§ Order for Second Reading read.
§ Mr. Speaker
Before I call the right hon. Gentleman to open the debate I should inform the House that I have already over 30 names of Members—including Members for practically all the mining constituencies, and hon. Members who devote themselves to fuel and power policy—who seek to take part in the debate. I shall not be able to call them all, but I can call a goodly number if hon. Members will speak briefly.
§ 3.41 p.m.
§ The Minister of Fuel and Power (Mr. Richard Marsh)
I beg to move, That the Bill be now read a Second time.
In the light of what you have said, Mr. Speaker, I shall endeavour to keep my speech as brief as possible. I must apologise in advance for the fact that it is bound to be rather lengthy, in that this is a very big subject. A borrowing powers Bill of this size is always a Parliamentary occasion. The nationalised industries have an enormous impact upon the economy as a whole and are very big employers of labour, but, coming at this time, it is fair to say that the Bill has a greater significance than any of its predecessors.
The Bill is the direct result of the White Paper published a fortnight ago. It is the price—and a very large price indeed—which the community will have to pay to minimise the massive problems which stein from the decision to accept change in practice as well as in theory.
So much has been said about devaluation and the economic situation that it would strain the patience of the House, not to mention your own, Mr. Speaker, if I said very much on this topic, but this debate is a stark confrontation with the British problem. As a nation we spend about £3,500 million a year on fuel. If we have an expensive fuel policy this must make it more difficult for us to compete with other nations whose fuel costs are lower than our own. We have solved no problems at all by devaluing the £. We have bought an opportunity which, properly exploited, could be one of the most beneficial decisions in recent 246 years. If we fail to grasp it—if we try to avoid or delay the massive changes which most of us in our hearts know need to be made—future generations will pay a very heavy price.
My reason for mentioning this is that in my view Government policy for the fuel sector is crucial to the health of the British economy. One of the criticisms that is sometimes levelled against the White Paper is that it slavishly follows the market trends. This is precisely what it does not do. The measures outlined in the Bill are a deliberate distortion of the market trend to give coal the breathing space it needs to improve its competitive position, but there are real limits to the degree of distortion which is desirable or even possible in the society in which we live.
Our present power station pattern exists. Much of general industry has already moved away from coal-burning plant. There is no way that I know of of forcing people to rip out existing plant and replace it with plant which will burn a fuel that they do not want. Most things are possible in theory, but a major change in the pattern outlined in the White Paper, certainly by 1970—even if it were possible of achievement—could be obtained only by massive protection, higher resource costs, a wasteful use of manpower and capital, massive Government subsidies or, alternatively, higher energy costs on a scale which would destroy the competitive position of our exporting industries.
The discovery of natural gas, and the developments in nuclear power are among the most significant things to have happened to Britain this century, and no one on either side of the House would suggest that we should fail to take advantage of these new additions to our resources. The fact is that the energy economy is changing faster than almost any other part of the national economy. We have already moved from an almost wholly coal-based economy to one where oil has taken up a major share. But one of the problems that is frequently missed arises from the fact that over 40 per cent. of current oil demand is a direct result of the increase in non-fuel uses for oil—a dramatic example of which I recently faced.
In 1956, at the time of the other Suez crisis, there were 4 million cars on our 247 roads. To-day, there are over 12 million. That increase in transport demand alone brings with it an inevitable and inelastic demand for oil imports. To-day, oil is used for a whole range of other processes that were unknown in the relatively recent past, such as synthetic fibres, rubbers, detergents, paints, fertilisers and weed killers, to give but a selection. I raise this because it is bound to come up in the course of any debate involved with the British energy industry, and this debate is about coal.
In the coal-mining industry it is not always realised that there has been a continual technological advance and increased productivity on a scale which would be the envy of most other sections of British industry. This has brought us to highly mechanised production with big advances in productivity and safer working conditions. No one can argue that it is socially desirable to keep men working in the sort of conditions which generations have endured in some of the worst of the older pits.
The coal-mining industry of the future will be smaller, but it will still be very large. It will be highly mechanised, safer, and will provide a career in a highly modern and technologically advanced industry.
§ Mr. Alex Eadie (Midlothian) rose—
§ Mr. Eadie
My right hon. Friend was trying, first, to develop the argument that we are discussing the question of costs. Then he turned to the argument about people working underground. Does he agree that the argument in his White Paper is about cost and is not concerned with trying to do the miners a favour by bringing them from underground to the surface?
§ Mr. Marsh
I recognise the strong feelings of my hon. Friends, which are shared by others involved in this very difficult subject.
I want to return to the purpose of the Bill. It is concerned with the meeting by the community of the social consequences of the rundown in the coal-mining industry, and neither my hon. 248 Friend nor the National Union of Mineworkers—nor any other section of the industry—would disagree that the pits which are being closed are, in many cases, the sort of pits which no Member in the House would send his children down if he had a choice. There is no dispute between us—[Interruption]
§ Mr. Marsh
I want to deal with the question of alternative employment and the question of meeting the social costs of the problem which exists. If my hon. Friends will allow me to continue the debate they may find that there is little between us in terms of the basic fundamentals of this problem. Change involves not just figures, but the effects of developments upon people. That is why the Bill and the White Paper are inextricably linked. The Bill is designed to meet, in part, the cost to the community which the community should rightly bear in respect of some of the human problems incurred by ordinary people as the result of these changes.
If my hon. Friends will allow me to continue with this part of my argument I think that they will find that we are not in disagreement. It is essential that the House should face the true size of the problem. If it does not we shall do a grave disservice to the very people that we all want to help. The measures produced to meet the social problem are bound to be directly linked to the estimates of the size of the problem.
There can be legitimate arguments about many aspects of fuel policy—this is provided for in the White Paper, which says clearly that "there will be a rolling review in the light of changing circumstances "—but any attempt to underestimate either the inevitability or the speed of the changes taking place will certainly ensure that, at the end of the day, inadequate provision is made for those most affected.
What worries miners is not the closure of uneconomic and frequently unhealthy pits. The National Union of Mineworkers is one of the most realistic unions with which I have ever dealt. It has seen the industry contracting for a decade without a trace of the Luddite mentality which sometimes exists elsewhere. The 249 miners are concerned that steps should be taken to meet the social effects of a contraction which many of them know to be inevitable. The Government are now engaged in the intensification of regional policies on a scale never previously attempted.
I believe that these new policies will be successful, but miners and some of my hon. Friends are, of course, suspicious of them, because the social measures of the past have always been designed to meet a level of coal production and demand which has always been grossly overoptimistic and which has, consequently, always underestimated the size of the social problem.
If I may make a party point in passing, it is quite incredible and almost unforgivable that, in a field in which we spend £3,500 million a year and employ over 800,000 men, no attempt was ever made to establish the trends in the fuel industries until this Government came in—
§ Sir G. Nabarro
Really, the Minister's statement is born of total ignorance. The right hon. Member for Derby, South (Mr. Philip Noel-Baker) set up in 1951 the Ridley Committee, whose Report was published in the days of the Tory Government in 1952 and largely implemented in the ensuing five years in the interests of the mining industry and with a record investment in those days.
§ Mr. Marsh
And the Ridley Committee over-estimated actual demands—I am speaking from memory—by about 42 million tons.
The point which I am making—I am trying to make an uncontroversial speech, without success—is that one has to look at the two sides, the trends and the events which are happening and how we measure up to the rightful demands upon the rest of the community by those men in the industry.
What are the pressures which produced the situation which justifies the Bill? Natural gas and nuclear power have been 250 making the headlines, but the streamlining and mechanisation of coal production has received far too little attention. With the progressive introduction of even more advanced mining techniques and remote control, there is a great potential for a striking further improvement in the industry's productivity.
However, coal remains, alone of the fuel industries, a labour-intensive industry and the advance of productivity has not so far been sufficient to offset rising costs. In the past, the main challenge has been from oil and, despite the protection afforded to coal, the use of oil has grown rapidly. Between 1957 and 1966, it grew from 15 per cent. to 37.5 per cent. of total requirements. On the White Paper trends, it will rise by only 1.5 per cent. between now and 1975.
Moreover, with the growth of refining capacity, the rate of expansion in oil use and the changing proportions of the various oil products, the net import of fuel oil which is already falling should turn into a net export and the net imports of motor spirit and naphtha should decline to relatively small amounts.
The real problem which we face is that no industrialised country can avoid a very heavy oil use and oil as a proportion of total energy supplies in the Government plan compares very favourably with most other nations. About 40 per cent. of our energy sector is supplied by oil; for Germany the figure is 42 per cent.; for France, 46 per cent.; for Italy, 61.5 per cent.; for Japan, 60 per cent.; the average for the E.E.C., 48 per cent. So the effect of the measures which we are taking in the Bill is to contain the growth of imported fuel and we can achieve this because of a future which provides not only indigenous coal but indigenous natural gas and nuclear power with very low foreign exchange costs.
Many factors must be taken into account here. Energy supplies must be adequate and reasonably secure and, subject to that, as cheap as possible—not just in price but in resources. We have to be concerned with the human as well as with the economic and balance of payments consequences of changes in the fuel industry.
On the first point, there is ample fuel available to us. It is a question not of whether our needs can be met, but of 251 how best we can supply them. On security, there is a growing surplus of oil and steady diversification of world sources. Add this to North Sea gas and nuclear power, which are under our own control, and the pattern clearly meets the need for security and supply.
Cheaper fuel is essential if this country is to compete in world markets. The effect on the balance of payments of our industries' ability to operate with lower fuel costs is to often overlooked. It must be understood that high fuel costs in Britain, even if provided by indigenous fuels, can present us with a net balance of payments loss if our industry cannot compete in overseas markets with competitors who have access to cheaper fuels. All fuels except coal have some foreign exchange costs. In the case of nuclear power and natural gas, these costs are lower than for oil, and, to the extent that these fuels take up markets which would otherwise be supplied by oil, the balance of payments benefits directly.
Thus, the purpose of this review and of these great arguments is to cheapen our energy costs and so improve the competitive strength of British industry to keep down the cost of living. It enables us to lessen the risk of becoming over-dependent on foreign sources for our energy imports and helps the balance of payments.
There are some recent developments, and I am examining the effect of devaluation. We should pay tribute to the National Coal Board for the speed with which it reacted to the news of devaluation in seeking alternative markets on the Continent. Devaluation will have some effect on coal, mainly in exports, but, in relation to oil, the pattern of demand will not be more than marginally affected.
Sometimes it is said that the Government should freeze the level of coal production now and that, by the 1970s, the industry would be able to supply a market approaching its present level. No one would be more delighted than I if the coal industry could improve on the White Paper estimates—it is said clearly in the White Paper that these are not final production targets.
In the short term, when the problem is greatest, the only measure which I 252 can find is the one which we are proposing in the Bill—to make special provision to use more coal in power stations and gas works. With this extra help, coal demand in 1970 might be about 155 million tons, compared with total sales this year of 166 million tons. That will mean an average fall of less than 4 million tons a year in coal consumption compared with 10 million tons in each of the last two years. Taking the period from 1967 to 1975, the average rate of fall will, by our estimates, be about 5 million tons a year.
The effect, then, of the Bill is to halve the rate of contraction in the industry, but the scope for manoeuvre is very limited. It is best shown by our calculation that doubling the fuel oil tax would burn an extra 4 million tons in markets other than power stations at a cost to industry of about £90 million—
§ Mr. Richard Kelley (Don Valley)
My right hon. Friend is probably making the speech which he should have made yesterday if the Leader of the House had not altered the business for yesterday and withdrawn the White Paper. He is speaking to a Bill which has nothing to do with the matters which he is raising.
§ Mr. Marsh
I want to get this point clear. We are putting to the House a bill for £130 million, a large proportion of which will be devoted precisely to the measures to which I am referring. We cannot justify the £130 million unless we are able to demonstrate what it is being spent on, and it is this which we are debating—the bill for this pattern of events.
What options are open to us—[Interruption.] I am talking about the additional coalburn which we are asking Parliament to pay for, not the industries concerned. I am seeking to argue that it is right that we should authorise this extra money because we cannot get this coalburn otherwise. But we cannot separate the bill from the coalburn, because that is what we are paying for.
What options are open to us other than the additional coalburn in the Bill? Holding back nuclear power would have no effect before the mid-1970s. Holding back natural gas would lead to a greater use of oil. It is the effect on the men who work in the industry and on those in 253 the mining communities about which we all feel special concern. Alarming figures have been headlined in the last week or two. Let me repeat once more: no one knows what the position will be in 1980. The purpose of the Bill is to enable the coal-mining industry to have a breathing space to maximise the very high rate of productivity increase which has been achieved in recent years.
Mining manpower has already fallen by an average of 30,000 a year over the last 10 years. It has been as high as 51,000 a year. Both the past and future reductions are much more the result of growing efficiency through mechanisation and concentration of output on the economic collieries than of falling coal demand. More machines mean fewer miners even for the same output. If coal production remained unchanged from now until 1970, we should still need 100,000 miners fewer than we had in 1966.
§ Mr. Marsh
I am not arguing with my right hon. Friend; I am agreeing with him.
it is not, therefore, primarily because coal demand is falling that the number of miners will decrease. Whether we get increased productivity or fail to compete, the labour force is bound to decline and it is essential that productivity should continue to rise. Unless we face this, no adequate preparation to meet the social problem will be made. We shall need a great deal of coal throughout the 1970s. If efficiency is not raised and the cost brought down to the extent which we all hope, the loss of markets will inevitably be even faster than we anticipate.
The first priority is to ensure that the rundown takes place in a controlled manner and that we avoid hardship for those on whom it will have the most severe effect. The fact that manpower will fall by 35,000 a year does not mean that there will be 35,000 redundant miners each year. Last year, natural wastage i n the industry through age, death and sickness was about 20,000. It will continue at about the same level for some years. Last year, 35,000 men left the industry of their own accord to go to other jobs.
254 This does not mean that I am insensitive to the point that to every unemployed man unemployment is 100 per cent. It is very easy for people to believe sometimes that Ministers are completely tin-aware of the social consequences with which they are involved. This is not always the easiest job to have. To put the matter in its proper context, in 1963–64 the total number of redundancies was 3,943; in 1964–65, 2,463; in 1965–66, 1,885; and in 1966–67, 3,494. I do not under-estimate the size of the problem for the people involved. What I am saying is that it is a problem which the House can meet and for which it can take measures.
My right hon. Friend the President of the Board of Trade has announced new measures and extra inducements to bring work to the areas which will be most affected by pit closures. We will introduce a new system whereby closures will be discussed in advance with the regional economic chairman to enable the possible rephasing of closure lists to meet the local problems, and it will give time for the Chairman to make representations in advance to the various Government Departments concerned.
Our other proposals for helping the coal industry and those who work in it are in the Bill. The provisions which I think are of greatest interest to the House are those designed to moderate the rate of contraction of the industry in the next few years and to give further help towards social costs and, therefore, provision for the older miners who are displaced when the pits close. I propose to deal with these measures in the order in which they are presented in Clauses 2 to 6.
Clause 2 provides for an increase in the Government's contribution to expenditure incurred by the Board to help the redeployment of its manpower force caused by the closing of uneconomic pits and the concentration on a smaller number of more productive pits. Hon. Members know that the Coal Act, 1965, set a limit of £30 million to the grants which the Exchequer can make in the five years 1966–67 to 1970–71—my hon. Friends had criticisms to make about these levels—towards the cost of expenditure incurred by the Board in respect of redundancy payments, loss of superannuation, removal and resettlement expenses, and so on. The 1965 Act also limited the 255 amount payable each year by the Exchequer to half the Board's expenditure in excess of £3.8 million, another point which has been frequently criticised by the unions and by some of my hon. Friends.
The Bill will increase the total limit of Exchequer grants to £45 million for the four years 1967–68 to 1970–71 and will authorise the Government to pay two-thirds of the Board's total expenditure in any year. The total Exchequer contribution is, therefore, increased from £30 million for five years to £45 million for four years.
I announced in the debate on 18th July that the Government were preparing a scheme to tackle the special problems of the older men who will be leaving the coal industry. They are a very special problem indeed. The man of over 55 who has worked in a mine all his working life is probably in a different position, because he started work and spent a large proportion of his early days in a very different coal-mining industry from that which we know today. Anyone who has experience of or who has seen the position of many people in the older mining districts knows that in this industry, as distinct from almost any other industry, the older miner is a very special problem.
Clause 3 defines the scope of the scheme in general terms and provides for making it in detail by Statutory Instrument. Mineworkers of 55 and over who are made redundant as a result of the closure of pits between the date of my original announcement and March, 1971, will have their income supplemented to give them something like 90 per cent. of their previous take-home pay for three years or until the age of 65 if sooner. This will not solve the problem for these people. It is intended to give them an opportunity and to soften the blow.
§ Mr. Eric Ogden (Liverpool, West Derby)
Would my right hon. Friend give an assurance that the benefits of the Clause, when they become available, will be available to staff grades, clerical workers and supervisory grades on at least as generous terms as they will be available to underground, face and piece workers?
§ Mr. Marsh
I am looking at this problem in the light of the regulations. There is a difficulty. The workers to whom my hon. Friend referred have very different benefits in their own pension schemes which one would want to look at more closely.
Mineworkers who benefit under the scheme will also receive, under Clause 4, their mineworkers' pension at the end of the three-year period without waiting to reach the normal pension age of 65. The Exchequer will bear the whole cost of this scheme and of the earlier pensions to all those benefiting under it. The total cost of these benefits up to March, 1971, is estimated at £35 million. The House will have an opportunity of considering and debating the scheme in detail when the draft regulations come before it.
§ Mr. Thomas Swain (Derbyshire, North-East)
Before the Minister leaves that point—after explaining the benefits to a man of 55 to 58—does he seriously intend, as a Minister in a Labour Government, to throw a man on to the State as a burden at 55 years of age?
§ Mr. Marsh
I really would ask my hon. Friend to assume that we all recognise the seriousness of this problem. These men had been thrown on the scrap-heap at 55 until this Bill was brought before the House. The intention in the future is not that they shall be thrown on the scrapheap. It is the genuine intention of the Government to try to assist a group of people who hitherto have not been assisted in this way.
§ Mr. J. T. Price (Westhoughton)
I put it seriously to the Minister that this is a sheer economic loss to the nation, if these men at 55 years of age, who are often very fit and very strong, are to be making no contribution whatever to the national economy. Have the economic losses been taken into account in making these erudite conclusions included in the fuel and power policy report?
§ Mr. Marsh
Perhaps, having asked the question, my hon. Friend will do me the courtesy of listening to the answer.
257 This industry has been contracting for ten years. A large number of men employed in it are over 55, and hitherto they have gone out with their normal notice and nothing more. This is a genuine attempt, which I would have thought would have been welcomed by most Members on this side of the House, to do what we can to assist in this problem. If they can find jobs, and can be assisted to find jobs, obviously this is a better solution than having a man living on this sort of income. These measures will provide direct benefit for mineworkers affected by colliery closures.
I return now to the provisions of the Bill.
§ Mr. James Griffiths (Llanelly)
This is a very important matter. I gather that it is to be the subject of regulations. Presumably the regulations will only incorporate this scheme? May I ask whether, in the meantime, the Government will consider whether this is the best method of tackling this problem, and if it might not be better to give consideration to a pension retirement age of 60 for miners?
§ Mr. Marsh
I would willingly discuss this point with my right hon. Friend. Retiring men at 60 still leaves—I may be wrong, I seem to be alone in this—a problem. It is my belief that the redundant coal miner of 55 is in very real difficulties in finding another job because of the state of his health. He is not mobile like the younger man, and even he has a lot of difficulties. This is another point, and certainly one that we can look at.
I turn now to the provisions of the Bill which are designed to control the rate of contraction in the coal industry. Clause 5 stems from the Government's request to the Coal Board to postpone all the colliery closures due to take place in the three months October to December of this year, but there may also be deferment of some of the closures which the Board needs to make during the three months January to March, 1968.
These arrangements will result in the Board incurring losses due to the continued operation of the colleries affected. We propose to compensate the Board for these losses up to a limit of £5 million which may be increased to £8 million 258 by Order and subject to affirmative Resolution. The deferment of the closures of these collieries is a short-term measure to relieve the unemployment situation this winter. For the future, there will be liaison between the Government, the N.C.B., and the chairmen of the regional economic planning councils on closures affecting their regions.
Within the financial limits I have mentioned, the Bill will enable compensation to be paid to the Board in respect of losses incurred by the Board up to March, 1971, arising from keeping any such pits open.
Clause 6 gives effect to the measures which I dealt with in the House on 18th July, to increase consumption of coal by the electricity and gas industry in the period to March, 1971. The object of this provision is to try to hold demand for coal by 1970 at around 155 million tons. As I have so frequently said, this is not a policy to run down the industry. The House is being asked to approve a Bill which involves very heavy sums, indeed to prevent it running down as rapidly as it would otherwise do.
The object of this particular provision in Clause 6 is to hold the industry at around 155 million tons in 1970, to contain the rundown of colliery manpower within limits which the Board regard as manageable. It is clearly better that coal production should be used rather than put to stock, but the cost of using coal in place of cheaper fuels must be met. It would be unreasonable for the burden to fall solely on the consumers of electricity and gas, and the Bill provides that the cost should be met out of public funds within a limit of £45 million.
The C.E.G.B. and the Scottish Electricity Board have already increased their consumption of coal, on the understanding that Parliament will be asked to authorise the additional cost of using the extra coal to be refunded from the Exchequer. I expect that the electricity and gas industries will be able together to use about 6 million tons more per annum if this should prove necessary, and rather higher quantities may be possible.
The amount of additional coal used and its cost will depend on the trends of coal supply and demand, and this will be kept very much under review. The 259 Bill provides that the payment shall be determined in a manner agreed between the appropriate Minister and the consumer board with, as always, the approval of the Treasury.
Clauses 2 to 6 of the Bill all involve payments from the Exchequer out of moneys provided by Parliament. Clause 1, on the other hand, is concerned with borrowings by the Coal Board and it provides for an increase in the limit of the Board's borrowings to £900 million, which may be increased to £950 million by Order subject to affirmative Resolution. The upper limit of £950 million is calculated to meet the Board's borrowing requirements up to March, 1971, and the way in which the total is made up is set out in the White Paper.
Hon. Members will recall that the limits on borrowings as fixed by the 1965 Act were expected to last until 1971. The reasons for the increase in borrowing requirements were given in the House when we debated the Coal Industry (Borrowing Powers) Order, 1967, before the Summer Recess.
Essentially, the need for the increased borrowing arises from two main causes. In 1965, the Board envisaged that coal stocks, then about 20 million tons, would be run down to 10 million tons by the end of 1970, and thereby release around £50 million of working capital. Stocks have increased to about 28 million tons and, despite the measures we have taken to increase coal consumption, we need to make provision for a possible further increase in coal stocks.
The Board has already had to borrow large amounts to finance the increase in stocks and further funds will be needed for this purpose. Therefore, instead of releasing £50 million it is estimated that, including the sums already borrowed, an additional £60 million may need to be tied up in stocks for some years. This represents an increase of £110 million in borrowing requirements as foreseen in 1965.
The other main change from the 1965 Estimates is that it was then assumed that the Board would be able to set aside £10 million a year towards meeting the difference between depreciation of assets at historic and replacement costs. It is now estimated that over the five-year period, the Board will need to borrow £110 mil 260 lion to supplement internal resources, mainly depreciation, available for capital investment of all kinds.
§ Sir Spencer Summers (Aylesbury)
The Minister is talking about the need for further finance for increased stocks. Why are these increased stocks necessary?
§ Mr. Marsh
Because at present the stocks are building up. We have decided that this is the right rundown figure—155 million tons. It is arrived at on the basis that this is the maximum rate of rundown consistent with managing the social and economic problems. This is why we subsidise the production of coal up to the amount of 155 million tons. To allow it to take the market trend and to allow coal stocks to be mopped up in that way would produce a situation which, in my view, would be socially unacceptable and would provide the country with a serious coal crisis in the bargain.
The remaining provision, Clause 7, will enable me to appoint additional full-time members to the N.C.B.—[HON. MEMBERS: "Oh."] I am not surprised that this may sound strange when referring to a contracting industry, but I shall now seek to convert my hon. Friends. The reason for this provision is because I believe that the present situation in the industry will produce acute managerial problems in certain regions. One of the problems which we must tackle is how best to project into the regions and, from the regions to the N.C.B., the local problems of these areas. The intention is that these people will sit on the N.C.B. representing specific regions of the country so that the problems of those regions will have direct representation on the N.C.B. itself.
§ Mr. Marsh
It would be impossible to deny it; but London will not. Probably all hon. Members recognise that 261 there is an argument here for trying to have this degree of direct regional contact.
The total estimated cost to the Exchequer of the financial measures included in Clauses 2 to 6 to assist the coal industry in the period up to March, 1971, is £133 million. At any time the amounts in the Bill would be very large sums indeed. In the present circumstances everyone will agree that, whatever may be the arguments about the policy, we are spending a vast amount of public money in an effort to minimise the hardship caused by the changes which are taking place.
One can argue about the speed of change, but the change itself is inevitable. One can also argue about the size of the bill, but men in this sort of situation are entitled to expect us to make a contribution. These measures are not the charitable dispensation of a benevolent Parliament, but are designed to assist men who find, through no fault of their own, their industry and social environment changing with terrifying speed.
As I said at the outset, it is the essence of the British problem. It produces harsh problems which can be solved only if they are faced but which are made much worse if they are avoided. To talk of the present position as the death-knell of the industry is sheer nonsense. Coal-fired power stations exist and others are being built. This is evidence that there will be a big demand for coal for many years to come.
Of course, there are problems arising from this situation. Of course, there is a responsibility on this House to do what we can to meet those problems. But I am in no doubt at all that if we tell these men the truth and persuade society to meet the social consequences, the coal industry can enter the 'seventies in a sound position to play its part in future.
§ 4.24 p.m.
§ Mrs. Margaret Thatcher (Finchley)
The Minister has certainly given the House an excellent account of the problems as he sees them, of the coal industry and of cheap fuel. I agreed with him particularly when he said that the nation cannot afford a fuel policy which puts us at a disadvantage with our competitors. Naturally, any fuel policy cannot be acceptable unless it takes into account the interests of those who buy 262 coal and other fuel, as well as those who produce them.
I took issue with the right hon Gentleman when he said that his was the first attempt to have a look at the fuel trends, including the coal industry, in the economy. In fact, it seems that from the beginning of the National Coal Board, if not before, there have been attempts to try to determine the trends of coal and fuel consumption.
§ Mrs. Thatcher
Yes, and ever since the Labour Government have been presenting White Papers on fuel we have had trouble. Indeed, the trouble began when they started presenting those documents. Before that, we seemed to have people presenting documents who were in a better position to do so. Once the Government started to co-ordinate all the estimates of all the nationalised fuel industries the Minister found himself in trouble, and he has been in trouble ever since.
The fact of the matter is that the Bill is a means of accomplishing the plan for coal set out in the White Paper and in previous speeches of the Minister. To debate the Bill without referring to the conditions for coal mentioned in the White Paper would be like debating the ghost without Hamlet. As in every previous debate on coal-borrowing powers and finance for coal, we must obviously refer to the conditions laid down in the White Paper.
The problem with most plans has been that they have concentrated on extrapolating existing trends and often they have not spotted changes in trends. It is the change in those trends that always causes economic difficulties. This has been particularly so in the case of the coal industry. The 1950 plan for coal estimated that the total demand for coal in 1961 to 1965 would be 240 million tons a year. In fact, it fluctuated between 190 million and 197 million tons during those years. In 1956 the N.C.B. document "Investing in Coal" announcedThe Board have come to the conclusion that output of…250 million tons a year cannot be attained before 1970.263 Thus, the whole effort during the early years was to get more and more coal because it was about the only source of fuel we had. The whole effort of the N.C.B. and the Government was designed to assist the further and greater production of coal.
This is the context in which the nuclear power programme was first considered. Hon. Members who have studied previous debates on coal and other fuel—and there have been many; hon. Members have obviously been studying them because it is practically impossible to obtain some of the relevant volumes of HANSARD from the Library—will have seen that the whole emphasis was on the conservation of coal and on economy in its use. Against that background we had the 1955 and 1957 White Papers on Nuclear Energy. In a debate on nuclear power and oil supplies, when discussing one of those White Papers, the then Mr. Robens said:The programme for nuclear energy indicated by the Government is wholly approved by us on this side of the Committee. We would agree with the right hon. Gentleman and the Government that the nuclear energy programme should be the greatest for which resources are available."—[OFFICIAL REPORT, 30th April, 1957; Vol. 569, c. 61.]
§ Mr. Swain
I trust that the hon. Lady is not forgetting that, at that time, the forecasts made by the then Tory Government and the N.C.B. were based on the fact that it appeared, certainly in the long-term, that it would be impossible to produce enough coal in this country with the pits and men available to satisfy our energy needs. That is why we had to launch out with a nuclear programme.
§ Mrs. Thatcher
That has been the burden of my speech so far. I am sorry that the hon. Gentleman has been asleep through it.
§ Mrs. Thatcher
I can only reply, "Touché".
To return to the debate, following that pleasant interlude, the first drop in sales of coal started in 1957 and went on through 1958 and 1959. However, that was thought to be due to, perhaps, the mild winter of 1957, or the economic situation as it then was. It was not 264 spotted as being a basic difference or change in trends until 1959, when we had the revised plan for coal. From that time on we got stuck on a target of about 200 million tons a year.
The 1959 plan was for 200 to 250 million tons of coal in 1965—still too high for what turned out to be the case—but from the period 1961–62 the Coal Board reports, and particularly hon. Gentlemen then sitting on this side, pinned their entire faith, and continued to pin their entire faith, to a target of 200 million tons of coal per year. I agree with the right hon. Gentleman that this may have blinded them to the market trends that were taking place, and to the increasing competition from other fuels.
Then, in 1965, came the first of the Government White Papers. But just before that, the right hon. Gentleman's predecessor said in a Written Answer about the 200-million-ton target:…there is no question of the Government…requiring a reduction in this."—[OFFICIAL REPORT, 9th February, 1965; Vol. 706, c. 51.]So, even as recently as two years ago, the whole industry was still pinning its faith to that basis and, presumably, so were hon. Gentlemen representing mining constituencies.
Came the 1965 White Paper, just a few months after that Written Answer and, suddenly, there is a drop of 20 million or 30 million tons a year in the estimate. Comes the 1967 White Paper and there is another drop, making a total of 45 million tons, to a target of 155 million tons. Of course, there would then be considerable dislocation in the industry, and I agree with the Minister that it might have been better if one had not pinned such tremendous faith to the 200 million tons a year target. But now the tendencies may have gone the other way. Where, before, one was extrapolating an upward trend and getting the wrong answer, one now appears to be extrapolating a downward trend, but possibly going too far down in the future.
It may be that the right hon. Gentleman takes the view that every forward estimate since 1959 has been too large for what actually was produced, and is, therefore, now attempting to get a thoroughly realistic target so that the eventual production and the target will not be very different—
§ Mr. Eric Lubbock (Orpington)
Is the hon. Lady aware that in the United States it is the fashion to develop forecasts for far more years ahead than we do here; and that even though they cannot be expected to be entirely accurate, they are a very useful guide to industry and to all those working in the fuel manufacturing industries?
§ Mrs. Thatcher
Right now, I have enough problems on my plate here without discussing the United States. I am aware that the United States has cheaper fuel at the moment than we have, but not all its forecasts are correct. When I was in America in March last it was struggling with a change in economic plans. I: is always so. It does not matter where the economic forecast occurs, the point at which one gets a change of trend is difficult to spot until after it has occurred, and it is very difficult to formulate a policy to meet that event. The future policy is undoubtedly to plan for a contracting coal industry.
Looking back into the reports, this is not a new feature. It has been obvious during the last two or three years that this has been happening for some time. It has been said that there must be concentration on profitable pits. It is, perhaps, unfortunate that those pits are situated in areas of high employment, and that the more unprofitable pits are to be found in the more difficult areas where unemployment is high—or that is so to a very considerable extent. There are obviously certain pits which are exceptions to the general rule, but the colleries that have produced a profit tend to be in areas where employment is high.
§ Mr. Edwin Wainwright (Dearne Valley)
I am grateful to the hon. Lady. She is partly correct, but she must take into account the very large pockets throughout the industry where that is not so. In my area, surrounded by seven collieries, is one district with only 1.3 per cent. unemployment.
§ Mrs. Thatcher
One of the good things about the position is that those pockets alleviate the general problem, because it means that people can go from an unprofitable pit to one that is profitable but, presumably, the more one contracts the industry the less that becomes possible because there are fewer jobs available in those pockets. I am glad to see hon. 266 Members opposite nodding their assent, so I would seem to be correct in saying that.
The trend in debates has been that the continuance of the uneconomic pits tends to threaten the future of coal as a fuel, looking at it as a whole. So one is faced with an inherent dilemma. If one cuts out the uneconomic pits, and also increases productivity—which even the right hon. Gentleman admits causes problems of manpower—one reduces the number of men employed in mining. This appears to be necessary in order to make coal a competitive fuel for the future, but it does not decrease the human problems, and it is with those that we now have to try to deal.
It seems to be widely accepted that there must be contraction in order to make coal a really competitive fuel, and we are all anxious—perhaps for selfish as well as for other reasons—that it should be a competitive fuel. I already pay between £14 and £15 a ton for household coal—
§ Mr. Kelley
Would the hon. Lady agree that there are pits bedevilled by labour problems because they are on the threshold of large industrial areas, where there is a shortage of labour for the lower-paid tasks? People have to be transferred from higher paid jobs to the lower-paid tasks and, as a consequence, the costs of production go up. Labour problems therefore contribute to the other difficulties.
§ Mrs. Thatcher
I had gathered that from previous debates on the subject. My point is that I believe that every one accepts that there will be a contraction in the mining industry, and a contraction in the number of people who are employed in it. There are pits that are marginally economic; that is to say, if one of them is closed down it may be necessary to bring coal from a distance from another pit where, although the cost of the coal at the pit head may be less, cost plus transport would not enable it to compete with the coal which could be produced from what I would call the marginally economic pit.
I agreed with the right hon. Gentleman when he said that this is a very dangerous industry, and I ask hon. Members to accept that in what I say I am very sincere, as I know other hon. Members are. 267 It has always seemed very fearful to those employed in comparatively safe occupations that mining—even last year, which was a good year—has such a very bad accident record; good for the mining industry compared with some years but one which most of us would consider bad. The average was three men killed and 20 men injured each week. That is quite apart from the tremendous amount of industrial disease coming from mining, of which all of us who have dealt with industrial injury have knowledge. In so far as this is eccentuated in the uneconomic pits, I shall be delighted if that position can be reduced.
It may have been necessary in the past, when coal was our only fuel, to have the maximum number of people down the mines getting the coal. That is not the case now. It seems futile to have more men than are necessary going down the pits in conditions in which there will certainly be some deaths, and much danger, to dig up coal that no one wants to buy, and which is put on a stock heap which is already 27 million tons high—quite apart from undistributed stocks—
§ Mr. J. T. Price
I am interested in this aspect. I understand that the hon. Lady has a very distinguished record as an economist. In deploying this kind of argument, she should draw the distinction that our coal is an indigenous natural resource and an asset of the country—200 years' reserves of coal under our feet. The alternative fuels are not under our feet in the same way, but have to be imported, and paid for in foreign exchange. This seems to be a very important economic argument, quite apart from the sentimental or humanistic arguments the hon. Lady is now putting forward so nicely.
§ Mrs. Thatcher
The hon. Member's argument would have been true many years ago, but natural gas is just off our shores and nuclear power has a very small foreign exchange content. Middle Eastern oil can certainly be paid for out of sterling because we own large reserves and oil industries are considerable earners of foreign exchange. Using expensive fuel in industry raises its fuel costs and that worsens balance of payments because it increases export costs. Further, there are a number of basic industries which are high users of energy. That 268 cost enters not only into their products but into more sophisticated ones as well.
I have been very much more generous in giving way—and I have thoroughly enjoyed it—than did the right hon. Gentleman. I thank hon. Members opposite for helping me through a comparatively difficult speech. I turn now to the main provisions of the Bill. There seem to be three main provisions. The first are the social provisions, secondly, there are the protection provisions, and, thirdly, there are the provisions for borrowing. The social provisions recognise that contraction will come about and will affect many—let us face it and be realistic—who have no hope of finding alternative employment.
There are certain places to which we shall never get industry to go. If we close our eyes to that fact we shall be completely unrealistic. The only hope there is for some of the younger workers to move away, as I gather some have already done, to more profitable pits. It is very right and proper that the social provisions should be directed to helping those people. We have no quarrel with that; we thoroughly support it.
We should, however, note that there has been already a very considerable contraction of the coal industry, long before the Government produced White Papers about it. Looking through the figures, right back to 1957, which is the earliest year for which figures were compiled on the same basis as this year and is conveniently 10 years ago, we find there were 703,000 employed in the mines. The latest pink paper from the Ministry of Power shows that in the week ending 11th November—nearly 10 years later—387,000 were employed in the mines. That is a contraction of 316,000. Hon. Members will correct me if I am wrong, but apparently that contraction has taken place without a great deal of dislocation, without redundancy and without any considerable problems. There obviously have been problems—
§ Mr. James Griffiths
The hon. Lady is on a very important point here, but I think that she has missed a point that she should bear in mind. Every time pits are closed the number of jobs available, not only now but for those who are growing up in these communities, declines. One of the social costs is that 269 young people are being deprived and these are becoming decaying communities.
§ Mrs. Thatcher
I am always prepared to learn from the right hon. Gentleman. I have been doing so for many years now, but I think that he will agree with the Minister that if one were given a choice one would not send a son down a pit. I would not do so, and I would be interested to know how many representatives of the National Union of Mineworkers would do so. It comes down to the problem of trying to find alternative employment for the younger generation—if not in the area, at a point fairly near it, which would be a suitable growth point which could absorb young people from that area. That point may not be exactly in that area, but at a distance away. It is far better if it is at a point where it is suitable to get industry permanently established so that it can be an industrial growth point.
§ Miss Margaret Herbison (Lanarkshire, North)
I thought that my right hon. Friend the Member for Llanelly (Mr. James Griffiths) would deal with the point made by the hon. Lady. If I understood correctly, she said that until fairly recently there were not redundancies when pits were closed. My area suffered more than any other part of Britain. Year after year when pits closed we had very serious redundancies in an area where there was little or no other employment.
§ Mrs. Thatcher
Perhaps I should change slightly what I said and say that there have been no serious dislocations to date. Perhaps the right hon. Lady would agree with that. The younger people have been moving away—[Interruption.] I have been very generous in giving way, but, to enable other hon. Members to make their speeches in the debate, I should get on with my speech as quickly as possible.
Protective measures for coal were considerable before the Bill was introduced. There was 2d. a gallon on oil and now it is 2.2d. per gallon. In the Select Committee on Nationalised Industries, I understand that Mr. Stanley Brown, when giving evidence in April this year, said that at the moment the preference which the Central Electricity Generating Board 270 is giving to coal is costing the Board of the order of £3 million a year. Unlike the new measures in this Bill, which will not go on to the cost, that went on to the cost of electricity. There was thus already a very extensive protection to coal before the Bill was introduced.
I also understand that, although sometimes power stations are built on comparatively cheap coalfields, they do not necessarily always get the cheapest coal from those coalfields into the power stations. This came out in evidence given to one of the Select Committee sittings when Sir Ronald Edwards was questioned by my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster). Sir Ronald was asked:You said that very frequently you had to take more expensive coal and that the cheaper coal, even though it might not be better coal, was going elsewhere. Are you going so far as to say that where you placed a power station in the East Midlands or Yorkshire or West Midlands, nevertheless you were having to take coal from some other region in the country?—There are such case, yes, Sir.Even if one sites power stations at a point where there should be the cheapest coal, it is not always forthcoming.
The Bill provides further protection for coal. It is interesting to see how the Minister has arrived at the figure of an extra 6 million tons. He did not tell us exactly how he arrived at that figure of the extra amount to be used for electricity and gas each year. I think that the answer is to be found in the White Paper, in which there is an analysis of the amount of coal expected to be used in power stations in 1970 in the event of specified amounts of protection being given to oil. That is on pages 57 to 59. I refer to cases II and III. In case II the oil tax was assumed to be at 2d. a gallon throughout the period, with no special preference for coal at power stations. In that case, the power stations would take 72 million tons in 1970. In case III the tax was assumed to be 6d. a gallon for power station use, when power stations would take 78 million tons, that is an extra 6 million tons. It seems to me that that is where the 6 million tons comes in. This analysis does not give a figure for gas, but gas would not take very much extra coal. The Minister is providing extra protection amounting in all, with the old protection, to 6d. a gallon on oil to increase the use of coal.
§ Mr. Marsh
That is not quite the way the argument arose. We sought, first, to find out where the trend figures were going. This gave a figure of 149 million tons in 1970. One hundred and forty-nine million tons in 1970 would have meant a manpower rundown of about 45,000 men a year. We then looked to see whether this was possible, both in terms of the social consequences and in terms of the extent to which this would start a run-out of the industry. We tried to work out what was the maximum amount of run-out which was manageable. This is where the figure of 155 million tons came from, more or less.
§ Mrs. Thatcher
We would agree that, if there is to be a protective subsidy for coal, it should come from the taxpayer and not be borne by the consumer. How far the subsidy is legitimate for these purposes perhaps we can go into further when more of the statistics are available.
Hitherto, the competition has not come from nuclear power or from North Sea gas, although the debate which has taken place outside the House has been about that. The competition has, in fact, come from oil. The White Paper points out at page 78 that the new Pembroke station could produce, if oil-fired without tax, energy at 0.42d. per kWh and. with tax, energy at 0.53d., whereas the cost at Drax, which is coal-fired, is 0.56d. So we are putting a charge on oil to bring its cost up to the present cost of coal. We are a little concerned that we might be adding to the burden already borne by industry at a time when it is having great difficulties in getting its prices down for the export market and will continue to have those difficulties, because export business has never been very profitable, as the Minister knows.
I come to the reprieve measures, which will keep the pits open for a further six months, the measures decided just before the Labour Party conference, and as to which, according to The Times—Even Mr. Will Paynter, the President of the National Union of Mineworkers—who have most to gain by a change in fuel policy—suspected' a certain amount of gimmickry'.Mr. Paynter did not say that he was surprised at the gimmickry but that he suspected it. The cost of keeping these pits open for a further six months is between £5 million and £8 million. I want to tackle this question by reference to the 272 stock position, of which the right hon. Gentleman gave some details taken from the annual Report of the Coal Board. In fact, the Minister said that the value of stocks at the end of last year was £110 million. The value must have risen a good deal since then, because that related to a stock position of 20 million tons. It is now nearly 28 million tons. Moreover, that was the sale price of the stocks. Already, the coal put to stock has deteriorated very considerably. From the value of £110.5 million was to be taken £28.5 million, which figure represented specific provisions for loss of weight, degradation of quality, the cost of lifting, marketing, etc.
§ Sir G. Nabarro
May I bring my hon. Friend right up to date from the Ministry's own statistics? On 12th November, undistributed stocks were 19.663 million tons; distributed stocks were 18.983 million tons; total of undistributed and distributed stocks, a mammoth figure of 38.64 million tons on 12th November.
§ Mrs. Thatcher
I agree with the figure, but the figure my hon. Friend gives of 19.663 million tons undistributed stocks refers to 12th November of last year. The figure for this year is 27 million tons. My hon. Friend is out in the wrong direction. The figure is worse than even he thought.
§ Sir G. Nabarro
Well done! I apologise; 27.825 million tons is the undistributed and 19.086 is the distributed. The two together total 46.911 million tons.
§ Mrs. Thatcher
I shall treasure that apology: they are rare.
The stock position is already extremely high and the doubt is whether much of the coal will ever be sold. We know nothing about the type or quality of the coals in stock. I hope that before the Committee stage of the Bill the Government will tell us what are the types of coal in stock and how long they have been there, because I suspect that some of them have been there for 10 years or more.
The cost of stocking coal for 10 years is as much as the cost of digging it. This is where we have very serious doubts about the wisdom of certain Clauses. What is the point in reprieving pits to increase the stocks of coal when it would 273 seem twat we are short of buyers and many of those stocks will never be sold?
The Minister was interrupted—it was either an interruption or one of those remarks which are made from a seated position—by someone saying, "Throwing men on the scrap heap", or "on the taxpayers" or "on National Insurance". Coal is produced at a cost of about £5 a ton. If it is not sold, the loss is £5 a ton. It then goes on the stockpile. Over 10 years it will cost another £5 to stock it. As I understand the latest productivity figures published in The Times this morning, the output per man shift is now just over 2 tons of coal. Taking absenteeism at 20 per cent., it means that a man will produce about 8 tons of coal a week at a loss—assuming that it is not sold—of £40 a week.
Would it have been better not to have reprieved some of the pits but to have spent the same amount of money on helping in another way? The fact is that much of this coal will never be sold. I hope that before the Committee stage we shall have much more detail on stocks, because the amount of detail given in the Coal Board's annual Report is pitifully small and we want to know much more about them.
I assume that the protection measures—we shall require an assurance on this—are transitional measures only. There will probably still be a problem at the end of them, but they are presented to the House in the faith that they are transitional measures. The longer they continue, the longer it will take for coal to become competitive.
I turn to the borrowing powers. I am sorry that I have taken a long time, but I have not occupied anything like all of it myself. There is another £200 million by 1971, although the amount already provided should have lasted until then. It is yet another miscalculation, presumably because sales are down and stocks are up. Stocks will continue to be up and it looks as if a large amount of the extra money has to go into ordinary stockpiling.
We are also being asked within that amount for more sums for capital investment. Certain strictures on the investment policies of the Coal Board were made in the Report of the National Board for Prices and Incomes on Coal Prices. 274 We shall want to know about this, too, in Committee. Three particular criticisms were made of the Coal Board. Paragraph 62 of the N.B.P.I.'s Report says:We have learned that in recent years the net return on new investment in collieries has often fallen short of the rate of return…applied by the Board as an appropriate criterion to new colliery projects".I assume that the majority of this extra capital investment is going to new colliery projects and not to ancillary activities. If it is going to ancillary activities, there are other criticisms to meet.
Paragraph 63 says:We consider that this more critical examination of the assumptions on which investment calculations are made should also apply to the National Coal Boards ancillary activities, particularly the diversification projects on which the Board is now embarking.It is a matter for consideration, if the finances of the Board are so shaky that it needs to come to us for another £200 million, whether it should be taking part in the exploration for North Sea gas.
The third criticism concerned the benefits of modernisation. The Report said, at paragraph 62:…the benefits of modernisation have not been fully reaped because of the inability to secure the estimated numbers of man-shifts worked.Those are three criticisms of the investment policy of the Coal Board. The right hon. Gentleman knows that I do not have much faith in the Board. Before we give powers for the extra borrowing we shall want assurances that some of those criticisms have been listened to, and that action has been taken to see that the grounds for them do not occur again.
It was on Clause 7—" Parkinson's Clause "—that we got one of the first smiles from the right hon. Gentleman during his speech. While the numbers of miners in the industry are being run down, the number of people on the Board is being put up. If a private enterprise did that, all hon. Members opposite would have a fine old time debating against me.
§ Mr. J. T. Price
The hon. Lady is drawing a very interesting comparison between the practice of private enterprise and the boards of the nationalised industries. That is a good ideological point. But when Mr. Weinstock took over the 275 controlling directorship of G.E.C. he "shot down in flames" over 90 per cent. of the administrative staff. He closed the head office, with 2,500 administrators, and stuck the office on the outskirts of London with 250 staff who, he says, are doing the job as well as the others were. That is private enterprise, so there is not much in the hon. Lady's point.
§ Mrs. Thatcher
The hon. Gentleman is helping me. My complaint is that the Coal Board is doing just the reverse and is increasing the number on the Board, and probably the number of salaried people at headquarters, as compared with the number of miners.
The reason the right hon. Gentleman gave was that it was to take certain people from the regions on to the Board. I understand the duties of members of any board; they have a duty towards the industry, and that is their only duty. As Minister, the right hon. Gentleman is responsible to the nation, but the Coal Board is responsible to the coal industry. Why is the right hon. Gentleman putting on the Board regional members who, according to his own description, are not responsible to the industry but will be responsible for taking up some of the slack produced by the closures? Unless he is taking on people who are connected with the coal industry and responsible to it, the only point in taking on regional people is to make provision for those who become redundant.
They might have to argue to the Board that, if it pursued an expensive coal policy, it might prevent a cheap fuel policy in the area concerned. If a pit is producing expensive coal and the area cannot get oil without the tax, it can get neither cheap coal nor cheap fuel. There might well be a regional member of the Board arguing for cheap fuel—for more oil or other fuel—within an area, and he would not then be discharging his duties to the Coal Board.
§ Mr. Marsh
The hon. Lady is rather off the point here. I do not want to get into a managerial science argument, but I accept that every member of the Board is directly, completely and solely responsible to it for the industry as a whole. The intention is to have a functional Board with people undertaking specific functions and because very differ- 276 ent problems arise, for example, in the central coalfields as compared with the Welsh coalfields, to have people—as in the steel industry—devoting themselves to those problems in the industry. That is not unusual in any large industry.
§ Mrs. Thatcher
Perhaps we can go into more detail in Committee. It is a more suitable point for Committee, but as the right hon. Gentleman mentioned it, I also did so.
I agree with the Minister's fuel policy objectives. I agree that they should primarily be cheap energy, subject to adequacy and security of supply. His intentions in this direction are absolutely right. I hope that the optimism which has often been shown in the Coal Board's annual Reports will soon be put into practice. The last Report said that coal can be made fully competitive with any other fuel. It said:…the Board have stressed that coal can continue to be made available in quantity at a price which is fully competitive with other fuels, and without the need for heavy capital expenditure.We on this side of the House look forward to the time when that objective is achieved.
§ 5.6 p.m.
§ Mr. Harold Neal (Bolsover)
I congratulate the hon. Member for Finchley (Mrs. Thatcher) on her initiation into fuel politics. She will find the ground much rougher than she did this afternoon, and the conflict much more bitter than that to which she has been accustomed in the bipartisan field of social services.
Nothing the hon. Lady said has taken away my faith in nationalisation. In her interesting appraisal of the coal industry she overlooked the one outstanding fact that the coal industry, which has been nationalised for 20 years, was administered by Tory Governments for 13 of those years. In the present grave situation it ill behoves anybody on either side of the House to say, "You did it".
I give general support to the Bill, because I believe that it is an honest attempt to provide a solution to the problems of a declining industry and a generous provision for some of the social convulsions arising from it. Although I welcome the Bill, as one who has spent 50 years in association with the industry in one capacity or another, I am saddened by 277 the need for its introduction. To see the coal industry, this once great industrial giant, in such a state of impotence, baffles the economists and confounds the prophets. In these circumstances, it is difficult for a Government to legislate for a contracting industry in this period of uncertainty.
I congratulate the Government on having the courage to deal with this unprecedented situation in the industry. I assure my right hon. Friend that the country will forgive mistake after mistake, but it will never forgive lack of courage in taking, if necessary, unpalatable measures to deal with an industrial crisis.
The White Paper, which is the parent of the Bill, has not yet been debated, although it has been presented to the House. It remains to be seen whether we shall have an opportunity to debate it when it has been revised. I hope that we shall. It is impossible to appreciate the provisions of the Bill without considering alongside it the terms of the White Paper.
The decline in coal is an accepted fact. Output has been falling, and manpower has been wasting over the past 10 years. The Bill envisages a concentration by the industry on better and more remunerative seams, with a view to making coal competitive in the fuel market.
Output last year from deep-mined and opencast coal was 176 million tons; this year it is running at the rate of 165 million tons. Manpower last year was 428,000, and this year it has declined to 386,000. For the purpose of this Bill the Government calculate that the total output of coal in 1970 will be 155 million tons, and around this figure many storms have beaten and broken since it was disclosed.
We have heard about White Papers this afternoon. I have always averred that no industry has been so bedevilled with White Papers, reports of Commissions, reports of Committees and butterfly statistics as the coal industry. Butterfly statistics are beautiful to look at, but very unenduring. The 155 million ton-target which the Government have fixed for 1970 may well be over-optimistic. It would not be unusual for calculations of this kind if it were. [Interruption.] Mr. Speaker, I shall have to ask for your 278 protection if there is not sufficient quiet in the House.
I was continuing to say that calculations about output in the coal industry have often gone awry. The Plan for Coal, issued by the National Coal Board in 1950, the document, Investing in Coal, in 1956 and the Revised Plan for Coal, in 1959, all miscalculated what the output would be a few years hence. I have this week been re-reading a book which was written by an Associate Member of the Institute of Fuel in 1952. On page 9 of the book the author wrote:If present methods continue, we shall need by 1960…an aggregate of 284 million tons.The actual output of coal in 1960 was 194 million tons. So it was a "slight" error of 90 million tons. The author of the book was none other than the hon. Member for Worcestershire, South (Sir G. Nabarro), who was then the hon. Member for Kidderminster.
§ Sir G. Nabarro
I am grateful to the hon. Gentleman for giving way. We had long conversations in 1952 about the output figures, and the operative words in the passage he has just quoted are "if present methods continue", because then we were entirely reliant on the coal industry for all forms of energy in this country, save only a modicum of fuel oil, and that was rationed anyway.
§ Mr. Neal
We are in a similar situation to what we were 12 months ago. Almost exactly to the day—on 25th November, 1966—we were debating a Bill of a similar character to the one now before us, and the Government forecast in the White Paper accompanying it was 170 million to 180 million tons by 1970. These calculations are often wrong. They may be wrong now within a year or two.
Who would have thought, five years ago, that there would have been the impact of the North Sea gas discovery on 279 the fuel industry? Who would have calculated—I doubt whether even the hon. Member for Worcestershire, South would have done—that the oil industry, within 10 years, would have risen from 14 per cent. to 37 per cent. in its share of the energy requirements of the country? It is easy to go awry in these calculations. Consequently, I think that the critics of the output figure on which the Bill is based may find that the conflict of other forms of energy will render their calculations obsolete and nugatory.
I deplore the attitude of the Chairman of the National Coal Board. Before the White Paper was issued, or the Bill was presented to the House, Lord Robens met planning authorities and representatives of the National Union of Mineworkers and disclosed figures which doubtless had been given to him in confidence; and not only that but extended those figures by his own calculations to prove to his own satisfaction that by 1980 the output would be about three times its present level and the manpower in the industry would be reduced to about 65,000 men. His figures took no account of the wastage of the industry. I think that this disclosure was responsible for a good deal of the panic that has followed within the past week or two in the mining industry.
§ Mr. Kelley
Is my hon. Friend aware that at this very moment there is a pit in Yorkshire—Highgate Colliery—producing 95 cwt. per man shift and that what Lord Robens is talking about is 120 cwt. in 1980 overall?
§ Mr. Neal
If there is to be a competition, I can quote pits in the Midlands doing better than any in Yorkshire.
Anxiety prevailed in the coalfields before Lord Robens made his declaration, but after his disclosure the anxiety grew to disillusionment and despair.
I repeat what I have said in the House previously. This conflict between the Minister and Chairman of the National Coal Board is altogether disastrous. Where are we to get the technicians, mechanics and scientists for the new, contracted industry if we are to tell them that there is no future in the industry for the next 13 years?
In my student days I very early learnt a phrase which is very apt in this situation, "Derived power cannot be greater 280 than the power from which it is derived." As the Minister has statutory responsibility for running the industry, he cannot afford to have a subordinate individual coming into public conflict over his proposals. I know that one of my drawbacks is that I think aloud too often, but I cannot absolve the Prime Minister from responsibility. He ought to protect his Ministers differently, and in this situation the only solution was the immediate dismissal of the Chairman of the Coal Board.
§ Mr. Adam Hunter (Dunfermline Burghs)
Is my hon. Friend aware that from a Government source it has been said that Scotland's position in 1971 will mean a reduction in manpower from 39,000 to 26,000, a third less, and was not Lord Robens right to point this out to people in the country?
§ Mr. Neal
I still think that the figures that were revealed in the newspapers are still likely to be imperfect and incorrect. I think that it is fair enough to project the output of this industry for three years instead of eight or 10 years, because the forecasts have so often been wrong in the past.
I would like to turn now, perhaps appropriately, to a less controversial subject. I agree with the hon. Lady the Member for Finchley about the proposals in Clause 7 for increasing the number of members of the Coal Board from 11 to 16 and the full-time members from eight to 13. After 20 years of nationalisation surely no one can adduce a valid argument for doubling the size of the board when it was first constituted. Output has considerably declined, personnel has been nearly halved, and it is now accepted that we can manage an industry with a Board of 16 members and a chairman. This is not a board of directors: it is a mass meeting.
I know that some members of the Board are very fond of having their pictures taken wearing pit helmets, but coal is not got at Coal Board House and if some extra administrative help were needed in this situation it should be given to the enlarged areas which have resulted from reorganisation of the nine divisions.
I now turn to those features of the Bill designed to mitigate the social consequences of the decline of coal. The proposal to give redundant miners over 55 281 years of age 90 per cent. of their take-home pay for three years is very attractive, but I wonder whether the differentials are correct. This needs full examination in Committee before being implemented.
When a mine is closed, or the closure is deferred, the N.C.B. must be reimbursed for the expense. My right hon. Friend was at some pains to explain the reasons for this, but the amount provided, £8 million spread over four years, is entirely inadequate. A more realistic figure would be £50 million. Some uneconomic pits are losing thousands of pounds a week, and the Board cannot do much with £8 million for four years. I hope that the Minister will reconsider this figure.
The opponents of the Bill seem to think that it is the Minister and the Government who are running down the industry. It is not either, but the consumers, who are choosing other fuels. Even if they could, should the Government compel consumers to buy coal? They may be able to influence the price a little, but that is all. At present, 46,911,000 tons of coal, distributed and undistributed, are on stock. When the Minister has asked this question of his opponents in recent weeks, no one has told him how he can dispose of it.
What is the solution? It baffles me and must baffle many of those in the sales department of the Coal Board—
§ Mr. Albert Roberts (Normanton)
Would my hon. Friend say that the railways are more efficient now, when they have diesels, than they were before, with coal-burning locomotives?
§ Mr. Neal
The last thing which I would claim to be is an expert on railway engineering. I leave that problem to my hon. Friend.
Are we to see a repetition of what happened several years ago, when the stocks of coal were virtually given away on the Continent? That was a humiliating situation. But this problem is not peculiar to Britain. The European Coal and Steel Community has its own surpluses and redundant miners. In Germany today they area facing a very grave coal crisis in the Ruhr coalfields—
§ Mr. Neal
Yes, but do not mention it to General de Gaulle.
Coal is losing the battle in every industrialised country in Europe. It has been beaten in the fight for cheapness by other forms of fuel.
Finally, I turn to the so-called grey areas. In the East Midlands coalfield we produce coal at 77s. a ton, in contrast with the national average of 98s. a ton, but we have pits under threat of closure. I know only too well the social consequences of the closure of a colliery. Nothing stirs my emotions like the results of such closures. There are always some victims—the man over 50 who does not want to pull up his roots, the man with a mortgage and the man with children at school.
Some isolated villages in my constituency, as in others, have populations of about 6,000 or 7,000, with their whole economic life dependant upon a colliery. When a pit closes in these circumstances, it is a tragic sight. There is not a factory for miles. Yet we are not a development area. What hope have we of getting I.D.C.s and new factories? I hope that the Minister will try his best to achieve cohesion between the Board of Trade, the Ministry of Labour and the Ministry of Power to provide some help for these grey areas—
§ Mr. Swain
I am enjoying my hon. Friend's development of his argument, but perhaps I could give him one point of information. In the morning, at 10.30, the miners' group is meeting the President of the Board of Trade, the Secretary of State for Economic Affairs, and, I hope, the Minister of Housing and Local Government, to discuss this very problem.
§ Mr. Shinwell
If my hon. Friend will allow me, I am very interested in what my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) has just said. I wonder, will my constituency be represented at this important meeting?
§ Mr. Neal
My right hon. Friend the Member for Easington (Mr. Shinwell) and I do not qualify. When I began, I expressed the hope that I should be able to proceed with fewer interruptions than occurred during the speech of the hon. Member for Finchley, but my record compares very well with hers.
I congratulate the Minister on the restraint that he has shown in the past weeks under a wave of unfair criticism, and I hope he will successfully weather the storm. The coal industry is entitled to special treatment. No other industry contributed so much to this country's post-war recovery. The miners have shown commendable restraint in their demands at times when they could have held this country to ransom. There has not been a national stoppage in the mining industry for 40 years.
Although the miners may seem to be in turbulent mood, I believe that they will play their part in this period of unexampled strain and trial. For these reasons, I commend the Bill to the House in the belief that it will provide a breathing space in the greatest crisis which the industry has experienced.
§ 5.30 p.m.
§ Sir Gerald Nabarro (Worcestershire, South)
It is always a pleasure for me to be called following a speech by the hon. Member for Bolsover (Mr. Neal). This is not the first time that it has happened.
It is perfectly true that 15 years ago many right hon. and hon. Members on both sides of the House were gravely concerned about the output of the coal mining industry and the fact that in the predictable future, as we then saw it, it would be impossible for the industry to match the coal requirements of the country, let alone contribute anything to exports. That was a time when the industry was producing about 212 million tons of coal a year, including a good deal of opencast coal. So grave was the position in the early 1950s that by 1954 we were importing 18 million tons of coal at a cost of £90 million, the whole charge for which fell on the shoulders of the National Coal Board.
I mention that as an introduction only, because in the early 1950s coal was al 284 most our only source of energy. We used a modicum of fuel oil; but fuel oil and petroleum products, including petrol for motor cars, were strictly rationed. Nuclear energy had not been devised or discovered. North Sea gas had not been thought of. There was a tiny output of water power in Scotland. But overwhelmingly—I should say as to more than 95 per cent.—the country was dependent on the coal industry for its sources of indigenous energy.
It was for those reasons that a number of colleages and myself projected in a book to which the hon. Member for Bolsover alluded, the required output of coal during the remainer of the 1950s to match the growing productivity of the country. Whereas in those days we had one fuel, coal, today we are blessed with four fuels: coal, which is entirely indigenous; natural gas, which may be regarded as entirely indigenous; nuclear power, which may be regarded as entirely indigenous; and oil, which is entirely imported.
I mention these factors only because of earlier speeches and notably the remark of the Minister of Power, which drew from me the retort "Rubbish", that the present White Paper, Cmnd. 3438, was the first attempt to estimate the nation's energy requirements. In 1951, the right hon. Member for Derby, South (Mr. Philip Noel-Baker), when Minister of Fuel and Power, created the Ridley Committee, which laboured for two years on exactly the same problems as the present White Paper has enunciated, and which, after those two years, presented its Report to the then Minister of Fuel and Power, my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd).
Part of its recommendations was implemented. The remainder were discarded, for two important reasons: first, because we decided to embark on a large-scale refinery programme and the substitution of growing energy requirements in future, by fuel oil since there was no prospect of getting enough coal from our mines without increasing coal imports; and, secondly, because of the onset of nuclear energy, the creation of Calder Hall, the successful operation of the first reactor there and the nuclear power prospects which that offered at 285 very high capital cost—hundreds of millions of pounds—during the seven years between 1956 and 1962.
The whole of our fuel and power economy has fundamentally changed in the last decade, and I would not quarrel with any ho n. Member who recognises frankly and honestly that the size of the coal industry in terms of men employed will necessarily diminish. The rate of diminution is critically important. The cost of extracting the coal is even more important.
My hon. Friend the Member for Finchley (Mrs. Thatcher) alluded to certain desirable factors in the creation of energy for the future, but she was far less comprehensive in her statement than I would be. I give the House what I believe to be the four desiderata for the growing requirements of energy in Britain between 1968 and 1980. First, we should use, for balance of payments reasons, the maximum of indigenous fuels, and that means coal first, natural gas second, and nuclear power third. Secondly, our energy should be produced at the lowest possible cost, although it might be noted by the House that in our manufactured exports, at f.o.b. prices, no more than about 1¼ per cent. is represented by the cost of fuel and power as an ingredient in the price of the exports. Thirdly, all energy produced in this country should be based on maximum fuel combustion efficiency. Fourthly, there is the critical need for economy in capital costs.
§ Mr. Kelley
Would the hon. Gentleman agree that nuclear energy is not an indigenous fuel but is probably more reliant on imports than other forms of fuel at present in use?
§ Sir G. Nabarro
Perhaps the hon. Gentleman would allow me to reply to that as I deal with each of the four points which I have given, which are the crux of my arguments.
The first of those desiderata was the maximum employment of indigenous fuels. Here I am in conflict with a number of my Conservative colleagues and certainly with a number of the members of the Liberal Party—[HON. MEMBERS: "Where are they?"]—in saying that I profoundly believe that coal, properly employed in our electricity generating power stations, is a cheaper 286 fuel than any of the alternatives, provided that the power station is sited correctly in the first instance—and that is the critical factor.
Obviously, if a power station is required on Southampton Water, remote from the major areas of coal production, it should not be a coal-fired station. Conversely, if the power station is required in County Durham, in the East Midlands, or in South Wales where it may be built on the coalfield—not contiguous to the coalfield, near to the coalfield or in the environment of the coalfield. But on the coalfield so that the coal is not brought up on belt conveyors, tipped into silly little wagons, run down a railway line for 20 miles, the wagon turned upside down and the coal put in the bunkers and then transported on the belt to a point beneath the boilers of the power station, which is the economics of the 1930s, but built on the coalfield so that the same belt brings up the coal and puts it underneath the boilers of the power station—
§ Sir G. Nabarro
I will come to water presently. I do not want to go through all the desiderata of siting a power station. I will do so if somebody wants me to, but I do not need to do it today. I know that a lot of water is needed in a power station.
So long as the factor which I have named is complied with, the cost of electricity generation per kilowatt hour based on coal is lower than for any alternative fuel.
§ Mr. William Baxter (West Stirlingshire)
No doubt the hon. Member is aware that the policy of which he has just spoken is at present being followed at the Longannet power station and the Longannet mine now being built. The coal comes right up to the centre of the power station as the hon. Member has described it. Therefore, although I subscribe to the hon. Members point of view, he is saying nothing new.
§ Sir G. Nabarro
I am sorry to quarrel with the hon. Member, because it is not being done with all new coal-fired power stations. I anticipated the interruption by the hon. Member or by another hon. Member and I quote at once my answer, 287 which is irrefutable evidence. I allude to the Central Electricity Generating Board's Annual Report and Accounts, 1966–67, page 13, paragraph 38: transport of fuel, calendar year 1966, millions of tons. Transported by rail, 40 million tons; transported by sea, 9.8 million tons; transported by road, 10.6 million tons; transported by inland waterways, 1.8 million tons; transported by conveyor belt, 2.7 million tons. Out of 64.9 million tons used in 1966 in power stations, only 2.7 million tons, or roughly 3 per cent., was transported by belt direct from the mine into the power station.
§ Sir G. Nabarro
I shall not argue the figures in greater depth. If the hon. Member wants further evidence of what is achieved in this connection, although it may be anathema to hon. Members opposite for me to allude to any economic fact emanating from the Republic of South Africa. I refer to the power stations at Komati, 1,000 MW Arnot, 2,100 MW; Camden, 1,600 MW; and Hendrina, 2,000 MW, where the policy of the South African Electricity Supply Commission has been to site the stations so that the coal may be transported by belt from mine to power station; and in positions where water is readily available.
§ Sir G. Nabarro
South Africa has to do so because it has no gushers of oil and it develops the oil from coal process to get a modicum of oil that is not imported. The South Africans have now tapped natural sources of oil at great depth, however, and they will be developing it.
That is the first of the desiderata which I have named. I believe that, given those conditions, coal is cheaper than nuclear energy or oil in power stations. May I underline the importance of this by saying that if the estimate made in the White Paper is correct, that bituminous coal output in Great Britain will be 120 million tons in 1975, it should be related to the fact that out of the 120 million tons, 76 million tons, or 63 per 288 cent. of that total, will be burned in power stations. Therefore, the power station factor is critical to the future size of the coal mining industry.
§ Mr. J. D. Concannon (Mansfield)
I come from the East Midlands coalfield, where there are 14 power stations, each one of them coal-fired, the last three having only recently been built. We also have the River Trent, where the power stations are situated. I understand the points made by the hon. Member, but what would he do in the case of villages, when the pit is in the middle of a village, when trying to site a power station?
§ Sir G. Nabarro
One cannot, of course, put a power station in the middle of a village. I cannot go into detailed planning considerations. I am trying, under great difficulties, to enunciate what I consider should be the policy for 63 per cent. of the estimated output of coal in 1975.
May I, however, underline what I have said this afternoon by a further important contemporary figure. I am delighted to see the Chancellor of the Exchequer in his place. It must worry him a great deal, as it would worry me if I were Chancellor. There is under construction 35,000 MW of electricity generating capacity. We are spending £650 million a year on capital costs in the electricity industry for generation and distribution. Out of the 35,000 MW of capacity under construction, 25,000 MW is for coal-fired stations, 6,000 MW is for oil and dual-fired stations and only 4,000 MW is for nuclear stations.
That pattern will change dramatically if the inferences and plans set out in the fuel policy White Paper are implemented, but I hope to change them. I am sorry that there is not to be a direct and separate vote on the fuel and power White Paper. I cannot vote against the Bill, for reasons which I shall explain later. I could have voted against the fuel and power White Paper, and later on I will do so if it is re-presented to the House, because in my judgment it runs down our bituminous coal industry too far and too fast, having regard to the factors which I have named this afternoon.
The second of my four desiderata was that we should produce our energy at the lowest cost. This is a pious platitude. Energy costs in Britain have been rising 289 faster than those of our European competitors and faster than in the United States of America, where they have actually been declining during the last few years. These facts are indisputable, but too much play may be made of them and too much emphasis put upon them.
I repeat to the House that at an average over the whole of British manufacturing industry, and based on 30 per cent. of our output product which we currently export, the ingredient in respect of fuel and power costs is only of the order of 1¼ per cent., or 3d. in the of the price of the exports at the British port. It is, therefore, a marginal consideration alone.
When people talk to me, as hon. Members who served on the Select Committee which reported a few days ago have done, about the marginal differences in the third or fourth place of decimals as between the prices per kilowatt hour of electricity generated by nucleonic methods—
§ Sir G. Nabarro
—nucleonic methods and the price per kilowatt hour of the electricity generated in a coal-fired station and the differences at the fourth place of decimals—and I relate that factor to 3d. in the £ of the price of our exports f.o.b. British port—I say that the differential is nugatory and should be disregarded by this House.
§ Mr. Edward M. Taylor (Glasgow, Cathcart)
While we agree with almost everything that my hon. Friend is saying in general, may I ask whether he would at least accept that in Scotland, where we have more heavy industry, the figure of 1¼ per cent. does not apply and, in addition, we have extra fuel costs of about £1 per ton for coal?
§ Sir G. Nabarro
The matter of Scottish differentials for coal, gas and electricity perhaps might be argued in depth in Committee, and I hope that my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) will put down appropriate Amendments. He may find important countervailing arguments in the large capital expenditure in the North of Scotland Hydro-Electric Board, which I shall be happy to deal with, as on the Scottish Grand Committee in earlier years.
290 On the subject of maximum fuel efficiency, I say at once to the Chancellor of the Exchequer that I do not expect him to reply today. He has been very courteous to me on earlier occasions, but he is not the Minister in charge this afternoon. However, I am delighted to be able to say to him, in his hearing, that he is warping and distorting the whole of our fuel and power economics by keeping in being the heavy and iniquitous fuel oil duty which afflicts British industry so badly. It was introduced by a Tory Chancellor, and I voted against it. I divided the House against it.
The whole of the Labour Party sat quiescent, but watching me and cheering me on in revolt against my own Chancellor. I voted against it the following year. The first Chancellor was my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd). On the second occasion, I voted against my right hon. Friend the Member for Barnet (Mr. Maudling) for perpetuating the fuel oil duty. Now, the whole Tory Party is with me and votes with me enthusiastically every year against the fuel oil duty. I say to the Chancellor of the Exchequer that, though it is minimal in its impact on the price of exports, indubitably it warps the competitive price system for fuels in this country, which I believe is desirable.
§ Sir G. Nabarro
The fourth of the desiderata on which I wish to dwell for a few moments is economy in capital costs. Had we been debating the White Paper today—we are not specifically, though it is alluded to in the Financial effect of the Bill—I should have had a great deal to say about capital expenditure in connection with electricity generation and distribution.
It is a commonplace in the House today for the Minister to say, as he did today, that we spend £1,000 million a year in capital expenditure on our fuel and power industries. That is quite true. We do. But why does he not say that, out of the £1,000 million, we spend less than £100 million on the coal industry, less than £100 million on the gas industry, less than £100 million on the oil industry, a relatively small sum on North Sea gas 291 in terms of distribution, and £660 million on electricity generation and distribution? Why does he not say that a large part of it is wasted because the thermal efficiency of our stations is still at the turgid level of 27 per cent., which is far too low and much lower than the United States of America, much lower than competitive European nations, and because the load factor of these immensely expensive stations is 51 per cent., taken as an average over the whole system?
The hon. Member for Normanton (Mr. Albert Roberts) interrupted the hon. Member for Bolsover and asked him a question about the substitution of diesel traction on British Railways for the former steam locomotives. I did not wish to interpose at that moment, but let me give the answer now, because it illustrates my point, graphically.
A steam locomotive working out of Euston to Crewe 10 years ago burned its large Durham coals or its South Wales coals at 7 per cent. thermal efficiency, wasting 93 per cent. of the heat value of the coal. Today, the system is electrified. The coal burned at the power station in generating the electricity to the transportation system is consumed in the power station at a thermal efficiency of 27 per cent.; in other words, the thermal efficiency is almost four times as great, due to the process of traction electrification. I go no further than that, but I make the point that, in Committee, I shall dwell more largely on the fact that currently we are wasting huge sums in capital investment each year. That is borne out by the dismal figures which I have quoted—a thermal efficiency of only 27 per cent. and a load factor of only 51 per cent. in our power stations, taken over the whole system. Were I Minister of Power, my first attack on diminution and economy of the huge investment programme of the nationalised industries would be directed against electricity, but I would not stint an iota in the improvement of electricity efficiency, the generation of more kilowatt/hours of electricity and more power at the elbow of every British worker on every bench, in every factory and on every farm. I could do it with a very much lesser capital sum of money than £650 million by improving the thermal efficiency of the stations and 292 improving the overall load factor of the system.
§ Mr. Lubbock
Would the hon. Gentleman not agree that one of the reasons why thermal efficiency has failed to rise in the last year is the under-investment in electricity generating plant in past years, which has resulted in our having to keep in operation much older plant which ought to have been phased out of service by now?
§ Sir G. Nabarro
I think that the emphasis is in the wrong place. I hope that the hon. Member for Orpington (Mr. Lubbock) will join me in Committee when these matters may be debated.
Before concluding my speech, I want to say a few words about stocks and about exports. I apologise to my hon. Friend the Member for Finchley for reading the wrong column of figures. I was listening to her magnificent speech so intently that my eyes wandered to the wrong quarter.
The fact is that, on 11th November, 1967, undistributed stocks at collieries had risen to the astronomical height of 27.825 million tons. The distributed stocks were about average for the time of year at 19.086 million tons. The total was 46.911 million tons.
On the same point of these very large accumulations of coal, in the direct context of this Bill is the fact that, evidently, the Minister expects them to rise a good deal more. The White Paper, in furnishing an analysis of the reasons for the increased borrowing powers required by the Board, refers on page 53 to £25 million for additional coal stocks, £50 million provision for deficits, and £45 million for all other contingencies. On three very dubious items, we have a total of £120 million out of the additional £200 million of borrowing powers provided under the Bill. Sixty per cent. is in respect of those exceedingly dubious items. I shall go into this matter in great depth in Committee, and seek to reduce the amount of the borrowing powers in pursuit of my belief that the Minister ought to be brought back to the House not more than 12 months from this date, to account for his expenditure of these large sums of money.
Finally, exports. This is a dismal position. I say to the right hon. Gentleman 293 and the Chancellor of the Exchequer that this is a dismal position. Does the Chancellor realise that the advantage deriving from devaluation must apply to exports of coal in the same way as to the exports of manufactured goods? Surely he realises this. Yet the White Paper postulates an export of only 3 million tons of coal a year to Europe, whereas the Americans are putting 21 million tons of coal a year into Europe. Why cannot we take advantage of devaluation to ship 20 mill ion tons of our surplus coal on the ground, at the devalued price of about 88 shillings per ton, to Europe and beat tilt: American prices? We need an answer on that from the Minister. If he wants to probe that statement, I will give him the figures. The average cost of coal production in Britain at the pit head in the first six months of this year was 100s. 7d. per ton. The average price of American coal landed at West European ports in the first six months of this year was 99s. per ton. But the 100s. 7d. per ton in Britain now becomes diminished for exports by 14.3 per cent., in respect of devaluation. We ought, therefore, to be able to put that coal into Europe at about 88s. per ton, plus the cost of transportation from the pit head to the West European port.
§ Mr. Marsh
The hon. Gentleman, I am sure, will have heard me say earlier that immediately after devaluation the National Coal Board sent teams to the Continent with this in mind. He will equally be aware that most international coal contracts are long-term contracts and we cannot just break them in a day.
§ Sir G. Nabarro
I do not dispute any of these things. There are 47 million tons of coal stocks lying on the ground, and the right hon. Gentleman is asking the House of Commons for more money to increase them. We cannot go on for ever putting coal on the ground. If he wants it in the vernacular: flog the coal in Europe for the best price he can get. It will be far cheaper than adding to the stocks on the ground with the deterioration to which my hon. Friend the Member for Finchley alluded, the depreciation factors involved, and the high cost of financing, with the present Bank Rate at 8 per cent., which presumably affects the Coal Board directly or indirectly as it affects every other business. I hope that before the Committee stage the Minister 294 will come to us with much more convincing arguments about the liquidation of these stocks.
I cannot vote against this Bill tonight because it includes provisions for helping miners who will be displaced by the contraction of the industry, and I want them helped on a generous scale. I am dissatisfied about the amount of money that the Bill provides and the increase in £200 million in the borrowing powers of the Board. I shall, therefore, seek to become a member of the Standing Committee if the Bill is considered upstairs. Whether it is considered upstairs or on the Floor of the House. I shall table a number of Amendments to diminish the borrowing powers, but I will give enthusiastic support to the financial provisions for helping the miners who are displaced through the closure of pits.
§ 6.4 p.m.
§ Mr. Edwin Wainwright (Dearne Valley)
It always gives me great pleasure to follow the hon. Member for Worcestershire, South (Sir G. Nabarro). His knowledge of the fuel industries of this nation is very wide. I thought at one time he would be giving wholehearted support to the mining industry, until he raised his point about wanting a reduction in the tax on fuel oil. No greater harm could be done to the industry at present than to remove that tax. I hope that the Government will take note of that and will give some guarantee to the mining industry that that tax will continue indefinitely.
This Bill, with certain adjustments, can be made into a useful Act of Parliament. Therefore, I ask the Minister and the Government to take due note of the views that will be expressed by my hon. Friends and myself this afternoon.
I must say something about the reasons why the Bill has been placed before Parliament. For many years now the N.U.M. and the mining industry have been asking for a co-ordinated fuel policy and not one based on market trends. With certain very small exceptions, the fuel policy that has been outlined appears to me to be based on market trends and not on the indigenous fuels of this nation which should always have preference. In my opinion, no Government have submitted a co-ordinated fuel policy. Woe betide anybody on the Opposition side who 295 criticises any policy put forward by this Labour Government, because they themselves failed year after year to bring forward a policy that would have safeguarded the mining industry. When I think back over the years when the mining industry was under the control of the coal owners of the nation, I feel greater resentment and greater bitterness than exists even today amongst the mining community.
During the period when coal was in short supply the Government, through the Minister, had power to restrict any increase in the price of coal, so that the funds of the Coal Board and the wages and conditions of the miners could be further improved. Even the Labour Government, in the period 1947 to 1951, kept the same kind of restriction. When coal was in demand the supply was not there. Never was the law of supply and demand allowed to operate. Had it been allowed to do so this nation would have felt a greater cost to industry for the fuel that was used. But do not let us forget that at that time coal produced in this country was far cheaper than coal produced abroad. We could have had a tremendous market had the industry been allowed to sell coal abroad, but it would have done great harm to industry and the economy of this country.
Furthermore, the mining industry was made to pay for the difference between the cost of American coal and the selling price in this country. That cost was £74 million, and that had to be borne by the National Coal Board. No private enterprise would have been allowed by a Tory Government to have borne such a cost.
There are many other contributions that the N.C.B. has had to make out of its funds towards social costs and other matters which should have been borne by the Government.
When we talk about pit closures—and this was mentioned by the hon. Lady the Member for Finchley (Mrs. Thatcher)—let us not forget that these have taken place with scarcely a ripple among the mining community about their effects. Under Tory Governments, 366 pits were closed, and 225,000 men were put out of work, but there was not much trouble in the mining industry because of that. 296 The Coal Board had to bear the cost of social concentration. Not a penny was received from the Government to ease the Board's burden, or to provide for the future of the men involved. For years—and this is probably true today—men who were injured in the mines, or whose health deteriorated because of working in the pits, received a mere pittance by way of unemployment benefit, simply because the Tories failed to do anything to help the mining industry. Since we have been in power, 123 pits have been closed, affecting 97,000 men. I must admit that there has been a tremendous amount of commotion over this, and I shall refer to it again later in my speech.
I want, now, to deal with the Bill, because it provides a basis by which we can make certain that benefits derived by the mining industry are such that they will ease the burden of pit closures, and give some satisfaction to the men concerned.
Clause 1 raises the amount which the Board can borrow from the Government, and the hon. Member for Worcestershire, South criticised this figure. Let us not forget that if the increased amount is borrowed it will have to be repaid. This will be a heavy liability on the industry, and it will become heavier still if output is diminished. I hope that my right hon. Friend will bear this in mind when the Bill is considered in Committee. The decline in coal consumption might make it necessary for the Board to ask for a further loan, and if this happens it will have to bear a greater burden than ever.
Clause 2 provides for the total grant to be made to the Board, which at present is governed by the 1965 Act, to be raised from £35 million to £45 million. This is, of course, an improvement, and I am glad that my right hon. Friend the Chancellor of the Exchequer is in the Chamber, because the previous Exchequer contribution was extremely mean. It was too low to be of any benefit to the industry. The idea behind it was far better than the results it produced.
Under the previous scheme, the industry had to spend £3.8 million on social costs before it received anything from the Exchequer. In 1966–67, out of a total cost of £6.8 million, the Government contributed £1.5 million. They ought to have realised that their contribution was far 297 too low. This measure will allow the Government to pay two-thirds of the social costs. When the Bill is considered in Committee, certain Amendments will be tabled because we believe that for far too long the Board has borne the cost of social concentration. It is time that the Government took over this responsibility, and made certain that the community as a whole paid for the cost of pit closures.
Clause 3 refers to payments to redundant miners. It is obvious that there can have been no consultation on this Clause outside the realms of the Civil Service. The idea behind it is generous, but it could give fit, strong, and healthy miners the idea that nobody wants them after the age of 55, and if nobody wants them at that age, who will want them when they are 58? Further talks must take place on this issue.
What we want in the mining districts is an opportunity to retrain miners for other work. I think that we should pay a miner who has reached the age of 60 a special pension for the rest of his life, or until he reaches the age of 65, when he will receive his ordinary pension. If we pay him such a pension for three years after the age of 60, he will obviously have reached the age at which no one will want to employ him in a modern factory of the kind which we hope will he built in mining districts.
§ Mr. Marsh
My hon. Friend has raised an important point, and I claim responsibility for this suggestion. What worries me is that it is not a new one. I made this suggestion on 18th July at the full conference of the N.U.M., and it is only now that it is being objected to. I am not making a debating point, because we want to do that which is best. Is my hon. Friend saying that his proposal for retirement at 60 is preferable to the scheme for the over 55s? It is only recently that doubt has arisen about this proposal.
§ Mr. Wainwright
I am giving my personal opinion. I think that a man of 55 should be paid something until he is retrained. We must not give a skilled miner of 55, a man who is capable of working for another five years at a remunerative job, the impression that his working life is over. We must make a special effort to ensure that men of this 298 age are retrained, and become useful to the economy of the country, instead of being a liability. Although I might be criticised for making this suggestion, I stand by it, and I shall argue for it in Committee. When we retire miners today at the age of 55, as we shall do, and they have done their three years, at 58 they can go back on the pension, which will be about £1 a week. It is a very poor remuneration for a man who has worked in this arduous and dangerous occupation and has made his contribution to the economy.
We must not forget that some of these men are injured or are in poor health. By the time that they reach the age of 58 many of them become unemployable. Therefore, when they fall back on the pension I hope that they will find that the Government have done something to help the N.C.B. make it a reasonable one. It is not satisfactory to hear that some of the Eastern European countries are paying higher pensions to their miners, who have worked for much shorter periods in the pits than have our miners.
I now turn to the question of what has happened in the coal mining industry in the last few years and what I believe should happen. The effect of pit closures and the reduction of coal production will have a tremendous impact upon many coalfields. I think particularly of the Durham coalfield, the Scottish coalfield, and the South Wales and other Welsh coalfields which have suffered from the effects of pit closures. In my district there are men from Durham and Scotland who tell depressing stories about what happens when pits close in their areas, in terms of the lack of alternative employment. One man, who happened to be a Norwegian, said that he had already been to three pits and that the pit in my area was his fourth.
Those in charge who talk so glibly about men leaving one pit and going to another should appreciate that it is not the desire of many miners to move in this way. Most of them prefer to have jobs brought to them, and it is more humane that this should be done whenever possible.
§ Mr. Wainwright
I want to say a few words about what might happen in the Yorkshire coalfield. The stories that have been told by miners transferred to Yorkshire from other areas have given Yorkshire miners the feeling that there is no hope for the future. Never since nationalisation was introduced have I known such despondency and despair amongst miners. There is a tremendous feeling running through the industry that the Government, whom the men have always believed to be their friend, have now betrayed them. I am not saying that the Government have betrayed them, but communications are deplorable. Even the story of Lord Robens, which may have been 80 per cent. correct, created an impression inside the industry that there was no hope of any guarantee that the jobs of the Yorkshire miners would last for more than 10 or 15 years. This Government, or any following Government, must give a guarantee of this kind when men are to be displaced.
The Yorkshire coalfield is supposed to be an area which offers a great future for the miner, but miners there are asking, "When will it be our turn to be thrown out of work and on to the scrap heap?" What are the Government doing about it? The other day I went into my local club. I dare not repeat in the House the terms of the welcome that I received. I was even offered my old job back at the pit for a few years. There is a deplorable undercurrent of fear among the miners, and the Government must make certain that some form of guarantee is given that alternative jobs will be provided before pits close.
Before a pit closes, the young, vigorous and virile men will have left to seek pastures new, leaving the old men to keep up the village and town life. Why do the youngsters leave in my area of South Yorkshire, even now? It is because past Governments have taken it for granted that in mining districts there is no need for other forms of industry, and that no diversification of industry needs to be encouraged. It is not just this Government that are to blame; former Governments share the blame. They have not done anything about planning. They 300 have allowed the men drift away to the south—to London and to Birmingham—leaving their own areas denuded and forlorn.
Why have not we had more sandwich courses in industry? Small firms find it almost impossible to afford sandwich courses. Miners in my area of South Yorkshire have to seek jobs which provide sandwich courses. Those who go to university or to colleges of technology are lucky in this respect, but very few come back, because there is nothing for them. I hope that from now on the Government will make sure that the rundown in the industry at the suggested rate will not take place until other jobs are brought into the mining districts.
I hope that the Government will take note of what has been said by hon. Members about the cost of fuel to manufacturing industry. The effect of the use of coal in our generating stations is not as has been outlined by the Government in their White Paper. There is room for more coal to be used in generating plant.
I should like the Government to consider the introduction of a motor car factory or plant in South Yorkshire. The nationalisation of the steel industry will affect Sheffield, and in my view my part of the world ought to be given a sheet steel factory, which should be Government-sponsored. The Government did this for Liverpool. A Tory Government built steel plants in Wales and in Scotland to make sure that the impact of unemployment was not too great. I hope that the Government will ensure that Yorkshire will be given some consideration and factual planning to prepare us for the Government's policy, which means a far greater run-down of the industry than should be allowed. I hope that they will have second thoughts and phase out the industry to ensure that there will be no unemployment at the rate of 7 or 8 per cent. which has been allowed in my part of the country.
The coal mining industry has played its part in this nation's welfare and has contributed to the economy between 1939 and 1959. It is now deteriorating, and the Government are allowing too fast a rundown. I hope that they will give more attention to phasing out so that 301 less harm will occur than seems likely at present.
§ 6.32 p.m.
§ Sir Spencer Summers (Aylesbury)
The hon. Member for Dearne Valley (Mr. Edwin Wainwright) pleaded with the Government not only to slow down the reduction in size of the industry, but to create employment facilities where they are needed. He quoted as an illustration the steel industry, where similar attempts were made. In the long run, those he seeks to help would not be helped as he claims, because a great deal of harm was done by those attempts.
It is common ground between the two sides that the industry will inevitably be reduced. This brings us to two elements in the Bill—first, the personal assistance to those affected. I find no fault with the scale of the Government's intentions to deal with redundancy, although, in Committee, alternative suggestions like those mentioned tonight may be thought preferable. Without wishing to detract from the claims of those individuals which rest upon isolated communities dependent solely upon this industry, one should remember that factories in other industries have had to be closed without provision for them on this scale.
Moreover, certain types of employment, after pit closures, make it difficult if not impossible for some individuals to find alternative employment without retraining. Equally, of course, there are those whose eligibility is open under the Bill and who will have far less difficulty. So if we are seeking to do justice as far as possible, we may have to think of more tailormade methods than the broad sweep of the brush in the Bill.
My three main objections to the Bill relate to the extent of the protection of the industry and, first, to the assistance to the Coal Board by deferring closures. I cannot get worked up about this, because I hope that it will be a short-term proposal, not for two or three years but for six or 12 months so as to take us into the summer. A relatively minor cost but possible increase in taxation would be involved.
However, the proposal that the electricity and gas boards shall be subsidised for using more coal takes us on to very dangerous ground. I do not see how it will be possible to decide how much pay 302 ment shall be made from the Treasury to either board without masking any improvement in efficiency to which the customer should be entitled. In other words, where it is suggested that coal consumption above a certain quantity shall attract the subsidy, this will mean that that amount of coal will be regarded as independently and efficiently used by the gas and electricity industries. Thus, a datum on pure quantity alone would seem to preclude a reduction in the cost of gas or electricity by the improved use of coal.
Apart from the extremely difficult calculation, where will this proposition stop? It is said that great personal hardship will follow and that men will be thrown out of work without alternative employment unless drastic steps like this are taken. Winter programmes of road development and widening have recently been introduced to cope with unemployment in certain regions. If this argument is followed in that context, would it not be reasonable to say that contractors on these roads shall receive from the Treasury the extra cost incurred by no longer using mechanical diggers but old-fashioned methods instead, so as to employ more people? Where do we draw the line? Is only the mining industry to have this artificial diversion of real efficient cost values?
§ Mr. Marsh
This is very important, because the whole basis is that if we did not have this extra 5 million or 6 million tons burned this would correspond to a rundown of 45,000 men a year. There is an economic demand for a sizeable coal mining industry in the 1970s, but a rundown of that size would mean that there was not an industry of the right size in the 1970s. Therefore, on economic as well as on social grounds there is an argument for burning the extra coal so as to achieve the most manageable rundown.
§ Sir S. Summers
I understand the arguments, but the basis is that these forecasts can be relied on to this extent. The figures given by my hon. Friend the Member for Finchley (Mrs. Thatcher) showed how false were the forecasts on which former attempts were based.
It has been suggested that it is futile to attempt to forecast further than three years ahead. I do not know how futile 303 it is, but to increase taxation—which is the essence of the Government's case—to take account of something which it is thought may be detrimental in three or five years' hence is a proposition which has not been made out. The same applies to the proposition that a reduction from 155 million tons to 149 million tons will be unacceptable unless something special is done.
In addition to subsidising the production of electricity and gas by coal, another move is to put more coal in stock, and for this the right hon. Gentleman is asking to borrow more money. What would be thought of the owner of a private enterprise firm with bulging stocks who went to his bankers and asked to borrow more money? When asked on what the money would be spent, he would reply, "To put more into stock". When asked, "What will you do with the stocks you already have?", he would have to reply, "I do not know. I cannot sell them".
Whatever may be the case for subsidising electricity and gas in this way, it is futile to attempt to put further coal into stock when it may never be sold because of the deterioration that is likely to follow, thereby adding to the burdens of the taxpayer, who must supply the Treasury with the necessary money it is being asked to lend.
Everybody who examined the state of this country both before and during the devaluation debates emphasised the need to reduce Government expenditure. Despite those recommendations, I do not quarrel with Government expenditure to help the individual. What I do severely censure them for, in the face of that advice—which must be accepted if we are to get any good out of devaluation—is increasing public expenditure still further by the proposals for subsidising in the Bill.
§ 6.43 p.m.
§ Mr. G. Elfed Davies (Rhondda, East)
I will not delay the House for long, because I appreciate that many hon. Members wish to take part in the debate. I hope, therefore, that the hon. Member for Aylesbury (Sir S. Summers) will forgive me if I do not follow him into the many arguments he deployed. I assure him that I would be happy to express a view on them on another occasion.
304 I must, however, take issue with his remarks about the efforts of a private firm which wanted to increase the stocks of a commodity of which it was already bulging with stocks. The hon. Gentleman should recall that such a private enterprise would never be asked to sell its stocks to, for example, the steel industry at less than production price for the sake of the nation. Precisely that happened to the coal industry at the end of the last war.
Never before have I know such resentment, bitterness and despair in the coal industry as there is today. That particularly applies to the people of my community, and this resentment has grown more bitter during the last two or three weeks. Not since the days of 1926, going through to 1939, has there been such resentment, although in those days it was against the old coal owners and the Tory Party, which was then in power. I urge my right hon. Friend to reconsider his remarks about the new fuel policy not slavishly following market trends. I suggest that he re-reads the White Paper.
I welcome the Bill because it makes provision to help meet some of the social consequences and human problems that inevitably result from colliery closures. These problems often affect the life of whole communities and this is particularly true of the mining valleys of South Wales. Indeed, the whole of our life in the industrial valleys of South Wales, and the mining valleys in particular, has been built on, and concentrated around, the pit. When the pit dies the village and the community dies as well—unless new industry is brought in.
I warn my right hon. Friend that the social problems which will result from too rapid a run down of the mining industry will be of such a character and dimension that no Government, whatever their intention, will ever hope to solve them. I urge him to re-examine the fuel policy in relation to coal with an open mind. I was disappointed by his remarks today, because he gave the impression, at any rate to me, that he has already made up his mind and that there is nothing more that he can do. If that is his attitude, I fear that serious trouble will result. He should re-examine the matter with an open mind and his reappraisal should be a real and effective one. Both sides of 305 industry should be consulted before final conclusions are reached.
As I said, the morale of the men in the coal-mining industry has been severely shaken, if not completely shattered, by recent events. The men have no confidence in the future of the industry or, indeed, in themselves. Unless this state of affairs is speedily altered and confidence is restored there will be serious consequences for the nation.
There are two main issues involved in this matter: first, the question of the size of the future coal mining industry; and, secondly, the social consequences of the changes which will inevitably come about. I firmly believe that the policy which the Minister accepts—of a too rapid run down of the industry and of its productive capacity—is bad for the nation. It is based solely on current trends. My right hon. Friend must have another look at this policy—unless he can convince me that I am wrong—because I am still convinced that it is based almost solely on current market trends.
§ Mr. Marsh
My hon. Friend has made this point several times. The whole point of the speech of the hon. Member for Aylesbury (Sir S. Summers) was a criticism of the measures which the Government have taken to distort market trends. Our problem here is not how to run the industry down but how to hold it up. This is precisely the point which the hon. Member for Aylesbury was criticising the Government for doing; for distorting market trends.
§ Mr. Davies
Very little distortion has been done. My right hon. Friend has completely rejected the claim of the industry that, given sufficient time and opportunity to complete its massive reorganisation programme, coal should be, and would be, able to compete with other fuels in certain sections of the energy market.
The whole industry recognises that natural gas and nuclear power will play an ever increasing part in satisfying the energy needs of the nation. However, it believes—indeed, the Minister has accepted this—that the first phase of our nuclear energy programme was too large. He ought to be looking again at the second phase so as to find out whether that, also, is too large. After all, this 306 is only an interim measure before we come to the third stage, and we do not know how final that will be.
Apart from all this, I cannot understand the readiness of the Government to see imported oil hold its share of an increased market in 1975, whereas for coal there is to be a drop of about 45 million to 50 million tons. We must ask ourselves whether we are prepared to see our industrial economy become more and more dependent on imported fuels. It is difficult for me, at least, to understand such a policy, especially in the light of recurring balance of payments problems. Recent events must strengthen the arguments against this policy.
I am convinced that some of the Bill's provisions would be unnecessary if the Government's fuel policy was based on the maximum use of coal, and one which would ensure that natural gas and nuclear energy replaced imported oil, and not indigenous coal. I have always held the view, and still do, that with the increasing overall demand for energy it would be in the national interest to maintain a sound coal mining industry very little smaller than it now is.
The Bill's social provisions are a vast improvement on what we have had in the past. They will be seen by many people as generous, and by some as more than generous, but if we face the position fairly and honestly we must come to the conclusion that there is an overriding and urgent need for new industry in these areas to provide jobs for those people who are displaced. With the increased mechanisation and efficient reorganisation of the industry, it is inevitable that the numbers employed in it will be reduced as time goes on, and our task is to see that everything possible is done to provide the alternative industry necessary to give work to those who lose their jobs as a result.
As my hon. Friend the Member for Dearne Valley (Mr. Edwin Wainwright) has said, increased training facilities must be provided in mining areas which will be denuded of employment prospects. Steps so far taken to this end have not even touched the fringe of the problem—a problem that will increase tremendously over the next four or five years. All efforts to induce industrialists to come into these areas have so far 307 failed miserably to provide the jobs that are needed. In Rhondda, East and in Rhondda, West two factories have been idle for nearly two years. There is an advance factory programme, but we cannot even fill the two factories that are there now, yet we have at present more than 2,000 unemployed in the two constituencies.
The measures announced on 14th November by the President of the Board of Trade are welcome as a further attempt by the Government to deal with this serious human problem. They include further inducements, and apply to special areas within the development areas which will be affected by high unemployment because of colliery closures. The provision of additional incentives—industrial estates, factories rent free for a five-year period, the provision of building grants of up to 35 per cent., loans of low interest, the extension of the scope of grants under Section 4 of the Local Employment Act, 1960—must all be welcomed as a further effort by the Government to meet the difficult problems presented by these special areas. But however well intentioned these measures are, I do not believe that the results will be forthcoming soon enough or in sufficient numbers—
§ Mr. Hunter
Is my hon. Friend aware that Scotland does not fare very much better in this respect? In my constituency, I have three advance factories put up by the Board of Trade, but still with no signs of tenants.
§ Mr. Davies
That situation indicates the gravity of the problem.
If the Government's efforts fail, what more can be done? We should now be considering further measures. We should be considering the setting up of Government-sponsored factories in some of the hardest hit areas to attract industrialists. We cannot afford to wait any longer. There is nothing worse in the world than for people to have long periods of unemployment without any hope of a job at the end, yet that is the future that people see in areas such as mine. We must have far more dynamic action by the Government if communities that can no longer depend on mining for a livelihood are to be assured of reasonable prospects of employment for the future
308 The Bill attempts to meet some of the immediate problems within the industry. It is right and necessary that the limit on the Coal Board's borrowings should be raised to meet the requirements of a changed situation. The Board, as the Minister said earlier, owing mainly to the decline in coal consumption, has been unable to finance as much of its investment internally as was envisaged at the time of the capital reconstruction of the industry in 1965.
Clause 2 goes some way to meet the many criticisms of the shortcoming of the Coal Industry Act, 1965, especially in relation to the social costs arising from the concentration of the industry. Under that Act, the Exchequer proportion of this expenditure was to be half that of the Board in excess of £3.8 million a year, up to a maximum of £30 million over the five years to 1970–71. The effect of this provision can be seen very clearly by the situation in 1966–67, when the total social costs of concentration was £6.8 million. Of this sum, the Exchequer paid £1.5 million, while the Board was compelled to pay the other £5.3 million.
The Bill will make changes, but I would point out that for the Board to exhaust the £30 million which the Minister was empowered to make available under the 1965 Act, it would have to spend £49 million—that is, the initial £3.8 million per year plus another £6 million per year. That was the position under the old arrangements.
The concentration of the industry was a decision made by this Government and should have involved the Government in financial responsibility to meet the cost. To ask the Board to share this cost is unfairly to diminish the ability of the industry to compete with other fuels, and to make the position infinitely worse. Under this Bill, the Minister may meet two-ninths of the Board's actual expenditure on the specified categories up to £45 million over the four years to March, 1971. This is an improvement which the industry will welcome, but it still means that to receive the benefit of the full £45 million the Board will have to contribute £22.5 million or £5.62 million per year.
I ask the Minister to have another look at the categories for which this money is to be provided. I think that some of them could be extended. Perhaps in 309 Committee we could do something on these lines. It would be right, proper and fair to meet the whole of this from Exchequer grants. Clause 3 enables the Minister to establish a scheme for payments to assist redundant workers between the ages of 55 and 65. Many questions have been asked about this in my area. The Minister said that he intends to look at the position of staff grades because of the problems which will arise. I note that the upper age for women is 60, which leads me to believe that women will be included in the ambit of staff.
I am not very happy about this proposal. It will raise many difficult and complex problems. Redundancy will not be confined to those above 55 years of age. What is to happen to the man who becomes redundant before he is 55? What would be the feeling of a man who is 54 and six months and receives nothing while his neighbour who is 55 and one month, and may be living next door, gets the benefits under this scheme? I can imagine that there will be great resentment about the effects. What is to happen to a man who becomes redundant at 55, after three years have passed? At 58—seven years before he is due to receive his. State retirement pension—he has no prospect of future work. If he has no hope of a job it is a bleak outlook for him while waiting until he is 65.
The Government must look at other sections of this problem. The Cambrian colliery closed just over 12 months ago and a number of men became redundant. One came to see me a few weeks ago. His 312 days unemployment benefit has now ended. He has been to the Ministry of Social Security and was told, "Your wife is working and your scale is too high". That man does not receive a penny. That is the sort of thing these men will face at the end of the three years. Unless we deal with these problems, the three years' provision will be of no use. The Government should be looking seriously at these problems.
It is a sad reflection on this industry or any other, and on this Government or any other, that we permit men to be tossed on to the industrial scrap heap at 55 years of age. I put another problem to the Minister. At a meeting last Saturday of many miners' M.P.s in South Wales and the National Union of Mineworkers' Executive, a miners' agent said 310 that he had been informed by a high official of the Board that the intention was, if there were two pits five, six, seven or eight miles from each other and one closed but the other continued, men over 50 would go out of the industry and the men who were younger would go into the pit. We would have another problem of men going out from a pit in which they have worked since their youth. I ask for an assurance that this is not the intention.
Because of this wanton waste of 10 years of a person's life, the waste of manpower, the indignity of a forced life of idleness, I repeat with all the sincerity I can command that the only solution is the provision of work for these people. Have the Government considered the possibility of paying the normal State retirement pension to miners at an earlier age, say 60? Has this been discussed with both sides of the industry? It is worth discussion with the industry if the Government feel inclined to take such a step. It should at least be attempted and there should be consultation with the parties concerned. This could be a contribution towards solving the problem.
Clause 4 raises the question of payment of the miner's pension. The amount now paid, £1 a week, is so meagre and dismal that it should not be considered in this context. The provision in Clause 5, which enables the Minister to reimburse the Board for losses incurred as a result of deferring a pit closure, is to be welcomed. It is only right that where this takes place following an arrangement with the Minister, the Coal Board should not have to meet the resulting loss.
I support the provisions of Clause 6 which empower the Minister to reimburse the Central Electricity Generating Board and area gas boards when they incur additional costs by burning extra coal. I wish that this had been extended. It would have been far better to extend on those lines than to put men out of work. If we could have done so it would have got more men employment and would have steadied the rundown in the industry.
I cannot understand the provisions in Clause 7 for increasing the numbers of members of the Board. I look forward to discussions in Committee about that. I support the Bill, but I hope that during 311 remaining stages the Minister will consider any Amendments which would improve its provisions. The real answer is to ensure a place for coal in the economy at little less than its present productive capacity. When collieries close alternative work should be provided. This is the crux of the problem. The Government would be well advised to tackle that problem with real energy and purpose.
§ 7.8 p.m.
§ Mr. Eric Lubbock (Orpington)
I agreed with those parts of the speech by the hon. Member for Rhondda, East (Mr. G. Elfed Davies) in which he dealt with measures to provide new employment in areas where pits are closed. It is important that we should try to concentrate on that aspect of the argument rather than on sustaining the coal industry at a predetermined level.
As many hon. Members have said, including the hon. Member for Finchley (Mrs. Thatcher), we have not been very good at making predictions. The Ridley Committee predicted that by 1962 we would produce 260 million tons of coal, of which 30 million tons would be exported. Since then a number of other estimates have been made which have all proved to be false by the date for their fulfilment. The discovery of natural gas and the importance of nuclear energy in the generation of electricity are new factors which have invalidated even the White Paper published by the Government as recently as 1965.
I do not see how anyone can be quite certain that during the years up to 1975, covered by the present White Paper, there will not be further developments, particularly in nuclear power, which will lead us to alter plans for our energy policy, probably in favour of a vastly increased nuclear policy as we have the high-temperature reactors coming into operation. By that time there will be no argument whatsoever between the protagonists of coal and the protagonists of nuclear energy, because the gap between the two will be so enormous that the facts will speak for themselves.
Therefore, I think that it is more attractive to do as the hon. Member for Rhondda, East did in the main part of his speech and talk about what the Government should be doing in the coal 312 mining areas to create new employment and to ensure that the advance factories which have been erected there are properly utilised. It is notable that not only the hon. Member for Rhondda, East, but also the hon. Member for Dunfermline Burghs (Mr. Adam Hunter) and several other hon. Members opposite, have spoken about the problem of the advance factories which have been erected at the taxpayers' expense and which have ben idle for so many months. I shall return to this topic later.
The general tone of the Minister's speech was constructive. He showed a sense of realism in his appreciation that in future our energy needs must be determined on economic factors and that only in the meanwhile should we take some measures to adjust the rate of rundown in the coal industry so that the social problems in the areas concerned are minimised. Although agreeing with the general principles of the Minister's speech, I think that we ought to have a faster rundown than is planned.
Here, I agree with the hon. Member for Aylesbury (Sir S. Summers). This is economically possible and I thing that it is socially possible as well, as I will try to explain in a few moments. I appreciate the argument that the Minister advanced that we need to have a coal industry of sufficient size in the mid-1970s to meet the needs which will then remain, but I do not think that the demand will be as high as he expects. Only time can prove whether the Minister is right or I am right on this, so perhaps it would be a sterile argument to pursue.
In view of the amount of money which is being spent out of the taxpayers' pockets, as the hon. Member for Aylesbury said, it is necessary to scrutinise these parts of the Bill very carefully indeed. The Minister said that £110 million would need to be the increased amount of, borrowing to cater for stocks of coal which will be on the ground additional to those that we have at present.
I want to make it clear that I am not arguing that we should create unemployment in the coal mining areas deliberately and then do nothing to create alternative employment for those who are displaced. My attitude on this subject was rather misunderstood when I spoke in the debate on the Coal Industry (Borrowing Powers) 313 Order on 18th July last, particularly by the hon. Members for Chesterfield (Mr. Varley) and for Mansfield (Mr. Concannon). I have tried to explain to them since then exactly what I meant in that speech, because I think that both hon. Members may have misunderstood me.
I never advocated a policy which would mean that everybody who is now employed in the coal industry, or any of those who are now employed in the coal industry, would lose their livelihood. I can appreciate very well the strong emotions which have been aroused in hon. Members who represent mining constituencies when they think of the possible effect of this projected rundown on the mining communities.
I want to try to express my views with rather more clarity than I perhaps managed to achieve at 2.45 a.m. in the debate on 18th July. Let me start with the assertion that coal is now uncompetitive for electricity generation. I know that there are some hon. Members who do not agree with this, but it is as well to face the facts. Some figures are given in the Report of the Select Committee or Science and Technology. I hope that we shall have another opportunity of debating this Report more thoroughly.
It may be worth mentioning in this debate some figures which are given in Appendix 44 to that Report. This Appendix consists of the Report of the group convened to examine the Report on Nuclear Power Costs, a document which was reviewed after the Selsdon Park conference. The Group had the assistance of Mr. Grainger, of the National Coal Board. Therefore, the figures which are contained in this Report are officially approved by the N.C.B. and by Lord Robens, even though he attempted to repudiate them afterwards.
In this document the Ministry of Power asked the question:At roughly what price of coal would it just become profitable to build conventional instead of nuclear power stations?It says that taking into account all the factors it can coal would have to be produced at the pithead at between 1.9d. and 2.5d. per therm. That compares with the cheapest cost of coal purchased by the C.E.G.B. from the Coal Board of 3.9d. at the moment and with an average 314 cost of 5d. So there is an enormous gap already opening up even at the present time between the economics of nuclear and conventional electricity.
I think that perhaps I should underline the fact that the building of power stations will not affect the consumption of coal over the next few years. Rather too much emphasis has been placed on the rôle of the C.E.G.B. and of the South of Scotland Electricity Board in cushioning the mining industry from the effects of the rundown. We are now starting to think about stations which will come into operation in 1973 and 1974, and I believe that the Minister will shortly be giving his approval to those. Whether those stations are nuclear- or conventionally-powered, it will not make any difference in the time scale we are talking about covered by the Bill. The only difference that can arise, therefore, is an alteration in the order of merit of the existing stations so that electricity boards will burn more coal than they otherwise would in their present plan.
It is right for the Treasury to finance the additional burdens which will be placed on the electricity boards and that the consumer should not have to pay this. With regard to the comments made by the hon. Member for Worcestershire, South (Sir G. Nabarro) on the fuel duty. I would say that the same applies. If the fuel duty is primarily designed to sustain the consumption of coal at a given level, why should the electricity consumer have to pay?
§ Mr. Lubbock
I am not entirely prepared to accept that view, and I will tell the hon. Gentleman why. I know that, for once, the Minister would agree with the hon. Gentleman on this point. I put it to him in this way. First, the magnox stations are far less suceptible to the effects of inflation than conventional stations, because the cost of fuel used in their operation is a very small proportion of the total. Most of the cost is the interest and the capital charges, which 315 do not vary throughout the life of the station. Therefore, if the price of coal rose, as experience shows that it does steadily year by year, taking a magnox station and a conventional coal-fired station which were built in the same year, over the whole period of their operation it is very doubtful whether the coal-fired station would come out cheaper, and certainly not in the case of stations such as Sizewell and Wylfa at the end of the first nuclear power programme.
Secondly, this country is developing, ahead of the rest of the world, a sodium-cooled fast breeder reactor which depends upon plutonium for its fuelling. As a result of the very large magnox programme, by the time we are ready to build commercial fast reactors we shall have accumulated stocks of plutonium with which to fuel those stations. Nobody else in the world will be in this very advantageous position, because water-cooled reactors which are in use elsewhere do not produce as much plutonium as our magnox stations do. On the Continent, where they have been much slower to develop the nuclear industry, they have not got anything like the number of thermal stations in operation, so they will not be able to go ahead nearly as quickly as we can with a fast reactor programme. Even Lord Robens admits that when the time comes that is a highly desirable thing to do.
I was talking about the effect on the consumer of the fuel oil tax and various other measures taken to protect the coal industry. One of the provisions of the Bill is to increase the borrowing powers of the coal industry to finance its enormous stocks. The Minister said that £110 million of the increased borrowing was to meet the virtual certainty that stocks of coal will go on increasing over the next few years, even though we already have 30 million tons on the ground. This is a shocking waste of the taxpayers' money.
§ Mr. Marsh
I should just like to get this quite clear. The £110 million is made up in two parts—£50 million is the figure it was expected that the expected rundown in stocks would release, and the fact that there has not been the rundown means that it is not released, and, therefore, the increased borrowing is needed. The other £60 million will be tied up in the existing stocks, 316 making £110 million in all. It is not £110 million for expenditure on stocks.
§ Mr. Lubbock
The sum of £60 million is tied up in the stocks at the moment, and it is proposed to increase the borrowing by £50 million to finance the additional stocks we shall have to hold as a result of the slow-down.
§ Mr. Marsh
The £50 million is the additional borrowing which is required because the stocks did not run down at the rate at which they were previously expected to run down, thereby releasing that capital, which must now be met by increased borrowing. The £60 million is what may need to be tied up in the stocks which are there in the future. I trust that that makes it perfectly clear.
§ Mr. Shinwell rose—
§ Mr. Lubbock
The Minister has given a clear explanation. These are astronomical figures, particularly considering the amount of coal on the ground at the moment, which cannot be sold. If I have done my arithmetic right, the coal would form a pile 14 ft. 6 ins. deep covering the whole of Hyde Park. That gives a much better picture of the amount of coal in stock than if we talk about 30 million tons. According to the Minister, this will go on increasing. Where are we to put it all? It is a shocking waste of the taxpayers' money to finance these enormous stocks.
By sustaining the coal industry at the level at which we are sustaining it, and continuing to pursue this policy over the next few years, we shall deliberately create unemployment in certain other industries because of the cost it will impose on them. That is where I find the Minister's speech inconsistent. He said that ultimately the country must aim at a cheap energy policy, and I am in entire agreement with that. But it is inconsistent with continuing to produce coal in such vast quantities and preventing the changeover to other competitive 317 fuels which would normally have taken place in the absence of some of these measures.
I agree that we must consider the overall social costs, a point which Lord Robens frequently makes. He says that in making comparisons between, say, coal and oil we do not think about the social costs o unemployment that might be caused by too rapid a rundown in the coal industry. But we must pay a great deal of attention not only to the social costs which might be caused by too rapid a rundown but to the social cost imposed on us by having a coal industry of 380,000 people. As I think the hon. Member for Finchley (Mrs. Thatcher) said, the industry causes a great deal of ill-health and damage to those who work in it. In the past year, 145 workers in the mines were killed, over 1,000 were seriously injured, and 937 contracted the terrible disease of pneumoconiosis. In addition, coal-burning spews into the atmosphere every day thousands of tons of products injurious to health, such as sulphur dioxide. Therefore, the social arguments are not all on Lord Robens' side.
If they consulted those who have been working in the mines and moved to alternative employment, people would find that they are not so keen as some hon. Gentlemen opposite on sustaining the industry at a given level. My hon. Friend the Member for Cheadle (Dr. Winstanley), who is a doctor with great experience in the mining industry, said in an article in The Guardian that during the past six years he examined over 1,000 miners who went into other employment. He asked everyone whether he would wish to return to the mines if a job were available, and he says that the answers were always unequivocal and sometimes rude. It is not that people who work in the mines want to remain there indefinitely, so long as alternative employment is provided. They naturally wish to remain if the only alternative is not to have a job. We should consider the preferences of the man working in the industry as well as all the other factors.
As the hon. Member for Rhondda, East said, the provision of new jobs is the crux of the matter, together with the retraining of men going into other industries, and help for manufacturers not 318 only in the development areas, but in areas like Yorkshire. There has been a large mining industry there, but the same assistance is not available to industrialists intending to go there. I do not think that the rate of rundown we expect is unmanageable, even if Lord Robens' figure of 65,000 miners by 1980 is correct. I do not accept the suggestion of one hon. Gentleman opposite that Lord Robens had no right to make the statement if he genuinely believes that that is the figure, and I see no reason to dispute it. The rate of rundown that it would involve over the next 13 years is no greater than other industries have had to bear without any disastrous social consequences.
I was looking at the figures for agriculture from 1954 to 1967, and it is interesting to note that employment in that industry has declined by 327,000 in that period, which is almost the same as Lord Robens expects in coal mining. If his figure is correct. Therefore, it should not be unmanageable; it should not be impossible to find alternative employment for those people.
I am reinforced in that view by an article by Robert Jones in The Times. He asked Lord Robens whether he thought that a rundown of that order was manageable, and Lord Robens replied that it would be if it was not a higher percentage rate of rundown than had been experienced by his industry in the past 12 years. The author of the article comments that that might affect the coal industry, but does not affect the provision of alternative jobs. I am discussing that, and how we are to provide, safe, clean employment for the people who will move out of the industry in the next 13 years.
There is a separate problem in the industry that because of its age structure it will be more difficult to find alternative employment for those people, and I welcome the provisions in the Bill which give financial assistance to those who leave at the age of 55 and over. They are admirable, and I am surprised that they came in for some criticism from hon. Members opposite. We should consider whether even more could be done in the way of redundancy payments and continual benefits for those men who could not be re-employed.
319 The Minister might like to examine what is being done in France and the United States. For example, in France the miners in the Loire coalfield who leave their jobs voluntarily are entitled to a grant of half a month's pay for every year they have worked in the industry. I believe that in the United States, under the pressure of its own mineworkers' union, substantial redundancy payments are made. I have tried to ascertain the figures to compare them with the provisions of the Bill, but even the United States Embassy could not give them to me. I suggest that before we reach the Committee stage the Minister makes inquiries about what is done in France and the United States, to see whether the benefits he proposes to grant are really comparable.
On the question of new employment, if we are building all these advance factories in the areas where miners are being displaced and private enterprise is not taking them up, I seriously suggest—it may surprise the Minister, coming from me—that public enterprise ought to take a part in this. It is shocking that the taxpayers spend a great deal of money putting up advance factories and yet, because the inducements are not attractive enough to private industry, they remain unoccupied collecting interest charges.
I wonder whether the Industrial Reorganisation Corporation might not have an important rôle here. I am not doctrinaire about this. I am determined that the House should do everything possible to provide jobs that will sustain the self-respect of the people who are displaced from the mining industry. It is shocking for a man to be thrown on the scrapheap at 55. I will do anything legal to ensure that he gets a job if he is still capable of working at that age. If, by public enterprise through the Industrial Reorganisation Corporation, or some other means proposed by the Government, jobs can be found which private enterprise is not willing to find, I shall be happy to support the Government.
Coal mining is a dirty and dangerous job which is not suitable to the latter half of the 20th century. Therefore, the more the Government are prepared to do to shift people out of that industry into new places the more they will have my support and that of my hon. Friends.
§ 7.32 p.m.
§ Mr. E. Shinwell (Easington)
Perhaps I ought to explain to begin with that I shall not speak for long. I promise hon. and right hon. Gentlemen that my speech will be very brief, unlike most of the speeches to which I have listened, but that is a matter entirely for other hon. Members
My right hon. Friend intervened twice in the speech of the hon. Member for Orpington (Mr. Lubbock), the Chief Whip of the Liberal Party, who appeared to be in conflict with him. I tell my right hon. Friend that he ought to be careful. I say it with respect. His job is not to convince the Liberal Party. His job is to convince us. Anyway, the Liberal Party is of no consequence. It is only a political encumbrance, an excrescence. So why bother about it? The Members on these benches are the ones that he has to worry about. That must be obvious from the nature of the debate and what has happened in recent weeks.
I am sorry to have to say it, but I have been very disturbed at the nature of the debate. It seemed as if I was in attendance at a succession of funeral orations for the mining industry, relieved, I am very glad to say, by one or two very constructive contributions, particularly that by the hon. Member for Worcestershire, South (Sir G. Nabarro), who at any rate attempted to be constructive. I felt a gleam of hope when I heard him speak in that logical and documented fashion. But, apart from him and one or two other hon. Members, it was a most depressing affair.
I attended a meeting in my constituency last Saturday called by the Labour Party. It was attended largely by miners—local officials of miners' lodges and delegates from lodges. The Minister can make speeches here and outside and even appear on television, and we can have these statistical statements made all round the place, but one ought to hear these miners. They take a lot of convincing. They are certainly not convinced by the White Paper. They accept some of the provisions of the Bill, particularly the social aspects—very naturally, because they are glad to cling to something to anchor themselves. But all these statistical speeches, however logical they appear to be, with all their forecasts and 321 assumptions about the future of the mining industry and the fuel policy of the country, make no impact on their minds. Why? Because of the deep sense of insecurity that exists. The miners simply do not knew where they are.
The miners asked me some questions on Saturday and gave me instructions. I do not care to accept instructions, but I have a deep affection for the people in my constituency, as all hon. Members have for those in their constituencies, but my affection particularly for the miners is because I have gone through the mill with them over a period of about 50 years. As a propagandist advocating nationalisation of the mining industry and in four Labour Governments associated closely with the coal mining industry, I have a fellow feeling for them and understand them. With great respect, it is much easier to understand the miners, how they feel, what their sentiments are and how deep-seated their feelings are when one represents a constituency in a mining area. It is not so easy representing a London constituency, if hon. Members understand what I mean. There is no personal feeling about this; I am not after my right hon. Friend's job, not at my time of life.
I jotted down the questions that the miners asked me. They are very pertinent. They are nothing to do with statistics or White Papers or anything like that; they are just ordinary human questions. I may not be here at 11.30 tonight to hear the answers, but I can read about them in HANSARD, and I hope they will be satisfactory.
The question question is, "How many pits are to be closed in 1968?" Is that not an important question? One can dilate upon statistics and produce documents and compare one section of the fuel industry with another, but this is the question that matters to the men in the industry, the men who believe that they are on the verge of being discarded. I should like an answer to that question.
I come to the second question. By the way, it is not my question. It is a question the miners put to me. They asked, "What effect will increased productivity have on redundancy?" The appeal for years has been greater efficiency—" speed up, inject mechanisation, rationalisation and modernisation" 322 —and the rest of the jargon. The miners have responded, as the Minister will admit and as everybody is bound to admit. No section of industry in this country—I am merely repeating what has been said by others—has done more in the way of productivity than the mining industry. But what is the result? The greater the productivity the greater the danger of being thrown on the scrap heap. Surely that is not the purpose of productivity. Surely that is not the object of efficiency. Therefore, the miners want to know what the effect will be on redundancy if there is greater effort, if they put their backs into it and produce more coal; in other words, increased productivity. We ought to know. Does it mean that more men will be thrown out, or does it mean that they will be retrained?
One of my hon. Friends is reminding me that I promised to speak for only a few minutes. He is putting up his fingers giving me instructions. But before I sit down I wish to put a third question. It is very important also in the opinion of my mining constituents. But it is not so much a question as an instruction to the Minister and the Government. The instruction is: "Before a pit is closed either retraining for a definite purpose or alternative work must be found." That is what the miners say. They put it very simply and logically in their human fashion. I hope that the Minister will take note of it and convey it to his right hon. Friends at the Board of Trade, the Department of Economic Affairs, the Treasury and the rest of them. It is an instruction that has to be responded to with satisfaction.
And that is about all. Except for one thing. I remember, years ago, when I was a Minister, Secretary for Mines, Minister for Mines, and Minister of Fuel and Power—the whole gamut—I remember the estimates of the civil servants. We have very efficient civil servants, the best in the world we are told. If my right hon. Friend is short of a memorandum, just let him ask a civil servant and he will produce one at the drop of a hat. He will provide any number of statistics about the future.
That is what they did with me and from that Box many years ago I gave them to the House and the House accepted them. Only a few weeks later 323 I had to stand at the Box and say that I had made a mistake, they were the wrong estimates. That sort of thing happened frequently. I had to accept responsibility, as my right hon. Friend will have to accept responsibility for his estimates.
§ Mr. Marsh
My right hon. Friend has, in private discussions, warned me of this danger, and therefore in writing this White Paper there is a piece which I inserted, as a result of discussion with him, which says that… the Government will keep policy under continuing review. Thus, if present forecasts prove wrong—as in some respects they certainly will—there is scope for adjustment from year to year.
§ Mr. Shinwell
I have used that myself at that Box. I have said it often—"we will keep the matter under constant review". One either sends something to a Committee or keeps it under constant review. Do not pay any attention to that. Something has to be done about providing alternative work and it can be done.
These advance factories ought to be filled up and if private enterprise cannot fill them—and I am sorry to introduce a political and controversial note—they have to be filled up by Government and State assistance.
§ Mr. Shinwell
No one could be a better adviser than the hon. Member opposite who, as everyone knows, is one of the experts in business organisation and efficiency.
§ Mr. Shinwell
The hon. Gentleman denies it and I accept his denial. I end on that note. All of us on this side of the House representing miners' groups and mining constituencies as I do, are concerned about the future of these men.
There are social provisions in the Bill and some of my hon. Friends have said that they are not good enough. My answer is that I am glad to have the relief of three years for men who are redundant, because in those three years a lot of things may happen. We may be able to bring pressure on the Government, on the assumption that it is the same Government after 1970, and if I get 324 my way it will be the same Government. [Interruption.] I do not suggest that I will be a member of it. I accept the social provisions, and in spite of the funeral orations, the memorial service for the demise of the mining industry, I offer the miners some hope for the future.
§ 7.45 p.m.
§ Mr. John Wells (Maidstone)
I do not have the good fortune to represent a mining constituency like the right hon. Member for Eastington (Mr. Shinwell) but I do wish to speak of the special problems and experiences of the Kent coalfield. It is remote from the mining areas of which so many hon. Members opposite have been speaking from their great personal experience. The Kent coalfield covers 200 sq. miles, about a quarter of that under the sea. It has special problems because the seams are heavily faulted and they tend to vary in thickness, and consequently are not suited to the intensive mechanisation now used elsewhere.
Nevertheless, because of its proximity to markets the Kent coalfield can become thoroughly profitable in future. Last year despite the absence of any major extension schemes in Kent the overall productivity in the four collieries, was 11 per cent. higher than the previous year. This is a better increase in productivity than any other British coalfield. The overall output per manshift in Kent is 30.3 cwt., which may seem small to some hon. Members opposite. It is near the national low figure of 26.5 cwt. from the South Western group, but one must bear in mind that the special geographical position of the Kent coalfield, so near to a market, makes this comparatively low output profitable.
The output of large and graded coal from Kent is on a comparatively small scale, being 55,000 tons and 59,000 tons respectively last year, whereas treated and untreated smalls amounted to 1,375,000 tons last year. The hon. Member for Finchley (Mrs. Thatcher) spoke of the high accident rate in the nation's coalfields. In contrast, the injury rate, and especially the fatal injury rate, is very low in the Kent coalfield. The total number of injuries per 100,000 manshifts worked has unfortunately risen each year in the last three years but it is still low, being at 237 in the year ended March, 1967. Fortunately there have been no 325 fatal accidents in Kent in the last two years.
The financial position of the coalfield has recently shown a very great improvement. The loss of £876,000 of two years ago was reduced to one of £583,000 last year. I should be grateful if the Parliamentary Secretary could break down that loss between the four colleries in the Kent coalfield, because I suspect that it may show that Tilmanstone with its problems of very high temperature, and water, may possibly be the worst and after that Chislet, which is also wet. If my suspicions are correct, and there are to be any closures in the Kent coalfield I hope that they will be only Tilmanstone and Chislet.
I trust that we shall have a firm assurance from the Parliamentary Secretary that the other two collieries, Betteshanger and Snowdown will be definitely kept open for the foreseeable future. The Minister thinks that older miners should have special consideration. I hope that the particular problems of these men in Kent will be remembered. Many of them came from Wales and elsewhere in the 1920s and 1930s, when they were very young men or boys who came with their parents. Many of them live in Thanet and are not very well placed for alternative employment.
Unlike Easington, East Kent is enclosed on three sides by sea and in the redeployment of labour there is only one way by which men can seek new employment. This adds the further social problem of geography to the usual problems of employment. The hon. Member for Dearne Valley (Mr. Edwin Wainwright) spoke of the lack of alternative employment and planning in his area. This applies with even greater force to East Kent. The South Yorkshire miner can move away, north, south, east or west to seek a new job, but in East Kent the miner can go westwards only. He is very restricted and even if he is trained for a new job he has to commute to it, because there is only one avenue of escape.
The Bill contains certain social provisions. If the people who live in council houses near the Kent collieries are to be retrained for other employment, I hope that they will also be helped in finding homes elsewhere if necessary because of their new jobs and that they will not find 326 themselves tied to council houses, thus causing greater difficulty for them. The hon. Member for Derbyshire, North-East (Mr. Swain) mentioned, in an intervention in the speech of the hon. Member for Bolsover (Mr. Neal), that there is to be a meeting of miners with various Ministers in the near future. I share his hope that the Minister of Housing and Local Government will be present, because the dead hand of council housing can be a powerful disincentive to retraining and mobility.
I hope that the Government will not jump to the false conclusion that, because there is full employment in most of the South-East, all is well in the extreme east of Kent. We are frightened that the doctrinaire, anti-South-East attitude of the Government may hamper the realistic redeployment policies which may be needed.
§ The Minister of Defence for Equipment (Mr. Roy Marsh)
It sickens me to hear hon. Members, supposedly representing the miners' interests, pressing for things to be done now when they should have been done many years ago. When the Tories were in office, 366 pits were closed and we lost 277,000 men in the industry and they did not pay a penny to the miners and the Board. Since the Labour Party has been in office, we have lost 123 pits and 97,000 men and have paid nearly £550 million to the Board and the miners.
§ Mr. Wells
I very much regret having given way to the hon. Gentleman as he has only just wandered into the debate. It is absolutely deplorable. I know not from where he came, but I wish that he would go back there swiftly. We in the South-East are worried about the attitude of the Government, who are apparently hostile to the need to develop our area. They imagine that other areas are the only areas where men need retraining and redeployment. It is deplorable that the Minister, who has some responsibility for something or other, should now intervene in this debate.
Hon. Members have spoken of Government help which has been given in providing advance factories and other industrial aids to development. I hope that the Minister who is responsible for the mining industry will realise that this Government aid is just as deeply required in East Kent as in any other development 327 area. The hon. Member for Orpington (Mr. Lubbock), who suffers from the habit of the hon. Member for Barnsley (Mr. Mason) and flits in and flits out again, drew a parallel with the reduction in the number of agricultural workers. He likened the reduction in the number of agricultural workers to the reduction in the number of miners which Lord Robens seeks to effect. But his argument, as frequently is the case, was completely fallacious because he forgot that agricultural workers are spread thinly over the nation, whereas the miners are concentrated in specific pockets, and there is no pocket more pocket-like than East Kent where they have no alternative way out except to cross by the Channel tunnel, whenever it is built.
I hope that special consideration will be given to this area. We in East Kent want an assurance that our two best pits will be kept open. If the other two pits have to be closed, I hope that our friends and neighbours who have been working in them all their working lives will be treated with generosity and fairness.
§ 7.34 p.m.
§ Mr. David Ginsburg (Dewsbury)
Like the hon. Member for Maidstone (Mr. John Wells), all hon. Members who represent mining constituencies naturally welcome the humane contribution which the Bill makes to dealing with the problems facing the industry. It was my intention to say quite a lot, but many of my colleagues wish to speak and, therefore, I will mention briefly two specifically local problems and then concentrate on my main theme.
The specifically local problems are these. Like other hon. Members who represent Yorkshire mining constituencies, I am extremely concerned about the inadequacy of new industry and the speed of introduction of new industry in view of the rundown which we are to experience. My second concern is that, because of the climate which has been created in the industry, capital expenditure for reserves of coal in pits such as those in my constituency could be cut and, therefore, we might be faced with these closures far more rapidly in the next few years; whereas we anticipated that closures would take place in 10, 20 or even 30 years' time. These are 328 very grievous and deep problems. My anxiety about the Government's policy is that the programme for the introduction of new industries to cope with this problem has simply not dovetailed with the urgency of the crisis which has hit the coal industry.
I should like to deal with a rather different point in the rest of my speech. I join my right hon. Friend the Member for Easington (Mr. Shinwell) and the hon. Member for Worcestershire, South (Sir G. Nabarro) in the hope that we are not indulging in the funeral oration of the coal industry. It is vital that the industry should have hope. It cannot and should not be expected to subsist on charity. It must have a solid market. This is where the electrical power programme is so vital, and this is why many of us in the House are very concerned about the policy outlined in the White Paper.
The Minister admits in paragraph 116 of the White Paper thatThe only sector in which it would be practicable to increase coal consumption significantly is electricity generation.Therefore, this is the heart of the problem for the coal mining industry. I welcome my right hon. Friend's proposal for talks with the C.E.G.B. to encourage it to burn more coal until 1971. That is extremely important. All hon. Members, particularly on this side of the House, I am sure, welcome the big programme of coal-fired power stations which is being undertaken. That is on the credit side. But I would emphasise the point which the hon. Member for Worcestershire, South made about the great importance and benefit of siting power stations at the pit head.
However, my anxiety is not for the pre-1971 period. It is difficult in all conscience. But here the Government are already committed to helping the mining industry. My anxiety relates to beyond 1971, and my fear, nay my conviction, from studying the White Paper is that unless the Minister shifts his ground the contribution of coal to electricity generation will cease to grow and nuclear power will take what could have been a growing market for coal.
The reasons for my fear are very simple. In paragraph 98 of the White 329 Paper, the Minister is specific. It is not a question of errors in forecasting. He says:… the generating Boards should base their choice of fuel on an economic assessment of the method of generation which will enable them to supply electricity at the lowest system cost consistent with security of supply and load balancing.There is nothing wrong in that statement. Unfortunately, however, the trouble arises that the Minister and, for that matter. Sir Stanley Brown, Chairman of the Central Electricity Generating Board, have both prejudged the situation, because the Minister is firmly on record as saying that the total generating costs of the first two advanced gas-cooled reactor stations are expected to be lower than the estimated costs for Drax, one of the new coal-fired power stations. If that is the Minister's view, the coal industry faces, on the Minister's doctrine, an extremely bleak future.
This is an area of great uncertainty. My right hon. Friend the Member for Easington and the hon. Member for Worcestershire, South have said so. As the Government Front Bench know, the Select Committee on Science and Technology, which reported last week, and whose Report will, no doubt, be debated on a future occasion, found itself confused in assessing the various contradictory estimates of coal and nuclear power. The Select Committee took the view that before irrevocable decisions were taken, it was desirable in the national interest that there should be a full external independent inquiry into this deep and complicated problem and that the figures should be published.
I know that my right hon. Friend the Minister of Power will say that he has published the figures and that he and his experts are quite satisfied with the figures. I have also looked at the figures and at those of my right hon. Friend, and I remain profoundly unconvinced by the diagnosis which he has given.
I would like to put before the House three statistics, two of which emerge from the Selsdon Park conference. The Dungeness "B" advanced gas-cooled reactor costs .547d. per kilowatt hour. Hinkley Point advanced gas-cooled reactor costs .538d. per kilowatt hour. The interesting figure is that for Cottam coal-fired power station, which is already 330 operating and will be completed in 1970. According to a footnote in the Select Committee's Report and according to statistics provided by the C.E.G.B., the cost at Cottam will be .534d. per kilowatt hour. Thus, on the figures given in the Select Committee's Report, there is a powerful case for arguing that coal is still cheaper than nuclear power.
My right hon. Friend will argue that subsequently to the Selsdon Park conference, experts have produced revised figures. I should like to point out that nobody in the Select Committee had the chance to study those revised figures. They were promised by the Minister in the last fuel and power debate in July. I do not reflect necessarily the views of the Select Committee on nuclear power, but we all, I think, took the view that we received those figures practically on the day that our Report was to be compiled. The Select Committee had some stringent and acid things to say about the Minister in that respect.
Leaving all that on one side, however, let us consider the Cottam figure and the revised Dungeness "B" figure produced by my right hon. Friend. At the end of the day, the difference between Cottam and Dungeness "B", the former being operational in 1970 and the latter in 1971, will be between 1 and 1½ per cent. It is again an unusual pleasure to have to associate oneself with the hon. Member for Worcestershire, South but is a statistical difference of that magnitude, thinking ahead for five years, sufficient for major policy judgments affecting the health of what is still an important British industry?
It is not my intention to knock nuclear power but I am bound to place certain unpalatable but realistic facts before the House. The advanced gas-cooled reactor may be a marvellous technical creation, but it has not yet been in commercial operation and it will not be in commercial operation until 1971. We therefore have very little experience of it. Indeed, Sir Stanley Brown, who has recently been converted to nuclear power and who, in his recent journal, said that the future belongs to nuclear power, told the Select Committee that nuclear power had been bedevilled by rosy promises.
It may well be true that the Government have their experts, because on this 331 issue Ministers are in the hands of experts. They have to be. They are not nuclear scientists themselves. It may be true that the Government have experts who say that the advanced gas-cooled reactor will be economically successful, but I can give my right hon. Friend the names of many scientific experts who do not necessarily share that view and who have important reservations.
I would also like to know from my right hon. Friend whether, in the projections which have been made as between coal and nuclear power, the fullest possible allowance has been made for the beneficial effects of replication, not merely on nuclear power, for which credit is given, but in the construction of coal-fired stations.
It was not my intention to knock nuclear power, but we must also be frank, honest and realistic in this policy. The advanced gas-cooled reactor as a system has not been sold abroad in competition with the Americans and the signs are that we will not be successful in selling that system.
My right hon. Friend may protest that the crucial decisions about electric power generation have not yet been taken and that Lord Robens was being alarmist in talking about 1975–76 and 1980. Those crucial decisions about the future electricity power programme will, however, be taken within the next year or two. I have no doubt of the direction that many of us on this side would like the decisions to take.
During this debate and at other gatherings, there has been a lot of criticism of Lord Robens for his forthrightness on this issue and in defending the miners. Lord Robens can take care of himself, but he is not the only person in the nationalised industries who has been out on a limb and saying things.
I have no wish to attack Sir Stanley Brown. He is, however, the Chairman of the C.E.G.B. and he occupies an important position in fuel and power and in relation to Government policy. He is on record in the Electrical Times of 12th October as saying words to the effect that all classes of consumer are getting out of coal, that coal has become uneconomic for the C.E.G.B. and that the Dungeness "B" costs will be much 332 lower than those of the best coal-fired station even if sited on the cheapest coalfield. If the Chairman of the C.E.G.B., who is the biggest customer of the Coal Board is saying things like that, the Chairman of the Coal Board may be forgiven and people should understand why he feels as passionately as he does.
I hope that arising out of all these controversies and the revisions that the Minister may undertake to the fuel and power White Paper, a better spirit will emerge. I would like to be constructive in this aspect of my remarks. It would be all to the good for the fuel and power industries if the leaders of the National Coal Board and the Central Electricity Generating Board sat down together to see whether a long-term programme could not be worked out and whether some of the prices charged for coal for electricity generation could not be reduced.
There are many new factors in the fuel and power situation today which should be taken into account by the Government. There is the problem of an 8 per cent. Bank Rate. Faced with that, the Minister owes it to the country to look at the excess investment in nuclear power which is being undertaken, as opposed to having a conventional generating programme. I do not believe that the country can afford a programme of that level in the next few years, just as history has shown that the level of programme which the previous Conservative Administration had was too heavy for the country and had to be cut back.
Then we need to think a little about international politics. The Suez Canal is closed and could remain so indefinitely. The White Paper shows great optimism about oil supplies, but it is conceivable that we could be pushed out of the Middle East or that there could be an interruption of oil supplies, such as that we experienced in the Iranian oil fields, which lasted for many years.
Some of these eventualities could come to pass. Coal is a valuable indigenous industry. It has served the nation well, and we would be ill-advised to let it down.
§ 8.11 p.m.
§ Mr. Hector Monro (Dumfries)
I agree with much of what the hon. Member for Dewsbury (Mr. Ginsburg) said in his earlier remarks about the hardship caused 333 by pit closures, and that will form the major portion of what I hope will not be too long a speech.
I do not want to follow the hon. Gentleman into the pros and cons of nuclear power, except to say that I appreciate the balance between nuclear-power and coal because I have a nuclear-powered electricity generating station in my constituency, as well as coal mines.
I support the Bill, because it will go some way towards alleviating the difficulties and hardships which will be suffered by miners in the future with the rundown of the industry. For that reason, I will not be drawn into a debate on the wider issues of fuel policy, but intend to stick very much to the narrower confines of the Bill.
There is no doubt that miners, particularly Scottish miners, thought that the future of coal was secure as the prime producer of power. They thought that plutonium, oil and gas would be used only in support of coal. They saw the two new power stations on the Forth being constructed for the use of coal, and the future seemed secure. But, how dramatically things can change. They have seen this happen particularly in the past few weeks. Before then, they had begun to be concerned when they saw a changeover towards nuclear-powered generation. They could see that the second power station on the Clyde at Hunterston was to be of this type of construction, although Ayrshire has an enormous coal field which could have produced the coal for generation, had it been chosen.
However, I do not intend to argue the pros and cons of coal against nuclear power because it is an enormously complicated decision. What I want to be certain about is that, when the matter comes up for consideration, coal will be given an equal chance with all the other methods. In the same way, I hope that coal is having every chance in the consideration of the new aluminium smelter, because I have seen some interesting figures produced by the Coal Board showing that it could provide the necessary power.
As the hon. Member for Dewsbury said, who can be certain about the future of oil with the international situation as is it? Who can be certain about the 334 future of gas? It is new and no one has yet had a great deal of practical experience with it. Who can be certain about the long-term future of atomic energy? Reactors have run into difficulties, and I should not like to see 100 per cent. reliance put on oil, gas, and atomic energy for the future. On the other hand, coal is infallible. We have enormous stocks both above ground, unfortunately, and below ground, and the Government should not run down the industry too quickly. If they are unduly hasty, they may regret it in the future.
As hon. Members have said, the Bill covers the supplementary payments to workers who become redundant and who have to retire early, as well as for losses involved in deferred closures represented in the use of coal rather than other fuels, although it may be more expensive.
I want to concentrate on the social powers rather than on the borrowing powers, and these must be read in conjunction with the 1965 Act which set out some of the benefits which I have mentioned already.
The Bill makes extra money available, but is it enough? Is enough available each year? It is spread over a number of years, and I want to be certain that enough is available in 1968, as well as in say, 1969 and 1970.
Clause 3 deals with the payments to miners who are declared redundant in the 55 to 65 age group. Other hon. Members have spoken about this subject in detail. However, I have been wondering whether it could not be extended downwards to the age of 50 for surface workers, because I can see that they will have particular difficulty. They will not be able to transfer to other collieries very easily, and they will very likely have longer periods of unemployment, perhaps while waiting for retraining.
How right hon. Members have been to talk about the importance of retraining. I am sorry that there is no retraining centre near to the colliery which is threatened in my constituency, and that the Government have said in answer to my Questions that they do not intend to build one.
However, one point about retraining centres which obviously is giving some concern is that miners will not go to them 335 if they do not see jobs available near their homes after they have been retrained. That is a very valid criticism. I do not want to see miners retraining just to emigrate. I want to see them retrain, and then come back to keep the community alive. That is what we must strive to do.
I want for a moment to refer to Fauldhead Colliery, in Kirkconnel. I have spoken about it in the House on four occasions, beginning in November, 1964, in subsequent coal debates in 1965, and again this year. Although I have put the position of the colliery to the House and to the Ministers concerned personally on frequent occasions, it grieves me that the situation has not changed. Indeed, it has deteriorated, because the one advance factory which has been occupied has cut down its employees by half recently. The threatened closure of the pit has meant that 750 miners are liable to be unemployed in the not too distant future. As I have said before in this House, this is 60 per cent. of the male employed population of the area. I am not saying that nothing is being done. Far from it. I think that the Secretary of State has made some very sensible suggestions and put them into practice. So indeed has the President of the Board of Trade. We have two new advance factories ready, completed and empty. But this, as other hon. Members have said, is such a worrying situation all over Britain, and particularly in Scotland, because we have 26 more, besides the two in my constituency, standing empty.
I welcome the recent special incentives given by the Board of Trade to areas of pit closures. I have been asking for this for some considerable time, because they put back the differential that there used to be between the old development districts and the rest of the country. We have again a differential in favour of these particularly difficult areas of colliery closures.
I am sorry that a representative of the Board of Trade is not here tonight, but there are three points I would put as to why these new incentives are not available for factory extension, why they are not available for service industries, and why they are not available for transfers from one part of a development area to another.
336 It seems to me that when we have reached a position of imminent colliery closure any jobs that can be attracted to an area are valuable. I do not think that one should sit on the letter of the law as to where they come from and what they do as long as they provide valuable employment in areas of colliery closure.
The Scottish Council, the Board of Trade, the Scottish Office and the Joint Committee of Sanquhar and Kirkconnel have all been working extremely hard to bring tenants to these new factories, but nothing has happened yet.
Should this Bill give additional incentives? I do not think, even in Committee, that it could be done, except by the Board of Trade. I hope that the Board will bring in more ideas so that the service industries could count for the new grants and so could the expansion of existing industry. I would like to think that we might have more road construction and perhaps expansion of forestry—all ideas that could bring employment to miners who will shortly be unemployed.
The position in this area boils down to three possibilities: first, that the mine is kept open, which I shall come to later; secondly, that we get new industry; or, thirdly, that we have massive unemployment. The third possibility is quite unacceptable and almost certainly far more expensive to the nation from the point of view of unemployment benefits and so on. It is socially unacceptable because of the misery and uncertainty and the emigration that is likely to follow.
There is a strong community spirit here as there is in all coal mining areas. Why indeed should it be allowed to die? We are here tonight to see that that does not happen.
Why indeed should the shops, hotels and the businesses suffer chronic recession because of a pit closure? There is no doubt that there is resentment in these mining areas about their future, and I quite understand it.
The problem at Fauldhead and some of the other South Ayrshire collieries is desperate in the extreme and the apprehension is heightened by the uncertainty of the future. Some of these collieries were likely to close this winter. Closure was postponed by the Prime Minister's 337 announcement, which took them up till 31st December. The indication was that they would in fact close by 31st March. Is that really so still? Fauldhead has had its jeopardy meeting. I hope that, because of the Prime Minister's announcement and the subsequent change in procedure, there will be no hastening of the closure procedures. I hope that they will go through all their normal stages with the National Union of Mineworkers having an opportunity to put its representations as and when it wishes.
Is this colliery closing because of exhaustion or because it is not economic? The Secretary of State and the Economic Planning Committee must be considering its future. I want to know whether the Secretary of State will press for this colliery to remain open under Clause 5 or Clause 6 of this Bill. I think it is important that this House should know that there will be no more closures of collieries before this Bill becomes an Act of Parliament. Every colliery that is threatened should have an opportunity to continue its existence. I hope, therefore, that there will be no closures before the Bill becomes an Act.
If this pit is likely to be closed because of exhaustion, why has it got an exceptionally high O.M.S. at the moment? This seems to me a rather incongruous situation. Does the Board say that there is sufficient coal in this colliery to keep it open? The miners and the management have done an exceptionally fine job in overcoming difficult geological conditions. They deserve every encouragement to keep the pit open as long as possible. In the same way the N.U.M. has been constructive and reasonable in its approach, and altogether it is a very happy community if only it can remove the shadow of closure.
If it is true that there is coal—and the N.U.M. believes that there is—could Clause 5 be invoked to keep it open? Will there be a subsidy until jobs are available? I am worried about the amount of money available under Clause 5. It is £5 million—or £1,250,000 a year over four years. Knowing the large sums which are involved in uneconomic pits, I am not sure that £1,250,000 a year will see us very far in doing what we want to do, which is to postpone closures until new jobs are available.
338 All this is happening because there is too much coal above the ground and we are not selling as much as the Coal Board would like. Is the National Coal Board making every effort to sell its coal? I continually receive letters from merchants telling me of the difficulties put in their way by the Board and by rail closures. Is the Board doing enough to provide facilities at the pithead for collection by road vehicles? In rural areas such as Scotland, road collection is much more economical than the present arrangements for collection at different centres on the railways which are unsatisfactory to local merchants.
To sum up, the White Paper has caused consternation in the industry and in the union. I am glad that it has been temporarily withdrawn, but will the Bill save miners from years of hardship and misery? I think that this Measure is a step forward, but it must march in step with an expanding economy. I am sure that when the Bill becomes an Act it will be administered generously and humanely, but I would be prepared to see a sum of money equal to that which is to be spent on keeping collieries open being spent on attracting industry to these areas.
A policy of real permanent assistance, and this is what we want in areas of pit closures, can be carried through only in times of buoyancy and expansion. In Scotland we have 86,000 people unemployed at the moment, 2,000 more than last month, and we cannot afford to add thousands of miners to this frighteningly high total. When expansion comes industry will move rapidly into the advance factories which have been built, and this is where they will be valuable, but pits will still close. The further away that date is the better, but new jobs must come before closure. They must not be promises, or be in the pipeline, but must be there for the men to see before they give up their jobs in the pits.
The sooner the Government get their financial policy right—and, unfortunately, that day seems too far away—the sooner will industry begin to expand and give miners in areas of pit closures the hope and confidence which they need for the future. I am certain that it is on this that we must concentrate our real effort. 339 We must bring new industries to these areas, and make sure that they are happy and united communities for as far ahead as they wish to look.
§ 8.31 p.m.
§ Mr. Edward Milne (Blyth)
I am sure that the hon. Member for Dumfries (Mr. Monro) will forgive me if I do not follow him too closely in his well-reasoned speech on the problems affecting his constituency.
There are two points which need examination, and two points which the hon. Gentleman brought out which need underlining, because they affect not only the southern part of Scotland but the northern part of England. If the Bill is to be effective, it must be based on full employment. This is why the measures and the provisions which are the responsibility of the Board of Trade must be the cornerstone of this policy. Indeed, the success of the Bill will be decided not so much by the Ministry, or the Minister, responsible for its introduction, but by Government Departments being ready to change the areas at present occupied by mining communities into thriving industrial communities of the future.
That should be done, not so much for the benefit of the people in our respective constituencies, but for the benefit of the country as a whole, because if the measures on which we have embarked during the last few weeks, and the measures which we have been endeavouring to carry out during the last three years, are to be the success which all of us on this side of the House believe they will be, they have to be backed by the necessary labour force.
It was a little disappointing that the introduction of the Bill, which proposes to help the mining communities, was bedevilled by a controversy which drew the attention of the community away from it. In short, we were unable to discuss the Bill properly until recently because of two factors, both of which have been mentioned today, and on which I do not want to elaborate at length.
There was, first, the premature disclosure, if disclosure it can be called, of the suggested rundown which might take place in the industry following issue of the White Paper and the Government's 340 fuel policy. If those statements had been reserved for discussion after the presentation of the Government's fuel policy, the issues would have been discussed in a calmer atmosphere, and we might today have been better able to look at the alternative solutions which are being provided.
Secondly, it was a mistake on the part of the Government to fire their fuel policy for months and years ahead. The White Paper is a series of guidelines for the future of the fuel industry. No one can say with any degree of certainty that by the early 'seventies or the mid-'seventies the figures and indications that we have been given will necessarily be the right ones.
I was reminded earlier in the debate today, when the hon. Member for Finchley (Mrs. Thatcher) was talking, and we were being told that the question of the social cost of this policy is something that we must not expect to be borne by the whole of the community, that many of the problems and difficulties of the mining communities today arise from the fact that in the mid-1950s we made too optimistic an estimate of the coal industry's place in our future fuel policy. In making that optimistic estimate the Government of the day were too conscious of the prospects for other sections of industry which benefited from this calculation. Looking at the amount of money paid by the coal industry in terms of investment for expansion in the years that followed the mid-1950s, right into the early 1960s, we realise that many of the crippling burdens borne by the industry today arise directly from the events of that period.
I am not endeavouring to make political capital out of this issue. The Coal Board and, to a large extent, the Government of the day, must take the responsibility. I merely touch on that point so as to sound a note of warning when we become too optimistic about the value of the figures with which we are presented.
We are given certain figures for coal tonnages for the years leading up to and beyond 1970. Some people have endeavoured to estimate into the 1980s, but I do not believe that we can do that in relation to a fuel policy. One hon. Member talked about over-optimism about coal. We have a right to be over-optimistic at this stage, because if the 341 full employment policies of the Government, and the transfer and direction of industry into development districts are to take place on the scale required in the next three years, the factories will have to be powered, in the main, from areas where coal-fired power stations already exist, and increased demands on industry in those areas will lead to an increased demand for fuel.
The Bill makes provision for this. Apart from the question of redundancy payments one of the important factors in the Bill is the sum of money provided in order that colliery closures can be halted without cost to the Coal Board, to meet the demands for coal which may arise because of the circumstances that I have described. Also, as regards the electricity industry—others may be affected—if the provision of coal for power stations is extended beyond the normal needs of the period, compensation will be found in the Bill. Those two factors can deal with the situation in a period of change.
Much has been said about miners' reluctance to continue in the pits and to put their families into the industry. This is the situation in mining communities, but no one there is prepared to accept it unless he is assured that the necessary alternative industries are fairly well advanced. This situation is not new in the Northumberland coalfield and my constituency. Many newspaper commentators talk as though it were new, but most of us in coal mining communities have the bulk of our closures behind us. We have been through the process of closures and of being scheduled as development areas, yet our unemployment is still well above the national average.
I must inject a political note here. Despite the long-term prospects for the industry and the unemployment which loomed in my constituency, the main areas affected by closures in the mid-1950s and early 1960s were not scheduled for development until 1961 and, in some cases, well into 1964 and the beginning of 1965. There is, therefore, a great deal of leeway to make up.
I take up the point of my right hon. Friend the Member for Easington (Mr. Shinwell) about attracting new industries. It is all very well to set out the attractions to private enterprise to move to areas of 342 high unemployment and contraction. In my constituency we are grateful that many such industries have moved in, but despite this we still have an unemployment problem. This brings up the solution which we proposed in our 1964 and 1966 manifestos that, if unemployment persists despite the attractions to industry, the Government should step in and there should be Government-based industries in development areas and areas where closures are expected and are taking place. The hon. Member for Finchley said that we should not be doing this sort of thing.
The hon. Member for Finchley said that the payment of public moneys into these areas should not be carried out because the nationalised industry of coal was already run down. Why cannot we use the very resources which we have built up since 1947? Why cannot we use the workshops of the N.C.B. as well as the pit-head buildings and all the ancillary parts of the industry which are still available? Why cannot we even use use the manpower—training officers, industrial relations officers and so on—and all the machinery of the N.C.B. and transfer them into new forms of industry?
§ Mr. Peter Emery (Honiton)
I must correct the hon. Gentleman, because I am sure that he would not wish to misrepresent my hon. Friend the Member for Finchley (Mrs. Thatcher). Twice in his speech he has suggested that she was against the social cost of redundancy in respect of pit closures being met out of general taxation. If he reads her speech in tomorrow's HANSARD he will find that that was not her argument. Indeed, she said that she was convinced that Clauses 3 and 4 were necessary, although they should not be a cost falling specifically on the coal-mining industry alone.
§ Mr. Milne
My point is still valid, because while I accept what the hon. Lady said about the social cost she was reluctant to accept that we should still retain social ownership in the mining areas which are affected by closures. I am certain that, if she were here, the hon. Member for Finchley would not accept this aspect of my remarks, although it is a vital aspect which will be of immense value in dealing with the new industries which are moving into the areas which I and a number of my hon. Friends represent.
343 For this reason, the problem is not only one of building advance factories in the mining areas or even of providing the financial inducements and incentives to bring new industry to them. It is a question of the Government giving an assurance—and I trust that they will give it tonight—that the problem of unemployment will be tackled before the question of pit closures is discussed. These two matters must be handled simultaneously if this problem is to be solved.
In accepting the Bill, we are dealing with an entirely new situation in which we have new methods of handling the contraction of an industry. We are dealing with problems which have been evaded for far too long and we have an opportunity to inject a new spirit into the industry for the future.
Like my right hon. Friend the Member for Easington, I was in my constituency at the weekend and was asked the same sort of questions. One of the main ones—and this was particularly asked by parents of youngsters who have the option of going into coal mining—was whether the industry had any future and if I would advocate them recommending their youngsters to go into mining. I said that, frankly, I would advocate such a course. I told them that, in the new situation that is emerging, if the assurances given in the Bill and in recent Ministers' speeches are put into effect, in addition to bringing full employment to the mining areas, as we have pledged. I could advocate a future in coal mining. In using the resources and facilities available within the framework of the Coal Board we can, as the industry contracts, prepare people not only for mining but for the new industries that will move into those areas in the future. In short, the mining communities must be welded into the new communities that are emerging, under the schemes we have in view.
If we tackle this problem with the courage with which it should be tackled, and consider it properly, a solution can be found, but that can only be done by realising that we are in the midst of a period of tremendous change. This is nothing new for the coal communities, but in the course of that change we must grasp the opportunities. We must give those areas the prospects to which they are entitled, and those prospects 344 must have as their cornerstone the provision of full employment. When we have done that, we can honestly accept the Coal Industry Bill and all its implications in the years that lie ahead.
§ 8.52 p.m.
§ Sir John Gilmour (Fife, East)
Though we should not minimise the difficulties the coalmining industry faces, we must remember that almost all past estimates of its output have erred on the high side, and we have nearly always had to adjust our sights downwards.
When we are considering a Bill that provides many social benefits to cope with the difficulties of redundancy, I should not like to think that we had in any way neglected the safety of those whose livelihood will continue to be in the industry. In my constituency we had the very sad experience of a disaster at the Michael Colliery. I attended a meeting organised by the wives of the mining community in the Buckhaven, Leven and Methil area, at which they repeatedly asked whether enough was being done to provide all that could be provided for safety in the mine.
They quoted what Continental countries provided in the way of safety and rescue equipment in the mine, and they were concerned to know that those people who would continue to work in the industry were being provided with every conceivable safety device that scientific development and the ingenuity of man could give. We have this great problem of redundancy, but we also have a very real obligation to ensure in the mines safety standards of the very highest order.
We have also to consider the question of health in the mining community. Recently, when the Under-Secretary of State, Lord Hughes, discussed with local authority representatives matters arising out of the proposed closure of the Michael pit, he quoted the total number of men—2,184—employed there before the disaster. He gave the breakdown of that total, and it emerged that 189 long-term sick were retained on the colliery books, as well as 12 men who had retired for health reasons since the time of the disaster. That meant that some 200 men out of about 2,000—almost 10 per cent.—were classed as long-term sick.
345 I should like to know whether this percentage is the same at every colliery. Is every colliery carrying on its books such a percentage of people who might be termed long-term sick? We are talking of shifting the responsibility of redundancy a way from the coal mining industry to the community as a whole, but if the industry as a whole is carrying 10 per cent. of long-term sick that represents a very serious burden which must influence all the costs that have to be met in arriving at a contract price for a coal-fired aluminium smelter. If we are to carry 10 per cent. of sick on the books, that is a very serious load. I hope that we shall learn something about that.
§ Mr. Emrys Hughes
The figure is approximately the same in other parts of Scotland and throughout the whole of the mining industry. Dust that the miners swallow inevitably causes diseases, especially in old age. That is typical of almost every mining area.
§ Sir J. Gilmour
I am grateful to the hon. Me Tiber. This was brought to my notice particularly in the figures affecting the Michael colliery. Although the pithead is not in my constituency, many of the miners live there. Perhaps the hon. Member for Fife, West (Mr. William Hamilton) will be able to say more about this pit.
One of the things said last week at the time of the National Coal Board announcement was that the pit was not to reopen but that certain other collieries would continue for a longer period as, one might say, compensation for the fact that these jobs would not continue in the Michael colliery. We have had no details of what these continuation jobs will be. It is most important to see that they are divorced from the Prime Minister's previous announcements about keeping pits open for a time because that was in no way connected with the decision the Coal Board has made, rightly or wrongly, about the Michael pit.
In the Leven area, apart from the rundown in the industry which is going on the whole time, there has been a sudden cut off of 2,000 jobs because of this disaster. This has thrust on to everyone concerned, from the Board of Trade down to local authorities, a very real problem of seeing how to provide extra jobs in the shortest possible time. I take 346 issue very much with hon. Members opposite who say that we can do this by means of Government factories. The delay in doing so would be far too great. The only way we may hope to meet the situation after a disaster of this sort is by Influencing work to go to those factories which exist at present.
New factories have been set up at Kirkcaldy recently for making telephone equipment. If at the same time because of Government economic policy they have to cut back on Post Office work and cut down the amount of work done there, it is no good building another factory when Government policy is taking away work from factories which exist at the moment. We need the influence of the Government to see that, through existing factories in an area, such an amount of work is channelled by which we could hope to bridge the gap until such time as new industries and factories are set up there.
The Board of Trade has already provided two factories in the Leven area, but unfortunately they are empty. I urge the Government to take steps which they have in their power to see that extra work is brought to the factories which exist. If they do that they will be doing the greatest good in meeting this difficult situation. I crossed swords with some of my hon. Friends over this. The Minister of Transport is setting up a vehicle-testing station and it is to be in Perth. It may be said that it provides only seven or eight jobs, but at least that is work. Because the Government made up their minds six months ago that that is where the station is to be, apparently they will not change their minds now. This is what makes people in the area lose faith. They see the Government being too inflexible in their approach. If the Government were to reconsider this decision, they would "show willing" and go a long way to meet the community's demands.
Only by altering their economic approach can the Government hope to fill the empty factories. It is because the economy has been turned upside down that it is not possible to fill them at the moment. I am much more attracted by the proposition that industries which employ many people to serve many other people should be encouraged, because we want to give better service. Instead of 347 being subject to the Selective Employment Tax, people should be encouraged. The load factor of 51 per cent. in the electricity industry has been mentioned. We want to get shift working going so as to increase the load factor. This will not be achieved by handing out largesse in premiums for employment in manufacturing industry. Factories should be made more and more labour-saving. More equipment should be produced to go into new factories, instead of there being a policy of paying more people to stay in existing factories. The mining industry would be most helped in facing these problems by a reversal of the Government's economic policy.
However, I should not like to feel that this is the main consideration. Provisions concerning health and safety in mines would be perhaps the most important of all, and much more could be done in this respect.
§ 9.2 p.m.
§ Mr. Michael McGuire (Ince)
I do not know whether the hon. Lady the Member for Finchley (Mrs. Thatcher) was right in saying that we are discussing the ghost without Hamlet, I want to deal with the reason for the introduction of the Bill, namely, the trends, forecasts and expressions of opinion about energy requirements. The hon. Lady said that that the sole consideration of the N.C.B. or of any other organisation should be its product, by which she presumably meant that it should sell it as cheaply as possible. The tragedy is that such a policy was not advocated when the Board was established. The Board was then told that it should do what the country wanted, which was that it should produce the maximum amount of coal and not worry about profits.
Before I leave the hon. Lady, I want to refer to the question she posed about mining being a dirty, dangerous and—although some people would not agree—in some degree a socially disagreeable and unpleasant job. It is said that in the latter half of the 20th century we should not be sending men down the "glory hole". However, the White Paper does not anywhere say that this is one of the reasons why we are going to slim the industry. This thought is merely trotted out as a pious platitude which we reject. I do not know one miner who sits on 348 these benches or one Member who represents some miners, many miners or none at all, who says that men must be sent down the pits.
When pits are closed without any coordinated policy, miners are thrown on to the dole. All well and good if those whom we represent can get other and better jobs, but no one should lightly cast aside the plain truth that their knowledge of mining is the only attribute that enables them to sell their labour with dignity. That is the most important thing. When we are considering accidents and the 160 miners killed down the mines each year, we must remember that many accidents are caused by systems which, to some degree, start off roof falls. There are accidents to men handling roof supports, and others—sometimes fatal—to men handling materials. But the Board is more and more concentrating on a policy of removing that dangerous element, particularly on its R.O.L.F. faces, where the numbers of men will be reduced and thus the chance for them to become injured will also be reduced. Therefore, let us not have the suggestion trotted out that we are worried about sending men down the pits; that appears nowhere in the White Paper.
I want to go over a little of the history. There has been a tremendous investment in the mining industry, not only in buildings, machines and equipment. More and more, the lives of men and communities were committed. It should not be forgotten, when we talk about costs, that for a long period after 1947 coal was sold in the United Kingdom at below world prices. The hon. Member for Worcestershire, South (Sir G. Nabarro) touched on the fact that when home-produced coal could not meet the demand we imported coal from America at about £10 a ton, and the cost was entirely borne by the Coal Board. It was an open subsidy to British industry. The secret subsidy was the much lower than true market price at which the Board sold home-produced coal.
That was not the only service the nationalised coal industry gave the country. I have mentioned before that the miners could have used their full industrial strength, but they showed forbearance which, I am proud to say, has not been shown by any other section of 349 workers, because they had more to gain from preserving what Arthur Horner has described as the pillars of nationalisation. He told them: "You could destroy this temple. Nobody can resist our legitimate demands."
The miners have a five-day week agreement, which represents a great achievement. I was not working before the war, but I can remember men saying that when they went down the pits in those days they got to the face and, in what we called in Lancashire "caw eawt", they had to come back. They were "called out" and they received no pay. That might happen two or three times a week. They might report for five days and receive only two days' pay. The five-day week agreement was a tremendous achievement and a prized possession. By always considering the country's general economic position, we have that agreement today, and we are still the only workers on a five-day week whose wage rates outside that week are lower than those paid for the basic five days.
The White Paper admits that the strategic argument for burning coal is now not as strong as it was. It says that sources of oil are more diversified, that natural gas is available on our own doorstep and that nuclear energy is once more forecast to work miracles. We have tended, perhaps, to concentrate too much on nuclear energy and to gloss over what we consider to be the difficult arguments of oil. Devaluation of our currency has raised the possible cost of oil, which comes from the so-called backward regions of the world. The inevitable rise in the level of political and economic knowledge among the peoples of those backward regions will result in their demanding higher prices for their product.
I believe that because of devaluation the White Paper is already out of date. It was based largely on assumptions about the future price of oil. These forecasts were rash enough even a week ago. The White Paper sets out in paragraph 72 on page 35 the assumptions on which the Government's policy is based. They include:Oil would continue to be available at a price competitive with coal.350 As I have said, that was a very bold forecast. For the first time the organisation of petroleum exporting countries—which, of course, represents the Governments of those countries—is achieving concerted action to raise its prices for crude oil. This added to the continuing burden of the closure of the Suez Canal alone questions the wisdom of the Government's policy on oil.
If the effect of devaluation is spread evenly over all oil products, fuel oil will become more expensive by comparison with coal to the extent of £1 a ton of coal equivalent. Surely such a radical alteration in the price of fuel whose use is intended to grow by about 30 per cent. in the period covered by the White Paper must mean that the Government will have to consider their fuel policy.
I am now turning over pages of my notes because I realise that a number of my colleagues have waited for a very long time for a chance to speak. I have enough here to fuel not a nuclear power station, but one of another sort. I am slimming my speech down to let some of my colleagues speak, but I wanted to mention the topic of oil.
I turn to the subject of natural gas. I believe that devaluation produces another reason why we should look at the fuel policy, especially the natural gas part. It reported in The Times Business News on 21st November that the American oil companies involved in the North Sea are to demand a higher sterling price for their gas as a result of devaluation. If this happens the price to the consumer will go up. In any event, it is already obvious that the gas industry needs higher prices now to cover the increase in its costs at the oil-based plants that it is presently operating and will be operating until the North Sea gas comes in. All this means that it will be very difficult to achieve the fantastic increase in sales envisaged in the White Paper. Gas has to find as a capital investment £300 million over the next five years. The aim is to double the sales of gas in this country during the next three years. This is a tremendous marketing problem, and it will not be made any easier by the present proposals for big increases in the price of gas.
I want to ask the Government one or two questions on this. What if the market does not take up the gas as 351 rapidly as the Minister hopes? Will he give an undertaking that if this happens he will not seek to achieve his forecasts by pushing gas on to power station boilers at the expense of coal? Will he promise, if the need arises, to use gas instead of oil, thus ensuring that the balance of payments benefits? The coal industry has already lost a big power station market to the magnox nuclear power stations for which there was no economic justification.
Finally, on gas, the Minister has said that gas would have to be delivered to power stations at 2½d. a therm to be competitive. The stuff is unlikely to be brought ashore at that price, let alone delivered to power stations 50 or 100 miles away, and there is no justification at all for using it in power stations.
I said that nuclear energy is once more forecast to work miracles. All previous forecasts on nuclear energy have had one distinguishing feature—they have been miles out. They have been promising something which has been proved to be miles out. As long ago as 1955, in Cmmnd Paper 9389, it was forecast that electricity generating costs per unit set out would be 0.6d. Enough figures have been given now to give that one a kick into touch for good. The programme originally given in the White Paper forecast a 1,500 megawatt to 2,000 megawatt policy. In March, 1957, that was increased to 5,000 megawatts to 6,000 megawatts by 1965.
I want to pay a tribute to my right hon. Friend. On all the occasions that miners and other interested people have for a variety of reasons wanted to meet him, he has always met them and he has asked some very difficult questions. But he has swallowed hook, line and sinker the forecast given to him by people who have a record of inconsistency second to none. He ought to take note of the recommendation of the Select Committee on Science and Technology, which had all the figures except for these. There was an attempt—and the metaphor is apt—to blacken the coal costs as much as possible, to depress them and to make people feel that it was ruled out, that Old King Coal was dead, and, at the same time, nuclear costs were so described that people were fired with enthusiasm
352 When we do ask Questions about the costs we have been given a certain Answer, knowing full well that that Answer was not a complete Answer, and that is an indictment that I place against the Government. My hon. Friend the Member for Dunfermline Burghs (Mr. Adam Hunter) asked another Question. Of course it is known what is said in the House: do not ask a Question unless one knows the Answer. We had a good idea about the Answer, which was that there was another royalty to go on to that figure, so that was not a complete picture. From reading the Comptroller and Auditor General's Report on the Atomic Energy Authority we know that £24 million has been waived—just like that.
If the figures for nuclear generation, capital costs, fuel costs and every other cost were placed before an independent, impartial body, much of the argument would "go for a Burton", and the Minister knows this. The Minister, if he has nothing to fear, should establish this impartial body. It is when resistance is offered that we have the Select Committee pointing out that it wanted to check on the figures but was given them by the Ministry only the day before it went to press. Is that giving all the facts and figures so that the full costs of nuclear power can be placed before the people?
Make no mistake about it. If the C.E.G.B., the linch-pin for Coal Board sales, is written off, there cannot be any nonsensical talk about needing a big coal industry for years to come. What complete eyewash! On 18th July I asked the Minister if there was such a big future—he did not want the term "rosy future" used and I can understand why now—why were we not planning any conventional coal stations after Drax?
I am not the "General Secretary of the Society for the Prevention of Cruelty to Lord Robens". He is well able to defend himself. But it is becoming very fashionable to say that he alone has struck terror into the hearts of miners and made them disillusioned, weary, wandering in the desert. At one of our party meetings I said that that accusation should be levelled against the man quoted by the hon. Member for Dewsbury (Mr. Ginsburg), Sir Stanley Brown, who said that there was no intention of using any 353 more coal, meaning that the Government would have to make him use coal, and they can do that only in the long term by planning conventional stations.
I ask my hon. Friend to look again at these costs. I do not believe that they have been properly costed, and that is supported by the Select Committee. If they have, he has nothing to fear and he can disprove us. In that case, I should be very ready to apologise.
The costs of nuclear stations are being constantly revised upwards. I believe—and for saying this I will probably be accused in the Press of terror and scare tactics—that there is something more ominous in the nuclear power programme which has never properly seen the light of day, and that is the disposal of radioactive effluent. This matter has been quietly hushed up. I know that the Select Committee's Report reassures us that the methods of disposing of this waste are intrinsically safe and that we have nothing to be frightened of.
§ Mr. Hunter
Did my hon. Friend read in the Daily Telegraph yesterday a report about nuclear effluent?
§ Mr. McGuire
My hon. Friend has anticipated what I was about to say. He is very lucky that I let him get in. Oscar Wilde said that he could resist anything but temptation. I have resisted it all day. I wanted to reply to what was said by the Liberal Member, the hon. Member for Orpington (Mr. Lubbock), about the question of nuclear costs, but I did not; I contained myself. Therefore, my hon. Friend has been given a bonus.
The question of radioactive effluent and the article in the Daily Telegraph fill in part of the jigsaw which I am trying to lay before the House. The Russians have accused this country of contaminating the Irish Sea. As an Irishman, I resent that. I do not know whether we have a Scottish Sea and Welsh Sea. If we have, perhaps we can spread this around a bit.
This is being too humorous about a situation which has at the back of it a very dark and gloomy aspect for the people of this country and of the world. I have here facts and figures which would cause great concern to hon. Members concerning the policies about the dis- 354 posal of radioactive waste. There is a contradiction here between the White Paper and the Select Committee's Report. In dealing with radioactive waste, the White Paper states:Although the full costs arising from the provision of uranium and reprocessing of radioactive waste are not at present covered in the trading fund as such, they are expected to be by the early 1970s and by then the Atomic Energy Authority will be recovering all avoidable costs.I have mentioned that the research and development cost has been waived and that the present royalty covers only half the agreed cost of R & D for future development. This will be a far bigger sum in time, because when we go on to the A.G.R. in a few years we shall be disposing of thousands of tons of waste. According to the White Paper, this is not covered. The contradiction arises in questions Nos. 150, 151, 154 and 155 of the Select Committee's Report. A member of the A.E.A. said that it was covered. I hope that this difficulty will be resolved.
There is sufficient evidence from eminent scientists to prove that we should have a very close look at this matter and that if we are not careful we shall let ourselves in for something for which future generations will curse us.
Before I leave the question of atomic energy, I want to say this. When, in the White Paper, the Ministry give comparisons between Dungeness "B" and the new Cottam conventional station, it is not a comparison of like with like, even though they are almost alike. Dungeness "B" still has to come into commission. The most forward forecast which can be given goes up to 1975, yet that station is compared with one which is already in being. There is enough evidence to prove how outrageously wrong many of the figures have been in the past. This further strengthens our case for a further examination of the position.
I want briefly to deal with the question of coal. In tackling our energy requirements, the White Paper starts from the wrong end. Clearly, it regards coal as a sort of residual legatee among the primary fuels. It tells us, first, how much natural gas will be available, then we are told the extent to which nuclear power will grow, and next we are shown the degree by which the use of fuel oil will increase. Coal is left with what is likely 355 to remain. And yet coal is the only fuel available to us which, to quote paragraph 80 of the White Paper, involves us in no direct foreign exchange costs. Surely, the correct approach, and this is even more true after devaluation, would have been to start with coal. The aim should have been to work out how much coal could be produced at a competitive price bearing in mind the savings which it would represent to the balance of payments and in the social cost of running down the industry, in connection with which, I freely admit, the Government have been somewhat realistic.
The consideration given to coal should also take into account that the industry has completed, or very largely completed, its capital investment programme. About £1,500 million has been spent on the Board's capital investment programme, and this investment in public services is paying off in the form of record productivity which we are now seeing. Coal makes relatively small calls on the nation's capital resources, especially by comparison with the sums needed for electricity and conversion to North Sea gas. We should have asked how much natural gas the market is likely to take, because availability and demand are two different things.
We have expressed concern, and I express my concern, about the older miners and about the mining industry by history carrying, to its great credit, although it is to some extent a burden cost-wise, a heavy burden in the number of disabled workers which it employs. Coal mining is an industry which tries as far as possible to take care of those who are crippled and damaged in the industry. Although I am concerned about them, I am more concerned about the prospects for the very young and those who are about to start to work when a mining community is allowed to die. This is one of the saddest aspects about the decline of the industry.
The Government should think again and should plan a properly integrated policy. Such a policy must be comprehensive. It is not enough to say that the coal mining industry is to be slimmed away by market forces in any event. The Government are concerned to promote the welfare of the communities which they govern. We cannot have the Minister 356 of Transport promoting motorways and liner trains and planning a more rational system of transport without her work having an effect on the Government's social planning. She is making possible the site planning of the industries of the future, and I am sure that all hon. Members agree that the way one now judges distance is by time, and how speedily one can get whatever one is manufacturing to an outlet.
We cannot have a Minister of Housing and Local Government planning housing regardless of where people work. Nor can we have a Minister of Education planning schools, technical colleges and colleges of technology regardless of where people live. I want to see the Government use their very great economic power to determine where certain basic industrial enterprises should go.
We have been told that the Government intend to plan new industries to take the place of the redundant mining industry in these areas. On Friday, with my hon. Friend the Member for St. Helens (Mr. Spriggs), I attended a meeting in Wigan of the South Lancs Area Development Committee. In St. Helens, where I live, we have a development district. However, it is no good building factories if no one is attracted there. It is no good planning a scheme of what I call cottage industries. The problem will not be solved like that.
If one wants an example of how to get a big new industry fitted for these times in an area where previously it did not exist, one need look no further than the Conservative-inspired establishing of the Ford motor vehicle plant at Halewood. I believe that the Government can dangle the stick and carrot, but can give a bit of whip, too, and say to industries, "You are going there." The Government have the economic power, and they should use it.
My hon. Friend and I were told that people who start to plan factories in these areas are held up for decisions about land for three, four or five years, even assuming that they can get permission to build the factory. We were amazed to find that the procedure is so slow. Do not let anyone fall for the idea that because Ministers have grandiose plans for so-called cottage industries, the problem will be solved. It will not be without concerted action—
§ Mr. Speaker
Order. I do not want to be discourteous, but there are hon. Members who have been trying all day to catch my eye.
§ Mr. McGuire
Mr. Speaker, I intend to wind up my remarks now. I know that other hon. Members have waited as diligently and patiently as I have.
The coal-mining industry is not only a great basic industry. It sustains a great number of other basic industries, such as engineering and electrical, as well as a host of smaller ones. It sustains communities of settled, industrious and good people. They are too good to be scrapped. They do not want doles, and emphatically they do not want cottage industries in the new industrial estates.
I hope that the Government will think again about the White Paper, because this Bill is almost a direct consequence of it. I hope to be able to get into a future debate, when the Government have a proper White Paper and a properly coordinated economic policy.
§ 9.34 p.m.
§ Mr. Edward M. Taylor (Glasgow, Cathcart)
Mr. Speaker, I will try to get through what I have to say as quickly as possible, because I know that other hon. Members wish to contribute to the debate.
The whole House is always pleased to hear the hon. Member for Ince (Mr. McGuire). He speaks with sincerity, and from personal experience and a real knowledge of the subject.
Bearing in mind what he said about atomic power stations, he may be interested to look at the Report of the South of Scotland Electricity Board where it refers to Hunterston Power Station, pointing out that although it was estimated to cost £35 million, unfortunately the final cost was £60 million. We have discovered to our horror that the most expensive electricity produced in Scotland is from that generating station. On the other hand, we are told by experts that all that will change. We have been told it before, and it underlines the fact that, when we are concerned with experts, knowledgeable though they may be, we should take their estimates with a large pinch of salt.
One point which has been mentioned time and time again about the tragedy 358 of pit closures is that we have them taking place in areas where unemployment is already high. The tragedy is not that nothing is being done; it is that we are having no success. In almost every area where we have large unemployment, or a potential of more unemployment, we have advance factories without tenants. Surely the whole emphasis for the future should be on finding successful industries.
One point that I want to make is solely on the question of the cost of coal. We have heard a great deal from people with experience about the problems of the miners and the communities in which they reside, but not a great deal has been said on the vital question for Scotland which should be considered when we are giving an extra £200 million of borrowing rights to the Coal Board; namely, the price of coal in Scotland. If we are thinking about attracting new industry to Scotland and to other development districts obviously the costs of industry will be extremely important.
The Bill provides that if coal has to be used by the electricity industry in an uneconomic way the extra will be paid by the Government. But this takes no account whatsoever of the fact that in Scotland the electricity boards and the gas boards have been doing this for a long time for social reasons. I was amazed to read an article in The Scotsman stating that an estimate had been made showing that if the South of Scotland Electricity Board were allowed to change over to oil in some of its stations it could save £37 million over the next six years. This is a staggering amount and gives some idea of what is involved in the uneconomic use of coal by the electricity boards. I am not saying that it should not be done, but I think that we should take account of the figures.
The tragedy is that because the price of coal is so high in Scotland, the price of our power is high. I have mentioned electricity where we have this extra. We had 7s. 6d. extra imposed on Scottish coal in 1962 and 15s. extra in 1966. result is that the electricity boards in Scotland have to pay about £1 a ton more for their coal than the Central Electricity Generating Board in England, which is a very considerable extra sum, and they pay £1 14s. 10d. a ton more for coal than the electricity boards in the East Midlands. In these circumstances, before we start 359 implementing this Bill, we already have a serious problem with the cost of electricity in Scotland being so high.
We can see this in another way. The cost of the fuel element of the oil-produced electricity in Scotland comes to about 4d. per therm. Coal varies between 5.3d. and 6.6d., the average being 5.8d. So we have this great addition within the Scottish price of the high cost of fuel.
It affects the gas industry in the same way. The other day I asked a Question of the Minister of Power and was told that the price of gas in Scotland was 24 per cent. more than the average for England and Wales. If we are thinking about attracting new industry to the places of high unemployment, how can that be done when basic fuel costs are so high? The Annual Report of the Scottish Gas Board, which was produced recently, mentioned that the latest increase in the price of coal would cost it £300,000.
These are cases where industry has to pay extra for coal, gas and electricity. We have a situation in Scotland where, despite all the loans and grants and special assistance that we are given for industry and commerce, the dreadful burden of these additional costs is holding back development and preventing industry from coming to some of these areas.
It is not a question of a few pence. My hon. Friend the Member for Worcestershire South (Sir G. Nabarro), who always speaks with great knowledge on these matters, mentioned that fuel costs were only 1¼ per cent. of. the costs. This is not the case in Scotland where we have so much heavy industry. In Scotland our steel works are paying 133s. 6d. per ton for coal. This is 35s. per ton more than is paid in some comparable areas in England and Wales. It is about £1 per ton more than is paid in South Wales, where there is the Steel Company of Wales, Richard Thomas and Baldwins, and Guest Keen, about 30s. a ton more than in Yorkshire where there is United Coke, and in Derby and Notts where there is Stanton, Stavely, and Stewarts & Lloyds.
We are giving the Government power to spend a great deal of money on the coal industry. I suggest that this power should not be given so long as the Gov 360 ernment do not give any sign that they have plans to sort out this deep-rooted problem which affects our future development.
We are considering establishing an aluminium smelter, which is a vital project for Scotland. I sincerely hope that it will be established there, because we need the jobs. What is likely to prevent us getting it. The obvious answer is the price of electricity. In England this is fixed by the Central Electricity Generating Board, which is a relatively simple thing for the Board to do. It has a large market, and it pays a lower price for coal. It can offer a fixed price, which I hope will be competitive. The South of Scotland Electricity Board, together with the North of Scotland Electricity Board, has a smaller number of consumers. If it gives a fixed price as an estimate, and it proves to be wrong, Scottish consumers as a whole, a relatively small body, will have to pay the extra cost.
What is the answer to this problem? It lies in the suggestion which I put to the Minister on previous occasions. We have nationalised industries, in which commercial economics seem to have gone haywire. Why cannot we have a situation in which the nationalised industries provide coal, gas, and electricity at a uniform price to everyone and to every industry within Great Britain? This would be a bigger contribution to industry and commerce in Scotland, and in other development districts, than any other action by the Government, and it would be logical and just. If, for social reasons, the Government wish to keep open pits, or electricity stations or gas stations, let it be a cost on the community. We must get away from the appalling system which is crippling Scottish industry, and which will hold back future developments. Let us agree to have the same price for fuel throughout the United Kingdom, and then Scotland and other parts of Great Britain will prosper.
§ 9.42 p.m.
§ Mr. William Hamilton (Fife, West)
The hon. Member for Glasgow. Cathcart (Mr. Edward M. Taylor) mentioned one or two points with which I agree. It is a pity that in 13 years his Government did nothing about them. That is all that I want to say to the hon. Gentleman at the moment.
361 I want to refer to the speech of the hon. Member for Fife, East (Sir J. Gilmour), and particularly to what he said about the closure of the Michael pit. This pit is situated in my constituency, but it employs men from his constituency, from Kirkcaldy, and from mine. No matter how we plan an industry of this kind, we cannot plan for an unforeseen tragedy such as occurred at this pit, whereby more than 2,000 jobs disappeared overnight, and this in an area where there are very few opportunities for alternative employment.
We regret very much that the National Coal Board has decided not to reopen that colliery on the ground, first, that it would cost £5 million over a period of three years, and, secondly, that it might not be a commercially—not a technically—practicable proposition. We object very much to this decision, and my colleagues and I are seeing Lord Robens about it on Thursday. We think that the colliery ought to be reopened, and presumably the Plan for Coal felt that we needed it. We either do, or we do not. If we do need it, the pit ought to be reopened, and if the Plan for Coal did not take account of it, the plan was wrong in the first instance.
The hon. Gentleman referred to vacant advance factories. Perhaps I might remind him that for many years his party objected to the building of advance factories at all. To me, it seems infinitely preferable to have them ready for occupation for when the economy expands, as very soon it will.
In so far as support for the Bill implies an unqualified acceptance of the policy or forecasts enshrined in the White Paper I oppose it, but to the extent that it seeks to soften the social and economic cruelty of the industry's inevitable contraction I must support it in principle.
I am inclined to agree with the hon. Member for Finchley (Mrs. Thatcher) about Clause 7, and in Committee I shall seek to delete it. There will be a lot of cynicism among miners if they feel that the industry is to be run down at the rate of 35,000 men a year in the interests of increased efficiency, but that there will be an increased number of full-time men on the Board.
It is clear to everybody that to survive as a competitive nation in international 362 markets we must have the cheapest fuel supply, and that does not mean merely in terms of £ s. d. Secondly, we would accept that the coal industry has been contracting for years and will continue to do so for some years yet. Thirdly, other fuels are becoming increasingly available to us, notably natural gas and nuclear power, and, rather less certainly, oil.
Fourthly, ever since the last war the energy market has been distorted by Government action by both parties. The unfettered operation of the law of supply and demand has not been allowed, for very good reasons of social and national interest. Had the coal industry been in private hands in the late 1940s and 1950s its private owners would undoubtedly have held the nation to ransom, as was pointed out by my hon. Friend the Member for Bolsolver (Mr. Neal). In those circumstances we who represent mining constituencies, together with the miners themselves, must thank heaven that the coal industry was in public ownership during those difficult post-war years.
To date, the record of co-operation between the National Coal Board and the National Union of Mineworkers in modernising the industry, and in the painful contraction and concentration of the industry, is without parallel in the entire industrial world. Our coal industry has not been brought to its present lean condition without considerable hardship, pain, unheaval and a bitter sense of insecurity among the miners and their wives and families.
Generally, however, these problems have been minimised by the remarkable understanding and tolerance of the men and managements concerned. With that record, and in view of that background, we must ask why there is so much turmoil today. It is not due to any Communist conspiracy, although the Communist Party will, as usual, try to exploit the situation, nor can it be attributed to the machinations of any tightly-knit groups or politically-motivated plotters.
No, the present upsurge of resentment, on this side particularly, is based on the conviction—certainly my conviction—that the rundown in manpower visualised in the White Paper and the projection forward to 1980 by Lord Robens simply 363 cannot be carried through, given the existing regional policies of the Government, without unacceptably harsh social and economic consequences to the areas and the communities with a historical and traditional loyalty to the Labour Government and to the Labour movement generally. It is like a mother being turned out in the bitter winter's cold by her own son.
This resentment is caused by a Labour Government's apparent determination to base their fuel policy more and more on privately-owned fuels—imported at that, with all the balance of payments implications and the uncertainty of supply, as, for instance, in the case of oil—and less on the publicly-owned sector. My resentment and that of my hon. Friends is based on a belief, which is widespread among the mining communities, that the Government's policy is based on far too many uncertainties, imponderables and suppositions and too much contradictory advice.
For example—and I might give one or two—no one knows what the cost of North Sea gas will be in the short or long term. Companies which are now exploiting that gas will demand an increased price because of devaluation. We do not know how much the price will be or how much the Minister will yield to their blandishments. It is estimated that, by 1975, more than two-fifths of our total requirements will be oil, all from overseas. I am bound to ask: are these supplies secure? What about their vulnerability in case of war? What about the long-term prices for oil? As we depend more and more on oil, so we become more vulnerable to the oil companies. The Minister sought to claim that the balance of payments element was in our favour here. I am not sure, and would like more information before I accepted that.
On nuclear power, as my hon. Friend the Member for Bristol, Central (Mr. Palmer), who is Chairman of the Select Committee on Science and Technology, said, there is an enormous conflict of opinion. If mistakes have been made in the past, who can say that similar and more costly ones might not be made in future? If the Minister persists, as I believe he is, in refusing the impartial 364 inquiry into the costs of nuclear energy, he is bound to come under the greatest suspicion that he or the industry wants to hide something.
Coal's productivity record is better than that of any other industry since the war. Who can tell what further increases there might be between now and 1975 or 1980? It is presumably because of these uncertainties that the Government inserted paragraph 6 in the introduction to the White Paper. They are not quite sure where they are going. The Minister quoted paragraph 6 and I will not repeat it. But, clearly, the Government have left themselves a great degree of flexibility. That, too, is absolutely right. Indeed, almost before the printers' ink was dry on the White Paper the Government were having to have second thoughts, not simply because of pressure from the miners' group on this side of the House but because of devaluation and the accompanying measures like the investment programmes of the nationalised industries and the increased Bank Rate.
Both the Prime Minister and the Minister of Power have said, in other places, that any changes in the White Paper's long-term policy guide-lines would be marginal consequent on last week's devaluation package. I agree with the hon. Member for Worcestershire, South (Sir G. Nabarro) that that need not be so. The Minister of Power said that it might mean an increase of 1 million to 2 million tons of additional exports. It should mean very much more than that.
Be that as it may—and some of us question the proposition—we feel that, in the short-term, there is an unanswerable case for rephasing any contemplated pit closures; for slowing them down over the next two years at least to allow the Government's various development area policies to work. Such a two-year moratorium would enable the economy to gather the momentum for which we have waited so long. During this time new alternative industries would have time to establish themselves in these mining areas, the advance factories could be occupied and manned up and the retraining facilities could be increased to the required degree.
I have a few other suggestions to make. We have a lot of coal lying on 365 the ground and there will probably be more. Indeed, that is one of the purposes of the Bill. It is costing a lot of money. Why not add this as an incentive to industrialists to go to these areas; for example, by promising them very cheap coal over a period of years if they will establish themselves in areas where mines are being run down?
Next, the Government should consider the possibility of establishing if not within the advance factories which are now empty then in other Government-owned and financed workshops, something between the existing idea of Remploy and the ordinary factory. This could be done to provide employment for the middle-aged man. It is not human to say to a man aged 55, "We will give you a big percentage of your take-home pay for three years and, at the end of that time, you will get a £1 a week miner's pension." That does not add to the dignity of these men. They are entitled to much better treatment. They should not simply be given an extension of this sort of guaranteed income in respect of work. They want jobs and not payments of this sort, however generous they might be.
If our post-war experience of the fuel industries, and coal in particular, has taught us anything, it is this: never trust the experts, and particularly never trust Fuel Ministers, however glib and smooth they might be. Between them, they have produced more wrong forecasts than the most hapless football pool punter—and theirs have been a lot more expensive. Revolutions—and especially industrial revolutions of the sort in which we are engaged now—which are carried through without humanity can be as cruel as a surgeon operating with a pick axe.
§ It being Ten o'clock, the debate stood adjourned.
That the Proceedings on the Coal Industry Bill may be entered upon and proceeded with at this day's Sitting at any hour during a period of one and a half hours after Ten o'clock, though opposed.—[Mr. Harold Walker.]
§ Question again proposed.
If the price of that humanity is a further burden on the Exchequer, we on this side should not apolo- 366 gise for that. The mining community deserves no less from the House and the nation. I recall that when the devaluation package was announced, one of the first questions asked from that side of the House was about increased subsidies for the agricultural industry in order to save food imports, and the Minister, almost in a mini-second, said "Yes, we will do that." The Government's reaction to that industry should be not more enthusiastic than their reaction to our request, our demand—the mining industry's demand—that the same treatment should apply in order to get us over this very difficult period of the next two or three years.
§ The Clerk of the Table informed the House of the unavoidable absence of Mr. SPEAKER from the remainder of this day's Sitting.
§ Whereupon Sir ERIC FLETCHER, The CHAIRMAN OF WAYS AND MEANS, took the Chair as DEPUTY SPEAKER, pursuant to the Standing Order.
§ 10.2 p.m.
§ Mr. George Younger (Ayr)
Throughout its course this debate has been most interesting and, at times, most moving. It has taken place against a background of the grave concern—indeed, alarm—felt at the moment in many parts of the country where the main source of employment is in the coal mining industry. It is very appropriate and quite natural that amongst those who have spoken on these most important problems there should have been a particularly strong Scottish representation.
The first thing that must be emphasised, as it has been by several hon. Members, is that we must all accept—and the miners certainly all do accept—that the country as a whole must be able to have the best and cheapest form of fuel for the use of industry. There is no question of that being pushed aside, and the mining communities in particular do not ask for that obvious truth to be set aside. It is accepted that it is essential for the country to have its energy in the best and most economic form.
I want to spend just one moment on the comparative costings of the various types of energy, a subject on which a good deal of time has been spent by a number of hon. Members. I want to add 367 my voice to the doubts expressed by many hon. Members about the costings that have been discussed over the past few months of electricity produced by nuclear power stations compared with that produced by stations powered by other forms of fuel—oil and coal. I do not share all the misgivings so splendidly explained by the hon. Member for Ince (Mr. McGuire), but I have grave doubts whether the costings have been made on the basis of comparing like with like.
I want to highlight a point that has so far not been mentioned but which merits further consideration. I am not at all clear that in the costings of the production of electricity from nuclear power stations adequate care has been given to the question of whether these stations will be able to operate at full load for the full period of their lives. I cannot see that they are going to be able to do this.
It seems that the costings we have had tended to be based on the fact that these stations will be able to operate flat out all the time, yet we all know that inevitably they will not be able to do so for many technical and other reasons, including the demands for electricity and so on. I hope that the Minister will take very seriously the misgivings which have been expressed. I hope he will look afresh at all his figures and the background to them in the comparative costings of electricity and nuclear power.
§ Mr. Frank Hooley (Sheffield, Heeley)
Would the hon. Member agree that a very important element in the cost will be the loss of life through pollution, compared with the lack of pollution through the use of nuclear power?
§ Mr. Younger
That is a most interesting observation. It would be extraordinarily difficult to convert into £ s. d. but it does not add to or subtract from much of what I have said.
I have never felt—not only during the last few months—that adequate examination has been given to the strategic implications of the use of our really indigenous fuel, coal. There are various aspects which I do not think anyone has fully investigated. In time of war it is quite possible for oil supplies to be interrupted and perhaps cut off altogether. That would have grave conse 368 quences for this country. I hope that someone in the Ministry or in the Coal Board is giving careful thought to what would happen with the terrific rundown of the coal industry, to those reserves of coal which are abandoned after being partly worked and reserves which are thought at the moment to be uneconomic to work but which are still known to exist.
Pits are closed before they are completely exhausted. Many people say that once a pit has been closed it can never be opened again. We ought to have some advice—if the hon. Member for Fife, West (Mr. William Hamilton) will forgive me for saying so, expert advice with all the qualifications he made, which I fully accept—about the position of these "dead" coal reserves. In some cases they have been sterilised, some would say, for ever. In other cases they exist but we do not know whether they will be exploited, even at a time when we have not other readily usable fuel available because of war or some other dreadful catastrophe.
§ Mr. Geoffrey Wilson (Truro)
Has my hon. Friend studied the history of tin mining in Cornwall? Many of the tin mines were abandoned before they were completed. It would be too costly to reopen them because of the difficulty of pumping water out of the disused works.
§ Mr. Younger
I am grateful to my hon. Friend. I must confess that I have not studied tin mining in Cornwall but I should like to do so. Perhaps he will invite me to Cornwall to do so.
I want to spend the rest of my time on the most important subject we have been discussing, the social consequences of the rundown of the industry, and in particular the social Clauses in the Bill. I accept entirely, and am grateful for, the generous intention behind those Clauses. I fully agree with those who have said that the Minister and the team which has been advising him have obviously produced these Clauses with compassion in mind and in a really genuine effort to produce a solution to help those in the mining industry who will be out of work. I hope that these generous provisions to enable payments to be made to people retired at 55 will have to be used in very few instances. Great effort should be made to avoid 369 having to tell men at the age of 55 that they are no longer needed and are to be made subject to the special retirement. Although the treatment is generous, we should try to give them jobs instead. After all, 55 is a comparatively young age and many people of that age have many useful years of energetic life before them.
§ Mr. Younger
I thank the hon. Gentleman for that information. There is no suggestion that all of them would be in this unfortunate position. That is a total figure for the whole of Scotland. We do not want to create more alarm than is necessary. We should regard these previsions regarding the age of 55 for retirement as a very last long stop when everything else has failed.
What is needed to solve these problems is a massive effort by the Ministry of Power, the Board of Trade, the Scottish Office, the Ministry of Labour, and other Departments. We are discussing a likely disaster which will fall on certain areas in Britain, particularly in Scotland, where the main source of male employment will disappear in a few years. I am especially interested in the position in South Ayrshire, where the likelihood is, when the closure programme is finished, that 3,000 to 4,000 miners will be put out of work with no other visible industry for them to go to. This is causing concern.
§ Mr. Younger
I have been given it in conversations with people in the National Coal Board, with people in the mining industry, and with people in the National Union of Mineworkers. If it is wrong, I shall be glad to be told so. I hope that the hon. Gentleman is suggesting that the figure should be smaller rather than greater.
At the moment a sword of Damocles is hanging over such areas. Unless something is done about it, as my hon. Friend the Member for Dumfries (Mr. Monro) said, they will find that they have lost more than half of their male employment. The clue to it all is not advance factories, helpful though they are, even 370 though they are empty, because they may one day be useful when industry begins to expand. What is needed in these areas is a completely new industrial base. This usually means the bringing in of a large new industry. This is difficult to do at any time, but particularly so at a time when the economy as a whole is stagnant, when there is no expansion, and when there is a general slackness of industrial activity over the whole country.
I want to make a plea which has been partly answered recently by the Secretary of State for Economic Affairs. For a long time I have been pleading for a recognition of the fact that in these special areas, some of which are very remote, some of which are unattractive to people who do not know them and who come to visit them, it is not enough to say, "We are giving generous grants to industry to come in. We are giving so many per cent., we are giving this and we are giving that". To attract industry to those areas we must be able to say, "We are giving these generous grants, which are more than are given in many comparable places." That is the only way to persuade industry to come to places which they may not think at first sight are sufficiently attractive.
I and many of my hon. Friends and others have been calling for this for quite a long time. Almost every time, I have been told that it would be a retrograde step. But so long as we insist on giving the same amount of grant and incentive all over the board we are condemning areas of particular difficulty to be unable to attract the industries they need. This must be said, and in a way it has been partly recognised in the past few weeks. I suggested it at a conference of the National Union of Mineworkers a few weeks ago, at which the hon. Member for South Ayrshire (Mr. Emrys Hughes) was present. The Secretary of State for Scotland wound up the discussion and pooh-poohed the idea as something that was not worth doing. But within a week or two his right hon. Friend the Secretary of State for Economic Affairs had introduced the special extra incentives for certain special areas which are particularly affected by these problems. I very much welcome the change of heart, but I urge the right hon. Gentleman to examine his plans very carefully and ask whether this should be extended to cover 371 all areas liable to face large amounts of unemployment through the closing of pits.
That brings me to my third point, the question of environment. It is becoming more and more clear that it is difficult to get industries to come from afar to areas where unemployment is likely to be difficult if at first sight the area looks to an industrialist visiting it to be one that carries the scars of many years of past industry. I refer to old abandoned factories, coal heaps and so on. Grants are available to local authorities to get them cleared up, but I wonder whether, with a view to getting the new industry to come into the difficult and remote places, there is a need for the Government to take a rather more positive line in encouraging and leading local authorities into clearing all the derelict areas, so that they look more attractive. In areas where it has been done there have been remarkable results. In Fife in particular there are interesting cases where the appearance of a complete area has been transformed by the improvement of old derelict sites. I hope that the Government are thinking carefully about this. We might find that with expenditure and more positive Government encouragement clearing these areas will have a remarkable effect on the attitude of industrialists whom we are trying to persuade to go to them.
Finally, there is the question of retraining. There seems to me to be a lack of appreciation of the very much accelerated need that there will be for retraining. Hon. Gentlemen on both sides of the House are aware that those places where there have been many retraining courses and so on for miners have proved, what many of us have always known, that miners are very good at picking up new skills when they go to Government retraining centres. Those who have taken the courses and others who have employed people who have been on them can bear out time and again that a retrained miner is a very good employee to have. I hope that we can have more retraining and I should particularly like to see a new retraining centre in South Ayrshire where I think it will be badly needed.
I add my voice to those who have said that the first prize for lack of tact and timing goes to whoever insisted on Clause 7 being put into the Bill at this time. Of 372 all the things to do when the mining industry is being contracted in this way, at this moment of all moments, to decide to increase the number of members on the National Coal Board just about took first prize. I hope that this Clause will be deleted from the Bill.
§ 10.20 p.m.
§ Mr. Alex Eadie (Midlothian)
Coming in at the fag end of the debate, one discovers that it is probably necessary to tear to shreds the speech that one would have liked to make.
I say at the outset that it ill behoves hon. Gentlemen opposite, particularly the hon. Member for Ayr (Mr. Younger), to start lecturing about what should be done, in retraining and in other ways on behalf of the miners. Although I am very critical of the Government—I have had many sharp exchanges with the Minister—I do not quarrel with the concept of the Bill. It is the first time that a Government have introduced such a concept trying to do something positive and concrete about the social consequences. Hon. Gentlemen opposite cannot really discuss this in relation to what they have done in the past.
However, I felt that my right hon. Friend and the hon. Lady the Member for Finchley (Mrs. Thatcher) to some extent tried to distort the argument. The hon. Lady said that she would not let any of her family go down the pit. She is very lucky that she can say that. I say this in the kindest possible way and not meaning to be insulting. Sometimes it depends where and in what circumstances one was born. Sometimes it depends on one's geographical location.
My parents sent me down the pit. I think very highly indeed of them because they endowed me well, especially with health. I used to be a lay magistrate and have seen juvenile delinquents come before the court. I used to think, "There, but for the grace of God, go I." I should like the hon. Lady to think that over. She is very fortunate in being able to say what she says, but many people like me spent 30 years in the mining industry, with no alternative.
The hon. Lady and my right hon. Friend should not try to distort the argument in relation to the debate. The debate is about cost. Nobody is trying to do the miners any favour in relation to the Bill and the consequences of the 373 White Paper. The argument is about cheaper forms of fuel. I was at meetings with miners at the weekend and I know that the miners resent how the issues of costs have been distorted.
Let us look at the logical consequences of the debate. I think everybody will agree—I think that the hon. Member for Worcestershire, South (Sir G. Nabarro), who made a very good speech, would agree—that we could make a funeral pyre of the White Paper, because in this debate it has been destroyed. I hope that there is not even a question of my right hon. Friend's taking it back to consider. He must do away with it completely and think again. The Select Committee on Science and Technology to some extent destroyed the White Paper. Devaluation has destroyed it. The consequence of devaluation in respect of the examination of some of the nationalised industries has destroyed it.
Like some of my hon. Friends in the mining industry, I think it was not good enough for the Minister to try to argue the case for the White Paper when he knows that hon. Members are telling him that he must re-examine the whole question of his White Paper on Fuel Policy. I do not have time to develop some of the arguments, but I believe that if we want to deal with the question of costs it is not a question of the miners trying to develop a commercial argument. I believe that the miners have a case.
The hon. Member for Worcestershire, South put forward a very convincing case on behalf of miners in speaking about costs. Let us examine North Sea gas. The consumers of the country have been taken for a ride over this. Many people bought gas appliances because they honestly believed that the price of gas would fall substantially. The finding of North Sea Gas was blazoned in the headlines in the Press as a bonanza for the future, something which would enable us to look forward to the day when we would have cheap gas and something which would provide us with an indigenous source of energy.
The White Paper tells the consumers point-blank that there will not be any cheap gas for a considerable time. We know that the cost of installing the pipelines all over the country will be about £2,000 mill on. We know that the conversion of gas appliances will cost about £30 374 per appliance. I know because I put a Question to my right hon. Friend about the cost in Scotland, and it will be about £30 million to £40 million. I am worried about the consumers. If we have a very severe winter, will they move over to gas and will they be supplied?
The Government influence market trends all the time and my right hon. Friend is culpable to some extent if something happens and consumers are short of gas because he did not foresee that they could be placed in jeopardy in winter. The Government should influence market trends. The whole argument in the White Paper is that market trends should go ahead without the Government doing anything about it.
Nuclear energy is dealt with in the White Paper. One of the most amazing paragraphs in the White Paper says that in dealing with the new sciences and technologies there have to be some mistakes. The White Paper is inconclusive and is definitely challengeable about costs because we are dealing with a new technology as against the proven technology of coal. This is why we should make a funeral pyre of this document.
I welcome certain aspects of the Bill, because I know, speaking on behalf of the Scottish miners, that it will be discovered that at least 13,000 miners will lose their jobs as a result of the proposed contraction. The issue is not a question of bringing miners from underground to the surface. The issue in Scotland will be that if the White Paper is implemented it will be a job in the pits, or no job at all for many miners. Miners have character and dignity. I say this with authority. They do not want dole, they want work. This is how the Scottish miners are feeling now. It is not sufficient simply to say that they will be carried over for three years when they are aged 55 or over. Men, even at that age, want work. It is a depressing philosophy that we should be thinking of handing out dole.
If the consequence is likely to be severe social effects in Scotland as a result of the rapid contraction of the mining industry, the policy of the Government should be that there will be no contraction until alternative industry is provided. I spell it out clearly: no pit closures unless there is alternative work for the men in the area. The miners are 375 entitled to expect a Labour Government to implement this policy.
I certainly will have something to say if I can during the Committee stage of 376 the Bill. I hope that the Government will think again on the White Paper, which is the reason for the Bill, and will introduce a proper phasing policy and give miners work, and not the dole.
§ 10.31 p.m.
§ Mr. Nicholas Ridley (Cirencester and Tewkesbury)
I am sorry to see that there are still many hon. Members who have not had a chance to make their contributions to what has been, so far, a very worthwhile and constructive debate. I hope very much that we shall have a chance to continue these discussions when we debate the White Paper, which has been withdrawn temporarily only to appear again, we hope, soon so that we can see the effect of devaluation on that document. I hope that we will have the pleasure of hearing the hon. Member for Derbyshire, North-East (Mr. Swain), who has not spoken today, and many others who represent constituencies in the coalfields.
I see the White Paper as a major departure from the whole of the Socialist Party's attitude while they were in opposition. We were told on many occasions that firm targets had to be set for the coal industry. We were told that there were to be no more market trends but that, instead, there were to be firm production targets for each fuel.
The Prime Minister himself said:Let me give an example—fuel policy. Three years ago we called for a national fuel policy, for a figure that the Government would honour for the size of the coal industry. Two hundred million tons was mentioned as a figure for the national indigenous coal industry to work to."—[OFFICIAL REPORT, 7th November, 1961; Vol. 648, c. 921.]That was in 1961. I could give many other quotations of the sort of clamour which was put up from the Socialist Party. But we have not got firm production targets.
The White Paper "illustrates trends, not the setting of targets". That is all that it attempts to do. It attempts to say what would happen to the many rival fuels if there were no further measures of protection or subsidy. I can only say that we know why this has been done. I believe that the Minister was right to do this, because none of the major fuel forecasts has been proved to be right in the past.
The Ridley Report, to which my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) referred, forecast a demand for 260 million tons of coal 378 by 1962, but in the event it was only 180 million tons. It is surprising that there has been no mention of the National Plan, the document to which no true Socialist dare refer nowadays, which forecast that in 1970 there would be a consumption of 175 million tons of coal. Precisely two years later, that document has reduced the estimate to 146 million tons, a drop of 29 million tons in the estimate for coal after only two years. That shows how wrong one can be. That applies to the future, too.
There is a new development, involving the use of what is called a fluidised bed, which is a way of transforming coal into power station heat, and that is one means by which coal consumption could be increased in the future. Equally, my hon. Friend the Member for Ayr (Mr. Younger) may be right when he questions nuclear costings, because they could turn out to be wrong.
§ Mr. Ridley
The hon. Member for Ince (.Mr. McGuire) reinforces my point. The effect of their being wrong would be that the guesses in the White Paper would again be falsified.
I thought that it was a little ungallant of the Minister to say in his speech that it was "incredible, almost unforgivable", that no attempt was ever made to establish trends in the fuel industries by the Conservative Party when in office. After what I have just said, is it surprising? But, of course, it is not true. We tried to estimate.
The Government have come round to the Conservative Party's view, which we held throughout our 13 years in office, that fuel cannot be forced to conform to a plan, but that one can influence market trends by various subsidies, protections and other devices. However, the inevitable conclusion is that coal will run down and will continue to run down.
Mr. Bob Brown (Newcastle-upon-Tyne, West)
When the hon. Gentleman talks about influencing market trends, would he not agree that the Conservative Party's about-turn on the proposed electrification of the east coast main railway line in favour of dieselisation came as the greatest stab in the back to the miners?
§ Mr. Ridley
If the hon. Gentleman will forgive me, I must stick to coal. Transport is not the subject of the debate. I do not accept what he says, but it does not tie in with the case that I am trying to make, in any event.
Continuing at the rate referred to in the White Paper, we shall see a decline from the present level of production to 120 million odd tons by 1975, and 80 million tons by 1980. Lord Robens has been criticised for projecting the trend into the latter part of the century, but he was only trying to do a little forecasting. As far as I can make out, he took his figure of 80 million tons by 1980 from the Minister's speech in this House on 18th July, when he said: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 like to back figures that far ahead too heavily."—[OFFICIAL REPORT, 18th July, 1967; Vol. 732, c. 1875.]The figure came from the right hon. Gentleman himself, so hon. Members must not be too hard on Lord Robens for taking it up.
§ Mr. Ridley
I will come to that later in my speech, if the hon. Gentleman will allow me.
Turning to labour, here again, the Minister has been a little churlish with the Conservative Administration. He said in a radio interview when the fuel plan was first launched:It is a great tragedy that it was not tackled perhaps five years or so ago.By "it", he meant the coal industry's problem. But, looking at the figures, one finds that, for the last six years of Conservative rule, the mining industry was run down by an average of 33,000 mineworkers a year. The figure dropped from 699,000 to 502,000. In the first three years of Socialist Government, the industry was run down at about the rate of 31,000 workers a year. So how the Minister can say that the Conservatives did not start to tackle the problem, when we were running down at a quicker rate than under his Government, I do not understand.
The trend set by the White Paper envisages a further pace of rundown of 380 35,000 men a year from now on. That brings us to 300,000 by 1970, to 125,000 by 1975, and to 55,000 by 1980. So, again, Lord Robens was on the generous side in suggesting 65,000 workers, if this trend setting is all that we have to go by.
I do not think that Lord Robens is at fault for having made his projection, which I believe came out of the Selsdon Park conference.
§ Mr. Ridley
The hon. Gentleman makes my case. We can place no reliability on those figures at all, but there is no reason why Lord Robens should not do the same extrapolation as hon. Gentlemen themselves have done.
The point is that for the last nine years miners have been absorbed into the economy at the rate of about 30,000 to 35,000 a year on average. Lord Robens, in the current Annual Report of the National Coal Board, says:With the co-operation of the trade unions, however, and by careful planning, the closures were brought about without major industrial disputes or serious redundancy. The Board believe that, with the Government's cooperation, successful redeployment can continue.If the Coal Board feels that it can continue to run down the industry at that speed, we should help and encourage it to do so.
The point is that it is not for the right hon. Gentleman, the Minister of Power, to provide jobs—it is not his rôle—it is for the Board of Trade and the Secretary of State for Economic Affairs. These are the Ministers whose responsibility it is to provide jobs. Nor is it the responsibility of Lord Robens to provide jobs. Provided that he is satisfied that he can contract the industry at the speed suggested in the White Paper, without having serious under-manning problems in any of his major coal producing areas, I believe that we should not quarrel with the fuel and power side of this White Paper.
Many hon. Gentlemen have voiced very real and understandable fears about the 381 effects on employment in their own constituencies. There was much force in many of the things that were said. We can, I think, draw comfort from the figures which the Minister gave, that, despite a run down of over 30,000 to 35,000 on average, there was no year when redundancies exceeded 4,000. So, out of some 35,000 people leaving the pits, with reabsorption, retirement, retraining, and finding new jobs, the average level of redundancies was between 1,000 and 3,000 a year. I ask the Parliamentary Secretary if he can tell us what he expects the actual redundancies to be if his plan is put into effect in the future.
My hon. Friend the Member for Fife, East (Sir J. Gilmour) and the hon. Member for Fife, West (Mr. William Hamilton) asked about Michael's colliery, and my hon. Friend the Member for Dumfries (Mr. Monro) and my hon. Friend the Member for Ayr asked about the pits in the Dumfries and Ayr coalfield. I am sure that they will not expect me to go into the provision of alternative jobs in these areas of Scotland, which I cannot be asked to say much about. But I think that these points must be taken seriously by the Minister responsible for regional development in these areas.
My hon. Friend the Member for Maidstone (Mr. John Wells) made a very strong plea for the Kent coalfield.
§ Mr. Emrys Hughes
I understand that the hon. Member for Ayr (Mr. Younger) and the hon. Member for Dumfries (Mr. Monro) were arguing against the White Paper. Is the hon. Gentleman in favour of the White Paper?
§ Mr. Ridley
I thought that my hon. Friends were arguing in favour of finding further employment for their constituents who would be displaced by the inevitable run-down of the coal industry. I think that all of us can join in arguing about the extreme importance of replacing these jobs in the coal mines by other jobs. I only suggest that it would be wrong for me to pursue this subject at length, because this debate is about fuel, not alternative jobs.
We want "cheap energy". The Minister said this, the White Paper says it, and so do I, but we have not got it. The cost of delivered heat to power stations in the United Kingdom is 4.28d. 382 per therm, whereas in the United States it is 2.16d. We have this enormous burden of very high energy costs before we start, and I think that we all want to bring down the cost of energy for our factories and for exporting. I am glad that the Government have rejected the idea of a general subsidy on coal. I think that it would have been an intolerable burden on the taxpayer, and would not have done the trick.
The point of all protection measures to help the coal industry must be to equip it to produce coal at a really competitive price, and to reduce itself to the level and the size where it is no longer necessary to cosset or to help it with financial measures of any sort. Nobody wants to perpetuate men working underground for a year longer than is necessary, and I believe that we can all join in wanting to see the end product, a coal industry of a size and importance which can stand on its own feet, and which will employ the minimum number of people, provided that the transition between now and then is made without hardship and suffering. I think that we can look at the detailed provisions of the Bill to see that they fit into this pattern.
I should like to make a point, first, on the extra price of fuel oil, which will result from devaluation. The rumour in the papers is that the Minister has said that there will not be an increase in the price of fuel oil. If it goes up by 1d. or 2d., this will, in itself, represent a large increase in the protection afforded to coal. As the Cabinet has apparently taken back the White Paper to reconsider it in the light of devaluation, we want to know, before it comes back, what will be the rise in the price of oil. Perhaps the hon. Gentleman can tell us that. I want to know what rise is expected in the price of fuel oil, because this will have an important bearing on the protection which coal will receive. If there is to be no increase in the price of fuel oil, the White Paper can stand, and there will be no change from what we have read in it.
I want, now, to say something about the tax on fuel oil. Some of my hon. Friends, among them the hon. Member for Worcestershire, South, have expressed doubts about it, and I think that there is some doubt about it among hon. Gentlemen opposite. It is a tax which not many people think is right, though 383 many will support it so long as the coal industry is in the difficult state through which it is going. I believe that there is very little elasticity of demand here, and that if we change the fuel oil tax, either upwards or downwards, we will make little difference to the consumption of coal in a few years hence, because people have installed plant which has to be fed with either oil or coal, and there is nothing that we can do to change that situation.
Clause 2 contains provisions for grants for increasing mobility, and takes over the more than £3.8 million arrangement whereby the N.C.B. can do all sorts of things to improve training, to improve mobility, to find new houses for redundant miners, and to move miners to new coalfields, and we all genuinely welcome it. The Minister said on 18th July:These proposals are not just more protection for coal, but a measure of social justice and economic realism."—[OFFICIAL REPORT, 18th July, 1967; Vol. 750 c. 1873.]I think that we can class Clause 2 in the bracket of economic realism, because it is clearly defined to give jobs to miners in areas where there is a shortage, and to improve the general arrangements for mobility of labour in the country.
My only question on Clause 2 is, why is this confined to the coal industry? Why should not we extend the same sort of arrangement to other industries? If a lorry driver, or a textile worker, is redundant, it is pretty galling to him to see special and very good arrangements being made for redundant coal miners, when he is left without help. Although the Clause is welcome it is a pity that it is not part of general legislation applying to all redundant workers, because it would have a stimulating effect upon the whole economy.
Clauses 3 and 4—which we might call the mini-pension Scheme for miners—have been criticised by many hon. Members, including my hon. Friend the Member for Aylesbury (Sir S. Summers), my hon. Friend the Member for Ayr, the hon. Member for Bolsover (Mr. Neal) and the hon. Member for Dearne Valley (Mr. Edwin Wainwright). Both the latter Members raised doubts about the wisdom of supplementing a man's wage at the age of 55 for a considerable period without asking anything particular in return.
384 I share these doubts. I do not go so far as to say that we should not have the Clause, but the question must be answered: are we to provide early retirement or similar benefits, such as are enshrined in the Bill, only for miners at the age of 55? There are special arguments, but the borderline cases and the demarcation which the Clause sets up are matters which we will have to consider very carefully in Committee.
Clause 5 reimburses the Coal Board for delaying pit closures, and as far as I can see fits nowhere into the policy. It is neither social justice nor economic realism. Quoting from the White Paper:These exceptional measures are designed to meet the problems of this winter, and thereafter the closure of collieries will be in accordance with the planned centralisation of the industry …".We know that these 16 collieries were reprieved because the Prime Minister gave way at the last moment. In a way, it is attractive that he should be sympathetic to the plight of those who work in these collieries, but the House must ask whether prevaricating and giving way as economic realities face these areas is in the best interests of the miners and their communities. They will have to close six months or a year later. It only puts off the evil day. In the meanwhile, between £5 million and £8 million will have been spent, which might have been better employed in providing alternative jobs or communications, or factories for the people who will be made redundant by the closures.
I wonder whether this will help. There was an article in the Financial Times which went into the exact situation in one colliery—Huncote—which was reprieved. After a detailed study, and after talking to many of the men involved, the writer of the article concluded, speaking of the reprieve, that it was highly debatable whether it achieved anything at all.
Lastly, there is Clause 6, which subsidises the Coal Board to produce cheap coal to increase the amount of coal burnt in electricity generating stations. I agree that if this must be done it is right to do it by subsidising the Coal Board rather than by asking the electricity consumers to pay. My hon. Friend the Member for Aylesbury asked some pertinent questions about the way in which to assess the cost 385 of the subsidy, and how the C.E.G.B. would present its acounts. We would like answers to those questions.
I suggest that the expenditure of up to £45 million by forcing these power stations to burn less economic fuel, which will give a reprieve to a small number of pits may not be the best way to help the miners. In an interruption during the speech of my hon. Friend the Member for Aylesbury the Minister said that it would mean that the rate of decline would accelerate from 35,000 to 45,000 men a year if this provision were not made. That is an increase of 10,000 men, who in effect produce 6 million tons of coal, but that is for one year only. We are spending £45 million to keep 10,000 more men in the pits for one year. If the Clause were not passed, after the first year the rate of decline would go back to 35,000. So the Minister will find, if he does the sum again, that this is not so—
§ Mr. Ridley
Yes, because, in the first year of producing 6 million more tons of coal than otherwise, 10,000 miners would be retained instead of redundant, but the decline would then go on at the same speed as before.
There are grants of £133 million and loans of £200 million in the Bill. The disappointment is that the Coal Board has been unable to meet its promise that its capital debt would not increase because it would finance colliery improvements out of its surplus. The National Plan rashly promised that there would be no new finance in collieries in the quinquennium, but we are already bumping up against the limit. We know that the main cost is the increase in stocks and that we must now produce £60 million for possible increases in stocks.
I would like to ask the Parliamentary Secretary, in that case, why only £25 million is mentioned in the White Paper as the capital requirement for financing the increase of stocks. Many of my hon. Friends have warned that it is unwise to go on increasing lending when stocks have reached the very high present level, and there is no doubt that no private enterprise banker would lend money when stocks were increasing and production was not being cut so as to 386 convince him that it was intended to retrench.
So we are asked to pass the Bill, and, with all its imperfections, it is right that we should. We can argue some points in Committee. The effect on the Labour Party of the Bill has been evident tonight. The mining industry has been the bedrock of Socialism in many parts of the country; the hon. Member for Fife, West even talked about an old mother turned out by her son to winter in the cold.
The Minister is right. He tried hard to show a quarrel between him and us, and that we want a savage policy while he is supporting his hon. Friends. But this is not the case. He is pursuing a courageous policy of trying to run down this industry at at least approximately the sort of speed which we would do—[HON. MEMBERS: "Watch it!"] I do not believe that the miners really want to send their sons down the pits for generations to come—
§ Mr. Ridley
The hon. Gentleman may well find that they do not continue to send them here after the Bill goes through.
I agree with the Minister that no hon. Member would send his son down some of the pits which he wishes to close. We are all agreed on this. I met a miner from Cowdenbeath in the train yesterday who said that he had never seen such prosperity now that the town no longer had only one employer in the form of the Coal Board.
The new-found prosperity which new jobs and industry can bring would be far better than continuing to keep these communities of men living dirty and dangerous lives underground and contracting diseases and taking risks from which we would all like to free them. The policy is not a funeral ovation. It is a humane attempt to bring to an end the keeping of large numbers of miners underground and, as such, I commend it to the House.
§ 11.1 p.m.
§ The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson)
I listened with care to the 387 remarks of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) and tried to establish clearly what policy he was either accepting or rejecting not merely on the White Paper, but on the Bill itself.
The hon. Lady the Member for Finchley (Mrs. Thatcher) made it clear—I hope I am correct in saying this—that she accepted the basic objectives of the Bill. The logic of that is that one must support the efforts of the Government during the transitional years to come—between now and 1970–71—to keep up the coalburn, and that is implicit in the Bill. I understood that that was being accepted by the hon. Lady.
However, the hon. Member for Cirencester and Tewkesbury appeared to express a different view in the latter part of his speech. In fact, in rather beyond the nose terms, or by his tone of voice, he seemed to be questioning at considerable length the whole objective of the policy implicit in the Bill. We must wait to see whether we have the more humane and progressive acceptance of the policy which we are putting forward in the Bill, as expressed by the hon. Member for Finchley, or the views implied, if not explicitly stated, by the hon. Gentleman.
The hon. Gentleman's views are far more in line with the sort of splurge put out by the Conservative Party's Weekly News which, as recently as August, stated that the Labour Government were being attacked by the Conservative Central Office for pursuing the policy which the hon. Member for Finchley accepted. The publication stated:What Governments should not do is to use their powers to force trade and traffic into channels that it would not normally choose, in order to serve some other interest.Socialist planners, with their itch to interfere, find this temptation irresistible and defend the waste of time and money by saying it serves a social need.… However, it is perfectly possible … to force a nationalised power-station to burn coal instead of a cheaper fuel.It went on to instance other examples in criticism of the very policy implicit in the Bill, the policy which the hon. Member for Finchley accepted. I hope that we will not have this sort of stuff being shoved around the country, printed on the hoardings and uttered from soap boxes, to stab this policy in the back.
388 I come to some of the points raised in the debate. Understandably, this has been rather more of a general debate than one would normally expect to have on a Bill of this kind. It has inevitably gone into the general sphere of the White Paper on Fuel Policy which the Government recently published and which—it may be just a question of semantics but I should, perhaps, make this clear—has not been withdrawn.
Certain figures and implications are being looked into in the light of the post devaluation period. We hope to be able to make a statement, or have further discussions on the basis of such an evaluation, in the not too distant future. It would be wrong to assume, for example, that any increase in oil prices which might arise from devaluation would affect to any notable degree the variations or margins set out clearly in the exercises described and analysed in the White Paper.
§ Mr. Arthur Palmer (Bristol, Central)
How does my hon. Friend envisage the not-too-distant future? Is it to be a long time or a short time?
§ Mr. Freeson
I would say weeks, but it is for my right hon. Friend to decide to bring it to the House, if necessary. I thought that I had better make that position clear before dealing with some of the points that have been made both on the policy background and on the Bill.
One of the main questions that have been raised by a number of hon. Members is how far the policy now established in the White Paper upon which the Bill is partially based is different from the treed or market policies of the past. It has been criticised as being no great change from the past, but there is a serious error in that view. The kind of technique, the mathematical and economic analysis, described in the White Paper as being the method that has been developed, and is being developed within the Department, makes a major contribution towards economic planning for the future—
§ Mr. McGuire
Is the Parliamentary Secretary really saying that his Department intends to fly in the face of the very strong recommendation about a proper analysis of the true cost of all 389 these fuels? Does he say that the Department will completely ignore that recommendation?
§ Mr. Freeson
I am not flying in the face of any such recommendation, but whatever else the Select Committee on Science and Technology may have said in other respects, it made a much larger nuclear programme one of its main recommendations.
As I was saying, the White Paper has been prepared on the basis of one of the most exacting developments of mathematical and technical analysis that any Government Department has ever before embarked on. This is not the end of the road—the techniques are still being developed within the Department—and I have no doubt that there will be a good deal to be learned from them in the economic policy field.
§ Mr. Harold Finch (Bedwellty)
As the White Paper is to some extent being reviewed, will my right hon. Friend consult the N.C.B. and the National Union of Mineworkers before he comes forward with any amendments to the White Paper?
§ Mr. Freeson
There is a misunderstanding here. I was speaking about what is referred to as the mathematical model technique used to prepare the reports on which the White Paper is based, and which is outlined in one of the appendices. The Minister will come to Parliament, and it will be for him to state how he will handle this in the light of the post-devaluation examination that is being undertaken now—
§ Mr. Freeson
May I make it perfectly clear that the evaluation is being undertaken. The Minister will come to the House at the appropriate time with the information—
§ Mr. Mendelson
This is the crucial point of the debate. Is my hon. Friend now narrowing down the reasons for the postponement of the White Paper being 390 introduced to the House by his right hon. Friend to the sole ground that there is a review because of devaluation? If so, that is not what many of us on this side understood when they had their meeting with the Prime Minister. And there are other reasons for a review, including matters discussed with the Prime Minister. Is my hon. Friend authorised by the Cabinet to narrow the definition he has just given?
§ Mr. Freeson
I have given the reason, and I can assure hon. Gentlemen that these matters, as are any others, are ones for consultation, but the reason for the review is the post-devaluation situation—
§ Mr. Ginsburg rose—
§ Mr. Freeson
I would like to continue to deal with the other points that have been raised by various hon. Members. I believe that the questions raised by the hon. Lady—
§ Mr. Deputy Speaker (Sir Eric Fletcher)
Order. If the Minister does not give way, the hon. Member must resume his seat.
§ Mr. Freeson
I have given way about five times, on three occasions to give the same answer. I want to get on with some of the points raised in the debate.
§ Mr. Ginsburg rose—
§ Mr. Deputy Speaker
If the Minister does not choose to give way, the hon. Member must resume his seat.
§ Mr. Freeson
A considerable number of points were raised and time is limited. I wish to deal with some of them if I can.
A point raised by the hon. Member for Finchley was whether capital expenditure as indicated in the Bill will be confined to colliery modernisation or will go into diversifying activities of the N.C.B. The assurance I give is that this capital expenditure will be extended to the programme of modernisation in the pits, which of course is the policy of the N.C.B.
Another point raised by two or three hon. Members was about the possibility of revising the kind of provisions outlined in the Bill for the 55-year-old 391 miners who will be leaving the industry. These suggestions will be taken note of and will be looked at in Committee. I hope that hon. Members appreciate that since the scheme is outlined in the Bill, and if we are to get the Bill through and operative before Christmas, it is giving rather short notice for any total revision of the scheme. However, that is open for consideration in Committee.
The question of exports was raised by one or two hon. Members, particularly in the light of devaluation. As my right hon. Friend said in his opening remarks, and I believe on other occasions, the possibility is being pursued vigorously by the N.C.B. of increasing exports of coal as quickly as possible, notwithstanding the fact that there is a difficult market situation in Western Europe because they are suffering difficulties in their coal industry similar to those we have.
I believe that it was my hon. Friend the Member for Ince (Mr. McGuire) who quoted paragraph 98 of the White Paper, suggesting that we are going to concern ourselves in future solely with the economic costs of power production by way of economic decisions on fuel to be used by the C.E.G.B. If he had continued to quote the paragraph, he would have found that it goes on to refer to the Government taking account ofsuch wider economic considerations as may be relevantin deciding whether to give consent to new power stations. Although the C.E.G.B. will rightly be putting forward proposals based solely on economic costs, the Minister will be making decisions against the wider background terms set out in the paragraph. I thought that I should make that position quite clear.
I was asked by the hon. Member for Cirencester and Tewesbury what the estimated redundancies would be as a result of the current or prospective rundown in the industry between now and 1971. I understand that during the period the estimated total figure of those over 55 will be 26,000. It is expected that there will be a few thousand other, younger men, but it is absolutely certain that they will be capable of being reabsorbed into the industry.
I should perhaps make it clear, while referring to the period of the next two 392 or three years, that the hon. Gentleman has misunderstood the position about increasing the coal burn. It is intended to increase the coal burn by 6 million tons for every year between now and 1971, not just in the first year. The reason for this—it needs to be stressed—is that the industry cannot stand a run-down of 45,000 men per year. The objective is to ease the position by pushing up this coal burn so that the run-down in manpower is maintained at the manageable level that we have had in the past.
§ Mr. Ridley
The Parliamentary Secretary must realise that it will be the same 10,000 miners who produce it for each of the years. It will not rundown at 45,000 a year if he does not do this.
§ Mr. Freeson
I do not want to repeat the position frequently. I have made the point. It has been made clearly on other occasions. No other hon. Member so far has found it difficult to follow, so I do not need to repeat it again.
I think that I should turn latterly to the general issue which hon. Members have rightly raised time and time again in debate here and on other occasions. This is the position economically and with regard to employment in these areas which are affected by the run-down in the industry. I want to make it clear again that we in the Department and in the Government do not under-estimate the social and economic problems which are linked with this fuel policy. The less likely are we to under-estimate them because these are the kinds of problems which may well repeat themselves in the years to come in other industries which will have to be modernised and rationalised. Therefore, we must learn from the situation and take action to deal with it so that we can apply the right policies for the future.
It is right to say that if something along the lines of the regional policies which we have been instituting in the last two or three years—not just the question of the run-down of the coal industry, but the whole of our regional policies—had been embarked upon 10 to 15 years ago we would not be suffering to the extent that we are in these depressed areas today. This is a matter of economic fact. We must concern ourselves with this situation. In these areas we know that coalminers make up anything between 5 per cent. 393 and 16 per cent. or more of the labour force where the mines have been concentrated up until now. About 20 years ago when nationalisation first took place there were just under 1,000 collieries. Most of them, we know, had villages and small townships, some of them large townships, either around them or very closely related to them. Over half of them have been closed, and they have been closed in the most efficient and humane fashion that we have seen anywhere in the industrial world.
But this creates difficulties now. We have fewer than 400,000 miners today compared with 1 million or more 20 years ago. What is more, each pit which is closed means that the remaining miners have to travel further and further from their homes to work. Productivity and contraction mean that there are likely to be fewer than 200,000 miners by 1975, as we have indicated in the White Paper. It is right and understandable that time and time again the question must be asked: what jobs will take the place of the mining jobs? Can they be found, how can they be found, and where can they be found?
Those who ask if mining towns and villages are worth preserving should bear in mind that we are concerned with communities, no matter how difficult it may be to try to deal with the situation. We must ask what it means to abandon these areas, both in terms of the miners and the families who want to stay there and in terms of the social and economic loss in the areas. It is undoubtedly true that there will be schools, there will be shops. there will be housing, there will be all the public services and utilities, which would go. These things must be borne in mind. I realise that they are not the direct concern of the Ministry of Power but they are our concern as members of the Government and as members of the Labour Party.
Housing in these areas is often substandard. We know that the public buildings and utility services are often decayed and out-of-date for a variety of reasons, stretching back over the years. There is a high proportion of derelict land.
§ Mr. Swain
I must correct my hon. Friend at this stage. He is at the moment denigrating the welfare facilities and the 394 community spirit in the mining village. I have lived in the shadow of pit wheels for 56 years. He has never seen them. We have some of the finest facilities, of which we are very proud, and we wish to preserve them in the mining communities. I hope that my hon. Friend does not denigrate them.
§ Mr. Freeson
I was coming to that point in a few moments. I was describing what we know to be the position in much of the industrial areas, which includes many mining areas.
Yet it remains true that many of the conditions in the inner ring of our cities, where miners must go to work if they leave the industry, have even worse housing conditions and public facilities. We also know that dereliction can be cured. It can be cleared and modern conditions can be created. That is the kind of thing with which we must be concerned as a Government when we look at the social and economic consequences, and we must be concerned with it even in the Ministry of Power although it is not our direct concern to provide jobs.
It is essential for us to make plans for this. We have had the statement by my right hon. Friends the President of the Board of Trade and the Secretary of State for Economic Affairs about the Government's plans to extend the areas of industrial development, to create more industrial estates, and to give greater financial assistance to industry to move into those areas.
I do not repeat these intentions so as to say that that is the end of the day. It has also been said that there will be continued studies of the economic problems of these areas, in order that further action can be taken. It is right that hon. Members should raise the question time and again, and that Government Departments must concern themselves with it in the future. Unless there can be answers to the problems of the development areas in the regions most hit by this kind of situation we cannot provide the right answer in terms of fuel policy either, for it will not work. We must go ahead to extend the areas of employment and of city development in these districts in the regions to take up surplus labour, and to provide the families and communities with decent 395 social and economic opportunities for the future.
We are as much concerned about this in the Government as any hon. Member. It is in our minds almost daily, and it is the kind of thing we shall be constantly studying. I assure my hon. Friends that we have as many thoughts, worries and anxieties on this score as have others who have expressed them tonight, and we intend to take action to deal with them.
I return in my closing remarks to the coal industry. It has been said over-frequently that the industry is having a funeral oration expressed over it. One of my hon. Friends referred to "this once great industry". The industry will continue to be great, and the White Paper makes that clear. It is not being run down so that it may die; it is being run down so that it may be re-shaped to fit into the country's fuel policy in a modern, go-ahead fashion. It will remain one of the country's greatest industries for as long as can be seen ahead—certainly in our lifetime, certainly to the end of the century—by the very nature of the policies embarked on over the power stations alone, not to speak of other things.
It is wrong to continue to talk down the industry. It is a go-ahead industry that is one of the most productive in the country. It will continue to modernise, and I hope that from now on we can begin to speak more in those terms publicly and privately than has understandably been the position in the past few weeks.
§ Mr. Freeson
All points of detail raised by hon. Members, several of which are N.C.B. points of detail, will be dealt with in the usual way, either directly by the Department or, if necessary, through the N.C.B.
§ 11.25 p.m.
§ Mr. Thomas Swain (Derbyshire, North-East)
In the very few minutes remaining for the debate, I should like to introduce 396 the subject—I suppose I ought to apologise to the House for doing so—of the Coal Industry Bill. It is the first time that it will have been dealt with seriously this evening.
I must compliment my hon. Friends with the scientific briefs from Hobart House and other places, who have, genuinely perhaps in their own interest, destroyed the debate on the Bill. The Minister of Power has dealt with several subjects. He is, I imagine, very pleased at the way the debate has gone. We got the Prime Minister last week to withdraw a White Paper. The operative word is "withdraw". The debate today has gone exactly the way the Minister wanted it to go, obviously, because we have debated the White Paper and not the fundamental issues of the Bill.
When the Bill goes into Committee—I hope that it will be dealt with on the Floor of the House—we shall have some very important Amendments to table to the Clauses with which we disagree. We shall welcome with open arms the Clauses which are advantageous to the industry. I hope and trust that when the Bill gets its Third Reading by Christmas, as we hove it will, it will be a better Bill for having been dealt with. But I warn the Minister that he will not get the Bill by Christmas by bulldozing or dodging the issues that he dodged tonight.
As the leader and chairman of the miners' group, I warn him that we shall fight like hell on the Floor of the Chamber to get Amendments to the Bill that we feel are necessary. This is about the longest speech made on the Bill today. [Interruption.] It is all right the Minister saying "Order, order", but he deliberately led the debate away—
§ Mr. Swain
That is like Manchester United supporters shouting for Tottenham.
It is no good at this hour of the night getting down to seriousness about the Bill, but I hope and trust that it will be given very serious consideration. I am not going to mention the White Paper again, obviously because it does not exist at the moment. I am looking forward to the Committee stage of the Bill mainly 397 to have a tussle on the Floor of the House with the hon. Lady the Member for Finchley (Mrs. Thatcher). I wish to goodness that my fundamental knowledge of the mining industry had been got out of the Library, like hers. With her fundamental knowledge of the mining industry, with all its ramifications, its dangers and, above all, its importance to our economy, I am sure that she will be worth listening to during the Committee stage.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Committee of the whole House.—[Mr. Harper.]
§ Committee Tomorrow.