DIEU DROIT COAL MINING INDUSTRY Explanatory Memorandum of the PRESENTED TO PARLIAMENT LONDON: PRINTED & PUBLISHED BY HIS MAJESTY'S STATIONERY OFFICE To be purchased directly from H.M. STATIONERY OFFICE at the following addresses: Adastral House, Kingsway, London, W.C.2; 28, Abingdon Street, London, S.W.1; York Street, Manchester; 1, St. Andrew's Crescent, Cardiff ; or 120, George Street, Edinburgh; or through any Bookseller 1925 Price 1d. Net. Cmd. 2548 Explanatory Memorandum of the IN the White Paper presented to Parliament on the 4th August it was stated that the subvention to the coal mining industry would take the form of payments by the Government to the colliery owners in each district, month by month, of the amounts (if any) by which their wages bill for that month at the minimum level of wages provided under the 1924 agreement might exceed what it would have been if wages had been calculated on the basis of the owners' own proposals, (subject to the limit of fifteen pence per ton on estimated profit as explained in that White Paper). For the purpose of calculating the rates of wages to be thus borne by the owners in any district in any month, the trading results are taken of three preceding months with an interval of one month; thus the results of April, May and June governed the rates of wages payable by the owners in August, those of May, June and July the rates payable by them in September and so on. The amount, therefore, that the Government has to pay in any month depends on two factors; (a) on the trading results of a preceding period, which, by determining the level of wages that the owners themselves must bear, defines the gap to be filled by subvention on each manshift worked, and (b) on the demand for coal during the month of payment, which (subject to variations between month and month in the number of normal working days) governs the volume of output in that month and therefore the number of manshifts for which payment has to be made. Neither factor can be estimated with confidence in advance; the first is not fully known until the beginning of the month of payment, the second not until after its close. At the time when the original estimate was submitted the trading results were known of only three of the thirteen months (April 1925-April 1926) in respect of which subvention has to be calculated or paid. On the basis of the latest (and worst) of these three months (June) it was estimated that the cost would be £24,000,000, but it was pointed out that this basis was probably too unfavourable in that a seasonal recovery in the demand for household coal might be expected during the winter, and too favourable in that export prices were likely to fall still further. The latter expectation was quickly realised. The export market which had been steadily on the down grade during the year, received a temporary stimulus in July from the fear of a stoppage. When this was removed it collapsed, and the trading results of the month of August were substantially worse even than those of June. September a slight recovery from this low level set in, and is still maintained. The seasonal recovery in the house coal trade set in later than usual, and has not yet operated to relieve subvention. In Up to now, therefore, the gap to be filled by subvention has been calculated on past periods of steadily worsening trade, and has been paid in a period of steadily improving trade. Consequently its amount has shown an increase month by month, except for November, when the smaller number of working days as compared with October temporarily stayed the increase. For the month of December, the dropping out of the comparatively favourable results of July will cause a further sharp rise, and up to the end of the calendar year it is estimated that the cost will be, in round figures, £11,900,000. The details are as shown overleaf. After December, August will drop out of the period of calculation, and the subsequent improvement in trade should operate to reduce the amount. The subvention for January will be calculated on the results of September, October and November. The results of November are not yet known, but, on the assumption that those of October represent the average of the three, the cost in January (based on an estimate of output which must necessarily be purely speculative) will be about £2,600,000. The cost for February and March can only be conjectural, but if, on the one hand, the present recovery in trade is maintained through December and January and, on the other hand, the number of manshifts worked in the last two months of the financial year is not abnormally great, £4,500,000 should be sufficient to cover it. The Government have therefore decided to ask for a further £9,000,000, making £19,000,000 in all so far as the present financial year is concerned. RETURN to an Order of the Honourable The House of :- RETURN "setting forth the following Particulars in relation to Mines Department July 30, 1925. } G. R. LANE FOX (Col. Lane Fox) Ordered, by The House of Commons, to be Printed, LONDON: PRINTED & PUBLISHED BY HIS MAJESTY'S STATIONERY OFFICE. or 120, George Street, Edinburgh; or through any Bookseller. 1925 Price 3d. net. |