§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]
11.46 pm§ Dr. Lewis Moonie (Kirkcaldy)Just over six months ago, in my maiden speech to the House, I described the coal industry in my constituency. I little thought that I would come to the House tonight to give its epitaph.
My constituency stands on layer upon layer of coal, which extends down more than a mile beneath the surface. Coal has been mined there for centuries—that is, until two weeks ago, when the tradition ended. British Coal announced the closure of Seafield colliery because of low production and heavy losses and it managed to buy the acquiescence of the work force through short-term bribes that it has instituted to persuade men to take early retirement and redundancies.
Why was Seafield colliery closed? Was it exhausted? No. Estimates suggest that there are more than 200 million tonnes of coal left in the measures that I am discussing tonight. Is it poor quality coal? No, it is not. It has the highest calorific value of any coal mine in the United Kingdom. It is low in sulphur and chlorine. It is a high-value product when we consider that domestic coal in this country sells at more than £100 a tonne retail. That is the quality of the coal that we are talking about. Are conditions difficult in the pit? Yes, they are. However, I wonder whether they were difficult enough to force its closure.
There are problems of combustibility with the coal, which have led to a loss of faces because of fires. There are also problems of steep gradients. Steep seam working is difficult. Seafield colliery has been the leader in this country in steep seam working involving gradients up to 1:1.5. Working gradients on that scale must be seen to be believed, particularly when the machine comes down the face stripping off three feet of coal at a time. Seafield has been a model for other areas. We could continue to learn from that pit about the use of that type of technology which we will need in future. British Coal often refers to averages. It refers to average cost and it averages out its losses. We are not talking about an average pit producing average coal at Seafield.
Was the problem industrial unrest? Last year, the work force of the pit gave up their Christmas break to fight a fire. The pit had a tradition of good labour relations. They were soured occasionally, I admit, by certain factors, but they were basically sound. Therefore, what was the reason for the closure?
The fault lies firmly at the door of British Coal and, to some extent, the Government. There is a poor investment record at Seafield. There has been a failure to invest in the modern equipment that the pit deserves. It can take over one third of a man's shift to get down to and up from his workplace. When a man is travelling down to and up from the coal face, he cannot cut coal. One of the problems was a lack of investment in belts for transporting coal out and for transporting men in. Belts were old-fashioned and in need of renewal. There were constant breakdowns in man-riding belts and in coal-carrying belts. When that happens, with no storage space underground, the line comes to a halt. That has been one of the main problems of low production over the past six months.
146 The other problem is the fact that there is only one working face at the pit. Again, it is all or nothing. If the face is working and everything is going well, coal is produced at a decent rate. If not — there have been many stoppages—production levels rapidly fall. In turn, that has led to a fall in the morale of the work force. It is particularly due to the fact that, last year, British Coal promised new investment in the pit. That promise was not fulfilled.
There has been a lack of sophistication in British Coal's management. It has good managers when it comes to producing coal. There is no doubt about that. They are engineers — they know their jobs — but they are poor handlers of men. Man management and personnel relations have been a failure. For example, last year, after the fire, British Coal paid off many underground technicians, skilled workers, electricians, and so on. The next thing we know is that it is bringing in private contractors to do the job, at two or three times the wages of the miners who were paid off. Oddly enough, the miners found out about it. That was scarcely conducive to good relations in the pit thereafter. Quite frankly, it is incredible that a company could act in that way.
The most important factor in the closure of Seafield is British Coal's failure to develop the new long-term markets that it needs for its product, particularly a product of such quality. It has failed to look abroad to places such as Scandinavia and other areas in which people are trying low-sulphur, good-quality coal to burn and avoid the pollution problems with which we are so familiar.
British Coal's marketing policy has left a great deal to be desired. It has spent the past three or four decades in the pockets of two consumers, the South of Scotland Electricity Board and the Central Electricity Generating Board. It has been quite content to sit back, accept their markets and not go out and look for the alternatives for which it should have looked. That is fine when electricity use is expanding and when buyers will take all the coal that British Coal produces, but it is no good when electricity consumption stops rising at the expected rate. Suddenly, we find a captive seller who is forced to sell at the price that the consumer wants. That possibility should have been foreseen, and the market should have been diversified.
There is also the Government's attitude to dependence on nuclear power. That is a mortgage on our future. We still do not know how we shall dispose of the ruins of the power stations that we shall close over the next 10 years. We still do not know what we shall do with nuclear waste. Yet we are expanding our use of technology that has been stopped in the United States of America. We are starting to introduce the self-same power plants that the United States has banned, to the cost of our indigenous coal industry, and the pit in my constituency in particular.
So I believe that the Government have had a role to play in this situation. But which Scottish Minister has shown any interest in the Scottish coalfields over the past few years? None of them. They do not discuss the subject at all. They say that it is the Department of Energy's problem and nothing to do with them. The fact that the coalfield is part of their country means nothing to them. They have no interest whatsoever. Can no one in the Government, or in British Coal for that matter, see the need to maintain the type of technology that we have developed in these pits, steep seam technology — so 147 important, yet just thrown away? Can no one see that the quality of the coal that is being abandoned is such that we cannot afford to lose it?
The result is quite simple: 4,500 jobs have been lost in the Fife coalfield since 1983, and another 650 jobs were lost two weeks ago. We have a young work force—average age, 33—with no hope of re-employment in an area where male unemployment is well over 20 per cent. There will be more job losses in the workshops in Cowdenbeath; there will be a knock-on effect on local business and suppliers, who will also be hard hit; there are diminished prospects for school leavers and for the excellent courses at the local technical college on mining engineering. We see all the usual stories of missed opportunities, of failure—everything thrown away.
What does British Coal think it is doing? I do not know. There have been precious few statements nationally about the problem. Are they quarrelling over the succession to Sir Robert Haslam, perhaps? Who knows? They are certainly not talking about Seafield. What is the Secretary of State for Energy doing? He is racking his brains over how to privatise electricity in the way that the Government want, keeping Lord Marshall off their backs at the same time mutually incompatible objectives, I fear, as can be seen from the worried expressions on the faces of certain Ministers in the Department of Energy.
From my criticism of British Coal, I exclude Mr. George McAlpine, its manager in Scotland, because the tragedy is that British Coal in Scotland now has a manager with vigour and vision, the manager it needs to lead the industry into the 1990s, while nationally we see the management hellbent on closing down the Scottish coalfield. I believe that we will see the end of deep mining in Scotland in the next five years. That is our future under British Coal. When Torness comes fully on stream, while there are still signs of low prices for the oil and gas used in other power stations, when there are these alternatives, when there will be a low, and falling, demand for coal from the South of Scotland Electricity Board, then British Coal will reduce its operations in Scotland, reduce its peripheral operations elsewhere in the United Kingdom, and end up by concentrating production on a few pits in the midlands, in Yorkshire and in Leicestershire.
This is not necessary. British Coal has made promises—well, one could almost call them promises—about the future of mining in Kirkcaldy. It says that it would like to mine the Dysart Main seam where there is 100 million tonnes of coal–40 years' output — and other seams below that. It has promised to consider investment, and I understand that it will begin prospecting near the Frances colliery site to the north of Seafield in April, with a view to a phased development, looking initially at opencast and later, so it says, at putting in a drift mine to take the deep coal out. Looking at the record of British Coal, we can be pretty sure that we will get the opencast, if it can get planning permission for it, but I would not like to stake my future on getting a deep mine at the end of it.
§ Mr. Alexander Eadie (Midlothian)My hon. Friend makes a powerful case. As he well knows, I worked those seams in the east Fife coalfield for 30 years at the coalface—my father was killed in a pit in that area. But on the point that he makes about the reserves of coal in that area, will he agree with me that we are talking about an area 148 which is the largest proved coalfield in the whole of the United Kingdom, that it covers between 104 and 110 square miles, that there are seams outcropping to about 100 ft? Will he agree that it is absolutely monstrous to think about opencasting there? Opencast is a physical impossibility. Does my hon. Friend think that, with regard to the case that he is advancing, the Minister must give a positive reply about investment in this gigantic coalfield? Not to develop it would be a form of vandalism and a scandal for the people of Scotland.
§ Dr. MoonieI entirely accept what my hon. Friend says. It is the largest coalfield in Britain, and the seam that I am talking about is only one of several that can be mined there. Other seams below it can be reached using modern technology. There are others below that which admittedly would be more difficult. We are talking about an enormous coalfield and we must receive some guarantees about its future.
I do not know how feasible British Coal's proposals for opencast mining are. It obviously considers it worth while to explore the possibility — opencast mining is a very profitable operation for it. However, it can be a threat to deep mining in Scotland, not an adjunct.
British Coal wants several conditions satisfied before it proceeds with its investment. It wants planning permission, but that would be fairly simple to obtain, provided guarantees are given about the future of deep mining. It wants guarantees on flexible working. There is no way that I or any other politician can give those; that is a matter for the NUM. There were signs from the local work force that, for the sake of their pit, they were prepared to work almost any hours requested of them.
British Coal wants opencast mining first. What guarantees do we have that there will be anything afterwards? It could be opencast first and last, and in five or six years we would have nothing but a dirty hole to the west of our town, which would, we hope, be reinstated.
British Coal wants guarantees about long-term markets. I thought it was the job of British Coal and the Government to secure long-term markets. What is being done? Can the Minister give any assurances that long-term markets are being sought to sell the product that the industry is producing? It is not much to ask for the Scottish Office, the Department of Energy, the DTI — the Department of enterprise, as it is known — to get together on a project such as this in which 1,000 jobs and an investment of £150 million are involved. If a Japanese company were involved, those Departments would be falling over themselves to be involved. What is wrong with doing it for the coalfield? Can guarantees be given to consumers that long-term supplies will be made available? Can finance be sought from the EEC?
Those questions must be answered, because the people of Fife and my constituency are sick and tired of empty promises. They want action, decisions and investment in our future.
§ 12.2 am
§ The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer)I begin by paying a sincere tribute to the hon. Member for Kirkcaldy (Dr. Moonie) and his hon. Friend the Member for Midlothian (Mr. Eadie) for their efforts in raising the future of deep mining in east Fife. Last month, they met my right hon. Friend the Secretary of State for Energy and registered a number of 149 points—some of which have been repeated tonight—with him. As promised, my right hon. Friend raised those matters with British Coal. As the hon. Member for Kirkcaldy recognised, they fall within the management responsibility of British Coal. However, 1 should like to put the issues under discussion in perspective and then confirm one or two points that the hon. Gentleman has raised.
The east Fife coalfield, which straddles the town of Kirkcaldy, has been worked for over 100 years, as was mentioned by the hon. Member for Midlothian. The Frances pit, which at one time was Scotland's oldest working unit, was connected underground with the nearby Seafield colliery in March 1980. Both Frances and Seafield were exploiting undersea reserves, and working Britain's most consistently steep seams, with gradients as great as 1 in 1.2. Mining conditions have proved extremely difficult, with some seams, I understand, particularly prone to heating. During the long and pointless miners strike of 1984–85, both units were badly affected by underground fire, and its two main faces were lost, D51 at Frances and LO1 at Seafield. It was one of those fires which caused the Frances end of the unit to be closed down, and production resumed after the strike in two faces at the Seafield end.
British Coal recognised the potential of the unit and, contrary to the impression given by the hon. Member for Kirkcaldy, invested over £8 million in replacement faces, and the unit was well on its way to producing its target of four tonnes per manshift, which would have been an acceptable survival level. I have to say that the efforts were not helped by a series of local disputes.
However, production was nearing its target, and the future of the unit seemed to be safe. But over the Christmas and new year holidays just over a year ago there was another tremendous fire which resulted in the loss of the major production face, L15. The work force rallied round magnificently, working round the clock over the Christmas and new year holidays, to contain that fire. It was successful in saving one face. It is that face, D19, which has been worked over the past 12 months.
The area director, Mr. George McAlpine, to whom the hon. Gentleman advisedly paid tribute, said just over a year ago that in order for the pit to remain viable, a reduction in the work force was necessary. The local unions recognised this and accepted that decision. The agreed target, or four tonnes output per manshift, was reached for the first time in April 1987. Mr. McAlpine said at that time that on the basis of that level of production he was prepared to agree in principle to the development of a new face at an estimated cost of £10 million.
Unfortunately, further setbacks occurred. During September the men walked out in dispute over dust levels brought about by efforts to control a further heating underground, and there was a significant loss of production. Sixteen days later the unit was brought to another standstill by a further dispute. A coal shearer broke down, and members of the union responsible for repairing it, the Scottish Colliery Enginemen, Boilermen and Tradesmen's Association, refused to repair it, wrongly claiming that such action would constitute a breach of the national overtime ban, and losing even more production. In addition, the national overtime ban cost Seafield over £1 million in lost production.
All of these factors, combined with what everyone recognises were difficult mining conditions, meant that the 150 unit was operating well below its target — only two tonnes output per manshift and not the required four. The unit was facing a loss of £11 million for this financial year, and was causing a drain on the rest of the coal industry in Scotland. At a colliery review meeting at the end of November, Mr. McAlpine told the unions that the situation at Seafield was now extremely serious and that there was no justification for continuation unless costs could be reduced substantially, and the production targets met. The unit was to be given a final chance. It was agreed to hold a reconvened meeting on 11 January. Operating performance did not improve, and on 11 January the area director proposed that Seafield should close. That proposal was agreed by the majority of the unions involved, and production actually ceased at Seafield last Friday.
As well as promising that there would be no compulsory redundancies arising out of the closure, and that transfers would be available for those wishing to remain in the industry, Mr. McAlpine promised that a substantial amount of money—some £750,000—would be available for exploratory work to assess the viability of mining the substantial reserves north of Seafield which could be accessed from a possibly reopened Frances colliery.
The Government have made and are making substantial amounts available for investment by British Coal — more than £2 million every working day and more than £5.5 billion since 1979. However, the question of further investment at a particular colliery is one for British Coal management. To take a decision about Frances, British Coal must first be sure that there is a firm market for the coal—as the hon. Member for Kirkcaldy recognised at the price at which it can be produced—and it will need to look closely at the future markets for the coal in electricity generation and other industrial markets. It will also need to compare this project with other possibilities.
Secondly — the hon. Gentleman referred to this —flexible working would have to be agreed by all unions concerned. As Sir Robert Haslam said less than a fortnight ago, flexible working is vital to the industry if it is to survive against fierce competition and expand the market for coal, and it is the only way to create more jobs and secure those already existing in the industry. Thirdly, I understand that the project would need to obtain planning permission in the usual way from the local authorities, and that is not in dispute.
§ Mr. EadieThe hon. Gentleman is presenting a proposition to the House based on three assertions. The first concerns the availability of saleable coal—a new feature of the Government's case. Here we have a coalfield that is like a gold mine, yet the Government question whether the coal can be sold. Does the Minister agree that the second assertion then falls flat on its face? Six-day working will not solve anything if British Coal does not try to find a market for the coal that is produced. That places the men in the area in an impossible position. I wonder whether the Minister would reflect on that.
§ Mr. SpicerThe hon. Gentleman, who is extremely experienced and well versed in these matters, will know that the market depends upon the price at which one is selling — particularly in the context of present world prices. Of course, the cost of coal, and therefore the price 151 that British coal fetches, is crucial in determining whether there will be a market. We have made no bones about that. We have never tried to disguise the fact that once the electricity supply industry is privatised it will be free to purchase coal where it wishes. We hold the firm view that British Coal has the capacity and the capability to compete against all-comers. We agree with the hon. Gentleman that we have superb reserves and a superb capability for producing coal. There is nothing between the hon. Gentleman and us on that. The only thing that we say is that we must exploit the coal so as to make it competitive. That will create the markets that we require.
I should also draw the attention of the House —[Interruption.] I must say that we are honoured by the presence of a very high-powered team of Opposition Members, considering that it is so late at night. [HON. MEMBERS: "It is important."] I quite agree. I should draw the attention of the House to the measures being taken by British Coal to mitigate the effects of the closure in the constituency of the hon. Member for Kirkcaldy. Starting today, all 638 men on the colliery's books will be interviewed to determine how many wish to transfer to other units in Scotland. Those seeking redundancy will enjoy the generous terms available under British Coal's own arrangements.
Including the £5,000 supplementary lump sum, the redundancy benefits to younger miners with limited service are even greater than those available under the redundant mineworkers' payments scheme—something that is not generally recognised. For those with longer service, total lump sums of up to almost £40,000 are available, including statutory lump sums and cash in lieu of concessionary fuel.
152 Under section 3 of the Coal Industry Act 1987, the Government are providing 75 per cent. grant aid towards those redundancy costs, as well as towards the transfer costs of those who choose to take another job in the industry. I understand that British Coal expects to be able to offer alternative jobs locally to those who do not wish to take redundancy.
As both my right hon. Friend and I have made clear, the decisions which will decide the future of deep mining in east Fife are ultimately ones for the British Coal corporation. However, to a very large extent they will rest on the existence of dependable markets and a realistic attitude on the part of the work force.
In conclusion, as the Minister responsible for this issue, I hope that Opposition Members who have great influence in these matters, and many of whom have close connections with the unions concerned, will play their part in ensuring, in the interests of British Coal, and indeed of the country—forgetting party politics—[Interruption.] No, it is in the interests of British Coal that we forget politics and get down to considering how best to put the industry back on it feet.
This debate, which the hon. Member for Kirkcaldy has raised astutely — in the context not just of his constituency, but of the industry as a whole—sharply pinpoints the choices that lie ahead. Either the industry is run down or, if we get the industry and the working practices right, it can be put back on its feet. I very much welcome the debate and hope that it will result in a positive outcome in his part of the world.
Question put and agreed to.
Adjourned accordingly at sixteen minutes past Twelve o'clock.