Coal Industry: Financial Assistance (Hansard, 27 April 1993)

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield)
My Lords, the Government have published Supply Estimates for 1993–94 which include provision for grants of up to £1,120 million for British Coal and £44 million for payments under the Redundant Mineworkers Payments Scheme. Following the coal review the Government propose to provide an operating subsidy to the industry. The actual level of expenditure will depend on the degree to which the coal industry is successful in securing additional orders.

§ Lord Boyd-Carpenter
My Lords, I thank my noble friend for that Answer. Is she telling the House that that level of expenditure will continue to support the coal industry for some years to come? If so, is that not quite inconsistent with the Government's very proper concern with economy in public expenditure which has been so vigorously applied in other directions?

§ Baroness Denton of Wakefield
My Lords, I am pleased to tell my noble friend that we are concerned about public expenditure. We believe that for the future of the country and for the future of the industry, the best possible route is to ensure that coal is privatised as soon as possible.

§ Lord Mason of Barnsley
My Lords, is the Minister aware that according to a recent National Union of Mineworkers' report, the 10 pits which are threatened with immediate closure—6,000 miners' jobs—could make a profit and save British Coal £185 million of redundancy payments? Will the Minister say whether that report is being considered by her department?
Secondly, what advice have the Government offered to British Coal regarding the use of their pension funds which have a surplus of approximately £1,000 million? Is that to be used for redundancy payments? Allied with that, will the Minister give an assurance that miners' pensions will not be harmed now or in the future under privatisation?

§ Baroness Denton of Wakefield
My Lords, I can reassure the noble Lord, Lord Mason, that the department takes into account all information on the subject of the industry and will continue to do so. I assure him also that the pension entitlements of present and past employees will be safeguarded and the trustees of the pension scheme will be consulted about arrangements following privatisation.

§ Lord Ezra
My Lords, the noble Baroness referred to the negotiations as regards the sale of coal to the power stations. Can she give us any information about the success of those negotiations?

§ Baroness Denton of Wakefield
My Lords, the discussions about additional sales are between British Coal and the generators. Those discussions are continuing.

Lord Bruce of Donington
My Lords, is the noble Baroness aware that the figures which she gave in reply to the Question asked by the noble Lord, Lord Boyd-Carpenter, reveal that the amount paid in support of the coal industry is far less than the amount paid out of taxpayers' money into the European Community every year and that it represents far better value for money than the sums paid into the European Community, a large amount of which is dissipated by fraud?

§ Baroness Denton of Wakefield
My Lords, sticking within the remit of the Question, perhaps I may stress the fact that some of that money comes back through RECHAR which is a great help to the area. I should also like to point out that, since 1979, the Government have provided the coal industry with financial assistance exceeding £18 billion. We certainly have had regard.

§ Lord Dormand of Easington
My Lords, can the Minister say how much of that estimate has been set aside for the moth-balling of pits? Is she aware, for example, that the pit at Easington (where I come from) last month made a profit of £2 million and a substantial profit over the financial year? Is it not 146 absolutely crazy that pits should be moth-balled with all the technical and operational difficulties that that entails, such as the redundancy payments about which the Minister has talked? I repeat my original question: how much has been set aside?

§ Baroness Denton of Wakefield
My Lords, the noble Lord, Lord Dormand, knows as well as I do that the coal mines are operated by British Coal and that the commercial decisions rest there. However, I agree with the noble Lord that it is crazy not to concentrate on additional sales. The purpose of the coal review's results and support is to try to find an extra market for coal.

§ Lord Marsh
My Lords, will the Minister give the House an assurance that, if evidence is adduced that demonstrates that the pits which are threatened are indeed potentially highly profitable, the Government will not apply any constraints on the right of the pension funds to invest in them?

§ Baroness Denton of Wakefield
My Lords, I have to repeat to the noble Lord, Lord Marsh, the answer that I gave earlier; namely, that the pension entitlements of present and past employees will be safeguarded. The trustees have that responsibility.

§ Lord Donoughue
My Lords, I am sure that the noble Baroness meant to add in her reply to her noble friend Lord Boyd-Carpenter that in the case of current mines the costs of maintaining them open are no more—and in most cases, are less; and would maintain miners in the dignity of employment—than the costs of closing the mines bearing in mind the true social, redundancy and subsequent social security costs? In the past financial year 1992–93, can the Minister tell the House what were the costs of closing the two dozen mines and of making 14,000 miners unemployed?

§ Baroness Denton of Wakefield
My Lords, I must tell the noble Lord, Lord Donoughue, that we have supported the coal industry very extensively for a long time. When it comes to the question of respect for miners and their future, a £200 million programme to ensure that there are opportunities for those people is certainly a very large, possibly the largest, programme which has been focused on the matter. The numerous costs are attracted because we must always remember that the main issue is that there is no value in mining coal which cannot be sold. That is why we have looked at addressing that problem.

Noble Lords
Next Question!

§ The Lord Privy Seal (Lord Wakeham)
My Lords, I wonder whether we ought to move on to the next Question as 25 minutes have passed.