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Mr. Terry Patchett (Barnsley, East) : I am pleased to be called to speak in the debate because, even today, my constituency relies heavily on the mining industry. However, in my constituency 29 per cent. of the under- 25-year-olds are unemployed as a result of the Government's pit closure programme since the miners' dispute. I concede that some young people have been involved in such projects as the youth training scheme. For the uninitiated, these schemes allow the Government to present their entrepreneurial friends with cheap labour and to maintain their Victorian values in their attitude to work. They expect these young people to be grateful to the Government for finding them a job. We must tolerate that
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on top of 25 per cent. unemployment. This from the Government who told us repeatedly during the miners' strike that there was not a pit closure programme. History has proved that the House was misled. I welcome the Bill's intention to write off some of British Coal's debt, but I remain suspicious of the Government's motives. It is ironic that a great deal of the burden of debt placed on British Coal was created by the Government forcing on it the pit closure programme. British Coal has to find 30 per cent. of the cost of every redundancy created by that programme, as well as carrying the reduction in the value of its assets. In some cases, so-called unproductive pits have been written off while British Coal is still paying off the interest on money borrowed from the Government to invest in those pits. How stupid can one get?I would like to think that clause 1 was a result of the Government having a conscience over this matter, or perhaps suddenly becoming interested in the future of British Coal. I fear that neither could be further from the truth, as they have not shown any interest in writing off the debt on the many occasions when we have appealed for that. The truth is that they are using taxpayers' money to prepare the industry for privatisation, making it more attractive to their friends on the stock exchange.
The Bill cannot be taken in isolation from other aspects of the Government's energy policy. Electricity privatisation is an example--it is an absolute shambles. The Government had the audacity to try to con investors--their friends on the stock exchange--into taking over the nuclear power industry by guaranteeing them a share of the market when, at the same time, they were singing the song of free competition. However, realising that they could not con their old pals, they withdrew that part of the industry from privatisation. Someone suddenly realised that nuclear energy was costly. Labour Members have been telling the Government that for years, but the Government consistently and happily pursued their policy. That will cost the country dear for generations to come.
We then had leaked documents on the privatisation of the electricity industry. The Government are opening the gates to a flood of imports of cheap foreign coal, and that may cost 30,000 jobs in the British coal industry.
Now we know why the private Bill procedure was so misused by the unofficial whipping of the Associated Ports Bill. Now we know why some Government Back Benchers have been swanning around South Africa as guests of the South African mining industry. Those are the reasons why we must not consider the Bill in isolation.
The Government have shown, by their record of inept bungling and their deceit of the House, that they are not interested in the future of British Coal. It is a scandal that millions of tonnes of coal reserves are being thrown away while the Government flirt with cheap imports.
I thought that we had a huge problem with the balance of payments deficit. I find that difficult to believe, as the Government are working hard to contribute to that deficit by seeking to import coal. Do they have such short memories that they have forgotten the terrible problems that we had when world oil prices shot up, after we had placed reliance on cheap middle eastern oil for our energy resources? We were in a right mess. I thought that we had learnt a lesson from that shocking experience, but the Government are taking us down a similar path again. That is madness.
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We cannot rely on the get-rich-now-and-to- hell-with-tomorrow philosophy of the Government for Britain's energy demands. The House should have a long debate on the gambit of the Government's energy policy before it is too late.I am concerned about the growing tendency for deregulation in coal mining, and its effect on safety. Several of my hon. Friends have also mentioned the subject. Most of our present regulations were established because of loss of life and limb, and not by convincing someone in this House in a debate. I can give a personal example of that.
In 1975, in my own colliery, there was an explosion. During the 24 hours that we spent looking for missing lads, in the hope that they might be alive, we received expressions of condolence from right hon. and hon. Members on both sides of the House. We were grateful for that, but we were more pleased when legislation was changes as a result of a public inquiry into the accident and the problem of degassing the headings. Some of my hon. Friends will be familiar with that.
I would be angry if someone came to the House and talked about changing that regulation on degassing. Every regulation has been changed by a disaster and a public inquiry. We will never convince Conservative Members that they should spend money on safety. Conservative Members have already demonstrated by their watery words that they are intent on deregulation and cutting corners and safety. I have worked in mines and I have seen what happens if one cuts on safety.
I regret that there has been a change of attitude by the management. They think that they are at the top of the tree, supported by the Government, or perhaps local management are frightened by Hobart house.
A few weeks ago there was a fire at Grimethorpe colliery. The work force and the management worked long and hard to contain the fire and thereby saved other reserves. Everybody was full of compliments for the work force that week, but within three weeks the same management was fetching the men in saying, "Your pit's in danger. The reserves are there, but we don't think you've been pulling your weight." People with that attitude would be happy to short cut on safety. If we allow the tendency to deregulate to continue, I am fearful of the consequences for the safety of miners. Therefore, I beg the Minister to consider carefully what I have said.
7.24 pm
Mr. Spencer Batiste (Elmet) : I have always argued in coal debates for the need for a diverse energy policy, in which the coal industry plays the major part--and by coal I mean United Kingdom coal. I see no reason to change my view because of the Bill. I certainly see no reason to change that view as a consequence of the major shifts in the energy industry in recent times--quite the contrary, as I believe that the central thrust of the Bill is important to the development of our nation's industrial base. A diverse energy policy requires coal as its major ingredient. Where I depart from the views of the Opposition is in their belief that one can dragoon customers into taking coal. Customers will come only if the price is right and supplies are secure.
One of our problems is the Scargill legacy. Most people who want to switch to coal would be more likely to do so
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if there were dual or triple sourcing for their supplies, rather than depending upon a union which they believe is renowned for its militancy. It makes no sense for a country as rich in natural coal reserves as Britain to depend on imports to any significant extent. However, one can only resist imports if one makes one's own industry as efficient, capable, productive and profitable as the alternatives. Otherwise one would pass the problem down the line to other industrial users of electricity, who would themselves become competitively disadvantaged.I believe that the Bill will receive widespread support in the House and in Britain because it is a vitally important step towards getting our act together, and helping to set up a coal industry with a secure and viable future based on the fact that it makes a profit, which is a central part of our industrial strategy.
I am amazed that we have heard only words of criticism from Opposition Members so far. During the years that I have been in the House, since the 1983 election, in debates on coal Opposition Members have always said that the coal industry has not enjoyed a level playing field compared with other industries. This Bill will give £5 billion to the coal industry, on top of the £6.5 billion already been put in. Yet the Opposition say that they will oppose it. How can it make any sense for the industry to be relieved of £570 million per year in debt interest payments and for the Labour party to oppose this solution? How can it make sense to those who work in pits where viability is threatened to see the Labour party voting against the money which would make them viable?
Mr. Hood : Will the hon. Member give way?
Mr. Batiste : I will not give way, as I have only 10 minutes. I am sorry, but the hon. Gentleman had a chance to make his speech. Refinancing is an important first step. I hope that what will emerge from it--and I hope that my hon Friend will consider this carefully--is consequent restructuring to ensure that British Coal does not close off any of the options for future privatisation. I make no secret of the fact that I believe that privatisation will better serve the interests of all those who work in and depend on the coal industry. Nor do I make a secret of the fact that I want British Coal to be broken into regional components when it is privatised, so that we shall have Yorkshire Coal plc, as well as Yorkshire Water and Yorkshire Electric. Our regional economy is already beginning to reflect the fact that major industrial players and their headquarters are inextricably bound up with the success of our regions. I want coal to contribute to that as well.
We have all talked of the United Kingdom coal industry as though it consisted only of British Coal, but the British coal industry mines more coal in the United States than here. None of the big companies which mine in the United States can operate here, however, because of the obscure, irrelevant and outdated restrictions on investment by private capital in our domestic coal industry. We have companies which control up to 14 per cent. of United States coal production and would like to invest in a big way here. We also have small companies which could restore profitability to some of the small pits which are closing but the rules introduced on nationalisation mean that they cannot contribute to our
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national prosperity. The Bill marks an important first step towards putting that right. Areas where coal mining jobs have been lost recently could have the opportunity of new jobs.Safety is not an issue, as safety standards will be exactly the same following liberalisation. There will be the same procedures, the same restrictions, the same type of prosecutions of the guilty and even tighter enforcement.
Mr. Hood : Will the hon. Gentleman give way?
Mr. Batiste : No, I have already said that I will not give way. The hon. Gentleman has already made his speech.
With all other privatisations, the regulatory framework which have been put in place have been far more effective in terms of safety and the environment than what preceded them--and coal will be no exception.
There is a great deal of commonality about opencasting among those in the House who have experience of it. I do not think that any of them look with enthusiasm on the prospect of 10 times the present area of land being put to use for opencasting. I accept that opencast coal is needed as a sweetener for deep-mined coal. Anybody who denies that is being hypocritical, as he is denying that coal should be a major ingredient of our energy policy. If we argue the need for coal, we have to accept that a certain amount of opencasting is necessary, but--it is a big but-- environmental issues must be considered carefully in any planning application.
Tipping in opencast sites has not been mentioned, but exercises most hon. Members' minds. Gamblethorpe tip is in my constituency. After years of opencasting, people now face the prospect of years of disruption to the environment as a result of tipping. If a statutory authority were to set down a timetable when an opencast mining application is made, stating what restoration work will be done, when the coal will be extracted and what the community will gain from the facility, so that there is no possibility of someone coming along later and saying, "What a lovely hole--I should like to tip something in it for a few more years," there might be a very different reaction. At the moment, people look out across wasteland knowing how they would like it to be restored so that it can be of benefit to the local community, but facing the prospect of years of disruption, noise and damage to the environment.
Planning for opencast mining is rather like planning for every other major infrastructure programme in that our compensation policy is absurd. It lays down that we shall be niggardly with compensation for those whose environment is disrupted for the greater good of the community, and then we are surprised when they fight like mad to prevent it and plans are deferred for years due to determined resistance. If, like some other Community countries, we were more generous with our compensation, recognised that there would be disruption and that the communities concerned had a legitimate claim to have something put back to compensate for the disruption, we might have a more balanced approach to opencasting and major infrastructure, planning applications.
British Coal's monopoly in relation to opencast licensing merely restricts further the resources available to operators to use for the benefit of the community. However, all the signposts in the Bill are good ones for the future of the coal industry, and I warmly commend it.
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7.34 pmMr. Alan Meale (Mansfield) : We have been told that the Bill will be good for mining communities. The hon. Member for Sherwood (Mr. Stewart), who unfortunately is not here at the moment, said that Labour's opposition
Mr. Gerald Howarth (Cannock and Burntwood) : On a point of order, Madam Deputy Speaker. I think that it is the general view of the House that we want the public to see what is happening in the House. Can you rule whether it is in order for hon. Members to move around the Chamber according to who happens to be speaking? The hon. Member for Bassetlaw (Mr. Ashton) is so intent on getting his photogenic face on camera that, every time a Labour Member speaks, he moves--
Madam Deputy Speaker : Order. That has nothing to do with the Chair. I am neither Whip nor shop steward in the House.
Mr. Meale : I hope that, like a good referee, Madam Deputy Speaker, you stopped the watch during that point of order.
The hon. Member for Sherwood said that Labour's opposition to the Bill is a cruel deceit of the miners. The reverse is the case. The Bill is a cruel deceit of mining communities throughout Britain. The Government have changed the way in which the number of unemployed people are calculated 28 times already. Since June this year, 11,500 miners have been made redundant because of Government policy, but they have not been included in the number of unemployed. The Government are planning another change in the calculation of the number of unemployed people, so unemployed or redundant mineworkers will not be included in any calculation of unemployment after December.
Deceit is the Government's number one priority. Since the last general election, they have moved away from the coalfield communities and denied them even the right to show how bad their plight is. Hon. Members from Nottinghamshire should be honest enough to argue for the correct figures to be given. District councils in Nottinghamshire, such as Ashfield, Bassetlaw, Mansfield and the area represented by the hon. Member for Nottingham, South (Mr. Brandon-Bravo) are trying to get funds from Europe to support their endeavours to get development under way and to reduce unemployment. Because unemployment figures are not being calculated properly, the funding that councils can get from the EEC is put at risk. I hope that Conservative Members will be a little more honest.
I also wish that Conservative Members would stop suggesting that it is only because of the parliamentary Labour party that the Associated British Ports (No. 2) Bill is still proceeding through the House. No hon. Member has a better record than me when it comes to voting against that Bill, but half a dozen Conservative Members
Mr. Brandon-Bravo : On a point of order, Madam Deputy Speaker. Your predecessor in the Chair ruled me out of order when I mentioned that subject. I trust that the rules will be the same for hon. Members on both sides of the House.
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Mr. Meale : I have made my point, and I hope that Conservative Members will not deceive the electorate any more.
The Government have tried continually to deceive mining communities, especially those in the area that I represent. Before the last general election, the previous Secretary of State for Energy said that he had no intention of privatising the coal industry. As my hon. Friend the Member for Wentworth (Mr. Hardy) said, the Government went to the country at the last general election on that basis and came away victorious. Therefore, they have no mandate for legislation to privatise the industry. The Bill represents privatisation of the industry, pit closures in the coalfield communities and another rip-off of the mining communities by the Treasury.
Mr. Hood : My hon. Friend mentioned the word "deceit" earlier and referred to the hon. Member for Sherwood (Mr. Stewart). I do not want to make too much of whether the hon. Gentleman was deceitful, but is it not the case that the Bill, which the hon. Member for Sherwood supports, will close the pits at Clipstone, Annesley, Calverton and Rufford in the Sherwood constituency?
Mr. Meale : The Bill is nothing more than a fattening-up exercise for privatisation of the coal industry. It will benefit only one set of individuals, who are a minority in our society. It will fatten up the people in the City who have already ripped off an enormous fortune from British taxpayers.
The Bill means extensive job losses in the coalfield communities. As my hon. Friend said, it is calculated that the Bill will probably result in another 30 pit closures. Some of those at risk are in the constituency of the hon. Member for Sherwood. He is a fool to support the legislation because it will cost hundreds, indeed, thousands, of jobs in Nottinghamshire.
The Opposition Front Bench has obtained a leaked Cabinet document which shows that the figures calculated by Opposition spokesmen are correct. The document was prepared not by the Labour party but by the Cabinet. It got into the hands of our Front Bench team and I commend them for having obtained it. It suggests that the Bill will lead to 30,000 job losses. Conservative Members have said how wonderful it is that the Government have tied up a contract for all this coal, but nothing has changed. The document also states that a three-year agreement is part and parcel of the contract. [Interruption.] The hon. Member for Sherwood is making signs to the effect that three years will take the Government beyond the election. If he believes that the Government's mandate will be extended, he is living in cloud cuckoo land.
The Bill offers nothing to the coalfield communities. I was saddened when the Secretary of State spoke about the terrible deficit debt that British Coal currently carries. He spoke of a debt of £500 million, but that is not a debt in monetary terms. It is a scandal that British Coal has calculated the figure of debt as a whole, taking into account items such as concessionary coal for widows and retired miners. Do Conservative Members not realise that that coal was negotiated in decades gone by, by working miners, who gave part of their coal concessions and put it into a pool to keep widows and retired miners in fuel? It
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is not negotiable because it was negotiated in years gone by. It is a disgrace for British Coal to include it in its calculations. I am sorry that the Minister of State is not present. I wished to raise with him coal mining subsidence damage about which there is serious anxiety among hon. Members on both sides of the Chamber. The Minister of State has misled the House. Earlier this year he said : "We are reviewing this matter as part of our total appraisal of Waddilove and we have said that we will look at it again before 1990. We shall bring forward the review of the way in which adjudication is conducted and shall review the criteria by which the distinction betweeen the two types of arbitration is made.--[ Official Report, 16 June 1989 ; Vol. 154, c. 1272.]This Bill was the only real opportunity to do that. The Minister misled the House because he has not come back with legislation before the end of 1990. It is incumbent on him to state why he has not brought forward legislation on subsidence. On the same day, the Minister said that he was interested in setting up independent legal advice centres in coal mining areas but the Bill makes no provision for that.
Problems are still occurring with subsidence in my constituency. My constituents are having problems with British Coal. Yet another letter came to me recently from some of my constituents saying that they had a letter from British Coal threatening that unless they accepted £150 to redecorate the whole house--inside and outside--it would close the file.
The Bill is a disgrace. It is yet another rip-off by the Government in favour of their friends in the City. In no way, shape or form is it good for the coal industry. I hope that my hon. Friends on the Front Bench will stick to their commitment to repeal the Bill when we return to power.
7.45 pm
Mr. Den Dover (Chorley) : I am disappointed that Opposition Members are so vehemently against the proposals in the Bill. To write off British Coal's debts and, as my hon. Friend the Minister said, help it to become more competitive with other fuels such as gas and oil is surely a good thing for all workers in the coal industry, whether in deep mines, private mines or opencast mines.
There seems to be a general adverse feeling among both Opposition and Conservative Members about opencast mining. I deplore that because, as several hon. Members have said, it is the only activity that has made a profit for British Coal during the past few years. The percentage of opencast coal as a proportion of British Coal's output has risen from 13 per cent. 10 years ago to almost 20 per cent. now. It is an important activity if British Coal is to wipe the slate clean, balance its books and make a profit after its massive debt has been written off.
As we have heard, opencast mining can produce coal with a low chlorine content which has to be mixed with deep-mined coal. I am massively opposed to the Coalfield Communities Campaign, mainly financed by local authorities, which states that deep mining is a marvellous activity which produces jobs in the coalfields. It completely opposes opencast mining. The right hon. Member for Chesterfield (Mr. Benn) said that opencast mining damages the environment. The hon. Member for Holborn and St. Pancras (Mr. Dobson) said that people did not take care or look after the interests of the residents of the area and that it spoilt the environment. That is not
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necessarily the case. I have seen opencast mining in the east midlands, the west midlands, the north-west and south Wales. I have probably visited many more opencast mines than any other hon. Member here tonight.I know that the Minister of State has visited many opencast pits. I am not aware that the Secretary of State has done so, but I should implore him to visit such pits. He will find that the workers are not from the National Union of Mineworkers or the Union of Democratic Mineworkers. They are either in the Transport and General Workers Union or are subject to a loose trade union arrangement. It is not a mining but a civil engineering activity. It is a massive earth-moving operation.
The United Kingdom does well on opencast mining, especially when one contrasts our difficult working conditions with seams only a few inches thick--it is a bonus if they are 4 or 5 ft thick--with the 20 m to 50 m thick seams in Australia, America and Canada. We can get the coal out, deliver it to customers by conventional coal lorries, and more than compete with imported opencast mined coal.
Mr. Allen McKay : I have been listening with great interest to the hon. Gentleman's comments on opencast mining, but he has not yet mentioned the people who are affected by it. He talked about councils and the Coalfield Communities Campaign. They are local councils, Labour and Tory, which are concerned about the environment.
Mr. Dover : The hon. Gentleman has anticipated exactly what I was about to say.
Thirty years ago my constituency had six mines near the villages of Coppull and Charnock Richard and thousands of workers in deep mines. Since then we have had a great deal of opencast mining. Some parish councils, local authorities and, indeed, the county council are opposed to that. We have mined 500,000 tonnes from Ellerbeck west and 500,000 tonnes from Ellerbeck north. Now we have the opportunity of a further phase at Ellerbeck west to mine 1 million tonnes in five years, and the 100 or so local residents who live near the potential mine want it to be developed. They know that they live on a coal reserve which will eventually be mined. They know that until it is mined their life will be uncertain, and that mining it will provide minerals, wealth and jobs.
Opinion in the area is split. The two parish councils are opposed to the development. I wholly support the application. We have a bad swamp--there is a little wildlife in it--which will be completely drained and made into a super lake. We have old colliery workings, barbed wire, shafts, old metal and brick work and slag heaps. It is a disgrace. I have heard comments about derelict land grant rules being changed, but we have no chance of doing away with all that unless the opencast opportunity proceeds.
I welcome the new rules that will help opencast applications to win approval. I note that some people are massively opposed to the misuse of the holes in the ground for refuse disposal, particularly if four or five years of mining are followed by three years of refuse disposal. I am fully in favour of local residents having their say. In my area they are in favour of the opencast operation.
I am delighted that hon. Members on both sides of the House agree that local residents should receive some form of compensation, as they already do.
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Mr. Harry Barnes (Derbyshire, North-East) : Does the hon. Gentleman find serious transport problems in his constituency involved in collecting opencast coal? Is he in favour of railway lines being built to opencast sites so that coal can be moved in railway wagons?Mr. Dover : Certainly heavy lorries bearing large loads travel to and fro, but much of the earth is moved from one part of a site to another. In many areas the disposal point is an eyesore, but I could take hon. Members to a site in Leicestershire almost as large as the Chamber, yet nobody driving along the road within 5 m of it knows that it is there because of sensible mounding and grassing. Indeed, sheep graze on the site.
I support the Bill wholeheartedly. I am delighted that the hon. Member for Gordon (Mr. Bruce) has tabled a sensible amendment. I hope that hon. Members will support changes in granting licences. The Bill provides an opportunity for the development of small areas of opencast mining and for British Coal to make a profit. The Bill writes off debt. I see nothing but good coming from it for the coal mining industry as a whole, particularly small private mines which should be allowed to compete with British Coal. In the past opencast developers and site owners have operated only as civil engineering contractors, winning the coal on behalf of the opencast executive. I pay tribute to the opencast executive. It has asked me to lay on an exhibition in the Upper Waiting Corridor to show what opencast mining is and what environmental improvements people can expect. I hope that hon. Members will take the opportunity of visiting it from late January to late March.
7.54 pm
Mr. Eric Illsley (Barnsley, Central) : Like many of my hon. Friends, I welcome the major proposal in the Bill--the restructuring of the coal industry's finances--but some clauses cause anxiety.
The principal clause seeks to relieve British Coal of its huge debt of £4.5 billion. All hon. Members will welcome a reduction in that, but we have not heard how much it will be. The Bill does not state how much of the debt will be removed and the Secretary of State did not mention the exact sum. It remains to be seen how warmly we can welcome the clause and the reduction.
Although British Coal has shown an operating profit over the past two years, it is unprofitable on the bottom line because it finances that debt. The interest charges in the forthcoming year will be £575 million. The recent increases in interest rate have done nothing to alleviate that burden. Indeed, British Coal has been prevented from achieving the financial targets imposed on it because of interest rates and exchange rate changes. The figure of £4.5 billion is high. Tory Members tell us of previous reconstructions within the recent past, but we should remember the wealth that British Coal has generated since the war. The whole story has not been simply squandering taxpayers' money.
Since 1980 British Coal has been required to give up £1.2 billion in artificial price reductions to customers. Since 1985, £850 million has gone to the Central Electricity Generating Board to bolster its profits. The 1989-90 CEGB trading profit was well over £1 billion. Money has also been used to fund our nuclear programme or, to be more accurate, the shambles of what is left of our nuclear
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programme. It has been used to provide an excuse to run down the coal industry since 1985 so that now it is a small runt compared with its previous state.The one thing that the money was not used for was a reduction in electricity prices to consumers. In the past two years the Secretary of State has imposed increases, although electricity generators were calling for price reductions. If those price increases had not been forced on the industry, British Coal would now be looking at an operating profit of about £1.4 billion. The electricity industry forced price increases on British Coal for tenuous reasons. World coal prices are low. The 4 per cent. of coal which is traded internationally is at artificially low prices.
Had the Central Electricity Generating Board opted for imported coal, prices would have increased quickly--assuming that the CEGB could have imported it. We have already heard about the effect that that would have had on the nation's balance of payments deficit, which is already at a record level. As I have said, however, the facilities were not available to enable substantial imports to take place. Conservative Members have referred to the Associated British Ports (No. 2) Bill. I merely say that if the Government were not prepared to vote for it, we would not have it.
The price reductions that British Coal has been required to make have been used to fund the nuclear programme, the costs of which are far higher than was ever suggested previously. Price cuts were demanded even though it was clear that the comparative generation costs of coal-fired electricity and nuclear electricity were in favour of the coal industry.
Over the past few years, the costs have been substantially misrepresented to the industry and to the House. Privatisation has initiated a re- examination of the decommissioning costs of nuclear power. Consequently, the true costs are now becoming clear. The different policy for nuclear decommissioning which has been implemented by the nuclear industry has brought a sharp increase in decommissioning costs, which has exacerbated the problem. The difference between the costs of coal-fired generation and those of nuclear generation will result in a nuclear levy of about £1.4 billion. That levy will be imposed upon the coal industry, thereby adding to the costs of British Coal.
The restructuring of the finances of British Coal is a welcome part of the Bill. It is interesting that it is designed to enable concessionary coal to be protected and to enable British Coal to meet the costs that it incurs in industrial deafness cases. I hope that the Government will continue to fund concessionary coal, which is an important issue in constituencies such as mine. Concessionary coal is provided for many retired mineworkers, and has been for many years. It is essential to maintain concessionary coal in areas such as mine, with high unemployment, low wages, few job opportunities and a large retired population. It is important that the scare stories about concessionary coal being bought out for a few thousand pounds should be knocked on the head.
If the financial restructuring takes place and the debts of British Coal are wiped away, British Coal's products will be competitive with imported coal and with other fuel sources. We have heard that technically British Coal will be bankrupt because its assets are worth less than its current liabilities, but why has British Coal been left in such a position for so long? Why has it had to have a £4.5 billion debt hanging round its neck, with interest charges
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of £400 million or £500 million a year and the electricity industry pointing the finger and demanding further price reductions? Coal mining constituencies have suffered closure programmes, massive redundancy programmes, all the misery of job losses and the knock-on effects on the local economy, so as to subsidise the nuclear industry and the electricity industry's profits.Even now, despite the removal of a proportion of British Coal's debt, the industry is still threatened. There are the shadows of privatisation. At the same time there is the removal of nuclear power stations and also a lack of independent generation, although that is supposed to come forward. There is still pressure for further colliery closures. The hon. Member for Sherwood (Mr. Stewart) poured scorn on the leaked document and the reference to 30,000 redundancies, but the Cabinet Sub-Committee document states :
"It would be almost impossible to shield UDM areas from further closures given that British Coal has already fallen over backwards to maintain in existence relatively high-cost pits in Nottinghamshire." Madam Deputy Speaker (Miss Betty Boothroyd) : Order. A time limit has been imposed on speeches during this stage of the debate, and I must call the hon. Gentleman to order.
8.5 pm
Dr. Mike Woodcock (Ellesmere Port and Neston) : I welcome the Bill, but as my hon. Friend the Minister probably expects, my welcome is somewhat qualified. I welcome the Bill because it is the necessary prelude to what I hope will be the privatisation of British Coal. The former Secretary of State for Energy, my right hon. Friend the Member for Hertsmere (Mr. Parkinson), who is now Secretary of State for Transport, referred to that as the ultimate privatisation. That is a long overdue measure that will lead to greater efficiency, to a better deal for industry and domestic coal consumers. It would represent the great change that has taken place since the time that the country was held to ransom by the defence of inefficiency in the coal industry. With the advent of privatisation, miners will own part of their industry and trade unions will negotiate with owners who put the customer first.
As I have said, I welcome the Bill with some qualifications. I feel that the Government have once again missed the opportunity to reform many of the practices of British Coal that are unfair and anti-competitive. In my view the Bill should go a good deal further. Clause 4 relates to coal production and exploration licences. It will permit British Coal to grant licences to work deep mines with up to 150 employees and to grant licences for opencast operations where total production is not likely to exceed 250,000 tonnes. On the face of it, the clause seems to offer a great improvement, but in reality, even with 150 employees in a deep-mining operation, the private sector cannot take on British Coal on the same commercial basis. The limit of 250,000 tonnes for opencast production can hardly improve competition when British Coal never exploits reserves at that level. The proposals may be gestures to competition but they fall far short of the ideal.
Clause 4 raises the more fundamental issues of royalty payments and licensing. British Coal receives about £11
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per tonne royalty payment from private mining operations. Even though British Coal has the best sites, it enjoys the further advantages of an £11 per tonne royalty payment and an £11 per tonne subsidy. How is that fair or reasonable? How can it be anything but anti-competitive? In addition, British Coal has the power to decide whether an operator should be licensed. As the law stands, British coal is in a position to say, "We shall decide whether you are entitled to compete with us. If we decide that you can do so, we shall start with an £11 per tonne advantage, and you will pay us an £11 subsidy on top of that." I find it difficult to understand how the Government can justify that anti-competitive approach to the mining of coal. In my opinion, clause 4 should have gone much further.As my hon. Friend the Member for Erewash (Mr. Rost) and the hon. Member for Gordon (Mr. Bruce) said, clause 4 should have removed the licensing responsibility from British Coal. It is a matter of regret that the Bill does not do that, so I ask the Minister whether he will give one relatively minor assurance. Will he say that when private mining operations increase as a result of the Bill, British Coal will not be allowed to contract for the production that then ensues from that mining, so further stifling competition in the marketplace? If my hon. Friend is serious about wanting to increase competition, he will surely give that assurance.
Competition is a subject about which many sections of the coal trade feel very strongly. I say "sections" because, from what hon. Members have said so far, it might be assumed that the coal industry consists entirely of British Coal. Of course it does not : there are several thousand coal merchants in this country, employing several thousand people. There are many wholesalers ; there are importers and exporters of coal, producers of smokeless fuel, private deep-mine operators and opencast operators.
The people who work in those sectors are firm believers in competition, as are most Conservative Members. Even the Government believe in free competition. In the main, I think that we all accept that it is a guarantee of efficiency and a driving force for change. It seems strange, therefore, that a Government committed to privatisation and free market forces should stand by while a nationalised industry is allowed to engage in back-door nationalisation and anti-competitive practices.
For example, British Coal recently introduced loyalty rebate schemes, intended to restrict merchants to obtaining their supplies from British Coal ; yet, as we all know, British Coal is regularly unable to supply the highest-quality coals. While British Coal makes deals to restrict the import of coals by independent importers, and while many--Opposition Members in particular--campaign to restrict coal imports to protect British Coal's position, the corporation itself is a major importer, and not only from the EEC. How many hon. Members realise that British Coal now imports and distributes Chinese and Vietnamese anthracite, while attempting to stifle imports by others? I ask the Minister to take a close look at whether the signing of such loyalty agreements contravenes GATT regulations.
There is also the question of concessionary fuels for retired miners and widows.
Mr. Allen McKay rose--
Dr. Woodcock : I will not give way, simply because I have not time to do so.
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The Secretary of State has told us today that he will underwrite that commitment with taxpayer's money. Why, then, does he not insist that the distribution of the fuel is put out to open tender, as so many local-authority services have been? Why is distribution carried out exclusively by National Fuel Distributors Ltd--which is a subsidiary of British Coal--rather than being open to competition? Then their is the question of incursions into private trade. In the past year or so, British Coal has acquired a 50 per cent. stake in British Fuels Ltd. At the time, British Coal gave assurances that an arm's-length relationship would exist, and the Minister gave me the same assurance. We now find that the commercial director of British Coal has been appointed chairman of British Fuels Ltd. How can that be describe as "arm's-length", and how can it be in the interest of free competition? Why does the Minister stand by while all that is happening? I ask him to give an assurance that, if National Fuel Distributors is put up for sale--as rumour has it that it will be--it will be offered on the open market?There is widespread concern about preferential treatment with regard to British Coal projects for depots, pre-packed plants and land-sale operations, and about pricing tranparency. All that creates the impression that British Coal is manipulating the market. British Coal also intends to introduce a "master merchant" scheme, requiring merchants to hand over the names and addresses of customers. That is yet another attempt by British Coal to manipulate the market and take complete charge of it. In Ulster, British Coal regularly makes fuel available at £6 to £16 per tonne cheaper than in the rest of the United Kingdom. Why are prices being offered in Ulster that are not available to merchants in this country? How can that be a free market?
In every area of British Coal's involvement in the market, there is evidence of anti-competitive practices--so much so that many believe that an investigation by the Monopolies and Mergers Commission would now be appropriate. On the basis of what I have said, will the Minister make a referral to the commission in the interests of the private coal trade, the consumer and the nation?
I welcome the Bill as a step towards the privatisation of British Coal. My wish, however, is to see the privatisation of the state sector of the coal industry, rather than the nationalisation of the private sector. I ask the Minister to think hard about what I have said, and to ensure that, as he restructures British Coal, he increases competition and market forces rather than reducing them. If he is unable to influence British Coal by persuasion, he should use the mechanism provided by the Bill to compel the corporation to come to heel.
8.14 pm
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