§ Not amended, considered.4.26 pm
§ The Under-Secretary of State for Energy (Mr. John Moore)
I beg to move, That the Bill be now read the Third time.
I have no wish to take up the time of the House by repeating in detail the points that were made on Second Reading. On that occasion, and subsequently in our sittings in Committee, we have enjoyed excellent and full debates on the Bill and on what it implies for the future of the coal industry.
I have listened with attention and with great interest to the points that have been made by hon. Members who have had such a wealth of experience in the industry. Their speeches have revealed not only their great knowledge of the industry, but their concern about its future and the role that it can play in the nation's economy. I know that the hon. Member for Midlothian (Mr. Eadie) acknowledges that we share an interest in the industry's future prosperity and economic viability, and a concern that the National Coal Board should play its full part in meeting our future energy needs. The Bill that is before the House will help us to lay down the financial framework for the industry within which our common objectives can be met.
This is neither the time nor the place to dwell on the various individual concerns that many of us have about particular aspects of the NCB's business. I think that it would be helpful, however, if I were to explain why we can have reason for confidence in the industry's future potential and spell out what has to be done to ensure that it gets on the right course. It is not, and it could not be, the Government's job to run the pits and attempt to manage the board's day to day operations; but it is our job to make sure that the board's finances are sound, and that it is working to the correct financial guidelines.
Successive Governments have given their support and demonstrated their commitment to the coal industry. It was under the previous Conservative Administration that much of the groundwork was done for the NCB's "Plan for Coal," to which the Labour Government gave their commitment in 1974. The commitment of this Government has been expressed in the Coal Industry Act 1980 and in this Bill: we are continuing to make substantial sums of public money available to fund the board's investment and to support its operation and revenues.
The increase in the board's borrowing powers that the Bill proposes should be sufficient to sustain the board's capital investment programme at an appropriate level until 1983–84. The NCB's capital expenditure approval for 1982–83, at £886 million, will ensure that their substantial investment programme of £805 million this year continues at broadly the same level.
The increase in the limits on operating and deficit grants proposed in the Bill should again be sufficient to meet the board's needs to 1983–84. The Bill will also make continuing provision for social grants, which help the industry to alleviate the enormous burdens of the past.
The justification for the level of commitment that the Government are giving in terms of cash is our belief that 423 the industry can have a secure and prosperous future. However, the attainment of that goal will require much effort, from employees at all levels. The NCB needs to deal with, and overcome, a number of real and difficult problems.
First, we have to understand that coal production is not an end in itself. I quote the right hon. Member for Bristol, South-East (Mr. Benn), then Secretary of State for Energy, during the Second Reading debate on the Bill which became the National Coal Board (Finance) Act 1976:It is not meaningful in energy policy terms for a Minister to hold a self-contained discussion with the coal industry, the oil industry, or any other industry, without regard to the market possibilities which may exist for its products".—[Official Report, 27 November 1975; Vol. 901, c. 1065.]I agree with what the right hon. Gentleman said, as will all who realise that industry, whether in the private or public sectors, has to operate commercially—and win customers—if it is to succeed. In short, the need is not simply for more coal, but to expand existing markets and to find new ones, and to supply them with coal at competitive prices. A lot more can be done, especially in the industrial market; but coal does not have a monopoly—it has to compete with other fuels on commercial terms. In the longer term there are further possibilities, in the supply of feedstock for chemical plants, and also in other markets.
Secondly, coal needs to earn its living in its markets. This means being economic and competitive, and requires a continuing effort to reduce costs, increase efficiency and maintain reliability and security of supply.
If the industry is to get by on its own commercial merit, it must continue the progress which has been made in equipping itself as a modern industry, with efficient plant operated in an efficient way, improved working conditions, and no longer being held back by a tail of very high cost and uneconomic capacity; offering itself as ready for expansion to meet our energy needs in an efficient and cost-effective way.
Pit closures are, of course, inevitable in an extractive industry. However, providing that the industry can seize the opportunities for growth which are available to it, there would be a corresponding need for opening new capacity at both new and existing mines. This is the pattern which "Plan for Coal" envisaged, though it is now clear that the opportunities for coal are some years farther off than "Plan for Coal" envisaged, and that the industry will have to strive vigorously to reach these opportunities.
If new development is to continue, and if the industry is to take advantage of opportunities, the National Coal Board needs to be placed on a sound and firm financial footing. An industry based on financial viability and profitable growth, and which is able to earn a real rate of return on its investments, can ensure its own prosperity, and a secure future.
I would not wish, however, to give the House the impression that the board's financial difficulties can be solved quickly or easily. Its problems are very real ones, and many are deep-rooted. A lot of effort will be needed from all who work in the industry to solve those problems, improve performance, and help to establish a sound financial footing for the board. In so doing, the board's employees will demonstrate, as I believe they are now doing, that they want to have a secure future in an independent, viable industry, free from State subsidy, 424 which will be capable of making a positive real return on the huge sums of public money invested in it and of meeting, at competitive prices, the nation's demand for coal.
The main areas where concerted efforts are required are evident. The NCB's total costs have risen by an average 4 per cent. a year above the level of inflation in the five years from 1976–77. There needs to be constant effort to keep overall unit costs down.
Productivity also needs to be improved. The 3 per cent. improvement in output per man-shift so far this year is encouraging, but needs to be seen in the context of very disappointing performance over the previous decade, when there was no real or consistent improvement. If the productivity levels envisaged in "Plan for Coal" had been achieved, output per man-shift would have been 25 per cent. better today than it actually is.
Moreover, the effect on the board's finances of the recent improvements in productivity has been more than offset by falls in the NCB's sales and a corresponding increase in stocks. Of course, the fall in energy demand is a factor beyond the NCB's control; but the setbacks in the home market, particularly in the industrial sector, which has shrunk by nearly a quarter in two years, serve to emphasise the need for the board to make a real marketing effort, the main selling point of which must be the competitive pricing of the coal along with reliability of supply.
Finally, the board needs to demonstrate judicious management of the resources that are available to it, and, in particular, ensure that its investment projects are sound and likely to produce an adequate return.
Anyone who has had experience of the coal industry can readily bear witness to the quality of its management and the dedication of its workforce. I am confident, therefore, that the industry is more than equal to the challenges that it faces, and I am sure that it will succeed. The Government's confidence is reflected in the Bill, which seeks to help the board towards its objectives of being a business-like and modern industry. However, the Government can only set guidelines for the industry and create the financial background against which it operates. The industry itself must seize the opportunities which are available and put effort into achieving success.
I ask the House to reject the Opposition motion and to give the Bill a Third Reading.
§ Mr. Alex Eadie (Midlothian)
Had the Under-Secretary wanted to make some comments about the industry's productivity record, particularly over the past 10 years, he might, appropriately, have touched on how it has been starved of investment. I put that point on the record.
I do not intend in any way to minimise the importance of this Third Reading debate because changes related to moneys have occurred since the Second Reading and Committee stages, not concerned with the amount of money, but with its implications. The Under-Secretary will recall that we said we wanted to comment again on some issues when the Bill returned to the Floor of the House, based on his replies in Committee.
Although the Under-Secretary did not make a meal of efficiency, he made some relevant comments in his introductory speech. Efficiency perhaps best illustrates how the situation has changed; it shows how investment 425 in the coal industry pays off. The Minister will be the first to concede that it is now beginning to pay off and it was for that reason that I made my earlier comment about 10 years of practically no investment.
When referring to rising efficiency and investment, I am entitled to remind the House that the investment we are talking about paying off was the investment of the last Labour Government. However, things operate in that way because of the long lead times associated with mining development. Therefore, on Third Reading, we are, to some extent, debating the legacy of a future Government; this Government's mandate will be exhaused by that time.
Can the Government say how many new pit sinkings have occurred since they came to office? They have been in office for almost three years and I wonder how many new: pit sinkings they have pushed forward.
The Under-Secretary referred to the industry's efficiency or, perhaps, to the rising efficiency. By its own efforts, the coal industry is justifying the investment of public money that the Bill makes possible. Efficiency is rising, as is shown by the trend in productivity. In other words, output per man-shift is increasing—February was the best month the industry has ever had. Despite the effects on pits of the stoppages on the railways and the almost unprecedented weather, which also interrupted coal movement, output per man-shift for all employed at collieries was 2.51 tonnes—3.3 per cent. better than in February 1981. A fortnightly figure at that time was 2.54 tonnes—within touching distance of the all-time weekly record of 2.55 tonnes set last November.
The improvement is due to combined efforts of men, unions and management, and to the investment put into the industry under "Plan for Coal", worked out in 1974 by the Labour Government and the industry. The recent results, good as they are, will prove to be only the first fruits of our policy.
Another aspect of efficiency is safety. I raise that aspect for two reasons. First, because we were previously meeting in the shadow of the ignition that occurred at the Cardowan colliery, which was, happily, less serious than we first thought. Nevertheless, I put on record that the miners in that colliery, with the backing of the NUM, reported for work the next day; the pit was working except for the district affected by the ignition. I doubt whether many industries in Britain could claim that sort of record.
My second reason for raising the issue of safety is that a report appeared in The Sunday Times last month to the effect that fatal accidents in the coal mining industry had increased by 25 per cent. since the introduction of the productivity incentive scheme in 1978. Every fatal accident in the mining industry is one too many. I say that with some feeling. My father was killed in the pits. The statement in The Sunday Times, a trailer to the BBC 2 "Open Door" programme, is, however, untrue.
The number of fatalities in 1978 was 53, in 1979, 46, in 1980, 42, and in 1981, 35—the lowest ever recorded. That is still 35 too many. Every serious accident, even if it does not lead to death, is a tragedy for the man concerned and his family. There can never be any letting up in the drive for still better standards. It is good to see that progress is being made. As the Opposition have remarked many times, an efficient pit is a safe pit.
The public also want to see a safer industry. The capital investment directed towards the industry is helping to 426 produce one. It is essential to provide the resources to enable "Plan for Coal" to continue. The industry is doing its share. Opposition Members have already referred on Second Reading and in Committee to what have been described as subsidies to the coal industry. Government Ministers have got this matter wrong. I remarked on Second Reading that my hon. Friends and I hoped to torpedo for all time the argument that the mining industry is being subsidised.
I am sorry that the Under-Secretary of State figures among Government spokesmen who often talk unfairly about the subsidies provided for the coal industry. The payments are not generous when compared with those made by the German, French and Belgian Governments. Both sides of the matter should be studied more closely. The Under-Secretary of State stated in Committee that the Government were providing grants totalling £380 million in 1981–82, together with about £100 million for social grants.
There are good, humane reasons for the social grants, which cover payments for pneumoconiosis compensation, pensions and redundancy. I wish to concentrate on the remaining £380 million. This is almost the same amount that the industry will pay on money that has been borrowed. This year it amounts to £360 million or, expressed another way, £3 on every tonne of coal produced. The industry will receive with one hand £380 million from the Exchequer and pay back with the other hand £360 million.
I must point out to the Prime Minister that by far the greater part of the industry's external financing limit relates to money borrowed for investment in productive capacity. The £360 million interest payment shows that the nation is getting a return on the capital that was loaned. However, the Prime Minister always tries to give the impression that the whole amount is a one-way subsidy. Either she does not understand, or she is being deliberately unfair.
The nationalised industries, and, in particular, this great coal industry of ours, are not a burden on the national economy. The money provided by the Bill is creating a successful, wholly indigenous and secure energy supply. The present world-wide recession has been caused by the huge increase in oil prices since 1974. We have surely learnt that we must never again allow ourselves to become dependent on supplies of energy from abroad, especially from politically unstable areas such as the Middle East. My hon. Friends, I am sure, will endorse my declaration that a healthy coal industry is the one way of making sure that we can avoid repeating the folly that I have described.
I wish to turn now to the Vale of Belvoir, which has already been discussed on Second Reading and in Committee. I promised the Minister that the Opposition would return to the matter following the unsatisfactory replies that we received. We asked whether moneys provided by the Bill made provision for the Vale of Belvoir. What do the Government expect us to believe is happening when their bland reply is that this is a matter for the Secretary of State for the Environment?
We are asked to believe that Ministers within the Department of Energy, responsible for energy provision, are sitting with their feet up on the mantelpiece waiting for the Department of the Environment to reach decisions. We are asked to believe that there is no collective responsibility in Government, that the Secretary of State for Energy, who is a member of the Cabinet, has no 427 influence in energy decision-making and that he sits with his arms folded in Cabinet waiting to see what happens. That is stretching credulity too far. We do not believe it.
The Secretary of State for Energy must have a view. It is his responsibility to have a view. Since our last discussion, a propaganda piece against the Vale of Belvoir, written by Ronald Butt, well known to believe that he represents the conscience of the Tory Party, has appeared in The Times. He writes, as someone has remarked, to be classified and not to be understood. The article was so heavily biased that it brought a response from Joe Gormley, president of the NUM. Joe performed a demolition job.
Joe pointed out that the inspector at the public inquiry had considered "a huge weight of evidence". Mr. Butt left the impression that most of it came from the objectors. In fact, those who spoke in favour of the development included the Department of Energy, the European Energy Commission and the Central Electricity Generating Board. The two county councils involved, Nottinghamshire and Leicestershire, are also no longer opposed to the development.
Mr. Butt claimed that 4,000 properties would be put at risk due to subsidence damage. In fact, expert evidence, based on experience in other coalfields, suggests that two-thirds of all properties would not be affected at all and that only about 100 would suffer anything more than slight damage. None of the potential sites mentioned is in the Vale of Belvoir. Only one of the three proposed mines or sites is in the Vale of Belvoir. That name was given to the coalfields by the objectors for emotive and campaign reasons. The proper name should be the north-east Leicestershire coalfield.
Some new railway buildings would be necessary but the only development within the vale would be a reinstatement of mostly undeveloped track of a disused line. There would be no permanent loss of agricultural land as a result of waste disposal from the mines as only 3 per cent. of the total land area of the coalfield would be occupied by the mine site.
The CEGB has declared that it needs the coal for its local power stations. It said in evidence that it needed it to replace the capacity that will inevitably be lost through the exhaustion of reserves at pits in Leicestershire and Nottinghamshire. Joe Gormley said all this and more in answer to the propaganda effort of The Times columnist.
The Opposition said in the debate on the Vale of Belvoir—or the north-east Leicestershire coalfield, call it what one may—that it had now reached the proportions of a national scandal and that a decision to go ahead should not be long delayed. We repeat that again. The Government should make the announcement for the go-ahead for the mines, not just in the interests of the miners but in the interests of the future economic recovery of Britain.
I shall give a further example of the paralysis that has infected the Department of Energy by referring to the oil-from-coal research project. On Second Reading and in the Committee the Minister defended the chief scientist of his Department—I do not complain about that—when I pointed out that he had some responsibility for delaying the project. I have copies of correspondence from the NUM to prove it. One of the projects has been blocked. I referred to this in detail in my Second Reading speech and I shall again this afternoon. The Government stand 428 accused of playing their part in the abandonment of part of British technology in the development of oil-from-coal because of their failure to give funding.
Things are worse than that—this is a broken promise by the Government. They knew that a Labour Government had earmarked £20 million towards the oil-from-coal project. I know because, as the then Minister, I made the agreement. Indeed, I am the signatory to the agreement. It is in Hansard and on our parliamentary records that the Government promised that they would be no less generous than the previous Government. The promise has been broken. Only £5 million has been earmarked for the oil-from-coal project and it is tied up and wrapped up with conditions.
The Opposition can tell the Government that, whatever they may be known as in the future, they will not be known for their expedition as decision makers. Nearly three years in office, and there has been no start made to the pilot scheme and a broken promise in the funding. We want no more excuses. I regret to say, as it gives me no pleasure to do so, that it is beginning to look certain that a future Government will have to try to make up for the wasted years in the development of a British technology for making oil from coal.
In Committee I had some exchanges with the Minister that were, on the whole, friendly. I made reference to something that is especially important because of the Minister's introductory speech. He talked about the guidelines, financial accountability and costs for the production of energy. I referred to the Committee for the Study of the Economics of Nuclear Electricity, which had brought out a report called "Nuclear Energy: the Real Costs", "A Special Report". We raised this not because we wanted a debate on nuclear power but because the implication of the report could have an impact on the coal strategy that the Government envisage as being involved in the moneys we are asked to approve in the Bill today. The implications of the headline in The Guardian of 3 February "Nuclear Power Dearer than Coal", which was a prelude to a commentary on the report, have enormous ramifications for the coal industry. The CEGB said about power stations in its development review of 1978:After Drax B the programme will be exclusively nuclear.My hon. Friends have, over the years, never flinched in arguing that coal should be one of the major fuels in any energy strategy but our horizons have been wider than that. We have always argued for a broad-based coherent energy strategy that involved all the fuels that are indigenous and at our disposal. If it can be proved—never mind for the moment the other factors that are under challenge in the nuclear power dispute—that nuclear power is more expensive than coal energy, at the very least it calls for a reallocation of resources to energy provision in the country. I say that not only because of the Coal Industry Bill but because Parliament is entitled to hear from the Government as soon as possible their views on the report to which I have been referring.
I have set opt, I believe objectively, some of the issues that spring from the Bill that are of enormous importance and must be considered before Parliament comes to the decision to send the Bill to another place. The industry's top management structure is about to undergo a serious transitional change. The chairman, Sir Derek Ezra, will be leaving shortly. Norman Siddal, the deputy chairman will 429 go shortly. No successor has yet been named to replace Dr. Joe Gibson who retired as member for science, I was sorry to learn.
The successors, whoever they may be, are entitled to know the views of the House on the coal industry. I hope that the rumours that are circulating about chartered accountants and merchant bankers being interviewed as likely successors are untrue. I hope that that is idle gossip for, such proposals, as well as being extremely foolish, would be disastrous for the industry and would sow the seeds of distrust and disunity among the people who work in our great industry.
We do not intend to oppose Third Reading. The Bill is tied to the money resolution, and that makes it virtually unamendable. We could have reduced, but not increased, the money that is to be made available. We have no intention of doing that, because the industry needs the money now.
§ 5 pm
§ Mr. Dennis Skinner (Bolsover)
I agree with my hon. Friend the Member for Midlothian (Mr. Eadie) that it was necessary to table our holding motion to ensure that we had a debate. Those of us who are closely connected with the mining industry now have the chance to air our views. On Second Reading and in Committee many hon. Members were anxious to speak, but were not given the opportunity.
Until I heard it from my hon. Friend, I did not realise the full dimension of the interest payments. I have been going round the country talking about interest payments of £300 million each year, but it appears that the massive increase in interest rates, particularly in the past two and a half years, has caused repayments to reach the alarming figure of £360 million—£3 on every tonne of coal. That is incredible.
With interest rates still hovering around 14 or 15 per cent.—they have rarely been lower than that during the whole of the Prime Minister's period in office—it means that interest payments will consume all that the Minister is supposed to be "giving" to the coal industry. We know that the Government are not "giving" the coal industry anything. They are just hanging more debts round its neck. If the coal industry were treated in the same way as some of the private entrepreneurs who were engaged in the Stock Exchange activity of the past few days, perhaps it would not have so many debts round its neck. Instead, it could wear a mantle which would enable it to act more productively.
When the miners ask for a few more pounds in their pay packets, we must remember that they start with that handicap of £3 per tonne. When Arthur Scargill takes office in April—
§ Mr. Skinner
He is a grand lad, as my right hon. Friend said. My right hon. Friend lives near Arthur Scargill, but I am sure that he did not have to say that.
I am sure that Arthur Scargill will prove to be an able president of the National Union of Mineworkers, but he will be saddled with the same problem as those who have gone before. We need a Labour Government committed to removing some of the debts from the coal industry. Otherwise, the prospect of achieving what we want to do is remote.
430 My hon. Friends will be able to make some useful contributions because there are very few Conservative Members present. Moreover, there is not one member of the Social Democratic Party-Liberal alliance present, and I have been in the Chamber since the debate started. Yet those hon. Members, and others associated with them, are now carving up constituencies containing coalfields and arguing about the best men to fight the seats at present held by my right hon. Friend the Member for Doncaster (Mr. Walker), or my hon. Friends the Members for Penistone (Mr. McKay), Ogmore (Mr. Powell), Midlothian (Mr. Eadie) and Ashfield (Mr. Haynes).
§ Mr. Ray Powell (Ogmore)
I am not a sponsored Member, but I should have loved to serve on the Committee. Unfortunately, I was not invited. The hon. Member for Wrexham (Mr. Ellis), who has mining interests and represents a mining area, was on the Committee, but he is not here to participate in the debate.
§ Mr. Skinner
It is a scandal. The Social Democrats and the Liberals talk about breaking the mould of British politics. I am here most days. I take part in Question Time and in other debates. It is a scandal how often I have to draw attention to the absence of the Social Democrats and the Liberals. Today is not a special day on which they happen to be absent. It is the normal run of affairs for the Social Democrats and the Liberals. Every time that they are absent, breaking the mould somewhere, we should put the fact on record. No doubt they are breaking a bottle, or several bottles, of claret somewhere.
The former Shadow Energy Minister, the right hon. Member for Plymouth, Devonport (Dr. Owen), is supposed to have an interest in energy matters. He was given the job by my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) after Labour's election defeat in 1979. Where is he? He is with Roy Jenkins of Warrington and that crowd—no doubt planning the next ballot. Certainly it will not be a ballot about the coal industry.
§ The Deputy Speaker (Mr. Ernest Armstrong)
I remind the hon. Gentleman that we are on Third Reading. The debate concerns only what is in the Bill.
§ Mr. Skinner
I realise that, but I cannot discuss what is in this Bill—or, indeed, any Bill—unless I address my remarks to hon. Members in the Chamber. It is right for me to put on the record that the Social Democrats and the Liberals are more concerned about organising ballots to stop their rank and file members taking an interest in the coal industry, positive discrimination against women, or whatever. That has to be said.
My hon. Friends can speak with authority on the coal industry. They want to know what is happening and they want to take part in debates. My hon. Friend the Member for Ogmore said that he would have liked the opportunity to serve on the Committee, because it would have given him an opportunity to say a few things about the coal industry.
The Government are not giving anything. They are hanging further debts around the necks of the miners and the National Coal Board. The Government are giving our industry no opportunity to breathe or to compete with the industries in Germany, France and Belgium, where the subsidies are £20 a tonne, £30 a tonne, £40 a tonne, and in one case more than £50 a tonne. The industries in those 431 countries may be smaller than ours, but those Governments realise that it is vital to conserve and make the best possible use of their energy resources. They treat their coal industries in the same way as we treat agriculture.
The Government know that it is important for us not to import too many foodstuffs. They subsidise agriculture to get the greatest possible amount of food from our own land and resources. I accept that there is an argument about how the subsidies should operate, that there have been changes in recent years. Nevertheless, the Government recognise the importance of ensuring that our balance of payments is not too heavily weighed down by imports of food. They ensure that agriculture can take more of the market than it did previously. Over the past few decades, there has been a gradual increase in the amount of food that we grow for ourselves.
The mining industry should be treated in the same way. There should be no argument, because it is the same principle. Market forces cannot get coal out of the ground. Even the coal owners of the past understood that. It is, therefore, sensible to get as much coal as we can from the pits, and to utilise that coal in such a way that we can ride the troughs and the sloughs of depression, the booms, and so on.
I am not saying that the recession has come out of the fresh air. It is Government-inspired. Notwithstanding that, it is important that the coal industry should not suffer when there is a recession. The Opposition do not want to see pits closed and miners cast aside. Miners are being asked to accept redundancy.
About 11,000 miners—my hon. Friend the Member for Midlothian said 13,000—left the industry last year because of pit closures, and redundancy deals. Most miners want to get away, but thousands or young men are waiting to get into the pits. If we are to ride through this Government-inspired recession, surely the sensible thing is to ensure that we do not lose any coal by leaving it in the ground for ever more.
§ Mr. Ray Powell
Employment for young people is important. My hon. Friend addressed a meeting of youngsters involved in the youth opportunities programme who came to the House to demonstrate last week. There were thousands of them here. Most of them were from mining areas. My hon. Friend addressed about 200 from Welsh mining areas. What should the Government do to help these youngsters to get jobs? Instead of declaring people redundant in the mines, surely the Government should try to provide jobs for young people in the mines.
§ Mr. Skinner
My argument is that we should keep the present number of miners in the pits and, indeed, increase their number during this period of recession. If we do not do that, there is a danger, especially in areas such as South Wales, of pits closing. Therefore, it is sensible to recruit the young lads who are waiting at the gates in long queues, even in prosperous Nottingham where it was always a problem to get young people to enter the mines because of alternative industry in and around that area.
§ Mr. Skinner
Yes. That has happened despite the so-called halt to the pit closure programme in February 1981.
432 Surely it would be better to give an opportunity to all youngsters to go into the training centres—perhaps even on extended training courses when it is not possible immediately to get them underground, where most of them want to be—than to invent, for example, new Army and YOP schemes. That would be an investment for the future.
If in a few years we have a Government committed to planned growth and industry revives to a great extent, the manpower will be available. It would be nonsensical if, in five year's time, unemployment declined to about 1 million and at the same time there was a shortage of manpower in Nottinghamshire or Leicestershire because the Government and the industry had failed to take the opportunity to get more men into the pits.
Rather than shut pits, because there are more than 40 million tonnes on the ground, this is the time to invest. We must invest in all markets. The Department of the Environment should ensure, for example, that all new houses are built with chimneys so that householders have the opportunity to use coal if they want to do so.
That is a minor matter. The same can be said of export markets. As a result of certain difficulties in Poland, the National Coal Board has managed to export more coal. That is not tremendously important, because the starting base is so low. There has been a 100 per cent. increase, but we were exporting only a few million tonnes at the beginning. We are now exporting about 7 million tonnes. During the year, we shall increase our exports to about 10 million tonnes. We should be thinking of exporting about 20 million tonnes and capturing the overseas markets by using the potential that we have at home.
While we have massive stocks on the pit tops, we should have a large amount of retreat mining. That would mean that the Coal Board would have to forgo some of its recognised production until the boundaries were reached. As we have so much coal on the pit tops, it would not matter if north Derbyshire, north Nottinghamshire or the Scottish area did not produce as much coal per week or month. Instead, they would be going out to the boundaries and using all their manpower, and perhaps a little more besides. The resultant gains in productivity would be massive. In certain areas retreat mining has been practised. Now is the time for the board to do it, but we must not assume that it can do it in a vacuum. The board would immediately say "We need the brass." Here we return to the argument that the Coal Board should not be left with debts hanging around its neck. The Government should give the board an opportunity to use its initiative.
I do not want to start a row with my hon. Friend the Member for Midlothian about nuclear power. He talked about a total energy programme, and here we differ marginally. I do not want to go to the stake on the issue. I should like to see all nuclear power phased out. Perhaps we shall reach agreement in future. It is certainly an area in which we can expand our markets. The power stations could increase the amount of coal that they take. There is not the potential for a tremendous increase, but greater inroads could be made.
The Government-inspired recession must be used to invest for the future. That will be done by planning, not by market forces. If mining were treated in the same way as agriculture, tremendous benefits would accrue to the pits and to the miners.
My hon. Friend the Member for Midlothian talked about the social cost. I should feel guilty if I resumed my place without referring to the dying pit village of Langwith 433 in my constituency. I have taken the opportunity to talk about it in various debates over several years. The pit closed in about 1974. At that time there were 1,000 miners' houses. I visit the village every few weeks and I see row upon row of empty houses. The demolition of certain rows has started. When I see it, I despair. The speculators have move in. The Coal Board feels that it is not obliged to look after the miners and their widows. Some of them have lived there for 50 or 60 years. They built up the village round the pit. Now there is desolation. As I said, the speculators have moved in. Numerous repairs are outstanding. The village is a mess.
I have referred to Langwith yet again to ensure that it is on record. The Coal Board shut the pit. It did not seem to care about the village. Derek Ezra and all his underlings have been told, but nothing seems to be done. They seem to have washed their hands of the affair. They consider that it is not their business. They have sold the houses. They will not allow the local authority—I pleaded with them to allow it to happen—to take over the village. That is the legacy to which my hon. Friend referred when he talked about the social cost.
There are many more examples. There is a burning issue that involves a handful of miners throughout the coalfields. I am talking about those who worked in pits that were closed before the redundancy agreement was made. Some of the miners who retired were over 55 years of age, but others were younger. Even those aged 55 or more did not get a coal allowance, because the local agreements excluded them. It would be wonderful if some of these men—there is only a handful in this position—and some of the widows could have the chance to pick up about four tonnes of coal. Some of the widows had husbands who worked in the pits for about 40 years. They cannot understand why they have been excluded. The Government should investigate ways of ensuring that these people have a few tonnes of coal per annum, just like the others. Only a small amount of money is involved. I am not making a massive appeal to the Minister. I know that he is a smoothy. He might even have been writing it all down. It is not a massive amount. Surely the Government, despite their lack of compassion, could find a few pounds to ensure that that is done.
We must look forward to continuing the argument about retirement at 55. It will not go away. The coal industry must be discussed against the background of miners in many parts of the world retiring at 55. That is one of the matters to which the Government, in their last 12 or 18 months in office, and the future Labour Government, will have to turn their mind. I remember the arguments that went on when we tried to get retirement at 62. Sir Derek Ezra and all those clever people went on television and said that the mining industry would collapse because it would not have enough miners. Now thousands of youngsters cannot get into the industry. There is no argument about getting people out at 55. That is what we must turn our minds to in future.
The Minister will recall that on Second Reading several of my hon. Friends referred to the commuted cases for widows. He knows the argument well. I have had a relatively sympathetic reply. I do not yet know how to read it. I do not know what his thinking is. However, we are still pursuing that matter. I hope that the Minister will be able to get it through. I am suggesting £1,000 per head.
434 I know that £600 has been suggested by some people, but, with inflation and all that, £1,000 would not do any harm at all.
The Minister referred to achieving even greater productivity. Apart from the point that I made about retreat mining, it is difficult to increase productivity. I think that some of my hon. Friends, who have been working in the pits more recently than I and who came to Parliament later than I did, will agree that there are very few ideas that can be pursued to achieve more productivity underground. Apart from the idea that I put forward on retreat mining, there are few other areas for improvement in terms of capitalisation and investment in machinery. Mining is an extractive industry. We are running further and further out, to much wider parameters than many miners thought possible in the pre-war and post-war years. Therefore, we cannot expect much more in terms of productivity. We should understand that there are limits. New areas, such as the Vale of Belvoir and Selby, are bound to be more productive, because they are starting from scratch. In many cases, they have been using the best techniques right from the beginning. However, we should not expect that from all areas.
The industry has always been based upon the strong carrying the weak. We should not assume that because one so-called weak pit has gone into the red it should be looked at in isolation. Our industry is about Nottinghamshire and Derbyshire helping Scotland, South Wales and Durham, and vice versa throughout all the coalfields. That is the principle of the National Coal Board. It has nothing to do with market forces. We would have no mining industry if we acted in that fashion. We must act together.
The Bill will, of course, be given a Third Reading. However, let us try to ensure that a future Labour Government are committed to carrying out the kind of Socialist strategy that I have put forward—a strategy which my hon. Friends will no doubt endorse.
§ Mr. Michael Welsh (Don Valley)
I was not a member of the Committee on the Bill, but I accept that because I was a member of the Committee that discussed the previous Bill and all of us—especially miners—want hon. Members to take their turn and to contribute as much as possible.
Sometimes hon. Members talk about the NCB and the National Union of Mineworkers out of context. They are both involved in one of the greatest industries that Britain has ever known. Britain depends on it. We have no choice other than coal. The industry is great and is good for the nation. However, it has taken a tremendous toll of its miners. All hon. Members in the Chamber who have been miners have probably been injured. I have had operations on both knees and I have had broken arms—and I am still comparatively young. Many miners are injured.
Although there is no such provision in the Bill, I hope that there is enough money for a tremendous amount of research to be done not only on productivity, but on safety. It is vital to end the injuries. Miners do not have two complete hands with which to play dominoes in their clubs. Everyone has a finger or thumb missing. It is strange that at 45 I sat in my club having a swift half of bitter with six friends of about the same age and all of us had some sort of injuries. In this day and age plenty of lads are queuing up, rightly, to work in pits. There is a good spirit in the industry and men work with their fellows.
435 Conditions underground always leave much to be desired, but nowhere else could one find that espirit de corps. The lads want to work where their dads worked, and that is right. Nevertheless, a tremendous amount of money must be spent on ensuring safety and I hope that the Minister will consider that whenever the Government consider distributing money—in the form of loans or otherwise—to the NCB.
The social consequences of the industry also fall on the poor widows. Every day of the week widows come to me because they have to pay nearly 50 per cent. in tax on their widows' pensions from the NCB. When a lady told me that, I could not believe it. The first lady to come was German. A lad had married her in Germany. Of her NCB pension, 48 per cent. had been taken in tax. That woman had probably waited every day for her husband to come back. In the mining industry women never know whether their husbands will return. They do not know whether there will be a telephone call to say that their husbands are in the infirmary, or even still in the pit. There are still some men in my colliery. Sadly, we had to seal it and leave the men inside. We could not allow others to go in and try to get them out. It was accepted that they were dead and we could not risk any more lives.
§ Mr. Skinner
I had not intended to intervene, but my hon. Friend has raised an important point. It should be placed on record that the pension for a miner's widow or retired miner is only a little over £6. No one listening to this debate or taking down the words should imagine that they receive a massive amount. They have never paid tax on it before. An elderly person whose husband has passed away receives £29.60p in old-age pension and £6 plus a few coppers from the NCB pension. That is less than £37 in total. Those are the figures. For the first time in their history those people are being taxed by the Government. Why? As my hon. Friend knows, the Government refused to raise personal allowances by one penny piece in the last Budget. As a result those people have been brought into the tax net. That must be explained because some people might think that we are talking about big pensions.
§ Mr. Welsh
My hon. Friend is quite right. Those women cannot believe the level of tax that they must pay. They are good village people and take everyone at face value. They always thought that people were just, moral and God-fearing. Yet they receive letters saying that they will be taxed at 48 per cent. They cannot believe it. They do not believe that anyone would do such a thing to them.
One cannot get it through to those beautiful ladies that the Government have no compassion and attack the weak. The Government are attacking these beautiful ladies whose husbands have retired, died or been killed in the pits. It is unbelievable. Such ladies come to my surgery every week. I send their letters of complaint to the Secretary of State for Social Services or to the Chancellor so that they can read them.
We all accept that if a lad gets a leg taken off it is a terrible thing. In the past, accidents were not so severe. Although we have reduced the number of accidents, those that happen now are more serious. In the past, if a lad slipped off a conveyor belt he would probably break an ankle. Now, with steel conveyor belts, his leg will be whipped off. Present-day working methods are a completely different kettle of fish.
The price of progress has been that, whereas in the past a lad would receive industrial injury benefit immediately, 436 now, because of other circumstances and legislation, he will receive no industrial injury benefit. All that he wall receive is sickness benefit for the first eight weeks. The National Coal Board will now be obliged to pay out what the Government used to pay. A miner's colleagues will now go to the infirmary to see an injured lad who may have lost a leg and tell him that his sickness benefit will come through next week. He will simply not believe that. He will say that no one can be so hard on him, that he has hurt nobody in his life, that he works five good days at the pit, that he goes to church on Sunday, so he cannot see why anybody should treat him like that. That will be the result for that poor kiddie. What happens to the individual is more important than any Government legislation. We should not forget that all legislation affects the individual. That is the vital point.
As a result of the Bill, when that lad receives his benefit, the board must pay the difference. That is the result of the agreement with the Government. The board must pay more money than ever before, thus diverting money that could be used for other projects. The amount of money provided by the Bill has been increased because of those factors, but it will not be possible to get it through to the miners that they will not receive earnings-related benefit as they did before. If the miners have a shortcoming, it is that they believe that other people are as honest and sincere as they are and it is just not so.
My hon. Friend the Member for Midlothian (Mr. Eadie) spoke about new fields. It is said that in an extractive industry one closes pits. We all accept that. Indeed, that is what we must achieve. After opening a pit, miners must then try to achieve its closure by extracting every tonne of coal.
It is deplorable that, although one and a half years have elapsed since the inspector's report on the Vale of Belvoir was placed before the Secretary of State for the Environment, a decision has still not been made. As I have said before, and, as I think the Minister will agree, the Vale of Belvoir must be allowed to proceed. It must have three shafts. If we insist that the National Coal Board increases productivity and that unit costs must be reduced, there must be three shafts. I agree with that. It is good for everyone. There is nothing wrong with reducing unit costs. If permission is granted for only two shafts, unit costs will be greater. Surely the Minister will accept that.
If we are to help the National Coal Board to work efficiently, increase productivity and keep down unit costs, the Minister should examine the Vale of Belvoir from the point of view of good business. Perhaps the Minister will put pressure on his right hon. Friend to regard it in that way. I am sure that the Secretary of State for the Environment will consider it in that light. We must extract all the coal that we can from it, but to do that efficiently three shafts are essential. I hope that that point will be taken on board.
As my hon. Friend the Member for Bolsover said, the problem of investment in the industry is not what we are spending on it directly but the rate of interest involved. If it is agreed that there should be more investment and that output should be increased, perhaps the Minister will consider another matter that is near and dear to me—the Third world. Has the Minister examined the energy position in the Third world?
It may surprise people to know that some Middle Eastern countries generate power from British coal. One Middle Eastern country is totally dependent on Britain for 437 coal. If our coal is sold to the Middle East, it must be competitively priced to have won the contract. If we sell it there, why can we not expand our sales into the Third world—the whole of Africa, for instance—and help those countries with their energy requirements? The price of oil has crucified those poor countries.
Perhaps the Minister would consider discussing that matter with the chairman of the National Coal Board. There would be nothing wrong in his discussing the matter with the new president of the National Union of Mineworkers, a nice little laddie, moderate in his views and thoroughly acceptable. We should congratulate him on his success. I hope that he has a long and successful career as president of the NUM. I see no reason why the Minister should not discuss that matter with Arthur Scargill. It would be an opportunity to export more coal to those countries.
Investment in the coal industry is dependent on the Bill. Will there still be money to invest in places such as Bretby? It does much research for the industry. Without it and its like, the industry would not have advanced so fast as it has. Does the National Coal Board have money available to invest in Bretby? Mr. Peter Trigg-Ellis, who is director there, is an extremely capable man and has done much useful research into extracting coal on level seams, ensuring that the hidden eye keeps the seam level. If there is a level seam, one is home and dry. With a level seam, production levels can be kept high, everyone is happy, one gets a good top, the props are on a good top and the coal comes out like nobody's business. That type of research has been done at Bretby and I hope that it will continue.
I am disappointed that the future of coal is such that we shall no longer regard a mine as being full of coal but as a sea of oil. There is no doubt that coal will be the source of oil in the future. That is a pity. My hon. Friend the Member for Midlothian also expressed disappointment about that. All Opposition Members are disappointed about it. I hope that the Minister will say something about that. Will he examine the matter further to see whether at some future date more money could be invested in this?
I hope that we never have to extract oil from coal under licence from another country just because it has done the research before us. I hope that the Minister will speak favourably now and say that if the money is not already available he will keep a keen eye on the situation and more Government money will be made available for this great innovation if progress is made. It is one of the greatest new developments in the world. We have the coal, and there is no reason why we should not be the front runners in extracting oil from coal.
§ Mr. Ray Powell (Ogmore)
I have a great interest in the Bill as I am a miner's son, born and bred in the Rhondda valley, and I now represent Ogmore which contains a number of collieries—St. Johns in Maesteg in the Llynfi valley, Garw colliery in the Garw valley and Wyndham-Western colliery in the Ogmore valley. In November last year, the NCB decided to close the Coegnant colliery in the Llynfi valley, which had produced fine coking coal for this country for more than 100 years. As a result, between 200 and 300 miners were made redundant.
438 In my constituency, there are 3,000 miners and many other people are employed in subsidiary industries serving and supplying the collieries, so I have a direct interest. Moreover, when I realised that no real Welsh Member, democratically elected to represent his party, had sat on the Standing Committee, I thought it essential to contribute to the debate today and to draw the attention of the House, the Government and the NCB to the absolute necessity for investment in the Welsh coalfield. My hon. Friend the Member for Midlothian (Mr. Eadie) mentioned the Vale of Belvoir and other developments. I shall concentrate on the development of the coalmining industry in South Wales.
The Welsh coalfield needs a new deep mine at Margam. What is the current position? Has the Minister had any recent discussions with Sir Derek Ezra about the Margam project? I have raised the matter many times since 1980, and on 14 December 1981 I initiated a full debate on employment prospects in Wales, calling on the Government to increase investment in the NCB for developments, including the new deep mine at Margam, to ensure that the South Wales coalfield shares in the expansion and modernisation of this traditional industry which is so essential to Wales and to the nation.
Last week, we had a debate on Welsh affairs, which was opened by the Secretary of State for Wales. I was absolutely disgusted that after 54 minutes, in which he spoke of unemployment, water, roads, housing, hospitals and many other matters, the right hon. Gentleman had said not one word about the Welsh coalfield. Why are the Government ignoring the Welsh coalfield when its productivity record, as announced yesterday, is outstanding?
Despite the geological difficulties which make so many mines in South Wales dangerous and hard to work, the miners are playing their part. For the second year running, pit production has risen. It rose by 4.5 per cent. between 1979 and 1981 and by 3.6 per cent. last year. Yesterday's South Wales Echo, today's Western Mail and the South Wales Argus are full of praise for the miners and their productivity record in South Wales. Philip Weekes, managing director of the South Wales coalfield, has given full praise to the South Wales miners for their magnificent achievement, but more investment and modernisation are required to make the older, difficult mines as profitable as they should be. The miners are entitled to ask that the money be made available by the Government through the NCB and that long-life pits should be started now so that future long-term employment is guaranteed.
The closure of the Coegnant colliery prompts me to refer to the difficulties in my constituency. Most of those miners will be absorbed by the nearby colliery of St. Johns, but the closure means a loss of jobs and job opportunities in an area which has already suffered at the Government's hands. Unemployment in the Maesteg area is more than two and a half times greater than it was when the Government came to power. It is now about 20 per cent. and rising. The men believe that they have not been given a fair chance, that there are valuable reserves of coking coal and that investment to open new seams would have enabled the pit to continue extracting coal for which there is demand. The NCB estimated that an investment of £4 million would be needed, but decided against it on the grounds that there were geological difficulties and there was no certainty that any new seams would be 439 workable and profitable. Apart from strike action, the men had no alternative but to accept the decision, which they did on 7 November 1981.
The lack of investment is putting other collieries in South Wales at risk. Although pits are producing large amounts of coal at the coal face, lack of mechanisation reduces overall output figures. For example, output at the coal face in the Trelewis drift is 17.5 tonnes per man-shift, but overall production is only two tonnes per man-shift. At the Marine colliery, production is 12.5 tonnes at the coal face, but only 2.5 tonnes overall. The production and productivity of many collieries, some in danger of closure, can be improved if the NCB will invest in developing new seams, including mechanisation at the coal face, and in bringing coal to the surface.
The NCB manpower in the South Wales coalfield is 25,000—950 fewer than a year ago. In one year, there have been 473 early retirements and 300 men have left voluntarily. A total of 600 men, about half of whom were juveniles, have been recruited. The NUM complained that men taking early retirement were not being replaced. There is a shortage of men at the coal face. The development of new coal faces is being held up and men are often taken from the coal face to help in opening new faces. That means a substantial loss in output. As a result, pits will become uneconomic and will soon face the threat of closure. Serious trouble may arise unless more men are recruited to meet those needs.
Government investment in the South Wales coalfield was £35.6 million in 1979–80, £35 million in 1980–81 and £30 million in 1981–82. The Government are spending £5 million less this year than last and £5.6 million less than in 1979–80, a drop of approximately one fifth in the total investment in South Wales in the past three years.
The Secretary of State for Wales (Mr. Edwards) said:The Government are committed to…Plan for Coal and are making available…£800 million for the industry in the current year ."—[0fficial Report, 2 February 1981; Vol. 998, c. 9.]Investment in the South Wales coalfield is substantially less in real terms than it was from 1977 to 1980. At the end of November 1980, coal stocks in Wales were substantially reduced to 2.9 million tonnes of deep-mined coal, mainly steam-raising coal, which is 1 million tonnes less than a year ago. In the 13 weeks up to the end of November 1981, 900,000 tonnes were taken from stock. The reasons for that were the good performances at the Aberthaw power station, the success of the export drive and higher sales to steel works. The NCB expects to clear stocks by mid-1983. The output of South Wales pits increased by 6.4 per cent. in the past 12 months and if British Steel wanted to buy more South Wales coking coal for the Port Talbot and Llanwern works next year then the NCB will not be able to supply it because of its export commitments.
We are glad to hear of the extent of the NCB development and its success over the past year. The British coalfields produce the cheapest and best mined coal in Europe. The cost of coal in nationalised pits is £35 a tonne; in the private pits of West Germany it is £45 a tonne, in France £45 and in Belgian £61. The NCB finds it difficult to compete with European countries because of the high subsidies given to their coal industries. For example, the subsidy paid to the Belgium coal industry is £27 a tonne, to the French £15 and to the West German £12, and the French Government are increasing their subsidy substantially.
440 The NCB is heavily shackled by high interest charges on borrowed capital. As far as the current total is concerned, my hon. Friend the Member for Bolsover (Mr. Skinner) and my hon. Friend the Member for Midlothian have amended the figure I had to some £360 million. Exports could be increased if the Government increased the NCB subsidy and took over the burden of the high interest charges with which are inflicted on it by the Government's policies.
I should like to repeat a suggestion that I made in the House last year, and give the background to the development of the proposed mine at Margam. About seven years ago the NCB considered investing in this new mine. At the time the estimated cost was some £80 million and it was expected that the project would employ about 150 men immediately, but nothing was done about it. Since then, pressure for the project has built up, mainly because it would release huge reserves of first-grade coking coal for which there will be a demand in the very near future.
The current scheme envisages an investment of almost £200 million. It would take nearly 10 years to reach full production and would employ a thousand men. It would produce enough coal for the needs of the BSC and for export. It would be virtually on top of the huge Port Talbot steelworks and near the Llanwern works, thus reducing transport costs to a minimum. There would be excellent access to ports and railways.
When the new mine was first agreed, it was hoped it would be ready to absorb the men in the Maesteg area when the reserves at collieries there became exhausted. Since then the Caerau and the Coegnant collieries have closed and the Garw and the Wyndham-Western collieries have reserves for about 12 years. If the Margam project is begun soon, the men from those collieries could be employed in the new pit.
What will happen to them and to others if Margam is not opened? There will be fewer jobs, even less coal being produced and more miners on the dole and perhaps lost to the mining industry forever. The work force at the Wyndham-Western colliery in Nant-y-Moel holds the top position in the NCB's improved safety standards league and that is attributable to the skills of that work force. They work under very difficult conditions, needing expertise, knowledge and skill; they should not be constantly under this threat of closure.
The chairman of the NCB, Sir Derek Ezra, says that Margam is still a live project, but, because of the considerable depth, it appears that the costings are above the norm. Why are he and the Government not prepared to have this project classified as different, so that it has an independent investment in addition to the overall plan for coal?
Work should be started immediately to show the Welsh miners that the NCB has a duty to the Welsh coalfield. The only way it can survive is by such a commitment. Margam, with its reserves of 20 million tonnes of coal, would be the injection of confidence that the Welsh miners need. The young need to know that they have a future in the industry and the NUM needs to know that promises are kept. If South Wales is not to be dismissed as a declining and decaying coalfield, the fight back for the mining industry and for the Welsh people must start now.
The people of South Wales have been dominated by coal. Their whole environment has been destroyed by it. Now that things have changed they have earned the right 441 to new hopes of a bright future or of at least some future. Margam should be the start. I ask the Minister and the Government to discuss the issue with the NCB and the NUM as a matter of urgency so that that progress can be made at the earliest possible moment. It is a matter of national importance in which the Government must give a lead to preserve jobs and create jobs and to safeguard Britain's energy resources.
Since 14 December the European Commission has discussed the Margam project. Plans have been made so that money from the EEC can be invested in a project of this type if it were developed and if the Government would put pressure on the NCB, and perhaps give it more funds, to ensure its development.
I make no excuse for raising the matter yet again because it is important for the Ogmore constituency. It is also important to the constituencies of my right hon. and learned Friend the Member for Aberavon (Mr. Morris) and my hon. Friend the Member for Neath (Mr. Coleman). In that catchment area of three constituencies 26,000 people are unemployed. Unemployment in Maesteg is about 20 per cent. With a development of this sort it would undoubtedly be possible to ensure future employment in the area.
Earlier my hon. Friend the Member for Bolsover mentioned future development, and jobs for young people. Today 100 children from the Pencoed junior school visited the House. My hon. Friends the Members for Bolsover, Keighley (Mr. Cryer) and Bishop Auckland (Mr. Foster) addressed them. At the end of the discussion the headmaster, Mr. Tatchell, expressed concern about the future not just of young people of 16 or 18 but of those who have come here today, aged 10. We are a mining area, and we look to the NCB for development and for future jobs within Wales.
In last week's debate on Welsh affairs the Secretary of State for Wales mentioned everything but the Welsh coalfield. The House can be proud of Welsh miners who have represented constituencies. I think of Nye Bevan and others, who ensured that the future of the coal industry was secure. Unfortunately, over a period of years we have lost people who advocated future employment for the Welsh miners. However, I hope that the Government will heed my request for the development in Margam.
Several of my hon. Friends have already mentioned the widow's pension. I have received a letter from a Mrs Williams, of Pontycymmer, Bridgend, the widow of a miner. She says:My husband worked for 40 years in the colliery and I regret to say that he died in February 1976. I receive £29.60 widow's pension a week plus £6.62 NUM pension, which makes a total of £36.22 per week. I had a letter from the tax people stating that after 6.4.82 they will be taxing me on my NUM pension. Surely this is not right. I can honestly tell you I have great difficulty in making ends meet.We can well understand that.I don't get any allowance for my gas until I reach the age of 60 years. Then this will be debated between the NUM and the Coal Board. I have tried on numerous occasions to find work, but my age is against me. Also, I am under doctor's orders not to do any heavy work as I am suffering from a bad heart.Such letters are depressing. They come from people who are thoroughly depressed. I should like the Government to take action to help the widows of miners and pensioners in return for the stalwart work that the miners have done for the nation.
§ 6.2 pm
§ Mr. Allen McKay (Penistone)
As the Minister said, the coal industry is a vibrant industry and is poised for a great future, but that future is marred by the Government's policies. The Government talk about the future of industry, not only coal mining, but they are cutting home demand through their policies. Their monetary policies affect the mining industry, because it does not have the home market that it used to have. That brings not only financial but physical problems, because it costs a great deal to stock coal. We are worried, because before long there will be nowhere to stock it.
Hon. Members have talked about productivity. My hon. Friend the Member for Bolsover (Mr. Skinner) put his finger on the matter. I worked in the industry during a great period when we were weak in the use of electricity and lacking in knowledge. At that time the era of private ownership had only just ended. The old coal owners had had a great deal of say in what happened to the men in the pits. One went to school for a while, until one happened to have a shift off, and then school stopped, so most of our knowledge was gained in the old apprenticeship way, being passed down through the skills of those who went before. I worked in the era when to repair an electrical breakdown one first hit the switch with a prop, and only if that did not work did one open one's toolbag.
I left to enter the industrial relations side of the industry as we were approaching the stage of electronics. The increase in output during that period was tremendous, but as one breaks through to mechanisation a certain plateau is reached and then progress is steady and sometimes nil. We are on that plateau now. A further increase in productivity through mechanisation and modernisation will be difficult, though not impossible to achieve. The industry meeds revitalisation of the economy in order to build the home market again.
The export side is now beginning to grow and has distinct possibilities. It can take the surplus output. There is no doubt that we shall have surplus capacity. That is why I was interested when my hon. Friend the Member for Don Valley (Mr. Welsh) asked the Minister whether the industry had considered the Third world. In debates on nuclear energy hon. Members have not only talked about nuclear power stations for the United Kingdom but have made the excuse for continuing with that development that there is a need for such energy in the Third world. When we have the capacity to produce and export the coal, it would be silly to build nuclear power stations in the Third world. Exporting would have a knock-on effect throughout industry. If we export, we must have ships to carry the coal. That means building the ships, and for that we need the steel.
My union, the British Association of Colliery Management, is very much aware of the investment in the industry. It welcomes it and wants to see the Bill on the statute book, but it is also aware that there is a need for continuing investment, because Government policies are affecting the amount of money that the Coal Board has, and the amount that it must borrow, because of high interest rates.
There is a reverse effect. When the industry starts to economise, it must do so in terms not of men but of machinery. I have seen collieries that have nearly been closed simply because of the management's attempts to economise. It tends to cut back on the type of mining 443 machinery that is required, such as conveying machinery. One finds that gradually the conveyor belts are reduced from a width of 48 in to 12 in. Management tries to pare them away as it continues to use them, but then coal goes on to the floor and extra money is needed to clear it away. It is a vicious circle. Gradually one finds oneself getting into the terrible position of having to invest at a higher cost in machinery in which one should have invested a long time ago.
It is important that a decision should be made about the Vale of Belvoir, which is not excess or increased capacity, but replacement capacity. The replacement time for the Vale of Belvoir is now close. With a 10-year development life for the new field, the collieries in the Leicester coalfield could close before the replacement capacity is available. If that happens, not only does one lose productivity in the new coalfield, but one loses the men needed to work it.
I remember that when I worked at Hobart House there was an economist called Shoemaker. During the 1960s he decided that collieries could be put in three categories, A, B and C. Category A was the most profitable, B was on the borderline and C collieries had to be closed because they were uneconomic. I said that the policy was mistaken, because while one can beckon a man to come, he can shake his head and say that he is not coming.
That is what happened. The board closed the C category collieries and expected the men to move to B category collieries and create profitability in that area, but the men did not move. They closed the C collieries and lost that capacity, the B collieries decreased their capacity and ran into the C category. That is why we had the closures of the 1960s. I should not like to return to that.
With the exception of about four collieries, the collieries in the Barnsley area in which I worked were closed. On paper, they were the oldest in the Yorkshire coalfield, the most difficult to work and the most unproductive. A sum of £127 million has been invested in that coalfield. That investment was needed and must continue. One of the newest collieries, Kinsley, which is only three years old, is now becoming profitable.
Investment in the Barnsley area has not been on the machinery or coal face, but on underground development and four new washery plants. All the collieries in the Barnsley area have been linked together underground by one of the largest machines in the world, and four new plants are now being built. It means that we will have a quantity and quality of coal never before supplied by the Barnsley area coalfields. It also means that output and productivity per man will be increased by possibly half a ton to a ton OMS. That will make it one of the most profitable areas in the National Coal Board's crown, although not long ago it was scheduled to run down.
There is a price to be paid, because when one has a development like this there is a problem with four points of egress replacing 14. That means that all the dirt will be put into four places rather than 14. Some people say that it is better to have it in one place rather than to spread it around. There is some merit in that.
The National Coal Board and the House have to look carefully at the Flowers Commission report on the environment, which pointed out future problems. Investment will be needed by the Coal Board and the Government to get rid of eyesores, not only those caused by past coal owners but those caused by the National Coal Board. We tend to forget that the National Coal Board 444 inherited a great problem from the coal owners which the nation has to remedy. We have to look closely at the cost to the environment and the cost of moving the tipping areas.
That brings me to the development of the eastern side of the coalfield, because there is a possibility of a new area and a new era in mining by driving to the East Coast and sinking a shaft at Drax. The coal could be parcelled into nice, neat little blocks, which could be developed and worked as and when the economy required.
The coal could be brought out at Drax without any transport or environment problems and used for the power station. The dirt could be taken back to the East coast and a reclamation scheme started in that area. I believe that it is well worth looking at. It probably sounds too simple, and I feel that there must be some terrible snags.
The South Yorkshire county council has done a great job for the environment with some of the old tips. However, because of Government policy, the money provided for local government is being cut and they will not be able to spend money on fringe areas to create a new environment. There is a need for Government investment in the environment.
There is also the matter of subsidence, and I believe that we have to look at the working of the Coal Mining (Subsidence) Act 1957. I have always been a little wary of interfering with this, because a lot is left to area director's discretion, and there is always the fear that if one interferes with discretion one may kill the goose to try to get hold of the egg.
I have done very well with my area director over the problem of subsidence. Unfortunately, the old planners did not show a coal seam under the village of Elsecar. The coal seam was worked out many hundreds of years ago, with the result that it collapsed and let virtually the whole village in. The local authority lost about 140 prefabricated houses, which would have been pulled down in any case about eight of nine years later, but that period of life was lost. About another 40 or 50 local authority houses were demolished, so the cost has been tremendous, because, although the National Coal Board is generous with its compensation, it only pays the market value of the house.
There is also the problem of having to deal with the people concerned. They suffered the effects of subsidence for about eight or nine years while the National Coal Board continued to work the seams. They lived in houses, which had been temporarily repaired, and as Elsecar deteriorated they were affected physically and mentally. That is nearly over and settlement is taking place, but the scars still remain both in the district and on the people. If anybody wants to learn about subsidence he should talk to the people of Elsecar and he will get first-hand information
I have taken this matter up with the National Coal Board. I realise that there are problems in compensating for mental fatigue and destruction of the environment, but I do not think that it is beyond the realms of possibility for the Coal Board to pay compensation for stress and strain. There should also be Government aid, because the Coal Board will not be able to afford it all.
Compensation is paid for the terrible disease of pneumoconiosis. It is time that we looked at the effects of working in the coal industry on bronchitis arid emphysema. They are all closely related. I realise a large amount of money would have to be paid in compensation, but there is a time when we must look at the situation.
445 Many miners suffering from those diseases are convinced, as I am, that they result from working in that environment, and therefore should be classed as industrial disease.
The other reason for investment in the coal industry is the wealth that it creates for private industry. It creates wealth for firms that make mining machinery, hydraulic supports, conveyor structure and haulage equipment. The National Coal Board is also one of the greatest contributors to the rates of local authorities. That has another sting in its tail. The Government have cut grants to local authorities and the rates have increased. The cost to the National Coal Board in the rates that it must pay has also increased.
The National Coal Board is the greatest user of steel. Therefore, a rundown in the coal industry would affect the steel industry, and also the use of electricity. We should look at the way in which we distribute electricity. I was talking to Mr. Ian MacGregor, the chairman of British Steel, recently. We are now entering an era when we can build coal-fired power stations within the curtilage of some British Steel works. The combined heat and power method could be used in the new power stations. We could use the surplus heat and energy from the power stations, and also from the steelworks, to supply the surrounding villages with heat and energy. That would save a great deal of money.
On Second Reading hon. Members talked about privatisation of the coal industry. I did not say anything at the time, because it seemed ridiculous. However, the pace gained momentum, so something should be said. There is no going back to privatisation. The men who work in the coal industry would not accept it. It could not be afforded, because a vast amount of investment in the mines is needed to create a profit. A single unit would not be able to afford such investment without the backing of the rest of the National Coal Board and its units. The mining industry probably would not have been nationalised if private enterprise had been successful. It was because private enterprise, in the main, was not successful, and because there were poor conditions of work that the miners decided that the industry should be nationalised.
Privatisation is impractical, because the mines need specialist services. The services of geological, planning and project engineers, electrical and mechanical engineers, surveyors and marketing people can be provided by a nationalised industry, but a single colliery could not provide them. That is why small private mines sell their products to the NCB so that it can market them.
There is also a problem of safety and health. While I and others were working for the National Coal Board as electrical engineers, we were seconded on a cheek-by-jowl basis to work on private mines. It was usually after the mines inspector had called on such mines that were asked to put right what had gone wrong. We needed a four-yard rail to cross over the signal wires, so we had to do a good rejuvenation job in the private mines. Therefore, to talk about privatisation is not practical, either financially or physically.
I stress to the Minister what has been stressed to him time and again in the debate—the plight of the widows. Like my colleagues, I receive letters and representations from people from whom one should not have to receive them. The Minister should talk to the Chancellor of the 446 Exchequer, who could put the matter right on Tuesday, if he so wishes, by lifting the lower tax threshold. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) told the House after the last Budget debate that a widow on State benefit plus 50p was brought within the tax range. That is why miners' widows have been taxed at the high rate of 44 to 48 per cent. The Revenue has decided that the tax will be taken from one source. There is a tax not only on widows' State benefit, but on their pension benefits, which brings them up to the rate of 48 per cent.
This industry is poised for greatness. It can succeed. The only thing that it needs is help and encouragement from the Government and the reversal of their policies. If we can get that, the mining industry can provide all that this or any other country asks of it.
§ Mr. Frank Haynes (Ashfield)
As you have listened to the debate on the coal industry, Mr. Deputy Speaker, no doubt you have realised that there is a whole wealth of experience among hon. Members who have contributed so far. You will fully understand what is being said because you represent a mining area.
The Minister has also associated himself with the mining industry so that he can get to know what the job is all about. There is no doubt that due to the experience that the Minister has gained, although he represents a constituency called Croydon, which is miles from any pit, he has understood many of the things that have been said.
Like my hon. Friend the Member for Bolsover (Mr. Skinner), I remember many years ago when we first worked in pits. Like me, my hon. Friend worked there right up to the last moment before he came to the House of Commons. At that time the work force was 1,250,000. That work force is now less than 250,000, which shows the progress being made by the mining industry.
All Governments have tried to do what they could, bearing in mind the economic situation, about the finance for the development of the mining industry in the interests not only of the people who work in it, but of the energy requirements of the nation. The Minister realises that we are looking forward to a revival of the economy of our nation. We will be more dependent than in the past on the coal mining industry, for the future of people not only in their own homes but in industry, which will be able to obtain a cheap commodity from the mining industry.
During the recession we have many steps to take. My hon. Friend the Member for Bolsover referred to retreat mining, which can slow down the process of production during this period of recession, while at the same time developments are made in preparation for the revival. We will need every cobble of coal that we can produce in the future, never mind the 40 million tonnes of coal in stock on the surface at the moment, which will be swept up when the revival comes. We must remember that half of industry has closed down, so it is not using the fuel that we are producing. Therefore, we have a first-class opportunity to do something about development for future years.
Many years ago, the colliery manager of a pit I worked in approached the under-manager at the bottom of the pit and said "William, when I left home this morning to take my dog for a walk, I reached the foot of the second pit tip, sat in the glorious sunshine and watched the headstocks. I looked at the wheels turning and there was a 20 minute period when they never turned. I want to know why." He 447 was told that they were waiting for coal to arrive from the districts and that they would then get it up the shaft; while waiting for coal, the wheels stood still. The manager then said "William, it is your job to make sure that we have coal at the pit bottom to wind it up the shaft and, when I take my dog for a walk again, I do not want to see those wheels stood still."
When the manager next walked his dog in that pit area, the wheels never stood still because the under-manager had given instructions, if his men were waiting for coal, that it made no difference; they had to keep winding the chairs up and down the shaft because the manager would not know the difference. We have moved away from those days. We now produce so much coal that we cannot get it up the shafts.
We have a responsibility for the future development of coal because of shaft capacities, and the pits with coal faces containing millions of pounds worth of equipment that can only turn two shifts in 24 hours. That represents a waste of valuable resources. It costs over £1 million to man a coal face with equipment, even without considering manpower. That equipment stands idle for eight hours and we need to do something on shaft capacities. Skip-winding exists at many modern pits and, if we increase the size of skips, we will overcome the problem of getting coal up the shafts. However, shafts in the older pits will, in the not so distant future, dig into the lower and higher seams in order to increase production even further.
To increase its shaft capacity, a pit in my constituency—it was tub-winding and not skipwinding—put a 3 in. piece of steel around the tops of each tub to increase the capacity of the shafts. We must go much further than that. These coal faces must be worked on a 24 hour turnover each day to produce the coal we need in future.
I shall mention the Belvoir coalfield because I referred to it in Committee. The Minister, Secretaries of State for Energy and the Environment have not been forthcoming on Belvoir. Nobody in Government is prepared to make any announcement, bearing in mind that everything now seems to be in favour of working that coalfield. Belvoir is essential in one aspect for my constituency because my area contains many pits which, although not near closing, have only about 8 to 10 year lives. Belvoir will take 10 years to develop and that must happen in order to soak up the manpower to be laid off from the other pits. That is the nationwide situation on coal-mining and we must be prepared to deal with it in the proper way.
We waste valuable resources in the mining industry because of the Government's new word—"privatisation". The industry contains people with expert knowledge who can do many things for the interests of the economy and, in the main, for the mining industry. We should be allowed to produce some of the machinery presently manufactured elsewhere. I hope that the Minister will consider that point. People have been trained for such jobs but they are not being used. Men with university degrees are no longer brought into the industry to run pits. Considering the structure of management nowadays, it is apparent that they come from the coal face and, therefore, they know what pits are all about.
I agree with the reference by my hon. Friend the Member for Midlothian (Mr. Eadie) to Sir Derek Ezra, whose term as chairman of the NCB finishes in the near future. The Secretary of State for Energy and the Minister are ducking the appointment of the NCB's new chairman.
448 There is a feeling of unease, not just in management, but throughout the industry, because workers cannot learn who the new chairman will be. I hope that the mistake is not made of paying a £2 million transfer fee for somebody from America. The men will not accept that; they want somebody from inside the industry who knows what it is all about.
My hon. Friends the Members for Midlothian and for Bolsover (Mr. Skinner) also mentioned interest rates. I repeat that the mining industry has made a profit every year since the first day of nationalisation. However, it has been crippled by interest rates, which are half its problem; it has held back for that reason. I hope that the Government, when considering interest rates, will take such aspects on board in future. It is a public industry and, like any other public or private industry, it must borrow money. The present massive interest rates do not help.
I am not going on any further because I have said my piece. I am satisfied that the contributions made today were noted and I know that the Minister is prepared to listen. However, I simply hope that he is prepared to act.
I realise the difficult job that the Minister has when dealing with the Secretary of Starte for Energy. I have been here for nearly three years and know that we will not make much progress on public industries with the Secretary of State for Energy. He will make industry work for the private side—Amersham International was mentioned not many hours ago. I simply ask for a fair chance for the lads in the industry; that is all we want from the chairman and the rest of the board. We must give the workers the opportunity to prove to the nation, as they have proved over the years, that they can produce the future energy requirements that this nation needs.
§ Mr. Eric Ogden (Liverpool, West Derby)
Mr. Deputy Speaker, you have allowed what is usually called a wide-ranging debate on Third Reading. That is correct in view of the expertise that hon. Members have been able to bring to the discussion. There has also been the opportunity co hear from the hon. Member for Ashfield (Mr. Haynes) how William was persuaded to keep the wheels moving. I recall similar stories. I entered the House in 1964 when the hours were much longer than those about which hon. Members now complain. The hon. Member for Ince (Mr. McGuire) told me "Never mind, comrade"—we were comrades then and I hope that we are still friends—"the hours might be long, but the roof is better than the one under which we worked a few months ago."
It will be agreed, I believe, that if the coal industry is to have any chance of maximising its potential in planning, production, consumption or development, there is a need for a much longer-term approach than has been provided for the industry over the last 17 years. Planning and development should include factors in addition to those included in the tripartite agreement and the present arrangements that exist between the industry and the Government and between the Government and consumers.
I have been trying to decide, while listening to the debate, how many Coal Industry Bills have come before the House since 1964. There must have been eight—possibly nine. They seem to arrive at irregular intervals, although the average is one every two years. That seems much too short a time for anyone concerned 449 with financial planning and the operations of the National Coal Board, or any other industry, to be able to work. There is too great a degree of uncertainty.
Clause 1 increases the limit on the aggregate amount of borrowing by the National Coal Board, this time to £4,500 million, which may be increased by order to £5,000 million. Given the uncertainties of inflation and planning factors, I wonder how long will elapse before a new Bill has to be introduced. A better Bill would perhaps have removed any limits on the borrowing powers of the board provided that the board is responsible for its own borrowing and finances. I am not advocating privatisation on the Amersham pattern—indeed, the reverse. The board should be free to make and be responsible for its own financial arrangements. It should be able to make its own deals about money borrowed from Government sources. There should be no more of this biennial limiting of the amounts that the board can borrow.
If the Government cannot agree to what I advocate, I at least urge planning on a longer-term basis. Under the tripartite agreement between the National Union of Mineworkers, the National Coal Board and the Government, there has never really been the opportunity to look further forward than 12 or 18 months, or perhaps two years. It has rarely been possible to plan production and consumption markets involving the National Coal Board and its biggest customer, the Central Electricity Generating Board, more than 12 months or possibly two years ahead. That is too short a time.
The agreement on production between the NUM and the NCB inside the tripartite agreement has rarely looked more than a year ahead. There should be a new kind of tripartite agreement over a longer term involving the union, the Government and the management of the industry. To ensure security, the method of negotiating rewards inside the industry should be examined in the longer term. Security of supply also has to be planned on a longer term basis. It has been possible to negotiate Commonwealth sugar agreements and wheat agreements between diverse parts of the Commonwealth and consumers here over three years. Therefore, it should be possible to negotiate longer term agreements over the planning, distribution and production of coal.
There has been reference to the European dimension and the possibility of exports to Mediterranean and North African countries. The debate has concentrated on the physical exporting of coal. I feel that the National Coal Board could achieve greater earnings through the export of knowledge and expertise—for example, in the Chinese coalfields. Technique and technology are important. The hon. Member for Penistone (Mr. McKay), who has been a mine manager, spoke about techniques in level seams. The hon. Gentleman may have worked on the east side of the Pennines in the same seam where I was employed on the west side. Our seam was called the Bradford four-foot seam, Manchester. It may have had a different name in Barnsley. I do not believe that it was a flat seam in Barnsley. The Bradford-Manchester seam was a one in four. We were working on the side of a hill simply because of the geological strata in which the seam was enclosed.
If we were to develop our expertise in order to show people how to make the best use of their indigenous resources, we would be able to equal and possibly exceed our present earnings from the export of coal. To 450 concentrate on coal exports means that we neglect to a degree, but not entirely, the benefits that could come to this country if more attention were paid to the skills and knowledge that other countries need.
§ Mr. Allen McKay
Is the hon. Gentleman aware that the National Coal Board at present has teams in India developing two coalfields which should prove beneficial not only to the Coal Board but to private manufacturers of coal mining machinery?
§ Mr. Ogden
That is an extremely useful development. When the door was opened for Western trade and development in mainland China, the National Coal Board was one of the first to investigate the possibilities. I am not disagreeing with the hon. Gentleman about the benefits that we gain. However, I believe that he will agree that if more attention could be given to such development, it would assist not only the Coal Board and British manufacturers of coal mining machinery, but British Steel.
I should like to ask the Minister to draw to the attention of his colleagues, especially in the Department of the Environment, the unnecessary difficulties placed in the way of the National Coal Board by planning procedures. There has been reference to the Vale of Belvoir and to Selby. It takes 10 years to develop a new pit. If the United States—the land of free enterprise—needs only five years, even with its different geological structures, whereas our planning of replacements—I do not mean renewals—takes 10 years before even half a tonne of coal is produced, there is a need for investigation. It is not a matter of difficulties over safeguarding the environment or conservation. It is simply that if other countries can plan over shorter terms, we are missing opportunities.
We are trying to develop, plan, produce and consume our own resources and our own security for the future on a month-to-month and year-to-year, basis. That is no way to gain the maximum benefit for the industry. An attempt should be made to bring together the unions, the Government, the NCB and the consumers to decide what kind of industry and scale of production will be possible not only in the 1980s but in the years after 2000. We should then gain the long-term benefits that the coal industry can and should be able to provide.
§ Mr. Eadie
On a point of Order, Mr. Deputy Speaker. I am all for free speech, but it is a gross abuse of the House when hon. Members walk in to the Chamber and seek to intervene even though they have not heard the opening speakers or listened to the debate. To intervene in those circumstances is a gross liberty and an abuse of the House.
§ Sir Anthony Meyer
I should not have intervened, for the reason mentioned by the hon. Gentleman, had it not been for the fact that his hon. Friend rose to be called. He, too, has not been present until now.
§ Sir Anthony Meyer
I want to begin my speech by apologising for not having been present, because I have been—
§ Sir Anthony Meyer
I am grateful to the hon. Gentleman. He has made my point for me. I have similarly been on a Committee upstairs.
I shall be extremely brief. The hon. Gentleman knows the point that I am going to make, which I must put on record. If I had not intervened now I would have done so during the speech of my hon. Friend the Minister. The whole matter would have been dealt with a long time ago if the hon. Member for Midlothian (Mr. Eadie) had kept his temper.
My hon. Friend knows of my deep concern over the pilot project for obtaining oil from coal at the Point of Ayr. I can deduce what has been said in the debate and I dissociate myself from the allegations I have heard the hon. Member for Midlothian make from the Opposition Front Bench on previous occasions about the motivation of the Minister in this matter. I am satisfied both of the Minister's good faith and that he is determined to allow this pilot project to go ahead if possible.
I wish to question not the Minister's good faith, but the basis of the calculations by the Department in arriving at decisions in matters such as these. Inevitably, decisions are reached in the light of calculations drawn from purely British considerations. It has been my contention throughout that we ought to examine decisions such as this in a wider context. A project that may not be viable as a British project could become viable if it were examined in the wider European context. I know that the European Coal and Steel Community, the high authority, is making a contribution by way of both loan and grant to the project, but if the project were defined as a European project it would attract a much larger contribution, and I should like to see the Government going all out to get such a higher contribution.
Labour Members cannot join in on that tack, because every time it has been proposed from the Conservative Benches that there should be more co-operation in matters of energy with our partners in the European Community they have jumped against it as hard as they could. I remember the right hon. Member for Leeds, South (Mr. Rees) joining in to condemn ferociously any attempt to coordinate energy policies with those in the European Community.
§ Mr. John Ryman (Blyth)
I wish to apologise, as I already have done, for not being present earlier. I was on a Committee, but I have attended debates whenever possible.
I have a constituency point to make tonight. I represent a coal mining constituency. I wish to draw to the attention of the Minister, as I have on a previous occasion when he 452 was good enough to see me privately in respect of a particular pit, the severe problems facing the coal mining industry in the north-east of England, in Northumberland and Durham.
I do not share the complacency that seems to exude from some of the speeches so far tonight about the performance of the National Coal Board. Irrespective of what Government have been in power over the past 12 or 15 years, the systematic policy of the National Coal Board in the North-East has been to close pit after pit. It has done that irrespective of the merits of the situation. It seems to be a determined policy of the National Coal Board to indulge in the wholesale closure of pits in Northumberland and Durham, irrespective of the quality of the coal in those pits, the productivity or the longer term prospects.
The Minister will recollect that I came to see him less than three years ago about the Eccles colliery in Shiremoor where 550 men were producing good quality coal. I asked him to intervene in the proposed closure of the colliery. He received me courteously, made the usual inquiries, and then told me that he was unable to interfere because the correct procedure was being followed.
The result of that closure, which was the third closure in Northumberland within two and a half years of the small type of pit employing between 300 and 600 men. is that there is only one large pit in my constituency, Bates' pit, which employs just under 2,000 men and has the highest productivity in the country pro rata, as will be seen from the table in The Miner and other coal mining magazines. There has been no attempt to reverse the policy of the NCB. This is not party policy. It occurred under the Labour Administration as well. The NCB has systematically picked off pit after pit, knowing full well that it was dealing with an area of high unemployment and with no prospects of alternative employment if the pits were closed.
The tactics of the NCB in the North-East are always the same. The area director of the NCB went on television and began a wholesale public relations campaign exaggerating the subsidence problem of the Eccles pit. He hoped that that would dilute opposition to the closure. The engineer's report on the pit was marginal, but it was the subsidence factor that whittled down the opposition, because local residents were impressed by the NCB's argument, exaggerated as it was.
There was also the Government's lamentable performance in the weeks before the change of Minister when there was the threatened wholesale closure of many pits involving huge numbers of redundancies. This was avoided at the last moment only by strong action by the National Union of Mineworkers. Despite that victory, I am in a quandary. I believe that the essential tactics of the NCB are still the same, but, instead of involving itself in wholesale closures, it will do the job by picking off the pits one by one.
I want the Minister to know that there is great anxiety in Northumberland, Durham and Tyne and Wear about the intentions of the NCB and of the Government. Further restrictions have been placed on the cash limits of the NCB. I recognise that the Bill mitigates that to a slight extent, but there is still grave anxiety as to how serious the Government are in their encouragement of the coal mining industry. This is heightened by the open secret that the Government intend to apply for permission to build a nuclear power station at Druridge Bay in Northumberland, the whole purpose being to make that area the centre for 453 nuclear energy in the North-East of England, coupled with the policy of using the Cheviots as a nuclear dumping ground.
The Secretary of State referred to this matter when he announced the terms of reference for Sir Frank Layfield's inquiry into Sizewell in Suffolk in January of next year. The Minister may remember that, in answer to a supplementary question, the Secretary of State said that the Druridge Bay inquiry in Northumberland would follow the Sizewell inquiry next January.
What are the Government's intentions towards the coal mining industry in the north-east of England where there is a great deal of anxiety? Many people working in the industry are so discouraged by the prospects that reluctantly they are leaving the North-East for coal mining centres further south. The Minister recognises the problem and is rightly concerned about it. If the Government impose cash limits, the NCB's policies in the North-East will be accelerated and further pits will be endangered.
§ 7 pm
§ Mr. Peter Hardy (Rother Valley)
It would be impertinent of me to take long, because I have not been in the Chamber for all the debate. I have been detained in the Committee on the Oil and Gas (Enterprise) Bill, which is different from the Bill that we are considering. That measure is unacceptable, whereas we can accept this Bill, perhaps with mean reluctance, as being necessary.
My hon. Friends have probably dealt with the matters to which I shall draw attention, so my remarks will merely emphasise them. We have a successful coal industry. The Government may have some reservations about it, but any examination of the industry by the House or from outside will demonstrate that it is successful. It is by far the most successful coal industry in Europe. It is the test-bed of an important mining engineering industry. It must be retained on an adequate scale for that purpose.
The Minister will confirm that recent results demonstrate that the industry is determined to maintain its success and that it has reached a high level of success in recent weeks. Although it is a public sector enterprise, Government Members must recognise that the industry is successful and important and must be sustained.
My hon. Friend the Member for Blyth (Mr. Ryman) referred to closures in the North-East last year when the furore was on and two pits were singled out for attention. One was in my constituency, and it was closed last September. It was closed because there was agreement that further investment would take place. One agreement involved the Brookhouse colliery nearby. There was also to be an enormous investment—the largest in any colliery—at Maltby. That investment is now under way and will provide 500 jobs. It was a pity that Independent Television News said that 600 jobs would be created immediately, three days after the announcement of the capital investment was made.
The closure of Orgreave came because there was to be alternative investment in the area. That is why it is essential, not merely for Selby to proceed, but for other new fields to be developed. I refer once again to the advisability of the Belvoir development. The Minister has heard me refer to that before.
It is essential to maintain the path of investment for the sake not only of the mining industry but of the mining 454 engineering industry. It is important to promote the established success, which has just been re-emphasised by the most recent figures.
I do not apologise for referring to the need for the House to consider properly the environmental problems associated with the industry. The Flowers committee report is important. It should receive a higher priority in the determination of public expenditure. It would be a splendid gesture if the Government found time for a day's debate on that important topic. It is important to the coalfields of Britain, which are themselves important to Britain. The recent figures and achievements establish and reaffirm that importance.
I give the Bill a modest welcome. I hope that in dealing with the coal industry the Government will not go down the road that is wasting our time in the Standing Committee on the Oil and Gas (Enterprises) Bill. The policy adopted for the coal industry during the last two years should be maintained.
§ 7.5 pm
§ Mr. John Moore
With the leave of the House, I shall reply to the debate.
The debate has been extensive, but none the less welcome. All hon. Members who have participated have a commitment to the industry. I understand the limitations on some hon. Members who have to occupy themselves elsewhere on other business.
Most of the debate, has been related to the Government's commitment to create a financial framework to allow the deep mine industry to move in the successful direction that it is going. The hon. Member for Rother Valley (Mr. Hardy) was right to emphasise that. Ours is the best developed, most efficient deep mine coal industry in the world. I pick up the hon. Gentleman's point about Western European comparisons.
The Flowers report is a crucial document. We discussed it briefly on Second Reading. It merits attention. I am not capable of deciding on the business of the House, but I shall draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Leader of the House. We are still taking advice and evidence from all parties.
The hon. Member for Liverpool, West Derby (Mr. Ogden) made one or two important and useful points. However, I am not comfortable when he talks about tripartite matters. He spoke of going beyond tripartite to other areas of debate. Those who seek to represent the whole of the community, beyond the specific areas of the coal industry's management and its unions, should debate the matter in the House.
The hon. Member for West Derby expressed anxiety about the number of coal Bills and coal debates. We would share some of his worries if such Bills and debates sought to change the need to make long-term decisions about the industry. I sympathise with the hon. Gentleman's attitude, but we must differentiate between Parliament's need, in so far as it is concerned with public moneys, and the need to scrutinise expenditure and review policies. That is legitimate when long-term circumstances and strategies change. We have a fair degree of understanding and similar attitudes on that.
The hon. Member for West Derby talked of the potential for exporting the Coal Board's skills. I was glad that at that point the hon. Member for Penistone (Mr. McKay) intervened to draw our attention to the many places in the world that have benefited, and I hope will 455 benefit, from the extraordinary engineering, managerial and other skills associated with our coal industry. Places all over the world benefit from its skills, and the industry brings not only money to the board, through consultancies, but the important prospect of contracts, and therefore jobs, to all the great companies involved in manufacturing machinery. Many companies gain from the board being involved overseas. None of us should under-estimate the excellent work done by the board and the industry in that connection.
I hesitate to refer to the hon. Member for Ashfield (Mr. Haynes), because his blandishments are becoming almost embarrassing. I shall find myself in considerable difficulty if he does not stop being so nice to me. I appreciate his recognition of my interest in the industry, but it is becoming a little uncomfortable.
The hon. Member for Don Valley (Mr. Welsh) apologised to me for not being with us for the end of our debate. He has other constituency and public business to attend to. He raised many important points. I was interested in one matter in particular, as I am sure were all hon. Members who visited Bretby. I refer to the nature of long-term research in the industry.
Those who know about the coal industry's research at Bretby will welcome the hon. Gentleman's remarks. This area has shown steady growth in real terms in recent years, consistent with the board's drive to improve coal mining technology. For example, in the Bretby research area total expenditure in 1980–81 was £33.4 million, and revenue expenditure for 1981–82 is expected to be similar to expenditure last year.
We should put the qualities and abilities of Bretby on the record. The expenditure covers all aspects of mining, research and development, face technology, control and automation, comprehensive monitoring, tunnelling and basic research. The NCB does not seek Government support for such work. Those of us who know about the seismological computer work at Bretby know that it is a world first.
Beyond that, coal research accounted for £13.3 million in 1980–81, which covered short and long-term work aimed at extending and improving the markets for coal. This includes work on coal combustion systems, handling ash disposal, as well as liquefaction and gasification. I shall refer to liquefaction later.
The hon. Member for Ogmore (Mr. Powell) raised many points. He legitimately referred to the Welsh coalfields and the problem of Margam. I remind him that we are debating the overall capital investment programme of the industry. As I said at the beginning of my speech, in 1982–83 we look to a figure of £886 million in capital investment against the current figure of £805 million for this year. Those are substantial sums of money. However, I recognise and understand the point he made about Margam.
I recently visited Cynheidre, an excellent pit in South Wales, where I was deeply impressed by the dedication and skill of the men. They have done a splendid job, particularly during the difficult conditions of this winter in that part of, the country. However, decisions for particular projects are for the board. As the hon. Member for Ogmore told us, the economics of the project are unfavourable. The estimated operating cost of obtaining coal from the pit would be about two and a half times the national average. Nevertheless, the board's coal mining engineers are exploring ways of making the project viable.
456 However, during recent tripartite discussions the NUM recognised that it will be no service to industry, or to Wales, to allow the board to take on uneconomic schemes that could be a long-term burden. However, I shall draw the board's attention to the points made by the hon. Gentleman.
The hon. Gentleman is confused on the question of subsidies. He said that we cannot compete against the other European coal industries because they receive higher subsidies than the NCB. As I have repeatedly said, I do not deny that. The hon. Gentleman suggested that we cannot compete because of those subsidies. However, it is the investment realities that count.
On Second Reading I gave the 1981 estimates from the European Commission for investment in coal production. The figures are, for Belgium £27 million, France £34 million, West Germany £265 million, and the United Kingdom £698 million. We are selling our coal to those markets. World-wide, we are net exporters of coal, and the countries that the hon. Gentleman says we cannot compete with are importing coal. Belgium imports over 63 per cent. of its requirements, France over 61 per cent., and West Germany over 10 per cent. with higher imports planned. We can more than compete in those markets.
The hon. Member for Penistone made a thoughtful speech. He reminded us of the importance of the coal industry to the private sector. That important point should be drawn to the attention of people outside the House. The board spends about £1 billion each year, and 98 per cent. of it is spent in the United Kingdom. That is a significant sum against a turnover of about £4 billion.
The hon. Gentleman also referred to widows and taxes. The hon. Member for Bolsover (Mr. Skinner) and other hon. Gentlemen also referred to that problem. I am conscious of the point that they are making. However, hon. Members will understand that I cannot comment on general questions of taxation which are in the province of my right hon. and learned Friend the Chancellor of the Exchequer. However, I shall draw his attention to the remarks that have been made in this debate by at least four hon. Members.
The hon. Member for Penistone also raised the subject of subsidence. Although this matter is still under consideration, because of the Flowers report, further discussions are clearly under way. I shall put on record the current position, as the Government see it.
The 1957 Act provides that the National Coal Board remedies or pays compensation for damage caused by coal mining subsidence. The statutory provisions were augmented in 1976 by the board's introduction of a voluntary code of practice, covering such items as compensation for losses to household goods, furniture, crops, stock-in-trade, and plant. In recent years it has been the board's practice to set up subsidence liaison committees, whenever it anticipates that there is a danger of surface damage which might have an appreciable effect on residential communities. In this way, all those who are likely to be affected are informed of their rights to claim, how to act in an emergency, and how to get in touch quickly with board officials and contractors to deal urgently with any repair work that might be needed.
The many improvements in dealing with claims is evidenced by a 100 per cent. increase, in real terms. of the annual amount paid in compensation since 1976. In 1980–81 the amount paid was £54.7 million. I am sure that 457 we shall return to this topic again in other debates, but I thought that it would be useful to remind the House of the changes in this connection.
The hon. Member for Penistone also raised the subject of bronchitis and emphysema. We had a modest debate in Committee on this matter. The subject is kept under constant review to take account of developments in knowledge. A DHSS paper that covered the topic, among others, was submitted by the tripartite working party, which I chair, and was considered at its meeting last July. It said that there was no reason at present for moving from the view expressed in the review which the Industrial Injuries Advisory Council published in 1973. That review said that bronchitis and emphysema could not, on the evidence available, be prescribed at present as industrial diseases in their own right.
The hon. Member for Bolsover, in a sterling contribution to our debate, left me feeling that I really cannot win when it comes to the Coal Industry Bill. I thought that we had sought to provide considerable additional funds to the industry, but obviously, by seeking to increase its loans, we have hung debt around its neck. Most organisations, whether private or public, welcome the opportunity to borrow funds, even at the risk of paying interest. However, I reconcile myself to my inability to win in this connection.
The hon. Member for Bolsover recognised the particular difficulties over the social cost and burdens of the industry of the past. I understand what he says, and I am sure that none of us would seek to distinguish the social costs from the other forms of grants related to the industry. I shall pursue the point that he raised about those whom he suggested were statutorily excluded from concessionary coal. I shall write to him on that one.
The hon. Gentleman spoke also about improvements in productivity and the point beyond which improvements cannot go. He talked about retreat mining. The hon. Member for Ashfield was interested in this subject, but I shall not pursue his William analogy and his wheel that never stopped turning. No one who has been at Bretby can assume that there is not further potential for productivity increases.
Most people accept the varied nature of the mines that we are looking at. A mine such as Cynheidre in South Wales has a floor movement that does not necessarily exist in other areas and a certain number of men working there, compared with the number of men who do not need to be involved in floor movement in other mines. So one can understand the different productivity in different mines.
No other country can begin to compete with Britain in longwall mining techniques and mechanisation at the face. I note the remarks made by hon. Members, including the hon. Member for Ashfield, about the problems of shaft capacity and the inability to move coal from the face to the pithead. Those are areas where important improvements in productivity can be seen. I accept the limitation question, but there are other areas, from face to pithead, where there are many modern developments and where the board is in the lead. Last year I visited Rawdon colliery, where new underground vehicles are tested.
As I told the House on Second Reading, the National Union of Mineworkers has proposed that the Government should finance an extension of the National Coal Board's pneumoconiosis compensation scheme so that persons 458 previously excluded from the scheme as commuted cases, or their widows, will receive £600. The question of commuted cases is of long standing. As I said in my letter to the hon. Member for Bolsover, and to other hon. Members, including the hon. Member for Midlothian (Mr. Eadie), I am giving it the utmost sympathetic consideration.
The hon. Member for Midlothian, in a lengthy speech—the Bill merits a lengthy speech and I do not seek to be critical—raised a number of issues while recognising that there is support for the Bill from both sides of the House. First, he referred to the exceptional activities of the industry in the difficult days of January and February in some of the worst weather conditions Britain has experienced this century. The industry showed its ability to move coal and to continue to achieve high productivity levels. The hon. Gentleman rightly drew our attention to those levels and to the fact that in February all-time records for productivity were achieved. The industry is to be commended for that.
The hon. Gentleman also referred to safety. We were all aware of the difficulties during the previous debate which took place shortly after the Cardowan incident. The House should know that only nine of the injured are still in hospital. They are all on the road to recovery and none is now in intensive care. The others are convalescing at home, but none has yet returned to work. That is good news to all who are concerned with the industry.
The hon. Gentleman also raised the old vexed subject of what is a subsidy and what is not. I understand those who look at the other side of the coin and argue that the industry's interest burden reinforces the need for subsidies. The operating and deficit grants for 1981–82 are £467 million. The total of those grants with social grants would be£567 million against an interest bill of approximately £350 million for 1981–82. Many companies would be happy to be able to borrow money and pay interest.
§ Mr. Eadie
Companies borrow and their borrowings do not count as subsidies. No company that borrows money and pays interest regards that as a subsidy. That is what we have said today, on Second Reading and in Committee. We resent the fact that the Prime Minister and the Minister always talk about subsidies when a nationalised industry has to borrow and pay interest. We object to that.
§ Mr. Moore
I shall repeat the argument on behalf of my right hon. Friends. The operating deficit and social grants are the subsidies to which we refer. They total £567 million for the fiscal year 1981–82. If the Government felt that the industries did not merit the subsidies, they would not be introducing them in the Bill.
The hon. Members for Midlothian, for Rother Valley, for Ashfield, for Don Valley and for Penistone referred to Belvoir. I hear what they say, but I must repeat what I have said before, and that is that it is a matter for my right hon. Friend the Secretary of State for the Environment.
§ Mr. Moore
My right hon. Friend is considering the report of the inspector who conducted the public inquiry into the National Coal Board's proposals and will announce his decision as soon as possible.
My hon. Friend the Member for Flint, West (Sir A. Meyer) has been very assiduous, as I would expect him to 459 be, in the pursuit of his constituency interest in liquefaction. The issue has been raised by the hon. Members for Don Valley and for Midlothian. I understand the passion of the hon. Member for Midlothian, who is almost the godfather of the project. However, I hope that he will not seek to hurt the project by suggesting that the record will not be put correctly from the Government Dispatch Box.
The board's decision to proceed with a single process facility was based on the preference of the prospective commercial partners for the liquid solvent extraction process, which on paper gives a better yield than the less developed super critical gas extraction process. The Department made it clear on 15 June 1981 at a meeting of the National Coal Board—BP liquefaction steering committee that the £5 million support offered by the Government would apply in full to either a single or a dual process facility.
I must correct certain statements by the hon. Member for Midlothian on Second Reading which he repeated tonight. The agreement between the Government and the board was signed by the hon. Gentleman. It was one of the first documents that I studied when I took over his job. The document was signed on 19 February 1979. The Government's support in that contract was limited to £800,000. It covered design studies, technical support and tender evaluation. The press release for the day made it clear that a separate agreement would be required for the construction phase.
The Government have more than honoured the design agreement. They have gone beyond it and agreed to pay a share of the cost of a proving run at the small integrated plant at the coal research establishment last year and a further run this spring. I recognise and understand the hon. Gentleman's impatience, but the proving runs take time. They are necessary if we are to put the project on a firmer footing and make participation in the construction phase more attractive for the private sector.
The project is moving forward. The commercial discipline and technical experience of the prospective partners are making a valuable contribution that can only strengthen the project. The doubts raised by Labour Members will serve only to set it back. The construction of the pilot plant is a matter for the sponsor steering committee. I expect timing to become clearer towards the summer.
The Department has told the board of its broad views on the terms of an agreement to support construction and we await the board's reply. The background to the decision to limit our contribution to £5 million was fully explained to the House on 22 May 1981. The only change since then is that the price of oil has fallen significantly.
The hon. Member for Midlothian referred, legitimately, to the chairmanship of the NCB. Sir Derek Ezra has worked for the NCB since 1947. He has been a board member since 1965. He was appointed chairman in 1971. I hope that there will be other opportunities for us all to wish Sir Derek well before he retires. However, this is an appropriate occasion to congratulate Sir Derek on his period of chairmanship of the NCB and to acknowledge 460 our appreciation of the work that he has done for the industry. That is something that I am sure we all wish to see placed on the record.
§ Mr. Ogden
I am sure that the entire House will wish to join in the tribute that the hon. Gentleman has paid to the chairman of the Coal Board. There is a great deal more fire and work left in Sir Derek and we are not saying goodbye to him entirely. However, the uncertainty about who the new chairman will be is causing difficulty. We know who the president of the National Union of Mineworkers will be. We know for a little while who the Government will be. It is not unusual in industry for a chairman designate to be appointed.
§ Mr. Ogden
We always say in the NUM that everything comes to him who waits.
It is not unusual in an industry, nationalised or otherwise, for a chairman to know that he will retire on a particular date and for his successor to be known in advance of that date. The sooner these dates can be provided and the new chairman brought in, the better it will be for the industry.
§ Mr. Moore
I never thought that I would call the hon. Member for Bolsover in aid. The SDP squares every circle, does it not? Not only do hon. Gentlemen demand an answer, but they tell me that everything comes to him who waits. That is a perfect answer. We are in the process of finding a successor to Sir Derek and it would not be appropriate for me to comment further at this stage.
§ Mr. Haynes
The Minister ducked the issue of Belvoir and he is now ducking the issue of the chairman of the National Coal Board. Given the feeling in the industry, and that people want to know who it will be, the Minister should at least give us some guidance. May I at least have an assurance that one will not be imported? If that happens, the Department will be in real trouble.
§ Mr. Moore
I was most unwise to draw attention to the flattering remarks made about me by the hon. Member for Ashfield. I know that he would want me to dissociate myself from any press comments that would seem to suggest that I, an erstwhile merchant banker, might even be considered for such a post. We are in no way seeking to duck the issue. We recognise both issues. I have said all that I am going to say on the subject of the Belvoir area and on Sir Derek Ezra's successor. We congratulate Sir Derek Ezra on the long service that he has given to the industry.
The Bill provides a financial framework for the whole of the coal industry. The Government and the House, as well as those in the mining industry, wish it well, as does the country, because—as many hon. Members have said—it will benefit from a successful coal industry. In that spirit, I commend the Bill to the House.
§ Question put and agreed to.
§ Bill accordingly read the Third time and passed.