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Labour at the next general election." They cannot both be right. They did not want an election on 7 November. Instead, there are two fewer Members on the Conservative Benches than there were in July. Conservative Members know what is in store for them when they have the guts to call the general election. Opposition Members cannot wait to take the majority off them.

An integral part of Labour's plan to look after the coal industry will be the adoption of European proposals for the coal industry. Clearly, decisions reached in the forums of the European Community have affected and will increasingly affect our energy industries with the advent of the single-energy market. In the past, I have argued that using the spot price of coal on the world market as a benchmark for comparison with the British coal industry is simplistic and short-sighted. Recent discussions within the European Community endorse that view.

A current Commission-approved discussion paper that the Secretary of State must know about on state aid for the coal industry states that there is an urgent need to define the reference price for European coal. That is, a price that would establish an acceptable ceiling on production costs, taking account of the regulatory effect on the world market and a premium for security of supply. The reason for that is that the spot market varies with the dollar exchange rate and, for a long time, has been affected by the dumping of coal into Europe--something about which British Coal has complained to the Commission. We still never hear Ministers support the anti-dumping case. The reference price would allow aid for a long-term market to be established.

When the Council of Energy Ministers meets with those proposals before it, Opposition Members and the British coal industry would like to know what attitude Britain's representatives will adopt. Will they support the proposals that would provide for the coal industry's future? Will the Secretary of State bat for the British coal industry in the way that the German Government bat for theirs? It seems perverse that the expensively subsidised and more expensive German deep-mined coal industry has not suffered the rigours through which our coal industry has been put. The agreement that has been reached--

Mr. Hannam : The agreement is just about to be reached.

Mr. Barron : The hon. Member for Exeter may say that an agreement is about to be reached, but agreement has been reached this week. It will reduce our production by 15 million tonnes between now and the year 2005.

Mr. Hannam : No, the year 2000.

Mr. Barron : No, it is the year 2005 when the figure will be 15 million tonnes. The British Government have been practising euthanasia on the British coal industry and the Rothschild report is about to take that even further. Its proposals will make what has happened up to now look like a day out at the seaside.

It seems odd that the coal pfennig has been given the green light by Brussels when we have been continually led to believe that state aid for our coal industry would not be allowed. Industries in Europe, however, will receive state aid until the year 2005. That is not good enough. Nobody could believe that the Government do anything for the British coal industry because they are absent from the debate and have not done anything to help our plight.

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The Secretary of State and his Back Benchers talk about how the Government have supported the coal industry. That is yet more Tory doublespeak for a decade that has seen the Government inspire a decline in coal production from 120 million tonnes per annum to 91 million tonnes ; for a decline in employment from 223,000 jobs to 74, 000 jobs and for the closure of more than two thirds of our collieries. If that is support for an industry, I should not like to be part of an industry that the Government were against.

Thurcroft colliery in my constituency is now threatened with closure because of a short-term geological problem, yet it has 20 million tonnes of workable low-sulphur reserves. If the colliery were allowed to overcome that problem, it could soon continue to earn the money that it has earned ever since the pit was sunk earlier this century. However, the Government are intent on that pit closure by which the nation will lose that asset of 20 million tonnes of coal. My hon. Friend the Member for Easington (Mr. Cummings) referred graphically to Murton colliery in the north-east and spoke about what it means to a community to lose 600 jobs. That is what is threatened at Thurcroft at the moment.

Even when the Government have closed the pits, their vendetta against our communities continues. What other complexion can we put on their refusal to conform to the EEC regulations on RECHAR? What reason can there be other than the Tory party's vendetta against our coal mining communities?

The Secretary of State said that British Coal's market has been in decline for decades. That was certainly the case until the early 1980s, but British miners then started to lose their jobs to imports. That is what the Government want to continue to happen to miners even after all that they have been through to achieve their productivity increases of 100 per cent. in the past six years. Despite that, the Government want to take away thousands more jobs by importing coal. The Secretary of State also said that the restructuring grant limit is

"not determined by any view of the future of the industry." I hope that I have quoted the right hon. Gentleman correctly. However, only last year in discussions on the level of restructuring grants, I was told by the then Under-Secretary of State that that was

"linked to expected redundancies. It is for British Coal to decide what manpower it requires However the Government need to make some estimate of the number of redundancies in order to seek the necessary estimate provision for restructuring grant."

Everyone knows that the Bill is part of the privatisation process. The Government and their Back-Benchers know it. We know it, miners and their families know it, and the country knows it. That is why we shall oppose the Bill in the Lobby tonight.

9.39 pm

The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory) : The debate has been characterised by deep-seated differences of opinion, but it has been recognised on both sides of the House that the British coal industry faces formidable challenges. That was certainly recognised by the hon. Member for Hemsworth

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(Mr. Enright) in his maiden speech. He made it clear that he will represent the industry in his own way. I disagreed with much of what he had to say, but I welcome him to the House from this Bench and look forward to debating these issues with him on many occasions. We can certainly agree that coal sales are dominated today by the contracts between the generating companies and British Coal. The contracts specify both prices and volume--70 million tonnes this year, falling to 65 million tonnes next year. They have been cleared by the European Commission because they were transitional contracts. They expire in March 1993. Thereafter, the market will not be easy. Several large gas-fired electricity generating stations will begin to operate and that will inevitably take away a proportion of the market.

Just as natural gas displaced some of the coal and coal gas in the domestic market during the 1960s, so gas-fired stations will affect electricity generation in the 1990s. That is inescapable. But despite those structural changes, there will continue to be a large market for coal. Like Opposition Members, we want to see British Coal secure as much of that market as possible.

Negotiations for contracts after 1993 have not started, so we do not yet know the tonnages or the volumes. However, we know that the volumes will depend on the efforts of the managers and mineworkers in responding to those opportunities. Any Government and any industry in the public or private sector has to face those challenges in not only Britain but other countries.

Mr. Barron : Will the Minister give way?

Mr. Heathcoat-Amory : I wish to make one more point. The hon. Member for Rother Valley (Mr. Barron) mentioned Germany in his closing remarks. The German coal industry has been held out as something of a model by Opposition Members. It has recently announced a likely 30,000 job losses in the years ahead, on top of the 26,000 or so redundancies made during the past three years. The restructuring that we are seeing is mirrored on the continent.

Mr. Barron : The Minister mentioned volumes. Will he or the Secretary of State reject the volumes mentioned in the Rothschild report-- 25 million tonnes deep-mined and 15 million tonnes opencast?

Mr. Heathcoat-Amory : As the hon. Gentleman has referred to the Rothschild report, let me make it crystal clear that we have appointed advisers, including Rothschilds, to analyse options for privatisation of the industry. As part of that, it considered a range of possible developments in the energy sector. No decisions on the timing or form of privatisation will be taken until after the general election. Those decisions will be taken by the Government, not advisers. Rothschilds and the other advisers have absolutely no role in decisions on the future of individual collieries.

It is perhaps characteristic of the hon. Members for Rother Valley and for Holborn and St. Pancras (Mr. Dobson) that they take the most pessimistic scenario and present it as fact. We are determined to ensure the development of the largest possible economic coal industry that the market can support. We are confident that when the new contracts are negotiated the industry will respond to keep the lion's share of that market throughout the 1990s and beyond. Productivity improvements over the

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past five years, admittedly from a very low base, have been highly impressive. Moreover, the industry is beginning to lose the industrial image that it once had of a strike-torn and unreliable supplier. I am confident that that, too, will help in the years ahead.

Mr. Benn rose--

Mr. Hardy rose--

Mr. Heathcoat-Amory : Both the right hon. Gentleman and the hon. Gentleman made speeches. I ask them to forgive me for not taking interventions.

Mr. Joseph Ashton (Bassetlaw) : Will the Minister give way? I have not spoken in the debate.

Mr. Heathcoat-Amory : Yes.

Mr. Ashton : The Government have encouraged the Union of Democratic Mineworkers to consider buying into any sort of privatised industry. If the Government are re-elected--God forbid--is it not a fact that privatisation would come in 1992 and that in 1993 contracts for the supply of coal to the power stations would be awarded? With massive imports, the Union of Democratic Mineworkers would not be able to match the price of that coal and would have to advise its members to take wage cuts to meet the contracts. Is not that the reality?

Mr. Heathcoat-Amory : Absolutely not. We believe that the best chance of keeping out imports is to improve the efficiency and productivity of the industry. We believe also that that will be best done in the private sector. That is why in due course we shall be making proposals to do just that.

I recognise that there will not be an easy transition. That is why we are introducing the Bill and why clause 1 extends the overall limit on the payment of restructuring grant by a further £1.5 billion. I remind the House that since 1979 the Government have approved over £7.5 billion of new investment and have provided for grant aid of about £17 billion to the industry. That has been provided by the Government--by the taxpayer- -and is a measure of the Government's commitment to the industry. We are continuing to invest in it at a rate of over £1 million for every working day. Restructuring grant represents a specific commitment by the Government to the work force. The money supports British Coal's costs of redundancy, transfers between collieries, retraining for jobs outside the industry and the excellent work of British Coal Enterprise. The money helps BCE to carry out a range of initiatives, including the provision of soft loans for new businesses, managed workshops for new businesses, low-cost premises for expanding businesses, training for ex-mineworkers and job shops. I listened carefully to my hon. Friends, and especially my hon. Friend the Member for Sherwood (Mr. Stewart), when they set out their ideas for extending and expanding the work that I have described in the affected areas. We shall consider their proposals carefully. Restructuring grant has been paid by the Government since 1987. It has been raised in progressive stages to the present limit of £1,500 million. The grant provides support for 90 per cent. of the costs of the corporation when it pays redundancy sums to mineworkers. It allows the corporation to pay its mineworkers lump sums of up to £37, 000 on leaving the industry, which is generous by any standards. That is why Labour should be supporting the Bill instead of criticising it. If we are to continue the high

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levels of payment to those affected by restructuring, the Bill is essential. If we are to continue the retraining and employment schemes, we need the Bill.

The Labour party should know about the cost of restructuring because it did so itself when in government. As my right hon. Friend the Secretary of State said, between 1964 and 1970 it was a Labour Government who shut nearly 280 collieries. As a result, 170,000 men lost their jobs in the mining industry during those years. In that period, however, there were not the generous redundancy terms or the restructuring payments that are now available.

Mr. Simon Hughes : Will the Minister accept that the flaw in his argument is that no figure is projected for the next financial year which will take the amount needed over the present limits agreed under the 1987 legislation? We do not need to increase the limits for at least another 18 months.

Mr. Heathcoat-Amory : We do not yet know the precise figures required--that is up to British Coal. It controls individual collieries and it will decide the sums required. It is a restructuring grant paid to British Coal, to fund up to 90 per cent. of the sums that may be required when British Coal shuts collieries as part of its restructuring exercise.

Mr. Allen McKay : In the finances that are being made available, is there anything to continue the concessionary fuel arrangements? If privatisation occurs, will the Government guarantee everything that currently exists, will that be left to the private owners, or will the miners be sold down the river?

Mr. Heathcoat-Amory : I am happy to give the hon. Gentleman the assurance that entitlement to concessionary coal will be preserved. I am happy to put that on the record once again.

If Labour Members oppose the Bill, they and the miners will know that the redundancy terms on offer--which are generous by any standards--the transfer payments available for those wishing to move to other pits, the retraining help, and the managed workshops are all being provided by a Conservative Government, despite opposition from the Labour party. They know that all that would be put at risk if there were the prospect of a Labour Government. Frankly, it is not an adequate response for Labour Members to pretend that they can somehow keep the market for coal at its present level.

The hon. Member for Rother Valley referred to a national plan for energy. He did not tell us what was in that plan, other than mentioning something called a reference price. He did not tell us what the reference was. He avoided any of the hard decisions that would have to be made if he wanted to stabilise the industry at about its current size, as promised by the hon. Member for Holborn and St. Pancras. The hard decisions--

Mr. Barron rose --

Mr. Heathcoat-Amory : I shall not give way as I am responding specifically to the hon. Gentleman's speech.

Will the Labour party shut down the new gas-fired generating stations, break those contracts and lay off the men? Will it restrict the use of the electricity interconnectors to France and Scotland? Will it ignore the European single market and GATT by restricting coal imports? If so, that is hardly in line with Labour's

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new-found enthusiasm for the European single market and free trade. Without facing at least some of those hard choices, Labour's promises remain, quite simply, empty phrases.

We have heard from Opposition Members a wholly misleading account of clause 2. The 1908 Act is an obsolete restriction that is not appropriate for modern mining methods. It has been overtaken by local practices and informal agreements--and that has been the case since mechanisation of the industry began in the 1950s. If it is true, as alleged by Labour Members, that the 1908 Act is so essential for safety today, why did not the previous Labour Government enforce it? I wish that the right hon. Member for Chesterfield (Mr. Benn) had dealt with that point in his speech, because he was the Energy Minister when the letter of the Act was being breached. He did nothing about it then, so how can the Opposition claim that the Act is pivotal to safety in today's mines?

Repeal of the 1908 Act will not jeopardise safety--we would not let that happen. The coal industry has a good safety record and it has a strong safety culture reflecting the accumulated wisdom of the management, the work force and the mines inspectorate. The Act plays no part in the safety regime. Therefore, we intend to repeal the Act when alternative regulations governing working times are in place. That does not affect our commitment to safety and it has nothing to do with privatisation. For Opposition Members to suggest otherwise shows that they have either not understood the Bill or are trying to bolster a weak case with irrelevant scares.

Hon. Members from both sides of the House have commented on the environment.

Mr. Harry Barnes (Derbyshire, North-East) : On a point of order, Mr. Speaker. At 10 o'clock when the Division bell goes, the House will have been sitting for seven and a half hours, from prayers through questions, statements and this debate. Is not that a long enough period for miners to be working down the pit? Some of us will believe that we have done a good job during that period.

Mr. Speaker : That has nothing to do with me.

Mr. Heathcoat-Amory : My hon. Friends have made the good point that the Labour party is posing as the party of carbon dioxide reductions while at the same time it wants to force electricity generators to burn more coal, phase out the nuclear industry and, in its phrase, to "deter" the generators from using gas for power generation. That is a neat package for increasing the output of carbon dioxide into the atmosphere.

But when talking to a different audience at a different time, the Labour party poses as the green party, committing itself to the tough and demanding target of cutting carbon dioxide emissions to 1990 levels by the year 2000. That is a glaring and continuing contradiction between its energy and environmental policies, and it cannot disguise the fact.

However, I shall at least admit that that contradiction does not exist on the Liberal Democrat Bench. I have been examining the Liberal Democrats' environmental document called, "Costing the Earth". They want--I suppose that there is some merit in honesty--an immediate energy

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tax with the highest rate on coal specifically designed to switch fuel use away from coal. Their energy tax is targeted at coal reduction.

I then looked at the section of the report headed "Economic Impact" where there was nothing at all about the damage to the coal industry. It was not even mentioned. That is how it dismisses the coal industry. There may be some honesty there, but please do not let us hear from the Liberal Democrats that, if they vote against the Bill this evening, they have anything constructive to offer either existing coal miners or those displaced by restructuring. This evening we have seen the old familiar Labour party of intervention, protectionism and high prices. I am grateful to the hon. Member for Bolsover (Mr. Skinner) for reminding us of that in the last speech from the Opposition Back Benches. What we do not know is how it squares those beliefs with its later beliefs in market forces, the EC and industrial efficiency. I shall leave that to be worked out by the political analysts.

I am concerned about the practical effect of the Labour party's opposition to the Bill, which would be to hamper or prevent the necessary restructuring of the coal industry which we all know to be necessary. The Bill will allow British Coal continued and necessary access to restructuring grant. Without that, British Coal will be unable to continue the present level of redundancy pay or the redeployment, retraining or job placement schemes that it supports. The Bill also empowers the Secretary of State to repeal an obsolete and out-of-date Act of Parliament from 1908 which threatens the industry's productivity and the earnings of its work force. I commend the Bill to the House.

Question put, That the Bill be now read a Second time : The House divided : Ayes 287, Noes 196.

Division No. 10] [10 pm

AYES

Adley, Robert

Aitken, Jonathan

Alexander, Richard

Alison, Rt Hon Michael

Allason, Rupert

Amery, Rt Hon Julian

Amess, David

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas

Aspinwall, Jack

Baker, Rt Hon K. (Mole Valley)

Baker, Nicholas (Dorset N)

Banks, Robert (Harrogate)

Batiste, Spencer

Bellingham, Henry

Bendall, Vivian

Bennett, Nicholas (Pembroke)

Benyon, W.

Bevan, David Gilroy

Biffen, Rt Hon John

Blackburn, Dr John G.

Blaker, Rt Hon Sir Peter

Body, Sir Richard

Bonsor, Sir Nicholas

Boscawen, Hon Robert

Boswell, Tim

Bottomley, Peter

Bottomley, Mrs Virginia

Bowden, Gerald (Dulwich)

Bowis, John

Boyson, Rt Hon Dr Sir Rhodes

Braine, Rt Hon Sir Bernard

Brandon-Bravo, Martin

Brazier, Julian

Bright, Graham

Brown, Michael (Brigg & Cl't's)

Browne, John (Winchester)

Bruce, Ian (Dorset South)

Buck, Sir Antony

Burns, Simon

Burt, Alistair

Butler, Chris

Butterfill, John

Carlisle, John, (Luton N)

Carlisle, Kenneth (Lincoln)

Carrington, Matthew

Carttiss, Michael

Cash, William

Chalker, Rt Hon Mrs Lynda

Channon, Rt Hon Paul

Chope, Christopher

Clark, Rt Hon Alan (Plymouth)

Clark, Rt Hon Sir William

Colvin, Michael

Conway, Derek

Coombs, Anthony (Wyre F'rest)

Coombs, Simon (Swindon)

Cope, Rt Hon Sir John

Cormack, Patrick

Couchman, James

Cran, James

Currie, Mrs Edwina

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