Energy Review (Hansard, 26 October 1992)

§ Mr. Heseltine

As I announced to the House on 21 October, I have put in hand a full and wide-ranging review of the prospects for the 21 pits proposed for closure by British Coal but not subject to the statutory consultation currently being undertaken by British Coal. This review will consider views and evidence on the future of each of the pits in question, in the context of the Government's energy policy, including the consequences of that policy for British Coal and the employment for the industry.

It will decide whether the case for closure at each of the pits in question has been fully made and whether it is sensible to mothball some of these pits. It will consider whether the market prospects for coal have been correctly assessed and, in consultation with the Director General of Electricity Supply, whether any company is abusing its position in the market place. It will look at the level of coal stocks, both at the pithead and the power stations, and whether plans to run them down are sensibly phased.

It will consider the consequences of the switch to gas in power generation and the relative costs of gas and coal-fired generation. It will look into the latest estimates of likely reserves of gas and draw conclusions. It will consider the present scale of gas-generated power stations in production, being built and in the planning process. In this connection, it will review the use of my consent powers under the Electricity Act 1989.

The review will consider the implications of the statutory obligation on electricity suppliers to purchase non-fossil power, including that from nuclear sources.

The review will explore the opportunities for the private sector in the production of coal. It will consider the existing and anticipated level of imports and the wider economic implications of this.

The review will give due regard to Scottish and Welsh interests and will also give consideration to the particular needs of Northern Ireland.

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Consultation will take place with all the principal providers and consumers of energy, the trade unions and other interested parties. I have already announced that I have invited Boyds, an international mining consultancy to report to me on the viability of the 21 pits. I also intend to appoint consultants to report on the prospects for British Coal, including any alternative markets that may exist for coal and to comment generally on the competitiveness of British Coal as an organisation. I may wish to commission further independent studies.

My intention is to publish all evidence and the findings of the review to the fullest extent possible except where information has been provided in confidence and is commercially sensitive. I shall be discussing with the Trade and Industry Select Committee the means by which such confidential information might be made available to it.

Early in the new year, I shall publish a White Paper setting out the results of the review in the context of the government's energy policy, and making clear the consequences of that policy for British Coal, the implications for individual pits and the employment prospects for the industry. Before then the Select Committee will have a full opportunity to consider all the issues as it thinks fit. I shall present the conclusions and the Government's future decisions to the House, which will have an opportunity to debate the issues fully.

In order that I can give due weight to all the views expressed, I am asking those who wish to provide evidence to the review to do so as soon as possible and in any event not later than 1 December 1992. Evidence should be sent to Dr. J. M. Bird, Department of Trade and Industry, Room 3.4.4., 1 Palace street, London SW I E 5HE, making clear whether the evidence may be published.