Energy (Fair Competition) (Hansard, 13 January 1993)

§ Mr. Harry Barnes (Derbyshire, North-East)

I beg to move,

That leave be given to bring in a Bill to eliminate unfair competition in the import, production and sale of coal, oil, natural gas, nuclear power, electricity and other primary and secondary energy sources. The aim of this Bill is unashamedly to save the pits and to defend coalfield communities. This is an appropriate day on which to introduce the measure as, 100 years ago today, Keir Hardie, who had been a Scottish miners' leader, met fellow socialists at the inaugural conference of the Independent Labour party. The conference was held in Bradford and at that time Keir Hardie was editor of the paper that he had founded, which was appropriately named "The Miner". By 1893, Hardie was already a Member of Parliament and was fighting the cause of the unemployed. My Bill is directed at preventing further unemployment today, and is, I hope, in the tradition of that great Labour pioneer.

The need for my Bill arises because of the Government's failure even to debate in the House the threatened pit closure programme. All that we have heard from the Government is a statement from the Secretary of State for Trade and Industry on 19 October, almost three months ago. It has been left to the Opposition to raise the issue, through an Opposition day debate, through initiatives by Members at Question Time, and on an earlier ten-minute Bill introduced by my hon. Friend the Member for Sunderland, North (Mr. Etherington). Otherwise, the pit closure issue has emerged only through the invaluable work undertaken by the Select Committees on Trade and Industry and on Employment.

Deep-mined coal faces a crazy situation. Mines are breaking productivity records, yet a fixed and fiddled energy market denies British Coal the opening to sell sufficient of its highly efficient production. The Bill will unfix the fix against the coal industry. It is a fix to guarantee sales to uncompetitive producers in the nuclear power industry and gas-fired power stations, while electricity is also being unfairly imported through a French interconnector and dumped imports of foreign coal, and through orimulsion, which has a high sulphur content.

Under the legislation to establish electricity privatisation, regional electricity companies are obliged to purchase a slice of their electricity from non-fossil fuel sources. In practice, such purchases come overwhelmingly from nuclear power. In addition, there is an 11 per cent. levy on electricity supplied to consumers from fossil fuel generation. Under the arrangement, nuclear power generation is subsidised to the tune of £1.3 billion per year and it is set to remain in place until 1998. The subsidy is being used to extend the lives of the obsolete Magnox stations and for the construction of Sizewell B.

The Bill will offer the Government two options: either the nuclear levy will be abolished and assistance be provided only to the nuclear industry for decommissioning projects, which will lead to the closure of the high-cost Magnox power stations and create a market for between 7 and 8 million tonnes a year, or the coal industry will have to receive the same subsidy as the nuclear industry—a move that would lead to a dramatic growth of export revenues for our home production and stimulate growth in the British economy.

926 Gas-fired stations are being built independently of National Power and PowerGen. Their new capacity would displace 30 million tonnes of coal a year. In the main, the gas-fired stations have important links with the regional electricity companies—often through an equity stake. Those stations have already secured or intend to secure long-term sweetheart contracts with their regional electricity companies. Those contracts will usually last up to 15 years.

The link between the electricity producer and the supplier makes economic sense to the regional electricity companies, but not to the customers. The new gas-fired stations wil be more expensive than the existing coal-fired ones. My Bill would halt that economic madness by suspending long-term contracts for those gas-fired stations and by obliging them to sell their electricity in open competition. As a result, some 20 projects in the pipeline would probably be dropped, and gas burn would be reduced at other stations. That would also preserve United Kingdom reserves which would otherwise be dangerously depleted.

There is a two-way link between the national grid and France, but, in practice, it has become a one-way system for the import of French electricity to Britain. That has occurred in part because of the competitive advantage given to French electricity by the fossil fuel levy in England and Wales. The current contract with the French expires in March 1993, and my Bill is designed to prevent it from being renewed. That would create a market for 7 million tonnes of coal a year.

It would be of little competitive advantage to the deep-mined coal industry of Britain, however, if its potential sales were mainly picked up through further coal imports and the expansion of opencast production. There is evidence that coal imported into the European Community, including the United Kingdom, is being exported at prices below those at which such coal would be sold on its domestic market, and below its production cost.

My Bill would therefore ban the import of coal into Britain unless it could be proven not to be dumped here. Certified and checkable claims would have to be issued for the place of origin of that coal, its home market price and the cost of production. Furthermore, my Bill would require action by Britain, through the European Commission, to seek to extend that practice into other member states. For instance, 95 per cent. of Danish electricity is produced from coal that is currently imported from Colombia, but that contract is shortly to be transferred to South Africa.

The opencast coal potential in Britain is massive. The remaining pits in Derbyshire are threatened with closure, but the area is in danger of being swamped by opencast mining, which would result in massive social and environmental costs. Opencast mining, however, occupies a uniquely privileged position in the United Kingdom planning system. Mining planning guidance note 3—MPG 3—provides presumptions in favour of such planning applications and inhibits the work of local authorities seeking to act on behalf of their communities' interests.

My Bill would abolish MPG 3. Stricter conditions would be laid down for opencast applications, to include the distance of the sites from communities and the need for rail links for the movement of coal from those mines. My Bill would contain a formula to ensure the guaranteed life of all existing pits, which would ensure that commercial practices and delegated legislation are not subsequently 927 introduced to defeat its effects. That formula would be based on an assessment of the size and extraction rate of coal reserves.

I seek leave to bring in the Bill, the exact drafting of which I am still prepared to discuss with the President of the Board of Trade, given that I have now beaten him to the task.