Coal Imports

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

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Photo of Mr James Cran Mr James Cran , Beverley 12:00 am, 13th June 1988

To ask the Secretary of State for Energy how many tonnes of coal were imported into the United Kingdom in 1987; what proportion this represented of total domestic coal consumption; and what were the comparable figures for 1982.

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

Some 9·8 million tonnes of coal were imported into the United Kingdom in 1987, representing 8·5 per cent. of total inland consumption. In 1982, comparable figures were 4·1 million tonnes and 3·7 per cent.

Photo of Mr James Cran Mr James Cran , Beverley

Will my hon. Friend confirm that industrial and other users should continue to have access to the cheapest sources of coal, irrespective of whether they are in the United Kingdom? Does he agree that the United Kingdom's future international competitiveness may—I stress "may"—depend on that policy?

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

I can confirm that the Government have no plans to prevent a privatised electricity industry from buying coal in the best market. We say that because we are confident that British Coal can become fully competitive so that the electricity industry will want to buy British.

Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw

The Minister has just admitted that imports of coal have trebled in five years. How much of that coal came from South Africa? If the new port opens at Killingholme, how many miners' jobs in pits in my constituency will be lost because of massive importation of coal from South Africa, Bolivia and other countries run on cheap and slave labour?

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

Speaking from memory, I believe that South Africa provides 0·2 per cent. of inland coal consumption and 2 per cent. of all imports. A significant proportion of imported coal is coking coal. If flexible working arrangements could be worked out between the unions and British Coal, Margam would be able to go ahead and coking coal produced there would substitute for a large proportion of imported coal.

Photo of Mr John Marshall Mr John Marshall , Hendon South

I welcome the fact that my hon. Friend has said that he will not prevent a privatised electricity industry from buying in the cheapest market. Can he be more positive and say that he will encourage it to buy cheaply, as that would be good for customers such as pensioners, and good for employment in energy-using industries?

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

The Government would much prefer coal used for electricity generation to be bought from British coal sources. We say that in the belief that British Coal should be fully competitive. We shall not prevent customers, particularly the electricity industry, from buying abroad, but we shall do everything we can to encourage and assist British Coal to become fully competitive so that it will be able to take on all corners.

Photo of John Prescott John Prescott Shadow Secretary of State, Shadow Secretary of State for Energy

Has the Minister read the financial report on the coal industry by Prior and McCloskie, which says that, within six years, world prices will begin to rise, when British Coal prices are falling, making present-day uneconomic pits economic? Does that not expose the short-term nature of the Government's policy of encouraging large-scale imports, motivated largely by the desire to privatise a smaller, more profitable coal industry at the direct expense of Britain's long-term energy interests, redundancies and pit closures?

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

Nobody who listens to the hon. Gentleman would imagine that the Government have allowed £1 billion of taxpayers' money to be spent on the industry each year, or allowed £6 billion of investment to be made in the industry. Anybody would think that the Government were allowing the industry to go out of business. Quite the converse is the case. The Government are building the industry into one that is able to take on all comers, particularly for the reason that the hon. Gentleman mentioned—the unpredictability of the future price of coal. Coal prices may well rise. In that event, British Coal will be even more profitable than we want it to be immediately.