COAL INDUSTRY

HC Deb 21 March 1972 vol 833 cc1442-55

8.15 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley)

I beg to move, That the Coal Industry (Accumulated Deficit) Order 1972, a draft of which was laid before this House on 6th March, be approved.

Mr. Deputy Speaker (Mr. E. L. Mallalieu)

Does the hon. Gentleman wish to discuss at the same time the following Motion: That the Coal Industry (Borrowing Powers) Order 1972, a draft of which was laid before this House on 6th March, be approved?

Mr. Ridley

It would be convenient to discuss both Motions together, although each could be put separately at the end of the debate.

The last financial year of the National Coal Board ended on the last Saturday in March, 1971, and gave the board a profit of about £500,000. Up to November, 1971, the National Coal Board saw a good chance of breaking even in the financial year 1971–72. But then we had the overtime ban, and then the strike, which changed the prospects dramatically. The deficit at the beginning of the financial year, which was 28th March, 1971, was about £34 million. The expected deficit of the board at 25th March this year, when this financial year comes to an end, might be about £200 million. That is a very rough guess, because it is impossible to be precise; and even when the figure is determined it will have to be audited, so it will be some time before the exact figure is known.

As has already been announced, the Government intend to meet this massive deficit in a mixture of ways. We have to keep the board legal, and at present the board's statutory limit for deficit is £75 million only, so in order to meet that £200 million the Government have made a grant of £100 million, which was the subject of last night's debate. Secondly, they have decided to raise the deficit level from £75 million to £100 million. This raising, in the first order that we are discussing, is made under the Coal Industry Act, 1971. This should bring the National Coal Board within its legal limit on 25th March. But one cannot be sure that it will be adequate until the accounts are finalised. However. there is every indication that it will be adequate. Lastly, the Government have decided to increase the borrowing limit from £900 million to £950 million. I shall say more about that shortly. As the House knows, we have already agreed to increases in the price of coal of 7½per cent., which will yield about £55 million to £60 million in a full year. This is all to deal with the immediate position.

The longer-term position, which we discussed last night, is not at all certain. Greater costs will be incurred by the board than the coal price increases will bring in. There are also longer-term financial and capital problems which, as I said last night, the Government will deal with as soon as possible, but not at this stage. These are only short-term measures and we intend both to review fuel policy urgently—echoing what I said last night—and to reconstruct the capital finances of the board in the light of the new fuel policy, when it is determined. Legislation will be needed in due course for the latter objective.

From the figures that I have given the House may reflect on the cost of the strike and on the threat to the competitive position of coal which the strike has created. We now have to pay for the events of the last few months. The borrowing order increases the limit from £900 million to £950 million. That is more of a precautionary measure. The board's borrowing at the present time is under £900 million, but the Government thought it convenient to discuss this at the same time, because it was quite likely that if coal stocks increase in the summer, when they usually build up, the board might have to finance greater stocks than at the present time. This could take them over the £900 million. As a precautionary measure, therefore, the Government have decided to bring in the order increasing the borrowing limits of the Coal Board to the maximum.

8.22 p.m.

Mr. Eric G. Varley (Chesterfield)

The two orders arise directly as a result of the miners' seven-week strike and the overtime ban which preceded it. The Under-Secretary has given us the usual outline of what the orders contain and we are grateful for that, but he was a little coy about some of the real reasons behind them. The orders would never have been necessary had the Government not been determined to promote the confrontation with the miners. It was a confrontation which most hon. Members on this side of the House and some hon. Members opposite—including the hon. Member for Cannock (Mr. Cormack) who I see here tonight, and who played a significant part in the debates on the strike—warned the Government at the time they could not win. The raising of the limit on the accumulated deficit and the increase in borrowing powers, as well as the outright grant of £100 million, are needed—as the Minister admitted in last night's debate—to help clear up the debris after the strike. It was a strike that the miners did not want, and one that some of us on this side of the House think the Government unnecessarily provoked and, in certain respects, actually thirsted for.

It is ironic, therefore, that the miners should come out of it with a record pay increase while the Government have been forced to stand all their previous policies on their heads. We are now having to foot the bill for that folly. In the three weeks since the end of the strike all the parties concerned have behaved characteristically. The miners have buckled down to their job and overall production has already reached 90 per cent. of what it was before the dispute. In some areas output has actually been higher than normal. The miners have shown in a practical way their faith in the future of the industry to which so many of them have devoted their lives.

The Tory back benchers have learned nothing from the dispute. Here again, I exempt the hon. Member for Cannock. The Government certainly propelled themselves into this self-inflicted punishment, and we have heard hon. Members opposite, representing traditional mining valleys like Chertsey and Torquay, urging the Government to shut down pits and throw men out of work. For their part, the Government have behaved equally characteristically and have instituted a review. They realise that the orders and the £100 million grant can only be a palliative, and that the long-term policy of the coal industry needs to be sorted out.

The orders, as the Minister will be ready to agree, are only stop-gap measures. The long-term financial position has to be dealt with. The Secretary of State has acknowledged this, as did the Under-Secretary a few moments ago. The Secretary of State said: The Government intend in due course to introduce legislation to deal with the financial problems of the coal industry."—[OFFICIAL REPORT, 6th March, 1972; Vol. 832, c. 1033.] May we take it that the Government and the Coal Board are now urgently discussing these matters? Can we be assured that the National Union of Mine-workers is also being consulted? It would not be satisfactory for these basic issues to be settled over the heads of the representatives of those who work in the industry. The N.U.M. has views on these matters and it has done research and is entitled to be consulted.

Mr. Ridley

To which matters is the hon. Member referring?

Mr. Varley

I was referring to the question of capital reconstruction and to the Secretary of State's undertaking that the Government intend in due course to introduce legislation about the financial problems. I want to know whether the N.U.M. is being consulted about the framing of the legislation. I am pleased to see my hon. Friend the Member for Midlothian (Mr. Eadie) here, because he is a member of the Executive Committee of the N.U.M. and also has views on these matters.

The issues that arise out of these orders were fairly summarised by the Under-secretary and by the Secretary of State. They concern energy policy, employment, and employment in the assisted areas. It is on those criteria that discussions about the future of the coal industry must be made, and not on narrow, pettifogging, bookkeeper's rules—still less on motives of revenge.

I acquit the Government, certainly at this stage, of seeking revenge, but the events of the last few days have seemed to indicate that some hon. Members on the Government side appear to be in a vengeful mood. During the past 10 days we have had a debate on a Private Member's Motion moved by the hon. Member for Harborough (Mr. Farr). The matters were raised at Question Time yesterday and there was a debate initiated last night by my hon. Friend the Member for Fife, West (Mr. William Hamilton).

Minister after Minister has acknowledged that coal is basic to the country's energy needs. Minister after Minister has shot down suggestions from hon. Members opposite that other fuels could be substituted for coal as part of the long-term policy.

If anyone should feel that there is an easy way of running down the coal industry, I must point out that natural gas is limited, on known supply, to 20 years. Nuclear energy, as the hon. Member for Worcestershire, South (Sir G. Nabarro) said at Question Time yesterday, is basically unreliable at this stage, and is an expensive gamble. It is right that it should be further developed, and we support that, but it is a question of doing it realistically and putting it in its proper context. North Sea oil is coming, and we welcome it, but there is not enough to meet the projected increase in oil consumption. Sir David Barran, who should know if anybody does, has said that winning it is as expensive as a moon shot. As for imported oil, Mr. Derek Ezra summed up the position in an article in the Daily Express on 17th March, in which he said: Last year almost half our entire energy needs came from abroad. This burden on our balance of payments could grow as the oil-producing countries demand a bigger share of the profits and a bigger say in its distribution—which is precisely what they are doing at this very moment. It was foolish of the Under-Secretary to imply last night that indigenous coal supplies are no more reliable than imported oil. I need not quote what he said, but he gave that impression. The fact is that there are 100 years' supply of coal available, at the present consumption rate. It is there, ready to be won. Hard-working men who have been involved in only one official dispute in 46 years are ready to mine it. It was wrong-headed of the Minister, even by implication, to compare reliable British miners with the capricious oil sheikhs of the Middle East.

The other two aspects mentioned in the statement of the Secretary of State which foreshadowed the orders were the employment provided in the coal industry and the areas in which it is located. In his Budget Statement the Chancellor announced proposals on regional policy. They will be studied with great care and debated at the appropriate time. We shall not crow too much about the Government's acrobatics on investment grants. But the value of the proposals will be cancelled out if the Government do not ensure long-term employment prospects for the coal industry, 70 per cent. of which lies in the areas that the Government profess to wish to help.

We on this side are content to let the orders go through, but we make it plain that they are only stop-gap measures, which were made necessary by the Government's mishandling of the coal dispute. The National Coal Board will have to pay increased interest charges as a result of both orders, and that will add to its burdens, so the sooner the Government present a Bill to deal with the overall financing of the board the better.

Can the Minister say whether the legislation that he foreshadowed will come in this Session or the next? The sooner the board and the miners can get down to their job the better. We trust that as a result of the lesson the Government should have learnt from the dispute they have now expunged from their ideological dictionary the word "confrontation".

8.33 p.m.

Mr. Patrick Cormack (Cannock)

I do not wish to make a long speech, particularly after what has happened today. But, as the hon. Member for Chesterfield (Mr. Varley) was kind enough to refer to me and previous contributions I have made, I should like to say that I hope that after tonight we shall not have to debate the coal strike in the House any more. Obviously, it must be referred to tonight, because we are in effect counting the cost and authorising payment to meet that cost.

Many of us on the Government side as well as on the Opposition side felt that certain mistakes were made by both sides in the period leading up to the strike. I do not absolve anyone. The hon. Member for Chesterfield knows that I was calling for an inquiry for a very long time. My right hon. Friend the Secretary of State for Employment made it plain as early as 24th January that he was willing to have an inquiry. Many of us will always regret that the offer was not taken up earlier, that the court of inquiry was not held and a settlement reached long before it was.

The dispute was very costly, and the nation must now meet the cost. I hope that we shall all learn lessons as a result of the dispute. The lesson not only to the workers in the mining industry but to all workers in all industries is that a long stoppage, whatever the results at the end of the day in terms of increased salary and pay, is damaging and dangerous There can be no doubt about that. On the other hand, one hopes that we shall all realise that, although the industry has been damaged and endangered, it has not been killed, and that there is an essential future for it in this country, certainly to the end of this century and probably beyond. We read in the papers stories of other discoveries around our coasts, but this is our main indigenous fuel, and will remain so for a long time.

I hope that the Government will not be panicked by anyone anywhere into taking ill-considered action in regard to the future of the industry. Now that the miners have got their settlement—which I feel was a just one—and have the extra money, I am sure that they will play their part. The National Coal Board and the Government must play theirs, too, by showing that the industry has a proper and secure future. All this demands cooperation and sensitivity on all sides—qualities which were not always displayed during the dispute but which will be sorely needed in the months and years ahead. I should like to think that my right hon. Friend the Secretary of State will fairly soon produce a White Paper on the future of the industry which can be laid before the House and debated, indicating the rôle which he feels the industry can play in the remaining decades of this century.

I very much hope that the workers in the industry will do what they can to recoup the enormous cost with which the nation is faced. I was glad to hear the hon. Member for Chesterfield refer to the fact that in many cases production is back to 90 per cent., or even more, of what it was before the dispute. Let us hope that within a matter of months it will be 120 per cent., and that we can have the increased productivity that will justify the struggle that we all face.

We must approve these orders tonight. There can be no question of not approving them. This is a national necessity and a national obligation.

I close as I began, by saying that I sincerely hope that recrimination is now over, that the past will be forgotten and a constructive approach adopted by all sides, and that the coal strike of 1972 will not be dragged into our debates any more, because only in that way shall we benefit the industry and the nation.

8.38 p.m.

Mr. Alex Eadie (Midlothian)

I do not want to get on to a different tack from that of the hon. Member for Cannock (Mr. Cormack). He spoke with moderation, as he did during the whole dispute. It is only necessary to say that if there happened to be the danger of pneumoconiosis on the benches opposite when speaking about coal some of us on this side of the House would have to speak about it, and about the danger of catching the disease, which would be a hazard for a Member of Parliament.

I do not want to be churlish, or to imply that the hon. Member has behaved in the same way as some of his hon. Friends have over this matter. In dealing with the cost of the recent dispute not everyone adopted his approach. He said that this is the price of Wilberforce. I wish that some of his hon. Friends had had the temerity to be a little more generous as a result of the Wilberforce findings. Some of us on this side of the House are getting a little worried about the reaction of some of his hon. Friends to Wilberforce. They seem to think that the recommendations as a result of the inquiry were too generous to the miners. That was the implication of some of the things that they have said. I do not want to repeat my speech in yesterday's debate, but this attitude does worry me because I have been a professional negotiator. I like to negotiate and to settle on the basis of negotiation. The action being taken by some hon. Members opposite to undermine the implications of the Wilberforce settlement is doing damage throughout the industry. I hope the hon. Gentleman will be able to persuade them that they were defeated by, may be, better men, that they should accept the implications and that this was a fair and just settlement.

The result of the strike was a severe cost to the nation. But some of us warned what would happen. No one can say that not many hon. Members on this side of the House tried to impress this fact both publicly and privately on members of the Government. We tried to get them to understand the implications of allowing this industrial action to proceed. We pointed out the damage that it would do to the nation, and the cost is now before us in these orders.

But the strike has also been costly to the miners. Few people speak about that. Many thousands of miners this years will not get holidays; their bairns will not be so well clad as before. When people go out on strike for seven weeks, they do so at a personal cost, irrespective of social security. Debts have been accumulated, and they all have to be paid back. Many miners have had to make great sacrifices for their cause.

The Under-Secretary of State spoke with a certain amount of moderation. He said that he did not want to add to what he told the House yesterday about the cost and that there had to be a review. My hon. Friend the Member for Chesterfield (Mr. Varley) referred to the fact that I am a member of the National Executive of the National Union of Mine-workers. I took part in the negotiations throughout, sometimes in anger, sometimes in sorrow—more in sorrow at times than in anger. I hope that the hon. Gentleman will take up the suggestion made by my hon. Friend about consultation. If we are to talk about financial reconstruction and getting the industry back on its feet. I hope that merely informing the National Executive of the Union will not be regarded as a substitute for consultation. There should be a consultation.

No one can say that the miners have never had the nation at heart. This was the first national industrial dispute in the mining industry for over 40 years. That record shows a certain amount of responsibility—and there have been times during that period when the miners, if they had not had a national consciousness and a pride in their country, could have held the nation to ransom. They chose not to do so. I hope that there will be consultation between the N.U.M. and the Department on the whole question of a fuel review and the financial reconstruction. This would profit not only the Government but the nation and the miners as well.

My hon. Friend mentioned an additional factor, which is related to some extent to the Budget. This is the question of trying to find new jobs. The hon. Gentleman last night mentioned that in talking about the mining industry we are talking also about employment in certain areas. He said that the manpower employed in development areas in the coalmining industry totalled 115,000. I thought, listening to him, that he had said 116,000, but Hansard gives the figure as 115,000. If we are to talk about a reconstruction of the industry and the capital cost it would be irresponsible of the Government not to think of the 115,000 people who work in this industry in development areas. I hope that the hon. Gentleman will bear this in mind because this is important for everyone. We have tried, with varying degrees of success, to point out to the Government the great danger there is in contracting the mining industry. We have tried to impress upon the Government that energy demands are not contracting. This is an expanding industry, and when we have an indigenous resource which we can use as we wish, it is criminal to ignore it, particularly when we sacrifice men in doing so.

We take exception to those who say that mining is a dirty and dangerous job, because we know that already. We take exception to those who say it would be better if miners worked in other industries. That is all very well, but where are those other industries? When people talk like that they do not have any alternative to put forward. For many years to come men will have to work down the mines. For many the alternative at present is unemployment.

Before I came into the Chamber tonight I was reading some literature dealing with power matters, and I discovered that there is a shortage of natural gas in France. Hon. Members who talk about new sources of energy replacing coal should realise that they could jeopardise our whole energy future. I am concerned about our energy requirements, and I hope that the Minister will accept some of the suggestions which I have made as constructively as I can. There should be the maximum of consultation between the Ministry and the N.U.M. In that way the nation can profit.

8.47 p.m.

Mr. Edward Milne (Blyth)

This is the third debate on the coal industry that we have had in the last eight parliamentary days, and the possibility of repetition looms large. I apologise for not being present to hear the Minister introduce these orders; another engagement prevented my being here. I do not mean to be disrespectful to the hon. Gentleman—I am sure that he will agree—when I say that there is not much new to be said about this. Everyone agrees that the Government and the country must bear the cost involved in trying to bring the living standards of the miners nearer to that to which they are entitled. We must restate our requests made on the last two occasions, and must not conveniently forget the problems of the industry, of the fuel economy and of our energy requirements. These are with us and will remain with us for as long as we are an industrial nation.

The hon. Member for Cannock (Mr. Cormack) said that he hoped he would see in the mining industry not merely 100 per cent. but 120 per cent. of pre-strike production. I hope that when that figure is reached we shall not consider the extra 20 per cent. as merely a payment for the Wilberforce award, but will look upon it as Wilberforce did, namely, that in 12 months' time we shall have to look further ahead in regard to the wages and living standards of the mining communities. If we are merely going to pass these orders and put the Wilberforce Report into a pigeonhole all the effort, all the argument, and all the debate and discussion that have gone on since this wage claim was launched in the middle of last year will have been a waste of time and energy.

As my hon. Friend the Member for Midlothian (Mr. Eadie) so clearly and ably indicated, the energy requirements of the nation are expanding, and within the framework of that expanding demand coal is bound to have a major rôle to play. What the figure for coal production in Britain on the basis of that increased demand will be we do not know, the only definite figure we have relates to the rising demand of the nation's energy requirements. Therefore, the question that the Government and the House have to answer is how far we shall go towards seeing that this nation has a proper fuel policy, with coal embedded in it, so that the people who work in that industry do not have to face the redundancies and closures that they have had to face for more than a decade.

Great efforts have been made by the National Union of Mineworkers and its members in agreeing to the contraction of their industry. Now that this has been achieved, and we have the Wilberforce Report as a basis from which to go forward, we can give to the industry a stability and a future that no one has dreamed of during the past 10 to 15 years. As the hon. Member for Cannock said, the closing years of this decade could see the mining industry in a stronger position in relation to the rest of industry—and in relation to its supplying of our energy requirements in a stronger position at the end of this century than at any period during it. That is why I welcome these orders, not as the complete answer to the problem but as the first of the means by which the Coal Board can get over its immediate problems and hurdles.

8.59 p.m.

Mr. Ridley

With the leave of the House, perhaps I may reply briefly to the points that have been made.

The hon. Member for Chesterfield (Mr. Varley) asked me about capital reconstruction. We are already discussing this with the National Coal Board, and in due course the National Union of Mine-workers will be consulted. I do not think the Opposition or the union can accuse myself and my hon. Friends of not having consulted them in the past about matters which concern them. It has always been our endeavour and practice to do this. But these matters are largely financial, and of a different character, and we must reserve the right to act in the way that we think best.

The hon. Gentleman asked when legislation to put the capital reconstruction into effect might appear. He must ask my right hon. Friend the Leader of the House that question, but we are hoping to press on quickly. As I said earlier, this must be tied up with the fuel policy review, and we do not want to jump too quickly to conclusions on capital reconstruction.

The hon. Gentleman took me slightly to task on the question of the security of coal supplies. What I said last night about coal not having such a good reputation as it had for security of supply was the opinion not of the Government but of the customers. Whatever the Government may think or do, the industry has to sell its coal and its customers must have confidence that they will be able to get coal to keep their plants going and their boilers fired. To that extent it has been a loss to the coal industry that its reputation for security of supply has to some extent suffered.

Like my hon. Friend the Member for Cannock (Mr. Cormack), I hope that this incident can now be closed from the point of view of post mortem and analysis, and that we can look to the future. Perhaps this short debate should be regarded as a requiem upon the parliamentary debates of the last few months, so that we shall be able to concentrate on the future fuel policy and the part in it which coal will undoubtedly play.

In that spirit I hope that there will be no recrimination. I can say positively that the Government's reaction is not one of recrimination against the coal industry. Equally, I hope that hon. Gentlemen opposite will not be too sensitive about the comments of some of my hon. Friends. They, too, have a valid point of view. I do not agree with the hon. Member for Chesterfield that Government back benchers have learnt nothing from the dispute. Let it not equally be said that the Opposition have learned nothing from it. There are lessons to be learned on both sides. No monopoly of virtue can be claimed by either side.

I close by paying tribute to the miners—particularly to the staff and management, the managers, over men and deputies who made possible the remarkable recovery. Most remarkable of all was the week between the ending of the picketing and the resumpton of work, when 1 million tons of coal were moved. That, coupled with the high level of production which has already been achieved, shows how the many people who are involved in this great industry are coming together again to get production going and to repair the damage which has been caused to both fuel stocks and human relations.

In passing the orders tonight, the whole House will wish the coal industry all good fortune in the future.

Question put and agreed to.

Resolved,

That the Coal Industry (Accumulated Deficit) Order, 1972, a draft of which was laid before this House on 6th March, be approved.

Resolved,

That the Coal Industry (Borrowing Powers) Order, 1972, a draft of which was laid before this House on 6th March, be approved.—[Mr. Ridley.]