§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dorrell.]
11.46 pm§ Mr. Win Griffiths (Bridgend)The subject of this debate will be familiar to the Minister as it has for at least a decade been the subject of correspondence and debate in the House and the European Parliament. It relates to the application by successive Governments of article 56.2(b) of the treaty of Paris.
The budget of the European Coal and Steel Community is derived almost entirely from production levies on coal and steel. Every year since 1981 more than £1 million has been levied from opencast coal production, culminating last year in £1,902,000 out of £13,008,000 being paid by the Government in coal levies.
One of the purposes of the money is to contribute to eventualities described in article 56.2(b) thus:
If fundamental changes, not directly connected with the establishment of the common market, in market conditions for the coal or the steel industry should compel some undertakings permanently to discontinue, curtail or change their activities, the High Authority, on application by the Governments concerned:…Because of the failure of successive Governments to apply article 56.2(b), opencast workers have been excluded from the possibility of the Commission deciding whether any redundancy meets the requirements of article 56.2(b) and is eligible for some or all of the aids in it.
- (b) may provide non-repayable aid towards:
- —the payment of tideover allowances …
- —the payment of resettlement allowances to workers;
- —the financing of vocational retraining for workers having to change their employment."
I first became involved in the quest for justice for redundant opencast workers at the beginning of 1981 as the Member of the European Parliament for South Wales. In response to my inquiry, the Director-General of Employment and Social Affairs, Mr. J. Degimbe, wrote on 9Marchl981:
The Commission will participate financially in the aids for all redundant coal miners, whether they be from Deep-mines or Open-cast mines, whenever article 56.2(b) of the ECSC Treaty is applicable.After unsatisfactory correspondence with the Department of Energy over several years, I tabled a question in November 1983 to the Commission. My purpose was to get on the record the view expressed earlier by Director-General Degimbe. My question read:As far as the Commission is concerned, would there be any objection if the British Government brought opencast workers—on whose production the ECSC levy is paid—into the scheme of benefits that can be claimed by the UK Government, under the Treaty of Paris, when coal workers are made redundant?The Commission's reply, by Commissioner Ivor Richard, on 27 February 1984, read:If the United Kingdom Government revised their policy towards redundancies in the opencast mining sector, the Commission would have no objection in principle to granting aid under Article 562(b) of the ECSC Treaty for the workers concerned. The manner in which this could be done would be a matter for discussion with the United Kingdom authorities. In order for the workers to qualify, however, redundancy would need to arise from fundamental changes in market conditions for the coal-mining industry which compelled the undertaking concerned permanently to discontinue, curtail or 380 change its activities. In practice, the Commission believes that this Treaty requirement is unlikely to be met in the majority of cases arising in opencast coal mining.The Commission's position is clear: it will consider any application put forward by the British Government for redundant opencast workers. The British Government, however, are not disposed to do so.To test further the powers of the Commission to act on the Government's failure to implement in full the provisions of article 56.2(b) for all workers involved in the production of coal, on which the levy was paid, two redundant opencast workers, Mr. V. E. Williams and Mr. P. Shepherd, petitioned the European Parliament in December 1984 to request the Commission
to set in train the steps needed for Opencast Coal Production Workers to have the opportunity of claiming benefits under Article 562(b) of the Treaty of Paris when redundancies arise in the industry.The Commission's reply was discouraging. Part of it read:There is indeed no provision of the Treaty which requires a Member State to grant special aid to workers affected by discontinuance or curtailment of activities in an ECSC undertaking or to apply for non-payable aid in respect of these workers under 562(b).There is, therefore, no basis on which the Commission could unilaterally grant readaptation aids to opencast coal miners neither could it begin infringement proceedings against the United Kingdom Government for not granting such benefits.However, the Commission reiterated its previous position. It stated:In principle it makes no distinction between opencast coal workers and deep mine (including face) workers for the purposes of Article 562(b) of the ECSC Treaty.The reply continued:In order to verify whether in specific cases this basic eligibility condition is fulfilled, the Commission must rely on information presented by the Member State which under the Treaty is the only entity empowered to submit an application for aid … Until now the United Kingdom Government has not submitted to the Commission any such case concerning opencast coal workers.That leaves us with the important principle that all workers involved in the production of coal which is levied for the ECSC budget should have the right, if made redundant, to receive ECSC benefits under article 56.2(b) if eligible. The plain truth is that the Government have arbitrarily barred opencast workers who have been made redundant from any possibility of access to ECSC benefits. In the past the Government have argued that opencast work is akin to civil engineering, has nothing in common with deep mining, and that opencast workers are, according to a former Secretary of State for Energy, who is now the Secretary of State for Wales, the right hon. Member for Worcester (Mr. Walker)—I quote from his letter to me on 8 October 1983—accustomed to the need to move to another site, or find alternative employment, at fairly frequent intervals.They are not specified in the treaty of Paris as criteria for non-eligibility. The decision to exclude opencast workers is morally and legally unacceptable.Given that provision has been made in British legislation for deep miners, whose coal production is levied to be eligible for ECSC benefit—when the conditions of their redundancy meet the requirement of article 56.2(b) —there should also be provision for opencast workers whose coal production is levied to be eligible when the conditions of their redundancy meet the criteria of article 56.2(b).
In the past the Government have argued that opencast mine redundancies do not meet the requirement of article 381 56.2(b) that an undertaking must have had to discontinue permanently, curtail or change its activities as a result of fundamental changes in market conditions in the coal industry. What may have been true in the 1970s is not true of the 1980s. In 1983 workers in my constituency at the Parc Slip site, Cefn Cribwr—incidentally, that is but a field away from my back garden—were given redundancy notices on which the reason for their redundancies was declared to be a reduction in the demand for coal. Those redundancies were permanent, as has been the drop in demand for coal.
More recently, in October 1986, the Llanilid east site, in the constituency of my hon. Friend the Member for Ogmore (Mr. Powell), was closed with the loss of 240 jobs. British Coal also failed to extend the site to Llanilid west. Although the inspector appointed to hear the planning appeal for that site stated:
On the balance of probabilities, the proposed operations would be profitable,in paragraph 265 he also said:There is evidence to support a reduced consumption of coking coal by BSC.In paragraph 266 he said:I can see no justification for working Llanilid west on the basis of its coking coal content either in terms of the need to satisfy a particular market requirement or its economic value in the context of its intended purpose.Plainly, the planning appeal inspector felt that the state of the market did not justify the continuation of work at the Llanilid site, which would have enabled 240 men to continue in employment. Despite satisfying ECSC criteria, those men cannot be eligible for ECSC benefits because the Government have not enacted a scheme to enable application to be made under the provisons of article 56.2(b) of the treaty of Paris.My hon. Friends the Members for Gateshead, East (Ms. Quin) and for Blaydon (Mr. McWilliam) have already told us how opencast workers in their constituencies have been similarly affected by unforeseen changes. The Government's failure to provide such a scheme discriminates against opencast workers, whose coal production is levied in exactly the same way as deep miners.
The Secretary of State for Energy has the power to rectify that anomaly by establishing a scheme that is specifically designed for opencast workers. I hope that tonight the Minister will declare himself to be on the side of justice and that he will end the unjustifiable, illegal and immoral discrimination against redundant opencast mineworkers.
§ The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer)I congratulate the hon. Member for Bridgend (Mr. Griffiths) on raising an issue which he has pursued with my Department on several occasions over at least eight years. I congratulate him on his persistence. He will not, I suspect, be surprised if, similarly, my response tonight has a familiar ring to him.
Article 56.2(b) of the treaty of Paris, which he quoted, which established the European Coal and Steel Community, states that
if fundamental changes … in market conditions for the coal or steel industry should compel some undertakings permanently to discontinue, curtail or change their activities, the High Authority,—which is now the European Commission— 382on application by the Governments concerned … may provide non-repayable aid.Certain costs associated with a reduction in labour requirements towards which this aid may be given are then listed. The treaty goes on to say thatthe High Authority shall make the provision of non-repayable aid conditional upon payment by the State concerned of a special contribution of not less than the amount of that aid".As part of the coal industry, opencast mining is in principle covered by article 56.2(b), and if the conditions set out in the article were met it would be possible for the Commission to grant readaptation aid. However, it is clear that these conditions are not met, for two main reasons, one of which the hon. Member touched on.First, the Government have no special scheme for redundancy or associated payments to workers at opencast sites. Such a scheme would have to be introduced, requiring legislation, before the Commission could make a contribution under article 56.2(b). Such a scheme, were it introduced, would of course be anomalous. It would single out for exceptional treatment a particular group of employees the nature of whose work was similar to that of many others employed in civil engineering and aggregate extraction industries. That is a perfectly fair comparison.
§ Mr. Win GriffithsIs the Minister aware that, in other member states, opencast iron ore miners are eligible for ECSC benefits, and that the manner of their operations is exactly the same as that of opencast workers in the United Kingdom?
§ Mr. SpicerI am not familiar with iron ore extraction in other countries; but I am familiar with the opencast industry. One of its characteristics—this may or may not be true of the iron ore industry in other countries—is that it is a productive, efficient and thriving industry. That comes into consideration of this matter.
To return to my point about comparable industries, employees in those industries typically need to move from site to site, or to find alternative employment, at fairly frequent intervals, as the jobs that they are doing come to completion. Redundancy payments to all these workers must, of course, conform to the requirements of the Employment Protection (Consolidation) Act 1978; but there is no justification for incurring the substantial extra public expenditure that a special publicly funded scheme for opencast workers would involve.
§ Ms. Joyce Quin (Gateshead, East)Does the hon. Gentleman agree that opencast workers, who may work alongside other workers employed by British Coal—that was the case in my constituency—are in an anomalous position? A levy is paid on the coal on which they work, yet, oddly, only one of those two groups receives any advantage from that levy. In the case I mentioned when I read out my petition, the opencast site had not come to the end of its useful life. It was closed for a completely different reason, which would meet the criteria that the Minister talked about before.
§ Mr. SpicerThe hon. Lady raises the matter of the levy, and I shall deal with that in a moment. On the question of conditions that might apply, I must stick to the point that this is a thriving industry and we cannot see any specific reason for singling it out for the public funding that would be required to make it conform to ECSC requirements.
383 The possibility of funds from the ECSC to offset part of the expenditure is no justification, even supposing that opencast workers met the other conditions for aid that are set out in article 56.2(b).
It is highly unlikely that those further conditions would be met in the large majority of opencast sites. Perhaps that addresses the specific points raised. Closure of opencast sites is usually necessary because there are overriding environmental or planning objections to further extraction. Opposition Members are proposing, on the basis of what I suspect they might agree are limited cases, the introduction of a substantial and anomalous public subsidy for an industry that, by and large, is thriving.
Given the present state of the opencast industry, it would be hard to establish that there had been fundamental changes in market conditions requiring permanent discontinuation, curtailment, or changes of activities. The hon. Member for Gateshead, East (Ms. Quin) said that it was inequitable that ECSC funds were raised by a levy on coal production, including opencast coal, but that the benefits of readaptation aid did not extend to opencast coal workers. This point is based on at least three misconceptions.
First, no levy is paid by the contractors operating at opencast sites. They provide the vast majority of the work force and are responsible for redundancy payments. The levy on opencast production is paid by British Coal as the licensor. Secondly, there is no direct link between levy payments and readaptation aid. The coal production levy finances a variety of ECSC expenditures, of which readaptation aid is only one. Finally, and perhaps fundamentally, opencast mining is a thriving, prosperous industry for which ECSC readaptation aid is hardly appropriate.
§ Mr. John McWilliam (Blaydon)Perhaps the Minister has not been told by his officials that some of those opencast mining companies are financially effective because they are taking opencast coal and running it through private drift mines that they own. They claim the levy on the opencast coal as if it were drift mine coal. If the Minister is so innocent that he does not know about the rip off that is taking place in the industry, he should not be on the Front Bench.
§ Mr. SpicerThe hon. Gentleman makes strong allegations.
§ Mr. McWilliamThey are accurate.
§ Mr. SpicerIf the hon. Gentleman feels strongly about those allegations, perhaps he will write to me, giving specific examples, so that I may consider them. However, we are talking not about drift mining, but about opencast mining. The hon. Gentleman is proposing specific public funding arrangements for an industry which, by and large, is thriving. If he thinks about the matter carefully, he will see that he and his hon. Friends are putting forward a peculiar proposition.
§ Mr. McWilliamIf the Minister were to study the activities of R and A Young in the north-east, and if his officials and the Inland Revenue were to operate properly, he would discover that opencast coal is being run through drift mines as if it were drift-mined coal.
§ Mr. SpicerThe hon. Gentleman has made his allegations under privilege of the House of Commons and no doubt they will be seen by other people. I see no prospect of the opencast coal industry in the United Kingdom ever justifying the kind of special and expensive measures that were taken to deal with the social consequences of the closure of high-cost deep mines. They were extraordinarily generous measures that the state funded because of the restructuring of the industry, but they are totally inapplicable to and inappropriate for an industry which, by all acknowledgements, is thriving. British Coal is currently making £240 million a year profit in that industry.
§ Mr. McWilliamCrooks.
§ Mr. SpicerThe hon. Gentleman shouts "Crooks", but this is a thriving industry for which he is implicitly demanding further public funds simply on the basis that the deep mine industry is undergoing considerable and radical restructuring to the great benefit, ultimately, of that industry. We believe it is appropriate that public funds on a massive scale should have been applied to that industry to deal with redundancies.
I do not think that the hon. Gentleman and the hon. Member for Gateshead, East will agree with me, as they have heard these arguments before and have not agreed with them in the past, but I hope that they will, after this useful and interesting debate, at least acknowledge that there are two different sets of circumstances. Because the word "coal" appears in the titles does not mean that it is appropriate to apply public funding to one industry just because the other is going through a massive restructuring. On that basis, I rest the Government's case.
§ Question put and agreed to.
§ Adjourned accordingly at twelve minutes past Twelve o'clock.