HC Deb 25 March 1991 vol 188 cc592-4
4. Mr. Barron

To ask the Secretary of State for Energy if he has any plans to meet the chairmen of National Power and PowerGen to discuss coal imports.

Mr. Wakeham

I meet the chairmen of both companies from time to time to discuss a range of issues.

Mr. Barron

Is the Secretary of State likely to talk about coal imports? It was reported in the press earlier this year that the chairmen of the new generators had said that they wanted to import up to 50 per cent. of the coal that they currently receive from British Coal. Given the devastating effect that that would have in two years when the current contract with British Coal runs out, does he have immediate plans to start talking about long-term contracts for an industry which is vital to the nation?

Mr. Wakeham

I am surprised that the hon. Gentleman did not give credit to British Coal for obtaining long-term contracts for the first time. The three-year contracts are longer ones than it has ever had before.

The choice of fuel is a commercial matter for the generators. Privatisation opened up the prospect of greater diversification of fuel sourcing. Both National Power and PowerGen have stated that they intend to take advantage of the opportunity. However, I expect British Coal to remain a major supplier to National Power and PowerGen in the years to come, especially if British Coal can maintain its good record of efficiency improvements.

Mr. Andy Stewart

Is my right hon. Friend aware that the recent policy statement from the Labour party on opencast mining threatens the Nottinghamshire miners' jobs and 13 of the 17 collieries which require low-chlorine coal to blend with their products before the power generating companies will buy? Is not that another sign of the Labour party's lukewarm stance on the extension of the Humber ports, which would enable British collieries to import the coal that they need to operate?

Mr. Wakeham

My hon. Friend, with his deep knowledge of the coal industry, makes a good point.

Mr. Barron

The hon. Gentleman has not read the document.

Mr. Wakeham

The Government favour a successful opencast sector. I assure the hon. Gentleman that I have read the document, which Opposition Members have not. If the Opposition set an annual limit on opencast coal output, British Coal's viability would be reduced and job losses would result, in both the opencast sector and deep mines, where opencast output is relied upon for blending.

Mr. Hood

What is the Secretary of State doing about coal dumping in the EC? Is he aware that countries such as America and China are dumping coal at well below the price of production? British Coal has made representations to the Commission, but as yet has had no positive response. I met Sir Leon Brittan in Brussels a fortnight ago and raised the matter with him. He took a Pontius Pilate attitude and said that it had nothing to do with him. I find that strange because he is the Commissioner for competition. Will the Secretary of State assure the House that he does not intend to play Pontius Pilate with regard to coal dumping in the EC? Does he accept that the British coal industry produces coal more cheaply than any other country in Europe? Will he fight the case for British coal in the EC?

Mr. Wakeham

Of course, I should be concerned about any coal dumping, but it is for the European Commission to decide whether to investigate complaints of this nature. There is no evidence of subsidised imports from the main coal-exporting economies. The heavily subsidised exports from the German coal industry account for only about 2 per cent. of coal imports.

Mr. John Marshall

As the world price of coal is somewhat lower than the price charged by British Coal, would not increased coal imports lead to lower electricity prices, which would benefit consumers such as pensioners and benefit energy-intensive industry and employment therein?

Mr. Wakeham

My hon. Friend is right. If we protected coal from overseas competition, industry would have to pay extra for its electricity and would be less competitive in the world market. That is where real damage to jobs and the balance of payments would occur. But provided that British Coal is competitive, National Power and PowerGen expect it to remain a significant supplier. That will be apparent when the coal contracts are signed.