REGIONAL GRANTS

HC Deb 20 February 1973 vol 851 cc385-407

Mr. Michael McGuire (Ince)

I beg to move Amendment No. 3, in page 8, line 38, at end insert: 'including such sums as are necessary to ensure that the long term capacity for utilising coal in the generation of electricity is secured'.

Mr. Deputy Speaker

With this we shall take Amendment No. 4, also stand-in the name of the hon. Member for Ince (Mr. McGuire) and his hon. Friends, in page 8, line 40, at end, insert: 'or be less than £150 million'.

Mr. McGuire

I shall be concentrating mainly on Amendment No. 3. Amendment No. 4 is a floor amendment because the previous provision for assistance for extra coal burn—£45 million—in a previous Act, as my hon. Friend the Member for Chesterfield (Mr. Varley) said, was only half used. Considering the state the industry was in, that was probably a misfortune.

Clause 9, which we believe is the most important, is one which we wish to debate again on Report, because when we debated it in Committee we were not satisfied with the short and curt answer we received from the Minister of State at the Welsh Office.

The Government tell us that the purpose of the Bill is to support the industry, certainly for three years, and probably for five. We think that this is not looking to the long term half enough. We accept the tactics in the Bill but dispute the strategy. The Minister for Industry on Second Reading on 21st December, as reported at column 1607 of the OFFICIAL REPORT, told us that three-quarters of all miners work in special development areas or assisted areas and that a further 15 per cent. are employed in derelict land clearance areas, and that these areas have lost 230,000 jobs in the last decade. I and my colleagues believe that any further loss of jobs in these regions would turn them into deserts. That would not compensate us for the deserts we have lost overseas.

We believe that the way to maintain present employment and to increase it is to ensure that the present amount of coal burn is secured and to make plans to increase it. This means building more new power stations. Drax B and West Burton are a must. Drax B was given ministerial approval a long time ago. It was announced by my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever), on 29th October, 1969.

Contrary to what the Minister said in winding up the debate on this clause in Committee, this is very relevant to the Bill because the Bill is designed to give a feeling of security to men in the coal industry. What better boost to morale could they have than an announcement that the Government would take the necessary steps to have Drax B built, together with West Burton? That would galvanise the industry and put new heart into men and management. That is the one reason for the Bill. We have the argument that if the Government were to announce a new coalfired power station now, it would be six years before it came on stream and that it would have no immediate effect, but that is all the more reason for announcing it now.

I am a little puzzled about the Minister's powers in regard to coal-fired power stations. In Committee the Minister said that Drax B was in the programme and still is, but that unless the CEGB requested permission to build it nothing would be done about it. That cannot be the position of the present Government or any other Government. I agree with the doctrine of no governmental interference in the day-to-day running of the nationalised industries. But the securing of an adequate supply of power using the national resources in the widest and best interests of the community is far removed from that doctrine if applied in the manner which the Minister has indicated when we have debated this matter.

The Government's policy is to say, "It is there. Planning permission was given, albeit by a previous Government. We have not removed it from the programme but unless the CEGB requests permission to build we shall do nothing about it." If that policy were carried out, it would amount to dereliction of duty because it would undermine the whole effect of the Bill. The Government would be giving for short-term measures something which is being undermined right from the start, because coal burn is inextricably linked with the fortunes of the National Coal Board. Unless we can guarantee and improve that position, in three to five years' time, with the extension on the Bill, we shall be coming forward possibly for another resuscitation job, whereas we have the chance to do something positive about it now.

New coal-fired power stations are absolutely necessary in the interests of not only the National Coal Board but also the nation. We all know of the worldwide concern about the energy supply position. Now that the Americans have settled the Vietnam question we know, from The Times of yesterday, that President Nixon's first priority is to secure for the United States of America their energy supply position. He does not want that to be jeopardised. He can read the signs. I believe that our Government could read the signs when they introduced the Bill. We want to help them read the signs a little more clearly.

The Government should step in. Their power is not negative. For proof of that we can read Select Committee reports. The Chairman of the CEGB, Mr. Arthur Hawkins, said in evidence to the Select Committee that the Hartlepools nuclear power station was not programmed for an increase in power, but that it was to replace obsolete stations. So we want new coal-fired power stations to replace obsolete coal-fired stations.

One of the most powerful arguments of the CEGB is that the older coal-tired power stations are more costly than it would like them to be, but that its best and most profitable power stations are coal-fired stations. Therefore, if we can get modern coal-fired stations replacing our obsolete stations, in addition to Drax B and West Burton, the coal burn which the Government want and for which they have made provision in the Bill will be dramatically increased.

The power of the Minister is not negative. It is not just to say that it is in the programme but that unless the request is made there is little that he can do although he would like to do something to help us. Hartlepools was helped. The Government had to give permission and to find the capital. One of the pressure groups in the nuclear power station industry has been the builders of the power stations, who have pressed the Government to influence the CEGB. Mr. Arthur Hawkins says that it was not the board's wish at all. There was pressure on the Government, who must have used the stick or the carrot on the CEGB.

11.15 p.m.

Everyone knows that my constituency is Ince. When I heard the announcement of an oil-fired power station at Ince I rushed around for clarification, but it was the Ince in Cheshire. Mr. Hawkins tells us that the Ince power station was also the direct result of Government intervention. When it has been a question of building coal-fired power stations, the Government have shown a supine attitude. When it has been nuclear power stations, or Ince B oil-fired, they have been galvanised into action. We want to see some of that action resulting in coal-fired stations, like Drax B and West Burton, and a replacement programme for our obsolete coal-fired stations. That would be a wise policy which would underpin the Bill.

In Committee, my hon. Friend the Member for Mansfield (Mr. Concannon) rightly said what we have said in previous coal debates, that, unless we can secure for the National Coal Board a long-term coal-fired power station policy and an increase in coal burn, all the efforts on the Bill will prove to have been in vain. We have such a chance. The Minister has the power, it will make the Bill sensible, and we shall start on the road to a wise energy policy. Otherwise the Bill will be something that no one in the House or the industry really wants—merely a holding operation.

I am looking forward to the Minister telling us that he is convinced that the power station programme as I have outlined it needs this policy. I hope that he will not simply say that the CEGB has not asked about it yet. The CEGB unfortunately will not come forward. My hon. Friend the Member for Chesterfield in Committee quoted some damaging statements by the CEGB, showing its attitude to coal-fired stations—in colloquial language, it will not touch them with a barge pole.

I have here a summary of the CEGB's Annual Report for 1971–72. About ten times in various paragraphs, it says, in effect, "Unless we are forced by the Government, we shall not have any more coal-fired power stations." The board is prepared to risk our energy supply future on systems as yet unproved. This is dangerous. It is not in the national interest.

We ask the Minister to get off his backside and tell the CEGB that it will have these coal-fired stations. It is in the interests of the board, the industry and the nation. I ask the Minister to get cracking. Without such a policy the Bill will be simply a holding operation. We believe that it could be the start of a real energy policy for this country.

Mr. Adam Butler (Bosworth)

The hon. Member for Ince (Mr. McGuire) has managed to bring in a pretty good, if short, review of energy policy on Amendment No. 3 and possibly on No. 4.

I should like to take up some of the points that the hon. Gentleman made. Whether his information is totally different from mine regarding generating costs, I do not know. My information comes from Mr. Hawkins, whom the hon. Gentleman mentioned on a number of occasions. I was given comparative costs of generating from nuclear fuel, oil and coal. The coal-fired stations used were the last eight to be built, so presumably they were the most efficient and economic. The average costs for electricity generation from coal are the most expensive of the three fuels. Indeed, oil with its handicap of the fuel levy is equal on these figures to generation from nuclear power. The Magnox stations were running below capacity at that time, because of technical difficulties. However, taking the fuel levy off oil, the costs from oil generation were significantly better and more attractive than generating from coal. This is a somewhat different picture from that presented by the hon. Gentleman.

I should also like to take up the point about the fuel scene as it differs between the American situation over the next few years and our own. The Americans are facing what can only be described as a serious crisis in the next decade regarding fuel supplies. A number of authorities have shown that the Americans will be importing at least—possibly considerably more than—half of their oil supplies which will impose considerable strains on, among other things, their balance of payments. Therefore, they must look to improving their indigenous sources of supply.

However, in our case it can be shown, again on good authority, that by 1980 we shall nearly be self-sufficient from our own sources of supply provided that we continue to generate electricity from coal to the present extent and provided, as seems likely, that there are one or possibly two more major finds of oil in the North Sea. This presents a totally different picture of the Government's fuel policy.

Those two points together suggest that the hon. Gentleman's argument that we should be investing in new coal-fired stations is completely wrong. I might go with him on dual firing, but certainly not on the expenditure necessary to build entirely new coal-fired stations.

The hon. Gentleman argued that it would put heart into the industry if such stations were built. Yet at the same time in Amendment No. 4, by trying to put a floor rather than a ceiling on the expenditure, he is assuming that there will be contraction in the industry. With respect, he cannot argue both ways—argue that the industry should expand and supply more coal for electricity generation and, in another amendment, both being taken together for the purposes of the debate, imply that there will be contraction because he is asking for a minimum of £150 million to moderate contraction in the industry.

It is unrealistic not to expect some contraction to take place, but we cannot at the moment foresee how much. It will depend upon many factors. It will depend on the pattern of the fuel scene over the next few years. It will depend not least upon the successful use of the moneys provided under Clause 6 for subsidising coal for electricity generation. But the main factor on which it will depend is the reaction of the industry and the men who work in it to the Bill, and one can argue, as I seek to do, that the rate of contraction, and therefore the rate of redundancy, will depend to a large extent on them.

I believe that they will accept both the challenge and the opportunity which the Bill offers, and therefore at this point I reject the concept implied in Amendment No. 4 of a minimum amount.

Mr. J. D. Concannon (Mansfield)

On looking through HANSARD I see that I had quite a good run on this clause in Committee. I said then that I was disappointed at the outcome of the debate on the clause and that we would have to return to it on Report. Having listened to the hon. Member for Bosworth (Mr. Adam Butler), all that I can do is to invite him to look more closely at the clause and the Bill which I regard as a three- to five-year short-term measure.

The hon. Gentleman referred to Mr. Hawkins. Having met him, I assure the hon. Gentleman that my opinion of Mr. Hawkins is that he could make a case on any power station on any figures that anyone cared to give. I thought that he got to the point of confusing everybody at the meeting. The only relevant fact that we got out of him is that the Radcliffe-on-Soar power station is the cheapest. That is the last station to come on to generating power, and it is the last coal-fired station to be built.

Mr. Butler

Does the hon. Gentleman know of any reason why Mr. Hawkins should present an incorrect picture to me? I asked him a straight question about the comparative costs of generating electricity from the various fuels and he presented the figures in what I thought was a fair way. He gave an average picture of costs in each case, and that is what I have presented to the House.

Mr. Concannon

All I am saying is that, having listened to Mr. Hawkins, it is my view that he could prove anything to anyone's satisfaction. He uses the snake in the tunnel argument, and it all depends on where one runs the line or the tunnel. I do not want to enter into an argument about this.

The hon. Gentleman said that the future of the industry depended upon the men in it. To a great extent I agree with him, but if the men do not get the hardware the Bill will become a nonsense. No matter how good the men are, it is no use asking them to increase their production if there are no outlets for it and no hardware with which to do the job. The outlets are the new power stations of Drax B and West Burton. If these do not come into stream then one can say that by 1980, no matter how efficient the National Coal Board or the miners are, there is bound to be a gradual rundown of the industry.

I do not want to detain the House, and I shall conclude by drawing attention to Amendment No. 4 which envisages a sum of not less than £150 million. The National Coal Board has an opportunity to give regional grants to the tune of £210 million over three years, or £70 million a year. That is the minimum. We tried in Committee to discover what criteria the board had to fulfil to claim regional grant. We thought the provision woolly and on Second Reading extracted a promise from the Minister to spell out in Committee the intentions of the Clause. But we were given no such information. I expected the Government to table an amendment to Clause 9, but again I have been disappointed because no such provision has been tabled. Therefore, Amendment No. 4 seeks to protect the industry to ensure that the words which have been uttered in these discussions are put into concrete form in the form of the sum of £150 million over three years.

11.30 p.m.

Mr. Peter Rees

When I read Amendment No. 3 I am reminded that my Conservative predecessor in the Dover constituency, Sir John Arbuthnot, was primarily responsible for ensuring that the Richborough power station was designed to burn coal—an achievement for which he received inadequate acknowledgment. Times have changed and there is now an assured future for the East Kent coalfield because coking coal can readily be sold to the steel industry.

I recognise that there are less-favoured coalfields, and this is where I take issue with the hon. Member for Ince (Mr. McGuire). The Bill is not a holding operation. It is not designed to remedy the ravages, if that is what they were, of the past. It is designed to provide a massive injection of capital to make the industry commercially robust, viable and competitive. It will provide reassurance to those who work in the industry because it will indicate that the Government believe that it has a commercial future and is prepared to provide the necessary capital to exploit the markets which are open to the industry.

It must be emphasised that we have the largest coal industry in the Common Market. We have the men, the expertise and the reserves of coal and now, thanks to this Bill, we shall have the capital. I do not believe we need go beyond that and introduce a permanent distortion into another industry. I hope the hon. Member for Mansfield (Mr. Concannon) will forgive me for taking issue with him. He says that this is only a short-term method. Clause 9 refers to the period 1974–1976. But the amendment says: including such sums as are necessary to ensure that the long-term capacity for utilising coal in the generation of electricity is secured". In other words, the Opposition are suggesting that the Central Electricity Generating Board should be subsidised to adopt a form of generation that it would not adopt on a purely commercial analysis.

Mr. Concannon

That is entirely our suggestion. I do not dissent from what the hon. and learned Gentleman is attributing to us. Unless we have that provision the Bill is a nonsense. It is a nonsense if we do not have the outlets in the 1980s for the coal that we are now giving the NCB the opportunity to dig. That would mean chucking good money after bad.

Mr. Rees

I understood the hon. Gentleman's theme. I was merely picking up a point he took against my hon. Friend the Member for Bosworth (Mr. Adam Butler), whom he accused of not having read the clause. My hon. Friend is capable of looking after himself, but I was pointing out that the amendment is not short term, but, as the hon. Gentleman rightly said, is intended to provide a long-term market for coal that might not otherwise exist if the CEGB analysed the position rigorously and commercially.

Mr. Concannon

I could not have put it better myself.

Mr. Rees

It is rare for me to receive a compliment from the hon. Gentleman, so I am doubly grateful for it.

The hon. Gentleman is asking that, on the basis of a lavish injection of public money, a decision be taken which might not be justified on strictly commercial grounds. There are good commercial and strategic reasons for basing ourselves a little more on coal, but let us not do it just because of the liberal infusion of public money, because we are nervous about the coal industry. We must get away from this pessimism. The point of the Bill is that the industry now has the capital. It has the reserves, the men, the money. Cannot we look forward to a rosy future? Must we introduce this distortion into another industry?

The amendment offers the coal industry a crutch at the expense of another industry, a crutch that the coal industry no longer needs. I hope that the hon. Gentleman will not feel it necessary to press the amendment to a Division.

Mr. John Golding (Newcastle-under-Lyme)

For most of today we have discussed the steel industry. The closure of steel plants, such as Shotton or possibly Shelton, has an impact in my constituency not only upon steel workers but upon the mining industry. The Government's steel proposals will reduce the demand for coal from the pits in my constituency. Therefore, we must look for alternative, assured markets. One market over which we have some degree of control is that of the Central Electricity Generating Board.

This country has no fuel policy. We have a system of competition between oil, gas and coal and possibly atomic energy. Each management does its best to look after the efficient running of its own industry, but what is best for each industry is not necessarily best for the country.

Decisions that can be inconsistent with one another are being taken by individual nationalised industries. That is the point of asking that the CEGB be asked to encourage not just dual-firing but investment in coal-burning power stations. It is nonsense to pour public money into an industry like the coal industry in a variety of ways and at the same time to take decisions about investment in electricity generation which mean there will be no demand for coal. The investment decisions should be taken together.

I link with that the thought that one of the oddities at present is that in each of the nationalised industries there is a pricing system based on Government interference. At the same time it is clear that nationalised industry investment decisions are based on the present level of prices. Very little consideration is being given to the likelihood of changes in price levels.

It is almost certain that the price of oil will rise dramatically, even if Britain becomes self-sufficient in oil in the 1980s. If America has to import half her oil requirements, that of necessity will have a tremendous impact on the world price of oil, which will rocket. If British oil produced in the 1980s is exported to America, it is not likely to be sold to the CEGB at a price lower than the world price.

Although the production of British oil is important strategically, it is also important because it means that we can no longer use the argument that we must use our indigenous fuel, coal. All that matters is that the world price of oil, including British oil, will rocket. Is not it nonsense in those circumstances to be investing heavily in oil-burning power stations when it is known that the price of the raw material will increase by the 1980s.

This point applies to dual firing. It is not good enough for the CEGB to say that in order to meet the situation where the price of oil is likely to rocket in the 1980s it will now have dual-firing systems, burning oil until it becomes more expensive, and in the 1980s possibly turning to coal. Recent experience has shown that it is not possible to open pits which have been shut and to increase, reduce, increase, reduce output. Once it has been decided not to extract coal, that coal is denied us for a long time to come except at great expense.

It is an absurdity for decisions being made in the nationalised industries not to be made together, taking account of the forecasts of the very high price of oil in the 1980s.

11.45 p.m.

Mr. Joseph Harper (Pontefract)

The hour is late and most of what can be said about our amendments has already been said. Clause 9 was inserted into the Bill by the Government to assist the board in handling contracts with industry. The industry is in the assisted areas which is a new word for development and intermediate areas. That is the nub of the problem. The hon. Member for Bosworth (Mr. Adam Butler) made two points about Mr. Hawkins and the figures he had received from him. A few months ago I and many of my colleagues visited Mr. Hawkins in the East End of London. When I came away from that meeting one of my colleagues said, "What did you reckon to that, Joe?" I said, "Not much, he's no friend of ours".

That was forcibly brought home. Mr. Hawkins will not use coal if he can use some other kind of fuel. "Sufficient unto the day is the evil thereof" is the motto of Mr. Hawkins. He does not want coal. He made that perfectly clear and then he had the audacity, when we were leaving, to say "You ought to be the electricity lobby, not just the coal lobby". I could have told him, if I had not been polite, what he could have done with that one!

Anyone can make figures fit. In the figures which Mr. Hawkins gave it was made clear that oil was as cheap as nuclear energy. I do not know about that, because the Magnox station programme was, in our opinion, much too large. I do not know whether development costs were taken into account. Those would make it uneconomic. We are trying to get a long-term solution to the coal problem. We have reserves of 100 years waiting to be mined. As my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) has said, once men leave the pits they do not come back. We cannot re-open pits that have been closed. We cannot return to them in 20 years' time when the price of oil is astronomical and the supply of nuclear power has not risen to the heights expected of it. Once the men leave they do not return.

My hon. Friend the Member for Mansfield (Mr. Concannon), my hon. Friend the Member for Midlothian (Mr. Eadie), myself—and all 29 of us who were formerly miners will certainly not go back to the pits. What applies to us applies to others.

Mr. Peter Rees

May I correct the hon. Gentleman on one point? Although I have not worked in the industry—leaving aside politics—there are many of my constituents who work in the pits in East Kent. In the summer they work on the ships and in the winter they work underground, where it is much warmer.

Mr. Harper

They could do many things in the summer. I am talking about the men who dedicate their lives to working, in the industry. We have to plan our energy policy. If we can provide a fuel policy, so much the better. As my hon. Friend the Member for Newcastle-under-Lyme said, oil will be in such demand that future supplies will not be able to meet it. Whenever the Americans come in they force up prices. It has happened in Hong Kong, in Vietnam and wherever the Americans have gone. They have forced up prices and they will force us out so that we shall have to depend on coal for the next 30 or 40 years at least. Until we get the advanced gas-cooled reactor we shall not get economic power from nuclear stations. It takes six years from the time a decision is taken to build a power station until it comes into operation.

It is no good mining coal if there is nowhere to burn it and the only place to burn it is in coal-fired power stations. If we are to derive the full benefits of what the Government are proposing in the Bill this point must be dealt with. In a recent debate on Yorkshire and Humberside I asked for two new pits to be sunk in the Selby area. It is no use operating pits which cannot produce coal economically because the seams, the conditions and the geological strata are bad—pits where the men are working too hard for the returns. In order to burn the coal that these two pits will produce we have asked that Drax B should be coal fired. It was said earlier that my right hon. Friend the Member for Manchester. Cheetham (Mr. Harold Lever) decided that Drax B should be coal fired. That decision was made before my right hon. Friend became a Minister by my right hon. Friend the Member for Barnsley (Mr. Mason). It came as part of a package. I cannot remember the names of the other two or three stations, but one was to be oil fired, Drax B was to be coal fired and the third was to be nuclear powered.

We must pressurise the CEGB into making a firm statement that Drax B and West Burton should be coal fired and that there will be an immediate start to the planning and building of these stations. The fact that the Government are providing £210 million over three years does not mean that the money can be thrown away. It should be spent wisely and well, but it should be spent in the industry—and what better way to spend it than in the way that I have suggested?

During that debate the Minister, in order to get out of replying, said that he would ask the Chairman of the NCB to reply to me. A few weeks later I received a letter in which the Chairman said that I had suggested that the Minister should press the Board to sink two new collieries in the East Riding of Yorkshire in order to increase productivity by working thicker seams. Drilling is now in progress in the Selby area to determine the extent, thickness and quality of reserves of coal, the existence of which was proved by preliminary drilling during the period 1964 to 1967 to establish the north-easterly extension of the concealed coalfield of Yorkshire. Current drilling results are encouraging but it is too early to evaluate the full potential of the coalfield extension, or indeed its limits, and further drilling will be necessary before it is possible to assess the mining prospects in this district. But the jewel in the reply is where it goes on to say: There are, however, more immediate prospects for two new drift mines in our Barnsley and South Yorkshire Areas. The board therefore agrees that there is a case for new mines, whether they be deep or drift, in order to build up long-term security for coal supplies.

I remember a former Minister of Power producing in 1967 a White Paper, with which we never agreed, in which he virtually asked, "Tell me where I can burn the stuff—I have mountains of it." That coal has now all gone. If anything was proved wrong it was that 1967 White Paper. We do not want any more disasters like that, because ours is art industry which, more than any other, has had the traumatic experience of losing men through redundancy. The money which the Government have put into the industry must be used wisely and well in the long-term interests of coal mining. It must not be dissipated.

By the 1971 Coal Industry Act a sum of £45 million was provided for extra coal burners, of which about 50 per cent. was used. All we now ask is that the money provided be used properly to give us value and make the industry viable and able to meet the country's demands on it the most economical way.

I do not know whether the Government intend to accept the amendment, but I shall be very surprised if they do. I must point out that when he was Chairman of the Public Accounts Committee my right hon. Friend the Member for Cheetham, in the Second Report dated 24th January 1972, showed conclusively, by questioning officials at the DTI, that Magnox power stations are not economical, that it will not be until 1985 at the earliest that nuclear power stations with gas-cooled reactors, and perhaps with the fast-breeder reactors, will generate energy in such quantity that coal, oil and natural gas will not longer be needed. We have not reached that stage yet, and no-one now in the House will live to see it reached. As it is, we are dependent on coal, and we have plenty of it. The Minister should give serious consideration to the amendments.

12 midnight.

Mr. Emery

I fully appreciate the way in which the arguments have been advanced, but before answering them let me make it quite clear that the amendments relate to Clause 9 which deals specifically with regional grants. The clause gives the Secretary of State a new power to make regional grants to the board in a way that we have never had in any previous coal legislation. I am delighted to see the hon. Member for Mansfield (Mr. Concannon) nodding his head—he is an expert in these matters. I think the House will welcome this innovation which will be of assistance to the industry.

Amendment No. 3 attempts to secure the utilisation of coal in the generation of electricity. But the grants should be used for the utilisation of domestic coal, coking coal or any other sort of coal. The Government do not want to impose any limitations, and the amendment appears to introduce a specific limitation.

Amendment No. 4 substitutes a bottom stop for a top stop by the insertion of the words or be less than £150 million". Hon. Gentlemen on the Opposition benches I am sure wish to be as careful in the expenditure of the taxpayers' money as we do. If they were the Government they would never insist that a certain amount of money must be spent regardless of the conditions. No reasonable Government in any legislation would attempt to introduce a bottom stop as the amendment seeks to do.

The hon. Member for Mansfield in Committee said that he would want to pursue this matter further on Report. I will tell the House how we see the regional grants being used, which is what the amendments are designed to probe. The amounts will be decided annually in advance after a review of the hoard's plans and annual prospects. The amount of the grant will depend absolutely on the annual operating forecasts of the NCB and the requests made by the NCB to the Government. It is not tied exclusively to specific coalfields, because the board will continue to be managed as a whole. The emphasis will be on moderating contraction, particularly in the assisted areas. I am sure that is the emphasis which hon. Members will wish to support.

The annual amounts will depend on the board's performance in the various regions, and the external factor of the amount of coal that has been burned. The grant is for recurrent expenditure. The board's capital expenditure will be met from its own resources and by borrowing from the National Loan Fund. The amounts will be decided after full consideration of the investment programme. The provision extends only for three years, and normal parliamentary control will apply to the expenditure.

This assistance represents a new aspect of coal legislation. It is designed specifically to aid mines in the assisted areas where closures produce problems of greater magnitude than elsewhere. That is basically the philosophy on which the Government have been operating.

The hon. Member for Mansfield will recall an answer I gave last week about Drax B power station. I pointed out that whilst planning permission had been given for Drax B, no further application had come from the Central Electricity Generating Board. Part of the argument of the hon. Member for Mansfield, the hon. Member for Ince (Mr. McGuire) and the hon. Member for Pontefract (Mr. Harper) is that, irrespective of that, the Government should force the hand of the board. That was the basis of their approach. But Section 2(5) of the Electricity Act, 1957 says that the board has a statutory duty …to develop and maintain an efficient, coordinated and economical system of supply of electricity in bulk for all parts of England and Wales.… It was given the responsibility by this House and no Minister should attempt to override that statutory duty. The board will come forward with an application for a new power station when it feels it is necessary to meet requirements.

I do not think that the House wants, and it seems fairly nonsensical to suggest that it would want, the board to have so many power stations as to provide a level of generation very much greater than the nation needs. I do not believe that any Minister worth his salt would advocate that type of policy.

Mr. McGuire

Mr. Arthur Hawkins told the Select Committee on 2nd August: As I see the responsibility placed on me and on the Board, it is to produce electricity economically.…As you know this has been published. The government have stepped in and have made arrangements. He was referring to the early ordering of the Ince B oil-fired station. He went on: As I see it, this is something we can do in collaboration with the government but I think it is arising from the initiative of manufacturers and government and not from the initiative of the CEGB. So the Minister does have a part to play in this.

Mr. Emery

It would be wrong to demand a degree of ordering which goes against the legislative requirements of the Act. The Ince B power station would have been ordered in any case a few months or perhaps a year later. It was a requirement of the board. But the Government said to the board, as they said to all the nationalised industries, that if it could accelerate certain projects it was planning it should do so, in view of the unemployment situation. That policy received the support of both sides of the House, and it was sensible. I accept the points made by the hon. Member for Pontefract and by my hon. Friend the Member for Bosworth (Mr. Adam Butler) about world energy structure and the immense importance and relevance which all nations will have to attach to the statement which we are informed President Nixon will be making within the next few weeks. I believe that he will be putting forward expenditure proposals for the American nation for drilling for oil, obtaining new hydrocarbon sources, the need for further development of coal and for the whole gamut of energy in America. There will be a shortage of oil and hydrocarbons, if one looks at the increasing demand which America, Japan, Europe and ourselves will make over the next decade or two. For that reason and many others, the Government have thought it right and proper to spend the massive amount provided for in this Bill an amount which nobody should underestimate. The Government want and intend to have an industry which can viably have mechanisation, modernisation and financial support.

Mr. Harry Ewing (Stirling and Falkirk Burghs)

We have heard that before.

Mr. Emery

Of course we have, but that does not mean that it is wrong to try to work for it. That is surely what the coal mining industry wants more than anything else. One of the most encouraging things in the working out of this Bill was the way in which all three unions co-operated, jointly with the National Coal Board.

Mr. Edwin Wainwright (Dearne Valley) rose—

Mr. Emery

The hon. Gentleman, who has not spoken in the debate, has a right to intervene in a coal mining debate.

Mr. Wainwright

In the efforts to see that we have a viable coal-mining industry, will the Government bear in mind the wages of coal miners so as to make sure that we have the personnel essential to provide the required coal?

Mr. Emery

I hope we shall not get into a debate on wages in coal-mining industry. The situation has been clearly understood by the unions as well as everybody else—that management, Government and unions all have to work to contain costs. In the 20-point plan which the unions put forward, they accepted that increased wages could be achieved only by containing costs and dealing with productivity. Nobody, including the miners, would want to see the industry harmed all over again as it was last year.

Before I get more out of order, I shall come back to the debate on the amendment, which has been useful in allowing the House to obtain information from the Government on the manner in which regional grants will be used. For all the reasons I have given we would not want a bottom stop, nor to have one type of use spelt out. That would be unacceptable to hon. Gentlemen opposite. I hope the debate has been useful, with the Amendments as a basis for discussion.

12.15 a.m.

Mr. Eadie

I am very grateful to the Minister for his complimentary and encouraging remarks towards me during our previous debate. I shall not detain the House long.

The debate has been well worth while. My hon. Friend the Member for Ince (Mr. McGuire), in his customary way, told the House that one does not have to gaze into the crystal ball because one can look at the book. Looking at the book one finds that there is a worldwide shortage of energy. The House would be rather foolish if it ignored that factor which has emerged. Indeed, my hon. Friend advanced a very powerful case for coal-fired power stations. I concede to the Minister that to some extent we return to the debate on Clause 9. I was not a member of the Committee because, like the Minister, I was involved in other Committee work. I still am so involved, and have been all day. However, I have read all the debates, as he has.

When we were debating Clause 9 there was an argument about the whole Clause, that it introduced, as the Minister said, a new aspect in relation to Government assistance and sustenance to the mining industry. My hon. Friend the Member for Mansfield (Mr. Concannon) talked about "may" and "shall". We felt that it was too permissive, and that the Bill would certainly have been stronger if the permissive aspect of Clause 9 were removed and more mandatory provision were made about how the money should be allocated and spent.

The Government did not agree about that. I understand the Government's point of view. But this fits in to the whole question of coal-fired power stations. In answer to the Opposition, the Government developed their argument that they were talking primarily about assisted areas and that, therefore, the money would be more or less earmarked for the assisted areas. They dealt with the question of helping, probably, pits or areas which had been uneconomic, and suggested a genuine attempt by the Government to try to modify the severe contraction in industry in the assisted areas.

There is logic in what my hon. Friends have said. If one talks about assisting assisted areas, one then talks about the outlet that the production of coal has in those areas. The main outlet for the mining industry at present is coal-fired power stations. Therefore, it is logical that my hon. Friends should argue on the lines that coal-fired power stations should he earmarked for some of the money. We were not talking about just first aid. We always appreciate first aid, but we were thinking along the lines of giving more adequate sustenance.

The name of Mr. Hawkins has emerged in the debate, and various comments have been made. To some extent I am sorry that it was mentioned. We have credited Mr. Hawkins with capabilities that he does not possess. The hon. Member for Bosworth (Mr. Adam Butler) introduced the name. Neither the Government Front Bench nor miners will thank the hon. Gentleman for trying to suggest to the House that if it wants to know anything about energy policy it should discuss it with Mr. Hawkins. Mr. Hawkins knows something about the electricity industry, but he is not a wizard on the question of an energy policy. He has the responsibility for running a very important industry. I am sorry that the hon. Gentleman brought him into the discussion.

We have met Mr. Hawkins. His philosophy is that an energy shortage is propaganda. Whenever he said that to us, any meaningful discussion was terminated. As my hon. Friend said, if one reads the book, one knows that there will be an energy shortage.

Mr. Adam Butler

I would not want the hon. Member to misrepresent me, as he has done in two ways. First, when he checks HANSARD tomorrow, he will find that the first reference to the chairman of the board was by his hon. Friend the Member for Ince (Mr. McGuire). Second, my only reference to him was to quote him as a source of information about the comparative costs of generating electricity from different fuels. As the hon. Gentleman said, surely the one thing the chairman of the board knows about is electricity generation and its cost.

Mr. Eadie

I try to speak with conviction in the House and I never willingly give offence to anyone, but I am very aggressive in the way I speak. It is perhaps the way I was brought up. I have spoken more at the pithead than in the House of Commons. One tends therefore to develop a style that people sometimes misunderstand. If I misrepresented the hon. Gentleman, that was not my intention.

But the name of Mr. Hawkins was brought in. The hon. Gentleman must concede that the reports of the CEGB and SSEB show that there has been a campaign by those organisations. The miners in Bosworth will not be pleased with the hon. Member's contribution. He brought in the hoary old argument about the fuel tax. It is a source of revenue, and if the Chancellor decided that it should go, he would have to look elsewhere for a source of revenue. We have argued this inside out.

The hon. Member was very suspicious about a national fuel policy. We have some technology with regard to nuclear power stations, and they are producing and generating electricity, but for £2,000 million and the contraction of the mining industry, it has not been a good buy. The hon. Member may appreciate that argument, because he was talking about what was commercial.

There will inevitably be contraction in mining if we do not, for example, do more pit sinkings. Our point, which I think the Government are coming around to—this is part of the reason for the Bill—is that this country can no longer afford to watch the mining industry contract as it has been doing. We believe that it is in the interests of the nation that the industry should be sustained and a level of production maintained in it. Some hon. Members might suggest that this argument whether there should be contraction arose from the Rothschild "think tank" which we used to discuss. However, we are satisfied about this matter.

If the hon. Member for Bosworth is concerned about profitability and viability, I have some figures about energy requirements in this country. Britain is at present dependent on imports of about 45 per cent. of our energy. So what are we worried about? It is a substantial figure. Therefore, if we can maintain a strong, viable coalmining industry, we should not be looking about trying to contract any indigenous resource; we should be looking to contracting some other resource outwith. As we are members of the Common Market now, that 45 per cent. is more in the region of about 60 per cent.

I should have liked to go on at some length, but I will close on this point. The Under-Secretary mentioned that the predicament of energy shortage in the world was highlighted because of the American experience. Many people are no doubt prepared to predict that because America has done the necessary study and work, because it is a large consumer of energy, and because it finds that it will no longer have indigenous supplies of energy, it will probably have to devalue its currency again. This is very serious. It is serious in both British and world terms. If America has an appetite for ever more energy, there will be less available for other parts of the world. In consequence, the price factor will probably increase.

The Government's policy of saying, "Yes, we want to maintain a strong, viable coal industry", is not propaganda. The evidence and the figures are there if we want to examine them. I counsel the hon. Member for Bosworth and other hon. Gentlemen to study our energy requirements and to realise the serious predicament in which we are. If they can introduce some morale and hope into the mining industry and convince miners, who work in a dangerous, arduous job, that the nation is starting to plan its indigenous energy resources, not only the miners, but the whole nation, will gain an advantage.

I should have liked to develop other matters. However, the debate has been worth while. I hope that the statements that have been made by my hon. Friends and I will be listened to, not only by the miners but by the country at large.

Mr. McGuire

Though I am not absolutely satisfied with the answers that the Minister has given, we have had some clarification on regional policy. We hope that our arguments about the coal-fired power stations will percolate through and that we shall get some action in that respect. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.