With permission, Madam Speaker, I should like to make a statement about the coal industry.
Last week I agreed that British Coal should announce that it would cease production at 31 pits over the course of the next five months with the loss of up to 30,000 jobs. I very much regretted that British Coal had had to reach this decision, but I accepted its advice that these steps were necessary in order to bring supply closer into line with demand. I then announced myself the outline of a package of redundancy and special assistance measures, the further details of which I am now able to give the House.
Originally I intended to announce details of the new coal contracts with the electricity supply industry and the future employment prospects for British Coal to the House before the summer recess. This timetable was not achieved. I would have liked to have made the announcement to the House today, but the electricity industry has still not agreed contracts for coal after 1 April 1993. In the meantime, pressure on British Coal, fuelled by reported leaks, intensified and I therefore agreed to allow it to proceed. I regret this discourtesy to the House. I accept full responsibility for that decision, as I do for the consequent events.
Remorseless changes in circumstances have been reducing demand and employment in the coal industry for the past 80 years. The fastest rate of decline was in the 1960s, when 300,000 jobs were lost in a decade, including 186,000 under the Labour Governments of 1964–70. At present, British Coal is producing 88 million tonnes, with 65 million tonnes going to the electricity generators. It is most unlikely that British Coal will be able to sell more than 40 million tonnes to the generators as from next April. The economic case for a substantial reduction in capacity therefore remains compelling.
Nevertheless, the Government recognise the concern at the speed of the rundown and about the very great difficulties it would cause to the communities involved. We have therefore concluded that, for the time being, British Coal should be allowed to proceed with the closure of only 10 pits, which it has told me are currently loss making and have no prospect of viability in the foreseeable future. The pits which fall into this category are Vane Tempest, Grimethorpe, Houghton Main, Markham Main, Trentham, Parkside, Cotgrove, Silverhill, Betws and Taff Merthyr.
Nevertheless, it is clearly important that British Coal demonstrably meets its statutory duties to consult and notify and take account of the result of consultation. No closure will therefore take place until after the statutory consultation period has been completed.
In the case of all other closures and redundancies, I have asked British Coal to introduce a moratorium until early in the new year, except for those which may be agreed by the work force at the pits concerned. This will provide time for negotiations to continue, and, hopefully, to be concluded, on the new coal contracts. During this period there will be no compulsory redundancies, although voluntary redundancies will be allowed to proceed under the terms announced by British Coal last week.
During this moratorium, the Government and British Coal will set out the full case for the closures which British Coal planned and to which I agreed. The Government will also provide an opportunity for hon. Members to debate the issues. In addition, we will carry out widespread consultation with all those concerned over the next three months. We will then announce our conclusions following those consultations to Parliament in the new year. If, following this process, the Government and British Coal's judgment is confirmed, then British Coal will proceed with a phased programme of colliery closures aimed at reducing surplus capacity as soon as possible.
It is clear that many coalfield communities will continue to suffer significant job losses. I am now able to give the House more details about the package of measures to assist those communities.
In the short term, people will need immediate help to find jobs, to retrain, and to construct a new future for themselves. In the longer term, these areas will need help with infrastructure to attract new industries and business.
My right hon. Friend the Secretary of State for Employment has written to the Chairman of the Employment Select Committee with details of a package of measures worth approximately £75 million over two years. A copy of the letter has been placed in the Library.
The training and enterprise councils in the areas concerned will have a major part to play. They will want to ensure that all those affected are offered help from the relevant agencies, including British Coal Enterprise and Government Departments. My right hon. Friend the Secretary of State for Wales will be taking similar action in Wales.
One of the best ways of attracting new industries and long-term investment is the creation of enterprise zones. The Government intend to introduce new enterprise zones in the areas where they would be most effective.
Last week I said that we would ask English Estates to advise on a programme of property and sites provision. On the basis of preliminary discussions with English Estates, the Government have decided to make available to the corporation, and in due course to the Urban Regeneration Agency, £75 million of additional money over the next three years. In addition, the corporation will in this year spend around £10 million in those areas.
My right hon. and learned Friend the Secretary of State for the Environment is also making nearly £2 million available today to the Tyne and Wear development corporation. This will enable it to make an early start on the further extension of the Sunderland enterprise park and the new Viking industrial park in south Tyneside.
We have already announced that three areas—Doncaster, Barnsley and Mansfield—will get enhanced status when the new assisted area map is announced in the new year. More areas will be upgraded in the review. This will ensure that firms interested in investing there are eligible for grant assistance. We will continue to look at other areas.
These major initiatives will be underpinned by further smaller regeneration measures. I intend to extend the coverage of regional enterprise grants to all coal closure areas. This will help small businesses there with investment and innovation projects. I will strengthen inward investment efforts in these areas. I will see that additional resources are available to local development agencies.
My right hon. and learned Friend the Secretary of State for the Environment is also acting immediately to alleviate the effects of the closures. He is today setting up a coalfield areas fund. Up to £5 million will be made available for expenditure in this financial year and next. My right hon. and learned Friend the Secretary of State is writing to the local authorities in the affected areas asking them urgently for proposals on how this money can best be spent to help those made redundant. My right hon. Friend the Secretary of State for Wales will be making a separate announcement on resources in Wales.
I am aware that these closures will have a serious impact on coal industry suppliers and we are already discussing with them ways to assist diversification and the identification of new markets. These measures will all bring new money to the affected areas. We are talking about £165 million altogether. I know that this will make a major impact in transforming the economies of these areas.
These programmes will be carried out by a number of separate agencies, each with established expertise and a track record of achievement in their field, but it will be important to ensure that the programmes mesh properly together, leaving neither wasteful overlaps nor damaging gaps. For this reason, I have decided to appoint a distinguished national figure, who will be an adviser in my Department, to act as co-ordinator and facilitator at the national level. He will also assist my right hon. Friend the Secretary of State for Wales. I am pleased to tell the House that Lord Walker has agreed to accept this important responsibility. [Interruption.]
Order. Our fellow citizens outside the House are waiting to hear the statement. Let us hear the statement and let them hear it. They can then also hear what other hon. Members have to say subsequently.
The decisions which I have announced today have been difficult. I understand the anguish that will be caused for the coalfields concerned, but there is no economic alternative. The Government will now proceed to work for the long-term future of all those concerned.
I have arranged for copies of this statement to be available in the Vote Office.
On Sunday the Secretary of State told the nation that there was no alternative to his closure programme. May I therefore congratulate him on the fact that by Monday he had discovered that there might at least be an alternative closure programme.
May I first ask the Secretary of State whether he thinks that the past seven days have enhanced or reduced the Government's credibility. If, as he claims, he agonised over this decision for months, how did he come up with a decision that could not survive six days of public debate? Can he explain how it was that he approved a timetable of closure which could not survive three days of challenge in the courts?
If the Secretary of State hopes that the House will welcome the announcement that British Coal will now observe the statutory notice period, can he explain why he ever approved a programme that involved breaking the law? May I warn the Secretary of State that the closure by delayed action that he has announced today does not measure up to what the nation demands.
The people of Britain who protested over the weekend, from Chesterfield to Cheltenham, were not protesting about the timetable of the closure. Does not the Secretary of State realise that they were protesting about the closures? They wanted the closures stopped, not phased in. Nor did they want money spent on training miners for the dole. They wanted action to save those miners' jobs. They will not be reassured that they will get that action by the length of the Secretary of State's statement which dealt with the action that he will take after those miners have lost their jobs. Nor will they be reassured by a thin package which offers the entire mining coalfields only half the money that his Department has sunk into Canary Wharf.
Does the Secretary of State understand that his statement will be judged by whether it is a genuine attempt to save miners' jobs or a manoeuvre to save Ministers' jobs? In order that they may judge which it is, will the Secretary of State tell us whether his statement means that a single pit on last week's list has a secure future or whether a single miner has a secure job? By the end of the phasing in his statement, how many more jobs will have gone? How many more jobs will have gone in the power stations that burn coal? How many more jobs will have gone in the engineering factories which supply the cutting gear, the winding gear and the pit props? How many more jobs will have gone in the coal communities when miners do not bring home wages which their families can spend in the shops? How will it help Britain to get out of recession to push all those people into unemployment? How does that help to restore the confidence in the economy which Ministers keep telling us is the key to recovery?
The Secretary of State claimed again today that there is a clear economic case for closing the mines. On Sunday he rested that economic case on the argument that it would produce cheaper electricity. Can he name a single independent expert who believes him? Does he know that the chief executive of PowerGen, which makes the electricity, has said that the closures will increase generating costs? Does he know that every one of the new gas-fired power stations is expected to produce more expensive electricity than any of the coal-fired power stations that he will shut?
What was most remarkable about the right hon. Gentleman's statement was that it did not contain a single proposal for him to intervene to stop any of the closures. The only action that he proposed in his statement was to set out the case for closure. Does the Secretary of State remember that only a fortnight ago he promised that he would intervene before breakfast, before lunch and before dinner in the same way as the German Government intervene to help German companies? Well, this is his chance. Last week the German Government confirmed a package of DM3 billion to keep open pits that produce coal at double the price of that produced by the pits that he proposes to shut.
Now that the Secretary of State has given himself more time to intervene, will he intervene to save British jobs in the way that the German Government save German jobs? Will he intervene to secure Britain's coal reserves in the way that the German Government secure German coal reserves? Will he intervene to provide an energy strategy which makes sense for Britain in the way that the German Government provide an energy strategy which puts Germany first?
There could be one, and only one, real benefit from the delays in the closures that the Secretary of State has announced: the delays give time for an independent review of the case for keeping the pits open—an independent review by a figure other than a former Tory Cabinet Minister. Will the Secretary of State agree to such a review? Will he let an independent review obtain the answers to our questions before any of the mines are shut, before any of the coal seams are flooded, before any of the coal reserves are lost and before he does any more damage to the economy by putting any more people on the dole?
If the Secretary of State will not agree to halt all the closures and set up an independent review, I serve notice that we shall table a motion that will give the House the opportunity to set up such a review and give a real future to Britain's coalfields.
The hon. Member for Livingston (Mr. Cook) suggests that Lord Walker is in some way involved in the review that I announced. That is absolutely not the case. Lord Walker will devote his energies to securing the co-ordination of the measures that we have announced today. I say to the House, and to the Labour party, that in the past decade we have seen the economy of south Wales transformed under a Tory Government. We have seen it above all else because Lord Walker, when he was a member of this Government, brought his energies to bear on that transformation.
I tell the Labour party that I will take no lectures about the problems of closing down industries and running away from the consequences. I had to go to Corby in 1979 when the Labour party closed the steelworks with no attempt whatever to put jobs in their place. After a decade of diversification Corby has become a flourishing town. We have to find ways to bring that diversification into the coalfields. That is the only way to find lasting opportunities for the people who live there.
I note that the hon. Member for Livingston did not for one moment address himself to the fundamental dilemma that I face—the fact that British Coal has a contract until next April for 65 million tonnes of coal for the electricity generating industry. Next April, at best, British Coal can look forward to a contract for 40 million tonnes, and the reason for that is that those in charge of producing electricity can get their fuel more cheaply from alternative supplies. That is the dilemma. As they are charged with a responsibility to produce electricity cheaply, and as there is a regulator to ensure that they do so, it is unanswerable that the regulator will not allow them to buy generating fuel from other sources unless he is satisfied that they are the cheapest available sources.
The regulator is in place to deal with that, but it is important that the House should have the opportunity to examine the case that British Coal has had to face, pit by pit, which backs up its closure programme and that is what I have announced today. That is why, during the moratorium that I have announced, we shall produce a detailed calculation for the benefit of the House, and why there will be no further movement, other than in the pits that I have announced today, until after the House has had a chance to debate the conclusions. That will give the House an important opportunity to understand the dilemma facing the electricity generating industry.
When the hon. Member for Livingston asks about the jobs that will be lost, I notice that he does not ask about the jobs that will be lost to the rest of British industry if we do not provide it with the cheapest electricity that we can generate. It is not simply a question of looking after the coal industry—we shall do the best that we can to find a viable coal industry. We have to help British industry to be competitive in world markets. That is my overall responsibility. I cannot do that by imposing on industry electricity costs higher than the market can offer.
Does my right hon. Friend realise that his very reasonable statement will give great encouragement to the House and to the country at large, especially his remark that there will be enterprise zones to encourage inward investment and the setting up of new small businesses by those miners who lose their jobs, as that has been so successful and will be successful again——
I am grateful to my hon. Friend and I note his support for enterprise zones. Like most hon. Members, I have seen the value that they have brought to Shotton, Workington and Corby. I hope that all those Opposition Members who are jeering will not come to my office to ask for enterprise zones in the way that they always do.
Does the President of the Board of Trade recall that in the 1960s the historic error was made of depending on the assumption of cheap oil permanently? The Government's attitude is now based on the historic error of depending on cheap gas and cheap imported coal, which is an invitation to companies and countries that owe nothing to this country to hold our country to energy ransom in the future.
Does not the Secretary of State acknowledge that what is now happening with the crisis that he is inflicting on the coal mining areas is not to do with what he called "a remorseless change in circumstances", but is a direct consequence of the style and system of privatisation which the Government brought to this country? Does he accept that what he has said today does not begin to deal with the realities of mass unemployment that he will bring to coal mining areas? Most of all, nor does it begin to deal with coal as a precious national asset, which is how any patriotic Government must treat it.
The right hon. Gentleman repeats by implication the very point that his hon. Friend the Member for Livingston (Mr. Cook) made about the cost of gas-fired generation and the fact that it is more expensive. His hon. Friend quoted the managing director of PowerGen. Why is it that PowerGen is the only company now operating a gas-fired station?
No words that I can express in this House could give vent to the shock waves that have gone through the community of Nottinghamshire following the announcement last week. That means that the review that my right hon. Friend has announced is critical. What status does that review have? It must be a profound and important review covering all aspects of the question because we need to see that the strategy for the future will ensure that coal-fired power stations and a deep-mine industry remain for 10, 15 or 20 years. From what the right hon. Member for Isiwyn (Mr. Kinnock) said, we know that we may need it then more than we do now.
My hon. Friend makes an absolutely critical point. I assure him that the Government intend that the statement that we make and the information that we provide will be profound and comprehensive. We intend to do everything possible to enable deep-mined British coal to be world competitive. That is the objective because it is the only way in which we can provide for the rest of industry and our consumers the basic competitive fuel that helps them to win in the export markets.
Nobody is more aware than I am of the impact that my announcement and that of British Coal last week have had throughout the country. I have had to share the agony of that decision for many months, and because that information has been available to me, I have spent so much time examining the alternatives. But, in the end, I come back to this stark dilemma: there will be a reduction of 25 million tonnes in the likely market for British coal next April; and, on top of that, the reduction in the amount that British Coal will get for its coal is likely to be significant. It will therefore have a lower revenue from a lower tonnage. That is the dilemma, and unless we can find a way to deal with it we are faced with the unpalatable conclusions that I put to the House.
Does the President of the Board of Trade accept that a phased closure of pits will do nothing to stem the anger of people who are outraged at a Government who are tearing the industrial heart out of our economy? Does not the Government accept that that is the inevitable consequence of the privatisation of electricity and the creation of rigged markets for gas and nuclear power? What we need is not a phased closure but a full review of energy policy. In those circumstances, will Professor Littlechild's report be made in time to be taken into account before the pits close? Does not the right hon. Gentleman accept that the only phase out that the country needs is the phase out of him and of the Government?
Professor Littlechild is, of course, fully aware that he has clear statutory responsibilities. He is now engaged on two reviews, and it is well within his ability to make available to us whatever information he thinks appropriate. The House can be sure that I shall take into account Professor Littlechild's views before I return to the House.
When the hon. Member for Gordon (Mr. Bruce) says that we cannot phase the closure of pits or the rundown of the industry, he seems to forget that we have phased the rundown of manpower in the pits from 700,000 after the war to about 50,000 today.
Everyone is anxious for the outcome of the review. Will my right hon. Friend give some idea of its timescale and when we may know some of the decisions? When the review takes place, will it be borne in mind that if one strips away the subsidies, levies and sheer lack of competitiveness of some of the other fuels, British coal is the cheapest of all? Will British Coal and the people in the industry have the opportunity to make precisely that point?
The views of British Coal will be clearly set out in the report that I make to the House; that is absolutely fundamental. I intend to return to the House early in the new year.
As to the specific point made by my hon. Friend the Member for Newark (Mr. Alexander) about alternative supplies of fuel, it is perfectly true that the fossil fuel levy creates a subsidy for the nuclear industry. However, the subsidy is to deal with the decommissioning of old and unsafe plants. I defy the Labour party to suggest that I should not carry out my statutory duties to make those plants safe.
Why is the right hon. Gentleman discriminating against specific pits such as Markham Main, in my constituency? Why is he applying the axe to them immediately? Last week people were handed redundancy notices with only a few days' notice. Why was that pit not included with the others? It has rich seams and its productivity has increased enormously. The death of that pit will be the death knell for the whole village.
I am sure that the right hon. Member knows that 250 of the Markham Main employees have already applied for the new redundancy terms that I announced last week. I repeat that the 10 pits that I have listed this afternoon are pits that the chairman of British Coal has assured me are not making a profit today; and there is no foreseeable way in which they will do so.
I welcome my right hon. Friend's statement as far as it goes, but I fear that it does not go far enough. The miners of this country are not asking for charity; they are asking for a level playing field for their product. Unless my right hon. Friend can assure the House that what he is offering is a thoroughgoing review of Britain's long-term strategic energy requirements that will address the imbalances created by the uneven playing field and, pending that, there will be a moratorium on at least 90 per cent. of the closures, I shall certainly find it difficult to support his position in the Division Lobbies.
My hon. Friend, who I know has taken a great interest in these matters, has heard me list 10 pits which are not making a profit and which British Coal says have no prospect of making a profit. Those are the ones that we have authorised British Coal to proceed with.
In respect of the other pits, we have announced a moratorium. I hope that my hon. Friend will agree that we have gone as far as we reasonably should with all our responsibilities in that context. There can be no case for my telling British Coal to keep uneconomic pits going. We are talking about uneconomic pits at today's price of about £1.85 per gigajoule; that price will drop, we read in the newspapers, to something in the order of £1.50 per gigajoule. That clearly shows that, if these pits are not profitable at today's higher prices, there is no way they will be profitable at tomorrow's lower prices.
We shall have plenty of chances to set this out in the debate on Wednesday and in my subsequent comments before the House is invited to vote early next year. It is certainly important to deal with my hon. Friend's concerns with the wider issues, and I will do so.
Is the President of the Board of Trade aware that he cuts a pathetic figure here today—both he and Major Wimp beside him? Is it not high time, instead of handing out quango jobs to Lord Walker, who lined his pockets with Maxwell money, that the Government saved the jobs of the 31,000 miners for whom the right hon. Gentleman has announced this moratorium? It is not a stay of execution they want; they want their jobs to remain.
There has been a 155 per cent. increase in productivity. There has been no increase in the price of industrial coal for six years. We can compete with the rest of Europe. Why should German coal be imported to Britain at £110 a tonne when we can produce it, after devaluation, at £37 a tonne? In the name of God, go, and take the Prime Minister and the rest of the rag, tag and bobtails with you!
The hon. Gentleman will know that the Bolsover pit is one of those that we have covered by the moratorium. I should have thought that he would concentrate his endeavours on pleading a rational case for his constituency and his pit rather than on debasing the currency of the House of Commons, as is his habit. He would help the House more if he recognised that no German coal is imported to this country for the purposes of electricity generation. The hon. Gentleman would also help the debate if he realised that imported coal comes not from Germany but principally from America, Australia and Colombia, mainly because it is opencast coal which is a great deal cheaper to mine from the surface than to extract from Britain's deep coal mines.
Can my right hon. Friend confirm as a result of his original statement that the seven mines in the Selby group in my constituency will continue to employ 4,000 deep pit miners; that they will be producing 12 million tonnes of coal a year for power generation; that that represents more than a quarter of likely coal sales, from just seven pits; and that this in turn represents the vast investment which my right hon. Friend and his predecessors have made in productive, constructive coal mining, far outstripping investment in closures? Will he also confirm that, if any additional mines are saved as a result of his statement today, that will only enhance the fact that overwhelmingly the largest proportion of fuel input to power generation will come from British Coal and from pits in my constituency?
My right hon. Friend is right. After the contraction of the industry that we are contemplating, British Coal will still be the largest contributor to electricity generation in this country. I confirm that the Selby group is a core part of the future of the British coal industry. We have invested £1.3 billion in that group of pits, which has played its part in securing the improved productivity upon which the long-term viability and, therefore, the future of the industry depend.
Is the Minister aware that the Prime Minister said at the Tory party conference at Blackpool that he would put Britain and the British people first in all his policies? Is Nottinghamshire still part of Britain and, if so, why is Germany, which has 4 per cent. unemployment, subsidising its coal mines by £1 billion per year while Britain, with 10 or 11 per cent. unemployment, is eliminating almost 31,000 jobs? Is he also aware that, of the 5,000 people in Nottinghamshire who have recently been through training schemes, only 257–5 per cent.—have found jobs? What does he think that will do to the county?
I am sure that the hon. Gentleman knows that 86 per cent. of the miners who go through British Coal Enterprise advisory services find jobs. I am sure that he also realises that the Germans are contracting their industry because of the pressures of reduced competitiveness of the fuel.
The hon. Gentleman spoke about subsidies for the German industry. I am sure that he will bear in mind that the Government have put £18 billion into British Coal during this decade. Less than one tenth of that amount was put in in total by Labour Governments in earlier years.
Is my right hon. Friend aware that most of the pits in my constituency were closed when the local Member of Parliament, George Brown, was a member of the Labour Government and that no help whatever was available at that time?
I welcome my right hon. Friend's statement. Given enough time, mining communities do adjust and can make a successful future. There is life after coal, and if my right hon. Friend comes to south Derbyshire we shall be delighted to show him a successful community for which that is true.
I am grateful to my hon. Friend. As I know, in many parts of the country the coal industry contracted significantly under Labour Governments and major diversification has taken place. Nowhere is that more the case than in south Wales, as Labour Members understand all too clearly. When Labour was in power, it ran down the coal industry without let or hindrance, and it ill becomes the Opposition now to pretend that they had a magic solution when patently they had not.
I am an ex-miner with 26 years' underground experience. This is a poor and bitter day for the people of Britain because the Minister's statement goes no way towards sustaining confidence in Britain's coalfields. The closure programme includes the sale of Frances colliery in Fife. I met the Minister for Energy and asked him not to give away or sell prematurely the assets of British Coal because the future of the Scottish coalfield rests on the development of a colliery that is presently mothballed and up for sale. If it is prematurely sold and not girdled about and proper investment is not made in it, it will disappear for ever.
In terms of the future, that colliery is important, and in saying that I am not taking away from the arguments of my hon. Friends. The Minister is slashing the pits, saying that they are uneconomic. It is the old, old story: anyone can make anything uneconomic if he wants to. I hope that the Minister will reverse the decision because many other assets are being stripped. I know that some of my ex-colleagues—[HON. MEMBERS: "Oh!"] All right, but this is important. The people who are running British Coal are feathering their nests for whatever the future brings, whether it is privatisation or not. All that I am saying is that——
I am aware of the constructive approach that the hon. Gentleman has taken and the dedication that he has shown in the interests of the industry. He obviously has an experience of the industry that I could not begin to equal. Because I know that the hon. Gentleman is wholly sincere in his approach, I want to respond in kind. I am prepared to look at the points he has made, but I want to share with hon. Members the danger that I face. [Interruption.] The hon. Gentleman will see the difficulty I have in trying to respond seriously to his point.
I was speaking about the danger that is presented. There is bound to be a significant number of miners who face the loss of their jobs and see the risk to the community, arid, understandably, they will instinctively wish to use their redundancy money to buy the pit. I want to be cautious before I encourage mining communities to invest in pits that, in our best judgment and in the best judgment of British Coal, have no viable future.
I do not say that because I want to choke off all interest or potential—that is the last thing I want to do. If miners come armed with expert advice and financial resources, and if, as I hope, they propose to put in only a limited amount of their redundancy money, I can give the House this assurance: I will personally ensure that their case is seriously considered.
Let me go further, because in some ways this is at the heart of one of the dilemmas that we face. The market that British Coal sees for its product next year will decline from 65 million tonnes to 40 million tonnes. If one or other of the pits scheduled for closure is moved into the private sector by a group of miners and supporters, that will potentially take part of that 40 million tonne market, with the consequent danger that other British Coal pits may be at risk. Therefore, that must be taken into account as well. I hope that the hon. Gentleman will appreciate that I am responding as genuinely as I can to what I know to be his serious interest.
I welcome my right hon. Friend's statement as it suggests that he, my right hon. Friend the Prime Minister and other Cabinet colleagues have been listening carefully to what Conservative Back-Bench Members have been saying and to the views expressed by many people throughout the country since last Tuesday. Perhaps we have someone who is listening up there. I do not think, however, that the response goes far enough. I ask my right hon. Friend to put all mines into the review and to question British Coal, because at this stage we do not necessarily have to accept what it says. I do not think that the slight delay that would occur over the next few months would be detrimental eventually in terms of the cost of the outcome.
Will my right hon. Friend please put these considerations into the review? Let us have a complete review of the coal industry and of our long-term energy requirements.
I know exactly how much my hon. Friend is concerned about these matters as I have had the chance to talk to her personally about them. I cannot, however, go as far as she asks. These are pits that are not economic even at the high level of payment that British Coal now receives for its product, and British Coal will be receiving significantly less next year in what is already likely to be a much reduced market. It would be imposing costs in public expenditure terms for which there is no justification.
The House will understand—I do not wish to widen the discussion—that all delay has a cost consequence. If we produce 25 million tonnes of coal next year for which there is no market, that will cost an additional £1 billion or more in a year. That will have to be financed in public expenditure. It will be matched against a range of other investment or revenue consequences—hospitals, schools and roads, or whatever it may be. That is the choice that the House is asking us to make. I cannot responsibly make it in respect of the 10 pits today.
Is the Secretary of State aware that his economic arguments are wholly unconvincing? If they were applied to agriculture, half the farms in Britain would be threatened with closure. They were not applied when the gamblers played the currency markets three or four weeks ago. It is a political act, long prepared by the Government, to rig the market, to close the pits and to punish the National Union of Mineworkers.
Is the right hon. Gentleman aware also that it was the brutality towards those who were told that they would lose their jobs in 48 hours that produced the public response? Men who have devoted their lives to the industry wake up one day and find that the Secretary of State has ended their industrial life. It is the brutality of it that has stirred the public. We want to see all the closures reversed and a return to a planned energy policy to ensure that we use the nation's reserves wisely.
The right hon. Gentleman says all these things now, but as a member of a Labour Government it seemed not to occur to him that it was necessary to protect all these jobs. What exactly was he doing when he helped to provide finance for the interconnector with France so that French electricity could cross the channel to compete with ours?
Is my right hon. Friend aware that in my constituency, where there are no mines and no farms either, there is great concern about the way that the miners were treated last week? Will he accept from me, along with my hon. Friend the Member for Batley and Spen (Mrs. Peacock), that all the pits should be subject to the moratorium? Should not there be an independent energy survey that embraces what is happening in the nuclear industry and the question of how long gas supplies will last? Coal is a strategic industrial element that is vital to this country's future.
My right hon. Friend repeats the question asked by my hon. Friend the Member for Batley and Spen (Mrs. Peacock). I cannot give an assurance that I will change the decision that I announced today in respect of those 10 mines. My right hon. Friend must realise the implications of that process. If he wants us to finance the continuation of those pits, other sacrifices will have to be made in public expenditure terms. My right hon. Friend the Member for Brent, North (Sir R. Boyson) is an enthusiast for many aspects of public expenditure programmes. One cannot have them all, and that suggestion does not seem justified. There is no long-term viability for those pits, even at the existing level of revenue—which is higher than that which they will be able to achieve next April. There comes a point in Government when one must make difficult decisions.
Will the President of the Board of Trade answer a question that many in this country want to ask him: where is the long-term strategy for an energy policy? The answers given this afternoon do not meet the serious charge that has been laid against the Government. If there is only to be justification for British Coal's decision, will the right hon. Gentleman ensure that his own Department stops licensing the 40 or more gas-fired power stations that are likely to come on stream? Many mining communities will believe that, with his statement this afternoon, we have moved from strangulation to suffocation.
The hon. Gentleman makes an interesting point. I have to deal with legal constraints in respect of the planning applications that are before me, but I am not unsympathetic to that important question—which I must address during the moratorium and the further submission of views. I cannot, however, unbuild the gas-fired stations which already exist or which are being constructed, and which account for a significant amount of the competition.
The hon. Gentleman asks about our strategy for an energy policy. It is impossible to ignore the existence of United Kingdom-owned North sea gas. That is the source of the remarkable opportunity to obtain lower cost electricity. At present consumption levels, North sea gas supplies will last for another 50 years.
Does my right hon. Friend accept that his announcement today will do nothing to assuage the fears of those at Trentham colliery, many of whom live in my constituency? If my right hon. Friend casts his mind back to the 1974 miners' strike, he will recall that those same miners who crossed the picket lines and defied Arthur Scargill are now being let down by his decision. Will my right hon. Friend please explain, in relation to our competitiveness within the so-called level playing field in Europe, why the decision was recently taken to allow a £3.3 billion agreement between the power generators and subsidised coal producers in Germany to get away scot free?
It is clear that the Germans are subsidising their industry, but they too are running down their coal industry. Our concern must be not the level of subsidies in Germany but whether we can provide for British industry and British consumers electricity cheaper by competition from gas-fired production or whatever alternative source we use.
The UDM's contribution was quite the most remarkable memory that I have of the industrial relations situation in the early 1980s. I happened to be in the Cabinet at that time, and I know exactly what UDM members did. That, among other things, made me determined to achieve the scale of redundancy compensation that I have provided and announced, which makes available up to £37,000 per miner—an average of £23,000 per miner—at a time when, owing to world recessionary pressures, people are losing their jobs in the manufacturing and service industries without receiving redundancy pay on anything like the scale of the compensation that I have announced.
My hon. Friend the Member for Stafford (Mr. Cash) asked me whether I could exempt Trentham. I must tell him—and it gives me no pleasure to do so—that Trentham is one of the biggest loss makers with which British Coal is faced.
Who does the right hon. Gentleman think he is kidding with such a disgraceful statement? Certainly not the miners at Vane Tempest colliery, who have been denied the investment that could have turned the colliery around; certainly not the people of Seaham, a town that is still reeling from the closure last year of Dawdon and Murton collieries, with the loss of some 3,000 jobs. The people of Seaham are experiencing the highest number of job losses in the country, and the lowest number of job vacancies in the United Kingdom.
My people want to hear the President of the Board of Trade talk of clearing the lines for our entry into the European market—a market that is bringing in 150 million tonnes of coal from outside the Community. We want to hear the right hon. Gentleman speak of the incestuous relationship between supply companies in the north-east and gas-fired power stations—an arrangement into which we have recently entered. We need answers to these questions, and we certainly need to appease the frustration and anger of the hundreds of miners who are being thrown out of work in Seaham.
I have tried to recognise the anguish that the hon. Gentleman described. As he knows, Easington is not one of the 10 collieries that I have listed today. He must also know, however, that over the past decade or so £18 billion of investment—I have already mentioned that figure—has gone into British Coal. It is entirely unacceptable for anyone to suggest that the Government have not done all that it reasonably could to make the industry competitive and to give it a chance.
It is true that Europe imports substantial amounts of coal, but it is imported from the world competitive market, at much more competitive prices than British Coal can achieve.
Has my right hon. Friend stressed enough the significance of the 40 million-tonne electricity supply contracts? Is it not the case that, roughly speaking, for every million tonnes by which the supply falls below that figure, an additional 1,000 miners will be put on the dole? The level of public indignation will then rise out of control.
Is it not a disgrace that the contracts have dragged on for so long? While trying to keep demand at that level, will my right hon. Friend please review the policy for licensing gas stations—a policy that has already, up to April, passed licences for 14 such stations?
My hon. Friend has raised what is, for me, one of the most distressing aspects of the issue. Despite the endeavours of all the British Coal negotiating teams, we have not yet seen a contract between British Coal and the generators, or between the generators and the regional distribution companies.
When I addressed the annual conference of the UDM, I made it as clear as I could that I considered it important for both the generators and the regional electricity companies to realise that this was not just an economic matter. There are communities out there with legitimate anxieties, and there is an imperative need for those contracts to be concluded. My hon. Friend the Member for Leeds, North-West (Dr. Hampson) is broadly right: if contracts for approximately 40 million tonnes are not entered into next year, every million tonnes below that figure will have an impact on employment in the coal mining industry.
Does the right hon. Gentleman realise that, as yet, he has singularly failed to answer the many questions that he has been asked about the Government's future strategy on energy policy? Is he really suggesting, through this statement, that in a consultation period of three months an energy strategy can be brought forward that has not been brought forward over a three-term period by this Government?
Would it not be much better to place a complete moratorium on this programme and to reconvene the Select Committee on Energy, which had built up considerable expertise in this sphere? It would enable us to look at an energy policy that would be to the benefit of industry, consumers and employers alike and would ensure that at least we went forward into the 21st century knowing where we were going. In that context, we should seriously look at the subsidy that has been given to the nuclear industry, some of which, of course, was instituted by the right hon. Member for Chesterfield (Mr. Benn).
I do not agree that we should question the principle of the subsidy that was given to the nuclear industry because, as I have already said, that is being used to decommission capital facilities; it is being used to decommission plant. Otherwise, I should be failing in my responsibilities. I will not do that.
The hon. Lady asks me about the strategy. We have a very clear energy strategy—to provide for British companies and British consumers a diversity of energy supply at a competitive range of costs. That is what we are determined to achieve. In doing that we have to be sure that there is a long-term prospect of continuation of those resources. We are satisfied about all those things within the strategy.
In order to inspire proper confidence in the moratorium, will my right hon. Friend do two things? First, will he ensure that there is an independent assessment of the energy resources and requirements of this country? Secondly, will he summon the heads of the power industry and ask them whether they have really been putting Britain's long-term interests first?
They are all operating under statute to ensure that they clearly understand what their duties are. We laid down those duties. We laid down the regulatory regimes within which Offer must supervise their activities. It is quite clear that they have duties and that there is a regulator.
My hon. Friend raises the interesting question of an independent assessment. Of course, I shall give the clearest view I can as to what the arguments are, but what must have emerged today and on many other occasions is that this is not a case where we will persuade people that there is an independent calculation that leads remorselessly to one conclusion. One is dealing with great pressure groups, great vested interests, great alternative sources of energy, and everybody argues his case. However many times we argue it and whatever figures we provide, we will never get agreement between the conflicting interests involved. That is why in government we have to make decisions about priorities. I shall try to set out for colleagues why we have taken the decisions that we have, but I do not pretend that we shall satisfy all those who represent every pressure group because I know that we shall not.
Will the President of the Board of Trade reassure the House and give some confidence to mining communities about the review that is to take place? It appears to have no independence at all. The President of the Board of Trade has told us several times this afternoon that the final outcome will be a contract between British Coal and the generators of 40 million tonnes. If that is the case, we shall be back to where we are today.
This review, this process, is a fraud. We want assurances that the nuclear levy is to be looked at. We also want assurances that the length of the contract between the generators and gas generation will be looked at. The coal industry wants a level playing field, a level market. The Government have provided no opportunity for that to happen. The inquiry gives no chance for an independent assessment.
My task in announcing the moratorium and promising to come back to the House is to provide for the House the evidence on which the 40 million tonnes calculation is based and, consequentially, the evidence to show why there is no greater market for the pits that face closure. That is the task that my review must undertake, and I have assured the House as clearly as I can that that evidence will be forthcoming. I shall not be able—I should not seek to interfere in the matter—to stop hon. Members from arguing that there is an alternative market for British Coal, but they must show where it is because British Coal cannot find it, and it is because no one else is prepared to show me where it has a competitive opportunity that I have had to make these unpalatable decisions.
Is not it a fact that my right hon. Friend is left with responsibility for British Coal without having any influence whatsoever over the purchasing habits of its main customers? Is not this one of the weaknesses of the manner of electricity privatisation? Is he aware that some of us tried to impress that on Lord Parkinson but got nowhere? Will my right hon. Friend consider taking powers positively to influence the purchasing policies of the generators, if that is necessary, in order to sustain a medium-term policy rather than having the terrible situation that we have had to go through in the past few days?
In considering all the options, I considered that one because it was an obvious example of how one could have found alternative markets for British Coal. However, the first question that followed that consideration was, am I prepared to ask the House for powers to insist that electricity generation is more expensive than it would be otherwise? It is because I believe that my first responsibility is to ensure that British industry and consumers get the most competitive energy that I am not prepared to ask the House to reverse the decision that it took in the past half decade.
Is the President of the Board of Trade aware that his statement is another example of the sickening betrayal that the public have recognised in the past week? Does he realise that the public require a complete stop on pit closures so that the complex issues to which he referred can be considered in depth? Is he aware that, seven months ago, the Trentham complex, which is in my constituency, was congratulated by British Coal on producing the quickest 2.3 million tonnes in Europe? In July, British Coal congratulated Trentham miners and said that they had a long-term future. What has changed since then?
Will the right hon. Gentleman impose a complete moratorium so that the matter can be considered in detail, the country can be advised and the House can look at the results?
The hon. Member is asking the Government to acknowledge something that his Governments were never prepared to acknowledge—the remorseless pressure of the market decline for coal. The Labour party in power was never able to find markets for coal and therefore ran down the coal industry year after year. I am faced with exactly the same process, and I am determined, in the course of the moratorium that I have announced today, to put before the House the nature of the costs and competition that British Coal faces. In that context, we shall see how unavoidable were the decisions that I had to take and authorise British Coal to take.
In view of the Government's fantastic achievements on the single European market, will the President of the Board of Trade explain to the public and to hon. Members why on earth it is not possible to sell coal to Europe? The Germans produce and sell coal at £86 a tonne and other European countries produce and sell it at £112, £79 and £76 a tonne, which is more than double the British price.
If the single European market means anything, why is there no demand for British coal in Europe? If the Secretary of State says that there is nothing funny in that, will he explain why PowerGen's chief executive has said that his coal-fired plant is able to generate far more cheaply than the independent gas-powered stations? He would love to put a contract to buy coal but, sadly, he cannot do so because he cannot get contracts with the regional electricity companies, which are the shareholders in the independent gas plants.
My hon. Friend has asked a number of questions. I find questions about PowerGen and National Power so contradictory because half the projects for gas-fired electricity are being developed, or have been developed, by National Power and PowerGen. It is inexplicable that the companies that are saying that they can produce coal-fired electricity more cheaply are among the biggest developers of gas-fired electricity. They cannot have it both ways. They say that because they are trying to sell their coal-fired electricity to the regional electricity companies, in competition with the gas-fired plants of the RECs. My hon. Friend is in the middle of the crossfire of a competitive situation between two groups of companies. He should take their sales pitch with the cynicism that he views other matters on which he is expert.
Let me come to my hon. Friend's views on Europe. I am the first to agree with him: there are things within the European Community that I would like to see made more competitive. One example of an area in which the Government are pressing extremely hard, which has significant implications for British coal, is in gaining access for British electricity generators to the European Community's grids.
We are negotiating; it is on the agenda of the British presidency. We are pressing our European partners to open up that opportunity. That is a much more constructive and likely way to make progress than by suggesting that we can produce deep-mined British coal and transport it across the channel and Europe to compete with the world price coal that the Europeans can purchase. We cannot compete on that basis. We might be able to do so if we were to get access to the European electricity grid.
Will the President of the Board of Trade explain something simple to the House? He said that he cannot intervene, despite what he said a few weeks ago at his own party conference. If the Government own 40 per cent. of the shares of the electricity companies and 100 per cent. of the coal industry, why on earth cannot they intervene? Nobody can understand the illogicality of that.
Because the electric industry operates within regimes that were passed and approved by the House, it is subject to regulation. The hon. Member reveals the stark distinction between what he and I mean by intervention. He means intervention in order to stuff costs down British industry which it can avoid in alternative ways.
Will my right hon. Friend pay careful attention to the fifth report of the Select Committee on Energy, and look at the medium-term projections for energy costs? I sympathise with his view that there are many conflicting statistics and figures, but every business in this country has to project supply and demand and estimate costs in the medium term, so that it should not be beyond the wit of the House to take an objective look at that, which will be vital in the forthcoming five to 10-year period for businesses, domestic consumers and, not least, our balance of payments.
Will the President of the Board of Trade explain to the House how a pit such as Silverdale in my constituency, which was recently described as the jewel in the crown of British Coal, can be put on the list for closure? What criterion is British Coal using for the list? Surely, if a pit such as Silverdale is due for closure, there is no hope for any of the others.
I understand how the hon. Lady feels. I have tried this afternoon to answer that question on several occasions. The explanation is very simple and stark. British Coal does not see a demand for its product, and British Coal does not see the price levels that it is currently getting beyond April of next year. There is a 25 million tonnes projected reduction in demand for its product. It has had, therefore, to reach management decisions as to which pits it should recommend for closure and which ones it should continue to exploit. It is that uncomfortable decision to which we will come back when I make my report to the House.
In view of the public expenditure implications of this unfortunate sequence of events, will my right hon. Friend confirm that all the measures that he has announced hitherto will be funded out of new money that he has obtained from the Chancellor and not out of existing budgets and thus give the House, and in particular hon. Members who represent other parts of the United Kingdom that have genuine economic and social problems, an assurance that our regions will not be penalised as a consequence of the sequence of events?
I can help my hon. Friend. I made it clear in my statement where the money was coming from, whether it was within existing public expenditure programmes or whether it was new money. I can assure him that, in terms of the two big announcements that I made today, they are new money. Of course, my hon. Friend is absolutely right. He makes the point that the coalfields have real hardship and problems, but so have other parts of the country. My right hon. and hon. Friends and I will certainly not ignore that.
The President of the Board of Trade's announcement will not save one of the 31,000 job losses that were announced last week. There will not be a review. There will be co-ordination by Lord Walker, whose history in running down the mining industry during his tenure in the Department of Energy is well known, and there will be no confidence in the mining communities about his appointment.
May we have a little bit of Thatcherism? May we argue on a level playing field so that coal can stand its ground against nuclear and gas energy? As was disclosed by the hon. Member for Leeds, North-West (Dr. Hampson), who was one of the right hon. Gentleman's campaign managers against Lady Thatcher, if the power generating boards do not agree to the 40 million tonnes, with every 1 million less the 19,000 jobs that are left in the industry will be threatened. We are not at the end of a closure programme with the loss of 31,000 jobs; we are at the beginning.
The hon. Gentleman is fully aware that we are not in any way at the beginning. The beginning started between the first and second world wars. It has continued remorselessly ever since, and it has been continued under all parties regardless of their political persuasion. Let me repeat, because the hon. Gentleman might not have heard what I said, that Lord Walker is nothing to do with the review. Lord Walker will co-ordinate the measures that are to help people living in coalfield areas.
I welcome my right hon. Friend's statement, and particularly the assistance that he offers to coal industry suppliers to pursue diversification and new markets. What steps will he take to ensure that suppliers play on even playing fields? What steps will be taken to ensure that British Coal rescinds the stop that it put on maintenance contracts last weekend?
My hon. Friend touches on a very important aspect of this matter, and that is coal industry suppliers. They, of course, have been aware of the likely contraction of the number of mines and, in certain cases, have already made their own plans to diversify their activities, particularly overseas. We have leading technology, particularly long-wall technology, in our suppliers, and we will do all that we can to give them every proper help. Obviously each company is different and each market is different, but I assure my hon. Friend that we will have urgent and intensive dialogue with them to see what we can do.
Is the Secretary of State aware that his announcement today that Parkside colliery, in my constituency, the last colliery in Lancashire, should close without further review is incredible? Is he aware also that Parkside has more than 40 million tonnes of coal reserves, that the vast majority of its coal goes direct to Fiddler's Ferry power station, only eight miles away, by direct train, and that British Coal recently installed a brand new machine on a new face at a cost of £6 million? Is the Secretary of State aware that on Friday not one single job for manual labourers was available at St. Helens jobcentre and that there is no chance whatsoever of any of the 800 miners who will lose their jobs in Parkside getting a job anywhere on Merseyside?
I know and the hon. Gentleman knows of the remarkable changes that have been taking place over the past decade in St. Helens. I salute the local community, the local authorities and Pilkingtons, who have played such a remarkable role in bringing about that transformation. The figures that British Coal has shown me for that particular colliery indicate that it is not able to make a profit even in today's circumstances. That is the real world that I have to confront.
I understand what the hon. Gentleman says about the investment that has taken place. There has been massive investment—that is very much the point that I am making—but it has not enabled the collieries that I am dealing with today to make a surplus. In those circumstances, if they cannot do it today at today's prices, they certainly cannot do it at tomorrow's likely prices.
My right hon. Friend was entirely right to reject British Coal's judgment that a Conservative Government could ever have connived in behaviour which threw men out of work at only 48 hours' notice. In the context of the review that my right hon. Friend has announced today, will it be possible to consider that, although gas may be cheaper now, by any judgment, gas stocks clearly will be less than coal stocks? Is not the relative position of the availability of sources something which the review might take into account?
My hon. Friend makes an important point about resources and reserves, but the history of the North sea has been a continuing one of extending the calculations for the amount of reserves that are available. The present calculations indicate that on the present levels of consumption we have about 50 years' worth of reserves, and that is before taking into account any further reserves which may be discovered. On any foreseeable calculation of the likely availability of fuel, there is a continuing availability of North sea gas as far into the future as any practical judgments can predict.
The President of the Board of Trade will be aware that the destruction of Grimethorpe will put out of work virtually the entire male population of Havercroft, Hiendley and Ryhill, but he is clearly not aware that Grimethorpe made a profit over the past three years and that it is not dependent upon electricity. It depends upon selling to local industry, in particular to Coalite. Coalite had absolutely no notice of the closure of Grimethorpe and it has been left in considerable difficulties as a result, and that is clearly very wrong.
Will the right hon. Gentleman clear up another matter? People keep talking about a review. I should have been very happy if a review had been announced, but, as I understand the right hon. Gentleman's statement, no review was announced.
I looked particularly at the problems of Grimethorpe colliery. However, as the hon. Gentleman will know better than I, it shares facilities with Houghton Main, which loses money. If we aggregate the two—[Interruption.]—if we close Houghton Main, then Grimethorpe is a loss-making colliery. If we keep them both open, they do not make a profit. We are faced with the fact that, on any calculation of whether that pair of collieries is ever likely to compete in tomorrow's market at tomorrow's prices, the answer must be that British Coal has made recommendations to me which I have accepted.
The hon. Gentleman asked a question which I have been asked on many occasions. I have explained that there will be a moratorium. I have announced 10 pits today which I am persuaded by British Coal do not and cannot make a profit in today's world, let alone tomorrow's. I have announced a moratorium for the other pits and said that I will come back to the House with a full explanation of the costs and calculations which the House will have the chance to debate before we take any further decisions.
Will my right hon. Friend accept that there is an understanding in Nottinghamshire of the very real pressures that the coal industry faces? However, there is no understanding of the way in which the announcement was made last week or of the peremptory way in which the UDM was treated in that announcement. Nevertheless, I greatly welcome my right Friend's statement today as a chance to think again and to ensure that we get it right this time.
I know how strongly people in Nottinghamshire felt and I have tried to indicate my own particular responsibilities in this matter. I do not in any way seek to absolve myself from those responsibilities. However, I must say that I have had discussions with the UDM leadership. Indeed, when the House has finished questioning me, I hope to see the UDM executive this afternoon to discuss these matters further. I attended the UDM conference and I have said that the Government will make available through British Coal financial help if the UDM wishes to proceed with, as I understand it, its present intention to become part-owners of the residual coal board.
I must tell the President of the Board of Trade how disappointed I was with his statement. Wearmouth colliery is in my constituency. It was to be mothballed, but I now understand that, due to the moratorium, it has a new lease of life. We will not be kidded about this. We have a stay of execution. The people in Sunderland believe that the Government need to be mothballed, not Wearmouth colliery.
I have a simple question for the President of the Board of Trade, but I am having great difficulty in coming to terms with it. Will the right hon. Gentleman explain how we can improve the trading conditions of this nation when he has already stated today that he is looking for cheap, secure energy supplies, but is using the two most expensive sources—nuclear and gas? We do not want a revised timetable; we want a new service.
I understand how strongly the hon. Gentleman feels, but it simply does not help to say that gas and nuclear are more expensive. If they were more expensive, there is no coherent answer to the question why anyone buys electricity from that source. I know that the hon. Gentleman will welcome the fact that we have made an additional £2 million available to the Tyne and Wear development corporation.
As most of this nightmare flows back to the mistakes made in the original electricity privatisation proposals which made electricity more expensive rather than less expensive, does not the President of the Board of Trade agree that he must have a much more fundamental look at the matter? Merely to suggest that there will be a postponement of closures is not enough. I am sorry to say that if he does not undertake today to put the 10 pits back into the total of 31 for fundamental review and saving later on against a background of a published unemployment figure of 3.2 million and a true figure of probably 3.75 million, he will not carry the House on Wednesday night.
I must rest with the arguments which I have deployed and which I will continue to deploy. I cannot believe that my hon. Friend and my right hon. Friends want me to incur public expenditure keeping open pits which are uneconomic at prices today which are going to be slashed tomorrow and keeping open pits supplying a market which will decline by 25 million tonnes next April. I cannot believe that the House wants me to take part in all the discussions that Governments properly carry out about the priority of public expenditure—cutting resources here, cutting programmes there and making arbitrary decisions there—the consequence of which is that I would have money to keep open uneconomic pits against the advice of the people who have to manage them.
The Bentley and Hatfield pits are in my constituency. Neither of them is uneconomic and both have made a profit this year. The people who work in the collieries cannot understand, and nor can anyone else, why the Government are shutting economic pits which are making a profit when PowerGen and National Power are supplying electricity to the regional electricity companies, when gas is 30 per cent. dearer, and when nuclear power is up to 350 times dearer. The only person in the country who will not accept the argument is the Secretary of State. No one can understand what the Secretary of State is playing at unless, as was said earlier, this is a vindictive attack in response to the 1974 dispute.
I think that I can answer the hon. Gentleman's question. The calculations of profit to which he referred are based on the present £1.88 per gigajoule which British Coal is receiving for its coal. The calculation that British Coal has to make is not in the context of what it receives today but what it knows it is at most likely to receive next April. That is the dilemma. It will receive next April only what someone is prepared to pay it. No one is prepared to continue to pay a price of the sort that leads to the notional profit to which the hon. Gentleman referred. That is the difficulty.
My right hon. Friend expressed concern in his statement that some miners would use redundancy money to invest in some of the pits that are proposed for closure. What inquiries have the Government received and what advice has my right hon. Friend received about the possibility of any of the pits being sold to the UDM or any other interests? Will he also tell us whether he has considered breaking the monopoly of British Coal?
There are inquiries. There are not very many, but there have been a few. I have to say that some of them tend to come from miners or their representatives who are concerned about the reduction in opportunities in their area. However, I would not wish to give any sign to my hon. Friend that there is a significant market for a significant number of those pits. I believe that there will be a market under the privatisation proposals for British Coal once we have been through this uncomfortable process. However, I do not believe that there is a significant market for the pits which are scheduled for closure.
My hon. Friend asked whether I had considered the idea of breaking British Coal's monopoly. The one thing that we have learnt this afternoon is that British Coal does not have a monopoly. It is very much in the market and has to compete on very onerous terms.
If the supposed justification for the closure of Silverhill colliery in my constituency is the operation of market forces, why has Britain imported coal that has gone straight on the stockpiles at pitheads and power stations? Was it to bolster a bad Government case? Are the stockpiles there to justify the action taken to close Silverhill immediately? Is it not time that there was a stockpile of redundant Ministers?
The hon. Gentleman will realise that the decisions on what coal to import, the volume in which it is imported and where it is stocked are matters for the generators, not matters for British Coal or matters for which I have any direct responsibility. If the generating companies or regional electricity companies imported coal, they would be responsible for their own decision. It is not a matter for me.
Will my right hon. Friend confirm, just for the record, that during their most recent 11 years in office Labour Governments closed twice as many pits as Conservative Governments have closed in the past 13 years? Furthermore, since 1985, more than 100 pits have been closed with the loss of more than 100,000 jobs. That is three times the number proposed at present. They were closed with the minimum of economic, social and political difficulty because the closures were phased over a period. Therefore, it was the rapidity of the present proposals and the way in which the announcement was handled which caused the reaction from Chesterfield to Cheltenham. It was not the long-term strategy of reducing our coal-mining capacity, which is accepted by most people, including the Select Committee on Energy, which studied the subject only last year.
I do not disagree with my hon. Friend's analysis. I do not wish to comment on the number of pits that were closed or the number of miners who left the industry under which Government. However, there has been a remorseless reduction in the industry post-war, regardless of which Government were in power. In reaching a judgment, the House will wish to bear in mind that the Government have invested more in the coal industry since 1979 than all previous post-war Governments put together.
Order. So that the House may know my intention, I inform hon. Members that at 5.30 pm I intend to call the hon. Member for Livingston (Mr. Cook) who, I understand, wants to make a response. We shall have questions until 5.30 pm.
I wonder what the people of Britain will make of the statement of the President of the Board of Trade today. First, he takes sole responsibility. Perhaps that is because there is no longer any collective Cabinet responsibility. The right hon. Gentleman also tells us—[Interruption] I shall come to the question in two seconds, Madam Speaker. The President of the Board of Trade also tells us that he agonised for months over the decision to close the pits. Yet yesterday, in "On the Record", he told the interviewer, Mr. Dimbleby, that he did not have time to telephone the Secretary of State for Wales. That is what he said; it is on the record. Then he said that he was frightened of leaks. Was that because he thought that the Secretary of State would leak the decision?
I am grateful to the hon. Gentleman for taking so much trouble to listen to what I had to say in "On the Record", but it would help if he had understood what I said. I made it absolutely clear that my right hon. Friend should have been informed of the announcement that that pit would be closed one day earlier than he was, and I have accepted full responsibility for that. British Coal submitted that name to my Department very late, and we did not transmit it to my right hon. Friend as fast as we should have done. There was absolutely no other explanation for that except that it was an administrative oversight for which I have apologised to my right hon. Friend.
My right hon. Friend referred earlier to the success of British Coal Enterprise in finding jobs for redundant miners. Will he give the House an assurance that before any redundancies are announced the measures that he announced today will be in place? Does he agree that the communities affected by the pit closures have a right to success and a right to look for jobs after coal? Does he further agree that the most tragic thing that could come out of the moratorium would be to raise hopes and expectations in those areas that suddenly markets for coal will appear when currently no such markets exist?
My hon. Friend has put the heart of the case which persuaded me that it was right to move forward. On all the evidence put to me—I shall have to explain it in detail to the House—the market will decline by 25 million tonnes next April. Therefore, I did not think it fair to those communities or desirable in their long-term interests to suggest that the market would exist. That is why I took the decision that I did, on the advice of the coal board. However, in the light of events, I have made the statement that I have to the House today.
I hope that the message that my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) has sent out will be understood. The message is that we are giving time for a wider understanding and a slower pace in certain circumstances. But that does not create a market for coal. Therefore, I can give my hon. Friend the assurance that we intend to proceed, with Lord Walker's help, with the implementation of the measures which I and my right hon. Friends have announced today.
Yesterday the President of the Board of Trade told the country that there was no alternative to the policy that he then had. Last night, together with the Prime Minister, he cobbled together an alternative policy. Can he tell the country how he can put forward a different policy before the House with any integrity? Will he explain how he can stand here with a new policy and still claim to have any integrity as a Minister?
Perhaps the hon. Gentleman has not fully understood, but I have explained, as clearly as possible, that there will be a lack of demand for 25 million tonnes of coal in the market place next April. I cannot create that market place. Therefore, it is important for me to explain to the House and to let the House debate and examine the implications pit by pit of the dilemma that British Coal faces. We can consult on these matters. That is what I have said today, but it does not change the basic dilemma that I have had to face ever since I took on this job.
Although I do not have any coal mines in my constituency, I have many concerned constituents who were very distressed. They have written many letters and they have telephoned me, as have the constituents of many other colleagues, about the way in which this matter has been handled. There is great anxiety that the matter should be clear in the future.
Could the President of the Board of Trade say something about the enterprise zones? He knows that I have been very interested in enterprise zones, and he and I have been involved in setting them up. They have not all been a success. Some of them need clarification. Does he agree that enterprise zones could be considered for the 10 mines that will be closed? Does he agree that the Chancellor of the Exchequer could consider increasing the tax benefits for setting up companies in enterprise zones so that companies do not simply move from outside the enterprise zones to inside them to avoid certain rates and taxes? Does he agree that there could be a real tax-free zone in enterprise zones where the coal mines were in the past?
I am aware of my hon. Friend's interest in not only enterprise zones but the whole issue of regeneration. While I can guess that the enterprise zone with which he deals is not as successful] as others, he will be aware that the broad picture has been of immense diversification and considerable success. My right hon. Friend the Chancellor of the Exchequer has no intention, as far as I am aware, to change the basis of the incentives which apply to enterprise zones. The concept of enterprise zones is a weapon that we are prepared to use in this case. We shall consider establishing such zones where we think it appropriate and where the area will benefit from it. We have not yet reached a decision on where enterprise zones will be established or the number.
So that no one is in any doubt, will the President of the Board of Trade confirm that all 31 collieries will still close, perhaps not next week, but by next April? Will he confirm that, notwithstanding anything he has said today, he intends to close 31 pits? Will he also bear in mind that two of the 10 collieries announced for immediate closure are in Barnsley? The devastating effect that those closures will have on that community is not worth thinking about when one bears in mind that we have lost thousands of jobs in the area since 1985.
I accept the hon. Gentleman's argument about the problems in Barnsley. That is one reason why in my initial statement I announced assisted area status. I believe that that will be a help, but I am fully aware there there will be difficulties, which I have always accepted.
As for the hon. Member's question about the 31 pits, he and the House know, as I have repeated it many times, that there is a gap of 25 million tonnes in the market for British coal. On that basis, one is led remorselessly to the uncomfortable conclusions that I first announced. Ten closures will proceed and there will be a moratorium, during which I shall produce detailed calculations for the House, and there will be a further debate. I shall not say that at the margin there will be no change in policy. How can I do so if I intend to make a statement to the House and invite it to debate the implications?
I cannot know whether other purchasers may emerge who may be interested in becoming involved in any of those pits. There will be an opportunity for all those things, but, in response to my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), I do not want to give the impression that the gap in the market projected by British Coal will simply be filled because there is a moratorium.
Mr. James Coachman:
In welcoming my right hon. Friend's statement today and the moratorium that he has announced, which eases the brutality of last week's announcement by British Coal, can he assure the House that the 21 pits included in the moratorium will continue to work normally throughout that time, that the work force will work properly and for the normal number of hours, and that no steps will be taken to pre-empt decisions that might be taken after the moratorium? Furthermore, can he assure the House that there will be complete transparency in the economic case that he sets before the House for each of the 31 pits concerned?
I want to help my hon. Friend. It is my intention to be as frank as I can in the statement that I shall make to the House. I understand how much interest the matter has created, and it is incumbent on me to satisfy the proper concern of my hon. and right hon. Friends.
I think that I made it clear in my statement that, at the 21 pits covered by the moratorium, voluntary redundancies will be available and there will be no closure unless it is by agreement of the work force.
Does the President of the Board of Trade realise that his statement promising the coal industry not a new policy but a slow death by delay will be viewed with dismay and disgust by people throughout the country and especially in Stoke-on-Trent where Trentham remains marked for closure? Does he realise that that pit set a European record last year for the fastest 2 million tonnes of coal ever mined and made a substantial profit? Is he aware that his claim that the pit lost £20 million this year is a fraud, because that figure includes one-off capital investment in a new administration office block, a new stockyard, a new fitting shop and new seams? Will he undertake an independent inquiry so that he can base his future actions on real facts and not on fakes?
I do not think that the hon. Gentleman takes into account the fact that there is no gain to British Coal in closing pits unless it sees no realistic alternative. If it sees no realistic alternative, there is no gain to British Coal in closing any other than the least efficient pits. British Coal will be charged with the responsibility for maintaining the fabric of its organisation and will obviously maintain that best if it keeps the best pits. So there is no logic in the assumptions upon which the hon. Gentleman based his question.
Will cheaper electricity not generate additional job opportunities in energy-intensive industry? Does my right hon. Friend accept that the only alternative to his statement is the creation of coal stocks equal to 18 months or two years' consumption—coal stocks which would make the butter mountains of the European Community appear to be mere hillocks?
My hon. Friend raises two points. Coal stocks are an issue that no one can avoid. They are increasing at the rate of 1 million tonnes a month. Miners in their communities know that. They mine the coal and there it is, either at the generating stations or at the pit head because there is no demand—to the tune of 1 million tonnes per month—for the coal that is being mined. Demand is scheduled to reduce by perhaps 25 million tonnes during the next few months.
My hon. Friend's second point is equally right. If we impose higher electricity charges on industry, it will make it less competitive and as a consequence there will be fewer jobs in industry. That is the sort of dilemma that we must balance.
Coming from a constituency which has endured three colliery closures within the past seven and a half months, may I convey to the Secretary of State the anxiety, the feelings and the depression of miners, with an average age of 27 years, who have moved from pit to pit with the guarantee that there will be no compulsory redundancies and who have been totally isolated and neglected and are now near, not to hope, but to despair? How can he reconcile the fact that he proposes to close profitable pits with the fact that uneconomic, dangerous nuclear power stations are being highly subsidised—to the tune of £1,260 million a year levy—and still command 20 per cent. of our total energy market? Could not the production from profitable pits replace at least 50 per cent. of that and save 10,000 miners' jobs? How can he justify the fact that the market competitiveness that he boasts about cannot have a level playing field because of a subsidised levy to protect the vested interests of the nuclear industry?
The hon. Gentleman ignores the cost of decommissioning the old nuclear plant. The nuclear levy exists to meet those costs. When the hon. Gentleman talks about a subsidy of more than £1 billion a year, he completely forgets the £18 billion which has gone in to the coal industry during the past 12 years.
My hon. Friend will appreciate that, as I have told many hon. Members, British Coal must calculate on the market that it foresees and not on today's market, and on the prices that it expects next April. It is well able to anticipate that position now because it is negotiating with the generators contracts which name tonnage and prices. Against that inescapable background, British Coal has made these extremely difficult proposals to me.
I have not once heard the Secretary of State and President of the Board of Trade apologise during this debate to the 500 miners in my constituency for the uncertainty of the closure proposals and the uncertainties that they face during the next six to nine months of the moratorium. Point of Ayr was included at the last minute and should not have been included. Why does he not take action today to ban imports of coal, which are damaging the industry, and to consider the gas situation? The gas will not go away; it is there. Why do we not have a proper, planned energy strategy which will secure the future of my miners, constituents and community?
Again, the hon. Gentleman will be more aware of the precise details than I am—[Interruption.] I understand that the hon. Gentleman's dilemma is that there are proposals for a gas and oil installation with an investment of some £2 billion alongside the Point of Ayr pit. That is the dilemma that we all face—a £2 billion investment to provide cheaper fuel for the electricity generating world alongside a pit which British Coal says is uneconomical and which it wishes to close. The £2 billion will create a huge number of jobs in the area concerned. There is a trade off, as hon. Members have discovered time and again.
As the House will have an opportunity on Wednesday to go over the many questions that the Secretary of State has left unanswered, only one point needs to be put on the record today. To remove the confusion that appears to exist among Conservative Back Benchers and so that there is no misunderstanding of the point when we debate it on Wednesday, will the Secretary of State confirm that there is no review—independent or otherwise—proposed in his statement? On the contrary, his statement commits him during the moratorium to
set out the full case for the closures which … I agreed".
There is no hint of a review here. If the Secretary of State is so confident of his case, why is he not willing to take his chance of arguing it before an independent review?
I have answered that question time and time again. I have told the House today that I shall set out in considerable detail the case upon which British Coal made its recommendations to me. I shall set out the implications of that and put them before the House once there has been a moratorium which will enable a discussion and consultations to take place. We shall not proceed with further closures until after the House has had a debate, after the moratorium has ended and after my report to the House has been made.
The hon. Gentleman wants to produce a review that will apparently raise a range of conflicting arguments upon which there will be no agreement before, during or after the review. As I said to one of my hon. Friends, those matters are deeply controversial within the energy industry, every part of which has a vested interest that it will not abandon, whatever the evidence put before it.
Ultimately, I am responsible for the Government's energy policy, which I shall set out, and I shall make clear the basis on which we intend to proceed—[HON. MEMBERS: "Resign."]
When the announcement was made last Tuesday, I wrote to you, Madam Speaker with respect to a Standing Order No. 20 emergency debate on the pit closure programme. Following that, the shadow Cabinet decided to allocate a supply day and, quite properly, to debate this issue. I believe that my request for an emergency debate tomorrow should continue so that we have a two-day debate to hear everything that my hon. Friends, in particular, want to say. At least 20 of them did not get a chance to put their questions today and many questions have remained unanswered, not least the last one put by my hon. Friend the Member for Livingston (Mr. Cook) about a review.
The President of the Board of Trade has been hoodwinking the people out there this afternoon. In particular, he has been hoodwinking some of his Back Benchers to give them the impression that he has delivered a moratorium when in fact he will conduct whatever limited review takes place and come back with whatever he likes. That is one of the unanswered questions.
This matter is urgent, important and specific. It is important because the Government talk about ballots yet when they discussed the matter in Cabinet they did not even have a ballot because they did not have a full Cabinet. It is also important as the matter is being rushed through because of the remaining 40 per cent. of the electricity industry to be privatised. There is 40 per cent. left to sell and the Government want to rush it through to line their friends' pockets. That is why they cannot afford to wait more than three months. They also want to get hold of the pension funds. There is £13 billion in the two pension funds belonging to the miners and others who work in the industry. It is estimated that another £1 billion is left, and the Treasury will try to get its hands on that £1 billion to pay for redundancies. That is the Government's game.
A woman in my constituency sent me a parcel yesterday. She said, "Here, take this to Heseltine. This is a miner's suit. He works in a hot seam. There's his pants; there's his vest. Give 'em to Heseltine. I hope he gets the other 30,999 and then he'll have an invaluable national asset." Here, take them. The woman said, "P.S. I've washed them, but the socks need darning." Why does not the Secretary of State put them on, clean up that coal outside his front gate, and never return?
Order. I have listened carefully to what the hon. Gentleman has said and must give my decision without stating any reasons for doing so. I am afraid that I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 20. Therefore, at this stage, I cannot submit his application to the House.
On a point of order, Madam Speaker. This concerns the conduct of the President of the Board of Trade. You will be aware, Madam Speaker, that on 4 March, the former and now defunct Energy Select Committee of the House—the House and the public set great store by Select Committees—published a three-volume report of 300 pages concerning the consequences of electricity privatisation. An important section of that was about the consequences for the coal industry. The Secretary of State published a response—or claimed response—on 9 June. As you will be aware, Madam Speaker, under a Cabinet minute available to all Select Committee members, the normal procedure is that the Government supply a response to a Select Committee report—that report had no fewer than 50 conclusions and recommendations—either by oral statement in the House, a command paper, or a memorandum to the Chair of the Committee concerned, perhaps supplemented by written answers.
In this case, a written answer and a press release referred to two documents that had been placed in the Library as deposited documents. Some hon. Members may not know that those are not normally available to the media. The two documents consisted of one memorandum of three and a half pages from the Secretary of State responding to nine of the 50 conclusions and recommendations of the Select Committee. There was another memorandum by the Director of Electricity Supply to the other 41. Some were replied to by both.
That semi-secret method and the mode of reply were not in accordance with the expectations or requirements of the House. It could be argued that, if some of those recommendations had been adopted, what we have discussed today would not have occurred. Will you therefore, Madam Speaker, rule on whether the Secretary of State's conduct was in accordance with the House's expectations? If it is not within your power so to rule, will you state by whom, which Committee and what means the President's disgraceful and inadequate conduct in a democratic state can be further examined?
Order. I cannot allow a response from the Government to a point of order which is directed to me, in the Chair, as I am sure that the Secretary of State will understand.
I am grateful to the hon. Member for Newham, South (Mr. Spearing) for giving me notice of his point of order, with a full explanation of what he had in mind. I believe that he is aware that the Government's response to a Select Committee report is a matter between the Government and the Committee—in this case the successor Committee to the Select Committee on Energy, the Select Committee on Trade and Industry. Therefore, alleged inadequacies in a reply do not raise questions that can be considered a point of order for me. I am sure that the hon. Gentleman has many ideas about how to pursue the matter in other ways.
On a point of order, Madam Speaker, may I seek your guidance as I want to help the House and clarify the matter. I shall immediately investigate how the situation arose—I suspect that it was to do with the fact that the Select Committee no longer exists. If the documents are not in the public domain, I shall seek an opportunity to put them there.
On a point of order, Madam Speaker. I believe that the House has been misled this afternoon. It has been given the impression that there is to be an independent review with a moratorium. In view of the fact that Trentham pit has already ceased operations on the evidence of——
Order. I want to help every Member when I can. I know that the hon. Lady has a deep constituency interest in the matter, but she is attempting to prolong questions on the statement, and I cannot let her do that by means of a point of order. I have every sympathy with her and I am sorry that I could not call her, but there are many other Members who I have been unable to call. I cannot allow further debate on the matter now.
Order. That is a very good try, but it is not a point of order for the Chair. I saw the hon. Gentleman rising earlier and I think that he had better leave the matter with me for later. I might remember his face in a few days' time.