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Coal Industry

Part of the debate – in the House of Commons at 7:35 pm on 26th June 1989.

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Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere 7:35 pm, 26th June 1989

I shall give way in a moment, if the hon. Gentleman will allow me to make a start.

We have made it very clear that the privatised electricity industry, like any other business, will be free to choose its suppliers, and that includes its coal suppliers, but we have also made it clear that we want British Coal to win the bulk of the business and we believe that, on the basis of its own performance, it can. These are not just empty words. It is a sign of our confidence in coal's future that we have committed ourselves to the privatisation of the coal industry after the next election. That is not a commitment which we would make unless we believed that we were going to have something large, successful and worthwhile to sell. We will have a large, successful and worthwhile coal industry after the privatisation of the electricity industry, and after the next election.

Our confidence is firmly based on the industry's performance since the strike. In the year before the strike British Coal produced 105 million tonnes of coal at a productivity of 2·43 tonnes per man shift. Last year, 1988–89, British Coal produced 103 million tonnes at a productivity of 4·14 tonnes. Therefore, output fell by less than 2 per cent. over this five-year period, while productivity rose by over 70 per cent., and productivity is continuing to rise. So far this year it has been running at levels over 9 per cent., above the same period last year. At the end of last month British Coal achieved a new productivity record of 4·63 tonnes—that is nearly 12 per cent., up on the average for last year.