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Madam Deputy Speaker : Order. Before the intervention takes place, may I point out that we are dealing specifically with the Ways and Means resolution, and that any remarks must be related to that? I am sure that considerable ingenuity will be exercised by hon. Members.
Mr. Bell : My hon. Friend will understand what you are saying, Madam Deputy Speaker. All that will happen when the Bill goes through Committee will relate to the Coal Authority. The Coal Authority will be responsible for the charges and for the exercise and performance of its powers and duties. I am sure that, as my hon. Friend makes his speech, he will think about the significance of the Coal Authority.
Mr. Illsley : I shall move on to the powers and duties in relation to the Ways and Means resolution. I was slightly distracted by the argument about nuclear power.
The resolution is untimely in creating the coal authority when the industry is in a state of uncertainty. No one can envisage exactly how the industry will fair over the forthcoming few months and whether the Coal Authority will have any collieries over which to preside when the Bill receives Royal Assent.
The Coal Authority, to which the resolution refers, takes over certain liabilities from British Coal and from the Government. It also takes over some of the outstanding liabilities. One of the arguments on which I shall expand in a few moments relates to the liabilities that the Government will leave to a privatised industry. They will make it unattractive to anyone wanting to buy into the industry and will add costs to any private operator.
Those liabilities and costs could be detrimental to the industry when it is privatised and should be accepted by the coal authority and the Government to make sure that, when the industry is privatised, there will be no danger that it will die because no private operator will take on its liabilities.
Mr. Bob Cryer (Bradford, South) : My hon. Friend makes an interesting point, which covers the sale of assets by British Coal. When estimating the amount of liability which British Coal has now, it would be worth while my hon. Friend casting his mind over the assets which will yield revenue that is authorised by the Ways and Means resolution.
Mr. Illsley : My hon. Friend is absolutely right. The main revenue- raising power for the coal authority will be licensing. I intend to make some remarks in due course relating to the conditions that the authority will place on licences to the private sector. The strength of that licensing regime will be crucial to certain aspects of the Bill.
Mr. Cryer : If I could just make a further inquiry on my hon. Friend's speech, one wonders whether the Ways and Means resolution is necessary. The section of the Bill relating to manpower or staff envisages at least 100 people being employed by the Coal Authority. One wonders what revenue is envisaged as a result of the licensing activities of the Coal Authority which provides revenue authorised by the Ways and Means resolution. It seems to me that the licensing revenue may be so trivial and set against the liabilities that it makes the Ways and Means resolution otiose.
Mr. Illsley : My hon. Friend makes an interesting point. The financial memorandum to the Bill refers to the Coal Authority's costs, but states :
"Accurate assessments of the Coal Industry's costs--including staffing and subsidence costs--and income are not possible at this stage."
Even the Government are not able to give us an idea of the income that will be generated through the authority's licensing operations. Mr. Jimmy Hood (Clydesdale) rose--
Mr. Illsley : Will my hon. Friend bear with me for a moment? Even now, the authority's income is not included in the Bill because the Government have been unable to estimate it. One hopes that by the time the Bill is discussed in Committee, such points will be highlighted. The omission lends credibility to my argument that, if we cannot determine the authority's income and what the licensing regime will be, we should not be debating the Bill, the money resolution or the Ways and Means motion now, because they are premature.
Mr. Peter Hardy (Wentworth) : My hon. Friend makes a serious point. In Committee, the Minister will have a great many questions to answer.
My hon. Friend referred, among other things, to the Coal Authority's licensing fees, but no one seems to have considered the costs that it will incur. Until recently, the mines drainage unit was based in my area. The unit was then closed and the responsibility was passed to Silverwood colliery. Silverwood is to close, so who will take on the drainage function? In my constituency, there are four seams of outcrop which are very close to the surface and which have been known to engage in spontaneous combustion. Would my hon. Friend care to ask the Minister how many staff there will be in South Yorkshire to exercise the authority's responsibility in that respect?
Mr. Illsley : My hon. Friend makes an important point. He and I have already discussed what would happen if there were
fires--underground fires or, as he fears, outcropping fires--without the mines rescue resources to deal with them. Clearly, as outlined in the motion, the Coal Authority takes responsibility for licensing and charges and will have within its remit the income from the sale of land.
One issue that must be debated thoroughly is how the authority will dispose of the land and what regulations will be in place to ensure the safety of that land which is disposed of and which is a fire hazard, such as that mentioned by my hon. Friend the Member for Wentworth (Mr. Hardy). Will the sale include a covenant to ensure that the private operator purchasing such a plot of land will have the responsibility of dealing with any emergency ?
I again cite the financial memorandum, which states that the costs and income of the Coal Authority cannot be assessed "at this stage". The Bill is therefore premature.
Mr. Dickens : For the privatisation to be successful, the successor companies will want to know the ground rules, which have to be set out most carefully. In addition to acquiring any of the industry's assets, the companies will have a duty to acquire the liabilities which will include having to deal with spontaneous combustion and subsidence. The Government have to lay down the ground rules sensibly to make the privatisation attractive ; if not, the industry will not be privatised.
Mr. Illsley : The hon. Gentleman makes a very fair point ; one that I should like to stress. He is saying that, unless the Ways and Means resolution gives sufficient finance to the Coal Authority to exercise its powers and duties, the privatisation is unlikely to be a success because the successor companies will not accept such liabilities. My point is that the ways and means given to the authority have to be sufficient to enable it to discharge its functions. Not only that but under the resolution, the Government will have to give the authority wider powers to deal with matters scheduled to be transferred to the successor companies. In my view, the Government must accept through the Coal Authority more duties than at present and the costs that go with them.
A major obstacle to successful privatisation are the liabilities left to successor companies--and which in this case will not pass to the Coal Authority, as most people expected.
Mr. Martin O'Neill (Clackmannan) : I am not clear in my mind whether the resolution gives the Coal Authority the power to reimburse the Government for the sums of up to £200,000 that will be made available to groups wishing to exercise their right to apply for a licence.
Mr. D. N. Campbell-Savours (Workington) : It could be a royal exhibition grant.
Mr. O'Neill : It could, but there are not many exhibitions in Barnsley on the scale that the hon. Member for City of Chester (Mr. Brandreth) had in mind.
The Coal Authority will receive applications from groups that have received money from the Government, not British Coal, for the purpose of putting together the business plan that will form the core of a licence. That is apparently being done to encourage management buy-outs and worker participation. Does my hon. Friend believe that, under the terms of the Ways and Means resolution, the
Column 824authority will have the necessary powers and duties to provide that money, or will that be the responsibility of the Government or British Coal?
Mr. Illsley : The conflict that arises is whether the Coal Authority is likely to have returned to it the funding that the Government will give out in the form of loans to successor companies. My hon. Friend will have read the explanatory and financial memorandum to the Coal Industry Bill, which states :
"The Bill enables the Secretary of State to grant loans of up to £3,000 million to successor companies".
My hon. Friend mentioned a figure of £200,000. That relates to individual grants to groups contemplating a buy-out. The total sum involved will be £3 billion. Will the Coal Authority have sufficient teeth to recoup that Government expenditure, and will it have any licensing teeth in respect of the liabilities in the Ways and Means resolution.
If one considers the outstanding liabilities, one can see how many powers have been allocated to the authority and judge how successful it will be after privatisation. The resolution makes reference to the powers, duties and money given to the authority, which is another quango.
One of the first references in the Bill is to the salaries of the people who will serve on the Coal Authority. We cannot determine the authority's income, the charges that it will levy or the licensing regime that it will operate but the measure is quick to point out that the members of the authority will receive sufficient salaries and expenses to enable them to do their work.
Under the Coal Industry Bill, the authority will be responsible for licensing not only deep-mine operations but opencast mining. Applications for opencast mining are still to be encouraged as part of the Coal Authority's duties. At the same time, the industry is being totally run down and subjected to colliery closure after colliery closure.
Last year, just under 18 million tonnes of coal was opencast in this country ; total contract tonnage for the generators was 30 million. Almost two thirds of our coal is now being obtained through opencast for power generation, which is the last market available to British Coal. We are allowing opencast to undercut British Coal : we have allowed that cheaper mining method to pose a problem in the search for future markets. Yet the number of opencast applications continues to increase, despite public opposition to the process. The motion refers to "powers and duties". Where is a duty placed on the Coal Authority to protect the environment? Opencast mining causes pollution--dust, noise, fumes and heavy traffic, for instance. Will the Coal Authority be given any environmental duty under the licensing regime? We know that it will have power to grant licences, but will it have the power to tell any private operator to whom it gives such a licence that the licence will be conditional on an adequate environmental protection regime, thus ensuring that the countryside in opencast areas is left in a decent state when the operation is finished?
Mr. Derek Fatchett (Leeds, Central) : My hon. Friend has raised a number of important points about the Coal Authority's functions. Has he noted paragraph 1(4) of schedule 1, which lists the circumstances in which the Secretary of State can remove a member of the authority? Under paragraph 1(4)(c), he can remove a member of the authority if he considers that person
Column 825"unable or unfit to carry out the functions of a member". Does that condition worry my hon. Friend, who has made some important points about opencast and environmental considerations? Might not a member of the authority who was opposed to opencast mining, and the environmental conditions that it creates, lose his position? Should we not consider such issues?
Mr. Illsley rose--
Madam Deputy Speaker Order. Before the hon. Member for Barnsley, Central (Mr. Illsley) replies, may I issue a small warning? We are dealing with the question of charges, and hon. Members' remarks must relate to that subject. Hon. Members cannot engage in a general debate about the duties of the Coal Authority without relating it to charges.
Mr. Illsley : I accept your warning, Madam Deputy Speaker. My hon. Friend the Member for Leeds, Central (Mr. Fatchett) has made an important point, which will presumably be taken up on Committee : it may well be beyond the scope of the motion. Clearly, fitness for membership of the authority should be paralleled by the fitness of successor companies to be considered for licences, and that should be defined in the schedule.
All the powers and duties of the Coal Authority will, of course, be subject to either charges of income. They will all be related to the licensing regime.
I mentioned opencasting earlier. The charges are relevant to opencasting in that presumably the Coal Authority will obtain income from the scale of land to various successor companies and from charging under the licensing regime. It will charge the opencasting companies for the benefit of obtaining a licence.
The Coal Authority will pass responsibility for health and safety to the Health and Safety Executive and the Health and Safety Commission. Health and safety should be a responsibility of the Coal Authority. There is little reference to health and safety in the Bill. Clause 4 is about 20 lines long. Previous legislation contained an all-important clause stating that British Coal had responsibility for the health and safety of its work force. As I understand it, the Bill and the Ways and Means motion do not place a duty on any successor company. There is no requirement that any successor company should take steps to safeguard the health and safety of its employees.
The licensees to whom authority is given to win coal should have an obligation placed on them, and be charged for it by the Coal Authority, to ensure the health and safety of their employees. Whether the companies are engaged in opencast mining or deep mining, they should be responsible for the health and safety of their work force.
Several hon. Members have raised fears about health and safety and the inadequacy of the Bill's health and safety provisions. I do not intend to follow that line of argument. I simply wish to make the point that the Coal Authority should have a duty on health and safety and should have the power to charge and fine companies or refer them to the Health and Safety Executive if they are in breach of the normal health and safety guidelines. That brings me to what powers the Coal Authority has to levy charges and the conditions that it can place in the licences.
Column 826We are discussing the Coal Authority again under the Ways and Means motion yet we have not seen the contents of the licences that will be awarded by that authority to the successor companies. We have no idea what could be in the licences. That gives cause for concern. When we have discussed the Bill, the resolutions and all the rest of it, we might still not know what conditions the Coal Authority can place in a licence, what charges it can make and what income it will derive from licensing operations.
Britain's record in health and safety could be jeopardised. I see the hon. Member for Cambridgeshire, North-East (Mr. Moss) falling asleep at what I am saying. As a former member of the Energy Select Committee, I am sure that he cares about health and safety in the mining industry. He should perhaps listen more intently to the fears of Opposition Members.
One of the powers and duties of the Coal Authority, which has been referred to by my hon. Friend the Member for Wentworth (Mr. Hardy), is the operation of a mines rescue service. The point relates particularly to charges and duties. There is little in the Bill or the information on the Coal Authority about a mines rescue service. That liability will be passed to the successor companies. If the Coal Authority has responsibility for a mines rescue service, it will have to levy a charge against the successor companies.
Returning to the comments of the hon. Member for Littleborough and Saddleworth (Mr. Dickens), are the successor companies willing to take on the financing and operation of a mines rescue service and have that charge levied against them by the Coal Authority? Will they be willing to accept that, or are they likely to say that they want little to do with the service and do not see why they should pay for it because that duty should be placed on the Government as a residual liability?
The Government have not dealt with residual liabilities in the motion. The mines rescue service has considerable expertise, equipment, land and buildings. Obviously a great deal of thought-- [Interruption.]
Madam Deputy Speaker : Order. We cannot have a semi-private conversation between a Back-Bench Member on one side and a Minister on the other.
Mr. Illsley : Thank you, Madam Deputy Speaker.
A considerable amount of planning has to go into the mines rescue service. One of the latest rescue centres was established by British Coal to service the Selby coalfield. Obviously, with five packages as disparate as Scotland, Wales and the central areas of England, the successor companies will want to contribute as little as possible in charges to the Coal Authority for a mines rescue service. They will want the minimum service that they can get away with, because they will not want to contribute to the cost.
Where will the centres be based if they are to service an industry that is spread across the length and breadth of the north of England? How are the charges to be levied? Will it be a condition of the licence that successor companies will be required to contribute to the rescue service and, if so, in what proportions? Will the service be Government-funded?
The Government should retain the rescue service as a residual liability. It is just another example of a liability that should have been allocated to the Coal Authority. We should be discussing that authority's detailed provisions for health and safety and the mines rescue service. The
Column 827authority will grant a licence to the successor company. Will the rescue service and health and safety be conditions of that licence? Will a duty be placed on the Coal Authority to remove a licence if a successor does not meet an accepted standard of health and safety provision, or its contributions towards a mines rescue service?
Mr. O'Neill : My hon. Friend's argument is of special relevance to the colliery in my constituency. Any charge imposed by the Coal Authority on a Scottish coal operation would be disproportionate. As you well know, Madam Deputy Speaker, a mines rescue service is a complicated business, as it requires a continuous shift system and therefore needs four or five times as many people to run it. The facility also needs to be fairly close to the coalfield. In Scotland, the difficulty is that for the foreseeable future there is likely to be only one complex of mines. There is a small offshoot at Monktonhall. At present British Coal pays for that and Monktonhall miners co-operative does not contribute to it.
When the new coal authority grants a licence, if the charge is to be sufficient to meet the cost of such a scheme it will have to be disproportionately expensive for the Scottish mining operation because the scheme would be smaller than one for the centre of northern England, where the Yorkshire mines will be located. The costs of a rescue scheme are of great significance to licensing in different parts of the country.
Mr. Illsley : That is a telling point about Scotland, and the same will apply to Wales. If the Coal Authority is to consider a mines rescue service when issuing licences, the successor companies will look long and hard at the situation in Scotland and Wales. If the Coal Authority is to take account, under the licensing regime, of a mines rescue service and, as a consequence, has to ensure that a part of that service will operate in Scotland and in Wales, obviously, as a result of the disproportionate number of collieries in Scotland and Wales compared with the central region, the successor companies in the central region will be required to pay the lion's share of maintaining a service that will operate in outlying areas. That is a cost which the successor companies will be unwilling to meet, because they will be paying, in the central region, for a mines rescue service that is to operate in Scotland and peripheral areas. I am sure that those companies will regard that as a disproportionate cost placed on their company after privatisation.
As my hon. Friend the member for Clackmannan (Mr. O'Neill) points out, the licensing regime under the resolution and the charging by the coal authority is crucial in all those respects. Without having sight of the licences, we cannot know the conditions that will be placed on the successor companies in such a crucial sector as mines rescue. How are we to maintain a mines rescue service under that system? Will the successor companies be willing to be charged by the Coal Authority for the provision of that services?
A further liability is subsidence. The Coal Authority will not be given sufficient duties or powers in relation to subsidence. Earlier, the President of the Board of Trade said that subsidence liability would be passed to the Coal Authority, except in certain circumstances in which subsidence damage or compensation for subsidence damage can be allocated to a specific successor company. The President of the Board of Trade said in his speech that
Column 828that would enable members of the public to determine exactly who is responsible for subsidence damage to their properties or their land and to take the appropriate action.
I put it to the Minister that that is an absolute nonsense. There is no way that a member of the public will get a straight answer from the successor companies operating in the industry in relation to subsidence. It is difficult enough now under British Coal. Obviously, members of the public will chase from one company to another as each company denies responsibility for the subsidence damage to their property. How is the average member of the public to prove responsibility for subsidence damage?
Mr. Hood : That is one of the parts of the Bill that puzzle me. It says :
"It is estimated that subsidence will initially cost the Authority £35 -40 million per annum, but that this is expected to fall to under £20 million in the last year of the century."
I assume that my hon. Friend's experience is the same as mine. The cost of subsidence has not been decreasing, and it will continue to increase for a considerable time after the end of the century. That seems to be an estimate by an organisation which is not identified in the Bill and which I suspect from the rhetoric in the Bill has no expertise or understanding of the problem of subsidence. Is that not another nonsense? The true calculations have not been put into the Government's assumptions of actual costs.
Mr. Illsley : I am grateful to the hon. Gentleman. My experience of the Bill also takes into account the report of the Energy Select Committee in relation to subsidence and the Coal Mining Subsidence Act 1991. It was apparent from those deliberations that the general public do not get the fairest deal when it comes to subsidence damage. Matters will only be made worse because of the Government's intention to place the responsibility for subsidence damage on successor companies and only partly on the coal authority. As a result, the Coal Authority will have to mop up all the residual liabilities when members of the public cannot obtain adequate compensation from the colliery company responsible in their particular region.
The question is why, under the licensing and charging regime, the Coal Authority has not been given total responsibility for subsidence damage. It would be far simpler for that authority to be vested with the power to grant compensation for subsidence, and subsequently to charge the money back to the successor companies that it determined were responsible for the damage. That would give members of the public direct access to one body, a one-stop shop where they could go to pursue a claim. The successor companies would know that the coal authority would charge the compensation back to them as part of the licensing regime, and that would be far simpler than the procedure envisaged in the resolution.
It is sad that certain sections of the Coal Mining Subsidence Act 1991 are to be deleted. I served on the Committee on that Act when it was a Bill. It is now likely that the coal authority will place no responsibility on successor companies to notify individual areas, and the owners of houses and other properties, of local mining orperations and the consequent likelihood of their properties being subject to subsidence damage. The Bill will remove that responsibility.
Mr. Hardy : My hon. Friend will recall that, during proceedings on the Coal Mining Subsidence Act 1991, our
Column 829former colleague and good friend Allen McKay, who was then the Member of Parliament for Barnsley, West and Penistone, and whose constituency--a mining area since ancient times-- adjoined mine, told the House about an occasion not long before he became a Member of Parliament when he was a voluntary fireman. He attended an incident in which some land had collapsed in order to rescue two cows that had fallen down a long-disused mine.
This is a true story, Madam Deputy Speaker, and is entirely relevant to the point that my hon. Friend was making. Conservative Members will recall Allen McKay, and he informed the House-- [Interruption.] We are entitled to ask the Minister to take the matter seriously. My former hon. Friend asked the House who would be responsible for the subsidence, for the expenditure of the voluntary and professional firemen who had to attend, and to the farmer for all the inconvenience that he had suffered, and for the suffering, injury or even loss of the two cows? Does my hon. Friend think that such calculations crossed the Government's mind as they prepared to establish the authority?
Mr. Illsley : Certainly some calculations have crossed the Government's mind--mainly concerning how much responsibility should be passed to the successor companies. To minimise that responsibility they have decided to do away with some sections of the 1991 Act in so far as they relate to notification of individuals and to the responsibility of the industry to maintain plans in connection with subsidence damage. Without such notification, individuals will not be appraised of their rights under the subsidence legislation. The change is being made to reduce the costs of the industry after privatisation. The Act is less than three years old, so we have debated the subject recently and decided that that duty should be placed on the industry ; yet the Government now seek to remove it. The original provisions had the blessing of the all-party Select Committee on Energy, which debated subsidence damage as a precursor to the Act, and there was all-party agreement to its report, which said that there should be the duty of notification. I am surprised that the Government are seeking to reduce the effectiveness of the 1991 Act. The new subsidence proposals are totally unacceptable. They will be ignored by private sector companies and the rights of members of the public in relation to subsidence damage will be severely diminished as companies try to avoid their responsibilities for such damage, which is especially severe in the Nottinghamshire area. Will the Minister tell us why no successor body to the Coal Industry Social Welfare Organisation--CISWO--has been delineated? The coal Authority has not been given any powers in relation to welfare. The Minister and I have discussed welfare and he has taken the view that an industry such as mining has no need for welfare provision. He would make the point that welfare provision does not apply in any other area other than the armed forces. The mining industry has been a dangerous industry, it is a dangerous industry and there will always be requirements for welfare. The Bill scraps the Miners Welfare Act 1952 and makes no provision for a successor body.
Madam Deputy Speaker : Order. I am sorry to pull up the hon. Gentleman, but he must relate what he is now
Column 830saying more closely to the charges. If he can do that, fine. We cannot have a general debate, in which I think he is now engaging.
Mr. Hood : I am sure that my hon. Friend is going to keep in order and I hope that my question is as well. Is it not the case that CISWO provides social care for 11,000 miners, retired miners and paraplegics at a cost of £2.5million a year? If that care is not provided for in the Bill, either the 11,000 miners who have been receiving that care will lose out, or there will be a burden on local authority community care and it will cost a lot more than £2.5million.
Mr. Illsley : The industry requires welfare provision. The point that I wish to make in relation to the motion is that the Bill removes the Miners Welfare Act 1952 and leaves a void. The only successor body under the whole privatisation scenario would be the Coal Authority. That cost of £2.5 million per annum, to which my hon. Friend the Member for Clydesdale (Mr. Hood) referred, should be charged through the Coal Authority either to the successor companies or to some other bodies which are created to provide welfare. Obviously, the best way in which the coal industry social welfare organisation could have moved forward would have been to leave it alone, to leave the Act of 1952 in place and not meddle with it. Once the Government begin to consider a successor to the Act of 1952, the only available option is the Coal Authority, and we shall unravel a whole host of difficulties in the provision of welfare.
Will the Minister consider specifically making the Coal Authority the body responsible for welfare and giving it power to recharge the relatively modest cost for the provision of welfare--some £2.5 million--back through the industry to maintain that welfare? The other side of the coin is that if we are left with a void in relation to welfare provisions nobody will pick it up. The successor companies will go to the Coal Authority which wishes to charge them for welfare and why they should pay for the welfare of their work force when they do not see that as an appropriate cost to their business. All year, we have heard of the costs to industry of social provision, but here we have a clear case where social welfare provision should be retained. As I have said, there are 500,000 beneficiaries of that provision and 72,000 people in receipt of benefit for pneumoconiosis--a prescribed disease in the mining industry. That is where the need for welfare arises. The coal industry is unique in terms of its dangers and its susceptibility to industrial illness and injury. There is a requirement for welfare, and it should be taken on by the Government.
I hope that amendments are moved in Committee to enable the Coal Authority to become the responsible body for that welfare provision. There will be considerable disappointment in mining areas if welfare provision is not accounted for. Obviously, local authorities will be mentioned as taking up the responsibility for welfare. They do not have the resources to do so. Therefore, they cannot charge the Coal Authority for that provision. The Coal Authority will not have a duty to a local authority for the provision of welfare.
There are two other matters to which I wish to refer in relation to the Coal Authority. The penultimate one--
Mr. Malcolm Moss (Cambridgeshire, North-East) : The hon. Gentleman should not cut short his speech.
Mr. Illsley : It is not a long speech--or, rather, it would not have been.
My penultimate point is about pensions, the Coal Authority and why the Coal Authority will not be allowed to take on responsibility for pensions after privatisation. As the Minister knows, pensions are dealt with by the British Coal pensions and insurance centre in Sheffield, and there is a question about its future role in the provision of pensions and benefits. The coal industry insures its own risks. British Coal does not have an insurance policy. It has to insure itself against whatever risk--for example, civil liability, personal injury--and there are substantial claims against it. The pension schemes relate to a fund of £14 billion.
Where is the safeguard through the Coal Authority in respect of pension schemes? It is suggested that the £14 billion be allocated to the Government and that they will take responsibility for allocating pensions in future, on the basis that 50 per cent. of the surplus will be allocated immediately to the Government. But what will happen to current workers? Their existing pension entitlement will end, their pension scheme will be wound up, and they will begin another pension scheme, perhaps with a private pension fund.
Where are the safeguards for serving mineworkers pension provision? The mineworkers pension scheme is quite good. When it came to opting out a few years ago under the 1986 legislation, many private pension companies were unwilling to accept mine workers transferring because the benefits under private provision were not as good as under the mineworkers pension scheme. In particular, the mineworkers pension scheme contained provision for widows' benefit. The private pension industry was unwilling to make a similar commitment, and transfers to private pension funds were not as good as under the mineworkers pension scheme. Therefore there were few transfers to private pension plans.
We have the same problem now with privatisation. A very good scheme, which is in surplus, and which has employees taking a contributions holiday to the tune of £800 million, is to be wound up. What is the logic in winding up the mineworkers pension scheme, and forcing every serving mineworker to take on a new scheme? Surely there is a vehicle--the Coal Authority--which can take responsibility for the provision of pensions, or license the existing pension organisation and charge the successor company.
The Coal Authority has licensed its pension provision to the pensions organisation, the pensions organisation administers the pension scheme on behalf of the successor companies and charges them for that service. I am convinced that the successor companies will welcome that with open arms. How many companies will welcome with open arms the idea that they must start a pension scheme for new employees which perhaps will be more poorly funded than the existing mine workers' pension scheme and which will provide poorer benefits? The answer is that the Government want the £14 billion.
It is simple : £14 billion goes into the Government's coffers and they are home and dry. The idea is that the Government will take the £14 billion from the mineworkers pension fund and the British Coal superannuation scheme and then pay the pensions as they fall due. At a time when we have a £50 billion public sector borrowing requirement, £14 billion is a handy little nest egg that the Government have stumbled upon. It looks
Column 832attractive. Obviously, the Government will turn logic on its head and stop the pension scheme from operating simply to get their hands on the £14 billion. That is scandalous.
What has happened to pension schemes over the past three or four years? Who has been castigated for stealing pension fund moneys? Who gets all the blame for nicking pension funds? This is a classic example of £14 billion going the same way as the Maxwell pensions. The future pension entitlements of 500,000 beneficiaries could well be jeopardised by the ending of the mineworkers pension scheme. It is an absolute disgrace.
Mr. Bill Etherington (Sunderland, North) : My hon. Friend has mentioned that the closed pension scheme proposed by the Government will take 50 per cent. of any surplus for the benefit of the Treasury, leaving only 50 per cent. for existing beneficiaries. The 50 per cent. offered by the Government compares poorly with the Coal Board's record of offering 70 per cent. to beneficiaries. Does my hon. Friend accept that the Coal Board, which is by no means the most generous employer, could manage to do a little better than the Government's proposals?
Mr. Illsley : My hon. Friend is right. One has only to look at the existing mineworkers pension scheme. Over the past few years, British Coal has taken various contribution holidays amounting to £800 million, yet the scheme still has a viable fund of £14 billion to meet pension commitments. As I recall, the scheme has never been in deficit to the extent that the employer has had to make good the deficit.
The pension scheme is in excellent shape, yet the Government want not only to take the £14 billion fund. They automatically want 50 per cent. of any surplus. As my hon. Friend says, they want the cake, and they want to eat it as well. They want every last pound from the scheme. That is detrimental to the scheme and threatens the beneficiaries of it.
I shall refer to the duties of the coal authority.
Mr. Campbell-Savours : Is this the penultimate point?
Mr. Illsley : This is the penultimate point, and it relates to concessionary coal. [ Hon. Members :-- "Come on."] If Tory Members do not interrupt me, I shall conclude my remarks more quickly. The Government have said that concessionary coal is a liability that can be passed on to the successor companies. We must ask how the successor companies will be made responsible for concessionary coal. How will they be obliged to meet their commitments to beneficiaries under the concessionary coal scheme? The Government have chosen to pass the concessionary coal scheme on to the successor companies rather than allow the Coal Authority to be responsible for it. That plan would be far more sensible than what is envisaged. It would be far easier for the Coal Authority to take on board the arrangements for concessionary coal and to charge the successor companies for the provision of that service to serving mineworkers and to beneficiaries. Of course, if people were attracted to cash in lieu as an alternative to concessionary coal it becomes far easier, as that is only a money transaction. The provision of coal could be through the companies and could be charged back to the Coal Authority.
Many concessionaires and beneficiaries are worried that their historic right to concessionary fuel will be affected by
Column 833the Government's proposals. The transfer of rights contained in the Transfer of Undertakings (Protection of Employment) Regulations 1981 is unlikely to be sufficient to enable beneficiaries to continue their concessionary coal entitlement because any company can place its employees on a new contract which does not allow for concessionary fuel. That fuel could be lost to serving mineworkers.
Mr. Michael Clapham (Barnsley, West and Penistone) : Does my hon. Friend agree that a better way of protecting the existing beneficiaries of the concessionary coal scheme and of providing for the workers in the privatised industry would be to have the Coal Authority preside over the 1983 concessionary fuel agreement? Does my right hon. Friend agree that that would protect both the current beneficiaries and the future work force?