MICHAEL COLLIERY, WEST FIFE (CLOSURE) (Hansard, 10 July 1969)

§ Mr. William Hamilton (Fife, West)
The fire at the Michael Colliery, in my constituency, in September, 1967, was a disaster of the greatest magnitude not only in terms of the lives lost, but also because, overnight, over 2,000 men lost their jobs, and that in an area already finding great difficulty in providing a sufficient number of jobs, especially for its male population. It was a situation which no planner or planning mechanism could have foreseen or provided for.
The Michael was a large colliery, producing about 17,000 tons of coal a week at a productivity rate of 3,500 cwt. per manshift, and it was within roughly three months of the closure that the National Coal Board decided, as it was entitled to do, not to reopen the colliery. It gave and has since given reasons why it took that decision.
The first was that the cost of repairing the damage by fire and water and of carrying out work to make the pit profitable was, at that time—December, 1967—roughly £5 million. The second was that it would take about three years to bring up the output to what it had been before the pit closed. The third was that the production from the pit was not essential to the Board's operations, that the lost production could be made up from other sources from within Scotland.
As I have said, that cost estimate was made in December, 1967. It was based on certain assumptions about underground conditions, about the speeds of drivage, the extent of the repair work required, and so on, and it was clear, and I think that the Board made it clear, that only experience could tell how great the actual problems were when it got down to them.
I have subsequently—indeed, quite recently—been in contact with the Board, with my hon. Friend the Member for Kirkcaldy Burghs (Mr. Gourlay), and the latest figure that the Board has provided is that the total amount of investment required to reopen the pit would now be about £8½ million, made up as 1724 follows: capital expenditure, £2½million; interim losses, £2.8 million; working capital, £700,000; interest payable during construction, £700,000; the value of existing work, £1.8 million.
It is estimated by the Coal Board—my hon. Friend will be familiar with these figures, for they were given to us by Lord Robens—that it would be possible to produce 960,000 tons of coal a year by 1972–73, and we were provided with the results of that estimate. Assuming that that figure was reached by 1972–73, output per manshift at the face would would be 202 cwt. and the overall o.m.s. 48.9 cwt. with a manpower of 1,909.
On the financial side, the proceeds would be £4,740,000, roughly 98s. 9d. a ton, and the costs would be £5,148,000, or 107s. 3d. per ton, so that the loss as the Board calculated it before the payment of interest would be £408,000, representing a loss of 8s. 6d. a ton, and the calculation after the payment of interest is £1,003,000, or a loss of 20s. 10d. a ton. So the Board has calculated that there would be a loss both before and after the charging of interest. I make the point that this is the Board's case for not reopening on the financial estimates which it has made.
On the marketing argument, the Board estimates that the total production in Scotland by 1972–73, without the Michael, would be roughly 13 million tons a year, and that demand at that time would also be roughly 13 million tons a year. In addition, there would be strategic stocks of coal at Longannet power station, which is not due to come into full operation until 1972–73, and there would be similar stocks at other stations and, therefore, adequate supplies to meet the market without the Michael.
The Board has pointed out that there are substantial low risk reserves at the Michael—it estimates 13 million tons—and large quantities of other reserves which would depend on extensive proving and development.
The long-term prospects into the mid1970s, Lord Robens pointed out, would depend on success in reducing the costs of production and, in particular, on the electricity market, for the electricity industry now takes 8 million tons a year. If that market is to be maintained, coal prices must be competitive, and the Board 1725 makes no attempt to minimise the size of the challenge facing the coal industry.
The current pithead price of electricity coal in Scotland is given as 5s. 2d. per therm, which is among the highest in Britain, and even at that high level Scotland incurred a loss in 1968–69. But if costs are reduced to competitive levels and the electricity market is kept at 8 million tons, after allowing for reductions in other markets, the demand in 1972–73 is not expected to exceed 11 to 12 million tons. The level of production that year is expected to be 11¾ million tons, again without the Michael.
Some point has been made about the shortage of coking coal in Scotland for supplying the steel industry. But Lord Robens was at pains to point out to us that that was an irrelevant argument in relation to the Michael since it does not produce coking coal.
As for the manpower situation, we know that 2,184 men were employed when the pit was closed. Of those, 1,019 have transferred to other pits since the closure, 1,026 were redundant or retired, 122 left the pit of their own accord, and 17 are still employed at the Michael, presumably on care and maintenance.
According to an article in the April, 1969, issue of The Miner, the Scottish mineworkers' journal, a sample survey in January of this year showed that 21 per cent. of the 350 men who found work outside the industry would go back to it if they had the opportunity—which is only one in five—and 25 per cent. would go back if there was a more secure future in the industry.
The latest figures that I have, supplied to me by my hon. Friend the Member for Kirkcaldy Burghs are for June, 1969. In the Kirkcaldy Employment Exchange area on 9th June, 1969, the number of redundant unemployed miners under 55 years of age is four. The number who are 55 and over is 38. In the Leven area, the number under 55 is only 10. and the number over 55 is 214. In the Cowdenbeath area, the number under 55 is nil, and the number who are 55 and over is 41. Clearly, there is not very much manpower in the area.
If one looks at the figures for the Leven area specifically—and although not all of those ex-miners were employed at the Michael, a good many were—only 10 are under 55, 56 are between 1726 55 and 60, and 158 are between 60 and 64, making a total of 224. So clearly the reopening of the Michael would intensify the manpower shortage and, according to the Coal Board, add to the difficulties of manning up existing high investment pits in the area.
The conclusion seems to be that the reopening of the Michael offers no financial return, according to the figures provided by the Coal Board and, therefore, there is no point in investing millions of pounds to produce coal for which there is no foreseeable demand, which would be produced at a loss and which would embarrass the manpower problem in other pits.
The Coal Board points out that expenditure on pits now in production in Scotland since vesting day has been £91 million and it argues that the main job of management in Scotland is to secure increased efficiency and productivity from those pits to bring down costs in order to secure the future viability of the industry.
As the Minister knows, my hon. Friend and I have written to him and seen him on several occasions in the past few months on this very problem. Recently, we saw both the Minister and Lord Robens on consecutive days, on 30th June and 1st July. The Minister pointed out that the question of reopening the Michael was a matter for the commercial judgment of the Coal Board. Accordingly, we went the next day to Lord Robens. He emphasised at the outset of his talks with us that the fact that the pit is not to be reopened now is no indication that it will never be reopened. In its way, that is a helpful sign, and we are thankful for any helpful sign that we get in this direction.
Lord Robens said that the capital cost of reopening would not be the deciding factor whether the pit would be reopened. The deciding factor, he emphasised, would be the build up of power station demand. If the electricity demand of power stations and the general demand for electricity in other industrial development in Fife and that part of Scotland was to leap forward, the case for reopening the Michael Colliery would become that much stronger. He said that if, for instance, there was another Glenrothes where the geological difficulties compelled them to close that pit, that 1727 would be a new situation which would strengthen the argument for re-examining the prospect of reopening the Michael Colliery.
Lord Robens quoted the example of the Longannet mines which will supply the Longannet power station. If those mines failed to meet the power station demand in the early 1970s, again the reopening of the Michael Colliery might be re-examined. But we cannot tell whether the Longannet group of mines will or will not meet the full demand of the Longannet power station, because it will not come into full production until about 1973.
Lord Robens also made the point that if the Michael Colliery was to be reopened one day, it would be highly mechanised. The Board would train its own men and would have to keep them after they had been trained by paying them wages competitive with the other industry which is increasingly coming into the area. I say "thank goodness" for that.
I must add that I am not one of those who will ever enthusiastically campaign for the opening or reopening and keeping open of coal mines. My father worked in the pits for most of his working life, and he is now choking to death with pneumoconiosis. Therefore, I speak with considerable feeling on this matter.
I want to see new male employing industry providing healthy working conditions, security and high wages in a diversified economy. We are now getting that in Fife, thank goodness.
I have travelled round many of the new industries in Fife, which is now the electronics centre for Europe, and I have never met an ex-miner working in another industry who would willingly go back to the pits. When I have said, "But you can get more money if you go back to Seafield", or wherever it may be, he has replied, "Not on your bloody life. I am not going back to the pits." I hope to see the day when no man has to go underground.
There has been a little misunderstanding between the Minister of Power and the Board of Trade about the figures. I have been in contact with the Board of Trade, and I have the permission of the Parliamentary Secretary to quote the 1728 figures which I have been given. This letter, which I received only this morning, states: However, the jobs in prospect expected to arise in the area"— that is, the Fife area— within the next four years in authorised new industrial building and in existing building taken over by manufacturing firms are:— Kirkcaldy travel-to-work (covering the Employment Exchanges of Kirkcaldy, Glenrothes, Leven and Methil, and Burntisland) total 4,754, of which for males 2,723. Glenrothes alone"— where I think the misunderstanding arose over the Burroughs project— total 1,630, of which for males 886. The Minister points out that she cannot disclose information relating to individual developments. I tried to get the figures for Burroughs, but the Ministry was either unwilling or unable to give them.
Having said that, it is left for me only to say that so long as there is a sizeable demand for coal in Scotland—and the same applies to the United Kingdom as a whole, but we are concerned at the moment with Scotland—and there will be for a long time yet, it will have to be met by the sweat and the toil of Scottish miners. If the Michael Colliery has a part to play in meeting that demand, I hope that the Coal Board and the Ministry will give an assurance that nothing will be done by them to hinder it. I am sure that that assurance will be given by the Minister tonight. I shall be very disappointed if it is not, and if it is not, we shall return to the subject until it is.
Meanwhile, whether the Minister gives that assurance or not, the Ministry and the Coal Board can be certain that my hon. Friend the Member for Kirkcaldy Burghs and I, whose constituency interests are directly affected, will give the matter our continuous and critical scrutiny. That is our obligation and our duty, and we shall not fail in discharging it.

§ The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson)
May I, on behalf of my right hon. Friend, give the assurance in the terms that were sought, that if, in the commercial judgment of the National Coal Board, there is a case for reopening 1729 Michael Colliery, it will not be for us to stand in the way of that. But before saying anything else, perhaps I might congratulate my hon. Friend the Member for Fife, West (Mr. William Hamilton) on the clear statement that he has made to the House on the problem of reopening Michael Colliery, and, indeed, on other related matters in the locality.
My hon. Friend, together with his and my hon. Friend, the Member for Kirkcaldy Burghs (Mr. Gourlay), who, I see, is in the Chamber this evening, have been assiduous in their discussions and contacts with my right hon. Friend and myself, as well as the N.C.B. and the Board of Trade on these matters, and therefore my hon. Friend will understand that in view of the extensive information that he has obtained I am bound, to some extent, to be repetitive in replying to his observations.
As my hon. Friend said, after very careful investigations, following the tragic fire, the N.C.B. decided that it was not a sensible, commercial proposition to reopen the Michael Colliery. This decision was taken on the basis of the cost of bringing the colliery back into production, and the time that such a decision would take to be implemented. Thus, over a period since then the work force has been dispersed, and has been absorbed into other employment. By 30th June of this year only 169 Michael men remained on the books of the employment exchanges in the locality. From a manpower point of view alone, therefore, the colliery could be reopened only by drawing men from other Scottish pits.
My two hon. Friends have been to see my Minister to discuss the problems of their constituents fully in relation to Michael Colliery. They have also discussed them with me, so they know that none of my comments tonight are meant in any way to belittle the Government's concern over the unemployment problem in East Fife. It is a very real problem indeed. In the travel-to-work area covering the employment exchanges of Kirkcaldy, Leven and Methil, Glenrothes and Burntisland, there are 2,032 unemployed men registered. Of those, 279 are exminers affected by colliery closures, most of whom are over 55. The percentage of unemployed in the area is 4.8, as against 1730 3.5 for Scotland as a whole. There is no doubt that action is needed, and, indeed, there is no doubt that action is being taken by the Government to meet this situation.
It was because the closure of Michael Colliery came on top of existing unemployment that the Government included Leven and Methil and the special development areas announced in 1967 soon after the fire. Four advance factories have been authorised in the travel-towork area, two have been completed and allocated to firms. One more has been completed and is awaiting allocation and the fourth is now under construction.
During the past 2½ years, 26 industrial development certificates have been issued, totalling 1,048,000 square ft. of factory space. The President of the Board of Trade estimates that in the next four years the area will have 4,754 new jobs, 2,723 of which will be for men. This is rather greater than the present figure of 2,032 men unemployed.
There is no shortage of the type of coal produced at the Michael Colliery. The lost production has been made up from elsewhere and the cost of reopening would be enormous. It was estimated at £5 million in 1967 and the House has heard from my hon. Friend that the present estimate is now much higher. In any case, it would be three years before the work could be completed and the colliery returned to full production. Expenditure of this order to produce coal which can be supplied from elsewhere makes no commercial sense and it can be said that there are more productive ways of spending public funds to develop the regions. I am sure that my hon. Friend would agree that this is very much in line with Government policy in this part of Scotland and elsewhere.
There is no doubt that there are cogent reasons for not reopening Michael Colliery, but if more coal mining capacity were needed in Scotland in future I have no doubt that the N.C.B. would be prepared to consider very seriously the possibility of reopening this colliery. I hope that I have made it clear that the Government are fully aware of the difficulties in East Fife, as we are aware of similar difficulties in other parts of Scotland and other regions in the country. I hope that I have made it clear that we are taking action to attract new industry to the area, 1731 and there have been some excellent examples mentioned this evening.
There is no doubt that this district is becoming one of the finest centres for science-based industries, not only in this country but in Europe. This is the kind of development which as my right hon. Friend rightly emphasised, the Government and the community at large should be encouraging. It is this kind of positive approach to meet the problems facing such a district which must be encouraged. It would, indeed, have been the kind of approach needed had there not been the tragic fire in 1967. This fire underlined the need for the kind of action which the Government are taking.

§ Mr. William Hamilton
Has any estimate been made as to whether the Longannet series of mines can supply all the demands made by the power station when it comes into full production in 1973?

§ Mr. Freeson
I have not been in touch with the N.C.B. about this recently but I recall that on a visit to the N.C.B. in Scotland, when I discussed Longannet I was given this general assurance. I will check this through the Department and write to my hon. Friend.
The important point here, apart from the position of the coal industry in the locality, is that we are taking action to 1732 attract new industry to the area. There are enough jobs in prospect in the new and expanding industries to reduce the level of unemployment greatly. This is the correct solution for the future, rather than reopening the Michael Colliery. I stress that none of this is said smugly. I would never like to talk about any problem related to areas of high unemployment in the regions with any sense of smugness or even to give the impression of complacency, when we are stating the facts about Government action and policy, that sometimes gets about when people read our words in the locality.
In stating what we are seeking to do—the kind of changes that are going on—I am not trying to pretend that there does not remain a very serious problem in the area. What I am stressing tonight is that the answer does not lie in the reopening of Michael Colliery; indeed, if anything, this might exacerbate a difficult situation—