House of Commons Hansard Debates for 19 Oct 1992

Mr. William Cash (Stafford) : Does my right hon. Friend accept that his announcement today will do nothing to assuage the fears of those at Trentham colliery, many of whom live in my constituency? If my right hon.

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Friend casts his mind back to the 1974 miners' strike, he will recall that those same miners who crossed the picket lines and defied Arthur Scargill are now being let down by his decision. Will my right hon. Friend please explain, in relation to our competitiveness within the so-called level playing field in Europe, why the decision was recently taken to allow a £3.3 billion agreement between the power generators and subsidised coal producers in Germany to get away scot free?

Mr. Heseltine : It is clear that the Germans are subsidising their industry, but they too are running down their coal industry. Our concern must be not the level of subsidies in Germany but whether we can provide for British industry and British consumers electricity cheaper by competition from gas-fired production or whatever alternative source we use.

The UDM's contribution was quite the most remarkable memory that I have of the industrial relations situation in the early 1980s. I happened to be in the Cabinet at that time, and I know exactly what UDM members did. That, among other things, made me determined to achieve the scale of redundancy compensation that I have provided and announced, which makes available up to £37,000 per miner--an average of £23,000 per miner--at a time when, owing to world recessionary pressures, people are losing their jobs in the manufacturing and service industries without receiving redundancy pay on anything like the scale of the compensation that I have announced.

My hon. Friend the Member for Stafford (Mr. Cash) asked me whether I could exempt Trentham. I must tell him--and it gives me no pleasure to do so-- that Trentham is one of the biggest loss makers with which British Coal is faced.

Mr. John Cummings (Easington) : Who does the right hon. Gentleman think he is kidding with such a disgraceful statement? Certainly not the miners at Vane Tempest colliery, who have been denied the investment that could have turned the colliery around ; certainly not the people of Seaham, a town that is still reeling from the closure last year of Dawdon and Murton collieries, with the loss of some 3, 000 jobs. The people of Seaham are experiencing the highest number of job losses in the country, and the lowest number of job vacancies in the United Kingdom.

My people want to hear the President of the Board of Trade talk of clearing the lines for our entry into the European market--a market that is bringing in 150 million tonnes of coal from outside the Community. We want to hear the right hon. Gentleman speak of the incestuous relationship between supply companies in the north-east and gas-fired power stations--an arrangement into which we have recently entered. We need answers to these questions, and we certainly need to appease the frustration and anger of the hundreds of miners who are being thrown out of work in Seaham.

Mr. Heseltine : I have tried to recognise the anguish that the hon. Gentleman described. As he knows, Easington is not one of the 10 collieries that I have listed today. He must also know, however, that over the past decade or so £18 billion of investment--I have already mentioned that figure--has gone into British Coal. It is entirely unacceptable for anyone to suggest that the Government have not done all that it reasonably could to make the industry competitive and to give it a chance.

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It is true that Europe imports substantial amounts of coal, but it is imported from the world competitive market, at much more competitive prices than British Coal can achieve.

Dr. Keith Hampson (Leeds, North-West) : Has my right hon. Friend stressed enough the significance of the 40 million-tonne electricity supply contracts? Is it not the case that, roughly speaking, for every million tonnes by which the supply falls below that figure, an additional 1,000 miners will be put on the dole? The level of public indignation will then rise out of control.

Is it not a disgrace that the contracts have dragged on for so long? While trying to keep demand at that level, will my right hon. Friend please review the policy for licensing gas stations--a policy that has already, up to April, passed licences for 14 such stations?

Mr. Heseltine : My hon. Friend has raised what is, for me, one of the most distressing aspects of the issue. Despite the endeavours of all the British Coal negotiating teams, we have not yet seen a contract between British Coal and the generators, or between the generators and the regional distribution companies.

When I addressed the annual conference of the UDM, I made it as clear as I could that I considered it important for both the generators and the regional electricity companies to realise that this was not just an economic matter. There are communities out there with legitimate anxieties, and there is an imperative need for those contracts to be concluded. My hon. Friend the Member for Leeds, North-West (Dr. Hampson) is broadly right : if contracts for approximately 40 million tonnes are not entered into next year, every million tonnes below that figure will have an impact on employment in the coal mining industry.

Mrs. Margaret Ewing (Moray) : Does the right hon. Gentleman realise that, as yet, he has singularly failed to answer the many questions that he has been asked about the Government's future strategy on energy policy? Is he really suggesting, through this statement, that in a consultation period of three months an energy strategy can be brought forward that has not been brought forward over a three-term period by this Government ?

Would it not be much better to place a complete moratorium on this programme and to reconvene the Select Committee on Energy, which had built up considerable expertise in this sphere? It would enable us to look at an energy policy that would be to the benefit of industry, consumers and employers alike and would ensure that at least we went forward into the 21st century knowing where we were going. In that context, we should seriously look at the subsidy that has been given to the nuclear industry, some of which, of course, was instituted by the right hon. Member for Chesterfield (Mr. Benn).

Mr. Heseltine : I do not agree that we should question the principle of the subsidy that was given to the nuclear industry because, as I have already said, that is being used to decommission capital facilities ; it is being used to decommission plant. Otherwise, I should be failing in my responsibilities. I will not do that.

The hon. Lady asks me about the strategy. We have a very clear energy strategy--to provide for British companies and British consumers a diversity of energy supply at a competitive range of costs. That is what we are

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determined to achieve. In doing that we have to be sure that there is a long-term prospect of continuation of those resources. We are satisfied about all those things within the strategy.

Mr. Patrick Cormack (Staffordshire, South) : In order to inspire proper confidence in the moratorium, will my right hon. Friend do two things? First, will he ensure that there is an independent assessment of the energy resources and requirements of this country? Secondly, will he summon the heads of the power industry and ask them whether they have really been putting Britain's long-term interests first?

Mr. Heseltine : They are all operating under statute to ensure that they clearly understand what their duties are. We laid down those duties. We laid down the regulatory regimes within which Offer must supervise their activities. It is quite clear that they have duties and that there is a regulator.

My hon. Friend raises the interesting question of an independent assessment. Of course, I shall give the clearest view I can as to what the arguments are, but what must have emerged today and on many other occasions is that this is not a case where we will persuade people that there is an independent calculation that leads remorselessly to one conclusion. One is dealing with great pressure groups, great vested interests, great alternative sources of energy, and everybody argues his case. However many times we argue it and whatever figures we provide, we will never get agreement between the conflicting interests involved. That is why in government we have to make decisions about priorities. I shall try to set out for colleagues why we have taken the decisions that we have, but I do not pretend that we shall satisfy all those who represent every pressure group because I know that we shall not.

Mr. Paddy Tipping (Sherwood) : Will the President of the Board of Trade reassure the House and give some confidence to mining communities about the review that is to take place? It appears to have no independence at all. The President of the Board of Trade has told us several times this afternoon that the final outcome will be a contract between British Coal and the generators of 40 million tonnes. If that is the case, we shall be back to where we are today. This review, this process, is a fraud. We want assurances that the nuclear levy is to be looked at. We also want assurances that the length of the contract between the generators and gas generation will be looked at. The coal industry wants a level playing field, a level market. The Government have provided no opportunity for that to happen. The inquiry gives no chance for an independent assessment.

Mr. Heseltine : My task in announcing the moratorium and promising to come back to the House is to provide for the House the evidence on which the 40 million tonnes calculation is based and, consequentially, the evidence to show why there is no greater market for the pits that face closure. That is the task that my review must undertake, and I have assured the House as clearly as I can that that evidence will be forthcoming. I shall not be able--I should not seek to interfere in the matter--to stop hon. Members from arguing that there is an alternative market for British Coal, but they must show where it is because British Coal

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cannot find it, and it is because no one else is prepared to show me where it has a competitive opportunity that I have had to make these unpalatable decisions.

Mr. Robert Adley (Christchurch) : Is not it a fact that my right hon. Friend is left with responsibility for British Coal without having any influence whatsoever over the purchasing habits of its main customers? Is not this one of the weaknesses of the manner of electricity privatisation? Is he aware that some of us tried to impress that on Lord Parkinson but got nowhere? Will my right hon. Friend consider taking powers positively to influence the purchasing policies of the generators, if that is necessary, in order to sustain a medium-term policy rather than having the terrible situation that we have had to go through in the past few days?

Mr. Heseltine : In considering all the options, I considered that one because it was an obvious example of how one could have found alternative markets for British Coal. However, the first question that followed that consideration was, am I prepared to ask the House for powers to insist that electricity generation is more expensive than it would be otherwise? It is because I believe that my first responsibility is to ensure that British industry and consumers get the most competitive energy that I am not prepared to ask the House to reverse the decision that it took in the past half decade.

Mr. George Stevenson (Stoke-on-Trent, South) : Is the President of the Board of Trade aware that his statement is another example of the sickening betrayal that the public have recognised in the past week? Does he realise that the public require a complete stop on pit closures so that the complex issues to which he referred can be considered in depth? Is he aware that, seven months ago, the Trentham complex, which is in my constituency, was congratulated by British Coal on producing the quickest 2.3 million tonnes in Europe? In July, British Coal congratulated Trentham miners and said that they had a long-term future. What has changed since then?

Will the right hon. Gentleman impose a complete moratorium so that the matter can be considered in detail, the country can be advised and the House can look at the results?

Mr. Heseltine : The hon. Member is asking the Government to acknowledge something that his Governments were never prepared to acknowledge--the remorseless pressure of the market decline for coal. The Labour party in power was never able to find markets for coal and therefore ran down the coal industry year after year. I am faced with exactly the same process, and I am determined, in the course of the moratorium that I have announced today, to put before the House the nature of the costs and competition that British Coal faces. In that context, we shall see how unavoidable were the decisions that I had to take and authorise British Coal to take.

Sir Teddy Taylor (Southend, East) : In view of the Government's fantastic achievements on the single European market, will the President of the Board of Trade explain to the public and to hon. Members why on earth it is not possible to sell coal to Europe? The Germans

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produce and sell coal at £86 a tonne and other European countries produce and sell it at £112, £79 and £76 a tonne, which is more than double the British price.

If the single European market means anything, why is there no demand for British coal in Europe? If the Secretary of State says that there is nothing funny in that, will he explain why PowerGen's chief executive has said that his coal-fired plant is able to generate far more cheaply than the independent gas-powered stations? He would love to put a contract to buy coal but, sadly, he cannot do so because he cannot get contracts with the regional electricity companies, which are the shareholders in the independent gas plants.

Mr. Heseltine : My hon. Friend has asked a number of questions. I find questions about PowerGen and National Power so contradictory because half the projects for gas-fired electricity are being developed, or have been developed, by National Power and PowerGen. It is inexplicable that the companies that are saying that they can produce coal-fired electricity more cheaply are among the biggest developers of gas-fired electricity. They cannot have it both ways. They say that because they are trying to sell their coal-fired electricity to the regional electricity companies, in competition with the gas-fired plants of the RECs. My hon. Friend is in the middle of the crossfire of a competitive situation between two groups of companies. He should take their sales pitch with the cynicism that he views other matters on which he is expert.

Let me come to my hon. Friend's views on Europe. I am the first to agree with him : there are things within the European Community that I would like to see made more competitive. One example of an area in which the Government are pressing extremely hard, which has significant implications for British coal, is in gaining access for British electricity generators to the European Community's grids.

Sir Teddy Taylor : What is stopping you?

Mr. Heseltine : We are negotiating ; it is on the agenda of the British presidency. We are pressing our European partners to open up that opportunity. That is a much more constructive and likely way to make progress than by suggesting that we can produce deep-mined British coal and transport it across the channel and Europe to compete with the world price coal that the Europeans can purchase. We cannot compete on that basis. We might be able to do so if we were to get access to the European electricity grid.

Mr. Alan Meale (Mansfield) : Will the President of the Board of Trade explain something simple to the House? He said that he cannot intervene, despite what he said a few weeks ago at his own party conference. If the Government own 40 per cent. of the shares of the electricity companies and 100 per cent. of the coal industry, why on earth cannot they intervene? Nobody can understand the illogicality of that.

Mr. Heseltine : Because the electric industry operates within regimes that were passed and approved by the House, it is subject to regulation. The hon. Member reveals the stark distinction between what he and I mean by intervention. He means intervention in order to stuff costs down British industry which it can avoid in alternative ways.

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Mrs. Angela Browning (Tiverton) : Will my right hon. Friend pay careful attention to the fifth report of the Select Committee on Energy, and look at the medium-term projections for energy costs? I sympathise with his view that there are many conflicting statistics and figures, but every business in this country has to project supply and demand and estimate costs in the medium term, so that it should not be beyond the wit of the House to take an objective look at that, which will be vital in the forthcoming five to 10-year period for businesses, domestic consumers and, not least, our balance of payments.

Mr. Heseltine : I am most grateful to my hon. Friend. I assure her that I will deal with that matter in my report to the House.

Mrs. Llin Golding (Newcastle-under-Lyme) : Will the President of the Board of Trade explain to the House how a pit such as Silverdale in my constituency, which was recently described as the jewel in the crown of British Coal, can be put on the list for closure? What criterion is British Coal using for the list? Surely, if a pit such as Silverdale is due for closure, there is no hope for any of the others.

Mr. Heseltine : I understand how the hon. Lady feels. I have tried this afternoon to answer that question on several occasions. The explanation is very simple and stark. British Coal does not see a demand for its product, and British Coal does not see the price levels that it is currently getting beyond April of next year. There is a 25 million tonnes projected reduction in demand for its product. It has had, therefore, to reach management decisions as to which pits it should recommend for closure and which ones it should continue to exploit. It is that uncomfortable decision to which we will come back when I make my report to the House.

Mr. Robert Hicks (Cornwall, South-East) : In view of the public expenditure implications of this unfortunate sequence of events, will my right hon. Friend confirm that all the measures that he has announced hitherto will be funded out of new money that he has obtained from the Chancellor and not out of existing budgets and thus give the House, and in particular hon. Members who represent other parts of the United Kingdom that have genuine economic and social problems, an assurance that our regions will not be penalised as a consequence of the sequence of events?

Mr. Heseltine : I can help my hon. Friend. I made it clear in my statement where the money was coming from, whether it was within existing public expenditure programmes or whether it was new money. I can assure him that, in terms of the two big announcements that I made today, they are new money. Of course, my hon. Friend is absolutely right. He makes the point that the coalfields have real hardship and problems, but so have other parts of the country. My right hon. and hon. Friends and I will certainly not ignore that.

Mr. Jimmy Hood (Clydesdale) : The President of the Board of Trade's announcement will not save one of the 31,000 job losses that were announced last week. There will not be a review. There will be co-ordination by Lord Walker, whose history in running down the mining

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industry during his tenure in the Department of Energy is well known, and there will be no confidence in the mining communities about his appointment.

May we have a little bit of Thatcherism ? May we argue on a level playing field so that coal can stand its ground against nuclear and gas energy ? As was disclosed by the hon. Member for Leeds, North-West (Dr. Hampson), who was one of the right hon. Gentleman's campaign managers against Lady Thatcher, if the power generating boards do not agree to the 40 million tonnes, with every 1 million less the 19,000 jobs that are left in the industry will be threatened. We are not at the end of a closure programme with the loss of 31,000 jobs ; we are at the beginning.

Mr. Heseltine : The hon. Gentleman is fully aware that we are not in any way at the beginning. The beginning started between the first and second world wars. It has continued remorselessly ever since, and it has been continued under all parties regardless of their political persuasion. Let me repeat, because the hon. Gentleman might not have heard what I said, that Lord Walker is nothing to do with the review. Lord Walker will co- ordinate the measures that are to help people living in coalfield areas.

Mr. Phil Gallie (Ayr) : I welcome my right hon. Friend's statement, and particularly the assistance that he offers to coal industry suppliers to pursue diversification and new markets. What steps will he take to ensure that suppliers play on even playing fields ? What steps will be taken to ensure that British Coal rescinds the stop that it put on maintenance contracts last weekend ?

Mr. Heseltine : My hon. Friend touches on a very important aspect of this matter, and that is coal industry suppliers. They, of course, have been aware of the likely contraction of the number of mines and, in certain cases, have already made their own plans to diversify their activities, particularly overseas. We have leading technology, particularly long-wall technology, in our suppliers, and we will do all that we can to give them every proper help. Obviously each company is different and each market is different, but I assure my hon. Friend that we will have urgent and intensive dialogue with them to see what we can do.

Mr. John Evans (St. Helens, North) : Is the Secretary of State aware that his announcement today that Parkside colliery, in my constituency, the last colliery in Lancashire, should close without further review is incredible ? Is he aware also that Parkside has more than 40 million tonnes of coal reserves, that the vast majority of its coal goes direct to Fiddler's Ferry power station, only eight miles away, by direct train, and that British Coal recently installed a brand new machine on a new face at a cost of £6 million ? Is the Secretary of State aware that on Friday not one single job for manual labourers was available at St. Helens jobcentre and that there is no chance whatsoever of any of the 800 miners who will lose their jobs in Parkside getting a job anywhere on Merseyside ?

Mr. Heseltine : I know and the hon. Gentleman knows of the remarkable changes that have been taking place over the past decade in St. Helens. I salute the local community, the local authorities and Pilkingtons, who have played such a remarkable role in bringing about that transformation. The figures that British Coal has shown

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me for that particular colliery indicate that it is not able to make a profit even in today's circumstances. That is the real world that I have to confront.

I understand what the hon. Gentleman says about the investment that has taken place. There has been massive investment--that is very much the point that I am making--but it has not enabled the collieries that I am dealing with today to make a surplus. In those circumstances, if they cannot do it today at today's prices, they certainly cannot do it at tomorrow's likely prices.

Mr. Patrick Nicholls (Teignbridge) : My right hon. Friend was entirely right to reject British Coal's judgment that a Conservative Government could ever have connived in behaviour which threw men out of work at only 48 hours' notice. In the context of the review that my right hon. Friend has announced today, will it be possible to consider that, although gas may be cheaper now, by any judgment, gas stocks clearly will be less than coal stocks? Is not the relative position of the availability of sources something which the review might take into account?

Mr. Heseltine : My hon. Friend makes an important point about resources and reserves, but the history of the North sea has been a continuing one of extending the calculations for the amount of reserves that are available. The present calculations indicate that on the present levels of consumption we have about 50 years' worth of reserves, and that is before taking into account any further reserves which may be discovered. On any foreseeable calculation of the likely availability of fuel, there is a continuing availability of North sea gas as far into the future as any practical judgments can predict.

Mr. Derek Enright (Hemsworth) : The President of the Board of Trade will be aware that the destruction of Grimethorpe will put out of work virtually the entire male population of Havercroft, Hiendley and Ryhill, but he is clearly not aware that Grimethorpe made a profit over the past three years and that it is not dependent upon electricity. It depends upon selling to local industry, in particular to Coalite. Coalite had absolutely no notice of the closure of Grimethorpe and it has been left in considerable difficulties as a result, and that is clearly very wrong.

Will the right hon. Gentleman clear up another matter? People keep talking about a review. I should have been very happy if a review had been announced, but, as I understand the right hon. Gentleman's statement, no review was announced.

Mr. Heseltine : I looked particularly at the problems of Grimethorpe colliery. However, as the hon. Gentleman will know better than I, it shares facilities with Houghton Main, which loses money. If we aggregate the two-- [Interruption.] --if we close Houghton Main, then Grimethorpe is a loss-making colliery. If we keep them both open, they do not make a profit. We are faced with the fact that, on any calculation of whether that pair of collieries is ever likely to compete in tomorrow's market at tomorrow's prices, the answer must be that British Coal has made recommendations to me which I have accepted.

The hon. Gentleman asked a question which I have been asked on many occasions. I have explained that there will be a moratorium. I have announced 10 pits today

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which I am persuaded by British Coal do not and cannot make a profit in today's world, let alone tomorrow's. I have announced a moratorium for the other pits and said that I will come back to the House with a full explanation of the costs and calculations which the House will have the chance to debate before we take any further decisions.

Mr. Andrew Mitchell (Gedling) : Will my right hon. Friend accept that there is an understanding in Nottinghamshire of the very real pressures that the coal industry faces? However, there is no understanding of the way in which the announcement was made last week or of the peremptory way in which the UDM was treated in that announcement. Nevertheless, I greatly welcome my right Friend's statement today as a chance to think again and to ensure that we get it right this time.

Mr. Heseltine : I know how strongly people in Nottinghamshire felt and I have tried to indicate my own particular responsibilities in this matter. I do not in any way seek to absolve myself from those responsibilities. However, I must say that I have had discussions with the UDM leadership. Indeed, when the House has finished questioning me, I hope to see the UDM executive this afternoon to discuss these matters further. I attended the UDM conference and I have said that the Government will make available through British Coal financial help if the UDM wishes to proceed with, as I understand it, its present intention to become part-owners of the residual coal board.

Mr. Bill Etherington (Sunderland, North) : I must tell the President of the Board of Trade how disappointed I was with his statement. Wearmouth colliery is in my constituency. It was to be mothballed, but I now understand that, due to the moratorium, it has a new lease of life. We will not be kidded about this. We have a stay of execution. The people in Sunderland believe that the Government need to be mothballed, not Wearmouth colliery.

I have a simple question for the President of the Board of Trade, but I am having great difficulty in coming to terms with it. Will the right hon. Gentleman explain how we can improve the trading conditions of this nation when he has already stated today that he is looking for cheap, secure energy supplies, but is using the two most expensive sources--nuclear and gas? We do not want a revised timetable ; we want a new service.

Mr. Heseltine : I understand how strongly the hon. Gentleman feels, but it simply does not help to say that gas and nuclear are more expensive. If they were more expensive, there is no coherent answer to the question why anyone buys electricity from that source. I know that the hon. Gentleman will welcome the fact that we have made an additional £2 million available to the Tyne and Wear development corporation.

Mr. Hugh Dykes (Harrow, East) : As most of this nightmare flows back to the mistakes made in the original electricity privatisation proposals which made electricity more expensive rather than less expensive, does not the President of the Board of Trade agree that he must have a much more fundamental look at the matter? Merely to suggest that there will be a postponement of closures is not enough. I am sorry to say that if he does not undertake today to put the 10 pits back into the total of 31 for fundamental review and saving later on against a

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background of a published unemployment figure of 3.2 million and a true figure of probably 3.75 million, he will not carry the House on Wednesday night.

Mr. Heseltine : I must rest with the arguments which I have deployed and which I will continue to deploy. I cannot believe that my hon. Friend and my right hon. Friends want me to incur public expenditure keeping open pits which are uneconomic at prices today which are going to be slashed tomorrow and keeping open pits supplying a market which will decline by 25 million tonnes next April. I cannot believe that the House wants me to take part in all the discussions that Governments properly carry out about the priority of public expenditure--cutting resources here, cutting programmes there and making arbitrary decisions there--the consequence of which is that I would have money to keep open uneconomic pits against the advice of the people who have to manage them.

Mr. Kevin Hughes (Doncaster, North) : The Bentley and Hatfield pits are in my constituency. Neither of them is uneconomic and both have made a profit this year. The people who work in the collieries cannot understand, and nor can anyone else, why the Government are shutting economic pits which are making a profit when PowerGen and National Power are supplying electricity to the regional electricity companies, when gas is 30 per cent. dearer, and when nuclear power is up to 350 times dearer. The only person in the country who will not accept the argument is the Secretary of State. No one can understand what the Secretary of State is playing at unless, as was said earlier, this is a vindictive attack in response to the 1974 dispute.

Mr. Heseltine : I think that I can answer the hon. Gentleman's question. The calculations of profit to which he referred are based on the present £1.88 per gigajoule which British Coal is receiving for its coal. The calculation that British Coal has to make is not in the context of what it receives today but what it knows it is at most likely to receive next April. That is the dilemma. It will receive next April only what someone is prepared to pay it. No one is prepared to continue to pay a price of the sort that leads to the notional profit to which the hon. Gentleman referred. That is the difficulty.

Mr. Michael Shersby (Uxbridge) : My right hon. Friend expressed concern in his statement that some miners would use redundancy money to invest in some of the pits that are proposed for closure. What inquiries have the Government received and what advice has my right hon. Friend received about the possibility of any of the pits being sold to the UDM or any other interests? Will he also tell us whether he has considered breaking the monopoly of British Coal?

Mr. Heseltine : There are inquiries. There are not very many, but there have been a few. I have to say that some of them tend to come from miners or their representatives who are concerned about the reduction in opportunities in their area. However, I would not wish to give any sign to my hon. Friend that there is a significant market for a significant number of those pits. I believe that there will be a market under the privatisation proposals for British Coal once we have been through this uncomfortable process. However, I do not believe that there is a significant market for the pits which are scheduled for closure.

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My hon. Friend asked whether I had considered the idea of breaking British Coal's monopoly. The one thing that we have learnt this afternoon is that British Coal does not have a monopoly. It is very much in the market and has to compete on very onerous terms.

Mr. Geoffrey Hoon (Ashfield) : If the supposed justification for the closure of Silverhill colliery in my constituency is the operation of market forces, why has Britain imported coal that has gone straight on the stockpiles at pitheads and power stations? Was it to bolster a bad Government case? Are the stockpiles there to justify the action taken to close Silverhill immediately? Is it not time that there was a stockpile of redundant Ministers?

Mr. Heseltine : The hon. Gentleman will realise that the decisions on what coal to import, the volume in which it is imported and where it is stocked are matters for the generators, not matters for British Coal or matters for which I have any direct responsibility. If the generating companies or regional electricity companies imported coal, they would be responsible for their own decision. It is not a matter for me.

Mr. Michael Colvin (Romsey and Waterside) : Will my right hon. Friend confirm, just for the record, that during their most recent 11 years in office Labour Governments closed twice as many pits as Conservative Governments have closed in the past 13 years? Furthermore, since 1985, more than 100 pits have been closed with the loss of more than 100,000 jobs. That is three times the number proposed at present. They were closed with the minimum of economic, social and political difficulty because the closures were phased over a period. Therefore, it was the rapidity of the present proposals and the way in which the announcement was handled which caused the reaction from Chesterfield to Cheltenham. It was not the long- term strategy of reducing our coal-mining capacity, which is accepted by most people, including the Select Committee on Energy, which studied the subject only last year.

Mr. Heseltine : I do not disagree with my hon. Friend's analysis. I do not wish to comment on the number of pits that were closed or the number of miners who left the industry under which Government. However, there has been a remorseless reduction in the industry post-war, regardless of which Government were in power. In reaching a judgment, the House will wish to bear in mind that the Government have invested more in the coal industry since 1979 than all previous post-war Governments put together.

Several hon. Members rose --

Madam Speaker : Order. So that the House may know my intention, I inform hon. Members that at 5.30 pm I intend to call the hon. Member for Livingston (Mr. Cook) who, I understand, wants to make a response. We shall have questions until 5.30 pm.

Mr. Jimmy Boyce (Rotherham) : I wonder what the people of Britain will make of the statement of the President of the Board of Trade today. First, he takes sole responsibility. Perhaps that is because there is no longer any collective Cabinet responsibility. The right hon. Gentleman also tells us-- [Interruption.] I shall come to the question in two seconds, Madam Speaker. The President of the Board of Trade also tells us that he agonised for months over the decision to close the pits. Yet

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yesterday, in "On the Record", he told the interviewer, Mr. Dimbleby, that he did not have time to telephone the Secretary of State for Wales. That is what he said ; it is on the record. Then he said that he was frightened of leaks. Was that because he thought that the Secretary of State would leak the decision?

Mr. Heseltine : I am grateful to the hon. Gentleman for taking so much trouble to listen to what I had to say in "On the Record", but it would help if he had understood what I said. I made it absolutely clear that my right hon. Friend should have been informed of the announcement that that pit would be closed one day earlier than he was, and I have accepted full responsibility for that. British Coal submitted that name to my Department very late, and we did not transmit it to my right hon. Friend as fast as we should have done. There was absolutely no other explanation for that except that it was an administrative oversight for which I have apologised to my right hon. Friend.

Mr. Eric Pickles (Brentwood and Ongar) : My right hon. Friend referred earlier to the success of British Coal Enterprise in finding jobs for redundant miners. Will he give the House an assurance that before any redundancies are announced the measures that he announced today will be in place? Does he agree that the communities affected by the pit closures have a right to success and a right to look for jobs after coal? Does he further agree that the most tragic thing that could come out of the moratorium would be to raise hopes and expectations in those areas that suddenly markets for coal will appear when currently no such markets exist?

Mr. Heseltine : My hon. Friend has put the heart of the case which persuaded me that it was right to move forward. On all the evidence put to me--I shall have to explain it in detail to the House--the market will decline by 25 million tonnes next April. Therefore, I did not think it fair to those communities or desirable in their long-term interests to suggest that the market would exist. That is why I took the decision that I did, on the advice of the coal board. However, in the light of events, I have made the statement that I have to the House today.

I hope that the message that my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) has sent out will be understood. The message is that we are giving time for a wider understanding and a slower pace in certain circumstances. But that does not create a market for coal. Therefore, I can give my hon. Friend the assurance that we intend to proceed, with Lord Walker's help, with the implementation of the measures which I and my right hon. Friends have announced today.

Mr. Mike O'Brien (Warwickshire, North) : Yesterday the President of the Board of Trade told the country that there was no alternative to the policy that he then had. Last night, together with the Prime Minister, he cobbled together an alternative policy. Can he tell the country how he can put forward a different policy before the House with any integrity? Will he explain how he can stand here with a new policy and still claim to have any integrity as a Minister?

Mr. Heseltine : Perhaps the hon. Gentleman has not fully understood, but I have explained, as clearly as

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possible, that there will be a lack of demand for 25 million tonnes of coal in the market place next April. I cannot create that market place. Therefore, it is important for me to explain to the House and to let the House debate and examine the implications pit by pit of the dilemma that British Coal faces. We can consult on these matters. That is what I have said today, but it does not change the basic dilemma that I have had to face ever since I took on this job.

Mr. Anthony Steen (South Hams) : Although I do not have any coal mines in my constituency, I have many concerned constituents who were very distressed. They have written many letters and they have telephoned me, as have the constituents of many other colleagues, about the way in which this matter has been handled. There is great anxiety that the matter should be clear in the future.

Could the President of the Board of Trade say something about the enterprise zones? He knows that I have been very interested in enterprise zones, and he and I have been involved in setting them up. They have not all been a success. Some of them need clarification. Does he agree that enterprise zones could be considered for the 10 mines that will be closed? Does he agree that the Chancellor of the Exchequer could consider increasing the tax benefits for setting up companies in enterprise zones so that companies do not simply move from outside the enterprise zones to inside them to avoid certain rates and taxes? Does he agree that there could be a real tax-free zone in enterprise zones where the coal mines were in the past?

Mr. Heseltine : I am aware of my hon. Friend's interest in not only enterprise zones but the whole issue of regeneration. While I can guess that the enterprise zone with which he deals is not as successfull as others, he will be aware that the broad picture has been of immense diversification and considerable success. My right hon. Friend the Chancellor of the Exchequer has no intention, as far as I am aware, to change the basis of the incentives which apply to enterprise zones. The concept of enterprise zones is a weapon that we are prepared to use in this case. We shall consider establishing such zones where we think it appropriate and where the area will benefit from it. We have not yet reached a decision on where enterprise zones will be established or the number.

Mr. Eric Illsley (Barnsley, Central) : So that no one is in any doubt, will the President of the Board of Trade confirm that all 31 collieries will still close, perhaps not next week, but by next April? Will he confirm that, notwithstanding anything he has said today, he intends to close 31 pits? Will he also bear in mind that two of the 10 collieries announced for immediate closure are in Barnsley? The devastating effect that those closures will have on that community is not worth thinking about when one bears in mind that we have lost thousands of jobs in the area since 1985.

Mr. Heseltine : I accept the hon. Gentleman's argument about the problems in Barnsley. That is one reason why in my initial statement I announced assisted area status. I believe that that will be a help, but I am fully aware there there will be difficulties, which I have always accepted.

As for the hon. Member's question about the 31 pits, he and the House know, as I have repeated it many times, that there is a gap of 25 million tonnes in the market for British

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coal. On that basis, one is led remorselessly to the uncomfortable conclusions that I first announced. Ten closures will proceed and there will be a moratorium, during which I shall produce detailed calculations for the House, and there will be a further debate. I shall not say that at the margin there will be no change in policy. How can I do so if I intend to make a statement to the House and invite it to debate the implications?

I cannot know whether other purchasers may emerge who may be interested in becoming involved in any of those pits. There will be an opportunity for all those things, but, in response to my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), I do not want to give the impression that the gap in the market projected by British Coal will simply be filled because there is a moratorium.

Mr. James Couchman (Gillingham) : In welcoming my right hon. Friend's statement today and the moratorium that he has announced, which eases the brutality of last week's announcement by British Coal, can he assure the House that the 21 pits included in the moratorium will continue to work normally throughout that time, that the work force will work properly and for the normal number of hours, and that no steps will be taken to pre-empt decisions that might be taken after the moratorium ? Furthermore, can he assure the House that there will be complete transparency in the economic case that he sets before the House for each of the 31 pits concerned ?

Mr. Heseltine : I want to help my hon. Friend. It is my intention to be as frank as I can in the statement that I shall make to the House. I understand how much interest the matter has created, and it is incumbent on me to satisfy the proper concern of my hon. and right hon. Friends.

I think that I made it clear in my statement that, at the 21 pits covered by the moratorium, voluntary redundancies will be available and there will be no closure unless it is by agreement of the work force.

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