Coal Imports

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

Alert me about debates like this

Photo of Peter Hain Peter Hain , Neath 12:00 am, 24th February 1992

To ask the Secretary of State for Energy what proportions of coal consumed in Britain was from (a) imports and (b) domestic production in 1979 and 1991; and if he will make a statement.

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

In 1979, imports accounted for 4 per cent. and domestic production for 96 per cent. of United Kingdom coal consumption. The corresponding figures for 1991 were 17 per cent. for imports and 83 per cent. for domestic production.

Photo of Peter Hain Peter Hain , Neath

Since 1979, when the Government came to power, coal imports have increased from 4 million tonnes to 19 millions tonnes, an increase of 346 per cent., which has had the effect of wiping out the coal fields of south Wales, damaging our balance of payments, costing the taxpayer £8,500 for every one of the tens of thousands of unemployed miners, and making us dreadfully dependent on foreign supplies. Does the Secretary of State appreciate that that is economic lunacy of the highest order, or is he just plain thick?

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

No. The answer is that expensive electricity is very bad for British industry. The reason why coal imports have been increasing has been the failure of British Coal to be competitive enough. That is not through lack of support by this Government, who have put £17 billion into the coal industry since 1979. I am pleased to say that there are now signs—after the improvement in recent years and with further improvements—that British Coal will be able to secure good contracts for the future.

Photo of Mr Peter Rost Mr Peter Rost , Erewash

How is British Coal expected to compete in the privatised electricity market when the duopoly is able to close down coal-fired power stations even though they can produce cheaper electricty than the new gas turbine power stations, because the duopoly is able to pass the extra costs to consumers? Should not the regulator ensure that the extra costs for higher cost plant are not passed to consumers? Should not coal-fired power stations, which could be competitive and which the duopoly rejects, be offered for sale so that continuing competition can develop?

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

Some of those questions are for the regulator. I remind my hon. Friend that the regional electricity companies have an obligation to undertake economic purchasing. If, as my hon. Friend suggests, there is cheaper electricity to be obtained from coal-fired power stations than from gas-fired power stations, I would expect them to use the electricity from coal-fired stations, in accordance with their licence obligations.

Photo of Mr Alexander Eadie Mr Alexander Eadie , Midlothian

Does the Secretary of State realise that his comments have failed to persuade the House that the policy that he and the Government are operating is right? It is a gross slander on the miners to talk about the cost of coal and about productivity when miners in Britain are achieving record productivity figures. How can the right hon. Gentleman stand at the Dispatch Box and seek to justify the untrammelled entry of coal imports into Britain, which is flinging thousands of miners out of work and at the same time digging a hole for the economic morass in our balance of payments?

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

I cannot accept the hon. Gentleman's analysis. The threat to coal jobs has been much more from gas than from imported coal. The only way to deal with that is to make coal a competitive source of fuel and the first choice for the generators. It is possible for British Coal to achieve those contracts and that is what I look forward to seeing.