Coal Use (Hansard, 28 February 1983)

§ 3. Mr. Welsh
asked the Secretary of State for Energy what information he has as to the extent to which coal has replaced other fuels in particular uses over the last four years.

§ Mr. John Moore
On 1 January 1979, coal's share of total inland energy consumption was 35.3 per cent., petroleum's share was 41 per cent. Coal's share by the end of 1981 had increased to 37.4 per cent. while petroleum's had declined to 34.9 per cent. Though coal has increased 4 its percentage share in a smaller energy market, provisional figures for 1982 show a decline as a consequence of the added oil burn incurred due to the rail strike.

§ Mr. Welsh
I thank the Minister for that information. Is he aware that many firms are slashing their fuel bills by switching to coal? One Merseyside firm slashed its energy bill in one year by £150,000 by switching to coal. Will the Minister give an assurance that the help that the Government give to firms switching from other fuels to coal will continue after 31 March?

§ Mr. Moore
The hon. Gentleman is making a valid comment about the scheme that is managed by the Department of Industry. The projects that have already been approved will produce an additional 585,000 tonnes a year of coal burn. If all projects under consideration are approved, the increase will be 1,244,000 tonnes a year. I shall draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Secretary of State for Industry.

Mr. J. Enoch Powell
Does the Minister recognise the importance for the coal industry of the switch from oil to coal in the generation of electricity in Northern Ireland? Is he aware of the important potential market for solid fuel in the Province for the National Coal Board?

§ Mr. Moore
The details are for my right hon. Friend the Secretary of State for Northern Ireland, but I am conscious and aware of the background to the issue to which the right hon. Gentleman has referred.

§ Mr. Eggar
Is my hon. Friend aware that the taxpayer is already subsidising the coal industry to the tune of over £1 billion a year? If coal is to make further inroads into the general energy market, is it not important that miners make an effort to reduce the cost of coal produced?

§ Mr. Moore
The substantial taxpayers' subvention to the mining industry has continued for many years. It is clear that if the industry is to have a greater future it must keep control of costs and ensure security of supply. Hon. Members on both sides of the House who want to see the coal industry continue to retain its market wish both these things to happen.

§ Mr. Joan Evans
Although the price of oil was turning to the advantage of the coal industry, does the hon. Gentleman agree that we shall be dependent on coal in the years ahead? Will he reconsider pit closures and recognise that the industrial dispute in South Wales, which is spreading to other areas and which will begin in Yorkshire on Monday, is the result of the lack of capital investment in South Wales pits to make them more productive and to ensure that they are long lived?

§ Mr. Moore
The hon. Gentleman's supplementary question is somewhat tangential to the main question. Investment in South Wales is about £30 million a year. With only about 7 per cent. of the nation's total coal production producing about 42½ per cent. of the nation's coal losses, a subsidy of about £125 million will be paid this year to cover the losses of the South Wales coalfield.

§ Mr. Skeet
Does my hon. Friend agree that if the price of oil drops to between $20 and $25 a barrel, oil will become rather competitive with coal and coal could have a declining market?

§ Mr. Moore
In common with all those who wish to see the success of the coal industry, I want to see the industry 5 contain its costs and ensure security of supply. Coal can be competitive irrespective of the price changes the we can expect to take place in all other competing products.

§ Mr. Rowlands
The Minister has quoted certain figures for South Wales. Does he accept that capital investment in the South Wales coalfield has been cut by about 40 per cent. in real terms in the past few years and that "Plan for Coal" in South Wales terms has been ripped up unilaterally by the Government. Will he bring together the tripartite committee on the South Wales coalfield—the Government, the NCB and the NUM—to thrash out an answer to the problem? That would be a far better way of proceeding.

§ Mr. Moore
The hon. Gentleman cannot ignore the fact that the National Coal Board, which considers the interests of the nation, advises the Government on where best to invest. Similarly, he cannot ignore the reality that this year the coal industry is having to invest about £125 million to cover losses as well as £30 million merely to maintain the current position in South Wales. There has been a continuation of losses for years and years. That is the reality that the coal industry must face when advising the Government on their investment policies for the industry.