§ The Minister for Energy (Mr. Tim Eggar)
With permission, Madam Speaker, I should like to make a statement outlining recent developments affecting the coal industry.
The House will first wish to join me in offering sympathy to the families of those men involved in the tragic accident at Bilsthorpe on 18 August, and pay tribute to the rescuers.
Last month, the Government announced their intention that British Coal's mining assets should be offered for sale in five regional packages. Potential purchasers will be given the opportunity to bid for one or more of the businesses. The bids will be assessed on their merits. We have offered financial assistance to management and employee buy-out teams towards the cost of preparing bids.
The Government have issued two consultation papers covering the pensions and concessionary fuel regimes after privatisation. Copies of the documents are available from the Vote Office.
The Government have repeatedly made it clear that they regard safety in the coal industry as paramount. I have sought the comprehensive advice of the Health and Safety Commission on all aspects of the post-privatisation safety regime. I expect to hear from the HSC shortly, and I will make its advice available to the House when it is received.
The Trade and Industry Select Committee recommended that a high priority should be placed on reforming working practices, especially working hours. Following the Government's White Paper commitments to consult, I can announce to the House that I have today made the necessary commencement order bringing the repeal of the Coal Mines Regulation Act 1908 into force on 20 November.
In our White Paper, we said that we would establish an Energy Advisory Panel. I am pleased to announce that Dr. Martin Holdgate, the former chairman of the Renewable Energy Advisory Group, has agreed to become chairman of the new panel. I have also written to other experts in the energy field asking them to serve as members.
The White Paper made clear the Government's view that the private sector should be given the opportunity to operate pits which British Coal does not wish to keep in production. Twenty pits have now been offered for licence. I understand that British Coal is currently considering 12 tenders for seven pits.
The Government are continuing their financial help for the coal industry. They are providing more than £1 billion this year, and funding will now total nearly £20 billion since 1979. The Government have informed British Coal that we are prepared to extend our funding for the current redundancy terms for miners until 30 April 1994. British Coal has today informed the mining unions that it is resuming consultations under the modified colliery review procedure as the mechanism within which it will consult them on the performance and prospects of collieries.
The Select Committee recommended a subsidy to help the coal industry to achieve additional sales. The Government accepted that recommendation for sales from deep mines for electricity generation. But, as my right hon. Friend the President of the Board of Trade made clear, 278 there could be no guarantee of additional sales. It would be up to the coal industry to make the most of any new opportunities that arose.
As the House knows, the chairman of British Coal has said that he is pessimistic about the current market conditions and the prospects for genuinely additional sales this year. However, my Department has received applications for the subsidy, and I am pleased to tell the House that, subject to European Community clearance, the Government are now making the first offer of subsidy to British Coal in support of additional sales from Ellington colliery to British Alcan's power station at Lynemouth.
The coal industry will continue to face further challenges. The Government are_ convinced that privatisation offers the best way of meeting those challenges.
§ Mr. Robin Cook (Livingston)
First, I join the Minister in expressing our sympathy for the relatives of the men who lost their lives at Bilsthorpe. That accident reminds us of the constant danger of winning coal 1,000 ft below the earth's crust. I therefore find it deplorable that, in the same statement, the Minister should proceed to confirm that the Government will repeal working practices brought in by Parliament to impose decent safety standards on private pit owners.
We will not accept that the clock can be turned back to the working practices of the 19th century without putting at risk a century of improvement in safety. We will oppose those regulations, and the best tribute that the Minister could pay to the relatives of those who lost their lives at Bilsthorpe and the men who put their lives at risk in mine rescue would be to drop that proposal now. The best way of maintaining the best safety standards of British Coal, which are the finest in the world, would be for the Minister to drop his plans to bring in privatisation which will cut corners with safety.
The Minister referred to £1 billion being spent by the Government in the coal industry this year. Will he confirm that the overwhelming bulk of that £1 billion is the cost of the redundancy as a result of the Government's strategy for the coal industry, that, despite the public outcry, more than half the jobs in Britain's pits have gone in the past year, and that Britain, with the largest coal reserves in Europe, is now on course by next spring to have a mining work force of barely 1,000 men? Is not that the real message of the Minister's statement? [HON. MEMBERS: "How many?"] Ten thousand men, against a work force of almost 40,000 only 12 months ago.
Does not the Minister now expect a second wave of pit closures? How many pits has British Coal said that it wants to put up for closure? Six? Ten? Fifteen? Will the hon. Gentleman tell us how many? If he cannot tell us how many pits will be left open in April, how can he seriously ask the House to privatise those pits in mid-November?
Last March, the Government claimed that they had reprieved 12 pits. Can the Minister tell the House whether any of those pits will still be open by next March? Will he now admit that the threat of further closures finally exposes the Government's White Paper of last March as a total fraud? Will he admit that his statement today that they have managed to sell extra coal to British Alcan merely throws into relief the fact that not a single bag of coal has been bought by either of the major generators, even though that coal would produce cheaper electricity than any other fuel? [HON. MEMBERS: "No."] Cheaper than gas, cheaper than nuclear and cheaper than French imports.
279 The Minister promised us that the White Paper would produce market testing. The market has been tested, and it has been found to be rigged. Why have not the Government taken a single step in the past 12 months to remedy the rigged market that they created? Since it was the privatisation of electricity that created the problem, how do they imagine that it will be solved by privatisation of the pits?
Finally, why did not the Minister find it in himself to acknowledge the tremendous success of Britain's miners in increasing productivity by a third in the past 12 months? Why did he not congratulate them on the fact that most of the market-testing pits now produce coal as cheaply as imported coal? If any other Government in Europe had such efficient pits and such large coal reserves, they would be safeguarding that national resource, not shutting pits down. It is not the miners who should face the sack, but the Ministers who have betrayed them and Britain's coal industry.
§ Mr. Eggar
Even by the standards of the hon. Member for Livingston (Mr. Cook), that was a grudging response. Surely even he could find it in himself to welcome the extension of the redundancy terms. Surely he could have found it in himself to welcome British Coal's return, as announced today, to the modified colliery review procedure. After all, that was something for which he and his hon. Friends have been arguing for some time.
As for the hon. Gentleman's comments on the 1908 Act, he seems to forget, rather conveniently, that the Trade and Industry Select Committee, which is chaired by a member of his party, pointed out the need for changes in working practices and made it clear that consultation would be needed on the 1908 Act.
No corners will be cut with regard to safety. The preservation of safety in the mining industry is paramount. That is why, as long ago as June last year, I asked the Health and Safety Commission for advice on safety matters if the industry was to be privatised. I have already told the House in my statement that, when we receive the advice from the HSC, it will be made available to the House.
The hon. Gentleman said that somehow the market had been rigged against coal. Let us be clear about how much money the Government have put into the coal industry —£20 billion since 1979. That means £1 million for every miner now working in the coal mining industry, and the hon. Gentleman has the nerve to say that we have rigged the market against coal. Massive amounts of taxpayers' money have gone into the coal industry from this Government.
Nationalisation of the coal mining industry has been part of the industry's problems, not part of its solutions. We believe that the best way to ensure the biggest and most economically viable coal mining industry in the future is privatisation and a commitment by the private sector to make a success of a great British industry.
§ Mr. Michael Alison (Selby)
Does my hon. Friend appreciate that probably very few people outside the House have grasped the sheer scale of the £20 billion to which he referred as having been spent by the Government on the coal industry since we took office? If only a fraction of that sum had been spent by Labour Governments, who closed 280 far more pits than Conservative Governments, there would be far more happy and healthy families in the world outside today.
Does my hon. Friend appreciate that the £20 billion includes a substantial investment in the Selby complex of pits, where high productivity and output produces low costs? Will my hon. Friend continue to concentrate support on those modernised and new pits into which so much investment has been placed?
§ Mr. Eggar
I completely agree with my hon. Friend about additional investment in British Coal. I think that I am right in saying that £1.5 billion of taxpayers' money was invested in the Selby mine, which, despite initial difficulties, is now operating very effectively and is producing low-cost coal. Considerable commitment has been shown by miners and management at Selby. It is not just that the Labour party closed mines when it was in office; it made commitments to the nuclear industry and to the interconnector. Indeed, the right hon. Member for Chesterfield (Mr. Benn), who I see in his seat, made the commitment to invest in the interconnector.
§ Mr. Malcolm Bruce (Gordon)
I associate myself and my party with the remarks from both Front Benches about the families of those involved in the tragedy at Bilsthorpe, which reminded us how dangerous coal mining is. Having said that, it is not an excuse for reducing the industry to virtual extinction.
Having told the House that he would leave no stone unturned in his determination to find a market for coal, what did the Minister do in the summer to stop the continuing erosion of the industry? I welcome the appointment of an energy advisory panel at last, but would not it have made more sense to appoint it 10 years ago, before the Government began privatising the energy industry so that it was not dominated by a free and open market but characterised by monopoly, oligopoly and restriction, which is leaving it at the mercy of that market?
Are not the Government now washing their hands of the industry as they hand it over to a rigged market that will leave few pits in Britain and will lead to the destruction of an asset which the British people asked the Government to save and which the Government said they would save?
§ Mr. Eggar
I am sorry that the hon. Gentleman did not specifically welcome the appointment of Dr. Martin Holdgate, who was the distinguished chairman of the Renewable Energy Advisory Group. As his party is committed to windmills on a massive scale, I should have thought that it would be keen on that appointment.
The advisory panel will play an important role in assisting my Department in drawing up the energy report, which will be generally welcomed and which was a commitment in the White Paper. Our market for energy must provide an opportunity for the different forms of energy generation to succeed. We believe that the best way to achieve that on behalf of coal is to ensure that it is returned to the private sector.
§ Madam Speaker
Order. Because of the number of hon. Members who are seeking to question the statement, may I ask for brisk questions and equally brisk answers?
§ Mr. Patrick Cormack (Staffordshire, South)
Does my hon. Friend agree that pessimistic salesmen do not often win new markets? Is he entirely satisfied with the performance of the chairman of British Coal?
§ Mr. Jimmy Hood (Clydesdale)
Twelve months ago, on black Tuesday, the closure of 31 pits was announced, since when 21 pits have closed and 20,000 mining jobs and 60,000 related jobs have gone. The Minister is fooling no one. His announcement is preparing the ground for the demise of another 15 pits and another 20,000 miners. I pay tribute to those men who gave their lives at Bilsthorpe and to those who sought to rescue them. I hope that the report is debated in the House, because use of the skin-to-skin technique is normal in Nottinghamshire; the only difference in the system was the roof bolts that were used. We want more examination of that.
§ Mr. Eggar
As the hon. Gentleman knows, the preliminary report of the HSC on the Bilsthorpe tragedy has been published. It is appropriate to resist making a judgment on the causes until we have the full report. I hope that the report will be with my right hon. Friend the Secretary of State for Employment next month.
§ Mr. Richard Alexander (Newark)
Is it not a matter of regret that, 12 months after the statement by my right hon. Friend the President of the Board of Trade to the effect that the private sector would be able to take over pits that British Coal did not want, no pits are yet licensed in the private sector? Will my hon. Friend confirm that, prior to privatisation, British Coal will not close or even propose to close any more coal mines until other people have had the opportunity to see if they can make a go of it and find new markets for coal?
§ Mr. Eggar
I share my hon. Friend's disappointment that British Coal is not yet able to announce the lease and licensing of specific pits. I know that it is involved in detailed discussions about a number of pits, and wholly accepts the need to proceed as quickly as possible. Any possible future closures are a matter for British Coal, but we have made it absolutely clear that in future pits will be offered either for sale or for lease and licensing, if that is the correct way to proceed.
§ Mr. Richard Caborn (Sheffield, Central)
May I put the Minister right on one point? He mentioned working practices. The 1908 Act was superseded by the 1992 legislation on working hours, which was introduced because of the Community directive. He should not mix that up with the point made by the Select Committee. The announcement by British Coal is more important than the Minister's statement. How many pits are now to go through the modified colliery review procedure? Many believe, rightly, that this is merely a more humane way of shutting the remainder of the 31 pits. The Rothschild report of 1990 said that we would be down to 14 pits.
Will the Minister tell the House what answers he has to the Select Committee's report on opening the market for coal? The Government have not yet responded to that matter, which was posed by the President of the Board of Trade in October last year. They have ducked the issue, and they are letting down not only the miners but the nation.
§ Mr. Eggar
The hon. Gentleman's report—I say it is his report because he was the Chairman of the Select Committee—did refer to the fact that we wished particular attention to be paid to the reform of working hours. It is impossible to deal with that issue without dealing with the important 1908 Act. We have had consultations, and I believe that the Select Committee was in favour of the process. I announced today that I have signed the commencement order.
As for the market for coal, the Government made their position absolutely clear in the White Paper. We said that there was no guarantee of additional markets, and we accepted the Select Committee's recommendation that a subsidy should be made available. We have made that subsidy available, and I announced today that the subsidy will be paid in connection with Ellington colliery for sales to British Alcan.
§ Mrs. Elizabeth Peacock (Batley and Spen)
Will the Minister tell the House and the rest of the country, which is listening intently, whether the Government subsidy is available for coal to be exported for electricity generation? If so, what action is British Coal taking to explore such markets?
§ Mr. Peter Hardy (Wentworth)
Does the Minister accept that most people regard the Government's stewardship of the £20 billion of taxpayers' investment in the coal industry as astonishing? Does he agree that it is hardly right for him to claim as an improvement the new safety proposals, which would expunge the title and statutory capacity of the colliery deputy? Will he assure the House that neither the British coal industry nor any part of it will be sold to overseas owners whose safety record in their pits is less than satisfactory?
§ Mr. Eggar
I believe that the hon. Gentleman is referring to what has become colloquially known as the MASHAM package—after the Management and Administration of Safety and Health in Mines Regulations—put forward by the Health and Safety Commission. As the union that sponsors him is currently taking court action against a Government Department, the hon. Gentleman will know that it is impossible for me to comment on that, because it is sub judice.
§ Sir Cranley Onslow (Woking)
As a member of the Select Committee, I welcome what my hon. Friend has said, especially his emphasis on the continuing need for safety, and the words about the reform of working practices with which he began his statement. I especially welcome the use of the subsidy for the first time. That subsidy was a key recommendation of the Select Committee, and the Government have accepted it. It is clear from the exchanges, both today and on previous occasions, that the best way forward for the coal industry is to get on with privatisation as soon as possible.
§ Mr. George Stevenson (Stoke-on-Trent, South)
Does the Minister accept that his statement represents another cynical event in this shabby process, which abuses the trust that many Conservative Back Benchers put in the 283 Government about 12 months ago? Will he tell the House what has happened to the promised nuclear review as a result of the White Paper, and what is to be done about the burning of orimulsion in this country? How much of the subsidy, other than what has been announced today, has been used over the past year in seeking markets, which was critical to the future of the collieries?
§ Mr. Eggar
We shall make an announcement on the nuclear review before the end of the year. With regard to orimulsion, the precise environmental controls, to which I believe the hon. Gentleman referred, are of course the responsibility of the independent inspectorate of pollution. I am sure that the hon. Gentleman and his party would not want Government interference in that independent statutory role. Finally, as one of the pits that is the subject of negotiation between British Coal and the prospective purchasers, Trentham, is in the hon. Gentleman's constituency, I am suprised that he did not refer to it.
§ Mr. Winston Churchill (Davyhulme)
What steps have Ministers taken to honour the undertakings given to me and to some of my hon. Friends that they would use their best endeavours to carve out a wider market for coal? How many of the reprieved pits does my hon. Friend expect to be in production by the end of the financial year?
§ Mr. Eggar
My hon. Friend has raised a key point, which we accepted by saying in the White Paper that we would follow the Select Committee's recommendation and make a subsidy available. That has been done and, as I have announced today, the first successful subsidy application has been granted. My hon. Friend's detailed question about the number of pits is a matter for British Coal. British Coal's announcement today that it will use the modified colliery review procedure means that it will consult the unions, and it would be wrong to speculate about that.
§ Mr. Paddy Tipping (Sherwood)
Miners in Bilsthorpe and other coalfield communities in Nottinghamshire will welcome the Minister's concern about the accident, but that is about all that they will accept in his statement. That statement confirms that there is no extra market for coal in electricity generation, and that the path to closure is being prepared. It also extends redundancy payments to the spring of next year. What people in Bilsthorpe, throughout Nottinghamshire and throughout the country want to know is whether they will have jobs next spring. They think that they will not. Why does the Minister not come clean now?
§ Mr. Eggar
I am sure that there will be a wide welcome in Nottinghamshire and in all the coalfields for the announcement to extend the redundancy terms. That point was made to me by the Union of Democratic Mineworkers and by the TUC delegation that came to see me. It is also fair to say that people in the coalfields will unreservedly welcome the return to the MCRP—I believe that the hon. Gentleman urged that course some months ago. As British Coal has announced a return to the MCRP, it is right that that procedure be followed, because it involves careful consultation and discussion with the unions.
§ Dr. Michael Clark (Rochford)
Will my hon. Friend confirm that, in recent years, all the assistance for which British Coal has asked has been provided by the Government, including the promise of a massive subsidy at the beginning of this year? If not. What help has British 284 Coal requested which the Government have been unable to give? Will my hon. Friend also confirm that his Department has been working alongside British Coal to try to find markets for coal, and has not been working at arm's length from the company?
§ Mr. Eggar
Yes. The major commitment that we made—making available the subsidy—enabled British Coal to look for additional markets. It has succeeded in finding a market with British Alcan, which is an important development.
As for the wider issues in the discussions with the generators, the chairman has made it clear that he is pessimistic about the outlook. I think that I am right in saying that, in the letter which British Coal has sent to the unions, it has made it clear that it is considering the position with regard to the background market conditions, which are far from good.
§ Mr. Tony Benn (Chesterfield)
Is the Minister aware that the statement that he has made today exposes for all to see the colossal and deliberate fraud perpetrated by the President of the Board of Trade personally and the Cabinet collectively when the review was announced? Authorisation of the importation of coal, of opencast extension, of the dash for gas and of nuclear power at three times the cost give the lie to the idea that there is no market or need for British coal in British power stations.
Is the Minister also aware that, when the industry was privately owned, 1,200,000 miners were injured and 7,800 were killed in a nine-year period in the 1920s and 1930s when the mines were under private ownership? Does not the Minister realise that the public contrast those facts with the actions of the Labour Government who authorised the Selby coalfield and the Drax B power station, and made public—as I did—that the link with France enabled us to export coal from this country by wire to France?
§ Mr. Eggar
I share the right hon. Gentleman's determination that we should not return to the safety record of the 1930s. That is precisely why, more than one year ago, I asked the Health and Safety Commission for advice on the safety regime in the post-privatisation period. I am delighted that the right hon. Gentleman—I think for the first time in the House—has recognised his role with regard to the interconnector. He said that the interconnecter was for exporting coal by wire. If he had paid more attention to the details, he might have realised that it was also there for importing electricity from France.
§ Mr. William Cash (Stafford)
Will my hon. Friend bear in mind the fact that the news today, particularly the rumours circulating that British Coal has suggested that all the pits are up for review, will be met with deep dismay in north Staffordshire, in the light of what happened at Trentham and what is likely to happen at Silverdale?
On the issue of market demand, will my hon. Friend take account of the new technologies available, such as the integrated gasifier combined cycle system currently running in the United States and the topping cycle 285 announced by and developed by GEC Alsthom in this country? We are told that that will enable us to provide almost inexhaustible supplies of energy from the conversion of coal to gas, with pollution levels comparable to natural gas.
If the Government are seriously interested in applying market demand to innovation and technology, will they provide enough incentives and interests for those developments to take place in the interests of future energy supplies and to ensure that we are not dependent on imports?
§ Mr. Eggar
I apologise to the hon. Member for Sheffield, Central (Mr. Caborn) for not picking up that point in my reply to him. The procedure under the modified colliery review procedure—after all, British Coal is resuming it—is that all pits are automatically reviewed. That is what the general review meetings are all about, so there is nothing surprising about that development, and it will be widely welcomed.
As for my hon. Friend's understandable emphasis on the need for expenditure on new technologies in coal, I and the Government agree with him. That is why we have increased expenditure on the coal research establishment by more than 110 per cent. this year. That was announced in the White Paper.
§ Mr. David Hanson (Delyn)
Is the Minister aware that every action that he has announced will lead to further demoralisation among the miners in my constituency at the Point of Ayr colliery, and will lead to a continued haemorrhage of workers? We have already lost 75 per cent. of the workers from that colliery in the past year.
Will the Minister answer one straight question? Are there any circumstances during the next six months in which he can see himself intervening if British Coal seeks to close a pit such as Point of Ayr?
§ Mr. Eggar
Of course, any decision about the future of collieries is a matter for British Coal and has to be followed through under the MCRP. I repeat what I have already said: if, by any chance, closure proposals were made and proceeded with after consultation, the Government have made it clear to British Coal, which has accepted this in respect of existing pits, that such pits will be available for lease and licence. We want to give the private sector the opportunity to make a success of pits which British Coal may or may not want to close.
§ Mr. Nicholas Winterton (Macclesfield)
The President of the Board of Trade gave me an assurance in this House some 12 months ago that, if bias against coal were identified in the electricity privatisation legislation in the course of the reviews that his Department was undertaking, that bias would be removed and a level playing field established. Why has not that been done? Can it be sound practice for a Government who are encountering severe economic difficulties—the Budget deficit and the trade deficit—to allow this country to import coal, thereby putting people out of work, when we have some of the finest and most competitive deep-mined coal in the world to offer for sale?
§ Mr. Eggar
The Government's position in respect of the Electricity Act 1989 is clearly set out in the White 286 Paper, and we stand by it. Imports of electricity coal are 50 per cent. down this year on last year, and overall imports of coal are 15 per cent. down.
§ Mr. Lawrence Cunliffe (Leigh)
Why does the Minister place such great emphasis on the modified colliery review procedure? Is he not aware that many pits that have already gone through that procedure, regardless of their productivity, economic value and viability, have been closed? If there is no market for coal, what is the point of reintroducing this red herring for the miners—as though it were something that would ultimately save them and their industry? Would it not be far better to act instantly by cutting coal imports further, by ceasing opencast mining, and by controlling our oil imports and gas reactor services more closely?
§ Mr. Eggar
I am surprised by the hon. Gentleman's comments on the MCRP. After all, it was the Select Committee that recommended that it should be used. It was also recommended in an early-day motion tabled by several hon. Members, although I do not know whether the hon. Gentleman signed it. I believe that the unions also welcomed the MCRP.
§ Sir Patrick McNair-Wilson (New Forest)
Will my hon. Friend agree that, although there is a tactical case for contracting the industry, strategically it is essential to retain the four-fuel option of oil, coal, gas and nuclear? Have the Government decided not to press ahead with the mothballing of recoverable resources; and will the new owners be expected to play a part in this so that, should the need arise, the resources can be opened up again?
§ Mr. Eggar
My hon. Friend, whose long commitment to the four-fuel option I recognise, is aware that currently 60 per cent. of our electricity generation comes from coal—which is likely to remain the single largest source of electricity generation for many years to come. On his point about accessing reserves of coal, we agree that that is something that needs to be considered.
However, what is important is not the absolute number of reserves, but the number of economically recoverable. The Select Committee was helpful on that matter, because it pointed out that, roughly speaking, we have about the same amount of economically recoverable coal reserves as we have gas reserves—about the 30 to 40-year mark.
§ Mr. Joseph Ashton (Bassetlaw)
Is the Minister aware that the three pits in my constituency—Harworth, Manton and Welbeck—are the finest in Europe and that their miners have broken every productivity record year in, year out, by the sweat of their backs? Can he give a guarantee to the local Conservative party that the pits will still be open come next election day, or will the miners be laid off by a privatised industry and then set back on again at half the pay and with worse conditions? Will there be seven-day working, with pollution, heavy lorries, traffic and klaxon horns on Saturday and Sunday nights? Will a denigration of the industry be the reward for the miners' hard work? Is not the Minister just polishing the brass plate on the coffin instead of putting the lid on?
§ Mr. Eggar
The Government made it clear at the last election—and repeated it in the White Paper—that we attach some priority to privatising the coal industry. Given that circumstance, I should have thought that the hon. Gentleman would be stressing the advantages of his mines 287 and the co-operation of their work forces in making a success of the pits, whether they be in national or private ownership.
§ Mr. Spencer Batiste (Elmet)
My hon. Friend is aware that various groups of employees in the industry are considering making bids as part of the privatisation process. Can he confirm that financial support for the preparation of those bids will be available for any bids that embrace more than one of the five areas into which British Coal will be divided?
§ Mr. Eric Clarke (Midlothian)
I welcome the fact that the Minister has come to the House to make a statement, but I do not welcome its contents. Will the Minister give us the opportunity to debate the matter in the Chamber? We want to discuss many aspects of the Minister's statement and we would like him to join with us and give us time to do so. I do not want the House to go into recess again—I would rather discuss the matter because it affects people's wages and livelihoods. It certainly affects those whom I represent in one of the areas suggested in the consultative document. Will the Minister join us in seeking time to debate the matter thoroughly?
§ Mr. Eggar
As the hon. Gentleman knows, we are consulting. I am aware that a particular concern of his relates to pensions and concessionary coal. Indeed, he has raised those points with me in Committee. I have sent him the consultation papers, and I look forward to receiving responses both from him and from those of his constituents who have an interest in the matter.
I know that the hon. Gentleman, as an adviser to Mining (Scotland) Ltd., will welcome—as it did—the proposed privatisation structure. I believe that it offers an interesting avenue for Scottish interests, which transcend all political groups within Scotland.
§ Dr. Keith Hampson (Leeds, North-West)
Will my hon. Friend remind Opposition Members who have refused to read the Select Committee report and acknowledge what it says that its first recommendation is to place a high priority on reforming working practices? We have dispelled the myth, so beloved of Opposition Members, that Britain has huge reserves of coal. In fact, the report shows that 50 pits have access closer to 20 rather than 40 years, as the Select Committee put it. The figures are absolutely clear.
If the market for the generation of power had been rigged, as it was, and the generators required to continue buying 70 million tonnes at an artificially high price compared with the world market, everybody's electricity bills—whether domestic or business—would be a lot higher.
§ Mr. Eggar
It is entirely right that my hon. Friend should seek to set the record straight. I must tell the lion. Member for Sheffield, Central that I do not wish to intrude into private grief, but the pamphlet that he and his Labour colleagues issued in advance of the Labour party conference was a gross distortion of what the Select Committee had actually said.
§ Mr. Dennis Skinner (Bolsover)
Why does not the Minister come clean and accept that the Government are prepared to throw another 15,000 miners on to the scrap 288 heap, at a cost to the Exchequer and the public sector borrowing requirement of about £500 million; that they are adding another £1 billion to the balance of payments deficit of £16 billion by importing coal; that they are prepared to go through with their lunatic policy of buying French subsidised electricity, which is throwing another 6,000 miners out of work; and that they are engaging in a conspiracy with British Coal, prior to privatisation, so that Neil Clarke and other members of a consortium will buy out a small number of pits, when all the rest have been closed—in cahoots with the Government—so that Neil Clarke will be able, along with his fellow members of the board, to operate a tiny little industry without any competition whatever? That is the conspiratorial plan between the Government and British Coal. That is why the Minister has made his statement today.
§ Mr. Eggar
That is an outrageous statement, and I am sure that the hon. Gentleman would not have said it outside the House.
I should also say to the hon. Gentleman that he must look at the figures. Imports of coal are down this year on last. With regard to the French interconnector, perhaps the hon. Gentleman should have had words 15 years ago with his right hon. Friend the Member for Chesterfield (Mr. Benn).
Finally, I ask the hon. Gentleman, who from time to time is fair, why he did not refer to the fact that he wrote to me only a week ago on behalf of the NUM general secretary for north Derbyshire, asking for an extension of the redundancy terms. Why did he not thank me for enabling British Coal to do just that?
§ Mr. Simon Burns (Chelmsford)
Will my hon. Friend expand on the implications of repealing the Act of 1908, which he announced today? What working practises will be most affected by that decision?
§ Mr. Eggar
The repeal of the Act, which restricted the number of hours that could be worked, plus winding time and travelling time, was generally recognised throughout the industry to be delaying productivity improvements. There is little doubt that the repeal of the Act will, within proper safety parameters, ensure that the cost of British mined coal comes down further, and therefore that British Coal is better able to compete with other fuels.
§ Mr. A. J. Beith (Berwick-upon-Tweed)
On what is otherwise a bleak day for the coal industry, can we read into the Minister's comments about Ellington colliery, which is in my constituency, a real and personal commitment to try to see Ellington through to a successful future, which will depend on the signing of a contract with British Alcan but will also benefit from British Coal having disclosed today that it intends to proceed with development work there?
§ Mr. Eggar
I thank the right hon. Gentleman for that. He, with the hon. Members for Blyth Valley (Mr. Campbell) and for Wansbeck (Mr. Thompson), came to see me earlier. I understand the particular problems at Ellington, the connection with Lynemouth and also with Blyth power station and Blyth port. I have no doubt that the subsidy will enable British Coal to go on producing from Ellington. I think that I am right in saying that the subsidy covers the whole of British Alcan's needs for coal for the next 18 months. That has important implications for the future of the pit.
§ Mr. Geoffrey Dickens (Littleborough and Saddleworth)
Will my hon. Friend confirm that, when British Coal announced recently that it was doubling its imports of coal, it was talking about between 400,000 and 800,000 tonnes this year, but that was only for the domestic market and for blending with less superior grades of coal? Is it not perfectly possible that, in private ownership, the mines, with sensible working practices and new technologies, can go after that market and save those imports?
§ Mr. Eggar
My hon. Friend is right. The references in the newspapers were particularly to household and industrial coal imports. The total level of imports is down by 15 per cent.; electricity generation imports are down by 50 per cent. A number of private sector entities that are interested in purchasing mines believe that, by using different mining techniques, they could produce much more household coal and industrial coal than British Coal is currently doing from existing pits.
§ Mr. Jack Thompson (Wansbeck)
I welcome the fact that British Alcan and British Coal have come to a conclusion about seeking support from the subsidy, and I congratulate the negotiators, because the relationship between the two has been extremely good. I am pleased that a response may come from this. Of the £500 million made available a year ago, the sums of money involved in that agreement are small.
However, the negotiations with National Power and PowerGen have not been successful. I endorse the earlier criticism of the chairman of British Coal, who has not been able to persuade those companies to take extra coal, but some blame also attaches to the Secretary of State and his Department. In March 1993, in a statement recorded—
§ Madam Speaker
The hon. Gentleman will recall that I made a strong plea for brisk questions and answers. Many hon. Members are waiting to be called.
§ Mr. Thompson
Does the Minister endorse the comment made by the Secretary of State in March 1993, in a report in Coal News? When talking about the use of the subsidy, he said:I have to talk to them"—that is, to National Power and PowerGen—and persuade them that things are possible, and that I am working on them at the moment.Does that not reflect the lack of salesmanship by the Secretary of State, who has failed in his negotiations with National Power and PowerGen?
§ Mr. Eggar
Without wishing to ruin the hon. Gentleman's reputation, I want to pay tribute to the constructive role that he has played in the negotiations between British Alcan, the local council and British Coal that led to the agreement. The Government have made it clear that the subsidy for coal will be available on the terms outlined in the White Paper, but if the market is not available and if there is not extra demand for coal, the availability of subsidy cannot expand that market of itself, as everybody accepts.
§ Mr. Keven Barron (Rother Valley)
The Minister knows that the problems that faced British Coal last October and that face it now are caused by the shrinking 290 market for its product. He told the House earlier this year that the Government would provide a subsidy to increase the market, but that subsidy has been available only in the past few weeks. I am pleased that at least one contract has been struck.
When British Coal tried to negotiate for additional tonnages with National Power and PowerGen, the subsidy was not available, as the Minister knows. One of the reasons why a new deal was not struck is that the Secretary of State allows those companies to lift coal from stock for use in the power stations. While that takes place as a result of the inaction of the Government, more coal mines will close, although they are doing everything they can to supply coal efficiently. When will the Government take the action that they promised Parliament and the country they would take earlier this year?
§ Mr. Eggar
Unusually for the hon. Gentleman, he is being unreasonable. The other coal producers applied for subsidies some months ago. Those subsidies have been available.
The hon. Gentleman might like to know that we have been discussing stocks with the generators and they have explained the position to me. They believe that, almost certainly, the stock levels will be above 20 million tonnes at the end of March 1994, and that they could be substantially higher than that. The Chairman of the Select Committee will understand the implication of that.
§ Mr. Cynog Dafis (Ceredigion and Pembroke, North)
I welcome the announcement that Dr. Martin Holdgate is to be chairman of the Energy Advisory Panel. He is well known for his expertise in environmental matters and for his commitment to environmental sustainability as the underlying principle of all economic and industrial policy.
Will the panel have an environmental remit, and will Dr. Martin Holdgate be able to advise how we can avoid a second rape of the fair country of Wales through the expansion of opencast mining, which is both under way and envisaged for the future? How can we make sure that that will be stopped, because it is unacceptable to the people of Wales?
§ Mr. Eggar
I thank the hon. Gentleman for his tribute to Martin Holdgate. When the names of the advisory panel are published in full, the hon. Gentleman will realise that people with environmental considerations will be at the forefront. That is as it should be.
With regard to the hon. Gentleman's comment about opencast, my right hon. Friend the Secretary of State for the Environment will publish shortly a full draft consultation of the revised mineral planning guidance.
§ Mr. John Cummings (Easington)
The Minister will recall that Budge Mining expressed an interest in Easington colliery which was later withdrawn because of the large amounts of money—several million pounds—involved in underground pumping operations.
291 The Minister will be aware that pumping operations at Easington are linked inextricably with other pumping stations in the Durham coalfield. If pumping operations cease at Easington and elsewhere in Durham, there will be a serious threat to potable water supplies. Is it the Minister's intention that the successful tenderer for the north-east area meets all the pumping costs, or are such costs to be met by local authorities?
§ Mr. Eggar
I think that I am right in saying that this is a matter for British Coal. Budge has withdrawn its offer for Easington, so there is no outstanding offer for the colliery.
With regard to the environmental impact of pumping, the hon. Gentleman will be aware that, following debates in the House, detailed discussions are taking place between the National Rivers Authority and British Coal about future pumping operations in the east Durham coalfield. There are serious environmental consequences of the change in pumping practices, and everyone is keen that we should do all we can to avoid any adverse consequences.
§ Mr. Bill Etherington (Sunderland, North)
It will not have gone unnoticed by my constituents who work at Wearmouth colliery—the last deep mine in Durham—that, not for the first time, the Minister has been selective in emphasising recommendations from the Select Committee report with which he agrees. It is obvious that, if the positive proposals by the Select Committee on Trade and Industry had been adhered to instead of ignored, we would not be in the mess that we are in today.
Does the Minister understand that the massive public and political backlash against the White Paper last October was because the public did not accept the Government's policy which has led to the rigged market? Does he also understand that the public did not expect the DTI to proceed with another form of rigging to ensure that the original proposals were adhered to?
I believe that today's statement will be seen for what it is—political chicanery of the worst type. Will the Minister tell the House how much additional coal is to be sold to British Alcan following today's announcement?
§ Mr. Eggar
I remind the hon. Gentleman that we published the White Paper, on which the House then voted. We have followed the recommendations of that White Paper.
With regard to the sales to British Alcan, the hon. Member for Wansbeck (Mr. Thompson) will be able to fill the hon. Gentleman in on the situation. The contract comes to an end at the end of December, but British Alcan has been able to renew the contract for 18 months. That will have positive effects for Ellington, and the subsidy was a critical element in the renewal of the contract.
§ Mr. Eric Illsley (Barnsley, Central)
Will not most of this afternoon's statement simply make it easier for British Coal and the Government to close more collieries in advance of privatisation and so leave a small rump industry to be sold off to people in the City?
Is it not the case that, if we repeal the Coal Mines Regulation Act 1908, we shall decrease safety underground? We are not improving working conditions—that is a misnomer—but extending miners' working hours to about 12 hours. We shall not only decrease safety but increase stocks, and it is stocks for which there is no market that have led to the problem within the coal 292 industry. It is not up to British Coal to try to find new markets. Only the Government could have found those new markets.
With the return to the modified colliery review procedure, which, incidentally, was not available for the 10 pits, every colliery in the country can go straight into that procedure—with the recommendation at the end of it that that colliery close.
§ Mr. Eggar
Surely, though, the hon. Gentleman is in favour of a system that enables full consultation with the unions, which is well established.
The hon. Gentleman asked about the 1908 Act. He will recognise that there are considerable advantages in allowing more flexibility in working hours than is currently allowed under that Act. As regards the safety implications, of course safety will not be imperilled by the commencement order that I have laid, because safety is governed by rules laid down by the Health and Safety Commission, and those rules will apply regardless of whether or not the 1908 Act is in place.
§ Mr. Ronnie Campbell (Blyth Valley)
I welcome the Alcan-Ellington contract, but will the Minister confirm that that contract is only for 18 months? Will he also tell us what subsidy per tonne has been given? Will he take a very serious look at the amount of opencasting that is taking place in Northumberland—approaching 3 million tonnes a year? It seems as though every farmer's field in Northumberland is up for grabs, and we already have 12 applications waiting to be processed. It is really becoming a nightmare.
§ Mr. Eggar
I understand—although this is a matter for British Coal and Alcan—that the contract is for 18 months and that the subsidy paid is the difference between the contract price and Ellington's production costs. That is the basis set out in the White Paper. However, the details concerning the level of subsidy and the competitiveness of Alcan's position are commercially confidential, as I am sure the hon. Gentleman will understand.
The hon. Gentleman asked about opencasting. I understand his point. That is why my right hon. Friend the, Secretary of State for the Environment will shortly be coming forward with the revised draft guidelines—minerals planning guidance 3—which I understand will be consulted upon. On the other hand, the hon. Gentleman will recognise that it is widely understood in his part of the world that there is a role for large-scale opencast operations, which provide jobs and which provide competitively priced coal necessary for blending. Nevertheless, I take the hon. Gentleman's point.
§ Mr. Kevin Hughes (Doncaster, North)
The Minister has produced a package that will increase working hours for men working underground, decrease safety underground and open the door for further pit closures. Why does not he come clean—I am sure that he knows—and tell the House which collieries the Government and British Coal intend to close? Can he tell me how anyone can justify closing the two collieries in my constituency—Hatfield, where people are queuing up every day waiting 293 for the product to come from underground, and Bentley, which is producing coal at less than £1 a gigajoule? How can the Government justify closing those two pits or any other?
§ Mr. Eggar
The question of working hours is a matter for discussion and negotiation at pit level. The Government are merely laying the commencement order for the repeal of the 1908 Act. There will not be a reduction in safety standards—either in the near future or post-privatisation. The responsibility for safety rests with the Health and Safety Commission, which has a statutory duty under the 1974 Act to ensure that there is no diminution in safety standards.
I understand that the hon. Gentleman was the NUM secretary at Bentley. Surely he knows perfectly well—
§ Mr. Eggar
He is shaking his head—my apologies.
The hon. Gentleman knows perfectly well that the question of closure or non-closure is dealt with under the MCRP as part of the normal consultation procedure. I know that the hon. Gentleman is a very reasonable man: could he not have welcomed the extension of the redundancy terms, particularly as he wrote to me last week and urged me to make money available to British Coal to extend them?
§ Mr. John Evans (St. Helens, North)
Does the Minister think that at the next general election the electorate will forget that the Conservative party is now in the process of virtually destroying Britain's deep-mined coal industry? Does he think that succeeding generations will ever forgive the Government for leaving millions of tonnes of coal to rot in the ground, as they have done at Parkside colliery in my constituency?
§ Mr. Eggar
The electorate at the next election will recognise that the Government made it clear in their party manifesto that they wished to privatise the coal industry, and were committed to achieving the largest possible economically viable coal industry in this country. The electorate at the next election will recognise that we have done just that.
§ Dr. Tony Wright (Cannock and Burntwood)
Is the Minister aware that some hon. Members are receiving letters from the chairman of British Coal in which he says that he can no longer give assurances about the future of any pit—any pit—in the country? That includes pits such as Littleton in south Staffordshire, which, a year ago, was said to be safe. Is that not the real meaning of the Minister's statement today?
Did not Baroness Thatcher write to the Minister a few months ago and say that, unless the Government were prepared to take action to produce a market through a guaranteed tonnage of coal for the generators, we would see the destruction of the British coal industry? Was she not right?
§ Mr. Derek Enright (Hemsworth)
First, is the Minister aware that miners in my constituency will be enraged by his proposals about safety, for the simple reason that it is their heads and not his that are on the block day in and day out? Secondly, those miners will be extremely cynical about the proposals that are being made to opencast in North Featherstone and South Hiendley—both pleasant country areas—at the same time as pits are being closed. Thirdly, the miners who work in Frickley—and their families—have been in despair for over a year, not knowing what is going to happen to them.
Does the Minister not think it disgraceful that he belongs to a party that claims to be concerned about families, yet he puts families through this misery and hell?
§ Mr. Eggar
There is no question of imperilling safety. No miner would agree to anything that imperilled safety, no management would seek to impose anything that imperilled safety, and the Health and Safety Executive would never permit changes that imperilled safety—and the hon. Gentleman knows that. As to opencast in his constituency, that is a matter for my right hon. Friend the Secretary of State for the Environment. I have already said that he will be introducing revised guidelines shortly.
§ Mr. Harry Barnes (Derbyshire, North-East)
What are the Government's plans for the energy market after coal privatisation? There is a fortune to be made from coal. Will not the existing rigged market have some of its rigging uncoupled after privatisation to enable those who have got their hands on the coal industry and opencast mining to make a fortune?
§ Mr. William O'Brien (Normanton)
Always save the best until last.
Nothing that the Minister said today will safeguard any jobs in the mining industry. He makes great play about the extension of redundancy pay. Will he explain who will be responsible for the redundancy pay when that runs out? If miners go into the private sector and their pits close when run by private operators, will those miners receive redundancy pay equal to that which is in the process at present?
Will the Minister give an assurance to the House and to the mineworkers that no foreign mine owner who operates unsafe practices abroad will be allowed to purchase an' interest in the British mining industry under the privatisation plan?
§ Mr. Eggar
May I just clarify the redundancy terms situation? The Government extend the funding to British Coal that enables it to offer the redundancy payments. In other words, the Government reimburses 90 per cent. of the cost of redundancy terms. The Government announced today, and British Coal confirmed, that we shall continue to fund British Coal until 30 April 1994.
If British Coal were to be involved in closure consultations which begin this year, but which are likely to continue beyond that date, the funding would have to continue because of the implications of the MCRP.
The safety record of purchasers from overseas is one of the factors that will be taken into account, but no decision has yet been taken on the criteria that will be applied during the privatisation process.
§ Mr. Martin O'Neill (Clackmannan)
Does the Minister appreciate that, when I contacted British Coal today and asked which collieries would have their prospects reviewed under the review procedure, I was told that all collieries would be considered? Therefore, by definition, all collieries are under threat. When he tells us about the extension of the redundancy payments scheme, a picture begins to emerge of the prospect of far more collieries closing than the ones that we had expected and feared the worst about.
When the Minister tells us about the MCRP, can he confirm that he is merely following the dictates of the decision in the court case which he lost last year, and which he now has to invoke every time that a colliery has to be closed, if the miners want? The MCRP gives little comfort to anyone who has had anything to do with the coal industry in this country, because no collieries that have gone through that procedure have ever survived for any length of time.
§ Mr. Eggar
I am not surprised that the hon. Gentleman received the response from British Coal that he says he did, because everyone who knows how the MCRP works knows that all collieries are involved in the general review meeting which I understand British Coal is likely to call on a regional basis fairly soon—but that is a matter for British Coal and the unions.
British Coal makes the decisions about starting up the MCRP and, as the hon. Gentleman would expect, British Coal has to take into account legal considerations when it makes its decision. I would have thought that the hon. Gentleman would support that.