Pit Closures (Hansard, 15 December 1992)

§ Mr. John Evans (St. Helens, North)
I am delighted to have the opportunity to raise on the Floor of the House the question of the 10 collieries remaining on the Government hit list for closure. It is psychologically important that the issue be ventilated in the House, because the knowledge that it is before the House now, and will be continually before us when we return from the Christmas recess, gives heart to the coal miners affected.
As you are aware, Madam Speaker, I sought an Adjournment debate because of the unsatisfactory answers given by the Minister for Energy to Trade and Industry questions a couple of weeks ago. However, the real background to the debate is the announcement made by the President of the Board of Trade on 19 October to the effect that he proposed to agree with the Coal Board and close 31 collieries, putting more than 30,000 miners out of work and more than 60,000 related workers out of a job as a direct result of the closure programme.
That programme was the most savage rationalisation that a Government have ever attempted to inflict on any industry or sector of industry in this country in such a short time. It was immediately greeted with massive outrage by the British public. There was a mixture of motives behind that outrage, but it is fair to say that most people regarded the closure programme as one of the worst cases of industrial vandalism that they had ever witnessed. There was also great anger that the Tory Government sought to take vindictive revenge on the miners. The public were also aware of the massive waste of coal reserves, which do not belong to the Government, or to one generation, but to the people. Millions of tonnes of those precious reserves were to be left in the ground.
There is no doubt that the uproar generated shook the Government to their foundations so much so that when a debate was to take place on a Labour motion 48 hours later, on 21 October, the Government caved in before the debate started. To our astonishment the President of the Board of Trade, who on Monday had not mentioned the word "review", announced a review of 21 of the 31 pits originally scheduled for closure. The right hon. Gentleman said that 10 pits would remain on the closure list, but, according to him, and according to the Secretary of State for Wales, who wound up the debate on that fateful night, even those 10 would be subject to a full review and genuine consultations.
The Secretary of State for Wales spelled the pledge out categorically, saying: Let me make matters absolutely clear about the 10 pits. British Coal is under a statutory duty to consult on those closures … It must be a genuine consultation. British Coal has given the criteria to show that those pits are currently loss making and have no prospect of viability in the foreseeable future. If there is any serious doubt about whether those criteria apply, British Coal will have to demonstrate that the doubt is removed and that the criteria have been met, because, under the legislation, it not only has to give reasons for closure, but it must prove that the consultation is a genuine one. That is absolutely clear."—[Official Report, 21 October 1992; Vol. 212, c. 526.] The Secretary of State for Wales used the words: loss making and have no prospect of viability". 406 I shall concentrate on those words, and relate them to Parkside colliery, at Newton-le-Willows, in my constituency, because it provides a good example of the impact on the other nine collieries.
The President of the Board of Trade made a statement on 19 October. In reply to my question about Parkside colliery, he said:
The figures that British Coal has shown me for that particular colliery indicate that it is not able to make a profit even in today's circumstances. That is the real world that I have to confront."[Official Report, 19 October 1992; Vol. 212, c.224–25.] I subsequently obtained British Coal's profit and loss statement for Parkside colliery, which I quoted in the debate on 21 October. I quote it again. In 1987–88, Parkside made a profit of £5,093,000. In 1988–89 it made a profit of £3,258,000. In 1989-90, it made a profit of £1,729,000. In 1990–91, it made a profit of £5,074,000. In 1991–92, after a difficult first six months when it lost money, it recovered so well in the second half of the year that the profit for the year was £2,874,000.
Those figures show any reasonable person that Parkside is a profitable colliery. The chairman of British Coal, at a meeting that I and eight or nine colleagues had with him and his senior officers at Hobart house on Wednesday 18 October, admitted that Parkside was profitable. At Trade and Industry questions on 2 December, I asked the Minister for Energy to publish the report by J. T. Boyd, which has lain on his desk since October 1991. I understand that the report maintains that five of the 10 pits on the closure hit list were profitable and that they should remain as part of a viable British Coal mining industry. The Minister ignored the question arid the report remains unpublished. I challenge him to publish the Boyd report, which he has had for 14 months, so that we can see what Boyd said about the pits.
Miners at Parkside colliery have been treated quite disgracefully. Following the statement of the President of the Board of Trade on 19 October, and notwithstanding everything that was said in the debate on Wednesday 21 October, on Friday 23 October NUM officials at Parkside colliery were brusquely told that coal production would end that day. Consultation on the viability of the mine, the likelihood of its being saved and its future have been non-existent.
In the statutory 90–day consultation period, which is required only to discuss redundancy, British Coal is insisting that every miner must report to work every day on his shift time, even though everyone knows that they will all be sent home. Some of those men must travel 30 to 35 miles to get to the colliery, and to bring men in at 5 am or 6 am is quite disgraceful. It is all part of British Coal's policy of putting psychological pressure on the men to accept redundancy payments.
What will happen to miners when the 90-day consultation period runs out? I hope that the Minister will answer that question, because miners certainly want to know. A brand new face at Parkside, which had cost £6 million to install, was ready to go into full production. Miners inform me that that face was the finest that they had ever had and, to quote their words, "they would have been printing money by Christmas" with that face.
Today, one face at Parkside is threatened with extinction. Despite British Coal's High Court pledge to protect the fabric of pits, the face known as W31 at Parkside is suffering serious divergence and the miners 407 there told me today that, unless that face is worked quickly, within a few days, it will soon become unpassable, and that would mean the end of that face. Every request that the miners and the union have made to cut coal on that face has been rejected by the management of the colliery.
The basic facts about Parkside are clear. Its performance in the last five years has been excellent. The pit had a difficult summer, largely because of unexpected geological problems with the installation of the new face, but by September those problems were widely viewed as having been solved. The new face offered every prospect of clawing back earlier losses. That assessment was made by the NUM's mining engineer, who emphasised that the availability of good, high-quality reserves did not appear to be in dispute. There are 40 million tonnes of coal reserves at Parkside colliery.
British Coal's claim that Parkside has no future is not based on a judgment of the pit's efficiency but on the market crisis facing British Coal. Coal reserves are to be abandoned, valuable machinery left underground and the skilled work force told that their right to work no longer has any value.
The Government talk much about the cost of keeping pits open. That is not the point. The real issue is the cost of closing them. The principal cost is that of a sizeable and, in all probability, long-lasting increase in unemployment, which is already unacceptably high. For example, at Parkside colliery there are 724 employees classified as miners. Each is entitled to a payment under the scheme of an average of £24,000. For every 100 miners made redundant by British Coal, the corporation also sheds 33 other employees, which means that British Coal will shed a further 239 jobs. Each of those will be entitled to a redundancy payment at least as good as that offered to the miners.
The end of mining at Parkside would mean significant job losses in firms that supply services direct to the colliery, including private contractors, suppliers of equipment and railway and road haulage workers who remove coal from the site. The effect on the economy of the north-west would be utterly destructive. There are no new jobs waiting to be taken by those made redundant. The adult unemployment rate in the St. Helens travel-to-work area is over 14 per cent. So added to the cost of the redundancy scheme are the costs of the dole. The annual cost of an unemployed worker is estimated to be £7,900 in terms of unemployment benefit and lost taxes.
Therefore, it is now possible to measure the cost of Parkside's closure. The average redundancy payments to 724 Parkside miners and 239 other British Coal employees would be about £23 million. The cost of 963 newly unemployed people, at £7,900 each, would be another £7.5 million, making a total in excess of £30 million. That is not counting the cost incurred by all the other workers in associated industries who would also be made redundant, the cost of which would, I suspect, add another £10 million to £15 million to the cost of closing Parkside.
The Government must put in place an energy policy that utilises the nation's coal reserves in an efficient and environmentally friendly manner. They must ensure a level playing field for British Coal to supply competitively priced coal in bulk volume to the generating companies.
408 The Government must restrict the dash for expensive gas and safeguard existing cheaper, coal-fired power stations. We must also press the European Community for a total ban on dumped coal within our borders. We must seek the support of the European Community to export British coal into the Community.

§ Mr. Dennis Skinner (Bolsover)
I am very pleased that my hon. Friend is making this very powerful case in respect of a pit that is one of the newest in Britain. It was developed only a few years ago in pit terms. I think that my hon. Friend will agree that, with 20 million tons of coal coming into Britain at this time, that represents nearly £1 billion loss on the balance of payments. We can ill afford that when we are about £12 billion in debt.
Is it not crazy to be sacking those miners at Parkside in my hon. Friend's constituency and miners in other constituencies, costing all that money with the dole, when German coal at £110 a ton is coming from the Common Market into Britain and we cannot sell what is the cheapest deep-mined coal in Europe?

§ Mr. Evans
I am grateful to my hon. Friend for his comment. He has saved me the necessity of suggesting that one of the other things that the Government could do is to give the same sort of support to our coal industry as the Germans have to theirs.
If such things are done in the review which the Government are carrying out, I submit that Parkside and most of the other pits will survive and have a prosperous future. Eighty per cent. of Parkside's coal goes just 12 miles by an environmentally friendly merry-go-round train to be burnt at Fiddler's Ferry power station. That power station, I understand, is now looking round for alternative supplies of coal, because obviously it is not getting Parkside coal, and it is increasingly concerned about the quality and the problems associated with imported coal being brought through the port of Bootle.
Parkside is a profitable pit. There is a market for its coal and it has an efficient work force. Perhaps the Minister will now explain why Parkside, with the record that it has, is doomed to closure if the Government's plans are carried out.

§ The Minister for Energy (Mr. Tim Eggar)
I congratulate the hon. Member for St. Helens, North (Mr. Evans) on securing this debate and on arranging it for a reasonable time of the night.
The hon. Gentleman referred to a number of points, such as imports, the possibility of exporting to the rest of the European Community and the point raised by the hon. Member for Bolsover (Mr. Skinner) about subsidies. Incidentally, I am sure it was a slip of the tongue, but of course there is no German steam coal for generation purposes imported into the United Kingdom; there is, however, some small amount of anthracite and coking coal imported and, as the hon. Gentleman knows, those imports displace other imports of anthracite and coking coal rather than United Kingdom coal. As he also knows, I am sure, the right hon. Member for Llanelli (Mr. Davies) has very firm views on the future of the anthracite mines in his constituency.
I have listened very carefully to the points made by the hon. Member for St. Helens, North with regard to matters that are the subject of the review. I am sure that he will not 409 be surprised to hear me say that it would not be right for me tonight to pre-empt the results of the review. We hope to publish it in White Paper form early in the new year and, as the hon. Gentleman knows, the Government are committed to a debate on the Floor of the House about that.
Furthermore, the hon. Gentleman will know that the Trade and Industry Select Committee is completing its investigations into this matter and my right hon. Friend and I were giving evidence to that Committee this afternoon.

§ Mr. Derek Enright (Hemsworth)
Is the Minister aware that the miners in the 10 pits have absolutely no confidence in this review because they feel that the fabric of the mines has been left in such a state that they cannot be resuscitated even if it comes to the stage when the Minister or the President of the Board of Trade, or even, God help us, the chairman of British Coal, decides that it shall so be?

§ Mr. Eggar
As the hon. Gentleman knows, there is a difference between the review to which I was referring—which covers the 21 pits—and the statutory consultation period, which covers the 10 pits which are, strictly speaking, the subject of the debate. Parkside is one of the 10 for which the procedure will be the statutory consultation period. I shall take a little time to explain the background to that because some questions are often asked about the 10 pits; a number of those questions were raised by the hon. Member for St. Helens, North.
It is fair to say that there has been some speculation about the basis on which the 10 pits were chosen. The answer to how and why they were chosen is straightforward and has already been explained to the House. They are the 10 pits which British Coal informed the Government were currently making losses and had no prospect of viability in the foreseeable future.

§ Mrs. Elizabeth Peacock (Batley and Spen)
Will my hon. Friend give way?

§ Mr. Eggar
I shall, of course, give way to my hon. Friend, but, as I was saying, those were the criteria on which the Government took the decision that the 10 pits should go to statutory consultation.

§ Mrs. Peacock
I am listening carefully to what my hon. Friend says. We continue to hear British Coal's view that the 10 pits were uneconomic. I understand that the Minister and the President of the Board of Trade say that they must accept British Coal's figures, but can the Minister tell me, the House and anyone else who is listening how we can get correct figures for those mines? We have been told that British Coal's official figures are not correct, that all those mines are not loss-making and do not have the bleak future that British Coal predicts.

§ Mr. Eggar
I shall deal with exactly that point later.
We are also asked why the 10 pits were not included in the moratorium and in the coal review. Again, the answer is straightforward—it relates to the economics of the pits, as we have been informed of them by British Coal.

§ Mr. Doug Hoyle (Warrington, North)
Will the Minister give way?

§ Mr. Eggar
No, I am sorry. I have already given way. It is not fair to the hon. Member for St. Helens, North, whose debate this is—

§ Mr. Hoyle
rose—

§ Madam Speaker
Order. The Minister appears not to be giving way.

§ Mr. Hoyle
On a point of order, Madam Speaker.

§ Madam Speaker
I hope that it is a point of order, not a point of frustration.

§ Mr. Hoyle
I do not wish to be critical, but I have as many constituents working at Parkside, as has my hon. Friend the Member for St. Helens, North (Mr. Evans), who spoke so strongly about it and I want to make a point to the Minister who has given way twice.

§ Mr. Eggar
rose—

§ Mr. Hoyle
I have not quite finished.

§ Madam Speaker
Order. The Minister is not giving way. If he is not giving way, there is nothing that the Chair can do.

§ Mr. Eggar
I am grateful, Madam Speaker. I shall try to make progress and if the hon. Member for Warrington, North (Mr. Hoyle) later still feels that I have not answered his questions and if time permits, I shall willingly give way.
The reason the pits are the subject of statutory consultation is that British Coal told us that the pits are currently loss-making and have no prospect of viability in the foreseeable future. Let me explain why. British Coal expects coal prices to its main customers—the generators—to decline significantly from next April. If the 10 pits are loss making at current prices, their position will clearly worsen at lower prices.
I stress that it is British Coal which is undertaking the current statutory consultation process, not the Government. It follows that representations—for ex-ample, where this or that pit is profitable or loss-making—must be best pursued in the context of those statutory consultations.

§ Mr. John Evans
Is the Minister aware that the miners and the National Union of Mineworkers constantly raise that point in the alleged or supposed consultations, but British Coal will not refer to the points to which the Minister has just referred?

§ Mr. Eggar
I will try to make rapid progress and then reach the points that have been raised.
It might help if I take this opportunity to spell out the nature of the statutory consultation process. The process is taking place under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 which was previously section 99 of the Employment Protection Act 1975. The participants are British Coal and the relevant mining trade unions. The process began at the end of October and the consultation period must be not less than 90 days. That is relevant to the point raised earlier about the 91st day.
Section 188 of the 1992 Act requires British Coal to provide the unions with specified information; to consider any representations made by the unions and to reply to the representations. That is clearly laid down in section 188.
British Coal informs us that it has sent the relevant trade unions an information package on each colliery. According to British Coal, the package includes the pit's performance, its financial results and other associated key data. The unions—if not Opposition Members—will have 411 that financial package. I believe that my hon. Friend the Member for Batley and Spen (Mrs. Peacock) is aware of that.
British Coal has said that the consultation will relate to all aspects of the proposed redundancies at the 10 pits, including the reasons for the decision for them to close; the numbers of men involved; the extent to which transfers may be possible; and the terms of redundancies and assistance available. I am told that British Coal has held statutory consultation meetings on each pit at group and colliery levels. Whether there are further meetings depends on the wishes of the trade unions.

§ Mr. Hoyle
Will the Minister now please address the powerful case made by my hon. Friend the Member for St. Helens, North about Parkside? The Minister has generalised about all the pits. My hon. Friend said that Parkside has always been profitable. A new face has just been opened and that would make it even more profitable. Will the Minister address the problems of that pit?

§ Mr. Eggar
The position for Parkside, as I am sure the hon. Gentleman is aware, is that because it is involved in the statutory consultation process, that process takes place between the trade unions and British Coal. The correct procedure is for discussions to take place between British Coal and the relevant trade unions. The Government are not party to that statutory consultation process under section 188 of the 1992 Act.
I have been informed by British Coal that it has made a package of information available to the unions. If the unions want further meetings—in addition to those that have already taken place—on the future of the pits, I am informed that British Coal will agree to those meetings. Under the provisions, the discussions must take place between—

§ Mr. Ian McCartney (Makerfield)
Will the Minister give way?

§ Mr. Eggar
I will give way, but I have only a few minutes left.

§ Mr. McCartney
Like my hon. Friend the Member for Warrington, North (Mr. Hoyle), I have constituents who work at Parkside. It is a last refuge as all the collieries in my constituency have closed since 1987. The Minister is not addressing the issue that British Coal gave a guarantee to the High Court to protect the fabric of the colliery. The President of the Board of Trade and the Secretary of State for Wales gave commitments in the House that they would ensure that that commitment would be upheld. My hon. Friend the Member for St. Helens, North is saying that that commitment is wilfully not being upheld and Parkside's face is collapsing. What is the Minister going to do about that? What steps is he going to take to ensure that in the next seven days that face is cut to protect the colliery? That is the real issue tonight. All the rest is a load of guff.

§ Mr. Eggar
British Coal has given us quite clear assurances about the way in which it will seek to preserve the fabric of the colliery. I remind the hon. Member for Makerfield (Mr. McCartney) that, after the Scargill strike of 1984, there was widespread concern that collieries would not be able to open and start producing coal. In fact, after a long period when there was no mining when there was nothing like the degree of care and maintenance that is being carried out at Parkside—