House of Commons Hansard Debates for 5 Jul 1993

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My second observation is addressed more to the Government than to the generators. In the three months since we last debated the issue, Lord Ridley has passed on, but I debated against him often enough to know that he would not want his role to go without recognition just because he is not here to listen. It was Lord Ridley, after all, who--15 years ago--wrote the strategy that the Government have followed so faithfully. He composed a paper before the Government came to power, explaining how a Conservative Government could run down the coal industry and weaken its power. I looked at it again this morning, and noted that its first recommendation was for the Conservative Government to

"build up maximum coal stocks, particularly at the power stations".

That is why, throughout the Government's term of office, we have had large coal stocks. The aim was to prevent miners from stopping work ; now there is a danger that those same stocks will be used to put them out of work for good. That is why the Select Committee recommended that the generators should be required to hold not less than 20 million tonnes of coal--double the level at which they are apparently aiming.

The White Paper, for once, did not ignore that recommendation. In paragraph 13.23, Ministers committed themselves to having talks with the generators about stocks

"as a matter of urgency".

May I ask the Secretary of State what happened to those stocks ? What is his definition of urgency ? Why are the generators behaving as though the White Paper had said nothing about the level of stocks ? When the generators have run down the stocks, there will be no point in turning around and asking Britain's coal mines to increase output ; by that time the mines will be closed. They will have been filled in and flooded--and not just the 12 that the White Paper claimed to have saved.

The House must now face up to the gravity of the crisis in the coal industry. Between them, the pits not included among the 12 are already producing more than 30 million tonnes. That is all that the generators will buy from next year onwards. On present markets, not only will all those 12 pits go by March ; so will some of the others that have yet to figure on any closure list. That will be a tragedy for the surrounding communities-- communities that were built because a pit was there ; communities that will have no work when the pit is gone. It will also be a tragedy for the nation, because with those pits will go our access to our coal reserves.

Silverdale has figured in the press as one of the pits that may be next for closure. The shaft and tunnels at Silverdale give access to 30 years' supply of coal. No one else in the world would be filling in shafts that give access to such an immense national resource. The other week, the Chancellor of the Exchequer shared with us his insight into the economics of the coal industry, observing : "Coal is a rather old-fashioned way of generatiing electricity." I concede that it is rather old-fashioned in the Chancellor's constituency, where his Government have just closed the last pit ; but if it is so old-fashioned, why have the last two dozen power stations ordered in the United States been coal-fired? Why does the United States expect coal consumption to rise by one fifth in the next decade? It should not be difficult for Conservative Members to obtain

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the United States coal figures : they need only ask that notable donor to the Tory party, Lord Hanson, who owns most of the pits. He may not take kindly to the news that the party into which he has poured so much money is describing his operations in America as old- fashioned.

Not only have we the largest coal reserves in Europe ; as Conservative Members want to talk about the cost of production, let me tell them that we have the most efficient coal mines in Europe. We are busy closing them down, while other Governments are working hard to keep open the least efficient pits in Europe. The case for saving Britain's pits is not based on nostalgia for the past ; the case for saving our coal industry is based on their success in the present.

Mr. Graham Riddick (Colne Valley) : What percentage of the coal that will be burnt in the new coal-fired power stations in America has come from opencast mines?

Mr. Cook : A number of mines in America are not as deep as ours, but they are not opencast mines by any stretch of the imagination. [Interruption.] Pearson and Hanson, which owns them, runs deep mines, but they are not as deep as ours. Pearson is a wholly owned subsidiary of Hanson. [Interruption.] I hear an hon. Member ask where else in Europe Governments are seeking to keep pits open. Germany is now providing its coal industry with three times the amount that our Government have contributed to the British industry. America has opencast and deep mines, as has Britain. It is for that very reason that the majority have been closed. If the hon. Member for Colne Valley wishes to make a case on behalf of opencast, he must consider the point that I have been making throughout my speech about the market for coal. If the current position continues, opencast as well as deep mining in Britain will be in trouble.

Mr. William Cash (Stafford) : The hon. Gentleman referred to Germany. Does he concede that, according to the most recent figures available to us, in 1991 the German coal industry received £9 billion- -pounds, not ecu--of authorised state aid through the European Commission? Does he accept that we should investigate the imbalance vis-a-vis the British coal industry?

Mr. Cook : I congratulate the hon. Gentleman on getting in a pro- coal and an anti-European point simultaneously. I agree with the thrust of his remarks, which is essentially correct. If we take the European perspective--although I suspect that the hon. Gentleman may not wish to do so--it is insane that in Europe we are closing down the most efficient pits, which produce the cheapest coal, while other Governments are providing substantial subsidies. The German Government, supported by the Common Market, are doing so to keep open pits that produce coal at three times the price at which it is produced in Britain.

Dr. Hampson : Will the hon. Gentleman give way?

Mr. Cook : I have already given way to the hon. Gentleman once. As I have said, the case for Britain's pits is not based on a nostalgic affection for the past ; the case for saving our coal industry is based on their present success. Ironically, only last week British Coal issued a press release showing

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that productivity had risen by a quarter in the past year, and that, in the past eight years output per man had arisen by 300 per cent. If any other industry had shown such spectacular advances, Ministers would have showered it with Queen's awards ; they would be queuing for photo-opportunities with the success story. The Prime Minister would be memorising statistics in front of a mirror, in order to reel them off at Question Time. Instead, because it is the coal industry, this industry is treated with vindictive vandalism by Ministers who are determined to prove that they were right all along when they told us that 31 pits would have to close.

The White Paper was not about how to keep miners' jobs ; it was about how to keep their own jobs while ending the miners' jobs. The White Paper was always a fraud and, since the two closures, it can be seen to be a fraud. It must be seen to be a fraud even by the Conservative Back Benchers who were taken in by it last March. I forgive them for being taken in at the time ; I am prepared to accept that they voted in good faith, thinking that they would save 12 pits, but they now know that they did not. We shall not forgive them--and the miners will not forgive them--if they let themselves be taken in again.

I give Conservative Members this warning : if the Government get away with it tonight, more of the 12 pits will close before the House returns from the summer recess. If Conservative Members want to save those pits, they must do it tonight. They will not get a £10,000 bonus if they vote with us tonight--that is a cynical ploy used by the Government--but they will stop more pit closures, halt the destruction of more coalfield communities and prevent the loss of more coal reserves. That is what we shall vote for tonight ; it is what the nation wants the House to vote for tonight, and it is what Conservative Members should join us in voting for.

5 pm

The Secretary of State for Employment (Mr. David Hunt) : I beg to move, to leave out from House' to the end of the Question and to add instead thereof :

welcomes the Government's acceptance of the principal recommendations of the Report by the Trade and Industry Committee "British Energy Policy and the Market for Coal" (HC 237), and in particular the offer of a transitional subsidy for additional sales of United Kingdom underground coal for electricity generation, the wide ranging package of measures to assist the regeneration of coal field areas, the commitment by British Coal that they will offer to the private sector pits which they do not themselves wish to keep in production, and the Government's intention to bring forward as rapidly as possible the legislation necessary to privatise British Coal.'.

The amendment stands in the name of several of my right hon. Friends, including the President of the Board of Trade. I am sure that I speak for all hon. Members when I say how pleased we are that he has been able to return home and that we wish him a speedy recovery to full health.

I have participated in many coal debates in the past 10 years, for several years as the Minister with responsibility for coal, then as Secretary of State for Wales and now as Secretary of State for Employment. I hope that the many hon. Members who have participated in the various debates will accept that there is no monopoly of concern for the coal industry from one party rather than another.

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If Labour Members reflect for a moment and read the reports of the many debates in Hansard, they will find that concern for the coal industry and its employees could be found in all parties. My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) scored a magnificent try against the hon. Member for Livingston (Mr. Cook) when he pointed out that, under a period of Labour Government, 277 pits had closed. The hon. Gentleman immediately leapt to a conclusion ; Hansard will show that he used statistics relating to the last period of the Labour Government, but he made a fatal error. My hon. Friend was, of course, referring to the period of Labour government between 1964 and 1970. During that period, 277 pits closed. In 1967, just about 60 pits closed.

Mr. Ronnie Campbell (Blyth Valley) rose --

Mr. Hunt : The hon.Gentleman may not like the facts, but I am going to give them to the House.

Under that period of Labour government, in one year, 60 pits closed and, in the following year, just under 60 pits closed, so just over 120 pits closed within two years. If my right hon. and hon. Friends refer to Hansard of that time, they will read the barrage of criticism from all parties against the then Labour Government because 185,000 coal industry employees lost their jobs in their local collieries.

Mr. Campbell rose --

Mr. Hunt : I shall give way in a moment.

As I said, 185,000 jobs were lost in the collieries, and there were no generous redundancy schemes then. The amount of money received by someone leaving the coal industry at that time was pretty mean, and Labour Members said so at the time. There was no enterprise company charged with bringing new life to coalfield communities,and there was no opportunity for employees leaving the coal industry to find another job or another chance. When the hon. Member for Livingston seeks to put on one side that period of Labour Government, he does himself and his party an injustice. The concern expressed at that time was expressed by all parties.

The hon. Member for Livingston is right to recall that there were substantial further pit closures in the 1970s under a Labour Government. I think that by 1979 the number had grown to 353. We have to ask why that happened.

Mr. Joseph Ashton (Bassetlaw) : Because they were all worn out.

Mr. Hunt : No, not because they were all worn out. Of course, that was true in some cases, but--

Mr. Ronnie Campbell rose --

Mr. Hunt : I shall not let a rather silly comment pass--I am going to deal with it. I ask you to note, Mr. Deputy Speaker, that the hon. Member for Blyth Valley (Mr. Campbell) is trying to change the subject quickly, but I shall not let the hon. Member for Bassetlaw (Mr. Ashton) get away with it. I shall give way, but I am going to deal with the point raised. [Interruption.] Labour Front-Bench Members should not get excited.

Mr. Ashton rose --

Mr. Hunt : I shall deal with the sedentary comment made by the hon. Member for Bassetlaw who can then

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respond. The pits were not closed because they were all worn out. He has only to read the statements made at the time by Labour Ministers : the pits were closed because there was no market for their coal. He has to ask himself why. It was because the domestic market contracted dramatically ; people stopped burning coal in their homes and started burning what the hon. Member for Livingston referred to as the sweet premium fuel called gas. He forgot to mention, however, that its calorific value is much higher than that of coal.

If the hon. Member for Bassetlaw reads Hansard , he will find statements made by Labour Ministers in which they said that, sadly, there was no market for the coal and it would therefore be wrong to keep the pits open, even though there were still a number of substantial recoverable reserves.

Mr. Ashton : I came to the House a year or two before the Minister. I arrived in 1968 in a by-election, during a pit closure in my constituency. Unemployment was running at 1 per cent. and miners who wanted to move to another pit were found jobs--they were not forced into redundancy. One of the reasons for the closure, which the Secretary of State has not mentioned, was the price of oil. It was at rock bottom until the war between the Arabs and the Israelis in 1973, which caused it to rocket. The price trebled around the world and, incidentally, it also caused inflation to treble, a problem for which he has always blamed the Labour Government. Every miner who wanted a job at another pit was moved. Thousands moved to my constituency where there are still three profitable pits. The Secretary of State offers only half-truths, like all solicitors and cheapjack lawyers who do not have a brief.

Mr. Hunt : The hon. Gentleman offers a lot of bluster but very few facts, as befits an occasional columnist for a newspaper--I shall not embarrass him by saying which newspaper. He should reflect on what he said. I will not embarrass Opposition Members by asking how many of them burn coal in their own homes-- [Interruption.] I suppose that the record will not show that there was a small smattering of individuals.

Mr. Kevin Barron (Rother Valley) : Will the Secretary of State give way ?

Mr. Hunt : I will give way in a moment.

The point that I was making stands. There was a savage contraction in the domestic market for coal.

Mr. Ronnie Campbell : I am not surprised that the Government want to close the 12 pits. A few years ago, the Secretary of State was the Minister responsible for coal and at that time I worked in Bates colliery. We went through the colliery review procedure, which was fairly new at the time, and Bates colliery won. The right hon. Gentleman was the Minister responsible for coal and that pit still shut. I was a miner at that pit and I know all about it. There were still 29 million tonnes of coal in that pit and it could still be working today.

Mr. Hunt : The hon. Gentleman will recall that British Coal spent some time considering the report of the independent--

Mr. Ronnie Campbell rose --

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Mr. Hunt : I hope that the hon. Gentleman will accept that British Coal spent some time considering the report and, in the end, it did not accept the view that the hon. Gentleman has just put forward. The hon. Member for Blyth Valley has just made a point that I made earlier. Pits closed when they still contained a substantial amount of coal because the market changed. I examined the case for Bates colliery very carefully at the time. I was convinced that British Coal had made the right decision. However, it was a matter for British Coal to determine.

Mr. Riddick : Will my right hon. Friend give way ?

Mr. Hunt : Yes, in justanges in the energy market.

Mr. Riddick : A few moments ago, my right hon. Friend challenged Opposition Members to say how many of them burnt coal in their own homes. Is he aware that my local Labour-controlled council--Kirklees council--has, over the past year, forced hundreds, if not thousands, of my constituents to stop burning coal by imposing unnecessary smokeless zones on the rural parts of my constituency, despite the fact that emission figures of smoke and sulphur dioxide in those areas fall within the guidelines set by the Department of the Environment and the European Community? Is that not plain Labour hypocrisy?

Mr. Hunt rose --

Mr. Martin Redmond (Don Valley) : On a point of order, Mr. Deputy Speaker. Will you draw the attention of Conservative Members to Government legislation regarding smoke control zones?

Mr. Deputy Speaker (Mr. Michael Morris) : That is not a point of order for the Chair.

Mr. Hunt : My hon. Friend the Member for Colne Valley (Mr. Riddick) has raised a very important point. I wonder how many Opposition Members have been councillors in local authorities that have decided not to install coal-fired units in local accommodation. I could quote many examples of that. However, I simply raise that matter to refute the point made by the hon. Member for Livingston.

I want now to consider what happens today.

Mr. John Evans (St. Helens, North) rose --

Mr. Barron rose --

Mr. Hunt : I should give way to the hon. Member for Rother Valley (Mr. Barron).

Mr. Barron : I should like to take the Secretary of State back to the point about pit closures. Will he name any Conservative or Labour Government who have ever closed coal mines in this country for foreign coal imports?

Mr. Hunt : There has always been a level of imports from other countries and that has been the case under all Governments-- [Interruption.] I am answering the point raised by the hon. Member for Rother Valley. I have always seen a level of coal imports--

Mr. Barron : What about power stations?

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Mr. Hunt : I have been present in many coal debates when Opposition Members have urged the Government to put a cap on the level of imports as if protectionism was the answer for the coal industry. I reject that argument. The coal industry now faces a substantial change in the energy market and that must be faced with reality instead of trying to introduce open-ended subsidies, which the Select Committee on Trade and Industry did not suggest but which was implicit in the comments of the hon. Member for Livingston.

Mr. John Evans : The Secretary of State has referred to the difficult period in the 1960s and 1970s when quite a number of collieries closed. The Secretary of State represents a north-west constituency and he will acknowledge that a substantial number of small collieries in St. Helens and Wigan closed for two major reasons. The first was because they were reaching the point of exhaustion and the second was that many of their reserves could be exploited from a brand new big colliery called Parkside.

Will the Secretary of State acknowledge that the vast difference between that period and the closure of Parkside is that Parkside has about 30 million tonnes of coal reserves which will now be lost to the nation and will remain in the ground for ever?

Mr. Hunt : I will deal with that point by referring back to the point made by the hon. Member for Bassetlaw, who said that the pits closed because they were worn out. The answer is not as simple as that. Some pits were exhausted while some were economically exhausted. Some could be accessed from other shafts in other mines. I am aware of all that. Equally, some pits had a substantial amount of coal which could still have been mined. However, the market, in the phrase used by a Labour Minister at the time, had collapsed. I am trying to explain how I believe coal has a future. However, it will not have such a future if we go down the route advocated by some Opposition Members of trying to introduce an open-ended subsidy and of trying to keep alive uneconomic pits.

Mr. Peter Hardy (Wentworth) : Will the right hon. Gentleman give way?

Mr. Hunt : I will give way in a moment, but I want to make this point because it is very important.

The hon. Member for Livingston said that output per man shift in the past few years has increased substantially. That is true. Since 1979, this Government have invested a substantial amount of money in support of the coal industry. The figure now totals £18,000 million. In the last financial year, that support has enabled British Coal to have a fixed capital programme of more than £180 million. There will be a similar figure in this financial year. It is good that the industry has responded by improving its output per man shift. Several hon. Members rose --

Mr. Hunt : I will indicate when I am ready to accept interventions, which will be in just a moment after I have made my next point. The hon. Member for Livingston should consider what happened during the period of the Labour Government between 1974 and 1979 to which he thought my hon. Friend the Member for Bolton, North-East was referring.

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Listening to the Labour party, one would think that Labour has a monopoly of concern for improving output per man shift. However, I will remind the House of the figures.

In 1974, when the Labour Government took office, output per man shift was 2.94 tonnes. What was the output per man shift by 1979? Having listened to the hon. Member for Livingston, one would have thought that output per man shift had increased substantially by 1979. In fact, it had declined from 2.94 tonnes to 2.89 tonnes. In the period that I have referred to, there was half a decade of inaction in respect of the support being given to coal and in respect of the response of those who worked in the industry. Opposition Members should reflect on that for a moment before they quote the nonsensical figures that they have put forward from time to time-- [Interruption.] The hon. Member for Livingston cannot dispute the figures for output per man shift. [Interruption.] The hon. Member for Bassetlaw keeps shouting, "Nonsense". He thinks that he has made a point. He has not made a point at all, because output per man shift has been calculated on the same basis over the period that I am talking about, and, of course, it relates production to the number of people in the industry.

Let me deliver the figures again. In 1974, it was 2.94 tonnes per man shift, and in 1979, it was 2.89 tonnes.

Mr. Ashton : What was the total tonnage?

Mr. Hunt : I am responding to the points raised by the hon. Member for Livingston. That is what debating is all about, even if the hon. Member for Bassetlaw does not understand it. Output per man shift was announced by British Coal just a short time ago as having reached 8.5 tonnes per man shift.

Mr. Ashton : What is the total tonnage?

Mr. Hunt : That is a creditable achievement.

Mr. Deputy Speaker : Order. I keep hearing a sedentary intervention from the hon. Member for Bassetlaw (Mr. Ashton), "What is the total tonnage?" If the hon. Gentleman wishes to intervene, he should rise in his place and see whether the Secretary of State will give way ; otherwise he should stay quiet.

Mr. Hunt : I am going to answer the hon. Gentleman. Do not let me miss an opportunity to put the hon. Gentleman right.

I now quote from the National Coal Board, as it then was, summary of statistics. I can now confirm that all undergound output per man shift in 1974 was 2.94 tonnes and in 1979 it was 2.89 tonnes. What about the output? National Coal Board mines output in 1974 was 116.9 million tonnes, and in 1979 it was 109 million tonnes.

Mr. Ashton rose --

Mr. Hunt : The hon. Gentleman should heed your words, Mr. Deputy Speaker. It is about time he stopped his nonsensical sedentary interventions. I have been seeking for the past few minutes to deal with the points that were raised by the hon. Member for Livingston. The speech of the hon. Member for Livingston read rather like the curriculum vitae for George Orwell's Minister of Truth. I have never heard such a rewrite of history.

Mr. Ashton : On a point of order, Mr. Deputy Speaker. You rose to your feet and criticised me--probably quite

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rightly--for making interventions from a sedentary position. The Minister will not give way, although he keeps challenging me. What is the total tonnage for this year and what is the forecast for next year?

Mr. Deputy Speaker : The hon. Gentleman is not being fair to anybody --either myself or the Minister. I heard him ask from a sedentary position, "What was the total tonnage output?" I heard an answer given. Whether or not the hon. Gentleman likes the answer is another matter, but the Secretary of State gave way.

Mr. Hunt : We go from bad to worse with the hon. Gentleman. We are, of course, dealing with tonnages which are well known to the House, and up- to-date figures are set out not only in the energy review but in the Select Committee's report.

Several hon. Members rose --

Mr. Hunt : Just one moment. I was dealing properly with the hon. Gentleman's sedentary intervention. I do not want to occupy the House any more with his sedentary interventions, but I was giving the output per man shift figures for 1974 and 1979, and his sedentary intervention was, "What was the total output?" I have now given the total output figures for 1974 and 1979, and he is still not satisfied, but, of course, those figures do not prove his point.

The point that I was making is that we should concern ourselves in this debate--I hope that hon. Members will address the real issues, and the real issue which the hon. Member for Livingston did not address-- [Interruption.] I would be obliged if Opposition Members did not criticise their hon. Friend so much by saying that he has not dealt with the issues. I am dealing with issues to refute the hon. Gentleman's point.

Several hon. Members rose --

Mr. Hunt : Just one moment. As we look forward to the future, let us consider the consequences of the second substantial shift in the marketplace for coal that is now used for electricity generation, just as we considered the first substantial shift in the marketplace away from coal being used in the--

Mr. William O'Brien (Normanton) : Will the Secretary of State give way?

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

Mr. Hunt : I shall give way again in a moment.

The point that I am making is that we have to address the substantial shift in the market for domestic coal, just as we did between 1964 and 1970 ; now, we look at the shift in the market for coal for electricity generation.

The Government carefully read the report of the Trade and Industry Select Committee and accepted its main thrust. Specifically, if Opposition Members will recall, we accepted the main recommendation and offered a temporary and declining subsidy for additional sales of British deep-mined coal. We have asked the industry to provide us with firm evidence of the additional sales that it believes that it can secure and the amount of subsidy that it will require. If hon. Members look at the Order Paper, they will see that, immediately following this debate, there is a motion on financial assistance to industry, which

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"authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance sums exceeding £10 million in total but not exceeding £120 millon in total to support sales of coal produced from underground mines in the United Kingdom."

Several hon. Members rose--

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