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

In a moment.

As I told the UDM annual conference earlier this month, I am sure that the generators are well aware of the reputation of particular pits and coalfields for good industrial relations and for reliability of supply. The UDM pits have and deserve that reputation; others have not, and do not.

The hon. Member for Sedgefield asked why British Coal, having obtained a core contract, should not be allowed a first option to sell additional coal at the lowest price quoted by its competitors. That is what the hon. Gentleman demanded the other day. He does not suggest in any way that British Coal can win this business. The hon. Gentleman wants me to give it permission to buy the business with taxpayers' money. Volume for volume's sake is a recipe for bankruptcy, not security. I am not prepared to intervene on such an option.

The Opposition motion refers to the duty that the coal industry owes to the environment and I agree with that. We have to recognise that even so-called "clean" coal-burning technologies have damaging environmental effects. We cannot wish away the environmental advantages of other fuels such as gas, but we can help to reduce the disadvantages of coal, and particularly of British Coal.

As many hon. Members will know, British coal is relatively high in sulphur—I believe the average figure is around 1·5 per cent. but it ranges from less than 0·5 per cent. in some Scottish coalfields to 3 per cent. or so in Yorkshire. To reduce sulphur emissions to more acceptable levels, generators have essentially two choices: they can either burn low-sulphur coal or they can install fluegas desulphurisation equipment.

I am able to confirm today that we have asked the privatised generators to continue to plan on the basis of installing 12,000 MW of FGD capacity during the 1990s. That represents a very large cost indeed—about £1·6 billion. The first of those installations at Drax should come on stream by 1993–94, and should provide a secure outlet for up to 10 million tonnes of indigenous coal, and should substantially eliminate the need for low sulphur imports.