Lords Sitting of 26 February 1990

Preamble
The House met at half-past two of the clock: The Lord Chancellor on the Woolsack.
Prayers—Read by the Lord Bishop of Peterborough.

Money Laundering
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether there is evidence that money from illegal drug dealing is being laundered in the United Kingdom.
The Paymaster General (The Earl of Caithness): My Lords, money laundering is an international problem from which the United Kingdom is not immune. However, the UK is well to the fore in measures to address this threat.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that Answer. It seems that the strong action taken in the United States has caused drug dealers to turn their attention to the United Kingdom. Have all the relevant financial institutions in this country been directed to check the bona fides of clients lodging large sums of money with them? It is vital that everything possible should be done to support the international effort against illegal drug dealing.
The Earl of Caithness: My Lords, I am sure that the whole House concurs with the last statement of my noble friend. The Drug Trafficking Offences Act 1986 requires all financial institutions to report to the authorities details of any transactions—cash or otherwise—which they know or suspect to be linked to drug trafficking. I can tell my noble friend that in November 1989 the Bank of England wrote to all authorised banks reminding them of their responsibilities under the Act. The Building Societies Commission issued a prudential notice through building societies in July 1989 and drew attention to the relevant provisions of the Act.
Lord Bruce of Donington: My Lords, is the noble Earl aware that it is often difficult for banks and financial institutions to identify these transactions without further references? Can the noble Earl give the House an indication of the degree to which the Government themselves assist these financial institutions by providing them with the intelligence that the Government are able to obtain from the FBI in America, from Interpol and from their own resources within the DTI?
The Earl of Caithness: My Lords, the UK is participating fully in what is known as the Financial Action Task Force which the noble Lord will know resulted from the Paris economic summit last July. That force recommends improvements to measures
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against money laundering. One of the matters under discussion is how best governments can help guide the banks.
Lord Hailsham of Saint Marylebone: My Lords, I notice that the Question is limited to the United Kingdom. Perhaps therefore it is not right to ask for an immediate answer. Has my noble friend noticed the allegation which has been made and which has been reported this morning about the use of Gibraltar for such purposes? Will he kindly look into that matter as well?
The Earl of Caithness: My Lords, I noticed the allegation in the newspaper today. As my noble and learned friend may know, my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs is in Spain at the moment engaged in negotiations in Madrid.
Lord Molloy: My Lords, is the Minister aware that many people in the know are of the opinion that there is not enough co-operation and exchange of intelligence on this subject? Do Her Majesty's Government feel that it might be possible to increase the degree of co-operation now lacking? That could make a big contribution to the fight against this venomous problem.
The Earl of Caithness: My Lords, I very much agree with what the noble Lord, Lord Molloy, said: that we need a constant exchange of information. This is improving year by year with the action task force. Under the arrangements that the Home Secretary has with Europe and other countries, and as the noble Lord will know from the Customs point of view, as a result of the latest agreements, we have been able to detect drugs coming even through places such as Russia.
Lord Mishcon: My Lords, is the Minister aware that we from these Benches supported to the full the 1986 legislation? We shall be more than happy to support any further legislation which the Government may see fit to bring forward in order to stop this evil trade. Is he further aware that it is not just the ordinary financial institutions that appear to be indulging—obviously quite innocently—in the laundering? It is mainly the building societies now. Is the noble Earl aware of the means that are being employed to see that those who manage building societies are apprised not only of the 1986 legislation but of the laundering that is taking place through their medium?
The Earl of Caithness: My Lords, I am grateful, as I am sure the whole House is, to hear what the noble Lord, Lord Mishcon, said in the first part of his question, and for his support for the action taken on that front. I refer the noble Lord to the reply that I gave to my noble friend Lord Campbell of Croy. I mentioned the Building Societies Commission issuing a notice. I can also tell the noble Lord that the Building Societies Association, as a result of that notice, subsequently circulated guidance to its members on the practical steps which building

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societies should take to combat money laundering. However, if the noble Lord has any particular point, perhaps he will let me know and I shall pass it on.
Lord Harris of Greenwich: My Lords, is the noble Earl aware that one of the problems in London is the activities of foreign banks? Is he aware that that problem was referred to in this House during a debate on a recent piece of government legislation concerning this matter? Is the Minister further aware that his honourable friend the Economic Secretary to the Treasury told me that this was a matter exclusively for the Bank of England, notwithstanding the fact that one of the foreign banks has, through its subsidiaries, been convicted in the federal court in Florida of being involved in this unattractive form of business?
The Earl of Caithness: My Lords, I am aware of the points that the noble Lord raised in an earlier debate on the Criminal Justice (International Co-operation) Bill and of the reply that my honourable friend the Economic Secretary gave to the noble Lord. However, if I can help the noble Lord further perhaps he will let me know.
Lord Rodney: My Lords, is my noble friend aware that there is some concern among the police force that the recent Bill on the sequestration of assets is not being applied by the courts as effectively as it might be? Will the Minister assure the House that that is not the case, but if it is will he be kind enough to look into the matter?
The Earl of Caithness: My Lords, I am sorry to hear the allegation by my noble friend. I had thought that the Drug Trafficking Offences Act 1986 was an effective measure against money laundering. The National Drugs Intelligence Unit estimates that confiscation orders exceeding £16 million have been made against the assets of convicted drug traffickers during the three years that the Act has been in place. However, if my noble friend has a particular point on that perhaps he will let me know.
Lord Bruce of Donington: My Lords, does the Minister agree that it would be unfortunate if Gibraltar was singled out especially in connection with this matter? Will he also bear in mind that areas such as the Netherlands Antilles, Luxembourg, Liechtenstein, the Channel Islands, the Isle of Man and the Seychelles are not entirely above suspicion either?
The Earl of Caithness: My Lords, I agree with the noble Lord that it would be wrong to look at any one country in particular. As I said at the beginning, this is an international problem with which the whole world is involved. It is the responsibility of all governments to take action.
Lord Campbell of Croy: My Lords, as the EC Commission is preparing a draft directive which would make money laundering a criminal offence, will there be any difficulty about accommodating that in UK legislation in due course?
The Earl of Caithness: My Lords, that depends very much on what is in the draft directive, which we have not seen. However, as I am sure my noble friend will agree, the UK is very much to the fore with the legislation it has already enacted whereby money laundering is illegal.

Nuclear Non-Proliferation Treaty
2.46 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney asked Her Majesty's Government:
Whether they support the Nuclear Non-Proliferation Treaty and, if so, what steps they are taking to strengthen and extend it.
The Minister of State, Foreign and Commonwealth Office (Lord Brabazon of Tara): My Lords, the United Kingdom is one of the three depositary powers of the Nuclear Non-Proliferation Treaty, and naturally we support it. The fourth review conference of the treaty is to be held in Geneva in August and September this year. We are working for its success. We take every suitable opportunity in our contacts with countries not party to the treaty to urge them to accede to it.
Lord Jenkins of Putney: My Lords, is the Minister aware that I welcome the more constructive tone which has characterised this Answer from the replies we received on previous occasions? I take that as a response to the improving international situation in which the Government feel able actively to support this important treaty rather than giving it the kind of lip service which they have perhaps given in the past. In the circumstances, will the Minister undertake to take further steps at the fourth review conference of the treaty which is to take place in August to bring about the certain enforcement of the treaty? There is a general feeling that while the treaty exists in theory, enforcement procedures are lacking. Will the Minister take steps to ensure that something more is done in that respect?
Lord Brabazon of Tara: My Lords, as regards the first part of the question, I should say that as one of the founding fathers, if I may put it like that, of the treaty I do not think that our support for it has ever been in doubt. However, if the noble Lord detects a difference of emphasis, so be it. The review conference to which the noble Lord referred will take place in Geneva in August and September. The initial two preparatory committee meetings which were held in New York last May and in Geneva last September went well. The third preparatory committee meeting will take place in Geneva from 24th April to 4th May. The depositary powers continue to co-ordinate effectively with the aim of ensuring a successful outcome for the review conference, thus strengthening the NPT.
Lord Cledwyn of Penrhos: My Lords, will the Minister tell the House what the Government's present attitude towards a comprehensive test ban

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treaty is, especially against the background of events in Eastern Europe?
Lord Brabazon of Tara: My Lords, I believe I answered a Question on a comprehensive test ban treaty as recently as last November. A comprehensive test ban treaty remains a long-term goal, but progress will be made only by a step-by-step approach which takes account of technical advances in verification as well as progress elsewhere in arms control and the attitude of other states.
Lord Mayhew: My Lords, does the Minister recall that in December at the General Assembly of the United Nations 127 nations voted for progress towards a comprehensive ban and only two voted against, of whom the United Kingdom was one? When the noble Lord says he is working for the success of the non-proliferation conference, is he aware that a key to non-proliferation would be the comprehensive banning of nuclear tests?
Lord Brabazon of Tara: My Lords, for the foreseeable future our security will depend on deterrence based in part on nuclear weapons. We must continue to test our nuclear weapons to ensure that they remain effective and up to date.
Lord Jenkins of Putney: My Lords, is the noble Lord aware that that point is of extreme importance and that the view is held widely in the world, and also in this country but not perhaps by the Government, that the test ban treaty is a key to effective non-proliferation and ultimately perhaps to the number of missiles being reduced? Will he give a little further thought to that point?
Lord Brabazon of Tara: My Lords, I do not believe that there is much I can add this afternoon or to what I said in answer to the noble Lord's previous Question on the subject in November. It remains our long-term gaol but with certain qualifications.

"The Three Graces"
2.50 p.m.
Lord St. John of Fawsley Lord St. John of Fawsley asked Her Majesty's Government:
What action they propose to take to ensure that the statue by Canova known as The Three Graces is available to public view in Britain.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): My Lords, my right honourable friend the Minister for the Arts has been exploring with interested parties a number of proposals and their funding implications. However, as I am sure your Lordships are aware, Save Britain's Heritage has now served a writ for a judicial review of the Secretary of State's decision not to take listed building enforcement action. In the circumstances it would not be appropriate for me to comment further on the case.
Lord St. John of Fawsley: My Lords, I thank my noble friend for his reply. I hope that he will not be too intimidated by legislation.
Lord Hailsham of Saint Marylebone: Litigation!
Lord St. John of Fawsley: My Lords, the important point is that my noble friend should not be intimated by either. Does he agree that The Three Graces represents a major work of the 19th century classical sculpture revival which was commissioned for Britain and should be retained here? Does he further agree that the situation has been dramatically transformed for the better by Mr. Jacob Rothschild's generous and ingenious offer at the weekend involving £8 million? What is the Government's policy regarding that offer? That is not subject either to litigation or court action. May we have a positive response to that offer? In view of this capricious incident, does the Minister agree that the rules governing export of works of art should be reviewed?
Lord Hesketh: My Lords, the views of the noble Lord, Lord St. John, on art and taste are always taken very seriously by the Government. However, I remind my noble friend that the statue was commissioned by the Duke of Bedford of the day rather than for the nation.
It is important to remember that discussions are continuing. Those include discussions with Mr. Jacob Rothschild concerning his proposals. It would not be wise or sensible of me to comment further at this moment.
Lord Strabolgi: My Lords, as the temporary export ban is due to expire a fortnight today will the Government consider extending it for a further period in view of the generous offer from Mr. Jacob Rothschild mentioned by the noble Lord, Lord St. John? That is the least they can do.
Lord Hesketh: My Lords, my right honourable friend the Secretary of State for Trade and Industry will no doubt review the date in the light of the judicial review.
Baroness Birk: My Lords, perhaps I may join the noble Lord, Lord St. John of Fawsley, in congratulating Mr. Jacob Rothschild on his magnificent offer. I hope that the Government will see fit to accept it unless they are prepared to come up with the £7–6 million themselves.
Does not this issue raise in an acute form the problem facing our admirable export control system—which we are trying to persuade our European partners to adopt after 1992—with pre-eminent works of art becoming ludicrously more costly every day, far beyond the reach of our museums and galleries or the resources of the National Art Collections Fund and the National Heritage Memorial Fund? Is it not therefore true that unless the Government produce funds to buy the few important works of art held back each year—since we cannot rely on a Jacob Rothschild popping up on each occasion—our export control system will prove to be no longer admirable but a time-wasting farce?
Lord Hesketh: My Lords, the noble Baroness has somewhat broadened the Question on the Order Paper. This country is a treasure-house of antiquity and beauty, and I believe that that shows the success of our regime over the years. In other countries which have tougher regulations all that has happened is that they have been cleaned out illegally. We have a successful regime which works.
Lord Hutchinson of Lullington: My Lords, does the Minister agree that if members of the public are being asked to contribute to the purchase of the work with the object of it being put on public view they are entitled to know who are the beneficiaries of their contributions? Can the Minister tell the House who are the great patrons of the arts who are domiciled in the Cayman Islands? If they were paid £2 million for the work and the Getty Museum is now prepared to pay £7 million, can the Minister say why the owners did not sell it directly to the Getty Museum?
Lord Hesketh: My Lords, I do not act on behalf of or as an agent for the individuals concerned and therefore I cannot answer the last part of the noble Lord's question. However, I can tell him that in the past, today and in the future works of art have been and will continue to be presented anonymously. That has been a fact of life for some considerable time. I can assure the noble Lord that we believe that the owners are reputable people.
Lord Campbell of Alloway: My Lords, does the Minister agree that there is a case for reconsideration of our tax regime generally as a broad question along the lines of the American model in this regard?
Lord Hesketh: My Lords, as always my noble friend has raised an interesting point. I shall draw it to the attention of my right honourable friend.
Lord St. John of Fawsley: My Lords, does my noble friend agree that we now know that no fewer than four ministries are involved in the matter? Since there is only a fortnight before the export ban expires is it not right that the suggestion of the noble Lord, Lord Strabolgi, should be followed, otherwise between all those ministeries the matter will be fumbled?
Lord Hesketh: My Lords, I can assure the House that considerable efforts will be made to make sure that the matter is not fumbled.
Baroness Birk: My Lords, in view of the injunction for judicial review can the Minister tell the House whether the period of the export ban will be extended before the final decision is made on the export of this work of art?
Lord Hesketh: My Lords, I answered that question earlier when I pointed out that my right honourable friend the Secretary of State for Trade and Industry may well review the date in the light of the judicial review.
Lord Strabolgi: My Lords, can the Government confirm that the total sum allowed for acceptance in lieu of tax is not limited to the present financial year but can be estimated on a rolling basis?
Lord Hesketh: My Lords, I believe that that is correct.
Lord Glenamara: My Lords, if the Government take up the very generous offer of Mr. Jacob Rothschild—which arises out of the will of Mrs. James Rothschild—will they bear in mind that many of us hope that the work will be put on display somewhere more central than Waddesdon Manor even though that was the home of Mrs. Rothschild?
Lord Hesketh: My Lords, I believe that the noble Lord anticipates events. I cannot share his certainty as to the outcome.

Criminal Injuries Compensation Board
Lord Harris of Greenwich Lord Harris of Greenwich asked Her Majesty's Government:
What steps they propose to take to improve the efficiency of the Criminal Injuries Compensation Board.
The Minister of State, Home Office (Earl Ferrers): My Lords, we approved last week the recruitment of the 60 extra staff which were requested by the Chairman of the Criminal Injuries Compensation Board for Great Britain, my noble friend Lord Carlisle of Bucklow. Ten of those staff are already in post.
A major computer project has been approved and its first phase will start in March. The scheme administered by the board has also been revised with effect from 1st February in order to allow cases to be resolved more quickly.
Lord Harris of Greenwich: My Lords, I thank the noble Earl for that reply. Does he not recall that the Home Affairs Committee of the House of Commons described the Criminal Injuries Compensation Board as sinking under a mountain of paper and facing a bureaucratic nightmare? While welcoming his right honourable friend's announcement that there will be 60 additional staff, can the noble Earl give an undertaking to the House that cases coming before the board will now be dealt with far more expeditiously? Is he aware that at present there is a backlog of 100,000 cases before the board? Can he give any assurance that there will be a dramatic improvement in the situation within a matter of months?
Earl Ferrers: My Lords, I have a great deal of sympathy for the House of Commons Home Affairs Select Committee when it objects to endless paperwork and considers the situation to be a bureaucratic nightmare. However, the committee only reported on 8th February and we have already responded to its major recommendation for increased numbers of staff. Although the noble Lord

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says that there is a backlog of 100,000 cases, I should point out that there are only 95,000. The noble Lord is always peculiarly accurate, but he has slipped a little today. Half the trouble is that the number of applications increased last year from 43,000 a year to 53,000. That is why we have increased the number of staff. It is a matter of great concern when cases take so long. The noble Lord will not expect me to give a guarantee as to what will happen in the future other than that we shall work on it.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the mere 95,000 cases outstanding to which he referred amount to a considerable infliction of hardship on people who have already suffered a great deal of hardship? Is he aware that the Criminal Injuries Compensation Board has now replaced the Passport Office as the most incompetent, idle and irritating organ of government?
Earl Ferrers: My Lords, I have no doubt that my noble friend Lord Boyd-Carpenter will ensure that those mellifluous words are passed on to his noble friend Lord Carlisle of Bucklow. However, I do not agree with him that it is the most inefficient organ of government.
Lord Tordoff: My Lords, in that case, which is?
Earl Ferrers: My Lords, each noble Lord has his own decision to take on that matter. I can assure the noble Lord that there will be a great deal of competition in noble Lords' minds, but none in the Government's.
Lord Hailsham of Saint Marylebone: My Lords, is it not possible that the work of the compensation board might be helped if the courts were encouraged to make wider use of their powers of awarding compensation in criminal cases, which would give a speedy offer of relief where the money was available?
Earl Ferrers: My Lords, courts are obliged to award compensation and certainly to take into account compensation with regard to any major matters. However, if a case of criminal injury is passed on to the board it must decide whether that candidate is eligible. That in itself can take a long time.
Lord Donoughue: My Lords, having been close to the case relating to the Brighton bomb which came before the board, I can assure the House that no words yet used to describe the board are harsh enough. I should like to ask the Minister whether the Government's proposals can have any hope of dealing with the mountain created by this problem and whether it does not need a more rational approach. Is the Minister aware that the system would work more efficiently if management consultants were brought in to give advice on the problem of the tens of thousands of applications involving specific cases with which it is inevitably rather difficult to deal? Does he agree that if there were a basic table of compensation relating to
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standard cases which could be paid quickly it would alleviate those in great suffering, distress and need and leave those with specific problems to argue their case?
Earl Ferrers: My Lords, the noble Lord asked whether it would be worth while to bring in management consultants. Obviously, when we deal with matters of this size, there comes a time when one must review the method of operation. As yet, we have not found that the most appropriate thing to do. Although there has been a delay in dealing with claims, one must remember that the Criminal Injuries Compensation Board, which was set up in 1964, dealt in its first full year with 2,452 claims and had only 30 staff and that it now deals with 53,000 claims and has 330 staff. It is difficult to deal expeditiously with all claims.
With regard to the noble Lord's point about a table, I must tell him that there are a number of items which the board must look into; namely, pain and suffering, loss of earnings, the loss of earning capacity in the future, and medical and other expenses. If one takes all those together, a table does not fit in too easily.
Lord Mishcon: My Lords, I am not able to compete in any way with the noble Lord, Lord Boyd-Carpenter, in his denigratory adjectives in regard to government departments and institutions. However, does the Minister agree that, on his own arithmetic, if there are 50,000 cases a year and a backlog of 95,000 cases, cases which are two years old have not yet been started? Is that not dreadful? Will he consider the Government's decision last year to reduce the threshold from £550 to £750 before anyone may make a claim? Does he agree that, for many people, £550 worth of loss is the equivalent to others of well over £5,500 worth of loss?
Earl Ferrers: My Lords, it does not necessarily follow that two-year-old cases have not been started. The backlog which requires to be dealt with amounts to that large sum. That is why we have increased the staff by the number that I mentioned. One of the reasons for changing the limit from £550 to £750 was to keep out the relatively less serious injuries. Although they are bad for the individual, their inclusion would have the reverse effect to that which the noble Lord, Lord Mishcon, desires and would merely clog up the system even more.
Lord Harris of Greenwich: My Lords, does the Minister not agree that there is an overwhelming feeling in the House that the victims of crime deserve more protection? Will he therefore discuss with the chairman of the board the situation of people waiting 18 months or two years to have their cases resolved? Is this not a matter of considerable urgency? I would urge the noble Earl to meet the chairman of the board to obtain some undertaking from him as to how long it will be before some of those long-delayed cases are proceeded with.
Earl Ferrers: My Lords, we keep in close touch with the chairman of the board. I assure the noble Lord, Lord Harris, that priority is given to fatal

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cases, those which involve serious injuries and those involving the elderly. However, if there are many cases there must inevitably be some form of priority and other cases are bound to slip lower down the queue. I assure the noble Lord and the House that the Government sympathise wholeheartedly with those who wish to see that victims are adequately and properly compensated where appropriate.
Baroness Ewart-Biggs: My Lords, will the noble Earl give greater consideration to the suggestion made by the noble and learned Lord, Lord Hailsham of Saint Marylebone, that court funds should be used to compensate victims and to reduce the length of time they have to wait, and that the sum should be retrieved from the offender?
Earl Ferrers: My Lords, we shall certainly take that point into account.

Business of the House: Debates, 14th March
3.8 p.m.
The Lord Privy Seal (Lord Belstead): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Lord Carter and the Lord Mishcon set down for 14th March shall each be limited to 2½ hours and that Standing Order 35 and paragraphs 10 to 13 of the Rules for the Conduct of Short Debates shall apply to each debate.—(Lord Belstead.)
On Question, Motion agreed to.

Pakistan Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Abortion (Amendment) Bill [H.L.]
Report received.
British Railways Order Confirmation Bill
Considered on Report.

Coal Industry Bill
3.10 p.m.
Viscount Ullswater: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
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Moved, That the House do now resolve itself into Committee.—(Viscount Ullswater.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Chairman of Committees in the Chair.]
Clause 1 [Deficiency grants to British Coal Corporation]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 1:
Page 1, line 5, leave out ("may") and insert ("shall").
The noble Lord said: Those who follow these matters will understand that this amendment in the name of myself and the noble Lord, Lord Williams, seeks to bring a greater measure of certainty into the Government's intentions. Although Ministers in another place and here have not been prepared to accept that the raison d'être of this Bill is to prepare the coal industry for privatisation, the reality is that everyone knows that the Bill's intention, and this part of it in particular, is to give those who will be invited to invest in the future privatised industry a better product to buy.
On this side of the House we have no strong objection to action by the Government which is intended to write off very large sums of money in order to make the industry better and more viable. We object to the fact that it is to be done in the form of words as they stand at the moment in the Bill, which means that there is no guarantee that the Government will do it. There will be other amendments and other opportunities to amend the Bill. The whole purpose of these amendments at Committee stage is to probe the Government's intentions on a range of matters and to clarify the understandings that the Minister here and his colleagues in another place have given so far.
We are contemplating here considerable sums of money. The Government may say that they are not able to tell us precisely the sums of money involved until a later date. That is understandable. However, it is a habit on the part of the Government to write off large sums of money owed or to the debt of industry before that industry becomes privatised. I remind the Committee that we are speaking of possibly £5 billion or £6 billion. The Government have had experience of writing off comparable sums before. For instance, in the water industry they wrote off £6 billion in order to provide a sweet and clean industry for the private investor. For the British steel industry the sum of £4·5 billion was written off. For British Telecom the sum was almost £3 billion. By the time one has brought in British Telecom, one is speaking in terms of a sum approaching £20 billion. This Government are no stranger to writing off debts of public assets and publicly accountable industries in order to sell them on the open market.
Whether or not the industry is privatised we certainly agree that the accounts and accounting systems of British Coal over the years have been horrendous—some would say ludicrous—in comparison with the way in which other industries in this country and coal industries in other countries have had to be financed. We believe that the

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Government ought to be prepared to accept our amendment so that the clause will read:
"The Secretary of State shall, with the approval of the Treasury, make grants to the British Coal Corporation"
rather than, as it stands at present:
"the Secretary of State may … make grants".
So long as the word "may" remains in the clause, we believe that there is an element through which people may be cajoled, blackmailed or have a threat held over their heads. We do not want a lever or stick used against the management of British Coal to ensure that it complies with the Government's directions in this matter. So far as we are concerned the write-off is sensible and reasonable in the circumstances. However, we object to the fact that at the moment it is discretionary.
This amendment is an attempt to probe the Government's intention in this matter and to urge the Minister to say why, if he does not accept the amendment, he is not prepared to be more positive about the write-off. I beg to move.
Viscount Ullswater: To begin with I must say that this amendment is defective. It imposes a duty to pay sums of grant which are unspecified, except that they cannot exceed the expected accumulated loss next March. One cannot have a duty to pay out grants of unspecified sums. Who is to say, for instance, when that duty is discharged?
The amendment is not acceptable because it involves a potential conflict with our obligations under the Treaty of Paris. Under that treaty the European Commission is empowered to approve state aids to the coal industry. Deficiency grant is a state aid subject to the approval of the European Coal and Steel Community. In the unlikely event that the European Coal and Steel Community denied approval for deficiency grant, this amendment would force the Secretary of State to act in a manner contrary to the ECSC treaty.
The amendment could involve the Government paying out more grant in respect of British Coal's costs than British Coal in fact incurs. A large part of the estimated deficiency comprises provisions for concessionary coal (up to £2 billion) and deafness claims at half a billion. These provisions have been prepared on the basis of detailed estimates but the actual figures could be less. That is why the Government are proposing to pay British Coal grant in respect of these elements only when British Coal itself settles the concessionary coal and deafness claims and only in the amounts that British Coal itself pays.
I indicated to this Chamber on Second Reading that the Government intend to pay out a substantial sum in deficiency grant—but not the amounts relating to the long-term concessionary coal and deafness claims—once Royal Assent and the European Coal and Steel Community's approval of our proposals have been obtained, and that it was crucial for this purpose that Royal Assent was received before the end of the financial year. It is not possible to be precise about the amount as yet. That will depend on the corporation's trading performance over the remaining weeks of this year
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and on the amount by which the corporation's fixed assets have to be written down. The write-down of fixed assets has to be carefully consistent with the economic capacity that British Coal envisages in its forward strategic planning and that cannot be known with any certainty until the corporation's accounts have been finalised in July or August.
For those reasons I invite the noble Lord to withdraw the amendment.
Lord Williams of Elvel: The noble Viscount has been quite explicit in telling us why this is an enabling Bill rather than a Bill to explain to Parliament how much money the taxpayer is expected to pay in order to meet the accumulated deficit of the coal industry. It would have been perfectly possible for the Government to have put in Clause 1 that the obligation on the Secretary of State was subject to approval from the Coal and Steel Community. We would all have understood that. He has explained that and we certainly would welcome it appearing specifically on the face of the Bill.
The Minister went on to talk about deafness and concessionary coal, a matter which we shall address in Amendment No. 2. He then went on to talk about the possible write-down of assets, and at some stage we shall talk about the possible write-up of assets.
The principle remains that Clause 1(1) simply authorises the Secretary of State to take whatever initiative he may see fit, without the control of Parliament nor any decision from Parliament about what he shall or shall not do, to pay out certain amounts which at the moment are unspecified. We on the Opposition Benches do not feel that that is an appropriate expression of government intention.
I hope that the noble Viscount will be able to give the Committee some figures—they are reasonably in the public domain—about what the Secretary of State is proposing to pay out in grant from the Consolidated Fund and moneys provided by Parliament in order that we can have some idea about what the taxpayer is in for. Before deciding what to do with our amendment I should be grateful if the noble Viscount could elaborate on the matter.
Viscount Ullswater: I have given the Committee the figures for deafness and concessionary coal. The losses which have accumulated are in excess of £1 billion. The write-down of the assets is between £2 billion and £3 billion. However, as we shall discuss in detail in a moment, a figure has not been arrived at and possibly will not be arrived at until the end of the financial year.
Lord Dormand of Easington: I may not have understood the Minister. It could be implied from his comments that British Coal would be profligate in spending goodness knows how much money which, if our amendment is accepted, would be wiped off. In other words, it will take advantage of the situation. We are talking about a period of one month; the provision relates to the period ending 31st March 1990. Is the Minister saying that British Coal will take advantage of "shall" instead of "may" in order to spend more money on an item which it

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believes to be more useful to the industry, the miners or business generally? Is he saying that it will take advantage of a change of wording, especially when we are talking of a period of a little over one month? I repeat that the date in the subsection is 31st March 1990, and 1st March is on Thursday this week.
Lord Merrivale: Before my noble friend replies, I wish to seek clarification on what may be a simple matter. The amendment provides:
"The Secretary of State shall, with the approval of the Treasury, make grants to the British Coal Corporation".
If the approval of the Treasury is not granted shall we be back to a state of "may"?
Lord Williams of Elvel: We are trying to provide that, subject to a proper review of the accounts and any accumulated group deficit at the end of March, which is not far away, the Secretary of State shall have an obligation. The review is objective and is designed to establish the balance sheet position at the end of March by normal accounting procedures. Under those circumstances, and to be absolutely frank, the Treasury will have little option but to agree to the Secretary of State's decision.
Viscount Ullswater: In answer to the noble Lord, Lord Dormand, it is the Government's intention to deal with the debts of the past—that is, the deficit which has mounted up to the end of March 1990, and the asset write-down required—in order to put British Coal on a better footing for the future. I have already explained the difficulty about the use of the work "shall" instead of "may". The sums are imprecise because they will be paid out for concessionary coal and deafness only as and when they occur.
Lord Williams of Elvel: I am sorry to take issue with the noble Viscount. At the end of March 1990 a balance sheet must be struck containing figures which are precise. I do not wish to speak about the next amendment but the amounts must be struck by the end of March 1990. That is what the Bill provides. If that is the case, how can the amounts be imprecise?
Viscount Ullswater: The balance sheet will be struck at the end of March. However, the amounts involved will not be known until the report is published much later in the year.
Lord Graham of Edmonton: The Minister has not satisfied me nor, I believe, the Committee. He says that the figures are uncertain but that at some date they will be made certain. Therefore, in jibbing at a change of words by hanging on to "may" and rejecting "shall" he leaves open the possibility that when the figures are known the Government may decide not to write off all the debts.
The Minister has not said that but the implication is perfectly clear. We understand the uncertainty about being precise. However, if there is no dubiety, whatever balance is struck on 31st March the
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Government will write it off. Therefore, why does the Minister not say, "Let us cut out this uncertainty. We shall write them off"?
While the Minister keeps within his power what can or cannot be done—that is the use of the word "may"—he is injecting into the situation a degree of uncertainty which is not good for the health of the industry. He said that the intention is to make British Coal healthier in the future, and we do not argue with that. We are daggers drawn across the Chamber in respect of what we know the Government intend to do with the industry and what we believe to be in the national interest.
I do not believe that at this stage we shall get any further with the Government. The Minister's collegues in another place, and also members of his department, cannot understand the fact that if the amendment is accepted there will be a sense of relief in many quarters and the value of the Bill to the Government will not be diminished one jot. However, he will not accept the amendment and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 2:
Page 1, line 12, after ("accounts") insert ("which shall include provision for future liabilities arising from compensation for industrial deafness and concessionary coal").
The noble Lord said: The Minister sees the amendment as being a major matter, and I have no comment to make about that. We are using this stage of the Bill to obtain copper-bottomed guarantees in writing, if not in legislation, and therefore the Minister's words will have some meaning. The purpose of Amendment No. 2 is to ask for it to be written and understood within the Bill that future liabilities arising from compensation for industrial deafness and concessionary coal will be fully undertaken.
I believe that the Minister can help us by giving us some more detail. When I looked at the proceedings in another place I noted the words of Mr. Peter Hardy who, in Committee, said in terms that one does not need to be harsh or lacking in compassion when one prepares an industry for privatisation. There are others in this House today who are closer to coal mining communities than either the Minister or myself. I have been told that there is a certain amount of unease at the way in which British Coal has treated individuals who perhaps do not have the muscle or the ability to articulate which the Minister and I have in defence of our own interests.
I looked carefully at the words of Mr. Dennis Skinner who was a Member of the Committee in another place. He said that British Coal had already started telling widows who live in a tiny dwelling with only one fireplace that they will not receive the equivalent of five tonnes of coal per week and that the amount has been lowered.
We know that the incidence of deafness pro rata in the industry is higher than in other industrial processes. This amendment deals with people who, as part of their conditions, wages, pensions and way

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of life have received concessionary coal. That is part of what they have worked for and many have died for it. Sadly, a miner died last week working in a pit.
I am not saying that the Minister or the Government are unfeeling. However, I believe that the Minister can go a long way to diminish the worries and concerns as brought to us by those in another place who are much closer to the coal mining industry than either the Minister or myself. I beg to move.
3.30 p.m.
Viscount Ullswater: First, I should say to the noble Lord, Lord Graham of Edmonton, that the Government have no intention of writing down the amount of money put forward for deafness claims or concessionary coal. I believe that I should make that perfectly clear.
However, the amendment is largely unnecessary. The corporation included in its March 1989 balance sheet a provision to cover its estimated latent liability for deafness claims arising from its operations prior to that date. The Secretary of State has made clear that British Coal is expected to provide in its 31st March 1990 balance sheet for the full accumulated liability to that date in respect of concessionary coal, smokeless fuel and cash in lieu.
The amendment also requires a provision to be made in respect of future liabilities. It would be quite unacceptable in accounting terms to make provision this year for commitments and liabilities still to be incurred. Those will be a charge against the profits for the year in which they are actually incurred. Therefore, the amendment would be in conflict with the requirement of the 1946 coal industry's nationalisation Act that the accounts must be in a form which shall conform with the best commercial standards.
The limit on the proposed efficiency grant is set by the amount of the corporation's accumulated group deficit at 31st March 1990. The corporation has a range of liabilities and to the extent that those are properly provided for in its March 1990 balance sheet, those liabilities will also affect the corporation's accumulated group deficit to that date. The limit on deficiency grant will therefore automatically be sufficient to enable grant to be paid in respect of those liabilities. For those reasons, I ask the noble Lord to withdraw the amendment.
Lord Williams of Elvel: I should like to ask the noble Viscount a question about future liabilities to which he referred. It is clear from the corporation's statement of accounting policies that the charge which the corporation has admitted in its profit and loss in respect of noise induced hearing loss is made on a systematic basis. Those accounting policies in the annual report state that that is calculated over the average service lives of the employees concerned having regard to the current experience in the submission and the cost of settlement of claims.
We have had a variety of views in the past about what "settlement of claims" really means and, indeed, what current experience can show about future experience. It is perfectly proper in accounting
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procedure to have contingent liabilities. While the corporation may not wish to admit a real liability on its balance sheet, presumably it has up its accountant's sleeve—if I may use that expression—a view on what the contingent liabilities for the future may be. They do not pass through the profit and loss, are not at present mentioned in the corporation's balance sheet but certainly should be taken into account if the corporation is to be put on the sound financial footing which I believe the Government want.
Viscount Ullswater: I do not believe that there is much dividing us. The balance sheet will show the estimated liability it has for those two items—for the deafness claims and concessionary coal—both to employed and retired miners. However, it cannot provide for future demands of people yet to be employed or yet to become deaf.
Lord Williams of Elvel: It certainly could so provide if it was felt that this was a continuing measure which should be included in any balance sheet. For example if a nuclear power station—and I revert to a subject which the noble Viscount and I have discussed—knows that it has certain shutdown or decommissioning costs, then it is perfectly proper, although it is well in the future, for the company concerned to make some kind of provision. It will not necessarily be done on the balance sheet because I agree that those are provisions which are known at the time. However, it can be done through contingent liabilities in respect of employees who may be there but, nevertheless, are not liable to claim at that point in time.
I certainly go along with the noble Viscount in saying that it is not possible to determine for the year 2030 who will be employed and what provisions should be made for them. However, I think it would be appropriate for the existing employees or at least for employees who may be there in the short-term future, to make such provisions on a contingent basis even though we know that they may not be making such a claim.
Viscount Ullswater: I think I can agree with the noble Lord. Clause 1 talks about the accumulated group deficit up to the period ending end of March 1990. The corporation's accounting policy states that account is taken of its latent liability for noise induced hearing loss. Therefore, that takes account of its expected liability arising from its operations to date, not just liabilities relating to claims which it has already received. I hope that makes the matter clearer.
Lord Dormand of Easington: My noble friend Lord Graham of Edmonton referred to what our honourable friends in another place, Dennis Skinner and Peter Hardy, have said with regard to concessionary coal. The Minister may know that one honourable friend comes from the Yorkshire coal field and the other from the Derbyshire coal field. I live in the Durham coalfield area and exactly the same is being said there: that concessionary coal is to cease. I hope that I do not need to stress to the

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Minister how important concessionary coal is to mining families. It is not a gift. It was negotiated many years ago as part of the wages and conditions. It is part of the tradition. We have heard no argument that suggests that it ought to come to an end.
Our amendment makes provision for future liabilities with regard to industrial deafness and concessionary coal. I presume from everything that has been said on Amendments Nos. 1 and 2 that British Coal will fully take into consideration provision for concessionary coal. The Minister may say that it is a matter for the British Coal Corporation; it is a matter for management. We on this side say that it is nothing of the kind: it is a matter of a basic principle concerning wages and conditions in the mining industry.
We have given the Minister three different examples from three different coalfields. I hope that the Minister can now say that it is not the intention of the Government to make less provision. If he says that it is a matter for British Coal, perhaps he will comment on that.
Viscount Ullswater: I have listened carefully to what the noble Lord has said. If he has any specific instances that he would like to bring to my attention I can guarantee that I shall pass it higher up the chain, if I may so put it. As the noble Lord says, British Coal provides concessionary fuel under the 1984 national concessionary fuel agreement which was signed with the NUM. The corporation considers this agreement to be legally binding. I do not think that there is anything more that I can say about that. We are talking about the provision of sums of money in the accounts due at the end of March 1990 to provide for this concessionary coal.
Lord Graham of Edmonton: The Minister can take it from me that we accept the Government's intention. Certainly what he has said on the record will be helpful. However, perhaps I may ask him this. He said that it was not the intention to provide less money in the future than that which was provided in the past. The Minister knows all about inflation. He knows all about the slight uncertainty that exists.
On reading my papers on this matter, I understand that in the Yorkshire coalfield there is a considerable increase in the number of miners and retired miners who are successfully making claims for compensation for deafness. My noble friend Lord Dormand knows the Durham and Northumberland coalfields far better than anyone else in this Chamber. There has been an increase in the successful claims for compensation for deafness for miners in that area.
The Minister satisfied my noble friend and I when he said that the sums of money take into account the latent anticipations. In other words, an attempt has been made to assess the amount. The Government are not merely saying that it cost, for example, £500 million last year but that £543 million is in the account now. There is a genuine attempt to try to ensure that the balance sheet is true and fair. That is the purpose of the amendment.
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My noble friend Lord Dormand has reinforced the point better than I could. The Minister has accepted it. It is absolutely central to mining communities and to my noble friend Lady Turner who sits on the Front Bench with me that whenever agreements are made they ought not to be to the detriment of existing conditions. The deal that is struck ought not to be detrimental to existing rights and privileges.
However the Minister cares to term it, we consider it a right—not a privilege—that many have worked for and many miners have died for. However, I am grateful to the Minister for his attempt to help us. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.45 p.m.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 3:
Page 1, line 24, at end insert ("; and (c) shall not be made unless the British Coal Corporation has first published an up-to-date itemised valuation of its assets").
The noble Lord said: We now come to one of the most vexed questions in the whole Bill, and indeed in nationalised industries in general. I am referring to the valuation of assets. We have seen over and over again in privatisations publicly owned companies—by "publicly owned" I mean owned by the Government, the public state, the taxpayer—being sold off without due regard to the proper valuation of assets. I do not need to mention the Royal Ordnance Factories and others that have been the subject of considerable debate and dispute. If the coal industry is to be put on a proper financial basis, it is very important that the assets that the coal corporation owns should be properly valued.
It is always a matter for dispute about what a proper valuation is. I accept that in the case of current assets a proper valuation would be established by the auditiors at the time when the balance sheet is struck. I have questions as to whether that proper valuation is on a first-in/first-out basis or a last-in/first-out basis. That is no doubt a matter on which the noble Viscount would be prepared to comment. However, I suspect that on the valuation of the current assets there are some points on which the Government Front Bench and myself could agree.
It is far from the case that we would agree on the valuation of fixed assets. In its annual report, the corporation values the assets on two bases: historic cost and current cost. We do not know which is acceptable and right. As the noble Viscount will be aware, some time ago it was decided by the Accounting Standards Committee of the Institute of Chartered Accountants in England and Wales that current cost accounting ought to be the one used in inflationary times. Since then, inflation having subsided in the early and middle 1980s, that has gone out of fashion. But it is a statutory duty on the corporation to provide those accounts on a CCA basis.
Now that inflation is at almost 8 per cent., and we are looking again at a possibly inflationary environment, it may well be right—I am not arguing

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it specifically—to take current cost accounting as the basis for a proper valuation of assets. It is almost the fundamental point in establishing what the accumulated group deficit is because if there is to be a write-down of assets—as the noble Viscount mentioned in answer to an earlier amendment—there could easily be a write-up of assets in a curious perverse way. If one adopts the current value of assets, they would be written up in the balance sheet and that would lower the accumulated group deficit because that write-up would pass straight across into the current cost account profit and loss.
We are therefore talking about accounting principles involved not only in the valuation of assets but also in the accumulated group deficit. In addition to that, there are no doubt a number of assets that the corporation holds that are not to be valued on a pure return basis. I understand the accounting policy that the corporation has used which is to value an asset on the basis of the commercial return that it believes it can secure from that asset. If the valuation thereby thrown up is lower than historic cost, no doubt the corporation will reduce or write off part of the historic cost to reflect that matter. That may or may not be fair. Certainly Ernst&Whinney, the auditors, endorse that accounting policy. I have no particular quarrel with that, subject to what I said about current cost accounting.
Nevertheless, there will certainly be assets in the corporation which are not used in its operations. It no doubt has land surplus to operational requirements; it may have housing surplus to operational requirements; it may have all sorts of assets which are surplus to requirements. It is those assets which have been severely stripped in the privatisations that we have seen over the past two or three years.
What we are arguing in this amendment is that the Government should ensure that the schedule of fixed assets has a detailed value placed on the assets according to some accounting principle that we can all understand and accept. If that is done and if it comes to privatisation, when the Secretary of State exercises his option to write off the accumulated group deficit we can then be satisfied that the asset valuations reflected are ones we can all agree on. I beg to move.
Viscount Ullswater: The effect of this amendment would delay any payment of grant until British Coal had completed and published a full revaluation of its assets. I can understand the noble Lord's desire to know more about the asset write-downs, given the large figures that may be involved. However, this amendment would delay the payment of any deficiency grant.
Lord Williams of Elvel: Before the noble Viscount continues, perhaps I may make it absolutely clear that this is a probing amendment. I am not asking the noble Viscount to explain what the effect of the amendment, if carried, would be. I am using it as a vehicle to probe the Government's view on what valuations they will put on the corporation's assets.
Viscount Ullswater: I was seeking to explain that the corporation was revising its business plans for its collieries and needed to adjust the detailed valuations in the light of that. Obviously, these are some of the fixed assets the noble Lord was speaking of. These detailed valuations will not be finalised until the corporation's 1989–90 accounts have been approved by its board and reported on by its auditors, which at the earliest will be in July and this year may be rather later than normal.
However, it would be quite wrong to require British Coal to divulge information in such detail that it could prejudice its ongoing negotiations with the generators on longer-term contracts. Nevertheless, British Coal has traditionally set out in its annual accounts the gross and net value of the assets in each area or group. The Government expect this to be repeated for the 1989–90 account so that the analysis by group of the asset write-down will be clear for Parliament and others to see.
There is no question of fattening up the industry. The fact is, as I emphasised on Second Reading, that over half British Coal's collieries are expected to show a negative cash flow over their remaining life and are therefore uneconomic. Many more will not recover their book value in full. The asset write-down simply reflects this reality, and it is this reality that we expect the corporation to face up to squarely in preparing its new business plans.
The noble Lord will know that the accounts are based on the historic cost convention. It is up to the board to lift the qualification which the auditors have placed on the accounts for a number of years. However, if they see a permanent diminution in value they should take action.
The noble Lord asked particularly about the land valuation. British Coal's land and property are already valued on a regular basis. At March 1989 they had a historic book cost of £207 million and a current value of £584 million, and the Government are encouraging British Coal to sell as much surplus property as possible in order to finance its ongoing operations. None of the assets write-down relates to land.
I believe I have answered all the noble Lord's questions and I therefore ask him to withdraw the amendment.
Lord Williams of Elvel: I do not find that to be an answer at all. I do not wish to be discourteous to the noble Viscount, but I wish he would address the problems I raised. First, the question of write-down implies that there is some convention which requires the corporation to write down its assets if they are assumed to have suffered a permanent diminution in value—I am quoting from the accounting policies which can be changed—unless investment has been undertaken to make sure that those assets perform better than they have in the past.
It is perfectly clear that under certain circumstances that accounting policy can change. For instance, suppose the price of oil were to double tomorrow. The collieries which, under his formula, on the present price of oil would be written down would be written up. What convention, what

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accounting policy will be adopted for the purposes of this Bill? It is for the purposes of this Bill that we are interested in establishing the accumulated group deficit.
Secondly, the noble Viscount said that disclosure of these facts to Parliament would prejudice the negotiating position of the corporation towards the generators of electricity under the negotiations which are taking place. I really cannot take that argument seriously. Every corporation, every company has to have a schedule of fixed assets. On the whole those schedules of fixed assets are reported quite extensively in the accounts. The fact that they may have adopted one accounting policy rather than another in order to write down or write up the assets is not something which the generators will fix on and say, "You are better off than we thought and therefore we will pay you less for your coal". That does not seem to me to make any sense at all.
Thirdly, the noble Viscount did not respond to my point with regard to current cost accounting. The corporation is under a duty to produce replacement cost accounting in its valuation of fixed assets. How will that square with the write-down that the noble Viscount is talking about? Replacement cost accounting demands that the replacement cost of an asset be put in the balance sheet. If one tried to replace a colliery, with all that that implies, one would find the value of the asset in replacement cost terms to be much higher than the historic cost of the colliery which is in the balance sheet. There will be no question of write-down; it will be a question of write-up.
I wish the noble Viscount would be a little more forthcoming about the accounting policies which the corporation intends to use in its valuation of its fixed assets so that we can establish in Parliament what the basis of the expression "any accumulated group deficit" may mean. I am still not satisfied with what the Government said about surplus assets—assets which are surplus to requirements. There may be current assets which are surplus to operational requirements; there may be fixed assets which are surplus to operational requirements. I am not happy that the Government have really studied this problem and I suspect—in the light of the data on previous privatisations this suspicion must be well founded—that we may again be in a position where the Government wish to sell off a corporation on the basis of hidden assets which can then be realised by the new owners.
Viscount Ullswater: I stress that the accounts are based on the historic cost convention, which I think the noble Lord accepts, and that it is the duty of the board and the auditors to make certain that if there has been a permanent diminution of value—the words he quoted—they should take that into account. Those things have not been taken into account over the past few years. It is in order to bring it into line with that permanent diminution that the reassessment has been made this year.
The noble Lord said that we need to look at individual collieries to see whether they were
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economic, but it would be unwise to deal with this matter on a colliery by colliery basis. That is why I stress that the process should be done on an area basis so that it does not prejudice any future negotiations with the electricity industry.
As I stated earlier, the corporation's accounts have to be prepared in accordance with best commercial practice. I am advised that the Statement of Standard Accounting Practice 9, which states that the last in should be first out, is not usually acceptable. Therefore, I would not expect the corporation to be making general use of that method of valuation when valuing its stocks.
4 p.m.
Lord Williams of Elvel: The discussion between us is now on three points. The first relates to non-operating assets which might be surplus to operational requirements. We are still not satisfied that the Government have instructed the corporation to itemise those assets and to value them at full present market value in establishing the accumulated group deficit.
Our second argument is on the meaning of the word "permanent" in the phrase "permanent diminution of value". I have argued that if the oil price doubles there will be many collieries which at the moment can be deemed to suffer permanent diminution in value because of the cash flow which will result on coal sales at the present price of oil but which, if oil prices double, would be profitable collieries. That is the real substance of the argument. All analysts who understand the oil industry—indeed, the chairmen of the major oil companies—state that in the mid-1990s the price could be as much as 30 dollars a barrel. If that is the case, collieries will suddenly become more profitable. Therefore, what is "permanent"?
We want some guidance from the Government on what instructions are being given to the corporation about "permanent". It is easy to say, on present values, that there is a permanent diminution in value, but if oil prices double, or whatever it may be, there will be a lovely lot of assets which can be sold off.
My third dispute with the noble Viscount is that I still do not see why the Government insist on the historic cost convention in establishing the accumulative group deficit rather than using current cost. After all, if we want to recreate a coal industry, as opposed to considering permanently an industry in decline, in terms of the replacement cost of assets there will be an enormous charge to be made.
Those are the three points on which I hope the noble Viscount will give me satisfaction.
Viscount Ullswater: I will take the three points one by one. It is up to British Coal to make a valuation. The method of valuation is the lower of the cost and net recoverable values. That is a matter between British Coal and its auditors.
The permanent diminution of value on the basis of the historic cost convention is one that has to be addressed at the moment. As I said, half of British Coal's collieries are expected to show a negative cash

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flow over their remaining lives and are therefore uneconomic.
The noble Lord refers to the possibility of a rise in oil prices and said that obviously that will have an effect. However, he is referring to the future, which cannot be predicted. What we must do now is recognise that there is at present a permanent diminution in value. British Coal—formerly the National Coal Board—has done its accounts on an historic cost basis since the industry was nationalised in 1946.
Lord Williams of Elvel: I do not think we are going to get very much further with this argument. I still believe that the Government should set some definition for the corporation as to what "permanent" really means. I ask the Government to please talk to the chairmen of the major oil companies to ascertain their views on what the price of oil will be in 1993. The Government will then be able to see whether there is a permanent diminution in the value of the colleries. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 4:
Page 1, line 24, at end insert—
("(4) Grants of not less than £100 million shall be payable for the development of clean coal technology to eliminate sulphur dioxide and nitrogen oxide and to reduce carbon dioxide emissions.").
The noble Lord said: First, I plead in aid the words of the Secretary of State, Mr. John Wakeham, who was quoted in the Yorkshire Post in January when he addressed the Coal Industry Society. He said:
"The industry should seek urgently to reduce the present levels of acid rain and global warming caused by burning coal if it wanted to keep its position as a leading source of energy".
It is from that point that we want to persuade the Government to be much more positive and foward-looking in the provisions made in this Bill.
We are extremely concerned at what I simply refer to as the turn of events. The noble Viscount must be aware of the situation which has occurred in recent times. I refer, of course, to the promise made by the Prime Minister last November to the United Nations. She proclaimed to the world—it was a good proclamation, and one with which we certainly do not quarrel—that the United Kingdom had a £2 billion programme to cut acid emissions from power stations.
We want the Minister to say a little more about the Government's position in regard to that programme. The Government's decision in regard to a fluidised gas desulphurisation programme certainly causes us a great deal of unease. We are extremely concerned at its impact. We do not know how the Government can, on the one hand, keep their promise of spending £2 billion on controlling and making more sweet these emissions and at the same time keep to the decision taken—as far as we are concerned, taken in the best of interests—to reduce the future costs of the industry in carrying out its obligations in that respect.
The Government and the Minister will, of course, be well aware of the impact in this nexus of the low sulphur coal imports. Therefore, we are saying that there should be proper provision for experiments, testing and seeking of solutions in this respect. Sulphur dioxide, nitrogen oxide and carbon dioxide emissions are poisonous to one degree or another. We therefore wonder where the Government stand.
For example, I refer to the table of expenditure on research and development by the coal board. Expenditure on R&D in relation to coal-based energy is shown in the accounts as 4 per cent. That is 4 per cent, of the total expenditure on R&D ranging over oil, gas, nuclear and various other sources of energy. The total amount spent on coal-based energy inquiries to satisfy ourselves that we are doing our best is only 4 per cent.
The Minister may be curious about the figure of £100 million and may want to know why it is not £50 million or £150 million. I have taken advice and guidance from people in the industry who tell me that £100 million is not very different from what is being spent in other areas and in other spheres. They believe that to have the figure of £100 million written into the Bill will go a long way to satisfying people. We cannot simply hand over an industry to the private investor without making sure that it will continue to seek to reduce the poisonous effect of emissions of this kind. I beg to move.
Viscount Ullswater: This amendment appears to introduce a new grant going beyond the scope of deficiency grant and to impose a new charge on public revenues. Clause 1 of the Bill is intended to introduce a deficiency grant to eliminate the corporation's accumulated group deficit at 31st March 1990 to enable the Secretary of State for Energy to continue properly to advance loans to the corporation. Under generally accepted accounting practice, further development costs cannot be taken into account when calculating this deficit and therefore would not be eligible for deficiency grant. The sums which British Coal has already incurred on research and development into clean coal technology will be extinguished by deficiency grant. This has been rising in recent years. British Coal has had a coal utilisation R&D budget of around £15 million a year, and within that the environmentally related work has risen from under 10 per cent, in 1983 to nearly 50 per cent. now. British Coal has also spent nearly £10 million on the Grimethorpe test rig over the past three years which will now be extinguished by deficiency grant.
The Government support the view that clean coal technology needs to be developed. The Department of Energy currently supports research into many aspects of clean coal technology, but it is appropriate that primary responsibility for funding continues to rest with the industry. It is for industry to undertake research and development in response to the opportunities which are available. The Department of Energy's present budget for coal-based research and development is about £2–6 million and will rise to £7–6 million in 1991 to support the development of British Coal's topping cycle project at Grimethorpe. This budget is used to support more

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than 20 projects, the majority of which are involved with the clean utilisation of coal. I should like to give some examples of the work the department supports.
It is providing support for trials of the British Gas Lurgi coal gasifier. This technology offers greatly reduced emissions of pollutants, and if incorporated into a combined cycle, would result in more efficient power generation. The United Kingdom through the Department of Energy recently joined the International Energy Association coal combustion sciences programme. This programme sponsors research into clean coal technology and specifically develops ways of reducing emissions of oxides of nitrogen. The Department of Energy is also funding coal combustion laser diagnostic work at the Atomic Energy Authority's Harwell technology laboratory. This investigates the fundamentals of coal combustion and will enhance understanding of pollutant formation.
The £2 billion figure given by the noble Lord is partly explained by the cost of fitting Drax power station with flue gas desulphurisation equipment, at about £600 million in capital costs. This is for four gigawatts of production. The Government are committed to ensuring that the United Kingdom complies with the large combustion plant directive, to which I think my right honourable friend the Prime Minister was directing her comments. The directive commits the United Kingdom to reducing its emissions of sulphur dioxide and nitrogen oxides from existing plants such as fossil fuel power stations but does not specify the means by which this should be done. Retro-fitting flue gas desulphurisation equipment will play a part in this, but the burning of low sulphur fuels may also contribute.
I have explained that the Government are undertaking their research and development projects seriously. The amendment goes beyond the scope of the deficiency grant and also introduces a new charge upon the public revenue. It is therefore not acceptable, and I ask the noble Lord to withdraw it.
4.15 p.m.
Lord John-Mackie: I am interested in this subject because I have been involved with forestry for a long time. If acid rain becomes worse there will be serious effects on our forests. Who do the Government expect to provide the money for the research? Is it to be the users? Who do they believe will do the research? Will the users provide the money and the Coal Board do the research? That would be the fairest way and it would not put all the responsibility on the Coal Board.
Lord Dormand of Easington: I am a little puzzled by what the Minister has said or is implying. In a debate in another place last Tuesday on the electricity industry a speech made by the former Secretary of State, Mr. Parkinson, in a debate on the coal industry, was quoted. This is what he said:
"I am able to confirm today that we have asked the privatised generators to continue to plan on the basis of installing 12,000 MW of FGD capacity during the 190s."
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He went on to say, and this is relevant to what we are discussing at the moment:
"If we were to revert to low-sulphur coal, we would have to import massive quantities from overseas. The fitting of Drax and other stations with FGD equipment will ensure that there is a substantial market for British Coal".—[Official Report, Commons, 20/2/90; col. 827.]
Perhaps we would accept that to some extent; but, as my noble friend asks, where will the money come from? The former Secretary of State seems to be supporting in principle what we are saying in the amendment. But it will cost money. If the Minister is saying that the Government go along with low sulphur, and that we shall not destroy our environment or other people's environments, then we shall have to import, in the words of Mr. Parkinson, massive quantitites of coal.
Later today we are to debate the Associated British Ports (No. 2) Bill which is almost entirely concerned with the effect on the British coal industry of an increase—some think it will be a massive increase—in coal imports. If what the former Secertary of State says is the Government's view—presumably that must be the case—where will the money come from; or is the Minister now saying that the Government will agree to this massive import of coal?
Lord Lloyd of Kilgerran: I hesitate to intervene in this debate, but I do so in my capacity as vice-chairman of the All-Party Energy Studies Group of this House. The Minister referred to research being undertaken by the Government, and to the laser diagnostic work leading to better combustion of coal. Is he in a position to tell the Committee about the state of progress in that important research work?
Viscount Ullswater: If I may take the last question first, I am not in a position to do so now, but I take note of what the noble Lord says and I shall investigate further. I shall write to him on the subject. It was one of a series of examples of how the Government are seeking to improve the technology. I shall write to the noble Lord with the details.
To turn to the remarks made by the noble Lord, Lord John-Mackie, I do not need to stress, because it has been stressed by Government Ministers before, that we very much adopt the policy that the polluter pays. Therefore the cost of dealing with pollution is very much for industry whether it is nationalised or in the public sector. The retro-fitting of coal and oil-fired powered stations with the flue gas desulphurisation equipment is an important means of reducing emissions of sulphur dioxide which I understand to be the main component polluter of acid rain.
As I have said, contracts have already been placed for the retro-fitting of the 4 gigawatt Drax power station which is coal fired and further retro-fits are in prospect. But there are other means and not necessarily the massive import of low sulphur coal as the noble Lord, Lord Dormand, suggested, though I guess that some further imports of low sulphur coal will be made.

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For example, there will be greater use of low sulphur natural gas in power stations which will not only reduce emissions of sulphur dioxide, but will help to control emissions of carbon dioxide. That is another important factor that we have to take into consideration when we speak about the greenhouse effect. That could prove very valuable in the strategy.
Lord Dormand of Easington: Perhaps I may comment on something which the Minister has just said in reply to my intervention. I think he said that there will be an increase in the importation of low sulphur coal. The former Secretary of State said that it will be necessary to import massive quantities from overseas. One assumes that that is an accurate description of what is happening. In view of what the Minister said a moment ago, is he prepared to say that there will be a massive importation of low sulphur coal with all the effects that that might have not only on the British coal industry but on the £20 billion deficit on the balance of payments?
Viscount Ullswater: No, I am not prepared to say that there will be massive imports of coal in the future.
Lord Dormand of Easington: That is a comfort.
Viscount Ullswater: It is perhaps just one way of dealing with this particular directive. It is up to the industry to take note of the large combustion plant directive and arrange its affairs so that it can comply with it. I have given the noble Lord an indication of how that can be done in other ways.
Lord Dormand of Easington: We have taken note on this side of the Committee that the Minister is contradicting what the Secretary of State said.
Viscount Ullswater: No. I am sorry to take issue with the noble Lord. I am not saying that what the Secretary of State said was not correct. I am saying that in order to do what the noble Lord has suggested and with no other means at all, then the Secretary of State could be correct. I do not see that there will have to be massive imports of low sulphur coal because there are other means of dealing with the problem including the retro-fitting of the flue gas desulphurisation equipment.
Lord Hampton: Does the Minister not agree that reserves of natural gas are limited, and possibly that the only reserve at the moment which is not limited is in the Norwegian fields? Does the Minister not further agree that it is wrong to encourage taking too much natural gas for large power stations?
Viscount Ullswater: It is axiomatic that all fossil fuels are of a limited nature; we are not making any more. How we use them for the generation of power has to be taken into account when we look at the environmental nature of the burning of fossil fuels. Coal has a deleterious effect on our environment.
Lord Hampton: I must pursue the issue a little further. Coal is one fuel and it is said that there are reserves of coal for at least 300 years still in the
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ground. On the other hand, natural gas is a much more limited reserve and a much more important one.
Viscount Ullswater: I take note of what the noble Lord says. I remind him that we also have a nuclear industry as well for the provision of electrical power.
Lord John-Mackie: I am sure that everybody agrees with the noble Viscount that the polluter should pay. I am asking for some mandatory system of collecting money from the people who might pollute and for that money to go into research if the Minister is not going to give my noble friend £100 million out of Government funds for such research. The money has to come from somewhere and the research has to be adequate. The Minister mentioned one piece of research, but I was hoping that there was a lot more than that.
Viscount Ullswater: In fact, I mentioned about four forms of research for clean coal combustion. The Government are providing a substantial amount of money for these technologies. The noble Lord mentioned acid rain and asked what we intend to do about that. It was to that question that I addressed the remarks that the polluter should pay.
Lord Graham of Edmonton: The Committee is grateful to the Minister for his attempts to clarify what is quite clearly a conundrum. Statements are made by Ministers in another place generally against the background of the commitment by the Government and not least under the EC large combustion plant directive. The Government are committed to reduce the emissions mentioned in this amendment by these amounts: 20 per cent, by 1993; 40 per cent, by 1998 and 60 per cent, by the year 2003.
The Minister has told us that the pledge made by the Prime Minister to the UN last November is not at variance with the actions of the Government to reduce the emissions because there are other ways of doing so apart from those which previously had been held to be the most direct ways. The noble Viscount sits here as a Minister from the Department of Energy and he must be well aware that his colleagues in the Department of the Environment certainly do not see things in the way that he does.
For instance, in an article in the Independent this morning, Mary Fagan, the technology correspondent, deals with this very point. I believe the Minister will be interested in her remarks. She says:
"In a move which has angered officials at the Department of the Environment, the generating industry and the Department of Energy claim that the reductions in sulphur dioxide can be met by using new plants called Combined Cycle Gas Turbines and importing more low-sulphur coal".
My noble friend Lord Dormand has pointed out that we do not look at this matter in isolation because there are other consequences. The Government are hell bent on making the sale of the British coal industry as attractive as they possibly can by reducing the obligations and abandoning their responsibilities to the people of this country, not

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least in the context of the environment and clean air.
This is a very modest amendment. The Minister may very well be right technically that this is not the place in which this subject should be addressed; namely, in a clause which deals with deficiencies. He might have been a little more helpful. This is an argument that will run and run. However, for the moment I shall let the matter rest. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Grants for workforce redeployment and reduction]:
4.30 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 5:
Page 2, line 8, at end insert—
("2A) In subsection (4) after paragraph (b) there shall be inserted—
"(c) for which the corporation has published its projections for workforce deployment and reduction and a statement of the collieries which are expected to be affected, giving reasons for each colliery mentioned." ").
The noble Lord said: As the amendment makes clear, we are anxious to know how the Government see the future of the industry not only in terms of employment but also in terms of the impact of the change. The Minister surely cannot gainsay that there is likely to be a substantial if not a traumatic change in a number of mining communities.
I do not wish to enter into an argument about the fact that over the past 40 years, and certainly over the past 25 years, there has been more change in the physical environment of coal mining communities than there has been in any previous comparable period. We are attempting to encourage the Minister to tell us a little more about the picture of the coal mining industry in the future than we know at present. Of course, there have been statements and leaked documents, but I think that the noble Viscount can do the department which he represents a service if he is frank with the people who will be affected by the legislation.
Let us take, for example, the situation in Nottinghamshire. I have read the report of the relevant proceedings which took place in another place. My very good friend Frank Haynes, who is the Member of Parliament for Nottinghamshire, drew to the attention of Members in that place the difficulties which are being experienced by some county councils—he referred to his council—in trying to anticipate the possible rundown and in endeavouring to find a means of providing work and making other arrangements which will make the possible rundown and closure of pits a little more palatable.
The Minister may say that there are bodies such as British Coal Enterprise Limited and other such organisations in place. However, I must tell him that the coal mining communities are not enamoured by
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having such organisations put forward as the kinds of bodies which will protect them from the trauma they will face in the future. The amendment is a simple one. Moreover, like all of the amendments put forward today, it is a probing amendment. We want the Minister to tell us whether he is in a position—even if he does not accept the amendment—to say a little more about how he sees the future work complement of the mining industry when the Bill is enacted. I beg to move.
Viscount Ullswater: I can understand the wish of the noble Lord, Lord Graham of Edmonton, to know more about the possible closure or reorganisation of collieries and the consequential effect on the workforce. However, the fact is that there is no master plan for colliery closures. Moreover, if there were one it would change so frequently and radically as not to be very meaningful. I do not dispute that there may be some collieries which are physically running out of all economically recoverable coal where you can truthfully say, "Within a given timescale this pit will close". That is a fact of life. The workforce and the local community can take it fully into account in their plans for other jobs. However, in most cases there are simply too many imponderables.
For example, the coal industry has probably the most elaborate system for joint review of poorly performing units of any British industry. Indeed, many pits put into the review procedure have been pulled around and have survived. Even where it is accepted by the men that the pit does not have a future, the number of redundancies cannot accurately be predicted. That is because British Coal has invariably offered alternative jobs to any man who wishes to remain in the industry.
Moreover, requiring British Coal to produce projections of closures and redundancies could prejudice the ongoing negotiations with the generators on long-term contracts for the pits under threat of closure and thus serve to undermine the economic viability of the pit. That would not be in the interests of the workforce concerned.
Over the past three years British Coal has been able to carry out unprecedented restructuring of the industry without a single compulsory redundancy by offering exceptionally generous redundancy terms to its workforce. Such generous terms are only possible because of the Government's continuing support through the payment of restructuring grant which this clause addresses.
In seeking to raise the limit on the grant in the coal Bill, the Government are demonstrating their continued commitment to the industry and its workforce. I think that the noble Lord mentioned the success of British Coal Enterprise Limited. As I recall, on Second Reading we commented on the number of jobs which it has provided; that is, somewhere in the region of 42,000. Therefore, it is quite true to say that the Government see the restructuring of the industry to be the responsibility of British Coal. They are certainly providing the money and the restructuring grant so that that restructuring can take place. They are also providing additional facilities through British Coal Enterprise

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Limited for the employment of those who may seek redundancy. For those reasons, I invite the noble Lord to withdraw the amendment.
Lord Dormand of Easington: The Minister said that there was no master plan for the future of the industry. In literal terms that may be the case. However, he knows that there is a master principle; namely, whether a pit is making a profit. It is as simple as that. As soon as a pit begins to show a loss the position of that colliery is considered. There is no consideration given to the effect upon the community. Of course that is nothing new and I am not presenting a new issue to Members of the Committee.
However, it does not alter the fact that those of us who live in the mining communities realise the absolutely devastating effect which a pit closure can produce. I think that the Minister will probably agree with me that the multiplier effect is a factor of two as regards mining. The economists have said that. Again, we have seen that and we have talked about the effect upon local shops and local services and also the effect upon the firms which make mining equipment, and so on. The criterion which the Government apply to the situation is an extremely narrow one.
I was interested to hear the Minister say that the colliery review procedure is still in operation. If it is, I can tell him that it is an absolute formality. In fact, I suspect that this procedure, which arose out of the miners' strike, is not being considered. I fully support my noble friend Lord Graham of Edmonton when he talks about British Coal Enterprise Limited. This body has said that it has created some 30,000 jobs in the past two or three years, which is the period it has been in existence. However, the number of jobs lost in the coal industry since 1985—that is, since the ending of the miners' strike—is no fewer than 130,000. That is not the whole story as regards British Coal Enterprise Limited. I hope therefore that the Minister will have a closer look at the problem. I say that because when I was in another place I received many complaints about this aspect from people in my area who wished to take advantage of the opportunities available for this body, but, the hurdles which they had to surmount caused some of the applicants to give up. Moreover, I think I am right in saying—and this certainly was the case—that there are no grants involved with this body; in fact, we are talking about loans. That may or may not be a good thing, but I hope that the Minister is not trying to give the impression that these are soft options, that the money is available by the thousands or millions of pounds for former miners who wish to branch out into another form of enterprise.
Perhaps I may also refer to redundancy payments, as the Minister has not done so. I should be the first to admit that the initial redundancy payments offered when pits were being closed were very generous ideed. That fact was most appreciated by the miners. Last year that situation changed. Formerly the redundancy payments came from a generous government fund, but that is not now the situation. The fundamental change came from
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British Coal itself. That is very relevant. It places a totally different complexion on the matter. From the noble Lords's omission of those matters your Lordships may have gained the impression that redundancy payments are still very generous. That is not the case.
I hope that the Minister will say a little more about that matter. The devastation of mining communities continues. One of the difficulties about the way in which we live our lives is that when something happens again and again we tend to take less notice of it. That does not alter the fact that it is a very serious matter for the people concerned. I hope that the Committee will agree to support the amendment.
Viscount Ullswater: I am sure that the noble Lord, Lord Dormand of Easington, does not need reminding that British Coal has managed to produce approximately 100 million tonnes of coal over the last five years. There has been an enormous increase in productivity which has led to some jobs being lost by way of voluntary redundancies.
The restructuring of the coal industry has taken place before. In the years between 1974 and 1979 no less than 295 pits were closed, with job losses in excess of 190,000. As I stated at Second Reading to the noble Lord, Lord Mason of Barnsley, I am not trying to make political capital. I am asking the noble Lord to recognise that previously the coal mining industry had to be restructured by another administration. I do not make any point on that, it had to be done at a time when another administration was in power. The same kind of restructuring is taking place at the moment in order to bring the costs of producing coal closer to the international price of energy.
British Coal has almost a unique consultation process which is the modified colliery review procedure. I have mentioned the independent review body which is the last step in the modified colliery review procedure. That procedure was agreed with the unions in 1984. It is a matter for British Coal; the Government play no part in the review procedure. The procedure is in place and therefore it would be inappropriate for me to comment further.
The noble Lord asked me about the current redundancy terms. Very generous new redundancy terms came into effect on 1st January 1990 implemented by British Coal. A lump sum payment will be made of three times a week's pay for every year of service. That is subject to a maximum of £300 for a week's pay and for 30 years' qualifying service. A lump sum of £27,000 would be available as a redundancy term for a maximum for 30 years' service. Those terms are in place. They have served the industry well in the past and I am sure that they will serve it well in the future.
4.45 p.m.
Lord Dormand of Easington: I should have thought that a maximum of £27,000 is not a particularly generous payment for somebody who has been working in a pit for 30 years.
The Minister is once again perpetuating the myth relating to the 200 pits that were closed during the

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time of the Labour Government. What the noble Lord does not state is that at that time the miners were producing so much coal that it could not be sold. That may or may not be a good situation. The pits were producing the coal. There may have been bad marketing on the part of the Coal Board, or there may have been other reasons for that situation. I do not think that the Minister should perpetuate the myth.
I accept the point that productivity has increased since 1985. If one is trying to get coal from seams 18 inches high—I have been in such pits as, I am sure have other Members of the Committee—there will be the kind of difficulty that has been mentioned. Some of the new pits in Leicestershire and the Midlands have four foot seams. Obviously in those circumstances productivity will increase. I am not grumbling about that situation. However, I hope that the Government, the Minister and your Lordships appreciate that productivity does not come about automatically. The Government have instituted procedures, for example the closing of uneconomic pits.
I was unable to be present for the Second Reading debate, but I have read the report several times. The Minister paid tribute to the management for increased productivity and never addressed a word to the miners. I should have thought that that was a matter upon which the management and the miners deserved the utmost congratulation.
Viscount Ullswater: If I did not pay tribute to the miners in my Second Reading speech, that is a matter that I regret. I should have done so and I should now like to put that matter right.
I think that the noble Lord is wrong to state that I am trying to perpetuate an argument which does not have some effect. He suggested that in the period to which he referred the miners were producing too much coal and that it could not be sold. World energy prices have dropped considerably over the past few years and coal cannot be sold at the price which is required in order to make the industry economic. It is only by an increase in productivity so that the coal which is brought to the surface is of sufficient competitive price that the industry can be restructured and go forward.
Lord Graham of Edmonton: I have no quarrel with the Minister who has, as usual, tried to be helpful. The Minister and my noble friend Lord Dormand have mentioned the crux of the matter. We are not arguing that there does not come a time when a pit must close. We can argue about when one does so and the swiftness with which one does so once the balance sheet slips from the black into the red. We are not arguing against restructuring—the Government's euphemism for closures these days. We are not even arguing about the fact that there have been periods in the history of the British coalfields comparable to the current situation. However, one factor is present now that did not exist before. The Government are going to flog it off. They intend to get out of the business of managing
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or being responsible for, or to, the coal mining communities. They can wring their hands. They can decide that the British taxpayer or the consumer has to get rid of what the Government quite clearly believe is a burden to the taxpayer. The Government now intend under the Bill to produce the best possible product to sell on the open market.
The amendment is intended to suggest that, with this knowledge, the Government should do what other big businesses do. Businesses have a corporate plan, they know what they will develop and what they will close. I know the retail industry best of all and no big business exists that does not say to its shareholders from time to time, "We intend to seek to develop premises in these 20 large towns", or "in these 50 large towns", as many of them say now. "We intend in the fullness of time to close here, here and here, not least because the people who work for us are affected but also because the communities which they serve are entitled to be told of our intentions".
In the amendment we seek to say to the Government, "Why do you not treat the coal miners and the coal mining communities in the same way as other businesses treat their customers and workers?" That is all we say to them.
I believe that the social responsibilities—I hesitate to use the word "moral" but it is perilously close to that—which the Government have to the coal mining industry and communities could be better discharged than hitherto. All we are trying to do in the amendment is to say to the Minister, "Think again". Perhaps we shall come back to this at a later stage in the Bill, but in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3 agreed to.
Clause 4 [Licensing of coal working, and boring]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 6:
Page 2, line 27, leave out ("below ground").
The noble Lord said: I beg to move Amendment No. 6 and speak to Amendments Nos. 7 and 10. The amendments deal with the Government's intention to increase the number of miners who can be employed in a private mine. We wish to use this as an opportunity of debating the issue and persuading the Minister to be helpful not only to the Committee but to those who work in the mines and who are responsible for the safety record of the private mining industry.
The Government are entitled to justify the way in which they seek to make the present mining industry more disparate than it is. Clearly they believe that there are good reasons why private mines can be made more viable if the restriction placed upon them is removed. The Committee should be well aware that the official safety records in private mines are shown in a poor light in comparison with mines managed or controlled by the National Coal Board or British Coal. I am not saying that the record of

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private mines is appalling and that the gap is so enormous. However, we wish to know why, in the light of the bad comparison, the Government intend to put more miners at risk by increasing the number who can work in private pits.
The record is quite startling. In 1987–88 there were three deaths and 27 major injuries in a workforce of around 4,000 in private pits. That is compared with nine deaths and 780 major injuries in British Coal's workforce of 89,000. One can see from that that pro rata there is a greater chance of a miner being either killed or injured in a private mine than in the mines operated by the coal board.
The question we wish to ask is: what do the Government intend to do? Once they have washed their hands of the coal board, what will they do to ensure that the safety record of the private mines is at least as good as the record of British Coal? The number of miners is important. We understand that there is a Bill—not only the Act nationalising the mines—and other pieces of legislation which govern what happens in the private mines.
Our intention is to seek to ensure that in future the private mines are at least as safe as the British Coal mines. We should like the Minister to spell out why it is necessary in 1990–91 to increase the number of miners put at risk in private mines. I beg to move.
Viscount Ullswater: The effect of the first two amendments—Amendments Nos. 6 and 7—is to reduce the limit on licensed mine operations. The present limit of 30 men would apply to total manpower at the mine, which includes surface workers and management staff, not simply the manpower employed to work underground as at present. We cannot accept this. I explained in the Second Reading debate why the Government felt that an increase in the licence limits was desirable in terms of increasing the output of specialist coals, enhancing competition and creating jobs in depressed mining areas. I am sad that the noble Lord, Lord Graham of Edmonton, did not attempt to address the position on jobs.
I now wish to address the issue of safety head on. We believe that an increase in the maximun number of men allowed to work underground in licensed mines is essential to the development of modern, mechanised and safe operations in the licensed sector. It is therefore disappointing that noble Lords opposite wish to perpetuate the working conditions of over 40 years ago. That is precisely what the amendment will do.
The limit of 30 was set in 1946 and reflected the operating conditions and mining economics of the day. Those were the pre-mechanisation days of hand filling of tubs rather than conveyors. Accident rates in British coal mines were much higher than they are today and very much on a par with the rates that we have seen in licensed mines in recent years. In 1950, there were 476 fatalities in British coal mines out of a total of 688,000 men on the books. That represents one death for every 1,450 men. In the current financial year, the private mines employ around 1,700 men and there has been one fatality. Mechanisation has reduced the fatality rate in British
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coal mines to one for approximately every 4,000 employees. I find it hard to see the logic of the noble Lord's argument. If he feels that the very small mines are intrinsically unsafe—which I think is what he suggested—I should have thought that he would have argued for their complete elimination.
However, that is not the position. The position is simply to wish to condemn the private sector mine worker to the working methods and safety levels of the 1940s. We, on the other hand, believe that the most effective way of making mines safer for underground workers is through mechanisation. That is not simply the Government's view: it is the view of British Coal's own technical director who has been quite emphatic that the way in which British Coal reduced its accident rates was by the application of mining engineering technology. I am in no doubt that the out-of-date working practices that licensed mines are currently forced to use because of their size prevent the improving of safety standards.
Reports of the Mines Inspectorate on accidents in the licensed sector suggest that many of the fatal accidents recorded would not have happened had modern mechanised roof support and conveyer systems been employed. The investment required for that—that process does not necessarily require the most expensive modern technology—can only be generated by mines that are larger than the existing ones. Those mines need to increase productivity by multi-shifting or working two faces. That means more men are needed and more mining jobs would be provided. Those jobs would be provided in the areas of the country where they are needed.
I shall now turn to the other amendment in this group, Amendment No. 10. I am not sure whether the noble Lord wishes to address it. The noble Lord nods his head so I shall continue. The amendment seeks to require British Coal only to license mines where the manager had appointed one or more persons to direct at the pit head the lowering and raising of workers and had caused a register to be kept of those going down and coming up. That is the effect of the Coal Mines Regulation Act 1908, Section (2)(1). I must tell the Committee that the amendment is unnecessary. All coal mines, whatever the size of their workforce, have to comply with the requirements of the 1908 Act. The mine manager is required to ensure that the lowering and raising of workers in and out of mines is properly supervised and that a register of such movements is maintained. Compliance with Section 2 of the 1908 Act is monitored by the Health and Safety Executive Mines Inspectorate. In the event of a contravention, the mine owner, the mine manager and any undermanager would each be guilty of an offence. Having dealt with those amendments, I ask the noble Lord to withdraw them.
5 p.m.
Lord Dormand of Easington: The Minister has properly drawn attention to the significant reduction in the number of fatalities in mines and we all say hurrah to that. That has been a most significant

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development over the years. However, I suggest to the Minister that that reduction has been brought about through a number of causes which we need not go into. However, I should say that one of the most important committees at a pit is the safety committee. Miners have become conscious over the years of how necessary it is to take the kind of precautions which are laid down in the measures which the Minister has just enunciated. Therefore I find it difficult to understand some of the Minister's remarks. He made certain remarks on two occasions on Second Reading and he has repeated them again today. On Second Reading he said that:
"the increase in the number of those involved in deep mining will allow the introduction of new and modernised equipment which will go a long way to helping in that regard".—[Official Report, 9/2/90; col. 1061.]
I find that difficult to understand. The Minister's remarks from the Dispatch Box just now have not convinced me on that issue. The Minister should have mentioned injuries as they are, if not as serious as fatalities, still very serious. Serious injuries are caused in a pit by machinery. We hear in the mining areas of some horrific accidents such as miners having their limbs torn off or being crushed. That kind of thing can be brought about as a direct result of machinery being introduced. I am obviously not against the introduction of machinery, but I am saying that the reason which the Minister has given on at least three occasions is that the introduction of machinery ipso facto will lead to a reduction in fatalities and injuries. I find that impossible to accept. I hope the Minister can satisfy me further on that point.
Lord Tryon: I have not intervened before on this Bill and I was not able to be present for the whole of the Second Reading, but I intervene now because I was at one time what one could call a private miner. I was a director of a company that had four small private licensed mines of the type we are now discussing. That was about 10 years ago. I am no longer a director of that company so I produce that information as a qualification rather than as a declaration of interest.
During the two or three years that I was involved in the private mining business I learnt several things about it. First, I discovered the absolutely splendid Qualities of the men who worked in the private mining field. They worked in conditions of incredible squalor and difficulty. They had to work difficult little seams. Nevertheless, their hearts were really in their jobs. They seemed to enjoy tremendously working for private mining companies. They were nearly all ex-Coal Board employees but they had made their lives in private mining.
However, as the owner of the mines, as it were, I soon learnt that private mining was an extremely difficult way of making money. It was a real struggle to break even, even on quite a good seam, because it was extremely hard to justify spending money on capital equipment. The mines therefore ran on with their strict limitations on numbers of people. One simply could not expand them as one could not
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justify spending the money. The mines went on and on in their primitive way with the hand-loading of tubs. One of the mines even had pit ponies. That was 10 years ago, but I suspect that pit ponies are still used in that mine. Therefore, I support what the Minister has said. If the opportunity is given to expand some of those mines to a bigger size and to have 150 men underground rather than 30 the justification to spend more capital would exist. That certainly to me would mean safer working.
Viscount Ullswater: It is always useful to have in the Chamber someone who has direct experience of the matters that we are discussing. I am grateful to my noble friend Lord Tryon for his experiences which he has recounted today. To some extent he used the words which I should have used or which I sought to use. He illustrated that with the constraint on the number of men being allowed to work underground the revenue is not available to invest in the capital machinery that I am talking about.
The noble Lord, Lord Dormand, suggested that injuries can be caused by machinery. If one investigates the injuries in private mines that are caused by machinery—most of those are caused by machinery and not necessarily from roof collapses—one finds that it is the outdated machinery that is causing the problem. The Government are convinced that by allowing the number of men to increase from 30 to 150 capital investment will be put into these small mines. I accept that that will not be the case as regards all small mines. There are still some small mines which only employ half a dozen people. I am sure that those mines will continue in that way as those companies will probably wish to continue mining, whatever the circumstances. I pay great tribute to those miners as theirs is an unenviable job. However, that is the job they seek and they seem to enjoy it. However, I suggest that the amendment that we put forward to the original Act is sensible and therefore I hope that the noble Lord will withdraw his amendment.
Lord Graham of Edmonton: I am grateful to the Minister. I acknowledge the experience that the noble Lord, Lord Tryon, brings to this debate. That is of course valuable, as is the experience of my noble friend Lord Dormand. However, our great concern quite frankly is the safety of the men. We are not trying to make an ideological point. We simply believe that the record and the remarks of the noble Lord, Lord Tryon, show that very often it is not a case of the mine owner not wanting to provide better safety but of owners having to make judgments in the context of their balance sheets as regards replacing bits of machinery. If those matters affect the balance sheet, I fear that in those instances the lot of the miner is put at risk.
We are also concerned about the changes which affect safety. I am told that in future a colliery deputy will no longer be required to hold a first aid certificate. My noble friend Lord Dormand, who speaks with authority on such matters, said quite rightly that safety is crucial to the peace of mind not only of the miners but also of their wives and families.

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There are a number of other issues. For example, I am told that British Coal has reduced the number of training centres and is cutting back on off-the-job training. That is sad. British industry in general stands condemned for failing to do its job in training future generations of managers and workers. We should be pressing for greater safety measures rather than their being, as I fear, diminished.
The Minister has done what he can. I shall consider what he said and I may return to the matter at a later stage.
Lord Dormand of Easington: My noble friend raised a matter which I had intended to mention myself, namely the fact that deputies will not now be required to hold a first aid certificate. That is an amazing suggestion. Deputies are very proud of their certificates, which they acquire as part of their overall training. Perhaps the Minister can tell us why that is being withdrawn.
Viscount Ullswater: The situation is not quite as the noble Lord suggested. The Health and Safety Executive recently put forward proposals to the Health and Safety Commission which, if implemented in their present form, would include a requirement for a higher ratio of first aiders to persons employed below ground than is currently required. However, the proposals would not require a deputy to hold a first aid certificate. The commission is currently considering those proposals. It is not a fait accompli.
Lord Graham of Edmonton: The Minister has tried to be helpful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 7 not moved.]
5.15 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 8:
Page 2, line 32, leave out ("250,000") and insert ("30,000").
The noble Lord said: In moving Amendment No. 8 I should also like to speak to Amendment No. 9. The Government propose to increase the maximum permitted production for private licensed opencast mines. We had a canter over the course at Second Reading.
In many areas opencast mining is visually offensive. Despite the best endeavours of the Government, the Coal Board, the law, and local authorities, opencast coal mining is turning out to be an environmental disaster. We see no case for production being increased as proposed.
We are very concerned at the attitude of British Coal. In granting licences for workings exceeding the permitted totals British Coal has acted against the law. Not long ago British Coal announced that in considering applications for private licences it would no longer obey the law and would countenance workings of up to 30,000 tonnes, despite the fact that the law specifies 25,000 tonnes. That smacks very much of the attitude towards Sunday trading. You bring the law into disrepute and then argue that
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because the law has been brought into disrepute it ought to be changed. The law is the law until it is changed. To their credit, the Government are at least seeking to change the law by the proper means. We disagree with their proposal. It is extraordinary that a government agency should announce that it intends to flout the law. I should like to hear the Minister say a few words on that subject when he replies.
I rest my case on the outcome of the Flowers Commission on Energy and the Environment which came down against the deleterious impact of opencast coal mining. The commission stated:
"We strongly recommend that as older, more unprofitable and less environmentally acceptable deep mines are closed and more efficient and profitable operations take their place, the volume of opencast mining should be allowed to decline. In the meantime, there should be no increase in the present target of 15 million tonnes per year."
I understand that the figure is now 18 million tonnes.
"The uniquely sensitive character of the British countryside and the high population density in much of the country would not be able to accommodate, without unwarrantable damage, a target in excess of that level".
A great deal can be said about the impact of opencast mining. I am indebted to Mr. David Gosling of R & A Young Mining Limited, Prospect House, Leadgate, County Durham—a place that I know very well indeed—for a letter, which I received only today. Mr. Gosling comments on the evidence of the County Planning Officers' Society that I read into the Second Reading debate concerning some of the ways in which the law has been flouted. He tells me that he was a county planning officer and that a great deal of what was said in the name of county planning officers was not strictly correct. In some cases the damage that was held to be clue to opencast mining was due to other causes. The letter is far too detailed to go into in this debate.
I ask the Minister to justify the proposed increases because the communities affected—not only those who live near the sites but also those who suffer from the dirt, dust and disease caused by opencast coal mining—would not wish to see such an extension. I beg to move.
Viscount Ullswater: The amendment would have the effect of restricting the increase in tonnage limit to 5,000 tonnes, making a new limit of 30,000 tonnes.
The figure of 250,000 tonnes proposed in the Bill was chosen very carefully to meet certain objectives. First, there is general agreement in the mining industry that there have been huge developments in mining equipment and techniques since the existing limits were originally set. However, it is simply not economic to deploy efficient, modern equipment on the smaller sites specified by the existing limits. A significant increase was therefore needed to enable licensed sites to be worked more cost effectively. Furthermore, the existing limit often meant that deposits were worked in a piecemeal fashion over an extended period of time, thereby prolonging the disruption to the local community.
The increase proposed by the Bill will reduce the number of deposits worked in that way and for that reason has been welcomed by the representative

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bodies of the local authorities. Larger sites will also provide greater operating flexibility which will help the licensees to achieve higher restoration standards.
The second reason for choosing 250,000 tonnes was that it fills a gap in the size of deposits being worked. British Coal rarely works sites smaller than 500,000 tonnes which effectively sterilised a significant number of deposits which could be efficiently worked by the licensed sector. The new limit will mean that a significant number of those deposits will be worked as a single, planned development without affecting British Coal's operations.
The noble Lord, Lord Graham of Edmonton, asked me why British Coal treated the figure of 25,000 tonnes as a figure closer to 30,000 tonnes. There is a difficulty in the wording of the Bill. It refers to a licence which, in the board's opinion, is not likely to exceed, or greatly to exceed, 25,000 tonnes. It is extremely difficult to envisage, before the coal is mined, whether the figure should be 25,000 tonnes or more. The noble Baroness, Lady Stedman, expressed concern on Second Reading about what was meant by the phrase
"not likely to exceed, or greatly exceed, 250,000 tonnes". [Official Report, 9/2/90; col. 1048–1049.]
That flexibility is needed because one can never be precise about how much coal is available within a site. However, with the larger figures that we allow, I do not expect areas to be licensed which prove to contain very much more than 250,000 tonnes. The same goes for the new 150-man limit on deep mines. Likewise, there is no statutory bar on British Coal awarding an opencast licence in respect of tonnage up to 250,000 tonnes within a larger deposit of coal. However, I would not expect British Coal to issue consecutive licences within the same deposit. I have already referred to piecemealing. I shall repeat that point: I would not expect British Coal to issue consecutive licences within the same deposit. Where a licence for up to 250,000 tonnes in a larger deposit of coal is being considered, I would expect the corporation to have regard to, among other factors, the likelihood and desirability under current mineral planning policy of the deposit being extracted as a whole under a single operation.
There are therefore sound and cogent reasons for the modest but significant increase in the tonnage limit proposed in the Bill. As I have shown, the figure of 250,000 has been carefully chosen to meet several objectives. The amendment will meet none of those objectives and has no rational basis. I have not strayed into the environmental area because we shall debate that later. I have restricted my remarks to the reasons why the Government see an increase in the figure from 25,000 to 250,000 as advisable. I therefore hope that the noble Lord will feel able to withdraw his amendment.
Lord Graham of Edmonton: The Minister makes a case regarding a gap that can be filled by the addition. Will he tell us what effect that will have on the current total of opencast mining? What will be the potential effect of the tenfold increase? What has the
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Government's research indicated is likely to happen? The Minister quite properly reminded the House that the 25,000 tonne limit is not fixed in stone. I realise that one cannot be absolutely precise. However, if one follows the logic of the increase of the Coal Board's tolerance from 25 to 30, one must do likewise with the increase from 250 to 300. The Minister cannot say that the limit is 250,000 because the same arguments might well emerge and be applied in that case.
We shall leave the environmental argument until later. However, the Minister will be aware that to put forward the case in the present context flies in the face of the Flowers Committee which was well aware of the potential although not necessarily the current position of energy mix. If the Government are as green or as environmentally pure as they claim, and even if they can produce economic arguments, surely they do not want to rest their case there. However, we shall return to that point later. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 9 and 10 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 11:
Page 2, line 32, at end insert—
("(c) in paragraph (c) after "tonnes" there shall be inserted "and when undertakings have been made by the operators for the restoration of the land affected by the working of coal or by operations incidental to such working".")
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 12.
The amendment seeks to lay upon the future licence-holder who will mine opencast coal a duty to place a deposit with the local authority. I do not say that heinous crimes have been committed, but I have read what I have read. From what one might call not a prejudiced but a biased point of view, there are clearly many opencast operators who fail to leave their land in accordance with the conditions that have been laid. We are all familiar with the arrangement whereby one leaves a deposit or a sum of money which is returned when one vacates the chalet or house or when one returns the motor car. One therefore complies with the conditions. If the conditions are not met—it is clear that that happens—it is the taxpayer and others who pay.
The Minister says that the Government believe that the polluter should pay. We say that there might be circumstances in which it is better that the operator pays in advance and gets his money back when he has proved that he has been a good operator, rather than the other way round. Even when land is ostensibly restored, the quality of the environment is inevitably and irreparably damaged. We hope that we shall not make the duty too onerous, but we are talking about people's lives and communities. We say that a bond—I am not talking about a precise sum—which is sufficient to make it worth while for the operator to carry out both his civic and mining duties is reasonable and fair. I beg to move.
Viscount Ullswater: The two amendments tabled by the noble Lord, Lord Graham, require British Coal to satisfy itself that undertakings have been

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given by licensed opencast operators to restore the land and to place bonds with the local authority to that effect. Under the new and fuller Mineral Planning Guidelines (MPG 3) published in 1988, the principles of restoration and intended after-use are now required to be settled at the time planning permission is granted. As British Coal will not issue a licence until planning permission is granted, the aim of the first amendment is already fully achieved.
As regards bonds, I am not convinced that it should be only licensees—that is, only the licensed sector—and not British Coal who should place bonds with local authorities, as this amendment would seek to put on the face of the Bill. That seems to be an unreasonable distinction. Moreover, local authorities should have discretion to call for bonds. It should not need to be mandatory. However, I accept that there may be occasions on which bonds are appropriate. I do not suggest that they are not. In those cases, local authorities can already effectively require them as part of the planning process leading up to the granting of planning permission.
I hope that I have been able to indicate to the noble Lord that the amendments that he seeks to move are already taken care of and that perhaps the point that only licensees rather than British Coal should be bound by this provision should be taken into consideration. I hope that on that basis the noble Lord will agree to withdraw his amendment.
5.30 p.m.
Lord Graham of Edmonton: The Minister makes a fair point that one wants to be even-handed. To that extent the amendment may very well be defective. However, we are moving into a situation in which neither the coal board nor the private operator will be under the sovereignty of the Government in respect of these matters. It is left very much to the power and determination of the local authorities.
I turn to the next point made by the noble Viscount. The conditions which a local authority lays down are probably pretty standard. I have seen lists of that kind of thing. Having been a member of a planning committee I know that council officers are assiduous in urging that they must have planning permission, but also in making sure that there is restoration of the visual amenity, turning points for cars, and so on. They are very good at doing that. However, we come down to the ability of the local authority to enforce its conditions. I can well imagine some local authorities which are very careful about carrying out their obligations and asking for a bond; I can equally imagine others which are not. I am afraid that the wider community will suffer according to the zealousness and perspicacity of the local authority in these matters.
However, the Minister has done what he can and I am grateful to him. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 12 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 13:
Page 2, line 45, at end insert—
("(2A) After subsection (2) of that section there shall be inserted—
"(2B) A licence under subsection (2)(a) above shall not be granted to
(a) any person who, or company which, has been convicted of an offence relating to its colliery activities in the relevant period, or
(b) any company in which the controlling interest is held by a person who, or company which, has been convicted of an offence relating to its colliery activities in the relevant period.
(2C) For the purposes of subsection (2B) above the relevant period shall be defined as five years prior to the date of the application for a licence under subsection (2)(a) above or the date upon which this Act received its Royal Assent, whichever shall be later".").
The noble Lord said: This amendment seeks to insert in the Bill a provision in respect of the proven record, in every sense of that term, of those who will operate opencast coal mining. We are concerned in particular about someone who may have been convicted under the Mines and Quarries Act 1954 because he or she has been derelict in carrying out his or her obligations. We are concerned that the health and safety of those who work in the mines are not put into the hands of someone whom a court has held to have failed to carry out his obligations.
This amendment concerns any person who has been convicted of an offence relating to colliery activities in the relevant period and then goes on to be more specific. I beg to move.
Viscount Ullswater: I fully recognise the importance of the issue that lies behind this amendment. Mine safety is and always must be of paramount importance. I agree entirely that mines must be run only by those who are fitted to run them. However, it would be inappropriate to use the Bill to impose mandatory sanctions for offences which are not directly related to its subject. The safety regulations governing the mining industry are part of the health and safety at work legislation. Also, this amendment does not distinguish sufficiently between serious offences and those of a trivial nature. It would be quite iniquitous if a company were effectively to be put out of business simply because it had committed a relatively minor misdemeanour.
I believe that the most effective and indeed proper way of dealing with the issue is through the licensing process itself rather than through legislation, which is precisely how we deal with the problem in licensing North Sea oil operations where safety is equally vital. The statutes governing those licences do not contain requirements similar to those contained in this amendment but the applicant's safety record is taken into account in the licensing process.
The Secretary of State has given an assurance that he will ask British Coal to take into account any criminal record not just of the mine owner, as the amendment suggests, but also the mine manager in any application for licences or renewals of existing licences. That seems to us to be the right way to proceed and I hope that the noble Lord will feel able to withdraw the amendment.
Lord Graham of Edmonton: I intend to withdraw the amendment but I believe that the Minister is far more sanguine than he is entitled to be according to the record. I understand that in October 1988 Mr. Alfred Davies, who is a deputy chief inspector of mines and whose views should be respected, was reported to have said a number of sharp things when the inspectorate met the Federation of Small Mines. Among other things he said:
"Professional standards of management in licensed mines must improve. All too often the reports record very poor mechanical, electrical and mining standards. There is no excuse for these or the fact that managers often do not understand what proper standards should be".
No amount of conditions or licensing permissions will stop someone who either fecklessly or recklessly is intent on abdicating his responsibilities. I believe that the Minister is more sanguine than the situation allows. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 14:
After Clause 4, insert the following new clause:
("Definition of accumulated group deficit.
For the purpose of this Act the "accumulated group deficit" shall include—

(i) sums owned by the Corporation to the Treasury or the Bank of England;

(ii) sums owned by the Corporation to banks and other financial institutions;

(iii) sufficient sums to cover all outstanding claims on the Corporation for compensation for coal mining subsidence damage; and

(iv) such additional sums as the Corporation would have been liable for if the recommendations contained in the Report of the Subsidence Compensation Review Committee on the Report and Compensation System for Coal Mining Subsidence Damage had been enacted before 30th March 1990.").

The noble Lord said: With this amendment, which stands on the Marshalled List in the names of my noble friend Lord Graham of Edmonton and myself, we return to the question of the definition of the accumulated group deficit. As the noble Viscount will be aware, this is a point that has worried us throughout the passage of this Bill and indeed now at Committee stage.
The new clause that we propose specifies the nature of the accumulated group deficit. If I may take the small Roman figures seriatim, as it were, the paragraphs start off:
"(i) sums owed by the Corporation to the Treasury or the Bank of England".
The Secretary of State, being not a person but an institution, has financed the corporation extensively and we should like to make sure that the accumulated group deficit includes outstanding amounts to the Secretary of State, which in practice is the Consolidated Fund; and indeed if there are any facilities granted by the Bank of England to the corporation of which we have no record in the report and accounts of the corporation we should like to see those accumulated into the deficit. The accounting principles are quite simple. They are in profit and
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loss terms as written off and put in as a deficit in profit and loss terms.
Secondly, we are worried that there is an obligation in the annual report of the British Coal Corporation for the year ended in 1989 (I do not recollect the month; I could look it up but I am sure that the noble Viscount has it to hand) with regard to bank loans and overdrafts of some £44 million (and £47 million on a consolidated basis) and other creditors not falling due within one year of £808 million. We do not quite know what all that amounts to. However, it seems to us that if the corporation is to be put on a proper financial footing, if it is to be a free-standing, financially solid corporation, those obligations which are no doubt entered into on the basis of some assurance from the Treasury that they will be met should be catered for in the accumulated group deficit.
Paragraph (iii) of the amendment includes,
"sufficient sums to cover all outstanding claims on the Corporation for compensation for coal mining subsidence damage".
The Committee will be aware that it is a matter that was raised on Second Reading. We believe that there are potential outstanding claims that the corporation will have to face. It would be absurd if the Government tried to put the corporation on a sensible financial basis without making allowance for these.
In paragraph (iv) we include some arrangement that there should be a provision which would pass through the profit and loss account and therefore become part of the accumulated group deficit which would have been liable were the recommendations of the subsidence compensation review committee to be enacted before the end of March. In other words, if that happens, then clearly there will be an obligation on the corporation which we feel should be met under the terms of the Bill.
I recognise that it is a rather large point. I recognise that the Government may not wish to go as far as we should like to go. However, I emphasise the principle: if the Bill is designed to put the corporation on a proper financial footing, those are the issues which the Government must address. I beg to move.
Viscount Ullswater: As regards sums owed to Government and to banks, the purpose of Clause 1 of the Bill is to recognise that the corporation's asset base has been severely eroded by the events of recent years and to restore the corporation to a position where the Secretary of State can properly continue to advance loans to meet its day-to-day cash requirements. It is not the intention to eliminate all the corporation's debt; only that part which cannot be adequately remunerated by its activities.
If the Bill had been intended to eliminate all of the corporation's outstanding loans, the Government would have taken steps to provide the corporation with dividend capital. However, the Government believe that it would be quite wrong to do this in advance of fundamental decisions about how the corporation will be privatised.
Clause 1 of the Bill will limit the deficiency grant available to the amount of the corporation's

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accumulated group deficit at 31st March 1990. This deficit is currently expected to be around £6.5 billion, but there is a substantial margin of error, depending in particular on the extent of the asset write-down—a subject which we addressed earlier at Committee stage. I am confident that the limit on deficiency grant as set out in the Bill will be sufficient for the financial reconstruction to achieve its objective of enabling the Secretary of State to continue to lend to the corporation, without increasing this limit by the amount of the corporation's currently outstanding debt.
I am advised that the noble Lord will be aware that for the Secretary of State to forgive the corporation all or part of its loans would result in a credit to its profit and loss account and so in fact reduce the accumulated group deficit.
As regards the subsidence provisions, the corporation has provided in its accounts for some time (as coal is mined) for its estimated liability to meet the cost of surface damage. The provision included in its accounts to 31st March 1990 will therefore automatically be covered by deficiency grant as currently defined in the Bill.
It is not possible to assess fully the extent of any increase in British Coal's subsidence costs until details of the legislation are finalised. The noble Lord will be aware that further legislation to take account of the Waddilove Report is intended. It will then be for the corporation, in line with the "polluter pays" principle, to make the necessary provisions at that time. The adequacy of the corporation's provisions, including that in respect of its liability to pay compensation for subsidence damage, will be reviewed by the corporation's auditors when reporting on the corporation's annual accounts.
The noble Lord asked me a specific question about the other creditors of the £808 million. I am afraid that I do not have the detailed analysis of this figure but I believe that it relates largely to sums owing to pension schemes under annuity arrangements and to retention moneys in respect of uncompleted contracts, not sums owing to banks.
With that explanation, perhaps the noble Lord may feel inclined to withdraw the amendment.
Lord Williams of Elvel: I am most grateful to the noble Viscount. I understand that it is not the Government's intention to eliminate the whole financing deficit of the corporation, but the accumulated group deficit; in other words, past losses. I can find all kinds of accounting procedures for ensuring that forgiveness of debt does not appear as a credit on the accumulated group deficit. If the noble Viscount wants my advice, I am happy to give it to him—obviously for a commercial fee! I can certainly find ways and means of doing that.
On the question of subsidence, I accept that it is an issue which is to a certain extent open-ended until the Government introduce legislation to cope with it.
I am not entirely happy with the reply of the noble Viscount. However, in the interests of proceeding with the Committee stage on the Bill, I shall not press the matter further. I shall read what the noble
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Viscount has said, and may return to the issue at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
Lord Norrie Lord Norrie moved Amendment No. 15:
After Clause 4, insert the following new clause:
("Licensing: conservation requirements.
.—(1) No licence shall be awarded under section 4 of this Act for the working of coal at a mine or by opencast operations unless the Board is satisfied that the proposal for which a licence is sought has been formulated having regard to the desirability of preserving natural beauty, of conserving flora, fauna, and geological or physiographical features of special interest, and of protecting sites, buildings and objects of architectural, historic or archaeological interest, and takes steps to mitigate any effect which the proposal would have on the natural beauty of the countryside or on any such flora, fauna, buildings or objects.
(2) The provisions of the preceding subsection shall also apply, with the necessary modifications, where any proposal is being formulated for the restoration of land affected by the working of coal by opencast operations or by operations incidental to such working.").
The noble Lord said: The amendment would extend to the private sector the environmental duty that currently applies to British Coal's opencast operations. First, I should like to comment on the very positive debate that we had at Second Reading when almost every speaker referred to the need for stricter environmental conditions to be imposed on the coal industry. I therefore approach this debate with considerable optimism that the Government will respond positively to the need for a new duty, and will either accept my amendment or bring forward their own at Report stage.
The case for an expanded environmental duty is obvious. British Coal has had an amenity duty on its opencast operations since 1958. This was confirmed in 1986 under the Housing and Planning Act. Now that the Government intend greatly to expand the private sector activity in coal extraction, it is only logical and sensible to ensure that the private sector operates under the same framework as the British Coal Corporation. It means extending BCC's environmental duty to the private sector.
It is quite clear that the Government already hope that this will happen. In 1988 the Department of the Environment issued guidance to mineral planning authorities in its Mineral Planning Guidance Note 3. On page 5, at paragraph 16, it states that it expects that private operators will wish to have regard to similar considerations as those applying to British Coal.
The guidance is welcome, but it is by no means sufficient. Regrettably, the performance of many private operators in this field leaves much to be desired, as I mentioned in referring to the Durham County Council report on Second Reading. A simple hope that of their own free will private operators will embrace a statutory duty that technically applies only to British Coal is not good enough. The purpose of my amendment is to put into legislative effect that which the Government already hope will happen.
My amendment can be broken down into three areas. First, it would apply the environmental duty

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to the deep-mine and opencast sectors. I expect that my noble friend will tell me that I am breaking with precedent because BCC does not yet have an amenity duty with respect to its deep-mine operations. I am aware of that, but I believe that it is now time for BCC and the private-sector deep mines to have such a duty.
Secondly, my amendment would require private-sector companies to take the environment into account while formulating their proposals. That is vital because the procedures of planning and environmental impact assessment (EIA) do not in practice have much influence until a much later stage in the development of a project.
By that time all the major decisions, especially the favoured site, have been taken. Nothing could be more important than building consideration for the environment into the decision-making process at the earliest stage.
I was heartened when, in response to my amendment tabled last year during the passage of the Electricity Bill, the Minister agreed to accept the fact that similar duties should apply to the Secretary of State, to the Director of Electricity Supply and to the private-sector power generators and distributors. Those duties now appear in Section 3 of and Schedule 9 to the Electricity Act. Therefore, I am optimistic that my noble friend will build on that precedent by accepting my amendment today.
Thirdly, my amendment ensures that steps would be taken to mitigate the adverse impact of the development as an intrinsic part of is formulation. Such impact might be landscape damage; noise; and dust and traffic movements created in any coal extraction site whether deep-mine or opencast. That process would also interact with the planning stages where local authorities can impose conditions on developers to reduce environmental damage and the process of EIA which can identify mitigating measures.
I should like to comment briefly on the planning process and EIA and explain how my proposed new duty will relate to them. My noble friend referred to that point in his response to the Second Reading debate. All coal extraction proposals, whether deep mine or opencast, require planning consent. The normal planning procedure is the same as for any other development. The local planning authority receives the application, considers it and is entitled to give consent, refuse it, or impose conditions on a consent.
Since 1988 the EC environmental impact assessment directive has operated in the United Kingdom. It requires developers of certain projects to submit with their planning application an environmental statement describing the impact of their proposed development on the environment, together with the steps that they have taken to mitigate any environmental damage caused.
Obviously, these processes are of vital importance but we should be aware of their limitations. First, planning authorities are able to consider only the applications that they receive. For example, they cannot state that they believe that a much better site
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for opencast coal exists 10 miles from the site in question. Neither does EIA, which is a welcome addition to the planning process, apply in every case.
The detailed regulations covering EIA extend only to new large deep mines and opencast sites over 50 hectares. The exception is sensitive areas where smaller sites may require EIA. Fifty hectares is an enormous area of land. For those Members of the Committee who have difficulty thinking in metric measurements, it is an area slightly larger than Green Park and St. James's Park joined together. It is obvious that some applications would not be covered by the need to undertake an EIA.
However, for the purpose of my amendment it is important to note that EIA is implemented only after a site has been chosen and if it falls above the required threshold. My amendment would influence the process at a much earlier stage. For example, my environmental duty should help by identifying the least damaging sites; searching out derelict or unsightly land where coal extraction operations could improve the site; matching coal quality requirements with environmental considerations and the national need for coal with the objective ot minimising overall environmental damage. The experience of EIA in this country is that it is not able to fulfil that function. Therefore, I believe that my amendment is a necessary and important complement to existing planning and EIA procedures.
There appear to be innumerable arguments for accepting the new clause. There are legislative precedents in the Housing and Planning Act and the Electricity Act. The Government are on record as stating that they hope that the private sector will adopt similar duties in Mineral Planning Guidance Note 3, and there is ample evidence showing widespread concern about the damage which coal extraction—especially opencast operations—has on the environment.
It is clear that if private sector activity is to expand as the Government hope, it must do so in ways which cause the least damage to the environment. To date the private sector's performance is not reassuring. It is vital that we take steps now to ensure that the private sector plays its part in making sure that necessary industrial activity in our countryside results in the least possible harm. I beg to move.
Baroness Stedman: I support the amendment. I wish to deal with the problems already caused to local authorities which I raised on Second Reading. There are problems for local authorities where sites are not properly regulated and restored and where the environment is damaged.
The amendment tabled by the noble Lord, Lord Norrie, provides a strict environmental framework for the licensing of coal extraction. As he has said, in laying down the environmental duty to take account of the environmental impact of any scheme during the formulation of proposals as well as during the planning and assessment stages it follows implicitly the precedent of the Housing and Planning Act 1986 and the Electricity Act 1990. Unless the operations are guided from the outset by improved

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environmental responsibilities, the environmental damage could be greater than need be the case.
On Second Reading I referred to the concern felt by local authorities as a result of the proposal that the corporation can grant licences for opencast operations where the total production figure is not likely to exceed, or greatly to exceed, 250,000 tonnes. That is a 10-fold increase on the present limit of 25,000 tonnes. Yet, despite that huge increase, there is no requirement in the Bill for the licensed sector of the industry to have specific regard for environmental considerations, unlike British Coal.
Opencast coal mining can have significant environmental implications even where the operator takes all possible care to minimise the effects in the locality during the operation and to restore the land afterwards. It is imperative that private operators should be under no less an obligation than British Coal to minimise the environmental effect of their operations.
Since I spoke on Second Reading, I have received a great deal of correspondence concerning different local authorities and the problems that they have faced. I shall not bore the Committee with all the details but I wish to refer to some of the smaller licensed-operator sites. I refer in particular to Cinderhill, a site of 20 or 30 acres near Kilburn in central Derbyshire. After a period of several years during which it had not been worked, the operators put oil waste on the site in lagoons. That turned out to be most unsatisfactory. The site had been laid waste for about 15 years and although subject to enforcement action, that has still not been satisfactorily restored at all. In the end, the local authority will have to pick up the tab for making that land suitable for recreational and other needs.
There is another site at Hilton Moor, a licensed opencast site in Durham, which is about 19 hectares. Permission was given by the Secretary of State for the Environment in February 1986 following a public inquiry. That permission was subject to conditions requiring a cessation of extraction no later than 21 months after the work had begun and the restoration of the site in accordance with the scheme which was agreed by the county council. In January 1988 work ceased. The county council was advised that the site operator was no longer in possession of that site, it having been taken into receivership. As a result, the site has remained unrestored in breach of the planning condition with all the implications for the environment in that particular area. The county council took enforcement action towards the end of 1988 but the area has still not been satisfactorily restored.
A further example is the Hill Top opencast site in East Stanley in Durham. There permission was also given following a successful appeal by the developer and subject to conditions which included restoration of the site. The development of the site started in 1981 and was expected to be completed in some three or four years. However, by July 1986 the development had still not been completed and the site remains only partially restored. Enforcement action was taken in the summer of 1986 and although the site has now been restored there was a period of
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18 months when the site, which is very close to houses with a lot of young children, remained an environmental eyesore and a real hazard to the children in the area. It was only after very lengthy and complex enforcement proceedings that the site was eventually restored.
Those are some unsatisfactory examples which we find in the privately licensed opencast sites. I also have compehensive details of a site near Consett in County Durham. It would take me too long to give the Committee the history of that matter. The county council made efforts to get proper reinstatement and faced many problems regarding enforcement notices. Work on the site ended in 1986 and the restoration is still not complete.
I accept that with the greater tonnage proposed, some of the larger operators who at present work on a contract site for British Coal will probably be interested in applying for the larger sites. Because they have been used to meeting British Coal's standards, they will probably achieve a higher environmental standard. However, I still believe that that duty should be written into the Bill to cover all licensed operators.
6 p.m.
Viscount Hanworth: From these Benches, we strongly support this amendment. I shall not waste the time of the Committee by repeating examples given by the noble Baroness, Lady Stedman, because quite clearly she has far greater knowledge of the matter than I.
Lord Renton: There is one technical point which I should mention. At the end of the second line of the amendment the word "Board" should be replaced by the word "Corporation". That is a very small point which can easily be dealt with by a manuscript amendment if the new clause is acceptable to the Committee. I hope that it will be acceptable to the Committee and especially to my noble friend on the Front Bench.
Let us concede at once—and it is evidence that what is best is possible—that in some cases there have been wonderful restorations of land following opencast coal mining. However, there have been too many exceptions, as has been stated. Here we are faced with the fact that on the wording of this Bill, as my noble friend Lord Norrie pointed out, no area which is smaller than St. James' Park will be affected by the supposedly stringent provisions which would guarantee restoration after opencast mining.
My noble friend Lord Ullswater said on Second Reading:
"We want to see opencasting, which is 30 per cent, cheaper than deep-mined coal, contributing more to our national economy, always consistent with each individual site being acceptable environmentally".
He went on to say:
"That must be demonstrated rigorously through the planning system". [Official Report, 9/2/90; col. 1059.]
I suggest that it is not enough to leave it to the planning system. That is leaving too much to chance—is it not?—because the attitudes of planning authorities vary from place to place and

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indeed, in my experience, within the same planning authority from time to time.
We are then presented with the possibility that things will get even better with environmental impact assessments being undertaken in future before new licences are granted. Of course, an environmental impact assessment is splendid. However, we must assure ourselves that the new licences, whatever conditions they contain, would be effectively enforced. Enforcement is the crux of this matter. Sometimes it is effective; but—alas!—in some notorious cases it is not effective.
The real issue for the Committee, and especially for my noble friend, is whether, in order to gain better enforcement, Parliament should make its will clear. Parliament should show its concern for the safeguarding of the environment in the way described in the new clause or in an equally effective way, however, drafted. This new clause is a valiant attempt by noble friend Lord Norrie to express what I am sure all Members of the Committee have in mind. It would place upon not only the licensee but also on the corporation the responsibility of seeing that the proposal has been formulated with regard to the desirability of preserving natural beauty and so on. Those words in the new clause are to be found in the Electricity Act 1957 and are repeated in only slightly different form in the Electricity Act 1989. I suggest that what is good for electricity should also be good for coal.
One could go on and emphasise this still further. I hope however that I have said enough to show that what my noble friend proposed with the support of the noble Baroness, Lady Stedman—and we hope for support elsewhere in the Chamber—will alert the Government to the need for strengthening the law and making clear the will of Parliament.
Baroness David: My name is to this amendment and I should like to add my support to the case which has been so ably made by the other four speakers. There is support all around the Chamber and I will not understand if the Government do not support the amendment also. I hoped that the noble Viscount would already have jumped to his feet and said "We agree with this" because there are precedents. There is the amenity duty which was put into Schedule 8 to the Housing and Planning Act 1986. Precedents have also been set in the Electricity Act 1989.
I certainly agree with the noble Lord, Lord Renton, that it is not enough to leave it to planning. We must have this covered by legislation to ensure that the environment is properly looked after, bearing in mind what could happen under this Bill. I therefore strongly support Lord Nome's amendment.
Lord Forester: I have listened with great interest to this debate and read the amendment very carefully. I am the first to agree that stringent environmental safeguards are a must and to that extent I agree with my noble friend Lord Norrie. However, surely the responsibility for safeguarding the environment rests with the Secretary of State for the Environment
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through the town and country planning legislation. As we have heard, planning permission is required for all mining. Those regulations have recently been tightened up and the environmental impact assessments, of which we have heard a certain amount, have been brought in. However, they are extremely new.
I have had two experiences with environmental impact assessments and they are extremely detailed. I venture to suggest that everybody is not fully aware of them. They involve groups of almost all environments and very wide consultations. They cover the majority of points in the amendment. I simply feel that this is a planning matter and should be dealt with as a planning matter.
Foolishly, when the planning guidelines were drawn up, areas less than 50 hectares were not automatically included; without doubt they should be included, virtually down to zero. That was an error, but surely it is a planning matter. If we are to listen to my noble friend Lord Renton and if we are to handle the whole thing through the Coal Board, will we not need planning for those applications in the future? I feel that we want one process and one process only. If all these things are dealt with under planning law, surely once they have been dealt with it will be sufficient; we shall not need to go through all the grounds again. I suggest that this is a planning matter and as such I must vote against it.
Lord Renton: Perhaps my noble friend will allow me to say—I am grateful to him for giving way—that under present law it is already a planning matter. It is also the responsibility of the British Coal Corporation. Both those considerations will remain, but the purpose of the new clause is to to show both the planning authorities and the corporation that Parliament really does expect enforcement.
Lord Forester: I feel that we should strengthen the planning laws. That is what I am saying. I am the first to agree that we want controls, but it is surely a matter for the Department of the Environment and planners to handle. Yes, I agree that there are items which must be put right.
The Earl of Erroll: If I may say so very quickly, I have very little faith in the planning laws. I live on the edge of an AONB and we have been trying to resist a scrap heap, a large commercial scrap yard, opening up there. We have been told that we are not allowed to resist it on the grounds that it is an eyesore for the community or the countryside; we can only resist it on the grounds of traffic and that it might be dangerous to traffic. I do not see the point of AONBs and SSSIs as ordinary local people do not appear to be able to bring them to the attention of the planning authorities and thereby resist developments. They are taken to appeal again and again.
The latest thing is that we are supposed to find £3,500 among a few households to employ a lawyer or we will not be thought to be serious when the case is heard. At a previous meeting we were suddenly told that we were not allowed to say this, that or the

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other or that people were not allowed to speak. The whole planning process, from the point of view of someone who has seen it from the other side, leaves a hell of a lot to be desired, to put it mildly. It seems to be impossible to resist these large organisations. All that happens is that they go to appeal; they ride roughshod over everyone and find regulations whereby all the points that we are told will be taken into consideration are not taken into consideration. I very much doubt that planning law is strong enough.
6.15 p.m.
Lord Nathan: Perhaps I may support the point made by the noble Lord, Lord Renton, relating to the incorporaton of such a provision consistently with the provisions of the Electricity Bill as long ago as 1957, as he mentioned. The current approach to these problems surely is that environmental consideration should be integrated into all activities, particularly into those having significant effect on the environment, of which coal mining is one.
It seems to me that it is the obligation of those concerned in such activities to carry out their environmental obligations, albeit that does not deny that the planning authorities should maintain the powers that they have. I suggest it is the obligation of the electricity authorities under the 1957 Act and the recent Act, and the obligation of the corporation under the present Bill, to take the appropriate steps and not leave the matter entirely within the planning field.
Viscount Ullswater: This amendment on environmental responsibilities tabled by my noble friends Lord Norrie and Lord Renton, the noble Baronesses, Lady David and Lady Stedman, and, indeed, the other amendment tabled by the noble Lords, Lord Graham of Edmonton and Lord Williams of Elvel, which we will be discussing later this evening, are important ones and we have considered them carefully.
I have a great deal of sympathy for the general sentiment that lies behind the amendments. Environmental expectations are rising and mining operations must have regard to this. Some of the arrangements for opencast workings and restoration which took place in the 1970s and 1980s would not be acceptable today. There is no dispute that the environmental standards of mine operators need to be higher today than ever before. The issue is how we achieve the right balance between the need for the coal and the environmental considerations, and how we ensure that the environmental standards are applied in a fair and effective way.
I must emphasise that there is very little difference between the basic objectives of the Government and the views expressed on all sides of the Chamber this evening. The difference is how best these aims of higher environmental standards can be carried forward.
I recognise that Paragraph 1 of Schedule 8 to the Housing and Planning Act 1986 imposed an amenity duty upon British Coal's opencast operations. It was felt by the Government at the time that this duty was superseded by implementation of the
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recommendations of the commission on energy and the environment that opencast proposals should be brought within the planning system. However, the Government accepted the strong views expressed in this House—I think most notably by Baroness Nicol—that a statutory amenity duty should continue to rest on British Coal as an opencast operator. Indeed, the Government went further. The mineral planning guidelines, published in 1988 and already referred to, (MPG3) drew attention to the amenity duty on British Coal's opencast operations and went on to say:
"it expected that private operators would wish to have regard to similar considerations".
I am aware of the report prepared by the County Planning Officers Society in 1984 which reviewed instances where planning conditions imposed on licensed operations were not being observed. Two of the instances cited by the noble Baroness, Lady Stedman, would have dated from that time; that is, they were in excess of six years old. This report was based on data from 1981 to 1984 which predated the planning guidance issued to mineral planning authorities in 1984 under Circular 3/84.
Where environmental failures take place it is usually because either the planning consideration is not detailed enough or because the conditions laid down in the planning permission are not adequately enforced. On the planning side, since 1984 the Government have greatly expanded and tightened up the earlier planning guidance offered to mineral planning authorities. The opencast operators tell me—and I believe them—that MPG3 imposes on them a tougher planning regime than anywhere else in the world. Since 1988, as I indicated on Second Reading, the Government have gone further and require applicants for planning permission on opencast sites above 50 hectares to prepare a full environmental impact assessment in support of a planning application which examines all aspects of how the proposed workings will affect the environment. This will be mandatory for virtually all the larger licensed sites allowed under this Bill. The mineral planning authority has discretion to require an EIA in respect of any smaller site where there are likely to be particular environmental sensitivities.
If there are failings I do not believe that they lie in the planning permission or in the planning guidance but in the enforcement of those conditions. That is a matter that is not touched by this amendment; nor indeed is it touched by the amenity duty imposed on the British Coal Opencast Executive under Schedule 8 to the Housing and Planning Act 1986.
The amendment also extends to licensed deep mines. Having taken a helicopter trip over the East Midlands coalfields last week, I accept that deep mining can be just as much an eyesore as opencast operations, not least because of the much greater life of deep-mined operations. However, on fairness grounds I do not believe it to be reasonable to extend to licensed deep mines, which account for only 1 per cent, of total deep-mined output, a statutory requirement which does not apply to the 99 per

563
cent, of deep-mined output produced by British Coal itself.
Moreover, it seems particularly unreasonable because all licensed deep-mined operations have had to obtain planning permission whereas British Coal deep mines which predate July 1948 are covered by a general development order. In any event, I believe that a great deal more consultation would be necessary before any amenity duty were to be imposed on deep mining. That cannot be accomplished within the very tight time-scale available for the passage of this Bill.
I accept, and I believe that British Coal accepts, that the time has come when British Coal's environmental responsibilities right across its activities—not just opencast mining—need to be reviewed and its policy codified. A voluntary but published code of practice rather than legislation seems to be the right way to proceed, given the rapid pace of change in mining technology and techniques. This approach will allow a more detailed code to be formulated and kept up to date. I understand that British Coal will be consulting bodies with an environmental interest and I very much hope that that will lead to a constructive way forward. In the meantime, we will continue to press British Coal to accept environmental liabilities that properly belong to it.
I am pleased to be able to tell the Committee that British Coal has recently agreed to accept liability for restoring the sites of deep mines closing over the next four years up to privatisation. This is an appropriate extension of the polluter pays principle and it will cost British Coal around £25 million, with a corresponding reduction in derelict land grant.
The Government believe that a voluntary approach is the most effective way forward. I have indicated one difficulty we have with this amendment—that it imposes on licensed deep mines a duty that does not extend to British Coal's deep mines. However, our basic objection to this amendment is that it puts the obligation on British Coal as licensor to satisfy itself as to whether the licensee has had adequate regard to the environmental implications of his operation. We do not think that is an effective way to secure environmental standards. In fact, it could be counter-productive. We believe a clear distinction has to be drawn between the licensing regime and the planning regime.
British Coal has clear statutory functions as licensor to develop the coal industry in the national interest. The planning system bears the responsibility of environmental protection. This amendment blurs this clear division of responsibilities and in my view weakens the functioning of both the licensing and the planning systems as a result. For example, we have an arrangement at the moment where British Coal has publicly committed itself not to issue a licence unless the licensee has planning permission. If British Coal were required to satisfy itself independently of the planning permission that the licensee's operations were environmentally sound, what would happen if
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it concluded that planning permission had been unsoundly given or required environmental conditions which were in conflict with the conditions laid down by the mineral planning authority or by the Secretary of State for the Environment? I believe the amendment will tend to produce muddle and delay. The reassurance that the supporters of the amendment are looking for rests, I believe, in British Coal's commitment that it will accept an application for a licence only when an appropriate planning permission has been obtained.
Perhaps I may deal with two questions that were put to me. My noble friend Lord Norrie stressed the need for early consultation on environmental aspects; that is, before an environmental impact assessment. The planning system was tightened in MPG3, as I said, to stress the importance of prior consultations between developer and planning authority. Paragraph 10 also requires consideration of whether it would be better to work an alternative site on environmental grounds. Therefore, I do not fully accept that there is no requirement for the early consultation that my noble friend seeks.
My noble friend Lord Renton suggested that local planning authorities were perhaps in some way not the right people to look after environmental aspects on a nation-wide basis. I have to disagree with my noble friend. It is local conditions that local government should consider before making decisions. Local authorities are probably best placed to take the detailed decisions that are required before giving planning permission.
I have spoken for a number of minutes on this amendment. That is perhaps an indication of how seriously the Government take it. However, I hope that in view of what I have said and the very tight timetable which this Bill requires my noble friend will seek leave to withdraw his amendment.
Lord Renton: Before my noble friend Lord Norrie decides, perhaps my noble friend Lord Ullswater will be kind enough to consider two matters. First, there is nothing in the amendment which excludes the planning procedure. I agree that there must be a planning procedure as there has been for quite a long time. The Minister has not dealt with the point raised by my noble friend, which is a very important one; namely, that it is only if an area is as large as St. James's Park or larger that the proposals in Clause 4 of the Bill would bite at all. That cannot be a satisfactory situation.
Viscount Ullswater: I shall deal with the last point first. All mining, whether opencast or deep-mining, requires planning permission and, however large or small the site, that planning permission is under the guidance of the Mineral Planning Authority Guidance, the MPG3, which I have mentioned. As regards the other point which my noble friend Lord Renton raised, I tried to stress in my remarks the fact that the Government consider British Coal, as the licensor, has a different function to play in this whole matter from that of the planning authority. I sought to stress that, in agreement with my noble friend Lord Forester, the planning authority is the right body to give planning permission and that

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British Coal is the right organisation to give the licence.
Lord Norrie: We have had a very interesting debate. I am still disappointed by the noble Viscount's response, particularly as my amendment has been very widely supported on all sides of the Committee. I am particularly disappointed by the Government's continual reliance on the planning system and the process of parliamentary assessment alone to address the very real environmental concern raised by coal extraction. As I emphasised in my speech, under the present arrangements these come into the process far too late to play the vital role which I envisage for the environmental duty.
The noble Baroness, Lady Stedman, also raised some very important points on behalf of the local authorities involved which, after all, deal with these applications day after day. The Government believe that we can rely on the existing planning and EIA procedures and by hoping that the private sector will voluntarily adopt strict environmental responsibilities. Almost every other speaker in this debate shared my concern that these issues are too important to be left to chance, and that we need environmental duties to apply from the very earliest stages of thinking about future coal extraction operations to complement planning and EIA procedures.
The precedents set by the Electricity Act 1989 and the Housing and Planning Act 1986 are ones which we should follow and not ignore. I should say a word about deep mines. I acknowledged in my speech that I was breaking precedent for what I believe were very good reasons. If my amendment were to be accepted by the Committee, I should be happy to discuss with the Government any difficulties that they have with that part of my amendment which could be resolved, if necessary, at Report stage.
I believe that extending the environmental responsibilities of BCC to the private sector is essential if, as this Bill intends, we give a greater role to the private sector in coal extraction. I also believe that this duty would be non-controversial so far as the remaining passage of this Bill: indeed, it might help its progress. The Department of Energy has to convince the public and the rest of the Government that it is taking its environmental responsibilities seriously. It took a great step forward in accepting new environmental duties in connection with last year's Electricity Act. The department should not let its image be tarnished by resisting the same improvements to this Bill.
We are facing an issue of principle here. We have reached an impasse which can only be resolved by asking the Committee to decide on the future of this amendment.
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): Before I put the Question I inform the Committee that the noble Lord, Lord Renton, has notified his wish to move a manuscript amendment.
Lord Renton Lord Renton moved, as an amendment to Amendment No. 15, a manuscript amendment:
Line 2, change the word "Board" for "Corporation".
The noble Lord said: As regards Amendment No. 15 and the new clause as printed, the word "Board" in the second line should be changed to "Corporation". I beg to move.
On Question, amendment agreed to.
6.35 p.m.
On Question, Whether the said amendment (No. 15) shall be agreed to?
Their Lordships divided: Contents, 80; Not-Contents, 64.

DIVISION NO. 1

CONTENTS

Addington, L.

Jeger, B.

Airedale, L.

Jenkins of Hillhead, L.

Ardwick, L.

Jenkins of Putney, L.

Aylestone, L.

John-Mackie, L.

Barnett, L.

Kilbracken, L.

Blackstone, B.

Kinloss, Ly.

Blease, L.

Listowel, E.

Blyth, L.

Lockkwood, B.

Bonham-Carter, L.

Longford, E.

Bottomley, L.

Lovell-Davis, L.

Bruce of Donington, L.

McCarthy, L.

Carmichael of Kelvingrove, L.

McGregor of Durris, L.

Mcintosh of Haringey, L.

Carter, L.

Mackie of Benshie, L.

Cledwyn of Penrhos, L.

Mais, L.

Cocks of Hartcliffe, L.

Mayhew, L.

Craigavon, V.

Meston, L.

David, B.

Monkswell, L.

Dean of Beswick, L.

Murray of Epping Forest, L.

Donaldson of Kingsbridge, L.

Nathan, L.

Dormand of Easington, L.

Newall, L.

Elliot of Harwood, B.

Nicol, B.

Erroll, E.

Norrie, L. [Teller.]

Ewart-Biggs, B.

Ogmore, L.

Falkender, B.

Peston, L.

Falkland, V.

Pitt of Hampstead, L.

Gallacher, L.

Ponsonby of Shulbrede, L.

Galpern, L.

Renton, L.

Gladwyn, L.

Seear, B.

Glenamara, L.

Seebohm, L.

Graham of Edmonton, L. [Teller.]

Stedman, B.

Stewart of Fulham, L.

Greenway, L.

Stoddart of Swindon, L.

Hacking, L.

Taylor of Gryfe, L.

Halsbury, E.

Tonypandy, V.

Hanworth, V.

Tordoff, L.

Harris of Greenwich, L.

Turner of Camden, B.

Houghton of Sowerby, L.

Underhill, L.

Hutchinson of Lullington, L.

Wedderburn of Charlton, L.

Hylton-Foster, B.

Williams of Elvel, L.

Jay, L.

Winterbottom, L.

NOT-CONTENTS

Ampthill, L.

Caithness, E.

Arran, E.

Campbell of Alloway, L.

Auckland, L.

Carnock, L.

Belstead, L.

Colwyn, L.

Bessborough, E.

Constantine of Stanmore, L.

Blake, L.

Craigmyle, L.

Blatch, B.

Crickhowell, L.

Boardman, L.

Cullen of Ashbourne, L.

Borthwick, L.

Davidson, V. [Teller.]

Boyd-Carpenter, L.

Denham, L.

Brabazon of Tara, L.

Elles, B.

Brougham and Vaux, L.

Elliott of Morpeth, L.

Butterworth, L.

Ferrers, E.

567

Forester, L.

Murton of Lindisfarne, L.

Fraser of Carmyllie, L.

Napier and Ettrick, L.

Geddes, L.

Nelson, E.

Gisborough, L.

Orkney, E.

Glenarthur, L.

Pender, L.

Hanson, L.

Peyton of Yeovil, L.

Harmar-Nicholls, L.

Platt of Writtle, B.

Hayter, L.

Reay, L.

Henley, L.

Rockley, L.

Hesketh, L.

Stodart of Leaston, L.

Hooper, B.

Strathclyde, L.

Howie of Troon, L.

Strathmore and Kinghorne, E.

Jenkin of Roding, L.

Johnston of Rockport, L.

Sudeley, L.

Killearn, L.

Thomas of Gwydir, L.

Long, V. [Teller.]

Tranmire, L.

Lucas of Chilworth, L.

Trumpington, B.

Margadale, L.

Ullswater, V.

Marshall of Leeds, L.

Wise, L.

Merrivale, L.

Resolved in the affirmative, and amendment agreed to accordingly.
6.43 p.m.
[Amendments Nos. 16 and 17 not moved.]
Remaining clause agreed to.
House resumed: Bill reported with an amendment.

Associated British Ports (No. 2) Bill
6.45 p.m.
Lord Geddes: My Lords, I beg to move that the Bill be now read a second time.
This Bill is promoted by Associated British Ports, Britain's largest port authority. The preamble to the Bill explains that under the Transport Act 1981 the former British Transport Docks Board, a nationalised undertaking, was privatised and became Associated British Ports, known collectively as ABP for short, whose holding company, Associated British Ports Holdings, ABPH, was successfully floated on to the stock market in 1983 with many of its employees becoming shareholders. Since 1983 the turnover and profitability of the group, including ABP, have increased significantly. It has achieved the highest growth in share price and market valuation of all the previously state owned enterprises now in the private sector. Investment in the proposed developments sought in this Bill will not involve any recourse to public funds.
While ABP is wholly in the private sector, it must also be remembered that it remains a statutory harbour undertaking, with a duty under Section 9 of the Transport Act 1981 to provide port facilities to such extent as it may think expedient. It is in keeping with Parliament's wishes, as enacted in that Act, that Associated British Ports has promoted the Bill. The Bill seeks to develop and improve facilities at three of its ports; at Immingham on Humberside, at King's Lynn in Norfolk and at Port Talbot in South Wales.
I shall now turn to the provisions of the Bill. Part I is formal and is in well precedented terms. It deals with definitions, and it incorporates, with modifications to suit local conditions, provisions found in Public Acts which are usually applied by
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Private Acts. Part II seeks to empower ABP compulsorily to acquire land or rights in land for the purpose of constructing the proposed works mentioned in Part III of the Bill. Part III contains one of the most fundamental objectives of the Bill. Associated British Ports wishes to construct port facilities which are needed to cater for larger, and hence more cost-effective vessels, which are becoming more common and for which ABP must make provision if it, and indeed the United Kingdom, are to remain competitive. Because the proposed works are to be constructed in tidal waters, Parliament's consent is needed.
Clause 8 sets out the proposed works. Works Nos. 1,2 and 3 are intended to create a new facility for dry bulk cargo in the River Humber near Immingham. Work No. 1 comprises a jetty and a jetty head; Work No. 2 comprises a secondary jetty designed to give additional access to the jetty head. Work No. 3 consists of a reclamation landwards to the jetty head to provide additional back-up land. The port of Immingham is one of the busiest and most successful in the country, currently handling about 35 million tonnes of traffic annually. This volume of traffic leads to congestion in the enclosed dock system and many of the cargos could be more efficiently handled at the proposed jetty. Without the constraint of lock gates, larger ships could be employed to carry the dry bulk cargo presently handled in the enclosed dock, thus relieving the congestion. It would also result in more space in the enclosed dock for those cargos which can only be handled suitably in such a dock. At the same time, it will mean the provision of considerable bulk facilities in the River Humber for larger vessels. This new facility would also mean that expensive transhipment at continental ports would no longer be necessary, as larger vessels could sail from foreign destinations direct to the new jetty terminal in the Humber.
Work No. 4 consists of a proposed quay intended to provide berths for vessels in the River Great Ouse at King's Lynn. King's Lynn, although small, is a very busy port handling primarily grain and other agricultural exports as well as timber and steel imports. The new berths will enable larger ships to call at the port as at present all the available facilities for cargo handling are located in the enclosed docks and the size of vessel is limited by the entrance lock.
The remaining clauses in this part of the Bill, Clauses 9 to 14, contain matters ancillary to the main works. Clause 9 deals with dredging in the Rivers Humber and Great Ouse. Clauses 10 to 13 in effect bring the proposed works within the undertaking of ABP for such matters as the application of by-laws and the powers of marine officials to give directions aimed at ensuring the safety of shipping. Clause 14 is a standard provision found in APB's Private Acts and incorporates, without the need to set them out in full, provisions which may be summed up as regulating the conduct of APB in carrying out and maintaining the works set out in the Bill.
Clause 15 sets out various definitions relating to Port Talbot and Clause 16 extends the geographical limits of the harbour. Port Talbot tidal harbour is a specialised facility which was constructed to allow

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the British Steel Corporation to bring in essential raw materials at a suitable deep water harbour, convenienty placed for the steelworks at Margam and Llanwern. The intention is to deepen and lengthen the dredged channel forming the approach to the tidal harbour, so that BSC may use larger vessels. It is planned that, with the improved channel, Port Talbot will be able to handle vessels carrying up to 150,000 tonnes of cargo instead of the present limit of 100,000 tonnes. That will obviously benefit the British Steel Corporation significantly.
Part V of the Bill contains a standard protective provision for the Crown. Part VI contains Clause 18 which places a time limit of 10 years on the deemed planning permissions enjoyed by works authorised by Act of Parliament; and Clause 19 which requires ABP to pay all expenses of the promotion of the Bill and to pay them out of revenue. These clauses are standard provisions.
Having described the contents of the Bill, albeit in a very truncated form, I suggest that it is relevant to give a brief summary of the Bill's progress since it was deposited in Parliament on 27th November 1987. Petitions were deposited against the Bill which sought to defeat it on the grounds that the proposed works at Immingham would enable foreign coal to be imported to the detriment of the coal industry in this country. Not all of those petitions were settled. The Bill was therefore ordered to be examined by a Select Committee in another place. The Bill did not reach that Committee stage until the autumn of 1988.
The Select Committee in another place spent several months in considering the Bill together with another Bill, which was not promoted by ABP, concerning port facilities in the Humber. The result of the committee's deliberations was that the ABP (No. 2) Bill was allowed to proceed without amendment, although the committee asked for and received an undertaking from ABP that once the new facilities at Immingham were in place, ABP would provide another place and the Government with detailed information about steam coal imports.
The Select Committee also produced a special report in which it expressed its concern about the possible impact on the British coal mining industry if there were to be substantial coal imports. However, the committee accepted that this was a matter which would have to be decided by government and Parliament as part of a general energy policy, and that the ABP (No. 2) Bill should not be amended or rejected as a means of protecting the British coal mining industry. The Bill finally achieved its Third Reading in another place on 10th January of this year.
Ten petitions against the Bill have been deposited in your Lordships' House by what I loosely refer to as the "coal lobby", including the British Coal Corporation and the mining unions. In general, those petitions seek to defeat the Bill. ABP's position on these petitions, which are similar to those rejected in another place, is that they are totally unacceptable because they would represent discrimination in favour of a particular group and against the interests of other potential customers. Such discrimination would, in ABP's view, be totally contrary both to
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the letter and to the spirit of the legislation under which ABP conducts its business as the United Kingdom's largest ports authority.
At this stage perhaps I may say how much I, and I am sure, all Members of the House, look forward to the maiden speech of my noble friend Lord Rockley which will I am sure, demonstrate the considerable breadth of his knowledge on both investment and trade.
Regarding the case for the Bill, I do not think that I can do better at this stage than to quote from the decisions of the Select Committee of another place:
"The Committee first considered those parts of the Bill which relate to the promoters' ports at King's Lynn and Port Talbot. We noted that none of the petitioners presented any evidence in opposition to these provisions, and that it appears to be generally agreed that the provisions are uncontentious and beneficial.
We therefore unanimously resolved, That so much of the Preamble as relates to the construction of works and the extension of jurisdiction at the promoters' docks at King's Lynn in Norfolk, and to the extension of the limits of the promoters' harbour, and its approaches, at Port Talbot in West Glamorgan, is agreed to".
So far as concerned Immingham, the Select Committee agreed with counsel for the promoters when he said:
"Had it not been for the 'coal issue', the principle of the ABP Bill would almost certainly not have been contested".
The committee went on to find that the request by the promoters to extend the facilities at Immingham was, in itself, a reasonable one. In particular, it would enable Immingham to compete specifically with Amsterdam, Rotterdam and Antwerp. The issue, therefore, is whether Parliament should allow the British coal industry to stop a private enterprise company from investing in the expansion of its business in order to preserve British Coal's monopoly in the supply of coal to the electricity generating industry. I do not believe that it should do so.
Britain needs the best and most efficient ports industry that we can create, so that British exporters and importers can enjoy the most efficient transport of their goods in the interests of the country as a whole. The proposals in the Associated British Ports (No. 2) Bill will benefit Associated British Ports but, more significantly, it will also bring substantial benefits to the United Kingdom as a whole. For those reasons I ask your Lordships to give the Bill a Second Reading so that it may be considered in further detail in Committee.
Moved, That the Bill be now read a second time.—(Lord Geddes.)
6.57 p.m.
Lord Dormand of Easington: My Lords, I am completely opposed to the Bill because of the effect it will have on the British coal industry and, as a result, on the national economy. Nothing that the noble Lord, Lord Geddes, said allays any of the fears that I have in this respect, although I must pay tribute to the fact that he referred to the Select Committee. He gave one or two quotations from the report and I hope that your Lordships will bear with me if I put forward, later in my speech, other quotations from the same committee which I think have even greater strength.

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During its passage through another place, supporters of the Bill said that the measure was not simply concerned with the import of coal. In its literal sense that is probably true. However, there is no doubting the fact that much more coal than any other material will be brought in. Parliament is not a school debating society: it is an institution which has the experience and expertise to know what is likely to happen in any particular situation. Anyone in this debate who disputes that coal imports will increase by vast amounts is politically naive, to put it at its mildest.
Three assessments of the effect of the Bill which I have read estimate that imports of coal through the Humber terminal would be from 10 million tonnes to 11 million tonnes by the mid-1990s. That level of imports would close either 12 or 13 pits with something like 8,000 to 10,000 miners losing their jobs. The North-East coalfield where I have lived for most of my life, would be drastically affected. I am not concerned with what might be referred to as a parochial issue; I am concerned with the whole of our country's coal industry.
The seriously flawed argument used by supporters of the Bill is that if other countries produce coal more efficiently, we should be allowed to take advantage of that fact, as the noble Lord stated. That is probably why our dogma-ridden Prime Minister took the time to vote for the Bill in another place.
The weakness of the argument is that most of the foreign coal which is now imported is produced by cheap labour in Colombia or South Africa, or it is heavily subsidised. Some of it is mixed, for example in Rotterdam and Ghent, and it is impossible to ascertain the source and cost of production. This country should consider the nature of the sources of coal. Do we wish indirectly to support the use of child labour in mines in Colombia, the apartheid system in South Africa and the regime in China which has not regretted in any way the slaughter on Tiananmen Square? Some of us feel very strongly about such matters. It is to the shame of the Government that such matters have not been recognised by them in allowing imports that are sponsored by such régimes.
Such unfair competition must be set against two aspects of the production of British coal. Firstly, there has been a great increase in the efficiency of the industry since 1985. Given similar circumstances, I do not think that there is a more efficient coal industry in the world. Secondly, this improvement has been brought about by a huge loss of jobs, which in turn has devastated scores of mining communities. I speak from direct experience. I remind your Lordships of the multiplier effect in the coal industry, which all economists agree is a factor of two.
If pits continue to close and if imports of the kind that I have mentioned continue to increase—and they will if this and similar Bills go through Parliament—the point will arrive when the exporters of coal to this country will be able to increase prices simply because our own industry will be unable to provide the required amount of coal. That is a real
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danger. If that is the case, one important factor must be remembered. Once a pit has closed, it cannot be re-opened. It is not like a factory or similar building. Once it is closed, that is the end of it. There is no going back.
I should have thought that the Government's biggest embarrassment among their many present embarrassments is the massive balance of payments deficit of £20 billion. They frequently refer to the ways in which they have made our coal industry so efficient. So why should they add to the balance of payments problem by encouraging an increase in the deficit? The Coal Communities Campaign states that at £39 to £43 per tonne in 1995 the throughtput of ABP's terminal would directly add £400 million to Britain's trade deficit.
Given the efficiency of our coal industry, I believe that there is an overwhelming argument to be taken into consideration when dealing with the issue before us. That is the importance of the security of supply, having regard to the fact that according to the geologists we have 200 to 300 years of coal deposits at the present rate of extraction. There can be few countries which do not envy our luck at having such reserves.
No one on this side of the House is arguing for continuing with a heavily subsidised coal industry to ensure a virtually permanent supply of coal. We are arguing for security of supply at the cheapest price, given the circumstances prevalent in our country.
Over the years miners have made huge sacrifices, not least the loss of 100,000 jobs in the last five years. That is a factor which must be taken into consideration. The miners will play their part in securing the supply of coal to meet the country's needs provided that the competition that they have to face is fair and just. That is an important proviso.
I wonder how much importance promoters of the Bill place on the problems caused by transport of coal from port to destination. Those of your Lordships who have not had the experience of meeting aggrieved people who live in the line of transport may ponder Shakespeare's words, if I am permitted to change them slightly,
"Hell hath not fury like a woman whose house is passed by 50 coal lorries every day".
That experience of mine in another place is seared into my soul.
A great deal of hypocrisy is associated with the Bill, not least the pretence that the Government are neutral on the matter. No Minister has voted against it, although a number of Tory Back-Benchers, very much to their credit, have done so.
The Tory-dominated Private Bill Committee in another place had considerable doubts about the Bill. The noble Lord, Lord Geddes, did not mention that it took the casting vote of the chairman to ensure the progress of the Bill. The words of the committee were clear and unequivocal:
"We agreed that the issues raised before us were sufficiently important that they justified making this special report to the House, to draw the attention of the House and the Government to what we believe would be the potentially disastrous effects of large-scale coal imports".

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The next sentence is printed in heavy type:
"In our view it is the Government's duty to take whatever steps are necessary in the overall national interest to protect the indigenous coal-mining industry".
The committee went so far as to say:
"The decisions on energy and trade policy we have been invited to take are, in our opinion, national decisions which are the ultimate responsibility of the national government".
The word "national" is used twice in one sentence. It is an indication that the committee believed that a committee of that kind is entirely inappropriate for such a measure.
The Bill may well end up on the statute book. If so, it will be yet one more example of private profit being placed above the need to ensure the national good.
Lord Rockley: My Lords, I am grateful for this first opportunity to speak in your Lordships' House. It is with considerable diffidence that I stand before your Lordships this evening to speak to a Bill which, for all of its unassuming name, has vital connotations for the future economic strength of our country.
I must declare an interest in that I am a director of Kleinwort Benson which has acted as merchant banker to Associated British Ports Holdings since it was first floated on The Stock Exchange. I was personally involved in the initial offering of shares to the somewhat sceptical British public. It has been heartening for me to watch the progress of that company since that time, and hence its ability to invest now in port expansion projects.
I wish to address only one relatively basic point this evening. It is a truism, but nevertheless a truth, that Great Britain has lived by trade. Despite the growth of the great economies of this world in the United States, Germany and Japan, Britain is still a major international trading nation. It is important that we remain so and it is hoped improve. Historically, our exports and imports have been moved by sea. This remains substantially the case today and it will do so even after the Channel Tunnel is completed.
To maintain our position in international trade, we must have really efficient and up-to-date port facilities. A great deal has been done in recent years in this respect, as is witnessed by the successful development and growth of ports such as Felixstowe and Dover. However, they are basically container ports or ferry ports and much of our trade cannot be carried by container. This trade needs the best facilities as well.
In these types of trade, essential raw materials for our manufacturing industry, we are faced with competition from the great European ports: Antwerp, Hamburg and Rotterdam. With the single market in 1992 we can only expect that the competition from that area will increase. By way of example, the publication the Economist last autumn carried an advertisement which appeared to be aimed at the British market. The tenor of that advertisement is encapsulated in the first paragraph of the text:
"Distribute via Rotterdam, it may offer you important savings on your logistical costs compared with shipping directly via the nearest port. It offers you Europe's most sophisticated cargo
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handling and distribution network and it puts you in control again".
The unfortunate and uncomfortable fact is that in the past British ports have lost out to their continental rivals for much of the trade that is destined for or originates from the UK. Many of our exports have been trans-shipped in continental ports because the UK lacks the very large deep water facilities which are essential to handle the deep draft bulk carriers. For example, the UK accounts for some two-thirds of the business of the largest animal feed handling company in Rotterdam. Ores and fertilisers come into the country via continental ports. Grain exports have to be trans-shipped. Varying circumstances will affect many aspects and quotations of cost, but in the simplest version of a single voyage rate Lloyd's Shipping Economist last month quoted a factor of four to five times as the relative costs of freight charges between a 25,000-tonne vessel and 120,000-tonne vessel. This factor decreased with the increased capacity.
Arithmetically this could produce savings in sea freight of up to £15 a tonne. I should not like to be precise on that figure, but whatever the amount the trend of costs in the ability of larger vessels to discharge directly at UK ports is clear. In order to obtain the full cost savings, however, substantial amounts of money will have to be spent on developing bigger and better ports. That is why I believe that the proposals now brought before your Lordships' House are so important and welcome. The economies of scale are enormous and our industry must be able to compete with its rivals on the best possible terms.
We have heard a certain amount over recent years about the decline of British manufacturing and its relatively lower position in the world—lower than has applied in the past. It is not for me this evening to opine on the extent of the erosion of that competitiveness or its causes. But properly directed investment in the future must be the key. It will be investment not only in the manufacturing industries themselves but investment in the industries that support manufacturing. We have a continuing battle to improve our balance of payments. Our trading efficiency has a major part to play in this battle and it would be foolish not to assume that competition can only increase. Our industry deserves port facilities that can compete with the best.
7.15 p.m.
Lord Jenkin of Roding: My Lords, it is a great privilege to be the Member of your Lordships' House who is able to offer the House's congratulations to the noble Lord, Lord Rockley, on a remarkable and extremely well-informed maiden speech. I saw that the noble Lord succeeded his distinguished father some 14 years ago and I reflected what a pity it was that we have had to wait so long to have the benefit of his advice and wisdom. He has chosen to speak on a Private Bill, but I am sure that having heard him all of your Lordships will recognise that he spoke with immense authority. As another Member who will wish to support the Second Reading of the Bill, I found the arguments that the noble Lord advanced extremely convincing. I shall go so far as

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to say that they will enable me to be somewhat briefer than I would otherwise have been. We look forward to hearing him speak again and hope that we shall not have to wait another 14 years for that.
The main argument against the Bill I find strange. It is not that it is a strange argument, because one is always familiar with the arguments of those who feel threatened and who are looking for protection. But the argument which has been advanced with such force and for so long in another place appears in this Bill—a Bill to promote the improvement of our ports, promoted by a private sector company when it and its predecessors have existed over many years to provide the nation with port facilities. I find that strange however eloquently put. The noble Lord, Lord Dormand, spoke with great feeling and experience of the problems of the coal industry but I find that argument out of place in a Bill which is intended to improve the ports.
Some years ago I took part in the proceedings in another place on the Bill to nationalise the iron and steel industry. The Minister then was the noble Lord, Lord Marsh, to whom I mentioned this matter earlier today. One of the arguments—and it was a difficult argument to resist—that was adopted by those promoting the nationalisation of the industry was that in private sector hands the industry had simply failed to invest sufficiently to remain competitive. It had become unable to compete with its overseas rivals. One of the areas in which it was accused of having failed to invest was port facilities because, it was said, the importation of iron ore into this country had to be undertaken in such small ships that it was impossible to make steel economically and competitively with that high cost raw material base.
These are arguments from 25 years ago. I well remember that it proved quite impossible to rebut that argument. It was perfectly clear that the iron ore imports into this country were coming in in ships a fraction of the size of those which were going into the ports of our competitors. Therefore when the noble Lord, Lord Rockley, quoted the figures for a cost differential of shipping as between a 25,000-tonne ship and a 100,000-tonne or 120,000-tonne ship, I listened. I simply heard the echoes of the arguments we heard 25 years ago in relation to the steel industry. This is an argument with which one is very familiar. As an island race depending on trade, we must be able to conduct our imports and exports in the most economic way possible.
That means an ability to accommodate the largest deep water ships. For many years investment in the port industry was inevitably constrained because of the exigencies of public finance. However, that no longer applies. Associated British Ports is in the private sector. As we have heard from the noble Lord, Lord Geddes, it has prospered remarkably and is now in a position, from its own resources, to invest substantial sums in improving facilities and improving infrastructure—if I may use that word. How often do we hear accusations from the other side of the House that this country has neglected
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spending on its infrastructure? Lo! and behold we have a Bill which will produce substantial new investment in some of the most important infrastructure in this country and yet we find that it is opposed by the other side of the House.
The noble Lord, Lord Dormand, shakes his head, but I listened to his speech very carefully and I wrote down many of the things that he said. He gave me the impression that he was opposing the Bill, or at any rate the part of it which related to Immingham. He is opposing the improvement of the infrastructure of that major Humber port. The noble Lord made it abundantly clear that he was opposing that in order to protect the coal industry. A private Bill of this kind should not be concerned with airing that kind of question. As the Select Committee in another place made clear, there is a perfectly sustainable argument about what the balance of home production of coal and of imports should be. I have always argued that that balance should also include reference to exports of coal. We used to be a major coal exporting country and we could be again. However, as the noble Lord, Lord Geddes, made clear, that is a matter for energy policy.
I find it a strange phenomenon that we are being invited to reject a major part of this infrastructure Bill at the behest of an industry which feels that it is in need of some protection. I have questioned the promoters on this matter, but it is perfectly clear that the importation of coal is most emphatically not the primary purpose of the development of the new deep water port at Immingham.
Some years ago I visited all the Humber ports. I visited Hull, Grimsby and Immingham, and I was impressed with the need for substantial investment if those ports were to compete with ports such as Rotterdam.
Some investment has been made in those ports but much more is needed. It is perfectly clear that those ports will serve a wide variety of purposes regarding both imports and exports. In doing so, they will improve the competitiveness of industry and of our ports. Therefore, it is quite wrong to assume that this measure is aimed at coal imports. However, it would be unrealistic to imagine that there will be no such imports. Nevertheless, those imports will constitute nothing like the volume feared by the noble Lord, Lord Dormand, as British Coal, faced with the competition that imports might offer, will succeed in reducing its prices to the electricity generators so giving the public, both domestic and industrial consumers, the prospect of cheaper electricity than they might otherwise have obtained. The coal will still be mined. The National Coal Board is now sinking some major new pits which will provide economic coal. That is what should happen. However, to stifle the expansion and improvement of a major port like Immingham in order to prevent that happening is the worst kind of luddism. I hope that your Lordships' House will have none of it.
I end by recounting a personal impression. A year or two ago my wife and I took a trip on a container ship. We travelled from Purfleet to Helsinki. After crossing the North Sea, we visited the Europort at Rotterdam. As we sailed up the estuary and went

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past mile after mile of the huge and immensely impressive port facilities that Rotterdam now commands, I was struck and somewhat overwhelmed by the feeling that something had been created there which was going to make life difficult and was already making life difficult for us. As the noble Lord, Lord Rockley, said, we must compete with that. Associated British Ports is now prepared to take the major steps and make the major investments to ensure that we have a chance to do that. It cannot be right that goods going to and from this country to the rest of the world should have to cross the North Sea in one ship and be transferred in the case of imports into smaller ships to cross over to this country. That is the practice that this Bill intends to reduce, and it is hoped avoid.
While one can certainly understand and sympathise with the fears of the coal communities who see the prospects of competition looming, I hope your Lordships will feel that the argument has to be for improved infrastructure, competition, cheaper electricity and not for the bolstering up of an established industry which is perfectly capable of competing with the huge sums of investment that have been put into it in recent years. I support the Bill.
7.26 p.m.
Lord Greenway: My Lords, speaking as I do between two former distinguished and highly knowledgeable Secretaries of State I shall keep my remarks in favour of the Bill as short as possible. I need not comment on the new facilities sought by the Bill at King's Lynn and Port Talbot which appear to me both logical and beneficial extensions. Nor do I question ABP's need for a deep water bulk facility at Immingham. There is at the moment some evidence of an upturn in shipping. That, coupled with an increasing need for the replacement of ageing tonnage worldwide, could well see a return to the larger kind of bulk ships which have not been quite so in vogue recently. Already we can see that happening in the container business where much larger ships are being ordered.
If we are to compete effectively with the large Continental ports such as Amsterdam, Rotterdam, Hamburg and Antwerp we must have suitable facilities to accommodate the larger vessels. Competition is stiff as we have heard from the noble Lord, Lord Rockley, in his excellent maiden speech. I visited these Continental ports quite recently. It seems to me crazy to have to spend extra money in trans-shipment when those larger ships could be brought to our own ports.
What I am not happy about in the Bill is the attitude of the coal industry. I urge the Select Committee which is to examine the Bill not to be bludgeoned by coal's monopolistic muscle, but to look most carefully at the possible future implications for the whole of our port industry if the principle in dispute were to be allowed to become a precedent. As the noble Lord, Lord Geddes, said, our ports have been freed from the shackles of nationalisation and more recently from the dock labour scheme. There is a renewed sense of optimism in our ports. Productivity is increasing all the time
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and new records are being set. That position at the moment is fairly fragile. We have an unenviable reputation to live down abroad regarding our ports. Action such as that sought by the coal industry in this instance is needed by the port industry like a hole in the head.
7.29 p.m.
Lord Crickhowell: My Lords, I start by declaring an interest as a director of Associated British Ports Holdings. Soon after I became a director of that company and soon after the introduction of this Bill—that seems a long time ago now—I paid my first visit to Immingham. At that time I found the existing locked port heavily congested. One of the reasons that influenced the directors in introducing this Bill was the need to get cargo out of that port and into the bulk handling facility where it was more appropriately handled. That left the locked facility for cargo which was more suited for handling there.
Since then we have seen the abolition of the dock labour scheme. It is true that as a consequence the volume of cargo shipped through that facility at Immingham has substantially increased. To that extent the pressure is less than it was. However, the need for a competitive port that can stand against the great continental ports remains. That case has already been put very effectively by those who have spoken in the debate.
The case urged strongly by the noble Lord, Lord Dormand of Easington—and I fully understand his reasons for doing so with such feeling—would have been argued more appropriately during the passage of the Bill which was debated in Committee in this House earlier this evening. The noble Lord referred to the comments of the Select Committee that national decisions should be taken by the national government and that these were national decisions and were not decisions which it was appropriate should be taken by a committee on a Private Bill. I agree entirely with that view. A Private Bill is not the appropriate instrument for deciding on the future of the coal industry. That should properly be dealt with by national legislation on the coal industry or other energy industries.
The noble Lord, Lord Dormand, also argued on the basis of the balance of payments. Our balance of payments will not be helped by uncompetitive ports. That point was brought out superbly in the eloquent and persuasive maiden speech of my noble friend Lord Rockley. There is very little that I can add to what he said.
As was pointed out by the noble Lord, Lord Greenway, we are being asked by those who oppose the Bill to support the British coal industry in an attempt to bludgeon the British ports industry, and a whole range of other industries, in order to protect its own interests. As we have heard, among the cargoes that will be shipped via Immingham are grain, animal feeds, fertilisers and raw materials for the British steel industry.
There is a certain irony in the fact that we should be debating the Bill in the face of a petition from British Coal. I well remember when I was Secretary of State for Wales the passionate arguments that

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were put to me by the British Steel Corporation, then chaired by the present chairman of British Coal, for the ability to import cheap coal and raw materials into the largest possible ports. He was absolutely right then and I understand why he argues the case for British Coal now. The British Steel Corporation is a supporter of the Bill, as are many other industries, for the reasons that we have heard.
There is a matter of fundamental principle at stake. Whatever the arguments for the protection of a particular industry, it cannot be right that one industry should be protected by imposing serious handicaps on another industry which provides a basic service to a whole range of other British industries and helps to provide part of the essential infrastructure referred to by my noble friend Lord Jenkin of Roding. It cannot be right that one industry should thereby handicap a whole string of other British industries in their efforts to be competitive. It is because there is that fundamental question of principle, and because the company of which I am privileged to be a director is determined to have increasingly efficient and competitive ports, that I ask the House to support the Bill.
7.35 p.m.
The Chairman of Committees (Lord Aberdare): My Lords, I hope that your Lordships will forgive me if I say a few words at this stage. I have listened with great interest to the debate. It would be quite wrong for me to express any views about the merits of the Bill. However, perhaps I may remind your Lordships, as I have on many previous occasions, that the Second Reading of a Private Bill, in contrast to that of a Public Bill, does not affirm the principle of the Bill. It merely gives approval for the Bill to go to a Select Committee for consideration both of the details of the Bill and the principle behind it.
Having said that, I should add that it is true that the House has the power to reject a Bill at Second Reading. However, that power has been exercised very seldom and only in the most exceptional circumstances. So far as I am aware the last example was in 1937 when the North Devon Water Bill was rejected. On that occasion the Motion for rejection stood in the name of the grandfather of the noble Lord, Lord Rockley. I should like to add my congratulations to the noble Lord on his admirable maiden speech.
7.36 p.m.
Lord Underhill: My Lords, perhaps I may add my congratulations to the noble Lord, Lord Rockley, on his maiden speech. I am sure he will not take it amiss if I say that I hope that he will speak on many future occasions on matters on which I agree with him completely.
We have heard the history of the Bill. It was in the other place for two years and three months. Details of its passage were given. However, one very important detail of its passage was omitted; namely, that the Third Reading in another place was given on 30th January by a very small majority of 23. It is no good Members saying that few Members were
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present. Four hundred and forty-one Members of Parliament took part in that vote, yet it was carried by only 23 votes. That is an indication of the amount of concern about the Bill.
I should like to avoid repeating much of what my noble friend Lord Dormand said in his impressive speech. He mentioned a number of facts which I hope will be taken into consideration. In speaking against the Bill it is not my intention, or that of my noble friend, to vote against the Bill. I hope that the debate will put down markers for the Select Committee to which the noble Lord, Lord Aberdare, referred. I regard that as the purpose of the debate.
As we have heard from the noble Lord, Lord Geddes, who explained the Bill very clearly, there are no objections to the projects at King's Lynn and Port Talbot. It is unfortunate that ABP linked those projects with what was obviously going to be a controversial development on the Humber at Immingham. Some will argue that that development will provide local employment. However, there is a very substantial argument, which was advanced very clearly by my noble friend Lord Dormand, that it could also lead to the collapse of entire mining communities.
The noble Lord, Lord Jenkin of Roding, referred to modern day Luddism, but the collapse of the coal industry means just that. We know the cost of endeavouring to resuscitate a mining community. I have no personal interest in the matter. I am not a member of the ports authority nor am I sponsored by a miners' union. My closest connection with a mining community is through my daughter who lives in Nottinghamshire. She knows what would happen to mining communities in Nottinghamshire if excessive imports of coal were permitted through Immingham.
Concern has been expressed that the 30 million tonnes of new capacity could be used for coal imports. ABP asserts—we have heard this argued tonight—that the Bill is not concerned with coal imports. It argues that it is up to the electricity and coal industries to work out between themselves whether coal should be imported.
During debates in the other place, reference was made to a statement to the Select Committee on Energy by Mr. Malcolm Edwards, the marketing director of British Coal, who said that the major purpose for the port development was the importation of coal. We know that coal contracts have been negotiated between British Coal and Power Gen, but those are for a period of only three years. In effect, they could be interim arrangements until the new terminal is ready, assuming that the Bill is given approval.
Sir Robert Haslam, chairman of British Coal, agreed with the greater part of the Coalfields Communities' report. That organisation is a body of communities associated with the coal industry. It has inter-party support from parties other than the mineworkers union and the Labour movement. He added that, if British Coal was not allowed to negotiate coal contracts with the CEGB prior to privatisation and was thrown out to rely on market forces, there could be a free-for-all. He made that

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statement in 1988 when the Bill first started its proceedings in the other place.
Lord Marshall, chairman of the CEGB, told the Select Committee on Energy that 99 per cent, of CEGB coal requirements could be met by British Coal, but that protection for British Coal might be required. It has been argued that protection is wrong. I hope that noble Lords have listened to what my noble friend Lord Dormand said. He was arguing about unfair competition and cheap coal coming in through cheap labour in other countries. We have not heard any arguments about that today from other noble Lords.
Reference was made in the other place to a statement which appeared in 1988 in the Financial Times. It stated:
"Much British deep-mined coal can compete well with imports in 1990 … by 1995 any saving by an all-out import policy in 1990"—
the article was written in 1988—
"would have disappeared and the electricity supply industry would be paying millions of pounds more for imported coal than by buying British. There is a severe risk that many deep mines which could compete with imported coal in 1995 will be closed by 1990 if the Government encourage an early free-for-all on imports".
I listened to the greater part of the Second Reading debate on the Coal Industry Bill on 9th February. I heard virtually all the arguments put forward. In his opening speech, the noble Viscount, Lord Ullswater, said that there would be a coal privatisation Bill in the next Parliament. He went on to say:
"It could not realistically be brought forward in the current Parliament".—[Official Report, 9/2/90; col. 1037.]
We have there a definite statement made in this House that a coal privatisation Bill will be introduced in the next Parliament.
The noble Viscount also paid tribute to the management for the tremendous surge of an increase of over 75 per cent, in productivity since 1985. Management did a good job; but, as my noble friends Lord Dormand and Lord Mason said in the previous debate on the coal industry, men achieved that. It was men who did that. Obviously, management planned and helped the development, but it was men who created that 75 per cent, increase in productivity. Those men are concerned that, unless we look after their interests in the development at Immingham, we shall find the whole mining communities in some areas wiped out. It is no good saying that we should be greatly concerned with the effect at Immingham on our £20 billion balance of payments deficit. This will add to it. I gather from debates in the other place that what was just a few years ago a surplus on our energy imports and exports has reached a deficit, if we take energy as a whole.
An amendment was proposed in the Private Bill Committee in the other place to the effect that no coal should be imported through the new facility. That amendment was opposed by ABP. Unfortunately, the Minister will take the attitude that the Government are neutral. We may not therefore hear the argument as to why ABP opposed the amendment. If it is interested mainly in other commodities and other bulk imports, why did it
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resist a proposal that there should be no increase in new, additional coal imports through Immingham? If it is prepared to accept the imports through Immingham, irrespective of whether it is unfair competition or of whether it is a case of coal being supplied through cheap labour, ABP has much to answer for.
I am surprised at the references made in some speeches tonight which suggest bludgeoning by British Coal interests. Judging by tonight's speeches, I should have thought that the bludgeoning was coming from the other direction because the only people who have spoken in support of the coal communities have been my noble friend and myself. As we have heard, the chairman of the committee said that he used his casting vote on an amendment to alert the Government if the port was used for heavy coal importation. It was unfortunate that the amendment was carried only on the chairman's casting vote. I should have thought that the whole committee would have thought that measure to be desirable.
We have heard reference to the two conditions laid down by the Commons Private Bill Committee. I must repeat those. The first condition was that the promoters should publicise, by placing information in the Commons Library, the amount of coal imported quarterly through that new development. Obviously, the committee was concerned, otherwise it would not have laid down that condition. The second condition was that the fact should be brought to the Government's attention that, if coal was imported in the massive quantities suggested by the petitioners, it could have a serious adverse effect on the British coal industry.
There must therefore have been some effective contributions put to the Private Bill Committee in the other place to make it lay down that second important condition. The chairman described those conditions as binding. During the Third Reading debate in the other place, it was stressed that the Commons Private Bill Committee had taken an unusual step in drawing attention to its concern about the energy implications in the Bill of possible importation of foreign coal. I am certain that noble Lords who have come from the other place will realise that that is an unusual step for such a committee to take. Yet it thought it was vital that it should make that declaration on that occasion. Whatever else is done about the Bill, those two conditions should be written into the Bill. I hope that the Select Committee will take a long look at that matter.
On Third Reading in the other place the Minister was asked whether the Government had considered the two conditions from the Private Bill Committee. The Minister, Mr. Portillo, replied:
"It is not clear what effect the Bill would have on any aspect of Government policy. My hon. Friend also referred to the special report that he wishes the Government to consider. I am sure that my right hon. Friend the Secretary of State for Energy will wish to bear it closely in mind".—[Official Report, Commons, 10/1/90; col. 1007.]
The Minister concluded that the matter was one that the House of Lords would have the opportunity to consider. That is what we want your Lordships to

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do tonight. We want to emphasise the points to the Select Committee. In a Written Answer of 30th October 1989 Mr. Portillo said:
"It is not for the Government to make a formal response to the special report but for the House to take it into account on Third Reading".
The House nearly took it into account on Third Reading on a very substantial vote. A Government with a majority of over 100 must realise that there is something very important going on when, with 441 Members voting, there is a majority of only 23. If I had been the Minister concerned, I should have wanted to know how it came about that such a small majority was obtained.
It is significant that when one looks at the speeches at Third Reading in the other place, and at the voting lists, one sees that the number of Conservative Members of Parliament from Nottinghamshire and from an area of 50 or so miles radius from Immingham voted against the Third Reading of the Bill. It was not from a Luddite attitude but because they appreciated what it would do to their communities if cheap coal were imported in large quantities.
I hope that the Select Committee to which this Bill will go will not be bludgeoned by the port authorities. I hope that it will listen very carefully to the petitions presented to it and will take into account what has been said in the other place and in our debate tonight. It should bear in mind that we are not arguing against competition. I also know a little about Rotterdam. I go to Holland every Easter and I have seen the great masses of containers. One does not export coal by container; coal is exported and imported by way of the special terminals which the development at Immingham is to undertake.
I hope that the Select Committee will listen very carefully to what has been said and bear in mind the two conditions laid down by the special committee in the other place to see whether possibly they can be worked into the Bill by amendments.
7.52 p.m.
Viscount Davidson: My Lords, all I can do at this stage is to restate very briefly the Government's view on this Bill. But first I wish to add my congratulations to those already given to my noble friend Lord Rockley on his excellent maiden speech.
The Government have considered the content of this Private Bill and have no objection in principle to the proposals in it. It is the Government's basic policy that Associated British Ports, like other port authorities, should be free to compete on price and service. If Associated British Ports thinks that it can make a commercial success of its proposed new facilities at King's Lynn and South Killingholme, there is no government policy objections to its trying to do so. It is for Associated British Ports to persuade Parliament that the powers that it seeks are justified. The Bill has been scrutinised in detail by an Opposed Bill Committee in another place which allowed the Bill to proceed unamended, subject to a binding undertaking agreed to by the promoters.
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As my noble friend Lord Geddes said, there are 10 petitioners against the Bill in your Lordships' House and they will have an opportunity to present their objections to the Select Committee. The committee will be in a much better position than we are tonight to examine in detail the issues involved and it will have the added advantage of hearing expert evidence.
In the circumstances I hope that the House will give the Bill a Second Reading so that it can be allowed to proceed in the usual way to the Select Committee for detailed examination.
Lord Geddes: My Lords, I am most grateful to all noble Lords who have spoken in this short debate this afternoon and in particular to my noble friend Lord Rockley, who made a quite exceptional maiden speech. I am grateful to him for having chosen the opportunity presented by this Private Bill to make his maiden speech. I hope that we shall hear from him frequently in the House in future. I hope that noble Lords will forgive me if I do not do the normal expert job that the Front Bench on either side of this House does when summing up a Bill. It is something outwith my previous knowledge, and I hope that I may be forgiven if I do not cover all the points that have been raised.
There have been some very interesting points—and, needless to say, ones with which I totally agree—made from this side of the House and the noble Lord, Lord Greenway, all concentrating, if I may put it this way, on the principle of objecting to a Private Bill aimed at expanding port facilities. It is objected to in favour of one particular industry and, let us not mince words, for the protection of that industry. I agree most strongly with what has been said by my noble friends and by the noble Lord, Lord Greenway; namely, that this is not the right place to voice such an objection. That does not at all mean that such objection or concern is or is not valid. That is not the point under discussion this evening. The point is whether this is the right place in which to voice such an objection. I contend most strongly—I hope that the Select Committee will support this view—that a Private Bill aimed at the expansion of the ports is not the correct place to bring in protection of the coal industry.
If I may say so very briefly at this late hour, specifically the noble Lord, Lord Dormand, in what I thought was a very impressive speech—the fact that I did not agree with it is neither here nor there; the speech and its contents I found very interesting to listen to—said (and I hope I wrote down the words correctly):
"Much more coal than any other material will be brought in". Shortly after that statement he said:
"10 million to 11 million tonnes per annum by the mid-1990s".
On that last point, to the best of my knowledge he upped the figure of the National Union of Mineworkers which had quoted some 7 million tonnes by around 30 per cent, to 40 per cent. It is remarkable how these figures grow. However, I return to what I think is the more fundamental point when he said:
"Much more coal than any other material will be brought in".

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No port operator in the world knows what will be brought in or indeed taken out from the port. His job is to produce the facilities at the port to encourage customers to come in and go out. What is carried into or out of that port is not within his jurisdiction. Naturally, he hopes that more of anything is best because that is what the port is there for.
I can give the noble Lord, Lord Dormand, and the House the projections put out by the Associated British Ports for the year 1993, which at that stage was deemed to be the first full year of operation of the port. At that stage coal imports were forecast to be fractionally under 9 per cent, of total imports and coal exports were forecast to be slightly over 7 per cent, of total exports. So slightly under 9 per cent, of all imports would be coal and slightly over 7 per cent, of all exports would be coal and not,
"Much more coal than any other material".
That is if, indeed, those forecasts are correct. They were submitted to the Select Committee of another place. My noble friend Lord Rockley and other noble Lords spoke of competition from the great Continental European ports. Since the noble Lord, Lord Dormand, quoted from the special report, I also shall quote from it. The Select Committee of another place said:
"we were agreed that Associated British Ports is a reputable company with a proven track-record of operating port facilities. Immingham already has a successful and well-managed port and we consider that in itself the request by the promoters to extend their facilities there was a reasonable one. In particular, this would help the Port of Immingham compete with the continental ports of Amsterdam, Rotterdam and Antwerp. It would enable much larger ships to berth at Immingham and enable cargoes to be brought there direct instead of having to be broken up at an intermediate stage of their transit".
That leads me to a most interesting argument which I heard from both the noble Lords, Lord Dormand and Lord Underhill, regarding the balance of payments. I had to listen very hard to be sure that I was hearing correctly. It is an argument that could
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be turned on its head. By creating a larger port, by definition one is encouraging more cargoes into and out of that port directly rather than indirectly. That in itself will reduce costs and encourage British manufacture and, it is to be hoped, British exports.
It is interesting to consider the 1993 forecast figures from ABP. I was doing so just now, if he will forgive me, during the winding up speech of the noble Lord, Lord Underhill. If one compares the 1993 forecast figures with the 1988 figures, imports are forecast to rise 26 per cent, over that period, but exports by 32 per cent. By definition, my experience in the shipping industry is that in this country exports have a significantly higher value than imports. I suggest to your Lordships that that alone would encourage an improvement in the balance of payments position, and not a retrograde step.
However, it is not my task to occupy any more of your Lordships' time. It has been said that we are an island nation; we are indeed. We live by trade, perforce. We must have the facilities at least equal to, if not better than, our competitors in order to survive as a trading nation.
As I said at the start of the debate, the proposals in the Bill will benefit this country enormously. Our ports already fall behind those of our nearest European neighbours in size and, as a consequence, efficiency. Surely we must grasp this opportunity to bring some of them up to standard. In my submission, it is imperative that ABP is given the chance to continue to build on its excellent past and its present conspicuous success. I commend the Bill to your Lordships and ask the House to give it a Second Reading.
On Question, Bill read a second time, and committed to a Select Committee.
House adjourned at two minutes past eight o'clock.