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Mr. Ronnie Campbell (Blyth Valley) : Mr. Deputy Mayor--I am sorry, Mr. Deputy Speaker, I was just trying to promote you. Mr. Deputy Speaker, one of the aspects of privatisation that worries me is safety in the privatised industry. Having worked down the mine for 27 years, and for 14 years at the coal face, I have a pretty good idea of what happens.
I have heard stories about small private mines and what happens at them. We all know that entrepreneurs will buy the collieries, but I hope that some of them are decent people. It remains to be seen. However, some of them are worthy of watching. We must watch them carefully because safety down the mines is paramount to people working there and their families above ground whose loved ones have been lost and buried and families have become fatherless. If I may, I shall cite a couple of frightening stories of what safety means in a private mine. A few years ago, the mines inspectorate turned a blind eye, but it has a big role to play in the future of the coal industry. In one private mine, the haulage rope snapped and because a new one could not be afforded, a knot was tied in the old rope and the haulage system was started up and the rope was tied to a truck at the top of the bank. The knot did not hold and a man was killed.
Another instance which occurred in a private mine was nearer to my home. A private mine, which employed about 15 men, bought a cheap, large electricity socket to be used down the mine from a scrappy somewhere and plugged it into the system in the mine to get the machinery going. Lo and behold, within 12 hours, the plug caught fire and almost caused a fatality. Six or seven men almost lost their lives and one man was rushed to hospital, never to go back down the pit again.
We have heard a lot about the £20 billion that has been invested in the collieries over the years. I said to the President of the Board of Trade earlier that some gross indecencies have occurred over the spending of that money. I mentioned the transport system, which was put in the pit yards and left for over two years, accruing a bill for the colliery of £300,000. We only discovered that when we fought to save the colliery because the books had to be opened.
I could cite incidents, Mr. Deputy Mayor--sorry, Mr. Deputy Speaker, I am thinking of the council. It must be your dickey bow. I could cite incidents where the worth of
Column 777big machines, trying to be proved in the heading, have been pulled out into the roadways, pushed aside and covered up, and the cost of that machine has been left to the collieries. Wooden chocks and roof supports have been left on the face to rot, never to be recovered. That is where that £20 billion was lost. Pieces of machinery were never recovered and it was never attempted.
Opencast is a big subject in Northumberland, as it is in the whole country. I tabled a written question two months ago asking the Minister about the state of play regarding opencast in Northumberland and Durham and how many tonnes of coal were available. The answer was 16.5 million tonnes of coal at approved sites in Northumberland and Durham. That is the answer to the earlier question. We are not talking about entrepreneurs taking over mines, but about entrepreneurs taking over opencast.
Two or three Conservative Members spoke violently against opencast. They should not think for one minute that we will avoid opencast, because the whole purpose of the Bill is to move from deep coal mining to opencast. We have seen that happen in Northumberland. We even have the figure for Northumberland--16.5 million tonnes of coal. Anyone taking on the mines in Northumberland will get that coal, but the pits will shut.
We have seen what has happened in Wearmouth and we do not want that to happen in Northumberland. We have seen what has happened in the workshops and we do not want that to happen to the workshops in Northumberland. Ellington colliery is on the fringe. I hope that we can save it and that there is a future for it, because there is a lot of coal there. I have my doubts and I have voiced them not only to the entrepreneurs who will buy the pit, but to people in the industry. I believe that the entrepreneurs want opencast. If the people of Northumberland and Durham want to see the end of the industry, they will see the beginning of a new one--opencast from one end of Durham to the other end of Northumberland ; dug up every inch of way. That will include the constituency of the hon. Member for Hexham (Mr. Atkinson). He will have to face the wrath of his constituents. We should chuck him in and cement him up as well. The deadly side of opencast is the prospect for the people of Northumberland, because that is what the Bill means.
Sir Trevor Skeet (Bedfordshire, North) : This is a great opportunity to say one or two words on the mining industry. Looking back over the years, considering the Reid report and the Samuel report, I never envisaged that it would come to the stage when the mining industry of the United Kingdom would be so attenuated. I can remember when production was about 44 cwt of coal output per man shift and now it has exceeded £10 milion tonnes per annum. The miners have done a great job over the years and I am sure that, in the segment where they will be operating, they will continue to do good work.
I have never been able to understand how people can work underground for their whole lives and then recommend to their sons that they should do that as well. However, those miners have been close to the ground of such matters ; they have done a superb job and I am glad that the President of the Board of Trade has decided that
Column 778the pension plans must be considered carefully and that the money which we have been pouring into industry for years--£20 billion, of which about £8 billion has gone into machinery--has been a fitting investment in an industry which has now reduced in size.
Mining is not the only industry which has fallen into disrepair over the years. The steel industry has been truncated. I remember that at one stage the production was to be about 35 million tonnes per annum in the United Kingdom and is now well down at about 12 million tonnes. We have seen one or two private sector companies almost eliminated because of the recession, and disrepair comes to many industries if there is not a market.
Mr. Rogers : The hon. Gentleman said that seeing the mining industry come into disrepair makes him sad. I am sure that it does. Surely his memory does not stop at a particular time. Does he remember how bankrupt and how rotten the coal industry was in private hands? Does he remember how the royal commission in 1918 said that it could not leave the industry in the corrupt hands of the private coal owners and that it had to be nationalised? That took a long time, and into public ownership came a bankrupt industry that was in complete disrepair, because profits were being sucked out of it. Being a public industry turned it round and made it the efficient industry it is today.
Sir Trevor Skeet : The hon. Gentleman will realise that the first step was the taking over of coal rights in 1938. It was not until 1947 that it was decided to nationalise the whole industry and to put it into Government hands. The state has controlled the industry for a long time.
Instead of growing from strength to strength, the industry has dwindled because the market has reduced. That is not the miners' responsibility. British coal was so costly that it could not sell abroad. British coal is probably the cheapest to produce in Europe, compared with German coal and so on. However, the Europeans will accept it only in very small quantities. We want coal to be imported because of the steel industry and other requirements. We find that it is essential to blend it. The state has not been successful in running mines.
The industry has absorbed £20 billion over the years, and it has not been a success. Is that a recommendation for the state to run an operation? Would it not be much wiser to put the industry into the private sector where there are high standards? The private sector has been transformed. It is much more caring, much more responsible and much more adept.
Let us consider Australia and the United States of America. Hanson Industries runs the Peabody company in the United States. It has some problems, I agree. Shell and one or two other companies still have interests in Australia. Many companies successfully operate out there. They are able to bring coal to the United Kingdom at very much lower prices. Of course, the coal industry is becoming more competitive, I hope that, over the years, with the change of ownership, it will be remarkably successful, but that will not be easy. My hon. Friend the Minister does not pretend that there will be an easy ride for it.
Let us consider the era of the Labour Government and remember when Lord Robens was in charge of the National Coal Board. He closed more pits than were ever closed by the Conservatives. As chairman of the National Coal Board, he was primarily concerned to make the industry viable. He faced exactly the same problem that we
Column 779have today--a declining market. In the early days, we used to produce gas from coal. That was stopped. Later, coal had a diminished market for electricity production. We now have the additional problem of gas turbines. They are remarkably successful and can be brought into operation very much faster than other methods.
Mr. Rogers : The record should be straight in respect of colliery closures under a Labour Government. In my constituency of Rhondda, at one time there were 63 coal mines. Most collieries were closed during the period of a Labour Government, but it was a process of rationalisation. Very small coal mines were integrated. In a dozen large collieries, the same coal take was worked. It was a process of rationalisation, not of trying to destroy an industry. The hon Gentleman completely distorts the statistics. That process happened in every coalfield in the United Kingdom.
Sir Trevor Skeet : I appreciate that the hon. Gentleman likes rationalisation and that it should be done gradually. In the Rhondda valley, much investment was brought in from abroad. In that area, or fairly near to it, Japanese investment produced wirelesses and other electronic equipment. Over time, certain industries were developed because others were retired. That is the ideal way to do things, but if the market is eroding at a fast pace, what are we to do? If miners are prepared to produce coal in abundance and to build stocks to a gigantic height over the years and we then find that we cannot sell that coal either in Europe, elsewhere abroad or on the local market, what should we do? Should those miners produce still more coal which will remain totally unsaleable? Perhaps, in order to reach a viable size, the state industry will have to do what the private sector has done and cut itself to a suitable size at which it can operate.
Mr. Ronnie Campbell : If we did the same as we do in the nuclear industry and subsidise coal stocks to the tune of £1 billion a year, we could sell it abroad more cheaply, just as our competitors in Australia, America and South Africa, who are subsidised, do.
Sir Trevor Skeet : The hon. Gentleman talks about subsidies. The industry has had enormous subsidies to the tune of £20 billion over the years. Those subsidies came from the taxpayer. The hon. Gentleman must take that point into account and be realistic. We do not like a local industry to be shut down or diminished, but that is sometimes inevitable because of the state of the market. However, the miners are not responsible for that ; we should blame the management, that is British Coal or the National Coal Board, as it was. The experiment was tried for many years but it was not satisfactory. There is no way out of our plight.
Mr. Campbell : What about the nuclear levy?
Sir Trevor Skeet : The hon. Gentleman mentioned the nuclear levy. I was a member of the Committee which considered the electricity legislation. I argued strongly, with the support of the Labour party, that we should keep the nuclear industry in state hands because of the implications and repercussions that were likely to arise. It had to be made a viable industry. It was decided that the best way to do that would be to have a nuclear subsidy or a nuclear levy. That is set out in the Act. The chairman of
Column 780the nuclear power body has recommended that, over the next two or three years, it is to be discontinued. Therefore, the industry will cease to be subsidised. It will be as competitive as any other section of private enterprise.
Over about three or four years, I would welcome the elimination of the so- called subsidy, but we should remember that money has to be put aside for the retiring of nuclear power plants. We live in a competitive world. Electricity is produced not only from coal. A little is produced from oil, and more and more is produced from natural gas, which seems to be the in thing these days. The various products must be competitive.
We are asking the private sector, "If you take over certain branches of the industry, can you compete successfully?" They say that they can. In the five areas in which licences are to be granted, some of the deep mines and some of the opencast systems should be linked. A combination of both would make them satisfactory. The hon. Member for Blyth Valley (Mr. Campbell) mentioned opencast mining. Opencast mining has produced about 60 million tonnes of coal. Much of the mining in the United States of America, Australia, South Africa and elsewhere is opencast. We must compete with that. Mining in the United Kingdom is principally underground, and it is very expensive.
With regard to opencast mining, hon. Members should remember that we have not only the precedent from abroad but the profitability of it. If we had opencast mining, we would be able to compete with South Africa, Australia and the United States. We would be able to compete with Peabody. Hon. Members should bear in mind the fact that opencast mining is not eliminated, although there will be continuous planning difficulties to get an operation going. In view of some of the restoration work that has been undertaken over the years, full congratulations must go to the companies involved for what they have done to reinstate the land.
Mr. Campbell : The hon. Gentleman is talking about a subject which I have closely monitored in my constituency. Coal in opencast mines can be reached at any time in the next century because it can be dug up quite easily. But once mines are shut, millions of tonnes of coal disappear. If it is too expensive to open new mines, the coal will disappear, never to be mined again. The hon. Gentleman is advocating opencast mining and locking away millions of tonnes of coal underground.
Sir Trevor Skeet : I am obliged to the hon. Gentleman for making that point. Of course, the coal is readily recoverable--the overburden is removed and the coal is taken out when it is needed. My primary aim is to keep miners in jobs. I am sure that a change of ownership would be much more successful because it would make the industry more prosperous.
I shall refer briefly to one or two points that I have in mind. These are problems largely for the Government. There are enormous stocks at the pithead and in the hands of the power-generating companies. When the new licensees take over, what will be the allocation for the liabilities of those stocks because they could be a burden on the market for many years? I agree with everything that has been said about the problem of pollution. The polluter pays, and it could be expensive. Will the licensees be responsible for such problems?
Column 781Anyone who takes over an area will be concerned about subsidence. Subsidence can occur at any time in any area. Some of the developments are near towns and villages and can be very expensive. During the passage of the Electricity Bill, I told the Government that one of the principal difficulties in having nuclear power in the privatisation programme would be the unlimited liability which could visit the companies. Will the licensees who are prepared to take over and receive grants be fully compensated for the subsidence which is likely to occur in 20, 30, 40 or 50 years?
Another point that I shall raise briefly is the size of the market which is left. Over the years, we have heard many analyses. A few years ago, Rothschild talked about production in the United Kingdom falling to about30 million tonnes, and other estimates have been given. I hope that we will not take the mining industry down too far. If we do, it will cease to be as viable as we hope it will become, and it may become more economical to buy more coal of the right quality from abroad.
Now that we are fully participating in Europe, and as most EC countries do not have high-quality coal of their own, I hope that an earnest attempt will be made to pressure the Europeans to take some of our indigenous material. Who are the European producers? Coal is produced mostly in Germany, with small amounts produced in France and Spain. Most parts of Europe do not have coal, and we have the benefit of large quantities of it. I do not want to see resources wasted over the years. If we can get our costs right, and the Minister is determined to secure this, I hope that we will have a thriving industry in the future.
Mr. Peter Hain (Neath) : The question we must ask is, why is the Bill being introduced? Is it being introduced because it will bring about greater efficiency? No. Productivity has increased by 500 per cent. since the industry was nationalised and rescued by public ownership in 1947. Let us remember that in 1947 private mine owners begged the Labour Government to take over the mines and nationalise them, as was done. Recently, productivity increases have been spectacular, so the Bill is nothing to do with efficiency. Is the Bill being introduced to save taxpayers' money? No. If we examine its financial effects, we see that there is a continuing subsidy of at least £1 billion until the end of the century--£1 billion will be used to prop up this private industry. On top of that, the Government have provided grant aid totalling £3 billion. Also, literally billions of pounds have been spent on redundancy costs for miners who lost their jobs. The 26,000 miners who have lost their jobs since the President of the Board of Trade started to sentence the industry to death in October 1992 have cost the state £234 million in terms of unemployment benefit, lost revenue, and so on. The costs of subsidising a privatised mining regime are mounting. There are other costs as well. Documents in the Library show that it costs £1 million a year, on average, to keep pits mothballed while awaiting privatisation. The new Coal Authority established in the Bill will not be cash-limited. That is made perfectly clear in schedule 1, which states :
Column 782"The Secretary of State shall, in respect of each accounting year, pay to the Authority such amount as he may determine to be the amount required by the Authority for the carrying out during that year of its functions under this Act."
It is not cash-limited. Potentially, a large amount of money is being made available to the Coal Authority to prop up this privatised regime.
What we will see is a total cost to the taxpayer that is many times more than what the Select Committee on Trade and Industry said would be required to subsidise British Coal over a couple of years so that it could become fully competitive and compete on a level playing field with the rest of the world. Therefore, this is not about savings to the taxpayer.
Is it about a coherent energy policy? Of course not. If the coal industry is privatised, it will pursue its own narrow private interests, as the electricity industry has done since it was privatised. In turn, privatisation of the electricity industry has been responsible for the death of the coal industry over which the Government are presiding.
Privatisation of the energy industry has been responsible for the damaging effects on all our energy resources. About 15 years' worth of our precious gas reserves in the North sea oil shelf have been depleted as a result of gas-fired power stations and the dash for gas, which is totally unsuitable as a fuel for a power station base load. Our reserves have been wasted. The Government are depleting our precious natural gas reserves, which should be directed at domestic and industrial heating.
Sir Trevor Skeet : Will the hon. Gentleman give way?
Mr. Hain : No, I will not give way. Some of my hon. Friends want to speak and the hon. Gentleman has not been here for the whole evening, as many Opposition Members have.
The Bill is not about a coherent energy policy--that certainly would not come from the Government. They have allowed coal imports to rise by almost five times since 1983, from 4.5 million tonnes to 20 million tonnes a year. That is damaging to the balance of payments and causes difficulties for our economic policy.
The Bill is not about energy policy. Is it about protecting the environment? No, because one of the consequences of privatisation will be the acceleration of the dash for opencast mining at the expense of deep mining. We have seen all the destructive environmental consequences of that in recent years.
In my constituency, it is interesting to see the contrast between British Coal's applications for opencast work at Selar--one of the largest sites ever to be worked in Britain, at the top of the Neath valley--and the situation at Tower colliery, the last British Coal pit in south Wales. Tower has been slimmed down, ready for privatisation, and its production has been cut as opencast mining has been opened up. That gives some idea of the real priorities of the privatisation of coal.
The Bill is not about any of those things. It is really about giving freebies to the friends of the Government who want to set up companies to take advantage of the privatisation of coal. It is also about the long- standing vendetta of the Conservative party against the mineworkers and, in particular, their trade union. It is about the dogma that allows crucial and strategic industries which are vital to the nation's interests to be subordinated to the concerns of shareholders, rather than to act in the wider public interest.
Column 783The way it has been done is a scandal. The Government have pursued their strategy absolutely ruthlessly and have slimmed down the coal industry as a matter of deliberate policy to create a small industry for which the private sector would bid. I give the example of Blaenant, which was the last pit to close in Neath. My agent, Howard Davis, used to work there. The pit employed 600 men, and there is a familiar tale in what happened to it. For a long period, it was profitable. Then, 18 months before its closure, a new management team was brought in. That team set about destroying industrial relations and creating turmoil in the pit. It quickly slid from its profitable state to a deficit within six months of the team's taking over. That gave a good excuse for the pit to be closed.
An under-manager at Blaenant was so disgusted by what was happening that he walked off the site in disgust at his senior managers, a practice unknown in south Wales. The conditions that been created for the pit to close. How often have we heard that tale regarding pits across the country as the ruthless drive towards privatisation has been pursued?
The Bill means that we are now on the brink of one of the biggest scams of the century. The same managers who have run down the industry are now to bid for it, and they will reap the benefits as private managers and owners in a new private coal industry. The preparation for the privatisation of British Coal stinks to high heaven. We are seeing nothing short of a national scandal, where all the social costs of private mining are to be dumped on the state while the private owners skim the industry and make profits from it. The Bill is about two things--protection of the past and planning for the future. So far as the past is concerned, I believe that the Bill does not give adequate protection for pensions, as was mentioned earlier in the debate. Representatives of the mineworkers pension scheme have made it perfectly clear that the Government have not satisfied them that they are interested in the future of miners' pensions. The issue of subsidence was addressed earlier, and that subject is treated absolutely cavalierly.
The pollution from old coal workings is also inadequately dealt with. For example, the Pellenna river, which flows through the former mining village of Tonmawr in my constituency, is a deep orange-brown colour. The river is literally disgorging into the surrounding rivers and the sea thousands, if not millions, of gallons of water which is heavily polluted with iron and sulphur. The pollution is ultimately seeping through into the water table. Lots of old mine workings are deeply polluted and there is no guarantee that the Bill will give local communities the protection that they need.
Another example was brought to light when representatives of Neath angling club approached me recently and took me down to the Neath river to show me a patch that was heavily polluted by an old Ynysarwed mine which closed in 1938. The pollution has just come out into the Neath river. I approached the National Rivers Authority, Welsh Water and British Coal, none of which wanted to know. If British Coal does not want to know about a private pit that closed in 1938, imagine a private regime wanting to take responsibility for that. Yet that case shows that pollution from a pit that closed almost 60 years ago can suddenly come out of the ground and infect the local environment.
The Bill provides protection for neither the environment nor the many thousands of individuals and families who
Column 784have benefited over the decades from the Coal Industry Social Welfare Organisation, the future of which is deeply threatened. A sword of Damocles hangs over it as a result of the Bill, which abolishes the Miners' Welfare Act 1952, through which CISWO was funded from within the industry. The Bill provides no alternative means of funding.
For how long will concessionary fuel continue to be provided? It is vital to the livelihood of many miners' widows and former miners' families, but it is not guaranteed in the long term.
I invite the Minister to come to my constituency, which has more private mines than any other constituency in the country. It has 36 drifts and levels employing from two to 140 men, totalling 450 miners. Ironically, that is double the number of miners now employed by British Coal in the whole of south Wales. I have strongly supported private licensed mines. I have appealed to the Welsh Office to give them grant aid and supported Ryans colliery's successful application to reopen the Vale of Neath railway line to transport coal by rail rather than clog up the roads. Under the Transport Act 1985, that mine received a grant of more than £6 million for that development.
Local private mines are an important part of the local economy, but almost all of them hark back to the turn of the century. In the past two years in my constituency, two miners have died and one narrowly escaped death and was paralysed from the waist down. Conditions are dreadful. Miners have no showers and, in Crugau colliery in particular, some are not even paid with proper payslips, which contravenes contracts under employment law. At Pentwyn colliery, miners who were working over the Christmas period according to their basic conditions of service were about to take the normal Christmas break to which they are entitled under law when the private owner simply sacked 20 of them. That is the kind of thing that will happen under privatisation.
Ponies are still used to bring the coal out of some of the collieries in my constituency. Forest colliery opposite my home in Resolven has two ponies called Amos and Prince, while Nant-y-Cafn colliery near Seven Sisters has a pony called Turbo. Pentwyn pit in Ystalyfera also has a pony. People do not believe that such conditions exist in 20th-century Britain. Those conditions of last century will come back with a vengeance if the Bill is enacted. The safety problems in those pits are enormous. A survey by the Health and Safety Executive compares accidents in private pits with those in British Coal pits per thousand employees. A miner in a private pit is 23 times more likely to die than a British Coal miner. What reassurance can the Minister give on that? The Bill gives no reassurance. It is an exercise in going back to the future, as the finest deep-mine industry in the world is demolished, men's safety is threatened and lives are risked on the altar of the free market mania that has failed the rest of the British economy.
Mr. Eric Clarke (Midlothian) : I shall be brief because we are at the tail end of the debate. My hon. Friends have covered many issues, including the Coal Industry Social Welfare Organisation, Mines Rescue, pensions and the importation of coal ; therefore, I shall deal with just two matters.
Column 785I have written to the Minister about the composition of the Coal Authority, which will have many powers if privatisation goes ahead. In the context of controls on opencast extradition, will it give licences to all and sundry or will that be pre- empted by the overall sale of large packets or areas of land with opencast potential? With a nod and a wink, potential buyers will get a licence anyway. Will privatisation be a bonanza for the asset strippers or cherry pickers who will concentrate only on opencast mining?
The Minister will not have the answers to those questions. We all worry about who will make decisions. I hope that they will not be made by the people who run British Coal or by ex-members of the British Coal board of management. There are qualified people in the industry and in the mining communities. Ex-miners, mines inspectors and even academics, university professors of mining, would have some credibility.
Sir Trevor Skeet : Will the hon. Gentleman give way?
Mr. Clarke : No, because I have just a short time in which to make my speech and other hon. Members wish to take part in the debate.
Sir Trevor Skeet : I thought that the hon. Gentleman was giving way.
Mr. Clarke : I said no ; there was a misunderstanding.
I also wrote to the Minister about coal mine abandonment plans. I do not think that he is paying attention to me. Those plans are not being left in the areas where the extradition took place. In 1950, the Coal Board was given the right to take all the abandonment plans into the relevant areas. That was because the area representatives said that it would be handy to have these working plans of exhausted mines in one area to which there was access. They were in the Edinburgh area, but they are now in Midlothian, in my constituency. However, British Coal has now gathered them all together and taken them to Bretby.
It may be useful to have all the plans under one roof, but it is difficult for a mining surveyor or a private developer, who must examine such plans before development is allowed, to have access to them. I do not want those plans to end up under the jurisdiction of Group 4 or some such organisation, because if that happened people would have to pay to look at them. Half of them would probably go missing anyway--we know what happened to prisoners. Even academics who want to study the plans would not have access to them. Perhaps the Minister will consider that point.
I asked the Secretary of State for Scotland about the matter and he said that it had to do with British Coal. That is not the case, because these plans relate to the heritage of the Scots, the Welsh, the people of the north-east and others in Britain. The plans do not belong to British Coal. They belong to the people, and people should have access to them.
Anybody who knows the technicalities will appreciate that colour slides are not good enough. We have to look at the plans carefully because their age makes the shades appear to be on top of each other. Obviously, it is a complicated and difficult plan and it is possible to find things one was not looking for. I am asking the Minister
Column 786whether the Coal Authority could be responsible for these matters and whether the position could be reversed so that the plans are sent back to Scotland or elsewhere.
Like many other people from Scotland, I feel that the Bill is a bit of a post mortem on the coal industry. A great industry has been decimated, and Conservative Members have voiced many inaccuracies today.
The miners were heroes in the first and second world wars. After the second world war, the coal industry gave up. The miners worked five-day weeks and 11-day fortnights. They produced coal for Britain and sold it to industry. They put British industry back on its feet. British Coal sold coal at a lower price. It imported United States coal and sold it at local prices to keep industry going. It could have used market forces to produce a surplus and it would not have had to take out the loans that were a millstone around its neck for many years.
I spent some time in the Library going through British Coal accounts dating back to 1979. There were many loans, and the interest on them was a millstone around the industry's neck. I know that, because every time we went to British Coal on an organised basis to negotiate wage increases, the management said that the company was not profitable because it had to pay back massive loans.
I will not bore hon. Members with the figures, but I can assure them that they go up and up. Page 8 of the NCB annual accounts for 1979-80 makes it quite clear that the national loans fund was on a 15-year term and that the borrowing was too inflexible to allow the nationalised industries to act commercially. We had blinkers, handcuffs and financial embargoes on the nationalised coal industry, which was not working properly.
Let us get the whole issue straight and put the blame where it belongs. Privatisation is a political decision, not an economic one. It is the politics and economics of madness to close down such an asset. [Interruption.] Yes, they are closing it down ; it is a systematic closure. There is no argument about it. Hon. Members can go and see how many coal mines will be privatised.
Like many other people who spent their lives in the coal industry, I have nothing of which to be ashamed. It was an honest, hard-working and honourable job and the miners were the finest men I have had the honour to work beside. Many of them are retired now and remain in the communities. I am looking after their interests through the pension funds and elsewhere.
If the privatisation goes through and many other things happen, I want those people and their families to be protected.
Mr. Martin O'Neill (Clackmannan) : In the 20 months since the general election, we have had many debates on coal, and many of them have followed the same track. We have had paving legislation, announcements on closures, calls for Government action, belated and irrelevant responses from the Government and disgraceful handling of safety arrangements. Now we reach what Conservative Members will regard as the final stage--the privatisation of coal and the Government's washing their hands of the whole issue.
In the immediate aftermath of the miners' strike, the Government ceded control of the coal industry to individuals in the corporation to lick it into shape in preparation for privatisation. Some said that the shape
Column 787would consist of 12 to 14 pits employing about 10,000 men. Others wanted to sell it into private hands--perhaps their own--and have as big an industry as possible. In the event, the debate turned out to be academic, because the structure of the privatised industry was determined by the availability of cheap gas and subsidised nuclear power from France. As well as that, the electricity industry was privatised.
I seem to have been living on a different planet from Conservative Members, some of whom tell us that the privatisation of gas and electricity was the greatest piece of privatisation ever, while the other half tell us that coal should have been privatised before the other two. The Government's ceding of control and responsibility for the generation of power in this country is highly irresponsible, but that battle in many respects has been lost and we must try to make the best of a bad job.
In the period since the end of the strike, we have seen increased production, the cutting of costs and the reduction of prices in the coal industry. In the first week back at work this year, a figure of 10.26 tonnes per man shift was achieved for the first time ever. Last April, the figure stood at 8.23 tonnes per man shift. As has been pointed out, the record has been broken nine times in the past 10 months. Indeed, at Whitemoor colliery in the Selby complex, some 280 men cut 42.8 tonnes per man shift.
In the northern group alone, up to November last year, four pits were producing at less than £1 per gigajoule. In my constituency, the Longannet mine has been successful in achieving figures for price and quality that have enabled it to sign a five-year agreement with Scottish Power to take 2 million tonnes per annum from the colliery. Those are not the achievements of an industry on its knees. Those figures for cost reduction and production are not evidence of an industry that has lost its way. They are testament to effective public ownership. They are a vindication of the motives of those who nationalised the industry in the first place.
The Attlee Government nearly half a century ago saw the appalling record of the private coal owners, as my hon. Friend the Member for Wansbeck (Mr. Thompson) pointed out to us from his personal experience of working in what are alleged to have been the glory days of private ownership of the British coal industry. We tend to forget that, in the days when it was nationalised, coal was used for heating in almost every home in the country, not merely the 2.5 million of today. It was the fuel source for our railway system and our ships. It provided the coke for the gas and steel industry. It fuelled our electricity generation.
With markets like those, it must have taken a particularly spectacular form of incompetence in the private owners not to be able to run their industry at a profit or in a manner that was safe and which afforded the work force- - [Interruption.] Fifty years ago, Conservative Members were not arguing in favour of private ownership of the coal industry--they were advocating public ownership. Fifty years later, the performance of the coal industry is such that members of the Labour party--the advocates of public ownership--have nothing to be ashamed of.
There are other aspects of the coal industry. Indeed, the remarks of my hon. Friend the Member for Neath (Mr. Hain) a few moments ago showed that the safety of private mines stands very bad comparison with the figures and conditions that prevail within British Coal today, especially if one considers that, in 1946, 1,000 miners a
Column 788year lost their lives. Between 1933 and 1942, the fatal accident rate was 1.3 deaths per 1,000 miners. Within the first five years of public ownership, that was halved. Today, it is now 0.13--one tenth the rate of 50 years ago.
Safety in private mines, then as now, is far worse. The accident rate is five times as bad in the private service. When we hear about the accidents in mines and about how good the record is, it nevertheless requires us to pay tribute, as my hon. Friend the Member for Bolsover (Mr. Skinner) did tonight, to the Mines Rescue service. Some of us remain to be convinced--we shall raise this in Committee--of that service's future. It is not a cheap operation--and it requires sacrifices not only by employees but by employers in allowing their staff time off work to attend training courses and to be available whenever a disaster occurs. There must be guarantees about the continuation of that rescue service.
Under past private ownership, low priority was given to safety, but labour relations were also deplorable. I refer not only to disputes but to the demeaning, casualised nature of employment mentioned by my hon. Friend the Member for Wansbeck. Contractors picked and chose their men, and security of employment, holidays and even basic days off were never granted in any systematic fashion. At the end of the second world war, there were few sincere voices raised against nationalisation. The view held today is that, since the industry is small and output low, it should be left to the private sector. The message today was that it does not matter who owns the coal industry because it barely has a future and will never regain its role even in electricity regeneration.
There are, however, vast reserves of coal in the United Kingdom. Estimates range from 40-plus years to an optimistic 230 years. Whatever figure is used, it cannot be disputed that, at current European consumption levels, Britain has half Europe's coal reserves and the cheapest deep-mined coal in the European Union. That point was made by the hon. Member for Bedfordshire, North (Sir T. Skeet), who mentioned the possibility of exporting United Kingdom coal to the European Union.
Perhaps it would be more sensible to make an arrangement with the French whereby they conceded third party status and we could use the interconnector to export British-generated electricity to Italy and Germany. That would be a more satisfactory way of using our surplus coal supplies. However, there is broad agreement across the House that the United Kingdom must make use of its reserves.
We all agree also that security of energy supplies will depend on a variety of fuels, and that the organisation of that portfolio will depend on proper investment levels being sustained. The danger inherent in a small coal industry under several owners is that there is likely to be insufficient critical mass to sustain the industry. We have already seen the impact on the mining machinery industry of the decline in the home market, which has severely prejudiced the prospects of companies in that sector competing in the international market for mining equipment. A small, privately owned industry would have great difficulty supporting research and development. Will the Minister for Energy indicate Government thinking on the coal research establishment, which is partly funded by European money in the form of the return of part of the levy on coal produced in this country? It would be ridiculous if the price of British coal were to reflect a levy
Column 789from which this country cannot benefit. The CRC is not mentioned in the Bill, but it ought to be considered. It is one of the main coal industry research bodies in the world, producing valuable research for not only the United Kingdom and Europe but companies worldwide. It is essential to the industry's long-term future that the centre is protected.
The prospect of a small, privatised coal industry has attracted little interest from international companies with the resources to fund research and development. It is feared that the private operators who are interested in entering the business will be too small or too heavily indebted to have the resources for research and development, and will merely pursue short- term profit by rape and pillage.
Hon. Members have asked about pay and conditions, safety and related procedures. No doubt we shall return to those matters in Committee and on Report. The Bill's implications for existing employees are, however, almost overtaken by the scale of the responsibilities to be shouldered by the Coal Authority and future owners. As drafted, the Bill gives little comfort to pensioners. Some members of the latest group of former workers have already been exposed to unscrupulous insurance salesmen, who have encouraged them to contract out of the industry and adopt other pension schemes. The Bill does nothing to resolve disputes with trustees about the disposal of surpluses, especially in the staff scheme. The assurances that have been given have not allayed the anxieties of existing staff about the safety of their contributions. If the Government are not prepared to guarantee future employment or redundancy arrangements, surely they can promise to protect the pensions of the existing work force from unscrupulous private owners.
An integral part of a mining pensioner's package is the concessionary coal scheme, but no one is yet convinced of the Government's present and continuing commitment to that scheme. I understand that the Minister answered a question about it yesterday. The matter will be scrutinised closely if and when the Bill enters its Committee stage ; I do not think that a one-paragraph answer was sufficient to allay any of our fears.
Those who do not know the industry and the communities that depend on it do not realise the significance of the concessionary coal scheme. It is worth between £650 and £850 a year to the 160,000 people who receive coal and smokeless fuel, and some £270 a year to the 40,000 who receive cash in lieu. The scheme costs about £150 million a year. A number of my hon. Friends have referred to the blatant attempt to buy out that entitlement, and the failure to spell out tax implications of such deals to the elderly pensioners involved. The unscrupulous approach adopted by some parts of British Coal in its attempt to shed the burden must be scrutinised far more closely. I hope that the Minister will at least begin to consider that aspect this evening.
Such problems affect all hon. Members with former miners in their constituencies. Because of the degree of interdependence in mining, and the failure of private owners and the social welfare system to look after the needy, miners have been required to provide for themselves in the past.