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Mr. Eric Illsley (Barnsley, Central): We have spoken about renationalisation of the coal industry as though it were a bridge too far, but given RJB's share price at the moment--the valuation of that company--it would be far cheaper and easier to buy the company back into public ownership.

Mr. O'Brien: The funds that I mentioned might be used for that purpose.

Let me tell the Minister that if we sincerely want to support the mining industry--as the Government declared on being elected in 1997--we can do that without subsidies from the taxpayer, by using money that has been generated in the mining industry. Now is the time to make an approach to the Treasury to ask to use some of the money that we accrued in the industry--money which I and other hon. Members who have spoken in the debate contributed. That is one way in which we can save the industry and develop clean coal technology, which will see the industry through the next century.

I plead with the Minister to take those two points on board, because that would improve the miners' lot.

10.36 am

Ann Clwyd (Cynon Valley): Many of my hon. Friends have made the arguments that I wished to make. I congratulate my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) on initiating the debate and on his continuing fight for our coal industry. He is second to none in his efforts on behalf of that industry.

The speech by my hon. Friend the Member for Wansbeck (Mr. Murphy) reminded me of my fight for the Tower colliery, in Cynon valley, during 1994. At that time, I advanced in the Chamber the very arguments that my hon. Friend made. I know how strongly he feels, as I felt strongly at that time.

In 1995, the miners of Tower colliery, the last deep mine in Wales, became owners of the pit. In the first year, they made pre-tax profits of £3.5 million. I can remember the right hon. Member for Henley (Mr. Heseltine), who was then Secretary of State for Trade and Industry, arguing that there was no future for Tower colliery--that it was finished. He sent one of his Ministers to the Tea Room and said, "Tell the men to throw in the towel", and I answered, "Tell them yourself."

The miners of Tower did not throw in the towel. They launched their own bid, with their redundancy money, to buy the pit. Two hundred and twenty-eight miners each

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put up £8,000 to buy that pit, and it re-opened on 2 January 1995. Those miner owners have set up a fully co-operative structure. They have an open management, with worker directors who are accountable to the work force, as well as one person, one vote decision making. Shares must be returned to the company by those who leave the pit, and they cannot be bought by outsiders. Such a scheme could be repeated elsewhere.

Tower colliery employs 400 people from the valleys of south Wales--still an area of high unemployment and deprivation. In my constituency, 12.6 per cent. of workers are still unemployed. The colliery offers well-paid jobs, and there is a spin-off of about £10 million a year to the economy of the Cynon valley. Therefore the industry is very important.

Tower has consistently invested in the future, with heavy financial costs in the development of the mine and the infrastructure. It would like to develop other parts of the mine, which would produce coal directly for Aberthaw power station, but that development is costly and, due to present uncertainties described by my hon. Friends, it is unable to go ahead. Tower pit pays more than £5 million annually to the state, in addition to the £8 million paid to the Government to buy the pit, and it is still paying back another £2 million. We should remember that the pit has a very important contribution to make to the economy of south Wales, especially the Cynon valley.

I urge my hon. Friends not to throw in the towel, but to keep on fighting. I also urge my right hon. Friend the Minister for Energy and Competitiveness in Europe to reply sympathetically to the strong case made for coal. There is a case for it, which should be answered by the Government. It was not answered by the previous Conservative Government, but I hope that this Government will show greater understanding and sympathy.

Finally, on a lighter note, the story of Tower has been put to music. There is an opera called "Tower", which opened in south Wales three weeks ago and is now touring Wales. It tells the story in music and song. It could come to England, but the Arts Council of England has turned down an appeal for a grant, saying that there is no interest in England. Anyone who heard my hon. Friends today would know that such an interest exists. May I tell my hon. Friend the Minister for the Arts that my constituency was twinned with Islington during the miners' strike, so there is an interest in Islington, in the north of England and in Scotland, and the Arts Council of England should change its mind?

10.41 am

Mr. Nick Gibb (Bognor Regis and Littlehampton): I congratulate the hon. Member for Barnsley, West and Penistone (Mr. Clapham) on securing an important debate, and I welcome the right hon. Member for Airdrie and Shotts (Mrs. Liddell) to her place in her first key debate as the Minister with responsibility for energy at the Department of Trade and Industry.

There is no doubt that the coal industry has suffered enormously over the past 15 years. Economics and the environment were the principal reasons for pit closures in the 1990s, and now the driving forces are the environment and subsidies in Germany, Spain, France and Poland, which are almost certainly illegal.

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It is particularly tragic that Ellington is to close at a time when alternative employment in manufacturing in the north-east is under threat from Government policies that have pushed manufacturing into recession, from which it is just emerging.

I have enormous sympathy for some of the more honest old Labour Members of Parliament, who fought the election on the expectation that the coal industry would be protected under a Labour Government. Labour raised expectations that the coal industry would be safe in its hands. The new Labour leadership must have known that that was not true, because in its manifesto the Labour party made it clear that it would fight global warming through a new target of a 20 per cent. reduction inCO 2 emissions by 2010.

The Labour party in opposition gave miners and the coal industry the cosy reassurance that coal mining jobs would be safe, yet the Deputy Prime Minister has signed Britain up to achieving an even higher CO 2 emission target than that demanded by Kyoto. This debate, therefore, is not just about coal or gas or electricity; it is about how the Government can marry the target to which they signed up with their implicit promises to the coal industry.

I refer the hon. Member for Blyth Valley (Mr. Campbell) to the Select Committee on Trade and Industry report on the coal industry, which states that

The right hon. Lady's written answer to my question about European coal subsidies contained reassuring but unconvincing language, but, as was pointed out by my hon. Friend the Member for Rayleigh (Dr. Clark) and by the hon. Member for Midlothian (Mr. Clarke), the fact is that last year, according to RJB Mining, Germany, France and Spain subsidised their coal industries by £3.2 billion, a highly unfair and probably illegal subsidy. Perhaps that should be called the Midlothian question. It shows a huge gap between the new Labour message and the new Labour reality.

The biggest deceit of all is contained in the Government's White Paper on energy, which seeks to justify the gas moratorium on the grounds that it will protect the coal industry--a view, incidentally, that is not shared by many outside the Government. The Labour- dominated Select Committee on Trade and Industry stated:

The Government, whose Deputy Prime Minister had signed up to some challenging CO 2 targets, found that some of his colleagues were worried about the effect that that would have on the coal industry. The Government decided that they must be seen to be doing something to appease those members, and accordingly embarked on a gas moratorium, despite the fact that they know and the whole world knows that it will do nothing to help the coal industry.

The Government claim in the White Paper that the dash for gas has been artificially encouraged by distortions in the electricity market and by inadequate competition in generation. The argument is that both of those factors have artificially raised the market price of electricity, thus encouraging new gas-fired power stations to be built.

10 Nov 1999 : Column 1062

No one questions the importance of the reforms to the electricity pool or of competition in electricity generation, but the idea that companies would invest millions of pounds without considering the future price of electricity is nonsense. It make a mockery of the reasoning behind the gas moratorium set out in the White Paper.

The moratorium is resulting in higher electricity prices than would otherwise be the case, and significantly higher CO 2 emissions, and is leading to further downgrading of the competitiveness of British industry.

The next great deceit in the Government's arguments for the gas moratorium relates to the environment. Combined cycle gas turbine stations emit about half the level of CO 2 emitted by a conventional power station, but because of the increased use of gas over the years and increased output from nuclear power, the CO 2 emissions from electricity generation have already fallen below 1990 levels.

That is why the White Paper states that the Government

even on scenarios that retain the gas moratorium in the years 2008 to 2012. Therein lies the deception. From 2010, if not earlier, as was pointed out by other hon. Members, the UK will have to begin to decommission Magnox nuclear power stations.

Thus the Government's environmental policy is geared solely to meeting the Kyoto target of 2008 to 2012. The fact that in the years after 2012 the CO 2 emissions are likely to rise is, as far as the Government are concerned, irrelevant. In other words, the Government are living for the short term and taking no steps to deal with the position after 2012.

The third great deception in the Government's argument behind the gas moratorium involves security of supply. Britain has total remaining gas reserves which at current production rates will last between 23 and 35 years. That is stated in appendix C of the Government's White Paper on energy. That is why the Labour-dominated Select Committee on Trade and Industry concluded:

That is the final deceit. The gas moratorium will not protect the coal industry, its purpose is not to protect hapless companies from mistakenly building gas-fired power stations in response to short-term artificial prices, and it will not help with the security of electricity supply. However, the gas moratorium will add to the price of electricity and will lead to higher CO 2 emissions than would otherwise be the case. For those reasons, we believe that the gas moratorium should end.

The difficulties faced by the British coal industry are real and have been exacerbated by the Deputy Prime Minister and by illegal European subsidies. The real concerns and real difficulties should be addressed by the Government through real policies and real remedies, not through an artificial policy that will do nothing to help, but which will damage British industry and the environment.

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