House of Commons Hansard Debates for 26 Jun 1989

Mr. Andy Stewart : The hon. Member for Clydesdale (Mr. Hood), who was one of my constituents before he left for greener pastures, should see the letter which I received from the Bilsthorpe parish council in 1983. The nine Labour party councillors wrote congratulating me on winning the election to Westminster above the Labour candidate.

Mr. Hood : I wonder whether the hon. Gentleman received a letter from Blidworth parish council.

Column 776

In the tenth year of Conservative government, known to many of us in the mining industry as the decade of shame, it is important to remember that we are discussing the mining industry ten years on. I listened with amazement to the Secretary of State tonight boasting about the wonderful job that the Government have done for the mining industry. If getting rid of 150,000 miners is doing a good job, that shows how much the Government care about the mining industry and the mining communities. Why did they run down the mining industry? Why are they so against miners, their families and their communities? Is it because coal stocks are declining? there has been no such decline in coal reserves. Is it because there is a drop in demand for coal? That is certainly not enough to justify running down the mining industry. Is it not a livid hatred of miners and their unions, particularly the National Union of Mineworkers?

The hon. Member for Sherwood told us that the UDM is such a responsible organisation. It is so responsible that it has negotiated the smallest percentage increase in basic rates in the history of mining unions in the past 20 years. That is how good a union it is. Let me give the hon. Member for Sherwood one piece of advice to help him in his good fortunes, or his misfortunes, in the next general election. If he honestly thinks that wrapping his arms around Roy Lynk will help him get re-elected, I can tell him that that is like wrapping his arms around the captain of the Titanic.

I wish to make a brief reference to the Under-Secretary of State who is on the Government Front Bench. I was a bit annoyed, to say the least, at some of his out-of-character and disgraceful comments earlier today in answer to my hon. Friend the Member for Bolsover (Mr. Skinner) about the sacked miners. We heard him display all the old hatred and expose the Government's attitude towards the miners once again. I wish to clear up a few matters. The Minister did not tell us about the thousands of miners who were charged with standing on picket lines, standing up in a village or sitting on a summer seat and who were taken to court, found innocent but still not given their jobs back.

The hon. Member for Sherwood spoke about the great work that the UDM is doing in a new rejuvenated industry. He did not tell us about Paul Gallant who is on the area executive of the UDM who was charged with GBH for assaulting a striking miner and his retired father. Nothing was done against that individual, who is now welcoming the Secretary of State to UDM conferences wherever it has them now. There was no fair hand in considering the problems of miners and administering justice to miners at that time. Is it not a fact that of all the atrocities that were committed against miners who were on strike, not one working miner found guilty of any offence was sacked? Can the Secretary of State tell us what happened to the working miner who petrol-bombed my car because I was a striking miner during the miner's strike? Can he tell me what happened to the working miner who bombed my garage because I was a striking miner during the miners' strike? The answer is, nothing.

The hon. Member for Sherwood (Mr. Stewart) talked about the green pastures to which I have gone. He is so right. I am now among my ain folk, as we say in Scotland, where I was born and bred and I am proud to represent them. Before I moved, the hon. Member for Sherwood was

Column 777

my Member of Parliament, but there has been a 100 per cent. improvement in the quality of my life because I represent myself, because I live in my constituency.

The number of Scottish miners has decreased during this decade of shame. Ten years ago, there were 21,000 ; five years ago, there were 14,000 ; and now there are 1,600. A shadow is hanging over the Scottish deep-mine industry. On 2 February 1989, in a press release, British Coal praised the Scottish miners for their 15 per cent. increase in productivity. There was a special reference to Longannet :

"At Longannet coal face teams have established a new record for a week's output from a single coal face of 31,228 tonnes"--

a record that improved on the previous 1957 record of 25,000 tonnes. British Coal praised the Scottish miners with one hand and put the knife into them with the other.

Mr. Ted Leadbitter (Hartlepool) : I hope that my hon. Friend will remind the House that Shell, an international company, is bringing coal--in small boats, not bulk carriers--into small ports in Scotland. It is a loss leader. It is not making a profit on that exercise, in the hope that, when it wins the market, it will be able to get the contract and then up the price.

My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) made a suggestion about redundancies that affect Scotland. Should not what Sir Peter Gregson said on 14 June to the Select Committee on Energy be put on the record? He said that the £311 million for restructuring grant should be able to cover, first, the redundancies that spilled over from last year, in addition to the 15, 000 redundancies in the current year.

Mr. Hood : My hon. Friend is right. We have been given horrific figures showing by how much coal has been subsidised when transported by Shell to capture the so-called market. I was pleased to hear my hon. Friend's helpful intervention, because it takes me to my next point.

To add insult to injury for miners, Ministers have acted against them. I remember the Prime Minister introducing a Bill to allow for up to £40 million of imported coal. I remember Nottinghamshire Conservative Members opposing that Bill, obviously because of a certain self-interest.

The Secretary of State has said today that the Government will not be so foolish as to put the market into the hands of foreign importers. I see no evidence to support that. We have been told that only 2 million tonnes of coal comes from South Africa. That sounds fine, but how much South African coal is dumped in places such as Rotterdam and enters Britain through the back door? We know that South African coal has been moved in lorries from Nottingham in the midlands and blended with Durham coal, but that coal is not recorded in the figures.

We might not know the true figures, but we know that there are Conservative Members who willingly support the closure of the mining industry. One Conservative Member--I doubt that he will speak tonight--would probably want to tell us that we should bring all our coal in from South Africa. The South African bovver boys are here, and I see one. They would love to bring in South African coal, selling our natural reserves short.

Britain's natural resources are the envy of the world. We all know what happened in the 1960s and 1970s. I shall not defend the actions of other Governments who fell into the trap of accepting cheap oil but who, when the market

Column 778

was captured and the coal industry started to run down, pulled the rope in and quadrupled prices, almost destroying many western economies. That is the danger that we face. We must recognise that it is a trap into which no Government, regardless of party, should fall. I am not convinced that the Government are sincere in saying that they will not fall into that trap.

The Government support the idea of using coal from China, South Africa or Colombia. As my hon. Friend the Member for Easington (Mr. Cummings) said, that coal comes from child labour. The Government would sooner have that than British coal. The Government who whinge about Parliament's sovereignty support the idea of placing our energy requirements in the hands of foreign importers.

The Government are on their way out, are they not? [Hon. Members : -- "Hear, hear."] Are they behind 12 per cent. or 14 per cent. this week? [Hon. Members :-- "It is 14 per cent."] We will soon have a Tory- free Scotland and a Tory-free Nottingham. This country needs its coal produced by British miners. The Government will not achieve that--only a Labour Government will.

8.56 pm

Mr. Andrew Mitchell (Gedling) : I am grateful for the chance to speak in the debate. I recognise the sincerity with which Labour Members prosecute any debate on the coal industry. There is a sort of agelessness about the way in which it is conducted. For many Labour Members it is clearly a measure of success if miners are kept in jobs, whereas Conservative Members believe in promoting a successful industry that can produce economically and sell what it produces. I want to make three general points. The first is about the tremendous progress that has been made in the industry in Nottinghamshire. It is a pity that Labour Members do not look more carefully at that aspect. Secondly, in one or two tangential ways, I have some sympathy with the hon. Member for Sedgefield (Mr. Blair) about the coal industry's difficulties in the negotiation of contracts. Thirdly, I emphasise the critical need for the industry to be returned to the private sector as swiftly as possible. I read the motion moved by the hon. Member for Sedgefield with some surprise, because it did not acknowledge the tremendous progress that has been made by the mining industry. It does not show the sort of support for the industry--which Conservative Members would have expected following the review of Labour policy--or the new brand of trade unionism represented by the Union of Democratic Mineworkers which so well fights for its members' interests. The hon. Gentleman may have failed to show his motion in advance of the debate to the latterday Machiavelli who plays such an important role in the Labour party--Peter Mandelson.

In a hitherto adverse market, the mining industry has made much progress, and it is important to recognise that. Its operating profit this year at £500 million is twice as much as last year, as my hon. Friend the Member for Sherwood (Mr. Stewart) said in his excellent speech. It is not for nothing that my hon. Friend is known in Nottinghamshire as the miners' friend--a title to which he is justly entitled.

Tremendous price reductions have been made in the industry, saving its customers £500 million in the past year alone. Operating costs have been reduced by over 20 per

Column 779

cent. in real terms. Deep-mine profits of £125 million have been made, whereas the comparable figure for last year was a loss of £112 million. Accidents in the industry have reduced by no less than two thirds since the strike, from 93 per 100,000 man shifts to 29.4. Conservative Members would have liked to hear Labour Members acknowledge how well the industry has done over recent years. Deep mine operating profits of £73 million were achieved in Nottinghamshire last year. Even after capital charges of £55 million, an overall profit of £34 million was made. Productivity in Nottinghamshire has increased by nearly 12 per cent., which represents 4.35 tonnes per man shift and an increase of nearly 40 per cent. in three years. So far this year, productivity is running ahead of those levels. Those are significant statistics.

Nottinghamshire provides well over half of British Coal's deep-mine profits. I ask my hon. Friend the Minister what possible commercial justification he sees for British Coal having its headquarters in London, miles from the nearest pit. It is an extremely valuable piece of real estate. For those who work there, it is a nice, gentle location overlooking the walls of Buckingham palace, but there can be no possible commercial justification for it. Even if there were some economic justification for it, it is bad for management to be so far removed from its area of commercial activity.

Given that nearly 60 per cent of British Coal's deep-mine profits come from Nottinghamshire, will my hon. Friend the Minister, in the run-up to privatisation, encourage its chairman and board to locate near its most profitable area? I agree to take British Coal's chairman to see the excellent office sites in Nottingham so that he can see how congenial it would be to locate there. Many people believe that such a move would send out highly desirable signals to the industry and the generators who buy from it.

Pressure on the industry remains intense, and nowhere more so than in my constituency. Earlier this year, Gedling colliery underwent massive restructuring. It will never be enormously profitable because its seams are too thin, but it sells almost all the coal that it produces, because its quality is so high. Heavy losses were made last year, and this year, following the costs of major restructuring, it has been set a new target of 12,500 tonnes a week. I am glad to be able to tell the House that last week, for the first time, the much reduced work force managed to reach that target. Excellent progress has been made and we should congratulate its men and management on what has been achieved and express the hope that it continues. The need to achieve viability is generally recognised, but not by all Labour Members. However, there is a glimmer of hope that recognition is coming. The Secretary of State spoke about British Coal being a supplier of choice and said that it is important that there is a free market in coal. I was extremely surprised, therefore, to hear that generators have said, and I think that I have heard right, that they do not intend to buy exclusively from British Coal, regardless of economics. Surely what is sauce for the goose is sauce for the gander. If they intend to achieve the best value for money, they must allow British Coal that same opportunity. This correct approach for British Coal has been endorsed by the electricity supply industry. I am sure that that approach will be supported by the chairman of the East Midlands electricity board.

Column 780

A policy of the carrot and the stick is required. Turning round an unprofitable, unproductive and demoralised industry takes much time, but as long as that turnround is being achieved, the industry deserves to be given the time for which it has asked. It must know roughly how much coal will be needed by generators over the next five years. After that, the UDM calculates that the industry will be sufficiently reformed, productive and successful to take on all comers and have no fear of foreign competition.

In supporting my right hon. Friend's excellent amendment to the neanderthal Opposition motion, I do not ask him to intervene in commercial negotiations, but I hope that he will point out that, just as we expect British Coal to compete on its merits, so we expect it to be allowed to compete for all generators' coal requirements and not be frozen out of a part of their market. That is required in order to ensure the future stability of the distributors, the generators, the coal industry and the public.

In addition, the desirability of any form of dependence on foreign coal is now looking particularly shaky, for the reasons expressed on both sides of the House. There is no such thing as an organised market in foreign coal. The Amsterdam-Rotterdam-Antwerp market is not a true spot market. Coal is traded in dollars and at the moment the dollar is, to say the least, a fluctuating currency.

China has been mentioned. It has taken on some long-term contracts, but it has failed to deliver. That country has major infrastructure problems and there are also tremendous problems with its port handling. Later this year it may even have to import coal. Currently the United States industry is suffering major industrial disruption and it may be hard pressed to meet its internal demands. British Coal was riddled with political involvement, strikes, appalling industrial relations and a complete lack of commercialism. Since the strike it has produced the same tonnage with roughly half the manpower. The cost per gigajoule in Nottinghamshire is £1.42 ; it has come down from nearly £2. Those arguments, quite apart from a debt of loyalty that the country owes to the UDM, underline the desirability of a soft landing for the industry and a defined period of time for continuing reconstruction and adjustment.

Recently, the Secretary of State addressed the UDM annual conference. He cannot have failed to notice that the UDM fights just as hard for its members as any other union, but it looks forward to the future and not back to the past. I regret that the union is opposed to privatisation, as nationalisation has been the curse of the industry. I hope that miners will talk to their colleagues in the steel industry before making up their minds about the merits of privatisation. The leadership of the UDM is, nevertheless, determined to ensure that its members get an outstanding deal if privatisation goes ahead.

I wonder whether my hon. Friend noticed the agenda at that conference, which dealt with matters such as the importance of free shares for miners if privatisation takes place ; pensions payable with a lump sum at 50 years old ; creative schemes such as that at Bilsthorpe ; and plans to develop a mothballed pit with the creation of nearly 1,000 new jobs.

Did my right hon. Friend hear the words of the president of the UDM following its deal with British Coal last autumn concerning six-day working? His words are most important. He said :

Column 781

"This agreement is necessary and in my opinion will protect the jobs of many miners and the future of the mining industry. The agreement will allow us to compete with any foreign competition and is yet another demonstration that the UDM are working for, the future while other unions are living in the past".

But the NUM remains immune to common sense and refuses to accept six-day working.

British Coal and the UDM face great challenges and great difficulties. They need to achieve economic viability, to adapt to electricity privatisation and to face up to the environmental problems about which we have heard. They must also face up to the privatisation of the industry. The men whom I met on my recent visit to the Gedling pit are not interested in the politics of coal mining or in the past. They want a healthy industry where their hard work and skill wins them a secure future and a decent wage.

I hope that we shall soon see a fair deal between British Coal and the generators based on some of the realities that I have raised tonight.

Several Hon. Members rose --

Mr. Deputy Speaker : Order. I can see six hon. Members seeking to catch my eye. I understand that the Front Bench spokesmen will seek to wind up the debate at 9.30. The arithmetic will be obvious to those hon. Members.

9.8 pm

Mr. Peter Hardy (Wentworth) : I shall be brief. The thing that concerns me about the speeches of the hon. Members for Gedling (Mr. Mitchell) and for Sherwood (Mr. Stewart) is that they do not share my view that the industry is contracted to the point where the sooner there is one union for mineworkers the better. That would certainly not suit either their own or their political book.

I want to contribute partly because I represent the National Association of Colliery Overmen, Deputies and Shotfirers, which has its conference in Cardiff this week. That association is extremely anxious because, although it has heard the platitudes from Ministers, it knows that, despite the fact that large sums of public money have been invested in the industry, that is no guarantee that the Government will manage the industry in the national interest, no guarantee that the Government will ensure that taxpayers' money is properly safeguarded, and no guarantee that the Government will try to persuade the electricity industry to use British Coal in which they have invested large sums of money. That is no guarantee that this country would not be exposed to the consequences of a dependence on coal imports. Apart from the retention of jobs and

self-sufficiency, we have an obligation to sustain industrial capacity, and our mining engineering and equipment industry could be greater and more important. However, it requires a substantial home base and I fear that that home base is contracting.

That base has contracted in my area. The Minister will boast that not a man has been made compulsorily redundant. That is so. Their morale has been destroyed deliberately, so that they have wanted to get out because they have felt fearful that, no matter how successful their pit, it will close and they may as well take the money now. The operation of the time scale of redundancy payments was engineered and structured to secure that. While the individual has been cushioned against the shock of redundancy, the communities in which the mining industry was of enormous importance have been simply ignored.

Column 782

We are supposed to be having an economic miracle. A few areas appear to have experienced it, but the coalfields of Britain have not. They were the areas with the highest level of unemployment even before the policies inflicted on them in the past three or four years.

The hon. Member for Sherwood talked about representing many pits. When I entered the House, there were more collieries in my constituency than in any other. As my hon. Friend the Member for Rother Valley (Mr. Barron) will be aware, the Boundary Commission removed quite a few of them, but this Government have reduced the number further. Some pits that I lost as a result of the Boundary Commission changes of 1983 remain, but their life expectancy may be reduced, and the work force has contracted.

There is one colliery left in my constituency. It is one of the most successful and profitable in the country, but even that colliery, with a potential for profit and a record of achievement of which the men should be proud and of which I, as their Member of Parliament, am proud, the men are still fearful for the future. That is a ridiculous situation and a comment on the farcical policies now followed. I see that the hon. Member for Tatton (Mr. Hamilton) is in his place. Some Conservative Members seem to be far more interested in the South African industry than in the British industry. Forty-two Conservative Members have signed an early-day motion about the South African coal industry and 16 of them have probably been on free trips to the South African coal industry in the past two years. Perhaps that early-day motion accompanied the return to work of the Passport Office and those Conservative Members have now realised that they have an opportunity to go abroad on holiday.

It would be interesting if some of those 42 Conservative Members were to visit a pit in the United Kingdom, especially one of the pits with heavy duty faces which result from the substantial investment about which the Minister boasted. If they make such a visit, perhaps it will dawn on them that it would be remarkably foolish and feckless for us to embark on the course of action that they want to pursue. You will be aware, Mr. Deputy Speaker, that many of us from mining areas became green long before it was politically fashionable. We were green because we objected to the disfigurement and destruction of our environment. We became concerned about the lust of Conservative Members to see as much opencast mining as possible, in the hope that it would be followed by privatisation, so that profits would be made in other parts of the country from the rape and exploitation of areas such as mine. The removal of our publicly owned enterprise should persuade the Minister that, if the Government are concerned to be a Government of one nation, they will have to recognise the bitterness and anxiety about future opencast mining, which we would be expected to tolerate. If the Government close our deep mines, they should not expect the people of the coalfields of Britain to tolerate their surface environment being destroyed as well. We were prepared to support the national interest. We are not prepared to support the profit-seeking greed of a few Conservative Members.

The hon. Member for Hampstead and Highgate (Sir G. Finsberg) appeared to question the approach, tactic and values of nationalisation, and read us the speech that he made in 1947. I know that the hon. Gentleman is

Column 783

fair-minded so I ask him to bear in mind the industry's achievements since 1949. It became the safest deep-mine industry in the world, with more and better industrial training than any other mining industry in the world. Relationships within the mining community developed patchily but sometimes superbly. Imperfect though the nationalisation of the industry may have proved to be, it served this country's interests, not least because 90 per cent. of British Coal's purchases came from British commerce and British business. That would go out of the window with the loss of the market about which hon. Members have been expressing their fears tonight. I urge the Government to renew their endeavours to ensure that the electricity industry maintains its satisfactory and viable level of purchase of British coal. I ask the Minister to accept the argument advanced by my hon. Friend the Member for Sedgefield (Mr. Blair) who said that sterling will certainly not remain at its present level as a result of industrial devastation and the reduction of oil exports. If the Minister accepts that Governments should look beyond the end of their noses, he will recognise the worth and the wit of the Opposition's motions.

9.17 pm

Mr. Neil Hamilton (Tatton) : I am grateful to the hon. Member for Wentworth (Mr. Hardy) and to the other Opposition Members who trailed my speech so generously, although, unfortunately, they do not seem to have been very successful in attracting my hon. Friends into the Chamber.

I am sorry that the hon. Member for Sedgefield (Mr. Blair) has temporarily left his place. He imparted the most unusual flavour to the debate by introducing some literary references--for example, to Lord Byron. That suggests to me that his speech was vetted by the right hon. Member for Blaenau Gwent (Mr. Foot), who is known to be one of the foremost experts on that great poet. The hon. Gentleman's speech certainly had all the characteristic vagueness of the speeches of the right hon. Gentleman, but without the romance.

In reflecting on the hon. Gentleman's speech I was reminded of Byron's description of Don Juan :

"He was the mildest manner'd man

That ever scuttled ship or cut a throat,

With such true breeding of a gentleman,

You never could divine his real thought."

I thought that that was particularly relevant to the hon. Gentleman's speech. We heard nothing from him about the Opposition's ideas for the future of the industry. He had the gall to accuse the Conservative party of looking to ideology and vested interest in its policy on coal. If there is one charge that could not be laid at our feet, it is that we take an ideological view or seek to protect vested interests. That is precisely the Labour party's policy on coal.

The hon. Gentleman also had the gall to accuse us of seeking to put the industry in a position to grasp profit from captive consumers. But what happened in the 40 years of nationalisation? The legal structure of the industry, coupled with successive Governments who were unwilling to grapple with its problems have allowed it to extract huge sums from the taxpayers and consumers--unwillingly, and by way of taxation and higher prices than were necessary. In our privatisation policy, which I greatly

Column 784

welcome, we seek to restore to the coal industry the freedom of the market so that consumers, rather than vested interests, can rule the day.

Several Opposition Members, including the hon. Member for Pontefract and Castleford (Mr. Lofthouse), accused us of seeking to bash the coal industry. If we have been bashing the coal industry for the past 10 years, we have been using the most extraordinary weapon to do it. Our weapon has been the cheque book. Have we really damaged the coal industry by giving it £10 billion in grants and £6.5 billion in investment? It is the most massive investment programme for the industry during the post war period. If a crime has been committed by successive Governments, it has been to demand money with menaces from the taxpayer and the consumer. The end of that criminal activity, through privatisation, will massively benefit the people of this country.

The truth is that 40 years of nationalisation have proved a disastrous failure. It has not been in the interests of the miners, because the number of men employed in the industry is now a small fraction of what it was in the immediate post-war period. It has not protected the industry against the inevitability of contraction of output, because output is very much smaller than it was in the immediate post-war period.

I wish that Opposition Members would come to grips with the realities of the international energy market, because that is the only way in which the future of the industry and the jobs that go with it can be sustained. Coal is a fossil fuel--and, unfortunately, the industry and the country have been faced with a fossil union in the National Union of Mineworkers, which over the years has set its face against every beneficial change that would have been in the interests of both the miners and the industry. Even now, after the most disastrous strike--during which, because of its irresponsible activities, it virtually destroyed itself and many pits that might otherwise have survived--it is still opposing such forward-looking policies as flexible working and the six-day week, upon which the profitability of some pits and the opening of new pits depend. There has been a fossil party in the form of the Opposition, who have danced to the tune piped by Arthur Scargill and, it seems, still do so-- [Interruption.] Opposition Members sit here tonight trying to defend their vested interests. They are certainly not defending the vested interests of those who, over generations, have supported the Labour party in the belief that in so doing they were supporting the interests of the coal industry.

We are not here simply to debate what is in the best interests of a particular section of the population or a particular section of British industry. We should be debating the national interest, which depends on the cheapest possible source of energy consistent with strategic requirements. There has been a sense of unreality in the speeches of Opposition Members. They spoke about the freeing of the energy industry, especially electricity generation, as tolling the death knell of the industry, as though it will import all its coal requirements, regardless of the strategic and long-term implications. No sensible company, which is in business in the long term and must make a profit to survive, will base its decisions on such short- term considerations. The importance of the freedom to import is that, at the margin, it will exercise a

Column 785

considerable discipline on the British industry to ensure that its costs are as low as possible so that it can be competitive. I rise to the bait put in front of me by the hon. Member for Wentworth (Mr. Hardy) about South African coal. There is nothing horrific in the fact that we may import some South African coal. If, by doing so, we reduce the energy costs of British industry and, in the process, provide jobs for black workers in South Africa, there is surely nothing wrong in that. I am not suggesting that those imports will amount to anything very much in comparison with the total coal burn in this country. They will always be marginal. However, if they amount to even 10 or 15 per cent. of our total coal burn, the beneficial effects will be widely felt.

Privatisation offers enormous scope to improve the position of the coal industry and to remove the constraints of political interference from which it has suffered so much during the past 40 years. I hope that my hon. Friend the Under-Secretary will agree that it is a shame that we have to wait until after the next general election, which we certainly intend to win, in order to implement our privatisation policy. Action can be taken in advance of privatisation without prejudicing the public sector.

Mr. Alan Meale (Mansfield) rose --

Mr. Hamilton : As it is 9.24 pm, I do not have time to give way, because I hope that one other hon. Member, perhaps the hon. Member for Mansfield (Mr. Meale), may be able to make a speech.

Opencast production is constrained by legislation. The licensed opencast producers are limited in what they can produce, both by tonnage limits and other controls, principally because British Coal is both the regulator and a competitor in the market. I should like my hon. Friend the Under- Secretary to invest coal in the Crown before the next general election so that British Coal no longer has the inevitable conflict of interest of deciding who will produce, and at what price the royalty should be set. That would be an important fillip to a part of the British opencast industry which will wish to be a major player in the market after privatisation.

Therefore, the coal industry has nothing to fear from privatisation so long as the miners who work in it, their union representatives and their other representatives of different political persuasions look to the future of the industry as being based on satisfying the demands of the consumers. That is the surest foundation on which to base a successful industry. After privatisation, the coal industry's future will be good and, therefore, I congratulate my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary on having had the vision and courage to bring forth this, the greatest of all privatisations.

9.27 pm

Mr. Alan Meale (Mansfield) : I wish to talk about Conservative Members' constant references to the Government's good work in relation to the coal industry. I represent a constituency which is at the heartland of the coal mining industry--Mansfield,

Nottinghamshire--in which the headquarters of the Union of Democratic Mineworkers and the National Union of Mineworkers are located. It is about time that Conservative Members,

Column 786

particularly those who are from Nottinghamshire, stopped rubbishing the miners of both unions in the Nottinghamshire area.

Those miners know at first hand exactly what the Government have done to the mining industry and they know that every time Conservative Members open their mouths as they have been, all they do is to conjure up fires between the different groups of workers. It is no good Conservative Members saying that they know and understand what is happening, and even smile about it.

We in the Nottingham area are currently spending tens of thousands of pounds via social and other services throughout the county, and in education programmes both voluntary and statutory, to try to douse the flames created by the mining strike of the early 1980s. It is about time that Conservative Members stopped rekindling those flames just for the sake of political votes at election times. Instead, we should be concerned about the people from those mining communities and what we can do to help them obtain and retain jobs in their communities.

Today, the Secretary of State mentioned the mining strike. He is the least qualified to come forward with such arguments. If he is concerned about Nottinghamshire, he should do more than visit it once in a blue moon, and call in at Nottingham to speak to those at the chamber of trade who represent a minority of people in the county. The Secretary of State raised the subject of the Government's good housekeeping. Conservative Members also mentioned harassment, which occurred throughout the Nottinghamshire coalfields in the form of the loss of 16,000 mining jobs, the closure of pits, the rundown of communities and the lack of investment because there was no structural plan for investment in new jobs throughout the county. Speaking of good housekeeping, today I received a reply from the Minister responsible for coal. I had asked him how much the Government had spent on the privatisation of electricity supply. In 1987-88 they spent £0.8 million on financial advice in connection with the privatisation. In 1988- 89 that rose to £5.5 million, and this year the Government have set aside £26.5 million for outside advice on the privatisation of a public industry. It is a disgrace that there should have been a 3,000 per cent. increase in the spending of public money on the privatisation of a public asset. Finally, Conservative Members representing the Nottinghamshire area should stop their party political battles and should stop putting out press releases asking where particular Labour Members were when there were votes on the Associated British Ports (No. 2) Bill and on similar legislation. In votes on motions such as tonight's, they should vote with the Opposition and support the mining communities in Nottinghamshire.

9.31 pm

Mr. Kevin Barron (Rother Valley) : I must tell my hon. Friend the Member for Mansfield (Mr. Meale) that I hope that many hon. Members on both sides will take to heart what he said about the prevailing social conditions in the Nottinghamshire coalfield, which stem from the industrial dispute of 1984-85. All of us can learn lessons from the problems that still exist in that area.

I must tell the hon. Member for Sherwood (Mr. Stewart) that he was out- jumped on the restart scheme--his claim to fame--because a few months before he

Column 787

mentioned it in the House, Opposition Members had already--last July--brought up restart in the context of British coalfields. If he can derive any comfort from this, we intend to look into an extension of the restart scheme to cover ex-Tory Members of Parliament in the Nottinghamshire area in years to come.

My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) touched a nerve earlier tonight when he mentioned what the Minister's civil servant said said when giving evidence to the Select Committee on Energy two weeks ago. The Secretary of State jumped up and tried to explain in detail what the restructuring grant meant. I was present to hear the evidence, and what it meant was plain : at least 15,000, to judge from last year, when the figure given was 2, 000 or 3,000 and we ended up with almost 8,000. Who knows what this year's amount will be? The events of the next few weeks will determine it.

The hon. Member for Hampstead and Highgate (Sir G. Finsberg) was quite right to read us his speech of 1947. It showed what has happened in the intervening years since the time when he worked for two years in the industry. There have been massive changes in the past 40 years. I was pleased to be part of the industry for 20 of those years--a time in which the industry, within the public sector, became one of the best respected deep coal-mining industries in the world.

These reflections shatter the arguments of the hon. Member for Tatton (Mr. Hamilton), who brought us his customary historical view of the industry-- nothing in the past 40 years has been good because the industry has not been in the private sector. On both occasions this century when this country was attacked from outside, the first thing that the Government did was to nationalise the coal industry so that we could fight those who threatened our existence.

The implicit question behind the motion tabled by my right hand hon. Friends and myself is whether this country will begin once again to import large amounts of its energy supplies or whether it has learnt the lessons of the past and will support an indigenous coal industry--one that not only supplies coal securely and at the right price but protects the balance of payments and, despite the job losses of the past few years, still provides direct employment for some 100,000 people.

Throughout the world, coal producers negotiate long-term contracts with their electricity generators. Obviously, that makes good sense on both sides. If one wants to see the real world of privatised electricity, one need only go to the United States. Companies there own the generators and the coal mines. Companies will not build generators or sink mines unless they have contracts of 20 to 30 years. In this country, people thought that the privatisation of the electricity supply industry would replicate the real privatised generators of the world--and that could have happened.

British Coal was able to make an unsurpassable offer to the successor companies of 10-year contracts within the retail price index. People will remember that such a contract was sounded out in January. However, between January, when that 10-year contract was offered--perhaps the best on the energy market--and now, there has been an intervention by the Department of Trade and Industry and the Prime Minister about what was then thought to be the

Column 788

correct lifeline of a contract between the generators and the fuel suppliers. The Prime Minister put an end to those contracts. It was first of all thought that the Prime Minister and the DTI had insisted that coal supply contracts should be signed for only between six months and three years. Even the generators, fighting their corners, thought that that was nonsense. The Prime Minister, however, had to be appeased, so the compromise was reached that the contracts should be between one and five years.

The Secretary of State has recently made a number of statements about the Government wanting to see free market negotiations. It is all very well for him to talk about free market negotiations, but the stipulation by a Government Department, and I understand by the Prime Minister, is that contracts should be for between one and five years. In fact, the Secretary of State said that he would not force customers into long-term contracts with British Coal. That is true, because the Government are stopping British Coal negotiating what anybody would call long-term contracts for the supply of fuel into the generation companies.

What appears to be missing from the Government's calculations is an understanding of the realities of the coal-mining industry. If contracts with British Coal should run for only five years, on what criteria could the industry make judgments about future investment? The Secretary of State and many Conservative Members have made great play of the £6.5 billion capital investment in British Coal in the past 10 years. Will the Secretary of State tell us whether any industry or the Government would have made the investment in Selby or Asfordby without a predetermined market for that coal?

What will happen in future when the only contract possible will be for five years, but it can take anywhere between five or 10 years before a fuel source is brought on in such massive mines as Selby or Asfordby? The Government's imposition of short-term contracts on the industry is to enable the fulfilment of the Prime Minister's dream of a Britain without coal mines or miners. It is to give time to those who would replace British coal--as my hon. Friend the Member for Easington (Mr. Cummings) said--with coal mined in Colombia, South Africa, Australia or Poland, and to prepare the facilities for its large-scale importation. That is the reason for the five-year contracts.

The recent fall in sterling against the dollar has meant that international coal prices are increasing. It can no longer be asserted that British Coal cannot compete in the international market, and many experts say that it could and does now. By encouraging the myth that imported coal is cheaper, the Government are doing a great disservice to the British coal industry and to the country as a whole. We know that the international energy markets are wildly unpredictable and that that can put Britain's industrial competitiveness at risk--or what is left of it since the Government came to office 10 years ago.

British Steel now imports seven out of every eight tonnes of coal that it uses. That did not use to happen. Ten years ago, it imported hardly any coal except when that was necessary. It took a determined line and now imports seven out of every eight tonnes of coal. How will the change in the pound-dollar rate affect British Steel now? For how long are its supplies assured? Are the Government prepared to allow the uncertainty of supply

Column 789

which results from transferring from home- produced coal to imported coal to affect the electricity supply industry in the way that it will surely affect British Steel?

Despite the Government's amendment, the Secretary of State has shown that he will take no steps to secure the long-term future of the coal industry. He was quite embarrassed today when it was revealed in the debate that 60 million tonnes is the figure for the future market for British Coal in this country. I challenge the Secretary of State now. I will give way to him if he will tell us that British Coal will be allowed to fight evenly and competitively for every tonne of coal in the market for electricity generation over the next six months. The Secretary of State will not rise to that challenge. The generators, British Coal and everyone else know that the Government are determined to take markets away from British Coal no matter how much imported coal costs. The Secretary of State's silence speaks volumes about this.

I have quite taken to the hon. Member for Gedling (Mr. Mitchell) since he became a Member of the House. I hope that he does not feel that this compliment will be followed by an attack on his local Conservative association. He made a good contribution to the debate ; he referred to the positive aspects of what is happening in British Coal, and many hon. Members on both sides of the House share his feelings about them.

The hon. Member for Gedling has evidence in the Secretary of State's refusal to rise to my challenge that the Government are deeply involved in ensuring that British Coal loses its contract irrespective of the price for the 10 million tonnes or 15 million tonnes to which I have referred.

Instead of awarding the British Coal work force a Queen's award for industry for their 90 per cent. productivity increases, the Government appear to be rewarding them with the prospect of more job losses. Instead of applauding British Coal's contract, which offered coal for 10 years at prices related to the RPI--an offer which is not matched anywhere else in the world for any form of energy--the Secretary of State voted for the construction of port facilities designed specifically to import coal into this country.

Mr. Parkinson indicated dissent.

Next Section

Home Page