Coal Industry (State Aids)

Part of Opposition Day – in the House of Commons at 10:14 pm on 5th February 1986.

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Photo of Mr David Hunt Mr David Hunt , Wirral West 10:14 pm, 5th February 1986

We believe that in setting the objectives the Community has got the overall thrust of its policies correct. The Government are determined to achieve at the March Energy Council — I shall be interested to hear what my hon. Friend has to say if he has an opportunity to develop his points more fully—a system which not only follows through in the direction of the objective which we support but does so in a way which will enable the National Coal Board to achieve the break even point and will enable the regime which is introduced to be workable.

The Commission, in putting forward the proposals, has sought to increase its control over the granting of aids by member states. Its concern, rightly, is that aids should not cut across the precepts of the Common Market. Member states, on the other hand, especially the United Kingdom and the West Germans, are equally concerned to ensure that Brussels should not impose unacceptable constraints upon us in respect of matters which are essentially for us to determine. We have been making our views very clear and shall continue to do so as negotiations continue.

The general objective of the draft decision marks the greatest difference from the existing regime, and I have already referred to that in response to my hon. Friend the Member for Darlington (Mr. Fallon). The existing regime was based largely on the notion that the Community's coal industry still had to face a major reduction in capacity and that Government support would be justified throughout such a period. The new decision sounds a more positive note, which the Government can entirely endorse. It looks forward to a more competitive coal industry able to open up new economically viable reserves. This will provide an appropriate framework for the Government's continued support for the NCB's investment in the industry and with the social costs of restructuring. Much of the NCB's investment goes to improve existing long-life collieries. As hon. Members will be aware, last year the board announced many investment programmes to open new faces, install new machinery and computerise the monitoring of mining operations.

I hope that hon. Members will get the opportunity this evening to pay tribute to the magnificent efforts of men and management alike in achieving, for the first time in the board's history, deep mined output in excess of 3 tonnes per man shift. That is a tremendous achievement, and I hope that much reference will be made to it in the debate tonight.

With restructuring and improved productivity performance, the NCB will be on target for break-even in 1987–88 and thereafter able to progress to the establishment of a secure and self-sustaining industry.

I am sure that many hon. Members have important points to raise this evening, and I do not want to take up the time which is available for discussion. However, perhaps I could just remind hon. Members of the key points which arise from the new state aids proposals.

First, there is nothing new or sinister about the state aids regime. This proposal will replace a regime that has been in existence in various forms since 1965. Secondly, the proposal does not involve the payment of Community funds to member states. It allows member states to support their own coal industries without infringing the European Coal and Steel Community treaty. It would, of course, be open to us to refuse to sign the new regime, but that would be to no good purpose as it would mean that our payments of operating aids and social grants would be illegal. Thirdly, it is important that the new regime should be workable within the individual member states most concerned, and for as long as necessary. The United Kingdom's clearly expressed objective is to achieve a flexible and workable regime.

Those objectives are entirely consistent with those of our own coal industry. The regime will enable us to meet our targets.

The objective of my right hon. Friend the Secretary of State for Energy, when this matter goes to the March Energy Council, will be to ensure that the new regime gives maximum flexibility to member states in the challenging task of creating economically viable Community coal industries which can compete successfully in the world market.