§ The Under-Secretary of State for Energy (Mr. John Moore)
I beg to move,That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment No. 3) Order 1980, which was laid before this House on 5 December, be approved.The order gives effect to the provisions of section 7 of the Coal Industry Act 1980, which the House considered last summer. Its main provision is to extend the redundant mineworkers payments scheme to comparable grades of employee at cokeworks. The National Coal Board has, since 1978, been providing redundant cokeworkers with benefits equivalent to RMPS benefits, and the present order allows the Government to take over those obligations. As my right hon. Friend the Secretary of State told the House on Second Reading of the Coal Industry Act 1980, we think it right to do this in the present circumstances, where a contraction in the demand for coke may necessitate a reduction in the scale of cokeworks operations during the next few years.
Cokeworkers employed by the NCB who are made redundant at age 55 and over get about two-thirds of their previous pay for three years and then a weekly sum equivalent to unemployment benefit plus premature pension until they are 65. Those aged under 55 receive lump sum payments on the same basis as mineworkers. Under the order, the Government will meet the cost of these payments. The order also makes a small change in the Amendment No. 2 Order which came into effect in June; it changes the date laid down in that order by reference to which a man's weekly pay is calculated for the purpose of determining his entitlement to a lump sum. The date used will now normally be the date when notice of redundancy is given rather than the date of redundancy itself. The change will have negligible impact on the overall level of payments. The earlier procedure turned out to be very difficult to operate in practice.
The order also allows the Government to reimburse the costs of concessionary coal provided to redundant cokeworkers in the same way as to redundant mineworkers.
The NCB cannot insulate itself from the problem of declining markets for coke, but it is right for the Government to give every reasonable assistance in compensating the workers affected and assisting their redeployment.
The order also extends the period during which redundant mineworkers and cokeworkers may qualify for benefits for a further three years, to the end of the board's financial year 1983–84. This is in accord with the Coal Industry Act 1980, section 7, but in no way does it imply that the RMPS will end then. Indeed, as I made clear during the Committee stage of the Bill, we envisage bringing forward in 1983 further primary legislation to permit a further extension.
As the House will be aware, the redundant mineworkers payments scheme was first introduced by the Coal Industry Act 1967. At that time, it was for mineworkers made redundant in the period to March 1971. Since then, successive Administrations have in successive pieces of 256 primary and secondary legislation extended the duration of the scheme and the benefits available; for example, the 1973 Coal Industry Act enabled some of the board's expenditure on concessionary coal to be reimbursed. The 1980 Act and order are simply the latest in this series.
I ask that the House approves the order so that expenditure on payments to cokeworkers can be reimbursed as of next Monday, the date of coming into operation. Provision for the payments is being made in the Supplementary Estimates, which were approved earlier this evening.
I commend the order to the House
§ Mr. Alex Eadie (Midlothian)
We welcome the extension of the redundant mineworkers payments scheme to cover redundant cokeworkers.
The House will be aware of the history of the schemes. The mineworkers scheme was introduced after the approval of Parliament, which the Minister hinted at, in July 1968. The cokeworkers scheme became effective on 1 January 1978 and offered comparable benefits. However, the 1978 scheme was entirely funded by National Smokeless Fuels Limited, which is a wholly owned subsidiary of the NCB, rather than the Government. As the Minister said, that is where some financial change is involved.
It is appropriate to comment on the NCB's external financial limits and the need for greater flexibility in its operation. The financial limits are usually fixed the autumn before the start of the financial year to which they relate. In the case of the NCB, that is the beginning of April.
The financial needs of industry can change suddenly through external and unforeseen events. Because of recession, sales of coal in 1980–81 will be about 6 million tonnes less than last year. In order to absorb the immediate impact of that abrupt change in the industry's markets, the NCB is putting about 5 million tonnes into stock and increasing its exports at prices somewhat below what the coal would have fetched if sold within the United Kingdom. In such circumstances, there should be a relaxation in the external finance limits. The alternatives are a cut in the industry's essential investment programme, on which its long-term future depends, or further price increases, which would result in a loss of business and miners' jobs. A direct consequence would be a larger and more expensive mineworkers' redundancy payments scheme.
We are told that about 500 persons at Evenwood, Bedwas and Monkton will be covered by the introduction of the payments scheme in the event of redundancy. Workers at Phurnacite and by-product plants will not be covered but they will be covered by the RCPS.
There is a proposal that Manvers cokeworks should close in February 1981 and that about 100 people will be covered by the redundant mineworkers payments scheme if the effective date is 26 December 1980. That leads to the question of Government grants to aid the coking coal industry. European Coal and Steel Community rules permit member Governments to pay grants towards the cost of coking coal production and towards the cost of stoking coke. The purpose is to provide financial support against third country coking coal in the medium term. 257 During 1979–80, the National Coal Board was paid £8.5 million in grants for coking coal production and £12.9 million in coke stoking aid.
Earlier this year, the British Steel Corporation announced its intention to import all coking coal needs. After prolonged negotiations, the NCB and the BSC reached an agreement which will retain about 4.2 million tonnes for the British coal industry next year. That involves the NCB aligning its prices to world coking coal prices, in return for which it will get a reduction in the price of some of the steel that it buys. Nevertheless, there was a heavy cost to the National Coal Board in holding on to the business and the mineworkers' jobs that it represents.
The board argued the case with the Department of Energy and the Government for a considerable increase in coking coal production subsidy, which would have been permitted within ECSC rules. The board said that the claim was based on the tonnage which it would produce for blast furnace coke production. The Minister mentioned the contraction of the coke industry. However, the Department has refused the claim and has fixed the level at a figure which is much lower than the Community rules permit, although no extra Government expenditure is involved, since the deficit grant would be reduced by the sum involved.
We indict the Government for their senseless attitude. We accuse the Government of seeking to present the coal industry's financial results in an unfavourable light for senseless, doctrinaire reasons. If the Minister denies that, he has a responsibility to explain why his Department has shut its eyes to Community rules. We often hear about how he and his hon. Friends go to Europe to demand the maximum return from our entry into the Common Market. They say that they discuss with their European partners how we should benefit.
We indict the Government for not approaching the European problems vigorously, for not examining the rules and, to some extent, for hamstringing and misrepresenting the coal industry's financial position. As a result, the coal industry does not receive the assistance that it would receive if the Government stood their ground and applied the rules.
No retrospection is proposed in the order. There could be an explanation for that, and the Government should state it. I and my hon. Friends think that an administrative aspect is involved. The Minister shakes his head, but I leave that as a query. Although the order is important, a number of questions need to be answered. That is one, and the other questions that I have raised should also be answered by the Government. We seek an explanation from the Minister about the order and about the present position of the coal industry.
§ 12.1 am
§ Mr. George Grant (Morpeth)
The order will be welcomed by the National Coal Board, the National Union of Mineworkers and, most of all, the cokework operatives. While the order is welcome, the cokeworkers do not want redundancy payments. They want Job security. The policy of the NUM is to look upon any closures of cokeworks in the same light as it looks upon any colliery closures. We ask the Minister and the Government to consider, in the interest of the nation, the proposition that the United Kingdom Government are doing less towards coking 258 production than any other country in the EEC. I repeat that the policy of the NUM is to look upon any coke plant closure in the same light as a colliery closure.
§ 12.3 am
§ Mr. Edwin Wainwright (Dearne Valley)
I simply wish to say a few words about the Manvers coking plant. In South Yorkshire we were disturbed that the Manvers coking plant was closed. The Government should have aided and kept the plant open so that there would have been no claim for redundancy payments. They should have kept it open at least until a new coking plant took its place. Some of the batteries could have been used for several years, and during that period a new coking plant could and should have been built. Governments have promised that in the past. But, of course, because of the recession and the reduced demand for steel, resulting in a reduced demand for coke, we were greatly affected. The Manvers coking plant episode is over. The men decided to accept redundancy payments.
There is a feeling that the order will not cover some workers because of the date of the agreed closure of the plant. The Minister has indicated that the order is merely a transfer, but I want an assurance put on the record for my hon. Friends and for the coking plant employees who could be affected. It is essential that they should he guaranteed that the redundancy payments provisions will be a continuation of the existing agreement.
I should be happy if we could get an increase in the redundancy payments. The district is in a disastrous state. There is already 16.2 per cent. unemployment, and those made redundant from the coking plant will have to sign on as unemployed. The resulting effects will be a terrible calamity for Mexborough, Wath-upon-Dearne and the surrounding districts.
§ Mr. Wainwright
My hon. Friend is correct. Many of those employed at the coking plant come from the Thurnscoe, Goldthorpe and Bolton area. The unemployment record in that area is also high, though the coking plants employees are included in the Mexborough employment exchange area and, therefore, in the 16.2 per cent. unemployment.
I understand that the NUM and the NCB are happy with the order. We want a debate on the mining industry in general. We are disturbed about its future, which should be bright, because the demand for coal is bound to increase as supplies of oil and gas eventually reduce. If I can have an assurance from the Minister that the coking plant employees who have been made redundant will be safeguarded regardless of the date in the order, I shall be happy.
§ 12.8 am
§ Mr. Michael Welsh (Don Valley)
It is vital that the date in the order is not strictly adhered to. It was stressed during the Committee stage of the Coal Industry Bill 1980 that we must help the coke industry.
If 22 December must be adhered to and no retrospection can he allowed, it will be embarrassing to a number of employees in the coke industry. May we have an assurance that the date is not a firm date and that, as we were promised in discussions on the Coal Industry Bill, retrospection will be possible?
§ 12.9 am
§ Mr. Frank Haynes (Ashfield)
Like my hon. Friends, I welcome these proposals. I compliment the Minister, because he has not had the close association with the mining industry that some of my hon. Friends have had for many years. The Minister is doing his best to go round the industry and look at the situation. The hon. Gentleman is trying to help in any way that he can. However, he is a Minister in a Government who support a reduction in public expenditure.
The proposals will increase public expenditure. It is in the Minister's interests to retain our coking plants. In the final analysis, if those coking plants are not retained there will be further pit closures. That would be unacceptable to those of us who represent mining communities and who have an association with the National Union of Mineworkers.
Together with my hon. Friends, I shall fight to the death for the industry. The further closure of coking plants will have a serious effect on the mining industry. There will be one hell of a fight both in this House and outside to stop such policies. I hope that the Minister means what he says in our private talks about the work that should be done in the interests of the mining industry, those who work in it and the nation's economy.
§ Mr. Allen McKay (Penistone)
I shall not go over ground that has already been covered. Today there was a steel debate. We heard about the closure of certain steelworks. Such closures affect the mining industry. A colliery close to me supplies a steelworks in Rotherham that is about to close.
I welcome the measure because it is long overdue. The people involved have been treated differently from others in the mining industry. The order will bring them into line. However, I should like the Minister to consider some other people—namely, those who work in the central workshops that are not attached to coking works or to collieries. The closure of such workshops must be attached to the closure of a colliery. If that is not so, they will not come under the same scheme. This is an anomaly, because they alone will be left out of the scheme.
The Minister said that the date involved would be that of giving notice and not the date of termination. Does that create a precendent for the redundancy payments scheme? It is important to know. In addition, we must know whether there is to be any alteration. Although I welcome the measure, I cannot welcome the closure of coking works when we are importing coking coal from abroad. It is a sorry indictment of the Government and of the system that we should close coal works when we are importing coking coal. There is something seriously wrong with a system that allows that to happen.
A person with £2,000 in the bank will be debarred from claiming supplementary benefit. That is sad. A person receiving redundancy pay will fight to keep less than £2,000 in the bank when he should be investing money for the future. According to Government policy, a pound for every pound is docked from unemployment pay if a person receives £35—plus in superannuation pay. That is contrary to the meaning of the redundancy scheme. It is a traumatic experience to be made redundant. A man should not be kicked in the teeth as well.
I have not received any answer to a question that I asked on the phasing out of the earnings-related supplement. 260 Who will pay the earnings-related supplement? Will the men lose it, will the Government pay it, or are both to pay? I have not yet had an answer on this point, and it is very important for the finance of the board that we should get this straight.
§ Mr. John Moore
With the leave of the House, Mr. Deputy Speaker. I shall try to cover as many of the points as possible, within the ambit of the order, as briefly as I can at this time of night.
I would not wish, having been only briefly associated with coal, to see anything other than passion used in describing this great industry, so I in no way question or query the legitimate passion of the hon. Member for Midlothian (Mr. Eadie), who had a lot to do with the beginning of many of these benefits and has a legitimate reason to be proud of the kind of benefit structure that he helped to create when he was in the position that I now have the privilege to hold.
At the same time, I know that the hon. Member and I—and all those who are as interested as I am in coal—would like to have the opportunity for longer, fuller and more detailed debates on what most of us regard as our prime energy asset in Britain. The hon. Gentlemen touched on the external financing limit, the coal industry stocks and the position of coking coal grants through the European Coal and Steel Community arrangements. Those are areas that I would love to be able to go into tonight, but clearly they are not within the ambit of the legislation. But I take the points that the hon. Gentleman made and will draw the attention of my right hon. Friend the Leader of the House to the need for all of us, as soon as we come back after the Christmas Recess, to pursue these matters in a longer coal debate.
The hon. Member for Midlothian asked one specific question, which came up again later in the debate, concerning the dates in question, which are obviously of great importance to the industry. There is a little confusion here. It came first out of the question whether we could have retrospectivity. Let me make clear that all that the order is doing is effectively to allow the Government to pick up the benefit payments that are currently being paid by the board. To the extent that the board is currently paying the benefits, no change occurs in any way, whether the men are at Manvers cokeworks or anywhere else or whether they are tragically touched by redundancy. There is no change, effectively, to the men. The only change, effectively, is that the Government have a modest degree of flexibility to enable them to acquire that area of responsibility. That is what I thought we had agreed in discussions in Committee. To that extent, there is no real relevance to the discussion of the application of the order. It happens that we could have attached a retrospective character to the payments if within the Act we had established a retrospective feature. We did not do that, and we were not, until the Estimates were passed today, able to pay the board. The board clearly wants it as soon as possible. That is the effective background to Monday's date, no more and no less.
But there are points related to the nature and the timing of the redundancy payments—which come within the order and which are a second feature of the date in question—where there are clearly areas for further discussion and debate beyond this Chamber. It might, however, help if I put something on the record to indicate 261 the reason within the order for the specific change in redundancy timing, because it is of administrative assistance to the board and to the men.
The Amendment No. 2 Order, which we passed in June, related to the lump sums given to the pre-redundancy weekly pay of redundants. To calculate this, reference is made to the average pay for the 12 weeks up to redundancy. The Employment Protection Act lump sum is calculated by using the average pay for the 12 weeks up to the time that notice is given. To have two different bases for calculation and to be uncertain right up to the date of redundancy as to what a man's lump sum will be is confusing and creates uncertainty for the man involved. The present order thus makes the change. There should be no effective difference to the men. There are only minimal changes, but these will make it administratively much better for both the men and the board to organise.
Other points were raised specifically by the hon. Member for Penistone (Mr. McKay), who referred to the central workshops. Workshops, stores and plant pool depots ancillary to either coal mines or coal works are already covered by the redundancy arrangements of the board, but not by the arrangements that we are discussing of the Government taking up the additional RMPS.
The hon. Members for Morpeth (Mr. Grant) and Dearne Valley (Mr. Wainwright) and other hon. Members welcomed the help but deplored the need. Indeed, all of us do so. Nobody would wish to see redundancies in any industry, certainly not in the cokeworking industry, let alone in coalmining. I accept and share the sentiments behind the comments that were made. At the same time, all that we are seeking to do within the ambit of this modest order is to absorb a little of the cost away from the board into the State to offset the difficulties through which the industry is going. To that extent, this is of modest assistance. I commend the order to the House.
§ Question put and agreed to.
That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment No. 3) Order 1980, which was laid before this House on 5 December, be approved.