Department of Energy

Part of Estimates 1989–90 – in the House of Commons at 6:06 pm on 10th July 1989.

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Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford 6:06 pm, 10th July 1989

The hon. Member for Brigg and Cleethorpes (Mr. Brown) will understand why I do not follow him down that road. It is fortunate that the majority of the Select Committee Members rarely follow his suggestions.

The House will not be surprised if my speech mainly relates to the effect of the estimates on British Coal. Over many years the Select Committee has highlighted the problems that would face British Coal if the Government took certain actions. Unfortunately, the Government have rarely taken much notice of our reports. If they had taken notice of the 1987 report on coal and the report on electricity, they would not have taken the action that they did.

Three quarters of the money made available in the estimate through the vote is to assist British Coal. It is right and proper that a large slice of the report dwells on that industry. I am sure that the Chairman and members of the Select Committee will agree that it has not always been too impressed with the reliability of the estimates and the value to be placed on them. This year's estimates seem to have been treated with some scepticism for that reason.

Paragraph 5 of the report tells us that the uncertainties for British Coal are enormous. That is true. For many years it seems that we have never managed to get the Government to come clean. From time to time we have used our crystal ball and mostly the Select Committee and the House have been correct. The Government have ignored many of the Committee's recommendations and suggestions and on most occasions the Committee has been proved right.

We are aware that £250 million is a lot of money, but, as the Select Committee recognised, it is being used simply to run down the coal industry, as the Government have planned to do since 1984. The Government are on their way. We must ask, "Do we need a coal mining industry?" If the answer is yes, what size of industry is required? I should have thought that it should be the size required to meet the demand to generate energy and to mine for coal on these shores. It is obvious from the evidence to the Select Committee that that is not the Government's view.

Recently, in evidence to the Select Committee, Sir Peter Gregson made it clear that he expected the contract agreements between British Coal and the Central Electricity Generating Board to be completed in a few months' time. He said that his Department had been keeping in touch with developments. One can take that as one wants, but these decisions will be based purely and simply on conditions in the marketplace. The Government have had to provide £311 million in the estimates to bring about the loss of a further 15,000 jobs in the mining industry this financial year. The spin-off from the last financial year is about 5,000 jobs. This means, as Sir Peter Gregson told us, that by March next year the estimates will cover some 20,000 miners' jobs.

In 1987, the Select Committee suggested that there might be only 69,000 underground workers in the mining industry by 1990. The Government denied that. It is now obvious that by 1990 that number could fall to 50,000, which means that the mining communities will be in a more traumatic position than they have been in since 1984, when there were about 200,000 men on the colliery books. We have seen the industry run down rapidly. Although in the past there were tragic circumstances in many mining communities, at least the men over 50 were provided with a weekly income to cushion the blow. I have made these points several times in the House and in Committee and I do not apologise for repeating them. The 20,000 miners about whom we are talking in this financial year are not over 50; their average age is 34. They have no weekly income to cushion the blow. There is no alternative employment in the mining communities that these young men can take. There has been no action by the Government since 1984 to provide them with alternatives.

What is the Government's answer? What should these men do? What are the plans for them if 20,000 jobs are lost? It is not sufficient for the Government to argue that the coal industry must stand on its feet and fight the competition. If one accepts that—I never will —the Government have an obligation to the mining communities not to wipe them out for reasons of political dogma and to provide employment to take the place of the staple industries in these communities. There are no signs of that happening.

We hear about the marketplace. Does anyone, from the Secretary of State, to civil servants, to British Coal, believe that British coal can compete with coal from other countries? We hear about all the records and wonderful achievements since 1984. The majority of coal mines are making a working profit—£500 million in the last financial year. Through technology and the hard work of miners, these wonderful achievements have been made, which hon. Members on both sides of the House and Sir Robert Haslam praise. However, we can only produce coal for power stations at a price of £46 to £48 a tonne and it is possible to import coal for between £20 and £28 a tonne, because of subsidies and slave labour in other countries.

British coal will not be able to compete in the short term with coal from abroad. That is why the Select Committee decided that there should be some form of assistance to the coal industry and that the industry should not be left to the marketplace. Vast assistance will be given to the nuclear sector under privatisation, so why throw our industry to the wolves when everyone knows that it cannot compete? That is why some people, including the Government, have pushed hard to extend the ports at Immingham and elsewhere. They know that the negotiations between British Coal and the CEGB will result in contracts for 60 million tonnes of coal—10 million more tonnes of imports, resulting in the loss of miners' jobs.

Do we want to leave this country in a state where it cannot meet the demand of our power stations for coal because the industry has been so run down and we need more imports? Does anyone think that the prices of £20 and £28 a tonne for imported coal will be available then? No. Schoolchildren know that. We saw what happened during the oil crisis. It is crazy to do this. Without using my Yorkshire words, may I say that the Select Committee recognised that. Coal is the natural power we have available. If the Minister is in possession of the facts, will he tell us how many British pits, of those that are left, are really uneconomical? There may be a few, but if "uneconomical" means that they must produce coal at the marketplace figure for imports of £20 to £28 a tonne, every pit in this country must be uneconomical. If that is so, there is no great future for the mining industry, although we shall have serious need of that industry one day.

I have referred to figures in the past, and I will not bother the House with them tonight. It seems that some Conservative Members have no respect for the industry, and the hon. Member for Brigg and Cleethorpes seems to think that this argument is a big laugh. He should come to my constituency to see whether pit closures are a big laugh. He would see miners' estates, which some members of the Select Committee have seen. Half the estates are boarded up and those properties that are occupied house aged miners and the widows of miners. Shops and schools have been knocked down. The hon. Gentleman should look and decide whether the social consequences of the savage running down of the mining industry are a laughing matter. I assure the House that they are not.

The Select Committee expressed its concern that the Department's research and development expenditure is set to fall in real terms in 1989–90. As the hon. Member for Havant (Sir I. Lloyd), the Chairman of the Select Committee said earlier, it is essential that the Grimethorpe plant and others like it should be kept operating and that if there is a lack of private funds, the Government do not allow the Grimethorpe plant to close. We talk now about the greenhouse effect and carbon dioxide. That plant contributes to research into the greenhouse effect, which is one of this country's worst problems.

Last year, the Committee criticised the expenditure incurred by the Department of Energy when it moved to expensive headquarters on a prime London site. The Government have said that some of the major Departments should move out into the regions, so one cannot make a case for spending a colossal amount of money on a new building in London, as my hon. Friend the Member for Hartlepool (Mr. Leadbitter) said. I recall that the Committee suggested last year that it might be suitable to erect that building in an area such as Pontefract or Abertillery. I support the proposal for Pontefract or Castleford, but unfortunately that has not happened. A report today on the Property Services Agency main estimates showed the vast increase in costs of this new development and there should be some explanation for that.

I noticed that the hon. Member for Brigg and Cleethorpes left the Chamber immediately after his speech. Unlike him, I believe that the Department of Energy has a continuing part to play, especially in view of our energy prospects. There is also a major part for the Select Committee on Energy to play, and I hope that the Government agree. I also hope that the Minister will give great consideration, when wiping out 20,000 mining jobs, to negotiations. Although nobody on the Government Front Bench appears to be listening, I will say to the Minister that his Department should negotiate with others to see what can be done to introduce alternative employment in the communities that will be wiped out, especially when one considers all the young men who will have no weekly income.