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Column 58no intention of allowing them to do that. The union representatives have told me of the possibility of another private interest taking over the pit. British Coal has said that it is not interested in holding discussions on that matter.
These examples reinforce the case for changing the basis on which licences for coal are issued. They underline the idea that British Coal is not a fit and proper custodian of all the nation's coal assets. It may well be the right custodian of the majority of those assets and it should be the major producer of coal in the foreseeable future, private or public. To have a more commercial approach and the possibility of exploring different methods of extracting coal and different approaches, we must remove control over licensing from British Coal as a matter of urgency. I was disappointed when the Secretary of State seemed to say that this could be left until later. I have given examples of what is happening now. Later will be far too late, because the pits will have been abandoned and irretrievably lost.
Coal reserves are not monitored on a dynamic basis in the way that oil and gas reserves are monitored. Every year, the Department of Energy produces an oil and gas Brown Book with a statement of probable and possible recoverable reserves from the North sea. Yet the stated recoverable reserves of Britain's coal industry have not been altered in many years in spite of the fact that many pits have been closed and that, realistically, many of those pits can never be reopened commercially.
It should be a requirement for British Coal in its annual report to say how many reserves that could have been viable have been abandoned irretrievably. That would enable us to make a strategic decision on whether we should find some other way to keep some pits open while ensuring that the industry operates competitively. It may be worth while to say that we shall pay a subsidy, as a separate fund, to maintain pits because the long- term value of the reserves will become apparent in five, 10, 15 or 20 years and there may even be private investors who are prepared to take a long- term risk on that. We should not simply allow British Coal to decide that it will abandon reserves irretrievably because they do not suit its short- term requirements.
The possible expansion of opencast mining is another important issue. It is clear that there is cross-party controversy on the matter. Opencast mining in a densely populated country such as ours is environmentally damaging and causes great opposition in the areas in which it takes place. We should not cheerfully say that we should go ahead with opencast mining because we must compete with the Australians and with the Americans. They have far more extensive areas of remote land where opencast mining can be carried out cheaply and with less immediate environmental impact. The upgrading from 25, 000 tonnes to 250,000 tonnes is a big bite, and if substantial conditions are not attached it could lead to considerable devastation. We shall pursue that point in Committee. The Government should give us some idea of how opencast mining will be regulated. I have had discussions with representatives of the mining industry, and I have also witnessed the rather tribalistic way in which opinions divide. In Scotland, we have faced the virtual destruction of our mining industry over the past few years. Before the miners' strike, there were 18,000 miners in Scotland, whereas there are now only 1,500. Almost all our pits have closed and one or two
Column 59have been mothballed. To insist that we do not change the basis on which we operate the industry against a background of enormous reserves of low-sulphur coal in which British Coal is not interested is a travesty for which a future generation will not wholly forgive us.
The Bill should be passed, but it should be amended radically. It is unfortunate that, in introducing the necessary financial restructuring of the coal industry and in recognising that the licensing rules should be changed, the Government did not take the necessary radical step of transferring ownership back to the Department of Energy and ensuring that private developers, miners' co-operatives or any interest other than British Coal could feel that they could apply for a licence on a fair and competitive basis and not in circumstances in which they would effectively be done by British Coal which, with its short-term planning, has no interest in allowing competitors to enter the market.
Mr. John Hannam (Exeter) : The hon. Member for Gordon (Mr. Bruce) supported the Bill, but he made some important points which should be considered carefully in Committee. I support his point, especially about the need for change in the licensing arrangements, which is valid and necessary. Like him, I welcome the Bill as a necessary step towards creating a coal industry which will be properly equipped to compete in the energy supply market in the next 20 years. Whether British Coal is a public sector corporation or a private sector public limited company is not relevant to today's debate and, like other hon. Members, I am amazed that the Labour party has chosen to oppose the Bill on Second Reading.
I hope that the time is near when our coal industry will be a successful private sector extractive industry, selling good coal at competitive prices throughout Europe, but as we come to the close of the 1980s we must be careful not to draw a complete energy picture which looks too far into the future. I have been involved with energy matters throughout my parliamentary career, and I have seen oil prices quadruple, then double, then collapse. I have seen nuclear power suddenly become the least favoured electricity generating source recently and I have seen gas become the most favoured source for electricity generation. I have, therefore, become a staunch supporter of Murphy's law--that if anything can go wrong, it certainly will.
I have been a member of Committees on successive Coal Industry Bills in the past 15 years during which time various Ministers have proposed increased grants and borrowing limits for British Coal. I recall the general theme of speeches made by Front Bench Members from both parties, which was that this was the last time that we should see such huge increases in subsidy.
It is not all that long ago that we were told that oil reserves were running out, that electric cars would take over and that gas was so scarce and expensive that it should be reserved and not used as a fuel for the generation of electricity, but only as a direct premium fuel. Coal was fading from the scene, its primary role in electricity supply being taken over by cheap, clean, safe nuclear power. That was the picture not many years ago.
Column 60Finally, we were also told that bigger meant better and that the bigger the power station, the more efficient and less expensive its electricity output. All those shibboleths have been tipped up and destroyed one by one. As a result of the electricity privatisation programme, the role of nuclear power is being re-examined in the light of new market costings, replacing the previous system of public sector discounts and write-offs.
We approach the next decade seeing the emergence of a new programme of smaller generating stations using gas, coal, oil and wind power, rather than the large nuclear pressurised water reactors and the large coal-fired stations. However one looks at all the energy equations, it is becoming certain that we are changing from a producer-led energy market to a consumer-led energy market. There lies a rub in that for coal. The world has also now woken up to the dangers to our environment if we continue to burn fossil fuels in the inefficient and polluting ways that we do at present. We are having to reduce the use of a generating system which is comparatively clean--that is, nuclear power--and we are left with a reliance on fuels which, if we do not find methods of cleaning them, will produce acid rain and greenhouse gases at an ever-increasing and destructive rate.
We must consider two alternatives ahead of us. One is to burn coal only in power stations fitted with flue gas scrubbers and control systems to reduce sulphur and nitrogen emissions, and to use the fluidised bed coal burning system. The other is to increase energy conservation dramatically. Either alternative will involve increased costs and increased prices because, as we know from experience, cleaning systems are expensive and conservation works only if there are substantial price incentives.
The increased reliance on gas, oil and coal as our main feedstocks will inevitably result in rising prices as those fossil reserves are depleted. Some time in the next decade or so, nuclear power will inevitably come back into its own as a comparatively cost-efficient fuel.
In the context of the Bill, however, we are considering the future of coal. I welcome the realism that my right hon. Friend the Secretary of State has introduced into the energy policy debate with his decisions on nuclear ordering, his requirement for reasonable contracts for coal burn after privatisation and his enthusiasm for energy efficiency. British Coal is close to becoming a profitable, competitive industry after several decades of contraction. There have been huge investments by the Government, running at some £2 million every working day, and firm and positive leadership of the industry has resulted in a near doubling of productivity. But in the light of the accumulated losses, now approaching £5 billion, which is more than the corporation's total assets, it is essential that the financial restructuring proposed in the Bill should take place. Clause 1 provides for ad hoc deficiency grants to eliminate British Coal's accumulated historic losses as at 31 March next year. If that were not done, the annual debt interest would amount to nearly £600 million, to add to the basic insolvency of the corporation. That is why I welcome clause 1.
Clause 2 extends and increases the grants available for continued restructuring and redundancy payments. The fact that the industry has been able to slim down its work force and make vital productivity improvements in recent
Column 61years is largely due to the generous redundancy schemes being offered. It is important that we continue with voluntary redundancy efforts.
As we know, the contraction of the coal industry is a Europewide phenomenon. More than 1 million jobs have been lost in the European industry in the past 30 years. The European Commission has now recognised the need to help coalfield communities to adapt to the changes and is creating a new initiative known as RECHAR which will make £200 million available to help areas such as those referred to by the hon. Member for Gordon.
Clause 4 deals with the licensing of private mines and open-cast production. I welcome the employment prospects that that will produce, especially in declining coalfield areas such as Scotland and south Wales. The smallest mine that the Coal Board operates employs 250 men. The gap between that figure and the maximum of 30 men hitherto allowed in a privately licensed mine is far too wide. The new limit of 150 men makes much more sense, and I welcome it as a job-creating measure to help areas where big pits will inevitably be closing. I agree with those who argue that the Department should become the licensing authority in place of the Coal Board.
I believe that the Bill will be of great help to the coal industry as it faces up to the future. The main challenge will be the challenge of meeting environmental requirements. In that context, I hope that every support will be given to cleaner and more efficient use of coal, using combined heat and power schemes and the fluidised bed systems. I know that my right hon. Friend the Secretary of State regards energy efficiency as one of his top priorities. The Bill will lay the basis for a competitive industry but will also give the Government the main responsibility for providing a framework for the best use of our coal reserves. I hope that the House will agree to give the Bill its Second Reading.
Mr. Ronnie Campbell (Blyth Valley) : I was a miner for 27 years, and I am surprised by some clauses in the Bill. I do not, of course, oppose the writing off of British Coal's debt. I am sure that if that were the only purpose of the Bill all of us would support it. But the Bill is a double- edged sword, and it has some clauses with which we disagree.
We must ask ourselves what the future holds for the coal industry. We have watched the Bills promoted by Associated British Ports go through the House with the Government's support, and we have witnessed an increase in coal imports, especially from South Africa. We know of the interests of some hon. Members who have been involved with those private Bills and of the trips that they have made to South Africa, ostensibly to see how the South Africans mine their coal.
Those imports pose a threat to the north-east of England, where I was a miner for many years. Among the mines in the leaked list are Murton, Dawdon, Wearmouth, and Westoe, where some of the threatened 30,000 job losses may take place. Those losses will result as South African coal is brought up the Thames, and the north-east will suffer once again. If any area has been hit hard by pit closures and job losses, it is the north- east. Our mines and miners in the north-east are the most efficient in the country and produce the cheapest coal, but that makes no difference to this Government, because they have a
Column 62one-track mind. They want to help their friends in South Africa and elsewhere to produce cheap coal, irrespective of the jobs that will be lost in this country.
We must ask ourselves, "What is cheap foreign coal?". It will be a problem not only in the north-east but in the constituency of the hon. Member for Sherwood (Mr. Stewart). He, too, will find foreign coal coming up rivers in his constituency and his pits being closed. Is the cheap foreign coal subsidised? When we ask the civil servants, they cannot tell us, and the lads in the Library cannot tell us. We even telephoned the South African embassy and asked what subsidy the coal coming into this country attracted. It does not come from South Africa to Britain direct but goes first to the Netherlands, but we know full well that it is South African coal. Because the subsidy on South African coal is a hidden subsidy, we are fighting in the dark. Australia does not subsidise its coal ; we know that for a fact, because it is mainly opencast coal. We know, too, that Colombia subsidises its coal and that its industry is heading for economic trouble.
Because the Government encouraged the proposals in the Associated British Ports Bills and this so-called cheap foreign coal, our coal imports are unstable. We are relying on unstable countries for our supplies. Once the Government have closed pits in my constituency and in Nottinghamshire, the coal will be lost. The pits will not be reopened--unless, of course, a private entrepreneur wants to open them as private mines. Once a mine has gone, the coal is lost. The pit can never be opened again because the cost would be enormous. When that happens the Government will then carry on bringing in the foreign coal. Their policy towards the industry is two- faced. On one hand, they boast how good they are being to the British coal industry, while on the other they allow the port Bills to be passed and let in foreign coal.
In my constituency, we went through the new review procedure. Ours were some of the first collieries to do so. We have a pit called Bates colliery. It had about 29 million tonnes of reserves of the low-sulphur coal to which the hon. Member for Gordon referred ; the coal was tested and its nature was confirmed. It is true that we have a few other problems there--for example, with water. But we went through the review procedure.
We put our case to the independent chairman and we won it. We were the first pit to win. We were overjoyed. We had a good drink that night, and I shall never forget it. A week later, MacGregor decided to close the pit--so much for the review procedure. Does the Minister intend to do the same with other collieries that win their case? Will he allow those pits to close? The Coal Board closed that pit when the review procedure had concluded that it should stay open and we do not know why. That question has never been answered by any Minister or top-level Coal Board official.
There is a private mine in the neighbouring constituency of my hon. Friend the Member for Wansbeck (Mr Thompson). A lot of my lads who worked with me in the colliery got a job there when our mine closed. I have heard some stories that make my hair rise. When the pit closed I never went down a pit again, let alone down a private mine. One story related to the visit of a mines inspector, Mr. Sellars, to the private colliery. He was down the colliery half an hour and then he came running out and threw his hat on the manager's table together with a list of things to be done. He said that, unless the requirements on that list
Column 63had been dealt with by the time he visited again the next week, he would close the colliery. It is deplorable that a mining inspector should go to a pit, know the state of that pit and know that he could close it there and then, but not do so. Instead, he ran away saying that it had to be put right before he came back the next week. That is what happens in private mines.
Mr. Paterson was killed in a private mine in the north-east. The report on his death said that he was in the wrong place at the wrong time. The rope snapped on the haulage, the tug ran away and killed him. When the inspector studied the rope he discovered that it had been condemned for more than six months. He then found out that the rope had not been changed because its replacement would cost more than £4,000. The miners of the north-east are on the dole, so they are fairly cheap. A pit can get another one of them at no extra cost.
The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer) : The matter of deaths in pits is a difficult subject. The hon. Gentleman is making a coherent and good speech and surely he would not let himself argue that people are killed only in private pits.
Two weeks ago the manager of a private mine went up to the fitter and said, "I'm finishing you this week." That is how they do it in private mines : people get no notice, they are just finished on the spot and out they go. He was finished not because he was not doing his job but because the manager said that he could phone another fitter 30 miles away. The fitter asked what would happen if one of the lads got fast in a machine or got his leg or arm stuck. The manager replied, "Ah, we'll manage. We'll get him out." That is the attitude of the entrepreneurs who run private mines. They are not worried about the miners because there are any amount of miners on the dole, but there is not any amount of equipment available. That is the reality of safety in private mines. The Minister should look at the private mine legislation and at the mining inspectorate to ensure that the inspectors do the same job in the private mines as they do in the mines of the nationalised industry.
There are big opencast mines all over Durham and Northumberland. They are spoiling the countryside and the environment. Obviously I know that opencast mining must take place. I worked in a mine that was always being "sweetened" from opencast mining. The Bill means that more and bigger opencast mines will be allowed. That has already happened in Durham and Northumberland, but once the Bill goes through there will be even more such mines elsewhere.
Mr. John Cummings (Easington) : In common with my hon. Friend, I worked in the industry for 29 years. I am sure my hon. Friend would agree that west of Durham is an area of great outstanding natural beauty. If there is a proliferation of opencast sites and private mines, a most beautiful area will be pillaged by an army of carpetbaggers who will descend on the west of the county. Fifteen miles away we have four of the most modern coal mines in the world. My hon. Friend has referred to two, Dawdon and Murton. I worked at Murton. Productivity at those mines
Column 64has never been higher. My hon. Friend should reflect on the comments made by the Prime Minister in 1985 when she spoke about the enemy within. Does my hon. Friend agree that the enemy within is sitting on the Conservative Benches?
All my life I have been concerned about safety in mines. I have made a number of points about safety in private mines, but I could make many more. It is the Government's intention not to bring the standard of private mines up to that of the mines of British Coal, but to bring the standard of those mines down to that of the private mines.
The Bill will go through, but I must warn the Minister. If there is a disaster in a private mine employing 150 men I will hold him responsible, whether he is on the Front Bench or on the Back Benches. I will hold him responsible if anyone is killed. In this Chamber we often talk about the IRA and the thuggery, killing and butchery that it is about. I must say this to the Minister : "Don't put your head on the block and become like it."
Mr. Martin M. Brandon-Bravo (Nottingham, South) : I welcome the Bill and the happy coincidence that enabled my right hon. Friend the Secretary of State to include in his opening remarks the details of the contract that has been made--or perhaps I should say allowed to be made--between British Coal and the power generators. I do not know whether the contract was made by British Coal or through the Secretary of State, but I welcome it.
As I understand that contract, British Coal will supply 70 million tonnes in the first two years and 65 million tonnes in the third year. Those supplies will preserve the size and structure of British Coal very much as it is now. It will also give British Coal the breathing space it has earned and deserves to plan further ahead. I hope that the Minister can confirm that those figures relate purely to the contract between British Coal and the power generators and that it is still open to British coal to add to that turnover with spot price contracts and with any marginal cost production which it feels is commercially worth while in terms of its long- term plans. If the contract and my reading of it are correct, the compliments of this House are due to the new Secretary of State. The Opposition's whingeing--we have heard whingeing of the worst kind from the Opposition today--is merely opposition for its own sake. The hon. Member for Gordon (Mr. Bruce) was absolutely right when he said that he was appalled that the Labour party could vote against the Second Reading of this Bill which gives so much to the coal industry. The Bill contains clauses which the Labour party would wish to oppose in Committee, as is its right, but to vote against the Bill in principle--a Bill that helps British Coal's finances--is absurd, and opposition for its own sake.
I agreed with one part of the opening speech of the right hon. Member for Holborn and St. Pancras (Mr. Dobson)--his comments about the lack of provision for subsidence in the Bill. That comment has been made by hon. Members on both sides of the House. I am told that subsidence was not included in the measure because it is primarily a financial one. I do not need to stress too strongly that my
Column 65constituents know only too well that it is a financial problem for them. They have been seeking redress because of the subsidence problem for a long time.
In my constituency within the city of Nottingham two pits have been closed for 20 years, but the arguments about subsidence still continue. I still receive correspondence from constituents whose properties suffer subsidence because they are on top of the old Wollaton pit. The Coal Board has a strange way of granting assistance to some, but not to others. Since this House and this Parliament often provide financial compensation for a raft of matters which have their origins in the past and were the fault of no one in particular, it seems strange that there is no provision in the Bill for public funds to support British Coal in dealing with problems, some of which it has had to duck by pleading the statute of limitations. It deserves help with this matter.
We should compliment the Secretary of State because the terms of the contract seem to ensure that the price of electricity flowing from it after the privatisation of the electricity supply industry will be lower under the Bill than it would otherwise have been. I hope that the Minister will respond to that point. It seems as though, happily, there may be a negative movement in the retail price index in terms of electricity pricing. I accept that prices will always rise, but if the deal will help us to keep those rises below inflation, that must be good.
The Minister and others of my hon. Friends have mentioned the number of pits closed. It would certainly be wrong for Conservative Members to seek to duck the fact that pits have closed during this Government's lifetime. It is not enough simply to say that they were also closed under the Labour Administration. We are very conscious of the social distress brought about by closures. If the contract, to which the Secretary of State referred in his opening remarks, gives the industry breathing space and allows British Coal to slow down the closure process, the mining industry has deserved that breathing space. It will take a little pressure off pits which might otherwise be at risk. Such stocktaking is right on commercial and moral grounds.
Conservative Members are conscious of the personal sacrifice made by miners in the east Midlands during the terrible time in 1984 when many of them, at great personal cost, stood out for democracy against what were rightly described as the Scargillian mobs. That is why there are Conservative Members who, against their natural instincts for commercial investment, have consistently opposed the Associated British Ports (No. 2) Bill and will continue to do so. We recognise that we owe a large number of people in the east midlands a debt of honour.
I know that this always produces roars of disapproval from the Opposition, but as my hon. Friend the Member for Sherwood (Mr. Stewart) said, the Associated British Ports (No. 2) Bill would not have received its Second Reading if Opposition Members had been here that first night. For Opposition Members to say that they were slipped that night and given the night off by their Chief Whip was a quick bit of backfilling when they realised what had happened. It is absolutely disgraceful that, ever since then, to put right the damage done that night, Opposition Members have blocked a private Bill which had nothing whatever to do with--
In beautiful parliamentary terms, clause 1 takes 19 lines simply to say that we shall take powers to write off the accumulated debts and burdens of the past. That is great, and my hon. Friend the Member for Bedfordshire, North said, we should not lose sight of the fact that in 1989 terms, £5 billion was written off once before and £5 billion is being written off again in this Bill. If that figure of £10 billion is correct, the argument put forward by Labour Front Bench spokesmen that coal has been subsidising electricity in the past few years, falls down. The public purse has been subsidising coal. I am not arguing whether that is right or wrong, but simply that coal has been massively subsidised for many years.
Clause 2 gives us powers to finance change for the next couple of years, which is right and proper. The Labour party disagrees with clause 4. I find it contentious due to one omission, referred to earlier by my hon. Friend the Member for Erewash (Mr. Rost), the hon. Member for Gordon (Mr. Bruce) and others. I refer to the asset. The coal under the ground, not British Coal, is the public asset. Just as with oil or any other mineral, a licence should be given to extract coal, but it should not be restricted to British Coal. The licence should be in the gift of the Secretary of State, acting on behalf of Parliament. This place, not British Coal, should give the licence to extract coal. I should not be at all surprised if British Coal also felt that this was reasonable. If Parliament rather than British Coal issued the licences, we would get a fair price from British Coal or from private and opencast operators. That seems the right thing to do. Perhaps when my hon. Friend the Minister winds up the debate he will comment on the possibility, if nothing else, of the creation of an independent coal commission, the function of which would be precisely to control the issue of licences.
There is no doubt in anyone's mind that the environmental impact on people living close to opencast mining is appalling. My hon. Friend the Member for Sherwood (Mr. Stewart) gave the technical, chemical and price reasons for the necessity of opencast coal. If the advantages of opencast coal are to be made available to the public through lower electricity prices and through the preservation of some of our deep mines that would otherwise close, then some of the price differential between the cheap opencast and the more expensive deep mining should be used generously as compensation for the small percentage of our people who have to put up with the environmental hassle, the dirt, the smell and the noise of opencast mining. The beneficiaries of that cheap coal should be prepared to pay something towards compensating people who suffer the nightmare of disturbance. It would be quite wrong for the Opposition to imagine that no Conservative Member is worried about safety. Whether it is private-sector or public- sector mining, safety is paramount. Hon. Members have spoken about raising the numbers in private mines to 150. All hon. Members want absolute assurances that that will not result in a diminution of our priorities about safety.
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Mr. Peter Hardy (Wentworth) : I do not wish to follow the hon. Member for Nottingham, South (Mr. Brandon-Bravo), because it would not be appropriate to make a long speech. The hon. Gentleman, the hon. Member for Gordon (Mr. Bruce) and other hon. Members have expressed surprise that my hon. Friends and I are critical of the Bill. I recognise that it provides money for the coal industry, but in essence it is a dishonest Bill, because although the word "electricity" does not appear anywhere in it, the Bill is more concerned with electricity privatisation than with anything else. The Bill tries to persuade people overseas that electricity shares are a good bet because the Government will make sure that coal is supplied at a reasonable price. At first sight, the Government seem complacent about the enormous trade deficit, but they know that they have got the economy into such a mess that they will have to get rid of our current assets to meet current need. They therefore appear to be generous to British Coal.
Having persuaded British Coal to get rid in a very short time of a substantial part of what was its capacity three or four years ago, it is perfectly reasonable that the Government, having forced a situation in which capital assets are virtually sterilised or destroyed, should make some contribution towards making sure that that is reflected in British Coal's finances. They are not taking any great risks, because while they may be concerned to sell off electricity to meet current need, they are quite willing to take only the most short-sighted view and allow Britain to develop a dependency upon imported coal which currently appears cheap. As the incompetence with which the economy is being managed continues, sterling will fall and the price of imported coal will rise. It certainly would rise if we ever developed a dependency upon it. Perhaps the Bill is the beginning of a glimmering of understanding by some members of the Government who accept that point.
I am sorry for the Under-Secretary of State for Energy. The previous Secretary of State has gone to fresh pastures and a new one has been brought in. He, like the river, keeps rolling on. Unfortunately, he was in the Chamber about a year ago when some of his hon. Friends put down questions urging the privatisation of British Coal and the extension of opencast mining and private mines. I asked the previous Secretary of State whether he accepted that the Government had no mandate to privatise coal in this Parliament. I asked whether he agreed that the Government had deliberately eschewed such a mandate and suggested that it was matter for the next Parliament. I am glad to see that the Under-Secretary of State agrees. I asked the Secretary of State to assure the House that since the Government had no mandate there should not only be no privatisation but no significant steps towards it. Some of my hon. Friends will remember that the Secretary of State immediately got up and said that he gave me and the House the assurance that I was seeking. The Bill is quite some evidence of consistency!
I strongly oppose the Bill because I represent and have many close friends in the National Association of Colliery Overmen, Deputies and Shotfirers, the trade union of those charged with statutory responsibility for safety in the mines. The House should note that NACODS is absolutely opposed to clause 4 of the Bill because it recognises, as some hon. Members have recognised, that that part of the Bill will cost lives and limbs, and probably
Column 68a significant number. Hon. Members may think that all that we are doing is increasing the work force of a private mine from 30 to 150, but if they look closely they will see that the 150 refers to the number down the pit at any given time.
Mr. Michael Spicer : I am sorry to keep interrupting on the subject of safety, but the hon. Gentleman is making an important point. Will he take it from me that, sadly, there have been 18 deaths this year in British Coal alone? It is not a question of the private or the public sector but the fact that mining is a very dangerous business.
Mr. Hardy : The Under-Secretary of State will be aware that I do not need to be reminded that the coal industry is dangerous and that there have been too many fatalities and serious injuries in British Coal. It is a disturbing trend. Perhaps the Minister would like to consider the proportion of fatalities and serious injuries which occurred when contract labour was employed. That is an important aspect and deserves serious consideration. I do not suggest for a moment that the Minister is queueing up to kill miners, but the provisions of the Bill will lead to more people being killed and maimed in the new expanding private coal mines.
I should be happy to serve on the Committee which is to examine the Bill, but I should like to make one suggestion to the Minister which I hope that he will consider seriously. It is that before the Committee embarks even upon the sittings motion it should look at a film made by Yorkshire Television about safety in private mines. That was a carefully documented programme and a serious one. Every hon. Member should see it before discussing private mine expansion. It may be a revolutionary proposal, but I suggest that Conservative Members who will no doubt be clamouring for more opencast and private mines should be educated before they join in any decision making.
Mr. Malcolm Bruce : I do not wish to pursue the matter of safety, although I agree that it is vital and should be a factor in any change relating to private mines. How do the hon. Gentleman and his colleagues react to the idea of miners' co-operatives wishing to take over their own pits and using private capital? The Bill will enable them to do that in a way that they cannot do at the moment. Is the hon. Gentleman and his colleagues against that?
Mr. Hardy : I do not think that that is realistic. I have studied the mining industry for a long time and there have been a number of similar initiatives, few of which have ever come near to fruition. Also, I would be worried about the terms on which private capital was available.
Another aspect of the Bill which I find threatening concerns the proposed extension of opencast mining by a factor of 10. In the original nationalisation of coal, the limit of 25,000 tonnes appeared so that small- scale development did not permanently sterilise small areas of coal. That was a reasonably modest provision. However, we have now reached a proposal for 250,000 tonnes, which is a much larger matter. As the fortunes of farmers decline, I have noticed the hon. Member for Sherwood (Mr. Stewart) becoming more sympathetic towards opencast mining. Perhaps his farm is on the list and he might make more out of coal than potatoes. Perhaps that is why he is optimistic--he is the only farmer I have met who is.
Column 69At the moment, despite the care and competence of the opencast executive, opencast mining is a nuisance and a danger. It causes congestion of local roads and a great deal of noise and disturbance. The opencast executive may seek to minimise that, but I wonder whether those Conservative Members who have been eager for some time to see this step taken would be prepared to see their profits curtailed so that those who live near the opencast sites shall not suffer nuisance and disadvantage. That provision in the Bill is a real threat to those living in close proximity to areas where coal lies near the surface.
This is not the occasion for a long and detailed speech as we shall have to look at these matters exhaustively, and no doubt repeatedly, in Committee. I am concerned that the Government have suddenly decided to provide support for British Coal. There is now only one colliery left in my constituency. When I entered the House, there were 19 collieries in the old south Yorkshire area, which has now disappeared to join the Doncaster area. There are only half a dozen of those 19 collieries left. We have suffered a devastating experience in a concentrated time scale.
The hon. Member for Bedfordshire, North (Sir T. Skeet) talked about land sales, but we cannot begin to improve the hundreds or thousands of acres of derelict land because of the way in which the Government have changed the rules for derelict land grant. That is another aspect that should be considered.
With regard to the Government's energy policy, the example of Kent has already been mentioned. I promised a friend that I would mention the Kent coalfield in the House at the first opportunity. My friend Frank Redman became national president of my association just a few weeks before British Coal decided to close his colliery. It was decided to close the colliery when men did not turn out in full numbers on a Saturday and Sunday, less than 48 hours after a promise of weekend working. That was not a great deal of notice.
However, the point that was made to me, which should also be made to the House, is that even if those men had turned out in full numbers on the Saturday and Sunday, they would not have been able to produce one cobble of coal more due to equipment malfunction. British Coal was looking for an opportunity to end mining in Kent. I believe that it was looking for that opportunity because the Prime Minister wanted an end to mining in Kent, presumably because Conservative Members based in south-east England do not like mining and do not want it on their doorsteps. In Labour areas, we can have opencast mining and private pits and be used as a simple instrument to allow the privatisation of electricity now and the privatisation in a few years of that part of the mining industry which remains because it is profitable.
That is no way to run an industry or a country. The sooner the present Administration's biased and bigoted incompetence is ended, the better. For the Government to pretend that the Bill is something for which we should vote when it represents a profound danger to our constituencies and profound disadvantage to our environment is to insult our intelligence, and it will not work.
Several Hon. Members rose --
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Mr. Andrew Mitchell (Gedling) : The hon. Member for Wentworth (Mr. Hardy) must have had difficulty keeping a straight face during his loud opposition to the Bill. It is an excellent Bill, and I look forward to explaining why.
I am sure that we all enjoyed the speech by the hon. Member for Holborn and St. Pancras (Mr. Dobson), whom all hon. Members came to like and respect in his previous job. He too has a brass neck to raise the question of the Associated British Ports (No. 2) Bill and claim that the Conservative party is behind it. Many of my hon. Friends joined me in the Lobby to vote against that Bill. Approximately 180 Labour Members did not turn up to oppose it. Therefore, the hon. Gentleman should not have made those comments in his opening remarks.
Mr. Mitchell : I am happy to answer that question. The remarkable statistic is that 265 Conservative Members either did not support the Bill or did not vote for it. The hon. Gentleman knows those facts as he was here on that night whereas many of his party were not. The people of Nottinghamshire are aware of that.
The Bill underlines the strong support that the Government have given to the mining industry. It also underlines the two important obligations that remain with the coal industry--that of providing £2 billion for the concessionary coal obligations and £500 million for industrial deafness. A number of former miners in my constituency will be pleased to hear that.
I want the coal industry to mirror British Steel and the progress that has been made there. Far from opposing the Bill, many Conservative Members will ask how we can justify the payment of £4 billion of taxpayers' money enshrined in the initial clauses of the Bill. The justification for that lies in the massive reconstruction that has taken place and the enormous increase in productivity, which has doubled in the past four and a half years. That has been achieved with a reduction of 66 per cent. in manpower, yet the output has been reduced by only 15 per cent. Since 1985, we have seen a reduction of £1 billion in the price of coal to customers at a time when the cost of international coal has increased by no less than 70 per cent. That is a remarkable achievement.
One does not have to look only at the national scene. In my constituency, Gedling colliery has made remarkable progress. It will never make a large profit and has always performed on a wing and a prayer. Anyone who knows the Nottinghamshire coalfield knows how difficult the Hazel seam is. Earlier this year, it was under grave threat of closure. The work force has been reduced from 1,100 to 610 and we now have at the pit an enthusiastic and skilled work force with an average age of 30.
Following the reconstruction, the management set a target of 12,500 tonnes per week, which has been comfortably exceeded. We are now performing at the rate of between 13,000 and 15,000 tonnes per week, and the figure has been as high as 18,000 tonnes per week. Those show that substantial progress has been made locally as well as nationally. That is the justification for the major restructuring enshrined in the Bill.
Anyone who looks at the state of the coal industry and the fact that this year it will have to pay £570 million in
Column 71debt-servicing arrangements will understand how difficult it is to run a business under constraints of that sort. I welcome the major restructuring involved in that.
I want to welcome the interim deal announced today by British Coal in respect of its arrangements with the generators. The Government are to be congratulated on their enabling rather than enforcing role. I hope that it will not be too long before we see much longer contracts of up to eight years, because that is what is required. It is noticeable that this deal will ensure that it is not necessary to leap into another closure programme. British Coal is not talking about closure, and nor are the Government. Only from Labour Members do we hear about closures. No one else says that British Coal is to launch a major closure programme.
Mr. Mitchell : I am sorry, I will not give way because I am under a time constraint. I hope that the hon. Gentleman will understand. The generators also have an excellent deal. Effectively, prices have been frozen over the past two and a half years and now prices will be frozen for another three years, so they will have five and a half years of fixed coal prices on 400 million tonnes of coal. In other words, the generators have managed to secure a great benefit which only British Coal can deliver-- fixed-price coal in sterling. The hon. Member for Holborn and St. Pancras (Mr. Dobson) asked whether the generators will pass on this massive saving to the electricity consumer. We all know that coal is 50 per cent. of the cost of generating electricity and electricity prices should therefore come down in real terms. I calculate on the back of an envelope that they could come down by 2 per cent., and I should be interested to hear whether my right hon. Friend the Minister agrees with that calculation. This is also of key interest to British Coal. In the midlands, British Coal remains the largest customer of the East Midlands electricity board, which is to be found in my consitituency, so it too stands to gain a great deal in the reduction in the real cost of electricity.
It is interesting to look at the cost of producing electricity. At one time I spent a lot of time reading the evidence of the Sizewell inquiry. It was something of a masochistic experience. We now know that electricity produced by Sizewell will cost up to 10p a unit. We know that electricity produced by an AGR, based on historic costs, is about 7p a unit. The new small, environmentally friendly, privately financed--with up to 85 per cent. debt--ventures will produce at a cost of about 3p a unit. In other words, there will be a significant advantage for coal.
We hear the advantages of heavy fuel oil mentioned, but there has been a 70 per cent. increase in the price of that fuel over the past two years. The only heavy fuel oil available in quantity and at low prices is high in sulphur. When looking at international coal prices, I urge people to be careful.
Those of us who, in the early 1980s, did work on international coal prices know how difficult it is to predict the variables, because we invariably got them wrong. Therefore, I hope that my right hon. Friend the Minister will not put his faith in foreign coal. We have seen this year
Column 72alone how much has changed in the provision of American, Chinese, east European and Australian coal. We should note that important point.
Although British Coal continues to produce at above the supposed international market rate, it has made colossal and effective progress. That is why the Government are right to adopt a carrot-and-stick approach to the coal industry. The Bill recognises the importance of the carrot.
My right hon. Friend the Secretary of State mentioned his support for new coal technologies and that too must be right. We must support and develop advanced coal technologies and new coal technologies. These can raise efficiency of generation from coal by 20 per cent., improve the economics and reduce carbon dioxide and consequently the gases contributing to the greenhouse effect. We have to take a sensible and sensitive approach to the environmental effects of the industry.
I am an unashamed believer in the privatisation of the coal industry. I want to see the industry follow the same path as British Steel because that is in the interests of British Coal, the employees, the management and the consumer. I suggest that Labour Members talk to employees of British Steel and see what they think about the matter.
The coal industry encapsulated all that was worst in British adversarial labour relationships. Privatisation will give those who work in the industry a real interest in how well it does. The men who work in the industry used to be alienated from the management, and that is the hallmark of the nationalised sector. Privatisation, by involving all the employees in the ownership of the business, will bring far greater identity with the commercial interests of the business and, a greater acceptance of the reality of the market place and will encourage the work force to work hard when times are good and to work themselves out of trouble when they are bad.
Above all, there are real opportunities for smaller operations such as Bilsthorpe in the constituency of my hon. Friend the Member for Sherwood (Mr. Stewart). Everyone employed there will be able to own shares, commercial money will be involved, there is new technology, it is small and clean, and, above all, the Union of Democratic Mineworkers--to which the country and the industry owe a great deal--is involved.
In support of ventures such as that taking place at Bilsthorpe, I support the Bill strongly and look forward to catching the eye of the Chairman of the Committee of Selection so that I may serve on the Committee which considers the Bill.