Essays in Liberalism
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A National Mining Board
At the same time a National Mining Board consisting of representatives of all the interested elements, colliery-owners, managerial and technical staffs, miners, and other grades of workers, and coal consumers would be formed (the Mines Department already has a National Advisory Committee); the mining engineering element must be strongly represented, and provision must be made for first-class technical advice being always available. It would then be the business of the National Mining Board to work out its policy and decide upon the broad principles which it wishes to weave into the existing structure of the coal-mining industry by means of its power of granting leases. The following principles will readily occur to most people, and are supported by evidence which is, in my humble judgment, convincing, given before the various commissions and committees which have inquired into this industry during recent years.
Firstly, More Amalgamation or Unification of Collieries. At present there are about 3000 pits owned by about 1500 companies or individuals, and producing an aggregate output of about 250 million tons per annum. Already there have been many large amalgamations. (i) Many fortunately situated small pits making a good profit will be found, but on the whole small collieries are economically unsound. In many cases at present the units are too small, having regard to the class of work being done, to the cost of up-to-date machinery and upkeep and to the variableness of the trade. Broadly I believe it to be true that the larger collieries are as a general rule more efficient than the smaller ones. (ii) In respect of co-operation in pumping, larger units would frequently make for efficiency and reduced cost; Sir Richard Redmayne, speaking of South Staffordshire before the Sankey Commission, said that we had already lost a large part of that coalfield through disagreement between neighbouring owners as to pumping. (iii) The advantages of larger units in facilitating the advantageous buying of timber, ponies, rails, machinery and the vast amount of other materials required in a colliery will be obvious to most business men.
I do not propose to chop up the coalfields into mathematical sections and compulsorily unify the collieries in those sections. I am merely laying down the broad principle that to get the best out of our national asset the National Mining Board must bring about through its power of granting leases the formation of larger working units than at present usually exist. The geological and other conditions in the different coalfields vary enormously, and these form a very relevant factor in deciding upon the ideal unit of size. It is conceivable that in certain districts all the colliery-owners in the district, with the aid of the National Mining Board, would form a statutory company on the lines of the District Coal Board, described in the Report made by Sir Arthur Duckham as a member of the Sankey Commission. One advantage accruing from unification (to which recent events have given more prominence) is that it mitigates the tendency for the wages of the district to be just those which the worst situated and the worst managed colliery can pay and yet keep going, and no more. This tendency seems to be recognised and mitigated in the Agreement of June, 1921, on which the mines are now being worked. Secondly, Provision for Progressive Joint Control, that is, for enabling all the persons engaged in the mining industry either in money, in brains, or in manual labour, or a combination of those interests, gradually to exercise an effective voice in the direction of their industry.
Some of the arguments for this principle appear to me to be (i) that, as indicated in my opening remarks, a sufficiently large number of the manual or mainly manual workers in the industry ardently desire a progressively effective share in the control of the industry; (ii) that this desire is natural and legitimate, having regard to the great increase in the education of the workers and the improvement in their status as citizens, and that so far from being repressed it should be encouraged; (iii) that it is the natural development of the system of Conciliation Boards and (occasionally) Pit Committees which has prevailed in the industry for many years, though more highly developed in some parts of the country than others. So far, these organs have been mainly used for purposes of consultation and negotiation; the time has come when with a more representative personnel, while not usurping the functions of a mine manager or, on a larger scale, the managing director, they must be developed so as to exercise some effective share in controlling the industry. (iv) While working conditions are not so dangerous and unpleasant as the public are sometimes asked to believe, the workers in this industry are exposed to an unusually high risk of injury and loss of life, and thus have a very direct interest in devising and adopting measures for increased safety. These measures nearly always mean expenditure, and thus an increased cost of working, and so long as their adoption (except in so far as made compulsory by the Mines Department) rests solely with bodies on which capital alone is represented and labour not at all, there will be fruitful cause for suspicion and discontent. The miners are apt to argue that dividends and safety precautions are mutually antipathetic, and will continue to do so as long as they have no part or lot in the reconciliation of these competing obligations. The question is not whether this argument of the miners is well-founded or not: the point is that their suspicion is natural, and any excuse for it should be removed. (v) The exceptionally large items which wages form in the total cost of coal production indicates the important contribution made by the miners to the welfare of the industry and justifies some share in the direction of that industry.
Upon the basis of typical pre-war years, the value of the labour put into the coal mining industry is 70 per cent. of the capital employed, and 70 per cent. of the annual saleable value of the coal, and yet this large labour interest has no share in the management of the industry.
The Mystery as to Profits
Thirdly, More Financial Publicity. Secrecy as to profits, which always suggests that they are as large as to make one ashamed of them, has been the bane of the coal-mining industry. For nearly half a century wages have borne some relation to selling prices, and there have been quarterly audits of typical selected mines in each district by joint auditors appointed by the owners and the miners. But over profits a curtain was drawn, except in so far as the compulsory filing at Somerset House by public companies of a document called a Statement in the form of a balance sheet, enabled the curious to draw not very accurate conclusions. It is not easy for the plain man to read a balance sheet or estimate profits, especially when shares are being subdivided, or when bonus shares are being issued, or large sums carried to reserve. The result has been continual and natural suspicion on the part of the miners, who doubtless imagined the colliery-owners’ profits to be much larger than they were. The miners knew that whenever they asked for an increase in their wages they were liable to be told that such an increase would turn a moderate profit into a substantial loss, but the amount of the profit they had to take on trust. Selling prices, yes, but profits, no.
The war and coal control partly killed that, and it must not return. By the settlement of June, 1921, for the first time the miners have established the principle of the adjustment of their wages in accordance with the proceeds of the industry “as ascertained by returns to be made by the owners, checked by a joint test audit of the owners’ books carried out by independent accountants appointed by each side.” That is an important step, but does not go anything like far enough.
At least two good results would accrue if colliery-owners conducted their business more in public: (i) a great deal of the suspicion and mistrust of the miners would be removed, and they would realise why and when their wages must undergo fluctuations, and the value of the many other factors besides wages which went to make up the pit-head cost of coal; (ii) publicity coupled with costing returns would make it possible to draw comparative conclusions as to the cost of production in different mines and districts, which would be a fruitful source of experiment and improvement. Publicity does not involve publication of lists of customers, British or foreign.
The Lessees of the Future
How far will the lessees to whom the National Mining Board will grant leases to work the coal be the same persons and companies as the present lessees? In this matter it is desirable to maintain the maximum amount of flexibility and variety. I do not think we have yet discovered the ideal unit, the ideal organisation for the development of our principal national asset. So much do our coalfields differ in geological formation, in tradition, in the subdivision and classification of labour, in outlet for trade, that it is unlikely that any single unit or organisation will be the ideal one for every coalfield. So we must resist any attempt, especially an early attempt, at stereotyping or standardising the type of lessee. By trial and error we shall learn much.
All the following types of lessee seem likely, sooner or later, to demand the attention of the National Mining Board. (I shall not touch on the question of distribution, inland and export. That is another and quite separate question):—
(i) The Present Lessees.—I see no reason to doubt that in the vast majority of cases the present lessees would be prepared to continue to operate their mines, paying royalties to the State instead of to the present royalty-owner. Where the unit is sufficiently large and the management efficient, the National Mining Board would probably grant a fresh lease, incorporating such conditions as to unification, joint control, and publicity as they might consider necessary. If the present lessees do not want the lease, there are others who will.
(ii) Larger Groups.—In a great many cases, however, the Board would decline to grant separate leases in respect of each of a number of small collieries, and would indicate that they were only prepared to receive applications for leases by groups of persons or companies prepared to amalgamate themselves into a corporation representing an output of x tons per annum. This figure would vary in each coalfield. In South Staffordshire, in particular, divided ownership has had most prejudicial effects in the matter of pumping.
(iii) District Coal Boards.—Sir Arthur Duckham’s scheme of statutory companies known as District Coal Boards requires consideration. Without necessarily adopting his districts or his uniformity of type throughout the country, there are many areas where it might be found that voluntary amalgamation was impracticable, and that the desired result could only be attained by an Act of Parliament providing for the compulsory amalgamation of persons and companies working a specified area and the issue of shares in the new corporation in exchange for the previous holdings.
(iv) Public Authorities.—I should very much like to see, sooner or later, in some area, a lessee in the form of an organisation which, though not national—not the State—should be at any rate public—something on the lines of the Port of London Authority.
It may well be that in one or more of our coalfields a public authority of this type, though with larger labour representation upon it and with a large measure of joint control from top to bottom, would be a suitable lessee of the minerals in that area. The important point is that public management need not mean bureaucratic State-management with the disadvantages popularly associated with it.
(v) I have mentioned several types of possible lessees, but it will be noticed that there is nothing in these suggestions which would prevent the National Mining Board from making the experiment of working a few mines themselves.
To sum up. There is a problem of the Mines. No sensible person should be deceived by the quiescence of the last twelve abnormal months. Without using extravagant language, the coal-mining industry is a volcano liable at any moment to erupt and involve the whole community in loss and suffering. Therefore, as a body of citizens, we are under a duty to seek a solution which can be effected between the occurrence of the recurring crises. As a body of Liberal citizens we shall naturally seek a Liberal solution, and the foregoing suggestions (for which no originality is claimed) are inspired by the Liberal point of view. They apply to the industrial sphere principles which have been tried and proved in the political sphere, both in the central and the local government. Apart from State acquisition of the minerals, about which there can surely be no question, these suggestions merely develop tendencies and organisations already existing within the industry. They involve no leap in the dark, such as has been attributed by some to nationalisation of the whole industry, and they provide for great flexibility and experimentation. The fact that the official spokesmen of neither miners nor colliery-owners may like them need not deter us. They have had numerous opportunities of settling the problem amongst themselves, but the “die-hards” in both camps have always prevented it. It is time that the general public outside the industry took the matter in hand and propounded a solution likely to be acceptable to the vast body of sensible and central feeling within the industry.
THE LAND QUESTION
By A.S. Comyns Carr
Member of Acquisition of Land Committee, 1918.
Mr. Comyns Carr said:—The Land Question I believe to be the most important subject in purely domestic politics to-day, as it was in 1914. At that date we were embarking, under the especial leadership of one who has now deserted us, upon a comprehensive campaign dealing with that question in all its aspects. The present Government has filled a large portion of the Statute Book with legislation bearing on the land; it is not the quantity we have to complain of, but the quality. In 1914 we had already achieved one signal victory in carrying against the House of Lords the Land Clauses of the Budget of 1909-10, and although many of us were never satisfied with the form which those clauses took, they were valuable both as a step in the direction of land taxation and for the machinery of valuation which they established. Mr. Lloyd George in his present alliance with the Tories has sunk so low as not only to repeal those clauses, but actually to refund to the landlords every penny which they have paid in taxation under them.
The campaign which was inaugurated in 1913 did not deal with the question of taxation only, and for my part, although I am an enthusiast on this branch of the subject, I have never thought that other aspects should be neglected. We put forward proposals for dealing with leases both in town and country. The present Government has carried and repealed again a series of statutes dealing with agriculture. Their original policy was to offer to the farmer guaranteed prices for his produce, if necessary at the expense of the tax-payer, and to the labourer guaranteed wages, to be fixed and enforced by Wages Boards. Before this policy was fully in operation it was repealed. The farmer got some cash compensation for his losses; the labourer has got nothing but voluntary Conciliation Boards, with no power to do more than pass pious resolutions. There has, however, survived this welter of contradictory legislation, a series of clauses which do confer upon the tenant farmer a substantial part of the rights in his dealings with his landlord for which we were agitating in 1914. The town lease-holder, on the other hand, has got nothing, and it is one of the first duties of the Liberal Party to provide him with security against the confiscation of his improvements and goodwill, to give him reasonable security of tenure, and to put an end once for all to the pestilent system of building leases which extends all over London and to about half the other towns of England. The evils of this system are especially to be found in those older parts of our great cities where the original leases are drawing to a close. In such cases a kind of blight appears to settle on whole neighbourhoods, and no improvements can be carried out by either party because the landlord cannot obtain possession, and the tenant has not, and is unable to obtain, a sufficient length of term to make it worth his while to risk his capital upon them.
Housing
The branch of the land question to which the Government called the greatest attention in their election promises was Housing. On this subject the Government have placed many pages of legislation on the Statute Book. One can only wish that the houses occupied as much space. They began by informing us, probably accurately, that up to the time of the Armistice there was an accumulated shortage of 500,000 houses; in pre-war days new working-class houses were required, and to a certain extent provided, although the shortage had then already begun, to an average number of 90,000 a year. According to the official figures in July last, 123,000 houses had been completed by Local Authorities and Public Utility Societies; 37,000 by private builders with Government subsidies; 36,000 were under construction, and as the Government have now limited the total scheme (thereby causing the resignation of Dr. Addison, its sponsor) there remain 17,000 to be built. This is the record of four years, so clearly the Government have not even succeeded in keeping pace with the normal annual demand, and the shortage has not been attacked, but actually accentuated.
The cause of the failure was mainly financial. Without attacking the roots of the evil in our land and rating system, and without attempting to control the output and supply of materials and building in the way in which munitions were controlled during the war, the Government brought forward gigantic schemes to be financed from the supposedly bottomless purse of the tax-payer. At the same time the demand for building materials and labour in every direction was at its maximum, and unfortunately both employers and employed in the building and allied industries took the fullest advantage of the position to force up prices without regard to the unfortunate people who wanted houses. The Trade Unions concerned seem to have overlooked the fact that if wages were raised and output reduced houses would become so dear that their fellow-workmen who needed them could not attempt to pay the rents required, and the tax-payer would revolt against the burdens imposed upon him; thus the golden era for their own trade was bound to come to a rapid end, and, so far from employment being increased and prolonged, unemployment on a large scale was bound to result. With the Anti-Waste panic and the Geddes Axe, social reform was cut first, and, in their hurry to stop the provision of homes for heroes, the Government is indulging in such false economies as leaving derelict land acquired and laid out at enormous cost, even covering over excavations already made, and paying out to members of the building trade large sums in unemployment benefit, while the demand for the houses on which they might be employed is left wholly unsatisfied.
Land for Public Purposes
The Acquisition and Valuation of Land for the purpose of public improvements is a branch of the question to which a great deal of attention was drawn during and immediately after the war. The Government appointed a Committee, of which the present Solicitor-General was chairman, and which, in spite of a marked scarcity of advanced land reformers amongst its members, produced a series of remarkably unanimous and far-reaching recommendations. These recommendations dealt with four main topics:—
(a) Improvements in the machinery by which powers may be obtained by public and private bodies for the acquisition of land for improvements of a public character;
(b) Valuation of land which it is proposed to acquire;
(c) Fair adjustment as between these bodies and the owners of other land, both of claims by owners for damage done by the undertaking to other lands, and of claims by the promoting bodies for increased value given by their undertaking to other lands; and
(d) The application of these principles to the special subject of mining.
The Government in the Acquisition of Land Act, 1919, has adopted a great part of the Committee’s recommendations under the second head, and this Act has undoubtedly effected an enormous improvement in the prices paid by public bodies for land which they require, although, most unfortunately, the same immunity from the extortion of the land-owner and the land speculator has not been extended to private bodies such as railway companies who need land for the improvement of public services. Moreover, it has not attempted to bring the purchase price of land into any relation with its taxing valuation.
The whole of the rest of the Committee’s recommendations dealing with the other three points which I have mentioned, the Government has wholly ignored. Powers for public development can still only be obtained by the slow, costly and antiquated processes in vogue before the war; private owners of lands adjoining works of a public character are still in a position to put into their own pockets large increases in value due to public improvements to which they have contributed nothing, and which they may even have impeded; the development of minerals is still hampered by the veto of unreasonable owners, by the necessity of leaving unnecessary barriers between different properties, and by other obstacles which were dealt with in detail in the Committee’s report. An illustration of the importance of this aspect of the question was put before the Committee and has been emphasised by recent events. It was stated on behalf of the railway companies that they were prepared with schemes for the extension of their systems in various parts of the country, which would not only provide temporary employment for a large number of men on construction, and permanent employment to a smaller number on the working of the lines, but would also open up new residential and industrial districts, but that it was impossible for them to find the necessary funds unless they could have some guarantee that at least any loss upon the cost of construction would be charged upon the increased value of land in the new districts which would be created by the railway extensions. Remarkable instances were given of the way in which the value of land had been multiplied many-fold by the promotion of new railways, which, nevertheless, had never succeeded in paying a dividend to their shareholders, and the capital cost of which had been practically lost.
On the other hand, the Committee were assured that, given a charge on the increased value of land likely to be created, there would be no difficulty in obtaining the necessary funds without Government assistance. When the pressure of the unemployment problem became acute, and not before—and then it was, of course, too late—the Government turned their attention to this problem, and have guaranteed the interest upon new capital to be expended on a few of these railway extensions, but instead of charging the guarantee upon the increased value of land, they have charged it upon the pocket of the tax-payer. The most striking instance is that of the tube railway from Charing Cross to Golders Green, now being extended under Government guarantee to Edgware. Those who provided the original capital have never received any return upon their money, yet millions have been put into the pockets of the owners of what was undeveloped land now served by the line, and now that the extension is being carried out with the tax-payers’ guarantee, the land-owners will again reap the benefit untaxed.
The development of the natural resources of our country was one of the promises held out by Mr. Lloyd George to the electors in 1918. Schemes were ready, and are still in the official pigeon-holes, for the production of electricity on a very large scale both from water power and from coal, which would not only provide employment, but cheapen the cost of production in all our industries. France, Italy, and other countries are at this moment carrying out similar schemes whereby they will relieve themselves to a large extent from dependence on British coal. But here, four years of Coalition Government have left us practically where we were. In France, although in many respects her social system seems to me less enlightened than our own, the power of the land-owner to obstruct enterprise and development is by no means so great. Land Reform in this country is a necessary preliminary to the fulfilment of Mr. Lloyd George’s promises. Development at the public expense without such reforms will result chiefly in further burdens upon the tax-payer and further enrichment of the landowner.