HC Deb 15 February 1988 vol 127 cc687-8
2. Mr. Ray Powell

To ask the Secretary of State for Energy what information he has on the pricing of coal agreed between the Central Electricity Generating Board and British Coal.

The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer)

The price of coal purchased by the Central Electricity Generating Board from British Coal is governed by an understanding between the two industries agreed in 1986. In accordance with this understanding, pricing terms were reviewed on 1 November last year for the 12 months to October 1988.

Mr. Powell

Will the review create a position in which considerably more imported coal will enter this country? Will the Minister consider the effects of this great importation on the closure of collieries, particularly in the Principality? Will he also consider whether it would be wise to try to expand the mining industry by opening the Margam mine?

Mr. Spicer

The review has nothing to say about imports of coal. British Coal is making its prices more competitive under the terms of the present agreement. However, we have always said that when the electricity industry is privatised it will be able to buy coal in the best market. We say that because we know that British Coal is quite capable of being the best market.

Mr. Andy Stewart

Will my hon. Friend confirm that, as a result of increased productivity in the past two years British Coal has reduced the price of coal by £4 per tonne —costing British Coal £400 million—and that the way to beat foreign competition is through productivity?

Mr. Spicer

That is absolutely right. British Coal has reduced prices, and that reduction has benefited consumers by £500 million since April 1986.

Dr. Marek

If the Minister is happy with the present pit-closure policy, what analysis has he made of the future price of coal on world markets?

Mr. Spicer

The future of coal will be determined by those markets. We have made no particular analysis because, unlike the Opposition, we do not plan on these things. However, British Coal will have to compete in world markets according to how the markets are determined.

Mr. Sackville

Does my hon. Friend agree that there is a limit to how much longer consumers, including the elderly, should be expected to pay inflated prices for electricity so that British Coal can continue to sell at nearly twice the world market price?

Mr. Spicer

The coal industry will have to bear that strongly in mind as it faces increasing competition. That is why we want to see new practices introduced into the coal industry and why each working day we are putting £2 million of taxpayers' money behind the coal industry.

Mr. Haynes

I am not surprised at the kind of replies that we are receiving from the Minister today. Is he aware that, unlike him, I fight for Britain? What about the British coalmining industry and British mineworkers? I object to the South African imports, which are produced with cheap, slave labour. It is time that the Minister said, as we are saying, "Let us fight for Britain".

Mr. Spicer

I have already said that the British coal industry should be backed. There is no question about that. However, it should be backed only if it can provide coal at competitive prices. Otherwise the electricity consumers—as my hon. Friend the Member for Bolton, West (Mr. Sackville) has said—will be the loser.