HL Deb 05 July 1977 vol 385 cc283-315

8.41 p.m.


My Lords, I beg to move that this Bill be now read a second time. It gives me very much pleasure to bring before your Lordships' House this important Bill which seeks to implement conclusions in the further tripartite report, Coal for the Future, which was published in February. The Bill provides the framework for the continued development of the industry over the next few years. First, it will provide the sinews for this development by giving legislative authority for the increasing borrowing which is needed to finance its capital investment. Secondly, it will establish a framework of grants to assist the industry in case it should be blown off course. For one thing we have, I hope, learned from the uncertainties and changes of the past is that we cannot allow our essential economic and industrial interests to be disturbed by short-term fluctuations. The Government stand ready to provide support if that should happen.

Thirdly, the Government are proposing to continue the social grants which help the industry to bear the burden of the past and to deal with the problems which inevitably arise through exhaustion of workings in an extractive industry. Fourthly, the Government propose to extend the powers of the industry in ways which will enable it to make the most effective use of its skills and resources and to promote new uses for coal.

Much of the past legislation on coal from the 1960s up to the Coal Industry Act 1973 had to do with an ailing industry which faced a future of decline. This Bill deals with an industry that, of course, still has problems. There are problems with coal stocks, problems that stem from productivity, and problems that result from a long history of under-investment. But the coal industry is now also an industry with a future. The history may be one of under-investment: the future is one of reinvestment. I shall come back to that in more detail, if I may, a little later, but let me say now that the investment at present being undertaken by the Coal Board must be seen as close to the minimum required for creating a coal industry with a long-term viable future. Whatever the arguments about an energy gap, I think most people will accept that we need, and shall need even more, a coal industry that is capable of playing an important part in meeting our energy requirements.

Turning to the clauses of the Bill, one of the most important provisions is of course Clause 1, which deals with the National Coal Board's borrowing powers. The present limits, set in the National Coal Board (Finance) Act 1976, are £1,100 million, which may be increased by order to £1,400 million. Clause I provides for these limits to be replaced by £1,800 million, capable of being increased by order on two occasions to £2,600 million. These higher limits are intended to cover the Board's borrowing requirements into the early 1980s. On present estimates, there is a reasonable likelihood that, up to the early 1980s, the Board's borrowings will be contained within the second limit of £2,200 million. But it is sensible and usual to provide some contingency margin above this.

The need for this substantial increase in borrowing limits stems principally from the scale of investment in production capacity that the Coal Board is undertaking in accordance with Plan for Coal. There are the big projects, of which Selby is so far the most notable, but there are also a great many smaller projects designed to extend the life of existing pits, to tap new reserves, to enhance efficiency, to raise productivity, to increase production and to improve quality.

During the years to which the Bill is addressed, Plan for Coal investment in these projects will continue at a high level between £300 million and £400 million at current price levels. Had there been any consistent policy of investment in the coal industry over the past 20 years—and I am not making a Party point here because I think all Governments are covered by this period—then the industry could itself have borne a greater share in funding this investment. But the coal industry was, until recently, an industry in decline. There was investment in mechanisation; but there was a minimum of investment in new, low cost, highly productive capacity. With Plan for Coal, the industry is almost starting from scratch. In many ways, in that it could not, and would not, shuffle off its responsibilities to those who worked in the less economic parts of the industry, it was starting from worse than scratch.

There is a further important point to bear in mind in considering the need for the industry to look to external borrowing for a substantial portion of the funds for investment. Many are the projects in Plan for Coal, particularly the major ones such as Selby, which, as I mentioned earlier, will take some years of planning and construction before they are providing the full return that they promise. We are fortunate in having enormous coal reserves, but we must face the fact that we cannot benefit from them without a great deal of further investment, and that investment cannot take place unless money is made available for it. I am glad to say that the industry itself plans to make a substantial contribution to the total funds needed, and has set itself a target of 50 per cent. self-financing over the next few years. However, a substantial part must also come from borrowing. This will not be wholly a charge on the National Loans Fund. Much will be funded abroad, both in Europe and elsewhere. Nearly half the Board's outstanding loans have come from foreign sources. It is anticipated that about half this year's requirements will also be met in this way.

I should like now, if I may, to describe the provisions in the Bill for payment of operating grants. There are four of these provisions. Clause 2 provides a power to promote the sale of coal to the electricity generating boards; Clause 3 provides a power to make grants towards the cost of stocking coal or coke; Clause 4 provides a power to make grants to help maintain capacity to produce coking coal; and Clause 8 provides a power to pay regional grants. There were provisions of a similar nature in the Coal Industry Act 1973. Powers still exist to pay stocking aid and coking coal grant, but they will expire next year.

Coal industries are, by their nature, inflexible, and the Government are not alone in deciding that they need powers to help their coal industry to cope with short-term fluctuations in external conditions. The European Community has recognised this by agreeing on the aids which it may be appropriate for Member Governments to provide to their coal industries. The coal industry has very high fixed costs. It has to pay its workers their guaranteed wage. If demand is low, there are no easy options such as cutting overtime because overtime is normally done for essential maintenance work or for special grades of coal. It makes little sense to close down pits and lose vital workers at a time when the industry faces a need for increased recruitment. We shall utilise the proposed powers only to the extent that is strictly necessary, particularly in view of the Government's concern to limit public expenditure.

Clause 3 revives a power in the Coal Industry Act 1973 to provide financial assistance for coal-burn. In certain circumstances, this could be a more appropriate power to use than that in Clause 2. For example, there may be difficulty in a certain area in coping with a further build-up of stocks. Like the power in Clause 2, it is not intended to be used continuously but as a means of dealing with temporary imbalances between supply and demand. Here again, I should like to emphasise that, in each case, we would require proof of the usefulness or the need for such a grant. Payments for assisted coal-burn were made under the 1973 Act only for the financial year 1973–74. The power in Clause 4 to make coking coal grants is one that the Government need to have in case help towards the maintenance of production capacity of blast-furnace coking coal proves necessary. The same power was provided for in the Coal Industry Act 1973. However, given the present relationship between coking coal production costs and prices, assistance of this kind is not presently seen as necessary.

The House will note that instead of a separate financial limit for each of the powers to be provided by Clauses 2, 3 and 4, the Bill proposes a combined, financial limit which is defined in Clause 5. The logic of this is that these three powers are to some extent alternative ways in which the Government may react to problems in the industry. Thus, the payment of grants to assist coal-burn would reduce stocks which might otherwise be the subject of a request for stocking aid. This approach permits a combined limit lower in amount than the sum of three separate limits.

In Clause 8 the fourth operating grant in the Bill is the power to make regional grants. This, too, is a power of the kind that was included in the Coal Industry Act 1973. However, it is still the case that a high proportion of the workforce, I believe 70 per cent., work in assisted areas of the country and the Board is maintaining a number of loss-making pits in areas of high unemployment.


My Lords, may I ask the Minister to set out at some time the areas of high unemployment to which he is referring?


If the noble Baroness will allow me first to elaborate on the Bill, I will deal with that a little later. As I was saying, it is still the case that a high proportion of the workforce, about 70 per cent., work in assisted areas of the country and the Board is maintaining a number of loss-making pits in areas of high unemployment. The Government consider that they should, in these circumstances, have the power to make grants to the Board for the purpose expressed in Clause 8(1)— … of assisting or enabling the Board to pay due regard to the needs of the assisted areas when planning and carrying out colliery activities". I come to the grants to be payable under Clauses 6 and 7 of the Bill. Although the scale of colliery closures is much less than it was in the mid-1960s, mining is an extractive industry and collieries still have to close as their reserves become exhausted. These closures tend to take place in the older coalfields in places where the chances of miners, and particularly elderly miners, being able to find new jobs are small. The Government think it right, therefore, to extend for a further period both the financial assistance to the Board towards the costs of redeploying displaced men and the payment of benefits to mineworkers who become redundant through colliery closures and cannot get other work. Clauses 6 and 7 therefore include powers to extend these arrangements. I will deal with the question of closures and redundancies when I wind up.

Clause 6 covers the payment of grants to assist the Board with payments they themselves have to make to redundant employees and to those who are redeployed within the industry. These grants were first paid to the Board under the Coal Industry Act 1965 and have been extended and amended from time to time. Under present legislation the powers will expire in March 1978. Clause 6 would extend them to March 1981 or, by order, to March 1982.

The Government thought it would be helpful at this stage to re-enact, without change, the relevant provisions of the 1964 Act. Accordingly, the various items which attract these grants are set out in Schedule 2 of the Bill. They cover such items as travelling and removal expenses and supplementation of earnings for men transferred to another pit, payments under the Redundancy Payments Act, compensation for loss of employment and superannuation prospects and early pensions for non-industrial staff. Provision is also made for assistance with recreation and welfare facilities and concessionary coal arrangements for redundant miners. The rate of these grants has for some years been at 50 per cent. of the Board's costs, and we propose to continue that rate.

I should like to stress that none of these arrangements is new. They have been in operation continuously since 1965. All we are doing now is seeking to extend them unchanged to the end of the 1980–81 financial year, or, by order, to the end of 1981–82. The same applies to Clause 7, which deals similarly with the payments which the Government themselves make to redundant mineworkers. The Coal Industry Act 1967 enabled a scheme to be made for payments to mineworkers who become redundant and the Redundant Mineworkers Payments Scheme was established by order in 1968. It has been extended from time to time and under present legislation is due to end in March 1978. Clause 7 extends the power to make such schemes until March 1981 or, by order, to March 1982; it simply re-enacts without further change the relevant section of the 1967 Act, as amended. Under the Redundant Mineworkers Payment Scheme the Government pay miners who become redundant between the ages of 55 and 65 about 90 per cent. of their previous take home pay for three years. Thereafter, and up to the age of 65, they pay them a weekly sum equivalent to the current rate of unemployment benefit. In addition, under Section 4 of the 1967 Act, they also receive their mineworkers pension paid prematurely. Men redundant between 35 and 55 receive lump sums which vary with their length of service, with a maximum of £1,250 for 25 or more years service.

The current annual cost to the Government of paying the grants under Clause 6 is about £13 million a year, and the cost of the Redundant Mineworkers Payments Scheme is about 17 million a year. These payments attract grants from the European Coal and Steel Community which amount to about £3 million a year. I hope that the House will agree that it is fitting that the Government should continue to assist the coal industry to bear the social costs of closures and redundancies to the extent proposed in the Bill.

I come now to Clause 9, the first of the Bill's clauses dealing with the Board's powers to carry on various activities. The National Coal Board has always been involved in chemical activities utilising the products of coal. Joint ventures have been established with other organisations, particularly in the field of chemicals derived from the crude tar and benzole produced by the coke ovens. Thus, in 1966, Coal Products entered into collaboration with the British Steel Corporation, through the medium of Staveley Chemicals Limited, in the refining and processing of crude benzoic from coking plants. Through Staveley Chemicals' partnership, with Conoco, in Vinatex Limited, NCB (Coal Products) Limited also has an interest in the production of PVC. Through its participation in these activities, the Coal Board has shown its concern to get the utmost value out of the products of coal. It is that same aim which underlies Clause 9. Research is already being conducted, in this and other countries, into the long-term use of coal as a chemical substitute for oil. As supplies of oil decline, there is bound to be a growing market for coal-based feedstocks in the chemical industry.

A partnership has been formed between Coal Products and BSC (Chemicals) which, if this clause is enacted, would be the vehicle for future joint petrochemical ventures, and might absorb activities with which the Board is already associated with BSC. Both NCB and BSC envisage co-operation between this joint partnership in oil and chemical companies in activities downstream of refining. NCB (Coal Products) has also set up a subsidiary, which is NCB (Hydrocarbons) Limited, which could be used as the vehicle for purchasing and getting oil refined, and in marketing oil products, some of which would be used in the chemical operations in which the Board is already involved.

The House will note the strong qualification in the second part of the first subsection of Clause 9—that activities relating to petroleum can be undertaken only if they can be seen to lead to eventual new uses of coal. It may be asked why this is so, and why the Board needs any additional powers. It already has the power under the 1946 Nationalisation Act to secure the efficient development of the coal-mining industry, and its functions under that Act include the carrying on of all such activities as may appear to the Board requisite, advantageous, or convenient in connection with its duties.

The reasons why the Government decided that legislation was needed are, first, that after careful consideration, there appeared to the Government to be some doubt about the adequacy of the Board's powers to carry on activities in the field of petrochemicals. Secondly, when the National Coal Board (Additional Powers) Act 1966, enabling the Board to search for, and exploit, oil under the North Sea, was before Parliament, the then Government gave an undertaking that if, at a later time, the Board wished to engage in petroleum refining and distribution, or in petrochemical refining and distribution, or in petrochemical manufacturing, the Government would come to the House again with further proposals. Clause 9 of the Bill honours that commitment, and gives the Board express powers in these fields.

Clause 10 of the Bill deals with another extension of the Board's powers. The Board has frequently found other minerals in the course of its normal coal-mining operations. Examples are anhydrite, gypsum, and the aggregates. We can expect further discoveries to be made as exploration for coal continues. The Board has a great store of mining expertise which is directed, under the Nationalisation Act, solely to the gaining of coal. This is, of course, the prime duty of the Coal Board, and the purpose for which it was set up. This clause in no way alters that prime duty. But the clause would recognise that the Board has the skills to mine other minerals, and it would enable it to do so when they are discovered in the course of carrying out its primary function. It seems sensible, I suggest, that the Board should not be restricted from taking advantage of such discoveries, and thus making use of its expertise in ways which will improve the profitability of the Board's total operations.

My Lords, I come now to Clause 11. During recent years the National Coal Board has become increasingly involved in international affairs, not only in collaboration and co-operation with the other coal producers in the European Coal and Steel Community, but through bilateral agreements and arrangements with a number of other countries with important coal industries, and through exchanges of technical information and the provision of consultancy services overseas. The Board has done this both in its own right and through its associated companies.

The value to the nation of the Board's activities lies not only in the foreign exchange they earn, but also in the possibilities which are offered for promoting the sale of United Kingdom mining machinery and equipment. This latter point has been noted by the NEDO sector Working Party looking at the mining machinery industry. It is anxious to encourage an expansion of the NCB's overseas activities because of the help the Board can give to our exports of mining equipment. The mining machinery industry has many pioneering developments to its credit. The Board and the machinery manufacturers will together be a potent combination for a promotion of exports of "know-how" and equipment.

The Board is the free world's largest coal-producing organisation, and it has established a high reputation on the world scene as an authority on modern mining methods. However, at present it operates at a disadvantage with its foreign competitors. This is because the range of activities which it is able to undertake under present legislation is limited, and does not extend to the searching for or mining of coal. Clause 11 seeks to remove this hindrance by allowing the Board to undertake overseas any activity which it can undertake in Great Britain. There is a safeguard in the clause in that the Secretary of State's written consent must first be given. There is another important safeguard. Where its proposed overseas activities require any capital expenditure or financial guarantees, the approval of the Treasury will first be required. There will be no question of the Board diverting an undue share of its attention to activities in other countries.

I need say only a very few words about Clause 12 of the Bill. Under current legislation the Board has to set up separate pension schemes for the employees of each of its subsidiaries. Clause 12 will enable it to avoid this. It will allow employees of its subsidiaries to be members of one or other of its two principal pension schemes, the Staff Superannuation Scheme for non-industrials and the Mineworkers' Pension Scheme for industrials.

My Lords, in conclusion I remind the House that this Bill is a comprehensive measure, and I need hardly underline its tremendous importance, as I said at the beginning of my speech. It is designed to provide the framework within which the coal industry in this country can be revitalised to develop one of our most important, and certainly our most plentiful, indigenous sources of energy. My Lords, I beg to move that this Bill be now read a second time.

Moved, That the Bill be now read 2a. —(Lord Strabolgi.)

9.5 p.m.

Viscount LONG

My Lords, I am extremely grateful to the noble Lord, Lord Strabolgi, for the detailed information he has given the House on this new Coal Industry Bill. This is my third such Bill. I think I have had one a year for the last three years; and of those three Bills this is, indeed, by far the most important that your Lordships have had to deal with. On previous Bills I have had the experience and the help of the noble Lord, Lord Balogh; of the noble Lord, Lord Lovell-Davis; of the ex-Leader of the House, Lord Shepherd, on an energy Bill last year, I believe; and of Lord Kirkhill. Now I have the privilege of listening to and working with the noble Lord, Lord Strabolgi.

My Lords, I will be very frank with your Lordships tonight. The hour is late, and I feel that a lot has been said already by the noble Lord. It would therefore be in order, I hope, if from these Benches, anyway, I cut my speech down to as little as possible and, if I might have your Lordships' indulgence, rather deal with the Bill at Committee stage. I think we shall need to look at the Bill, powerful as it is, at that stage, when we shall be able to obtain more information in regard to it.

As I have already said, this is an immensely important Bill for the coal industry. But not only is it important for the coal industry: it is important for the United Kingdom. It is also important for the EEC, as we are now a member of that group of countries. It is important that we have a thriving and efficient coal industry. I noticed just now what the noble Lord said about the fact that in past years—and I take his point; it was non-political—successive Governments have run down the coal industry, purely because it was found easier to buy oil. This Bill is also important to ensure the supply of coal to industry, especially to the electricity generating stations; to provide for the domestic market, which I shall come to later; and, above all, to enable us to export to wherever coal is needed in this energy-thirsty world.

This Bill provides for mines to be refurbished and modernised, and in so doing it will provide many jobs for years to come, both for those who live in the mining areas and have no jobs and for those who are already working in the mining industry. For this, the National Coal Board's borrowing powers are to be raised from the present level of £1,100 million to £1,800 million and then, by stages, to £2,600 million. Of course, that is to all of us a very large sum of money; but when we look at our energy programme we will see how urgently the money is required. I will elaborate a little further on this matter of finance when I come to the clauses in the Bill.

The energy problem does not concern only coal; there are equally urgent problems in connection with oil, gas and nuclear power stations. Energy resources are needed not only in the United Kingdom but also in the EEC, the US and throughout the entire world. From the United Kingdom's position, the Government must continue—and this is what this Bill is about—to invest finance into our energy programme so that oil countries such as the OPEC countries, or any others, who wish to hold us to ransom over any particular type of energy, will never be able to do that again. We learned, I hope, from what happened about three years ago when the rising price of oil from the OPEC countries created a world inflation problem; and we took some time to pull ourselves together on that.

My Lords, it is of great interest that the United Kingdom energy policy appears to be far in advance of that of the EEC and (I nearly go as far as to say) that of America. I noticed how worried was President Carter in elaborating on the importance of energy. Strange as it may seem, even America has its energy problems. I was equally interested to read in the Daily Telegraph of 2nd July a statement by Mr. G. Brunner, the EEC commissioner responsible for energy. Although I felt that in parts of his speech he might have been a little too outspoken on the depressing side of the EEC energy question, he had some kind words to say about the United Kingdom energy policy. This is what he said: Britain is the only country in the EEC which within the next few years could look forward to self-sufficiency in energy; and they might be tempted to think that the one thing they did not need was a European energy policy". As I have just said, we were blackmailed by the OPEC countries. Since then, all of us have got our heads down. The Conservative Government who were in Office when it happened, the present Government and their advisers, have all worked to a common aim to make certain that our energy programme progresses sufficiently to ensure that we shall never again meet such a problem from any other country.

From these Benches we agree that this Bill is an important one. But that does not mean that we should not look at it a little more closely. I find it a tragedy tonight that there are so few of us debating this most important subject. I should have liked the usual channels to push this debate into an earlier part of the day so that there could be more Members present debating it and listening. I do not apologise to noble Lords when I say that at this stage I intend to speak as briefly as possible, for I believe that the important discussions will take place at the Committee stage when more Members of this House will be present and aware of the importance of this Bill.

This Bill has enormous wings flying over enormous areas which we will have to look at. It seems to me that the National Coal Board are really going to poach on anybody's ground. In this connection I might refer your Lordships to Clauses 9, 10 and 11. Therefore, one must look at the suspicions that are being cast from those in the mineral industries. We must look at the clauses so that the National Coal Board, with its great experience, is not allowed to be able to take over and, indeed, upset any other industries with experience of mineral mining, and so on.

Clause 1 is a part of a Money Bill. I said that I wished we could go to Committee and I noticed that the noble Lord, Lord Strabolgi, nodded. There is little that we can do on the first part of the Bill, as it deals with finance. But we can see where the finance is to be spread. I said earlier that we were going to look at the figures, which seem enormous. The limit at the moment is £1,100 million. That is to be raised in the next two years to £1,800 million and then by stages to £2,600 million. We are given as the reasons for that, that certain mines need modernising to bring them up to present-day standards.

I welcome the noble Lord, Lord Taylor of Mansfield, to this debate. From his experience, he will be able to tell us a great deal and I am sure he will teach me some more about the mines. I believe that there are about 100 mines and that some of these are in a bad state and need modernising. One wonders if there is enough money to do all the work that is needed. We have a great opportunity to see one mine, Selby, coming into its own. The Selby mine is reputed to be the largest in Europe if not the world. Regarding its coming into production, there are one or two hitches over problems of the water table, but I will not ask the noble Lord about that at the moment. In addition the Vale of Belvoir is an equally large mine, and there has also been a discovery at Nottingham which is not so large. We have enormous potential reserves. There are 300 years of coal reserves in this country and I hope that this Bill will be part of the build-up for years to come.

The tragedy is the over-shadowing cloud of the problems of wages, production and difficulty in keeping harmony among the miners. I should like to congratulate Mr. Joseph Gormley, who seems to be having a tough fight to keep his union members together. While he has that fight on his hands, while he is trying to describe to them what their wages must or must not be, this House should do all in its power to congratulate him because things cannot be too pleasant for him. He has done a great deal for the mining industry.

While these clouds hang over the coal industry and arguments take place on wages, the production of coal has gone down steadily since the last pay claim. It appears that there must be some behind-the-scenes reason concerned with trying to keep that production going—as I said, it is going down. I wonder whether the noble Lord will be able to throw any light on whether the miners are considering keeping down production in order to obtain a better productivity scheme. It seems to me that there is something wrong there, and I wonder what is the underlying reason. There must be some reason, because they have had a wage rise, but it does not seem to be working. So, having read and seen that the industry, the National Coal Board, the management and unions have said that progress is disappointing, I presume that, when they say that, they mean that productivity is not reaching the required heights. I hope that, at the end of the day, on this Clause 1, we shall be able to see planning and efficiency, with the money going into it, so that we have a better industry. I should like to mention one further point: production was down by as much as 7 million tons last year; that is, per man-shift. I think that we ought to hear what the noble Lord can tell us about that when he tells us about the productivity scheme which I think is probably worrying them.

Looking again at investment, the most depressing part of the industry, as I see it, is the domestic side. Coming by rail from the West Country, I find it difficult to understand when I see new houses being built with no fireplaces and no chimneys. I may have mentioned this point earlier, but I believe that it is totally wrong that houses should be built today without fireplaces. If fireplaces were being put into new houses, the public would not find themselves held to ransom if there was a problem with electricity. They would be able to buy coal, so the coal industry would have an increased demand. I feel that there is something wrong there and I should like to see more domestic coal sold—although I must say that, unfortunately, the price has increased by 83½ per cent. and, therefore, people are probably not going to be able to afford it.

My Lords, I have dealt at some length with Clause 1. Referring to coal stocks, I fully understand the reasons for Clauses 2, 3 and 4. To hold such stocks one must have finance, and therefore this is part of the build-up of finance in connection with Clause 1.

I turn now to Clauses 9, 10 and 11. Clause 9 relates to activities concerned with petroleum. Of course, it is fully understood that coal produces a petrochemical and it is obvious that there must be new wording and new clauses in order that the National Coal Board can go into the petro-chemical industry. The join-up of the two companies should be useful not only for the United Kingdom but also in connection with exports. However, I have discovered one point here that may possibly be on the dangerous side and I should like it to be looked at again when we reach the Committee stage. I feel that the Coal Board should not need to go into the petrol filling-station world. They ought to keep themselves to petrochemicals. There is no mention of extending beyond these, but they could do so. The clause is rather loosely drafted, and it could be that the Board could go into the petro-chemical world, so I should like to look into that clause in Committee, because it needs further examination. However, I believe that the thinking behind it is sensible, and it states that if in the course of their work in exploration and experimentation, the National Coal Board discover other minerals, they should be empowered to extract them.

There are several bodies in the mineral world, other than the Coal Board. The noble Lord, Lord Strabolgi, mentioned some of the minerals that could be extracted from the ground. As I see it, there are aggregates, salt, potash and even cement, and I wonder whether Clause 10 is too loosely worded, and whether there could be a form of back-door nationalisation if the Coal Board went into other areas, pushing companies out of business. Near my home in Wiltshire there is a very large cement works, and if this were affected there would be disorganisation and higher costs. Furthermore, the experience of companies such as this would be lost.

At the moment, most of these companies are going through a bad time, which is partly due to the fact that local authorities are not building. So it could be unfair if the National Coal Board were able to go in when they know of the presence of a mineral. I am not saying that the National Coal Board do not already look for other minerals. But when companies have experience and have invested their money to get the minerals out, they should be left to carry on. Furthermore, there could be increased expense to the consumer if these companies were unable to continue. So that, as I said, I should like to go into Clause 10 in Committee.

Clause 11 deals with overseas activities. The National Coal Board, which are claimed to he the largest coal producers in the Western World, should be able in the national interest to use their expertise to the financial advantage of the United Kingdom. The noble Lord, Lord Strabolgi, mentioned exports of milling machinery and so on, which will bring in extra finance to the United Kingdom, and I can see good reason for Clause 11.

Like the noble Lord, Lord Strabolgi, I should like to end by saying that the lot of the miner is not the nicest one. It is an awful job. But in the mining industry we have the best engineering brains, we have the best material and we have the EEC looking very jealously at our coal industry, which could be second to none in Europe. Therefore, although from these Benches we shall look at certain clauses in Committee, we welcome the Bill. We shall help all we can to make it a good Bill and we shall try our best not to delay it unduly.

9.35 p.m.


My Lords, I should also like to thank the Minister, the noble Lord, Lord Strabolgi, for his cogent presentation of the Bill to your Lordships and to express from these Liberal Benches our warm support for the Bill. I personally welcome the Bill on two main grounds. First of all, it appears to be essentially a good Bill and with enlightened administration should ensure a prosperous mining industry for decades to come. The contemplated investment is, of course, massive. However, with proper accountability it is essential for the economy of the United Kingdom to proceed in this way both from a national point of view and also having regard to our position as a member of the European Economic Community. Secondly, I welcome the Bill on a more general ground because it gives this House one of its most infrequent opportunities to discuss important aspects of the National Coal Board and the activities of the mining industry generally. I shall look forward to the contribution to be made to this debate at this late hour by the noble Lord, Lord Taylor of Mansfield, who has great experience of National Coal Board matters.

My Lords, in connection with the National Coal Board I should like to draw your Lordships' attention to the observation of the Under-Secretary of State for Energy, Mr. Eadie, when speaking on the first day of the Committee stage in the other place. The relevant reference is the 22nd March, at column 53 of the Official Report. He said that he met a number of large oil industrialists in America who emphasised to him how they wished to have in America a body like the National Coal Board, with the monopoly powers that it has, for the purpose of improving the productivity of coal. I think that it is not irrelevant for me to say that I personally have also had the same experience when, by accident in New York a few months ago I met Sir Derek Ezra, the chairman of the National Coal Board. I was in America on other matters not concerned with coal, but I was able to entertain Sir Derek with some of my American friends who were most impressed with not only the activities of the National Coal Board in this country and overseas but with the patient work which Sir Derek himself was undertaking.

If I may again mention a personal matter, I have also been concerned as a member of the Patent Bar with aspects of the major technological breakthrough that has occurred in the industry during the past 15 or 20 years. I have often been down coalmines and at the face, and I have seen inventions adapted for the benefit of the miners and for increasing productivity. I have seen the new equipment introduced. I have also been associated with the remarkable research work undertaken by the National Coal Board and its associates in relation to the liquefaction of coal, pyrolisis and other matters which, at this late hour, I do not propose to mention. At times, my Lords, I have felt that perhaps the National Coal Board was not getting quite its money worth from the firms with which it was associated, but that is another matter and perhaps wholly irrelevant to this debate.

The first specific point that I wish to raise relates to Clause 6 which is concerned with grants in connection with "pit closures". The two words "pit closure" have a very sorrowful significance for many of us. Subsection (1) of Clause 6 states that grants will be made to assist in the redeployment of the manpower resources of the Board and the elimination of uneconomic colliery capacity. Subsection (2) of the clause states that the relevant expenditure of the Board is to be on the items indicated in Schedule 2.

I consider that the eight points raised in Schedule 2 as to the kind of expenditure which should be related to the closure of pits are inadequate. To those of us who have been associated from birth with mining conditions in Wales, the words "pit closure" give rise to memories of social tragedies in Welsh communities. Even a recent EEC Directive—No. R3128/76 to which I shall refer later—says that to return to the coal policy of the 1960s, with large-scale pit closures, would have not only adverse psychological effects but also disastrous effects on the energy programme of the EEC.

The Welsh countryside has been desecrated and the social fabric of communities has been destroyed through pit closures. In my view, pit closures should be postponed for as long as possible in order to give an opportunity for coal burning industries to be brought nearer to those pits—industries which can dispose of the poor quality coal which so often comes from these kinds of pits—and also to reduce the costs of coal transport.

I cannot resist mentioning to your Lordships, even at this late hour, the pamphlet which was produced in 1969 by the Welsh Liberal Party called Life to a Nation: An Economic Policy for Wales. In that pamphlet we advocated that pit closures should be postponed for 10 years and that industry should be phased into the district not only to re-employ the manpower which would be displaced from the closed pits but also to enable coal burning industries to be brought into the area. One of the parameters which occupies so vivid a place in the minds of the experts who have to decide on pit closures is the cost of coal transport from this kind of pit. In 1969, therefore, it seemed to the Welsh Liberal Party that the cost of coal transport could be greatly reduced by encouraging those industries which burn coal to come into the neighbourhood. Therefore I suggest that perhaps a further examination of Clause 6 and Schedule 2 should be made to find out whether or not, apart from the grants payable in respect of pits which are likely to be closed, there ought to be grants for industries which should be specifically encouraged to come to the area of the pits affected.

Another matter—a social one—which I should like the Minister to clarify is whether the Bill makes adequate provision for better allowances for miners who have already retired, and also for widows who live in the mining areas of Wales which I know so well. Clause 7 of the Bill deals fully with redundancy payments and the Minister has tonight explained this aspect of the Bill. In my view the needs of miners who have retired, often as a result of bad health due to their work in the industry, and the needs of the widows should be a prominent feature of the policy of grants in aid.

I now turn briefly to Clause 9, to which the noble Viscount, Lord Long, has referred. This is the clause which deals with the powers of the Board to carry on activities relating to petroleum. I shall be interested in the Minister's reply to some of the points raised by the noble Viscount. I have some reservations at present as to the scope of this clause, but I shall either await the observations of the Minister or raise the matter again in Committee.

Again, I should like to support what the noble Viscount, Lord Long, said in regard to Clause 10. I, too, have heard of the anxieties of the sand and gravel industry about the powers given under Clause 10 for the exploration activities of the Coal Board in relation to minerals. Here, again, at this late hour I do not propose to develop this point but will await the reply of the Minister. Clause 11 allows the National Coal Board in effect to do overseas what the Board does in the United Kingdom, and I welcome this aspect of the powers of the Board because it has a high international reputation both as to its equipment and its research and as a result the National Coal Board has very valuable assets in the way of technological expertise and know-how and I hope the Board is adequately staffed to exploit those valuable assets in the interests of the United Kingdom economy.

However, I would suggest that the Board should be careful not to become over enthusiastic as to its powers to enter into international competition abroad because in my view the National Coal Board should not get involved with activities involving a high degree of commercialisation. In other words, it should not involve itself in risky financial enterprises abroad, however attractive they may appear at first. It may be that some modification of the wording of Clause 11 is essential towards this end.

Finally, I should like to refer briefly to the consideration which has been given in the past few months to the communications issued by the EEC in regard to the European coal industry and which are at present under the active consideration of the Sub-Committee F of your Lordships' Select Committee on the European Communities, of which I have the honour to be a member. The Commission's communication R3128/76 of 14th December 1976, to which I have referred, expressed concern that the productive capacity of coal in the EEC has been endangered by the rising level of imports of cheap coal from countries such as Poland and South Africa, that is from countries outside the EEC.

A further communication by the Commission entitled the Community Coal Market Situation No. 478/77 dated 25th February 1977 has emphasised, first the need to maintain and possibly increase the consumption of Community coal, and, secondly, that the Community's production target is endangered by uncertainties arising from the increased recourse to imports from third countries and the resulting increase by Community producers of their stocks. I do not know whether the Minister is able tonight to give any indication as to the policy of the National Coal Board, in the context perhaps of the EEC, as to large stocking of coal, the import of cheap coal into this country, and whether he is in a position to say anything about the policy of the Government as to the export of coal from this country by the National Coal Board to the EEC to make up for the deficiency of coal being imported, if the imports to the EEC are in any way cancelled or descreased.

In conclusion, may I again welcome this Bill, concerned as it is with creating a framework for the National Coal Board, the coal industry and the National Union of Mineworkers, not only for the benefit of the coal industry but also for the benefit of men and women in those areas which in the past have relied on coal as the main part of their social heritage.

9.52 p.m.


My Lords, the day is far spent, the hour is getting late, and I understand there is another item on the Order Paper; therefore, I propose to be very brief indeed. A month ago—the day before the Whitsun Recess as a matter of fact—we had a very informative, knowledgeable debate on the general question of energy as far as it affects this country. The Bill before us tonight particularises, as its title indicates, the coal industry. One purpose has already been explained by the Minister, and supported by the noble Viscount, Lord Long, and the noble Lord, Lord Lloyd of Kilgerran; it is to raise the ceiling of the borrowing powers of the National Coal Board. I think that is essential. The Bill has been given a general welcome, not only in this debate tonight, but in another place during the Second Reading, and also in the fairly extensive debates that took place during the 11 sittings of the Committee on the Bill. As Lord Long indicated, there will be ample opportunity for dealing with some of the detailed points that he himself raised in his speech.

I should like, in the brief time that is at my disposal, to confine myself to three main points. The first is that it is my belief that this Bill is not only an important but a necessary Bill in the raising of the borrowing powers of the NCB, to enable it to reach the target, I think of about 120 million tons by 1985, and progressively increasing up to the year 2000. It is its hope and its wish, and this legislation is to provide the opportunity for the targets of global output from the deep mines of Britain to be reached.

It is obvious to all of us that to provide facilities for improving our energy resources needs a great amount of capital. It does not matter whether those facilities are in the form of a power station, a nuclear plant or even a new coalmine. In these days when prices are not stable but are subject to the hideous monster of inflation, it is necessary, if the National Coal Board is to do its job, that the ceiling of the borrowing powers, which I believe was fixed in 1973, should be considerably raised. The main purpose of the Bill is to enable the NCB, in co-operation with the miners' union, progressively to achieve the target of more global production from the deep pits of Britain.

My noble friend the Minister made a statement about the legislation that has been enacted since, for instance, the 1960s. Compared with the legislation for the coal industry up to the time of the Bill, this Bill is really refreshing and something for which we should be grateful. During the past 15 or 16 years legislation has been concerned with pit closures and redundancies. Without going into a great deal of detail we can say that, as a result of the success which attended the efforts of the oil lobby both inside and outside Parliament, the coal industry was driven into the wilderness. This Bill gives some hope of a resuscitation—a kind of resurrection. Without any reservations I welcome this Bill.

The noble Viscount, Lord Long, referred to the fact that I might know the capital expenditure for existing pits. I have some figures here. There has been a considerable increase in the figure of capital expenditure in order to improve the mines both technically and mechanically. Perhaps I may quote just one. I am sorry that I cannot give the noble Viscount the exact numbers of the pits. I can give the amount of capital that it is proposed to infuse into pits which, according to the NCB, are expected to have a long life. In round figures, in 1977–78 there will be an infusion into existing mines of about £200 million of capital.

That reminds me of the poor technical ability that existed prior to nationalisation. I recall very well the report that was drawn up during the war; it was known as the Reid Report. As a condemnation of how the pits of Britain had been neglected, well I really have not language to describe it. I say, incidentally, on that particular point, that the output per man-shift before nationalisation was, I think, only 21 cwts.; it is now 43 cwts. So in the period of 30 years there has been an increase in output per man-shift of at least 100 per cent. At some stage saturation point will be reached. I doubt whether we have reached that point at the moment, but I want to say in reply to the noble Viscount, Lord Long, that the capital that has been invested in the pits of Britain during the last 30 years has been justified, and that the investment has shown good results.

I have one more minute. I gave myself ten minutes, but this is such a fascinating subject, and I want to ask two questions of the Minister who is to reply. First, seeing that planning consent has been given for what is described as the rich Selby coalfield—which is adjacent to where my noble friend Lord Popplewell lives—can the Minister tell us whether a start has been made? What progress has taken place up to the present time?

I do not know whether the second question is sub judice; I do not think it will be in the form I am going to put it. It is about the proposed Vale of Belvoir coalfield. Could my noble friend tell me when planning permission is likely to be applied for? If all one reads about the Vale of Belvoir is true, there is likely to be resentment and strong opposition. The only reason I mention that is because these planning applications take so long and so much money that by the time the operation is started of sinking a new pit, because of inflation the costs have increased again. I should like my noble friend to tell me, if he can, whether planning permission has been applied for so far as the Vale of Belvoir is concerned.

My last words are these: I wish this Bill every success. Without reservation I give it my wholehearted support. I hope that in the immediate years ahead the ideas and the planning that the Coal Board has in mind will fructify, and, as a result of what Parliament is doing in providing the necessary financial facility, that the object of an increased global output will be achieved.

10.5 p.m.


My Lords, I apologise for trespassing on the time of the House, but I promise to be brief. This is one of the most important Bills to come before the British Parliament and I find it ridiculous that we should be talking about a sum of money that is chicken feed compared with what we paid for Concorde so that businessmen could get to America a few hours faster simply to spend a few hours longer at the airport before going about their business.

We are tonight discussing one of the most vital industries concerned with Britain's future destiny, yet we are doing so at the tailend of the day's business in this House. I am anxious not to repeat what has been said in the previous excellent speeches; I do not say that with pomposity but, I hope, with understanding. I rather sympathise with my noble friend Lord Strabolgi in having at this late hour to answer our questions, and I fear that I must add to his burden by pointing out a number of factors.

For goodness sake let us compare the realities of coal production! When I was a kiddie there were 1¼ million people cutting coal; today 250,000 miners are supporting the entire pyramid of coal energy in Britain. When I was a child there were 60 pits in the Rhondda Valley; today there are just over 100 in the whole of Britain and there are perhaps two pits working in the Rhondda Valley. As my noble friend Lord Taylor of Mansfield pointed out, under nationalisation we have production increased by 100 per cent., but we have six times fewer miners working in the pits than we had in the 1914 to 1920 era. Unfortunately, too many people have passed by coal and have been taken in and conned by the oil lobby, just as we were conned over the Common Market.

As noble Lords may know, I keep cuttings and this morning I took from my cuttings file a piece that appeared in New Society on 8th April 1971. It said that people would lose £7 a week from their paypackets unless they voted for Britain to join the Common Market. In my view it was mendacious, but I do not want to talk about coal with mendacity. I want coal to have the opportunity of developing in a modern way and, as the noble Lord who spoke for the Liberal Party, Lord Lloyd of Kilgerran, pointed out, there are plenty of caveats in Schedule 2 to prevent wild spending, and when we reach the Committee stage I hope we will do something to improve this excellent Bill. I want the mining industry to have the right—when, for example, exploring in Selby—to develop further. Suppose they come across aluminium, platinum or even sand.


Or gold, my Lords.


Indeed, why not gold, my Lords? There is nothing funny about that; there is gold in Wales. Who will have the right to exploit it? Will the National Coal Board be told, "A few jolly boys from private enterprise are coming in to work this sand, aluminium or whatever it might be?" I suppose it would be bauxite there. In other words, my fear is that we shall be corking on my old formula, "Socialise losses but privatise profits".

In many walks of life we are working in terms of a new society, and let us not forget that even America does not keep going on private enterprise alone. Wide areas of private enterprise there must be subsidised, from the Tennessee Valley scheme to many of their modern coal mines in Virginia. In Pennsylvania, where I am a Freeman of the anthracite town of Wilkesboro, the pits are subsidised to this day. If we want miners we must pay them and they must be given incentives, but if taxation reaches such a pitch that, when they have been working for four days and their wives have been working in the pottery or lace industries or in local ancillary industries in the valleys, they cannot make ends meet, we will not get men to cut coal. Some noble Lords talk about cutting coal as though it were like working in a factory.

Viscount LONG

Nobody has suggested that, my Lords.


My Lords, a pit cannot be run like a factory. The further one goes from the pit bottom the dearer it is to cut the coal. It is all very well asking for increased productivity, but productivity in a pit cannot be increased like one would polish chromium benches or improve the heat and light in a factory. In the pits one is dependent on nature in the raw and the further out one has to go the more difficult it becomes to obtain the raw material, the coal, and that applies to seams from 10 inches to perhaps 10 yards thick in places. Consequently, in the mining industry you cannot talk flippantly about productivity, as you can in other types of factory production.

I turn now to a matter regarding hospitals. I think that there must be provision for a grant here. When we talk of research, my Lords, we should remember that some of the finest research in medicine has been carried out by sons of miners who have become doctors, surgeons, physiotherapists or have undertaken other medical work ancillary to the mining industry. In the field of pneumoconiosis the British mining industry was top. I took myself to China, to the pits in Manchuria, with documentation in the form of films taken in Cardiff and other places regarding pneumoconiosis in miners. I want to see in the Bill provision for a grant for the hospitals in the mining areas, so that there can be the most modern equipment for men who have been mangled in the mining industry, and in the fishing industry, which is also a terrible industry in which to work.

I said that I would not keep your Lordships very long. I hope that I will get the chance to put down some Amendments for the Committee stage. I believe that we must think deeply about our system of taxation. I have been talking here quietly to the noble Lord, Lord Kagan, who is an experienced industrialist. Once there is a certain pitch of taxation—one must not blame only the miners; it also involves the man in the street—one is killing the goose that lays the golden egg. A formula must be found that will lead to productivity and which will benefit the men—whether one calls them trade unionists, or anything else—in their struggle for greater production. Otherwise, with wives working today, a three day week, or a four day week, will be all that the miner will give, and it will not be because he is an evil man. It will be because he wants to live longer, and he wants to get the opportunity of a little more fresh air. So his pits must be improved, as well as his hospitals and other health facilities.

What about the question of houses without chimneys. That arose because we were daft enough to be "conned" by the oil lobby and the electricity lobby—the most expensive forms of fuel. I have spoken for seven minutes—that is two minutes longer than I intended. What a pathetic little debate this has been. I mean that in terms of the time given to it, not in terms of the quality of the speeches, apart from mine. I hope that at Committee and Report stages we will treat the Bill with the dignity that it deserves.

10.13 p.m.


My Lords, so far as I am concerned, my noble friend Lord Davies of Leek cannot speak a moment too long, and I am sure that all your Lordships will agree with me. I also agree with my noble friend Lord Davies, and other noble Lords who have spoken, that this is an extremely important Bill. Not many noble Lords have taken part in the debate. Nevertheless, what it has lacked in quantity, I think it has made up for in quality. It has been a most notable debate, with very valuable contributions from the noble Viscount, Lord Long, from the Opposition Front Bench, from the noble Lord, Lord Lloyd of Kilgerran, for the Liberals, and from my noble friend Lord Taylor of Mansfield, who speaks with unrivalled experience of the mining industry, as well as from my other noble friend Lord Davies.

I shall not speak for too long because, as the noble Viscount said, we are to have a Committee stage, but it is my duty, and it is the least that I can do for this important industry, to do my best to answer the various questions which have been raised. I shall try to do this as briefly as possible. I should like to deal first with my noble friend Lord Taylor of Mansfield, who raised the question of Selby. The initial work has already started, and is under way. I think that one cannot underestimate the importance of this seam. Selby will produce 10 million tons of high quality, clean, electricity coal a year, and its productivity is expected to be at least four, and maybe five times, the present national average. But a mine such as Selby cannot be developed in a matter of two or three, or even five, years. It is an enormous project which requires careful examination by the authorities concerned with planning and, of course, our environment, and which calls for a very high order of planning and organisation on the part of the Coal Board and the many construction and equipment firms involved. It will take 10 years before the mine comes into full production, so it will be 10 years before we begin to reap the full benefit from the investment; but it will be an investment that is well worth while.

My Lords, my noble friend Lord Taylor also asked about Belvoir. The reserves under the Vale of Belvoir and East Leicestershire represent the biggest single discovery in energy terms in the United Kingdom. The area in which the 500 million tons of reserves lie covers 90 square miles between Nottingham, Grantham and Melton Mowbray. There are six main seams in depths ranging from 1,300 to nearly 3,000 feet. The present position is that the Board, which made a preliminary announcement on progress in January, is still considering the feasibility studies and the possible ways of developing the reserves. The Board is expected to make a further progress report on the 12th July.

My Lords, the noble Viscount, Lord Long, asked me a number of questions. He asked how we can explain the lower output.


My Lords, before my noble friend leaves Belvoir, I know that in some influential quarters there is concern or apprehension (I could put it in that way) that planning procedures may be changed. Can the Minister say anything about that in a few sentences?


My Lords, I do not think that we have yet reached that stage. I think that we ought to await the report of the Coal Board. This is a very complicated question, as my noble friend, I know, would be the first to appreciate. There have been environmental matters raised as well. I think I would rather not say any more about Belvoir beyond emphasising its tremendous potentiality at this stage.

My Lords, I was just about to answer the noble Viscount on the question of lower output and production. It is true that present levels of productivity are lower than they were a year ago. In the financial year ending 31st March, 1977, colliery production was only 106 million tons, compared with 112 million tons the previous year. Although there is this recent decline, it is worth bearing in mind that overall levels of productivity have more than doubled during the period since the war, while face productivity has almost trebled. There are a number of factors at work in the decline. Among those identified earlier this year by the Coal Board and the unions are adverse geology, a slightly higher rate of absenteeism, inadequate manning of coal faces and the effect on morale of pithead stocks of coal. The unions fully recognise the need for improvement, and are giving real co-operation to the National Coal Board in trying to improve matters. A powerful team, led by a Board member, is at present touring the coalfields to study the problem and ways of dealing with it. The National Coal Board believe that an effective incentive scheme would make a substantial difference to the performance of the coal industry. It is therefore particularly welcome that the National Union of Mineworkers is seriously considering this question. The implementation of such a scheme must, however, await a decision to allow productivity schemes under the pay policy.

The noble Viscount also asked whether the National Coal Board was planning to take over various small companies. I can confirm that the National Coal Board has no present plans to take over other companies in the course of carrying out petrochemical activities or of mining other minerals than coal. So far as petrochemical operations are concerned, the Board, through its subsidiaries, will be co-operating with BSC (Chemicals) and with companies in the oil and chemical industries. So far as other minerals are concerned, the Board has not yet decided precisely how it would operate. It already has a Minestone Executive which deals mainly in colliery spoil but it might well decide to operate through the NCB's subsidiary, NCB (Ancillaries) Limited.

The noble Viscount also asked about petrol stations. I can confirm that the NCB has no intention of disposing of any of the products of its petrochemical operations on the retail market. Thus, there is no question of the NCB setting up its own petrol stations. The noble Lord, Lord Lloyd of Kilgerran, and the noble Viscount raised the question of the sand and gravel industry. I am aware that firms in the bulk minerals industry have expressed concern about Clause 10. However, there have been discussions between the National Coal Board and representatives of the industry. The Coal Board has assured them that the Board has no present plans for expanding into the bulk mineral business. Clause 10 would not give the Board any power to take over existing gravel pits or any other mineral workings. It might be within the scope of the clause for the Board to purchase a working as a result of a mutual agreement with a company. Such an agreement would be entirely voluntary so far as the company was concerned.

The noble Baroness, Lady Ward, asked about areas of high unemployment. Examples of these areas where the NCB maintains pits are South Wales, Scotland, North-East England, and the North-West. The noble Lord, Lord Lloyd of Kilgerran, made an interesting suggestion when he suggested that coal-burning industries should be moved nearer to collieries when there was a plan to close them. There are instances of this; for example, the concentration of large power stations in the Trent Valley and the aluminium smelter and associated power station at Lynmouth in Northumberland. But there are some obvious difficulties in the way of promoting action to this end on a wide scale. Pit workings become exhausted and closures are therefore inevitable. Dislocation of industry and heavy costs might be involved in promoting any significant movement of industry to the coalfields.

The noble Lord, Lord Lloyd, also asked about Clause 6. The eight types of expenditure set out in Schedule 2 which may qualify for grant have been unchanged ever since grants in connection with pit closures were first authorised in the 1965 Coal Industry Act. Schedule 2 merely repeats the wording—word for word—of the eight classes of expenditure set out in Section 3 of the 1965 Act. They cover all the major types of expenditure that arise in this field.

With regard to the very important question that the noble Lord, Lord Lloyd, raised about retired miners, retired mineworkers with appropriate service receive a basic industry pension of £5.23 a week. This is the present rate. It was increased to take account of the increased cost of living last autumn. Widows receive an appropriate part pension. The Government contribute £28.2 million a year towards the cost of these pensions in respect of men who retired before April 1975.

The noble Lord, Lord Lloyd of Kilgerran, asked me about the expertise of the National Coal Board. The National Coal Board has a worldwide reputation for technical expertise and can be relied upon not to enter rashly upon overseas activities, although with underground mining there must always be some risk because all the problems that occur in nature cannot be foreseen or identified in advance. Any project that requires capital expenditure would also, I can confirm, require Treasury authority.

The noble Lord asked lastly about the imports from Third countries. Imports from Third countries into the European Community have been increasing of recent years at the expense of Community production. The Commission produced a paper on this for the Ministerial Energy Council in March. As a result, it was agreed to set up a system of monitoring imports, and that is now in course of preparation. We have been losing no opportunity of drawing attention to the potential dangers of allowing community coal production capacity to be eroded in this way. I am glad to say that we have no cheap coal import problem in the United Kingdom. My Lords, I should like in conclusion to thank all noble Lords for their most valuable contributions which we will note and read carefully before our Committee. I look forward to the next stage of the Bill with eager interest.

On Question, Bill read 2a, and committed to a Committee of the Whole House.