Orders of the Day — Coal Industry Bill

Part of the debate – in the House of Commons at 9:21 pm on 12th December 1983.

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Photo of Jim Wallace Jim Wallace , Orkney and Shetland 9:21 pm, 12th December 1983

I shall not follow the hon. Member for Derbyshire, North-East (Mr. Ellis) down the path of the history of the coal industry, on which he is more expert than I shall ever be. Like the hon. Member for Tatton (Mr. Hamilton) I do not have a coal mine in my constituency. Nevertheless, that is where the similarity ends. I do not agree with him that the Bill will put taxpayers' money down the drain, or down the pit, as he described it, and that it would give the taxpayer no return. At the conclusion of his contribution he said that he spoke with sincerity. That is surprising, because he had already said that he would support the Bill. If he is sincere, and he believes that taxpayers' money will go down the drain, his duty as a legislator is to have the courage of his convictions and to oppose the Bill.

However, that is not the view of my right hon. and hon. Friends in the Liberal and Social Democratic parties. Although the Bill does not go as far as we would like it to do, we support it because we realise that it is essential for the coal industry to get the level of support proposed in it.

When the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) opened the debate he mentioned the difficulties facing the coal industry. Although those of us who sat in Committee did not always agree with the Under-Secretary's replies, we recognised his sensitivity to many of the problems that were raised during our debates. It contrasted with the rather jaunty way in which the Secretary of State for Energy opened the Second Reading debate, which, had one not been aware of the difficulties in the coal industry, might have led one to believe that it was in a buoyant state.

The coal industry is in difficulties because of the lack of demand caused by the recession and by the increasing replacement of coal-generated electricity with nuclear power. Sizewell has already been mentioned and I shall not discuss nuclear safety further. If nuclear power generation is cheaper than electricity generated through coal-fired power stations, it is only marginally so because at present we can buy uranium very cheaply. It is only about 10 years since the western economies had a collective cardiac arrest when oil prices quadrupled. We should be shortsighted if we depended on a fuel source that is cheap and appears to be secure, because that may not always be the case.

There must always be a major role for coal in meeting Britain's energy needs. In many of the debates in Committee and on Second Reading it was said that we have coal reserves for 300 years, but our coal will last for 300 years only if we have a sensible view on pit closures. As the hon. Member for Midlothian (Mr. Eadie) said, once a pit is closed it is difficult, and sometimes impossible, to reopen it. The pit is liable to flood, and unacceptably dangerous levels of gas build-up. If pits are closed for purely economic reasons today—pits that may well be economically viable in future—we might bring forward the date when our coal reserves run out.

The hon. Member for Tatton said that it would be in the long-term interest of the industry to close 20 pits. But which 20 pits should we close? The 20 least viable pits this year are not necessarily the 20 least viable pits of last year, or those of next year. The long-term interest of the country would be served better if we proceeded with a policy of pit closures that will ensure that the maximum extractable reserves are made available to future generations.

Clause 2(3) relates to the withdrawal of grants to promote the sale of coal to the electricity boards and the hon. Member for Midlothian mentioned the crisis in Scotland. In Committee the Under-Secretary of State assured us that that grant would be subsumed in the overall deficit grant, and that negotiations were taking place between the National Coal Board and the South of Scotland Electricity Board about longer-term contracts for the take-up of coal from Scottish mines. The impression that I gained from the Minister's reply was that the present downturn was only temporary and was principally due to the use of gas condensates at Peterhead. Perhaps the Minister will comment tonight on the fears expressed in many quarters in Scotland that when Mossmorran comes on stream, the coal industry will not necessarily make up the ground that it lost because of Peterhead.

The Committee paid considerable attention to pit closures. It would appear from clauses 3 and 4, which deal with grants in connection with pit closures and payments to redundant workers, that some pits must close. It is generally accepted in the House that when pits become exhausted, or when they reach a stage where safety standards are no longer good enough, they must be closed. However, it is regrettable that the atmosphere pervading the coal industry at present is one of fear that a substantial number of pits must be closed. That fear could be dispelled by the Minister if the Government adopted a more encouraging and positive tone.

Although it is accepted that some pits must close, the announcements will not be met with so much fear if they go hand in hand with reassurances from the Government, backed by sufficient financial assistance, that old capacity will be replaced by new capacity, that there will be a programme of investment, and that new technology will be introduced to make mining safer and to make existing pits more efficient.

As this Bill goes some way towards that aim, I welcome it. However, it does not go far enough. Not only should we provide financial support to the coal industry, but we could provide even more support if there were a general turnround in the Government's economic policies, which have led to a great reduction in the demand for coal, and which have led the coal industry even deeper into financial troubles. Only with such a turnround in policy, and only when Britain's economy is growing again and there is more demand for coal, will the coal industry have a more assured future.