Coal Industry Bill

HL Deb 12 June 1985 vol 464 cc1235-51

3.11 p.m.

The Minister of State, Scottish Office (Lord Gray of Contin)

My Lords, I beg to move that the Coal Industry Bill be read a second time.

The purposes of the Coal Industry Bill are financial. This is recognised by the fact that it has been designated to be a Money Bill. I will explain the provisions in a few moments. First of all, I should like to say a little about the present state of the coal industry in this country.

A year ago we were in the midst of a long and damaging strike. That strike has left a substantial legacy of financial loss; it was in so many ways such a great setback. Strenuous efforts are now being made to get the coal industry back on its feet. There is a pressing need now for reconstruction, and in the short term there will be a continuing need for deficit grant for the National Coal Board.

However the coal industry, which all will recognise as having a great history, must now face up to the future, and that means change. It is, for example, instructive to note that total primary energy demand in the United Kingdom in 1984 was lower than it was in 1968, 16 years before. In the last 10 years coal has held its share of the market, but over that period that market has been shrinking. Future energy demand is now expected to grow more slowly than was expected in the past and this all means, as far as coal is concerned, that overcapacity must be reduced. We need a coal industry that can respond flexibly to the needs of the market place.

Secondly, costs must be brought down so that National Coal Board coal can compete in the international market and with other fuels. Average costs of production have for too long exceeded average revenue.

I should now like to explain the provisions of the Bill itself. Clause 1 provides for the payment of deficit grant to the National Coal Board—£1,200 million for 1984–85 and £600 million for 1985–86 and 1986–87. The latter figure may be increased by order if necessary. The provision of £1,200 million for 1984–85 is over and above the funds provided for that year under the 1983 Coal Industry Act.

The limit on what could be paid under that Act was reached in March of this year; hence the immediate requirement for fresh parliamentary authority. Total losses for the National Coal Board for 1984–85 are now expected to be around £2.2 billion—very largely due to the strike. The loss is still being calculated and will not be finally available until the board's annual accounts are published in July. However, I can say that as a result of the strike no fewer than 73 coalfaces were lost-48 working faces, 24 salvage faces and one development face. The write-off of these faces costs many million of pounds. Recovery of faces damaged by the strike is similarly a very expensive process.

Clause 1 of the Bill also provides that if the audited accounts of the National Coal Board show that the full £1,200 million for 1984–85 is not required for that year then the balance may be carried over to 1985–86 and 1986–87. This allows for present uncertainty about the proper allocation of the strike-related costs which will be resolved when the accounts for 1984–85 are available.

There has been some understandable speculation about the assumptions underlying the figures for 1985–86 and 1986–87. I should therefore emphasise that the figures do not match some particular forward plan: they represent a financial framework within which the Government expect the National Coal Board to live. The Government have also made it clear to the Coal Board that we expect it to break even without deficit grant by 1987–88. The level of subsidy to the coal industry in the past has been unacceptably high. However, we believe that there is now a commitment in the industry to work towards a new era and we have been greatly encouraged by the way that producitivity and overall performance have recovered since the end of the strike.

Everyone recognises that some pits will have to close, but the National Coal Board has made it clear that any decision relating to a colliery closure plan will be dealt with under the colliery review procedure, either as it exists today or under a modified procedure if agreement can be reached between the board and the three unions involved. That assurance applies to all coalfields. I should emphasise that the decision to close a pit is never lightly taken. The problems faced by individuals and communities are recognised. That is why such generous redundancy benefits are offered and why the board puts such efforts into securing jobs for all those who wish to stay in the industry. We are also much encouraged by the progress made by NCB (Enterprise), which has already approved loans totalling nearly £½million and which is actively considering requests for funds in excess of £3 million.

Perhaps I may now turn to Clauses 2 and 3, which concern the power to pay pit closure grants to the National Coal Board and to make payments to redundant miners. To avoid any misunderstanding I should say at the outset that the purpose of these two clauses is to ensure that adequate powers exist to enable the possible continuation of the redundant mineworkers and concessionary coal payments schemes and payment of pit closure grants. It brings these payments into line with what is proposed for the payment of deficit grant and avoids the need for two coal industry Bills within one year.

However, this Bill of itself neither affects the very generous redundancy terms presently available to miners nor extends the period for which those terms are available. Both remain as set out in the Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1984, as amended. This Bill does not increase the existing ceiling on total payments which may be made either in respect of redundant miners and concessionary coal or by pit closure grants.

Some of your Lordships may be wondering what the figures in the Bill mean in terms of numbers of men to be made redundant and number of pits that must close. Although these are very important questions, they are not ones which this Bill seeks to address. Clearly the strike had a very profound effect on the coal industry, and the National Coal Board is still in the midst of a very major exercise, reviewing the damage done and working out the options for the future. It is still too early to say what the final outcome of that review will be. As I have already indicated, where the National Coal Board area directors have come to the view that a particular pit can no longer be justified, the proper colliery review procedure will be followed, which may or may not result in closure.

The figures for the Bill could not await the final outcome of the board's full deliberations and were therefore set to be large enough to meet almost any conceivable set of circumstances. But the Government accept that it would not have been right to ask Parliament to increase the existing limits until a clearer indication of need had emerged, which is why the Bill seeks only to enable those limits to be raised by order approved by Parliament if and when the need becomes apparent.

The long-term future of the coal industry depends on facing up to the problems and having the will to solve them. The Government are committed to a successful coal industry in this country. We have provided over £4 billion for investment, and in recognition of the difficulties involved in reconstruction are putting forward this Bill this afternoon. But for the long term, good wages, secure jobs and the proper level of investment cannot be guaranteed in a permanently loss-making industry. For the sake of all those involved in the industry, the coal industry must pay its way. The Government believe that the problems of the coal industry can and will be overcome, and accordingly I commend this Bill to your Lordships' House.

Moved, That the Bill be now read a second time.—(Lord Gray of Contin.)

3.21 p.m.

Lord Stoddart of Swindon

My Lords, I should like first to thank the noble Lord for introducing the Bill, and for doing it so ably and succinctly. Of course, even apart from the fact that this is a money Bill the Opposition would not dream of seeking to oppose it, since without the financial provisions in the Bill the coal industry would cease to operate. The total amount, estimated at over £2,000 million, is a large sum by any standards, and represents just part of the enormous costs arising from the coal industry dispute, which itself was a tragedy for the industry, for the miners themselves and for the taxpayers as a whole, who are now being called upon to foot the bill for a dispute that need never have happened and should not have been allowed to happen.

I say "need never have happened" for the very good reason that if the NCB and its chairman had applied both sense and sensitivity on the question of pit closures, and had been prepared to use long-established procedures to the full, it is likely that over a reasonable period of time they would have achieved many of their objectives without the trauma of the strike itself, without the long-term damage to relationships both within the coal industry and in the wider social context outside the industry, and without the enormous cost, only part of which is being met through this Bill. In political terms, the Government have done themselves no good. They can consider themselves fortunate that on this occasion, and unusually for the NUM, the union did not handle this dispute with the imagination and finesse applied to previous disputes. Had it done so, it is likely that the strike would have been of shorter duration and have ended differently, and the Government would have ended up with a bowlful of egg all over their face.

But, as I have said, this Bill only provides the money to meet part of the cost of the dispute. There are even greater costs to come: first, in the electricity supply industry, to cover the cost of additional oil burn at power stations, an amount of some £1.8 billion; secondly, the cost of extra policing, at some £200 million; and, on top of these costs, the cost of importing coal and oil and the consequences of that for our balance of payments. These direct costs amount to some £4 billion. To these have to be added the loss of a year's coal production, the tax and national insurance contributions not paid by miners during the strike and the cost of benefits to strikers' families during the dispute. I wonder whether the Chancellor of the Exchequer still believes that the confrontation was a worthwhile investment. Is it not the case that the real reason why the Government have decided to sell off British Gas during the lifetime of this Parliament is the need to meet the cost of the coal industry dispute and still have enough money for a pre-election tax bonanza?

However, it is not my intention to dwell on the past. It is the future that now matters in the coal industry, as the noble Lord has mentioned. We are entitled to know exactly what the Government's intentions are in relation to the shape and size of the industry, and where it fits into the Government's overall energy strategy. That is, of course, if they have one. We are, I believe, entitled to ask some questions about the Coal Board's future intentions, early though this is. I sincerely trust that the noble Lord will answer them. First, what output is envisaged for the future, and where is that output to be concentrated? There must be some idea of that. For example, are the rumours that the Scottish, Welsh and Kent coalfields are to be phased out true? Were the 1,800 redundancies announced on Monday in Wales only the first stage in phasing out Wales as a coal-producing area? The people of Wales are entitled to know if they have a future and, if so, what that future is. The Coal Board itself appears to be playing a cat and mouse game with the Welsh miners. It is reprehensible that they should be treated in so cavalier a fashion. I sincerely trust that the Minister will be able to give an indication of what the future has in store for Wales and, indeed, for every other coalfield in Britain.

I should also like the noble Lord to say what the future size of the workforce is likely to be. He says that he cannot give such a figure today, but he must have something in mind. Already, through natural wastage, men leaving the industry during the strike and the redundancies so far announced, more than 30,000 jobs have been lost. How many more jobs are to go? Is the final figure of redundancies to be 35,000, 50,000, 60,000—or what is the figure that the Coal Board has in mind? Perhaps the National Union of Mineworkers was right after all when it predicted long before the strike that 70,000 jobs were to go. Would the noble Lord opposite please let us have some idea?

In this connection, I should like also to refer to the leaked plans of the European Economic Community, which, if confirmed, would strike a devastating blow at our coal industry. I am, of course, aware that the Secretary of State has denied that there is any truth in this leaked report. But I am always suspicious of the EC Commission bearing in mind previous experience of some of its harebrained schemes. I hope that the noble Lord can assure me that, if it were found that this leak did after all have a basis in fact, the Government would resist the EC in any move it might make to further cut back United Kingdom coal production. Indeed, I should like him to go further and say to the EC that Britain can meet the shortfall of 70 million tonnes of coal a year in the EC and that the need for large imports of coal does not really arise provided that the British coal industry is given the proper support and assistance it needs. After all, for a fraction of the cost of supporting agriculture, British coal could be immediately competitive with coal from South Africa, Australia, the United States or anywhere else for that matter.

It is time, too, that the Government gave an indication of the likely future generation pattern of the CEGB. The country, as well as the coal industry, needs to know what is the future role for coal, oil and nuclear. The price of oil eliminated it as a fuel source for any generation of power other than at times of peak load. But do the Government intend that a substantial conversion of oil-fired stations to coal firing should be put in hand?

On the issue of the nuclear component in electricity generation, I have heard various estimates of the planned future percentages of total generation from nuclear power stations ranging from 25 per cent. to 50 per cent. by early next century. Perhaps the noble Lord will tell us just what the Government have in mind and what are the implications for coal. Will the noble Lord also say what additional measures they now intend to take to persuade more firms to take advantage of the coal conversion programme?—for it is clear that coal remains highly competitive with other fuels and conversions will not only help individual firms to become more profitable but will also assist in the drive for lower unit costs and an improvement in the country's competitive position.

I now turn to the plight of the coal mining communities which as well as having suffered greatly during the dispute are now to feel the hard whiplash of destruction through high unemployment. It was gratifying to see that in your Lordships' House during the strike noble Lords from all parts of the House expressed their fears for the future of mining communities and urged the Government to act to preserve them. We all remember the emotional appeal of the noble Viscount, Lord Tonypandy, who has so much experience of this problem and who in fact has lived through it.

Since the end of the strike an organisation called the Coalfields Communities Campaign has been set up with a view to increasing substantially national and local initiatives to maintain existing employment and to create new jobs in coalfield communities. That campaign is supported by many distinguished individuals and a large number of important local authorities and I hope that the Government will be prepared to listen to them and take account of their suggestions for preserving our mining communities.

The Government themselves have of course taken one initiative, to which the noble Lord referred in his speech, in setting up the NCB (Enterprise) Ltd., and undoubtedly, if properly supported, directed and financed that organisation could do a great deal to offset the damage caused by mass redundancy and pit closures. However, it is already clear that it is underfinanced. The £10 million allocated to the NCB (Enterprise) Ltd. is but a drop in the ocean and falls far short of what is needed if new opportunities and new jobs are to be generated and brought to our mining communities. In another place, at Committee stage an amendment was moved to make £50 million available to NCB (Enterprise) Ltd., but this was not accepted by the Government. I think that was a great pity since it has given the impression that the Government are not really serious about providing alternative jobs.

I would hope that the Secretary of State will have second thoughts about this and make an announcement that he and the Government are indeed ready to provide finance up to at least £50 million in the first instance, for such an announcement that he and the Government are indeed ready to provide such finance would provide a real dynamic to NCB (Enterprise) and encourage potential industries to believe that they have substantial and continuing Government support to establish new enterprises in the coal mining areas.

I want finally to refer to the question of miners dismissed during the strike. Undoubtedly the attitude of the Coal Board is causing great concern and resentment, not only because the board has failed to honour promises made prior to the ending of the strike but also because its approach has not been evenhanded throughout the industry. The noble Lord will know that during the course of the dispute the Coal Board dismissed miners who had been arrested, irrespective of conviction or acquittal, and that of 944 people so dismissed 671 remain not reinstated. I should emphasise that we are not talking about people convicted of serious crime or of acts of vandalism against board property or against persons. We are talking of people who committed minor offences or no offence at all; and indeed many were dismissed on mere hearsay evidence.

The NCB in its statements prior to the ending of the strike intimated that 80 per cent. of all those dismissed would be reinstated and that only those who had committed acts of vandalism against board property or acts of violence against employees would not be considered for reinstatement. However, the board is not living up to its own criteria, since of the 671 people not yet reinstated only a handful fall within the category for dismissal laid down by the board. What is entirely reprehensible to me is the refusal of the board to allow cases of dismissal to be taken through the coal industry conciliation scheme which would provide for cases to be submitted to an independent umpire, or, if it is the board's wish, to the coal industry's national reference tribunal.

However, it is also a serious matter that there is difference in treatment area by area and that whereas in Derbyshire and South Wales nearly all those dismissed have been reinstated, in other areas practically no one has been reinstated. Indeed, in Scotland the area director, Mr. Wheeler, has flatly stated that none of the 205 miners dismissed will be reinstated. Under those circumstances one is forced to the conclusion that the NCB is being spiteful and vindictive and is adopting a policy of kicking a man when he is down—a concept entirely alien to the accepted British character and certainly one which is not practised by industry generally either in the public or the private sector.

The board, in accepting its new, tough-line tactics, is undoubtedly creating grave injustice and I cannot believe that even this Government can condone the board's actions in respect of reinstatement. For the sake of future good relations, miners need to feel that they will be treated fairly and justly. What is needed now on the part of the Coal Board is a period of understanding and magnanimity, and I appeal to the noble Lord, who is a kind and sensitive man, to impress on his colleagues in Government to intervene with the Coal Board to ensure that this problem of reinstatement is dealt with on the basis of fairness and justice.

I conclude by stating my own belief and that of the Labour Party that the coal industry is and must remain an essential part of our economic life and that coal must remain the basis of our energy strategy. Departure from this central concept will only bring danger and difficulty in the future and it is essential that the Government themselves ensure that the conditions exist whereby the coal industry can be developed and expanded on the basis of understanding and co-operation between all those involved in the industry, whether they be managers, face workers or anyone else.

3.38 p.m.

Lord Shinwell

My Lords, it is extremely doubtful whether, when the Bill came in its present form before the House, many Members of your Lordships' House expected the noble Minister to make such an informed, although undoubtedly depressing, statement about the future of the coal mining industry. The facts speak for themselves. One fact is that only two noble Lords put down their names to take part in the debate. If I had known that the Minister was to make such an important statement I would certainly have put my name down to speak, However, because I did not know the Minister's or the Government's intention, as an alternative I have put down a Question about the production of certain products which the coal mining industry could undertake. I note that that Question will come before your Lordships' House on a Friday morning. I shall leave the matter there.

What I cannot understand is why, after a dispute lasting more than 12 months which created more turbulence in the industrial life of this country and in industrial relations than we have known for many years, the Government have taken only a matter of two or three months to come to some decision about the future of the coal mining industry.

One would have thought that the Government would decide, "Well, we had better have a thorough investigation. Why did this dispute occur? Why should it have occurred? We must make certain that it never occurs in that form again". This is particularly so when, as the Minister indicated in his important speech, there are questions of the closure of pits, redundancy of a vast number of miners and those associated with mine working, and also the provision of deficit grants to the industry to enable it to carry on in a temporary form.

All this is depressing. Far from being optimistic about the future, one comes to the conclusion, based on the Minister's statement, which is a statement from the Government, that the outlook for the mining industry is very grim indeed. We must try to dismiss that depressing concept as rapidly as we can.

Very few noble Lords have put down their names to speak. The noble Lord, Lord Diamond, has his name down, along with a noble Lord on the other side, really in reply to the debate. That is all. No other speaker is taking part to offer an opinion. There is something wrong.

I listened with great interest to the excellent speech delivered by my noble friend Lord Stoddart. I would agree with almost every word he said, except for one thing. I would not condemn the Government at this stage for not engaging in a thorough investigation to find out what has happened and how it can be prevented in future. The Government should be condemned not because they hesitate to come to a definite decision, but because they failed to intervene more than 12 months ago when the dispute appeared to be imminent.

I remember at the time taking part in the discussions and saying that the Government must intervene. When I was a junior Minister, Secretary for Mines, and a member of the Cabinet as Minister of Fuel and Power, whenever there was a dispute, however minor, I intervened at once in order to prevent its development. I could not understand at the time why the Government should adopt the high and mighty attitude of, "We want to have nothing to do with it. It is a matter for the National Coal Board" etc., and supported by Mr. Ian MacGregor. That was a profound error of judgment on the part of the Government. It is no use now condemning the Government for their failure to promote something of the nature of a thorough investigation. In any event it is no use criticising the Government.

I want to say quite definitely—it has been said before, and it has been implied many times by myself and others associated with the coalmining industry, those actually engaged in it and those who have written and spoken about it—that the production of coal in its raw state will never be profitable. It never was. It failed to be profitable under the ownership of private owners such as Lord Londonderry and Lord Lambton, and a great many other of the old aristocratic landowners and mine owners. When the pits were so unprofitable at that time those mine owners conceived the notion of forming an amalgamation of pit owners in order to provide the possibility—it was no higher than that at the time—of making some kind of profit, or at least covering their expenses. It was no more than that. Production of coal in its raw state will never, in general, pay. It will never be profitable. It cannot be.

Then how could it be profitable? It could be only by producing those products which can pay, such as tar, oil, and a variety of other products which have been mentioned, and indeed have been dealt with in a limited fashion—and I repeat and emphasise, a limited fashion—by the National Coal Board under the control of various chairmen and directors, some of whom are Members of your Lordships' House.

There has been a limited, modest effort to process coal in order to make it more profitable. Not until we understand that it is not a coal mining industry but an energy producing industry, to be associated with oil, electricity, and nuclear production, is there any prospect of it becoming profitable at all, or even paying its way. That is essential.

This subject calls for a thorough debate in your Lordships' House. I deal with merely the fringe of it. Without something of this kind being done there is not very much hope. You do not solve the problem by giving the men money. They open small businesses, and before very long they find themselves in the realm of bankruptcy. That will never do.

Besides, the closing of pits is nonsense. If there was time, I could this afternoon offer Members of your Lordships' House several examples of incidents in the past 40, 50 or 60 years when pits were closed down in some parts of Scotland—I was more closely associated with those areas than with the south, Yorkshire, and the Midlands—because of excessive flooding. They were completely closed. Only a few years later it was discovered that the flooding had partly settled down and they were able to start up again. These pits are now working, where they had been closed down for several years on end. This is what happens.

There are geological faults which have to be closely studied. There are economic faults. There are the operations of the men themselves. There is the provision of the right kind of equipment. They are now producing masses of equipment—I emphasise this—at tremendous cost, but it is not producing profits.

In order to achieve profits we must produce those products which can be sold not only in the United Kingdom but in all parts of the world—in the African countries, in colonial countries and elsewhere—where they are only too glad to buy them, provided that the prices are reasonable. They never will be reasonable until we use the whole resource in a processed fashion and not in the stupid fashion of just burning it away as we do.

Then there is the question of liquefaction. South Africa has been doing it and to some extent it has been successful. It has been attempted in the Lancashire coalfields, and I understand that it has met with some success. It has to be done on a grand scale. It requires finance, I agree, and there are certain risks entailed, which I understand. However, unless the mining industry is regarded not as a mere factor in the production of a raw product, coal itself, but as the basis of a great variety of products, there is no hope for the men who want to work in the mines and for the nation which relies on energy to carry on its manufacturing, etc. Unless these things happen, there is no hope.

I enjoyed the speech—if I may use the term "enjoyed"—of my noble friend Lord Stoddart. There is really no enjoyment in this at all. The Government have made mistakes. They made mistakes more than 12 months ago. They should have intervened then. Now what are they doing? I do not blame the Minister. Far from it. He is just telling the story as no doubt it is presented to him. It is not enough. I repeat that there has to be a thorough investigation. Geological questions, economic questions, manpower questions—a whole variety of questions have to be considered before we come to any definite decision. Until that is done, there is not much hope of being optimistic about the future of this great national industry.

3.50 p.m.

Lord Diamond

My Lords, it is always a great pleasure to follow the noble Lord, Lord Shinwell, who speaks on this matter with such authority, with such clear recollection of his own responsibilities as a Minister and with the youthful vigour which we all have come to expect from him. There is no sign whatever of his seam running dry. We have nugget after nugget and long may we continue to receive it. The noble Lord said, and every speaker has so far said, that this is an important issue indeed. The whole of British industry was originally based on the coal deposits, and anything to do with billions of pounds going into the coal industry must be regarded as of great importance indeed.

My first pleasant duty is to thank the noble Lord the Minister for having explained the Bill in such easily-understandable terms, and to say to him that although I cannot go back as far as the noble Lord, Lord Shinwell, I can certainly go back to the period that I recollect very well when I had some measure of responsibility for these matters for six long years and when the subsidy to the coal industry averaged during those years some £5 million a year. Now we are talking about thousands of millions in one year alone. Naturally, it comes as somewhat of a shock to me to have to deal with figures of this magnitude.

One can say immediately that so far as this money is needed for investment in the coal industry to produce greater efficiency and greater competitiveness, we on these Benches agree that the mining industry should have the money, the Government should have their Bill and we wish the industry well in that respect. It is no different from any other industry. It will flourish and provide employment so long as it can sell what it produces. To sell what it produces it has to produce at a competitive cost, which is what the money is in part needed for, and it has to ensure that it markets what it can competitively produce. In that respect, I underline everything that has so far been said in this debate about the need of the industry to go out even more strongly for markets both in this country and abroad to sell its products.

Although I have no wish to rake over the ashes of the coal dispute, nor am I competent to express any original ideas on that, I have some ideas to put before your Lordships' House, which is entitled to discuss these matters in a constructive way, notwithstanding that this is clearly a money Bill. The first thing I want to say to the Government is, as has already been indicated, that what they are doing at long last in encouraging the Coal Board with regard to NCB (Enterprise) Limited is too little. The noble Lord the Minister will remember that before it was incorporated I put this view forward on two occasions. On both occasions I received very dusty answers from the Government. They were slow to come to the conclusion that this was a matter that ought to be within their responsibility and ought to be encouraged. It was pushed very hard indeed by my right honourable friend in another place, Dr. Owen; and it was some time before it came into being. It has, thank heavens, come into being but at far too low a level of activity. I ask the Government to bear in mind that they have been slow in coming to accept this idea and somewhat modest in their provision of funds for its activities which should be much enlarged.

Part of the moneys that we are concerned with cover some of the cost of the coal strike, so far as that has been quantified. But the usual problem in life is that it is easy to talk about figures that can be quantified. It is very difficult to talk about figures that cannot be quantified. Although this talks about the loss to the coal industry—and the Minister made it clear that there is nothing like the total loss involved yet, and we shall hear a figure in due course—that loss is the loss to the National Coal Board. That is by no means the total loss to the country. It does not cover the loss to the miners. It does not cover the loss in physical hardship or in cash. Such small amounts of savings as miners had in general terms have totally gone. It does not cover the legacy of bitterness which still prevails. None of these costs is included.

Looking to the future, what can one usefully say about this whole episode? What one can say—one says it with care but one has to have courage in this House to say what one truly believes—is that the conclusion from all this is that strikes simply do not pay. They damage the strikers, as I have tried to illustrate, and we know about that; they damage the industry; they damage the country. It is not surprising that our economic advance is nothing like it should be when we have these enormous, self-inflicted wounds to cope with. I have said before, and I say it again, I look forward to the time when the strike as a method of resolving industrial disputes will be regarded as as relevant as is duelling: it is an exercise in violence and power; it is not an exercise in reason. It does not produce just results. It damages those who participate, and very properly we have given up the idea of saving our honour by challenging for a duel. I hope that the time will come before too long when we will regard this as an utterly irrelevant method of settling disputes. What we need to find is an agreed method—I repeat the word "agreed" in capital letters—between all sides whereby industrial disputes which will inevitably arise can be settled by reason, by talking round the table and not by a resort to violence of this kind.

What then are the Government doing to secure this? When I raised this matter, I was told by the Government Front Bench that these lessons will be drawn, the matter speaks for itself. However, I do not think it does speak for itself. I do not think the lessons will sufficiently be drawn, and I think the Government have a responsibility now because now is the time when people are aware of what has happened. Everything a Government does has to be concerned with correct timing. It is now that the Government should be launching a nationwide education programme putting clearly before all the people the costs of disruption in work in all forms of workshop and everywhere else where that can be assessed, showing what effect that has on the stability of work in the workshops concerned and on the economy of the country as a whole.

Discontinuity in production processes is damaging almost beyond measure. What we need to do is to have a method whereby production continues and disputes are settled by agreement separately. One of the greatest productive nations in the world and possibly our greatest competitors has shown us the way. I refer to the Japanese. They are able, apparently, to find methods of reaching agreed arrangements with their workforces whereby this outmoded, damaging method of settling disputes can he avoided and a better, more rational method put in its place.

The first suggestion that I have to make is that, in addition to what I have already said about NCB (Enterprise), there should be launched a nationwide education policy bringing before the public the whole of the facts relating to strikes and their effects and the damaging effects on those who strike, on the industries affected and on the economy of the country as a whole. The second suggestion that I have to make, which stems from my own experience in the Royal Commission on the distribution of income and wealth, is that it would be a very good idea if the Government were to set up a wholly independent body of that kind, its members drawn from all sections of the community, obviously including employers, employees, miners, people of all political persuasions and of none. Its function would be to look into the costs that are being incurred in any strikes that take place, in any discontinuity of work which takes place: stoppages, informal strikes, official strikes and the rest.

It ought to be a fairly straightforward matter for these costs to be calculated while they are being incurred, so that the country can be made aware of the cumulative cost of continuing this outmoded method of solving disputes and resolving difficulties. I do not mean a body which has any suggestions to make as to how it should be avoided; that is not the purpose of it. I mean a body like the Royal Commission to which I have referred, a body which has the responsibility for arriving at facts and doing no more than putting before the public the facts agreed between people of every philosophy and every walk of life. If we are able to do that, we may make some progress, we may improve labour relations and we may see in due course an end to the kind of tragedy whose costs we are now discussing.

4.2 p.m.

Lord Energlyn

My Lords, before the noble Lord sits down, perhaps I may be permitted to take his discussion a little further. It is so dismal to listen to the talk from all sides of the House about an industry which apparently has no hope or future and the suggestions that what we are doing is providing money for a decent burial. From where are the imaginative ideas for the future of coal coming? Where should they come from? They should come from the National Coal Board. They did come from the National Coal Board until about 1960, when the National Coal Board was taken over by politicians and subsequently by accountants. The technocrats had practically no place in the National Coal Board.

By contrast, look at gas. It is run by superb technocrats. Look at the industry today, run by the finest technocrat of the gas industry in the world. His foresight is terrific. He went to natural gas and so put gasworks out of commission. But, realising that there was a limited future for natural gas, he has produced the finest gasifier in the world, ready to go into action when the gas supplies fail. Here is the new market for coal, because he realises that ultimately when you convert coal into hot gas you can suck electricity out of it direct—and this has been proved by the Russians—so that in future we should be building gasworks to produce electricity.

Where do we see in the National Coal Board the ideas that are germinating from places like Hungary where they are producing coal and transmuting it into its geological beginnings, into a fertiliser—a fertiliser with interesting qualities? Ask yourselves, my Lords, how this coal was formed. Some 300 million years ago there were growing forests of a size which has never been repeated since. It took us a very long time to understand the reason for this. We have ultimately discovered that the reason was that the soils contained no bacteria which caused disease, so the plants grew disease-free and produced these enormous quantities of humus which eventually formed the seams of coal upon which this country has been so dependent.

Geochemically, there is a fascinating difference between the coals produced in that geological period and coals produced afterwards. The coals produced in that geological period produced compounds which—I ask your Lordships to forgive the simplicity of expression—were both left-handed and right-handed; and there is no political connotation there. They were compounds which were left-handed and right-handed. Today nature uses only left-handed compounds. The reason she abandoned right-handed compounds was that she needed to produce things like pollen and glandular tissue in the train of evolution.

I shall not go into that now, but what I am getting down to is this: that these singular, left-handed and right-handed compounds possess antibiotic properties. I have proved this personally and we have shown this in Hungary where I worked with the Hungarians.

Here, in this country, one gets no response whatsoever for this kind of work. It is like trying to go into the Vatican and persuading them to become Protestants. It is hopeless. This is a sad state of affairs. The Hungarians have proved—I have been working with them for over 10 years—that we can accelerate the rate of growth of conifers by a factor of three; and these trees are disease-free.

Additionally, we have been able to show that, by processing coal in a very economic way, we can produce new types of wood preservative. There is a market of £40 million in Europe alone for wood preservatives; so there is a new market such as that for which my noble friend Lord Shinwell is appealing. To come back to my main point, this is not an industry which is ready for the undertaker. It is a great industry but it needs an injection of imagination. What you need to do is to put the technocrat in charge of the industry, and not the bureaucrat.

4.9 p.m.

Lord Gray of Contin

My Lords, not surprisingly, when I was Minister of State for Energy in another place one thing that I always did was to read there the energy debates which took place in your Lordships' House. Indeed, if I may deal briefly with the last speech first, it is little gems of contributions such as we have been given this afternoon by the noble Lord, Lord Energlyn, that made that very much worthwhile.

I should like to thank the noble Lords, Lord Stoddart, Lord Diamond and Lord Shinwell, for the welcome they gave to the legislation we are discussing this afternoon. I shall try to deal with some of the points which they raised. The point which has come most clearly out of our deliberations this afternoon is the very great interest and enthusiasm for the coal industry which exists on all sides of this House. Genuine hope has been expressed over and over again that the sad and appalling troubles which the industry has just come through will not be repeated and that we shall see a spirit within the coal industry which will fully justify the massive injection of taxpayers' money which is being made into that industry and which has been made in that industry over recent years.

We in this country are richly endowed with energy resources: oil, gas, nuclear power and coal. Over a third of the primary energy demand in this country is met by coal. Three-quarters of our electricity is normally produced by coal-fired generation. Energy demand from coal in the industrial market, helped by the Government's coal-firing scheme, is steadily growing. The market for coal is there—if the opportunity can be grasped—if there is confidence in securing supplies of coal at the right price. That is the message which the industry must take on board. Indeed, there were many things in the speech by the noble Lord, Lord Diamond, with which I found myself in total agreement. I think the attitude which he has adopted towards the activities of the National Coal Board should be commended by all who heard him.

While I welcome the generosity of the remarks by the noble Lord, Lord Stoddart, so far as the Bill was concerned, I could not obviously agree with everything he said about the industry. But he suggested that we should, at this stage, be giving our forecasts on things such as output, production, and the future of jobs within the industry. I am sure that he will realise that after an industrial dispute such as the industry has suffered and which was so damaging to the industry—the details of which I gave in my opening remarks—it would simply be impossible for the board to make an accurate assessment of what that has actually cost the industry not only in terms of money but in terms of production at the present moment. All I can say is that the industry is already tackling the situation in a very realistic fashion. In accordance with the undertaking given at the end of the strike, each of the National Coal Board's areas, after assessing damage done during the strike, has now held a review meeting where the area directors have outlined plans for their areas. Each one has now held such a meeting. This is certainly very rapid action on the part of the areas, considering all they have to do in a very short period of time.

The noble Lord suggested to me that the coal conversion programme should be encouraged; and indeed the Government still encourage firms to participate in a coal conversion programme. Some of the figures which I have given help to support that point. The question of the enterprise subsidiary was raised by the noble Lord and also by the noble Lord, Lord Diamond. Here I would take issue with what they said. I do not think that it is fair to criticise the Government for making £10 million available for this scheme. The criticism of course is that that is not enough. But at the present moment offers of up to £1 million have already been made to various projects which have been submitted. A further £3 million worth of projects is under consideration at the present time. I think perhaps it is better for any scheme of this sort to start from small beginnings. We must not forget that, although the object of the exercise is excellent—it is to see small projects starting up and maturing—we are dealing with taxpayers' money. Therefore we must be very careful how we spend it. We must make quite sure that the projects which are submitted to the enterprise company are worthwhile. They must all be very carefully examined before money is given. But I welcome the fact that noble Lords agree with the policy which the Government are following. I would suggest to them that it is perhaps early days yet to be critical of the total amount of money available.

Lord Stoddart of Swindon

My Lords, I am most obliged to the noble Lord. I appreciate that things have small beginnings and certainly we do not want a waste of public money. But it is the way the scheme is seen by the miners and people outside that is important. If the Government are seen to be looking at the thing as small scale then of course industry will look at it in that way. What I and I think also the noble Lord, Lord Diamond, were asking for was an absolute commitment by the Government that if this scheme gets off the ground, and if people are interested in going to, and have been attracted to, the coal industries, it will not founder for lack of Government support and Government money. That is what we were asking for. I would hope the noble Lord could give us that assurance.

Lord Diamond

My Lords, may I also ask the Minister whether he would be good enough to bear in mind that we are not merely considering the appropriate help to individual activites? We are considering maintaining community life in these communities which will rot unless there is something there to replace the lost pits.

Lord Gray of Contin

My Lords, I accept the comments of both noble Lords. Obviously, I am not a Department of Energy Minister at the present time. Therefore I cannot give the kind of assurance which the noble Lord requests. But what I can say is that the Government certainly indicate the confidence which they have in the coal industry by the amount of money which they are prepared to invest in it at the present moment.

Of course the philosophy of this Government would obviously make them sympathetic to projects which were arising from coal mining areas where these projects were likely to be the result of entrepreneurial spirit and initiative on the part of those who previously worked in the industry. I can certainly say to the noble Lord that the Government are fully behind the scheme. So far as concerns the funding, I cannot add to what I have already said.

I should just like to take up one of the points made by the noble Lord, Lord Shinwell, whose contributions we have come to enjoy so much, and whose vast experience of the coal industry is obvious every time he makes reference to the subject. He spoke about coal products. I would confirm that new ways of burning and utilising coal are being developed all the time. Fluidised bed boilers, use of coal water slurries, and longer-term technologies are also being developed, such as coal gasification and coal liquefaction. There can be no doubt that provided costs come down there will be plenty of markets for United Kingdom coal both at home and overseas. But of course I would agree with the noble Lord that it is those other uses for coal which will be all important in the future. I am happy to confirm to him that the National Coal Board is very much aware of this aspect and is continuing its research and development of these new coal uses all the time.

I should like briefly to mention the question highlighted by the noble Lord, Lord Diamond. I referred to it just now, and of course it is terribly important. So far as the production of coal is concerned, what the National Coal Board and indeed the whole industry needs to grasp from now on is that it must sell what it produces and, as the noble Lord, Lord Diamond, rightly said, it must make sure that it markets what it can competitively produce. The whole philosophy of marketing has got to be carefully examined but, however many advisers and experts we have guiding us in such matters, it is the cost of the product at the end of the day, the cost at which you can sell the product and whether it is competitive or not, which will determine the usage.

We have had such an interesting debate this afternoon that I could go on for some time longer discussing the various points which have been raised but, after all, the main purpose of our deliberations is to consider the Bill which is before the House. Therefore in conclusion I would again thank noble Lords who have participated in the debate and I commend the Bill to the House.

Lord Stoddart of Swindon

My Lords, I am obliged to the noble Lord for allowing me to intervene. I wonder whether he would in some way deal with the point I raised about the miners being dismissed and not reinstated. That is an important matter and I think it requires some reply from him.

Lord Gray of Contin

My Lords, as the noble Lord will be aware, miners who were dismissed and not reinstated are free to appeal to industrial tribunals, and indeed some 450 of them have already done so. I would not wish to comment on individual cases, but my honourable friend the Parliamentary Under-Secretary of State said during the debate on this Bill in another place that if there were any specific cases which were drawn to his attention he would of course have them investigated. However, I think we have to accept that the National Coal Board is acting totally within its powers in these matters. The National Coal Board is as anxious to see this industry prosper as we are, and indeed as I am sure is the National Union of Mineworkers.

But questions such as the one which has been raised by the noble Lord, Lord Stoddart, I think are better dealt with outside this House. I hope he will accept the figure which I have given him as being indicative of those miners who have themselves taken appropriate action in regard to appeals.

On Question, Bill read a second time; Committee negatived.