HC Deb 20 December 1989 vol 164 cc304-5W
Dr. Woodcock

To ask the Secretary of State for Energy if he will direct British Coal not to seek to contract to purchase any additional production from private deep mines and opencast sites.

Mr. Michael Spicer

No. However, the British Coal Corporation's statement on licensing policy and practice, placed in the House of Commons Library on 29 June(Official Report columns 509–10 refers), makes it clear that they would support the efforts of licensees to secure contracts with third parties. It also emphasises that it is for the licensee to determine whether to sell coal to third parties or to British Coal, and that the licence is issued free from any delivery requirement (para 15 and annex B of the statement). The Government welcome this freedom for licensed operators, and consider it important that it should apply equally to the larger licensed mines proposed in the Coal Industry Bill.

Dr. Woodcock

To ask the Secretary of State for Energy if he will review the royalty paid by private mine operators to British Coal on each tonne of coal produced.

Mr. Michael Spicer

Royalties are a matter for the British Coal Corporation, as owner and licensee of coal reserves. In its recent statement of licensing policy and practice, a copy of which was placed in the Library of the House on 29 June, British Coal has reaffirmed its intention to set royalties at levels which will permit efficiently-managed operators to develop their businesses profitably, and to continue to review standard levels of royalty from time to time in accordance with this principle. It has assured me that in setting the standard levels of royalties it will include the general health of the licensed sector in the matters taken into account. I am continuing to discuss with British Coal methods of monitoring the profitability of the licensed sector.

British Coal has also undertaken to reduce royalties for new licences in any case where accounting evidence is provided which demonstrates that profit expectations would otherwise be cut to unreasonably low levels. I do not believe that it is in the national interest that otherwise economic small coal deposits capable of competing with imports should be left unworked because of a high royalty.