HL Deb 05 February 1987 vol 484 cc402-12

8.7 p.m.

Viscount Davidson

My Lords, I beg to move that this Bill be now read a second time.

A Coal Industry Bill is far from being a novelty in this House; indeed the introduction of such Bills has been a regular occurrence since this Government came to office. However, this is the first of those Bills which I have had the privilege to introduce; and I am particularly proud to be associated with a Bill which does so much to pave the way for a secure and prosperous future for the British coal industry. In a few moments I shall explain the provisions of the Bill, but first I should like to say a few words to set the background.

Throughout their time in office, the Government have demonstrated their confidence in the coal industry by making available large sums of money for investment and to assist the industry in tackling the enormous problems which had beset it for many years. With the Government's help the industry began seriously to address those problems and by 1983 some progress had been made toward putting British Coal on a sound commercial footing.

I do not need to remind your Lordships of what happened then. The industry was plunged into the longest, most senseless and most destructive strike that this country has ever seen. I shall not dwell on its causes or its conduct but I would stress the immense damage that the strike did to British Coal's timetable for financial recovery.

After the strike management and workforce came together to repair the damage. Enormous progress was made in a very short time. But then, early last year, came the dramatic tall in oil prices. From British Coal's point of view it could not have come at a worse time. However, despite these vagaries of the world oil market, British Coal continues to make strides in the right direction. This has been particularly notable in the case of productivity. After years of stagnant productivity levels we now see pit, area and national productivity records broken week after week. In 1983–84 the average output per man shift was 2÷43 tonnes. The figure now regularly stands above the three and a half tonnes mark. For that remarkable improvement I am pleased to pay tribute to all those mineworkers in every part of the country who have made it possible, regardless of the trade union to which they belong.

Important as increased productivity may be, however, it is only part of the picture, and not enough by itself to ensure the future health of the industry. In the period since the end of the strike, there has been a dramatic and overdue restructuring of the industry. Uneconomic capacity has been closed and large numbers of men have volunteered for the very generous redundancy terms which have been available to them under the Government's redundant mineworkers' payments scheme.

This latest period of major restructuring of the industry is now drawing to a close, but it is in the nature of an extractive industry that it should be in a constant state of change. It is therefore not possible to say that there will be no continuing restructuring. However, from now on the industry will not need to continue restructuring at the same pace. There are some redundancies still to come. Pits will continue to close, as they have always closed, under all governments. But the Bill which is before your Lordships today presages a new period in which the industry finally has within its reach the prize of financial independence.

I turn now to the details of the Bill. The Bill has three main purposes which I should like to explain before describing the contents of the individual clauses. Each of the main purposes of the Bill in some way exemplifies this new era which we are entering. First, the Bill changes, formally, the name of the National Coal Board to the British Coal Corporation; it was fitting, after the changes that have taken place in the industry, that it should also change its trading name and adopt the name of "British Coal".

Second, the Bill further extends the Government's financial commitment to the coal industry, still necessary in this transitional period. Third, the Bill makes provision for the participation of the Union of Democratic Mineworkers and other minority unions in the management of coal industry trusts, social welfare organisations and superannuation schemes. This marks the rise of a new realism among those employed in the coal industry and a realisation that the future course of the industry lies in their hands.

I will now take your Lordships through the first four clauses of the Bill in some detail. The first clause is necessarily that which changes the name of the National Coal Board to the British Coal Corporation. The trading name "British Coal" was adopted last year for very sound commercial and marketing reasons. Others have chosen to believe that the change presages privatisation but I can assure your Lordships that there is no truth whatsoever in that allegation. British Coal is a more modern name than National Coal Board, a name which neatly sums up the nature of the product and a name of which I believe we can all be proud. This provision in the Bill is intended simply to tidy up the current problems caused by having two names.

Clauses 2, 3 and 4 deal with financial provisions. Clause 2 provides for the continuation of deficit grant powers. The Government introduced the power to pay these grants in the Coal Industry Act 1980. They are intended to eliminate or reduce any group deficit of the corporation and its subsidiaries. In the present Bill the power to pay these grants is extended for two years; that is, to the end of the corporation's 1988–89 financial year.

In Clause 3, we come to new territory. The Government announced in March that, with the prospect of a much reduced pace of restructuring in the industry, the time was approaching when British Coal would again be able to take more responsibility for deciding and financing their redundancy terms. The present redundant mineworkers payments scheme is therefore not to be renewed after March 1987. In October last year, British Coal announced new terms for voluntary redundancies.

It is not, however, the intention abruptly to end all support in this area. Payments to men who have taken redundancy under the RMPS will continue to be made under the relevant statutory instrument. Payments to the corporation in respect of earlier years are covered by Clause 4. The new grants system under section 3—perhaps we should call them restructuring grants—is designed to be appropriate to an industry which is progressing to commercial viability, but which does not yet have the financial strength fully to fund the measures necessary to complete the transitional process.

Clause 3 will establish a flexible régime under which, by the introduction of annual orders, grant can be paid towards a fairly broad range of expenditure associated with restructing and the maintenance of concessionary coal and social welfare provisions. The use of affirmative resolution order-making powers will enable the terms of the grant support to be set out shortly before the start of a financial year of the corporation in the light of circumstances at the time. The Government would expect, as the corporation's financial position improves, that there would be a gradual transfer of some of these costs to the corporation. The power to make these orders applies initially to the 1987–88 and 1988–89 financial years of the corporation, but may be extended by up to a further three years. The kinds of expenditure by the corporation which will be eligible for grant are listed in Schedule 2 to the Bill.

Clause 3 refers to costs incurred after March 1987. However, the corporation will for some years to come have to spend money on costs which were incurred, or on obligations entered into, prior to that date. For that reason, Clause 4 makes various transitional arrangements to allow grant towards that expenditure to continue to be paid. This will be done on essentially the same terms as have so far applied under Section 6 of the Coal Industry Act 1977. That summarises the financial provisions of the Bill.

The next three clauses of the Bill are provisions which must be introduced because it is clear that the changes they allow are proving difficult, or impossible, to make in any other way. It saddens me in a country so proud of its democratic traditions, and for an industry whose workers were proud of the democracy in their union, that such provisions should have to be made in legislation.

Clauses 5, 6 and 7 are designed to protect basic rights of employees in the coal industry; rights which, since the strike, have been denied to large numbers of miners around the country. Many of these miners are represented by a democratic trade union which has been refused affiliation to the Labour Party and the TUC. It is not for the Government to engineer affiliation for a union to another political party, although I am bound to regret the response it has had from the party of its choice. This Bill can, however, help thousands of miners in their fight for fair representation on the institutions of the coal industry.

In June last year, the High Court in effect confirmed that the coal industry's previous conciliation machinery must be changed to recognise the emergence of the Union of Democratic Mineworkers. British Coal was thus obliged, as indeed it wished, to negotiate new conciliation machinery with the NUM and the UDM, under the terms of the Coal Industry Nationalisation Act 1946. I understand from British Coal that proposals for this new machinery are being discussed with the unions. It is therefore unnecessary to make provision in this Bill for ensuring participation in such machinery.

The Bill deals with three specific areas in which powers are to be taken. These are miners' welfare trusts, coal industry social welfare, and superannuation schemes. Clause 5 empowers the Charity Commissioners, after receiving an application from an employee organisation, to amend charitable trusts related to the coal industry if the members of that organisation constitute a substantial portion of those who may benefit under the trust. Their aim in amending the trust would be to secure for that employee organisation fair representation among the trustees of the trust. The Charity Commissioners already have power in this area, but can at present exercise them only if they receive an application from the charity itself. In the present situation, in which many of the trustee bodies are dominated by the NUM, such approaches are unlikely. The provisions under this clause are therefore a necessary extension of existing powers.

The miners' welfare trusts are a very important part of everyday life in coal mining communities. It is sad and disappointing that the NUM has refused to agree that the necessary changes would be made to give the UDM its fair and proper role in the running of trusts in those areas where the UDM is dominant or strongly represented. Similarly, the NUM has denied the UDM and other minority unions a proper role in the management of social welfare organisations within the industry and, in particular, the Coal Industry Social Welfare Organisation. Clause 6 empowers the Secretary of State to amend the constitution of a coal industry social welfare body if it appears to him, after receiving representations from the corporation, that any organisation which represents a substantial proportion of its employees does not enjoy full participation in that body.

If that is the case, he is empowered by this clause to make an order amending the body's constitution to confer on the employee organisations rights to full participation in the affairs of that body. Before such an order is made, the clause requires consultation with the corporatioin and those organisations which represent substantial proportions of the corporation's employees. As I have said, it has been the Government's hope that changes such as these could be achieved without legislation. An order under this section is a last resort, but one which cannot be delayed much longer if all mineworkers are to be allowed the participation in their own affairs which is their due.

Clause 7 gives the Secretary of State powers in relation to coal industry superannuation schemes similar to those I have just outlined for social welfare bodies. Again consultation is required before an order can be made. At present many thousands of mineworkers belong to a pension scheme in the running of which they have no say whatsoever. This cannot be right.

I have every confidence that the financial provisions in this Bill will enable the corporation to pass comfortably through the present phase which will see its final transformation from one of the lame duck nationalised industries to a fit and commercially viable enterprise in tune with the needs of the modern world's energy markets.

I am similarly confident that the provisions dealing with union representation on the institutions of the industry will achieve their aim of defending the democratic rights of mineworkers. It is in this spirit that I commend this Bill to your Lordship's House. I beg to move.

Moved, That the Bill be now a read a second time.—(Viscount Davidson.)

8.21 p.m.

Lord McCarthy

My Lords, I should like to thank the noble Viscount for the way in which he has introduced the Bill. It was much less provocative and with much less coat trailing than the way in which it was introduced in another place. The Opposition do not disagree with him. We do not dispute the Bill's three main objectives: to change the name of the Coal Board; to extend certain financial commitments arising out of the disastrous dispute of 1984–85; and to facilitate the recognition of the Union of Democratic Miners within the industry.

I wish to concentrate on the third of those objectives, although I shall need to say a few words about the first two. I want to do that partly because that was the area which, it has been suggested, was not debated in another place and partly because there are a number of matters that we should make clear about the Opposition's attitude to the Bill's third objective. Nevertheless, let us turn to the Bill's first aim—the Coal Board's change of name.

The Secretary of State in another place—I am bound to say that the noble Viscount failed to explain to me at least why it was necessary to change its name—said that the change of name was for sound commercial and marketing reasons. He said that it was to add to the marketing attractiveness of the product. We can call a product what we like. It has nothing to do with the company's name. If one buys a good raincoat, one asks for Burberry; one does not ask for a GUS coat. No one knows what became of Mr. Benson and Mr. Hedges; no one knows whether Mr. Kipling ever existed; and no one knows how many names Mr. Rupert Murdoch has. One can call one's product what one likes. The name is changed all the time. In few places is there an identity between the name of the product and the name of the company. In most private enterprises there could not be.

Sir Ian MacGregor started calling the Coal Board's products products of British Coal back in 1985. There was no need for a statute then and there is no need for a statute now. If the Government did not want to do other things, they would not be asking us to do this.

Secondly, there is the Bill's aim to extend certain financial commitments. The Opposition's view in another place was that the size, the distribution and form of those payments and provisions made clear to them the intention of the board and the Government to continue the industry's run-down. They are continuing to plan for more redundancies; they are continuing to carry forward what we have always regarded as the disastrous best-seams policy. We still believe that if the Government were to survive long enough they would be setting the scene for the industry's eventual privatisation.

I know that at the end of his speech the noble Viscount said that that was not the case. But I noticed that when he talked about the commercial uplands and the onward march of the industry, he did not say that it would be a public industry when it became more commercially viable. We say that at the very least the Government are leaving that option open.

I come to the Bill's third aim—to facilitate the recognition within the industry of the Union of Democratic Mineworkers (Clauses 5 to 8). Those are essentially enabling clauses. They allow the UDM to be represented on the industry's ancillary bodies. The first point that I want to make is that the Opposition have at no time proposed and are at no time proposing to oppose that development. It is the logical consequence of the board's decision to recognise the UDM for bargaining purposes. Given the subsequent legal decision in May 1986, that decision conforms with that. There is a difference between us. The difference between us on the introduction of those clauses, which we do not oppose, is that we do not exult about this development.

We regard the break up of the natural, hardly won and hardly fought for miners' unity as a disaster. It is perhaps a necessary consequence of the Bill, but it remains a disaster. The division in disunity is true. Shakespeare said: 'tis true: 'tis true 'tis pity; and pity 'tis 'tis true. That is why we have to have this part of the Bill.

That brings me to the second point, which was made in another place, although I do not believe that the Government took the point. The logic of doing what the Government propose to do, and the logic of doing what the Coal Board did on its own initiative, is to break up the long-established system of the exclusive bargaining rights which the NUM has had in the industry since nationalisation. We must think that through. We must think through the logic of the recognition of a minority union at national level and at area level in the case of Nottingham. It has implications. We sought to argue in another place that it has implications at unit level. The sole point at issue between us and the Government in this Bill is that the Government and the Coal Board, or British Coal if the noble Viscount prefers, have not fully accepted the implications of what they have done. The Government and the Coal Board have moved from a system of exclusive bargaining rights to a system of equal rights for the UDM at national, and where appropriate at area level. We suggest that nothing effective has been done at local or unit level to carry that basic change of policy into effect.

It was to remedy that position that the Member for Salford, East in another place moved a new clause in Committee on 11th December (col. 124 of the Official Report). My main question—indeed my sole question—to the Government tonight is whether they have thought again about their opposition to that new clause. It was based on Article 4 of ILO Convention 98, which so far as I know has not yet been revoked by the Government, the aim of which is to protect the rights of minorities, especially those of recognised minority unions in majority areas.

The object of the clause is to grant freedom to represent members and service members; to grant equal bargaining rights; and to do that via a return to the provisions of the old conciliation scheme, including rights of arbitration as under that scheme. As I say, we are asking the Government, because we wish to come forward in Committee with a similar new clause, to think again.

The Government's reply in another place, as I understand it, was that the provision of the new clause moved by the Labour spokesman was not necessary because everything that is asked for is being done already. I hope that the Government will argue that way tonight and in Committee, because we believe that we can prove this is not the case. Examples were given, and further examples can be given, of activists in the Nottingham and south Midlands—members of the National Union of Mineworkers—where the UDM is recognised who have been discriminated against for trade union activity. Mr. McGinty of Merton and Mr. Wetton of Bevercotes were mentioned specifically by my honourable friend in another place.

The board's reply, as I understand it, is that certain restricted rights do exist at unit level, that the NUM can make representations on local issues but that it cannot negotiate, and that, if individuals of the union are involved in grievances, then they can be present as "a friend". To paraphrase A. A. Milne, that is not what Tigger calls bargaining rights, and that is not what the NUM enjoyed in those areas before the recognition of the UDM. The final point to make is that what we are suggesting—this was the central difficulty with the Secretary of State in another place, because I do not think that he took it on board—is as much in the interests of the UDM as of the NUM. The UDM is in a majority in some areas and a minority in other units; and in other places, for example, in Derbyshire and the Midlands, it would be a beneficiary of our proposals. What we are suggesting is that both unions should have minority rights, in particular in those units where they have a significant membership alongside majority unions. We are saying that this is the automatic, natural and logical consequence of a move from a system of sole bargaining rights to a system of parallel unionism.

I should like to finish by saying a word about the attitude that I would adopt and that I think my party would adopt to the trade union principles in the mining industry. In my experience, nothing winkles out the true friend of trade unionism like reactions to a breakaway. It is analogous to, although it is not the same as, the attitude of a believer in a marriage to the knowledge and news that one of the parties has left home. The true friend of trade unionism, like the true friend of the instutition of marriage, laments such a development. He hopes, sometimes in the face of all the evidence, that there can be an eventual reconciliation. It may take time, there may have to be changes, instructions, policies, but he hopes that in time there will be reconciliation. That is what he hopes. What he fears is not that there will not be reconciliation but that there will be endless mutual recrimination which will degenerate into an interminable war, a mutual hatred, which even divorce and legal separation does not end in the case of marriage and even the foundation of a breakaway does not reconcile in the case of a trade union.

Yet experience suggests—this is where I come back to the Bill—that are some cases where it is possible to have separation and even divorce without endless war; that, given time, if other interested parties can learn to live with the system and if they can act in an impartial way between the warrring factions, a middle way is possible. There are many examples of this in trade union history. The Union of Communication Workers is a successful example today of a breakaway which eventually after a very bitter period rejoined the parent union to the benefit of all. The National Union of Public Employees is an example of the middle way, a union that maintained its independence, eventually achieved good relations with other unions, was prepared to accept such things as the Bridlington agreement and, therefore, was able to enter the Trade Union Congress.

For myself, I still hope that the miners will achieve the first solution, reconciliation, but I certainly hope, and I hope that the Government too hope—I thought that the noble Viscount tonight expressed that hope—that they will avoid the third alternative. That is what we are really about tonight. We are giving the Government the benefit of the doubt over the Bill. We are not ready to assume that they wish to perpetuate and stoke up the war between the UDM and the NUM. We are not ready to assume that they are taking one side or the other. We assume that they are trying to help in an alternative—perhaps alternative two if not alternative one—but in that case they must give a much more friendly and considered response to the new clause put down by my friend in another place.

8.26 p.m.

Lord Ezra

My Lords, I too should like to express my appreciation of the constructive manner in which the noble Viscount presented the Bill. It comes to us at a time when the coal industry is recovering impressively from the aftermath of the long-running strike to which both noble Lords referred. I believe it is important that the industry should be given every support in these endeavours. It is from that point of view that I shall make a few comments on the contents of the Bill.

To take first the change of name, I listened carefully to what both the noble Viscount and the noble Lord, Lord McCarthy, had to say about this. For my own part I cannot help feeling a sentiment of nostalgic regret. The name of the National Coal Board was proudly hoisted aloft at every mine in the industry on 1st January 1947, when nationalisation began. The letters "NCB" have remained synonymous with the coal industry ever since. They have been woven into the tapestry of post-war history. The letters will always remain historically associated with the industry. I am saddened that when, as it certainly will, the industry eventually moves from success to success, it will not still proudly bear that designation. However, it has now been decided that the name shall be changed, and I am sure that we all wish the industry success under its new name.

I should like to deal briefly with the problem created by the divisions within the unions, because the noble Lord, Lord McCarthy, has concentrated on that aspect. I can only express regret again that this situation should have arisen. I believe that this is commonly felt by all parties. I feel that the steps now being taken are probably inevitable. I think that there is a good deal of force in what the noble Lord, Lord McCarthy, had to say. I personally hope that the time will come before too long when the union can be reunited and when everybody in the industry can be fully reunited.

I should like to reserve my main comments for the financial provisions, and particularly the provision to extend the deficit grant arrangements. I was pleased to see that provision, because the coal industry is still going through a process of recovery. The hope, I know, has been expressed by Sir Robert Haslam that that should be completed within a space of about two years. Let us hope that he is right. In the meantime it is certain that the industry must continue to invest substantially in its increasing new and developing assets. This is vital to the economy of the country. Let us bear in mind that as far ahead as one can visualise the coal industry will remain a major British enterprise. It will be vital in the energy mix. It is sometimes forgotten that it will be an important stimulator of innovation in a large supporting industrial sector, particularly the engineering sector.

It is for that reason, therefore, that I feel that we should go beyond the implications of this Bill in supporting the industry. It is one thing to be producing the coal as efficiently as possible but the coal has to have markets. The market situation of the coal industry at the present time is that more than two-thirds of its product go to one customer; namely, the electricity generating industry. Therefore it will be of vital importance that its role in regard to that customer should be clarified.

My personal view is that if it had not been for the long-running Sizewell inquiry we should by now have had one or two more coal-fired stations committed. I hope that we shall be able to debate that report before final decisions are reached, just as it has been agreed that it should be debated in another place. I hope that the eventual outcome will be—whatever the decision reached with regard to more nuclear stations—that the coal industry will have its fair share of new generating capacity.

There is one other aspect to which I should like to refer. The NCB, when it submitted its evidence to the energy committee in another place in January 1986, said that the board believed there was a strong case for government funding to develop advanced coal-fired generation techniques which held out the prospect of combining environmental acceptability with increased efficiency, and that those technologies received little funding compared with expenditure on R & D for nuclear energy. This is a vitally important aspect. The promise that new coal-fired technologies hold out are considerable, but in my opinion have not been sufficiently funded in the past. I hope that that will be remedied in the future.

I should like to conclude by saying that I support the purposes of this Bill but that I consider that those purposes should be complemented by some of the other measures that I have mentioned.

8.43 p.m.

Viscount Davidson

My Lords, although the debate this evening has of necessity been brief it has nonetheless been interesting and stimulating. I can assure both noble Lords that I shall read Hansard with great interest tomorow. If I do not answer all their questions this evening I shall certainly write to them. I should like to thank both the noble Lords, Lord McCarthy and Lord Ezra, for their valuable contributions. While the coal industry is not the normal field of interest for the noble Lord, Lord McCarthy, he brought to the subject his enormous experience in trade union affairs. I shall do my best to answer the points that he raised shortly.

The noble Lord, Lord Ezra, has as always in debates on coal given us the benefit of his unique knowledge of the industry. However, I do not think that this evening is quite the occasion to go into the debate on the future power stations. I notice that the noble Lord brought in Sizewell towards the end of his speech. I assure him that I shall have taken note of what he said.

The Bill before your Lordships tonight is a straightforward one. Its intentions are clear. Outside this Chamber it has been called a privatisation Bill, a pit closure Bill and a harbinger of large-scale redundancies. It is none of these things. As I indicated in my remarks at the beginning of this debate, it is a Bill which enables British Coal to welcome the future and to welcome it with a new name, a properly represented workforce and sufficient funds to get through the present transitional phase.

Both the noble Lords, Lord McCarthy and Lord Ezra, asked about the change of name. I enjoyed the play that the noble Lord, Lord McCarthy, made with the name and with other names that he thought might have been used. However, I must tell the noble Lord that, contrary to some Opposition spokesmen in another place, the Government did not need to legislate to bring the statutory name into line with the trading name. It was, however, British Coal itself which preferred its trading name to be recognised in statute and believed that this would enhance a new image that it aims to establish, emphasising the commercial nature of its business and the fact that it is producing coal which is British.

The noble Lord, Lord McCarthy, raised the question of the conciliation machinery within the coal industry. In my opening remarks I outlined the reasons why it was unnecessary to make provision in this Bill for ensuring participation in the industry's conciliation machinery. In answer to his question about the Government's attitude to the new clause proposed in another place, I have to tell the noble Lord that nothing has happened to change that attitude. Clauses 5, 6 and 7 of this Bill give to thousands of men in the industry basic rights in the management of affairs which have enormous influence on their lives, towards which they contribute financially and which are outside the scope of their normal terms and conditions of employment.

I agree with the noble Lord that it is a matter of regret that we have to legislate. None of the rights for which we are regretfully having to legislate here is anywhere denied to the NUM, whether they are in a majority or a minority. Nothing in the Bill has anything to do with negotiation, collective bargaining or terms and conditions of employment, simply because existing legislation establishes for those matters the rights of the union concerned. The detail of the machinery to be set up under that legislation is quite correctly a matter for employer and employee. I am advised by British Coal that discussions are being held with the unions on their proposals for new conciliation machinery.

I believe that that more or less covers the points raised by noble Lords. I shall read Hansard tomorrow.

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