§ The Minister of Power (Mr. Richard Marsh) rose—
§ Mr. John Peyton (Yeovil)
On a point of order.
I rise to ask, Mr. Speaker, whether there are any circumstances under which you would be disposed to accept a Motion for the Adjournment of the House.
I ask on these grounds. We are led to believe that an important statement—some may think it overdue—on fuel policy is to be made by the Minister of Power. The benches opposite, as you will observe, are filled by hon. Members representing mining constituencies. They have important points to make on behalf of their constituents—a rare opportunity for them.
The Leader of the House has knowingly and unnecessarily inflicted upon you, upon the staff of the House and upon many hon. Members the virtual certainty of an all-night sitting. I wonder whether there is any limit to the conduct of the right hon. Gentleman. I said the other day that his brutal incursions—
§ Mr. Peyton
I shall be very brief.
The right hon. Gentleman's incursions into the affairs of the House of Commons have been more brutal than anything that has happened since the Goths and Vandals raided the Senate of Rome. I ask you whether this is not a gross abuse of the procedure of the House on a very important issue.
§ Mr. Speaker
Order. I have been addressed on a point of order. I am sure that the last thing that any hon. Member would wish to do is to inveigle Mr. Speaker into pronouncements which would support one side of the House or the other. The Order Paper has been 1860 arranged. Mr. Speaker will follow the Order Paper. Mr. Marsh.
§ Several Hon. Members rose—
§ Mr. Speaker
Order. I can be addressed on a point of order by only one right hon. or hon. Member at any one time. Mr. Shinwell.
§ Mr. Shinwell
The point of order I wish to raise with you, Sir, is of a rather different kind. It has been stated today—it may be regarded merely as a rumour—that on the Order which is about to be discussed, which may affect the whole future of the coal industry, it is not your intention to allow a wide-ranging debate and that right hon. and hon. Members are to be confined to very narrow limits in the debate.
As, in a few days' time, the House will go into recess, and as we have been promised for some considerable time a statement on the Government's fuel policy, I would like to know, Sir, whether, if we are to remain here during the night to debate the Order, you will allow latitude to hon. Members.
§ Mr. Speaker
This is probably the first time in history when Mr. Speaker has been asked about rumours as to the way in which he will conduct a debate. I assure the right hon. Gentleman that I will conduct the debate according to the rules of order. How far the latitude will extend is a matter I will have to decide from time to time. There is a limit to latitude as to longitude. Sir Gerald Nabarro.
§ Sir G. Nabarro
I am grateful to you, Mr. Speaker, I rose on a point of order at the same moment as my hon. Friend the Member for Yeovil (Mr. Peyton) and the right hon. Member for Easington (Mr. Shinwell). During the last few years, ever since nationalisation 20 years ago, we have regularly debated financial borrowing powers Orders. It has always been the ruling of the Chair that only the 1861 finances of the nationalised industry concerned may be debated within the compass of the Order under discussion.
I seek your guidance, Sir, because this is not a matter of rumour. For weeks past my hon. Friends and myself have been pressing the Minister of Power and the Leader of the House to tell us when the fuel and power policy statement would be made. We are now told that it is to be made this evening, within the confines of the Order.
§ Sir G. Nabarro
Manifestly, it will be impossible for any hon. Member, myself included, to remain in order if a general fuel and power policy statement is made at the outset of the debate within the narrow confines of the Order. I repeat that they are very narrow. They have been ruled to be exceedingly narrow by every occupant of the Chair since nationalisation in 1946. I repeat that, manifestly, it will be impossible for hon. Members to debate the Order without straying outside the grounds of order if, at the beginning of the debate, there is to be the promised fuel and power policy statement.
Accordingly, Sir, will it be in order for me to raise further points of order during the speech of the Minister asking for guidance as to the way in which his statement relates itself to the very narrow Order before the House tonight?
§ Mr. Speaker
Obviously, it would be in order for the hon. Gentleman to raise points of order at any moment. I understand that what he was trying to argue was that he would circumscribe the Chair when it came to statements made by the Minister who is introducing the Order so that he might circumscribe himself and prevent himself from raising any points of wider application than he thought were necessary during the course of the debate.
I think that the House might let the Chair conduct the debate. We are on an Order which is to be moved by the Minister. If the Minister goes out of order, the Chair will call him to order. If the hon. Member for Worcestershire, South (Sir G. Nabarro) goes out of order, the Chair will call him to order. This is the function of the Chair. Mr. Marsh.
§ 10.25 p.m.
§ The Minister of Power (Mr. Richard Marsh)
I beg to move,That the Coal Industry (Borrowing Powers) Order 1967, a draft of which was laid before this House on 26th June, be approved.This Order increases the limit of borrowing for the coal industry to the £750 million maximum, as provided in the 1965 Act. It was estimated when that Act was passed that total borrowings would increase to about £750 million by March, 1971, but events since then have led to an increase in borrowing which makes this Order necessary. Indeed, this is not a routine Order. It is the result of pressures and changes which have emerged in relation to the coal mining industry.
I know that some of my right hon. and hon. Friends are very concerned indeed about the present position of the coal mining industry, and I am very glad to have this opportunity, on this Order, quite properly of commenting on the situation which gives rise to the need for this extension in the borrowing powers. This is a borrowing powers Order. It is about an additional £50 million borrowing capacity. It is not a debate, none the less, for shrivelled bookkeepers. It is an Order the implications of which affect the hopes and aspirations of hundreds and thousands of men and the futures of entire mining communities.
I intend to present a White Paper on Fuel Policy in the autumn, and there will be an opportunity for further discussion then. But to put this debate in context, and to explain why we need this particular borrowing power, it is essential to refer to some of the conclusions which have emerged from the Fuel Policy Review. The problem arises basically because we are moving from a two to a four fuel economy. We need to use all four of them to the best advantage of the nation as a whole.
This means taking account of the real cost to the economy of the different possible options open to us, choosing the pattern which will give us the cheapest fuel supplies in terms of real costs, security of supply, technical advance, social considerations and the balance of payments. These are factors which very much concern the coal mining industry, 1863 and this Order and the need for this additional borrowing are crucial to this problem.
Coal is not an industry which is standing still. The future of this industry, despite the present financial and physical difficulties, will see further technological developments which will take the industry further along the road towards being the highly capitalised, streamlined industry needed in this modern age. Of course, physically there is plenty of fuel of all types available, and there is no reason to doubt that this will be so for the foreseeable future. The question is not, therefore, whether Britain's energy needs can be met; the question is how we meet them, and the rôle which the coal mining industry plays in this context.
North Sea gas and nuclear power, like coal, are secure in the sense that their availability in peace-time is not liable to be affected by action taken in other countries. Supplies of oil, like those of most other advanced industrial countries, as hon. Members will have noticed, run the risk of interruption from time to time. None the less, we have to use oil for many purposes. It is very useful for others, and we have to strike a balance between these needs and the risk of interruption. The basic point here is that oil is not scarce. There is more than enough to meet our needs.
It is frequently and fairly argued that there are no direct foreign exchange costs associated with coal, but there must be a limit to the costs that it is sensible to incur to protect coal on balance of payments grounds, and for the longer term it may be that something less than the present degree of protection is justified.
Our balance of payments position can suffer, also, if our energy costs make exports too expensive to sell. We used to have an advantage compared with our major competitors in Western Europe. This has been lost. The arrival of natural gas and nuclear power gives us a good chance to secure the right balance in our policy measures while at the same time getting energy at lower costs.
The North Sea, for example, is capable of providing as much as 2,000 million cu. ft. of gas a day by 1970 or soon after, rising to about 3,000 million c.f.d. within 1864 a few years of that. Our policy is to aim for a rapid build-up in absorption. This will keep down energy costs and, to the extent that gas is used rather than oil, save foreign exchange. We shall be using this gas in four ways: in reforming plants to make town gas; by conversion of whole areas to accept the supply of natural gas; in the supply of gas to premium industrial users and in supply—this is of particular interest to the coal mining industry—to bulk industrial consumers.
The advantage of the use of natural gas as a premium fuel is clear. In the bulk industrial market, the potential savings are lower, and some coal as well as oil would be likely to be displaced. But, to get this rapid build-up, the gas industry has to penetrate this market to some extent, though by far the greater part of the natural gas will go to the premium market rather than the bulk industrial market. The timing of the build-up is difficult to forecast precisely, but we expect it by 1971 to be supplying about one-twelfth of our total energy needs, and by the middle of the decade we should have doubled this.
The other problem affecting the coal mining industry, the other factor which has caused us to look at the finances of the coal mining industry, is the second new source of energy, nuclear power. I shall spend very little time on it, but it is essential to mention it because it is such a big factor so far as coal is concerned. Britain leads the field with nuclear power, and, of course, it has been more costly than an equivalent amount of conventional generation. But the first programme is now nearly complete, and it would be economic madness to lose the lead for which we have paid so highly so far. It is worth noting that Sizewell, for instance, is competitive with the expected generation costs at comparable coal-fired stations such as Tilbury B, due to be commissioned this year.
The A.G.R. makes nuclear power fully competitive with the best conventional power stations. Taking cautious assumptions as to life and load factors, A.G.R. stations now building under the second nuclear programme to come into service in the 1970s will generate more cheaply than the best contemporary coal-fired station now being built. The payoff from advances in nuclear technology 1865 will not stop there. There is every prospect of further cost reductions from the A.G.R., and further ahead there lies the promise of the fast breeder reactor.
It is well known that the Coal Board, which is very much affected by this argument, has raised the question of the famous 0.56d. per unit which has been quoted—out of context, I must say—as the current estimate of the generating costs of Dungeness B. That figure comes from a confidential report and was arrived at by including all the most pessimistic assumptions solely for the purpose of comparison with longer-term estimates.
§ Mr. Marsh
Will the hon. Gentleman let me complete this argument? Many hon. Members on both sides want to speak, and I should like to develop this point, if the hon. Gentleman will forgive me.
On current C.E.G.B. ground rules, which some people regard as too cautious, the estimated cost of Dungeness B is 0.525d. per unit, and that includes a royalty figure of 0£014d. per unit.
In view of the confusion which has been created over the issue, I have decided to present this report in total, together with my observations, to the Select Committee on Science and Technology.
I make this further point on the question of nuclear costs as compared with the costs of coal generation, which, of course, is crucial to the argument. I have consulted the A.E.A., the C.E.G.B. and the Ministry's Chief Scientist's Division. The advice from these three totally different angles was unanimous. Obviously, they could all be wrong—[An HON. MEMBER: "Hear, hear"] This is a possibility. I put it no higher. If they are wrong, so are the nuclear scientists of every industrial nation in the world which is at present looking at nuclear generation. It is possible that they are all wrong. As a non-technical Minister, I can only say that in my judgment this seems highly unlikely.
§ Mr. Michael McGuire (Ince)
I am grateful to my right hon. Friend for giving way. I would not rely too much on 1866 the inference he is making of the scientists' infallibility, because they were proved wrong 10 years ago.
§ Mr. Marsh
I understand my hon. Friend's point. I am not suggesting that they are infallible. [Interruption.] Let me answer the question, because that makes the debate easier to understand. My hon. Friend's point is that 10 years ago the first Magnox programme was very expensive. It is not without significance that the people who challenged it were the C.E.G.B.'s nuclear scientists.
If the critics of the figure are right, all the nuclear scientists of the C.E.G.B. are wrong, the nuclear scientists of the Ministry of Power are wrong, and nuclear scientists in other countries and concerned with other power stations are also wrong. This is a possibility, but it is unlikely.
§ Sir G. Nabarro
To underline the possibility, the point I want the Minister to deal with now is the fact that Lord Robens, who occupies a powerful position as Chairman of the National Coal Board, told the annual conference of the National Union of Mineworkers at East-bourne on 6th July, and then wrote in the Financial Times of Thursday, 13th July, that the nuclear scientists were wrong and that he, Lord Robens, and the coal-mining hon. Members opposite, including particularly the right hon. Member for Easington (Mr. Shinwell), were right. Therefore, we have some reason to doubt the conclusion of the Minister. I prefer Lord Robens to the Minister.
§ Mr. Marsh
The hon. Gentleman would not expect me to pass comment on his particular choice. But I think that in this correspondence the hon. Member for Orpington (Mr. Lubbock) is now locked in literary battle with the Chairman of the National Coal Board, and it would not be for me to intervene.
Any forward estimating necessarily entails judgments, but the broad prospects are beyond all reasonable dispute in this. To get coal into perspective, it is worth 1867 remembering that about 20,000 megawatts of coal-fired plant are under construction at the moment. We are talking as if we are winding up the coal industry, but that plant, which is under construction as of now, will be with us for another 30 years.
By 1975, the first and second nuclear power programmes together will amount to less than one-sixth of our total generating capacity. This should be kept in comparison. That is a relatively small proportion of the market and gives us a chance to take advantage of any especially favourable opportunities for coal which may arise.
Therefore, at the beginning of the 1970s nulear power and natural gas may together account for nearly one-eighth of our total needs, and by the mid-1970s as much as a quarter. Much of this will be taken up by the natural growth in energy demand, but there is clearly bound to be an effect on coal and oil if there are four sources of energy instead of two.
Coal and oil now meet 96 per cent. of our needs. There will probably be some slackening in the very rapid growth of recent years in the use of oil, but sectors where it is irreplaceable, such as transport and petrochemicals will continue to grow. Even allowing for the foreign exchange element, oil is cheap in real terms. The evidence is that even with a fuel oil tax of about 40 per cent., it can still compete with other fuels. [An HON. MEMBER: "If we can get it."] We are getting it, as can be seen.
The main issue, and the crucial industry, is coal. Despite great efforts, the industry is in difficulties. It must be remembered that in examining the outlook for coal we are not just looking at the prospects of an industry.
I return to the point that we are discussing, the futures and lives of entire communities.
Coal faces tremendous competitive pressures. It is sometimes said that we should distort the market. Of course we should. But, of course, we have rightly and deliberately distorted the market forces in favour of coal, but still it has lost ground year by year. There is a fuel oil tax of about 40 per cent., a total ban on all foreign imports of coal and 1868 very considerable discrimination against oil at power stations. These and other measures are intended to push up coal demand, but despite them it has continued to lose ground.
The one point that I want to make in this debate which I think is essential is that it is not that the Government are considering how they can increase the rundown in the coal mining industry. The sole problem is how to slow down the rundown in the industry.
§ Mr. McGuire rose—
§ Mr. Marsh
I am sure that a great many hon. Gentlemen want to speak in the debate, and if I get my speech over quickly they will have more chance of making their own.
The point that I am making is that, despite this rundown—and what we are trying to do is to slow down the rundown; we are certainly not trying to produce it—a decline in the market for coal is quite inevitable even with the continuation of all the present measures of protection. We cannot afford to deny ourselves the advantage of the cheap new fuels. To pay our way we have to export about one-fifth of the national output and our industries must have access to a cheap energy policy.
In 1966, the consumption and export of coal fell by 11 million tons, and in April, May and June of this year we were down to 163 million tons. Almost every main consumer group has been buying less and less coal. It is not an argument about the production of coal. It is an argument about the ability or otherwise to sell coal. It is not the experience of this country alone. It is the experience of the French, the Germans, the Belgians and the Dutch, who have all got similar problems, and some of them have even bigger difficulties than we have.
§ Mr. Shinwell
I am following with the greatest attention what my right hon. Friend is saying in his most interesting analysis. But what I am asking myself—and perhaps he can provide me with the answer because I cannot find it myself—is: if this is the position, what is he borrowing more money for?
§ Mr. Marsh
I will come to that. We are borrowing more money because one of the direct results of this is increased 1869 stocking as a result of the inability to sell the coal which is being produced, which will be running by the end of this year at a level of about 30 million tons. As my right hon. Friend knows very well, better than anybody else in the House probably, stocking coal in these figures is a highly expensive proposition. This is why the debate is directly relevant to this borrowing powers Order. I shall come on to that in a moment.
§ Mr. John Cronin (Loughborough)
Can my right hon. Friend explain why it is that in the United States and the Soviet Union a big increase in coal production is taking place?
§ Mr. Marsh
Yes, very simply. It is contained in the reason why we have a complete ban on American imports of coal into this country. American coal is very much cheaper than British coal. This has nothing to do with the men. It was once said by Lord Robens that the Americans do not mine coal; they quarry it. There is a great deal of truth in that. It is certainly very cheap coal.
It should be said that the total growth in demand for fuel seems likely to be slower during the next three or four years than in the recent past, partly because of the increased efficiency with which fuels like natural gas can be burnt and because of expected increases in the efficiency of generation at power stations.
The prospect is, therefore, one of increasing competition from other fuels and, for a few years only, a limited rise in fuel requirements. From supplying nearly a 60 per cent. of total energy last year, coal, given the further support I am proposing, may provide about half of our energy needs by 1970. This half is a significant proportion for one out of four fuels. Coal will remain of great importance for as far ahead as we can see and it is vital to increase productivity in the industry so that it can produce at a lower real cost.
We want as much coal as can be economically produced. But in taking steps to increase efficiency of the industry we have to maintain confidence and morale, otherwise is could become incapable of contributing economically to our fuel requirements. My hon. Friends from mining areas will be aware of that.
1870 The Coal Board believes that by 1970 productivity can be up by one-third from its 1966 level of 36.4 cwt. per manshift and in the 1970s they look to even greater increases. With the exploitation of new techniques being developed at colleries like Bevercotes, the Board looks to even greater advances. It is essential in the interests of the industry that we get this improved efficiency.
The first results of the review suggested a total market for coal in 1970 on present trends and this was a completely dispassionate appraisal—of something over 140 million tons. Further examination suggested that it might be higher, but, nevertheless, it remained, in my view, too low on both social and economic grounds. I am, therefore, proposing further support for coal, though limited in amount and in kind.
For over two years the electricity industry has been giving substantial temporary assistance to the coal industry by burning coal in parts of the system when it would have been cheaper for it to burn oil. The cost of this assistance has been borne by the consumers of electricity. As the fortunes of the electricity and coal industries have been linked in coal-fired power stations, this was not an unreasonable temporary arrangement. Now, however, I think that this support may need to be increased and I have asked the electricity industry, with possibly some support from the gas industry, to consume up to 6 million tons more coal a year in the period ending March, 1971. The aim of the support would be to try to hold the demand for coal by 1970 at around 155 million tons.
It is not reasonable for the burden of short-term assistance to coal to fall solely on consumers of electricity or gas. We have, therefore, decided to ask Parliament to provide for the cost to be met out of public funds. Details of the precise arrangements will be given when the necessary Bill is introduced next Session.
The proposal will also help in dealing with the immediate problem of rising coal stocks caused by the continued fall in demand. Undistributed stocks have risen by 7 million tons during the last six months and are expected to rise by several million tons more by the end of the year to about 30 million.
1871 I now turn to the economic, social and human consequences of the steep decline in the industry's manpower requirements.
§ Mr. Eric Lubbock (Orpington)
Can the Minister say how much coal he expects to be consumed in power stations in 1970, so that we can compare this with the energy policy White Paper?
§ Mr. Marsh
If the hon. Member will stop saying "Why" it will enable me to answer the question, and he might then stop saying "Why". The hon. Member for Orpington referred to the White Paper. What I am dealing with is the specific factors which arise out of this Order. If I were to go into the entire fuel policy it might take longer.
§ Sir G. Nabarro
What the right hon. Gentleman is proposing is a direct subsidy on electricity tariffs for the general range of industrial and domestic consumers. That is the proper definition. How much will it cost the taxpayer?
§ Mr. Edward M. Taylor (Glasgow, Cathcart) rose—
§ Mr. Marsh
This is a serious debate. Many hon. Members wish to speak.
I want now to turn to the social consequences of this position. Since I became Minister of Power I have realised 1872 that, if one was not aware before, one very rapidly becomes aware, when once involved, of the very real hardship which can and does occur in some areas where mining is the mainstay of community life. [HON. MEMBERS: "Hear, hear."] I say that at once. It would be pointless for anyone to seek to pretend that these hardships do not exist. Anyone dealing with them is only too well aware that, unhappily, they do exist.
The Government already have particular regard to colliery closures in their general assistance to less prosperous areas. When the regional employment premium was introduced, this year, the Government specifically had in mind that the continued rundown of the coal industry was a major factor calling for a further big step forward in the development areas. This will ensure that the disparities between the development areas and the rest of the country will steadily narrow over the next few years, despite the impact of colliery closures and other technological changes. Nevertheless, in some parts of these areas, closures raise serious problems which require a special effort, and all Departments concerned are now engaged in a co-ordinated drive on this problem.
There is also a very special problem for the older and partially disabled men for whom the pits have provided employment, but who will find it difficult to obtain employment elsewhere. We are, therefore, preparing a scheme whereby mineworkers who become redundant and have to leave the industry at or after the age of 55 will have their income supplemented by the Board for a period so that they can adjust themselves to their new circumstances. The scheme will also provide that, at the end of the period of adjustment, the men will receive their mineworkers' pension immediately without waiting for the normal pension age of 65.
I am also reviewing some of the present benefits payable by the Board and ranking for a Government contribution under the 1965 Act, in the light of new estimates of the numbers of men who will be leaving the industry or transferring to new jobs within the industry.
I have come to the conclusion that these benefits are so important that we must reduce obstacles to their payment to a minimum. At present, the Board 1873 pays the first £3.8 million a year of the cost of such benefits and split the rest with the Government, subject to a maximum of £30 million for the Government's share.
This arrangement has regard to the social obligations of any good employer and to the economic benefit to the industry of concentrating production and men. Nevertheless, it presupposes that the Board's revenue account can stand this charge without risk to coal prices and coal sales. I am examining this to see whether it still holds. If it does not, I shall seek to amend the 1965 Act to relieve the Board as far as necessary of the financial burden. I shall in any case ask Parliament to provide for the whole cost of the new benefit for elderly redundant miners on the lines I have described. These proposals are not just more protection for coal, but a measure of social justice and economic realism.
I come now to the use of primary fuel at power stations. The arrangements for securing additional coal use at power stations over the next few years supersede the present temporary measures whereby the C.E.G.B. gives coal preferential treatment in determining fuel use at existing stations. As a corollary to this and to the longer-term assessment, the C.E.G.B., in seeking my consent for new power stations, will in future base its choice of fuel on an economic assessment of the cheapest costs of generation. Let me emphasise that all fuels—coal equally with the others—will be considered by the Board on their merits.
There is a substantial amount of new coal-fired capacity coming into service over the next few years, and coal stations will form by far the greater part of the total installed capacity for many years. The electricity industry clearly has a continuing interest in the health of the coal industry, for it would bear increasingly the brunt of the effects of any increases in the costs of winning coal.
The interim limit of £700 million was intended to ensure that the House would have an opportunity of reviewing the affairs of the industry roughly half-way through the period for which the full borrowing provision was expected to last.
§ Mr. Lubbock
I am grateful to the right hon. Gentleman for giving way. He is very long-suffering. May I ask him for an assurance, in view of what he has said about looking at new power stations on their economic merits, that Heysham and Seaton Carew will not be transferred from the nuclear to the coal sector?
§ Mr. Marsh
They will be examined, as will any other applications, on their merits. I have not received them yet. When I do, I shall examine them in the light of what I have said.
As a result of developments which I have described, the industry faces a continuing borrowing problem, in particular to finance the coal stocks to which I have referred. It is partly because of this that it is necessary to ask the House for an extension of the Board's borrowing powers. In 1966–67, after the price increase which took effect from the beginning of that year, the Board earned a small surplus, but insufficient to provide full depreciation on a replacement cost basis. It is vital to the industry's future that the modernisation of the economic pits which will have a continuing life should not be held back for want of capital.
The greater complexity of modern equipment and the increasing mechanisation per man means that, despite the closure of collieries, investment in the industry must continue at a high level. In the light of these problems, and of the figures which I have given, I must warn the House that I expect to have to seek further borrowing powers early in the new Session.
Britain now uses rather under 300 million tons coal equivalent of energy a year. After making allowance for potential increases in the efficiency with which the different fuels are used, we can expect the total primary fuel requirement to rise to about 350 million tons by the mid-1970s. During this period, the pattern of our energy supply will be transferred by the rapid development of North Sea gas and nuclear power. Together, these new fuels will not only take up the natural increase in our energy needs but also meet a growing share of the total requirement. By the mid-1970s, they may 1875 together be supplying nearly one-quarter of our needs, or about 85 million tons coal equivalent.
By the mid-1970s, the uncertainties of forecasting increase, but I would expect, on present trends, given the uncertainties of forecasting this far ahead, coal sales of about 120 million tons. The figure of 80 million tons by 1980 has been mentioned. I want to make it clear that that was a working paper figure. I do not think that any of us would care to back figures that far ahead too heavily.
The continued contraction of the coal industry is an inescapable part of the changing pattern. To attempt to reverse this long-term trend would be grossly wasteful of resources, would mean adding quite considerably to industrial costs, and, in my view, would almost certainly fail. But coal will need help in making the transition to the smaller, more compact industry of the 1970s. With the measures that I have outlined and the co-operation of management and men, I believe that the transition can be accomplished smoothly.
It is not possible to reach a single, definitive set of answers to fuel policy problems. We shall certainly need to retain flexibility in the future to cope with factors that are at present uncertain and to ensure that, when decisions are needed, they are taken against as comprehensive and detailed a background as it is possible to produce. I believe that we are now developing the right machinery and the framework to do this job.
I apologise for having spoken at considerable length. The problem with which we are faced is a very serious one. It is one with big implications on the economy, on our balance of payments and, more important, on people. I do not think that it is possible to fix on a firm straight road which goes along passing certain mileposts on the way. What we are seeking to do is to find a framework to establish that which is happening, to see how far it is possible to distort that, and what the cost of the distortion is.
This is a very interim statement. There is a great deal more work to do, but I thought it right and proper on this occasion to give the House what information we have available.
§ 11 p.m.
§ Sir Keith Joseph (Leeds, North-East)
The Minister of Power, trying to help the House at this hour of the night, cantered through a very important speech, but he had no need to apologise for the length at which he spoke. He has an unusually packed, an unusually well informed and an unusually deeply concerned audience in the Chamber. There is a concentration of passion and knowledge. We all welcome the news that the Government propose to produce a White Paper on Fuel Policy in the autumn which, no doubt, we shall have the chance then to debate.
The Minister had a very difficult task tonight. Governments, of both parties, have for a number of years been presiding over the fairly rapid decline of the coal industry. I remember the speech of the Chancellor of the Duchy of Lancaster, which was generously acknowledged by my hon. Friend the Member for Yeovil (Mr. Peyton) speaking from this Box, in which the right hon. Gentleman, with all his background, spoke of the need to allow the industry to contract.
This is not a problem unique to this country. As the Minister said, all over Europe coal is on the defensive. I wish that, like the hon. Member for Loughborough (Mr. Cronin), I could point to America and hope for a miracle for coal in this country. America, Russia and Poland are seeing rising coal outputs and rising coal demand, but we, I think the Minister will agree, have thinner and deeper seams than thoe countries. While we can hope for a miracle, it would be wrong for either side of the House to count on it.
All we can say is that we on this side, as with hon. Members on the Government side, want the largest coal industry in this country that is competitive. That is what we want. We recognise that while the coal industry is finding its way down to that competitive size in which it can hold its own market in a competitive world, there is justification, socially and economically, in helping the contraction to come about with the least damage to people and to communities. That we recognise. All that we ask is that the Government shall not deny the people and industry cheap energy. We recognised in the Minister's speech this evening an attempt to reconcile both humanity and economics.
1877 I could pick detailed criticisms on detailed points and, no doubt, hon. Members, with their deep knowledge, will find much to criticise, but let us all recognise that, at least, we are dealing with formidably strong market forces and that our interests not only comprise the interests of the communities and people dependent for a living on coal, but comprise, also, the population as a whole, which needs cheap energy if we are to compete in the world and we are to have a decent standard of living.
Let us also remember that when coal, which has already slimmed much from the giant that it was, has slimmed down to a really competitive size, it will still be a giant industry with a considerable future, demanding all the talent and the dedication that it can obtain.
My only warning to the Minister, before I come to some comments and questions, is that, as he well knows, detailed plans and figures are apt quickly to be overtaken by events. I do not disagree with the orders of magnitude which the right hon. Gentleman used. We on this side do not have the equipment to criticise them in detail. They seem to me to recognise the forces of the market and to offset those forces by sufficient delaying action to allow the humane protection of the communities and people who are dependent on coal.
I now come to the Order and to some detailed comments. The Minister has explained that the large amount of extra money that he is seeking to allow the Coal Board to borrow is necessitated to a certain extent by the increase of stocks. As he well knows, however, stocks at the end of 1966 were 18 million tons. Are we to understand that the finances of the Coal Board have deteriorated so badly because of an increase in stocks from 18 million to 30 million tons?
I hope that the Parliamentary Secretary will explain why it was that as recently as late 1965 the right hon. Member for Newton (Mr. Frederick Lee), then the Minister of Power, predicted that the borrowing power of £750 million would suffice right the way through to 1971. How could he have predicted as recently as that that the Board's borrowing power would be adequate? Here we have the Minister asking the House to use the last tranche, the £50 million 1878 tranche, and warning us that early next Session he will seek further borrowing powers. Does this mean that the Board will go on increasing stocks? If so, we would like to hear what the size of these stocks is expected to be.
We on this side of the House—and I do not expect that there will be any disagreement about this—would like to pay our tribute to the successes which the coal industry has notched up in the last years. They have been considerable. Mechanisation is nearly universal. Output per man-shift has risen 40 per cent. since 1960, due partly to increased mechanisation, and partly to the shift to more productive pits. Technical development has been in part brilliant, particularly the self-moving supports, and the remotely operated long wall face equipment.
I understand that the Board has redeployed miners and their families with great success and humanity across the country. To all this we would like to pay our tribute. We understand that the rundown in management and staff—and here I refer to a report in the Financial Times of six months ago—has also been very competently carried out. We also recognise that the Chairman of the Board has spoken out pugnaciously to the industry about the importance of coal being competitive, and to the country about the importance of giving coal a chance to be competitive.
Having paid all those tributes, I would like to warn the Minister and the House of danger signals which now seem to be in sight. First, the maintenance of morale in an industry declining in market and size is a very delicate operation indeed. I know that the Minister and hon. Members appreciate this. It is true that the squeeze has apparently reversed the drain on manpower for the moment, but it is obviously very difficult to keep the balance of skills and management and ages apt for an efficient industry.
I understand that there are empty Coal Board houses beside profitable pits. I understand that profitable pits tend to be in areas where there is a choice of jobs, and that in these areas young men are hard to recruit, and school leavers particularly hard to get. I understand that in the East Midlands, the pride of the Board, hardly any school leavers can be 1879 obtained. On top of unbalanced wastage, the problem of absenteeism makes life particularly difficult for a coal industry which is seeking to be efficient.
What I want to warn the Minister is that the failure to staff the good pits may, even if the demand for coal goes up, endanger the cost objectives that we have for coal. This is why we on this side recognise that the rundown of the coal industry to its competitive core must be conducted in such a way as to retain the confidence and the morale of all concerned as much as possible.
§ Mr. Thomas Swain (Derbyshire, North-East)
I have been listening to what the right hon. Gentleman has been saying. If he saw a collier coming out of the pits, he would not know the difference between him and a black-and-white minstrel. I was wondering which Government fundamentally destroyed the morale of the men in the mining industry.
§ Sir K. Joseph
I spent only a week in a coalmine, in 1936, when I worked with the Quakers in a pit in Yorkshire, and I know from those few hours that the fewer people who have to face that arduous and dangerous life the better, provided that they have a choice of jobs. Surely we are all agreed on that. The hon. Gentleman sinks below the level of the debate in making party points of that order.
The Coal Board predicted as recently as 1965 that 100 million tons a year would be mined by remote control. Since the Bevercotes episode, what are the prospects of remote control mining spreading? I realise that it is appropriate only to some pits, but what are the prospects of the Board's prediction being fulfilled? The key factor in running down an industry is not only morale, but the quality of management. Without recruiting and holding good managers, the most efficient deployment of men and machines is not possible, in which case, bang go our hopes of reduced costs, on which coal's competitive prospects depend. The Prices and Incomes Board had some doubts about the industry's productive capacity at competitive prices, even if demand held up.
1880 There is an extra danger in diversification. We expect that most of the industry's diversification plans will lose money, which is bad enough, but just when top management should be giving all its attention to the delicate job of running down the industry to its competitive core it will tend to be diverted to the far easier and more entertaining occupation of bidding for other companies which seem to offer an easier way of making a living. I ask the Minister to be very cautious in allowing management to disperse its energies. We should like to know what the yield on capital criterion is for such investment. We know that the Coal Board is required to produce a certain yield on overall capital, but do not know whether the Minister imposes a certain standard on non-colliery investment.
The industry has the good coal seams to exploit, in the East and West Midlands and Yorkshire above all, and the techniques to exploit them, and can, therefore, provide cheap coal and hold its market if morale and confidence and management hold good, but there is still the problem of the isolated pits in South Wales, Scotland, Durham and other places, where the lives of the community tend to be totally dependent on coal.
I think that we would all agree that the fewer who are forced to earn a living in this way the better, provided that there is a choice of jobs for them. The Minister made two announcements of particular interest this evening, one about the special help to enable disabled men over 55 to retire and the other about extra help—no, that was the Government's only specific commitment on the social side. He explained that there was a Departmental review of help that should be given—
§ Sir K. Joseph
We recognise that retraining, rehousing and removing must form a great part of the Government's help to people who are denied a choice of jobs because there is no choice in the areas in which they live. We recognise 1881 that in some cases people may have to face moving if they are to have jobs. We recognise that that may not be popular in some areas, but we hope that the Government will co-ordinate all their activities to reduce the pains of this contraction.
If the N.C.B. can concentrate more and more of its output in profitable pits, the industry has a fine future, but it must reduce its costs. The Chairman of the Coal Board explained to the miners' conference at Eastbourne this month a number of ways in which costs could be reduced. He spoke not only of the shift to profitable pits, but of a relatively small shift of men from surface to face work and of a relatively small increase in machine utilisation. He spoke of these as bringing in the possibility of a really substantial cut in coal costs that would bring coal down to the target area of about 3¼d. a therm.
I would have liked, but for the primacy of cost, to have asked the Minister to have gone slower on opencast, but it would not be responsible to suggest that we can dispense with opencast. We get only 3 per cent. of our coal from opencast, against the American 40 per cent., but we recognise that land is never quite the same again after opencast mining and that there must be some areas where beauty must have priority over economics.
In coming to the huge question of competition, although oil, nuclear energy and gas loom large in miners' eyes, perhaps the most formidable danger that coal faces is the unbalanced loss of miners and managers and the unbalanced wastage coupled with increasing absenteeism. These can endanger the cost competitiveness of coal almost more than anything else.
We must recognise, as the Minister said, that oil is already penalised to protect coal. About £80 million is placed on the consumer and industry to reduce the speed of the rundown of coal. We must recognise that there is a total ban on imports of coal and that the coal preference has gone so far that the electricity authorities are straining at the leach to escape from the obligation to burn coal in places where they want to burn, say, gas in the summer and oil in the winter.
1882 It is for the Minister, with his knowledge and advice, to judge the pace at which morale and confidence can be maintained. The right hon. Gentleman is now asking the C.E.G.B. to accept more of the coal it no longer wants. I suggest that there must be a turn in this protection. My hon. Friends and I do not deny the need for some protection to ease the rundown, but if coal is to get to the target we all want to see—to the point when it can hold its own market in a competitive world—then, perhaps over a period of years, and by a number of stages, the protection should be whittled down so that, in due course, in the 'seventies, the industry can stand on its own feet, finding its markets from the product of its low-cost pits.
There are a number of questions about competitiveness which the Parliamentary Secretary should answer. When is a decision expected about the price of North Sea gas? What about Algerian methane? Hon. Members who represent coal mining areas are very ambivalent about the price of gas. They hope to see the price high enough not to comfort the oil companies, but not low enough to embarrass the Coal Board. The Government have to preside over a decision. I hope that it will be an agreed decision, and that the Minister will not have to act the part of Solomon. Would the Parliamentary Secretary tell us whether there is any truth in the rumours that AMOCO, the oil company partners of the Gas Council, are contemplating withdrawing three rigs from the North Sea because of frustration due to the lack of agreement on price?
Because of time, I shall not embark on the fascinating subject of nuclear power. I am sure that it will be raised from the other side of the Chambers. I would only say to hon. Members that however much, to use the classical phrase, they pick nits in the cost or estimated cost of nuclear power they must recognise that in America, where coal is very much cheaper than it is here, nuclear power has been adopted, not just by one, and a nationalised, industry, but by large numbers of independent utility groups in the interests of their consumers. Nuclear power will be a formidable supplier of energy, and we should be grateful for it, and it is to live with nuclear power that we all want coal to be much more competitive.
1883 Therefore, although we on this side do not like direct subsidy, and, therefore, do not like the Minister's preference for a direct subsidy in this case, we recognise that, left to the market, the coal industry would run down so fast that its ultimate capacity to provide, as we know it can provide, the cheap coal for our consumers and our industry would be jeopardised. We recognise that price is the key, and that the industry must be given the chance to contract down to the competitive low—cost coal with the minimum unhappiness for those communities and miners who happen to work in those isolated pits which, by ill chance, are the least competitive in their pricing.
We on this side, therefore, do not disagree with the main tenor of the Minister's statement, though we shall at different stages have a number of detailed points to make.
§ 11.22 p.m.
§ Mr. E. Shinwell (Easington)
No hon. or right hon. Gentleman can doubt for one moment the difficult task that faces my right hon. Friend. He has to reconcile conflicting elements of technological development, nuclear energy and modernisation facing an industry that has been gradually fading away and has been confronted throughout its whole history by innumerable problems. I want to preface what, I hope, will be a short speech by one or two observations.
The first is that I regret that a debate of this character—
§ Mr. Shinwell
I cast no aspersions on my right hon. Friend. Indeed, I shall not use this occasion to make a personal attack even on the Leader of the House, although sometimes I am sorely tempted. This is merely a digression, which is not 1884 altogether in order, but perhaps I may be allowed this latitude. The business of the House for some time has been managed not altogether too well. I am speaking very moderately. A vast volume of legislation has been forced through the House. That often happens—I have experienced it myself over the years—but it would have been to greater advantage for hon. Members who are deeply concerned about the condition of the coal industry and, in particular, its future, and also to the House itself, if we had had more ample time to debate this subject and if a debate of this important character had been preceded by a White Paper, or a document which set forth the pros and cons of all the arguments associated with fuel and power policy.
May I indulge in one warning? No offence meant.
§ Mr. Shinwell
I hope that no decision will be reached during the forthcoming Recess about a national fuel policy which deprives hon. Members on both sides of the House of an opportunity to express their opinions. It has happened before that decisions have been taken by a Government when the situation demands it in the opinion of the Government and hon. Members are not available to take part in a debate and to express their opinions. In particular, I hope that no firm decision will be taken about whether the proposed electricity power station at Seaton Carew will be based either on nuclear energy or on coal. It is a matter for very careful consideration of the price, cost of the site itself, and also social considerations.
This is, for me, a most distressing occasion, for more than one reason. I have represented two mining constituencies since I first came to the House in 1922. One was West Lothian, which at one time was almost exclusively a mining constituency. I think how it has been completely emasculated. Very little mining remains there now. Since 1935, I have represented Seaham Harbour, now Easington, perhaps the most progressive and prolific mining area remaining in the County of Durham. The pits on the coast are regarded as viable. Most of the pits in the Durham coalfield are no longer regarded as viable; they are losing money.
1885 There is another reason why I feel somewhat distressed. I had the privilege in 1946–47 of piloting through the House the Bill to nationalise the coal mining industry. I had been advocating it for 50 years or more and at last there was a glorious opportunity. I was exhiliarated. This was a remarkable occasion. I had a vision of an industry, progressive, up-to-date, modernised, with those employed in it below ground, on the surface and in the offices associated with the industry contented, well-paid, with the very best conditions made available to them.
My vision has not been realised. On the contrary, ever since nationalisation—I must be careful; I do not want the Opposition to make too much of it.
§ Mr. Shinwell
I know hon. Members opposite better than the hon. Gentleman who has just interjected knows them. I have had longer experience of them. They may make political capital of what I am about to say. The nationalisation of the mining industry has not worked out as I had loped it would. It is as simple as that. Therefore, I am a little distressed about it.
When I became Secretary for Mines, in the first Labour Government, one million men worked in the industry. On vesting day, there were nearly 700,000 men in the industry. Today, there are 400,000. My right hon. Friend referred frequently to the need for a slowdown. There has been far too rapid a reduction in the manpower on the number of pits available. Who is to blame for it? The Labour Government went out in 1951. The Conservatives came in. That was their opportunity. They cordially disliked nationalisation and had made their views well known to the House and to the country. Their dislike of the nationalised industries had been frequently repeated. This was their great opportunity. The pits had to pay regardless; never mind the social consequences, the pits had to pay. It has even been stated now in the House that the pits must be viable.
The right hon. Member for Leeds, North-East (Sir K. Joseph) made an interesting speech, as he usually does, but a t the end he shed a few crocodile tears about the industry and about what must 1886 happen in the 1970s. He said that it must pay its way. The Conservative Party's attitude is that everything must pay its way, as if private enterprise and private industry always paid their way. Look at the number of bankruptcies that occur and the number of industries that fall by the wayside. What happened in the motor car industry? Look at the position of the great oil industry at present because of a little fracas which has occurred in the Middle East. The Tories should not talk too much about the nationalised industries. However, this is perhaps a little too political and too partisan.
§ Mr. Shinwell
I do not want to encourage the hon. Gentleman. We want a serious debate.
My Right hon. Friend, in his very engaging and interesting analysis, dealt with these conflicting elements. It is impossible to make a sound judgment on the merits or demerits without sitting round a table, examining documents, listening to experts, and interrogating witnesses, over a period of time. How can we do so in the course of a debate?
I, like my right hon. Friend, have had the experience of being given advice by civil servants and by experts. It is no use complaining about civil servants in the House; it is improper. However, I cannot help reflecting on how often I was provided with wrong estimates. I remember that on one occasion I gave the House an estimate of electricity consumption, based on what the experts had told me. What did I know? My right hon. Friend said that he was no technical expert. I had even less technical knowledge than he has. However, I listened to the experts, only to be told a week afterwards that they had given me the wrong estimate. When I told the House, "I took the advice of my experts", how the Opposition laughed and jeered.
No Minister can escape by exposing his advisers. Therefore, when my right hon. Friend presented his analysis I could not help feeling that, after all, perhaps his advisers were wrong. It is as simple as that, or maybe as complex as that. He himself was not quite sure. 1887 On one point he said that perhaps they were wrong.
I am not fascinated by those people who predict what is to happen in the 1970s and the 1980s, when I consider what I predicted in 1946 and 1947 and I have more claim to be a prophet—I am not speaking in a monetary sense—than many hon. Members. I had to point out to the late Winston Churchill on one occasion, when he mentioned that his ancestor was the Duke of Marlborough, that I was a descendant of Moses. Yet, with all the knowledge that I possessed, and despite all my advisers, my predictions came to nothing. They evaporated into thin air.
That is the position. We have on one side Lord Robens, who also has his advisers. Lord Robens has come to the conclusion that coal can be made to pay and that there is every reason why it should be the basis of electricity generation on a large scale. That is his opinion. On the other hand, we have my right hon. Friend's nuclear advisers who take a contrary view. What do we do? I can tell hon. Members what we are expected to do. We are expected to do as the Government tell us. Is that not the position? Even if we are not quite certain ourselves, even if we consult other experts, at the end of the day we are always told that the Government are right, that Whitehall knows best. Sometimes I feel that they may be wrong.
I do not want to indulge in any kind of emotional outburst. I am not inclined to that sort of thing. But I was in Durham last Friday and Saturday. I listened to the murmurs—in fact, more than murmurs—of discontent from miners on all sides. We had the big day in Durham, the Miners' Gala, a most depressing event for the simple reason that there is throughout the whole of the coalfield there a sense of insecurity even in the best and most viable pits.
There is a very great danger. When my right hon. Friend talks about the future of the industry, about a slowdown, the phasing of the rundown and the rest of it, he tries his best to be optimistic. I can understand it. He has got humanity. He has got to do his job, but even in the Department he retains his 1888 humanity, although it is not always easy. But when he talks about this, he appears not to understand that in these measures there is insecurity and even the most viable pits will lose their men. That is the great danger.
I speak of Durham, but I read in the business section of The Times, which, as my right hon. Friend is aware, is read only by the top people, that in Derbyshire—my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) must be aware of this—and in Nottinghamshire the decline is coming. People are deeply concerned about possible pit closures there, too. It is a remarkable fact that, for some years now, the Coal Board—all credit to it for doing so—has done its best to transfer men from the rapidly declining parts of the coalfield down to Nottinghamshire, where the best seams are. I have a long acquaintance with the miners of Nottinghamshire—I have spoken in every part of the Notts coalfield—and I recall how often I have heard them boast about their 6 ft. seams, nothing like the 18 in. seams we have in Durham.
But now there is talk of closures. And what are the miners asking for? They are asking for alternative employment. Both my right hon. Friend and the right hon. Member for Leeds, North-East referred to this, and they spoke of retraining and the rest—all the jargon, if I may say so, which is regarded as an alternative to providing employment for men in the pits.
There are others who say—I have heard it said even in this House, on both sides—that it would be better to have no pits at all, not to have men going deep into the bowels of the earth to bring up coal, and to provide more congenial employment for them. It is all very well to talk like that. We cannot find the alternative employment. In the County of Durham, in Sunderland, there is 7 per cent. unemployment. In Horden, in my constituency, where we have the largest pit, unemployment is 5 per cent., almost twice the national average.
I give every credit to the Government for what they have attempted, to my right hon. Friends the President of the Board of Trade, the Minister of Labour and other Ministers, for advance factories, for 1889 light industry, for subsidies to shipbuilding. The previous Tory Government provided a subsidy for shipbuilding, too. All credit to those who are anxious to help. I recognise and appreciate what is done. But unemployment is rising, nevertheless. We shall not solve it by talking about nuclear energy. Indeed, modernisation does not appear to be a solution.
We have got to recognise the social consequences. What will happen? In his interesting speech opening the debate, my right hon. Friend gave an engaging analysis of the situation. If he made a speech like that to a group of miners who were insecure, many of them out of work and trying to find alternative employment, it would be above their heads. It would make no impact at all. We can talk as we like about modernisation, technological developments and advances of that kind, but the fellow round the corner is looking for a job. What are we going to do about it?
What about the palliatives of which my right hon. Friend spoke? There is one which the Coal Board and the National Union of Mineworkers could arrange out of their pension funds. There s a large sum of money there. They could increase the pensions available to miners. That would be something, and it could he done out of their pension Funds which, I understand, are invested very satisfactorily. But much more than that, much more than was suggested by my right hon. Friend, needs to be done.
In my view, the best thing to do would be to do everything possible to make the mining industry more competitive, so that it could remain as a viable industry. But, if it is not completely viable—I may not carry the whole House with me in this—it may be necessary, so as to retain the industry, to provide subsidies. Why are we worried about subsidies? The farmers on the opposite side of the House do not worry about the agricultural subsidies. The people of the North-East and elsewhere do not worry about the subsidies provided by the Conservative Government and this Government—the investment allowances and all the rest. From the standpoint of social considerations, they should not be neglected, certainly not by a Labour Government. It may be necessary to provide the funds required to maintain the industry.
1890 I issue this warning to my right hon. Friend—it is merely repetition, but I do not apologise for that: insecurity is rapidly developing and there is a remarkable momentum in insecurity. We may discover that even in the 1970s or 1980s 140 million tons of coal will not be required. Far from that figure, probably much less than 100 million tons will be required. When we reach that situation we need not talk about a viable mining industry. It is the Cinderella of industries now, and we should try to prevent that happening.
I wish that I had the complete remedy, but I must confess that I do not see one. I think that the rapid down-grading of the mining industry has gone too far, and it is very difficult to recover. With the help of the Coal Board, the Ministry of Power, the Government, and even with the support of right hon. Gentlemen opposite, who, I am certain, are as anxious as we are to help, I doubt whether it will recover. Therefore, at the end of the day we must have regard to the social consequences and bring to bear on the problem all the power and resources available to the Government of a social character to alleviate the conditions of those who are displaced from the industry, and mitigate the harsh details of unemployment and poverty.
That is all that I think it is possible to say, but I wish to add one thing to my right hon. Friend. If he proposes to ask the House or the country one day to consider a national fuel policy, relating various ingredients into a whole, I hope that he will consult the House first, and that he will precede any debate that may take place on this very important topic, by giving hon. Members all the information available on all sides, without any partisanship, and completely objectively. I think that we are entitled to expect that before a final decision is reached.
§ 11.48 p.m.
§ Mr. John Peyton (Yeovil)
The whole House knows how deeply the right hon. Member for Easington (Mr. Shinwell) feels on these matters. My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) can congratulate himself that the right hon. Gentleman spoke so kindly to him. It was a great tribute to my right hon. Friend's speech on this vexed and very difficult subject that someone with the past of the right 1891 hon. Gentleman—I say this with no disrespect to him—should speak so mildly of a political opponent's speech.
In your wisdom, Mr. Deputy Speaker, you permitted the right hon. Gentleman an excursion in which he commented briefly and politely—politely, in the circumstances—upon the recent conduct of business in the House. I find it a matter of regret that the Leader of the House, who has, as the right hon. Gentleman said so mildly, left a lot to be desired in his conduct of business, should have slunk away, displaying once again that discourtesy and arrogance which have characterised all his handling of the affairs of the House.
I do not know whether the Leader of the House is aware of the depth of feeling that he has caused. I recognise that it is not easy for back benchers on both sides of the House to unite against an unpopular Minister. But I do not believe that many Members in the capacity of Leader of the House have served it as ill as the present incumbent of that post. Tonight is a simply disgraceful example of his entire disregard for and lack of understanding of the strong feelings that many hon. Members have on a subject of this kind.
§ Mr. Cronin
I hope that before the the hon. Gentleman presses his criticisms too far, he will bear in mind the difficult situation that we are in tonight of having to debate this important subject so late is very largely due to obstruction by his right hon. and hon. Friends on other matters earlier.
§ Mr. Peyton
I was unaware that the hon. Member for Loughborough (Mr. Cronin) had been quite so frequent a visitor to our debates lately. We welcome his exceptional appearance here tonight. We rather doubt the merit of his judgment in these matters. No doubt his neighbour, his hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), has whispered a few words in his ear. However, he ought to know that always to listen to his hon. Friend the Member for Ebbw Vale could lead him astray.
Mr. Speaker, I hope that you will be as tolerant with me as you were with the 1892 right hon. Gentleman. I wish to outline some of the problems that affect the industry. The Minister was perfectly fair in the figures that he gave, such as the fact that stocks are up by 5 million tons on what they were last year or the figure that he gave of a 7 million ton increase during the last six months. This year's sales are down by nearly 8 million tons on last year, and production is down by nearly 3 million tons.
In these circumstances one has to ask: where is the market for coal in the future? However the Minister may protest, he is facing, as he knows very well, a desperately difficult situation. He knows that none of the measures to which he has referred—about which I shall have a word to say in a moment—will really touch the problem. There have, of course, been Conservative Governments and they must have their share of responsibility for this long-term problem, but I believe that the error has come in that we have not been willing to face the problem early enough, that the declining market for coal was not realised soon enough and least of all by those who are the most enthusiastic advocates of the coal industry.
The Minister said that, despite the protective measures, coal has continued to lose ground. I am certain that despite any further protective measures that will continue. We now have four measures of protection available for the industry. First, there is the ban on American exports. Secondly, there is the tax on fuel oil, which I regard as a great mistake, and certainly a mistake which should not be continued. Thirdly, there is the immense measure of capital subvention of the 1965 Act. Lastly, there is the measure which the Minister is now proposing, which, however he may dress it up, is a direct subsidy to the coal industry.
The right hon. Gentleman called it a subsidy. I very much doubt how far any industry which once receives the treatment of subsidies really benefits from it. I believe that subsidies are very apt to take the heart out of an industry and take its virility away.
The Minister frankly told the House what no one can challenge, that we in this country cannot possibly afford to deny ourselves the advantages of cheap fuels. I believe that we must all accept those words from the Minister. At the 1893 same time, there is a considerable dilemma that the country faces because a very large part of the electricity industry is tied to coal. This is a difficult question to answer, but had it been possible to drag the industry earlier out of its 19th century postures, particularly in the East Midlands, Yorkshire and the West Midlands, it may have been that the pay of the miners in those areas would have risen and the week that they were expected to work modified, and attempts made to make the industry attractive to more people. This did not happen and we are presented with the danger that if the morale of the industry goes there could be a serious collapse of production and power stations relying on coal might be deprived of their fuel.
Therefore, it behoves us all, on both sides, to speak with some caution about the coal industry where the livelihood of so many men, as the Minister rightly said, is so deeply concerned. We would do well to remember what a tremendously emotional industry this is. It is a contradictory one. Many people have said that no one wants to condemn men to living and working underground in conditions of dirt and danger beyond what is necessary. On the other hand, There is a strange contradiction when people who work in, say, the motor industry will not be endlessly discussing their work when they are having a drink in the evening. But the coal industry enters strangely into men's lives. This is a fact we do ill to ignore.
I believe that one of the worst services that the supporters of the industry can do today is to utter expressions of blind optimism. I wish to make it clear that those who repeatedly said in the past, despite the evidence to the contrary, that 200 million tons was a realistic target for the industry were far from helping the industry. They have concealed the real facts far too much and they have inhibited and hindered the industry in its real progress.
My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), with whom I rarely disagree, earlier expressed the opinion that he preferred the judgment of Lord Robens to that of the Minister. On this point I disagree with my hon. Friend. From all that the Minister has said tonight I greatly prefer the judgment of the right hon. Gentleman.
§ Sir G. Nabarro
The reason I made that statement is not far to seek, if my hon. Friend will bear with me for one moment. The Minister said this on 10th June, 1967, about the coal industry:We have had a rough time and now the future is very rosy.That was in the Financial Times of 12th June this year. What arrant tripe the Minister talks.
§ Mr. Peyton
I was interested to hear my hon. Friend's intervention. I did not actually see that quotation, so I hope that he will forgive me if I do not comment on it now.
I want to carry on with the point I was making and say how wise I think the Minister was to resist the blandishments of Lord Robens to set up an energy or power committee which would take over the Minister's job. I can only imagine that the proposal was put forward with the thought that Lord Robens would be wafted into the chair. I would like to make it clear that in the event of any such arrival taking place—and I do not wish to seem vain—the Minister would have my support, for what it is worth.
I have, I hope, been fair to the Minister about what he has said. But now I must come to something more critical of him. He spoke at quite a rate of knots and we were not given the benefit of a White Paper which would have made it easier to assess the value of the announcements he made.
As I understand, the electricity industry is now to consume more coal, with possibly some help from the gas industry, as the right hon. Gentleman put it. It might be all right to give that sort of answer to a question at a weekend meeting, off the cuff, without notice, but here, when moving an Order extending the borrowing powers of the coal industry, it is not right to say something in such a vague and uncooked condition as that. We should be told what is meant by "possibly some help from gas industry".
§ Mr. Marsh
There will be a White Paper. It will be printed in the autumn. I made an interim statement tonight. In the discussions held with the heads of nationalised industries, at the Selsdon Park Hotel, we were told that the electricity industry felt that it was able 1895 to increase its coal burning. So is the gas industry. But they have to look now in detail at where and how the gas industry can increase its coal burning, and this is a difficult job. We hope and expect that the gas industry will be able to increase its coal burning to 5 or 6 million tons.
§ Mr. Peyton
The right hon. Gentleman still has not really told us anything about the gas industry. As far as I understand, the gas industry was to go out of coal burning altogether by the mid-1970s. It is important to know some time from the right hon. Gentleman exactly how "some help possibly from the gas industry" will affect the long-term position. These vague statements do a great deal of harm.
§ Mr. Marsh
It is much more difficult for the gas industry to increase its coal burning than it is for the electricity industry. None the less, the position of the coal industry is such that we have to seek, if we are to hold the position, every avenue we can get to increase coal burning within reason. All I am saying is that the gas industry is considering how far it can assist by increasing its coal burning between now and 1970.
§ Mr. Peyton
I would hazard a guess—and I hope that, in the national interest, it will prove true—that it will do nothing to modify its present plans. I believe that to go back to, or keep alive any longer than it must, old-fashioned plant producing from an old-fashioned material would be an expensive mistake.
§ Mr. Peyton
I am not talking about oil, but about the gas industry. I am saying that I hope that it will not make the expensive mistake of continuing to use any longer than it has to old-fashioned plant and material. No doubt the hon. Gentleman will have his opportunity to express himself in the debate.
I do not feel that the Minister, in the vague measures of subsidy he has announced, will help the situation. I agree that he is under great political pressure. That must be the case. I acknowledge that he is facing a very difficult social problem, but I would advocate that where 1896 outworn outposts of the 19th century coal industry are the source of the trouble those areas should be removed from the responsibility of the Coal Board and regarded as the responsibility of the Government as a whole. They should not even be handled by his Department, but by the Board of Trade.
It is desperately wrong to have as a long-term running sore a measure of further subsidy to the coal industry. Once established, the case for increasing it is almost unanswerable. In the long term, it will not meet the needs of the industry, and I am certain that it will not meet the needs of the country.
While I accept and understand the right hon. Gentleman's difficulties, and we are all sympathetic with the immense dilemma with which he is faced in the coal industry, I think that he has taken a retrogressive step tonight.
§ 12.6 a.m.
§ Mr. Ness Edwards (Caerphilly)
Like my right hon. Friend the Member for Easington (Mr. Shinwell), I think that there is something wrong with our priorities when we discuss the destinies of 400,000 men and their families at this time of night.
Having said that, I want to sympathise with the Minister, who has an immense task and a terrible problem to solve. He has to deal with gas, electricity, nuclear power, coal and steel. It is a tremendous burden for any single Minister, especially in the fast-changing economic situation which we face.
I hope that he will appreciate that right hon. and hon. Members representing mining constituencies have difficulty in forming objective judgments about the present situation. They are all charged with emotion, because the death of a pit is the death of a mining community.
I do not know how many hon. Members watched a television programme on Sunday night which recounted the story of Senghenydd. I go there frequently. On the square, one can see men who have given their lives to the industry, blowing and puffing, the pneumoconiotics and disabled men gossiping with one another because there is nothing else for them. All hon. Members who represent mining constituencies are bound to feel strongly about these matters. They cloud one's judgment, and I am the first to admit it.
1897 Most of us recognise that, to save as much of the industry for as long as we can, it is necessary to abandon all those parts which are not viable or which cannot be made viable. I know that it is hard to accept, but the consequence is that the industry in South Wales and in Scotland will shrivel, and all that we shall have left is a concentration on those pits which can produce coal at 4d. a therm.
As Lord Robens said at the hearing before the Select Committee on Science and Technology, the argument was that he could put coal in at 4d. per therm, but he could put that coal in at 4d. per therm only by abandoning all the other collieries where he is losing money. That means that nearly half our mining industry will be concentrated entirely in the Midlands and South Yorkshire and the rest of us will have shrivelled out of existence. That is the outlook that we face. We have got to face it and not run away from it.
Another additional quality which my right hon. Friend the Minister has to his problem is that there are over 41 million tons in stock, distributed and on the ground, and here we are at the beginning of the summer. If it were the beginning of the winter there would be some hope, but now we go on stocking until the winter. The outlook is that by the beginning of winter we shall have over 50 million tons of coal lying on the ground. That creates a problem not only of financial consequence—10s. for putting it down, 10s., for picking it up—but of deterioration. It is a frightening problem. In facing this situation, my right hon. Friend has whatever sympathy I can give him.
We of the miners' group of Members in the House of Commons have been interviewing Ministers for the last three years about the dangers in the situation that would lead to the present position. We have pointed out that unless steps were taken, the morale of the industry was going to pieces. We saw it particularly in South Wales, where even good pits became unviable because they could not get the manpower. That is the story that ore hears in every coalfield, both in the good ones and the losers. Therefore, we have tried to press upon 1898 Ministers both the size of the problem and its urgency.
I heard my right hon. Friend say that it is now proposed to have Cabinet machinery to maintain oversight. A deputation from the miners' group was promised that two years ago. What has been happening? Last year, we had the position at Pwllbach, a colliery in the west of the South Wales coalfield. It was the only colliery in the village, which was dependent entirely upon it. There was nothing else there.
A deputation came up from South Wales, about 400 of them. Before we met the deputation, however, we had discussions with the Chairman of the Welsh Economic Council, the Under-Secretary of State for Wales, and with other Ministers, and we decided to work out a new technique of dealing with the problem. We had what we described as a task force. Where a pit had been given notice that it was to be shut, the Under-Secretary of State for Wales, the President of the National Union of Mineworkers and a member of the Welsh Economic Council would go to the village and discuss everything with everybody concerned, including the Coal Board. Unless alternative measures could be taken whereby all the men could be found alternative jobs, they would press the Coal Board to delay the closing of the pit until the necessary steps had been taken to provide an alternative life for the village.
For reasons which I need not go into now—they are quite outside the terms of this debate—the task force never functioned, and the new technique of dealing with the closure of a colliery on the spot where it occurred was never tried out. We are trying to solve a major new problem with old tools. What we have to devise is an entirely new technique to deal with the circumstances of the closure of any pit in the country.
I do not think that it can be done by one Minister leaving it to another. My right hon. Friend has had to face a great problem. The hostility which has been shown in the questions put to him arises from the fact that there is no one else to attack. He is the man who is responsible for this industry. He takes the decisions, but he is not responsible for the social consequences of the decisions which he 1899 takes. We do not know who the devil is. We hear airy-fairy talk about retraining. We get the Board of Trade doing a little bit here and there, but there is no co-ordination. There is no central agency in each coalfield to deal with this problem as it arises.
I know that my hon. Friends who come from the area will forgive me for using Seaton Carew power station as an example to illustrate what I have to say. I believe that the development and growth of nuclear power is as inevitable as the decline of the mining industry. I think that we should continue with the A.G.R., but do not let us overload the consortium. Unless we continue with the A.G.R. programme, which will lead to faster breeder stations, in the 1980s we shall be buying from the Americans.
The great problem, as the Select Committee on Science and Technology saw it, and as Lord Robens put it, is the pace of the nuclear programme. In Lord Robens' view, the size and time schedule of the nuclear programme are of great significance, because he believes that the development of the nuclear programme at too fast a pace could have catastrophic effects on the mining industry. This was the effect of his evidence before the Committee. This is what he said at the miners' conference, and he made a speech in South Wales along the same lines. He was questioned very closely about this when he appeared before the Select Committee, and he limited himself to that.
§ Mr. Edwards
I will say something more about that. The minutes of the Select Committee have been published and I am deeply indebted to it for its information on this problem.
At Seaton Carew, a nuclear power station is to be put into the middle of a coalfield. I could understand it being on the South Coast, because of the transport of coal, but if Lord Robens think he can put coal into Seaton Carew at the equivalent of 6d. a therm, and that 1900 this is competitive with the A.G.R., I cannot understand why tenders have already been requested for nuclear power construction at Seaton Carew—
§ Mr. Marsh
I appreciate that no decision has been taken on Seaton Carew. The industry faces a problem now and until 1970. Even if Lord Robens is right, and not another nuclear power station is built, this can have no effect on the industry until the 1970s. It does not solve our problem now, because they take seven years to build. My right hon. Friend mentioned low-cost coal. Would he not agree that, if the lowest cost coal were creamed off from coal, which is already expensive, the overall cost must inevitably rise, with disastrous consequences to the rest of the industry?
§ Mr. Edwards
But that was Lord Robens' case to the Select Committee. Let us assume that a nuclear power station would be fractionally more financially advantageous than a coal-fired one. But these are costs within the fuel industry. Does one count the cost of unemployment benefit if 8,000 men are made unemployed in Durham, or the cost of new capital investment to employ them? Should these social costs, including the cost of clearing the site, be considered? It is no good the industry enjoying tremendous profits if the country is to lose. This argument has not been advanced, and I was surprised that the Select Committee did not deal with it.
Hon. Members like myself feel that we cannot stand in the way of progress, or be Luddites. We want the A.G.R. programme to go on, but to be of such a size and time schedule as not to create difficulties for the industry which the Government cannot handle. Our policy decisions have created social problems for which we have no answers. Each consortium has a contract, and it is now proposed to give it two. This provides more work than the consortia can handle, but I leave that to the members of the Select Committee. If, as a result of this policy, pits must be closed, then, instead of the capital invested in them being carried by the surviving pits, it should be wiped out by the Treasury taking over.
1901 In every coalfield a special agency should be established to deal with the consequences of this policy. I say this because we are concerned with the livelihood of our people. If we can give them a better livelihood than working down the pits, by all means let us do that, and the sooner the better. But in the abandoned pit areas the Exchequer should meet the cost of clearing up the debris. No area should be left derelict. Nor should it be left looking derelict.
I was glad to hear my right hon. Friend mention disabled miners and those over 55 years old. I wish that that statement could have been made earlier. Had it been, morale in the industry would have been higher than it is today. I hope that he will chase the question of enabling the electricity industry to burn more coal; but the extra cost must not be placed on the industry or the consumer. The Exchequer must foot the bill.
We expected to hear much more from my right hon. Friend. We understand that policy is not yet finalised and we hope that the White Paper will soon be published. It is to be hoped that the final decisions will not be taken about the future of this industry and those who work in it—people who have made the Labour Party what it is and who are responsible for our being in power today—without our having an opportunity to discuss these matters in detail.
§ 12.27 a.m.
§ Sir Gerald Nabarro (Worcestershire, South)
Every Tory hon. Member deeply sympathises with the views of the right hon. Member for Caerphilly (Mr. Ness Edwards) and none can fail to be moved by his description of the pneumoconiotics in the square at Senghenydd. That is why emotion moves mining communities. It is also the reason for getting rid of deep mining, save only by remote control and highly automated processes, at the earliest possible date.
I do not propose to be drawn into these emotional considerations at this stage. I want to add my protest, loudly and clearly, to that of every former speaker about the disgusting Parliamentary habits of the Leader of the House. He goes away and has a "kip" on the bed in his room, coming back here in- 1902 frequently to put his nose in the Chamber.
§ Sir G. Nabarro
I propose to add my voice to that of every previous speaker—notably the right hon. Member for Easington (Mr. Shinwell), who proclaimed in no uncertain terms that he strongly objected to Measures dealing with abortion and homosexuality taking precedence over one of our major and most fundamental industries—about the Leader of the House.
I come to the habits of the Minister of Power. Of course, he has carefully organised the frustration of the presentation of his fuel and power policy to this House, and deferred it until the autumn so as to be perfectly certain that the information in it is not available to hon. Members this evening when discussing this important financial Order. All our discussions this evening are invalidated because we have no information of the comparative investment in the other fuel and power industries correctly correlated or otherwise to investment in the coal industry. So it is no good the hon. Member for Ebbw Vale (Mr. Michael Foot) muttering—the right hon. Gentleman the Member for Easington entirely agreed with my view. We cannot consider investment in the coal industry in isolation from investment in the other fuel and power industries.
I suppose that when we have the White Paper in the autumn—perhaps at the end of October or in November—and a statement on fuel and power policy, we shall then have the procrastinating tactics of the Leader of the House denying us time for an adequate debate. We have no assurance, and we never have had any assurance, that we shall be given a reasonable amount of Parliamentary time in which to debate this important issue.
Tory Governments over 13 years—and the right hon. Member for Easington alluded to this—almost annually furnished time to deal with the report and accounts of the National Coal Board. Not once has that been done under a 1903 Labour Government, notwithstanding that the coal industry is the sacred cow of Socialism. It is dereliction of duty on the part of the Treasury Bench, which treats with utter contempt the views of the 40 mining Members seated behind it.
The right hon. Gentleman the Member for Easington found exactly the correct form of words when, at Question Time on 4th July, he asked the Minister of Power:Is he aware that the mining community is almost in revolt against the Government?"[OFFICIAL REPORT, 4th July, 1967; Vol. 749, c. 1536.]He would have been more accurate if he had left out the word "almost". The members of the mining community are utterly in revolt against the Government. They have no confidence whatever in the present intellectualism of the fuel and power Ministers and the members of the Front Bench, who have never soiled their hands in a coal mine. Perhaps it would have been better if the hon. Member for Barnsley (Mr. Mason) had been made Minister of Power, for then at least the coal mining lobby opposite would have had a miner in control who understood their problems.
So little does the Minister of Power understand the problems of the mining industry—let alone the Leader of the House; he does not know the difference between a lump of coal and a can of oil—that I propose to quote him once again. [AN HON. MEMBER: "When were you a coal miner?"] Mr. Speaker, an hon. Member asks: when were you a coal miner?
§ Mr. Speaker
Order. I should like to answer the question of when I was a coal miner, but let us get back to the debate.
§ Sir G. Nabarro
I do dislike these interruptions, which are putting me off my stride.
The reason why the coal miners opposite have no confidence in their own Front Bench is easily recognised by what the right hon. Gentleman said, as reported in the Financial Times on 12th June:Mr. Richard Marsh, the Minister of Power, said at the Northumberland Miners' Gala at Bedlington at the weekend: 'Our coal mining industry depends entirely on our ability to 1904 increase output and reduce prices'. But, he added: 'We have had a rough time, but now the future is very rosy.'
§ Mr. Marsh rose—
§ Sir G. Nabarro
I shall give way in a moment. The right hon. Gentleman has occupied a disproportionate amount of time, but I shall give way when I have finished the quotation.
This was immediately contradicted by Mr. Will Paynter, Secretary of the National Union of Mineworkers,who said the changes taking place in the industry had destroyed the miners' faith in nationalisation.That was underlined by the right hon. Member for Easington this evening. The faith of the miners in nationalisation is utterly destroyed. It is far worse when a Minister talks about a rosy future. What is this £50 million wanted for—the rosy future? No, the £50 million is wanted for the extra stocking of coal.
The right hon. Member for Caerphilly almost put his finger on it. He approached the problem, but did not quite quote the correct figures. He ought to have said that on 1st July, 1967—I quote from the Ministry of Power Weekly Statistical Statement, undistributed stocks of coal were 25,089,000 tons and distributed stocks 15,698,000 tons. A phenomenal total of almost 41 million tons of coal is now lying on the ground. Sales are declining and this huge volume of unsold coal has to be financed.
Today is only 18th July. Coal stocks will continue to rise, distributed and undistributed, until the onset of the New Year and may well reach the phenomenal figure of 60 million tons unless one or two things happens. Either there will be a sensational increase in the demand for coal, which I do not believe we can foresee in the early future, or there will be a sharp diminution in the output of coal, which equally well I do not foresee in the early future.
It may be that if we have another mild winter like last winter we shall be faced at the beginning of next year with the critical situation that there is 60 million tons of coal on the ground. What do we do then? Do we go on financing it out of public funds as we are doing this evening? The Minister should try to 1905 face the prospects and not serve soothing syrup at miners' galas of a "rosy time" in the future, as he did at Bedlington.
The Prime Minister, last Saturday, at the Durham Miners' Gala, said that he would deal with the problem of the coal mining industry with economy and humanity? The most humane thing the Prime Minister can do with the industry is to tell them the truth and stop misleading them.
I listened to the Minister this evening forecast that in 1970 the output of the coal mining industry would be 140 million tans. That is two years hence. This year it will be probably be 160 million tons. Do not blame the Tory Administration for this. This is something which the Labour Party carries on its shoulders. When the Tories came to power in 1951 we were mining 212 millions tons of coal. When we went out in 1964 we were mining 200 million tons. Three years later we are mining 164 million tons. The really steep decline in the output of coal ha; occurred in the last three years under a Labour Government.
§ Sir G. Nabarro
The hon. Member says that it is more credit to the Socialists. I profoundly disagree. I am one the side of the coal miners [Interruption.] I sit in my own home seat, where I live, South Worcestershire. I do not propose to offer myself for a mining seat this side of kingdom come. I remind the hon. Gentleman that, when I addressed the miners' conference in South Yorkshire, so pleased were they with my performance that they appropriated temporarily the silver miner's miniature lamp which was to have been presented to a miners' official and gave it to me to mark the occasion. [An HON. MEMBER: "Because they thought that the hon. Gentleman was dim."] But they had bought that expensive trophy to give to one of their officials. Did they think that he was dim? They took it from him and gave it to me. That was the only time a Tory Member has received a trophy of that kind from a coal mining audience.
§ Sir G. Nabarro
I come back to the Minister's prognosis for the mining industry. He said that output will decline to 140 million tons by 1970 and, after the adjustments he hopes to make, it will be 155 million tons. We ought to tell the mining industry that the output of coal will be 100 million tons in 1975 if the present policies continue. But I do not want them to continue. There has been much talk this evening about nuclear power. I will not digress for the moment. It is equal to eight million tons of coal equivalent this year.
I would much prefer to deal with something which is much more flexible and which ought to be appropriated to coal much earlier and much more economically, namely, the amount of fuel oil being burned in electricity power stations. The Minister got away tonight with the disingenuous and disarming statement that he was increasing the coal consumption of power stations by six millions tons. He did not define the period and he omitted to tell the House the steady and remarkable growth in the consumption of coal at power stations.
§ Sir G. Nabarro
The Minister gave way to me once on an important issue and I deferrred raising this matter. In 1960, 51.9 million tons of coal were consumed in power stations. In 1966, the figure had grown to 68.6 million tons. In 1965, it was 70 million tons. So in a period of six years the consumption of coal at power stations increased by almost 18 million tons. That was the natural growth based on the expansion in the demand for electricity which, over those years, was running at approximately 10 per cent. per annum arithmetical progression, or a doubled demand in a period of 10 years. There was a 33⅓ per cent. increase in the demand for coal at power stations. Pari passu that, the consumption of fuel oil increased from 5.5 million tons in 1960 to 7.3 million tons in 1966 and is progressively increasing.
My case is that all the Seaton Carews and power stations strategically placed 1907 on or very close to coalfields may burn low-grade bituminous coals with a high ash content more economically than burning imported fuel oils. The first thing that the Minister should do to accentuate the demand for coal is to use his influences to switch from fuel oil power stations to coal power stations.
§ Mr. Edwin Wainwright (Dearne Valley) rose—
§ Mr. Speaker
Order. The Chair cannot prevent interventions, but I would remind the House that interventions prolong speeches and many hon. Members wish to address the House tonight.
§ Mr. Wainwright
I am sorry to have to intervene, Mr. Speaker. But over a period of years many hon. Members opposite have tried to get the Government of the day, including the present Government, to remove the tax on oil. Would the hon. Gentleman say what part he takes in this issue?
§ Sir G. Nabarro
It is historically a fact—and I invite the hon. Member to go to the Library and look it up—that when the tax on fuel oil was introduced in 1961 by my right hon and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), who was then the Chancellor of the Exchequer, I divided the House against him from the Tory side on the grounds that I am enunciating tonight. I took only one Tory Member with me, my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). I took two Liberals with me and four Socialists. But I divided the House against the tax on fuel oils. I noticed the Motion in the name of hon. Gentleman on the Order Paper of 17th July, which precisely gives effect to the policies that I have been enunciating tonight.
There is a second reason why I do not think that we should go on with a policy of increasing consumption of fuel oil in power stations. Surely the international oil situation, though there is plenty of oil in the world, ought to give us a great deal of cause for concern today. With the Suez Canal blocked, all Arab oil cut off, on the eve of petrol rationing in this country on 1st October, with all the petrol coupons printed, surely we ought to diminish, where it is practicable and economic to do so, our dependence on 1908 imported oil. [Interruption.] I do not know why the hon. Member for Dearne Valley (Mr. Edwin Wainwright) should be so upset with me for pleading the cause of coal miners. [An HON. MEMBER: "It is the somersault that the hon. Member is doing which worries him."] It is not a somersault.
In 1954, when the Tory Government were obliged to increase the facilities for replacing coal demand by oil, we were desperately short of coal. That was why the emphasis was placed on oil by my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd), then the Minister of Fuel and Power, who launched the first nuclear power programme. That is why he placed the emphasis on oil in those days, and very rightly so. I am not standing on my head today. I am talking sound common sense in the interests of the coal industry.
§ Mr. Robert Maxwell (Buckingham)
I am obliged to the hon. Member for giving way. Were the Minister to accept his advice and encourage power generation from coal, is the hon. Gentleman aware that the consequence would be that our export of power generation equipment would be hindered immensely? The chances of selling coal power generation equipment overseas are very poor indeed. For oil, the chances are considerable.
§ Sir G. Nabarro
The hon. Gentleman should either sit through a few fuel and power debates or learn about fuel and power economics. It makes no difference whatever to the machinery employed whether one burns coal or oil; the boilers, turbo alternators and other heavy plant are virtually the same. The hon. Gentleman should turn to his hon. Friend the Member for Bristol, Central (Mr. Palmer), who is a power generation expert. He will put him right on these matters.
We ought to diminish our dependence on fuel oil and increase the demand for low-grade high ash content coals, which are abundantly available, notably in the Durham coalfield. Were I the Minister, I should have no hesitation in saying that the Seaton Carew power station can operate more economically on coal, albeit only marginally, than on a nuclear basis.
§ Sir G. Nabarro
The hon. Member is entitled to his opinion. I know more about these matters than I gain from listening in Select Committees.
§ Sir G. Nabarro
I come now to the views of Lord Robens, which have figured prominently in the debate. It is an interesting situation that Lord Robens is now in head-on collision with his own Minister. Though we are denied the whole of the fuel and power policy statement until October—I shall not transgress the bounds of order, Mr. Speaker—the Minister opened his speech by saying that we were now switching from a two-fuel to a four-fuel economy, the four fuels being coal, oil, nuclear fuels and North Sea gas.
In the Financial Times of Friday, 7th July, under the headline, "Lord Robens attacks the economics of the madhouse", there was this report:The decision to use natural gas in power stations was yesterday described as being the economics of the madhouse by Lord Robens, chairman of the National Coal Board, in a speech to the annual conference of the National Union of Mineworkers. He also attacked the Government's decision to press ahead so quickly with the nuclear power programme".Under the Statute, the Minister appoints the Chairman of the National Coal Board, who is required to carry out Ministerial policies. It is a nice constitutional point whether we can countenance having the Chairman of the Coal Board or the chairman of any other nationalised industry attacking publicly the policies of the Minister who appoints him. It is a nice constitutional point how long this sort of thing can be tolerated. One of two events must happen—either the Minister "fires" Robens or Robens hands in his own resignation.
We cannot have a situation in which headlines in national newspapers tell us,Lord Robens attacks economics of the madhousewhen the "economics of the madhouse" are the policies of the Minister who appoints Lord Robens. I shall raise that matter again in the autumn.
§ Mr. Eadie rose—
§ Mr. Speaker
Order. I remind the House that many hon. Members wish to speak in tonight's debate. Interruptions 1910 prolong speeches, and I want there to be a fair share for every Member in the House tonight.
§ Mr. Eadie
I appreciate what you say, Mr. Speaker. I have sat here since the beginning of the debate, and I am prepared to stay all night if need be, because the subject is so important. I wanted to ask the hon. Member for Worcestershire, South (Sir G. Nabarro) to be fair in his reference to Lord Robens. He quoted only part of what he had said. I shall have something to say about the Minister, if I catch your eye, Sir, but I am sure that the hon. Gentleman did not mean to be unfair to Lord Robens. In the same speech, he went on to say that my right hon. Friend was, in his view, the first Minister of Power for some time to make a genuine attempt to balance the rival claims of the various fuels and to provide the nation with cheap energy in the long run.
§ Mr. Speaker
Order. It is just that sort of lengthy intervention which may prevent the hon. Gentleman from making a speech later in the debate.
§ Sir G. Nabarro
It was only for reasons of brevity that I did not quote Lord Robens at length. [Interruption.] Interventions from the Treasury Bench by non-Power Ministers are an unaccustomed feature of power debates. I have a full transcript of Lord Robens' speech in my hand, but I did not wish to quote from it at length. I have marked off carefully that form of words which I should be unduly disputatious if I quoted:I must pay tribute to Dick Marsh for this imaginative step.There is nothing imaginative about it. Tory Ministers did it for 13 years. I do not want to quote the whole speech. I have raised, and shall raise again, pursuing by Parliamentary Questions and other devices available to me, the question of the absolute contradiction in major matters of policy between the chairman of a nationalised industry and the Minister who appoints him.
Tonight, I have no alternative but to support the Order calling for an additional £50 million, not on grounds enunciated by the Minister, with the circumlocution which attended his speech, but for a very simple, straightforward, honest reason. Stocks of coal are 25 1911 million tons undistributed and 15 million tons distributed, making 40 million tons in all. From its existing finances and working capital the Coal Board cannot finance increases of those undistributed stocks on the scale we have witnessed in the past few months. It is for that reason that the Coal Board wants the extra money, and if the Minister had said that as shortly as I have said it he would have commanded a great deal more respect and support in the House.
I defer until the autumn my more censorious comments on the Minister's behaviour in these important fuel and power matters. I largely have the same fuel and power philosophy as the right hon. Member for Easington, for whom I have a healthy regard. At least he is an honest and patriotic creature. He said tonight that the miners hoisted the flags at the colliery pitheads on 1st January, 1947, to symbolise the onset of nationalisation, but he concluded by saying that he recognised that nationalisation had failed. Of course it has. [AN HON. MEMBER: "He never said that".] I shall argue that with him later, in the autumn, when we have our fuel and power policy statement. In the meantime, I advise the House to support the Order to finance unsold stocks of coal—unsold because the Coal Board is not good enough at selling coal.
§ 12.58 a.m.
§ Mr. Ron Lewis (Carlisle)
I hope that my hon. Friends will not think it impertinent of me to intervene in a debate on coal when I represent a city. But the City of Carlisle and the County of Cumberland go hand in hand in most matters, and during the past few weeks I have had the opportunity of discussing with many coal miners in Cumberland certain aspects of the Government's fuel policy. I think that I should also say that I worked in the coal mines of my native Somerset and in Derbyshire, the county of my adoption, for a number of years, until I became redundant through no fault of my own. I shall accept your advice, Mr. Speaker, by probably making the shortest speech in the debate.
I would put in a commercial plea for the County of Cumberland, and I hope to impress upon the Minister that the Cumberland coalfield must not be allowed to die. We have made a great 1912 contribution in the past. At the moment, we have only three remaining pits in full production. But I am delighted to report that those three pits, as a result of a recent spurt, have increased their output over and above what was foreshadowed by the National Coal Board. Coupled with that, the three pits have made a profit. The profit for the Haig pit was about £46,000, equal to 5s. 11d. per ton, and the Solway pit made a profit of £70,000, equal to 25s. 8d. per ton.
One of the tragedies as I and the miners in Cumberland see it is that there is no recruitment taking place for the Solway coal mine. It should be borne in mind that in West Cumberland we have a very high percentage of unemployment. In certain parts it is as much as 10 per cent. One of the problems is that there is no recruitment for some of the pits. In one pit recruitment is confined to craftsmen and juveniles. But the three pits are producing more tonnage now than was produced in the first quarter of 1966 when they had helping them other pits which have since closed.
One of the problems is stocks. In June, 1966, we had in Cumberland about 900 tons of deep-mined coal in stock; today, there is about 46,000 tons. In June, 1966, we had 8 tons of opencast coal stocked; today, the figure is 33,000 tons. I hope that the Coal Board and the Government will get down to the problem of the marketing of coal. In Cumberland, we are feeling the draught of a drop from 10,000 tons to 6,500 tons in demand as a result of the United Steel Company taking less coal. I suggest that that can be reflected in various parts of the country.
Finally, I ask the Minister to impress upon the Coal Board the importance of spending some of this money in two pits in Cumberland. First, with regard to Solway pit, I am advised by experienced miners that if an 80-yard drift were begun the life of the pit could be extended by years. With regard to No. 10 pit, the men have given an undertkaing that if man-riding were introduced—taking men from the shaft bottom to the coal face—production could be increased by about 10 per cent. I ask the Minister in all sincerity to look at this aspect and to impress upon the Coal Board the need to keep our Cumberland pits open so that 1913 they can in future make the contribution to the fuel policy that they have done in the past.
§ 1.5 a.m.
§ Colonel C. G. Lancaster (South Fylde)
The hon. Member for Carlisle (Mr. Ron Lewis) told us that he would speak with brevity and indeed he did. I do not think that he need apologise for confining himself to the problems of his part of the country, for he did so with competence and sincerity.
I would like to talk about what the Minister has said, but before I do so I would like to indulge in a look-back on the industry. I do so particularly because yesterday there was an article in The Times on the main problems of the coal industry and a great deal of what was said ranged around a pit which has been part of my life and my family's life for something like 100 years. It has now, inevitably, been closed down, but I still feel some remorse.
There was a picture of Mr. William Fletcher—"Bill" Fletcher—who has played a prominent part in the Nottinghamshire industry for many generations. Fletcher is a Lincolnshire name. The family came down from Lincolnshire and they have been good colliers. Now "Bill" Fletcher is redundant and I think that I know a little bit about how he feels.
A number of hon. Members have shown emotion tonight and it is understandable if I indulge in some emotion myself. I hope that they will recognise the reason for my doing so.
The Minister has made a very important statement tonight. Many of us had been impatient that he should do so, but one must recognise that he was faced with many matters that had to be resolved, some of which seemed conflicting to one another. Although we were impatient I am glad that he has said something that we can get our teeth into. He said that he looked to 155 million tons as being the production from the coal mines. I wish that he had accompanied that by "chancing his arm" in another direction. Although he said that he hoped there will be production of 36 cwt. per manshift in the near future, I wish that he had had a go on how he saw costs coming down.
1914 If we are to discuss this matter rationally and objectively we must recognise that coal will prosper and remain among us only if it remains competitive. I wish that he had had a shot at it. I shall do so.
Some time ago I made an attempt to estimate what part coal would play in our energy requirements. I am not presenting this with hindsight, but I was within 5 million tons of what the Minister said. I said 160 million tons and I will give my reasons for saying that. I give, first, a qualification in regard to that 160 million tons. It will be enormously conditioned by the new organisation which Lord Robens has set up in the industry. The right hon. Gentleman the Member for Easington (Mr. Shinwell) is no longer with us, but whatever we may say about the past there is little doubt that what we did in 1947 was a very hurried arrangement. The system under which we nationalised coal would not stand up to the strain of a buyer's market. It got past until 1958 because we lived in a seller's market and its imperfections were not so obvious that attention was drawn to them.
Both the Conservative and Labour sides must take their share of the criticism that little or nothing was done to have a second look at them. By 1958, the gaps in the system were obvious to everybody, yet almost a decade went by before anything concrete was done. It is to the credit of Lord Robens that he grasped the nettle and embarked on a massive scheme of devolution and rationalisation. Nothing was said by the Minister about that, but I put a great deal of emphasis on it.
If the National Coal Board presses on with that scheme, as Lord Robens claims that it will and as I have little doubt that it will, I believe that we could see quite large economies in the cost of producing coal. I hope that hon. Members opposite will give me some credit for having a long experience of the industry. I speak with a considerable sense of responsibility when I say that it is possible to achieve this and that the nub of the matter is whether we can produce enough cheap coal to enable it to compete reasonably with those other three sources of energy to which the right hon. Gentleman referred. I believe that it is possible and I can only hope that it will happen.
1915 The other side of the medal is that if we do not hold either 155 million or 160 million tons a lot of things which will not be in the interests of the country will supervene. This is our only indigenous fuel and we have a big bargaining power in having it. We are at risk at the moment over our requirements for oil. We are also very much at risk with our requirements for imported methane gas.
I am concerned with the technology going on at Canvey Island where installations for storage of gas are growing on a massive scale. At the moment, there is chaos there. No ship has put in for a month. It may be said that this is a temporary situation which will not happen again. I am by no means certain that we can look to the future with that degree of confidence. If, at any time, we allow our coal industry to fall to a level from which it would be difficult to recover, we are giving hostages to fortune and we would be unwise not to recognise that.
The industry itself has lived in a condition of uncertainty for many years. Morale both of men and management has been affected. Indeed, the whole image of the industry itself has become dimmed. In many ways tonight is a very important occasion, because the Minister has produced at least a bottom on which the industry can settle down for some time.
The risk we have been running is not that men would leave the industry for other occupations—that is inevitable—but, even worse, that we would not recruit the right type of young technologist by whom alone we shall bring about the improvement and recovery of the industry which I believe to be possible. So long as that uncertainty existed, that threat was the greater and to that extent we must be grateful that at last we have got from the Minister a figure with which many of us may not agree, but which gives us some confidence that we have reached a bottom from which it may well be that we shall be able to advance.
An hon. Member interjected earlier that we were ignoring what was happening in the United States and Russia. I think that in some ways we are a little unwise to do so. A few years ago, 1916 America was producing 380 million tons a year; now it is up to 570 million tons and the target is 600 million tons. Russia's target is 1,000 million tons. Of course, 40 per cent. of American coal production is from strip mining but it is perhaps surprising how much coal is being produced there from quite thin seams.
Admittedly, they are working at shallower levels, and they have better roof and floor conditions. Even so, with all their natural advantages, with masses of natural gas, hydro-electricity and oil, they recognise that the future is uncertain, and they are pressing ahead with coal production. The Russians are doing much the same. I know a little about the Russian coalfields. They have not perfect conditions everywhere, yet they have come to the same conclusion. We cannot think in terms of 600,000 or 1,000 million tons, but we should be unwise if, in our turn, we did not look relatively to the importance of this indigenous fuel.
I am trying not to allow sentiment to sway me in this matter. I am looking at it quite objectively. I believe that, when this scheme of rationalisation takes place, when we get production from the most efficient pits, when we have the benefits from a rapidly developing technocracy, when we take advantage, by means of devolution, of allowing the men at the periphery to do their job as they alone know how to do it, and when we get away from the idea of running the industry from London, it will be possible to see an improvement of between 15s. and 25s. in the cost of producing coal. If we do that, we shall get fractionally below the figure of 4d. a therm, and that is a very competitive figure. If we can produce coal at anything under 4d. a therm, it remains a very competitive fuel.
Equally, we are inclined to think that the whole of this production must take place in the East and West Midlands and Yorkshire. I do not agree entirely, because transport must come into any calculation of production costs. It would be unwise to imagine that it would be sensible to take coal from the East Midlands to Scotland, for example. There could be pockets of production in Scotland, South Wales and Durham. Fields like Lanarkshire probably have seen the 1917 end of their lives, but, however much we rationalise, it would not be wise to cut out those parts of the, country where we can take the best pits and produce economically, and attempt to do it all from one or two main areas.
I congratulate the Minister on having come out with a figure. We have all been waiting for it, and certainly the whole coal industry has been. Whether or not it is the figure that we hoped for, it will give some confidence to the industry that there is a firm figure. If, on top of that, we do what I hope and rationalise and devolve in the manner that Lord Robens has claimed that he intends to do, it may be that in the mid-1970s there will be a recovery of the coal industry. It is not beyond the wit of man to think so. I do not agree with those who say that production will drop to 100 million tons in the 1970s and less in the 1980s.
It may be that this element can compete, if it is produced under conditions as near perfect as we can get them and with the highest available technology. We have the best colliers in the world, and some very fine technologists. I think that the future of the industry is by no means as desperate as some speakers have implied.
§ 1.19 a.m.
§ Mr. Thomas Swain (Derbyshire, North-East)
I listened with great interest to the hon. Member for South Fylde (Colonel Lancaster), and I sympathise with his understanding of redundancy. After all, as a coal owner, he was made redundant after 1st January, 1947, so he can appreciate the position of a man who is made redundant today.
However, his redundancy and that of a man at the coal face or pit top today are two rather different matters. A far different golden handshake was and is still being handed out to the old coal owners from that being handed out to the man who is made redundant today.
Another point of interest in the hon. and gallant Member's speech was the reference to my hon. Friend's interjection about Russia, America and Poland. Of course, the mining industries are prospering in those three countries and in East Germany, where the opencast working is going ahead by leaps and bounds. 1918 Obviously, there is a fundamental difference between those countries and us. They have expanding economies. We have had a stagnant economy for the past two decades and, the way we are going, we will have a stagnant economy for the next decade. That is what worries me. How the devil can the coal industry increase output and sell its coal if the overall economy of the country is not expanding?
The National Plan envisaged a 4 per cent. expansion. The man who presented that plan must have dreamed about this. Then, when he woke up, only about three months afterwards, everybody had forgotten all about it and we were back in square one, where we started.
If the hon. Member for Worcestershire, South (Sir G. Nabarro) claims to be a friend of the miners, as an ex-coal miner I say, "God shield us from our friends."
§ Mr. Swain
It needs to be a shield that can withstand a nuclear bomb. I have never heard such hypocrisy and cant in the House of Commons as has come from the mouth of the hon. Member tonight. After some of the things that he has said in the House about the coal mining industry, the same thing ought to happen to him as happened to Lot's wife next time he turns round.
I have the greatest sympathy with my right hon. Friend—he may not think so, but I have—as Minister of Power. I share the sympathy of my right hon. Friend the Member for Caerphilly (Mr. Ness Edwards) with the Minister. He has a stupendous task in operating the various forms of power with all his other attendant features, such as steel.
During my time as a Member of the House, we have had various Ministers of Power. My right hon. Friend has tried to look in a modern sense at the mining industry. He has at long last come along tonight with a figure. I am far from satisfied with the figure, because I think that it is optimistic. If our assessments of the situation are anything like correct or the assessments of experts who have been writing in the newspapers are anything like correct, my right hon. Friend's figure tonight is very much up the creek, nearly as much up the creek as the Plan for Coal in 1955.
1919 That plan envisaged that we should need to produce 140 million tons of coal a year by 1970. Capital expenditure was sunk in the industry on which the industry still has to pay the burden, regardless of the relief so graciously given by the former Minister of Power in the 1965 Act, which has to be borne by the industry as a consequence of the planning of the 1955 Plan for Coal.
I hope and trust that the figure given by my right hon. Friend tonight is not overrated and, consequently, capital expenditure has to be borne by the industry and then the plan fails, as the 1955 plan failed, and the money goes down the drain, as the 1955 money had to go.
§ Mr. Marsh
The question of the figure has been raised several times. There is, of course, the important qualification that it is very much dependent upon the ability of the industry to get the increased output per manshift that the Board thinks that it can get. Clearly, it can be sold only on the basis of the expected increase in productivity.
§ Mr. Swain
I understand that, and I heard my right hon. Friend say that in his speech, but I thought it was important for him to repeat what he said about the possible flexibility of the figures in the event of the industry not being able to produce coal at the rate he envisages in competition with other fuels.
I would like to quote what was said in the House by the former Member for Houghton-le-Spring, now Lord Blyton, speaking on behalf of the Labour Party when it was the opposition. Speaking from the Front Bench, with the whole authority of the Shadow Cabinet and the party behind him, he said:Our position is clear. We believe there can be no realistic plan in industry unless there is a policy of expansion and full employment and the responsibility for this rests clearly on the Government. Such a policy is necessary to accommodate the technological changes that take place. The Government should stimulate production in other basic industries, and their duty is to maintain full employment."—[OFFICIAL REPORT, 20th November, 1962; Vol 667, c. 1113.]Where have those great Socialist ideals gone since we took over as the Government? If I were a preacher, I would use those two quotations as a text and preach a sermon which would go down in history. Productivity is stagnant, and un- 1920 employment is at its highest figure since the war at this time of the year. This is not very good praise, and in relation to the statement by Lord Blyton, it is a contradiction in terms.
Where is the National Plan, so forcefully introduced by the Department of Economic Affairs, and what about the section pertaining to the coal industry? What worried me about the Plan, and what worries me about the future, is that the Government expect a 3 per cent. growth in the economy. This will inevitably mean at least a 2½ per cent. growth in our energy demands, and yet, with all this planning for a 3 per cent. growth in the economy, the coal industry is to be run down to what the Minister admitted tonight is an unknown figure.
We are the only country in the Western world which is running down its coal industry at the same time as planning for an expansion of 3 per cent. in the economy. Where is this 3 per cent. growth going? Is it going to natural gas, or to oil? Is it going to nuclear energy? It is obvious that none of it is going to the mining industry. These are the things which are worrying my hon. Friends and myself, and, above all, worrying the men and women in the mining districts.
I propose now to say something about the county which I represent as a miners' M.P. Incidentally, I am one of those union Members who carry out their union's policy. I do not think that interventions from beyond the Bar are in order, whether from Ministers or anyone else. Derbyshire is known as a grey area. I was at a meeting last night, and I came away with the impression that a grey area is an unknown quantity. No one could define it. Overall unemployment in Derbyshire is very low, but the fact that men under 40 are being driven away because of the closure of mines to other parts, particularly Nottinghamshire, shows that the county is being depopulated and will become a county of aged people. This is happening to one of our greatest coal-producing counties.
We cannot argue against closures because of exhaustion, but the Government and the Coal Board do not give sufficient thought to closures on purely 1921 economic grounds. Such pits should be thoroughly investigated and their life extended at least until alternative employment is provided in the area to absorb not only the older men, the weak and the disabled, but also the young men who do not want to take up their roots from the county of their birth. A Labour Government cannot and should not continue to force these families to migrate. The miners have faced mass migration before—prior to the 1914–18 War and, with the consequent hardship, degradation aril privation, in the 'twenties and eary 'thirties, when miners came to the Midlands from Northumberland, Durham, Wales and Scotland.
That process is now being repeated, and—worst of all—for the same cause of economic determination and a lack of interest by the Government or the public to protect the miners against this terrible affliction. Figures in a recent report from Derbyshire County Council prove that, although on the fringe of the most prosperous coal mining area, the East Midlands, the county is a depressed area. In 1958, there were 43,000 miners in the North Derbyshire coalfield—excluding the South Derbyshire field and the area surrounding the centre of Europe, Swadlincote—and the figure had dropped to 36,000 in 1961, 30,000 in 1965 and only 26,000 today. Expert forecasts suggest that by 1968 it will be only 24,000 and by 1975, 18,000.
These figures prove that Derbyshire has suffered considerably from mine closures over the last few years. When I entered the House, in 1959, there were 11 large collieries in my constituency. Four of them have closed, one having become exhausted and three for economic reasons. The unemployment figures in my constituency are interesting. I will quote those which are most advantageous to my case—as any commonsense person would—to show that Derbyshire is not as prosperous as people think. In the centre of my constituency is Clay Cross. Unemployment in this area, which is served by the largest employment exchange in my constituency and which has a high concentration of Labour voters, is now 5.3 per cent. The unemployment rate elsewhere in Derbyshire is not as high, mainly because 1922 of the migration about which I have been speaking.
Great strides forward have been made in the pit where I used to work, most of them since I left it. Just before I left the pit, with 1,300 men it was producing 28 cwt. per man shift. Today, with a complete turnover to mechanisation—which I hope will continue with even greater speed—it is producing 63 cwt. per man shift with 750 men.
Some people call miners Luddites. No industry has faced technological change in the same spirit as coal mining. There has not been one major stoppage since 1926, where 1¼ million men worked in the industry. Today, it employs only 400,000. I pay tribute to the N.C.B., under its Chairman, Lord Robens.
§ Mr. Michael Alison (Barkston Ash)
Has any attempt been made by the Coal Board to move any of those unemployed miners to whom the hon. Gentleman referred further south, as part of the resettlement programme? If so, why has it failed?
§ Mr. Swain
Most of the men who are unemployed in the Clay Cross area are incapacitated through ill-health and injuries caused by working in the pits and for other reasons. Many pits in the area surrounding Clay Cross have also closed and it would be a difficult and costly business to transfer these men elsewhere.
As I pointed out in an earlier debate, many miners must now get up at 4 a.m. and travel 20 miles or more to work, whereas they used to get up at 5 a.m. and walk a few hundred yards to work. This extra travelling has added two and a half hours to their working day. Men can be transferred to pits within a certain distance, but we have almost reached the point when the men will not travel much further.
Our men, who have always been very tolerant, are at last saying, "We cannot travel 20 miles to work each day"—and that means travelling 40 miles a day. Many of my constituents travel 35 miles a day to work in a coal mine, getting up at four o'clock in the morning and getting home at four o'clock in the evening.
1923 I urge the Minister to let us have the White Paper as soon as possible, so that this great industry of ours can plan according to a figure that I hope is within reasonable limits. When all is said and done, it was only on 20th November, 1965, that the then Minister of Power, answering an interjection from this side, said that if coal production went one ton below 170 million tons it would have a serious effect on our balance of payments. Perhaps the Minister will tell us what the adverse effect on our balance of payments would be if the industry were to produce only 165 million tons this year. It is the White Paper of 1965 that the mining and other energy producing industries have been working on, and we should like to have the present figures.
These are only a few of the things that worry us as miners' Members, and I hope that we shall get from the Parliamentary Secretary some figures, some understanding, and some promises. I might add, in passing, that the Minister said that he would agree to men over 55 years of age getting pensions at once, but every man who does that is an added burden on the industry. Will the Minister provide the money necessary for this step to be taken so that the industry itself does not have to take on this burden?
§ 1.42 a.m.
§ Mr. Hector Monro (Dumfries)
It is an interesting coincidence that in the Second Reading debate on the Coal Industry Bill in November, 1965, I followed the hon. Member for Derbyshire, North-East (Mr. Swain), and the difficulties that he and I then put to the House seem to have been exactly the same as they are today. As I said at that time, although I cannot in any way equal him in his great and personal knowledge of the industry I can follow him in the interests of the miners in my constituency.
I am sorry that the Scottish Minister, who was with us earlier, has been unable to stay because, as the right hon. Gentleman the Member for Caerphilly (Mr. Ness Edwards) said, the solution, if there is to be one, of the mine closures will be reached through the co-operation of the Ministry of Power, the Board of Trade and, in Scotland, the Scottish Office. All those Departments must take a close interest in the position.
1924 I am trying to take a balanced view of power policy, because in my constituency I have a nuclear generating station and I wish that also to expand. I know that, in the end, the closure of the Fauldhead colliery is inevitable, not so much on grounds of the viability of the colliery but because the coal is no longer there.
I wish to put two questions to the Minister about the subsidy he is giving to the industry. I wonder whether this will make a substantial difference to the problem in Scotland where there is a differential price of approximately £1 a ton for coal for the electricity board, which makes a difference of about £4 million a year. This is having a detrimental effect on electricity prices in Scotland.
My second question concerns the large stock of coal above ground. It seems incongruous as one of the problems we have had in the last 12 months has been complaints by coal merchants that they cannot get the coal they want and the extreme difficulty they have with the Railways Board over the closure of coal depots in goods yards. The Ministry should take a much more active interest in helping the merchants in this problem.
My main point is the extreme concern I feel about the future of the miners, particularly in my constituency, when they lose their jobs through pit closures. The Government set out to deal with this problem in the White Paper of November, 1965. The Government proposed to provide special funds to accelerate the provision of alternative employment in industrial development areas mainly affected by the closure of uneconomic pits and to help to meet the social costs arising.
In paragraph 21, the White Paper said:The Government will encourage the development of new industries in the areas affected, to give employment to miners who for one reason or another are unable to remain in the coal industry, and to maintain job opportunities for future school leavers.That sounded encouraging, but nothing significant has happened. This is why the morale of miners in areas threatened with closures is deteriorating. I think particularly of the pit at Fauldhead, where 750 miners realise that probably in the not too distant future they will have no job at all.
1925 The hon. Member for Derbyshire, North East rightly said that it is wrong to expect miners to have to travel great distances to work. There are two modern pits in the South Ayrshire field at the Barony and Killoch, which are within possible travelling distance, but there is a snag here. There will be more closures in South Ayrshire and by the time Fauldhead closes, jobs available in the new pits will have been taken up. If the men wish to stay in the industry, they will be forced to emigrate to the Midlands of England. As a Scot, I do not want that to happen. If miners cannot be given jobs in mining near their homes, a dramatic effort must be made by the Government to provide other employment in the area.
The most simple way of encouraging industry to expand into a difficult area such as this is by having a buoyant economy. We have not got one now. That is why it is difficult to attract industry into the advance factories which are being built in this part of Scotland. Two new ones will be completed in the autumn, but, despite having made valiant efforts, the Board of Trade has received no enquiries from would-be occupants. Even if industrial firms could be persuaded to occupy these factories, with 750 men unemployed two small advance factories would not be anything like sufficient.
The miners are left with three choices—to migrate to the South, to work at great difficulty in pits 25 or 30 miles away, or to welcome incoming industry. If the miners are forced to leave, they leave behind a community which has been built up since the war with a new housing scheme, a new school and other attractions. It is wrong that any Government's policy should result in these towns becoming depopulated and their residents migrating.
§ Mr. J. D. Concannon (Mansfield)
I represent one of the receiving areas for these Scottish miners. I assure the hon. Gentleman that they and displaced miners from the North are settling down well in the new mining areas and that they do not have to travel 25 miles a day to their work. The colliery houses in the new villages are close to the collieries.
§ Mr. Monro
I thank the hon. Gentleman for his reassurance. I am glad that these Scots are settling down well in 1926 England amongst their foreign friends, but I am sure that they would rather not have left Scotland. No one likes leaving his home.
This is why I believe that there must be a concerted effort by the Ministry of Power, the Board of Trade and the Scottish Office. Nothing I have seen so far encourages me to think that sufficient action has been taken. I have been to the Scottish Office and to the Board of Trade. They are aware of the problem, but I am not convinced that they are doing enough to counteract the tragic effects of this imminent pit closure in this small area. The unemployment figure in the area is already 9 per cent. Should the pit close, it will be 60 per cent. of the male working population. This would be a major disaster to the area and it is vital that action should be taken as soon as possible. Only by co-operation between the three Departments I have mentioned and an expanding economy will the difficulties caused by pit closures be solved.
§ 1.55 a.m.
§ Mr. Robert Woof (Blaydon)
I am very glad indeed to follow the hon. Member for Dumfries (Mr. Monro), if only for one reason. This is one of the infrequent opportunities that we have to discuss some of the vital aspects of the National Coal Board's affairs. I wish to emphasise strongly that if there ever was a time when my right hon. Friend the Minister of Power required an affirmative Resolution of the House to raise the limit of the borrowing powers from £700 million to £750 million, it is precisely now.
I wholeheartedly support the 'purpose of the Order. It is imperative that we should do so, in order to accomplish its usefulness by assisting the Coal Board to extract itself from its present trying situation. It has been made clear that many of us are anything but happy about the present situation in the coal mining industry, or its immediate prospects. We have felt the gloom for a very long time. It should, therefore, be abundantly clear that we regard these borrowing powers as essential to maintain the drive for increased production.
Unfortunately, one has to admit facts. Even although the Coal Board has made strenuous efforts, we have to face the 1927 fact that each year has brought a diminution in the ability to establish a large market for the sale of coal. For anyone with so long an association with this great industry it is alarming to think of its consequent uncertainty. It has been thrown into perplexity by the effects of the changing pattern of consumption through the development of new sources of fuel and energy.
I now turn to the Order itself. My right hon. Friend has given us a detailed explanation of what it is about and how it will help to reshape the coal mining industry as a result of being subjected to a great number of vicissitudes. A great range of information is always required for satisfactory judgment. It would be a sad business if we were stifled for lack of vision, but I feel it is a spur by endeavouring to recall the measure of progress that has been made under nationalisation since January, 1947.
What comes unbidden to my mind is the position of the coal industry when it was controlled by private enterprise, and the shocking state in which it had been allowed to degenerate in trying to make as much profit as possible. I will not recapitulate all the details of those circumstances, but the experts acknowledged that the industry needed drastically reorganising and that its structure and methods of production would have to be planned. As a consequence, heavy expenditure and a large capital investment was made to bring the industry up to technical and mechanical standard.
That was in the years when production was needed to meet the almost insatiable demand for coal. We believed it to be the foundation of the country's prosperity, but today, instead of the kind of security that we imagined would be a feature of the coal mining industry under State control and ownership, we have an industry absolutely drowned with frustration, bewilderment and cynicism as to its future.
What did we expect when it was said that on the assumption of rapid and continuous growth, inland demand for all forms of fuel would exceed 300 million tons of coal equivalent by this year. That has, no doubt, been repudiated by subsequent events. But, fed by that hope and expectation, and acting on the best advice, 1928 the Coal Board estimates its requirements for the purpose of borrowing powers and at the same time aims to find large sums of money from its own resources.
Although we have a nationalised coal industry, a nationalised gas industry and a nationalised electricity industry operating in an expanding energy market, the Coal Board now faces a deliberate and calculated contraction. These borrowing powers should be considered in that light, inasmuch as they will help the Coal Board in its major task of securing for coal a share in the energy market, a share which must be won by efficient effort, and which will best serve the life and interests of the nation.
It is in that context that I support the Order. I feel that we ought to support the Coal Board, for coal can play its part and make its contribution instead of being singled out to play a declining role. There have been criticisms of the coal mining industry and of the Coal Board. I do not object to criticisms, provided that they are constructive, but when they go to the point of discerning nothing but faults to discredit nationalisation, there is need to draw the line.
Lord Robens and the National Union of Mineworkers have pleaded for time to enable the industry to complete its modernisation programme, and they have advanced their claim to resist a further heavy cut in the coal production target. Whatever public money has been spent, with the valuable aid of the Board's borrowing powers, cannot be regarded as extravagant expenditure, especially when the Coal Board has been forced to take up arms in a commercial war. This is what these borrowing powers Orders are about. It is highly significant that the Coal Board has seriously tried to compete by providing means of increased production. The yardstick is output per manshift, and this has risen to a record of 39 cwts.
Management at the higher levels has been determined to provide the most advanced tools to produce coal at low cost. It may be that the more is accomplished the more remains to be accomplished. But those who have planned and worked to modernise the industry deserve every credit. After all, the secret of success lies in just that—what a man sets out to do welt It is such accomplishments 1929 which have made Britain the most advanced coal mining engineering country in the world. Without the financial structure laid down in the nationalisation Act and without these borrowing powers, improved efficiency in the use of coal face machinery would not have been possible. Moreover, the moneys borrowed for new investment in ancillary activities is expected to enable expansion of output from the more highly productive collieries.
But that in itself cannot remove the disquiet felt at this critical period, for between now and the 1970s another 200 pit closures are expected, and the coal resources of many of them will be exhausted by that time. In the light of the reorganisation which is taking place, and to keep the future of coal in perspective, it is interesting to read what was said in an editorial in the Financial Times on 7th July last.
Referring to the process of streamlining the coal and gas industries, and to the commercial criteria of the gas and coal industries, it stated:However anxious it may be to take advantage of the new discoveries, the Government must look at the situation from a wider point of view than that of the gas industry. There would be heavy costs, direct and indirect, to tear if the coal industry were to go sharply down-hill. These have to be taken into account when reckoning how much it is worth paying to protect it for a little longer.Even though that stress is deliberately made, we do not regard these borrowing powers as protection. In these perplexing and critical times we recognise that coal no longer has the monopoly in the energy market, but some of the anxieties must be mastered and overcome. A great many of us firmly believe that it is not in the national interests that we should stand by and watch the coal industry become a shambles and drift towards chaos and disaster.
It is all very well to say that the impact of natural gas could be absorbed by the expansion in the demand for energy. We have been in an expanding energy market for years, but that has not even sopped coal from declining.
§ Mr. Albert Roberts (Normanton)
Does my hon. Friend agree that the power demand is not expanding enough?
§ Mr. Woof
Yes, I quite agree. That is part of my argument.
1930 We know that the Coal Board has options to participate in licences held by Gulf Oil and Allied Chemical, and that it is also joining with another American enterprise, the Continental Oil Company. But we must try to view the energy picture as a whole. The discovery and supply of natural gas should be accepted as complementary to indigenous coal. It is a welcome addition to this country's natural resources, which should together form a basis of fuel policy by making possible restrictions of oil imports and the cessation of imports of natural gas. Such a policy would relieve the country's balance of payments and dependence on imported fuels.
But no one can safely say how big the North Sea gas field is. No one doubts that results have been achieved more quickly than was hoped. It is expected that gas will be produced, as my right hon. Friend the Minister said, at the rate of at least 2,000 cubic feet a day by the 1970s, which represents 25 million tons of coal equivalent a year. But I have seen it stated that the supply might be used up in between 25 and 30 years. If that is so, North Sea gas is no answer to our permanent fuel problems.
In this light, it is important to know what measures are forthcoming. In the meantime, a great deal has been done. The Coal Board has developed a capital-intensive and highly automated industry to make it viable. Today, nearly 87 per cent. of all British coal is won by power loaders and hydraulic supports. That can be classified as the strategy to meet the grave competition in the energy market.
It is important to bear in mind that the biggest customer of the Coal Board is the Central Electricity Generating Board, on which the Coal Board was relying to take 100 million tons of coal a year in the 1970s. It now looks as though nuclear power will be the coal industry's biggest rival in the electricity generating market in the 1970s. This still has to be proved.
The first nuclear power programme amounting to 14 million tons of coal equivalent has certainly not been competitive on price with modern coal-fired plant. Now the nuclear power chiefs say that the second nuclear programme will be based on the advanced gas-cooled 1931 reactor and claim that it will produce electricity at a price 10 per cent. cheaper than the latest conventional station. If the nuclear forecasts are correct—and at this stage they are only forecasts—it means that the coal industry, to be competitive, would have to put coal under the power station boilers at 3d. a therm, which is about 15s. a ton less than now.
§ Mr. McGuire
I am interested in this question. I do not want to prolong the proceedings, but surely my hon. Friend is aware that following Questions in the House the estimates for the A.G.R. have been revised upwards and now the price is 25 per cent. dearer than was forecast only two years ago.
§ Mr. Woof
Yes. If my hon. Friend had been a little patient, and had waited, he would have found that I agree with him.
We know that the first nuclear power programme was prepared in the 1950s at a time when there was a shortage of coal. In 1957, the programme for 5,000–6,000 megawatts was laid down for nuclear power, but later, in 1960, doubts arose about the economics and it was decided to slow down the programme, putting back the completion date until 1968, and to limit it to 5,000 megawatts. When this programme is completed it will displace 14 million tons of coal a year and will render 28,000 miners redundant.
This is anything but satisfactory to the Coal Board. Studying the economics of the matter before anything passes beyond a certain definite and apparently final stage, I am glad that the Coal Board is now represented on the working party comprising representatives of the C.E.G.B. and the United Kingdom Atomic Energy Authority.
Facing the economic struggle, it has been a serious exercise for the Coal Board. It has never escaped from its responsibilities to bring down the price. The industry is already producing 12 million tons of coal under 3d. a therm, 70 million tons under 4d. a therm and 126 million tons under 5d. a therm. This is the result of the continuous drive to raise the levels of output and productive efficiency throughout the industry. It is because of these factors that those 1932 of us who represent constituencies in County Durham look with trustful equanimity on the Coal Board trying to make the best use of its resources.
Since vesting day—January, 1947—until 31st March this year £120.9 million has been spent in capital expenditure in the Durham coalfield. During the last three years £18 million has been spent. This has been necessary in order to concentrate production on reconstructed pits. These have a long life and are a viable proposition in the working of remunerative seams. The manpower has been drawn from the closure of exhausted and difficult pits, but over the last few years this streamlining and reorganising has made great demands on the men and managements. Many of them have been directed to one pit after another on account of closures, and with awkward shifts and long travelling it has made working life intolerable.
I must also mention that, in trying to solve the problems of redundancy, thousands more volunteered to work at collieries in the Midlands and Yorkshire and even in South Wales, thereby relieving the pressure of pit room. In fact, the manpower in County Durham has dropped from 110,000 in 1947 to 53,000 at the present time. While we have always argued that the transition was being pressed into too short a period, we are also aware that the Coal Board's revenue must be sufficient to cover day-to-day costs of production and to make provision for depreciation and for financing of capital investment.
This enabled many of the reorganised mines in the North East coalfield to supply power stations in the Thames Estuary and the great industrial combine of Ford's at Dagenham. All this occurred in spite of the fact that oil has made serious and progressive inroads into the Board's markets. Incidentally, sale of oil in markets where it competes with coal increased from 16 million tons equivalent in 1957 to 50 million tons at the present time.
I do not think that it would be inappropriate to say that the Coal Board deserves a tribute for meeting this challenge of salesmanship. While that is part of its success, it is worth watching what one might call the dread forces of 1933 progress that we regard the idea of the Central Electricity Generating Board building a nuclear power station at Seaton Carew as a change of the utmost gravity.
It is, therefore, highly relevant to know whether the Government will allow a nuclear power station to be built in County Durham. I think that it may be agreed that whenever a man creates anything new he pursues it. But such a decision is crucial to the coal industry in County Durham. Our justification for a coal-fired power station is based on people's livelihood, for whom we have a strong moral, social and economic responsibility, and whose future could be seriously jeopardised. I ask the Government to seriously consider whether it is economically right for the well-being of a whole community to be sacrificed.
I have been looking back at the records and I see that on 14th March, 1963, the then Prime Minister, Mr. Harold Macmillan, stated in the House that the building of a power station in County Durham was regarded as important from two points of view: chiefly, in the first instance, for the use of Durham coal and the need of a further power station for the needs of the area. It was accepted that that would become necessary. I agree that circumstances may have changed, but no decision should be taken which will gamble with the livelihood and future of all those who are dependent upon the coal industry.
What is vitally important is that there is not much prospect of alternative employment. Men do not go down the mines because they like it. They have no other choice. We are tired of appealing for alternative industry. We read with great interest the report on coal finances for 1965, in which the Government promised to set aside special funds to provide alternative employment for these areas that were to be affected by pit closures. There has never been a penny spent in my area and I do not know of any other.
The men in the industry and their forebears have contributed in large measure to our great industrial progress. If the Government allow a nuclear power station to be built which will displace a further 8,000 men they will be travelling on a dangerous economic road.
§ 2.20 a.m.
§ Mr. David Crouch (Canterbury)
It is not my intention to keep the House long. I wish only to make a short intervention, but not because the hour is late or because I consider this subject to be unimportant. The subject which we are discussing at this late hour, and have been discussing for four hours, is one which has excited emotions among all hon. Members who have spoken and there are still many who wish to speak.
The reason for my intervention is that I have a modern pit in my constituency. It has not been mentioned so far this evening, but there is a small extention of the coalfield in Kent. I wish to make some reference to the situation in the Kent coalfield.
I followed the Minister with great interest as he went through his lengthy speech and his calculations and plan for the future. I will look forward with greater interest to the time when he tells us his national fuel policy. I believe that it is essential that the coal industry and all the other fuel industries should know soon the whole nature of the Government's national fuel policy. The emotions we have heard in the House tonight have been not because we are so concerned with the economics of the subject, but because of the human problem that is at stake in the changes which will be brought about by the Minister's fuel policy in the future. It is essential that the Minister bear in mind that management and men must know where they stand long in advance, as far in advance as is possible.
I listened with great attention to the sincerity of the right hon. Member for Easington (Mr. Shinwell), who spoke from such long experience, having seen great changes in the industry and having had such close association with miners. I, too, have had close association with miners. During the war, I had the honour to serve in a Scottish regiment of Fifeshire miners and to go abroad with them and I never found a greater set of men in my whole experience until I paid my first visit down my own pit in Canterbury.
There I found no sign of any feeling of Luddite-ism. Instead, I found a remarkable spirit among working men in conditions which, although I have worked in factories, I know simply cannot be 1935 compared with working on the surface and where the rules of safety such as one demands in a factory are just not possible at the pit face.
These men have a wonderful spirit, the sort of spirit we talk of in the House when we talk of this country being in some danger economically. I do not wish to draw on the emotions of the House by saying so, but I came from my own pit inspired and encouraged by the people I met. It is because this is a human problem, because men want to know where they stand, because they give of themselves in hard work and sweat, that they want to know where they stand for their wives and children in the future. They are making a great contribution to the nation's economy and they deserve from the Minister the same great care that he has given to the economic aspect of his vast problems. They deserve a very big and special care for their future.
I hope that we will not hear too much of the phrase of "running down" the industry. I welcome the warnings that have been given in some speeches that coal still can make a major contribution to the reconstruction of our economy. I remind the Minister of the Kent coalfield. There has been a great investment there in modernisation. The four pits employ about 5,000 men. Productivity has increased enormously, but still we wait for those pits to make a profit. I am confident that perhaps in another year we shall see them making profits. But there is concern among both management and men in those pits about how long they will be allowed to continue in the Coal Board's overall plan. There is a question mark hanging over them.
The pits make an important contribution to the local economy in East Kent. The pit workers are high wage earners, and a human factor which must be remembered is, that should there be a decision at some time in the future to close the Kent coalfield, the mine workers are neither men of Kent nor Kentish men. They come from Durham, South Wales, Scotland and Yorkshire. They come from mining families, and are working as miners. If there should be a closure in Kent, what can the Government and the Coal Board offer miners who are declared redundant, because it is not an industrial 1936 area? I hope that the Minister will bear in mind particularly this small thought of mine about 5,000 very important people.
§ 2.27 p.m.
§ Mr. Harold Finch (Bedwellty)
We are dealing tonight with proposed borrowing powers for an industry which has helped build up the industrial prosperity of our country. In years gone by, miners have produced more and more coal to meet an ever-increasing demand. This country became the workshop of the world, and it was built largely upon coal.
Times have changed, and other forms of energy have come into being. The pattern of business has changed. The miners are facing the changing position with the same fortitude, patience and courage as they displayed years before, when coal was in high demand. When the history of our times comes to be written, men and women will marvel at the attitude of the miners. Mention has been made of the activities of the Luddites in years gone by, but there has been no Luddite atmosphere created among miners by the enormous changes which have taken place in the last ten years. In that time, the mining industry has lost 300,000 men, and 50,000 in the South Wales coalfield alone.
There has not only been a loss of manpower, because methods of production in the industry have changed. It is 90 per cent. mechanised today. New techniques have been brought into operation. That has given rise to new methods of wages. My hon. Friends know what an exercise it must have been in changing wage rates with changing conditions of working, but this has been done, and it continues to be done, by the union and the Coal Board, which have faced the changes in the industry.
Men have gone out of the pits, pits have closed and the men have been redeployed in other pits, but there has been hardly a ripple on the water in the House of Commons. During the years that I have been a Member of House, I have seen Ministers of Labour come to report that delicate negotiations are taking place because of a stoppage or threatened stoppage in one industry or another and that hon. Members on the Opposition side should not say too much at that moment because of the serious position in the industry in question.
1937 That has never happened with the mining industry. During all the years I have been a Member, not once has a Minister of Labour reported on a national stoppage or threatened stoppage, or, indeed, a stoppage of any great extent. I have been here on occasions when a Minister of Power has, unfortunately, had to report on a mining accident or an explosion.
Recently, my right hon. Friend has told us of the seriousness of the oil supply position as a result of the Middle East crisis, with all the fear which that creates in the minds of the people. We hope that my right hon. Friend will overcome the difficulties of a shortage of oil. With oil, however, the question of the cost of production does not arise. We require our oil supplies from the Middle East to keep our Services moving. Therefore, when dealing with this subject, we need to bear in mind that it is not always the direct cost of production that is involved when dealing with energy but with military needs. We are scheming and negotiating today because we have to think always of oil.
There has been an increase in the output of coal per manshift. One hon. Member gave the figure of 34 cwt. per man-shift. It rose in the last quarter of last year to 39 cwt., or 40 per cent. higher than the 1960 level. This has been done in co-operation between the Board and the National Union of Mineworkers to make the industry more competitive. That has been the spur, and rightly so.
The biggest consumers of coal are the electricity power stations, but there has been a marked decline in the last two years in their consumption of coal. That is partly due to the increasing part played by the nuclear power stations, the output of which in 1965–66 amounted to 6.8 million tons of coal equivalent. In 1966–67, it was 8 million tons, in 1967–68 it is likely to be 9.5 million tons and by 1970 the nuclear power stations are expected to contribute 14 millions tons of coal equivalent, which corresponds to the employment of 28,000 miners. That is a tall figure, and yet none of the nuclear stations is operating at a cost which is competitive with electricity generated from a new coal-burning station.
Coal-burning stations produce cheaper electricity than do the nuclear-powered ones. I know that my right hon. Friend 1938 says that nuclear-powered stations will produce it cheaper in the future. He is no doubt well advised, but I remind him that though it was originally stated that the cost of electricity produced by nuclear power would be 0.6d. per unit, this was revised, and the cost went up to 1d. per unit. That is the position. Coal-fired stations produce electricity at a cost of 0.6d. per unit. There is nothing hypothetical about this. These are the facts. Up to now it has cost more to produce electricity by nuclear means than by burning coal. My right hon. Friend says that the cost of producing electricity at nuclear-powered stations will become cheaper than producing it by the use of coal, but this is only what is likely to happen. We can only deal with the facts as we see them. It is no good dealing with hypothetical situations.
Much has been said about coal being competitive. I submit that up to now it has been. When men in the industry are continually being told that pits must close, that there must be a further decline in manpower, even though the industry is competitive, they begin to wonder whether there is any point of continuing in it. They see pits being closed and men going out of the industry. It is said that all this is being done to make the industry competitive, and yet they have to face further closures in the future. This is what the men are thinking at the moment. Although I agree with my right hon. Friend that nuclear power may be cheaper in the future, I submit that we ought to deal with the facts as we find them now.
We are not against nuclear power stations as such. This was made clear by my right hon. Friend the Member for Caerphilly (Mr. Ness Edwards). It is the phasing of them which is important. So far, nine have been built, and more are in the offing. These nuclear power stations are affecting the consumption of coal now. The figure has dropped considerably. This is the problem with which we are faced, and I submit that in any future policy which he considers my right hon. Friend must look closely at the question of having coal-burning stations as opposed to nuclear-powered ones. If the number of nuclear-powered stations is to be increased, their construction should be phased to give the industry a chance to adjust itself to the 1939 changing conditions. If, over the next few years, we are to face a loss of manpower to the extent which I have described, this will be a calamity to the industry.
It would pay my right hon. Friend to say, "Let us get on with the building of nuclear power stations more gradually." I agree that nuclear power will be the source of energy in the future, and that we want to encourage it within reason, but we do not want these stations to be built at such a rate that they will affect the employment of people in the mining industry, with all the hardship which will result. I therefore ask my right hon. Friend to consider the situation very carefully. Nuclear power stations are too big and expensive, and cost £500 million more than conventional ones and cannot produce electricity competitively with coal—
§ Mr. Finch
But my right hon. Friend refers to only one station. Coal cost less than nuclear power in the early stations. I hope that he is right and that nuclear power will become more important to our industrial activity, but it should be phased so as not to shock coal mining unduly, as in the past.
On 9th May, in answer to a Question by my hon. Friend the Member for Mansfield (Mr. Concannon), the Minister said that the Central Electricity Generating Board's programme, excluding Oldbury and Wylfa, which were then in operation, would cost £390 million, excluding interest. The programme of the other power stations, excluding interest, would cost £750 million, and a coal-fired programme on the same basis would cost £225 million. What a difference. We must consider this before making further decisions about nuclear power.
The partly disabled men in the industry are the responsibility of the Coal Board, and I wish that it would make some definite statement. Lord Robens has said that he is under an obligation to assist those disabled men who are declared redundant. The problem in South Wales 1940 concerns disabled men of 50 to 55, as others travel to work or are re-employed. Their numbers are growing. Also, hundreds of men suffer from pneumoconiosis who are still without a job and have gone out of the industry.
I beg my right hon. Friend to use his influence with the Coal Board and other Departments to take special measures to deal with this problem. I welcome his statement today and recognise his difficult task over a fuel policy, but ask him to bear in mind the present position of nuclear power and to allow time to phase this in the years ahead and to ensure that if the mining industry is to contract, it will be done more gradually than at present, and that, before any more pit closures, he will consult his colleagues to make sure that alternative industries are made available.
§ 2.45 a.m.
§ Mr. Eric Lubbock (Orpington)
The final remarks of the hon. Member for Bedwellty (Mr. Finch) reinforced me in my view that, in so far as it is socially and economically practicable, the coal industry should be run down as fast as possible.
The hon. Gentleman mentioned that thousands of men were suffering from pneumoconiosis or had otherwise been disabled as a result of their service in the pits. Other hon. Members have said that men do not go down the mines because they like the work, but because they have no choice. I submit that mining is not a suitable occupation in the second half of the 20th century; and that the sooner we get men out of the pits and into cleaner and more up-to-date occupations the better it will be for those who are at present compelled to follow this occupation.
I admit that there are enormous problems of retraining. As the hon. Member for Canterbury (Mr. Crouch) said, many of the people in his constituency live there not because they are Kentish men, but because they originally followed the occupation of coal mining in Durham and elsewhere and went to Kent because work existed there.
How to train men in new skills in the middle of their working lives raises enormous problems, and it is this subject to which we should be devoting our 1941 energies. We should not blind ourselves to the economics of the coal industry by making the sort of comparisons made by the hon. Member for Bedwellty, between coal-fired power stations of the present generation and nuclear stations of the previous generation.
As the Minister said, even a magnox station of obsolete design is already fully competitive with the coal-fired stations which are being erected now. If one looks at the figures which were given in evidence to the Committee on Science and Technology in respect of the new gas-cooled reactors at Dungeness B and Hinkley Point B for the 'seventies one sees that, even on the most cautious assumptions, nuclear energy will be 10 per cent. cheaper than its coal-fired equivalent. The Chairman of the United Kingdom Atomic Energy Authority has told the electricity industry that in the six years during which the second nuclear programme will be put into effect, he anticipates that the cost of electricity will be reduced by 30 per cent.
§ Mr. Lubbock
I agree, but his view is confirmed by the Chairman of the C.E.G.B. The trend can already be seen in the first two tenders which have been received for reactors of this type. The Hinckley Point B tender, which has recently been awarded, was substantially cheaper than the first station, and Dungeness B will be 10 per cent. cheaper than its nearest coal-fired equivalent.
Hon. Members who represent coal-mining constituencies must not blind themselves to the fact that the writing is already on the wall for this industry. The task of the politicians, Lord Robens and his colleagues in the N.C.B. and others, is to see that the best possible transition is made for those who work in the industry. I admire the work that Lord Robens and his colleagues have been doing in this respect. The coal industry has one of the best redundancy schemes of any industry, along with imaginative arrangements for moving men from the less economic pits to fields where coal can still be competitive.
The hon. Member for Bedwellty referred to the enormous loss of manpower suffered by the coal industry, but many other industries, such as ship- 1942 building, textiles and the railways have suffered considerable manpower reductions.
§ Mr. Lubbock
I am speaking in proportionate terms. It has been pointed out that in the 'twenties the coal industry employed about 1.2 million men. These other industries were not as large to begin with. Thus, proportionately, the loss of manpower on the railways has not been very different. I am glad to pay tribute to the fact that the reduction in manpower has been effected by the coal industry in a far more humane way.
The Minister's figures are not "up the creek" at all, as I think one of the Derbyshire Members suggested. If an output of 156 million tons could be achieved by 1970 it would greatly ease the burden that the House has placed on Lord Robens in making the adjustments of which I have spoken. The House should not bind the Minister to the figure he has quoted this evening. We should look at it as a planning target to which the industry and the right hon. Gentleman are attempting to adhere.
All these figures are bound to be affected by technological developments in other sectors. When the Government produced their fuel policy only about three years ago, no one imagined that by 1970 we would be producing daily about 2,000 million cubic feet of natural gas from the North Sea, but that is just one of the factors that has completely upset the calculations. No one can be quite certain that between now and 1970 there will not be further large-scale developments. I see that there are even prospects of oil being discovered in the North Sea off the Scottish coast.
Such developments could completely invalidate today's estimates. I very much hope that such discoveries are made, as they would transform our whole energy position, as the discovery of natural gas is already bidding fair to do. It would mean that we would be far less dependent than we now are on imports of oil from the Middle East and of natural gas from Algeria. The hon. and gallant Member for South Fylde (Colonel Lancaster) said that there was some anxiety about imports of natural gas from Algeria having been cut off because of the dispute in the 1943 Middle East. I wonder whether that might not have been a good thing. If it were possible to rescind that contract and depend entirely on our indigenous resources, we could economise on foreign exchange and more rapidly develop our resources only a few miles off the coast—
§ Mr. Adam Hunter (Dunfermline Burghs)
Is the hon. Member aware that several pits can send out coal to generating stations at 3d. per therm, and that the industry hopes to better that in the near future?
§ Mr. Lubbock
I am aware that the Chairman of the Coal Board has said that if he were absolutely free to determine his own pricing policy he could produce coal at the power stations in the most favourable areas at 3d. a therm. But, if he were to do that, it would no longer be possible for him to have an averaging policy throughout the whole of coal production, and the price to certain other consumers would have to rise.
If I may say so, Lord Robens, for whom I have the utmost respect, is not the most brilliant economist. He talks of the actual cost of producing coal from the low-cost fields, and of how much better it would be if he were able to deliver at that cost to the power stations, quite ignoring the fact that in South Wales, Kent and other places where coal is not mined economically, and where the consumers are subsidised by the cheap coalfields, the consumers would have to pay far more than they are paying at present if Lord Robens were to let the power stations in those areas have the coal at cost price.
§ Mr. Concannon
Surely the hon. Member knows that 60 per cent. of the coal delivered to the power stations is delivered at 3½d. a therm and the average is 4½d. a therm?
§ Mr. Lubbock
The hon. Member is suggesting that very little difference could be effected by bringing the price down to 3d. a therm. If, at DRAX, the price is already 3½d. and that station is to produce at something like 0.57d. per kilowatt hour, whereas at Hinkley Point it is down to 0.54d., no difference will be made by calling the price 3d. instead of 1944 3½d. a therm. The hon. Member is helping to make the case for nuclear power as against coal fired electricity stations. I advise the hon. Member to look at the figures given to the Committee on Science and Technology by the Chairman of the Electricity Generating Board.
Perhaps I should not go into this matter in great detail. I am a little inhibited by having been a member of that Select Committee, although it is different from every other Committee in that our evidence has been made available to the public outside and to hon. Members. Perhaps there is a little more latitude about what we say than, for example, in the Select Committee on Nationalised Industries.
§ Mr. Shinwell
Will the hon. Member enlighten me on this? He says that his Committee has been advised by the Central Electricity Generating Board experts, but Lord Robens is advised by other experts. How are we to judge? He seems to dismiss the 400,000 men who will be displaced if the mining industry is run down to negligible proportions. How are we to find alternative employment for these men?
§ Mr. Lubbock
There are about 400,000 employed in the industry at the moment. I am not talking about running the industry down to nothing, so we are not talking about 400,000 being found employment between now and 1975, which is the sort of period to which I am referring. The transition will not be so rapid as that. The problem is a manageable one, provided that this House and the Coal Board grasp that it is a matter of some urgency. We have to retrain people who have worked in the industry for a considerable time in other skills and not accept, as the hon. Member for Canterbury appeared to accept, that because they have been employed in the industry in Durham they are entitled as of right to a similar job in Kent.
The age structure in the industry makes this difficult because more men of 50 and over are in it than on average are employed in industry as a whole. We therefore have a bigger retraining problem than in other declining industries, such as shipbuilding and railways. That makes it even more necessary for the House and the Coal Board to give serious and urgent attention to retraining these 1945 people and finding adequate means of easing their transition to other employment.
If it is not out of order, I want to refer 70 the Order itself. It has not been the subject of much discussion tonight. In the 1966 balance sheet of the Coal Board the total in loans from the Minister was £575 million and the bank overdraft was £4.7 million, making, roughly, £580 million. The Minister now asks for an increase in the Board's borrowing powers from £700 million to £750 million. I do not know—I have tried to ascertain this evening without success—what the total expenditure of the Beard was during 1966–67 over and above its depreciation provided for. It is not possible for me to say whether this increase in the borrowing limit is justified in the light of the 1966–67 balance sheet, or whether the Minister is anticipating some likely changes in the Board's finances which will take place in the next two or three years. Before the debate ends, the Parliamentary Secretary should let us have a little more information about the profit and loss account results for 1966–67 and about when he thinks the borrowing limit of £700 million will have been passed.
I realise that the Minister said that before long it would be necessary to introduce a new Bill providing for a reconstruction of the Board's capital. Here again, it is necessary for the House to know, before approving the Order, roughly when that position will be reached. If the Minister could give the answers to these two questions, I think that there would be no objection to the Order.
I do not agree with hon. Members on this side who have sometimes contended that the Board should not be entitled to diversify into other areas, whatever they may be. I was a supporter of the idea that the Board should explore for gas under the North Sea. I believed at the time, and I still believe, that it would help to give a boost to the miners' morale if they thought that a profitable operation was being entered into by their enterprise which would assist in making it viable and in making their employment secure for the future.
§ Mr. Albert Roberts
Does not the hon. Gentleman agree that there should be more research into the possibilities of 1946 getting oil from coal at an economic price?
§ Mr. Lubbock
I understand that considerable research has been undertaken into this by the Board in the past and that, as at present advised, it finds that it is not economical in comparison with obtaining oil from ordinary wells. I certainly believe—this may help the hon. Gentleman—that the Board should continue to undertake all possible research into the use of coal or coal derivatives in other respects. For example, I think that there is no objection whatsoever to the Board's going into the brick-making processes which it has entered into in the last few years. Any enterprises which can be directly connected with the getting of coal are perfectly legitimate. It is rather interesting to notice that tonight we have not heard from the Conservative Party any of the objections that we heard last time we debated the coal industry, when there was the question of lending a very small amount of £6 million to explore for natural gas under the North Sea.
I am glad that this principle has now been accepted, and I would recommend the House to accept this increase in borrowing limits.
§ 3.3 a.m.
§ Mr. John Cronin (Loughborough)
I have the greatest respect for the undoubted abilities of the hon. Member for Orpington (Mr. Lubbock), but I listened to much of his speech with complete astonishment. If I heard him aright, he wants to run down the coal industry as rapidly as possible and replace coal production by other forms of fuel as quickly as possible.
The hon. Gentleman is the official spokesman of the Liberal Party. I am sure that all of us would like people in our constituencies to know what the official policy of the Liberal Party is about the mining community. There seems to be no doubt—all our mining supporters should know this—that the Liberal Party is in favour of a complete rundown of the industry as rapidly as possible.
I always enter these debates on power with a certain amount of diffidence, because so many of my right hon. and hon. Friends have immense experience in this industry, experience which they 1947 gained in trade unions—in the National Union of Mineworkers and in other allied unions. In my constituency, I have four collieries. I have three belonging to the South Derbyshire group—Rawdon, Donisthorpe and Measham, and one belonging to the Leicestershire group—Lount. This is an occasion when I feel that I ought to express some of the views of the miners in those collieries.
I very much welcome the Minister's speech. I particularly welcome his asking the electricity industry to consume a further 7 million tons of coal a year. This will be a substantial help to the coal industry. We are very glad that he has announced special measures to assist those miners over the age of 55 to retire. I think this is very helpful and human work. I am also glad to hear that we are to have a White Paper on energy policy—
§ Mr. Lubbock
I thought the hon. Gentleman disagreed with my view. Now he says that he agrees with the Minister that miners over the age of 55 should be allowed to retire. Is that not what I was saying?
§ Mr. Cronin
I was referring to redundant miners. I got the impression that the hon. Member wants all miners to retire so that other forms of energy can take the place of coal. This appears to be the clear policy of the Liberal Party.
I think that the present Minister is probably the most able Minister of Power we have had during the 12 years that I have been a Member of this House, so if I make some criticisms of him I hope that they will be regarded as friendly ones. My right hon. Friend said that the decline in the market for coal is inevitable. He said that a contraction in the coal industry is inevitable. There is a certain amount of pessimism about this attitude. My right hon. Friend is subject to all kinds of pressure. He has pressure from the oil interests, from industrialists who want the cheapest form of fuel and from his own economists in his Ministry. I believe that nobody can be more wrong about economics than an economist when he really gets going.
This pessimism on the part of the Minister about the coal industry is unjustified. Earlier, I drew his attention to the situation in the United States 1948 and in the Soviet Union, and I believe that the hon. and gallant Member for South Fylde (Colonel Lancaster) echoed this point. In the United States an enormous expansion is taking place in the coal industry. It is hoped to increase the output from 360 million tons to 600 million tons a year, a gigantic increase. In the Soviet Union they are talking about 1,000 million tons of coal a year.
Obviously, we cannot compete with those figures, but not all the coal—not even the major proportion of the coal—in the Soviet Union and the United States is obtained easily. I am quite sure that if there is room for this tremendous expansion in the coal industries of those two large industrial countries, it is not necessary to have a run down in the coal industry in our country, which is of a similar industrial type.
The present Government's record in the coal industry has been mostly continuously good. There has been the massive writing off of the Coal Board's debts. A sum of £30 million has been allotted to the social cost of reorganisation. There has been the resistance to imports of foreign coal. There is the continued 40 per cent. tax on fuel oil, and there has been discrimination against oil for power stations.
These have been positive and helpful acts for the benefit of the coal industry, but they are no more than minimal aids. They are all essential, for what the coal industry should have is protection in just the same way as agriculture, shipbuilding and many other industries. Such protection is in the national interest.
We must not forget the effect on morale of the measures proposed. The efficiency of any industry depends to a large extent on morale within it, but for the coal industry, an industry in which there is a large element of danger and particularly disagreeable conditions of work, morale is all-important. This applies also to the families of miners, who may have to live in isolated communities, often remote from the more agreeable amenities of modem civilised life.
For this reason, it is most important that the coal industry should have a clear indication of Government policy, 1949 and that policy should be one which will put a stop to the gradual running down of coal production which has been different Governments' policy year after year. For the sake of morale in the industry, there should be a radical change in this policy.
The rôle of oil in our national fuel policy presents increasing danger. Both nuclear power and North Sea gas are sources of energy indigenous to our country and, obviously, they are unexceptionable, provided that they are economic. On the other hand, there are serious dangers in the increasing rôle of oil. In 1956, coal output was about 217 million tons, and now it has run down to 172 million tons, or 165 million tons of deep worked coal. In 1956, oil consumption was 37 million tons of coal equivalent, and now it has risen to 93 million tons, a nearly threefold increase. This cannot be a healthy state of affairs.
First, there is the political instability of the oil producing countries. Oil supplies always have an element of uncertainty about them. Recent events in the Middle East have reminded us how tenuous the maintenance of oil supplies can become. Excessive reliance on oil can have a dangerous influence on pricing, as well. The various consortia and large companies which send oil to this country are keen business organisations. They are shrewd and ruthless. I am sure that, if this country became excessively dependent on oil as a fuel, the price of oil would go up out of all proportion. This is a serious risk which has not been yet sufficiently considered.
The other important consequence of increased oil consumption is on our balance of payments. Throughout this century, Britain has been cursed by balance of payments difficulties, and since the war we have had crisis after crisis. It would be the height of folly, therefore, to put undue reliance on a fuel which is 100 per cent. an imported product and which puts a corresponding burden on our balance of payments. That cannot be sound economic sense.
I accept the point the Minister made, that the price of coal has an important effect on our balance of payments as we must have cheap fuel to export competitively. But, surely, the solution is not to import more foreign oil, which has a 100 per cent. adverse effect on our 1950 balance of payments, but to improve the efficiency of the coal industry by injecting more capital into it so as to reduce the price of coal. After all, coal is 100 per cent. an indigenous product, and capital expenditure on increasing efficiency in coal production must have a favourable effect on the economy as a whole.
The coal industry deserves all the help and support it can obtain from the Government and the House. I am not suggesting this on emotional grounds, although there is room for emotion when discussing the industry when we think of the disagreeable dark working conditions to which a large number of men are confined, of the dangers they risk, of the thousands of miners who are out of breath and coughing with pneumoconiosis, and of the thousands who have been severely disabled. But, at the same time, the House must consider the coal industry dispassionately and in terms of the national interest.
The industry has a fine record. No other industry has a finer record in increasing productivity, in flexibility and the redeployment of labour. No other industry has adapted so well to changing conditions. The real remedy is not to cut coal production, but to give the industry more help with capital expenditure to produce coal more cheaply and efficiently. It needs all the support the Government and the House of Commons can give it, and that support will be in the best interests of the country as a whole.
§ 3.17 a.m.
§ Mr. Eric G. Varley (Chesterfield)
Many of the points I wanted to make have already been made. I am getting very tired and I am sure that as those points have been made I can jettison some of the speech I wanted to make. I certainly want to underline some of the points of my hon. Friend the Member for Loughborough (Mr. Cronin) and comment on some of those made by the hon. Member for Orpington (Mr. Lubbock).
My right hon. Friend the Minister made a very important statement tonight. I am still in a little doubt about the sort of production figure he claims he has now allocated—if that is the right word—for the coal industry. Nevertheless, he 1951 made some important announcements. I agree with my hon. Friend the Member for Loughborough that he is certainly the best Minister of Power that we have had in the past 15 years. I think that he is beginning to understand some of the problems affecting the mining industry, and I hope that he continues to show this awareness of them.
As my hon. Friend said, we have a great deal of despair and despondency in the mining industry at the moment. It is an industry which is outstripping all others in productivity, but which still has an uncertain future. My hon. Friends have pointed out many times in the House that if other industries had the same productivity record we should not be experiencing the economic troubles that face the nation today. Only this afternoon, my right hon. Friend the Prime Minister, answering a Question by, I think, the hon. Member for Louth (Sir C. Osborne), emphasised yet again that no other industry had the coal industry's record of productivity.
Now the miners are crying out for help and understanding, and some sort of respite from the too rapid rundown of the industry. My hon. Friend the Member for Bedwellty (Mr. Finch) has effectively made the point that miners are not Luddites. When one looks at the transition that has taken place in the industry, with men who were brought up and trained only to use hand tools at the coal face now using modern, sophisticated machinery, there can be no possible reason for suggesting that they are Luddite in their attitude. They are nothing of the kind.
I recognise that the problem is not easy for my right hon. Friend the Minister. He has a difficult task in trying to solve the conundrum of competing fuels. In referring to oil in relation to the competitive position of coal, my hon. Friend the Member for Loughborough pointed out that in foreign currency oil costs us about £500 million a year. Some people claim that this is offset by invisible exports, but that has never been quantified and no figures have been given to the House. My hon. Friend the Member for Bedwellty pointed out that the Opposition on occasion quaintly talk about protecting essential British interests in the Middle East, where we keep 1952 massive forces. That massive defence commitment never finds its way into the accounts of the oil industry.
Another competitive force was mentioned by the hon. Member for Orpington—nuclear power, or electricity from the atom. When one says this one's mind begins to boggle. It amazes me how every time this is suggested everybody seems to accept without question that electricity from nuclear power is cheap. I do not accept this on the evidence that I have seen so far. I have seen the battle that has been going on in the Financial Times between the Chairman of the National Coal Board and the hon. Member for Orpington, and I think that Lord Robens is winning. I know that there is a dispute about the working party's report. The hon. Member for Orpington complains that he has not seen it. But we had an assurance from the Minister today that he will publish it and make it available to the Select Committee on Science and Technology so that people will be able to make the comparison.
The nuclear power programme cost a considerable amount of money. The same amount of electricity generating capacity could have been provided at about a third of the cost. We also find that a considerable amount is being spent in providing electricity capacity from nuclear power by means of the second nuclear power programme based on the advanced gas-cooled reactor station. That capacity could be provided by conventional means, principally by coal-fired stations, at about half the capital cost. I know that the figures are in question.
However, I agree with my right hon. Friend the Member for Easington (Mr. Shinwell) that what we are talking about is jobs—alternative employment—for about 100,000 miners if one takes the difference between what the coal industry is producing now and what it is likely to produce if it achieves the new target set by the Minister of Power.
I do not think that we can completely disregard the comparison of costs between coal-fired stations and the A.G.R. programme. Frankly, I think that in Dungeness B, Hinkley Point B and Hunterston B we have all we need. I shall be very disturbed if the Minister takes the decision to go nuclear at Heysham and Seaton 1953 Carew. I do not think that there is any justification for this. I think that we have enough technical "know-how" at the moment to move to the fast breeder reactor station. It is unnecessary and unrealistic and wasteful of national resources to go nuclear at Heysham and Seaton Carew.
§ Mr. McGuire
My hon. Friend is 100 per cent. right. We are to build two Magnox stations which are already obsolete. We will gain no more technical "know-how" that we had from the first couple. He is on the right track.
§ Mr. Varley
I am grateful to my hon. Friend for his intervention. As my right hon. Friend said, the coal is there.
Natural gas will also compete. We all welcome the fact that we have discovered natural gas. It is an indigenous fuel, as the right hon. Member for Leeds, North-East (Sir K. Joseph) said. It is cheap and of marvellous quality and there is no doubt that it will be of great benefit to the nation. But we have to think carefully about how we use it. One thing that we do not know for certain is how long it will last. Will it last for 25 years if it is used at 200,000 cubic feet a day by 1970 and 300,000 cubic feet a day by 1975? This is three times the consumption at the present time. How do we use it? Are we to use it for power station boilers? If we do it will be extremely wasteful.
This source of fuel of high quality is pre-eminently suited to the domestic market. It is non-toxic, clean and already stored in the North Sea. We do not need a big Abingdon gasholder. We have to consider carefully how we use it. As a nation we would look silly if, after 25 years of using it at 300,000 cubic feet a day, the wells ran dry. We should use this great national asset as far as possible in the domestic market.
§ Dr. M. P. Winstanley (Cheadle)
Would the hon. Member not agree that we would also look stupid if, after 25 years, we were still having to mine coal underground, with all the attendant evils? I am wondering, when he advances the advantages, whether he prefers the present evils.
§ Mr. Varley
I was nearly diverted by the hon. Member into going into the 1954 Liberal policy. The Liberal view, as stated by the hon. Member for Orpington, is to close the pits as quickly as possible. What we are primarily talking about is finding alternative jobs. I will come to the point the hon. Member for Cheadle (Dr. Winstanley) has raised. Natural gas should be used primarily in the domestic market.
What we are talking about tonight is the jobs of 100,000 miners. When we talk about reducing annual output from 200,000 tons to 150,000 tons we are talking about the jobs of 100,000 miners in such difficult areas of Durham, Scotland, and South Wales. It is a question of seeing how far we can have economic and industrial reconstruction of these areas. I do not think that there is any evidence that this has been thought out. I do not know whether the Minister was saying that a Cabinet committee would be set up. I would like to see one consisting of the President of the Board of Trade, the First Secretary of State, the Minister of Labour and the Minister of Power, and perhaps the Chancellor of the Exchequer, to look at this problem. If we are to have this kind of reconstruction of the old mining areas we will do it only by that sort of committee with power to act and power to ensure that industry comes into these areas.
The other point overlooked in the debate to some extent is the fact that a tremendous amount of cheap coal is still available. My hon. Friend the Member for Blaydon (Mr. Woof) said that about 120 million tons was being produced at less than 5d. a therm. This is really a phasing problem. To superimpose a further closure programme on the existing programme would bring catastrophic results to these difficult areas.
Already, the Coal Board is closing down a pit a week. We must remember what that means. In some cases there is no new alternative industry for the men to go to. To suggest, as the hon. Member for Orpington did, that the industry should be phased out as quickly as possible and immediately is callous and inhuman. I hope that the Liberals will reconsider their position.
§ Mr. Lubbock
The hon. Member must not misrepresent what I said. I said that it should be done as quickly as is economically and socially practicable. I 1955 meant that it must be done as far as possible with proper phasing of new jobs to replace those lost in the mines.
§ Mr. Varley
I am grateful for that intervention. I have got the Liberal Party off the hook, because the hon. Member gave the impression—
§ Mr. Varley
It is really a question of the economic reconstruction of these areas, which is most important. The Labour Party owes a tremendous amount to the miners. If the Government allow miners to suffer the degradation of the dole queue because of the Government's inability or unwillingness to generate new job opportunities, they will not be forgiven.
I have great confidence in my right hon. Friend. He is tackling the job realistically. Lord Robens confirmed that at the N.U.M. conference. These problems are of serious concern to mining areas, particularly in some of the older districts. In the long term, I am optimistic and hope that my optimism will not prove to have been misplaced.
§ 3.33 a.m.
§ Mr. G. Elfed Davies (Rhondda, East)
My right hon. Friend has a difficult task. Anyone in the industry or who lives in a mining area must realise that that is so under present conditions. It is unfortunate that the hon. Member for Worcestershire, South (Sir G. Nabarro) is no longer with us and has not been for some time. He said that nationalisation had failed. Nationalisation has not failed. It has succeeded. Certainly, no one in the mining industry would turn the clock back and return to private enterprise.
Tonight, we are discussing a proposal to increase the borrowing powers of the Coal Board by £50 million. The reason which my right hon. Friend gave for it is that the Board is stocking so much coal. What would have happened under private enterprise in a similar situation? Instead of stocking coal, pits would have been stopped and miners would have 1956 been working short time. That is why I say that nationalisation has not failed.
One problem which has had to be faced in recent years has been the redeployment of men necessitated by colliery closures. The Coal Board has recognised that the living standards of 400,000 miners and their families depend upon it and are its main responsibility. Here, I want to pay tribute both to the Board and to the National Union of Mineworkers, who have worked so well to meet the problems which have resulted from pit closures. Social problems have arisen which have never before been experienced in any other industry.
By 1970, the present closure programme will be completed, and the industry will be left with the capacity to produce 170 million tons a year. That output will come from a much smaller number of highly efficient and profitable pits. The problem is to find the market for that production, and it is one of the grave problems which my right hon. Friend has to solve.
As my hon. Friend the Member for Chesterfield (Mr. Varley) said, the Board is closing an average of one pit per week, and I must warn the Minister that the industry cannot face a second closure programme imposed on top of the first. It has been stretched to the limit already to meet the social consequences which will result from the first round of closures. If we reach the stage when it becomes necessary to close profitable pits because their output cannot be sold, it will have a catastrophic effect upon the morale and confidence of the industry, the desire to work for increased productivity will be undermined and men will leave the industry so fast that the tonnage of coal necessary will not be produced.
The Minister has stated repeatedly that coal must provide a substantial part of the total energy needs of the country for many years, and the requirements are estimated to be about 100 million tons higher in 1980 than the present figure. In view of that, nothing should be done now or in the immediate future to destroy the confidence and morale of an industry upon which so much depends.
What are some of the elements which must be taken into account in working out a sensible fuel policy? It is certainly important to have cheap fuel, but 1957 to decide between different fuels on the basis of production cost competitiveness alone would be both wrong and unwise. Such a comparison ignores completely the vast differences in the total social cost to the community. Even the picture of direct cost is not as clear as it is sometimes made out to be.
When the last of the first programme of nuclear power stations comes into operation in 1970, it is claimed that generating costs will be about equal to those of a coal-fired station. In 1971, however, Dungeness B, the first of the new advanced gas-cooled reactor stations, will start operating, and in 1965 it was estimated by the Central Electricity Generating Board that electricity from that station would cost 0.457d. per kilowatt hour. On 2nd March this year, however, the Ministry revised that figure upward to 0.5d., compared with 0.5d. to 0.6d. from coal-fired stations.
Beyond the A.G.R.s lie the fast breeder reactors, expected in about ten years' time, which, according to Sir William Penney, Chairman of the Atomic Energy Authority, should generate electricity at 0.3d. per unit. However, apart from the fact that these costs exclude the cost of research—which is of vital importance—which was carried by the A.E.A., it must be said that the recent 10 per cent. increase in the estimate of A.G.R. costs may not be the last. As the Financial Times stated on 22nd May this year:As with aircraft projects, nuclear power station costs can rise staggeringly between the inception of a project and its completion.Price rises for oil are very likely. Indeed, the present situation leads one to believe that they may not be far distant. The uncertain situation in supply should not be lightly disregarded. For the life of me, I cannot understand why, when balance-of-payment problems are so acute, imports of fuel oil from foreign refineries at the rate of about £60 million a year should be even considered, let alone allowed, as they are at present.
Every increase in oil consumption increases our dependence on imported fuel. The foolishness of this needs no under-filling at this time. It would be madness to allow the rundown of the coal industry if that increased our dependence on imported oil.
1958 Present indications are that the supplies of natural gas from the North Sea will amount to about 3,000 to 4,000 million cu. ft. a day by the early 1970s. That is a welcome addition to our source of indigenous fuel. It is welcome because it is valuable to the nation. Because it is valuable, however, and because it is so welcome, it is necessary that great care should be taken to use it wisely in the best interests of the nation.
It is reported that authority has been given to the Central Electricity Generating Board to convert a boiler at a coal-fired station in the Midlands to burn natural gas, and this before even the price has been fixed. Is it sensible to use such large quantities of a primary fuel to produce a secondary fuel at less than 50 per cent. efficiency? Not only would it be a waste of a valuable asset, but it could not be justified, even on economic grounds.
As most of the uneconomic pits are closed, the price of coal is expected to come down. Dr. William Reid, the Chairman of the Northumberland and Durham Division of the National Coal Board, recently said thata substantial tonnage was now being produced in the Division at less than 4d. per therm.The shutting down of most of our pits by too fast a contracting of the industry will mean tremendous social costs, the abandonment of the assets in the coal-fields, the expense of providing new capital either there or elsewhere, and an expansive programme of retraining. If production were concentrated in one or two of the best coalfields, all the investments made in the others would be lost—£132 million during the last five years alone.
But most important of all is the misery which would be caused to the 100,000 to 120,000 miners and their families. Most of this would happen in areas which are already suffering from a lack of new industries. I can speak with some experience of this. When I came to the House, there were eight collieries in my constituency, with five or six in the constituency of my hon. Friend the Member for Rhondda, West (Mr. Alec Jones). There are now none in his constituency, and three in mine, two of which are on the doubtful list. The great name of 1959 Rhondda, which has been associated with mining and coal over the years, is likely soon to have no colliery at all.
But what hurts more than the losing of collieries, because and I believe that if the time comes when all our people can have a job without going down a mine it will be a good thing, is to find that unemployment in my constituency is running at 10 per cent. Yesterday we received a message that a firm of radio rentals had been taken over by a firm in London, and that another 120 to 150 people were to be put on the dole on Friday of this week. This is the problem which we are facing, and something must be done, and done quickly.
This is not a matter for the Minister of Power alone. It is a matter which the Government must tackle. If these collieries are to close, and there is to be a rundown of the industry because of Government policy, the Government must be responsible for the social consequences that follow. I sound a note of warning to the Government—and to everyone in the House—that unless something is done to deal with the problem, they will feel the result of this in the winds that will blow later. The Government must realise that no section of the community has done more than the miners to see that they are the Government. They still have faith in Socialism, and in the Labour Movement, but they are beginning to lose faith in this Labour Government.
From the bottom of my heart I say to the Minister and to all concerned that they must do something quickly if they are to arrest this decline and give these people who served this nation so well the consideration which they deserve.
§ 3.50 p.m.
§ Mr. Edward Milne (Blyth)
My hon. Friend the Member for Rhondda, East (Mr. G. Elfed Davies) was right to underline the social consequences of the policy outlined by my right hon. Friend and the matters associated with it in his speech which started this debate, a long time ago.
The point with which I want to deal is that of providing alternative industries in the areas affected by the policy outlined by my right hon. Friend. Any Minister of Power, and especially the one that we have at the moment, whom we 1960 in the Northumberland coalfield think has been doing a magnificent job in so many ways, is bound to be on the horns of a dilemma.
If the annual output is left too high, the industry's profitability and ability to compete with the other fuels will be endangered. If the Minister cuts back too much, the Government will face the prospect of unemployment and other social problems in the districts which so many of us represent. This is where the first solution must be found. I would not agree that the miners' loyalty to this Government has been eroded, but there is despair and disappointment that social problems in their communities have not been tackled as they had a right to expect.
Before any cuts in production or of numbers of miners, the need of the areas concerned must be assessed. Because this was not started, as it should have been, in the mid-50s, the problem is now all the greater. We are talking of cushioning the effects of this policy on miners of 55 and over by paying some sort of remuneration. But, as a nation facing industrial change, by virtually pensioning off the most adaptable section of our labour force at 55, we are turning our backs on future industrial expansion. Redundant miners cannot be written off at 55 merely with cash allowances. In a declining mining industry, that manpower must be used to the utmost and full employment created to take the place of the industry in mining areas.
The coal industry cannot be planned in isolation. We have talked about an annual output of 155 million tons, and in 18 months will probably be talking about another estimate of future production. So we are discussing not merely a coal borrowing Order or even the contraction of one of our major industries. This problem of industrial change must be tackled by a Government who are determined to achieve proper industrial expansion.
We in the mining areas are not arguing merely for the protection of the coal in-industry. We want full employment, with the introduction of alternative industries to make up for the loss of jobs. The coal industry must take its place with the three other major fuels that are 1961 competing to give us the energy programme we require. The Government have not provided the full employment that should be available and many of the excellent policies for the development areas and other parts of the country have not gone far enough.
We must have some form of direction of industry if we are put jobs where they are needed. Hon. Gentlemen opposite may not relish this idea and even some of my hon. Friends will say that if we had direction of industry, direction of labour would follow. I am not afraid of that, because the people I represent are already so directed. Each time one of my constituents gets a one-way ticket to another coalfield, or takes another job elsewhere in the country, he is subject to direction—
§ Mr. Milne
With respect, Mr. Speaker, what will happen to workers affected by proposed legislation must have our close attention.
I fear that the Government have looked at the coal industry in isolation and have not considered the wider aspects of industrial expansion. Some industries have been attracted to my constituency and some miners have adapted themselves to a new industrial life. If the miners had a choice between working in the pits, with the coal industry being protected, and an assurance of full employment in alternative industries, they would willingly choose the latter.
The industrial areas have served us well in the past, industrially and politically. They now need our help. There must be full employment in all areas, and not merely the Midlands and the South. Nor must we look at the coal industry in isolation. I plead for full employment for all parts of the nation, and not just the coal mining areas—although these areas laid the foundations of our recovery in the immediate postwar years. Having laid those foundations, they are entitled to share in the benefits now. That is for what we ask and what we believe we will get. We will not stop asking for it until we get it.
§ 4.0 a.m.
§ Mr. J.J. Mendelson (Penistone)
Some hon. Members have spoken about the serious way in which their areas will be affected, and my right hon. Friend the Minister knows that concern is widespread throughout the coal mining areas. A fortnight ago, the Yorkshire area of the National Union of Mineworkers held its' annual gala, at which the Prime Minister was one of the principal guests. Representatives of the executive committee spoke to the meeting and to the Prime Minister in the most serious terms of their concern and that of their members about the general position.
It is, therefore, not possible to argue—and I do not say that my right hon. Friend came anywhere near to arguing it; it is foreign to his way of thinking about the industry—that there can be any feeling of security in even the most profitable areas if there is grave uncertainty and a serious decline throughout the industry as a whole. Those who are planning our future fuel needs must take that feeling very seriously into their consideration.
I welcome, as will the people whom I and other hon. Members from the coal mining areas represent, many of the points made by my right hon. Friend. His statement has been eagerly awaited. A number of people feel that it could have been made a little earlier. This is not the time or the occasion to go into the reasons for the delay, but an occasion to concentrate, as the Minister himself did, on a very few essential points arising from his statement and then to leave well alone.
I ask my right hon. Friend to accept a very clear distinction between two problems that should not be muddled up; first, what ought to be done to retain an efficient and viable industry, and secondly, the provisions that might be needed to create new industries and certain social measures if a pit has to go out of existence. I am glad that I carry my right hon. Friend with me in this thought. But the best possible provision and the most advanced social arrangements can be of little relevance if we are left in the future with an industry that is not viable and cannot do the job allocated to it. These two points, of 1963 equal importance, must be kept quite separate.
I do not believe that the Government have yet got down clearly to the determination of a policy to make quite certain that the industry will retain all the miners and managers and technicians in the right age groups to make it a viable industry in the future. I make no complaint that my right hon. Friend was qualifying figures he gave by reference to certain technical achievements and achievements in pricing which in his judgment the industry must achieve. I was more worried when listening to the right hon. Member for Leeds, North-East (Sir K. Joseph) who used, I think five times, the term, "reducing the industry to its competitive core". That was his favourite phrase and it worried me a great deal. If that is all he advises the Government to do, we would end up with an industry which will not be able to do its job in future. There will be no implementation of a national fuel policy, but a narrow concentration on immediate market competitiveness and the future planning of the industry will not be undertaken.
Therefore, I hope that the Government will bear in mind that they have to make quite certain, even if it means not accelerating the cutting down of production in certain areas and pits which at any given moment are not fully achieving the results for which the Coal Board hopes, that they are maintaining an industry which will remain viable in future. This requires stretching the financial argument beyond the immediate competitiveness which was mentioned a good deal in the discussion. I do not plead this on grounds of social policy, but on grounds of pure efficiency.
We have just been through a period where, in one of the best coal-producing areas, in Yorkshire, people were leaving the industry in considerable numbers. That shortfall was put right by the economic recession, but we cannot plan for development for a future in which we shall have a semi-permanent recession. Therefore, as we must do everything we can to get out of the economic recession, we cannot rely on the numbers in the right age group being kept in the industry in the most productive areas by people staying in the industry because an economic recession surrounds them. We 1964 look forward to a period when we shall get out of the economic recession.
I turn to the other prong of the argument, concerning the measures so urgently required in cases where, after everything has been taken into consideration, a pit closure is contemplated. I repeat the formula which I and many of my hon. Friends used when we debated the 1965 Coal Industry Act in the House. The Minister then was my right hon. Friend the Member for Newton (Mr. Frederick Lee). The formula which I used was that wherever a pit closure is contemplated it must not take place until an alternative industry has been established in the area or is about to be established within a matter of a few weeks. This policy has not been acted on by the Government.
With other hon. Members I suggested to my right hon. Friend the Member for Newton in that debate that he should give the House an assurance that several Ministers—the Minister of Housing and Local Government, the Secretary of State for Economic Affairs and the Minister of Power—should form a sort of joint staff in this operation. If we look at HANSARD for that debate, we find that we received that assurance from my right hon. Friend. It is not a new idea, but it has not been acted upon. We need an assurance at the end of the debate that it will now be fully implemented.
My right hon. Friend the Member for Newton went further and said that every week those Ministers would meet and would make joint decisions. As they were senior members of the Cabinet, their decisions would carry great weight. If there is to be reassurance in those limited cases where closure is contemplated, there should be a statement at the end of the debate that this policy will now be implemented.
In all the technical discussions there is one element which must not be overlooked. It concerns the kind of manoeuvrability that the economy needs. It is not only the point which has been made several times about the effect of foreign disturbances on our import of oil and the relationship between coal and oil. This is an obvious and important point. Recently, at Question Time, I asked my right hon. Friend whether he did not think there were lessons to be learned from the present position in the Middle East in relation to the accelerating pit 1965 closure programme, and whether this would not be a time to halt it or slow it down. My right hon. Friend said that that was not the occasion to deal with that point, but he did not deal with it tonight either. I hope that my hon. Friend the Parliamentary Secretary will deal with it.
It goes beyond that, however. A country such as ours is not in a position at the present time to plan, as has been suggested by some hon. Members, the complete decline and phasing out of the coal industry. That would be unsafe and unreasonable. I am much encouraged to know that I carry with me my hon. Friend the Member for Bristol, Central (Mr. Palmer), the Chairman of the Select Committee on Science and Technology. It is all very well for some hon. Members to say, "If we had our way we would ensure that nobody worked underground". That is far too glib. We could all say that and get cheered for it. That is not the problem that the House has to deal with tonight, nor will it have to deal with it for years to come. It is not a feasible policy.
A feasible policy is to return to what has been Labour's policy for many years, but which has not yet been implemented by the Government. That is a national fuel policy with sufficient power and control over all the different sources of fuel so that the Government can enforce their intentions. I am glad to see that my right hon. Friend the Minister agrees.
Those who speak of competitiveness Trust remember that there are many industries such as the oil industry which have a considerable pull and which uses all sorts of advantages which are not available to the coal industry. We are not talking here always about what is known as free competition.
The Government have a firm duty, given that this is the intention of the movement that brought them to power, to return to the concept of a national fuel policy and to achieve such a level of control over all the fuel industries and sources of energy which we shall use in future that they can implement the policy. If they do not do so, they will fail the movement and the country. Because of our narrow margins of exports and imports and the economic limitations under which we shall have to work for the 1966 next 30 or 40 years, any other policy would be unsafe.
I hope that we shall get a positive reply from the Government at the end of the debate.
§ 4.14 a.m.
§ Mr. Alex Eadie (Midlothian)
Many miners will be inclined, on reading the report of the speeches made in this debate, to resent some of the statements which have been made, particularly the assertion that, once again, a subsidy is being given to prop up and maintain the coal industry. I do not think the miners will look at it in that way. I hope to develop this argument later on.
I do not think, for example, that the miners will take kindly to some of the rather derogatory remarks that have been made about nationalisation. We are a bit wide of the mark when, in discussing the problems affecting this industry, we talk about nationalisation. Within the compass of my experience I have had the doubtful privilege of being a local trade union leader under private enterprise, and I have also been a trade union leader under nationalisation. I have also had the doubtful privilege of working at the coal face under private enterprise and I have worked at the coal face under nationalisation. There is no comparison. The miners will not be deluded by the inference that if we had some other system than nationalisation, some of the problems would be solved.
It has been suggested by an hon. Member opposite that we must get rid of some of these 19th century practices so that the mining industry can become more viable. We have had reference to profitability. The miners will resent some of these remarks. At some of the pits that we have been talking about the coal owners received unforeseen profits. I am thinking, for example, of Rothes colliery, when I lived in that locality. It was a project which was planned and conceived by the Fife Coal Company. The company received unforeseen profits. The miners have been groaning under this weight for many years.
When we talk about money, profitability, competition, and so on, the miners will not be impressed by this argument. I address these remarks to my right hon. Friend, in particular. What we are talking about is over 100,000 1967 miners becoming redundant as a consequence of the Ministry's announcement. I want to say this in the kindest possible way, because in the past my right hon. Friend and I have had differences in the House. I speak with a great deal of emotion and feeling. My right hon. Friend has made some helpful announcements which can ease the situation, and has probably given some first aid, but I hope that he is not under the illusion that he has helped towards solving this problem.
I am glad that this is only an interim statement that he has made. I hope that as a result of this debate, when he considers the White Paper, he will think very carefully about the policy that he intends to present to the House. What he has announced in his interim statement is completely unacceptable to me. Some hon. Members are apparently willing to write off Scotland to some extent in terms of future coal production. Some of them have spoken of the thin seams. If we are talking about 100,000 miners becoming redundant as a result of this form of production, we are talking about substantial redundancies in Scotland and elsewhere in the North-East. I am not, therefore, much impressed by that argument.
I come now to a comment on my right hon. Friend's announcement that he would give certain information to the Select Committee on Science and Technology. I want to be as kind as I can in this, because I do not want to be accused of being ultra-aggressive or of trying to misquote my right hon. Friend. He was not in the Chamber when I challenged the hon. Member for Worcestershire, South (Sir G. Nabarro) on something which he had said, so my right hon. Friend may not know that I took that occasion to defend him.
In announcing that he would present information about nuclear generation costs to the Select Committee, my right hon. Friend appeared to me to try to give the House the impression that it was information which he had decided to give. I remember sitting in the visitors' seats at a meeting of the Select Committee on Science and Technology when my right hon. Friend was being questioned. There was a challenge about 1968 nuclear generation costs—the hon. Member for Orpington (Mr. Lubbock) will remember this—and, to some extent, my right hon. Friend was caught out in a contradiction on dates, and so forth. He promised to make all the information available to the Committee.
I may be doing my right hon. Friend an injustice, and I hope he will reply to the comment I make, but it appeared to me, when he made his announcement, that he was saying that he would, after all, give the information to the Select Committee, whereas it was my impression that, as an outcome of the evidence which he had presented he would be giving all the information requested or required by the Select Committee on Science and Technology.
There has been a tendency to sweep some of the arguments about nuclear power under the carpet and to ignore the question of comparative costs. It has been said that we should try to develop our own indigenous resources, that nuclear power is far cheaper, and that it is indigenous. Let it be clearly understood that nuclear energy is not an indigenous resource. I am not arguing against it. I am only reminding the House that nuclear power is not entirely indigenous.
For example, it is not generally appreciated that the A.G.R. programme of 8,000 MW—which, incidentally, would be equal to about 20 million tons of coal a year—will add about £10 million to our import bill because of the foreign exchange cost of the uranium. I put that fact into the debate, because there has been so much talk about nuclear power. Although my right hon. Friend was very forthcoming in saying that the first nuclear power programme had proved more expensive than an equivalent coal-fired programme, it is necessary to remind ourselves just how much it cost the nation to go ahead with the first phase of the nuclear power programme.
It cost us £525 million more to carry on with the Magnox programme than it would have cost to carry on with conventional power station generation. That is a substantial sum of money. Added to that, it cost 28,000 miners their jobs. A blunder was made. It is not an entire loss, I agree. None of my hon. Friends would argue that we should not go ahead 1969 and have a nuclear energy programme, but what we do say is that the first nuclear energy programme was far too big. I do not want to apportion responsibility for that, but it has been very costly to the nation, and the miners in particular, as well as the nation in general, have had to pay for it.
When we are talking about the second phase of the nuclear programme, the A.G.R., it is logical to say that we must learn from our experience, which tells us that we made a blunder on the first phase and that we are not going to repeat it with the second.
I sometimes cannot understand the Government's attitude on this or the argument that is going on in sections of the Press. I wish that the hon. Member for Orpington were here, because he is carrying on a correspondence with Lord Robens in the Financial Times, and Lord Robens is wiping the floor with him on this issue.
On 24th June some of my hon. Friends and I had a letter published in The Times which dealt with the question of costs and the second phase of the nuclear power programme. Nobody wrote to challenge the figures we mentioned, and, therefore the nation must consider this matter very carefully.
I think that it was the hon. Member for Orpington who spoke about costs and authoritative statements. I have here a copy of the New Scientist for 9th June, in which there is a challenge on the efficacy of the second phase of the nuclear power programme, although it does not suggest that we should not go ahead. The article, by the magazine's business editor, David Hamilton, ends:No one denies that the nuclear power programme is desirable or that in the long run it will bring benefits. But the question remains whether we are trying to do too much too quickly.We are not being Luddites, as hon. Members opposite have conceded. The miners have never been Luddites in their attitude to technological progress.
I found myself tonight, probably for the first lime, in some measure of agreement with the hon. Member for Worcestershire, South, who did not remain very long after he had made his speech. He tried to argue very constructively that my right hon. Friend should consider the whole question of oil, saying that it was 1970 not indigenous and that recent history had proved that its supply was unreliable.
I have extracted some figures showing the penetration of oil into the United Kingdom economy. In 1956, coal consumption was 217½ million tons; in 1964, it was 197.2 million tons. Oil consumption was 36.7 million tons coal equivalent in 1957, representing 15 per cent. of total consumption, and in 1966 it had risen to 111.4 million tons coal equivalent, representing 37½ per cent. of total consumption. Breaking those figures up, we discover that in 1966 17 million tons coal equivalent came from Libya, 70 million tons coal equivalent from other Middle East countries, 12 million tons coal equivalent from Nigeria and 20½ million tons coal equivalent from other sources.
I thought that the hon. Member for Worcestershire, South was being logical over the question of costs. Let us be candid. The closure of the Suez Canal will certainly increase costs. The previous rate was 26s. a ton. Now it has reached about 140s. a ton. My right hon. Friend may question this, but The Times, on 1st and 3rd July, estimated that the total costs to B.P. could be about £100 million. Also, the embargo on British exports to Arab countries could reduce earnings significantly.
I hope that my right hon. Friend consulted other Departments before he made his statement. It is sometimes thought that decisions can be taken in isolation. I have rather emotionally talked about more than 100,000 miners being involved. Some railwaymen may be involved. The railways depend on coal for about 37½ per cent. of their revenue, and I think that it represents about 60 per cent. of their freight traffic. The decision to reduce coal consumption will affect the railway industry. So when we discuss policies such as this railwaymen are entitled to be consulted as well as miners. I do not know whether my right hon. Friend discussed the matter with the Minister of Transport and the railway unions, but those unions are involved, and there are also engineering industries which may be affected.
I do not envy my right hon. Friend in his task, and I do not agree with the kind of policies which have been put forward, but his job as Minister is to try to work out a policy. I believe that 1971 some of the arguments about the costs of nuclear energy and oil may be solved before he issues his White Paper in October. I hope that by then he will have been able to see through some of the fog surrounding the figures discussed in relation to oil, nuclear energy and gas, and will come forward with a realistic programme to ensure that the mining industry will play its proper part in relation to fuel resources.
§ 4.34 a.m.
§ Mr. Arthur Palmer (Bristol, Central)
During the course of this long night a number of very eloquent and able speeches have been made. There have also been references to the investigation that the Select Committee on Science and Technology is carrying out into the nuclear reactor programme. As I have the privilege of being its Chairman. I thought I might say a word or two which might assist the House in the debate.
In looking at the nuclear reactor programme, the Select Committee has been bound to look at its bearing on the general energy policy of the country and, in particular, on the future correct relationship between the size and the output of the coal industry and the development of nuclear fission as an energy source.
I am doubtful whether anyone in this country is yet in a position to give a true estimate of the relative balance of costs between the two sources. I am not at all convinced that the Ministry of Power or the Ministry of Technology are in a position to do so. My right hon. Friend the Minister is modest and said that he was not a technical expert. I am by training and profession an engineer and I know enough of technical experts to know that they are violent partisans in these matters and there is always special pleading. We should keep this in mind when we seem to think that somewhere there already exists an objective and detached view of the relative cost balance of energy policy. It does not exist.
In the Select Committee we have taken evidence from a number of quarters. I can say this because the evidence has been reported to the House. We have taken evidence from the Minister of 1972 Power and the Minister of Technology, and we have had in front of us the Chairman of the Atomic Energy Authority, the Chairman of the Central Electricity Generating Board, the Chairman of the South of Scotland Electricity Board and last, but by no means least, the Chairman of the National Coal Board. That was a particularly boisterous occasion. The evidence, but not the findings, of the Select Committee has been reported to the House and it would be improper of me to indicate in any way what the findings might be. I have no intention of doing so.
I would like to draw the Minister's attention to the fact that the Committee has worked very hard on the chosen subject and we hope that our report will be available by the end of the Session. We are putting all our energies and efforts to that end. Our report may even be out before the White Paper. We may be able to anticipate the White Paper, which has been rather slow in coming along. The Committee is hopeful that its report will be of value to the House and to the Government, and I trust that the Government will take careful note of its findings.
There is one advantage that the Committee has had over the present discussion in the House. We sat in the true morning, in the full light of physical day. I do not know why, when we have debates on fuel and power, we have the bad trick of tucking these debates away in any odd corner of our business that we can find. The Select Committee by meeting in the mornings to discuss reactors and energy policy, among other things, set an example of starting early which I hope the House as a whole will emulate in the future.
§ 4.40 a.m.
§ Mr. J. D. Concannon (Mansfield)
Sixteen months ago at this time I would have been on my way to the Nottinghamshire coalfield. I was used to working the three-shift system and the only thing I cannot get used to is working the three shifts in one day.
So much has been said about the merits and the cost of oil and nuclear energy that I do not wish to waste the time of the House by going over the same ground again. My reasons for taking 1973 part in the debate are varied. Most speakers have mentioned the Notts coalfield as some kind of El Dorado. As I am chairman and secretary of the "Notts miners' group" in the House—in fact, I am the only Notts miner in the House—I felt it incumbent upon me to say something about the Notts coalfield. But I have to be careful in what I say because I would not like to go down in history as being mentioned in the same breath as Spencer. I do not want to be a Spencer, so I shall pick my words carefully.
Before the debate, some of my hon. Friends said that I could sit back and stay silent, as "I am all right, Jack". Possibly I am, representing the Notts area, but the Notts miners are not the whole National Union of Mineworkers and I want to add my weight in expressing the feelings of the Notts miners with the feelings of the miners in the rest of the country.
So much has been said about the East Midlands Division of the National Coal Board that we should put its record in perspective. We must look at the figures in the light of the Board's policy over the last ten years of gradually compacting the coalfields into Yorkshire and the East Midlands and of the latest statement that the Board is aiming at a 50 cwt. output per manshift by 1970.
We have been told that nationalisation has been a failure. If so, the figures from the East Midlands Division from 1946 to 1967 are remarkable. In 1947, we mined 31,683,000 tons of coal with an average of 94,500 miners. The average output was 30 cwt. per manshift. The number of pits was 102. The mechanical loaded output was only 7.5 per cent. The profit that year was £4.5 million.
The next obvious year to take is 1957, the peak year of production and manpower. Production in the division was 47 million tons, but it took 103,500 men to do it. Output per manshift was 37.2 cwt. We have also suffered from the closure programme. The number of units had gone down by 1957 from 102 to 89. The machine output of the division had slightly increased, to 38.2 per cent. The profit that year was £12.9 million.
1974 The year 1966–67 showed a drop in total output from 1957, down to 42½ million tons, and manpower had dropped from 103,000 to 75,500. The remarkable thing in the division—which produces 25 per cent. of the country's total output—was that output per manshift was 50.9 cwt. We are now down to 70 units. We have had closures and we shall have more. But the truly remarkable figure is the amount of automation and mechanization—95.3 per cent. of the tonnage is mechanically mined. During these 20 years, the division has made a total profit of over £251 million.
These are remarkable figures. I do not want them to be misrepresented. What I am trying to show is what has happened in the East Midlands through the truly remarkable capital investment programme. We have had the funds to do it, obviously. I have worked in the industry during the transitional period from 1954 onwards—from the pick and shovel at the coal face right through to sophisticated machinery. Only a Jules Verne could describe some of this machinery properly. When I first saw some of the machines which men have to work close to, they looked monstrous and terrifying. But they work.
The other truly remarkable feature about the division is that in 1965–6 we only lost 27,000 tons through disputes. This is another fallacy which needs exploding about the mining industry and the disputes which take place. In the "Crater" district of Mansfield, not once have I had to have the protection of a battalion of troops at the pit-head.
I must try and explain what has happened as a result of the productivity increase in the division. It means that the price of East Midlands coal to the Central Electricity Generating Board has not been increased for seven years, and 20 million tons of East Midlands coal is used in local power stations. Recently, the West Burton power station has come into operation, and that will consume 5 million tons per annum. In the next fiscal year, we shall have the Ratcliffe-on-Soar power station coming into operation, and that will consume another 5 million tons. Then we shall have Cottan, which will also consume East Midlands coal.
If one adds to the East Midlands Division the Yorkshire total, one finds 1975 that, over the past seven years, East Midlands coal has remained static in price, while the price of Yorkshire coal has increased by only 7s. 6d. per ton. As a result, 36 million tons, or 60 per cent. of the coal supplied to the C.E.G.B., has increased in price by one-sixth of 1d. per therm. East Midlands and Yorkshire coals are being supplied to power stations in the coalfields at just over 3½d. per therm.
That does not mean to say that we have no troubles in the area, because we have, though my problems are vastly different from those of my colleagues in the rest of the industry. My area is possibly the only one which is on the "up" in a declining industry, and that very fact brings its own problems, of course.
To take housing as an example, the Coal Board owns 23,594 houses and is building between 500 and 1,000 more this year in the East Midlands Division, largely because of its attitude towards redeployment. Living in those houses are young men from such areas as Derbyshire, Scotland, Durham and Wales, and they are bringing added problems. Their presence means that North Nottinghamshire is in for a terrific boom in population in the next few years. That is only too obvious, because we are taking the younger families of the Scottish. Durham. South Wales and other coalfields.
Another of my big problems is the shortage of manpower. My area is a profitable one, having made £261 million in the last 20 years. Only this morning, I received a report from the Ministry of Labour office in Mansfield indicating that there are over 1,000 vacancies. Unemployment is virtually static compared with the figures last year, before the July measures. The Mansfield Employment Exchange has 731 vacancies in the local mining industry. That is the paradox of the situation, as a result of which I am at times in great difficulty. The need for confidence in the industry has been stressed. Even with figures like these, confidence, even in my area, sometimes leaves something to be desired.
My greatest difficulty at week-ends is in correcting the speeches and statements made by individuals and organisations who should know a little better. Not long ago, I had to listen to a speech from a 1976 local dignitary and industrialist who probably did more damage in five minutes to the local industry than I could hope to achieve in a lifetime. He was uttering the death rites on an industry which, over the last 20 years, has made a profit of over £250 million and which, obviously, would not be touched dramatically by any fuel policy which the Government or anybody else might be thinking up.
Between his moanings about his profit margins and the Government stopping him from making a vast figure on land deals, he seemed to me to be showing concern about the mining industry. It took me a little while to fathom what he was on about. Had he been bothered about the men and their jobs, that would have been all right with me, but seemingly his only complaint was about what the miners got in their pay packet at the end of the week and what would be his share of it. That shows the extent to which morale around the industry has fallen, even in the East Midlands. We must rectify this quickly.
Wherever we have the fortune to live or mine, it is simply a matter of the turn of the card that Nottinghamshire has the best working conditions and tremendous capital investment of many millions of pounds. A figure of £9 million or £10 million for each individual unit is not unusual.
I well foresee the position that we in the East Midlands and Nottinghamshire may come up against in the year 2000. I would not like to have the problem of dealing with it, as my hon. Friends do every weekend when they go home. Obviously, the men who are no longer needed must be redeployed in advance factories or elsewhere when the industry no longer wants them. We must review the position in plenty of time to find new and better jobs in the economy for those men.
Most of the important points have been covered by many of my hon. Friends and I can, therefore, dispense with a lot of my speech. Over the last 10 years, we have lost through wastage in the industry over 300,000 men. By 1970, if we carry on as we are, we will lose another 100,000 by natural wastage alone. I do not find that a bad thing by itself, however. I come from a family with a long tradition in mining. It has 1977 had its share of tragedy, disease and accident. I derive no satisfaction from the fact that men still have to go down the mine. I hope to live to see the day, which I project at 30 or 40 years' ahead, when no man has to go down any mine.
In these days of technical advance, I see this happening in about the year 2000, not at the present time, as the hon. Member for Orpington (Mr. Lubbock) seemed to suggest. I understood the hon. Gentleman to say—and so did my hon. Friend the Member for Chesterfield (Mr. Varley)—that he wished to run down the industry as quickly as he could. I know that the hon. Gentleman has corrected his statement, but the inference that I drew—
§ Mr. Lubbock
I said as quickly as was economically and socially practicable. I agree with everything the hon. Gentleman has said. It echoes my view.
§ Mr. Concannon
I am glad that the hon. Gentleman has corrected his statement, because what I heard him say amazed me. At the last Liberal conference my constituency was singled out by the Liberal Party as one of the industrial seats on which they should "get cracking." If I were to expound the Liberal philosophy of closing down pits in the area it would do me a shade of good.
§ Mr. Lubbock
I must correct what the hon. Gentleman has said. I have not corrected my statement. I have repeated what I said at the beginning of my speech. If the hon. Gentleman does not believe me, he can check it in the HANSARD room.
§ Mr. Concannon
I was amazed when I heard what the hon. Gentleman said. I know that he has corrected it since. I do not know how one corrects HANSARD when one goes there, but I shall be amazed if I am wrong. It shocked me so much that I could not possibly have misunderstood what the hon. Gentleman said. I nearly challenged him when he said it, but if he has corrected it I will leave the matter there.
My protest is that there has not been a peep from anyone, either tonight or at any other time, that if the time comes when the nation does not require the services of these fine men in the mines, the phasing out and the provision of 1978 new sources of employment must be done in such a way that a job and a decent standard of living are theirs by right. This is not too much to ask of a Labour Government.
§ 4.57 a.m.
§ Mr. Edwin Wainwright (Dearne Valley)
We have met tonight to talk about the Coal Industry (Borrowing Powers) Order, 1967, to give permission to the National Coal Board to borrow another £50 million above the normal figure. I understand that some of this money will be spent on the stocking of coal. This is a shocking thing, because money that is borrowed has to be repaid. This means that the interest to be paid on the money is a further burden on the industry, which makes it more difficult for the industry to become viable.
I think that the money ought to be utilised for some other purpose, and that someone else ought to take over responsibility for the stocking of coal. If we do not stock the coal, we will have to close the mines, and if we close the mines we will cause social chaos. For this reason the Government ought to look a little further and take over responsibility for the stocking of coal.
I understand that we stock oil in this country. I once asked the Minister what quantity of oil we stocked, and what this cost. I was told the cost of stocking—I think that it was about £4 million, but this was several years ago—but I was not told the quantity, because this information had to be kept a State secret. I wonder how much of that £4 million was for the benefit of private industry which could draw upon those stocks from time to time.
We should know whether this has been done because of the present situation in the Middle East. If private industry can be helped in such circumstances, we should be able to help a public industry which has difficulties in making itself viable. A fuel policy should be based on indigenous resources, and imported fuels should be complementary. It would be foolish to say that coal should be produced regardless of the cost, but our fuel must come from secure sources.
We are relying on oil too much and have done in the past, and, although the present difficulties might be overcome, if we depend on it too much we might 1979 be placed in an invidious position. We must consider the political instability of the area that oil comes from. I hope that my right hon. Friend will note that it is not a question of coal versus nuclear power, but of indigenous fuels against oil. Large quantities of oil must be imported, despite the balance of payments, because of its by-products and because it is vital to industry, but I hope that we will not run down the mining industry so much that oil will increasingly supply the greater part of our fuel needs.
When criticising the present situation of the industry and the Government help which it receives, we should examine the social responsibilities of the Coal Board. Its financial difficulties are caused not only by capital costs, but by interest charges, which become heavier as time goes on. I do not disagree that the Board should bear the cost of subsidence, but the figures should be given to the House, because the public ought to know. I understand that it is now about £5 million a year, which is a cost which private industry never bore. It is ridiculous that the Board should have to spend £3.8 million a year before it can get its £ for £ of the £30 million allocated for social responsibilities. This should be ended and the Government should stand every penny for the transference of men, the moving of their families and other factors.
Many people, probably because of their education and professions, easily adapt to change and freely move from one area to another. But the people about whom we are talking are not used to moving home. Often they resent it. Different mining areas have different patterns of employment for women and youngsters. About 10 bus loads of young girls leave my constituency every morning. These youngsters travel 15 to 20 miles a day to work and make that journey home again at night. In other mining areas it is impossible for the women folk to obtain work, even if they are prepared to travel these distances.
§ Mr. Wainwright
I am. However, he has a good deputy in the Parliamentary 1980 Secretary and I am sure that my comments will be passed on to my right hon. Friend.
Much has been said about an alleged statement in which the Parliamentary Secretary is said to have spoken about 120 million tons of coal being produced. Apparently the figure of 80 million tons was then mentioned. There has been some dispute about that statement. I recall a statement being made by a previous Minister of Power about the increased number of pits to be closed by the Coal Board. Although the Board had been closing pits for a number of years, without any trouble being caused, as soon as that statement was made people were up in arms, men flocked away from the pits and morale sagged.
It is easy for back benchers to make statements, but Ministers must be more careful. Great attention is paid to what they say and I mention this to the Parliamentary Secretary so that he is careful in future about the statements he makes.
§ The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson)
Not for the first time am I making the position clear. The statement attributed to me on the occasion to which my hon. Friend is referring was inaccurate and was never made.
§ Mr. Wainwright
I am glad to have that denial. Evidently the Press wrongly reported my hon. Friend.
§ Mr. Wainwright
No. The Parliamentary Secretary has denied making the statement, and that is good enough for me.
The coal industry is entitled to know more about its future. Whether it will be allowed to produce 120 million tons or 155 million tons does not mean a great deal.
It has been said that the industry could produce 180 million tons of coal, but the problem is to sell it. If the Government do not intend to help the industry to sell the coal, it is no good their making wild statements. Production of 155 million tons can be achieved, but our worry is whether we will be able to sell it if oil is to be allowed to run rampant and we get natural gas from the North Sea to the 1981 extent we have been told. I therefore hope that financial help will be given to the industry.
It has also been said that the electricity generating industry must take more coal. I hope that that will be done, but if taking more coal adds to that industry's costs, it will not be fair. Members of the Opposition are continually seeking opportunities to criticise nationalisation. To use one nationalised industry to help another in this way would not leave us with an industry that was as viable as it could and ought to be. We would then provide more grounds for criticism.
If these four industries were run by private enterprise, each would help the other out, but if we say that each must be separate and apart that is where the Government must come in and make up the difference. My hon. Friends may not agree with me on this, but I believe that it is the Government's duty to help the industry so that, through reorganisation, it becomes more viable and competitive with other forms of fuel.
I differ from some of my hon. Friends on the subject of nuclear power. I very firmly believe that in the next two decades nuclear power will be the cheapest way of producing electricity—
§ Mr. Wainwright
I know that, occasionally, a good many things that promise well are not fulfilled, but when I look at the progress that has been made in this case I believe there will be a progressive cheapening in the production of electricity by nuclear power.
I agree that seven magnox stations in operation were too many and that five or four would have been enough. Nevertheless, there has been a tremendous amount of technical know-how gained from the building of those stations. I am quite certain that the building of three A.G.R. stations will be enough to provide the "know-how" we need of that system. The fast breeder is the thing of the future, but it will take at least five years from the start of the first for it to become critical. Only then can we appreciate the teething troubles of a nuclear power station of this kind. To build five in five years at terrific cost is asking too much. I ask my right hon. 1982 Friend to look again at this problem. To build one in the midst of a coalfield is the utmost folly. It is saying to the men in that coalfield, "In five years' time you will be obsolete". If it is necessary to build it, it should be built somewhere away from a coalfield.
Looking at the critical situation in the Middle East and the Far East, with the growing power of China, I think that during the next two decades the sources of oil will probably be depleted. For that reason we should look carefully at the amount of oil that we import and what proportion it should supply of our total fuel needs. We should concentrate on a secure source of fuel before considering other sources. We have had enough trouble with Arab countries recently and such trouble can become greater as time goes on.
If my right hon. Friend has had an easy time this night, he must not take it for granted the section of mining constituency Members will always allow him an easy time. We have tremendous respect for his ability, but we are sometimes a little doubtful about his conduct in regard to the mining fraternity. This will depend on what happens in the next few months. We shall watch him carefully. If he does not bring out a fuel policy which will take account of the future welfare of the men in the coal mining industry, he will have to face greater criticism than he has had on this occasion.
§ 5.17 a.m.
§ Mr. Clifford Williams (Abertillery)
I have listened to the many eloquent and passionate appeals of my hon. Friends backed by statistical evidence for the preservation of this great industry. I declare my interest. I have four brothers working in the mines and until I was elected to this House just over two years ago I spent 45 years in the pits. I can bear witness to the savage, ruthless and desperate conditions in which we laboured and to the shocking toll of life and limb throughout that dreadful period when the coalfields, under private ownership, were not worked but were raped and plundered by grasping and unscrupulous owners for private profit when all the rich seams were exhausted.
1983 Despite those happenings, and the miners' sufferings, the nation must never be allowed to forget that with all due respect to other trades and industries this great industry has been for decades the foundation of the country's prosperity. Our coalfields are the gift of nature to benefit the nation. It is to our national advantage that the industry shall thrive and not perish.
We have been told in many quarters that the world does not owe us a living. This we can accept, but let it be clearly understood that the nation owes the miners a living. They have justly earned their right by their sacrifices, by their contribution to the nation's wealth, and—let us not forget—by their tolerant and moderate demands. If it had not been for their patriotic loyalty, and had they accepted the principles of free enterprise as advocated by hon. Members opposite and followed the law of supply and demand from 1948 to 1956, when miners were exhorted to produce every ounce of coal, when there was a national and, indeed, an international shortage of coal, they could have held the nation up to ransom and provided for themselves better pay, better pensions—not the miserable £1 a week after 50 years' work in the darkness of the pit—and, above all, security of employment for many years in the pits in their towns and villages. That is why we miners strongly contend that the nation does owe us a living.
Since 1947, 127 pits have closed in the South-Western Division, 22 pits have been merged, and nine completely new units have been developed. It is fair to say that, through co-operation between trade unions, the Board, the men, and officials the great majority of the men made redundant were placed in other collieries. As one who had long experience of negotiations with the former colliery owners and latterly with the Coal Board, let me place on record my unstinted appreciation of the officers of the Board with whom I had to work for their warm and sympathetic understanding, for their humane administration, and again for their expert and efficient management. Indeed, they needed all their skills to repair the rottenness and the plundering of the collieries which had been going on for years.
1984 We ask: have they succeeded? The answer is that in successive years increased production figures have taken place year by year. While we have accepted contraction of the industry and the technological changes in the industry, we now believe that a halt must be called to any further contraction. If more collieries are to be closed, it is becoming increasingly difficult to provide employment for men made redundant, and especially so for men in their 50s and the partially disabled. This is the time when miners, after a lifetime of service to the industry, when their pit is closed become bitter and their souls are soured.
I have a letter dated 13th July informing me of an impending pit closure in my area. This, I know, will bring a feeling of gloom to the men concerned, to the traders in the town, and finally to the local authority because of the loss of rating precept to the area. If these closures are allowed to continue and no alternative industry is provided, we shall become ghost towns and slowly but surely wither away and die. This must be prevented at all costs, to arrest the social loss and the misery that follow.
§ 5.24 a.m.
§ Mr. Michael McGuire (Ince)
My colleagues have spoken with great emotion after listening to my right hon. Friend the Minister's introductory speech. They have no need to apologise for the fact that emotion has been aroused in them, because what has been said by some tonight makes this a very sad night indeed for those who look with some fondness on the concept of the mining industry getting over the hump.
Whatever I say about my right hon. Friend the Leader of the House behind his back, I am one who likes to say kind things to his face. I think that he made a wise choice in starting this debate at ten o'clock at night. When I go to the Pearly Gates I shall be absolved from some of my sins because I always have to wait till the last, and I hope my hon. Friends will not mind when I say that sometimes it is a little hard to bear. I have always been left till the last. I appreciate that I am a junior Member of the House, although some of my equally junior colleagues seem to be called before me. However, if this debate had not begun when it did, back bench Members would have 1985 had, at the most, four or five chances to get into the debate. Therefore, I think that my right hon. Friend made a wise choice.
I hope that we debate the subject of coal often. We certainly look forward to the White Paper, and I hope we have plenty of time in which to discuss it. My only regret in the present debate is that it looks as though we shall have to curtail our enthusiasm because more business will be coming up at ten o'clock this morning. This may be a bit of a tragedy for some; but anyway, I have got into the debate.
One reads of speeches influencing other men. It was said of Thomas Jefferson, that great American, that he never made a speech because he hated the morbid rage of debate. He believed that men were never convinced by argument, but only through reflection, through reading, or unprovocative conversation. This belief guided him through life. I should like to paraphrase what my right hon. Friend told us earlier in the debate by saying, "To convince a man against his will, he is of the same opinion still".
My right hon. Friend has gone a long way to accepting many specious arguments which will destroy one of our greatest assets. I believe that with all the conviction at my command. In introducing this Order my right hon. Friend said that events since 1965, I repeat 1965, had made the Order necessary, because it was originally intended to be brought forward in 1971. I took him up on this question of the infallibility of the so-called experts, referred to by my right hon. Friend the Member for Easington (Mr. Shinwell), who said that he himself had been led astray by experts. These people are not infallible. Certainly, in their advice on the question of nuclear power they have been miles off the mark. We have no guarantee now that they will not be miles off the mark again. In fact, it is more than likely that they will be. I urge my right hon. Friend to question these matters very closely.
Although I do not want to he regarded as general secretary of a society for the prevention of cruelty to Lord Robens—though he seems to need it sometimes—I believe that he has studied these things to far greater depth than some of the 1986 so-called experts. His opinions should be taken into account.
§ Mr. Edwin Wainwright rose—
§ Mr. McGuire
Let me get full steam up first, and then I will give way.
My right hon. Friend made what he called an interim statement. I regard it as the most important made by any Government for many years, because the worst fears of many of my right hon. and hon. Friends have been confirmed. It means that, within only a few years, we shall witness the decline of an industry which was largely responsible for this country's past economic greatness. I realise that we cannot keep on parading the past contribution made by the miners, though there is no harm in reminding the House of it and, even if it does not do a lot of good, we can derive some satisfaction from it.
My hon. Friend the Member for Abertillery (Mr. Clifford Williams) spoke eloquently of the contribution which the industry has made over the years, and those of us who know the industry in one way or another, through our constituencies or through having worked in it, do not find it easy to accept the sort of statement which my right hon. Friend made today.
I say to my right hon. Friend, with great charity, that an Order of this sort introduced not in glib fashion—it would be unfair to say that—but in what I considered too casual a fashion, telling the industry that it will be written off—that is what the Order means, in essence—is hard to take. This is an industry which has suffered more than its fair share ofthe slings and arrows of outrageous fortune",an industry the history of which can be said to have been written in blood, sweat, toil, tears and man's inhumanity to man.
People may say, "Why do you want men to continue in an industry which is like that?". Curiously enough, many men like working in the pits, and for a great many more it is the only opportunity they have to sell their labour with dignity. It is an industry which, under nationalisation, has many great achievements to its credit, the greatest of all being that it has shown that we can have safe working conditions which encourage the safe and efficient getting of coal.
1987 I am told that the injury rate is proportionately a little higher than it was, though the actual number of injuries is smaller because the men are fewer. But the death rate is vastly improved. We used to have 1,000 men a year killed. Under nationalisation, it has dropped to 240. That is 240 too many, of course, and some of them occur in tragic accidents when more than one man is killed at a time, but it remains true that the reduction in the death rate has been one of the great achievements of the industry. I am sure that its record stands highest among all coal producing countries.
Although mining is still a dangerous, dirty and, to some extent, a socially disesteemed industry, for quite a lot of our fellow men it is the only opportunity they have to sell their labour. I wish that the Coal Board could have got over the hump, but it had the closure programme thrust upon it, and now this further one which when we cut through all the waffle and verbiage, as my hon. Friend the Member for Midlothian (Mr. Eadie) pointed out, means 100,000 men to be displaced. Our record in retraining men is pathetic, to say the least. We shall not be able to accommodate that number.
I believe that commercial considerations have been forced upon the Board, and they have been since 1956, although such considerations were never applied when they would have been to the Board's advantage. From 1947, when the mines were nationalised, until about 1957 the miners could have held it to ransom, but they did not. As I have said before, it is curious that they had Communist leadership. We have always historically had a Communist general secretary, and nobody could accuse Arthur Horner of being a milk and water Socialist. He told the miners that they could demand the moon, that they could be like Samson and destroy the temple of nationalisation. But he said that they had done so much and had so much to gain from nationalisation as miners they must take it easy. He said "Our just demands will be met in the fullness of time. We have a duty to the nation." That was always the advice given and accepted.
The miners were exhorted to work on Saturdays and extra shifts, even 1988 though they had a five-day week—a prized possession. They did not pursue their demands to the full extent of their economic power. They got scant thanks from the Labour Government, and their thanks look like being a little skinnier after what we have heard in this debate. The coal industry was not allowed to act as a commercial enterprise. In the interests of the nation it had to plan repeatedly for a capacity that was always higher, and when it looked like being reached new fuels were introduced because there were shortages. That has been thrown back in the faces of the miners and it has been said that they failed in their duties to some extent.
My right hon. Friend said that he will introduce in the autumn a White Paper on future energy demands. I will bet any odds that apart from the name "White Paper", it will have one thing in common with all the others—it will be wrong. All the previous White Papers have been wrong. We have only to refer to the most recent, that of 1965, which was miles out, to see that.
I repeat my warning that we should look very carefully at the forecast demands. We are told that one of the reasons why we must bring forward the powers from 1971 is that the Coal Board has a tremendous stock of coal. It is said that distributed and undistributed stocks total about 40 million tons. I declare an interest—I am one of the 52 million coal owners.
My right hon. Friend has asked miners how he can get rid of the stock of coal. I will tell him what to do. It will not disappear overnight, but we must bear in mind that it largely results from Government policy not based always, or even at all, on sheer economic considerations. In other words, it has been there largely because we have had unproductive, uneconomic capacity in our generating stations in the form of nuclear energy, as an example. This has meant that many many millions of tons have accumulated on the floor.
It has been said that 6 million tons will be taken by the C.E.G.B. Probably it will groan, but let it. If I had my way it would groan more, and so would the gas industry, to a certain extent. It was supposed to take 300,000 tons. I do not know whether it did. The Government must instruct the C.E.G.B. to alter 1989 its present preference, which hits coal. In other words, it is not using as much as it should. It should quickly use some of the stocks of coal.
At one stage I said that I wanted to interrupt my right hon. Friend, and he said that he had not enough steam up to give way, or words to that effect. I did not pursue the point. Mr. Speaker was keen on short speeches and no interruptions. But I wanted to ask my right hon. Friend about oil. He mentioned that a preference was given and that some disability was put on oil. How will he explain away the fact that, notwithstanding the Middle East crisis, we are using more oil today, on the basis of the last available figures in June, than we have ever used, and at a time when there are great dangers about guaranteeing supplies from the Middle East? Oil is one of the things that we can look at. It is still continuing to displace coal. Also, nuclear energy has displaced millions of tons of coal.
I turn to the merit rating operated by the C.E.G.B. Notwithstanding that this is the most favourable time for nuclear development, it is more than twice as dear in capital cost to build a nuclear station as it is a conventional station. The ground rules which operate on load factor are very heavily weighted in favour of nuclear power to the detriment of coal. Therefore, I believe that the costs of coal are artificially inflated. This situation should be remedied. It would be one way of balancing the budget a little and would get rid of some of the 25 million tons of coal that the Board supposed to have in hand.
I turn to a point skipped over easily by my right hon. Friend. Miners Members are sometimes accused of running a vendetta and being Luddites in relation to nuclear energy. I can make my attitude clear on this, as all my hon. Friends have made it clear. We welcome the advent of anything which, economically assessed and analysed properly, will give the country cheap energy. We do not need to state the reasons for it. It will give us a favourable economic position, bearing in mind that we have to live by exports. But the new source of power must be assessed as rigidly economically as coal is being assessed. In other words, 1990 it must be scrutinised far more rigidly than it is being now.
In his 1965 statement my right hon. Friend the Member for Newton (Mr. Frederick Lee), who was then Minister of Power, christened the new A.G.R. when he allowed it to go on; his words were, "This is a real break-through; this is it." But since that time—this reinforces what I am saying and what my right hon. Friend the Member for Easington said about not accepting the experts too much at face value; and I emphasise that that was only two years ago—the costs on any reasonable and prudent assessment are up 25 per cent., while the costs of conventional provision are up hardly at all. There is still four years to go of this most favourable Dungeness B assessment, and yet the cost has risen.
Furthermore, although we welcome nuclear power and look upon it as a necessary experiment, as my hon. Friend the Member for Midlothian said, do not let us repeat the mistakes with the Magnox stations. We are to commission two magnox stations, technological white elephants which cannot produce power as cheaply as conventional stations can. This shows how barmy the attitude is. Can anyone wonder why there is criticism of the decision to go ahead with these?
We are to have two Magnox stations which will not be competitive because too many stations were commissioned in the first programme. We find that when we try to get information about the nuclear stations we have to drag it out. I would not say that deliberate falsification has occurred, but all the figures were not put on the table right away. I am referring to the fact that the figure of 0.52d. was given by the Parliamentary Secretary in answer to the hon. Member for Dorset, West (Mr. Wingfield Digby) on 2nd March, 1967. There was the 25 per cent. increase coupled with the working party's figures.
This was never included until the hon. Member for Dunfermline Burghs (Mr. Adam Hunter) asked about the royalties of the Atomic Energy Authority from the C.E.G.B. It is only a small amount, but when one is talking about 0.014d. multiplied by about a million the amount adds up. My hon. Friend the Member for Dunfermline Burghs asked a Question of the Minister of Technology and drew 1991 out of him that this represented only half the cost. Administrative costs and research costs are not being passed on to nuclear. If this attitude is contrasted with the fact that the coal industry has always been subjected to real scrutiny one becomes convinced that the Minister of Power has had the three card trick played on him by people who may not be anti-coal, but who are certainly pro-nuclear. They felt that they could quietly get rid of the coal industry.
I hope that the Parliamentary Secretary will be able to answer the questions I have deliberately put to him about why the nuclear cost had to be dragged out.
It has been said that the working party was set up by the Minister of Power to examine the proper cost of the nuclear programme and that its estimate represented the most pessimistic forecast. I do not think that it did, because the working party was made up of experts and members of the Coal Board who were admitted to it, albeit late, after they had "kicked up a stink".
§ Mr. McGuire
I remember that, now that my hon. Friend has reminded me. I know that my hon. Friend shares with me a lack of enthusiasm for accepting figures from Ministers.
The capital cost of the second nuclear power programme will be about £300 million more than the cost of generating the power by conventional methods. The cost of nuclear power and the cost of conventional power are very evenly balanced in the latest authentic figures.
I am delighted that two members of the Cabinet are present. We are told that the Cabinet is engaged in deciding what Government expenditure should be pruned. We are told that, in the present economic situation we have to be prudent. We are told that we cannot go on with our committed programme. But here is an area where we can save a lot of money.
We should see that the first mistake on the nuclear energy programme is not repeated. My hon. Friend the Member for Dearne Valley (Mr. Edwin Wain- 1992 wright) suggested that we should stop at the present number of nuclear power stations. Surely we now have enough technological spin-off from them already. Let us build conventional stations and give them a chance to be competitive, as we believe they are.
If the members of the Cabinet, in their wisdom, burning the candle at both ends arguing among themselves, with each Minister looking to his own corner, seriously mean what they say, they should look at the £300 million extra capital involved in the second nuclear programme. We should have placed before us the full costs of this technological advance.
While there may not be an anti-coal element in the Cabinet, I believe that there is a pronounced pro-nuclear one. Listening to the apologies for the nuclear programme, one realises that it has not lived up to the great hopes placed in it, as Sir William Penney has said. He made the case that coal costs had risen far more steeply than any other comparable costs. He let the cat out of the bag. The capital cost of conventional power stations was over-estimated and this, together with the technological advances in them, makes them cheaper all round.
There is the new technique of fluoridised beds which should be encouraged with the same enthusiasm as the Government are going hell-bent for the nuclear programme. I am told that we could make savings of 8 per cent. in cost. I hope that the Government will examine this, for it is essential that they should at least be fair and give as much aid and as much chance to conventional generation as to nuclear generation. My right hon. Friend and all his predecessors have said that the mining industry has a glorious future and will always play a great part in supplying our energy requirements.
If I may introduce a little humour into the debate, I am reminded of the American judge who sentenced an old lag of 75 to 99 years in the State penitentiary and then asked him if he had anything to say. The old man replied, "A 99-year sentence? But I have rheumatism, a bad heart and arthritis, and I am 75." The judge said, "I know, but do as much as you can." That is the kind of patronising attitude that the Coal Board has adopted. It says, "Do as many years as you can." 1993 The analogy with rheumatism is the social consequences for which the Board has to bear responsibility. "Do your best", it says.
Hove can my right hon. Friend say that there is a rosy future for coal mining when there is not another conventional power station beyond Drax—
§ Mr. Marsh
I want to kill this "rosy future" story before it goes any further. Reference has been made to my saying that we have had our difficulties, but that we now have a rosy future ahead. My speech was divided into two parts. The rosy future and the difficulties which we have had referred to the Labour Party. It was not a reference to the coal mining industry.
§ Mr. McGuire
I will give way again to my right hon. Friend if he can answer this question. How can he say that there is any future? It certainly will not be a rosy one. "Nye" Bevan used to say, "Why gaze into the crystal when you can read the book?" We can all read the book, and we know that in my right hon. Friend's White Paper there will be a reforecast of the 100 million tons envisaged. How can he say that there is a future, even on the basis of 80 million tons? I think that we can say "Goodbye" to the prospect of a viable coal industry.
If we have no conventional power station planned beyond Drax, coupled with the fact that the merit rating is against the burning of coal, how can my right hon. Friend say that there is a long-term future for the mining industry?
I think that it is essential that Seaton Carew is directed to be a conventional power station. It will be the Coal Board's Waterloo if the station is not coal-fired. My right hon. Friend said that social and other considerations would bear heavily on a decision one way or the other. I believe that, even if the costs are evenly balanced, social considerations should swing the balance in favour of coal for Seaton Carew.
In private and public meetings, my right hon. Friend has urged that we should not do anything to create low rnorale in the industry. He says that we must do everything as Labour Members of Parliament to keep morale as high as possible. To give Seaton Carew to coal 1994 would not merely be logical, but would be a tremendous boost for morale in the Durham coalfield.
Lord Robens, who has put up a courageous fight, has said in so many words that if we want an industry of merely 80 million or 120 million tons and judge it solely on commercial considerations, we can get a computer to do it. We do not need a Chairman of the Coal Board to feed in the information.
A former member of the Labour Government and a distinguished member of the Parliamentary Labour Party, Lord Robens must be aware of the social considerations of closing collieries. Some of us on this side have said that his argument for 200 million tons was to some extent unrealistic. Certainly, the Conservative Government, but, more importantly, our own Government, where the blame must be laid, did not take the necessary steps to consolidate this figure.
In my humble way, I endorse Lord Robens' argument that if we contract the industry further, we will put an ever-increasing burden on the coal price and within a short time there will not be an industry. With great courage, Lord Robens has outlined his campaign. The industry needs his leadership. I hope that he continues to lead it and that we redirect Government policy so that we do not go further down the line past the 155 million tons level but have a chance to come back.
With the new methods and improvements which are coming into the pits, given stability and the chance to overcome the hump, I believe that, prior to my right hon. Friend's statement, coal had a very good chance of becoming a better industry, able to give to those who work in it greater rewards to make it a less dangerous industry by taking the steam out of manual labour. That was the way it was going. We could have had an industry of which to be proud.
My hon. Friend the Member for Midlothian said that we are talking about the jobs of 100,000 miners. Whatever we say about the Order, my right hon. Friend the Minister is a humane and good Minister of Power. He has been faced with decisions, and he has taken advice which I would rather he had not taken.
1995 I echo what my hon. Friend said, that it means the end of the Scottish coalfield. I suppose it means the same for the South Wales coalfield. My hon. Friend the Member for Wigan (Mr. Fitch) who belongs to a Trappist order while he is a Member of the Whips' Department, and, therefore, cannot speak in this debate although he would like to, my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) and I are three Lancashire miners' M.P.s without a pit between us. I have a few drifts, what we call "Day Eyes". These are the only collieries that I have, so we as Members will not be affected to the same degree as will those who represent mining constituencies. But, as my hon. Friend the Member for Mansfield (Mr. Concannon) said, we do not look at the problem merely from the point of view of how we will be affected. I have never seen these benches so full of hon. Members who are interested in this problem, and I pay a particular compliment to those who felt, and still feel, that miners' M.P.s should take part in this discussion.
I appreciate this, and I refer, in particular, to my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), who would have made a far better speech than I can and entertained the House with real oratory. I am glad that he is here now and that he has heard most of the debate. My hon. Friends consider this matter to be of tremendous importance to them. This is shown by the way in which the House awaited my right hon. Friend's statement.
The Coal Board was reorganised in November, 1965. A White Paper was issued, there was a statement about the finances of the Board, and then we had the speech of the then Minister of Power, my right hon. Friend the Member for Newton, who told us that there was a great future for the coal industry. He said that we were going to produce more coal than any other European country. He told us that the finances of the Board were being reorganised on the basis of producing about 170 to 180 million tons of coal a year, though everybody thought that the figure would be 170 million.
If we reorganise an industry, and say that it should have a target of 170 to 1996 180 million tons, and then not quite two years later we give it a lower target, should we not again reorganise its finances? If an industry invests capital to produce 180 million tons of coal a year, and the figure is then cut to 80 million tons, the industry is faced with a financial burden which is likely to put it out of business.
Under the 1965 Act, £30 million was tied up in the industry to assist with social costs. In answer to Questions in the House last week, my right hon. Friend emphasised that he was proposing to consider what to do with this money. It is to a large extent dead money. Would not my right hon. Friend agree that the social costs which the Board has had to bear, even the rate of £3.8 million, should be wiped away, and we should relieve the Board of this obligation? We should relieve it, too, of those responsibilities which are really outside its purview. I am thinking particularly of the Board's obligation to help men who retire at 55. The die is cast. Our worst fears will have been realised by the time that we have our debate in the autumn after the publication of the White Paper. There is still time to make the industry one to be proud of by giving it its proper appreciation on grounds of economics and national security. It could still cope with the demand and give its workers a fair reward.
§ 6.11 a.m.
§ Mr. Alec Jones (Rhondda, West)
If I did not speak, even at this hour, I would fail in my duty to my constituents to emphasise the disastrous consequences of accelerating pit closures without providing alternative employment. The technical and financial arguments for the industry's place in a national fuel policy have been well advanced and my hon. Friend the Member for Ince (Mr. McGuire) spoke with humour, sincerity and knowledge.
Young boys are reluctant to enter the industry. Before March this year, I was a school teacher. This is the first time that Rhondda, West has been represented by a non-miner, which shows how the industry has run down in the South Wales valleys. When I asked a class of boys ten years ago how many were going down the pits three-quarters would raise their hands, but when I asked in February of 1997 this year, not one did so. This is significant: their parents, who are miners or ex-miners, see little future in the industry over the next few years. This attitude can only make less viable the so-called long-term pits, which are still considered viable.
I would have liked the proposed £50 million increase in borrowing powers raised and spent by the Coal Board on repairing the ravages of mining in areas like the Rhondda. Many have advocated that the tips and the old colliery sites should be cleared for industry or housing, or restored to their former beauty, but it is too much to expect the community which has suffered from mining to bear any part of the cost.
I welcome the Minister's proposals to make better provision for older miners who are declared redundant. During the short period I have been in the House many cases have come to my attention and they reveal the excellent job that is being done by the N.C.B., but much more needs to be done. For example, a fortnight ago a redundant miner aged 59 came to see me in my "surgery". He told me that he had worked in the coal industry for 45 years but was not entitled to concessionary coal. No nationalised industry should allow this state of affairs to exist.
Hon. Members have referred to the need for a new industrial structure to be created in the old coal areas like my constituency. This can only be achieved by the active co-operation of the Minister and his Cabinet colleagues. My hon. Friend the Member for Rhondda, East (Mr. G. Elfed Davies) referred to this as an urgent matter. For the Rhondda generally it is a matter of top priority if we are to maintain, as the people of the area want, the viable communities of the Rhondda valleys.
The Government have embarked on a policy of giving massive inducements to industrialists to create new factories—and, thus, a new structure—in the Rhondda and elsewhere. But persuasion is proving both slow and inefficient. It is the duty of the Government to repay the debt which the nation owes to the old mining communities by introducing new public enterprises to replace the old industry of coal.
§ 6.17 a.m.
§ Mr. Adam Hunter (Dunfermline Burghs)
This being one of the most crucial debates in the history of the coal industry, I had prepared a considerable speech. At this stage in the discussion, hon. Members have already mentioned many of the points I had intended to raise, which has meant the complete erosion of my speech. I will, therefore, mention only a few points which may be of interest to the House.
When praising the Minister's statement, several of my hon. Friends have said that reasonable assurances were being given to the coal industry. I hope that they are firm assurances and that they will not be perforated at a later date. The speech I had prepared was pessimistic and critical. I still have no cause to be enthusiastic, even with my right hon. Friend's statement.
I have always taken the view that the problems of the coal industry today stem from the fact that former Conservative Governments and the present Government have given the alternative fuels their head. This is the basic reason why many of the declining coal areas face so many problems. We in Scotland have many problems, and we have suffered drastically in the past eight or nine years as a result of the run down of the coal industry. The industry in the central West Fife area has been almost obliterated, and the last of 20 pits will go in September of this year. We in Scotland are very gravely concerned about the Government's policy for the industry, and the Minister's statement brings me no solace.
We have been told that nuclear power will be the cheapest form of power within the next ten years. My hon. Friends and I do not agree. We are only laymen, but we have been putting searching questions and seeking information here and there, We still feel that the second nuclear programme is too ambitious and too wasteful of the country's capital resources.
We are greatly concerned also about the social costs to the industry. We believe that the 1965 agreement was bad because in the end it meant that the National Coal Board was expected to pay £49 million for this item against £30 million contributed by the Government. That is all wrong, and I was very 1999 pleased to hear the Minister say that he intends to give the whole question his very careful consideration.
The Minister has always said what was happening to the industry, and it has always seemed to me that there was a battle being fought between the Government and the Coal Board, with the mining trade union standing on the sideline awaiting the outcome of the struggle but without any chance of directing the course of that battle. That is wrong, and the union recognises that it has been far too quiescent and far too acquiescent in the past. In view of the Minister's report, I wonder whether he will get the co-operation he will need from the union. Already, on the basis of the purported report of what the Parliamentary Secretary said, the Scottish miners' trade union has decided by resolution passed at its annual meeting to withdraw its offer of co-operation in regard to pit closures.
I have never been satisfied about a fuel policy being denied us. I always proudly claimed that a Labour Government would give us an integrated fuel policy, which simply meant that the fuel industry would be given a proportionate share of the supply of our fuel and energy needs, and that coal, being the indigenous fuel, would be the basis of that supply. So far, we have not got that. The only solution is a fuel policy, because without one we cannot have a properly planned economy.
§ 6.25 a.m.
§ Mr. Leslie Huckfield (Nuneaton)
Since I have neither the extensive mining knowledge of my hon. Friend the Member for Ince (Mr. McGuire), the hon. Members for Orpington (Mr. Lubbock) and for Cheadle (Dr. Winstanley) have departed, and the Opposition can produce only two hon. Members, I shall be rather brief. In this first debate on coal mining since I came to this House, it seems a reflection of the concern of my hon. Friends and the lack of concern of hon. Members opposite that we have such a large number of hon. Members on this side who have been prepared to stay the whole night to express concern about the jobs of 400,000 coal miners.
My hon. Friends the Members for Meriden (Mr. Rowland) and Mansfield (Mr. Concannon) and I represent 2000 areas where miners come when they are transferred from Scotland, Wales and other parts of the country. One of the main problems which the National Coal Board has in Nuneaton is where to stock coal. It is being stocked all over the place and causes great concern to my constituents, but I would rather that the Board stocked that coal than that it should put any of the miners in my constituency on short time. That is why I support this Order.
Neighbouring constituencies represent contemporary problems of the Board in, as it were, a nutshell. We have had some closures, we have natural gas at Hinckley, which is nearby, we have the Bevercotes development and we have a briquette-making plant struggling hard to survive. We also have a large number of transferred miners in these constituencies. The problems which the Board is facing were brought home to me sharply by the closure of a pit in my constituency just a week before polling day in the by-election by which I came to the House. I do not hold it against the Minister, for I was elected, but we suspect that that closing order on one of the few remaining collieries in the constituency must have had some effect on the by-election and showed how miners in a good and prosperous area feel.
Let us not have the idea that only areas in Sotland and South Wales have problems. It is not all an Eldorado or Utopia to which transferred miners are coming. There is the problem of what happens to disabled miners who cannot find work at another pit which has its quota of day-wage men. There is a serious problem for those who find there is no contract work and they have to come down to day work at £13 5s. or £12 5s. Not only is there the closing down of a whole village community such as happened in my constituency, but very serious human problems. One can see proudly displayed in a humble dining room a certificate for 50 years' devoted service. The tragedy was underlined by the fact that the pit which closed just before the by-election had only two years before been guaranteed as a long life pit. This was what the miners who came from the North were told. They were coming down to Haunchwood Colliery, which was supposed to be one of the 2001 pits which had more reserves than most of the others in the West Midlands area. Yet is was closed a week before the Nuneaton by-election. That was what really rammed the point home.
It may be thought that it is all right to be in a receiving area. Some of those who have come from the North and from South Wales are beginning to feel—they have told me this; these are not my words; they are theirs—a little like National Coal Board gypsies. I do not say that in any way as a reflection on their NN ay of life but as a reflection on the way they have been shifted about by the Board. They were moved from the North to Hamstead Colliery. That closed. They were told to come to Haunchwood, which was supposed to be a long-life pit. That closed. Where are they to go, because they cannot all work in the Coventry car trade, which also has its difficulties? Do not let anybody get the idea that there is sufficient alternative work available even in the so-called more prosperous areas.
On the whole, the transfer of Scottish miners to Warwickshire and the East Midlands has gone very successfully. As an indication of this, quite a few of the lodge officials are Geordies or Scots or have come from other parts of the country. This is proof of how well the native community has integrated those who have come in. However, although generally integration has gone well, I do not think that the Coal Industry Housing Association paid half enough attention to the difficulties and to the serious human problems which may arise when people move from a totally different area to the Midlands.
I think of the Coal Industry Housing Association in Bedworth in the heart of my constituency. The people who came to live in this estate came because they saw a very nicely presented glossy booklet from the Board. They were shown a photograph of the shopping precincts of Coventry. They were shown a photograph of the public library in Nuneaton, a very fine building. They were shown pictures of Warwick University. They were told stories of very good primary education for their children and of good public transport—the sort of things they had been used to up in the North.
They arrived in Nuneaton in the dead of night. Nobody met them. When 2002 they eventually found out where they were, they had to wait about four months for a house. Instead of earning some of the wages they had been promised, if they have been unlucky enough to be sent to Cape Keresley—we call it "Cape Kennedy"—after they have had the rent deducted they are lucky if they go home with £8 or £9 in their wage packets. These are the realities of the promises made in the glossy booklet. These are the conditions as they have materialised.
When on top of all that is added the closing of Haunchwood, which was supposed to be a long-life pit, it can be seen that the miners who have been transferred do not feel too happy about it.
There are problems also for an area which is receiving the incoming miners. The West Midlands is supposed to be a prosperous area, according to all the reports issued by the Department of Economic Affairs. However, there are not the alternative jobs for these men to go to after a closure. If we have not got alternative jobs in the West Midlands, heaven knows what it is like in Wales, in the North-East, and in Scotland. We in the West Midlands can see only part of it. I can sympathise with my hon. Friends who represent constituencies in the areas to which I have referred.
I speak, not only on behalf of my constituents, the 4,000 miners I represent, but also on behalf of miners all over the country, because it is the National Union of Mineworkers that we are referring to. We have got to get some problems sorted out. We have to deal with the problem of redundancy and resettlement in a realistic way. Something must be done about the vast differences which exist between the contract worker at the face and the day-wage worker. There are some very difficult problems of transfer here. As my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) said, very often some difficult extra travelling is involved. One has to get up 1½ hours earlier and one comes back from work 1½ hours later. Often it costs extra money in bus fares. We have got to get the whole business of travelling to other pits sorted out.
As my right hon. Friend the Member for Caerphilly (Mr. Ness Edwards) pointed out, one of the things we have 2003 got to do is to get some kind of agency or organisation on the spot to sort out these problems. It is no good leaving it to the existing centres run by the Ministry of Labour, the Ministry of Social Security and the National Coal Board. We have seen in my area, where conditions are supposed to be easier, that this does not work. There must be some other agency to supervise retraining and resettlement. This is one of the matters which I hope my right hon. Friend will look into.
Above all, we have got to realise that this is an industry which is sorting itself out. There are many industries to which in the past we have given some kind of protection. We have introduced tariffs and we have given subsidies. We have had quotas, licences and things like that. In most cases one finds that, despite all the protection that we have been able to give certain industries, like the steel industry, those industries have not improved or modernised or changed.
Here we have an example of an industry to which we have given protection and—my word!—how it has changed. In the past 10 years 300,000 men have come out of the pits and there has been an annual increase in productivity of something like 6 per cent. The Prime Minister said last weekend that if all industry could put forward this kind of record, we could start to sort out the basic economic problems of the country. Given changes like this, I think it is worth giving the National Coal Board a measure of protection. I do not see it as an arm of the Ministry of Social Security, as some hon. Members opposite seem to. I see this as an industry which is genuinely sorting out its difficult problems in an efficient way, and it ought to be given some encouragement.
But one thing has got to happen before this reorganisation can be a real success. We have got to restore confidence to the men who still work in the pits. Many of my hon. Friends have said that they hope the day will come when miners do not have to go underground any more. I believe we all look forward to that eventually, but for the time being men have got to work in the pits, and they have got to have confidence. If we 2004 cannot restore this confidence, we shall be in a very serious situation, and even in 1970 we shall not have the men to produce the meagre targets that we are setting for them.
The problems are serious. The social cost of resettlement is probably somethink like 5s. on every ton. As Lord Robens said to the Select Committee last year, even 1s. 6d. a ton makes a difference. The social problems, therefore, are really burdening the Coal Board greatly.
In view of the reorganisation of the industry, the progress that the industry is making in sorting out its difficulties, the kind of increases in productivity, the example that this industry has been setting and the very serious social problems to which I have referred, I wholeheartedly support this Order. But let us please give the men who work down the pits a target and some confidence. That is what every hon. Member on this side of the House has been asking for.
§ 6.40 a.m.
§ Mr. Jasper More (Ludlow)
I am glad that at this late stage of the debate we have at last heard the voice of the West Midlands. With much of what the hon. Member for Nuneaton (Mr. Leslie Huckfield) said I agree, but I thought it regrettable when he tried at the outset to claim a greater degree of interest in the debate on his own side than on this. It is true that one can look across the Floor and see about ten figures draped on the back benches, but in the West Midlands there are six or eight mining constituencies represented by Labour Members, and the hon. Gentleman appears to be the only one who has taken the trouble to come here tonight.
§ Mr. Christopher Rowland (Meriden)
Is it in order for the hon. Gentleman to make a remark like that, when it is manifestly untrue? I have been sitting here for most of the night.
§ Mr. More
I am delighted that there is one other Member from the West Midlands, but that is still only one or two out of eight.
In my constituency we have the problems about which the hon. Member for Nuneaton has spoken. We also have the problem of receiving miners from 2005 other districts, particularly, in my area, from Durham. We have welcomed them, and, on the whole, they have, I think, found a welcome in South Shropshire. They have settled down and they have got jobs, becoming part of our community. But in recent years confidence has gone. This has been the result of the statement of policy regarding the pits issued a short time ago, and even more the result of its implementation.
Experience in my part of the country is that a pit envisaged as closing in ten years has closed in about eighteen months. This has raised a doubt about what is to happen elsewhere. We have one pit, unfamiliar in our part of the country though familiar in many mining districts, which is the only industry and the only raison d'être of a whole community. At present, that pit is listed among those to be preserved, but, obviously, confidence has gone.
The hon. Member for Nuneaton did not sufficiently stress that in the West Midlands area we are not, on the one hand, as prosperous as South Yorkshire and North Nottinghamshire, and, on the other hand, we are not a development area like Scotland, Wales or the North-East. This state of affairs causes special problems, and these problems have been intensified in my area because the pit which is closing is situated in a district which must have a special significance for the two right hon. Members sitting opposite one another across the Floor at this moment. It was the honour and glory of my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) to launch the great Dawley new town scheme. The Leader of the House, who succeeded him as Minister of Housing and Local Government, must sometimes look back regretfully to those happy days, and it pricks his conscience, I hope, to realise that he did not sufficiently follow the efforts of my right hon. Friend in regard to Dawley new town—
§ Mr. Speaker
Order. This is interesting, no doubt, but, at this time of the morning we would do well to keep to the Order before us.
§ Mr. More
I am making the point that the colliery was one of the leading sources of employment in the area. It is essen- 2006 tial to have other sources of employment, but they are not being provided. This is the result of Government policy in failing to take a decision on the shape of the new town and in failing to bring other industries in.
§ Mr. Speaker
Order. With respect, and with a patience which, perhaps, I should not have at this time of the morning, I must ask the hon. Gentleman to speak to the Order.
§ Mr. More
I support the Order, Mr. Speaker, but I wish that the National Coal Board would so order its affairs as to create more confidence in the different areas. To illustrate what is happening, and what the hon. Member for Nuneaton did not mention, I understand that the whole of the area organisation in the West Midlands is being disbanded, so much so that the chairman of the West Midland area, who recently came to live in my constituency, was apparently encouraged not only to live there but to build himself a house, has now been told that his job is finished and that he must go elsewhere. That sort of thing cannot create confidence in an industry.
With those few words, I give my suport to the Order.
§ 6.45 a.m.
§ Mr. Michael Foot (Ebbw Vale)
I think that the hon. Member for Ludlow (Mr. More) was unwise to suggest that hon. Members on this side of the House have not attended the debate in the numbers they might, since I think that all would agree that representation on this side has been very strong throughout the night. Representation from the West Midlands has also been well maintained, particularly by my right hon. Friend the Leader of the House, who always speaks for the West Midlands on mining matters with his special authority. Therefore, I think that it was churlish of the hon. Gentleman to make that suggestion.
All of us who have listened to most of the debate, as I have, will agree that it has been very good. None of us likes all-night sittings, but those who reflected at the beginning on the disadvantages of this being an all-night sitting might wish to withdraw their remarks at the end, because I believe that the Government and my right hon. Friend the Minister of Power have been given a wider range 2007 of the force of opinion on the subject than would have been possible if we had had a debate throughout an ordinary afternoon. I believe and trust that it will have a substantial effect on the policies the Government pursue.
I do not wish to hold up my hon. Friend the Parliamentary Secretary from speaking, and there may be other hon. Members who wish to speak. Most of what I would have wished to say as representative of what was once a very strong mining constituency has already been said, but although I do not wish to hold up the proceedings for more than a minute or two, there are one or two things I should like to add.
The right hon. Member for Leeds, North-East (Sir K. Joseph) spoke in a non-controversial manner and spirit which no hon. Member on this side of the House could wish to disparage in any way. But it should be acknowledged by hon. Members opposite, perhaps more fully than they sometimes acknowledge it, that if the run-down in this great industry had had to be conducted by private enterprise there would have been ghastly havoc and bitterness on a scale which can hardly be described. It is only because the industry was nationalised and has carried out its heavy redundancies over a long period in a humane fashion, with Government support, that appalling human tragedies have been avoided.
All of us on this side of the House, despite the developments in the mining industry, which many of us have deplored and which many miners have deplored, have every right to say that the decision to nationalise the coal mines has saved this country appalling human misery over the past 20 years. If nationalisation had not happened it could have been a mortal tragedy for our people. We had debates on the situation in the coal-mining industry two or three years ago. I remember my hon. Friend the Member for Aberdare (Mr. Probert), in particular, emphasising that if the Government did not make a clearer guarantee to the industry we should be faced with the fact that there would not be the manpower even to get the target the Government presented. Many of us argued this, as did the National Union of Mineworkers. This was because of the drift away from the 2008 industry and because of the competitive tug of other industries.
In the past 12 months that situation has been somewhat overlaid chiefly by the fact that we have had stagnation in the economy. The fact that we have had no expansion of the economy of any degree in the past 12 months has come to the rescue of the Ministry of Power in one sense. It has checked the drop in numbers, and it has prevented the Ministry or the National Coal Board from having to face some of the problems that we were having to face two or three years ago. But we all trust and assume that the expansion of the economy will be resumed, and the earlier the better. Even if it takes some time, it will undoubtedly be resumed, we trust. Therefore, we shall be faced with a situation in which the pressure on the coal industry from that point of view will at a fairly early date be renewed.
I believe that it will once again be the case that the coal industry will be crying out for manpower, manpower which it will not have. In other words, unless the Government take some further measures beyond those proposed by the Minister of Power in his speech I believe that they will not be able to achieve even the reduced target that has been announced. That will be the real peril. If the fall or collapse in the morale of the industry persists, the Government will not even be able to get their target of 155 million tons. That is what I believe will be the situation.
That would be a very serious development from the point of view of the interests of the nation as a whole, not merely the interests of the coal industry, because it would mean that the Government would not be able to secure from coal the contribution to national fuel resources which they have calculated. So when we are pleading for further steps to be taken to assist the coal industry, we are doing so not merely in the interests of the miners and the coal industry but in the interests of the nation. It is only if the measures proposed by the Government are sufficient to stop the collapse in morale—a difficult job to do—that they will have achieved what they and all of us wish to achieve for the coal industry.
So I tell the Government that they must not rely upon the temporary effects 2009 of the stagnation in the economy because when the expansion is renewed they will have to face a different kind of problem, that of how they are to get sufficient people to produce the amount of coal they will require. That is the major problem. How will they achieve it? Will these measures be enough? If any further argument were needed to fortify the point, I should like to quote from a statement made recently by Mr. Will Paynter, the General Secretary of the National Union of Mineworkers. I add to what was said earlier about the contribution which Mr. Arthur Homer made as General Secretary of the Union in earlier years.
I do not believe that there is any single member of the Government or any single person in the country who could question the part which Mr. Will Paynter has contributed to the welfare of the coal industry in extremely difficult circumstances. He has made many brave speeches to try to assist in building up the strength of the industry. I have heard him on numerous occasions in different parts of the country and at miners' galas putting the view of the union. I do not believe any member of the Government could criticise him for the manner in which he has presented it. This adds to the attention which the Government should pay to the pronouncements which he makes on behalf of his union.
This is what Mr. Paynter wrote in an article in Tribune recently when he stressed the necessity for the Government to take every step they can to fortify the morale of the people working in the industry:The coal industry is beginning to realise on its investment on modernisation. Productivity is increasing at a rate that outpaces any other major British industry. The Board and the union are examining the possibility of continuous mining operations over seven days of the week in selected pits. But without Government action to stabilise the market for coal the industry will be unable to get full benefit from these new techniques and developments. It is impossible for the union to co-operate in measures to increase product on in existing market conditions, which could only mean more rapid and extensive pit closures and social misery. The continuation of the trend of increased productivity depends upon the morale of the labour force. Further closures and contraction policies can only lower this still further.2010What is required is a holding operation to permit stabilisation of consumption, production and the labour force.I will not go into the further argument elaborated upon by my hon. Friends, comparing the contribution which can be made by different forms of fuel and the calculations which can be made. I am sure that the Minister of Power has learnt from the debate, if he did not know before, that these calculations will be examined in the utmost detail.
The major point, I believe, is the morale in the industry. If the White Paper containing a more elaborate statement of the Minister's policy, which he is to produce in the autumn, were to mark some change in the figure he has announced in the debate, if there were to be some decline in the prospects of the coal industry, and if the White Paper were to contain some fresh blow against the prospects in the industry and some change from the situation, it would have a catastrophic effect. Therefore, the Government must take the firmest possible measures to ensure that the figure which has been pronounced will be sustained and that there will not be any departure from it.
I do not say that the measures are sufficient to sustain the figure. It may be that further measures will be required. If it appears that they will be required they will have to be taken. If there were to be a departure from the latest figure put forward as the one to be sustained, and if it were to be made lower still, the Minister could write off any prospect of building up morale in the industry. I hope that the temper which has been shown in the debate will have an effect on the Minister, as I think it will. The statement the Minister made at the beginning of the debate went some way to mitigate the strong feelings which were rising. But I do not think that he has gone far enough yet. I hope that when we get the White Paper in the autumn it will be a statement to carry out what Mr. Paynter has asked for on behalf of the union and which has been supported by my hon. Friends from mining constituencies in all parts of the country.
What the Minister says in the White Paper is of crucial importance, and on it depends the main point of whether the Government will be able to keep enough 2011 people in the industry to get the coal which is absolutely essential, on the Minister's own reckoning, in the interests of the nation.
§ 6.58 a.m.
§ Mr. Eric Ogden (Liverpool, West Derby)
This may be an appropriate moment to suggest to the Leader of the House, as a reforming Leader of the House, that he considers the facilities offered in other legislatures whereby members can place their speeches on the record without having to make them at seven o'clock in the morning.
I will declare my interest. I am sponsored by the National Union of Mineworkers, as are many of my hon. Friends who have spoken in the debate. I trust that no one will suggest that being a member of my union constitutes a prima facie breach of privilege.
At the beginning of the debate there was some criticism of the Leader of the House for taking late at night a debate which was expected to continue into the early hours. No one thought it would extend until this hour. I and many of my hon. Friends thought that that criticism of the Leader of the House was unnecessary and unfair. I hope that this is not secret, but there were consultations between the mining group and the Leader of the House and the Minister of Power. We were asking for an opportunity that we tried to get earlier on the Gas (Borrowing Powers) Order and the Control of Liquid Fuel Bill. No hon. Member was forced to stay, but we are not in the position of being able to hold the debate upstairs so we have had to keep some members of the staff here. Perhaps my right hon. Friend will consider for the next Session the advantages of being able to adjourn a debate like this to a room upstairs.
My right hon. Friend the Minister of Power said that this was not just a sterile debate on facts and figures but about the needs, hopes and aspirations of hundreds of thousands of men and women. I am glad that he approached it from that direction. But what he said was an under-estimate. The N.C.B. is the second largest employer of labour in the world and the third largest concern outside the United States, in terms of assets. It is larger than I.C.I., Unilever and B.M.C. 2012 put together. It has 1,250,000 employees and dependents. In merchandising and retailing, 13.000 people are employed; the manufacturers of mining machinery and equipment employ another 100,000. The Board's bill for wages, pensions and salaries is about £450 million per annum. At least 3 million people are effected for better or worse by the fortunes of the Board.
With so much foolish talk of a contracting and declining industry, there is danger that we may look back with some sort of nostalia to the so-called halcyon days of 1913, when production was 287 million tons, or to the 1920s when the industry directly employed 1,200,000 men, and forget the terrible conditions under which these results were achieved. Now the industry produces 175 million tons with the manpower of 400,000, which is still twice the number of men in the British Army.
We should emphasise that the Board has a record second to none for efficiency and productivity, not only at the coal face but in the administrative machinery. Not all of its employees are brawny miners at the coal face. We could not work this machinery without the white collar workers. An organisation created 20 years ago for the administration of the machine was recognised 18 months ago as being no longer appropriate. Then we had the Board, the divisions, the areas, the groups and the collieries—five separate organisations within one overall organisation. This was replaced by three groups—the Board, the areas and the collieries.
In the previous ten years, the Board had reduced the number of its white collar workers by 13.000 men and women—and let us not forget the women who work in the industry. It is estimated that another 13,000 white collar workers will go over the next few years, making a total in ten years of about 25,000 and a saving of £12 million to £15 million per annum. This point is not emphasised often enough, because it shows that there are also difficulties for the clerical and administrative staff as well as for the miners themselves.
All those who have spoken have referred to the need for the industry to be competitive. But there is danger here of looking at the cost of coal simply in terms of 4d. or 5d. a therm. We cannot 2013 measure the cost of coal simply in terms of pounds, shillings and pence or of 0.001d., whether in decimal currency or anything else.
As my hon. Friend the Member for Ince (Mr. McGuire) reminded the House, the cost of coal has been and still is calculated in terms of blood, toil and tears, in broken limbs and sudden death. In 1965, 217 men met sudden death in our pits. In 1966, there was some reduction, for which we are grateful, when 156 men were killed. Injuries are a daily occurrence, and, despite all the improved techniques, new machinery, support rules for roofs and roads, and so on, working conditions are still difficult and dangerous.
It is no great achievement to modernise a pit top with baths and canteens, with coal washeries and handling plant. When one goes back to the coal face, one returns to the carboniferous era and the dark ages. When I think of some of the places in which I worked during the 12 years I spent at Bradford Colliery, I shudder. It was no place for anyone to work, and we must have been slightly road. It must be some consolation to the Whips when we grumble and grouse about conditions here and how difficult it is to get to and from the Palace of Westminster. Some of my hon. Friends have said that it is a bit rough at times, but at least it has a good roof—at least I hope so. We may have difficulty crossing Bridge Street, but we do not have to crawl a mile on our bellies to get to our place of work.
It may be that we tend to forget such things when we come here, but they are the price of coal. I am often reminded of an incident in my time at the pit when I went into the bathroom and found my seven-year old son in front of the mirror with a ballpoint pen in his hand putting blue marks on his back so that he could "be like dad." I am one of the dads in this place who want to get other dads out of the pit and into safer and easier ways of earning an honest living.
In this endeavour, the choice before the House and the country is the same as that before the National Coal Board and the National Union of Mineworkers, and I want to remind hon. Members of a statement by Sir Sidney Ford in his presidential address to the union's annual 2014 conference only a few days ago, in which he said:In my view we have now reached the stage where we will have to decide whether the interests of our members would be best served by a continuing campaign to bring about some fundamental change in the attitude of the Government and the acceptance of the principle that the survival of the industry should not necessarily depend in the long-term on its ability to achieve price competitiveness, or whether we should concentrate our efforts on obtaining the maximum additional short-term assistance to enable the industry to complete the current plan of reorganisation and to meet the social costs that arise as a consequence thereof.In view of my own experience, I plump for the second alternative. The Minister has made it clear that his endeavours have been and will continue to be to ensure that not only is coal produced but that the maximum amount is sold. He has initiated plans to distort the natural pattern in favour of coal consumption and against oil, gas and nuclear energy.
We on this side of the House all welcome—and the right hon. Member for Leeds, North-East (Sir K. Joseph) gave it a qualified welcome, for which we are grateful the decision to require the C.E.G.B. to use an extra 6 million tons of coal, but I think that we want spelt out in rather more detail how the intention is to be carried into operation. We would like more information about how the gas industry is to carry its share of the burden. It seems to be economic madness, in the same month as we have a Control of Liquid Fuel Bill, we have a 25 per cent. increase in fuel burned in the south-east estuarial power stations.
Every little helps, however, and British Rail can carry a share of the burden by slowing down conversion from coal to oil. Industrial organisation, too, could be asked to defer conversions from coal to oil in the national interest. The C.E.G.B. should certainly be given the right to provide two new coal-fired stations in each five-year programme. This would be a major source for the coal industry.
At the beginning of the debate, we were glad to have the presence of my right hon. Friend the First Secretary of State and his assistants from the Department of Economic Affairs, because they also carry a heavy responsibility for what is happening in the development areas. I hone that some of what we say will be 2015 communicated to them. The Department of Economic Affairs and the Treasury must reconcile their differences and accept the logic that the Coal Board should benefit from the same Selective Employment Tax advantages as other manufacturers in development area. It is crazy that someone manufacturing candy floss in the Merseyside development area should receive a subsidy of 7s. 6d. or 30s. a week for an employee whereas someone who leaves West Derby and goes slightly outside the area to Cronton Colliery or Bold Colliery should be denied that benefit.
There have been numerous references to North Sea gas. To burn almost pure methane to produce electricity is a colossal waste of natural assets. I suggest that my right hon. Friend the Minister should not put all his bets on nuclear power as being viable on present forecasts. Certainly, Seaton Carew should be a coal-fired station, and we could make a strong case in Lancashire, without bringing in the Midlands and Yorkshire, for the new station at Heysham also to be coal-fired. By making that one decision, the Government would save £78 million capital outlay as against the cost of a nuclear station. That is a serious consideration.
At last, the Government recognise that subsidies by a Labour Government for a nationalised industry are not a naughty thing, and the Opposition also recognise that. It may be that we should have a study to find which is the most economic way of helping, whether to provide redundancy payments, advance factories, S.E.T. repayments, retraining and all the rest. It might in the long run be cheaper to pay a subsidy of 10s. a ton.
Estimates of stocks have varied between 30 million and 60 million tons. We are exporting 3 million to 6 million tons per annum. At the same time, it might be cheap and good business, as well as being very moral, to give some of it away. I do not know how we would get it to Zambia, but that country would welcome it. We talk about providing desalination plants in the Middle East. The Americans have a good record in desalination plants, which are small and convenient but not very cheap and which use coal. If we could provide such a plant for Jordan 2016 and one for Israel and send the coal at the same time, we would reduce our burden of storing it in England and it might be a good way of easing the position.
Now, a quick word on personnel. The House will welcome the decision to provide the beginning of pensions at the age of 55. Even though they are to be contributory, this is a beginning of the recognition of the different conditions in the industry.
I am glad that the House has confirmed its interest in these matters. We have heard not only from union-sponsored Members and others from coal areas, but from Members representing all areas. I have no doubt that my right hon. Friend the Minister is well aware of the industry's problems. He has proved this on many occasions in past months. The problem has now gone beyond his Department to the Cabinet. The Cabinet must show that it recognises the problems which we recognise and is prepared to give us at least a much greater degree of support than it has been able to give in the past.
§ 7.15 a.m.
§ Mr. Christopher Rowland (Meriden)
I apologise for speaking at this hour, when it is too late to go to bed and a fraction before the working day starts, but I do so because, like some other Members, though I am not a N.U.M. Member, I have some half dozen pits and several thousand miners and their families in my constituency, and to this extent I am as much concerned about and interested in the future of the coal industry as any hon. Member who is identified as a miners' M.P.
Last night we had from the Minister the announcement of half a national fuel policy. I wish that it had been possible for my right hon. Friend to have circulated his statement in advance, because there are many questions arising from it which I would like to ask, and we have all been put in the difficult position of having almost to take it down in such shorthand as we possess to enable us to make an intelligent speech about what he said. There are some questions which I would like to ask my right hon. Friend through the Parliamentary Secretary. I do not necessarily expect answers in a few minutes, but they are questions to 2017 which I am sure we would like answers over the coming months.
We have been told that the output which is aimed at in the immediate future is 155 million tons, though initial calculations suggested something over 140 million tons. I gather that the shortfall is to be met by 6 million tons increased consumption in the electricity and gas industries, but I would like to know where the other 9 million are supposed to come from. How long will this figure of 155 million tons be held? Is it dependent on no increase in stocks above a certain level? How much is the maintenance of this figure likely to cost the taxpayer?
Perhaps a more serious figure, and one which I am sure will reverberate round the coalfields, is the projected possible figure of 120 million tons in the mid-1970s. I would like some assessment by the Ministry of whether this figure is the absolute rock bottom to which the industry might go. Unless this kind of assurance is given, the whole problem of morale will be made even more difficult.
Is there any risk, as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) mentioned earlier, that these figures, either of 155 million in the immediate future, or 120 million in eight or ten years from now, will be revised downwards even within the next six months before the Government's total fuel policy is announced? If so, it would have been better to have given a lower figure today, rather than delay it for a few months. Does the Board accept these figures? I understand that Lord Robens is to make some pronouncement today on last night's announcement by the Minister. Perhaps I shall receive my answer fairly soon. We should be told how far there has been some reconciliation of viewpoint between the Ministry and the industry on this matter.
In some ways the only major consolation which miners on the ground and underground will receive from last night's announcement is the statement of increased help for redundant miners. I am not entirely clear, though, but perhaps I did not take it down properly, whether this is to be for disabled redundant miners, or for all redundant miners over 55. Is there any possibility of there 2018 being some retrospection in this matter? It will be very hard if we have a situation in which any miner will benefit as from today from last night's announcement, but any miners who were made redundant in the last 3, 6, [...]2 months will not. I can foresee a good deal of legitimate grievance in the mining communities about this matter. Can we have some indication of how much this proposal will cost?
On the other hand, there are many consolations which were not offered by the Minister. The one which I would have liked to have heard was some assessment by the Ministry of whether the coal industry can, by one figure of output or another, eventually pay its way, either by a combination of increased productivity and sales, or by a further write-off of some of the capital of the industry. The men need to know what is expected of them and their machinery.
Perhaps the Ministry does not know whether the stocks will be run down but this is an important factor. And what about other possible markets? The Homefire plant making smokeless briquettes in my constituency is having teething troubles. What are the prospects for this important development?
Morale is a problem even in the relatively prosperous West Midlands. The Minister will recollect a recent pit closure in my area, because he was challenged on it during the Nuneaton by-election. Rumour licks at the reputation and future of other pits in the district. In the minds of some, there is uncertainty about whether the A, B and C categories of collieries still stand. Could these categories be confirmed or revised? In areas like mine, jobs for miners transferred from the North-East or Scotland have disappeared. Men who have lost contract work cannot get equivalent work in neighbouring pits and the new national agreement does not yet deal with this fully. Travel to other pits is sometimes difficult, anyway. It is difficult also to attract school leavers.
Uncertainty is the sapper of morale, as my right hon. Friend the Leader of the House, an expert in psychological warfare, would recognise. Although not with us now, I give him credit for the fact that he has been here most of the night, though I have some doubts about Cabinet Ministers being up all night.
2019 Miners do not know who to believe about the envisaged output—Lord Roben's assessment to the Ministry or experts' hints about Ministry thinking which has not been vouchsafed to us yet. If people knew the worst, they would face the situation better. This is easily forgotten in London. I weary of the pundits' blithe references to one closure a week, as though it were pre-ordained. Will this rate be stepped up under the new output proposals? It is now a larger proportion of collieries than it was a few years ago. One out of 1,000 is very different from one out of 400.
"Responsibility" tends to be a euphemism for lack of imagination, particularly in the south of England. If a Royal Commission recommended a reduction in the number of seats in the House of Commons by 200—and it could be argued that there are too many in comparison with other legislatures—we would not view that with the equanimity and impartiality with which we expect miners to view the closure of their pits and the rundown of their industry.
In my constituency the N.C.B. is preparing a revised application—I understand that it has not yet been made—for a considerable amount of opencast working in an area which has already suffered it. It is difficult to jusify to the public further extensive opencast working when they can see with their own eyes the stockpiling of coal that has come from underground.
I appreciate the economic argument—that opencast is the cheapest form of coal extraction—but it is difficult to explain to people that it is necessary when underground coal is being stockpiled. It may be cheaper. If it is, we should be told how much cheaper it now is and how its average production costs compare wih the marginal production costs of the most efficient deep mined pits.
We have discussed the social costs which arise from the closing of deep mined pits and we have been told that the Government intend to bear some of these costs. But there are social costs involved in opencast mining as well. The Minister has extraordinary powers of decision in this matter and can decide whether N.C.B. applications should be approved. 2020 He should, when making these decisions, set against the economic advantages of opencast this social cost factor in the way he rightly does when considering deep coal mining.
In the last few years the coal industry has had a remarkable record of increasing its productivity and decreasing its labour force. The railways, another nationalised industry, are the only other one to show a comparable drop in the number of people employed; and in both cases the reduction has been carried out with remarkable skill, due to co-operation between management and unions.
I look forward to seeing the coal industry as part of the nation's efficient supply of four fuels. Lord Robens is right to be fighting like a tiger for his corner. But I recognise that my right hon. Friend is the Minister of Power and not only the Minister of coal and that he must make a balance between the different fuels.
Looking beyond the coal industry, we have the good fortune to be among the leaders of nuclear power and to have discovered natural gas in the North Sea, perhaps the only lucky break this country has had since the war, though it may not be a lucky break for the coal industry. I hope that, combined with these two fuels—plus such oil as we decide to buy—in the coming years we will have the good fortune of a stabilised, efficient coal industry. In so far as the Order helps to achieve this I support it.
§ 7.29 a.m.
§ Mr. Michael Alison (Barkston Ash)
This has been a long debate and many speeches have been made. It would be tedious if I were to mention all that have made an impression on me, but I wish particularly to mention the remarks of the hon. Member for Dearne Valley (Mr. Edwin Wainwright), who emphasised the oil hazards in the Middle East, the enjoyable speech of the hon. Member for Ince (Mr. McGuire) and the interesting comments of the hon. Member for Mansfield (Mr. Concannon).
Many gems have glittered in tonight's speeches. I thought the nugget appeared in the Minister's statement—and this point has not received the attention it deserves—when he announced the crucial figure which is the whole explanation for this long night's debate. He announced 2021 that 155 million tons was the new coal target. When I think of the number of speeches we have heard, I am surprised to realise how little this figure has been discussed and questioned. I at once make an honourable exception of the hon. Member for Meriden (Mr. Rowland), who spent a little time analysing it. The hon. Member for Ebbw Vale (Mr. Michael Foot) conducted a sort of rearguard action on the figure and took the line of "Thus far and no further". But I certainly am surprised that the Minister should have been let off so lightly with this target figure of 155 million tons.
In retrospect, it is most extraordinary, and I suspect that one reason for it may have been the very presence of the Leader of the House as adviser on psychological warfare. If one starts with a figure of 140 million tons and then says, "You have been very good—we will put it up to 155 million tons", everyone heaves a sigh of relief and thinks "Half a loaf is better than no bread". Nevertheless, the right hon. Gentleman should not be allowed to get away with that figure without some analysis of it. One of the things that has surprised me is that so many hon. and right hon. Members opposite have accepted 155 million tons without even advancing a suggestion of a 5 per cent. or 10 per cent. increase on it.
A lot of thought and energy has been devoted to criticising the nuclear power programme, but would hon. Members opposite be satisfied if the likely coal equivalent in nuclear power by 1970—which is not more than 10 or 12 million tons as far as one can see from the White Paper on Fuel Policy—was totted on to fie 155 million tons, bringing it up to 165 million or 170 million? Would that be a satisfactory figure? For many hon. Members I do not think that it would, because they will no doubt remember that the previous Minister of Power, the right hon. Gentleman the Member for Newton (Mr. Frederick Lee), had some very firm things to say about the target only as recently as 25th November, 1965.
Moving the Second Reading of the Coal Industry Bill, the right hon. Gentleman then said:When one hears some of the arguments adduced about what will happen to the coal industry if its target is only"—and one marks the word "only": 2022170 or 180 million tons, I invite the House to remember that it would still be about the biggest coal industry in Europe.So there is the Minister of Power in 1965 fighting a rearguard action on 180 million tons. And the extraordinary thing is that at that time the right hon. Gentleman the Member for Newton said:… if the industry or its products were to fall below the figures"—that is, 170 million or 180 million tons:which we put in the White Paper, I would then become worried on balance-of-payment grounds."—[OFFICIAL REPORT, 25th November, 1965; Vol. 721, c. 781.]Today there has been a complete reversal of that statement by the Minister, who said that the figure would have to be under 155-odd million tons. So the figure of 155 million tons has not been given much scrutiny or analysis, and I think that we have all let the Minister off far too lightly.
Let me now look at what Lord Robens has done about the figure, because he is, in many ways, the great authority. On looking at his comments. I find that if one tries to analyse the Robens position on total tonnage he is a sort of two-ended animal—a push-me-pull-me animal. In a way, there is Robens the realist and Robens—I do not know whether to call him the optimist or the publicist, but they are two different animals. Let me remind the House of what Robens the realist thinks the target should be.
He had something to do with the report of the Prices and Incomes Board on the prospects for the coal industry when the P.I.B. was examining whether or not he should be allowed to charge more money. He supplied Mr. Aubrey Jones with all the facts and figures, and we find a useful breakdown—and here I refer to paragraph 52 in the famous report on coal prices—of that portion of coal production which is profitable and that portion which is unprofitable and which loses money. If we tot them up, we find that the tonnages of coal produced profitably came to exactly 120 million tons and the balance was all produced in areas making losses of between 5s. and practically 13s. a ton. Here we have a nice figure in the prices and incomes evidence of 120 million tons, which is what the Prices and Incomes Board considered a viable figure. I ask hon. Members to mark this figure of 120 million tons, because this has to do 2023 with Robens the realist. When he came to the Select Committee on Science and Technology, on 15th June this year he used these words:If the London price of gas is somewhere about that,He used the figure of 3d.—that means that this is as cheap as national gas. In total there is about 120 million tons at round about 4d. a therm. We think we can get this down.Here is Robens the realist repeating the figure of the profitable competitive amount of coal, 120 million tons. Lest it be thought that he always wants to temper his realism, at the same visit to the Select Committee he made it clear that he was not interested in subsidy or protection. He said:I am completely against subsidising it and I am utterly against protection as a long-term measure.This is Lord Robens making quite clear that the viable figure for the coal industry was 120 million tons and he was against protection, which must mean that he supposed that the ideal for the industry would be about this level.
Lord Robens went on to make clear that the whole of his policy in the Coal Board was towards using the £80 million odd that he will have to support the industry through redundancy measures and so on down to this lean and slim figure which he regards as a viable size. How is it that it has been brought up from 120 million tons to 155 million tons? If one believes in slimming the industry so that the unprofitable mines are cut away and one is left with a viable industry, one will be able to concentrate management and capital resources on the viable part by which one can get an increase in production. If the industry consists of the viable 120 million sector, how can it be increased to 155 million tons?
§ Mr. Varley
I followed Lord Robens's arguments very closely. Surely what he has been arguing recently has been that it is a question of time. One cannot close pits any faster than at the moment—one a week. To close them more quickly would mean not only great hardship to the men working in the industry, but great strains on management.
§ Mr. Alison
There may be something in what the hon. Member says, but he 2024 cannot have it both ways. Lord Robens cannot talk about a viable industry and at the same time attack the nuclear power programme, which is quite irrelevant in this context. This is where Lord Robens the publicist is so difficult to understand. Having made quite clear that the figure for a competitive industry is 120 million to 150 million tons, which he can manage and make a profit on, there is no point—it is meaningless—in attacking the nuclear programme which in 1975 will be producing a coal equivalent of 10, 12 or 15 million tons. If he adds the 15 million tons, he is still no nearer the old target of 180 million tons. This attack on the nuclear programme is irrelevant. It is a distraction. He is trying, for reasons best known to himself, to divert the attention of the coal mining community and of the public from what should be of much more crucial concern for us, namely, the question: having got his slim industry of 155 million tons, how can he increase sales?
I believe that he could. A question asked by my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) and to which we have not yet had an answer—I hope that the Parliamentary Secretary will answer it—was: if the coal target of 155 million tons leaves a viable going concern as a coal industry, this is only a starting point, and what about exports? Where is the scope for increasing exports? The first point then is: can the price of coal be reduced? If it is 158s. a ton plus at present and the industry is to be slimmed, can we expect a price reduction? This is the first question.
If there is to be a price reduction, what about doubling the export target? Nothing has been said about targets? In the National Plan it was 5 million tons. They managed to export 6 million tons in 1964 with a very unecomonic mining unit. If we are to get a competent, slim, lean, industry, why not aim to double coal exports from 5 million tons to 10 million tons or even to increase them to 15 million tons? Then we would be up from 155 million tons to 170 million tons straightaway. Nothing has been said about the potential for building on this figure of 155 million tons. Everybody accepted it. The hon. Member for Ebbw Vale fought a rearguard action on it, his attitude being, as I thought, "Thus far and no further". There was 2025 no sort of idea that this might be the launching pad or jumping off point. If the industry is to be a modern, modernised, capital-intensive, profit-making industry based on an output of 155 million tons, why not regard this as a starting point and not the ending point? This is what we want to hear.
Will the price come down when we get this slim, lean, industry which the Government are spending so much money to acquire? Can we expect a real increase in exports? We want to know this, because far too little attention has been paid to the scope for regarding 155 million tons as the base and the beginning and not the end. Those are a few questions on which we want to hear answers. Can we expect this to be a base figure to be increased? Will the price of coal come down?
I must touch on something else which fills us with a real sense of criticism about the way the Government have presented the case tonight. Although the figure of 155 million tons has been rather tamely accepted by right hon. and hon. Members opposite, I believe that far too little critical appraisal has been given to the social measures which the Government have handed out at the same time. What the right hon. Member for Newton gave us in November 1965 was a cut-back of the coal target from 200 million tons to about 180 million tons. In doing that he spent a whole day giving us a new Bill handing out £30 million of Government money and making a most far-reaching pronouncement on what he would do.
Today the Minister gives us a far greater chunk of surgery on the coal industry, a cut-back from 180 million tons to 155 million tons at the very least, which is a far bigger slice off the industry than we had in November, 1965. Yet he told us nothing about the amount of money which will be available. At least the right hon. Member for Newton gave us £30 million. Are we to be told a figure tonight? What in terms of hard cash will be available for the extra pensions, the supplementary redundancy payments, and all the rest? We want a hard figure. It must be at least comparable with, and should in practice be much more than, the £30 million we were promised in 1965.
Finally—I apologise for leaving it to this rather late moment—I want to ask 2026 one or two technical questions on the famous Order itself, which has received almost as little attention as the new target figure. Is the extra borrowing power, which the Parliamentary Secretary will soon be discussing with us, all to do with coal stocks, or will it also cover other expenses? Can he quantify precisely the cost of the coal stocks for us? Secondly, if it is not only to do with coal stocks but will cover other items as well, what are those other items? Does it represent extra payments for accelerated closures? Does it represent subsidy towards operating deficit? One of the matters that we discussed recently was the permission given by the Prices and Incomes Board to cover a deficit of £80 million. We would expect there to have been a deficit this year. Is this extra borrowing power concerned with a possible deficit?
We ought not to let the Government get away with this plea that the National Coal Board, through no fault of the Government, is carrying these enormous stocks. It is the fault of the Government. This is one of the reasons why there should be a general far-reaching debate on the coal industry's future. Coal stocks are obviously a demoralising phenomenon, and it is due to the Government. It is due to the cutting of the growth achieved by the Tories in 1964, and the steady decline first of 6 per cent., then 4 per cent. and 3 per cent. No wonder coal stocks have grown. They will soon disappear when the economy starts growing again. The Government should subsidise this themselves and should not try to force it on the coal borrowing powers.
We have a far-reaching debate. I believe the Minister has got away very lightly with his new figure, and I believe that he has done it partly as a confidence trick. He gives a figure of 140 million tons and then increases it to 150 million tons and says "What lucky boys you are." We look forward to hearing a full appraisal of the whole of the debate from the Parliamentary Secretary.
§ 7.47 a.m.
§ The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson)
Despite the somewhat unfortunate phraseology of the latter remarks of the hon. Member for Barkston Ash (Mr. Alison), I think it will be fair to start by saying that this has been one of the 2027 most wide-ranging and comprehensive debates that I have experienced in this House on one topic, and certainly it is a debate to which more speakers have contributed than in any other. I think that, including myself, 34 Members have spoken in this debate. I do not know that I have ever experienced a debate of this kind before. It has certainly been an excellent one.
The first point I should make is that my right hon. Friend's main purpose in making a preliminary statement on fuel policy at this stage—and it is only a preliminary statement—was to sound out hon. Members and give him an opportunity of hearing wide-ranging views and reactions to the statement, which can be borne in mind between now and the actual publication of the White Paper in October.
Quite a number of the points which were raised by the hon. Member for Barkston Ash are ones which must necessarily be followed up in the White Paper. Similarly, most of the questions which were put by my hon. Friend the Member for Meriden (Mr. Rowland), as I think he will appreciate, must be dealt with in relation to the White Paper, and most of the others are questions which would be best directed to the National Coal Board rather than to the Minister. We shall certainly read the Official Report, and if there are points that we can follow up specifically we will certainly do so.
I do not think anybody will bless me if I speak at length in answering even a small percentage of the points which have been raised during the course of this prolonged debate, but I will attempt to deal with some of those which I have noted down.
I have been asked to state the purpose of the extra borrowing. It is concerned primarily and mainly with stockholding, but to some extent with the acceleration of closures and the redundancy payments which flow from them. The sum involved relates solely to those matters.
§ Sir K. Joseph
The hon. Gentleman has not dealt with the point that the Minister's predecessor, in November, 1965, expected that £750 million would last through to 1971. Is the hon. Gentleman saying that it is just the extra 12 2028 million tons of stock which explains the change in the Minister's prediction?
§ Mr. Freeson
No. The point is that, if there is a different figure and a higher rate of run-down, as has occurred since 1965, that leads to greater expenditure over a shorter period. Without going into detail, that is the general answer on that point.
The wide ranging points which hon. Members have made will be noted and borne in mind when the White Paper is prepared, but, in that context, I must refer to the tendency, understandable in the circumstances—no one belittles the anxieties which are felt about the future of the coal industry—to unduly talk down the industry. It is understandable, but it can do a great deal of damage to the industry. Whatever the realities will be following the White Paper, it is my right hon. Friend's view and mine, and the view of the whole Government, that the coal industry will remain of prime importance in the country's economy. This must constantly be borne in mind.
There is also a tendency, again understandable in the present state of uncertainty and anxiety about the industry, to think of the Government's policy as one to run the industry down. On many occasions, both in the House and elsewhere, my right hon. Friend has stated that it is the Government's policy—this was clearly indicated in the preliminary statement he made today to control the run-down, so that it is properly phased down, not letting the market trends just carry the industry in an uncontrolled fashion down to a low level of production and sales.
This brings me to the figure which, quite rightly, has been made much of in the debate, that is, the 155 million tons. The hon. Member for Barkston Ash has misunderstood the basis of this figure. It is not a target. My right hon. Friend has made this quite clear. The Government are seeking, by various measures and in consultation with industry, particularly the electricity industry, to push up the coal burn to the 155 million ton level, above what was originally estimated on the studies of trends to be 140 million tons. That figure of 140 million tons was revised upwards on the basis of further studies.
We want to push up the coal burn in order to cover the period between now 2029 and the early 1970s, the key period of transition to which so many hon. Members have referred and about which the National Coal Board is concerned, in order to ease or control the rate of phasing down and reshaping of the industry. That is the purpose of the figure of 155 million tons. It is not a target figure. It is in order to ease the transition period between now and the early 1970s. I stress that the Government are seeking to keep the level of consumption up in order to make it easier to phase the industry and reshape it to the context of the 1970s.
§ Mr. Lubbock
Will the Minister achieve this by asking the Central Electricity Generating Board to alter the order of merit as between coal and oilfired stations? If so, can he say what saving of oil imports there will be for the balance of payments?
§ Mr. Freeson
I do not wish to quote from my right hon. Friend's speech, but this is exactly the opposite to what he said last night. He said that the objective would be to enable the C.E.G.B. tinder the new arrangements to present its case for various power stations on their economic merits.
How the electricity industry will be assisted financially is a matter that has still to be worked out in detail. But the point my right hon. Friend made was that the community at large, by way of the Exchequer, would be required to pay for the assistance. The burden would not fall either on the coal industry or on the electricity consumers. There will be economic comparisons, but the cost will be met from public funds.
Some hon. Members wanted more detail, and felt that a speech last night was not the right way to present the policy to the House. But it must be remembered that this was a preliminary statement. My hon. Friend indicated that the details are now being worked out in consultation with the industries and other Departments concerned.
§ Mr. Edward Milne (Blyth)
I am sorry to interrupt my hon. Friend at this stage, but surely the point he is trying to make is that the industry's output is not being raised from 140 million tons to 155 million tons, which is the figure my right hon. Friend gave, but is 2030 being reduced to 155 million tons. If he is arguing that it is being raised, does that mean that the coal-fired power station in the Durham coalfield has received my right hon. Friend's consideration?
§ Mr. Freeson
I cannot be tempted to comment on what my right hon. Friend's position may eventually be on the future power station programme as between coal or nuclear power. The point that I must stress is that this is not a question of the Government's reducing coal consumption. It is a question of the Department's studying what is happening in the fuel industries, seeing certain forecasts over the next three to four years, and the Minister's saying, "This is not satisfactory. Too many difficulties will be created for the coal industry if these trends continue at that level, reducing demand to 140 million tons"—or however many tons it is—"We must keep the coal-burn above that figure so that the run-down can be properly controlled and planned."
It is not a Government decision that consumption should decrease to about 140 million tons, or whatever the figure would be, as dictated by the market trends. It is the Government's decision to try to get the coal-burn above that figure. One must qualify by making the important point that the Government do not run the industry—organise productivity or market coal. The actual figure of consumption will depend on the rate at which productivity is increased and. on the other side of the coin, the rate at which markets can be expanded. This cannot be dealt with solely by means of consumption at power stations. There are other spheres of marketing that are also important.
§ Mr. McGuire
I am grateful to my hon. Friend for giving way, and I do not wish to delay him too much, for he has waited a long time. But, inherent in all the White Papers and previous discussions has been the fundamental fact that the numbers in the mining industry are closely tied up with the electricity industry's taking a great and growing share of the coal produced. I hope that my hon. Friend will answer the question of how we can say that the Government do not influence this when no coal-fired stations are planned beyond Drax. It does not matter what is produced, if the 2031 main market is taken away it is the end for the coal industry.
§ Mr. Freeson
I shall be coming to this point as I proceed. I have jotted down references to the A.G.R. programmes which were made by various hon. Members, including my hon. Friends the Members for Midlothian (Mr. Eadie) and Ince (Mr. McGuire) and my right hon. Friend the Member for Caerphilly (Mr. Ness Edwards).
First, with reference to the criticisms levelled outside the House and in the debate about the A.G.R. programme, one needs to say that, whatever views there may be about the programme or the history of nuclear power in this country, it will have no effect on the future of the coal industry in the transitional period between now and the early 1970s. In this respect one agrees with the hon. Member for Barkston Ash. This is the situation with which we have recently been concerned in Questions and Answers in the House and in debate in the House and elsewhere.
§ Mr. Eadie
I am obliged to my hon. Friend for giving way; he is showing tremendous patience. Surely he must agree that it is not irrelevant for the Government—the Government decided this policy—that more than £500 million in addition to what could have been the cost of conventional coal-fired stations was spent on nuclear power? We cannot sweep this under the carpet.
§ Mr. Freeson
I have no intention of sweeping anything under the carpet. There is a misunderstanding here. I was referring to criticisms of the A.G.R. programme, of which we have seen a great deal over the last few months. Whether they are right or wrong, they do not affect what happens to the coal industry between now and the time when the stations are built. This is the critical period for the coal industry. This has been the burden of the debate. It is about time that we made the point clear and argued it as a separate issue but not in reference to what is to happen to the industry over the next four or five years. In fact, I think that 1975 would be a year in which it would have no relevance to coal consumption.
I was asked a few moments ago what the Government were doing about ex- 2032 panding coal consumption for electricity generation. It was suggested that we were not doing enough and in some circumstances it was suggested that we were not doing anything. But about 20,000 megawatts of conventional power station construction is under way now—that is, for coal burning—compared with 8,000 megawatts in the nuclear programme. The figures speak for themselves. The constant reiteration that everything is being put into the one basket of the A.G.R. programme at the expense of coal burning is not in line with the facts. There is under way at this moment 20,000 megawatts of conventional power station construction.
References were made to natural gas consumption and the fact that this would be harmful to the coal industry if brought into use in power stations. Two points need to be made. First, the conversion at Hams Hall is an experimental project to acquire technical experience in converting to natural gas consumption at power stations. Secondly, in so far as natural gas is absorbed into power stations and into industry generally in this bulk fashion it will essentially compete with oil and not coal. Obviously there will be some repercussions right down through the economy, but in so far as there is direct influence on public industries it will be in competition with oil rather than coal.
A point to be borne in mind about natural gas in relation to coal is that the 1,500 million cubic feet out of the 2,000 million cubic feet expected to be coming on shore by 1970 or soon after will replace traditional or conventional gas supplies—town's gas—and the competitive problem of further absorption will be the 25 per cent. Remainder—500 million cubic feet—which will also be available on shore by that time and will need to be absorbed into the system. I do not want to pursue the point in detail. The rate of absorption is of direct relevance to the gas price negotiations which are still in train.
There were various references, naturally enough, to the assistance being given to the industry for the elderly and disabled. The Minister has indicated in his statement what the general desire and intention of the Government will be. The proposals have yet to be worked out in detail and they will be presented to the 2033 House in the White Paper. I was intrigued by the suggestion of the hon. Member for Yeovil (Mr. Peyton), who is not here now. He made a very un-conservative suggestion of splitting the industry, as it were, down the middle, keeping the prosperous parts under the N.C.B. and putting the wasteful or unprofitable parts under a Government Department such as the Board of Trade and the Government would run that part as an unprofitable undertaking. It is an interesting idea, and it would be more interesting at some future date to hear the hon. Member expand on his untypical proposal.
On the question of assistance for the elderly and disabled and retraining, an approximate estimate has been made—and at this stage it can only be an approximate estimate—that with the pushing up of coal-burn by another 6 million tons per year, there will be additional expenditure or assistance to the coal industry amounting to as much as £40 million or £50 million over the next three or four years. We have to see how this will work out in detail, but it is the kind of picture which is presenting itself at the present time. These figures should be borne in mind.
The essential point is to give assistance during a holding operation in order to assist the transition in the industry and thereby to assist morale and to make it clear that we see a future for the coal industry—a properly reshaped and modern industry—playing an important part in the economy. This to us is the best way of keeping up morale in the industry.
If there is a realistic and confident approach to the future of the industry it can take its place as part of the four fuel economy in the years to come. We will not assist morale in the industry by pretending that the situation is other than what it is going to be. We have to face realities and organise the industry as best we can in the face of these. That is the way to build up and maintain morale. There is no doubt there should be a proper future for the industry.
Some references were made to the effect on the railways. My hon. Friend the Member for Midlothian asked whether there had been consultations with the British Railways Board. I can assure 2034 him that there has been such consultation. Sir Stanley Raymond, the Chairman of the Railways Board, has attended a meeting of the Minister's Energy Advisory Council and the Railways Board and the Coal Board are maintaining close contact over estimates of future traffic flows.
§ Mr. Alison
While the hon. Gentleman is on the question of future morale, will he agree that morale will be most firmly based by being put on the basis of the possibility of a new coal industry, reducing prices, becoming more competitive and exporting more?
§ Mr. Freeson
Clearly that is the objective of the industry and there is no need for any Minister to say that it is. The industry has a first-class record in this respect. The Board has no need for any shame. It has a fine record, as has every other publicly-owned industry, in increasing productivity. It is unfortunate that a good deal of the efforts of reorganisation and modernisation in the industry will be made more difficult because the final stages of this process are clashing with a new situation developing in the fuel economy.
It is with this problem of transition, with the advent of natural gas and the prospects of nuclear power, that we must concern ourselves. But the industry's record of productivity and modernisation is good. It is the objective of the Board, and of the Government, to increase productivity and capacity and to sell competitively in the home markets and also abroad if that is possible.
One must not talk about exports too glibly. As my right hon. Friend said, the situation we are facing in Britain is also being faced by the other countries of Western Europe. But it is to Western Europe, obviously, that our main export effort has to be directed. It will not be an easy proposition, since the countries of Western Europe have similar problems to ours concerning the sale of coal. However, it is a prospect which must be followed up.
I have tried to deal with the main themes of the debate, and I do not wish to delay the House any longer. It is very late. We have had an excellent debate, and the Government will study the record with great care, bearing in mind what 2035 has been said in preparing the White Paper for October.
§ Question put and agreed to.
That the Coal Industry (Borrowing Powers) Order 1967, a draft of which was laid before this House on 26th June, be approved.