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Column 305Mainwaring, instead of joining the Tories and saving the Prime Minister's skin in November, just weeks after those great demonstrations. We would have had this Government out, we would not have been debating privatisation, and Ellington colliery, which the right hon. Member for Berwick-upon-Tweed (Mr. Beith) represents, would not be in the dilemma it is.
It is always worth putting on record how we reached the present position. It is a sad story, and the Liberal Democrats have played a significant role in assisting this lousy Government in placing the Bill before the House of Commons.
As for British Coal, I do not sing its song at all. In July 1992, before the announcement of the pit closure programme, my colleagues and I went to meet British Coal at Hobart house and I challenged Neil Clarke, who has seen two thirds of the pits disappear under his leadership. Why is not he getting two thirds less salary ? What is he doing with the same money ? Two thirds of his domain has gone. I hold no torch for British Coal and never have done. The management of British Coal--with the odd exception--are engaged in a conspiracy with the Government to line their own pockets. I have said several times in the House that they plan to run a few pits so that they will have little or no competition from outside to provide the captive market of 30 million tonnes to the power stations. I hold no brief for British Coal ; as far as I am concerned, it stinks, just like the Government. [Interruption.] I know that we are dealing with amendment No. 1. I know what it is all about and I do not need my hon. Friend the Member for Middlesborough (Mr. Bell) to tell me. The amendment asks the Government to instruct the Coal Authority not to shut any pits at this time. It is just a temporary amendment. We all understand that is what amendments are. I do not need any seminar or teaching.
We cannot talk about stopping pit closures, in however short a period, without considering the main problem. Yes, it is about saving time ; I am not against that. It is and always has been the lawyers' technique--if they do not have a case, they buy a bit of time as something might turn up.
That is what we have to do with amendments. Most are either wrecking amendments or buying a bit of valuable time. I am not against it, but I do it against the background of knowing that there are more important matters to consider after we have bought some time. We have to base whatever we say or do on a set of principles. I am pleased that my hon. Friend the Memberfor Livingston (Mr. Cook) raised the question of Boyds. Boyds was the Government's adviser. They used to quote Boyds at length. The President of the Board of Trade used to tell us what Boyds had said. Now Boyds tells us that, after privatisation, the price of coal per gigajoule will be
Column 306higher than it is under the public sector and will cost about £40 a tonne more. That is important and is worth repeating in the House. We also have to consider another problem when we are talking about saving a few pits. The amendment is about saving a few pits for a short period. If we have 170 pits, as we did at the end of the strike, and 10 per cent. of them are going through some bad geological problems, there are 160 stronger pits to carry the 10 weak pits, or in some cases it could be as many as 20 weak pits. There is a problem when we are down to 17 pits. How will a smaller number of pits manage to save the two or three that are going through a bad phase ? Selby coalfield, with the help of new technology and retreat mining has been able to produce coal at great productivity levels. Let us suppose that it went through a bad phase. Where are the strong pits to carry it through for a year or two ? That is how we dig coal ; it is an extractive industry. It is not like turning the electricity on in a factory.
The Government talk about getting the number of pits down to 17, 15 or 10 pits. Under privatisation, as soon as a pit runs into trouble, it will shut because there will be no others to bail it out. That is what happened in the previous privatisation and it is something which the Government have never considered. Once you run into trouble and you are not in the public sector, there is nobody to carry the weak pits that are experiencing difficulties at any given time.
Mr. Redmond : Will my hon. Friend care to comment on this point, as he has been around the industry just as long as I have ? The National Coal Board, as it was then, had an ABC hit list. Bentley pit was due to close, but was carried on the strength of the other Doncaster pits. It was one of the last pits in the area to shut down.
Mr. Skinner : My hon. Friend is absolutely right. He has been in the industry for a long time and he knows that, when pits have gone through a bad period geologically, they have always known that the other pits in the area can support them, at least for a while, but that no longer applies. So, more and more, the relatively small number of pits that remains will shut.
Mr. Ashton : Does my hon. Friend agree that that is exactly when the Government have done for the farmers ? People with bad land or hill farmers, many of them in the Minister's constituency, get subsidies. They have had massive increases last year, in some cases quite rightly. The whole industry is balanced ; it has the quota system and the milk marketing board. Why can the Government not do the same for the pits ?
Mr. Skinner : My hon. Friend is very perceptive. In an extractive industry that battles against mother nature every day, we cannot always be sure what will happen next. That is why the farmers get subsidies. I only wish that some of the subsidies went to the agricultural workers who have been offered 1.5 per cent.--below the rate of inflation.
Why can the coal industry not have set-aside schemes ? We have all talked about saving pits and mothballing pits. If we could have set-aside schemes for the agriculture industry--which have gone up from £100 an acre to £128 an acre in the past few weeks--why can we not have them for the pits ? Once the pits are privatised, the chances of
Column 307doing that are nil. That is why these are very sad days, as everybody connected to the industry knows and others have said. What sticks in my gullet is the fact the Government are importing German coal and shutting British pits. German coal is coming into Britain at £110 a tonne, yet the Government have shut down all the anthracite pits in Wales.
There is talk about the wonderful common market. It never bought a cobble of our coal. It ships coal into Rotterdam and launders it there, but it never takes any of our coal. We are still able to produce coal at about £38 a tonne, which compares well with the German price. Germany's steam coal is twice as dear as ours. We read that the Government are now calling on British taxpayers to provide £60 million so that the Spanish coal industry can expand. Their coal will cost twice as much per tonne as British coal.
The Government have a lot to answer for. They will hit the deck at the next election--I hope that it will be a Canadian-style whitewash. We should make no mistake--the coalfields may not cover the whole of Britain, but people out there who live miles from a coalfield understand the vindictiveness involved in shutting pits. As some of my hon. Friends have said, the amendment asks the Government only for a little extra time for some collieries.
We shall finish up with miners chucked out of work in Nottingham. We have a few remaining pits in Yorkshire, but there are none in Derbyshire, except for one in the constituency of my hon. Friend the Member for Bassetlaw (Mr. Ashton) which has been amalgamated with a pit in Yorkshire. We will allow the French to send electricity here and chuck miners on the dole-- equivalent to about 6 million tonnes of coal. We pay £9,000 year to keep a miner out of work. Yes, it is a tragedy.
My hon. Friends must face the argument. We have said that we will go through the Lobby to vote on this amendment and others, as we have done consistently in the past couple of days to save the industry. If we are prepared to go through the Lobby and vote against privatisation, it follows logically that we have a duty to tell the people now that when Labour gets back into power, it will take the coal industry back into public ownership. It is no use running away from that argument--it has to be faced. As my hon. Friend the Member for Bassetlaw knows, that argument cannot be won during the last four weeks of a general election campaign because the Tory tabloids and Tory money will rout us. We have got to start winning the philosophical battle now.
Taking back into public ownership the coal, rail and water industries is an important consideration. We are discussing a handful of pits. We know that we could reopen a few if we got back into power and took them back into the public sector. We are not naive, or innocents abroad. We know that the 700,000 miners that used to work in the mines when I first went down the pit cannot return to that work, but there are pits that could be saved, like the one mentioned by my hon. Friend the Member for Don Valley (Mr. Redmond) and others in every coalfield. That is the only way that we can save concessionary coal and miners' pensions, which the Government want to get their sticky fingers on. If we are to achieve those things, we must start commanding the agenda now.
I am happy to take part in my hon. Friends' campaign, but while the amendment is important, we are dealing with a much bigger issue--the demise of the coal industry,
Column 308which has been destroyed by the President of the Board of Trade, who has got the gall to parade himself as a future Prime Minister. He has not got a cat in hell's chance.
Mr. Hanson : I very much welcome the debate. The argument of my hon. Friend the Member for Bolsover (Mr. Skinner) is compelling and summarises our concerns and why the debate is so important. I hope that he will forgive me if I say that, for me and my constituents, the debate is about buying time. As my hon. Friend the Member for Livingston (Mr. Cook) mentioned, there is a shortlist for potential further closures in the run- up to privatisation. The Point of Ayr colliery in my constituency, which my hon. Friend the Member for Livingston mentioned, is on that hit list.
For me and my constituents, the debate is about the survival of the coal industry in north Wales and, for my hon. Friend the Member for Cynon Valley (Mrs. Clwyd), it is about the survival of the coal industry in Wales.
When I came here to represent north Wales, I never thought that I would have to speak up for the remnants of the coal industry in Wales, but that is the position now. Come April, I will have been in the House only two years. In that time, 33 pits have closed nationally. The Point of Ayr pit in my constituency was included in the original list of 31. I remain surprised that it is still on the list. That pit is still open solely because of the work force's commitment, the quality of the product and the investment that they have put in. The amendment proposes that that pit will stay open until privatisation and until the Coal Authority is established.
Early-day motion 923, in the name of my hon. Friend the Member for Cynon Valley, deals with Tower colliery. Point of Ayr and Tower collieries are the only remaining pits in Wales. The licences for those pits, which are on offer in the Bill, make up one fifth of the licences available for pits. What if the pits do not exist by the time that the Bill is enacted ? One fifth of the licences will disappear. It still has to be debated in another place--I fervently hope that it us rejected there.
During the past two years, I have made many speeches about the the Point of Ayr colliery--most of my time in the Chamber has been spent arguing about that colliery and the future of coal mines. When I was selected about seven years ago to fight for the seat that I now have the honour to represent, about 700 people worked at that pit. When I was elected, about 460 people worked there and today about 180 work there. What a lack of faith in the quality and commitment of the work force would have been shown if, after doing everything that was asked of them and after jumping 30 fences in the grand national, they fall at the last fence, because the Government kick away the powers that would enable that pit to be maintained.
If the pit is on British Coal's hit list and if it closes in a contracting market, with privatisation around the corner, I doubt--I hope that the Minister will respond to this point--whether the private sector would want to invest in it. It is not that it does not produce quality products or employ high-quality staff, but once privatisation has happened, companies will concentrate on the licences that are on offer.
The debate is about the future of the five pits mentioned by my hon. Friend the Member for Livingston, one of which is Point of Ayr. If the Government do not accept the
Column 309amendment and do not provide assurances for the constituency and work force at Point of Ayr and allow the pit to close, they will be throwing away a high-quality product.
Let us consider productivity. My hon. Friend the Member for Livingston mentioned the Boyds report. In 1987, miners at the Point of Ayr pit produced 3.1 tonnes per man shift ; in 1991, they produced 4.5 tonnes ; last year, they produced 8.9 tonnes per shift. Now they produce 14.7 tonnes per man shift with a work force that has been reduced by half. Despite that, the work force has made massive increases in productivity.
The cost of coal, as my hon. Friend the Member for Livingston said, is down to about £1.15 per gigajoule and the aim is to to get it down to £1 per gigajoule, which is well below the Boyds report target for Point of Ayr and other collieries.
Point of Ayr has made vast improvements in mining techniques. The Minister is aware of the continuous mining system that has been introduced into that colliery, of the advances that have taken place in roof bolting and of the £3 million worth of investment to achieve that productivity. The men have learned ; they have worked, contributed, developed and improved productivity, and are producing more coal than ever before. Today, however, they are on a shortlist for potential closure a short time before the measure to enable privatisation is passed in another place. What kind of reward is that ? The market is there--80 per cent. of Point of Ayr coal goes to the Fiddler's Ferry power station down the road. Although that power station has recently reduced its capacity by about 30 per cent., the coal produced still has a local market.
The colliery has an excellent work force and working conditions and high productivity, and can achieve and do the business. If the amendment is not accepted, the message will go to British Coal, in respect of Point of Ayr and Tower collieries, "Yes, if you want to close two, three, four, or five, we do not mind. We are trying to reduce the number of pits that can be handed over to a small number of private operators, to knock out competition and reduce the volume of coal produced for the market." That is being done at a time when the pit in my constituency has 15 years' coal supply remaining. My hon. Friend the Member for Bolsover mentioned farm subsidies. Travelling to London by train on Monday, I read a report in The Times of a farmer who is receiving £26,000 this year for not planting thousands of acres on his farm. Next year, he will receive £42,000 for letting his land go to grass. The farmer in question was photographed wearing a red hunting jacket and breeches, and his horse was feeding from the ground--which did not endear him to me. That apart, is it right that, while set-aside is paid to farmers not to produce a product, a potentially productive pit that is revolutionising mining techniques, improving productivity, and shows the way forward for many other pits in respect of costs and productivity will be closed ? If the amendment is not passed, we will be saying to British Coal, "We don't mind. We will let the market decide. If you want to close the pit, close it." That does not seem logical.
The Bill provides for licensing in Wales and for the retention of a Welsh coalfield. If the amendment is not accepted, will the Minister assure the House and my constituents that, after the Bill leaves another place, a Welsh coalfield will still exist to offer to potential licensees
Column 310--as was the aspiration in Committee ? Many of my hon. Friends support the amendment, but my prime concern is securing the employment and productivity of the pit in my constituency. If the amendment is defeated, I will be a happier man if the Minister will at least confirm that my aspirations in Committee of a licensing round for Wales will be realised when the Bill completes its progress through both Houses.
My hon. Friend's early-day motion also refers to the 30 April redundancy deadline. From talking to miners in my constituency, I know that in addition to the uncertainty caused by privatisation, the possible rejection of amendment No. 1 and doubt about who will win contracts and how coal will be produced, there is the uncertainty of the 30 April redundancy arrangement. If the amendment fails, my constituents will face a dilemma that I would not wish on any hon. Member--they must look forward either to a potential future in a privatised industry or to accepting redundancy payments. They do not know whether they have a future in a privatised industry. The Minister could accept the amendment today, but if, as I suspect, he rejects it, he could at least give assurances to miners in my constituency and others that there will be a future for them after privatisation. That will go a long way to meeting the amendment's objectives.
In Committee, my hon. Friends and I opposed privatisation, for a host of reasons. The Government majority that is not currently evident in the Chamber will doubtless ensure that further amendments are made before Third Reading and that the Bill will go to another place. I object to privatisation on principle and as a matter of practicality in respect of my constituents. However, if the industry cannot be publicly owned, my constituents want to work in a privatised industry.
Now that my constituents have reached this stage, they should be given time to compete in the privatised market. They should be allowed the opportunity to be offered employment under one of the new licences. If the Government accept the amendment, my constituents will be able to pass through the 30 April barrier with some hope for the future, knowing that there is a possibility of further work and productivity. They can produce quality coal cheaply, contribute and work, and they have shown their commitment.
If the Minister rejects the amendment, he will put the five pits mentioned by my hon. Friend the Member for Livingston at the mercy of British Coal-- and to date, that mercy has brought the closure of 33 pits in my 20 months as a Member of Parliament. I urge the Minister to give my constituents the hope for the future that they deserve.
Mr. Michael Clapham (Barnsley, West and Penistone) : The amendment is essential if Britain is to have a sustainable coal industry. Reference was made to the way in which the industry has been run down but unless one studies the figures, one cannot appreciate the scale. In 1984, the country had 170 collieries employing 172,000 men. Ten years later, it has just 17 collieries. In one decade, the Government closed 153 collieries and made redundant 160,000 workers. As my hon. Friend the Member for Sherwood (Mr. Tipping) said, the Government are working to an agenda. In 1990, Britain still had 73 collieries employing 65,500 men. That same year, the Government commissioned the Rothschild report and privatised the electricity supply industry. The architects of that privatisation, now Lord
Column 311Parkinson and Lord Wakeham, worked the market in such a way as to rig it against the coal industry. My hon. Friend the Member for Bolsover (Mr. Skinner) and others stressed that the Government have a historical dislike of the mining industry and have been committed to running it down since 1974. They saw their opportunity with electricity privatisation.
The Rothschild report set an agenda of between 10 and 14 active collieries. Figures showing the run-down of the industry since 1990 prove that the Government have been working to the Rothschild agenda. In 1992, the country had 50 collieries employing 50,000 men. By 1994, it had 17 collieries employing 14,000 men. It is now reported that another four collieries are likely to be closed within a month, leaving just 13.
It has already been said that miners have increased productivity enormously. When we look at the figures again, we can see just what a great effort they have put into ensuring that their industry is one of high productivity and viability, and an addition to the energy market. In 1984, we were talking in terms of just over 2.4 tonnes per man shift ; today, the average is almost 8.5 overall--an enormous increase in productivity.
When Boyds examined the industry during the Government's review, it was being spoken of in terms of an industry that could be sustained into the future if it could reach the productivity levels that are now being achieved. Boyds also referred to the cost per gigajoule and suggested that, if it could be brought down to around £1.30, a great slice of the industry would survive. Prices in the industry are now far below what he envisaged.
For example, Bentley colliery, which closed on 4 December 1993, was producing coal at below £1 per gigajoule. Between September and its closure, it was producing coal at 88p per gigajoule. That price is competitive with world market prices and the price of coal produced in deep coal mines anywhere in the world, yet it closed on 4 December.
My hon. Friend the Member for Livingston (Mr. Cook) referred to Manton colliery and the fact that it was producing coal at less than £1 per gigajoule and was only recently closed. Quite clearly, the Government have launched their attack to ensure that the industry is pruned to a size where it will be profitable for a quick rip-off. It is madness to close the coal mining industry in that way and stop its contributions to the energy economy.
Reference has been made to gas prices. Other countries, such as Holland, are looking to change their energy economy and are moving away from gas to coal because they believe that, in the short to medium term, gas prices are likely to increase. When one bears in mind the Zhironovsky factor, considering that Europe takes some 21 per cent. of its gas from the Soviet Union, any cutoff of gas from the Soviet Union into Europe would have an enormous impact on the price of gas. That impact would immediately result in Britain having to turn away from an energy market that is moving towards gas to look to its coal resources, but those resources will have been sterilised. We would have to spend enormous amounts of money to reopen the collieries.
The amendment would ensure that, if some of the few collieries that are left are closed, they will be maintained on a care and maintenance basis so that they can be reopened and put up for sale when the industry is privatised. That is
Column 312essential. Has the Minister inquired whether funding is available from the European Community to do that, as finance might well be possible to mothball collieries ?
Some of my hon. Friends have referred to the common agricultural policy and set-aside. We should be talking about setting aside collieries to protect them for the future and about ensuring that we have a resource that can be used in the energy market. The amendment is enormously important if we are to have a sustainable industry for the future. I hope that the Minister can tell us that he is prepared to take it on board and accept it.
Mr. McLoughlin : We have had a wide-ranging debate, in which many hon. Members who were part of the Standing Committee that examined the Bill took part. The House will recall that, when the White Paper was published in March of last year, the Government welcomed British Coal's commitment to offer to the private sector any pits that it no longer wished to operate. Since then, British Coal has advertised a total of some 28 pits, announced the licensing of Clipstone and Rossington to R J B Mining and made a conditional agreement to licence both Trentham and Coventry to Coal Investments. In addition, British Coal is continuing negotiations on a further two tenders and is still evaluating tenders for four pits.
I remind the House of the answer that my hon. Friend the Minister of State gave to my hon. Friend the Member for Chingford (Mr. Duncan Smith) on 9 February, in which he made it clear that
"The Government are committed to ensuring that any closing pits are made available to the private sector . . . British Coal has indicated that the corporation is unlikely to offer any further closing pits for lease/licence. It is the Government's intention, therefore, to offer such pits in parallel to the privatisation regional packages. Such pits would meanwhile be kept on care and maintenance basis."--[ Official Report , 9 February 1994 ; Vol. 237, c. 315-16 .]
That meets the point made by the hon. Member for Southwark and Bermondsey (Mr. Hughes).
Mr. Clapham : Is the Minister aware that, when Neil Clarke, the chairman of British Coal, appeared before the Trade and Industry Select Committee, he said that, of the 30-odd collieries that had been closed-- some are still open, although not working as operating mines--only six would be likely to be granted licences ?
Mr. McLoughlin : I have stated quite clearly the Government's position on any pits that close and on the regional packages if any future closures were to take place. I should have thought that hon. Members would have welcomed and endorsed the Government's policy of giving the private sector the opportunity to operate those pits even if it is some time after the event.
In opening the debate, the hon. Member for Livingston (Mr. Cook) told us that he believed that this privatisation was the low tide of the Government's privatisation policy. Quite frankly, he has believed that about every privatisation that the Government have introduced. He has not agreed with a single privatisation. When he winds up later, perhaps he will tell us whether he supports what the hon. Member for Bolsover (Mr. Skinner) called on him to do--renationalising the industry--and whether that is a commitment that he is prepared to enter into. If so, how he would carry it forward ?
Column 313I would be astonished if our plans to rescue the coal industry after the next election did not involve public ownership. My right hon. and learned Friend the leader of the Labour party has always made it perfectly plain that, where we believe that the management of a pit is not meeting our energy strategy, and where the safety of the work force at that pit is at risk, we will not hesitate to revoke the licence of that pit.
The one qualification that we make is that that step back into public ownership should have the support of the work force. That means that the people who are contemplating taking over these licences should bear in mind that we have a clear commitment to restore public ownership of the coal industry and will have clear regard to whether the work force has confidence in them.
Mr. McLoughlin : I am interested in what the hon. Gentleman has now said. The hon. Member for Bolsover also went on to mention a few other industries, but I will not push the hon. Gentleman on that point, because that is slightly wider than what we are discussing at the moment.
It is interesting that a number of Labour Members have spoken of their contempt for British Coal. It is highly unlikely that any of the miners will seek necessarily to go back into the nationalised industry that is being proposed. Indeed, the hon. Member for Midlothian (Mr. Clarke) was perhaps more honest than most of his colleagues when he explained to us that he did not necessarily blame the Government and that he had constantly complained about a number of aspects of British Coal under a number of Governments--for example, the way that it had narrowed its horizons on the available markets. We had interesting discussions in Committee about that. When the hon. Member for Livingston goes on about the low tide of privatisation, it is perhaps worth treating those words with some contempt as, so far as he is concerned, there has never been a high tide.
Mr. Tipping : The Minister has just been talking about British Coal and its management. Earlier, he gave a commitment that the Government would make available for licence any pit that closed. How can that be the case in Ollerton, where the mine shafts are being filled in at the moment ? It is a complete reneging on that promise.
Mr. McLoughlin : I would simply say what I said earlier. I refer the hon. Gentleman to the response given by my hon. Friend the Minister for Energy. The Government stand by that commitment. A number of questions were raised about the future size of the industry. In the run-up to privatisation, that must depend on British Coal's success in continuing to reduce costs and to supply competitive products that meet customers' needs. The White Paper offered opportunities not guarantees, and the Government are doing all that we reasonably can, consistent with the economic realities and the legal constraints, to increase the opportunities for British Coal. We took up the central recommendation of the Select Committee on Trade and Industry on a subsidy for coal and we have made four offers, subject to European Union clearance.
Column 314market franchise. Had that been done, a market for 17 million tonnes of coal would have been created. The Government were certainly not prepared to accept that ; they threw out all the main recommendations of the Select Committee's report.
Mr. McLoughlin : I do not think that anyone has argued that in the past. As I said, one of the central recommendations was to offer a subsidy and that is exactly what the Government did, in connection with the additional sales of deep-mined coal for electricity generation.
Several hon. Members, including the hon. Members for Southwark and Bermondsey, for Sherwood (Mr. Tipping) and for Midlothian, asked about conflict of interests and the possible position of British Coal management in any future sale of British Coal. I should like to put clearly on the record the fact that British Coal has internal guidelines requiring any manager preparing for a management buy-out proposal for any part of the business to declare an interest to the chairman. I understand that the chairman has received no such declaration of interest in respect of British Coal's mining operations.
Mr. Martin O'Neill (Clackmannan) rose
Mr. McLoughlin : May I finish my point ? Then I shall give way. British Coal has detailed internal guidelines to avoid any potential conflict of interest. Any employee who may in due course become involved in the preparation of a bid will be required to notify an interest so that proper monitoring arrangements and control can be established. Any bid by managers or other employees will be considered on its merits against bids from other potential purchasers. The Government will of course be the vendor in that case.
Mr. O'Neill : The Minister spoke initially about managers, and then mentioned other employees. Does he draw a distinction between the two ? Are they to be treated the same ? Can we take it that the people at Hobart house will be subject to exactly the same conditions ? The balance of the Minister's comments suggested that some distinction would be drawn between the two types of British Coal employee. Will he clarify that question ?
Mr. McLoughlin : What I said was fairly clear, but if it needs further clarification I shall gladly supply that later. The internal guidelines require any manager working on management buy-out proposals for any part of the business to declare an interest to the chairman, and I understand that no such declaration has hitherto been made.
Mr. Eric Clarke rose
Mr. Simon Hughes rose
Mr. Hughes : Does the Minister accept that that is a wholly unsatisfactory condition ? Even if we believed that nobody in British Coal was interested in a buy-out, and nobody had yet come forward to say that he was, none the less if somebody eventually came forward surely it would be impossible for such a person to be working up a bid to win a tender and at the same time managing the best prospects for the whole disposal to the best bidder. Those two positions cannot be compatible. Cannot the Minister
Column 315see that ? Cannot he say at the Dispatch Box that no conflict of interests will be permitted and that if someone registers an interest in a buy-out he must cease to have a role in a company that may be seeking to dispose of the pits to somebody else ?
Mr. McLoughlin : I have made it clear that, when there is a conflict of interests, it must be drawn to the attention of the chairman. There are strict internal guidelines to cover that point. This is well-trodden territory, and no conflict of interests will be allowed.
Mr. Eric Clarke : The Minister mentioned me and I am of course interested in the same subject. I have no axe to grind against management-- that is, against a manager of a colliery--but I have an axe to grind against the most senior management. What happens if the people at the very top do not declare a conflict of interests, yet become involved in a takeover bid ? What is the logic ? If they are not doing what we say they are doing, why ? There is no logic in that.
Mr. McLoughlin : I am slightly puzzled about what the hon. Gentleman is asking. Where people have an interest, they will be required to declare it. If they do not, the various contacts with which they are involved will become subject to further consideration.
The hon. Member for Bolsover gave us his usual history lesson. I am glad that he spoke after the hon. Member for Wentworth (Mr. Hardy), because yesterday he told us that the whole problem was caused by the position of the National Association of Colliery Overmen, Deputies and Shotfirers in the 1984-85 strike. The hon. Member for Wentworth speaks on behalf of NACODS, so he might not exactly agree with that conclusion. The hon. Member for Bolsover went over his usual ground today. I am sure that he must find some comfort in his Front-Bench spokesman's commitment to renationalisation.
Mr. McLoughlin : That is an internal matter. No doubt the hon. Gentleman will make his case with vigour. I do not ask the hon. Member for Livingston to comment ; he may be a little less forthcoming than the hon. Member for Bolsover.
We cannot accept the amendment. I have made it abundantly clear that any mines closed will be offered to the private sector. That offers the best way forward for the British coal industry.
Mr. Robin Cook : Hon. Members who have attended the whole debate will have observed that the one question to which the Minister did not respond was the one that I asked at the start of the debate, about whether he had received the Boyds report showing that privatisation will put up the price of coal.
Column 316it did not. If it existed, but proved that the price of coal after privatisation would fall rather than rise, we would have been told that from the Dispatch Box. Instead, there has been an eloquent silence on the subject of the Boyds paper. From that I can conclude only that the report from which I quoted exists, and that it concludes that for the first pit on which cost projections have been made, privatisation would put up the price of coal rather than bringing it down.
If I am wrong in that conclusion I shall be happy to give way to the Minister now, so that he can put the record straight. I suspect that those little notes that we saw being passed through the Chamber confirmed to the Minister the fact that privatisation will reverse the trend of the past 10 years of public ownership and put up, rather than bring down, costs.
The Minister argued about conflict of interests if British Coal were preparing a bid to buy the pits that it is selling. The only reason that we are in that position at all is that the Government have failed to arouse any interest from the major players in private mining, such as Hanson, which they had hoped to interest in privatisation. They talked about Hanson on the day on which the Bill was proposed for publication, only for Hanson immediately to announce that it had no interest. So the Government are prepared to put up with any amount of conflict of interest in British Coal so long as a bid is produced, because they are desperate for anybody at all to come forward and make an offer.
My hon. Friend the Member for Bolsover (Mr. Skinner) talked about the importance of the critical mass--the number of pits in operation--so that one can sustain pits that are not producing cash flow because they are undergoing development. In order to sell pits, the Government are willing to break the coal industry up into five different packets. They have only 17 pits, yet they are prepared to divide them into five packets. How on earth will they then achieve the critical mass that my hon. Friend described, so as to enable some pits to take other pits through periods in which they have no cash flow because they are not producing coal ?
The Minister told the House that any pit currently in operation would be offered to the private sector in parallel to privatisation, although not necessarily as part of privatisation. If that is the Minister's conclusion, why cannot he accept the amendment to keep those pits operating in the meantime ? Why operate them only on a care and maintenance basis, which results in having to pay the cost of the care and maintenance without receiving the benefit of the output ? One cannot employ a work force on care and maintenance. If production is closed, it may be possible to keep the pit under care and maintenance, but the work force will be dismissed, the team will be broken up, the people in it will receive redundancy payments and they will be put on the dole.
The final point that hon. Members should weigh up when considering how to vote in the Division that is about to occur was made repeatedly from the Opposition Benches, especially by my hon. Friends the Members for Bassetlaw (Mr. Ashton) and for Delyn (Mr. Hanson). There has been a betrayal of the mining work force who, over the past decade, have achieved dramatic increases in productivity in their industry--for example, at Point of Ayr, to which my hon. Friend the Member for Delyn referred, where the work force have increased productivity fivefold over the past eight years. That dramatic