§ 11.41 a.m.
§ The Earl of Avon
My Lords, I beg to move that the Bill be now read a second time.
The purpose of this Bill is to make provision for a further two years'' financial support to the coal industry when the present powers run out in March 1984. The coal industry makes large demands on public finance. In 1983–84 the EFL for the National Coal Board is £1,195 million, the highest for any nationalised industry. In the same year the NCB are expected to accrue total grant support in the form of deficit and social grants of around £650 million. Even after those grants have been received, the chairman and his predecessor have spoken of an expected loss for that year of £185 million.
Noble Lords will be aware that on 23rd June this year the Monopolies and Mergers Commission published their report on the efficiency and costs of the NCB. The conclusion of the report was that the board faced two central and closely related problems: over-capacity and a number of high cost pits which have become uneconomic. The board in their preliminary response in July agreed with this conclusion.
Both the present and previous chairman have made it clear that action is needed to improve the industry's position and win for it a good future. Those aims have been reflected in the objectives for the board which were put on record by my honourable friend the Under-Secretary of State in the first sitting of the Standing Committee in another place. They provide that the NCB should earn a satisfactory return on its assets in real terms after payment of social grants. that the board should plan to secure those sales which are profitable on a continuing basis in competition with other fuels, and should progressively reduce operating costs per tonne in real terms.
The manner in which these objectives are met is a matter for the board. Operating-cost savings should result from improvements in productivity. The chairman has also expressed his aim of winning new markets for coal, especially in industry. The Government recognise that continued investment will he needed to assist in reducing costs and to secure long-term future coal supplies.
Despite the industry's disappointing financial performance in the past few years, there have been encouraging signs. Productivity, which remained low throughout the 'seventies has been rising steadily over the past four years, and is forecast to rise by some 3 per cent. this year when compared with 1982–83. Positive appointments have been made to the National Coal Board to help the board to deal constructively with its problems. The Government have provided massive financial support in the form of grants, loans and a continuing large investment programme. We have enabled the board's major investment programme to continue despite the serious deterioration of their revenue position. In 1981–82 the board reported a trading loss of £84 million. In 1982–83 this increased to £123 million and the board's total loss before deficit grant was £485 million.
The result has been that the board have found themselves increasingly unable to finance investment 735 from their own internal resources. In 1982–83, as a result of their losses, the board's reserves became negative and they became technically insolvent. My right honourable friend the Secretary of State gave an assurance in July in another place that continuing Government support in 1983–84 would enable the industry to operate as a going concern.
In addition to the loan finance which is made available to the board, the Government provide substantial revenue support in the form of various grants. Up till 1982–83 there were a number of specific operating grants to the board. Since 1980, however, payments of individual operating grants have been progressively replaced, as was envisaged in the Coal Industry Act 1980, by a single deficit grant, which is paid in respect of NCB's consolidated loss on revenue account. In 1982–83 deficit grant payments accrued by the board totalled £374 million, more than covering the £366 million interest payments which the board, like any business needing to borrow, must properly pay.
The board has stated its intention of remedying its serious financial situation and achieving a return to viability at the earliest practicable date. In the meantime, as my right honourable friend the Secretary of State made clear, we stand behind the board, so that loans to them from the National Loans Fund and revenue support in the form of grants to the board are continuing in 1983–84. Beyond the end of 1983–84 new powers are required if our support to the board is to continue. This Bill makes provision for the powers which are needed to support the industry for a further two years. Thereafter, new provisions will be needed. As was explained in another place, the introduction of further legislation in two years' time will provide the House with another opportunity to examine the progress of the industry towards a sounder financial position.
If I may I will turn now to the detailed provisions of the Bill. Clause 1 makes provision for loans to the board from the National Loans Fund to continue up to a new limit of £6 billion. At the end of September 1983 the board's borrowing stood at £4,122 million. Clause 1 provides for an interim limit on loans of £5 billion which may be increased by order to £6 billion. Clause 2 provides for a limit of £1,200 million on the amount of deficit grant which may be paid to the board in the financial years 1983–84 to 1985–86, a limit which may be increased by order to £2 billion. It also provides for the repeal of certain sections of the Coal Industry Acts 1973 and 1977 which are no longer needed. The grants made under those sections were completed in the 1982–83 financial year. All future payments of revenue grant support to the board other than social grants will take the form of payments which are made to reduce or remove the group deficit of the board on revenue account.
The next two clauses of the Bill, Clauses 3 and 4, extend for a further two years the powers to make social grants to the board and payments under the Redundant Mineworkers' Payment Scheme. These grants and payments have been made for many years now. Grants now paid under Section 6 of the Coal Industry Act 1977—which provide reimbursement of half of the board's expenditure on a great variety of 736 payments on redundancy and transfer, and also on supporting concessionary coal pools—were first introduced in 1965. The Redundant Mineworkers' Payment Scheme was introduced in 1967, and extended to include concessionary coal under powers taken in the Coal Industry Act 1973. In the debates on the Coal Industry Bills of 1980 and 1982 it was made clear that these grants and payments would continue after their present expiry date of 31st March 1984; and this Bill does so continue them, for two years in line with the other financial powers.
Noble Lords will have noted that the statutory limits on these grants and payments are considerably higher than those which they replace. This arises because the terms of the RMPS have been greatly improved during the last few years, so that payments per redundancy are now much higher than they were. It also arises because the rate of redundancy has fluctuated greatly over the last few years, representing as it does the result of decisions taken by the board's management at local level, in consultation with the unions.
The present situation on expenditure under Section 7 of the Coal Industry Act 1977, which I must bring to the attention of the House, demonstrates all too clearly why the higher limit is needed. The present limit of £300 million covers payments under the Redundancy Mineworkers' Payments Scheme, and also payments to the board in support of the provision of concessionary coal, as introduced in 1973 and extended earlier this year. Payments under Section 7 exceeded the £300 million limit on 2nd December 1983. But no noble Lord could wish payments to redundant mineworkers under the scheme to be halted or curtailed until this Bill becomes law. My right honourable friend is continuing to make payments under the scheme, using moneys already provided within the Vote upon which this expenditure is carried. The position will be regularised by means of the passage of a supplementary estimate, once the Bill becomes law. The final two clauses, Clauses 5 and 6. are those which deal necessarily with interpretation, citation and extent.
The purpose of this Bill is to set a broad financial framework within which the National Coal Board can work back towards economic viability. This is the light in which I would ask noble Lords to view the Bill. This Government want the coal industry to realise its potential and to play a competitive role in the United Kingdom's energy supplies. It is an aim which we share with the industry itself and with all those who are concerned for its future good. We will support the industry while it progresses to the realisation. This Bill, which I commend to the House, is the means of providing continued support.
§ Moved, That the Bill be now read a second time.—(The Earl of Avon.)
§ 11.54 a.m.
§ Lord Stoddart of Swindon
My Lords, I should like first of all to thank the noble Earl for explaining the Bill in detail and for doing it in a way that we could all very easily understand. I have to say at the beginning that the Labour Party, while it has worries about the Bill—great worries in fact—recognises that it deals primarily with the borrowing powers of the board. For that reason, we shall not oppose the Bill or seek to 737 delay it in any way. Indeed we shall facilitate its passage through all its stages in this House today. I do not intend to try to encapsulate in what will, I hope, be a not over-long speech the many points which were made in very many hours of debate on Second Reading in another place; but I do want to make a number of points which concern me and the Opposition particularly.
I suppose that from my own point of view I have an emotional attachment to the coal industry because I was born in the Rhondda. Indeed, I was born on the first day of the General Strike, so I was really well into it. But, having lived with it during the early years of my life, the coal industry, as I say, has an emotional meaning for me. During those early years we had pit closures and felt the great hardships of unemployment in the 1930s. So in fact I have experienced what it means to a coalmining industry when pits close and when there is an ever-present threat of closure. But, believe me, it is not only an emotional attachment that persuades me that we need a strong and expanding coal industry. My experience and, indeed, my intellect tell me that such a policy must be right in both the short term and the long term.
As the noble Earl has pointed out, Clause 1 deals with loans to the National Coal Board from the National Loans Fund to continue to a limit of £6 billion. I think we must be clear that these amounts are loans and not grants, and interest has to be paid at a very high rate for a fixed term. These interest charges do impose a very heavy burden—indeed, £1,000 million has been paid in the three years up to the present by the coal industry. They have to meet those charges and it is an enormous burden for the coal industry to bear at a time when its production has been slashed from 128 million tonnes in 1979 to under 110 million tonnes in the current year. And of course this is a time when stocks of coal stand at 53 million tonnes: that is the most recent figure I have seen.
It is no fault of the National Coal Board or of the miners that we have such high stocks of coal and that production has dropped from, as I say, 128 million tonnes to under 110 million tonnes. The fault is due to Government policy over the last four and a half years, which has reduced industrial production in Britain by about 16 per cent. It is little wonder in these circumstances that the board has been unable to meet its financial targets in spite of the fact that we have had the productivity increases which were mentioned by the noble Earl when he introduced this Bill.
The noble Earl also mentioned the Government's policy objectives, and I shall have something to say about those later on. But first I should like to express the Opposition's concern about Clause 4, which seems to confirm our worst fears about the Government's intentions regarding future pit closures. The nature and scope of Clause 4 must give rise to fears of an accelerated pit closure programme and, coupled with three other factors, virtually confirms a policy of significant if not savage reduction in the coal mining industry.
First, we have seen the appointment of Mr. MacGregor. That appointment was bound to raise fears, particularly among miners, that he was going to embark upon the same sort of reductions in the coal 738 industry as he embarked upon in the steel industry, where he closed many plants and put many people—tens of thousands of people—out of work and reduced the steelmaking capacity of this country to below what we in the Opposition think is a viable and safe figure.
Then, during the time I was a member of the Commons Select Committee on Energy, we received the Cabinet Paper dealing with the Government's nuclear power programme. One of the sentences worried us—certainly it worried me and it worried the Opposition very much—because it said that a nuclear programme would have the advantage of removing a substantial portion of electricity production from the dangers of disruption by industrial action on the part of coalminers or transport workers. Therefore we were entitled to believe, and we still believe, that the Government are using the nuclear programme not to undermine but certainly to reduce the coal sales to the electricity industry for the generation of electricity.
Then we had the most recent statement of the Financial Secretary to the Treasury, Mr. Moore, that there was a possibility that parts of the coal industry could be privatised. Of course, Mr. Moore is a Minister in the Treasury, and we know that Mr. Lawson, the Chancellor of the Exchequer, was himself in the Energy Department and no doubt had been considering privatisation proposals while he was there. It is also true that Mr. Walker, Secretary of State for Energy, denied during the Second Reading of this Bill in another place that he had thoughts of privatisation; but, in my view, having read what he said, it was an evasion, and of course we have seen of late that when he has battles with the Treasury, particularly concerning matters relating to fuel prices, he does not win them: he loses them. So the Opposition must be very concerned about the statement that was made by Mr. Moore that there was a possibility that the coal industry or parts of it could be privatised. If pits are closed, if all our fears are realised, then the pits that are closed will be sacrificed on the altar of so-called financial viability. But, as we have seen in the past, what is financially unviable one day can become financially viable the next.
I have had the honour of gaining some experience in the electricity supply industry, and in the 1960s I was the secretary of a local advisory committee in a power station. Noble Lords will know that in the 1960s—and it was under a Labour Government—there were proposals which were carried out to build more oil-powered stations and fewer coal-powered stations. That matter was brought to the attention of my local advisory committee and the people there—ordinary working folk like boiler operators, turbine drivers, coal plant attendants and ash plant attendants—warned the CEGB against this policy of converting their production to oil.
What they said was that while we had coal we had a sure source of supply, whether in peace or in war. They said to the board, "It would be wrong of you to concentrate more of your generation on oil, because it may very well be that the Arab oil states will want a much higher price for their oil in the very near future." They were pooh-poohed. Of course, that would not happen. We had control of Arabian oil at that time. They also suggested that in times of war supplies could 739 be interrupted, and we would have great difficulty in generating electricity from oil-powered stations.
Their objections were overruled, but of course they were proved right. The ordinary working men, who have such common sense, were right and all the Government experts and other experts were wrong, because in 1973 there was a war in the Middle East and we had an oil price explosion and a reduction of oil supplies throughout the world. That makes me believe that we must always ensure that we have a strong and viable coal industry.
Of course, there were all sorts of other things done by the oil industry—the oil lobby as we called it then, and as I still call it—to reduce the coal industry beyond a reasonable measure. I also had the honour to serve as a member and leader of a local authority which ran trolley-buses. Those trolley-buses ran on coal through the wire, and we destroyed the system, not only in Reading but throughout the country. In actual fact, what we were doing was destroying a potential outlet for coal and, at the same time, destroying the best form of stage carriage public transport that we ever had in this country. I hope that we can have it back at some time. Nevertheless, while we were doing that we were also destroying another outlet—a safe outlet in all circumstances—for coal. So those experiences that I have had make me worried about the future of the coal industry and the Government's apparent policy towards it.
I want now to come back to the Government's objectives for the coal industry, and perhaps I may quote what Mr. Giles Shaw, the Parliamentary Under-Secretary of State said in Standing Committee. He said:First, although coal is one of the United Kingdom's major natural resources, in the Government's view the justification for coal production, like that for any other business, lies in the ability of those engaged in it to earn a satisfactory return on capital while competing in the market place".—[Official Report, Commons, Standing Committee H, 22/11/83: col. 38.]Let me emphasise the words:lies in the ability of those engaged in it to earn a satisfactory return on capital while competing in the market place".That sounds eminently reasonable; and Mr. Giles Shaw is highly respected on both sides of the House of Commons. It is only reasonable, given Government policy of free market economics. But can it be sensible to determine the long-term future of the coal industry by imposing short-term transient objectives? In certain circumstances, if this were taken to its logical conclusion, the coal industry could be destroyed or, at least, substantially reduced in size.
Let me give your Lordships an example of what could happen if that proposition were taken to its logical conclusion. At the moment, the price of oil is uncertain. We have had talk of late of an oil price collapse. Indeed, prices throughout the world are already under pressure. If oil prices collapsed, it would pay the CEGB—on the basis of competition and of free market economics—to run its 18,000 to 19,000 megawatts of oil-fired plant for base-load purposes. That is the ultimate conclusion that we must reach on this competitive basis. If the CEGB did that, the amount of coal required would be down by 25 million tonnes a year.
740 That is the situation which would face us if we took competition to its logical conclusion in the coal and electricity supply industries. That would be a disaster for the coal industry, as well as for the miners. Then, of course, when the price of oil rose again, as it would do in the long term, the coal capacity would not be available. There will be a need for a strong coal industry from the late 1990s onwards, to compensate for the decline and ultimate exhaustion of North Sea oil and dwindling supplies of gas. We must develop this great national resource. After all, in the previous Bill we have been prepared to write off huge sums in royalties to encourage the development of marginal oilfields and we should not treat the coal industry so differently.
I should like to quote a further passage from the speech of the Parliamentary Under-Secretary in Standing Committee in the Commons on 22nd November. He said:Second, the National Coal Board should aim to maximise its long-term profitability by securing those sales which are profitable on a continuing basis, in competition with other fuels".Let me also emphasise the words:securing those sales which are profitable on a continuing basis, in competition with other fuels".Again, that appears to be quite reasonable, but is it? Three-quarters, or 75 million tonnes, of coal production goes to a single customer—the CEGB.
Therefore, the CEGB sets the price of coal, since it sets the price of electricity: but the price of electricity reflects many other factors besides the cost of coal. For example, the electricity industry is at present carrying idle loan charges on 18,000 megawatts of oil-fired plant. What is more. coal is also competing against nuclear power within the CEGB, and, as the Commons Select Committee pointed out in their report on the Government's nuclear power programme, there could be little confidence in the CEGB figures for nuclear generating costs. Therefore, the coal industry is probably competing against incorrect, estimated costs of existing nuclear power plant, and certainly it is competing against the hypothetical costs of the PWR. If they have to compete with other fuels, even now, and certainly in the past, it would have paid the CEGB to use gas to generate electricity, but that would not have been sensible from the country's point of view. It would have been using a premium fuel to produce electricity at a 40 per cent. overall efficiency rate. That would have been absurd; but apparently the Government are saying that coal has to compete with other forms of fuel.
It seems to me that this policy needs to be reconsidered. Although the objectives sound eminently reasonable they are certainly not good for the country, and they are not possible for the coal industry to achieve. If the policy objectives were considered realistic in the context of a total fuel policy, our total fuel policy would be in complete disarray. It would be impossible to plan the future of the coal industry on the basis of competition when the prices of various forms of primary fuels are subject to see-sawing market fluctuations. The need is for a long-term planned energy policy embracing all the energy industries, including oil. Coal is and must remain the basis of such a policy. It is that fuel which gives us the 741 comfort and advantage of fuel independence, not over decades but over centuries.
§ 12.13 p.m.
§ Lord Ezra
My Lords, I should like to join the noble Lord, Lord Stoddart of Swindon, in expressing appreciation to the noble Earl the Minister for the clear way in which he has put this Bill before us for its Second Reading. It is, as he indicated, a short-term measure to give further financial support to the coal industry in its present difficult circumstances. I can say, as the noble Lord, Lord Stoddart of Swindon, said, that we on these Benches will also facilitate its passage through the House.
Having said that, however, I believe that certain comments would be appropriate. First, as to the short term, I should like to ask the noble Earl whether, in the matter of their short-term policy, the Government have any intention of exerting pressure on the fixation of coal prices, as apparently they have done recently on the fixation of gas and electricity prices. I hope that the noble Earl will be able to advise the House on that matter.
As to the longer term. I am entirely with the noble Lord, Lord Stoddart of Swindon, in that we cannot consider a short-term measure for the coal industry without having reference to its longer-term situation. The longer-term situation for coal must be clear to all who study the energy scene. We are very fortunate in Britain today in having the massive advantage from the North Sea which is being exploited with great skill by those concerned, but we know that those resources are limited. In the case of oil, the peak of production could be reached fairly soon. Thereafter, there will still be many years during which we shall be extracting oil from the North Sea. but probably at a diminishing rate. Gas, also, will continue to be plentifully available, but will come to its peak before very long.
The fact is that we shall need a plentiful supply of fossil fuel in this country and, indeed, in the world for as far ahead as we can see. This is irrespective of whatever development there might be in nuclear or alternative forms of energy, because it is only natural fossil fuels that can meet the wide variety of needs for which we have a requirement in our modern industrial society. We know that, in the matter of reserves, the coal reserves are there. We know that the skills are there—both the mineworkers' skills and the mining engineers' skills. I was a little disturbed, although I may have misunderstood the noble Earl, when he said that in two years' time, when a further Bill might have to be presented to the House, we could then reconsider the position of the coal industry.
I believe that, consistent with this present short-term measure, we should also be taking a view of the longer term. After all, the Plan for Coal, with which the noble Lord, Lord Gormley, and I were much involved some 10 years ago, has now reached a point when it needs to be reconsidered. There is no way in which one could have laid down a plan some 10 years ago which would be totally valid for ever after. After a decade with the Plan for Coal—which has had its successes in many ways, although in some ways it has not worked out quite as planned, mainly for external reasons—it is now time for a major review of the long-term for the industry.
742 I submit that the underlying objectives in the original Plan for Coal are as valid today as they were then, but that they need to be re-stated. There were basically three objectives: the progressive replacement of old and exhausted capacity by new capacity; the progressive improvement of technology in the mining of coal and the using of coal; and a substantial improvement in the productivity of the industry. Major strides have been made under all those heads. It could be that the replacement has not worked as fast as many would have liked, but I must remind this noble House that the closure of collieries is always a delicate, difficult issue raising many social problems of an acute nature, and that it has to be handled with care. I believe that the management of the coal industry and the mining unions have developed a certain skill in dealing with these problems. I hope that they will revert to the way in which these problems were being tackled a few years back but which, unfortunately, has weakened somewhat since.
As to investment, I readily accept that there was a high level of investment during the previous Labour Government and that the level of investment has been continued. We need to know what the position will be in the future. I hope it will remain as positive. As to productivity, I am very glad that the noble Earl referred to the considerable improvement that has taken place from 1979 onwards. In fact, it was in 1979 that after many years of negotiation the incentive scheme was effectively introduced. There is little doubt that it has had quite a dramatic impact on the productivity of the industry, and we would expect to see it going on from strength to strength, not only due to the great skills of the mineworkers but also due to the improved equipment that they now have at their disposal. So we need have no concern on that score.
As to technology, it is going to be increasingly important to concentrate not only on the productive technology but also on the user technology in order to make sure that coal can be used in full conformity with the more stringent requirements of the environment, which I believe is entirely technically possible but which requires a substantial degree of continued research and development.
This is also a time when we should be conducting a major review of the financial structure of the coal industry. If we believe that it is an industry which inevitably has a long-term future, then that future must be based on a clear and well-organised financial base. At the moment, the borrowing requirement of the coal industry is very substantial indeed—and not surprisingly so. When I was involved in the formulation of the Plan for Coal in 1974, I made it clear to the then Secretary of State for Energy, Mr. Eric Varley, that there was no way in which we could begin to re-expand the coal industry at the rate which was agreed with him without having to borrow very large sums of money from the Government—for the simple reason that the coal industry had been run down very substantially during the previous 16 years.
Had we sought in our forward plan to limit the amount of investment in the coal industry to funds which could be generated within the industry, we would have had practically no forward plan and practically there would have been no new investment. So what has happened in the way of the extensive 743 borrowings of the coal industry is not something which is due to the fault of those in the industry, as I believe would be readily agreed. It is not even due entirely to the recession. It is due to the fact that for the previous decade and a half there was virtual stagnation in investment in new capacity in the industry. In order to catch up with that, very substantial additional investment had to be made. The only source of such investment, if the industry was not to be priced out of the market, was to turn to the Government for borrowing. I believe that this calls for a more fundamental review of the financial structure of the industry than appears at present to be envisaged by the Government. I shall be most obliged if the noble Earl, when he replies, will comment on that aspect.
To conclude, there seems to me to be no doubt at all that the Bill as now proposed is a valid and desirable one in order to help the coal industry over its short-term difficulties. But what we should be bearing in mind when dealing with the short-term difficulties are the long-term prospects and needs of the industry, and the need of the country for the industry. Those problems also should be attracting our attention, when we are seeking as well to deal with the present short-term difficulties.
§ 12.23 p.m.
§ The Earl of Avon
My Lords, I am grateful to both noble Lords who have spoken for their welcome of this Bill and for their understanding of it. I believe we all agree it is something that must come about. I should like to say, particularly to the noble Lord, Lord Stoddart of Swindon, that we are looking for a strong and expanding industry, and I put no time factor on that search. Although this Bill as the noble Lord, Lord Ezra, also remarked is for two years only, that does not in any way impair our objective, which is his objective, of a long, strong, expanding coal industry. But it will take time. and it is not something that will happen, as the noble Lord, Lord Ezra, also commented, within two years. It will take a longer period of time than that.
I enjoyed the talk by the noble Lord, Lord Stoddart of Swindon, about the flexibility of the various fuel sources and the alternative fuel sources. By the end of his talk, I had come to the conclusion that all of us in the Government have been quite clever because, at the present moment in time, we have the oil (which we do not use very much) and we are now coming up to something like a 20 per cent. proportion of nuclear. That gives us a very nice balance for the future. The noble Lord, Lord Stoddart, mentioned the subject of nuclear. I believe that the power stations coming on stream are the responsibility of all Governments over the past decade. So I hope very much that the noble Lord will agree with the amount of nuclear in proportion. As he knows, since the present Government came to power, because of the inquiry, we have actually gone no further.
I was also pleased that the noble Lord, Lord Stoddart of Swindon. referred to trolley buses. I myself am also interested in that aspect, particularly in respect of electric vehicles. But, again, they seem to have taken a long time in coming.
Both noble Lords referred to pit closures. I am glad that the noble Lord. Lord Ezra, mentioned it as being 744 a difficult and delicate subject. Indeed it is; but, as the noble Lord. Lord Shinwell, reminded us the last time we had a Question on this subject. it is something which has been going on for many years and is something that will continue to go on. Perhaps I may say at once that nothing Mr. MacGregor has said will change the policy of the Coal Board on that particular subject.
The noble Lord mentioned that production was slashed. The problem here is marketing. If we could get the coal out of the ground at the correct price, then it would be much easier to sell. The problem—and the noble Lord touched on it—is that at the moment we have too much coal for our needs at the present price. That is a marketing problem which, as we have heard, the present chairman wishes to take to heart. I believe in the fundamental point that only on the basis of true competitiveness can the board build a secure future for the industry and its employees, and hope to expand activity in the next century. Opportunities exist for coal in the future, but to be able to take more opportunities the board must provide economical, secure and competitively-priced coal. That is what customers want—the CEGB and other coal users.
I took very much to heart the helpful remarks of the noble Lord, Lord Ezra, in respect of the future programmes for coal. It goes way beyond my brief to comment on that in any detail, but I will certainly bring his remarks to the attention of my colleagues. I did not quite follow the noble Lord on his comments about investment, because at the moment we are still providing a lot of funds for investment. Agreed, there is interest charged on them; but at the moment, of course, the deficit grant helps to balance and write off the interest. I hope that the investment will continue at a rate which the noble Lord wishes and which the Coal Board is now observing.
§ Lord Ezra
My Lords, if I may intervene. I should like to make my point quite clear. I do not believe it would be healthy in the longer term for the industry to have to depend upon grants in order to pay interest. We should find some other, more effective longer-term financial structure. That was what I had in mind.
§ The Earl of Avon
My Lords, I thought that was what the noble Lord had in mind, but I was slightly muddled when listening to him earlier and I wanted to clarify his point for my own record.
The noble Lord, Lord Stoddart of Swindon, mentioned the subject of coal versus oil for fire stations. I should make it clear that the oil burned at present is at the operational minimal level. I should also like to say a word about the CEGB, because we have been discussing the general feeling of the market at the moment. I should like to say how good I think their merit order system is, and their planning at the moment also seems to be first class.
To return to the subject of this Bill, it is a small Bill to help the coal industry for the next two years. I am grateful to both noble Lords for their general understanding and welcome of the Bill, and I wish to reiterate the Government's wish for a strong and expanding coal industry. I beg to move.
§ On Question. Bill read a second time; Committee negatived.745
§ Then, Standing Order No.43 having been dispensed with (pursuant to Resolution of 15th December) Bill read a third time, and passed.