HC Deb 23 June 1993 vol 227 cc295-7
10. Mr. Etherington

To ask the President of the Board of Trade how many requests he has received from British Coal for a portion of the subsidy for expanding the coal market.

The Minister for Energy (Mr. Tim Eggar)

My right hon. Friend and I have not received any specific requests for subsidy from either British Coal or private sector producers.

Mr. Etherington

Does the Minister accept that that is likely to he the position for the foreseeable future? Does not he understand that, in effect, this subsidy was offered merely as a panacea to Tory Back Benchers who objected to the pit closures? Was not the White Paper whose proposals included the subsidy based on efforts to thwart the many positive aspects of the Select Committee's report, which had widespread support among the population?

Mr. Eggar

The hon. Gentleman seems conveniently to ignore the Select Committee's major recommendation—that the Government should make a subsidy available to bridge the gap between the cost of British-produced coal and world import prices. That is exactly what we did. My understanding is that, at present, independent coal producers and British Coal are having discussions with the generators about the possibility of agreeing additional contracts for the sale of coal. It is clear that, until those negotiations are at an advanced stage, it will not be appropriate for the Government to get into the business of handing out subsidies. We cannot do that in an open-ended way.

Dr. Michael Clark

Does my hon. Friend agree that, following publication of the White Paper, adequate financial provision was made to assist the British deep-mined coal industry? Does he share my disappointment that none of this funding has yet been called upon? Can he assure the House that the two major generators, which are major users of fossil fuel, are not abusing their dominant position and are aware of their national responsibilities?

Mr. Eggar

I very much agree with the sentiment behind my hon. Friend's question, which concerns the clear national responsibility of generators. During the coal review, the generators made it quite clear to my right hon.

Friend and me that they believed they would he in a position to contract for additional supplies of coal. We look to them to fulfil that indication. It is clear that, at a time when they have large stockpiles—coal burn is normally low at this time of the year—it is difficult for them to contract for supplies. However, we hope that they will enter into serious negotiations in the very near future.

Mr. Caborn

Will the Minister be honest with the House and the country and admit that the Select Committee's recommendations were totally ignored in terms of the central point that the President of the Board of Trade made on 13 October—unless the market for coal is enlarged, there will be no extra sales? The Government negated their responsibility. They gave a fix to Back Benchers and deceived the country by failing to address the central question of a larger market for coal.

Mr. Eggar

The hon. Gentleman simply cannot get away with rewriting the Select Committee's report, although he tries to do so time after time. The Select Committee did not recommend a restriction on gas stations; nor did it recommend the closure of Magnox stations. The hon. Gentleman should not go around misleading the country about what the Select Committee said; he should refer to the words of its report.

Mrs. Peacock

Is my hon. Friend aware that the two generating companies are refusing to negotiate any further contracts with British Coal unless the price is well below 80p a gigajoule? Is not that ridiculous when world prices are around 120p a gigajoule? The companies are looking for huge Government subsidies. Would not those simply transfer taxpayers' money into the companies' profits?

Mr. Eggar

The issue of the exact level of the world price is very complex. [HON MEMBERS: "Oh."] There is no point in the refusal of Opposition Members to recognise the marketplace. They cannot simply pluck a figure out of the air and claim that it is the market price. It was precisely because there are different perceptions of the world market price that, about 10 days ago in the House, I answered a question by saying that we were inviting from British Coal and from the independent coal producers indications of their production costs and of what they thought the world price was. Once we have received their responses, we shall be able to enter into discussions about the appropriate level of subsidy.

Mr, Robin Cook

Does not the Minister know that, since March, British Coal has been offering extra contracts at 40 per cent. below the core contract price? At that knock-down price, the generators can produce electricity more cheaply than they can from gas, nuclear power or even imported coal available on long-term contracts. Does not the fact that the generators would still rather ask consumers to pay for electricity produced from more expensive sources provide the final proof, if any were needed, that the market is rigged against coal?

Why does not the Minister admit that the White Paper was a fraud and was never intended to save the jobs of miners at the 12 pits, but was intended to save the jobs of Ministers in the House?

Mr. Eggar

Why does not the hon. Gentleman, for once, make his position clear? Does he want to close down the nuclear industry and the North sea oil industry and stop the development of gas-fired stations? Where does he want jobs to be lost?

Mr. Cormack

Is my hon. Friend aware that there is widespread feeling in this country that British Coal has not been as zealous in protecting the industry over which it has charge as it might have been?

Mr. Eggar

I hear what my hon. Friend says. It is because of the point made by my hon. Friend the Member for Batley and Spen (Mrs. Peacock), both today and previously, that the Government have determined, and British Coal has agreed, to go forward with the sale and lease of pits to the private sector that British Coal does not wish to continue to operate. It has already advertised nine such pits for leasing, and I understand that there has been a degree of interest from the private sector in examining further the possibility of taking them on.

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