Department of Energy

Part of Estimates 1989–90 – in the House of Commons at 6:25 pm on 10th July 1989.

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Photo of Mr Alexander Eadie Mr Alexander Eadie , Midlothian 6:25 pm, 10th July 1989

I have followed the debate closely and I understand the strong plea made for the preservation of the Department of Energy. Many hon. Members may not be aware that the Department of Energy was a creation of the party of the present Government. Although the Department was defended in strong and strident terms, I have my doubts about the outcome. As we have said in previous debates, when the present Secretary of State took office, one of his terms of reference was to abolish the Department of Energy. I hope that the defence put up for the Department is listened to, but I have my doubts.

We have heard today about manpower in the coal industry. The House must be informed about how catastrophic the contraction of manpower in the coal industry has been. I recently had an exchange with the Under-Secretary of State for Energy on the figures and I was able to point out that, in the past seven or eight years, the coal industry has contracted by 151,000 or 152,000 men. It is the greatest contraction suffered by any industry in so short a period.

We are not talking about pits being closed because of dud technology, because they are using outdated technology, because there are no coal reserves left or because the manpower is aging. A young age group works in the coal industry at present. The average age is about 34 and the older men have left the industry. We do not close pits that have been exhausted; we close those that have great reserves of coal. When it was proposed to close Bilston Glen colliery in my constituency, I pointed out that that pit had hundreds of years of coal left. Even in Monktonhall, which has been mothballed, £30 million, £40 million or £50 million was spent in reaching coal reserves which would last for hundreds of years. In the Midlothian constituency, there is coal lasting for hundreds of years, yet it was decided to close those pits.

I want to give an example of the economic lunacy we practise and of the logic of bedlam. I was at a meeting with British Coal where we were having discussions with Mr. Moses, a director of British Coal. We were talking about how a British pit could survive in the present economic and competitive climate. The general secretary of the National Union of Mineworkers said that British Coal was telling us that a pit must produce coal at so much a gigajoule, although British Coal also said that it could not control the cost per gigajoule because factors in the market place determined that. We were told, for example, about the effects of rises in the value of the pound and about competitive bids from other countries. We asked whether Selby's closure would be considered if it did not live up to the gigajoule cost because of the balance of payments crisis and interest rates. Selby is the so-called jewel in the crown of the coal industry, but Mr. Moses' reply was, "Yes, we would have to consider it."

The Chairman of the Select Committee on Energy told us about the subsidy that the mining industry is receiving. I am not saying this in a spirit of cirticism, but if we are dealing with the costs of producing energy we must consider other arguments, such as the cost of nuclear power over the years. We must also consider the security of supply—which could be the subject of a valid debate in the House. I can best illustrate my argument with reference to the ridiculous position of the South of Scotland electricity board. The SSEB has gone back on previous understandings and agreements. It had previously said that we needed an indigenous coal industry. Indeed, the present chairman of the SSEB is on record as saying that it would be unthinkable if we did not have an indigenous coal industry in Scotland. He said that we would always need a coal industry in Scotland. However, he has changed his mind about that and is now putting forward similar arguments to those advanced by Conservative Members and is saying that the competitive argument must be considered. The chairman of the SSEB followed that competitive argument, despite the fact that the Secretaries of State for Scotland and for Energy have been told that something had to be done because otherwise the coal industry in Scotland would contract to nothing.

The chairman of the SSEB went ahead with commercial considerations as the Government told him to do and did a deal for the importation of 1 million tonnes of Chinese coal. What about the argument for security of supply? The chairman of the SSEB said that that coal was cheaper. I am certain that it could not have been cheaper. Indeed, all the evidence and analyses are proving that it could not have been cheaper. Surely one cannot defend supplying our power stations with Chinese coal because by no stretch of the imagination could one say that that would give us security of supply. That is why I said that this policy is the height of lunacy.

I do not want to take up much more time because I want to leave the Minister time to respond to the debate. As a result of this debate, all the information that the Select Committee has given us and all the appraisals, I hope that we will agree that factors other than cost are involved. I hope that the Government will do something about the present uncertainty in the coal industry.

If we are to talk about blatant preference in our energy policy, the coal industry and the coal communities also have a right to express their blatant preference about the production of coal. We can still use the same argument on behalf of coal that was used 10, 20, 30 or even 40 years ago. We have coal in abundance. Therefore, we would be foolish as a country to contract our coal industry to such an extent that we would be dependent on imports of coal. I hope that we can get that message across in this debate to both the Government and the members of the Select Committee.