Coal Stocks (Hansard, 26 July 1982)

§ 8. Sir William van Straubenzee
asked the Secretary of State for Energy what is the level of coal stocks at the nearest convenient date at power stations in the United Kingdom.

§ 10. Mr. Eggar
asked the Secretary of State for Energy what is the current level of coal stocks held by the National Coal Board.

§ Mr. Lawson
At the end of June the figure in each case is 22 million tonnes.

§ Sir William van Straubenzee
That is an encouraging figure. Now that coal can be moved freely by rail, will my right hon. Friend assure me that he will use the summer months to build up the stocks to maximum capacity so that if, regrettably, the threat from Mr. Arthur Scargill were to materialise, the nation would be as well equipped as possible to meet it?

§ Mr. Lawson
Those are matters for the NCB and the Central Electricity Generating Board. I am sure that the NCB is anxious to sell as much coal as possible. I am sure that the CEGB is aware of the factors that my hon. Friend has mentioned.

§ Mr. Eggar
Will my right hon. Friend confirm that the CEGB has increased the percentage of electricity generated from coal? Will he say to Mr. Scargill that there is no point in producing coal merely for stockpiling, but that it has to be sold?

§ Mr. Lawson
My hon. Friend is right. It is true that the percentage of electricity generated by coal has increased. That is a counterpart to the amount generated by oil, which has diminished. If we were to go back from 82 per cent. generated by coal to 68 per cent., that would 735 cost an extra £200 million a year. As for consulting Mr. Scargill, that might be difficult, because at present he is on holiday in Cuba and does not get back until the middle of next month.

§ Mr. Eadie
Perhaps the right hon. Gentleman could be serious for a moment. Does he agree that coal stocks could be an appreciating rather than a depreciating asset, bearing in mind the problems in the Middle East? What level of coal stocks does he consider that the industry should have?

§ Mr. Lawson
It is as much for the industry as for me to decide that. I think that the industry would feel—I would agree—that the present level of pithead coal stocks is exceptionally high. Bearing in mind the present level of interest rates—we all want them to come down— the cost of carrying such stock is a heavy burden on the Coal Board. They are higher than is desirable. On the other hand, I agree with the hon. Gentleman about the desirability of having adequate stocks at power stations.

§ Mr. Squire
Bearing in mind the increased industrial activity on behalf of railway, Health Service and other workers that is now promised by the National Union of Mineworkers, can my right hon. Friend assure me that there is some danger of some stocks being reduced in the next six months?

§ Mr. Lawson
That may be so. There was a reduction in power station coal stocks during the prolonged ASLEF dispute in February and March of this year. I do not know whether, as a result of that, the generating board burnt more oil to preserve coal stocks. That was also attacked in The Economist. It is difficult to satisfy even The Economist at any time, let alone a more representative audience.

§ Mr. Hardy
Does the right hon. Gentleman agree that the problem of coal stocks or of an energy surplus will not be resolved until there is a Government who are eager to promote economic recovery? Will the right hon. Gentleman underline the point that he seemed to make earlier? Will he say clearly to the nation that it would be idiotic for Britain to reduce its energy production capacity to match the continuing recession?

§ Mr. Lawson
It is essential that the Coal Board makes itself economically viable. It recognises that. That is essential for the future and the success of the coal industry. That is true, irrespective of the present recession.