COAL INDUSTRY

HC Deb 04 December 1974 vol 882 cc1854-68

7.14 a.m.

Mr. David Crouch (Canterbury)

The House is being asked to consider giving greater assistance to the coal industry. It is this subject to which I shall address myself at this hour of the debate. I do not know whether I should call it a late hour or an early hour. It is certainly the beginning of a new day. In some ways it is the beginning of a new day and a new era in the coal industry.

Like all the other manufacturing nations of the western world, we are facing a very grave energy crisis. I need not elaborate on that. It is a problem that is in front of everyone today, in all the countries which are expanding industrial nations. In this country, we, like others, have to find a way out of the crisis and as I see it there are four main routes out of our energy crisis—North Sea oil, North Sea gas, nuclear power, and coal.

We differ from some other major industrial powers, particularly in Europe, in as much as we have oil, coal, gas and nuclear power. I was recently in France, discussing with French Government officials, as a member of the Select Committee on Nationalised Industries, their problems of electricity generation. I was interested to learn that in France, a country without oil and now without coal, the French are concentrating resources and investment on nuclear power.

If I remember rightly, they spoke of a target of generating as much as 50 to 55 per cent. of their electricity by nuclear power by the end of the century, so there was no question where priority for the French Government lay in finding a solution for the energy situation in France. For our part, we have decided that, notwithstanding the remarkable good fortune which has come our way in discovering all the vast resources of the North Sea, the oil and gas, and our pioneering of nuclear power for peaceful purposes, we are determined to re-establish coal and coal mining as a viable business.

I do not seek to question that decision. I have always been a believer that coal had a place in our energy complex and have always maintained that it should have had a more important place than it has had in the last 10 years. We are now facing a change of direction for the industry, after 20 years of contraction.

The question is, how can we stop what has been happening? How can we stop the decline in production, albeit enforced? We have seen plans in recent years, but the plan the Government and the NCB have shown us during 1974 has not been over-ambitious. It errs on the side of caution, perhaps on the side of reality. The output target for 1973–74 is about 120 million tons, and, as I understand it, production is running behind that target. A figure of 6 million to 7 million tons is being set. We are approaching Christmas, when productivity always goes up, and miner friends have proudly told me how productivity has been going up.

Could the Minister comment on how we are to achieve a target of 123 million tons before Christmas? If we fall below that target, we should not assume that the targets of future years will be too difficult to achieve. I shall understand if they are but we must never be downhearted in this.

We tend these days to be downhearted about the coal industry. I was downhearted at the decision of the National Union of Mineworkers to reject the productivity scheme which the miners debated and eventually voted on. But I was not dismayed, nor was I taken by surprise. I should have been surprised if the miners had made that leap forward after the problems they had been through and the decisions they had taken in the past 25 years. They have been asked to make a great change of direction in their pay structures. We should remember that.

My mild approach to the situation of the miners does not mean that I do not regard their task as being enormously serious, and we expect of them a great deal more than we are getting. But I recognise that they have been asked to change their direction in a traumatic way and perhaps it was too much to have expected to happen in one ballot. But I hope that in the next ballot, which I trust will not be too long in coming, they will break out of the restrictions in which they find themselves.

The National Coal Board believes that the target of 120 million tons of deep-mined coal a year can be increased to 135 million tons by 1985. This, plus an addition of 5 million tons to the present 10 million tons of opencast coal, will give a total output of all types of coal of 150 million tons by 1985. These are realistic targets and they are attainable. But they cannot be attained by machinery and capital investment alone. We still depend on muscle, on men.

In June this year the NCB announced a massive capital investment programme, which I welcomed, to spend £1,400 million by investing in new machinery and new ideas over the next 10 years. That is an addition of £600 million to the existing commitment to spend £80 million a year every year in a continuing rolling investment programme. This shows confidence in the industry that capital expenditure will produce its reward.

That confidence did not start with the present Government. I am not seeking to make a strong political point, but it began under the last Conservative administration with the Coal Industry Act which introduced an investment of about £1,100 million in the coal industry and was an earnest of our intent.

The present investment programme has three main objectives, and they are very good objectives. It is not simply a case of pouring in money; it is money put in to achieve positive results in greater production. This is the way out of the energy crisis. The first objective is to extend the lives of existing pits by gaining access to new reserves. The NCB anticipates that by 1985 this could realise as much as an additional 9 million tons a year.

The second objective is to increase output levels at existing pits, which could produce as much as 13 million tons a year. This is more difficult to achieve. I should be interested to hear the Minister's reply to the question of increasing output levels at existing pits.

The third and perhaps most exciting objective is the investment to open new mines. This is the new chapter in the long history of the coal industry. The new mines in South Yorkshire—Selby is the magic name now, and it is as exciting as any of those names in the North Sea to which we pin such hopes—can produce for us, with this new investment and recruitment to man the mines, as much as 20 million tons a year by 1985. Therefore, this investment by the Coal Board, if it is realised, can produce more than 40 million tons extra by 1985.

The NCB, describing its belief in the wisdom of such investment, said: To safeguard the industry's capacity, existing collieries must have life-saving injections of capital". This short debate is about the life-saving injection of capital. I believe that it is a necessary injection and it is life-saving, but that is not all. If we do not inject new capital into the industry, if we do not pass this and successive measures to produce this big investment, what will be the position of the industry?

I have here a most interesting commentary from The Sunday Times of 24th February by Mr. Keith Richardson. The Minister, Mr. Keith Richardson and I once appeared on a radio programme for nearly an hour discussing energy prob- lems. There was no great difference between us. There was concord between the Labour Party and myself, and Mr. Richardson added the expertise. Indeed, he adds expertise here, for he says: The new National Coal Board plan is set up to beat this problem. More than a dozen marginal pits are being closed this year, some through sheer exhaustion and some because production costs far outweigh any possible price return. Instead of 270 pits there could be fewer than 200 by 1985. If no new investment were made, this natural rundown would bring the industry's capacity down from 135 million to 95 million tons a year. I think that is the nub of the question. Without making the investment, whatever may happen to the productivity of the men, whatever may happen about recruitment, we should see a continual and steady rundown in the capacity of the coal industry to deliver the coal and the energy that we so desperately need.

Will the investment, as we are making it, produce its own reward? Capital and the machinery that it can produce are not enough. There is still the need to increase output per man using the machines. That problem will remain. We must find a solution to how the men can be persuaded to work the machines harder.

Lord Wilberforce, in his report, said that only by improving productivity could increases in real wages be obtained. There, surely, is the change of direction. Those surely are wise words. Only by increasing productivity can the mining industry reach out for much higher wages for the miners. That achievement will not be easy. It is a herculean task. But we must not give up. The difficulties must be faced.

This problem was referred to by the hon. Member for Wrexham (Mr. Ellis) in a similar debate in March. I have studied that debate, particularly the hon. Gentleman's speech. It was an absolutely first-class presentation of the problem. It is the only coal debate in recent years that I have not attended, and I am sorry that I did not. The hon. Member made a sound speech, not trying to fuel the fires of dispute but trying to show that there were ways out of the problem. He catalogued those pits in which the management and men had managed to overcome the problems and to keep open what would otherwise be uneconomic pits.

Much more recruitment is needed to maintain this new direction. As the Coal Board has said, an average of 20,000 young men a year should come into the pits who see a future in health and safety as well as a fair wage. The board has not been slow in presenting its case. It has said: With competitive wage levels and vigorous recruitment, the industry's manpower needs can be met. Miners today have to be technically qualified. It is no longer a pick-and-shovel affair. I need not tell the Minister that, with all his experience. But other industries, such as the electrical industries and engineering, can offer these men competitive wages. The coal industry must be competitive bearing in mind, in particular, its disadvantages of danger and working underground.

Two shadows unfortunately lie across the industry as it looks ahead to a bright new future—the strikes of 1972 and earlier this year. Some consider coal supplies unreliable. The British Steel Corporation wants coking coal. In a document about research into the steel industry which I received this week, the Corporation said that it was concerned at … the vulnerability of the Corporation when coking coal supplies are interrupted. Its solution would be to turn to oil or North Sea gas.

The NCB has embarked on a much bigger research programme. Some years ago I was astonished to hear from the research director of the NCB how small his budget was. I have long experience of the thriving chemical industry, where large amounts are spent on research so as to expand and compete. I am glad that the Coal Board has decided to embark on a research programme costing £80 million, and spread over five years. It is a small programme when we consider what it seeks to do. That programme could be the key to the target figures of 150 million tons. It could even open Pandora's box and show the way to an entirely new page in the history of this great industry.

The research programme is aiming in three directions. First, it is meant to pursue the development of automatic systems to bring greater efficiency and safety in the pits. Second, there is the development of remote control and ultimately the fully-automatic control of established working methods under- ground. The vista here is terrfic. Third —this is more simple but most important —it aims at producing better facilities for moving men and materials faster. We all know how long it takes to get men and materials to a coal face and how long it takes to get the coal back to the surface.

Does the Minister think that still further thought might be given to injecting more money into the industry? If we were to seek to achieve those three aims quickly and think in terms of investment in the coal industry as people think of investment in the North Sea, I wonder what could be the target for coal.

I was told the other day by a representative of Esso that building one rig for North Sea work costs £73 million. We need 90 rigs. The figures for the North Sea are colossal. We are in macroeconomics. We sit on enormous, valuable resources of coal, and I wonder whether we think big enough about them. If we thought big enough we would find a new approach in the coal industry. The new coalfield at Selby is vast. By itself it exceeds in energy terms the value of all the oil found so far in the North Sea. The potential of coal exceeds the potential of North Sea oil.

Can the Minister tell me what progress is being made at Selby? How quickly are we proceeding? When do we start? When will the first coal be on stream? If the Minister cannot tell me now perhaps he will let me know on another occasion, so that we may know more about this exciting prospect and be sure that the National Coal Board and the Government are not dragging their feet.

I want to put forward some statistics, to put the problem into context, covering the generation 1947–74. In 1947 there were 958 collieries. Today there are 259. In 1947 coal output in Great Britain was 184 million tons. Today it is 120 million tons, or thereabout. However, output per manshift in 1947 was 21.5 hundredweight per man while this year it is 42.3 hundredweight. It has been above 45 hundredweight. We had hoped for more. I remember Lord Robens talking about a figure of 50 hundredweight per man. But at least it has doubled.

But there is another problem, which has gone the wrong way—absenteeism. In 1947, when the wages were £6 and a few shillings a week, absenteeism was 12.4 per cent. Today, it is 17.6 per cent. One of our problems in this exciting industry today is that men are working four days a week.

But in 1947 the number of fatal accidents was 432, and every year for several years after nationalisation the figure was over the 400 mark. I am proud to say that in 1974 the figure is down to 60—still too high but a great improvement and a great achievement on those early years.

There has been a revolution in our coal industry in a generation. Productivity has been doubled, absenteeism has increased, but mining has been made seven times safer. We should not have a coal debate without making that observation.

In the years when the industry was being run down, in the 1960s and early 1970s—mainly in the 1960s—a coal debate in this House was a packed occasion. It was on occasion of protest by the miners' lobby, by the miners' Members of Parliament—protest at what was being done to their industry. It was a protest against closures and coal being phased out when it was still needed. Oil was king by popular consent, not coal. Those of us who wanted to stop that trend—I was one—were thought to be old-fashioned, fuddy-duddy, sentimental and unreal.

As we complained in this House, the miners went on digging coal. They went on increasing their productivity at 4 per cent. a year every year through all those years of contraction. When there was a shadow over the industry's future, the miners struggled to prove themselves right in the economic terms we were then demanding. They did not strike.

It is unbelievable, in the context of the way we see the miners today, that in the days when they were under pressure they produced the coal, increased productivity and did not strike. They used to complain. They used to lobby us here, and rightly so. They used to come in deputations to see their Members and try to get even more Members who did not know about the industry to take an interest in it. They never lacked spokesmen in this House.

There has been a turning point in the industry, and I think there should be a turning point in the way we regard it. We should start calling on the miners as they used to call on us when they wanted something out of us. The boot is on the other foot. We want something out of them now.

When I say, "call", I do not mean a politician's call. I mean to pay a visit. We should go and see the miners. I am sure they would welcome us. There is no difficulty about that. And I do not mean only those of us who know about mining. The whole House should find time to visit mines, talk to the miners on their own ground—underground—and see their problems. We should see the machinery, the investment, the way in which the men work the machines, and we should realise their difficulties and what they attitude is. I am speaking not naively but confidently when I say that we shall not be dismayed by what we see.

Let me tell the House a story. Many years ago I went down a pit in my constituency. The pit, which was a deep one, has since been closed. The seam was low, and as we crouched and watched the coal coming back on the conveyor belt in great lumps as large as the Dispatch Box, I was encouraged to see written across one lump of coal, "Vote Tory". It was, of course, a joke, but that is the kind of spirit that one finds in the pits today.

I believe that we as Members of Parliament could make a contribution as we exhort and demand greater work from our nationalised industry, as we ask for greater productivity and five days' work a week, and as we ask for a realistic attitude towards the enormous possibilities that exist for us in the coal industry. We should get out and say those things, and I believe that that would produce its own reward.

The NCB has an opportunity to help Britain out of its difficulties, to put us on the map again and to put us ahead of our competitors. Coal does not exist in Europe to any extent. We have an enormous chance to forge ahead because of our coal and North Sea oil. The NCB has seized its opportunities. Its investment plans are sound and real. I think that the NCB may need to spend a bit more on research, but now it is up to the miners to play their part and to work the new machinery for all it is worth. If they want more tools, let us provide them. If they want more pay, they must earn it and help to find a way of doing so that will help themselves and the country at the same time.

7.47 a.m.

The Under-Secretary of State for Energy (Mr. Alex Eadie)

I congratulate the hon. Member for Canterbury (Mr. Crouch) on being successful in getting a Consolidated Fund debate, but I congratulate him even more on his speech because I thought that he made a contribution not only to the quality and standard of the House but to the nation as a whole. Indeed, I think the hon. Gentleman got it right when he said towards the end of his speech that if we can produce the coal the nation needs, that will be a contribution to the fight back to economic stability.

If I may add a personal note, it is now ten minutes to eight and I do not think that this is the first time on which the hon. Gentleman and I have spoken in this House at this hour of the morning. He recalled that in days gone by—which no one would like to live over again—we sometimes kept the Consolidated Fund debate to ourselves, possibly much to the irritation of Mr. Speaker and perhaps hon. Members, too. Nevertheless, because of the great concern that we have for the coal industry we felt that it was our duty to do that, and on many occasions at 8 a.m. these benches were filled with hon. Members wishing to take part in the debate. The hon. Gentleman is right when he claims that he has always strongly advocated that the coal industry should not contract.

I shall try to respond to the many points made by the hon. Gentleman, but I must say at the outset—and I am sure he will agree—that it is not necessary for the Government to apologise for what they have done for the coal industry during the past nine months. One of the first acts of the Government in March was to bring the mining unions together. Then we brought in the National Coal Board and, with the Government, there was a tripartite examination of coal production for the future. This resulted in the interim report in June and the final report in November. The hon. Gentleman has, no doubt, drawn very heavily from those two reports.

The interim report backed the National Coal Board's plans for investing £600 million over the next 10 years, in addition to the normal annual expenditure of between £70 million and £80 million. The Government have pledged that the National Coal Board's investment programme— this was particularly emphasised in the interim report—would not be at the mercy of short-term fluctuations in the price of competing fuels.

The hon. Gentleman referred to the exciting exploitation of the new Selby coalfield, saying that it should be exploited as rapidly as possible subject, of course, to the normal planning procedures. I endorse everything that he said about that. I went to Selby in the course of the general administration of my Department. I assure the hon. Gentleman that this coalfield has occupied a great deal of my thought. It offers one of the most exciting prospects for energy that this country has had for a long time. I do not know whether the hon. Gentleman heard me when I spoke on television after visiting the area. I described it as a miniature North Sea oil find and said that to some extent it is more important than the North Sea from the point of view of the economy and our national wealth.

In the Selby area we shall introduce all the new and exciting aspects of mining automation which the hon. Gentleman mentioned. We shall not sink shafts. We shall have drift mines, and this will save the time involved in sinking shafts. The coalfield is next to a railway, which is of enormous importance because it will be possible to take the coal by conveyor belt to a central point of transportation.

There is also a great advantage to the local population. Mining being an extractive industry, pits close when coal no longer exists. There is already an established manpower in the surrounding area, and that manpower is sure of continued employment. In fact, some of the best miners in Britain reside in and around that area. We are therefore entitled to be reasonably optimistic about manpower.

Planning procedures are involved here. We are seized with the importance of Selby and we shall certainly try to expedite as much as possible, subject to the planning procedures, the opening up and the bringing into production of the Selby field. I think that the people in the area are beginning to appreciate that they hold in their hands a prospect which could bring enormous riches and which will greatly enhance the general economic well-being of the nation.

It was correct of the hon. Member to draw the analogy between Selby and the North Sea. We hear a great deal of the exploration and drilling in the North Sea, but there is far more boring going on in the whole of Britain today for coal than is ever likely to take place in the North Sea. You will be pleased to know, Mr. Deputy Speaker, that in your country of residence, Wales, we are searching for new coal resources.

The hon. Member referred to the past philosophy of contraction in the mining industry. There was no enthusiasm then to search for coal. How could there be when the industry and the men working in it were told that they had no future? Now, however, as the hon. Member pointed out, we are entering upon a new era and we are fortunate to have an island which is built on coal—a circumstance that France and other countries would dearly love to have in common with us. The search for new resources therefore is of great importance.

Reports are now coming into my office telling of possible exciting new finds of coal in various parts of Britain. That means a continuity of employment for miners and, at a time of energy crisis and shortage, wealth for the nation. If we are to get the manpower we must drive home to the miners that they now have a future.

The hon. Member referred to productivity. I think he gave the figure of 42.3 hundredweights per man shift. It is even better than that. To some extent it confirms the hon. Gentleman's analysis that productivity in the mining industry is picking up. The hon. Gentleman gave the figure of 28.9 hundredweights per man shift in 1960–61. In 1973–74, a strike year, it was 42.3, and so far in 1974–75, it was 41.9 in April, 43.8 in June, and then it slipped a little to 42.6 in August. The latest figure, for October, is 46.7.

The hon. Gentleman was right to express concern about whether we shall reach the target of 120 million tons in the year to April. He described the industry's task in meeting that target as herculean. I do not dispute that description. But it would be a great mistake to suggest that the miners cannot achieve the target. When my right hon. Friend and I met the National Executive of the NUM last month after the productivity agreement had been rejected, we received a unanimous assurance that the miners would meet the target and not let us down. A week or a fortnight later the executive unanimously passed a resolution that it would do everything it could to meet the target, that its members, as miners' leaders, would go into the coalfields and try to persuade and influence the miners, explaining to them the reasons why the country needed the coal telling them that they had made a promise on their behalf that they would try to meet the target.

There will be brave attempts to meet the target. Our message to the miners should be that the country needs that coal, that we have faith that they will respond, and that we look forward anxiously to their meeting the target. I prefer that approach to the doom-and-gloom philosophy of telling the miners, "You will never make it." The hon. Gentleman knows as well as I do that it will not be the first time the miners have responded to calls by the nation and have even surprised the nation.

The hon. Gentleman and I have been in difficult positions in the past. To some extent it may be embarrassing to us that we now wear the mantle of prophets, and I do not think that it suits us. We warned in the House what would happen if there had to be a massive contraction of the industry. But we must be philosophical and say with Shelley: The past is death's The future is thine own. We must go forward and not look back. It is in the spirit of going forward that we must approach the tasks before us. We may get personal comfort from the fact that we tried to warn the nation what would happen. It is unfortunate that the nation did not listen, but we now have the duty of trying to make sure that we do not make the same errors.

I particularly wish to mention the subject of absenteeism, about which the hon. Gentleman questioned me. Absenteeism is significantly lower this year than last year. This year's figure so far is 15.2 per cent. compared with the figure of 16.7 per cent. for the same period in 1973. The hon. Gentleman knows how one can play around with these figures. We talk of voluntary and involuntary absenteeism. The voluntary absenteeism figure has been between 4 per cent. and 5 per cent. over recent years. The bulk of absenteeism is due to sickness and injury in the coal industry.

I agree with the hon. Gentleman on the question of the massive new investment that is required in the industry. The hon. Gentleman mentioned a matter of great importance, and although he stressed the automated section of the industry in relation to research and development, he will forgive me if I refer to another aspect. The hon. Gentleman will have read the final report of the coal examination. I was chairman of the working party on research and development. We were very quickly satisfied that sufficient investment would be forthcoming to make the industry more automated and mechanised. Those matters have been put in train.

Although the hon. Gentleman said he would like to see more capital invested in research and development, the matter is not covered only from that point of view. I took the working party to the United States, where we saw new, exciting pilot plants and experiments. Millions of dollars are being spent to discover new uses for coal. I was thrilled and excited, and I realised how fortunate we are in Britain as regards fuel. This bears out what the hon. Gentleman said about nuclear power, gas, oil and coal, the four fuels. There are energy problems in the United States. The Americans are spending millions of dollars on coal research and development because they have learned from past errors that to meet their energy requirements they will have to put their coal to new uses. The experiments we saw related to natural gas, the making of oil from coal, the extraction of petrol from coal, the creation of materials for the petrochemical industry, the making of carbon fibres and metallurgical coke from coal.

When we looked at these techniques, we realised that many of them were not indigenous to America but that they originated in Britain. I am sure that the hon. Gentleman will not mind if I say that the National Coal Board deserves our praise for its efforts at Stoke Orchard, performed on a shoestring when the industry was confronted with these massive contractions. Since the hon. Gentleman is interested in research and development, I hope that he will take an opportunity to pay a visit to Stoke Orchard. Some of the people working there are among the most highly skilled in the country, and I am sure that they would appreciate his visit.

In the final report of the examination we outline three aspects of research and development, all of which have great advantages. They are the liquefaction of coal, pyrolysis, and fluidised bed combustion, the latter having very special advantages. Coals are different all over the world. One of the difficulties of the Americans is that their coal has a very high sulphur content, whereas ours has a very low sulphur content. Generally speaking, European coal has a high sulphur content. For us, therefore, technologically speaking, fluidised combustion is a tremendous breakthrough, and it can be seen from the final report that we have come out firmly in favour of research and development on it.

I have tried as best as I can to deal with the matters raised by the hon. Gentleman. If he feels that I have not given some of the statistical information for which he asked, I am sure that he will write to me about it. I am grateful to him for inaugurating this debate, because it has given me an opportunity to talk about some of the matters that I have wanted to discuss for some considerable time.