House of Commons Hansard Debates for 18 May 1992

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generators are still owned publicly. He should use that muscle now to facilitate those discussions : unless he does, the hopes that the hon. Member for Finchley (Mr. Booth) expressed of the work force having a share in the industry will come to nothing. If the contract is short term, low volume, there will be nothing left for the work force to have a stake in. We shall be talking, as the Government's advisers are, of a rump of perhaps 12 collieries throughout the country.

I put some specific questions to the Minister, which I hope that he will be able to answer. Will he continue with the present commitment of no compulsory redundancies in the coal industry? Will he guarantee that those who work in the industry, who have been productive and have turned it around will not be thrown out on their ear, and that there are plans and schemes for a proper reduncancy scheme offering a real commitment to the work force and real pay-offs? Will he ensure that the people who leave the industry do so on agreed terms and are not thrown out compulsorily?

Will the Minister make some pledges on pensions, which are a part of earnings? British Coal's pension fund is perhaps the largest in the United Kingdom. It is a large profitable fund, but most particularly it is in surplus. It has been accumulated by the work force, who are anxious about its future. Will the Minister say today that those assets are the assets of the people who have worked and built them up and that they will not be cherry-picked by some private company?

The Bill has been described as short, but the issues behind it are complex. They deserve careful and considered thought. Issues such as those raised by the hon. Member for Finchley and by my hon. Friend the Member for Wentworth (Mr. Hardy) deserve consideration. The future of the coal mining industry lies in the balance. It must not be driven by dogma and ideology or by policies that are geared to pride and prejudice and ignorance and arrogance. The Minister must live by the commitment that he made in Nottinghamshire last week that he would consult widely and listen to informed voices in the coal industry. If he does so, he may win few friends, but he will win a great deal of respect.

7.9 pm

Mr. Richard Spring (Bury St. Edmunds) : May I add my

congratulations to you, Mr. Deputy Speaker, on your election to office and wish you well for the future. I also congratulate the hon. Members who have made their maiden speeches today, in particular my three hon. Friends the Members for Finchley (Mr. Booth), for Aberdeen, South (Mr. Robertson) and for Kincardine and Deeside (Mr. Kynoch) who made especially good speeches.

Some hon. Member may not be familiar with an event that took place in the summer of 1989 during the Japanese general election campaign. An Opposition socialist politican found himself on the bullet train--the express train-- going directly to Tokyo, but he had to undertake a speaking engagement somewhere along the way. He was very alarmed, so he managed to persuade the driver to stop the train to let him off so that he could fulfil that engagement. The next day, the national press got hold of the story and the politician was forced to resign. The

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reason for his resignation was not so much that he had behaved in an imperious fashion as that the bullet train was two minutes late. Somehow, I cannot conceive of that happening on the Norwich to London inter-city line.

The latest evidence is that about one in eight of the inter-city trains which pass through Suffolk are more than 10 minutes late. Many thousands of cancelled or delayed appointments and sheer frestration make up that picture. The net result is that a successful and popular bus service has started between my constituency and central London. The journey is cheap and comfortable and, needless to say, that bus service is private.

There is no doubt that, in the 1970s, British Rail, as it was then, was very much production-led. It has moved on and has become more consumer- oriented and sensitive, and management has been forced to be more aware of income and outgoings. However, it is clear that there is still much to be done.

Substantial sums have been invested in British Rail. In my region, the line between Ipswich and Norwich has been electrified and there has been a magnificent reconstruction of Liverpool street station. By the end of the year, the age of the rolling stock in Suffolk will have decreased from an average of more than 20 years to only two years. That pattern of substantial investment is happening all over the country.

However, it is true that no business or service can survive and prosper unless it attracts customers. That is a universal truth, and British Rail must compete with buses and the motor car. There are also other problems and there always will be as long as BR remains a monopoly. That is the central cultural problem of any nationalised industry.

Let me illustrate what I mean. Two Saturdays ago, my wife and young son Frederick, who is five, were travelling home to Suffolk on the train. On the journey, which takes one and a quarter hours, my son became thirsty so they went to the buffet car to ask for a glass of water. No such thing was available but my wife was invited to purchase a bottle of expensive carbonated water. I do not think that any hon. Member or sensible parent would want to indulge his five-year-old son in an early taste for expensive designer fizz. My wife declined to do so.

It is incredible that one can buy an expensive, gourmet, Clement Freud sandwich from the buffet car but not a glass of water--what an extraordinary disincentive to parents who wish to take their young children on rail journeys. It is extraordinary that such a basic provision is unobtainable. I do not wish to criticise the buffet attendant who was merely carrying out orders, but I criticise the overall culture of British Rail. It is not sufficiently user-friendly.

In time, the House will want to consider the proposed detailed structure for our rail services. The formula setout is eminently sensible. I said that BR needs to be market-orientated and customer-driven, but there is still one vital missing ingredient. I have been struck many times by the friendliness and courtesy of BR staff. It cannot be much fun to be a platform guard, a conductor or a ticket inspector when one is always having to apologise so embarrassingly for BR's poor performance.

People are motivated by a variety of reasons. Some want to make a lot of money from employment while others are not interested in that, but there is a common thread among individuals who work for all successful

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organisations--pride and motivation. British Rail--the great state monolith--frequently ill-serves its own work force. It lets them down.

Before the Anglia board of British Rail was wound up, it produced a report on privatisation and the future of the railways. It stated : "BR's workforce is characterised by lack of dynamism. Almost all promotions or new jobs are filled from within with little new blood injected from outside lack of external orientation and preoccupation with internal railway community issues little awareness of market needs or potential defensive attitudes abysmal communication skills both inside the organisation or outside." It continues :

"At all levels, BR is largely populated with people who are ... lacking positive attitudes Many BR employees at all levels give the impression of being under siege which in turn gives BR the reputation of being a place to avoid if one is seeking employment."

It concludes :

"The organisation has stagnated at exactly the time that fresh insights were needed to meet the challenge of improved efficiency and market orientation."

No business or public service can thrive with such manpower difficulties.

As we begin to restructure our rail services, let us fill in the one vital missing ingredient--a keen and motivated work force. We have seen how productivity soared in our once moribund car industry. We have seen the effect on British Airways where attitudes were transformed after denationalisation. Rail franchisees will have the opportunity to compete to provide the best, thus spurring on a sense of involvement and commitment in the work force, which will have an infinitely greater chance of being motivated if they have pride in a railway system that is effective, punctual and liked by the British public.

From the vantage point of 10 years hence, I hope that we--passengers and rail employees alike--shall be able to look around at the best railway service in the world. The environmental advantages would be substantial and the advantages for the economy and for the taxpayer would be enormous.

7.18 pm

Mr. William O'Brien (Normanton) : May I first congratulate you, Mr. Deputy Speaker, on your appointment. This is the first opportunity I have had to offer you my best wishes, and I am sure that you have the confidence of the whole House. I also congratulate the hon. Members who have made their maiden speeches in this very important debate. The debate covers two significant businesses--the rail and mining industries--and it is clear that a substantial number of the hon. Members who have spoken have knowledge of those industries. I shall refer specifically to the mining industry in which I worked for many years and about which I know most. The Secretary of State compared the Bill to the Public Utility Transfers and Water Charges Bill which paved the way for the privatisation of water and electricity. I served on the Standing Committee that considered that legislation. This Bill is just as pernicious and mischievous, and it is even more dangerous than the paving Bill for the water and electricity industries.

The privatisation of water benefited greatly from the paving Bill. One of the issues that became clear during the debates on paving the way for water privatisation was the

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shape and way in which privatisation would come about. We knew that there would be 10 water authorities and we knew their boundaries. Can the Minister tell us how the coal mining industry will be reorganised for privatisation? Is there a set programme? Will it involve the sale of coal or the sale of collieries? If individual collieries are sold, how will that take place? People in the mining industry want to know how the privatisation of the industry will evolve, and what practices and procedures will be followed. We had such information when we talked about the paving procedures for water. I hope that we shall be given some information about how the mining industry will be presented for sale.

My interest is the mining industry, but I will refer briefly to the provisions for the privatisation of rail. I draw attention to the development in West Yorkshire under the auspices of the West Yorkshire passenger transport authority. There is investment, mainly by local authorities, to use British Rail lines and to use the facilities to develop contacts between communities and town centres. The authority is providing stops for some of the villages to link them with the towns of Pontefract, Castleford, Wakefield and Leeds, thus reducing the amount of road traffic needed to take people from the villages into the town and city centres. That is an example of how municipal authorities are developing rail communications in their areas.

I hope that that principle will be upheld and that the service being developed by local authorities will not be withdrawn if private companies consider that the profits--if any--from those links are insufficient for them to be maintained. I hope that the development and planning by the local authorities that form the West Yorkshire passenger transport authority will be maintained and further developed to link the communities with the towns and cities. Mining is my background. I reflect on the history of the mining industry before and after nationalisation. Nationalisation was introduced because of the working conditions that people in the mining industry had to endure, especially during the war years. There were terrible working conditions and the pay structure could only be described as a system of slave labour. There was a tremendous shortfall of the supplies and supports needed to ensure that people in the industry could work in safety. Not only people connected with the mining industry, but many who supported the Conservative party were concerned about the conditions that miners and their families had to endure and they believed that something must be done about them. That is the basic reason why nationalisation was introduced. There were tremendous advances as a result of nationalisation. There were improvements in working conditions. There was an improvement in the consultation between the work force and the management. There were improvements in the mining communities with the development of the social welfare programme. Those were all results of nationalisation.

I and people who live and work in the mining communities fear a return to an industry in which profit comes before quality of life. We fear that corners will be cut in safety in the mining industry. I hope that any legislation will include safeguards for the people who work in the industry and for the communities that depend on ming operations.

There used to be 80 or 90 pits in West Yorkshire. We are now down to four and there are question marks over

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two or three of the pits as a result of the Bill. The House should understand the concern that I, my colleagues and those whom we represent in the mining communities have when such legislation is introduced.

I remind the House of the miners' loyalty to the nation for many decades. With the introduction of nationalisation, we secured the five-day week. The miners were immediately asked to work Saturdays to secure greater production. No one can doubt that the loyalty that had been demonstrated throughout the history of the mining industry was shown again when the miners produced the coal that was necessary for the economy. The loyalty and service given by miners in the past should not be forgotten. There is a great deal of suspicion in the mining community because of the way in which the mining industry has been decimated over the past 10 to 13 years.

The miners and their families in West Yorkshire especially and the mining communities in general deserve a better deal. There must be better provisions for protecting the health and safety of the communities in the mining areas. We await with interest the outcome of the negotiations between British Coal and the electricity generators and are watching carefully to see what form the contracts will take. Short-term contracts will not help the mining industry to plan or assist its long-term development. The suggested three-year contract period for the supply of coal to the generating industry is insufficient and will not give the industry an opportunity to plan for the future. At present, 65 million tonnes are supplied annually, and that figure should be maintained. The level of supply to the power stations should be safeguarded. A reduction of 25 million or 30 million tonnes will not do anything to help the mining industry. I am not asking for the industry to be protected. I am merely reiterating what has been said by the Coalfield Communities Campaign--local authorities that realised the problems that would develop with the closure of pits--which has made it clear that the nation will face problems if we do not strike the right balance in the provision of electricity. If we are to have a long-term contract involving North sea gas reserves being used to generate electricity, we shall have to accept that we may eventually have to depend on Russian gas if the generating industries' demand for gas cannot be met from North sea gas reserves. That could mean electricity consumers paying dearly for their electricity.

The chairman of British Coal recently warned that "short-sighted and uneconomic" decisions on gas generation would rebound on electricity consumers. He said that the dash for gas was not about competition giving lower prices but about competition to secure a market share and that electricity customers would have to foot that bill. Such warnings come not from Labour Members or the miners' representatives but from captains of industry--people who have been appointed by Ministers. They are now telling those same Ministers that we need to examine provision for the generation of electricity, but that gas is not the answer and that coal should be preserved for electricity generation.

The chairman of British Coal, Neil Clarke, went on to say that, at the same time, each gigawatt of gas-fired generating capacity "will render redundant some of the most modern coal-fired power stations in Europe."

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He said that the threat was growing quietly but frighteningly and quickly and that gas could replace more than 40 million tonnes of British Coal's 1992-93 sales of65 million tonnes to the generators. Meanwhile, the Chairman of the Select Committee on Energy said that he suspected that in 15 years' time gas prices would have risen so high that no stations would be under construction and that the ones now being built would probably be closing down. So Conservative Members are sounding warning notes, telling the Government that their policy on the generation of electricity is both inadequate and wrong.

Much has been said in the past about British Coal Enterprise Ltd. and the money that is being spent to generate jobs and retrain mineworkers who have been made redundant through pit closures and for whom no alternative work is available. In many of the villages where pit closures have taken place, no job opportunities are available. Job opportunities in the pits have been dramatically reduced in our area, but, according to my research, very few opportunities are being afforded to redundant mineworkers. Indeed, in the whole of the West Yorkshire area, which has suffered 14,000 redundancies in the past five to seven years, a maximum of 200 jobs have been created by BCE and its associates, including the Wakefield Pension Trust. The issues will have to be addressed. We are talking about redundancies and retraining, the future of the mining industry and the nature of the privatisation exercise. We are talking about building up confidence in the communities and in areas where people still depend for their livelihoods on going to the pits. As we have heard nothing today about the practice and principle of the sale of the mining industry, we should vote against the Bill, which does nothing to help the mining industry or, indeed, British Rail. 7.36 pm

Mr. Eric Clarke (Midlothian) : I congratulate you, Mr. Deputy Speaker, on your appointment to the Chair and thank you for calling me to speak in the debate.

As an ex-miner, I propose to talk about the coal industry and to address my remarks not to miners or those who work in the mining industry but to those outside who are aware of the importance of energy. The Minister should take note of the fact that, in a modern society, the top priority of any nation must be an abundance of power for industrial and domestic use. In the United Kingdom, we are extremely fortunate in having oil, gas and coalfields as well as nuclear know-how. In that respect, we are better off by far than many of our industrial rivals, including Germany and Japan.

The trouble is that the Government have a short-sighted attitude to our energy requirements. There is no Government control of the rate of exploitation of North sea gas or oil. The Government take a laissez-faire attitude to the power companies building gas-fired generating units and also to the increased importation of so-called cheap coal, from whatever source.

How long will that continue? The obvious damage to our strategic energy resources in the North sea, the rundown of our coal industry--with massive unemployment and a loss to the nation of skilled miners--and an increasingly severe balance of payments deficit caused by

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fuel imports are all the result of short- sighted policies, and the nation is paying a high price merely to retain its present standard of living.

The forecast in the oil export trade is that costs will rise dramatically in the future. Many exporting countries will withdrawn from the world market because of an increase in home demand for coal as their standard of living rises and industrialisation advances. We need only consider Poland and China. Although they have not ceased to export coal, they are finding it very difficult to provide for their markets because of home demand. If there is an increase of 5 per cent. in home demand for energy in third- world countries, the cheap coal available today will disappear more or less overnight. There is worse to come : it is forecast that freight rates for bulk carriers are to rise. If the cost of replacing existing Panamax bulk carriers is added to the pit head price of coal, the present price advantage will be wiped out. Most of the flag of convenience, third-world crewed bulk carriers are at the end of their working lives. There are no more surplus, moth-balled bulk carriers tied up in fjords or sea lochs to replace them cheaply. Practically all the European shipyards which built bulk carriers have closed or diversified into shipbuilding or North sea activities. It will be a seller's market in future. As a consequence, prices will be high and freight rates are forecast to increase. Those costs will obviously be passed to the customer.

Other costs will increase because exploitation and exploration are forecast in offshore waters, particularly in depths of more than 300 ft. It has been forecast that there will be submersible platforms in the Bering strait. Such exploration is technically possible. BP Alaska has exploited oil reserves in very difficult circumstances, but that was expensive and has an obvious knock-on effect on prices. Would it not be sensible to control the rate of North sea oil reserves? Would it not be sensible to preserve our natural gas reserves for domestic and industrial markets and not generate short-term electric power which burns massive amounts of our precious gas reserves? Would it not be sensible to retain an indigenous coal industry and the skills of the work force and the mining supply companies, with their export potential to other coal mining and producing countries?

We should to that not just in our name or that of the Government, but in the names of our children and grandchildren before it is too late. Those and many more problems could be handled if the Government gave back to energy its proper priority. The Government should re-establish an Energy Department. The responsibility for energy should not lie with a so-called industrial Department. The Minister said that there is a Minister for Energy, but he is part of the Department of Trade and Industry. Energy does not deserve such a relegation.

Energy is very important, but the Government have relegated it. I believe that they have relegated it because they do not like the Select Committee on Energy, which might ask too many embarrassing questions. If that is not the case, perhaps you can prove it by resurrecting that Select Committee.

Many people would agree with what I have said. I hope that our future generations will be prosperous because we will take care of our resources in this country and elsewhere. We will have to face those energy problems

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whether or not British Coal is privatised. I hope that you will face them efficiently with the help of all hon. Members because our future is very important.

I do not want to refer at great length to the comments of the hon. Member for Gordon (Mr. Bruce), who has now left the Chamber. However, he referred to a colliery that is in my constituency. If one of the people who puts up £10,000 to get a job loses that money, I will hold the hon. Member for Gordon responsible because he and others seem to be encouraging that practice. That is not the right way to get a job in the mining industry. The hon. Member for Gordon is playing political football with that colliery and the people in Midlothian cannot afford to pursue that course of action.

I hope that I will not upset anyone, but the hon. Member for Aberdeen, South (Mr. Robertson), in his maiden speech, said that the mining industry can learn lessons from the North sea industry. I believe that the reverse is the case. The regulations in the coal mining industry are far better than the regulations for the North sea industry. Similarly, Her Majesty's inspectorate in the coal industry is better than that in the North sea. Recognition of trade unions is also better in the coal industry than in the North sea. Victimisation in the coal industry is not as bad as it is in the North sea. I believe that the North sea industry can learn a great deal from the coal mining industry. However, the industry in the North sea has learnt that we sometimes have to have a disaster before legislation is changed. We should not have to pay that price. The Piper Alpha disaster was one too many. Similarly, any disaster in the mining industry is one too many. We are concerned that safety standards might be watered down if there is privatisation.

Having made my maiden speech, I have waited patiently for some time today to make my second speech. I believe that the British Coal and British Rail (Transfer Proposals) Bill is an appendage to the privatisation of the coal industry. The coal industry is a major and important industry. If it is handled properly, it has the potential to supply energy and be more important than gas and oil in future. You have the responsibility of the nation's future in respect of the coal industry in your hands. I hope that you will act accordingly because we will be watching very closely how the privatisation develops. I hope that it will be carried out sensibly.

Several Hon. Members rose --

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : Order. The hon. Member for Midlothian (Mr. Clarke) has just made his second speech in this House. In future, when referring to right hon. and hon. Members, he should not use the word "you", because he refers to me when he uses that word.

7.46 pm

Mr. Andrew Mitchell (Gedling) : It is an honour to follow so many brilliant maiden speakers from both sides of the House. I particularly enjoyed the speech of my hon. Friend the Member for Aberdeen, South (Mr. Robertson) who demonstrated so eloquently that the Conservative party in Scotland is alive and kicking, making gains and doing very well indeed.

I support this paving Bill. It is hard to understand why any hon. Member should not support it in the Lobby. It is an important measure which ensures that the pledge given

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during the general election in the Conservative party manifesto for the privatisation of the railway and mining systems are carried through in the most sensible way possible. The Bill is necessary so that preliminary work can be carried out and the right method of privatisation can be assessed and discovered.

The Bill is clearly a logical continuation of the privatisation programme which the Government have been pursuing for 11 years. We have seen its obvious success in many other industries. We have seen the success for workers in those industries, for the customers and for the shareholders. It is right that those successes and opportunities should be extended to rail and coal.

I welcome rail privatisation, the guiding star for which should be benefit for the customer of a better railway service. We should try to achieve the environmental gains that we want to make. We should see more freight traffic on the railways instead of on the roads. I hope that the railway network will be expanded. I am certain that that expansion will take place only in the private sector, and I look forward to reading in due course about the Government's plans for how that privatisation will take place.

I must apologise to you, Mr. Deputy Speaker, and to the House for having to slip out at one point during the debate. Unfortunately, I missed the speech of the hon. Member for Sherwood (Mr. Tipping), with whom I share a common boundary. I apologise to him. However, I have ascertained what he said and I am sure that he made many points with which I would agree. I know that he will not mind my saying that in a coal debate, we on this side of the House miss the presence of Andy Stewart. That is no criticism of the hon. Gentleman's speech. No coal debate in the past was complete without Andy Stewart's wise words. He was a staunch advocate of the coal industry not only in Nottinghamshire but elsewhere. My hon. Friend the Minister is in some ways fortunate that he is not here. His knowledge of the coal industry was unrivalled in the House and he always made an immense contribution.

In spite of the comments from Opposition Members, my hon. Friend the Minister is very much the Minister for Energy and for coal. His visit to Nottinghamshire last week was widely welcomed and appreciated. At the weekend I spoke to some of the people he met. They particularly appreciated his visiting the area so early in his time as the Minister for coal. I am grateful to him for that and I hope that he will visit often. Unfortunately, there is no longer a colliery in my constituency. Sadly, Gedling colliery closed at the tail end of last year. However, my hon. Friend's visits to Nottinghamshire must be in our interest, and we look forward to seeing him there many times in future.

The hon. Member for Normanton (Mr. O'Brien) once again referred to the performance of British Coal Enterprise Ltd. He does it and its work a disservice by belittling it. There is a lot more than it could do. The hon. Gentleman and I are on common ground on that point. But it is important to place on the record that £70 million has been provided for projects which have attracted almost £500 million of private sector funding. British Coal Enterprise has helped 3,600 former miners into new jobs in the past year alone. In total, 70,000 new job opportunities

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have been created nationwide. Some 39,000 of those are in 3,200 businesses supported with loans or equity investments from British Coal Enterprise.

I want to place it on the record that we should not belittle the achievements of British Coal Enterprise. We should encourage it. Those who have an interest in the coal industry should seek to expand the work that it undertakes.

Mr. O'Brien : I appreciate the opportunity to intervene. I have been requesting information from British Coal Enterprise on how many jobs have been created in my constituency or throughout the Wakefield area. No way can I obtain that information. My research shows that, after 14,000 redundancies, if 200 jobs have been created, that is the maximum. Is the hon. Gentleman saying that that is value for money? Is that acceptable? Can he tell me how many jobs have been created by British Coal Enterprise in his constituency?

Mr. Mitchell : I have placed on the record what I believe to be the figures for what British Coal Enterprise has achieved. My hon. Friend the Minister will have heard what the hon. Gentleman said about the difficulties of accessing full information and I am sure that he will help with that. Clearly, some aspects of British Coal Enterprise are commercially confidential, but I agree with the hon. Gentleman that the figures that he requested should be available. I am sure that my hon. Friend the Minister will ensure that we have them.

One of the most important points that we can make this evening is that privatisation of itself will be a mere detail for the future of the coal industry. The size of the coal industry will be affected most by the size of the contracts awarded by the generators. In terms of the size of the industry, privatisation is at the margins compared with contracts. I believe that privatisation will be in the interests of the coal industry as it goes forward into the future. But I emphasise that the conclusion of those contractual negotiations will determine the size of the coal industry.

My hon. Friend the Minister will have learnt during his visit last week that there is immense anxiety in the coalfield about the future shape and size of the industry. That is not surprising. In Nottinghamshire, the local economy receives £5 million per week in wages from the coal industry. The industry is a huge employer. These days the average age of miners who go down the pit is 34 or 35--about my age. They are highly paid with family commitments and mortgages. They are worried about the future of the industry.

I am the first person to say that the ability of the Government to influence the size of the coal industry is severely limited. The great threats to coal come in many shapes and sizes. There is the huge threat of what has been described as the dash for gas. Gas threatens to replace 20 million tonnes of coal. I have grave reservations about the dash for gas. Gas-fired generation has security of supply implications. The regulator will have to look with great care at the price charged to the consumer for gas-produced electricity commissioned by the regional electricity companies. If he sees that gas-produced electricity is more expensive than that produced by coal, he will wish to act in the interests of the consumer.

Policies on emissions are another threat to coal. Both the Government and Opposition Front-Bench teams have agreed that we should bring forward our target of

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returning emissions to 1990 levels from 2005 to 2000. That may well represent the environmental priorities of our society, but it is a gloomy factor for the deep-mined coal industry to absorb and negotiate.

There is also the threat of a carbon tax, about which loud noises were made abroad last week. I appreciate that it is conditional on others agreeing to it. That fact alone will delay its implementation significantly, but it is hardly a help to the coal industry in its current difficulties.

Then there is the threat from imports. I should make it clear that I have no objection in principle to imports, but I have some objections on commercial grounds. That is why I voted against the Associated British Ports (No. 2) Bill. Strategically it would be most unwise for the generators to rely intensively on imports of coal. Long-term forecasts of coal prices have been notoriously inaccurate in recent years and invariably wrong. Rather than looking to imports as the great solution to the problems of electricity generation, the generators should look at the progress that has already been made on price and quality by the indigenous producers. In particular, they should look at the amazing achievements in productivity, especially in Nottinghamshire.

First, the coal industry has made progress on price. The figures are staggering. The electricity industry is proud that price increases for the electricity consumer have been less than the rate of inflation. There has been a 44 per cent. money increase over seven years, but that is less than the rate of inflation. Over the same seven years, effectively there has been a complete standstill in the price of coal. The price of coal has increased by approximately 20p per tonne in the past seven years. By any stretch of the imagination, that is an enormously impressive performance.

The Nottinghamshire collieries made a profit last year of £80 million. Every pit is currently in profit. I submit that that is a significant factor. The coal industry has made staggering productivity gains : 479 tonnes per man shift in 1979 ; 1,357 tonnes per man shift in 1991. The improvement in the quality of service to generators has been immense. During last year, the industry agreed to dispatch 10,000 trainloads of coal to the generators. Every train asked for was delivered. It is against that background that the generating companies are deciding how much coal to contract for. I urge them to think carefully whether there has not already been such a transformation in the coal industry that they should consider how best to structure their contracts and what future they want for British coal.

As you know better than almost all of us, Mr. Deputy Speaker, once closed a colliery cannot be reopened. We have the great advantage of this huge natural national asset. I hope the generators will consider that carefully as they seek to reach a conclusion to their contractual negotiations.

The coal industry is a modernised industry. Further gains on efficiency and productivity can be made. I am sure that the generators will bear that in mind when they decide on the contract size and the nature of those contracts. The current three-year bullet arrangement is not satisfactory. I am sure that they will want to seek a more sensible process which allows for much longer contracts than are currently allowed at present.

Mr. Jack Thompson (Wansbeck) : I have listened carefully to the hon. Gentleman's arguments. Does he not

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agree that his arguments are probably the best ones for keeping the coal industry in state hands ? The benefits that can now accrue from the coal industry should go to the state and should not be handed over to private enterprise.

Mr. Mitchell : I do not agree. I do not know whether the hon. Gentleman was in the Chamber at the beginning of my speech, but I strongly support the privatisation of British Coal and the Bill, because it will ensure that the Minister and his colleagues are able to arrive at the right shape for privatisation.

Mr. Eric Illsley (Barnsley Central) : The hon. Gentleman said that he agrees that once a colliery is closed it cannot be reopened. How does he square that with the Government's statement, in response to the Energy Select Committee, that they do not accept that principle? The Government believe that once a colliery has been closed, it can be reopened.

Mr. Mitchell : I do not think that I have said anything with which the Government would disagree. Once a colliery is closed it is extremely difficult to reopen. It would be exceedingly hard for anyone to disagree if they considered the cost and the nature of such reopening.

I am seeking to argue that those contracts determine the size of the industry and not privatisation.

Finally, in Nottinghamshire, we are looking to the Minister for an exceptionally good deal for the Union of Democratic Mineworkers and for the Nottinghamshire coalfield, which comprises 12 operational pits, with 11,000 men working them. I have given details of the tremendous productivity that has been achieved. They are highly paid and highly skilled men, working in a profitable, productive and successful part of the industry.

Would the Minister give a commitment that, when formulating his plans for privatisation, he will consult extensively with the UDM, and will have an open-door policy to its leader and his advisers, who have shown in recent months that they are prepared to accept the principle of privatisation and to work in the best interests of those they represent?

When the Minister formulates his plans, the 1982 privatisation of the National Freight Corporation may be a helpful example to him. There are a number of pointers there. I hope that he will accept the sheer quality of management in Nottinghamshire and of the UDM, which has shown its commitment to the progress that he is seeking to make by appointing the financial advisers I mentioned.

I also hope that the Minister will accept that we should be looking for a mining company based on the Nottinghamshire coalfield, with perhaps the addition of Dawmill colliery for geographical reasons. I hope that he will feel that that option for the privatisation of British Coal is worthy of consideration, and that he will look seriously at it.

I hope that the Minister will be able to give assurances tonight to the many pensioners of the coal industry. A huge number live in the area that I represent. We need such assurances so that some of the more scary stories which have been disseminated can be laid to rest. Nottinghamshire will do well out of the contracts when they are issued and it will deserve to do well. The country owes a debt of honour to the Nottinghamshire miners. It is now absurd to suggest that miners could hold the

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country to ransom, but that was the case not so long ago. At that time, the UDM stood firm against a style of union militancy which has thankfully now gone.

The UDM has shown that it is a modern, forward-looking trade union. It has earned a massive share of the privatisation for its members. When the Minister sums up, I hope that he will offer to the men of the UDM, whom I represent, the opportunity to share in the privatisation and, once the contracts have been issued, the opportunity of a stable future for the industry--an industry in which they may be able to grow old, rather than continually looking for alternative employment or for work in another colliery.

8.3 pm

Mr. Michael Clapham (Barnsley, West and Penistone) : First, I must congratulate you, Madam Speaker, as this is my first opportunity to do so.

Like hon. Members on both sides of the House, I have reservations about the Bill. It is ambiguous and the arguments about its constitutional impact are also correct. The Bill should have been preceded by certain actions, and that applies particularly to the coal industry. For example, it seems that coal contracts should have been dealt with before the Bill came before the House because they will determine the size of the coal industry.

We seem to be in the difficult position of discussing a Bill that paves the way for privatisation of an industry when we do not know what size the industry will be. We should therefore have had information on those coal contracts. I hoped that the Minister would intervene to ensure that the generators took sizeable contracts to secure a high-volume coal industry. At this late stage, as it appears that there has not been intervention, I hope that the Minister will use his influence to make sure that the coal contracts will ensure a high volume deep-coal mining industry.

When discussing coal contracts, one must bear in mind the amount of coal produced by opencast mining. In 1991-92, almost 18 million tonnes were produced from opencast. That takes a sizeable slice from deep-mined output. Therefore, the Minister must consider that seriously when looking to the future of those contracts.

The Minister must also accept that the contracts need to be of a reasonable duration. We are probably talking in terms of five or six-year contracts to ensure that the coal mining industry has the confidence for investment and continuity.

Another action that should have been taken, alongside negotiations for coal contracts, was an immediate moratorium on pit closures. I do not understand how we can talk about a Bill to formulate the size of the coal industry, a Bill which will be introduced some time in the autumn, when there will be many colliery closures in the meantime. One colliery in Yorkshire is already facing closure. It is important for the Minister to consider a moratorium and I hope that it is not too late for him to use his influence to do so.

The Minister should also use his influence to limit imports of coal, bearing in mind that much of the coal coming into Europe is from countries that are dumping coal on the European market at costs below those of production. The Minister must consider that.

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