HL Deb 12 March 1985 vol 461 cc118-20

2.55 p.m.

Lord Morris

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what is the purpose, meaning and efficacy of Section 1(4) (c) of the Coal Industry Nationalisation Act 1946.

The Earl of Avon

My Lords, the section requires the NCB to aim to avoid persistent losses on revenue account. The Government's policy is aimed at restoring the coal industry to financial viability so that it can start to earn a satisfactory return on its assets.

Lord Morris

My Lords, I thank my noble friend for that Answer. Will he be surprised to learn that it does not go quite far enough; namely, he has not stated in any way the efficacy of that particular section? Why is it that successive Governments have flouted the quite clear intention of Parliament by virtue of the provisions of that subsection?

The Earl of Avon

My Lords, I do not believe there is any conflict between Section 1(4)(c) and the Government's published objectives for the industry. Section 1(4) (c) makes it clear that the board's revenue shall be not less than sufficient to meet their outgoings; that is, to break even is a minimum objective. The objectives of the NCB require the board to earn a satisfactory return on assets, to secure sales which are profitable on a continuing basis and to reduce unit operating costs.

Lord Wedderburn of Charlton

My Lords, does the Minister not agree that it is also very important that this subsection is subject to the board's duty under subsection (1) of the same section to make supplies of coal available in a way best calculated to further the public interest in all respects? Therefore, this particular subsection on which the noble Lord has asked his Question is subject to an obligation to have regard to all public interests, including a long-term energy policy and the social interests of the communities that depend upon pits.

The Earl of Avon

My Lords, what the noble Lord says seems to make admirable sense and I look forward to looking at it tomorrow.

Lord Molloy

My Lords, does the Minister not agree that one of the important aspects of the entire nationalisation Act did not rest merely with the making or the saving of money? The number of miners slain between 1920 and 1945 amounted to roughly 300 a year—slain in a second, most of them—and that figure was reduced to 20 and then to five within 24 months of the taking into public ownership of the coal industry by the nation. That is a very important aspect in all our discussions on the public ownership of the mines.

The Earl of Avon

My Lords, I note what the noble Lord said and, again, I will look at it tomorrow.

Lord Stoddart of Swindon

My Lords, would I be correct in thinking that on the trading account the National Coal Board does, in fact, break even, but that it makes its losses through the enormous interest payments on capital account? Therefore, is it not necessary and, indeed, overdue that there should be a capital reconstruction in the industry?

The Earl of Avon

My Lords, if I understood the noble Lord's supplementary question correctly, I cannot agree with him that there is a £875 million deficit grant. On the other hand, there is a balance of another £210 million plus the small sum on the redundant mineworkers' payment scheme which makes it up to £1.3 billion. That is the difference between the two sums. As regards restructuring, the underlying problems of the industry are that its costs are too high because of the tale of the grossly uneconomic pits.

Lord Harmar-Nicholls

Is my noble friend aware that many businesses that are looked on as being in trouble would not be if they could ignore the cost of servicing their capital expenditure?

The Earl of Avon

Yes indeed, my Lords.