HL Deb 14 January 1992 vol 534 cc112-4

3 p.m.

Lord Jayasked Her Majesty's Government:

What steps they are taking to preserve the British coal industry.

Lord Cavendish of Furness

My Lords, the Government's aim is to secure the largest economic coal industry that the market can support. The best way of achieving that is to give the industry and its workforce the chance to develop its full potential outside the constraints of the public sector.

Lord Jay

My Lords, does the noble Lord agree that one of this country's greatest national assets is the possession of 200 years' supply of high quality coal? Are the Government content to let the industry wither away without adequate support as seems to be happening now?

Lord Cavendish of Furness

My Lords, the noble Lord can hardly say that it is withering away for lack of support. I should point out that at today's prices the last Labour Administration spent £1.49 billion in five years, compared with £22.7 billion under the present Administration.

Lord Mason of Barnsley

My Lords, is the Minister aware that this country now imports 15 million tonnes of cheap coal each year? Is he further aware that recently, as a result of the Coal Industry Act enacted by this Government, opencast coal mining has been expanded to the extent that there are now 64 sites working? Does he agree that the Rothschild Report to the Government suggested a cut of 30,000 jobs, with only 14 coal mines to remain viable? Does not the Government's Coal Industry Bill herald a pit closure programme of another 30 pits on top of the 158 pits that have closed since they came to office? Will he admit that this is a policy of decimation and not preservation of the deep mine coal industry? Finally, why are the Government so cruel to the coal mining community, denying it £109 million of RECHAR money from the European Regional Development Fund, which was described by the Secretary of State for the Environment as an untenable position and which cannot be defended?

Lord Cavendish of Furness

My Lords, the future size of the British coal industry will depend on its ability to secure contracts with electricity generators. That will be critically dependent on its ability to improve productivity and reduce its unit costs. I believe that the industry has the technology, the investment and above all the workforce to face up successfully to the challenges of the future. The industry has already made considerable progress in productivity, which has more than doubled compared with pre-strike levels and is now the highest in Europe.

Lord Ezra

My Lords, does the noble Lord agree that, as the noble Lord, Lord Jay, intimated, coal represents the major energy reserves that this country possesses? Does he further agree that, in order to make sure that we use those reserves efficiently and in conformity with new environmental requirements, we should put every possible effort into developing clean coal technologies? Will he indicate the Government's attitude to that view?

Lord Cavendish of Furness

My Lords, the noble Lord has forgotten more about coal than I shall ever learn. Certainly, there are enormous reserves of coal. We want to produce coal efficiently and effectively because that is the best way to preserve that long-term asset. The noble Lord is right; research and development is important. We attach enormous importance to clean coal technology in the United Kingdom and acknowledge its role, alongside that of industry, in ensuring that research and development takes place. Careful consideration will be given to the future of clean coal technology and its long-term funding in the context of British Coal privatisation. In a recent initiative we announced new projects with a contract value of £20 million and we plan to introduce a number of other collaborative research projects over the next year.

Lord Dean of Beswick

My Lords, is the Minister aware that recently the Secretary of State for Energy, Mr. Wakeham, protested to the European Commission about the German Government funding their own uneconomic pits when it would be more competitive for them to use the cheaper, British coal? Why, then, do the Government persist in allowing imported coal into this country in increasing amounts? Why do they not follow the course suggested earlier by my noble friend Lord Mason?

Lord Cavendish of Furness

My Lords, we have no intention of controlling coal imports. I know that it is part of the policy of the party opposite to effect such controls. It remains to be seen, presumably in the run-up to the election, whether it will take account of the fact that that is probably outside the law and certainly outside the spirit of the law. Meanwhile, such as one can tell about Labour Party policy on energy—phasing out nuclear energy, control of imports and so on—together with its environmental aspirations, it would be bad for industry, bad for the consumer, bad for the environment and bad for the nation.

Lady Saltoun of Abernethy

My Lords, can the noble Lord say whether it is true that the Frances Colliery in Scotland is about to be reopened and that it produces cleaner coal than most?

Lord Cavendish of Furness

My Lords, I am afraid that I cannot answer the noble Lady's question, but I shall certainly inquire into the matter and let her know.

Lord Dormand of Easington

My Lords, will the Minister confirm that the Government have no power to compel the generators to renew with British Coal the contracts which expire in March next year? If the generators do not renew those contracts, which, incidentally, account for 80 per cent. of the production of British Coal, will it not mean the wholesale closure of pits and the loss of thousands of jobs? Even more important, will there not be a lack of security in the provision of coal and will not the coal industry disappear for ever? Does he not agree that the Government should intervene immediately?

Lord Cavendish of Furness

My Lords, we have every confidence that British Coal will be capable of obtaining a sufficient volume of business from the generators. We believe in diversity and so, I believe, does British Coal. We are confident that it will move forward, as it has done since this Government have been in power.

Lord Donoughue

My Lords, will the Minister confirm that the deficit on Britain's fuel trade was around £700 million last year compared with a surplus of over £6 billion a few years ago? Does he agree that that arises primarily from record imports of coal and the highest imports of oil since 1980? Does he further agree that that is indefensible in a country which has the largest natural resources of coal, oil and gas in the EC? Is there not needed a policy for the sensible use and depletion of our energy supplies that does not contain the massacre of the coal industry?

Lord Cavendish of Furness

It is not indefensible at all, my Lords. I shall proceed to defend it. The deficit arose largely from the massive programme of safety and maintenance work in the North Sea following the Piper Alpha disaster. Full figures for 1991 are not yet available, but for the first nine months of the year net imports of fuels amounted to 13 million tonnes of oil equivalent. For the third quarter of 1991 there was a trading surplus of £70 million and that is likely to be repeated in the final quarter. So the overall deficit for the year is unlikely to exceed £100 million. Future production looks like being up and will soon restore the fuel trade balance.

Lord Jay

My Lords, does the noble Lord consider it sensible that the Government subsidise our nuclear power industry and the German Government heavily subsidise their coal industry, yet we give no similar support to our coal industry?

Lord Cavendish of Furness

My Lords, I do not see why we need follow the example of Germany.