§ The Under-Secretary of State for Energy (Mr. Giles Shaw)
I beg to move,That the draft Mineworkers' Pension Scheme (Limit on Contributions) Order 1984, which was laid before this House on 7th March, be approved.
§ Mr. Speaker
I understand that it is for the convenience of the House to take this and the following order together in a three-hour debate:That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1984, which was laid before this House on 9th March, be approved.I remind the House of what I said this afternoon about what would be in order in this debate.
§ Mr. Shaw
The redundant mineworkers' payments scheme has been supported by successive Governments since 1967. It is a firm recognition that Governments of both parties support the industry. It also recognises the unique problems associated with restructuring the coalfield and with the dependent communities in the coal industry.
The problems associated with closures have been a constant feature of the coal industry, as they have been with all extractive industries, and the closure of pits has become an annual feature for many years. On the other hand, in the 1974 "Plan for Coal" there was a specific reference to the need to reduce capacity at an annual level, planned at that time to be between 3 million and 4 million tonnes per annum, and that was the forecast rate for the whole of the plan period.
That level, as the House will be aware, was never achieved. Indeed, about half that rate was the annual average. But in 1983–84, in the year just ending, with 15 closures and several mergers, about 20,000 miners left the industry voluntarily. For the year 1984–85 the board announced a similar reduction in capacity of about 4 million tonnes. That is related to the fact that, after many years, the lack of movement in the closure of uneconomic pits has now caught up with the industry. The rate of closure was forecast as long ago as 1974.
It is right that the House, and especially the Government should review the redundant mineworkers payment scheme to ensure that its provisions are improved as necessary and that, as transfers inevitably become more difficult to achieve, it reflects properly, as the House would wish, the contraction of this industry. The scheme enables mineworkers, cokeworkers and certain workers employed in the provision of ancillary services who are made redundant to receive redundancy payments beyond those that the industry can afford. Support given in that way is, of course, additional to that provided in the form of deficit and social grants to the NCB. The House will be only too aware of the seriousness of the NCB's financial position. That has been emphasised in the House on a number of occasions, including recently in the debate on the special Supplementary Estimates.
Against that background, the order is evidence, if evidence were needed, of the massive continuing support that should be given to the coal industry. With this substantial financial support the industry can look to a 386 viable future. Because the Government seek to back the industry in moves towards a viable future, we trust that the House will approve the enhancement of the scheme contained in the order.
Leaving aside the adjustments to the table of weekly benefits and other detailed provisions made in what, inevitably, is a complex order—I am conscious of the fact that Opposition Members are perhaps more experienced than I in dealing with the complexities of this scheme— the fact remains that there are significant changes to which I wish to draw the attention of the House. Essentially, there are three new provisions. First, in article 16, improved provision is made for those made redundant and aged over 21 but under 50 who, it is proposed, will receive a single lump sum equivalent to £1,000 per year of service. That provision replaces the arrangement made under the 1983 order whereby that group received two smaller lump sums dependent on age and previous earnings, in addition to length of service.
When a pit closes, it is the board's policy, wherever possible, to offer men who wish to stay in the industry alternative jobs at other pits, and to make redundant older men who are willing to leave on the terms available. It is a measure of the effort the board puts into this that, of the men directly affected by pit closures this year, which closes on 31 March, who were not retained on salvage work at the pits in question, over 75 per cent. were found jobs at other pits. It is a measure of the success of this policy that, despite a reduction in mining manpower of about 20,000, there were no compulsory redundancies among men wishing to stay in the industry.
I make it clear to the House that the board seeks to continue that policy. A statement made by the NCB chairman as recently as 23 March made that clear when he said:At the pits now under review every man who wants to stay with us will be offered another job in the industry.That includes those at Cottonwood colliery in south Yorkshire. The board's objective is to continue to avoid compulsory redundancy throughout the industry.
§ Mr. Tony Marlow (Northampton, North)
Problems occurred in Northamptonshire where footwear companies closed down, and there were large-scale redundancies in the shoe industry. Over the past years, there has been a reduction in work in the footwear industry commensurate with a reduction in the coal mining industry. Can my hon. Friend explain why it is that Government after Government provide massive redundancy payments to those who are declared redundant in a nationalised industry, whereas private industry gets none of those perks and benefits? What is wrong with private industry that it does not deserve to get the benefit given to nationalised industry?
§ Mr. Shaw
I appreciate fully the sincerity with which my hon. Friend asks that question. Many persons, both within the House and outside, have cast an extremely envious eye on the way in which Governments of both persuasions have treated the coal industry financially in times past. However, we must recognise that we have an enormous stake in the massive energy industry. We must recognise also that from the redundancy schemes that are being laid before the House there is the possibility of a return to viability. It is because of that prospect that the Government come before the House hoping to ensure support for an additional scheme.
§ Mr. Dennis Skinner (Bolsover)
Does the Minister agree that irrespective of the extra redundancy payments, the cost of closing a pit, taking into account redundancy payments and various other benefits, is about twice as much as the cost of keeping it open?
§ Mr. Skinner
A pit may be uneconomic in one year but economic the next. What will be the additional cost of closure when the additional redundancy payments take effect, which are destined to throw more people on to the dole?
§ Mr. Shaw
I am sure that the hon. Gentleman would be the first to say that each pit must be treated individually. It is not easy to make a complete response to his question. However, the calculations show beyond doubt that within three years the public expenditure benefits from the maintenance of the coal industry will be substantial despite the large benefits that are being offered in redundancy pay. The long-term benefits to the industry and the Exchequer are proven and the benefits will be available within three years of taking the proposed action.
We recognise that the geographical distribution of the pits and the age distributions of the miners are now such that, following the board's announcement of the planned reduction in output in 1984–85 to 97.4 million tonnes, some younger men may leave the industry. We are therefore proposing improved provision for those aged 21–50 because we believe that those who leave, often after many years in the industry, should be treated generously. We believe also that it is right that the Government should help the board to maintain the policy of avoiding compulsory redundancies wherever possible. That policy has been pursued with some success to date.
§ Mr. Geoffrey Lofthouse (Pontefract and Castleford)
Does the Minister agree that if one of the younger miners under 50 years of age agrees to take the redundancy terms, it will not be possible for Mr. MacGregor to fulfil his promise to offer alternative employment to all miners whose pits are closing?
§ Mr. Shaw
I appreciate that, but I think that the hon. Gentleman will know that in many instances older miners at pits which are to remain open have volunteered for redundancy so that younger men at pits which are closing may be found additional jobs. I accept that flexibility is required. There is no formula that I am aware of which will serve to calculate how many men under 50 will be involved in redundancies in the coming year. However, we felt it right to make the necessary provision in the order.
Secondly, I draw the attention of the House to article 10. Provision is made to enable those receiving weekly benefit to take holidays abroad without losing all entitlement for the period that they are outside the United Kingdom. The House will know, especially the hon. Member for Midlothian (Mr. Eadie), that the matter was raised on many occasions with my predecessor. It is one that has been raised consistently during debates on orders of this character. I trust that the hon. Member for Midlothian will welcome the change and that the House will agree that the draft order should be approved so that from 1 April 1984 it will apply to all those receiving weekly benefit irrespective of the date of their redundancy.
Thirdly, in article 17 we have introduced further protection for those whose redundancy payments would 388 otherwise be reduced due to breaks in service occasioned by incapacity. The loss of redundancy payments due to breaks in service arising out of illness and injury is a mailer of great concern to Members on both sides of the House and was a major issue during the consideration of the Coal Bill in Committee. I recall in particular the concern expressed by the hon. Member for Pontefract and Castleford (Mr. Lofthouse) and by other Labour Members. We have agreed to make a change in the redundancy order now before the House. The hon. Member for Pontefract and Castleford (Mr. Lofthouse) has campaigned tirelessly to ensure that those of us with responsibility for the scheme should not lose sight of the hardship that such breaks in service can cause in individual cases.
I have, therefore, reviewed with care the incidence of such breaks and their treatment under the previous RMPS. I am satisfied that the scheme's provisions that were first introduced in the 1983 order, disregarding periods during which an employee received an incapacity pension under the Coal Industry Nationalisation (Superannuation) Regulations 1950, are both fair and reasonable. I have reconfirmed that such incapacity can be through sickness or injury, and can be physical or mental. I am also satisfied that the provisions of the Employment Protection (Consolidation) Act 1978, which determines statutory minimum redundancy payments for all workers, can have a severe impact in the particular circumstances of the coal industry. Hence, the 1984 order now before the House introduces a further payment in such cases, which is designed to ensure that the total redundancy entitlement is not adversely affected by such breaks due to incapacity.
Although it is not strictly part of the new order, I trust that hon. Members will approve when I say that I have decided that ex gratia payments shall be made to those workers made redundant between 11 March 1981 and the date when the provisions will come into effect, to deal with the breaks in service that I have just outlined. I believe that that would remove the injustices of which the Opposition have complained for some time.
§ Mr. Michael McGuire (Makerfield)
We are all grateful to hear that news from the Under-Secretary. Does the Minister agree that it follows that breaks in service that have denied a miner concessionary coal—he knows that I am pursuing such a case—will be brought within the scheme? If the Minister could answer that, he would make my day even more joyful.
§ Mr. Shaw
I am very concerned about concessionary coal and breaks in service, which is a live issue, as the hon. Gentleman and the hon. Member for Bolsover (Mr. Skinner) appreciate. Equally, the hon. Gentleman knows that arrangements for concessionary coal have been negotiated by the unions and that they vary in different areas. It is not easy to find a simple answer to this genuine problem. Although I am not prepared to give the hon. Gentleman the assurance that he seeks, I accept that there is a modest anomaly.
I hope that hon. Members on both sides of the House will accept that the changes that I have outlined do not represent a radical departure from previous years, but add up to an important package of improvements underlining the Government's continuing support to the individuals who are affected by redundancy. It is also designed to create in a humane and civilised way an effective and viable industry that is capable of offering secure employment in the longer term.
389 I shall deal briefly with the second order concerning pension adjustments, which follows the standard form of earlier years.
§ Mr. Den Dover (Chorley)
Before the Minister turns to deal with the second order, will he clarify a point? In answer to an Opposition Member, he said that older miners working at a pit that is not due for closure could take early redundancy, thereby providing a vacancy for another worker. Surely only miners working at pits that are to be closed can get redundancy. Under this scheme, any miner coming up to his last working year can get a high redundancy payment, which is not the best use of public funds.
§ Mr. Shaw
My hon. Friend should be aware that in the restructuring of an industry it is crucial to have enough flexibility to allow the transfer of work forces where that can be achieved. It would be beneficial for public funds if that were done. We must consider that in this industry we want a work force which, when correctly deployed in productive pits, will meet the requirements of the industry for a considerable time to come. I accept that there appears to be a widespread application of the theory that the individual pit is being closed is the only one to be affected, but redeployment requires consequential action at other pits.
The second order follows the standard form of earlier years. It continues the policy established through the National Coal Board (Finance) Act 1976, whereby the cost of meeting the deficiency in the mineworkers pension scheme fund resulting from the need to pay pensions to the large numbers of people who left the industry before 6 April 1975 is reimbursed through Government grants over the period to 1995. Each year when the level of pensions is increased, a higher level of deficiency contributions is required by the fund. The Government may reimburse them up to the level necessary to maintain the real level of pensions if they are satisfied that the NCB's finances do not permit of it taking on the additional burden. In the board's present financial circumstances, it will not surprise the House, there is no possibility of the board meeting that additional obligation.
§ Mr. T. H. H. Skeet (Bedfordshire, North)
I am much obliged to my hon. Friend. He is aware that over the past 10 years about £277 million has been put into the fund by the Government, to top it up. We have heard that Mr. Scargill is determined to cut down the investment—that is, there will be no overseas investment and no investment in the oil industry and so on to help the beneficiaries. Does my hon. Friend have something to say about that? Why should the Government be prepared to put money into the scheme if the miners are not prepared to do their best for their country?
§ Mr. Shaw
My hon. Friend will not be surprised when I say that there is no way that I shall seek to comment upon a case that is currently before the courts. However, he will expect me to be robust and say that the sooner that we achieve viability within the coal industry, the better. Then, the board would be able to finance the modest increase in pensions each year. My hon. Friend is right. It has been a cumulative debt. However, a time limit of 1995 is attached to it.
§ Mr. Rob Hayward (Kingswood)
My hon. Friend said that he hoped that the coal board would be helped to return to viability. May we assume that the schemes that we are considering will terminate when the NCB returns to viability and that the excessive expenditure on redundancies compared with that faced by people in private industry will not continue?
§ Mr. Shaw
I am well aware of my hon. Friend's feelings on the matter. The House should be clear that we are dealing with substantial increases in redundancy pay. We shall carry out an annual review of the redundancy payments scheme. The parent Act, the Coal Industry Act 1983, expires in 1986. There will be a regular review not only of the scheme, but of its costs. Therefore, I assure my hon. Friend that we are extremely concerned, as he is, to ensure that the sums are sufficient, but only sufficient, to do the job for which they are designed.
In the board's present financial circumstances, there is no possibility that it can make good the pension adjustment required under the order. Therefore, I hope that the House will agree that the second order, too, should be passed.
I am aware that in dealing with the germane matters relating to the two orders, hon. Members on both sides of the House will seek to debate wider issues, but it is right that we should lay the orders before the House and explain them. I shall do my best to answer questions towards the end of the debate. I commend the orders to the House.
§ Mr. Stanley Orme (Salford, East)
We shall not oppose the orders. They make improvements in redundancy payments and modest improvements in the mineworkers pension scheme. I emphasise the word "modest". We debate these orders, against a background of 40,000 jobs having been lost in the past two or three years within the industry and with another 20,000 threatened in 1984–85. Twenty pits or more are threatened with closure. We are dealing with the livelihood of people working in a dangerous and dirty industry, which creates wealth for this nation. We are self-sufficient in coal and the coal will still be there many years after the oil and gas have been used up.
The debate on these orders is very important. Some might say that the proposals—not least the redundancy proposals—are extremely generous, but I do not think that they are. We are talking about young people who may well have great difficulty in finding other employment. The sum involved—£ 1,000 for each year in the industry — may seem large, but we shall lose some skilled miners for all time. They will not come back to the industry. To some extent one can appreciate and support, what is being done for the older miners who have had to face dust and the possibility of pneumoconiosis, but it is the young people whom the industry will need in the future. When the upturn in the economy arrives, we shall start getting gas, oil and chemicals from coal. We should be planning for the future, but the Government are not making any plans at the moment.
§ Mr. Orme
I thought that I had made it clear that we support the orders. Yes, I am in favour of that, but I am pointing out that the second order creates problems and 391 difficulties. It will make it possible to get rid of people from the industry, but there is the question of the younger men who are to replace the older men who are retiring.
Mr. MacGregor might like to use the scheme to allow redundancies to take place even in pits that are not scheduled for closure. That would be criminal. The industry would lose skilled men and craftsmen at a time when it is going to need them. If people were to leave the pits wholesale, that would not be beneficial to the industry or to those working in it.
It has been said that benefits in the private sector are not often as good as those in the public sector. I know that there are anomalies, but the truth of that statement depends upon which area of the private sector one has in mind. There are some very good golden handshakes in the higher echelons of the private sector. However, workers within a state industry should be treated properly, and in the case of redundancy proper provision should be made.
§ Mr. Orme
I must get on as many hon. Members wish to speak. I hope that the hon. Gentleman will forgive me. The orders contain the prospect of many young miners being paid a lump sum and losing their job. Any mineworker between 25 and 50 years old will be able to receive £1,000 for each completed year of coal industry employment since the age of 16. The scheme includes those who work above ground as well as those who work at the coal face.
What is proposed might be the best way in which to persuade people to accept voluntary redundancy but it might not be the best way in which to help them afterwards. A man who has received a large redundancy payment will not be able to claim supplementary benefit as long as he has £3,000 left and no redundancy payment will provide enough capital for him to live off the income it generates. He might end up eating into his capital until it is reduced to £3,000, but he has no prospect of a job. The central problem is that mass unemployment means that a redundant mineworker will have great difficulty finding another job in or out of the coal industry. Is redundancy payment any compensation for the prospect of long-term unemployment that such miners will face?
There is always much talk of compensation for people who give up jobs in, for example, the coal, steel, shipbuilding, motor, dock, machine tool and textile industries, but where is the industry paying to take workers on? When did we last hear of an industry needing an extra 20,000 workers? If no industries are expanding their work force while some are reducing theirs, unemployment will continue to increase. These orders give us an opportunity to highlight our fears about the future of the coal mining industry.
Even if miners are on strike, there can be no doubt that they care about the future of the industry and their jobs. We want the industry to expand and an end to pit closures and redundancies. Redundancies and the overtime ban show that the industry is facing a crisis. It is wrong for the Government to stand aside at this crucial time. We call on them to end coal imports, which threaten the industry's existence, to shelve Mr. MacGregor's so-called survival plan which is better named a destruction plan and to take immediate action to open tripartite talks. It is not good 392 enough for them to take a ringside seat now. They have an obligation to the nation, the industry and miners to ensure the industry's survival.
We have witnessed the negotiating machinery being swept aside at Polmaise in Scotland and Cortonwoocl in Yorkshire.
Mr. MacGregor talks about saving 4 million tonnes, but 1.4 million tonnes would come from the north-east and 0.75 million tonnes would come from Scotland. Therefore, two areas of Britain with high unemployment and facing the greatest rundown in industry would take 50 per cent. of those proposed cuts.
I put it bluntly to the House that Mr. MacGregor has got it wrong. He was wrong about the overtime ban and was forced to come back to the House for £135 million only a fortnight ago. He is not managing the industry with a view to planning for the future or developing the industry. He has a crude plan to cut down the industry and to get rid of some areas. We shall need those areas and that coal in the future.
§ The Secretary of State for Energy (Mr. Peter Walker)
Does the right hon. Gentleman think that Mr. MacGregor's decisions to put £400 million into the Asfordby development and to spend more in annual capital investment than was spent in real terms in any year of the Labour Government are signs of a man trying to destroy an industry?
§ Mr. Orme
Those proposals fly in the face of what I have been putting to the House. In the Polmaise pit in Scotland, £15 million has been thrown aside. Mr. MacGregor does not have a concerted plan. He talks about wanting to develop certain areas and certain pits, for example in the west midlands and south Yorkshire, but we are talking about the coal industry as a whole—about Scotland, Kent and Yorkshire.
§ Mr. Peter Hardy (Wentworth)
The Government have done remarkably little for the coal industry, but they are responsible for the Asfordby development, so they ought not give to Mr. MacGregor credit that they could reasonably claim for themselves.
§ Mr. Orme
I take my hon. Friend's point. Mr. MacGregor's proposals for a rapid rundown of the industry— not taking into account the long-term economic damage that he will cause in thinking that he can deal with the coal industry in the same way in which he dealt with the steel industry—are completely unacceptable.
The Government ought to shelve the MacGregor proposals, call a tripartite meeting and sit down with the NCB and the unions to work out a new "Plan for Coal". The previous "Plan for Coal" talked about 150 million tonnes. We are now talking about 97 million tonnes and Mr. MacGregor envisages a further reduction. There is talk of reducing the number of miners to 140,000. That is unacceptable.
There is an upturn in the coal industry. Britain provides the cheapest non-subsidised deep-mined coal in the world—coal from Poland and South Africa is subsidised—and we have the opportunity to propose developments to give us a viable and expanding industry, in which miners and the NCB can participate. These orders give us an opportunity to debate this issue, and I am sure that my hon. Friends will want to follow up this point. We are not opposing the orders, but we are opposing the Government's refusal to take action.
§ Mr. Speaker
Order. The House is aware that there is a great demand to speak in the debate. I call on hon. Members to speak briefly this evening.
§ Mr. Jim Lester (Broxtowe)
If ever there was a time to keep a clear head and indulge in cool thinking about these matters, particularly among those of us who have a real interest in the mining industry, and have had for a long time, now is the time. The speech of the right hon. Member for Salford, East (Mr. Orme) was a ragbag of facts, and does not help at all when we consider either these orders or the future of the coal industry.
It is understandable that the Opposition are not opposing these orders, and I pay tribute to the right hon. Member for being prepared to be rather more generous in his comments on them. He recognised that the orders have been thought through, and are a recognition of the pressures being put on the Government by all hon. Members for realistic changes to meet the changed circumstances in the industry. All of us recognise that change is difficult and unacceptable to many. With these orders, we are doing what the Conservative Government have consistently tried to do—to meet those needs they can, and to make the changes more acceptable.
Some of us remember the late 1960s, when the Labour Government were closing about 45 pits a year, and the miners in my area were out of work without any of these terms, when the discussions about what happened were minimal, and there was nothing like the sensitivity and concern that is now being shown for the industry.
§ Mr. Kevin Barron (Rother Valley)
How many miners were put out of work in the 1960s? Did they not move on to mines where there were jobs, which they cannot do today?
§ Mr. Lester
If I took the hon. Gentleman to Nottinghamshire, I could find him miners who have been out of work since then. The Nottinghamshire county council, of which the hon. Member for Ashfield (Mr. Haynes) was a member, had to provide alternative employment for many miners who were put out of work when the pits closed. That Government had to recognise drastic changes in the industry, because they then believed that there was a glut of oil. This Government, who are closing about 20 pits a year with a great deal more sensitivity, are trying hard to meet different circumstances.
§ Mr. Frank Haynes (Ashfield)
The hon. Gentleman should not have said what he did because he has provoked me. Many pits were closed in Derbyshire, and many of the men came in to Nottinghamshire to work in the pits there. Things are different now. Men cannot get work at other pits. What MacGregor says is a load of rubbish.
§ Mr. Lester
I do not know whether the hon. Gentleman wants to be judged by his own load of rubbish. He will admit that we sat on the county council together, and the Conservative council introduced a pound for pound scheme to find alternative jobs in the Kirkby-in-Ashfield area, which is now in his constituency. I built a factory in that area to employ miners who were unemployed because of the pit closures.
The difference today is remarkable. The Government have invested £3.5 billions in new faces and pits, such as 394 Selby and Asfordby. That is a real commitment to the industry. The pay levels of the miners today are 26 per cent. above the average manufacturing wage. In those days, they were about half the manufacturing wage. The productivity deal done in the teeth of opposition from Labour Members has meant that the industry is producing coal at a far more economic rate. The coal burn in the electricity industry has been maintained. Other countries are now using coal. Far from letting the coal burn drop, we have increased it. These facts indicate the commitment of the Government to the coal industry.
We have introduced orders to try to encourage the mobility of the younger miners, about whom Opposition Members have spoken. We have introduced many schemes to encourage that essential element of trained young miners who are able to move into the new coalfields. I recognise, perhaps more than most, that closing coalmines is rather different from the closures and redundancies about which some of my hon. Friends have spoken. When closures happen within a community, often all the workers lose their jobs, and I am prepared to accept from Opposition Members that there are few options within such communities. In such cases, the offer of an alternative job is not the same as it would be in any other industry, because each pit has its community, and its hierarchy. After having been an important man in the community in one coalmine, a man can move, and find himself starting at the bottom in another coalmine. All these facts are understood and known. It does not alter the fact that, if we are to have a successful coal industry in future, it is not possible to invest the amount of money that is currently being invested to produce low-cost coal in the area in which it will be required. To ensure that investment leads to productivity we are producing coal in our best 20 pits at £28 per tonne, and we must make a judgment about the other 20 pits that are producing coal at £89 per tonne.
§ Mr. Dave Nellist (Coventry, South-East)
The hon. Gentleman is talking about investment in pits. A Minister in the Department of Energy told me after Christmas that approximately £100 million per year in interest charges is paid by the National Coal Board to banks on 22.5 million tonnes of coal stockpiled at pitheads. On "The Money Programme" shown on BBC2 last Sunday, NCB accountants estimated that the amount of money currently paid in interest on stockpiles of coal has doubled to £200 million per year. Would the hon. Gentleman not accept that a good chunk of what he claims to be investment is in fact stockpiling of coal to be used as a political weapon against the miners when they come out to fight against redundancies?
§ Mr. Lester
The corollary of the hon. Gentleman's remarks is that we should stop stockpiling coal, cut back production and close more pits, which is not acceptable to any Conservative Member. The analysed figures of investment in terms of machinery, new faces and new pits are separate from coal-stocking.
In our efforts to increase exports wherever possible at reasonable prices, we now export double what we import, and we import only specialised coals, so there is no prospect for more jobs in cancelling imports. What we need is more exports. Other countries are beginning to look for coal supplies, and we ought to be in the field with competitive, long-term prices, so that we can supply that coal.
395 Given those facts, a cool head and clear thinking—and I have lived in Nottinghamshire all my life, and have represented miners since I have been a Member—I am prepared to trust the judgment of miners to weigh up the facts, and to give them the chance in a ballot to make an accurate decision about the future of their industry. My regret is that they are not able to do that at present. From talking to the miners in my area about what the NUM is doing for them, I know that what they want is negotiations about shift payments which they find have not been adjusted. A shift payment currently averages £4 for very unsocial hours. The miners want negotiations about adjustments in pay, rather than the current political situation that they face.
The orders show a continued interest in the industry, a continued understanding of the significant change that is taking place, and are a sensitive and civilised way of trying to deal with the situation within the parameters of what the Government are able to do.
§ 11.5 pm
§ Mr. Roy Mason (Barnsley, Central)
I wish to follow up the remarks of my right hon. Friend the Member for Salford, East (Mr. Orme) and unreservedly welcome the increased pensions order and the redundancy and concessionary coal orders. Of course, they could have been laid at a different time and in better circumstances. Many pit men will think that they are being paid off at a time of industrial strife in the coalfields.
I welcome the increased redundancy payments. They are only what a miner deserves if his coalmine is likely to be exhausted and he is to be thrown on to the industrial scrapheap for the remainder of his life. Men of 50 to 55 years of age who have worked underground for 40 years will have dust on their lungs when they leave and will probably have been injured two or three times while underground. They will not necessarily live until they are 65.
The orders are related to the pit closure programme. At present, two grievances give rise to the coalfield crises —the 5.2 per cent. wage offer and the insistence of the NCB on an advanced rate of pit closures. Those sparked off the overtime ban. Only one third of the work force has been adversely affected by that. By far the majority of those in the industry do not work overtime. Many people recognise that there is a degree of immorality in constantly working overtime when there are 3 million to 4 million people on the dole.
The overtime ban had a number of objectives—to save the pits, to pay a decent wage and to employ more people. That ban was maintained for 17 or 18 weeks. Then, like a shot out of the blue, came the Cortonwood announcement. Cortonwood colliery was given five weeks' notice to close. That was the flash point. The NCB must now realise that it was a fool to create such an explosive position.
The men at the pit had been told that it had four to five years' life remaining with good quality coal and no immediate exhaustion. The branch officials and the men were shocked by the closure announcement. The matter was raised at the Yorkshire miners council meeting. It was a tense and angry meeting — I was present and I witnessed the mood. By a massive majority, the miners decided to stand by their previous ballot decision in favour 396 of industrial action against pit closures, other than those because of exhaustion or because their geological position made them difficult or dangerous to mine.
Why has all this come about? The chairman of the NCB, Mr. MacGregor, called for a cut of 4 million tonnes of coalmining capacity this year. Area directors were given discretion in cutting their quota of the 4 million tonnes. Instead of examining how best that could be achieved while maintaining good industrial relations and good coal production—perhaps by reducing face capacity in a number of the pits causing geological problems, or on odd seams with constant water problems—the NCB decided foolishly and impulsively to close one pit. It was a clean and clinical but cruel operation. It decided not to close a face here or there, but a pit that had four or five years of life with good quality coal. Indeed, miners had been drafted to that pit in recent weeks.
That was asking for trouble. Only five weeks' notice was given, leaving no time for pit closure review procedures. They were bounced. There was no time for local and national discussions or for appeals. Why did that happen? It was because after 17 weeks of the overtime ban, the NCB had lost 6.5 million tonnes of coal production—6.5 million tonnes of potential sales. Even at £50 a tonne, that equals £325 million. So the overtime ban was biting, and the pit closure programme had to be speeded up. It was a case of closing uneconomic mines faster to save money.
So there has been a county-by-county escalation of the strike. Of course, it has not affected every county. The National Union of Mineworkers has to face reality. The work force is different now. Now only 18,000 men in British coalfields are over 55 years old. The work force is much younger. Moreover, it is accustomed to a higher standard of living. It, therefore, has more commitments. There is a greater reluctance to lose wages and there is a hesitancy to strike. Not all mineworkers will see the reasoning of their leaders, but they must see the necessity of doing their utmost to save their pits, their jobs and their industry. In the event of a Middle East crisis, or the exhaustion of North sea reserves, or an expansion in our economy, a pit that is lost or closed now is another pit that is lost for good. Every pit with workable reserves that is closed means that we are sealing off our indigenous fuel.
We have had ham-handed leadership from the National Coal Board. It panicked and rashly decided, quickly and cruelly, to cut out 4 million tonnes of deep-mined coal capacity, irrespective of the conflict in the coalfields, irrespective of confrontation between management and men, and irrespective of the known hardship and suffering that it would cause in many mining communities. Although some miners may get decent compensation as a result of the new redundancy scheme, there will be more jobless, and many will soon be living off the state. Many hundreds of others in the mining areas affected with get nothing. They will suffer with the death of the pit, as will those in allied mining manufacturing, and local traders and businessmen.
Many will say that the miners cannot win this dispute. I say that the National Coal Board cannot win either, and its losses will be substantial. It is therefore time for the Government to intervene. It is time for the Government to propose less damaging alternatives. Why do we not cut the 4.5 million tonnes of coal imports pouring into the country? Opencast coal is piling up at power stations, 397 amassing coal mountains. If high stocks lessen demand, why not curtail opencast coalmining? We can bring supply into line with demand in a more understanding fashion.
If the Government were to advise the National Coal Board to take that course, it would quickly allay fears, lessen the tensions and create an atmosphere for the revival—it will take some time—of better industrial relations in the pits. That is not an extreme or drastic action to take. It is just common sense. It is common sense to avert a growing major industrial crisis.
I hope that the Minister will heed my words. I hope that he will pass them on to the chairman of the board, and insist that the board takes a less damaging course before our industry is in ruins.
§ 11.8 pm
§ Mr. Alistair Burt (Bury, North)
Taking the hint from my hon. Friend the Minister in opening the debate, I should like to widen the debate.
I represent an industrial constituency where the major industry was paper, which has been hard hit by energy prices over recent years. During the past few months, many hon. Members will have received letters from their constituents complaining about energy prices. The cost of fuel affects both the industrial and domestic sectors, and scarcely anyone is untouched by worry about energy.
Accordingly, interest in this debate should be widely spread, and not confined to those hon. Members whose constituencies have substantial coal interests. Whatever this House decides for the coal industry in terms of grant and subsidy is directly related to the price of electricity, which eventually will be paid for by both domestic and industrial consumers.
The widespread concern about energy costs was highlighted last week in the debate about fuel poverty. The Government rightly received a sharp reprimand from the Select Committee investigating the rise in the cost of electricity—although not, of course, a reprimand about the rise in gas prices, demanded by the gas industry. The last thing electricity needed was a price rise at the behest of the Treasury. There are quite enough costs inherent in the production of electricity and it cannot be denied that the costs of coal in varied ways, including the cost of investment, extraction, wages, redundancies and pensions, are closely tied to the cost of electricity.
The vast majority of Britain's electricity is still supplied through power stations running on coal and the need to have an efficient and economic coal industry is as important to those outside the coalfields as it is to those employed in them.
§ Mr. Barron
Has the hon. Gentleman red Coopers and Lybrand's report on the electricity supply industry—it is in the Library—which recommends a reduction in the cost of electricity to industry and domestic consumers which the Government choose to ignore?
§ Mr. Burt
If we imported coal at prices some 25 per cent. cheaper than we now buy it for from the NCB, electricity prices could be reduced by between 10 and 15 per cent. World conditions mean that we could import coal more cheaply than we can produce it, which would consequently reduce the price of electricity for everyone. Those who tend to make Government the villain of the 398 piece in matters relating to the coal industry sometimes forget the measures of protection, support and investment afforded by the Government to that industry.
Two central arguments may be raised against the orders before us tonight. First, there have been those who maintain that the orders are not sufficiently generous and that support here as well as generally for the industry is not generous enough. Such a contention cannot be justified by the facts.
Reference has already been made to the projections made in the "Plan for Coal" in 1974. When considering the progress made under that report, it is completely unfair to accuse the Government of failing to perform their part in the plan. Under the investment provisions of that plan, at today's prices we might have expected investment from the Government of about £6,500 million. In fact there has been investment of over £7,150 million. The capital investment demanded by the plan has been more than satisfied. Moreover, the bulk of investment over the past 10 years has been supplied by a Conservative Government. The recent announcement referred to by my hon. Friend the Minister of the development at Asfordby, which will bring jobs and increase coal production for the midlands, was the largest major development to be announced since the previous Conservative Government's decision on Selby in 1970. There are few grounds for believing that the Government's record on capital investment is anything less than excellent.
Of course, pit closures were considered under the "Plan for Coal"—
§ Mr. Alexander Eadie (Midlothian)
I am sure that the hon. Gentleman does not want to mislead the House. It was not the Conservative Government who provided for the sinking of Selby, it was the previous Labour Government.
§ Mr. Burt
The decision on Selby was made, as far as I am aware, by a Conservative Government.
The pit closures referred to by the right hon. Member for Barnsley, Central (Mr. Mason) were considered under "Plan for Coal" and it is pit closures which bring us to the Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order that we are discussing tonight. There is little use Labour Members banging the drum over pit closures with the problems that they bring for communities. There is no dispute among Conservative Members about the agony and distress caused by the closure of pits. In recent years hon. Members have become all too familiar with the problems of the loss of jobs and redundancy in a changing world. The Government did not invent the economic facts of life that say of any product that if it cannot be sold at a price acceptable to the market or if it is no longer demanded by the market production must inevitably decline or cease. Behind the despair and upset must be not the negative decision to retain antique work or production methods, but the positive decision to move into new industries and new technology.
The hand wringing and negative attitude of Labour Members, particularly the right hon. Member for Salford, East (Mr. Orme), would ring more true with us if their record on pit closures was not so stark and revealing. If one wants to close a pit, elect a Labour Government. No ring-side seats for Labour's active involvement in pit closures. The rate of closures since the war under Labour 399 has been greater than the rate under Conservative Governments. It is about time, therefore, that the hand wringing stopped.
The keeping open of uneconomic pits sabotages the coal industry and ultimately destroys jobs because it makes the industry less viable and puts at risk the industry's considerable future. Short-term negative attitudes can lead only to long-term despair. There can be no argument, therefore, that the Government are not being generous to the coal industry. There is no argument on investment, on miners' wages or in respect of commitment by the Government, as demonstrated by their support for new ventures in the industry.
Before considering the terms of the orders, it is worth looking into the second major argument against them, which is that the Government are too generous to the industry. Again, short-term attitudes directed solely to the current price of coal and to the consideration that imported coal might be cheaper in the short run, ignore the long-term effects of a rundown in the industry.
A decade ago, the energy crisis was on everybody's mind. There have been tremendous changes in energy consumption in western Europe in the last decade, forced by the energy crisis. Coal production, in common with other energy sources, has suffered from the world recession. Conservation measures have produced the effect in Europe of a decoupling of economic growth and energy consumption in that whereas between 1973 and 1982, GDP in the European Community rose by 9 per cent., energy consumption fell by a commensurate amount.
However, that will not continue for long, and with economic growth continuing, the energy demand will grow. We are only too well aware that our present major sources of fuel are finite and that some are coming to an end more quickly than others. But again, coal reserves are considerable and despite the present drop in the market, the demand for coal is likely to grow.
In giving evidence to the House of Lords Select Committee on the European Community coal policy, Mr. Karl Heinz Reichert, head of the coal directorate of the European Commission, noted that although European demand would rise by the year 2000 to about 500 million tonnes, the domestic level of production in the Community was likely to stay the same but that there would be a greater reliance on imports. Imports are necessary because, as Mr. Reichert noted:the coal industry of the Community was not successful or was unable to fight its competitors.So much for those who would like to see European-style subsidies brought into the coal industry here. The Community has been unable to compete with the more easily extractable coal imported into the Community.
The Select Committee reported that the proportion of Community coal consumed in 1982, at 70 per cent., was much less than that consumed in 1973, at 90 per cent. The inherent sickness of the European coal industry was summed up in the sentence:production costs, inflated by keeping open quite uneconomic pits, have been too high for effective competition, despite subsidies paid by Community Governments to their coal industries.Will the European coal industry be able to fight off the demand and pressure of imports? The role of the British coal industry can be clearly made out. It could advance and prosper so long as it makes itself more economic by 400 shedding the uneconomic pits that at present are raising the domestic price of coal to a value that makes it unsellable in the Community.
Those who argue that the coal industry has no future and who believe that it is pointless being generous towards it should think again. There is a European market for coal and it will grow as other energy sources dwindle But it is not an automatic market. If coal is to be sold in the Community, it must sell at a good price, at a price that can be achieved only by following the rationalisation process instituted by the chairman of the National Coal Board.
If that is done, and if investment is there from Government, there will be a coal industry of which the country can be proud and which will bring the nation great benefit in the future. What matters in energy is the long term, and to criticise the Government for their generosity now, and run the risk of ruining the coal industry for the future, must be unacceptable.
The success of the previous redundancy payments scheme was obvious from the number of people who wished to take it up and saw benefits in its generous terms. That is one of the reasons behind the increase in the past year in the numbers taking redudancy from an expected 10,500 to almost 20,000. The scheme's success was evidenced also by the not inconsiderable feat, until recently, of the painless and quite reasonable way in which the manpower reductions were achieved. No miners have been made compulsorily redundant. Surely, it is right to reward with generous terms those who have given a lifetime of service to the industry to enable them, should they wish, to employ the skills they have picked up over the years in new and different ventures. It is right also to reward those who have given a lifetime of service to the industry with a chance of secure retirement.
A social consideration must be taken into account in considering the effect of closures and redundancies on mining communities, and that is what the scheme does. Accordingly, in view of the changes in the pits and the composition of manpower in the mining industry, it is now necessary to safeguard and promote the considerable future that coal may have by offering these terms. It is important for the Government to be seen to offer these generous terms now to reduce the risk of compulsory redundancies in the future. The industry has a good record in that regard, and the terms offered in the order cannot be seen as other than generous.
Especially welcome are the extensions announced about the breaks in service, which reflect the Government's good faith towards the industry. I well remember the debates on these points in Committee on the Coal Industry Bill last autumn.
The present scheme's success has been evidenced in the facts of no compulsory redundancies and the number of miners taking advantage and making use of the scheme's terms. The new scheme will, no doubt, be taken up with equal readiness. In extending the scheme to a lower age group, the Government are only sensibly taking note of the current trends in the industry and the fact that, as closures continue, younger men are involved in them. A generous, understanding and sympathetic scheme is surely in the long-term interests of the mining industry.
It is clear that the coal industry faces a difficult time. Assailed by those who claim we spend too much and by those who claim we spend too little, the Government must steer a middle course, bearing in mind not only the important role that coal may need to play in the future but 401 the necessity of securing that future by taking the right measures now for the good of the industry in the long term. Those worried by energy prices and fuel costs for the old should look at the state of the coal industry and consider the effect on those fuel prices of an efficient and well-run coal industry.
Those who demand a larger slice of the market for coal in the future, both domestically and in the European Community, had better wake up to the fact that the rest of the world does not owe the British coal industry a living, and that only by putting its house in order will the coal industry have a chance to survive in the future and to provide any benefits to those who work in it and those who rely upon it for their energy.
Those who say that the coal industry has no future had better take heed of the continuing energy crisis and the difficulties the world is experiencing in providing safely and satisfactorily the new fuels for the future. It is necessary for a prudent country to continue to rely on a diversity of fuel supplies.
The orders are clear evidence of the Government's understanding of, sympathy for and generosity towards the mining industry. The Government have proved their commitment to the industry in the past, they are proving their commitment now, and they have demonstrated at Asfordby their commitment for the future. The world energy position proves the need for a vibrant, economic and efficient coal industry. The country, through its economic regrowth and regeneration, will prove the need for a continuing demand for coal supplies and energy. It remains only for some of those in the coal mining industry to prove to others that they recognise the need for change to be part of a future in which everyone wants them to share.
§ Mr. Alexander Eadie (Midlothian)
I am grateful to the hon. Member for Bury, North (Mr. Burt) for, as we would say in the mining industry, he is good for toasting bread. It seems that he is trying to argue that the Conservative Government were responsible for the sinking of the Selby coalfield because it was the Secretary of State who made the announcement. It is rather strange that a Government can announce a sinking when they have not spent a penny on the project and when their spokesmen have not visited the site. I went to the Selby site. I went to Gascogne Wood and I discussed with mining engineers whether it would be possible to deal with potential water problems. It was my right hon. Friend the Member for Barnsley, Central (Mr. Mason) who cut the first sod at Selby. If the Secretary of State is to persist in the argument that he was responsible for sinking the Selby coalfield—
§ Mr. Eadie
It does. It is very important. The Government cannot accept responsibility for Ashford, for Ashford is in the Vale of Belvoir. In fact, the Government reduced the Vale of Belvoir project by one third. There should have been three pits and the National Coal Board spent about £10 million or £11 million on a development plan on that basis. It was the Government who destroyed that concept, and that decision will have economic consequences in future. Let us put the lie to the mythology 402 that it was the Government who were responsible for sinking the Selby coalfield. Let us not try to deceive the people. Let us be factual and honest.
I think that the Minister will agree that he will be able to take the orders through the House without even breaking sweat. It would be foolish if the House were to say that the improvement financially will not be beneficial. We must welcome these measures, especially when we take account of the concessionary coal. The Minister has an easy task this evening. Of course, the contents of the orders do not constitute an announcement of new Government policy. The Government have aided the NCB in the propaganda war over the dispute in the mining industry and some of the terms of the orders were released to the press during one weekend.
Some of those who will be the subject of the orders will be confronted with early retirement and not merely reundancy. That being so, I think that the House will endorse the principle that we should treat them generously. I welcome the orders, but there is a reason for their introduction. We would be heartless if we did not say "Good luck" to those who are past the age of 50, who have worked in the industry since 14 or 15 and who are to collect redundancy payments. The expectancy of life in the mining industry can hardly be said to be normal.
The Government are introducing the orders in collaboration with the NCB and in conjunction with its policy, because they know that there will not be jobs for those who are engaged in the mining industry. The average age of those in the industry is 37 and the Government have introduced the orders because they have been told that the NCB's proposed pit closure plan will mean that 36-year-old and 37-year-old miners will be sent down the road. In many areas the job expectancy of miners will be practically nil for the rest of their lives. What a waste of resources. We shall be saying to people in their thirties, "We shall be rather generous with redundancy payments but your prospects of employment are nil." We shall be talking to those of 37 or more about early retirement and not redundancy payments. That is a scandal.
The Minister mentioned the sums involved. We should be foolish if we did not recognise that substantial sums are involved. If the money is available, the Government should be thinking about early retirement in the mining industry. No miner over 55 should be asked to continue working underground. I say that with feeling. Some of my relatives are working in the mining industry. At 58 or 59 years of age they still work in that industry.
We have a responsibility to examine the costs. We are in a debating chamber. We are entitled to ask how we can deal with costs. I have a number of suggestions to make. We can deal with costs and save taxpayers' money. The Government could intervene and bring an end to the industrial dispute in the mining industry. Whatever one says, the dispute will be costly for the ratepayer. The ratepayers will be involved in the cost of picketing.
Mr. McGregor deceived the Government. He deceived Parliament and the people. He and Ministers told us that a mining dispute would have little impact on the life of the country. I have experienced many industrial disputes. I was intimately involved in the 1972 and 1974 disputes. The present havoc is worse than it was in 1972. If I were a member of the Government, I should be concerned about that. The Government might be able to save money. They should intervene and bring an end to this industrial dispute.
§ Mr. Eadie
I shall make my speech in my own way. I shall not give way—[Interruption.] If I have the permission of the House, I shall try to argue my case fairly, in my own way.
I shall illustrate why the Government are incapable of intervening. I have shown how strength was miscalculated and how the Government and nation were deceived. Mr. MacGregor came to Scotland last weekend. On the radio he said that the problem was that the NCB had been too honest with the miners. That was an unfortunate remark. It would have been better if he had concentrated on Scotland, which has had six pit closures in the last 15 months. About 3,000 jobs have been lost. Two pit closures are the subject of inquiry. We have called for a further inquiry into the management and administration of the NCB in Scotland. Conciliation has been thrown out of the window. All that we have is confrontation. If it is the aim of the chairman, Mr. MacGregor, to pursue a police of confrontation, he will lead the Government to disaster, as well as the industry and the nation. The Government must intervene.
I shall give another example. Yesterday Mr. Edwards, the marketing director made a statement on the radio. He was challenged about domestic coal. He said that there was no problem, and that people must realise that winter is ending and we shall soon be into summer. It may be all right for a Hobart house bureaucrat to say that when he is enjoying the climate surrounding Hobart house. However, if he goes further north, he will discover that we get snow in Scotland in May and even in June. What a foolish statement for anyone to make. He tried to redress it. In the evening he was on television, saying that South African coal was being burnt at the NUM headquarters in Sheffield. That gives me a clue to how we could save money for the taxpayer.
§ Mr. Eadie
I hope that hon. Members will bear with me for a moment. As I continue with my speech, perhaps the hon. Gentleman will understand why that could be true, if he is prepared to listen instead of barking.
I understand that the hon. Member for Berwick-upon-Tweed (Mr. Beith) is a good European. I tell him that 73 per cent. of South African coal is exported to the EEC. Most of it lands at Rotterdam. We import 4 million tonnes of coal. Much of it comes from Rotterdam. One never knows whether it is Polish, American or South African coal. It is possible that the coal at Sheffield was South African.
If we had one quarter of the export market in Britain, we would be able to provide 10,000 more mining jobs. That would benefit us financially by £175 million. Therefore, where is the problem of getting rid of the surplus demand of 4 million tonnes, as Mr. MacGregor tells us?
There is another good reason for not importing South African coal. No Government should be associated with South Africa and its policies. How do the South Africans mine coal?
§ Mr. Hickmet
On a point of order, Mr. Deputy Speaker. What have the mining conditions in South Africa and methods of extraction to do with the orders?
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
Order. Coal imports are within the scope of the debate. Interruptions prolong speeches, and many hon. Members, with good reason, want to catch my eye.
§ Mr. Eadie
I was explaining how the labour force mining coal in South Africa was trained. I explained that it was gathered from the tribes, who all speak different languages. The first thing that the mining companies have to do is to teach them a common language. It is no joke, by the way. If they pass that, they go on to the next stage, which is shovelling coal to the beat of a gong. If they pass that and are physically strong enough, they go on to the next stage, which is working coal in simulated conditions of the tremendous heat underground. We should not treat dogs in that way. They are allowed to work in the industry only for two or three years. After that time they are sent back to their tribes, probably with their health ruined. That is what happens under apartheid. We should not support the importation of coal from South Africa, either into this country or into the EEC.
My final suggestion would save money, and I hope that—perhaps after the dispute is over—the Government will consider it seriously. The system of conciliation procedures in relation to pit closures has manifestly collapsed. One is entitled under the conciliation and consultation procedure to have a meeting or an inquiry to decide whether a pit should be closed, but one does not go to an independent body—one goes to Hobart house. Hobart house acts as the judge and the executioner, and makes the decision. Is that in the interests of industrial justice?
In the past the system may have worked well, but one of Mr. MacGregor's great contributions since he became chairman has been to destroy it. The procedure needs to be reconsidered. No body, private or public, should be allowed to act as judge and executioner to decide whether one of its undertakings should close or remain open.
I hope that, despite the laughter and the guffaws from Conservative Members, it will be recognised that this is a serious debate. The consequences for the nation could be very serious. I hope that, even if nothing else emerges from the debate, the Government will take heed of what is said by my hon. Friends. I hope that they will embark on negotiations with the National Union of Mineworkers and put at the top of the agenda the need for a policy of conciliation rather than confrontation. If they do so, we shall have a successful industry which will benefit both the miners and the nation.
§ Mr. Richard Alexander (Newark)
In deference to your wishes, Mr. Deputy Speaker, and to the hon. Members who still wish to speak, I shall be brief.
It is just 20 days since the House debated and approved a Supplementary Estimate for the coal industry in the sum of £289 million. Tonight we are increasing the pension provision, and the concessionary coal arrangements for pensioners. The coal industry has had a very good deal 405 from the Conservative Government in their stewardship of energy since 1979. We are now investing £800 million a year in the industry, or £2 million a day, or £60 a week for every man in the industry. Yet the orders are being debated against a background of unrest in the industry such as we have not seen for 10 years or so. It is being stirred up in some quarters as a crusade against the Government, but most miners realise that strike action is against both their present and their future interests.
I listened with interest to the comments of the hon. Member for Midlothian (Mr. Eadie). According to him, the whole problem is the fault of Mr. MacGregor and of my right hon. Friend. He totally refused to use the word "ballot". That word has not been uttered today by any hon. Gentleman on the Labour Benches. The scandal is that the leadership of the NUM will not allow its members to have a say in their industrial future. Who, in the country and parliament, speaks for the coal miner who wants a ballot and to work? They are not to be found on Opposition Benches. It is Conservative Members with mining constituencies who speak up for the right to work. This side of the Chamber is the bastion of democracy in the coal industry.
The orders reinforce the fact that Conservative Government since 1979 has been good for the mining industry. It has been good on pay, on redundancies and on investment. Conservative Government is good in all of the terms which are of interest to the miner. The Government have given a good deal. Moreover, the Conservative Government are good about ensuring a man's right to work if he wishes to do so. It is the Opposition who have the poor record on closing pits and redundancies and it is they who are representative of the undemocratic element in the coal industry, which does not want the present dispute put to the vote. The mining industry will continue to thrive under a Conservative Government.
§ Mr. A. J. Beith (Berwick-upon-Tweed)
I welcome the redundancy payments order. When it was first announced it met criticism from two quite different quarters. One comprised those who said—they included people in the NUM and, I suspect, in the Labour party—that it was a process of selling jobs. I heard that criticism levelled against people who have accepted provision under the scheme. As has been said, that is an unfair way in which to speak of people in the industry who are fully entitled to take advantage of such schemes, which I believe are an essential part of the modernisation and change that must occur. I understand the resentment felt by people who have been criticised in that way. Some of my constituents have been criticised by their union or others for accepting provisions to which they are fully entitled after long years of service in the industry.
The second area of criticism came from people outside the industry who asked why they could not have a similarly generous provision. That feeling is strong in other industries and especially in other parts of the coal industry. My constituents often tell me of people who work in the opencast section of the coal industry which works on an area and then moves on to another. Consequently there are many job losses and redundancies in it. People in that section of the industry are envious of their deep-mining colleagues who get the benefit of schemes such as we are 406 discussing. Moreover, they examine them and realise that chauffeurs, commissionaires, canteen manageresses and many others are included in the miners' scheme. I understand why but that leads to criticism in almost identical industries.
Despite those criticisms, I believe that the scheme is necessary. However, the necessary process of modernisation is not going at all well and to say that the industry is thriving is to be far from the truth. These orders should be part of a positive programme to put the industry on its feet but, for a variety of reasons, they do not look like that.
Serious mistakes have been made by several of the parties involved in trying to put the industry right. There has been a serious mishandling of the situation by the NCB in the accelerated closure programme and in the handling of certain closures. Many hon. Members have had experience of the properly conducted process. When a closure has to be considered because of the nature of reserves at a pit, consultations take place and there is a full review. In a number of recent instances, that has not happened.
Some serious mistakes have been made by the Government. One was the appointment of Mr. MacGregor as chairman of the board. There was no way in which he could win the confidence of the industry, given his age and reputation. That appointment was a mistake. The Government also persist in undermining confidence in the future of the industry by threatening the areas where the future is most at risk with the expansion of nuclear power. In my constituency, the Government threaten to put a nuclear power station next to a coalfield and a coal-fired power station. The decision at Sizewell to allow the nuclear industry to go ahead with some purchasing before the inquiry has been completed further inflames the fears of those in the mining industry.
The NUM's leadership has manifestly made some profound mistakes. I cannot imagine what good the present dispute is supposed to be doing to future prospects or confidence in the industry. The television pictures that we have seen have done immeasurable harm to the industry and caused deep anxiety and embarrassment to many miners.
A trade union with a democratic constitution and tradition is being subverted from the top by people who do not want the dispute to go to a ballot. I have heard it argued in the House that there would be a majority in favour of a strike, but the leadership will not allow a ballot to take place.
§ Mr. Nellist
Is the hon. Gentleman aware that in Yorkshire, for example, they have had ballots and 86 per cent. have favoured industrial action if pits are threatened with closure?
§ Mr. Beith
It is obvious that in some areas the men would vote for a strike, but that does not give them the right to go to other areas and physically stop people going to work and prevent them from having a ballot. An opportunity to vote should be available for every miner in the coal industry—just as the constitution of the NUM provides. If there is to be a national strike, there must be a national ballot and a 55 per cent. majority is required. Those provisions have not been exercised and the leaders of the union do not want to exercise them because they are frightened that they will not win the ballot. They are frightened of exercising democracy in the industry. They 407 are giving that industry a bad name and many miners deeply resent what is happening. They can see how much harm it is doing to the industry. The mistakes made in those three quarters are doing nothing to promote the good of the industry or to ensure that modernisation takes place.
Some Labour Members seem to imply that if a Labour Government were in power, not a single pit would be closed. The record shows that that has never been the case. We must face reality. There will be closures and there must be expansion in areas where reserves can be won economically. We want to see a commitment to do that, but the prospects for that are being undermined by the mistakes that are being made and we shall pay for them in the future.
§ Mr. Richard Ottaway (Nottingham, North)
I do not have great experience of energy matters and I am not an expert on the coal industry, but I represent people in Nottingham who are affected by the issues that we are debating and by the crisis in the coal mining industry.
Like other hon. Members, I welcome the orders, but they must be considered in the context of a decline in coal mining since 1947. At that time, there were 1,000 pits and now we have fewer than 200. There is no doubt that we are in a crisis. For how long can we go on subsidising the coal industry as we have been? We have been putting in £2.75 million a day, but the finances of the coal industry are in a serious state. The old, uneconomic pits are draining away all the industry's lifeblood. There are about 38 pits open in Warwickshire, Leicestershire and Nottinghamshire, but they are producing 25 per cent. of the nations coal. That shows as well as anything which are the inefficient and which are the efficient pits.
The main issue being discussed tonight is redundancy. The industry has sustained heavy losses. It is clear that it is worthwhile to increase the redundancy payments for workers who have spent their lives down pits. For those hon. Members who believe that the redundancy payments are too high, I point out tht if we do not have them, we shall go on paying out £2.75 million a day until the cows come home.
The timing of this is good. One of the factors that has not been noticed when we consider the recovery and the levels of unemployment is the number of people who are leaving the job register every month to go into employment. Between 1968 and 1979, the number dropped from 420,000 a month to 380,000. That was the recipe for economic paralysis that we were facing in 1979. Now the figure is up to over 460,000 a month, so if people are having to take redundancy payments they will have the money behind them, and now is as good a time as any to make a move.
There is a pay offer of 5.2 per cent. on the table. It was not accepted by the leadership of the NUM, without a ballot, and there was then an overtime ban, which has lost the miners nearly £1,000 each to date. In Nottingham, the men were dismayed that a strike over pit closures was then called without a ballot. I am pleased that in the ballot that was held in Nottinghamshire the result was not to strike. That shows the good sense of the people who live in Nottingham. That decision in understandable. We are facing a world surplus of coal, and what is the point in producing coal at £89 a tonne from inefficient pits? We have to fight in this world—we are in an economic war. 408 To carry on with such subsidies for coal does not make sense. This is an attempt to make the coal industry profitable.
People both inside the House and outside have criticised the policing of the picket lines in Nottinghamshire. They say that the police are being too hard. I and the people of Nottinghamshire are grateful for that police activity. The only thing that the critics can say is that the police are being too hard, but that is one-sided criticism. All that the police are doing is the job that they have been asked to do. I remind the Yorkshire miners that by coming to Nottinghamshire they are in contempt of court, and their activities are unlawful. Instead of criticising the police, the critics should look to the NUM leadership. My constituents who work down the pits want a national ballot. The NUM should be giving everybody a say.
The coal industry faces a number of challenges. The Conservative party has shown that it has a clear commitment to the future of the industry. As my hon. Friend the Member for Newark (Mr. Alexander) said, the money that is being invested is a clear sign of our commitment. There must be increased production and demand.
§ Mr. Ottaway
If Opposition Members want to see increased production, they should look at Japan which is having a recovery from the world recession, with demand up by approximately 5 per cent. We want to see exports up, and imports down.
If we carry on behaving in the way that we are now, our customers will lose confidence. Regular established customers outside the country and in the country will lose confidence in the coal industry. The introduction of measures such as these orders will stabilise the situation so that we can put the coal industry on an even keel.
§ 12 midnight
§ Mr. Dennis Skinner (Bolsover)
The hon. member for Nottingham, North (Mr. Ottaway) raised the question of the police. I have had a telphone call from one of my constituents whose husband has been locked up in Derby police station for 12 hours. That woman was in tears. Her husband has done nothing wrong, except to take part in peaceful picketing. Similar examples can be cited from the Labour Benches again and again, and I hope that they will be.
The orders are all about sacking more miners. The Government can dress them up in any language they like, but the orders are about sacking more miners. This is all part of the "rule of fear" philosphy of the Government, to make sure that more and more people are added to the dole queue so that there are enough people outside fighting for the jobs of those who manage to hang on. The Tory Government have carried out that philosophy from day one.
The man who ought to be getting the sack, apart from all hon. Gentlemen on the Tory Front Bench, is MacGregor. Not only has he smashed the coal industry, he has smashed the steel industry, and he left the Amax in America in one hell of a mess. In March 1982, according to the Financial Times, MacGregor left Amax with a deficit of $390 million, and, according to most informed opinion, he has appointed all the people who were involved in bringing about that deficit. This 409 Government are allowing MacGregor to butcher the coal mining industry when it is known very well that his record is one of dealing with nothing but the short term.
I do not welcome the orders. As my hon. Friend the Member for Midlothian (Mr. Eadie) said, we know that they are all wrapped up with the objective of throwing miners on to the scrapheap. This is what the Government have done in countless industries throughout a five-year period—steel, boot and shoe, textiles, and engineering, in the so-called prosperous midlands. The Government did it with flexible rostering in the railways, which was supposed to produce a more flexible rostering in the railway system, but look what happened. It ended up costing them even more money.
The NGA was another example where the Government joined with Eddie Shah to throw people out of work. Eddie Shah had a job at Granada Television, he got mixed up in a little bit of chicanery, and then he disappeared under a cloud. I am told that he was using the television cameras to look after some of his friends, and that is another story that should have come out at the time. But the police and the Tory Government were not hounding Eddie Shah about breaking the law. The Government are using the police to hound the picketing miners on strike in the coalfields, a majority of whom have been on strike from day one. As for all the talk about the minority, the minority has been at work since the very first day that the Yorkshire coalfield came out on strike. There has been a majority of pits on strike from day one. Those people who continually call for a national ballot are making the preposterous suggestion that the minority should tell the majority what they must do.
§ Mr. Skinner
There will be a ballot when the Tory party chairman faces a ballot for the job that got him an extra £5,000. We will have a ballot when the Tories start practising a little bit of democracy. That is when there will be a ballot, and not until then.
Then there is the question of the closures. Not only will the orders add to the amount of money that the taxpayer has to contribute, but it has already been calculated that the 70,000 redundancies over a period of 10 years will cost the taxpayer £4,300 million. To keep those 70,000 people in jobs, the taxpayer could get away with paying only £2,000 million.
The Government argue in favour of shutting uneconomic pits. I do not know whether Tory Members understand, as my hon. Friends understand, that uneconomic pits vary from year to year. We could examine the records of uneconomic pits in Lancashire, Scotland, south Wales, Yorkshire and Nottinghamshire in one year only to find that in the following year they have moved from being in the red to being in the black. They might have found some decent strata. In many cases, the uneconomic pits that the Government want to close have extremely rosy prospects. My hon. Friends could cite countless examples of pits that have moved from the red to the black in a short time. [HON. MEMBERS: "Name them."] I can name some in my constituency — Shirebrook, Whitwell, Warsop, Arkwright and Renishaw. All those have been in the red but then come into the black.
§ Mr. Allen McKay (Barnsley, West and Penistone)
Does my hon. Friend realise that not a pit, but a whole coalfield in the Barnsley area, was once scheduled for closure? Next year it will make £21 million profit.
§ Mr. Skinner
That clearly exemplifies my point. Cortonwood has provided the flashpoint.
Tory Members have trotted out figures about which Government closed the most pits. Before I came to the House I marched against the Labour Government's plans to close pits. I remember the big rally in 1967 at Central Hall. I was in the coalfield before the Tories left office in 1964. About 300 pits were shut during the 13 wasted years of the Tory Government. Pits were closed in Durham and Scotland. Ten pits were closed around Clay Cross in five years. Almost every one was closed by a Tory Government. If Tory Members want to bandy about figures, they should go back before 1964 to do their calculations.
It is proposed to close pits that have had massive investment. At Polmaise, £15 million of taxpayers' money was spent—but then MacGregor came along with his short-term policy and all the money invested to produce good, economic coal has been wasted. He put the lid on it.
People ask what Britain will do when the oil runs out and gas begins to taper off. It is madness to close pits when, even on the most conservative estimate, there are 300 years of coal beneath the ground. Some believe that the figure is even greater. Oil will begin to run out completely after 1986–87, and North sea gas has reserves for only 14 years. Yet pits are to be closed. When a lid is put on a pit, in most cases the coal is sterilised. Some can be mined by the opencast method, but the machines used will not go down 3,000 feet whatever the technological developments.
§ Mr. Jack Thompson (Wansbeck)
There are coal reserves under the North sea that will be sterilised for the same reason.
§ Mr. Skinner
No opencast machines can get hold of that coal. We are talking about 4 sterilising reserves of which any western economy would be proud. Countless countries in the Common Market, in the east and in the west — including Japan — would like just half the reserves of Britain. Yet the Tory Government will sterilise those reserves for ever and a day. We shall be short of energy as a result.
I want to say a word about subsidies, because the Tory Government are always talking about how much support they give to the mining industry. Indeed, £366 million had to go in interest charges in 1982. That will be around £400 million in the 1983 figures, which are not yet out. There is £200 million for stocking coal. Is that going into the industry? It goes to the banks. They get their fair share.
Then there is the question of marginal pits. The Government believe that it is right and proper to provide £200 million in subsidies for hill farming. This was announced in a statement made here by the Minister of Agriculture. We all agree that hill farming is a sensible idea. Let us get as much produce as we can from our land. It saves on imports. I do not quibble about that. However, if one gives aid to marginal areas of land, one should do the same thing for pits that are only temporarily uneconomic and marginal.
411 The same is true of North sea oil. The Government introduced a Bill not long ago, which we did not oppose, to give tax relief to areas of uneconomic oil reserves. That made sense. It is right to give some incentive to those companies—they were private companies, although of course they should have been public companies — to develop the marginal reserves of oil. If the Government believe that that is right for oil and agriculture, and many other areas, why do they not believe that it is right for the mining industry? They are only interested in redundancy and introducing orders such as the one we are debating.
§ Mr. Nellist
Does my hon. Friend consider it fit—[HON. MEMBERS: "Get on with it."] If we had a bit more quiet on the Government Benches I could get on. [Interruption.] When the fifth form over there has quietened down, I will get going. Does my hon. Friend think that in closing what they call uneconomic pits and developing super pits, this Government are looking three or four years ahead, to completing a programme of privatisation and returning those large-scale pits to their mates in the energy business, as they are now doing with Britoil and the oil reserves?
§ Mr. Skinner
I have no doubt that they are harbouring such thoughts in their mind. What has happened in the past few weeks has shown that there are bodies of men in the mining industry who are not prepared to be trampled on in the way that the Government have trampled on the millions of people that they have thrown on their industrial scrapheap. I am proud of the fact—
§ Mr. Skinner
No. The hon. Gentleman will only represent the oil companies. [HON. MEMBERS: "Vested interests."] I am proud of the fact that a majority of miners have decided to gird themselves to take on this Government and the butcher MacGregor.
§ Mr. Skinner
I believe that the answer for the mining industry does not lie in passing orders. They affect only the margin. They only follow on the devastation caused by this Government, MacGregor and the rest of them who work on their behalf. [HON. MEMBERS: "Get on with it."] What the miners have to do now in every coalfield is to get together and have a united strike. Instead of reducing the amount of coal at Scunthorpe, we shall have a succession of victories during the next fortnight, and give the Government the same medicine that we gave them in 1972 and 1974.
§ Mrs. Edwina Currie (Derbyshire, South)
It is probably a minority view that the debate is not about the current dispute. All that I wish to say about that is that it is a tragedy for the industry, for the union, for all the people and their families who are suffering, many of whom are my constituents. They want a national ballot and on their behalf that is what I call for. If the right hon. Member for Barnsley, Central (Mr. Mason), who clearly is not on the night shift today, thinks that he will find a better target in opencast mining, which also goes on in my constituency, he had better think again.
The orders before us are about long-term manpower planning, exactly what some hon. Members are calling for. It is the most generous redundancy scheme anywhere 412 in the country and, I suspect, one of the most generous in the world. I welcome it. I also welcome the fact that the Secretary of State has not declared exactly how many people he thinks will benefit from it, thereby perhaps avoiding the mistake of his right hon. Friend the Secretary of State for Social Services in the National Health Service. I am somewhat anxious that if we do achieve 20,000 takers under this scheme, which is the sort of figure that the coal industry is looking for, and if they are mainly men under 50 years of age, which, because of the age pattern of the industry they will have to be, and if they do qualify for the average figure of around £20,000, we are talking about £400 million. That is a very large sum which will have to be borne by the Exchequer. Many Labour Members' constituents will benefit from it and they should be jolly grateful.
The industry must contract its output. Most of what we have heard tonight has been about the problems of an extractive industry, about the need to open new mines and close old ones. It goes further than that. We have been producing too much coal for a long time. It is not just that it is too expensive. We have far too much of it and there are a number of reasons why that should be so. One is that we are still closely geared to the days when Britain depended on heavy industry —steel, steel, shipbuilding and railways. That is no longer the case. That is the industrial philosophy of the 1920s which created the great union that we see today and in which, unfortunately, the political thinking of many Labour Members seems to be rooted. Those industries have gone substantially to the new industrial nations of the Third world. That move has been inevitable. It was bound to happen sooner or later. Our new industries are no longer heavy users of resources, particularly of fuel, in the way that the old industries were.
We are still also geared up to the days of the profligate use of energy. Many houses, schools, buildings, even this place, were built in the days when all fuel was cheap. The pattern of fuel price increases in recent years has led to a tremendous move to conserve fuel. That pattern car only continue. If it does, we shall continue to be producing too much coal, even at the levels, I suspect, to which the NCB is working.
Even if we were to continue to produce the same amount of coal, improved technology in the pits, of which the hon. Member for Rother Valley (Mr. Barron), who is a fairly recent arrival from the pits, will be aware, must mean that we shall require fewer people to produce the same amount of coal. The miner of today, as my constituents never fail to remind me, is not a pick and shovel man, he is a highly skilled engineer, used to working fast in difficult and dangerous situations, handling computer controls and highly sophisticated equipment, and he is used to taking coal at breathtaking speed.
It was most interesting recently to be standing upright in a 10 ft high seam on a long wall mine watching £5 million of equipment taking 1,000 tonnes of coal a shift. Labour Members will have had similar experiences. More than 60 tonnes per man shift can be taken from long wall mining from walls over 600 ft long in midland coalfields. The miner who does that is doing something that was impossible 10 years ago and would have been an impossible dream to his father. Therefore, whatever we do in this industry the changing pattern of technology will demand that long-term manpower planning has to come.
413 I also challenge the notion that the movement towards redundancy on the present lines is so unwelcome. Early retirement has led to the formation of a substantial number of retired miners' clubs, and there are a number of them in my constituency. The secretary of one such club told me at a function which was attended by more than 300 people, "Ten years ago a club such as this could not have existed. Ten years ago, a miner crawled out of the pits at the age of 65 and dropped dead, and his concessionary coal was claimed by his widow. That no longer happens because they can take early retirement; the terms are generous and we are glad of that. This club is thriving." Several thousand people in my constituency are eligible to join such clubs. For many of them it is a welcome release.
For younger men, too, the opportunities are often bright. In the 1960s, many mines in south Derbyshire closed. The unemployment rate in my constituency is 6.7 per cent. The miners are welcome workers in other industries, particularly in high technology light engineering. Employers have told me that they seek to employ miners because they are able, hard working, reliable, safety conscious and like working hard for good money. That makes them a highly attractive workforce.
§ Mr. Jack Thompson
Is the hon. Lady aware that the original idea of redundancy payments was fair and proper in that it was to compensate a person for losing his job and to cover the period between the loss of one job and the finding of the next? That may still be the case in her constituency, with an unemployment rate of 6.7 per cent. In my constituency, with 18 per cent. unemployment, when somebody is made redundant that is the end of the story because there are no other jobs. Miners who were made redundant in my area received their redundancy, but it is now running out. Their redundancy of, say, £20,000 represented two and a half to three years' pay, but it is going and they are in the dole queues. Their chances of getting another job in the area are nil.
§ Mrs. Currie
About 20 years ago — certainly in 1966, when the present Lord George-Brown represented most of my constituency and had a majority of 18,000 —the same things were being said, and they proved to be false.
My answer to the hon. Member for Wansbeck (Mr. Thompson) is that I have a suggestion which, I hope, will be taken up. Hon. Members in all parts of the House should bear in mind that when pits close, as they are bound to do, we should all be better engaged in advising our constituents on how best to use their redundancy money. The greatest tragedy would be if their £20,000 went on Japanese videos and overseas holidays, which is likely to happen.
§ Mrs. Currie
Not only do I drive a Maestro, but I have a coal fire in my house, which is more than many Labour Members can say.
We would be better engaged in getting together, in those areas where there are difficulties, an advisory board composed of members of the local authorities, the NCB, local industry, the CBI and the banks, all of which have 414 good advice to offer. It would not need legislation, but the Government should take a lead and encourage such a move. In the south midlands area—I hope that other hon. Members will take this view—I would be willing to join hon. Members from both sides of the House in setting up such a group. I should like to see the £20,000 and £30,000 redundancy payments with which the miners will leave the pits being invested in the local area to provide a good strong, secure and diversified future for the neighbourhood.
The coal industry has a rosy future. As new mines develop and as old ones close, the price of coal will fall. Anything will sell if the price is right, and I believe that we shall become a net exporter rather than a net importer in years to come. That price change will, in my view, tip the scales against nuclear power. We shall win the argument against nuclear power, not just on environmental grounds—because coal makes a mess, too—but on cost grounds, which is more significant. The price of tha future is radical change in the present. A necessary prerequisite is acceptance of such change by the people in the industry. These orders will make that transition smoother and better for all involved.
§ Mr. Michael Welsh (Doncaster, North)
I shall be brief because a number of other hon. Members wish to participate in the debate.
I do not welcome the orders, but accept them—and those points are quite different. I accept the orders because the Government are determined to close pits, whether or not the miners like it. The Conservative party has a majority in the House, so it can implement the orders.
The orders will mean that the lads from closed pits will receive a bob or two. I am not criticising that measure. I would prefer the young men on the pits to fight hard to keep the pits open so that they can work rather than be thrown on the scrap heap, as will happen, as sure as God made little apples, when the orders are accepted.
The hon. Members for Nottingham, North (Mr. Ottaway) and for Newark (Mr. Alexander) referred to the Government's large investment in the industry. I do not dispute that. To where can the NCB go for money? It can go only to the Government. Before the Conservatives came into office, the NCB obtained a large sum from the EEC. Immediately the Conservatives were elected to office, the Chancellor of the Exchequer wrote to the EEC saying "No more borrowing for the Coal Board because if it borrows from you those funds will be part of the public sector borrowing". The Government do not allow the NCB to borrow on the open market. It is all very well to say that the Government of the day loan money to the coal board, but as a nationalised body, the NCB can borrow only from the Government by an Order in Council. We should get the facts right. The coal board has dearly paid interest. At times the NCB could have borrowed the money more cheaply.
The hon. Member for Nottingham, North referred to the duties of the police in Nottinghamshire. On Thursday, I was on the picket line. With respect, Mr. Deputy Speaker —I shall not go into the matter at great length, as that would not be right, and I shall accept any comment you make—there is a shadow of doubt, to put it mildly, that the police are carrying out their duties as they should. A number of them are going to extremes. They are not from Yorkshire, but from other areas. Conservative Members 415 should be careful when saying that they agree with everything the police do. On Thursday morning, I was terribly embarrassed to see a policeman smash-a car and window with a crowbar.
§ Mr. Welsh
I am sorry, Mr. Deputy Speaker. I thought that that would be a fair comment to make after the speech of the hon. Member for Nottingham, North.
The aim of the order is basically to encourage miners to accept unemployment. They should not do so. Instead, they should try to change the NCB's mind so that pits are kept open. The miners should show the NCB and the Government that the actions of the NUM are in the national interest. It has been repeatedly proved that even the closure of uneconomic pits is against the national interest. From this year, British oil supplies will decrease so that in four years there will be about 25 per cent. less available. That is equivalent to 42 million tonnes of coal.
From where will the country get energy if the Government continue to close pits? If energy supplies are obtained from abroad, a tremendous amount of unemployment, embarrassment and an intolerable balance of payments situation will be created. There is, in effect, only one shaft in Britain, and it is made up from all the individual shafts, and if a pit is closed the shaft is narrowed. Once that happens, it is impossible to extract more coal, irrespective of demand. Our oil and gas reserves are being depleted, but almost any form of energy can be produced from coal. That production can take place only if we own the coal and mine it. If we fail to do so, the consequences for the United Kingdom will be dreadful. Those who want to close pits are not considering the long-term national interest. The closure policy is based merely on short-term profit.
All Governments since the second world war have made the mistake of not giving sufficient support to the mining industry. The industry never demanded the market price for coal. If it had done so, it could have invested without borrowing. It did not demand that price because it thought that it was correct to keep the cost of living as low as possible. Later Governments of both major parties closed pits and, to the nation's embarrassment, depended on cheap oil. Everyone was happy when cheap oil arrived and pits were closed. When someone turned off the tap and reduced the supply of oil, it was necessary to mine more coal. If we close more pits, we shall embarrass the nation in the years to come when other energy reserves are depleted.
The only Government who worshipped the mining industry, looked after it and realised what coal meant to the nation were the war-time Government led by Winston Churchill. He realised that coal was vital and he would not allow any miners to join the army. He appreciated the nation's great need for coal. By and large, his was the only Administration that understood the extent of the benefit that coal could bring to the nation.
The NUM is acting in the nation's long-term interest. When it is striking or taking other industrial action, it is doing so to ensure that our children have a source of energy that will enable them to survive. That is a good, sound policy. I say to all those who are assembled in the Chamber—it is a full House for this time of night—that those who have the country's interests at heart should 416 support the Yorkshire area of the NUM in its fight to keep pits open and to protect our future energy supplies. It is a policy that will bring great opportunities to Britain.
§ Mr. Francis Maude (Warwickshire, North)
I shall take up some of the issues raised by the right hon. Member for Barnsley, Central (Mr. Mason), who has unfortunately disappeared from the Chamber. The right hon. Gentleman talked about the need to close certain sectors of the coal mining industry. He directed himself especially to opencast mining. He appeared to argue that because opencast mining yields cheap coal it should be closed to enable Britain to continue to produce more expensive deep-mined coal. That is one of the most remarkable pieces of logic that I have ever heard and I am not surprised that he has not stayed to hear it debated.
The right hon. Gentleman referred also to imports and the need for us to reduce them to protect the expensive deep-mined coal that is produced at home. We have a net surplus of coal. We export nearly twice as much coal as we import. We import only specialist coals that we cannot produce in sufficient quantity or at anywhere near a price that is realistic. When we are digging out of the ground specialist coal at well over twice the price at which it can be bought elsewhere that makes no sense. To suggest that we should cut imports to do that is to resort to the economics of the madhouse.
I wish to refer to some aspects of the present dispute in the mining industry. My constituency contains the whole of the Warwickshire coalfield which is, by and large, profitable and has a moderate work force. It was given the chance to decide its destiny in the last month and it voted by five or six to one to stay at work. The workers have stayed at work, by and large, in the face of appalling pressure and intimidation. Pickets from other parts of the country, who have no interest in the future of Warwickshire pits, have been there most days. Workers have been subjected to threats of damage and injury to themselves and their families. Because of their toughness, commonsense and dedication to their industry they have, in large part, remained at work.
The hon. Member for Bolsover (Mr. Skinner), in what I assume to be a passionate speech, made no mention of the ballot taken in north Derbyshire. That is not particularly surprising since that ballot decided, as have almost all similar ballots, that the miners want to carry on working. He seeks, as do leaders of the NUM, to deny members the chance to decide their own destiny. He will not be able to complain when, in due course, the NUM tears itself apart.
It makes no sense to continue producing coal that nobody wants to buy because its production cost is too high. We and the Opposition have the same aim. We want the British coal industry to produce coal at such a price that it can compete overseas, so that once again Britain can become a major coal exporting country. We take a different route to achieve that. We want to develop the coal industry so that we produce coal at below the price at which it can be sold. In that way we can corapete genuinely in the world market. The Opposition want to bring prices down to such a level, not by extra competitiveness, but by milking the taxpayer. They are the same people who complain about increases in electricity prices. They do not recognise that the price of electricity could be reduced substantially if the price of coal were not 417 kept at such an uncompetitive level. The people who complain about the high price of electricity want the subsidies to be kept high and the expensive pits to be continued. That makes no sense at all.
The aim of all hon. Members with commonsense and a genuine commitment to the future of the coal industry should be to get the average price of coal down—not by milking the taxpayer, but by closing uneconomic pits and developing profitable areas.
The south Warwickshire coalfield is potentially profitable. It is the most profitable in the country. When that is developed we shall be able to reduce the average price of coal from British coalfields substantially. That will enable us to become, once again, a major coal exporter. I look forward to that day because my right hon. and hon. Friends have a genuine commitment to the coal industry based on realism, common sense and an understanding of the economic facts of life. It is those facts of life that Opposition Members have wilfully failed to recognise in the debate.
We are debating one part of the necessary machinery to reach that end. It will be a painful process, but it must be done. The sooner it is done, the better.
§ Mr. Allen McKay (Barnsley, West and Penistone)
I should like to take up one or two points made by the hon. Member for Warwickshire, North (Mr. Maude). He and other hon. Members mentioned that my right hon. Friend the Member for Barnsley, Central (Mr. Mason) was not here. They have forgotten that he was the Secretary of State for Northern Ireland, and there are always problems about security. He had certain commitments, otherwise he would have been here.
I almost closed a coalfield, principally because it was uneconomic. However, it survived, and will make a substantial profit next year. Therefore, when people talk about economics in the coal industry, they should be careful. They should consider the repercussions of a colliery closure not only on the village but on the businesses in the village, as the effect can be devastating. There is also an effect on the economies of local authorities, because the area's rateable value goes down vastly when a colliery is closed. That makes one see why collieries should be kept open.
Such arguments remind me of what my old industrial relations officer said when a certain person was making a botch of colliery closures. I closed 20 collieries on behalf of the board, so I know exactly what that means, and the heatbreak that it causes. Closures should not be dealt with in the way they have been recently. That has caused many problems.
My old industrial relations officer said to that person, "I understand you have two degrees, lad." He replied, "Yes." The officer said, "Hang 'em behind the door. You work for the coal industry now, and will not need them here." We need not economics but sheer common sense. That is one of the problems in the coal industry.
The unions are committed to policies for the 1980s for an efficient and expanding coal industry. They want to retain the work force, and they want there to be more capital investment. This is no time to use short-term measures for short-term market situations because 418 eventually one will find oneself without a coal or energy industry. We could import coal, with everything that entails, but that is not the right course.
I refer to a colliery in the constituency of my hon. Friend the Member for Wentworth (Mr. Hardy). Cortonwood is on th borders of my constituency, and is a sister pit to the one in which I spent 20 years of my life. Some 116 of my constituents went to that colliery on the understanding that they would have at least five to six years' work, and then would be made redundant. They did not want to go to that colliery in the first place. They told me that they would prefer to be at another colliery at any time. They preferred not to work there because of the conditions. They were given that promise, and were happy with it. However, five weeks later they were told that the colliery was to close.
What caused that decision to be made? I know the area director well. He would not have made such a decision. He promised to keep Elsecar colliery open for five or six years. He said that it made such a contribution to the prosperity of the NCB that it deserved that five or six years' life. However, the decision to close Cortonwood was a completely different type of decision, taken only five or six weeks after my constituents went there. Why was it made? It is no use having a colliery review procedure that has stood the test of time if a boss in the NCB instructs the area directors immediately to close collieries without going through that procedure. That is what happened to Cortonwood colliery and why we have the problem now. It did not go through the review procedure or even start the first stage of it. It was a case of immediate, effective closure. That is why the area directors are incensed. That is why the NUM and the mineworkers are incensed. They are fighting for the jobs. They see what is happening under Mr. MacGregor.
If ever an industry needed confidence, the coal industry needs it now, and there is no confidence in the chairman of the NCB. We know what happened to the steel industry. Mr. MacGregor is recognised as a butcher. The Government should not have put a butcher in that job. There were enough people in the management of the mining industry who could have used the "softly, softly" approach — as Norman Siddall recommended — in conjunction with the unions. We would have ended up with an efficient mining industry that paid its way. It would have taken longer, but not much longer. Now, a climate of industrial relations which took 20 years to build up has been destroyed in five weeks.
Irrespective of feelings and ideology, a time has to come when action stops and talking starts. There must be a change in the present battle, and the Government must swallow their pride and bring about that change. Now is the time to take a hand in what is happening in the coalfields. If the Government do not do so, they will end up with bad industrial relations and a bad industry—an industry that they never envisaged. The time has come to take action before it is too late and the Government must swallow their pride and do it.
§ Mr. Richard Hickmet (Glanford and Scunthorpe)
I have given an undertaking to speak for only five minutes, and I shall try to keep to it. However, it is only right that when these orders are being debated hon. Members should realise the effect that the Yorkshire mineworkers' action 419 is having in my constituency, which includes the Scunthorpe plant, one of the five major integrated steel plants in the country.
I remind hon. Members that since 1981 there have been 11,000 redundancies at that plant. In addition to that, many people whose work is dependent upon that industry have lost their jobs, without the benefits of the redundancy payments that the steel workers receive.
Currently employed at Appleby Frodingham and associated works there are 6,800 people whose jobs are on the line, courtesy of Mr. Arthur Scargill. That is disgraceful. The Appleby Frodingham steelworks in my constituency is working at half time. It will be able to continue working for perhaps two or three weeks. After that, people will be laid off and the works will no longer be producing steel.
Hon. Members should realise the consequences of that. In the past three or four years, the British Steel Corporation has been through a process of rationalisation. It has been increasing its productivity and its competitiveness. For Appleby Frodingham, all of that is now at risk. If Appleby Frodingham stops producing steel, no steelworks in the country is secure. The works will have to let down its customers. If coal does not get into the plants the coke ovens will be damaged, the blast furnaces will be damaged, and Scunthorpe will die. That is a shame.
Arthur Scargill is mucking about in the High Court pretending to be a QC when he should be calling the national ballot that the moderate members of his executive have demanded. I do not accept that that man should condemn the people of my constituency to unemployment when he does not have the guts to face his own mineworkers. The policy of Arthur Scargill is selfish and is condemning my constituents and mineworkers to a policy of division, which fails to recognise realities.
My constituents will not get anything like the redundancy payments that Arthur Scargill's Yorkshire miners will get. They will have no choice about being made redundant. We have heard that no miner who does not want to be made redundant will be made redundant. That is not the case in my constituency where 6,800 jobs are on the line. Is the right hon. Member for Salford, East (Mr. Orme) in favour of a ballot of the membership of the NUM or not?
§ Mr. Terry Patchett (Barnsley, East)
I do not believe in wasting words and much of what I intended to say has been said. I never cease to be amazed by the apparent surprise of Conservative Members at circumstances in the industry. I believe that they have been designed and that these orders are part and parcel of that design. The pension scheme should be of the same quality as the redundancy payments scheme.
I question the origins of the scheme and the identity of its initiator. It is a useful weapon for Mr. MacGregor, with his plans to decimate the mining industry. I cannot help thinking that the scheme and much that is now happening were planned long ago. I cannot help thinking that these were the terms that were laid down by Macgregor in the protracted negotiations that took place before he took over the chairmanship of the National Coal Board to settle compensation for the firm that lost his services. I believe that the increase in redundancy payments was part of a careful Government plan to break the back of the NUM, 420 regardless of the nation's interests. The angling of the closure of Cortonwood that sparked off the present unrest was no accident.
I hope that the Government realise what a dangerous path they are treading. We might be getting close to a police state if my suspicions are right. If my fears are wrong, I challenge the Minister to tell us what was discussed at the negotiations on the employment of this man MacGregor. Were redundancy terms for miners a topic? To what extent is the Government's attitude anti-trade union and what will the Minister do? He must answer those questions as he must concede that it took quite a while to negotiate Mr. MacGregor's contract and the compensation for his American company. I refuse to accept that the talks concerned only Mr. MacGregor and his future. I believe that the quality of manager to be found in the British coalfields far exceeds that of Mr. MacGregor, but that his talents, which appeal to the Government, are more in line with their anti-trade union thinking.
§ Mr. Neil Hamilton (Tattoo)
Yesterday, I went to the Library—the hon. Member for Bolsover (Mr. Skinner) will know where that is — and took down from the shelves a volume of the statutes of 1946 and opened it at the Coal Industry Nationalisation Act 1946. I do not know whether there is a copy of that Act in the library of the Department of Energy or in Hobart house, but I recommend my hon. Friend the Minister to look at it once again, especially section 1 (4), which says:(4) The policy of the Board shall be directed to securing …The truth is that in 1981–82, far from balancing the books, the NCB lost £428 million, in 1982–83 it lost £485 million and this year it is set to lose a staggering £1.145 billion, all paid by the taxpayer. On top of that, we invest about £700 million or £800 million per annum.
- (c) that the revenues of the Board shall not be less than sufficient for meeting all their outgoings properly chargeable to revenue account…on an average of good and bad years."
What is the return on that investment? I tabled a question last year about investment in the coal industry and an interesting figure was revealed in the answer. The total capital stock of the NCB is £6.3 billion and the return is not the 8 per cent. that one would get from putting one's money in the bank or the Post Office. It is not even 5 per cent. It is minus 5.9 per cent. So not only is the NCB not balancing its books from year to year and producing a nil return on investment, but it is eating up the nation's capital year by year and impoverishing the rest of British industry.
The rest of British industry, which has to survive on its merits and not on annual handouts from the taxpayer, has to suffer the massive disadvantage of high electricity prices. The steel industry is being crucified partly because of electricity prices. Sir Walter Marshall, the chairman of BSC, has said that a 10 or 15 per cent. reduction in electricity prices could be made if the NCB obeyed the injunctions laid down in the statute that set it up.
The time has come for the rake's progress in the coal industry to stop. I have said that in various debates since I was first elected in June. It is stupendous that we should be asked month after month to add another £100 million here and another £200 million there to the NCB's losses and accumulated debts.
My hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet) pointed out that the unfortunate 421 workers in the steel industry, who are being put out of work partly by Arthur Scargill and his like, cannot benefit from the sort of scheme proposed in the order. Nor can the workers of Associated Octel, in my constituency, who are being put out of work by the Government's mistaken decision to phase out the lead additives in petrol.
It is remarkable that a 49-year-old man with 33 years service in the coal industry can leave with the massive total of £36,480. All that the workers in my constituency will receive on redundancy is their entitlement under the Employment Protection (Consolidation) Act 1978 and whatever private industry can pay them out of the profits that they have earned over the years. They cannot be paid out of losses that have been accumulated and charged to the taxpayer.
I regard the order with mixed feelings. The coal mining industry has regarded the taxpayer as a soft touch for too long, and Conservative Governments have been the softest touch of all in many ways. The time has come to stop that. No one disagrees with the need to provide compensation for miners who are made compulsorily redundant—no one could say that the scheme is not generous—and the cant and hypocrisy that we have heard from Labour Members misrepresent the situation.
The coal industry can look forward to a secure future if we get it producing coal at prices that make it competitive on world markets. The jobs of miners will always be on the line while the NCB is turning in massive losses year after year and depending on handouts from the taxpayer to stay in business.
The massive misallocation of resources and squandering of the nation's resources that have occurred in the coal industry since nationalisation have drunk the oil from the North sea. The tax revenues from the North sea have been poured down the coal mines. The time has come for that to stop.
I call on the Government to think about this problem for the future, and not be such a soft touch the next time. We must get the coal industry back into proper order, and the Government must ignore the siren voices on both sides of the House that say that we can ignore these massive losses, which are a weight around the neck of profitable private industry.
While I shall not be dividing the House, I regard these orders with less than equanimity. My hon. Friend the Minister should recognise, unlike my hon. Friend the Member for Bury, North (Mr. Burt), that some Conservative Members are apprehensive about the difficulties that this will cause to the rest of British industry, from which our wealth is created. I speak for those workers in my constituency who have always worked for profitable industry and paid the taxes to fund the losses of the coal industry. They are now being made unemployed, and have the galling experience of seeing the coal miners gobble up extra redundancy payments as well. I send the message from my constituency to my two hon. Friends on the Front Bench that we shall not stand for this for ever.
§ 1 am
§ Mr. Peter Hardy (Wentworth)
Many of the speeches this evening have referred to Cortonwood colliery in my constituency. I do not have time to defend that pit or any other in south Yorkshire, although they could be defended 422 admirably against the rather shallow judgment of the hon. Member for Tatton (Mr. Hamilton). Suffice it to say that I have appealed to the NCB to take a more intelligent attitude about Cortonwood, particularly because of its central position in the current dispute.
I suggested to Mr. MacGregor that if he wished to make a sensible contribution at this difficult time — the Minister will recall that I gave warnings about this a fortnight ago—he should withdraw the improper and unconstitutional decision to close Cortonwood, and put its future back on the table for negotiations. I have not suggested that the NCB should go into a surrendering rout in the face of the NUM workers, but I have suggested that there should be tri-partite consideration. As the circumstances surrounding the closure of this pit are highly unsatisfactory and questionable—although I do not have time to present the evidence that the Minister knows that I can produce—I hope that the Minister will pass on some message to the NCB that will bring the future of the colliery back into question.
I welcome any improvement in early retirement terms, but if we are to ease the path of the contraction of the industry by extremely large payments to those under 50 while introducing such suspect proposals as those that we have had from Mr. MacGregor recently, there will not be any of the peace in the industry that hon. Members on both sides of the House would like to see achieved.
§ 1.3 am
§ Mr. Orme
With the leave of the House, Mr. Deputy Speaker. My hon. Friend the Member for Wentworth (Mr. Hardy) has gone to the heart of the problem facing the mining industry. We heard the voice of the Institute of Directors, and that did not reflect the feeling of this debate, which has been a serious one about a serious issue. We want to see the end of the dispute as soon as possible, so the talking must start. We said to the Government that we want them to play a part in bringing the three sides together so that they can sit down and discuss the important issues.
We put it to the Conservative party that there are real alternatives, which are based on consultation, the shelving of the MacGregor proposals, and the ending of pit closures. Those are the proposals that I put forward to the Government. I hope that the Minister will address himself to those points, because they are central to the debate.
§ 1.5 am
§ Mr. Giles Shaw
With the leave of the House I shall reply to the debate, which has ranged over three hours, and over a considerable number of aspects of the present position in the mining industry, together with the orders under debate. I wish to deal briefly with two or three points before I come to the points made by the hon. Member for Wentworth (Mr. Hardy) and the right hon. Member for Salford, East (Mr. Orme).
The right hon. Member for Barnsley, Central (Mr. Mason) called for a cessation of imports, and of opencast production. Imports are now roughly at their 1979 level, namely, 4 million tonnes of coal in short supply here, and this is in no way a significant contribution to demand in this country. I remind my hon. Friend the Member for Derbyshire, South (Mrs. Currie) that we are a net exporter of coal, and that has been a significant change in the last few years.
423 I understand that the negotiating machinery is under strain at present, a point to which the hon. Member for Midlothian (Mr. Eadie) referred.
On the key question of Cortonwood, to which the hon. Member for Wentworth referred, whatever views may have been expressed about that pit, and the announcement thereon, I assure the House that the board is prepared to re-convene the colliery review meeting before any further steps are taken in that regard. So far as I understand it, the NUM has not responded to that view.
In connection with the Bogside, which in the last debate on the subject was of great concern to the hon. Member for Midlothian, there was to have been a special consultative meeting with the unions on 13 March which would have considered the possibility of mining the Bogside reserves from elsewhere in the Longannet complex. As the hon. Gentleman knows, it was not possible for that to take place, because of the present problems. I want to reassure him that the importance of the review procedure is well understood, and the importance of retaining its viability and its acceptability is equally fully understood.
The question before the House is in part the redundancy payments, and in part the fact that the redundancy schemes are part of the re-structuring process. My hon. Friends have made it clear how concerned they are at the scale of the payments, and that there has not yet been a significant improvement in the performance of the board. It must be of great concern to hon. Members on both sides of the House that the improvement in productivity in recent years should be sustained and increased. All that the board seeks to do at present is to get a better balance between what the market will take and what the industry can produce, and to do it by reducing the least profitable parts of the industry's network.
I have to remind the House that the absolute amount required for 1984–85 is a reduction in total volume of some 4 million tonnes. This spreads across the areas, but there are some where there is an increase, not a reduction, and there are five areas where significant profits are being made. The largest single reduction out of the 4 million tonnes required is 1.4 million tonnes, coming from the north-east. The north-east takes the largest reduction of volume, yet in that area, as the area director has made clear, the changes that are required to achieve that reduction have largely already taken place, and have been announced, so that there is no further change to be made which is not already known, and accepted, within the north-east.
In south Yorkshire, as we know, Cortonwood, about which an announcement was made earlier this year, is the only single pit, as I understand it, that will be closed in relation to the achievement of the target so far announced for south Yorkshire. I beg the House to understand that 424 there is a wide spread of the reductions, but, equally, there are many areas in the board's twelve areas which have a satisfactory rate of prospect of increasing their profits and their volumes.
The intention is to provide an industry which can achieve financial viability, not just for the sake of reducing the public sector borrowing requirement, although that would be a sufficient reason, but because it would satisfy the consumer in terms of the price of fuel. That is why my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet) was correct. Unless we can produce coal at a price at which the steel industry is prepared to buy, and with security of supply, we have no business whatever in viewing the coal industry with a view to investment.
We are determined to invest in the future of the industry, just as we are determined to invest in its restructuring so that it can be even more profitable than it has shown itself capable of being in certain areas in the past.
§ Mr. Lofthouse
The Minister said earlier that the order covered the continuity period for disabled mineworkers. The new clause that I withdrew during proceedings on the Coal Bill in 1983 concerned 37 miners who had been made redundant and lost out under the Contracts of Employment Act. Will they be compensated?
§ Mr. Shaw
I understand that they will be in relation to the ex gratia payments to which I referred in my opening remarks.
In the circumstances, the debate has been extremely good natured. I am appreciative of the way in which the House has handled the issues. I know how difficult it is for hon. Members coming from areas where there is genuine industrial difficulties. If the debate has achieved a single thread, it must be that there is great concern on both sides of the House that the industry should recover its poise to become a major producer of energy. It is part of the Government's intention that, by backing the industry with the financial provision that we have made, there can be no question of our commitment to the future viability of the industry. I beg the House to approve the order.
§ Question put and agreed to.
That the draft Mineworkers' Pension Scheme (Limit on Contributions) Order 1984, which was laid before this House on 7th March, be approved.
That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1984, which was laid before this House on 9th March, be approved.—[Mr. Giles Shaw.]