§ Mr. Barron
asked the Secretary of State for Social Services what discussions he has had about the renewal of the National Coal Board's contract to supply solid fuel to the National Health Service; and if he will make a statement.
§ Mrs. Currie
The existing agreement for supply of coal to National Health Service authorities by British Coal (formerly National Coal Board) commenced in April 1984 and has an expiry date of March 31 1987.
In conjunction with representatives of the principal coal-burning NHS regions, the Department's director of procurement has been engaged in commercial negotiations with British Coal throughout 1986. These negotiations have taken account of the dramatic changes in world energy markets over the past 18 months and British Coal's willingness to revise its own pricing mechanisms to meet this challenge.
A new supply agreement with British Coal was agreed in principle early in December 1986 and, subject to final review and acceptance by senior NHS officers at a meeting arranged for Thursday of this week, the director and British Coal hope to announce an improved agreement covering the period 1 April 1986 to 31 March 1989.
I am advised that British Coal and regional health authorities are satisfied that the new agreement, whilst providing security of supply to NHS establishments, will also enable the market and supply situation to be kept under regular review. The agreement also takes full account of the complex distribution and usage requirements of the National Health Service and provides a sound platform for British Coal to retain and possibly extend the use of coal subject to the normal value-for-money criteria.