Coal Industry (Hansard, 21 July 1980)

§ 6. Mr. Gwilym Roberts
asked the Secretary of State for Energy if he has any plans further to increase capital investment in the coal industry.

§ 22. Mr Edwin Wainwright
asked the Secretary of State for Energy what effect the recent Venice summit agreement to double coal production by 1990 will have on the future of the British coal mining industry; and if he will make a statement.

§ The Secretary of State for Energy (Mr. David Howell)
The Government's strategy for coal, as embodied in the Coal Industry Bill now before the House, provides for record levels of capital investment in coal and will give the National Coal Board opportunities to expand production provided that the extra coal can be sold at a competitive price. That strategy, which is a continuation of measures adopted by successive Administrations of both parties, is in entire accord with the declaration of the Venice summit.

§ Mr. Hardy
Will the Secretary of State confirm that the Venice summit commitment was not restricted to the North American continent? Even at this late stage, will he consider the inflexible time scale contained in the Coal Industry Bill to ensure that the coal industry 3 can maintain research into the use of coal and mining technology, as well as maintain investment in new and existing collieries?

§ Mr. Howell
On the last point, the coal industry's commitment to research is well up. We wish to see that continue because of the diverse and exciting future for coal and coal products. The Venice summit target was for all seven countries taken together. The reality is that Britain is streets ahead of most of the other seven, both in coal use and in the proportion of coal in total electricity generation. The pressure from the Venice summit communique was intended for the other countries, to bring them up to the British standards of coal production and coal use. There is no doubt that the greater scope for production increase will be in the United States. If that is achieved, the general effect, combined with our plans for the industry, will be to increase coal production over the coming years to about double the present levels.

§ Mr. Roberts
Does the Minister accept that there is real disappointment in the coalfields about the Government's response to the Venice agreement? Does he agree that, if we are to reach the coal production targets that have been discussed, there is need for an even greater drive in our coalfields and a speeding up of development in areas such as those in my constituency, where developments have been proposed? Is he aware that there is a growing fear for the first time in that coalfield about what the future will bring?

§ Mr. Howell
I know that there is a problem with the Park colliery in the hon. Gentleman's constituency. The Department of the Environment is considering the matter, especially the chlorine content of coal. In general, I do not agree with the hon. Gentleman that there is disappointment in the coalfields. It is recognised that massive investment is going into the coal industry and that the potential for the future is great, provided that we stick to present trends of higher productivity, lower absenteeism, better output per man-shift and, above all, competitive pricing for our coal.

§ Mr. Wainwright
Does the Minister agree that Governments may come and go but the coal mining industry will continue for a long time? Does 4 he realise that the financial restriction placed upon the industry will neither benefit its long-term prospects nor create a viable industry? Will he bear in mind the fact that it is better for the Government to look for more co-operation and less confrontation with the trade union movement to ensure that the industry grows and becomes competitive with other nations?

§ Mr. Howell
Much depends on the meaning of the word "restriction". When I think of the external financing limit on the coal industry this year of more than £ 800 million, the £ 500 million in operational grants over the next three years, the £ 600 million a year, at 1979 prices, investment in the industry and the fact that social grants will continue after 1983-84, I find it difficult to square that with the concept of restriction.

§ Mr. John H. Osborn
Is my right hon. Friend aware that coal could be a source of employment for South Yorkshire? He referred to the sale of coal at competitive prices. Is he aware that utilities in the Community—a possible export market—are shopping around for the cheapest coal available from insecure economic sources? What discussions has he had on an agreed price for coal for the future?

§ Mr. Howell
I am not sure about all the innuendoes in my hon. Friend's question. If he is talking about the expansion of coal trade and the coal needs, say, of West Germany, I can tell him that the Bonn Government recently decided on a 15-year plan for a vast increase in long-term coal contracts from wherever they can obtain the coal. There is no doubt that they will seek coal from wherever it is competitively priced. I would be proud, as would the coal industry, if Britain were able to compete in those markets in the future.

§ Mr. Eadie
Will the right hon. Gentleman for a moment drop his party dogma and think about the interests of energy provision for the nation? Is he aware that he cannot expect his answers to be accepted by the House when he persists in legislating to extinguish grants to the NCB in 1983-84? Is he aware that such persistence means pit closures and a consequent reduction in coal production? Does he accept that that is not the basis on which the Venice communique was 5 signed? Why do the Government pursue a doctrinaire policy that will lead to restriction in production?

§ Mr. Howell
The hon. Gentleman has it wrong. He is experienced in the coal industry and its administration. He is on record as saying that it would be better if the coal industry could continue in profitability without operating grants. That is our aim over the next three years. The hon. Gentleman is mistaken in believing that we are imposing a straitjacket. There is plenty of provision for grants in the £ 500 million of which I have spoken. There is plenty of provision for new investment. I do not see this as a straitjacket. I recognise that the hon. Gentleman has the interests of the coal industry at heart, but in this case he is wrong.

§ Mr. Speaker
Order. I shall call one more hon. Member from each side.

§ Mr. Adley
Will my right hon. Friend confirm that productivity has gone up since the Chancellor of the Exchequer reduced direct taxes in the last Budget? If that is so, should we not encourage that pattern?

§ Mr. Howell
I confirm that productivity in the coal industry is rising. I hope that it continues to do so.

§ Mr. Albert Roberts
Is the Minister aware that in the near future we shall require production of 200 million tonnes a year? If we are to achieve that target, will not a terrific amount of good will be required in the industry? What steps is he taking to ensure that the good will that exists is maintained and increased?

§ Mr. Howell
I am not sure about the hon. Gentleman's precise target figures. We need an expansion of coal production at competitive prices. I believe that we can achieve that. Good will in the industry, high productivity and big investment in existing faces and for opening up new pits are required. I believe that we can do no better for our coal industry than to ensure that it has the investment, the new equipment and mining machinery to provide the coal for tomorrow under better conditions than have obtained in the industry in the past.

§ Mr. Speaker
Order. This matter comes up again shortly.