Pit Closures (Hansard, 17 March 1993)

§ 1. Mr. Barron
To ask the President of the Board of Trade when he expects to announce the future of the 31 coal mines currently in his review.

§ 9. Mr. Janner
To ask the President of the Board of Trade if he will make a statement on his proposals concerning the closure of 31 pits.

§ The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)
The future of individual pits is a matter for British Coal. The House will be aware that extensive discussions and negotiations are continuing to be held by the parties concerned. The Government will publish a White Paper on the prospects for 21 pits identified for closure by British Coal. The Boyd's report on the remaining 10 pits currently subject to a consultation process between British Coal and the unions was placed in the Library of the House on Monday 15 March. British Coal has today announced that the existing redundancy terms have been extended to the end of December this year.

§ Mr. Barron
Why will miners and their families in my constituency have to wait until the end of March or even until April for the Government's view, when we had the view of the Select Committee on Trade and Industry in January this year? Is not it the case, as was shown in the disgraceful speech by the right hon. Gentleman last Tuesday, that the Government have [...] intention of doing what the House and the country wanted them to do last October—that is, to save the British coal industry?

§ Mr. Heseltine
I am sorry that the hon. Gentleman should feel that what I said, which merely repeated some of the Select Committee's recommendations, was disgraceful. I thought that I was helping the House by explaining that in the case of the interconnector, the legal obstacles to breaking the contract appear to be insurmountable. I thought that the House would wish to have that information. It is right that I should give the House the clearest possible picture about the position as quickly as possible. To do that requires that contracts should be in place in an ideal way. I have no powers to make people sign contracts.

§ Mr. Janner
Has the right hon. Gentleman read the unanimous report of the Employment Select Committee 268 on the proposed pit closures and, in particular, the Committee's recommendation that before deciding to close any pit, the Government and British Coal should take into account the financial circumstances of that pit, the social consequences of the closure and the national consequences of unloading people into unemployment? Will the Minister undertake to bear those points in mind before deciding to close any of the threatened pits?

§ Mr. Heseltine
The hon. and learned Gentleman can be assured that the report by the Employment Select Committee will be carefully considered—indeed, it is already being carefully considered by the Government. We shall reply to that and to the many other submissions that we have received in the context of the White Paper.

§ Mr. Nicholas Winterton
Does my right hon. Friend accept that the coal industry has a vital part to play in a long-term, integrated energy strategy? Does he accept that the manufacturing and engineering companies associated with coal are a vital part of our manufacturing base and one of its more successful parts in terms of exports? Will he take all those matters into account before he announces to the House that there are to be any pit closures? This industry is vital to the country in the long term.

§ Mr. Heseltine
My hon. Friend will realise that one of the commonest requests from the manufacturing base is that it should have cheap energy costs. He will also know that other parts of the energy industry are among our more vibrant manufacturing sectors. The uncomfortable fact is that one has to make a balanced judgment about the extent to which subsidising one industry or imposing costs on another actually advances the interests of the manufacturing base. That is the range of decisions that the Government have to reach.

§ Mr. Butterfill
Does my right hon. Friend accept that we are grateful that he sent the Minister for Energy to France to negotiate with and talk to the French about the interconnector, which was an important element in the deliberations of the Select Committee of which I am a Member? Can he tell us what progress he has been able to make with France?

§ Mr. Heseltine
My hon. Friend is most kind. We have had extensive conversations and my hon. Friend the Minister for Energy visited Paris to carry on those discussions. The House will be aware that I explained in a recent debate that the legal advice—a summary of which I shall publish for the benefit of the House—is that the contract, first approved by the right hon. Member for Chesterfield (Mr. Benn), is not one that allows me discretion in these matters. In those circumstances, although I have to explore every conceivable opportunity, I do not anticipate that I shall be able to come back to the House with news that significantly improves on that which I have brought to the House already—although I have to say that there has been a relatively small but positive step since I spoke to the House.

§ Mr. Skinner
Why does not the President of the Board of Trade admit that there is no subsidy for British Coal and has not been since 1988 and that he is wrong when he talks about a £1 billion pound subsidy, as we are talking about the consumers, not about the taxpayers?
Does the right hon. Gentleman recognise that in the Boyd's report, to which he referred, the financial costs of 269 each of the 10 collieries has been calculated on the first six months alone, when anyone who works in the pits—including management—acknowledges that, because the first six months includes nearly all the holiday period and the second six months is the period during which pits make profits? That applies to every pit in Britain, not just to the 10.
Will the right hon. Gentleman bear in mind the fact that what miners are concerned about is saving British taxpayers' money? If 100,000 people are thrown on the scrap heap, that is equivalent to £900 million, to be paid for by a diminishing number of taxpayers. If the right hon. Gentleman saves the pits, saves the dole money and allows the miners to pay national insurance and tax, the net result will be that the Chancellor will not have to introduce his value added tax measure.

§ Mr. Heseltine
The hon. Gentleman will know that I appointed Boyd's as a result of what I thought was the clear indication of the courts that that would be a positive suggestion. Therefore, I acted on the very—[Interruption.] I am not sure that the hon. Gentleman is ever satisfied about anything.

§ Mr. Skinner
Not with you.

§ Madam Speaker
Order.

§ Mr. Heseltine
This is a matter of the greatest importance to the House and it is important that I should be able to answer the questions thoroughly and carefully without interruptions that disrupt the flow of my answer. I am happy to treat Labour Members as they treat the House, but it will not help us to have an informed debate on the coal industry—if that is what they want.
Lord Justice Glidewell indicated that I might be able to make a positive contribution towards the consultation between British Coal and the unions if I appointed Boyd's, an internationally reputed engineering consultancy firm, to provide an independent element in the consultative process. That is what I did. The Boyd's report was made available to the House the other day and it would not be appropriate for me to comment on it as it is part of the consultative process that is now taking place between British Coal and the unions. That is where I must let the matter stand.
The hon. Gentleman raises the much wider but equally important issue of the degree of subsidy for British Coal.

§ Mr. Skinner
There is none.

§ Mr. Heseltine
Perhaps I may explain what I mean by the element of subsidy—

§ Mr. Skinner
There is none.

§ Madam Speaker
Order. Sedentary interventions and barracking are not helpful to our discussion of what is, to all our minds, a crucial issue.

§ Mr. Heseltine
Under the contract between the electricity generating industry and British Coal, entered into some three years ago, the price that British Coal currently receives for 65 million tonnes of coal is £1 billion a year more than the world price of coal would imply. That is the degree to which the prices of British coal are in excess of what could be purchased at world market prices. The hon. Gentleman says that there is no question of subsidy, but he will be aware that the Select Committee, which 270 looked into the matter with great care, suggested that a subsidy which could be calculated broadly at £500 million would be a significant policy advance, if I were to make it.

§ Mr. Batiste
Is not the real long-term problem for the coal industry, as the energy industry is presently structured, that it can sell coal to only a small number of generators? Would not it make a great deal more sense in the longer term if the coalfields and coal-fired power stations were put together so that coal could compete for electricity generation? Is not it time to refer the whole matter to the Monopolies and Mergers Commission?

§ Mr. Heseltine
My hon. Friend asks an important question, but he will also recognise that my first political priority on becoming President of the Board of Trade was to facilitate the process whereby the generators entered into new contracts with British Coal to replace the contracts that will run out on 31 March—just a few days' time. It seemed to me that, rather than looking at alternative policies, the first priority was to see whether those base contracts could be put in place. I have to tell the House that, as I stand here today, those contracts are not in place. Therefore, from the end of this month, there will be no contracts between British Coal and the generators. I was assured in meetings that I had yesterday that there was a reasonable chance that that position would be significantly improved in the next few days.

§ Mr. Robin Cook
Does the President recall that last October he told us that the closure announcement could not be put off for one week until Parliament returned because of the need to put miners out of their uncertainty? What does he think that the week after week of delay in producing his White paper has done for uncertainty among miners? What is the point of criticising British Coal and the generators for not yet signing a contract if he cannot yet produce a White Paper? In view of the extended time taken by his energy review, has the right hon. Gentleman yet found the time to visit a single pit on the list for closure? Should not he see for himself the investment at those pits before he closes them down?

§ Mr. Heseltine
The hon. Gentleman knows that the issues with which I am grappling are equally dealt with by my presence where the people who can enter into contracts with British Coal are to be found—that is, within the negotiating operations that I am conducting. It does not change my position or give me any additional legal powers to have visited a particular pit. In so far as the law allows me, I have encouraged the processes of negotiation to produce contracts. But as of this moment, the contracts are not signed. Until they are signed, it seems inappropriate to come to the House with a White Paper. The only consequence of doing that would be that people would say, "Go away and come back again when contracts have been entered into." So there is no point in trying to debate the issues until we know something of the basis on which the future is to be determined.

§ Mr. Raymond S. Robertson
Will my right hon. Friend give a commitment that when he assesses the country's future energy requirements, full consideration will be given to the levels of investment and employment in the North sea oil and gas sector, especially in Scotland, where fewer than 1,500 people are involved in deep mining but more than 97,000 people are involved in oil and gas extraction?

§ Mr. Heseltine
My hon. Friend raises one of the most important aspects of the debate—one on which, as I explained to the House recently, the Select Commit tee has made an important contribution. The Committee has recommended that we do not interfere with the oil and gas industry for many reasons, but most importantly because it is at the heart of one of our most successful manufacturing sectors.