§ Madam Speaker
In view of the number of Members seeking to take part in the debate on the coal industry, I have had to limit speeches between 7 pm and 9 pm to 10 minutes.
§ 4.2 pm
§ Mr. Robin Cook (Livingston)
I beg to move,That this House notes that not one extra contract for coal has been obtained from the electricity generating companies as a result of Her Majesty's Government's White Paper, The Prospects for Coal; deplores the abject failure of ministers to fulfil their promise to use their best endeavours to carve out a wider market for coal; is concerned by the warning of the Chairman of British Coal that all ten remaining pits which were reprieved in March are now at risk again; observes that all of these pits have many years of coal reserves and most of them are already producing coal at a price competitive with imports; regrets that closure of these pits will destroy the economies of the coalfield communities, increase the redundancy costs to the taxpayer, and switch electricity generation to sources that will be more expensive to the consumer; and calls upon the Government to avert a further round of pit closures by implementing those recommendations of the Trade and Industry Select Committee in its Report on British Energy Policy which would ensure fair competition for coal against other fuels and secure a wider market for coal.I am glad to see that the President of the Board of Trade is in his place for this debate. He will acknowledge that there could be no more fitting debate in which to welcome him back than one on the future of the coal industry. As he will recognise, the single biggest impact that he has made on public consciousness in his period in office as President was his announcement, a year ago, of the closure of 31 pits. He is on record as saying that in the following six months the greatest part of his effort was in drafting the White Paper. The past six months have been marked by the unravelling failure of that White Paper. We meet today without a single one of those 31 pits on the hit list last October having a secure future.
I say the "failure" of that White Paper to be charitable, because to assume that the President's strategy in the White Paper has failed is to do the Government the justice of believing that they seriously expected it to work and that they are as concerned as we are that the White Paper has failed. I doubt that is the case. I do not believe that the Government are the least bit surprised that it has failed.
If our motion were to be brutal, it would make the accusation not of failure but of fraud—fraud on the miners who were asked to improve their productivity, to test the market, and who produced a heroic improvement in productivity, only to find that it made no difference to the future of their pits; fraud on the nation, which was assured that the Government had listened to public outrage and scaled down the closure programme, only to find that the only thing that had changed was not the number of pits to be closed but the timetable for the closure of those same pits; and fraud on the Government's own Back Benchers, who voted for the White Paper in the belief that it would save 12 pits, only to find that it paved the way for the closure of those pits.
836 The President's White Paper did not save a single miner's job, and it was not intended to do so. The only jobs that the White Paper was devised to save were those of the President and of his Minister for Energy. That is what it was all about. While they have kept their jobs, half the miners employed when we debated the issue last October have lost their jobs.
In our exchanges with the Minister last week, he took credit for a £1 billion subsidy to the coal industry. That £1 billion this year is not a subsidy. No operating grant has been paid to British Coal for 10 years. The overwhelming proportion of that £1 billion is accounted for by redundancy payments to the 20,000 miners who have gone on the dole—and more are about to go on the dole.
Two weeks ago, the chairman of British Coal said that he was pessimistic about the future of the 10 market-testing pits—so he expects a further round of closures. Last week, the Minister for Energy made a statement on closure procedures and redundancy terms—so he expects a further round of closures. The House needs to know how many pits the Minister expects to close. He must have discussed that matter with British Coal before he came to the House last week. He certainly discussed the timetable of the closures, which is why he changed the deadline for redundancy terms. Will the Minister discuss with the House the matters that he has discussed with British Coal? Will he tell us how many pits he expects to close by the revised deadline?
I will cheerfully give way to the Minister if he will answer the question that he consistently ducked when he made his statement last week. How many more pits will close—six, 10, 12 or 15? Will he say how many more pits will go by next April?
§ Mr. Cook
At the moment, my net is set to catch not the sprats but the shark.
The words "modesty" and "reticence" do not leap to one's mind in association with the Minister for Energy, and I do not believe that he is suffering from stage fright. I assure the Minister that my right hon. and hon. Friends and I will give him a fair hearing. He has only to stand at the Dispatch Box and say how many pits British Coal advised him that it wants to close.
I will try to jog the Minister's memory. Lists circulating in British Coal show who is for the chop. The Coalfield Communities Campaign published that list last Tuesday. It shows that nine pits now face closure and that a further three pits will be taken out of production and mothballed —12 in all. Does that help to jog the Minister's memory? Does that figure ring any bells at the back of his mind, or is it wildly wrong? Would he like to correct the record and tell the House how many fewer pits or how many more pits he now expects to close?
The silent fit seems to have come upon the Minister again. Granted, the question of how many pits will close is an awkward one. The Minister does not want to talk about that subject. Let us take something that he does like to talk about—privatisation.
§ Mr. Cook
Not to the hon. Gentleman, but I will give way to the Minister if he chooses to intervene. The House wants to hear from the Minister, because it is he who must answer on those figures.
A fortnight ago, the Minister said that privatisation would achieve the largest economically viable coal mining industry. As privatisation of the electricity industry created the problem for pits, it is difficult to believe that privatisation will provide the solution, but we shall debate privatisation when the Minister gets around to introducing a Bill on the subject.
In the meantime, let us be charitable—let us take him at his word and accept that he believes that privatisation will achieve the largest economically viable coal ruining industry. How large will that industry be? How many pits will survive to privatisation? That is not a matter for British Coal. It is matter for the Minister who presents the Bill to privatise the pits.
How many pits will be left to privatise? Somebody in the Minister's Department knows. Somebody told The Times yesterday that "Ministers believe" that 20 pits will survive. The Times knows that 20 pits will survive because it quotes a "senior industry Department source". I wonder whether we have a senior industry Department source in the Chamber today. If that senior industry Department source is sitting opposite us, will he confirm whether The Times is right, or could that source correct the record and give a different figure? I can tell the House what is meant by the survival of 20 pits. It means that 10 pits will close —presumably, the 10 remaining of those that were reprieved last March.
Let us be clear about how good those pits are and about how much Britain would lose if they shut. First, we would lose a quarter of accessible coal reserves. None of those pits is near exhaustion. Any pit remotely near exhaustion has been shut down in the past 12 months. The average future life of the coal reserves at each of those pits is 16 years. Two of them have reserves that would last 30 years. Those are not my figures but Government figures taken from Boyds' report, which was produced during the coal review. Between them, the 10 pits have 165 years of life left in them. That is the scale of coal production that we shall be writing off if we shut those pits—coal reserves that would provide a secure, strategic energy resource that the nation will need in the next century.
§ Mr. Cook
I shall give the hon. Gentleman figures for comparison. Under the Labour Government of the 1960s, output in the coal industry fell by a quarter. Output has fallen by 60 per cent. under this Government. Under the Labour Government of the 1960s, jobs in the coal industry fell by a third. Under this Government, jobs in the coal industry have fallen by 90 per cent. The Labour Government of the 1960s shut 40 per cent. of the pits. This Government have shut 85 per cent. of the pits that existed 838 in 1979. Those are the records for the hon. Gentleman to compare. The figures show the deplorable record of this Administration.
The question asked by the hon. Gentleman has been asked in every debate. The hon. Gentleman may have got it from a Conservative Central Office brief, but he need not pride himself on it being an original question. I say to him and to others who attended clutching that brief that I do not for one moment understand what they imagine miners facing redundancy will think is achieved by historic 30 or 40-year-old comparisons, which in any case rebound on the Government.
It is not only that these pits have such long coal reserves; they also have produced increasingly cheap coal.
§ Mr. Cook
The White Paper promises a subsidy, which would allow time within which the price of our coal could be reduced to match that of imports. I have to tell the Minister that the 10 pits that are now threatened with closure are well on the way towards meeting the price of imports, without a penny of his subsidy. In the past month, the import price from the three main countries from which we import coal has been between £1.15 and £1.17 per gigajoule. In the past month, coal from six of the 10 pits has been produced at between 99p and £1.23 per gigajoule, which is comparable with the price of imported coal. I heard the Minister say this morning on the radio that he does not like my figures and that the calculations are wrong. The figures came from pits, and the figures for imports came from Customs and Excise, but the Minister does not like my figures. I can understand why, because they explode his case.
There is another way of measuring the viability of those pits. It is a measure that was chosen by the Government's advisers. The Boyds report produced a benchmark price for the 10 pits in its report to the Government; it was a benchmark price for 1995–96 that would measure whether those pits could be financially viable.
Eight of the 10 pits most at risk are already below that benchmark price, two years ahead of schedule. That is a remarkable achievement for all the people who work in those pits and who now face redundancy. I heard also on the same radio programme that today the Government have handed out 93 charter marks to institutions and bodies in the public sector that have achieved more output with no increase in costs. What about a charter mark for those 10 pits, which have achieved more output with a reduction in costs? Will they get a charter mark for that achievement? Will they even be thanked for that achievement? No, the workers will be sacked for that achievement as though it did not matter what productivity gains they had made. In that—and I give him this—the Minister is right. The market was rigged by his predecessors to squeeze coal out even when it is competitive.
I heard the Minister complain this morning that coal is more expensive than other fuels. Therefore, let us go through the figures. The current contract between British Coal and the generators provides for coal delivered at 1.33 per gigajoule. Seven of the 10 pits are producing coal below their contract price, but let us stick with that figure. The Select Committee calculated that the generators would produce electricity at 1.48p per kWh. That is less than we 839 paid in the contracts for the new gas power stations, which will produce electricity at 2.5p to 2.8p per kWh. That is less than the contracts that we have made to purchase imported electricity from France, at more than 3p per kWh. It is much less than Nuclear Electric would need to recover the costs at Sizewell, at some 4p per kWh. British Coal is now offering its coal for sale at an even lower price than £1.33 per gigajoule.
In the previous debate about the coal industry, after allowing for the subsidy promised in the White Paper, I told the House that British Coal was offering its coal for sale at 93p per gigajoule. At that price, coal could produce electricity at half the contract price of the new gas stations and as cheaply as Nuclear Electric could produce electricity from Sizewell, even if we gave it Sizewell free of any capital cost. Since that debate in July when I quoted those figures, British Coal has made a fresh offer to the generators—an even lower price—that could produce even cheaper electricity, yet still the generators will not buy it. I shall pose the question which I posed in July, but which went unanswered then. Why will the generators not buy a single extra bag of such cheap coal when they can produce electricity more cheaply than from any other source?
§ Mr. Cook
I shall give way when I have finished this passage.
Neither Minister attempted to answer that question in July. That was not because of ignorance on their part. It was the fruit of wisdom. They know how damning the answer would be. They know that the fact that the generators will not buy coal when it can produce the cheapest electricity is the final proof that the market that they have created is rigged against coal.
§ Mr. Richards
If the hon. Gentleman has an alternative energy policy, and if that policy had been introduced in April last year—if the Labour party had won the general election—will he tell the House what proportion of Britain's energy needs would have been met by coal in the year 2000?
§ Mr. Cook
The Government cannot tell us what proportion of our energy needs will be met by coal then, but I can answer the hon. Gentleman's question with respect to the pits that we are discussing. If we had won that general election, we would immediately have taken steps to end the rigging of the market, and I am confident that, given a fair opportunity to compete, British Coal could keep the market, which in turn would keep open all the pits currently producing.
Pits that have the reserves and pits that can produce at the price that would meet the needs of consumers for cheap electricity would thus be in production. That is the difference between what would have happened had we won and what did happen under the Tories.
§ Mr. Cook
Some industrialists who may, for all I know, have supported the Conservatives in the general election last April view with incomprehension a market that 840 encouraged the expansion of gas, of nuclear and of French imports—all at the expense of a contraction of coal, which provides the best value for money.
In our last debate on this subject I quoted ICI as asking how anyone could rationalise the economic behaviour of the generators. On Monday, the same question was asked again in a different form in a letter to the Financial Times from the energy intensive users group. On behalf of the major industrial users of electricity, the letter said:
there is a growing surplus of coal-fired electricity generation capacity. The marginal cost of base-load electricity generation on this capacity is less than 1.5p/kwh, yet new generation capacity costing about 2.8p/kwh is being approved, built and prospering within the 'market."'The letter asks how that is possible.
§ Mr. Winston Churchill (Davyhulme)
Is the hon. Gentleman aware of what the noble Lord Wakeham said in another place on 20 October last year? He said:as I made clear to the Energy Select Committee in another place in January—and I put it absolutely crudely so that there was no doubt about it—if the regional electricity companies have an interest in a gas-fired power station which is more expensive than electricity they can buy from another source, in my judgment they are in breach of their licence conditions."—[Official Report, House of Lords, 20 October 1992; Vol. 539, c. 673.]Would the hon. Gentleman care to comment?
§ Mr. Cook
The hon. Gentleman astutely goes to the heart of the matter. I hope that he will remember that argument at 10 pm. His point is a fair one: the Government have allowed sweetheart contracts to be signed between the electricity companies and new gas power stations, most of which the former own themselves. In the contracts, the gas-fired power stations are guaranteed a price for all their output, however efficient they may be. That is not a market in competition. It is a cartel which is closing the doors on Britain's pits.
The hon. Member for Davyhulme (Mr. Churchill) has raised an aspect which helpfully leads me to my next point. Lord Wakeham had a hand in creating the market which is now causing the problem.
§ Mr. Cook
I have already given way several times.
I know that the President did not set up the rigged market. The person who presided over the privatisation of the electricity market is no longer with us—she is pursuing a second career in the book trade. A most extraordinary thing has happened since our last debate—something I never expected. The noble Lady has shown remorse. She has written to the Minister expressing her concern at pit closures and asking him to take action to avert them.
I know that the President of the Board of Trade has had his difficulties with the noble Lady in the past. However, they are both now at a mature stage—either in, or approaching, the memoirs stage of life. Surely this is the time to sink old differences. Surely the right hon. Gentleman could find at least one common cause with the noble Lady. Let me be a peacemaker between them. If the architect of the rigged market can recognise that it is unjust to coal, surely he is now free to say, "Yes, it was a load of cobblers. I an not going to go on defending what she created."
Once the President takes that liberating step, there are so many more opportunities that are open to him—opportunities to end the rigged market—all of which were in the Select Committee recommendations. The right hon. Gentleman could have accepted the Committee's request 841 for careful consideration of any new gas-fired power stations. Instead, he and the Minister go on approving even more such stations. Two more have been approved since the House last debated the matter. Another 2 GW of production has been added to the generating capacity, equivalent to the output of two pits that will shut when the stations come on stream. Indeed, so remarkable is the dash for gas that Britain now accounts for 43 per cent. of the total orders for gas-fired power stations in the world. We have 2.5 per cent. of the world's generating capacity and we account for 43 per cent. of the orders for gas-fired power stations—this in an island that is built on coal. The most ludicrous feature is that, while the price of coal is coming down, the price of gas is going up.
The President could have accepted the Select Committee's recommendation to ring-fence the nuclear levy. That would have meant that the levy could be used only for future decommissioning costs, and not as a subsidy to present operating costs. I see in this week's newspapers that the Government expect that the output of nuclear power stations will increase. I am not at all surprised that an increase in output is expected. The present arrangement provides a subsidy to nuclear power so large that, if it went to coal, British Coal could provide half the coal to the power stations free of any charge.
§ Mr. Cook
I can tell the hon. Gentleman without the slightest difficulty. I would fit to Britain's coal-fired power stations the technology for clean coal burn which has been developed in Britain and is currently fitted elsewhere. [HON. MEMBERS: "How much would it cost?") Hon. Members ask how much it would cost. The figures are laid out in the Select Committee report, which made it clear that, even with clean coal technology, existing coal power stations are competitive with new gas-fired power stations.
§ Mr. Cook
No, I will not. The hon. Gentleman may not have liked it, but that was the reply. I told the hon. Gentleman that that would be the last occasion on which I would give way.
The President could have taken a third course. He could have acted upon his own promise in the White Paper to consult the generators over stocks as a matter of urgency. That was six months ago, when we were promised those consultations as a matter of urgency.
I was shadow health spokesman long enough to know that urgency does not mean to Ministers what it means to many other people. Urgent cases are often left on waiting lists for six months. However, this is not something that I expected would be put at the bottom of the waiting list for the attention of Ministers.
The Government can act urgently on the matter of stocks when they want to do so. When the Minister speaks, he could perhaps say whether it was true that in 1990, under the powers contained in the Electricity Act 1989, Lord Wakeham wrote to the generators requiring them to 842 keep 27 million tonnes of coal stocks as an insurance against a miners' strike. If the noble Lord found it proper to use those powers to give a direction that was designed to keep miners off a picket line in 1990, why cannot the Government find it proper to use those directions to keep miners off the dole queues in 1993? The generators may get a couple of years' supply of cheap coal while they run down the stocks, but that is all they will get—for the pits that shut in those couple of years when the orders dry up will stay shut, flooded and with the roof fallen in. The savings from running down the stocks will be temporary, but the cost to Britain's coalfields will be permanent.
Lastly, if the President were looking for ways of remedying the rigged market, he could have accepted the recommendation of the Select Committee that imports of French electricity should be conditional on the access of British electricity to other countries over the French grid. Instead, we continue to import French electricity. The French still do not import any electricity from us. They still will not give us access over their grid to countries such as Spain which are desperate to buy our electricity. It is six months since the White Paper—
§ Mr. Cook
The answer is exactly the same as on every previous occasion. The trade across the channel was revolutionised by the decision of the British Government to give the French the subsidy that we pay to our nuclear industry whether or not their electricity comes from nuclear power stations. The previous Labour Government never thought that any Government would be daft enough to offer to subsidise the imports from France. In fairness to the French, I rather suspect that the French Government never imagined that it would happen either. The French must now think that we are mad. The rest of Europe must think that we are mad to close the most efficient pits in Europe.
On output per man hour, British pits are a quarter more efficient than French pits, a third more efficient than German pits and twice as efficient as Spanish pits. The Germans are providing a subsidy to keep open pits that provide coal at twice the price of coal produced by the pits that we threaten to shut down. As a result, next year, Britain may produce less coal than the smaller German coalfield even though it has the largest coal reserves in Europe.
Last week, I predicted that under present plans, if the pits close, the number of mining jobs would fall to about 10,000 by next April. I read in The Times that that "senior industry Department source" also expects the number of jobs in the industry to fall to 10,000. At 10,000 jobs, there will be one miner for every 18 accountants in Britain working on the bankruptcy of companies; one miner for every three economists in Britain charting the decline of the British economy; one miner for every four debt collectors policing the personal debt mountain created by the Government's policies.
With 10,000 jobs in the pits, there will be fewer people working in the pits than the 11,000 civil servants working 843 in the Department of Trade and Industry. I have no doubt that all the DTI civil servants do a useful job. I have no doubt that none of them would dream of going down a mine. But the President has got his priorities badly wrong when we end up with more people working in his Department than in one of the key industries sponsored by him.
I have met many of the men who will lose their jobs in the next few months. Overwhelmingly, they are aged between 25 and 35. They have young families—something on which the party that prides itself on being the party of the family might wish to reflect. They mostly have mortgages because they were encouraged by the Government to be part of a property-owning democracy. With only a couple of exceptions, the 10 pits which are most likely to close are in areas where unemployment is above average. Male unemployment in the other eight areas is between 15 and 20 per cent.
Once those miners are sacked, they may not get another job for a long time. Redundancy money goes very quickly when one has a family to support and no job to support them with. The best chance of a future for those miners is to give their pits a future, to keep the pits working to produce coal that provides a secure, efficient source of energy for Britain. This may be the last chance for the House to do that.
Some Conservative Members know that what the Government are doing is wrong because it does not make financial sense, it damages the national interest and it is unjust to those miners.
All it will take is for a handful of Conservative Members to join us in the Lobbies tonight. Their vote is their responsibility—it is not the responsibility of the Ministers who have dreamed up the policy, or of the Whips who will be standing at the doors—and they must decide which door to go through. I beg them to use their votes to keep Britain's coalfields working, and to keep those young men at work in those pits.
§ The Minister for Energy (Mr. Tim Eggar)
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:'reaffirms its approval for the White Paper "The Prospects for Coal: Conclusions of the Government's Coal Review" (Cm 2235) which accepted the principal recommendations of the Report by the Trade and Industry Committee "British Energy Policy and the Market for Coal" (HC 237) and in particular the offer of a transitional subsidy for additional sales of United Kingdom underground coal for electricity generation; welcomes the help provided by the Government to coal field communities affected by closures; welcomes the offer of subsidy, subject to EC clearance, to British Coal, for coal from the Ellington colliery; welcomes the fact that British Coal have offered to the private sector the pits that they do not themselves wish to keep in production; welcomes the Government's commitment that the present high standards of safety achieved by British Coal be maintained or improved; and welcomes the Government's intention to bring forward as soon as parliamentary time allows the legislation necessary to privatise British Coal since the best future for the coal industry lies in the private sector.'.I shall start by addressing the important issue of safety, to which the hon. Member for Livingston (Mr. Cook) did not refer. All hon. Members are determined to maintain and improve safety standards in the mining industry. That is our priority, and it should not divide us on party-political grounds. I pay tribute—particularly with you in the Chair,
Mr. Deputy Speaker
—to the safety record of the coal mining industry. British Coal's overall accident rate has been reduced by more than 50 per cent. since 1985, as a result of many years of consistent effort and commitment by management and employees.
§ Mr. Eggar
The Health and Safety Executive and its mines inspectorate have also played a critical role—as, indeed, have the trade unions. One should never be complacent about safety standards, but we can all be proud that Britain's coal mining industry has one of the best safety records in the world.
In planning for privatisation, the Government are determined to ensure that the right framework is in place to maintain or improve that fine safety tradition. With that in mind, I wrote to Sir John Cullen, the chairman of the Health and Safety Commission, in May last year to ask for the commission's advice on the safety implications of privatisation. The interim reply that Sir John sent me last year was placed in the Library.
More recently, I again wrote to Sir John to update him on our privatisation proposals in the light of the White Paper on the prospects for coal. I received the commission's full and considered advice on Monday of this week. As I promised the hon. Member for Holborn and St. Pancras (Mr. Dobson) last year, I am making that advice public. It is now available in the Library and in the Vote Office.
The commission's advice is based on five key principles, which it believes should continue to apply after privatisation. The first principle is that employers have the responsibility for ensuring the health and safety of their employees and others affected by their operations. The second is that the commission should continue to be the health and safety regulatory body for the coal industry, and the Health and Safety Executive the enforcement authority. The third is that the framework of legislation must be sufficiently robust to command the continued confidence of the industry and to ensure that health and safety standards are maintained or improved. The fourth is that everyone who works in the industry should have equal protection under the health and safety laws, irrespective of the size of the mine in which they work. The fifth is that the commitment of all employers and employees will be of fundamental importance.
The commission's advice is that there is already a comprehensive and well-tested framework of law governing the mining industry, with a rigorous inspection and enforcement regime. The commission has been in the process of renewing that framework of mining safety legislation since 1983. That is work that it would have undertaken irrespective of the Government's privatisation proposals. The commission believes that it will make an important contribution to ensuring that the statutory framework is adequate to the demands of a privatised industry. A number of those measures have now been implemented after full consultation by the commission.
§ Mr. Eggar
If the hon. Gentleman will bear with me for a while, I will gladly give way later.
The commission has also taken steps to ensure that the best practice in British Coal's existing owners' instructions 845 continues to be applied throughout the industry. The work to achieve that is now largely completed. Draft regulations were laid by my right hon. Friend the Secretary of State for Employment on 1 October to give legal status to the requirements of 10 of British Coal's safety instructions. The commission does not propose to give the instructions legal status where it is satisfied that there is already a clear legal duty on employers, or where inspectors have full statutory authority to ensure that standards are maintained.
The commission has also recommended that there should continue to be a national mines rescue service. The commission will consult widely about the draft regulations.
I should like to express my thanks to the Health and Safety Commission and to the Health and Safety Executive for that advice and for the extensive work that has been, and will continue to be, undertaken. I am delighted to be able to tell the House that the Government fully accept the advice that has been submitted to them by the commission.
§ Mr. Dobson
Will the Minister deal with two matters? Will he confirm that yesterday the Government—apparently with the support and, they claim, the encouragement of the Health and Safety Commission; that self-same commission which is so concerned to secure consensus within the industry about safety—forced through, against the wishes of the bulk of the people who work in the industry, changes in the rules? Is not it the first time this century that mine safety regulations have been pushed through against the objections of the people working down the mines?
Secondly, does not what the Minister said today about the arrangements that the Health and Safety Commission and British Coal are making for the rules below ground clash with what his hon. Friend the Member for Stirling (Mr. Forsyth) said in yesterday's debate?
§ Mr. Eggar
As the hon. Gentleman will recognise when he reads the paper—I think that I have written to him, giving him the full details of it—it does not clash. Secondly, with regard to his attempts to repeat the slur on the Health and Safety Commission which he perpetrated last night, the trade union representatives did not oppose the Management and Administration of Safety and Health at Mines Regulations package. They did not ask for a vote on the package and I am informed that, with regard to the advice which was sent to me and which arrived on Monday, the trade union representatives attended the relevant meetings, accepted the advice, passed it on to me and did not oppose that advice or ask for a vote about it. There has, therefore, been full consultation about the package.
I have done exactly what the hon. Gentleman asked me to do in his written question almost a year ago. I have made that advice publicly available within about 36 hours of receiving it. It is now in the Library of the House and in the Vote Office. I am not sure what extra action the hon. Gentleman wishes me to take.
§ Mr. Dobson
If what the Minister is saying is true, is he challenging the minutes of the Health and Safety Commission, which clearly record that the Trades Union Congress representatives said that they believed that the changes that were pushed through yesterday would not maintain or improve safety underground? Do not those minutes also record that the local authorities' representative expressed similar reservations?
§ Mr. Eggar
I am sorry that the hon. Gentleman still seems to be stuck on the debate yesterday. The announcement that I made today, which is important because it relates to advice which has only just been received, and which it is appropriate that I should bring to the House at the earliest possible opportunity, only relates to the MASHAM package in the most incidental way. He has already received from my hon. Friend the Member for Stirling (Mr. Forsyth), the Minister of State, Department of Employment, who answered for the Government yesterday, the answer to the points that he mentioned on the Floor of the House yesterday.
§ Mr. Peter Hardy (Wentworth)
During the past few months, the Minister has frequently appeared on television to defend the Government's safety regulation proposals —which expunge the statutory capacity of the colliery deputy, who ensures that precedence and priorities for safety persist in the pits—on the ground that the proposals represent a considerable improvement because everyone who goes down the pit will be made responsible for safety instead.
Who would have the statutory capacity on the coal face, in the face of an immediate hazard, to stop the job? Would people have to rely on a system of finding someone to report the peril to?
§ Mr. Eggar
The hon. Gentleman, whose association with NACODS is well known and who has been a regular contributor to our debates on safety matters for many years, explored that matter in considerable detail yesterday. The MASHAM package puts a clear obligation on all members of management of the mines to put the highest priority on health and safety matters. The hon. Gentleman knows perfectly well that under the existing regulations—pre-MASHAM regulations—the safety requirements do not apply outside the coal face. I think that the hon. Gentleman recognises that that, at least, is a major step forward in terms of the new recommendations made by MASHAM, even if he does not accept other features of the new regime.
Last Wednesday, the hon. Member for Clackmannari (Mr. O'Neill), the Opposition spokesman on energy matters, expressed surprise from the Dispatch Box that the modified colliery review procedure involved a review of all British Coal's pits. He expressed astonishment that when he rang British Coal it had confirmed that all the pits were going into the review. I think that he simply does not understand the modified colliery review procedure. It might be helpful if I explained exactly how it worked.
The procedure was agreed between British Coal and the unions more than 20 years ago; it has been used virtually uninterrupted since the early 1970s. It is well known and well understood throughout the industry. I must emphasise that, ever since 1972, the procedure has provided for the performance and prospects of all collieries to be reviewed at local level on a quarterly basis at general review meetings.
§ Mr. Ronnie Campbell (Blyth Valley)
Is the Minsister aware that the colliery at which I worked, Bates colliery in Blyth Valley, went through the colliery review procedures and had a stay of execution of two years, but was still closed, and that many other collieries before it that had a stay of execution were still closed? I am entitled to say that the document which the Minister has on the review procedure is not worth the paper that it is written on.
§ Mr. Eggar
I hear what the hon. Gentleman has said, but he does not appear to be aware that the Trade and Industry Select Committee recommended that the modified colliery review procedure should be followed. It is no good his waving his hands and disowning the Select Committee —it was, after all, compéred by his hon. Friend the Member for Sheffield, Central (Mr. Caborn). I suggest that the hon. Gentleman checks early-day motion 1143, because that motion, which was signed by 117 Opposition Members, called for the early reesumption of the modified colliery review procedure. It was not just Back-Bench mavericks who signed it; no fewer than 20 Members of the Opposition Front Bench signed that early-day motion. Not only did the Opposition spokesman expose his ignorance, but he appeared to ignore the recommendation of the Select Committee and the views of more than 110 of his colleagues in the same party.
§ Mr. Patrick Cormack (Staffordshire, South)
Is my hon. Friend aware that what is causing uncertainty, anxiety and deep distress throughout the coalfields is that pits that have appeared on no list whatsoever, such as Littleton in my constituency, are the subject of letters from the chairman of British Coal, saying that he cannot necessarily guarantee their future for even a few months? Does my hon. Friend accept that to have in charge of British Coal someone who does not believe in the industry and who is, on any standards, a half-hearted, pessimistic salesman does no good to the industry?
§ Mr. Eggar
My hon. Friend made clear last week his views about the chairman and I have replied to him forthrightly. The chairman is doing a difficult job with considerable care and fortitude. My hon. Friend talked about the modified colliery review procedure, Of course, as I have already said, every pit goes into that procedure. That has been the position since the early 1970s and it will be no surprise to anybody who knows about that procedure that that will continue now that it is being resumed by British Coal.
§ Mr. Churchill
In the past, how many pits have gone through the modified colliery review procedure and come out with any prospect of survival?
§ Mr. Eggar
All pits go into either the colliery review procedure or, since 1985, the modified colliery review procedure. The process involves, first, a general review meeting and then, sometimes, reconvened meetings that look at particular pits. This is a matter for British Coal, but I think that I am right in saying that some pits have reached the stage of the reconvened meeting and it has then been agreed that the pit can continue in operation to be reassessed on the general quarterly basis by the general review meeting. That is the established procedure and, as I understand it, it is one which British Coal will continue to follow.
§ Mr. Martin O'Neill (Clackmannan)
I think that the Minister was trying to say that no pits have come out of the review procedure with any prospect of survival.
No matter how worthless the procedure may be, last year when the Government, in collusion with British Coal, tried to close the collieries, they did so without using that procedure. It was for that reason that we called for it to be employed. It took a court decision to force the Government to adopt the procedure. That is why I asked last week whether the Government were using the procedure for all 848 the collieries and, therefore, creating uncertainty across all the coalfields. That is what they have done. That is why we asked last week about the significance of British Coal's resumption of the colliery review procedure. Prior to the court decision, it had shown complete and utter indifference to honouring the formal agreements to which the court forced it to return.
§ Mr. O'Neill
If it is the only thing that is available as an option instead of closure, we are in favour of it. However, we are under no illusions about it, since, in the past, it has given nothing to the colliers of this country.
§ Mr. Eggar
If Opposition Front-Bench Members are in favour of the review procedure, why are they critical of its resumption and why have they been adopting thoroughly irresponsible scaremongering about the future of large numbers of pits? The hon. Member for Clackmannan cannot go on having it both ways.
§ Mr. Simon Hughes (Southwark and Bermondsey)
The Minister began his speech with an announcement about health and safety and is now trying to clarify the modified colliery review procedure. The House and the country would rather he made an announcement or provided clarification on a much more important issue—how many pits do the Government intend to ensure remain open and what is the minimum size of the coal industry that the Government regard as viable? Will the Minister make either an announcement or clarify that core issue?
§ Mr. Eggar
I asked the hon. Member for Southwark and Bermondsey (Mr. Hughes) and his party a question some months ago. The hon. Gentleman believes that the best way of generating electricity is with the construction of windmills. It would take so many windmills that 45 per cent. of the country would be covered by them. How many pits does he think would survive if that policy were to be adopted?
The hon. Member for Southwark and Bermondsey obviously did not pay attention to the answers that I gave in the House last Wednesday. I made it clear that the modified colliery review procedure was being followed by British Coal and that, because that procedure was followed, British Coal was consulting the unions. I made it clear that it was for British Coal to make decisions about the future of collieries in the light of all the information on the market and that it was not and should not be a matter for the Government.
§ Mr. Eggar
I will give way to the hon. Gentleman later.
The hon. Member for Livingston has made a great deal of the information that he released to the press yesterday. In that information, he sought to claim that the various pits that he listed were, somehow, competitive. I understand the hon. Gentleman's point, but he must have words with his researchers. It is an abuse of the Short money to come up with such shoddy workmanship.
The hon. Gentleman referred to the United Kingdom coal report. There is no such publication. He produced figures for import prices of coal which are too high. The 849 hon. Gentleman also appears to be totally unaware of the fact that there are different coals at different prices in the figures that he has quoted. Also, when he seeks to compare the import prices with the prices for the United Kingdom pits, he ignores the transport costs inside the United Kingdom. Above all, the hon. Gentleman ignores the basic fact that it does not matter about the price of imports or the price of production at the pits that he has cited, because if there is no market for the coal, British Coal has difficulty in selling it at any price. The hon. Gentleman knows that we have 45 million tonnes of coal in stock at pitheads and at the generating stations.
§ Mr. Robin Cook
If the Minister now recognises that the problem is that the generators will not buy coal from whatever source, why, six months ago, did he and the President of the Board of Trade practise a fraud on the House by saying that they could solve the problem of the pits by bringing the price down to the level of imports? We warned them that the problem was a market that was rigged against coal.
Will the Minister answer the question that he ducked last Wednesday and has already ducked twice today—how many pits will close? The report in The Times says that 20 pits will survive to privatisation. Is that correct, and, if so, does he agree with me on one simple piece of arithmetic, which is that that means that 10 will close?
§ Mr. Eggar
There is nothing new in what I have just said. My right hon. Friend the President made it clear that the problem facing the British coal industry was the size of the available market. We made that clear this time last year and in the White Paper. My right hon. Friend and I repeated that in the debate in July and the chairman of British Coal has also made it clear. That is a major difficulty facing the coal industry
The hon. Member for Livingston has just repeated the accusation which he made earlier and which he has been making consistently. He said that the White Paper is a fraud. Not for the first time, I find myself wondering whether the hon. Gentleman has ever read the White Paper. In that paper, we were open and realistic about our examination of the market opportunities for coal. We looked at every single suggestion put to us for increasing that market. We checked the opportunities that we identified with the Select Committee, we received evidence from more than 300 organisations and individuals, we commissioned a number of independent studies, we exchanged evidence with the Select Committee, we were able in the White Paper to draw on the Select Committee report and we presented a thorough analysis of the position. Of course, the House approved the conclusions of the White Paper in March.
In the White Paper, we rejected central planning of the energy industries. I should have thought that Opposition Members' experience with the "Plan for Coal" would have taught them that such an approach to central planning is, and always was, doomed to fail. Instead, we set out in the White Paper our policy based on competitive energy markets in which, increasingly, consumers can obtain energy from a diversity of sources at competitive prices. That policy of a competitive energy market has reduced real prices of gas by 20 per cent. since 1986 and has brought down domestic electricity prices over the past two years.
850 Of course, that policy retains a central role for coal. Coal remains, and will for the foreseeable future, the single largest source of fuel used to generate electricity.
§ Mr. Eggar
Yes. It is overwhelmingly British coal. The hon. Gentleman may laugh, but he appears not to be aware that steam coal imports have fallen by 50 per cent. this year. We set out the reasons for our conclusions about the market and made them clear in the White Paper.
Let me recap briefly on our examination of differrent suggestions that have been put forward. The hon. Member for Livingston and his hon. Friends urged us to intervene in the contracts for gas-fired generation. I must say to him that it is no part of the role of a responsible political party or a responsible Government to interfere with agreed commercial contracts, especially when, on one estimate, the effect of the hon. Gentleman's proposals would be to put some 50,000 jobs in the oil and gas industry at risk.
Some Opposition Members urged us to ban coal imports in contravention of our international obligations. This year, coal imports have fallen by 15 per cent. and, as I said, steam coal imports have fallen by 50 per cent.
§ Mr. Dobson
Will the Minister tell us what international obligations we would be breaching by trying to reduce coal imports?
§ Mr. Eggar
There are international trading obligations, GATT and European Community obligations. I thought that the Labour party was committed to an open-trading system—maybe I was incorrect.
We were urged to close the magnox nuclear power stations, but the evidence in the White Paper and the evidence submitted to the Select Committee acknowledged that the magnox stations are now producing the cheapest electricity available on an avoidable cost basis.
The Select Committee urged us to limit electricity imports from France. As the Chairman and the Select Committee know very well, we investigated that option thoroughly, but explained to the Select Committee that our clear legal advice was that it would be against Community law and it would not be possible for us to restrict or prevent trade across the interconnector without severe financial and legal consequences.
§ Mr. David Ashby (Leicestershire, North-West)
Is my hon. Friend aware that he could solve many problems at one stroke if we were to cease strip mining and devastating the countryside? If we did that, we should be able to save some of the pits because it would be an enormous cost saving not having to devastate the countryside.
§ Mr. Eggar
I am aware of the strong feelings of my hon. Friend on that matter and he has talked to me about it frequently. I know that my right hon. Friend the Secretary of State for the Environment is currently considering, as was stated in the White Paper, the whole matter of mineral planning guidance note 3, which controls such planning permission, and I am hopeful that he will come forward with a consultation document shortly. I am sure that my right hon. Friend will contribute to that consultation process.
§ Mr. Richard Caborn (Sheffield, Central)
I want to correct what was surely a misunderstanding by the Minister earlier when he was talking about the modified coal review procedure. If he reads paragraphs 271 and 272 851 of the Select Committee report carefully, he will see that the modified coal review procedure was invoked in those two paragraphs because our terms of reference differed from those of the Government. They considered 21 pits and we considered all 31. We said that the 10 pits that were lying idle should go back into production, to which the procedure should be allied. It was not to apply to the rest. People believed the President of the Board of Trade when he said that there was to be a realistic investigation. Many people believed that, at least, those other 21 pits were likely to be saved. The procedure in the Select Committee report was applied to the 10 pits that were under immediate threat.
§ Mr. Eggar
I obviously pay attention to the hon. Gentleman's interpretation of the Select Committee's report, but it seems to be a rather curious position to take that somehow certain pits only should go back into a colliery review procedure which has previously been available for all pits for the past 20 years. It is not clear from his comments whether he opposes the decision made by British Coal on the modified colliery review procedure. Whatever position he takes, I have a long list of his hon. Friends who have signed early-day motion 1143 and would happily hand it to him and suggest that he talks to all of them and gets their views.
In the White Paper, we identified and took a series of practical steps to help the coal industry. The Select Committee recommended that a high priority should be placed on reforming working practices, especially on working hours. In the past week, I announced that we will repeal the Coal Mines Regulation Act 1908 with effect from 20 November.
As the White Paper and the Select Committee both made clear, there were widely divergent views on the size of the market open to coal. We set out those views in the White Paper. We did not make predictions, but accepted that British Coal should be given a further chance to compete for a bigger market. We responded to the Select Committee's recommendation and offered subsidies for additional sales of deep-mined coal for electricity generation.
In the past week, I was able to announce our first offer of a subsidy to Ellington colliery. That will help safeguard the pit's future for the next 18 months. I can announce today that, subject to European Community approval, we are in the process of making further offers of subsidy to British Coal in support of export sales from Ellington pit.
§ Mr. Jack Thompson (Wansbeck)
Will the Minister clarify whether the Ellington pit contract will be for 18 months, as he said in the past week, or, as I now understand it, for 15 months? It has been bandied about that Ellington pit would receive £2 million out of the £500 million available. There is a heck of a lot of money left to be used. Is his Department directly and actively trying to get markets for the coal?
§ Mr. Eggar
I am sorry that I did not write to the hon. Gentleman to clarify that point. The contract is for 15 months, running from 1 January next year. When I referred to 18 months, I was talking about the position of the pit covered by that contract more or less 18 months from today. That was the confusion and I apologise if I misled the hon. Gentleman.
852 The subsidy is still there. We said that we would make £100 million available on the basis that was put forward by the Select Committee. That money is still there. I have just announced that Ellington is to benefit—at least, an offer has been made to British Coal of a further subsidy of coal for export.
§ Mr. Cash
There are two pits immediately adjacent to my constituency. In relation to subsidy and to putting more money into British Coal, has it been the policy to put money into the new clean coal technologies, such as the topping cycle, which would enable the market for coal to be increased? As I understand it, GEC Alsthom has made it clear that it is possible for us to produce substantial amounts of energy at reasonable prices by the conversion of coal into gas. I am told that in America, as much as $750 million of investment is provided; in the United Kingdom so far, the figure is only £5 million. Can my hon. Friend give us an assurance that money will be spent in greater quantities on new technologies?
§ Mr. Eggar
Over the past 10 years or so, the Government have spent about £200 million on research and development in the general area of clean coal technology. We announced in the White Paper a substantial increase in the amount available to the coal research establishment to enable it, among other things, to expand its level of co-operation with the researchers in the United States who are, as my hon. Friend the Member for Stafford (Mr. Cash) rightly points out, making a major commitment in terms of the expansion of research and development activity.
§ Mr. O'Brien
The Minister has been generous in giving way. He referred to the assistance given to collieries. Will he now answer the question I put to him last week? When redundancies occur under privatization—all this is building up to privatization—will the miners who are made redundant receive redundancy payments the same as or similar to those received now under British Coal?
§ Mr. Eggar
That is a matter for British Coal. The Government have said that we shall be willing to extend the redundancy payments that we make available to British Coal for onward transmission until the end of April. I have also made it clear that in the event of there being consultations on closures that began this year, there would, of course, have to be continued availability of those terms beyond the end of April, if the consultations should continue. As I am sure the hon. Gentleman is aware, the details are a matter for British Coal.
The hon. Member for Livingston belittled the Government's commitment in terms of the finance that they had made available to British Coal. He belittled the fact that we had made available £20 billion to British Coal since 1979. Let me spell it out for him and for my hon.
853 Friends. The £20 billion is the equivalent of 200 new hospitals. It is the equivalent of 3,000 new secondary schools. It is equivalent to the cost of doubling the country's motorway network. The hon. Gentleman seeks to belittle that investment.
§ Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)
Order. The Minister has made it clear that he will not give way again.
§ Mr. Rowlands
On a point of order, Mr. Deputy Speaker. The Minister has repeated the figure of £20 billion, which he gave last week. Is he aware that £8 billion of that is capital investment and that £6 billion existed—
§ Mr. Deputy Speaker
Order. That is not a point of order for the Chair, as the hon. Gentleman knows.
§ Mr. Eggar
The hon. Member for Livingston talked today as if there would be no jobs for the coal miners who had been made redundant over the past year. He seems to ignore the success of British Coal Enterprise. Some 9,000 former employees of British Coal have been found jobs or long-term training opportunities by British Coal Enterprise. The chief executive of British Coal Enterprise has made it clear that he believes that 88 per cent. of its active clients—the people who are registered with it—will be found a job by British Coal Enterprise and that 75 per cent. of its active clients will find jobs within the first 12 months of registration.
What of the hon. Member for Livingston? What of the Labour party? From time to time, the hon. Gentleman offers his solutions for the energy market. Characteristically, he fails to spell out the consequences of his answers. Perhaps he has failed to do so because he knows that some hard choices have to be made within the energy market. The fact is, as his hon. Friends know, that a bigger market for coal can be created only at the expense of some other energy source. If we create a bigger market for coal, we shall have to close down the nuclear power stations, we shall have to intervene in the gas generation contracts or we shall have to take illegal action against another member of the European Community.
If the hon. Member for Livingston wants to burn a lot more coal, he will have to square that with our commitments on the environmental front. He has conveniently ignored the additional costs—and therefore the increased lack of competitiveness for coal burn—of retrofitting desulphurisation equipment in power stations. Not only did he ignore that cost, but he ignored the fact that there is no technology available for removing carbon emissions from coal-fired stations. He simply does not understand the environmental aspects of coal.
The hon. Member for Livingston called the White Paper a fraud. What is the Labour party's energy policy? Last October, we asked the same question and we got no answer. We asked again in March and there was no answer. We asked in July and there was still no answer. There was 854 a small step forward at the Labour party conference last month which you will have heard, Mr. Deputy Speaker. Last month, the Labour party decided that it would come up with its energy policy by the time of the 1994 conference. The national executive committee spokesman had obviously spoken too soon. Last week, the hon. Member for Clackmannan announced in an interview:there will not be a comprehensive energy policy in place until the 1995 Labour party conference.Who knows? We may be very lucky. The country may get a view of the Labour party's energy policy by the end of the decade. Meanwhile, Labour avoids all the difficult choices. It fails to understand that Governments have to make choices. If Labour, in opposition, aspires to government, it has to make choices in opposition and it has to make its policy clear.
The Government have spelt out their approach clearly. We have done everything possible, within the constraints of the economic reality and within our legal obligations, to increase the opportunities for British coal. We believe that the best future for British coal lies in the private sector. Privatisation offers the best prospect for the coal industry, which is why we are committed to introducing the legislation necessary to achieve privatisation at the earliest possible opportunity.
§ Mr. Terry Patchett (Barnsley, East)
I am grateful for having caught your eye, Mr. Deputy Speaker, because of the 31 collieries that the Secretary of State has doomed to closure, two—Houghton Main and Grimethorpe—are in my area. Indeed, I worked at Houghton Main for 26 years, and I know what reserves will be wasted.
It appears that the Government's objective in the debate 12 months ago was to play for time cynically in order to deflect public attention from the coal industry. Although the Minister led the House to believe that he would take a fresh look at the pits that he had named for closure and that he would investigate fresh market potential for coal, taking into account the Select Committee's report, he has not done that.
I believe that the Select Committee's investigation was merely a charade set up by the Government as a time-wasting exercise, and I was far from happy with the Committee's report. It did, however, contain some suggestions, although I am sure that every member of the Committee would concede that nothing in the report was taken up by the Government. The Government have used the time that they created for themselves through their promises, which were in fact commitments made to the House, by proceeding deviously with their original closure programme.
It is ironic that just before last year's debate I had been invited by the Commonwealth secretariat to go to Ghana as an observer of the election on behalf of the Commonwealth Parliamentary Association. The election was to take place the day after the coal debate. Since Grimethorpe and Houghton Main, which were on the hit list, are in my constituency, I was reluctant to be out of the country at that time. However, one of the Whips assured me that I had nothing to worry about in the near future as the Minister had made a commitment to the House that nothing would happen to the pits until he had done as he promised, and that the Minister would have to honour that commitment.
I went to Ghana with some trepidation but not without making arrangements for matters to be watched at the two
855 collieries in my constituency and for me to be kept informed. Sure enough, within three days of my arrival in Ghana, I received a message that the two collieries were being proposed for salvaging—so much for honouring a commitment. I came home to get the true picture.
The truth appeared to be that the coal board was organising the voluntary closure of pits by the men themselves; or so the Government would have us believe. In fact, the men were being blackmailed with threats of huge losses in redundancy money if they did not sign by a certain date. Knowing the National Union of Mineworkers and the mining industry as I do, I assure the House that not one pit branch of the NUM voted voluntarily for pit closure; they voted as they did because of financial threats.
Proof of the Government's lack of commitment to the mining industry is the fact that, since the pit closure announcement on 13 October 1992, 21 of the pits that were earmarked for closure have stopped production with the loss of 21,000 mining jobs—affecting more than half of the country's miners—and more than 60,000 jobs in related industries.
The Government have failed to make progress on even the few modest proposals in the White Paper. Despite the commitments made in that White Paper, nothing has been done to stop the power generators running down coal stocks, to cut the dash for more expensive gas-fired electricity generation, to restrict the expansion of opencast mining, to limit the import of expensive, subsidised nuclear power from France, to reduce the dumping of coal imports or to promote the export of British coal. In addition, not one penny of the promised £500 million Government subsidy for extra coal sales to the electricity market has been made available.
To make matters worse, the Government have not only closed pits but made absolutely sure to sabotage access to the remaining reserves in the doomed collieries; reserves that even they may one day have to consider trying to extract. By having the shafts filled, the Government are denying access to the reserves that are the nation's treasure house. The Government have no overall energy policy. They have not considered the complete cost of this shambles which affects the balance of payments and causes a loss of revenue to the Exchequer and an increase in unemployment costs in general.
Given the deceit that the Minister has perpetrated on the general public and the House, and knowing him to be an honourable gentleman, I personally expect him to resign before the evening is over.
§ Mr. Simon Burns (Chelmsford)
The House will agree that the past 12 or 14 months have been traumatic for the coal industry. I am sure that we are united in an utter dislike of unemployment and its effect on individuals and communities, whether coalfield communities or not. Unfortunately, as my hon. Friend the Minister for Energy said, Governments have to govern, and there are times when tough decisions have to be made, however unpalatable they may be.
In the past few months, much has been made of the significant, even dramatic, improvements in productivity in the coalfields in recent years. Of course, everyone pays tribute to the tremendous work of the miners in raising 856 productivity, but it is a sad fact of life that the realisation that productivity has to be increased to earn money, and the increases themselves, came far too late.
We should never have had to live through the strike of 1984–here is one man who needs to be chastised for the current state of the British coal industry, it is Mr. Arthur Scargill. If in the 1970s and early 1980s the coal industry had had the realism that it has had for the past few years, it would have become world competitive. It would have been able to carve out a market in this country and win markets overseas to safeguard its future.
Although the debate about the current number of mines in this country is uppermost in everyone's mind, we should not forget—this is not merely a debating point—that mines have been closing since the war because the market has been contracting. The problem facing this country and the coal industry is straightforward; it is evident to anyone who cares to look. British Coal is producing more coal day after day, week after week, but no one will buy it in sufficient quantity. The Government have embraced the Select Committee's recommendation and have been prepared to pay a subsidy to help British Coal become competitive. We heard the announcement at Ellington about the first subsidy being paid—but unfortunately that does not diminish the need for a far greater market for coal. I hope that the Minister, or my right hon. Friend the Secretary of State for Employment, who will wind up the debate, will be able to assure the House that British Coal will seek to do everything within its power to try to attract more orders for its coal and to help create a bigger market for it.
In recent months the importance of what is being done to help the coalfield communities has been overlooked, yet it is crucial. Unlike many of our constituencies, in which people do not live in villages and communities as they may have done many years ago, the coalfield communities are places where people still rely on each other and, sadly, they have relied on a single industry for their survival and their success. Over the past 12 months there have been some important improvements and some genuine help has been given to those who have become redundant to assist them in finding alternative employment, to become reskilled and retrained and so enhance their opportunities to get back to work as quickly as possible.
To my mind, the most important role of Government, and of individual Members of Parliament, is to seek to encourage as much expansion and improvement in the economy as possible, and to minimise unemployment so that people have more opportunities to get into work and to earn a living. [Interruption.] I tell the hon. Member for Clydesdale (Mr. Hood), who is talking from a sedentary position, that no Opposition Member has a monopoly in terms of worrying about the unemployed. All my hon. Friends care as much as he does about people who are out of work and cannot find a job.
§ Mr. Jimmy Hood (Clydesdale)
I may have put my point rather strongly, because I was saying that you were talking nonsense, but the Government have to accept that your care and concern for the unemployed has been judged by your actions, and the results of your actions.
§ Madam Deputy Speaker (Dame Janet Fookes)
Order. I remind the hon. Gentleman that, despite his strong feelings, he is addressing me.
§ Mr. Burns
Despite the hon. Gentleman's strong feelings, I trust that he will not become too sanctimonious and bother the House with humbug. It ill befits the hon. Gentleman to lecture Conservative Members as if he had a god-given right to be the only individual who cares about the unemployed.
I shall return to my original point about the regeneration measures by which the Government seek to help the coalfield communities that have had so many problems over the past 12 months. It should not be forgotten that the greater part of £200 million in the regeneration packages announced in October and March has already been put into place in areas affected by pit closures. Major projects are under way in all those areas: £6.5 million has been spent on the Robin Hood line extension to Mansfield—
§ Mr. Burns
Wait a moment.
Two million pounds more is being spent on the Viking business park in south Tyneside; English Estates is investing £24 million in providing up to 200,000 sq ft of commercial space in Yorkshire and Humberside. Local partnerships are well established in all affected areas and are working together to ensure that sustained and lasting regeneration takes place.
Since last October Lord Walker, in another place, has been co-ordinating the regeneration package. An important element of that package has been the confirmation of assisted area status in the announcement made in July about the new map by my right hon. Friend the Minister for Industry. Doncaster, Mansfield and Barnsley have all been upgraded to development area status. Wakefield, Dewsbury, Castleford and Pontefract, Alfreton and Ashfield, Chesterfield and Retford have all been upgraded and have become intermediate areas. Assisted area status will ensure that all those places are eligible for the full range of regional assistance available from the Government, and that will help to provide genuine opportunities to regenerate the areas that have been so sorely affected over the past year or so.
§ Mr. Tipping
I am delighted that the hon. Gentleman mentioned the Robin Hood line. It is true that the Secretary of State for Transport made the announcement last May in Nottingham, but perhaps the hon. Gentleman does not know that six months later the local authorities involved are still waiting for confirmation about how the money will be made available. Will it come as a grant or as a standard spending assessment? The authorities also need to know whether the money will be available this year, next year or the year after. It is all very well to announce such projects, but it is good to get things built on the ground. We want to see new jobs and new things happening, not to hear hollow empty promises.
§ Mr. Burns
I am grateful to the hon. Gentleman and I fully understand his anxiety and his desire that, when an announcement is made, action should be taken as swiftly as is humanly possible afterwards to assist his constituents and other people in the area. I am sure that he will be pleased that my hon. Friend the Minister for Energy and my right hon. Friend the Secretary of State for Employment are in the Chamber and will have heard his plea. No doubt his message will be taken to the Secretary 858 of State for Transport, and I trust that any problems can be resolved as quickly as possible so that we can get the scheme under way.
§ Mr. Burns
I am afraid that I must make progress, as many hon. Members still want to speak.
Over the past 12 months we have heard a lot about one subject; we have heard about it today, and I believe that my hon. Friend the Minister for Energy, too, alluded to it. I am talking about the many vague throwaway lines, especially from the hon. Member for Livingston (Mr. Cook), about what the Government should or should not do. I am sorry that the hon. Member for Livingston is not in his place to hear the debate, because it is an important debate for all Members of the House. It seems sad that the 20-second sound bite for tonight's television news is more important to the hon. Gentleman than being in the Chamber to listen to the debate and to the concerns of all hon. Members on this important subject. [HON. MEMBERS: "Cheap."]
§ Mr. John Evans
On a point of order, Madam Deputy Speaker. Is it not one of the normal courtesies of the House that when a Back Bencher intends to refer to another hon. Member he informs that hon. Member of his intention? Furthermore, is the hon. Member for Chelmsford (Mr. Burns) aware that my hon. Friend the Member for Livingston (Mr. Cook) is currently attending a meeting of the shadow Cabinet?
§ Madam Deputy Speaker
It is certainly true that that is a courtesy of the House if one hon. Member intends to attack another, but that is not a matter for the Chair.
§ Mr. Burns
I am grateful for your guidance, Madam Deputy Speaker. I was aware that if one intended to raise an issue about another hon. Member one gave him notice, but I have slipped up tonight because I assumed that the hon. Member for Livingston would have the courtesy to remain in the Chamber and listen to the debate rather than slink off to a shadow Cabinet meeting. However, that is up to the hon. Gentleman and I do not wish to pursue the matter.
All too often we hear from the Opposition throwaway lines about the need to close down nuclear power stations and to restrict gas-fired power stations. They forget what would happen if we did that—such ideas are so easy to throw out when one is in opposition. They do not take into account the number of jobs that would be lost in the nuclear and gas industries; people would be thrown out of work and on to the dole queues. It is too easy and simplistic to give such advice when one has not the responsibility of office, and does not have to implement it.
The Opposition's attitude to nuclear power is especially fascinating. The hon. Member for Livingston and some of his hon. Friends are often quick to dismiss the nuclear industry and call for people to be thrown out of it. I am sure 859 that the hon. Member for Workington (Mr. Campbell-Savours) and the right hon. Member for Copeland (Dr. Cunningham) would not agree with that, but then we all know that the Labour party is deeply split on nuclear energy.
I have with me a rather interesting Fabian pamphlet entitled "No Nukes!" by Robin Cook. The foreword boldly pronounces:Robin Cook examines the case for civilian nuclear power and finds it to be unneeded.Hon. Members might be interested to know the Labour party's position. The foreword goes to to state:The Labour Party played its full part in the development of the nuclear industry in Britain. It was the Attlee government that established the UK Atomic Energy Authority … It was the Wilson government … that initiated the Advanced Gas-cooled Reactor … programme which committed Britain to the construction of five more nuclear power stations, and by the end of the Callaghan government"—in those far-off days of 1978–79, when we were in the hands of the IMF, when we had cuts in our hospitals, education and everything else; those halcyon days—a commitment had been made to a two further AGR stations. Yet"—[Interruption.] Opposition Members anticipate me. The pamphlet continues:Yet during Labour's last spell in office our identification with nuclear power provoked a number of controversies within the movement itself".I suspect that the right hon. Member for Copeland and the hon. Member for Workington would not welcome those controversies because they fully support the nuclear power industry, probably because of the siting of Windscale, and they fight diligently for the interests of consumers, their constituents and the overall energy policy of this country.
In that fascinating tract, the hon. Member for Livingston went on to say:we may require no further power stations for at least a decade and will free resources for investment elsewhere in the public sector. If we do require a new station it should be coal-fired".That shows his rejection of nuclear power, but he never tells us how many people would be thrown out of work and the misery that that would cause for their families. Let me tell him—it would be more than 100,000 people. I am not surprised, frankly, that he does not talk too much about that matter.
§ Mr. Caborn
Has the hon. Gentleman read the motion? It states:recommendations of the Trade and Industry Select Committee in its Report on British Energy Policy … would ensure fair competition for coal against other fuels and secure a wider market for coal.I remind the hon. Gentleman that, in that balanced energy policy, there was a role for about 25 per cent. to 27 per cent. of electricity produced by nuclear power. In fact, there was to have been a nuclear review.
§ Mr. Burns
Indeed we are, but I have tried to show that, whatever the hon. Member for Livingston has signed up to in his responsibility as a member of the shadow Cabinet, he 860 also writes documents which seem to be at variance with what he adds his name to. It is not the first time, and I suspect that it will not be the last time.
§ Mr. Stuart Bell (Middlesbrough)
The hon. Gentleman is referring to a document which was written in 1980.
§ Mr. Burns
The hon. Gentleman overheard one of my hon. Friends. In fact it was written in July 1981, but I am sure that the hon. Gentleman will confirm that the hon. Member for Livingston has not repudiated the contents of that document in any way.
There are several other matters that the House should know about. They are rather more interesting than the general political knockabout that we heard from the Opposition spokesman. How many mines would the Labour party save? Exactly how would the Labour party save those mines? It is all well and good for Labour politicians to go around the country mouthing support for this group and that group, but, without any concrete proposals and real facts and figures, that is worthless and utterly meaningless. How would the Labour party obtain more contracts and a larger share of the market for coal in this country and overseas? It is all too easy to complain and criticise. The country and the House need to hear exactly what the Labour party would do to redress the situation.
The Liberal Democrats always have a view on every critical issue in this country. I noticed that, uncharacteristically, there is no Liberal Democrat amendment on the Order Paper, unless—perhaps I am being uncharitable—my Order Paper is incomplete. The hon. Member for Southwark and Bermondsey (Mr. Hughes) is not usually shy in coming forward. He is not seeking to intervene. Obviously the Liberal Democrats do not have an amendment, so one assumes that they either could not agree an amendment or they have no view at all.
§ Mr. Simon Hughes
I might as well give the hon. Gentleman the answer now. I hope that it will bring his speech to an end. All my colleagues will vote with the Labour party and all other opposition parties and, I hope, with some of the hon. Gentleman's more intelligent colleagues in support of the overwhelming view of the British people that we should do something to try to save the coal industry, not sell it down the river.
§ Mr. Burns
I am grateful to the hon. Member for Southwark and Bermondsey for that clarification. He did not actually tell me why the Liberal Democrats have not tabled an amendment, but that is neither here nor there. I warn the hon. Gentleman that those who stand in the middle of the road usually tend to be run over. It is characteristic of the Liberal Democrats that they always sit on the fence or stand in the middle of the road until they think that they know which is the best way to jump for the maximum number of votes.
Nobody usually knows exactly where the Liberal Democrats stand on any issue, and energy policy is no exception. With their typical clarity, vision and sense of purpose, they have two policies on energy, which I suspect is to appeal to the maximum number of people in the hope of gaining the maximum number of votes, as that seems to be what motivates them.
The Liberal Democrats' alternative White Paper on energy and the environment, which was published in January—the hon. Member for Southwark and Bermondsey is displaying it—suggests that they could 861 increase the market for coal by 50 per cent. by interfering in the market. Unfortunately, that policy directly contradicts their document on a carbon tax, which was published in September and which said that their carbon tax would increase the price of coal by a mere 58 per cent. Any sane person in his right mind can work out that such a price rise, when we are trying to make the price of coal more competitive with world market prices, would destroy any chance of British coal competing in the world market.
Of course, the facts and consistency never get in the way of the Liberal Democrats in their pursuit of votes. Their energy policy is a little like their defence policy. Liberal Democrats in Scotland want Rosyth for Trident, Liberal Democrats in the south-west want Devonport for Trident, and Liberal Democrats at Westminster just want to scrap the whole thing.
This is an important debate. It is a difficult matter because difficult decisions must be taken. I am glad that, during a very difficult time, the Government have searched far and wide for the best possible solution.
The Government took genuine account of the Select Committee report, which recommended a subsidy. They offered a subsidy to help and to give British coal breathing space to seek more markets. I hope that British Coal will be told in no uncertain terms—I am sure that it has already been told—that it must work hard to carve out better markets. I also hope that British Coal will be left in no doubt that the pits that may possibly be privatised must be left in a proper state.
The way forward must be privatisation. The nationalisation of British Coal was not the solution to a problem—effectively, it was the continuing cause of a problem. Privatisation will provide an opportunity for private enterprise to give the British coal industry a future where people can work in it, produce coal and find markets to which that coal can be sold. The sooner my hon. Friend the Minister introduces a Bill to enable the coal industry to be privatised, the better it will be for us and for the coal industry.
§ Mr. Simon Hughes (Southwark and Bermondsey)
I regret that the speech of the hon. Member for Chelmsford (Mr. Burns) seemed to be a combination of the usual Tory dogma, the Tory brief from Central Office and the Tory distortion of the facts when Tory Members are driven to quote from a Labour document published 12 years ago and to misquote from one of our documents. The figures attributed to us by the hon. Gentleman came from Cambridge Econometrics, not the Liberal Democrats. I have the documents in front of me. It must have something to do with the fact that the hon. Gentleman is feeling more vulnerable now as a result not simply of having a Liberal Democrat challenging him most closely in his parliamentary seat, and having previously lost control of his local authority, but also not running his county council either since the Tories were defeated in Essex last May.
§ Mr. Hughes
No, I will not give way. The hon. Gentleman went on for a long time. He also clearly indicated that he will not leave the Chamber until 10 o'clock because he criticised someone who did not stay. I give him notice that I will be leaving for a short time to attend my parliamentary party meeting and then I will 862 come back. I hope that the hon. Gentleman will not move from his seat between now and 10 o'clock, otherwise he will also take the biscuit for hypocrisy this evening.
The last time that we voted on this issue was in July. The Opposition parties, with some support from Government Members, managed to get the Government to within 22 votes of a change of policy. Since then, one more Tory seat has fallen and the Government's majority has been reduced by two. The fact that in the past year my hon. Friends the Members for Christchurch (Mrs. Maddock), who is with me on the Bench, and for Newbury (Mr. Rendel) have taken seats from the Tory party is more to do with the Government's failure to understand the rejection of their economic, employment and energy policies and their interrelationship in this country than with anything else. [Interruption.] If the Minister does not understand that the Tories had the two largest by-election defeats in recent history largely because of their fuel policy and the tax on fuel, I do not know where he has been in the past few months.
§ Mr. Simon Hughes
I wish that a few more Ministers had been shut in pits. The President of the Board of Trade has not been down any pits.
§ Mr. Simon Hughes
I said that it would have been better if they had been shut in pits, not shutting them.
One year ago, the President of the Board of Trade made a statement in the House in which he announced the beginning of the sad year that we have just gone through. He said:I accept full responsibility for that decision, as I do for the consequent events."—[Official Report, 19 October 1992; Vol. 212, c. 205.]When he made his second statement on 25 March 1993, at the end of the Government's review of coal policy, he said:Finally, let me remind the House of what I said earlier. There can be no guarantees. The market for coal is complex and unpredictable. Even among the experts, opinions differ. I have done all that I reasonably could, consistent with economic British Coal."—[Official Report, 25 March 1993; Vol. 221, c. 1241.]When the Minister came to the House last week to make the third coal statement, he did not even make that claim. Today, the criticism of the Opposition parties is that the Government have not done all that they reasonably could, and are not even thinking of doing all that they reasonably can.
We hope that, as a result of an intelligently and reasonably put argument—as it was from the Labour Front Bench and, hopefully, is now and will be by Back-Bench Members—perhaps some Government Members will either vote with us or abstain because there are differences of policy that could be pursued by the Government. Such differences would help to achieve a result that Britain generally, as well as the coal industry specifically, needs.
Since we met to debate this issue one year ago, we have gone from a position of debating the future of 50 pits to one of debating the future of 30 pits. Twenty pits have ceased production and there is a severe risk that we will be down to 20 pits, as suggested by the leak in The Times yesterday.
What is the global background against which that is happening in our country? Like other hon. Members who take an interest in these matters, I obtain the regular press 863 releases from British Coal. Two press releases, among others, came to me in September. I quote from the press release dated 1 September 1993. The heading isCoal Use Expanding World-Wide.The press release reads:'Britain out of step', says marketing chief. 'Britain is out of step with the rest of the world in turning its back on coal', British Coal's marketing director said today (Wed). Speaking at the British Association's annual meeting at Keele University in Staffordshire, Andrew Horsier said both developed and developing countries were investing in coal-fired plant for electricity generation.Later in the month, I received a copy of a speech of the chairman of British Coal—before the speech in which he hinted that he was not optimistic about the future. He clearly said that, first, the Government had not fulfilled all of their obligations. I quote:Policy guidelines on the level of stocks for electricity generation, to which Government referred in its White Paper and which currently stand at some 33 million tonnes at power stations alone, are yet to be issued".Secondly, he said that the World Energy Council, at its meeting in September, made it plain that energy assessments have an increased role for coal in the world, not a diminished one. Therefore, the world will look for more coal to use.
Britain has the cheapest competitive coal, as well as the best stocks, in the European Community. Therefore, it is madness for the Government to stand on one side and say, "We reject central planning. Our policy is to ensure if we can that coal remains the single largest source of fuel for electricity and yet do nothing to ensure that that can be guaranteed." Of course, the chairman is pessimistic.
If we look back over the past year, we see that the Government were deluding everyone on the facts about the realistic prospects. British Coal could have competed with imported coal with regard to inland power stations because of the benefits of local transport advantage. However, it could not have competed with regard to coastal power stations where importing coal is not nearly such an expensive business. Therefore, the argument that domestically produced coal would be able to displace imported coal never did stand up on the basis of all the facts. The Government knew that, in all probability, they would rarely have to use the offer of the subsidy, and that has been borne out by the facts. Effectively, the only use of the subsidy was announced last week with regard to Alcan at Ellington, which has been amplified and extended this week.
In the White Paper, and even today, the Government have not made clear what the sensible and intelligent level of stocks should be. The discussions need to be concluded. Yes, large stocks are being produced because British Coal has been very effective and productive. Yes, the stocks might be higher than they have been for a while. However, we do not know what sort of a winter we will have this year or next. We also have no idea whether the Government yet have a clear view of what the stocks should be, which is a crucial determinant of the amount of coal that the industry should be able to sell. The Government have not talked to the electricity generators to seek to persuade them to come to a conclusion over the additional purchases that they may be able to acquire, over and above their base stock. It is imperative that that is done before any decisions are taken about any of the collieries that are still under threat.
864 The problem is that the Government are obsessed with price as opposed to cost. If one adds up all the costs of the coal industry and compares them with all the costs involved in the nuclear generation of electricity, the assessment is honest and honourable, but the Government do not do so. [Interruption.] It is no good the Minister nodding his head because the figures are clear.
In their White Paper the Government said that the avoidable costs of generating electricity from existing coal-fired stations are generally less than the full cost of a new combined cycle gas turbine. The price of electricity generated by nuclear power, at about 1.2p per Kw hour, seems cheap when compared with that of coal, but if one considers the total cost of nuclear power—including all the levy subsidies from other sources—it is about 4.3p per Kw hour, which makes it considerably more expensive than coal.
The Minister has to equate like with like. The problem with this debate and those last year is that coal has not been given a chance to compete on equal terms with its competitors. On its own terms, it is not only winning in the market here but is also winning in other competitive markets abroad. Our coal is now nearly as cheap as any imported coal.
§ Mr. Eggar
The hon. Gentleman ought to compare like with like. He has quoted the full cost of gas and nuclear electricity, compared with the avoidable cost of coal. If he wishes to go in for that exercise, he ought to compare the avoidable cost of coal with the avoidable costs of nuclear and gas. He will find that the cost for coal is higher than for electricity generated by nuclear or gas.
I know that the Liberals inhabit cloud cuckoo land, but when independent generators can invest in new coal-fired stations, as they can invest in gas-fired stations, why does he think that no independent generator has opted to do so?
§ Mr. Hughes
Does the Minister remember that I and my colleagues submitted a full submission to the coal review? The hon. Member for Chelmsford suggested that Liberal Democrats do not have a clear policy, but our policy was very clear and we submitted it, unlike, I should add, the Labour party, which did not submit an alternative at all.
At the beginning of this year we published a further full statement of our policy, and it dealt with the avoidable cost question, which is serious. I understand the dilemma. Our policy dealt with how the Government can pull the levers to create a market for coal within which there is fair competition. The Minister knows what the various policy options are.
The French interconnector is one option that we have often discussed and the Minister and his colleagues have begun to deal with that.
The second option that must be dealt with is the argument about equality and the level playing field, and that involves the nuclear levy. There is no disagreement about the £20 billion in public money given to the coal industry—taking the figures back to 1979. We know that, as electricity consumers, we all make a contribution towards the nuclear levy, too. That has protected the industry, and is evidence showing why the nuclear industry was not sold when the Government privatised electricity generation. If one could correct that imbalance, people would choose coal.
865 As the Minister knows, the long-term contracts, which create a 15-year tie-up to the electricity generators, are the third and most important option. The generators have managed to protect themselves even though—as independent witnesses among others have said—the cost of gas on the world market is increasing whereas that of coal is decreasing.
As I want to win the argument, I shall be reasonable. I would be happy—not for myself or for my party, but for the country and the coal industry—to meet the Minister and to go through the document that we produced. I am advised that our figures are accurate. We could do that on a rational basis, away from the Chamber. I hope that he would then agree at least to reconsider pulling the levers that only the Government can pull. If they do not do so, they will leave British Coal alone, unsupported and, they hope, in the private sector.
I do not want to extend the debate but must comment on two further matters. It is ludicrous that we are still not trying to evaluate the prospects for coal in the context of a total energy policy for this country. The same, sadly, was true a year ago. We are awaiting a debate on the Monopolies and Mergers Commission report on the gas industry; the debate on the review of the nuclear industry is in the wings and a leak yesterday suggested that the Government may be going for a 20 to 25 per cent. nuclear energy component; a debate about the renewable energy industry is also in the wings; and in March we debated coal industry policy. We cannot possibly plan a long-term strategy whereby the coal industry will have some security unless it is part of the review of our total energy mix and we come to a common view about which component works where.
It is no good the Minister saying that we must just leave it to the market. I know what the Government are up to. They are holding the fort until the next Session. They will then put a Bill before Parliament to privatise the coal industry, sell it off and wash their hands of it, saying, "It's nothing to do with us." That is Thatcherism gone mad. The paradox is that I thought that it was a case of Thatcher going mad; but she now realises that the policy is mad, just as the Government are continuing with it.
Privatisation is probably irrelevant to the future world market for coal and the British contribution to it. British Coal becomes more productive, effective and efficient every week. Privatisation will change none of that and the Government ought to put the privatisation proposals and debate on the back burner until they have taken responsibility for the industry and given it a secure future first.
Why did the Minister duck the question that the hon. Member for Livingston (Mr. Cook) and I both asked him? Why did he give a fatuous answer about windmills, which he knows are entirely irrelevant? What is the minimum size that he and the Government are willing to allow the coal industry to be reduced to? All the expert advice suggests that the industry will not be viable below a certain size. It will not be a player in the world market and will effectively be written off. Much of our deep-mined coal is viable, many pits have plenty of stocks left and many people who work in them want to keep their jobs rather than do something else. That should be the Minister's concern, and he needs to come clean with his colleague the Secretary of State for Employment at the end of the debate and tell us what is the bottom line for the Government—or is there no bottom line, which is what we believe?
866 We must all be concerned about the consequences for jobs. Of course we should not maintain the industry merely so that people can keep their jobs if we do not need it; but what if we do need it and people want to work in it? The statistics are clear. Coal-mining areas have some of the highest unemployment in the country and evidence shows that, once out of work, the majority of people do not find work again in a short time. When, they do find a job, it is not usually as secure or as highly paid, and many households soon become dependent upon the woman as the main wage earner. We are therefore right to be concerned about the economic implications of pit closures. It is madness to pay redundancy to people to do nothing when coal is in the pits, they want to work and there is a global, European and British market for the product.
The Government must also come clean on opencast coal mining. There has been draft interim planning guidance, but we have not had the final document. It is absolute nonsense to close down pits in which there has been capital investment underground while ripping up England's green and pleasant land for opencast mines that most communities do not want. The hon. Member for Leicestershire, North-West (Mr. Ashby), who represents one of the heartlands of England, made the point as tellingly as I can. We must say no to opencast mining because the louder and more clearly we say no, the more supportive we will be of the British coal industry and exisiting pits.
I hope that the Minister will accept my invitation to go through the statistics together away from the Chamber. I do not think that he understands yet how overwhelming the case is for the coal industry to survive. I hope that his hon. Friends will make it clear that they are not satisfied that the Government have done all they can. I hope above all that it will be clear to the British people that, although they may sometimes feel betrayed by the Government and those who work for the Government, many of us and the majority of British people within and outside coalfield communities believe that British Coal has a future and want it to have a future and that the Government so far have been profoundly wrong.
§ Mr. Winston Churchill (Davyhulme)
A week ago, I returned to Westminster from Blackpool with every hope and intention of doing my bit for party unity, only to be hit between the eyes with what the Governor of Hong Kong would call "a double whammy" of further defence cuts and additional pit closures, neither of which I am able to support.
In common with certain other hon. Members on both sides of the House, I had the opportunity in recent months of visiting several pits. Indeed, I had the privilege of going underground at Welbeck and Calverton collieries with men who, without a shadow of a doubt, are the finest deep miners in the world. These same men kept the lights on when Arthur Scargill turned his bulldozer of the National Union of Mineworkers against parliamentary democracy in 1984. The Conservative party and this Government owe those men a great debt of honour as, indeed, the noble Lady, Baroness Thatcher, herself acknowledges. Nothing grieves me more in this sad and sorry business than that the present generation of Ministers is prepared to kick those men wantonly and gratuitously in the teeth.
867 There is bewilderment, cynicism and anger in the coalfields. They have fulfilled all ministerial injunctions to increase productivity, to reform working practices and to modernise their production to put it on a par with any coalfield to be found anywhere else in the world. They have broken every record in the book in the name of market testing. Since March, many pits have increased productivity by a further 20 per cent. The Minister for Industry cannot point me to another industry in the land that has achieved productivity increases on the scale that has taken place in recent months in the coalfields. As one miner said to me and some hon. Friends only last night, "We are just burying ourselves in our own coal." That is the measure of their success in fulfilling Ministers' injunctions.
I find it difficult to explain what is going on. Clearly, it started in the mid to late 1980s as an understandable determination by Ministers that this country should never again be held hostage by Arthur Scargill, or any successor, and the NUM. But there is a limit to the time that generals or, indeed, Ministers can fight the battles of yesteryear. There is no militancy left in the pits. Scargill has no clout left. To fight the battles of a decade ago is to miss the point entirely. They are irrelevant. What started as a plan to put Scargill and the NUM in their place now appears to be a craven bowing down by Ministers to the vested interests that were established in the wake of electricity privatisation.
I am glad that in opening today's debate the Minister did not once again trot out his hoary old chestnut that we have a free market in energy. It is patently clear to everyone in the land that there is no free market in energy. We have the most rigged market that it would be possible to devise. [Interruption.] The Minister groans, and well he may. Each year, a £1.3 billion subsidy goes from the electricity consumer to Nuclear Electric. Is not that evidence of a rigged market? Nuclear Electric has a guarantee that it can sell to the grid every kilowatt hour of energy that it produces. Is not that evidence of a rigged market? Similar privileges have been accorded to our friends across the channel with the interconnector.
It is inconceivable that Ministers allow themselves and the British electricity consumer to pay a subsidy to Electricite de France because they accept that every kilowatt hour of electricity that comes through the channel interconnector is produced by nuclear energy. They know full well that nothing could be further from the truth. Much of it is produced by fossil fuels, so it should be charged with the fossil fuel levy and should not get the kickback subsidy that the mug of the British consumer is required to fund through his electricity bill.
In March, my right hon. Friend the President of the Board of Trade reprieved 12 of the 31 pits that on 13 October 1992 he announced would close. At that time, undertakings were given that he would take steps to carve out a wider market for coal. Does my hon. Friend the Minister for Energy recall being present in the room of the President of the Board of Trade when that undertaking was given to me and several of our hon. Friends on the evening of 24 March? If so, could he perhaps tell me, the House and our mineworkers what steps he has taken personally with his ministerial colleagues to honour that promise? I willingly would give way to him if he cares to answer. 868 [HON. MEMBERS: "Speak, speak."] It remains possible for people not to break their silence, although I believe that the Government have plans to address that matter for the criminal courts, if not for the House.
What steps have my hon. Friend and his ministerial colleagues taken to reign back the dash for gas to load following rather than base-load generation, as recommend by the Select Committee?
§ Mr. Churchill
Quite so. Indeed, the Government have licensed two additional stations when they were under no legal obligation to do so.
What steps have my hon. Friend and his ministerial colleagues taken to require Nuclear Electric to use the subsidy of £1.3 billion a year for the very purpose for which it is paid—to put in place an orderly programme for the closure of the Magnox reactors? Instead, that subsidy has been used to fund those reactors so that they can continue to operate in the future.
What steps have my hon. Friend and his ministerial colleagues taken to prevent the generators running down their coal stocks at an unnecessarily rapid rate, which has had the effect of utterly kicking the bottom out of the market for coal? What is the value of market testing when there is no market? That coal could be delivered free of charge to the generators and it still would not be possible to find a market for it.
What steps have my hon. Friend and his ministerial colleagues taken to curb the burning of orimulsion by requiring flue gas desulphurisation technology to be put in place to cope with that very dirty form of fuel? Has the Prime Minister been in touch with Prime Minister Balladur, either on the telephone or face to face, to insist on equality of flow through the channel interconnector? Has my right hon. Friend asked that gentleman to facilitate —as the French are bound to do under the treaty of Rome —the export of electricity from this country to Spain and other EC countries via the French grid?
I look forward to the reply by my right hon. Friend the Secretary of State for Employment in view of the evident unwillingness, or possible inability, of my hon. Friend the Minister for Energy to answer the questions that I have posed.
I regret to say that Ministers have taken none of the steps that I have outlined. Therefore, the reprieves that they announced earlier this year and the exercise in market testing were simply nothing more, at least in their eyes, than a cynical charade. In consequence, even the 12 reprieved pits-12 out of 31—of which 10 now remain, will be closed. I believe that some of those closures will be announced next week and others in the coming months. No doubt even more pits besides those 10 will be closed, perhaps even some of the 19 core pits that were not on the original hit list of British Coal and the Secretary of State.
My hon. Friend the Minister makes great play of the fact that the coal industry has received £20 billion in subsidy in recent years from the Government. He misleads the House, however, if he seeks to suggest that those funds or the bulk of them have been put towards investing in the industry's future. He knows full well that that is not the case. Those funds have had to be provided to close down the industry and to pay miners to go away. They have been used for a different purpose from that implied. My hon. Friend knows full well that no operating subsidy has been paid to the 869 mining industry in the past 10 years, and to harp on that figure of £20 billion does my hon. Friend's case less than justice.
Certain of my hon. Friends and many of our constituents are concerned about the cost of the intended imposition of VAT on fuel. I wonder whether my right hon. and hon. Friends are aware that if the pit closures programme, as announced 12 months ago, is implemented in full, the cost will exceed the entire net revenue to be derived from VAT on fuel in 1996–97, when it will be paid at the full rate of 17.5 per cent. It is anticipated that that tax will generate £2.2 billion net. Evidence given to the Select Committee, however, suggested that the cost of paying miners to go away and of closing the pits will run to £2.5 billion. Obviously, that is far greater than the amount that will be raised in revenue from that unpopular tax.
What Government in the world would put under 6 ft of concrete a nation's greatest natural resource? In fact, we have the greatest natural resource of Europe. What Government would sack a work force who have broken all productivity records and who are employed in the least expensive deep mining industry in the world? That decision is unnecessary and wrong and, in consequence, I have no alternative but to cast my vote against the Government tonight.
I can tell my right hon. and hon. Friends that it gives me no pleasure to oppose my own party and my own Government. As Members of Parliament, however, if we have any good purpose in the House, surely it is not to follow blindly the Whips' bidding and to rubber-stamp Government policies, whether they are right or wrong. Our purpose must be to vote for what we believe to be right and in the national interest.
I shall not vote against the Government just to make a protest against something that is inevitable—the closure of the pits—because I do not accept that inevitability. Even now, at least 10 of those 31 pits could be saved. That can happen, however, only if the House requires the Government to abandon what I believe to be their shameful, short-sighted and wrong-headed policy. In those circumstances, the Government would have no choice but to tackle head on the rigging of the market against coal. They would have to establish a truly fair and free market in energy and reign in the dash for gas. They would be required to curb the nuclear industry at the margins. They would also be required to pick up the telephone and call Prime Minister Balladur to make it clear that we are not prepared to see six mines closed in this country just because of the interconnector.
Other countries such as the United States and Spain are investing in coal. At the weekend, it was announced that Spain will receive significant EC subsidies to enable Spanish mine owners to exploit their resources. It will cost twice as much to mine that coal as that which we will be putting under 6 ft of concrete. What a fantastic state of affairs. What are the Government doing about that? No doubt our contributions to the EC will be used in part to subsidies those Spanish pits.
At the end of the day, when the gas has run out, when the coal imports from Siberia and Algeria are rather dodgy and when the price of imported coal has gone through the roof, will those who sit on the Treasury Bench not live to rue the day, along with the rest of us, when British coal was put under a slab of concrete?
§ Mr. John Evans (St. Helens, North)
This is a unique occasion for me because I can say, with heartfelt sincerity, that it is the first time in almost 20 years in the House that I can follow a Conservative Back-Bench Member and tell him that I enjoyed his speech. I agreed with much of it and look forward to the hon. Member for Davyhulme (Mr. Churchill) joining us in the Lobby tonight. I trust that other Conservative Members who support him will also have the courage to join us in the Lobby. I echo the hon. Gentleman's words that it is still not too late to save the British coal industry if a sufficient number of Conservative Back-Bench Members have the guts to follow the hon. Gentleman's lead.
Just over 12 months ago, the only colliery left in the Lancashire coalfield, Parkside colliery in my constituency at Newton-le-Willows, was gearing up to go into full production in a new multi-million pound scheme. As I said in the House at the time, the miners said that it was the best scheme ever developed at Parkside colliery and that by Christmas the colliery would be making profits worth millions of pounds. Some 80 per cent. of the colliery's output went by environmentally friendly merry-go-round trains direct to Fiddler's Ferry power station, just six miles away. The juxtaposition of the colliery and the power station was a piece of intelligent physical planning that made sound economic sense.
Nearly 800 miners worked at Parkside colliery. The vast majority were young men with families and mortgages. Many of them had worked at two, three or four other collieries in the area which had closed during the previous two or three years. They all thought that they had a good future because Parkside colliery had millions of tonnes of valuable reserves below the ground. The pits had been profitable in each of the previous five years and had a superb and efficient work force. The miners thought that the pits had a future.
Then the axe fell—Parkside colliery was included in the 31 pits to be closed in the announcement made by the President of the Board of Trade on 13 October 1992. As everyone knows, the subsequent outrage that swept the country resulted in the President of the Board of Trade making a statement in the House on 19 October saying that 21 of the collieries would be reprieved and that an inquiry would be launched to save as many pits and jobs as possible. Everyone now recognises the fact that the only job that was considered for saving was that of the President of the Board of Trade.
However, Parkside colliery was one of 10 collieries which British Coal said had no future, and on Friday 23 October British Coal ended production at the colliery, despite the promises made repeatedly by Ministers that there would be proper consultations between British Coal and the miners at the collieries concerned and a proper review of the likelihood of those collieries being saved.
No consultations whatever took place with the miners and no review took place of the collieries. Parkside colliery —which was opened in 1964 and on which millions of pounds were spent last year—is now abandoned. It is a monument to the Conservative Government's folly, which has turned so much of British industry into a graveyard. It is a very sad graveyard.
Although British Coal may have abandoned the colliery, it has not been abandoned by a dedicated group of women who are still fighting to save miners' jobs. I refer 871 to Parkside Women Against Pit Closures, who launched their campaign to save the colliery on Monday 18 January 1993. The camp which they set up by the side of the A49 at the entrance to the colliery has been "manned" 24 hours a day, seven days a week. Those women are still occupying that site and their behaviour there has been exemplary. They have always co-operated with the local police at Newton-le-Willows and St. Helens, informing them of any events that would take place, whether rallies, demonstrations or whatever. Not a single incident has occurred at the colliery site in the past nine months, nor has there been a single arrest. Indeed, the local police have always co-operated with the women at the site and kept a friendly eye on the camp, particularly through the night.
However, those good relations disappeared in the week beginning Monday 4 October 1993, when British Coal in its wisdom decided to bring in stone to start filling one of the shafts. The women mounted a picket and sought to persuade some of the lorry drivers to turn away and not deliver the stone to the colliery. Although they were supported by many of the lorry drivers, the stone was still being delivered to the colliery. The women stepped up their protest against the filling operation by occupying the colliery pump house on the Thursday night. The pumps were in use, pumping water and methane gas out of the colliery. The women emphasised to British Coal that they would not obstruct access to the pump house or the pumps, or do anything that would affect the machinery. They pointed out that they wanted to save the colliery and see it return to full production.
The following day, Friday 8 October, a British Coal management team arrived and entered the colliery precincts. Later that afternoon, the care and maintenance work force still at the colliery were sent home. Some time after midnight on the morning of Saturday 9 October, the entire pit, the access roads to the colliery and domestic properties near the pit were plunged into complete darkness. All the power had gone. Shortly afterwards, the British Coal management team went to leave the colliery. The women were alarmed at what was happening and asked what was going on, but the British Coal team refused to respond and retreated back into the colliery. The women were particularly concerned about the fate of two colleagues who were left in the darkened pump house well inside the colliery precincts.
Shortly afterwards, a dozen or so uniformed police officers arrived. The inspector informed the women that they were breaking the law and said that they must leave the site or he would arrest them. The women asked the police inspector to inform them which law they were breaking, but that question went unanswered. The women, who always co-operated with the police, said, "Well, if you must have a couple of arrests, we shall volunteer two of our number who can be arrested and that will satisfy the police requirement."
No arrests followed, but at about 2.30 am five vans suddenly pulled up at the colliery and about 45 riot police in full riot equipment, many of them with dogs, arrived at the scene and proceeded physically to manhandle the women to the side of the road. One of the women was bundled into the women's cabin and told that she was 872 under "cabin arrest". Another was bundled into a police van, driven down the A49 and then dropped at the side of the road.
The riot police moved through the women towards the only man who was with them, and whacked him in the face with their riot shields. That individual was a 25-year-old named Billy Pye, who is a former miner at Parkside, a resident of Newton-le-Willows and a member of the National Union of Mineworkers national executive committee. Fortunately, Mr. Pye was smart enough not to retaliate. If he had done so, I would not like to think what would have happened. Suddenly, the riot police disbanded. The whole incident, from the arrival of the riot police and their leaving, took only five minutes. No arrests were made, so presumably no law was broken.
As the Member of Parliament who represents Newton-le-Willows and the surrounding area, I am entitled to ask why that terrifying and somewhat brutal police action was instigated. Why were nearly 70 police officers used to subdue seven women and one man? Was it not a question of intimidation aimed against the women against pit closures campaign? I am entitled to ask also what was the cost of that police operation, particularly when the Merseyside police authority and the chief constable constantly complain to Members of Parliament of a shortage of resources to undertake ordinary police work.
As darkness gave way to dawn and to daylight, it transpired that British Coal—without notifying or warning the North Western electricity board—had cut the entire colliery out of the national grid. That created a powerful and dangerous reaction, which it is alleged damaged the major substation at the colliery, blacked out part of Newton-le-Willows and caused difficulties for British Rail.
When the substation was examined later by electricity board officials, they allegedly said that it had been left in a dangerous condition. If the women had interfered with the electricity supply, they would have been vilified, arrested and probably sent to jail. British Coal personnel left the colliery on 9 October and no one has returned there since. We were told that Parkside would be one of the collieries offered for sale to interested parties, but it has been abandoned. The only people there now are a couple of civilian security guards and members of the women against pit closures campaign.
My concern now is with what is happening with the pit. Parkside has a major contract to supply methane gas to Crossfields at Warrington. No gas has been pumped to Warrington for many months. No gas at all has been pumped from the colliery since the pit closed on 9 October. I am no expert, and I should like to know what is happening about the build-up of methane gas at Parkside. Is there any danger of an explosion occurring at the colliery, or of gas seeping from the colliery and entering properties in the vicinity?
I have written to British Coal to protest at the completely irresponsible attitude that it has adopted towards Parkside and the rest of the British mining industry. I invite the Minister for Energy to join me in asking British Coal for a report on the events at Parkside on 9 October, and to clarify whether any dangers exist at the mine. The Minister will appreciate that that part of the country has a long history of tragic colliery gas explosions.
The Secretary of State for Employment also represents a Merseyside constituency, and will be visiting a school in Haydock in my own constituency in a couple of weeks. The grandfathers of children there worked in the mining 873 industry in Haydock, St. Helens and Newton-le-Willows. I hope that the Secretary of State will join me in inviting the chief constable of Merseyside to provide an explanation as to why so many policemen were used in a frightening and intimidatory action in the middle of the night against a handful of women. I hope that he will do so, because Merseyside police and British Coal have a case to answer.
§ Mr. Phillip Oppenheim (Amber Valley)
I rise with mixed feelings to speak in this debate. I have much sympathy with the plight of miners who have been made redundant and miners who will be made redundant, for several reasons. My constituency has a history of pit closures and job losses from the mining industry; I am well aware of the significant productivity increases that miners have won from the ground over the past 10 years or more; and I am more than well aware that the structure of mining communities makes it difficult for their members to find work outside that industry. I am particularly saddened and concerned because Conservative Members feel great loyalty to those miners —particularly members of the Union of Democratic Mineworkers—who stood up to intimidation and kept the industry moving in 1984–85.
Many important and significant issues have not been addressed by right hon. and hon. Members tonight. There has been much talk of unfair competition from the nuclear and gas industries, but many forget that British Coal is also confronted with competition from imported coal. Many right hon. and hon. Members said that British Coal produces the most competitive coal in Europe, but we do not just live in Europe; we live in the world. The sad fact is that British coal is not always competitive with coal on world markets. It may be more competitive than German or Spanish coal, but not more so than Australian or American coal.
United Kingdom coal generally costs in excess of £40 per tonne. Coal can be landed in this country at £33 per tonne. The Organisation for Economic Co-operation and Development average is £26 per tonne, and our competitors in France and Italy—who import a great deal of coal and have virtually no coal industry of their own left —regularly import coal at less than £30 per tonne.
Many right hon. and hon. Members know in their heart of hearts that Britain's geology is too often against us. Some of the largest and easiest seams were worked out long ago, and the American deep mine sector has a far simpler job because its geology is easier and hence its coal is cheaper.
§ Mr. Oppenheim
I am flattered that the hon. Gentleman should remember my remarks last year, but this is a new speech. I hope that he will remember its contents next year. Apart from coal from a relatively small number of pits, British coal cannot be produced at such a low cost as that from Australia and the United States. Our larger stockpiles of coal are also a contributory factor in some pit closures.
§ Mr. George Stevenson (Stoke-on-Trent, South)
As to the geological problems that British collieries face by comparison with their overseas competitors, is the hon. Gentleman aware that one year before it closed 18 months ago, Trentham colliery in my constituency produced the quickest 2 million tonnes in Europe, and made £7 milllion profit?
§ Mr. Oppenheim
I tried to make it clear that I am not talking only about European coal. It is not difficult for Britain to be the most competitive coal-producing country in Europe when it is competing against the German coal industry, which we know is hopelessly inefficient, and the small and inefficient coal industries of France and Spain. Our coal industry has to compete in the world market. We cannot be little Europeans and think only in terms of Europe.
The hon. Gentleman says that Trentham is profitable, but he forgets that, until this year, British Coal had significant protection against imports, so it was relatively easy to show a profit.
§ Mr. Derek Enright (Hemsworth)
I want to give a practical example to the hon. Gentleman. Since Grimethorpe colliery, which supplied industrial coal, closed down, its customers have had to pay more on the free market. That is nonsense.
§ Mr. Oppenheim
I should have thought that, if that were so, someone would have bought Grimethorpe colliery by now. If it were so easy to produce cheap coal at Grimethorpe, I find it amazing that nobody began to mine coal there.
§ Mr. Enright
I accept the hon. Gentleman's amazement. The matter astounded me and my hon. Friend the Member for Batley and Spen (Mrs. Peacock). During the review procedure, machinery was taken out of Grimethorpe and it was almost shut down. That astounded me, and I welcome the hon. Gentleman's concern.
§ Mr. Oppenheim
I accept what the hon. Gentleman says. I do not have a lot of time for British Coal's management, who play a lot of games and are trying to protect their position, but one cannot get around the fundamental fact that, until recently, Government deals made between the Central Electricity Generating Board and the National Coal Board, as it then was, effectively forced the CEGB to buy coal from the NCB and prevented all but a small quantity of supplies from being imported. The hon. Gentleman knows that that is true. Until recently, the British coal industry enjoyed significant protection from imports.
§ Mr. O'Neill
Surely there are two aspects to the matter: first, the price of coal, about which the hon. Gentleman, although there is an alternative to his view, is advancing a strong argument and, secondly, the importance of a national strategy for coal. It is important not only that we have a diversity of fuels in an energy portfolio but that part of that portfolio is exclusively British in character. Our mining industry will soon not be large enough to sustain itself into the next century, despite the fact that we have massive reserves that we could exploit well into the next century. We are getting to the point where we could have diseconomies of small scale rather than economies of large scale. The hon. Gentleman's view is blinkered and his perception is far too narrow.
§ Mr. Oppenheim
If the hon. Gentleman will bear with me, I shall do my best to answer those points.
The hon. Gentleman mentioned rigged markets, but if the market has been rigged it has been rigged in favour of British coal. For years after the war, the CEGB was forced by the Government to buy British coal and was banned from buying imports. British Coal benefited further from subsidies that amounted to £20,000 million in the past decade. That was a significant sum, and if the market was rigged it was, until recently, rigged very much in British Coal's favour.
British Coal received further help. Until recently, generators were not allowed to burn gas for power generation in competition with British Coal because it was Government policy not to burn gas for power generation.
The hon. Member for Clackmannan (Mr. O'Neill) spoke of diversity, but we have not had diversity in this country. We generated the bulk of our power from two Government-directed sources—nuclear and coal. Other countries benefited from diversity. Japan had an expensive coal mining sector; it closed almost all its coal mines and now buys the cheapest coal and gas on the world markets, as well as having a nuclear sector. The Italians closed most of their pits; they now benefit from buying gas on world markets. We shall not ensure diversity or security of supply by saying that we shall exploit our natural resources without importing energy. That is the best way to create energy insecurity. If cheap energy sources are available on the world market, we should take advantage of them and conserve our natural resources for future use.
If all the pits are closed, we shall still generate 30 per cent. of our electricity from domestically produced coal, which is much more than most other industrialised countries.
§ Mr. Cormack
Nobody is sensibly suggesting that we should be wholly dependent on British coal. I have not heard any hon. Member suggest that. I have heard time and again the view that we should protect our indigenous fossil fuel industry as a vital ingredient in our energy supplies. My hon. Friend mentioned the management of British Coal. Does he think that they have pursued with vigour their prime duty, which is the defence and promotion of our indigenous fossil fuel industry?
§ Mr. Oppenheim
No, I think that British Coal has been pursuing its own rather smaller interests, and I am not defending its management.
The hon. Gentleman says that we have not had diversity of supply.
§ Mr. Oppenheim
Occasionally, one forgets such things, but of course the hon. Gentleman is my hon. Friend.
The reality is that we have not had diversity of supply. For years, under a Government-directed policy, we generated 65 per cent. of our electricity from coal—a ludicrously high proportion from the environmental, economic and energy security points of view. Comparable figures are only 50 per cent. in Germany and 8 per cent. in France. Even the United States, which has access to some of the cheapest coal in the world—far cheaper than the coal to which we have access—produces only 55 per cent. of its electricity needs from coal. If we want to ensure energy 876 security, it strikes me as totally daft to say that we shall burn our indigenous energy and not take advantage of cheap imported gas or cheap imported coal.
§ Mr. Oppenheim
Then I put it to my hon. Friend that this more market-driven system—although it is not market driven enough for my tastes—will result in a balance whereby we generate about 30 per cent. of our electricity from domestic coal, about 10 per cent. from imported coal, about 20 per cent. from gas and the rest from other means, including nuclear. That strikes me as a far more balanced policy than we have had since the war.
We have heard much talk about foreign supplies of energy not being very secure because countries are unstable, but we get almost all our imported coal from the United States and Australia, which both have stable democracies and have had long and friendly links with Britain. We cannot say to them, "I am sorry but we are not importing coal from you any more because you are not stable." That would be ridiculous.
Hon. Members mentioned countries such as Russia and Poland, from which we get a small quantity of coal, and said that we must not buy from them because they are poor, unstable countries and because we cannot rely on them. It strikes me as being an extraordinary policy for people who call themselves socialists to say that we should not buy coal from countries that are poorer than us. That is not much like the brotherhood of man. If we carry on saying to those poorer countries, "We won't buy your products because we can't rely on you," we will end up ensuring that those countries are unstable. Furthermore, such beggar-my-neighbour policies will ultimately beggar ourselves, because unless we buy from those countries what they are best able to sell us, they will not have the resources or the wealth to be able to develop their economies so that they can buy more sophisticated products from us.
Ultimately, such policies lead only to an intensification of political and trade conflicts, and worse conflicts than that. If we constantly say to third-world countries that we will not buy their products because we think that they are unstable, they will have no chance whatever of improving and developing themselves.
Many hon. Members on both sides of the House say that we should have an energy strategy. One reason why we have problems in our nuclear sector is that it was part of a Government-directed energy strategy. That should be a warning to us, because the Government directed the proportion of electricity that should be generated by nuclear, and directed that we should buy indigenous technology at all costs.
In the 1960s, the politicians said that we should buy advanced gas-cooled reactors because they were British designed, and rejected cheaper and more proven American-designed pressurised water reactors. By the 1970s, the AGR programme was in predictable trouble. Instead of then taking the advice of the CEGB chairman, Sir Arthur Hawkins, and adopting the American technology, we went for another United Kingdom design, the SGHWR, because it was lobbied for by vested interests. Three years later, that was cancelled.
Because it was state directed, the story of the British nuclear industry is one of enormous waste of resources and scientific talent. What makes it worse is that no one knew 877 the cost because of the way in which the system was run, until we had to find out during privatisation. The history of nuclear electricity in Britain should be a warning against industrial strategies, or intervention or energy strategies, because, however imperfect the market may be, it is always a great deal less imperfect than the results when those choices and decisions are made by politicians.
I have a great deal of respect for and sympathy with the plight of the miners, but I would put it to them that there is no future to be gained for any industry by protecting it from competition, be it domestic gas competition or foreign competition from imported coal. I welcome the help that the Government have tried to give and the efforts that they have made. My area has benefited from the assisted area status for Alfreton and Ashfield.
I have no sympathy whatever with the position of the Opposition. It is easy to be caring, to bemoan job losses and to call the Government uncaring when one is in opposition. When Labour was in power, it cut thousands of mining jobs in my constituency. During the 1960s and 1970s, Labour Governments shut one pit for every week. They gave the miners who were made redundant an absolute pittance compared to the redundancy payments that we give them today.
Labour also backed the strike in 1984–85. I put it to hon. Members that that strike had a bad effect on the coal industry as a whole. I have no doubt whatever that if it were not for that strike, we would be able to save many more pits than we are saving today. I have no confidence in and no sympathy whatever for the position of the Opposition. I consider their attempts to say that they are caring as nothing more than sanctimonious humbug. They should look to their own far from glorious past in the coal industry before criticising the real efforts of the Government to make the British coal industry competitive.
§ Mr. Deputy Speaker (Mr. Michael Morris)
Order. I remind hon. Members that Madam Speaker has ruled that speeches between 7 pm and 9 pm are restricted to 10 minutes.
§ 7.4 pm
§ Mr. John Cummings (Easington)
I never thought that I would see the day when my colleagues agreed with a Churchill. The hon. Member for Davyhulme (Mr. Churchill) put on the record the reasons why, and the way in which, the Government should assist the British coal mining industry to achieve a larger share of the market. Because I am governed by the limit of 10 minutes, I shall not enter into the same arguments.
I wish to place on record my admiration for the men at Vane Tempest colliery and the group known as Women Against Pit Closures, who fought a magnificent campaign —the men in respect of the jobs, and the women in support of their menfolk. The men fought valiantly against the intense pressure and intimidation by British Coal, which led to a withdrawal of several thousand pounds for each miner who was eventually declared redundant at Vane Tempest. I salute those men, and the womenfolk who stood by them.
The history of closures in my area is long. Since 1979, we have seen the closure of South Hetton, Horden, Blackhall, Eppleton, Hawthorn, Seaham, Dowdon, Murton and Easington. It would be interesting to hear from the 878 Secretary of State how much of the £20,000 million was expended on redundancy payments in those collieries. How much of that money remains underground in those collieries? Those collieries are now flooded, their roofs have caved in, and many hundreds of millions of tonnes of coal have been sterilised, not only for this generation but for future generations.
The Secretary of State may well recall the case that was made by Easington district council for the retention of Vane Tempest and Easington collieries. I was delighted to hear this week that British Coal is exporting 100,000 tonnes of coal to Denmark. I understand that the coal is from stocks that remain at Easington colliery. The case was made some three years ago by the district council to the Department of Trade and Industry and to British Coal that they should get off their backsides and explore markets that we knew existed in Europe, and for which European funds were available, to assist with the cost of transportation and shipping.
Nothing was done until after the demise and closure of Vane Tempest and Easington. Lo and behold, out of the blue we can export 100,000 tonnes of coal. I am delighted with that. It may mean extra jobs at Blyth, from where the coal will be exported. It could mean extra jobs at Seaham, should orders continue to be received from abroad. There is a market there, but it had not been tested. No one had the commitment to move into the line of exports until the 11th hour and 59th minute.
We are also left with problems at Easington colliery, which is up for sale. Budge has expressed an interest in taking over the colliery, securing perhaps 600 jobs. I am not saying that I am in favour of privatisation of the industry, but we are talking about 600 jobs. We are talking about a highly skilled and highly motivated work force. We are talking about a sophisticated mine, which, in the past, attracted tens of millions of pounds of taxpayers' money, as the Minister keeps reminding us. There are several million pounds of pumping costs to be met.
For the benefit of hon. Members who do not understand what is happening in Durham, I should say that there are five pumping stations, but no operational collieries. Should the pumping cease at Easington and the other stations in Durham, the whole of Durham's water supplies will be at risk. Serious concern has been expressed by the National Rivers Authority. At Blyth, injunctions may be taken out in future.
The industry has been transformed over the past 10 years. We have had mechanisation, automation, computerisation; we have had reorganisations; we have had combinations. All of that has been done with the co-operation of trade unions and a willing work force. Output has soared by 38 per cent. over the past year. Nothing in any sector of British industry can match it. And the reward? The miners are given the sack and put on the dole in areas where unemployment already tops 20 per cent.—in some, 25 per cent.
Statistics and logical arguments will not, I fear, win the day in the Chamber. Ministers need to have the political will. They must examine practical ways of assisting the indigenous coal market. Can we really rely on the stability of the middle east or of the former Soviet Union? It is interesting to note that 20 Tories have signed a letter against the defence cuts. Do those same 20 Tories truly not believe that we require a home supply of energy for this 879 and future generations? Will they follow us into the Lobbies tonight to express their anxiety about what could happen if Britain is held to ransom in the future?
We have witnessed the obscenity of the electricity suppliers generating and marketing their own electricity. In their areas they have a monopoly. I cannot shop around and buy from NORWEB or a southern-based electricity company. I have to buy from the north-east, from Northern Electric. It is certainly not a free market.
The legacy of pit closures also worries us. Right hon. and hon. Members must understand what it is like to live in a colliery community. In the past, we were self-sufficient islands. We have colliery housing, now in a deplorable condition in Easington. We will be left a legacy of redundant colliery buildings. English Heritage, uniquely to my knowledge, has expressed an interest in retaining some colliery housing and buildings. My advice to English Heritage is to keep people in the housing and to bring in the money to provide grants to improve the properties and the general environment in which people have lived for many generations next to slag heaps—virtually inside the colliery yard.
We have had marvellous colliery welfare schemes, paid for out of miners' pay packets for generations. They, too, are at risk. Hard-pressed local authorities are in no position financially to take over the many acres of welfare grounds and miners' welfare clubs, tennis courts, bowling greens, cricket grounds and football pitches.
I do not know what will happen in the run-up to privatisation, but I should like the Secretary of State to assure us that these schemes will continue and that the new owners of the pits will be responsible for their continuation.
The Minister has tried to persuade us that the mine workers pension scheme will remain safe in Government hands. I am not sure that it will. I am worried about the hundreds of thousands of people who rely on the miners' pension fund, and I want concrete guarantees in any future Bill to give me the confidence of knowing that the pension scheme is secure.
Ministers must be aware of the effect of coal imports on our balance of payments. Hundreds of millions of pounds are at stake. The Government deficit is running at £50 billion, but we also have an £800 million bill every year for redundancy payments to miners—
§ Mrs. Elizabeth Peacock (Batley and Spen)
My interest in coal is well known in the House and has become more so in recent months. I must declare an additional interest in the coal industry today, as I am now helping Edwards Energy/Coal Investments to reopen mines in south Wales and Yorkshire, where we hope to retain some jobs.
My general interest will continue, and I ask the Government to move forward rapidly on four separate but related aspects.
I believe in the continued importance of coal in Britain's long-term energy policies. I also believe in ensuring that enough markets are retained to sustain a viable mining industry in Britain. We are, after all, sitting 880 on our own resources. Early steps must be taken to restructure the industry by privatisation, creating a truly competitive market.
In the period running up to privatisation, the licensing of private mines should be undertaken in a way that allows those pits to operate in the private sector.
It is essential that this or any other Government ensure that coal plays a significant part in Britain's long-term energy policy. Although coal may be more difficult to obtain than gas, oil, nuclear or water energy supplies, it is a British resource which remains unaffected by changes in international politics. That could be important in the future. I therefore suggest that a policy decision must be made to retain coal production at viable levels.
I have received today a letter from ICI in which a change is also suggested:As a first step towards the necessary fundamental review of the electricity market, surely there is an intellectually simple and quick fix that the Government could require as a 40 per cent. shareholder in the Generators? If ICI and other intensive electricity consumers could only gain access to operate Fiddlers Ferry power station under the same conditions enjoyed by PowerGen, an additional 3 to 4 million tonnes of coal a year would be locked into electricity generation, mines would be saved and our electricity pricing problem would be resolved.So the high energy users feel strongly about the issue.
By privatising electricity and gas before coal, we brought the full force of the competitive fuel market to bear on coal when it was still in no shape to respond to the change. As any undertaking is freed from the control of the state, its management is determined to benefit from the rewards of the private sector—and their new shareholders will accept nothing else. The idea of regulating the markets by means of independent watchdogs has not been a success —indeed, that has been the Achilles' heel of our privatisation programme.
I consider that a market must be wholly free of restrictions, or it must accept some degree of state control. As a Conservative, I believe in free enterprise and in freedom of action and choice. Equally, I believe that the state has a part to play in strategic areas of a nation's well-being. Britain's energy policy is one such area in which the state should retain control over its destiny. By relying on the industrial watchdog principle, we have passed that control to a third party, thereby abrogating the state's responsibility.
In electricity generation there is no justification for the coal-burning electricity generators and the 12 distribution companies recording bigger than ever profits—totalling £3 billion—in a period when coal costs to generators have fallen about 10 times faster than the price of electricity to Britain's domestic consumers. Fortunately, the regulator is now taking a closer look at the power pricing structure with a view to imposing distribution price controls.
I suggest that this is too little, too late. It is like the virtually uncontrolled dash for gas, and it has been another of the problems that resulted from privatising electricity before coal. Realistically, it was at the time in question probably never possible to privatise coal. I hope that the Minister will take action in this market.
Coal stocks are building up. Representing as I do a manufacturing area, I know well that if goods cannot be sold, production cannot be maintained. If everyone else involved in manufacturing industry in Yorkshire had sat on their backsides over the past few years and had not gone out on aggressive marketing campaigns, there would be no manufacturing left in the area at all. If British Coal had 881 been more aggressive in its marketing, and had become involved in niche markets, many of the mines that are now closing would have a future.
It is outrageous that British Coal can announce one day that it will double imports of house coal and industrial fuel and then a few days later decide to close the very mines that could supply that market. To me as a business woman, that is not good marketing. No wonder British Coal says that the pits have no future, and that it is pessimistic—everyone would be.
If the Government had not given their consent to other gas-fired stations at a difficult time, more tonnes of British coal would be burned and we would have had more of a coal industry left. We have a highly subsidised nuclear power industry, the sales of which are guaranteed. The industry has been allowed to increase its market share from 18 per cent. to—in the near future—around 30 per cent. That leaves 50 per cent. of the market for gas, and 20 per cent. for any other prospects.
British Coal has to be restructured to cut its operating costs and satisfy the changing market conditions. Privatisation is obviously the best way of achieving that, but the four or five new mining companies which are set up must be truly competitive. Competing companies will fight for customers and will do a better job than we have seen in the past. We should ensure that there are several clearly defined, viable and competing coal mining companies. Those companies would then compete in a two-level marketplace with the small but developing mining companies which are already in private hands.
All the companies would be able to supply the large-volume, low-cost United Kingdom electricity generating market if they were given the opportunity to bid into that market. There is some concern that the companies may not have that opportunity.
The specialist domestic and industrial coal markets also can be supplied from controlled cost, low-volume production mines with minimal overheads. Much of the massive investment in the coal mines still exists, and therefore the mines can be run in the future at a much lower cost than they have been.
The British coal industry does have a positive future if we get on with the change now. The industry will be much smaller, but I believe that it will be viable and profitable. It must remain an important sector within Britain's energy policy. Change is with us, and we have to manage that change. Together with Ministers, I will do all that I can to promote and help that change.
However, I believe that the Government have not taken the necessary action that would have ensured that there was a market. I am concerned about how much of our coal industry will still exist when privatisation becomes law next July. There is great concern throughout the country that British Coal will have closed down most of the industry before we get to that stage.
Urgent action is needed to ensure that private companies that are putting in bids to license mines are not brushed aside. Those bids must be looked at carefully, and I suggest to my right hon. Friend that we have allowed British Coal to be judge and jury in the present set up. If it does not want competition, it will not license mines. That would be a disastrous state of affairs and something should be done about it.
My concerns of last year, and of earlier this year, have not changed. I believe that the concerns which I expressed earlier this year by voting against the Government were 882 right. I do not like to take that action, but I must tell my right hon. Friend that I shall do the same again this evening.
§ Mr. Richard Caborn (Sheffield, Central)
On 13 October 1992, it was announced that 31 collieries were to close. The House debated that announcement, and instructed a Select Committee to inquire into the decision. Many distortions have been placed on the Committee's recommendations from people both inside and outside the House. I would like to clear up one or two of those points.
It is less than honest of the Government to table to the Opposition motion an amendment which states that the conclusions of the Government's coal review accepted the principal recommendations of the report by the Select Committee on Trade and Industry, "British Energy Policy and the Market for Coal." The Government walked away from the debate in March this year when they produced their White Paper on a Thursday and had it debated in the House the following Tuesday. Many complained that that was too short a time to examine the 180-page document. Complaints were made also that hon. Members were not allowed to debate and indeed vote on the 39 recommendations contained in the Select Committee report.
I asked the Government through the Liaison Committee and through the Leader of the House whether the Government would table a procedure motion, whereby an amendment containing the 39 recommendations by the Select Committee would be placed before the House. That was denied by the Government. The Government claimed that the majority of the recommendations of that Select Committee were accepted.
There were nine key recommendations which addressed the central question posed by the President of the Board of Trade: "Is there a large market for coal?" That question was answered by the Committee. The answer came from an economic perspective and the Committee produced it. clearly and conclusively. Of the evidence submitted to the Committee, 95 per cent. was in public as were all the hearings. The Committee had a Government majority, and the recommendations were carried nem. con. by the Committee. That should be compared with the Government's inquiry, which was in secret, no oral evidence was submitted and which produced a totally opposite conclusion.
The Government have rejected the nine key recommendations to widen the market for coal. These include a reform of the nuclear levy, a curb on French imports—a subject of which a lot has been said tonight—a restriction on orimulsion use without full gas desulphurisation, a reduction in opencast coal output, and an increase in coal sales to the electricity market by retaining the regional electricity companies franchise. Yorkshire Electricity said that if stability had been kept in the market by the retention of the franchise, the company would have taken 15 million extra tonnes of coal. The Select Committee heard the same from a number of regional electricity companies, with the amount of extra coal varying from 10 to 15 million tonnes.
Further recommendations by the Committee include an extension of coal sales to the industrial and domestic markets, a removal of market discrimination against coal and a curb on the dash for gas.
I challenge the Secretary of State who said at the Dispatch Box this afternoon that a curb on gas would 883 encourage the breaking of contracts. The Committee was privy to information on the 15-year gas contracts that were on a "take or pay" basis. All the recommendations in our report are clearly within the law. The report was not asking the Secretary of State to break any contracts when it recommended a curtailment on followed-through load for combined cycle gas turbines so that coal could take up more base load. The Committee makes clear that there would be no breaking of contracts in terms of "take or pay". I challenge any suggestion that the Select Committee recommendations ask the Government to act illegally. The recommendations, if followed through, would find a larger market for coal.
The Committee said also that no further licences should be given, because the Government should honour all the licences that have been given for gas. If that were not done, in five years the result would be that 25 per cent. of the market for electricity would be produced from gas, an increase from virtually zero in 1992. In 1997 25 per cent. of the market would be displaced to be taken over by gas-powered generation. That is quite significant. The Government have extended that forecast to around 30 million tonnes of coal equivalent, or nearly 30 per cent. of the market. That would close down another five pits.
The Government were also asked to consider the increase in coal stock levels. Had those recommendations from the Select Committee been acted upon, 25 to 27 pits would be operating in addition to the 20 core pits. About 47 pits would be operational in this country. There was nothing to stop the Government doing that, had they followed through what the President of the Board of Trade said to the Select Committee. The right hon. Gentleman said that he wanted to extend the market for coal. From what has been said in the House tonight, it is evident that the right hon. Gentleman gave a similar commitment at a meeting with some of the rebel Back Benchers on 24 March. Clearly, that market for coal has not been widened and is in fact considerably worse now than it was on 13 October 1992. It will continue to be that way unless the Government take action. It is well within their power to do so
The Government throw up their hands and say that they cannot deal with market forces. The Minister for Energy said this afternoon that he was not prepared to determine the market and to apply pressure to create a proper portfolio within the energy market. If that is so, all the work that the Government did and that we did was in vain. The House was deceived because the Government were not prepared to put right that which was wrong.
The problem of the energy industry is that it operates in a rigged market. That market was rigged by the model of privatisation. Not only the Select Committee says that; not only I say that; not only some Conservative Back Benchers say that. Many experts in the industry say that the model of electricity privatisation was fundamentally flawed. It has rigged the market against coal. That means that gas will continue to take a greater share of that market. That will put this country in some jeopardy in the years to come as the price of gas continues to increase.
If the Government do not believe what we say, they should listen to the Energy Intensive Users group, which 884 includes ICI, the steel industry and British independent steel producers. The group's letter to The Times has already been referred to. Another section of the letter says:The UK's asset of large efficient coal-fired power stations fuelled by increasingly competitive UK coal is now being squandered, and energy-intensivemanufacturing industry is being strangulated by high electricity prices which have increased by up to 70 per cent. since electricity was privatised.A steel company in Sheffield, United Engineering Steels, is one of the most efficient and effective. It gave energy prices as a major reason for closing one of its plants in Rotherham. If the Government do not heed the advice of such people in industry, they will create a distinct disadvantage for our manufacturing base. It is bad for miners and mining communities to close pits, but unless we have access to the cheapest form of energy in this country we shall put our manufacturing base at a distinct disadvantage.
The same advice is being given from every quarter of industry in the United Kingdom. The letter from the Energy Intensive Users group continues that the Government have the powerto reform the electricity market so that the declining costs of coal in efficient base-load stations are reflected in internationally competitive prices to electricity-intensive manufacturing industry … In essence these were the recommendations of the trade and industry select committee".There is a broad consensus that the Government should accept their responsibility to ensure not only that we have a balanced energy policy but that we produce for the nation the cheapest form of electricity. We are denying the nation that because the model of electricity privatisation was rigged against our coal industry.
We have proved beyond any reasonable doubt that the cheapest way to produce electricity in the United Kingdom is coal-fired generation. An increase in coal's market share can be managed without any loss of jobs in either the nuclear industry or the gas industry. We need a balanced portfolio. The Government should go back and consider the recommendations that were agreed by the Select Committee, which had a Conservative majority. It was transparent to everyone that there were compelling reasons to vote for the report.
§ Mr. Patrick Cormack (Staffordshire, South)
I hope that my right hon. and hon. Friends on the Front Bench will look yet again at the Select Committee report; it bears close examination and inspection. I appeal to my right hon. Friend the Secretary of State. There is deep dismay, disillusion and anger in the coalfield community. In the village of Huntington in my constituency is the Littleton colliery. Up to now, as the hon. Member for Newcastle-under-Lyme (Mrs. Golding) knows only too well, it has featured on no list. It has beaten many records. It has a magnificently dedicated work force. It is the integral, not an integral, part of the community.
When there were rumours about the colliery recently I wrote to Mr. Neil Clarke, as did the hon. Member for Cannock and Burntwood (Dr. Wright). We received extremely disturbing replies that no guarantees could be given and that the future of the mine was open to doubt and all the rest of it. We have sought an interview with Mr. Clarke and I hope that the hon. Member for Cannock and Burntwood and I will see him together in the next few 885 days. It is not a party issue in any sense. It is a community issue. Many of the hon. Gentleman's constituents work at the colliery. It is in my constituency.
§ Mr. Cormack
No. I have only a few minutes. That colliery is typical of the problem that we are talking about. If it goes, a community will be devastated.
I must confess that I am unimpressed by the performance of the management of British Coal. I have mentioned that in interventions in the House on previous occasions. We want someone to promote, prosecute with vigour and be dedicated to the industry. We want someone who believes in that industry and has a fundamental feeling that we need an indigenous fossil fuel industry in the United Kingdom. We want someone who will leave no stone unturned in seeking to promote its interests. I do not know precisely how Mr. Clarke occupies his time. I make no personal attack on him. However, he certainly has not persuaded me.
One receives press release after press release from British Coal. The keynote is not optimism or determination but pessimism. Running through all the press releases are statements such as, "It is difficult to find markets", "It is difficult to do this or that." Of course it is difficult. But the man has a job. It is not exactly an unpaid job. He should be fighting day in and day out for the industry.
We need to be able to derive our energy from various sources. It is crucial that coal should continue to be the major source. As hon. Members have said so often in these debates, one is to a degree at the mercy and subject to the whim of the international markets and even of international events over which one has no control. In some cases we may rely on countries that are not all that stable. Imports of gas from Algeria have already been referred to.
We have high-quality coal in the United Kingdom, and a lot of it. If we run down the industry, not only do we destroy individual communities, with all the heartache and anguish that that brings and the economic knock-on effects on other industries, but we debilitate and weaken the country in the future. I have seen it happen before. My home town is Grimsby in Lincolnshire. I have seen how the deep sea fishing industry has been destroyed. When I stood as a candidate for Grimsby in 1966 there were many deep sea trawlers going out to sea. I went to sea on one of them for 17 days. I shall never forget it. It was marvellous. I came back with enormous respect for the fishermen.
The coal and fishing industries are similar in many ways; for example, miners and fishermen have to put up with great hardship. Having seen the fishing industry destroyed, I do not want to see our coal industry totally destroyed. I appeal to my right hon. Friend the Secretary of State to think again. He is a man with some sensitivity. The Government have not performed well on the issue in the past year. I say that with no joy.
I did not vote for the White Paper because I was not persuaded by it. I did not vote for the Government last October because I was deeply distressed. The Government have done nothing to win my vote on this issue. They certainly will not have it tonight. I do not say that with delight. I want to see the Government succeed.
More can and should be done. We do not want any more gas-fired power stations at the moment, and licences for them should not be issued. We want an indepedent inquiry 886 into Magnox— those aging nuclear power stations— but there has not been one. Something must be done about the French link. Something can be and should be done immediately about opencast. My hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) referred to the devastating environmental effect that opencast has in a community— I have seen it in my constituency— and although I pay tribute to the landscaping carried out afterwards, for two or three generations of school children areas are devastated. That need not and must not happen.
There are many things that it is within our power to do. If we have the will to do them— and proper and true leadership — we can retain a truly viable and thrusting indigenous fossil fuel industry, a British coal industry, well into the next century.
My hon. Friend is respected in the counsels of the Government and is listened to by the Prime Minister, quite rightly, with care and attention. I appeal to him to talk to the President of the Board of Trade and the Prime Minister and to say to them that over the past year we have not served the industry as well as we should have done.
There is no point in trotting out that £ 20 billion figure and saying that it represents a subsidy towards operational costs, because it does not. It does not represent a massaging of the market; for the most part it is a paying off of the redundancies at the mines that have closed and the cost of the strike. I am not saying that that should not have been done— I wholly support generous redundancy terms for miners— but that £ 20 billion has not been invested in the industry to make it better; it is £ 20 billion put into the industry to pay for the injuries caused to it. It is important that we get our facts right on that and see it in perspective.
Much rests on the shoulders of my right hon. Friend the Secretary of State tonight. He must show that, in spite of the blemishes and problems of the past year, we are determined to serve the industry better in the future. My right hon. Friend will not get my vote tonight, but I hope that, by his speech, he will earn it the next time round.
§ Mr. David Hanson (Delyn)
It is an outrage that we are discussing the motion tabled by my right hon. and hon. Friends, because it shows that the Government have failed completely to fulfil the promises made in the White Paper on the coal industry last year, when the Point of Ayr colliery in my constituency and other collieries were threatened with closure. In the past year the Government have given no support to the mining industry, and the motion will get my wholehearted support in the Lobbies.
The speeches of the hon. Members for Davyhulme (Mr. Churchill), for Staffordshire, South (Mr. Cormack) and for Batley and Spen (Mrs. Peacock) are a measure of the Government's failure to date. If the Government cannot count on the support of their own Back Benchers who take an interest in this matter, who can they count on?
I hope that the House will forgive me if I concentrate my remarks on the Point of Ayr colliery in my constituency, which is one of the pits on the closure list. I am pleased that the Secretary of State for Employment will wind up the debate, because he knows the colliery well from his former job as Secretary of State for Wales. Indeed, the tunnels of that colliery run under his constituency.
The past year has involved a catalogue of disaster for my constituents and the Point of Ayr colliery, and nothing that I have heard so far has given me confidence for the 887 future. The colliery was hit hard by the initial closure announcement, but my constituency fought back and presented a 16,000-signature petition to the House. There were letters of support and a protest march in the town of Prestatyn in my constituency. The colliery also received widespread community support from Delyn borough council and Clwyd county council. The case for the Point of Ayr colliery to remain open is based not on emotion but on solid fact.
We have lost 467 jobs in the last year, and are now down to 260. Shortly that will fall to 155, and potential closure has not been discounted. This has caused problems and has had a multiplying effect on employment in my constituency. Although the Point of Ayr colliery was originally included in their list, I hope that the Government will show some common sense and, even at this late stage, will stop the blatantly obvious waste of resources in my constituency.
There is still 10 to 15 years' supply of good, mineable coal available in the north Wales area and in the Point of Ayr colliery which should be invested in the nation's future. We have high-quality coal and a high-quality work force. We have available some of the cheapest coal in Europe, and there is a market at Fiddler's Ferry power station for that coal, if British Coal and the Government will allow it to be sold.
Another feature of the past year has been the uncertainty and continued low morale among my constituents. There has been a drift away from jobs in the coal industry to other jobs because of natural wastage and uncertainty about the future. Despite that, one year later, the Point of Ayr colliery is still producing coal.
The facts showing why the industry should not be sacrificed speak for themselves. The work force in my constituency is second to none and is still mining coal. It is selling coal based on less than £ 1 per gigajoule, among the cheapest in Europe. The miners in my constituency have bent over backwards to improve productivity. In 1987–88, they were producing 3.1 tonnes per man shift; in 1991–92, they were producing 4.5 tonnes per man shift; last year, 8.9 tonnes per man shift; in 1993, in the Point of Ayr colliery— which is threatened with closure and is on the hit list— they can produce 14.7 tonnes per man shift.
At this very moment, the miners are continuing to pioneer the continuous-mining system. The mine has had investment in new machinery, a new work force and new practices, which the miners have readily accepted, and they are now greatly improving productivity. They continue to pioneer roof bolting. Despite the concerns of my hon. Friend the Member for Sherwood (Mr. Tipping) about that system, they have developed and pioneered it. They are looking at small domestic markets in the local area to promote their coal.
Today the Point of Ayr colliery generates large profits, well in excess of the investment made in it. The work force have made the changes that they promised, and have bent over backwards to secure the investment needed to produce the goods.
The Government promised to safeguard the future of the coal industry, and in yesterday's edition of The Times it was shown that the Point of Ayr colliery is a valuable resource for the nation. It says:The government's assessment of prospective coal sales is relatively upbeat.888 It goes on to say:Their faith in the ability of British mines to achieve a further productivity revolution has been reinforced by experience at the Point of Ayr mine, in North Wales. British Coal's experiments there with continuous mining machines for driving roadways, and other innovations, have achieved striking results.That pit is now due to close— it is on the Government's list— despite the fact that productivity has massively increased and it still has great resources. That it is due to close is a waste and a scandal which will come back to haunt the Government in the future. [Interruption.] The Minister shakes his head. The pit is on the Government's list of pits due to close. If the Minister can tell me that the pit has three or four years' life left, let him do so. If he will not give me that assurance, I will continue to say that the pit is due to close.
§ Mr. Eggar
The hon. Gentleman does himself and his constituents no good by scaremongering. Point of Ayr, like all the other pits, goes into the modified colliery review procedure and is considered under the general review process, as he well knows. Point ofAyr was singled out for praise by Boyds for its innovative approaches to mining techniques, and I agree with the tribute that the hon. Gentleman paid to the miners there.
§ Mr. Hanson
I wish to be reassured by the Minister. I hope that this evening he can give assurances, not just to that colliery, but to the other 10 on the list. There are still pits which are due to close and about which no assurance has been given to me by Neil Clarke, the chairman of British Coal, who said only two weeks ago that pits such as Point of Ayr are due to close. Pits such as that have a viable productive future in the industry and I hope and pray that the arguments that I make today will allow the pit to have that viable productive future.
I do not want to scaremonger. I wish to place on record the contribution that that pit has to make. I think that I have more knowledge of my pit and my community's feelings than had the previous Secretary of State for Wales.
There is still time tonight to change. The Government can this evening bring forward policies to offer subsidies to British Coal to create extra sales. They can take action on coal imports and on opencast mining, and to make National Power and PowerGen hold larger stocks of coal. They can take action to secure the future of Fiddler's Ferry because British Coal will continue to supplant coal that is mined in Wales with coal that is mined in Yorkshire and is playing off pit against pit in a reducing market.
There is power and strength in the arguments put forward by my hon. Friends. I strongly believe that the Point of Ayr colliery can contribute to the future of the coal industry and to British energy needs, and will be a powerful force in the marketplace in the future.
I shall conclude by simply relating to the Ministers who are present a fax that I received from the Point of Ayr colliery National Union of Mineworkers only this afternoon. It says:We want to compete and we want to work for a living, mining some of the cheapest coal in the United Kingdom. Support us. We are hard working, we have done everything asked of us"—and yet they still face potential closure.
Will the Minister assure the House that my pit and others like it will have a future in an energy market for my 889 grandchildren in the future? I fear that the Government are continuing to slim down the coal industry ready for privatisation. The debate should not be about ownership; it should be about the survival of an industry. My pit has a future. I hope to hear assurances from the Minister about the pit; it has a future. It can contribute, it will contribute, and if people support the Labour party's motion this evening it will have an opportunity to do so.
§ Mr. Malcolm Moss (Cambridgeshire, North-East)
I begin by joining hon. Members on both sides of the House, and especially my hon. Friend the Member for Davyhulme (Mr. Churchill), in paying tribute to the miners in the coal industry for the remarkable gains in productivity that have taken place during the past few years.
Productivity has reached about 9.45 tonnes per man. This is the seventh time in six months that the record has been broken and it means that the output per man shift is now about 36 per cent. greater than it was a year ago. Those are remarkable achievements, but I cannot help asking why those productivity gains did not take place years ago, before the privatisation of the electricity supply industry and before the changes resulting from that legislation.
§ Mr. Moss
As I have only ten minutes in which to speak, I shall press on.
British Coal says that there is more to come, with investment in new technology and new mining techniques and systems, resulting in better efficiency and reduced cost. Does anyone seriously believe that those remarkable improvements would have happened without the introduction of competition that we brought about by privatisation of the electricity supply industry?
Interestingly enough, although productivity has increased, mines are becoming safer, with the all-accident rate showing a 19 per cent. reduction on last year. That emphasises that changes in working practices and greater flexibility by the miners can be achieved without necessarily jeopardising safety. I am pleased to note that the Minister emphasised that most important factor when he opened the debate.
That productivity has fed through to a much more competitive coal price, without which there would be an even smaller market for coal than that which we are discussing this evening. The power generators have been able to secure five-year contracts at the lowest real-term prices for coal for many years. It is worth pointing out, however, that the prices are still well above world prices, which remain depressed as a result of over-supply worldwide.
The new contracts will have a positive outcome. PowerGen has estimated that, when those price reductions are passed through in full to the regional electricity companies, electricity prices will decrease by 17 per cent. in real terms in the next five years. I am sure that that will be widely welcomed by all electricity consumers and will largely offset VAT increases on electricity which may or may not be in the pipeline.
While I am discussing price, may I say that it is important to remind the House that the Government accepted the most important recommendation in the Select Committee on Trade and Industry's report, which asked for a subsidy for coal in the electricity supply market. It set 890 conditions up to an extra 16 million tonnes of coal above the contracted totals of 40 million, limited to five years until the year 1998. That subsidy was designed to bridge the gap between the cost of production of British coal arid the world market price. Although it is true that very few additional sales in the electricity supply market for coal have resulted, even with that handsome subsidy, the Ellington colliery agreement with Alcan's own power station at Lynemouth is very welcome.
Much mention has been made in tonight's debate of the Select Committee on Trade and Industry's report and its recommendations to secure an additional market for coal burn in this country. I believe that the Government tackled those recommendations fairly, honestly and with strong counter-arguments in their White Paper. I propose, in my limited time this evening, to highlight three only of those points to show that there are no easy solutions that we can pull off the shelf, dust down and implement tomorrow.
First, I shall discuss the question of coal imports. It is important to differentiate between imports of steam coal and those of other types of coal. Those have been reduced to the minimum contractual levels that have been in place for some time, currently less than 1 million tonnes a year. With about 45 million tonnes of coal— about a year's supply— at the pit head and the power stations, it is obvious that there is little or no need for further imports either the short or long term.
Secondly, let me discuss the environmental recommendations in the report. Orimulsion has been mentioned several times this evening. The Select Committee on Trade and Industry report recommended that Her Majesty's inspectorate of pollution should insist on flue gas desulphurisation as a condition of using orimulsion, but it is not so environmentally dirty as claimed.
The power stations at Ince and Richborough emit less than half the amount of dust and less carbon dioxide per unit of electricity than they would if they were burning coal or heavy oil. In addition, the amount of sulphur dioxide that the stations are permitted to emit is no more than was allowed when they burnt oil. It seems to me that putting a limit on heavy fuel oil would either put up the costs of generation and increase electricity prices to the consumer or close down the stations altogether.
The other environmental issue that was mentioned by the Select Committee report was that of flue gas desulphurisation. However, although the report asks for an additional 2 GW to be insisted upon, it later states:Deciding now to install more FGD would not raise British Coal's sales in the five-year period up to 1998, and would not in itself cause the generators to use more British coal at all.In addition, the fitting of FGD will not in itself solve all the environmental problems of coal-fired power generation. In the future it is more than likely to be increasingly constrained by new emission limits not only for sulphur dioxide but also for carbon dioxide and nitrogen dioxide.
Although the power generators have been given stringent emission targets for sulphur dioxide, it is worth reminding the House that the targets can be achieved by other means, especially by turning to combined cycle gas burn, which produces no sulphur dioxide and about half the carbon dioxide emissions.
Finally, I wonder whether the people really understand what flue gas desulphurisation means and what effect it will have on the environment as a whole. We will need to quarry thousands and thousands of tonnes of limestone. The main sources of limestone are the Peak District 891 national park in the Derbyshire dales and the national parks-in various parts of the country. Does anyone think that we will really quarry huge amounts of limestone from those areas of natural beauty? There would be a massive increase in heavy goods vehicle traffic trundling backwards and forwards from the quarry to the power station and, at the end of all that, we would produce enormous quantities of gypsum for which there was no market. In a recession, particularly in the building industry, I do not think that we would find a market for that gypsum. Instead of just having mounds of coal at our coal tips, we would have mounds of white gypsum on our landscape as well.
The report held out the hope that clean coal technology could provide a substantial additional market for coal and that the technology was just around the corner. I should like to take up a point made by the hon. Member for Livingston (Mr. Cook) in answer to a question put to him by my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice). The hon. Member for Livingston said that we could meet our environmental emission targets now and in the future using clean coal burn technology. However, the only reference to that technology in the Select Committee report is on flue gas desulphurisation, to which I have already referred.
Clean coal burn technology is well into the future. It is likely that integrated gasification combined cycle gives us the best possible solution to the problem, but that is many years down the road. The only plant in Europe now is a demonstration plant and it is light years away from being proven economically.
It seems ironic that in future we will be producing coal to produce the methane which we will then send to our combined cycle gas turbines. It may be that gas stations in the future could have coal gasification bolted on.
What are the Government doing about clean-coal technology? They are currently funding a portfolio of about 56 projects with a contract value of more than £ 114 million. The Department of Trade and Industry's contribution to the total is about £ 24 million. In addition, there is a wide range of coal research projects in United Kingdom universities—
§ 8.2 pm
§ Mr. Jimmy Hood (Clydesdale)
I apologise for missing the first speech today, but that was caused by my commitments on a Select Committee. I was fortunate— if that is the right word— to hear the second half of the Minister's speech. I am pleased to see that the Minister is almost in his place. When someone meets the Minister, he is always pleasant and polite and gives the impression that he is listening to what is being said to him. However, I always judge people by what they do rather than by what they say. Having listened to the second half of the Minister's speech today, all I can say is that it was full of evilness. [Interruption.] I am choosing my words carefully. It was full of evilness for the coal industry and communities such as that in which I am proud to have been born and bred.
We have heard some wonderful speeches from Conservative Members, but we have lived through what has been happening in our mining communities. I must tell the Minister, as pleasantly as I can, that he received a 892 drubbing from his hon. Friend the Member for Davyhulme (Mr. Churchill) and he deserved every bit of it. I shall try hard not to add too much to that, but he must excuse me if I come back to it now and again.
I joined the mining industry in 1964 as an apprentice engineer with a great future in a great industry. Within four years, as a qualified engineer, I moved down to the Nottinghamshire coalfield. I worked there for 19 years before coming here. I can remember when mining families were brought from all over Britain to the midlands coalfield in the late 1960s and early 1970s. It was the most cosmopolitan coalfield of them all. It always seems a misnomer to me because there is no such thing as a Nottinghamshire miner. Nottinghamshire miners come from all over the country and include Geordies, Scots, Irish and Lancashire men. Had it not been for the "Plan for Coal" in 1974, some of the pits in Nottinghamshire would have been closed. That includes the pit at which I worked, 011erton, which is now one of the top pits in the industry.
The 1974 Labour Government had faith and confidence in the coal industry. I can remember making my maiden speech on 8 July 1987. I reminded the House of the famous quotation from Nye Bevan who said that Britain is built on coal and surrounded by fish. Now all the fish have been given away. The hon. Member for Staffordshire, South (Mr. Cormack) told us about the time he stood as a candidate in Grimsby. He said that he used to watch the boats going in and out. The only thing one can watch now is fishermen burning their boats because the industry has been destroyed. Now, the Government are continuing their obsession with destroying the coal industry, too.
In 1979 there was a change of Government. The new Government did not have the same confidence in the coal industry. [Interruption.] I am not surprised to hear a "Huh" from Conservative Members. Baroness Thatcher is not a lover of the coal industry and she set out to wreak revenge on the industry. The Government sought revenge not against Arthur Scargill, but against Joe Gormley, then the president of the National Union of Mineworkers. He was president of the union during the miners' strikes in 1972 and 1974. It is the 1974 miners' strike that the Government now see as the reason for their defeat in the 1974 election, and they have been seeking revenge against miners, their families and their communities ever since. That is the truth.
§ Mr. Hood
There has been some ethnic cleansing in our industry.
I have not come here just to defend my union or colleagues who presently work in the industry or the many thousands who have lost their jobs. I certainly have not come here to listen to comments about Arthur Scargill. Something must be said in this place in answer to what has been happening. We have heard some pontificating about the miners' strike and what happened as a result of it. Make no mistake, the strike was planned. It was planned not by Arthur Scargill, the NUM or the miners, but by the Tory Government. Its seeds are to be found in the Ridley plan of 1979.
In 1981 the Government were determined to get what they wanted out of the industry. They went for it in 1981 but had to pull back because they did not have the goods to do it. They did a body swerve, similar to the one they did last year. They decided to improve the facilities for exporting coal in 1981. They built up the coal stocks, relied 893 on nuclear power and pushed through their trade union legislation, supported by the Liberals. They got ready for 1984.
A Select Committee met a week before the start of the miners' strike in 1984. Ian MacGregor, the man who walked about with a bag over his head, was asked about the effect that the overtime ban was having on the coal industry at that time. As he walked out of the Select Committee, he said that things would change within a week, and they did. Within that week the closure of Cortonwood and the other four collieries was announced. It was the provocation necessary to start the strike.
I will not stand in the House without defending miners and their communities, especially when I hear the trash that comes from Conservative Members who talk about the 1984 miners' strike as the cause of everything that has happened. The 1984 miners' strike was planned and perpetrated by the Government. The hon. Member who was the Minister with responsibility for coal in 1984 knows what happened.
I have never before mentioned in the House that during the miners' strike my car was petrol bombed, my garage was burnt down, my wife was attacked in our house by masked men and my son was assaulted five times. I wrote to my Member of Parliament, who at the time was the hon. Member for Sherwood, Mr. Andy Stewart. I told him of those events and asked him how he could help. He told me to go back to work. That was the help I got from a Tory Member of Parliament.
When the closure of 31 pits was announced in the past year, the Government did not bother to listen. The people said no, the mining community said no and even some Conservative Members said no, but the Government turned away, said that they had to have another look and bought time. We heard the story of the hon. Member for Davyhulme, who was persuaded to accept promises at the meeting with the Minister and the President of the Board of Trade. Nothing has been said since.
The Government have closed 21 pits, 20,000 miners are out of work and 60,000 other jobs have been lost. Now they are planning to close another 15 pits, to sack another 20,000 miners and to forfeit another 60,000 jobs. When I refer to the Minister's speech as evil, I mean just that. None of us from the mining communities is surprised at what has happened. Nothing that the Government could do would surprise us. Conservative Members accuse those of us who stand up and talk to them with the contempt that they deserve of being sanctimonious, but we have lived through the problems and will again. We wil not lie down. We will fight the decisions and say "no" and "no". If the Government do not change their ways, the people will change the Government.
§ Mr. Edward Garnier (Harborough)
I come to the debate with none of the experience that the hon. Member for Clydesdale (Mr. Hood) has of the mining industry, save that in 1987 I unsuccessfully fought the seat of Hemsworth, as the hon. Member for Hemsworth (Mr. Enright) bears witness, although it was not he that I fought but his late and lamented predecessor, George Buckley. Holding that seat prior to Mr. Buckley was a fine Labour Member, Alec Woodall, who represented all that was best about a mining Member of Parliament. Sadly, he was not 894 permitted to remain as a Member of Parliament by the Labour establishment in that constituency because it thought that he was too moderate.
§ Mr. Garnier
No doubt the school teacher who has replaced him will be as good as he can. I gather that the hon. Gentleman is a Euro-consultant, but no doubt we will hear more about that.
I shall briefly refer to the Government's policy on energy, which, as my hon. Friend the Minister— or the Prince of Darkness as he must now be called— has described as that of ensuring secure, diverse and sustainable supplies of energy at competitive prices and m a form that people and business want. It is often forgotten in debates of this sort that we are seeking to satisfy customers as well as those who work in the industry. As a country with a diverse range of energy resources— oil, gas, coal and nuclear energy, plus a considerable potential for renewables— it is right that Britain should take advantage of those resources as best we can and to ensure that the policies that are to be implemented will achieve that.
There has been considerable progress since 1979, when the Conservative Government inherited a largely state-owned energy sector. Since then, the Government" s policy has been one of progressive liberalisation that has brought major benefits to the industry and its customers — a group of people so often forgotten by Opposition Members. I shall briefly outline those benefits. North sea oil and gas have been freed from state control by the abolition of the British National Oil Corporation and the privatisation of British Petroleum and British Gas. Production is expected to reach a second peak this decade, keeping the United Kingdom alone in the EC as broadly self-sufficient in energy.
Since British Gas was privatised in 1986, domestic gas prices have fallen by 20 per cent. in real terms and industrial prices by 36 per cent. in real terms. To extend competition, the gas monopoly to supply has been reduced from 25,000 therms to 2,500. We have a manifesto commitment to reduce progressively British Gas's monopoly of the retail gas market to give smaller users the same rights as big firms.
In the short term, since electricity privatisation in 1990, there has been substantial progress towards improved efficiency, greater competition and greater consumer choice. The standards of service for each regional company have already brought dramatic improvements in customer service and have recently been strengthened by the electricity regulator. All the regional supply companies have announced price freezes or cuts for this year. Under the legislation that privatised the electricity industry, the monopoly threshold, below which the regional electricity companies have an exclusive right to supply, is to be reduced from 1 MW to 100 kW in 1996 and abolished in 1998. That will ensure progressive development of competition in the supply business.
It is widely recognised, on the Conservative Benches at least, that energy policy must take account of the fact that markets are sometimes inhibited from working effectively. Where full competition is not yet possible, independent regulators have an important role to play in protecting the interests of the customer by administering price controls that encourage industries to become more efficient, by enforcing standards of services and by encouraging 895 competition. However, the Government have not absented themselves from responsibilities in the energy industry. The existing bodies include the United Kingdom Atomic Energy Authority, British Nuclear Fuels plc, Nuclear Electric, Scottish Nuclear, Northern Ireland Electricity and, one hopes, British Coal in the future if it is privatised.
The Government are still involved with the consents for power stations and overhead lines. They are involved also in issuing licences for oil and gas exploration and production in line with the nation's best interests, in maintaining safety standards across the energy sector and in protecting the environment through sustainable development, which includes a commitment to energy efficiency, work on renewables and involvement in the funding of some areas of energy research.
I ask the Opposition parties to bear in mind that while, over the past 14 years, the Government have been actively engaged in the energy industry, producing an effective energy policy to benefit the people of Britain, the Opposition parties have been somewhat at sea.
My hon. Friend the Minister mentioned the article by the Opposition Front-Bench spokesman for energy, the hon. Member for Clackmannan (Mr. O'Neill), in Lloyd's List on 22 October when the hon. Gentleman admitted that the Labour party will not have a comprehensive energy policy in place until the 1995 Labour party conference. I should have thought that the people whom Labour represent have a right to expect the Opposition to have in place an energy policy that can be examined and criticised, or praised, depending on one's point of view.
We are entitled to know how many pits the Labour party would keep open if it came into government. [HON. MEMBERS: "All of them."] We are told that every pit would be kept open. The party that says that is the party that closed more than 300 pits and sacked 220,000 miners in the 11 years before we came to power. Which commercial contracts would the Labour party interfere with to achieve the additional sales that it claims would exist? How many other jobs in the energy industry would Labour be prepared to sacrifice to satisfy the coal industry? Those questions continue to be unanswered.
§ Mr. Garnier
I have no doubt that the hon. Gentleman will have a chance to speak in due course. We have yet to have answers to those questions from the Opposition and it is about time that we had them.
§ Mr. Derek Enright (Hemsworth)
I discovered that a very good friend of mine taught the hon. Member for Harborough (Mr. Garnier) when he was at school. I must rebuke my friend for his failure when I next see him. One would normally expect from one of his pupils a speech that was sparkling, logical and incisive. Instead, we got the bland central office line, right down the line and all the way
Before the general election, the Rothschild bank, distinguished for taking on broken ex-Chancellors, made an assessment of the pits. Frickley pit in my constituency was in the top 10 profit-making pits, so there seemed to be no doubt about its future. One short year ago, the President of the Board of Trade by his announcement plunged 896 Frickley pit into a loss-making position, although it was not loss making in actuality. One short year ago, that pit was put on his list.
It has not been a short year for the families who work in Frickley; it has been a lifetime for them. One of the burdens of guilt that the Government must bear is what they have done to thousands of mining families as a result of the uncertainty in the pits— uncertainty which they have created and which continues at this moment.
§ Mr. Enright
I wish that the hon. Gentleman was living as a Hemsworth miner and was subjected to that treatment. It is not a pleasant position and has not been helped by the actions of the Government and of those who support them in any way.
This year, not 500 yards from the comprehensive school in Featherstone which I helped to set up, we celebrated the centenary of the Featherstone massacre when two totally innocent people were shot. It is clear that they were innocent because they were shot in the back when they were a considerable distance away from the disturbances. They were shot because miners were on strike. The miners were on strike because pits were being closed as a result of overproduction— the reason for the car strikes in the late 1940s and early 1950s. There is a bit of overproduction, so let us have a strike.
We all remember the Ford strikes. Red Robbo was the most useful instrument of management who ever existed. When there was overproduction, the management would say, "Let us make a strike and save a bit of money." The same thing happened 100 years ago and that is what the Government want to take us back to. The mines were private then. Lord St. Oswald operated them and I have no doubt that his successor will operate them once again. Standards and safety will be cut again. The only thing that brought the mining industry advances in technology and real advances in safety was nationalisation. I am not ashamed to say that loud and clear.
We talk of productivity— the sudden burst of productivity, as the Conservatives would have it. That is not true. I am sorry that the President of the Board of Trade is not still here. He made exactly that statement at an all-party energy meeting, which you may remember, Mr. Deputy Speaker, and he was rebuked for it at the time by Lord Haslam. Lord Haslam is no Maoist or Trotskyite; he is a solid, card-carrying Tory. However, he rebuked the President of the Board of Trade because we have had constant increases in productivity. The biggest increases in productivity have come since nationalisation. It is important to remember that it is a geometric progression. It is also important to remember the prize of safety that came with it.
We have a problem with management— here I agree with some Conservative Members. We have a crisis in management generally in this country, not only in the management of British Coal. The hon. Member for Harborough mentioned my consultancies. I have worked in Africa and on the continent, and I have worked with many private firms. I am bound to say that the quality of management in continental firms, in American firms and in Japanese firms, above all, is infinitely better than the quality of management in the United Kingdom. We must face that problem.
897 It is no good saying that we lose productivity because of the social chapter; it is no good saying nonsense like that. We lose productivity and competitiveness because we have poor management. One only has to listen sometimes to the Confederation of British Industry and to the Institute of Directors to realise that at the root of the British problem is short-termism. That is absolutely encapsulated in the policy of hiving off British Coal to private enterprise here, there and everywhere. I stress the word British; I do not mean Barkers coal or Aztec coal.
It is an interesting exercise to look at the firms that are bidding to take over British Coal. When Frickley is affected, I shall advise my constituents about which firms to back and which not to back. Despite what has been said today, some firms have a most appalling record on safety and an appalling record of exploitation, whereas other firms are better. There will be a hotch-potch of firms involved and it will be difficult to choose between them.
I have two specific questions for the Secretary of State for Employment and I should be grateful if he would take notice of them. My first question concerns redundancy. Redundancy is being used by management at the moment in a way that leaves people not knowing where they are — a very cruel way. I know that the Secretary of State does not have direct control over the matter, but I also know that he has the ear of British Coal. I hope that he can impress the following on British Coal. A man may be offered redundancy terms one day and may then consult his family about those terms. He may go back a month later and say that he accepts the terms. To say, "That is not on offer now; it was only on offer if you took it straight away", is insensitive, to put it at the mildest.
The second question concerns the review procedure. When Grimethorpe in my area came under the review procedure, it was a review in title only. What happened was that the machinery began to be brought up straight away and faces were closed. That is not a proper review procedure. I should be grateful if the Secretary of State in his winding-up speech would give a guarantee that it will be a genuine review procedure, and that faces will not be closed and machinery will not be taken out. The men will then know that an honest review is taking place.
My next point concerns competition. One factor that has not been mentioned is gas. Let us recall how gas came to be sold to the electricity supply industry. British Gas did not want to sell the gas. It might have been willing to sell, but only at a commercial price. Hon. Members will recall that the electricity industry said that it did not want to pay the commercial price, but something lower. Ofgas made British Gas, against its commercial judgment, sell gas at a lower price. If that is not a rigged market, I do not know what is. The question needs to be addressed seriously.
There should be a combined energy policy towards which we should be working. In principle, the Government are not against interference in the market; one only needs to think of how they intervened in the nuclear market. If that is not interference or a deliberate rigging of the market, I do not know what is. The Government may be justified in interfering— I am not arguing about the rights or wrongs of the case— but the fact is that they did it.
The Government must look to their laurels. They must start to treat the miners fairly, protect their interests and declare that they will do so now.
§ Mr. James Clappison (Hertsmere)
I welcome the opportunity to participate in the debate. It is a pleasure to follow the hon. Member for Hemsworth (Mr. Enright). I cannot claim the distinction of having been taught by him or one of his friends—
§ Mr. Clappison
I have no doubt that my classical education would have been a great deal better if I had been.
It has become clear among my colleagues— those who feel unable to support the Government and those who, like me, will support them— that there is sympathy for and recognition of the plight of the miners and the mining communities. I recognise the strength of feeling welling up within the hon. Member for Hemsworth which leads him to his passionate defence of the mining community of Hemsworth, which he represents so vigorously. There is no absence of fellow feeling in my party for the mining industry.
My contribution to the debate is to highlight one aspect of the mining communities which has not been dealt with sufficiently, if at all, tonight except in the excellent contribution of my hon. Friend the Member for Chelmsford (Mr. Burns), but I first wish to draw attention to the motion and the basis on which it was tabled.
Having listened to the hon. Member for Livingston (Mr. Cook), I believe that he put the case far too high, especially when he charged the Government with fraud. I cast my mind back to last October when the Government had to face a difficult situation: coal stocks were piling up and there were problems with contracts with the electricity generators. The Government have not been impervious to all that was said then or to what has happened since. The hon. Member for Livingston said that everything that has happened since last October was predetermined, that the Government have not listened and, in his words, that it has all been a fraud. There is clear evidence that that is not so and that the Government have listened carefully.
I also listened with great interest to the contribution of the hon. Member for Sheffield, Central (Mr. Caborn). He spoke about the recommendations made by the Select Committee on Trade and Industry. Like all those who took an interest in the matter at the time, I remember that the cry in the House was for the Select Committee to be given a role. It was given a role and it made some recommendations. The hon. Member for Sheffield, Central mentioned some of them, but he did not mention that which provides clear evidence of the Government's good faith. I refer to the Government's commitment to provide a subsidy. It was one of the Committee's central recommendations, no matter how one views the report.
Recommendation 228 states:We recommend that the Government provide a subsidy to the generators…to burn up to 15 million tonnes of deep-mined BC"—British coal—per annum above the quantities of 40 million tonnes falling to 30 million tonnesas from April next year. On any reading, that is a substantial commitment. It came with a substantial price tag, and I remind the House that that price tag was put on it by the Select Committee. It was a price tag of £ 500 million which, as the Select Committee envisaged, would fall on the taxpayer or come from diversion of moneys from the fossil fuel levy. That is clear evidence of the 899 Government's commitment and their preparedness to adopt the Committee's recommendation. I should not dismiss the subsidy out of hand, as the hon. Member for Southwark and Bermondsey (Mr. Hughes) did on behalf of the Liberal Democrats. Clearly, it will have a significant role to play in some areas—
§ Mr. Michael Clapham (Barnsley, West and Penistone)
I am grateful to the hon. Gentleman for giving way, especially as time is limited. I shall be brief. If he were to read a little more of the report, he would learn that the recommended subsidy was recommended in the context of an extension of the franchise market to 1998. That is an extremely important point which the Government failed to take on board.
§ Mr. Clappison
I take great consolation from the fact that the subsidy is proving valuable for the miners of Ellington. I welcome today's announcement that the subsidy will be extended to exports. I hope that the Liberal Democrats pass on the good news to the people of Ellington. They dismissed it out of hand today, but it will clearly be very important to the people there.
As I said, I should not adopt the approach of the hon. Member for Livingston because he puts the case far too high. Nowhere does he put the case higher than in the motion, which mentions the effect of the closure of the pits on the coalfield communities. It states that the Houseregrets that closure of these pits will destroy the economies of the coalfield communities".It will, of course, have significant implications for the miners who face redundancy and for their families, but to talk of destruction is to paint a false picture of the coalfield communities.
§ Mr. Clappison
I sympathise with the miners who have lost their jobs, but the hon. Member for Easington (Mr. Cummings) must understand that even if the Opposition's alternative— such as it is— were implemented fully, it would not increase the numbers employed in the mining industry. From personal knowledge of his mining constituency, the hon. Gentleman will know that employment in mining has declined this century.
There were more than 1 million miners before the first world war; 700,000 men were employed in the mines at the end of the second world war when the industry was nationalised. At that time, it was correct to talk of coalfield communities being dependent on only one industry. In those days, the mining industry was the lifeblood of those 700,000 people, but things have changed since then.
The hon. Gentleman misses the point. Hundreds of thousands of jobs have been lost in those communities, under Conservative and Labour Governments. The picture is all too familiar in other European Community countries and in the United States: such communities have suffered from being over-dependent on one industry. A very important point that has arisen—
§ Mr. Clappison
The hon. Gentleman is wrong. It is important that he and all Labour Members with mining constituencies remember that the Government have given 900 substantial assistance worth £ 200 million, which has not come the way of other communities facing redundancies in this or any other recession.
§ Mr. Clappison
It is not cloud cuckoo land, and the people who will benefit will not regard it as cloud cuckoo land. Those communities are in many instances part of assisted areas. They also benefit from British Coal Enterprise and the training and enterprise councils. Nine thousand of the 18,000 miners who were made redundant last year have found jobs or been offered training. That is not nothing; it is not to be dismissed out of hand. The coalfield communities desperately need diversification and inward investment more than anything else. That is the future for the coalfield communities and to suggest otherwise is to look back and ignore the positive future.
I agree with the hon. Members who have spoken of the very great qualities of the people in the mining communities. They are no strangers to hard work and they have many enterprising skills. Their entrepreneurial spirit has clearly been shown in the success of the many thousands of projects generated by British Coal Enterprise. They now need support. The message from my colleagues who have sympathy for the mining industry is that we are looking for every ounce of support that the Government can give to such areas to bring about much-needed diversification and to give people the hope that they can only gain from the enterprise culture and inward investment. The days when the mining industry dominated those areas and was their sole source of income are long gone.
Those of us who know the areas— many Conservative Members do, and have great sympathy with them— wish the Government every success, and urge them forward in every possible way. We hope that all the agencies and all the leadership provided by British Coal Enterprise can be drawn together, so that the people make a great success of all the opportunities that are coming forward. Conservative Members believe in the spirit and abilities of those miners and those communities —
§ Mr. Ronnie Campbell (Blyth Valley)
The hon. Member for Hertsmere (Mr. Clappison) must live in cloud cuckoo land.
I begin by welcoming the subsidy for Ellington colliery, which is just outside my constituency; many of its workers live in the constituency. Perhaps, as we have been told this afternoon, the subsidy will last for only 15 or 18 months, so I wonder what will happen in 18 months' time. I am a bit worried about what will happen to the colliery, because there are so many possibilities for opencast mining— I shall talk about that later. I am worried about what will happen to Ellington colliery after the new agreement signed with Alcan has been going for 18 months. It will be interesting to see whether another deal is struck, and I shall explain later why I think that that may not happen. The deal with Ellington could be just a one-off shot. Alcan is getting a cheap form of energy; it is being subsidised with a cheap tonne of coal to keep the power station burning.
901 We have heard some passionate speeches about the independent review procedure from hon. Members with pits in their constituencies that are about to close. As I said to the Minister earlier, in my experience the review procedure is not worth the paper it is written on. The Secretary of State for the causes of unemployment was the Minister responsible for the coal industry when my local colliery, Bates's colliery, went through the procedure. Stourton colliery was the first to go through the procedure, and Bates's was the second. We went to London and put a case second to none. There was a Conservative appointee in the chair, yet at the end of the week, when we had put the case for Bates's colliery, he delivered his judgment that on the evidence that he had heard the colliery should stay open for another two years to prove whether the seam that we recommended was workable.
We were jubilant, we put the flags out and opened the bottles of champagne. But that did not last two weeks. Within two weeks Ian MacGregor and his cohorts on the board at the time announced that Bates's colliery was to close. So I warn my hon. Friends not to place too much hope on the review procedure; it is simply a dark horse. If there is anything here to do with the prince of darkness it is the colliery review procedure. It has no strength and no legal force. It is up to the coal board whether it wants the colliery to stay open or to close.
I remember going to see Lord Walker, who was a Minister at the time, and he said, "Put your colliery through the review procedure. It is a new procedure that we have just worked out with NACODS." We did. Lord Walker said that the colliery would stay open if that was the decision made by the review procedure. He gave us a guarantee, but we lost it.
§ Mr. Campbell
Indeed, he took the Maxwell money.
The Government have hit the coal industry on the head with a sledgehammer. Subsidies to the nuclear industry amount to £ 1.3 billion. As we argued earlier, if the coal industry had even half that money we could practically give our coal away— what is left of it. I read in the paper the other day that the Magnox reactors are to be demolished, but God forbid— new ones are to be built. If we got rid of Magnox tomorrow we could put 9 million tonnes of coal into the coal-fired power stations. But the Government are going the whole hog on nuclear power, although they have not got the thermal oxide reprocessing plant off the ground yet. They cannot even reprocess the damn stuff.
Opencast mining is a big worry for us in the north east. We have only two collieries; one has a bit of a guarantee, but it looks as though the Government's sledgehammer will send Wearmouth sliding down the slippery pole. Unfortunately, opencast mining is a great threat. Last week I asked the Minister what opencast reserves there were in Northumberland and Durham, and I received the following written answer:British Coal has informed me that, as at March 1993, total reserves of coal estimated to remain unworked in approved opencast sites in Northumberland, Durham and Tyne and Wear were 16,696 million tonnes."— [Official Report, 25 October 1993; Vol. 230, c.432.]In Northumberland there are already 12 applications waiting to be processed, so in addition to those approved amounts there are more millions of tonnes to come.
902 I fear that the whole of the north-east is likely to be dug up from one end to the other for opencast mining. That is my fear for Ellington colliery. I hear whispers, but I have not been told officially— the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and my hon. Friend the Member for Wansbeck (Mr. Thompson) might have been told officially, but I have not— that Northumberland county council is talking secretly to an American firm about a plan to build a coal-fired power station in Northumberland. What does that say about the marketing side, if an American firm wants to build a brand-new coal-fired power station in Northumberland? Why are British Coal and National Power not doing that? Why is it left to the Americans? I have just given the House the reason; it is the abundance of opencast coal. That will be the fate of the collieries in the north-east, and that is one of the reasons why the Government want to close them. Clearly opencast coal is in competition with deep-mined coal; it is cheaper to mine and there are subsidies. At least 80 per cent. of opencast coal goes to the power stations.
Imports of coal have increased dramatically over the past two years. The cost to our balance of payments is £ 700 million. As has been said before, that money would enable us to avoid putting VAT on fuel for old people. National Power gave evidence to the Trade and Industry Select Committee last year that the average price of imported steam coal was £ 35.50 per tonne. A contract had been offered at £ 36 a tonne, yet the DTI said that British coal was not competitive. Boyds' claim was even worse. The report said that British deep-mined coal cost three times as much as United States, Australian and South African coal. Of course, the Government were head over heels with Boyds when they commissioned it to do a job on British mines— and that is what it did. However, what Boyds did not say at the time was that the United States coal industry receives $700 million in subsidies for research and development. Australian mining receives a subsidy of a 150 per cent. tax rebate on research and development. There is also a subsidy to transport coal from the mine to the port. Again, I cannot find out what the figure is, but there is a tax rebate and, again, Boyds did not say. South African mining receives 10 per cent. subsidies. If we had such a subsidy, as Arthur Scargill has rightly said many times, we could give our coal away.
§ Mr. Quentin Davies (Stamford and Spalding)
It is a great pleasure to follow the hon. Member for Blyth Valley (Mr. Campbell). He always speaks with particular eloquence on any matter concerning his constituency or the region of his constituency, and of course he speaks with passion and knowledge about the coal industry. The only thing that is surprising about the debate— it must cause the hon. Gentleman great distress— is how little Labour Members who spoke with such feeling about the coal industry have been supported by the main body of the Labour party. If there had been a debate on this subject — [Interruption.] I thought that I was touching a sensitive nerve. I see that I am proved right on that if on nothing else.
If there had been a debate, as there frequently was, on this subject at any time over the first three quarters of our century, the Opposition Benches would have been packed with Labour Members eager to defend what they saw as the interests of their industry. Everything changes, including the coal industry.
903 The important thing, however, is how we adapt and respond to change. I was one of the many Conservative Members who felt great concern and disapproval last year at the manner in which British Coal was addressing change, and particularly the manner in which it proposed to dismiss a large number of employees, many of them hard-working, long-serving and loyal, at 48 or 72 hours' notice. That is no way for a humane and responsible employer to behave. I was extremely glad that my right hon. and hon. Friends, after little hesitation, ageed with that view and gave instructions to British Coal accordingly. In the same spirit, I welcome the Government's move to smooth the transition of British Coal to the new market conditions in which it finds itself, and I greatly approve the Government's decision to use taxpayers' money to subsidise British Coal in the short term.
We have already heard an eloquent account of the extremely useful subsidy that Ellington pit has received to enable it to carry forward a major contract with Alcan. That is very satisfactory. But there is all the difference in the world between deciding to smooth the path of transition for a public sector industry for which the Government bear ultimate responsibility and a decision to persuade all those who work in the industry that they can continue as though nothing had changed in the world and induce in them an entirely false sense of security. That would be a thoroughly irresponsible and inhumane course to adopt. The Government are absolutely right not to accede to the blandishments not only of the Labour party but of certain of my colleagues who urge them to go in that direction. My hon. Friend the Member for Staffordshire, South (Mr. Cormack) appeared to suggest that the Government should permanently distort the economy to subsidise the coal industry and ensure that the industry continues to have a guaranteed market for a given amount of coal, irrespective of the price of that coal or the demand for it. That cannot be sensible.
As in other matters, the Government have a clear responsibility to ensure that the country continues to enjoy the lowest possible energy prices and the greatest possible security of supply. If we allow ourselves, for whatever sentimental or political reasons, to be deflected from that objective, we shall not do a good day's work for the country. We shall certainly not do a good day's work for employment. If we have anything less than the most favourable energy prices, we shall add, perhaps fatally, to the costs of energy-using sectors throughout the economy and we shall endanger employment in many industries throughout the land. That would be an extremely foolish and destructive thing to do.
There is a very popular and, at first sight, perhaps, seductive view that, in order to secure the cheapest supply of energy possible, the Government should be devising a national energy policy and deciding exactly what proportion of investment should go into the different sectors of the energy industry and rigging the market effectively to provide for that. Superficially, that might be an attractive view to some hon. Members, but it needs to be considered very carefully indeed because it rests on the extraordinary assumption that the Government have superior knowledge about the future pattern of demand for or supply of energy in the world.
904 If we seriously believed that Governments have access to such superior economic knowledge, logically we should decide to put the whole economy into the hands of a Gosplan. At least in other sectors of the economy and economic and industrial policy— even among the Opposition— the light has dawned and it has been appreciated that that is not a very intelligent way to proceed.
The Government should not second-guess the aggregate wisdom of the energy industry— the producers and the customers— and say, "If a regional electricity company wishes to sign a contract for the long-term supply of electricity to be produced by combined cycle gas turbine stations, it shall not be allowed to do so, or if people wish to build nuclear plants, they shall not be allowed to do so because we have superior wisdom." The Government's responsibility is to liberate the energy market to allow the full range of judgments of those who are involved in the market and are prepared to invest in it to determine the pattern of new resource allocation and to ensure that we have as competitive and, therefore, as efficient an energy market as possible.
That goes for coal, but of course it also goes for gas. It is about time that we continued the very virtuous process of deregulation of the gas industry so as to deregulate also the retail market below 2,500 therms consumption per year right down to nothing per year. If anybody wants to get into the business of supplying a retail customer with gas, there is absolutely no reason why he should not be allowed to do so.
Similarly, in the nuclear industry it is about time that we got rid of the nuclear levy which distorts energy markets of all kinds. Equally, as a necessary counterpart to that, it would be necessary for the Government to resume the liabilities that they imposed on Nuclear Electric. We should get rid of the nuclear levy. We should equally get rid of the moratorium on the construction of nuclear power stations. If a privatised Nuclear Electric— I hope that it will be privatised soon— decides that it wishes to build a Sizewell C or further nuclear power stations, it should be allowed to do so. If private sector investors are prepared to put in the money to do that, who are the Government to say that they are making the wrong economic decision and that it should not be done?
Last but not least, the effect of a deregulated, more competitive energy market would be that British Coal, whether privatised or not, would have to begin to respond to genuine competitive pressure for the first time. I do not think that there is anyone, even on the Labour Benches, who genuinely believes that British Coal has done all that it might do to market coal aggressively and to look for new applications for coal and new markets for it. Of course, British Coal has not done that. The sad fact is that it has suffered from a terrible handicap— the debilitation of 50 years of nationalisation and protected markets.
§ Mr. Paddy Tipping (Sherwood)
Miners in Nottinghamshire and throughout the country want straight answers to straight questions: will they have a job at Christmas, and can they plan for their summer holidays? They want to know about their future. As miners in Calverton said to me only this week, they cannot take being treated like dogs. They can face the future, but they cannot face continued uncertainty.
905 Miners at Bilsthorpe—I am proud to be wearing a Bilsthorpe tie today—want to know whether they will be given an opportunity to keep their pit open. I remind the House that, before the accident in the summer, Bilsthorpe was producing coal at a profitable rate. It was the most productive British coal pit in the country. The accident has put it back. The cost per gigajoule increased but it is now coming down. The men at Bilsthorpe fought for the life of that pit. Some of them have given their lives for it to give them some time to show what they can do at the colliery.
Ministers should look at Calverton colliery, which has had £10 million spent on it to open a new face. It is important to recognise that at Calverton, traditionally, 50 per cent. of the coal comes from a domestic market. It is important to acknowledge that 80 per cent. of that coal can be used to keep our fires burning, rather than importing coal from countries such as Poland. It is astonishing that, in the current year, the amount of imported coal will double, yet there is a question mark over Calverton colliery on which £10 million has just been spent. It is important to give the colliery an opportunity to keep our balance of payments down and to supply our needs.
My hon. Friends have followed this debate extremely carefully. They know that the Government not only cannot run the energy market but cannot tell the passing of the seasons. Some of us would like to know what has happened to the nuclear review, which was promised for the summer. It is now the autumn and we are getting into winter. When will an announcement be made on the nuclear review? Will the announcement simply be about economic matters, or will it also deal with environmental issues?
Many people have made the case for nuclear generation. However, the Achilles heel of the nuclear industry is that it has not been able to sort out decommissioning and disposal costs. It is astonishing that there is talk of a new Sizewell C at a time when there is so much power in this country. It is more astonishing that, when the Minister of Energy was confronted with the planning application, he washed his hands of the matter.
The issue before us is that of the power market. We have talked a lot about coal, but we should acknowledge that there are 26 coal-fired power stations in England and Wales. By the end of the current coal contract, the number of coal-fired power stations will have shrunk significantly. Less than 10 coal-fired power stations will be left, and places such as Castle Donington, Staythorpe and High Marnham will have closed. About 16 power stations have closed, with 10,000 job losses. The power stations that remain in places such as Didcot, Ferrybridge and Ratcliffe will be used to twin shift. It is a bit like flying a jumbo jet from Manchester airport to Yeadon airport. Power stations should be on base level and the peaks should be covered by gas. There is a place for strong coal-fired power stations in this country.
We are also faced with the prospect of privatisation. Miners will want to give the Government some pointers and to ask why, if they are restructuring, they keep changing the terms of redundancy payments. Why cannot the Government give a commitment tonight that the same terms will apply to redundancy payments throughout the restructuring process?
Miners also want a commitment on pensions. They have read the Government's consultation document on pensions. It is questionable. They want a commitment that any surpluses taken away will be compensated for by improvements in pension rights. They also want to know 906 what will happen if they work in the newly privatised industry and their company is taken over. Will their pension continue?
Most important, under privatisation, the miners want the coal industry to survive. We are in a highly competitive market and clearly it makes sense that, if privatisation is to come—we will fight it—we should go for a unitary model in England and Wales because we need a core of pits to ensure that coal can compete in the energy market.
It is clear to me that the Government are in an unseemly haste to privatise coal. They want to put the coffin lid on the coal industry and bury it. Miners are progressive and hard working. They and the management are a fine body of men. They will not be put down and buried easily. If the Government try a quick and botched privatisation, the ghost will rise to haunt them for ever.
§ 9.6 pm
§ Mr. George Stevenson (Stoke-on-Trent, South)
In view of the time, I shall be brief. The crux of the debate is what has happened since the White Paper and that is what all hon. Members should consider and be concerned about. I have heard a lot of sympathy in the majority of speeches from Conservative Members—most contributions have been conspicuous for the amount of sympathy—but I have failed to detect any coherent response from the Government.
I take my hat off to the Government. For a party of competition and free market philosophy, the Conservative party has demonstrated a gritty, dogmatic determination to support a rigged system. The pool pricing system is the best example of that. If ever a system were contrived by people to penalise an industry and meticulously to create —in a connived way—a licence to print money, it is the pool system, which determines the price of electricity. We all know why that is. Like the nuclear industry, the coal industry is being prepared for privatisation. Let us compare the two. The Government are pumping £1.3 billion a year into the nuclear industry until it is ready to be privatised, but they are closing down 85 per cent. of the coal industry —perhaps the private sector might then be interested. That comes across very clearly from the way in which the Government have pursued their policies.
The reality is that the White Paper conceded very little and gave the coal industry no fair chance. Why should we be suprised that it was never intended to do so? It was a bolt hole for Ministers. We must all face that reality this evening, irrespective of which way we shall vote, and I pay tribute to those Conservative Members who have had the courage to say how they will vote.
The Government's approach to the nuclear industry is perhaps the shining example of their prejudice against the coal industry. We have heard references this evening to the much-heralded and promised review of the nuclear industry. I think that we have all seen recent reports that the Government are now thinking of announcing the review at the end of the year. The Minister is reported to have said that, when the review is announced, Nuclear Electrict must not be encouraged to think that that is a signal for it to apply for privatisation. It will not do so because it has been given the message, "Don't worry, wait until you've been fattened up a little more by the subsidies that we're providing. Then you can apply for privatisation." A clear message has emerged from the debate—the Government's 907 complete failure to react positively to the concerns that have rightly been expressed by hon. Members this evening and for some time.
I conclude with an appeal. The Government may claim that they have a right to act as they are doing because they are the elected Government, but they do not have the right to jeopardise the future energy security of the nation. Yet that is what they are doing. Let me give an example. Trentham colliery in my constituency has closed. It is one of the few that has a private bid to continue mining. Do not leave the decision on that bid to British Coal. It will fight tooth and nail to keep the colliery closed because it does not want the coal on the market. It wants its position protected. That is my concluding plea to the Government this evening. I hope that in reply we will hear a positive response to what is a mini-privatisation, which should be consistent with Government policy, although not with mine. There is good coal there and a bid in, and it should be supported.
§ Mrs. Ann Clwyd (Cynon Valley)
When I came to the House nine years ago in the middle of a miners' strike, I never thought that, nine years later, I would have to defend the last remaining pit in south Wales. It is the Tower colliery in my constituency. It is productive and made £12 million profit last year and will make more profit next year. Yet this week, 250 men are being made redundant. That is incredible, because the mine has a market for its coal. It sells to the Aberthaw power station and exports to Ireland, Spain, France and elsewhere.
This week, I wrote to the Minister and today I got a reply. I asked him why these men were facing the sack and why coal imports for industrial and domestic use had risen when the coal output from pits such as Tower was being cut. He said that nearly two thirds of imported coal is of grades and types for which the United Kingdom has insufficient sources of supply, including anthracite. He continued:BC's policy is to maximize sales of British coal and only where this is not possible to engage in imports … shortages, therefore, have to be supplied by imported coal.Tower coal is grade 2 anthracite quality. It is precisely what is needed for our domestic market. Tower miners will tell how it is the best low-sulphur coal in the world today and that the domestic market is crying out for the anthracite coal that Tower produces. Instead of supplying this market, Tower coal is being passed over for imported coal.
If the Government's so-called subsidy for British Coal to sell more coal means anything, Tower would have assured markets for its coal. I am glad to see the Secretary of State for Employment in the Chamber. He used to be the Secretary of State for Wales. He will remember well how he congratulated the men from my pit on their productivity and profitability when I took them to see him in February. They thought that their future was assured.
My constituency has the highest male unemployment rate in Wales. One in three men is out of a job. If the pit shuts, 40 per cent. of the working men in my area will be without a job. The area has one of the lowest incomes per household in the United Kingdom—£f4,000 a year. That is poverty in Britain. If the Government shut the pit and further destroy the industry in my constituency, £10 million will be taken out of the area.
908 The market is rigged and has been rigged all along. The Government are destroying the industry from spite because of how the miners fought them in many coal strikes over the years. The industry should be retained for the future of this country and its energy policy.
§ Mr. Frank Dobson (Holborn and St. Pancras)
My hon. Friend the Member for Livingston (Mr. Cook) dealt admirably with the recent history of the Government's chopping and changing concerning the coal industry. My hon. Friends, such as my hon. Friend the Member for Cynon Valley (Mrs. Clwyd), have spelled out passionately the impact of the Government's policies on the communities which they try their best to represent. I do not represent such a community, so I must stick to what might be called the basic facts.
The basic fact that the House needs to remember is that Britain is a fuel-rich country in a Europe that is short of fuel. No other country in the European Community has such large fuel reserves of such variety. Those natural assets should have been used to the benefit of our people by adding weight to our bargaining position with the other EC members. Instead, those advantages have been frittered away and fuel-rich Britain has a fuel trade deficit which further pit closures can only make worse.
Britain's coal mines are the most efficient in the EC and they produce coal at half the cost of that which is mined in Germany or in any other mines in western Europe. No other British industry is twice as efficient as its German counterpart and yet this is the industry which this short-sighted and stupid Government have chosen to close down.
The mines are not being closed because of inexorable market forces but because that is what the Government always intended. They will close because of the Tory policies adopted not just in the past few months but in the past few years. Those mines will close because, in the past 10 years, the Tory policy has been based on years of neglect, not benign neglect but malignant neglect, and wasted opportunity.
A year ago, the Government let the cat out of the bag and announced their policy that meant that 31 pits were to close. That announcement confirmed all that the Labour party had said in the past five years as the Tories pushed through the privatisation of the electricity industry.
There was a public outcry at the Government's announcement and the people of this country saw for the first time what the Tories were doing to the mines and they knew that it was wrong. As a result of that public outcry, the Government backed down, or appeared to do so. They carried out a review of their policies and considered a report from the Select Committee on Trade and Industry. They also published a White Paper that has turned out to be nothing more than a con.
We argued at the time that the Government's proposals in that White Paper would not save any mine and our arguments have turned out to be true. Almost all the original 31 pits have closed or are doomed to close. Even some pits that were not originally threatened are now at risk.
The Government's efforts to try to con the people were successful when one considers the newspaper headlines of the time. The Financial Times ran the headline:Government to save 12 pits".The headline in The Times stated: 909Heseltine pit rescue deal to cost £500 million".The Daily Telegraph reported:Twelve pits reprieved by Heseltine. £700 million lifeline for the coal industry removes threat of revolt by Tory MPsThe Daily Express—at that time a supporter of the Prime Minister—announced:Major's £700 million pits rescueThere was some discrepancy, however, because it is obvious that the journalists were not clear, despite, presumably, carefully reading the White Paper and listening even more carefully to Tory Ministers, whether the possible subsidy was £500 million or £700 million. We have learned today, however, that just £2 million of that subsidy has been called on.
If people think that a subsidy of up to £700 million seems a generous offer in an effort to save a small part of the British coal industry, it is worth reminding the British taxpayer that the Government have used £350 million of taxpayers' money to subsidise property speculation at Canary Wharf. All that money was called upon.
The Government's line now is that they never promised to save any pits, but, as the headlines show, that was not the impression that they gave and they did nothing to correct that impression. I checked with the newspapers published the day after those headlines and found that they contained no letters from the President of the Board of Trade pointing out that they had got it wrong. The Government set out to deceive the news media and the general public, and they succeeded.
That was not the first example of Tory deception over pit closures. For years, the Government pretended that they did not intend to run down the coal industry. Almost two years ago to the day, I published a report which Rothschild, the merchant bankers, had prepared for the Government. It was a secret report by Tory bankers, sent to Tory Ministers, predicting that thousands of miners would be thrown on the dole and that Britain could end up with as few as a dozen working collieries—the process that is going on now.
What was the response of the Government and British Coal to my publication of that report? The then Energy Secretary, now Lord Wakeham, blamed Labour for what he referred to as scare stories about running down the coal industry. He dismissed ascoming from cloud cuckoo landLabour complaints that British Coal was being run down to make way for cheaper imported coal. He used taxpayers' money to do that, as he did it on press statements issued in the name of the Department of Energy.
The boss of British Coal was not backward in denouncing us either. He was reported in the newspapers ashitting back at suggestions that the company planned wholesale pit closures ahead of privatisation".He added:We are not in the business of planning to discard pits".He may not plan to do it. Apparently, he just does it by accident.
Nobody believes what the Government or British Coal say now, because too often they have not told the truth about their intentions for the industry. When the Tories wanted to hang on to seats in Nottinghamshire at the last election, the then Energy Secretary promised the Nottingham miners, in a press release issued by Tory central office,a secure long-term future for your great industry".He went to Nottinghamshire to say that. Since then, several of the Nottingham pits have closed and none of them is safe.
910 Nobody in the coal industry can trust a word that the Government say, which is why no one in the industry now accepts their promises on safety or their reassurances about what will happen to the pension funds if the industry is privatised.
The Government now say that they have done their best to help the coal industry, but that there is no market for coal. So that is that—the pits must close. However, the Government have done nothing or next to nothing to help. They can do nothing unless they are prepared to change the energy market in Britain. It is not, has never been and is never likely to be a free market. It is a market that has been rigged by the Government to the advantage of virtually everybody in the world except the British coal industry arid the British people.
The nuclear industry, foreign coal producers, France, the foreign suppliers of orimulsion, and the multinational oil companies that sell the British people their own North sea gas all benefit from the rigged market. So do the foreign suppliers of natural gas and the foreign builders of the gas-fired power stations that are going up all over our country. The Government's energy policy seems directed to help every energy industry in the world except ours. They may have it reclassified as part of our overseas aid programme.
The most efficient coal-fired power stations can produce electricity at costs significantly lower than alternative fuel. Do any Conservative Members challenge that assertion? Apparently it is accepted—there are no objections. I am glad about that because that is what John Wakeham said when he produced an article for the people of Mansfield in Nottingham on 11 March 1992, just before the general election. I shall repeat what he said because it is the basis of our case and that of the coalfield communities:the most efficient coal-fired power stations can produce electricity at costs which are significantly lower than alternative fuels.Let us consider those alternative fuels. Let us take French electricity, and—my God!—we take a lot of French electricity, which is produced by nuclear power stations that are subsidised by France. When I say that they are subsidised, I really mean subsidised. The way that the French subsidise their nuclear power stations makes the common agricultural policy seem like the free interplay of market forces. On top of that, our stupid Government decided to give the French another subsidy almost as big as that which the French themselves provide to make their nuclear power even cheaper. Why should British miners have to compete with that?
As to British nuclear power, every electricity consumer has to pay a nuclear levy, and without the takings from that levy Nuclear Electric would be trading while insolvent —for that is what it told the Select Committee. Under the present arrangements, however, nuclear power stations supply power wherever and whenever they can produce it, at whatever cost they can produce it, while coal-fired power stations capable of producing cheaper electricity are forced to lie idle. That is not the operation of a free market.
Under the present arrangements, Nuclear Electric has a legal right to first place in the merit order of operating power stations. When Sizewell B comes on stream, it will go on base load despite the fact that it will be producing not the cheapest electricity in Britain but the dearest. Those are the economics of the madhouse.
Much has happened since I coined the phrase "the dash for gas" three years ago. Many more gas-fired power 911 stations are being built, but if one takes proper account of the capital building costs, the cost of the electricity that they produce is higher than that of coal-fired stations. In addition, most of that generating capacity has been designed by foreign companies, because British companies are not in a position to compete.
Recently, I was told that I should stop calling orimulsion the filthiest fuel in the world. But I cannot forget that the burning of orimulsion led to the famous headline in The Sun, "Black rain eats cars". Orimulsion can be burned safely only if millions of pounds are spent on cleaning its chimney emissions. If that expenditure were undertaken, orimulsion would price itself out of the market.
Deep-mined British coal is denied access to a market in which it is the cheapest fuel. The Tories say that they believe in free markets. The coal industry would be saved from the threat of near-extinction if the Government would end the way that they rig the market against coal.
That is not the only consideration. Energy projects are enormous in their scale, vast in their cost, and take a long time to bring into operation. That is true whether the project is an oil-producing platform in the North sea, a nuclear power station or the sinking of a mine. No market can respond quickly to long-term changes in fuel supply or the demand for energy, which is why such decisions cannot be left to the market alone. In no country of the world are they left to the market alone. Such decisions call for strategic involvement by Governments.
That is not the only reason why there is a role for Government in energy decision-making. Fuel imports and exports make an enormous impact on our balance of trade. In addition, national security and self-sufficiency must be considered. There are also Europe-wide implications that no Government can abdicate. To burn gas in power stations to provide base load electricity is to waste that gas. It is better burnt at the place that it is intended to heat. To burn it in power stations will run down our limited supplies.
If our pits are closed, Britain will be left dependent on foreign supplies of natural gas. When we first raised that issue, Tory Ministers laughed and mocked, and said that we could get it from abroad. When we asked them where, they answered, "The Gulf, Algeria and the Soviet Union" and then they laughed again.
Since then, we have had the Gulf war, the Algerian army has felt it necessary to organise a coup to keep Muslim fundamentalists out of the Government and the Soviet Union has sundered into republics, some of which are themselves descending into separatist chaos.
The Tories believe that we and our children should be dependent on the Gulf, Algeria and Russia for long-term supplies of gas. How short-sighted can they get, leaving our country and the rest of Europe to be held to ransom?
Other foreign supplies of coal are scarcely more reliable. Some of them rely on semi-slave and child labour. Why should Britain's miners have to compete against child or slave labour? That cannot be right. A decent British Government would campaign against child and slave labour in pits around the world, making them compete on equal terms with us.
Fuel imports have to be paid for. We already have a dreadful trade deficit. Closing mines will condemn us to importing more and more fuel, so our exports will have to 912 rise to avoid increases in the deficit. Will not the Government recognise that fact? The President is, after all, the President of the Board of Trade.
In the past 10 years, the Government have become obsessed with their addiction to privatisation. Apart from privatisation, they have no energy policy. All over the world, countries with coal supplies have invested in clean coal technology. Even under Ronald Reagan, the United States had a $2 billion programme to develop clean coal technology. Governments and companies in Sweden and Germany have invested heavily in cleaner methods of burning coal. Such a policy provides a market for coal and experience and expertise for the American, German and Swedish companies that are designing and building such plant. As the world turns more and more to clean coal technology, those companies will get the orders for new plant. They will have the know-how. British companies will be at a disadvantage because Tory short-sightedness will have excluded them from yet another modern market.
That is not all. The European Community imports about 120 million tonnes of coal a year. A sensible British Government would have pushed our partners to help British Coal by making Europe reduce its dependence on outside supplies of coal. After all, Tories constantly prate on about the need to be concerned about Europe's trade balance with the rest of the world. Here is an opportunity to help, but the Government have thrown it away. They have done nothing to help. Instead, they have prattled on about subsidiarity and closed down the most efficient mines in Europe while other countries keep their less efficient mines open. Our European partners think that we are mad. It is not the British people but the British Government who are mad.
We have heard speeches from hon. Members with experience of coalfields and former coalfields all over the country. There is one colliery left in Scotland, one left in Wales and one left in Northumberland. Under this Government, importing coals to Newcastle has become a reality—it is part of their energy policy. There are no collieries left in Lancashire—
§ Mr. Dobson
They are threatened in Derbyshire and Durham.
The Government must abandon the pit closure programme. They could make a start by giving coal an equal opportunity to compete. If they stop rigging the market against British mined coal, our collieries can compete and prosper. They could make sure that no more orimulsion is imported. They could cut coal imports—there are no international obligations that prevent us from doing that. They could reduce their purchases of electricity from France and insist on exporting British electricity through that channel link. They could cut opencast mining. They could end the issue of new licences for new gas-fired power stations. They could get regulators to do their jobs properly and refuse to accept sweetheart deals in which companies buy expensive electricity from gas-fired power stations. They could stop the gas-fired stations and the nuclear power stations from hogging the base load, which their costs do not justify. They could start selling coal to our European partners.
If the Government did that, they would achieve many benefits for Britain. They would save all that taxpayers' money now being poured into making men redundant. 913 They would help the balance of trade and reduce our growing dependence on imports. They would stop thousands of miners and other people being thrown on the dole. They would sustain the coalfield communities.
The miners and their families are not looking for charity from the House or anybody else tonight. What they are looking for is a decent chance and a bit of common sense. The only way that the House can give them a chance and show a bit of common sense is by voting against the Government tonight.
§ The Secretary of State for Employment (Mr. David Hunt)
We have on several occasions over the past year debated the coal industry. I believe that this is the first occasion on which the shadow employment spokesman has participated in these debates. I should like to say a few personal words to him as he now moves to a new position as shadow transport spokesman.
I have much appreciated his unfailing courtesy. We may have disagreed on policies and principles, but we have never doubted each other's commitment to bringing clown the level of unemployment and increasing employment opportunities.
§ Mr. Hunt
I am still paying tribute to him.
I agreed with what the hon. Gentleman said when he spoke of the depth of compassion that there is in the House for the coal industry. The hon. Member for Stoke-on-Trent, South (Mr. Stevenson) said that it came from all parts of the House. The debates that we have had about the coal industry have been characterised by the extent of commitment to coal on both sides of the House, and among all hon. Members.
I have spent some considerable time looking up the debates about coal that have taken place in previous years. One interesting era was the 1960s when there were extensive debates about markets and the collapse of the coal market. I ask hon. Members on both sides of the House to play close attention to those debates and to what happened.
Coal had a substantial market in domestic fuel. Throughout the country most people burned coal in their grates to provide heating for hot water and central heating in their homes. During the 1960s, the bottom fell out of the market. Although coal used to provide a substantial proportion of the market in the 1960s, that market almost completely disappeared.
Today, coal provides only 7 per cent. of that domestic market, whereas in the 1960s it was four, five or six times as much. During the debates in the 1960s great anger was felt on both sides of the House about the way that coal mines were shutting—10, 20, 50, 100, 150, 200, and at a rate of 40, 50 or 60 a year. What on this occasion caused a serious problem to become much less of a challenge was the extension of the market for coal in electricity generation. As all hon. Members will know, many coal mines that shut because of the collapse in domestic markets 914 were reopened as the market suddenly expanded into electricity generation. Now those markets have changed again.
This evening we are debating our reaffirmation of what we said in the White Paper in which we made it clear that electricity generation must look for the best fuel in the market. Coal must take its place in the highly competitive world of energy.
This debate has fallen into five sections—first, the talk about markets; secondly, the question of closures and the policy of British Coal; thirdly, regeneration and what will happen to mining communities when their coal mines close; then, a lengthy debate on health and safety; and finally the feeling of Conservative Members, clearly expressed by my hon. Friend the Member for Batley and Spen (Mrs. Peacock), that the future of the coal industry must lie in privatisation. It is important to ensure that we get through to that privatisation with the most competitive possible coal industry.
First, then, I want to discuss markets. As we said in the White Paper, it is important that coal takes its place in the market. I must tell the hon. Member for Barnsley, East (Mr. Patchett) that what I believe was in the minds of the miners to whom he referred was not the attraction of money but the facts of the market as it is today—
§ Mr. Hunt
I believe that those who work in the industry can see the meaning of the ever-growing stock piles of unused coal. Those stock piles grow by the day.
At the end of the last financial year, 1992–93, stocks stood at more than 47 million tonnes. Already this year another three million have been added to stock. So in spite of the exploration of further markets, British Coal estimates that by the end of this financial year there will be more than 50 million tonnes in stock. The next financial year will thus start with more than a year's supply of coal already in stock.
No industry can possibly operate with stocks as high as these. Doing so not only places an intolerable burden on the taxpayer and the electricity consumer, who must pay the costs of producing and storing unsold coal; it also puts the future of the industry at great risk.
As we pointed out in the White Paper, maintaining stocks would matter less if the market for coal was, expanding. Sad to say, it has been in decline for decades. Before the first world war our mines produced about 300 million tonnes of coal a year. By the time of nationalisation, production had fallen to 200 million. The figure is now below 100 million tonnes.
For the next year, British Coal's contract with the generators—the industry's main customer—will fall to 40 million and then to 30 million tonnes. Contrary to the figures claimed by some Members this evening, that coal will be sold at well above the world market price. That price will have to be supported by electricity consumers. We have the advantage in this country of being rich in energy, not only in coal but in gas and oil.
Never let us forget the fact that we pioneered civil nuclear energy in this country. Several of my hon. Friends —in particular my hon. Friend the Member for Chelmsford (Mr. Burns)—made an important point during the debate. If we were to follow the advice contained in a pamphlet written by the hon. Member for Livingston (Mr. Cook) in the early 1980s, or indeed if we were to follow the 915 implication of the speech of the hon. Member for Holborn and St. Pancras (Mr. Dobson), and shut down the nuclear industry, it would cost approximately 100,000 jobs.
The hon. Member for Delyn (Mr. Hanson) spoke proudly about the colliery in his constituency and I share that pride with him. However, he owes it to the House to point out that my right hon. Friend the Secretary of State for Wales was in that area earlier today, and also that a substantial number of new jobs will be generated by the Point of Ayr gas development by Hamilton and at the Connah's Quay power station.
I hope that when hon. Members speak in the House about energy and coal they will recognise a fact that has been pointed out by several speakers in the debate—that one constantly must weigh the balance of the effects on jobs in all the energy industries and not in just one.
§ Mr. Simon Hughes
Does not the Secretary of State realise that he is making a case that the coal industry has made in the past and that many hon. Members have made today, which is that one cannot make decisions about the coal industry nor about its employment prospects in isolation? The industry must be looked at in the context of an energy strategy. The employment implications require that, if one is being just, equal opportunity is given to coal, to gas, to oil and to renewables. Above all, is not it important that hon. Members debate all the industries and the employment implications of all the industries together, otherwise they will never be treated fairly?
§ Mr. Hunt
The Liberal Democrats have omitted to table an amendment to tonight's Opposition motion. The last time that the Liberal Democrats tabled an amendment, the party spokesman signed two mutually exclusive amendments. The official Liberal Democrat amendment omitted the word "coal" except in reference to the White Paper—
§ Mr. Hunt
I am answering the hon. Member for Southwark and Bermondsey (Mr. Hughes).
The Liberal Democrat amendment stated that there should be fair opportunities for all energy sources, but the only one that they highlighted was renewables. I know that the Liberal Democrat party believes that the future of energy lies in windmills, but we need a sense of responsibility when dealing with energy. If the Liberal Democrat party wants to be taken seriously in important debates such as this, it owes it to the House to put its views on the Order Paper in a proper amendment that hon. Members can judge on its merits.
§ Dr. Keith Hampson (Leeds, North-West)
Is my right hon. Friend aware that, not only has the Liberal Democrat party always talked about the anomaly of there not being VAT on fuel bills, but in its most recent document calling for taxation on polluters it has specifically endorsed EC proposals—particularly French proposals—for a carbon tax? Is my right hon. Friend further aware that the Select Committee on Trade and Industry report states that a carbon tax would be most damaging for the British coal industry, and that the Government ought to oppose it?
§ Mr. Hunt
I agree with my hon. Friend. My hon. Friend the Member for Amber Valley (Mr. Oppenheim) and 916 others calculated that the effect of that proposal would be to add 58 per cent. to the price of coal. I have not heard that figure challenged during the debate, but I hope that at some stage the Liberal Democrat party will put the facts and statistics in an open way.
Everyone in the House knows that closures are a matter for British Coal. Everyone also knows that under the modified colliery review procedure British Coal will ask the unions and employees for their views when they look into the realities of the market for coal. The corporation has decided to resume consultations with the unions through the modified colliery review procedure. I welcome that. The hon. Member for Hemsworth (Mr. Enright) asked me whether it would be a meaningful consultation. It has to be: I give him that assurance. The resumption of that procedure is a welcome return to the normal consultative arrangements within the industry.
As the House will know, the current redundancy terms for miners were due to expire on 31 December. Several hon. Members have asked about those terms. Of course, the redundancy terms are extremely generous. Payments average £24,000 and may be as high as £37,000. Few of the taxpayers who finance them in either the public or the private sector enjoy such generous terms. However, I believe that I speak for everyone in the House in saying that we do not begrudge those terms. People respect those who have risked their life to work and to win coal. That is why, as my hon. Friends the Members for Davyhulme (Mr. Churchill) and for Staffordshire, South (Mr. Cormack) pointed out, coal and coal miners have such a strong impact on the emotions of the House and will continue to do so for years ahead.
I hope that the House will welcome the announcement by my hon. Friend the Minister for Energy of the extension of the funding for those redundancy terms until 30 April next year. My hon. Friend went further in answer to several questions. He made it clear that if consultations are still in progress at that time, the funding will be extended beyond April, if necessary. I hope that that announcement removes any pressure on individual miners to accept redundancy now in the fear that the terms in the early part of next year will be less favourable.
Several hon. Members raised the need to ensure that we provide proper help to those in pit communities affected by closure. I remind the House that the Government have already promised and provided £200 million to regenerate pit communities affected by closure. Some £75 million is available to English Estates to build factory units in the affected areas. Three new enterprise zones are in the process of being established. Assisted area status has been granted to six new coal-mining areas. Through my Department I have arranged for £75 million to be made available through the training and enterprise councils. In all, that amounts to some very substantial assistance.
I attended a meeting with Lord Walker in my Department in the past few days with many people, including local authority and training and enterprise council representatives, at which we worked out the best possible strategy to feed new jobs into coal-mining areas. We shall continue with that policy.
I am not sure whether the House apreciated exactly what we said in the debate about health and safety. The Governmnent are determined that privatisation will bring no compromise whatever in the high standards of safety that have always been present in the industry. To that end, we asked the Health and Safety Commission to produce a 917 detailed and comprehensive piece of work on all aspects of the post-privatisation safety regime. I believe that that meets the needs of all who have a genuine concern and interest in ensuring that all the relevant safety issues are addressed in the run-up to privatisation. I commend the commission on the thorough way in which it has gone about its task. I am happy to give an assurance on behalf of the Government but, before I do, I will give way to the hon. Member for Wentworth (Mr. Hardy).
§ Mr. Hardy
Will the Minister answer the question that I put yesterday and last week—to which I have had no reply—and assure the House and the country that no foreign producer of coal which has a grossly unsatisfactory safety record in the mines of its country of origin will be allowed to purchase collieries in this country?
§ Mr. Churchill
No Conservative Member doubts the Government's commitment to the maintenance of safety in the mines. I take it that there is reasonably close consultation between the Government and the coal board. Can my right hon. Friend tell the House how many of the 50 pits that were in business a year ago he expects still to be producing coal at the end of this financial year?
§ Mr. Hunt
My hon. Friend knows that I cannot give a precise figure. As was pointed out earlier in the debate, the principal recommendation in the Select Committee report was that the Government should make available a subsidy —[Interruption.] Yes—that the Government should make available a subsidy for additional markets to be secured. We have already announced the granting of the first subsidy, and that money is available provided additional markets can be found. It is for British Coal to make decisions about individual pits.
Will my hon. Friend please bear in mind, when he questions the £20 billion investment announced earlier by my hon. Friend the Member for Staffordshire, South, that £8 billion has been spent on capital improvements and schemes for British Coal? Asfordby is not winning coal at the moment, but it has already had £250 million spent on it, with a further £70 milllion still to be spent—and that mine has not yet opened. That is a demonstration that these are not just subsidies but an investment in the future, for which the Government are responsible. I have not even mentioned the £1,500 million that has been invested in Selby. Selby is now producing coal at more than 12 tonnes per man shift, which is a tremendous record.
§ Mr. Hunt
No; I only have a few minutes left.
The future of this great industry must lie in privatisation, as I, with several of my right hon. and hon. Friends, have already said. I strongly believe that the sooner the coal industry goes into the private sector, the more secure will be the future of the coal miners. That is felt not only by the Government but by some members of the Opposition.
Time and time again we have asked what the Labour party would do if it ever returned to government. Would it renationalise the coal industry once it had moved into the 918 private sector? [HON. MEMBERS: "Yes."] The answer from below the Gangway on the Opposition Benches is, "Yes, we will renationalise the coal industry." During the debate we heard no answer from the Opposition Front Bench Members as to what they would do. They remained silent.
§ Mr. Robin Cook
I am happy to say that whatever plan there may be to rescue what is left of the coal industry would involve a degree of public ownership. How many pits will be left when the election comes, and how many will the Government close?
§ Mr. Hunt
The hon. Gentleman ought to consult the hon. Member for Cynon Valley (Mrs. Clwyd) because she said on the radio today, in answer to a question, that it would not be possible to renationalise. Perhaps he ought to get his policy sorted out.
I urge the House to throw out the Opposition amendment and to accept the Government's motion.
§ Question, That the Question be now put, put and agreed to.
§ Question put accordingly, That the original words stand part of the Question:—
§ The House divided: Ayes 283, Noes 317.922
|Division No. 372]||[10 pm|
|Abbott, Ms Diane||Cash, William|
|Adams, Mrs Irene||Chisholm, Malcolm|
|Ainger, Nick||Churchill, Mr|
|Ainsworth, Robert (Cov'try NE)||Clapham, Michael|
|Alexander, Richard||Clark, Dr David (South Shields)|
|Allen, Graham||Clarke, Eric (Midlothian)|
|Alton, David||Clarke, Tom (Monklands W)|
|Anderson, Donald (Swansea E)||Clelland, David|
|Anderson, Ms Janet (Ros'dale)||Clwyd, Mrs Ann|
|Armstrong, Hilary||Coffey, Ann|
|Ashdown, Rt Hon Paddy||Cohen, Harry|
|Ashton, Joe||Connarty, Michael|
|Banks, Tony (Newham NW)||Cook, Frank (Stockton N)|
|Barnes, Harry||Cook, Robin (Livingston)|
|Barren, Kevin||Corbett, Robin|
|Battle, John||Corbyn, Jeremy|
|Bayley, Hugh||Corston, Ms Jean|
|Beckett, Rt Hon Margaret||Cousins, Jim|
|Beith, Rt Hon A. J.||Cryer, Bob|
|Bell, Stuart||Cummings, John|
|Benn, Rt Hon Tony||Cunliffe, Lawrence|
|Bennett, Andrew F.||Cunningham, Jim (Covy SE)|
|Benton, Joe||Cunningham, Rt Hon Dr John|
|Bermingham, Gerald||Darling, Alistair|
|Berry, Dr. Roger||Davidson, Ian|
|Betts, Clive||Davies, Rt Hon Denzil (Llanelli)|
|Blair, Tony||Davies, Ron (Caerphilly)|
|Blunkett, David||Davis, Terry (B'ham, H'dge H'l)|
|Boateng, Paul||Denham, John|
|Boyce, Jimmy||Dewar, Donald|
|Boyes, Roland||Dixon, Don|
|Bradley, Keith||Dobson, Frank|
|Brown, Gordon (Dunfermline E)||Donohoe, Brian H.|
|Brown, N. (N'c'tle upon Tyne E)||Dowd, Jim|
|Bruce, Malcolm (Gordon)||Dunnachie, Jimmy|
|Burden, Richard||Eagle, Ms Angela|
|Byers, Stephen||Eastham, Ken|
|Caborn, Richard||Enright, Derek|
|Callaghan, Jim||Etherington, Bill|
|Campbell, Menzies (Fife NE)||Evans, John (St Helens N)|
|Campbell, Ronnie (Blyth V)||Ewing, Mrs Margaret|
|Campbell-Savours, D. N.||Fatchett, Derek|
|Canavan, Dennis||Faulds, Andrew|
|Cann, Jamie||Field, Frank (Birkenhead)|
|Carlile, Alexander (Montgomry)||Fisher, Mark|
|Flynn, Paul||Maclennan, Robert|
|Foster, Rt Hon Derek||McMaster, Gordon|
|Foster, Don (Bath)||McNamara, Kevin|
|Foulkes, George||McWilliam, John|
|Fraser, John||Madden, Max|
|Fyfe, Maria||Maddock, Mrs Diana|
|Galloway, George||Mahon, Alice|
|Gapes, Mike||Mandelson, Peter|
|Garrett, John||Marek, Dr John|
|Gerrard, Neil||Marshall, David (Shettleston)|
|Gilbert, Rt Hon Dr John||Marshall, Jim (Leicester, S)|
|Godman, Dr Norman A.||Martin, Michael J. (Springburn)|
|Godsiff, Roger||Martlew, Eric|
|Golding, Mrs Llin||Maxton, John|
|Gordon, Mildred||Meacher, Michael|
|Gould, Bryan||Meale, Alan|
|Graham, Thomas||Michael, Alun|
|Griffiths, Nigel (Edinburgh S)||Michie, Bill (Sheffield Heeley)|
|Griffiths, Win (Bridgend)||Michie, Mrs Ray (Argyll Bute)|
|Grocott, Bruce||Milburn, Alan|
|Gunnell, John||Miller, Andrew|
|Hain, Peter||Mitchell, Austin (Gt Grimsby)|
|Hall, Mike||Moonie, Dr Lewis|
|Hanson, David||Morgan, Rhodri|
|Hardy, Peter||Morley, Elliot|
|Harman, Ms Harriet||Morris, Rt Hon A. (Wy'nshawe)|
|Harvey, Nick||Morris, Estelle (B'ham Yardley)|
|Henderson, Doug||Morris, Rt Hon J. (Aberavon)|
|Heppell, John||Mowlam, Marjorie|
|Hill, Keith (Streatham)||Mudie, George|
|Hinchliffe, David||Mullin, Chris|
|Hoey, Kate||Murphy, Paul|
|Hogg, Norman (Cumbernauld)||Oakes, Rt Hon Gordon|
|Home Robertson, John||O'Brien, Michael (N W'kshire)|
|Hood, Jimmy||O'Brien, William (Normanton)|
|Hoon, Geoffrey||O'Hara, Edward|
|Howarth, George (Knowsley N)||Olner, William|
|Howells, Dr. Kim (Pontypridd)||O'Neill, Martin|
|Hoyle, Doug||Orme, Rt Hon Stanley|
|Hughes, Kevin (Doncaster N)||Parry, Robert|
|Hughes, Robert (Aberdeen N)||Patchett, Terry|
|Hughes, Roy (Newport E)||Peacock, Mrs Elizabeth|
|Hughes, Simon (Southwark)||Pendry, Tom|
|Hutton, John||Pickthall, Colin|
|Ingram, Adam||Pike, Peter L.|
|Jackson, Glenda (H'stead)||Pope, Greg|
|Jackson, Helen (Shef'ld, H)||Powell, Ray (Ogmore)|
|Jamieson, David||Prentice, Ms Bridget (Lew'm E)|
|Janner, Greville||Prentice, Gordon (Pendle)|
|Jones, Barry (Alyn and D'side)||Prescott, John|
|Jones, leuan Wyn (Ynys Mon)||Primarolo, Dawn|
|Jones, Jon Owen (Cardiff C)||Purchase, Ken|
|Jones, Martyn (Clwyd, SW)||Quin, Ms Joyce|
|Jones, Nigel (Cheltenham)||Radice, Giles|
|Jowell, Tessa||Randall, Stuart|
|Kaufman, Rt Hon Gerald||Raynsford, Nick|
|Keen, Alan||Redmond, Martin|
|Kennedy, Charles (Ross,C&S)||Reid, Dr John|
|Kennedy, Jane (Lpool Brdgn)||Rendel, David|
|Khabra, Piara S.||Robertson, George (Hamilton)|
|Kilfoyle, Peter||Robinson, Geoffrey (Co'try NW)|
|Kinnock, Rt Hon Neil (Islwyn)||Roche, Mrs. Barbara|
|Kirkwood, Archy||Rogers, Allan|
|Leighton, Ron||Rooker, Jeff|
|Lestor, Joan (Eccles)||Rooney, Terry|
|Lewis, Terry||Ross, Ernie (Dundee W)|
|Livingstone, Ken||Rowlands, Ted|
|Lloyd, Tony (Stretford)||Ruddock, Joan|
|Llwyd, Elfyn||Salmond, Alex|
|Loyden, Eddie||Sedgemore, Brian|
|Lynne, Ms Liz||Sheerman, Barry|
|McAllion, John||Sheldon, Rt Hon Robert|
|McAvoy, Thomas||Shore, Rt Hon Peter|
|McCartney, Ian||Short, Clare|
|Macdonald, Calum||Simpson, Alan|
|McFall, John||Skinner, Dennis|
|McGrady, Eddie||Smith, Andrew (Oxford E)|
|McKelvey, William||Smith, C. (Isl'ton S & F'sbury)|
|Mackinlay, Andrew||Smith, Rt Hon John (M'kl'ds E)|
|McLeish, Henry||Smith, Llew (Blaenau Gwent)|
|Snape, Peter||Wardell, Gareth (Gower)|
|Soley, Clive||Wareing, Robert N|
|Spearing, Nigel||Watson, Mike|
|Spellar, John||Welsh, Andrew|
|Squire, Rachel (Dunfermline W)||Wicks, Malcolm|
|Steel, Rt Hon Sir David||Williams, Rt Hon Alan (Sw'n W)|
|Steinberg, Gerry||Wilson, Brian|
|Stevenson, George||Winnick, David|
|Stott, Roger||Winterton, Mrs Ann (Congleton)|
|Strang, Dr. Gavin||Wise, Audrey|
|Straw, Jack||Worthington, Tony|
|Taylor, Mrs Ann (Dewsbury)||Wray, Jimmy|
|Taylor, Matthew (Truro)||Wright, Dr Tony|
|Tipping, Paddy||Young, David (Bolton SE)|
|Tyler, Paul||Tellers for the Ayes:|
|Walker, Rt Hon Sir Harold||Mr. Jack Thompson and|
|Wallace, James||Mr. Eric Illsley.|
|Ainsworth, Peter (East Surrey)||Conway, Derek|
|Aitken, Jonathan||Coombs, Anthony (Wyre For'st)|
|Alison, Rt Hon Michael (Selby)||Coombs, Simon (Swindon)|
|Allason, Rupert (Torbay)||Cope, Rt Hon Sir John|
|Amess, David||Couchman, James|
|Ancram, Michael||Cran, James|
|Arbuthnot, James||Currie, Mrs Edwina (S D'by'ire)|
|Arnold, Jacques (Gravesham)||Curry, David (Skipton & Ripon)|
|Arnold, Sir Thomas (Hazel Grv)||Davies, Quentin (Stamford)|
|Ashby, David||Davis, David (Boothferry)|
|Aspinwall, Jack||Deva, Nirj Joseph|
|Atkins, Robert||Devlin, Tim|
|Atkinson, David (Bour'mouth E)||Dickens, Geoffrey|
|Atkinson, Peter (Hexham)||Dicks, Terry|
|Baker, Rt Hon K. (Mole Valley)||Dorrell, Stephen|
|Baker, Nicholas (Dorset North)||Douglas-Hamilton, Lord James|
|Baldry, Tony||Dover, Den|
|Banks, Matthew (Southport)||Duncan, Alan|
|Banks, Robert (Harrogate)||Duncan-Smith, Iain|
|Bates, Michael||Dunn, Bob|
|Beggs, Roy||Durant, Sir Anthony|
|Bellingham, Henry||Dykes, Hugh|
|Bendall, Vivian||Eggar, Tim|
|Beresford, Sir Paul||Elletson, Harold|
|Biffen, Rt Hon John||Emery, Rt Hon Sir Peter|
|Blackburn, Dr John G.||Evans, David (Welwyn Hatfield)|
|Bonsor, Sir Nicholas||Evans, Jonathan (Brecon)|
|Booth, Hartley||Evans, Nigel (Ribble Valley)|
|Boswell, Tim||Evans, Roger (Monmouth)|
|Bottomley, Peter (Eltham)||Faber, David|
|Bottomley, Rt Hon Virginia||Fabricant, Michael|
|Bowden, Andrew||Fairbairn, Sir Nicholas|
|Bowis, John||Fenner, Dame Peggy|
|Boyson, Rt Hon Sir Rhodes||Reid, Barry (Isle of Wight)|
|Brandreth, Gyles||Fishburn, Dudley|
|Brazier, Julian||Forman, Nigel|
|Bright, Graham||Forsyth, Michael (Stirling)|
|Brooke, Rt Hon Peter||Forsythe, Clifford (Antrim S)|
|Brown, M. (Brigg & Cl'thorpes)||Forth, Eric|
|Browning, Mrs. Angela||Fowler, Rt Hon Sir Norman|
|Bruce, Ian (S Dorset)||Fox, Dr Liam (Woodspring)|
|Budgen, Nicholas||Fox, Sir Marcus (Shipley)|
|Burns, Simon||Freeman, Rt Hon Roger|
|Burt, Alistair||French, Douglas|
|Butcher, John||Fry, Peter|
|Butler, Peter||Gale, Roger|
|Butterfill, John||Gallie, Phil|
|Carlisle, John (Luton North)||Gardiner, Sir George|
|Carlisle, Kenneth (Lincoln)||Garel-Jones, Rt Hon Tristan|
|Carrington, Matthew||Garnier, Edward|
|Carttiss, Michael||Gill, Christopher|
|Channon, Rt Hon Paul||Goodlad, Rt Hon Alastair|
|Clappison, James||Gorman, Mrs Teresa|
|Clark, Dr Michael (Rochford)||Gorst, John|
|Clarke, Rt Hon Kenneth (Ruclif)||Grant, Sir A. (Cambs SW)|
|Clifton-Brown, Geoffrey||Greenway, Harry (Eating N)|
|Coe, Sebastian||Greenway, John (Ryedale)|
|Colvin, Michael||Griffiths, Peter (Portsmouth, N)|
|Congdon, David||Grylls, Sir Michael|
|Gummer, Rt Hon John Selwyn||MacKay, Andrew|
|Hague, William||Maclean, David|
|Hamilton, Rt Hon Archie (Epsom)||McLoughlin, Patrick|
|Hamilton, Neil (Tatton)||McNair-Wilson, Sir Patrick|
|Hampson, Dr Keith||Madel, David|
|Hanley, Jeremy||Maitland, Lady Olga|
|Hannam, Sir John||Major, Rt Hon John|
|Hargreaves, Andrew||Malone, Gerald|
|Harris, David||Mans, Keith|
|Haselhurst, Alan||Marland, Paul|
|Hawkins, Nick||Marlow, Tony|
|Hawksley, Warren||Marshall, John (Hendon S)|
|Hayes, Jerry||Marshall, Sir Michael (Arundel)|
|Heald, Oliver||Martin, David (Portsmouth S)|
|Heathcoat-Amory, David||Mates, Michael|
|Hendry, Charles||Mawhinney, Dr Brian|
|Heseltine, Rt Hon Michael||Mayhew, Rt Hon Sir Patrick|
|Hicks, Robert||Mellor, Rt Hon David|
|Higgins, Rt Hon Sir Terence L.||Merchant, Piers|
|Hill, James (Southampton Test)||Milligan, Stephen|
|Hogg, Rt Hon Douglas (G'tham)||Mills, Iain|
|Horam, John||Mitchell, Andrew (Gedling)|
|Hordern, Rt Hon Sir Peter||Mitchell, Sir David (Hants NW)|
|Howard, Rt Hon Michael||Moate, Sir Roger|
|Howarth, Alan (Strat'rd-on-A)||Molyneaux, Rt Hon James|
|Howell, Rt Hon David (G'dford)||Monro, Sir Hector|
|Howell, Sir Ralph (N Norfolk)||Montgomery, Sir Fergus|
|Hughes Robert G. (Harrow W)||Moss, Malcolm|
|Hunt, Rt Hon David (Wirral W)||Needham, Richard|
|Hunt, Sir John (Ravensbourne)||Nelson, Anthony|
|Hunter, Andrew||Neubert, Sir Michael|
|Hurd, Rt Hon Douglas||Newton, Rt Hon Tony|
|Jack, Michael||Nicholls, Patrick|
|Jackson, Robert (Wantage)||Nicholson, Emma (Devon West)|
|Jenkin, Bernard||Norn's, Steve|
|Jessel, Toby||Onslow, Rt Hon Sir Cranley|
|Johnson Smith, Sir Geoffrey||Oppenheim, Phillip|
|Jones, Gwilym (Cardiff N)||Ottaway, Richard|
|Jones, Robert B. (W Hertfdshr)||Page, Richard|
|Jopling, Rt Hon Michael||Paice, James|
|Kellett-Bowman, Dame Elaine||Patnick, Irvine|
|Key, Robert||Patten, Rt Hon John|
|Kilfedder, Sir James||Pattie, Rt Hon Sir Geoffrey|
|King, Rt Hon Tom||Pawsey, James|
|Kirkhope, Timothy||Pickles, Eric|
|Knapman, Roger||Porter, Barry (Wirral S)|
|Knight, Mrs Angela (Erewash)||Porter, David (Waveney)|
|Knight, Greg (Derby N)||Portillo, Rt Hon Michael|
|Knight, Dame Jill (Bir'm E'st'n)||Rathbone, Tim|
|Knox, Sir David||Redwood, Rt Hon John|
|Kynoch, George (Kincardine)||Renton, Rt Hon Tim|
|Lait, Mrs Jacqui||Richards, Rod|
|Lamont, Rt Hon Norman||Riddick, Graham|
|Lang, Rt Hon Ian||Rifkind, Rt Hon. Malcolm|
|Lawrence, Sir Ivan||Robathan, Andrew|
|Legg, Barry||Roberts, Rt Hon Sir Wyn|
|Leigh, Edward||Robertson, Raymond (Ab'd'n S)|
|Lennox-Boyd, Mark||Robinson, Mark (Somerton)|
|Lidington, David||Roe, Mrs Marion (Broxbourne)|
|Lilley, Rt Hon Peter||Ross, William (E Londonderry)|
|Lloyd, Peter (Fareham)||Rowe, Andrew (Mid Kent)|
|Lord, Michael||Rumbold, Rt Hon Dame Angela|
|Luff, Peter||Ryder, Rt Hon Richard|
|Lyell, Rt Hon Sir Nicholas||Sackville, Tom|
|MacGregor, Rt Hon John||Sainsbury, Rt Hon Tim|
|Scott, Rt Hon Nicholas||Thornton, Sir Malcolm|
|Shaw, David (Dover)||Thurnham, Peter|
|Shephard, Rt Hon Gillian||Townend, John (Bridlington)|
|Shepherd, Colin (Hereford)||Townsend, Cyril D. (Bexl'yh'th)|
|Shepherd, Richard (Aldridge)||Tracey, Richard|
|Shersby, Michael||Tredinnick, David|
|Sims, Roger||Trend, Michael|
|Smith, Sir Dudley (Warwick)||Trimble, David|
|Smith, Tim (Beaconsfield)||Trotter, Neville|
|Smyth, Rev Martin (Belfast S)||Twinn, Dr Ian|
|Soames, Nicholas||Vaughan, Sir Gerard|
|Speed, Sir Keith||Viggers, Peter|
|Spencer, Sir Derek||Waldegrave, Rt Hon William|
|Spicer, Sir James (W Dorset)||Walden, George|
|Spicer, Michael (S Worcs)||Walker, Bill (N Tayside)|
|Spink, Dr Robert||Waller, Gary|
|Spring, Richard||Ward, John|
|Sproat, Iain||Wardle, Charles (Bexhill)|
|Squire, Robin (Hornchurch)||Waterson, Nigel|
|Stanley, Rt Hon Sir John||Watts, John|
|Steen, Anthony||Wells, Bowen|
|Stephen, Michael||Whitney, Ray|
|Stern, Michael||Whittingdale, John|
|Stewart, Allan||Widdecombe, Ann|
|Streeter, Gary||Wiggin, Sir Jerry|
|Sumberg, David||Wilkinson, John|
|Sweeney, Walter||Willetts, David|
|Sykes, John||Wilshire, David|
|Tapsell, Sir Peter||Wolfson, Mark|
|Taylor, Ian (Esher)||Wood, Timothy|
|Taylor, Rt Hon John D. (Strgfd)||Yeo.Tim|
|Taylor, John M. (Solihull)||Young, Rt Hon Sir George|
|Taylor, Sir Teddy (Southend, E)|
|Temple-Morris, Peter||Tellers for the Noes:|
|Thomason, Roy||Mr. David Llghtbown and|
|Thompson, Sir Donald (C'er V)||Mr. Sydney Chapman.|
|Thompson, Patrick (Norwich N)|
§ Question accordingly negatived.
§ Quesion, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
§ MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.
'That this House reaffirms its approval for the White Paper "The Prospects for Coal: Conclusions of the Government's Coal Review" (Cm 2235) which accepted the principal recommendations of the Report by the Trade and Industry Committee "British Energy Policy and the Market for Coal" (HC 237) and in particular the offer of a transitional subsidy for additional sales of United Kingdom underground coal for electricity generation; welcomes the help provided by the Government to coal field communities affected by closures; welcomes the offer of subsidy, subject to EC clearance, to British Coal, for coal from the Ellington colliery; welcomes the fact that British Coal have offered to the private sector the pits that they do not themselves wish to keep in production; welcomes the Government's commitment that the present high standards of safety achieved by British Coal be maintained or improved; and welcomes the Government's intention to bring forward as soon as parliamentary time allows the legislation necessary to privatise British Coal since the best future for the coal industry lies in the private sector.'.