Coal Prices

Oral Answers to Questions — Energy – in the House of Commons at 12:00 am on 24th February 1992.

Alert me about debates like this

Mr. Alan W. Williams:

To ask the Secretary of State for Energy if he will make a statement on the discussions taking place in the European Community about setting an EC-wide reference price for the cost of coal.

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

No, Sir, because there are no such discussions. The Commission has made it clear that it has no proposals for guide prices on coal contracts or for Community subsidies for coal production. Its ideas on "reference prices" are aimed at reducing the amounts of aid for coal production that member states may give to their industries.

Mr. Williams:

Will the Minister confirm that, at about £42 a tonne, the average price of British coal is well below that of west German coal?

Photo of Kim Howells Kim Howells , Pontypridd

Which costs two or three times as much.

Mr. Williams:

That is right—two or three times as much. As Europe moves to become a single market, does it make any sense that Britain should be closing coal mines which are producing coal far cheaper than those in west Germany? Why are the Government so intent on destroying the industry through imports, through the dash for gas, and through their privatisation proposals? Would it not make more sense to have a moratorium on pit closures in the interests of jobs, the balance of payments and European energy conservation?

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

I agree with the hon. Gentleman that British coal is the cheapest in western Europe, but it is certainly not cheaper than coal from the United States or Australia and it is still uncompetitive in world terms. However, the next coal contracts will be at competitive rates and I believe that they will be satisfactory for British Coal.

Photo of Mr John Hannam Mr John Hannam , Exeter

Does my right hon. Friend agree that such a proposal about coal imports would be in direct conflict with the objectives of GATT and of free trade and would also result in the removal of the need for competitiveness in British Coal, which would work to the disadvantage of the consumer?

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

I agree with my hon. Friend. I do not believe that those questions have been properly thought through. There are questions about our international obligations to GATT and to the Community. There are also implications for the steel industry and, as my hon. Friend pointed out, there are implications for electricity consumers. It is not in the long-term interests of the British coal industry not to become efficient and competitive.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

If the Secretary of State wishes to be believed at the Dispatch Box, he must honour what he says at the Dispatch Box. During the last Energy Question Time, more than a fortnight ago, he promised to write to me but he has failed to do so. If he makes statements from the Dispatch Box, he should be a man of honour and honour his promises.

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

I have to say that I have no idea what the hon. Gentleman is talking about.

Photo of Gerald Howarth Gerald Howarth , Cannock and Burntwood

Does my right hon. Friend agree that the interests of my coal mining constituents would best be served by long-term contracts with the generators, which the British coal industry is well placed to secure and which the generators should welcome, and not by market rigging by Labour politicians posing as experts?

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

I agree with my hon. Friend. British Coal is in a position to sign long-term contracts with the generators, which will be very much in the interests of British Coal and the electricity consumers.

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change)

If the Secretary of State regards protecting the British coal industry and, therefore, the nation from the fluctuation in world prices as rigging the market, will he explain why he has done exactly that by rigging the market for nuclear electricity in this country?

Photo of Mr John Wakeham Mr John Wakeham , Colchester South and Maldon

The arguments for nuclear electricity were different—[interruption.] Oh, yes. We argued, rightly, that we believed in a diversity of supply and we wanted to ensure that that diversity of supply was available. We believe that British Coal can achieve a significant share of the coal market for generation in the new contracts which begin in 1993, and we believe that it will be able to achieve that at competitive prices.