Imported Coal (Hansard, 14 December 1987)

§ 1. Mr. Barron
To ask the Secretary of State for Energy when he last met the chairman of British Coal to discuss the cost of imported coal; and if he will make a statement.

§ The Secretary of State for Energy (Mr. Cecil Parkinson)
I meet the chairman of British Coal regularly to discuss all aspects of the coal industry.

§ Mr. Barron
When the Secretary of State next meets the chairman, will he discuss the current comparison between the price of British and international coal? Will he take into account the present level of international stocks as they reflect the investment in 1973, after the oil crisis, and how that price reflects the current weakness of the dollar, which is causing great concern when compared with European currencies? Will he also consider the fact that if we turned to the international market, international prices would rise immediately as a result? Will the Secretary of State answer the question raised by the chairman of British Coal recently as to whether we are to close more pits against such an uncertain background? Such closures are totally unjustified.

§ Mr. Parkinson
No. The Government have made it clear, through what they have said and in financial support for the industry, that we want a strong, viable, competitive British coal industry. It may surprise the hon. Gentleman to learn that I agree with him that it is misleading to consider the marginal cost of coal in international markets and to state that 80 million tonnes could be purchased at that price. If the Central Electricity Generating Board were to enter the market for that quantity of coal, the price would be bound to rise.

§ Sir Trevor Skeet
Does my right hon. Friend agree that metallurgical coke is required for the United Kingdom steel industry and should be imported? Considering the true figures for importation prices, does my right hon. Friend agree that the Chinese, the Colombians, the South Africans and the Australians can all undercut us in real prices? We must face that situation.

§ Mr. Parkinson
I have said that we must have a competitive coal industry. Equally, I agree with my hon. Friend that we do not produce enough of certain grades of coal—for example, anthracite and coking coal. That 756 is one reason why British Coal has proposals to invest at Margam. To make that investment pay there must be flexible working and a new approach to working arrangements. Without those we will have to continue to import the coking coal that we could produce in this country.

§ Mr. Benn
Has it occurred to the Secretary of State that the policy of importing coal — including some from South Africa—of further pit closures and of the selling of profitable pits confirms almost every forecast made by Arthur Scargill since he became president of the National Union of Mineworkers? He forecast those events with clinical precision. Is it not a fact that that must be set against the problem of hypothermia, which is likely to kill many people this winter because of the lack of cheap fuel?

§ Mr. Parkinson
I am very surprised that the right hon. Gentleman wants to talk about closures. No other Minister has ever approached the right hon. Gentleman's record for closing pits. What is more, under the right hon. Gentleman, miners did not receive the redundancy compensation that they receive under this Government. Coal imports represent about 8 per cent. of total coal consumption in this country. I want to see a strong British coal industry. We are putting up £2 million a day to ensure that the industry receives the investment. We need modern working practices to accompany the investment, and the industry will then have a bright future.

§ Mr. Andrew Mitchell
Does my right hon. Friend agree that the best way to beat the attractions of foreign coal is to continue the increase in efficiency and competitiveness that the industry has already seen? In that connection, does my right hon. Friend agree that our congratulations are due to the entire industry on the magnificent figures recently announced by British Coal in respect of productivity per man shift?

§ Mr. Parkinson
I am glad that my hon. Friend has brought that up. The breaking of the "4 tonnes per man shift" barrier is something for which the entire industry deserves credit. It deserves credit also for achieving that during an overtime ban. It just shows what the industry is capable of doing if men and management work together and make use of modern investment.

§ Mr. Eadie
I have listened to what the right hon. Gentleman has said about the importation of coal. However, he must spell it out more clearly. He is on record as saying different things to different audiences. Does he deny that he has told audiences that if the electricity industry is privatised private industry will be allowed to buy coal in whatever market it chooses? That means another slaughtering of the coal industry, with more pit closures and job losses.

§ Mr. Parkinson
The hon. Gentleman has quoted only half of what I said. I said that we would not bind the privatised industry to buy British. I went on to say that we believe that the British coal industry, if it continues to improve productivity, will become a supplier of choice, not of necessity. The hon. Gentleman should not quote the first part without quoting the second.