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Mr. Battle: The Minister should try reading the newspapers.
Mr. Eggar: I should read the newspapers? In other words, is it still intended that the windfall tax will be used to pay a fixed sum to people taking jobs in non-profit organisations? Is the windfall tax going to pay for removing lead piping from the water systems? Will the windfall tax pay for the changes in the VAT thresholds and the capped allowances? Labour Front Benchers have made 11 commitments on how they will spend the windfall tax, but there is no explanation of how they will raise it, who it will be raised from, what the rate will be and how long it will last.
In "The Road to the Manifesto", the Labour party stresses how important stability is for industry--it is in lights. However, the hon. Member for Leeds, West cannot even answer my simple questions about the windfall tax.
Mr. Battle:
At least we have made it plain that we will introduce a windfall tax. We did not go to the electorate and promise that we would not put VAT on fuel and then put VAT on fuel once we were elected.
Mr. Eggar:
The hon. Gentleman should be better briefed or stay seated. The Government have pursued a constant and consistent energy policy since 1979. The policy has delivered enormous benefits to customers, led to dramatic reductions in the price of industrial gas and domestic gas, and to the reduction in the price of industrial electricity. Domestic electricity consumers have
Mr. Michael Clapham (Barnsley, West and Penistone):
I take the Minister back to 1945, a period to which he referred as a splurge of activity in nationalising the industries. He will be aware that in 1947 the coal industry was in such a state of deterioration that it took state backing to regenerate it. The electricity supply industry was nationalised in 1948 and the gas industry was nationalised in 1949--all the legs of the energy industry were brought together in a co-ordinated and efficient way.
Over that 35-year period, the United Kingdom's energy policy was based on a framework of publicly owned and publicly accountable industries--throughout the 1960s, British competitiveness was able to meet competitiveness anywhere in the world. It is fair to say--I am sure that the Minister has checked his figures for the 1960s--that labour productivity in the nationalised United Kingdom electricity industry was second only to Japan. In other words, the United Kingdom electricity industry, under a nationalised system, delivered electricity efficiently and supported British industry.
Mr. Peter Hardy (Wentworth):
Does my hon. Friend agree that, if the electricity industry had not been nationalised in the late 1940s and allowed to operate nationally, many rural areas of England would not have received electric power for at least another 20 years?
Mr. Clapham:
I agree with my hon. Friend. The condition of the electricity, gas and coal industries was so bad in the late 1940s--they had deteriorated during the war years--that they needed state backing in order to provide power to the consumer. There is no doubt that, if it were not for nationalisation, rural areas would have had to wait many years before they received power supplies.
The main changes over that 35-year period occurred in the energy balance. Coal was gradually displaced by oil, nuclear energy and later gas. Some pundits--perhaps the Minister will agree with their depiction--describe energy policy in those years as nationalisation followed by pragmatic regulation. It is not fair or correct to say that there was no regulation during that 35-year period: there was pragmatic regulation. That is how many academics, to whose research the Minister refers, describe the 35 years of nationalisation.
There was no semblance of energy policy in the 1980s--it disappeared altogether. It became a nostrum that privatisation and the market would allocate energy resources efficiently. That led to the ultimate privatisation--as Lord Parkinson referred to it--of electricity in 1990 and to the privatisation of the coal industry.
The privatisation of electricity left three main generators: National Power, PowerGen and Nuclear Electric. Twelve regional electricity companies were responsible for supplying electricity. Nuclear Electric remained within the public sector and contributed about 25 per cent. to 26 per cent. of our electricity needs. Nuclear Electric was not privatised in the 1990 package as the market would not take it because of the risks involved--we are talking about £31 billion of undiscounted liabilities.
Consequently, in 1990 it was decided that it would be better to leave nuclear electricity in the public sector. It was recognised that the income stream that would result from the company's remaining in the public sector could be used to deal with the massive liabilities that had been left behind. Those liabilities, in part, remain in the public sector as the newer power stations have been privatised.
The privatisation of the electricity industry led to the colliery closure programme of 1992-93 when the then President of the Board of Trade, now the Deputy Prime Minister, threw out all the recommendations in the Trade and Industry Committee report "British Energy Policy and the Market for Coal". Following his rejection of those recommendations, privatisation of the coal industry was inevitable. After write-downs and write-offs, the rump of the coal industry was sold to RJB Mining for a knock-down price. About 30 deep mines from the original package are still operating and they produce between 34 million and 36 million tonnes of coal.
Dr. Michael Clark:
The hon. Gentleman said that the "rump of the coal industry" was sold to RJB at a knock-down price. Does he recall that at the time of the sale, everyone--particularly the financial papers--said that RJB had paid about twice as much as it should, that it would never be able to repay the money and that it would be driven into liquidation? Of course, RJB went on to make a profit. However, it did not seem a knock-down price at the time--certainly not in the view of the analysts.
Mr. Clapham:
It was a knock-down price if one considers the way in which British Coal had previously written off the debt and dealt with the liabilities, so that anyone who took over the mining industry was bound to make a profit in the first few years. I believe that RJB bought the mining industry at a knock-down price and, in hindsight, most analysts would agree with me.
The coal industry currently produces 34 million to 36 million tonnes of coal. Other companies--such as Coal Investments Ltd., which recently went into liquidation--operate deep mines. It is unlikely that any of the pits that have closed will open again. I ask the Minister to tell us whether assistance will be available to companies that
take on the contract to recover plant and machinery from underground. Perhaps he can answer that question when he winds up the debate.
Mr. Tipping:
Perhaps the Minister will tell us also what discussions he has had with the Coal Authority. The liability arising from the liquidation of Coal Investments was transferred from the private sector to the public sector and the Coal Authority. Will the Minister confirm whether that liability will amount to about £5 million?
Mr. Clapham:
I am grateful to my hon. Friend for prompting me. The Minister may refer to that matter when he winds up. I have put several questions to him but, as yet, he has not confirmed whether the Government will provide assistance to enable companies to retrieve plant and machinery from underground.
In addition to taking over the deep mines, RJB took control of most opencast sites and potential opencast sites. Those sites stretch throughout England. Opencast production currently runs at about 17 million tonnes, which is about half of all deep mine production. It is the most opencast mining that has ever occurred in this country. Some agencies, such as the Coalfield Communities Campaign, argue that we do not need that much opencast mining--particularly if it is required only for technical reasons.
I ask the Minister to consider that point when he receives new opencast mining applications. He will be aware that British Coal is now selling land not only to those who have farmed it for years but to the highest bidder. It is attracting opencast miners--and that is its intention. British Coal is putting out its land to tender in the hope that companies will buy the land for opencast mining. Some of the most beautiful countryside in Yorkshire is now under threat.
For example, "For Sale" signs have gone up on a piece of land in a beautiful valley between Hood Green and Silkstone common in my constituency. It is quite clear that the owner wishes to attract opencast companies. That site is situated in one of the most beautiful parts of Yorkshire. It has high scenic value and it would be a tragedy for the community if the land were used for opencast mining. I invite the Minister to visit that site so that he can see what is at stake as a result of British Coal's policy of offering its land to the highest bidder. The Minister may wish to take up that invitation, and come to see the land. If he does, we may well have his support when it comes to defending the site against the opencast mining companies.
It is clear that safety in the deep mines has deteriorated radically. Figures for the first year of private ownership, produced by the Health and Safety Executive, show that the number of fatalities and major accidents has increased dramatically. I recall that, during our previous debate on this subject, the Minister said that there was no evidence of an increase in the number of major accidents, but the HSE's figures make it clear that that is not the case.
Let us take the HSE's comparison of the figures for 1994-95 with those for 1995-96. According to the HSE, there has been an alarming increase in the number of major injuries, from 135 to 159, while the number of fatalities has risen from two to five. I suggest to the Minister that that evidence clearly shows that British deep coal mines are not as safe as they were following
privatisation. The alarming increase in the number of injuries and fatalities can be explained by deregulation, by the fact that miners must now work for much longer hours, by increased use of contract labour and by the downgrading of the deputies' role.
The Minister will recall that the Deputy Prime Minister, when he was at the Department of Trade and Industry, insisted that miners would never be put at risk. Perhaps, bearing that in mind, the Minister will tell us what he will do to ensure that the high safety standards that obtained in British mines under nationalisation are reinstated in the next year.
The current coal contracts are due to be renegotiated in 1998. At present, the collieries provide some 30 million tonnes; last year RJB Mining supplemented that from stock. I understand that the generators took some 56 million tonnes of coal. As the contracts come up for renegotiation, the potential of the entire coal industry will clearly depend on their being long term. As we know, there has been little investment. The Minister did not mention that, since electricity privatisation, there has been no investment in research and development relating to clean coal technology. We now need a balance in our energy policy, but we do not have the means to burn coal efficiently and in an environmentally friendly way.
Perhaps, when he replies to the debate, the Minister will tell us whether any assistance will be given to such research and development, whether he is prepared to reinstate the investment programmes and whether he is prepared to be helpful to the coal companies in the renegotiation of contracts. Does he, for example, foresee the maintaining of the contracts at 30 million tonnes? Does he expect them to be of a shorter duration? If they are of shorter duration, that will have a considerable impact on mining communities, and it would help those communities to know what is in the Minister's mind.
My hon. Friend the Member for Leeds, West (Mr. Battle) spoke at length about nuclear privatisation. The report of the Select Committee on Trade and Industry on the intended flotation of British Energy, produced in February--which urged caution on the Government--has clearly not been taken into consideration. As the Minister will know, the report emphasised that the scope of the segregated fund did not seem sufficient to cover the liabilities.
Since the publication of that report, two energy economists have produced a further report. I know that the Minister has read about that material; he will also know of the open letter to him from the two energy economists, published in The Guardian, which made it clear that they stood by their figures. Those figures suggest that privatisation of the seven advanced gas-cooled reactors and the one pressurised water reactor has left up to £6 billion-worth of liabilities in the public sector. If we add that to the £17 billion-worth of liabilities that are tied up with the Magnox stations, it seems that the public sector has been lumbered with up to £24 billion-worth of liabilities. As my hon. Friend the Member for Leeds, West pointed out, that is certainly not a good deal for the taxpayer.
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