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Mr. Eadie : If he had, he would not have made the remarks he did. The report on Monktonhall was compiled by an independent consultant ; it had nothing to do with political views. It was unanimously agreed by Lothian regional council, including Liberal Democrat councillors and Tory councillors, that there should be a report. The hon. Gentleman did not say that.
The report said that what was happening at Monktonhall should be costed. It went into great detail about how much it would take to start the colliery again and said that it would cost millions of pounds. It said that the capital's availability in the open market was doubtful and suspect. My view of the consortium has always been, "Good luck to it." However, I am concerned about where the money will come from and what the rates of interest will be. I want to ensure that my constituents do not lose the money that they are supposed to invest.
One does not have to look at the report which the hon. Member for Gordon has thrown away with such disdain. The Government with British Coal decided that they would get an independent consultant's report to study how the mine could be put up for licence--whether under the consortium or under private ownership. I have a copy of the consortium's report and the hon. Member for Gordon should have got a copy because it was identical to the Lothian report. The only difference was that the consortium's report said that it would cost another £250 million for subsidence damage.
The consortium has been advised by a mining engineer who was made redundant by British Coal. He proposes that the coal seams should be worked in the advance. It is good mining practice that if one is to work all the mine that has already been developed--and £60 billion has been
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spent in its development--one does not work it in the advance, but in the retreat. I have good reasons to be doubtful.The hon. Member for Gordon says that the people of Midlothian are sick of the Labour party. The people of Midlothian are sick of the Liberal Democrats, because an argument is going on at present in Midlothian about who most wants to back the consortium and whether it is the Scottish National party or the Liberal Democrats. The Liberal Democrats write to The Scotsman and say that they were the first to back the consortium. They should not play about with people's livelihoods.
Mr. Malcolm Bruce : We did not back the consortium.
Mr. Eadie : I did not interrupt the speech by the hon. Member for Gordon. If the hon. Gentleman wants to make a speech about the constituency of Midlothian, he will have to do a lot more homework than he did tonight. We have problems, and the hon. Gentleman is one of them. We have problems with the Liberal Democrats, who change their mind every five minutes and who have a different policy for every constituency. I want to try to be kind to the hon. Member for Gordon because he is out of his depth. He knows nothing about mining.
I do not know what will happen about Monktonhall. I want it to remain open, but I also want to understand the position. I do not want only Monktonhall, but the 100 years worth of coal which stretches to Musselburgh bay to be developed. Incidentally, I knocked down the girders that were to go to develop a new pit which would come from Monktonhall into those reserves.
I do not need the hon. Member for Gordon to lecture me about my affinity with the mining industry. I worked in that industry for 30 years. My record will stand alongside his in relation to the future of mining in Scotland or in relation to any miners in Midlothian. If the hon. Member for Gordon wants to make speeches criticising the Labour party, he should do more homework first.
Mr. John Home Robertson (East Lothian) : I am grateful to my hon. Friend and constituency neighbour for giving way so that I can express the East Lothian interest in Monktonhall because Musselburgh bay lies under the east Lothian coast. My hon. Friend has long experience in the mining industry and is aware that the proposed privatised operation at Monktonhall would be restricted to an underground work force of only 150 people. Does my hon. Friend feel that justice could possibly be done to the coal reserves in that pit with such a small squad?
Mr. Eadie : I am obliged to my hon. Friend for his intervention. The hon. Member for Gordon treated this matter as a little joke, saying in the local press that everything could be changed in only five minutes. He has said that one only needs a dispensation from the mines inspectorate. That is a load of rubbish. One could not get a dispensation from the mines inspectorate to increase the manpower. I appeared on the Front Bench in the Committee Sitting in which the hon. Gentleman referred and received an assurance from the Minister that getting a dispensation would not be a problem. However, when I tabled a question to that effect, the Under- Secretary of State, the hon. Member for Wells (Mr. Heathcoat-Amory), answered by stating that, before the position could be changed, primary legislation would be required.
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The hon. Member for Gordon does not seem to understand either that primary legislation would be required or that such primary legislation takes longer than five minutes to be put on the statute book.I shall finish on this note--
Mr. Andy Stewart : Will the hon. Gentleman give way?
Mr. Eadie : If the hon. Gentleman does not mind, I will not--
Mr. Stewart : I am grateful to the hon. Gentleman for giving way, because I listened to what he said earlier and have since checked my speech. There is only one small difference between what I said on 14 November and what I have said today. I said on the 14th that the equivalent of 25 million tonnes of coal gas contracts had been given, with a further equivalent of 10 million tonnes lying on the table for the Secretary of State to sanction. I have since discovered that that figure is not 10 million tonnes but 17 million tonnes. That is the only difference.
Mr. Eadie : The hon. Gentleman should read his speech again. I shall conclude now because I am taking up valuable time. When I first became a Member of the House, I learned that one should never speak about things that one does not know or does not understand. As that applies also to the subject of mining, I shall give that advice to the hon. Member for Gordon, who spoke on a subject about which he knows very little--and it showed.
9.6 pm
Mr. Geoffrey Lofthouse (Pontefract and Castleford) : I am sorry that the hon. Member for Sherwood (Mr. Stewart) appears about to leave the Chamber, as I intend to refer to him. The Chairman of the Select Committee on Energy apologised to me earlier for the fact that he has had to leave the Chamber because he is due to make a speech on clean coal technology elsewhere in London.
I listened with interest to the hon. Member for Gordon (Mr. Bruce) when he said that the Labour party did not have much interest in or seek to represent the Monktonhall miners. I assure the hon. Gentleman that the Select Committee carefully considered the Monktonhall bid and that our discussions were forcefully led by my hon. Friend the Member for Dundee, East (Mr. McAllion).
I do not mean to be offensive to the hon. Member for Sherwood when I say that he has entertained us with his prepared briefs in many of our coal debates, but that it is a bit rich of him continually to criticise the contraction of the coal industry when he has supported many of his Government's policies on the industry. I hope that the Nottinghamshire miners and Coal News will note that that is hypocritical. When I read Coal News after our last coal debate, it appeared as though the only people to speak on behalf of the mining industry were the hon. Member for Sherwood and his hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo). I hope also that British Coal has not helped to produce some of the briefs that we have heard in previous coal debates.
I am a long-standing member of the Select Committee on Energy and like, I am sure, many other members of that Committee, am beginning to feel like a parrot. We have produced reports year after year expressing anxiety at what was happening to the British coal industry. Over the years, we have had different witnesses, different Secretaries
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of State and different chairmen of British Coal. They have told us, "There are no figures at all. All you read in the newspapers about running down the mining industry has no truth in it."However, the Select Committee report is based on clean coal technology, on which we have taken a great deal of evidence from expert witnesses. I am trying to cut my speech short because other people want to speak. I simply say that it is fairly obvious that Britain could have taken the lead in clean coal technology. Unfortunately, we have failed to do so. We have had leading opportunities in British Coal's topping cycle for coal-fired generation. We had the British Gas Lurgi coal gasification and coal liquefaction. We have failed miserably to support those experiments financially.
The Government contribution to the Grimethorpe project was much less than that of foreign Governments. We now find that, because we have failed in the past 10 or 12 years, to recognise the need for clean coal technology and support the schemes that were in operation, it will take eight to 10 years for plants to become operative and produce clean coal. In the meantime, foreign competitors are moving ahead of us.
The biggest problem is that when the clean coal technology plants are available, judging by present progress, the British coal industry will be run down to such an extent that it will not be able to meet the demand from the plants. Once again, we shall be in the hands of our foreign competitors.
It is rather ironic that we continue to run down our coal industry and sterilise billions of tonnes of coal. I shall refer to the Rothschild report later. I hope that the Government have read the latest British Coal press release from its chairman. I shall not read it out, because there is not time, but it makes the very point that, purely and simply for medium- term policies and commercial reasons, we shall sterilise billions of tonnes of coal.
Mr. Illsley : May I draw my hon. Friend's attention to the Government's response to the Select Committee report? Both he and I were members of the Committee when the report was produced. The Government's response was :
"it is not true to say that the reserves are lost forever if pits currently accessing them are closed."
On the following page, the British Coal memorandum says : "The Committee is right to draw attention to the fact that, once a mine is closed, the capacity is effectively lost."
Does that not show how wrong the Government are?
Mr. Lofthouse : Now that my hon. Friend has brought me to the matter, it is right to put on record the comments of the chairman of British Coal in the press release. :
"Speaking in London almost a year after becoming Chairman of British Coal, Mr. Clarke said : What we are seeing is a sort of energy arms race, with attempts to justify it on the grounds of guaranteeing security, diversity and competition--but in reality, guaranteeing nothing but higher electricity prices, a rapid abandonment of other fuel reserves, and reliance on as yet unproven overseas resources.' Coal's advantage still held good when account was taken of the cost of fitting flue gas desulphurisation equipment, said Mr. Clarke. The next supply contracts which British Coal will negotiate with the big electricity generators would offer electricity users an even better deal because of coal's success in reducing costs. This is no exercise in abstract economics for British Coal, ' Mr. Clarke stressed. The dash for gas affects us directly, and in a particularly perverse way.' The economics of gasfired stations meant that investors
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wanted long term supply and sale contracts to make them bankable. Typically, such contracts were for 15 years. Each new contract, each new gas station, eats into coal's share of the market--a share we could supply competitively. And we have to close down capacity as a result. Because we can't re-open mines, that capacity is lost for ever.' "That is the case, and no expert would refute it.
The future of British Coal depends on the results of the next general election in a few months' time, and I do not think that any hon. Member or the Minister would refute that. That will decide whether we have a mining industry able to supply the demand for coal in the medium and long term, or whether we shall have the Rothschild recommendations. The Minister has an obligation to tell us whether the Government intend to implement Rothschild if they are returned to power. If that is the case, we may as well throw all our debates and the report out of the window.
The Minister has heard speeches from the chairman of the Energy Select Committee and all its members, including my hon. Friend the Member for Barnsley, Central (Mr. Illsley) and the hon. Member for Erewash (Mr. Rost), who have been privileged to listen to expert witnesses. People without any political bias have given honest evidence and enabled the Select Committee to produce the report, which was a genuine effort to draw to the attention of the Government their folly in running down the coal industry to the extent that they are planning to do.
The Committee has done so in the past, but the Government have taken no notice. Even though they are hellbent on privatising the coal industry, I hope that at this late stage they will take notice of the Committee's report. It is a sincere and honest endeavour to try to inform the Government of exactly what is happening to the industry and what folly it would be if they allowed privatisation. I hope that there will be no opportunity for the Government to introduce the Rothschild recommendations and that a Labour Government will be returned. They will treat the mining industry and the country in a responsible way and will maintain reserves of fuel which the country so badly needs in the medium and long term.
9.17 pm
Mr. Kevin Barron (Rother Valley) : I do not know whether the Minister would agree that, until now, we have heard explanations from both sides of the Chamber about the imperfect and expensive competition which has arisen as a result of the privatisation of the electricity supply industry. The House should ask what we are doing taking a decision on class V, vote 9, which will give the Government an extra £4 million from the Consolidated Fund
"to defray the charges that will come in course of payment during the year ending on 31st March 1992 for expenditure by the Department of Energy in connection with the privatisation of the coal industry."
I do not know whether the Minister agrees with the evidence given by the hon. Member for Erewash (Mr. Rost) and by my hon. Friends about privatisation of the electricity supply industry. However, it is obviously as much a waste of funds to give money to privatisation of the coal industry as it was to give money for the poll tax.
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A lot of nonsense has been talked--and a lot of myths--when the privatisation of the coal industry has been discussed in the House and elsewhere."Now the first myth that deserves a liberal dollop of embalming fluid is the notion that British Coal management can't do the business. That a change of ownership would usher in new ideas and allow productivity to soar and new markets to be exploited." I do not know whether the Minister agrees.
"I can tell you that's absolute rubbish".
Also, people believe that there can be "a quick fix". I do not believe that there is a quick fix for the coal industry. Anyone who thinks that he can improve on the commitment and effort of British Coal managers reveals how little he knows about the coal industry and coal mining.
Those two quotes about "absolute rubbish" and "a quick fix" are not my words ; they were taken from the speech made on Thursday last week by the chairman of British Coal. He ought to know ; he was appointed by the Department to run British Coal. He says that the idea that British Coal can bring anything new to the industry or the nation is a myth. I should like the Minister to tell us whether he believes the myth about privatising the coal industry. If it is a myth, how can he justify the request for another £4 million of public funds to be spent on merchant bankers and other advisers like N. M. Rothschild sending reports into the country in brown envelopes which show that the future of the British coal industry is bleak?
We are debating the issues in the report of the Select Committee on Energy. I welcome the commitment of the Select Committee to secure the future of the coal industry in Britain and to develop a credible long-term strategy for research and development of clean coal technology. The whole House should commend the conclusion of the Select Committee in paragraph 89 that the strategy must include "recognition that the UK is unlikely to succeed with clean coal technologies against foreign competition unless the Government is as supportive towards those technologies as competitors' governments." The failure to support our industry is amply illustrated by the Bilsthorpe and Grimethorpe projects. In the case of Bilsthorpe, the Secretary of State's excuse for lack of Government support was that the project was neither commercial nor a demonstration project. In paragraph 78, the report records the Secretary of State as saying : "the view that we took was that the technology that was involved was reasonably well proven We were perfectly satisfied that it would work."
While the Government were refusing to take a 20 per cent. stake in the project, a fluid bed boiler of the same size and design was built at a mine in Lorraine on the initiative of the French Government, who funded 60 per cent. of the cost. That is a fair example of how Britain is lagging behind the rest of Europe.
In their response to the report, the Government have said that the Bilsthorpe project failed to achieve the support of the European Commission after an assessment by technical experts. Is not it the case that the European Commission, through the THERMIE programme, would back Bilsthorpe only if it was certain to go ahead, and that the only way to ensure that was through Government support? All the indications are that the Government did not support it and, as a consequence, it was not supported by the European Commission. Now the Government choose to blame the European Commission instead of putting the blame where it rightly lies--on their own lack of support for the project.
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We have also had what is described by the Select Committee as the "sorry tale" of the Grimethorpe topping cycle. In paragraph 72, the Select Committee says that it reflects"the lack of a long-term strategy and the failure to review the R & D role of the Government and other bodies in the wake of privatisation."
Apparently, the Government now agree that such a long-term project needs to be funded in such a way as to avoid unnecessary delays. I wonder whether the Minister can tell us whether the project at Grimethorp is now securely funded, so that it will be able to complete its programme of 1,250 hours of operation? Will the money run out, as it did once before, with the consequential loss not only of the technological advantages gained but of the scientific and technical expertise? My hon. Friend the Member for Barnsley, East (Mr. Patchett) has taken an avid interest in the Grimethorpe project, not only because of its impact on his constituency but because of its impact on energy development. Will Grimethorpe complete its current programme without any further problems? My hon. Friend and I want to know the answer.
The report of the Select Committee is notable because it managed to clarify the Government's position in relation to the generators commitment to retrofit flue-gas desulphurisation systems to coal-fired power stations. Paragraph 107 of the report notes the Secretary of State insistence that PowerGen, the smaller of the two generators, cannot withdraw from its programme of 4 GW of FGD retrofits to coal-fired stations. However, from evidence submitted by McLoskey Coal Information Services and the British Association of Colliery Management it is clear that orimulsion, the fuel from Colombia, has a higher sulphur content than British coal. That means that those coal-fired power stations which use that fuel need FGD retrofitting. National Power and PowerGen have been given permission to burn that fuel at their power stations at Pembroke, Richborough and Ince.
The Select Committee took a great interest in the issue of FGD retrofitting. Will the Minister confirm that the Government will take the necessary steps--if necessary through Her Majesty's inspectorate of pollution--to ensure that PowerGen complies with its commitment to retrofit 4 GW of coal burn should it not do so voluntarily? The Ferrybridge sea power station has not got permission for its 2 GW coal burn. That power station is the biggest sulphur emitter in Britain, and any investment in plant to get rid of sulphur emissions should be directed at such a power station.
Will the generators be required to retrofit FGD if they decide to burn orimulsion? Would the sulphur emitted by that coal be in addition to the 4 GW limit set now?
It is a pity that the hon. Member for Cambridgeshire, North-East (Mr. Moss) is not in the Chamber. Attendance on the Conservative Back Benches is thin to say the least, especially when the Government tell us how much they support the coal industry. I note that my hon. Friend the member for East Lothian (Mr. Home Robertson) has moved to those Benches in an attempt to put the imbalance right.
The hon. Member for Cambridgeshire, North-East made much about sulphur emissions, but the Government are taking no action to stop generators bringing in foreign coal. Surely that behaviour is anomalous. The Government say that those generators need the coal
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because it has a lower sulphur content, but at the same time they give them permission to burn orimulsion, which has a higher sulphur content than any coal produced in Britain. The Minister must explain that dichotomy.The consultation paper of the coal task force recommended : "the Government should accept the need for it to take action to provide a framework to encourage the development and promotion of new cleaner coal technologies"
That view is also reflected by the Select Committee's report, paragraph 67 of which states :
"without Government assistance no demonstration plants wil be built. Without demonstration plants, the UK's clean coal projects cannot proceed towards commercial implementation. Without commercial implementation, the UK's R & D in this field will have been largely futile."
Most people would agree. I hope that the Government will take on board what the all-party Select Committee has said about clean coal technologies and act on those recommendations as a matter of urgency.
The second part of the Select Committee report is about Government intervention in long-term contracts for the British coal industry. Paragraph 137 of the report says :
"it is precisely because of the uncertainty over future energy needs and supplies that secure, indigenous sources of fuel are important."
Indeed they are, and most energy commentators in Britain take that view. We do not know whether a certain institution takes that view, because it has little to say about whether the long-term security of indigenous sources of supply is an asset to Britain. The institution to which I refer is the Department of Energy.
Even so, the Government reiterate their belief that the supply of fuel is a market-only decision. They
"believe that only the participants in the market can have the necessary knowledge and the incentive to determine the economic size of an industry. It is therefore for the electricity supply industry to ensure that it has access to secure long-term supplies of competitive fuel."
In stubbornly repeating that, they rebut the Select Committee stance which rejects total reliance on the market. Indeed, in its conclusions in paragraph 149, the report points out :
"if the generators take decisions which turn out to have unfortunate long- term consequences, it is the nation as a whole (and electricity consumers in particular) who will pay the price, rather than the generators themselves."
If decisions are taken for short-term economic reasons and in the full knowledge of their likely effects, a future Labour Government would not see their duty lying in protecting the profits of the generating companies at the expense of consumers. I want the message to go out loud and clear that a future Labour Government would not feel that we had to put consumers at risk because of decisions taken now by generators in the knowledge that, while coal is offered at home with guarantees on its price structure for years to come, they feel that they should run elsewhere for short-term economic gain. The Government's stated belief in a free and open market on the basis of willing buyers and willing sellers, their unwillingness to subsidise what they term uneconomic production and their rejection of the coercion of customers sits uneasily on the protection of the nuclear industry's markets through the non-fossil fuel obligation and the nuclear levy.
In the debate on Second Reading of the Coal Industry Act 1990, I spoke of the European Commission's proposed reference price for coal. The Minister seemed unaware of the proposals. Indeed, he said :
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"He did not tell us what was in that plan"--referring to the plan that I had mentioned--
"other than mentioning something called a reference price".--[ Official Report, 14 November 1991 ; Vol. 198, c. 1318.]
It was astonishing to hear a Minister say that in November 1991, when the European Commission had for many months been discussing exactly that matter in relation to the future of the European coal industries.
The Select Committee has no such qualms, for it said in paragraph 145 :
"the concept of a reference price band is an important step towards a harmonised policy in respect of European coal reserves and towards defining the value of the security which indigenous coal production provides."
The Select Committee called on the Government to play an active part in the deliberations on that. When one considers that that was said in July and that the Minister responsible for coal said in November that he did not even know about the reference price, one cannot have a great deal of faith in him or in his ability to protect the British coal industry.
The Government's formal response to the Select Committee is muted, to say the least. They will give, as they call it, only "careful consideration" to proposals when they emerge, rather than be actively involved in formulating the proposals. That should come as no surprise to us, given the Government's record. Nevertheless, it is disappointing that the Government do not take a more positive attitude.
In a recent letter to George Stevenson MEP, the EC Director-General for Energy said :
"the Commission believes that the current world market price for coal is not a sufficient criterion for assessing the competitiveness of Community coal. It is therefore realistic to define a security premium for the Community coal production which covers both the long term prospects for the evolution of the world coal market and the coal supply security."
I hope that the Minister will join more enthusiastically in the vital discussions on long-term markets and security of supply which affect the future of the British coal industry.
The Commission's paper on reference prices says :
"it would be particularly unfair for pits to continue to close in those Member States which have nearly completed the restructuring exercise, while substantially less productive pits in other coal-producing Member States are kept running thanks to a national system of subsidies and other protective measures."
That was also pointed out by the Chairman of the Select Committee. Surely that covers the British coal industry because, if our restructuring is not complete, how many more pits will have to close in Britain?
The letter to George Stevenson MEP also states :
"Further reductions of British coal production capacity are certainly worrying."
It is a shame that the Government are not worried by such prospects. Their approach to negotiating a new contract between the coal corporation and generators is a clear expression of their easy come, easy go approach to the coal industry. I cannot believe that it is in the national interest for the Government to proceed as they have. We must not lose the nation's assets because at some stage there will be a national crisis in terms of where our energy resources should come from.
I do not think that I could conclude my speech better than by reporting the warning in the conclusions the Select Committee report :
"if a significant proportion of the UK's coal reserves were abandoned resulting in a major reduction of long-term
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energy security, the Government should understand that the country would see this not as a commercial decision, but as a largely irreversible decision of historic significance for the UK." I hope that the Minister and the Department of Energy will take our great national assets more seriously than in the past and ensure that we have an asset that will serve the national for many generations to come, as it has for centuries past.9.37 pm
The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory) : I congratulate the Energy Select Committee and alwho serve on it on the quality of their report, which is one of the subjects of this evening's debate. They examined the prospects for the coal market after 1993 and the possibilities of clean coal technology. Naturally, I do not agree with all their conclusions, but I recognise the high standard of the report.
I listened with particular interest to the opening speech of my hon. Friend the Member for Rochford (Dr. Clark), who spoke with great authority on his report. He has given me notice that he is unable to be here for the latter part of the debate. Obviously, I entirely accept his apology and there is no possible discourtesy. My hon. Friend and other hon. Members referred to the painful restructuring that has taken place in past decades in the British coal mining industry. There is nothing new about colliery closures. Indeed, my hon. Friend the Member for Cambridgeshire, North-East (Mr. Moss) drew attention to periods under Labour Governments when similar pit closures were experienced and large numbers of coal miners were displaced.
We have ensured that restructuring and social grants are available to help that painful process. We have also provided deficit grants to aid the industry more directly. Since 1979, more than £7.5 billion of new investment has been made available by the Government through British Coal. The total grant aid provided in those years comes to more than £17 billion--including more than £6 billion of deficiency grant provided in the Coal Industry Act 1990. It cannot be said that the taxpayer has been stingy in supporting the industry.
Mr. Derek Enright (Hemsworth) : Does not the Minister agree that the blocking of the RECHAR grants has deliberately stopped considerable sums of money that should have come to districts such as mine, which was a considerable blow?
Mr. Heathcoat-Amory : That is a separate issue. I regret that one of the European Commissioners is apparently refusing to release RECHAR money to this country as it could be of direct assistance to some of the affected regions. I know that discussions are taking place between the Government and the Commission on that issue, and I hope, that before too long, the Commissioner involved will authorise the release of the money, which we can certainly put to good use. I am sure that all hon. Members recognise--it has been asserted again in the debate--that the coal industry faces competition from other fuels. That would be true under any Government and whether the industry were in private or public hands. It faces competition from the nuclear industry, the growing number of renewable energy sources
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