Orders of the Day — Coal Industry Bill

Part of the debate – in the House of Commons at 12:00 am on 25 November 1965.

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Photo of Mr Michael Alison Mr Michael Alison , Barkston Ash 12:00, 25 November 1965

I am grateful to the Minister for correcting me. I was working on the Coal Board's Press hand-out, which observes that about half will be able to go to mining jobs within daily travelling distance of the mine where they now work and that another 25,000, bringing the total to 80,000–85,000, will be able to leave to go to other coalfields. Normal wastage in transfers to other industries will mean that very few of the remainder will be without jobs, though they will not, of course, have jobs in coal mining.

The wastage of approximately 13 per cent. per annum, the national average, will surely be very much higher in respect of that group of miners whom we are now considering in terms of redeployment.

Here I would like to make a reference to the National Plan, which the Parliamentary Secretary may not have, but perhaps he could check up on what I think is a real discrepancy in the prospective wastage in coal mining as given in Parts I and II of the Plan. From page 38 of Part II of the Plan it will be seen that the National Coal Board estimates that the annual wastage will rise to 29,000 a year. In the first part of the Plan we are told that the annual wastage will drop from 27,000 to a substantially lower figure. Which figure is correct? Will wastage decrease or increase? The lower figure quoted in the National Plan is on page 122 of Part I. But in spite of these uncertainties about the effect on manpower of redeployment, the figures surely indicate, whatever else they may mean, that in coming years—and I believe that this is true of my part of Yorkshire—we shall be led to a manpower crisis. I use the term advisedly, as I hope to show. It is ironic when one considers the pious air of protest of the Prime Minister when he was in Opposition and when he criticised the Government of the day for allowing the coal-mining industry to lose 150,000 miners a year. But that policy is now being precisely paralleled by his own Government who are stepping up the rate of wastage to an even higher figure. The Prime Minister has in addition sponsored a policy of importing at least as much oil as in the past although he criticised such a policy when he was in Opposition with all the eloquence at his command.

May I comment on the financial aspects of the White Paper and the Bill, because I believe that the financial troubles are intimately connected with the manpower crisis which we have to solve. The evidence of this is not far to seek. My hon. Friend the Member for Yeovil (Mr. Peyton) referred to the rather depressing financial results for the first six months of this year in which the deficit looks like rising from £18 million to £44 million in the first half of the year alone, which represents a deterioration of over £25 million. It is not without interest that the National Coal Board, in commenting on this unsatisfactory financial result, stated that the improvement in productivity, for which we all praise the industry—it is an improvement which has been going on for a long time— was more than offset by the continuing loss of manpower, increased absence and higher costs, including wages and salaries and National Insurance. The question which we have to face is whether the White Paper and the Bill hold any fundamental prospect for the improvement of this financial position. I have the impression that the Government's overall economic policy will not help the industry at all in this respect.

May I put a question to the Parliamentary Secretary? It may be unfair to refer him to a document which is not immediately available to him, but if he took the opportunity to look at it, it would be enlightening. The White Paper says that we are to have written off about £20 million to £30 million of interest charges—a burden which will be passed to the taxpayer, having been taken off the back of the Coal Board. As far as I can see, this includes the £15 million which has been allowed for a price increase which the Government will not in fact permit on account of the First Secretary's economic policy.

I must say in passing that it is economic double-talk to pretend that in overruling the Coal Board in their wish to raise prices in order to meet their rising costs, the Government will not affect everybody in exactly the same way. The £15 million will go straight on the back of the taxpayer if it is taken off the back of the consumer of coal and electricity. It is rather like telling the bakers that they must not raise the price of a loaf of bread but that they could put a special Purchase Tax on it and scoop up the Purchase Tax. It has exactly the same effect. The burden still exists and must be borne. But there is an additional burden—the potential liability, to which the White Paper refers, of an extra £25 million deficit over the year. I think that that is correct, but perhaps the Parliamentary Secretary will check my figure. We therefore have a potential deficit this year of £20 million to £30 million in interest charges to be passed on to the taxpayer, with a possible addition of £25 million arising from operating costs over the year. This makes about £50 million which the taxpayer has to bear. This is a very substantial item. Now perhaps the Parliamentary Secretary could answer this. Is it in addition to or instead of the very large estimates which were contained in the Chancellor's financial statement earlier this year? I refer to Command Paper 2624, a White Paper relating to loans from the Consolidated Fund by which the Coal Board is to be allowed to borrow £53 million net from the Chancellor of the Exchequer for the year 1965–66. We read, in an interesting footnote to this item, that This figure is based on present prospects. These are now under review. Presumably the White Paper which we are discussing and the Bill represent this review. Is the figure of £53 million net borrowing from the Chancellor by the National Coal Board in this year to be substantially diminished or is it a burden to be borne by the Chancellor in addition to the interest payments and the additional deficit to which I have referred?

It appears that the Minister could well present the Chancellor with a bill for £100 million in the coming financial year, which is a staggering bill. We all know that part of it will be financed not by taxation but below the line by the floating debt. The Government would be holding down the price of coal and inflating the economy at the same time, which is a nonsensical combination. I hope that the Parliamentary Secretary will enlighten us on this point.

May I sound a slightly more optimistic note by turning away from the gloomy financial position to the prospects of the coal industry, particularly in Yorkshire, which I believe are outstandingly rosy and hopeful. I prefer Lord Roben's optimism to the rather pessimistic note struck in the National Plan and in the White Paper on Fuel Policy. The developments which we have in Yorkshire certainly make it possible to share this optimism.

May I point out to the House why this is so? In the first case we have the coal. But in addition to the coal there are developments in the West and East Riding of various ancillary investments which are intimately connected with the use of coal. Very near my constituency we have three of the largest power stations under construction which have been built anywhere in Europe. The power station at Drax is certainly to be the biggest in Europe—5,000 mW. Eggborough is under contruction, and at Ferrybridge, which was involved recently in the accident to the cooling towers, there is also a giant power station. Thus adjacent to the coalfield we have these colossal power stations geared to the coal industry. Moving further to the east we have the Port of Immingham which is to be substantially extended precisely for the purpose of exporting coal.

Here I should like to turn to what I regard as some further loose statistics about coal exports. The White Paper on Fuel Policy explicitly states that the coal exports for the industry cannot be put higher than five million tons a year by the year 1970. I am certain that all my hon. Friends and some hon. Members opposite feel that this is a depressingly low figure. It is striking that in their Annual Report the National Coal Board propose to double that prospective figure. They state that, "In addition, the value of coal exports during the last five years has been over £100 million, and the Board aim to increase exports to about 10 million tons a year. Which is correct—the figure of 5 million tons of the National Plan or the Coal Board's target of 10 million tons? These do not add up at all. A 100 per cent. difference in target is not satisfactory.

We should aim at the 10 million figure and I believe that that could be achieved with the assistance of the Yorkshire coalfields, new trunk roads in the East Riding from the Great North Road and the development of the Port of Immingham. However, let us be certain that the Government are behind the Coal Board at aiming at this figure and that it is not to be left at 5 million tons.

The question of the electricity industry's consumption of coal is essential to the prospects of the coal-mining industry and, in this connection, we must note the serious discrepancy in the National Plan on this matter. If one looks at page 41 of Part II of the National Plan, which refers to the electricity generating industry, one finds this striking and rather disturbing statement: The industry"— that is, the electricity industry— was originally asked in making its estimates to assume that consumers' expenditure would rise by an average of 2·7 per cent. per annum I stress that figure of 2·7 per cent. The implications of increasing that figure to 3·2 per cent.—the National Plan forecast—will be considered by the industry at its next regular review of future requirements. One can deduce from that that the estimates of coal requirements are based on an anticipated sale of electricity which is about 20 per cent. below what would be the case if the electricity industry was geared to the National Plan target of 3·2 per cent. per annum. A 20 per cent. difference in target will make a substantial difference to the quantity of coal required for the industry.

Is the prospect of the sale of electricity based on a 2·7 per cent. increase in consumption or 3·2 per cent.? If it is 3·2 per cent. can we not expect a higher target for coal consumption by the power stations by 1970? I believe that the National Plan under-estimates the amount of coal that will be required by the electricity industry, and under-estimates it seriously. I hope that the Parliamentary Secretary will give an encouraging answer on this issue.

I return to the manpower problem, which I believe is the central difficulty of the whole industry. It is the strategic and vital link between the redeployment, as it is now called, which we are discussing today and the prospects which we all hope and believe the coal industry will have in future. The Minister must offer some prospects of rational and realistic changes in terms of the wage structure of the industry.

I could quote from many sources simple figures to demonstrate the importance of this problem. Let me start with what is called "voluntary wastage". The degree of voluntary wastage in the Yorkshire coalfield is now what can only be described as catastrophic. For the first 32 weeks of the current year the wastage in that area reached the staggering total of 6,300 men, which is well over 1,000 higher than any other part of the country—this in the coalfield on which practically the whole future of the industry, coupled with some coalfields in the East and West Midlands, rests. We have far and away the highest level of voluntary wastage. This is catastrophic when, at the same time, we are deploying thousands of millions of pounds of capital to develop power stations, to expand ports and to capitalise the coal industry. What do the Government intend to do to arrest this wastage in a prosperous area like the West Riding?

The reason for the wastage is not hard to find. Average weekly earnings in the Yorkshire coalfield in 1964–65 were £18 1s. 6d. a week, not nearly high enough to keep men in the industry. Surface workers in particular were taking home an average of £14 a week—[Interruption.]—and I would be happy to debate this matter with hon. Gentlemen opposite at any time. I gather from the interruption that the figure is less than £14, which makes the problem even more serious.

A labourer working on a power station project in my constituency can take home £30 to £40 a week with the overtime permitted to him. We are, or will be, using between 5,000 and 7,000 men at these power station projects and if the Minister thinks that miners in the North-East will go to the West Riding and settle down with an income of 15 quid a week he is very much mistaken. They will instead go to the power station and other capital projects where they can earn much higher wages. It is not good enough for these crucially important working men, technicians and experts, to be offered a fraction of what they can earn as labourers on the big construction sites. Further, redeployment will not help unless we have a wage structure for surface workers as well as those working underground, with wages at least comparable with other industries.

We have a chance in Yorkshire to lead not only the world but England, which is a more difficult problem, in mining and the use of coal. It all depends on the satisfactory recruitment and maintenance of manpower. We are losing that manpower at present and we can only keep it by a more rational wage structure in relation to local wages. I hope that the Minister will offer good prospects of this coming about.