Coal Industry (Hansard, 19 February 1981)

§ The Secretary of State for Energy (Mr. David Howell)
I will, with permission, make a statement.
As the House knows, there was a tripartite meeting of the coal industry yesterday. This had been called at the industry's request to discuss the situation which had arisen following the meeting in London on 10 February between the NCB and the unions. At that meeting the NCB had outlined its approach to the current problems facing the industry. It had put forward a four-point plan for bringing the supply and demand for coal back into balance, whilst maintaining investment for the future. The plan included an accelerated programme for the closure of older capacity approaching the end of its productive life. This was to be discussed in detail in the areas. The board believed its plan to be reasonable and acceptable. However, fears and anxiety among the work force arose through rumoured and distorted impressions of what was being proposed.
It was against this background that yesterday's meeting took place. At the meeting three main points were raised—closures, financial constraints and coal imports. I said that the Government were prepared to discuss the financial constraints with an open mind and also with a view to movement. The chairman of the National Coal Board said that in the light of this the board would withdraw its closure proposals and re-examine the position in consultation with the unions. I accordingly invited the industry to come forward with new proposals consistent with "Plan for Coal".
As regards imports, I pointed out that these would, in any case, fall this year from their 1980 levels. The industry representatives said that they wished to see this figure brought down to its irreducible minimum. I said that the Government would be prepared to look, with a view to movement, at what could be done to go in this direction.
I welcome the decision of the national executive committee of the NUM today and hope that its lead will be followed. I will be meeting the industry again next Wednesday.

§ Mr. Merlyn Rees (Leeds, South)
Are not the contents of this not very explicit statement a victory for common sense over political prejudice against the nationalised industries following a foolish decision on the financial constraints in the Coal Industry Act 1980, about which we warned the Secretary of State? His assumptions were wrong, were seen to be wrong and have proved to be wrong. The statement also follows a period of ministerial and Prime Ministerial ineptitude in the handling of events in recent weeks which enabled the miners, correctly, to claim victory.
In what ways will financial help be given? It is not enough for the statement to include words such as the Government were prepared to discuss the financial constraints with an open mind and also with a view to movement". What sort of financial help is being considered? Will there be grants for specific purposes? Will the social charges of the NCB be transferred to the Government? Will there be an increase in the cash limits, which are obviously insufficient? When may we expect legislation to enable the Government to act? The Opposition will expedite any legislation that is required for this purpose.
Despite the fact that on Tuesday I was informed that all parts of the coal industry wanted similar treatment on 458 imports to that followed in Western Europe, the Secretary of State will recall asking me whether I knew what I was talking about. Mr. Gormley, when he came out of the talks last night after a preliminary meeting—if that was a preliminary meeting, I wonder what will come out of later meetings—said that there was a commitment on lowering imports. What is the commitment? How will it be implemented?
I again offer advice which I hope the right hon. Gentleman, as he did last time, will accept. There are still miners who say that they are not going back to work. Will he make his statement more explicit? Much as I want them to go back, I have heard this morning that the outcome is far too general and that they do not trust the Government. These matters must be spelt out, or the situation will become extremely difficult.
More generally, does the right hon. Gentleman agree that on a day when gas prices are being jacked up by Government decision, the Government's overall energy pricing policy is even more in tatters than before and that the Government's industrial policy is unrecognisable compared with that put to the electorate? The Government have not engaged in a U-turn: they are like a truck in a skid. Government policy has jack-knifed.

§ Mr. Howell
The right hon. Gentleman has made a lengthy speech in which there are a number of substantial points that I should like to seek to answer.
The right hon. Gentleman speaks about financial constraints and the Coal Industry Act which was passed last year. It was always recognised by both sides of the industry and in "Plan for Coal" that closures were necessary to reduce old and declining capacity and to modernise new capacity. That was always seen as necessary. That was the recognised purpose of the Coal Industry Act.
The right hon. Gentleman asks whether new legislation will be needed. The answer is "No". It was made explicit in the Coal Industry Act that there was flexibility and room for changes. I hope that this answers the question on legislation.
The right hon. Gentleman asked whether I would be more specific on what he called financial help and lower imports. I have to tell him that the words I used in the tripartite meeting, which I set out and which I have set out again today before the House, were explicitly put to both sides of the industry. It was on the understanding of those words that the industry agreed to come back next Wednesday to talk further. It was on the understanding of those words that the chairman of the NCB said that, in the light of them, the board would withdraw its closure proposals and re-examine the position in consultation with the unions. On the question of imports and financial help, I have set out precisely the statements that I made to both sides of the industry. It is on the basis of those that we will have continuing talks next Wednesday.
I am one who believes that talks on a constructive future for this industry are far better than seeing the industry tear itself apart on the basis of distorted and misleading rumours.

§ Mr. Terence Higgins (Worthing)
Does my right hon. Friend agree that there is no future for the miners or anyone else if people are kept in public sector jobs which, regardless of how hard they work, do not produce goods at a competitive price? Does he also agree that increased 459 public subsidies and higher borrowing are likely to cause higher interest rates and higher exchange rates, and to have a highly adverse effect on the private sector? On import controls, will my right hon. Friend say whether these require the assent of the House?

§ Mr. Howell
I agree with much of what my right hon. Friend says. When he mentions the burden on industries of uneconomic operations and when we talk about finance, we are talking about taxpayers' money, other people's jobs and the burden on other industries. If we are talking about energy pricing, mentioned by the right hon. Member for Leeds, South (Mr. Rees), one of the problems that has to be recognised—I know that it is recognised in the coal industry—is that the price of electricity, which is high, because we live in an age of high-cost energy, is one of the factors creating additional problems for industry.
Unless we can get competitive coal we cannot get competitive electricity and we shall not have the jobs that we want for our people. That is a lesson that has to be learnt. I agree with my right hon. Friend.

§ Mr. Joseph Ashton (Bassetlaw)
Is the Secretary of State aware that one of the reasons for the miners' anger was that they felt they were being punished for their success in increasing productivity? Would it not be a good idea to encourage other workers by rewarding them? Is it not a good time to start talking about a shorter working week for the industry, and to give miners the same holidays as schoolteachers or to offer them the same early retirement as policemen? Would this not be the best method of reducing coal stocks?

§ Mr. Howell
The hon. Gentleman has spoken about punishment, but the best reward for the nation, the industry and the mineworkers is a competitive, profitable, successful industry that can sell to overseas markets as well as to British markets, that can compete with other fuels, and that can produce and sustain investment and jobs for the future. That is what we are aiming for.

§ Mr. Speaker
Order. I gave hon. Members a long run on this subject yesterday. I propose to call three more hon. Members from each side.

§ Mr. Patrick McNair-Wilson (New Forest)
Although coal enjoys a substantial price advantage over oil, does not my right hon. Friend agree that there is an urgent need to stimulate coal sales? Will he therefore have talks with the Chancellor of the Exchequer to see what provision can be made for those businesses that wish to install coal-burning equipment? There are substantial tax advantages for those who want to make films, yet I should have thought that the coal industry was more central to our economy.

§ Mr. Howell
That point was put to me on Tuesday in the House. I recognise its validity. However, I emphasise the point that my hon. Friend made, namely, that coal has a substantial economic advantage over oil. Therefore, even as things stand, it makes good economic sense to tear out oil-firing equipment and put in re-boilering that is based on coal or coal conversion. That makes good sense and I should like industry to do that.

§ Mr. David Penhaligon (Truro)
Does it not occur to the Minister that the recent movements on British Steel, British Leyland and British coal can lead only to the conclusion that the movement required is one away from the Government's economic policy of high interest rates and high exchange rates for the pound?

§ Mr. Howell
The most important movement is to ensure more jobs, which means more competitive products. That applies to every industry, including the great energy industries such as coal. Both sides of the industry who have the interests of the industry at heart want it to go that way and to do so on a constructive basis.

§ Mr. Eric Cockeram (Ludlow)
Is it not the case that over the past few years the miners have behaved with restraint? Is it not true that they settled for a wage agreement that was about 4 per cent. below the going rate of inflation at that time? Is it not also true that they have increased productivity and that they have accepted a closure programme? Was there not peace in the industry until 10 days ago, when Sir Derek Ezra behaved like an IRA bomber and tossed in his report after he had first lit the fuse? Is it not apparent that Sir Derek has achieved his objective of squeezing more money—over and above the £800 million presently allotted—out of the British taxpayer?

§ Mr. Howell
As I said in my statement, the board believed its plan to be reasonable and acceptable. It put forward a plan for accelerated closures, which included, as Sir Derek Ezra pointed out yesterday, pits which were all virtually exhausted and whose average age was 93 years. When those figures are realised and accepted, some of the language that my hon. Friend used might not seem entirely appropriate. Ninety-three years is a considerable age for a pit, particularly when it is exhausted.

§ Mr. David Steel; (Roxburgh, Selkirk and Peebles)
On a point of order, Mr. Speaker. I am sorry to interrupt hon. Members, but surely it cannot be in order to call a public servant an IRA bomber.

§ Mr. Speaker
I am sure that the hon. Gentleman would like to withdraw any suggestion that Sir Derek Ezra is an IRA bomber.

§ Mr. Cockeram
I shall willingly withdraw whatever you request me to withdraw, Mr. Speaker.

§ Mr. Speaker
I am much obliged to the hon. Gentleman.

§ Mr. Gwilym Roberts (Cannock)
Does the right hon. Gentleman accept that my right hon. Friend the Member for Leeds, South (Mr. Rees) was right, and that there is still uncertainty in the mining communities? Does not the right hon. Gentleman agree that miners are realistic about pit closures when pits are exhausted? However, they are concerned that the Government should give a hard commitment to the need for an investment programme. Will the right hon. Gentleman at least reassure the miners this afternoon that the Government will back whatever investment is needed to maintain mining skills and to ensure our energy future?

§ Mr. Howell
The Government have made it perfectly clear, both repeatedly in this House and at yesterday's tripartite meeting, that they have a total commitment to the investment needed to maintain "Plan for Coal". That has never been in doubt and it is reflected not merely in words 461 but in the substantial borrowing for investment in modern and effective capacity. I hope that I have made that quite clear to the hon. Gentleman.

§ Mr. John H. Osborn (Sheffield, Hallam)
Is not the problem the high stocks of coal, and are there not EEC provisions for that? Will my right hon. Friend assure me that this arrangement will not result in more expensive coal and electricity for steel making and that there will be continuing opportunities for the export of surplus coal stocks to our EEC partners?

§ Mr. Howell
It is common ground within the industry that coal should be competitive and should take advantage of the growing opportunities to export coal to the markets of France and West Germany. Those markets are opening up and the Germans and the French are planning on colossal increases in their coal imports. It would be excellent if our competitive coal could get into those markets as well as into our own.

§ Mr. Allen McKay (Penistone)
Does the Secretary of State accept that this matter began not 10 days ago but with the introduction of the Coal Industry Bill in 1980? Does he accept that we warned the right hon. Gentleman, the Prime Minister and the Government that the Bill's timing would cause collieries to be closed? Will not the right hon. Gentleman accept that he must now regain the trust of the miners? I have spoken to some of my mining colleagues who are visiting the House today and those talks highlighted the fact that they mistrust the Government. Will the right hon. Gentleman accept that he should make a statement that is more explicit about the closure of collieries for reasons of exhaustion alone? Will he not accept that consideration should be given to the timing of the Coal Industry Bill in order to allow the industry more time in which to become viable once again?

§ Mr. Howell
I made the position explicit and I used the words that appear in the statement when I spoke yesterday to the NUM, the other mining unions and the NCB. I welcome the response of the NUM today. It reflects what I said. It has made a responsible decision which deserves the backing of hon. Members. Indeed, I hope it will have the backing of the hon. Gentleman.