HL Deb 30 January 1996 vol 568 cc1309-11

3.2 p.m.

Lord Dormand of Easington asked Her Majesty's Government:

Whether they have any plans to privatise British Coal Enterprise.

Viscount Goschen

My Lords, the British Coal Corporation has invited competitive proposals for British Coal Enterprise. It expects to have completed the sale of this subsidiary company by the end of March.

Lord Dormand of Easington

My Lords, I thank the Minister for that Answer. However, does he agree that British Coal Enterprise has an excellent record in the difficult task of generating employment in pit closure areas? Will the noble Viscount also confirm that the all-party Coal Fields Communities' Campaign has complained very strenuously to the Secretary of State about the proposed sale and that the European Commission, which has given BCE £10 million in grants, is also very much opposed to it? Is it not sheer vandalism to destroy such a successful operation?

Viscount Goschen

My Lords, I do not believe that to be the case. However, I join the noble Lord in his praise for the work that British Coal Enterprise has done. That is indeed the case. Well over 100,000 people have passed through its auspices. But with the winding up of British Coal change is inevitable post-privatisation. We want to see the regeneration work that BCE has undertaken so successfully in the past continue. We believe that this move will be the best way to achieve that aim.

Lord Mason of Barnsley

My Lords, can the Minister say, first, how many bids have been submitted since British Coal advertised; secondly, whether the economic regeneration of the coal fields is still part of the bid criteria; and thirdly, whether the moneys raised from the sale will be ploughed back into the coal field communities?

Viscount Goschen

My Lords, in answer to the noble Lord's first question, I understand that British Coal has prequalified 14 organisations to bid for all of BCE or its individual activities. I agree with the noble Lord that it is important to ensure that the regeneration work that BCE has undertaken so successfully should continue. As regards the issue of the revenues from the sale, I have to tell the noble Lord that, allowing for the repayment or the write-off of BCE's current debts, it is by no means certain what level of proceeds will accrue. However, such proceeds will go to British Coal.

Lord Skelmersdale

My Lords, can my noble friend explain what is behind the idea that this regeneration can only be done by the public sector?

Viscount Goschen

No, my Lords, I cannot explain that because, as my noble friend knows, that is not the Government's policy. A number of other institutions—private companies and, indeed, organisations in the public sector—undertake such work. It is most important to realise that fact when considering the future for BCE.

Lord Ezra

My Lords, as it appears to be generally agreed that valuable work has been done by British Coal Enterprise and that it is desirable that such work should continue under the new owners, can the Minister say whether there is anything in the conditions of sale which will make that come about? In other words, is there not a risk that, with the new ownership of such businesses, such efforts could be diverted into other activities?

Viscount Goschen

My Lords, I do not believe that that is the case. When considering the bids that are put forward, British Coal will be looking most carefully at the sort of undertakings that such bodies will be able to give to continue that work. Within its statutory obligations British Coal is clearly looking for such work to continue. I believe that that is the right way to go about it.

Lord Dubs

My Lords, does the Minister agree that British Coal Enterprise has been one of the most successful examples of job creation in the coal field areas and that there is no certainty at all that any new company will be as successful in that respect as regards what we have seen recently? Can the Minister also give a better assurance than the one he gave earlier that the money from the sale will be used in the coal field areas? Will he confirm that that money will not just he given to British Coal, but that it will be used in the coal field areas for the benefit of the people living there?

Viscount Goschen

No, my Lords; I have clearly stated the position on what will happen to the proceeds. The moneys will accrue to British Coal. As I said—and I agree with the noble Lord—BCE has been a great success. However, that now has to be put against the background of post-privatisation and a changing environment for BCE. With the gradual winding-up of British Coal, we have to look at the right environment to ensure that such activities are taken forward. We believe that this move will be the best way to achieve that aim.