HL Deb 20 February 1991 vol 526 cc548-50

3.14 p.m.

Lord Dormand of Easington asked Her Majesty's Government:

Whether they have any further proposals for the coal industry.

Lord Cavendish of Furness

My Lords, the Government have given substantial support to the coal industry over the past 11 years. We have approved over £7 billion of new investment and have also provided for grant aid around £17 billion, including provision of over £6 billion deficiency grant under the Coal Industry Act 1990. It is now up to British Coal's mineworkers and management, working together, to make the best use of this investment to transform the corporation into a competitive and profitable enterprise. As to the future, the Government remain committed to returning the coal industry to the private sector. But no decisions will be taken on the future structure of the industry until after the next general election.

Lord Dormand of Easington

My Lords, is the Minister aware that British Coal has said for the first time that if cheap coal imports continue many United Kingdom pits will close permanently? Is he further aware that the chairman of National Power has been reported as saying that the company will seek international tenders for all its coal needs as soon as it is privatised? Given that the generating contract with British Coal will end in 1993, that the increase in productivity has been massive—by the way, the Minister did not mention that—and that British pits have reserves that will last for at least another 200 years, is it not time that the Government took action not only to safeguard jobs but to safeguard the security of supply in this country?

Lord Cavendish of Furness

My Lords, the coal industry is indeed making good progress, with productivity up over 85 per cent. from pre-strike levels. Further productivity gains are essential. I believe that the industry has the investment, technology and skills to achieve them. It remains the Government's policy not to restrict coal imports. We believe that restricting them will not bring long-term security to the coal industry.

Lord Boyd-Carpenter

My Lords, can my noble friend say whether the coal industry has explained to the Government why in many cases it is more economical for a consumer of coal to import it from many thousands of miles away in Australia or South Africa than to buy it in this country?

Lord Cavendish of Furness

My Lords, I know that there are discussions at regular intervals and I imagine that that point has been explained.

Lord Mason of Barnsley

My Lords, with regard to the future of the British coal industry, can the noble Lord tell us what steps the Government will take to restrain National Power and PowerGen from buying coal mines overseas with a view to importing increased tonnage of cheap coal? Secondly, will the Government oppose the proposal that National Power and PowerGen intend to reduce their take of British coal in 1993 from 75 million tonnes to 60 million tonnes, thereby reducing the coal industry by nearly one-third and incurring another 18,000 job losses?

Lord Cavendish of Furness

My Lords, I must apologise to the noble Lord and to the House. I was not aware of either of those proposals. The coal industry has shrunk at a consistent rate since before the First World War, as much under Labour as under Conservative administrations. I point out the very considerable help given by this Government to mineworkers and mineworkers' communities when pits have closed. That has been done through various avenues.

Lord Ezra

My Lords, does the noble Lord agree that among the measures necessary to safeguard the future of coal is the need to ensure that it is burnt as environmentally acceptably as possible and that the clean coal technology can go a long way in that direction? Would he indicate the extent of the support that the Government are giving to the development of this technology?

Lord Cavendish of Furness

My Lords, in the time allowed to me I can say that we are committed to the development of coal technologies. It has not been without its problems. In the current year there has been an exceptional expenditure of £11.3 million, mainly covering the Grimethorpe project. That will return to an annual rate running at about £2.7 million. A coal task force has been set up to examine the longer-term implications. I hope that that will particularly examine collaborative effort since there are such advanced technologies in the United States and elsewhere.

Lord Peston

My Lords, can the noble Lord tell us whether he has read an article in this week's Economist —a paper which is not normally sympathetic to Her Majesty's Opposition—in which it is said that British Coal managers are fed up with the Energy Department's dithering which has made it almost impossible to draw up a long-term company strategy? Is he aware of that statement in the Economist and would he care to comment on it?

Lord Cavendish of Furness

My Lords, I do not think that the Economist is necessarily friendly to Her Majesty's Government. I have not read the argument but I shall do so and will comment.

Lord Dormand of Easington

My Lords, in view of the reply given by the noble Lord to my first supplementary question, would he say that there are no circumstances at any time in which the Government would restrict coal imports?

Lord Cavendish of Furness

My Lords, there are no plans to do so at the moment.

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