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8.46 pm
Mr. Eric Clarke (Midlothian): I declare an interest: I am a paid adviser to Mining (Scotland) Ltd.
I am an ex-trade union official and was a miner for 26 years, so I realise that the most important aspect of an extractive industry is the development of new face lines. Investment in coal mining is a long-term investment, and the whole industry--not just the industry in Scotland--thanks the Government for this help.
Development must take place alongside production to achieve continuity of work. Major developments are occasionally necessary and that means that millions of pounds must be spent. For example, in Scotland, the Kincardine area of the Longannet complex cost millions of pounds to develop.
We need finance for deep mining. Opencast mining in Scotland helps to subsidise some deep-mining activities and it also guarantees production and quality to the power stations. Scottish coal is low sulphur and it is blended with deep-mined coal from England to keep deep mines open and to make that coal acceptable to the generators.
We are debating not a hole in the ground, but a sophisticated and highly developed industry. It is the pride of the world and investment has been made in the coal industry and the manufacture of mining machinery. One problem in Scotland and elsewhere is faulting in the strata--in other words, faults underground. The forecasting of those faults is important. New sophisticated equipment can make three-dimensional forecasts and determine exactly where they lie. It is possible to design the layout of pits to miss the faults, and the dry-aways and production face lines will be better planned. That is all needed, but very expensive. It adds to overheads, but guarantees success.
The coal industry can stand on its own. Savings in the balance of payments for other fuels that take its place are second to none. Every time fuel--oil, gas or anything else--is bought on the international market, it must be paid for by American dollars, although it does not necessarily come from that country. Burning coal from indigenous mines saves this country millions of dollars. Oil prices have quadrupled, gas prices have increased by 9p a therm and even the cost of imported coal has increased--as we forecast--so our coal is a good investment. More than that--I do not want to make a plea--it is giving people employment. The spin-off is phenomenal. For every coal miner employed, 10 or more people are employed in ancillary industries.
The Government are to be congratulated. It gives a crow in the throat, as they say in Scotland, to hear the Conservatives give advice about the coal industry. I spent most of my life in the industry--26 years underground and 12 years as a union official. I do not need to be told what happened to the coal industry in Scotland because it was Mrs. Thatcher and her cohorts who were responsible, and they acted not for economic reasons, but out of political spite. Conservative Members may shake their heads, but it is a fact. I must thank the Government for their help. I hope that it is a start because there is a need for long-term investment. That goes for the industry both south and north of the border.
8.51 pm
Dr. Vincent Cable (Twickenham): I shall try to heed the Minister's suggestion that we speak briefly so that hon. Members who represent coal mining constituencies have plenty of opportunity to speak. Indeed, the deputy leader of my party, my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) is one of them. Twickenham is far removed from the coal mining industry--almost as far as Bognor Regis--but I have an interest because this subject is about environmental policy as well as about coal mining.
In the Government's report on climate change, published a few days ago, I was struck by the extent to which the coal mining industry has carried the burden of CO 2 emission reductions. Ministers of this Government and the previous Government have gone around the world saying that Britain has made an enormous contribution to reducing CO 2 emissions, but the small print in the report makes it clear that the sacrifice has been made almost entirely by one industry.
Between 1990 and 1998, the shift to gas from coal reduced carbon emissions by 13 million tonnes compared with a reduction of 2 million tonnes of carbon achieved through the petrol duty escalator, protests against which almost brought the country to a halt. That 13 million tonnes needs to be set in the context of the total net reductions in this country, which were, as far as I can deduce from the figures, about 13.5 million tonnes. Therefore, one relatively small industry has carried almost the whole burden of adjustment in an important environmental shift. In that context, it is only reasonable to expect some of the pain caused by that adjustment to be cushioned.
The Government's intervention is not propping up a declining industry--I would not support it if it were--but easing a transition within a relatively small remaining part of an industry that has taken an enormous amount of pain so that Britain as a whole can claim substantial environmental improvements in the global context that is discussed in The Hague.
The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) said that he saw support for the coal mining industry as a quid pro quo for the liberalisation of permission for gas-fuelled power stations. I am sure that that is right, but it is an entirely reasonable quid pro quo. It seems right that the coal industry should get some relief from the pain of adjustment, but equally right that the gas permissions should be liberalised. There are powerful reasons why that should happen. Every unit of energy emits 40 per cent. less carbon-using gas and there are the additional benefits of using combined-cycle technology, which reduces carbon emissions even further. There is less sulphur, fewer particulates and additional advantages of being able to build gas-powered plants near the consumer without investment in the transmission system. Such plants can be built much more quickly. We all know the good reasons why gas must develop. So, the policy is a quid pro quo, but an entirely reasonable one in which there is an element of balance.
In the long term, we face a challenge that neither coal nor gas can answer. The problem will arise around 2005--the hon. Member for Bognor Regis and Littlehampton mentioned it--when the older atomic power stations, which at present make a major contribution to the reduction in carbon dioxide emissions, will have to be
phased out. If they are replaced by gas-powered plants, emissions for every unit of energy will increase by about 60 per cent., and if by coal-powered ones, by about 80 per cent.--unless new technology is developed.So, neither fuel represents an answer to the problem. That is why regarding gas as a panacea is just as dangerous as seeing it as some unacceptable form of fuel. That is why we on the Liberal Democrat Benches have tried to tie the Government to much stronger commitments to renewable energy in 2010. Indeed, it is why we tabled amendments to the Utilities Bill to that effect.
However, in the narrower context of the motion, and given the pressures that the coal mining industry has had to bear, the proposal is entirely reasonable, and we shall support it.
8.56 pm
Mr. Denis Murphy (Wansbeck): I also extend my congratulations to my right hon. Friend the Minister for Energy and Competitiveness in Europe on the work and effort that she and her Department have put in to ensure that this Government aid package has been given the green light by the European Union, and that it has been brought to the House for approval so quickly.
There should be no doubt in anyone's mind, particularly in this House, that if the aid package had not been available, the bulk of Britain's deep-mined industry would now be closed. That would not only have been a tragedy for the United Kingdom, but a great loss to Europe. Given the short-term problems that the industry faces, and hence the need for such aid, Britain's mining operations are much more efficient and productive than anything else Europe has to offer. I hope to demonstrate in the next few minutes how short-term aid could benefit the long-term energy needs of our nation.
Our first aim must be to retain a balanced energy portfolio--a sensible share of the generating market for gas, nuclear and coal. The events surrounding the fuel crisis of the past few months are a timely reminder and a warning that we close any sector of our home energy production at our peril. The 300 per cent. rise in the cost of oil has sent shock waves around the world, with demonstrations from Strasbourg to Sydney, yet over the past 15 years we in the UK have allowed our greatest source of energy--coal--to go into free-fall and to decline desperately.
In some traditional mining areas, we have lost completely a skills base that took generations to build. In many cases, sadly, it has been replaced by desperate social and economic problems. We now have one colliery, Ellington, left in what was the great northern coalfield. I spent nearly 30 years of my working life there and I know many of the men who still work there as friends and as comrades.
I am delighted, therefore, that as a result of the aid package Ellington colliery has been offered a lifeline by RJB Mining, protecting the jobs of several hundred miners who live in an area where unemployment is still a blight and the rate of it has consistently remained at twice the national average for far too many years. I welcome the measures taken by the Government to address the very real problems faced by former coalfield areas, with a variety of initiatives from health to education. I intend to continue my pressure on RJB Mining to extend the life of
Ellington beyond the four years already agreed, in order to exploit the huge reserves of coal that lie under the North sea.I am sure that one influential factor in the argument will be access to markets. In order to ensure our balanced energy portfolio, we desperately need a new generation of clean coal-fired power stations to replace the ageing ones that are presently in use. These replacement stations are the only hope of a real long-term future for Britain's mining industry.
We are fortunate in the north-east of England that not only do we have an abundance of energy, but we are rich in ideas. The first offshore wind farm in the United Kingdom will shortly be producing electricity just off the coast of my constituency. Newcastle university is a world leader in photovoltaics--the science of turning light into power. The earth balance project in my constituency not only grows and produces organic food, but produces electricity from biomass and wind power.
The Wansbeck Energy Company is well advanced with the Wansbeck energy project, a partnership between local authorities and the companies Merz and McClellan, and Kennedy and Donkin--two of the most respected names in the field of energy and power. The company intends to build a commercial clean coal-fired power station of approximately 400 MW with the gasification of coal in a combined cycle process.
Given the demands of Kyoto, environmental issues are at the forefront of the developers proposals. There is confidence that the proposed process will offer significant improvements over existing coal-fired power stations, and that in terms of emissions it will compare favourably with modern gas-fired combined cycle gas turbines.
Contaminated mine water from abandoned coal mines is a particular problem in many regions of the United Kingdom, particularly in our area. A unique and ingenious approach to resolving the problem involves using the contaminated mine water in the gasification process in that power station. The plant uses significant quantities of water, which needs to be treated to extremely high standards. The opportunity exists, therefore, to use water from former coal mines rather than town water, reducing the threat to water courses and local rivers, and disposing of contaminated water in a responsible way.
I urge my right hon. Friend the Minister to visit my constituency and see at first-hand our proposals, or, if that is not possible, at the very least to meet a delegation from the constituency in London. At present we have the skills base to build and operate the plant, for recently, as my right hon. Friend knows, National Power announced the closure of what was then the UK's oldest power station, Blyth A and B. The work force therefore still exists.
In conclusion, the aid package has secured thousands of mining jobs and protected many more thousands of jobs in the equipment manufacturing sector, which secures exports worth more than £200 million a year. Although the aid secures jobs for the short term, the mining industry may need long-term help. I urge the Government to support schemes such as I have outlined. The saying, "Think globally, act locally" has never been more apt, especially as we witness what could be the first major climate change attributed to global warming.
Although in my view it is not possible to end our use of fossil fuels in heavily developed industrialised nations, we can certainly improve the efficiency and dramatically
improve the emissions from a new generation of clean coal-fired power stations. I urge the Government to support the development of a clean energy centre in my constituency, where we can generate electricity, manufacture wind turbines and light cells, and develop new technologies to increase the contribution that needs to be made by renewables. We can do that side by side with the fuel that has served the nation well for generations: coal.
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