§ 4.7 p.m.
§ THE MINISTER OF STATE, DEPARTMENT OF ENERGY (LORD BALOGH)
My Lords, with the permission of the House I will repeat a Statement made by my right honourable friend the Secretary of State for Energy. The Statement is as follows:
"As the House is aware, the Queen's Speech announced an urgent examination of the future of the coal industry. The aim of this tripartite examination, conducted under my chairmanship jointly with the N.C.B. and the three unions in the national consultative machinery, has been to give the industry a new status, perspective and security. We are aiming to complete our work by the late summer or early 830 autumn but, in accordance with the need stated in our Manifesto for a report within three months, we have produced an Interim Report setting out the facts of the situation and the conclusions we have reached so far. It is being published this afternoon and I have arranged for copies to be available in the Library and the Vote Office.
"It is now quite clear that there is a secure, and indeed prosperous future for coal, provided it can retain its new-found competitive position. Potential demand could reach 150 million tons in the mid-1980s. The increases in the price of oil that have taken place over the last year or so have transformed the energy scene. The Government are determined that coal should not be at the mercy of short-term fluctuations caused by variations in price and supply of competing fuels. However, we recognise and accept—as I am sure does everybody in the industry—that the future prospects of the industry should be determined by its long-term competitiveness.
"Demand of 150 million tons is well above current output. All sides of the industry accept that a substantial increase in output is attainable with the present capacity. I am sure that the House will welcome the joint production drive which has been launched and will also share the hope that the N.C.B. and the unions will quickly be able to adopt a sound and effective productivity scheme.
"The examination has recommended, and the Government have accepted, the adoption of the N.C.B.'s Plan for Coal. This proposes new capital investment of some £600 million over the period to 1985 in order to provide 42 million tons of new capacity to replace that lost by depletion.
"The N.C.B. should now press ahead with preparations for the development of the Selby coal field as quickly as possible. This will, of course, be subject to the normal planning procedures. Selby will be invaluable in providing power station coal and the decision to develop it will enable the C.E.G.B. to give the Drax II coal fired power station a firm place in their investment programme for the current 831 year. Opencast production will be expanded from 10 million tons to 15 million tons a year.
"With proper commercial pricing the N.C.B. should in future be able to cover the real costs of producing coal and we are working out with the Board the precise nature of its financial objective.
"During our examination we have been constantly aware of the human costs of coal, and the legacy of chronic ill health. Outstanding among these is the problem of pneumoconiosis. All Members of the House will recognise the shadow that this has cast over the industry. We have accepted that it would be tragic for the Coal Board and the unions to fight out in the courts claims for compensation in respect of 39,000 sufferers from this disease. The Government support the view that a scheme by which all these claims might be settled without recourse to proceedings is a more sensible and more humane method of dealing with this problem. The Government will therefore be bringing before Parliament proposals to contribute to relieving the burden of the Board's finances in respect of such a scheme for existing sufferers, though it seems only right that the industry itself should make provision for the future. The N.C.B. and the unions are now formulating a scheme to deal with this.
"The examination will be continuing the investigation of a number of more detailed points with a view to presenting a final Report in the autumn. In particular the Research and Development Working Group, under my honourable friend the Member for Midlothian, will be examining the whole question of long-term uses of coal.
"It gives me pleasure and pride to present this report to the House, with the bright future it forecasts for the coal industry, to welcome the positive plans that are being put forward for the industry's development and, perhaps most important of all, to welcome the new spirit of co-operative endeavour demonstrated by the ready participation of all sides in this examination."
§ 4.10 p.m.
§ LORD STRATHCONA AND MOUNT ROYAL
My Lords, we thank the noble Lord, Lord Balogh, for repeating this Statement, and will look forward to reading the full Report in due course. First of all, we must all welcome the steps being taken to compensate for what the Minister, in a very aptly chosen word, if I may say so, has called the"shadow"being cast on the industry by the dreaded disease of pneumoconiosis. But can the Minister tell us what preventive measures the Government envisage being taken to ward off the incidence of the affliction of this disease in the future.
The noble Lord referred to the
prosperous future for coal, provided it can retain its new-found competitive position".Of course, we would welcome this, but can the noble Lord tell us the estimated relevant costs for energy from coal, oil and nuclear power? Can he also give us some of the cost assumptions being made in arriving at these figures? I did not quite understand the paragraph where he referred to "proper commercial pricing" and "the precise nature of its financial objective". I hope the noble Lord will forgive me, hut it crossed my mind that these might be abstruse terms in economics, because I am sure I am not alone in finding it difficult to know what he means in the simple English of the ordinary layman, like myself and many other noble Lords.
My Lords, the noble Lord then referred to the secure future for the industry. I hope he is right. In this connection, it is rather worrying to read in the Press recently about a decline in productivity in the industry since the strike was settled. The figures I read were a decline from 47.6 cwt. per man-shift before the strike, to 44.8 cwt. per man-shift since the strike was settled. In Yorkshire in particular, it is suggested that there has been a decline of nearly 1,400 cwt. per man-shift, something like 25 per cent. This bodes ill for the Selby field in Yorkshire, for which we all have so many hopes, even though those hopes will take some years to mature. In the event of productivity figures like these continuing, it will be a tremendous struggle to increase the output of the industry to the order of 42 million tons of new capacity. This is something in the order of a 30 per cent. increase in a time of falling productivity, 833 so I should like reassurance on those points.
Perhaps most important of all is the matter which I hope the last paragraph of the Statement is referring to. What credible undertakings are being sought from the unions by a Government proposing to invest £600 million on top of the £1,100 million announced by the previous Government? The miners have just had a 30 per cent. pay rise, after the end of the strike. Now they are asking for something in excess of 30 per cent. on top of that. We recently read Mr. Timpany as being quoted as saying in a rather non-Parliamentary phrase, "The social contract is hogwash". His friend Mr. McGahey said, "You only get what you fight for, so let's start fighting now". In the face of statements like these, from individuals whose power and irresponsibility has been all too clearly demonstrated in recent months, before we can speak of security it would be prudent to think carefully about investing vast sums of public money if this is going to leave us dependent on a strike prone industry which can threaten the national security.
§ 4.15 p.m.
§ LORD LLOYD OF KILGERRAN
My Lords, I thank the noble Lord, Lord Balogh, for repeating the Statement. I welcome particularly the general expression of views in the Statement about the bright future which it forecasts for the coal industry. Of course, I realise that this is only an interim statement, and cannot be held to be comprehensive, but I should have thought that one major matter which even an Interim Report might properly mention is that which relates to any schemes of decentralisation of the administrative affairs of the Coal Board which may be under consideration. I feel sure that the Minister will agree that some degree of decentralisation of the administration of the Coal Board could be of advantage, particularly in regard to the organisation of the coal-mining industry in Wales. I am not asking the Minister for any detailed reply to-day, but if he has any general information about any schemes of reorganisation. particularly with regard to Wales and the Welsh mining industry, I shall be very glad to hear it.
§ LORD BALOGH
My Lords, I do not think that the noble Lord opposite has contributed to the peaceful evolution of the coal industry by his intemperate remarks—
§ THE EARL OF ONSLOW
My Lords, if the noble Lord, Lord Balogh, will forgive me for interrupting, is the noble Lord, Lord Strathcona and Mount Royal, being particularly intemperate by quoting Mr. McGahey, or is it Mr. McGahey who is being intemperate?
§ LORD BALOGH
My Lords, I should have thought that on some occasions one ought to be somewhat more reticent.
§ LORD BALOGH
Because a lack of reticence has led to a very deplorable state in this industry, one which we received from the previous Government. It seems to me that some of the members of that previous Government should think twice before they attack in this sort of lusty manner.
So far as the first question is concerned, which is non-controversial, the Coal Board is obviously doing its best by new methods, especially in mechanised coal mining, to reduce the incidence of pneumoconiosis, but this illness still occurs. Obviously we must equalise the chances for people who have this risk with those who do not, and this can be done in many ways. For instance, in Europe it is done by early retirement, but there are other measures which can be taken.
My Lords, with reference to productivity, we have now an after-effect of the short-time working and strike. Instead of 120 million tons, production is running at about 113 million tons; a decline of 7 million tons, which is not the 25 per cent. quoted by the noble Lord. So far as financial terms are concerned, I do not think I have contributed any mystery words to this Statement. I should have thought commercial terms were used, normally speaking; that one covers the costs with an addition. Obviously, we again received from the previous Government a situation in which vast deficits 835 have been incurred by the nationalised industries. We are under tremendous inflationary pressure, and therefore normalisation of prices and financial returns has to be done with very great care, lest the inflationary spiral be accelerated. It has to be done with a certain amount of discretion.
I shall report to my right honourable friend what was said about Wales, especially about decentralisation of the Welsh coal mining industry. I should not have thought that at the moment that would be a useful measure, because obviously the peripheral coal mines have certain general problems. It would be better to have the flexibility of using the more prosperous mines in order to offset the peripheral mines' performance. I think I have dealt with all the questions.
§ LORD SHINWELL
My Lords, is the Minister aware that I, as one who has been associated politically with the mining industry over many years, welcome the Government's proposals, but that I regard the proposals as frightfully optimistic? Is he aware that target figures have been bandied about over many years but have seldom been achieved. The figure of 200 million tons suggested by the previous Chairman of the National Coal Board, Lord Robens, was never achieved the 140 million tons suggested by the Minister of Fuel and Power, and now 120 million tons, has not been achieved; now the Minister has used the figure of 150 million tons. Is my noble friend aware that one of the vital salient features of the problem is the difficulty of recruiting sufficient labour? Since I am on the question of sufficient labour, may I recall to my noble friend a suggestion he made to me when I was Minister of Fuel and Power in 1946, even in the early months if 1947, when there was the greatest difficulty in recruiting labour and there was a vast shortage of coal. He made the suggestion to me that we should recruit Italian labour. Is he still of that opinion?
§ LORD SLATER
My Lords, I am interested in the Statement of my noble friend in regard to this industry. All noble Lords will be aware that I come from the mining industry, that I spent 30 years of my life down below before 836 I became a Member of Parliament. I was interested in the observations made from the Front Bench opposite in regard to productivity. Work within a mine is not like work within a factory. When one is at the coal face and working, either with machines or by hewing, as it were, from the shoulder, one day production can go up and the next day, because of the nature of the seam from which the raw material is being extracted, that production can fall. So far as the men in the industry are concerned they are being aware of the fall in production simply because they do not like to see it. At one time they used to show the flag in regard to the target. My noble friend will be aware that it was the desire and the aspiration of the men coming out on to the pithead to see that they had reached the target for that week, and they were overjoyed that they had reached that target. The same spirit still emanates from the miner even at this present time. I was very sorry that the noble Lord should refer to the fall in production because of the increase in wages they had received in their application.
§ LORD SHEPHERD
My Lords, I am sorry to intervene. I was giving the noble Lord the benefit of the doubt in the light of the rather provocative remarks from the noble Lord on the Front Bench opposite. But I now suspect that the noble Lord is making a speech. When we have a Statement of this character we are permitted a few words of introduction with the object of putting a question. I should be grateful if my noble friend would put a question, recognising that I have in no sense intervened because what he is saying is not of very great value, but because I think in the interests of order and the progress of Business I ought to intervene.
§ LORD SLATER
My Lords, I am most grateful to the noble Lord, the Leader of the House, for pulling me up because it is true I was drifting into a speech. Is my noble friend in a position to say whether it was the intention of the previous Administration—and, after all, we are taking a Bill to-day that was supposed to have been brought forward by the previous Government—to accede to the request of the National Coal Board to proceed with the development of the Selby project?
§ LORD BALOGH
My Lords, my noble friend Lord Shinwell is, of course, right, that this is an optimistic evaluation, but it seems to me that after so much pessimism, which has caused very grave psychological difficulties in the pits, a little optimism is perhaps helpful. I do not think it is over-optimistic. If no investment took place, we should be running down the industry very rapidly, and obviously even if we could get our own oil supplies for our marginal energy needs this would be very costly in terms of foreign exchange and the balance of payments. So I think, on the whole, to aim at the 40 million tons capacity increase is not unreasonable. That capacity increase will, of course, be topped by a 5 million ton contribution by open cast. I should have thought that the 150 million tons is the demand for rather than the supply of coal in this Statement. So far as Italian labour is concerned, of course I am now some 30 years older and therefore 30 years less full of illusions.
§ LORD DAVIES OF LEEK
My Lords, may I ask the noble Lord whether it is absolutely certain that we shall go ahead with the Selby development? Secondly, is he aware that £600 million spent in the mining industry will give a greater return, with the satisfaction of safety to the environment, than £600 million invested in mythological nuclear reactors which have not yet had a prototype? Finally, on pneumoconiosis, is my noble friend aware that to draw young men into the industry first class treatment for the cure, or limitation, of the disease is necessary.
§ LORD BALOGH
My Lords, I apologise to my noble friend Lord Slater. I do not think that any Government are aware of the plans of the previous Government, and that is a good thing because one's asininities cannot be quoted against oneself. I do not think, at any rate in this country, we shall give up this useful system. I think at the moment recruitment has improved and there has been a drift back into the coal industry. One can only hope that with the restoration of confidence, and with a guarantee of a certain minimum demand for coal, this improvement will continue. I will not dispute with my noble friend Lord Davies of Leek about the importance of the elimination, or at least limitation, of the 838 illness which afflicts so many people in this industry. I do not think you can hope for wonderful results in a short time. This is an extraordinarily difficult problem. I can only assure noble Lords that the Government are doing their utmost to advance research and remedial measures.
Finally, I would say that the productivity scheme which is envisaged—and this answers my noble friend Lord Slater as well—will do the sort of things which he has experienced in previous periods and will stimulate the productivity and the performance of the industry.
§ LORD TAYLOR OF MANSFIELD
I have two points, my Lords. First of all, could the noble Lord say anything about recruitment, especially amongst juveniles, during the past twelve months? Secondly, on the question of pneumoconiosis, did he read the article in the Sunday Times last Sunday? Is he satisfied with the decisions which many of the pneumoconiosis panels are giving?
§ LORD BALOGH
My Lords, recruitment for the last six years has been at about 20,000 per annum; but the circumstances of the industry were very different at that time, the output having contracted sharply. The hope that we shall be able to recruit 28,000 I think will be justified. However, there is no possibility of giving any really convincing figures, because obviously up to this examination the whole background situation was so entirely different that these figures will not give us any really hopeful or even accurate indication for the future.
§ LORD TAYLOR OF MANSFIELD
My Lords, what about my second question, on the medical panels' decisions on pneumoconiosis? In the light of coroners' remarks on deaths for a long time some of us have been very alarmed about some of the decisions of the pneumoconiosis panels.
§ LORD BALOGH
My Lords, I am afraid that I cannot answer my noble friend. If he puts down a Question on that subject I shall obviously endeavour to give him satisfaction.
§ LORD SHEPHERD
My Lords, I wonder whether the House shares my view that I ought now to move the Motion, That this House do now again resolve itself into Committee on the Bill.
§ LORD SHEPHERD
My Lords, I have put the suggestion to the House. We have been on this matter now for twenty-seven minutes. I am aware that some noble Lords are concerned about the Selby position. I will see that they are communicated with very quickly, perhaps this afternoon, and then if they wish to proceed with the matter they will be able to do so, perhaps tomorrow. I hope my noble friends will accept that from me so that we may again resolve ourselves into Committee upon the Road Traffic Bill.