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17 Mar 2009 : Column 169WH—continued
9.52 am
Willie Rennie (Dunfermline and West Fife) (LD): Coal has been a key part of Fife life for generations, and never more king than in the kingdom of Fife. The connection between coalfields and communities in Fife has been broken in recent years. The last coal mine at Longannet closed in 2002, when there was a massive influx of commuters from Edinburgh, which changed the nature of the Fife community and the relationship with coalfields. That has had a significant impact on the coalfields’ viability and on the livelihoods of miners. I shall return to some of the issues involved.
There are few signs in Fife of its mining heritage. From the end of my road, I can see the Mary pit winding gear; there is a mining museum at Kinglassie; and at High Valleyfield there is a statue of mothers waiting for miners to return from the 1939 pit disaster. But those are the only connections to be seen in Fife, and that reflects the industry’s decline, which is one barrier that we must overcome if we are again to make coal central to the Fife economy. There have been applications for open-cast mines in recent years, which have faced vociferous opposition from people who have moved into the area. Unless we can re-establish that connection, we will not be able to exploit the resources under our feet.
David Taylor: Open-cast mining seems to be a separate issue north and south of the border. In England, particularly in the east midlands and north-west Leicestershire, open-casting is seen as the most environmentally despoiling and economically destructive of all mineral activities. The problem with the expansion of coal-fired generation is that the UK Coals of this world whisper into Ministers’ ears and—hey presto!—controversial applications are nodded through with weak environmental constraints imposed on them. Is that not the case in Scotland? It is not just middle-class people who have moved into an area who object; it is people who worked in pits that closed 10 or 15 years ago.
Willie Rennie:
I think that that is true. It is not just middle-class people who move into such communities who object. People who have lived there for generations also object to open-cast mining. The companies have a huge responsibility to up their standards and to reduce the environmental impact on the communities in which they exploit the coal. If open-cast mining is to continue, they must address those issues. An application for an
open-cast mine near Saline was approved by Fife council, but there is huge opposition from the people who live within 500 m of the site. The communities affected feel that the proposal has been foisted on them, so they are resentful. Down the road in Oakley, which is a former mining community, there is less resistance, because, I suspect, it has lived with coal for many years and does not see the negative impacts in the same way. The difference between the two communities is interesting. One is more tolerant of open-cast, but some people object because of the extra lorry movements and the dust and noise. A difference is emerging.
The mining companies must improve their standards substantially if we are to have more open-cast mining, but I want the coal beneath the ground in Fife to be exploited to the full, so that we can fill the gap between now and when renewables are up to speed, although mining could continue after that. We must ensure that we develop coal sustainably, which is why I am keen to see the development of carbon capture and storage technology. I endorse the comments of the hon. Member for Blaydon (Mr. Anderson) about the urgent need to implement the technology. The technology is supposed to be in place by 2014 and economically viable by 2020, but that is too long. There have already been delays, and the Minister has indicated that there will be an announcement not in 2009, but perhaps in 2010. Will that slip further away, and when will we get an announcement? Will the Minister tell us exactly when it will happen?
Bob Spink: The hon. Gentleman, like me, will have been deeply moved by the compelling speech made by the hon. Member for Blaydon (Mr. Anderson), who referred extensively to carbon capture and storage. I want to reinforce the point that the technology exists. Almost four years ago, the then Select Committee on Science and Technology produced a report with evidence showing that political will and investment were required from the Government to get it moving. It is not something that we are discovering today, because the Select Committee said that nearly four years ago.
Willie Rennie: That is the case, and I am puzzled why progress has taken so long. There are schemes in other European countries, but I am not sure how fast they are developing. The year 2014 is being talked about for implementation, but I do not know whether that is slipping or whether there are financial or regulatory hold-ups. Why has it taken so long, and why will an announcement be delayed until 2010?
I am keen, for local reasons, for the technology to be developed, because Longannet power station on the west tip of Fife is the second-biggest coal-fired power station in the UK, and could be the winner of the competition. It has easy access to the North sea and to the storage pipework for when oil and gas have been extracted. It also has a community that supports its power station and is keen for it to continue. I am keen for Longannet to win the competition and to know when a decision will be made.
Ms Katy Clark (North Ayrshire and Arran) (Lab):
The hon. Gentleman has experience of coal-powered stations from his constituency interests, and I support everything that he has said about the case for coal. My
experience from speaking to energy companies looking to build new coal-powered stations is that they believe that they will be reliant on foreign coal, because of its low sulphur content. Will the hon. Gentleman comment on that and on how we can ensure that the British coal industry has a strong future?
Willie Rennie: I shall come to locational charging in a second. We talked earlier about importing coal from Russia and China and the impact that that has on the people who exploit the coal in those countries. We do not have locational charging for the coal that comes from Russia or China. Why do we not have an extra charge for the importation of that coal from other countries, so that we can get some balance in the system and not compete on the lowest cost throughout the world? Ofgem does not have responsibility worldwide, so it will not implement such a scheme, but we need to consider the effect that importing cheap coal from other countries has on the industry in this country. That is why I would like to see some recognition of the cost of importing that coal—the transportation costs from other countries—so that we are not penalising mines in this country and over-supporting mines in other countries. We have hundreds of years of coal under our feet, and we need to consider exactly how we will exploit it sustainably for the future.
I am deeply concerned about locational charging in the United Kingdom. The crude formula exaggerates the impact of the costs of transmission of energy up and down the country. I am not necessarily against some form of transmission charge or locational charge, because we need to reflect the fact that energy is lost as it is transported down the line, but to have such an extreme formula, which penalises in an extreme form energy plants and emerging renewable power resources in Scotland, is unfortunate. It will restrict renewable energy resources and potentially hamper investment in new technology at Longannet and other power stations in Scotland.
I would like Ofgem to change the formula to reflect the fact that those power stations already exist and that we can invest in new technologies that have greater potential to allow the United Kingdom to be energy secure. If we continue the way we are going, we shall destroy the economic case for plants such as Longannet, and we will not have the supplies that we need in 10 or 15 years’ time, when we will be short of energy supplies before renewables are up and running at full speed and before we have been able to exploit new technology. I would like Ofgem to reflect on the exaggerated effect that the formula has on the plants that already exist in Scotland.
The figure for Longannet is staggering. It costs an additional £30 million to run Longannet power station because it is in Fife in Scotland as compared with Cornwall. It would be better to put it on a barge and ship it all the way down to Cornwall. It would be cheaper to run it on that basis than to continue to operate on the current basis—a super-barge would be needed to get it down there. It shows how farcical the situation is that a plant that already exists and that is the second-biggest coal-fired power station in the United Kingdom is penalised in such a way. It does not reflect the fact that the power station exists—it cannot just be knocked down and put somewhere else. I would like
Ofgem to reflect on that and to have a much more sensible, balanced approach that does not penalise either renewables or plants such as Longannet in Scotland.
Let me return to carbon capture. Chris Davies, an MEP in the European Parliament, deserves credit for the work that he has done to secure, through the emissions trading scheme, about €9 billion-worth of funding for new carbon capture technology, which will boost the future of coal in the United Kingdom. That funding will ensure that we invest significant sums in developing the technology, which could be developed into something much more efficient at a later stage. I am pleased that significant sums will be invested in carbon capture technology by way of the emissions trading scheme through the European Parliament and the work of Chris Davies.
There is a farcical situation at Longannet, because the Scottish Environment Protection Agency does not allow the power station to burn the coal that remains within the ash. There is a company called ScotAsh that takes the ash from the power station and turns it into grouts and cements. The ash has coal in it, and the coal can be extracted, but SEPA does not allow the power station to burn it, because it is regarded as waste. That is a complete farce—a complete misreading of the regulations. I hope that SEPA reflects on that and allows Longannet and other power stations in Scotland to burn that coal, which is being wasted. Tonnes of coal are sitting around and cannot be exploited. They are currently treated as waste, which is a situation that should be changed. If we are to secure coal for the future, we need to ensure that we overcome those barriers. If we do not, we will not be able to fill the energy gap that is coming down the track very fast.
10.5 am
Paddy Tipping (Sherwood) (Lab): I congratulate my hon. Friend the Member for Blaydon (Mr. Anderson) on securing the debate, and I want to reinforce some of the points that he made. His central theme is that coal—particularly indigenous coal—is part of a balanced UK energy policy, and he is right to stress the importance of coal.
The only plant being built at the moment, save for renewables, is a new gas plant. I am concerned about the fact that the dash for gas continues. The Department’s own estimate suggests that a worst-case scenario is that by 2020, 80 per cent. of our electricity could be generated from gas, 90 per cent. of which could be imported from places such as Algeria and Russia. There are real issues about security of supply.
My hon. Friend also talked about the health and safety record in the coal industry and he is right to talk about blood on imported coal. I just add one caveat: after years in which there were no fatalities in the mining industry in the United Kingdom, there have now been several. That is a stark reminder of the fact that men still give their health and their lives to keep us warm.
Mr. David Anderson:
May I back up what my good and hon. Friend has just said? Clearly, there are fatalities in the mining industry. I would never pretend that mining will ever be a safe job. The truth is, though, that the technologies that we use in this country are more
advanced than those used in other countries. Even the US technologies were decades behind Britain’s, but the technologies in China and Russia are centuries behind.
Paddy Tipping: I am sure that that is correct, but I just add the caveat to say that things have gone backwards rather than forwards.
Two challenges face the coal industry: the economy and the environment. I shall talk about both briefly. British miners are the most efficient in Europe. We ought to be backing them, not continuing to lay them off. There are immediate prospects for the UK deep coal industry. My hon. and learned Friend the Minister knows about the discussions on Harworth, where UK Coal is sounding new ground and looking for new reserves. I think that it will be successful. The difficulties are in funding that new development.
The company and the trade unions tell me that the cost of the development will be about £200 million. The Minister and his officials are well aware of that. Given the economic situation, the prospect of borrowing £200 million from the banks is remote, but there are other opportunities.
The European Investment Bank has been talked about. There have been initial discussions with the EIB, but they are not going well. The more support the Government can give UK Coal in its discussions with Europe, the better. Europe is not an obstacle in this; there have been subsidies from Europe in the past. Of course, the EIB lends on commercial terms. The more the Government can do to help, the better, but at the end of the day there may be difficulties with money from the EIB. That means that there needs to be a discussion—I know that there have been preliminary talks—about the notion of the Government acting as a guarantor in some way. We are serious about the fact that indigenous coal can help us with security of supply.
There need to be meaningful discussions with UK Coal about the prospect of underwriting. We are doing that in other industries, and the coal industry has a long tradition in that respect; indeed, the Minister is well aware of that because he represents a mining community and has been in direct discussions with UK Coal and the trade unions. We should at least consider such a proposal, and do so fairly quickly, because as my hon. Friend the Member for Blaydon said, the prospects at Welbeck are limited. Ideally, we should transfer the men who work there to the new Harworth prospects, because that would make sense.
David Taylor: My hon. Friend has mentioned that the Minister represents a mining area, and I believe that Daw Mill is in his constituency. The 600 men there produce well over 3 million tonnes of coal a year, so the pit is highly productive. Not all that far away, in north-east Leicestershire, there remain at least 800 million tonnes of coal, in what my hon. Friend the Member for Blaydon (Mr. Anderson) described as the vale of Belvoir coalfield. It is possible to provide the capital support that my hon. Friend the Member for Sherwood (Paddy Tipping) mentioned and to finish up with more secure, low-cost and high-quality coal from the coalfield that I mentioned. The Government could do more to support the growth of new mines in areas such as north-east Leicestershire.
Paddy Tipping: My hon. Friend has been a long-term advocate of Asfordby and opposed its closure vigorously. The point is simple: we can have a demonstration and reopen Harworth colliery, which will give a signal that it is possible to pursue other, more difficult prospects.
The second issue that I want briefly to discuss, which has been the subject of much comment, is carbon capture and storage. I am told, although there are different estimates, that China opens one new coal-fired power station every week. It does not matter where carbon is emitted, however, because it will have consequences for us all. As has been said, it will be in all our interests if we can develop cleaner coal technologies, particularly carbon capture and storage. Again, the Government have a good record on that, although it is a slow record and one on which we need to improve.
The competition to develop a new prospect—a demonstration plant—is way behind schedule, but I am more concerned about where the funding for such developments is, because I have looked closely at the Department’s new budget and I cannot identify any such money in it. That causes real concern in the industry. The hon. Member for Dunfermline and West Fife (Willie Rennie) talked about the money available in the European Union, which might fund 10 to 12 projects, and the Government have just looked at the implications for carbon capture and storage readiness for new plants in the context of Kingsnorth.
I know that the Minister is aware of what I am about to say, and he is in discussions with colleagues about it, but I simply say to him that we need to introduce a new package to take coal into the future. That would include an announcement on the demonstration plant and an attempt to get money from Europe. At the end of the day, we want not one demonstration plant, but three or four—that should be our aim. What is more, we should be looking at pre-combustion as well as post-combustion. Both have a role to play.
I hope that the Government will introduce such a package shortly and make an announcement about Kingsnorth. If I worked for E.ON, the company that is developing Kingsnorth, I would have real concerns. Its application for consent has been stuck in the Department for many months. I understand the reasons why, but if we want to give a signal on the future of coal, we should make an announcement as part of the package that I described.
There is one other issue that we need to consider. The private sector will not be able to develop carbon capture and storage infrastructure by itself. My hon. Friend the Member for Blaydon talked about the Yorkshire Forward initiative. The initiative at Kingsnorth has the potential to encourage other companies to join the project. Ultimately, however, matters cannot be left simply to the private sector.
In an age when the Government have shown themselves to be more interventionist—particularly with the banks—there are opportunities for intervention. We can help Harworth immediately and the UK coal industry in the longer term. We can introduce carbon capture and storage in the UK, as we all want, and that will have the potential to be spread internationally.
Miss Anne Begg (in the Chair): Order. I intend to call the Front-Bench spokespeople at 10.30. Two Members are seeking to catch my eye, and we have 15 minutes. I hope that that is a heavy enough hint.
10.15 am
Mr. William Cash (Stone) (Con): This debate is incredibly important, and I pay tribute to Labour Members for how they have handled the issue. For many years, the issue of coal has remained under the surface. It has been there since I first came into the House, almost 25 years ago to the month. In my maiden speech, with the coal strike raging around the place, I made my point about the coal issue, which was controversial in a maiden speech.
Shortly after that, I went to a massive NUM strike meeting in Hanley park in Stoke-on-Trent. I walked in, jumped on the platform, took the microphone from Arthur Scargill and told him to lay off my miners. There were about 7,000 people in the park, and I thought that it was about time that he was given a bit of his own treatment. The reality was that he and others were intimidating the Union of Democratic Mineworkers in the Staffordshire pits, and that needed to be corrected.
Subsequently, however, I voted against my Government on the closure of the pits, under Michael—now Lord—Heseltine, with whom I had many meetings and many serious discussions and rows. It seemed to me that we were doing something that would have long-term consequences and that the whole policy was wrong. As a member of the European Scrutiny Committee, I also noticed that Germany was giving massive subsidies of the order of £4 billion a year, while our coal industry was suffering. However, the UK had these amazing resources, which it should have been developing.
Mr. David Anderson: I know that a lot of north-east miners went to Stoke-on-Trent. One thing that I did not touch on—I wanted to avoid discussing issues from 25 years ago and to look forward—is that the deal at the end of the strike involved the Government setting up a review body, but they specifically denied the people carrying out the reviews the right to look at the social consequences of closure. As a result, places such as Stoke-on-Trent, where I and others who have spoken come from, have suffered massively at a social level.
Mr. Cash: One reason why I am still vice-chairman of the all-party group on coalfield communities is that I really believe in it. I do not want to get too nostalgic, but when I was a young boy in Sheffield, I used to go to Woodhouse on the outskirts of the city to play cricket at Welbeck. I played cricket and rugger with miners—that is the environment I grew up in. I therefore have a strong sense not only of the social side of things, which the hon. Gentleman correctly mentioned, but of the economic consequences.
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