Lords Sitting of 26 April 1994

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

PSBR: Method of Calculation
Lord Barnett Lord Barnett asked Her Majesty's Government:
Whether they have any plans to change the method of calculating the public sector borrowing requirement (PSBR).
The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley): My Lords, no. The public sector borrowing requirement is a measure of the difference between the public sector cash outlays and its cash receipts, and there are no plans to change this.
Lord Barnett: My Lords, that is a rather disappointing reply. I had hoped that the Minister would be more helpful because I was trying to help him. Clearly, it would be helpful and sensible to distinguish between capital expenditure, with a clear economic return, and current expenditure on a regular rather than on an annual basis. I do not make that suggestion in order artificially to lower the borrowing requirement. In any case, whatever the borrowing it must be financed. Would it not be more sensible to know clearly that some of the expenditure relates to a well-defined capital cost? Would that not be helpful to any government?
Lord Henley: My Lords, the noble Lord is correct; we distinguish between the two on an annual basis. Perhaps I may refer him to page 138 of the Red Book. I see that the noble Lord nods; he knows the Red Book as well as any of us. It distinguishes between capital receipts and revenue receipts and vice versa. Whether that would be possible on a monthly basis is another matter. We believe that the PSBR as it stands provides a timely and accurate measure that is of considerable use to the Government.
Lord Clark of Kempston: My Lords, does my noble friend agree that while the reduction in the projected public sector borrowing requirement for last year is down, that is no reason for any relaxation on public expenditure? Does he further agree that with the recession now behind us the public sector borrowing requirement must of necessity decrease and that only in that way can we have tax reductions rather than an increase in public expenditure?
Lord Henley: My Lords, my noble friend is absolutely correct; the PSBR is some £4 billion lower than originally forecast. However, at over 7 per cent. of GDP it is still much too high. It was only ever higher as a percentage of GDP in the mid-1970s. Like my noble friend, I do not believe that now is the time to relax the
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various initiatives which my right honourable friend the Chancellor of the Exchequer announced in last year's Budget.
Lord Bruce of Donington: My Lords, will the Minister give the House an assurance that he will not take his own Treasury officials too seriously when they present the figures to him? Will he give the House a further assurance that the methods used at present are substantially in conformity with those used during my noble friend's tenure of office and that the figures were done at lunchtime in the Reform Club on the backs of envelopes and could be guaranteed plus or minus £4 billion one way or the other?
Lord Henley: My Lords, obviously I cannot answer for the noble Lord's noble friend and his tenure as Chief Secretary to the Treasury. I can assure the noble Lord that I shall continue to take very seriously the advice of the Treasury officials. I can also assure him that although we originally forecast £50 billion as the PSBR, and it was somewhat lower at £46 billion, that was still within the margin of error as forecast in the previous two Budgets.
Lord Callaghan of Cardiff: My Lords, may I make it clear that it was done at the Athenaeum?
Lord Henley: My Lords, I note what the noble Lord says.
Lord Wyatt of Weeford: My Lords, as the forecast for the PSBR was wildly overestimated, will the Minister assure us that as the decline in the PSBR continues the Government will not make the same mistake this time? Will he ask his right honourable friend the Chancellor of the Exchequer when he will announce tax cuts without increasing expenditure?
Lord Henley: My Lords, I refer the noble Lord to the answers I gave to my noble friend Lord Clark and the noble Lord, Lord Bruce. The PSBR was lower than forecast but not vastly lower, as the noble Lord appears to suggest. As I made clear to the noble Lord, Lord Bruce, it was well within the average of forecast errors of the past 10 years.
Lord Ezra: My Lords, while the distinction between public revenue and capital expenditure in the recent unified Budget is much to be welcomed, does the Minister agree that that is only one part of the story? The other part of the story is doing something about the figures that are thus revealed. Is it not disturbing that the figures show that the prospective capital expenditure is likely to diminish and that it will be lower in the next three years than in the previous three years?
Lord Henley: My Lords, I believe that the important figures are the overall figures. We remain committed to our medium-term fiscal objective of bringing the PSBR back towards balance over the medium term.
Lord Eatwell: My Lords, is the noble Lord aware that the PSBR as measured has always been regarded as a deeply flawed statistic because current revenues are padded with capital receipts in a way which would be illegal in private sector accounting? Dos the noble Lord

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recall telling me on 21st March at col. 497 of Hansard that when the deficit is correctly measured, the Government have been in deficit in every single year except one since 1979? When the Chancellor of the Exchequer said yesterday that he expects to balance the budget in four years' time, was he referring to that true measure or to the bogus PSBR?
Lord Henley: My Lords, I do not accept that the figures are bogus. We have always made clear that the PSBR is and always has been a cash measure. It is not a national accounts measure, such as may be used in some private companies, as the noble Lord seems to suggest. It records in a timely and accurate manner—the virtue of the PSBR is the fact that it is both timely and accurate—the majority of cash transactions, as and when they take place, privatisation proceeds and other financial transactions.
Lord Harmar-Nicholls: My Lords, while we shall never agree about the economy, is it not possible to get both sides of Parliament to agree a measuring rod which really tells the true story instead of skirting round all the verges, producing results which do not mean much?
Lord Henley: My Lords, I do not know whether we can get both sides of the House to agree. I seem to remember that back in the early 1980s, some 360-something economists all agreed. They all agreed, and they were all wrong.
The Earl of Halsbury: My Lords, long ago we kept our accounts above and below the line. Is there anything to prevent our returning to that excellent system of accountancy?
Lord Henley: My Lords, that was a very different system. We have been using the PSBR now for some 20 years and, as I made clear, we believe that it is both a timely and accurate measure of what we are trying to record.
Lord Barnett: My Lords, I am sorry that the Minister has been so defensive. As I indicated, I am not being offensive. I am trying to help him, as is everyone, by seeking a clearer definition of public expenditure. If the noble Lord is not able to give me a reply today, will he consider the matter and then let me know whether or not he agrees with that?
Lord Henley: My Lords, as I made clear in my first supplementary answer to the noble Lord, we distinguish on an annual basis between capital and revenue receipts. The noble Lord accepted that. I said that I doubted whether it was possible to do that on a monthly basis. If the noble Lord wishes me to take that matter away and consult those who advise me, I shall do so and come back to the noble Lord by means of correspondence.
Lord Eatwell: My Lords, as one of the 364 economists who signed the letter in The Times, may I remind the noble Lord that we argued that maintenance of the Government's policies would lead to a sustained higher level of unemployment? That is exactly what has happened under this Government.
Lord Henley: My Lords, I believe that the noble Lord will accept that he was wrong about many other parts of the letter.

South African Elections: Observers
2.46 p.m.
Baroness Sharples Baroness Sharples asked Her Majesty's Government:
What security measures have been taken to protect the 20 United Kingdom parliamentarians observing the South African elections on 27th April.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, on behalf of the Foreign Secretary I briefed the parliamentarians concerned on 20th April. They were also thoroughly briefed on security on arrival. They are observing the elections with South Africans familiar with the local situation. Security forces are present at all polling stations. Certain areas may be tense but British parliamentarians are unlikely to be at greater risk than other observers.
Baroness Sharples: My Lords, I thank my noble friend for that somewhat reassuring reply. Is she aware that the 20 observers under the CPA umbrella were obliged to sign disclaimers? Can my noble friend reassure me that as under English law it is not possible to exclude liability by negligence for personal injury, the observers will be fully protected?
Baroness Chalker of Wallasey: My Lords, my noble friend is quite right in what she says; but I believe that she knows that the Commonwealth Parliamentary Association is responsible for all the arrangements for the British group of parliamentarians. I understand that certain insurance arrangements have been made and that the parliamentarians were given details of an insurer whom they should contact if they wanted further cover. I suggest to my noble friend that she should contact the CPA office for further information; but I believe that the British observers have been properly looked after.
Lord Dean of Beswick: My Lords, will the Minister tell the House whether any Members of your Lordships' House are among those observers and, if so, whether they are also insured? If they are, that will be the first time that that has applied because Members of this House are not insured here when travelling on government or opposition business, even though all the Members of another place are so insured.
Baroness Chalker of Wallasey: My Lords, I do not believe that my noble friend Lord Astor of Hever, who is travelling with the group, will be treated in any way differently from the other observers with the CPA/IPU delegation.
Lord Dean of Beswick: My Lords, I was referring to a noble Baroness.
Baroness Chalker of Wallasey: My Lords, I believe that the noble Baroness, Lady Hollis, and my noble friend Lady Flather are also there. They will all be covered in a similar manner by the CPA.
Lord St John of Bletso: My Lords, does the Minister not agree that, despite the recent bombing in Johannesburg, Germiston and Pretoria and despite the on-going violence in several of the townships, more specifically in the mid-Rand and Natal, the peace accord of 1992 and the peace committees have to a large degree quelled the major unrest spots in South Africa? Does the Minister not further agree that the government, in particular President de Klerk, Nelson Mandela and Chief Mangosothu Buthelezi, have all committed themselves to ensuring that the international observers are safe?
Baroness Chalker of Wallasey: My Lords, I can agree with everything that the noble Lord has just said. I should point out also to your Lordships that Britain has made a very great contribution to the whole conduct of the elections; in particular to training those people who were looking after the rallies, helping with the new national peacekeeping force, helping too with the independent electoral commission and, above all, providing training and communication equipment for the peace monitors as well as training for the local election officials. Our contributions and those of President de Klerk, Mr. Mandela and, indeed, Chief Buthelezi in working for peace are much to be welcomed. I believe that the IFP' s decision to contest the election will lead to reduced levels of violence across the country as a whole.
Lord Judd: My Lords, will the Minister send the good will of the entire House to those who are witnessing the elections on our behalf, underlining the fact that we see it as a demonstration of our determination that the courageous leadership from people of all races in South Africa which has made the election possible will not be diverted by extremists and their terrorist techniques?
Baroness Chalker of Wallasey: My Lords, I agree with the noble Lord. There are some 6,000 observers, about 3,000 of them official and 3,000 from other groups. I believe that they are doing a fine job, based on the plans laid by all parties in South Africa. We wish them well. We hope to see a peaceful outcome. We look forward to working with the government of national unity elected in these first historic elections.
Lord Pender: My Lords, does my noble friend accept that, while there is an element of tension prior to the elections, I have just returned from a quick visit to South Africa which took in the three cities of Johannesburg, Durban and Cape Town and I can assure the House that, although there are isolated areas of unrest, in the main the British parliamentarians would be just as safe walking the streets of those cities as they would Brixton on a Saturday afternoon?
Baroness Chalker of Wallasey: My Lords, I am grateful to my noble friend for what he has said. Given the number of people who are watching the elections
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and the supporting system, I believe that they will be even safer than they would in the contrasting parts of this country that he mentioned. Many people are working for these peaceful elections, none more so than the happy South Africans who are voting for the first time.
Lord McIntosh of Haringey: My Lords, has the Minister been in Trafalgar Square today? Does she, agree with me that it is a most wonderful sight to see the queues around South Africa House, mainly white but also black and Indian, all voting together?
Baroness Chalker of Wallasey: My Lords, I regret that I have not had the time to go to Trafalgar Square today, but throughout the morning I have heard reports of the growing numbers going to cast their votes in this first fully democratic election in South Africa. That is much to be welcomed. We hope that it is happening in all capitals around the world where votes are being so cast.

South Africa: Support
2.53 p.m.
Lord Judd Lord Judd asked Her Majesty's Government:
What are their plans for future bilateral and multilateral overseas development co-operation with South Africa.
Baroness Chalker of Wallasey: My Lords, we plan to increase our bilateral support for a new South African Government pursuing sound policies. We are encouraging the relevant multilateral agencies to provide substantial and effective programmes there.
Lord Judd: My Lords, I thank the Minister for that Answer. Has she seen the recent statistics produced by the Overseas Development Institute which estimate that apartheid has left one in four black people living in squatter camps or crude temporary housing; only 5 per cent. with electricity; 40 per cent. with no access to clean water; 50 per cent. illiterate; and one in four black children still not at school? Does she agree that that represents a gigantic challenge to us all if the democracy that we have advocated is to succeed? Will it not require a massive co-ordinated international effort involving aid, investment, trade and technical assistance, together with enlightened IMF and World Bank policies? Will the Minister tell the House what she is doing in that respect? Does she understand that she will have the fullest possible support from this side of the House as the brave people of South Africa go into the next chapter of their struggle for freedom and the future of their nation?
Baroness Chalker of Wallasey: My Lords, since my first visit to South Africa some eight years ago, it is the conditions of so many that have caused people to worry whether there could be a peaceful conclusion to this great step forward towards non-racial democratic elections. We know that there is much to do. We hope that CDC will soon begin investing in South Africa. We hope that the World Bank will quickly begin lending in

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South Africa. We have helped it to prepare the ground for urban sector loans which will cope with some of those problems. But above all South Africa must look to the private sector, the international financial institutions and development finance organisations. We shall be giving technical co-operation. That will be continuing and growing over the next three years, but there is a great deal that can and should be done by the private sector in South Africa.
Lord Bruce of Donington: My Lords, is the Minister aware that many of us on all sides of the House have the utmost confidence in the personal efforts that she will make in her ministerial office? Can she give the House an assurance that in the multilateral efforts which will involve liaison with the World Bank, the OECD, and so on, she will take steps to ensure that the European Commission clears up its own mess first and does not get involved in this?
Baroness Chalker of Wallasey: My Lords, the noble Lord, Lord Bruce of Donington, knows that I am very much at one with him in wanting to see development by all bodies properly targeted and co-ordinated. I thank him for the kind things that he said at the beginning of his remarks. The European Community has a programme involving about £80 million per year. We are working with it on this to increase its poverty focus and to improve the quality of the programme. I shall be discussing it at the Development Council on 6th May.
Lord St. John of Bletso: My Lords, will not one of the major challenges facing the new South Africa be to meet the needs and, for that matter, the expectations of the so-called emancipated peoples? Will not one of the greatest challenges be to raise the level of education in South Africa? Will the Minister comment upon initiatives which the Government are taking as well as the other initiatives of which I have heard recently, such as Education Africa, which are fulfilling that objective?
Baroness Chalker of Wallasey: My Lords, without notice, I cannot give your Lordships the details of South African Government initiatives, but over the past eight years we have been involved in something called the Molteno Project which has been training the trainers of teachers and sending them out into schools all over the country. We hope that that kind of project will multiply still further, and that the basic school buildings and equipment which are needed so urgently will be provided, as I believe all believers in South Africa have pledged to do.
Lord Mackie of Benshie: My Lords, does the Minister agree that the provision of housing may be the most visible improvement that could be shown to the expectant people? Will she give full backing, financial and otherwise, to efforts in that direction?
Baroness Chalker of Wallasey: My Lords, I believe that housing, education, basic health, clean water and power are all important. There will obviously be enormous challenges to be faced, particularly in the densely populated areas. I can assure the noble Lord that
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we are doing all that we can, but we must accept that there are many technically able people in South Africa, and that while they may need a bit of technical co-operation from us, many of the things that need to be done will be done by South Africans of all backgrounds themselves.
Lord Judd: My Lords, I thank the Minister for all that she has said in response to these questions. Will she recall with us all that in the difficult years after the Second World War a vital factor in the rebuilding of democracy in Europe was the United States imaginative Marshall Aid programme? Is not the challenge presented by South Africa now, if democracy is to succeed, every bit as real as the challenge presented by Europe in 1945?
Baroness Chalker of Wallasey: My Lords, I believe that the challenge is as great, but we are better equipped today than ever before to rise to it. I hope that the private sector, not just from this country but from all countries, will involve itself, together with governments, in helping the new South African Government of national unity to meet that challenge.

Government Office for London
2.59 p.m.
Lord Donoughue Lord Donoughue asked Her Majesty's Government:
Why the Department of National Heritage is not represented on the new Government Office for London.
The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Arran): My Lords, the Government Office for London brings together the regional offices of the Departments of the Environment, Employment, Trade and Industry and Transport. These are the principal departments concerned with economic development and regeneration in the English regions. We are considering with other government departments, including the Department of National Heritage, whether they might also have a role to play in the new offices.
Lord Donoughue: My Lords, I thank the Minister for that reply. Does he not agree that the sectors coming under the Department of National Heritage—namely tourism, media, arts, sport and heritage—are among the largest employers and sources of revenue for London? Therefore, is it not inexplicably bizarre that they have been excluded? Does that not demonstrate that the Government undervalue both the Department of National Heritage and London? Is it not time, not for some inter-departmental bureaucracy which excludes a key department, but for a properly elected strategic authority for London?
The Earl of Arran: My Lords, in no way do the Government underestimate the huge importance and significance of the contribution that culture and leisure services can make to regional development, not only in London but across all the regional offices. I can say that

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a regional unit which has recently been formed will liaise with the team steering the new government offices to ensure that this is brought very much to the fore.
Lord Jenkins of Putney: My Lords, does the Minister agree that it is not merely a question of leisure services? The range of responsibilities which the heritage department itself has created, quite rightly, is very wide and is of vital economic consequence, in addition to having its artistic and other aspects. Is my noble friend not right to say that the Government should make sure that the department has a role in this new development, and that in the longer term there should be co-operation with this side of the House in re-creating properly elected government for London?
The Earl of Arran: My Lords, I can only repeat what I said to the noble Lord, Lord Donoughue. This is being taken seriously. These four new departments, presently located in the 10 different regions, are being properly constituted, and other departments, including the Department of National Heritage, will be examined very closely to see whether they have an important role to play in those particular components.
Lord Renton: My Lords, in any event is it not inevitable that such an important departure as a new Government Office for London will be the collective responsibility of the Cabinet, of which the Secretary of State for National Heritage is a member?
The Earl of Arran: My Lords, certainly the collective responsibility will be taken by all the Secretaries of State, to whom the regional directors in the 10 regions will report.
Lord Hylton: My Lords, have the Government taken note of recent proposals for removing parked cars from important and historic public places such as Horse Guards Parade and the courtyard of Somerset House, and will they take action on them?
The Earl of Arran: My Lords, with the greatest respect, that is somewhat wide of the Question on the Order Paper. I hear, however, the point the noble Lord makes. I am sure that it is close to many of your Lordships' hearts. I shall take that into careful consideration.
Lord Howell: My Lords, will the Minister confirm that the Department of National Heritage has been excluded so far from similar governmental organisations throughout the country; for example, in Birmingham? If the Department of National Heritage is to be brought into this economic framework, will he ensure that civil servants in that department at all times protect the integrity and independence of the regional councils for arts and for sport, all of which rely heavily upon co-operation with local authorities which must be maintained if we are to provide leisure services for young people in this country?
The Earl of Arran: My Lords, I quite understand the point that the noble Lord makes concerning the Department of National Heritage. It has great
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responsibility not only in London but throughout the whole of the country, both on a cultural and leisure basis.
Lord Williams of Elvel: My Lords, is the noble Earl aware that it is good that he should be responding for the Department of National Heritage? I understood that there was a spokesman for national heritage in this House, but, of course, the noble Earl speaks for the Government, as do all Ministers from the Dispatch Box. Can the noble Earl say what the Department of National Heritage would do for London if it was represented in the new government office? For instance, we have heard about spam fritter parties and walling up the Albert Memorial. Would it really be encouraging the economy of London or the heritage of London? What can the DNH do for London that the Department of the Environment cannot? I am interested in the noble Earl's reply because there may be supplementaries to that question.
The Earl of Arran: My Lords, I have tried to intimate that at the moment we are taking the whole matter carefully forward. As regards what the Department of National Heritage can do for London, I should have thought that it would have had a very great part to play, possibly in the future from the point of view of representation and certainly on a cultural, artistic and leisure basis.
Lord Williams of Elvel: My Lords, I understand that the Government are taking the matter "carefully forward". Indeed, they are doing nothing. That is a euphemism which I think is generally accepted. Which aspects are they taking carefully forward? What are they proposing to do about, for instance, the cultural heritage of London which, as my noble friend explained, is in a shambles as a result of government policies? Is that something that they are taking carefully forward?
The Earl of Arran: My Lords, if the noble Lord, Lord Williams, is trying to suggest that the Government are inactive he is totally incorrect. They are active across all departments. As regards what they might do in London from the point of view of the Department of National Heritage, that will have to be carefully considered, taking into account the most workable, logical, sensible and practical way forward for the Department of National Heritage in London.
Lord Strabolgi: My Lords, is it not important that this should be taken into account in view of the millennium celebrations at the end of this decade?
The Earl of Arran: Yes, my Lords, of course that is being taken into account very carefully, together with other considerations.

Commons Registration (East Sussex) Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Coal Industry Bill
3.7 p.m.
The Minister of State, Department of Trade and Industry (Lord Strathclyde). My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Strathclyde.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES (Lord Ampthill) in the Chair.]
Clause 1 [Establishment of the Coal Authority]:
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 1:
Page 1, line 9, at end insert:

("( ) taking over the liabilities of the Corporation where they are not transferred to other persons or where such transfer ceases to have effect, and in particular liabilities in respect of compensation for industrial injury or industrial disease or arising out of the environmental responsibilities attaching to previous mining activities").

The noble Lord said:
"Huge liabilities for industrial diseases, site pollution and water leakage threaten to derail government plans to privatise the coal industry.
Lawyers of the Mining and Mineral Law Group, who individually represent many of the most likely bidders for British Coal assets, have told government advisers that unquantified costs threaten to deter potential purchasers".
That was what I read in The Times—not a newspaper given to sensationalism—as I worked my way through my humble breakfast this morning.
In moving Amendment No. 1, I wish to speak also to Amendments Nos. 8, 9, 25 and 28. This first group of amendments deals with the issue of liabilities in the future. The Secretary of State has said on a number of occasions that the liabilities of British Coal will pass to the Coal Authority. If I may announce one such utterance as a text, in Standing Committee D on 3rd February 1994 at col. 33 of the official record he said:
"The historic liabilities that are associated with mining and which rest currently with British Coal will be transferred to the Coal Authority".
That is what the Secretary of State said. That is not what the Bill states. We propose that it should be amended to reflect the Minister's assurance.
The Coal Authority is responsible in Clause 1(1) (a) only for matters relating to interests or rights in unworked coal and other property transferred to it or acquired by it. The Bill does not say that all property rights and liabilities will be transferred to the authority. To assume the residual liability for all coal mining activities up to the date on which the industry is reorganised—the restructuring date—there should be specific and clear provision in the Bill.
In practice, as we have all become aware, the Coal Authority is likely to be bypassed by the transfer of all
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existing mines and quarries intended to be worked in the future direct to the private sector or, more probably, to what are to be known as the successor companies. We shall probably return to that matter with a later amendment. If the best prognostications are to be believed, that will probably be at about 10.30 this evening. That will be done through Clause 12 under which the Secretary of State has power to prescribe a restructuring scheme. The shares of those successor companies, each covering one or perhaps more of the five regions, are intended for sale to the private sector. That will be the approach taken for the majority of the industry. Whether there will be separate purchasers for each company is not at all clear. Nor is there any indication as to precisely what property will be transferred to each successor company.
However, unless those transfers are made to the Coal Authority with a direction from the Secretary of State on the terms of the subsequent transfer, the Coal Authority will, so far as I can see, have no interest and no liability in those mines. These will represent the majority of all sites and will expose to risk innocent third parties affected by the consequences of mining. If a contractor goes bust, there is no money to pay the bills and the Coal Authority will have no residual liability except for subsidence.
The Coal Authority will have an important interest in the industry as the licensing body and probably in the leasing of coal, although the freehold of that can be disposed of by the Secretary of State at the restructuring date, or by the authority at any time thereafter. But that does not imply any interest in the property rights or liabilities that are not transferred to it. Specific provision is made for subsidence, but there is none in relation to other liabilities.
There is a further uncertainty in the Bill. Clause 12 refers in subsections (2), (4) and (5) to property rights or liabilities. Where Clauses 1 and 3 address property issues, however, the references are to interests and rights only. There is no reference to liabilities in that context. So strict construction of the Bill suggests that there is an intention to distinguish the issue of liabilities under the restructuring scheme from the residual obligations of the Coal Authority.
Does that mean that the Secretary of State wishes to offload the maximum responsibility for liabilities on to the successor companies? That will probably represent best value for the taxpayer but it might very well frighten off potential bidders as The Times and most other national newspapers have warned us this morning. That would be bad news for the Secretary of State. Alternatively, is this strange confusion just a matter of keeping us guessing and his options open?
But let it be granted that the liabilities that we talk about are not easy to quantify. We can, however, indicate an order of magnitude. Over the past five years British Coal's liabilities for insurance and subsidence costs were over £700 million, the largest liability area being compensation payments to employees for a single category of claim—industrial deafness.
At the onset, British Coal did not consider that any real liability existed. Within months of preparing claims, the National Association of Colliery Overmen,

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Deputies and Shotfirers (hereinafter referred to as NACODS) found that their legal advisers estimated that some £500 million of claims existed. The reason for the scale of the related liabilities was the potential number of claimants. There are in excess of 500,000 coal miners and ex-coal miners. The past 20 years of increased mechanisation, concentrated production systems and greater productivity have yet to feed through as a reason for pneumoconiosis claims. In the past 10 years further increases in production, diesel equipment, use of chemicals and abuses in safety dust checks are indicators of what will be increased liabilities. And to date, British Coal has refused to give estimates of liability costs to the DTI as it considers it inappropriate to estimate the liabilities. So in consultation with solicitors involved in the known cases, using the industrial deafness claims as a database, and a detailed knowledge of each type of category, NACODS has attempted to estimate some of those liabilities. It is impossible to quantify the claims relating to pneumoconiosis accurately. There are now 72,000 claiming benefit. The size of the workforce is over 500,000. Only one thing is clear: the claims will be very extensive.
Secondly, on industrial deafness, the claims procedure is well advanced and solicitors consider that more than half of the claims have been processed. The total cost to British Coal over seven years is in excess of £500 million. Liability outstanding is estimated at a further £400 million.
Thirdly, with regard to chronic bronchitis and emphysema, claims are now being processed through the courts. The DSS anticipates something like 100,000 claims. Many people consider that an underestimate. The estimate of liability is between £1 billion and £2 billion. With regard to vibration white finger, a case is soon to be heard in Newcastle Crown Court. The liability estimate for that category is something between £300 million and £400 million. Similarly with nitrous fumes poisoning, the figure is £300 million to £500 million. With regard to the harmful effects of nitroglycerine, the figure is £200 million. With regard to cancer from diesel fumes and particulates, the liabilities are at an early stage and cannot be estimated but they will be considerable. If we are not careful, industrial asthma is likely to be one of the biggest liabilities of the lot.
It is possible that NACODS' figures are wrong although I think that with its skill and experience they will be of the right order of magnitude. For industrial illness alone, the liabilities at a conservative estimate must be somewhere close to £3 billion, and the journalists this morning were estimating £5 billion.
Let me turn briefly to another category of liability of which we shall hear very much more: land drainage. Let us consider first some of the existing works. Engineers for five drainage boards in Yorkshire are very concerned about the future cost of pumping water from land where subsidence has occurred. Owners of land and houses have settled compensation for subsidence on the basis that such pumping will be maintained.
In the year to 31st March 1993, the cost of running the 31 pumping stations and other costs for the drainage
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system in those same five boards was met by British Coal and amounted to £173,000. For the year to 31st March 1994, the cost will be much higher because of the amount of rainfall. Those costs include nothing for the replacement or refurbishment of the pumps. Those boards can cover 26,908 hectares. Other boards cover an additional 37,120 hectares. In addition, the Ouse and Derwent Board covers 19,801 hectares. One pumping station was built there about two years ago at the cost of £800,000, and the running costs which British Coal currently pays amounted in the same year, to 31st March 1994, to £26,638. British Coal also paid other costs of the board in the same year, mainly for supervising its remedial works. That came to approximately £31,600.
There is a continuing and perpetual liability for the protection of homes and farmland to maintain these pumps. Who is the rightful inheritor of these liabilities, the successor company or the Coal Authority; and why?
The issue of subsidence is too large to consider at this point. There is plenty in the Bill about it and we shall return to it. It is clear from the Bill that the Government are prepared to offer some protection to those with subsidence claims in the event of the insolvency of the operator responsible. There is no such protection for the employees of these companies. For example, a serving worker with 20 years' service could transfer to a private operator. On retirement, he would have a life entitlement to coal. However, if the operator becomes insolvent it would be lost. There must surely be provision to ensure that the Government, through the Coal Authority, will underwrite such liabilities.
This goes far further than the emotive issue of concessionary fuel. Much more important is the area of common law damages for industrial injury and sickness. Who will take on those liabilities? Many of them come. to the fore only after the passage of time, like. pneumoconiosis, vibration white finger, bronchitis, emphysema and industrial deafness. It is almost impossible to say when those industrial illnesses were contracted.
There must be some guarantee that these liabilities, which are potentially huge, will be met in lull. The amendment would clarify what is at present a dubious and inchoate area of the Bill. It would assist potential bidders to know who pays for what and it would relieve the anxieties of a large number of very worried people. I beg to move.
Lord Ezra: I support the amendment moved so effectively by the noble Lord, Lord Morris of Castle Morris. He has introduced an amendment at the start of this important Committee stage which strikes at the root of the Bill. It is the question of liability and how it is to be apportioned. Under the regime which still obtains for the time being under the former National Coal Board, and now British Coal, there was not the slightest doubt where those liabilities lay. We now have a situation of uncertainty.
I wish to start from the assumption that, in putting forward the Bill for consideration by Parliament, the Government have every intention that it should introduce a regime which would enable what remains of the coal industry to be operated effectively. It is from

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that point of view that we must look at the various clauses before us. I very much regret that I feel that the uncertainty over liabilities overshadows that assumption.
The noble Lord, Lord Morris, referred to the items widespread in the press this morning. I happened to see an item in the Financial Times, and it must have been in all the papers, which dealt with the anxieties which the intending purchasers of the mines as now offered under the Bill are experiencing. They are worried. They are uncertain about the extent of the liabilities they would have to carry. They are uncertain about how they would get the acquiescence of their shareholders where they are quoted companies—and most of them are—and how they would get the approval of the Stock Exchange. The simple operation of a transfer of ownership, to which the Government are evidently dedicated, could be impeded by the uncertainty over the apportionment of liabilities.
However, it goes further than that. There is the human aspect to which the noble Lord, Lord Morris, referred, that the people who have served in the industry over many years and those who are still serving will now have grave uncertainties as to how their personal problems will be dealt with. Under the existing regime they have no doubt at all. They might be arguing through the courts possibly as to quantum, but the ultimate liability is clearly stated. We must therefore have something like Amendment No. 1 which clarifies the position.
I believe that the Government are bound to agree to that in the light of what Mr. Eggar said in another place on 3rd February 1994. He referred to all the environmental obligations and liabilities currently falling on British Coal which would be transferred to the Coal Authority. I assume that that means that all liabilities which are currently on British Coal will be transferred to the Coal Authority, with the exception of those specified to go with the sale of the on-going mines.
I ask the Government seriously to consider clarifying this fundamental issue. Until that is done, I very much fear that the process of privatising the mines could be in doubt and the livelihood of the people still working in the industry could be in doubt. I am sure that the Government will agree that that is not the objective of the Bill.
Lord Haslam: I am speaking essentially to Amendment No. 1 and I support what my noble friend Lord Ezra and the noble Lord, Lord Morris, have said so far. There will be a little repetition, for which I apologise, but nevertheless I think that I shall put a slightly different slant on the situation.
The Government's intention is that the restructuring schemes under Part I of the Bill will provide for the transfer to the new private sector employers of liabilities for industrial diseases such as pneumoconiosis, noise-induced hearing loss, vibration white finger and so on suffered by the mine workers transferred to them. That would include liability for damage to those employees caused by exposure to dust, noise and other environmental factors long before the date of transfer.
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That means that the new owners will have to meet the cost of claims by such employees after privatisation but based in whole or in part on pre-privatisation exposures.
The number of industrial employees transferring to the new owners will probably be about 10,000. I think that we should keep that in perspective because it does not involve the high figures quoted by the noble Lord, Lord Morris. They relate to the present employment in British Coal. Nevertheless, the cost in relative terms is likely to be substantial for the new owners and totally unpredictable to quantify in advance. Also, they may eventually be hit with new diseases such as emphysema and chronic bronchitis, both now scheduled as coal mining industrial diseases.
As I indicated in my speech on Second Reading, I am as keen as anyone to see the rump of British Coal privatised, and we hope in a unitary state. Incidentally, that would dramatically have simplified the drafting and content of the Bill. We are in the process of making the best of a bad job, but we are rendering it even more difficult by trying to pass on these unpredictable historical liabilities to the potential new owners. I do not believe that this will be an easy privatisation in any way, and there is no doubt that some interested quality bidders—and I emphasise "quality", as we shall be looking for people who will sustain the industry and not just be in and out—may be frightened off by the liabilities. In any case, any bidders will have to incorporate substantial contingencies in their quote, thus markedly depressing the price at which the business will eventually be sold.
Another concern is that the Government have already decided to lease certain pits which were on a care and maintenance basis following recent closure by British Coal. In such cases all the ex-British Coal miners who are recruited will have had their full redundancy terms and other liabilities settled by British Coal. Hence they will be regarded as new employees in every sense and will have no claims for such historical liabilities on their new employers. The liabilities attached to the pits still to be privatised would therefore be much more onerous. That is hardly the best formula for establishing a level playing field of competition between the two future categories of pits. It is the second good reason why the historical liabilities should become the responsibility of the Coal Authority, or alternatively of the DTI, which I understand may handle common law claims after privatisation.
3.30 p.m.
Baroness White: I am glad to support this amendment, proposed as it is by such experienced sponsors. There are difficulties, to which reference has been made. I hope that the Minister will be able to clarify the situation. For example, there is one small but awkward health liability which is disturbing. What is the position of those miners who have worked in the industry and who contract one of the serious illnesses? Such illnesses take several years to develop. How does one deal with that problem, particularly if their own pits have been closed? Those miners simply do not know where they will stand under privatisation.

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There is a brief reference in the explanatory memorandum of the Bill to the fact that the liability for outstanding industrial diseases, sickness and injury claims will be met by the Secretary of State. But what happens if British Coal is timed to go out of existence before the necessary case hearings have been concluded? Does the Secretary of State foot the bill, or is it to be passed on to the new authority? There are real problems here. I do not want to take up the time of the Committee by going into them in detail. They affect a relatively small number of people, but they are causing a great deal of personal anxiety. We should like to hear clearly from the Minister as to what is the position of people in such situations.
Lord Renton: It may surprise the Committee that I have any reason for intervening at all in this matter. It is many years since I, like other Members of the Committee, had some responsibility for health and safety in coal mines. There were a great many coal mines then. We must be very careful. I am very strongly in favour of the Bill; but I am very anxious that there should not be any legislative vacuum created. The matters mentioned in this group of amendments are very important. We must ensure continuity of policy with regard to them, even though the changes are about to take place. I give as examples the environmental responsibilities mentioned in Amendment No. 1, and the more specialised issues in Amendment No. 8. We shall also have to consider most carefully Amendment No. 9, which talks of meeting,
"all obligations in respect of such damage".
From the legal point of view, I hope that there would be no doubt about that, but I shall be glad to have an assurance.
When we come to Amendment No. 25 I am not quite so certain as to whether all the obligations that are mentioned there can feasibly be carried forward. But it is an expert matter on which my noble friend Lord Strathclyde has no doubt received advice.
As to Amendment No. 28, the last of the amendments grouped with Amendment No. 1, it is highly desirable that the authority should have power to recover the cost of discharging its various liabilities. I shall be interested to hear what my noble friend has to say.
Baroness Turner of Camden: These amendments deal with liabilities for the future. It has been stated by the Secretary of State that the liabilities of British Coal will pass to the Coal Authority. But, as some of my noble friends have said, that is by no means clear in the Bill. Obviously, we must get the matter clarified before the Bill leaves this House.
My objective in supporting these amendments is to try to pin down responsibilities in connection with social matters. My colleagues have dealt with issues such as subsidence costs, and so on. I have always had a particular interest in industrial disease and injuries. It is those aspects that I want to address.
We all know that mining is a hazardous business. Whatever is done—a great deal has been done during the period of public ownership and done, I may say, in conjunction with the workforce and their unions—the industry remains a hazardous one. Every so often an
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accident makes the headlines, but the health and safety of mineworkers are continuously at risk. The industry is incredibly noisy and dirty, not to mention the other hazards. That being so, it is not surprising, as my noble friend Lord Morris said, that the largest area of liability is compensation for industrial deafness. My noble friend said that there are 500,000 coal miners and ex-miners. All of them are at risk of developing deafness due to their working environment, and many have already done so.
Then, of course, there is pneumoconiosis—a miners' disease if ever there was one. Foundry workers suffer from it too, but the greatest number of cases arise in the mining industry. Typically, it affects older miners and former miners, as the dust takes time to build up in the lungs. And build up it does, often to devastating effect.
I understand that a national agreement covers British Coal and licensed mines and extends to coal handling facilities on the surface, including ports. The future of that agreement is unknown. However, there are 72,000 benefit claims outstanding. Chronic bronchitis and emphysema have been mentioned, along with vibration white finger. What is a matter for concern is the levels of those conditions among older miners, many of whom are no longer working in the industry.
Who will take over responsibility for those liabilities? It is not clear that it will be vested in the new Coal Authority. It seems unlikely that the new owners will want to accept responsibility. It is not surprising that the unions are worried. It is not as though the Government's record when it comes to industrial injuries is a very good one. They have already undermined the industrial injuries scheme in a series of Bills, including the Social Security (Incapacity for Work) Bill, which was debated in this House last week. The Government have shown considerable hostility to the legislation that was designed to give support to those who suffer from industrial injury, saying that they see no reason why they should have preferential treatment. Clearly, there is every reason why employees who risk their health and their very lives in an important industry, one that has played an overwhelmingly important role in improving living standards for all of us, should have their right to compensation adequately protected. Their common law rights must be protected as well. Someone will have to pay. It must not be the injured or sick miners and their families. I support the amendment.
Lord Strathclyde: I value the opportunity at this stage of the debate of playing a part and responding on behalf of the Government. Perhaps I can say a word or two at the beginning about this Committee stage and the many amendments with which we are faced. Naturally, some of them provide a very welcome opportunity for the Government to explain and clarify the provisions of the Bill and to explain what it is that we mean by certain clauses. But the purpose of the Bill, as I explained at Second Reading, is to give the very best possible opportunity for the British coal industry to prosper and find new opportunities and to provide a long-term basis for a viable coal industry. Sadly, many of the amendments that we shall discuss over tine course of the next few days do just the opposite. They do not give the

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Coal Authority or the successor companies the necessary freedoms. They tie them up in obligations and regulations which will only lead to the fossilisation of the industry.
In the debate this afternoon I recognise some very real concerns about those who have been working in the industry and those who will remain working in the industry for the successor companies. It is absolutely right that we should have those concerns. I shall explain what it is the Government's intention to do with those liabilities.
Let me begin by explaining how the Government intend to handle each of the liabilities that have been referred to. I shall then comment on the amendments which relate to the responsibilities of the authority. At this stage I apologise for the fact that my words may be lengthy. They will certainly be relatively complicated because we are dealing with technical issues.
First of all, there is the problem of industrial injuries and diseases. I fully recognise that questions about industrial injury and diseases are sensitive and important. We must ensure that claims in respect of industrial health continue to be treated fairly and properly. I believe that the approach that the Government have taken achieves just that.
The essence of that is that the Government would assume responsibility for British Coal's liabilities in respect of former employees. Liabilities in respect of continuing employees will be transferred to successor companies, including liabilities in respect of their period with British Coal. So, former employees would see very little change. Although the Government would assume overall responsibility, we propose that claims administration should carry on as now at British Coal's Pensions and Insurance Centre. I am sure that that is welcomed by many of those who will be affected.
The proposal that liabilities in respect of continuing employees' past service with British Coal should be transferred to successor companies follows normal commercial practice. There is nothing strange in what we suggest. British Coal workers who transfer to private sector firms would be entitled to claim against that employer. However, there has been mention of some of the very serious occupational diseases that occur as a result of a life spent in coal mining. Where a transferred employee would develop pneumoconiosis but was unable to claim damages from the new employer because, for instance, the company has ceased to exist, he would still be able to claim under the Pneumoconiosis, etc. (Workers' Compensation) Act 1979. As many Members of the Committee will know, that is a no fault scheme administered by the Department of Employment to provide compensation in circumstances where the employer responsible has ceased to exist. That also covers many of the other industrial diseases which affect those who work in mines.
Therefore I fully share the concern of Members opposite and indeed of some of my noble friends that we get right the treatment in these areas of legitimate
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concern. But I do not believe that involving the Coal Authority in the way proposed in the amendment is the right way to go about it.
I shall touch briefly on the question of concessionary fuel. We are committed to safeguarding the entitlements of current and former British Coal employees and their dependants. On 17th January, the Minister for Energy announced how we proposed to fulfil that commitment. At privatisation, British Coal's responsibility for meeting the concessionary fuel entitlements of former employees and their dependants will be transferred to the Government. Responsibility for meeting the entitlements of continuing employees will be transferred to successor companies. I think that it is fair and reasonable that successor employers should become responsible for meeting the concessionary fuel entitlements of those transferred to their employ from British Coal.
Likewise, we attach great importance to the protection of the environment. We are determined to ensure that all British Coal's current environmental responsibilities continue to be discharged. My noble friend Lord Renton mentioned a very important word. That word was "continuity". So much of what the Bill is about is to pass on the liabilities that are currently shared by British Coal and to put them either onto the Coal Authority or onto the successor companies. There is no loophole. There are no gaps to plug.
My noble friend Lord Renton specifically mentioned Amendment No. 28. The amendment was spoken to by the noble Lord, Lord Morris. It would give the Coal Authority explicit power to recover any costs that it had incurred in discharging another person's liabilities. That is a very strange concept. We should not involve ourselves in giving the Coal Authority those sorts of powers. I suggest to my noble friend that it is positively undesirable. The authority does not and should not have a locus to discharge another person's liabilities. To give it such a sweeping power would enable it to discharge other persons' liabilities regardless of whether they were relevant to its functions or role. In consequence, the authority should not have the power to recover costs as proposed.
At the beginning of my reply I explained what I felt about many of the amendments with which we are dealing today. Perhaps I should finish with a look at the philosophy behind the way that we created this Bill. It is a very simple Bill, dealing with the transfer of assets of British Coal to the private sector, putting the Coal Authority as the main body looking after that privatisation. We do not attach any new liabilities; we do not extinguish any old liabilities. We very much want to preserve the integrity of the schemes that have helped miners over the course of the past few decades to overcome some of the very real problems that occur in the coal mining industry. I hope that what I have said will satisfy the Committee.
3.45 p.m.
Lord Crickhowell: At the outset I should like to comment briefly on the difficult position in which I find myself on this Bill, as on previous occasions, in trying to interpret the Addington rules. The rules are fairly

531
clear: one can use one's general experience to speak about a debate of this kind. But again, I felt it wrong to table any amendments or perhaps even vote on amendments because they might be thought to be NRA amendments. The job of the NRA is to make its advice clear to the Government, the Chamber and the public at large. But having given its advice, it is then the responsibility of the Government to act. I try to draw that dividing line.
Therefore, I hope that it is not thought to be out of order for me to speak to some of the amendments. As I said, I have not tabled them on behalf of the NRA. It would have been rather absurd not to speak, bearing in mind that the NRA has given evidence to a number of Select Committees, has given advice to government and has recently published a study on the whole subject and commented about it outside the Chamber. I, of course, spoke at Second Reading.
I deliberately waited for my noble friend to speak from the Front Bench because I hoped that he would give some useful guidance to help remove some of the anxieties that I feel. Indeed, he certainly offered me comfort on some of the matters about which he spoke. I shall want to study what he said, but so far as concerns industrial injuries, pneumoconiosis and so on, I feel that what he said was helpful.
I am bound to say that I was surprised that his remarks about the environment were so brief. He told us that he would speak at length and that his explanation would be rather complicated. What he said was that there was no loophole because the liabilities would pass to either the Coal Authority or the licensees. But he failed to address the legitimate points made by the noble Lord, Lord Morris of Castle Morris, when he opened the debate, about the scale of the liabilities and the possibility that the licensees would be unable to meet them.
There can be no doubt at all that the liabilities could be very large indeed. We heard about the subsidence liabilities. I spoke about them at Second Reading. I received a letter from the regional Flood Defence Committee of the National Rivers Authority in Yorkshire expressing its grave concern about this very issue. That advisory committee—I should not say advisory committee; the Flood Defence Committee plays an executive role—has perhaps as much knowledge as any organisation of the scale of subsidence, its effects and costs. I pointed out at Second Reading that as the land sinks the National Rivers Authority must continue to build up the flood defence banks and that will go on for many years.
There are all kinds of other subsidence liabilities about which I am not qualified to speak; the trouble is that they are unquantifiable. But when we turn to other liabilities they are equally difficult to quantify and may be very large. We have before us, painfully, the example in another industry of the Wheal Jane tin mine in Cornwall, where a number of interconnected mines finally burst out when pumping was switched off by the final operators. A major pollution incident occurred of which so far, simply on research and development and setting up a pilot plant, the NRA is spending around£8
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million of public money. That is only the start. We are looking for a long-term solution and no doubt expenditure will run on in that one case for many years.
There is no doubt also that the potential costs of pollution arising in the Durham coalfield, to give just one example, are very great because of the geological conditions that exist there and the likelihood that there will be pollution in the weir. I do not know how great those liabilities may be. I am concerned about whether any organisation that is licensed will possess the ongoing resources to meet such unquantifiable liabilities. I can speak with some experience because for a time—a relatively brief time—I was a director of a mining company which is likely to be seeking licences when the bidding begins. I know that any company of that kind would find it difficult to create the capital base that would provide us with the assurance that we require.
I am equally dubious whether it will be possible to obtain insurance cover or bonding protection in the market. As a loss-making underwriting member of Lloyd's I hope that the insurance market will approach the problem with a greater degree of prudence than it did environmental liabilities on the other side of the Atlantic. I hope, too, that those who are applying for licences will approach the matter with equal prudence. The reports that we read about in the press today suggest that they will. Therefore, I am raising this issue not only because I am concerned about the environment and the responsibilities of the organisation of which I am chairman, but also because, like my noble friend Lord Renton, I want the Bill to succeed. I am an unashamed advocate of privatisation and I have grave doubts that, if there is no clarity about the matter, we shall be able to have a successful privatisation.
Of course we will have the opportunity to explore some of the complexities later on in other amendments. But the more I look at the documents published—for example, the details published by N.M. Rothschild and Her Majesty's Government entitled Sale of the Coalmining Activities of British Coal Corporation— and read the guidance issued about the interaction agreements, the more concerned and confused I become. Regional coal companies will be possibly bidding for or taking over the regions, but within those regions will be individual collieries—perhaps those on care and maintenance at the moment. There is a need therefore to set up licensing arrangements to deal with the potentially horrendously complex questions of liabilities between different mines in the same area. They may be mines that have operated over hundreds of years; mines at different levels, one on top of the other; mines in which there will be flows from one to the other with potential for substantial damages.
Ministers have spoken outside this House of the possibility of seeking to clarify the position by drawing clear lines on the ground and carrying the liabilities down a kind of cylinder below, but that does not help me much either. We all know that a mine face may he miles from the shaft. Is the line on the surface to extend right out to where the shaft may be? As I observed earlier, there may have been successive mining operations at successive levels in that shaft. There may already be

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damage taking place at one level from which, in due course, liabilities will flow, caused by the actions of British Coal or earlier miners. Can it be right that, as a consequence of a privatisation Bill, the liabilities incurred by British Coal and therefore underwritten effectively by the state, should be passed on to companies that may not possess the resources to meet them, particularly when those liabilities may have been incurred a long time ago and be no fault of the companies taking on the task in the future?
I am bound to say that I am extremely unhappy about that prospect. I have probably said enough. I hope that it will be possible to clarify those issues. At the end of the day it must be possible for us to look to the coal authority to underwrite any gap. I am concerned that we shall fall into a void, through no fault of individual organisations but because they simply will not be in a position to provide the cover that may be required.
I understand when my noble friend is hesitant about trying to underwrite the liabilities of successive companies. He criticised some remarks made by my noble friend Lord Renton on this particular issue—I should say that he commented on some remarks; he would not dare to criticise my noble friend Lord Renton. He commented adversely on a suggestion made about the liabilities being passed back to British Coal or the costs being recovered. I understand that we do not want to be in a position where we cause future operating companies to think that they can disclaim their liabilities and therefore act irresponsibly. We therefore need a clear line drawn between the future activities and any past activities. It is because I am not yet convinced that that line exists and because I am not certain that we can leave it entirely to the operating agreements to settle it without some further reassurance before Parliament, that I am speaking this afternoon. I hope that as the Bill proceeds the Government will be able to give me the assurance that I need.
Lord Callaghan of Cardiff: I rise to ask a question but in doing so perhaps I may say that in an odd way, as I listened to the noble Lord, Lord Crickhowell, I caught some echoes of the debates that we had in 1945 when we were using those arguments in favour of nationalisation of the coal mines. But that is not my purpose in rising. I ask the question for information.
I understood the Minister to say that it is the Government's wish that those employees who will work in private mining companies, but who then incur injuries that arise out of their employment while under British Coal, or those employees who work in private companies outside the coal industry but who then incur injuries which arise as a result of their role in British Coal, should be treated in exactly the same way as those who are now with British Coal and will remain with it. If that is so, is it not highly doubtful that they will be able to secure the same level of compensation? If I am right, and it will be difficult, how do the Government propose to ensure that the two types of employee are treated in exactly the same way?
4 p.m.
Lord Renton: Following up what my noble friend Lord Crickhowell said, I wonder whether my noble friend the Minister would be good enough to say something about past and indeed existing liabilities and those which may be incurred in the future. The best illustration of what could happen is in Clause 1(1) (c), where we find a reference to,
"carrying out functions with respect to coal-mining subsidence and in connection with other matters incidental to the carrying on of any opencast or other coal-mining operations".
My noble friend Lord Strathclyde—and I was very grateful for the clarification he gave—was anxious to stress that the Government do not intend to extinguish old liabilities. Can he therefore please confirm that this responsibility for carrying out functions with respect to coal mining subsidence relates to the hundreds of examples, some of which have not yet been noticed, of coal mining subsidence which have taken place over many generations as well as coal mining subsidence that may occur in future?
It is vitally important that we should know that the Bill covers both, but I am not at all sure, looking at the drafting of it. It may be that there is a provision in the Bill which has escaped me, or the significance of which I have not understood, which makes it quite plain that, for example, the reference in Clause 1(1) to coal mining subsidence is a reference to liabilities that have already arisen with regard to coal mining subsidence which has already taken place, liabilities which could arise in relation to coal mining subsidence which has already taken place but has not yet come to light, and any future subsidence that might arise from future coal mining operations.
Lord Sanderson of Bowden: I did not intend to intervene on this amendment, but on the general point that I raised at Second Reading, insurance will be a key to the success or failure of this privatisation. I do not want to see the fossilisation of the fossil fuel industry by any means, but I have to say—I declared an interest at Second Reading so I will not do so again—that I am very concerned that the price that is offered by those who wish to take the licences for the various areas of the coal industry in the United Kingdom could be seriously jeopardised unless some of these matters are cleared up, as my noble friend Lord Crickhowell said, at an early stage. The whole question of how to quantify that insurance risk is very real, given the fact that the Government never insure anything. One reads in the Financial Times today that certain people who wish the success of the privatised coal industry are extremely worried as to what price they can put on that industry.
Lord Strathclyde: As my noble friend Lord Crickhowell has made what I thought was a very useful and interesting speech, perhaps I may have the opportunity to respond to it. We are in Committee, which means that we can get up and down as many times as we like. Because some of these issues are quite complicated it may be easier to deal with them as they arise rather than losing the thread of them. I very much welcome the words that have just been said. I am particularly pleased that the noble Lord, Lord

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Callaghan, has spoken. It shows the great beauty of this House that we can have the historical perspective from those who were involved in 1945 and can raise with us the arguments that were brought forward at that time.
What my noble friends Lord Crickhowell and Lord Sanderson said about the private sector taking on these liabilities is very important. There are two ways of looking at this. As my noble friend Lord Sanderson announced, he is a potential bidder. The reports in the newspapers that we read this morning indicate that many private bidders will not be seeking to bid if they think that the liabilities will be too great. That is entirely a correct decision for them to make as members of the private sector who will decide the risk which they are willing to take before they make a bid and will presumably adjust the price in relation to the bids that they will make.
When I responded adversely to my noble friend Lord Renton, what I did not want to see was a situation whereby the Coal Authority had a power to put right certain things which it believed had gone wrong with the private sector and then to charge the private sector for doing so. I cannot see any private sector bidder taking on the remnants of the coal industry on that basis. That is what I was dealing with then.
My noble friend Lord Crickhowell charged me with not going far enough in my opening words. I stand guilty of that. He is absolutely right. I did not. I had much more to say but I felt that the debate needed to be taken forward before I did so.
Perhaps I may turn to the question of subsidence. Clause 2(1) (c) imposes a strong duty on the Coal Authority to secure so far as practicable that licensees make proper provision for subsidence liabilities. The Government recognise that the right to withdraw support which will be conferred on mining companies is altogether exceptional and the regime for protecting those affected by subsidence must be strong. The duty will lead to rigorous supervision and licensees will have to supply regular and detailed estimates of their subsidence liabilities in a form satisfactory to the Coal Authority. This regular monitoring is necessary because subsidence liabilities can generally be. predicted. Indeed, no business would conduct its mining except on the basis of confidence about its ability to meet future liabilities. It is not possible to achieve absolute certainty.
Where necessary the authority will require operators to make special financial security arrangements and the Bill provides that these arrangements can be set up so as to ensure that this security is effectively ring-fenced for the protection of subsidence claimants. The monitoring arrangements will mean that the Coal Authority is well placed to adjust the security requirement or impose one as soon as it appears necessary. Amendment No. 9 would strengthen the duty so that the Coal Authority must seek to ensure that all conceivable claims, however unlikely, are met. It seems to me that this may lead the authority to require financial security well in excess of any reasonable estimate of the liabilities. The requirement for security would be an onerous burden. In my view we should need the strongest justification to add to this burden by requiring security well beyond any
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reasonable estimate of the liabilities. The coal industry faces enough challenges already without being put under that additional strain.
When my noble friend Lord Crickhowell talked about the cylinder approach to privatisation, he was absolutely right. Lines will be drawn on the ground and the liability will be accepted in a cylindrical approach to that. My noble friend asked about the shaft that goes beyond the cylinder. My noble friend will not be allowed to mine beyond the cylinder because he will not have bought the right to mine coal beyond the line, and therefore that situation will not arise.
Perhaps I may now turn to the very important question of water pollution responsibilities. Before I do so I shall answer the substantive point raised by the noble Lord, Lord Callaghan. I may not have explained it sufficiently well. Perhaps I may now do so briefly. For former employees of British Coal, their liability will fall to the Government. For current employees of British Coal who are then taken on by the private sector, the whole of the liabilities will be taken on by the successor companies. That is normal commercial practice, as understand it, when one company takes over the employees of another. I hope that that deals with the point.
Lord Callaghan of Cardiff: Perhaps I did not make myself clear. May I have another go? Can the Minister assure me that those employees whose disease arises after they have left the authority of British Coal will be treated as well as those whose injuries arose during the course of their employment with British Coal and which have already been dealt with?
Lord Strathclyde: Yes, that is undoubtedly the case. Where an employee has left the employment of British Coal and is perfectly healthy but years later discovers that he has a disease which was caused during his time at British Coal, that liability will be taken up by the Government.
Lord Barnett: I am sorry to intervene, but I am not sure that the Minister is right. He says that in certain circumstances the responsibility goes to the successor company. If that is the case and the successor company has miscalculated its bid and eventually goes bust, perhaps in a very short space of time, who is then responsible?
Lord Strathclyde: Where an employee was formerly employed by British Coal and ends up working for no one or is retired, the liability will fall entirely on the Government. Where an employee has worked for British Coal and is taken on by a new private sector company, then all the liability will fall on the successor company. Where that company has gone bankrupt and the injury has been caused by mining, pneumoconiosis and so on, it will fall under the terms of that particular Act, as I explained in my initial reply.
Lord Richard: It is Committee stage and therefore all sorts of strange people can intervene. I hope the Minister will forgive me. Does that situation apply even if the causes of the disease were incurred—as pneumoconiosis may well have been—during his

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employment with British Coal when he was underground? If he then joins a successor company and is given a surface job where he will not be subject to the perils of pneumoconiosis, does the successor company have to take responsibility for the exposure even when the employee was employed by British Coal?
Lord Strathclyde: Yes. When a successor company takes on an employee from British Coal it accepts all the liabilities that go with it.
Lord Haslam: We are back on my second point. The Minister for Energy has said that he anticipates that 32 pits will survive, but that I very much doubt. Sixteen of those pits are in British Coal at the present time and the other 16, if they arise, will be leased. Those leased pits will take on former British Coal employees who have been totally discharged. Is the Minister saying that if they join these companies they will be treated precisely the same way as the employees who have been transferred? I do not believe that that is the world's understanding of the situation. In fact, people like Malcolm Edwards have said that they will not take on pits in a privatised form because the terms are too onerous compared with the ones which they already have. I do not understand my noble friend's statement against that background.
Lord Strathclyde: I am not entirely certain of the situation as regards workers on a care and maintenance contract. I thought that I was being absolutely clear on this point, but I may have inadvertently muddied the waters. It is a very simple concept that a new private sector company taking on a former British Coal employee will take on all the liabilities. As to any former employee of British Coal who does not go into a successor company, his liability will be taken up by the Government. I think I am now clear on that point.
Lord Callaghan of Cardiff: I thank the Minister very much. As far as I am concerned he has cleared the point. I do not believe that he has muddied the issue at all. There will be the same equal treatment for employees who have left British Coal and who are taken on by a private mining company and for those who have already incurred their injury or pneumoconiosis, which was particularly bad in South Wales. So the compensation will be the same. The fact of the transfer to a private company will not affect the man's compensation. That is as I understood the position. I am very grateful to the Minister for giving me that assurance.
Lord Haslam: It is not a question of compensation but who pays it. The fact is that a person who has left British Coal and who is re-employed, particularly by pits which have been leased, will have no call thereafter. That person has left British Coal having been compensated and having received his redundancy payments. Therefore he has no call on the new employer. That is the point I was making about competition. There could theoretically be 16 pits in this country leased to new employers with no accountability for historical liabilities whereas the other 16 pits which
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have been sold as part of privatisation will have those liabilities attached to them. That is the point I am making. I am saying that that sets up immediately a false competitive situation. People like Malcolm Edwards have already realised that factor.
4.15 p.m.
Lord Strathclyde: It is not a question of false competition. If a successor company wishes to take on working miners from British Coal—and presumably that company wishes to do so because they are the people with the skills, experience and knowledge—then it takes on the liabilities as well. I do not believe that there is anything unfair about it. One of the points raised earlier was the supposition that the successor company goes bankrupt and ceases to exist. Then the liability will fall under the new pneumoconiosis Act.
Lord Cledwyn of Penrhos: If the successor company becomes bankrupt by mischance, who then takes the responsibility?
Lord Strathclyde: I had hoped that that was the point I have just mentioned. Because in the mining industry there are problems of long-term illnesses, particularly as regards the chest, skin diseases and so forth, then under the terms of the pneumoconiosis Act liability is picked up by the Government. What that means in practice is that no working miner can end up with no cover because ultimately the Government will pick up that liability.
Lord Ezra: There is still the issue raised by the noble Lord, Lord Haslam; namely; whether there is a difference in the terms as regards liability for pits which have been leased by British Coal compared with those which are likely to be licensed by the Coal Authority. That is a very important issue and we need to know the answer to it.
Lord Strathclyde: It depends who employs an employee. If it is British Coal then it will ultimately be responsible whether the pit is leased or licensed. Where it is a successor company then it will be the successor company. Perhaps I am misunderstanding the point, but I do not believe I am. In my mind the matter is relatively clear, but I feel that the more we discuss it it becomes increasingly more difficult to understand. I have done my best to make the situation clear.
Perhaps the most helpful way in which I can take the matter forward is to write a letter to the noble Lord, Lord Morris of Castle Morris, who raised the matter in his amendment in the first place. I shall put a copy of that letter in the Library. Perhaps the noble Lord and myself can bring it to the attention of those Members of the Committee who have an interest in the matter. I shall lay out the liabilities vis-à-vis the workers' allowances in the event of illness. I shall make it clear so there is no confusion in order that we can go on to future stages of the Bill without any confusion. I hope that that will be helpful.
Lord Crickhowell: Before my noble friend was diverted to pneumoconiosis he said that he was going to talk about water pollution. What I have to say follows

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very neatly on that. I wish to make a point which I hope my noble friend will think about even after he has replied because I am sure we shall have to return to it. My noble friend made an extremely interesting statement. He said that in the event of bankruptcy or the failure of a company, as regards pneumoconiosis there is a fallback on the Government under the 1979 Act. It is precisely because there is no such fallback at present for water pollution or any other form of pollution, that some of us are so very concerned.
The fact is that someone seeking to license a pit may be seeking to do so for only a relatively short time. There may be only a limited amount of coal and he will bid accordingly. He may get landed with a pollution liability that arose, without his being fully aware of it, long before. It is exactly the problem that we had at Wheal Jane, the tin mine, where the last operator, in difficult financial circumstances—indeed, about to go bust because the DTI had withdrawn its grant—stopped pumping. The pollution that occurred was largely because that pit was connected with over 40 other pits, some of which had been mined hundreds of years previously, in an area where mining dates back to the Phoenicians. That is the complexity with which we are dealing.
At the moment we have the protection that British Coal is responsible for its own liabilities and for any actions that it may have taken. As I understand it, some of those British Coal liabilities are now being passed off to future licensees who may not have the resources. Unlike the pneumoconiosis situation, as the Bill is drafted we have no comeback on the Coal Authority and the Government. I think that that is what the amendment seeks to provide. Other amendments that we shall debate later have the same objective.
Lord Strathclyde: Although my noble friend puts his case extremely well, I think that there is a difference between the point that he raises and the subject we were considering earlier. Parliament has already decided the pneumoconiosis case. We are still in discussion on the question of water pollution liabilities. It is no less important an issue—in fact, it is a very important issue —but I do not want Members of the Committee to go away with the feeling that somehow the taxpayer should underwrite the ability of the private sector to take over British Coal's assets. I do not think that in the long term that will suit anybody.
I said a few moments ago that I would deal with the very important matter of water pollution responsibilities and, with the leave of the Committee, I should now like to do so because it is an issue which has given rise to a great deal of concern, and I hope that it will be helpful at this stage for me to explain our latest thinking on how these responsibilities will be handled after privatisation. We do, of course, understand the concerns about the threat of pollution related to mine closures and the related concerns about the legal framework applicable to abandoned mines. I think there is something I can say this afternoon which should be of material reassurance on the actual problems of pollution and the potential risks of future pollution. Before doing so, however, perhaps I should set out the existing legal framework.
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As many of your Lordships will be aware, it is an offence under the Water Resources Act 1991 (or in Scotland under the Control of Pollution Act 1974) to cause any polluting substance to be discharged into any watercourse—strictly into controlled waters—or knowingly to permit any such discharge. But there is an exemption in respect of discharges which are permitted to occur from any abandoned mine. Even if such a discharge results in pollution of a watercourse, no statutory offence has been committed; and if the NRA in England and Wales, or any river purification authority in Scotland, should act to put right any such pollution, they cannot recover their costs from any person. For completeness, I should mention that, even for abandoned mines, there is no exemption in circumstances in which the discharge is "caused" rather than "permitted"; and that, if any pollution results from a discharge from an abandoned mine, the owner or, if there is one, the operator, may also have a civil liability to any person whose interests are thereby harmed. Nevertheless, there is an exemption from the statutory pollution offence defined by the Water Resources Act in respect of discharges from abandoned mines where these are "permitted" rather than "caused".
The Government indicated in the White Paper This Common Inheritance, The Second Year Report that they were considering the framework of legal responsibility for pollution relating to abandoned mines; and a consultation paper on the review of contaminated land and liabilities published in March of this year, Paying for Our Past, outlines the exemptions and invites views on what should be done about them. A similar consultation is in hand in Scotland. As foreshadowed in this House by my noble friend Lord Crickhowell, the National Rivers Authority published on 14th April a report on abandoned mines and the water environment. I should add that I very much welcome the fact that my noble friend is taking part in this debate because as chairman of the NRA he brings a useful knowledge and focus to our deliberations.
That important and useful report covers the nature of minewater discharges and the scale of the problems related to abandoned mines, both as regards coal mines and metal mines. It puts the problems in perspective and sets out the NRA's views on the way ahead. It will clearly be studied with great interest by all who are involved in these issues. I am sure that it will provide an important contribution to the Government's review of the legal framework. My honourable friend Mr. Robert Atkins has indicated that he expects the overall review on all the issues related to contaminated land and liabilities to be concluded later this year. I think that this represents good progress given the complexity of the issues. I am sure that it will be followed with interest by many of your Lordships.
There are many difficult issues which arise in connection with these exemptions. In particular, careful consideration has to be given to the possible impact, if the exemptions were to be removed or amended, on landowners who may happen to have long-abandoned mines on their land and to the issue of retrospection generally. The same issues, of course, are also of concern in the broader context of contaminated land and

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liabilities. I have no doubt that it is right that these issues should be very carefully considered and that it would not be sensible to seek to consider the exemptions in isolation from the broader issues. I do not think, therefore, that it would be right to deal with the substantial parts of the exemptions through this Bill.
However, I recognise the concerns which arise about the threat of water pollution from coal mines and about the effects of privatisation. What I think I can do at this point is to provide, on an interim basis pending the outcome of the review of the legal framework, some further assurance on how the Government intend that these matters should be dealt with after the restructuring and privatisation. I emphasise that this is strictly an interim step and that it will not prejudice the review. It will not prevent new responsibilities being imposed later if we conclude that it is right to do so. But it should provide an important measure of reassurance in the meantime for those affected by the threat of potential pollution related to mine closures.
The Coal Authority will, of course, be the owner of abandoned coal mines throughout Great Britain, irrespective of when these may have been worked. The Government have set out in the Coal Authority explanatory note that they envisage that the authority would set itself certain broad policy aims in respect of the management of property, including all the mines which are not licensed to the private sector. These include the aim, where reasonably practicable, of protecting and enhancing the environment. I should like there to be no doubt that so far as water pollution or potential water pollution is concerned the Government will not be content for the authority to rest on the present effect of the exemptions. On the contrary, we will expect it to go beyond the minimum standards of environmental responsibility which are set by its legal duties in these areas and to seek the best environmental result which can be secured from the use of the resources available to it for these purposes.
The authority will naturally have to set priorities for its activities in these areas. We will expect it to do this in consultation with the NRA and the appropriate river purification boards. Further discussions are going on between the relevant departments on the right framework and on the resources which can be made available. For the moment, I should like to make just two points.
As to priorities, I think that there must be widespread agreement that the first priority should be to prevent serious new problems from arising. I note that this is, for example, the approach adopted by the NRA in the proposals set out in its report. A high priority should attach to tackling situations such as that in Durham. There, on the best advice at present available, it seems that continued pumping is required to prevent a serious pollution incident; or at all events to give assurance that such an incident can be avoided. Whatever else might come out of the consideration of priorities, I am certain that it must include a commitment to maintain pumping there for so long as it is needed in order to prevent the
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risk of serious pollution; and there may be other cases elsewhere where pumping should likewise be maintained.
We do of course expect that the Coal Authority should seek to meet its commitments in the most cost-effective way. Often, the most cost-effective approach to a threat of water pollution will be by passive treatment. Where the Coal Authority can convince the regulatory body that such techniques are acceptable, it will be freeing resources which can be applied to dealing with the inheritance of the past—that is, pollution which has already occurred—and it will be able to take positive steps to address such environmental problems. That leads me to the second point, the resources which can be made available. The authority will of course discharge all its legal obligations, and its funding will have to provide for that. But, in so far as it has any discretion as to its spending, noble Lords on all sides will recognise that its resources will necessarily be limited. However, I can assure the Committee that it will in due course have a specific budget earmarked for these purposes and that this will enable it to carry forward in full the role and activities of British Coal in this area.
To complete the picture, I should say a word about private sector operators under Coal Authority licences. Operational mines will, of course, be subject to the normal statutory requirements. In particular, all discharges to watercourses will require the consent of the relevant regulatory body, either the NRA or a river purification board. The freehold of the underground mine will remain with the Coal Authority, but the lease will make clear that all costs of meeting regulatory requirements, including requirements for the protection of the water environment, will fall on the operators and not the authority. In time, however, some mines will reach the end of their economic lives and the operators will wish to terminate their leases. It will clearly be necessary for the operator to consult the appropriate regulatory body about the possible consequences for the water environment of abandoning the mine. Before agreeing to termination of the lease, the authority will expect him to institute any reasonable treatment measures and to make an appropriate payment for any continuing costs. Once the lease has come to an end the authority will be responsible for the mine as for any other abandoned coal mine.
I hope that my statement provides a positive assurance that, at the least, what British Coal already does in these areas will be maintained. To the extent that the higher-priority objectives relating to prevention of new pollution can in time be met more economically, there will be scope to seek actual environmental improvements. I repeat that these interim measures will not prejudice any new legal responsibilities which may fall on the Coal Authority as a result of the current review. What they will do in the meantime is ensure that privatisation does not exacerbate the situation in any way. I hope that this information has been helpful.
4.30 p.m.
Lord Peston: I intervene largely with a view to trying to be as helpful as I can to the Minister. We seem to have ranged over almost every single topic that could be debated on the Bill already. There are quite a few other amendments which cover topics already dealt with; I hope that Members of the Committee—I shall try to do so myself—will refrain from putting up similar speeches for a second or a third time.
Unlike noble Lords opposite, I do not care for the Bill. What we have in common, however, is the desire, given that we are going to have the Bill, that it should be a workable Bill rather than an unworkable one. That is really what we are about in this Chamber. The Minister, I know, has done the best he can. The text I would start from is the one referred to by the noble Lord, Lord Ezra: that is, the remarks made by the Minister for Energy, Mr. Eggar, on 3rd February at col. 30 in Standing Committee D when he said that all British Coal's obligations will be those of the Coal Authority. That is what he said. I ask: where in the Bill does that appear? As Mr. Eggar tells it, the Bill makes it absolutely clear. I invite the Committee to look at the precise words in Clause 7 (3). He goes on to talk about the environment, which is not quite the same. The key word in Mr. Eggar's statement is that "all" British Coal's obligations will be those of the Coal Authority.
I think it would satisfy the Committee in the first instance if the noble Lord the Minister were to respond by agreeing that that is the Government's policy. Then, although it may be absolutely clear to brilliant people like Mr. Eggar but does not seem to be absolutely clear to the rest of us, I hope the Government would come back with an amendment that simply amends Clause 7(3) so as to include the statement that all British Coal's obligations will be those of the Coal Authority. One could then proceed to discover whether any of those obligations get passed over to the licensee, depending on how the licence is drawn up and things of that sort. I hope that the Minister—I do not say this with any lack of generosity of spirit, because he has dealt with all sorts of detailed matters which perhaps he would have preferred to deal with later—will agree to think about it. It cannot be absolutely clear if a number of Members of the Committee do not see it as being clear. Therefore there is the danger that the Bill will fail in terms of its objectives because people will not want to buy the leases. I believe it would help us, and certainly it would help me, if the Minister would simply get up and say that he realises there is a good point being made here which is not dealt with simply by making statements but could be dealt with by amending the Bill.
I take it that the Minister has no objection in principle to amending the Bill, because he has one or two amendments of his own to put forward. Therefore I would ask him whether he is willing to say now, without any commitment, that he has listened to what we have said; that he appreciates there are certain difficulties here:, that it is not absolutely clear what Clause 7(3), or any other part of the Bill, says; and that he is willing to
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go away and at least consider whether a more definite statement on obligations can be incorporated in the Bill. That is my attempt to help the Minister.
Lord Strathclyde: Perhaps I can briefly deal with that point. The noble Lord, Lord Peston, is very seductive in these matters. He starts off by saying that he does not wish the Bill well but that he wants to make it work. I dispute that, with respect, because I do not think that the noble Lord wants to make the Bill work. He wants to make it unmanageable because he does not wish to see the coal industry privatised. He wants to see it remain very much under the control of civil servants and indeed government Ministers and, hopefully, under British Coal. Anything that the noble Lord can do to make that more likely to happen, the noble Lord will do.
Lord Peston: I am sorry to intervene. The noble Lord says that I do not like the Bill. I find it a rather peculiar Bill in some ways. But if the Government say something which they also say is government policy, and if noble Lords cannot see that in the Bill, there is a minimal requirement here. The noble Lord has got me worried. I had not thought for a moment that incorporating what Mr. Eggar said was policy would sabotage the Bill. The Minister cheers me up a bit if it will undermine the Bill. I had not seen that at all. I had seen it more or less in the terms of his noble friends. If something like that is not in the Bill, then no one but an idiot will bid for a coal lease, because they would be buying a pig in a poke. I have other amendments which will undermine the Bill, I can tell the noble Lord. This one simply says that the Government should take seriously what Mr. Eggar has put forward.
Lord Strathclyde: I knew I should not have given way. The noble Lord seeks to create a difference between the Minister for Energy and myself; and there is absolutely none. I have nothing against amending the Bill and clarifying it where necessary. but I do not believe in amendments for the sake of amendments or in seeking clarification where none is necessary. Clause 7(3) makes it absolutely clear that all British Coal's interests in coal and coal mines, including all historic and disused mines, will pass to the Coal Authority. This means that obligations falling on the owner of the mines will pass automatically—
Lord Callaghan of Cardiff: Will the noble Lord give way? Do the coal and coal mines referred to in subsection (3) also include coal miners?
Lord Strathclyde: Not coal miners, because, of course, British Coal does not own coal miners. All these assets will pass automatically to the authority on the restructuring date. So far as disused mines are concerned, no matter how long ago they may have been worked, the obligations will stay with the authority. The obligations that relate to working mines will generally be passed to the mining companies. The detailed arrangements for achieving that are spelt out in the draft leases which are available in the Printed Paper Office. Noble Lords can look at them and I know that the noble Lord, Lord Peston, has already done so.
Lord Callaghan of Cardiff: The Coal Authority or British Coal have responsibilities and potential liabilities in respect of coal miners. Does this clause include those liabilities and those responsibilities?
Lord Strathclyde: The whole clause deals with exploitation rights. It does not deal with people; they are dealt with in other parts of the Bill. I explained the position earlier but I cannot point to the relevant parts at the moment. The point is that the liabilities of individuals, which are currently British Coal's, will be taken up by the Coal Authority, the successor companies or, indeed, by the Government.
Lord Morris of Castle Morris: We have had a brisk and breezy debate. No one can say that it was not wide-ranging. I listened most carefully to what the Minister said. At the beginning he said that what he would have to say would be lengthy. It was not—at first. He said that it would be complicated, and in the beginning it was not complicated at all. I was following him quite well and easily, but once he sat down that was the end of that.
The noble Lord, Lord Ezra, in his experienced wisdom, pointed straight away to the absolute heart of this matter: uncertainty. Uncertainty in this area of the Bill surely endangers the entire privatisation procedure. I join with my noble friend Lord Peston in saying that I wish that this Bill was not here; I wish that the privatisation was not to happen. But as I said on Second Reading, this wretched Bill will not go away. What we must do at this stage is to try to make it at least a better Bill and a clearer Bill than it is at present. No bidder will appreciate being asked to put in a price for a pig in a poke. Surely it is as much in the Government's interest as in everyone else's to try to clarify the position once and for all.
The uncertainty and the lack of clarity are facts. Many of us have struggled with the language of this Bill for week after week. We cannot give the answers, which is why we ask the questions. Lawyers who have been retained and are advising many of the most likely bidders, as we learnt from the newspaper this morning, are no further forward than we are. Public companies, they warn us, will be unable to bid unless they can make any offer conditional upon shareholder approval. Uncertainties over these liabilities may make it either impossible or very expensive indeed for a purchaser to obtain insurance. Questions keep on coming to me from all sides, even while the Minister is on his feet. How will companies treat all these contingent liabilities in their accounts? Can they remain viable or will the allocations to reserves drain their reserves and weaken their capital base and so destroy them?
Will the Minister not realise that many of us are quite seriously concerned about these uncertainties? Will he not agree to take away what he has heard from all sides of the Committee about what we would like assurances on? A letter setting out a child's guide to the liabilities in this Bill might be a very good start. But will he not accept our continued and deep bafflement about many of these issues? Will he, and I plead with him, agree to read carefully what we have all said—perhaps some of us at too great a speed properly to be understood—and when
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he has read it come back at a later stage with clearer explanations and perhaps, without commitment, some amendments of his own which will deal with some of our concerns? We should indeed be most grateful if he would.
At this early stage I do not want to divide the Committee on an issue as wide-ranging and as deep as this. If the Minister can assure us that he will take these issues away, consider them and come back with some answers and suggestions at a later stage I shall be most grateful to him.
4.45 p.m.
Lord Strathclyde: I am delighted that the noble Lord is not minded to divide on the amendment. It is a long amendment which deals with all the important issues that we have discussed today. As far as concerns the Government, the question of where the liabilities lie is absolutely clear. Noble Lords opposite may disagree on where the liabilities should lie. Indeed, one or two of my noble friends may disagree on where they lie. However, there should not be any disagreement on where they lie.
The noble Lord, Lord Callaghan, asked me a question about where the people end up in all of this and I did not answer him. I refer him to pages 76 and 77, which deal with the Transfer of Undertakings (Protection of Employment) Regulations, otherwise known as TUPE, which govern the issue. I should have had that to hand earlier.
The noble Lord, Lord Morris, then made another kind offer and asked whether I would read carefully all that has been said. Of course I shall. I make him an offer at the same time to read carefully what I have said, in particular my statement on water undertakings and my explanation of industrial disease and subsidence. I believe that I covered a great deal of the ground.
There may be room for improvement or clarification and I do not set my face against that. However, I have no commitment to bringing forward any amendments and I have not been convinced by the case that I have heard so far. Naturally, I shall continue to look carefully at where we can improve the Bill.
Lord Peston: Before the noble Lord sits down, I take it that in his reply to me he was certainly accepting what his honourable friend Mr. Eggar said: that all British Coal's liabilities pass to the Coal Authority. Will he reiterate that that is absolutely the Government's view?
Lord Strathclyde: I explained carefully what was clearly meant in Clause 7(3), which I reiterated a few moments ago. I see no reason to do so again. The point that I was making to the noble Lord, Lord Peston, was that if he were trying to create a disagreement between myself and the Minister for Energy I can confirm that I agree with what my right honourable friend said.
Lord Crickhowell: I wish to make only one comment but it needs to be said because I raised some difficult issues. My noble friend made an extremely important interim statement. It was most helpful and we all wish to study it carefully before we return to these issues.
Lord Morris of Castle Morris: I too wish to pay tribute to the way the Minister handled that one. He was stormed at from all sides by shot and shell and many of the comments that he made have been extremely helpful and have produced some clarification. Nevertheless, a great deal remains unclear.
I am grateful for the assurance that he will take the matter away and have another look at it without commitment of any kind. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ezra Lord Ezra moved Amendment No. 2:
Page 1, line 9, at end insert:

("( ) securing the safety, health and welfare of persons employed in the coal industry").

The noble Lord said: I shall seek to be briefer in dealing with this amendment, which affects an issue as important as the one that we have just debated. I refer to the issue of safety. Anyone who has worked in the industry or been connected with it will know that safety in mining is absolutely paramount. I suggest that one of the great achievements, among many, of publicly-owned coal has been the very high standard of safety in the mines that has evolved during the years. In tabling the amendment, we seek to ensure that those high standards are not only recognised but also maintained.
It is clear that the Government have been reluctant to specify safety responsibilities in the Bill because they are the responsibility of the Health and Safety Commission and its executive; and, indeed, that is the case at present in relation to British Coal. British Coal is the operator and the Coal Authority will not be the operator. Nevertheless, we feel that because of the paramount importance of safety, a more positive reference to safety should be made in the Bill than the somewhat tortuous phrasing in Clause 4. Therefore, we indicate as a suggestion the wording in Amendment No. 2 which is similar to that in the Coal Industry Nationalisation Act 1946.
My experience in dealing with safety in the mines tells me that it is an issue on which it is impossible to say or do too much. It is paramount; it is vital. As the Bill sets a new framework for the conduct of the coal industry, that vital importance should be emphasised more effectively than at present. I beg to move.
Lord Haslam: As my noble friend Lord Ezra has already said, the Government constantly stress that they regard safety as paramount, but the Bill is very light on how this will be achieved. It deals essentially with regulation but does not address the issues of organisation and culture needed to ensure compliance.
The importance attached to safety in British Coal far exceeds anything that I have experienced in other industries. It is sometimes implied that British Coal has been sacrificing safety on the altars of productivity and profitability. That is not justified. For example, since 1985 British Coal's productivity has improved by over 400 per cent., while over the same period the accident and fatality rate has markedly improved. I believe, incidentally, that that performance reflects great credit
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on management and mineworkers alike, which has led to British Coal standing at the top of the world deep-mine safety league.
Privatisation must not threaten those standards. If the industry is fragmented, it will end the central direction of technical and safety policy. Some mechanism will be required to circulate safety information which will have to overcome the natural reluctance of the new owners to disclose commercially valuable information, which relates equally to technical and safety developments. Prior to nationalisation that problem was never solved. The proposals for an industry advisory committee seem weak by comparison with the current role of British Coal.
The Health and Safety Commission will obviously have the key role in determining and policing statutory safety requirements. I pay tribute to the thoroughness and dedication of the mines inspectorate in overviewing all aspects of safety. Its task in the future will be even more challenging. At present the Mines Inspectorate also enforces British Coal safety instructions. Those have been introduced by British Coal to set standards of safe practice when new technology has been introduced or an accident investigation has identified deficiencies in existing practice. Those procedures have obviated the need for further legislation. I understand, however, that on privatisation only 10 of those safety instructions are to be given legal status, but that is a tiny fraction of those that currently exist. How is the remaining void to be filled?
However, safety is not solely a matter of regulation. Indeed, safety performance is in all probability more a matter of sound management systems and the safety culture of the industry rather than regulation. After all, it is not the lack of policemen that gives rise to increased crime so much as cultural behaviour and cohesion which outlaw criminal activities.
The final element, therefore, is the behaviour of the mineworkers themselves. One has to recognise that because of the arduous nature of underground jobs, there is always a temptation to cut corners—and in my career I have seen that many times—which can often lead to accidents. British Coal has commendably developed a safety culture which permeates the whole workforce. This is not a once and for all effort but requires a constant and creative approach to sustain it. This safety momentum will obviously carry over into the private sector, but it will prove fragile if the new owners are not prepared to devote the time, effort and investment to maintain it.
I believe, therefore, that the Coal Authority's procedure for licensing must give very serious consideration to the potential licensee's safety record and its ability and willingness to maintain the existing systems and culture.
Baroness White: I hope that the Minister will accept the amendment without any difficulty whatever because it merely indicates that there is at least a minimal concern for the safety of the small but important group of people who will continue to work in the industry. After all, this Bill is relevant to the future.

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The amendment will at least register our regard for the well-being of those people. As we have said before, coal mining remains a dangerous industry, notwithstanding the good safety records to which the noble Lord, Lord Haslam, has just referred. But there is considerable anxiety, as he also indicated, about how those standards are to be achieved. I have received information from the British Association of Colliery Management which has recently emphasised its sharp dissatisfaction about the way in which the Government have handled this whole matter. The association contends that a significant number of today's legal safety requirements will become ineffective when a mine is taken over by a private owner. It tells me that it is discussing the matter with the Health and Safety Executive. Frankly, I do not know how far it has been able to go.
Surely it is unacceptable that we in this Chamber should be expected to approve a Bill when such important considerations are precluded because they are health and safety matters. I presume that those matters will be determined more fully only when the new authority has been appointed and has agreed to the document referred to in the miserable Clause 4. Why should we have to wait? Why are we put in the position that we cannot have assurances on matters which are of primary concern merely because they are health and safety matters and, therefore, do not come under the direct control of the authority?
I hope very much that the Minister will clarify that situation because there is a great deal of anxiety about it. There has been very great respect for the arrangements made in recent years. If they are to be ineffective in the future, we must know to what degree they will be ineffective and we should be able to debate the matter before we accept the Bill. I hope that the Minister can give us clarification on this point.
Baroness Dean of Thornton-le-Fylde: I urge the Minister to accept the amendment. On Second Reading this was an area about which I was particularly concerned. As I recall, on that occasion the Minister said that the Health and Safety Executive would deal with that whole area and that that was sufficient protection for the people within the industry.
When the coal industry was nationalised, there were about 1,000 deaths each year. The Health and Safety Executive did not even exist at that time. It may be said that that is an argument for transferring all safety matters to the executive; but I would say that that is not so. Only by having hands-on responsibility for health and safety at the core of the organisation have we seen a reduction in the fatalities in the industry.
A few moments ago we had a detailed debate about pneumoconiosis. As we tackle one industrial disease, other diseases emerge. One of the new emerging industrial diseases in the industry is industrial deafness. The 1993 accounts show that British Coal paid something like £70 million in compensation. That will continue.
Companies have a responsibility for health and safety. Here we are writing legislation, and it is only
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right that that protection should be in it. The Minister said earlier that we do not want to impose upon commercial enterprises requirements that are too onerous, but of course the responsibilities about which we are talking already lie with British Coal. It is not a case of introducing new provisions but merely of continuing the present ones in the new set-up. I do not see that they would be onerous. They would be some kind of assurance for people who work in a dangerous industry. It is an industry unlike any other in the UK. It is a dangerous industry in which to work. It is one in which industrial disease creeps up over the years and in which the whole area of health and safety has to be at the forefront of the day-to-day activities of the companies which will own the industry in the future. It should not be effected by working to the policemen of the HSE, important though that is and important though its role will be. There is no conflict. The two go hand in hand, and very closely.
5 p.m.
Lord Gray of Contin: I wonder whether my noble friend the Minister will clarify one or two points when he answers this debate. There will be no one in this place who is not extremely concerned about health and safety. Everyone is aware of the dangers that miners face in their daily work. So none of us would wish to see any measures taken which would dilute in any way the authority of those responsible for safety.
After privatisation, will not the companies which take over the coal industry be subject to exactly the same law as presently exists and to which the Coal Board has had to give credence? From reading the Bill, in particular Clause 4, which has been maligned to a certain extent by some of those who have participated in the debate, the point seems clear. Clause 4 states clearly:
"It shall be the duty of the Authority—
(a) in conjunction with the Health and Safety Executive, to prepare and from time to time revise a document setting out such means as may, with the approval of the Health and Safety Commission, be agreed between the Authority and that Executive".
I understand that at present everything suggested by the commission has been accepted. Is that the case, or do I misunderstand the Bill? I do not want to make any political point; I merely seek clarification as to whether the law is being changed in any way or whether it remains exactly as it has been for some years.
Lord Callaghan of Cardiff: I have only one small point to make. British Coal has sustained for several years a group of colliery workers who have been trained especially to deal with mine accidents and disasters. That team is naturally being run down because there are fewer mines. My correspondence shows that there is concern among those who have been specially trained about the extent of the rundown.
I am speaking to the amendment, but I really want to ask the Minister to do me a favour. Perhaps he will be good enough to look into this matter which has caused concern to those men who have been specially trained. They feel that it will be a little difficult to know what will be their dealings with the new mining companies even though they will come under the aegis of the new

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authority. Will he please let me know in some way—I do not press him now because I do not expect him to know—what are his observations and views about the extent of the rundown, and whether the organisation of colliery workers which is now under the authority of British Coal will be maintained at a sufficient level to enable the service to be provided properly in the event —we hope that it will not take place—of a further disaster?
Lord Peston: I intervene, first, to draw to the attention of the Committee that there are three amendments in the group: Amendments Nos. 2, 16 and 22. Amendment No. 22 of course refers to the possible relevance of European directives. I tabled that amendment partly to remind the Committee that we sometimes debate matters such as health and safety in too insular a fashion. We now live in a world in which broader considerations are brought to bear on these matters by Brussels. That relates to the point raised by the noble Lord, Lord Gray of Contin. To anticipate the Minister, clearly the Bill does not get rid of all previous legislation to do with such matters. That legislation is still there. The new companies will obviously be obliged to obey the law.
But I do not believe, and here I follow my noble friend Lady Dean, that the amendment undermines the view that the law is there and has to be obeyed; what the amendment does is supplementary to that, or is congruent with it. It is essentially to do with two matters. One is that matters of safety, health and welfare are not achieved merely by following the letter of the law. To use the current parlance, they are achieved by having an appropriate culture in which such things occur. One's concern is that that culture will not necessarily be transferred to the new companies. I hasten to add that if the noble Lord, Lord Sanderson of Bowden, is successful in his bid, I am certain that in his case it will, but that does not mean that we can make that assumption about other companies. That is the reason why we have put down the amendment.
Perhaps I may go further. This relates to a matter raised on the previous group of amendments by my noble friend Lord Callaghan. He said that we were discussing all this, and he asked, "What about the human beings? What about the miners?" He asked where in the Bill was there any concern for the miners. My judgment is that in the case of the mines safety, health and welfare are of the essence. If we were discussing a Bill to regulate professors of economics, I doubt whether anyone would be raising issues of safety, health and welfare.
I recall the speech of my noble friend Lord Mason on Second Reading, which, I must admit, upset me terribly. He reminded me of what life must have been like going down a mine. My view was, "Thank goodness, I didn't have to do anything of that sort". That is why the amendment is important.
Following the noble Lord, Lord Gray, I do not claim for one moment that the amendment suggests that there is something deficient. It merely says that in a Bill of this sort which the Government are seeking to justify to the world to have something specific about the purposes
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or duties of the Coal Authority right at the beginning would make the legislation, to say the least, look slightly more attractive than a piece of legislation where the human beings seem to come in very late indeed. The point of the amendment is to emphasise that matter.
As I know now that the noble Lord, Lord Strathclyde —he has upset me—does not trust me at all, this is also not my undermining of the Bill. That comes later. The amendment is put forward sincerely as something which would benefit the Bill.
Lord Strathclyde: It is always nice to hear the noble Lord, Lord Peston, differentiate between his sincere amendments and his insincere amendments. Long may that continue because it makes it easier to spot the difference. I entirely agree with him about health and safety. My noble friend Lord Gray of Contin put it extremely well: this is not the time to make political points but to deal with the issue as it stands. I can confirm that what my noble friend assumes is correct. He put it in a way that I shall probably copy.
First, I deal with the question asked by the noble Lord, Lord Callaghan, about trained colliery workers and safety. I shall follow up that point with a note to him. We are working closely with British Coal to ensure that the safety culture will be transferred, first, to the Coal Authority; and, secondly, of course to the successor bodies, because British Coal can be rightly proud of the high standards that have been established by the Mines Rescue Service. That service is second to none. We fully understand the importance of mines rescue. That is why we are taking steps to ensure that there will continue to be a service with a national capability.
Lord Mason of Barnsley: Will the Mines Rescue Service remain as it is, full-time and experienced, and under the responsibility of the Coal Authority ?
Lord Strathclyde: I do not wish to go too much into the question of the Mines Rescue Service because I know that later there is a specific amendment under which we shall deal with the issue and I do not wish to have another wide debate. Suffice it to say that it is an important issue. I do not want to go further than what I have already said to the noble Lord, Lord Callaghan. I hope that the Committee and the noble Lord, Lord Mason, will accept that. We shall return to the issue, when we shall deal with it in some detail.
I turn now to the important central question of the role of health and safety. The Committee may be aware that in the comprehensive advice to the Minister for Energy about the post-privatisation safety regime, which has been made available, the Health and Safety Commission made clear that the prime responsibility for safety should remain with the employers in the industry while the regulation of health and safety should be the responsibility of the Health and Safety Commission, enforced by the Health and Safety Executive. The Government have simply accepted the commission 's advice in full.
The commission argues for the retention of a clear separation of licensing and health and safety regulation. Its advice is that the use of the licensing system to

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enforce compliance with health and safety law or to impose penalties on offenders is neither necessary nor desirable. It has made it clear that the two processes must remain separate and distinct. To do otherwise would risk confusion, which can only jeopardise safety.
Health and safety legislation contains very clear duties on mine owners to make financial and other provision to secure, so far as practicable, that the mine is managed and worked in accordance with the relevant statutory provisions and is so planned and laid out as to enable that purpose to be readily secured. There are also specific duties to appoint a qualified and competent manager and substitute a qualified and competent surveyor, as well as to have a suitable management structure composed of sufficient qualified and competent people. There are already legal duties in place to achieve the objective of the amendment and to ensure that mine operators have the necessary expertise available to them to ensure that mines are worked safely. HSE's Mines Inspectorate already has the power to enforce them, including the power to shut down a mine if there is not a duly appointed qualified and competent manager. I might add that that mirrors the approach taken in relation to the offshore oil and gas industry since the recommendations of the Cullen report were accepted by the Government.
The commission has also advised that there will need to be continuing liaison between the authority and the HSE. In line with the provisions of Clause 4 of the Bill, a draft memorandum of agreement governing the relationship between the Coal Authority and the HSE has been made available as part of the Coal Authority explanatory note. One of the basic undertakings proposed is that the authority and the HSE should co-operate with one another in order to secure the exchange of information necessary to enable both parties to carry out their functions effectively and efficiently.
That brings me to Amendment No. 22, which proposes that that memorandum should be made without prejudice to European directives. That is an important issue to have raised, but the amendment is a vague and unnecessary one because European directives relevant to health and safety are implemented through regulations made under the Health and Safety at Work Act 1974 and the implementing regulations become relevant statutory provisions. I have to refute absolutely the implication that the protection offered by our health and safety law falls short of the protection offered by the European directives. I do not believe that that is the case.
My noble friend Lord Haslam asked a question about the industry advisory committee. The Health and Safety Commission has proposed the establishment of an IAC for deep mines. The proposal was set out in the HSC's report. I understand that the establishment of such a committee would be along the lines of IACs successfully established by the commission for other industries.
My noble friend also referred to the need for the transfer of owners' rules into regulations. Those of British Coal's operating instructions which are
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necessary to ensure that the Mines Inspectorate has all the necessary powers following privatisation have been given legal status by regulation. In the interests of maintaining the existing safety culture in the industry, British Coal and the HSC are working to codify the great majority of remaining British Coal safety codes, rules and instructions in order to ensure that they can be made available to the privatised industry. That work is now nearing completion.
The noble Baroness, Lady Dean, said that in 1948, when the coal industry was set up, there was no health and safety at work Act. There is now such an Act, which was enacted in 1974. If we had taken the advice of the Opposition when we were drafting the Bill and had included the amendment, I wonder whether, when the advice of the HSC became apparent, noble Lords opposite would have tried to remove that power from the Coal Authority and would have accepted the advice of the HSC. Perhaps I tease the Opposition on this question. On page 51 of the report produced by the HSC it is stated that the commission's view is that it should remain as the sole regulatory body for health and safety in the coal industry and the Health and Safety Executive should remain the enforcement body. I believe that that is a very powerful voice.
It is worth having this debate because central to so many people's anxiety is the record on health and safety in an industry which, over generations, has shown itself not to be overly concerned about the effects on the people who work in that industry. I believe that that is no longer the case. I believe that we have given the Health and Safety Commission the powers to deal with the private sector. We now have substantial experience of many difficult private sector industries which affect the health of individuals.
I hope that in the light of that very full explanation and the clear advice of the Health and Safety Commission the noble Lord will withdraw his amendment.
5.15 p.m.
Lord Ezra: I am grateful to the noble Lord for his explanations. Those of us who have prepared carefully for the debate have read the document of the Health and Safety Commission and realise that there must be no confusion on the ultimate responsibility for ensuring safety throughout the length and breadth of industry. Coal is no exception, although at the time there was great reluctance on the part of the coal industry to give up its own inspectorate. However, that is in the past.
We are asking that, without changing that in any way, some recognition of the importance of safety in the industry should figure in the Bill. Could it not be mentioned parenthetically in regard, for example, to Clause 4? All we ask is for that to be done. We would be quite satisfied. We are not asking for any fundamental constitutional or legal changes.
I do not propose to suggest that the Committee should divide on this issue. We all agree—on both sides of the Chamber —that safety is important. However, I should like to leave the noble Lord with the thought that perhaps he could come back to us and, having reflected on the matter, without altering the fundamental situation

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there could be some wording which represents a recognition of the importance of health and safety in this unique industry.
With those remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Lord Bishop of Sheffield The Lord Bishop of Sheffield moved Amendment No. 3:
Page 1, line 20, at end insert:

("( ) taking responsibility for the functions of British Coal Enterprise;").

The right reverend Prelate said: Amendments Nos. 3 and 21 are grouped together. I propose to speak only to Amendment No. 3 and I hope to have an opportunity to speak to Amendment No. 21 later in the day.
I note what the Minister says about continuity and his concern that the Coal Authority should not be encumbered with too many duties to distract it from its main duty of running the privatised coal industry. I also note what the noble Lord, Lord Renton, says about a legislative vacuum. There is a danger of British Coal Enterprise falling into such a vacuum or a black hole. If that were to happen it would be a great misfortune for those who live and try to work in the former coal mining areas and for the nation as a whole.
British Coal Enterprise was founded in a dark period for the industry in 1984. But in what has proved again a difficult decade for the industry—"dark" may be the right word—it has proved to be a burning and shining light, to use a biblical phrase. Sometimes that light has not been as bright as some of us would have hoped. But when one looks back at what it has achieved over the years, the result is remarkable for an expenditure funded by the Government, and supervised by British Coal. We need to be grateful for British Coal Enterprise.
As noble Lords will know, its areas of activity are manifold. In conjunction with both private enterprise and local authorities, it has funded a considerable number of small, and sometimes now not so small, businesses creating a large number of jobs. It is hoped that by now 46,000 jobs have been created in that way. Through the conversion of existing mine buildings, and later by construction of new buildings—managed work spaces—a considerable number of people have been enabled to set up their own places of work. It is worth noting that British Coal Enterprise has never felt committed to providing work only for ex-miners. It recognised that the life of a community is an economic unity and all work is good work; one aspect helps another. Therefore British Coal Enterprise does not only help ex-miners; it helps the community as a whole.
However, it is the ex-miners who in particular have been helped with finding work. It has set up job shops which have an astonishing record of finding work for people and helping people to present themselves in a way that is most effective. The skills training places also have taken many highly skilled miners and enabled them to become highly skilled at activities which range from rugby coaching, mountain climbing, selling of vegetables—I could keep going a long time describing a wide range of work. We need to be grateful for what British Coal Enterprise has done.
Its work covers six sections of the country. I am most familiar with its work in South Yorkshire. My diocese of Sheffield covers an area far beyond Sheffield—now, alas, almost entirely an ex-mining area. In the past 15 years I have seen 50 pits and 50,000 miners become one pit, perhaps two half-pits, and a few hundred miners. In the past 10 years 41 pits have become one, or perhaps one-and-a-half, and 41,000 miners have become a few hundred. The same tale has been repeated throughout the country.
We have to be grateful for what has been done to rehabilitate, to regenerate and to bring new industry to those neighbourhoods. But we should be deceiving ourselves if we were to think that the work was now complete, that there was nothing more to be done, and that we can allow British Coal Enterprise to pack its bags and to say goodbye with a sense of a job well done with nothing further needing to be done. The situation is not like that.
One of the more esoteric duties of a diocesan Bishop is to conduct a formal visitation to his diocese from time to time. I am in the midst of conducting just such a formal visitation at present. It involves my visiting each of the 12 dioceses in turn and haranguing, encouraging or whatever, churchwardens, counsellors and clergy. Last night I was in one of the areas affected by the closure and therefore the total disappearance of Kiverton Park and its collieries. After those people had survived my hour long discourse, it was moving to listen to the ex-miners who told me of their experiences. Some were doing very fragile private enterprise work; they were not at all sure that they would survive. Alas, quite a few had still not found work and were beginning to despair whether they ever would.
It is a matter of considerable importance that the work of British Coal Enterprise is not only affirmed but secured for the foreseeable future. The most appropriate way to do that is for British. Coal Enterprise to continue to be one of the continuing responsibilities of British Coal which is handed on to the Coal Authority. I see it —perhaps it is a rather naive image—as sitting firmly on a branch of the British Coal tree. I worry that when that tree is felled, that enterprise will collapse with it. I hope the Minister will be able to assure us that that will not be the case and that one way or another, preferably by incorporation in the Bill, the future of British Coal. Enterprise can be secured. I beg to move.
Lord Mason of Barnsley: I support the amendment. I am very pleased indeed to follow the right reverend Prelate. He has worked hard on behalf of the miners and their families in South Yorkshire. We all know that well; and I am sure that they are all grateful to him.
What surprised me was that British Coal Enterprise was not mentioned in the Bill. Why was that? That factor immediately aroused suspicion. What is our future? In the coalfields we know that we need British Coal Enterprise more than ever. It had a difficult start. There were many criticisms. Many people said that it would never find jobs. But it has overcome those criticisms and has done remarkably well. British Coal Enterprise created tens of thousands of jobs in all the mining districts in the country.

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Its main objective has been to help provide alternative employment in the areas affected by all those pit closures. In 1985 when it was put forward that this enterprise should seek to solve some of our problems in the coalfields, no one ever visualised the task that lay before it. The rapid rate of pit closures has tended to swamp its endeavours. But it has been a major saviour in our coalfield communities. It has been most helpful in placing redundant miners in new employment or on training courses. It has found factory space for new businesses usually on pit sites and using former pit buildings. It has assisted with small loans on favourable terms to launch small and medium-sized businesses.
So far British Coal Enterprise has been funded by British Coal, Government grants and European Regional Development Fund allocations. Consequently British Coal Enterprise is now a major business with 180 full-time staff, 400 counsellors in mining districts and 60 financial consultants, giving advice to the many distressed men and their families when plunged into unemployment in areas of little hope. Yet it has managed to find or create directly 105,000 jobs. Another 4,300 projects have been established which employ a further 46,000, and with the establishment of business parks through partnerships with the ERDA another 13,000 jobs have been found. One can just imagine the impact that that enterprise is having on our rundown mining communities, giving them hope for the future as the activities of British Coal Enterprise expand.
What is to happen to British Coal Enterprise? There is a great deal of anxiety in the coalfields about it. First, will it continue to be a Coal Authority responsibility, as it should be? Will European regional development money still be forthcoming if it is hived off? Will the DTI still be actively and financially interested? There is a fear that it will be privatised—another hived-off venture. But really, in the light of the recent run of further pit closures, should not the BCE be given a more enhanced status to tackle what will be the ever growing problems in our old coalfields, and should it not be the Coal Authority's responsibility?
Two small issues arise from my own personal experience of working alongside British Coal Enterprise. I happen to be the chairman of the Prince's Youth Business Trust covering South Yorkshire—Sheffield, Rotherham, Doncaster and Barnsley—where the unemployment levels are extremely high. We launch between 12 and 14 new businesses every month, mostly with unemployed persons between 18 and 29 years of age. British Coal Enterprise has been invaluable to us —the PYBT—as regards allocating buildings, office equipment, expert advice that it has at its fingertips and liaison with our PYBT managers. It has been invaluable not just as regards creating individual jobs, but as regards helping us to create new businesses which in themselves are creating more employment.
Likewise, but a bit more so, I happen to be the chairman of a business and innovation centre: the Barnsley Business and Innovation Centre. There are not many in the country—I guess about 20—and British Coal Enterprise has been a major investor in that enterprise. So far, it is a development of over two dozen
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different units within a complex which is developing high technological and innovative products. Over 120 persons are involved. New hi-tech industries sprouting in a dying coalfield, aided by BCE investment: it is a classic example of British Coal Enterprise's use of a coalfield and its impact on a coalfield community.
So there is a need for its continuation at least at its present financing level. Our coalfield communities are struggling to combat the ever-rising levels of unemployment and this will be true for some years to come. It would be a double tragedy on top of all the recent pit closures if British Coal Enterprise's activities were also to be curtailed.
Lord Dormand of Easington: I wish to put a straightforward question to the Minister which I hope he will deal with when he replies. In doing so perhaps I may say how much we all share the views expressed by the right reverend Prelate about the splendid work which is being done by BCE in the coal mining or former coal mining areas. The money is provided by various grants and loans, but BCE may not continue after privatisation. As my noble friend Lord Mason said, nothing has been said about it, but one would have thought it obvious that something would be said, even at this stage. If I were a betting man I might say to the Minister, "I bet it will not continue". In those circumstances, if those factories or workplace units, as they are usually called, are sold, there will be substantial capital receipts.
My question is: what will happen to the capital receipts? Is there a likelihood of them going straight back to the Treasury so that the coalfield areas will never see that money again? I see a smile from the Minister, he may think that is a silly question, but I bet he will give me a silly reply. This is a serious matter; we do not pretend that it is not. That money should remain in the coalfield areas. It would be terrible if such a well-established scheme, which has brought help to the coal mining areas, were to be discontinued.
Lord Morris of Castle Morris: Perhaps I may first say a word or two on the amendment so eloquently proposed by the right reverend Prelate the Lord Bishop of Sheffield, my diocesan Bishop. I pay tribute as well to what everyone in the area says about the extraordinary way in which he has looked after and backed up the miners and the mining industry in that area.
On the question of BCE, like all Members of the Committee, I have read every word of what was said about the Bill in Standing Committee D in another place, to which my attention was drawn. On 8th February at col. 73 of the Official Report, the Minister said about British Coal Enterprise:
"No decision has been taken about the long-term future of BCE. British Coal is considering the matter at present. However, I anticipate that BCE will retain its present role up to and immediately after privatisation. After that, it will be appropriate to examine how the BCE approach might function in co-operation with other local and national agencies".
"No decision … about the long term"; it is being examined—"up to and immediately after privatisation"; then it will be appropriate to examine it. Who will examine it? How will it be appropriate? You either

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examine it or you do not; it is not particularly appropriate. Appropriate to what? "How the BCE approach": does that mean that the underlying philosophy, the theological commitment, the social ideology of BCE, its message, its mission will somehow be transmitted through other local and national agencies or what? What does it mean? I hope that the right reverend Prelate is more full of hope after he has heard the Minister's words than I was on that occasion.
I wish to turn to Amendment No. 21. The Bill is about privatising the British Coal corporation.
Lord Strathclyde: Perhaps I may interrupt the noble Lord. I heard the right reverend Prelate say that he would deal with Amendment No. 21 later on. I regret that because it would have been good to have the debate now but it is the right reverend Prelate's amendment and if he wishes to deal with it later on then that is right.
Lord Morris of Castle Morris: I thank the Minister for that. If I heard the right reverend Prelate correctly, he did not say that he wished to ungroup the amendment. If he wishes to ungroup it—and I shall give him a moment or two to think about it and continue speaking while he does so—I do not know whether he will be in order in doing so at this late stage. It probably requires the consent of the Committee.
The Lord Bishop of Sheffield: I am an innocent in the jungle of the Committee stage. I have no idea whether or not I should do so. I just felt that I did not want to run my two speeches into one.
Lord Morris of Castle Morris: I believe that the two amendments are grouped together. I was seeking to make sure that the case which I imagine the right reverend Prelate would be likely to make did not go by default. I welcome guidance from the Minister as to whether the right reverend Prelate should make the case or whether I may do so.
Lord Strathclyde: The right reverend Prelate has moved Amendment No. 3. He can keep the amendments grouped, he can unbundle them, he can speak to Amendment No. 21 now or later. Whether or not he moves it formally is entirely up to him.
It was my feeling that it was absolutely right to group the amendments together because the issues are linked. Although the right reverend Prelate recently said that he did not wish to run both speeches together, I hoped that he would, because I felt that they fitted together well. I suspect that the noble Lord on the other side also felt that.
Lord Morris of Castle Morris: I am grateful to the Minister. If the right reverend Prelate would like to speak to Amendment No. 21, I should be delighted. I should be happy to hear what he has to say and if any little crumbs fall from his table which I could pick up afterwards, I should be happy to do so. I give way to him.
The Lord Bishop of Sheffield: I shall speak more briefly than I had intended on Amendment No. 21. Occasionally I feel that I am jinxed as regards the effect that I have on the diocese which I have the privilege to
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serve, because in the 15 years that have been there disaster has followed disaster. First, steel and now coal. As I drive around the diocese—as I do diligently and constantly—it has become a familiar sight: the former coal mine, sometimes with a rather pathetic wheel marking the spot where once so many people worked. Sometimes it is rather smart and tidy, with marks of new life around it. But very often it is an area of quite considerable desolation. It seems to me that the desolation of the area is in itself a powerful dissuasive to people who might have felt that they wanted to bring their industry and workplace to the neighbourhood.
It bothers me a little that in this Bill the responsibility for dealing with that area is simply left to the Coal Authority, with the command that it gets the best terms possible for the land that is sold. This is indeed continuity with what has gone before with British Coal. I have to say that British Coal's record of developing some of those sites, which seem to be very capable of development, has not been an entirely happy one. There has been delay upon delay. Sometimes I think that the delay has been caused by the desire to get the best price, when selling at a slightly lower price would have made possible a quicker development and therefore a more rapid creation of new job opportunities in the neighbourhood.
It is my view that we might do better if such sites could be transferred to bodies which, unlike British Coal or the new Coal Authority, have as their top priority employment creation and economic renewal. The bodies that I have in mind are the Government's own development agencies: English Partnership, Scottish Enterprise and the Welsh Development Agency. Ail three are set up specifically to assist the recovery of regions that are affected by industrial decline.
I must emphasise that I do not speak here of the great bulk of British Coal's land. People tell me that only the Church of England owns more land than British Coal. I rather hope that that is true and that we do; but we may not. I am speaking of a relatively small number of key sites which, because of their location, are ideally suited for redevelopment, for new factories, offices and other commercial uses. There are numerous examples of extraordinary delays—I am not talking about months but about years of delay—arising from British Coal's abortive attempts to maximise financial return from the sale of sites.
At Easington, in County Durham, proposals have been put forward by the local council to provide on former colliery land a much needed car park to serve a local shopping centre and to alleviate congestion. The British Coal Corporation has vacillated over selling that part of the land that is required, in the hope that a better price could be obtained for the larger parcel of land. The decision has been put off from year to year and leaves the community with a melancholy spectacle of derelict land.
Some of the unreclaimed sites that are owned by British Coal are even more significant. They are sites capable of the development that can bring some hope of a reasonable economic future to devastated communities. They are sites where communications are good, and where the infrastructure already exists or can

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be readily installed. They are capable of attracting industry in areas suffering unemployment caused by colliery closures.
One such site is Glass Houghton colliery, just outside the diocese of Sheffield and Wakefield. That colliery closed as long ago as March 1986. It is a site of considerable potential, with excellent communications, close to Junction 32 of the M.62 motorway and within half a mile of the stretch of the A.1 that is scheduled to be upgraded to motorway standard. Half of the 300-acre site where ground conditions are suitable has been designated in the development plan for industrial use. The presence of two town centre shopping areas within a few miles makes any change of use for retail purposes inappropriate and unlikely to receive planning approval. But that is the road down which British Coal has steadily gone; it is determined that that is the sort of development it should be. That has not happened; it is not likely to happen. After eight years the people of Pontefract and Castleford are still waiting for the work of reclamation and reconstruction to begin.
A site like Glass Houghton, properly developed, can provide a focus to attract new industry and investment into an area. But left as a derelict eyesore it positively discourages enterprise anywhere in its vicinity. It is sites such as that with which this amendment is concerned —key sites with the potential to unlock the economic development of their surrounding areas.
Transfer of sites like the one I have mentioned to the appropriate development agency may well be disposals on the best available terms—best for the communities thrown out of work by the mine closures. But there is a strong argument that such disposals would also be for the best in financial terms. This is a suggestion with which the Minister might sympathise, in that the real job of the Coal Authority is not development of this sort of land. If it could be given to those whose job it really is, there would be a focus, a concentration, on the immediate development and the immediate success of new industry and commerce coming to those areas and on new jobs being created. I do not believe that it would result in significant financial loss. It could result in significant financial gain. I believe that it would be an important sign that job creation arising out of the closure of the mines is something that we as a House, a nation and a government believe to be a very high priority indeed.
5.45 p.m.
Lord Dormand of Easington: Before the right reverend Prelate sits down, will he kindly tell me why in the amendment he does not include the words "local authority"? The organisations that he does include are extremely important. We have all had dealings with them. But the amendment mentions "local Development Plan". It also mentions the "local economy". It seems to me that the local authority in many cases—perhaps not in every case, but in many cases—would be the most appropriate body to deal with this matter.
The right reverend Prelate pleased me very much when he mentioned Easington District Council. I had the honour to represent that area in another place. The
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council has written a very long letter to me asking me to raise these matters. I had intended to do so anyway. Easington District Council—this is not simply publicity for the council; it is one of the most dynamic local authorities—has suffered greatly from the closure of pits. There is not a single pit in the constituency now. There were 16 when I was Member of Parliament there. That is the measure of the destruction, if I can use that word, that has taken place. In some circumstances the local authority could be the most appropriate body to deal with the particular matter that the right reverend Prelate raised.
The Lord Bishop of Sheffield: I note with sympathy what the noble Lord says. I share his respect for the magnificent work that is done by local authorities. I am under the impression that the bodies that I have mentioned are very ready to work with local authorities. I also believed that this amendment was more likely to be accepted by the Government if it put emphasis on the government development agencies, which I hope they support, rather than the local authorities, which (if I am not being tactless) they seem to view with such suspicion.
Lord Wade of Chorlton: I am sure that my noble friend will have a great deal of understanding and sympathy for what the right reverend Prelate said. It is surely one of the responsibilities that the DTI accepts very strongly that positive action should be taken by government so that, as one industry dies, every encouragement is given to use the resources in manpower, energy and finance to develop new industries for the future. The DTI and the Government have a number of schemes throughout the country that make those activities possible.
I support those who have said what a splendid job British Coal Enterprise has done. I endorse all that the noble Lord, Lord Mason, said about the work that it has done in his area; and it has done equal work in the North West, from where I come. But the one point that was perhaps not made relates to the way that the functions of British Coal Enterprise make it a very flexible organisation: it can put money quickly into companies and respond very quickly to changing circumstances; it will also not be so hidebound by the financial restrictions that apply to many other bodies that provide money.
What is important in this issue is that, as the coal industry changes—as it will change, dramatically—there are operations in place that continue to make money available for small businesses which, it is to be hoped, will be generated. There must be a willingness on the part of government and local authorities, which are often the planning authorities in these matters, to take heed of what the right reverend Prelate said about the need to adapt quickly and to redevelop land for other purposes. That is particularly important as coal mines are often in rural areas, where sometimes it is difficult to get the development that one wants. But whether that is a matter for this Bill is another issue. If the Bill were to cover all the ramifications and changes that will take place in society as a result of the mines moving into private hands, that would be another matter altogether.

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I should be grateful to have from my noble friend an understanding of how the Government see these changes being brought about and what they intend to do if British Coal Enterprise is no longer to be the functioning body. I should like to know what other bodies they see as being able to take over its responsibility and having the power and flexibility of British Coal Enterprise. I should like to hear how the Government view the importance of local authorities and government bodies responding to what the right reverend Prelate said.
Lord Haslam: British Coal Enterprise and its counterpart, British Steel Industries, continue to be, I believe, the most successful industrially based job creators in the UK. The latter—British Steel Industries —continues to operate under the umbrella of British Steel. Having had its debt written off, it is now self-financing, except when an exceptional sudden demand arises, such as, for example, the closure of Ravenscraig.
The right reverend Prelate the Bishop of Sheffield, the noble Lord, Lord Mason, and, more recently, my noble friend Lord Wade, have already very effectively described the role of BCE and its achievements. Perhaps I could just add a little more flesh to their statements.
First of all, there is what is called business funding. That involves providing loans to job creating projects in the UK coalfields. Those projects are part funded up to 25 per cent. of the cost or £5,000 per job created. A sum of £86 million has been committed since 1984 into 4,300 projects, which have led to 46,000 jobs being generated. Looking to the future, to continue annually to make £10 million of loans available to 500 projects, thereby creating 5,000 jobs, is an achievable and desirable objective. As these are revolving funds, the total cost of the operation, including all overheads and provision for bad debts, is about £8 million per annum.
I turn to managed workshops. That has involved both the conversion of former British Coal buildings and newly built business park ventures. There are currently 34 operational sites, which are soon to be increased to 43. Those managed workshops have housed an astonishing range of small burgeoning businesses started by miners and their families.
I have been amazed at the diversity of the entrepreneurial things that happen. There is one extraordinary story of a miner who read the Board of Trade journal and saw that £300,000 worth of pythons was imported every year into this country for museums, schools and universities. He decided that in one of those managed workshops—and it is not too much liked by some of his near neighbours—he would breed pythons. He built a business in that particular area. It was quite unimaginable.
About £30 million of capital has been expended and over 13,000 job opportunities have been created in those managed workshops. On a revenue basis, that activity is breaking even and will make a growing positive contribution as sites mature to higher occupancy. However, if British Coal Enterprise is to expand its
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workspace, there will be a modest demand for capital. A net expenditure, after European grants, of £3 million per annum would allow five new sites to be built each year.
On the outplacement front, BCE has a service contract with British Coal to deliver a comprehensive outplacement package. That facility is also made available to other selected companies and that activity is profitable. Over 44,000 former British Coal personnel have been resettled since 1987. That is an 80 per cent. success rate of those who registered at BCE jobshops and who actively sought work. Thus, in total, British Coal Enterprise has participated in the creation of about 105,000 jobs since its inception in 1984. The corresponding loss of jobs in the mines during that period was about 180,000.
To sum up, I strongly support the view of those who have already spoken that British Coal Enterprise should be preserved in the public sector. I believe that its present debt of £30 million should be written off. A single cash injection of £50 million would then be: sufficient to ensure its future for all time, as British Coal Enterprise's profitable activities continue to grow. It is very interesting now that, particularly in the eastern European countries, its advice has been sought to establish similar organisations in places such as Poland, Hungary and so on.
An alternative would be for the Government to agree to continue funding at, say, £2,000 per job created. That cost is considerably less expensive than other government comparable enterprise agencies and I believe would stand any market test.
The Minister for Energy recognised in another place the positive achievements of BCE and indicated that it would be retained in its present form for the immediate post-privatisation period. I understand that discussions are taking place with British Coal about longer term plans. I look forward to hearing the outcome. It is to be hoped that the emphasis will be to build on the success and achievements of British Coal Enterprise. Accordingly, I support Amendment No. 3.
Lord Morris of Castle Morris: I should just like to put the position of those of us on these Benches briefly and quite clearly on the main amendment, Amendment No. 3. Since 1984, 180,000 miners have lost their jobs. Since 1984, BCE has created thousands of new jobs around the country. We support it strongly.
The Coalfield Communities Campaign recently undertook some research into BCE. Its preliminary findings show that BCE has been cost-effective as a job creation agency by comparison with other job creation agencies and has made a most creditable contribution to job creation in coalfield areas. It can be justly proud of that.
BCE, as the only economic regeneration body specifically working within British coalfields, will be needed more and more over the next few years, not less and less. Given its prudent track record and given its cost-effectiveness, BCE's existence ought to be assured for the foreseeable future and the resources available to it should be increased.
In that way, the process of regeneration in the coalfields can be accelerated to try to match the rapidly

565
growing need for assistance to coalfield local economies, a priority not only for those communities themselves but for the national economy as a whole.
Lord Strathclyde: I am very grateful for the contributions that have been made on BCE. I particularly thank the right reverend Prelate for his words and for speaking to both amendments. I feel that the amendments hang together extremely well. It is on that basis that I shall reply.
It was interesting that the right reverend Prelate mentioned the steel industry. It will not have escaped the Chamber's notice that the steel industry in this country is one of the most efficient and productive steel industries within the European Community. It is a testament to those who work in the industry. This Bill is about producing the same result for the coal industry, so that the mineworkers in the privatised coal industry will also share in that success.
I shall not follow the example of other noble Lords in eulogising BCE. The very great importance and the tremendous contribution that BCE has made to the regeneration of the coalfield areas are clearly recognised by the Government. What is more, the regeneration of the coalfield areas is an avowed objective of government regional policy in order to help the situation in those areas. In 10 years BCE helped to create 100,000 job opportunities through job placement and training of former British Coal employees, managed workspace developments and business funding for small firms. My noble friend Lord Wade of Chorlton is absolutely correct when he says that it is a flexible organisation with few financial restrictions and one which can move quickly.
But I understand the concerns of the Committee. What I am wary of in the amendment is that we are simply putting the responsibility of British Coal Enterprise into the hands of the Coal Authority. I am by no means certain that that is the right thing to do. The Coal Authority will be looking after the privatising of the industry and is not therefore the appropriate body to look after British Coal Enterprise.
What is to happen to BCE? I must tell the Committee that we do not know what is its long-term future; that remains to be decided. But in the medium term we envisage that BCE will be retained in its current form throughout the transitional and immediate post-privatisation period. The longer term future of BCE needs to be carefully considered. The mini debate we have just had goes some way to furthering that consideration and the Government will take note of what Members of the Committee said. I could not resist a smile when the noble Lord, Lord Dormand of Easington, asked a specific question in relation to capital receipts. On one side because I do not know the answer; but on the other because I suspect that the heavy hand of the Treasury will do its work in this respect and it may be difficult to ring-fence or earmark specific receipts for specific areas.
What is important is our overall policy towards the regeneration of coalfield and other areas around the country. It will not have escaped the notice of the
566
Committee that under the single regeneration budget, under the Urban Regeneration Agency which is run by my noble friend Lord Walker, we have a clearly focused policy to help exactly the kind of areas that have been helped so successfully in the past by BCE. For instance, it is important that English Partnership and the other relevant agencies mentioned in the second amendment of the right reverend Prelate, should be able to contribute to the regeneration programmes in the areas affected by colliery closures. Members will be aware of the work that has already been carried out by those agencies.
Coming to the matter of disposal of British Coal's land, the Government have in mind the possibility that, as part of the process of allocating the property and land of the corporation itself, those properties which should be beneficial to the regeneration process in coalfield areas should go direct to the local authorities or development agencies rather than to the coal authorities. That seems to me to be the best way of dealing with the issue.
I want to draw the Committee's attention to the fact that the authority's duties are designed to lead it to take a constructive and flexible approach to the disposal of land and property which will be vested in it after the due date. First, Clause 3(2) places a duty on the Coal Authority to dispose of such of its land and property as, broadly, is not required for coal mining. That means that there is no question of the authority simply hoarding land. It can therefore be freed up to deal with the kind of regeneration which the right reverend Prelate wishes to see. The clear intention is that land and property should be released for beneficial use. That will be helpful to regeneration as the authority makes land available for new housing, industrial or leisure developments.
Secondly, there is no need for the land to be transferred before it is developed. The authority has the power to develop land under Clause 5(3). Thirdly, there is no need to transfer the land to develop it in partnership. The authority has the power to do that without the private or public sector. Lastly, planning permission is required for any new use of land or new development. There is now a presumption that planning applications will be determined in accordance with any relevant provisions of the local development plans and that applies just as much to any development on or use of Coal Authority land. The authority itself has no privileged position.
In short, the authority has a basic duty to dispose of land not needed for coal mining purposes. It has flexibility as to how it does so. It will be governed by the planning law like anyone else and will need to take account of local development plans in formulating proposals or collaborating with others. The role of BCE in the short term is assured; in the longer term we shall need to look at it in the light of our overall objectives. But I join with other Members of the Committee who have spoken in the debate to congratulate and welcome the work that has been done over many years.
6 p.m.
Lord Ezra: It is encouraging to hear from the Minister the support that the Government give to BCE. They have said that in the short term it will continue as it is until the process of privatisation develops; in the longer term it is still open for debate as to how it will operate.
I am a little disturbed by that. From past experience the discussions take a long time and I hardly think that it will be one of the Government's urgent priorities in the months ahead. Therefore I suggest to the noble Lord that we who support BCE—I include the Minister as a supporter of BCE —would be happier if it were proposed that after the interim period, unless by then some other arrangement is arrived at, the Coal Authority will retain responsibility for this important endeavour.
Lord Strathclyde: It is an interesting suggestion. However, I do not believe that the Coal Authority should be responsible for BCE. Ultimately the Coal Authority will be dealing with other matters that are laid out in the Bill. We need to find a solution as to what is to happen to BCE, particularly in respect of overall government objectives for regeneration in the coalfield. But it is an interesting suggestion and one that I am happy to look at. I do not want to throw a bucket of water on it because I have not considered it in detail. However, I want the Committee to be absolutely certain about what is our general policy.
The Lord Bishop of Sheffield: I welcome the greater part of what the Minister said. I must admit that I remain puzzled that so large and important an enterprise as the British Coal Enterprise should be left hanging in space in this way. It seems puzzling that the problem of what is to be done was not addressed much earlier. I welcome the Minister's later comments about the land, which I find encouraging. I therefore seek the leave of the Committee to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Peston Lord Peston moved Amendment No. 4:
Page 2, line 3, leave out ("two nor more than").
The noble Lord said: Amendment No. 4 is grouped with Amendment No. 5 and perhaps therefore I may start with Amendment No. 5. It simply asks a question. In the sort of legislation we have had before us in recent years on quangos, there has tended to be a clause of this sort saying that XYZ will be consulted. I am somewhat taken aback that the Bill chose not to have such a clause and perhaps the Minister can tell us what it is about this specific quango that the Secretary of State is not constrained to consult in an explicit way. Is there some reason for that?
Amendment No. 4 is rather stronger. The subject was raised by my noble friend Lord Morris of Castle Morris at Second Reading. I find it inconceivable that in the real world—by which I mean the world outside—we would set up a Coal Authority with only two members. I take it that the draftsmen do not put in a number like "two" unless it is meant to have some significance. As I say, I find it difficult to believe that we can set up the Coal
568
Authority with as few members as that. Amendment No. 4 therefore asks the Minister to give a rational argument as to why two can ever be the right number.
Baroness Nicol: I support my noble friend, particularly on Amendment No. 4. The idea of two people making up an authority with one of them being appointed chairman seems to me to be ludicrous. It appears to me that we are appointing a dictator and not the chairman of an authority. As an old committee hand, therefore, I ask the Government to accept my noble friend's amendment.
With regard to Amendment No. 5 it is important that all the different expertise that is available should be tapped. That is another reason for appointing more than two members. To find two people who embody all that degree of expertise is frankly impossible. To cut my comments short, I wish to support my noble friend in both his amendments. I hope the Minister will give him a serious answer.
Viscount Torrington: I cannot support Amendment No. 4 in the name of the noble Lord, Lord Peston. I am not sure whether it is one of his helpful amendments or one of his wrecking ones. I take it that it: is one of his helpful ones. However, it raises the question of the composition of the Coal Authority. The Committee may be aware that in the United States there is a whole new industry for the extraction of coal bed methane. It has been going on for a number of years and is a big and valuable industry. Essentially, it is rather similar to drilling oil and gas wells except one is deliberately drilling into coal seams to extract the methane. So far British Coal has been pretty unhelpful in the development of that kind of industry in this country. There is little reason to suppose that future private miners will be any more helpful. I hope therefore that my noble friend might consider that the Coal Authority, as a kind of regulator, should be even-handed in this matter and assist in all forms of economic development of coal assets. Accordingly, I hope that there will be some expertise either represented on the authority or available to the authority to make sure that the industry is fostered.
Lord Beaumont of Whitley: I do not believe that the Government are likely to concede Amendment No. 5, nor do I think that they should. No, probably they should, because it is important that all these various organisations should be consulted before the body is made up and that it should consist of people who have real expertise.
This is the first opportunity I have had to plug an interest which is dear to my heart and to which we shall be coming back in Part V of the Bill. I know that the noble Baroness, Lady Nicol, is also interested in the matter. I refer to the whole question of the environment. I know that we shall be dealing with opencast mining in a big way but there is something much greater than that. As we have heard, a great deal of land has been in mining over a period of time. Everyone in the Chamber wishes to make sure that when all the controversy has died down and we have either a thriving, small, dynamic coal industry, as the Government tell us they expect to

569
have, or probably no coal mining left anywhere in the country, which I think is much more likely, we should have a situation where the land which has been used for, and exposed to, coal mining over a long period of time is in a state which is available and which can be enjoyed by the community as a whole.
We all know what happened as a result of tin mines closing in the South West. Anyone who has travelled by rail in that area will have seen the great devastation left by the clay workings around St. Austell. We must seek to ensure that that is put right as we move from this chapter of our history. It is likely that the environment will be almost pushed out by the very important matters we are discussing —I am not under-rating them at all —concerning safety, the future of the communities and their livelihood. However, it is important that we do not omit the whole consideration of the countryside. We must ensure that very important environmental organisations are among those consulted in the setting up of this body.
6.15 p.m.
Lord Strathclyde: I disagree with the two amendments. I do not believe that they are particularly helpful. My noble friend Lord Torrington asked about coal bed methane. My noble friend is absolutely right. It is an important subject. He will know that the position is dealt with in Clause 9. However, that does not deal with appointments, which are dealt with by these amendments.
Amendment No. 4 increases the minimum number of members of the Coal Authority from two to eight and removes the upper limit so there could be no fewer than eight. The clause as drafted provides for the Coal Authority to have a minimum of two members and a maximum of eight. In practice this must mean that there have to be more than two on the basis that there may be a sudden loss of one or two members—for example, through illness or resignation—bringing numbers below the statutory minimum. So we would always have to appoint more than two.
The present numbers allow for a sufficiently broad range of experience and expertise for the Coal Authority to carry out its duties effectively now and in the future. They also permit a prudent degree of flexibility. If we had a minimum of eight people we could well end up with a Coal Authority that was insufficiently flexible and had too many people on it. Anyone who has sat on a committee knows that very often the most effective committees are those with fewer people on them. There is no magic in two or eight. It is simply the figure which we believe right to make sure that the Coal Authority carries out its functions.
Amendment No. 5 requires the Secretary of State to consult coal industry employers, trade unions, local authorities in coal mining areas and environmental organisations before he appoints a member of the authority. If the Secretary of State had to consult all those people it would take an awfully long time to get round to appointing anyone. Then, even after having consulted them, he does not have to take their advice. Therefore, the provision is meaningless. When the
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Secretary of State makes his decisions about people to put on the Coal Authority he will consult widely with a whole variety of people, some of whom are not mentioned in the noble Lord's amendment. It is absolutely right that the Secretary of State should do so because it will be his responsibility to make sure that the Coal Authority does its job and does it properly.
I note in passing that there is not a consultation requirement in the Coal Industry Nationalisation Act 1946 for appointments to what is now British Coal. I make no great point about that but the requirement was not in before and I do not think it should be in now. The process of making appointments is thorough and exacting. I know that because in my capacity as a Minister I have occasion to make appointments. It takes a great deal of time.
I hope that all the noble Lord, Lord Peston, was doing was seeking to probe our views. I trust he has the answer. I hope he will withdraw the amendment.
Lord Peston: I am afraid not. On Amendment No. 5 I was probing to some extent but I hoped at least to receive a proper answer. The noble Lord did not explain why such clauses appear in so many other Bills that the Government put forward and which the noble Lord has supported. My direct question to him on Amendment No. 4 has not been answered. I asked the noble Lord point-blank: is it conceivable that the Government would appoint two? Before deciding what to do, I should like to know whether the answer to that question is that it is conceivable because otherwise two would not be there.
Lord Beaumont of Whitley: Before the Minister answers, I must say that I did not understand the logic of his reply. He said that it would be far too great a burden and far too dilatory a process to consult all these people, but of course the Minister would consult them anyway. What on earth is the logic of that? If they are to be consulted anyway, why should it not be put in the Bill?
Lord Strathclyde: The answer to the noble Lord, Lord Peston, is that it must be conceivable. But it is extremely unlikely. That is the point I tried to make in my original answer.
The noble Lord, Lord Beaumont of Whitley, raises a greater point. I come from the school of legislation that believes that we should have less, not more. We have to depend on the common sense of Ministers either to do a good job or to make a mess of it. If they make a mess of it, sooner or later they will leave. Following that, it must be incumbent on Ministers to do what they want when they are appointing people. I simply said that if it were me I would consult as widely as possible. But I do not believe that it should be a statutory duty on the Secretary of State to consult with all these people, particularly if at the end of the day he can tear up that advice and throw it in the waste-paper basket.
Lord Peston: Unlike the noble Lord's earlier replies to all the other amendments which were satisfactory although not always convincing, I have to say to him that these answers are unsatisfactory. If his argument held on Amendment No. 5 then it would hold for all

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kinds of other legislation, but clearly other departments do not agree with that. What really appalled me was his view that "two" means "two". It would be "four" if he meant "four", but the Minister says "two". I believe that we could do with a bit of exercise at twenty minutes past six. I wish to test the opinion of the Committee.
6.20 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 49; Not-Contents, 126.

Division No. 1

CONTENTS

Addington, L.

Kilbracken, L.

Airedale, L.

Kitchener, E.

Beaumont of Whitley, L.

Mackie of Benshie, L,

Blackstone, B.

Masham of Ilton, B.

Bonham-Carter, L.

Mason of Barnsley, L.

Broadbridge, L.

McNair, L.

Callaghan of Cardiff, L

Merlyn-Rees, L.

Carmichael of Kelvingrove, L.

Meston, L.

Carter, L.

Milner of Leeds, L.

Dean of Beswick, L.

Molloy, L.

Dean of Thornton-le-Fylde, B.

Morris of Castle Morris, L.

Donaldson of Kingsbridge, L.

[Teller.]

Dormand of Easington, L.

Nicol, B.

Ezra, L.

Parry, L.

Glenamara, L.

Peston, L.

Gould of Potternewton, B.

Pitt of Hampstead, L.

[Teller.]

Rea, L.

Graham of Edmonton, L.

Rochester, L.

Gregson, L.

Rodgeis of Quarry Bank, L.

Grey, E.

Sefton of Garston, L.

Hanworth, V.

Taylor of Blackburn, L.

Haskel, L.

Turner of Camden, B.

Howell, L.

Whaddon, L.

Jay of Paddington, B.

White, B.

Jeger, B.

Williams of Mostyn, L.

Kagan, L.

NOT-CONTENTS

Addison, V.

Dean of Harptree, L.

Allenby of Megiddo, V.

Denton of Wakefield, B.

Annaly, L.

Dixon-Smith, L.

Archer of Weston-Super-Mare, L.

Donegall, M.

Arran, E.

Dormer, L.

Astor, V.

Downshire, M.

Balfour, E.

Eccles of Moulton, B.

Barnard, L.

Elliott of Morpeth, L.

Bathurst, E.

Elphinstone, L.

Beloff, L.

Faithfull, B.

Blatch, B.

Forester, L.

Blyth, L.

Fraser of Carmyllie, L.

Boardman, L.

Gardner of Parkes, B.

Borthwick, L.

Glenarthur, L.

Boyd-Carpenter, L.

Goschen, V.

Braine of Wheatley, L.

Gray of Contin, L.

Bridgeman, V.

Greenway, L.

Bruntisfield, L.

Gridley, L.

Cadman, L.

Hacking, L.

Caithness, E.

Halsbury, E.

Campbell of Alloway, L.

Harmar-Nicholls, L.

Carnegy of Lour, B.

Harmsworth, L.

Chesham, L.

Harrowby, E.

Clanwilliam, E.

Haslam, L.

Clark of Kempston, L.

Henley, L.

Colwyn, L.

Hertford, M.

Constantine of Stanmore, L.

Hives, L.

Courtown, E.

Holderness, L.

Craigavon, V.

HolmPatrick, L.

Craigmyle, L.

Hood, V.

Cranborne, V.

Hothfield, L.

Crickhowell, L.

Howe, E.

Cross, V.

Hylton-Foster, B.

Cumberlege, B.

Kinnoull, E.

572

Liverpool, E.

Sanderson of Bowden, L.

Long, V.

Seccombe, B.

Lucas of Chilworth, L.

Sharples, B.

Mackay of Ardbrecknish, L.

St. Davids, V.

Mackay of Clashfern, L. [Lord

St. John of Fawsley, L.

Chancellor.]

Stanley of Alderley, L.

Mancroft, L.

Stockton, E.

Marlesford, L.

Stodart of Leaston, L.

McColl of Dulwich, L.

Strange, B.

Merrivale, L.

Strathcarron, L.

Miller of Hendon, B.

Strathclyde, L.

Milverton, L.

Strathmore and Kinghorne, E.

Mountevans, L.

[Teller.]

Munster, E.

Sudeley, L.

Napier and Ettrick, L.

Swinfen, L.

Northbourne, L.

Swinton, E.

Onslow, E.

Tebbit, L.

Oppenheim-Barnes, B.

Teviot, L.

Orkney, E.

Teynham, L.

Oxfuird, V.

Thomas of Gwydir, L.

Park of Monmouth, B.

Torrington, V.

Pender, L.

Trumpington, B.

Prentice, L.

Tugendhat, L

Rankeillour, L.

Ullswater, V. [Teller.]

Reay, L.

Vivian, L.

Rennell, L.

Wade of Chorlton, L.

Renton, L.

Waverley, V.

Rodger of Earlsferry, L.

Westbury, L.

Rodney, L.

Wharton, B.

Romney, E.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
6.29 p.m.
[Amendment No. 5 not moved.]
Clause 1 agreed to.
Schedule 1 [The Coal Authority]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 6.
Page 67, line 26, at end insert:
("(5A) In addition, service as an officer or employee of the Authority shall be included in the kinds of employment to which a scheme under section 1 of the Superannuation Act 1972 can apply; and, accordingly, in Schedule 1 to that Act (which lists the kinds of employment to which a scheme can apply), the following entry shall be inserted at the appropriate place in the list of "Other Bodies", that is to say—
"Coal Authority."
(5B) The Authority shall pay to the Treasury, at such times as the Treasury may direct, such sums as the Treasury may determine in respect of the increase attributable to sub-paragraph (5A) above in the sums payable out of money provided by Parliament under the Superannuation Act 1972.
(5C) Where any person is both a member of the Authority and a participant by reference to his service as an officer or employee of the Authority in a scheme under section 1 of the Superannuation Act 1972, the Treasury may determine that his service as such a member (including service before he became an officer or employee) shall be treated for the purposes of the scheme as service as an employee of the Authority; and any such determination shall be without prejudice to paragraph 2 above.")
The noble Lord said: This is a technical amendment which makes it possible for Coal Authority staff to be members of the Principal Civil Service Pension Scheme. The amendment is a common-form provision, precedented in other legislation; for example, the Education Reform Act 1988. It was inadvertently omitted from the original draft for which I apologise. I hope that this amendment meets with the approval of the Committee. I beg to move.
6.30 p.m.
Lord Morris of Castle Morris: I am grateful to the Minister for that brief explanation and for his letter to me on this subject dated 26th April. Because of that date, he will understand—I hope that the Committee will also understand—that I saw the letter only 15 minutes before coming into the Chamber, so I have not been able to give it the mature consideration which it so richly deserves.
At first sight, without much consideration, and reserving our right to revisit this provision at any one or more of the later stages of the Bill, the amendment looks harmless enough. However, one question emerges and I should be grateful if the Minister could help me. The third paragraph of his letter states:
"The amendment also provides for the Authority to pay appropriate contributions to the Treasury's Civil Superannuation Vote, and gives the Treasury the discretion to allow".
Can the Minister explain why the Treasury has only "discretion" in this matter? Does it mean that the Treasury could in certain circumstances—and if so, what would they be?—refuse consent, and is an appeal possible? I do not understand the point of the word "discretion".
My only other point is to express mild surprise at the poignant irony that the Government have introduced this additional benefit in favour of the pensioners of the Coal Authority, a body which does not yet exist, when they have not fully and properly settled the pension rights of the thousands of miners and ex-miners in the MPS and Salaried Staffs' Pension Scheme.
Lord Strathclyde: I am sorry if the noble Lord received that letter only a few moments before we began. I shall have to ensure that he receives letters from me rather earlier in the future. It was designed to be helpful.
The reason why there is discretion in the third paragraph—(5C)—is that the situation may vary from time to time. Rather than make it an absolute definite, we took the view —as I said, this is well precedented in other legislation —that it was easier to give the Treasury discretion, because it would need it in order to adapt the scheme in the ways mentioned. If any further explanation is required, perhaps I can follow it up by a further letter to the noble Lord.
On Question, amendment agreed to.
Schedule 1, as amended, agreed to.
Clause 2 [Duties of the Authority with respect to licensing]:
Lord Morris of Castle Lord Morris of Castle Morris moved Amendment No. 7:
Page 2, line 24, leave out ("so far as practicable").
The noble Lord said: In moving this amendment, I should like to speak to a lot of other amendments also —to wit, Amendments Nos. 14, 15, 18, 26 and 27—although not at great length on all of them.
Amendment No. 7, to leave out the words "so far as practicable", is one to which we attach some importance. The duties and powers of the Coal
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Authority are set out in the Bill as drafted in the very vaguest of terms. The authority must carry out its functions,
"in the manner that it considers is best calculated to secure, so far as practicable".
Those are not exactly bold terms. Further, it has,
"to have regard to the desirability of securing".
It does not secure anything. It does not do anything; it has to have regard to the "desirability of securing" certain things. I suggest that that is language more fitted to a university department of philosophy than to a piece of legislation which is going to get someone to do something about the coal industry of this country.
The Government's draft paper on the role of the Coal Authority states that the authority will focus primarily on facilitating coal mining operations. That is a duty. That does not imply a neutral position. Its response to any matter which comes before it is bound to be coloured by the need to promote mining which is placed upon it. However, it is the authority which, as the licensing authority, must check the financial standing of prospective licensees, must protect third parties from loss arising from the problems caused by mining operations and must have regard to the need to secure the safety of the public, and it is the authority which has the power to make a compulsory rights order. We shall be returning to that with some power and ferocity at a later stage of the Committee proceedings.
There are many phrases in the Bill which would lead any mining company to expect the authority to assist and accept its proposals even when the authority should be expressing reservations. There is no fixed point on which any member of the public or any person with an interest in property who is adversely affected by the activities of a mining company can take issue with the Coal Authority.
We believe that the Bill should be amended to give the Coal Authority an explicit remit to balance the interests of those involved in coal mining against the interests of those who are affected by it. To achieve that balance, the authority should have clear duties laid down on the face of the Bill without escape clauses of this sort, and should be liable in damages for the performance of them.
In large parts of the Bill, the term "so far as practicable" is used, undoubtedly to try to give the Government, the Coal Authority and the private operators as much discretion as possible when it comes to compliance with parts of the legislation. They have fulfilled their duty if they have secured or given consideration to securing something "so far as practicable". They may then not do anything about it, but they have fulfilled the requirement. In our view, the use of the term "so far as practicable" serves no purpose whatever in the Bill except to provide an escape route from more onerous decisions, such as those contained in Clause 2(1) (a), which has far-reaching policy implications.
Similarly, turning to Amendments Nos. 14, 15 and 18, but in particular to Amendment No. 15, it is essential in our view that anyone embarking on a coal mining operation must have adequate experience and expertise available to them. There can be no question of the

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authority considering the "desirability of securing" such an ability to perform. A phrase like that radically weakens the ability of the authority to reject an application for a licence. It takes away its teeth. It takes away its power. Any lack of expertise would imperil others who might be affected by the works.
Despite the decision of the Committee when we divided just now, the two people who might conceivably be the sole arbiters of these decisions need to have access to a high level of expertise and experience which, even between them, they might not have. We know that,
"where two or three are gathered together [there art Thou] in the midst of them",
but I wish that we could be quite sure that spiritual grace would descend upon the members of the Coal Authority, so few in number. We are dealing with law, not with grace, and as somebody once said, "First tether your camel and then trust in God". I think that this amendment is designed to tether the camel.
The amendments have been tabled in an attempt to put some backbone into and to give some strength to the Coal Authority. We did not want it in the first place, but since we have to have it, it might just as well be a decent Coal Authority as a bad one. I beg to move.
Lord Ezra: I should like to support these amendments on the grounds which have just been put forward. I feel that these words are far too qualified and I am particularly puzzled in Clause 2(2) and 2(2) (a) to read that there should be any qualification of the duty of the authority in carrying out its functions under Part II of this Act so that persons authorised by virtue of that part should have the necessary expertise. For them to have regard to the desirability of ensuring that they have the necessary expertise strikes me as being extremely odd. Surely it should be possible to determine whether or not people have the expertise. It seems to weaken what is required of the Coal Authority to a considerable degree. It is already left to its discretion to decide these matters. I do not think that words such as "so far as is practicable" and "to have regard to and the desirability of are necessary. Indeed, they minimise the apparent intent of the Bill.
Lord Strathclyde: Amendment No. 7 to which the noble Lord, Lord Morris of Castle Morris, has just spoken—and incidentally, I am also speaking to Amendments Nos. 14, 15, 18, 26 and 27—would delete the words "so far as practicable" from Clause 2(1). This would place absolute duties on the authority which I suggest it would not be in a position to meet. While clearly it is important that the duties in Clause 2 are strong obligations, they also have to be meaningful and workable. Putting it in another way, could we expect the authority to do what is not practicable?
Lord Ezra: The noble Lord has just said that it puts an absolute duty on the authority. It does not, because the way it reads is:
"carry out its functions under Part II of this Act in the manner that it considers is best calculated … "
I do not consider that to be an absolute duty. It is left to its discretion to decide what it should or should not do. I do not see that any further qualification is necessary.
Lord Strathclyde: I take the point the noble Lord, Lord Ezra, makes, but I am advised that these words are important. They are important because "so far as practicable" is not a let-out phrase. It imposes a strong obligation. In law it means "so far as can be achieved in practice". That is why we believe that "so far as practicable" should be maintained.
Interestingly enough, my officials in the department, who were very concerned about this amendment, pressed a button on the computer to find out where and how often the phrase "so far as practicable" has been used in the past. It is interesting to know that in the post-war Labour administrations the words "so far as practicable" and "so far as reasonably practicable" appear in 49 different sections. So if it was good enough for them, I hope it is good enough now. I have a list of them; but I am merely trying to make a general point on that.
Let me take a little time now to go through each of the subsections in Clause 2(1) in turn. Starting with Clause 2(1) (a), it is not within the authority's power to guarantee that an economically viable coal mining industry is maintained and developed by licensees. That depends more on the action of licensees and developments in the market. What the authority can do is to provide information, make available the coal resource and property within its ownership; and establish a competitive licensing regime to facilitate development of the coal industry by licensees.
Similarly, with Clause 2(1) (b), there is no such thing as absolute certainty about the financial affairs of a private company. To have pretended otherwise would have been dishonest and would have placed on the authority responsibilities which no organisation could discharge. The authority can look carefully at the resources available to applicants for licences in relation to the proposed venture and the obligations that go with it and its commercial prospects. It will then have to make a judgment as to whether the licensees will be able to finance their operations and the discharge of associated liabilities, whether from revenue or by raising external funding.
It will have to look at the impact of the way in which it discharges its licensing functions on the ability of the applicant to finance the venture and the associated obligations. This might, for example, lead the authority to make its licences transferable, to help licensees to borrow money on the security of a lease of coal. The authority's duty cannot provide absolute certainty. No duty could ever do that. But it does provide reasonable assurances for third parties, particularly those to whom obligations may be owed by the private mining companies who will be licensed by the authority, but those companies will be of appropriate financial standing.
Clause 2(1) (c) reflects the exceptional nature of subsidence liabilities. The Government recognise that: the right to under-mine, which will be conferred on mining companies, is altogether exceptional and that the regime for protecting those affected by subsidence must be strong. That is why there is a separate obligation placed on the authority specifically to address the financial provision for subsidence.

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It requires the authority to look beyond the overall financial position of a proposed licensee and consider whether there is adequate financial provision for meeting both present and future subsidence obligations. This then is a very strong duty on the authority. As the licence documents which I have made available to noble Lords illustrate, we expect it to lead to the imposition of a rigorous subsidence regime on the mining companies. No such regime can provide complete certainty. The authority will be operating in the real world. That is why the words "so far as practicable" are included. But the authority can do a great deal to provide effective protection for those affected by subsidence damage.
Perhaps I should add just one further point, which I do not think was mentioned by the noble Lord. It is important. The phrase "so far as practicable" certainly does not imply that the authority is free to pick and choose which of its duties to carry out in a certain case. Specifically, the authority is not free to license a company which does not meet the requirements relating to financial standing and provision for subsidence simply because it judges it to be in the interests of the coal mining industry to do so. I simply mention that point in passing. I hope that what I have done has been to justify why the wording is as it is. I totally understand why the noble Lord, Lord Ezra, asked the question, but I hope that the explanation that I have given will suffice.
6.45 p.m.
The Earl of Harrowby: Before my noble friend the Minister sits down, I wonder if he is aware that the Coal Liaison Group is composed of a number of eminent organisations which take exactly the opposite view. The Coal Liaison Group comprises the following organisations: the CLA, the National Farmers Union, the CBI, the Royal Institution of Chartered Surveyors, the Association of County Councils, the Coalfield Communities Campaign, the British Property Federation, the Law Society, the Association of British Insurers and the Council of Mortgage Lenders. All, or most of, those organisations are hoping that this amendment will be passed, and I think that my noble friend the Minister ought to take cognizance of such a wide spread of views which are quite different from his own. They regard the words complained of in this Bill as not only undesirable but damaging, and they would like to see them eliminated.
Lord Crickhowell: Having been a little "difficult" earlier in the afternoon, perhaps I may now say that I support the Minister on this occasion. I remember once taking a civil service examination and being asked by the examiners to define in a single sentence what an educated man was. I said, "Well, it is somebody who knows that you cannot define an educated man in one sentence." I do not think that reply advanced my cause very greatly. I think the noble Lord, Lord Morris of Castle Morris, would, even in an institution of which he is the head, accept the advice of the university department of philosophy if it advanced the argument that it was wholly unreasonable to suggest that you could guarantee the economic viability of any industry
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in a world that depends upon markets, or even that you can guarantee the financial viability of an institution. Indeed, earlier this afternoon he and I spent some considerable time saying that there could be no absolute certainty about the financial affairs of the licensees; and indeed that was why we were pressing the Government to provide a guarantee, by ensuring that those liabilities were provided by the Coal Authority.
Clearly I say to the noble Lord, Lord Ezra, who I know from time to time has had to select people to do jobs, that with the best will in the world and having carried out every check one can one sometimes gets it wrong. I do not see that it is reasonable to impose an absolute duty and I believe that we must be realistic. As the noble Lord, Lord Morris of Castle Morris, knows, I would like to provide greater assurances in part of the Bill but I think that he is up the wrong track on this one.
Lord Strathclyde: I am grateful to my noble friend. I only wish that he was on my side for all occasions that I have to defend it.
My noble friend Lord Harrowby made an interesting statement and read out a long list of organisations. I hope that all of them will be able to write to me explaining why they believe the Government are wrong.
Lord Morris of Castle Morris: Perhaps I may first take issue a little with the noble Lord, Lord Crickhowell. If for many years he has been a most distinguished president of what was University College, Cardiff, and is now the University of Wales, Cardiff, and believes that a department of philosophy in any university ever gets anything done, he is much more of a politician than a philosopher.
I am grateful to the Minister for some parts of his reply. However, I found the majority of his argument unconvincing. It added no touch of verisimilitude to an otherwise bald and unconvincing narrative. He said, for example, that all the acts of the Coal Authority must be "meaningful" and "practicable". Of course they are; all our acts ought to be meaningful and practicable. However, if we were to go through life with the phrases that occurred in these amendments hung round our necks then in the course of a year we would do no more work than a department of philosophy.
The Minister says that he is advised that the words are important and that they impose a strong legal obligation. I suggest that they do not impose a particularly strong legal obligation. In fact, the legal obligation would exist firmly and strongly even if the words were not there. However, I am glad that he has gone into the matter in such detail that he has caused officials in the department to press some computer buttons and find out what the Labour Government long ago thought was right and proper. If only there had been computers for the postwar Labour Government, he might not be sitting there today. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 8 and 9 not moved. ]
Lord Haslam Lord Haslam moved Amendment No. 10:
Page 2, line 38, at end insert:

579

("( ) that sufficient investment in research and development is provided to develop and maintain the British coal industry's strength in the fields of clean coal technology, mining methods and health and safety.").

The noble Lord said: My anxieties are focused on the lack of reference in the Coal Industry Bill concerning research and development activities and in particular clean coal technology.
British Coal has had two research establishments. Much of the world's most advanced deep-mining techniques were developed at the mining research and development establishment at Bretby. It has now closed and its functions are being fulfilled by its much smaller successor, the Technical Services and Research Executive. I believe that plans are being discussed for the future of the highly effective international mining consultants, and it is to be hoped that a worthwhile relationship will be developed between these two bodies.
This, however, is a limited response to the needs of the industry in relation to developing new mining technology and health and safety improvements. The bulk of the cost of the work at Bretby has been carried for decades on British Coal's profit and loss account. Contrast this with the US, where the private sector coal industry has virtually had a cheap ride, as this type of research is provided for it by the US Bureau of Mines, which is a government agency. It has just announced a new programme, which includes such topics as environmental research designed to clean up mine waste and health and safety research focused on developing accident prevention technologies and processes which significantly reduce mineworkers' risks.
The second unit is the coal research establishment at Cheltenham. This is regarded as a world centre of excellence in its activities on coal utilisation and more recently on clean coal technology. Its help and advice is currently being sought in 17 countries, including China and the Ukraine. Clean coal technology is the key to the future of the coal industry, as it will markedly improve the efficiency of coal power generation and will greatly improve the environmental characteristics of coal burning. Although coal burn is declining in western Europe, worldwide it continues to expand and currently stands at 3.5 billion tonnes per annum, of which the UK now contributes only a meagre 70 million tonnes. If the greenhouse effect is eventually proved to exist, UK coal burn will account for less than 0.5 per cent. of the resources and the whole European Union for only 2.5 per cent. China, on the other hand, now burns a billion tonnes of coal per annum and plans to raise consumption by the end of the decade to 1.5 billion. There is no hope of persuading the Chinese to use gas or nuclear energy as an alternative on any significant scale. Thus, CO2 emissions worldwide will continue to grow unless clean coal technologies are quickly introduced, particularly in those developing countries such as China and India. However, the technologies will have to be developed and proven in the West.
In another place the Government have claimed that they have already established a firm foundation for coal research in the UK. They have increased funding from £3 million to £7 million a year until 1995–96. But even that will be less than 5 per cent. of the cost of nuclear
580
research in this country. I doubt whether the nuclear industry has a happier future than the coal industry. The Government are also establishing the almost mandatory advisory committee. These I believe rather cynically tend to be a recipe for inaction. The Government also expressed every confidence that the privatised coal companies will be able to find the most appropriate mechanisms for co-ordinating their activities where there is benefit to be derived from doing so. All experience points to this being a highly optimistic assumption.
Compare all this with Japan, which relies primarily on imported coal but is spending 50 times as much on clean coal technology as the UK. The US provides an even more dramatic contrast. Since the US Department of Energy announced its clean coal programme in 1990 there have been five rounds of clean coal projects funded by it, which in toto have received 7 billion dollars in federal funding. The basic formula for these projects has been a 50–50 cost-sharing between the US Government and the private sector participants. In practice, government funding has amounted to about 40 per cent. on average. Most of the companies participating have been power utilities, construction companies and equipment manufacturers, with the coal companies playing a relatively minor role.
Clearly this US programme is much more than one could reasonably expect from the UK alone. But, recognising the international importance of this issue, I am disappointed that the European Union and the member governments' energy departments have not worked out a cohesive policy on these lines. This disappointment also extends to the lack of interest shown by comparable European companies in developing clean coal technologies for use both at home and in their growing international involvements. This would obviously be a long-term initiative should it be undertaken. Meanwhile, it underlines the need to sustain and enhance the outstanding role of the Cheltenham establishment.
To sum up, my contribution is more in the nature of a probing amendment focused on how the Government plan to rectify the virtual omission of plans and procedures to deal with the research topics listed in this amendment. I commend Amendment No. 10 to the Committee. I beg to move.
Lord Ezra: I support the amendment so effectively moved by the noble Lord, Lord Haslam. I too was personally involved in building the research capability of the National Coal Board, as it was known in my time. On the basis of limited resources, we established a worldwide reputation. As regards Bretby, the mining research establishment, we devised ways in which long-haul mining was totally revolutionised throughout the world. In the case of the Cheltenham coal research establishment, I need hardly remind Members of the Committee old enough to remember: the famous Bronowski briquette was developed there. It was our response to the clean air legislation of the mid-1950s. Ways in which coal could be burned smokelessly and with minimum noxious emissions also gained a worldwide reputation.

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The noble Lord, Lord Haslam, explained that there is a vast amount of work still to be done as regards the development of both mining and coal technology. It seems most unfortunate if, as a result of the Bill, yet another great achievement of the British mining industry in the past 50 years should be threatened, because I cannot see how that capability can be maintained if no reference to it is made in the Bill and if it is left entirely to the new owners. They will have a great deal more on their hands than concerning themselves with long-term research. They will have limited resources to devote to that end and they may not agree among themselves. In fact, that is most unlikely to happen. As the noble Lord, Lord Haslam, said, countries which have private mining enterprise, nevertheless have a system for maintaining, through statutory arrangements, central coal laboratories of one kind or another. They expend vastly more than we have ever done and certainly much more than we are likely to in view of the lack of new arrangements.
I hope that the Minister can give us some comfort in this area, which worries a number of us.
7 p.m.
Lord Mason of Barnsley: I rise to support the amendment to provide:
"that sufficient investment in research and development is provided to develop and maintain the British coal industry's strength in the fields of clean technology".
I am particularly interested in fluidised bed technology. I was Minister of Power in 1968 and the research establishment at Leatherhead received my first tranche of money in order to begin research into that technology. Indeed, I had to get half a million dollars from the Americans in order that we could start the research into and development of fluidised bed technology.
I remember in particular how difficult it was at the time, but foreign interests were involved right from the outset. With coal technology based on a fluidised bed of coal, we visualised cleaner, more efficient power stations based on coal. That has been a long, painstaking development. Eventually a prototype was built at Grimethorpe, near Barnsley. A number of foreign countries became financially and technologically involved, especially Germany and the United States of America.
I received the impression that the Government's interest appeared to wane as that fluidised bed technology was developing at Grimethorpe. I put down a Written Question in 1988:
"What is the estimated cost of the research and development of the fluidised bed combustion technology by the British Government and each of the foreign contributors to this development".
The noble Viscount, Lord Davidson, replied:
"Department expenditure for British Coal's participation in the pressurised fluidised bed combustion work at Grimethorpe under International Energy Agency auspices amounted to £17 million during the period of 1976 to 1984. The National Coal Board contributed £3 million. The Governments of the United States of America and the Federal Republic of Germany each contributed £20 million during this period".—[Official Report, 22/2/88; col. 1042.]
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It did not appear that the necessary finance was forthcoming from the British Government.
I notice that the Select Committee on energy deplored the fact that the United Kingdom was giving away the development of pressurised fluidised bed technology. The Coal Research Establishment was described by the Parliamentary Office of Science and Technology as a world centre of excellence. Indeed, POST feels that it would be a tragedy for the nation if the technology developed at that establishment were lost to overseas research and development establishments which, while recognising its worldwide potential, are putting huge sums of money into its development, especially the Germans, Americans and now the Japanese.
Perhaps I may ask, following from the developments in relation to fluidised bed technology, what is happening about British Coal's Topping cycle clean coal technology, which is a development from the fluidised bed work. Is not the coal task force, set up by the Department of Energy to deal with the future of coal research, concerned that we may be slipping behind our overseas competitors as regards clean coal technology and the further development of fluidised bed technology?
In The Times on Wednesday, 13th January, there was an article which had the headline:
"Britain gets another chance to embrace clean coal technology".
The article went on to say:
"A Swedish manufacturer has achieved commercial success with an idea for clean coal technology that was developed, but then abandoned, by British Coal. If British Coal is to have a long-term future, the use of such a technology to supply Britain's power needs is critical.
The technology has suffered from a lack of interest and piecemeal funding. ABB Carbon, a Swedish company owned by Asea Brown Boveri, of Switzerland, has three plants running, in Sweden, America and Spain, and further orders from Japan and the Czech Republic. It is now looking for partners to sell its pressurised fluidised bed combined-cycle technology back to British electricity generators".
We do not have one working power station. It appears that that is a sad reflection on our own initial efforts and I hope that the Minister can give us some assurance along the lines of the amendment.
Lord Morris of Castle Morris: The purpose of the amendment is to oblige the Government to underwrite the future of the Coal Research Establishment and the Technical Services and Research Executive and other industry research bodies. We put forward the amendment because, so far as I can see, there is absolutely no direct mention of R&D in the course of the Coal Industry Bill. I should be grateful if the Minister would cause his officials to press buttons all over their computers and bring forward a list of the occasions that I have overlooked. If he can find one or two such occasions, my point will remain about that vitally important subject. If we are to have a viable and economic coal industry in this country, developed in this country—and not just run down in this country—as the Bill requires, R&D is absolutely essential. No commercial company cuts R&D unless it is on the very edge of bankruptcy because it is the shortest way to receivership.

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We are concerned that as British Coal disappears, so will the Coal Research Establishment at Cheltenham and the TSRE, currently located at Bretby. Private owners, successor companies, whose major motive is profit—and rightly so—will simply not have the capital or the rates of return to make the kind of commitment which is vital to proper R&D.
What is more, in competitor countries it is accepted that the state must underwrite R&D in its coal industries due to the fact that the market simply does not provide. That shows that it regards it as necessary and is prepared to devote resources to it. For example, in Australia, which is no mean exporter of coal, especially to this country, 150 per cent. tax rebates are offered for R&D. In the United States, 700 million dollars per year from Federal Government are spent on R&D. In South Africa, very much in our thoughts today, there is a levy on coal production for safety-related research. In comparison, UK clean coal R&D funding over the next two years will be just £33 million, of which only £6 million will come from government. Now, British Coal has an excellent record in coal R&D both in the area of coal utilisation and coal mining technology and in mining safety—second to none. Coal utilisation R&D has grown in importance as preoccupations with the impact of fossil fuel use on the environment have grown in public estimation over the past 20 to 25 years.
British Coal's research establishment in Cheltenham has centred on three main aspects of coal R&D: fuel efficiency —how to get more usable energy while burning less coal; emissions reduction—how to burn coal more cleanly at higher efficiency in order to eliminate wherever possible acid rain emissions and reduce the emission of global-warming carbon dioxide; and the fuel handling and waste disposal aspects of coal use. That area of research covers fuel storage and dust emissions control as well as the environmentally acceptable methods of ash and other waste product disposal. Its record again is second to none. Other countries come to it, send people to it to learn what we have discovered.
Coal mining R&D has been carried out at BC's technical support research establishment at Bretby in Staffordshire, and this work has centred largely on improving coal mining efficiency and safety, for the most part by the development of automated long haul mining systems, and we all know how successful they have been.
The TSRE has undoubtedly contributed to international improvements in mining safety while at the same time helping BC massively to reduce costs and improve extraction efficiency through its new mining technology developments. Why throw this away? We are in the lead. Let us stay there. We are not talking about vast amounts of money. There are all manner of ways—we can go into them at a later stage if the Minister wishes us to—in which this small amount of money could be found. What I beg him to do is not to throw the baby out with the bath water, not to get rid of R&D as a cheap means of effecting quick savings; not to refuse to saddle successor companies with some responsibility for this. It is an urgent and vital matter.
Lord Wade of Chorlton: I hate to disagree with the noble Lord, Lord Ezra, and my noble friend Lord Haslam, but to ensure R&D expenditure in the coal industry it is not necessary to write it into the Bill. The noble Lord, Lord Morris of Castle Morris, referred to R&D development. Most of the R&D in this country is carried out by private companies. About half the total expenditure on R&D in the UK is provided by government (about £3.5 billion) and the rest is provided by industry. The pharmaceutical industry is probably the most technologically advanced industry in this country. Most of its R&D comes from investment within the industry itself.
Surely it does not follow that because we have not written into the Bill that it is the responsibility of the Coal Authority to carry out R&D it will not happen. To make sure that R&D is carried out within the industry, it is much more important to ensure that the Government transfer the industry to companies which are, as my noble friend Lord Haslam said when introducing the first amendment, top quality companies which will be able to take a large part of the industry and run it as a major world industry, as was said on Second Reading. R&D investment by the companies involved will have much more to do with the quality of the companies that will run the industry than with the Government deciding now that they will make a contribution.
The other point is that the Government already invest about £3.5 billion a year in R&D development throughout industry. The noble Lord, Lord Morris, referred to £6 million. That is peanuts as compared with the total amount of money now spent by government on R&D developments across the whole range of manufacturing. It is essential that government see the. importance of coal technology in the development of the whole of their R&D investment, which I am sure will continue. No doubt my noble friend will be able to give assurances on that point. R&D in such sectors is already something that the Government support and encourage.
I say with great trepidation that I disagree with some of the proposals contained in the Bill, but at the same time I believe that, once an industry is transferred into the private sector—which is what the Bill is about—it should be treated like any other part of the private sector. We have not passed a resolution in this place which says that we should provide R&D for agriculture, the pharmaceutical industry or the engineering industry. Companies in those sectors make large contributions to R&D. The Government also make large contributions to R&D development in those sectors. I am sure that once the Bill has been passed the same will happen here.
7.15 p.m.
Viscount Goschen: The Government recognise fully the importance to the UK coal industry of ensuring that full advantage is taken of advances in coal research and mining technology. For example, the noble Lord, Lord Mason of Barnsley, mentioned the important issue of fluidised bed technology which is now commercially available. It must be primarily for the industry to decide what research will need to develop, where appropriate,

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in partnership with the Government through bodies such as the Advisory Committee on Coal Research and the programme conducted by the European Commission.
The Government have already established a firm foundation for coal research in the UK by, first, increasing government funding, as my noble friend Lord Haslam said, from under £3 million to £7 million a year up to 1995–96. In fact, in the year 1993–94, funding amounted to £7.8 million, more than 10 per cent. up even on what we stated in the coal review White Paper. Our Advisory Committee on Coal Research will be undertaking a review of the programme and future funding requirements in 1995; industry will be involved fully in that process through its membership of the committee.
We have also established a new advisory committee on coal research to replace the Coal Task Force to advise on UK coal research needs across the board. UK industry and universities are playing a leading part in the work of that new committee. We have also established collaborative research links between UK industry and universities and other EC countries and the US.
Like my noble friend Lord Wade of Chorlton, we do not believe that there is a need for the authority to take on a role of co-ordination, which is already being fulfilled adequately. The Department of Trade and Industry's coal research and development programme is increasing and is contributing to some 115 projects with a total value of over £170 million. The department's contribution amounts to some £35 million over the life of the project and is instrumental in enabling it to attract the necessary external funds to go ahead.
Since the coal review White Paper, we have initiated over 60 coal research projects, covering coal utilisation and mining issues. Many more are at the planning stage, involving the CRE as well as UK industry, universities and overseas agencies. We intend to publish later this year a detailed strategy paper setting out our future plans for coal research and describing the work under way in the present programme.
The noble Lord, Lord Morris of Castle Morris, mentioned the Coal Research Establishment. The future of the CRE is a matter for British Coal, which I understand has taken no decisions on its future. However, the Government believe that the best way of widening the opportunities available for the CRE in the world market is for it to become an independent organisation. The increased support the Government are offering over the next two years will ensure that the CRE's senior management has sufficient time to develop further the CRE's business and attract funds from elsewhere. I might mention in particular that the CRE is already being highly successful in obtaining overseas business, and some 26 contracts worth over £1.5 million are now under way. Only last week a major new contract was announced for technical assistance to the Ukraine.
Turning to the important issue of health and safety research and development, which again was raised by the noble Lord, Lord Morris, the Health and Safety Commission's report on the post-privatisation safety regime pointed out its executive's work in this
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important area and noted that the commission will continue to encourage health and safety related research by British Coal's successors. However, the commission was very clear that it must be for the new employers to decide what research is required to meet their obligations under health and safety law.
Nevertheless, the commission highlighted the expertise in certain areas that is contained in British Coal's Technical Service Research Executive relevant to the issue of health and safety, and drew attention to the desirability that that expertise should continue to be available after privatisation. In the light of that advice the Minister for Energy announced in another place on 21st March that the Government have approved expenditure of £2.1 million between 1995 and 1998 to ensure the completion of British Coal's current health and safety research and development programme. I hope that the Committee will agree that this is a major commitment which will ensure that the expertise necessary to carry out important health and safety research will continue to be available to the new owners for a considerable period after privatisation.
The Coal Authority is intended to be a non-interventionist body and should not support research and development work which is more appropriately co-ordinated by the industry itself. We have every confidence that future coal companies will be able to find the most appropriate mechanism for co-ordinating their activities where there is benefit in doing so.
In the light of those assurances and that explanation, I invite my noble friend to withdraw his amendment.
Lord Dormand of Easington: Before the noble Lord sits down will he say a little more about the review? I understood him to say that there will be a review. For example, is it to relate only to the coal industry? After all, we are debating the coal industry tonight. Is he talking about research and development across the whole range of industry, including the public sector? It would be very helpful if he could clarify that point. Finally, can he say when the review is likely to start and when it is likely to finish, in broad terms?
Viscount Goschen: To clarify the points raised by the noble Lord, Lord Dormand of Easington, the strategy paper that I mentioned was intended to set out our future plans for coal research specifically. It will describe the work under way in the present programme. I believe that the strategy paper will be published later this year, but I am afraid that I cannot be more specific about the noble Lord's inquiry tonight.
Lord Morris of Castle Morris: Before the noble Viscount sits down again, could I ask him whether he can help me? I may have overlooked something. He mentioned in his reply that universities are involved in coal R&D. I would be most obliged if he could let me know which universities and to what extent. I do not expect him to do this necessarily off the top of his head standing at the Dispatch Box, but it is a genuine inquiry. So many departments of mining and mining research have been closed down in British universities over the

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past. 15 to 20 years that I should be very interested to know who is left and what they are doing. If the noble Viscount could write to me I should be most grateful.
Viscount Goschen: The noble Lord, Lord Morris, is right that I cannot answer him specifically without notice of that question. I shall, of course, find the information that he requires and write to him on the point.
Lord Haslam: This is my maiden amendment so I am not too sure about the etiquette for dealing with the situation.
I believe that in any industry, whether it is manufacturing or extracting, there are three basic elements. There are production, selling and research and development. The Bill does not refer at all to research and development: that does not give it credibility. It is important that something is incorporated in the Bill in that regard.
The other point that has come home to me today on a broader front is the fact that, if we were dealing here with a unitary privatisation, it would be very much easier to accept what some Ministers are saying. If at the end of the day the industry is fragmented, as I said at Second Reading, that will be very destructive. Every mine that gets into trouble will do three things: first, it will stop development; secondly, it will stop investing in safety, which is very important; and, thirdly, it will stop investing or collaborating in any kind of research. Therefore the situation is very different if the industry is fragmented as opposed to a unitary privatisation. We must remember that at all times.
Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 11:
Page 2, line 38, at end insert:

("( ) that energy efficiency and fuel cost savings are promoted in both the domestic and industrial coal market sectors.").

The noble Lord said: This is a substantive amendment intended to ensure that the coal industry as a whole retains its responsibilities in the areas of environmental improvement, energy efficiency and customer support.
I may say, without fear of successful contradiction, that when this amendment was originally suggested to us it was a great deal more emphatic and a great deal more extensive than it now is. People were quite cross. In its original form it adjured the Secretary of State to require the coal industry to promote energy efficiency and fuel cost savings in the domestic and industrial fuel market sectors, to encourage best environmental practice in the design and operation of solid fuel domestic appliances and industrial boilers, and to administer a levy raised on all customers of less than 5,000 tonnes per site per annum outside the electricity and steel sectors for the purpose of achieving the above objectives, the size of the levy to be determined by the Secretary of State on an annual basis. We thought that that was coming on a bit heavy.
We have sympathy with the intention behind the amendment to stress the vital importance of energy efficiency. I attack Her Majesty's Government, I am afraid, in that I do not believe that over the past four or five years they have given the high priority to energy efficiency which they might have done. I shall be grateful if the Minister will refute that in his strongest way. I should be quite pleased to have it refuted, but I am not convinced at the moment that it has been a very high priority, or a successful one, for Her Majesty's Government.
British Coal presently provides a range of customer support services which over the years have resulted in higher fuel efficiency and improved design, both in plant and equipment, and in better environmental performance. With the passing —the burial—of British Coal, there is again no indication from the Bill that these essential functions will be retained. I would have been a much happier noble Lord tonight had I found on the face of the Bill that the Government were concerned to do something about retaining British Coal's achievements in energy efficiency. Without such a service there is every likelihood that coal will sustain further contraction in the domestic and industrial markets, losing out to other fuels which benefit from energy saving trust incentives to customers to invest in new and refurbished equipment which saves energy and reduces running costs.
The energy saving trust for coal would assist in—I shall not use the tired cliché "levelling the playing field", let us say evening up the odds, balancing the seesaw or putting things a bit more on a flat level—allowing coal to compete with other fuels on a fair basis while making an important contribution to increased energy efficiency and sustainable development.
Would the Government consider, say, a modest levy of 1 or 2 per cent. of the cost of each tonne of coal sold into the domestic industrial market? That could generate sufficient revenue to ensure that a major service to both consumer and the environment would be provided; and, if not why not? Such a scheme would be aimed at the small and medium end user and individual households where a shortage of capital to invest in energy efficient methods of energy use may well hinder investment in energy saving. The cost to the customer would be more than offset by energy savings and the potential for reduced fuel costs, given the steady reduction of coal production costs, and such a service would benefit the more elderly beneficiaries of the concessionary fuel scheme who, given the cost base rather than the tonnage base nature of the scheme, face very real fuel hardship when required to convert to higher cost smokeless fuel.
I am suggesting only one possible way of increasing energy efficiency. I shall be quite happy if the Minister could produce a few more. I offer it only as an example. Our amendment seeks to persuade the Government of the general desirability of and the high priority which should be given to improving energy efficiency in the Bill. In that spirit, I beg to move.
7.30 p.m.
Lord Ezra: I support the amendment. In doing so, I remind the Minister that such a clause has been inserted in both the Gas Act and the Electricity Act. When they were being debated in this House a great deal of attention was attached to those clauses. I believe that the Bill would be much weaker if no reference were made to energy efficiency. The Government have recently shown their commitment to the Rio proposals. They have brought out a number of documents which have stated in terms how this country will be able to reduce its CO*2 emissions and to increase its fuel efficiency. A figure of something like 20 per cent. has been mentioned as fuel savings that can be made.
Over the years the coal industry has contributed substantially to savings in its sector. Had the industry been privatised in the way in which the noble Lord, Lord Haslam, and myself preferred—that is, on a unitary basis, in order to enable it to compete more effectively against other fuels—I would not have pressed so strongly for the amendment. However, in view of the way in which the industry is now being privatised, with a number of individually operated mines, and five groups of mines if buyers for them can be found, I fear that the impetus towards energy efficiency which had been developed under the National Coal Board and British Coal successively could diminish.
There is an extremely strong case for introducing the amendment to the clause setting up the duty of the Coal Authority. I hope that the noble Lord is convinced that we should not leave the coal Bill without that obligation, whereas we have it in both the Gas Act and the Electricity Act.
Lord Strathclyde: Perhaps I may briefly reply. The amendment would give the Coal Authority a duty in carrying out its licensing functions in relation to the promotion of energy efficiency and fuel cost savings in the domestic and industrial coal market sectors. Important though energy efficiency and fuel cost savings are, they are not matters in which it would be appropriate for the authority to have a role. That is what we are dealing with. I believe that it is vital to the success of the Coal Authority and therefore relevant to the future success of the coal mining industry in this country that the Coal Authority is focused on functions directly linked to coal mining.
I am absolutely delighted that the noble Lord, Lord Morris of Castle Morris, did not come forward with his initial amendment and that he saw at least some sense in coming forward with an amendment which makes some sense although I do not agree with it.
I do not agree also that there is any doubt about the Government's commitment to energy efficiency. Unfortunately the noble Lord, Lord Morris of Castle Morris, picked the wrong Minister with whom to have an argument about energy efficiency. Immediately after the election I became Minister with responsibility for energy efficiency when the Energy Efficiency Office came over from the Department of Energy to the Department of the Environment. I was delighted to launch a variety of campaigns. "Helping the earth begins at home" was a memorable campaign, I hope
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firmly implanted in the Opposition's mind. "Making a corporate commitment" campaign was very important. I have lost count of the number of receptions that I have attended hosted by the noble Lord, Lord Ezra, dealing with the question of energy efficiency. I am delighted to tell the Committee that the annual budget of the Energy Efficiency Office is currently more than £100 million. The noble Lord, Lord Ezra, mentioned our commitment vis-à-vis the Rio conference and so on.
The noble Lord, Lord Morris of Castle Morris, asked: why not a levy? It will not have escaped his notice that recently the gas regulator said that there should not be a levy for the gas industry. Obviously Government will have to have another look at that. But I am not convinced that a levy approach is the right one for the coal industry. Increasingly consumers are well aware of the advantages of energy efficiency. They are making informed decisions on the best advice available on what kind of industry is most energy efficient. It will be up to the sellers of coal, the domestic market, and to the commercial market to demonstrate just how efficient coal can be when compared with its competitors.
No doubt the noble Lord sees an analogy between the Coal Authority and the utility regulators such as Offer who have roles in relation to energy efficiency. But it is important to recognise that the utility regulators have a direct relationship with and responsibility to consumers which the Coal Authority will not. That is not an invitation to the noble Lord to put forward an amendment to that effect when we reach Report stage.
I hope that I have demonstrated, first, that the Government have a clear commitment to energy efficiency; secondly, we do not believe it is necessary to put those words in the Bill; and, thirdly, why the Coal Authority is different from the regulators of the other power utilities.
Lord Morris of Castle Morris: I am grateful to the Minister for his reply. I am delighted that he has enjoyed the receptions to which he went. I was very interested in energy efficiency in the days before it was transferred with the rump of the Department of Energy into the bowels of the DTI. It was not at the very highest point of the then Minister's list of priorities. I am delighted that the noble Lord facing me across the Dispatch Box is so well informed and so deeply personally concerned in matters of energy efficiency. I leave with him the question to which I invite him to come back with an answer at a later stage: if not the Coal Authority, as the prime mover in energy efficiency, then who? Leaving that question in the air before we go for our dinner, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Goschen: My Lords, I beg to move that the House do now resume. In moving the Motion, perhaps I may suggest that the Committee stage begin again not before twenty-five minutes before nine o'clock.
Lord Hylton: Is not the noble Lord cutting five minutes off this one-hour limited debate?
Viscount Goschen: No, because I said "not before".
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Turkey: Kurdish Minority
7.39 p.m.
Lord Avebury Lord Avebury rose to ask Her Majesty's Government what is now their policy on the Kurdish minority in Turkey.
The noble Lord said: My Lords, six months ago we had a debate about the situation of the Kurdish minority in Turkey. It was thought appropriate that we should return to the subject today in the light of the considerable deterioration of the human rights situation in the region, as evidenced by many witnesses. The noble Baroness, Lady Gould, the noble Lord, Lord Hylton, and I spent nine days there recently. We also had the opportunity of discussing the situation with the Turkish ambassador, with senior officials in the Foreign Office to whom we are most grateful, with experts from SOAS and Chatham House and with many individual Kurds.
There is no time to review the findings of our mission in detail this evening, but we have sent the Minister a preliminary and incomplete draft of our forthcoming report which I hope will be helpful. I simply wish to list the headlines in the short time available.
We spent seven days travelling around the region, closely escorted by armed security men who said they were there for our protection. In fact, they were there to make notes of everything that was said to us and in some cases even to video the witnesses who came to speak to us. So one can imagine that very few people wanted to take the risk of having their words put down by the security forces and used against them later. The security forces also prevented us from going into villages or travelling off the main roads; in short, they frightened off people who wanted to tell us about what life was like under an occupation force.
The Turks pretend that they are dealing with a few terrorists. But they have at least a quarter of a million men under arms in the region and some estimates show the number as high as 500,000. It was stated semi-officially in March that an extra 150,000 men had been deployed for an operation that was due to continue until June on the authority of a committee made up in part of senior security personnel. The armed forces of the Turkish state deployed jet bombers, artillery, helicopter gunships, tanks and armoured cars. They have road blocks every few kilometres where they stop vehicles, check passengers' identity and sometimes minutely search their luggage, as happened to us on one occasion.
What the Serbs have done to Gorazde, the Turks have done to many Kurdish towns and villages. Among the towns that have been bombarded by artillery and tanks are, Sirnak, Cizre, Kulp, Altinova, Yuksekova, Silvan and Cukurca. Estimates of the number of villages destroyed and evacuated range from 874, according to the Turkish Daily News, up to 1,800. There is abundant eyewitness testimony to the killing of civilians and the devastation of houses and businesses.
The conflict between the armed forces and the Kurdish rebels of the PKK is subject to common Article 3 of the Geneva Conventions, which prohibits attacks on civilians and extra-judicial killings and obliges the combatants to care for each others' sick and wounded. It also allows the Red Cross to offer its services to the parties to the conflict, and the ICRC has repeatedly done so since 1983. The president of the ICRC tried yet again when he met President Demirel on 27th January but was rebuffed. Cannot the European Union try to persuade the Turkish authorities to accept the services of the ICRC? That would have no implication for the status of the parties to the conflict but could help to alleviate the mass of civilian suffering.
It seems anomalous to me that in every other conflict in the CSCE region the parties are ready to accept help from the international community to stop the fighting and to arrive at political solutions but in this war the Turks are determined to reach a purely military solution. There are no UN observers, no CSCE mediators, no NATO planes watching the fighting, not a squeak of protest from the European Union. Yet the Turkish authorities are engaged in a major operation of demographic engineering, rivalling the ethnic cleansing which has aroused so much condemnation in Bosnia. Hundreds of thousands of non-combatants have been forcibly uprooted from their homes, ending up as internal refugees in the West or as shanty town dwellers on the outskirts of the capital of the region, Diyarbakir. Surely this demands the attention of the CSCE, which has the power to intervene if enough member states want to act.
The Turkish authorities maintain that they use military power only to counter the attacks of the PKK which they call terrorism. We condemn the attacks on civilians by the PKK and we have called on it, as we do on the Turkish state, to observe the laws of war. But we have to point out that, with few exceptions, the PKK's operations are against the Turkish military and their auxiliaries, the village guards, whereas nearly all the operations conducted by the Turkish armed forces are against non-combatants. The disparity between the military forces employed on both sides is enormous.
The open attacks on the civilian population of the Kurdish region have been accompanied by a striking increase in the rate of disappearances, according to Amnesty International. I have heard from Ankara of two more cases in the past few days. Mr. Serif Avsar was abducted at gunpoint from a shop in Diyarbakir at 11.30 on 22nd April by seven armed men and taken to police headquarters. Yet the authorities denied that he was ever detained. Mr. Hasan Demir, a 28 year-old lawyer, disappeared on Tuesday last week after being taken to the notorious Gayrettepe political police headquarters in Istanbul. There are many similar cases where the victims are known to have been in custody and yet later are found dead. I hope that as a result of mentioning those two cases this evening some action may be taken to find out what their fate is and perhaps even to save their lives. Many others have been shot or knifed in broad daylight on the streets, including one MP, Mr. Mehmet Sincar.
Kurdish opponents of the state who are taken into custody and who survive are almost invariably tortured, according to the US State Department's country reports on human rights. Turkey has the unenviable distinction of being the only country to have been reported on by the UN Committee against Torture under Article 20 of the convention, and in his latest report the UN rapporteur on torture, Dr. Nigel Rodley, devotes more space to Turkey than any other country in the world. A person detained under the anti-terror law or detained in the emergency region for offences that are dealt with before the state security courts can spend up to 30 days in custody before appearing before the court. That gives the police carte blanche to do what they like. There is almost total impunity for any act of violence, including murder, committed against detainees.
Among the victims of the death squads have been eight journalists from the pro-Kurdish newspaper 2zgur Gündem. Fifty-three journalists from the same paper have been detained and subjected to varying degrees of ill-treatment and torture. The chief editor, Ms. Gurbetelli Ersoz, was arrested on 10th December and has been in custody since then, and now the paper has been closed down. The Writers in Prison Committee lists 200 cases of persecuted writers and journalists between August 1993 and January 1994 and, again, in that report, Turkey has by far the largest entry of any country in the world.
The pro-Kurdish Democracy Party has borne the brunt of sustained attacks. Those attacks forced it to withdraw from the local elections and it is about to be closed down, as its predecessor was. By using physical and legal violence against the party, the Government have sent a signal to the Kurds that political solutions to their grievances are not available. When the PKK offered a ceasefire in March and said that it was ready to discuss federalism or other constitutional settlements falling short of total independence, its initiative was dismissed out of hand, again emphasising to the Kurdish people that unconditional surrender is their only option.
In the name of humanity, to end a devastating conflict which is bringing Turkey to its knees economically and which has given a boost to fundamentalists who may be poised to end Turkey's era of secularism, Britain and the European Union must take initiatives to stop the violence and persuade Turkey to listen to the voices of the Kurds.
7.48 p.m.
Lord Archer of Weston-Super-Mare: My Lords, perhaps I may open by thanking the noble Lord, Lord Avebury, for initiating the debate, which he generally seems to do every quarter. It is almost becoming a regular quarterly debate. He did not make much of the point and therefore I wish to ask the Minister whether she is able to report to us the situation of the six Kurdish Members of Parliament in Turkey who seem still to be in gaol. What is their situation and are they able to have access to lawyers and to Amnesty International, in order that their cases may be heard in a civilised way?
Whenever the noble Lord, Lord Avebury, addresses this House on the matter of the PKK, you are left with
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the impression that they are all saints and the Turks are all sinners. Most of us know that there are very few organisations in which that is absolutely true. Therefore I should like to place on record, with the Minister present, in the hope that she might pass it on to the Turkish Government, my delight from the viewpoint of the Iraqi Kurds at the fact that the electricity in Darhuk, which Saddam Hussein had turned off, is now working. Indeed, perhaps I may pay a personal tribute to Mr. Jalal Talabani, who negotiated that particular piece of work, and congratulate him on that achievement, and on yet another feather in his cap in putting Saddam Hussein in his place.
While I have the Minister's attention perhaps I might also mention the distress that we all felt at the terrible tragedy of the helicopters being shot down. Could she convey that feeling to those British families who are involved? When I last went to Iraqi Kurdistan, I had the privilege of meeting the lieutenant-colonel and the major and of being told of the work that they were doing. It is worth reminding the noble Lord, Lord Avebury, in the politest possible way, that those planes are stationed in Turkey and fly over and protect Kurds in Iraq. It is because of the goodwill of the Turkish Government that we are able every six months to renew the contract and allow that work to continue.
I also remind the Minister that the plight of the Kurds is no different today from what it was six months ago, a year ago or two years ago. Arbil is a mere 20 minutes from the border; and Sulaymaniyah is a mere 10 minutes from the border. When I say 10 minutes, I mean 10 minutes in one of Saddam Hussein's tanks. Saddam Hussein can come over whenever he likes and flatten that city in a matter of moments.
One of the most frightening sights that I have ever seen in my life was that of packed bags in corridors while people waited in the fear that they would have to go to the hills. I hope that when the Minister replies she will remember the Kurds in Iraq as well as the Kurds in Turkey.
7.52 p.m.
Baroness Gould of Potternewton: My recent visit to Turkey with the noble Lords, Lord Avebury and Lord Hylton, left me with the profound impression that the Kurdish question can only be solved by political, and not military, means; by dialogue and not by bloodshed. I hope that all Members of this House will take the opportunity to read the report that we are to produce with a great deal of care.
No one can deny that the Turkish Government face a serious problem of political violence in the south-east province, and no one could give support to terrorist action. But the solution will not be achieved by widespread and systematic human rights violations. It will not be achieved by a repression of civil liberties or by the suppression of free speech, using the law to silence dissent by parliamentarians, journalists, writers, trade unionists and academics, or by the many hundreds of ordinary people who have been caught in the crossfire. I refer particularly to those in the Kurdish

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villages, where their crops and houses have been destroyed and who have in their thousands been driven from their homes by cruel and barbaric actions.
Nor is the solution to be found in an intensification of military or police activity against the civilian population, who have been imprisoned, tortured and killed, or who have disappeared for expressing non-violent opinions. As the noble Lord, Lord Avebury, said, Amnesty International, alarmed by the sharp increase in the number of disappearances, fears that unless decisive action is taken now, the practice of "disappearance" will become an established tool of intimidation and elimination.
Other aspects of concerted action by the state have been the physical and legal assault on the Democracy Party, that effectively caused its demise a month before the local elections—an assault based on the belief that DEP is the political arm of the PKK, even though no such charge has been laid before the constitutional court —and the removal of the immunities of the six DEP deputies under Article 125 of the Penal Code, which carries with it the death penalty. Only one of the deputies has been charged with having links with the PKK. The others have been charged on the basis of speeches that they have made. Like the noble Lord, Lord Archer, I hope that the Minister can indicate their current position.
It is for that reason, and the possible threat to the very essence of democracy, that those actions have been criticised by both the Assembly of the Council of Europe and the IPU's Committee on the Rights of Parliamentarians.
Not only were the recent local elections affected by the removal of the one political party that could speak on behalf of the Kurds, but there were also substantial amendments to election law which severely restricted the democratic rights of many among the Kurdish population from the villages, who had been forcibly displaced and as a consequence lost their residential qualification to vote—a qualification that was waived for officers and police, who, together with increased administrative personnel from other parts of Turkey, had a real effect on the outcome of the elections.
In conclusion, I ask your Lordships' House to take note of the final recommendations of the resolution that was carried by the Council of Europe which called on the Turkish authorities,
"to take initiatives for a peaceful and political solution to 'the Kurdish question' within its frontiers, including the repeal of all legislation which makes normal political discourse and free speech about specific changes in the Constitution … a treasonable offence".
7.56 p.m.
Baroness Hooper: My Lords, my reason for speaking in this debate is that I am a Member of the Parliamentary Assembly of the Council of Europe, which, nearly two weeks ago, debated the issue of the six MPs who had been imprisoned. I thought that it was a very well balanced debate, with clear, though conflicting, contributions from both sides of the argument. The decision that was ultimately reached was that Turkey, as a member of the Council of Europe, had signed up to the Convention on Human Rights; that
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proper procedures exist through the Commission and the Court of Human Rights; and that it was not therefore for the Parliamentary Assembly to interfere. That is the point in today's debate. Turkey is a member of the Council of Europe and is committed to its obligations in that institution, and indeed in the other international institutions to which it belongs, including the United Nations.
I have not myself been to Turkey recently, nor am a great expert on Turkey or on the Kurdish plight, as are other speakers in this debate. In particular, I refer to my noble friend Lord Archer. But I wish it to be recognised that there are many Turkish citizens of Kurdish origin who have lived long and peaceful lives in Turkey and who have contributed to a full, and in some cases public, life there.
It should also be remembered—it is a fact that I came across unexpectedly two years ago—that as long ago as 1492, when the Jews were expelled from Spain as a result of the Spanish Inquisition, the only place to offer them a safe haven was Constantinople. To this day, there is a strong community of Sephardic Jews living in Turkey. Similarly, as I understand it, Turkey provided a safe haven for Kurds who were escaping from Saddam Hussein during and after the Iraqi war. Therefore I hope that there is—I feel sure that there must be—a sensible explanation of, or answer to, the issues that were raised by the noble Lord, Lord Avebury, this evening, and that we shall hear that explanation from my noble friend the Minister when she winds up.
7.59 p.m.
Lord Hylton: My Lords, I should like to protest about the limitations on this debate, which has arisen from strong concerns on all sides of the House. Because of those limitations, I shall confine myself to putting questions to Her Majesty's Government of which I have given notice. I am sure that the noble Baroness, with her usual courtesy, will manage to reply to them all.
To avoid over-dependence on Turkish facilities at Incirlik air base which are essential for the protection of northern Iraq, as the noble Lord, Lord Archer, mentioned, will the Government examine the possibility of alternative bases; for example, in Cyprus? Will the Government insist that Turkey complies fully with its obligations under the CSCE? I ask the noble Baroness whether Turkey has signed and ratified all the security and co-operation agreements? Is not Turkey already in violation by stationing troops in Northern Cyprus and by recognising that breakaway republic? If so, what action is envisaged to secure compliance?
There is a further point concerning the so-called "trickle down supplies" to both Turkey and Greece under the European disarmament agreements. Has Germany recently refused to make further transfers to Turkey, and if so, why? Will the Government urge NATO to reconsider these dangerous and destabilising supplies, some of which appear to be used in the armed conflict in south east Turkey? In particular, will the Government insist on the full application of the CSCE guidelines dated 23rd November 1993?
It is well known that that conflict was started and has been continued by the PKK. I ask the Government what

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is their present assessment of that organisation, which has certainly conducted some indefensible terrorism, such as murdering school teachers and other non-combatants? How do they evaluate the ceasefire of March 1993, which in fact lasted nearly three months and the ceasefire offers of March 1994, which, alas, the Turkish Government rejected out of hand?
Do the Government consider that the PKK has evolved in its thinking and have our Government studied the remarkable interview given by Mr. Ocalan on 27th March 1993? Do they believe in offers by a PKK representative to abide by common Article 3 of the Geneva Conventions? Those offers were in fact made to me in London in response to questions that I put forward. Do the Government believe that the PKK is sincere when it says that it does not wish to divide Turkey and would be content to accept recognition of Kurdish identity, accompanied by devolution, Kurdish language and education, and full access to the media?
Those are important questions. If the answers are positive, I trust that our Government will use their good offices to achieve a cease-fire and real negotiation for the resolution of a savage conflict, which requires above all problem-solving approaches by all concerned.
8.2 p.m.
Lord Dixon-Smith: My Lords, it is debates such as this that make me realise just how fortunate we are in this country. We are the main nation in a small archipelago at a short distance from the mainland. We have had a thousand years to develop the democratic institutions that we all accept today as the proper way for a nation to govern its affairs. Civil war and rebellion are at a sufficient historical distance to cause little concern. Our neighbours across the Channel are peaceable and intent on co-operation and development. Yet, even with all those advantages, we have across our one relatively short land frontier strife which we have great difficulty in resolving, although the principles of a solution are at least now clear and agreed.
Let us consider Turkey. It is an ancient nation at the crossroads between Europe and Asia. It is a nation that has only been developing its democratic institutions for 50 years. It is a nation which has facing it just across a long land frontier some of the most tendentious countries in the world: Syria, Iraq and Iran. It is a nation that bordered the USSR when that empire was most inclined to export rebellion. It is a nation that has feuded with its final neighbour, Greece, from time immemorial.
With that background and above all because Turkey needs the recognition and assistance of the developed world, is it likely that Turkey would gratuitously offend all the standards by which the developed world lives and works? It is in that context that we need to consider the question posed by the noble Lord, Lord Avebury.
Given its location, Turkey is inevitably a multicultural society with significant minorities from many races within its community. The Kurds are probably the largest identifiable minority group. They are dispersed throughout the land and a significant number are already Members of the Turkish parliament. We have heard about some of them in particular tonight. Already the
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future of Turkey and the future of the Kurds are inextricably intertwined. In those circumstances it seems to me tragic that there is a Kurdish equivalent of the IRA. It should be offered similar terms to the IRA. Surely that is the principle that should guide our policy in relation to the Kurds. We, with a mote in our own eye, can hardly pull one out of the eye of others.
8.5 p.m.
Lord Finsberg: My Lords, I listened with great surprise to the sincere speech of the noble Lord, Lord Avebury, which was of the most one-sided speeches that I have heard. The noble Lord could hardly bring himself to condemn the PKK, although he knows its stated terrorist aims and the murders and assassinations that it has committed over the past years.
Turkey is not anti-Kurdish. In my 10 years in the Council of Europe I have met over 200 Turkish Members of Parliament. In the present parliament there are some 100 Kurdish MPs, who are not just from the democratic party but from all over. They include ministers in the present and previous governments. Nobody can say that the Turkish Government are anti-Kurdish. As my noble friend Lord Archer said, Turkey has given sanctuary to thousands fleeing from Saddam Hussein. I believe that sufficient tribute has not been paid to Turkey for that. The Turks are finding great difficulty in looking after those refugees in their difficult economic circumstances.
Some Turkish MPs have had their immunity removed. Parliamentary immunity differs all over the world. Those MPs are now appearing before the Turkish courts. Like the South African courts, nobody has said that the Turkish courts are politically biased. Over the years nobody has ever said that. From what I have seen of Turkish judges, I have enough confidence to believe that those particular people will get a fair and reasonable trial.
I am quite certain that the Turkish Government would not deny that some of their troops have committed excesses which are too horrible to speak about. But one must realise that they are in a part of Turkey where perhaps their family or friends have been brutally murdered—it has not just been school teachers but many other people. Human nature occasionally does not understand the Geneva Convention. In fact it was not the Turkish Government who started the trouble; it was the PKK. It could stop tomorrow the murders and excesses. Then we would see a change in the attitude of the Turkish Government.
I truly wish that for once more people would try to understand Turkey. It is a staunch ally and a strong member of NATO which offered immense help during the Gulf War and again in Bosnia. One should realise that the Turkish parliamentarians are doing their best to try to bring Turkey further into a democratic state. It is a problem of secularism and fundamentalism; it is the gap between Europe and Asia.
The government in Turkey and their predecessor—and particularly Mrs. Ciller—are doing their best to try to solve the problem. Mrs. Ciller is certainly doing her

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best, quite rightly, to put pressure on Mr. Denktash to accept the confidence building measures in Cyprus as quickly as possible.
8.9 p.m.
Lord Kagan: My Lords, it is difficult to ask what is the policy of Her Majesty's Government towards the Kurdish minority without asking what is Her Majesty's Government's attitude to Turkey as an independent state. There is no doubt that at some time or other the PKK wanted no less and no more than secession, which would have meant the end of Turkey as an independent state. Turkey consists of people of different origins. It would be the same as asking the British Government to allow the Welsh and the Scots to secede.
One thing is certain. Next to the will, the wish and the aim to survive as a state, the most ardent wish of the Turkish people and their government is to become a member of the European Community. They know full well what they must do. We must therefore assume that if they have not yet aligned everything to our standards, it is because it is not possible and not because they do not want to do so. We are not dealing in Turkey with prime ministers like Saddam Hussein. We are dealing with logical, competent people. We should not assume, therefore, that whatever is wrong is wrong because they want it to be so.
We must judge Turkey by its behaviour in the Korean and the Gulf wars. It stood on the side of the western powers and aspired to link with them. If one selectively wants to look at actions where there is a conflict, one will inevitably find a great deal that is wrong. The Almighty does not always give us an option between good and bad; sometimes the option is between bad, worse and terrible. Because of certain abuses, the picture can be portrayed in the manner described by the noble Lord, Lord Avebury, but I am sure that the IRA could conceive a similar picture of England when lecturing in New York to the Irish community. It is extremely dangerous to be one-sided.
8.12 p.m.
The Viscount of Oxfuird: My Lords, the House is grateful to the noble Lord, Lord Avebury, for giving us the opportunity to spend a short time on this subject. One hopes the issue may be placed firmly in context with the winding-up speech of my noble friend the Minister.
My interest in the subject is driven to some extent by my own experience of being closely involved in the exporting of British manufactured goods to many countries for over 30 years. The cloak of human rights is a multi-coloured one and it is not difficult to choose the wrong colour, resulting in a garish and unhappy combination of conflicting interests. There are those, particularly in these changing times, who do not have our democratic privileges. It is therefore most important that we respect the will of their people and take care that we do not rush in where the angels fear to tread.
The good relationship that exists between this country and Turkey goes back to the establishment of regular diplomatic relations in 1793. Relations between this country and Turkey are close, based as they are on
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centuries of trading. Britain's visible exports have grown from £224 million in 1983 to £629 million in 1992. Turkey is now Britain's third largest market in the Middle East and north Africa. In 1992 we were seventh in Turkey's list of suppliers and the fifth largest market for Turkish exports, which increased from £185 million in 1983 to £466 million in 1992.
When we consider the work done by British firms in Turkey it represents a very senior involvement in their economy—such companies as Freeman Fox & Partners, who constructed the bridge over the Bosporus, AMEC and British Gas, who undertook the first phase of the conversion of the city of Ankara to natural gas. British firms are also involved in the construction of the Ankara Metro and many water and sewerage projects. Trade between Britain and Turkey has grown to such a size that the Minister for Trade in another place recently opened a British investment office in Ankara to seek out further joint venture and investment opportunities.
Turkey is aware of her human rights problems. As her ambassador stated at a recent meeting,
"I am not interested in presenting Government propaganda and recognise that to do so would simply alienate the attention that their Lordships might pay to the views of the Turkish Government in the future".
Perhaps my noble friend the Minister will advise the House as to the progress being made by the Turkish Government on the subject of human rights.
8.15 p.m.
The Earl of Clanwilliam: My Lords, I am happy to say that I shall be able to shorten my speech enormously by virtue of the quality of the speeches from this side of your Lordships' House. I have some sympathy with the Turkish Government in its relations with the PKK, and also a sense of déjà vu when we consider our own problems with the IRA. However, the problem with the PKK is on a considerably different scale to that with the IRA when we consider that there are 9 million Turkish Armenians in Anatolia alone, all of Kurdish origin, busy squabbling among themselves. On top of that problem we impose 150,000 well-armed PKK enthusiasts in the art of terror, assassination and border raids.
Bearing those numbers in mind, it is hardly a problem that we can reasonably discuss in terms of the IRA. It is a much bigger problem for the Turks. As allies of Turkey we should offer our support and not our retribution. The noble Lord, Lord Avebury, has gone entirely over the top in promoting today's debate. I thank your Lordships for listening, and I am sure everyone will be grateful if I stop talking.
8.18 p.m.
Baroness Blackstone: My Lords, I am grateful to the noble Lord, Lord Avebury, for introducing the debate and do not believe for one moment that he has gone "over the top" in deciding to do so. There can be little doubt that the Kurdish people have suffered brutal repression, not only in Turkey but also in Iraq and at certain times in Iran. Some noble Lords taking part in the debate have much more direct experience than I of the problems facing the Kurds, particularly in Turkey. As we heard, some recently visited south-east Turkey

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and undertook an investigation into their plight. I am grateful to them for bringing those matters to the world's attention.
I shall not explore in any detail what has been said about various instances of repression of the Kurds in Turkey in recent months. Sadly, it is clear that there has been little improvement since the last debate in this House on the subject in November. In summary, in spite of what some noble Lords opposite said—the noble Lords, Lord Dixon-Smith, Lord Finsberg and the noble Viscount—there is well documented evidence of every kind of human rights abuse in Turkey, ranging from holding people incommunicado for up to a month merely on suspicion of committing political offences; the torturing of suspects; deaths in custody, suggesting that detainees have been murdered; the disappearance of political activists; the burning by the security forces of villages thought to be sympathetic to Kurdish nationalists, on very little evidence; and the intimidation and arrest of journalists investigating those abuses.
One recent outrage was the arrest of the seven Kurdish MPs from the moderate nationalist DEP party, which it is now rumoured is likely to be outlawed. This can only result in driving politically active Kurds into the extremist PKK and lead to further terrorist action, which of course is to be deplored. We on these Benches condemn terrorism on the part of the PKK. Since Turkey is a member of NATO, as a number of noble Lords opposite have mentioned, and aspires to be a member of the European Union—indeed, it applied for full membership as long ago as 1987—it has a responsibility to accept the standards of civilised behaviour in the treatment of minorities which we regard as vitally important. In this case it is a very large minority of 10 million people.
I therefore ask the Minister what actions the Government are taking to try to get the Turkish Government to act more responsibly. Specifically, taking the question put by the noble Lord, Lord Hylton, a little further, can she comment on the recent decision by the German Government to stop selling arms to Turkey? Can she tell the House whether the Government intend to follow the example of Germany in halting arms sales to Turkey? The Germans believe that the arms have been used against the Kurds in the deteriorating situation in south-east Turkey. Can she indicate what action the UK Government have taken with respect to common Article 3 of the Geneva Convention, to which Turkey is a party ? In the debate in November she promised that this would be followed up.
Following what the noble Lord, Lord Avebury, said, can the Minister also say what steps have been taken to deal with the shortcomings in the CSCE; namely, that its provisions are not legally enforceable? Again, she said in November that steps needed to be taken to rectify that. She stated earlier too that Turkey is not a state party to the covenants on civil and political rights and the international covenant on economic, social and cultural rights but that the Government believe that it should be. What have the Government done to put pressure on Turkey to act? Finally, since Turkey is a member of the
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Council of Europe, as already mentioned, can she tell the House what progress has been made in implementing the Council's decisions at its meetings in October last year, to which she also referred in her response to the debate last November?
While we can all condemn the Turkish Government's treatment of the Kurds, we need to do rather more than condemn. We need, within the appropriate international organisations, to take action to try to secure an improvement in the situation. I agree strongly with my noble friend Lady Gould that the solution must be a political one and that it cannot be secured by armed repression and intimidation within Turkey. We owe it to the Kurds to support them in their struggle to be allowed to maintain their unique culture and to be allowed some autonomy in how they run their affairs.
8.23 p.m.
Baroness Chalker of Wallasey: My Lords, I want to begin by thanking the noble Lord, Lord Avebury, the noble Baroness, Lady Gould, and the noble Lord, Lord Hylton, for sharing their experiences and their views as a result of their visit to south-east Turkey to monitor the recent municipal elections. While I would not agree with all they have said tonight, they have brought forward some very valuable points which have been picked up in the debate. This important topic is rightly being debated in your Lordships' House. I believe that there is true concern about the issue on a far wider basis than simply in your Lordships' House and another place. I receive letters and questions about the situation in Turkey. The area of south-east Turkey is a particularly difficult one for the Turkish Government but they do not always seem to be handling it as well as we believe and know they might.
I was glad to hear many noble Lords unreservedly condemning the deplorable violence of the PKK, as we condemn all forms of terrorism. But there is a difference between the PKK and a large number of Kurds in Turkey. We are firm in our view that the freedom to express non-violent political opinion and full respect for human rights must be upheld by the authorities in any country which wishes its government to be respected. Here we are concerned with whether the Turkish authorities have full respect for human rights and whether there is the freedom to express non-violent political opinion, which clearly there is not at the present time in Turkey.
The intended prosecution of the Democratic Party deputies, which I must accept is consistent with Turkey's existing laws and constitution, severely damages her international reputation and her democratic credentials. As my right honourable friend the Foreign Secretary said in a speech in Ankara in January, such credentials are increasingly important as Turkey draws ever closer to the European Union.
Respect for international human rights values must be maintained by any democratic government even when that government are required to combat a terrorist group such as the PKK which has no respect for democracy or for the lives of innocent people. The Foreign Secretary, together with the German Foreign Minister, stressed this at their meeting in Ankara with

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the Turkish Prime Minister and Foreign Minister. My honourable friend the Minister of State for Foreign and Commonwealth Affairs put the point plainly to the Turkish Minister for Human Rights in London last month. Such debates as this, and a similar debate in another place on 18th March, will, I hope, send a clear message about the concern felt by Turkey's friends for the treatment both of those who are innocently caught up in this conflict in the south-east and those who are trying to find a peaceful and democratic solution to the many problems that Turkey faces.
My noble friend Lady Hooper gave us a valuable reminder of how many Kurds live peacefully. But of course there is no Kurd more prominent in the Turkish Government than the current Foreign Minister, who I believe is trying very hard to bring about change.
I have made it clear that we raise human rights issue with the Turks whenever there is an opportunity to do so. I did so again with the Turkish ambassador only this morning. All 12 European Union Ministers expressed their concern about human rights in Turkey to the Turkish Foreign Minister when they met last November. In March this year the European Union presidency made a statement on human rights in various countries to the Commission on Human Rights. The statement included an expression of our concern at torture in Turkey, the constraints on freedom of expression and our conviction that terrorism must be combatted within the rule of law. On 31st March the European Union issued a statement in Brussels and Athens on human rights in Turkey. We and our European Union partners pointed out that, while we repeatedly condemned the terrorist acts in Turkey, we believe that the fight against terrorism has to be conducted within the rule of law, a point on which so many of your Lordships spoke tonight. We also underlined that freedom of expression is a fundamental freedom for all. That is something the Turkish Government must really tackle.
So much for the view of the noble Lord, Lord Avebury—I wrote down what he said—that the European Union had done nothing. It has kept up the pressure. It has at every opportunity, either singly or collectively, been putting these points to the Turkish Government. Despite all of that, there are some within the Turkish forces who do not seem to understand what is going on and what the Turkish Government are striving for.
We were very concerned by the forced evacuation of the villages. I know that the excuses were that the villages were supplying food to the PKK and that they were emptied for military reasons. But we were sufficiently concerned to ensure that our ambassador in Ankara raised those anxieties about that practice with the Turkish authorities.
We have sought to get the Turkish Government to improve their law. We recognise that there was a new law passed over a year ago to improve human rights provision under domestic law, but the task remains to ensure that the Turkish police and the troops abide by the code and that the fight against terrorism is conducted within the framework of international human rights obligations. Moreover, officials who commit abuses must be, and must be seen to be, brought to book for
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their actions. Therefore, when I say that I understand the Turkish Government's need to deal firmly with PKK terrorism, I also say, as did my noble friend Lord Finsberg, that that does not excuse the Turkish Government from striving for the highest protection of human rights for its citizens.
We are all aware that the Turkish constitution's penal code is in need of real amendment to permit non-violent expression of political beliefs. I am hopeful that there may shortly be a move to improve the penal code. But we have made it quite clear in your Lordships' House tonight that we are all watching for that reform. It is true that legally Turkish Kurds have full access to all democratic forms of expression open to other Turkish citizens. But separatism has been a punishable offence under all Turkish constitutions. The 1982 Turkish constitution is widely recognised as in need of amendment on this score as on others.
I was most grateful to the noble Baroness, Lady Gould, and particularly to my noble friend Lord Finsberg for all his work in the Council of Europe on this issue of human rights and south-east Turkey. I know that he has been involved in the preparation by the Council of Europe Committee for the Prevention of Torture of its public statement on Turkey in December 1992. I do not need to quote from that statement, but I believe that when the Council of Europe passed the resolution on 13th April, as described by my noble friend Lady Hooper, expressing its anxieties about the arrest and detention of the DEP deputies, it was giving notice to Turkey that it must take action.
The assembly also noted that the DEP deputies did not go beyond using their rights to freedom of expression guaranteed in the European Convention on Human Rights and in the Turkish constitution. That is why it called on the Turkish authorities to withdraw the existing charges against the deputies and also to withdraw their request before the constitutional court to close the DEP party on the grounds of treasonable aims. The assembly also encouraged the Turks to release the DEP deputies on bail pending the preparation of their cases. The European Parliament passed a similar resolution last month.
There have been many questions raised in this debate tonight. My noble friend Lord Archer of Weston-super-Mare asked about the Kurdish Democratic Party deputies. I cannot tell him what access the deputies have to lawyers, but we are taking up this matter. He will know that there has been a reaction of concern throughout Europe at what happened. How right my noble friend Lord Finsberg was when he said that Turkey has been a sanctuary to thousands of Kurds from Iraq. I would say that it was tens of thousands. I remember meeting so many of them when I went to the hills between Iraq and Turkey. Turkey has done a great deal to try to help her neighbours. I agree very much with what my noble friend Lord Archer said when he paid tribute to Turkey for helping, as a result of the campaigning by Mr. Talabani, so that the electricity should be restored in northern Iraq.
The Turks are trying to do three very difficult things at the same time. They are trying to help the Kurdish people in northern Iraq. They are trying to help their

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own Kurdish people, but they are not yet able to do so. And they are trying to divide by the action of their security forces those who are would-be terrorists from those who are peaceable Kurds.
The noble Lord, Lord Hylton, asked me about the alternative bases compared with the Turkish base at Incirlik. We find that that base continues to offer very considerable advantages. I believe that allied aircraft will want to continue to use it. We are certainly very grateful to the Turkish Government for that.
I must bring my remarks to a close, but I cannot do so without sharing the condolences of my noble friend Lord Archer to the families of the two British officers killed in the helicopter crash and to the families of the Turkish, French and US military personnel killed in that terrible shooting-down incident a little while ago.
As my noble friend Lord Oxfuird said, Turkey is a valued trading partner for Britain. We want to go on having good relations. But we do beg of Turkey to abide by the Geneva conventions, as the noble Baroness, Lady Blackstone, said, and to work to find a peaceful and democratic solution to solve the problems of Turkey. The Kurds have a right to live in peace in Turkey. That is why we beg of the Turkish Government real action, because what is happening in that country today is hurting Turkey and dismaying Turkey's European friends a very great deal.
I hope that the fight against terrorism will be pursued with rigour, but that it will be pursued with respect for human rights. Freedom of expression for non-violent Kurdish opinion is an important component in the fight against terrorism, isolating extremists and reassuring the moderate majority. Restrictions on such opinion are likely, by contrast, to give the terrorists a valuable propaganda weapon. That is why I believe that the Turkish Government would do well to amend their penal code, to look at their constitution and to make sure that their armed forces and their police forces abide by the standards which have been so long upheld by the Council of Europe and all European and international bodies who believe in human rights.
On those issues to which I have been unable to respond tonight I shall write to noble Lords. It has been a valuable debate, even though at times it had its excesses too. I believe that we must take the sensible middle path to achieve the right result for all the people of Turkey.

Coal Industry Bill
8.38 p.m.
House again in Committee on Clause 2.
Lord Sefton of Garston Lord Sefton of Garston moved Amendment No. 12:
Page 2, line 38, at end insert:
("( ) In the exercise of its duty under subsection (1) above to secure an economically viable coal industry in Great Britain, the Authority shall have regard to the availability in Great Britain of reserves of coal in relation to reserves of other fossil fuels.").
The noble Lord said: At Second Reading the noble Lord, Lord Strathclyde, opened the debate by saying,
"our continuing programme of privatisation … will enable the coal industry to find its rightful place as a competitive supplier in the energy market".
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It is a great pity that the Bill does not deal with the energy market completely. The noble Lord went on to say that the powers of,
"the Coal Authority [are] to own, and grant access to, coal reserves".—[Official Report, 11/4/94; cols. 1292–3.]
I was glad to see that because of its relationship to my own belief as regards fossil fuels either here or anywhere else in the world.
I have sat in the Chamber time after time listening to environmentalists talk about nature and the environment and about how important it is that we should regard them as a trust; that we should not consider that they are ours to use as we wish, but should hold them in trust for future generations. I think that it is more apposite to take that view of fossil fuels than of any other part of the environment. We are all familiar with the graph that depicts the generation and use of fossil fuels. The long straight line represents the millions of years that it takes to form fossil fuels, but there is suddenly a peak up and down, representing the period in which we use those fossil fuels.
The Bill refers to the coal industry having to be competitive. I suppose that the coal industry could be competitive provided that, to use a cliché, it is on a level coalfield. However, we all recognise that when the question of the coal mines being closed in considerable numbers arose, there was no level playing field. In fact, coal was being driven out by another form of energy. I do not believe that that form of energy was being used in the correct fashion, but I am not prepared to try to prove that. I heard a noted professor say on television the other night that using oil and gas to generate power was the wrong way to use those fuels. He may be right; he may be wrong; I do not know.
I tabled this amendment to ascertain what the Government believe should happen to fossil fuels. The Minister looks puzzled that I should use the phrase "fossil fuels", but he should read the amendment because it deals with fossil fuels. When I first attempted to table such an amendment, I was told that I could not use the phrase in a Bill relating to coal, because "fossil fuels" are not coal. In the end, however, I managed to table an amendment mentioning "fossil fuels".
I turn now to the question of competition. If we were talking about something in continuous supply and which was easy to obtain—and if all forms of fuel were equally easily obtainable—I think that there could be competition. However, when one tries to put natural gas (which simply bubbles to the surface) into a fair and competitive market alongside coal (which in some cases has to be brought up 1,000 feet) one sees that it is nonsense to talk about competition.
We should be very careful. We should never lapse into thinking that things will continue smoothly and that nothing will happen. We should think back. It seems to me that we need a crisis to outline the necessity of doing something about scarce resources. It did not take long in the Suez crisis to impose a limit of 50 miles per hour on all vehicles on the motorways or to ban neon lighting. It did not take long for the country, when threatened with such a crisis, to realise how it should treat scarce fossil fuels.
When I attended the Second Reading debate, somebody asked me, "Are you interested in coal?". I said, "Not particularly. I do not come from a coal mining area; I am not an ex-miner and the nearest that I have got to coal mining is a coal miner's lamp that was presented to me by the late Lord Gormley, so I am not an expert in that field, but I think I have always been interested in the energy question because the whole of the modern society in which we live depends on energy".
I make the point again. I believe that fossil fuels, having existed for so long, are not ours to treat as we want and for the moment. We are the trustees of that energy for future generations. Let us not kid ourselves. Their supply will come to an end. It will not be long before fossil fuels have gone. I do not know whether the country is in such a state that it will take lightly to nuclear power. I sometimes doubt it although it seems to me to be the only thing that could possibly take the place of our present energy system. On the other hand, some other system of energy might be developed.
We need a breathing space. We need the time in which to develop alternative sources of energy because if we do not, we shall really be in trouble. We must find some way to give ourselves that time. How long will it be before we make up our minds that at the moment our only alternative power source is nuclear energy? It seems to me that waves and windmills are simply not on as power providers and that we must go somewhere else. Indeed, it does not seem as though the Government are very keen on wave energy.
Above all, however, what we need before talking about energy is information about resources. The Minister and the Government are saying, "Let us have competition". Does that mean that the Government can find out what this country's reserves of oil are and their rate of depletion or will they be faced with a competitive organisation saying, "We cannot disclose that because it is of commercial value. You cannot ask us that"? I have been told such things even here in London when I asked why a building was built and occupied for only 21 years and it was then decided to pull it down. When I asked about the cost of that, I was told that I could not have that information because it was of commercial value. I was told, "It's a commercial secret", so I do not know what the oil industry will say if the Government start to ask it, "What reserves do you think you've got? What is the rate of depletion? What money are you making out of it?". The industry will say that that is a question of commercial confidentiality. If the licensees are asked the same questions in regard to their plans for mining coal, would not they say exactly the same?
This is a simple amendment. It does not ask for a lot. It merely asks that an authority,
"shall have regard to the availability in Great Britain of reserves of coal in relation to reserves of other fossil fuels".
I selected the Coal Authority to be that body because I believe—I think that this information is correct—that our largest reserve of fuel is coal. I thought that the Coal Authority would be the suitable body to give us an overall picture of fossil fuels because all such fuels are related. They were all created in the same way. They all lie in the earth. According to some people, they are
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God-sent and, according to others, they are sent naturally. It depends on one's beliefs. However, they are there; we are their trustees, and we have a duty to find out what is there.
In my opinion, we also have a solemn duty to find out the extent to which we use fossil fuels. We have to find out the depletion. I do not believe that we can have a really sound energy policy unless we begin to get that information and unless we begin to make real comparisons, long term. The Minister is smiling. That means he does not believe it: I do not expect him to. Nevertheless, in my opinion that is the real way in which we should consider this.
The Government may—I give them the credit because I have not been told otherwise—have in mind a simple procedure for examining the energy and the fossil reserves that are in existence. If so, I should like to know. I do not intend to say much more: in this situation we are very lucky because I can have another go when I reply. I do not know what the Government are going to say but it seems to me that they must say something if they are going to reply at all. Either they must say they believe in examining the fuel reserves. they believe in a proper energy policy and they believe in finding out what is happening to it and what is going to happen to it in the future, or they must fall back on their time-honoured answer "Leave it to the market". I do not think that leaving it to the market is good enough for this country, or in fact for the world. I beg to move.
Lord Morris of Castle Morris: I support whole-heartedly the amendment proposed by my noble friend. The problem of coal reserves is an immediate problem, caused particularly when larger firms start to enter the market. In some of the British Coal collieries there are reserves ready developed which can be extracted at comparatively little cost because all the necessary investment has already been undertaken. We are concerned that many of those pits will have private owners coming in, taking all the easy coal and then closing the pit, sterilising large amounts of coal which in the event of future need would be very expensive to extract.
However, behind that, the issue raised by my noble friend lies quite close to the heart of the opposition from these Benches to the whole idea of the privatisation of the coal industry. We oppose it because of the lack of strategic planning for the industry itself. This amendment raises some even deeper issues, such as the whole problem of fossil fuel and time—what runs out when and what the economic cost of extraction is in each case, balanced against the national need. It highlights the need for a national energy strategy, but perhaps it is a little much to ask the noble Lord the Minister to produce that at this hour of the evening. We shall be interested to see how long and how deeply the Government have thought about that issue.
Lord Strathclyde: I am delighted to have the opportunity to reply and to say that much of what the noble Lord, Lord Sefton, has said I am not sure was within the compass of his amendment, to which I shall reply. This amendment seems intended to require the Coal Authority to manage the rate of exploitation of coal

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reserves in the context of the availability of other fossil fuels. I think he misunderstands the role of the authority. The authority is not to be responsible for managing the coal or any other fossil fuel industry. Clause 2(1) (a) places a duty on the Coal Authority to secure, so far as practicable, that its licensees maintain and develop an economically viable coal industry. It is to those licensees that we are looking to develop a viable coal industry: one that is economically capable of standing on its own feet and able to compete with other energy sources. The role of—
Lord Sefton of Garston: The noble Lord doubts whether the amendment covers the matters I was referring to: I am seeking information about the reserves of fuel. If the noble Lord will read the amendment again, he will see that it states:
"In the exercise of its duty under subsection (1) above to secure an economically viable coal industry in Great Britain, the Authority shall have regard to the availability in Great Britain of reserves of coal in relation to reserves of other fossil fuels."
I could have gone on and amended other parts of the Bill to say they should have the power to demand that information from the other energy suppliers, but I did not. I should have thought that anybody reading that amendment would realise that those powers would be necessary and that can be the subject of a further amendment.
Lord Strathclyde: I am grateful to the noble Lord for continuing to explain his amendment. The point is: what is the role of the authority? It is on that that the noble Lord and I disagree. I believe that the role of the authority is facilitatory: in other words, it can provide information. It can make available the coal resources and property within its ownership and establish a competitive licensing regime to facilitate the development of the coal industry by licensees.
It is clear that the Government should not attempt to impose all-embracing plans about how much energy of what kind should be produced or consumed by whom. Such plans are doomed to failure. The noble Lord says the market does not work. I have to tell him that the market has worked considerably longer than any other system. The Government's policy has been, and remains, to encourage effective markets and to make them work efficiently. That will facilitate the Government's objective to secure the development in the longer term of the largest economic coal industry possible.
Both noble Lords who spoke asked how much coal there is left and how much longer the reserves will last. Of course it all depends on how quickly you use them up—and you never know that because, as the lessons of the last few years have demonstrated, increased fuel efficiency naturally increases the length of time that known reserves will last. Add to that the fact that the known reserves are continually increasing because of the work done by exploration groups and it strikes me that the question which both noble Lords asked me is unanswerable.
Lord Sefton of Garston: The Minister has made exactly the same point that I made in moving the
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amendment, except that he missed the point of what was implied in it. The Minister says that the market has worked. That depends on how long you give the market. Did the market work up to the last war? Did it meet the needs of the nation? I know the Minister was not born then, but he can read; he does know what happened. The coal market was free of all restrictions—and what happened? At a time when this country was in crisis in 1940, private coal owners closed down the mines because they could not find a market in France. Did the market work then? It is all right saying that the market is working but the market only works for a period. I am talking about the accumulation of reserves over thousands of years and about passing on those reserves. Would it not be a tragedy if, because of the competition between the different fuel suppliers, the coal industry were faced with the situation of abandoning tremendous amounts of coal because it could not meet the immediate competition with petrol, oil and gas? That is a very immediate likelihood. If it happens it could happen within 20 years. We could reach a situation where coal is being left in the earth without any possibility of regaining it, and what will the future generation say then, when gas runs out?
I want to conclude on this note. Coal is a fairly solid substance. Oil is very volatile, and I do not believe that the figures we are getting for the reserves of oil are right. If I am right, the Government are wrong and, if the Government are wrong, then future generations will tell them so.
Lord Dean of Beswick: May I just very briefly take up a point that the Minister made in his reply, which I think was a little bit casual? The Minister will recall that only a few weeks ago I raised a point with him through a Question about the reserves, known or unknown, of worldwide energy. The Answer was rather flippant. In a jovial way, it was aided by the noble and learned Lord, Lord Hailsham, who said that no one knew the answer when he was a boy and no one knows it now.
People have more knowledge about identifiable reserves of energy fuels. It is on record that this country has 300 years' worth of coal reserves below the surface. The action that is now taking place may lock them up for time immemorial.
Only yesterday I had lunch with an accountant who is working for British Coal during the winding down period. He put it to me quite clearly that the cost of re-opening some of the coalfields after they have been closed down as a result of this operation will be so large that it will not be viable under any circumstances.
I must take the Minister to task. I do not have figures and therefore I can give none. But neither can the Minister; he has given no figures of known reserves of oil but has said that the Government know that there are more. How do they know? They are assuming that there are. The world in general is so eager and hungry for energy that the depletion will increase at an enormous rate. The Chinese are hell bent on an enormous increase in the provision of energy, most of which will come from coal reserves. A noble Lord on the Liberal Benches said that at some time we may have to opt largely or entirely for nuclear power.

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I put it to the Minister again that to go down this present road is an act of unbridled vandalism. The amendment moved by my noble friend Lord Sefton asks us to take another look at the situation. The Minister says that I have no figures to prove my argument about the reserves of coal, oil and gas. However, in trying to debunk my argument, the Minister does not have one iota of evidence to prove his own argument. No one can say that at this point in time the reserves are finished. We cannot find them for time immemorial, so that moment will come. My noble friend Lord Sefton has done the Committee a service by raising this matter.
9 p.m.
Lord Dormand of Easington: Perhaps I may follow up the point made by my noble friend Lord Dean. The Government are undertaking a review of nuclear energy. Why are they not undertaking a review in respect of coal or oil ? The Minister told the House recently that the review is behind schedule. The report was due at the end of last year but they do not yet have the terms of reference. The Minister smiles, so perhaps the Government have received them during the past week or two. Why the difference? Perhaps we can have an explanation.
Lord Morris of Castle Morris: The information has just come to me. The Government's own coal task force of June 1990 put the UK coal reserves above 1,200 metres at 140 billion tonnes, 90 billion tonnes of which are classified as economic. Reserves below 1,200 metres were estimated to be considerably greater, lying in thicker seams but requiring technological investment for access. Therefore, at present, or at recent rates of extraction, the presently accessible reserve will last for 900 years. Does the Minister agree with that?
Lord Strathclyde: The noble Lord, Lord Dean, made his point, as did the noble Lord, Lord Dormand of Easington. The noble Lord, Lord Dormand, has forgotten that only last year we published the White Paper on coal. I suppose that there is a similarity between that and the nuclear review. However, as the noble Lord knows, we have not yet decided how the nuclear review will be carried out but we hope to make an announcement soon.
I too have received inspiration about the figures. I understand that British Coal told the Trade and Industry Select Committee of another place that currently economically viable reserves at continuing mines of British Coal would have a life of between 20 and 40 years. Those are somewhat different figures but the explanation is plain to see. In its report to the coal review, Boyds put at about 700 million tonnes the immediately accessible coal reserve base at the 17 pits that British Coal is continuing to operate, plus Maltby and Ashfordby. However, Britain has less than 1 per cent. of the world's coal reserves. As the White Paper indicated, plentiful supplies of coal are available on the international market from a wide range of sources, including the USA, South Africa, Colombia, Indonesia and Australia. There seems therefore little likelihood of a major disruption to supplies.
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But there is a fundamental point. Members of the Committee opposite believe that it should be the Government's responsibility to extract this coal. We believe that it should be the private sector's responsibility to extract the coal and to weigh up the various merits of using different fuels. If that is what the debate is about, that is the fundamental divide which exists between us and which I believe is unbridgeable.
The noble Lord, Lord Sefton, knows that I always enjoy listening to his speeches. I hope that I have given him the right kind of information and that at least he likes the information, if not the conclusion.
Lord Dormand of Easington: The Minister cannot get away with that. Does he agree that nuclear power, gas and, I think, oil are more expensive than coal?
Lord Strathclyde: It depends from where one starts. As the noble Lord knows, it is a fact that during the past 15 years some £20 billion has been spent by the British taxpayer on the British coal industry. That is a considerable investment, which was unsustainable in the long term.
Lord Dormand of Easington: I am sorry to pursue the matter. But will the Minister tell the Committee how much has been spent by the taxpayer on nuclear energy? The figure normally quoted is £1 billion per year.
Lord Strathclyde: I do not have the figures to hand without notice. I am not sure what point the noble Lord is making. We are not discussing a competition between coal and nuclear; we are trying to privatise the coal industry. That is what the essence of the Bill is all about, because we believe that the future of the coal industry is best served by its being in the private sector.
Lord Dean of Beswick: I wish to take up one point which the Minister made. He referred to the amount of coal not being economically viable at present. However, what may not be viable today may very well be viable in the future. For example, I believe that the price of oil per barrel has almost dropped through the floor. According to the last figures I saw, oil was down to 13 dollars per barrel from about 20 dollars. if oil is at such a low price, we may find that it is guzzled and that we run out of supplies much more quickly than anyone has foreseen.
Therefore, we may find that our present reserves of coal, which are not economically viable, become viable. The Government should be careful when drawing up their programme for the future of the coal industry because present non-viable reserves of coal may become viable in the not-too-distant future. They may become economically more viable than oil. In fact, there may no longer be any oil.
Lord Sefton of Garston: The Minister said that he believes in the privatisation of coal. I am not going to receive answers to the questions I asked. I have a heavy responsibility because I could detain the Committee for 10 minutes on the matter; but I am not going to. I shall withdraw the amendment.
The Minister spoke about giving information. I have tabled two Questions for Written Answer on the subject

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of reserves. Will he see to it that I am given the Answers to those Questions and any other information that he may have about reserves of coal?
I accept what the Minister says about his belief and my belief. As I said, we are considering God-given or natural assets which are in our trust. We are trustees. This is a fundamentally important matter and not merely an economic question. Moral issues are involved in the question of who should own the resources which nature has given to us. That is why I believe that no one has any right, merely because of the depth of his pocket, to own the ability to mine coal. I accept that there is a fundamental division between the Minister and myself; I am proud of that division. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Addison Viscount Addison moved Amendment No. 13:
Page 2, line 38, at end insert:
("( ) It shall be the duty of the Coal Authority in carrying out any of its functions under Part II of this Act to further the objective of environmentally sustainable development.").
The noble Viscount said: This amendment seeks to strengthen the environmental duty which will guide the new Coal Authority, requiring it to further the objective of environmentally sustainable development.
I am concerned that the full importance of the environmental aspects of the Coal Authority's future operations are not adequately reflected in the Bill. Its responsibilities for licensing opencast extraction and for managing the legacy of dereliction and pollution of past mineworking are just two examples of the environmental responsibilities that it will have.
The Bill states that the Coal Authority's prime focus will be on facilitating coal mining operations. However, in licensing new coal mining operations or in managing the use and disposal of land, the new authority will clearly have a significant impact on the environment.
The effect of my amendment would be to ensure better integration between environmental and economic considerations in the Coal Authority's operations and so help to avoid unnecessary conflict. It would also be an important step towards implementing the Government's commitment to sustainable development. This House now has a Select Committee on sustainable development.
I recognise that the Bill sets out already an environmental duty for the Coal Authority in Clause 3(7). However, the scope is too narrow and the wording has changed little from similar duties introduced in the 1950s. I believe that there is a need to bring the environmental duties governing the activities of the new Coal Authority up to a modern-day environmental standard by requiring it to further, rather than simply have regard to, environmental objectives. That would be in line with the environmental duties placed on organisations such as the National Rivers Authority or the Office of Water Services which have been shown to operate very successfully. We are all very well aware of the importance of protecting and improving the environment. I hope that we shall not miss this
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opportunity to place modern environmental responsibilities on the new body to ensure that its regulation of the coal industry avoids unacceptable damage to our environment. I beg to move.
Lord Moran: I give my warm support to the amendment. It is entirely right, and it is important that the Coal Authority should operate under a clear environmental duty covering the full range of its actions and responsibilities. The arguments which the noble Viscount so ably put forward are important, and I hope that we shall agree to them.
I should like to take the opportunity to introduce my amendment, Amendment No. 29, which has been grouped with this amendment. The aim of my amendment is to clarify the Coal Authority's power to carry out emergency operations to prevent any serious pollution of the environment. Clause 5 deals with the Coal Authority's general powers and subsection (1) provides:
"the Authority shall have the power to do anything which"
facilitates or is conducive to its functions. Although there are duties on the authority to have regard to the desirability of things such as natural beauty and conservation under Clause 3(7), as the noble Viscount told us, the authority does not have any function relating specifically to preventing pollution of the environment. Clause 5(6) and (7) place certain limits on the authority's powers, and my amendment is intended to put beyond doubt that the Coal Authority will have power itself to carry out preventive work or to arrange for others to do so in cases where there is an imminent risk of serious harm to the environment as a result of coal-mining operations.
There need be no conflict between the role of the Coal Authority and that of the NRA or any other environmental regulator. The amendment seeks to give the authority which will, as the Minister has made clear, retain the freehold of the nation's coal reserves after privatisation, some operational responsibility so that it can act in the way that any responsible landowner, industrialist or farmer would act in an emergency, irrespective of the powers of the regulator. The definition of "coal-mining operations" in Clause 63 includes at paragraph (e):
"depositing spoil from any activities carried on in the course of coal-mining operations and draining coal mines".
In cases of immediate risk to the environment, particularly the water environment, it should be put beyond doubt that the Coal Authority will have the power to carry out such work, and any other works which are necessary, and to do that at once and without delay. My amendment would provide for just that. I commend it to the Committee.
Lord Elliott of Morpeth: I, too, support the amendment, and wish to speak to my amendment, Amendment No. 37, which has been grouped with these amendments. The purpose of my amendment is to ensure that the Secretary of State, in effecting transfers of property, should provide for the transferring of liability for water pollution to transferees. As the noble Lord, Lord Peston, said, what seems hours ago, the concern about mine water pollution has been well and

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truly emphasised over a period of time. Speeches have been made in another place as well as here, and answers have, to some degree, been given.
During proceedings in another place and here, a catalogue of assurances have been given about mine water pollution and its effect on the environment, and the extraction of water from rivers which may be damaged by pollution. Those assurances were greatly added to today in the able and excellent speech which my noble friend the Minister made in answer to the first debate. I congratulate him upon it, and with, I am sure others, shall study it carefully tomorrow. Perhaps I may immediately assure him that his assurance that in County Durham pumping will continue in disused mines will be well received. There has been great concern. Indeed, the Northern Echo, one of the North's principal newspapers, had as its headline this morning:
"D-Day for the River Wear".
I believe that that referred to the amendment that I had tabled, in that there was a hope in County Durham that the Government would at last include in the Bill an assurance that liability for any pollution that occurs would be placed fairly and squarely on the new authority.
Again, my noble friend gave an assurance—which we greatly appreciate—that the Coal Authority will be responsible for those aspects for which British Coal is now responsible. There is still no satisfactory answer to the question as to where in the Bill is there a guarantee on liability of the proposed new authority in relation to water pollution. That is what we very much wish to see. As in the Water Resources Act 1991 when for some reason which I have never understood the discharge of polluted water from an abandoned mine was exempted from being an offence, so also in this Bill mine water is excluded from liability should its discharge cause river pollution.
In his wind-up speech at the Second Reading of the Bill in this Chamber my noble friend said that there were many difficulties in this regard. I agree. I very much hope that British Coal's contention that polluted water from mines will find its way to the sea is correct. In County Durham there is an enormous number of workings. In pits close to the coast which have been closed that is already happening. However, we need an assurance. The National Rivers Authority and British Coal are involved in experimentation in relation to the effect of a reduction in pumping. We hope that there will be some satisfactory answers in future.
I assure my noble friend that water undertakers—and I was until recently chairman of North East Water—continue to be most concerned about the situation and would greatly welcome the inclusion in the Bill of something on the lines of the amendment that I have put down.
Lord Beaumont of Whitley: I rise to speak to Amendment No. 13. I am not entirely certain what our response should be to Amendment No. 29. I shall be interested to hear what the Government have to say on that matter. Amendment No. 37—on which my noble friend Lord Ezra may speak—carries widespread
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support in this Chamber. The first amendment, which carries the rest of the amendments on its back, is that in the name of the noble Viscount, Lord Addison.
The objective of that amendment is one which we ought to support and which we ought to write into the Bill. Before we go that far and before the Government reply I should add that I have some queries about it. do not know what is meant by "environmentally sustainable development". I am a member of the Select Committee of your Lordships' House which deals with sustainable development. I am totally committed to the idea of sustainable development, as indeed, following Rio, are the Government of this country. But sustainable development on the whole can be defined as being ecologically sustainable; namely, development which can carry the population and the nature of a country forward to future generations without loss. To say that development should be environmentally sustainable seems to me to produce another slightly different objective.
It is quite clear what the noble Viscount means because he said in his speech that he wanted to see a duty to preserve the environment. To a large extent. I agree with him. Not everyone would want to sustain all the environment that surrounds the coalfields of this country. In many places we want to improve it. There should certainly be a duty that it should be either sustained or improved.
In so far as this is an environmental amendment I should very much like to support it. But environment and ecological sustainability are by no means always the same. Ecological sustainability will demand a use of fuels which will need extremely hard headed accountancy of the kind which the noble Lord, Lord Sefton, has just been talking about. If you are talking about ecological sustainability you have to work out how you can get the power that you need from the various sources available and in such a way that it is sustainable into the distant future. But that may well go right against the environment. It may mean that one has to undertake opencast mining or have fields of windmills covering the hillside. I do not say that the equation does mean that; I certainly hope that it does not. But it is all too easy to make a simple equation between environment and ecological sustainability which does not stand up to examination. I am not sure that the terminology of the amendment is right even if its heart is in entirely the right place.
Lord Mason of Barnsley: I support the amendments, in particular the thrust of the new clause moved by the noble Lord, Lord Elliott. As I have explained to noble Lords previously, I am the chairman of the Anglers Co-operative Association for England and Wales. It is an organisation dedicated to fighting pollution. It has been established for over 40 years. Having taken polluters to court, we have lost only two cases in that time. We have a team of legal experts who are unrivalled in experience, With regard to experience and knowledge in court cases, we can even rival the National Rivers Authority.
A particular matter of concern is pollution caused by minewater discharges resulting from the cessation of

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pumping underground with the closure of mines. In particular, anglers in South Wales and Durham are, or will be, affected by those problems. The discharges invariably cause a deposition of rust sludge on the bed of the receiving water course. Apart from being unsightly, that deposit covers gravel in which fish might spawn and prevents plant growth. It consequently reduces insect life on which fish depend for food. In the case of a river such as the Wear in Durham—it is a most serious problem which confronts us—discharges may cause permanent damage to the salmon and sea trout populations.
In November of last year, the Anglers Co-operative Association—it has now changed its title to the Anglers Conservation Association—brought a private prosecution, to its knowledge the first ever prosecution, in respect of minewater discharges against British Coal Corporation alleging that it had caused or knowingly permitted polluting matter to enter the River Rhymney in Caerphilly in South Wales. After a two-week trial, the judge directed the jury to acquit. The basis of the reasoning was that British Coal had not caused the pollution.
Briefly, the prosecution case was that when controlled pumping (the resultant minewater being put into the river under discharge consents from the NRA) was stopped, the underground water table rose naturally. When it recovered its natural level, it moved laterally under pressure of gravity passing through old mineworkings and discharged through an old mine adit into the river. While passing through those old mineworkings, the water reacted with pyrites in those workings which caused the chemical reaction that results in the rust deposits in the river.
While the judge accepted that turning off the pumps was a cause, he found that the main cause was that the recovered groundwater was recharged by rainwater percolating through the upper soil which then reacted with the old mineworkings. Thus he concluded that the cause was a natural one and not British Coal's responsibility. He found that British Coal had no responsibility for or ownership of the old workings. My view is that the decision was wrong and I hope that we shall be taking it further.
The Anglers Conservation Association, the Salmon and Trout Association and all anglers are aware of the current privatisation legislation and see this as an ideal opportunity to deal with the environmental issue by way of legislation rather than litigation.
Clause 12 deals with schemes for the transfer of property, rights and liabilities to the transferees of the corporation. That has implications since a liability obviously includes abandoned mines. Yet no specific provision is made in respect of abandoned mines. I believe that it is clear that the Government do not intend to impose any duty to prevent polluting discharges from abandoned mines on either the Coal Authority or the new private operators.
I have before me a letter which the noble Earl, Lord Arran, at the Department of the Environment, sent to a parliamentary colleague in January this year. It stated:
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"As you probably know, under the Water Resources Act 1991, discharges permitted to flow from abandoned mines are exempt from the National Rivers Authority's statutory controls".
I know very well that the noble Lord, Lord Crickhowell, of the NRA would like to see the legislation strengthened in some way to give him reason to be able to take the polluters to court. The letter continued:
"The recent court case brought by the Anglers Co-operative Association against British Coal failed, I understand, not because of the exemptions in the Water Resources Act, but because the judge was persuaded that the pollution in the River Rhymney had not come from British Coal's workings.
The Government recognises that the existing legislation may need to be reassessed and undertook, in This Common Inheritance: The Second Year Report, to consider the framework of legal responsibility for pollution in abandoned mines. A review of this subject is now under way, in tandem with an inter-departmental review of contaminated land and liabilities, which is addressing the broader issues of allocation of responsibility for the costs of pollution".
That is clear. It will not be in this Bill and the Government intend not to recognise pollution from abandoned mines. There is no urgency on the part of the Government, as is clearly indicated.
In relation to the current pollution by minewater discharges and in relation to future pollution by cessation of pumping in the short term and the long term, I think we have no possibility of it being recognised by the Government in the Bill. I think it is all wrong and I hope that we can make some progress. But as indicated in that letter, I do not think we shall.
9.30 p.m.
Lord Strathclyde: I did not interrupt the noble Lord as he was winding up, but he gave an impression on one important point. I cannot remember exactly what he said, but the impression was that the Coal Authority did not accept any liability. Once a mine has been abandoned—any mine, anywhere—it then becomes the responsibility of the Coal Authority. That is quite important. There is then a question about the Water Resources Act 1991 with which I shall deal in my more substantive reply later.
Lord Crickhowell: First, I wish to take up the points made by the noble Lord, Lord Mason. After many other distinguished services, he rendered distinguished service as a member of the board of the National Rivers Authority for some time.
Perhaps it is worth recording that he was not aware of any occasion on which there had been a successful prosecution for pollution of the water environment by a mine. However, there was one such case in 1981 in Scotland where it was possible to establish that the National Coal Board had caused pollution when it closed a Scottish mine which it had opened, operated and then closed. So the cause was the total operation; it did not depend simply on the act of turning off the pumps.
I must say to the noble Lord, Lord Mason, that he was a little unfair to my noble friend the Minister in saying that he was not addressing the problem adequately or with sufficient urgency. I believe the noble Lord ignored the important statement made by my noble friend earlier in the day when he said: "Yes, we are carrying out a major review of this complicated question, but in the interim we are making arrangements for the pumping in

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Durham and elsewhere to continue". That was an extremely important concession and was very welcome to the National Rivers Authority. I should not like the debate to move on without acknowledging it.
At Second Reading I said that it might well be that the wider problem would have to wait for a future environment Bill for a full solution. I am not sure that we can adequately deal with it in this Bill, if only for the reason that it is a coal Bill; and there are other mines that need to be covered in future legislation.
I do not want to repeat the debates that took place earlier today, and I shall try to avoid doing so. Perhaps I may just say that in principle I welcome my noble friend' s amendment about sustainability. It is desirable that we should always seek to write into any legislation, or indeed almost any business plan, the principle of sustainability. I am not quite sure that we have got the wording precisely right. But the idea that sustainability should be set down as one of the duties that an organisation should pursue is desirable.
I also agreed with my noble friend when he cast some doubt on the adequacy of the environmental clauses, Clause 3(7) and Clause 53(2). Indeed, I expressed exactly that anxiety in my Second Reading speech. I explained earlier today why I did not intend to put down any amendments myself. But I am rather disappointed that amendments have not been put down. There will of course be later opportunities. I should at least like to see the words "the environment" and perhaps "the environment and controlled waters" added to the relevant sections of those clauses. It is rather curious that we have this list which includes "natural beauty", "flora and fauna", "geological or physiographical features", "sites, buildings, structures", and so on; yet we do not cover the environment and the water environment quite clearly in that same clause. We ought to look at that point again.
I particularly welcome the amendment that was put down by the noble Lord, Lord Moran, who again is someone who has given distinguished service in the past to the National Rivers Authority as chairman of one of our fisheries advisory committees. Perhaps I may take this opportunity, as he has ended his duties there, to thank him for that work. It is therefore perhaps not surprising that he has addressed this particular issue. Perhaps I might call it the Wheal Jane clause, referring yet again to that incident. The noble Lord said that he did not think that there was any conflict between the duties of the NRA and those of the Coal Authority. Indeed, that is absolutely right, and it helps to avoid a conflict. The NRA does not believe that it should be an operational organisation. It believes that it should be a regulatory organisation. In my view it should be the responsibility of the owner of land to make sure that adequate measures are taken to protect the environment if something goes wrong.
My particular anxiety about the Bill as it stands at the moment is that the authority,
"shall not have power … for commercial purposes or with a view to itself using any coal or product of coal, to carry on any coal-mining operations",
and so on. What I am afraid of is that that clause might be deemed to prevent the Coal Authority from taking
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emergency measures, which might include the need to dispose of coal as part of the operation in order to safeguard the environment. That is the point that we need to have clarified.
On my noble friend's Amendment No. 37, I do not intend to repeat the arguments that we had in relation to Amendment No. 1 earlier today. I do not think that my noble friend's amendment fully covers the anxieties that we then raised. I have one other difficulty with it. It talks about the responsibilities that arise from Clause 161 of the Water Resources Act. I feel that it probably ought to refer to Clause 85 of that Act, which is the clause which imposes the liabilities and the duties.
Clause 161, interestingly enough, takes us back to the amendment of the noble Lord, Lord Moran. It is Clause 161 which enables the National Rivers Authority to carry out certain duties to prevent pollution and then recover the costs of doing so. The National Rivers Authority does not want to be put in the position in which it was put in the case of Wheal Jane of carrying out the duties and then having to recover the costs. It would much prefer to see the duties carried out under its regulatory control by another body—on this occasion by the Coal Authority. That is why I so much welcome the amendment of the noble Lord, Lord Moran.
Baroness Nicol: I want very briefly to support Amendment No. 13 tabled by the noble Viscount, Lord Addison. As my noble friend Lord Morris of Castle Morris said at Second Reading, the potential for damage to the environment, particularly from opencast coal mining, is very great indeed. No doubt the Minister will tell us that planning controls will take care of that matter. But planning controls can only take care of future proposals. They cannot take care of existing operations; for example, the abandoning of mining operations that are going on at this moment and which could cause potential damage. Therefore we need to have a general duty placed on the authority.
The Government claim to support sustainable development. Most of us have seen the very impressive document which came out just a few weeks ago. Some of us are working on it in the committee dealing with sustainable development. We can expect to believe that everything that the Government do from now on will show their dedication to the cause of sustainable development. But it is not obvious in this Bill. I hope that when the Minister winds up the debate he will be able to reassure us about that. It seems to me that an industry such as the coal industry should be the last to be excluded from the Government's strictures on this matter.
The amendment of the noble Lord, Lord Moran, could be very valuable in certain circumstances, such as flooding, as we heard, possible river pollution and where action is needed in a hurry. I ask the Minister to tell us—if he is not minded to accept the amendment —how such a crisis will be dealt with in its absence. Does he feel that the existing powers in the Bill are sufficient? I support both the amendments very strongly. I hope that they will be accepted.
Viscount Torrington: I recognise the good intentions behind the amendment of my noble friend

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Lord Addison. I realise that it concerns primarily matters such as water. However, taken at face value, I have a feeling that it would have one rather undesirable side-effect; namely, to prevent coal mining. Frankly, I do not believe that coal mining is environmentally sustainable in the long term under any circumstances. It took something like 300 million years for the atmosphere of this planet to become breathable as we fixed the coal in the coal measures. We are now digging it all up and chucking it back into the atmosphere and doing it within a couple of hundred years. So coal mining in the long term is not sustainable. But I suspect that, until we have something more effective, we shall have to continue with it.
Lord Dormand of Easington: I strongly support the amendment. I hope that we shall not hear too much criticism about the terms of the amendment. It seems to me that the very nature of coal mining requires the kind of control—I believe that that is the right word —that is contained in this amendment.
I understand what the last speaker said. I speak as one who has lived all his life in a coal mining area. But it is possible to improve the environment, even if one lives on a coalfield. I am glad to see that the noble Viscount agrees. There has been substantial improvement in what can be done in and around a coal mine. It would be quite wrong of society to ignore that fact.
I shall speak briefly and do so only because the noble Lord, Lord Elliott of Morpeth, and my noble friend Lord Mason of Barnsley both referred to County Durham, about which I have already spoken. However, I have to say again that this amendment pinpoints the problem of mine-working pollution. Here we are, on the first day of Committee, and the issue has already been talked about for a number of hours. As we know, the National Rivers Authority is the agency responsible for dealing with pollution of controlled waters. The authority is spending millions of pounds in that regard in relation to the Wheal Jane tin mine in Cornwall, as was mentioned by the noble Lord, Lord Crickhowell. The noble Lord, who I am glad to see in his place, has already made some notable contributions to the debate as chairman of the authority. On Second Reading, at col. 1346, he said that,
"in the Durham coalfield [and other cases] the resultant economic and social effects would be even worse than those associated with the Wheal Jane Tin Mine".
It cannot get much worse than that. He said today, I believe—and I have read about it—that the costs so far at that mine are in the region of £8 million, and I assume that they are ongoing.
We must congratulate the noble Lord and his authority on the report entitled, Abandoned Mines and Water Environment. It is dated March 1994 which means that it is not only authoritative, but also that it is smack up to date. I hope that it will form the basis of any discussion that takes place on minewater pollution during the remaining stages of the Bill.
The report describes both the potential and actual damage resulting from abandoned mines and the legal and practical difficulties the authority faces in its efforts to prevent and clean up associated pollution. In the north-east of England the NRA is faced with 15
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significant discharges and some 100 discharges in total. That is a measure of the problem facing my part of the country and, I have no doubt, other parts of the country unless the Government consider seriously this extremely important problem.
9.45 p.m.
Lord Gray of Contin: I have met since Second Reading a wide variety of people connected with the coal mining industry. The representations made to me on behalf of those with environmental concerns have been far and away the most impressive. I want to emphasise to my noble friend therefore that whatever disagreement there may be between the various parties who are for or against privatisation, one item common to all those interested in the legislation is the question of the environment.
I attended a meeting where suggested amendments were put forward. I offered the view to those consulting us—it was quite a representative meeting—that it was the environmental issues that were likely to receive the most serious consideration in your Lordships' House. As the noble Lord, Lord Dormand, said, much of today's discussion has been on environmental issues. I venture to suggest that those issues will form a significant part of the remainder of the discussions in Committee and indeed on Report. I say that purely to emphasise to my noble friend that as one who is a strong supporter of the Bill and of the privatisation of the coal industry I feel that it is one issue to which we must pay special attention.
The Earl of Lindsay: I wish to pick up a point made by my noble friend Lord Torrington and also anticipated by the noble Lord, Lord Beaumont, in the definition attaching to sustainable development, especially the definition implied by the wording of the amendment tabled by my noble friend Lord Addison. The phrase "environmentally sustainable development" implies that it is not sustainable development in the normal sense. My noble friend Lord Torrington is therefore correct that, on face value, the way that the amendment has been tabled suggests that coal mining should cease forthwith.
The international definition which has found some consensus is that sustainable development should allow the needs of the current generation to be met without compromising the needs of future generations. Therefore, it is not involved with arresting all ecological loss, as the noble Lord, Lord Beaumont, pointed out. The entire way in which we live our lives has some form of environmental impact. Sustainable development is about options. It is about analysing those options and choosing the better and more sustainable options.
I would encourage my noble friend to take this amendment forward in principle. This is an excellent opportunity to write into primary legislation the words "sustainable development". I back other Members who have lamented the lack of a general environmental duty. Clause 3(7) is rather quaint but in 1994 it is very old-fashioned. It does not have the general environmental duty which the Government have vested in other

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recently created agencies and authorities. The amendment would not only cover that duty but would also write in sustainable development where it belongs. Sustainable development is about integrating economic and environmental needs. Legislation about the future of the coal industry is probably an ideal opportunity for this.
Lord Ezra: I was at the meeting to which the noble Lord, Lord Gray of Contin, referred. His remarks then made a considerable impact, as I am sure they have in the Committee today. The question of the environment is a wide-ranging one which will certainly keep recurring as we go through the Bill. At the moment the main issue has turned out to be the problem of minewater pollution, which is specifically dealt with in the amendment of the noble Lord, Lord Elliott. There is a very serious problem, as we have heard from both sides of the Committee, and it is important that a message should go from here in consideration of this issue which will give some measure of alleviation to the very real concern that exists. This is an immediate issue. There are also longer term issues, to which the noble Lord. Lord Crickhowell, has referred, which are implicit in the discussion we are having at the present time.
Earl Bathurst: I rise only with great deference after noble Lords, including the noble Lord, Lord Crickhowell, who are great experts. Has not my noble friend the Minister given a most valuable and interesting answer in saying that the new Coal Authority will in fact take on all the obligations of the old Coal Board? If that could be put into the Bill in some way or another, would it not meet all the troubles and fears expressed by noble Lords opposite and other noble Lords who know something about the subject? Perhaps my noble friend could expand on that answer. It was a most interesting one to all who have problems with the Bill.
Lord Strathclyde: Perhaps I may have the opportunity to reply to what has again been an interesting debate on the whole question of environmental liabilities and on the statutory duty on the environment which we may put on to the Coal Authority. It is probably a rather better opportunity to have the debate in the quietness of the evening than in the heat of the afternoon when I replied to the debate on Amendment No. 1.
The three amendments would, respectively, give the Coal Authority a broad statutory duty to promote environmentally sustainable development; deal with the detailed issue of whether the authority can carry out mining operations where the aim is the avoidance of pollution; and provide for the transfer to the authority of British Coal's liabilities under the Water Resources Act. I join entirely with what my noble friend Lord Gray of Contin said about the importance of environmental liabilities. He said that the greatest consideration should be accorded to it. I agree with him on that point, as I do on so many others.
Amendment No. 13, moved by my noble friend Lord Addison, would place a duty on the Coal Authority, in carrying out its licensing functions, to further the objective of environmentally sustainable development.
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In a very useful contribution, the noble Lord, Lord Beaumont of Whitley, explained some matters which I did not know about the difference between environmentally sustainable and ecologically sustainable development. That has helped the debate on. Clearly there is some doubt about the meaning of the words and therefore they are not acceptable. I believe that the terminology used is important. The noble Lord, Lord Dormand of Easington, suggested that I should not use terminology as an excuse for not accepting the amendment. It is important that we stick to the terms. If the noble Lord did not say that I apologise to him.
I described in some detail earlier the role that the authority will play in dealing with water pollution from coal mines. I shall return to that in a moment. The Coal Authority explanatory note sets out more broadly the role of the authority in respect of works carried out on its land. That goes much further than the duty in Clause 3(7) which has been mentioned. But the responsibilities that it will discharge will be those of the owner of these mines. To give the authority a specific statutory role relating to environmentally sustainable development would cut across the existing detailed and well-developed framework of legislation dealing with environmental issues relating to mining. The planning authorities, the local authorities, the environmental regulatory bodies such as the NRA, the bodies in Scotland and the nature conservation bodies which exist in England already have carefully defined roles. During the course of the debate I have not understood what is the new role of the Coal Authority and how it will fit in to the environmental duties which are already imposed on so many other bodies.
I began by saying that I agreed with my noble friend Lord Gray of Contin. I do, but I do not see how the provision is going to mesh. I believe that it could create, confusion, particularly given the fact that this House has, a Select Committee specifically dealing with the issue of sustainable development. Its report may well give us the kind of guidance that would be useful on how to apply legislation to these kinds of statutory bodies in order to allow the kind of sustainable development which my noble friend mentioned. Where appropriate, we have taken steps to strengthen the planning mechanisms. I refer my noble friend not just to Clauses No. 53 and 54, which broadly place obligations on the Coal Authority and the operators under the planning system.
I now turn to the amendment of the noble Lord, Lord Moran, who addressed the detailed question of prohibition in coal mining operations by the authority which is set out in subsection (6) of this clause. I understand the anxiety that this prohibition should not prevent the authority from acting where necessary to secure that any operations which are necessary to prevent an imminent risk of serious pollution to the environment are maintained.
I understand entirely the point of this amendment and the anxieties of the noble Lord, Lord Moran, with his responsibilities for the angling fraternity, and those of my noble friend Lord Crickhowell. However, I am advised that the amendment is not necessary. It adds nothing to the Bill because the situation is already beyond doubt. If that is the case, then I do not believe

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that we need take the debate any further. If it is not the case, I shall seek further advice, because the matter should be put beyond doubt. I believe that it is beyond doubt because the prohibition on coal mining operations by the authority, as my noble friend Lord Crickhowell noted, is solely a prohibition on the carrying out of certain operations for commercial purposes. There is no such prohibition in respect of other purposes. Since the purposes which the amendment addresses—namely, the prevention of pollution—are clearly not commercial purposes, they will not be caught by the prohibition in Clause 5(6) of the Bill.
My noble friend Lord Crickhowell mentioned a situation in which the authority might need to move coal. I do not believe that the prohibition would apply as regards that example. Moreover, minewater pumping on its own is not an activity which falls within the category of coal mining operations that would be prohibited if commercial.
10 p.m.
Lord Crickhowell: I am grateful to my noble friend for what he has said and am to some extent reassured. However, I should be glad if he could look at this again to make quite certain. It might, for example, be highly desirable for the Coal Authority, having had to shift coal and incur a lot of expenditure, to be able to sell the coal in order to reduce its costs, but as part of the operation and not for commercial purposes. I want to make quite certain that such contradictions do not exist.
Lord Strathclyde: There is no intention on the part of the Government to create any contradiction. However, I shall look at this matter again. As I said, I am advised that the noble Lord's amendment is unnecessary because the provisions are already in the Bill. Obviously we have to make sure that that is the case and I shall ask my officials to look at the question carefully.
I turn now to the third amendment, Amendment No. 37. This is a very important amendment—not just in specific terms but because of the issues with which it deals which would impact on any restructuring scheme made under Clause 12. The Secretary of State will be obliged to transfer all criminal and civil liabilities of British Coal under Section 161 of the Water Resources Act 1991 to the successor company in whose favour the scheme has been made. The purpose of the new clause is to clarify the position with regard to the responsibilities for water pollution following the privatisation of British Coal.
As has been noted, I made a statement this afternoon on this question. I do not want to overstate the importance of that statement, but it was specific and important because of its acceptance of two things: first, that there is a problem with water pollution and, secondly, that the Government are going to do something about it in practical terms, although it is only an interim step. I explained why it had to be an interim step because of the review. However much we may think that we are qualified to legislate, we are not qualified to legislate on this issue until we have had the
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full review with the help of the NRA's excellent report. The assurance that I gave this afternoon was designed to allay fears about the possibility of minewater pollution and the role of the Coal Authority during the run-up to privatisation, post-privatisation and before we have the new regime in place after the review. In that respect, it is an important issue.
The other reason why I felt that it was important to come to the Committee this afternoon with a prepared statement was to avoid noble Lords having to write further amendments for the next stage of our consideration of the Bill when we would simply get ourselves further into a muddle. I hope that the statement that I made earlier is clear enough to alleviate the majority of the problems raised by my noble friends and noble Lords in all parts of the Committee.
I hope that what I have said in this debate is helpful and reinforces my earlier statement. I say again to the noble Lord, Lord Moran, that we shall look again at the issue to try to get it right. I am sorry that I cannot accept the amendment of my noble friend Lord Addison. It could well be that we need to discuss this further, but I am not convinced that a case has been made or of the way in which the proposals would work in practice. In the light of that, I hope that my noble friend will withdraw his amendment.
Viscount Addison: I am grateful to my noble friend for his response to my amendment and for the support of noble Lords. I am glad that my noble friend recognises the serious nature of the environmental aspects of the Coal Authority's operations, but it is disappointing not to see that more clearly stated on the face of the Bill. However, at this stage, I shall not press the matter and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn,
[Amendments Nos. 14 to 16 not moved.]
The Deputy Chairman of Committees (Lord Airedale): I have to say that if Amendment No. 17 were to be agreed to I could not call Amendment No. 18.
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 17:
Page 2, line 47, leave out paragraph (b) and insert:

("( ) a viable and sustainable coal industry in Britain that over a long-term will achieve and retain a competitive position in relation to other fuels.").

The noble Lord said: The purpose of this amendment is to ensure that the authority is established in a way that ensures that the United Kingdom coal industry as a whole achieves competitiveness with other fuels. That is the form of competitiveness that we are interested in. Subsection (2) (b) is not satisfactory to us because it sees competitiveness solely within coal mining operations. There are several factors which will influence the competitiveness and the viability of the coal industry in the future. First, the structure of coal's biggest market: electricity generation, where the contracts are for three years only. Secondly, the structure of the industry when it is sold off: for example, how many mining operators will there be? According to the Bill it can be anything from one to five regionally, plus some other smaller fish around the edges of the

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pool. Thirdly, the ability of the Coal Authority to improve the viability of the industry, though it would be difficult to raise productivity greatly.
The fact that the market against coal has been rigged over the past few years is one which we have not ceased to preach and the Government have not actually conceded to us, but we still believe it. As we have often said, the nuclear subsidy, the dash for gas and the electricity imports via the link from France, have made it difficult for coal to be anything other than squeezed out of its largest market, electricity generation in England and Wales. The result of that has been the wholesale pit closures of the last 18 months. A further contraction of coal's market share seems to us to be almost inevitable over the next three to four years, as more gas-fired stations come on stream.
In many respects then, the process of privatisation will not really be the key determinant of coal's future. The overall scale of the industry is constrained very tightly by the unfair structure of its principal market. In fact, whether the pits are publicly or privately owned, little can be done to increase the total size of the market for coal. However, in other respects the structure of the mining industry after privatisation and the current wording of Clause 2(2)(b) could have a significant impact on the future survival of deep mining.
I noted very carefully the remarks made by the noble Lord, Lord Haslam, former chairman of British Coal, in the debate in your Lordships' House on Second Reading of this Bill, which were very relevant to this matter. He talked of a minimum of 35 pits being necessary to provide a critical mass, to allow continued access to a high proportion of the nation's coal reserves and to compete on the world market. Those remarks appeared on 11th April in the Official Report, at col. 1329.
The noble Lord, Lord Haslam, argued particularly strongly against fragmenting the industry which the Government are encouraging with the five regional packages recently announced as the basic structure of the sell-off and the inclusion of this clause which encourages the Coal Authority to promote competition. Referring to British Coal's tremendous recent record of productivity increases, he said —and I quote—
"This performance hardly reflects a lack of competition and indeed I do not know any other major UK industry which can match these dramatic productivity figures over the past decade. I have been involved in many industries in my career and without reservation the competition I experienced in coal was much the toughest. To sum up, British Coal needs more competition like a 'hole in the head'."—[Official Report, 11/4/94; col. 1330.]
He added a little later in the same column:
"If British Coal is broken up into five units we really will have a "rag-bag" of an industry… If this fragmentation policy is pursued, I predict that only a minimal coal industry will be left at the end of the decade".
The Government should heed the words of the noble Lord—or is that what the Government want to happen?
The noble Lord, Lord Haslam, echoed fears expressed by many other commentators that the break-up into small units will be strategically destructive. The nature of coal mining is such that constant capital investment is needed for development. Additionally, in Britain geological conditions are particularly unpredictable. Geological problems can potentially halt production at any time in any area. If
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individual pits or small mining companies are competing with each other, the incentive will be to minimise development expenditure, leading to pits being operated on what has been dramatically, but I think accurately, described as a "rape and pillage basis", in which collieries are kept open only until the reserves requiring the bare minimum of development are exhausted.
The requirement in Clause 2(2)(b) that the Coal Authority promotes competition is therefore, in our view, likely to result in a deep mine industry which shrinks to virtually nothing within a decade. That is clearly contrary to the requirement in Clause 2(1)(a) that it maintains and develops an economically viable coal industry.
What then can the Coal Authority do to protect the future of the industry? One practical area in which the authority could exercise some influence would be to encourage the drawing up of long-term contracts between new operators and the electricity generators when the present contracts expire in 1998. There is plenty of example for that. Many US coal operators have contracts of 15 or even 30 years with electricity companies. This would have two positive effects. First, mining companies would have sufficiently long-term horizons to encourage proper capital investment in development. That would result in the better utilisation of the nation's most abundant energy resource. Secondly, longer-term contracts with the generators would put coal on a more equal footing with nuclear power, which has a guaranteed market share, and gas-fired stations, which typically have 15-year contracts with the RECs.
In our view, the Coal Authority should encourage co-operation between mining operators in areas which would be beneficial to the future of the industry as a whole; notably research and development in mining techniques, in clean coal technology and in marketing, as we mentioned earlier.
In summary, most of the damage to Britain's mining industry has already been done. By the end of the year when leasing and privatisation processes are complete there will be perhaps 20 operating pits compared with 170 at the end of the miners' strike in 1985. The likelihood is that still more collieries will close if the present structure of the electricity generating market in England and Wales is not altered. Access to most of Britain's plentiful coal reserves has already been lost and the nation will pay the price for this in the early years of the next century when our gas reserves are undone and we become dependent on imported fuels. There are, nevertheless, steps which the Coal Authority could take to maximise the size of the coal industry into the future if it is allowed to take a pro-active approach. As it stands, the Bill suggests that the authority should promote competition between the new mining operators when the industry as a whole already faces intense and unfair competition from its competitors in the electricity generation market.
This amendment seeks to replace this needless requirement with one which will encourage and enable the authority to promote the interests of the nation as a whole, which lie, I suggest, in sustaining the largest

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possible deep-mine industry well into the next century. That will be done not by internal competition but by a united and competitive coal industry. I beg to move.
10.15 p.m.
Lord Strathclyde: What an extraordinary speech made by the noble Lord. It shows that the politics of central planning and socialism live on in the noble Lord's brain. I suppose that I should be grateful for that, because it makes my job and the Government's job much easier.
Clause 2(2) (b) imposes a duty on the Coal Authority to have regard to the desirability of promoting competition. This amendment seeks to remove that duty and require the authority to have regard to the desirability of securing a viable and sustainable industry over the long term and to retain a competitive position. The Government's objective is to facilitate the development of the largest economic industry in the longer term.
We believe unashamedly that that is best achieved through the mechanisms of the market place, which provides the most effective and efficient means of meeting energy needs. It is within competitive markets that prices are best determined and costs can be exposed to rigorous test. That is why Clause (2) (1) (a) places a duty on the authority to secure, so far as practicable, that its licensees maintain and develop an economically viable coal industry.
Attempts to impose all-embracing plans about how much energy of what kind should be produced or consumed by whom are doomed to failure. I am sure that in his heart of hearts, the noble Lord recognises that. It is not within the Coal Authority's power to guarantee that an economically viable or sustainable coal-mining industry is maintained and developed by licensees, or that the industry will retain a competitive position. That depends more on the action of licensees and developments in the market.
What the authority can do is to provide information. It can make available the coal resource and property within its ownership. It can establish a competitive licensing regime to facilitate development of the coal industry by licensees.
The Government firmly believe that the workings of the market are the best way of securing an efficient and effective industry for the future. The Bill as drafted provides the right balance of duties on the authority and the noble Lord's amendment is unhelpful.
Perhaps I may take up one point which the noble Lord made. He used the words of my noble friend Lord Haslam to support him. He said that we are splitting the industry into five parts, and that that is bad. We are not splitting the industry into five. We are giving the private sector the opportunity to decide for itself what kind of industry it wants. As the noble Lord knows, it is perfectly possible that one buyer will come forward to buy all five separate areas. Therefore, it is not the noble Lord who is making the decision about the future make-up of the industry; it is the private sector.
The noble Lord may say that the private sector is wrong. That leads us back to the unbridgeable gulf
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which exists between us, because I believe that, ultimately, the private sector will make the right decision. The worst way of going forward would be by accepting the amendment proposed by the noble Lord.
Lord Ezra: In spite of what the noble Lord has just said, I believe that there is a strong point in the main issue raised by the noble Lord, Lord Morris; that is, that the competitive threat facing coal is really from other energy sectors, and that that should be the object of the whole exercise. A thriving, revived coal industry, under this new regime, will be possible only if it can fight other forms of energy. An internecine battle between small coal companies will do the reverse. It would set us right back, as I said on Second Reading, to the situation which existed between the wars, when a former Conservative Government, under Mr. Baldwin, had to intervene to bring together the warring companies and to put some sense into the marketplace.
Therefore, I am entirely at one, as I was on Second Reading, with the noble Lord, Lord Haslam, that the real competition is between coal and other forms of energy and the emphasis in this clause that the competition should be between the different coal companies seems to me to be misplaced.
Lord Strathclyde: Of course we want a competitive industry. As I have always said, that is the essence of the Bill. However, the noble Lord, Lord Ezra, has not answered the point which I made; namely, that it is neither I nor the Government who are making the decisions about the future shape of the industry. It is the private sector which will make those decisions. If what the noble Lord says is so true and self evident to everybody apart from the Government and myself, then surely the private sector will come forward with one bid.
Lord Ezra: That is not how the private sector reacted between the wars. It went flat out for internecine competition. Can the Minister assure me that it has now grown up and taken advantage of that experience, and that we will not return to that situation?
Lord Strathclyde: What is so essentially different in the energy market in the last decade of the 20th century compared to what it was between the wars is that we already have a much more diverse energy market than we have ever had. There are already so many choices that the coal industry does not need to compete with itself. Its position will be to compete with the other energy industries. The noble Lord and I can probably agree on that.
Lord Morris of Castle Morris: On one matter I think that the Minister and I can agree. On the question of competition, between you and me there is, in the words of the Holy Writ, "a great gulf fixed". There are various forms of competition. It is not one single concept. Some are destructive and mean; others are stimulating and good.
I am grateful to the Minister for the exegesis which he has given of his position. I shall read it with great care tomorrow. It has all the virtues of clarity. This issue, of course, will not go away, and, like General

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MacArthur—was it not?—during the Second World War, I say, "I shall return". Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 18 not moved.]
Clause 2 agreed to.
Clause 3 [Duties of the Authority with respect to property]:
Baroness Turner of Camden Baroness Turner of Camden: moved Amendment No. 19:
Page 3, line 21, at end insert:
("(2A) It shall be the duty of the Authority to retain freehold ownership of the coal and coalmines transferred to it in accordance with section 7(3) below.").
The noble Baroness said: I move the amendment in the absence of my noble friend Lord Peston. I am sure that he would want me to say that it is a helpful amendment. One might even describe it as sincere. It is also a probing amendment. As will be seen, Clause 7(3), to which the amendment refers, states:
"On the restructuring date the Corporation's interests in unworked coal and coal mines, including its interests in any coal that, notwithstanding having been worked at some time, is so attached…shall vest without further assurance in the Authority.".
The amendment seeks to ensure that the freehold of the coal, and the liabilities that attach to it, rest ultimately with the Coal Authority. Of course, leasehold interests and other rights can be granted, but on the termination of such interests ownership and the accompanying responsibilities should revert to the Coal Authority. That seems a reasonable proposition given what is set out in Clause 7(3). After all, someone has to hold the freehold. It seems to me in the circumstances that the appropriate body is the new Coal Authority. I hope that the Minister will accept that the amendment is intended to be helpful and to fill what we see as a slight vacuum in the Bill. I hope that he is prepared to accept the amendment. I beg to move.
Lord Strathclyde: I am grateful to the noble Baroness for the way in which she moved her noble friend's amendment. In my opinion she probably moved it rather more speedily and effectively than he would have done. I hope that perhaps she can move some more of her noble friend's amendments in like manner. It is an important issue. It is certainly envisaged that the Coal Authority will normally retain the freehold of coal and coal mines. But we cannot rule out the possibility that there will be circumstances in which it is appropriate for the authority to dispose of the freehold. It is just possible that a purchaser might, for one reason or another, having earned out, say, opencast operations, attach substantially greater value to associated freehold surface land in the authority's possession if he also had the freehold of the coal. If it were in an isolated area of open grass it is not obvious that there would be disadvantages in selling the freehold. However, there is no suggestion—and I would not like the noble Baroness to understand it in that way—that that would be a likely or frequent occurrence. However, it would not be prudent to rule it out altogether.
Perhaps I may reassure the noble Baroness that we recognise that freehold disposal on a large scale would be undesirable. In the past fragmentation of ownership
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has made exploitation more difficult. We shall therefore want to minimise the extent to which that happens, especially because there is always a possibility of new methods of exploitation.
I hope that that reassures the noble Baroness. I hope that it also explains what is at the root of government thinking on this issue and that she will withdraw the amendment.
Lord Northbourne: Before the noble Lord sits down can he confirm that there is a significant number of pits which are not owned freehold by British Coal at present but are owned by third parties?
Lord Renton: Before my noble friend answers that question perhaps I may make this point. He has properly made a distinction between freehold ownership of the surface and freehold ownership of the coal and coal mines. Here we get into a slight state of confusion because coal mines necessarily have to have works on the surface. It would be impossible to work the coal mines and to use the freehold rights in the coal without having access to and in certain circumstances ownership of the surface. Perhaps that is a matter which my noble friend would like to clarify or confirm.
Lord Sefton of Garston: I see no reason why the Minister cannot accept the amendment. In the Second Reading debate (at col. 1293 of Hansard for 11th April) the Minister described the powers being given to the Coal Authority as being to license coal mining, to own and to grant access to coal reserves. That does not mean freehold ownership.
Lord Strathclyde: I am sorry if the noble Lord, Lord Sefton, misunderstood either what I said or the Bill. The idea is that the licensee is given exactly that—a licence on the coal and a lease on the coal which gives him the ability to dig it out and then to sell it. I explained to the noble Baroness the thinking behind that.
The noble Lord, Lord Northbourne, asked me a perfectly valid question. I do not know what the proportions are, but it is true that British Coal owns some mines which are leased, sometimes on very long leases.
As regards the comments of my noble friend Lord Renton, British Coal owns the freehold of the underground mines but does not necessarily own the freehold of the land itself.. I am not sure whether my noble friend made some neat legal point. I do not pretend to be an expert on this issue. It had not been raised in my mind as being a particularly awkward issue. I am sorry if I have misunderstood my noble friend.
Lord Renton: Perhaps I may attempt to elucidate. The original surface belongs to the owner of the freehold, whether it be a landowner or some other legal person. But when the freehold in the coal—what used to be called the mining royalties —comes to be exploited that can only be exploited if there are surface works. As I understand it, under the present law, which has existed since the days more than 60 years ago when mining royalties were unified—which was the euphemism which was used at the time—those surface works ceased

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to be in the ownership of the original owner and came into the ownership of the people who were working the coal —in other words the coal mine. That was my point.
Lord Strathclyde: My noble friend is absolutely right. I am sorry that I did not understand him the first time around. I believe that he has clarified the situation. I agree with him.
Viscount Torrington: Perhaps I may ask a point of clarification. Am I right in believing that the ownership of the freehold of the coal is what is vested in the authority under the Bill? Therefore surely it cannot demise that in any way. The amendment seeks to make the authority retain the freehold, but it is duty bound to do so. It cannot demise coal rights.
Lord Strathclyde: The Bill allows in exceptional circumstances—I explained what the circumstances would be—the sale of the freehold of the coal. Otherwise what my noble friend has said is right, and in general circumstances the Coal Authority will not sell the freehold but simply give a lease.
Baroness Turner of Camden: I welcome the assurances which the Minister has given in response to the amendment. I welcome that he states that the Government recognise that it would be undesirable to fragment ownership and that one would wish to minimise the extent to which the possibility of disposal of the freeholds could occur. In view of the concern that has been expressed in various parts of the Chamber this evening, will the Minister reconsider the matter to see whether at Report stage, if they do not like the wording of our amendment, the Government would be prepared to introduce their own amendment to make the situation clear?
Lord Strathclyde: I am happy to have a look at the provision. I certainly thought that I was very clear in my initial answer. However, I shall consider whether the provision should be clarified.
Baroness Turner of Camden: I thank the noble Lord. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.30 p.m.
Lord Northbourne Lord Northbourne moved Amendment No. 20:
Page 3, line 33, after ("Authority") insert
("—

(a) before it disposes of any interest in any agreement which permits the temporary occupation of the surface land or other rights in land for the purpose of undertaking coal mining operations, to insert such additional obligations in the agreement as are necessary to provide adequate protection to each person with an interest in the land to ensure that there are appropriate guarantees, bonds, deposits or other terms to secure—

(i) the payments due during the term of the agreement,

(ii) the terminal payment due at the end of the agreement, and

(iii) other payments that may be due during or after the occupation of the land as a result of the coal mining operations, and

(b) subject to paragraph (a) above,").

The noble Lord said: With the permission of the Committee, I beg to move the amendment standing in the name of the noble Lord, Lord Stanley of Alderley, and myself. I shall speak also to Amendment No. 35. I have already declared an interest at Committee stage which I hope will be satisfactory to noble Lords.
Throughout the afternoon I have sought the origin of a quotation which I heard the other day. It was this: "Don't talk to me about a man's assets. Show me his liabilities". The amendments relate to liabilities—the liabilities which have been incurred by British Coal over the years in the prosecution of its operations. They relate to any current or future agreements between the authority or the Secretary of State (as the case may be) with third parties which permit those third parties temporarily to occupy the surface of the land in association with mining operations. I am assured that the mining operations in this context include the closing down of pits and the exploitation of the land surface on which they stood. I should be grateful if the Minister would give me guidance as to whether I have been correctly informed.
The amendments seek to ensure that third parties to whom assets and liabilities of British Coal are transferred have protection against liability at the same or comparable level to that which they would have had had British Coal retained the operating licence. Is it a big problem? How many pits in the country are held freehold other than by British Coal? How many are held under licence or lease? Perhaps the Minister will give a written answer; I shall therefore not trouble him for an answer now.
I cannot tell the Committee the number regarding land ownership of the freehold. But a number of other parties may be involved in liability, such as neighbours, householders, smallholders on the fringe of the site or owners of land under which mining is taking place. The liabilities about which I speak exclude subsidence. I believe that that is largely satisfactorily dealt with in the Bill. They exclude the escape of polluted minewater which has been admirably dealt with by the noble Lord, Lord Crickhowell, and the liability for industrial disease. I am told that that is covered by the industrial diseases legislation of 1978.
There are significant other liabilities and, still worse, potential liabilities: the possibility of the escape of methane gas, surface flood water, the collapse of tips, slipping on to neighbouring land, as happened at Aberfan, and blown dust. I know a case of that in the Kent coalfield where I live and where an adjoining farmer had a successful claim against the Coal Board for over £1 million. Above all, there is contamination and pollution. That is an uncertain liability. The Government have accepted the principle that the polluter pays; the European Community is fighting for the principle that strict liability should be involved in certain situations relating to contamination. The Green movement and the Community itself keep moving the goal posts, they keep inventing new forms of pollution and setting stricter control levels, so that none of us can ever know when we will be hit.
Are the Government asking Parliament to give carte blanche to the Secretary of State or the Coal Authority

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to transfer those liabilities to operators with much less broad shoulders than British Coal and who could, either intentionally or by accident, turn out to be men of straw? Thus the landowner or the neighbour would have to shoulder the liability. We are talking of liabilities which can run into millions of pounds.
In commercial practice, the owner of a piece of land which is leased to an operator normally does not have to transfer that lease except to another acceptable operator. However, in this case the Government are waving a magic wand and saying, "It has got to be transferred to whomever we tell you to transfer it". That may be a totally unacceptable operator.
There are two questions that I wish to ask the noble Lord. First, he said earlier in the debate that the Coal Authority would be the owner of the mine. I have not been able to find that in the Bill, I have not found a clause which says that. In fact, Clause 12(2) provides for the Secretary of State to dispose of British Coal operations to persons other than the Coal Authority, prior to the restructuring date.
My second question is this. The noble Lord said that any mine anywhere, if abandoned, becomes the responsibility of the Coal Authority. I should be more than grateful if he could tell me how the Bill provides for that. To me, Clause 3 seems to say exactly the opposite. It says that the Coal Authority must sell land not used for mining operations.
Finally, I have a question for the Minister from the noble Lord, Lord Stanley of Alderley: if a bill demanding money comes to him for pollution on or under his land, and if the successor body which holds the licence to operate that land turns out to be a man of straw, to whom should he send the bill?
Lord Renton: I am enthusiastically in favour of de-nationalisation, but one must concede that when we had one coal board, the entire legal situation was simplified over the country as a whole. When we have the possibility of a number of new companies coming in, sometimes on land below which the coal has not been exploited before or has been only partly exploited, we have a new situation which should, from the legal point of view, be properly covered, as the noble Lord, Lord Northbourne said, with justice to the owners of the land. Undoubtedly, unless we are careful, problems could arise. The noble Lord mentioned some of them. Perhaps I may say in passing that I have no interest to declare. I am a native of west Kent, under which, so far as is known, there is no coal. But we realise that in east Kent, where the noble Lord, Lord Northbourne, owns and farms land, the situation is one which requires careful thought.
The problems of subsidence, contamination and pollution, to which the noble Lord, Lord Northbourne, referred, and the potential liabilities of third parties—it may be two third parties—that could arise are matters that we should not leave to chance. They are matters that we should try to anticipate. Any legal problems that might arise should be treated in such a way as to avoid unnecessary resort to the courts and without taking the risk of hardship to the landowner or anyone else. It is a
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very good thing, if I may say so, that the noble Lord has raised these matters even at this late hour and with so few noble Lords present in Committee.
Lord Morris of Castle Morris: As I understand it, fleetingly and tangentially, this amendment has as its purpose to highlight the duty to insert clauses to provide adequate financial protection for those who may be disadvantaged by the operation of private sector mining companies on land with inadequate provision in existing working right agreements.
The Minister said that there are about 200 WRAs, some of which are near the end of the periods for which British Coal will retain responsibility. Others are in active use or awaiting the start of operations.
Without making specific provision in the agreements, which were signed with British Coal as a government-backed company, the owners of that land will be exposed to the risks of severe financial loss and dereliction as a result of the working. Without express provisions in the agreement, the owners, so far as I can make it out, will have inadequate, if indeed any, legal redress. In transferring the rights, the Government surely must protect the interests of those who are affected.
That raises a linked point, to which the noble Lord, Lord Northbourne, drew attention. If I am correct—and the Minister will correct me if I am not—in his first speech the Minister stressed the role of Clause 7(3), which is to ensure that all the coal and coal mines pass to the Coal Authority on the restructuring date. In his reply to Amendment No. 37, the Minister said that where a mine is abandoned the responsibility automatically reverts to the Coal Authority. Surely these assurances are only true if Clause 12(2) does not allow the Secretary of State to transfer interests in coal or other interests in property from the corporation to other companies before the restructuring date. If, as drafted, he can transfer coal, mines or other assets, then surely the Coal Authority has no role.
Lord Crickhowell: I had not looked very closely at these clauses almost until I came into the House. But a number of issues have been raised which need clarification. It is again a question of whether the liabilities are to be transferred to less broad shoulders than those of British Coal. In that sense they are the same issues that we discussed earlier in the day.
Under Clause 3, it is,
"the duty of the Authority, so far as practicable, to make available for acquisition by others such of its land and other property as does not consist in an interest in any unworked coal or coal mine [and] is not being put to a use which justifies its retention by the Authority"
and so on. In other words, as I understand the matter, it is a duty to get rid of land which is no longer required for coal mining.
The trouble about land that is no longer required for coal mining is that it may have become heavily contaminated and polluted in the past. I have some knowledge of the work of derelict land clearance because, as Secretary of State for Wales, I was. responsible for what I suppose was the largest programme of its kind carried on anywhere in Europe. I know that the original intention was to remove the tips

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which might, as at Aberfan, cause a tragic loss of life and to clean up the land to make it more suitable for development. In those early stages not a great deal of attention was paid to making sure that no contamination was left. Very often the sites were extremely complicated.
After I ceased to be a Minister, it happened that I found myself for a time a director of a company which was responsible for preparing the site at Ebbw Vale where the garden festival was held. It was a steelworks site and not a coal mine. The usual investigatory drilling was done. But it was only when people got to work that it was discovered that in fact there were about three or four (it may even have been five) successive steelworks, one on top of the other, which had just been flattened and sorted out, and that what was there was an unknown mess of unbelievable complexity.
To give another example, I could take Members of this Committee to contaminated land sites where refuse has been disposed of which contained material such as PCBs. Ownership has passed on, perhaps several times, to someone who was not responsible for putting the contamination there in the first place and who may be without any resources that would enable him to remove it, clear up the site or pay for any damage that might arise.
In replying to the debate my noble friend may say that it is the problem of contaminated land that is also being addressed in the great review that the Government are undertaking; it goes beyond coal mining. I shall understand that, because these are complicated and difficult issues. But we want to be clear that there are many sites where there is or may be contamination and where there may be risks to third parties of the kind described by the noble Lord, Lord Northbourne, and where the shoulders of those who acquire them may not be anything like as broad as those of British Coal. Therefore, again we need some clarification of exactly how the Government intend to protect third parties from the consequences that may arise.
10.45 p.m.
Lord Strathclyde: The noble Lord, Lord Northbourne, introduced his amendments very clearly. Certainly, the speeches of my noble friends Lord Crickhowell and Lord Renton were very helpful. My noble friend Lord Renton said that we had to be clear about where the liabilities are. I think that he said that we must not leave it to chance. I entirely agree with him.
I believe that all the concerns that have been raised are dealt with either in the Bill or by the assurances that I gave earlier this afternoon vis-à-vis the water liabilities. What is not dealt with perhaps quite so easily, but if we are in favour of the Bill what I believe we have to accept, is the concept of the broad shoulders of British Coal. Because British Coal is owned by the Government, ultimately the taxpayer is a long stop. Where the operator is a private company, the long stop is not quite so obvious. But within the terms of the Bill the Coal Authority has to be absolutely certain that the
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operators who will take over are financially viable and that they have the necessary finances to be able to deal with the problems.
Rather than ramble on, perhaps I may deal with the issues specifically. The Bill provides the Secretary of State with powers to transfer the property, rights and liabilities of British Coal to other persons by the restructuring scheme. Such powers are common in privatisation legislation. My noble friend mentioned the steel works. Of course, we privatised steel successfully, the private sector experiencing no problems in taking over substantial potential environmental liabilities and the arguments in relation to contaminated land are as serious and relevant to the steel industry as they are to the coal industry.
One of the uses which will be made of those powers will be to transfer British Coal's interests in contracts of various sorts to successor companies. It is inherent in this, as in any privatisation, that some obligations which were obligations of the public sector, and therefore ultimately the taxpayer, become obligations of the private sector.
The agreements, known as "working rights agreements", between landowners and British Coal, under which British Coal could come onto the land to extract coal for a period, come into that category. The amendments are all concerned with the transfer of working rights agreements. Their theme is that those agreements are a special class and should have a special treatment rather than that of the general transfer provisions of the Bill as proposed.
The amendments seek to ensure that where British Coal's working rights agreements with landowners are transferred by the scheme to successors, security provisions should be inserted into the agreements to guarantee the various payments due to the landowner under the agreements. However, I do not believe that the amendment would achieve the intended result because the Coal Authority has no general power to dispose of its rights and liabilities by means of a scheme. If an agreement had been transferred to the Coal Authority the liabilities under the agreement could not be transferred on by the authority save by agreement.
I do not accept that working rights agreements should be afforded special treatment. British Coal has all kinds of agreements which will be transferred. As I have said, that is the nature of privatisation. Of course there will be many cases where the other party may feel that he would prefer to be dealing with a public sector body. That is not unnatural. But it does not follow from that, that the agreements should be revised or excluded from transfer altogether. However, the Government recognise the concern of landowners and others about the persons to whom agreements will be transferred. I assure the Committee that we shall take that into account in exercising the restructuring powers in the Bill.
I appreciate that those to whom obligations may be owed by the operators will have understandable concerns about their financial standing. That is one reason why the Bill places a duty on the Coal Authority at Clause 2(1) (b) to secure, so far as practicable, that operators are able to finance the liabilities arising from their operations. That provides reasonable assurance for

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third parties that the private mining companies licensed by the Coal Authority will be of appropriate financial standing.
There is no reason to think that private sector coal companies will not honour their obligations under those agreements. They will be contractually bound in exactly the same way as British Coal. Moreover, since operators will be rightly concerned that failure to honour obligations of this sort could affect their future licence applications, not to mention their success in negotiating agreements with other landowners in future, they will have every incentive to perform.
There is every reason to expect that the private sector will wish to maintain existing high standards. Since the future of any opencast mining business depends on being able to persuade local mineral planning authorities and public inquiries of the high standards to which opencast sites will be restored, there is every reason to expect continuing improvements in restoration quality. Furthermore, operators will be rightly concerned that failure to restore could work against the success of future licence applications.
I hope that that is helpful and provides some comfort to the noble Lord, Lord Northbourne. In reply to the various questions he asked, I must say that in relation to licence and freehold I will write to the noble Lord. I am afraid that we do not have that information to hand. In reply to my noble friend. Lord Stanley through the noble Lord., Lord Northbourne, who asked whether site restoration constituted coal mining operations for the purposes of the Bill, I can say that coal mining operations as defined in Clause 63 do not include site restoration; for example, that can be seen in Clause 53(1) (a) and (b) of the Bill. That is not to say that the Bill does not regulate site restoration. It does, and it does so in Clause 54.
The noble Lord asked two other important questions. What happens to abandoned mines? Are they owned by the Coal Authority? Underlying the whole essence of the Bill is this premise. Clause 7(3) explains quite clearly and categorically—I suspect my noble friend Lord Renton will tell me that it does not do what I think it does, but I am assured that it does—that the mines are transferred to the Coal Authority. That covers all mines whether abandoned or otherwise. Under the licensing arrangements the Coal Authority does not give up ownership of the mines. They still belong to the Coal Authority and ultimately their whole use falls back within it.
I know that the hour is late. Like my noble friend Lord Crickhowell, I think it is very worth while exploring these issues. My intention this evening was to give comfort to the noble Lord, Lord Northbourne. I hope that I have done so.
Lord Northbourne: While I am very grateful to the noble Lord, I cannot say that he has given me much comfort. Of course we are asking for these agreements to be treated as a special class because they are a special class. When Parliament uses its authority to make transfers of commercial agreements and to force them through against the will of one of the parties, that is a special situation. However, I should like to have the
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opportunity—I am sure that the noble Lord, Lord Stanley, would also like to—perhaps to meet and talk about this between now and the next stage of the Bill. On that understanding, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 21 not moved.]
Clause 3 agreed to.
Clause 4 [Duty of the Authority with respect to safety]:
[Amendment No. 22 not moved.]
Baroness Lockwood Baroness Lockwood moved Amendment No. 23:
Page 4, line 29, at end insert:

("( ) to ensure that training programmes are maintained and training records kept.").

The noble Baroness said: As far as I can see, there is no mention of training requirements in the Bill. My amendment is intended to place on the Coal Authority the responsibility of ensuring that the current training programmes are maintained and that training records continue to be kept.
Earlier in the debate the Minister talked about the need to retain the health and safety culture in the mining industry. Training is an essential element of health and safety. If we are to maintain health and safety standards, we need also to maintain the training standards and the training culture of the industry. We were reminded earlier in the debate of the situation pre-nationalisation when safety was not such a high priority in the industry. The noble Lord, Lord Ezra, claimed for the nationalised coal industry the fact that it had given a very high priority to safety issues. He might also have claimed that the nationalised coal industry gave a very high priority and a high profile to training, too. We must not allow the situation to deteriorate when the mines are privatised.
The present training schemes under British Coal are carefully constructed and, among other standards, they conform to health and safety requirements. They cover a wide range of areas in all disciplines and take account of new legislation, where appropriate, new government initiatives and national standards, including achieving economies of scale, which I should have thought would appeal to the Government. The training schemes are responsible for ensuring accreditation with external bodies such as the Mining Qualifications Board, the National Council for Vocational Qualifications and the Health and Safety Executive. They provide advice and direction and, where necessary, train the trainers. They maintain a close relationship with the universities and colleges of higher education which set the academic qualifications required for statutory certificates of competency at all levels. They provide a cost effective centre for the administration of assessments for national vocational qualifications, the City and Guilds mine environment certificates and the engineering craft apprenticeship scheme.
These programmes are far too valuable to be allowed to disappear. At present I understand that the private mining companies rely on British Coal for their supply of trained personnel. Under this Bill each company will be responsible for its own training provisions. The noble Lord, Lord Haslam, said in an earlier debate, when

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speaking of his own experience of industry, that it was easy to cut corners. Regrettably, training has been one of the areas where British industry has cut corners. In the past our training record has not compared favourably with that of other countries. But there have been honourable exceptions and the coal industry has been one of them.
As I see the situation at present under the Bill, there are two dangers. The first is that the present training schemes could easily become fragmented if each company had to be responsible for its own provisions and standards. Secondly, the trainers themselves could be dispersed and less easily available for training purposes.
Under Clause 4 of the Bill we are concerned with the responsibilities of the Coal Authority in respect of health and safety. Under this clause we need also to place specifically on the Coal Authority the responsibility for ensuring that a comprehensive and adequate national training scheme continues to be in place. I beg to move.
11 p.m.
Baroness Turner of Camden: I rise to support the amendment so ably moved by my noble friend. She is absolutely right. This is also a health and safety issue. As we all know, in the coal industry there is continuous hazardous operation. Quite obviously, if properly trained personnel are lacking, the hazards will be that much greater. I am advised that there have been accidents, including fatal ones, where training, or lack of training, has been involved. As my noble friend rightly says, there are already training programmes operated within the United Kingdom coal mining industry of consistent quality and very high standards. I have in my hand here the British Coal scheme of training for working in long wall faces and narrow workings. It is very comprehensive. It is a scheme which has been approved by the Health and Safety Executive. It is standards-based training. There is training, supervision and assessment, selection, operative training, foundation training and the scheme provides for certification as well. It is obviously a very comprehensive scheme. One has to ask: will the new operators, the successor companies, be capable of operating such arrangements unless overall responsibility is vested in the Coal Authority?
As I said earlier, this is a health and safety question. In other industries in which there is a high level of hazard, the Government have been willing to accept that special arrangements have to be made. I am thinking particularly of the construction industry, which also has a high accident rate because hazardous operations are involved, and in which the Construction Industry Training Board has been permitted to continue despite the Government's attitude to industry training boards in other sectors.
I therefore hope that we shall have a sympathetic response from the Minister. As my noble friend rightly says, there is no reference in the Bill, so far as we can see, to the necessity of maintaining training programmes. Of course, it is important that training records are
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kept, otherwise there could be cases of untrained personnel operating in mines, particularly on private contracts. This is a very important issue and I hope that the Minister will respond sympathetically. I support the amendment.
Earl Bathurst: I beg my noble friend, if he will be so kind, to consider carefully what the noble Baroness has said. I am involved in a dangerous industry, forestry, and I know that mining is much more dangerous but it has, I believe, an unparalleled safety record, given the number of people involved. It will be a tragedy if, whatever else the Bill does, it denigrates the safety arrangements that have been made by the Coal Board over a number of years. I hope the Minister will give an assurance that the Bill will not damage that record.
Lord Strathclyde: Of course I can give that assurance. My noble friend is absolutely right in saying how important this issue is. Perhaps I may draw a parallel with the industry in which he is a great expert, the forestry industry, which deals with complicated and dangerous machinery and in which he personally has a responsibility to his workers under law. If the law is broken and if he does not provide the right training or qualifications, he can be prosecuted. It is under exactly the same regime that we want the coal industry to perform. As I said on Second Reading, there are no concessions on the issue of safety or the importance of training. What is important is where it is done and who is responsible for it, and it is with that that I wish to deal.
In its report to the Government, the Health and Safety Commission stressed the importance of training and recognised the value of British Coal's computerised database of contractors and of the training records of employees of contractors. The commission has also suggested that the safety-related training material produced by British Coal's Learning Resource Unit should continue to be available to new owners.
Having said that, it is important to note that the commission also stressed that there is already an extensive framework of legislation relating to training and instruction. On this basis, the commission advised that it is for employers to decide on the precise methods, in their particular circumstances, of identifying and meeting their particular training requirements.
British Coal is managing the arrangements for the sale of the ancillary parts of its current business and is considering the options for the future of, among others, the management of training records and material. The corporation is fully aware of the advice which the Health and Safety Commission has given to the Government and shares the Government's determination that safety should be the first priority.
The corporation has assured my department that its proposals will be fully consistent with the commission's advice. That provides substantial reassurance on the concerns underlying this amendment. I welcome the opportunity to give those reassurances and hope that the noble Baroness will withdraw her amendment.
Baroness Lockwood: I thank my noble friend and the noble Earl for their support. I also thank the Minister for stating that he regards this issue as a very important

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one and that the advice of the Health and Safety Commission has been sought. However, I was not very reassured when the Minister said that, although he hoped that there will be extensive provisions, it will be for each employer to decide on the precise methods of training. That is one of the difficulties that we face under the Bill. If it is for each employer to determine what methods of training he will follow, then there will be no national standards, and that is something that has been an essential part of the training of British Coal.
I am not terribly satisfied with what the Minister said, although I must say that he spoke at such great speed that it was sometimes difficult to keep pace with him. I shall look at what he has said, but I must warn him that I do not feel particularly satisfied and I am sure that we shall be back on this issue. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 24:
After Clause 4, insert the following new clause:
("Duty of the Authority with respect to other functions of the Corporation
.—(1) It shall be the duty of the Authority to ensure the continuation of functions previously carried out by the Corporation but not conferred on any other person.
(2) In particular, the Authority shall ensure the continuation of—

(a) a Mines Medical Service including an occupational health service;

(b) consultation on and drafting of codes of practice; and

(c) educational bursaries.").

The noble Lord said: The purpose of this amendment is to place an obligation on the Government to maintain existing medical and other services currently provided by British Coal. Medicine, medical services and medical research do not stand still. New methods of treatment constantly emerge, and the mining industry deserves richly in this respect not to be left behind. So this amendment recognises the need for specialised research and on-going specialised medical services for the mining industry.
The service currently provided covers a wide area, from a network of area medical officers, through consultations with employees on occupational health, right through to X-ray schemes. That medical service is part of British Coal's operations. It has played a major part in reducing levels of occupational disease and injury, particularly in the field of pneumoconiosis. It provides advice to miners and to management, and it conducts at the same time on-going specialist research. The special hazards faced by miners require a specialist service. This will not be provided by private operators unless they are forced to do so - it is not necessarily in their interests to do so—or it could be provided by Government. In this instance, if perhaps in few others, we on these Benches would prefer to trust the Government.
If the Government are serious about their intentions to retain the longest possible deep-mined coal industry, then an industrial medical service with dedicated skills and a service record that has served the greater social good surely must be retained. Due to the technical complexities of coal mining and the extent of the
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statutory conditions which have regulated the industry throughout this century, the coal industry in the United Kingdom has developed considerable proficiency in consultation and in the drafting of codes of practice; and that too should not be abandoned.
With nationalisation, the National Coal Board, as it then was, and since 1986 British. Coal, was the custodian of such procedures. With its passing, the Coal Industry Bill does not inform us where any such duties will lie, and we should like to know. If the industry is to avoid the market anarchy and the deep-rooted social bitterness of the pre-nationalisation era, civilised procedures to obtain mutual agreement through consultative procedures must be preserved. So we regard it as essential that the proposed Coal Authority should be given the statutory means by which private coal operators are required jointly to undertake consultative duties and contribute to codes of practice that ensure the continuation of the highest standards.
On the question of educational bursaries and in-service scholarships, until now British Coal has been able to replicate its managerial and technical expertise through the funding of bursaries and in-service scholarships. The result, I think I can say, has been the most technically concentrated and safest coal industry in the world. It has also contributed to Britain having the most economic and the only unsubsidised deep-mine industry in Europe.
Another outcome until recently was an extremely high standard of union branch officials who, through attending part-time courses in economic industrial relations and safety, have also been able to make a major contribution to the professionalism of the industry's managerial environment. So it is important that for the future of the industry, if it is to survive, a climate of trust based on the continued pursuit of technical, managerial and operational excellence is actively encouraged. This amendment would provide for it. Nothing else in the Bill would. I beg to move.
11.15 p.m.
Lord Ezra: I support the amendment moved by the noble Lord, Lord Morris of Castle Morris. I wish in particular to refer to the Mines Medical Service, which was established over many years. As the noble Lord rightly said, it made remarkable and indeed world shattering progress in particular with regard to the dreaded disease, pneumoconiosis. It led the way. I remember visits from our American mining colleagues who were most concerned about what they called "black lung disease". They came to us to find out how we dealt with it. It could only have been dealt with on the basis of a concerted, integrated Mines Medical Service, supported by an occupational medical centre.
It is of great social importance to the industry that an integrated medical service, with its accumulated knowledge of dealing with mining diseases and problems, should be preserved one way or another. I look forward to hearing what the Minister has to say.
Earl Bathurst: We have a thin Committee this evening. After listening to an expert such as the noble Lord, Lord Ezra, I rise to support what was said by the

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noble Lord, Lord Morris, who is also an expert. I am not an expert but I know that many people in the mining counties have suffered terribly from mining subsidence and other troubles as a result of mining operations. I hope that my noble friend the Minister will see to it that the Bill will ensure that they will not be disadvantaged by its progress. I hope that the Government will take into consideration all that was said by the noble Lord, Lord Morris. We are a thin Committee, but many people throughout the country, not only in mining areas, are most interested in this difficult problem which arose long ago.
Viscount Goschen: The intention of the Bill is that the Coal Authority's prime focus should be on facilitating coal mining operations. The Coal Authority would take over British Coal's interests in unworked coal and coal mines as well as other land and property. The authority would therefore also take over British Coal's responsibility for dealing with landslips, water discharges, gas emissions and the like arising out of ownership of that property. We believe that it would therefore be inappropriate to pass on other functions of British Coal to the Coal Authority other than those that I have mentioned.
The amendment draws attention to three particular areas where British Coal currently plays a role. The Health and Safety Commission has advised that there is already a sufficient framework of law requiring employers to carry out all necessary health surveillance and to maintain the necessary medical records. The commission's advice was that it must be for employers to determine how they meet established standards and who they choose to carry out medical examinations.
I can reassure the noble Lord, Lord Morris, and my noble friend that the Government have nevertheless noted the commission's view that British Coal's medical service provides a valuable centre of expertise and that employers in the privatised industry may well wish to continue to have the opportunity to purchase its services.
British Coal is managing the arrangements for the sale of the ancillary parts of its current business and is considering the options for the future of, among others, the medical service. The corporation is fully aware of the advice which the Health and Safety Commission has given to the Government and shares the Government's determination that safety should be the first priority. The corporation has assured my department that its proposals will be fully consistent with the commission's advice.
On codes of practice, British Coal and the Health and Safety Executive are working to codify the great majority of existing British Coal safety codes, rules and instructions which will not otherwise be given legal status. That work is almost complete, and when it is, the material will be issued to the privatised industry by the Health and Safety Executive as formal industry guidance.
With regard to the point raised by the noble Lord, Lord Morris, about educational bursaries, British Coal has provided funds to enable selected school leavers and
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employees to attend college and university courses which have a bearing on the coal industry; for example, mining engineering and business management. In the past, that has ensured that sufficient numbers of suitably qualified people were available for employment by British Coal.
In future it will be the responsibility of the successor companies to gauge the numbers of those within the labour market who are suitably qualified or are likely to become so. It will then be for them to determine the further education needs of their prospective and existing employees and to fund them accordingly.
In the light of that explanation, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Morris of Castle Morris: I have heard what the noble Viscount has said and I do not much like it. I do not believe that it would be inappropriate to maintain the standards of the Mines Medical Service. I believe that it would be extremely appropriate for the Government to do just that, and not to kick it into the air and hope that there will be somebody underneath to catch it.
I am not reassured that the Government have taken note of the excellence of the service. I have taken note of the time, but that will not stop or accelerate the clock. The Government's response to this amendment is, in my view, distinctly unhelpful. We shall return to it at a later stage when I hope that they may be in a more giving mood. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 25 not moved.]
Clause 5 [General powers of the Authority]:
[Amendments Nos. 26 to 29 not moved.]
Clause 5 agreed to.
Clause 6 agreed to.
Clause 7 [Exploitation rights: general]:
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 30:
Page 6, line 42, leave out (" and (c)").
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 31. The object of the amendments is to defer the lifting of the 250,000 tonne opencast ceiling until the restructuring date. I say again that it is to postpone the lifting of that ceiling and not to do away with it altogether.
In our view, it is important to defer until the restructuring date in order to avoid an unholy rush of opencast licence applications which would have to be dealt with by British Coal. British Coal remains the licensing authority until the restructuring date, when the Coal Authority takes on that role.
British Coal has already made substantial cuts in its staff and cannot really be expected to be in a position to deal with a flood of applications so close to its own winding-up time. There is also the question of whether British Coal would be able to maintain its standards of scrutiny, given the likely number of applications and the much-reduced workforce near the end of its employment.
That anxiety was put forward with some force and power in Committee in another place and, if I have read the record correctly, it was not then addressed in the Minister' s response.
From recent statements it appears that the Minister plans to have the coal industry under private operation "more or less", "give or take a few days here or there" and "taking one thing with another" by the end of the year. That suggests that the transfer of responsibilities from British Coal to the Coal Authority will take place very quickly. At the most, we are looking at a few months. Therefore, there is no threat that the amendments will hold up the issuing of licences to opencast operators by any substantial time.
The thrust of the Minister's response in Committee in another place was that Article 4(b) of the European Coal and Steel Community Treaty forbids measures that discriminate against producers, and that these amendments would prejudice opencast operators. Well, we were not convinced about that. Article 4(b) refers to,
"measures or practices which discriminate between producers, between purchasers or between consumers, especially in prices and delivery terms or the purchaser's free choice of supplier".
I do not see that the proposed 250,000-tonne limit falls within the special terms highlighted by Article 4(b), and so it cannot be regarded as an issue of particular concern within the treaty.
Using the Minister's argument regarding the ECSC, Amendments Nos. 30 and 31 propose to bring the UK into line with its treaty obligations. Since 1973, when it joined the European Community, the UK has been discriminating against its private operators by imposing limits on production and the numbers of men working in private pits. Bearing in mind the pressures on British Coal and the likely rush of applications, the amendments would serve only to,
"promote the orderly expansion and modernisation of production"
as specified in Article 3(g) of the ECSC Treaty. I am trying to be helpful and, at the same time, a good European. It seems unnecessary to push ahead lifting this ceiling when the licensing authority may not be able to deal with the applications thoroughly and when there is much more to be gained by having the new conditions applying from the restructuring date under the control of the Coal Authority. It is much tidier. I beg to move.
Lord Strathclyde: I must say that I find myself increasing surprised by the noble Lord, Lord Morris of Castle Morris, because what Clause 7(1) does is to reflect the commitment made in the Government's coal review White Paper to bring an end to British Coal's effective monopoly. At present, British Coal is able to license private sector coal producers only at collieries which employ fewer than 150 men underground or at opencast sites where the total output of the site will be less than 250,000 tonnes.
British Coal has over the past year adopted a policy of offering to the private sector those pits it no longer wishes to operate. Five collieries have already passed to new owners in the private sector. Detailed negotiations continue over the lease and licence of four more collieries.
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With the rapidly changing structure of the coal mining industry in the run-up to privatisation, it is important that private sector mining operators are given the same opportunities as British Coal. That should include allowing the private sector to benefit from economies of scale. The purpose behind the amendment is to postpone opencast mining but all it achieves is to prolong British Coal's effective monopoly in large-scale opencast coal mining until the Coal Authority can be established.
The Government support a competitive market for fuel in the UK. Competition between deep-mined and opencast coal must, to some extent at any rate, be good for the industry. Competition between producers within those sectors is also potentially beneficial. It is for that reason that the Government made the commitment in the coal review to remove the restrictions on British Coal powers to license private sector producers under the Coal Industry Nationalisation Act 1946.
What the noble Lord proposes is a blatantly discriminatory measure which would allow private sector deep-mine operators to compete on an equal footing with British Coal and yet deny private sector opencast operators such opportunities. It is blatantly discriminatory. I do not believe that the noble Lord has made a case for it. I hope therefore that he will withdraw the amendment.
11.30 p.m.
Lord Morris of Castle Morris: I find myself less and less surprised by the Minister's replies to our amendments. He seems wedded indissolubly to the grinding processes of this Bill, even when we point out the disadvantages to him. I thought that we were being helpful with this amendment. We were not causing difficulties. We were trying to ease the progress through time of this wretched process that he is concerned to bring about. What we were suggesting would have eased the considerable problems which will accrue to British Coal in this particular period. If he wants British Coal to have it the hard way, then so be it.
We shall read what the Minister had to say and may very well come back to the issue in defence of British Coal, not all of whose activities we have been the highest praisers of. In this case we felt that there was something that could be done for it usefully. I am only sorry that the Minister does not agree. At this late hour, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 31 not moved.]
Clause 7 agreed to.
Clause 8 agreed to.
Clause 9 [Exploitation rights: oil and gas]:
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 32:
Page 8, line 32, at end insert ("except that the Authority shall not have power to require any fee to be paid in addition to the sums payable under the Petroleum (Production) Act 1934.").
The noble Lord said: I wonder how the Minister and the Government feel about coal bed methane, because that is what this amendment is really about. Coal bed methane may very well become a very significant

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energy source. It was referred to earlier today. It is not a subject which the nation as a whole knows very much about because the whole industry is new.
The coal bed methane industry is currently licensed by the oil and gas division of the DTI, to which the industry pays a significant fee. Due to the low profit margins in the industry, the operators will find it very difficult indeed to sustain any additional fees. As I said, the industry is new; it is speculative. So, to secure long-term investment in coal bed methane extraction, the Government must assure the industry that it will not be subject to any additional potentially prohibitive expenses in the form of additional licence fees required by the Coal Authority.
It is in the interests of the Government, surely, to ensure that they do not cause the premature death of an emerging industry through what I could only describe as over-regulation and excessive financial levies. The right climate must be established to ensure the development of this additional means of exploiting the nation's coal reserves, which incidentally can be done without endangering the lives of anything like so many people as the old deep-mining business used to do. I beg to move.
Viscount Torrington: I should have thought that the amendment belongs more appropriately at the end of line 9 on page 9. I have sympathy with the amendment. I have already spoken on the subject of coal bed methane. My noble friend made it clear that the operator of any well drilled to extract gas from a coal seam, whether it is one inch thick and wherever it is, would have to deal with the authority.
The Bill states that the authority shall be entitled to grant such rights. That has the negative consequence that it need not necessarily grant rights. I seek from my noble friend an assurance that that entitlement will be used more from a safety point of view, because it is important that there should be liaison between the gas industry and the coal industry to make sure that someone does not drill into an existing coal working or, equally, that someone does not try to mine through a gas well underground. There is concern on the part of the industry that, as the noble Lord, Lord Morris, said, this will be used as a revenue-raising tool. I should like an assurance that that will not be the case.
Viscount Goschen: The Government attach great importance to the successful development of the coal bed methane industry. That is why Clause 9 of the Bill makes the position clear about the ownership of the methane in coal seams and Clause 3 gives the Coal Authority specific duties in respect of the development of the coal bed methane industry.
The purpose of the amendment appears to be to prevent the Coal Authority from charging coal bed methane companies holding petroleum licences any fees for granting access to the coal seams. However, Clause 9 is concerned with the ownership of the methane, which it makes clear will not vest in the Coal Authority.
I believe that I can give the noble Lord, Lord Morris, the reassurance that he seeks from the Government. The Government accept the concern of the coal bed methane companies on this issue. We, too, believe that the
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industry should be subject to only one rental charge by the public sector for extracting coal bed methane and that the charge should be made under the petroleum licensing regime.
We have therefore made the Coal Authority's general duty to obtain the best value for its assets under Clause 3(4) subject to its duty in respect of the coal bed methane industry in Clause 3(6) of the Bill. Under that subsection the arrangements and principles adopted by the Coal Authority towards holders of petroleum licences must be approved by the Secretary of State.
In line with this approach, I can assure the Committee that the Government do not intend to approve any arrangements which involve the Coal Authority charging a rental for access to the coal.
I hope that the Committee will nevertheless agree that it would be wrong for the Coal Authority not to be able to charge any fees for dealing with the coal bed methane industry. As is common practice for non-departmental public bodies, the Coal Authority will seek to recover the full administrative costs of its licensing functions, including the granting of rights of access to coal bed methane operators. I am sure that the Committee will agree that this cost, which should by its nature be modest, should be met by the industry rather than by the taxpayer.
Under the framework provided by the Bill, we intend that the authority should work closely with the Department of Trade and Industry to ensure the effective development of the coal bed methane industry. We fully recognise the importance to that industry of not being asked to pay twice for the same activity. In the light of the reassurance that I have given on that point, I hope that the noble Lord will be happier and will feel able to withdraw his amendment in a contented fashion.
Lord Morris of Castle Morris: Is the noble Viscount aware that he has made my day? I am grateful to him for his reply. There is light at the end of the tunnel. The Government's heart is not made totally and utterly of stone. They are prepared to move just occasionally in tiny movements in forward directions. I thank the noble Viscount for his reply and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 agreed to.
Clause 10 agreed to.
Clause 11 [Restructuring of the Corporation's functions]:
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 33:
Page 10, line 38, leave out from ("as") to ("is") in line 39.
The noble Lord said: I shall be brief because I shall be unable to be terribly brief about a later amendment.
In the amendment I ask the Government to delete the words,
"having regard to what is economically viable, it considers".
The purpose of the amendment is to exclude the notion of economic viability. I wish to do so with a probing amendment to find out whose definition of economically viable the Government are accepting, how long term it is and what consultation they have gone through in order to arrive at it. I beg to move.
Lord Strathclyde: The noble Lord was quick in his introduction; I understand why. I hope that I can give him some satisfaction.
Following the enactment of the Bill, British Coal's main objective must be the transfer of its undertaking and property out of its ownership and control. The Bill must give British Coal the powers necessary to bring this about, but it must also put in place certain safeguards to ensure that the corporation runs its affairs in an economically responsible way.
Subsection (1) of Clause 11 amends the functions of British Coal on and after the restructuring date. It provides for British Coal to carry on its undertaking and to manage and deal with its property in the way that it considers is best calculated to further certain specific purposes. These purposes are consistent with privatisation and relate to the use and transfer of the corporation's property.
I have already explained at length the Government's objectives, so I shall not go over that again. But it is worth remembering that there are important public finance questions here. Since 1979 the Government have put nearly £20 billion into the coal industry. While it remains in the public sector, it will continue to be a drain on the public purse. I think that the taxpayer has a right to expect British Coal to run its affairs in an economically viable way.
British Coal will continue to operate at arm's length from the Government, but Ministers are accountable to Parliament for the conduct and success of privatisation. The Secretary of State needs to be in a position to ensure that he can discharge this responsibility properly. To do so, he needs to be able to exercise control over those aspects of the corporation's affairs which affect the proceeds arising from privatisation and the use of public funds.
The second amendment removes the obligation on British Coal to accept the opinion of the Secretary of State as to the economic viability of any matter relating to the conduct of the continuing business. Of course, this would hinder the Secretary of State in discharging his responsibilities for the use of public funds and could hinder his wish to secure value for money.
The coal industry's best hope of a successful future lies in the private sector. The noble Lord and I disagree on that point, but I hope that at least I have given him some satisfaction in answering his amendment.
Lord Morris of Castle Morris: I disagree entirely and profoundly. I am grateful to the Minister for putting his side of the argument so clearly and concisely. He will not expect me to agree with it, but he has laid out his stall in an extremely helpful way. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 34 not moved.]
Clause 11 agreed to.
Clause 12 [Restructuring schemes in relation to property etc.]
[Amendment No. 35 not moved.]
11.45 p.m.
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 36:
Page 13, line 18, at end insert:
("() In making any scheme under this section, the Secretary of State shall have regard to those matters which constitute the purposes and duties of the Authority under this Act.").
The noble Lord said: This amendment will take a little longer because it is about justice. Its aim is to ensure that any scheme made by the Secretary of State conforms with the purposes and safeguards contained in the Act and ensures uniform and fair treatment of all persons involved in such transactions under the Act.
The Bill is careful to set out in great detail the duties of the proposed Coal Authority—even if it is only two people —the matters about which it must consider carefully what it is to do and the procedures that it must follow in granting a licence to mine coal. The authority has objectives to secure a viable coal mining industry, to see that its licensees are financially sound and to consider the interests of those who might suffer subsidence as a result of its licensees' actions. It is to ensure that its licensees are experienced and expert and that competition is promoted. The terms on which it shall dispose of its property are prescribed and it must pay regard to the environmental effects of any proposals for after-use of former mining land. All those are matters which we would wish to be considered in connection with mining licences and with disposal of substantial parcels of land which have been in public sector ownership.
It would be amusing and interesting, not to say informative if someone could inform us at some point exactly how much land the Coal Authority owns. A quarter of a million acres has been suggested; someone has likened the area to the isle of Anglesey in its extent, though not in its location nor in its beauty. But no one seems to be absolutely certain as to the extent of its land, though it can be well imaged as a parcel of land in various parts of the United Kingdom which happens to have a few holes in it. Those holes are, or were, coal mines; and part of the Coal Authority's duty is to act as a purveyor of land for a wide variety of possible purposes so long as they be consistent with planning permissions. That fact is perhaps one that has not really gone home to many of the readers of the Bill, and perhaps to many of your Lordships here tonight. But the question has to be asked: how many of these licences will be granted and how much of this land will be disposed of before the Coal Authority even sees the light of day, before it comes into existence—or at any rate, before the restructuring date?
From my reading of the Bill, Clause 12 gives the Secretary of State powers to transfer anything he likes to whomsoever he likes without paying the slightest regard to these matters.
The Government have said that they plan to offer the industry for sale in five lots, which may be bidden for jointly. One scheme put forward by the Secretary of State could, it seems to me, dispose of the entire industry without any of those duties or obligations which have been the subject of so much detailed scrutiny ever becoming relevant. The Secretary of State

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does not have to advertise any sale or disposal. The only person to whom he must give notice under Schedule 2 is someone to whom it seems likely to the Secretary of State that compensation may be payable. Although Schedule 2 sets out in considerable detail what may be included in a scheme, it is, apart from the notice provision, entirely permissive. It places no limitation on the Secretary of State's powers.
The Coal Authority can dispose only of assets not required for the mining of coal. As I see it, no such limitation is placed on the Secretary of State who can, if he wishes, dispose of the freehold ownership of coal to private interests despite the underlying philosophy of the Bill, which is to retain the freehold ownership of coal in public ownership. All this the Secretary of State may do with no scrutiny by either House of Parliament. We have become used over the years to ever more sweeping powers being acquired by the Executive. But the powers given in this clause seem to us unusually excessive by any standard.
Our amendment is probing. It is modest in its aims. It seeks only to secure that the Secretary of State shall have regard to the same objectives, the same considerations and abide by the same duties as are prescribed for the authority in the carrying out of its functions. Will that, or will that not, be the case? I beg to move.
Earl Bathurst: The noble Lord, Lord Morris, perhaps to the surprise of a very thin Chamber, mentioned the amount of land that is involved, and therefore, I presume, landowners.
I should like to make a plea to the noble Lord who is in charge of this Bill. Will he think of the numbers of people, either in respect of the land concerned, or its many other facets, who are affected by the Bill? I hope that he will see some way in which the points that the noble Lord, Lord Morris, and his friends have put forward can be met or at least not be adversely affected, as I fear they will be, by the Bill. I support the noble Lord opposite.
Lord Strathclyde: I am sure that the noble Lord, Lord Morris of Castle Morris, is delighted to have the support of my noble friend. I can, however, assure my noble friend that there is nothing untoward proposed, and indeed I can assure the noble Lord, Lord Morris, of the same thing. The noble Lord has probably got it wrong. I shall explain the matter and then we shall see whether we can agree.
Clause 26(6) is drafted in terms of the Secretary of State issuing licences in exercise of the Coal Authority's powers to grant a licence. It follows that the Secretary of State in so doing will be subject to the authority's licensing duties. That is the key aspect and it means that he cannot act in any other way.
The actions of the Coal Authority and the Secretary of State will also be equally open to challenge in the courts. When making any scheme to transfer British Coal property, rights and liabilities to the authority, the Secretary of State will have to have regard to the duties and functions of the Coal Authority. However, the Secretary of State and the Treasury, which has to give its
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consent to the making of any scheme, also have responsibility for much wider matters which will be relevant at the time that this scheme is made. Such matters include the responsibility for the use of public funds and for competition law and policy.
I am sure that the Committee will recognise that the duties of the authority have been carefully framed to address the functions which it is intended to perform. However, we should not forget that British Coal is a large organisation with a wide range of business and other interests. Restructuring schemes may, therefore, be concerned in whole or in part with matters outside the scope of the Coal Authority's functions. For example, a number of British Coal's responsibilities in relation to its past employees, such as the provision of concessionary fuel, will transfer to government by means of a restructuring scheme. The duties of the authority could not appropriately be applied in such cases.
In other cases, applying the authority's duties could, in addition, be unnecessarily restrictive. In a number of contexts my colleagues and I have indicated that we fully understand the need to take proper account of the current use of the land when disposing of the property of British Coal which would not be relevant to future coal mining operations. That included land currently used for recreational purposes by the Coal Industry Social Welfare Organisation (CISWO) and tenanted agricultural land. The restriction which could be imposed by this amendment would require the Secretary of State, when disposing of the property, to secure the best terms reasonably available.
In short, while I understand the concern to ensure that the Secretary of State acts in a manner which reflects the duties of the Coal Authority when making a restructuring scheme, the amendment is inappropriate. It would narrow the range of factors which the Secretary of State can and must take into account in reaching decisions on the transfer of British Coal's assets and liabilities.
There is nothing untoward in this provision. There is no abuse of power. I understand very well why the noble Lord should raise the issue, but I hope that I have offered him some comfort.
Lord Morris of Castle Morris: I do not feel particularly comforted. I do not feel especially reassured. I do not feel that the questions that I raised have been answered to my complete satisfaction. I do not feel that inward glow of certainty that a complete defence has been given to what we see as a very unexplained and murky area of the Bill even yet.
However, the noble Lord and I have gone at each other fairly fast. Our responses to each other have been carefully taken down and no doubt will appear tomorrow morning at our breakfast tables, when we can read them at greater leisure and slower speed. Having aired the situation across the Dispatch Boxes tonight, we have gone so far as we can go on this point. Each of us must read what the other has said, and perhaps we may be able to settle this matter outside, as it were. If not, we

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can come back into the ring and do a further three rounds. Until then I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 agreed to.
[Amendment No. 37 not moved.]
Schedule 2 agreed to.
Clauses 13 to 15 agreed to.
Schedule 3 agreed to.
Clauses 16 to 18 agreed to.
Clause 19 [concessionary coal]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 38:
Page 17, line 17, leave out subsection (1) and insert:
("(1) The Secretary of State shall, out of money provided by Parliament, ensure—

(a) that supplies of concessionary coal and payments in lieu of concessionary coal are made on and after the restructuring date in accordance with existing relevant arrangements to those persons who would have received such supplies from the Corporation if those arrangements had not been affected by steps taken in connection with the restructuring of the coal industry;

(b) that any person employed at any deep mine after the restructuring date receives concessionary fuel and cash in lieu on the same terms as under existing relevant arrangements;

(c) that the administration of concessionary coal and cash in lieu should be undertaken under the auspices of the Coal Authority; and

(d) that existing procedures for conciliation in respect of concessionary coal and cash in lieu should be retained and should include arrangements covering continuing employees and beneficiaries.")

The noble Baroness said: I rise to move, in the absence of my noble friend and with the leave of the Committee, Amendment No. 38 and also to speak to Amendment No. 39. The Government have said that all employees are entitled to concessionary coal and that payments in lieu thereof will continue. They will continue to benefit from those arrangements. But the Bill does not guarantee the continuation of those provisions. There is a belief on the part of the unions that the Government have in any event underestimated the cost, which they believe to be around £70 million. Indeed, it is said that the DTI's consultation document puts the cost at around £150 million.
The Government may claim that the existence of the TUPE '81 regulations guarantee the continuation of that entitlement. TUPE makes its appearance yet again in the context of a privatisation Bill, as it did in the recent railway legislation. However, it is by no means certain that TUPE provides the necessary guarantee. Employers will be able to get round TUPE by giving notice to alter existing contracts. Employees who transfer into private ownership, having built up an entitlement, can be protected only by forcing employers to provide fuel under the same terms as the existing agreement. Indeed, our amendment goes a hit further and says that the administration of concessionary coal and cash in lieu should be undertaken under the auspices of the Coal Authority.
The Government appear also to be planning to privatise administration of the National Concessionary Fuel Office. It is believed that that could well have an adverse effect on the level of service. The intention of
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Amendment No. 39 is to take the Treasury's sticky fingers off the allocation of funds. The whole idea is to remove Treasury control over the allocation.
I suggest to the Committee and to the Minister that these are reasonable amendments in the context of the assurances that the Government have already given in regard to concessionary coal. Certainly if something of this order were to be written on the face of the Bill it would set at rest a number of the fears expressed to us by past and present employees in the industry. I beg to move.
Lord Strathclyde: Amendment No. 38 contains a number of elements and I should like to deal with those in turn and then deal with Amendment No. 39, whose effect is to remove the requirement for Treasury consent to the making of payments in respect of concessionary fuel.
The first point is that Clause 19 provides for the Secretary of State to be able to make payments in respect of concessionary fuel out of money provided by Parliament. It does not deal with transfers of responsibility. As the Committee will be aware, we propose that responsibility for the entitlement of ex-employees and their dependants, or "beneficiaries", will be transferred to the Secretary of State. Responsibility for the entitlements of continuing employees will be transferred to successor companies.
The amendment to Clause 19(1) (a) essentially seems to be keeping the terms of existing entitlements. But that is unnecessary. The reference to "such supplies" in the clause as drafted already achieves that. Moreover, the entitlements of most beneficiaries and all current employees are derived from the concessionary fuel agreements and have been incorporated in contracts of employment. As such they are considered legally enforceable by or on behalf of the employee, ex-employee or dependant. Paragraph (b) of the amendment is therefore also unnecessary. It purports to transfer responsibility in respect of continuing employees to the Secretary of State. As I explained, that responsibility will pass to successor companies with the contracts of employment of continuing employees.
The next element of the amendment looks to involve the Coal Authority in the administration of concessionary fuel. We propose that the National Concessionary Fuel Office should continue its current work within the Pensions and Insurance Centre on the day-to-day administration of the entitlements of beneficiaries, and it will be open to successor companies to use the NCFO to administer the entitlements of British Coal employees who transfer to its employ. It is not entirely clear to me what involvement is in mind in the term "under the auspices". But I am clear that involving the Coal Authority would be at a tangent to its main role and responsibilities and would not improve anything.
The final element relates to conciliation arrangements. Again I do not think the amendment is necessary. As noted in the consultation paper, we propose, so far as beneficiaries are concerned, arrangements similar to the existing joint working parties with the trade unions as the vehicle for dealing with concessionary fuel issues. As far as continuing employees are concerned, the

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concessionary fuel agreements will remain conciliable as between the employer and employee. The precise procedures will be a matter for the employers and employees concerned.
I can understand why the noble Baroness has raised the issue. It is an important one to explain and to clarify. I hope I have done that.
Baroness Turner of Camden: I thank the Minister for that response and for the number of assurances he has given. He says that it is unnecessary to write this into the Bill. It may perhaps be unnecessary to write into the Bill an amendment of this length and possible complexity. However, I should like to read very carefully what he has said because he said it at a considerable speed. I understand why, because we are really rather late in the evening's proceedings. In fact, it is nearly the next day. However, it means that we shall have to take a little time to consider what he said and it may possibly be that, if we are not satisfied, we shall come back with a different form of wording at Report stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 39 not moved.]
Clause 19 agreed to.
Midnight
Clause 20 [Extinguishment of loans to the Corporation]:
On Question, Whether Clause 20 shall stand part of the Bill?
Lord Morris of Castle Morris: It has gone midnight and on behalf of my noble friend Lord Peston I wish to present his case, which is that this opposition to Clause 20 is essentially a question about the writing off of British Coal's debts to the nation in preparation for privatisation.
The Government's privatisation programme has already cost the nation more than £13 billion in written-off debts since 1979. This sorry story was fully related by a previous Chancellor of the Exchequer in a Written Answer of 3rd March 1992 which set out the debts written off prior to privatisation as follows: British Aerospace, £60 million; National Freight Corporation, £100 million; British Transport Docks
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Board, £81,293,616; British Telecommunications, £2,789,865,772; British Airways, £160 million; BAA, £43,503,340; British Steel, £500 million; British Steel again, for borrowing under the Iron and Steel Act 1982, £3,480 million; water holding companies, £4,973,332,672; water holding companies again, £55,013,916; Scottish electricity companies, £1,043,573,600. That is his count. It adds up to—a very large amount indeed. In my noble friend's view, it would be unfortunate therefore if the public were to incur further losses by the writing off of British Coal's debts. How much do the Government propose to write off this time?
Lord Strathclyde: I suspect that this is one of the insincere Motions of the noble Lord, Lord Peston. The clause provides that the Secretary of State may, subject to the consent of the Treasury, extinguish outstanding loans to the corporation out of money provided by Parliament. It also provides that British Coal's tax losses are not altered by the extinguishment of loans.
As the noble Lord realises, there is nothing extraordinary about this. In most privatisations we have tidied up the financial provisions. As regards debt extinguishment, at the end of British Coal's 1992–93 financial year its total debt was £1,071 million. That comprised borrowings as follows: Exchequer borrowings, £711 million; loans from the National Loans Fund, £180 million; from the European Coal and Steel Community, £110 million; and commercial borrowings, £70 million. As no doubt will be very well known by the noble Lord, it is impractical to transfer outstanding Exchequer loans to successors, so provision is made in this clause to extinguish the Exchequer debt privatisation.
As regards the specific question which the noble Lord asked me, it is too early at this stage to give him a final figure, but I certainly hope that that does not stop him agreeing that the clause should go forward.
Clause 20 agreed to.
Clause 21 agreed to.
Viscount Goschen: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at six minutes past midnight.