Coal Industry Dispute

Part of Opposition Day – in the House of Commons at 3:57 pm on 7th June 1984.

Alert me about debates like this

Photo of Mr Stan Orme Mr Stan Orme , Salford East 3:57 pm, 7th June 1984

No, I shall not give way. The Government are prepared to see over 20,000 serious losses this year alone. Such a programme breaks all the agreements that have been made during the past 10 years. It is designed to leave the coal in the ground and the miners idle above it. It is economic, financial and social folly of the worst sort. We know from our experience of the 1960s that it is economic folly to close pits before they are exhausted. I have already confirmed that that is so. Pits that are now economically viable could prove to be uneconomic tomorrow because of the Government's policy. The policy of the Government and the NCB is not confined to closing pits that have been worked out for it extends to pits which have many years of working life left in them.

"Plan for Coal" is based on investment in an expanding industry. It accepts that pits will close through exhaustion and possibly through exceptional mining difficulties, and no one denies that possibility. The plan states that an average loss of capacity of 3 million tonnes a year is likely through exhaustion, but that was never considered to be a target to strive for; it was an expectation and even a fear. The plan stressed the need for replacement capacity to compensate for exhaustion and to allow the industry to maintain growth. In the 1960s pits were closed when it was believed that our energy future was in oil. That wrong assumption has taught us that we must not close our options, and that means not closing unexhausted pits.

As the war in the Gulf escalates, are the 1960s to be repeated in an age of recession and high unemployment? A crisis in oil is on the cards. As the stockbrokers Simon and Coates argue, if the Gulf were blocked and even if other OPEC producers made up half the shortfall, about 5 million barrels a day would be lost. Simon and Coates comment: In 1979–80 a 5 per cent. shortfall in supplies produced a 150 per cent. increase in official prices …This time a 5 million barrel a day shortage would represent almost 15 per cent. of OECD demand, or 10 per cent. of total world demand, and so heavy speculative pressure on the spot oil markets could quickly allow 'hawks' in the OPEC cartel to put upward pressure on official/contract prices. The Government have miscalculated the cost of their strategy, the mood of the miners and the effect on the economy.

The Prime Minister says that we cannot continue to subsidise miners to produce uneconomic coal, but if pits are closed, taxpayers will pay more, not less. We would have to replace lost capacity with imported coal from, for example, Australia, which might produce a saving for the NCB and CEGB, but the loss in taxes and the costs of unemployment and social security benefits of cutting 20,000 miners' jobs would more than wipe out that saving. In addition, the indirect effect on jobs in mining communities would be twice as great—doubling the cost to the Exchequer. The cost of lump-sum redundancies would be hundreds of million of pounds. Even the costs of the present dispute are so excessive that it would be cheaper to keep the miners in work.

The weekly cost to the Government of the coal dispute is about £70 million. The loss to the coal board, the additional expenses to the CEGB, the lost taxes from the striking miners, the revenue lost to British Rail, and the cost of the massive police operation present the Government with a serious economic crisis. That has already had an effect on the public sector borrowing requirement. In March production fell by 1·5 per cent. because of lost coal production. The position can only get worse as the effects are felt throughout the country. Even the City realises how dangerous the Government's strategy is—resulting in fluctuations on the stock exchange.

A further indicator of the severity of the dispute is seen in the latest balance of payments figures. The figures for April show the worst monthly deficit ever. The balance of trade in oil deteriorated by £400 million because the CEGB burned oil to conserve coal stocks. Last month the Government used our oil not to pay for unemployment, but to fight the miners.

Such facts usually move the Government into action, and they should do. The Government should realise that the cost of pit closures and redundancies will be most severe and long lasting for the individuals and communities involved. Coal mines are not like offices or factories. When they close the entire community closes with them. In Kent, Scotland, south Wales, the north-east, Lancashire and even the midlands the loss of income to miners' families will create ghost towns of their communities.