British Coal

Oral Answers to Questions — Energy – in the House of Commons at 12:00 am on 13th June 1988.

Alert me about debates like this

Photo of Mr Robert Adley Mr Robert Adley , Christchurch 12:00 am, 13th June 1988

To ask the Secretary of State for Energy when he next expects to meet the chairman of British Coal; and what he expects to discuss.

Photo of Alan Meale Alan Meale , Mansfield

To ask the Secretary of State for Energy when he last met the chairman of British Coal; and what subjects were discussed.

Photo of Mr Greville Janner Mr Greville Janner , Leicester West

To ask the Secretary of State for Energy when he last met the chairman of British Coal; and what topics were discussed.

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

My right hon. Friend and I meet the chairman of British Coal regularly to discuss all aspects of the coal industry.

Photo of Mr Robert Adley Mr Robert Adley , Christchurch

Notwithstanding the fact that I had a tooth fall out during lunch, is my hon. Friend aware that the Secretary of State for Transport, in announcing his willingness to accept closure of the Settle to Carlisle line, said that every Government Department would do its best to see that the line stayed open? As British Coal has a vested interest in selling coal for use by the steam locomotives travelling on that line, and as it has already made substantial contributions in that regard, will my hon. Friend take an opportunity to discuss with British Coal the need to co-operate with the Government's efforts to keep the Settle to Carlisle line open?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

I congratulate my hon. Friend on raising the subject of the Settle to Carlisle line under this question, particularly given the fact that one of his teeth fell out on his way to the Chamber. I commiserate with him. British Coal has sponsored a number of steam train runs on the Settle to Carlisle line. I will ensure that my hon. Friend's views are made known to the chairman of British Coal, but, as my hon. Friend will know, British Coal is not in a strong financial position to do very much more.

Photo of Mr Michael Welsh Mr Michael Welsh , Doncaster North

When the Minister meets the chairman of British Coal, will he discuss coal supply, and whether it is better to buy British rather than foreign coal? Will he make it plain to the chairman that he would not like to see foreign coal imported cheaply in the short run, if, when it runs out, the domestc coal industry will be unable to supply our needs?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

The hon. Gentleman has made a good point, which will no doubt be borne in mind by those who are laying contracts for coal on behalf of the electricity industry. One of the great advantages that British Coal has in any negotiations about buying coal is that the spot market may change in the future. A number of analysts say that it could well rise. British Coal is able to provide on a secure basis, which foreigners may not be able to do. World coal prices, however, are considerably lower than British coal prices, and there is therefore an onus on British Coal to make itself fully competitive, which we believe it should be able to do.

Photo of Mr Michael Colvin Mr Michael Colvin , Romsey and Waterside

My hon. Friend has made it clear that competitiveness is one of the matters that he would discuss with the chairman of British Coal, so that, if given the go-ahead. British Coal could supply coal to Fawley B power station. I hope that the power station is not built. Nevertheless, does my hon. Friend not regard it as an act of gross contempt by the CEGB to place orders for the generators before the public inquiry—which he has now sanctioned—into whether it will be built, has even started its sessions?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

I understand that my hon. Friend is right in that certain design contracts have been placed for generators, but it is for the CEGB to take a view on whether the risks involved in placing them—with, no doubt, penalties attached if it does not go through with them—are worth taking. As my hon. Friend rightly said, the inquiry has not even begun. Certainly the Government's view is that the contracts would in no way prejudice the outcome of the inquiry, one way or the other.

Photo of Mr Rhodri Morgan Mr Rhodri Morgan , Cardiff West

As a change from questions from toothless Tory Back Benchers, may I ask the Minister whether, if he agrees to the meeting with the chairman of British Coal, he will discuss with him the implications for the coal burn of the statement made in the business section of The Sunday Times yesterday and attributed to the heads of British Steel in a press briefing to City journalists in Port Talbot last Wednesday?

British Steel said that it was thinking seriously about buying its electricity direct from the generators, thus cutting out the electricity board, and possibly buying indirectly from the French nuclear electricity industry. Does the Minister realise that if British Steel does that, its private sector steel competitors, which use the electric arc method, will almost certainly do so as well? That would mean that 30 per cent. of the market for the South Wales electricity board would disappear overnight. What would be the consequences for the domestic electricity consumer in south Wales?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

Let me say first that anyone who has had to answer questions from my hon. Friend the Member for Christchurch (Mr. Adley) will know that he is not toothless. I do not know who the hon. Gentleman was referring to, but his description cannot be applied to my hon. Friend.

The question whether a large customer could buy direct from the generating company under a privatised industry is one that we are considering very carefully, in view of the privatisation and the regulations that we shall have to make. My prejudice, however, is in favour of allowing for the maximum competition and, if big consumers wish to buy direct from certain suppliers, to allow them to do so. That would put good competitive pressure on what are otherwise pretty well monopolist bodies—the local regional electricity board companies.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

Does my hon. Friend agree that one of the greatest contributions that could be made to the stability of the coal industry would be to give individual miners the opportunity of a substantial capital stake in their industry? Will he at an early stage have discussions with the chairman of British Coal, in the first instance to provide an opportunity for the miners to buy out pits that British Coal considers uneconomic?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

We have said that we are reviewing the limits to private capital currently imposed on the industry. The deep mines to which I think my hon. Friend was referring are limited to 30 men underground. I cannot yet tell my hon. Friend the result of the review.

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change)

When the Minister meets the chairman of British Coal, will he explain to him why Hinkley C PWR is not to be judged economically against coal, or even British coal? It is to be judged economically only against renewables. Will he explain in detail to the chairman of British Coal why, under the privatisation plans, he is willing to cosset nuclear energy but not coal, although productivity in the British coal industry is good?

Photo of Michael Spicer Michael Spicer Parliamentary Under-Secretary (Department of Energy)

We are not comparing like with like. Coal accounts for between 60 and 70 per cent. of all the sources of energy in this country, so, whatever happens, we are talking about a vast market. All that we have said is that in the interests of security and variety of supply we wish to ensure that there is a minimum level of non-fossil-based fuel sources in this country. To that extent, we shall ensure that a non-fossil-based fuel source exists in the future.