Coal Industry (Hansard, 22 October 1997)

§ Lord Dormand of Easington
asked Her Majesty's Government:
What they expect the future role of coal will be in meeting the country's energy needs.

§ Lord Haskel
My Lords, the Government are aware of my noble friend's concern about the coal industry, but the Government must look to the country's energy needs as a whole. Our objective is to have a secure, diverse and sustainable supply of energy at competitive prices. Coal plays a significant part in the UK energy mix and although coal demand is declining, coal use will remain significant in the future.

§ Lord Dormand of Easington
My Lords, my noble friend the Minister has given a most promising Answer for which I thank him. However, given the Labour Party's traditional support for the miners—and I remind the House that there are still 20,000 miners in the industry—can they depend on the Government's help in the especially difficult circumstances experienced by the 722 Industry at present? In particular, will the Government stop giving further approvals to gas-fired stations for at least three or four years? That would give the industry a good breathing space, not least because of the so-called "sweetheart" deals which were authorised with the regional electricity boards. Further, will the Government speed up their evaluation of clean coal technology and, at the same time, stop importing heavily subsidised German coal into this country, which has been done by flouting the European Union regulations?

§ Lord Haskel
My Lords, I believe that my noble friend posed three questions. On the question of gas-fired power stations, the Government consider all applications for new power stations on a case-by-case basis. Gas certainly plays an important part in giving the UK a secure, diverse and environmentally sustainable fuel mix. The development of gas-fired generation has contributed to that diversity.
As regards my noble friend's point about electricity deals, I can tell the House that the franchises which have enabled such deals will come to an end next year. Those deals have enabled the generators to force domestic customers to bear the cost. However, competition in the electricity market should put a stop to that practice and ensure that a more level playing field is achieved. On the question of clean coal technology, the Government are doing all that they can. The position is that the emissions of sulphur dioxide and nitrous oxide are under control. The issue of emissions of carbon dioxide is proving difficult, but the Government are doing what they can to encourage research and development to overcome the problem.

§ Lord Peyton of Yeovil
My Lords, is the Minister aware that he owes a very considerable debt of gratitude to the noble Lord who asked the original Question for the astonishing mildness of the noble Lord's supplementary question? Does he appreciate that we have not often had strung together such a mass of meaningless platitudes as was contained in the original Answer?

§ Lord Haskel
My Lords, I thought that my answers were quite factual and not platitudinous.

§ Lord Mason of Barnsley
My Lords, can my noble friend the Minister say whether RJB Mining is seeking government intervention? Further, as regards the whole of the coal industry, is there no prospect of direct government assistance?

§ Lord Haskel
My Lords, it is not the Government's intention to subsidise the coal industry. Many exchanges are taking place between the Government and RJB Mining about removing subsidies elsewhere which distort the market, about clean coal technology and about delaying electricity liberalisation. The negotiations which are taking place between RJB and the generators are not a matter for the Government. As regards direct government assistance, I can tell my noble friend that the Government's objective is to achieve a level playing field. That will be achieved by removing 723 subsidies elsewhere, such as in Germany and in Spain, and helping our coal producers sell both here and elsewhere.

§ The Earl of Lauderdale
My Lords, does the Minister agree that clean coal technology involves an on-cost whereas natural gas is cheaper and cleaner?

§ Lord Haskel
My Lords, because the Government wish to have a diverse source of energy we encourage both the use of gas and coal, and indeed, the use of clean coal technology.

The Lord Bishop of Leicester
My Lords, in the light of his previous answer, can the Minister give any assurance to those whose livelihood is tied up with the Ashfordby colliery in Leicestershire, which is likely to close? Further, is the local community likely to see any return on the considerable sums of public money which have been invested in that mine in the past decades?

§ Lord Haskel
My Lords, the Government deeply regretted the news of the geological problems which caused Ashfordby to close. But ultimately the decision was one for RJB Mining to take and not one for the Government. In those circumstances, it is plainly difficult for the Government to challenge any decisions of a private company. However, every effort will be made to provide alternative employment. As the right reverend Prelate may know, on 6th October my right honourable friend the Deputy Prime Minister started an investigation as to precisely how this assistance to the coalfields can be speeded up.

§ Lord Shepherd
My Lords, can the Minister say whether the evidence which is available to the Government shows that cheap German subsidised coal is being dumped into this country? Further, can the noble Lord say how long that has been taking place and tell us what steps successive Governments have taken to deal with the matter so as to protect at least one of our basic industries?

§ Lord Haskel
My Lords, I am not aware of how long this practice has been going on, but certainly one of the first things that the Government did on taking office was to tackle the question of subsidised coal from Germany and Spain. That is why we complained to the European Commission about the high levels of state aid paid in these two countries. So far, those initiatives have led to the closure of one subsidised anthracite producer in Germany which was selling anthracite into the UK market at below production costs. The Commission has opened an investigation into the matter and has now written to the German Government in strong terms asking them to explain that aspect of their regime. The DTI will also be writing to the Commission on the issue of steam coal subsidies in Germany. Moreover, the Government have also been assisting Celtic Energy with its complaints to the German Government.

§ Viscount Ullswater
My Lords, is the Minister aware that the major supply of current electricity to the grid comes from the nuclear industry, which is more than coal and more than gas? If the Government are not prepared to subsidise the coal industry any further, what plans do they have to secure the same diversity of supply in the next century instead of relying entirely on the gas-fired power stations?

§ Lord Haskel
My Lords, I do not think that the noble Viscount is quite right in saying that the major source of supply is nuclear. Under the Government's fossil fuel levy scheme a levy helps pay for research into renewable energy which seeks ways of increasing the supply of electricity from wind power, hydro-electric power and other kinds of renewable energy.

§ Lord Dormand of Easington
My Lords, in his reply my noble friend made two important points about security of supply and price. Is he aware it is estimated that there are 500 years' supply of coal still left in this country? As regards price, will he comment on, and if necessary disagree with, the coal industry's prices of 1.7p per kilowatt hour for coal, 3.2p for gas and up to 5p for nuclear? If those figures are correct, there is a strong economic case for coal.

§ Lord Haskel
My Lords, there certainly is a strong economic case for coal but equally the Government are committed to reducing emissions and that matter must also be taken into consideration in the calculation. Regarding the price of electricity, I am sure that the noble Lord is correct; but this matter has to be left to the market. The regulator is obliged to ensure that the regional electricity suppliers purchase electricity at an economic cost. The regulator is independent. This is not a matter in which the Government should intervene.