REPORT THE NATION’S

THE POLICIES now being pursued by the National Coal and instead with greatly increased capital liabilities.
Board in the coalfields are fraught with danger, both for On the other hand, holding down coal prices delayed
the coal industry and the national economy. They stem the conversion of British industry to efficient fuel using
from the government’s fuel and power policy, which in equipment. This changeover could have been hastened
the name of ‘competition’ produces a tangle of con- in the early 1950’s, using the stick of higher coal prices
flicting and unco-ordinated decisions. One thread runs to the inefficient, and the carrot of tax allowances on
through all. The oil companies benefit. Oil-coal ‘compe- new equipment. Industry would then have used coal,
tition’ in particular is a game played with loaded dice but used it more efficiently. Instead the changeover has
(e.g. the oil companies may discriminate; coal cannot). been delayed until aggressive selling of fuel oil, now
The coal industry’s situation is a complex one and relatively cheaper, uncertainties as to the impact of the
requires detailed analysis. The impact on the national Clean Air Act, and more attention to production
economy is by contrast starkly obvious. By the mid- costs in the years of deflation, have combined to
1960’s, total fuel consumption in Britain will be rising precipitate the installation of modern oil-burning
past 300 million tons of ‘coal equivalent’ p.a. If current equipment.
policies in the coal industry are persisted in, it is At the same time, the railways have swung away
unlikely that the coal industry will be able to supply from steam, not to electrification but to diesels. In
more than 200 million tons of coal, even if that much electricity generation, the decision that was taken, in
can be sold (of which there is no guarantee) in face of face of the coal shortages of the years 1954–55, to
deliberate under-cutting of prices by oil. Atomic convert a number of power stations to oil burning,
energy will provide scarcely 20 million tons of coal led to a sizeable jump in oil-use only by 1958, when
equivalent p.a., secured at the expense of an extremely oil displaced 4 million tons of coal, and when—
costly programme of power station construction. ironically—the coal shortage had disappeared. The
The fuel and power ‘gap’ will be filled by oil. contraction in demand for coal was reinforced by the
The additional cost of oil imports (net) at such a level effect of the long drawn out stagnation of industrial
of consumption would already be about £200 million production. Meanwhile, oil imports rose 15 per cent
p.a. more than in the late 1950’s, and increasing rapidly. between 1956 and 1958 despite the recession. In the
This is an amount of the same order as the balance of first three quarters of 1959 they were over 20 per cent
payments surpluses of recent years. Yet the government higher than in the first three quarters of 1958.
that contemplates this situation without concern, At the same time the programme of major capital
is the same one that argues the need for a balance of investment in coal (so unwisely delayed for five years
payments surplus of £450 million p.a., particularly to after nationalisation) has begun to yield results. Year
allow scope for investment and assistance abroad. When, after year in the 1950’s, coal output and productivity
in a few years’ time, the government explains that our stagnated (inevitably, given the time-lags in com-
economy cannot ‘afford’ to find capital on a scale pleting development projects), only for productivity to
sufficient to help under-developed countries, that our improve rapidly just when market demand was trans-
balance of payments position ‘unfortunately’ does not formed. The National Coal Board’s steps to curb output
make this possible, the rapid increase in our dependence have been to a considerable extent offset by (and
on oil will almost certainly be the main reason. themselves part cause of) a rise in productivity of 6
Criticism of the National Coal Board’s current per cent in 1959 as compared with 1958. In 1958–59 all
policies would be one-sided without an explanation of the National Coal Board’s estimates of demand, of
the responsibility of Tory governments for the dilemma production and productivity went awry. Partly, this
of the coal industry. Past policies play their part. When showed itself in unintended increases in coal stocks.
coal was scarce in the early and mid 1950’s, the govern- Partly, it has led the National Coal Board, ever more
ment deliberately held down coal prices to a level which urgently, to pursue a reduction in manpower, to contract
never even made possible adequate provision for the industry far faster than is safe. Even from Revised
depreciation, (I argued the case against this policy Plan for Coal, which glosses over the real problems where
three years ago in the New Statesman, January 19, 1957, it can, it is clear that this reduction in output now
Policy for Coal). The arrangement by which the has precedence both over reduction of current costs
Minister did this is known as a ‘Gentleman’s Agree- of production and over longer run maintenance of cap-
ment’, presumably because it rests on no statutory acity. “In 1960 and 1961 it is probable that some pits
authority nor is the Minister accountable to Parliament now working double-shift will be put on to single-shift.
for what are in fact his decisions. This meant, on the At other pits, the number of faces being worked may have
one hand, that the National Coal Board emerged from to be temporarily reduced. Measures such as these are
a decade of coal shortages without any financial reserves, often expensive, and there may well be difficulties when
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COAL • • • John Hughes
it becomes necessary to step up production” (p. 13). environment they have created in the coal industry
“Difficulties” is too mild a word. (insecurity, tension, and depression—an industry that
The National Coal Board, determined to bring output ‘cannot afford’ to reduce the working day to what it
in 1960–61 down well below the level of demand so as was before the General Strike), they can attract and
to secure a rapid liquidation of stocks of coal, has made hold enough younger men in highly prosperous manu-
no attempt to offset by recruitment 1959’s abnormally facturing areas.
heavy wastage of mining manpower. In the first nine The damage done to the capacity, and human poten-
months of 1959 the National Coal Board recruited only tial, of the industry will at best take some years to
21,000; the wastage from the industry in the same undo. At worst the situation may be concealed by the
period was 57,000, a rate significantly higher than in continued pressure of oil competition as the oil com-
1958, even allowing for compulsory retirement of men panies push fuel oil sales at whatever price is required to
over 65. make permanent the coal industry’s reduction in
The National Coal Board is confronted simultan- capacity. It is in their interest, without overmuch
eously by a series problem of redundancy, and a serious regard for current profit margins on fuel oil, to achieve a
problem of labour shortages. The coalfields where the reduction in size of the coal industry that commits our
biggest permanent fall in manpower is intended are all economy for a decade to the whims of the oil companies.
characterised by male unemployment rates distinctly For instance, power stations were changed to oil for
higher than the rest of Britain. Here the National Coal fear of coal shortage; now the oil is offered at a price the
Board will face (or create) a serious and persistent electricity authority finds ‘compares favourably’ with
problem of redundancy especially among the older coal. In 1960–61 the oil used will be equivalent to 7½
mineworkers. The main coalfields where output is million tons of coal a year. And after that? A reversal
planned to rise (E. and W. Midlands, Yorkshire) are all of present policy here would be of material assistance
characterised by very low unemployment rates—they to coal. Essentially, this is a political responsibility.
are the areas where the industrial boom of the early The prospect may look grim, but the government’s
1960’s will be at its most hectic; here men will be bid whole position on fuel and power is vulnerable.
away by high-wage industries. In the W. Midland in To argue that one must no interfere in a beneficient
process of competition is hardly adequate when it is the
recent years 15 per cent of the miners have left the use of our only great indigenous raw material that is at
industry each year, in Yorkshire nearly 10 per cent. stake. The ‘economic’ pit closures already under-
Moreover, the policy of reducing the number of miners taken or projected represent a permanent loss of about
by ‘natural wastage’ seriously worsens the age structure. 100 million tons of coal reserves. Are we so sure of our
The older men stay, the younger go and are not replaced. future needs that we can be so prodigal? Again, it is
National Coal Board data for 1957 and 1958 show that surely odd to pursue a ‘policy’ regardless of the import
less than 4 per cent of the 41–60 age range leave the saving from coal use, in the same economy that provides
industry each year; this compares with 17 per cent p.a. over £200 million a year to agriculture in subsidies for
of the under-21’s, and over 12 per cent p.a. for those reasons which have no economic rationale other than
aged 21–30. Yet all the emphasis of technical change in import saving (and, one might add, not much of that).
the pits is to make it more difficult to find a place for the It is strange to argue that the temporarily lowest-cost
older miner. supply of fuel must be the decisive consideration as
In the last two years the National Coal Board has between coal and oil, when this is evidently not the
offered the working miner—in addition to the insecurity basis for policy in the case of atomic energy. The
inherent in his work—a harsher industrial discipline Economist estimated recently (May 9, 1959) that
and evironment, and a distinct possibility of the scrap- “nuclear power stations coming in during the next
heap in later middle age (the improved agreement on decade are going to produce electricity costing 20 per
redundancy pay is a recognition of that, rather than a cent more than that from the best type of thermal
real offset to it). The damage to human relations in the station.” For the coal industry it is a case of heads you
industry may well be permanent; one cannot but be win, tails I lose.
impressed at the renewed emphasis of the miner that The urgent task for the Labour Party and the Trade
“no son of mine. . . .” Unions is to work out a detailed and constructive fuel
One thing is certain, the manpower and production and power policy, and to put it across, as a challenge to
estimates for the mid-1960’s set out in Revised Plan for the government’s preference for primaeval chaos in the
Coal have no basis in reality. As reasoned estimates at operation of our basic industries. The discussion on
coalfield level they simply do not exist at all. The nationalisation that has achieved so little as yet might
National Coal Board should not imagine that, with the take this crying need as a starting point.

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