CAB129-36 — Page 18

SECRET

C.P. (49) 152

16th July, 1949

TAMINAD

CABINET

Copy No. 31

MINERAL DEVELOPMENT

MEMORANDUM BY THE CHANCELLOR OF THE DUCHY OF LANCASTER

:

1. By a minute of the Prime Minister dated 10th May, 1949, a Mineral Development (Policy) Committee was appointed, under my chairmanship, "to examine the report of the Mineral Development Committee and to formulate policy proposals for consideration by the Cabinet.' The composition of the Committee is set out in M.D. (49) 1, a copy of which is annexed. The following is our report.

2. The Mineral Development Committee, whose report is attached, was presided over by Lord Westwood. Its members included six scientific and engineering experts, one accountant and one economist, in addition to the Chair- man himself and two M.P.s, one Labour and one Tory. It was, therefore, highly expert within its

only very slightly political.

Tory politician, all the members united in recommend ith the exception of the

:

the of

a wide range of minerals found in the United Kingdom. It is an interesting coincidence that the National Executive Committee of the Labour Party, without knowledge of the Westwood Report, in the statement "Labour Believes in Britain submitted to the last Annual Conference, declared that "we shall take a further step forward by placing all suitable minerals in public ownership."

3. We have held three meetings and, having heard Departmental views, we recommend that the main proposal of the Westwood Committee should be accepted. Legislation should be passed in the next Parliament to vest in the State the ownership of certain minerals, which might conveniently be named in a Schedule to the Bill, and this Schedule should be capable of being amended from time to time by Ministerial Order.

Nationalisation of Mineral Rights

4. The State should not take over the ownership of minerals of such common occurrence as chalk, clay and gravel, but the following, all of which were considered by the Westwood Committee, should be acquired.

(a) Metalliferous-Ores of Tin, Tungsten, Lead, Hæmatite iron ore,* Zinc. (b) Non-Metalliferous--Barytes, Barium Brines, Witherite, Fluorspar, China Clay, Ball Clay, Gypsum, Anhydrite, Salt, Fuller's Earth, Talc, Serpentine, Glass Sand, Potash.

Ministerial Responsibility

5. The Ministry of Fuel and Power Act, 1945, gives to the Minister of Fuel and Power "the general duty of securing the effective and co-ordinated develop- ment of coal, petroleum and other minerals." It would be natural, therefore, to make the Minister of Fuel and Power responsible for all nationalised minerals. Nor would such an arrangement necessarily affect the present production respon- sibilities of other Ministers. We have, however, invited the Government Organ- isation Committee to make an early report on this particular problem of Ministerial responsibility.

* Under theage indefill, all the companies at present worknager&of 662ore

will come under public ownership.

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2

Establishment of a Mineral Development Commission

Page As chestwood Committee points out-ageingisf6o its scientific and other knowledge, its opinion on this matter must carry great weight there has been grave neglect by past Governments and by private enterprise in the surveying, exploitation and economic working of our minerals. In order to secure the necessary drive and energetic action the Committee recommend that responsibility for development should be concentrated in a body specially created for this purpose. They recommend, and we support their recommendation, that a Mineral Development Commission should be established.

Powers of the Mineral Development Commission

7. The Commission should, in the words of the Westwood Committee, have general responsibility for the management on behalf of the nation of the property rights in minerals (other than coal and oil, which are already nationalised under the Ministry of Fuel and Power), and for fostering mineral discovery, develop- ment, efficient working and research. It would work in close association with the Department of Scientific and Industrial Research and the Geological Survey. We also recommend that, although as a general rule the Commission would not itself carry out the actual exploitation of minerals, it should have power to do so in special cases, subject to the approval of the Minister of Fuel and Power. We also recommend that the Commission should be empowered, in suitable cases, to own surface land above mineral deposits.

Compensation and Development Charges

8. All payments to private owners of minerals or mineral rights which may fall due to be made have already been provided for by the Town and Country Planning Act, 1947, and no further payments to these owners will be necessary as a consequence of the adoption of the Westwood Committee's proposals.

We have considered the question of the method by which development charges should be assessed and paid in respect of minerals worked under the authority of the Mineral Development Commission. Since this question is very technical, we have asked the Minister of Town and Country Planning to arrange for an official Committee to make recommendations.

Mining Taxation

9. The Westwood Committee recommend-

(1) that certain expenditure not now allowed as a charge against profits

should be so allowed;

that losses incurred in the early years of operation of a mining concern should be charged against the first profits available, with no limit on the period during which they can be carried forward.

We think that these are matters which should be considered by the Tucker Committee on the Taxation of Trading Profits.

10. The

Westwood

Westwood Committee made three special recommendations requiring early decisions :--

(a) North Yorkshire Potash Deposits

It clearly illustrates our ignorance of our own mineral wealth that it was not until 1944 that these apparently very rich deposits were discovered. Hitherto we have had to import all our potash, but there is now a prospect that, given the necessary action, we could meet nearly all our needs from our own resources. Two private firms, I.C.I. and Fisons, are now exploring these deposits with the encouragement of the Board of Trade. I.C.I. hope that after a further 1 to 2 years they will be able to put forward a comprehensive plan of development." This appears to us to be very slow progress, since substantial production would not begin until after such a plan had been prepared and initiated. The President of the Board of Trade, in consultation with the Ministry of Fuel and Power, is considering whether this work, so essential to the national interest could not be