The Coal Industry

HL Deb 17 February 1981 vol 417 cc566-73

3.38 p.m.

The Earl of Gowrie

My Lords, it might be convenient to your Lordships if I now repeat a Statement on the coal industry being made in another place by my right honourable friend the Secretary of State for Energy. My right honourable friend's Statement is as follows:

"With permission, I should like to make a Statement about recent events in the coal industry.

"The National Coal Board saw the National Executives of the three mining unions last Tuesday, 10th February. Following that meeting, Sir Derek Ezra suggested to me, on behalf of the board and the three mining unions, an early tripartite meeting of the Government, the board and the unions. I was very glad to agree and had planned a meeting next Monday, which was convenient to all parties. It became clear from contacts earlier today with both sides of the industry, however, that they would prefer a preliminary meeting tomorrow. This will enable the unions to state their case at the earliest opportunity. I have gladly agreed to this.

"As soon as I have been able to consider what is said tomorrow, I will wish to convey the Government's reaction to the board and to the unions. I will therefore propose, at tomorrow's meeting, there should be a further meeting between the Government, the board and the unions for this purpose next week.

"At this stage, I would like to make this point. The long-term future of the industry, if it can contain its costs and increase its efficiency, is very bright. It is acknowledged all over the world that coal will have to meet an increasing proportion of our energy needs as the price of other fossil fuels soars. The Government have continued to provide massive funds for investment in new and modern capacity. In 1980–81 the board's investment programme will have totalled some £800 million.

"The policy that the Government are pursuing is designed to maximise job opportunities in the long run—because that is what investing in new capacity means. We are investing today in jobs for the future."

My Lords, that ends my right honourable friend's Statement.

3.40 p.m.

Lord Strabolgi

My Lords, we are grateful to the noble Earl for repeating the Statement which has been made in another place. We on this side of the House are very glad that the Secretary of State has now agreed to meet with the National Coal Board and the National Union of Mineworkers tomorrow for a preliminary meeting. To have deferred a meeting until next Monday, which understand was the original intention of the noble Earl's right honourable friend, would have been far too leisurely. But why did the Secretary of State not meet the NCB and the NUM last week? At least then he could have attempted to avert what is becoming a worsening situation. I hope that the situation will improve, but if it does not I must ask the Government what the position is regarding coal stocks.

With regard to closures in general, the National Union of Mineworkers has negotiated the closure of 40 pits since the 1974 strike, and the union has always accepted that there must be closures. What is the reason for their present attitude? Have they become exasperated by the Government's present attitude and policy? The miners claim that no closures would be necessary if the imports of 8 million tonnes were halted. Surely it is insane economics to import coal and close down mines in Britain. I understand that none of the Western European coal-producing countries imports coal; and, moreover, Belgium, West Germany, Poland and France all subsidise their coal industries. Will the Government consider amending the 1980 Coal Industry Act, which phased out the subsidies over the next three years?

Due partly to the recession, my Lords, but, of course, mainly to the Government's economic policies, the demand for coal has dropped. Is it true that 10 million tonnes of capacity will have to be closed to take account of falling demand, which is due to the general rundown of industry throughout the country as a result of the Government's misguided policies? Coal output in December was the highest for five years, and productivity increased by 3 per cent. on a year ago. I think the miners have done a splendid job. But, here again, the Coal Board have also been exporting, but they have been jeopardised by the Government's policies. For example, coal exports nearly doubled last year to 4 million tonnes, but this export was not so profitable as it might have been because of the high exchange rate for sterling—again the result of the Government's policies. How can the Government say that they are investing in jobs for the future? My Lords, in this country we are blessed with richer coal deposits than is any other country of our size in the world, but this great natural heritage is at the mercy of the Government's policy of short-term monetary fanaticism.

3.45 p.m.

Lord Rochester

My Lords, we, too, are grateful to the noble Earl for having repeated this Statement, and for its constructive nature, if I may put it that way. We are in a grave situation, and we on these Benches are most anxious to say nothing that would make the situation any more serious. I shall therefore be very brief indeed. The meetings arranged between the Government, the National Coal Board and the National Union of Mineworkers are clearly of crucial importance, and we are very glad to hear that there is to be a preliminary meeting tomorrow.

The only question that I should like to ask the noble Earl is really a rhetorical question. Is he aware that in industrial disputes such as this one we attach the greatest importance to the need to observe negotiating procedures, including internal union procedures such as those that apply in the case of the NUM? It would not be helpful, I think, to spell those out. I should simply like, on that point, strongly to support the plea of Mr. Joe Gormley that no precipitate action be taken.

The Earl of Gowrie

My Lords, perhaps I could answer the two Front Bench speakers first of all. I very much welcome the extremely responsible reception of my right honourable friend's Statement by the noble Lord, Lord Rochester—I thought rather more responsible, if I may say so, than that from the noble Lord, Lord Strabolgi, who talked about "short-term monetary fanaticism". An investment of £832 million of public money this year and £886 million of public money planned for the forthcoming year does not seem very fanatical to me; and the noble Lord is well aware, as a member of previous Labour Governments, that between 1960 and 1970 40 pits a year were declining or running down and were being closed; that in the new energy situation this slowed somewhat, but that in an extractive industry the end of pits is always going to be a fact of life. The important thing is to recognise that that has always been accepted by both sides of the coal industry, and what is important is to get the timing and the terms and conditions of any closures absolutely right. That is why my right honourable friend is agreeing to do all he can to ease the present situation and to see that the timing is got right.

Lord Blyton

My Lords, is the Minister aware that there is terrific bitterness in the coalfields at the present situation? In the 1950s we experienced a cheap coal/oil lobby that closed nearly 150 pits with the loss of the jobs of 500,000 men. Then we were urged to produce coal to ease the situation in the industry, and our men responded. What they say today is this:"While the Government import 10 million tonnes, we produce coal for it to lie on the ground, and so put ourselves out of a job". What I should like to say to the Minister in the present situation, in all seriousness and as a member of the NUM, is this. The executive meeting takes place on Thursday. I cannot see it avoided now that a ballot is taken among the men on this issue, and I would remind the Minister of this. In 1921 we had a triple alliance of unions, and that led up to the 1926 General Strike. Today we have a triple alliance of the important unions on this issue. Be careful you do not travel the road again towards a trade union general strike!

The Earl of Gowrie

My Lords, if I may I will just answer the noble Lord. I am aware, of course, of there being strong feeling in the coal industry, though, as my right honourable friend's Statement, which I repeated, said, the future of this industry is extremely bright. That is one of the reasons why the Government have been committing large sums of public money to investment in the industry. But, of course, no industry in our country can altogether be isolated from upturns and downturns in economic fortune, and at the moment there is, as noble Lords have made clear, surplus capacity in the industry. But I am confident that we can get things on to a smoother keel in terms of starts and stops where the industry is concerned, and I will take what the noble Lord has said most carefully to heart.

Lord Taylor of Mansfield

My Lords, is the noble Earl aware that immediately after the executive meeting of the NUM to which he referred in the Statement, which took place last week, there was a joint application to the Minister for Energy that they should hold a tripartite meeting—the Energy Minister, representatives of the National Coal Board and representatives of the National Union of Mineworkers? It must have been known to the Government that there was increasing anxiety in the coalfields about closures of pits. As the New Standard headlined this afternoon:"Downing Street dithers". Until the Statement today, the latest information we had was that the meeting would be held next Monday. This is an urgent and very dangerous situation. At the least, nothing ought to have stood in the way of an early meeting being called.

My question to the noble Earl is this: Can he tell us why there was such a long delay in a situation of this kind?—when the application by the joint bodies had been made to the Energy Minister and was delayed and put off until after the executive meeting this coming Thursday, when the question of a ballot will be ventilated. May I say that I agree with my noble friend Lord Blyton that the situation in the coalfields is very serious. I have not known a national strike take place since 1908 without a ballot being taken with a certain percentage of voters being in favour of a stoppage of work. Now the situation appears to be quite out of hand. On the news at one o'clock, the Kent coalfield comes out tomorrow, and Derbyshire miners have taken a decision today at their council meeting that they will strike as from next Monday. Here we have this delay and dithering on the part of the Government in such a serious situation as this. Can the Minister tell us why originally the meeting was postponed until next Monday?

The Earl of Gowrie

My Lords, I cannot accept charges of dither in this connection at all. The fundamental issues are between the National Union of Mineworkers and the National Coal Board. The Government have acted as bankers (if you like) with very considerable funds for future investment in this important industry. When it was clear that both sides wished to see the Government, the Government facilitated a meeting. Next Monday was a convenient time for all, but the union decided that they would sooner have a preliminary meeting as well, whereupon the Government acceded to their request. That is not dither. It seems to me to be good manners.

Lord Orr-Ewing

My Lords, is my noble friend aware that this drawing together and the announcement by the National Coal Board, which may seem now to be unwise, was specifically requested by the National Union of Mineworkers and the other trade unions? Is it not a fact that always, every year, a number of small uneconomic mines are phased out? Is it not also a fact that in the 13 mines which are the subject of the present announcement the number of people affected is relatively small? Could my noble friend tell us how many of the miners who will be declared redundant for those mines have been offered alternative employment in nearby mines?

The Earl of Gowrie

My Lords, I agree with what my noble friend has said in that there has been a steady running down of uneconomic pits and, as I think has been said on all sides of the House, this is nothing new in an industry with finite physical resources. As to the question of the existing closures or existing loss-makers, I say to my noble friend that I think it would be wrong for me to anticipate any discussions that might be had as a result of the meeting which I announced in the repeated Statement.

Lord Shinwell

My Lords, would it not have been a useful gesture on the part of the Government, in order to prevent what might be regarded as precipitate action taken by the miners in South Wales and elsewhere, if the Government had given an order that the import of coal from America and elsewhere should cease for the time being? That would have been a very useful gesture. May I ask the noble Earl whether, when he speaks about funding vast sums of money into the industry, he is aware for what reason it has been pumped in?—not in order to increase wages! High wages could be made by stockpiling vast quantities of coal which we may require. The money has been used for the purpose of development in order to ensure a more prosperous future for the industry and for our general industries.

The other question I want to ask is this. It is all very well talking about the Government agreeing that both sides should meet; but is there any truth in the report which appears in the press that the Prime Minister has already declared that she has no intention of intervening in this dispute? Does she realise what she is up against? Does she not realise that this is not a tuppenny ha'penny dispute? Does she not realise that the imminence of such a dispute must be obvious to every person in the country—and certainly to politicians in this House and the other place? Therefore the Government should have intervened at once, as some of us had to do in similar circumstances.

I had experience in 1921, which was referred to by my noble friend Lord Blyton, when there was talk of a dispute in the industry when Ramsay Macdonald asked me, as Secretary for Mines, to intervene at once, which I did. As a result, wages were increased; but I agree it was not because of any achievement on my part, but because we were selling more coal. We took the circumstances into account. Why do not the Government recognise, irrespective of orthodox principles and all the rest of it, that we cannot afford that sort of thing at the present time? Why do they not intervene, take a hand in the game, in order to prevent a vast dispute which may overwhelm this country?—and we cannot afford it.

The Earl of Gowrie

On the issue of the investment in the mining industry, I altogether agree with the noble Lord. Certainly, in none of my remarks did I so much as mention the word "wages". I made it quite clear that the Government were putting in £832 million this year and £886 million next year as an indicator of their confidence and of the importance of the industry. I made it clear that that was principally for investment and development. On the issue of imports, the Government have not been importing. The British Steel Corporation in some areas of its activity did not find that the Coal Board was offering coal to them at anything like the sums of money that they could afford. I do not think that we should quarrel with that comercial judgment. I can say to the noble Lord that the National Coal Board has been successful as an exporter as well. We anticipate that with this investment and this confidence in the industry it would continue to be successful as an exporting industry.

On the issue of intervention, a meeting has been asked for and a meeting has been acceded to. That would seem to me to be only a courteous recognition that there is a potentially dangerous situation and the Government will do all they can to help. I do not think that even the noble Lord is suggesting that we should, as it were, arbitrarily abolish the National Coal Board.

Lord Lloyd of Kilgerran

My Lords, will the noble Earl agree that it was tactless, to say the least of it, to announce the closure of so many pits in Wales so as to cause further grave unemployment in that area at a time when the Welsh coal industry has been slaughtered by the loss of coal to be used in the manufacture of steel? What consultations took place with the Welsh mining industry in relation to these grave problems in that area?

The Earl of Gowrie

My Lords, I think that the noble Lord is perfectly free to bring his strong feelings and strong representations to the attention of Sir Derek Ezra.

Lord Davies of Leek

My Lords, is the noble Earl aware that some inexorable facts must be faced? When the noble Earl says that British Steel bought coal from overseas because it is cheaper, was he aware that Western Germany is subsidising coal by £14.86 a ton; Belgium by £34 a ton; France by between £17 to £18 a ton and Britain at £1.62 a ton? For 20 years Britain has sold its coking coal to the steel industry at below economic prices. These facts must be faced because we are told that we would be cheating the Common Market. The Common Market is cheating us by subsidising their own coal to that extent.

The Earl of Gowrie

My Lords, to the degree that the British taxpayer picks up losses incurred in the coal industry, as well as sums for investment, and the rest, we are subsidising—if I may put it that way—coal to £33 a ton, £44, £26 and £22 in the uneconomic pits. That is a fact of life that we cannot escape.

Lord Noel-Baker

My Lords, is it not a fact that the gain from importing cheap coal from America is largely offset by the loss from public funds due to payment of unemployment benefit to the miners displaced? Is it not the case that the strike now projected will cause a further catastrophic financial loss? Would it not be financial common sense to suspend the closures now planned until the new pits have been opened to take up the labour displaced?

The Earl of Gowrie

My Lords, I am sure that the National Coal Board will take on board the points that the noble Lord has made. But, on the general issue of imports and exports, I would repeat my remarks that the National Coal Board is heavily involved with exports, and we welcome this. We certainly would not want others to take the view that we should not export to them.

Lord Strabolgi

My Lords, arising out of what the noble Earl has said several times now about exports—he did not answer my point—would he not agree that while the volume of exports has been large, the profit has been much less because of the exchange rate? This again is as a result of the Government's policies.

The Earl of Gowrie

My Lords, I really am getting somewhat impatient with the noble Lord for attributing really all national economic weather to Government policies. The only way in which the Government can guarantee a weak exchange, given the presence of our energy resources, is to revert to the kind of galloping inflation which the declared policies of the noble Lord's party appear to want.

Lord Orr-Ewing

My Lords, could my noble friend say whether the statements made on television last night by just one of the miners' leaders from South Wales, that he had decided to call a strike, meant that there is no consultation with his district committee, that there is no consultation with the region and that there has been no opportunity for the miners in that large and effective coal area to poll on this issue in a secret ballot? Are those the facts?

The Earl of Gowrie

My Lords, I think that we should be aware that the constitution of the NUM is somewhat federal. It is not quite as centralised an organisation as many other major unions, and that must be taken into account in these circumstances. I am hoping that common sense will prevail because a meeting has been asked for and a meeting has been granted.

Lord Jacques

My Lords, would the noble Earl remind his right honourable friend the Prime Minister of the advice which is reputed to have come from Mr. Baldwin: that no British Prime Minister should ever get into mortal combat with the Vatican, the Treasury or the NUM?

The Earl of Gowrie

My Lords, all British Ministers are permanently in mortal combat with the Treasury; so that rules that out. But I will take the other points on board.

Viscount Massereene and Ferrard

My Lords, would my noble friend the Minister agree that to wish a weak currency, as noble Lords opposite appear to wish, is a sign of decadence in the country? Her Majesty's Government should be congratulated on the high exchange rate and strong currency. They should not be abused.

Lord Soames

My Lords, as we have spent 27 minutes on the Statement, might I suggest that we move on to our other business?