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

As I have said, the £20 billion includes all grants under all headings, plus the capital injected into the industry by the taxpayer and subsequently written off as lost.

I turn now to British Coal's relationship with the privatised generators. As I said earlier, there is no tripartite agreement between the Government, the generators and British Coal to reduce coal purchases by 15 million tonnes or by any other figure. The generators and British Coal are about to embark on the final stage of their negotiations, and those negotiations will settle the level of future purchases. I must make it clear that the Government will not force customers into long-term contracts for British coal in order to provide artificial support for the industry. I am confident that if British Coal continues to restructure its operations, to cut costs and to introduce new and more flexible working practices, the generators will choose to retain British Coal as their major supplier. They are hard-headed business men and they know the dangers to their business of being over-reliant on foreign suppliers, just as they have learnt from hard experience, four times in the past 20 years, the dangers of total dependence on a single United Kingdom supplier.

I listened to the sudden discovery by the hon. Member for Sedgefield that coal prices in world markets could go up, that Australia is quite a long way from the United Kingdom and that China is not planning to be a major supplier. I am glad the hon. Gentleman is finally catching on; these things have been known to me and to other members of the industry for years and they will form part of the considerations which will affect the attitudes of the generators as they come to place their business. The idea that the hon. Gentleman and his juvenile team of researchers have just stumbled on an amazing truth shows how naive and ill-informed he has been to date—