AID FOR MINING

HC Deb 20 February 1973 vol 851 cc373-84

'The Board shall have power to provide to any person or organisation, on terms they consider to be suitable commercial terms, advice and assistance "other than financial assistance" on or in connection with mining or mineral preparation in any part of the world'.—[Mr. John.]

Brought up, and read the First time.

10.25 p.m.

Mr. Brynmor John (Pontypridd)

I beg to move, That the Clause be read a Second time.

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

With the new clause it will be convenient to take Amendment No. 6, in Title, line 9, after 'redundant', insert 'to empower the Board to provide advice and assistance on commercial terms in connection with mining'.

Mr. John

The new clause would enable the National Coal Board, upon suitable commercial terms, to render assistance, other than financial assistance, on or in connection with mining or mineral preparation in any part of the world.

Amendment No. 6 relates to the Long Title and paves the way to enable this matter to be discussed.

This proposal is strongly advocated by British manufacturers of mining equipment and by those who make coal preparation plant. I believe that the NCB would consent to having this additional power. Indeed, I think that it would welcome it.

Although the Bill talks about an industry which is financially dependent, in mining expertise it is one of the most highly qualified industries in the world. It has been written about in many publications. The expert skills which the miners and the mining engineers in Britain have developed in the era since nationalisation have put them ahead of most other countries, particularly in long-wall mining.

In consequence of the nationalisation of the industry in 1946 the NCB has gathered within itself all the expertise in mining. The Board does not depend, as the old coal owners did, on outside private consultants. However, since this has been accompanied by a view on the part of the board that it was precluded by the Act from providing consultancy services, it has meant that the amount of advice which Britain can tender to other countries has been limited. Indeed, the advice that Britain could give through private consultants has got steadily out of date, because the experience gained by outside private consultants in the mining industry has been less relevant over the years.

There is considerable evidence to suggest that Australia and Canada, to name but two of a number of countries, would have given consultancy contracts to British mining engineers had they thought that the quality of the advice they could get from Britain would be adequate for the tasks before them. Had they had National Coal Board mining engineers available to tender this advice, those consultancy contracts would have been granted.

Our immediate European neighbours have such organisations. For example, Germany has Montan, which is controlled by the big German mining combine of Ruhrkokl AG, and France has the Sofremines, which is controlled by Charbonnage de France.

It is worth describing the latter organisation in a little more detail, because in the past few years its consultancy services have won contracts in Zambia, Greece, Morocco, Ghana, Turkey, Algeria, Tunisia and South America. It is obviously a very successful consultancy organisation. It brings to France a great deal of prestige and income.

10.30 p.m.

The organisation acts as a mining consulting engineering practice, undertaking the preparation of feasibility studies and the assessment of capital costs. It will also undertake new mining ventures in any part of the world. Its permanent staff is only 48, but it can borrow experts in a particular subject for short periods on payment for their services.

As a result of that consultancy service being available from France, a number of contracts have been won in foreign countries. British manufacturers are so keen on the idea of a British consultancy service because their chances of selling their mining equipment to foreign countries are less without it.

I must re-emphasise that our coal preparation equipment, as well as our general mining equipment, is probably better than any in the world, but it is natural that many of the orders for mining equipment follow the consultancy arranged for the venture. This is where Sofremine's experience comes in. A great deal can be done by way of steering and advice as to what type of equipment can be bought. It is no exaggeration to say that that is exactly what Sofremine has done in almost every country in which it has won consultancies. It has steered to France the capital equipment provision for the venture in question, and big capital equipment exports have been won by France as a result.

The world demand for energy is likely to quadruple in the next 30 years. Whatever our arguments about the relative merits of other sources of fuel, a large part in meeting that quadrupled demand must be played by the discovery and exploitation of fresh sources of coal. The establishment of a consultancy service such as the clause would enable would open up the possibility of our exporters of mining equipment being able to enter into fair competition. That possibility is at present denied them because of the absence of such a service.

I should like to state briefly what I believe to be the advantages to this country of setting up such a consultancy service. First, considerable consultancy fees would be earned by the National Coal Board in foreign currencies. For example, in 1968 the turnover of Sofremine was 20 million francs. Secondly, it would make possible increased markets for British capital goods as a result of the consultancy being tendered by Britain rather than other countries. Thirdly, there would be an indirect benefit to the NCB if those who supplied it with capital equipment also had large export orders, resulting in lower operating costs.

There is good precedent for such consultancy services in the nationalised industries. British Rail has a company known as Transmark Ltd., which gives advice on railway matters all over the world. This has resulted in a fair number of orders to United Kingdom suppliers. Although it has not been long established, I believe that the company is already showing a profit. I should be obliged if the Minister would deal with this matter when he winds up the debate.

Mr. Albert Roberts (Normanton)

I was under the impression that the National Coal Board already had power to provide information and consultancy services where necessary. I should like to know where that has not been possible.

Mr. John

I am obliged to my hon. Friend the Member for Normanton (Mr. Albert Roberts) for that comment. I think that the power to which he refers is Section 5 of the Coal Industry Act 1971. That deals with agreements in connection with overseas aid, with the consent of the Secretary of State and the Minister of the Crown having functions with regard to overseas aid. That is not my case. I am saying that the National Coal Board, as a matter of commercial practice to assist itself and British industry generally, should be able to undertake commercial contracts in countries which may not be the subject of overseas aid such as Canada and Australia where consultancy contracts would have come to this country if people of the calibre available to the NCB had been able to advise the Canadians and Australians.

I have referred already to Transmark Ltd. In addition, the British Steel Corporation has advised upon steel plants in Mexico, and the Post Office has the right to undertake consultancy services regarding telecommunications.

What we suggest is by no means a novel proposition. The arguments are wholly in its favour. If the House were to accede to the amendment, we should ensure that Britain and British mining engineers played their full part in the expansion of world coal production in the future. I hope that the Minister will tell us his thinking on the matter and that he will accept the amendment. I know that certain discussions have gone on between manufacturers and himself and probably between the NCB and himself. I hope that he will not be merely negative on this matter but will allow the NCB to be adventurous and full of willingness to impart its expertise on commercial terms to the rest of the world.

British mining has a great deal to be proud of in terms of the standard of qualification of its mining engineers. This might be imparted to the rest of the world with profit to us all.

Mr. Peter Rees (Dover)

I must congratulate the Opposition on their ingenuity. Faced with a Bill which has done more for the mining industry than anyone inside or outside the industry could have dreamed in their most optimistic moments, obviously they have found it difficult to embellish the Bill in any way, and I suppose that the clause is the result of burning a good deal of midnight oil.

I am in favour of the thinking underlined in the clause. While I am not for the National Coal Board becoming an ill-defined conglomerate, I am all for the recognised expertise developed by its primary activity being exploited commercially.

What is the reason for the clause? What is the demand for it? I look at Section 1 of the Coal Industry Nationalisation Act 1946, which I believe equips the board with all the powers that it needs. Admittedly it limits the board to the winning of coal in Great Britain, but its ancillary powers are wide enough to enable it to branch out in this work—

Mr. John

indicated dissent.

Mr. Rees

The hon. Member for Pontypridd (Mr. John) disagrees. No doubt with his well-known legal expertise he has given the NCB different advice. However, I still believe that Section 1 covers this proposed activity.

I am never for inflicting on a long-suffering industry more verbiage than is absolutely necessary. This is political rhetoric which will confuse rather than clarify the situation. Therefore while I sympathise with the thinking underlying the clause, I cannot support it.

Mr. John Morris (Aberavon)

I support my hon. Friends. I find it difficult to follow the argument of the hon. and learned Member for Dover (Mr. Peter Rees) in that he seemed to approve of the principle but says that if he finds there are no powers in existence he would not approve of the amendment.

I find it odd that the board does not already have these powers. The board has the monopoly of winning coal in this country. It allows a number of licences for the smaller mines but generally the whole of the consultancy of the country is part of the organisation of the board. There are some other consultants without the board but obviously, because of the monopoly position, they have tended to wither away over the years. This is why it is odd that this power does not appear to be part of the vires of the board.

The board has great experience. If we allowed it to give this kind of service it would be able to provide a complete service for the organising of coal mining in another country. It could organise it from start to finish, from the survey to the time when the mine was operating. In a contracting industry there must be an area for expansion. This was one of the philosophies behind our attempt to ensure that the board was able to participate in the investigation and exploration of North Sea gas. It is important that the board should be able to send out its teams on commercial terms and to cross-fertilise with countries overseas.

When I was in the Ministry of Transport we gave every encouragement to British Rail to provide such a service. It is one of the facts of life that if consultants go overseas they tend to recommend machinery and services from their own country. They do not always do so, but that is where the bias lies. British engineering has a great interest in the National Coal Board being able to exercise this kind of power because then it will be able to get a fair crack of the whip.

The Germans and the French have this power and send consultants to all parts of the world who recommend machinery and services from their respective countries. I will not go into the proud record of the National Coal Board. There are plenty of examples of its fine work. I hope the Minister will not approach this in a doctrinaire way but will give it a fair hearing. If he is not able to accept it tonight I hope that he will not reject it out of hand.

Mr. Tom Swain (Derbyshire, North-East)

Would my right hon. Friend not agree that, now we are in the Common Market and the Iron and Steel Community, our coal-producing friends in the Community have a decided advantage over us unless the Government accept this amendment?

Mr. Morris

My hon. Friend strengthens my argument. With the free movement of industry and workers these countries will have twice the edge on our industry. They will be able to roam this country and elsewhere. It is doubly important that our industries should be able to do the same. All I ask the Minister is that he should not reject it out of hand but should consider the representations that have been made. Let him enter into further talks with representative parts of our engineering industries and give the assurance that when the Bill goes to another place he will consider introducing an appropriate amendment. I cannot understand how other British nationalised industries have this power while the National Coal Board does not.

10.45 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Peter Emery)

The debate has been useful and I wish on behalf of the Government to say that of course we want to see the special expertise which exists in the National Coal Board, which is second to none in certain spheres of activity among the coal mining industries of the world, being used not only to assist other countries in their mining problems but also, as outlined in the clause, in helping British mining contractors and the coal preparation plant manufacturers in exporting their products.

The hon. Member for Pontypridd (Mr. John) began by talking about the particular factors of retreat mining, where we lead the world, and he is quite right. I wish also to refer to the remarks of the right hon. Member for Aberavon (Mr. John Morris), who said that the advice should be given on a commercial basis and that there should be a charge for the expertise in order that the NCB could obtain some benefit. That statement plucked at my heart strings. The situation, however, is one which deserves to be studied. We must understand that if we can obtain a share of this expanding market and export coal machinery it will be of benefit to our export trade and the board will benefit from the longer production runs, as was explained by the hon. Member for Pontypridd when he moved the clause.

I want to bring the House up to date and to deal with the point raised by the hon. Member for Normanton (Mr. Albert Roberts). The NCB has had discussions with the Association of British Mining Equipment Exporters—ABMEX as most of us know it—and with the British Consultants Bureau with a view to the board providing an overseas advisory service. It is important that such a service should be based upon co-operation with all the parties concerned and that the interest of the consultants in these matters should be brought in, because that is what people abroad want.

I understand that discussions have reached an advanced stage and I have every reason to hope that they will be completed shortly. The board has the power to undertake this form of overseas service. It does not need new powers. Any overseas activities which are not covered, as outlined by my hon. and learned Friend the Member for Dover (Mr. Peter Rees), could be covered by Section 2 of the Coal Industry Act 1949. That will enable the board to carry on activities prescribed in that Act outside Great Britain.

I am satisfied that an order under that section would be adequate for all purposes outlined in the clause and therefore I believe that points raised by hon. Members on both sides are fully covered. I am pleased to be able to say that the NCB is happy about its position and therefore I believe that the clause is unnecessary. I thank the hon. Member for Pontypridd for bringing this matter to the attention of the House because it has been a useful debate and I hope—

Mr. Eric Ogden (Liverpool, West Derby)

Is it correct that the hon. Gentleman says that if the board wishes to go into a form of partnership with private enterprise consultants it is free to operate in that way, and by so doing can even go ahead into other parts of the world, but that if it wishes to act as consultants and advisers directly to a foreign company or Government it would need an order to allow it to do so?

Mr. Emery

That is not quite the situation. The board can already give advice, usually not on a commercial basis, outside this country. I had already said that if the board wished to enter the type or structure which I have outlined powers exist for it so to do. I cannot, however, allow the word "partnership" to crop up, because consultants have to be very careful that they are not aligned with people who are actually marketing the machinery. So the British Consultants Bureau would not be able to go into that type of operation on a partnership basis. None the less, the scheme I have outlined would be possible.

Mr. John Morris

Do I understand that if an order such as the hon. Gentleman has mentioned were passed the new clause would not be needed, as all the powers it seeks would be covered by the order? Further, is the Minister now telling the House that, if the board so required, approval for the order would be given, and all the necessary preliminaries put into effect?

Mr. Emery

No, the right hon. Gentleman is not quite right there. What I am saying is that under the present legislation consultancy powers exist which the NCB has used. If, as has at one time been suggested, those powers were not adequate the position could then be covered by an order, and I have indicated that the Government would be happy to bring in an order to ensure that we could go forward on the lines I have outlined.

Mr. Alex Eadie (Midlothian)

To some extent the hon. and learned Member for Dover (Mr. Peter Rees) may regret that he was so quick on the draw by alleging that we were trying to embellish the Bill and indulging in political rhetoric. The Minister in his usual candid way has told us that the mere fact of bringing in the new clause is a contribution.

There seems to be unanimity between the two sides that if we can do anything to help exploit the country's commercial expertise it is a good thing to do. We are pleased that the Minister has spoken in that way, because some of us have been conscious for some time that there is a commercial advantage to be gained from using the board's technical expertise. There can be no argument about the fact that within the structure of the board—and this has become more apparent since our entry into Europe—we have probably the most highly sophisticated and technically advanced coal industry in the world. It would therefore be foolish if we as a nation were not to exploit that advantage to the full.

We may be talking here about employment. It has always appeared to us that there was scope for us to use the board's consultancy services to deal with contraction in the mining equipment manufacturing industries.

When we tabled the amendment I discovered that it proposed nothing new. We are proposing something that already comes within the ambit of the Gas Council. Paragraphs 68, 69 and 70 of the Annual Report and Accounts of 1971–72 of the Gas Council contain information on how the council sells its expertise. That is beneficial to the nation and spells out additional employment and prosperity. Paragraph 68 is as follows: British gas industry technology and expertise are being utilised to an ever-increasing extent in many regions of the world. During the year under review, support was extended to a number of British companies in connection with gas-related projects overseas; work was carried out in 14 countries, and the promotion and exploitation of process technology has resulted in the creation of a new industry—the substitute natural gas industry. The Minister will recollect that I have often questioned him on the experiment being conducted in Westfield, an opencast site in the county in which I live. If this new process is successful it will have dramatic results in relation to synthetic natural gas, and will mean prosperity for the people who have been engaged on the work.

Paragraph 69 is as follows: Consultancy agreements were entered into to provide assistance to such countries as Brazil, India, New Zealand, Indonesia, Norway, Russia, Poland and South Africa. Support was guaranteed for many other projects overseas, including several in the South American countries whose rapid industrial expansion has generated much interest in the increased utilisation of gas. Paragraph 70 states: Training facilities in several specialised fields were made available for visitors from Pakistan, Japan. Iran, Singapore and New Zealand, and visitors from many other countries were received. The report goes on to describe the technical processes that have been introduced.

The hon. and learned Member for Dover may be upset because he was so quick on the draw, but our proposition is not new. If the Gas Council does this, why cannot the National Coal Board do likewise?

I have been pressing the Government about the offshore engineering industry. Why should we have to depend on technology from Massachusetts for that industry? The difficulty there is that we do not have the expertise. I have appealed to the Government to build up expertise. The time will come when we shall want to sell that expertise overseas, because the search for oil will continue for another 30, 40 or 50 years. The possession of expertise is of great commercial and financial benefit to the nation.

I want to get clear the question of legality. To some extent legality was on our side when we started to probe the question of legal provision. But lawyers spoke in the debate, so in the way of legal argument I have had it.

The Minister said that if necessary the Government would be prepared to bring in an order which would amplify and strengthen the situation. I understand, therefore, that the hon. Gentleman is taking account of the point I am making, perhaps inadequately, by substantiating the fact that in the NCB we have great expertise which could be profitable to the nation. Presumably he means that by such an order he will give the NCB the aid which will enable it to perform a task similar to that of the Gas Council and which is so profitable to the nation.

11.0 p.m.

Mr. Emery

I have the pleasant duty, in which I am certain I have the support of all right hon. and hon. Members, of congratulating the hon. Member for Midlothian (Mr. Eadie), on his first speech from the Opposition Front Bench. I sincerely hope that he will make many more speeches from the Opposition Front Bench.

I do not pull his leg, however, when I say that he must know that we have a high opinion of the standing he has achieved both in the House and in the Labour Party as an expert on coal mining, and I am delighted to see that it has brought him his promotion to the Front Bench. [HON. MEMBERS: "Hear, hear."] I realise only too well the expertise which the British gas industry has been able to use in advising people in many parts of the world—indeed, not only the supply of expertise but through gas contracts as far away as Jakarta. It is an expertise which has been built up in friendly co-operation with gas consultants. I believe that if it is necessary to bring in an order to achieve that type of approach for the coal industry, it will fall within the context which I gave the House earlier. With that assurance, I hope that the motion and clause will be withdrawn.

Mr. John

In view of what the hon. Gentleman has said, I believe that the National Coal Board and the other interested parties will have every incentive to come to a quick agreement. I beg to ask leave to withdraw the motion.

Motion, and clause, by leave, withdrawn.