Postponed proceedings resumed on the Question,
That the draft Coal Industry (Restructuring Grants) Order 1991, which was laid before this House on 15th April, be approved.
§ 10.9 pm
§ Mr. Andy Stewart (Sherwood)
The motion shows yet again the continuing support given to the coal industry by our Government. Since 1979, more than £7 billion of new investment has been committed. The significance of that was grasped by the Union of Democratic Mineworkers and, by their example, productivity has increased by more than 100 per cent. Providing grant aid to British Coal of about £17 billion has enabled it to undertake major restructuring of the industry with remarkable success. There has not been a single compulsory redundancy. Men who wish to stay in the industry have always been offered alternative employment.
The size of the coal industry will be determined by the size of its market and not by Government decisions. However, the decision last year to write off British Coal's debts of £6 billion, which was equivalent to a reduction in the price of coal of £9 a tonne, has transformed its financial structure. With its new financial base, the industry has the technology, the investment and the skills to continue to improve its competitiveness and its profitability.
The coal industry is an extractive industry and collieries will naturally become exhausted. That accounts for 2 million tonnes of capacity every year. At the same time, British Coal will have to determine the overall production level to meet its customers' requirements. The order provides £300 million in respect of likely redundancies in 1991–92.
Has my hon. Friend the Minister considered the long-term consequences to the coal industry if the Labour party policy document "Opencast Coal Mining—Too High a Price?" were ever implemented? The money provided tonight would cover only a fraction of the compulsory job losses. The implication of Labour's vindictive policy, at the behest of the National Union of Mineworkers, would be catastrophic for the Nottinghamshire miners. Thousands of jobs would be lost.
§ Mr. Kevin Barron (Rother Valley)
How many jobs will be lost in opencast coal mining if the document is implemented?
§ Mr. Barron
I asked the hon. Gentleman whether he could tell me how many jobs will be lost in opencast coal mining when the policy document is implemented.
§ Mr. Stewart
If the hon. Gentleman waits, he will hear how many jobs will be lost in Nottinghamshire.
§ Mr. Stewart
The hon. Gentleman should listen, and he will then get the answer. Thousands of jobs would be lost. The reason is that 13 of the 16 Nottinghamshire collieries require low-chlorine coal from the opencast sites to sweeten their product, on a ratio of six tonnes deep-mined 111 to one tonne opencast, before it is accepted by the power generating companies. The loss of low chlorine coal by itself would be disastrous, but the loss of the £200 million annual profit from the British Coal opencast division, which is used to subsidise deep-mined coal, would increase prices by almost £5 a tonne, leaving British Coal with no market and no jobs for its miners.
The Labour party has dropped that bombshell at a time when Nottinghamshire miners are continually breaking production records. It shows the Labour party's lack of faith in and support for the coal industry, and it shows why Nottinghamshire miners abandoned socialism in 1985.
The generous restructuring grants and redundancy payments provided by the Government for the coal industry and miners wishing to leave it shows our continuing commitment. I support the order.
§ Mr. Peter Hardy (Wentworth)
I agree with one thing that the hon. Member for. Sherwood (Mr. Stewart) said. Almost in passing, he referred to the tremendous achievements of the mining industry; its increase in productivity in recent years has been unmatched in almost any other part of British industry and commerce. Despite that splendid achievement—which this country will appreciate more in a few years' time than it does now—morale has declined and the destruction of jobs has accelerated. The hon. Member who now represents Sherwood boasts about the Government's commitment to opencast mining when there has been an unparelleled reduction in the number of jobs in deep-mined coal. He should be ashamed of himself.
I suggest to the hon. Gentleman that, for various reasons, his constituency may have returned him at the last general election, but his speech tonight expressing a commitment to opencast mining will not only damage the prospects of Conservative Members representing coal-mining areas in Nottinghamshire, but will have sweeping implications for Conservative votes in every coalfield in Britain.
§ Mr. Barron
Would my hon. Friend care to ask the hon. Member for Sherwood (Mr. Stewart) why, before the publication of the Labour party's policy document on opencast coal, Blidworth mine in his constituency closed although it had millions of tonnes of coal? The hon. Gentleman never uttered a word in the House about that.
§ Mr. Hardy
I do not wish to be unkind to the hon. Gentleman, but we are accustomed to hearing him speak frequently in mining debates. Some of us do not read our speeches, and it is possible that no one had given the hon. Gentleman a speech to inflict on us as he carefully read it. It is not my habit to read speeches in the House, and I do not need to read a speech on the mining industry. Over the past few years, we have lived with the destruction of our local economy.
The Minister has been to my constituency. I attended a church service yesterday. We received a banner, and saw an exhibition about a local colliery that has closed. If the Minister had been to a hillside a few years ago, he would have seen head stock after head stock. Not one of those 112 pits can be seen from that point now, because they are no longer there and the jobs that the men need do not exist either.
The hon. Gentleman said that there had been no redundancies and that jobs had been offered to miners who had been declared redundant when their pits closed. The hon. Gentleman should know that men who, over the years, have developed skills in electrical and mechanical engineering, safety and technology—he has been down a colliery, and should recognise what the work involves—were told that they would not be made compulsorily unemployed and would be given alternative jobs. They were also told that they could have no assurance that they would have the skilled jobs for which they had trained, and which they might have practised for many years. Many men skilled in the various trades that allow collieries to be maintained did not want to do unskilled work, but British Coal offered them no promise of opportunities for skilled work.
I will give way to the hon. Member for Sherwood (Mr Stewart).
§ Mr. Stewart
Yes, but I wanted to make the point to the hon. Member for Wentworth (Mr. Hardy) so that the hon. Member for Rother Valley would get the message. The hon. Member for Rother Valley accuses me of not raising the subject of the closure of Blidworth colliery. That is completely untrue. I raised it in the House at the time; if he reads Hansard, he will see that.
§ Mr. Hardy
Perhaps the hon. Gentleman could tell us when and in what context he offered a protest. Some of us protest vigorously about colliery closures and although the hon. Gentleman attends debates on coal, he frequently does so in order to make minor party political points rather than joining in the debate with the passion that the argument should receive.
This is another distressing debate because it is about provision for the industry to contract, to provide compensatory arrangements for redundant miners. We have heard about British Coal Enterprise Ltd. and the arrangements for redundancies. As the hon. Member for Sherwood (Mr. Stewart) reminded us, over the past few years the industry has demonstrated what can be achieved. However, world coal prices are dangerously low and do not permit investment to enable international production to be sustained. Because of that, we are likely to develop an utterly unwise dependence on imports.
The Minister may not be prepared to listen to the Opposition, but he must be prepared to listen to those of his political persuasion. The people of whom I speak are more likely to be of his political persuasion than ours. They are employed in British Coal and are eager to see it privatised, perhaps for personal profit. However, they recognise that the world coal trade is such that Britain should not allow itself to become completely dependent upon it. Contraction will continue because more collieries are to close in 1991, and that means that dependence on imported coal is bound to increase unless the Government urgently reconsider their policy.
113 The Government could argue that this measure and others that they have introduced over recent years show that they have taken a positive interest. However, in Nottinghamshire, Yorkshire and other areas, large sums have been invested in collieries which closed shortly afterwards. Vast reserves of coal have been locked away, perhaps for ever, and in many cases it has happened after substantial public investment. That is the approach of madness, and it is why some of us become rather concerned in coal debates.
We must plan with intelligence and recognise that in addition to provision for the closure of exhausted collieries, where redundancy may be unavoidable, we should ensure that Britain's coal capacity can be maintained to avoid reaching the position outlined today or yesterday by Mr. Edwards of British Coal which could result in a balance of payments deficit of more than £8,000 million. The Government have destroyed huge swathes of British industry. Our capacity to export manufactured goods is very much smaller than it should be, and it will be extremely difficult to make up the current balance of payments deficit. To add to that millions of pounds worth of imported coal is ridiculous.
I urge the Minister and his Treasury colleagues to pay more attention not only to a long-term economic appraisal of the international coal trade and Britain's position, but to the position that is likely to develop in the next three or four years and which may already have started to develop.
The Government frequently claim that they support and are interested in research on the clean combustion of coal. Ministers often go prancing round the country; they get up in the morning and are taken out of harm's way from the Department of Energy. One Minister recently visited Grimethorpe and expressed great interest in the work there. However, we may soon approach the point, if we have not already done so, where there is no need for resources for basic research, but a need for more resources for the development stage that should proceed.
The combined cycle technology could have enormous implications for the clean burning of coal and the long-term future of British industry. It would be useful if the Minister could assure the House and the coal industry that such research will be backed adequately and that there will be no stinting on resources. He should assure us that there will be no examples of hypocrisy when Ministers congratulate those involved in the research and then do not provide the funds that such development needs.
The Government are obviously obsessed with the right-wing dogma they serve. Although they may be eager to secure the privatisation of coal, they should not privatise it simply to allow a few profitable pits to create profit for a relatively small number of people. That would ensure that the pits that could not guarantee to provide a particularly odious level of profit would have no future.
The Government should be prepared to show some interest in and give some attention to the British mining engineering industry. If that industry takes advantage of the increasing opportunities that will be created as man scratches a little more deeply below the surface for the mineral resources that we need to develop, it will have an increasingly important international role. That industry's role will not be as important as it should be if the home base—the number of collieries in Britain—is diminished.
People in the mining industry the length and breadth of Britain now estimate that the number of collieries remaining by the end of the decade will be counted on the 114 fingers of two hands, if not one. That is a dangerous situation, not least for hon. Members such as the hon. Member for Sherwood.
I have one colliery left in my consituency; there were 12 when I entered the House. Jobs in the area have gone and the plight of the area has been created by the hasty greed of the present Administration. Enormous problems have been created, but the problems will get even greater in other areas if the Government do not act with more wisdom than they have shown so far.
It is all very well to seek approval for tonight's order, which is designed to assist the coal mining areas to weather the ravaging storms that have assailed them in recent years. Such orders, however, are not enough. If the Government rely on such orders and refrain from using a bit of vision and common sense they will attract even more unpopularity than they deserve to have given the comments of the hon. Member for Sherwood.
§ Mr. Malcolm Bruce (Gordon)
I apologise for missing the two opening speeches of the debate, but as it is a Monday I did not get down from Scotland in time. I did not expect the debate to start quite so early and I am glad to have the opportunity to make a contribution now.
I want to know why we are increasing the funding to British Coal for restructuring, given the questions that must be posed relating to British Coal's record. What will it use the money for? I shall cite two specific examples to illustrate my point. I am concerned that, given additional funds, British Coal will use them to accelerate closures and to vandalise pits that, if not operated, could be maintained on a care and maintenance basis.
I am greatly puzzled about why coal is treated differently from other reserves such as oil and gas. The Minister is familiar with the oil and gas licensing system. He knows that the state owns oil and gas and licenses the oil companies to extract it. All our coal reserves, however, are owned by British Coal, which is not required to produce an annual report on possible or probable recoverable reserves, such as those in the Department of Energy's Brown Book on oil and gas reserves. Consequently, British Coal can happily and glibly abandon pits that contain substantial coal reserves, without any record having been made of what has been lost for exploitation in the immediate future or by future generations. Given that the abandonment of a pit is usually irreversible, that seems to me to be irresponsible. It is extraordinary that to date the Government have taken no steps to put that right.
During the last five or six years a substantial number of pits have been closed and abandoned. I have taken a particular interest in the matter since I served on the Standing Committee that considered the Bill that became the Coal Industry Act 1987. It was drawn to my attention that pits were being closed, even though alternative operators had applied to British Coal for licences to take over those pits. Their applications were refused outright. There was no discussion. British Coal was not interested. The Government were not prepared to intervene in the management of British Coal.
I refer specifically to Betteshanger pit in Kent, the first one drawn to my attention. A miners' consortium was put together and applied to British Coal for a licence to take 115 over the pit. British Coal turned down the application, vandalised the pit, removed the machinery and flooded it irretrievably. That pit was lost for ever.
At about the same time, British Coal mothballed the Monktonhall colliery in Midlothian. The Minister will no doubt know that that pit has substantial reserves of low sulphur coal—admittedly in a narrow seam. Nevertheless, it is a pit which British Coal says that it is willing at least to keep mothballed until it concludes its review next month. The miners' consortium there has had a little more time than the Kent consortium had; it had precisely six weeks from the moment that British Coal announced closure to the point at which it abandoned and flooded the pit. British Coal gave the Monktonhall miners three years' notice. The consortium that has been formed has therefore used that time to promote its case energetically and with a great deal of enterprise.
The consortium has tried to identify how much support there is within the local community for reopening the pit. There are many skilled miners in the area who were made redundant as a result of the closure. Many of those miners —I have met a number of them—are working on buses or as security guards, and so on. They are anxious, interestingly enough, to get back to their pit. They believe that they can make it pay. Regrettably, however, every attempt to have their case supported at political level has been frustrated. The charge falls mostly on the Government. Their attitude has been, "The licensing of coal mines is entirely a matter for British Coal. We are not prepared to intervene in the management of British Coal."
If we had a written constitution or proper accountability, no Government would be allowed to get away with that statement. They are the custodians of our coal reserves. They should be accountable to this House. However, the Government refuse categorically to be accountable to the House. The consortium told me that it made numerous requests for meetings with Ministers or civil servants, that it has had replies from 18 different civil servants in the Department of Energy, but that on no occasion has any official or Minister been prepared to meet it, under any circumstances. Members of the consortium held a press conference in the House last week which was attended by five hon. Members. It was apparent that their frustration was reaching its limit. They were extremely angry about the way they were being treated.
Conservative Members should be aware that that consortium comprises skilled miners who have said that they are willing to acquire shares in a company owned by the consortium to take over the running of their old pit. They are willing to put up £2,000 each of share capital and they have been offered finance by private institutions. They are not looking for one ha'penny of public money or public funds to take over the pit. They simply want the right to secure the licence and operate the pit and so demonstrate whether they can succeed where British Coal has failed.
Some people have been sceptical, but, as the consortium has pointed out, there has been no constructive response to the proposals. The consortium has simply been greeted by a blank wall. That is a disgrace.
It is important that we hear the Minister's response to my points. However, there is also considerable frustration and disappointment in the community about the treatment 116 that the consortium has received from the local Labour party. The Labour party has not been supportive, because it insists that, if the pit is to reopen, it should be reopened by British Coal. That is a betrayal of the interests of working people in the area who are prepared to put money where their mouth is and who have skill and commitment, but who have received no support from the Labour party.
The community concerned has no quarrel with the National Union of Mineworkers. The workers have all said that they are willing to be NUM members and that would substantially increase NUM membership in Scotland which has been devastated. The Labour party and the NUM seem determined to ensure that British Coal continues to run the pit, in spite of its record of destroying pits and failing to make the pit in question profitable.
§ Mr. Barron
The hon. Member for Gordon (Mr. Bruce) is making a point about people letting those workers down. The Scottish NUM is against the proposal and the hon. Gentleman says that the Labour party is against it as well. The hon. Member for Gordon was a member of the Standing Committee that examined last year's Coal Industry Bill which restricted the number of people who could work in a coal mine to 150 and there have been numerous parliamentary questions about that since. Does the hon. Gentleman know of any mine run by British Coal at the moment which has long wall faces underground at the depth of the face at Monktonhall that could sustain a work force of 150 at that face? If he cannot name such a pit, are not he and others misleading the miners because, under current legislation, they could not run that mine anyway, never mind all this waffle about investment?
§ Mr. Bruce
The hon. Member for Rother Valley (Mr. Barron) should meet the miners concerned and hear what they have to say. They are prepared to put their money where their mouth is. They believe that they can do it. They know the pit and all they want is for the Labour party not to oppose what they are trying to do or to frustrate them in their attempt to secure the licence for their own mine. They are not asking the Labour party to back them and they are not asking for public money. They simply want to know why they are being opposed and frustrated and why only a particular option is to be considered. Those miners have no confidence in British Coal ever making the pit a success if it reopens it—and that is doubtful.
A review is to take place in June, although British Coal has not said exactly when. The assurance I seek from the Minister is that if British Coal, in reviewing the pit by the end of June, has not made a clear statement that it intends to reopen the pit by an agreed and realistic date and begins to take back the miners involved in the consortium and others, the Government will intervene to allow alternative licences to be operated and will recognise the consortium's commitment and its right to have an opportunity to take over the licence. That is the minimum that it is entitled to expect from the House. The refusal to date even to offer members of the consortium a meeting is a disgrace. I assure both parties that there are people in the county of Midlothian who are extremely angry at the way they have been treated after more than two years of determined commitment.
The hon. Member for Rother Valley rightly referred to the Coal Industry Act 1990. He will remember that I tabled an amendment to the Bill, suggesting one of two options 117 —first, that the ownership of coal reserves should be transferred to the Department of Energy and that the Department should allocate licences, as with oil and gas; secondly, as a moderate fallback position, that when British Coal refuses to offer a licence there should be a right of appeal to the Secretary of State. Therefore, people could not be treated with the stonewall of silence and non co-operation. One would have thought that, of all people, Tories would like to encourage such enterprise from people in their own communities who know their own industry.
I have been so concerned with this matter that I have tried to explore what pressures might be brought to bear. I took up the matter initially with the Director General of Fair Trading, Sir Gordon Borrie, indicating that British Coal was abusing its monopoly position. Quite reasonably, he replied to me saying:I have to say that although I recognise your concern at the possibility of British Coal's deciding to close Monktonhall colliery without giving the others the opportunity to operate it, I am not able to intervene in that matter under the United Kingdom competition legislation. This is because the treaty of Paris gives the European Commission the exclusive jurisdiction to investigate the possibility of a producer of coal abusing its market power or behaving anti-competitively.I have done what Sir Gordon Borrie suggested and I have passed the entire correspondence to Sir Leon Brittan, the Commissioner responsible for competition in the European Community, and suggested that he should investigate the matter. My suspicion is that the reason why the Government have not been prepared to intervene is that they have made it clear that they wish to privatise British Coal. As with other privatisations, they want to privatise a monopoly—a single entity—and the last thing they want to see is the emergence of a possibly successfully managed pit under different ownership that will in some way depress the flotation price of British Coal.
I challenge the Government to demonstrate whether they have any real commitment to enterprise when it is demonstrated in a local community, and allow them a chance—that is all they are asking—to prove themselves.
On many occasions during the coal strike Conservative Members asked, "Why don't you give the miners the chance to run their own pits?" Now that miners are asking for a chance, what do they get from the Government? They get complete and absolute silence and a refusal to address the issue. That suggests a double standard.
I have also contacted the Select Committee on Energy on this matter. I heard an indication of interest from the 118 Chairman of the Committee, who thinks that pits should be offered to miners. Other members of the Committee have also indicated that they will want to know from British Coal—indeed, the Committee has written to British Coal—the outcome of the review. I have no doubt that if the outcome of the review is that it intends to close the pit without offering any other operators the chance to take it over, the Committee will wish to investigate British Coal's motives.
I noticed the Minister exchanging sly glances with the hon. Member for Ashfield (Mr. Haynes). This is a very interesting test case. The hon. Member for Rother Valley is entitled to say that he does not believe that that consortium can operate profitably. I wholly accept that the hon. Member for Rother Valley has long experience of mining. I do not dispute that. However, counter to that is the fact that if a consortium of miners who have worked a pit, know a pit, have their own mining consultant, and financial backing which requires no investment of public money, wish to take over that pit which British Coal has not succeeded in mining profitably and apparently has no interest in continuing to operate, surely even the hon. Member for Rother Valley could conclude that they should be given a chance to prove whether they are right. It is only their money and their backers' money that has been put at risk.
§ Mr. Andy Stewart
When the Blidworth colliery in my constituency closed, we did exactly what the hon. Gentleman is talking about. Miners and another operator wished to reopen the mine and were refused by British Coal to operate under a scheme which would have been viable. I can understand the hon. Gentleman's expression of anger.
§ Mr. Bruce
I am grateful to the hon. Gentleman. I know that other hon. Members have been involved in similar schemes. We still have not had any satisfactory response from government sources. I repeat that the Government's performance has been disgraceful.
The chairman of the consortium, Jackie Aitchison, said to me, "If we had come to Government as Japanese offering the possibility of creating 500 jobs in a depressed part of Scotland and required no public investment, would we have been treated in this way for showing indigenous enterprise in our own community, or would we have been treated differently?" We know the answer; the Government's behaviour stinks.
§ Mr. Frank Haynes (Ashfield)
I wish to make a speech in this debate and I have saved it until the end. The Government have a nerve to talk about restructuring the coal mining industry and providing money to do it after they have destroyed the industry. I went into the industry in 1944. We had an industry then, but we have a tiny industry now. This Government have destroyed it.
It is all right for the hon. Member for Sherwood (Mr. Stewart) to try to protect his back by telling the House what he did about Blidworth. When we had the debates about pit closures, he went into the Aye Lobby for the closures. He did not tell the people at Blidworth about that. I will tell the hon. Gentleman something else. I spoke to the gentleman who chaired the public meetings supported by the Bishop of Southwell to stop the closure. What did Bernard Savage, the chairman of the group in the village of Blidworth, tell me? The hon. Member for Sherwood did not lift a finger to help stop the closure of the Blidworth pit. But that was only one pit closure.
Then the hon. Member for Sherwood tried to cover his back by making it look as though he was fighting for the industry. He shouted his mouth off to the Nottingham Evening Post about Labour Members not being in the Chamber to vote against the Associated British Ports (No. 2) Bill. That was how he tried to cover his back.
§ Mr. Haynes
Indeed, where were all that lot? I will tell the House where the Minister was. He was the Minister for Sport. What does he know about mining?
§ Mr. Haynes
When did he go down a pit? If we had a crack in the floor, he would fall into it and we would lose him. I ask you, Mr. Deputy Speaker, the Minister in a pit. All that he was bothered about was boxing, football, rugby, rowing. He got a Cambridge blue. [Interruption.] He should watch out from time to time for my left hook. What does the Minister really know?
§ Mr. Haynes
It is no good the Minister talking to me from his seat. He should get up at the Dispatch Box. I will give way to him if he wants to have a go. We have already had a go today. I told him straightforwardly that I was going to belt him tonight. He does not know anything about the mining industry. They have put him up to handle this one tonight. We know what has happened in the industry and the way in which the Government have destroyed it, and how the hon. Member for Sherwood has helped them to destroy it. We fought against pit closures on the Opposition Benches along with the Liberals.
The Liberals were opposed to pit closures, I give them that. I remember the speeches that the hon. Member for Gordon (Mr. Bruce) made on behalf of the coal mining industry in the debates on the Coal Industry Bill. We did not always agree with what he said, but the principle that he supported was the interest of the mining industry. Yet Conservative Members were in favour of closure after closure.
§ Mr. Haynes
I shall give way to the hon. Member for Gedling (Mr. Mitchell). He is only a young lad yet. He does not know a deal about mining either, but I shall be interested to know what the intervention is about.
§ Mr. Mitchell
I am extremely grateful to the hon. Gentleman for giving way. It is most kind of him. May I take him back to the Associated British Ports (No. 2) Bill and ask him to explain something which has been bothering me——
§ Mr. Haynes
I am not scared. It is the hon. Gentleman who is scared. He has been scared by the recent district election results and he knows what will happen in Sherwood. We shall have a Labour Member elected there to represent the miners and he will sit on the Government side of the House after the general election, when the Prime Minister dares call it. We will have that ballot and there is no doubt that the miners in Sherwood will express their view of the hon. Gentleman and his representation of them. I ask you, Mr. Deputy Speaker. He has not fought for the miners—not like we have. We have fought from day one to save that industry, but the Government are talking about restructuring and finding the money.
Not long ago, the hon. Gentleman said that he supported opencast mining. He wants to have a word about it with the hon. Member for Amber Valley (Mr. Oppenheim), who is never here when we have a coal mining debate. Yet he fills the local papers with what he will do about the Government's policy on opencast mining.
§ Mr. Jack Thompson (Wansbeck)
Is my hon. Friend aware that 50 per cent. of the opencast coal that we produce comes from my county? The hon. Member for Sherwood (Mr. Stewart) is suggesting that, to save pits and miners' jobs in Nottingham, we must despoil the county of Northumberland. Is that how people should be treated?
§ Mr. Haynes
I am grateful for that comment but opencast mining will destroy part of my constituency and part of the constituency of my hon. Friend the Member for Bolsover (Mr. Skinner), who usually sits here. I remember our debate on opencast mining on the Coal Industry Bill and how this Government agreed to its extension. It will destroy the beauty of the place and beautiful lovers' walks. All that, destroyed for the sake of opencast mining.
The hon. Member for Sherwood has a beautiful constituency. It is correctly named Sherwood. It is beautiful, but he is agreeing to its destruction. The miners back there will remember the comments that have been made here today. Make no mistake about it, we will continue to remind them of what he said about opencast mining.
RECHAR involves money from the European Economic Community to help communities in areas where these Tories have agreed to pit closures. Mr. Millan is right to stop that money. He is holding it back because the 121 Government are interfering. They want to spend the money on what they want. The important point is that EC Commissioner Millan says that that money should go to help communities cope with pit closures. This Government are on the fiddle again. They are always fiddling, Mr. Deputy Speaker, and they are trying to fiddle this RECHAR money away from where it should go. That is why we are saying what we are today. Bruce Milian is right to hold it up while this lot is on the Treasury Bench. I hope that the young Minister will let the Treasury know in no uncertain terms what we feel about this. That money should not be touched. It should be allowed to go to the mining communities for the purpose it was meant for.
I shall finish on this point—[HON. MEMBERS: "Yes."] I will go on a hit longer, then. Now hon. Gentleman have upset you, Mr. Deputy Speaker. You do not want me to go on too long, but they have encouraged me to do so. Yet I will live up to the Chair. I always respect the Chair. It is not often that you have to call me to order, Mr. Deputy Speaker. I did not follow the road on which the hon. Member for Gedling tried to take me.
Conservative Members must realise—Labour Members realise it only too well—that when a pit is closed all the workers' facilities also disappear. They have been provided for the community and village after village in Nottinghamshire, especially in my constituency and in Derbyshire, has lost the welfare facilities that were provided for the community. Once the pits go, no contributions are made towards the welfare facilities.
In my constituency, the local football club, Sutton Town, which has been going since 1895, goes to the constituency of my hon. Friend the Member for Rother Valley (Mr. Barron) to play the team at the pit where he used to work.
§ Mr. Haynes
It might be in your constituency, Mr. Deputy Speaker—I do not blinkin' know. All I know is that the team of my hon. Friend the Member for Rother Valley comes to my constituency to play my local team.
§ Mr. Haynes
You are out of order, Mr. Deputy Speaker. You dragged me into this position. I did not intend to mention you. You should be independent and should not enter the argument. You brought yourself in and are now making me look a twerp.
Sutton Town football club, of which I happen to be the president, went to play the team at the welfare ground of the pit where my hon. Friend the Member for Rother Valley used to work. We drew 4–4. Because that pit is still working, the welfare facilities are maintained, but further down the road, where the pit has been closed, the welfare facilities have gone.
If the Under-Secretary of State, the hon. Member for Lewisham, East (Mr. Moynihan), is listening, he will realise the great loss to those mining villages when their pits are closed. I know that he understands sport, because he was involved in it at university and, a few years after he entered Parliament, that lady at No. 10 appointed him as Minister for Sport. He and I are so interested in sport that, one night, we shaped up between the doors of the Chamber. He was about to throw a left hook when 122 Madam Deputy Speaker walked through the door and he did not know what to do with himself. Sport is destroyed when pits are closed.
I want the Government to refrain from what they are trying to prove tonight. I want a real restructuring and proper money invested. Let us save the remaining mining industry so that money is made available to do the job properly and those who have jobs do not have to be laid off, as they have been since 1979 when the Government came into office and created real problems in the mining communities.
If the Minister comes to my constituency he will see the problems that the Government have created there, and he will see them if he visits Sherwood. They are particularly noticeable at Blidworth, where work has been destroyed because the pit has gone. The hon. Member for Sherwood agreed with that happening and did nothing about it. His constituents will remember that when the Prime Minister calls an election and will do something about it. I want the Government to leave the money from RECHAR to help the mining communities, as it is meant to do.
§ Mr. Kevin Barron (Rother Valley)
With the leave of the House, I should like to take up the comments of my hon. Friend the Member for Ashfield (Mr. Haynes) on RECHAR. I know that it is not entirely a Department of Energy responsibility, but will the Minister say exactly what will happen about redundancies?
The hon. Member for Sherwood (Mr. Stewart) must explain his attack on the Labour party. We have said nothing more than what the Flowers Commission said when it looked into coal and the environment and what many other organisations have been saying for many years. It said that opencast coal should be limited. If the hon. Gentleman is in favour of it, he should be addressing the question not just to hon. Members who are present, but to his hon. Friend the Member for Amber Valley (Mr. Oppenheim) and many more, including his hon. Friends the Members for Leicester, North-West (Mr. Ashby) and for Cannock and Burntwood (Mr. Howarth) and those in the north-west of the country, including his hon. Friends the Members for Bury, South (Mr. Sumberg), and for Chorley (Mr. Dover), and the Minister for the Environment and Countryside, in whose area there are major plans.
The Coal Industry Act 1990, which the hon. Member for Sherwood supported last year, extends into the private sector the right for people to go out, look for and mine opencast coal. It will be a major problem in future years if it is not curbed. It is something about which the Government have done nothing.
I do not know where the hon. Member for Sherwood got his information, but I do not accept his argument about having to keep 15 pits open. Anybody who has studied the subject for many years will know that that is not so. That argument is used by the opencast mining executive of British Coal and people involved with private opencast coal mining, but that is an entirely different issue from whether deep-mine pits are being kept open.
I should like to place on record exactly what is happening at Monktonhall colliery. The hon. Member for Gordon (Mr. Bruce) mentioned the Select Committee on Energy. When it sits to take evidence, any hon. Member can go and listen in the public gallery. I was there last 123 Wednesday, when the chairman of British Coal was giving evidence on the future of the coal industry and coal markets. He went into some detail about the position at Monktonhall as seen by British Coal.
The reason why the pit is in its present state is not that given by the hon. Member for Sherwood. Direct questions were asked about Monktonhall. Dr. Ken Moses, a senior member of the board who was present, told the Committee of the current state of Monktonhall. He said that the shafts had sunk and there were pit bottom roadways and nothing else. He said that it would take anything up to 2,000 yd of driveages to get a long wall face. The hon. Member of Gordon shakes his head, but I shall explain what is happening in Monktonhall and why organisations such as the Labour party and the Scottish National Union of Mineworkers are arguing that it should be opened by British Coal.
Some 1,000 to 2,000 yd of roadway must be sunk, which costs about £1,000 a metre. Capital investment must be obtained for face machinery that costs anything from £5 million to £7 million, depending on the type of equipment used. Dr. Moses estimated that opening and working one coal face at Monktonhall would cost about £10 million and £20 million—I wrote the figure down, although I do not have it with me.
I think that Monktonhall should be opened. The only reason why it has been mothballed is the state of the Scottish electricity industry and the stream of pressurised water reactors, which has created an over-production of electricity in Scotland. The electricity cannot be removed from the country, because the interconnectors are not strong enough to get it to England. Monktonhall is a national asset that we should hold on to. I wish that all the 500 miners could go back to Monktonhall next week, but to have to put in £2,000 each to open up the colliery is not right.
Another important factor, given that coal is to be produced there, is how it will be sold. Inevitably, it is likely to have to be sold through British Coal, which undertakes the major marketing for the private sector in this country. British Coal concludes the marketing agreements. It costs the private sector money for British Coal to sell the coal.
The best way of opening Monktonhall is through the public sector. I, like the hon. Member for Sherwood, would like to hear something from the Minister tonight to show that the Government are committed. If the colliery is not opened in that way, the project will fall flat, as have collieries in Kent and south Wales, where consortiums and international companies have taken them over. We have heard only hype and seen only failure. However, everyone should argue next month that British Coal should reopen Monktonhall. That is the way to secure its future.
§ Mr. Malcolm Bruce
I shall not pursue the argument at length, because the consortium will make its own case. It has established markets, and it believes that the operation can be successful. Whether it achieves success is a matter of opinion. However, if British Coal decides that it will not reopen at the end of June—that would be a sign that it sees no future for Monktonhall, as that decision would be based on a judgment that it could not get a return on its investment—would the hon. Gentleman support the consortium? Would he take the view that, in those 124 circumstances, the consortium should be given a chance on the basis that the alternative is complete closure and the abandonment of the pit?
§ Mr. Barron
In those circumstances, my answer would be yes. As I said earlier, however, under the law it is not possible to have more than 150 employees at any one time in this context. The hon. Gentleman should know that, because he was a member of the Committee that considered the relevant legislation last year. As I said, the public sector offers the only chance, perhaps, of keeping the mine open.
§ Mr. Allen McKay (Barnsley, West and Penistone)
Blidworth colliery made a clear profit of £2 million. The question that managers ask is where the £10 million came from for investment at the coal face.
§ Mr. Barron
My hon. Friend puts the issue in a nutshell.
As I said, British Coal gave evidence last week before the Select Committee on Energy. It said that the pit would be offered to a consortium, but within the terms of current marketing restraints. I do not hold out much hope, but I do not wish to be accused of pouring cold water on hopes for the future. I am in favour of keeping the mine open. That would be good for Scotland and good for the nation generally. There is the problem of overproduction of electricity in Scotland, but that will not be with us for ever. The solution of that problem may open the door for Scottish coal.
§ Mr. Jack Thompson
The hon. Member for Gordon (Mr. Bruce) talked about thin seams. If he is right, it will be costly or uneconomic to install equipment to extract coal. Will my hon. Friend elaborate on that?
§ Mr. Barron
I am not sure about thickness, but the coal is mineable. I think that we should leave it at that. If the coal were not mineable, British Coal would not have spent about £500,000 a year to keep the pit ventilated and open after the work force left.
I hope that the Minister will respond to my call that coal-mining areas that are losing jobs should be offered help, including retraining. I hope that British Coal Enterprise Ltd. will support new jobs in coal-mining areas that are losing out.
§ 11.8 pm
§ The Parliamentary Under-Secretary of State for Energy (Mr. Colin Moynihan)
First, I congratulate my hon. Friend the Member for Sherwood (Mr. Stewart) on his excellent contribution to the debate. He is the miners' friend. No hon. Member makes more representations to my Department or more assiduously lobbies my ministerial colleagues in the Department than my hon. Friend, the miners' friend. I congratulate him again on making a forceful and powerful contribution to our proceedings.
We have concentrated on the RECHAR debate this evening. I am grateful to the hon. Member for Ashfield (Mr. Haynes) for explaining that responsibility for local government finance rests with the Department of the Environment and the Treasury. There have been recent discussions between the Department of Trade and Industry, the Department of the Environment and Commissioner Millan about the United Kingdom's policy on additionality. As Opposition Members said, the Commissioner pressed for fundamental changes in the way 125 that EC grants are treated and to the British public expenditure system. Ministers have agreed to consider the implications of what he has said.
Opposition Members have been critical of British Coal Enterprise and have questioned whether the finance made available to BCE from the Government and the RECHAR scheme is adequate.
First, it is extraordinary that the hon. Member for Rother Valley (Mr. Barron) should criticise BCE. The management of BCE have achieved remarkable successes since the start-up in 1984—successes recognised by some Opposition Members. The hon. Member for Wentworth (Mr. Hardy), for instance, recognised them in a sedentary intervention earlier. The management have assisted in the creation of about 70,000 job opportunities in mining areas. In the job and career change scheme, singled out for criticism by the hon. Member for Rother Valley, on average 85 per cent. of those seeking another job have found alternative employment. Under the soft loan scheme, BCE has approved more than 3,000 loans to new or expanding businesses, including about 40,000 new job opportunities. Under the managed workshop scheme, BCE is supporting about 90 workshop sites on which about 10,000 people are employed. They provide a sheltered environment in which young businesses can grow until they are ready to move into a normal market environment.
Secondly, the hon. Member for Rother Valley seems to be under the misapprehension that RECHAR finance is already available for BCE. The United Kingdom has applied, as he knows, for RECHAR funds in respect of BCE. Those funds should be received within the next year or so. They have not yet been received, however, and I am grateful to the hon. Member for Ashfield for correcting his original remarks to the effect that they have already arrived.
Thirdly, the level of assistance to BCE, including a £60 million credit facility and annual restructuring grant assistance of about £5 million a year has been quite enough to fund all BCE management's proposals for job creation. The source of BCE funding—so far, it has been Government money—has not in any way limited BCE's activities. We shall welcome the RECHAR finance when it is received, but I make the important additional point that BCE is increasingly recycling repayments from successful business schemes backed over the past few years. In many ways, that is the true measure of its success.
The hon. Member for Rother Valley rightly mentioned expected redundancies. As the order, which allows the payment of restructuring grant for 1991–92, is linked to expected redundancies, it is only right in the current financial year that I should discuss the redundancies in a little more detail.
Hon. Members will know that it is for British Coal to decide what manpower it requires in the light of the tonnage that it can profitably produce and sell in competition with other fuels. The Government need, however, to make some estimate of the number of redundancies in the year in order to seek the necessary estimate provision for restructuring grant. This cannot be an exact science, given the uncertainties involved in the process of consultation and review with the unions and work force that British Coal goes through before any closure is finally confirmed.
This year, the total provision for restructuring grant, being sought is £300 million. That figure is estimated to be 126 sufficient to meet the costs of about 6,500 industrial redundancies, after allowing for grant expenditure in respect of some 2,000 workers who left towards the end of the last financial year but who did not attract restructuring grant payments until the current year. The Government will continue to meet the costs arising from past restructuring through other grants. In particular, weekly payments to beneficiaries under the redundant mineworkers payment scheme, which closed to new applicants in March 1987, are not affected by this order.
The order must been seen in the context of the continuing changes occurring in British Coal's commercial environment and of the Government's continuing support for the corporation's firm and businesslike response to those changes. Although British Coal's latest results are still being audited, the corporation expects to have made a modest bottom-line profit in the past financial year. The corporation also managed to live within the external financing limit of £905 million set by my right hon. Friend the Secretary of State at the beginning of last year, with an expected outturn of about £889 million, representing a saving of about £16 million.
The average colliery output per man shift was 4.7 tonnes overall, an increase of about 8.8 per cent. on 1989–90. I am sure that Opposition Members will join us in congratulating British coal's work force on their achievements and in expressing our hope of more to come.
The debate on Monktonhall has been interesting and important. The complexity of the issue was shown by the exchanges between Opposition Members whose knowledge of Monktonhall is far greater than mine. I understand that meetings are under way and I was surprised to hear what the hon. Member for Gordon (Mr. Bruce) said. I shall look further into the issue and shall consider what he said carefully. I shall ask my hon. Friend the Parliamentary Under-Secretary of State with responsibility for coal to respond. I give an undertaking to the House that that will be done, not least because the hon. Gentleman made some strongly worded and deeply felt comments about the lack of a response from the Department. I listened carefully to what he said and I am sure that others outside the House—especially British Coal—have also listened carefully or will read carefully what he said and that that will lead to action.
On one point, the hon. Gentleman drew my attention to my responsibilities in other sectors of energy, especially oil and gas. There is a clear statement of reserves in the report and accounts of the British Coal Corporation. In detail on page 8, under "Reserves"—I shall not quote it all—it says:The Corporation's estimate of coal in place in the United Kingdom (that is in seams over 60 cms thick and less than 1,200 metres deep, minus coal which has already been worked) is 190 billion tonnes.It goes on to detail technically recoverable reserves. It is valuable, not least because it parallels much of the important information available in the Brown Book on the oil and gas sector.
I have not covered every point in detail. If there are any specific points that I have not covered, I shall study Hansard and take them up.
I commend the order to the House.
§ Question put and agreed to.
That the draft Coal Industry (Restructuring Grants) Order 1991, which was laid before this House on 15th April, be approved.