Coal Industry (Hansard, 13 June 2002)

§ 2. Paddy Tipping (Sherwood)
What estimate she has made of the amount of coal produced in the UK during the last financial year. [58216]

§ The Secretary of State for Trade and Industry (Ms Patricia Hewitt)
The UK coal industry produced a total of 32.8 million tonnes, including slurry, in the last financial year. Deep mines produced 18.1 million tonnes and opencast sites produced 14.2 million tonnes.

§ Paddy Tipping
Does the Secretary of State agree that the current coal aid operating scheme has helped to sustain that level of production? She will know that the scheme finishes on 23 July. Will she outline the very welcome new framework agreed only last week by the EU, and does she propose any measures to link the two schemes—the one that finishes on 23 July and the new one that will come into effect in 2003?

§ Ms Hewitt
I entirely agree with my hon. Friend about the enormous help that the existing coal aid scheme has given to enable pits to survive the difficult price and trading conditions that existed between 1999 and last year. I am also delighted that last week at the Energy Council we agreed a new framework for support for the coal industry, including a new framework for investment aid—something that my hon. Friend has been pushing for and for which we argued strongly. We are urgently considering how to take advantage of that new framework in order to ensure the future survival and success of our coal industry.

§ Adam Price (East Carmarthen and Dinefwr)
The Secretary of State may be aware that the management of Betws colliery in my constituency are meeting her officials this afternoon to inform them of imminent mass redundancies at Betws colliery in the absence of continued support after 23 July. Can she confirm that the option of extending the existing scheme until the end of the year is still under consideration, and that Ministers will meet the management at Betws before any final decision is taken?

§ Ms Hewitt
My hon. Friend the Minister for Energy and Construction is himself meeting the management and work force at Betws colliery shortly. That is in addition to the meetings with officials that are already taking place. I must stress to the hon. Gentleman that Betws colliery has already received nearly £3 million in coal operating aid which, under the terms of the operating aid scheme, was granted on the understanding and condition that the mine, like other mines, was viable beyond July 2002. Of course we are looking at all the options and we will discuss the issue with management before final decisions are made.

§ Mr. Dennis Skinner (Bolsover)
Is my right hon. Friend aware that there will be a continuing problem with the coal industry in providing money that, in some ways, finishes up in the back pocket of the owners? We decided 984 in respect of Railtrack, some time ago, that we should not continue to pour public money into the pockets of the shareholders who were making a fortune out of it. Would it not make a lot more sense when we save the coal industry—or the remnants of the Tory operations of the past 18 years—to take it back into public ownership? We could buy the shares for a song; we would not be putting money into the pockets of the shareholders; and the chances of survival would be much greater than if we leave the industry to people who are concerned only about themselves.

§ Ms Hewitt
I am sorry to disappoint my hon. Friend by saying that renationalisation of the remaining pits is not actually on the Government's agenda, but he makes a very important point about the danger, with some forms of aid, of subsidising companies rather than ensuring the future of the work force. There are difficult decisions to be made, especially in the case of those pits where geology makes it impossible for the pit to have a viable economic future. We are working closely with the industry and its work force to deal with those situations.

§ Richard Ottaway (Croydon, South)
Does the Secretary of State agree that the net effect of the EU Council meeting and the new framework announced recently is that the Germans can subsidise their coal industry, in effect, by billions until 2010, which will result in subsidised coal and electricity coming into this country, affecting our own producers and suppliers?

§ Ms Hewitt
No. The Germans certainly pour a great deal of public money into their coal industry but none of that subsidised coal is exported, and we have worked closely with the Commission to ensure that there is no distortion that would undercut our own coal industry.

§ Mr. Michael Clapham (Barnsley, West and Penistone)
I heard my right hon. Friend's reply to my hon. Friend the Member for Bolsover (Mr. Skinner), but may I point out that Tower colliery, which is owned by the men, is more successful? Within the framework for new aid, will my right hon. Friend consider the involvement of the Coal Authority so that proper direction can be given to the investment that will follow the new aid scheme?

§ Ms Hewitt
My hon. Friend makes a very important point about the success of Tower colliery. Of course we will consider the point he raises in deciding what kind of investment aid support we may be able to put in place under the new framework that we have successfully negotiated.