HL Deb 27 November 1997 vol 583 cc1088-90

3.24 p.m.

Lord Ezra asked Her Majesty's Government:

What is their policy for the future of the coal industry.

The Minister of State, Department of Trade and Industry (Lord Clinton-Davis)

My Lords, the Government's objective is to have secure, diverse and environmentally sustainable supplies of energy at competitive prices. Coal has a part to play in meeting that objective. Since taking office, we have taken several steps to ensure a fairer competitive market for coal.

Lord Ezra

My Lords, I thank the Minister for that Answer, but is he aware of the consistent reports that up to eight of the remaining 24 deep mines in this country are likely to be closed within the next few months, leading to 5,000 redundancies? If those reports are correct, what will the Government do about it? Furthermore, although the noble Lord has referred to the role which the Government would like coal to play in their energy policy, no announcement has been made of the details of that policy or of how coal can play that role if the rate of closures to which I referred earlier proceeds apace.

Lord Clinton-Davis

My Lords, as a result of the privatisation legislation, the Government's role is very limited. My honourable friend the Minister of State who deals with these matters, Mr. John Battle, has been engaged in constant discussions with representatives of both sides of the industry. The noble Lord suggests that we have done very little, but I remind him that we have already taken action to challenge unfair subsidies in Europe—a rather important matter; we have set up a review of the pool to ensure that coal is not priced out of the market; we have challenged gas contracts to ensure that the markets are not unfairly weighted against coal; we have had the fossil fuel levy to ensure that unfairly supported French nuclear power does not have too unfair an advantage, and we have challenged the advantage gained by the nuclear industry. We are seeking a level playing field. My honourable friend has therefore achieved a not inconsiderable record in only six-and-a-half months. I am aware of the difficulties confronting the industry, but perhaps I may add that it is for the main company concerned to sort out such problems.

Lord Hardy of Wath

My Lords, does my noble friend accept that we welcome the initiatives that the Government have taken with regard to unfair subsidies and unfair competition, particularly from Germany and Spain, but can he tell us what response there has been from the Commission and the national governments concerned? Is my noble friend aware that this country is developing a reliance upon future supplies of gas from parts of the world which cannot, and will not, be described as stable and that the case for coal still remains inadequately answered?

Lord Clinton-Davis

My Lords, formal complaints have been lodged over this matter. Indeed, the previous government failed to do that although the problems affecting coal loomed very large during their period in office. These matters are being investigated by the Commission, but such things take time. We have had very little time to deal with these matters but we shall continue to be alert to unfair subsidies. We are very much aware of the other matter to which my noble friend referred, but it leads to a much wider question which I do not propose to pursue at this stage. I am, however, fully aware of my noble friend's continuing interest in the coal industry.

Lord Fraser of Carmyllie

My Lords, will the Deputy Prime Minister tell the Kyoto Conference that it is a priority of Her Majesty's Government to save the United Kingdom's deep-mined coal industry?that. The balance that has to be achieved is how we can best advance the interests of the coal industry?

Lord Clinton-Davis

My Lords, it comes ill from—

Noble Lords


Lord Clinton-Davis

My Lords, I shall answer. It comes ill from the noble and learned Lord to question something to which his own government, through the right honourable John Gummer, were very much devoted. There seems some inconsistency there—not surprisingly.

With regard to our position at that conference, I have made it clear, as have the Prime Minister and the Deputy Prime Minister, that our intention is to achieve a proper balance. We have to take account of the dangers affecting the world's environment. It would be a complete abdication of responsibility if we failed to do that. The balance that has to be achieved is how we can best advance the interests of the coal industry within the framework that I have announced this afternoon.

Lord Dormand of Easington

My Lords, is my noble friend aware that as recently as 22nd October I was told in answer to a parliamentary Question that coal use would remain significant in the future? Does my noble friend agree that that means there must be a United Kingdom coal industry, if only for security of supply? The question of subsidies has been mentioned on two or three occasions. Is my noble friend aware that Germany and Spain have no intention whatever of obeying the European Union on this matter? Therefore, is it not quite feasible and recognisable that we in this country should take the same view, at least for a period?

Lord Clinton-Davis

My Lords, I do not believe that the conclusion drawn by my noble friend, who has taken a very keen interest in the coal industry for many years, is correct. It is our intention to attack the unfair subsidies in those other countries, and we have taken action in that regard. We shall press the Commission vigorously on the matter. Referring to subsidies to RJB in particular, that company is extremely well endowed and is hardly an ailing concern. The company has made considerable profits over the past two years in particular and has paid its directors vast emoluments. I believe that it should look to its shareholders rather than the taxpayer to take some part in all this.

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