House of Commons Hansard Debates for 21 Oct 1992

Mr. Heseltine : I can only say that that thought had occurred to me.

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Mr. Dafydd Wigley (Caernarfon) : If the review is to be as far reaching as the right hon. Gentleman has said, does he accept that it could affect the profitability or otherwise of pits, including the 10 pits that the right hon. Gentleman has on his list for closure, one of which, Taff Merthyr, was said to have made a £5 million profit? Will he also give an assurance that there is absolutely no substance in the report in today's Guardian which suggested that seven more pits, including Tower in Wales, could be on the hit list?

Mr. Heseltine : I will come to an important part of that, but let me give a categorial assurance that I have instructed British Coal that there is to be no change in the number of pits on the closure list. It is 10 and there will be no change in that position. I hope that there will be no room for doubt about that position. I hope that that reassures the hon. Gentleman.

Mr. Beith : Why did the right hon. Gentleman's list contain no reference to the obligation on the electricity industry to buy nuclear power at whatever price it is offered? Will that feature in the review, as it was mentioned in the Coal Board's statement as one of the reasons why its market has declined?

Mr. Heseltine : Of course. I am coming to that later in my speech, but, of course, in anticipation of what I am going to say-- Several hon. Members rose--

Mr. Heseltine : Let me also say that I have instructed British Coal that development work should continue at the 21 pits covered by the moratorium for the period of the review so that there can be no question of the outcome of that review being prejudiced. I have set out as clearly as I can the comprehensive nature of the review I am to undertake. It would be wrong if I did not set the review in the context of the problems that exist.

The coal industry can sell only what the customers will buy. British Coal has said that the demand for its product from National Power and PowerGen will fall from 65 million tonnes this year to a maximum of 40 million tonnes next year, and only 30 million tonnes thereafter. It is inescapable that we have to take account of the millions of tonnes which are being produced over and above what the market will take.

I noticed that the hon. Member for Livingston, when talking about the record of the Labour party, seemed to think that it was perfectly all right for the Labour Government to reduce the number of pits and to reduce the number of miners when householders stopped buying coal, but when those who produce electricity for British industry stop buying coal, somehow or another a different set of criteria has to apply. All that one can conclude from that is that, when there were votes at stake, the Labour party was prepared to back the voter without regard to the interests of the manufacturing economy.

Mr. Neil Kinnock (Islwyn) : I make the very fair point to the right hon. Gentleman that nobody rigged the household market for coal in the way in which he and his Government have rigged the power station market for coal. I put it to him that he has invested so much in his judgment that the economic case for the closure of 31 collieries is, in his own words, absolutely unanswerable that nobody can realistically believe that he has what the

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Prime Minister calls an open mind about the future of collieries that he has already sentenced to death. Is he aware that in the House and elsewhere we know that he is now not working for the future ; he is playing for time?

Mr. Heseltine : It was never an open mind for which the right hon. Member for Islwyn (Mr. Kinnock) was famed, from what I remember, but the fact of the matter is that it reveals as clearly as anything that I can remember how little experience the right hon. Gentleman had in government. He talks about the choice and rigging the market. There was no market under a nationalised programme under a Labour Government. People turned up for beer and sandwiches, to be told what the allocation was going to be year by year, regardless of the cost to the consumer or the damage to the industrial base. It is because the Opposition hanker to go back to that that they cannot understand the language in which we are talking.

Several hon. Members rose --

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : Order. The Secretary of State has made it quite clear that he is not giving way.

Mr. Heseltine : And nothing more clearly revealed the hypocrisy behind the views of the Labour party than the behaviour of Leeds city council-- [Interruption.] Yes, which actually cancelled its contract with British Coal in order to import coal. So can I understand from the right hon. Gentleman why it is right for a Labour-controlled city council to buy coal in a competitive market when it is wrong for the generators-- [Interruption.]

Mr. Deputy Speaker : Order.

Mr. John Battle (Leeds, West) : On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker : Once again, the Secretary of State has made it very plain that he is not giving way. Will the House now calm down and let him carry on with his speech?

Mr. Heseltine rose --

Mr. Battle : Will the Secretary of State give way, please? [Interruption.] On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker : I think that I hear a point of order.

Mr. Battle : In what circumstances can I raise with the Secretary of State the fact that he is seriously misleading the House? When he was Secretary of State for the Environment he made it clear that local authorities could not know where they got their coal from.

Mr. Deputy Speaker : The hon. Gentleman has been in the House for quite a few years. He knows that that is not a point of order for me and he knows the avenues to go down.

Mr. Heseltine : I will tell the hon. Gentleman what opportunities he has got--get on the phone to Leeds city council and ask it. [Interruption.]

Mr. Deputy Speaker : Order. This is one of the most important debates to take place in the House for many years. There are many thousands of people outside

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watching the debate, so let us conduct ourselves in an orderly way and hear what the Secretary of State has to say.

Mr. Heseltine : I give way to my hon. Friend the Member for Leeds, North-West (Dr. Hampson).

Dr. Hampson rose--

Mr. Hood : On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker : Order. The hon. Member for Leeds, North-West (Dr. Hampson) must take his seat. Mr. Jimmy Hood has a point of order.

Mr. Hood : My hon. Friend the Member for Leeds, West (Mr. Battle) has asked to intervene and the President of the Board of Trade has refused to allow his intervention. May I tell you, Mr. Deputy Speaker-- [Interruption.]

Mr. Deputy Speaker : Order. The hon. Gentleman and the House know full well that it is a matter for the Secretary of State, not the Chair, whether he gives way.

Mr. Heseltine : I give way to my hon. Friend the Member for Leeds, North-West.

Dr. Hampson rose--

Mr. Hood : On a further point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker : What is the further point of order?

Mr. Hood : The President of the Board of Trade has indicated to an hon. Member from Leeds that he wishes him to refer to a piece of paper that he wishes to be held up in front of the television cameras, and he has agreed. As I sit down he will give way to his hon. Friend and former campaign manager from Leeds. [Interruption.]

Mr. Deputy Speaker : Order. The hon. Gentleman and the House know full well that it is a matter for the Secretary of State to decide to whom he gives way. [Interruption.] Order.

Ms. Walley : Further to that point of order, Mr. Deputy Speaker. The President of the Board of Trade has already indicated that he would give way to me. He has reneged on that. His hypocrisy is the same throughout the entire course of this debate.

Mr. Deputy Speaker : That is not a point of order for the Chair and the hon. Lady knows that full well.

Mr. Heseltine : I give way to my hon. Friend-- [Interruption.]

Dr. Hampson : My colleague from Leeds, the hon. Member for Leeds, West (Mr. Battle), made a statement about the situation in Leeds. I am intervening only because he raised a point of order to point out that the leader of Leeds city council--I am pointing it out to my right hon. Friend- -Councillor Trickett, in the Yorkshire Evening Post, has apologised to the mining community of Yorkshire for the fact that the Leeds city council took a contract for Colombian coal because it was £600,000 cheaper than the equivalent contract for British coal. [Interruption.]

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Mr. Heseltine : I thought that the Labour party wanted a full and open inquiry into these matters. I thought that it wanted to reveal all the things that were going on, not just the things that suit the Labour party. [Interruption.]

Several hon. Members rose --

Mr. Deputy Speaker : Order. The Secretary of State--I repeat it once more--has made it very clear that he is not giving way.

Mr. Heseltine rose--[Interruption.]

Mr. Battle : Will the Secretary of State give way?

Mr. Deputy Speaker : Order. The hon. Member must take his seat. The Secretary of State has made it clear on several occasions that he will not give way.

Mr. Heseltine : I thought that it was relevant to our debate today to read in the Yorkshire Evening Post :

"Leeds snubs Yorkshire pitmen to buy cheap coal mined by slave children in Colombia."

Mr. George Howarth (Knowsley, North) : On a point of order, Mr. Deputy Speaker.

Mr. Robin Cook : On a point of order, Mr. Deputy Speaker. The President of the Board of Trade has invited my hon. Friend the Member for Leeds, West (Mr. Battle) to telephone Leeds city council. In order that the telephone exchange may be meaningful, will the President of the Board of Trade tell the House that his Government propose to release local authorities from the obligations that the Government imposed upon them? Those obligations mean that the local authorities do not know the source of the tender that they have received and leave them no freedom to take any alternative bids. In the light of the right hon. Gentleman's invitation to my hon. Friend to blame Leeds council, will he now free that council and every other local authority to make the decisions that they want to make in the national interest rather than commercial interests?

Mr. Heseltine : There you have it, Mr. Deputy Speaker. That is exactly what the Labour-controlled councils want--freedom to build their empires, regardless of the cost. [Interruption.]

Mr. Deputy Speaker : Order. It is now time that the House settled down. Many thousands of miners, many of whom may lose their jobs, want to listen to the debate. They will be keen to hear what the Secretary of State has to say.

Mr. Heseltine : Back to the old monopolistic jobs for the boys at any cost.

Mr. Hood : Will the Secretary of State give way?

Mr. Heseltine : It is obvious to me and to the House that we need to consider these matters in a measured way, with the facts before us. It is obvious that the Labour party has no interest whatever in listening to the case that I intend to make, so I shall rely on my right hon. and hon. Friends

Mr. Michael Carttiss (Great Yarmouth) : On a point of order, Mr. Deputy Speaker. I appeal to you to ensure that my right hon. Friend the Secretary of State is heard. As a member of the Government who wished to ensure that the coal mines were not closed, I want to hear why the

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Government believe that I should vote for them. Opposition Members have ensured that my right hon. Friend has my support tonight. Several hon. Members rose --

Mr. Deputy Speaker : Order. I shall try to answer that point of order. I have had great difficulty in hearing the Secretary of State because of noise from both sides of the House.

Mr. Heseltine : My hon. Friend has clarified the issue. The Labour party has no interest--

Dr. Tony Wright (Cannock and Burntwood) : On a point of order, Mr. Deputy Speaker. Will you help me with a constitutional point of order? I thought that it was a matter of constitutional principle in the House that, if a policy was announced and that policy collapsed, the Minister who was personally associated with that policy made a further statement.

Mr. Deputy Speaker : Constitutional points of order in the House are not common.

Mr. Nicholas Winterton (Macclesfield) : Will my right hon. Friend the Secretary of State give me an assurance before he sits down that if, during his inquiry and review, it becomes apparent that the rules, disciplines and regulations attached to the legislation on the electricity privatisation are flawed--as several of us believe that they are--and prejudice the position of coal, he will introduce amendments to that legislation?

Mr. Heseltine : I say to my hon. Friend without reservation that there would be no point in the review if I were not prepared to consider such options. I have given the clearest possible undertaking to the House that the review will be genuine. I will listen to the representations. I will present the Government's views. The House will have an opportunity to debate the matter.

It is apparent that the Labour party is not prepared to indulge in a proper examination this afternoon. It is more intent on shouting down my argument. Labour Members are letting down the miners they have come here to represent. [Interruption.] Therefore, I will rely on my right hon. and hon. Friends to give me the three months that I require to set the matter in proper order. I hope that they will support me and the Government's amendment in the Lobby tonight. 5.6 pm

Mr. Malcolm Bruce (Gordon) rose--[Interruption.]

Mr. Deputy Speaker : Order. Will hon. Members leave the Chamber quietly please ?

Mr. Bruce : I hope that the House can now debate the substance of the big hole in the Government's energy policy rather than the ritual exchanges that we have just witnessed. [Interruption.]

Mr. Deputy Speaker : Order. Will hon. Members show common courtesy to the hon. Member on his feet and leave the Chamber quietly ?

Mr. Bruce : The Secretary of State has had, by his own admission, an extraordinary few days. He should revise

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and review the speech that he made to the Conservative party conference. It seems to be U-turns before breakfast, lunch and dinner. It is interesting to note that he is now talking about a review, although there were huge omissions from what he had to say about great areas of energy policy.

I suggest to Conservative Members who have expressed their concern and opposition to the Government's performance over the past few days that any of those who believed that the problem was merely a measure of presentation should now accept that that is an unacceptable excuse for supporting the Government. The presentation was totally unacceptable. It was utterly brutal and ill thought out. It was also based on a fundamental mismanagement of energy policy that goes back many years. It is difficult to see how a Government who have persisted in mismanaging energy policy for so long are likely to come back to the House in three months with a substantially different or altered energy policy.

On several occasions in the past few days the Secretary of State talked about the market for coal as if it were an absolutely fixed, defined law outside his or anybody's control that had been submitted effectively to the market place by an invisible hand. I suggest that that shows an intellectual vacuum in the Government's thinking. To suggest that there is no alternative to his definition of the market is the last refuge of the scoundrel. Everyone knows that markets and business decisions have to be based on judgments about future developments and a number of different factors. It is a matter of opinion how the market for energy will develop. It is not a matter of simple fact, as the Secretary of State has tried to pretend in the face of overwhelming and growing national opposition.

People can be wrong, and--sad to say for Britain--the Government have been too often and too consistently wrong on energy policy. It is sad that the Secretary of State apparently has not yet recognised the strength of feeling and views outside the House among ordinary men and women who believe that the Government are fundamentally wrong in their policy.

The Secretary of State has shown little understanding of why people have been so angry during the past few days. I should have thought that many of his hon. Friends would have told him about the phone calls and letters that they have received from his

supporters--Conservative party members who are utterly confused as to how the Government have got into this mess. They cannot understand how we can conquer unemployment, avert bankruptcies or pay our way in the world if we tear the heart out of the industrial base of our economy, and yet that is what the Government appear to be intent on doing.

The Secretary of State's last few remarks suggest that--at least for the benefit of tonight's vote--he has broadened his outlook. The review cannot simply consider the case for closing 31 pits. It must be a review of the roles of gas and nuclear power. I suggest to the right hon. Gentleman that he would have had more credibility if he had been prepared to put a moratorium on the development of gas-fired power stations until the outcome of the coal review had been completed. As those developments continue they will limit options for coal, which puts into question the Government's sincerity in producing alternative opinions.

The former Chairman of the Select Committee on Energy said pertinently that if the review is to be genuine

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and total, it should be a review of 31 pits and not of 10 and 21. The Secretary of State failed to answer that criticism with any credibility or authority.

Mr. Terry Lewis (Worsley) : If the Secretary of State had given way to me earlier I would have raised this matter. The moratorium should include opencast coal, because the relationship between opencast and deep- mined coal is close. The Secretary of State is diverted for the moment-- [Hon. Members :-- "Permanently diverted."] Yes, but perhaps he could listen to this argument. There will be outrage in areas which are threatened with opencast coal mining while deep coal mines are being closed down.

Mr. Bruce : The Secretary of State's diversion is disappointing. If it is a reflection of his open mind, it is not being demonstrated with any conviction to the House--he does not even have open ears, let alone an open mind. If this is the way we are to carry on, his discourtesy does not give us any confidence that in three months time things will be any different from the way matters stood last weekend.

Coal does not face a squeeze on the market because of inevitable forces within it, but because it has been put at the end of the queue in the Government's privatisation programme, after gas and electricity. That is the reality. The hon. Member for Macclesfield (Mr. Winterton) intervened in the Secretary of State's speech to seek assurances that the Government recognise that they have mismanaged the privatisation of electricity. Lord Parkinson was determined that electricity should not be privatised as a monopoly and so he cleverly devised a duopoly, which works in much the same way, with much the same consequences. He could not privatise nuclear power. Those Members who served on the Committee told him, hon. Members told him on Second Reading, and on Third Reading, that that would not be possible. He assured us that he knew what he was talking about and that we did not. Fortuitously for him he resigned and left his colleague Lord Wakeham to sweep up the mess and to make the embarrassing statement to the House.

The net result is that a moratorium that does not tackle the failure of the market for electricity does nothing other than prolong the agony and postpone inevitable closures, and is not likely to lead to a serious review of the case for coal. I hope that Conservative Members who expressed such strong reservations understand what they may be taken in by, and that they will not be taken in.

Can the Secretary of State tell us why it is apparently sensible to mothball coal-fired power stations, which have half their useful lives left, and yet continue to squeeze extra life out of nuclear power stations, which have long passed their original lifetimes ? What is the proper justification for that, and will it be tackled in the review ?

Secondly, why are coal-fired power stations which are of no interest to existing generators not offered to others who might be willing to take them over ?

Mr. Heseltine : It is for the hon. Gentleman to raise those matters with me. Even if I did not want to raise them--which I shall--I would have to respond to him. He has not fully understood the comprehensive nature of what I have told the House. It is within his discretion to make representations to me or to encourage others to do so, and I will have to answer them.

Mr. Bruce : Of course, the right hon. Gentleman will say that and he will get his submissions. The question is how

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well is he prepared to listen and whether he will be prepared to accept a finding from outside his Department. He has said that he is conducting his own inquiry independently. One wonders to what extent he will judge his findings, as opposed to those of a more independent body such as the Select Committee.

Mr. Wigley : The hon. Gentleman mentioned the alternative possibilities for certain pits. Is he aware that it is possible that the private sector will be interested in the Betws deep drift mine in the Amman Valley in west Wales, yet it is among the 10 down for closure? Does that not demonstrate that that is a crazy way to deal with the issue, if we are to keep all the options open?

Mr. Bruce : I shall come to that, although I think that the hon. Gentleman has argued the case well enough. British Coal's priorities might not always accord with the priorities of others who can do something with a mine and make it profitable where British Coal has failed.

Mr. Richard Caborn (Sheffield, Central) rose --

Mr. Bruce : I apologise to the hon. Gentleman but I have given way several times and I wish to make room for other Members to speak. Another question which must be considered is why there is a dash for gas. I was disappointed to hear that during the past 48 hours both the Secretary of State and the Prime Minister have almost implied that if there is such a dash it must be because someone thinks that it is profitable ; it must be because the market is right and therefore it must not be reassessed. All the experts recognise that the reasons for the dash for gas are nothing like as simple as that. They are complex, but the main reason is the monopolistic position of the two generators, and the desire of local electricity companies to give themselves more bargaining power with them. Because the regulator cannot prevent them from passing the cost of their mistakes on to the consumer, they will buy more expensive gas to achieve diversity and simply pass on the costs.

If a model along the lines of the American regulator had been copied, that could not have happened. No American regulator would have allowed it to happen. That should be considered in the legislation for electricity.

Consumers are being asked to pay to produce a more effective market because the Government's legislation failed to produce it. In those circumstances I do not understand why we should create 60 per cent. of excess capacity that the country does not need, at an extra cost to the consumer. It seems as if one sector's perceived short-term profit is being bought at the expense of the nation's long-term profit. That cannot be in the national interest and I urge the Government to include that in their review.

I shall suggest some avenues that the Government should pursue while the review is taking place. First, can they extend the moratorium to all 31 pits, because that is the only basis which could give credibility to the Government's sincerity when they say that it is a genuine review rather than a delayed stay of execution? I am glad that the Secretary of State acknowledged that development work will continue. Can I seek clarification on whether such work will continue at all 31 pits or only at 21? Secondly, miners are worried about how their redundancy payments will be calculated. I have been advised on the

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matter, and my right hon. Friend the Member for Yeovil (Mr. Ashdown), who went down Rufford pit this morning, said that specific questions were asked of him. The miners wanted to know whether the redundancy payments would be based on the last 90 days worked, the 90 days worked up to this weekend's announcement or on an average of, for example, £300 a week? That is clearly an important point.

Mr. Heseltine : I am grateful to the hon. Gentleman for letting me intervene yet again. I wanted to cover that point in my speech but eventually decided that it was impossible to make progress. I have looked carefully at the matter and instructed British Coal that no miner must be disadvantaged by the announcements that have been made in the past few days --no miner.

Mr. Bruce : I am grateful for that helpful intervention from the Secretary of State.

It would still give greater credibility to the scale of the review if the moratorium were to extend to gas developments. There should be a requirement that the coal stations that are being taken off the market before they are fully exhausted should be offered to others. That would seriously alter the balance within the market. There should be a review of the oldest Magnox stations, as that factor will clearly affect the demand for coal.

It should be recognised that the regulator should have more power and should be required to act more speedily. Professor Littlechild's invisibility during the past few months has worried many of us. His published findings will be utterly irrelevant if they are not produced sooner rather than later. I hope that he listens to our debate and takes appropriate action. That would create more confidence in him than many of us have at present.

We are greatly concerned that any review should be genuinely independent. There should be something more than a review by the Select Committee on Trade and Industry. It should be recognised that we want an assessment of the entire energy strategy, not just the future of 31 coal mines. If the Government are not prepared to consider the electricity market, they should refer the matter to the Monopolies and Mergers Commission to explore and, if necessary, introduce additional legislation to correct the position. I think that honest Members of the Government and Conservative Members will acknowledge that the privatisation of electricity is not yet a resounding success. It would give the Government more credibility were they to produce further legislation rather than pretend that something that is not working is satisfactory. Nobody believes that pretence--not even the Secretary of State. He was not responsible for the legislation--I am not sure whether he has read it. In those circumstances he would have no problem in tabling suitable amendments.

It is sad to see how depleted the Tory Benches are now ; it suggests that too many of those who had shown a recognition of the seriousness of the position are now prepared to go along with the Government. If any hon. Members who are still uncertain--if there are any--decide to back the Government tonight, I believe that they will live to regret it, as will their supporters. They will realise that the Government are only delaying the agony, not tackling past mistakes. Were the Government to be

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