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Coal Industry Bill

Volume 721: debated on Thursday 25 November 1965

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Order for Second Reading Read.

Order, order. I would request hon. Gentlemen leaving the Chamber to do so quietly.

I have an important statement to make. There are many hon. Members whose constituencies are seriously affected by the Bill whose Second Reading we are now to begin and who have given me intimation that they will seek to catch my eye. How many do so will depend on the fair play of the right hon. and hon. Gentlemen on both sides of the House who do catch my eye in the debate. I have made this plea previously, and I hope that the House will take note of it.

4.8 p.m.

I beg to move, That the Bill be now read a Second time.

This is a short Bill, but, I suggest, a very important one. It concerns one of our major natural resources and one of our principal industries. Two-thirds of our primary energy comes from coal, and to a much greater extent than other large industrial countries we base our economy on coal. Indeed, so great are the operations of the National Coal Board that its income is about £900 million a year. This is the vast industry that we have to consider today, and I suggest that we need to see its problems, real though they are, in proper perspective.

The state of the coal industry is clearly of vital concern to every one of us, and the provisions of the Bill are intended to provide the financial framework within which the industry can be healthy and viable. I would ask the House to consider the provisions in the light of our recent White Paper on fuel policy. Surely that White Paper enables the House for the very first time to look at the coal industry against the background of a comprehensive fuel policy. Many aspects of that policy are not within the scope of this debate, but I should like to begin by reminding the House of our policy for coal as laid down in that White Paper.

Indigenous coal is and will continue to be a main primary fuel, utterly essential to our economic prosperity and growth. It is a large import saver and it imposes no direct burden on our balance of payments. Yet the industry is of its very nature inflexible, and capacity once lost can be recreated only at heavy cost and with great difficulty. It would be a matter of national concern if the industry's markets declined faster than output could in practice be economically reduced and the social disturbance dealt with in an acceptable manner.

In the light of these considerations and the trends in the industry's markets and finances, the Government are satisfied that in present circumstances it is right that this national asset should be protected. We intend, therefore, to maintain in force the heavy oil duty and the virtual ban on coal imports, subject, of course, to review from time to time.

The industry has made great strides in mechanisation, efficiency and productivity. A substantial part of it has relatively low costs. It is, however, carrying the burden of a good deal of uneconomic production that can become—indeed, has become—a threat to the industry itself. I emphasise that this huge on-cost of uneconomic coal is one of the greatest threats to the prosperity of the whole industry. Thus, I believe that it is necessary for the Coal Board to accelerate its policies for consolidating production in the economic pits and improving efficiency.

The industry has within itself the potential for such an improvement. It has large numbers of excellent pits with highly mechanised equipment which are among the most modern in any of the coal-getting nations. It possesses a fund of the most knowledgeable technicians in modern methods of getting coal. We as a Government shall encourage the Board to introduce still more advanced methods of winning coal and controlling operations so that the coal industry can keep pace with the country's technological progress.

The White Paper and the National Plan give an estimate of the likely size of the market for coal in 1970, in the light of all the policies which are being adopted. We do not consider that it would be right for the Government to set limits on coal production at a future date and to ask the industry rigidly to conform to that figure. Indeed, having examined with my Energy Advisory Council the trends in fuel consumption, I consider that it would not be prudent to count on a coal market in 1970 above the range of 170–180 million tons. This, however, as I have emphasised before, is no more than the best informed estimate that we can make at the moment.

When one hears some of the arguments adduced about what will happen to the coal industry if its target is only 170 or 180 million tons, I invite the House to remember that it would still be about the biggest coal industry in Europe. An industry which is getting 170–180 million tons of coal a year is a huge industry by any reckoning.

On the other hand, if the industry or its products were to fall below the figures which we put into the White Paper, I would then become worried on balance-of-payment grounds. In the event, the figure is bound to be determined by the relative efficiency of the coal industry and the choice of consumers, within the framework of the substantial protection and the measures of assistance which we are affording and will continue to afford.

Before coal can play its proper part in the energy market, however, there are legacies from the past which must he cleared away. To explain these, I turn now to the Bill. I should like if I may to deal first with Clause 2, which is concerned with the capital reconstruction of the National Coal Board. Hon. Members will know from the White Papers on fuel policy and the finances of the coal industry how it comes about that action is now needed. In the first place, the demand for coal was over-estimated. In consequence, the National Coal Board embarked upon investment aimed at supplying about 240 million tons of coal a year. It was known at the time that some of the projects would be risky, but the tonnages were believed to be necessary in the national interest and to be saleable at prices reflecting costs.

The Board was encouraged to do that by successive Governments and by the view which, was widely held in the 1950s, that the market for coal in the middle of the present decade would be around the figure of 240 million tons. In fact, the inland and export markets for coal, which were at a post-war peak of about 230 million tons in 1954 and 1955, are likely this year to total less than 190 million tons. Despite modifications which were made subsequently in the Board's programmes, much of the investment in collieries to which I have referred has thus become quite unremunerative, as has some of the Board's investment in coke ovens.

Possibly, the Board would have been better able to cope with this situation had it been allowed to build up a relatively strong financial position. When, however, there was a seller's market for coal in the years before 1956, the Board, with the approval of successive Governments, held prices below the level that the market would at that time bear. For this reason, the Board had no reserves—and, indeed, an accumulated deficit—when it had to meet competition and begin selling in a buyer's market.

I am not criticising what was done. I am saying that those things may well have been in the interests of the nation; they had a social content. What I am asking the House to realise is that what was done in the interests of the nation as a whole placed the Board's finances in a weak position, and when the pendulum swung so rapidly it did not have the financial background against which it could compete in a buyer's market.

Therefore, the purpose of Clause 2 is to relieve the Board of £415 million of past debt. The reasons for cancelling this large sum are set out in the White Paper on the Finances of the Coal Industry, which deals also with the consequent bookkeeping transaction.

Ninety-one million pounds relates to the Board's accumulated deficit as at the end of last year. The principal part of the cancellation relates, however, to the Board's collieries and its associated assets. The White Paper has shown the book value in 1964 of pits making losses before interest. Some of these pits are now undergoing reconstruction, so that their losses are temporary and their assets are still valuable; but the number of pits making such losses has not changed greatly over the course of years.

We have therefore concluded that £250 million is a fair assessment of the amount of unremunerative colliery capital which the Board has recently been carrying. Given the prospect of further contraction in sales of coal, we have deliberately taken a cautious view of the future earning power of the Board's colliery assets. In addition, we have had to allow about £16 million for the loss of value of coke ovens. The total amount of debt which we have decided should be cancelled in respect of all these items is therefore £400 million. If it proves that we have been a little too cautious in our assessment of the future profitability of the Board's assets, I shall have at my disposal the power in Clause 2(3) enabling me to direct the Board to pay either the whole or part of any excess revenue to the Exchequer.

The balance of £15 million relates to the Board's current financial position. For some five years, there has been general price stability in the industry—I am speaking of pithead prices—an achievement made possible by increases in productivity and efficiency. This is a record of which the industry has every right to be proud. But costs per ton in this still labour-intensive industry have been rising and proceeds per ton have tended to fall as the lower grades of coal have come to represent an increasing part of the market.

The interim results for the half-year April to September, 1965, published on 12th November, show a deficit so far this year of nearly £45 million. We all know that it is normal for the Board to have a seasonal deficit in the summer months and the figure of £45 million naturally takes no account of the benefit of the proposed capital reconstruction. Nevertheless, it is more than twice as high as the corresponding figure for last year.

Some months ago, the Board judged that price increases would be necessary this year, even after allowing for the expected benefits from the proposed capital reconstruction. However, in view of the implications for our general prices and incomes policy of increases in the price of a basic commodity such as coal, the Government asked the Board not to raise prices for the time being. It is therefore in recognition of the additional debt to the Exchequer which the Board would incur as a result of this deferment of price increases that we are proposing that the amount to be written off should be increased to £415 million.

We have decided that the question of coal prices shall be referred to the National Board for Prices and Incomes. The Coal Board is at present reconsidering its revenue position and prospects and will be making revised proposals for price increases to come into effect next April. These will also be referred in the normal way to the consumers' councils.

Before coming to the provisions of Clause 3, I should like to put them in their proper setting. There is an urgent need now to speed up the modernisation of the industry's economic structure. This will be achieved by accelerating the concentration of the industry on the economic pits which exist in all the main coalfields. I have referred to the large number of modern and efficient pits with good working conditions. This number is being added to by schemes of major reconstruction undertaken by the Coal Board in past years and now coming to fruition. Some hon. Members will know of Monktonhall, Bevercotes, Abernant and Leahall and there are many more of that type of pit now coming into production. Pits of this type will be able to provide jobs for large numbers of skilled miners in the years ahead.

On the other hand, there are pits which need to be closed. Including pits where reserves are running out, about 200 closures will probably be necessary over the next five years or so. This is about the same number as in the past five years, but the Board intends, with the Government's full support, to speed up the process by effecting more than half these closures within about two years from now. Within the next five years, the Coal Board aims to close all those collieries which fail to cover their running costs and are unlikely to do so in a foreseeable period of time.

Because a colliery's performance can change very quickly, it is not possible for the Board to say at this stage exactly which pits it needs to close and when the closures will be effected. Last week, the divisional coal boards published a classification of pits in their divisions—category A consisting of continuing pits, category B of pits with a doubtful future, and category C of pits likely to close or merge within about five years. I should like to stress that the classification is in no sense final. Not every pit in category C is certain to close. If the results of an uneconomic pit improve sufficiently, it may move into category B, or even category A. On the other hand, some pits now in categories A and B may deteriorate and move into a lower category. Subject to these uncertainties, the pits in category C and many of those it category B are likely to close in the next five years.

Of the 514 pits in the industry, 280 are in category A, 84 in category B and 150 in category C. In Yorkshire and the East and West Midlands the vast majority of of pits are in category A. These divisions will not be substantially affected by the acceleration of colliery closures, although there will, as hitherto, be a number of closures as reserves are exhausted. However, there is a concentration of the less promising pits in four other regions. Scotland has 45 in categories B and C; Wales 43; and the Northern Economic Planning region—Northumberland, Cumberland and Durham—has 73.

Details of the classification of pits have been sent to the Economic Planning Councils in Scotland, Wales and the English Regions. It will be for the councils to consider the implications of the classifications for their regions in the light of the measures being taken to deal with them. My right hon. Friend the Secretary of State for Wales explained to the Welsh Economic Council last Monday the measures which he has in mind to deal with the situation in the western half of the South Wales coalfield where the problem arising from colliery closures is expected to be biggest. These councils will, of course, be concerned with the broad effects of closures on the economy of their regions. The effects on the coal industry is a matter between the National Coal Board and the unions.

It is essential for both social and economic reasons that the men affected by closures should be quickly redeployed. Top priority will be given to finding these men other jobs in the coal industry so that the nation will continue to benefit from their special skill and experience and so the efficient and profitable pits, which exist in all the main coalfields but particularly in Yorkshire and the Midlands, can get the men they so badly need. The Coal Board hopes to continue to employ about 85,000 of the 120,000 men likely to be affected by colliery closures over the next five years. About 60,000 of the jobs offered will be within travelling disstance of the men's homes and in these cases subsidised transport will be provided wherever that is necessary. The Board is now reviewing the arrangements for supplementing the earnings of men who are temporarily down-graded and the various allowances payable to men moving their homes. The Board's intention is to give them much bigger incentives to transfer.

Many thousands of homes will be needed for transferred miners within the next two or three years. Their provision will throw a heavy burden on some local housing authorities. However, this burden will be eased by the new subsidy proposals announced by the Housing Ministers in yesterday's White Papers. With the Government's approval, the Coal Board will be prepared to discuss with local authorities the possibility of supplementing these subsidies in appropriate cases and meanwhile the housing Departments have already started discussions with a number of authorities on the possibility of making more houses available for the miners who will be coming into their areas. The figures I have just given leave an apparent surplus of 35,000 men. Many of these, especially those in the older age brackets, will choose to retire with the help now made available to them. Others will find themselves new jobs without much difficulty. But for a substantial number the Government will need to see that alternative work is made available and that they are fitted to take it on. It is apparent from the National Plan that the country can make very good use of them. One of the great problems is a shortage of manpower, not a surplus.

The basis for our action will be our general regional development policy which will now be much strengthened by the steps promised in the Gracious Speech
"to improve arrangements for providing incentives for industrial development with due regard to the development of the economy and the special needs of particular areas."
In the meantime, we have taken energetic steps to deal with the problems of those areas which will be particularly affected by the closure programmes. My right hon. Friend the President of the Board of Trade announced on 22nd October additions to development districts which now cover all contracting coal areas where the general employment position may become difficult. He will use to the full his powers under the Local Employment Acts to encourage industrial development in those areas. Indeed, he has already announced the construction of 19 new advance factories in them in addition to the 13 announced in November last year.

I am glad to announce that my right hon. Friend the Minister of Labour has decided to establish four new industrial rehabilitation units for the retraining of of disabled men. They will be at Billingham and Killingworth in the North, in the Neath area of South Wales and in North Lanarkshire. The facilities afforded by Government training centres should be adequate to meet the needs arising in the contracting coal areas, but my right hon. Friend will keep the position very much under review. The Redundancy Payments Act, which comes into force on 6th December, prescribes new and improved payments for men who are not offered suitable employment under the same employer when their present jobs come to an end. The National Coal Board will be giving particular consideration to men affected by closures who may have special difficulty in finding other jobs.

The Government believe that the measures which I have described will prove adequate to the needs of the situation. Should it prove necessary, however, we will not hesitate to take further action.

With reference to the timing of mergers or closures, will my right hon. Friend be prepared to advise the National Coal Board to delay the final closure of a pit until new industries have been effectively drafted into the area affected?

That is a very important point. The regional boards, whose job is to look after the development of the economy of their regions, will have all the knowledge of the closure programme from the National Coal Board. The closures will not all take place at the same time. Obviously efforts will be made to ensure that the closing of pits synchronises with the coming of new industries to the area. That will be the mode of procedure.

The Government are very keen to ensure the success of this operation. We propose to have a Committee of Ministers constantly looking at the closure programme to watch its development and to see whether there are any reasons why it should be changed. If there are such reasons, we will be willing and able to take them up without delay.

On the question of the increase in development districts, I am concerned at my right hon. Friend's optimism in suggesting that it is easy to bring factories and industry into these areas when an area like Rhondda has been a development district for 30 years and is still on the list. If the Government enlarge the development districts, how will they get industries to go to the worst areas?

My right hon. Friend the President of the Board of Trade is looking closely at this point, but I remind my hon. Friend that we have powers to restrict industrial building outside development districts. These should be of great importance in channelling new industries to the areas to which we want to see them move.

May I turn to what the Government are doing? Where the cost of these measures falls on the Government, arrangements will be made for it to be met in the normal way out of Departmental Votes. Where it falls on the National Coal Board, Clause 3 of the Bill provides for meeting half the Board's additional expenditure in the years 1966–67 to 1970–71 up to a total of £30 million. I have discussed the proposals for the special funds with the National Coal Board and with the unions. In considering the amount of help the Government should provide, I have had to make a judgment about the part which the community can reasonably be asked to carry.

The coal industry will benefit considerably from the concenration of its production and from the transfer of skilled miners to more productive jobs. The community will benefit from the redeployment of men into more productive jobs either inside or ouside the coal industry. This is not a matter where a precise line can be drawn, but I hope that the proposals in the Bill will commend themselves to the House as a measure of broad justice in this very complicated matter.

Would my right hon. Friend explain the rationale his statment that half of the cost will be borne by the coal industry, bearing in mind that he has indicated that the Board is running at a loss and that he is concerned that the economic aspects of the industry should not be choked by the uneconomic aspect? By asking for £30 million to come out of the industry, the Government are asking for another £10 million from the industry. Why should the industry bear that when a national decision is being taken?

My hon. Friend has not brought together all the considerations which I put forward. Given the normal state of affairs, in the next five years all these pits would be closed by the Coal Board without a halfpenny of assistance from anyone. We are making provisions over and above that which has ever been made before to either the coal industry or any other industry for this kind of operation. The fact that we are concentrating on the economic as distinct from the uneconomic pits should, and will, improve the Board's financial position in a way that has never happened since before the years when it was refused permission to sell coal at an economic price.

I believe that the coal industry will benefit very much from the plans which I have outlined. I am sure that this Government, of all Governments, should not be accused of any lack of sympathy for the coal industry. If we look only at the effect in 1965–66 of the measures which the Government have proposed, we see that the Exchequer will be finding about £65 million additionally this year for the Coal industry—£35 million in interest forgone and additional debts cancelled and £30 million in loans over and above what otherwise would have been advanced.

All this is justified by the difficulties in which the industry is currently placed, but I think it is right that the House should recognise the burden that is being borne by the Exchequer in the course of overcoming them. But, as well as sympathy and short-term help, the coal industry also needs effective action to secure its future. It is natural that, just at this moment, it is the negative aspect of this action, the announcement about colliery closures, which attracts the most attention among the miners and in the regions affected. And we are well aware that these changes must be unsettling and cause enormous difficulties, which I have very good reasons to understand.

I have set out at some length the measures we are taking to deal with the social consequences and to mitigate individual hardship. But, as I said when I began to speak, I would ask both the House and the mining industry to look at these matters in their proper perspective. Redeployment in the industry will bring the skill and experience of men in closed pits to the efficient and profitable pits which exist in all the main coalfields. There is no sense in men going on year after year working, often in difficult conditions, where coal cannot be won economically. Even though the exact size of the likely coal market in the years ahead cannot be exactly assessed, on any count there is a very large continuing market for this major industry, whose supplies are essential to the economy. Exaggeration of the scale of the changes and gloom about their local consequences cannot fail to do harm both within the industry and to the country. Defeatism and loss of morale, founded on misunderstanding of what is being done, despite all our massive help to the industry, could weaken the industry and make its own tasks more difficult. This spirit must not be allowed to develop.

I turn now to the third main element of the Bill, the limits for the Exchequer loans to the Board, on which they will depend in substantial part for their capital. As the House is aware, the limits provided in current legislation expire on 31st December of this year. In framing Clause 1 of the Bill, our aim has been to find figures which both preserve proper Parliamentary control of public funds and also give the Board reasonable means for carrying out their tasks. It has been necessary for us to consider how the Board's activities are likely to develop in the next five years.

The industry's prospects depend substantially on further concentration of output on the more efficient collieries and faces and on continued modification of production methods and techniques. The proportion of output won on mechanised faces is already 80 per cent. compared with about 40 per cent. in 1960 and there is further scope to increase this figure by such means as increased machine running time per shift, and multi-shifting.

Still higher levels of efficiency will be achieved by remotely-operated face machines. The Board's efforts are directed not solely to mechanisation of coal face operations, but also to mechanisation of transport and handling arrangements throughout. Only by these means can the industry counteract the heavy loss of manpower and reduce its production costs.

The Board's expenditure on collieries from now until March, 1971, will be about £380 million. It will be largely devoted to the essential replacement of plant and machinery, to further mechanisation behind the coal face, for example on minerals and materials handling and coal preparation, and on an experimental programme of R.O.L.F. installations in all coalfields.

The Board has set itself the objective of generating from its own resources, principally the normal depreciation provision, supplemented by a small surplus on revenue account, the funds necessary to maintain the proposed high level of investment in collieries. The adoption of this objective will encourage a greater concentration of the available capital on the most promising pits and its achievement will strengthen the industry's financial position. The proposed borrowing limit accordingly makes no provision for further net borrowing for colliery investment.

The Board will continue to develop its ancillary activities. It already has wide powers to engage in projects to make the best use of its vested assets and in connection with its primary task of coal getting. As well as its traditional activities, the Board will seek to develop commercial schemes for new products and the further development of existing by-products such as crude benzole. Expenditure on ancillary activities in the next five and a quarter years is estimated at about £75 million.. The borrowing limits provided under Clause 1 of the Bill make allowance for the net amount of investment in such activities.

In addition, as I announced yesterday, the Board has been given options by two companies to participate in petroleum licences granted in respect of the Continental Shelf, subject to the necessary powers being conferred on the Board. The Government intend to seek these powers at an appropriate time. The Board's total expenditure for this purpose in the next five years would not be large, and could be met from the contingency element which we are providing within the borrowing limits.

In view of the far-reaching reorganisation of the industry which is now in hand, we cannot rule out the possibility of an occasional deficit in the years ahead. It is, however, the Government's firm intention that any such deficits shall be short-lived. The House will see that under the new borrowing limits proposed in the Bill, temporary borrowings may be used for this purpose only to the extent of a deficit in the Board's annual accounts not exceeding £30 million.

After allowing for such limited temporary deficits and for contingencies, we consider that the Board's total borrowing requirements may by March, 1971, be about £750 million. Clause 1 of the Bill stipulates a total borrowing limit of £700 million, which may be increased to £750 million by order, subject to affirmative Resolution, and this is the provision which we invite the House to accept.

At this point I mention, although this does not affect the Bill itself, that the Board is considering whether any alterations are desirable in its management structure. It is hoping to reach a final conclusion shortly.

I have been able to cover the principal issues, but I have not been able in the time available today to cover every point that may be of interest to the House. In particular, I have not attempted a detailed explanation of Clause 4 of the Bill covering certain pension adjustments, but I will just say that they bring the arrangements for National Coal Board members into line with other nationalised industries.

The Government are determined to give all proper assistance and encouragement to the coal industry as part of their fuel policy. We are confident that the principles set out in the two White Papers are right for the industry, and that the particular measures proposed in this Bill will effectively give the assistance and encouragement which is needed.

These are times of fast and far-reaching changes. Those whose lives are not much affected can sit back in philosophical calmness and contemplate the changes in that setting, but for the men whose lives have been devoted to this great industry and the communities which are based on it there is a different picture. Any man doing my job who did not bring these changes to the notice of the House would be guilty of both political and moral cowardice. Unless we help the industry to meet the great changes which are here the industry itself will be in grave danger of total collapse within a few years.

I have heard and read of people who believe that these proposals are too drastic. I have lived much of my life with the miners and I represent them now. In my younger days I turned out with their team. I would throw back the lie into the teeth of the man who said that I was not interested in the welfare of the miner.

I believe that these issues now are vital to the mining community. I believe that, given the changes which we seek in the Bill, we will get a great viable industry which will maintain Britain as the most coal concentrated economy of any of the great industrial nations. That is the objective and if, instead of being timorous and afraid of change, we can as a nation seize the opportunity to tackle the problems now, I can foresee a great future for the whole of this great industry.

4.50 p.m.

I think that the House will agree with me that the speech to which we have just listened must have been for the right hon. Member for Newton (Mr. Frederick Lee) one of the most difficult he has ever made. I do not think that any of us on this of the House remained wholly unmoved by his closing remarks. I wish to say very sincerely that I endorse his statement that it is easy for those who are remote from this problem to take a detached view.

It is not always that one begins a speech from this Dispatch Box by telling a Minister that the speech he has just made was one which one will remember. However, I say that to the right hon. Gentleman, with whom I have crossed swords on various occasions and with whom I shall certainly cross swords again. I should like him to accept that tribute. I also agree with the stress he made at more than one point in his speech that this is not a wholly negative operation, that the negative side of the operation of course attracts public attention, but that there is also a vitally important positive side in which everyone in the House and in the country as a whole is most deeply and profoundly concerned.

I agree with the right hon. Gentleman entirely that those who say that this is an antiquated industry which is passing into history are making a fundamental error. This industry remains the background of our fuel economy. For years to come the electricity industry will depend upon it. To give weight to the view that this industry is indeed on its way out would be to expose ourselves unwarrantably and monstrously to the danger that in a decade or so our richest coalfields will become unexploitable for lack of men to man them.

I do not think that I can stress too strongly what would be the disastrous consequences for this country if our electricity industry, dependent as it inevitably will be for many years to come upon a healthy and strong coal industry, were left without this vital prop. Many in this House have given much of their lives to this unique and strange industry. I know they can tell a great deal better than I can the effect upon men if we in this House and in the Government, whichever party may be in power, were to come habitually to treat the industry as a concertina to be squeezed and stretched at will. I am sure they will confirm my own conviction that mere soapy tributes to the industry will go the same way as nagging unconstructive criticism.

What is necessary now, in my view and, I believe, in the view of the whole of the Opposition, is to show that this White Paper, which is a further substantial step along the road which the industry has been treading for a number of years now, is not the beginning of the end but the opening, if all are willing to play their part, of a new chapter of promise and success.

It seems clear to me that the industry is obliged to retreat, painful as it may be, from its 19th century outlets into those rich coalfields which can best be exploited by today's technology. I am convinced that it would be in the best interests, both of this great industry and of the country as a whole, if so far as possible during this debate we could refrain, as indeed the Minister did, from making merely party points—there are bound to be some—and also—I realise that this is much more difficult for those who sit on the other side of the House representing mining constituencies—if we can refrain from taking too local a view of what is a national problem.

I believe that we should attempt to have in mind throughout our concentration upon these problems both the continuing need of the industry to which I have referred and the fact that a new generation will not all automatically go into the pits as their fathers did. I believe that we will do well also to remember that the miner, like the sailor, lives and works for a great deal of his life apart from other people and he faces special hazards and dangers—of sickness, of injury and of death. I am certain that, if we are to ask, as indeed we must, management and men in the industry to make the real effort of adjustment that is necessary, we should do very well to remember these things.

I hope that those remarks will be treated by the House as a background to everything else that I have to say, because I do not believe that speakers in this debate will deserve any credit if they evade the facts.

I turn therefore to the position, which is indeed the background, of both the White Paper and the Bill. May I say, in a quite unusual vein for me, that the White Paper, however welcome or unwelcome its contents were, was almost unique in my experience for being short and reasonably clear. I should be grateful if the Minister would convey my congratulations to those responsible.

Almost the first words of the 1964–65 Annual Report of the Coal Board were as follows:
"During the year, the Board reviewed their financial provisions and the profit includes credit for the release of some which were no longer necessary."
Despite a certain coyness about the details, which I can understand, some light is shed upon the matter by pages 23–6 of the notes on the accounts. In paragraph 17 there is a reference to workmen's compensation, from which I understand that a credit of £1 million was taken. Paragraph 20 says that
"The Board have reviewed their provisions to meet this liability"
for surface damage, and have released £3·4 million which was surplus.

The next paragraph, on insurance, says this:
"A particular loss for which provision had been made proved to be substantially lower and the surplus no longer required (£2·2 million) was released."
It appears from paragraph 30, dealing with unrealised appreciation in value of stocks, that credit was taken for £1·3 million and £1·5 million. I will not go into details. The information is in the Report. Paragraph 32, under the heading, "Superannuation and Pension Schemes", refers to a recovery of £1 million having been effected during the year.

The Minister may correct me, but it would appear from this that reductions were made and credits were taken amounting to about £11·4 million and by these means a loss of about £11 million was replaced by a profit, albeit a small one. Were it not so, the half-year's figures just announced showing a loss of £44 million would indeed represent a very sudden and almost unexplainable change. We should pause to take note of the fact that during the first 32 weeks of the present financial year production is down by 4½ million tons on last year, stocks are up by 1⅓ million tons, and sales are down by 3¾ million tons. These are sombre facts, and in large part they are the justification of what the Minister now proposes. But there are two questions, in particular, which I should like to ask the right hon. Gentleman. First, did the Board, being aware earlier in the year of the worsening position, make any price proposals then? If it did, what was the Government's reaction? Secondly, what on earth has happened this autumn? Lord Robens was reported by the Financial Times of 2nd November as saying that
"there had been positively no request at this moment of time for any increase in the price of coal".
Yet two or three days later the Government's White Paper appeared saying specifically that the Board had made a proposal for an increase in prices in July to be effective in September. The Minister must ask his Parliamentary Secretary to let us have a few comments on this matter.

The White Paper makes it quite clear that even with the very substantial measure of relief proposed in that White Paper and in the Bill, namely, £20 million interest payments and £10 million of depreciation this year, plus a further £25 million to cover an expected deficit—and this is the measure of the burden—the Government now expect the results of this current financial year to be about £55 million worse than those shown for last year.

Let us be clear, therefore, that the Bill extinguishes no debt at all. It transfers to the taxpayer a substantial burden of £55 million this year which in later years will amount in perpetuity to about £40 million. This sort of thing needs the most careful scrutiny and justification. We shall be moving a number of Amendments in Committee. In view of the great interest aroused by the Bill among hon. Members who are supporters of the Government, and the importance which we attach to these Amendments, all of which will not be hostile but will be largely designed simply to probe for information, it may well be necessary for a good deal more time to be found for discussing the Bill, which we heard earlier today is due to complete its remaining stages next Thursday. I say this not in any nagging sense but in the hope that the Minister will convey these sentiments to his right hon. Friend the Leader of the House.

As for the particular amounts which the Government propose should be written off, I do not intend to comment on the £16 million representing excess capacity, because the White Paper says in the most seemly way that this was due to Government interventions in 1948 As to the £91 million accumulated deficit which the White Paper proposes should he written off, it is odd that one page of the White Paper appears to condemn, very rightly, the practice of successive Governments in preventing the Board making price increases at certain times while in the following page it expresses the Government's determination to repeat the offence. One is tempted to ask why.

The White Paper rules out the possibility of writing off the deficit against the reserve which is now being created and says in paragraph 9 on page 5 that
"Thereafter, it is not intended to allow revenue deficits to be written off against this reserve."
I believe that to be a wholly proper and sensible principle and I regret that it is not enshrined in the Bill. I hope that the right hon. Gentleman will see that it is written into the Bill before we come to the Committee stage.

The sum of £140 million which I can describe as covering 150 pits seems to us a reasonably clear matter and I would not detain the House further on it, but there seems to he need for clarification of the figure of £110 million representing 100 pits. Are all of those referred to to be written off or are some to be written off and others not affected at all? I should like the Government to draw some further distinctions between what I might call the recovery cases, and particularly the reconstruction cases, and those whose hopes are a good deal more dim.

I can well understand the right hon. Gentleman sliding over the next point fairly quickly, because this is the sort of mathematics not permitted by anyone but Governments. Having got the total so far to £357 million they appear to say that this hardly seems enough and that it should be rounded off. Nobody in a Government, of course, would ever think of rounding a figure down, and so it goes up to £400 million—such are the gay habits of Government finance. We therefore have an extra £43 million, being, I imagine, nothing more than the difference between £357 million and £400 million. We are entitled to ask the right hon. Gentleman for more information about this. Does it represent any identified asset or is it simply the case that the Government take a cautious view of the future earning powers of the Board's colliery assets? I do not want to start an argument about private enterprise now, but this is not the sort of practice that would be permitted to private enterprise in any circumstances. [HON. MEMBERS: "Oh."] I do not wish to spoil the atmosphere on this occasion and I therefore pass from that subject.

There is a certain lack of facts in the documents and that is why I am in doubt.

The next point is the question of the £15 million which the Government said was necessary to cover loss which was involved as a result of the Government's own refusal to allow the Board to exercise its discretion and put up prices when it thought proper. We are told that this will be referred to Mr. Aubrey Jones and the National Board for Prices and Incomes. Beyond the comment that that Board will find itself in a state of fairly heavy employment, I shall leave the matter simply with the remark that this is rather a smack in the face to the consumer councils on whose efforts successive Governments have relied in the past. I think that we detect here the work not of the Minister of Power but his colleague, the First Secretary. We have now learned that the First Secretary believes that it is a healthy pastime to sit on boiling kettles, and that the right way to keep prices down is simply to tell them not to go up. I believe that if the First Secretary traces back his lineage he will find himself to be the direct descendant of one of those foolish courtiers of King Canute. Perhaps the Minister will convey that message also to his right hon. Friend.

Because this is a serious problem, I draw to the attention of the House the second leading article in The Times of 22nd November, where it was said:
"Mr. George Brown destroyed the significance of the profits targets of the gas, electricity and coal industries by his decision to keep their prices stable, at the expense of the taxpayer, in an attempt to save his incomes policy."
Later, it was said:
"The Government are thus beginning to put the clock back in a particularly discouraging way. Slowly over the past five years a workable policy for the nationalised industries had begun to emerge through trial and error."
The article concludes:
"It is becoming difficult to understand what the Government's prime aim really is."
That difficulty is one not experienced by the writer of the article alone.

I turn now to capital expenditure, a subject on which I shall not detain the House for long at this stage. On the £455 million proposed expenditure during the period to March, 1971, I content myself with the comment that it is gratifying to note that the Coal Board has resolved to find the £380 million for colliery investment from its own resources. We warmly approve that and hope that the Board will be successful in its objective. We certainly share the hopes expressed for R.O.L.F., but I hope no one will make the mistake of being too sanguine about such a development which at this moment can be regarded only as revolutionary. I should have liked a little more emphasis on coal preparation projects, which I regard as very important, but perhaps this is merely something in the drafting of the White Paper.

Now, the £75 million to be devoted to non-colliery activities. Perhaps the Parliamentary Secretary will confirm my understanding of what appears from the White Paper, that of this only £50 million is to be borrowed. The £18 million under this heading which is to be devoted to miners' houses seems to us to be by far the most important, most urgent and most justifiable. We shall at least reveal some curiosity in Committee about the £45 million to be applied to the further development of smokeless fuel. The same applies to the Board's intrusion into the chemical industry. I say at once that I should have no objection so long as the intrusion was profitable, but I wonder about the wisdom of going into something like benzole refining just at the moment when others are seeing fit to leave such activity alone. Perhaps the Minister will explain that.

I come now to the question of borrowing powers. We approve the decision that colliery investment should be found from the Board's own funds. We also approve the Board's declared intention to resume making an annual contribution to cover the difference between historic and replacement costs. But we are left with the fact that a further £205 million is the borrowing requirement of the Board over and above the £545 million reconstructed debt. I never like putting unnecessary duties upon a Minister, but, in my view, we should be justified in the circumstances in asking that the right hon. Gentleman be put under a duty to make an earlier report to Parliament about progress in this respect. In Committee, therefore, we shall propose Amendments to ensure that, when total borrowing has reached £650 million as well as when it has reached £700 million, an Order shall be necessary.

The Minister has dealt with the redeployment arrangements in some detail. I do not wish to be thought to treat them lightly, but I content myself, in view of the limited time available, with saying that I consider that this is a reasonable price to pay for a modern and efficient industry.

By and large, we welcome the bulk of the Government's proposals. The right hon. Gentleman deserves a measure of credit, particularly because, I suspect, some of his colleagues in the Cabinet have not made matters too easy for him. The Government also deserve a measure of credit for having so shed their past prejudices as to reject continuing subsidies for coal, to forget all about the control of oil imports, and to deny flatly the case for an increased tax on oil. I cannot forbear to remind the House of a speech made by the Prime Minister on 7th November, 1961:
"Let me give an example—fuel policy. Three years ago we called for a national fuel policy, for a figure that the Government would honour for the size of the coal industry. Two hundred million tons was mentioned as a figure for the national indigenous coal industry to work to. This would have meant controlling fuel oil imports, and controlling other things as well, but the Government insisted on what they call freedom of choice … As a result of their policy we lost 150,000 miners from the industry, and we now face a problem in house coal supplies this winter—as we said three years ago would happen."—[OFFICIAL REPORT, 7th November, 1961; Vol. 648, c. 921.]

The hon. Gentleman says that the Government are, as he puts it, running away from the old-fashioned idea of constantly subsidising the coal industry. Will he tell us how many subsidies, and to what total amount, were given to the coal industry? Perhaps I can save him the trouble of answering—not a copper coin.

The hon. Gentleman quite misunderstands the point. In the past, there have been loud cries from his right hon. and hon. Friends, sitting on these benches, for subsidies. I am, in courtesy, congratulating them, now that they are in Government, on having resisted the advice which they gave to us in the past.

No. The hon. Gentleman will have his opportunity to catch the eye of the Chair.

The point I stress is that the new modern industry which, we hope, will emerge must conduct itself as such. It is essential that wages and working conditions take account of the fact that the industry will be competing in the brisk labour market of the Midlands. There are serious anomalies to be ironed out. Not the slightest good purpose will be served by flying kites. On this very difficult matter, specific proposals will be necessary, and soon. In my view, there can be no justification for most expensive machinery being under-used. Highly capitalised pits are really fuel factories, and they should be churning out coal 24 hours a day, seven days a week. [HON. MEMBERS: "Impossible."] Hon. Members are very conservative in their view. It is vital that the assets of this industry be fully used if coal is again to become a vital element in the economy and not its pensioner.

It is essential that we avoid nailing unrealistic targets to the mast. If the White Paper represents what Lord Robens was reported as calling it, a shattering blow to morale, he, in my view, must himself take some of the blame for having so long insisted on the unrealistic figure of 200 million tons a year.

I sum up by saying that fuel policy must be flexible and informed by robust competition between the industries and not frustrated by attempts by any one industry, even in a transitional period, to pre-empt for itself on social or political grounds a share of the total market that it cannot win and hold by its own merits and efforts. I recognise that this Bill is painful for many people but this is also a moment of truth. We must all hope that the coal industry will grasp the opportunity, for it may not come again.

5.20 p.m.

I am acutely conscious of the appeal made by Mr. Speaker at the beginning of the debate concerning the large number of hon. Members who desire to take part and I shall try to be as brief as is consistent with clarity. I am sure that the hon. Member for Yeovil (Mr. Peyton) will forgive me if I do not follow him in detail in the arguments he adduced, but there is one general point that I would make at once. I am sure that my colleagues on this side of the House welcome the moderation and tolerance with which he has approached the problem of the coal industry and I hope that we can have a continuance of that attitude from his side of the House.

I am glad to afford a general welcome to this Bill but I should be insincere if I did not confess that I am saddened by the necessity for it. I believe that it is a bold and courageous decision for the Government to have made, especially in view of the economic difficulties the country is confronted with. I am sure that the Measure will commend itself to the House in helping to sustain an industry that has made such a large contribution to our post-war economy and upon which we must depend, as the hon. Member for Yeovil said, for the base load of our energy requirements.

Properly to appreciate the intentions and value of the Bill, it must he read in conjunction with the White Paper on Fuel Policy, which is an informative and comprehensive document ranging over the energy industries. Whoever was responsible for its authorship deserves commendation. Paragraph 47 of the White Paper says
"An attempt by artificial means to restore the market for coal to a level of about 190 to 200 million tons a year by 1970 would, on the present pattern of production and costs, be costly and probably be unavailing. The aim now must be to improve the position of the industry by further concentration of production on the economic pits."
There, in two sentences, are the intentions of the Bill—contraction, concentration and relief.

There cannot surely by any objection to Clause 1 and 2, which are designed to reconstruct the financial set-up of the National Coal Board. Every responsible student of the economics of the coal industry knew that some time, some Government would have to grasp the nettle and write off some of the losses that the National Coal Board had honourably sustained.

The Board has carried, and is carrying, burdens which are clearly a national responsibility and which were never borne by private enterprise. For instance, there was the importation of coal which the the Board had to undertake, not from its own decision. The decision to import coal from America or elsewhere was made at Cabinet level but the Board had to bear the loss eventually sustained.

Then there is the question of subsidence. Under private enterprise, when convergences of roof took place, causing surface damage, it was unheard of that those whose property had been damaged got compensation—unless they were lucky enough to own the coal underneath their house. But now, the Board bears a burden of £1¼ million a year for compensation for subsidence damage. In addition to all this, it must be remembered that British consumers have had, all this time, the cheapest coal in Europe. The £415 million mentioned in the Explanatory and Financial Memorandum will go a long way to solving the Board's financial difficulties.

The Minister is proposing to concentrate on a planned timetable of pit closures or, as the Financial Memorandum puts it, "elimination of uneconomic colliery capacity." In that high falutin' language, it sounds innocuous but it means 200 collieries being closed and many men being rendered redundant. Put that way it sounds much more serious.

I do not quarrel with the decision to reduce the number of uneconomic pits. I am on record in this House long ago as having said that the salvation of the coal industry depended on concentrating on the most remunerative and the best seams. But it should have been done long ago and as a planned operation instead of as a panic measure like this Bill.

Side by side with the intentions of the Bill, there is my right hon. Friend's estimate that the probable output of coal before 1970 will be 170 million tons to 180 million tons. He is on record as having adhered to this total on more than one occasion recently. But Lord Robens still insists that the annual target should be 200 million tons. It makes it appear that my right hon. Friend is the big bad wolf wanting to take the miners' livelihood from them.

The target of 200 million has naturally received the support of the National Union of Mineworkers and I know that I shall not carry all my trade union colleagues with me when I say that such a target is unrealistic and that there is no possibility of achieving it. The industry has wonderful recuperative power and has survived many crises in my lifetime but I cannot be persuaded of—I cannot envisage—a situation in which a return to 200 million tons a year production can be achieved.

I believe that my right hon. Friend's estimate is much more sensible than that of Lord Robens. But why should there be this conflict between my right hon. Friend and the chairman of a nationalised industry for which my right hon. Friend has statutory responsibility? I hesitate to criticise a public servant who cannot answer back—[Interruption.]—he cannot answer back in this place, at any rate —but I have never understood that it was the function of the chairman of a publicly-owned industry to indulge in public propaganda in opposition to the Minister and the Government.

I beg my right hon. Friend to bring this conflict to an end. It creates uncertainty in the public mind, particularly in the coalfields, and is calculated to do more harm than this Bill is designed to do.

A total of £30 million is to be placed at the disposal of the Board to be expended in connection with pit closures. I have had over 50 years' association with he industry in one capacity or the other, and I declare, with all the earnestness in my possession and with all the solemnity of which I am capable, that I have never known the morale of the industry to be as low as it is now. To me it is reminiscent of the 1930s, when the silent winding gear was the symbol of despair and desolation in many a mining village. Confidence in the coal industry has gone, and somehow it must be recovered.

It is all right for the Minister to say that there is a job awaiting every man who is displaced, who is made redundant. I know from experience that when pits are closed there are always some victims. The plan for migration from old areas to new areas has not been an outstanding success. There is always a man over 50 who is reluctant to pull up his roots and go to a new coalfield; there is a man with a mortgage; a man who is partially disabled, who is not wanted in a new coalfield; a man with children at school who is concerned about their education and wonders whether he can find a school in proximity to new surroundings which will equal that which his children now attend. There are many hardships and there will be many victims as a result of this policy.

I welcome the provision of the £30 million to cushion the effect of the social consequences of these pit closures, but I emphasise that the amount is hopelessly inadequate and ought to be at least twice as much. The National Coal Board is expected to perform miracles with this money. It can build houses, make settlement allowances, pay for travelling, pay for loss of earnings, and for compensation for termination of office before the normal period. This has to be spread over an average of 30 places in the United Kingdom each year until 27th March, 1971. I wonder what it will do the day afterwards. Even if a redundant coalfield worker is willing to migrate to a new coalfield, he may be given a new house at a higher rent than he was paying in the old area. Then he will be faced at once with a loss of earnings of £5 to £10 a week. A coalface worker who goes to a new colliery has no chance of getting into the higher wage bracket. I know that upgrading is always taking place, but when a man goes to a new coalfield he finds that there is already a queue of people waiting to go to the face, and in these days of intensive mechanisation there are fewer chances of being upgraded to the coalface.

I was talking to a miner the other day who said that he had as much chance of getting promotion to the coalface as Floyd Patterson had of winning the heavyweight title. Migration will not be a success unless the redundancy allowances are much greater than they are at present. I ask the Minister to look into this problem and to consider it in the light of reports that he is receiving from the coalfields. The Midland coalfields will not feel the same total impact as Scotland or South Wales, but individual blows will be just as severe. The only difference is that the number of victims will be less. The part of the country which I represent now has a labour force of 20,000 men. In five years it will lose 6,000. Shall we be scheduled as a development district? I doubt it very much.

The complete transfer of men from our coalfields to the Notts coalfields is almost an impossibility. What is needed is a measure of cohesion between the Board of Trade, the Ministry of Labour and the Ministry of Power to settle new industry in the areas affected. Only by their willing co-operation shall we be able to encompass this problem and reduce hardship to a minimum. I declare my sincere belief that the coal industry is not dead and done for. Its extinction is not possible within our lifetime, despite what may be the outcome of the explorations in the North Sea. The industry will provide the base load of our energies for many years to come. The introduction of this Bill to make the coal industry economically viable will be generally welcomed. If the human considerations are equal to the economic considerations I shall be well satisfied.

5.35 p.m.

The hon. Gentleman the Member for Bolsover (Mr. Neal) spoke from long years of experience and made a most balanced speech. He said something which will, I hope, support something which I am going to say. In view of the fairly late hour, I do not wish to recapitulate any of the matters dealt with in a very good speech by the Minister and forcibly dealt with by my hon. Friend the Member for Yeovil (Mr. Peyton). We are writing off almost half of the Coal Board's deficit—£4l5 million out of £960 million. It may be right to do so, but it is a very large burden to put on the taxpayers' shoulders. That £415 million includes, moreover, the accumulated deficit of £91 million which no one has so far mentioned.

In reflecting on what is needed to be done by way of putting pits out of commission one must have some regard to the very large sums of money which have been expended ever since 1947, in reorganising and modernising the coal industry. Some part of this has been expended on the particular pits we are considering today. I cannot help feeling that a great many pits which have already gone out of operation, and a great many of the pits which are now doomed to go into extinction, have had large sums of money spent on them. We have not spent this money very wisely. At this point I bring the hon. Gentleman the Member for Bolsover into the picture, because he said precisely what I want to say, and that is, why has this matter of concentration been left so late? We should have saved tens of millions of £s if we had recognised that concentration was a considerable answer to a great many of our problems.

Before we get down to considering what should be done, I think that we must have a clear view of what has been happening over the last three or four years. The 1963 accounts comprised a 15-month period. This period included two winters and the coldest cold snap we have had for 40 years. The result of those 15 months was a return of £100,000 on a turnover of £1,000 million. The next year there was a surplus of £500,000. In the previous accounting period the Coal Board had paid £10 million in an attempt to bring depreciation more into line with replacement costs. Monies which had been put to reserve were withdrawn during that accounting period. It might be said that in 1964 there was an effective loss of about £30 million, otherwise this year's loss is unexplainable. This year's loss we know to be of the order of £44 million to £45 million to date, probably resulting in a loss of some £55 million on the year.

In the light of these stark facts we have to look at the situation. Are we satisfied that this tremendous write-off, this very large burden which is being put on the taxpayers' shoulders, is going to be accompanied by such changes in the coal industry as will make it viable? Unless we are so satisfied, we must have a hard look at what we are being asked to do in the Bill which is before us.

Before I go any further, I must say a word about pit closures. It would be utterly unsympathetic on my part if I did not. I realise the hardship that the decision means to men up and down the country, and I do not think that anyone in the House is other than sympathetic to the situation which thereby arises. But we should be quite wrong if we attempted to oppose the closures, and we know it. But, however harsh the decision may appear, it is something which has been going on in the mining industry all my lifetime, though possibly not as drastically as now. Pits are opened and pits are closed. It is an inevitability.

What is important is that it should he done in the most humane way possible, and in that regard we should pay tribute to the National Coal Board and to the Government for the efforts that they have made in the past and that I know they are making now to reduce the burden on the individual men who are put out of work by this decision. That we must do it is inevitable, but there is one qualification that I would like to make. IL may well be that among the pits which it has been decided to close there are some with very considerable reserves. They may not be economic to us at the moment, but it is not beyond the bounds of possibility that they could be made into economic pits at some future date. I would urge the National Coal Board to look closely into the matter of "care and maintenance." It was done in the past, and I believe that it could be done today. It means very careful consideration, but I hope that the Board will not pass by the desirability of looking into that particular aspect of the matter.

From a purely technical point of view, there is a good deal to be pleased about in the present condition of the industry. OMS has gone up in the last period quite sharply but, with the high rate of absenteeism, how far that can be translated into OMY, which is a much more important statistic, I cannot say. Undoubtedly the managers and technicians up and down the country are doing a good job in their own fields, and the industry is modernising itself in a most satisfactory way.

Automation, as distinct from computer control, is still in its infancy. There are two experimental laces at the moment, and when Bevercoates becomes coal-producing no doubt that will be a third. But to suggest that the general application of automation up and down the coalfields is a practical possibility is stretching the imagination. We must hope that as much as possible in that direction can be done, but we should be unwise if we held out any too great hopes that it will be very widely applied in the near future.

Having said that, I want to come to the really important part of my speech, and I want once again to advocate something which I have been advocating almost ever since the limitations of the organisation of the coal industry which came about as the result of the 1947 Act began to show themselves. I do not think that the industry's organisation has ever been a wholly satisfactory one, and the time is overdue when we should look at it most carefully. I have advocated, and I advocate again, a more industrialised and a less functional approach to the problems of administration.

There was a debate in the House in 1948, 17 years ago, when I outlined my views on this, and I have been rereading that debate. It was answered by the late Hugh Gaitskell, who had then become Minister of Power, and he allocated more than four columns of his speech to dealing with the suggestions that I made. Rereading that debate, I can see that the gravamen of his criticisms was not directed to the suggestions that I was making so much as to the timing of what I was advocating. He ended his remarks with the significant comment that it might well he that when coal was in full supply and there was all the equipment available that the coal industry needed, the suggestions that I made might be appropriate.

Coal has been in full supply for the last seven years, and the coal industry has available today all the modern equipment that it needs. What I said then and what I say again today is that the Coal Board should divorce itself from its functional activities, restricting itself to policy but retaining the duties of coordination of sales activities, wages and conditions of employment, research and its dissemination, training in the higher echelons, promotions and appointments below board below, overall finance and investment, and the answerability of the Board to Parliament.

Below the Board there should be, temporarily anyhow, the divisions, probably coming down to a matter of four or so in view of the present reduction in pits and in due course, perhaps, disappearing. I do not think that they should do that immediately. The considerable transition of making the areas autonomous cannot be brought about overnight, and they wilt still require the guidance of men with whom they are familiar. As I say, the divisions should be kept in being for the time, though with fewer of them than at present and with the prospect that in due course they will wither away. Again, it is possible that with the reduction of pits involved the areas themselves may come down to something of the order of 30 or so. They should be fully autonomous entities and they should be entirely responsible for their own productive administration.

If this happens, we shall have very large reductions at Hobart House and in the divisions, not so much in salaries but in personnel, and we shall be able to relieve a lot of the men at those points for work in the areas and the like.

There is the dual benefit of economies at the centre and the advantage of, trained men going out to the areas themselves. Ours is the only country in the world which has ever attempted to run its coal industry from its capital city. No other country has done it. The Pas de Calais coalfield is not run from Paris; it is run from Lens. The Ruhr coalfield does not do it either; it is run from Essen and Hamburg. A good many years ago I was invited to go to Russia to report on the Donbas, and that was not run from Moscow but from Rostock on Don. The same applies throughout the world. For some reason, we have attempted to run the productive administration of our coal industry from London, and it has not been a success. The time has come when we should make that fundamental change. If we do so and push on with the principle of concentration, costs of production can be substantially improved. It would be unwise of me to give a particular figure, but I believe that there could be and should be bigger economies in that direction.

I do not want to finish on a note of pessimism. I am a great believer in the coal industry. When we look at the world at large, we see that the total production of coal in the world last year went up by no less than 109 million tons. America, Russia, Poland, South Africa, and particularly Australia, are pushing up their production. It may well be that by 1970 we will want more coal. In many ways we are in a very favourable position to produce not only all the coal we need, but to produce it effectively. We have immense reserves of coal, and in this connection I might mention that during the last nine years we have found an additional 2,500 million tons of reserves in the North Sea.

We are mining coal at a depth which, on average, is much shallower than that at which most of our competitors in Europe are mining theirs. We have on the whole flatter seams and conditions in which technology can go ahead at a satisfactory pace. We have the best managers and technicians to be found anywhere. Indeed, I go so far as to say that from the point of view of technocracy we may be resuming the position that we held at the beginning of the century when we led the world in that regard. We have the best indigenous personnel in the world for our mines. Our colliers are second to none. Given the type of reorganisation which once again I advocate, given concentration of production in the most effective manner, I believe that we may still see the resurgence of King Coal.

5.51 p.m.

It is always a great pleasure to follow the hon. and gallant Member for South Fylde (Colonel Lancaster). Those who know his connection with the Nottinghamshire coalfields know that he has a wealth of mining experience. We on this side of the House may not always have agreed with his conclusions, but we have certainly welcomed his opinions when this subject has been debated in the House.

I was interested to hear him say that coal production in the countries which he mentioned was going up. For some time now coal production here has been going down, and the estimates provided for us in the recent White Paper seem to show that there is no likelihood of change in that trend.

The speeches that we have heard so far—and, no doubt, this will be the theme of following speakers—have emphasised the far-reaching importance of the matter being discussed today, namely, the question of fuel and the supply of our energy requirements. No one would dispute that this is of importance to the nation as a whole, but it is of particular importance to the coal-mining industry, and it is therefore right that this Bill should give us the opportunity of discussing Britain's fuel and energy requirements. Whatever may be the conclusions of the two recently published White Papers and the Bill, and whatever may be our views of them, one thing that we cannot deny is that for the first time in many years the Government have squarely faced our fuel problems and the financial problems of the National Coal Board.

There has been procrastination and lack of resolution in dealing with these problems over the last decade, and the debates which have taken place in this House during that period amply justify that contention. There are many reasons for this, and I do not want to go into them all, because of the appeal that was made to us by Mr. Speaker himself, but I think it should be said that coal has always occupied a place of prominence in the life of the nation, and that at no time has it been far removed from the minds of the people themselves.

I was interested to read a very objective article in the Daily Telegraph yesterday, the opening paragraph of which said:
"The coal industry has at various times been short of men, money, coal, and customers. It is never short of difficulties or documentation which tend to flourish together in sinister alliance."
It cannot be gainsaid that for many years the coal industry of this country was the cockpit of economic struggle. It is still a cockpit, but of a different kind. It is now the cockpit of argument and of differing ideas as to the place that coal should take in regard to the supply of energy.

Fifteen years ago—and that is not a long time, is it?—the energy needs of this country were almost entirely dependent on coal. The impact of oil was almost negligible as an alternative fuel. Ninety per cent. of our fuel needs were met by coal. In 1950 the experts estimated that 240 million tons of coal would be needed to meet the nation's demand in 1965, and that it would be necessary to increase that figure by one million tons by 1970, and on this basis, and quite rightly, the National Coal Board was asked to plan and to invest accordingly.

The White Paper shows that those estimates were wrong. They are in no way a true reflection of the position with regard to the supply of coal for our energy requirements today. Is there any guarantee that the estimate of 180 million tons of coal for 1970 will be any nearer the point of accuracy than was the 1950 estimate of 240 million tons for 1965? I know why t here is a big difference between the 1950 estimate and the position today, but this margin of 50 to 60 million tons is some- thing that we should consider very seriously.

What is the reason? It is the intrusion of oil. In this matter of the intrusion of oil and the coming on to the scene of an alternative fuel for energy purposes, one of my regrets is that a sense of coordination between the two fuels has been lacking. Instead, it is no exaggeration to say that there has been a scramble for the markets that have been going, and that in the process coal consumption and demand have taken a heavy blow. Table 1 of the first White Paper recently published reveals not only the consequences but the tempo of the erosion, especially since 1956.

I will quote the figures. In 1956 coal consumption was 217½ million tons. In 1964 it was only 197·2 million tons. On the other hand, whereas in 1956 the consumption of oil was 37½ million tons, in 1964 it was 93½ million tons. In his estimate of 170 million or 180 million tons the Minister is undoubtedly working on existing trends, and on what has been taking place since 1956. I find nothing in the White Paper to indicate that any change in these trends is envisaged. The production of our indigenous fuel in 1970 is to be less than it is now, on the estimate of the White Paper. Can the Minister tell the House why he has accepted the inevitability of a contraction in the coal industry—because that contraction is implicit in the White Paper?

Inherent in the estimates given to us we are confronted with a situation that is very dangerous, and is likely to be damaging to the national economy. We should not dismiss it lightly. I want to put forward three reasons why I believe the situation to be extremely dangerous to our economy. The first concerns the question of our balance of payments, the second the reserves of oil, and the third the political instability that exists in the areas from which the oil comes. I propose to make only one or two germane observations on those three important points.

Can the Minister be a little more forthcoming about the question of the balance of payments? Can he tell the House more about the reactions of the purchase of oil from abroad, and its effect on the balance of payments? Paragraph 58 of the White Paper does not give a fair picture. What is the net effect on our balance of payments? The gross figure is said to be about 500 million tons. Paragraph 58 says that there is this consideration, and that consideration, and that the net effect is likely to be much less than the stated gross figure. Is it 100 million tons, or 150 million tons—or is it by any chance even less than 100 million tons? I submit that on this very important point which affects our economy the House is entitled to have a little more precise information.

Then comes the question of reserves of oil. Paragraph 57 states that
"there are adequate reserves of oil … to meet rapidly growing consumption."
For how long? Paragraph 57 also states that on present consumption there is about 35 years' supply, but if energy demands increase, requiring a greater use of oil, as is envisaged in the White Paper, it is likely that the reserves will last for less than 30 years. I am not saying that the Minister can give a precise figure, because it is difficult to estimate. The oil industry is confident that additional reserves will be proved as they are needed. I do not know. I am not a geologist or a prospector for oil. I merely pose the question because I sincerely believe that the question of oil reserves is very important to our economy.

What about the areas from where the oil comes? Like the other questions that I have posed, I realise that this is a very speculative one. But the situation cannot be ruled out—and this is where the danger lies—in which oil ceases to flow. We had a recent classical example in the early days of the Suez crisis. Petrol rationing soon had to be brought in. The main reason for my reference to these matters is that in my opinion we shall make a mistake if we put most of our eggs in one basket at the expense of our own indigenous fuel. We shall do this at our economic peril.

There is also the question of the reappraisal of the financial structure of the National Coal Board, as laid down in the Bill. This is long overdue, as my hon. Friend the Member for Bolsover {Mr. Neal) said. It has been carrying crippling burdens. Those burdens are reflected in the low wage rates that have been paid and are still being paid to day workers in the industry. Two-thirds of the workers are in that category. Some of them, even today, taking into account the latest increase in wages, are taking home a net wage of just under £10 a week. That does not reflect great credit upon an industry which, as the Minister says, is the basis of our economy.

I could enumerate many examples of the burdens on the industry, and tell a long story about it, but I want to deal with it only in passing. First, compensation has to be paid not only to the coal owners but to the royalty owners. Then there is the loss on imported coal. There is also the question of stocking when demand falls. Last, but not least, there is the question of the capital needed to put this industry in a state of technical efficiency. The House should know, and it should be proclaimed from the house tops, that every year but one since 1947, the National Coal Board has made an operating profit, but the burden of interest rates has been like a millstone round its neck. Now, at last —I congratulate the Minister and the Government on this—relief has come. This bold and necessary step deserves the praise of the mining industry in particular. The Bill's provisions are not unprecedented; one could think of parallels in agriculture and the aircraft and cotton industries and give a whole catalogue of precedents for these proposals.

The difficulties of the coal industry are not of its own making. The Minister referred to the record of the industry over the last few years. Productivity has increased and output per man-shift has gone up. The tragedy is that, as we were told from the Box this afternoon, at the end of the present coal year, in spite of that record, there is likely to be a considerable deficit. These burdens, some of which the industry will now be relieved of, are the main reason.

The expenditure of £30 million has already been mentioned by my hon. Friend the Member for Bolsover. Its purpose is very good—to cushion the human and social consequences of proposed pit closures—but it is not a quid pro quo. Indications are that, if the Coal Board spends more each year than it spends now on alleviating the social and human consequences of closures—and it spends £5 million annually —only the increase will be met by the Government. That means that if, next year, the Coal Board spends £6 million for this purpose, the Government will give only £1 million of that total and the Coal Board will have to find five-sixths of the total, although it is the responsibility of the Government to ameliorate these consequences.

No miner could sit down without saying something about pit closures. First of all, this is not new. It has been going on since 1947. More than 500 pits have been closed since nationalisation, 216 in the last five years. We should face the fact that this has affected the psychology of the mining communities where these closures have been made—and not only there but beyond. There is very strong psychological reaction to pit closures in my area, which is expanding.

This reaction shows itself in the following way. I come from the Nottinghamshire part of the East Midlands and I was told on very good authority a month ago that, in that area, there is an exodus from the pits of 100 a week, of which by far the biggest percentage is among piece-rate workers. I fear that because of past pit closures and those which are proposed, morale in the mining industry is very low and confidence in its future is shaky. That is a great pity; I believe that there is still a great future for the mining industry. Will the conditions for redeployment from the contracting to the expanding areas be sufficiently attractive? For the reasons I have given, I have grave doubts.

Pit closures are not pleasant. Some of them may be inevitable, where pits are aging and resources are becoming exhausted. It is also extremely difficult to work some of the pits economically because of geological conditions. A precondition for solving this important problem is that, where there is a disposition to transfer, better facilities should be provided and there should be adequate housing. For those who are unable to transfer because of age or disability, the provision of alternative employment should be a prerequisite to the closing of collieries.

6.15 p.m.

Like the hon. Member for Mansfield (Mr. Bernard Taylor), I represent an area in Yorkshire which could truly be called a growth area of the coal industry. For this area, no less than for any other part of the country the central problem which we should be debating today is that of manpower. This is the crucial issue in the areas where redeployment—to use that euphemistic term which means a full stop for many miners—has to take place, but it is also the crucial issue in growth areas like mine.

Perhaps the Parliamentary Secretary will check up, but I think that some of the figures given in publications about redeployment of miners are very loose, and in many cases quite incompatible. The Minister told us that the figure involved in redeployment is 120,000 of which approximately 50,000 will be leaving the industry. He said that half will be redeployed in areas which are within daily travelling distance of the mines where the men work—

I think that I said 120,000 of which 85,000 are offered employment by the Board. This is a question of redeployment. I then pointed out that a goodly number of the older men would undoubtedly have retired before the end of the five years, and that it would therefore be a figure far smaller than the one the hon. Gentleman has in mind.

I am grateful to the Minister for correcting me. I was working on the Coal Board's Press hand-out, which observes that about half will be able to go to mining jobs within daily travelling distance of the mine where they now work and that another 25,000, bringing the total to 80,000–85,000, will be able to leave to go to other coalfields. Normal wastage in transfers to other industries will mean that very few of the remainder will be without jobs, though they will not, of course, have jobs in coal mining.

The wastage of approximately 13 per cent. per annum, the national average, will surely be very much higher in respect of that group of miners whom we are now considering in terms of redeployment.

Here I would like to make a reference to the National Plan, which the Parliamentary Secretary may not have, but perhaps he could check up on what I think is a real discrepancy in the prospective wastage in coal mining as given in Parts I and II of the Plan. From page 38 of Part II of the Plan it will be seen that the National Coal Board estimates that the annual wastage will rise to 29,000 a year. In the first part of the Plan we are told that the annual wastage will drop from 27,000 to a substantially lower figure. Which figure is correct? Will wastage decrease or increase? The lower figure quoted in the National Plan is on page 122 of Part I. But in spite of these uncertainties about the effect on manpower of redeployment, the figures surely indicate, whatever else they may mean, that in coming years—and I believe that this is true of my part of Yorkshire—we shall be led to a manpower crisis. I use the term advisedly, as I hope to show. It is ironic when one considers the pious air of protest of the Prime Minister when he was in Opposition and when he criticised the Government of the day for allowing the coal-mining industry to lose 150,000 miners a year. But that policy is now being precisely paralleled by his own Government who are stepping up the rate of wastage to an even higher figure. The Prime Minister has in addition sponsored a policy of importing at least as much oil as in the past although he criticised such a policy when he was in Opposition with all the eloquence at his command.

May I comment on the financial aspects of the White Paper and the Bill, because I believe that the financial troubles are intimately connected with the manpower crisis which we have to solve. The evidence of this is not far to seek. My hon. Friend the Member for Yeovil (Mr. Peyton) referred to the rather depressing financial results for the first six months of this year in which the deficit looks like rising from £18 million to £44 million in the first half of the year alone, which represents a deterioration of over £25 million. It is not without interest that the National Coal Board, in commenting on this unsatisfactory financial result, stated that the improvement in productivity, for which we all praise the industry—it is an improvement which has been going on for a long time—
"was more than offset by the continuing loss of manpower, increased absence and higher costs, including wages and salaries and National Insurance."
The question which we have to face is whether the White Paper and the Bill hold any fundamental prospect for the improvement of this financial position. I have the impression that the Government's overall economic policy will not help the industry at all in this respect.

May I put a question to the Parliamentary Secretary? It may be unfair to refer him to a document which is not immediately available to him, but if he took the opportunity to look at it, it would be enlightening. The White Paper says that we are to have written off about £20 million to £30 million of interest charges—a burden which will be passed to the taxpayer, having been taken off the back of the Coal Board. As far as I can see, this includes the £15 million which has been allowed for a price increase which the Government will not in fact permit on account of the First Secretary's economic policy.

I must say in passing that it is economic double-talk to pretend that in overruling the Coal Board in their wish to raise prices in order to meet their rising costs, the Government will not affect everybody in exactly the same way. The £15 million will go straight on the back of the taxpayer if it is taken off the back of the consumer of coal and electricity. It is rather like telling the bakers that they must not raise the price of a loaf of bread but that they could put a special Purchase Tax on it and scoop up the Purchase Tax. It has exactly the same effect. The burden still exists and must be borne. But there is an additional burden—the potential liability, to which the White Paper refers, of an extra £25 million deficit over the year. I think that that is correct, but perhaps the Parliamentary Secretary will check my figure. We therefore have a potential deficit this year of £20 million to £30 million in interest charges to be passed on to the taxpayer, with a possible addition of £25 million arising from operating costs over the year. This makes about £50 million which the taxpayer has to bear. This is a very substantial item. Now perhaps the Parliamentary Secretary could answer this. Is it in addition to or instead of the very large estimates which were contained in the Chancellor's financial statement earlier this year? I refer to Command Paper 2624, a White Paper relating to loans from the Consolidated Fund by which the Coal Board is to be allowed to borrow £53 million net from the Chancellor of the Exchequer for the year 1965–66. We read, in an interesting footnote to this item, that
"This figure is based on present prospects. These are now under review."
Presumably the White Paper which we are discussing and the Bill represent this review. Is the figure of £53 million net borrowing from the Chancellor by the National Coal Board in this year to be substantially diminished or is it a burden to be borne by the Chancellor in addition to the interest payments and the additional deficit to which I have referred?

It appears that the Minister could well present the Chancellor with a bill for £100 million in the coming financial year, which is a staggering bill. We all know that part of it will be financed not by taxation but below the line by the floating debt. The Government would be holding down the price of coal and inflating the economy at the same time, which is a nonsensical combination. I hope that the Parliamentary Secretary will enlighten us on this point.

May I sound a slightly more optimistic note by turning away from the gloomy financial position to the prospects of the coal industry, particularly in Yorkshire, which I believe are outstandingly rosy and hopeful. I prefer Lord Roben's optimism to the rather pessimistic note struck in the National Plan and in the White Paper on Fuel Policy. The developments which we have in Yorkshire certainly make it possible to share this optimism.

May I point out to the House why this is so? In the first case we have the coal. But in addition to the coal there are developments in the West and East Riding of various ancillary investments which are intimately connected with the use of coal. Very near my constituency we have three of the largest power stations under construction which have been built anywhere in Europe. The power station at Drax is certainly to be the biggest in Europe—5,000 mW. Eggborough is under contruction, and at Ferrybridge, which was involved recently in the accident to the cooling towers, there is also a giant power station. Thus adjacent to the coalfield we have these colossal power stations geared to the coal industry. Moving further to the east we have the Port of Immingham which is to be substantially extended precisely for the purpose of exporting coal.

Here I should like to turn to what I regard as some further loose statistics about coal exports. The White Paper on Fuel Policy explicitly states that the coal exports for the industry cannot be put higher than five million tons a year by the year 1970. I am certain that all my hon. Friends and some hon. Members opposite feel that this is a depressingly low figure. It is striking that in their Annual Report the National Coal Board propose to double that prospective figure. They state that, "In addition, the value of coal exports during the last five years has been over £100 million,
"and the Board aim to increase exports to about 10 million tons a year."
Which is correct—the figure of 5 million tons of the National Plan or the Coal Board's target of 10 million tons? These do not add up at all. A 100 per cent. difference in target is not satisfactory.

We should aim at the 10 million figure and I believe that that could be achieved with the assistance of the Yorkshire coalfields, new trunk roads in the East Riding from the Great North Road and the development of the Port of Immingham. However, let us be certain that the Government are behind the Coal Board at aiming at this figure and that it is not to be left at 5 million tons.

The question of the electricity industry's consumption of coal is essential to the prospects of the coal-mining industry and, in this connection, we must note the serious discrepancy in the National Plan on this matter. If one looks at page 41 of Part II of the National Plan, which refers to the electricity generating industry, one finds this striking and rather disturbing statement:
"The industry"—
that is, the electricity industry—
"was originally asked in making its estimates to assume that consumers' expenditure would rise by an average of 2·7 per cent. per annum"
I stress that figure of 2·7 per cent.
"The implications of increasing that figure to 3·2 per cent.—the National Plan forecast—will be considered by the industry at its next regular review of future requirements."
One can deduce from that that the estimates of coal requirements are based on an anticipated sale of electricity which is about 20 per cent. below what would be the case if the electricity industry was geared to the National Plan target of 3·2 per cent. per annum. A 20 per cent. difference in target will make a substantial difference to the quantity of coal required for the industry.

Is the prospect of the sale of electricity based on a 2·7 per cent. increase in consumption or 3·2 per cent.? If it is 3·2 per cent. can we not expect a higher target for coal consumption by the power stations by 1970? I believe that the National Plan under-estimates the amount of coal that will be required by the electricity industry, and under-estimates it seriously. I hope that the Parliamentary Secretary will give an encouraging answer on this issue.

I return to the manpower problem, which I believe is the central difficulty of the whole industry. It is the strategic and vital link between the redeployment, as it is now called, which we are discussing today and the prospects which we all hope and believe the coal industry will have in future. The Minister must offer some prospects of rational and realistic changes in terms of the wage structure of the industry.

I could quote from many sources simple figures to demonstrate the importance of this problem. Let me start with what is called "voluntary wastage". The degree of voluntary wastage in the Yorkshire coalfield is now what can only be described as catastrophic. For the first 32 weeks of the current year the wastage in that area reached the staggering total of 6,300 men, which is well over 1,000 higher than any other part of the country—this in the coalfield on which practically the whole future of the industry, coupled with some coalfields in the East and West Midlands, rests. We have far and away the highest level of voluntary wastage. This is catastrophic when, at the same time, we are deploying thousands of millions of pounds of capital to develop power stations, to expand ports and to capitalise the coal industry. What do the Government intend to do to arrest this wastage in a prosperous area like the West Riding?

The reason for the wastage is not hard to find. Average weekly earnings in the Yorkshire coalfield in 1964–65 were £18 1s. 6d. a week, not nearly high enough to keep men in the industry. Surface workers in particular were taking home an average of £14 a week—[Interruption.]—and I would be happy to debate this matter with hon. Gentlemen opposite at any time. I gather from the interruption that the figure is less than £14, which makes the problem even more serious.

A labourer working on a power station project in my constituency can take home £30 to £40 a week with the overtime permitted to him. We are, or will be, using between 5,000 and 7,000 men at these power station projects and if the Minister thinks that miners in the North-East will go to the West Riding and settle down with an income of 15 quid a week he is very much mistaken. They will instead go to the power station and other capital projects where they can earn much higher wages. It is not good enough for these crucially important working men, technicians and experts, to be offered a fraction of what they can earn as labourers on the big construction sites. Further, redeployment will not help unless we have a wage structure for surface workers as well as those working underground, with wages at least comparable with other industries.

We have a chance in Yorkshire to lead not only the world but England, which is a more difficult problem, in mining and the use of coal. It all depends on the satisfactory recruitment and maintenance of manpower. We are losing that manpower at present and we can only keep it by a more rational wage structure in relation to local wages. I hope that the Minister will offer good prospects of this coming about.

6.37 p.m.

Towards the end of his speech the Minister said, with the emotion of a Hyde Park Corner speaker on a Sunday morning, that mineworkers and the coal industry had to face serious changes. I remind my right hon. Friend that we have been facing such changes since 1957. In that year 780,000 men were employed in the industry. Today only 450,000 men are employed in it. The amount of mechanisation has increased from 40 per cent. in 1947 to 80 per cent. today, resulting in the output per man shift in the East Midlands rising from 34 cwt. in 1947 to 51 cwt. today. Through eight years of steep rundown of manpower in the industry there has not been one major labour problem. Credit for this is due to the trade unions and employers and the magnificent way in which they have handled the redeployment problems as they have arisen.

The hon. Member for Yeovil (Mr. Peyton) can have a good half hour's dull reading tomorrow morning if he reads his speech in HANSARD. That is all I will say about his remarks.

Having been connected with the mining industry for 40 years, 34 of them as a miner—30 of those as a coal-face worker—ind having spent six years in Parliament representing a mining constituency, I think I can claim to be able to speak on behalf of the miners in a coal debate. I regret to say that the only thing that has not been done so far in this debate is to take a collection for the Speaker[Laughter.]—I apologise; I should have said for my right hon. Friend the Minister. I say that because there has been more kudos and back-slapping in this debate than I have heard in any debate on the coal industry since I have been a Member of the House. I hope to prove, before I resume my seat, that all this back-slapping is very undeserved indeed.

Over the years, I have seen this industry in the doldrums and at the peak of its industrial activity. It was in the doldrums in 1926, when we heard the tramp of marching feet. It was in the doldrums again in 1931, and the hon. and gallant Member for South Fylde (Colonel Lancaster) was a coal owner who trod the men into the ground, and people like him said that they would make the coalminers eat grass. They very nearly did, but they did not get us down, even then. During the war the coal miner, at long last, was in the lead in this country. We then reached the peak of our industrial activity; so much so that if at that time a man voluntarily had three days off work in a month he was either sent to prison or fined £20 for absenteeism. The miners were as important as that to the country then. I hope to make the House understand that the times have again changed to a period of deepest despondency for the individual miner.

During every coal debate that I have heard, Scotland, Wales and Durham seem to have been the pinpoints of trouble, and now, again, as in the past, these three coal-producing areas are to be the hardest-hit victims of the serious cut back in manpower and productivity in this industry.

The miners in the East Midlands are at present producing more than 50 cwt. a man shift. The pits there have the best seams, the best gradients, the best mechanisation potential in the whole of the country and, I am pleased to say, a very good labour force to put that mechanisation into operation. But I represent a constituency in the county of Derbyshire which is very sorely hit by the Plan, so do not let us think of the whole of the East Midlands as a prosperous division without looking also at the isolated pockets that will suffer as a consequence of mine closures.

The area I refer to is the whole county of Derbyshire—not just my constituency, which is hit badly enough—from the south to the north. In that part of the county covered by the North Derbyshire Area organisation of the National Union of Mineworkers, 28 pits are operating. According to the Plan, six of those are to close by 1970. Those six pits employ 6,150 men. In the last five years, seven pits have closed, employing 6,050 men.

There is not a pit in the whole of North Derbyshire that can claim to be expanding sufficiently to absorb the men affected by the closures that are to take place. That means that 90 per cent. Of the displaced men will have to be absorbed elsewhere in the East Midlands, and that, in turn, means a mass migration of the mining population from Derbyshire into Nottinghamshire. It is said that Nottinghamshire can absorb the men who have to be redeployed, but as late as Monday of this week a serious warning was offered by the Nottinghamshire miners that the Derbyshire miners displaced by the Plan, particularly the skilled workers, must stand in the queue at the pits to which they will be taken before they can go to the coal face and earn high wages.

That serious warning has been quite rightly made. No Derbyshire man has a right to move to Nottinghamshire and go straight to the coal face, when the boys in that county themselves have to take their place in the queue in order to get the high wages. The same thing applies to Scotsmen coming to the East Midlands, or vice versa. In the East Midlands, a boy is trained for the coal face, and when the opportunity comes he is placed at the coal face so as to earn reasonably high wages and produce a reasonable output of coal.

I have the breakdown of every pit in Derbyshire that has closed during the last five years and will close during the next five years, together with the reasons given for closure—either because they are exhausted or because it is said that they are uneconomic at the moment. In that respect they may be just on the line or just below it, or even just above it.

Here I accuse the National Coal Board, from the Chairman to the very lowest ranks, of sabotaging some Derbyshire pits in the interests of cannibalisation, because the manpower shortage is so acute in the East Midlands. That is a very serious charge to make, but a pit was closed in my constituency just for technical reasons brought forward by the Chairman of the National Coal Board and his advisers to baffle the trade union and the men in the pit. They closed that pit in order to cannibalise it to get more productivity.

In that case, 79 men were transferred from Morton to another pit in the area 20 miles away. That was done six months ago; at this moment, out of those 79 men, only 23 are left. This is a serious rundown of manpower. The men have been forced to leave the industry by economic factors. Travelling at the end and beginning of the shift puts at least two hours on to each working day. When a man works 7¼ hours below ground he does not want even one minute added to that time. He wants to be relieved of inconvenience as much as possible when he has been "down the hole". And I know what I am talking about when I speak of inconvenience at the coal face.

I would put most of the responsibility for the manpower shortage today at the door of the Chairman of the National Coal Board. He was appointed with terms of reference laid down by a Conservative Government to slash the mining industry and make it pay. He adopted a recruiting policy that we said at the time was suicidal. He took the whole organisation of recruitment to national level. He decided to have controlled recruiting—25 per cent. recruits each year. He cut the line altogether at green labour. It had to be juveniles coming to the pit straight from school.

He knew that there was a natural wastage of 60,000 men at the top every year through injury, accident, illness, death—and, of course, voluntary leaving. So he anticipated cutting back the manpower in the industry by 35,000 a year as a result of natural circumstances. Events up to 1965 have proved this to be a very bad example of the man at the top knowing best. The Chairman could not have known best. He showed his limited knowledge of the industry when he decided at the start to take recruitment out of the hands of the area and divisional managers, who know the men in the coal mines, having been brought up in the industry from birth.

We are now suffering from the policies outlined and implemented by the Chairman of the National Coal Board. He was not solely responsible, of course—his predecessor was partly responsible—because I could not give the Chairman all the intellectual credit for devising such a scheme that shows his lack of knowledge of the industry and of the men he had to manage. I may be bringing tears of consternation to the eyes of the Conservatives, but they have certainly brought tears of consternation to us on this side during the last 13 years when we have been urging an improvement in the conditions in the coal mining industry.

The industry today is suffering from the policies of the Tory Party. That party has done everything in its power over the years to discredit nationalisation in the eyes of the world. If it had not been for the nationalisation of the coal mines in 1947 this country would have been bankrupt by 1955, and everyone who sits on the opposite side of the House whether he has spoken in this debate or not, knows it. [An HON. MEMBER: "Nonsense."] It is not nonsense, although in the whole of the 13 years hon. Members opposite never mooted denationalisation of the coal mines. They knew that the hon. and gallant Member for South Flyde and others would not buy their shares in again.

Hon. Members know that they would not. I did not think that I should be speaking in a debate in 1965 on the introduction of a Bill which is the requiem mass of the mining industry. When I pulled the string which raised the national flag at my pit head on 1st January 1947, I was the proudest man alive, not only because we had achieved nationalisation, but because Socialism had achieved nationalisation. I never thought that I would find a Minister of Power on the Socialist benches introducing a Bill of this character. He has completed the work which the saboteurs opposite have been trying to carry on for 13 years.

The question I pose to him is, how does he or Lord Robens expect to maintain the confidence of the men in the industry when this kind of thing is happening? This will cause a mass exodus from the coal faces. It will cause a manpower crisis in the most productive areas in the country, which were spoken about by the hon. Member for Barkston Ash (Mr. Alison) a short time ago. I was in my miners' welfare club last Saturday night. I should not like to repeat some of the things that were said about this Bill and about the plans of the National Coal Board.

It might go down better in the Carlton Club; I do not know about the B.B.C.

I ask the Minister to read some of the speeches he made when he was shadow Minister of Power on the Opposition Front Bench. I have read those speeches this week. I shall not weary the House with quotations from them, but they are a revelation. The speech which he made today was a complete negation of what he said from the benches opposite a few years ago. I hope and trust that this House and the country will awaken to the problems in the mining industry and the problems which the men have to face in the industry.

When coal was nationalised we hoped that we would make it a viable industry. If remember rightly, the whole of the industry was nationalised from John O'Groats to Land's End and the good pits were to carry the bad pits as far as possible. Pits were to be closed only after a very careful analysis of the situation and careful inquiries into the potential reserves. A pit was closed in northeast Derbyshire recently when it had 1 million tons of coal under it. That coal will never now be touched, When the shaft and the roadways were available that coal could have been won. In the last few years output per man shift has been 34½ cwt., but the pit was closed

I have always believed that the industry needed some kind of capital reconstruction, but I dreaded the day when capital reconstruction would have the one end in view of killing the mining industry and destroying the confidence of the men in it. The only way to get the House to agree on capital reconstruction of the industry appears to be to close 150 pits, at the cost of all the unnecessary hardship attendant on closing collieries. When we speak in debates on coal we often tend only to think about the miners, but what about the butcher, the baker, the candlestick maker in every mining village? They cannot be found lucrative employment elsewhere. They cannot redeploy their energies in other parts of the country. They are often working men who have invested their savings in a small business.

In many cases they will be rendered bankrupt because of the economic determination forced on them by the Chairman of the National Coal Board, the Tory Party in the first place, and our Minister of Power in the final analysis. I weep tears of blood when I realise what will happen in the villages of Derbyshire, in Scotland, Wales, Somerset and Durham. What is to happen to these people? In 10 years' time North Derbyshire will be denuded of population, Durham in less than that time and South Wales in about the same period. There will be only two pockets of coal workings.

I pose another question to the Minister. The National Plan envisages a target of 25 per cent. increase in productivity over the next five years. To fulfil that obligation in the National Plan a 20 per cent. expansion will be demanded from energy production. Every per cent. of that 20 per cent. expansion—and it is 20 per cent. of 300 million tons of coal equivalent—has to be found from oil, plus filling the gap that will be left by the rundown of 30 million tons of coal. Will not this in itself have a detrimental effect on the balance of payments? My right hon. Friend has written a new bible. I am told that he calls it balance of payments. Let us obey that bible and look into the future to see what effects fulfilling the National Plan will have on the balance of payments.

I ask my hon. Friend the Parliamentary Secretary to look seriously at this matter and to try to give the answer when he winds up the debate tonight. I do not think he can do so. There is a terrific gap to be made up by oil in the next five years. Every drop of it has to come from countries of very low political stability. I was thinking of asking the House to vote against this Bill, I am so dejected and serious-minded about it. I hope that a few of my mining colleagues will agree with me that this is a Bill which should be torn up, wrapped up and reconsidered. Then let us have a co-ordinated fuel plan. We have not got one now. The White Paper is no nearer to making a co-ordinated fuel plan than I am near my home, and I am a long way from there.

It is a White Paper of platitudes for the miners and no understanding. I hope that the Parliamentary Secretary will be able to settle some of the problems which are in my mind. That will be a difficult task. The House will give a Second Reading to the Bill tonight. It is a Tory Bill and that makes me want to vote against it. Hon. Members opposite dare not do so as it is a Bill they believe in. The Bill may go through without a Division, but not without some expression of doubt in the coalfields of Great Britain.

7.0 p.m.

The hon. Member for Derbyshire, North-East (Mr. Swain) has spoken with great sincerity and great personal knowledge of the mining industry, particularly regarding the practical effects of redeployment. That is a subject I want to bring up in relation to Scotland. I cannot speak with the practical knowledge which the hon. Member possesses, but I think I can speak with equal sincerity about what may happen to the miners in my constituency who will probably lose their jobs.

I realise that the general policy is correct, but that does not reduce the difficulty at the local level. The Scottish Board is right in advocating a policy of "The big pit" making a substantial profit, but that does not alleviate in any way the feelings of the miners who thought, I think rightly, that their jobs had long-term security. I appreciate the details that the Chairman of the Scottish Division of the National Coal Board has given us about the future. I am sure we all have confidence in the Chairman himself, but the miners have always believed that the power future of Scotland lay with coal and that the Atomic Energy Authority and the Hyrdo Electric Board were a long way behind. Now they must be beginning to have serious doubts. The future of so many of them is full of apprehension, particularly those who wish to retain their homes where they are and live amongst friends. Many of them have seen mechanisation arrive, often bringing confidence and hopes of stability of many years' work ahead.

But it has not worked out that way. My constituency has had a series of disappointments. Now the whole of the industry in my constituency is threatened. We have lost two pits at Sanquhar, Gate-side and Tower, bringing the unemployment level in the district to over 10 per cent. In the last few years dedicated work by the burgh council, the district council and the county council, helped by the incentives of the Local Employ-men Act and the creation of a development district, have brought industry to the area. But, now that this glimmer of achievement is being translated into jobs, we have news last week of the probability of the pit closures and we are right back where we were before we started this drive to get new jobs.

I spoke of the disappointments we had before. If the major closures that are threatened take place, I can only use the word "disaster". The hon. Member for Derbyshire, North-East mentioned the repercussions on the shopkeepers, hotel keepers and everybody else, who gain their livelihood from the service industries. They are in jeopardy again. We have three pits left in the northern part of Dumfriesshire. Rig and Roger are both small pits employing 150 men. They are category C. Naturally, one cannot look forward to many more years of life ahead of them. Fauldhead, employing 850 miners, is in category B. We have no other mines nearby.

I hope and expect that the hon. Member for South Ayrshire (Mr. Emrys Hughes) will be able to catch your eye, Mr. Speaker, to speak about the pits in South Ayrshire. Killock and Barony are 20 and 25 miles away, with a very difficult road in between in the winter months, over high ground and sometimes snowed up. I mention this point because I do not think that there are any finer miners in Scotland than those in Kirkconnel and Sanquhar. Their labour record is remarkably good. There is a tremendously co-operative feeling between the miners, the union and the management in Upper Nithsdale. However, they are fighting t constant battle with geological conditions. I have had the opportunity of going underground and seeing the problems for myself. One can appreciate that they are making every possible effort to overcome them. So it is not the fault of the miners that the economy of Fauldhead is in such a serious position. If any team of miners and management could overcome those difficulties, it is there at Fauldhead now. They have recently completed a great deal of preparatory work and I hope that we shall now be able to have a few years' profitable working before the closure takes place. I ask the National Coal Board, because of the exceptional effort that management and workers are putting into keeping this pit at an economic level, to give the miners as much time as possible to overcome these difficulties, not only because I am sure that they will, but because frankly there is no alternative. They must overcome the difficulties.

To put the problem into perspective, the whole employment district has 1,729 men at work. Just over 1,000 are in these three mines; in other words, 60 per cent. of the total male working population of the area is in these three pits. There are only three alternatives if the pits are closed. First, they could emigrate to Yorkshire or to the East or West Midlands. This would leave an area void of population. Secondly, they could go to the nearest pit at Killock or Barony, with great travelling difficulties. Thirdly, we must await new industry, and this is where I think a real effort must be made.

The development districts created by the Local Employment Act have given us the tools to obtain that industry. So far we have had one advance factory—and how welcome it was. However, it employs only about 50 people. We must set out sights much higher. A second advance factory has been announced. However, we should not look at figures of the order of 50. We should be thinking of a factory which will employ 500 800 or even 1,000, to take all the men that may lose their jobs at Fauldhead.

I say that we do not want there to be emigration to England because the local authority has built hundreds of new houses since the war. It would be foolhardy to leave those houses empty and take away the employment. We must bring work to the area for the men.

I think that the Government can do two things. First, they must create the financial climate to encourage industry to expand—voluntary expansion by industry—to come from England into Scotland. Secondly, we must speed up in every possible way the building of the new advance factory. Anything smaller than a factory which will employ many hundreds simply will not do. Time is not on the side of the Board of Trade. We must get on with this job as quickly as possible.

I hope that I have indicated the enormity of this problem in Upper Nithsdale and shown how urgent it is that we get on with it. The National Coal Board has created the position. The Government have accepted it. As the hon. Member for Penistone (Mr. Mendelson) said, we simply must have the jobs before the closures. I know that it is a slightly vicious circle—industry will not come until the men are unemployed. However, we must try to remove that gap and have the jobs ready for the men to go to straight away. Redundancy payments may help to tide over short breaks, but what the men want is stable and constant work. If the mines are closed, the Board of Trade must set its sights as high as possible and as rapidly as possible.

I want to be assured tonight that all departments of both Ministries will be galvanised into action so that the morale of the district can be maintained. There is nothing worse than indecision and lack of information. It produces despondency. We should tell people where they stand. If they know where they stand they know what targets to set themselves. To go on month after month thinking that a place of employment will close next year or the year after or within two or three years is demoralising. People would prefer to know the worst than to go on hoping for the best and then finding that it does not come about.

I have been very pleased with the efforts of the Board of Trade in the past. I hope to be pleased with its efforts in the future. The Board takes an intense interest in the development districts and gets on with the job. It has the cooperation of the Scottish Council for Development and Industry and of the local authorities. The local authorities can help themselves by preparing swiftly a warm welcome for industry. Too often local authorities take months to finalise planning permission, but in my constituency the county council can virtually promise planning permission in principle for industrial development within 24 hours. Everything is dropped and the industrialist is not allowed out of the county until he has said "Yes". That is the way to attract new industry. This is a challenging situation. We should not let it get us down. We must do all we can to provide these jobs.

We must focus our attention on this aspect tonight. We must accept that industry must change, but the method and the speed with which we provide new jobs are challenges which we should accept tonight. If we get on with that now we shall have far less recrimination in future. Therefore, let us have action. Let us get on with it.

7.14 p.m.

I have provided myself with a short brief tonight because I am never more likely to speak on indefinitely than when I am speaking of the coal industry. I am restricting myself now because I am only too well aware that many of my hon. Friends wish to take part in the debate.

I do not entirely agree with the strictures which my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) passed on my right hon. Friend the Minister of Power. At least I am able to look at the problem in South Wales as having reached an insoluble position. It cannot be resolved by what is contained in this Bill. The hon. Member for Yeovil (Mr. Peyton) appealed to us to take a national rather than a local view of the contents and the possibilities, if any, of the Bill. This is utterly impossible, because conditions differ in different coalfields. Some of our coalfields, like that of South Wales, were already tremendously developed when people were only just prospecting for coal in areas where some of the most successful coalfields of the country are now situated.

There is another matter which makes it utterly impossible for me to take a national view of the Bill. Side by side with the appearance of the Bill in the Vote Office there appeared an official document which had probably come via the Ministry of Power from the National Coal Board. That document named every colliery now working in all the coalfields of England, Scotland and Wales, and the destinies of these collieries were expressed in roughly three categories. I shall deal only with the South Wales coalfield into which I was born, where I was honoured to start down the mine at the age of 12, and where I was the proud descendant of four generations of coalminers. If, therefore, the hon. Member for Merthyr Tydfil is found not to have some coal in the marrow of his bones, my hon. Friend the Member for Pontypool (Mr. Abse) will have to keep an eye on the postmortem.

We are told that altogether there are 91 collieries at work in South Wales now. Twelve of these are short-life collieries which are likely to close or to merge, though I think that we can largely omit the word "merge" in the South Wales coalfield. Side by side with these are the collieries which will be soon closed by exhaustion. These two categories mean an extremely short life for no fewer than 25 collieries, but let us go another step along this gloomy road. There is another category of collieries that have a doubtful future. In other words, as far as the miners are concerned, these are collieries with a death sentence overhanging them so that sooner rather than later they too will be out of existence. There are 19 of them. Therefore, according to that official document, 44 collieries in the South Wales coalfield are doomed.

Another column in this document contains a category of continuing collieries, though heaven knows for how long or how short a period these 47 collieries will exist. I only know that a matter of three or four weeks ago I saw another statement on the South Wales coalfield which was set out in exactly the same manner as the document to which I have already referred. Several collieries were classified in this statement as collieries with a doubtful future. Now, for some mysterious reason—and certainly not for coalmining reasons—those collieries have been put in the list of continuing collieries.

The hon. Member for Yeovil will realise at once how impossible it is for us to take a national view. The official document tells me that nearly 50 per cent., 44 out of 91, of the collieries in South Wales are to go. Any practical miner or mining engineer with a continuing interest in the industry will understand that those 44 have a comparatively short lie, and some of them will be closed within a matter of weeks.

That is the picture in the South Wales coalfield. My right hon. Friend will appreciate that we can only appraise the Bill and analyse its content and then apply it against the background of threatening ruin in the coalfield where have spent my life. I know that my right hon. Friend has spent an immense amount of time on the Bill. I know that, within the limitations of one Ministry, he has gone as far as is humanly possible. He has not gone farther as I had wished and hoped, but he has gone as far as possible within his Ministry. This is, after all, a matter of Government policy.

He spoke earlier of an inter-Ministerial committee—he will correct me if I misunderstood—which had been appointed to investigate and see what could be done for the miners thrown out of work when collieries are closed. I should like to hear more about this. What were the committee's terms of reference? What were the powers vested in the committee by the Government? How can this committee help the Minister, in anticipation of collieries being closed, to provide alternative industries on the spot before the men are out and flooding the employment exchanges?

We have hardly any collieries in South Wales that can absorb any appreciable number of displaced miners. There are two comparatively new collieries there. I am told that between £12 million and £15 million has been spent on one of them, Cynheidre. A little investigation beforehand by the so-called experts of the Coal Board would have shown that that money would be spent in one of the most difficult geological areas in the coalfield. I worked within a couple of miles of it. I knew something of those geological conditions and I saw the results. I saw a great deal of money spent in mining quite near by, but most of that money went down the drain and nothing came of it. I am a little sentimental about the other new colliery, Abernant, because the splendid woman who looks after me and keeps me, let me say, half respectable—that is her job, she does well—comes from that area. Did no one know of the tremendous geological disturbance just below this colliery and almost immediately to the North of Pontardawe? It was common knowledge to us mining students in our day. We knew the coalfield and what the conditions were.

It is a shame that people have to be displaced and advised to leave their homes in these mining communities three and four generations old, if not more; communities which have in the past revealed their passion for education and for culture. It is inhuman, and I must tell my right hon. and hon. Friends in the Government—no constituency could be more loyal to them than the one I have the honour to represent—that there is one thing which they must do. Those collieries, where the taking is not exhausted, must be kept going until alternative employment is there right in the heart of these communities. They are the most thoroughly established communities in this island of ours. What is the use of destroying all that is dear to them and, at the same time, creating a psychological reaction there if we do not do the right thing in the time now left to us, and for which we shall all be dreadfully sorry?

7.27 p.m.

It has been fascinating to listen to the hon. Member for Merthyr Tydvil (Mr. S. 0. Davies) speaking to us out of the long experience which he and generations of his family before him have had in the coal industry. I shall follow him in the point he made about the need for alternative employment, but, before coming to that, I must say just a word about the target to be set for coal.

When nearly every forecast about the demand for coal or for any other form of energy has proved to be wildly wrong, the Minister ought not to be too rigid about a target of 170 million or 180 million tons. I was glad to hear him say today that he did not intend to be rigid about it. The psychological effect of contracting output could do great harm to the manpower situation which has been stressed so often. If we could say for certain that 170 million to 180 million tons was right and that 200 million tons was wrong, it would be right to say so, but in the conditions of uncertainty which must inevitably exist, there is no need to argue overmuch about a difference of 20 million or 30 million tons. If the Coal Board can fulfil its claim to produce more coal than the suggested target from efficient mines at competitive cost, then let it have a chance to prove that it can do it.

Now I turn to the point, to which the hon. Member for Merthyr Tydvil referred, concerned with closures and alternative employment. Few hon. Members have quarrelled with the Government's policy of closing uneconomic pits and indeed of speeding up the process. I think that the Minister was absolutely right when he said that it is the uneconomic pits which are the greatest threat to the future of a modern, prosperous coal industry.

We all know—and hon. Members with experience of the mines know it better than I do—that this process is very disturbing to the men concerned. I hope that the Minister will be able to give us a little more information about those collieries in category A, described as "continuing collieries". He told us that the collieries in categories B and C will probably be closed within the next five years. What the men in the industry want to know above all is what the future prospects are for the pits in category A.

Can the men be reasonably sure that, if they transfer from one pit to another during the next five years, they will have real security for the future? If they remain in the industry and move from a closed pit to another in category A, can they be sure that they are not really only moving from one sinking ship to another? I do not believe that they are. I believe, that there is a great future for a smaller coal industry in this country.

The balance of payments and our oil reserves are probably two of the main reasons. But there is a third and equally important one. This is the tremendous tradition of mining skill which we have and which is probably unrivalled anywhere in the world. But we must convince the men, and any more information which can be provided about the future of pits in category A would be of great assistance to those who may have to move to them.

I illustrate the point by referring to the Somerset coalfield, the bulk of which is in my constituency. Many hon. Members may be surprised to hear that coal is mined in Somerset. It is a difficult business, as I know, having been down a pit and having seen a little of the conditions in which the men work. We are faced with a difficult position, just like every other coalfield. We have five pits and under the plan no less than three are in category C and scheduled for closure within perhaps the next five years.

This is a very big contraction for a small coalfield. Over half the pits are to go. It means a very big upheaval for the men concerned. It could threaten the whole future of the Somerset coalfield unless the men can have reassurance about the future of the two remaining pits, those which are in category A.

There are many miners in Somerset whose families have served in the pits for generations and they want to stay there. But I fear that many of them will not do so—that when their own pits close they will decide to go elsewhere to other work unless they have an assurance that, if they accept the upheaval involved in moving, their employment will be secure in the two remaining Somerset pits. I fear that otherwise many of them will leave and the whole future of the coalfield, which provides a substantial part of the fuel requirements of a nearby power station, will be in jeopardy.

This is the sort of question that all hon. Members are faced with. We want more information about the future so that we can try to restore confidence in the minds of the men concerned and get rid of the natural fears and anxieties which exist. It may be said—and it is true—that the problem of the Somerset coalfield is comparatively small in relation to the problems of other coalfields.

Nevertheless, the men have the same fears and anxieties as elsewhere and, of course, the possibilities of getting other employment in the pits in this coalfield are obviously less because it is so much smaller and only two pits are in category A.

Then there is the question of alternative employment and retraining for it. Here again, the National Coal Board says that there will be work for practically every man who wants to remain in coal mining in Somerset. But some men will find it very difficult indeed to get alternative employment even in the present fairly good conditions which exist in North Somerset. I think particularly of the partially disabled and the older ones, those who are too young to retire, many of whom are surface workers. I was glad to hear the right hon. Gentleman refer to the industrial rehabilitation units for the retraining of people of this kind. It is an immensely important aspect of the plan that the people who will find it most difficult to get alternative employment should be provided for in this way.

I echo the point made by hon. Members opposite—that, where mines are closing in areas which are not at present listed as development districts and are not getting the benefits of the Local Employment Acts, such areas will be kept under close watch by the right hon. Gentleman and the regional planning boards and councils, so that if the position warrants it they will be able to get the benefits of the Acts speedily should they be required. Here again, Somerset is in a similar position to that of other coalfields. We are not a development district.

I agree that this process announced by the Government is necessary. The taxpayer is asked to take on increasing burdens. The miners are being asked to meet more change and more disturbance. These burdens are heavy but I believe that there is evidence that if we re-establish confidence in the mining industry there is a great future for coal in Britain because of the balance of payments position, because of the position of oil and oil reserves and because of the long tradition of mining skill that we possess.

7.39 p.m.

I agree with much of what the hon. Member for Somerset, North (Mr. Dean) has said, particularly in relation to the difficulties that the middle-aged men and the partially disabled will be facing. I hope that we shall bend over backwards to help these men and alleviate some of the other problems arising from premature redundancy.

One must comment on the timbre of the debate. I think that there is an underlying sympathy and understanding of the problems of the industry on the other side of the House. It is a very great pity that the Conservative Party did not show this sympathy 10 or 20 years ago, because I am quite certain that their nagging and niggling at this industry contributed, in large measure, to the lack of confidence which is now being exhibited by the men in it. We are paying today the price of consistently wrong forecasting since the war and for consistently selling coal below cost of production.

If one looks at the Report produced in 1958 by the Select Committee on Nationalised Industries one sees evidence of no fewer than 10 occasions between 1947 and 1957 when predominantly Conservative Ministers of Fuel and Power directly exerted pressure on the Coal Board when it sought to raise prices for very good reasons. They either refused outright, or delayed the price increase, or reduced it. All of this contributed to the difficulties.

I am looking at a document given to me in 1954 concerning the Fife coalfield. It makes interesting reading. There is a pit here named Bowhill No. 3 pit in the Bowhill Cowdenbeath group. This document says that there would be 2,400 employees in one pit in the group in the year 2000. It closed early this year. The same applies to Lumphinnans XI pit. The forecast in 1954 was that in 1971 to 1975 there would be 630 men employed. It is now a C category pit, and likely to close within a very short time. Almost every pit on the list is either closed or about to close.

The wrong forecasting over the years does not make it any easier for us to be convinced of the accuracy of the figures of 170 million tons or 180 million tons which my right hon. Friend has suggested. Inaccuracy is more likely now than it was 10 or 20 years ago, because the scientific and technological developments are now occurring at a much faster rate than they were at that time. My right hon. Friend made a profound mistake when he announced any target figure whatever, however hedged around with all kinds of qualifications. It ought not to have been done. I certainly think that it was a mistake, if he had a specified figure, to specify one below that which the mining community had reason to expect from a Labour Government. Whatever the end result may be, whether we get 200 million tons or 170 million tons, or somewhere in between, it is certain that that total will be produced with fewer men. So it does not matter what the target figure or annual production is.

This is a labour-intensive industry. Such an industry is likely to suffer more than others from increased mechanisation and automation. This is a fact of life which one cannot ignore. It is because of that that human problems are particularly acute and challenging, the more so because not only is the industry labour-intensive, but because mining communities are extremely closely-knit industries. They are extremely proud and fiercely independent. I listened with interest to a speech made by an hon. Gentleman who produced a lot of facts and figures which, no doubt, were very accurate and in which he felt some kind of confidence, in seeking to produce contradictions, major or minor, in the National Plan. But it seemed a very cold and unemotional approach to a problem which cannot be and must not be measured in statistics.

One of the arguments in favour of public ownership of an industry was that the economic considerations—£ s. d. considerations—were not the be-all and end-all, were not the yardstick by which the industry was to be measured. We have to measure the problem in terms of human anxiety arising from economic insecurity. No human problem is more difficult to deal with than the psychology of a contracting industry. In Scotland 100 men leave the pits every week. In the whole of the industry 1,000 men leave every week. From March to October of this year 5,000 men left and only 2,000 came into it. This is the measure of the drain of confidence from it.

The problem is to gain and retain the confidence of the men in those pits, the closure of which is likely in the next few years, and to phase the closures with the provision of alternative employment, first in the developing pits, the A category pits, and secondly in other industries. For far too long the mining communities have been too greatly dependent on this one industry, the future of which was always "dicey". One does not know how nature will conspire against the industry. We had a good example of that in Fife just a year or two ago. A wonderful, super-modern pit was sunk; about £10 million was spent on it; and when the coal was reached, it dropped and disappeared through faults occurring which could not have been discovered beforehand. Money had been expended and hopes built up in the new town. Suddenly, everything was taken away and the psychological effects of that are devastating. We have not yet recovered from it.

In Fife, the facts of the closures are that there are six mines involving more than 2,050 men which are certain to go because of exhaustion. Of those which may go for economic reasons there are another three, employing 2,430 men. There is, therefore, an almost certain loss of 4,480 jobs within my constituency in West Fife. Almost every pit in West Fife will disappear. The future of the B pits is uncertain. There are three of them employing 2,599 men, so the total of jobs at risk is 7,079. The class A pits in Fife, will absorb about 3,300, so there will be a net loss of job-opportunities of about 3,700, even taking account of normal wastage running at something like 15 per cent. in Scotland. This is a monumental problem and, despite what my right hon. Friend has said, the promises that have been given, and despite all the measures which the Government have taken, will take or are taking, I find it difficult to believe that there will not be considerable hardship, especially for the middle-aged and the older man.

I have listened to most of the debate, and there are two matters which, as far as I know, have not yet been mentioned and on which I must spend a few minutes.

With the best will in the world, one cannot phase closures of pits and the bringing in of new industry if one is dependent purely on private enterprise. One simply cannot do it short of directing it, and this party is on record as being against the direction of private industry. It is not a practical proposition. If one accepts, as I think one has to, that one cannot have private industry on tap when a pit closes so that private industry can be moved in, one has to look at other measures. The measure to which this party committed itself at the General Election was new publicly-owned industry.

I remember the Prime Minister coming upstairs to a Scottish Parliamentary Party group and talking in those terms and, by heaven, he has got to fulfil that promise. If he does not and the Government do not, then they can say goodbye to a lot of the loyalties that they have had from the mining communities for generations.

The second point is that in our mining areas we have acres of derelict sites. My area is a disgrace to modern civilisation, with pit heaps, pit ponds and all the horrible scars of 19th century capitalism and private enterprise. They are still there. They took out the money and left us with the sores, and, unless and until we get rid of them, very little private industry will come in—or not enough, anyhow.

The Government and the nation have to accept responsibility for clearing up the filth that has been left by the private coal owners. It is a national social responsibility as well as a sound economic investment to embark upon a massive onslaught on the scourge that spreads across all the mining communities in Great Britain.

We who represent mining areas—and I think all hon. Members on this side of the House who do not—know the intense and unwavering loyalty of the mining community to our great Labour movement. Coal has been the foundation of the growth of our country for 100 Years and more, and in the transitional period of that great industry and the people who serve it, the whole nation and the Government in particular are on trial.

It will be a tremendous exercise in public relations. It will have to be undertaken if the sense of cynicism and the feeling of betrayal are to be eliminated. But public relations itself is not enough, however skilfully it is managed by the Prime Minister and others. There must be generosity to the point of extravagance in this field. There must be vigorous and, if need be, unorthodox action by the Government, by the National Coal Board and by the local authorities. It must be treated as a warlike operation. The miners deserve no less, and their wives and children deserve no less. They richly deserve all that we can possibly give them, and I hope that the Government will not fail them.

7.55 p.m.

I have listened to the debate so far with interest. It has had an intensity and a sensitivity unparallelled in any debate that I have attended in the House. Hon. Members opposite know full well that I cannot claim personal connections with the coal industry. But I have lived alongside the coal industry because, after all, it was coal that brought the steel industry to Sheffield. It so happens that the companies with which I have been associated have supplied the coal industry for decades, and I know from personal experience that the type of equipment that has been supplied to the industry has changed entirely in the last 20 years, let alone the years before.

It so happens that I have had experience of factory development in areas which were at one time mined. One of the difficulties is that some modern factories require firm foundations, and the old seams present many engineering problems before new factories can be set up.

Thirdly, I have had experience of setting up factories in areas alongside the coalfields, where the wives and families of those in the coalfields have found that other industries were suitable to their skills, and they have settled down in them. The hon. Member for Derbyshire, North-East (Mr. Swain) knows the type of factory that I am talking about.

I begin, therefore, by asking hon. Members to realise that because of my background I understand the personal frustrations and the tragedies that accompany pit closures. I hope also that they will understand that because of my background I am well aware that workers in ancillary industries want to ensure that the power at their elbows is the cheapest power available and that the right decisions are taken by the Government to that effect.

The hon. Member for Derbyshire, North-East attacked the Minister's speech as being dull, and he discounted some of the White Papers as containing many platitudes. But we have to realise that modern management——

Perhaps the hon. Gentleman will permit me to finish my point, and then I will give way. Modern management in our coalfields must be equipped with the "know-how" that is required by modern management elsewhere. This includes financial control and mathematics, and is inevitably dull.

The hon. Gentleman has referred to my hon. Friend for criticising the Minister while he was speaking. In fact he was criticising the speech of the hon. Member for Yeovil (Mr. Peyton), who led for the Opposition.

The OFFICIAL REPORT will prove the point. I thought that the hon. Member was referring to the Minister.

However, if I may continue, I wish to make three preliminary observations. The first is that the more one believes in competition and the opportunities for technological change, the more one questions whether a national fuel policy is a reality or the rigid implementation by politicians, by civil servants or by economists of a policy which will stifle progress and frustrate modernisation. I think that the hon. Member for Fife, West (Mr. William Hamilton) would have something in common with me. Then we must also realise that it could be that competition in a rapidly changing technological field will mean that any national fuel policy—and each successive one—may well look ridiculous five years hence. I think that that coincides with the views of the hon. Member for Fife, West. But in the White Paper I note that paragraph 102 reasserts that

"For all these reasons the framework of Government policy established by this White Paper is not intended to be rigid."
It goes on to say:
"These changes will be made at the appropriate time."
With that reservation and the assurance that rigidity in a fuel policy will not impede technical progress and modernisation, I should like to congratulate the authors on endeavouring to crystallise the situation in the field of power and energy in what is an extremely fluid position.

My second observation deals with nationalisation, which various hon. Members have discussed during the debate. It is not possible to give the slick answer for which we are asked at the hustings, do we or do we not believe in nationalisation? The answer to nationalisation cannot easily be given by a "Yes" or "No". It is a matter of pale grey or dark grey, and not black or white.

In debates on the nationalised industries, I have explained to the House that, particularly in the United States of America, I have supported some of the advantages of nationalisation, particularly so far as it concerns the coal industry. Some of those advantages have been enumerated already, and they include rationalisation, and greater coordination and co-operation between pits. These are some of the virtues of nationalisation which provide a standardisation of the procedures that go alongside modernisation.

Some of the disadvantages of nationalisation have been the very subjects which hon. Gentlemen opposite have raised, and one reason for attacking the Chairman of the National Coal Board is that over-centralisation broadens the gap between the coal face and those running the industry at the centre. This is inevitable, but I would congratulate the present Chairman, Lord Robens, on his drive to break this gap between the centre and the coal face.

In my view a condition for good management in any industry, including the coal industry, is that policy should be directed from the centre by all means, but once the policy has been laid down there should be the minimum of interference with it. From experience with private industry overseas it is my personal view that there is a great tendency for the parent company at the centre to interfere far too much with detailed activities overseas. This is a challenge which faces industry when it has a subsidiary overseas, and even when it has subsidiaries near al hand—and this applies to the coal industry as well. I suggest that in the conduct of the electricity, gas and other industries the Minister has been in danger of dealing in far too much detail.

My third preliminary observation is connected with Parliamentary control as such. I will be brief, but I had hoped that before this debate took place we would have had an up-to-date report on the coal industry from the Select Committee on the Nationalised Industries. The last report was produced on 29th April, 1958, and I wonder whether, in the case of the coal industry, the Parliamentary control, about which the reformers in Parliament talk, really applies. Does it apply to the State industries which employ 1 million men, or about 4 per cent. of the working population, with a capital investment of about £1,000 million a year, or one-sixth of the country's total investment, with an annual turnover of £3,000 million a year or 5 per cent. of the national product? Have we, in the case of the coal industry, the Parliamentary control which this industry demands?

I should like to raise three main issues. The first is that of a cheap fuel policy which seems to be the background to the White Paper which we are discussing. Looking at the Coal Board's Report for this year, I see that the price of coal is 88s. 5d. per ton, which is an increase of 1s. per ton on the previous year. I have been making some inquiries—without really revealing my identity—as a normal consumer of prices likely to be charged for coal for domestic and industrial use in London. Prices range from £11 10s. per ton to about £13 5s. per ton. It means that coal, let alone smokeless fuel, is an expensive item.

I have also read in the Report—no doubt hon. Members have read it, too—that productivity and output per man shift has been rising steadily. We have a national figure of nearly 35 cwts. per man shift, an increase of 4·2 per cent., and in Yorkshire and East Midland areas these figures are even greater. It is more than 38 cwts. per man shift in the Yorkshire area, and a little less than 50 cwts. per man shift in the Midlands. These are great improvements on past performances, but in spite of these increases in productivity I think that it is vital that we should still think in terms of cheap energy.

Over the years I have had complaints from the steel, refractory material, engineering, and pottery industries that the cost of fuel is much higher here than in other countries, and in the context of this debate I think we should turn our minds to electricity and to the debate we had last July. In this White Paper we are reminded that at Dungeness B generating costs will be 0·46d. per kW. hour, on a less optimistic assumption, and on an optimistic assumption it comes down to 0·38d. per kW hour. Last July we agreed that this amounted to a break-through for atomic energy as a source of generation of electric power.

A little earlier the hon. Gentleman talked about the price of coal in London. Does he realise that the one thing which men in the industry consider requires investigation is the price at which coal is sold in many big cities? They believe that people in the big cities put nothing into the industry, but yet make big profits out of the sale of coal.

This is a matter of distribution. It involves stocking, and, as with any commodity, it is a costly business, but as a manufacturer I heartily sympathise with the hon. Gentleman's comment. Any measure to bring down distribution costs is to be welcomed. The sale price has to include transport costs, including transport by lorry, but, in all probability, to an increasing extent by British Railways.

If I might go back to the point that I was making in regard to the generation of electricity, it is interesting to learn that the 4,000 mW station at Drax, and the 2,000 mW station at Cottam, the most modern coal-fired stations, are expected to generate electricity at 0·52d. per kW per hour, and 0·54d. per kW per hour respectively. This means that the modern form of generating electricity by atomic energy will give cheaper electricity than can be provided by using coal. This is the hard fact which people must face if we are looking for cheap energy. It is interesting to note that the figure for oilfired stations show a considerable variation, and the words "without tax" in the White Paper bring the figure to 0·41d. per kW hour. What is meant by "without tax"?

Industry wants to know how our energy costs compare with those of other countries. This is dealt with in the White Paper, and perhaps I might read it.

Hon. Members who represent mining constituencies are waiting to take part in the debate.

If I am allowed to continue my speech, I think hon. Members will agree that prepared notes give one a chance of going ahead quickly. I shall complete my speech as quickly as I can to allow other hon. Members to take part in the debate. [Interruption.]

Order. I hope that hon. Members will allow the hon. Member to continue his speech.

The hon. Member for Merthyr Tydvil (Mr. S. O. Davies) is suggesting that I am wasting time.

I assure the hon. Gentleman that I was not referring to him. Those who were making unnecessary objections might be regarded as wasting time. That was the only comment that I made, and I hope that my hon. Friends will forgive me for my implied advice.

Order. There are a number of hon. Members who wish to speak. Let us get on with the debate.

I was talking about cheap energy. When I was in South Africa recently, I learned that the pithead cost of coal varied between 10s. and 12s. per ton in certain pits.

There may be very satisfactory or unsatisfactory reasons for that, but those engaged in manufacturing industry are competing with industries in other countries which have cheap sources of energy. The cost of generating elec- tricity in South Africa is less than 0·3d. per unit. British industry in this country has to compete with countries where the cost of energy is much less than it is here.

Surely the hon. Gentleman will agree that conditions in South Africa are entirely different from what they are here?

Yes, but I am talking about cheap energy.

Hon. Members have been talking about a fuel policy, and they should allow me to make my comments on it. In the United States of America output per man shift is about 275 cwt. I have various sources of information, one of which is Barclay's Review. I have been talking to economists and experts on the Continent about the E.C.S.C. fuel policy, and I understand from them that American coal can be shipped into Europe at about 12 dollars per ton, and that with modern tanker design and port handling feasibility studies which are now being undertaken, this may well be reduced to 8 dollars per ton. The information about coal coming into Europe is somewhat haphazard, but it may be between 30 million and 40 million tons a year, according to an article in The Times last July.

Admittedly the majority of pits in Europe are a good deal more difficult to operate, and their costs are higher than ours, but the argument for justifying the continuation of the importation of American coal is that it provides the consumer with the cheapest energy. It is argued that it is better for industries in Europe to have the advantage of cheap fuel, so that their products can be made competitive and thereby, if necessary, exported to America, than to take power generated from indigenous sources, which would make their products uncompetitive in markets overseas.

The Minister fully realises that sociological and humanitarian considerations may have led to his being accused of adopting too drastic measures, but it is fair to say that workers in other industries wish to be assured that their power and energy is competitive with that available to similar industries in other countries. I ask whether, in the interests of modernisation and cost reduction in British industry, it is wise, indefinitely, virtually to ban imported coal. I raise this point now because it brings in another side of the picture which people who are considering a fuel policy must bear in mind. I am certain that, the Minister having set the target, the information provided by his economists has taken this sort of factor into consideration.

My second point concerns the closures in the South Yorkshire and East Midlands areas. Other hon. Members representing Sheffield constituencies are not here at present, but in my city there is only one class C pit facing closure, the Hansworth pit. This will be of certain concern to people there. It is one of fie problems in Yorkshire. It is not so much the question of a redeployment of the labour force, as many people seem to think; in Hansworth and Dinnington, which is a B category pit, it is fair to say that alternative employment could well be provided, either in road construction to meet the recently announced motorway programme immediately, or, more likely, in a form which I think is much more relevant, namely, airport construction. Many of us hope that this will be the case.

These are the sort of activities which provide an alternative, and I am certain that the Yorkshire and Humberside Regional Board has this matter well in mind. In Yorkshire we are fortunate, as has been pointed out by my hon. Friend the Member for Barkston Ash (Mr. Alison), in that there are many profitable A category pits which are undermanned. Redundant workers would have a welcome which would not exist in other parts of the country.

My next and third point concerns the extension of nationalisation through the back door. One of the problems of modern management is to discover to what extent modern industry should rationalise and concentrate. British industry has gone a long way, on the managerial level, in studying these aspects. But rationalisation takes various forms. In one factory that I know of, which makes small tools, the management has come more and more to the view that its job should be to make the primary product—small tools—and to let the manufacture of machine tools for producing this primary product be the task of someone else.

I suspect that political pressures are being imposed on the nationalised industries to cause them to carry on activities for which they are not equipped. Is not this diversification in the interests of political dogma gone mad? The Minister announced yesterday that the Coal Board could go in for the manufacture of gas. Clause 1(1,c) provides that the Board may borrow from the Minister sums required
"for the purpose of acquiring an undertaking or part of an undertaking."
There is a reference to £75 million, in the White Paper, which will be invested outside coal mining. Will the Minister answer the question—are we giving the Coal Board more powers to manufacture its own machinery?

Is this Clause any more extensive than is the case in existing legislation? I hope that the Minister will deal with that question tonight. Can it be that the present Government are giving the Coal Board powers to set up their own steel works, forges, and iron and steel foundries, which it has done before, and furthermore to carry on activities with which it is not familiar and for which it has neither the technological nor managerial "know-how"? This is a question on which I should like an answer from the Minister.

My last point concerns the activities of the Minister within the nationalised industries. In a truly competitive society the promotion of sales from order books which are full is a waste of resources. This applies to most industries, and it must apply to the electricity and gas industries. I concede that in an expanding economy prestige advertising is justified, certainly in the gas industry, but I cannot understand why the Minister should restrain the oil industry and, more particularly, the coal industry.

The coal industry can supply the required amount of fuel—perhaps at a higher price—whereas the gas and electricity industries have proved that they cannot deliver the goods at the moment. I suggest that this type of interference is not wise, because it means that the Minister becomes involved in the detailed running of the nationalised industries. Surely detailed management by a Minister must be avoided.

Reference has been made to the balance of payments, and the extent to which the Minister has chosen to exert pressure on the oil industry. The White Paper contains certain comments, and last July the Shell Company's comments were made available and have been referred to in the debate. On Corporation Tax it stated:
"In fact apart from the Netherlands, Britain is the only country lacking large oil reserves of its own that is relieved of the greater part of the net foreign exchange cost of its oil requirements."
This point has been raised in previous debates. The expansion of the oil industry in this country is not the drain on our balance of payments that many hon. Members imagine.

To summarise, I have firstly stressed the need for a cheap energy policy, for which oil will make a contribution in the short and middle term, and atomic energy a contribution in the middle and long term. Secondly, I have not tried to minimise that changes resulting from pit closures will produce hardship and social difficulties. I welcome many of the Bill's provisions to overcome this. They have been outlined by the Minister, but have been ignored by some hon. Members opposite. Finally, I have pointed out that close Ministerial control, and extensive diversification are completely contrary to the principles of modern management.

8.20 p.m.

Knowing that so many of my hon. Friends want to take part in this important debate, I will limit my remarks to features which are relevant to the effects of these proposals upon my own mining area and to assessing the Bill in terms of the viability of the mining industry.

There has been universal sympathy in the debate for the tragedy of the mining industry. As I see it, the Bill is an attempt to rehabilitate the industry, confronted as it is with the challenge of a technological age. My right hon. Friend need have no doubt about our acceptance of the sincerity of his interest in the well-being of the mining community. That is not the question. What is really involved is whether this Measure will make an effective contribution to a solution of the problem which has faced the mining community for the past 20 years. This is not something new which has arisen during the lifetime of the present Government. It is a product of the erosion which has been going on ever since the industry came under public ownership.

The industry accepted an immeasurable liability in 1947 and has been seeking ever since to rid itself of those inhibitions which have frustrated its endeavours to produce a cost-effective unit for productivity. My right hon. Friend is asking members of the mining community to accept the pattern of change of the 20th century. There is no doubt about their willingness, nor about the evidence of their resolve to try to meet the challenge of our age by adjustment in the industry.

My right hon. Friend and others have paid tribute to the industry's productive achievements, but I wish him to recognise that there is grave concern throughout the industry about its ultimate future. Speaking particularly for the Northumberland coalfield, I should like my right hon. Friend to hear the views of the Northumberland mineworkers. A resolution passed at a meeting of the executive council of the Northumberland area branch of the National Union of Mineworkers focuses attention upon the serious concern of the mining community about whether this Labour Government are effectively fulfilling the promises and pledges made at the General Election.

They resolved:
"… the Executive Committee of the Northumberland Ministers urgently convey to the … Government … the bitter and deep anxiety that the Government's so-called Fuel Policy should so savagely attack and undermine the security of all our members and their families. Once again the … policies of the 1920's and 30's. The drift south of our young members, the scrap heap for our older and disabled members and all the time the gnawing fear of insecurity."
They plead that the Government should implement a policy of co-ordination of all the fuel industries without further delay, in order that coal may be assured of its rightful place in the economy. That is the voice of the Northumberland mineworkers, whose loyalty my right hon. Friend would not question and whose loyalty to the greater Labour movement has been shown over generations but who are bitter today because they see their whole concept of purpose and achievement undermined and destroyed.

There are 32 collieries in the Northumberland coalfield, of which 20 are under the shadow of the five-year programme of elimination. My right hon. Friend knows, from his long experience of and association with the mining community, that no hon. Member can give an assurance that a colliery listed in the A group will remain so for any length of time. No one can give an assurance that the global figure of 170 million tons is anything like a real statistical assessment of the industry's prospects for today or tomorrow.

Under those circumstances, therefore, is this not a Measure to buy time, which does nothing more than create a temporary hiatus between the present difficulties and perhaps greater difficulties around the corner?

In the county of Northumberland we have generally come under the umbrella of the development plan. Something must be done to give them a reasonable assurance that for their acceptance of mobility from pit to pit—they have been willing to do that—they will be reasonably treated. When Broom-hill closed they went to Stobswood. When Stobswood closed they went to Hauxley. Now that Hauxley is to close, where are they to go? Are they to go into the narrowing base of the Northumberland coalfield? We have heard it said today that they will pour into the East Midlands and the Yorkshire coalfields. How long can those coalfields absorb these men displaced from pits elsewhere?

We must recognise that this great basic industry is in a period of contraction the ultimate result of which no one here tonight is willing to predict. But in the process of change the mine-worker and the mine-worker's family have a right, especially from this Government, to be assured of security and sustenance. Boys emerging from secondary modern schools are encouraged to take up training in the mining community. Parents come to inquire from Members of Parliament, "What is the future for my boy?" Closures of pits throw on to the employment exchange men of 60 years of age. What hopes have they of being retrained for any further employment?

My right hon. Friend replies that a new training centre is to be built in Northumberland. Our collieries are destined to be closed now and the training centre has not yet been built. There must be some undertaking on this point. I ask the Minister for an assurance that the closures will be phased out so that those who are displaced will at least be sure of an opportunity of retraining and, when retraining is not possible, that measures will be introduced into the area to make employment available to them.

We are promised one advance factory. On the basis of the experience related today, that means employment for 50 people. It is only a drop in the ocean. We want factories and industries which will employ not women but men. We want industries set up on the basis of the local economy.

I make this final plea to my right hon. Friend or to the Parliamentary Secretary when he replies: can he give an assurance that these closures will be phased out, that there will be a crash programme for the introduction of new industries and a crash programme for industrial retraining? Why wait for Killingworth? We have the Ashington Technical College on the doorstep. Let us improvise, and let us demonstrate that we mean business in the implementation of a Labour Government policy to these loyal and willing workers of this area.

8.32 p.m.

I hope that the hon. Member for Morpeth (Mr. Owen) will forgive me if I do not follow the argument of his speech in view of the time factor. He will understand that if I am brief one or two hon. Members opposite may have an opportunity to speak.

The Bill which we are considering in conjunction with the White Paper is just about the frankest admission we have ever had in the House of the utter failure of nationalisation as a policy and of coal nationalisation in particular. No one can say that the coal industry has not had a fair chance in the past 20 years. Hundreds of millions of £s have been sunk in the industry in investment. The terms and conditions of work in the mines have improved out of all knowledge. The industry has had the somewhat inspired leadership of Lord Robens for many years. The electricity industry has been asked at various stages to use coal rather than oil. There has been a special tax on oil in order that the coal industry should be helped on to its feet. Licences have been consistently refused for the import of cheaper American coal.

The hon. Member for Derbyshire, North-East (Mr. Swain) said that this debate is a requiem mass for the coal industry. I do not think it is quite that, but it is certainly an inquiry into the coal industry and it could possibly be referred to as an interim inquest. We are entitled to ask at this stage who is to blame and who is responsible for our finding the industry in its present condition. I think the blame lies fairly and squarely on three sets of shoulders. It lies fairly and squarely on hon. Members and right hon. Members opposite, on the shoulders of the mine-workers' union and on the shoulders of some—I emphasise "some"—men working in industry. To some extent it has been a conspiracy between those three sections, although I am certain that it has been quite unintentional.

First, the Government and the supporters of the Labour Party generally have known for a very long time that the industry was carrying too much weight—that a slimming diet was absolutely necessary sooner or later—but they have successively refused to face the facts. I wonder what this debate would have been like had a Conservative Government introduced the closures outlined in the document presented to us. There would have been such an outcry, demonstrations throughout the country, simply because hon. Gentlemen opposite refuse to face the facts.

The Labour Party is also to blame for buoying up the hopes of the industry as recently as 12 months ago, prior to the election, to the effect that it could be sustained on an output of 200 million tons a year. There were stories that certain hon. and right hon. Gentlemen, now Ministers, were giving undertakings that that would be so. Equally, hon. Gentlemen opposite have been constantly fostering the impression over the years that coal has been a sort of protected industry—protected in some mysterious way—and that therefore it could be expected to escape the consequences of economic change in the country.

Next, I blame the unions, and I think that I blame them most of all, because they have known the conditions on both sides of the industry yet have failed to convey to the men under their jurisdiction how serious the condition of the industry has got in recent years. Despite the fact that they have seen economic disaster approaching, they have been either powerless or unwilling, or both, to tackle the many abuses that we all know have gone on in the industry for many years.

Who has ever heard of a mineworkers' union taking disciplinary action against one of its members? If they have, they have kept very quiet about it indeed. How often have they been obstructive to the introduction of new methods of production which would help the economic condition of the pits? How many inter-union disagreements have been camouflaged by some other description?

I shall never forget the sanctimonious expression on the face of the leader of the South Wales Union of Mineworkers, Will Whitehead, when he discussed with the miners' leaders of the Shot Firers Union on television the effects of the £5 million loss following the Deep Duffryn swear word strike. He merely smirked and shrugged his shoulders—though ironically he was marching through the streets of Cardiff last Saturday in company with the hon. Member for Pontypool (Mr. Abse).

The hon. Gentleman is making a terrible attack. Will he remember that even during the 18 years after nationalisation the miners' union—and I am proud to be a fully paid-up member still—has not yet achieved its miners' charter because all along its efforts have been directed at the national interest? Will he also remember that we are still the only union which does not have payments for back-shift working? How does he contrast that with the quite unwarranted vicious attack which he is now making?

I assure the hon. Gentleman that what I am saying is perfectly true. I explained at the beginning of my remarks that I wished to be brief because hon. Gentlemen opposite hoped to speak in the debate.

Next, I lay the blame on the shoulders of what I repeat and emphasise are some members of the mining industry—some who have been utterly irresponsible and have subscribed to the average 20 per cent. absenteeism which we have had in the mining industry, regardless of the damage it was doing to both the industry and their future employment. We can think of the false claims for sickness and injury which are so well known—[Interruption.]—and which goes to prove that Lord Robens was quite categorical——

Does the hon. Gentleman not recall that the last occasion on which he made a vicious attack on miners coincided with a pit tragedy in Wales? May I ask him now, at a time when there is such agony in the minds of the Welsh miners because of pit closures, if he is aware of what his contribution will mean to industrial relations and peace in Wales? He is making an appalling and vicious attack, a muck-raking attack, in a characteristic manner which has stigmatised him throughout Wales.

The hon. Member for Pontypool (Mr. Abse) is using his usual vocabulary on such occasions. I am quite used to it, and to me it is like water off a duck's back. Like some hon. Members opposite representing mining constituencies, the hon. Member is sitting on a very big majority. I wonder how big his majority would have been had this list of closures been published in his election address last October. He and other hon. Members with big majorities in mining constituencies should remember that the day of retribution may not be very far away. Before many months have passed, they may have to fight the next General Election on these lists of closures.

Many miners regard Labour's policy on mine closures as the biggest betrayal in the history of the Labour movement. Some of the displaced men will get jobs in the industry. Some, we hope, will get jobs in new industries coming to the areas. But when the National Coal Board is transferring miners from a mine that is being closed to another that is working, I hope that it will take care to weed out those members of the mining community who have been irresponsible, who have not been pulling their weight, who have had a bad sickness or injury record, or a bad absentee record as well.

My sympathy goes out, not only to the administrative ranks of the Board who have tried so hard to make a success of the nationalisation policy, but to the older members of the industry who will have great difficulty in finding new jobs; also to the majority of the miners themselves who have played the game by the industry and by their colleagues. These are the people who should have the lion's share of any compensation that may be handed out in the future. It would be absolutely disastrous if some mine worker with an appalling record were to receive help from such a fund.

As Wales is one of the areas most affected by the closures, we are entitled to ask what rôle the Secretary of State for Wales has played in this matter. We were promised, prior to the election—and have been since—that we would have a voice in the Cabinet that would speak loud and clear for Wales. Does the right hon. Gentleman's silence mean that he approves of these pit closures? This must be so; otherwise I think he would have resigned. Many people in Wales believe that he should have resigned rather than give his approval to this list of closures. Or is he better described as the mouse that roared—roared with such a little voice within the Cabinet in opposition to the closures in contrast to the robust tones we were used to hearing when he sat on these benches?

I do not propose to reply to the hon. Member's personal references. I have been long enough in South Wales to let South Wales judge. I was working in the coal mines before the hon. Member was born, and I leave my record of work for the industry to speak for itself. I am a member of a Government, and I accept my full share of collective responsibility. I always have done, and I do so now.

I appreciate the right hon. Gentleman's intervention. As he knows, I wrote telling him that I intended to raise certain matters in this debate. Of course, his reputation is above reproach, but I feel that on this occasion he should have registered some strong objection, as that would have coincided and fitted in with the robust speeches we used to hear from him from this side of the Chamber.

I think it typical hypocrisy for the Government to ask private enterprise oil to forgo some of its advertising just because the electricity and gas industries have let the country down in recent weeks. Gas and electricity are two of the most protected industries in the country today. They have had successive price increases. They have been cosseted by successive Governments. Yet immediately they let the Government down they expect private enterprise oil to stop advertising because it might get an unfair advantage over its competitors.

For coal a price increase was applied for in July and was expected to come into effect on 1st September, but it has now been referred to the Prices and Incomes Board. As this means no price increase for coal at least until 1st April, 1966, a further £15 million is provided for in the White Paper as relief towards its debt and another sum of £25 million is to cover a further deficit in 1965–6. This requires some clarification. We are asked to write off the colossal sum of £400 million debt and to give a bit more to cover up what should be, in effect, a rise in the price of coal.

This is unashamedly a subsidy for coal. It makes a nonsense of the Government's prices and incomes policy. We have had recent examples of commuter fares receiving £5 million in the current year in respect of subsidies. That is to come up for review at the end of the year. As a result of Ministerial gerrymandering, an application for an increase by the Welsh Gas Board has been referred to the Prices and Incomes Board. This has already cost the Welsh Gas Board a quarter of a million pounds. Now there is coal. How many other subsidies are piling up in this way against the dam? What is to happen if the dam bursts?

How many Government supporters can look at the coal industry and the railways and contemplate the performance of the gas and electricity industries during the past week and then propose further nationalisation is utterly beyond my comprehension. There is hardly any wonder that the Government have dropped steel nationalisation like a hot potato. It is a great pity that, as a result of the huge losses made by the coal industry, it is not possible to return part of the industry, at any rate, to private owners. [Laughter.] Hon. and right hon. Members may well laugh, but the situation could not be worse in some mining areas than it is under nationalisation.

The Government should at least consider whether they might hive off the marginal sections on a royalty basis. That would be a great incentive, because hon. Members may recollect that when the publicly-owned road haulage business was half returned to private enterprise the immediate competition which ensued had a most favourable effect on the industry as a whole. It was suggested recently that one of the gas boards should be handed back to private enterprise. Some way should be found, at least for those which have to be closed, for collieries to be run on a royalty basis and put out to tender by private enterprise. [Laughter.] Although hon. Members may still laugh they must remember that the National Coal Board still does put mines out to tender. It puts out to tender opencast workings and small mines. We have recently heard of mines in the Forest of Dean being operated by private concerns. If it can be done there, why not elsewhere? There certainly seems nothing to be lost by that. I am sure that miners who are now in danger of losing their jobs would welcome any lifeline held out to them at this time.

If pits in category B in certain circumstances can be considered to be viable propositions but yet they are due for closure, I suggest that they should be offered by tender and on a royalty basis before the final decision is taken. The National Coal Board and hon. Members opposite might be agreeably surprised at the results. At any rate, it would provide healthy competition, and that in itself would prove stimulating to the industry as a whole. This may be a novel and unorthodox scheme to propose, but I suggest that the state of the industry demands that something novel and unorthodox should be put into operation at this stage.

8.50 p.m.

When Bills of this nature are introduced in the House one is justified and, indeed, honour bound to examine them from the point of view of their effect upon one's own division. In the short time at my disposal I shall seek to do that.

As most hon. Members know, the industrial development of the Wrexham area has been based upon the coal industry. It is the basic industry round which the industrial development has centred for the last 200 years. We are well aware of all the trials and difficulties through which the mining industry has gone during the last century and the first part of the present century. We know the difficulties, the bitter experiences, the strikes and the lock-outs, and the unnecessary accidents which took place in the mines under private enterprise.

I am glad to say that even under those difficulties the mining communities developed into first-class communities. They were communities of very deep human understanding. I am very proud to feel that I am a member of a mining community. There is no snobbery there, but there is certainly a regard for academic qualifications and culture. Mining communities are fine communities intellectually as well as socially. However, I regret to say that miners have not been given their due regard in this country. The day may come when the country will have to go on its knees to beg man to do this job down in the mines.

With those introductory remarks, I want to speak about the position in Wrexham. Immediately around Wrexham there are four collieries. Of those four collieries, three are in danger. Only one is in column A. That one colliery is Gresford Colliery, a colliery which became world news 31 years ago, a colliery where hundreds of miners lie entombed, many of whom I knew. Amongst those there is a boy of 15 whom I taught in school. In 1934 that was a doomed pit, and the colliery of doom. Today, thirty-one years after the tragic event, this is the only colliery in the district which has any hope of survival.

What is the position in the other collieries? Llay Main, the last colliery to be sunk in the North Wales coalfield by private enterprise, was sunk by private enterprise through the Bala Fault, a hopeless blunder from the very beginning. With all due respect to private enterprise, that is an indication of their practical knowledge. It appears to be that Llay Main will have to close in the very near future.

It is this point that makes me question one particular feature of this Measure, namely, the emphasis on accelerating the process of closing uneconomic pits. I can perhaps see the merit in closing those which are of proved and undisputed uneconomic value. I doubt very much that it would be justifiable to close a series of pits in a given area and accelerate the process of so doing.

I have in mind two collieries in the immediate neighbourhood of Wrexham. I have already referred to Llay Main, but nearby there is the Bersham Colliery. This is bracketed with the Llay Main and I am told that it has been producing coal at a loss of £2 a ton. This is perhaps the reason why it appears in this list, but the position now is that this colliery has broken through into a new seam, known as the Queen's Seam, and the loss has been reduced already from £2 to 8s. per ton. I am told that this loss can be wiped out and the colliery can be made economic provided that the manpower is employed to enable a three-shift system to be set up. But this means manpower to the extent of 200 more men.

It is in respect of this factor that I want to challenge the principle of an accelerated closure of pits. Llay Main will be closing, and perhaps that is fair enough in the light of the conditions there, but if 200 men from Llay Main could be transferred to the Bersham Colliery a three-shift system would be possible there and that uneconomic pit could be made very profitable. If, however, the process of acceleration of closures takes place we shall have both the Llay Main and the Bersham Colliery closed at the same time and there will be 1,700 men redundant.

There is another matter to which I should like the Minister to pay serious attention. I should like to know on what ground collieries are declared to be uneconomic. Superficially my question is simple and it invites a simple answer. I know that it is easy to provide figures proving that certain collieries are working at a loss. But why are they working at a loss? Is that qestion always asked fully? I know that certain answers are given. We are told that the seams have been worked out and are no longer profitable, or that there are geological difficulties which are insurmountable. We are told that there are industrial disputes which are too costly or that absenteeism is too high, but are these the only questions asked? In Wrexham there are excellent human relations and the percentage of absenteeism is far below the average. Does the efficiency of the machinery employed come into the calculation?

I should like it made known now that in the six months from last April to September 55,000 tons of coal were lost in the North Wales coalfields, not through absenteeism, not through industrial disputes and not through geological difficulties but through the breakdown of machinery which had been introduced into the pits. Inferior, badly made machinery has been introduced. The National Coal Board and the National Union of Mineworkers have protested to the manufacturers but no heed appears to have been taken of this fact. It would be very wrong to press for the closing of an uneconomic pit when all the factors in the situation had not been taken into account and problems such as unreliable machinery solved.

9.0 p.m.

Anyone who had listened to this debate could hardly fail to be greatly moved by the sincere expressions of feeling, from both sides of the House, on the industry as it stands today. As a comparatively new Member of the House, I must admit to regarding this as a rather painful debate. Many hon. Members opposite who have had to face the situation of a contracting industry have done it with a very heavy heart. As my hon. Friend the Member for Yeovil (Mr. Peyton) said in opening for the Opposition, there is no one here who wishes to do anything but offer our very real and sincere belief that the industry can in the future move on to success.

Let us leave comment on my hon. Friend the Member for Cardiff, North and turn our attention to the serious problems which the industry has to face.

Anyone who has read this country's history will realise how important has been the part that coal has played in bringing Britain to industrial maturity. Anyone who has seen the steel works strung out across the country and the great fleets of merchant ships which built up Britain as a trading nation will know that none of this would have been possible without a really effective coal mining industry. The plentiful supplies of cheap indigenous fuel gave Britain a position in the world which made her truly a favoured nation.

But times have changed. All of us in the House would do a disservice to this great industry if we did not accept this fact. It is pointless to pretend that a situation applicable 15, 20 or 50 years ago is necessarily applicable today. For this reason, we must accept the challenge of this new reconstruction, face it and meet it squarely.

Twenty years ago, almost to the day, the House debated on Second Reading another Bill on the coal industry, the Bill to nationalise it. Several maiden speeches were made on that occasion, notably one by the right hon. Gentleman who is now the First Secretary of State. I admit at once that I find it difficult on many occasions to agree with the right hon. Gentleman, and I should hardly wish to make too much of a maiden speech, but I believe that, on that occasion, when referring to the impact of the Bill on the industry, the right hon. Gentleman said something which is worth repeating now:
"As for ourselves and the rest of the country, this Bill will be justified in so far as we get a more efficient and happier industry, and a more regular and efficient flow of coal at economic prices."—[OFFICIAL REPORT, 29th January, 1946; Vol. 418, c. 772.]
Whether we like it or not, the industry today is neither happy nor economic. The speeches from hon. Members opposite have made abundantly clear that the morale of the industry is at a very low ebb.

I was extremely sorry not to be able to hear the speech of the hon. Member for Merthyr Tydvil (Mr. S. O. Davies), who, I know, feels most deeply about the problem and is much respected in the valleys of South Wales. He and his hon. Friends the Members for Bolsover (Mr. Neal) and Derbyshire, North-East (Mr. Swain) all pointed to the fact that morale in the industry is at present at a terribly low ebb. It must be our responsibility in this House, not only to the miners but to the people generally, to send a message to those working in the industry which may, we hope, be able to get them across this very difficult period and into the period which, I believe, will provide a very bright future for them.

My hon. Friend the Member for Dumfries (Mr. Munro), in a most eloquent speech, talked about jobs before closures. This is vitally important. Indeed, it is important that we should let the miners who will be affected by this reconstruction know exactly where they stand. What is eating into the industry at the moment is this terrible indecision. Are they in a sinking ship or is this to be a great new industry? It is our duty tonight and at other times to clear their minds on this point.

An issue raised by my hon. Friend the Member for Yeovil is the first that I should like to take up and which points to real hope. I have already said that history proves the importance of this industry but, looking into the future and realising that our energy demands must increase and that the demand for electricity, which is the great customer of the coal industry, will also increase, despite the advent of nuclear power, the coal industry must benefit, and therefore we must act against any drift away from the industry in general so that we do not find ourselves eventually in a situation where we cannot meet new demand.

We are in the difficult transitional period of shaping the industry to be economically effective and competitive—something that every hon. Member would like to see—while at the same time not operating such savage surgery that we destroy it to the point where we cannot expand it if necessary.

Therefore, I want to examine for a moment the White Paper on the Finances of the Coal Industry. In my estimation it reflects two main problems facing the industry. The first is, whether one likes it or not, that there is a chronic financial weakness in the structure of the industry which has been aggravated by continuous long-term commercial trends. The second is the acute runaway worsening in the day-to-day accounts. I do not think that any hon. Member would disagree with that.

In dealing with the chronic financial reasons, the Government have decided to take the very substantial step of writing off some £415 million-worth of capital debt which, as was pointed out by my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster), represents about half the total indebtedness of the industry. I want to dwell on this point for a moment because my hon. Friend the Member for Yeovil pointed to what we believe to be a weakness in the figures as quoted in the White Paper. We have had a peculiar rounding off of this figure of about £400 million in a way which my right hon. and hon. Friends and I find hard to understand. I ask the Parliamentary Secretary to reply to these questions.

There is the writing down of £16 million from the book value of coke ovens and the accumulated deficit of £91 million. Then there is £140 million for 150 uneconomic pits and £110 million for those pits which are marginal in one way or another. If our arithmetic is correct, these figures add up to £357 million. Between that and the figure of £400 million there is £43 million which we consider unaccounted for.

My hon. Friend suggested, in a most charitable way, that this was perhaps just the Government rounding off the figure. But we are the custodians of the public purse and the Government must surely give a detailed explanation of where this missing £43 million has gone, and should say in much greater detail than in the White Paper how the £357 million is made up. If we were shareholders in a private company I cannot believe that we would allow the board of directors to produce these extremely vague figures, and at the same time expect us to pass them without any comment. The other point on this £415 million is that there is a feeling, expressed by hon. Gentlemen during the course of the debate, that the writing-off of this figure automatically puts the books straight and that, therefore, there is nothing to worry about. It is not like that at all. This is a transfer of debt to the Exchequer. While I have heard people say that Government money is tuppence a bucket, we on this side of the House do not believe this.

We honestly believe, as the custodians of the public purse, that we are entitled to a very close examination of this figure, My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) spoke most eloquently about the control of finance and the control of the industry. This is one of the aspects of the proposals requiring very careful attention. So far I have been talking about the £400 million of write-off. When the Government originally announced this, there was no question of any price increases in the industry, nor was there any question of an additional figure being added to it. Now we are in possession of a Bill and a White Paper which explains that £15 million is to be added to the £400 million.

The £15 million arises from a desire to put up prices, which has been staunched by referring the price increase to the National Incomes Board. This £15 million represents the money that could have been lost. This is the most terrible double-talk of all times, as was pointed out by my hon. Friend the Member for Barkston Ash (Mr. Alison). The Government are here referring a price increase to the Board and at the same time the N.C.B. get the benefit of adding another £15 million to the write-off figure. So it is getting the best of both worlds. This is certainly something which the right hon. Gentleman the First Secretary would not allow to happen in private industry. But when it is a nationalised industry, this can be done and we, the taxpayers, have to foot the bill.

I should like the Parliamentary Secretary to explain the mystery of the price increase. What happened when we were told, on the one hand, that there was no intention of putting up the prices, and then were suddenly confronted a short time afterwards with a further £15 million because the price did not go up? This figure of £400 million, together with the £15 million, represents a very substantial sum of money by any standards. One would have expected the Chairman of the National Coal Board to be extremely grateful because this write-off has been accompanied by a reconstruction of the target figure of coal production. However, far from being grateful, he has been extremely resentful. We on this side of the House believe that the industry should be free to produce as much coal as it can sell effectively. Target figures themselves can be dangerous.

I would like to say a word about the very disturbing accounts for the first six months of the year, the six months ending 25th September. As has already been pointed out, the deficit at the end of the six months runs out at something like £45 million, and by the end of the year it will probably work out at something like £55 million. This is a vast sum of money representing something like an increase of 5s. a ton on coal. The figure is bad enough, but when one looks at the explanatory note accompanying the figures we are really getting into trouble. The document which went out with the statement says:
"The main factors which gave rise to the increased loss were "… a reduction in proceeds resulting from the extension of summer prices, coking coal price reductions.…"
Coking coal price reductions are a matter that I am not prepared to gloss over and perhaps the Parliamentary Secretary realises why. The coking coal price reductions were brought about last year. On that occasion the Chairman of the National Coal Board said on 16th July, 1964:
"This is the first time, for a quarter of a century or more, that there has been a reduction in the price of coal to British industry. If we are able to push up productivity sufficiently fast our financial position will he strengthened and we shall be able to make further selective price reductions of this kind."
Yet we come to the House today, 16 months later, to find ourselves with a document which purports to use these price reductions as an excuse for the gigantic loss. I therefore ask the Parliamentary Secretary if he really believed that the Chairman of the Coal Board was correct in the statement he made 16 months ago. His thinking on that occasion must have been extremely woolly.

Before I leave this document I would like to refer to another excuse mentioned here. It is one which my hon. Friend the Member for Cardiff, North mentioned, namely, increased absenteeism. The Chairman of the Coal Board has already spoken quite frequently about the problem of manning an industry which is becoming more and more capital intensive, when one does not know if the individuals who work it are going to turn up. I hope that miners and other employees in the industry will realise that by putting into the public mind the image of irresponsibility, they are doing themselves a real disservice and, although the hon. Member for Derbyshire, North-East may disagree with me, he knows that that is an extremely important point which has been underlined on many occasions by the Chairman of the National Coal Board.

I should like to say a word now about that part of the Bill and the section of the White Paper which deals with divers sification. The figure of £75 million is mentioned and, as my hon. Friend the Member for Yeovil has already pointed out, among the projects which it is suggested should be explored under this head are such things as benzole refining.

In the White Paper, one sees on page 3 in the sort of apologia for the write-off of £400 million, that some of that investment was in projects which were known to be risky. I hope that the Parliamentary Secretary will be able to assure the House tonight that the projects which it is now intended to explore will not also prove extremely risky. I should like to ask him whether capital which gets tied up in risky projects is going to be written-off in exactly the same way as the write-off figures about which I have just been talking.

Like my hon. Friend I wish to support most strongly the allocation of £18 million on miners' housing. That is clearly extremely important and something which we welcome on this side of the House.

Before I leave the subject of capital reconstruction, I should like to remind the House of one point. Some hon. Members may ask why this reconstruction was not undertaken earlier. They will see that the White Paper makes it clear that in 1962 my right hon. Friend suggested a similar reconstruction, but the Board on that occasion asked that it should not be done then.

I should like to return to the target figures which I mentioned earlier, and which I suggested had made the Chairman of the National Coal Board resentful when he should have been grateful. My hon. Friend the Member for Yeovil suggested that it would not be a sensible idea to nail unrealistic target figures to the mast, and I suggest that going from one figure to another, whatever the other figure may be, is an unhelpful thing to do. If I have a criticism of the Minister, it is that he has done this. I think we must all realise that the figure of 200 million tons is not a tenable proposition. Not only is it not a sellable proposition; it is not a productive one. Therefore, to come from that figure to 170 million or 180 million tons, merely makes people in the industry say, "That is my job". It does harm to morale rather than boost it, and therefore I suggest that the object of the exercise should not be to fix arbitrary target figures—and goodness knows, almost without exception, fuel forecasts have proved to be wrong—but to use as our yardstick the ability of the industry to produce what it can sell effectively.

If we can do that, if we can produce an economic, efficient and competitive industry, then I and my right hon. and hon. Friends will have no worries about what that production figure should be, and I think that if we continue to consider this industry in terms of a figure on a piece of paper, whether in the National Plan, in the White Paper, or anywhere else, we shall do more harm than good.

Nothing can be more expensive or do greater harm to this industry than the endless manning of uneconomic pits or collieries. The arguments put forward by hon. Gentlemen opposite, and indeed by my hon. Friends on certain occasions, explaining the tremendous social problems are, of course, beyond doubt, but the way to solve the problem of the mining industry is not to keep open uneconomic holes in the ground and send people into them in such a way that it weakens the industry. The most sensible thing to do is to provide sufficient effective compensation, retraining, and all the rest of it—this was mentioned particularly by the hon. Member for Morpeth (Mr. Owen)—and to make certain that, where possible, new industry can be found, either in the area, or in an area which can be covered by transport.

I know the Swansea Valley very well, and I am impressed by what has been done at Ystradgynlais and Ystalyfera. There is now a Smith's watch factory in the area. This sort of light industry does not meet the whole need, but this kind of thing must be encouraged, and we on this side of the House therefore welcome the compensation and resettlement provisions of the Bill. My hon. Friend the Member for Somerset, North (Mr. Dean) made a very special plea for the old and disabled, and this is something which we would like to underline, because the needs and the difficulties of an old person, or a partly disabled person, are very much greater than those of people who are able to transfer easily.

We support the move of this industry from a labour-intensive industry to a capital-intensive one, and this is what it is doing, but there are tremendous problems to be overcome. There are tremendous wage structure problems to be overcome. I am thinking, for instance, of the differential between the day wage man and the face worker. But having seen the R.O.L.F. process in operation in the East Midlands, and realising that it is far from the perfect answer, I feel that it is possible to see, perhaps on the horizon, a completely new approach to coal mining.

Perhaps the R.O.L.F. system, where I saw it, at any rate, was rather too sophisticated, but, with modifications, mechanical cutting in this way, remotely controlled, will be a tremendous benefit to the mining industry generally. I recall certain hon. Members opposite being very critical of my right hon. Friend when he referred to fuel factories. Perhaps they did not quite appreciate his point. He was not trying to exploit the miners; he was merely seeking to work this costly capital equipment as effectively as possible.

There is another important point connected with the question of capital equipment. The White Paper states that many of the new schemes will be in the £250,000 bracket. Since these are cheaper schemes than have been envisaged in the past, it makes one feel that the decision to operate such schemes should perhaps have been taken at a much more local level. My hon. and gallant Friend the Member for South Fylde pointed out that this is one of the few coal industries in the world which are run from the capital cities of their countries. As these schemes become cheaper and more a question of on-the-spot decisions there is a real advantage in having much more financial devolution, down to area or almost colliery level.

We on this side believe in the future of the industry. I know that hon. Members on both sides of the House have regarded today as being perhaps unhappy in that real emotion and bitterness have crept in. This is not necessarily bad. I think that it is a good thing to have had this extremely frank discussion. We believe in an economic, efficient, and competitive industry. My hon. Friend the Member for Dumfries (Mr. Monro), in an eloquent speech, talked about the problems of people who are displaced by these pit closures. I hope that the Parliamentary Secretary will tell us something more of his detailed plans for these individuals.

There are some questions that we must press him to answer. We must have more details about this £400 million figure, and the missing £43 million, of which I know he has already made a note. We must have a clear explanation of the price mystery, as I call it, where we find the £15 million tacked on as a result of referring this price increase to the Prices and Incomes Board. I should like more details about the diversification figure of £75 million, and an assurance that we shall not again end in the risky projects mentioned on page 3 of the White Paper.

Is this tremendous capital reconstruction really going to be the beginning of something new and important, and not merely a shoring up of a rickety structure? Can we be sure that in five years' time, or whatever it may be, the Government will not have to come back here and once again raise vast sums of money? Let us hope that this is a beginning. This House cannot ignore its responsibilities to the miners and to the people. We cannot expect them to shore up an uneconomic industry indefinitely. It is bad for the industry and bad for the country.

This reconstruction can mean the beginning of a great new future. To try to hold on to the hands of the clock, attractive although it may seem, is harmful. We say that the industry should be allowed to face the challenge before it, because we on this side of the House believe that it can meet that challenge.

Before I call the last speaker, may I observe that at the beginning of the debate I appealed for speeches of a reasonable length, so that more hon. Members could take part in the debate. Ten hon. Members responded to that appeal, and I am grateful to them. Some hon. Members completely ignored it. Unless we are all prepared to co-operate in this, there is no reason why any hon. Member should respond to an appeal from the Chair, but this will mean that hon. Members who have a right to take part in debates will not take part in them.

9.28 p.m.

I will first congratulate the hon. Member for Lewisham, West (Mr. McNair-Wilson) on his speech, the first that he has made from the Opposition Dispatch Box. I remember that the hon. Member for Yeovil (Mr. Peyton) congratulated me on the speech I made many years ago. I only wish that my speech then had been as clear as the speech of the hon. Member for Lewisham, West.

Having said that, however, I must add that I formed the impression that he was at times suffering from political schizophrenia in that he wanted to strike and was then afraid to wound. He spoke about risky projects. Of course, the White Paper deals with risky projects in the coalmining industry and discusses the situation since the early 1950s. If the hon. Member is to make a useful contribution to the debates, he must remember that many of these measures and a great deal of this investment took place under the last Administration. We have not been 13 years in opposition—

I am obliged. I was saying that we have been 13 years in opposition and his party has not, and many of these risky ventures took place under the Board which was responsible to the last Administration. The hon. Member went on to charge us with not saying enough, in that a public company would not be able to get by with this kind of accounting, yet when we discussed the estimated amounts of 170 million to 180 million tons, he charged us with saying too much. Which is it? He cannot ride both horses indefinitely.

To any hon. Member from South Wales, a debate on coal cannot be confined entirely to sheer logic, to stark £s. d. In our discussions on coal, all of us who are proud to have miners' blood in our veins are bound to be tinged to a degree with the emotions of generations of struggle and tragedy and, out of all this, to mirror the proud spirit and the social solidarity of the mining community.

My hon. Friends who have spoken in the debate have put the case for the mining communities, who could not have better advocates. Their sincerity cannot be challenged. I am sure that they will accept that my right hon. Friend and I and all other members of the Government are equally sincere in what we are seeking to do. We believe that what we are doing is right—right in the interests of the miners, right in the interests of the nation. Unless we are to abandon the mining industry, there is no alternative to our policy. I have not heard in the debate, either from hon. Members opposite or from my hon. Friends, any thought out constructive alternative.

Harsh and ugly words have been used about our policies, especially outside this Chamber. Nothing would be gained by their repetition now. Political scavenging has never been a constructive pastime. We have been charged with continuing Tory policies and told that we were callous to announce closures before Christmas. What is the situation? My right hon. Friend has indicated the measures that the Government have taken both in the short term and now our proposals for the long term for the industry.

Let me catalogue them. It is a massive catalogue of support. We have continued the ban on the import of coal and we have continued the duty of 2d. a gallon on fuel oil. Then, my right hon. Friend announced in April the short-term interim measures—first, that the electricity and gas industries would use more coal this year, second, that there would be a preference of 5 per cent. for coal used in public buildings and, third, his requirement of the National Coal Board to earn an additional £10 million per annum for replacement costs of assets, waived for the time being. Of course, pending a study of coal prices by the Prices and Incomes Board, the price of coal would not be advanced this year. This incidentally eases the problem of the National Coal Board in selling coal during the current year.

Those were the interim measures. I come now to the new assistance which we propose for the industry if the House permits the Bill to be passed. First, we shall write off £400 million of unremunerative capital—about 40 per cent. of the industry's capital, saving the Board £20 million per annum in interest, and £10 million, rising to about £20 million, per annum in depreciation. This we consider to be a fair balance between the interest of the public and the interest of the industry.

We are proposing a grant to the Board of up to £30 million to assist in the redeployment of the Board's manpower and the closure of uneconomic collieries. The hon. Member for Yeovil and many of my hon. Friends asked about this. They asked what was the significance of this figure and how it compared with what is now spent in these matters. In the past year, as set out in the Bill, the sum spent on this kind of activity was £3·8 million. We are providing half the excess of the increased expenditure over and above this, up to £30 million in five years. If we were to multiply by five the amount now spent it would bring us to some £19 million spent over five years by the Board under the existing arrangements.

Under the new arrangement, in addition to this, there will be a maximum of a further £60 million—£30 million by the Board and £30 million by the Government. If one were to average the expenditure on this kind of activity, it would come to about four times what is now spent. Since we expect a great deal of this expenditure to take place in the early years, the proportion will be that much higher in the earlier years. This is a great and significant contribution by the Government to the great human problems which will be involved in the colliery closure programme. It means that the community as a whole are assisting in shouldering this great burden, and it is a great and significant step forward.

In addition, there will be the other assistance outlined under other Votes. They will carry this kind of assistance from other Departments—the Board of Trade, the Ministry of Labour and the Ministry of Housing. I do not propose to go into this now, but the totality of these measures is massive support for the coal industry so that it will be enabled to reconstruct itself, to rationalise and to deal with the human problems which will arise.

Some of these problems have been discussed during the debate. I have a great number of points to answer and perhaps I may briefly answer some of them. The hon. Member for Yeovil asked about the mystery of the price increase, as he called it. The situation is set out in the White Paper. As the hon. Member knows, the question of a price increase sometimes arises in the early stages in a tentative way. I confirm, however, that formal and firm application for a price increase was made in July to start from 1st September and this is reported in the White Paper. That is the situation.

The hon. Member for Lewisham, West complained that we were trying to get the best of both worlds. We are seeking to ensure to the best of our ability, taking into regard the continuing deteriorating position of the Board, that by the end of the present financial year we shall be able as far as possible to start with a clean sheet for the Board. That is the object of the exercise.

I want to get this absolutely clear. Is the hon. Gentleman stating categorically that the Board made no formal proposals or requests for a price increase in March or April of this year?

I have nothing to add to what I said. A formal and firm application was made in July and the hon. Gentleman knows, having himself held office in this Ministry, that price increases are sometimes mooted in the early stages in a tentative way. I have nothing further to add to what I said on the subject.

The hon. Member for Yeovil and the hon. Member for Lewisham, West then raised the question of ancillary investments. The hon. Member for Yeovil was right about both figures, £50 million and £75 million. He also asked about the missing £43 million. He was right about that, too. I will be as frank with him on this matter as I hope I am on all occasions. With the contraction of the market and the current operation of the Board, we felt it right—and I am sure that, at the end of the day, the hon. Member for Yeovil will agree with us—to take a cautious view and to allow this figure as part of the rounding up exericse.

I believe that since we took that decision our view has been confirmed by tire interim accounts of the Board, which were published a few weeks ago. If we have been too cautious and have allowed too generous a provision, we have safeguarded ourselves in this respect by giving in Clause 2(3) of the Bill power to enable the Minister to divert payments back to the Exchequer if such a situation arose. Thus, that provision is in the Bill and these are the best estimates we can make. I am sure that the hon. Member for Yeovil realises—and we can return to this matter in more detail in Committee—the difficulty of arriving at as accurate an estimate as possible. As I have explained, the provision which I described is in the Bill and I hope that tae hon. Gentleman agrees that I have made as frank an approach to the subject as I could in answering his queries.

While I was temporarily absent from the Chamber an hon. Member asked whether the powers of borrowing set out in the Bill would give new powers to the Board. They will not. The Board will exercise its borrowing powers within its present functions.

Another point which I particularly mentioned was that of deficit financing. The White Paper makes the Government's intentions perfectly clear—that the Bill does not enshrine the same principle which the White Paper contains. May we have an assurance on this point?

That is the object of the Minister and he has set it out in the White Paper. Perhaps we can go further into this issue in Committee. We can then consider whether there are sufficient safeguards for the Minister in the exercise of this kind of power, which we regard as important, as I am sure does the hon. Gentleman.

The hon. Member for Barkston Ash (Mr. Alison) asked a number of detailed questions and compared the matters set out in various parts of the White Paper with the National Plan and other documents. I will write to him on these matters and, since he is not in his place at the moment, I hope to have a discussion with him in the next few days.

I have answered some of the questions which were put to me and I will try to answer as many more as possible before 10 o'clock. We came to the conclusion that the coal industry should be given this write-off of capital. We did so because we believe that in present-day circumstances the Board should not be called upon to carry the weight of an excessive burden of capital which is unrealistic from the point of view of the industry. With capitial reconstruction, the industry must also face physical reconstruction. Our object must be to ensure that, at the end of the day, we have an industry which has a realistic capital structure, is paying realistic interest charges and is concentrating its production in those pits which are best able to produce coal economically.

I was interested to read a newspaper report of a speech made last Saturday in Cardiff by Mr. Paynter, a man for whom I have very great respect. I may say, in passing, that it was a privilege for me, shortly after assuming office, to go to the headquarters of the National Union of Mineworkers in London to pay my respects. I do not know when a fuel Minister last went there, and I did not inquire. Likewise, in the course of the year, I have met N.U.M. leaders in the Principality and elsewhere, and I have been impressed by the reasonable way in which they present their arguments. We as a Ministry, and we as a Government, do not operate in a vacuum. We know the feelings and views of the miners and of the mining community on these matters.

I was therefore all the more surprised to read of Mr. Paynter arguing that as the 150 pits to be closed produced 30 million tons of coal a year, and as present output was 183 million tons, within two and a half years the total output would be down to 153 million tons—that is, deducting the 30 million tons. This shows a complete failure to understand our arrangements. The Board produced 183 million tons of coal in the last year, and did so from 540 pits. They have produced this amount of coal because they are able to and are selling it. Of the pits now in production, 150 are gross losers. The closing down of these 150 pits does not of necessity mean lowered production. It then becomes a challenge, and a welcomed challenge, to the good pits, in which there has been vast capital investment, to produce the fuel still needed by the market. Many of these good pits are not doing that now. Some are short of manpower. These gigantic enterprises are hungry for manpower, and for the opportunity to produce and to market their products. Their exciting future is being denied them.

How is this? The simple answer is that the market is, in part, being supplied by the other pits that are losing money on every ton that comes up, and are not only unable to pay their own way but are dragging down the rest of the industry. The economic pits are frequently short of manpower, and of the 120,000-odd men affected by the closures there will be work for about 60,000 at other colleries within travelling distance, and work for another 25,000 men if they are ready to move. The redeployment of this labour—and I appreciate the immense difficulties—is vital for the future of the industry, and in this redeployment I earnestly hope that the unions will co-operate to the full with management.

The key to redeployment is housing, and this has been referred to by my right hon. Friend. The kind of pits that I have in mind and in which there has been this vast expenditure are pits well known to many members. To name only a few to which I went, there is Bedwas, Kellingley with a proposed investment of £13½ million, Bevercotes, Daw Mill and Longannet. The total proposed investment in these five pits is almost £50 million. Their present manpower is a little over 4,000. Their future total manpower need will be over 8,000—almost double. That is the kind of need there is in this industry.

We must face the situation. The industry today has this measure of protection, and it is pretty substantial, but, at the end of the day, the industry must be efficient if it is to maintain its markets, and this pattern is changing all the time with new technologies and new discoveries. The situation we are facing today is that, despite protection, the coal industry is weighed down by a part of it that is uneconomic, and because of this, coal is in danger of losing markets.

If our fuel costs rise there is a danger that we shall be priced out of world markets. Why should the good pits be dragged down? Why send men to work underground when their journey is not really necessary? I recall a famous statement made in Durham by one of the greatest of my fellow countryman, Aneurin Bevan. He said:
"What we want is a guarantee we should have work. If we can find new forms of energy, well and good, we would rather work in white overalls on top than black underneath."
For this kind of situation in the pits there is an unanswerable biblical precedent:
"if thine eye offend thee, pluck it out, and cast it from thee … if thy hand or thy foot offend thee cut them off and cast them from thee."
If we accept the logic of this and if we accept that there is a limit to protection and we have reached it, the argument then becomes that of speed, speed of the necessary re-adjustment of the industry. If that is the argument, we should all be travelling in the same vehicle at this time and the discussion would centre about which gear we should use.

Quantitatively, as my right hon. Friend indicated, the closures in the next five years will not differ from the number in the last five years. We propose that the closures for the next period be accelerated and over half of them should be compressed into a period of about two years. Is this wrong? The arguments used against us are twofold: that we are aggravating the uncertainty which exists in the minds of miners and that we are accelerating the drift away from the mines. These are very important matters. There is uncertainty and this unfortunately exists in the good areas as well as in the bad areas.

Uncertainty produces rumours. Rumours magnify and multiply the uncertainty. Only the other day in my constituency I was told that two power stations at Aberthaw, one working and one in the process of being built, were going over to the use of oil. This was incredible. I had been there only a few weeks before and had seen the vast capital construction going on. I found that the suggestion was of course baseless. The publication of lists of closures has, I am sure, been of great benefit in combating this feeling of uncertainty. That is why I did not regard publication of the lists as callous. It may have been harsh for the 150 pits, but what a relief for the 280 "A" pits and what a challenge to the "B" pits.

The longer the period of closures the greater the burden on the N.C.B. and the whole mining community and certainly the greater the difficulty for the Board to right itself financially. Someone has to pay for keeping the uneconomic pits open for any period longer than is strictly necessary for the Board to try to redeploy its labour and adjust its markets. Is the Board to pay or are the Government to pay? The Board has enough on its hands without shouldering the burden and I am sure that there are cheaper, quicker and more permanent ways of providing alternative employment for the men than this. Unfortunately, this feeling of uncertainty exists in Yorkshire and the East Midlands, areas which have been affected much less by closures and areas able to produce coal economically and viably.

The drain on manpower exists here also. Why not then try to carry out this essential redeployment of men and attempt to stem this tide? In the past the Board has borne this as a part of its normal programme of closures and we have helped it in that difficult position. I make no attempt to minimise the problem of providing alternative employment for 20,000 men for whom no jobs can be found in the industry. This is aggravated by the age structure of the manpower, the large number of men with some degree of disability and the occupational hazards in a lifetime's work which harshens the problem.

We are not unaware of these problems. The fact that there is a problem of age and disability is not an argument against closures. It is not an argument against changes. It is an added challenge to the Board of Trade and the Ministry of Labour. The Board of Trade has already scheduled the mining areas, and the Ministry of Labour is actively engaged in this work. This will be a path which will challenge Government Departments to the utmost, but that is what they are there for.

This, to me, is the acid test of the Government's policy. The National Plan, regional planning—the whole lot are in the balance.

I have only five minutes left. The hon. Gentleman has not been here during the course of the day.

If I believed that our policies were doomed to failure, that there would be massive unemployment in our coalfields, I should not be here advocating this policy. Of course there will be difficulties, and there will be serious problems to overcome. Let there be no question about it: our sights are set high and every endeavour must be made to hit the target of redeployment. I have every confidence that my right, hon. Friends will succeed in this.

I must deal with one very important matter. It has been raised by a number of hon. Members. Where do we go from here? There is the great problem of the drift of men away from the nits. It has been constant and steady. Only this week I was hoping that we might be within sight of the end of the corridor. We are not. What are the reasons for it? They are many and diverse. Men do not want to work down pits. They prefer more congenial employment when it is available—and who can blame them. Others blame the insecurity of the industry. Others claim that the rewards are far too low.

On the last two, our policy should deal with the problem of insecurity and at the end of the day it should no longer be with us. As to rewards, this is a matter for men and management, but one thing is certain. While the industry is dragged down and down by uneconomic pits, there can be no hope for drastic increases in the rewards of those who work in it. With coal on a sounder, healthier basis, there is a new picture, and I have every sympathy with the miner and his claim for a proper reward for one of the most arduous occupations in the land.

As regards the industry being uncongenial and unattractive, this is inherent in it. But we are entering a new era, an era of mechanisation, an era of electronics and automation—an exciting scene for thousands who will operate one of the most advanced mining industries in the world. Despite the fact that men will continue to have to work underground, even with automated devices, I believe that, because of automation and mechanisation, the industry should not be without attractions to the new miner of tomorrow. I believe that at the end of the day—the sooner it comes the better—we shall have a viable economic coal industry, an industry on a proper capital and physical structure.

My hon. Friend the Member for Derbyshire, North-East (Mr. Swain), amongst other hon. Members, asked why the coal industry should not share in the increased calls for energy under the National Plan. If he will look only at electricity, the electricity industry being the main customer of the coal industry, there he will see a vast increase in the demand for coal. An increase running at about 24 per cent. between 1964 and 1970. That is not bad. Everyone who believes in coal, everyone who accepts that coal must play a very important part in the country's energy demands—every one of us must together ensure that there is a great future for this great industry which has played a vital part in the economic life of this nation. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[ Mr. Ifor Davies.]

Committee Tomorrow.