HC Deb 27 January 2000 vol 343 cc568-9
9. Mr. John Grogan (Selby)

If he will make a statement on the future of the coal industry. [105757]

The Secretary of State for Trade and Industry (Mr. Stephen Byers)

We are introducing reforms to the electricity market to remove distortions that worked against coal generation. The new electricity trading arrangements in the Utilities Bill published last week will change the way in which the generation market operates, with credit being given to coal for the flexibility that it offers to the system. In 1997, the industry asked for fairness not favours. That has been, and will continue to be, our approach.

Mr. Grogan

Given the huge subsidies currently paid by the German, Spanish and French Governments to support their coal industries, will the Minister establish, with the European Union, which state aids might legally be payable to support the British coal industry? Is not a diverse energy portfolio in the interests of both Britain and Europe as a whole?

Mr. Byers

My hon. Friend raises an important issue. First, we must study carefully the level of state aids given by other European Union member states to ensure that they do not achieve an unfair advantage. I know that my hon. Friend has considered very carefully the aid that the UK Government can give to the coal industry. He will know that the Government do not consider that we have the power to offer aid for operating costs, because of decisions taken by the previous Administration. However, given our concern about the coal industry, the Government will look closely at any alternative opinion.

Mr. Owen Paterson (North Shropshire)

If the Government lifted the moratorium on gas-fired power stations, how many coal mines in this country would remain competitive?

Mr. Byers

I said that our intention was to introduce fairness not favours. Our aim is to make the energy market fair. To achieve that, we are introducing changes through the Utilities Bill. However, we have introduced a stricter gas consents policy to protect industries in the energy sector that would be affected adversely by the fact that we do not at present have fair competition.

Mr. Eric Illsley (Barnsley, Central)

May I urge my right hon. Friend to maintain the consents policy for gas-fired power generation? If that policy were relaxed, there would be another dash for gas and more consents would be issued for gas-fired power generation. That would wipe out what remains of the British coal industry. My right hon. Friend is correct to insist on a fair energy policy.

Mr. Byers

Given his personal and constituency experience, my hon. Friend is a powerful advocate for the coal industry. We have put in place the stricter gas consents policy so that we can make the changes contained in the Utilities Bill to secure a level and fair playing field for energy generation, which we do not have at the moment. Until we achieve that, the stricter gas consents policy will remain in place.