House of Commons Hansard Debates for 25 Mar 1993

Mr. Heseltine : My hon. Friend has taken a particular interest in this matter and I am most grateful to him for what he has now said. Within the legal constraints which I have explained to the House and on which I have taken advice, we are in discussion with the French Government. This is not, perhaps, the best moment in history at which to pursue these discussions, but I certainly give my hon. Friend the assurance for which he asks : they will be continued. We have seen some welcome developments since these discussions got under way and my hon. Friend has played a conspicuous part in that.

On the central issue which my hon. Friend put to me, we are trying to give British Coal the opportunity to seek out these additional markets, partly because we have been able to show where some of those markets will be and partly because the generators are now saying that they wish to negotiate supplemental contracts over and above the base contracts which have been concluded effectively today. So the only lasting position for their future is to seize that opportunity at a moment when there is a drive to competitive positions.

Mr. Doug Hoyle (Warrington, North) : Does the President of the Board of Trade realise that his statement today does nothing for the long-term energy future of this country? Nor, indeed, does it do anything to save Parkside, the last pit in the north-west that is viable and has long-term reserves. What has happened to the right hon. Gentleman's promise to intervene? Does he no longer eat breakfast, lunch and dinner? Does he not realise that his reputation and career are in tatters?

Mr. Heseltine : The pit to which the hon. Gentleman refers is one of the 10. He will know that it is now subject to consultation and it would be inappropriate for me to comment on it. If British Coal is determined to proceed to closure, there will be an opportunity for the private sector to make arrangements to take it over.

Mr. Tom King (Bridgwater) : While everybody regrets the loss of any jobs, particularly in the mining industry, is not the truth that no Government of either party has been able to guarantee jobs in the mining industry, an industry which as recently as 1955 employed no fewer than 750,000 people, and that the only guarantee comes from the level of the market?

Does my right hon. Friend accept that his statement will be seen as a genuine and thorough attempt to give the coal industry the best chance for the future without undermining the competitive position of the rest of British industry? Will he also give an assurance that the energy market, the review of the Magnox stations and new investment will be looked at fairly, on their merits?

Mr. Heseltine : My right hon. Friend knows a great deal about this market and I can readily give him the assurance that he has sought. I am grateful to him for the way in which he has described the work that we have tried to do. This is about an opportunity, but I think that British Coal is only too anxious to respond to that opportunity. Some of the recent productivity gains that have been achieved will help them on their way.

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Mr. Dennis Skinner (Bolsover) : Is the Minister aware that he has just delivered a confidence trick that would have done Paul Daniels proud? This is set against a background of more than 4 million people out of work, so I plead with the Government not to weep crocodile tears today about unemployed people. More than 50,000 people will lose their jobs in the mining industry and elsewhere as a result of this statement. The Minister said that his hands were tied, but if he had taken the import levels back to 1979 and the opencast levels back to 1979--he always quotes that year-- and if he had stopped orimulsion, he would have saved 25 pits. If he got rid of the Magnox nuclear reactors he would save another five pits and if he had had the guts to say to the French that we were not going to have their electricity sold here in Britain, just as the French are saying that they will not buy our fish, we could have saved another six pits and thus saved all 31.

The truth is that we are faced with a gutless and spineless Government who should be got rid of as soon as possible.

Mr. Heseltine : The real question for the hon. Member is, what was he doing before 1979 pursuing policies, the logic of which we are discussing today?

Mr. Tim Devlin (Stockton, South) : Is my right hon. Friend aware, that since this review began, not one new exploration platform has been authorised for the North sea and not one new platform has been commenced at any yard in the north-east of England? While all of us in the north of England want to save the coal industry in our part of the country, by any means that we can, we also realise that the benefits of the future rest on the North sea and the riches that it possesses, and we look forward from today's statement for a further development there in the very near future.

Mr. Heseltine : My hon. Friend comes to the heart of the matter. The announcement I made today about Connah's Quay is very important to British industry. Creating jobs there might have a very attractive long-term potential, for work not only in the North sea but in the international exploration industry.

Mr. Greville Janner (Leicester, West) : Why did the President of the Board of Trade studiously ignore, in his statement, the unanimous report of the Select Committee on Employment on the employment consequences of the pit closures? Could it be because it was the unanimous view of all the members of the Committee, whatever their political views, that both the true national costs and the social effects of pit closures should have been, and were not, taken into account and that no pit should be closed, unless and until there has been full consultation and complete consideration of all the factors in that unanimous report, and every effort had been made to safeguard not only the miners concerned, but the other affected workers, of whom there are twice as many?

Why did not the Government permit their response to the report to be made available to members of the Committee until after the President had sat down, when the report was placed in the Library? Could it be because the Government's response to the unanimous report included this disgraceful sentence :

"The Government considers that the estimation of the financial costs of unemployment referred to in the Select Committee's conclusions would not be meaningful"?

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Surely it is meaningful that there are national costs, personal costs, social costs and misery in the devastating effect referred to in this unanimous report on all the pit closures. Will the President please consult the Employment Secretary and come back with a worthy reply that will help the people whose lives will be wrecked by his statement?

Mr. Heseltine : The hon. and learned Gentleman will know that my right hon. Friend the Secretary of State for Employment has replied to the Select Committee's report--an entirely proper course. Let me take one central issue. When jobs are created, very few people go round multiplying the number by three to indicate the number of potential jobs in the economy. However, when jobs are destroyed, people immediately multiply the number by three in order to show the harm that is being done. In my view, in both cases people are likely to be far short of the real world.

Mr. Michael Alison (Selby) : Does my right hon. Friend recognise that the new hopes and the new opportunities that his statement gives to British Coal as a whole will be even more advantageous to the low-cost, high-productivity, Conservative-financed pits, such as the Selby complex? Does he recognise that he may even have underestimated the scope for exporting British coal to Europe, particularly from pits like Selby, where the cost of production is already at the low world-cost level?

Mr. Heseltine : My right hon. Friend has a deep interest in the matter. I am very well aware of the excellence of the Selby pit. British Coal is now beginning to achieve remarkable advances in productivity. The sad reflection--indeed, the tragedy that lies behind this entire debate--is that, if there had been such achievements years ago, we should be having a very different sort of debate today.

Mr. William O'Brien (Normanton) : What we have had from the President of the Board of Trade today indicates that he has no knowledge of the mining industry. The fact that he has named Sharlston colliery--my colliery--for early closure amounts to a stab in the back for 700 men who work at that pit. Will the President of the Board of Trade explain to those men why, with the fuel fossil levy that all of us pay through our electricity bills, which will be 10 per cent. of the total account from next April, they cannot have a share of that levy to help save the pit? The reserves are there. What we need is investment and a visit to Sharlston by the President of the Board of Trade to hear what the men have to say about his decision to close their pit early.

Will he also explain why, in an area where there is to be early closure of pits, assisted area status is not being afforded to the local authority? What we are witnessing is a stab in the back from the President of the Board of Trade for miners in general, but for Sharlston in particular.

Mr. Heseltine : The hon. Member will be fully aware that decisions about moving a pit to closure are a matter for the board of British Coal. It is a little unwise of the hon. Gentleman to suggest that the members of that board do not bring a very great degree of expertise to such matters. It would not be appropriate for me now to comment on the individual pits that are the subject of this announcement. [ Hon. Members :-- "Why not?"] Because they have to move to statutory consultation procedures. That is a matter for British Coal to continue, which is what it will do.

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Mr. Richard Alexander (Newark) : Is my right hon. Friend aware that, despite the decision to locate the headquarters of the energy commission in Nottinghamshire, the pit closure programme that he has announced today will cause devastation in north Nottinghamshire, particularly at Bevercotes, where I have 500 constituents who will be out of work immediately? Does he recollect giving an undertaking to the president and secretary of the UDM that he would do everything that he could to keep UDM pits open? [Interruption.] How does he square that with the fact that, at the end of the day, only three of the formerly seven UDM pits will remain open?

Mr. Heseltine : I am aware of the acute interest that my hon. Friend has in today's announcement. It is not possible for me or British Coal to distinguish between pits on the basis of which unions happen to represent them. We are acutely aware of the remarkable contribution that the UDM made towards the advances of the industry in the early 1980s. While that is true, it is not a factor that can enter into the consultative procedures.

My hon. Friend said that there would be an immediate change and people would lose their jobs. That is not the case. The procedure is that the pit moves into a closure consultation procedure, not for closure, but for a regime of care and maintenance, so that, if the market should prove to be even larger than we are talking of in respect of those that remain open, there is the possibility of reactivating the pits.

But should Bevercotes move through the consultation procedures and as a result British Coal decides that it should close, at that stage there would still be the opportunity for the private sector to make an offer to take it over.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney) : Is the right hon. Gentleman aware that, if Taff Merthyr colliery closes, it will be the end of one of the greatest and proudest traditions, the end of mining in the Merthyr valley, even though that valley has more than 20 per cent. of men out of work and another 20 per cent. economically inactive? We passionately believe that we have economic reserves that could go to a power station no more than 15 miles down the road by direct rail line. Will the so-called consultation procedures now allow us to put before an independent review body the case that we want to make for Taff Merthyr colliery?

Mr. Heseltine : My reply to my hon. Friend the Member for Newark (Mr. Alexander) is relevant to the questions that the hon. Gentleman is asking. If British Coal determines that the pit should close, it will be available for sale to the private sector. It is already in the consultative process and it would not be right for me to interfere in that process. Anyone who knows south Wales as well as the hon. Gentleman does--and I have some knowledge of the area--knows that there has been a dramatic rundown in the coal mining industry in recent years, a wide diversification of the Welsh economy and a substantial improvement in prosperity as a result.

Mr. Michael Jopling (Westmoreland and Lonsdale) : Is my right hon. Friend aware that few fair-minded people will wish to argue that he and the Select Committee have not worked extremely hard to find as good a future for the coal industry as is reasonable? How much will the package

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that he announced today cost the taxpayer? He said that it could cost several hundred million pounds. I am sure he had to be more specific than that with the Treasury. How much is it likely to cost, and did the Chancellor of the Exchequer include that sum in the PSBR estimates that he gave in the Budget last week?

Mr. Heseltine : There is a complication about the questions that my right hon. Friend asks. I cannot know what level of contracts will follow from the opportunites that I have created, so I have given an indication. The Select Committee mentioned rates of subsidy that would, in its judgment, take the price of British coal from the present production costs to world market prices. The language that I chose, to indicate as much support as I could, was that I would embrace the range of figures that the Select Committee had given. But I am not prepared--the House will understand--to put a sum of money on the table in public, because we are negotiating with private sector companies, which have their own self- interest for which to negotiate, and the moment they see our price, they will seek to increase it or to give less for it than we would wish to achieve. While I have discussed this matter fully with my right hon. Friend the Chancellor of the Exchequer, it would be naive to put one's negotiating cards face up on the table.

Mr. Lawrence Cunliffe (Leigh) : Why does the right hon. Gentleman not accept what every financial fuel consultant and accountant in the energy industry accepts, that the aging Magnox power stations are the most expensive fuel on base load for the electricity grid ? [Interruption.] Hon. Members can say what they want. It is a fact. Why does not the right hon. Gentleman understand that even half the £1,270 million subsidy to the nuclear industry, which is roughly the amount that should have been given in an answer to the hon. Gentleman from the Chancellor of the Exchequer, or about £500 million, would save seven collieries, not only in the short term but guaranteeing their long- term security for nearly 15 years?

Mr. Heseltine : On reflection, the hon. Member may feel that he has not totally reflected the situation as it is. British Coal today is coming to the end of a contract which was worth something like £1 billion a year to it in the prices that it was receiving, over and above the market price of coal. In addition, as my right hon. Friend the Prime Minister said during questions, about £18 billion has been put into the industry since 1979, so there is no question but that the coal industry has received, and is receiving, substantial subsidies.

Dr. Keith Hampson (Leeds, North-West) : Is my right hon. Friend aware that all the members of the Select Committee agreed that there were severe limits on how far one could extend the coal-generated electricity market ? There are no easy answers such as the acceleration of the closure of Magnoxes. The 16 million extra tonnes we thought might be possible could not be written in stone, simply because it was predicated on a total closure of the French link. Will he therefore confirm that, in offering his subsidy to British Coal, he is seeking to increase the market in that range of 12 million to 15 million tonnes a year, and will he confirm that to bring the price of British coal down to import price levels, it is vital that the productivity of British pits is enhanced as quickly as possible ? That will need assistance from the House,

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enabling British Coal to improve management practices and working practices in the pits and enabling the private sector to do a better job than it otherwise would do.

Mr. Heseltine : As a member of the Select Committee, my hon. Friend knows a good deal about the subject. He is right to point to the essential need for British Coal to achieve its productivity levels, not just in the pits but in the management of individual pits and in headquarters staff. These gains must be achieved if there is to be a competitive future for British Coal. I am assured by the management of British Coal that it intends to move forward with dispatch in this direction.

My hon. Friend then asked whether I would give a broad indication of market. I would have to say, having looked at the Select Committee report, that even if one takes out the calculations included for EdF, the assumptions of the Select Committee are still at the top end of the range. They are significantly above, for example, what my own consultants, Caminus, indicated and Caminus are above what British Coal indicates as the likely market, so there is a judgment to be made. The only way to determine the market, however, is for customers to sign contracts, and the customers in this case are bound to be, significantly, the electricity supply industry. It has its own views of what the market will be. It is only on that view or any other market that we can find that contracts will be forthcoming.

Mr. John Evans (St. Helens, North) : Is the President of the Board of Trade aware that 800 miners and their families at Parkside colliery in my constituency will have listened to his statement today with anger and dismay? In a 20-minute presentation to the House, he said not one word about Parkside and the other nine collieries which, it would appear from his statement, are doomed. Will he confirm that British Coal is determined to close Parkside colliery, a colliery that has been profitable in each of the past six years, and throw 800 miners on to the scrap heap in an area where there is already more than 15 per cent. unemployment, at considerable cost to the taxpayer? Is it not a fact that the short-term fix that he has offered to the House today will do nothing for the British mining industry and, in fact, seeks to save his own job?

Mr. Heseltine : The hon. Member will be aware that 30 per cent. of the miners from Parkside have already accepted since last October the redundancy terms that we have made available to them.

[Interruption.] He will also be aware that the reason why I did not mention the 10 collieries in my statement is that they are subject to the procedures of consultation and it would be wholly inappropriate for me to refer to them.

Mr. Patrick Cormack (Staffordshire, South) : In view of the immense time and trouble that my right hon. Friend has taken to produce this report, for which I thank him, and in view of the detail that it contains, would not it make sense if we debated it slightly later next week, when people have had a chance to digest it and make representations to hon. Members? If we were to debate it on Wednesday or Thursday, it would still be before Easter.

Mr. Heseltine : My hon. Friend raises a matter that is essentially for my right hon. Friend the Leader of the House. I must allow him to judge the order of priority of Government business.

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Mr. Joseph Ashton (Bassetlaw) : Is the Minister aware that he has offered nothing to the coal-mining industry today? Will not the subsidy simply come out of the VAT that is to be levied on electricity in a year's time? Will that subsidy simply go to encourage the privatisation people, who will come into the industry to try to lower wages and make miners work longer hours and then, if the miners refuse, close the pits because they are not interested in digging coal, but rather in getting cheap land, railway sidings, the property, everything else that is attached to a pit--

Mr. Eric Clarke (Midlothian) : Yes, and miners' pension rights.

Mr. Ashton : And pension rights, as my hon. Friend says. They will use his subsidy to make massive profits without producing one extra tonne of coal.

Why has the right hon. Gentleman said nothing about assisted area status? He quotes 1979, when my area was given assisted area status by the Labour Government, but his Government took it away, with no promise at all of ever putting it back.

Mr. Heseltine : I assure the hon. Member that there will be no threat to any pension rights of any miners in whatever circumstances develop. [Interruption.] The longer Labour Members tell their constituents the sort of things that we are hearing in the House, the longer the threat to British Coal will exist. If we had faced the need to modernise the coal industry throughout the early decades of this past half- century, we would have seen the coal industry of this country enjoying a far larger market than it currently does. It is because the Labour party told them that there was some other way that we have delayed making many of these difficult decisions.

Mr. John Butterfill (Bournemouth, West) : Does my right hon. Friend accept that the Select Committee will wish to study in some detail the White Paper that he has presented to the House today? We are all very grateful that he has accepted our principal recommendation, that British Coal be given a subsidy to enable it to become

world-competitive over the next few years. As my hon. Friend the Member for Leeds, North-West (Dr. Hampson) said, that will require considerable productivity gains. While we accept that he has done a great deal to try to influence the French, will he also accept that, whatever the legal technicalities may be, it is not really acceptable in terms of Community spirit that the traffic across the interconnector should be all one way?

Mr. Heseltine : My hon. Friend is right. I can assure him that, of all the subjects we have had to look at in the context of this review, it would be fair to say that the interconnector has taken a disproportionately large amount of time. It merited a great deal of time, and I was the first to recognise that, but I had no choice but to publish for the House the summary of the legal opinions--because I did not rely on one alone--that I was presented with. I could find no way through and I have published it for the House. So one must adopt the only alternative route, which is to discuss the thing with our French opposite numbers. This my hon. Friend the Minister of State has done, and I believe that we will have an improved position as a result.

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Mr. Adam Ingram (East Kilbride) : Is it not the case that the President of the Board of Trade inadvertently misled the House this afternoon when he said that he had considered every recommendation of the Select Committee report? Having read through it very quickly, I do not think that that is the case, and the record will prove different. Is he aware that Scottish Power and its Scottish consumers take a disproportionate share of the sulphur dioxide emission reductions? What guarantee can he give Scottish consumers that their electricity prices will not go up and that they will not be further disadvantaged by his statement today?

Mr. Heseltine : I hope that the hon. Gentleman is wrong ; certainly, he is describing something entirely different from my intention. I have assured the Select Committee, and instructed my Department, that I want the White Paper to respond thoroughly and comprehensively to the report that I have praised in the House. I believe that the White Paper covers each of the Select Committee's substantive recommendations. Of course, we shall debate these matters further ; if the Select Committee wishes to pursue them with me in its own way, it is fully entitled to do so and I shall co- operate.

The hon. Gentleman asked me for assurances about future prices. That is not a realistic question to put to a Minister, who cannot be expected to give hard and fast views on prices in a complex marketplace without any time constraints.

Mr. Michael Spicer (Worcestershire, South) : Opencast coal is cheap and sulphur-free ; there are large stocks of it and, when blended with deep -mined coal, it greatly improves the marketability of such coal. Will my right hon. Friend tell us a little more about why he believes that production of opencast coal will fall from 16 million tonnes a year to 12 million?

Mr. Heseltine : I have consulted British Coal about that. As I said in my statement, in evidence to the Select Committee, British Coal anticipated that the present output of 16 million tonnes would fall to 12 million ; it now believes that it will fall further. I appreciate the considerable advantages of opencast mining, particularly in derelict land reclamation. I also understand the arguments for fuel mix, which render opencast coal especially important in terms of both price and technical qualities. There is another side to the matter, however. My right hon. and learned Friend the Secretary of State for the Environment will this afternoon publish his planning guidance, which suggests that the environment and its protection must also be weighed in the balance. It is on that basis that judgments can be made in the future.

Mr. Eric Illsley (Barnsley, Central) : Is it not the case that 12 pits will close now, six will be mothballed--which means that they will never open again--and one, Maltby, will gain development status? Nineteen pits will be closed, while 12 will not be subsidised for two years, until the union members accept the redundancy terms that they will be encouraged to accept during that period.

The right hon. Gentleman talks of the market and the loss of the market. Has not the market been rigged against coal ever since privatisation? Gas- fired stations can bid into the pool at a negative price : in other words, they bid their electricity into the pool at nothing, knowing full well

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that they will then be brought on to the grid. They must compete with orimulsion--which can be piped in for next to nothing because it comes from Venezuela--and with opencast coal. Such coal is not from derelict sites ; 93 per cent. of it comes from green field sites that are left as green field sites afterwards. It is a rigged market, and the right hon. Gentleman knows it.

Mr. Heseltine : I know that the Select Committee raised some aspects of the hon. Gentleman's point, but, although the Committee asked me to examine the question of bidding into the pool, I felt that it was not convinced that a simple solution existed. Having considered the issues, I concluded that the Committee was right to have its doubts.

I wholly reject the suggestion that the market is rigged. As I said in my statement, even if British Coal secures no further contracts, it will still be a substantial company in world coal terms. That in itself is an opportunity. I also wholly reject Labour's defeatist view that when I accept the Select Committee's recommendations, I enable British Coal to negotiate for additional markets. The thrust of Labour's view is that there is no additional market, but I do not accept that.

Mr. Rod Richards (Clwyd, North-West) : Is my right hon. Friend aware that his statement will be widely welcomed in north Wales, especially by those who work in Point of Ayr colliery? Is he further aware that the section 36 consent that he has given to the Connah's Quay power station heralds a new economic era for north-east Wales, generating thousands of jobs and many hundreds of millions of pounds in investment?

Mr. Heseltine : My hon. Friend is absolutely right. The Connah's Quay announcement is a good one. Along with my right hon. Friend the Secretary of State for Wales, my hon. Friend will know better than most that we went through a similar difficult readjustment in the context of Shotton. Without doubt, the Shotton area has experienced a transformation as a result of investment and diversification. We must always look at how we can help declining industries to reach a position where new jobs, investment and companies and a better future are on offer.

My hon. Friend is absolutely right to point to Connah's Quay. Not only will it help jobs in north Wales, which is extremely welcome ; it will be a signal to one of Britain's most successful industries.

Mr. Geoffrey Hoon (Ashfield) : The right hon. Gentleman seems to be keen on quotations. May I draw his attention to page 68 of the White Paper, which states :

"The United Kingdom undoubtedly has the lowest cost coal in the Community."

How will the Secretary of State explain to the miners of Silverhill--whom he appears today to have finally condemned to lose their jobs--that the German, French and Spanish industries will continue to produce 100 million tonnes of coal? Why are those countries' Governments so successful at subsidising their industries, while our Government sell our miners so short?

Mr. Heseltine : I am afraid that the hon. Gentleman is misinformed about what is happening to the coal industry in Europe. I, too, have looked at the figures and perhaps on Monday we shall have a chance to debate these matters. By and large, the coal industry is in decline across Europe and in Community countries such as ours.

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Mr. James Pawsey (Rugby and Kenilworth) : Can my right hon. Friend elaborate on the part of his statement that referred to privatisation ? Can he say what interest the private sector has displayed in acquiring the pits that it is proposed to mothball ? How many pits will be involved and how many jobs ?

Mr. Heseltine : It is encouraging that we have received a number of inquiries, but it is fair to add that, at the stage that we have reached, such inquiries are bound to be tentative. My hon. Friend the Minister of State, in partnership with British Coal, hopes tomorrow to see a number of people who have approached us in the context of privatisation.

I very much hope that, as the position has now been clarified, we shall be able to see how far the interest that has been expressed can be extended. As I told the House, I have announced £1 million of Government support for those who want to prepare management buy-outs. As I have said before, I do not wish miners to buy into pits that have no significant future, as an emotional reaction to admittedly traumatic circumstances. I shall do my best to warn them of the difficulties ; I think that that is only fair.

Mr. Michael Clapham (Barnsley, West and Penistone) : Today's statement shows that the President of the Board of Trade has not been listening and has not been reading. He talks of the subsidy. The Select Committee suggested that the subsidy paid to British Coal as price support should be paid within the context of the franchise market, but there has been no mention of the franchise market. Has the right hon. Gentleman explored the possibility of extending that market ? Has he examined the other recommendations to which my hon. Friend the Member for Sheffield, Central (Mr. Caborn) referred ? Has he looked at the conclusion of the Select Committee report, which states that there is a substantial market in excess of that which the Select Committee recommended for price support ?

The Committee's recommendations add up to a market of 62 million tonnes, enough to keep all 50 collieries working. It should be borne in mind that seven of those collieries will be exhausted in the next five years. Will the right hon. Gentleman confirm that his recommendations, and today's statement, have more to do with preparing the industry for privatisation than with developing an energy policy ?

Mr. Heseltine : Preparing the industry for privatisation is a very important part of an energy policy. I believe that, with hindsight, that will prove to have been the case with coal, as it has proved in so many other privatised industries that have been able to develop potential in the private sector that they were denied in the public sector.

I have considered the protection of the franchise, but I decided that it would not increase the size of the available market. I have said that the subsidy that we are prepared to make available is not dependent on extending the market. It is an offer that British Coal and the private sector--if it can find additional markets--are now able to exploit.

Mr. Barry Porter (Wirral, South) : I am the one member of the Select Committee who did not vote for its report, on the basis that I thought that the extension of the market was on the optimistic side. I am grateful, however, to my right hon. Friend for dealing in detail with the

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Committee's recommendations. His response has been extremely realistic and sensible. I wish to thank him especially for the decision that has been made in respect of Connah's Quay and gas. We must accept that there will be severe social difficulties in the mining communities. Will my right hon. Friend examine again, in the context of the entirety of the White Paper, what redundancy payments can be made to miners? Bearing in mind that it must be accepted that jobs will go, let us make the terms of redundancy as sensible and remunerative as possible, as we did for the dockers in days gone by.

Mr. Heseltine : I am grateful to my hon. Friend. I hear what he says about not having voted for the central recommendation contained in the Select Committee's report. As I have done my best to praise that recommendation, I hope that he will not hold that against me when it comes to any decisions that the House might have to make. The redundancy scheme that I announced last year is a generous one. It is almost without parallel anywhere else in the public or private sectors. It would be to let down the members of the coal industry who have accepted it over the past few months if I were now to increase the payments. The Government have no plans to increase the level of the already extremely generous redundancy scheme.

Mr. Mark Fisher (Stoke-on-Trent, Central) : As the President of the Board of Trade has not mentioned the 10 pits that are to be closed, will he undertake to return to the House to make a further statement, or are they condemned to closure in silence? Does not he understand that the deep anger that people expressed following his closure statement in October 1992 will be refired and redoubled by his statement today? Last October, the British people expected the right hon. Gentleman to work for a proper, unrigged market for coal and an energy policy that made use of all our assets. What they have instead is a political stitch-up that will destroy industry and create only unemployment. Does the right hon. Gentleman realise that the British people will not forget the smirk that played over his face when he answered questions following a statement which condemned hundreds of thousands to unemployment in the years ahead? He smirks and they will suffer.

Mr. Heseltine : When the hon. Gentleman and his colleagues can get elected to speak for the people of Britain, I shall listen to what they say on behalf of the people of Britain. I reject the sneering and contemptible way in which he has dismissed one of the best offers that I have been able to make to the coal industry.

Mr. Patrick Nicholls (Teignbridge) : Is my right hon. Friend aware that what he has said this afternoon will substantially reassure the many hundreds of people who contacted me in my constituency last year? Does he agree that there is a conclusion that they could draw from his statement and the evidence to which he has referred? That conclusion is that the economic analysis that my right hon. Friend made last year was right then and is right now. He has enabled those within the industry to face the consequences of that analysis.

Mr. Heseltine : Certainly, my hon. Friend is right. The decision that I announced in October 1992 was an extremely harsh one, and I felt anguish at having to make

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it, but economically the arguments were clear. Public opinion took the view that it did. As a member of a democratic political forum, I would be the first to recognise the strength of public opinion in such circumstances. We have come forward, therefore, with a set of proposals that have the virtue of maintaining a realistic background but giving a new opportunity, at least in part, to significant parts of the industry. It is possible to do that only at a cost of hundreds of millions of pounds to the taxpayer. That means that other people in other industries will have to pay the bills that are necessary to make my announcement possible today.

Mr. George Stevenson (Stoke-on-Trent, South) : Does the right hon. Gentleman understand that as a result of today's announcement, which must be described as one of the greatest examples of industrial butchery that the country has ever seen, he will qualify his nickname of Tarzan to become the political equivalent of Hannibal Lecter? He never mentioned the unemployment that will be created when the measures contained in the statement are implemented. Similarly, he did not refer to the fact that he has been presented with effective arguments on behalf of the 10 collieries that are earmarked for immediate closure. Those omissions will be seen as nothing short of a national disgrace and a betrayal of his commitment to intervene in the market.

Mr. Heseltine : The hon. Gentleman has heard me say many times that I cannot comment on the 10 pits that are subject to the consultative processes. British Coal must undertake those processes and reach conclusions on the basis of them. I cannot interfere in that.

Mr. Jacques Arnold (Gravesham) : May I welcome the emphasis that my right hon. Friend put on measures to help large electricity users? Is it not the position that excessive electricity costs in heavy industry, such as the Blue Circle cement works, Scotts and other plants in my constituency, put thousands of jobs at risk? We have heard nothing from Opposition Members about jobs outside the coal mining industry.

Mr. Heseltine : My hon. Friend, as I would expect, seeks to preserve the proper balance. A huge number of customers and a great deal of British competitiveness are at stake as a result of the issues that we are discussing. There is an important opportunity to enter into discussions--I cannot predict the outcome of them--with the large users.

Mr. Derek Enright (Hemsworth) : Did not the President of the Board of Trade have the opportunity to put in place a long-term strategy for energy? Instead, he has produced a mish-mash of contradictory tactics. I ask him a specific question concerning the 10 pits that are destined for closure. Bearing in mind the fact that the right hon. Gentleman has had much to say about the consultation process, will he condemn British Coal for announcing in its press release, on the day that it announced that it would undertake consultation procedures, that it would close all 10 pits? Will he defend the 10 pits from closure, or will he hand them over to his right hon. Friend Herr Himmler, the Secretary of State for Social Security?

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Madam Speaker : Order. I am sure that the hon. Member will do the honourable thing and withdraw.

Mr. Enright : I shall certainly withdraw, Madam Speaker.

Mr. Heseltine : The hon. Gentleman may feel that his observations are not in keeping with the reality. He must be fully aware that I cannot and will not become involved in the slagging match that he requests over the management of British Coal.

Mr. Spencer Batiste (Elmet) : In his welcome and balanced statement my right hon. Friend spoke of the continuing negotiations between the generators and the coal industry and of the privatisation process. In that context, will he be encouraging those who will be seeking to put pits and coal-fired power stations together so that coal can have more direct access to the energy market?

Mr. Heseltine : My hon. Friend understands one of the potentials. It is not easy to see precisely how to bring about what he says, but it is something that is on the table for discussion. Many complex arguments are involved and I have had discussions which have focused on them. There are no announcements that I can make today.

Mr. John Cummings (Easington) : Is the President of the Board of Trade aware that the consequences of the closure of the Vane Tempest colliery and the mothballing of Easington are not confined to the many tens of millions of tonnes of coal lying under the North sea, which will never be extracted by means of an opencast operation? In Easington, with a population of 20,000, 1,693 unemployed people are chasing 12 vacancies. It is clear that unemployment will rise to over 20 per cent. Does not he believe that there are markets around the Thames and in Europe and that we can provide the necessary resources--for the benefit of the people of Easington and of Europe? Has the right hon. Gentleman applied himself to the question of the pumping arrangements that are absolutely necessary in the county of Durham to prevent an ecological time bomb from going off? Will he join me in applauding the magnificent efforts of the miners since October last year? They have broken all productivity records--a fact that the right hon. Gentleman failed to mention.

Mr. Heseltine : The hon. Gentleman will know that more than 51 per cent. of the miners in Vane Tempest have already gone. I believe that some of them have already secured alternative employment. The hon. Gentleman has raised an important subject which I happen to regard as one of the most tragic aspects of this whole affair. In February, the shortest month, British Coal mined at an annual rate of 60 million tonnes, with 10 pits not coaling and with 9,000 fewer workers. Had that escalation of productivity been going on earlier, British Coal would have been incomparably more competitive. The longer the Labour party denies this, the longer they deny the spirit and determination of the miners, who have to go and negotiate the supplementary contracts that I am talking about.

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