not worth the paper they are written on.
I turn for a moment to the happier part of this Bill, Part II, which contains the power to make regulations. I quite agree that new regulations are necessary, but I believe that the right way is to have an up-to-date Act to take the place of the old Act of 1911. That Act was passed as a result of a comprehensive Inquiry. Another Inquiry was set up in 1936 when the Conservative Government were in power, and a full Report was made in 1938. Legislation would have followed but for the war. Indeed, I think it is true that actually before the National Government went out of office we had begun to draft such a Bill. If we must have regulations, we must but I hope that as soon as possible we may do this in the proper way by having a Bill to amend the Act of 1911. I am bound to say that I think it would be a much better Bill than the one which has now been introduced into your Lordships' House.