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House of Commons

Thursday 5 December 2002

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Coal Industry

1. Paddy Tipping (Sherwood): How much financial support has been made available to the coal industry in the current year. [83602]

The Minister for Energy and Construction (Mr. Brian Wilson): Under the UK Coal operating aid scheme, £14,785,956 has been paid to coal producers since 1 January 2002.

Paddy Tipping : I am grateful to my hon. Friend for that reply, and for the help that has been given to the coal industry. Does he accept, however, that the best way to continue to have diversity and security of supply is to make a decision to back the British coal industry, just as a decision has been made to back the nuclear generator, British Energy? Is it not better to have indigenous sources of supply, rather than being dependent on imports of gas? Gas could constitute 80 per cent. of our energy provision by 2020, but 90 per cent. of it will be imported.

Mr. Wilson: My hon. Friend makes a powerful point. One of the major issues that the White Paper will have to consider is the extent to which we are going to become dependent on imported sources of fuel, as opposed to maintaining our historic self-sufficiency in energy sources. I do not accept my hon. Friend's analogy with nuclear energy. The reason for backing the nuclear industry was to maintain security of supply and the safe operation of nuclear power stations—of course, it would have cost more to close them down than to keep them open. I strongly believe, however, that we should have a UK coal industry, and I hope that what the Government have done in the past, as well as what we shall do in the future, underwrites that commitment in tangible terms.

Adam Price (East Carmarthen and Dinefwr): Does the Minister recognise that most people in the industry believe that it is on the brink of collapse? Will he tell us why we are not going to get, as part of the draft 10-year

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plan, the maximum flexibility with all three forms of aid available, so that we can combat all the uncertainties that we will face?

Mr. Wilson: I do not think that people in the industry believe that it is on the verge of collapse. That kind of talk does not help anyone, including the people who work in the industry. It is true that, as a result of the run-down of the coal industry and its privatisation in the 1990s, there is now only a relatively small number of deep-mine pits operating. Some of those are threatened by economic circumstances, some by geological circumstances. I would prefer, however, to consider them on a one-by-one basis. Since 1997—and certainly since I came into this job—when we have been asked to help and when it has been practical to do so, we have done exactly that. Let us look at the individual circumstances of each of this relatively small number of pits. The investment aid scheme, which we have had authorised by Brussels, and on which we are now consulting, would be another weapon to use in this battle.

David Taylor (North-West Leicestershire): The 450 workers at Daw Mill colliery, some of whom are my constituents, face an uncertain future because of geological difficulties, which could be eased by short-term assistance. Does the Minister accept that the Department of Trade and Industry cap of £5,000 per job is inadequate for that purpose? Should we not be able to devise a more appropriate aid regime? Why cannot we ring-fence some of the generating market for coal fired power stations with clean burn technology?

Mr. Wilson: On my hon. Friend's last point, I have no doubt at all that the future for coal lies in clean burn technology. That is something that I am anxious to promote, both domestically and internationally. On the point about the cap, that was placed on the amount that any one producer could receive. Under the operating aid scheme, UK Coal received an amount up to that cap. I extended the scheme until the end of this year, but, if we were going to extend it further, such an extension would have had to be applied for by the end of October. The difficulties that have arisen at certain UK Coal pits recently are, therefore, not covered by the operating aid scheme. We think that a better avenue to pursue is the investment aid scheme, and that was also the view of the industry in the consultation process.

Mr. Dennis Skinner (Bolsover): Does the Minister agree that North sea oil and gas reserves are running out, and that we have a massive balance of payments deficit on our trade? Things are going to get even worse now, with our reliance on imported fuel of one sort or another. Money is being handed out to British Energy, as it has been handed out in the past to UK Coal and to Richard Budge. Does it not make sense to say that we will take over the industry—this small coal industry—for £70 million? That price is minimal compared with the cost of keeping on shoving money into the pockets of the coal owners.

Mr. Wilson: I am sure that my hon. Friend has spotted the dichotomy between the previous request—that we should shovel more money into the pockets of

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the coal owners—and his approach, which has the virtue of simplicity. However, his basic point on the increasing dependence on imported fuel is extremely important, whether it is coal or gas. The White Paper must consider all that in the context of security of supply and this country's strategic interests in terms of energy and in the wider sense. I certainly believe that we need, and should have, a continuing coal mining industry. No one on the Labour Benches has anything but contempt for how the coal industry was treated in the decade before 1997. We have had to pick up the pieces and we have shown considerable commitment in doing so.

Liability Insurance

2. Brian Cotter (Weston-super-Mare): What recent discussions she has had with manufacturing firms on the cost of public and employer's liability insurance cover. [83603]

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): DTI Ministers have had a number of meetings with firms and with business bodies at which the cost of public and employer's liability cover was discussed. I recently met representatives of the Federation of Small Businesses and the Forum of Private Business, both of which raised the issue. My DTI colleagues have met other industry bodies.

Brian Cotter : Bearing in mind the fact that Axa Insurance has today announced that 210,000 small firms are operating without employer's liability, and therefore illegally, will the Minister ask the Department for Work and Pensions to carry out its review urgently, ensure that it covers issues such as competitive practices and consistency of cover, and ensure that firms are given proper notice when the insurance basis is to be changed?

Nigel Griffiths: I will certainly ensure that my colleagues in the Department for Work and Pensions are aware of those issues and carry out a comprehensive and effective review.

John Cryer (Hornchurch): I have had discussions with companies in my constituency, mainly building and scaffolding firms which report that their premiums are going up four and five times over a year. That is clear profiteering by the insurance industry, which blames 11 September, but what 11 September has to do with scaffolding I cannot imagine—it escapes me. The industry is using 11 September as an excuse, and unless we intervene to stop this naked profiteering, small and medium-sized firms will go under because of it.

Nigel Griffiths: My hon. Friend makes a good point. On 25 September, my hon. Friend the Minister for Energy and Construction met the National Federation of Demolition Contractors, which put points forcefully to him. It is important that spurious reasons are not given for driving up the cost of insurance. We have been working with the Association of British Insurers and the British Insurance Brokers Association to examine how

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small and other firms can be covered by liabilities insurance and how giving spurious reasons for not providing cover can be avoided.

Mr. Henry Bellingham (North-West Norfolk): The position is obviously extremely serious and I am grateful to the Minister for what he is doing, but there are a lot of horror stories out there. What does he say to the Humberside family run steel fabrication business, which is, I believe, in the constituency of the Deputy Prime Minister, that has been forced to make five people redundant and cease trading because its combined public liability and employer's liability bill has increased from £3,600 to £28,000?

I am well aware that the Minister cannot control market forces, but has he spoken to the Chancellor about the huge £300 million increase in the insurance premiums tax take? Could a cap be put on that take and some of the surplus paid back to business? Could not that money be used to provide a pool of employer's liability insurance, backed by the Government—

Mr. Speaker: Order. The question is far too long.

Nigel Griffiths: I welcome all practical and constructive suggestions, and I have met my colleague the Financial Secretary as well as my right hon. Friend the Secretary of State for Work and Pensions on this matter. The House will have been pleased to hear the Chancellor announce last week a review of the employer's liability insurance scheme. The impact on manufacturing and on the type of firm referred to by the hon. Gentleman will be important parts of that review.

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