House of Commons Hansard Debates for 10 Dec 1991

Column 797

technologies the investment choice by the turn of the century. I hope that, by that time, our coal industry is still able to participate.

8.7 pm

Mr. Terry Patchett (Barnsley, East) : I am grateful to have caught your eye, Mr. Deputy Speaker, but I shall be brief, as I know many of my colleagues who wish to speak have a genuine interest in the coal industry. I am fortunate in that my constituency still contains the semblance of a coal industry, albeit its manpower is less than a third of what it was in 1985.

I find it difficult to speak in this debate, given that its subject is the future of the coal industry. I believe that both parties in any debate should have a genuine interest in the subject, and be open and honest. The Government, on their past record, do not meet any of those criteria. They have always stated that British Coal should take its chance in a fair and free market, but they suported private Bills--for example, the one that is now the Associated British Ports Act 1990--which helped British Coal's rivals. They have used the British coal industry to pursue Tory dogma. They initiated an unnecessary year-long strike which cost the taxpayer £5 billion. They did so just to make the trade unions look bad, ably assisted by their friends in the press. That did no good and had nothing to do with the industry.

The Government's friends in the press vilified, and attempted a character assassination of, a trade union leader whose heart and soul was genuinely in the industry--Arthur Scargill. His only crime was to speak the truth about the Government's pit closure programme. In this very Chamber, he was called a scaremonger and a liar. Ministers, including the then Prime Minister, told the House that they had no such programme, but history proved who was telling the truth. If the Government are really interested in British Coal, they should take an interest in the health and safety of its workers, yet they have proceeded to deregulate health and safety. I refer to certain types of support systems and the number of hours worked in a shift. I have been involved, and I know the inherent dangers. This dangerous move displays a callous indifference to the work force, but it fits in well with the former Prime Minister's love of Victorian values. Hers was an era that cared little for the life and limb of the work force.

If the Government really care about free and fair market forces with no Government interference, why have they allowed more private mines? Why have they assisted opencast mining by relaxing planning controls and allowing the rape of our countryside unnecessarily? We can well do without opencast coal, yet the Government have interfered and helped rivals of British Coal.

I am satisfied that only the Opposition have adopted an open and honest approach to the industry. I know that the Rothschild report will be mentioned often in this debate, so I will not dwell on it, but I am worried about one or two of its aspects. For instance, why was there a need to commission the report when the way in which the generating industry is moving shows that the Government are implementing Rothschild's recommendations in advance? The Government have been moving in that

Column 798

direction for many years, so why spend taxpayers' money on a report that changes nothing and merely supports the Government's political ideology?

The report does not mention any effect on our balance of payments. It is typical of the Government to pursue the dogma of privatising coal without a thought for the economic consequences of that decision. Social consequences are never mentioned in the report, yet we all know of the traumatic problems brought about by the lack of tax revenue and the increases in unemployment payouts--these are the social costs. We are talking about social costs and human problems, not exclusively about profits.

The Government have clearly shown their interest in the coal industry by the amount of money that they have poured in to supplement redundancy terms. That is a sign of the way in which the Government want the industry to go.

I was pleased to hear the Chairman of the Energy Select Committee refer to clean coal and especially to the fluidised bed experiment at Grimethorpe in my constituency. The privatised energy industry has shown a distinct lack of interest in that experiment and has put little money into it, but if it is proved a successful and profitable venture, the privatised industry will be in there with its sticky hands to cream off any profits that may be had.

I should like to take this opportunity to ask the Minister to assure the House that the fluidised bed experiment will be allowed to be completed. If the Government have a genuine interest in British coal, let them show it by some real action.

8.14 pm

Mr. Andy Stewart (Sherwood) : This debate on the coal industry is not only opportune but imperative in view of the report by the Energy Select Committee, and I congratulate the Committee and my colleagues who have already spoken in this debate.

In the past 100 years, the House has heard much more about the coal industry than about any other, and rightly so, because coal was the parent of our industrial revolution, and until 1950 our only indigenous source of energy. The industry controlled our economy, and 2 million families associated with it.

With each and every debate--the last being on 14 November--we get an historic resume , political criticism, and emotional speeches from Members who have been miners and speak from experience, which is understandable. Nevertheless, I hope that they accept that Conservative Members who represent coalfield constituencies care about the industry no less than they do.

My speech on the Coal Industry Bill on 14 November at column 1262 touched on the past and present and questioned the industry's future role and size. While it would be in everyone's interests to repeat that speech in full, time is limited, so I will concentrate my remarks on the essential parameters of renewed contracts with the power generating companies post- 1993, and the opportunity for British Coal to secure every tonne of commercially viable business. This, of course, will depend on the total demand for electricity and the share given to coal in generating that energy.

My right hon. Friend the Secretary of State for Energy has often said that British Coal must face the challenges to its markets head on. It has done that--only to find half the power stations' fuel market in England and Wales entirely

Column 799

removed from that marketplace. That is not free and open competition, but rigged protectionism, denying consumers the benefits which would accrue from the unique offer made by British Coal--to supply coal at lower costs and steady prices.

What my constituency miners want to know is why an annual productivity- induced unit cost reduction of £150 million is not passed on to the consumers, as it would be in a truly free market. In addition, they have to subsidise Nuclear Electric, allowing it 20 per cent. of the electricity market share, costing three times the unit price of coal. That is not the market working, but political intervention. Some would like to call it a diversity of supply. That may be so, but it is a feeble excuse to use to our miners who have done so much in the past five years, increasing productivity by 108 per cent. and reducing prices by 40 per cent. in real terms. Further commercial mismanagement is about to surface from gas also being given favoured status. From their new-found cash resources, National Power and PowerGen have signed continuous gas generating contracts coming on stream up to 1995, equivalent to 25 million tonnes of coal. Having done so, the companies now discover that 40 per cent. of this market share is hopelessly uneconomic compared with their present coal-contracted generation.

Unlike Nuclear Electric, the companies are not asking British Coal for a subsidy to fund this mistake ; their means are more subtle--to remove the competition by closing 12GW of modern coal-fired generating stations, and to demolish the plants. To the lay person, that may seem an insignificant figure, but it is equal to all the power plants in the Trent valley, which currently produce a third of England's electricity requirements. If that was all, it would be bad enough, but a further 17 million tonnes of coal- equivalent gas contracts are waiting for the signature of my right hon. Friend the Secretary of State for Energy, all at unit prices 30 per cent. above those of British Coal. In view of those indisputable facts, my right hon. Friend will have no difficulty in returning those contracts to sender unsigned.

Having 50 per cent. of the energy market protected by intervention, British Coal looks to a potential market after April 1993 of between 50 to 55 million tonnes, most of which it could meet at economically sustainable prices. To get there would require a degree of predictability and orderly progression which only the Government can sponsor. That process must be undertaken soon. Miners are despondent because they continually hear vague promises that, if they keep going, success will come, while at the same time seeing their market decrease and ever-increasing investment in port capacity to handle large quantities of foreign coal.

I make no apology in returning today not only to the question of the wisdom of importing coal on spurious economic grounds but to the extent to which our strategic requirements could be put in jeopardy by allowing such a policy.

Winston Churchill, our great leader and a man of vision, secured in 1914 a 51 per cent. stake in the Anglo-Persian oil company, now British Petroleum, for no other reason than to secure oil supplies. History has proved him right, and nothing has changed to remove that

Column 800

need except that we have now abdicated our responsibilities to two commercial companies, National Power and PowerGen, whose only claim to fame so far is their record-breaking dash for gas.

My constituency miners also demand an economic audit on the importation of coal. It costs £1.80 to produce a gigajoule of domestic electricity worth £20 from British coal compared with £1.50 from imported coal. Eliminate the former, and the cost of the latter will rise through the roof, leaving industrial and domestic consumers at the mercy of foreign Governments.

The United Kingdom already has the lowest domestic electricity prices in Europe and, given the opportunity, British Coal can offer long-term guarantees to keep that price advantage at or below the United Kingdom retail prices index. The starting price could well be reasonable--say 160p per gigajoule or 10 per cent. below present prices--but the contracts are unlikely to be firm, with reopeners at regular intervals. With action as described, British Coal could secure 50 to 55 million tonnes per year, most of all on a firm five-year basis and at much the same price as would be achievable from the lower volumes should any of that market share go to imported coal.

Therefore, we need the Government's support not to dictate on future coal contract prices, but to ensure that the dominant position of the generators is properly regulated rather than abused and that the contract negotiations are decided on genuine, not make-believe economic grounds. Otherwise, instead of the desired increase in competition, there would be an inevitable and dangerous decline in the diversity of energy supplies available to the consumer. The Rothschild report was just one of several options in the privatisation of British coal, but in the end it could be the only one. To abandon the United Kingdom coal industry in that fashion would be a decision which was not only historic but irreversible. 8.23 pm

Mr. Malcolm Bruce (Gordon) : I am grateful to the Select Committee on Energy for its report. It is particularly helpful that it has highlighted its concern about the potential decline in the extractable reserves of British Coal to a critical level. My only concern about that is it has left it a little late : it might have been helpful if that concern had been registered earlier. Some of the closures that have taken place are irreversible.

However, at least Conservative Members now recognise that the Government must do a bit of thinking about the coal industry's future in relation to the consequences of the privatisation of electricity, the opening up of the market for coal, which even the hon. Member for Sherwood (Mr. Stewart) accepts may not be an entirely level playing field, and the future ownership of the coal industry.

I make no apology for being particularly concerned about the future of what little is left of the coal industry in Scotland. We have one operating pit and two mothballed pits. That is the Scottish coal industry. The consequences of the coal strike were more devastating for the Scottish coal industry than any other region. The industry was effectively decimated.

I spent some hours this morning in the company of members of the Monktonhall miners' consortium. As the Under-Secretary of State well knows, it has put in a bid to take over the licence for the Monktonhall colliery from

Column 801

British Coal, and British Coal has said that a decision is likely to be made by the end of the year, which presumably will be announced early in the new year. It is my firm belief that that bid is being treated seriously by British Coal only because the consortium has persisted in its determination to try to take over its old pit. It is a matter of some concern that a company that so far has shown no interest has suddenly popped up at the end of the day and said that it will put in a counter-bid. That is of particular concern when one knows that, in spite of the fact that the principal of that company may be from the Isle of Lewis, he has been as far away from Lewis as he could be for most of his life, and his interest has only materialised recently. Indeed, he has said that he was desperate to take over Monktonhall as soon as he learned that the licence might be available. He has not said when he learned that, but I am sure that it was nothing like as long ago as the Monktonhall miners, who have for three years been trying to take over the licence from British Coal.

It is perhaps also a matter of concern that, for the past two years, the company has made donations of £50,000 a year to the Conservative party. One wonders whether that may be why it has some expectation of results. It is my experience that companies give donations to the Conservative party not to promote and uphold free enterprise but in order to prevent the effective operation of free enterprise and to secure advantages within the marketplace from a Government who are willing to be deflected from their professed ideology in order to favour their friends and backers.

The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory) : The hon. Gentleman has just made a serious allegation to which I shall be responding in due course, but meanwhile, will he tell the House whether the consortium which seeks to take over Monktonhall, or the coal industry generally, will be helped by the Liberal Democrats' call for an immediate carbon tax, as set out in their recently published environmental policy document?

Mr. Bruce : The hon. Gentleman is wrong : we have not called for an immediate carbon tax. We have raised the question that the Government have also raised--how we should deal with the problems of carbon dioxide emissions and the operation of the market. The chairman of the Conservative party, a previous Secretary of State for the Environment, is on record as saying that energy taxes will have to rise if we are to deal with our environmental problems. Therefore, the Conservative party is in no position to cast such aspersions on how we deal with the problems of carbon dioxide. The Government's record on that is less than impressive.

The particular point about which we must now be concerned is whether the consortium that has put in the application for the licence for Monktonhall will be successful, and the Government's role in that.

I am glad that, on this occasion, the Under-Secretary of State is in his place. I am not criticising him for his absence when this matter was previously debated, because I know that his colleague the hon. Member for Lewisham, East (Mr. Moynihan), who is responsible for oil and gas, reported the debate to him and the concerns that I

Column 802

expressed at that time. As a result, I am pleased to note that he met the consortium and the Chairman of the Energy Select Committee, I think on the same day, and I know that the consortium welcomed that opportunity. That leaves the interesting question why those meetings took place, when the Secretary of State, the Under-Secretary of State, and the Minister at the Scottish Office responsible for industry refused persistent requests for meetings over the past three years--saying that it was a matter not for the Government but for British Coal.

I wonder whether it had to do with the fact that the request for a meeting came from a Conservative councillor in Edinburgh who had previously shown no interest in the consortium and is not directly connected with it. Is it not odd that there should be that sudden change of Government policy? I suppose that that is an indication of the way that things have changed in recent years. As a rule, Ministers did meet Members of Parliament wanting to make representations to them. It is interesting that Ministers are only prepared to do that now for outsiders who are members of their own party. That is a regrettable development.

More seriously, to what extent does that indicate a change of Government attitude? In the past, they said--the Minister knows my view, that this is the wrong position to take--that the licensing of coal pits was entirely a matter for British Coal, and there was no point in meetings, because they would interfere in the management of British Coal. The Minister knows that, when I have attempted to meet Ministers' requests to seek a meeting with British Coal directors, they have refused to do that, or to discuss matters in any way, shape or form.

Ministers who are supposedly accountable to the House refuse to accept their responsibility to be accountable to Members of Parliament, and then pass the buck to people for whom they are responsible, but who in turn refuse to meet right hon. and hon. Members. The business of the House is being frustrated and undermined by the inability of right hon. and hon. Members to make proper representations on the policy of a Government who have been in office too long, and who have grown too arrogant about the power they hold. Who will make the decision on Monktonhall, and what impact will it have on wider proposals for the privatisation of British Coal? If the decision is to be made by British Coal, why did the Minister meet the consortium? If the Government told British Coal what they want the outcome to be, why did they not tell the House, and outline the priorities?

I have twice tried to put amending legislation through the House to transfer the ownership of British Coal and its licensing responsibilities to the Secretary of State. The Under-Secretary has shown that he is not unsympathetic to that suggestion. That ought to happen before British Coal's privatisation, particularly if coal is to be privatised in a different way from that adopted in respect of previous privatisations of single monopolies. Do the Government have any clear thoughts on privatising British Coal as a single entity or in a different way?

The Monktonhall miners consortium simply wants to take over the pit's licence as soon as possible, and certainly this side of a general election. They have waited long enough, and the signs are that a decision will be made shortly. Will the Minister make it clear that the Government believe that the licence should go to that consortium, unless there are commercial or other reasons

Column 803

why that would be inappropriate--in which case, the Government should state what they are? The consortium has managed to persuade its financial backers of its viability, which suggests that its proposition is realistic.

British Coal should not put any charge on that licence. Monktonhall has been a liability to British Coal, and is costing it money. If anything, British Coal ought to put a little money in, to have the pit taken off its hands. However, the consortium does not seek that--only to take over the licence. Will the Government indicate that will be allowed to happen?

The consortium is frustrated because, over the past three years, it has received very little support from quarters from which it might have expected it. An expensive report commissioned by the National Union of Mineworkers, Lothian regional council, Midlothian district council, and East Lothian district council--the political complexion of which I do not need to point out to the Minister--is fundamentally an attempt to persuade British Coal to take over the running of the pit.

It is an interesting point that the miners consortium has no confidence in British Coal and does not believe that it could run the pit any more profitably than before. The miners believe that the consortium in which working people own the pit could be effective and profitable. It is only right to give them a chance to prove that. I thought that the Conservative party would also consider that something worthy of its support. The consortium should be given an opportunity to show that the commitment it has shown over the past three years can yield results. There is no public money at risk--only the opportunity for the local community to prove that it can deliver the goods.

The membership of the consortium totals 250--which is greater than the number of jobs that would be created in the first instance. The members have all said that they would put up £2,000 of share capital in the consortium, and there are more people to work in the pit, above and below ground, than could initially be provided with employment.

Critics have said that a constraint on the consortium is the limit of 250 underground workers for that pit. Initially, that limit would not be exceeded anyway, but eventually the consortium would be able to employ about 500 people. Will the Minister make it clear that there is no reason why that limit should present any obstacle? Every year, Bills on the coal industry go through the House. The Government have already upgraded and amended--

Mr. Barron rose --

Mr. Bruce : If the hon. Gentleman will just listen, he will understand that I am urging the Government to say that they would if necessary amend the legislation to allow the consortium to progress.

Mr. Barron : The limit would have to be changed by statute, as was the case with the Coal Industry Act 1987, which raised the limit to 150 persons. Why has not that same argument been advanced in respect of the current Coal Industry Bill by the hon. Member for Southwark and Bermondsey (Mr. Hughes), who was supposed to be the Liberal Democrats' spokesman on the industry?

Mr. Bruce : The hon. Gentleman knows perfectly well what happened with the previous Bill. My amendment was

Column 804

defeated by 21 votes to one, because Labour Members voted with the Government to defeat it. I know exactly what is Labour's position in that regard.

The miners in the area in question are thoroughly and utterly disillusioned with Labour for its total lack of support. They say to me, "Isn't it extraordinary that here you have working people wanting to take over a pit that they care about, and putting up their own money to that end, and Labour is backing the bosses who closed the pit in the first place--to prevent those workers taking over their only means of a livelihood?" That is what Labour does for working people, and that is why working people in that part of the world will turn against Labour at the next general election.

I ask the Minister to recognise that he is in a position to ensure that those miners are given the opportunity to do what they have spent three years trying to do--to take over the pit they know and to show that they can make it profitable.

8.37 pm

Mr. Malcolm Moss (Cambridgeshire, North-East) : The hon. Member for Gordon (Mr. Bruce) made a number of assertions, to which my hon. Friend the Minister will no doubt reply later. As to the case for Monktonhall, it seems that the hon. Gentleman is seeking privatisation before a Bill has passed through the House. That is an interesting line from the Liberal Democrats.

Few industries in this country or in the Community as a whole have seen such tremendous changes over the past decade as the coal industry. Those changes essentially relate to a slimming down in the industry itself, but also to significant structural changes. On the debit side, over the past 10 years output reduced by 35 million tonnes or 28 per cent., but the parallel decrease in consumption is much less. It has fallen by only 11.6 million tonnes, or 9.6 per cent. On the plus side, there have been dramatic productivity increases, from 2.32 tonnes per man shift in 1980-81 to 4.70 tonnes in 1990-91--a rise of 103 per cent. in 10 years. That was not achieved at the expense of health and safety, because over the same period fatal accidents fell by 72 per cent.

Over the same period also, British Coal cut colliery costs by 40 per cent. in real terms. Those are not the statistics of an industry in terminal decline. It is high time that some of the myths presented by Labour Members were buried once and for all. The first is that the British coal industry will be decimated in the near future ; the second is that the present Conservative Government are actively working to achieve such a decline, together with the substantial job losses that accompany pit closures.

The Government's commitment to the coal industry has been clear over the past 10 years or more ; they have also shown their commitment to a successful future for the industry. After all, who invested more than £25 billion over the past decade--some £2 million each working day? Who put British Coal on a solid financial footing by writing off its debts with a massive £5 billion capital reconstruction programme? Who introduced a Bill--long overdue--to deal with the coal mining subsidence problem? Who restructured British Coal so that it was able, last year, to make a profit of £78 million--the first bottom-line profit for 13 years?

Was it the Labour party, operating behind the scenes? Was it the National Union of Mineworkers, under its

Column 805

renowned leader? Were those achievements the result of efforts by Labour Members? Of course not ; they are the tangible evidence of a Government's full commitment to one of the country's major industries.

Let us contrast those achievements with Labour's record in office. The Labour Government closed more pits in their two terms than the current Conservative Government have ever closed. Under Labour, between 1964 and 1970 and again between 1974 and 1979, a total of 295 pits were shut down ; since 1979, there have been just under 140 closures. That is half the closure rate under Labour.

Mr. Jimmy Hood (Clydesdale) : Can the hon. Gentleman tell us what percentage of collieries have been closed under the present Government, and what percentage were closed under the last Labour Government?

Mr. Moss : I think that absolute figures are much more important than percentages. In the last analysis, they relate to the number of pits, and the number of jobs available at each pit.

Under Labour, productivity increased annually by an average of just 2.5 per cent. Since 1979, under the present Government, that figure has trebled to more than 6.5 per cent. The message is loud and clear ; according to any measurement that we care to take, the Conservative Government's record on the coal industry is significantly better than that of Labour.

What of the future? Of course, the coal industry faces real challenges-- environmentally, for instance. Stringent targets relating to carbon dioxide, sulphur dioxide and nox emissions make it difficult for coal to compete with other fuels, especially in power generation. Coal also suffers from competition from gas, which is more environmentally friendly, and--as we have heard this evening--is becoming far more important in terms of baseload electricity generation in the near future. The third challenge comes from the liberalisation of world energy markets, a trend that will undoubtedly continue through the GATT negotiations.

None the less, British Coal has achieved remarkable improvements in the past decade, which can and should continue. Tribute should be paid to both management and work force for those tremendous achievements : they deserve the highest praise. The same management and work force face the challenges of the current position, but there is nothing to suggest that they lack the collective will, expertise or enterprise to negotiate a very successful future for themselves and their industry.

Much has been made of the contracts coming up for renewal with the main power generators in the United Kingdom--National Power and PowerGen. Their generating capacity, however, still lies to a significant extent in coal- fired generation. Their new gas plants will not be on stream for several years ; they need a secure, well-priced coal contract for a long time to come. As my hon. Friend the Member for Sherwood (Mr. Stewart) pointed out, as negotiations are currently progressing, there is every chance that some 50 million to 55 million tonnes will form part of that contract negotiation.

Column 806

Coal-fired plants are mainly located inland, and very close to existing coalfields. That surely gives British Coal a distinct advantage over importers in negotiations.

The hon. Member for Mansfield (Mr. Meale) raised another possibility for British Coal's immediate future. British Coal produces the cheapest deep- mined coal in Europe ; the cost is substantially lower than that of coal from many other producers in the European Coal and Steel Communities. Surely there is tremendous scope for diversification of British Coal sales into European Community countries, particularly Germany. Here, national subsidies are under continual threat of elimination as discussions progress within the ECSC and under the treaty.

As we have stated clearly and repeatedly, the Government are pledged to achieve the largest economic coal industry that the market can support. To say anything less would invite protectionism, ring fencing and subsidy. With privatisation, after the next election, the industry will be more effectively structured to meet its challenges and build on its achievements.

What of Labour's plans for the future of the coal industry? Its pledge is to maintain the industry "at around about its current size". Let us ignore for the moment what Labour actually means by that ; how will it deliver on its promise, bearing in mind the fact that the nuclear industry is already ring fenced, gas contracts have already been signed and committed to combined cycle gas turbine plant, and coal imports are perfectly legal under European law? Labour's coal strategy simply does not stand up--first, on environmental grounds. Labour is pledged to freeze carbon dioxide emissions at 1990 levels by the year 2000 ; that is five years ahead of the Government's pledge. How will that be possible, given that Labour wishes to phase out nuclear, which could easily push up carbon dioxide emissions by at least 10 per cent. a year and prevent the development of combined cycle gas stations, which emit half as much carbon dioxide as coal-fired stations?

Sulphur dioxide emissions would also increase if that strategy were implemented. The only way in which to meet sulphur dioxide targets would be the adoption of a massive flue gas desulphurisation programme on existing coal-fired stations. Who would pay for that? If Government grant is given to the companies running the stations, it will come from taxpayers' money. Or will National Power and PowerGen be forced to do the retrofit? That would mean significant increases in the price of electricity for consumers. We have heard nothing this evening about where the money will come from.

Mr. Eric Illsley (Barnsley, Central) : The hon. Gentleman said that Labour would need to implement an FGD programme, and asked who would pay for it. Surely the Conservative Government have already set out proposals for such a programme : they should be telling him where the money would come from.

Mr. Moss : The existing programme represents a commitment by National Power and PowerGen to retrofit about 8 GW. That is clearly contained within their financial programmes. Labour's plans involve an increase, or a stabilisation, of coal burn in our power stations, at the expense of gas or nuclear, at the same time as a reduction in both carbon dioxide and sulphur dioxide levels.

Column 807

Without FGD retrofit across many more stations than are represented than those 8 GW, I do not think that that will be possible.

Mr. Barron : What does the hon. Gentleman think about the fact that National Power and PowerGen are currently importing orimulsion and getting permission to burn it? Orimulsion emits three or four times as much sulphur as coal.

Mr. Moss : The point at issue is whether National Power and PowerGen meet the carbon dioxide and sulphur dioxide targets that have been set for them.

The hon. Member for Rochford (Dr. Clark) raised the question of clean burn technology. I have no doubt that additional points will be raised about that aspect later because of the Select Committee's excellent report. I have little doubt that it represents a future for coal-fired power generation in the next decade. However, it seems that the technology is not right at the moment in economic terms to fill the gap and to play a part in the crucial current round of negotiations in which the future of the coal industry in the next three to four years is the most important issue.

Furthermore, Labour's policy of reducing or banning imports of coal and of reducing the development of gas-fired stations is, in many eyes, quite illegal. First, the banning of imports might land the Labour Government in the future in front of a European court and, secondly of course, if the Labour Government attempted to use their 40 per cent. stake in National Power or PowerGen to bring pressure to bear on those companies to reduce the development of gas-fired stations, they might end up in a United Kingdom court for breaking United Kingdom company law.

I believe that Labour's statement that it will maintain the coal industry at

"around about its current size"

is unworkable--especially in the light of the developments that are already in train--and also uncosted. British Coal has an excellent future. There are still sizeable markets within this country and in the European Community. We cannot consider the future of British coal with preconceived notions of output, size and number of pits because that would be unrealistic. Further improvements in productivity and price are, of course, necessary but the price gap between British coal and the generators is certainly not unbridgeable.

8.51 pm

Mr. Alexander Eadie (Midlothian) : In considering this important subject, it would be churlish not to congratulate the Select Committee on Energy on the report that it has produced, which to some extent analyses the current position of the mining industry and its position in the future. However, I wonder whether the Government will pay a blind bit of notice to the report, which illustrates not only what will happen to the mining industry but what will happen if we allow it to contract.

When the Chairman was introducing the report, I intervened on the question of nuclear power. I do not say this in a malicious way or to score debating points, but I said that the chairman of Scottish Nuclear had argued at the Nuclear Forum that there might be a case, in the strategic interests of the nation, to subsidise nuclear

Column 808

power. We have argued for a long time that there is a peripheral argument that in the strategic interests of the nation we should be concerned about the coal industry.

To judge from the way things are going, there will be difficulties in respect of the size of the industry. The hon. Member for Sherwood (Mr. Stewart) wiped about £30 million or £40 million off the take from the coal industry. He said that his first speech in the previous coal debate made the headlines of Coal News , but I do not think that the chairman of British Coal will be grateful that the hon. Gentleman has halved the take and production of coal in his remarks. If we see the demise of the coal industry, the nuclear power industry will be subsidised. That is, in essence, what I was told. Let me remember how unforgiving the nuclear power industry is. To think that we should destroy the coal industry and then say, "Well, if we have no coal industry, we shall have to have a nuclear power industry and what it costs does not really matter because it is in the nation's interest to do it," does not make sense.

When one reads and analyses the admirable report, one discovers a number of threats--the importation of foreign coal, the question of how the board will react to privatisation and the Government's Rothschild report which is not, in fact, a report but a slaughter of the coal industry. The estimates that we are debating propose that a further £4 million should be spent on preparing the future privatisation of the coal industry, but what is £1 million or £2 million between friends? If the taxpayer understood what the Government are planning with this privatisation and what they are doing to the coal industry, there would be no doubt what would happen at the next general election. It is absolutely disgraceful that this proposal should be put before us. Who is getting the millions of pounds? It is certainly not the miners.

The whole point of the admirable report is to point out what is the biggest threat to the coal industry. It is, of course, the gas industry--there is no doubt about that. It is a threat because the Government have sat back willingly and said that they do not care if another 30 million tonnes of coal is taken out of the take and if there are to be gas-fired power stations. One of the hon. Members who spoke earlier pointed out the dangers, and I wonder whether the Government are aware of the dangers of the policy that they are pursuing in relation to gas-fired power stations. It will affect not only the coal industry but the consumers who will have to pay an ever-increasing price for gas.

There is an assumption that gas is a green fuel. The Government are helping to support the idea that coal is a pollutant but that nuclear power is green friendly and that gas is green friendly. In addition, it is said that gas is cheaper, but that is not true on two counts. Because of the lack of time I shall draw attention to a recently published report entitled "UK Energy Policy Post-Privatisation" which was written by Professor Fells. He meets head on the issue of the future of gas and its price. It is time that the Government examined the issue because as a result of the policy that they are actively backing--or at least not opposing--the consumer will face colossal electricity bills because of the escalation in gas-fired power stations.

The report to which I have just referred states :

"Reserve depletion, especially of oil and gas, must still be a concern for the long-term, but in the medium-term, constraints of supply security and the environment are more

Column 809

worrying than is depletion of the resource base itself. Probably now, and certainly after 1992, it is not certain that gas in the United Kingdom sector will be landed in the United Kingdom ; it is likely to be sucked into mainland Europe, where prices are higher. Viewed in this perspective the privilege of the United Kingdom is temporary ; the price and availability of natural gas in the United Kingdom depend"

on many other factors into which I do not have time to go. I put that comment on record as the position is serious.

The hon. Member for Gordon (Mr. Bruce) said that he met the consortium today. He has not discussed the matter with me, although Monktonhall is in my constituency. I have never made any secret about the fact that my view on Monktonhall colliery is that British Coal should reopen the colliery. We have had many meetings on that, and the miners' parliamentary group has met the chairman of British Coal several times. We have had long meetings with the Secretary of State for Energy on the future of Monktonhall. There is no question that the issue of Monktonhall was not put forward, as the hon. Member for Gordon seemed to imply. I have never made any secret of the fact that I believe that the future of Monktonhall lies in British Coal working the pit and we have said that from the start.

It is a bit much for the hon. Member for Gordon to show a report and to say that it was compiled by Labour-controlled Lothian regional council. He obviously has not read the report--

Next Section

Home Page