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Column 65devaluation tends to be in their favour, production in the United States of America may fall in comparison with British production. Obviously, it is no good producing coal that cannot be sold, and if it cannot be sold, it simply accumulates. When I visited Drax recently, I found a huge accumulation of coal stocks. Coal stocks now are as much as 45 million tonnes, which is twice the national requirement. I dare say that Opposition Members would recommend that coal stocks be even higher, but do they realise the cost of accumulating coal, and that, once exposed, the coal will begin to deteriorate? It does not make sense. The English public are beginning to recognise that an industry into which we have poured £17 billion of subsidies--we now intend to pour in more money--must limit its share of our national resources. Surely common sense must shortly prevail. I mention another matter which will be of concern to the Government. They have their own proposals for VAT, but I do not feel very comfortable in saying that that is one way in which to deal with carbon dioxide emissions. We are now fixed in Europe and if a carbon tax should be extended to the United Kingdom, it will cause further anxiety, because it will make coal even less competitive, here and in all international markets. That would be a great pity, but it should be taken into account.
The public, who will be the jury in this particular case, will recognise that, of generating costs of new plant in the United Kingdom, Sizewell C will be the cheapest, followed by the gas plants--the CCGT--combined cycle gas turbine--plants, the AGRs and finally large coal-fired power stations. Coal will thus not be competitive with the other fuels.
The costs of existing plants show that Magnox stations are the most competitive. The nuclear AGR--advanced gas-cooled reactor--is extremely competitive, specially in comparison with large coal-fired power stations, particularly where they have FGD--flue gas
The public recognise that they must pay such costs through their electricity bills. Do they want to pay higher prices in order to keep people continuously in the mines when we have been told it might be advisable to reduce the numbers to bring a balance to the economy ? I simply say that we are not the jury ; it is the public who are.
If the industry becomes uncompetitive, it must be adjusted to the right size to meet the right requirements. I hope that the Opposition will recognise that what I have suggested is common sense. Many have a vested interest--of course they have--but surely common sense must prevail in the national interest.
Mr. Simon Hughes (Southwark and Bermondsey) : It is hardly a reasonable proposition for the hon. Member for Bedfordshire, North (Sir T. Skeet) to condemn the coal industry as he has when he does not recognise the enormous public assistance that the Government have given to the nuclear industry over the years. If we are to argue rationally in Parliament, let us at least start by
Column 66arguing for equal treatment between the different sectors of the energy industry and not retain the distortions, as we have done for so long.
The question before us today is whether we endorse the White Paper. For the benefit of those few Conservative members of the Select Committee who may not be finally decided--and perhaps some other Tory Back Benchers--I argue that they should withhold their support from the White Paper. They should refuse to endorse the White Paper because it does not provide answers to the questions which the country asked Parliament to deal with when the people said no to British Coal in October last year when it started to break the law by closing pits without going through proper pit closure procedures. At that time the Library of the House produced a research note entitled, "British Coal Pit Closures : A leap in the dark." Five months of consideration by the Government followed. The White Paper was originally meant to be published in January, then February, and we have now seen it only at the end of March. There may have been a leap in the dark in October, but, sadly, there has been a long walk in the dark since then. The Government do not appear to be any less benighted now than they were in October.
My colleagues and I have put our cards on the table. We submitted evidence to the Government's consultation process--unlike the Labour party--and, unlike Labour, we have produced an alternative White Paper. We have set out our stall in the amendment on the Order Paper today.
Mr. Eric Clarke (Midlothian) : On a point of order, Mr. Deputy Speaker. I have been to the Table Office and to the Library to get a copy of the answer to the written question of the hon. Member for Brentwood and Ongar (Mr. Pickles) about emphysema and bronchitis, but I have been unable to get one. I believe that that hon. Gentleman has shown the reply to one of my hon. Friends. All I can get is a press release from the Minister. I believe that Madam Speaker has made it quite clear that if a question is tabled it should be tabled on behalf of all of us. The press release was issued at 4.10 pm ; it is now 6.25 pm but I still cannot get a copy of the written answer despite the fact that I have a vested interest in emphysema and bronchitis, which is important to my old miners.
We have set out our stall, and the fundamental argument is that if we make decisions tonight, or any other night, about the future of the coal industry, they need to be made in the context of our energy industry as a whole. I would ask the House to say that we cannot do that tonight, because, as I suggested earlier to the President of the Board of Trade, we are being asked to make decisions about coal today when we will be asked to make decisions about the nuclear industry, renewables, opencast mining and orimulsion only later this year. It is a quite unreasonable proposition to argue now that we have to condemn, potentially, 18,000 people to lose their jobs when there could be, if we address this subject in a strategic context, an opportunity for a much more secure coal industry in the y
Column 67industry when, at the same time, we have been bailing out its direct competitors in the energy market. The Government and the President of the Board of Trade talked about creating an opportunity for coal--about time too. In the past decade the coal industry has had no such opportunity. The Government took on the job of privatising the electricity industry and gave a protected position to the generators--not real competition at all. They took on the job of privatising the gas industry, and it is only now apparently that the Director General of Ofgas realises, and is prepared to say so, that in the gas industry there is not any real competition at all. We also know that there has been no competition for the nuclear industry because it has been artificially protected all this time and the subsidy will not be removed until 1998.
Mr. Hughes : No, I will not. I have got only 10 minutes. The hon. Gentleman was on the Select Committee and his Government have had plenty of time to deal with this issue, but without any White Paper about energy being previously produced from when they came to power in 1979 until they were bounced into producing one by the events of last autumn. It is no good complaining, if they are now asked to help the coal industry, that they cannot do that and be consistent with their market principles. They have been intervening in the market in all the other sectors. Coal is now asking for its fair share of assistance.
The House was asked whether it would endorse, and what view it took of, the 39 recommendations of the Select Committee. I pay tribute to my party's representative, my hon. Friend the Member for Gordon (Mr. Bruce), and to all the work of the Select Committee. The Select Committee report is a compromise document--the House knows that--but it is far better to accept the compromise that united hon. Members across the House as a prospect for the coal industry than the White Paper, which gives no security in terms of contracts above the 40 million tonnes negotiated and signed today, and gives no security in terms of supply when it proposes the reduction of stocks to only 10 million tonnes in the future. What security does that offer the country in the eventuality that stocks from abroad cost more, or that we cannot obtain them, or that we have several hard winters? We cannot base a decision today on these unknowables. The Government make no specific proposals--at least, nothing different from what was on offer in October-- in terms of guarantees for the industry. I was at the TUC rally in my constituency this afternoon and I know that the country is still behind the miners and the coal industry, and has not changed its view since October. What the country, the coalfield communities and the House want is a long- term energy strategy that guarantees security of supply and diversity of supply. We cannot have either of those things without securing a long-term future for the coal industry.
It is sometimes argued that a large sector coal industry is incompatible with environmental objectives. That is not true. It would be possible to produce 60 million tonnes a year for the next five years and at the same time adequately meet the best emission targets to which we are internationally committed. I ask colleagues who have not looked carefully at the issue to see how we and others have
Column 68squared the circle--experts and party political figures alike--showing that it is possible to be both environmentally sound and sound in energy terms, as well as sane in employment and economic terms too.
We are not even debating 10 pits today. If we endorse the White Paper we are condemning them, even though the Boyds report said that two of them were viable and even though it is clearly arguable that Betws pit selling to the domestic market is also viable. We are asked only to debate the 21 pits ; and of them the chairman of British Coal and others have now made it clear that the so-called saved 12 of them may also close because they are fighting for the same market as the others whose future is apparently secured. The Government are merely asking us to give them time to get over the next few months, until they can get their privatisation legislation into the House. That is not good enough, because the evidence of the past 13 or 14 years is that the privatisation process itself will, certainly in the short term, make life more difficult for the industry.
Leaving things to a rigged market while giving no thought to the strategic objectives means condemning the coal industry to an extremely difficult and lesser future. Eighteen thousand jobs are at risk in the House's decision tonight. If we condemn the coal industry tonight we will spend, according to the Select Committee, about £2 billion trying to rehabilitate skilled workers who do not want enterprise zones tomorrow, because they want work today. I ask the House to judge the evidence of the Select Committee, to prefer that evidence to the White Paper, to reject the White Paper and then to enter into a proper debate on a strategic energy future for Britain that guarantees a place for coal.
Mr. Barry Porter (Wirral, South) : I sometimes wonder whether I live on the same planet as some of those who have spoken this afternoon. I will not preface my remarks by saying how brief I intend to be--I will just be brief. And I do not apologise for being a member of the Select Committee either.
I concede that when I embarked on this investigation I knew little about the energy industry in general and coal mining in particular, and I came out at the other end of the investigation possibly none the wiser but infinitely better informed. I am enthusiastic about voting for the White Paper, however, because it errs on the side of realism.
We must be realistic about this industry. I remind the Opposition that it is not the only industry to have suffered from reductions in numbers and orders. I come from a shipbuilding town, as does the hon. Member for Gordon (Mr. Bruce). On Saturday I will have to attend a meeting in the town which, a few years ago, employed 25,000 people in the industry. That number has fallen to 1,200 today. So I do not want to hear any lessons from Opposition Members about communities that face these problems.
The north-east has suffered in this way. The Government certainly have a responsibility in the affected areas--a responsibility to help the north- east and south Wales. One has only to look at the south Wales coalfield to see what should and what will be done. We have heard today that 18,000 jobs are in jeopardy--as if the people concerned were suddenly going to be
Column 69thrown on the scrap heap. That is just not true ; it is a static view of what has happened in this country in the past 25 or more years.
I do not understand why other members of the Select Committee are concerned about the White Paper's strategy. The central thrust of that strategy is that there should be a tapered subsidy to allow British Coal to do what it has said it wants to and can do--that is, to reduce the price of deep-mined coal, over time, to world prices. The Government have accepted that central strategy, and it will be put into action.
One of the reasons why I did not sign the Select Committee report was that one of my hon. Friends said that it was the duty of a Select Committee to be optimistic. I beg to differ. It is the duty of a Select Committee to be as realistic as possible. Hon. Members may be interested to hear how we arrived at the figure of 19 million more tonnes which we decided could be found by British Coal. The answer is : a bit of good, old-fashioned, political horse trading. At 10.30 pm Tory Members were sitting there saying one figure was realistic as an extra tonnage, and Labour Members were saying that they wanted more. We sat gazing at each other, and for the sake of a unanimous report--or at least, one against which no one would vote--we picked a figure in the middle, and then added, for good measure, 3 million non-electricity supply industry tonnes. There was not a slide rule in sight, nor a reference to the available evidence.
We shall see. I happen to believe, on the evidence available to the Committee, that the more likely figure for extra tonnage is in the region of 12 million tonnes--but I was willing to go a bit higher for the sake of unanimity. I could be wrong ; I hope that I am. The Government, however, are giving the industry and the work force the chance to find out whether the figures are feasible.
Everyone is talking as though the 12 pits being saved will disappear within the next few months. That is possible, certainly, but if British Coal is genuine when it says--I have no evidence to the contrary--that it can bring prices down to world levels in three or four years' time, well and good. But there can be no guarantee. How could we expect the President of the Board of Trade to give a guarantee? I would not believe it even if it were given.
Even at the levels proposed in October, this industry would be the fourth biggest coal industry in the world. Let us see it in proportion, therefore. Let us give British Coal the chance to see whether it can do what it says it can do, and then we can settle down to a more stable and prosperous future for the industry. Without this White Paper, 5,000 people on Deeside, in the Wirral, on Merseyside and in north Wales would not have the opportunity to work at Connah's Quay. And at least another 3,000 permanent jobs would not have been available to people in that part of the world without this White Paper. That is the compassionate way forward.
Mr. Denzil Davies (Llanelli) : We would not be here today debating these problems if the Government had not privatised the electricity supply and generating industry in the way that they did. I thought, when the privatisation proposals were first made, that there would be a third competitive force against the duopoly of National Power and PowerGen, using coal as a production fuel. Instead,
Column 70the third force inserted by Lord Wakeham was not a body able to build small, coal-fired power stations at the coal fields but one using natural gas.
I shall deal now with one of the pits in the list of 10 that will not be saved--Betws, which produces anthracite. The Boyds report said that Betws was not economically viable using the long wall method of mining. That poses an interesting question. When considering whether pits can be economically viable, one must take all sorts of factors into account. Betws is not economically viable given that, for 15 years, British Coal has mined one of the main veins--the red vein--by means of the long wall method. There is little coal left there now, but the purpose of the original investment was to amortise, over about 15 years, the cost of the equipment necessary for long wall mining. Now, the coal left in the seam, and underneath it as a result of some developments, cannot be mined economically using the long wall method. There would be no point in doing so.
Boyds--I make no criticism on that ground--was not asked to look at anything else such as the future, or different methods of mining. Even so, it concluded that Betws could be profitable. I went to see the Minister of State, Welsh Office and I thank him for the reference to Betws in the White Paper. It says that it has reserves which could be exploited and that profits could be made from developing Betws. I know that that is the case.
A second point of interest, to me and those from the anthracite coalfield area, is the debate, which has been going on for years, about the best way to mine anthracite. There are those who say that the long wall method with the huge equipment that is used by British Coal--it has done a good job and produced a lot of coal in the anthracite coalfield--is the best method. However, as Boyds makes clear, the equipment used in that process costs a great deal, whereas the coal produced, because of the way it is mined, contains at least 30 to 40 per cent. duff--the lowest-priced product on the market. Therefore, British Coal has invested huge sums in the production of anthracite, but the product has been the lowest priced on the market. Many would argue that that is not the sensible way to go about things. Instead, we should reduce the cost of production and produce the higher-priced product--the larger lumps of coal.
Whatever happens when we vote after the debate, whether or not the Government win, the anthracite coal of west Wales will be mined only by private owners. Even if it were to be done by Britsih Coal--it will not be- -it would be a privatised British Coal. Instead, other private companies such as Ryans will try to mine the anthracite.
I have three further points to make. First, it is no good Tory Members, especially the right hon. Member for Woking (Sir C. Onslow), saying that we are being reactionary and antediluvian when we talk about safety. The Government should recognise the history of all this--the tradition, the problems, the awful communal and family history of the failure by private owners to provide proper safety standards in the coal mines. The Government must set people's minds at rest and ensure that, when the industry is privatised, the high safety standards and working conditions which, whatever criticisms we have of British Coal, we must acknowledge it maintained, are continued. That is in everybody's interest, including those who may want to invest in the anthracite coalfield, because without that, people will not work for them and we shall not get the economic benefit of developing our resources.
Column 71My second point may be small, but it is still important. Apart from a few that are surreptitiously in private hands, all the plans and geological surveys lie somewhere in the vaults of British Coal. I do not know where they are--perhaps Nottingham or Derby--and why they should be there I do not know. The plans, which go back to pre- nationalisation days, should be returned to the state, to the Welsh Office, the Department of Trade and Industry or the Welsh Development Agency, so that any potential investor can obtain them and have all the available information when deciding whether to invest. There is no reason why British Coal should keep the plans. It has left the anthracite coalfield and has no more to give it. Thirdly, as the future of the anthracite coalfield is, I am sorry to say, going to lie with small, private firms, we should set up a marketing co-operative along the lines of the successful French farmers' co -operatives. We cannot look for a large investor in the anthracite coalfields, so we shall have small producers, who will need back-up and help. This may sound ridiculous, but, just as Welsh lamb has been, Welsh anthracite should be marketed as a prime product. It has not been one because much of it has been sold to power stations as duff. I do not know how that will be
achieved--perhaps through Government help, although we may not need it--but a co-operative should be set up to enable the producers to produce a quality product and ensure all the safety standards and conditions that go with it.
I am not romantic about the anthracite coalfield of west Wales, but it can make a contribution to an area which finds it difficult to attract investment because it is on the periphery of both the M4 and Europe. Furthermore, it is an indigenous fuel. A partnership between the smaller producers and the Government will be the best way forward for my community and my constituency.
Mr. Phillip Oppenheim (Amber Valley) : I have some sympathy with the amendment, partly because of the long history of pit closures in my constituency and partly because of the pretty appalling way in which the original announcement was made. Giving people a few days to redundancy is no way to treat them, especially bearing in mind the massive productivity gains in the coal industry in recent years. I also have some sympathy with the argument that nuclear power is unfairly subsidised--a point to which I shall return--and with the opposition to the French link. That is especially so given that a report in 1990 by the general administrator of the Commissariat a l'Energie Atomique criticised Electricite de France for building too much generating capacity and pointed out that exports are being priced at a loss.
The mining industry has, rightly, a unique place in society. There is great respect for the skill that miners show in winning coal, often in difficult conditions, and for the huge productivity gains of recent years. The industry has a heroic quality that is rightly admired by many people. But that admiration should not be debased into sentimentality.
Britain generates more electricity from coal--70 per cent.--than all our other major competitors. France generates only 8 per cent. from coal, Germany only 53 per
Column 72cent. and even the United States--the land of cheap coal--generates only 55 per cent. We pay more for our coal than almost any other nation in the world. The cost per tonne is £43 in Britain whereas the import price is £33 and the OECD average is £26. The French pay £26 per tonne and the Italians £33. Prices in Australia and the United States are as low as £15 and £18 respectively.
Much has been said about British Coal being the lowest-cost--
It has been said that British Coal is the lowest-cost producer in Europe and much comparison has been made with Germany. If the Germans follow a mistaken policy, why should we follow suit? The costs to Germany are huge. The usually quoted cost of £1 billion must be more than quadrupled to £4.5 billion when the coal penny is taken into account. That is the subsidy that is paid to the industry by users of large amounts of coal.
Nor is there a cosy consensus in Germany. Indeed, there is a great deal of controversy. This was evidenced by the bankruptcy of a major steel company- -Klockner--late in 1992, which was the result of high coal prices. Recently, the Germans announced 20,000 mining redundancies and over the next decade the bulk of the coal industry in what was West Germany will close.
The French, the Belgians, the Dutch and the Italians have already largely closed their coal industries. They have recognised what many in the United Kingdom have not : that in many instances the thickest and easiest seams were worked out in Europe long ago. Geology is too often against us despite our skills in winning coal in difficult conditions. In the United States and Australia, there is access to huge amounts of easy-to-get opencast coal in areas that are not especially environmentally sensitive. When it comes to deep mining, their seams are often a great deal thicker than those in Europe. Why turn what has been an asset to the United Kingdom in the past into a millstone round the rest of industry when cheaper coal is available in world markets? It would be sheer protectionism not to buy cheaper coal. To put it simply, the Government would be putting the interests of one group of workers above those of others by taking that course.
There have been many calls this evening for an energy strategy to be directed by Government. For most of the period following the war we had a state-directed energy strategy. It had two planks, the first of which was nuclear power. In 1965, advanced gas-cooled reactor technology was ordered because the Government wanted it, despite the fact that pressurised water reactors were less complex, proven and cheaper. That was part of a national energy and industrial strategy to build up an advanced British nuclear power generating capacity. By the early 1970s, all the five AGR stations were in deep trouble. In 1974, the Central Electricity Generating Board chairman, Arthur Hawkins, called it
"a catastrophe which we cannot repeat".
He urged that we should go with American-designed PWRs. The same year, however, because of Government intervention, we went ahead with another British design,
Column 73the steam-generating heavy water reactor. Three years later the project was abandoned on cost and safety grounds and two more AGRs were ordered.
The result of Government intervention and the state-directed energy policy was that after 40 years of massive waste of resources and money we had some of the most expensive nuclear generating capacity in the western world. The cost of it was not even known until the electricity generating industry was privatised.
The other plank of the energy strategy was coal. That was characterised in the decades after the war by cosy guaranteed contracts between the generators and the National Coal Board. No imports of coal were allowed. Similarly, no gas-fired generation was allowed. That puts into perspective the claims that are made now by members of the coal lobby that the market is rigged against coal. The result of the policy was that industrial consumers paid far too much for electricity. That was illustrated by the report of the Monopolies and Mergers Commission in 1981 on the CEGB. There was a massive and additional ongoing subsidy from the taxpayer to the industry. The system did not help miners, who found themselves working in a high-cost, low-productivity industry. They were relatively low paid until recently.
Even so, the industry still lost jobs. In Amber Valley, 10,000 mining jobs were lost in the 1960s and 1970s under Labour Governments. The redundancy payments amounted to no more than a pittance. Meanwhile, every job that was preserved in the mines was at the cost of jobs elsewhere in industry. We were left over-dependent on expensive coal while other countries benefited from diversity and cheap imports. So much for a state-directed energy strategy. A much-used argument is the one that turns on the need for energy security. We are told that imports are unreliable. It should be rememberd that the bulk of our coal imports come from the United States and Australia, which are hardly unreliable countries. So-called cheap foreign coal from Russia, Poland and the third world is often sneered at by Opposition Members because they say that those countries are unstable. Clearly, those countries will become more unstable if richer countries, such as the United Kingdom, do not allow them to export what they can best produce. No one suggests that we should rely on Russian coal, but it is extraordinary for those who call themselves socialists to refuse to buy coal from poorer countries. That attitude does not sound much like the brotherhood of man to me.
In any event, to refuse to import energy and to deplete domestic supplies, as is proposed by Opposition Members, would lead to less security, not more. If we cut ourselves off from the huge international energy market, which is competitive and diverse, we shall ultimately penalise our industry and our consumers. Those who have argued that some pits must close and that customers must decide which sources of energy they wish to buy have often been told, "You are hard-hearted and you don't care." Surely there is nothing soft-hearted in taking easy, short-term options which mean keeping one group in jobs at the expense of others elsewhere. That is an example of short-termism which state-directed energy policies were supposed to avoid. There is nothing soft-hearted in the attitude of a party that led to the closure of a pit every week in the 1960s and 1970s. The same party was responsible for the worst mistakes in nuclear policy during the same period. It has argued
Column 74against the imposition of value added tax on fuel, but has happily sanctioned higher fuel prices for the less well-off if that is the price to pay for protecting the coal industry.
The Labour party's spokesman, the hon. Member for Livingston (Mr. Cook), had the cheek to say on television yesterday that British Coal was a success story. Yet his party opposed the pit closures in the 1980s, which at least pulled British Coal back from the brink. That is not caring, nor is it big-hearted. Rather, it is the worst type of fraudulent opportunism and should be recognised for what it is. 6.56 pm
Mr. Lawrence Cunliffe (Leigh) : The debate is reflecting already views and attitudes that perhaps are to be expected. Some of the members of the Select Committee on Energy, who took up primary time, seem to be divided. They seem to wish to move away from the report to which they agreed.
It was to be expected that Conservative Members would seek to use the phoney formula that the President of the Board of Trade has presented to bring about the death knell or demise of the mining industry as we know it. We on the Opposition Benches seek to protect and preserve what we consider to be a priceless national asset--coal. It will give us hundreds of years of energy security if used wisely, and inexpensively, to produce the type of energy that we need to make available for industry and business generally.
Mr. Cunliffe : I do not want to read the report. I am the self- assigned chairman of the organisation that seeks the abolition of all Select Committees. They are a waste of time and money. I have no problems or scruples about that.
Opposition Members, along with the mining unions, the industry generally and industrialists, have always argued for a fair and honest playing field, which would enable proper plans to be made for a fuel policy that would bring rewards for all industries. The Government have never had an energy policy. On Thursday, the Secretary of State went back 20 years in talking about plans for coal, but I remember what was happening in those days, when I was a young mining apprentice and fitter. I remember the great Schumacher reports, and the days of large subsidies for the coal and steel industries. I remember the days of Mr. Spaak, and others of that character. In those days, there was at least a recognition that the British mining industry had a part to play : it had come up with the goods during the second world war, and--inevitably, at a total loss--had supplied the British steel industry to the tune of £2 a ton. That is an instance of the miners' patriotism ; we need no lessons about their contribution from Conservative Members.
Why do the Government hate intervention? The Secretary of State wears many different hats nowadays : we never know what his view is. At one point, he was the arch-protector of market forces ; now he is masquerading as the patron saint of intervention. I have met the right hon. Gentleman on five occasions, three times with the
Column 75miners' parliamentary group and twice with the all-party "10 pits" group. On all those occasions, he said, "I am not doing this ; it is British Coal. I cannot intervene : my hands are tied." He says that he has pleaded on bended knees with all the regulators and power generating boards, and that he has done his very best, but no one believes him.
The House does not believe what the right hon. Gentleman has said today about this phoney formula. Some members of the Conservative coal group do not believe him ; obviously, the mining unions do not believe him. Has he any credibility left? The formula is not just a quick fix ; indeed, it is not a fix at all. It will not fix the right hon. Gentleman's Conservative colleagues who will not vote for the White Paper. All that it will fix is the demise of the British mining industry. As the arch-privatiser, the right hon. Gentleman intends to use the bits and pieces that are left of the industry to maximise not productivity, but profits. That is what privatisation is about. Time and again, I have pointed out to the right hon. Gentleman that £1,270 million a year goes into the nuclear levy to protect the aging Magnox stations. They are 30 years old, and potentially unsafe ; nevertheless, they are eating into subsidies that were never meant to be used for such a purpose. As is clear from the international coal report, the right hon. Gentleman is responsible for ensuring that the fossil fuel levy is spent wisely, prudently and fairly, according to the rules. The report
"blows apart one of the great misconceptions about this levy on fossil fuel which is that it is used to fund the decommissioning of nuclear stations".
Only the Secretary of State believes that misconception. The report makes it clear that, of the £2.46 billion invested in 1990-91, only £20 million was spent on decommissioning.
Where has the rest of the money gone? It has gone to privatised nuclear electric companies, which have used it as liquidity. It has been invested in the building of the Sizewell B power station ; it has been used in all the ways in which it was never intended to be used. That returns us to the question of fairness and accountability : state money is being poured into an industry that is being deliberately propped up.
The cash flow will cease. I hope that the next report does not take five months to produce. Everyone will want to know why the miners voted to strike, but the answer is simple : they were told that the report would be forthcoming in a short time. First, we were told that the Secretary of State would issue it in January ; then it was February ; then it was March. Their impatience is understandable, and it has been manifested democratically in a ballot.
Let us examine anothecoal Minister, the present Secretary of State for Wales answered an Adjournment debate in which I spoke. As he will recall, the largest opencast mining planning application in western Europe amounted to 4 million tonnes, 15 years' development and five years' reclamation ; 15,000 properties were affected by noise, dust, intrusion, transport costs and other environmental problems. It is a disgrace that an area should be blighted for nearly 20 years.
Column 76My hon. Friend the Member for St. Helens, North (Mr. Evans) will deal with the Parkside issue. I am not hinting, as I know that the list of speakers will already have been compiled, but I think that it is an important issue.
I believe that this phoney formula is simply an excuse to get the Secretary of State off the hook that he has deliberately created. It is an attempt to pretend that opportunities can be opened up, presenting British Coal with a future. That is not what British Coal believes ; this weekend, it made it clear that it considered this a short-term fix. The Secretary of State is in a crisis. Politicians can see through his position, as they have done before. The right hon. Gentleman is blowing the bugles of advance to cover his retreat. He has failed the nation and the mining fraternity by his inability to use the necessary hindsight and insight, and to restore the dignity of the British miners, their families and their industry. 7.6 pm
Mrs. Elizabeth Peacock (Batley and Spen) : During the debate on the closure of coal mines, it has become obvious to me that, somewhere along the line, a decision was made that would completely redirect Britain's energy policy. We have heard a lot about the past, but I am not sure that we have put a date on that decision. It may have stemmed from the disastrous and crazy coal strike of 1984-85, but the privatisation of electricity that took place in 1990 has now redirected Britain's energy policy away from coal.
The White Paper published last week--and, I suggest, my right hon. Friend's insensitive announcement that he had that day given the go-ahead for three more gas-fired power stations--confirms that redirection. Britain's energy supply has been totally distorted by the way in which we privatised the electricity industry and by the incompetence of the industry regulator. By allowing two main power generators to control the market, we left the door open for regional electricity companies to look for alternatives--hence the so-called dash for gas.
The regulator has failed Britain. He should have demanded a break-up of the power generation duopoly and its control of the market ; he should also have recognised that, although nuclear electricity may have the lowest marginal cost, it has the highest true cost. Unforgiveably, the regulator and the Government have failed to notice that we do not just have a dash for gas on our hands. I believe that the gas has already escaped and almost blown away coal altogether.
Unless we take immediate, positive action, we will not need the coal industry at all after 2005. That was confirmed by the list of gas-fired power station capacity given in last week's White Paper, to which we have now added three more stations. Perhaps I could digress for a few moments and ask who in his right mind would allow the development of a power station in the beautiful Vale of Pickering when we could continue coaling in areas such as south Yorkshire and Nottinghamshire, where industry and coal mining have always lived side by side. They have existed together for a long time in those areas.
I am one of those hon. Members who, as a small child many years ago--I shall not say how many--saw coal coming along the canal in barges to the mills. That was the foundation of our industrial heritage. Without that supply of coal, we should not have had our industrial revolution.
The premise of the White Paper is that we have lost the battle for coal and that we should organise an orderly
Column 77retreat and a dignified and respectable burial, albeit with massive subsidies on offer. I congratulate my right hon. Friend and the Minister for Energy on having made some progress in the last few months. Some of my colleagues think it outrageous that these massive subsidies should be on offer, as they have not been offered to other industries. I suspect, however, that many of those subsidies will never be used. Many parts of the coal industry do not need a subsidy. Very cheap coal is being produced. All that the coal industry needs is a fair crack at an equal opportunities market. We hear a great deal nowadays about equal opportunities, although they are not usually directed towards the coal industry.
What we have heard today of who did what, and when, in the past does not matter to me, if we are serious about the future. That is what we are here to talk about. The only way to organise an orderly retreat, if British Coal cannot and does not want to run some of these pits, it to privatise them quickly and efficiently, but--and this is a big "but"--with a very careful eye on health and safety. That is most important.
The industry will have to be split up into competing companies. I do not want British Coal under just another name ; that would not do. Privatisation would get rid of regional offices, Hobart house, excessive administration costs and, I hope, the chairman as well. As the Ernst and Young report said, that would immediately wipe over £50 million off the cost of the coal industry, which in itself would considerably reduce the cost of coal.
The miners have already shown that they could improve their productivity. They can improve it still further. As has happened in many of our other industries, many of the miners listened to what was said and fulfilled their commitments. Productivity can be further increased by changes in working practices and technology. Pithead coal can be cheap and, as I have already said, in some cases it is already cheap. The decentralisation of marketing and administration will ensure that even cheaper coal is delivered to the user. We should ensure that any pits that are closed can be licensed for private operation. It will create true competition and, I hope, will help to fill the niche markets for coal. That might prevent a crazy situation. The closure of Grimethorpe colliery might lead to the Monckton Coke and Chemical Company in Royston, some five miles from Grimethorpe, having to import its coal from Poland. British Coal says that it cannot supply coal, other than from Grimethorpe, so would this company please import coal from Poland. That is outrageous. By the time the Polish coal arrives, it will not be very much cheaper than something from down the road.
Any industrial reorganisation takes time and costs money. Time must be provided for that to happen before closures take place. The White Paper provides money, in the form of a subsidy, but I have already said that I do not believe that much of that money will be used for this purpose. There must be some changes in working practices. Many of our textile mills and engineering industries have experienced changes. They have had to change in order to compete in the world market. I do not suggest for one moment that we should not expect the coal industry to do the same.
We are always complaining about the fact that a level playing field does not exist in Europe for our manufactured goods, but in this country we have a very uneven playing field. I am sure that we should like to do
Column 78something about that. The Caminus report suggested that more coal will be used in 1997 and 1998. That is marvellous. We welcome it. If, however, we are talking about some pits closing by the end of this year, there will be a gap before there is a demand for that coal. British coal will not then be available and we shall probably have to import even more coal.
The dash for gas has not slowed down ; it has accelerated. Steps should be taken to prevent the future development of excess gas-fired capacity. I would never suggest that we should save jobs in one British industry at the expense of another. I have suggested all along that we should help to preserve British jobs and our own energy requirements. I am not too concerned about jobs in Europe. I am quite sure that Europe is not concerned about jobs in my part of Yorkshire.
As for the French interconnector, it should be two-way. It is absolutely nonsensical to have this one-way track. I welcome the fact that moves are to be made to try to make it two-way. As the new French Government may be protectionist, we shall have to insist upon it being two-way. Alternatively, perhaps we should hold up the Maastricht treaty until we get some sense out of the French. If we cannot obtain agreement on basic issues, I am not so sure that there will be agreement on more important issues.
I realise that I cannot possibly say all that I wanted to say in the time allowed to me. When I came to this House, almost 10 years ago, I was a committed Conservative. I remain a committed Conservative. However, I have always had an overriding problem. I see my right hon. and hon. Friends on the Treasury Bench nodding and saying, yes, they know that. I am an independent-minded Yorkshire woman. My constituents expect me to be an independent-minded Yorkshire woman ; they would be very disappointed if I were not. That inevitably guides my star and my decision-making. Consequently, I cannot support the motion on the Order Paper.
I am willing to be converted on the road to Damascus, even up to the last minute when the Minister winds up, but the small print--I spent most of yesterday going through it--does not lead me to believe that it addresses the problem of equality in the market. I accept that some conditions may not be easy to change, but when we had our debate last October I hoped that we could look forward to some help. I welcome what has been done, but I am not sure that there is enough political will to move far enough along the way.
We need a future market for coal. All our other industries--textiles, engineering and so on--have had to change and the coal industry is no exception. To go on strike does not help the industry. To do so would push to one side all our arguments about the industry being reliable in the future. Strike action, therefore, would not help to secure the industry's future.