HC Deb 10 June 1992 vol 209 cc292-3
5. Mr. Hall

To ask the President of the Board of Trade what consulations he has had with the chairman of British Coal concerning future long-term contracts with the electricity generating companies.

The Minister for Energy (Mr. Tim Eggar)

I meet the chairman of British Coal on regular occasions and discuss a variety of issues.

Mr. Hall

That is a remarkable answer from a Department that now claims to be interventionist in industrial policy. Is the President of the Board of Trade aware that, before the privatisation of the electricity generating industry, it was announced that Fiddlers Ferry, a coal-fired power station in my constituency, was to use 2 million tonnes of imported low-sulphur coal a year? That would serve only to worsen our balance of trade deficit and to threaten jobs in the Lancashire coalfield, where Parkside is the only remaining pit, and it would leave us with sulphur dioxide emissions of 70,000 tonnes a year. Will the right hon. Gentleman now take urgent action to reduce coal imports, negotiate with British Coal to ensure that the power generating companies have a long-term coal plan, stop the dash for gas, invest in clean coal technology and rein back opencast mining?

Mr. Eggar

No. It is not an appropriate role for Government to stop coal imports, nor could we under our international obligations. However, I am confident of British Coal's ability at some collieries, particularly at the inland coal generating plants, to compete with coal imports. It must be the priority of all hon. Members to ensure that British Coal becomes world competitive. I am confident that it can.

Mr. Andrew Mitchell

Is my hon. Friend aware that it is the size of the contracts to be concluded between the coal industry and the generators, not the shape of the privatisation, that will determine the size of the coal industry in the future? Can he tell the House when he expects those contracts to be concluded?

Mr. Eggar

I am aware, as I am sure the House is, of the importance of those commercial contracts to the future structure and size of the British coal industry. I understand that negotiations are taking place between the generating companies and British Coal and the regional electricity companies and the generating companies. They are commercial negotiations, but I am taking a close interest in them.

Mr. Redmond

What discussions has the Minister had with the chairman of British Coal on importing dirty fuel?

Mr. Eggar

As I have already said, I have had a number of discussions with the chairman of British Coal on a variety of matters. As the hon. Gentleman will be aware, British Coal has alleged that coal has been dumped by certain countries, and those allegations are with the European Commission.

Dr. Michael Clark

Does my hon. Friend agree that one way to ensure that long-term contracts for British coal continue is to ensure that research and development into efficient and clean coal-burn technology continues? Does my hon. Friend have plans to ensure that our lead in that area is maintained, even after privatisation, by ensuring that the Coal Research Establishment at Stoke Orchard survives?

Mr. Eggar

I am well aware of the importance that my hon. Friend and others attach to clean coal and new coal-burning technologies and we shall take that into account as we go through the consultation process on the road to privatisation.

Mr. Dobson

Does the Minister recall that the Government's merchant bank advisers, Rothschild, advised the Secretary of State to intervene directly in the negotiations between the generators and British Coal to ensure that British Coal obtained high-take, long-term contracts? Will the hon. Gentleman take that advice and intervene; or is this yet another example of his having no such plans at the moment?

Mr. Eggar

I do not think that the hon. Gentleman has been listening. I made it clear that I understood that commercial discussions and negotiations were going on. I also made it clear that I am keeping a close watch on them.

Mr. Oppenheim

Would not limits on coal imports effectively be placing the interests of the coal industry above those of its customers, which include many energy-intensive industries employing millions of people in jobs which may well be lost if those industries are forced to rely on high-price domestic coal? Are not such trade barriers ultimately self-defeating —first for the protected industry which simply becomes cosseted and inefficient, secondly for its customers, who have to buy high-priced goods, and thirdly for the economy as a whole?

Mr. Eggar

As usual, my hon. Friend has put his point effectively and well. We are doing no one any favours by artificially raising energy prices both for the domestic consumer and for the major energy users. I remind my hon. Friend that, since 1979, the Government have made about £17 billion available to British Coal; that works out at a third of a million pounds for every one of the 50,000 people now employed in collieries, and it shows the extent of the subsidies and other assistance given to British Coal by this Government.