§ 6.23 p.m.
§ Lord Mason of Barnsley rose to ask Her Majesty's Government what plans they have for the future of British Coal Enterprise.
§ The noble Lord said: My Lords, I believe that it is the will of the whole House and of all the political parties in this House, that there should be a continuation of the activities of British Coal Enterprise. Therefore, this is not a party political issue. The House will remember the interventions made by the noble Lord, Lord Haslam, during the course of the Coal Industry Bill, and the helpful interventions from the right reverend Prelate the Bishop of Sheffield, who sent a note giving his continuing support to British Coal Enterprise. That was backed by a colleague of his, the right reverend Prelate the Bishop of Bristol, who, having worked in the Durham coalfield for some years, said, "I know the value of British Coal Enterprise".
§ Everyone who is conversant with the positive operations of BCE, especially those who reside in or even frequent coalfield communities, is aware of the splendid efforts they have made in the past 10 years to minimise the hardship in the wake of the pit closures.
§ Since British Coal Enterprise was established in 1984 it has carried out its mandate with vigour and great success. It was founded to provide practical and effective help to individuals and businesses in coalfield regions in order to stimulate job creation and economic regeneration. This organisation, which operates with the minimum of red tape and working in partnership with other like-minded organisations, has assisted in the creation of over 100,000 jobs in the past 10 years. Within that total, over 50,000 former British Coal mineworkers have been resettled into new employment.
§ In just 12 months from October 1993 to October 1994, British Coal Enterprise business loans helped to create 4,400 new jobs in 567 companies and over 14,000 miners were resettled under the Job and Career Change Scheme. It has invested more than £40 million in over 1.3 million square feet of workspace accommodation in our coalfield areas. Two-thirds of start-up businesses launched with British Coal Enterprise finance are still trading after five years, which is nearly twice the national average of start-ups. Only recently (last November) BCE launched a new enterprise fund to bridge the gap for coalfield-based companies wanting to expand. That was in response to findings by the Confederation of British Industry which revealed that small and medium-sized companies were falling into an investment trap because they could not tap reliable and accessible funding for expansion. This enterprise fund can now provide packaged finance of up to £1 million for projects that in turn will create permanent new jobs in coalfield areas.
§ I believe that British Coal Enterprise has proved to be highly successful and especially in cost-effective job creation. The Government, and particularly the Department of Trade and Industry and the Department of Employment, must surely have appreciated all the endeavours of British Coal Enterprise in job creation 1461 and in retraining programmes. Indeed, British Coal Enterprise is a major ally of these departments in the Government's regional activities. In that grand strategy it has built up a remarkably close co-operative relationship with regional government departments, with local authorities and with British Coal. In addition, it has built a marvellous bridge between British Coal Enterprise and the officials of the European Regional Development Fund—pleasingly, an excellent example of how European finance can be used in the most positive sense to aid our ailing coalfield regions.
§ So it is evident—and I emphasise this—that the regeneration of our coalfield communities is possible with the continuing aid, enterprise and specialist knowledge of the British Coal Enterprise coalfield teams. It is now a major bulwark in creating new enterprises and jobs. It is now too important and experienced as a national organisation to be kept in suspense about its longer-term future, especially as it has gained the undoubted respect of all those organisations which too are working desperately hard to bring new life and hope to our coalmining areas.
§ I believe that there will be a need for this drive for regeneration to continue for another 10 years and also at its present level. The drive by British Coal Enterprise in our coalfield communities is to establish more small and medium-sized businesses. A main reason is that collieries were located where the coal was and pit villages grew up around them. The colliery and its ancillary activities were the principal source of employment. Even today, the tradition in mining villages is mainly of working for an employer rather than being a self-employed entrepreneur. It is this particular need to continue to develop the enterprise culture and to assist in the creation of small businesses that distinguishes the high unemployment areas of the coalfields from the high unemployment areas in our large towns and cities.
§ Therefore, the role of British Coal Enterprise in stimulating economic regeneration by helping fledgeling companies is needed just as much today as when it was created 10 years ago. In this regard, BCE has assisted in the formation and growth of over 100 enterprise agencies in the coalfields, and has worked with and assisted the training and enterprise councils and now the growing networks of Business Links. I am pleased to inform the House that Barnsley was one of the first towns to have a Business Link to complement the activities of our very successful Business and Innovation Centre. Thanks to BCE investment, we now have three centres, in which there are 30 firms producing high-tech and innovative products—high-tech industries sprouting in a dying coalfield area. The TEC network and the Business Links have an enormous job to do in encouraging the growth of small and medium-sized enterprises, and BCE's 10 years of experience can assist them in their endeavours.
§ British Coal Enterprise's expertise has been recognised internationally. The Overseas Development Agency is making use of the skills that BCE has developed in identifying viable business projects. British Coal Enterprise has been contracted by the ODA to 1462 appraise bids by British businesses looking to invest in South Africa. British Coal Enterprise is also working on a prestigious project in Poland, looking to replicate BCE's experience in encouraging economic regeneration in two regions of that country.
§ Of the many suggestions that were made in the course of our debates about the future of British Coal Enterprise during the passage of the Coal Industry Bill, what comes to the fore is the idea of what might be called a "stand alone agency"—perhaps under a sponsorship umbrella provided by the Department of Trade and Industry and the Department of Employment. There is already a very good co-operative working relationship, so why not on a national scale, working with the TECs and Business Links, covering training, job creation and the launching of small businesses? Or could not BCE, which, as we recognise is a subsidiary of the British Coal Corporation, become a company limited by guarantee, perhaps along the lines of the TECs and the Business Links and with directors drawn from the CBI, the British Chambers of Commerce, Business in the Community, local authorities and so on? That type of organisation would attract European money. The European Regional Development Fund's view is that the growth of small and medium enterprises should be vigorously pursued in the attack on regional unemployment. There are many initiatives in support of which Europe would match pound for pound with us.
§ There is obviously and quite distinctly a future for some years ahead for a British Coal Enterprise-type organisation, but it needs resources and an assurance of some stability. I hope that the Government can announce that they will continue financial support so that the chief executive, Phil Andrew, and his team can continue the excellent work of economic regeneration of the pit villages in all our coalfields.
§ 6.33 p.m.
§ Lord Ezra
My Lords, I am pleased to follow the noble Lord, Lord Mason of Barnsley, and to support his words of support for British Coal Enterprise. I can think of no one more suited than the noble Lord to have tabled this Unstarred Question. The noble Lord was a miner for many years and represented a mining constituency for many more years. Among other prestigious offices of state, he was Minister of Power at a time when I had much to do with him at the National Coal Board. What the noble Lord says on this issue, as on any connected with the coal industry, has to be taken seriously.
This subject was well aired during our debates on the Coal Industry Bill. The noble Lord referred to the amendment introduced by the right reverend Prelate the Bishop of Sheffield, not only very movingly, but also very effectively. It was my impression from the interventions on that occasion of noble Lords of all parties and the then Minister, the noble Lord, Lord Strathclyde, that there was wholehearted support for the continuance of the work of British Coal Enterprise and an appreciation of what it had achieved.
There are two overriding reasons why the organisation should be maintained for many years ahead. First, there is the work it has achieved in the coalfield areas. As we have been reminded, BCE was 1463 set up in 1984. Since that date, it has created no fewer than 120,000 job opportunities. That in no way offsets the much greater number of mineworkers who are no longer at work but it goes a long way towards doing so. It is a remarkable achievement. It has been done, as the noble Lord pointed out, in close association with other organisations such as local authorities and TECs. It has been a model of its kind. The noble Lord is right in saying that although the coal industry has now been privatised—let us hope that there will be no further reduction in the now much attenuated coal industry—nonetheless there is much more work to be done in finding work for ex-miners. The noble Lord suggested a continuance period of at least 10 years. I fully concur with that. On those grounds alone, there is a very good reason for continuing BCE's work. It is unfinished work.
However, there are wider grounds for its continuance. British Coal Enterprise has created a new form of initiative for dealing with unemployment. It has created new jobs at a much lower cost than most other initiatives. So far as one can tell, BCE has created new jobs at a cost of something like £2,000 each compared with about £5,000 in other cases. It has done that through a combination of business funding, managed workspace and outplacement. It has made a unique contribution to sustained job creation at a time when unemployment remains one of the major problems facing us.
Thus, what is at issue is not simply continuing with British Coal Enterprise as a means of finding alternative jobs for displaced mineworkers, but, more importantly, for the model it has developed as an all-embracing regeneration vehicle in areas of unemployment. It is a model that is eminently transferable anywhere else in the country. Indeed, as the noble Lord, Lord Mason, pointed out, there has been wide interest overseas—in the countries of eastern Europe, in South Africa and elsewhere.
So it is very proper that we should be asking questions tonight about the future of the organisation. In our debates on the Coal Industry Bill, we were told that BCE would continue for an interim period. We are now coming to the end of a financial year. So what do the Government mean by an interim period? Does that include the next financial year, which is due to begin shortly, or the year after that as well? Perhaps we can have some definition of the phrase. Presumably, in the "interim period"—whatever its length—the present level of funding would be continued.
A more important question is: what about BCE's long-term future? Are the Government now not convinced that it is an organisation which on specific and more general grounds, should be continued? To dispose of it, dismember it, or let it be absorbed elsewhere would be something for which I do not think that any of us could easily forgive the Government. A very successful initiative has been taken. With little effort, the Government could enable it to continue. The noble Lord, Lord Mason, explained how that could be done. It could be converted into a company limited by guarantee, as are TECs and other similar organisations. It could be vested as a capital asset with the value of 1464 the work space it has created. I believe that that amounts to some £40 million. With that capital backing, it could easily raise the money necessary to continue to run its affairs. That would be £40 million very well employed and preferable to the alternative, which I presume would be disposing of the asset, selling it off or breaking it up and losing the whole initiative.
I hope that the Minister will tell us, first, of what the interim period consists and that the present level of funding will continue throughout that period, and secondly, that the Government have reached firm conclusions about how a magnificent initiative may be continued into the distant future.
§ 6.41 p.m.
§ Lord Dormand of Easington
My Lords, there will be disagreements during our discussions on this Question but there will be complete agreement on one aspect; that is, everyone acknowledges that British Coal Enterprise has achieved considerable success in meeting its objectives. It is not necessary for me to repeat the figures relating to that success. They have been stated many times in both Houses and we have heard them, very properly, this evening from my noble friend Lord Mason and the noble Lord, Lord Ezra. When I said "everyone", that includes all the Ministers—and I look across the Chamber—who have been associated with the scheme.
In such circumstances, some would ask why there should be any change at all. The Government will say that change is necessary because of the privatisation of the British Coal Corporation. In itself that need not mean that there should be any fundamental change, but I suspect that the Government will make it a reason for a substantial change. I look forward to hearing what the Minister has to say about that aspect.
For the record, I hope that the Minister will confirm that the present arrangements will continue until March 1996, the date on which BCC will cease to exist. That date has been mentioned by Ministers on a number of occasions. If it is correct, will the Minister say whether the normal funding will apply for that period?
I believe that BCE has been successful largely because it is related specifically to the coal industry and coalfield areas. I say that because there is talk now that grants available under BCE may be subsumed under schemes not related especially to coalfield areas. As your Lordships will know, there are many agencies for job creation, agencies established by local authorities, by government departments, by voluntary bodies, by quangos and by others. If the work of BCE is transferred to those bodies, not only will there be a dispersal of the money but there will also be a widening of the objectives, which will inevitably affect the present aims of BCE.
BCE's funding comes principally from British Coal and hence, in effect, from the Government. If there is the kind of change which I have just mentioned, it would be completely unrealistic for the Government to say to any organisation that it supports, "Here is the grant but x pounds must be given to help create jobs in an area where pits have been closed". Whatever form 1465 the new structure may take, I hope that there will be no reduction in the overall grant. The closure of pits has accelerated in the past two years or so. Not only are thousands more former miners unemployed, but they are younger than ever before. They are men in their 20s, 30s and 40s who have a lifetime's work ahead of them. Older men have been out of the pits for a considerable time.
I recall an ominous response to me from the Minister, the noble Lord, Lord Strathclyde, during the debates on the Coal Industry Bill last year. I asked what would happen to capital receipts. The noble Lord said that he could not resist a smile for two reasons: first, because he did not know the answer to the question; but also,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".I take that as a fairly strong hint as to what will happen or as to what certainly may happen.
If there are significant changes in the work of BCE, it will be a field day for the Treasury. BCE as we now know it will disappear. I should like to see any change kept to a minimum. Two months ago the Northern Development Company gave evidence to the Trade and Industry Select Committee. I need hardly say that the Northern region has been badly hit by pit closures and still has the highest rate of unemployment on mainland Britain. The Northern Development Company is unique in that it is a body formed by the northern region's local authorities, the northern TUC and the northern CBI. As such, it commands widespread respect in the regions.
In its evidence to the Select Committee it pays tribute to the work done by BCE, and in its summary the first point that it makes is:The key issue in regional policy is consistency".Among other matters, that means that there should be little or no change affecting BCE. I quote again the noble Lord, Lord Strathclyde, during our debates on the Coal Industry Bill, who said:the regeneration of the coalfield areas is an avowed objective of government regional policy".Those two quotations hang very closely together.
We have been told on a number of occasions that the Government are considering very carefully the future of BCE and that discussions are currently taking place. Will the Minister tell us who is being consulted? The views of many people and organisations should be sought if the consultations are to be genuine and effective. Therefore, it is important that the Minister should tell us this evening who is involved in those discussions.
Will the Minister bear in mind that this is not a party issue? I believe that that was one of the first points made by my noble friend Lord Mason. Support for the continuation of BCE crosses all parties and non-party people and organisations. Therefore, it is of the utmost significance that there should be full consultation. Employers, employees, local authorities and others all have their contributions to make to those discussions.
The main purpose of BCE is to assist former miners to find employment, and that includes helping former miners to be placed on suitable training courses. The 1466 Government constantly remind us of the importance of training and retraining. We heard that again in the Chamber today at Question Time. Therefore, I hope that they will acknowledge that function of BCE and thereby ensure that it will continue to fulfil that objective.
No one is better than the miner at adapting to new work. I believe that that is recognised generally. When I was a Member of another place, nothing gave me more satisfaction than hearing from employers time and time again in the new town situated in my former constituency how well former miners had adapted to their new work. Needless to say, training was crucial in the change and I suspect that the Government have underrated the role which BCE has played in that aspect of the work.
The Minister may know that I frequently raise the problem of long-term unemployment in the House. Any unemployment is terrible: but long-term unemployment is literally disastrous in its effect on families. I was, therefore, deeply concerned to learn of figures produced from a study by the Coalfield Communities Campaign recently which showed that 46 per cent. of redundant miners were still unemployed a year after the October 1992 pit closures.
Further evidence from Sheffield Hallam University shows that unemployment in former mining towns and villages is more than 26 per cent. compared to 15 per cent. nationally, and, indeed, is well over 30 per cent. in some communities. I do not know whether those figures are correct, but they are important. I suspect that they are accurate; but, if not, I should welcome the Minister's comments in his response.
The Government frequently talk about value for money. Let the Minister say tonight that they recognise that BCE has given superb value for money. It is a comparatively small amount of money. In 1993–94 it was a subsidy of £22 million and was given at a time when the Government have received many millions from the sale of the coal industry and when they have much more to come from the sale of British Coal land and other assets.
The Government would have the satisfaction of knowing that mining communities have overwhelming sympathy and support from the people of this country. How vividly we remember the marches and demonstrations by thousands of people, many in areas where people had never even seen a pit, when the President of the Board of Trade announced those massive pit closures.
The Government have in this matter a golden opportunity to express their appreciation of the massive contribution that the miners have made over the years to the economy of the country. I hope that they will grasp that opportunity with both hands.
§ 6.52 p.m.
§ Lord Varley
My Lords, I should like to support the case put so forcefully by my noble friend Lord Mason of Barnsley for the retention of British Coal Enterprise. In some respects, like other speakers, I am surprised that it is necessary to raise the issue again with the 1467 Government. One would have thought that it would have been in their best interests to have cleared up the matter many months ago.
As far as I understand it, it is not for want of trying. The Coal Industry Bill was before both Houses of Parliament for many months and, as was mentioned by my noble friend Lord Mason, questions about the future of British Coal Enterprise were posed time and time again. The coal industry is in private hands, the Coal Authority has been set up and British Coal's subsidiary, Coal Products, has been sold to the company management, yet the one organisation established by the industry to help to create jobs and viable enterprises in the devastated former coalfield areas appears—that is, unless the Minister surprises us tonight—to have no future.
My mind goes back to the establishment of British Steel Industries, an organisation that some would say was the model for BCE. British Steel Industries was established when the bulk of the steel industry was in public ownership and was formed to deal with the rundown and modernisation of that industry in the 1970s. I well remember some of the former chairmen of British Steel Industries; for example, Sir Charles Villiers, who brought great flair to the organisation because of his background as an industrialist and a merchant banker.
After the stock market flotation of British Steel, British Steel Industries was continued by the new British Steel Corporation. As far as I know, after many years of successful operation, it still continues. But the imperative for creating jobs and viable businesses in areas where basic industries like steel and coal have been run down rapidly is exactly the same. If it was right to set up British Steel Industries and continue it from the 1970s right through to the present day, why is it necessary to have so much doubt about the future of British Coal Enterprise? I hope that the Minister will comment on how it was possible to continue the job creating agency in one privatised industry but dither so long about whether it is possible to ensure the future of BCE.
The impressive record to date of British Coal Enterprise has been described most fully by my noble friends Lord Mason and Lord Dormand and, indeed, by the noble Lord, Lord Ezra. There is no need for me at this hour to repeat all the facts that have been laid before the House. However, I have some personal experience of the operations of British Coal Enterprise and have seen for myself its activities in Nottinghamshire and Derbyshire. I very much admire BCE's achievements. I am the Chairman of the Chesterfield Area Regeneration Team, which operates under the acronym "Chart '99". It is a job that I undertake on a voluntary basis. Chart '99 is a joint private sector and public sector partnership. BCE is a member of that body and an important component of it. Chart '99 is charged with the task of helping to co-ordinate the economic reconstruction of north-eastern Derbyshire, where all the pits were closed following the announcement of the President of the Board of Trade in October 1992 and the White Paper which followed. Indeed, as a result of government policy, there is no pit left in Derbyshire now.
1468 However, it is no good harping on about the past; we have to face up to the position which exists at present. We in north-east Derbyshire have been successful in our bid through the single regeneration budget and in getting money from the European Union for flexible business support measures. We have established a company limited by guarantee through which all the monies are put and properly audited—the sort of solution recommended by my noble friends. I want to assure the Minister that we receive tremendous support from the government office in the East Midlands and from Mr. Mark Lanyon, the regional director and his staff.
However, I must say to the Minister that this is not the time to weaken the links in our organisations not only in north-east Derbyshire but elsewhere in the country. If BCE does not have a sound and secure future it will weaken and undermine our efforts and, indeed, all the efforts that are being made to bring about hope in the former coalfield community.
Therefore, in my judgment, British Coal Enterprise has a job to do for many years and deserves a clear and unqualified vote of confidence from the Government. I hope that the Minster will take the opportunity to say firmly and unequivocally that BCE has a very secure future.
§ 6.58 p.m.
§ Lord Peston
My Lords, I thank my noble friend, Lord Mason of Barnsley, for tabling the Unstarred Question. I also congratulate him on the cogent way that he put the relevant points. Noble Lords are indebted to my noble friend, to the noble Lord, Lord Ezra, and to my noble friends Lord Dormand of Easington and Lord Varley for the points that they raised. They are all experienced in the area. Indeed, two of them were former Secretaries of State, one was the head of what was then the National Coal Board and another the Member of Parliament for Easington, in Durham, which is very much part of the mining world. I am afraid the only ignorant and inexperienced person taking part in the debate is me, but I shall do the best I can.
The main factual points have been made and there is no need for me to go over them again. All I wish to do is to underline some of the points of principle. In particular, I wish to emphasise what my noble friend Lord Varley said. I, too, am puzzled as to why we have to raise this matter. We debated it fully when we were discussing the coal privatisation Bill. An overwhelming case was made then for a continuation of British Coal Enterprise and also for an early decision and a considerable commitment. I find it odd that my noble friend Lord Mason is put to the trouble of having to raise this matter again when this is Government business and the Government ought by now to have made an announcement saying, "Yes, we are going to continue it on this basis and for this period of time".
Enterprises like British Coal Enterprise make perfectly good economic sense. We know there has to be industrial change. We may disagree about some aspects of it but we know if our economy is to be dynamic things have to change. But what is also clear is that we do not want people thrown on the scrap heap. If people have to change, we want them re-employed. If 1469 one big business—in this case coal—goes into decline, we want other businesses to start up. In this case what we have is a model of its kind. What we are talking about—I again echo the words of my noble friend Lord Varley—is a partnership between private enterprise and public money. I have believed in that almost all my life as an economist. I cannot remember the first time I ever thought about it, but I am certainly talking about 30 years ago. However, when one mentions that now it is called "new Labour"; but I have to say that as far as I am concerned it is very "old Labour" indeed. It is also common sense.
The other point I should like to make on this subject is that we should not be ideological in this respect; we should be pragmatic. We should ask what will be effective. I emphasise how much better it is for us to invest public money in enterprises of this kind—and also to preserve communities rather than to cause them to break up—than to pay out vast amounts of social security benefit. I think my noble friend Lord Dormand of Easington said there would be antipathy from the Treasury, or he felt there was a Treasury angle to this. That puzzles me because the Treasury, certainly in my day, used to consist of fairly sensible people. I should have thought the Treasury would realise that it would be much better—certainly in the long run, but perhaps even in the short run—even in terms of public expenditure to put money into this kind of area rather than all the time just pay out, willy-nilly, social security benefits which are, in the end, nothing more than sticking plaster. They do not solve any problems; they just help people to get along.
The point about British Coal Enterprise is that it actually solves problems. That is well established. It has a proven record of success. We are not talking about something airy-fairy that we have never tried. This is something that we know we can do, and it works. I should add, too, that this kind of thing, as has been mentioned, is regarded as a model abroad. Our colleagues in the Union are learning from it, but it is also the approach that they themselves would use. They would certainly rather create jobs and create enterprise than pay out social security benefits. Again, they do that not on an ideological basis but because it works. I echo the remarks of the noble Lord, Lord Ezra, that this is about as inexpensive a method of job creation as any that we know.
Wearing my economist's hat, I strongly believe that one should always take a hard-headed approach to topics of this kind. I do not believe in pouring out public money solely because the miners are deserving. I am not saying they are not deserving but one can take a hard-headed approach to this. What we need to do is to look at the costs and the benefits to determine whether there is a positive net gain. In this case it is clear. If the costs and benefits are calculated correctly in terms of the jobs created, the communities saved and the savings of social security benefits, I am quite clear that there is a net benefit. I am quite clear, again, that this cannot just be left to the market. The central point is the need for the kind of sophisticated joint approach that we have had up to now.
1470 I conclude with a simple request. I have to tell the Minister that I was certainly under the impression, both when we did the coal Bill and subsequently, that we were going to get an announcement. I have to say in all honesty—I was responsible for certain aspects of that matter from these Benches—that I would have expected a statement by now. I find it hard to imagine why we have not had one. I cannot think of any benefit to the Government from not making a statement. I can see enormous benefits to the coalfield communities from making a statement. To be perfectly honest, even if it were to be a negative statement I think many of us would rather have that than leave the thing hanging around. I implore the Minister to make an announcement now although I am not convinced that he is about to get up and say, "Yes, I can tell you it will last for 10 years". But the messages he must take back are, first of all, the messages of support. I am sure that if we were dealing with this matter in what is called "prime time" there would be other speakers, all of whom would support what has been said already. The Minister must take back the message that our desire is to have from the Government an early and full statement of support for British Coal Enterprise, support for the funding and support for a considerable period of time.
§ 7.6 p.m.
§ Lord Inglewood
My Lords, I am grateful to the noble Lord, Lord Mason of Barnsley, for tabling this important Question about the future of British Coal Enterprise which touches on matters about which he has such great knowledge and concern. I am also grateful to the noble Lords who have brought with them their great expertise and experience and contributed to today's worthwhile and wide-ranging debate.
The noble Lord, Lord Peston, modestly claimed that he was not as well informed as some of the other contributors to the debate. But I must begin by putting on record something which is obvious—I am probably the only non-participant in the coal privatisation debates in this House who is taking part in the debate today. As a northerner, and proud of it, I am obviously aware of the problems in the coalfields and of the sterling work that has been done in trying to make things better. Indeed, I did some of my political training in the area where the noble Lord, Lord Dormand, comes from. I do not suppose he voted for me but it would not have made any difference even if he had.
I wish to start by commending, as all other noble Lords have done, the work of British Coal Enterprise. Its efforts are well known and recognised and, as a number of noble Lords have said, not only in this country but also abroad. With the leave of the House, I do not propose to enter a debate about its achievements during the past 10 years other than to emphasise that there can be no doubt about the importance of British Coal Enterprise's contribution to economic regeneration in the coalfield communities and to the generation of work for those affected by the changes which have been taking place there. I must also record satisfaction that it has been perceived as doing such valuable work.
1471 The Government and British Coal have been exploring the future options for British Coal Enterprise for some considerable time. No final decisions have yet been taken. But obviously in the context of the privatisation of British Coal there is inevitably going to he some change, and we must be clear about that. However, equally, we must take forward the work that has been achieved and use the expertise that has been acquired.
I am grateful to the noble Lord, Lord Peston, for reminding the House that during the passage of the Coal Industry Act 1994 the Government indicated that British Coal Enterprise would be retained in its existing form throughout the transitional and immediate post-privatisation period. We have honoured that commitment and we also said in the summer that we hoped we would come forward with firm proposals by the end of the year. We do not feel we have yet reached that position.
However, as the House is already aware, funding has been agreed for British Coal Enterprise's job placement and training activities until March 1996. This should enable British Coal Enterprise to undertake the bulk of the remaining resettlement work for former British Coal workers. This service gives former miners and other British Coal employees access to a wide range of assistance, including career counselling, interview techniques and advice on retraining, pensions and financial advice. As the noble Lord, Lord Dormand, pointed out, unemployment is a scourge and long-term unemployment is the worst form of that scourge. We are all agreed that the work of British Coal Enterprise has been directed significantly at that particular problem. For the men and women affected by the contraction of the coal industry that work is vital for their future prospects. It is because the Government recognise the importance of that work that they have supplied the necessary funding.
In addition, the Government have now agreed to provide additional funds for BCE's workspace and venture capital activities to allow them to continue, again until the next financial year. That is a course of action which has been recommended by Mr. Neil Clarke, chairman of British Coal. It provides a further period for British Coal to identify future strategies for meeting the real needs of the coalfield communities over the longer term and avoids the risk of premature withdrawal from this important work.
There has been a tendency in our debate to present the future of British Coal Enterprise as a stark choice between, on the one hand, substantial on-going government support for self-standing British Coal Enterprise or, on the other, the break up and run-down of activities. That is an over-simplification of a complex issue. There is a wide range of possibilities which need consideration. These include various forms of partnership with other regeneration bodies at national or local level. Such options need thorough consideration before any firm decisions are taken. A continuation of funding into the next financial year provides an opportunity for this work to be undertaken properly.
1472 The comments of some noble Lords indicate that it is their view that the Government should accept full responsibility for the continuation of British Coal Enterprise in its present size and form. That option may appear to have some attractions but it is based on a misunderstanding. A significant part of the work of British Coal Enterprise is time limited. It is, of course, difficult to say precisely when the work of resettling and training former British Coal workers will have been completed. However, it is unlikely that there will be a significant amount of that work beyond March 1996. Needless to say, the resettlement skills developed by British Coal Enterprise may be applicable elsewhere. That possibility must be examined. But, inevitably, in a different context the nature of the work would change at least to some extent. Furthermore, job creation techniques, which achieved such success over the last decade, may not be the most appropriate for the next 10 years.
To give one example, British Coal Enterprise has built a substantial amount of managed workspace for businesses willing to operate in the coalfield areas. Demand for such workspace may not remain constant for the next 10 years. Clearly, therefore, we would not want to spend public funds on building further new space for it then to stand empty.
The nature of regeneration policy itself is evolving. We have seen the creation of the single regeneration budget. Does a centrally funded coalfield-wide regeneration body fit well with the current approach to regeneration, with its emphasis on local partnerships and a demarcation between fundholders and service providers? Furthermore, we must ensure that whatever takes place in the future is a responsible use of public money, where that is involved, and represents value to the taxpayer. And let us not forget that overall net assistance to British Coal Enterprise amounts to some £167 million-worth of public money. This all reinforces the need for a full and considered review of all the options before final decisions are taken.
Since the summer, British Coal has commissioned an independent consultant to advise, whose findings were received at the end of last year and have been made available to the Government. We have also discussed the future with British Coal and British Coal Enterprise. In addition, we have received a number of inquiries from the public and private sectors.
With the leave of the House, I should like to conclude this debate with an assurance on the part of Her Majesty's Government that we shall do all we can, as quickly as possible, to reach firm decisions, after consultation with British Coal and British Coal Enterprise itself, on the most suitable future for the enterprise. We shall then also consult more widely. We hope that we shall have identified and implemented the appropriate measures by the end of the next financial year. I hope that that answers the point of the noble Lord, Lord Ezra.
I am sure that the House understands that the Government acknowledge the important role played by British Coal Enterprise over the past decade in assisting regeneration of coalfield areas and helping those affected by the great changes that have taken place 1473 there. However, as I hope I have made clear, the future is not a simple choice between maintaining British Coal Enterprise as it is or running it down.
We must explore fully the relationship between British Coal Enterprise and other regeneration bodies in both the private and the public sectors. We must examine the scope for constructive partnership between them so that the regeneration work can be taken forward in a concerted, purposeful and cost-effective way.
§ Lord Dormand of Easington
My Lords, I am grateful to the Minister for allowing me to intervene. Before he concludes his speech, perhaps he can clarify a point which I raised. He mentioned the date of 1996. Will he say whether funding is to continue until March 1996, and whether it will be at the same level as in the past? I may have misunderstood him, but it is important that the matter is clarified.
§ Lord Inglewood
My Lords, my understanding is that the present funding is to be continued until the end of March 1996.
1474 We shall ensure that the strategy for the future is consistent with our current approach to regeneration policy in general.
The issues are complex. We must resist the temptation to jump to hasty and ill-founded conclusions. The issue is far too important for that. This evening's debate has been useful in highlighting a number of important points that will be the core issues under consideration as the review continues. I am sure that all noble Lords will agree that it is in the best interests of those in the coalfield communities, the employees of British Coal Enterprise and those who depend on it for their jobs, as well as for the country at large, that we get the answer right. We must not allow our own understandable impatience to prejudice the outcome.