§ Question again proposed.
§ Mr. Lofthouse
We cannot measure the cost of pit closures in money alone. If a pit is closed, it means the loss of a way of life for mining communities.
Apart from social costs, pit closures leave behind other scars. If the coal board closes a pit, it leaves behind the dereliction that has gone on for many years for someone else to try to correct. Slag heaps have not been properly thought about for many years. People must put up with being thrown out of work. I concede that the present compensation arrangements appear to be attractive. It is understandable that so far men have been glad to accept: compensation without "kicking over the traces".
Although the Government and the coal board easily got away with closing pits when men accepted it, there is now a completely different ball game. This week, the coal 759 board is contemplating compulsory redundancies, and I hope that the Minister will respond to that point. I believe that in two years, we shall be debating a similar Bill to give the coal board further borrowing powers. My worry is that that will cushion the blow to men under 50 years of age. We are contemplating taking away the livelihoods of men of 50—and it appears that the age will be reduced—and saying that they are no longer needed. I foresee the problem simmering in the middle east creating a similar position to that experienced in the 1970s.
At the weekend, I went through my archives and found a headline in the Daily Herald of 3 October 1947 which read:Two-Ways Plan for Extra Coal Every day or Saturdays.The nation was appealing to the miners to work overtime to pull it out of the mess caused by the shortage of energy supplies. The hon. Member for Bedfordshire, North (Mr. Skeet) may believe that that is a joke as he sits back waiting for his knighthood, about which we heard something last weekend. Those lads, who had not long left school, but who had responded to the nation's challenge at that time, are now being told that they are no longer needed.
The longer-term policy has not yet been spelt out. If we need coal to be mined after we have closed the pits, will we run to the miners again and ask them to work throughout the week, Saturdays and Sundays included, to pull us out of our energy troubles? I know that the miners would always respond, but there is a point at which butchery turns to the breaking of bones. The limit has been reached in the mining industry. The Government can no longer insist that if a balance sheet looks black, everything will be all right after the pit has been closed and that that which is left behind does not matter.
When I intervened earlier in the debate I was not being humorous or cheap when I talked about the supplies of energy that are piled up in Britain. We have stockpiled about 60 million tonnes of coal, yet we all know that old-age pensioners will die from hypothermia this winter. That is inhuman. What sort of a nation are we when we allow vast stocks of fuel wealth to accumulate in the knowledge that many of our old people will die from cold? We know also that thousands of tonnes of the stockpiled coal will deteriorate. The Government should be telling the coal board to release some of the fuel to safeguard our old people this winter.
In recent years the coal board has not paid sufficient attention to alternative markets, to liquefaction and to the gasification of coal. Not enough time has been spent on securing markets. The board has spent all its time and energy considering how it can run down the industry to a level at which it becomes a commercial exercise. Coal mining can never be purely a commercial exercise. That is impossible.
§ Mr. Lofthouse
Do Conservative Members realise what makes a pit economic or uneconomic? A pit can be made uneconomic in a few weeks if that is desired. If the coal board decides that it wants to shut a pit, it will have no problem doing so. One answer is to stop sending down 760 a new conveyor belt for a week or two and to let the old belt start to break. Production will stop. It is the easiest thing in the world. What I call the black fields—
§ Mr. Alec Woodall (Hemsworth)
We can bring the analogy up to date. The marvellous, brand new super-pit at Selby will never be economic as long as it produces water instead of coal.
§ Mr. Lofthouse
If that pit continues to produce water, that will be so. We sincerely hope that it will soon produce coal.
The north Yorkshire area is blessed with the Selby coalfield, for which we have great hopes. That pit will employ 4,000 men and produce about 10 million tonnes of coal. The north Yorkshire coalfield is currently producing about the same amount, but it employs about 16,000 men. If the present north Yorkshire capacity is to be replaced by the Selby coalfield, what will happen to my 12,000 men? Shall we tell men below the age of 50 that there is no more work for them? Many Conservative Members have privileged backgrounds. I wonder whether they really understand — especially the younger men among them—the social consequences of telling people at the age of 50 that there is no work for them. Those men have spent a lifetime slogging their guts out in the bowels of the earth, and they have been prepared to do so in order to provide their familes with a less than reasonable standard of living.
The bag of gold will not last long, and there is more to life than gold. Minds must be occupied. Many miners have never been trained for anything else. They have not had time for recreation or hobbies. After eight hours down the mine, they have been too tired to do anything else. They will not be ready to cope with so much time on their hands.
I understand that there is pressure from the three mining trade unions for further talks with the coal board and the Government early in the new year. The sooner the better. The uncertainties should be brought into the open. The policies that the three mining trade unions will put to the coal board and the Government are the right ones. After the rumours of savage pit closures involving 70,000 men —whatever the figure, we have heard it in the past two years — it is time that the Government and the coal board came clean with the unions and told them clearly how they envisage the size of the industry, how many jobs will be lost and what will happen to those who lose their jobs. It is easy for us here, with our salaries, to make policy, to dictate and to tell people in their forties that they will not work any more. That is not right, as Conservative Members must know. Our energies must go towards finding a way to maintain the jobs of the lads in the mining industry.
§ Mr. William O'Brien (Normanton)
I am glad to have an opportunity to speak on Third Reading. I sat through the Second Reading debate on 15 November hoping to speak, because, when I was elected on 9 June, I was employed in the mining industry. I was a member of the National Union of Mineworkers. Conservative Members freely admit that they have no experience of the mining industry. They have no experience of mining communities, because they represent the stockbroker belt. I have been involved with mining all my life. I have studied 761 the hazards to ensure that safety regulations are adhered to, and I feel that I can make a constructive contribution to the debate.
One must support the Bill because of its provisions. However, I support the opinion expressed by other hon. Members that it does not go far enough to support the industry. Not many hon. Members come from the pits, but those who do have expressed anxiety about the fact that the Bill's provisions are only short term. We must have long-term planning if we want an industry that will meet our energy requirements. A great deal has been said by hon. Gentlemen about overproduction. They say that we should reduce production to meet demand. We have explained how we would dispose of some of the surplus stocks.
In my constituency a great deal of anxiety is being expressed about the increase in open-cast mining. We have talked about the environment, but there is no greater blight on the environment than open-cast workings. We could reduce output without harming the industry. It has been said that if a mine is closed and shafts are sealed, energy is lost for all time. If an open-cast mine is not worked, it can be resumed when demand increases. We could reduce output by 10 million tonnes by reducing the amount of coal produced by open-cast mining. I ask the Minister to take that on board, because if a census is taken in an area where open-cast mining is proposed, he will find that 100 per cent. of the population will object to the proposals. By reducing the amount of open-cast mining we do not harm communities and we help maintain employment in deep mines.
There has been a great deal said about the need to reduce manpower. At the pit in which I worked before I came into the House, manpower was reduced from 1,800 to less than 500 within two decades, because the seams were exhausted. The men left the pits and found jobs in other industries because they were disappointed about the way in which they had been treated and the way in which the colliery had been butchered. I fear that the present chairman's proposals to deal with pit closures will have similar repercussions.
I hope that we shall enjoy a spirit of comradeship from the new chairman when people are being made redundant. I asked in a previous debate whether the Secretary of State would assure us that people under the age of 50 will not be made redundant compulsorily. That assurance was not forthcoming. Like my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) I fear that young men who have developed a skill that no other industry can use will find themselves without work. I hope that we shall not fail to take advantage of that skill but will use it for the benefit of the nation.
I hope that the Minister will assure us that there will be no compulsory redundancies. Unless we have some information and the chairman of the NCB is given a directive, he might act in the same way as Cromwell, and destroy mining communities.
As my hon. Friend the Member for Pontefract and Castleford said, it is easy to make a pit uneconomic. I kow that from experience of the colliery where I have worked all my life. We can produce as much coal as any other pit in the country but we cannot get it out because we are starved of the capital necessary to improve the shaft. We work from a shaft that was sunk in the 19th century. No money has been spent on it to make it larger or more viable. We can produce the coal at the face as well as 762 Selby or any other colliery but we cannot clear it out. If such pits were not starved of capital, they would become economic overnight.
When Conservative Members talk of high and low-cost pits they are really talking of investment. Money has been spent on the low-cost pits and none has been spent on the high-cost ones. The record should be put straight. It is easy to make pits uneconomic. Before embarking on a programme of pit closure there should be a full inquiry to discover why some pits are uneconomic. I can say with my hand on my heart that 99 per cent. of the time they are uneconomic only because they have been starved of capital.
We have heard much of Selby and how it is to be the jewel in the NCB's crown because coal will be produced there in greater volume and by fewer men. I am sorry to tell the House that one of my constituents who worked at Selby had a fatal injury last week because of the high-powered machinery, not because of a fall of ground or a collapse at the coal face. That machinery is used in confined spaces. If that is to be the price of reducing the number of men employed to produce the coal, we should think again. If employing a few extra men in the pits in Selby means that lives can be saved, let us do that. The price is too high if we do not. We should review manpower in some of the pits, starting at Selby.
When the Prime Minister was questioned about the increase in gas prices, we were told that because the reserves of gas will soon peter out and there will not be many reserves in the near future, the price will reflect that situation. Therefore, people will be driven away from using gas. We could talk about nuclear energy as an alternative, but the only real and safe alternative is coal. We plead for the development of the coalfields. We could take every ounce of workable coal out of every pit. Once pits are closed, that is the end of it. I plead, together with my hon. Friends, with the Government to ensure that every ounce of workable coal is worked. If people want to talk about the economics, let us start at the beginning and look at where the capital has been invested.
When a pit is closed there are not only psychological consequences for those employed in the industry and their families, but further ripple effects. Young men will be made redundant unless something is done, and there will be no hope of further jobs in mining communities. In October I attended the retired miners' annual tea and social in Rothwell, which is part of my constituency. Rothwell colliery closed last week. The 300 old people who attended that social function were told that that would be the last occasion when they would have a get-together. Therefore, there are many social consequences on community life after a colliery closes. Provision should be made to buttress people against such anti-social measures. That should be considered.
Many people could benefit from the coal that is stocked at the pit head. We should allow them to obtain fuel, or allow fuel to be delivered to them from the stocks. Any hon. Member representing a mining constituency will be familiar with this. In my constituency many widows of mineworkers should receive concessionary fuel, but because some were on the wrong side of the line when their husbands died or left the pit, they do not receive it. If they could obtain that fuel, those unfortunate people could have much more comfort this winter. There is no doubt that if we start to distribute some of the coal stocks to those who 763 need extra warmth this winter, it would not make much of a dent in the stocks, because those people realise the value of coal and would use it economically in their homes.
If we are to consider the Bill properly and in good faith, the points that have been made by my hon. Friends tonight must be considered by the Government.
I have seen privatisation in the coal industry, and it was surprising how the materials and equipment flowed to the private contractors to enable them to continue working, while those employed by the National Coal Board were denied equipment and materials. Heaven forbid that privatisation should be extended. We have enough of it in the National Health Service; we do not need it in the mining industry. The Government should reconsider any proposals to privatise the industry, because it would destroy the coal-producing areas now owned by the coal board.
I hope, too, that the chairman of the coal board will honour some of the promises that he made, including the promise that men made redundant at one pit will be allowed to transfer to another. If the Secretary of State takes on board some of the points made by those who have been at the front end of the industry — those who represent miners and mining communities—it will be in the best interests of the industry and of the nation. I hope that the Secretary of State will give serious consideration to some ideas, and that they will be implemented in the near future.
§ Mr. Dennis Skinner (Bolsover)
I appreciate the fact that the Opposition might wish to keep the debate on this Bill going until 2 o'clock in the morning, which would provide us with the ideal opportunity to stop the Government's business tomorrow, but I believe that Mr. Speaker will accept the closure of the Third Reading debate before then.
§ Mr. Skinner
I was just testing the water. I do not know whether my hon. Friends can keep this debate going, but the Town and Country Planning Bill, which will come next, could continue for a while.
I am pleased about the fact that many hon. Members have spoken in the debate, which shows that there is much concern in the mining industry at present. One feature of the debate is that not every hon. Member who has spoken represents National Union of Mineworkers' interests. Certainly, one hon. Member represented the deputies' union, and my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) comes from a side of the industry that is close to management, although he is not a member of management. It is significant that some conciliation is beginning to develop among the NUM, the National Association of Colliery Overmen, Deputies and Shotfirers and the British Association of Colliery Managers. That is a welcome sign of strength, which should suggest to the Minister that he is not just dealing with the NUM now.
When pits were closed in the past, especially in the 1950s and 1960s, it was relatively easy to shift people from one region to another. Now, as exemplified by the Herrington closure announced this week, we are talking of people under 50 with no job at all. Not only will people 764 working down the pits and on the pit top be without jobs, but managers, under-managers and many others associated with the higher echelons of management now realise that they cannot be transferred as part of a management development team. Very few management jobs are left, and as a result BACM, the management union, is now allied much more closely with the battle to save the pits.
We have had a series of speeches from Labour Members with an interest in the mining industry —including my hon. Friend the Member for Midlothian (Mr. Eadie), who is secretary of the miners' group of Labour Members—informing the Government that although the coal board needs this money, it is chicken feed compared with the problems faced by the industry.
As my hon. Friend the Member for Rother Valley (Mr. Barron) pointed out, in 1982 the industry had £366 million in interest charges hung around its neck before a tonne of coal was dug. It will be more this year, simply because interest rates have not fallen at the same pace as inflation. The gap between 5 per cent. and 9 per cent. still exists, but in some cases money is borrowed at 10, 11 or 12 per cent. As a result, the interest charges on the coal board this year will be greater than in 1982.
Each time the Government talk about "Plan for Coal", a figure of £7,000 million rolls off their tongue. That should be set against the massive amount that must be repaid each year and which was not envisaged at the time of "Plan for Coal". It must also be examined against another form of investment. Since they came to power, the Government have invested £12,000 million abroad rather than invest in the pits to which my hon. Friends have referred. It seems that the figure could be even higher as a result of the lifting of exchange controls.
We are not talking about handing out money to the NCB, the NUM or anyone else. This borrowing powers Bill is all about putting further debts around the coal board's neck. It will mean at least £3 on every tonne of coal produced from the pits that still exist. Each pit will have to pay back £2 million in debt to begin with, despite what we have heard from the Institute of Directors' and estate agents' spokesmen on the Conservative Benches. Remarkably, during the last hour there have been seven or eight speeches by Labour Members but none by Conservative Members—
§ Mr. Skinner
All I know is that the Coal Board is expected to pay interest charges of £2 million per pit—a load that is too big to carry.
The Minister should do what Governments have done previously for other industries. He should write off a large part of that debt this year. He will not solve the problem without taking off about £1,000 million. The Government do not have to set any precedent, because not only public sector but private sector industries have been bailed out time and again. I think, for example, of Slater Walker. The Secretary of State, as he now is, was not still in command of Slater Walker when it went under. However, a Labour Government had to bail it out.
Tonight we are talking not about unit trusts, but about the lives of miners and about those who have been in the industry for 30 or 40 years and who now have no prospect of a job. We are talking about whole communities being shattered. The social consequences of the 1950s and 1960s 765 are even now littered around us. Once miners were industrial gipsies, travelling from Durham to Nottingham, and so on. But now there are no jobs. Not long ago, 400 young lads went to a colliery in my constituency looking for jobs. Only 20 of them found jobs, as a result of the policy to close pits. Everybody who is thrown out of work represents a cost of £5,000 to £7,000 per annum on the Exchequer. Therefore, the policy is economic lunacy. The Government want a massive dole queue so that they can put the fear of death into those who still have jobs. They are introducing a wages policy through fear.
The Government should write off most of that debt. They should pick up the coal industry, just as they picked up Slater Walker and Keyser Ullman. The right hon. Member for Taunton (Mr. du Cann) knows all about that latter company, because he was chairman for some time. In the 1970s all sorts of industries were helped, yet that Institute of Directors fellow, the hon. Member for Tatton (Mr. Hamilton), talks about putting too much money into the industry. What about the Falklands? We are told that 400 families in the Falklands will need £3 billion, yet we are talking about 400 families at one pit and about whole villages losing their identities and being cast aside. We are not asking for £3 billion. A £1,000 million write-off would do for a start.
I saw some figures the other day for Northern Ireland. I do not deny that there is a problem. The figures are authentic, and the Government know them. In the 13 to 14 years since the troops went in, it has cost £10,000 million to keep the Northern Ireland economy running at about 70 per cent., with unemployment in some places, such as Strabane, as high as 50 per cent. Miners' families will want to know about that. If the Government can find £10,000 million in 13 years for just over 1 million people, it is time that they gave more consideration to the regions and peripheral areas, which by and large — with the exception of areas such as Nottingham—represent most of the coalfields. It has been said that the whole of Scotland is being closed down. That is one of the Common Market's plans. It wants to make closures in the peripheral areas.
Mr. MacGregor would be quite happy to carry out that plan. He knows all about leaving casualties behind. He did it at Amax. We heard all the talk about this great whiz kid MacGregor, doing a job in America. But in 1982 that so-called booming concern was left with debts of $292 million. That is the legacy of Mr. MacGregor, the so-called whiz kid, and that is his plan for the coal industry, just as it was for the steel industry.
§ Mr. Skinner
That is how he was described. As my hon. Friend knows only too well, when Mr. MacGregor was brought to Britain, he was supposed to galvanise everything that he touched. It cost £50,000 for him to visit Bilston Glen colliery in Scotland. Everything had to be made spick and span. It was a whitewash job. The cage that he went down in was painted, but the other one was not. About 100 items had to be examined to see that they were in order. He was treated like royalty. A whole shift was kept waiting for one and a quarter hours. They lost all that work and nothing was said. Yet, at Monkton hall when the workers were late by five minutes, they were locked out for weeks.
766 Who are the Tories to talk about losing money when MacGregor can be involved in a loss of that kind? It is the 1960s all over again. I was going to refer to that, but it has been dealt with adequately.
The Liberal spokesman, the hon. Member for Orkney and Shetland (Mr. Wallace), tried his best to say that we have support from Orkney and Shetland. I hope that he does not think for a minute that he is speaking for the alliance, because its members do not agree with the Liberals about phasing out nuclear power. They believe in the exact opposite. In the 1960s, when my hon. Friends were battling to save the industry from predators such as Lord Marsh and others who wanted to shut the mining industry down, the Liberal spokesman said, "We don't want any pits to be kept open. We should close them all."
§ Mr. Skinner
I worked in the coal industry from 1949 to 1970 and I can speak only from experience. In the years up to 1964 in the area south of Clay Cross, 24 pits were shut by Tory Governments. I do not relieve Labour Governments of blame, but between 1964 and 1969 when the stocks became low, people appreciated that the policy was all wrong, the oil lobby was beginning to fade from the scene and only seven pits in the Derbyshire coalfield were shut. Those are the figures from Derbyshire, which can be examined. I believe that the same is true for Lancashire and one or two other coalfields.
I know that the hon. Member for Bury, North (Mr. Burt) is only a whippersnapper of a kid, but he should know that from 1964 the Tory Government were in power. That is when 20 or more pits in Derbyshire were closed. The pattern was the same, by and large, throughout the coalfields. My hon. Friends will come to the same conclusion. The Labour Government had to be told at the historic meeting in Central hall across the road when Will Paynter put it on the line. As a result, the Labour Government realised that they had to change their policy. The coal stocks had been reduced to a low level and from then on few pits were shut, and then only because they were exhausted.
The real problem is not just the pits. The coal mining industry and associated industries such as steel, railways and textiles are interdependent. The Government must be prepared to boost the economy. I am not asking them to change course. I could ask them, but that is not the point that I am trying to get across. A 10 per cent. increase in manufacturing production in the next 12 months would mean that seven or a dozen pits would not have to be closed because their coal would be needed. That interdependence is causing tremendous hardship.
Employment in the steel industry has been halved, with 105,000 redundancies in four years. About 20,000 railway jobs have gone, metal production is down by 10 per cent., textile production is down by the same percentage and hardly any public sector housing is being built. All that, with pit closures, is part of what I call the "Thatcher revenge". That applied after 1972 and 1974, but, from the 767 Prime Minister's personal point of view, from February 1981 when she had to send the Secretary of State at the time, the right hon. Member for Guildford (Mr. Howell) —she sacked him later—to the Dispatch Box to say that they were changing the policy of pit closures and of imports and exports. But it was always temporary—it was only for a short period. Now we are seeing the revenge.
The Government have had a good deal of media assistance in the process. We all understand that. I think that when the Government talk about pit closures we should tell the Minister from the Floor of the House that it is time he told Mr. MacGregor to have a method study in Hobart house. Let us have one there. Never mind about efficiency in the pits—productivity has increased by 14 per cent. during the past four years while manufacturing production has fallen by about 16 per cent. during the same period—let us have a method study in the office of the Secretary of State for Energy. Let us see how many seconds it takes to walk from the desk to the gin and tonic cocktail cabinet.
My hon. Friends have described the conditions for miners in the pits. It is no laughing matter. There is a world of difference between the way Mr. MacGregor, Ministers, hon. Members and those who pontificate about the future of the mining industry lead their lives and the way that those who go down to the bowels of the earth or work at the pit top screening coal and so on lead their lives. Wages in the industry have already fallen to twentieth position in the league table. Underground miners need £30 a week to catch up. The low paid have had a cut in wages of £16 during the past four years. That is all part of the pit closure programme, the unemployment programme and the economic policy of the Government.
I have had a look at the shift premium payments. In the eight years since 1974 and "Plan for Coal", for all workers they have gone up from £1.40 to £21.50. For miners they have gone up from £1.40 to £4.20. That cannot go on forever. As I said to the Minister before and to the Prime Minister earlier, why cannot the Government treat the mining industry as they treat the oil industry? Everyone knows that it makes sense to get as much oil out of the North sea as possible, even if it is only small pools. It makes sense to get it. What do the Government do? They say to the oil companies, "We know that it will be terribly uneconomic to do it, so we shall give you tax relief to help you get at those little pools when the big ponds have gone." We are not complaining about that. It makes sense to get all that energy.
Why do the Government not do the same with the marginal pits? It is hypocrisy for the Government to allow it for the oil companies but not for those mines that are becoming relatively uneconomic for a period. As my hon. Friends have said over and over again during the debate, one cannot find a pit that is uneconomic for more than about three years. They are few and far between. Which uneconomic pits does one pick off? I remember that Westthorpe pit was to be closed because of high ash content. Then, suddenly, two years later, stocks of coal fell, and Westthorpe produced high ash coal and it was mixed with something else. It has been kept open ever since. But now, closure is back on the agenda. Why is Westthorpe to close? High ash content again.
768 The Government can close a pit by any method they like. They can ensure that it has more water than it should. They can ensure that the gas intake is greater than it should be. They can ensure that they send in machinery that does not work and sometimes they will send in experimental machinery which causes the pit's losses to be even greater. They try all those schemes. At the end they say, "We want to close the pits because the miners are working in terrible conditions and we feel sorry for them". That, too, is hypocrisy.
The Government may disregard all our attempts but oil production will hit its peak in 1986 and then begin to taper off, notwithstanding all those pools that will be found because of the tax relief—the marginal oilfields. If that is the case and if we are scared stiff about nuclear development — God knows, a great many people are scared stiff about what is happening with nuclear power—is it not sensible for us now to change the policy and ensure that we produce all the coal possible? That means a write-off of debts and a subsidy for British coal on a par with our western European neighbours.
Opposition Members come from the real world—not the world of the Institute of Directors or the world that makes money out of someone else's ribs day in and day out. The mining industry is an honest industry. Opposition Members know that with a majority of 144 against us, we cannot change matters by marching into the Lobbies. But the miners are aware of that fact also, which is why the overtime ban is solid throughout the coalfields. The miners appreciate now that they must fight back.
I accept that last year was not the greatest year for miners' solidarity, but that is now changing. We report back to our coalfield areas every week, and we know that the overtime ban is solid. Indeed, it is being suggested that it will last for ever. Our power is out in the coalfields. as it was in 1967. When it shows itself, we will ensure that we win.
It is time that the Government viewed the mining industry from a different angle. They must recognise the need to get the coal from the ground, as they recognise the need to subsidise agriculture up to the hilt. If they can find £20,000 subsidy for every farmer because they want to maximise food production, why can they not do that for coal? They must change their policy so that Britain can compete with western European countries.
We currently produce the cheapest deep-mined coal in Europe, at £38 per tonne. If the Government follow Opposition suggestions, the mining industry will be on its way to the 200 million tonnes that the country will eventually need.
§ Mr. Allen McKay (Barnsley, West and Penistone)
It is an honour to follow my hon. Friend the Member for Bolsover (Mr. Skinner), because he puts his finger on the truth every time that he makes a point.
I am sorry that the hon. Member for Bedfordshire, North (Mr. Skeet) is not in his place. He said that the coal industry tried to isolate itself from the economy. It has never done that because it has always been the economy. Those hon. Members who want the coal industry to return to market forces were not saying that during the Robens era, when he patted miners on the head and said, "Go back to work for sixpence." At that time the coal industry could have sold its coal for almost any price, but it did not do so. It had consideration for other industries and the 769 economy of Britain. If it had not done that, it would now have money from the sale of that coal for investment. But the industry, which has always been loyal to Britain, decided that the economy and the country came first.
My hon. Friend the Member for Bolsover referred to pit closures. The industry has always had a closure plan, which has worked well. Trouble begins only when there is interference with that plan. The Prime Minister had to back-pedal on the list of colliery closures—she did so within two days because she realised the trouble that would be caused.
The coal industry is a magnificent conglomerate of miners and mining engineers. The Government are trying to take what they call the worst parts of the industry and cut them off. In fact, the worst parts could be the best parts in perhaps 12 months' time, and the good parts could be the worst parts at that time. How far does one keep cutting? It is all very well to say that as soon as a pit becomes uneconomic it should be closed, but that is what the Government have been doing all along with the industry in general: if it makes a profit, sell it; if it does not make a profit, close it. I was glad to hear the Minister say that he was not thinking of the privatisation of the coal industry in the foreseeable future, but I should like to know what he regards as the foreseeable future, because that has been said before.
The Prime Minister has said in answering parliamentary questions that the Government are looking only at ancillary parts of the industry. Again, what do they regard as ancillary parts? Does the Minister think that the central engineering workshops are an ancillary part? Is it that part that serves the mining industry as an engineering works that he has it in mind to privatise? If so, it would be ironic because the hydraulic shops have been set up by money from the NCB and the research and development on those hydraulic supports was paid for by the NCB. Private industry has been able to create a hydraulics industry—not only for mining but for other purposes — out of money from the NCB. Therefore, we have turned full circle; the NCB pays for the research and development and helps with the development of the establishment, and we finish up selling the workshops back to the firm that has been helped by money from the NCB to make more money out of the NCB, repairing the hydraulic supports that the NCB virtually gave it in the first place.
Closures are easy to discuss, but the social consequences, which some people seem to think do not exist, are very severe indeed. I have witnessed 10 collieries close in my constituency and seen the effects of those closures in human terms. Families have had to move out, and as the closure programme has gone on, people have had to move further away. Apart from the social consequences locally, one must bear in mind the effects on the children of mining families, who are moved in the middle of their education.
Two more collieries have recently closed in my area. Elsecar, where I spent most of my working life, finished this year after a successful run; one could not find a better pit in which to work. Rockingham colliery finished last year. Those two pits were closed due to exhaustion and there were no problems; the men who worked in them realised that those pits had come to the end of their useful life.
There are the other effects of closures, on local authorities and rates and on local shops. The street corner shops in my area have gone because there is no money to 770 sustain them. Then there are the industries that make the steel and supports, the mining conveyors and other machinery, for the industry, which is one of the CEGB's biggest customers. All of those depend on a viable mining industry.
§ Mrs. Currie
Is the hon. Gentleman aware that there are consequences that he thinks stem from colliery closures that do not have to happen at all? For example, my constituency, which once returned George Brown to Parliament with a majority of 16,000, substantially on the votes of miners, has since returned three Conservative Members and is an area in which most of the mines were closed by the Labour Government in the 1960s, in which the unemployment rate is half the national average and in which owner-occupation is 67 per cent. and rising.
§ Mr. McKay
The hon. Lady is talking about a district that has changed from an industrial to a dormitory area. I am simply saying that the only sensible time to close a pit is when there is nothing left in it. In closing pits, the Government are taking away not only existing jobs but jobs for future generations. That has happened during the time I have been involved in the coal industry, which goes back to 1945. The collieries have limped all that time. Collieries can alternatively be economic and uneconomic.
I know a colliery which I was sent to close — the people involved no longer work for the board, so it does not matter if I tell that story. There was no need to close the colliery. There was coal capacity at that colliery, and it is still operating successfully. The management at that time decided to take on employees and to find ways of keeping the pit open. Employees would have been dismissed because Hobart house wanted to close the colliery. We did not want it closed.
Many times, collieries have been closed on paper because it appeared that they would run out of coal. However, frequently they have remained in operation as successful collieries. Where do we draw the line when we say that a colliery is unsuccessful or uneconomic? Recently, the Minister visited the Barnsley area of the National Coal Board. If he had visited that area about 10 or 12 years ago, he would have found a very different place. Under the Government's policies there probably would not have been a Barnsley area of the Coal Board. It is now a successful area because of investment, the work that has been put in and the love for the area felt by those who live there. The pits in the Barnsley area could have been closed 12 years ago because the area was recognised as an old mining area with shallow coal seams.
There is no doubt that once again the industry has reached a critical point in its history. The recession has been caused by Government policies, factory closures, unemployment and cuts in energy demands that reached 12 per cent. during the past four years. All those factors have taken their toll. Cheap coal is sloshing about throughout Europe. That is what happens when some people say it is time that the coal industry looked at the market. It is not because the industry is not successful, but because the Government like nationalisation. That factor, as well as the Goverment's thinking when they appointed Mr. MacGregor as the Coal. Board chairman has fuelled the industry's fears.
My hon. Friend the Member for Bolsover mentioned the co-operation of the three main unions—the British Association of Colliery Managers, the National 771 Association of Colliery Overmen, Deputies and Shotfirers and the National Union of Mineworkers. That is not before time, because it is something that the Labour party put forward about four years ago. Why was Ian MacGregor appointed? There are more successful and better people within the coal industry who can manage its affairs. In fact, management in the coal industry came from the shop floor. The Government are trying to appoint someone who has not come from the shop floor and who does not have the feeling for the industry that the management has. Therefore, the Government are cutting straight across the middle management and BACM is worried about that matter. It is time that there was a tripartite meeting, and I should like the Minister to say a few words on what will happen. It is time also that "Plan for Coal" was recognised as being of strategic importance, as the industry seeks to over-ride short-term economic considerations. Can the boiler fuel scheme be extended to include local government offices, schools and such facilities? What has happened to the CHP schemes? In Yorkshire, there are some such schemes on the drawing board ready to be put into operation. I believe that there has been no mention of the problems that will result from the operation of the subsidence legislation. Where will the money come from? What will happen when the local authorities and the Coal Board get together to move the spoil heaps? I see nothing in the Bill to undertake those measures, and I should like the Minister to answer those questions.
§ Mr. Alec Woodall (Hemsworth)
Nothing that I heard on Second Reading, in Committee or today has caused me to change my mind one iota about the Bill. On second Reading I said that the Bill is nothing more or less than a Government vehicle to hasten colliery closures. That is the intention behind it. The evidence is provided in clauses 1 and 4. I have heard the speeches that have been made by Conservative Members on Second Reading, in Committee and today on Report, and they have not caused me to change my mind. Where is the stockbroker mafia that was present until about an hour and a half ago? Its members made their interventions and then left. During the debate they bared their breasts—
§ Mr. Woodall
I shall withdraw my last remark, Mr. Deputy Speaker, as the hon. Member for Derbyshire, South (Mrs. Currie) is present. If I do not, I might be accused of trying to turn the Chamber into a striptease joint.
Conservative Members declared the confidence of the Government in the coal mining industry, which, they claimed, was borne out by the Bill, but nothing could be further from the truth. The Bill will serve only to hasten the colliery closure programme. The Government will work hand in hand with MacGregor to bring that about.
The Government have talked about the massive increase in the amount of money that they are prepared to allow the coal board to borrow. The necessary provisions are set out in clause 1. My hon. Friend the Member for Midlothian (Mr. Eadie) has spelt out the burden of interest charges in day-to-day terms. Every miner will have to earn £35 every week to pay off the interest charges before he 772 is able to earn a halfpenny for himself. My hon. Friend's example spelt out the burden more clearly than anything else.
The Government are saying that the coal board can borrow money to preserve the future of the industry and to develop "new capacity". In 1946 it was vital that we nationalised the mines. We had to do so. There was token resistance from the then Tory Opposition. They knew that nationalisation was the only salvation for the industry and the country. During the debates that followed, it was argued from the Labour Benches that one of the reasons for the need to nationalise was the actions of the coal owners in raping the industry. They got out every piece of coal that was easy and cheap to get. They produced cheap coal and sold it seven or eight times.
I remember working for the old coal owners. When we asked for a wage increase, they would produce the books. They allowed us to study them, and they would say, "That is what it costs to produce a ton of coal. There are your wages. You can see that there is nothing left for us." They had seven or eight other sets of books in the town, and they sold the coal to themselves seven or eight times before it ended up with the consumer. That is how they made their profits.
§ Mr. Woodall
Yes, and it was damned hard work. The managing director of the old colliery company for which I worked before nationalisation had started work at the company as the office boy at the age of 14. He put stamps on envelopes and ran errands, but he ended up as managing director. He died in 1946—he could not have died a minute sooner for me—and left a quarter of a million quid. That was by selling coal six or seven times over—coal that had been won by hard graft.
We are now being asked to return to the same method of winning cheap coal. The Government tell us that the answer is to develop "new capacity" to close down uneconomic capacity, and to hell with the social consequences.
The most obnoxious part of the Bill is clause 4. In addition to saddling the industry with massive interest charges, far greater than those which are currently being paid—my hon. Friend the Member for Midlothian has told us that for every pit £2 million was paid out in interest charges in 1982; and God only knows what we shall have to pay out in 1983, 1984 and 1985—the Government intend to increase by 400 per cent. the amount of money that they are prepared to make available to miners if they accept redundancy. They are just making the carrot bigger and more attractive, knowing that the men will take it. If we were in the pits now, and the same age, we would be grabbing. After a man has spent 40 or 45 years down the pit, he wants to get out. Much to our sorrow, and much to their sorrow — because they know that they are robbing their sons and grandsons of future jobs—the miners will take the carrot.
When a colliery is closed, it is gone for ever. In future generations there can only be new mines, which will cost a lot of money to sink. That happened in Yorkshire before 1979, with Kinsley drift, Royston drift and the Prince of Wales pit. Those were new drift mines sanctioned by the Labour Government under the "Plan for Coal". Not a single pit has been opened since then. "Plan for Coal" was framed by the Labour Government in 1974. Under that 773 plan the men had something tangible to work for. They had faith in the industry. What has happened to "Plan for Coal"? It has been torn up and thrown away. The Conservatives have a plan for less coal. All the emphasis in the report of the Monopolies and Mergers Commission is on new green field developments. The industry will be raped again, as it was by the former coal owners. New coal will be mined as cheaply as possible, and to hell with the communities.
The Government have not changed my mind. The Bill has been designed, hand in hand with the coal board, to speed up colliery closures. To hell with it. Let us throw it out and have something better in its place—something in which miners can have confidence.
My hon. Friend the Member for Bolsover (Mr. Skinner) mentioned solidarity. The miners are solid to a man on the overtime ban.
§ Mr. Woodall
They voted on it. A special delegates conference was held. Every branch was told that a special delegates conference was to be held and that they were to be asked to support an overtime ban. The result was overwhelming. All the men said "Right." They are solid to a man.
§ Mr. John Powley (Norwich, South)
If the hon. Gentleman is so confident, will he tell us why every miner was not given an individual say in whether he wanted an overtime ban?
§ Mr. Woodall
What the hell does the hon. Lady know about miners? She is not even a good chairman of a housing committee.
§ Mr. O'Brien
Every miner in the United Kingdom had the opportunity not just to vote but to have a say about the approach on the wages offer, pit closures and the overtime ban. When the meetings were held, votes were taken. I attended a branch meeting. I speak from experience.
§ Mr. Woodall
My hon. Friend knows what he is talking about. What Conservative Members know about coal miners and coal mining could be put in a peanut.
From the point of view of energy needs, the Bill is not worth the paper that it is printed on. The Government are concerned only with closing pits and running the industry down.
§ Mr. Lofthouse
Does my hon. Friend agree that if the miners want a ballot they will demand it? They need no advice from Conservative Members.
§ Mr. Woodall
My hon. Friend is perfectly right, and hon. Gentlemen know that. I have sworn once tonight and I had better not do so again, but hon. Gentlemen are playing silly devils. They know that the Bill will do nothing for mining. It will increase the weight of interest charges round the industry's neck and close pits that should be kept open for miners' sons and grandsons.
§ Mr. Frank Haynes (Ashfield)
I welcome the opportunity to participate in the debate. Although I do not 774 welcome the Bill, I will support it. It is plain that most right hon. and hon. Gentlemen do not have a clue about mining or the people involved in it. [Interruption.] I make a point and I receive only sneers. We have had filibustering from Conservative Members, which has prevented us from making speeches. They asked why everyone in the NUM did not have a vote. It is not allowed for in the rules. If the hon. Member for St. Albans (Mr. Lilley) understood the rules of the NUM, he would not have asked his questions. The NUM rules are specific about paper ballots. The NUM is respected throughout the world, not just in Great Britain, for the way it is run. It holds a paper ballot on whether strike action is to be taken and it does not take such action unless the majority want it. I do not know what the hon. Member for Norwich, South (Mr. Powley) is laughing about. I am being serious.
§ Mr. Haynes
I am not giving way. As my hon. Friend the Member for Normanton (Mr. O'Brien) said, miners are given the opportunity to vote. There has to be a special delegate conference, and following that, the message must be taken back to the branches, to tell them to hold meetings for everyone at the pit to attend and record their vote. It was stupid of the hon. Member for St. Albans to ask such a question.
§ Mr. Skinner
Does my hon. Friend agree that the miners who had the opportunity to attend those branch meetings, which were well attended according to all reports, could vote on the issue, unlike those Tory Members who discovered, when they read the papers one morning about four weeks ago, that there was a new chairman of the Tory party and that only the Prime Minister's vote had been cast?
§ Mr. Haynes
That is right. In Committee we have been discussing giving people the right to vote. How many people in the Conservative party had the right to vote on that issue? The hon. Member for Norwich, South does not like that. It hurts. It is undemocratic, and yet we are being told to be democratic. This is the only party in the House that understands democracy. My thoughts and recent contributions in the Chamber about mining have been confirmed. The Bill is not aimed solely at pit closures. The Government are aiming at the privatisation of the coal mining industry. Ministers deny that but the Government want uneconomic pits closed, as the private sector will only buy those which are making massive profits. Many are doing that.
My hon. Friend the Member for Bolsover (Mr. Skinner) might not be aware that I worked at a pit in his constituency for four months before nationalisation. I remember the suffering under the old mine owners. I welcomed nationalisation as the saviour of the industry and the people who worked in it. The hon. Member for Norwich, South is learning about the mining industry. He has not been out of nappies long. We got rid of our suffering because of a first-class Labour Government in 1945. Nationalisation was the only course open, because the mine owners had raped the industry and taken all of the cream. They left all the dirty stuff for the people who worked in the industry. The people worked like nobody's business to put the industry right, in the interests of the economy and not merely for themselves. They have played their part ever since.
775 Some pits in my constituency are breaking output records and have nearly 60 million tonnes on the surface. It is lying idle and the Government do not know what to do with it. Many of my hon. Friends have suggested what could be done with it. Even Tory Members get telephone calls from old people who cannot afford to keep warm. The Government could make a real effort to put that right. I have a better suggestion. We should close Hobart house. We would be better off as a result. Hon. Members should consider the savings. We could then ship MacGregor back to where he belongs and let the industry get on with its job. Hobart house is a burden on the industry and always has been. It makes no contribution to coal production. It is merely a burden on the industry's resources. The administrations in the areas where the work is done run the industry. If the Government want closures they should close Hobart house. That would be progress.
I remember when Lord Robens, as chairman of the NCB, tried to introduce a new automatic system of coal production. It was called Rolf. It would not work, but the men back at the pit were prepared to try it and wanted it to succeed. We have always been like that. I have spent about 30 years in the mining industry. Machines were thrown our way, so that they could be tried out and perfected with a view to increasing productivity. At the same time we were making a contribution to the nation and a little more money was put in the lads' pockets. They had to work hard. Nine times out of 10, they succeeded.
I remember the Rolf system coming into the Nottinghamshire area. It meant that nobody was on the coal face. Someone was at the gate to work the system on a switchboard. However, the machine kept digging into the floor. In the end it had to be withdrawn because it would not work, but the lads gave it a real try with a view to achieving progress in the mining industry.
I resent some of the comments by Tory Members during the debate. They seem to think, particularly the hon. Member for Bedfordshire, North (Mr. Skeet), that the lads do not try and that it is the lads' fault, and nobody else's. That is not so. The hon. Gentleman talked about water at Selby. There is plenty of water at Bedford, in the whacking great holes that need to be filled. They were caused by the London Brick company. They are unsightly, and can be seen from the train.
Some of my hon. Friends talked about pit tips, and the need for money to be spent on them. My local county council has played its part. I am sure that the hon. Member for Nottingham, South (Mr. Brandon-Bravo) will agree with me that the county council in Nottinghamshire, under both Tory and Labour administrations, has played its part in beautifying the pit tips. If the money is spent properly, they can be beautified. We could have a ski lift on top of them and people could go to them for a picnic on a Sunday afternoon in the nice weather. [Interruption.] Tory Members may laugh. I am being serious. That is what is happening. Tory Members do not know what is happening. They do not understand.
§ Mr. Haynes
What is the big joke? I am trying to be serious. It is a serious debate. The Bill and pit closures are serious matters. This is not a joke. This Bill means jobs in the mining industry.
776 In my constituency there used to be a pit called Kirkby, known as "summit" many years ago. It was promised a long life. Some £2 million was spent on a new washery plant, and six months later, the pit was closed, although it had many years of reserves. That is the sort of policy that the board has. The policy that the Government want the NCB to have is to close down the pits as fast as possible in the interests of privatisation. I am convinced that it is Government policy to sell off profitable pits and close unprofitable ones.
Some Opposition Members, and those in the mining industry, will fight that, as they are fighting now for a square deal. Conservative Members do not understand that the overtime ban has nothing to do with the wages offer. If the wages claim could be met, and the men could agree to the board's offer, the overtime ban would continue, because it is related to pit closures. Conservative Members assume that the ban relates to the 5.2 per cent. offered by the board. The national executive committee of the NUM wishes to return to the board to continue to negotiate an increase in the offer.
When the pit at Kirkby was closed, Nottinghamshire county council, which was Labour-controlled at the time but which the Conservatives later took over, introduced a system to encourage industries to take over the land on which the pit stood. The Conservative council said that it would meet private industry pound for pound. That is a good policy, but it cannot be continued, because the Government are clobbering the local authorities so hard that they cannot afford to do it. Those who are made redundant will have to join the dole queue, which will cost the state even more money.
This is a serious debate about British coal mining, and it relates also to jobs, to the economy and to people going on the dole because of the Government's policies. Yet Conservative Members have treated it like a joke, with much sniggering and sarcastic remarks. It is disgusting, and it shows clearly what Conservative Members think of the industry. The Opposition have made it clear that they will continue to fight. I support the miners in their present struggle, and will join them on the picket line, if necessary. They should have a square deal, but the Government are not giving them one. They are not giving the nation a square deal, because if they start to close as many pits as they wish, we shall soon have to import coal, as we did years ago, because we cannot produce it ourselves. I am prepared to toe the line and to fight that policy until the Government change their minds, or until the people throw them out so that we can have a decent policy for coal mining.
§ Mr. John Home Robertson (East Lothian)
I am grateful for the opportunity to speak briefly at the end of this debate on the coal industry. I have listened to most of the speeches from both sides of the Chamber, and I support what was said by my hon. Friends. They are right to be concerned about what is happening to coal mining.
Many of my constituents are miners, but there are no working pits now in East Lothian. The miners in my constituency are some of the industrial gipsies described by my hon. Friend the Member for Bolsover (Mr. Skinner). When the pits in East Lothian were closed, perhaps for good reasons, they had to move to other areas, especially to the constituency of my hon. Friend the Member for Midlothian (Mr. Eadie). Some of my 777 constituents now work at Monktonhall, which has been in the news a great deal in past weeks and months. Hon. Members will recall the dispute into which miners at that colliery were forced by the National Coal Board. At the beginning, 300 redundancies were declared without any consultation with the trade union concerned. The following day, when there was a pit head meeting to discuss those redundancies, the men were a few minutes late going down the pit and they were confronted by a lock-out. Earlier, development work at that colliery had been stopped—again without any consultation.
Not surprisingly, the men at Monktonhall decided to fight for their jobs and the future of their colliery. Sadly, in the strike in which they were involved, they were completely isolated, but they won the argument and have now gone back to work. They are completely united with other miners throughout the United Kingdom in the overtime ban that is now in effect. The miners united are a force that it is impossible for any Government to resist, and long may that continue.
The men at Monktonhall find that they are now on a hit list of threatened colliery closures—the hit list exists—because of the Government's failure to ensure that coal is put to good use. The Government have failed sensibly to manage the market for coal and other sources of energy. It can be argued that they are happy to sacrifice the future of an essential industry that we shall need in the future.
The situation in Scotland is relevant, because it could be faced by other areas in the United Kingdom. It shows how the Government have failed to cope with the opportunity that Scotland has presented. Last year, or the year before, the Government had a windfall of cheap energy. The power station at Peterhead had been constructed to burn oil, but also available, at least in the short term, were some extremely cheap gas concentrates from the North sea oilfields, which could be burned while the Mossmorran petrochemical plant was commissioned.
At about the same time, the Invergordon aluminium smelter faced a crisis. One might have thought that a responsible Government would have taken advantage of the cheap electricity from Peterhead, taken account of the need for cheap electricity at Invergordon and kept the aluminium industry going in Easter Ross. That would have been, and still could be, of enormous benefit to the people of Scotland, particularly to those employed at Invergordon. It would also have made constructive use of the cheap power from Peterhead.
However, it is too much to expect this Government to be constructive or sensible. They were content to allow the Invergordon smelter to close, although two years later there is a need for even greater aluminium capacity in the United Kingdom.
That buckshee power from Peterhead is cheaper than electricity generated from other sources in Scotland, at least in the short term, and is crowding out the electricity that could be provided by Cockenzie power station in my constituency. That is directly related to the crisis at Monktonhall colliery. Since Cockenzie has been crowded out by the short-term availability of cheap electricity from Peterhead, the coal from Monktonhall has not been burnt there. Therefore, there is a massive stockpile of coal at the pithead and at Cockenzie power station. That has exacerbated the existing overcapacity in electricity generation in Scotland. In addition, it is an absurd way of 778 managing Scotland's energy industry, and contributes to the decline in Scotland as well as to the general level of unemployment.
Instead of an aluminium smelter working and contributing to the economy and instead of taking advantage of the cheap energy available from Peterhead, we have even more unemployment than we might otherwise have had. A modern pit at Monktonhall is at risk. A modern power station at Cockenzie is at risk unnecessarily because of the Government's failure to manage sensibly the industry and Scotland's energy supplies.
Obviously, I welcome the additional money being made available to the coal industry under the Bill. However, it is no substitute for the sensible management of energy and industrial policy in Scotland. The Government's failure is shown by the chaos suffered by those of my constituents who are involved in electricity generation or coal mining. The Government's failure is also highlighted by the employment and industrial crisis that has resulted in Easter Ross from the closure of the aluminium smelter. I suppose that the additional money provided in the Bill is a useful stopgap but it is no substitute for a sensible energy and a proper industrial policy.
§ The Under-Secretary of State for Energy (Mr. Giles Shaw)
It seems a considerable time since the hon. Member for Merthyr and Rhymney (Mr. Rowlands) opened the debate. The hon. Member for East Lothian (Mr. Home Robertson), a Scot, was the last Opposition Back-Bench Member to speak. However, the hon. Member for Merthyr and Rhymney was right to remind us that the Bill must be seen in the context of the position that the industry now finds itself in. There is nothing new about the Bill. As all hon. Members know, this Bill is another in a series of Measures offering substantial amounts of additional financial support to the industry, and uprating the redundancy payments scheme which has been operating for some years.
The hon. Member for Merthyr and Rhymney made several points, which I shall endeavour to answer. In particular, he asked about Herrington colliery. He said that he believed that the policy has been changed. The hon. Members for Midlothian (Mr. Eadie) and for Bolsover (Mr. Skinner) also raised that point. The closure of any colliery is a matter for the board and not for the Government. The hon. Member for Merthyr and Rhymney will know the procedure for closures. I understand that the proposal has been made locally but that there has not been any discussion of it or any confirmation. Therefore, it may be in the early stages of consideration.
However, it is certainly the NCB's policy to avoid compulsory redundancies wherever possible, by giving redundancies to older men who are prepared to leave, and by transferring younger men to other pits. That policy has been successful in the past. I am sure that the board will seek to apply the same arrangements at Herrington if there is a proposal for closure that goes through the usual process. I know of no reason to think that the policy at Herrington would be different if there were a discussion about closure.
I was also asked about privatisation and National Smokeless Fuels. As I said in Committee, the board will discuss the question of ancillaries. I can confirm that there 779 is a target for the realisation of assets of some £10 million in the forthcoming year, and that it will be at least that figure in the years ahead. However, I assure the House that such major changes will have to be fully considered in consultation with the Department. I shall certainly do my best to keep the hon. Member for Merthyr and Rhymney properly informed of any developments. Therefore, where possible, there will be discussion about them.
My hon. Friend the Member for Darlington (Mr. Fallon) asked about the Monopolies and Mergers Commission report. An interim report was made by the NCB soon after the MMC published its finding. It published its report in June and the interim report was made in July. On 28 July, the Secretary of State published the Government's interim view of the MMC report.
The hon. Member for Midlothian referred to some important issues, as he usually does in debates on the coal industry. The hon. Gentleman and the hon. Member for Orkney and Shetland (Mr. Wallace) referred to the South of Scotland Electricity Board and the National Coal Board. I understand that the NCB is negotiating with the South of Scotland Electricity Board an arrangement which will be parallel to that between the CEGB and the NCB. The object is to provide competitively priced coal, taking into account the RPI, inflation and world coal prices. That will involve just under 5 million tonnes for several years. That should provide some reassurance. After the elimination of gas firing at Peterhead, the plan is still for a return to coal. The details of the negotiations are not yet available, but significant amounts are involved.
I am sure that we have never had a debate on coal when the hon. Member for Midlothian has not referred to the Point of Ayr liquefaction project. The scheme for the 2½ tonnes a day coal liquefaction plant is proceeding according to the schedule agreed earlier this year; no change has been made to that schedule. The Department and the NCB are sharing equally the cost of up to £1 million for the basic engineering design stage which should be completed in mid-1984, when a decision will be taken on construction. The NCB has strengthened its project management capability. We are confident that a formal offer of support for the project will be made by the EC commission. The NCB is also continuing discussions with the private sector and making progress in securing participation in the project. The news is good on that front.
The right hon. Member for Barnsley, Central (Mr. Mason) made an important interjection when he referred to the Grimethorpe project and asked whether it was still on course. The Department is supporting the NCB's participation in that large experimental fluidised bed combustion facility. The £60 million project is funded equally by a number of countries. My Department at present provides the whole of the United Kingdom contribution. That will remain so through the coming year.
My hon. Friend the Member for Bedfordshire, North (Mr. Skeet), as usual, made an important contribution when he reminded us that the taxpayer must have a fair deal too. My hon. Friend's patience in dealing with such matters rightly reflects our great concern that, after all the expenditure in the industry, changes should be made to give the taxpayers some return on their investment.
The hon. Member for Don Valley (Mr. Redmond) asked about the interconnector with France. I assure him that it has a limited application and is largely for the 780 managerial transfer of load rather than a major incursion into the United Kingdom grid system, and to deal with excess spinning capacity. I know of no official estimate that imports could be as high as 7 million tonnes, the figure which the hon. Gentleman used in Committee. The figure will be significantly lower than that and much nearer the 4 million tonnes of which he is aware. Will the hon. Gentleman please bear in mind that since 1969 we have changed to being net exporters of coal. That must be welcomed by hon. Members of both sides of the House.
My hon. Friend the Member for Bromsgrove (Mr. Miller) raised an important issue in relation to the foundry coke industry. He drew to the attention of the House the consequences of the elimination of the coking subsidy which is contained in clause 2 of the Bill. My hon. Friend mentioned the price increase on foundry coke that might be implemented when the present subsidy ends. I can well understand that this is a matter of great importance to the foundry coke industry. It is causing concern to a number of people who have made representations to me and to the Department. I believe that the foundry coke producers will be sensitive to the position of their customers. After all, they have every interest in ensuring that their customers stay in business.
I am in touch with the chairman of the National Coal Board on this matter and I have drawn to his attention the points raised with me by the foundry industry. I appreciate its concern. At the moment the industry has assumed that prices will rise by as much as £22 per tonne, but I do not yet know whether this will indeed be the case. However, I assure my hon. Friend that this is one of the points I have taken up with the chairman of the board and I will write to my hon. Friend in due course when I have further information. I hope that my hon. Friend will be assured that I am considering his points carefully.
The hon. Member for Wentworth (Mr. Hardy) mentioned acid rain. I take a great interest in the matter because of my previous experience at the Department of the Environment. The £4 million research project that the National Coal Board and the CEGB have placed with the Royal Society is a major contribution to our understanding of this problem. The hon. Gentleman must also know that scientific opinion has been changing on this matter. The Swedish Academy of Science has recently taken different views on the cause of the problem in Scandinavia and different views have been expressed about the cause of the damage to forests in West Germany. Before major steps are taken involving large amounts of money—although the hon. Gentleman suggests that they may not be as large as was at first feared—which affect the potential cost of electricity, it is essential to try to obtain more scientific information on this matter; that we intend to do.
§ Mr. Hardy
I am obliged to the Minister for that reference and for the fact that he has stayed for such a large part, if not the whole, of the debate. That is appreciated. I take note of what he said. However, would it not be premature for those who are not interested in the coal industry to be allowed to get away with sweeping condemnation of the coal industry for pollution in other countries? Will he also make the point that we may have one of the major answers to the problem?
§ Mr. Shaw
I accept that. When I was at the Stockholm conference in 1982 I made that point in public.
My hon. Friend the Member for Tatton (Mr. Hamilton) made the point that the Bill is a two-year measure. My 781 hon. Friend rightly said that some improvements must be shown by the end of that period. I give him that assurance. The object of the Bill is not only to continue a rate of payment and a massive rate of borrowing but to provide a time scale within which the industry, and the Government's view about the industry, must be assessed in the light of current events. My hon. Friends will recognise that the two years through which the industry is now to pass will be of crucial importance in determining its size and scale for the future.
The hon. Member for Rother Valley (Mr. Barron) referred to investment. He knows from his service in Committee just how important this issue has been. At current prices, since 1974, £7,150 million has been invested in the industry. That is significantly more than the £6.5 billion envisaged in the 1977 updating of the 1974 "Plan for Coal". Since 1979 investment has averaged £2 million a day and will proceed at more than that rate not only this year but next year despite the fact that the National Coal Board is currently losing £1.5 million a day.
The hon. Member for Bolsover asked about subsidies and about the European price of coal. I must remind the House with some firmness that, if we are to invest this sum in the industry, it cannot be ignored when we are looking at the subsidised prices of foreign competition. There are unit subsidies per tonne in Europe — £17.2 in France, £17.7 in Belgium and £4.5 in the Federal Republic of Germany. But the amounts spent on investment in coal production in Europe in 1982 were £37 million in France, £26 million in Belgium, £259 million in the Federal Republic of Germany and £685 million in the United Kingdom. Opposition Members must take into account those massive figures when comparing the competitive position of coal industries in different countries.
§ Mr. Skinner
The Minister talks about finances, which are the crux of the problem for the Government. He referred to interest charges and the fact that the industry loses £1.5 million per day. He should examine the different sets of figures — £366 million in interest charges in 1982 and £1.5 million lost each day. There are 365 days in a year. It does not take another Pythagoras to realise that two thirds of the total loss is the result of the interest charges.
§ Mr. Shaw
The hon. Gentleman must get it into his head that every year the NCB receives deficit grants that more than offset interest charges. He fails to recognise — [Interruption.] The hon. Gentleman is, as usual, screaming for a capital write-off. The NCB receives that every year. The taxpayer has provided total deficit financing. In 1978 the interest charge was £138 million, 782 in 1979 it was £184 million, and each year the deficits have been written into the NCB's figures so that it is in no way adversely affected by the high interest charges that it carries.
There is not another industry in Britain that has anything like that assistance in the financing of its operations. In the absolute amounts being spent on the coal industry, both in deficit financing and social grants, the NCB is uniquely placed because the taxpayer has so far patiently continued to provide it with a high level of support.
The Bill is an essential part of the servicing of the NCB during the next two years. It seeks to continue an extremely high level of borrowing, and it also continues the redundant mineworkers payments scheme. It seeks to end some schemes for which advance provision has been made and which will now be subsumed into the deficit financing of the industry.
We have today debated the past of the industry in large measure. Very little account has been taken of its future, yet it is with that future that the House must be critically concerned. We must have a coal industry that cart provide an effective contribution to a national energy policy. It must be able to justify the large sums of money being invested in it. It must demonstrate that it can produce coal at a price that is both profitable to the industry and competitive in world markets. If passing the Bill tonight provides those objectives, I am sure—
§ Mr. Rowlands
I am sorry to stop the Minister in full flow, but I wish to add my thanks to those of other hon. Members to the hon. Gentleman for staying in the Chamber throughout the whole of the debate and listening to every speech. He is referring to the future, part of which has been mentioned by my hon. Friends and myself—that being the boiler conversion scheme. When will the House have a statement about all the projects in the pipeline, which are part of our future market for coal?
§ Mr. Shaw
I trust that we are on the last lap of the consideration of that scheme. I recognise that 31 December is the cut-off date, and I hope to make a statement before then.
In commending the Bill to the House, I conclude by saying that although it is a small measure it a vast measure of national resources. It is for the industry to demonstrate within the next two years that it can put the industry right, which will allow the Government to renew their confidence in the coal industry.
§ Question put and agreed to.
§ Bill accordingly read the Third time, and passed.