HC Deb 27 July 1977 vol 936 cc667-82

Lords amendment: No. 1, in page 7, line 14, after "power" insert subject to the approval of the Secretary of State

5.11 p.m.

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

I beg to move, That this House doth disagree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Oscar Murton)

With this we may take Lords Amendments Nos. 2 to 5.

Mr. Eadie

The effect of Amendment No. 1 is very similar to the amendment tabled by Opposition hon. Members and debated at length in Committee before being rejected on a Division. In moving that amendment they made much of the fact that Section 2(4) of the Petroleum and Submarine Pipe-lines Act 1975 provides for the British National Oil Corporation to secure the Secretary of State's consent before going into the refining and downstream petrochemical business.

For reasons that I sought to explain at the time, an analogy between BNOC and the National Coal Board in this respect does not hold good. There are very good reasons why the Secretary of State's consent should be required in the BNOC's case and why it is not needed in the case of the NCB.

First, the BNOC's relationship with the Government is necessarily closer. I need only mention the national oil account and the vast revenues that will accrue to BNOC. Secondly, whereas the NCB has duties prescribed in the Coal Industry Nationalisation Act 1946, the BNOC has no specific duties. Instead, it has been given general powers.

The NCB's duties are defined in Section 1 of the 1946 Act, and include working and getting the coal in Great Britain and securing the efficient development of the coal mining industry. None of the new powers to be conferred on the NCB by the Bill can in any way distract the Board from its prime task of discharging those duties. The connection between Clause 9 and one of those duties—that of securing the efficient development of the coal mining industry—is explicitly and carefully defined in lines 20–25 of Clause 9(1).

The fact that the NCB is circumscribed by the priority that it must accord to discharging its statutory duties distinguishes it quite clearly from the BNOC, which has no duties but general powers. Given also the close relationship of the BNOC with the Government and the vast revenues that will accrue to it, a requirement that it secures the Secretary of State's consent before embarking on refining and downstream activities makes very good sense. However, because of the differences that I have described, that does not mean that it is equally sensible to provide for consent in Clause 9.

When we debated this matter in Committee I referred to other factors that rendered the amendment unnecessary. First, Section 3(2) of the Coal Industry Nationalisation Act 1946 states that In framing programmes of reorganisation or development involving substantial outlay on capital account, the Board shall act on lines settled from time to time with the approval of the Minister. This is given effect each year by the provision by the NCB to the Secretary of State of its forecasts of capital expenditure and its view of the development of the industry over the next five years. This covers not only the Board's mining operations but its non-mining activities. It would certainly include the Board's plans for exercising the powers in Clause 9.

Secondly, if at some future stage the financing of activities under Clause 9 were to involve loans by the Government to the Board, or by the Board to one of its subsidiaries, the Government would have complete financial control. Furthermore, if it were a question of financial guarantees and not loans, the Government would also exercise control over the giving of guarantees by the Board or one of its subsidiaries. The relevant provisions are set out in page 13 of the Bill.

Thirdly, as a last resort there remains on the statute book the Coal Industry Act 1971, under Sections 6 and 7 of which the Secretary of State has power to call for a report by the Board on its non-colliery activities and to direct the Board to discontinue or restrict any of its activities, or to dispose of any assets provided that the activities or assets are not necessary to the discharge of its duties.

5.15 p.m.

The amendment puts a statutory obligation on the NCB to secure the approval of the Secretary of State before undertaking any activity under Clause 9. The Government take the view that this is unnecessary in the light of existing arrangements. To sum up, nothing that the NCB could do under Clause 9 could derogate from or take precedence over its statutory duties. Under Section 3(2) of the nationalisation Act the Secretary of State already exercises a broad control over the NCB's plans for capital investment. He has financial control over any loans by the Government or by the Board and over the giving of financial guarantees. In the last resort, if he does not like something that the Board is doing in the non-mining sector, he can resort to the rather Draconian powers in the 1971 Act.

In the Government's view the amendment would add an unnecessary piece of bureaucratic procedure to arrangements that are already perfectly adequate.

Mr. Peter Rost (Derbyshire, South-East)

The Minister has now said three times that the amendment is unnecessary. If it is so unnecessary, why does he go to so much trouble to resist it?

Mr. Eadie

The hon. Gentleman has heard me on this tack before. I could retort by asking the hon. Gentleman why he is on his feet saying the same things that he said in Committee, when we had a long debate on these issues.

The points that I made in dealing with Amendment No. 1 about the adequacy of the existing control by the Government over the NCB's activities apply equally to Amendment No. 2. In my view it is even less appropriate to make activities under Clause 10 subject to the approval of the Secretary of State as they are never likely to be more than a marginal extension of the Board's main operations. The amendment would require proposed projects, however small, to be referred to the Secretary of State. That is quite unnecessary and is a bureaucratic luxury that we can well do without.

Amendment No. 3 is linked to No. 2 and sets out what the Secretary of State would have to do before he could give approval in the case of a project to work and get minerals by open-cast methods otherwise than in association with working and getting coal. He would have to consult the Secretary of State for the Environment. He would have to have regard to the capacity of the mineral industry to meet demand and then he would have to decide whether what was proposed was commercially reasonable and in the national interest.

The Government's opposition to the amendment is based not so much on reservations about the drafting as on the unnecessary nature of the provision. The amendment is prompted, I know, by the apprehensions expressed by representatives of the bulk minerals industry. As I said on Report, I met the representatives myself and arranged for them to discuss their fears with the NCB. As a result of the meetings and of further discussions, a number of assurances were given to the industry. In dealing with the amendment I am afraid that it is necessary to test the patience of the House by going over them.

I said on Report that the NCB had confirmed that it had no present plans to expand into the aggregates industry. I also said that the powers in Clause 10 would not be used in this way to any significant extent. However, the Board did not wish to be precluded from using the powers if the circumstances were right.

I gave the further assurance that the Board had agreed that if during the five years from the enactment of the Bill it planned, using the powers under Clause 10, to embark on a project for extraction of bulk minerals by open cast operations, otherwise than in association with the working and getting of coal, it would notify the Sand and Gravel Association and the British Quarrying and Slag Federation. There could then be discussion about any points that still concerned them.

My noble Friend Lord Strabolgi reinforced that in Committee in another place when he said—this is extremely relevant to the amendment—that the normal planning processes would allow for the existence of spare capacity in the aggregates industry to be taken into account. The NCB, of course, will have to go through the normal planning process before it can work minerals under Clause 10.

In the light of these assurances I suggest that if Opposition Members support the amendment they will be allowing rather unjustified apprehensions to sway their judgment.

The Government and the Board have said that they fully appreciate the difficulties under which the aggregates industry is at present labouring, following the reduction in demand. They have no wish to aggravate those difficulties. However, the assurances that have been given should surely be sufficient to allay the concern of the industry. In the Government's considered view the amendment is quite unnecessary.

I now turn to Amendment No. 4. I recognise that it is seeking to entrench in the Bill the assurance that I gave to the House on Report in Vol. 124, c. 1963 of Hansard. It also goes somewhat further in requiring the Secretary of State's approval under Amendment No. 2 to he subject to the consultation having taken place. I have already given reasons why I believe that that particular amendment should be deleted, but I should like to give additional reasons why the remaining substance of this amendment is unhelpful.

The assurance that I gave on Report was given after consulting the Coal Board and can be taken entirely at its face value. Indeed, this House did just that when the hon. Member for Exeter (Mr. Hannam)) withdrew an amendment in the light of the statement that I was able to make. I am therefore slightly disappointed to find this new amendment on the return of the Bill from another place. I think that it could rightly be seen as insulting to the sincerity of one of our major nationalised industries when a considered and categorical statement, made with its agreement, is not seen as sufficent guarantee of its conduct.

It may be that the other place felt that Ministers change from time to time and that it was not enough to have a guarantee given by a Minister who may not in future be responsble for the industry concerned. If so, there are two points to be made. First, the undertaking is one that the National Coal Board accepted, and there can be no doubt that it will he honoured. Secondly, this very Bill includes an illustration of the Government honouring an undertaking given in Parliament not five but 10 years ago. I am referring to Clause 9 and my explanation earlier in our proceedings that, in deciding that an express new power in the shape of Clause 9 should be given to the Board if it were to engage in petrochemical activities, the Government had regard to an undertaking given to Parliament by the then Government in 1966, when the National Coal Board (Additional Powers) Bill was being considered.

I think that I have given adequate material to the House to illustrate that it should reject the amendments.

Mr. Hamish Gray (Ross and Cromarty)

I am afraid that the Under-Secretary of State has failed to convince my right hon. and hon. Friends of his reasons for not accepting these amendments. We believe that the amendments would considerably improve the Bill. As my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) said, if the amendments demand as much attention as the Minister has given to them, it will not make any difference if he accepts them.

We should like the assurances given by the Under-Secretary and by the Minister in another place to be written into the Bill. This is a perfectly reasonable request. The hon. Gentleman said that Ministers and Governments can change. Indeed, the Chairman of the National Coal Board can chance. Therefore, is it not a much greater protection to have the assurances that have been given written into the Bill? I think that their Lordships did a good job in sending this matter back for further consideration.

Amendments Nos. 1 and 2, referring to Clauses 9 and 10, merely seek further ministerial approval. They would translate the assurances that have been given into legislation.

Both clauses represent significant extensions of powers compared with those originally granted under the 1946 Act Both lead the NCB into new non-coal areas of activity and both have aroused considerable concern in the relevant industries. The mineral extraction industry has expressed great reservations. The Minister acknowledged that by meeting representatives of the industry. It is now in the best interests both of the NCB and of the other industries that may be concerned that these amendments should be accepted. It is desirable that there should be tighter ministerial control, and that is what we are seeking to achieve.

Amendment No. 3 seeks to write into the Bill the assurances that have been given by Ministers. This amendment is the essence of reasonable thought. It has been restricted to cover only opencast extraction of coal, not deep mining. Furthermore, it applies only where the extraction does not take place along with working and getting coal. It also allows the Minister to be the judge of the demand on the industry, but in order to allay the fears of other industries it requires the Minister to consult the Secretary of State for the Environment and makes the Minister, not the Board, the judge of what is commercially reasonable and in the national interest.

During debates in Committee in another place the Minister gave a number of assurances. I shall quote what he said, because it is important in the context of this debate. The noble Lord, Lord Strabolgi said: Moreover, assurances have already been given that the Board has no present plans to expand its operations in the field of bulk mineral extraction; that it is extremely unlikely that the powers would be used to a significant extent in this field". That is a good assurance, but it leaves a certain amount of flexibility that worries my hon. Friends to some extent. We believe that someone other than the Board should be the arbiter in such a case. It is surely in the national interest that, where the Board proposes to make such a decision, it should not be left entirely to the Board. We suggest that the judge in such a case should be the Secretary of State. Whether he is the most appropriate person I should not care to argue about, but the Minister might have come forward with a reasonable alternative.

Later, the Minister in the other place said: This does not rule out individual cases where it may be in the national interest or commercially attractive to engage in such projects. But, under the procedure for notification to the industry during the next five years, the Board will, before deciding whether to go ahead, take into account any representations that the industry may wish to make."—[Official Report, House of Lords, 18th July 1977; Vol. 386, cc. 121–2.] Of course, the Under-Secretary here and the Minister in the other place gave the assurance that the Sand and Gravel Association and the British Quarrying and Slag Federation would be consulted on such matters. If the hon. Gentleman is genuine in his intention to accommodate those outside the coal industry because of their anxiety, surely it is not too much to ask that those assurances be written into the Bill.

Amendment No. 4 simply seeks to include the assurances in the legislation. It also has a link back to Amendment No. 2. If that amendment were to be accepted, during tie five years to which this amendment refers the Board and the Minister would be proceeding independently of each other, partly because the repercussions of the Board's intended operations on the industry should be considered by the Minister before giving his approval. If the Board has already allayed the fears of the industry, the approval of the Secretary of State should be forthcoming without too much difficulty.

We have a busy programme before the House today. Many Bills are coming back from the Lords. Therefore, I do not wish to take too much time in supporting the amendments. We have been round this track on a number of occasions. At this late stage we are merely trying to persuade the Government that the amendments are worthy of inclusion in the Bill. We hope that, even now, our arguments will persuade the Minister to accept the amendments, or at least some of them. I suggest that Amendment No. 3 in particular is worthy of further consideration.

I know that the Under-Secretary has studied these amendments, because he gave a long list of reasons why he could not accept them. I suggest that on this occasion his briefing is at fault. It may be that his civil servants are too hidebound and are not prepared to be flexible enough. If the hon. Gentleman listens to the comments that will no doubt be made by my hon. Friend the Member for Bedford (Mr. Skeet), I am sure that he, like all of us, will be convinced that the amendments have considerable merit. I must disagree with the reasons given by the Minister for not accepting the amendments.

5.30 p.m.

Mr. T. H. H. Skeet (Bedford)

On occasions like this of course I declare my interest in the stone and bulk mineral industry, an interest that has been declared in the Register of Members' Interests.

I was rather surprised at some of the intonations of the Under-Secretary when he opened the debate, particularly because he prayed in aid the fact that the charter Act of 1946 states that any pro- gramme of the NCB would be discussed with the Secretary of State. He also prayed in aid of Clause 3. If the Under-Secretary had gone a bit further and referred to other sections of the charter Act he would have found that Clause 10 of the Bill is not necessary to the NCB at all. He could thus have saved us great inconvenience.

If the Under-Secretary will look at the charter Act and refer to Section 1(2)(e) and Section 1(3) he will find that the Board's functions include any activities which can advantageously be carried on by the Board with a view to making the best use of any of the assets vested in them by this Act". In similar terminology, the 1946 Act states that the Board may do what is "requisite, advantageous or convenient". In order that the House may understand the magnitude of this I shall refer to a Written Answer that the Under-Secretary gave to me recently about the operations of the CEGB in looking for uranium in Saskatchewan in Canada. The answer stated that this was done under the available powers of the Electricity Act 1957, which gives the CEGB power to carry on certain activities which appear to the Board to be requisite, advantageous or convenient … or with a view to making the best use of any assets vested in them. If that is the case the 1946 Act would be requisite and we need not have bothered to go on to Clause 10. The significance of the point that I am raising is that, as the Minister has now moved from the general to the particular and is seeking specific powers in Clause 10, those powers must be adequately delineated and safeguards must be introduced. My hon. Friend the Member for Ross and Cromarty (Mr. Gray) was perfectly right in saying that the safeguards that are essential are that reserve powers must be with the Secretary of State to intervene and say whether these powers or the exercise of them are necessary.

I listened with great care to the Under-Secretary. He referred to the five-year surveys of the NCB that are submitted to the Secretary of State for approval. They were mentioned by Lord Strabolgi in another place. But during the Committee Stage we considered the Coal Industry Act 1971. The Under-Secretary spoke about this Act in the most scurrilous terms as being a left-over from the Conservative Government. I referred to Section 6 of the Coal Industry Act, 1971, dealing with the power of the Secretary of State to call for a report on the Board's diversified activities, and Section 7, under which directions can be given to the Board to restrict its activities or dispose of any of its assets, and so forth.

The Minister has already given me a Written Answer to Questions on this matter, when I asked whether any of these powers have been used. The reply was that his right hon. Friend had made no direction under this section and at present had no plans to do so. Why, then, does the Minister pray in aid that the Secretary of State has all these powers up his sleeve—he had the audacity to mention that again this evening—yet he told me in a Written Answer that he had no intention of using those powers. If ever there were a piece of parliamentary humbug, that is it. I must leave that matter precisely where it stands. If the Minister will only refer back to Hansard and to the observations that he made he would learn how extraordinary it is that one could be in such a situation.

I turn now to Clause 10. Having looked at the words of the Government spokes. man in the other place on 25th July 1977, in Column 753, I find that Lord Strabolgi said that it was implicit in the assurance already given that while demand for aggregates remained well within the capacity of the industry, the Board would not use powers under Clause 10 to any significant extent in working surface aggregate minerals".—[Official Report, House of Lords, 25th July 1977; Vol. 386, c. 753.] Is the Minister prepared to repeat that assurance in this House today?

Mr. Rost

It is not in the Minister's brief.

Mr. Skeet

If it is not in the Minister's brief I am sure that he could make a reference on a piece of paper and answer me in due course and repeat that assurance. The point that I have in mind here is this that if that assurance in the other place is relied upon, if one consults the Department of Environment forecast figures for aggregates one finds that in 1973 the mid-point in the range was 279 million tons. The forecast for 1985 is 237 million tons, which is very much below the 1973 peak. If we take the period 1976–1981 the average output figure is estimated at 217 million tons and the output for 1982 to 1985 was estimated at 231 million tons. Therefore it looks as if the peak figure for 1973 will not be reached until after 1985. Are we to say that, following the undertaking given in the other place by the Government spokesman, no use of these powers will be made until after 1985? If I am right in my assessment the request for these powers in the Bill is premature, because 1985 is eight or nine years away. There are a number of Bills which come before the House from time to time dealing with the coal industry, and this matter could wait for a later Bill.

I also ask the Under-Secretary to give an undertaking to the House that the NCB will not engage in any other form of open cast operations until the production of aggregates has exceeded 330 million tons per annum, as shown in the publication of the Government's statistical services for the Department of the Environment, and that in accordance with one of the amendments that has been tabled he takes into account the capacity of the industry to deliver the products necessary for the construction industry and road construction. I am concerned with the recent report published by the Government, the transport policy White Paper, Cmnd. 6836, which indicates that the amount of money to be spent on major roads will be severely cut and therefore all the forecasts for the years ahead may be reduced considerably. Obviously, therefore, if the Minister does not intend to accept any of the Lords' amendments he must be prepared to give the necessary assurance that we are asking for.

On Amendment No. 3, if it was given as an undertaking, why is the Under-Secretary not prepared to write it into the Bill'? He could concede this amendment and concede Amendment No. 2 as well. I should have thought that the Minister would be concerned with the problems that the NCB has in looking after its primary function of having to extract coal. It already has enough problems on its plate, such as productivity problems. Productivity has been stabilised for approximately seven years, at roughly between 44 cwt and 45 cwt output per man shift. The NCB's prime consideration is the extraction of coal from the ground.

It is also necessary for there to be consultation on the problems that will arise in trying to absorb the additional powers under Clause 9 in dealing with petroleum and chemicals, and in operating abroad under the terms of Clause 11.

The powers that the Minister seeks under Clause 10 will not enhance the opportunities for marketing coal or coal products. The Minister has said that there is no intention to use these powers and he has not decided how they would operate.

It is essential for the Secretary of State to act as an arbitrator, as one who can stand well above the National Coal Board and tell it that a particular project is not viable or is unfair to the bulk mineral industry involved. Many small men are dependent for their livelihoods on the operations of their quarries and undertakings. For the National Coal Board these are entirely peripheral activities.

The Minister referred to the Mines (Working Facilities and Support) Act 1966 as though it was an encumbrance to the NCB. I should have thought that it was not. If the Minister thumbs through the pages of that Act he will see that the ancillary rights are obtained on application to the Chancery Division of the High Court. Under Section 3 the NCB would have to prove only that the granting of the ancillary rights was expedient in the national interest. We have seen how Ministers have construed" the national interest" in the past. The Minister's arguments against the Lords amendments are insubstantial and as light as gossamer. The Minister should have the courage to say that he is prepared to accept the Lords amendments or at least some of them.

Mr. Kenneth Clarke (Rushcliffe)

I, too, have listened to what the Minister read so studiously from his brief, and my reaction accords precisely with that of my hon. Friends the Members for Ross and Cromarty (Mr. Gray) and Bedford (Mr. Skeet). I intervene in the debate at this very late stage of the proceedings because of the considerable interest in my constituency in the powers sought under the clause. Coal mining is an industry in my constituency, but so is gypsum mining. British Plasterboard, through its gypsum mines, is a major employer in my constituency.

In addition, numerous sand and gravel workings are to be found along the valley of the Trent, and many of my constituents are involved with them. The fears of that industry have been expressed by my hon. Friend the Member for Bedford. However, there is considerable concern among those engaged in the extraction of gypsum that the NCB will be given very wide powers to engage in the extraction of almost any mineral it might discover in the course of its exploration for coal.

From reading what the Minister has said in past debates, I have followed what the Government and the Coal Board have been trying to say about these wide powers. It has been argued by my hon. Friend the Member for Bedford that the new powers are not necessary as the Board already has adequate powers in other statutes and it is therefore interesting to speculate on why it is felt necessary to make them so explicit. The Minister and the NCB have appeared to be trying to reassure everyone that they have no intention of using the extremely wide powers that they are seeking. It is most puzzling then that they seek them. The House should hesitate before agreeing to such wide powers as are provided for in the Bill.

The minimum safeguard that those in other industries are entitled to is provided for in Lords Amendment No. 2. It is that in exercising these sweeping powers the Board should be required to seek the approval of the Secretary of State of the day.

The Government have given an explicit assurance on open cast extraction of sand and gravel, although that is of little relevance to gypsum, which is usually extracted by deep mining. The further Lords amendments simply seek to write into the Bill the assurances that the Minister has already given, but the Minister is desperately trying to persuade us not to write them into the Bill. I can understand that people may feel a little indignant if their word alone is not acceptable, but it can do no actual damage to those who give these assurances if provisions in the same terms are written into the Bill to bind their successors in office. I cannot see that that would prevent the NCB doing anything it wants to do within the terms of the present assurances. I find the Minister's opposition to these amendments, which are harmless and inconsequential if he means what he says, puzzling, and I hope therefore that the House will reject the Minister's case.

5.45 p.m.

Mr. Eadie

Perhaps I may respond briefly to the debate. One of the major criticisms by the Opposition is that I spent too much time going into too much detail about why the House should resist the Lords amendments. It is strange that one should be criticised for devoting too much attention to argument advanced in the debate.

I have also been chided for not agreeing to write into the Bill the provisions sought by the other place. If hon. Members had listened to what I said about the amendments they would have heard me set out the reasons for not doing that. I was asked for genuine assurances, and that was what I gave. The hon. Member for Rushcliffe (Mr. Clarke) said that he had read the earlier debate. I suggest that he re-reads it, because that will give him cause to reflect on what he said this afternoon.

I see no menace in the Bill. It was I who twice invited the Sand and Gravel Association to meet the NCB. It was conceded during the Report stage that I did everything possible to give assurances. I gave the assurances, the assurances arc genuine, and the concern that has been expressed is I believe unwarranted.

The hon. Member for Ross and Cromarty (Mr. Gray) made a significant remark. He said that we had been round this track before. I say to the hon. Member for Bedford (Mr. Skeet), having listened to his speech, that we have been round that same track before. These were the same speeches that we heard in Committee. I suggest therefore at that there are constructive and solid reasons for disagreeing with the Lords amendments.

Question put and agreed to.

Lords Amendment No. 2 disagreed to.

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