House of Commons Hansard Debates for 21 Oct 1992

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defeated today it would force a much more fundamental reappraisal of their energy policy than they have yet laid before us. The Government's survival tonight would mean that the muddle would be likely to continue, with the probable consequence of dearer electricity. It would inevitably result in closed pits, while the balance of payments would move further into the red. All the economic factors about which people are concerned would deteriorate. Even the long-term security of electricity supply would not be guaranteed. A defeat for the Government tonight would be welcomed, even by most Tory voters. It might even do the Tory party good to be forced to reassess the fundamental mistakes that it has made. It would certainly do the country good.

5.25 pm

Mr. Michael Alison (Selby) : One of the most remarkable features of the Government's announcement on the prospective coal pit closures has been the deep concern and the essential rationality of the questions raised in constituents' letters. They have searched for facts and tried to come to grips with the reality of the position. That has happened to such an extent that even Arthur Scargill and his heavies have decided to lie low and try to encourage a rational debate.

Against that background, it is all the more regrettable that my right hon. Friend the Secretary of State should have been subjected this afternoon to a frenzy of baying and points of order that were not remotely constitutional when trying to put forward a rational and constructive case for examining the facts calmly and factually. He was subjected to choruses of barracking, interruptions and shouts such as to belie entirely the claim that the Opposition seek a review, although that word appears on the Order Paper.

If the performance that we have witnessed from the Opposition constitutes a review, what on earth would happen if the Labour party decided to move from a review to a campaign to prevent such pit closures? My right hon. Friend would have to come to the House covered by one of the tanks that are made so successfully in Leeds. It betrays the claim of those who say that they are concerned that they have exposed my right hon. Friend to such treatment this afternoon. But it further enhances the essentially constructive and rational way in which my right hon. Friend seeks to progress. I want him to agree with me on the prospects for a bright future for British Coal, particularly for those pits that I am proud to represent in Selby. There are seven mines, including Kellingley and Gascoigne Wood, which make up the Selby group or complex. As my right hon. Friend reminded the House last Monday, £1.3 billion worth of investment has been sunk into the Selby complex, largely by him and his predecessors in this Government. As a result, we now have a complex with 4,000 employees set to produce 12 million tonnes a year, which works out at about 3 million tonnes a year per thousand men employed in mining.

To put that in perspective, 1,000 men at Grimethorpe, one of the older pits, one of my neighbours in Yorkshire and one of the 10 set to close in my right hon. Friend's initial list, produce less than one third of the quantity produced by 1,000 men in Selby.

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Dr. Kim Howells (Pontypridd) rose --

Mr. Derek Enright (Hemsworth) rose --

Mr. Alison : I must finish my argument, but then I shall certainly give way to the hon. Member for Hemsworth (Mr. Enright), my neighbour in south Yorkshire.

The implications of the Selby productivity level was vividly brought out in the fifth report of the Select Committee on Energy, which showed that, compared to the recent United Kingdom national average of 5 tonnes per man shift, Selby mines regularly score 30 tonnes per man shift--six times the level of national average productivity.

Mr. Enright : British Coal has acknowledged the stupendous strides and improvements made by Grimethorpe. I deeply resent the slur cast on the miners who work there, live in my constituency and are all to be thrown out of work at Havercroft, Ryhill and Hiendley, thus leaving a desert.

I ask the right hon. Member for Selby (Mr. Alison) to join me in appealing to the President of the Board of Trade to reiterate an important part of his speech. I was informed this morning that all development had already ceased in Frickley and the other 21 pits. Therefore, I was pleased to hear what the President of the Board of Trade had to say and I would be delighted to have the backing of the right hon. Member for Selby in appealing to the President to repeat--

Mr. Deputy Speaker : Order. This is a very long intervention.

Mr. Alison : The hon. Gentleman has introduced a novel intervention technique--intervening in my speech to secure a response from the Secretary of State. I do not dispute that technique's validity, and if my right hon. Friend wants to intervene to reply I will willingly give way to him.

Mr. Heseltine : I cannot resist the opportunity offered me so succinctly by both sides of the House. I can reassure my hon. Friend and the hon. Member for Hemsworth (Mr. Enright). I discussed this matter with the chairman of British Coal yesterday. For the avoidance of doubt, I made it absolutely clear to him that he would ensure whatever level of development was necessary so as not to prejudice the outcome of the review of the 21 pits.

Mr. Alison : The hon. Member for Hemsworth alleged that I had cast a slur on Grimethorpe : I repudiate that notion. When I say that output per thousand men in Grimethorpe is about one third of that which we score in Selby, I merely draw the attention of the House to the fact that investment went into Selby in the 1970s and 1980s, whereas Grimethorpe is nearly 100 years old. These are the essential differences that demonstrate the structure of the modern coal industry.

Two reasonable points follow from the productivity achievements of the Selby pits. First, British Coal is producing coal at about £40 a tonne. If that can be secured with a productivity average of £5 per tonne per man shift, how much more competitive could British Coal be if output were concentrated in pits such as those in Selby, at six times that level of productivity?

With the landed cost of foreign coal at about £32 a tonne, a high- productivity British coal industry could beat all comers, foreign coal included.

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Mr. Peter Hardy (Wentworth) : Does the right hon. Gentleman accept that, if coal continues to operate in an unfair market, then, no matter what the productivity at Selby or any colliery, if coal has no access to the base load of electricity generation, even those pits will be impaled?

Mr. Alison : I do not believe that the figures that I have quoted sustain the hon. Gentleman's point. It was said earlier that Grimethorpe's production, at £32 a tonne, could beat imports ; how much better could British Coal perform with output concentrated in pits such as Selby, where productivity is infinitely better than that secured at Grimethorpe ? It could beat all foreign imports easily. This point is further elaborated by one of the most interesting observations in the fifth report by the Energy Select Committee, paragraph 104 :

"Even a 20 per cent. change in the exchange rate changes the effective price of British coal relative to imported coal by £12 to £14 per tonne".

Given high-productivity Selby coal, and given the floating exchange rate, with the pound tending to drift down, the capacity to beat imports and to erect a solid long-term platform for British Coal--providing it from modern, highly productive pits--is almost limitless.

We seem to be a little mesmerised by the 40 million tonne figure quoted as the likely residual coal burn in our power generators, even though my right hon. Friend has confirmed that coal will continue to provide by far the greatest fuel input to power generation. We should not forget that British Coal is selling more than 13 million tonnes to other customers, including 1 million tonnes in exports. If we concentrate capital investment in modern pits--my right hon. Friend's strategy--there is a magnificent prospect for British Coal now, and there is even a prospect of expanding the output and sales of British coal.

My right hon. Friend's dual strategy of contracting old inefficient pits combined with a reasonable programme of mitigation of the effects of that for those who will lose their jobs, together with continuing his constructive work of the past and pouring in huge sums of capital investment to the pits of the future, is surely the way ahead. We ask my right hon. Friend to consider the pits with a future and not to allow himself to be mesmerised by pits dating from the 19th century, many of which are approaching the end of their natural lives.

We must look forwards, not back. There is a bright future for British Coal under my right hon. Friend's dual strategy if it is pursued rationally, constructively and deliberately--and that is what he promises to pursue.

5.35 pm

Mr. Kevin Barron (Rother Valley) : I understand why the Ministers on the Front Bench nod in agreement when the right hon. Member for Selby (Mr. Alison) tells them not to be mesmerised by what is happening. I do not know what would have happened to the people who took these decisions if they had been in my constituency last Tuesday night--and now we are told that those decisions are up for review. The President of the Board of Trade said that this action was to do with costs to electricity consumers. Perhaps he or the Minister for Energy will tell us why, given that, since the privatisation of electricity, the cost of British coal has fallen in each of three succeeding years--those costs constitute 70 per cent. of the costs of the

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generators--and the price of domestic electricity has risen by about 30 per cent. in the same time. The nation wants answers to these questions.

This House today was as silent as a graveyard compared to the reaction to the announcement last Tuesday in the mining communities that I represent. It was a Conservative who brought up the trivial issue of a Labour council buying foreign coal. Last week, 30,000 families were shattered by the announcement by the Department of Trade and Industry, and it is shameful that a Minister should attempt to trivialise the argument in such a way.

The right hon. Gentleman told his hon. Friend the Member for Stafford (Mr. Cash) that there is now some doubt about whether Trentham, which we were told yesterday is to close, will actually close. Miners in the constituency of my hon. Friend the Member for Ashfield (Mr. Hoon), working at one of the 10 pits, were refused access to their work underground there this week. So the President should stand up and tell us what is in the review and what is not. The Government amendment states that 21 pits will be included--not 21 plus Trentham. He owes it to the miners and their families in these 10 collieries to specify what will come under the review.

Mr. Heseltine : I do not want to leave the hon. Gentleman in any doubt. I had hoped that I had explained the position with total clarity, but I shall repeat it. The 10 pits moving to the closure procedure are subject to statutory procedures within which all these issues can be explored. I have given the clearest undertaking that, if a case emerges differently from how the Coal Board has put it to me, the board is responsible, during the statutory consultations, for preserving the option that the pits can be given a new lease of life. That is therefore part of the review procedure with which Labour Members will be familiar.

The review procedure for the other 21 pits I have already outlined to the House. I shall conduct it, and the Select Committee will also conduct a review. So there will be two types of review, depending on the two categories of pits. I hope that that removes uncertainty on the matter.

Mr. Barron : The right hon. Gentleman's intervention clarifies little. How can anybody say that any of the 10 pits are worth keeping open when the work force at some of the pits were sent home when the men tried to prove that the pits should remain?

On Monday, the President said that there was no market for coal because the generators, not just PowerGen and National Power but the so-called independents, had chosen to burn gas. He said that that was because gas will produce cheaper electricity, but no one agrees with him. PowerGen and National Power have admitted that, over the next few years, it will be more expensive to burn gas than to burn coal. British Gas has expressed concern about the extensive use of gas in power stations, and earlier this year the report from the Select Committee on Energy was scathing about this dash for gas. In a statement to the press in March, the President's predecessor, Lord Wakeham, said that he was considering reining back the use of gas. He should have been considering that, because he gave permission for the construction of gas plants, whether they were needed or

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more expensive or would decimate the coal industry. It was only in the face of evidence from almost every section of the energy industry that he admitted that something had to be done, not by the market but by the Government. That was the Government who rigged the market in favour of nuclear power and who not only allowed but encouraged the abandonment of coal in favour of gas. Why are we now being asked to believe that the Conservative Government will be able to conduct their energy policy properly when we never had a level playing field in the past? Is it because the present policy is the same as the one that applied before the election?

I have some minutes that have never appeared of a meeting last December between Lord Wakeham's office, when the noble Lord was Secretary of State for Energy, and British Coal. His policy was described as being to reduce the United Kingdom's coal industry to less than what could be economically sustained by the market by allowing a second tranche of gas stations operating on a guaranteed base load and with long-term contracts. That is evidence of meetings between the British Coal Corporation and senior civil servants and Ministers at which they were warned about what would happen to the coal industry if that second tranche went ahead.

The Government even got round the EC directive against the use of gas in power stations, because they were giving permission for gas-fired stations to be built before the directive was abandoned. They ignored the warning that 22 million consumers would face higher electricity bills because of the sweetener deals agreed between regional electricity companies and independent gas generators. They even dismissed the threat to our balance of trade when Britain loses energy self-sufficiency and has to rely on imported gas and coal. The President of the Board of Trade told the House on Monday that imports were a matter for generators. He said :

"It is not a matter for me."--[ Official Report , 19 October 1992 ; Vol. 212, c. 228.]

It seems that his office and his position have little to do with trade and industry. If the right hon. Gentleman is not responsible for the trade of this nation, who is? His much-heralded interventionist speech took him about a week to abandon. Now that his rhetoric has been exposed to the whole nation as empty, he tries to buy off his critics by :

"giving time for a wide understanding and a slower pace in certain circumstances."--[ Official Report , 19 October 1992 ; Vol. 212, c. 229.]

I am not convinced that an opportunity to look seriously at the long-term needs of this country through a moratorium on 21 of the threatened pits has to do with our long-term energy needs. It has more to do with trying to get the President off the hook that he has been on since Tuesday of last week. He said on Monday :

"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, "--[ Official Report,

19 October 1992 ; Vol. 212, c. 220.]

The right hon. Gentleman might as well not bother having any review if he chooses to use words such as that, which threaten 30,000 miners and their families.

After reciting a long list, the right hon. Gentleman said that he would appoint a company called Boyds, a mining consultancy. Last year, that company was involved in

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looking into the privatisation of the British coal industry. Its report has been kept secret, but the infamous Rothschilds report which appeared last year and the announcement on Tuesday of last week are directly related. We can look forward to eight coal mines by the end of this decade--fewer than the number announced.

The country needs clear and unequivocal answers to the questions posed over the past eight days. Most important, the 2,000 coal miners who work at Maltby and Kiveton Park collieries in my constituency need to know whether the review will be a face-saving exercise for the Government or whether it will determine the nation's needs for years to come.

Last week's decision should not be seen in isolation from the closures over seven years of almost 150 coal mines and the loss of more than 140,000 jobs. In the past two years, my constituency has seen three of its remaining five pits closed. As a consequence, unemployment has increased by 52 per cent. In addition to the closure of the three mines, a coke works has closed and there have already been job losses at Kiveton colliery, the closure of which was announced at the end of March. Supply industries have also suffered and there has been a knock-on effect whose impact is already being felt by local shops and services.

The travel-to-work area covering Maltby has 16.5 per cent. total unemployment. Male unemployment is 23 per cent. Among those aged 25 to 30, mining in south Yorkshire provides one in four jobs. At a stroke last week, 2,000 people in that age group in the Rotherham borough were threatened with the sack. Last month, 68 vacancies were advertised in Maltby and Dinnington job centres--a ratio of one vacancy for every 66 people registered as unemployed. Those areas already have assisted area status, the trumpet blown last week by the DTI when it made the announcement. The Government's amendment mentions the introduction of special assistance measures. They would need to take that back to the drawing board.

Last week, the Government said that they would speak to English Estates, which has a good record in providing factory space throughout Britain, but, in the past 12 months in the Rotherham borough, 30 per cent. of factory floor space has become vacant because of the current recession and the pit closures. No simple answer will be provided by people running into those factory spaces in the Rotherham borough where jobs are threatened. There are too many empty factories as it is.

Last week, we were also told about clearing pit sites and making them available for sale or development. The Rother Valley already has 655 acres of derelict land as a direct result of pit closures. The closure of Kiveton will increase that to over 760 acres.

Last week the DTI mentioned RECHAR. I do not know how many times we have heard about that in the House. We were told that RECHAR was the answer to the problems that would be caused by the job losses. The scheme was approved in principle in 1989, and eight months ago the Government announced that agreements had been reached with the European Commission to enable money to be spent in coalfield areas. When the President of the Board of Trade came to the House on Monday, only the expenditure of £782,000 of the £23 million allocated by Brussels for south Yorkshire had been agreed. Absolutely nothing is currently being done about using that to sort out our problems.

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We have already seen the Government's commitment to the regeneration of coalfield communities in action. In my constituency and many neighbouring constituencies, that commitment is pathetically poor. The communities of Rother Valley reacted last week with shock and disbelief to the news that the Government were prepared to compound the already desperate problems that those people face. Kiveton colliery was widely regarded as having only a short life, despite the fact that the low seams in the colliery are worked with great difficulty but great skill by the miners and that it has made good profits in earlier years. Yet in spite of the expectation that at some stage in the not-too- distant future the colliery was likely to close, no steps were taken to encourage inward investment in the area. Nothing has been done to alleviate the effect of the closure on a community with high and rising unemployment.

The other colliery in my constituency that will be affected by recent announcements--Maltby--is the one in which I worked before I left in 1983 to come to the House. Members of my family live in the area. It was announced last week that Maltby would be one of four collieries to be mothballed. It is just completing a £183 million investment programme, and, as the right hon. Member for Selby said, the future of British coalmining lies in a high investment of capital in mining areas. An investment programme of £183 million has opened up some of the richest coal seams in Britain. They equal anything that has been found elsewhere, including the Selby coalfield. Everybody at Maltby, from the manager to the newest recruit, was told last Tuesday that he would be sacked before the end of March 1993. Nobody at the colliery or in the community could believe that such a senseless decision had been taken.

Maltby has been a showpiece coalmine. It has been heralded as an example of the future of British mining. The national press reported last week that its work force had won the Business in the Community award for voluntary effort.

Mr. Winston Churchill (Davyhulme) : On a point of order, Mr. Deputy Speaker. Would it be in order for hon. Members to follow Madam Speaker's injunction and to restrict the length of their speeches even outside the 6 to 8 pm period?

Mr. Deputy Speaker : I am sure that everyone in the Chamber is aware that many right hon. and hon. Members wish to contribute to the debate. There is no limit on the length of speeches except between 6 pm and 8 pm. In the meantime, I hope that right hon. and hon. Members will bear in mind the fact that there are many who wish to speak.

Mr. Barron : For health reasons, this is the first time that I have spoken in the Chamber since being re-elected in April. It is my intention, however, not to let last Tuesday's announcement--it will have a devastating effect on my constituency--pass without comment. At the same time, I should like soon to resume my place and let others participate in the debate.

As I was saying, Maltby colliery has been a shining example of what the future of British Coal should be. Those involved have worked throughout the community. I have received letters from business men whose companies are not directly affected by the announcement. I have received a letter from a local head teacher who is

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concerned about the future of the children in his school, who are themselves fearful of the poverty and homelessness that is a direct result of unemployment. The chairman of the area health authority has written to highlight both the physical and psychological damage to miners and their families that will be caused by pit closures and consequent unemployment.

The opposition to the closure announcement has been unanimous. I have never known such breadth of opposition and depth of anger. Rother Valley Conservatives from Dinnington and district have sent me a copy of the letter that they wrote to the Prime Minister last week. Part of it states :

"In view of the fact that during the last few years the nearby Maltby colliery has had a multi-million pound modernisation packet and now finds itself being mothballed', we are finding difficulty in arguing against the accusation that this money has been spent only with a view to privatisation."

Their meeting was unanimous in its "feeling of disgust" at what was described as the decimation of coalmines.

Political parties, Churches, schools and other representatives of the local community are joining this Saturday in Maltby to express their anger at the Government's actions towards their local pit and to every pit that is under threat. This is not a narrow, party-point-scoring exercise but the expression of entire communities throughout the country. They are saying to the Government that they, the Government, are on a course that is unacceptable to the British people.

The President of the Board of Trade keeps telling us that he has made it clear that National Power and PowerGen should consider the impact on communities of their decisions. On 9 April, those who voted Conservative did so because they thought that they were voting for a Government who would accept responsibility for the social fabric of the nation, including mining communities. They were wrong. The Government have made it clear that they do not accept the obligation placed on them by the democratic process back in April. In reality, they think that decisions should be made for commercial and business reasons and not for the government of the country. The Government have no justification for using the argument that they have produced against 30,000 miners and tens of thousands of others who will be affected by the announcements of last week. It is time that the Government considered whether they are fit to govern the nation when the people have said that they believe that they are not.

5.55 pm

Mr. David Howell (Guildford) : There is no doubt that the announcements of last week--enormous numbers of threatened pit closures and redundancies--came as an appalling shock to many. As my right hon. Friend the Secretary of State fairly recognised this afternoon, the suddenness of the decision indicated that the handling of the matter had been too speedy and too rushed. I think that that must be recognised. That is the starting point for the return to the more balanced approach that, as my right hon. Friend the Member for Selby (Mr. Alison) said, has always been the aim of successive Governments in dealing with the transformation and modernisation of the coal industry.

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It must be recognised, however--I believe that right hon. and hon. Members with longer memories than others will accept this--that under successive Labour and Conservative Governments since the second world war it has been the policy to create, by modernisation, a smaller but highly efficient coal industry. That process has been inevitable. That has been the aim of successive Governments, and there have been many difficulties along the way. I shall outline shortly how these difficulties seem to arise and cause such agony.

It is not true--this is what the hon. Member for Livingston (Mr. Cook) seemed to suggest--that there lies ahead the wipe-out of the coal industry for power generation in the United Kingdom, the rest of Europe or the world. Coal, particularly that which is internationally traded and including highly competitive British coal from many superb pits, will continue to play a major part for decades ahead in electricity generation. It is our job to ensure that the conditions that allow that to happen are maintained and developed.

My right hon. Friend the Secretary of State is right to go for a review. He would be even more right--I hope that he is saying this--to set in place policies and programmes to ensure that every redundancy is handled sensitively with the utmost care. The entire policy of shaking up appallingly the lives of many thousands of dedicated workers, many of whom are employed in awful underground conditions, must be handled in a way that is worthy of the tradition of the Conservative party as well as that of the Labour party. There must be humane social policies when we are all faced with appalling levels of change.

Why did everything arise so suddenly? Everyone was caught by surprise. I want to focus on the relevant institution, which has not had much of an airing so far in the debate. I refer not to the Department of Industry or British Coal but to the Treasury. I suspect that if we trace the powder trail from where the explosion took place last week, we find that it began in the Treasury. I do not have inside knowledge of how these matters suddenly came to the fore last week but I have a personal and painful experience of the same thing happening on a smaller scale about a decade ago when I was Secretary of State for Energy. I shall share with the House what happened then. It will see for itself, I suspect, that something similar happened in the recent past.

Matters begin with the Treasury getting into a public expenditure cutting mood, which heaven knows it is in now. When that happens it begins to say, "This sort of subsidisation, especially with growing stocks of coal that are not being sold, cannot continue." Pressure is put on the Secretary of State to cut cash limits and investment limits. The Secretary of State then goes to British Coal--previously it was the National Coal Board--and says, "This is your funding position. You had better start drawing up plans that will realistically fit the proposed funding." The industry produces plans and returns to the Secretary of State, who examines them. At that stage, the plans always leak. That is not the result of Government malignancy but because British Coal, which is a huge

organisation--previously it was the National Coal Board at Hobart house-- find it impossible to keep them secure.

At that point the whole thing turns into uproar and the Minister is left with a fizzing hand grenade in his hand. The question is whether he can run fast enough to his Cabinet colleagues before the damn thing blows up. In my case I

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ran very fast, but not fast enough and the thing blew up and quite hurt my hand, but I have recovered now. That is what occurs when such issues come to the fore and plans are leaked in advance before Ministers have time to complete their plans. My right hon. Friend has made it clear that what was in the pipeline was a major, sensitive and elaborate programme to handle such a gigantic transformation. I draw two lessons from the experience that I have recounted and from the uproar of last week. First, we must prepare years ahead when it comes to the transformation of this huge industry. We must involve every Department in the social programmes and the community revitalisations. My right hon. Friend is now seeking to do that with the help of Lord Walker and others. Every village and community must be visited ; every family problem must be understood.

The transformation must be undertaken on a careful, prolonged basis. That is what they did in Belgium when its huge coal mining industry was reduced to zero. That is what happened in Japan where the work force were reduced from 348,000 to 5,000, working in only five mines. To some extent, a similar programme was undertaken in France and that is what we must do. I am glad that we are hearing about those transformation plans now. I think that I can guess why we did not hear about them so clearly when the whole thing blew up a week ago.

My second conclusion, which will not be welcome to my right hon. Friends, is that the Treasury will screw up anything given the chance. In this instance it is important to examine the relationship between the handling of the coal modernisation programme, the inevitable redundancies that will occur, the deflation that we and the rest of the world are experiencing and the current state of public expenditure policy. Those things are linked and it is not entirely right just to concentrate on the narrow issue of energy policy. We must consider it in the wider context of the Government's economic policy. I understand, greatly to my delight, that that policy is now beginning to undergo an adaptation as we face the fact of worldwide deflation and recession and the prospects of rapid recovery retreating into the future.

The pressures for economies in the coal industry, which I am sure are necessary, are undoubtedly part of the programme designed to contain the growth in public expenditure. Those economies are the first taste of many similar economies in all sorts of programmes. Last night the Prime Minister said that there are many other unpopular decisions to come regarding public expenditure. When my right hon. and hon. Friends call in general terms for cuts in public spending, that sounds terrific, but we must recognise that when cuts are made to particular programmes it becomes a sensitive and difficult issue. It is no use just running from those decisions when we are faced with something that we do not like. There is also the great danger that the public expenditure drive can become too rigid and lead to the kind of explosions and over-sudden decisions that we have seen in relation to the pit closures and the coal modernisation programme.

My right hon. Friends believe that, next year, public expenditure should be subject to a rigid, control total which cannot be broken and into which everything must fit. It is thought that if one cannot stop expenditure on unemployment benefit from going up, something else must be cut. That concept has great relevance to the coal

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modernisation programme and should be treated with great care. We tried that concept in 1982 and 1983 and, frankly, it did not work. Even if one puts in place a control total in boom times, one ends up cutting capital spending because one cannot cut a lot of social spending. In times of deflation it is wrong to cut public capital spending. It is wrong to pursue policies too quickly which, in times of full employment, might be more appropriate. I urge my right hon. Friends to be extremely careful about that control total as it might lead to more decisions that will lead to explosions similar to that which occurred over the coal modernisation programme.

In times of deflation, public spending should be determined by what can be prudently financed--what the markets will finance without forcing up interest rates. Right now lower interest rates and more public spending, but not just any kind, are both possible. Hon. Members who follow such things closely will know that narrow and broad money are not swelling as one would expect ; they are well under control. It would be perfectly possible to reduce interest rates further as long as that was announced by the Bank of England and not seen as a politicised gesture. I know that I have bored hon. Members with my favourite hobby horse on many occasions, but until we depoliticise the announcement of our short-term interest rates we will continue to have difficulties when handling short-term rates and monetary policy. In the light of existing deflation we could now have lower interest rates.

We should not cut capital spending now. We should restore any existing cuts that may have been agreed, or proposed by Treasury Ministers a few weeks ago. We should increase capital spending. The huge City of London transport programme, for example, would provide additional employment and help, if not directly to miners, certainly to the ancillary and heavy engineering businesses.

We want to see a package for small businesses. That could all be done without any inflation risks. If hon. Members question that, they should consider countries such as Japan which has vastly increased its anti- deflation packages without any risk of inflation. Above all, we need to reform unemployment policy.

On a point of order, Mr. Deputy Speaker, I should like to know whether we are now subject to the 10-minutes rule? If so, when are you going to ring the bell on my speech?

Mr. Deputy Speaker : The 10-minutes rule operates between 6 pm and 8 pm. The right hon. Gentleman commenced his speech at 5.55 pm, so he will have to finish by 6.10 pm.

Mr. Howell : I shall try to pitch my speech even shorter than that.

To cope with the challenges raised by the pit closure programme we need to restore and increase capital spending in the public sector. We need a rescue package for small businesses. All that could be done without the risk of inflation. We also need to reform unemployment policy. I am not satisfied that we spend £8.9 billion a year on unemployment benefit when we get nothing for it. Even the word is wrong--today there should be no need for anyone to be unemployed involuntarily. The idea of the scrap heap is an outdated concept that belongs to the economics of the past.

Everyone in our society should have a function and should have the dignity afforded by performing it, unless

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they happen not to want to work. Everyone should have the opportunity to perform that function even though it may not offer a full economic wage. The transformation and the modernisation of the mining industry should proceed at the right speed and every miner and worker related to the industry should be reabsorbed into a job or function, if only after a while. That can be done and is consistent with any changes to the industry.

When interviewed last night, the Prime Minister recognised the tasks that confront us--in part they have been prompted by the suddenness of the decision on the coal industry. We must get on and cut interest rates further--it is perfectly prudent to do that providing that the Bank of England announces those cuts, not the Treasury. We must increase capital spending ; we should certainly not cut it. We must also revise the unemployment strategy from head to toe so that we get far better value for the enormous expenditure that is poured out now.

Last night the Prime Minister said that he and the Government were looking for "a strategy for growth", recovery and the future. Out of the suddenness and shock of the coal industry decision we have the opportunity to outline and carry out such a strategy. Without it there will be no growth, no recovery and no future worth having. 6.8 pm

Mr. John Evans (St. Helens, North) : I participate in this debate with a heavy heart. In the past 13 years, it seems that every time I have spoken in the House it has been on an Opposition motion about closures, sackings, rundowns or the collapse of British industries. This debate is indicative of much that is wrong with Great Britain in the 1990s.

Ten days ago, seven Ministers meeting in secret agreed to slash Britain's coal industry from 50 collieries to 19 by closing 31 pits, with the loss of 30,000 mining jobs and 50,000 to 60,000 jobs in related industries. Tragically, most of those losses are in areas already suffering unacceptably high unemployment.

The closures announced last week were the most savage rationalisation ever inflicted on any sector of British industry, and come at a time of deep recession and massive unemployment. They are also a waste of Britain's most enduring energy resource. This country has the greatest coal deposits in western Europe, and most of them are to be left in the ground in collieries that will be flooded and filled with gas.

That seven-man, secret decision was not divulged to the Cabinet, Parliament or public, and the subsequent uproar when the public realised the extent of the industrial vandalism being inflicted on the country scared the wits out of a considerable number of Tory Members in marginal seats--many of whom subsequently made public statements that they could not and would not support the Government in any vote on that policy in the House. That caused the Government in turn to panic.

The Government were terrified that they might lose a critical vote, and on Monday we had the spectacle of the President of the Board of Trade coming to the House with a statement that apparently offered concessions. I submit that they were aimed more at buying off dissident Tory MPs than at meeting the country's energy requirements.

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I read the right hon. Gentleman's statement to the House three times, and nowhere did he mention the word "review". Today's appalling speech by the right hon. Gentleman will cause bewilderment among the miners in my constituency who are to lose their jobs, because he never addressed any of their problems. Today, the President of the Board of Trade said that everything is to be reviewed, whereas on Monday he said that virtually nothing was to be reviewed. His main concession was that British Coal would immediately close only 10 collieries. He stated :

"We have therefore concluded that, for the time being, British Coal should be allowed to proceed with the closure of only 10 pits, which it has told me are currently loss making and have no prospect of viability in the foreseeable future."

The case of Parkside colliery in my constituency is absolute proof of the necessity for a wholly independent review of the closure programme and of Britain's energy requirements. On Monday, I told the right hon. Gentleman that the closure of Parkside without further review was incredible. He replied :

"The figures that British Coal has shown 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."--[ Official Report, 19 October 1992 ; Vol 212, c. 205, 224-225.]

The closure of 10 collieries was confirmed by the Prime Minister yesterday, when he replied to my right hon. and learned Friend the Leader of the Opposition :

"So that there is no dispute or misunderstanding anywhere in the House, let me make clear the position of the 10 pits identified by my right hon. Friend, and that of the others that he mentioned in his statement. In our judgment, the 10 pits that he specifically named have no sustainable economic future".--[ Official Report, 20 October 1992 ; Vol 212, c. 315.]

In the information that the Coal Board has given the Prime Minister and the President of the Board of Trade, it has at best been economical with the truth, and at worst has told them a pack of lies.

Parkside, opened in 1964, is a profitable colliery. British Coal's own figures show that in 1987-88 the colliery made a profit of £5,093,000 ; in 1988-89, £3,258,000 ; in 1989-90, £1,720,000 ; and in 1990- 91, £5,074,000. Despite a difficult first half-year in 1991-92, Parkside still made a profit of £2,874,000.

Although the first quarter of this year also was difficult, new coal-face machinery costing £6 million has just gone on stream and is being bedded in. The miners at that colliery expect the pit to be profitable by Christmas. If Parkside closes, that £6 million machine and all the other equipment there will be left to rot in the ground. None of it will be salvaged.

Parkside is strategically placed at the junction of the M6 and the M62. It can compete with imported coal, and serves the entire north-western region with fast access. It has a guaranteed market at Fiddler's Ferry power station, which takes 80 per cent. of its coal, only eight miles away by train.

The British Coal figures for Parkside prove that it is profitable. If it merits a review, I suggest that any figures suggesting the unprofitability of all the other collieries on the closure list are also dubious. If the review is to be meaningful, all 31 collieries must be individually examined and the facts presented to the House and the country. The miners of Parkside and all my other constituents are entitled to nothing less.

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