House of Commons Hansard Debates for 18 Jan 1994

Column 741

pneumoconiosis ? Under the terms of the Bill, the new owner would have to bear the entire cost of compensating that individual, although the damage would almost certainly have been caused while the miner or miners concerned worked for British Coal, when, in earlier years, there was no provision for effective dust sampling, and it was not the norm for masks to be worn.

Mr. Michael Clapham (Barnsley, West and Penistone) : Does the hon. Gentleman agree that, if the industry is to be privatised, the way forward on pneumoconiosis is for the Government to accept the no-fault liability scheme currently run by the industry, and to carry it over to the private sector ?

Mr. Churchill : The hon. Gentleman almost takes the words out of my mouth. I was about to ask my hon. Friend the Minister and his ministerial colleagues whether they realised that such unquantified and unquantifiable liabilities are likely to act as a supreme disincentive.

Furthermore, to take up the point made by the hon. Member for Barnsley, West and Penistone (Mr. Clapham), what would happen to such a miner if his new employer went into liquidation? That is quite possible, given the present turmoil in the coal market in this country, and the fact that not a tonne is now being purchased--indeed, I am not aware that any of the £500 million subsidy supposedly on offer from the Treasury has had to be ponied up so far. What protection would there then be for the miner with pneumoconiosis or any other industrial disease? That is clearly something that must be properly addressed.

I know that it is the view of my hon. Friend's Department that pneumoconiosis is no longer a significant problem in terms of the numbers of new cases that are appearing, and that therefore the cost burden will not be great. In those circumstances, would it not be more appropriate for the Coal Authority to shoulder responsibility for that serious, long-term industrial disease?

If those unquantifiable liabilities were removed, not only would that make the remaining mines more saleable, but it would be the miner's guarantee that his compensation would be assured in the event that he developed that much-feared industrial disease, which bears comparison only--

Mr. Jack Thompson : On a point of order, Mr. Deputy Speaker. I am sorry to interrupt the hon. Member for Davyhulme, but I was also under the impression that it was a convention of the House that one did not read newspapers during a debate. I see that one hon. Member is doing so.

Mr. Malcolm Moss (Cambridgeshire, North-East) : Mr. Deputy Speaker--

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : Order. Let me rule on one point of order before I take another. I had not noticed that any hon. Member had been reading a newspaper. If that was the case, I have no doubt that the hon. Gentleman will not continue to do so.

Mr. Moss : I am happy to clear up the situation, Mr. Deputy Speaker. I was reading an article about the Drax clear-up, which is relevant to the debate.

Mr. Churchill : Not only would the removal of those unquantifiable liabilities make the mines more saleable, but it would be the miner's guarantee that his

Column 742

compensation would be assured if he were to develop pneumoconiosis. I ask my right hon. and hon. Friends if they will look at that question again.

The most striking difference between the sale of British Coal's core mines and the sale of steam coal properties in the world's biggest free coal market, the United States, is the shortness of the coal contracts with the power stations available in the country to potential new operators. The one certainly dominating the scene is that only three years of contracts remain with the generators. Beyond that, there is only uncertainty. Even the generators believe that, of all the coal-fired stations, only Drax is likely to be on base-load operation by the turn of the century.

Of course, it is too late to extract longer contracts from the generators, but, even now, there are two things that the Government could do to encourage would-be purchasers of the remaining mines. First, they could insist on the completion of flue gas

desulphurisation at Ferrybridge--a bargain made at the time of electricity privatisation with the industry and referred to many times by the noble Lord Wakeham. The industry should be held to that. Secondly, and even more importantly, the Government should require redundant coal-fired stations to be made available at reasonable prices to other operators, including the principal coal producers. We know that the regulator is concerned to see redundant stations offered to other users. However, he does not believe that he has the powers to require it. It is clear that National Power bases its asking price on the loss of sales value for its best stations. That would have the effect of pricing, for example, a 1,000 MW station--even one that is 35 years old and without gas cleaning--at over £300 million, which would be indefensible in terms of investment by a future private operator.

That is in stark contrast to the sales on the real market. Recently, it was reported that PowerGen sold three stations to China for a mere £20 million.

Mr. O'Neill : I am following the hon. Gentleman's argument carefully, and I have some sympathy with it. Perhaps he might consider as a possible conclusion that the generators should be referred to the Monopolies and Mergers Commission. The only difficulty with that conclusion is that it would interrupt the Government's proposals to sell off the remaining tranche of shares of the two generators and would prejudice the sums that may be involved. If one has an abuse of monopoly power, it is logical to refer it to the MMC.

Mr. Churchill : I could not agree more. It is a matter of great regret that we in Britain appear to have a significantly less powerful regime against monopolies and the abuse of monopoly power than, for instance, the United States, which clearly acts to the detriment of consumers. The Government need to address that as a matter of urgency.

If the two generators were required to offer all the redundant coal plant at reasonable prices, it would boost the sales prospects of the remaining mines, provide the best guarantee that those who earn their living in the industry have the prospect of long-term employment, while at the same time providing consumers with much-needed competition in what is at present an over-restricted and an over-controlled market.

It is vital that the Government do not allow what is left of that once great industry to be blighted by an unwillingness on their part to address the abuses and

Column 743

distortions that have arisen in the wake of electricity privatisation. While welcoming the Bill, I call on my right hon. and hon. Friends to fine-tune it during its passage through the House to ensure the success of privatisation and to offer the industry and those who work in it a clear and prosperous future in the private sector.

Several hon. Members rose --

Mr. Deputy Speaker : Order. I must remind the House of Madam Speaker's ruling earlier today that speeches between the hours of 6 pm and 8 pm will be limited to 10 minutes. We are now in that period.

6.7 pm

Mr. Peter Hardy (Wentworth) : The hon. Member for Davyhulme (Mr. Churchill) clearly does not have the same enthusiastic view of public ownership as his revered grandfather. Apart from that, I hope that the hon. Gentleman will join those of us who hope to serve on the Standing Committee, in which, perhaps with the assistance of the hon. Member for Southwark and Bermondsey (Mr. Hughes), we shall be able to fine-tune some aspects of the Bill, not least with regard to the latter points of his speech and the question of opencast mining, which cause some of us who live in the coalfields considerable anxiety.

On one side, we shall have the sites of destroyed pits, and on the other the devastation of a long period of opencasting, which no one in the local communities wanted. I hope that the consultation over the arrangements for opencast mines will not diminish the influence of local communities and their local authorities so that distant people can help rape what is left of our heritage.

It is a long time since nationalisation. It is appropriate to tell the House that, on vesting day in 1947, when I was a schoolboy, I went with my father and stood at the celebration of this decision by the greatest of post-war Governments. It was an interesting experience for a boy, because it was quiet, it was dignified and it was decent. There were some Tories there, but they were probably on the platform with one or two local dignitaries. I remember that because of the quiet satisfaction and decency of the occasion. The other day, I stopped my car just to the north of the former pithead baths at Manvers colliery, exactly where I had stood with my father, and thought about what had happened since then. We have had 33 years of Conservative administration, and we, after being in office for only a minor part of the period that has elapsed since then, bear all the blame.

I know what the men were satisfied about and what they were celebrating. Each and every one of them would have known somebody or had relatives or neighbours who had been killed in the pit. Each of them would have known men who had been maimed. Each and every one of them would have known the short-cuts that had operated in the previous arrangements. They had seen waste and lost opportunities--so much so that, during the war, they had to have "Bevin boys" to make up for the inadequate provisions of the 1920s and 1930s.

The mine was taken into public ownership with good will. It was a very important decision. In the 1970s, the Labour Government--the hon. Member for Davyhulme took part in some of the debates, as I did--produced their

Column 744

"Plan for Coal". The Conservative party in opposition enthusiastically supported it, and, until recent years, boasted about it.

We then saw the Conservative Government turning their backs, saying what a pity it was that the miners had not improved productivity earlier. In fact, productivity has been improving at a rate of knots in the past six or seven years. I heard Lord Haslam castigate the Secretary of State only a few months ago for not understanding that fact.

We have many problems, but, with a 10-minute limit on speeches, I cannot refer to all of them, but I hope that I serve on the Committee and that Opposition Members will find time, without attempting to prolong the proceedings improperly or unreasonably, to consider matters such as the Coal Industry Social Welfare Organisation and concessionary pensions. We have heard little about the rake-off that the Government proposed to take from the surplus. I hope that we are also able to consider environmental responsibilities and health and safety matters.

Unfortunately, Mr. Deputy Speaker, you are unable to speak in the House. From your experience of the mining industry, you must be deeply concerned about the paraplegic centre in Pontefract and the future of other such establishments. I hope that the Minister will assure us that there will be proper provision for such

establishments.

Subsidence has been referred to. We will have to explore that and many other issues in depth, but I wish to discuss safety. The other day, a learned judge--the Minister for Energy knows which case I am referring to-- perceived

"a mining industry which, in future, may see privatisation and, thus, an end to much of the regulation that British Coal has put in place."

We have been told that it dismantled much of the safety structure, and the President of the Board of Trade boasted about that this afternoon. [Interruption.] The right hon. Gentleman said that he would not have done anything to injure safety, except to do what has already been done, and that is to replace what existed before with all sorts of provisions, and then provide the let-out clause that appears on virtually every page of the regulations, stating that there will be priority for safety "in so far as it is practicable". One thousand men a year were killed in the British mining industry before nationalisation. One thousand men a year was the average in the 1920s, 1930s and early 1940s. As has been demonstrated, the average has been brought down to a tiny proportion, and it is at risk. There will be corner-cutting and short-sighted calculations. If not, the Secretary of State would have given a little more time to consider the disposal of the industry to one company which would have had the capacity to operate with scale, which would not have had to look over its shoulder at competitors operating on the lowest common denominator principle in safety and investment, and which would have been able to take a forward look.

The right hon. Member for Selby (Mr. Alison) might think that all the Selby pits will be saved, but I doubt whether that will be the case.

Mr. Jimmy Hood (Clydesdale) : Will my hon. Friend give way?

Mr. Hardy : No. I do not have time to give way.

I have one colliery left--Silverwood. It is a proud pit, with a superb record. My hon. Friends know that Silverwood has been one of the most successful collieries

Column 745

during the post-war period. It has made enormous profits. Only a little while ago, I spoke in the House about the proud achievements of that colliery when it had broken another record. A few months ago, I heard of investment at the pit, but subsequently learned that a development on which much money has been spent was stopped about three weeks before it started to yield.

That is the colliery to which British Coal used to send distinguished visitors. In Jubilee year, the Queen visited Silverwood colliery. A picture of the Queen at that pit was displayed in every colliery in Britain. Men from that pit have often featured in the honours list--one as recently as three weeks ago. They have been treated scurvily.

We now hear that the pit will not be closed abruptly, but will be whittled away, and that some men might be transferred to Maltby. The only problem is that people in Maltby tell me that they have been assured that Maltby's requirements do not need to be met by Silverwood men. What a way to treat people who have made such an enormous contribution. If they are treated like that by British Coal, how on earth will they be treated by private operators?

I again ask the Minister a question. I have asked four Ministers of the Crown this question, and I have not had a satisfactory answer. If the Minister is concerned about safety, will he guarantee that no overseas coal owner will be allowed to buy British mines if his record is as bad as some Opposition Members suspect some are? If coal owners abroad have unsatisfactory safety records, we do not want them here, because we value the lives and limbs of our constituents. It is no good the Minister saying that that is a matter for the Health and Safety Executive, because the Health and Safety Executive does not decide who will buy the British coal industry. That is a ministerial responsibility, and the executive should not exercise it.

I should like to say much more about Silverwood. I find it far too distressing even to contemplate that men with such a proud record and splendid achievement should be treated as British Coal has treated them. The one thing that I regret about the leadership of British Coal is that they seem to have forgotten that they have been paid to lead their industry on behalf of the nation.

I suspect that, in recent years, they have largely led the industry in the direction in which they want it to go for their personal reasons, overlooking the fact that their position has been--

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : Order. I call Mr. Peter Atkinson.

6.17 pm

Mr. Peter Atkinson (Hexham) : I congratulate my right hon. Friend the President of the Board of Trade and my hon. Friend the Minister for Energy on bringing the Bill to the House. It has been a long time in coming, but it is better late than never.

The hon. Member for Wentworth (Mr. Hardy) took us back in history to vesting day in 1947, when the nationalisation of the coal industry came into effect. Although the hon. Gentleman described that day very eloquently, sadly, when we look back at the era of nationalisation from a perspective of history, we see it as nothing more than an unremitting disaster.

Column 746

A once great industry was reduced to a rump by years of protectionism and, I have to say, Government interference. This Government's bold decision--it was a bold decision--to liberalise the energy market in this country showed just how featherbedded, feeble and incompetent British Coal and the British coal industry had become. The result was an unpleasant reality with which my right hon. Friend the President of the Board of Trade had to deal, taking much flak in the process.

In 1947, when the hon. Member for Wentworth stood outside the gates of the colliery, Britain was the leading nation in mining technology. It was exporting tonnes of coal all around the world. Welsh steam coal probably fired nearly every locomotive in the world. We were world leaders. There were dozens of successful and profitable collieries in the north-east of England at the time.

For example, pits in my home county of Northumberland--as the hon. Member for Wansbeck (Mr. Thompson) knows, there were many pits in my home county-- made a profit at that time. Private coal owners would not have kept the pits open if they had not made a profit.

I rember that Shilbottle colliery used to supply all the coal to Buckingham palace, because it was considered to be the finest household coal in the United Kingdom. Shilbottle coal was requested by the late King. The Queen burns house coal in many of her grates. Many people will now have to burn Polish coal, because British coal cannot provide house coal for our market.

Time and time again, we hear about the effectiveness of the United States system of pillar and stall mining. That method has been recommended to the Coal Board and many private operators as a way to mine coal economically. The technique was invented in the north-east of England. Originally, it was used in the Ellington and Wearmouth collieries. Wearmouth colliery is under threat at present. We will have to bring mining engineers from the United States in order to re-learn the skill of pillar and stall mining.

I am worried that those people who ran the National Coal Board and subsequently British Coal are now, through their plans for colliery closures, helping to shape the future of the privatised industry. It is totally wrong that a group of British Coal managers, who have an eye on future management buy-outs, should be shaping the industry in the way they see fit, while private companies are being frustrated in their efforts to take over pits which British Coal has closed and which are not wanted but which the private sector believes could have a good future.

I shall give an example. I am sorry that the hon. Member for Sunderland, North (Mr. Etherington) is not in his seat, because Wearmouth colliery is a classic example. A private company wants to buy that pit and re-employ some of the 650 men who lost their jobs. Wearmouth colliery is ideal, because there is plenty of good-quality coal which can be transported straight from the pithead to ore-carrying ships and exported.

To sell on the world market, coal must be priced at about £15 a tonne- -that is before shipping costs of £5 or £7 a tonne are added. A pit near the coast with easily mined coal is highly competitive. Private coal companies that are interested in Wearmouth realise that they will be able to achieve the target of £15 a tonne and export coal to overseas markets from that colliery.

Column 747

Mr. Jack Thompson : The hon. Gentleman's constituency is next to mine. Is he aware that Wearmouth colliery could achieve that target whether it is privatised or nationalised? It was able to achieve the target before it was closed, but it was still closed by British Coal, as part of the Government and British Coal exercise of "slimming down the industry", as it has been described.

Mr. Atkinson : The hon. Gentleman is totally wrong. The figures are only averages, because they vary from pit to pit. Even after making enormous steps forward in productivity, collieries have a long way to go to get down to the level of £15 a tonne. However, they can and will do so under private management. If British Coal had been able to do it years ago, it would have done so, but the management and protection of the business have always prevented it. It will be left to the private sector to achieve that possibility.

It is worth noting that, in the United States, deep-mined coal from mines exactly like Ellington colliery in Northumberland and Wearmouth colliery in Tyne and Wear can land coal on the surface for £7 a tonne in West Virginia. Such a target is ultimately achievable in British deep-mining collieries. [Laughter.] Labour Members may laugh about that, but if we can achieve that level of productivity in our mines, British Coal will have a future of bringing on new customers in the industrial sector as well as exporting coal around the world, especially to Germany, which spends about ten times that amount on mining one tonne of coal.

It is no wonder that British Coal managers do not want Wearmouth colliery to fall into competitors' hands. Despite making the pit available for leasing, they are making it almost impossible for a private company to take over the colliery.

There are two faces at Wearmouth. One of them is brand new--it has been under development for several months. New coal-cutting machinery imported from America was already at the face. That machinery has been removed and taken to Longannet colliery in Scotland, where puzzled managers have been told to use it come what may.

At the same time, expensive roof supports have been removed from the new face and replaced with temporary supports. The supports have been taken to Ellington colliery, where they are simply lying on the surface. Next week at Wearmouth, work will start on pulling the coal-cutting equipment from the existing face, and more roof supports will be removed.

Why is British Coal doing that? One thing that British Coal cannot be short of in this day and age is coal-cutting machinery, because it has been removed from several pits recently. Surely British Coal cannot be short of roof supports for the same reason. The reason is obvious : British Coal managers, who are looking towards a management buy-out, consider that Wearmouth colliery is a danger. Therefore, they will seek to frustrate a private company which wants to take it over, as they frustrated another company which wanted to take over Bevercotes colliery in Newark.

Hon. Members will watch carefully the way in which the Coal Board deals with the pits between now and the time that the Bill becomes law. The Coal Board retains a much greater responsibility than simply worrying about the management buy-outs which individual managers may be considering. It has a statutory responsibility to the mining

Column 748

industry as a whole. Once the Bill becomes law, it will then be held accountable for what it has done in the months leading up to privatisation.

I welcome this privatisation. Whatever the mockers on the other side of the House may say about it, it will give the British coal industry an opportunity to live once again, to compete in the world, to attract new customers, and to move to being one of the leading coal-producing nations once again.

6.26 pm

Mr. John Evans (St. Helens, North) : I listened with some anger to the hon. Member for Hexham (Mr. Atkinson) refer to the glories of mining of Tyneside and in north-east England in the days when it was privatised. I merely tell him that my father worked at the Rising Sun colliery at Wallsend. When he was 32 years of age, he drowned in a mining accident for which my mother received no compensation. My mother and three small children aged under six were left in abject poverty. My memories of the privately owned mining industry leave me with no pleasure whatever.

It is with some pleasure that I preface my speech by referring to early-day motion 359 entitled "Women Against Pit Closures Camp at Parkside Colliery". Unlike the Government, those brave women believe passionately in their menfolk and their pit. Tonight, they are holding a party to celebrate the first anniversary of their camp. It was an incredible achievement and experience for those women, who often suffered from foul weather. Severe gales, deep frosts and downpours of rain have often been their lot. Frankly, I do not believe that a group of men could have stuck it out for 24 hours a day for a whole year in the same way as those women. The women have made it clear that they will stay at Parkside colliery until it is reopened and producing coal. I salute them, and I am delighted to wish them a very happy birthday.

When I was elected to the House in February 1974, there were over 250,000 miners in this country working in more than 100 pits. There were innumerable collieries dotted all over north-west England. Today, there are 22 pits and about 20,000 miners--none in north-west England. Parkside, which was the last colliery in the Lancashire coalfield, closed one year ago. Since I was elected, a quarter of a million miners have been sacked and almost 100 mines have closed. Two hundred thousand jobs have disappeared since the Tories were elected in 1979. The contraction of the industry is continuing. As my hon. Friend the Member for Livingston (Mr. Cook) said, it has been leaked that half a dozen collieries will close during the next few weeks. By the time the Bill reaches the statute book-- if it reaches the statute book--we will be down to the 12 to 14 pits which were identified by the Rothschild report as ripe for privatisation. Ministers of course are washing their hands, and claiming that the rundown of the industry is a result of market forces and that there is no point in digging coal if there is no one willing to buy it. It has been demonstrated many times in the House that that simply is not true. The market has been rigged against coal, and the main features of that rigged market are well known and have been well aired--the dash for gas, the nuclear power levy of a billion

Column 749

pounds-plus, the protected market share of the nuclear power industry and the continuing nonsense of the French interconnector. There are questions of a possible conflict of interest for the senior management of British Coal, and whether they end up with an agreed market with some profitable collieries which they will look to purchase. Clause 1 of the Bill will establish the Coal Authority, which I have no doubt will be another quango stuffed with Tory grandees, including probably some from the other place.

The Bill instructs the authority to sell all surplus land. British Coal owns 250,000 acres of land throughout Great Britain, some of which I suspect may be valuable. I suspect that the Treasury will be looking for substantial returns from the sale of much of that land. I also believe that a number of proposed sales of land from British Coal to individuals have been stalled for a couple of years prior to privatisation.

A substantial amount of land is owned by British Coal in my constituency, particularly at Haydock. A number of small businesses have leased properties on the site of the old colliery workshop at Haydock. Many of those properties are in a poor condition, and British Coal has always refused to maintain them. One of the small businessmen at Haydock has tried for months to buy the freehold of the property that he is leasing to improve his factory, its output and the conditions of his workforce. However, it has been impossible for him to reach any agreement with British Coal.

wrote to the Minister for Energy last year about the situation. While he sympathised with me, as he often does, he went on to say in his letter of 31 August 1993 :

"However, as I am sure you will appreciate, decisions on the appropriate disposal of individual sites are entirely a matter for British Coal."

When the authority is set up, I suspect that it will no longer be a matter for British Coal but for the Treasury. Certainly, I expect that the Treasury will be interested in the outcome of the sale of that land.

I want to turn to the issue of opencast mining. The north-west in general, and my constituency in particular, has lost deep mining, and people are greatly concerned about the opencast mining aspect of the Bill. Presumably British Coal's land bank is to be sold off to the highest bidder. Those who purchase the land will expect to be able to mine it, irrespective of the views of the local people who will be affected, because opencast mining is a highly profitable exercise. In my constituency--particularly at Billinge and Garswood--there has been a number of applications for opencast mining during the past few years. That opencast mining would have gone literally to the precincts of those villages, and it would have had a dreadful impact on the lives of the people of those two communities. The villagers have resisted the propositions ferociously and the council has always backed them. I trust sincerely that that will continue in the future.

If an application were received for opencast mining in the St. Helens and Wigan area, the response of the people of those communities would be that if the nation requires coal, the place to get it is Parkside colliery. The colliery has millions of tonnes of coal lying there and millions of pounds' worth of valuable machinery with which coal can

Column 750

be extracted. An argument which is unacceptable to the people in my area is that the country requires the coal. If the country requires it, the place to go is Parkside.

Another issue to which I would like to refer briefly because time is running out--is the issue of subsidence. Many hon. Members are concerned about the impact of subsidence on areas where mining will continue. My concern is about the areas where coal mining will no longer be going on. What happens to those areas?

Hon. Members who have dealt with British Coal over the years would be only too willing to say that they have not always had an easy ride. Often, it has been difficult to get British Coal to agree adequately to compensate individuals concerned. We must now deal with the Coal Authority. In the past, we have dealt with a north-west area board but I suspect that we will now have to deal with the coal authority in London. I suggest to the Minister that the north-west is entitled to an area office so that subsidence claims may be dealt with locally.

This is a bad Bill. I sincerely trust that, if it is not rejected tonight, major amendments will be imposed on Report.

6.37 pm

Mrs. Elizabeth Peacock (Batley and Spen) : I start by apologising to my right hon. Friend the Secretary of State and hon. Friends on the Front Bench for my absence during the opening speeches. As they are probably aware, I was leading a deputation of people involved in the textile industry in West Yorkshire to the Department of Trade and Industry. As the discussions there took longer than was expected, I decided not to return to the House.

My interest in manufacturing, and particularly in the coal industry, is well known in the House. My more recent interests in the coal industry are listed in the Register of Members' Interests. In my view, coal has a positive future. It will move back to the centre of the British energy supply industry in the long term if it is part of a well-thought energy policy. The Government must have such a policy to regain the country's confidence and they must support the remains of an important industry by retaining its ability to use the massive coal reserves. Within that policy, a free and competitive market will, with other forms of energy, ensure that there is a viable British coal industry.

Coal will be able to compete in terms of quality, price and service. However, at present the British coal industry is heading towards a crossroads. If the wrong turning is taken, the industry will disappear into the realms of industrial archaeology. With successful privatisation--I say to my hon. Friend the Minister that I support the privatisation aspects of the Bill--and restructuring, the industry will rejuvenate and grow. To achieve that, the industry must be imaginative and take note of past mistakes.

For centuries, coal has been the main energy source for Britain. Much of our industry today was founded on coal during the industrial revolution. The city of London was rebuilt after the great fire, and St. Paul's cathedral would not exist today but for a levy on all the coal which was consumed at that time in London. Yet despite massive reserves under Britain, we are running down our indigenous production and turning to gas, which everyone accepts has a limited life. That is contrary to all

Column 751

international trends. World production levels have risen from below 2,800 million metric tonnes in 1980 to more than 3,500 million metric tonnes in 1992.

For more than a century, the industry has been the source of intense political, social and commercial controversy, often to its severe detriment. In the 1930s, the industry needed restructuring because there were too many pits, there was no investment and productivity was poor. Politicians from all sides of the political spectrum then began to consider nationalisation as a solution. At that time, Harold Macmillan supported that route in his "Middle Way" publication, proposing

"an industrial structure with broad strategic control in the hands of the store and the tactical operation in the hands of private management".

That was an admirable strategy but we have never perfected it. I have always believed that the state has a part to play in the energy market, which is currently rigged against coal. The announcement of the White Paper last year gave the Government an opportunity to resolve some of that rigging, but no such action was taken.

Nationalisation in 1947 brought about the required reshaping and reinvestment. In the 1950s and 1960s, the National Coal Board, led by men of vision, Lord Ezra and Lord Robens, perhaps with the help of the combative union co-operation of Lord Joe Gormley, made great strides to increase production and, more importantly, improve safety. We have heard quite a bit about safety this evening.

However, nothing stands still. The advent of cheap oil from newly discovered reserves, the development of nuclear energy to produce electricity, and the availability of vast supplies of natural gas revolutionised the energy market. We are still suffering the consequences-- some of my hon. Friends will say that we are still enjoying the benefits.

State-run organisations have been shown to be almost incapable of redirecting and restructuring themselves. That was certainly true of the British coal industry. By the 1990s, even with the intervening industrial relations dramas of 1974 and 1984, the industry's structure was unsuited to the marketplace. Overheads were too high, there was too much bureaucracy and poor productivity, production costs were comparatively high, demand was falling and the market share had been reduced. It was a typical demise of a demand-driven rather than market-led industry.

Albeit with hindsight, I believe that the coal industry, with its diverse structure, difficulties in production and social importance to hundreds of communities around the country, should have been privatised before gas and electricity.

The Government's review of their pit closure programme, resulting from my right hon. Friend's devastating announcement in October 1992, has not saved many of the pits that were threatened with closure. However, there is an outside chance that new operators may wish to reopen some of the redundant pits if, when they are ready to be licensed, any of the machinery for extraction from those mines is left and if the bottom of the mines are not flooded.

By 1995, we shall be down to a small number of pits, despite massive increases in output per man from 504 tonnes in 1982-83 to 1, 611 tonnes in 1992. I appreciate the fact that, with a falling market and increasing productivity, that has been one of the problems. Because the miners did

Next Section

Home Page