I have selected the amendment standing in the name of the Prime Minister. I should also tell the House that more than 70 Members wish to participate in the debate. Therefore, it will be no surprise to the House to know that I have limited speeches between the hours of 6 and 8 pm to 10 minutes and I shall expect those Members who speak outside that time to exercise a great deal of voluntary restraint.
I beg to move,
That this House regrets the failure of the President of the Board of Trade in his statement on Monday 19th October to provide for a review of the programme of pit closures; and demands that no pit be closed until the Select Committee on Trade and Industry concludes a review of the costs and benefits of closing the pits and the comparative costs and benefits to the nation of retaining them in production.
Last week, when we announced this debate, it was dismissed by one of the newspapers as a parliamentary ritual. Far from proving a parliamentary ritual, the debate has already proved a parliamentary first. It is the first occasion in the history of Supply days on which most of the Opposition motion has been conceded by the Government in the 48 hours since it was tabled.
We begin our motion by regretting the failure of the President of the Board of Trade to announce a review in his statement on Monday. We now have it, on no less an authority than the Prime Minister in his briefing yesterday, that it was always the intention of the President of the Board of Trade to announce a review. Somehow, in two hours of statement and answers to questions, he ran out of time to announce it. We are told that the great communicator was unable to express himself lucidly in the frenetic atmosphere in the House.
In the motion, we also call for the review that the President of the Board of Trade did not announce on Monday. The right hon. Gentleman will remember that I called on him to give us a review. This is what he said:
A review … will … raise a range of conflicting arguments upon which there will he no agreement before, during or after the review … I am responsible for the Government's energy policy … and I shall make clear the basis on which we intend to proceed."—[Official Report 19 October 1992; Vol. 212, c. 233.]
That was on Monday. On Tuesday, Lord Wakeham made clearerer the basis on which they intend to proceed. It is appropriate that Lord Wakeham should have been chosen for that role. After all, it was Lord Wakeham who, during the last general election, issued a press release with the heading "Labour's plans for coal would mean lost jobs." For good measure, the following week he added another press release, in which he said:
I want to set the record straight, by restating the profound commitment of this Conservative Government to the coal industry and to everybody who works in it.
I understand why Lord Wakeham would wish to rescue his credibility from the assault on it by the President of the Board of Trade. On Tuesday, Lord Wakeham made it plain that there was going to be a wide-ranging review, that the issue of how much coal was burnt by the electricity industry would be a part of it, and that we could look again at whether gas should substitute for coal and whether it made sense to import so much coal.
I must ask the President of the Board of Trade: who is responsible for Government energy policy? Is Lord Wakeham still responsible? He has done more to make clear the basis on which they will proceed than the right hon. Gentleman did in two hours on Monday.
Finally, our motion calls for the Select Committee on Trade and Industry to carry out an inquiry. On Monday, the President of the Board of Trade managed to address the House for two hours without once uttering the words "Select Committee." By Tuesday, the Prime Minister was telling us how pleased he was that there might be a Select Committee inquiry and how full the co-operation with it would be. My only regret is that, when we tabled the motion, we did not call for a general election now, in the hope that they might call for that too.
I notice that the Government have sufficiently retained the habits of parliamentary ritual that they are not able to accept our motion but have tabled an amendment. If they meant what they were saying yesterday, why cannot they accept our motion after swallowing so many parts of it?
I do not flatter myself that it was the cogency of our arguments that convinced them. What shifted Ministers was a nation united in anger at the destruction proposed for Britain's mining communities—an anger that transcended party political differences. I know that, because my office has been inundated for the past seven days by calls from Conservative supporters from Surrey to Somerset. Conservative Members know it, because they have had the same experience with Conservative voters in their constituencies. The President of the Board of Trade knows it, because he knows to what extent he has had to shift his position during the past three days.
We await the right hon. Gentleman's speech with eagerness to find out how much further he has moved today, because there are still two flaws in the Government's broad promise of a review. First, it will be a review of only two thirds of the closure programme. The amendment is adamant that the review will affect only 21 of the 31 pits. We are told that the other 10 are uneconomic and must close. Grimethorpe produces coal at £32 a tonne. That is cheaper than the coal imported to Britain.
But the review promised by Lord Wakeham went wider than simply a pit-by-pit examination of whether any one pit was profitable. The review promised in the House of Lords yesterday was to look afresh at whether it made national sense to burn gas rather than coal. If it is to be a real review considering broad questions of energy strategy, why should one fifth of the British coal industry be shut down before we receive the answers?
Another flaw tempers our joy at the change of heart. Yes, the Select Committee may carry out an inquiry, but it is clear from the Prime Minister's amendment that the review that the Government have in mind is a review by the Government—by the Department of the right hon. Gentleman who made the decision. How seriously can we take the proposition that, having made the immense blunder, the President of the Board of Trade is the right man to make a success of reviewing it? If we are to take it seriously, we must hear today from the right hon. Gentleman which part of the decision he now thinks that he may have got wrong and needs to be reviewed.
The hon. Gentleman flatters my right hon. and learned Friend the Leader of the Opposition too highly by suggesting that in the few months that he was a member of the last Cabinet quite so many pits were closed—[HON. MEMBERS: "Answer the question."]
I shall take up the hon. Gentleman's point. I have several times heard the President of the Board of Trade reciting the figures for the closure of pits since 1945. That means—I think that this was the thrust of the claim of the hon. Member for Shrewsbury and Atcham (Mr. Conway)—that what we see now is not a new energy strategy but the continuation of previous trends. A large number of pits were closed in the 1950s and 1960s as the demand for house coal collapsed, but there was a new market for coal for the power stations.
During every Government since 1945, be it Conservative or Labour, there has been an increase in the amount of coal going to power stations to be turned into electricity. The Government elected in 1992 will be the first post-war Government to propose reducing the amount of coal being burnt for electricity. That is the source of the current crisis in Britain's coal industry. The Secretary of State for Trade and Industry who sits before us is the Minister with responsibility for industry; he shares with the Chancellor the responsibility for pulling industry out of recession and putting the economy on the road to recovery.
Last week, there was another announcement: the unemployment figures, which show an increase of 32,000 in the number of people out of work. The level of male unemployment is higher than at any time since the 1930s, even after the many times that the right hon. Gentleman and his colleagues have manipulated and massaged the unemployment figures.
There can be no higher aim of economic policy than reducing unemployment and getting Britain back to work, yet, in the same week, the President of the Board of Trade added another 30,000 to the unemployment total. For the men who live close to each other in the small communities that were shattered by last week's blow, the offer of retraining is an insult unless someone tells them where the jobs are for which they are to be retrained.
It was not just the miners who lost their jobs because of the right hon. Gentleman's statement. They are only the first wave. There are the 5,000 staff at the coal power stations who also will not work if the mines cease to produce the coal to burn. There are the 10,000 men who work the freight trains and lorries who also will not work if there is no coal to transport. There are people with jobs in the factories that supply the mines, 20,000 of whom are likely not to work if there are no mines to supply.
That will bring redundancies to places far from the coalfields—to Tewkesbury, where they make the pit chocks; to Basingstoke, where they make the cable belts; to Pudsey, where they make the underground motors; to Worcester, where they make the mining chains; to Chippenham, where they make the electronic controls. These redundancies will reach every part of Britain including the Tory part. The real casualty list of last Tuesday does not number 30,000; the total number of jobs destroyed by that statement is more than 100,000. The country was looking for a decision that would expand the economy, not tear another great hole in the demand in the economy.
We must therefore ask the President whether he will now admit that he got this part of his decision wrong and that the damage to the economy is a powerful argument for reviewing his decision.
What message will the hon. Gentleman give to the Yorkshire miners who will lose their jobs because Labour-controlled Leeds city council has decided to use imported Colombian coal?
The right hon. Gentleman has just joined us in this House—[HON. MEMBERS: -A promotion."] I have to confess that I have flattered the hon. Gentleman, in that not even his Front-Bench colleagues love him enough to make him a right hon. Member. I understand, however, that he knows something about local authority law. It is therefore disingenuous of him to come to the House and protest about the consequences of the law on competitive tendering which the Conservative Government passed and which removed freedom of action from local authorities.
To return to the present troubles, the President of the Board of Trade is fond of reminding the world of his title—that he is indeed President of the Board of Trade. Our economy faces another challenge on another front as well. We have a trade gap with the rest of the world which is mounting at the rate of £1 million an hour. That is a major challenge to our economy. If the right hon. Gentleman closes these pits, in the short run Britain will survive only by increasing its imports and in the long run Britain's industry will continue in production only if it imports gas to run the power stations that will replace the coal power stations.
On Monday, the right hon. Gentleman told us that North sea gas will last for 50 years. His own Department does not believe him. It has published a thick assessment of the reserves of North sea gas which shows that proven gas reserves will last for 10 years. The undiscovered possible reserves may last for 50 years, but, as the Department says, those are the reserves to which least certainty can be attached. They may exist, but they will certainly not come in at the price of gas from the North sea today, as we move into the deeper water.
There is another reason why we know that the Department does not believe the right hon. Gentleman. Last month it published energy paper 59, which contains the Department's scenario for the year 2020, well within the right hon. Gentleman's 50 years. It makes it plain that, in the year 2020, Britain will be dependent on importing its gas from Siberia, Algeria and Norway. By the year 2020 Britain will be importing three quarters of its primary energy needs—this in a nation that five years ago was self-sufficient in its energy demands.
How much will that add to the trade gap? How many more export orders will our declining engineering industry have to find to pay for the gas on which it will depend to run, and what other country in Europe would be daft enough to make itself dependent on imported energy when it is sitting on hundreds of years of coal reserves? Will the President now admit that he got it wrong when he endorsed a strategy to replace British coal with imported sources, and that the impact on the balance of trade is another reason for him to admit that he was wrong and to review his decision?
Can the hon. Gentleman name one occasion during the huge rounds of pit closures in the 1950s, 1960s and 1970s when a Government of any colour initiated an independent review of those pit closures?
I will answer the hon. Gentleman's question when he tells me of a single compulsory redundancy under the last Labour Government. He knows perfectly well that there has not been one compulsory redundancy in the mining industry, not just under any previous Labour Government but under any previous Conservative Government either.
Order. The hon. Gentleman must resume his seat. He is debating with me and I am not in a position to debate with him. He must wait to be called. If he is fortunate, he might catch my eye.
There is another portfolio in the President's lap. As well as our Secretary of State for Trade and Industry and our President of the Board of Trade, he is now Britain's energy Minister. Therefore, his decision must be judged on whether it adds up to a sensible energy strategy for Britain.
What is most worrying about last week's decision is the fact that it is impossible to glimpse any energy strategy behind it. I hope that, when the President addresses us, he will spare us his solitary claim to justify that energy strategy that, as he has claimed in the past seven days, gas-fired electricity is cheaper. It is not, and nobody outside the DTI believes that it is. The Select Committee on Energy, which has a Conservative majority, does not believe that it is.
I would take the hon. Lady's sedentary intervention more seriously if her Government were not importing orimulsion, which is the dirtiest fuel known to mankind.
The Select Committee's report in February said that electricity from present coal power stations would be generated at prices of up to 2.2p per kWh; that electricity from the new gas power stations which will replace it will start at 2.6p per kWh; that it is almost impossible to discover a single new gas power station which will generate electricity that will not be more expensive than the existing coal power stations; and that the one gas power station which has started to generate electricity is doing so at 3p per kWh, which is more expensive than almost all the coal power stations.
Last week, the chief executive of PowerGen said:
Our coal-fired plant is able to generate more cheaply than most of the gas-fired plant which is now threatening to displace it.
It happens that the Select Committee also stated:
if improved technology had not been available there might have been no new entrants to power generation in Britain.
It added that combined-cycle gas turbines are
much the cheapest form of new generation, but are economic at smaller sizes than conventional coal-fired stations.
If the hon. Gentleman reads the submissions that many of us have received from the electricity trade unions, he will find that they too agree that gas-powered stations are more economic.
The hon. Gentleman, as my hon. Friends will have noted, has made an elision in referring to comparisons between new gas-powered stations and new coal-powered stations. The question that his right hon. Friend the President of the Board of Trade has to answer is, why should he shut down coal-powered stations that have another 10 or 15 years of useful life, stations that have been built and paid for and are therefore producing electricity more cheaply than a new power station can possibly do?
The hon. Gentleman is referring to power stations that have been written down and are therefore producing cheaply. A power station that my husband went round the other day—[Laughter.]
The Opposition evidently do not wish the be informed. The power station has been written down to £195 million. Alongside it, a cleaner plant is being constructed at a cost of £220 million. The surrounding landscape will be devastated, because it is necessary to extract the limestone. Production now is cheap, but if we take into consideration the cost of the cleaner plant—as I have said, it will be £220 million—production will be jolly expensive.
First, I bow to the authority and expertise that is the basis of the hon. Lady's intervention. Secondly, I refer her to the Select Committee. As well as taking into account comparisons between new gas-powered stations and existing coal-powered stations, it considered price comparisons once existing coal-powered stations had been desulphurised. The figures showed—even after allowance had been made for that cost—that existing coal-powered stations were still producing electricity at a lower price than new gas-powered stations.
If the hon. Member for Lancaster (Dame E. Kellett-Bowman) is serious about wishing coal-powered stations to be fitted with clean technology, she must ask those who occupy the Government Front Bench why, even now, only two coal-powered stations are being retrofitted, when every coal-powered station throughout Germany has been fitted with clean technology. Indeed, Germany has done so time and again by using technology developed in Britain that is not being applied here.
The two chief executives of both Britain's generating industries have gone on record as saying that electricity from their coal-powered stations is cheaper than the electricity that will be generated by the new gas-powered stations. I must tell the President of the Board of Trade that the statements of those two chief executives carry more credence than his promises of the flat opposite.
I remind the right hon. Gentleman of his case. Last week, his case was that his decision would produce cheaper electricity, which would support industry and create jobs in industry. If the chief executives of our two major generating companies are right—that the decision will result in dearer electricity—by his own logic he is imposing a penalty on industry and destroying jobs in industry.
Over the past eight days, however, I have noted another interesting shift in the right hon. Gentleman's presentation of the economic case. When he discovered that he could not demonstrate that electricity from gas would be cheaper, he shifted his ground to inventing a subsidy. By last weekend, he was quoting a subsidy to the coal mines of £100 million a month. That has turned out to be a complete mystery to British Coal, which was unaware that it was receiving £100 million a month. It turned out to be a complete mystery to the right hon. Gentleman's officials at the Department, who were unaware that they were paying £100 million a month.
In yesterday's edition of The Daily Telegraph, one of those officials was quoted as saying that the President of the Board of Trade had in mind "a theoretical subsidy". I must say to the President of the Board of Trade that the job losses are not theoretical; the hardship to the families and the destruction of coal mining communities is not theoretical. In the months of his review, the right hon. Gentleman will have to find a harder financial case for closing those pits than a theoretical subsidy that nobody is paying them.
The Secretary of State then fell back on another position when he discovered that he could not justify the subsidy. He took refuge in the sweeping assertion that, because the electricity supply industry wants to produce electricity from gas, it therefore must be cheaper. That is the way markets work, he tells us. They always give the consumer the best deal. They are never distorted by the commercial interests of the company selling the product, are they?
The first thing that the President of the Board of Trade should note is that there is no market in electricity consumption. The consumer does not have a choice. The consumer does not wander to the wall and wonder, before he turns on the switch, "Will I go to LEB or NORWEB tonight? Who is offering the best spot price?" What the right hon. Gentleman and his colleagues have created are private monopolies in which the consumer has no alternative.
The second point that the President of the Board of Trade must take on board is that the regional electricity companies have shares in most of the gas power stations being built. It does not matter to them if they pay more, because they cream off the profits as owners of those power stations. The only reason they are doing that is that they see it as a way of undercutting PowerGen and National Power. What will we be left with?
The hon. Gentleman has asked about an official appointed by his own Government—an official chosen by his Government after, we are told, an earnest process of head hunting. And lo, that earnest process of head hunting came up with the choice of the man who had advised them on the privatisation of the electricity industry—a man who is plainly under judicial review at the present time for being in default of his powers under the Electricity Act 1989.
To sum up, we are now left with an energy strategy that makes no sense to the consumer because it results in higher prices, no sense to the economy because it results in higher unemployment and deeper recession, and no sense to national security because it writes off access to our coal reserves. It does make commercial sense to those electricity companies. Is the right hon. Gentleman really going to let Britain's energy strategy be decided by what is in the commercial interests of those electricity companies, even if it is against the national interest?
It is no good the President of the Board of Trade spreading his hands in innocence and saying that all the gas stations were the decision of the electricity industry and not his decision. Every one of the gas-fired generating stations coming on stream was given a licence to do so by Ministers. As late as August, the President of the Board of Trade himself approved two further licences—that at a time when, as the right hon. Gentleman would have us believe, he was agonising over the number of pits that he would have to close. If the right hon. Gentleman really was agonising about the effect on the coalfields, why did he approve two more licences for two more stations that will take out two more pits?
On Monday, the President of the Board of Trade said that the electricity companies would not sign a coal contract, even though he had spoken to them nicely. He may even have spoken to them rudely, but he said that they would not sign up, and asked what he could do.
The remedy is in the right hon. Gentleman's own hands. Condition V of the licence makes it explicit that the electricity supply industry must buy electricity from the cheapest source. It is not doing so, but is closing pits to buy from a more expensive source—and the right hon. Gentleman should not let it get away with that. The President of the Board of Trade should no more let the electricity supply industry break the law in its purchasing than he should have connived with British Coal in breaking the law over its redundancy package.
The pits that are being abandoned contain some of the richest coalfields in Europe—seams that are about to be flooded. No wonder the rest of Europe thinks that we have gone mad. The President of the Board of Trade says that he must not let his heart rule his head. I will not quarrel with that—I do not want the right hon. Gentleman's heart to rule his head—but I ask him to use his head in providing an energy strategy that is in Britain's interests.
I agree with the right hon. Gentleman, however, that the plight of Britain's mining communities has touched the heart of the nation, which has been moved by reaction to the statement that the right hon. Gentleman is destroying not just jobs but the virtues of close-knit, loyal communities based on a work force that understands that solidarity is important not just to the output of the shift but to the lives and safety of its members.
Another characteristic of mining communities is the courage that they have shown in mining coal from the earth, and in rescuing workmates trapped under that earth. But there is another kind of courage than physical courage—the courage to admit that one was wrong. It does not carry the same risks of danger, but it demands some humility.
The President of the Board of Trade owes it to miners to show that courage and humility. He should admit that he got it wrong and promise a real review of energy strategy, that no pit will cease production until it has been proved that the nation does not need its coal, and that he will intervene to challenge the electricity industry's short-sighted priorities.
If the right hon. Gentleman will do those things, I will applaud his courage. If he will not, I warn him that we will harry him at every turn. We will press the miners' case before breakfast, before lunch, and before dinner—and we will get up and do that again the next day. We will mobilise the public anger that the President of the Board of Trade has aroused until he admits that he was wrong, agrees that the British economy needs the British coal industry, and removes the axe that he has poised over 31 pits.
I beg to move, to leave out from "House" to the end of the Question and to insert instead thereof:
recognises the difficult economic judgments the Government had to make in accepting British Coal's proposals to close 31 collieries; endorses the Government's conclusion that British Coal should introduce a moratorium on the closure of 21 of these pits unless the workforce agree otherwise; welcomes the speedy action of the Government in introducing special assistance measures for coal mining areas; and notes that the moratorium will enable the Government to take views and evidence on the future of the pits in question and to consider these in the context of the Government's energy policy, including the consequences of that policy for British Coal and the employment prospects for the industry, and allow the Trade and Industry Select Committee to consider the issues as it thinks fit, and the House to debate the issues that will be presented to it in the New Year before decisions are reached about future closures.".
I think that the whole House will have listened to the hon. Member for Livingston (Mr. Cook) rehearsing broadly the same approach to nationalised industry that caused such devastation to so many industries under the Labour regimes. Regardless of the advice of management, difficult decisions were put off, costs were subsidised and change was prevented, at considerable cost to the rest of our economy, and cost to the consumer as a consequence.
Everyone will have realised that, in setting out his arguments today, the hon. Gentleman gave no concept of the cost of the implications behind his words. He gave no indication of how he would carry his policies through, or of the consequences for the industry itself and its customers; he gave no indication of the costs, or of the competitiveness of the industries that depend on the electricity generating industry.
On Monday, I made a statement to the House in which I acknowledged the existence of widespread concern at the speed of the proposed rundown of the coal industry under the previously agreed proposals. Consequently, I announced that British Coal would be allowed to proceed with the closure of only 10 clearly uneconomic pits, after the statutory consultation period had been completed. I also announced that the remaining 21 pits originally identified for closure would be the subject of a moratorium until early in the new year, and I confirmed that there would be no compulsory redundancies during that period, although voluntary redundancies would still be allowed to proceed under the terms announced by British Coal last week.
I certainly intend to give way during my speech, but it is important for me to set out the answers to important questions for the benefit of the House. I hope that I shall be able to answer a great number of the questions raised by right hon. and hon. Members on both sides of the House, and it may be helpful if I am able to do that in an orderly way so that the comprehensive nature of what I intend to say is available to the House before we discuss its implications.
Finally, I announced a substantial and very wide-ranging package of new measures to assist the coalfield communities as and when they suffer job losses, or in anticipation of such losses.
The consequences of the introduction of the moratorium will be as follows. First, it will enable negotiations to continue between British Coal and the electricity generators on new coal contracts. Secondly, it will enable a widespread process of consultation to take place with all the principal providers and consumers of energy, the trade unions and other interested parties. That process of consultation will allow us to examine in detail whether the case for further closures has been made, and whether ways and means can be found to increase the use of coal and, as far as possible, to lessen the impact of any closures.
Self-evidently, those who wish to make representations or submit evidence to us are full masters of any decision about whether that should be published. I neither seek nor have the powers to prevent whatever publication they choose. I shall commission my own inquiries. I intend—with one exception to which I shall refer immediately—to make public the findings of such inquiries.
The exclusion that I must make is that I shall not be able to publish information with which I am provided in confidence and which is commercially sensitive. Unless I give that assurance, it is inevitable that private sector companies could well withhold relevant facts and figures from my inquiry. I assure the House—
Let me make it absolutely clear that I have no powers to constrain a Select Committee in any way. It may make any inquiries of any parties. It has very powerful weapons at its disposal to compel attendance and to secure what information it requires.
I think that the House appreciates that I have no power to constrain the proceedings of a Select Committee, and I would not be involved in that process.
My right hon. Friend referred to the Select Committee inquiry. His own inquiry will deal with questions that would exclude the 10 pits that are to be closed. Therefore, I ask him, his having considered the letter that I wrote to him this morning, to be good enough to give me an indication of whether he would take the Trentham pit out of the 10 pits that have been listed, in the light of the evidence that I have given to him in that letter.
I want to deal seriously with the point made by my hon. Friend, although I should have come to a part of the speech where it would have been easier to do so. However, my hon. Friend has put the question to me. He gave me notice yesterday lunchtime of specific information that he had available about Trentham. I received that information around lunchtime today. I have, of course, made as early an inquiry as I can from the Coal Board in what are obviously very limited circumstances. I cannot tell my hon. Friend that I can withdraw the Trentham pit from the list of 10, in the light of the reply that I will be sending him and the information that the Coal Board has made available to me, but I think that I am able to help my hon. Friend, in that—and I shall say this a little later in my speech—when a colliery is going through the consultative process it is the responsibility of the Coal Board not to prejudice the outcome of that consultative procedure. By that, as I understand it, it is the Coal Board's responsibility not to do anything that would preclude the continuation of that pit, should the consultation produce evidence so to justify. I hope that my hon. Friend will understand that that is as full an answer as I can give in the circumstances and in the time.
May I ask the Secretary of State to explain one point arising from his last answer? Is he saying that if evidence in the review is brought to bear that could affect the fate of the 10 pits that he has sentenced already, that, too, would change the view on the 10? It is a factual question. It is very difficult to understand the argument. Is he saying that the 10 pits could be reprieved in the review, when they have already been closed under a decision taken without proper consultation?
The right hon. Gentleman has raised the generalisation that flows from what I said to my hon. Friend the Member for Stafford (Mr. Cash). The statutory consultative process is now beginning in respect of the 10 pits. It must be a genuine consultation, and it is the responsibility of the Coal Board so to manage those pits during that consultative process that if it is persuaded that there is a case to continue the pits it will not have prejudiced that position during the consultative process.
If it is true that that is open to British Coal in the light of the consultation, which the right hon. Gentleman says is now to be resumed, why was the decision announced on Monday that, whatever happened, the pits would close? The Secretary of State has prejudged the consultative process, which he has now used to try to win support from his own Back Benchers. What is the position of the 10 pits? Are they able to be saved, and if so why did the right hon. Gentleman say that they would all have to close?
As the right hon. Gentleman and the whole House know, British Coal has advised me that these pits are uneconomic. [Interruption.] It is no use the Labour party arguing against a consultative procedure that it followed when it closed pits. British Coal is proceeding along that path, and I have made it absolutely clear that it must fulfil that statutory obligation. That is the position.
My right hon. Friend will be aware of my question, because I have discussed the matter with him. There is much confusion about this point. It is not understood exactly what has been said. Does he mean that there will be care and maintenance in those 10 pits for the whole of the consultative period, because in the High Court yesterday Charles Falconer QC, on behalf of British Coal, said:
But we give an assurance that what we do will not prejudice the outcome of the consultations".
Does that mean full care and maintenance, because there is much confusion about whether it does?
My hon. Friend, who has taken a vast and proper interest in these matters, is asking me to reaffirm the very point that I made to my hon. Friend the Member for Stafford and the right hon. Member for Chesterfield. The Coal Board is compelled by the procedures to maintain the option of continuing with the pit. It must indulge in the appropriate care and maintenance to keep that option open. I do not believe that I could have said it more clearly.
I must get on.
Early in the new year, I shall publish a White Paper setting out the results of my inquiries set in the context of the Government's energy policy and making clear the consequences of this for British Coal, the implications for individual pits and the employment prospects for the industry.
I am most sorry to interrupt my right hon. Friend as he is moving on, but I still believe that the issue of the 10 pits is of paramount importance to many Conservative Members.
If those pits are left on a care and maintenance basis, and if there is consultation, does that mean that at the end of the consultation period they can continue open, and continue to produce coal, if the consultations and the Coal Board's decision suggest that that should happen? If so, how are the 10 pits different from the other 21? Why are they not all subject to the moratorium?
My hon. Friend has asked the question to which I have already, in part, given the answer. The distinction, for which the House is fully entitled to ask, is that those 10 pits are actually losing money now—[Interruption.] They are losing money now, at the prices that prevail now—and British Coal knows that from next April it will not obtain those prices. That is why those 10 pits will be subject to the procedures that will make it possible to close them. [Interruption.] I confirm to my hon. Friend—
May I reply to my hon. Friend the Member for Rochford (Dr. Clark), and reiterate what I have said? The statutory procedures for closure must not prejudice the outcome of those procedures, but the advice of the Coal Board is that those pits are now losing money, and therefore the board's advice to me is that they should proceed to closure. There is no case that I can see for waiting until the end of the moratorium in order to begin the consultative procedures; the advice from the management of those pits is clear—
Order. Hon. Members should not persist. The Minister is making it clear to me that he is not giving way at the moment—[Interruption.] Order. I am sure that the Minister will make it clear when he wants to give way, and I ask hon. Members to let us proceed with the debate until then. I want to hear more Members speak. I want to hear not only the Front Benchers but the Back Benchers, too.
Early in the new year I shall publish a White Paper setting out the results of my inquiries in the context of the Government's energy policy, and making clear the consequences of that policy for British Coal, the implications for individual pits and the employment prospects for the industry. Before then the Select Committee on Trade and Industry will have a full opportunity to consider all those issues as it thinks fit. Members of the House will also have an opportunity to debate the issues fully. I shall present the conclusions and future decisions to the House.
I shall now set out in detail how I intend to proceed with the review. I say at once that I have—
On a point of order, Madam Speaker. I am sorry to interrupt now, but I have been trying to intervene and refer to the question asked by—[Interruption.] I have been trying to raise a point of order, subsequent to that raised by my hon. Friend the Member for Clydesdale (Mr. Hood)—a point of order about the resolution itself. The question is whether the resolution is in order—[Interruption.] I am sorry, the question is whether the Government's amendment is in order. It would be in order only if it could be shown that the information available to the review would be equal to that available to the separate inquiry that has just been announced.
If the amendment was accepted as being in order prior to the knowledge that there were to be two reviews, one by the President of the Board of Trade and another by the Select Committee, and that the information available to the President of the Board of Trade under commercial confidentiality could be used by him to overrule the Select Committee, surely it cannot be in order now, because that information undermines the basis of the amendment. That is what the President of the Board of Trade is trying to present to the House. He will overrule it on the basis of information that is not available to the Committee—[Interruption.]
The hon. Gentleman has been rising to intervene on the President of the Board of Trade by saying that he wanted to refer to the White Paper. He now raises with me a point of order which has already been raised. The amendment would not be acceptable and it would not have been selected by me unless it was perfectly in order. I have already dealt with that matter.
I want now to set out in detail how I intend to proceed with the review. I must say at once that I have listened most carefully to the many points that have been put to me, particularly by my right hon. and hon. Friends. I believe that I will be able to address their concerns. I intend to look separately at every one of the 21 pits in question and decide whether the case for closure has been fully made.
I have today invited Boyds, an international mining consultancy of world repute, to report to me on the viability of those pits. I also intend to appoint consultants to report on the prospects for British Coal, including any alternative markets that may exist for this product, and to comment generally on the competitiveness of British Coal as an organisation. I shall be having discussions with the generators and the 12 regional electricity companies to satisfy myself that the market prospects for coal have been correctly assessed and that no company is abusing its position in the marketplace.
I will, of course, consult the regulator charged by Parliament with this responsibility. I will report to the House on the level of coal stocks, both at the pithead and at the power stations. I will consider whether plans to run them down are sensibly phased. I will set out for the House the consequences of the switch to gas and the whole question whether gas is cheaper.
I will produce for the House the latest estimate of the likely reserves of gas and the conclusions that we draw from that. I will report to the House on the present scale of gas-generated power stations in production, in build and in the planning process. I will review the use of the consent powers as foreshadowed by my predecessor in his statement of 9 March. I will consider whether it is sensible to mothball—
Before the right hon. Gentleman concludes his list, will he answer a simple question to which the House is entitled an answer? Why did he not do all those things before announcing last week's decision?
The hon. Gentleman is fully aware that we have considered all those things, but the House wants further and better details—[Interruption.] It is because we are persuaded that that is the right way to go that I have promised the House that I will set out these issues and that the House will have a full opportunity to consider them. [Interruption.]
I will be considering whether it is sensible to mothball some of the 21 pits which were due to close. I will explore once again the opportunities for the private sector in the production of coal. Finally, I will report on the existing and anticipated level of imports and the wider economic implications of this.
Throughout that process, I will be pleased to receive the views of all interested parties, both inside and outside this House. Let me also promise the House this: the consultation process will be aimed at considering all views without restriction. It will have no pre-ordained outcome. The concerns of the House will be met fully in this respect. It will be a genuine review.
I am grateful to my right hon. Friend for his most helpful and detailed clarification of the parameters and elements of this thorough review. The words used towards the end of the amendment are very important. They are
the Government … allow the Trade and Industry Select Committee to consider the issues as it thinks fit".
Is it not therefore, in the light of what my right hon. Friend has just said most helpfully, the same thing as saying that he will accept the recommendations of the Select Committee?
At the end of the three-month consultation period, I will present a White Paper to the House taking into account all the arguments that have been presented and setting out our full conclusions and their implications for the coal industry within the context of our wider energy policy.
Those of us on the Conservative Benches, and there are many of us who have been extremely concerned over the past week, much appreciate the thoroughness of the review that my right hon. Friend has announced. It is for that reason alone that many of us will support my right hon. Friend in the Lobby this evening. If, by any chance, the review is not as thorough as he promised—although I fervently believe that it will be—we will still have the opportunity to vote against the closures.
If the review is to be as far reaching as the right hon. Gentleman has said, does he accept that it could affect the profitability or otherwise of pits, including the 10 pits that the right hon. Gentleman has on his list for closure, one of which, Taff Merthyr, was said to have made a £5 million profit? Will he also give an assurance that there is absolutely no substance in the report in today's Guardian which suggested that seven more pits, including Tower in Wales, could be on the hit list?
I will come to an important part of that, but let me give a categorial assurance that I have instructed British Coal that there is to be no change in the number of pits on the closure list. It is 10 and there will be no change in that position. I hope that there will be no room for doubt about that position. I hope that that reassures the hon. Gentleman.
Why did the right hon. Gentleman's list contain no reference to the obligation on the electricity industry to buy nuclear power at whatever price it is offered? Will that feature in the review, as it was mentioned in the Coal Board's statement as one of the reasons why its market has declined?
Let me also say that I have instructed British Coal that development work should continue at the 21 pits covered by the moratorium for the period of the review so that there can be no question of the outcome of that review being prejudiced. I have set out as clearly as I can the comprehensive nature of the review I am to undertake. It would be wrong if I did not set the review in the context of the problems that exist.
The coal industry can sell only what the customers will buy. British Coal has said that the demand for its product from National Power and PowerGen will fall from 65 million tonnes this year to a maximum of 40 million tonnes next year, and only 30 million tonnes thereafter. It is inescapable that we have to take account of the millions of tonnes which are being produced over and above what the market will take.
I noticed that the hon. Member for Livingston, when talking about the record of the Labour party, seemed to think that it was perfectly all right for the Labour Government to reduce the number of pits and to reduce the number of miners when householders stopped buying coal, but when those who produce electricity for British industry stop buying coal, somehow or another a different set of criteria has to apply. All that one can conclude from that is that, when there were votes at stake, the Labour party was prepared to back the voter without regard to the interests of the manufacturing economy.
I make the very fair point to the right hon. Gentleman that nobody rigged the household market for coal in the way in which he and his Government have rigged the power station market for coal. I put it to him that he has invested so much in his judgment that the economic case for the closure of 31 collieries is, in his own words, absolutely unanswerable that nobody can realistically believe that he has what the Prime Minister calls an open mind about the future of collieries that he has already sentenced to death. Is he aware that in the House and elsewhere we know that he is now not working for the future; he is playing for time?
It was never an open mind for which the right hon. Member for Islwyn (Mr. Kinnock) was famed, from what I remember, but the fact of the matter is that it reveals as clearly as anything that I can remember how little experience the right hon. Gentleman had in government. He talks about the choice and rigging the market. There was no market under a nationalised programme under a Labour Government. People turned up for beer and sandwiches, to be told what the allocation was going to be year by year, regardless of the cost to the consumer or the damage to the industrial base. It is because the Opposition hanker to go back to that that they cannot understand the language in which we are talking.
And nothing more clearly revealed the hypocrisy behind the views of the Labour party than the behaviour of Leeds city council—[Interruption.] Yes, which actually cancelled its contract with British Coal in order to import coal. So can I understand from the right hon. Gentleman why it is right for a Labour-controlled city council to buy coal in a competitive market when it is wrong for the generators—[Interruption.]
The hon. Gentleman has been in the House for quite a few years. He knows that that is not a point of order for me and he knows the avenues to go down.
Order. This is one of the most important debates to take place in the House for many years. There are many thousands of people outside watching the debate, so let us conduct ourselves in an orderly way and hear what the Secretary of State has to say.
The President of the Board of Trade has indicated to an hon. Member from Leeds that he wishes him to refer to a piece of paper that he wishes to be held up in front of the television cameras, and he has agreed. As I sit down he will give way to his hon. Friend and former campaign manager from Leeds. [Interruption.]
My colleague from Leeds, the hon. Member for Leeds, West (Mr. Battle), made a statement about the situation in Leeds. I am intervening only because he raised a point of order to point out that the leader of Leeds city council—I am pointing it out to my right hon. Friend—Councillor Trickett, in the Yorkshire Evening Post, has apologised to the mining community of Yorkshire for the fact that the Leeds city council took a contract for Colombian coal because it was £600,000 cheaper than the equivalent contract for British coal. [Interruption.]
I thought that the Labour party wanted a full and open inquiry into these matters. I thought that it wanted to reveal all the things that were going on, not just the things that suit the Labour party. [Interruption.]
I thought that it was relevant to our debate today to read in the Yorkshire Evening Post:
Leeds snubs Yorkshire pitmen to buy cheap coal mined by slave children in Colombia.
On a point of order, Mr. Deputy Speaker. The President of the Board of Trade has invited my hon. Friend the Member for Leeds, West (Mr. Battle) to telephone Leeds city council. In order that the telephone exchange may be meaningful, will the President of the Board of Trade tell the House that his Government propose to release local authorities from the obligations that the Government imposed upon them? Those obligations mean that the local authorities do not know the source of the tender that they have received and leave them no freedom to take any alternative bids.
In the light of the right hon. Gentleman's invitation to my hon. Friend to blame Leeds council, will he now free that council and every other local authority to make the decisions that they want to make in the national interest rather than commercial interests?
There you have it, Mr. Deputy Speaker. That is exactly what the Labour-controlled councils want—freedom to build their empires, regardless of the cost. [Interruption.]
It is obvious to me and to the House that we need to consider these matters in a measured way, with the facts before us. It is obvious that the Labour party has no interest whatever in listening to the case that I intend to make, so I shall rely on my right hon. and hon. Friends—
On a point of order, Mr. Deputy Speaker. I appeal to you to ensure that my right hon. Friend the Secretary of State is heard. As a member of the Government who wished to ensure that the coal mines were not closed, I want to hear why the Government believe that I should vote for them. Opposition Members have ensured that my right hon. Friend has my support tonight.
On a point of order, Mr. Deputy Speaker. Will you help me with a constitutional point of order? I thought that it was a matter of constitutional principle in the House that, if a policy was announced and that policy collapsed, the Minister who was personally associated with that policy made a further statement.
Will my right hon. Friend the Secretary of State give me an assurance before he sits down that if, during his inquiry and review, it becomes apparent that the rules, disciplines and regulations attached to the legislation on the electricity privatisation are flawed—as several of us believe that they are—and prejudice the position of coal, he will introduce amendments to that legislation?
I say to my hon. Friend without reservation that there would be no point in the review if I were not prepared to consider such options. I have given the clearest possible undertaking to the House that the review will be genuine. I will listen to the representations. I will present the Government's views. The House will have an opportunity to debate the matter.
It is apparent that the Labour party is not prepared to indulge in a proper examination this afternoon. It is more intent on shouting down my argument. Labour Members are letting down the miners they have come here to represent. [Interruption.] Therefore, I will rely on my right hon. and hon. Friends to give me the three months that I require to set the matter in proper order. I hope that they will support me and the Government's amendment in the Lobby tonight.
I hope that the House can now debate the substance of the big hole in the Government's energy policy rather than the ritual exchanges that we have just witnessed. [Interruption.]
The Secretary of State has had, by his own admission, an extraordinary few days. He should revise and review the speech that he made to the Conservative party conference. It seems to be U-turns before breakfast, lunch and dinner. It is interesting to note that he is now talking about a review, although there were huge omissions from what he had to say about great areas of energy policy.
I suggest to Conservative Members who have expressed their concern and opposition to the Government's performance over the past few days that any of those who believed that the problem was merely a measure of presentation should now accept that that is an unacceptable excuse for supporting the Government. The presentation was totally unacceptable. It was utterly brutal and ill thought out. It was also based on a fundamental mismanagement of energy policy that goes back many years. It is difficult to see how a Government who have persisted in mismanaging energy policy for so long are likely to come back to the House in three months with a substantially different or altered energy policy.
On several occasions in the past few days the Secretary of State talked about the market for coal as if it were an absolutely fixed, defined law outside his or anybody's control that had been submitted effectively to the market place by an invisible hand. I suggest that that shows an intellectual vacuum in the Government's thinking. To suggest that there is no alternative to his definition of the market is the last refuge of the scoundrel. Everyone knows that markets and business decisions have to be based on judgments about future developments and a number of different factors. It is a matter of opinion how the market for energy will develop. It is not a matter of simple fact, as the Secretary of State has tried to pretend in the face of overwhelming and growing national opposition.
People can be wrong, and—sad to say for Britain—the Government have been too often and too consistently wrong on energy policy. It is sad that the Secretary of State apparently has not yet recognised the strength of feeling and views outside the House among ordinary men and women who believe that the Government are fundamentally wrong in their policy.
The Secretary of State has shown little understanding of why people have been so angry during the past few days. I should have thought that many of his hon. Friends would have told him about the phone calls and letters that they have received from his supporters—Conservative party members who are utterly confused as to how the Government have got into this mess. They cannot understand how we can conquer unemployment, avert bankruptcies or pay our way in the world if we tear the heart out of the industrial base of our economy, and yet that is what the Government appear to be intent on doing.
The Secretary of State's last few remarks suggest that—at least for the benefit of tonight's vote—he has broadened his outlook. The review cannot simply consider the case for closing 31 pits. It must be a review of the roles of gas and nuclear power. I suggest to the right hon. Gentleman that he would have had more credibility if he had been prepared to put a moratorium on the development of gas-fired power stations until the outcome of the coal review had been completed. As those developments continue they will limit options for coal, which puts into question the Government's sincerity in producing alternative opinions.
The former Chairman of the Select Committee on Energy said pertinently that if the review is to be genuine and total, it should be a review of 31 pits and not of 10 and 21. The Secretary of State failed to answer that criticism with any credibility or authority.
If the Secretary of State had given way to me earlier I would have raised this matter. The moratorium should include opencast coal, because the relationship between opencast and deep-mined coal is close. The Secretary of State is diverted for the moment—[HON. MEMBERS: "Permanently diverted."] Yes, but perhaps he could listen to this argument. There will be outrage in areas which are threatened with opencast coal mining while deep coal mines are being closed down.
The Secretary of State's diversion is disappointing. If it is a reflection of his open mind, it is not being demonstrated with any conviction to the House—he does not even have open ears, let alone an open mind. If this is the way we are to carry on, his discourtesy does not give us any confidence that in three months time things will be any different from the way matters stood last weekend.
Coal does not face a squeeze on the market because of inevitable forces within it, but because it has been put at the end of the queue in the Government's privatisation programme, after gas and electricity. That is the reality. The hon. Member for Macclesfield (Mr. Winterton) intervened in the Secretary of State's speech to seek assurances that the Government recognise that they have mismanaged the privatisation of electricity. Lord Parkinson was determined that electricity should not be privatised as a monopoly and so he cleverly devised a duopoly, which works in much the same way, with much the same consequences. He could not privatise nuclear power. Those Members who served on the Committee told him, hon. Members told him on Second Reading, and on Third Reading, that that would not be possible. He assured us that he knew what he was talking about and that we did not. Fortuitously for him he resigned and left his colleague Lord Wakeham to sweep up the mess and to make the embarrassing statement to the House.
The net result is that a moratorium that does not tackle the failure of the market for electricity does nothing other than prolong the agony and postpone inevitable closures, and is not likely to lead to a serious review of the case for coal. I hope that Conservative Members who expressed such strong reservations understand what they may be taken in by, and that they will not be taken in.
Can the Secretary of State tell us why it is apparently sensible to mothball coal-fired power stations, which have half their useful lives left, and yet continue to squeeze extra life out of nuclear power stations, which have long passed their original lifetimes? What is the proper justification for that, and will it be tackled in the review?
Secondly, why are coal-fired power stations which are of no interest to existing generators not offered to others who might be willing to take them over?
It is for the hon. Gentleman to raise those matters with me. Even if I did not want to raise them—which I shall—I would have to respond to him. He has not fully understood the comprehensive nature of what I have told the House. It is within his discretion to make representations to me or to encourage others to do so, and I will have to answer them.
Of course, the right hon. Gentleman will say that and he will get his submissions. The question is how well is he prepared to listen and whether he will be prepared to accept a finding from outside his Department. He has said that he is conducting his own inquiry independently. One wonders to what extent he will judge his findings, as opposed to those of a more independent body such as the Select Committee.
The hon. Gentleman mentioned the alternative possibilities for certain pits. Is he aware that it is possible that the private sector will be interested in the Betws deep drift mine in the Amman Valley in west Wales, yet it is among the 10 down for closure? Does that not demonstrate that that is a crazy way to deal with the issue, if we are to keep all the options open?
I shall come to that, although I think that the hon. Gentleman has argued the case well enough. British Coal's priorities might not always accord with the priorities of others who can do something with a mine and make it profitable where British Coal has failed.
I apologise to the hon. Gentleman but I have given way several times and I wish to make room for other Members to speak.
Another question which must be considered is why there is a dash for gas. I was disappointed to hear that during the past 48 hours both the Secretary of State and the Prime Minister have almost implied that if there is such a dash it must be because someone thinks that it is profitable; it must be because the market is right and therefore it must not be reassessed. All the experts recognise that the reasons for the dash for gas are nothing like as simple as that. They are complex, but the main reason is the monopolistic position of the two generators, and the desire of local electricity companies to give themselves more bargaining power with them. Because the regulator cannot prevent them from passing the cost of their mistakes on to the consumer, they will buy more expensive gas to achieve diversity and simply pass on the costs.
If a model along the lines of the American regulator had been copied, that could not have happened. No American regulator would have allowed it to happen. That should be considered in the legislation for electricity.
Consumers are being asked to pay to produce a more effective market because the Government's legislation failed to produce it. In those circumstances I do not understand why we should create 60 per cent. of excess capacity that the country does not need, at an extra cost to the consumer. It seems as if one sector's perceived short-term profit is being bought at the expense of the nation's long-term profit. That cannot be in the national interest and I urge the Government to include that in their review.
I shall suggest some avenues that the Government should pursue while the review is taking place. First, can they extend the moratorium to all 31 pits, because that is the only basis which could give credibility to the Government's sincerity when they say that it is a genuine review rather than a delayed stay of execution? I am glad that the Secretary of State acknowledged that development work will continue. Can I seek clarification on whether such work will continue at all 31 pits or only at 21? Secondly, miners are worried about how their redundancy payments will be calculated. I have been advised on the matter, and my right hon. Friend the Member for Yeovil (Mr. Ashdown), who went down Rufford pit this morning, said that specific questions were asked of him. The miners wanted to know whether the redundancy payments would be based on the last 90 days worked, the 90 days worked up to this weekend's announcement or on an average of, for example, £300 a week? That is clearly an important point.
I am grateful to the hon. Gentleman for letting me intervene yet again. I wanted to cover that point in my speech but eventually decided that it was impossible to make progress. I have looked carefully at the matter and instructed British Coal that no miner must be disadvantaged by the announcements that have been made in the past few days—no miner.
It would still give greater credibility to the scale of the review if the moratorium were to extend to gas developments. There should be a requirement that the coal stations that are being taken off the market before they are fully exhausted should be offered to others. That would seriously alter the balance within the market. There should be a review of the oldest Magnox stations, as that factor will clearly affect the demand for coal.
It should be recognised that the regulator should have more power and should be required to act more speedily. Professor Littlechild's invisibility during the past few months has worried many of us. His published findings will be utterly irrelevant if they are not produced sooner rather than later. I hope that he listens to our debate and takes appropriate action. That would create more confidence in him than many of us have at present.
We are greatly concerned that any review should be genuinely independent. There should be something more than a review by the Select Committee on Trade and Industry. It should be recognised that we want an assessment of the entire energy strategy, not just the future of 31 coal mines. If the Government are not prepared to consider the electricity market, they should refer the matter to the Monopolies and Mergers Commission to explore and, if necessary, introduce additional legislation to correct the position.
I think that honest Members of the Government and Conservative Members will acknowledge that the privatisation of electricity is not yet a resounding success. It would give the Government more credibility were they to produce further legislation rather than pretend that something that is not working is satisfactory. Nobody believes that pretence—not even the Secretary of State. He was not responsible for the legislation—I am not sure whether he has read it. In those circumstances he would have no problem in tabling suitable amendments.
It is sad to see how depleted the Tory Benches are now; it suggests that too many of those who had shown a recognition of the seriousness of the position are now prepared to go along with the Government. If any hon. Members who are still uncertain—if there are any—decide to back the Government tonight, I believe that they will live to regret it, as will their supporters. They will realise that the Government are only delaying the agony, not tackling past mistakes. Were the Government to be defeated today it would force a much more fundamental reappraisal of their energy policy than they have yet laid before us.
The Government's survival tonight would mean that the muddle would be likely to continue, with the probable consequence of dearer electricity. It would inevitably result in closed pits, while the balance of payments would move further into the red. All the economic factors about which people are concerned would deteriorate. Even the long-term security of electricity supply would not be guaranteed.
A defeat for the Government tonight would be welcomed, even by most Tory voters. It might even do the Tory party good to be forced to reassess the fundamental mistakes that it has made. It would certainly do the country good.
One of the most remarkable features of the Government's announcement on the prospective coal pit closures has been the deep concern and the essential rationality of the questions raised in constituents' letters. They have searched for facts and tried to come to grips with the reality of the position. That has happened to such an extent that even Arthur Scargill and his heavies have decided to lie low and try to encourage a rational debate.
Against that background, it is all the more regrettable that my right hon. Friend the Secretary of State should have been subjected this afternoon to a frenzy of baying and points of order that were not remotely constitutional when trying to put forward a rational and constructive case for examining the facts calmly and factually. He was subjected to choruses of barracking, interruptions and shouts such as to belie entirely the claim that the Opposition seek a review, although that word appears on the Order Paper.
If the performance that we have witnessed from the Opposition constitutes a review, what on earth would happen if the Labour party decided to move from a review to a campaign to prevent such pit closures? My right hon. Friend would have to come to the House covered by one of the tanks that are made so successfully in Leeds. It betrays the claim of those who say that they are concerned that they have exposed my right hon. Friend to such treatment this afternoon. But it further enhances the essentially constructive and rational way in which my right hon. Friend seeks to progress.
I want him to agree with me on the prospects for a bright future for British Coal, particularly for those pits that I am proud to represent in Selby. There are seven mines, including Kellingley and Gascoigne Wood, which make up the Selby group or complex. As my right hon. Friend reminded the House last Monday, £1.3 billion worth of investment has been sunk into the Selby complex, largely by him and his predecessors in this Government. As a result, we now have a complex with 4,000 employees set to produce 12 million tonnes a year, which works out at about 3 million tonnes a year per thousand men employed in mining.
To put that in perspective, 1,000 men at Grimethorpe, one of the older pits, one of my neighbours in Yorkshire and one of the 10 set to close in my right hon. Friend's initial list, produce less than one third of the quantity produced by 1,000 men in Selby.
I must finish my argument, but then I shall certainly give way to the hon. Member for Hemsworth (Mr. Enright), my neighbour in south Yorkshire.
The implications of the Selby productivity level was vividly brought out in the fifth report of the Select Committee on Energy, which showed that, compared to the recent United Kingdom national average of 5 tonnes per man shift, Selby mines regularly score 30 tonnes per man shift—six times the level of national average productivity.
British Coal has acknowledged the stupendous strides and improvements made by Grimethorpe. I deeply resent the slur cast on the miners who work there, live in my constituency and are all to be thrown out of work at Havercroft, Ryhill and Hiendley, thus leaving a desert.
I ask the right hon. Member for Selby (Mr. Alison) to join me in appealing to the President of the Board of Trade to reiterate an important part of his speech. I was informed this morning that all development had already ceased in Frickley and the other 21 pits. Therefore, I was pleased to hear what the President of the Board of Trade had to say and I would be delighted to have the backing of the right hon. Member for Selby in appealing to the President to repeat—
I cannot resist the opportunity offered me so succinctly by both sides of the House. I can reassure my hon. Friend and the hon. Member for Hemsworth (Mr. Enright). I discussed this matter with the chairman of British Coal yesterday. For the avoidance of doubt, I made it absolutely clear to him that he would ensure whatever level of development was necessary so as not to prejudice the outcome of the review of the 21 pits.
The hon. Member for Hemsworth alleged that I had cast a slur on Grimethorpe: I repudiate that notion. When I say that output per thousand men in Grimethorpe is about one third of that which we score in Selby, I merely draw the attention of the House to the fact that investment went into Selby in the 1970s and 1980s, whereas Grimethorpe is nearly 100 years old. These are the essential differences that demonstrate the structure of the modern coal industry.
Two reasonable points follow from the productivity achievements of the Selby pits. First, British Coal is producing coal at about £40 a tonne. If that can be secured with a productivity average of £5 per tonne per man shift, how much more competitive could British Coal be if output were concentrated in pits such as those in Selby, at six times that level of productivity?
With the landed cost of foreign coal at about £32 a tonne, a high-productivity British coal industry could beat all comers, foreign coal included.
Does the right hon. Gentleman accept that, if coal continues to operate in an unfair market, then, no matter what the productivity at Selby or any colliery, if coal has no access to the base load of electricity generation, even those pits will be impaled?
I do not believe that the figures that I have quoted sustain the hon. Gentleman's point. It was said earlier that Grimethorpe's production, at £32 a tonne, could beat imports; how much better could British Coal perform with output concentrated in pits such as Selby, where productivity is infinitely better than that secured at Grimethorpe? It could beat all foreign imports easily.
This point is further elaborated by one of the most interesting observations in the fifth report by the Energy Select Committee, paragraph 104:
Even a 20 per cent. change in the exchange rate changes the effective price of British coal relative to imported coal by £12 to £14 per tonne".
Given high-productivity Selby coal, and given the floating exchange rate, with the pound tending to drift down, the capacity to beat imports and to erect a solid long-term platform for British Coal—providing it from modern, highly productive pits—is almost limitless.
We seem to be a little mesmerised by the 40 million tonne figure quoted as the likely residual coal burn in our power generators, even though my right hon. Friend has confirmed that coal will continue to provide by far the greatest fuel input to power generation. We should not forget that British Coal is selling more than 13 million tonnes to other customers, including 1 million tonnes in exports. If we concentrate capital investment in modern pits—my right hon. Friend's strategy—there is a magnificent prospect for British Coal now, and there is even a prospect of expanding the output and sales of British coal.
My right hon. Friend's dual strategy of contracting old inefficient pits combined with a reasonable programme of mitigation of the effects of that for those who will lose their jobs, together with continuing his constructive work of the past and pouring in huge sums of capital investment to the pits of the future, is surely the way ahead. We ask my right hon. Friend to consider the pits with a future and not to allow himself to be mesmerised by pits dating from the 19th century, many of which are approaching the end of their natural lives.
We must look forwards, not back. There is a bright future for British Coal under my right hon. Friend's dual strategy if it is pursued rationally, constructively and deliberately—and that is what he promises to pursue.
I understand why the Ministers on the Front Bench nod in agreement when the right hon. Member for Selby (Mr. Alison) tells them not to be mesmerised by what is happening. I do not know what would have happened to the people who took these decisions if they had been in my constituency last Tuesday night—and now we are told that those decisions are up for review.
The President of the Board of Trade said that this action was to do with costs to electricity consumers. Perhaps he or the Minister for Energy will tell us why, given that, since the privatisation of electricity, the cost of British coal has fallen in each of three succeeding years—those costs constitute 70 per cent. of the costs of the generators—and the price of domestic electricity has risen by about 30 per cent. in the same time. The nation wants answers to these questions.
This House today was as silent as a graveyard compared to the reaction to the announcement last Tuesday in the mining communities that I represent. It was a Conservative who brought up the trivial issue of a Labour council buying foreign coal. Last week, 30,000 families were shattered by the announcement by the Department of Trade and Industry, and it is shameful that a Minister should attempt to trivialise the argument in such a way.
The right hon. Gentleman told his hon. Friend the Member for Stafford (Mr. Cash) that there is now some doubt about whether Trentham, which we were told yesterday is to close, will actually close. Miners in the constituency of my hon. Friend the Member for Ashfield (Mr. Hoon), working at one of the 10 pits, were refused access to their work underground there this week. So the President should stand up and tell us what is in the review and what is not. The Government amendment states that 21 pits will be included—not 21 plus Trentham. He owes it to the miners and their families in these 10 collieries to specify what will come under the review.
I do not want to leave the hon. Gentleman in any doubt. I had hoped that I had explained the position with total clarity, but I shall repeat it. The 10 pits moving to the closure procedure are subject to statutory procedures within which all these issues can be explored. I have given the clearest undertaking that, if a case emerges differently from how the Coal Board has put it to me, the board is responsible, during the statutory consultations, for preserving the option that the pits can be given a new lease of life. That is therefore part of the review procedure with which Labour Members will be familiar.
The review procedure for the other 21 pits I have already outlined to the House. I shall conduct it, and the Select Committee will also conduct a review. So there will be two types of review, depending on the two categories of pits. I hope that that removes uncertainty on the matter.
The right hon. Gentleman's intervention clarifies little. How can anybody say that any of the 10 pits are worth keeping open when the work force at some of the pits were sent home when the men tried to prove that the pits should remain?
On Monday, the President said that there was no market for coal because the generators, not just PowerGen and National Power but the so-called independents, had chosen to burn gas. He said that that was because gas will produce cheaper electricity, but no one agrees with him. PowerGen and National Power have admitted that, over the next few years, it will be more expensive to burn gas than to burn coal. British Gas has expressed concern about the extensive use of gas in power stations, and earlier this year the report from the Select Committee on Energy was scathing about this dash for gas.
In a statement to the press in March, the President's predecessor, Lord Wakeham, said that he was considering reining back the use of gas. He should have been considering that, because he gave permission for the construction of gas plants, whether they were needed or more expensive or would decimate the coal industry. It was only in the face of evidence from almost every section of the energy industry that he admitted that something had to be done, not by the market but by the Government. That was the Government who rigged the market in favour of nuclear power and who not only allowed but encouraged the abandonment of coal in favour of gas. Why are we now being asked to believe that the Conservative Government will be able to conduct their energy policy properly when we never had a level playing field in the past? Is it because the present policy is the same as the one that applied before the election?
I have some minutes that have never appeared of a meeting last December between Lord Wakeham's office, when the noble Lord was Secretary of State for Energy, and British Coal. His policy was described as being to reduce the United Kingdom's coal industry to less than what could be economically sustained by the market by allowing a second tranche of gas stations operating on a guaranteed base load and with long-term contracts. That is evidence of meetings between the British Coal Corporation and senior civil servants and Ministers at which they were warned about what would happen to the coal industry if that second tranche went ahead.
The Government even got round the EC directive against the use of gas in power stations, because they were giving permission for gas-fired stations to be built before the directive was abandoned. They ignored the warning that 22 million consumers would face higher electricity bills because of the sweetener deals agreed between regional electricity companies and independent gas generators. They even dismissed the threat to our balance of trade when Britain loses energy self-sufficiency and has to rely on imported gas and coal.
The President of the Board of Trade told the House on Monday that imports were a matter for generators. He said:
It is not a matter for me."—[Official Report, 19 October 1992; Vol. 212, c. 228.]
It seems that his office and his position have little to do with trade and industry. If the right hon. Gentleman is not responsible for the trade of this nation, who is? His much-heralded interventionist speech took him about a week to abandon. Now that his rhetoric has been exposed to the whole nation as empty, he tries to buy off his critics by:
giving time for a wide understanding and a slower pace in certain circumstances."—[Official Report, 19 October 1992; Vol. 212, c. 229.]
I am not convinced that an opportunity to look seriously at the long-term needs of this country through a moratorium on 21 of the threatened pits has to do with our long-term energy needs. It has more to do with trying to get the President off the hook that he has been on since Tuesday of last week. He said on Monday:
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,… "—[Official Report, 19 October 1992; Vol. 212, c. 220.]
The right hon. Gentleman might as well not bother having any review if he chooses to use words such as that, which threaten 30,000 miners and their families.
After reciting a long list, the right hon. Gentleman said that he would appoint a company called Boyds, a mining consultancy. Last year, that company was involved in looking into the privatisation of the British coal industry. Its report has been kept secret, but the infamous Rothschilds report which appeared last year and the announcement on Tuesday of last week are directly related. We can look forward to eight coal mines by the end of this decade—fewer than the number announced.
The country needs clear and unequivocal answers to the questions posed over the past eight days. Most important, the 2,000 coal miners who work at Maltby and Kiveton Park collieries in my constituency need to know whether the review will be a face-saving exercise for the Government or whether it will determine the nation's needs for years to come.
Last week's decision should not be seen in isolation from the closures over seven years of almost 150 coal mines and the loss of more than 140,000 jobs. In the past two years, my constituency has seen three of its remaining five pits closed. As a consequence, unemployment has increased by 52 per cent. In addition to the closure of the three mines, a coke works has closed and there have already been job losses at Kiveton colliery, the closure of which was announced at the end of March. Supply industries have also suffered and there has been a knock-on effect whose impact is already being felt by local shops and services.
The travel-to-work area covering Maltby has 16.5 per cent. total unemployment. Male unemployment is 23 per cent. Among those aged 25 to 30, mining in south Yorkshire provides one in four jobs. At a stroke last week, 2,000 people in that age group in the Rotherham borough were threatened with the sack. Last month, 68 vacancies were advertised in Maltby and Dinnington job centres—a ratio of one vacancy for every 66 people registered as unemployed. Those areas already have assisted area status, the trumpet blown last week by the DTI when it made the announcement. The Government's amendment mentions the introduction of special assistance measures. They would need to take that back to the drawing board.
Last week, the Government said that they would speak to English Estates, which has a good record in providing factory space throughout Britain, but, in the past 12 months in the Rotherham borough, 30 per cent. of factory floor space has become vacant because of the current recession and the pit closures. No simple answer will be provided by people running into those factory spaces in the Rotherham borough where jobs are threatened. There are too many empty factories as it is.
Last week, we were also told about clearing pit sites and making them available for sale or development. The Rother Valley already has 655 acres of derelict land as a direct result of pit closures. The closure of Kiveton will increase that to over 760 acres.
Last week the DTI mentioned RECHAR. I do not know how many times we have heard about that in the House. We were told that RECHAR was the answer to the problems that would be caused by the job losses. The scheme was approved in principle in 1989, and eight months ago the Government announced that agreements had been reached with the European Commission to enable money to be spent in coalfield areas. When the President of the Board of Trade came to the House on Monday, only the expenditure of £782,000 of the £23 million allocated by Brussels for south Yorkshire had been agreed. Absolutely nothing is currently being done about using that to sort out our problems.
We have already seen the Government's commitment to the regeneration of coalfield communities in action. In my constituency and many neighbouring constituencies, that commitment is pathetically poor. The communities of Rother Valley reacted last week with shock and disbelief to the news that the Government were prepared to compound the already desperate problems that those people face.
Kiveton colliery was widely regarded as having only a short life, despite the fact that the low seams in the colliery are worked with great difficulty but great skill by the miners and that it has made good profits in earlier years. Yet in spite of the expectation that at some stage in the not-too-distant future the colliery was likely to close, no steps were taken to encourage inward investment in the area. Nothing has been done to alleviate the effect of the closure on a community with high and rising unemployment.
The other colliery in my constituency that will be affected by recent announcements—Maltby—is the one in which I worked before I left in 1983 to come to the House. Members of my family live in the area. It was announced last week that Maltby would be one of four collieries to be mothballed. It is just completing a £183 million investment programme, and, as the right hon. Member for Selby said, the future of British coalmining lies in a high investment of capital in mining areas. An investment programme of £ 183 million has opened up some of the richest coal seams in Britain. They equal anything that has been found elsewhere, including the Selby coalfield. Everybody at Maltby, from the manager to the newest recruit, was told last Tuesday that he would be sacked before the end of March 1993. Nobody at the colliery or in the community could believe that such a senseless decision had been taken.
Maltby has been a showpiece coalmine. It has been heralded as an example of the future of British mining. The national press reported last week that its work force had won the Business in the Community award for voluntary effort.
I am sure that everyone in the Chamber is aware that many right hon. and hon. Members wish to contribute to the debate. There is no limit on the length of speeches except between 6 pm and 8 pm. In the meantime, I hope that right hon. and hon. Members will bear in mind the fact that there are many who wish to speak.
For health reasons, this is the first time that I have spoken in the Chamber since being re-elected in April. It is my intention, however, not to let last Tuesday's announcement—it will have a devastating effect on my constituency—pass without comment. At the same time, I should like soon to resume my place and let others participate in the debate.
As I was saying, Maltby colliery has been a shining example of what the future of British Coal should be. Those involved have worked throughout the community. I have received letters from business men whose companies are not directly affected by the announcement. I have received a letter from a local head teacher who is concerned about the future of the children in his school, who are themselves fearful of the poverty and homelessness that is a direct result of unemployment. The chairman of the area health authority has written to highlight both the physical and psychological damage to miners and their families that will be caused by pit closures and consequent unemployment.
The opposition to the closure announcement has been unanimous. I have never known such breadth of opposition and depth of anger. Rother Valley Conservatives from Dinnington and district have sent me a copy of the letter that they wrote to the Prime Minister last week. Part of it states:
In view of the fact that during the last few years the nearby Maltby colliery has had a multi-million pound modernisation packet and now finds itself being 'mothballed', we are finding difficulty in arguing against the accusation that this money has been spent only with a view to privatisation.
Their meeting was unanimous in its "feeling of disgust" at what was described as the decimation of coalmines.
Political parties, Churches, schools and other representatives of the local community are joining this Saturday in Maltby to express their anger at the Government's actions towards their local pit and to every pit that is under threat. This is not a narrow, party-point-scoring exercise but the expression of entire communities throughout the country. They are saying to the Government that they, the Government, are on a course that is unacceptable to the British people.
The President of the Board of Trade keeps telling us that he has made it clear that National Power and PowerGen should consider the impact on communities of their decisions. On 9 April, those who voted Conservative did so because they thought that they were voting for a Government who would accept responsibility for the social fabric of the nation, including mining communities. They were wrong. The Government have made it clear that they do not accept the obligation placed on them by the democratic process back in April. In reality, they think that decisions should be made for commercial and business reasons and not for the government of the country. The Government have no justification for using the argument that they have produced against 30,000 miners and tens of thousands of others who will be affected by the announcements of last week. It is time that the Government considered whether they are fit to govern the nation when the people have said that they believe that they are not.
There is no doubt that the announcements of last week—enormous numbers of threatened pit closures and redundancies—came as an appalling shock to many. As my right hon. Friend the Secretary of State fairly recognised this afternoon, the suddenness of the decision indicated that the handling of the matter had been too speedy and too rushed. I think that that must be recognised. That is the starting point for the return to the more balanced approach that, as my right hon. Friend the Member for Selby (Mr. Alison) said, has always been the aim of successive Governments in dealing with the transformation and modernisation of the coal industry.
It must be recognised, however—I believe that right hon. and hon. Members with longer memories than others will accept this—that under successive Labour and Conservative Governments since the second world war it has been the policy to create, by modernisation, a smaller but highly efficient coal industry. That process has been inevitable. That has been the aim of successive Governments, and there have been many difficulties along the way. I shall outline shortly how these difficulties seem to arise and cause such agony.
It is not true—this is what the hon. Member for Livingston (Mr. Cook) seemed to suggest—that there lies ahead the wipe-out of the coal industry for power generation in the United Kingdom, the rest of Europe or the world. Coal, particularly that which is internationally traded and including highly competitive British coal from many superb pits, will continue to play a major part for decades ahead in electricity generation. It is our job to ensure that the conditions that allow that to happen are maintained and developed.
My right hon. Friend the Secretary of State is right to go for a review. He would be even more right—I hope that he is saying this—to set in place policies and programmes to ensure that every redundancy is handled sensitively with the utmost care. The entire policy of shaking up appallingly the lives of many thousands of dedicated workers, many of whom are employed in awful underground conditions, must be handled in a way that is worthy of the tradition of the Conservative party as well as that of the Labour party. There must be humane social policies when we are all faced with appalling levels of change.
Why did everything arise so suddenly? Everyone was caught by surprise. I want to focus on the relevant institution, which has not had much of an airing so far in the debate. I refer not to the Department of Industry or British Coal but to the Treasury. I suspect that if we trace the powder trail from where the explosion took place last week, we find that it began in the Treasury. I do not have inside knowledge of how these matters suddenly came to the fore last week but I have a personal and painful experience of the same thing happening on a smaller scale about a decade ago when I was Secretary of State for Energy. I shall share with the House what happened then. It will see for itself, I suspect, that something similar happened in the recent past.
Matters begin with the Treasury getting into a public expenditure cutting mood, which heaven knows it is in now. When that happens it begins to say, "This sort of subsidisation, especially with growing stocks of coal that are not being sold, cannot continue." Pressure is put on the Secretary of State to cut cash limits and investment limits. The Secretary of State then goes to British Coal—previously it was the National Coal Board—and says, "This is your funding position. You had better start drawing up plans that will realistically fit the proposed funding." The industry produces plans and returns to the Secretary of State, who examines them. At that stage, the plans always leak. That is not the result of Government malignancy but because British Coal, which is a huge organisation—previously it was the National Coal Board at Hobart house—find it impossible to keep them secure.
At that point the whole thing turns into uproar and the Minister is left with a fizzing hand grenade in his hand. The question is whether he can run fast enough to his Cabinet colleagues before the damn thing blows up. In my case I ran very fast, but not fast enough and the thing blew up and quite hurt my hand, but I have recovered now. That is what occurs when such issues come to the fore and plans are leaked in advance before Ministers have time to complete their plans. My right hon. Friend has made it clear that what was in the pipeline was a major, sensitive and elaborate programme to handle such a gigantic transformation.
I draw two lessons from the experience that I have recounted and from the uproar of last week. First, we must prepare years ahead when it comes to the transformation of this huge industry. We must involve every Department in the social programmes and the community revitalisations. My right hon. Friend is now seeking to do that with the help of Lord Walker and others. Every village and community must be visited; every family problem must be understood.
The transformation must be undertaken on a careful, prolonged basis. That is what they did in Belgium when its huge coal mining industry was reduced to zero. That is what happened in Japan where the work force were reduced from 348,000 to 5,000, working in only five mines. To some extent, a similar programme was undertaken in France and that is what we must do. I am glad that we are hearing about those transformation plans now. I think that I can guess why we did not hear about them so clearly when the whole thing blew up a week ago.
My second conclusion, which will not be welcome to my right hon. Friends, is that the Treasury will screw up anything given the chance. In this instance it is important to examine the relationship between the handling of the coal modernisation programme, the inevitable redundancies that will occur, the deflation that we and the rest of the world are experiencing and the current state of public expenditure policy. Those things are linked and it is not entirely right just to concentrate on the narrow issue of energy policy. We must consider it in the wider context of the Government's economic policy. I understand, greatly to my delight, that that policy is now beginning to undergo an adaptation as we face the fact of worldwide deflation and recession and the prospects of rapid recovery retreating into the future.
The pressures for economies in the coal industry, which I am sure are necessary, are undoubtedly part of the programme designed to contain the growth in public expenditure. Those economies are the first taste of many similar economies in all sorts of programmes. Last night the Prime Minister said that there are many other unpopular decisions to come regarding public expenditure.
When my right hon. and hon. Friends call in general terms for cuts in public spending, that sounds terrific, but we must recognise that when cuts are made to particular programmes it becomes a sensitive and difficult issue. It is no use just running from those decisions when we are faced with something that we do not like. There is also the great danger that the public expenditure drive can become too rigid and lead to the kind of explosions and over-sudden decisions that we have seen in relation to the pit closures and the coal modernisation programme.
My right hon. Friends believe that, next year, public expenditure should be subject to a rigid, control total which cannot be broken and into which everything must fit. It is thought that if one cannot stop expenditure on unemployment benefit from going up, something else must be cut. That concept has great relevance to the coal modernisation programme and should he treated with great care. We tried that concept in 1982 and 1983 and, frankly, it did not work. Even if one puts in place a control total in boom times, one ends up cutting capital spending because one cannot cut a lot of social spending. In times of deflation it is wrong to cut public capital spending. It is wrong to pursue policies too quickly which, in times of full employment, might be more appropriate. I urge my right hon. Friends to be extremely careful about that control total as it might lead to more decisions that will lead to explosions similar to that which occurred over the coal modernisation programme.
In times of deflation, public spending should be determined by what can be prudently financed—what the markets will finance without forcing up interest rates. Right now lower interest rates and more public spending, but not just any kind, are both possible. Hon. Members who follow such things closely will know that narrow and broad money are not swelling as one would expect; they are well under control. It would be perfectly possible to reduce interest rates further as long as that was announced by the Bank of England and not seen as a politicised gesture. I know that I have bored hon. Members with my favourite hobby horse on many occasions, but until we depoliticise the announcement of our short-term interest rates we will continue to have difficulties when handling short-term rates and monetary policy. In the light of existing deflation we could now have lower interest rates.
We should not cut capital spending now. We should restore any existing cuts that may have been agreed, or proposed by Treasury Ministers a few weeks ago. We should increase capital spending. The huge City of London transport programme, for example, would provide additional employment and help, if not directly to miners, certainly to the ancillary and heavy engineering businesses.
We want to see a package for small businesses. That could all be done without any inflation risks. If hon. Members question that, they should consider countries such as Japan which has vastly increased its anti-deflation packages without any risk of inflation. Above all, we need to reform unemployment policy.
On a point of order, Mr. Deputy Speaker, I should like to know whether we are now subject to the 10-minutes rule? If so, when are you going to ring the bell on my speech?
I shall try to pitch my speech even shorter than that.
To cope with the challenges raised by the pit closure programme we need to restore and increase capital spending in the public sector. We need a rescue package for small businesses. All that could be done without the risk of inflation. We also need to reform unemployment policy. I am not satisfied that we spend £.8.9 billion a year on unemployment benefit when we get nothing for it. Even the word is wrong—today there should be no need for anyone to be unemployed involuntarily. The idea of the scrap heap is an outdated concept that belongs to the economics of the past.
Everyone in our society should have a function and should have the dignity afforded by performing it, unless they happen not to want to work. Everyone should have the opportunity to perform that function even though it may not offer a full economic wage. The transformation and the modernisation of the mining industry should proceed at the right speed and every miner and worker related to the industry should be reabsorbed into a job or function, if only after a while. That can be done and is consistent with any changes to the industry.
When interviewed last night, the Prime Minister recognised the tasks that confront us—in part they have been prompted by the suddenness of the decision on the coal industry. We must get on and cut interest rates further --it is perfectly prudent to do that providing that the Bank of England announces those cuts, not the Treasury. We must increase capital spending; we should certainly not cut it. We must also revise the unemployment strategy from head to toe so that we get far better value for the enormous expenditure that is poured out now.
Last night the Prime Minister said that he and the Government were looking for "a strategy for growth", recovery and the future. Out of the suddenness and shock of the coal industry decision we have the opportunity to outline and carry out such a strategy. Without it there will be no growth, no recovery and no future worth having.
I participate in this debate with a heavy heart. In the past 13 years, it seems that every time I have spoken in the House it has been on an Opposition motion about closures, sackings, rundowns or the collapse of British industries. This debate is indicative of much that is wrong with Great Britain in the 1990s.
Ten days ago, seven Ministers meeting in secret agreed to slash Britain's coal industry from 50 collieries to 19 by closing 31 pits, with the loss of 30,000 mining jobs and 50,000 to 60,000 jobs in related industries. Tragically, most of those losses are in areas already suffering unacceptably high unemployment.
The closures announced last week were the most savage rationalisation ever inflicted on any sector of British industry, and come at a time of deep recession and massive unemployment. They are also a waste of Britain's most enduring energy resource. This country has the greatest coal deposits in western Europe, and most of them are to be left in the ground in collieries that will be flooded and filled with gas.
That seven-man, secret decision was not divulged to the Cabinet, Parliament or public, and the subsequent uproar when the public realised the extent of the industrial vandalism being inflicted on the country scared the wits out of a considerable number of Tory Members in marginal seats—many of whom subsequently made public statements that they could not and would not support the Government in any vote on that policy in the House. That caused the Government in turn to panic.
The Government were terrified that they might lose a critical vote, and on Monday we had the spectacle of the President of the Board of Trade coming to the House with a statement that apparently offered concessions. I submit that they were aimed more at buying off dissident Tory MPs than at meeting the country's energy requirements.
I read the right hon. Gentleman's statement to the House three times, and nowhere did he mention the word "review". Today's appalling speech by the right hon. Gentleman will cause bewilderment among the miners in my constituency who are to lose their jobs, because he never addressed any of their problems. Today, the President of the Board of Trade said that everything is to be reviewed, whereas on Monday he said that virtually nothing was to be reviewed. His main concession was that British Coal would immediately close only 10 collieries. He stated:
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 case of Parkside colliery in my constituency is absolute proof of the necessity for a wholly independent review of the closure programme and of Britain's energy requirements. On Monday, I told the right hon. Gentleman that the closure of Parkside without further review was incredible. He replied:
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."—[Official Report, 19 October 1992; Vol 212, c. 205, 224–225.]
The closure of 10 collieries was confirmed by the Prime Minister yesterday, when he replied to my right hon. and learned Friend the Leader of the Opposition:
So that there is no dispute or misunderstanding anywhere in the House, let me make clear the position of the 10 pits identified by my right hon. Friend, and that of the others that he mentioned in his statement. In our judgment, the 10 pits that he specifically named have no sustainable economic future".—[Official Report, 20 October 1992; Vol 212, c. 315.]
In the information that the Coal Board has given the Prime Minister and the President of the Board of Trade, it has at best been economical with the truth, and at worst has told them a pack of lies.
Parkside, opened in 1964, is a profitable colliery. British Coal's own figures show that in 1987–88 the colliery made a profit of £5,093,000; in 1988–89, £3,258,000; in 1989–90, £1,720,000; and in 1990–91, £5,074,000. Despite a difficult first half-year in 1991–92, Parkside still made a profit of £2,874,000.
Although the first quarter of this year also was difficult, new coal-face machinery costing £6 million has just gone on stream and is being bedded in. The miners at that colliery expect the pit to be profitable by Christmas. If Parkside closes, that £6 million machine and all the other equipment there will be left to rot in the ground. None of it will be salvaged.
Parkside is strategically placed at the junction of the M6 and the M62. It can compete with imported coal, and serves the entire north-western region with fast access. It has a guaranteed market at Fiddler's Ferry power station, which takes 80 per cent. of its coal, only eight miles away by train.
The British Coal figures for Parkside prove that it is profitable. If it merits a review, I suggest that any figures suggesting the unprofitability of all the other collieries on the closure list are also dubious. If the review is to be meaningful, all 31 collieries must be individually examined and the facts presented to the House and the country. The miners of Parkside and all my other constituents are entitled to nothing less.
Last week's announcement of 31 pit closures certainly shook everyone in the country. There are no pits in Brent, North—at least, none has been discovered as yet—but the strength of feeling on the issue in my constituency is stronger than on any other in the past 10 years. Judging by the mailbags right hon. and hon. Members have received, whatever the closures may have done for miners—for whom I have full sympathy—they must have increased the number of postmen being employed.
The idea of putting 30,000 miners out of work in one fell swoop, some at three days' notice, and of jeopardising the jobs of 70,000 other workers has shaken the country—particularly at a time when we are moving from recession to depression, for we are almost in a depression now, and what was said by my right hon. Friend the Member for Guildford (Mr. Howell) gave us an idea of the desperateness of the measures that are required.
In the Lancashire town where I grew up, there was only one employer—the cotton industry. I grew up during the depression of the 1930s, when unemployment, especially male unemployment, was intense: the family earner, whose wife and children looked to him for their income, could expect to be out of work for a long time. Mass unemployment is evil. It destroys the family, and it destroys the sense of community.
Now, there is a new factor. In the 1930s, people could move more easily, because houses were generally rented. They could move from the north, which was experiencing a depression, to London, which was then experiencing prosperity—it no longer is: my constituency is currently in the depths of a depression that particularly affects middle-class workers who used to be employed in the City. Now, even people in the mining villages have bought their own houses—with the Government's agreement, and backed by my own enthusiasm—and many are trapped by negative equity.
In many ways, the Union of Democratic Mineworkers enabled the Conservative Government to defeat the miners in 1984–85. It is unduly felt that the union has now been stabbed in the back for what it did.
I am glad that the Government have retracted a good deal of what was in the original statement: the future of 21 pits is being reconsidered. I only wish that that applied to all 31. That, surely, would be a generous and sensible gesture, especially in the light of this afternoon's exchange in the House between the Secretary of State and others. I also welcome the review. Any such review must be both thorough and open. It must cover two areas—the existing situation, and the country's future energy policy.
I suspect that energy pricing has been rigged against the miners, and that some pits are being closed unfairly—that there has been no free market or level playing field. That should certainly be examined. There should be an investigation of the relative cost of production, and of how the mines compare with gas and nuclear fuel which is heavily subsidised by Government. Secondly, the review must consider the long term. It is said that the country has 250 years of coal supply; we probably have only 10 or 20 years of gas. It would be suicidal to use up that gas, which represents a strategic reserve in the long term. The world is now a much more dangerous place than it was before the collapse of the communist empire in Russia. Years ago, I did not think that I would ever say that, but I have now seen what is happening in eastern Europe, north America and elsewhere. We should conserve our stocks of gas, coal and oil for the future.
Like my right hon. Friend the Member for Guildford, I feel that any policy decision that the Government make at this time of high unemployment should take employment into account. I would welcome nil inflation, but I certainly do not want it if it would involve nil employment. Every Cabinet decision should relate to how many people it will employ. One thing that can be said of coal is that it is a labour-intensive industry. Similarly, I hope that the Government will help with the extension of the Jubilee line, which will employ 12,000 people. The first item on the Cabinet's agenda from now on should be the effect of its proposals on the employment market.
The points that I have made have also been made by my constituents. They feel that the miners have been let down. It is now up to us to make it clear that they have not been let down, and I am also glad that the Select Committee is doing its best to bring about a return of confidence. Many Conservative Members—although we may differ on economic policy—are one-nation Tories, and it strikes us as very serious to condemn to continued unemployment areas that have no employment alternative.
Although I represent a London constituency, I shall never forget what unemployment was like in the 1930s in the area were I grew up. I trust that the review, when it is published, will give the mining industry sustenance and hope for the future; and I trust that we will have a distinctive policy for energy, covering 20 to 30 years, with which all hon. Members on both sides of the House can agree.
One of the 10 pits is in my constituency—Betws, near Ammanford. It should not be on the list, because—as the Secretary of State and the Minister know very well—it is an anthracite pit, and anthracite is not dependent on any contracts between British Coal and the two power generators. The market relates to domestic heating, and possibly to industrial heating as well.
Even in west Wales, the demand for anthracite exceeds supply. We do not really have any problems with imports; we can just about compete on price, and we can certainly compete on quality. Betws is a modern pit. British Coal has mined anthracite there for 15 years or slightly more; at one time it employed nearly 500 people, but that is now down to 100. It is not an uneconomic pit: it is uneconomic only in the sense that British Coal—having mined it traditionally for 15 years, using the equipment that it has used in other mines to extract soft rather than hard coal—does not wish to extract any more coal from the seams that it has been mining, and probably cannot do so. That does not mean that there is not a considerable amount of coal left in those seams—in the pillars, as they are called. British Coal, however, cannot extract it, because it is locked into a certain way of mining that does not lend itself to the process.
Under those seams lie other seams, but British Coal has decided that it does not wish to make the investment—essential investment, perhaps—that would be required for it to start on those seams. It has decided to leave the anthracite coalfield. It still extracts anthracite by opencast mining, but it is no longer interested in the slant and drift methods.
It was announced that Betws was likely to be closed some time ago, before the list was published. Some of us decided, having talked to the magnificent leadership of the NUM—it is a magnificent leadership in the Betws colliery, and, indeed, throughout south Wales—that, if British Coal was bent on leaving the anthracite coalfield, the only alternative apart from closure was to see whether other operators were prepared to come in. After all, British Coal was to be privatised in any case. Would other operators—responsible and respectable companies—be prepared to extract the remaining coal, use the money from that extraction to boost cash flow and then decide whether it was possible to go for the other seams?
If a different mining method were used—I am not talking about pit ponies or pick and shovel; I am talking about the under system that has been developed in the United States and, to some extent, in South Africa, a technique in which British Coal was not interested—a considerable amount of coal could probably be extracted from Betws. After there had been some publicity, three separate organisations contacted me and my office a few weeks later and said that they were interested. One of them is an international mining company. It has had no previous connection with Britain, so it is not Hanson or anybody like that. The second company is owned by a business man with high technology factories in the south of England, but he has local connections. The third company is Ryan Mining, which has now made its intentions public. It has shown tremendous commitment. I pay tribute to the chairman of Ryan Mining, Mr. Hodson, for his tremendous commitment and dedication to the coal industry in south Wales.
These three companies would, I believe, be acceptable to the leadership and members of the National Union of Mineworkers. We are not talking about cowboys or fly-by-nighters coming in to flout the safety rules and everything else. That would be unacceptable. We are talking about responsible organisations that are interested in coming into the area.
I hope that British Coal decides not to close Betws. If, however, it decides to do so, the problem will be not the men, or the coal, or the shortage of bidders but British Coal. I have discovered that it is almost impossible to communicate with British Coal. Whenever one puts forward any ideas they are shot down. One cannot get through to the right people. The mining of anthracite coal in west Wales is governed from Nottingham, so one cannot get hold of anybody. Therefore, rumours are flying around.
A few weeks after the announcement of the closure, journalists rang up British Coal and were told that British Coal did not know what it wanted to do with Betws. A few weeks later, a business man rang me up and said that he wanted to go and have a look at the pit. I rang the office of the chairman of British Coal and asked him to get in touch with that gentleman. He was told by British Coal, however, that on no account was he to go near the Betws pit. He was told one cannot buy a coal mine just as though one was going into a Kwik Save supermarket. That gentleman said to me, "British Coal should really have sent a car to fetch me. It should have laid out a red carpet for me. I was actually going to put money into that pit during a slump, during a recession. I wanted to invest money in that coal mine and save possibly 60 or 70 of the 100 jobs."
Rumours are still flying around. I was told by the lodge secretary the other night that bricklayers are now going down the mine and beginning to brick things up. I do not know why they are doing that. I see that the Minister for Energy shakes his head, but perhaps his writ no longer runs that far. In his speech the President of the Board of Trade used the word "instruction". He is a bit of a lame duck President these days. I do not know how far the Minister's instructions go, but I have been told that the bricklayers are going down the pit and bricking things up.
I was also told the other day—no doubt the Secretary of State for Wales can answer this question—that British Coal has approached the Welsh Development Agency and asked it to turn the site into a business park. The last time the Welsh Development Agency took over a mining site in Wales it turned it into a Tesco supermarket.
I can give the right hon. Gentleman that assurance. I shall personally make sure that British Coal responds to indications of interest from the three parties he mentioned, or from any other parties. We shall not preclude that.
I am grateful to the Minister for that assurance.
We are not romantics. We believe that the anthracite coalfield of west Wales can be developed for the economic good of the area, that value can be added to it by the creation of other jobs. The anthracite coalfield can contribute to the economic well-being of the area. It has also made a tremendous contribution to the Welsh language and to the cultural life of the whole of that community. We do not intend to let that go. We shall fight to preserve it. We shall regenerate the anthracite coalfield of Wales.
We have heard a lot recently about the importance of Select Committees in reviewing the case for pit closures. May I begin, therefore, by reading from the final report of the Select Committee on Energy, submitted in the spring of this year. The final sentence in paragraph 19 says:
we believe that the Energy Committee should remain in being even if the Department of Energy is abolished … we firmly believe that this is not the time for the House to reduce its ability to scrutinise energy matters.
How right we were then and how right we are now. In our previous report dealing with the market for coal after 1993 when these contracts expire we said:
if a significant portion of the UK's coal reserves were abandoned, which we hope will not happen, resulting in a major reduction of long-term energy security, the Government should understand that the country would see this not as a commercial decision, but a largely irreversible decision of historic significance to the United Kingdom.
We were right about that, too. Therefore, one wonders whether our reports were well used by the Government or whether the Select Committee on Energy wasted its time. One has to draw the conclusion that any other Select Committee that looks into the matter will be wasting its time, too, unless there is a positive pledge from the Secretary of State and the Minister for Energy that the Select Committee's report will be taken seriously.
We are told that there is no demand for coal. Yesterday, however, I chaired a conference in France, called Coal Trans, which was attended by 1,050 delegates. They talked about how they were going to trade coal on the world market. They are looking at a potential vacuum here, and there was the gleam of nice cash registers in their eyes.
We are also told that our coal stocks are too large. Of course they are. We have carried strategic stocks of coal for a long time, in case there should be strikes. We are told, too, that it is expensive to stockpile coal. We are not told whether it is the space on the ground that is expensive or whether it is the capital cost of tying up the stocks that is expensive. If it is the capital cost that is expensive, British Coal and the Government should do the same as any other business has to do: sell the coal at a price at which it can be sold, even if it is a marginal cost price, rather than try to hold out for the full price.
We know that there are no contracts for coal beyond 1993. That seems to have come as a great surprise, but we have known that for a long time. In our report on the consequences of electricity privatisation we reported in paragraph 149:
The new evidence we have received has made brutally apparent how drastically and rapidly Britain's coal industry will contract if present policies continue.
We also referred to the fact that contracts should be in place.
Other hon. Members have referred to the fact that the coal industry is suffering because it was privatised after the electricity supply industry. I believe that it should have been the other way round. If coal had been privatised first, there would have been safeguards for the electricity supply industry. The shame is that those same safeguards, which could have been devised then, were not devised for the coal industry.
As for contracts, as far back as 1988 we said in another Select Committee report that contracts should be put in place quickly for the benefit of the coal industry and for the benefit of all the generators. It is said that British coal is expensive. That may be so. We know that British Coal has a plan to bring down the price of British coal to the same price as world coal by 1994–95. Why, then, after 40 years of investment in the coal industry since the second world war and the spending of £17 billion since 1979 alone are we thinking of cutting out 60 per cent. of our coal industry when we are within two years of getting coal prices down to world market prices?
Since the 1984–85 strike—I do not wish to dwell upon that—new working methods have been introduced into the pits and there have been dramatic increases in productivity. One could argue that that was a year lost, and I regret that we lost that year. We could have been a year further down the road without that strike. But let us not forget that the Government were able to continue to run the country and businesses survived because of the new union in my native Nottinghamshire, the Union of Democratic Mineworkers, headed by the remarkable Roy Lynk. I spoke to him last Saturday—he was down the bottom of Silverhill and I was in the comfort of my sitting room—for a long time and about many things. I asked, "Roy, is there anything I can do to help you?" He said, "I think in many ways you have tried to help already. There is just one thing that I would like from your side of the House—a smidgen of appreciation." My constituents, all those associated with him and all miners, whether they belong to his union or the other union, want to give him more than a smidgen of appreciation.
We have heard about the dash for gas and the consequences of it, on which the Select Committee reported. In paragraph 154 of our report on the consequences of electricity privatisation, we referred to the fact that it would be wrong to allow the dash for gas to cut out British Coal to such an extent that in due course electricity prices increased, and wrong to cut out coal, which might add about 6 per cent. to the electricity bills of those who do not have a franchise tariff, compared with an increase of 11 per cent. from nuclear fuels, despite its having the fossil fuel levy to subsidise it. That should not be forgotten.
The Government have decided to shut 31 pits, with 30,000 redundancies at a cost of £1,000 million in redundancy pay. The topping cycle—the forerunner of clean-coal technology, in which we lead the world—was being developed at Grimethorpe. Last year, £10 million was required to keep that pilot plant going. The Government and the Coal Board could not find £10 million, yet they can now find £1,000 million for redundancy, and last week another £150 million was found to try to allay distress in coal mining areas. Like many others, I am tired of so-called investment in failure and redundancy. I want more investment front-end in success and opportunity, not investment back-end on redundancy and failure. The £150 million extra that was offered to miners would have built a demonstration plant for clean-coal technology. Texaco has had one in America since 1984, Germany has had one since 1985, another one has been in America since 1987 and Shell is building one on the continent that will be ready later this year.
The Government, in offering these massive unemployment redundancy terms and concessions to miners, have misread the mood of the people, who do not want to see redundancies, and have misread the characters of miners, who do not want charity money. I say to the chairmen of the regional electricity companies that the £30,000 that is paid in redundancy to miners who have spent all their lives in the industry is equivalent to one quarter of the self-awarded pay rises that those chairmen are giving themselves each year, and it is those chairmen who largely will cause the demise of the coal industry.
If the Government want my support, they must have an open, public and published review of the coal industry. They must state their energy policy, which they have failed to do for many a year. They must commit themselves to clean-burn technology and treat all 31 pits alike without putting 10 to one side.
I was disappointed to hear the statement in the other place yesterday that some reliance will be put on Select Committee reports. That statement was made by someone who had been presented with Select Committee report after Select Committee report when he was Secretary of State for Energy.
I cannot, as things stand, vote for the amendment unless all 31 pits are included. I do not welcome speedy action to give assistance to miners; I want speedy action to save the pits. I do not see this as being a decision in the context of the Government's energy policy, although I might if I knew what it was. I do not think that it is adequate to say that the House will debate Select Committee reports; we have debated all the Select Committee reports, and this is where we have arrived. If things do not change, I shall vote not against my Government but for the coal industry, even if it means voting for the coal industry in that Lobby—
I have had the pleasure today of getting a bit of exercise, which I need, by walking a few miles around London with more than 200,000 people, who within seven days have responded by coming from all parts of the land to demonstrate against the disgraceful announcement that was made last week by the President of the Board of Trade.
It was an experience that I enjoyed in my younger years, when some said that such demonstrations would never happen again. I remind the Government and the hon. Member for Kensington (Mr. Fishburn) where that march went today. They must be worried and must think seriously what they are doing. The Government and the President—he wanted to be Prime Minister but now he likes to be called the President—have shown their lack of energy policy, of economic policy and their lack of concern for the hundreds of thousands of people who will be affected by that decision and whose lives will be made worse be their contempt for the British mining industry.
I am not convinced that the decision was made on economic grounds. I have been here for only five years, but I have never seen any evidence that the Government or Conservative Members believe in the British coal industry. Sadly, we have seen the politics of dogma, and in last week's decision we saw the politics of vengeance. I do not make that statement lightly; I honestly believe that it was vengeance.
The former Secretary of State for Energy, Lord Parkinson, said, "Remember 1972 and 1974." What did he mean by that? He could only have meant that the Government have intended all along to get their own back on the miners, their families and their communities for the 1972 miners' strike, which few miners wanted, and the 1974 strike, which, equally, miners did not want but which was necessary to fight to maintain their living standards. The 1974 strike led to a general election. Some people like to say that the miners brought down the Government, but it was a general election that brought down the Government, not the miners.
The British people had a fair-sized delegation on the streets of London today. It was a delegation, but only a small proportion of the millions of people who were disgusted by last week's statement. The statement was bad enough, but its tenor made it far worse. They were saying to the miners, "Your jobs will be gone in two days. By the way, don't say anything. Don't you dare open your mouths, or you will lose that redundancy money that we are promising you."
Some of us are old enough to remember when people were screaming at the miners to have ballots, in 1984. Yet Terry Wheatley, who used to be a British Coal manager at Thoresby colliery in Nottinghamshire, and is now an area director in the midlands, told the unions, "If you seek to hold a ballot on pit premises I shall consider that destructive action and we shall withdraw all your redundancy benefits." That struck a chord with hundreds, thousands, even millions of people in our country, because that is the way they are treated in their workplaces today. When they hear about such treatment, they feel akin to the miners, and they say no.
The Government had better listen. The British people are saying, "No; we have had enough. It is our coal industry to keep, not yours to shut down and sell off." The President of the Board of Trade's display today was appalling. We are used to the politicking in the House—we are professionals—but today I saw a man of jelly. I am being as kind as I can, but I still have to say that I do not know how that man can stand up, because he has no backbone. It is nonsense for a man to turn round, somersault and twist as he has done in a matter of 24 or 48 hours.
I walked through this House at a quarter to I I last night, not long after the House of Lords had considered the matter and, wisely, reflected the view of the British people. I saw a lonely man walking into the Chamber with a colleague. I shall not mention the colleague's name, but he is sitting on the Government Front Bench now. They walked into the Chamber all alone, clicking their heels and looking about them. Guess where they were standing. Here, by the Opposition Front Bench. May I never move from this spot if the President of the Board of Trade and the Minister for Energy, who is now in raptures of laughter, were standing here. I thought that they were showing a little foresight, and getting used to the new side of the House towards which they are quickly heading.
We should think carefully before we make our decision tonight. Let us make no bones about it—we shall be deciding whether there will be a British coal industry. Some people will be bought off. I saw one hon. Gentleman on television this morning saying, "Oh well, 10 pits have gone, but we have a review for 21 pits." What nonsense. If anybody believes for a minute that the Government will save the 21 and close only the 10, he is kidding himself.
Far be it from me to advise Conservative Members on their political and professional futures, but they must think little of their constituents if they believe that they will be conned by such behaviour. We have a saying in Scotland, "That will sort the weak from the chaff." Conservative Members have been chaffing all this week, and we shall see who is weak and who is determined to stand by what they have been saying.
The weak will be in the Lobby with the Prime Minister and the President of the Board of Trade, but those who really have the backbone that they have been telling everybody they have will be elsewhere. To be fair to the hon. Member for Rochford (Dr. Clark), he has made the same statement today, repeating that he will not necessarily vote for the Labour motion, but that he will vote for the coal industry. I take my hat off to him—and I do not do that often. He is standing by what he said seven days ago, and he is more of an honourable gentleman than those who said the same seven days ago but do not say a word now.
My time is running out, so I shall add only that what happens here tonight is important for the mining communities and for the broader community—with the hundred thousand jobs that will be lost in related industries. The mining communities will not win or lose the vote tonight. We shall not be impressed by those wishy-washy characters who go through the Lobbies to allow the Government off the hook—if that is what happens—to buy more time to save the job of the President of the Board of Trade, and in the hope of sacking 30,000 miners.
We shall come back. What happened in London today will happen again next week. There will be a massive rally on Sunday, and the campaign will go out to the British people until we save our British coal industry.
I have more than a little sympathy with those who have opposed the closures—for two reasons. First, I represent a constituency which has suffered more than its fair share of closures over the past few decades. The second reason is the way in which the announcement was made. Not many Conservative hon. Members who have employed people in private industry would have given people only three days' notice that they were to lose their jobs, and I do not think it right for Governments or state-owned industries to act in that way either.
I also have more than a little sympathy with the complaints about the way in which some of the gas-fired power station contracts have been set up. It is never satisfactory when distributors act as producers too, and that may be a cause for complaint here. However, the regulators have the power to examine the contracts and the boards have a statutory duty to ensure that they are obtaining the lowest price. The regulator can penalise them severely if the gas contracts prove uneconomic.
However, it is often forgotten in the debate that we compete not only with British gas but with imported coal. There has been much concentration on German policy because the Germans subsidise their coal industry and their coal price is high. Many people have said that we should follow their example. Just because the Germans follow a mistaken policy it does not mean that we must do the same. Furthermore, the costs of the German policy are habitually underestimated, at £1 billion, whereas the true cost of all the direct and indirect aid more than quadruples that to £4.5 billion, because of the so-called "coal penny"—a levy on energy-consuming industries. Hon. Members who go to Germany will find that that policy is far from popular. It is highly controversial, especially in the steel industry, and is certainly not the subject of any cosy consensus.
Leaving Germany aside, we live not only in Europe but in the world economy, and we have to compete there. We currently pay £43 a tonne for British mined coal. The import price into the United Kingdom is £33, the OECD average is £26, and the price in Australia and the United States is as low as £15 to £18 a tonne.
No, I am sorry but I am short of time.
In their heart of hearts, many Opposition Members know that the easier British coal seams were worked out long ago—[HON. MEMBERS: "No."] Anyone who goes down pits such as Bentinck, on the border of my constituency, and crawls along the narrow face will know how difficult it is to win such coal and how skilled the men are at winning it. None the less, it strikes me as a wrong economic policy to mine difficult coal regardless of the cost. Why turn what has traditionally been an asset to the British economy into a millstone around the neck of British industry by penalising it with high energy prices? Not to buy cheaper imported coal would be sheer protectionism. To put it simply, the Government would be putting the interests of one group and industry above others by placing a ban on cheap imports.
The history of coal since the war has been just that. For years, the National Coal Board had cosy guaranteed contracts with the Central Electricity Generating Board, and imports were virtually banned. As a result, consumers and industry paid over the odds for coal; taxpayers paid a huge subsidy to the Coal Board and the economy as a whole was penalised. For every job preserved in the mines, jobs were lost elsewhere. That is, and always has been, the cost of protectionism.
It did not even really help the miners. They still lost their jobs by the tens of thousands. They were paid less than they are now in real terms because, being protected from foreign competition, there was no incentive to raise productivity. As a result of that, they could not be paid as much. The British coal industry is a classic example of the failure of Government policies of intervention in industry.
Meanwhile, other countries benefited from diversity of energy resources by opting for cheaper imports of energy. Japan closed down virtually all its mines. As a result, it buys as cheaply as it can on the world markets. In the EC, France, which has a socialist Government, has long since closed down the bulk of its capacity. It now has only 20,000 miners. France buys coal at £26 a tonne and Italy pays £33 a tonne. Those are far lower prices than we pay.
It is often argued that we need domestic supplies for our energy security. However, even with the closures, 30 to 40 per cent. of our energy needs will be met by domestic coal, on top of which we have indigenous gas, oil and nuclear which will give us far greater security than most. I should have thought that simply to refuse to import energy and to use up our domestic supplies as soon as possible would guarantee our insecurity rather than our security in energy supplies.
We are, anyway, over-reliant on coal in comparison with our main competitors. Sixty-seven per cent. of Britain's electricity comes from coal. That is higher than the level in all the major EC countries. Even Germany, which is much quoted, gets only just over 50 per cent. of its electricity from coal. The figure in France is 8 per cent.
Even the United States, the land of cheap coal, gets only 55 per cent. of its electricity from coal. We are way out of line with out international competitors.
Opposition Members argue that foreign coal is unreliable. Very little of the so-called cheap foreign coal which is habitually sneered at comes from Russia, Poland and the third world. Opposition Members say that those countries are unstable and that we cannot rely on them. However, those countries will become even more unstable unless richer countries like ours trade with them and allow them to sell to us the goods that they can best produce.
I sometimes find it extraordinary that people who call themselves socialists urge us to refuse to buy products from poorer countries. That does not sound much like the brotherhood of man. The vast bulk of our coal imports do not anyway come from the third world, from Poland, Russia, eastern Europe or Colombia. They come from the United States and Australia. They supply the overwhelming bulk of our imported coal. They are long-standing allies of ours and they are stable democracies. There is a huge and diverse competitive international energy market and if we cut ourselves off from it, we will penalise our industry and our economy as a whole.
My experience in Amber Valley has shown me at first hand the problems caused to coal communities when there are pit closures and I understand those problems. However, I must point out to Opposition Members that most of the pits in my constituency—in fact, almost all—were closed down under Labour Governments. The miners received a pittance in redundancy and even their concessionary coal was taken from them. Contrary to what the hon. Member for Livingston (Mr. Cook) said, the redundancies were effectively compulsory. I suggest that he should not come to my constituency and tell the thousands of miners who were made redundant under Labour that they were not made compulsorily redundant.
Amber Valley is also an example of regeneration after coal. Notwithstanding the effects of the recession, it has built up a very successful, diverse industrial base since the coal mines were closed and I willingly pay tribute to councils of all parties that contributed to that regeneration.
So despite the perversity of the situation in which I find myself in supporting an avowedly interventionist Minister who, for once, is doing the right thing by the market, which I support, as I believe in open markets and a liberal open economy; and despite my deep concern about the way in which the whole issue has been handled, I will oppose the Opposition motion.
When the collieries were closed in Amber Valley, there was full employment in this country—not like the situation facing the miners at Silverhill today. I want to speak for the miners at that colliery which, in case the constant references by Conservative Members leave anyone in doubt, is in my constituency. I want to speak for the staff at the colliery and for the families who depend for their livelihoods on the colliery continuing to produce coal.
Those miners want to work and they proved that on Monday morning when, despite the closure announcement, they turned up ready to work. However, they were sent home. When the President of the Board of Trade was still in the Chamber, I wanted to ask him how any of the 10 pits will be able to prove that they are economic during the next 90 days when the miners are not allowed to work. If the Minister who is on the Front Bench answers any of the questions, he must address that issue. If he does not, the exercise in relation to those 10 collieries is cynical and cosmetic.
The debate is about whether the miners at Silverhill will ever work again in the colliery which they have worked to make economically competitive and whether they and their families will be condemned to unemployment and poverty by a callous, incompetent and short-sighted Government.
In effect, Silverhill has been condemned to closure by the President of the Board of Trade and the Prime Minister. On Monday, the President of the Board of Trade said that Silverhill was "currently loss making" and that it had
no prospect of viability in the foreseeable future."—[Official Report, 19 October 1992; Vol. 212, c. 205.]
The Prime Minister repeated the same charge yesterday and stated categorically:
In our judgment, the 10 pits … have no sustainable economic future."—[Official Report, 20 October 1992; Vol. 212, c. 315.]
On what did those two mining and energy experts base their judgments? Where is the evidence that leads them to that conclusion? It can be nothing in the recent history of Silverhill. The colliery has made a consistent profit in each of the past four financial years. In 1988–89 it made a profit of £3.6 million. In 1989–90 the profit was £620,000. In 1990–91 it was £1.1 million and in the last complete financial year—1991–92—it was £1.94 million.
The figures for 1991–92 are perhaps the most remarkable. Not only did the miners produce their biggest-ever output of 932,000 tonnes, but they did so in the face of considerable geological difficulties. By August 1991, Silverhill colliery was as much as £3 million in the red as the men struggled to cope with those geological difficulties. By sheer hard work, by April 1992, they turned a deficit of £3 million into a profit of £2 million. In seven months, they were able to add £5 million in profit in that colliery.
The miners in Silverhill are realistic, as are miners everywhere. They know that they work in conditions which are less easy and less attractive than some of the so-called super pits in which some miners can almost walk along a seam. Silverhill miners are forced to crawl along seams less than 3 ft high. That makes their achievements of last year all the more remarkable.
Since 1988, with a work force of between 750 and 800 men, the colliery has produced more than 850,000 tonnes of coal a year. Last year was a record. Therefore, how can the Prime Minister and the President of the Board of Trade tell us that those miners have no sustainable economic future?
The miners know the difficulties that they have to contend with. They know because they work in those difficulties every day. They know that coal does not jump on to the conveyor belt. They know that they have to struggle to mine that coal. They know that they can go for weeks without producing any useful coal, only to clear the way for substantial gains later. That is exactly what happened at Silverhill last year and that is exactly what can happen again if only the miners are allowed to work.
How can the Government conclude that there is no future for Silverhill and the other nine pits of the 10 when British Coal last year drew up a five-year plan for Silverhill? That plan looks forward from 1992 to 1997; it is based on the production of coal at economic prices over that five-year period. That plan picks out the best bits of the colliery and the best bits of the remaining reserves. On the basis of the record of that colliery, when it published that five-year plan, British Coal had every expectation that the colliery would survive and would develop along economic lines.
It is not only a five-year plan that British Coal was prepared to put forward on behalf of Silverhill colliery. There is also a new face ready and available for work. British Coal has spent £4 million on preparing that face and it could be mined today if only British Coal and the Government allowed the miners at Silverhill to take advantage of that opportunity.
Those are the economic facts of Silverhill. How can they be reconciled with the Government's present position? According to the Government last week, Silverhill and 30 other collieries were uneconomic. Today, Silverhill is not to benefit from the review, from a moratorium or from any other public consideration of its position. Its miners are not even allowed to work. Where was the Government's credibility when they said on Sunday that there was no turning back? How is it that the Government say, "Oh yes, for the 21 collieries there is a need for a review"? How can they tell us that for the other 10 that review cannot be available?
We need to consider those 10 collieries in the context of the review that is available for the other 21. If that does not happen, it will be difficult to give much credibility to the review that the Government are proposing in relation to the 21. How can those 10 collieries be condemned by the process that originally condemned all 31 without the 10 now being considered? Conservative Members who doubted over the weekend how they would vote tonight have to square their consciences in relation to the 10 collieries. How can they say that they were doubtful about supporting the Government over the weekend when they cannot still support those 10 collieries tonight?
The miners of Silverhill want a real review. They want the opportunity of putting their case economically in the way that they do best—by cutting coal. That is what they must be allowed to do, even in the 90-day period. They must be given the opportunity to work. They must be given the opportunity to compete on a level playing field with the other energy resources that are available.
I must confess that the original statement by my right hon. Friend the President of the Board of Trade embarrassed me, but I welcome the review. Traditionally, the United Kingdom has had a four-fuel economy for electricity production, and a balance must be maintained among the fuels.
In Germany, by the end of the century, about 30,000 jobs will go. Their production will abate considerably from 72 million tonnes. Bearing that in mind, we must consider whether we will accept the German idea and have what is known as a strategic element for coal in the economy. The Government would then have to decide what that figure should be.
I am in favour of an expanding coal industry, as are the Government. They now have the largest share of electricity production, and that will continue to be so, but two other matters arise. One relates to imports and was dealt with by my hon. Friend the Member for Amber Valley (Mr. Oppenheim). Imported coal has a 1 per cent. sulphur content, whereas local coal has a 1.5 per cent. sulphur content. That is why power-producing companies are turning to gas. They are turning to imported coal because of the lower sulphur content. [Interruption.] I hope that Opposition Members will listen to what I have to say.
Coal has many great problems. We have the problems of nitrous oxides, sulphur dioxide and carbon dioxide, all of which are inherent in fossilised fuels. Unless we confront those issues, and if we are eventually to face a European carbon tax, the industry will be in great difficulty. Further, there are some important issues regarding the disposal of fly ash and, if limestone is used, of calcium sulphate, which has no market. Also, there is subsidence and the fact that working in mines is still a dangerous occupation. All those matters will have to be dealt with in the review.
Hon. Members will appreciate that a coal mine producing coal for a power station has a maximum efficiency of 37 to 38 per cent. A gas turbine has an efficiency of 52 per cent. That is why people are seriously considering gas turbines.
I hope that the Minister realises that, in respect of nuclear power, which is one element of United Kingdom fuel production, a 1994 review later will be totally inadequate, and that we must bring it forward and let the industry know precisely what is to happen. Hon. Members will recognise that it would be wrong to destroy one industry, the coal industry, and at the same time destroy another by getting rid of our nuclear power industry. Those stations have been here for many years, and they are here to stay.
The Minister might like to consider the nuclear levy that is to terminate in about 1998. As the company made a substantial profit last year, that could be considered in the review. That might be a helpful suggestion.
I do not know why so many hon. Members fear the threat of gas. About 11,000 MW of new capacity is envisaged. However, in a free economy, much of that might not materialise. In respect of the assessment of domestic reserves in the United Kingdom, I firmly believe that between 45 trillion and 55 trillion cu ft may be available. Many of our reserves have not yet been discovered, but, believe me, North sea reserves have consistently been underestimated.
The House should have no problems in recognising the general position of gas in Europe. In the Netherlands, 50 per cent. of electricity is produced by natural gas. In Italy, the figure is 18 per cent., and in western Germany it is 8 per cent. If we are to share and have a balance between fuels which is good for the supply industry and, in particular, for the miner, it is right not to destroy another industry which contributes to the economy.
I wish to say a few words about the cost of electricity from various sources. The price for the cheapest available low-priced gas—although it has recently increased—is between 2.5p and 2.6p per therm. Higher-priced gas works out at 2.7p to 3.1p per therm. Imported coal with flue gas desulphurisation works out at 2.6p per therm, but British coal with FGD works out at 2.93p per therm. I apologise for quoting so many figures. If coal is to succeed against its competitors, it must be imported coal. That would not be helpful to British miners.
We must also look ahead. We expect to hear shortly that the European Communities (Amendment) Bill will come back to the House. If we go further towards ratifying the Maastricht treaty, possibly a carbon tax will be introduced in the United Kingdom. That could be the final death knell of the United Kingdom industry. I hope that it will not come but that we will bypass Maastricht and keep sovereignty in our country.
It may be said that, having devalued the pound by 10 per cent., we are fairly successful and the prices of gas and coal will come into equilibrium, but it would require another 10 per cent. devaluation to bring about a proper equilibrium which will benefit the coal industry.
You have enjoined us, Mr. Deputy Speaker, to be brief to enable as many mining Members as possible to speak. I wish to make two further observations. We are naturally worried about one or two points.
From the beginning of this century, the amount of coal produced in the United Kingdom has fallen consistently, largely because consumption has fallen. That has been traditional under all Governments. Therefore, the decision of the President of the Board of Trade is simply a continuation of that pattern.
A similar trend has occurred in western Europe. In France, little coal production remains. In Belgium and the Netherlands, it has been abolished. In Germany, it has been gradually diminished. In the United Kingdom, many people recognise that we cannot keep coal in stocks for ever. It is expensive to do so, and the more the coal is exposed to weathering, the more it is destroyed. By Christmas, the stocks of coal will amount to about 50 million tonnes. It will cost the taxpayer—to whom we must all account—£800 million per year to maintain the stocks.
The burden on the taxpayer is enormous. I beg the House to ensure that we consider the matter coolly.
I find it extraordinary that this evening the Secretary of State for Wales will reply to the debate and deal with problems in the county of Durham. That is little compensation to him for being ignored last week. I found the remarks of the President of the Board of Trade this afternoon insulting. I am sure that the 30,000 people who marched through London and the many millions of people who support the trade unions and the miners on this occasion also found his remarks insulting.
The President of the Board of Trade has been rumbled by the House and the nation. His platitudes and crocodile tears will not be accepted. People will treat them with the contempt that they richly deserve. Indeed, on Monday he did not even know where Vane Tempest colliery was. He could not respond to me about Vane Tempest. He referred to Easington colliery, which is one of the 21. He did not even know where Vane Tempest was. That showed his contempt for the workforce at Vane Tempest, the people of Seaham and, indeed, the population of Easington. For his information, Vane Tempest has made a profit of £2.3 million this year. It can go forward with the correct inward investment to make further profits in future.
Easington colliery is in profit. It has tremendous reserves lying under the North sea, where subsidence is not a problem. The reserves lying under the sea cannot be exploited by opencast mining. They will be lost to the nation for ever. It will cost some £48 million to close Vane Tempest colliery. The hon. Member for Gloucestershire, West (Mr. Marland) had better wipe the smirk off his face or he might get it wiped off outside. The hon. Gentleman shows contempt for workers who have given a lifetime to the industry and the nation. It is disgraceful.
The Government will lose votes.
Unemployment in Seaham is the highest in Great Britain. Seaham has the smallest number of job opportunities. With the loss of Easington colliery and Vane Tempest, unemployment in Easington will be 17 per cent. overall. But that disguises figures of 20, 25 and 30 per cent. in villages which previously had coalmines. It disguises an overall figure perhaps in excess of 50 per cent. among young people between 16 and 24 who have never had a real job. It is a disgrace to see fine young men standing on corners who should be underground moving coal for the benefit of the nation.
In Easington we shall have an imbalance of population. Young people will have to move away. We shall be left with an aging population chronically sick and disabled from a lifetime of work in the mines and heavy industry at a time when services are diminishing as a result of the Government's attitude to expenditure on social services. A feeling of helplessness and hopelessness exists in the community of Easington and, indeed, in the north-east as a whole.
We have heard the promises and platitudes of the Government. The people of Easington have not received one penny piece from RECHAR or any other funds. In 1984 and 1985 the finger was pointed at miners and people said that they were the enemy within. I ask now who is the enemy within. It is a Government who will rely on Algeria, the middle east and the Soviet Union for future gas supplies. We all know what happened when the Soviet Union fell out with Latvia, Estonia and Lithuania: the Soviet Union turned the gas off. Are we to be subjected to that in the future?
A tremendous amount of money—£ 15 billion—is in the mineworkers pension scheme. Who will get their grubby hands on it? Have Conservative Members and people from the City got their eyes on it? Of course, they have. Thousands of acres of land are also held in trust by the Coal Industry Social Welfare Organisation. There are tennis courts, football grounds and miners' welfare halls which were paid for off the pit point by miners. That property is held in trust which can be negated by this Parliament. We have to beware. We must ask ourselves what we can do. We can bring to an end the incestuous behaviour of the electricity supply companies—stop them involving themselves with generating plant. The Minister can ensure tomorrow that power generators burn British coal. This is Parliament. We make the laws, we amend the laws, and we can make a law tomorrow to make the generators burn British coal.
When I first came here I said that I was a child of the mining industry, and was proud of it. I have a great love of my community, heritage and culture. My grandfather did not leave me vast estates or money; he left me an industry whose reserves had been worked prudently and had been conserved for future generations. I would like to be in the same position and to be able to leave future generations secure in their energy resources well into the next century.
I understand and respect the passion with which the hon. Member for Easington (Mr. Cummings) spoke. Last week's announcement by my right hon. Friend the President of the Board of Trade angered and outraged the nation. In the 22 years that I have been in the House I do not recall any Minister so misjudging the public mood.
I opposed that decision and I shall continue to oppose it on social, economic and energy grounds. The scale, the time scale—five days to five months—and the brutality of that announcement, which consigned 30,000 miners and their families to the slagheap of unemployment at a time of the highest male unemployment since the 1930s, is unacceptable. And so it has proved for the nation and for millions in the ranks of the Tory party.
The miners are not asking for charity. They are asking for jobs and for a level playing field. What can they do with the average redundancy pay of £22,000 that they are being offered? As they live in isolated communities they cannot sell their homes. They cannot get on their proverbial bike—as Lord Tebbit would no doubt urge them to do—because they cannot move to a place where there are jobs, as they could not find a home even if they were able to find a job.
I oppose the decision on economic grounds. A week ago, I wrote to the President of the Board of Trade to ask him two questions: what was the Government's estimate of overall job losses that would be consequent on throwing 30,000 miners out of work, and what would be the cost to the taxpayer of people who last week were contributing their tax, national insurance and value added tax to the Revenue, now that they are out of a job, on the dole and drawing social security? I have received no reply.
I had the opportunity to put those questions, face to face, to my right hon. Friend the President of the Board of Trade and to the Secretary of State for Social Security. To my utter amazement they admitted that they did not know the answer, and that no cost benefit analysis had been made by the Government of the consequences of that decision to the taxpayer. No properly run company would contemplate sacking half its employees in a given field without carefully analysing the costs involved. I am at a loss to understand how the President of the Board of Trade felt that that was not necessary in this case.
Perhaps I may help my right hon. Friend. The best estimates that I have been able to get from the Commons Library—they will have to stand until the Government come up with figures of their own—are that putting 30,000 miners out of a job would lead to a loss of at least 100,000 jobs, and an annual cost to the taxpayer in lost tax revenue and increased benefits of in excess of £125 billion. On top of that is a further £1.15 billion in redundancy pay. The cost of throwing them on the dole would far exceed the £1 billion that would have been required to subsidise every tonne of coal produced by British Coal last year down to world prices at a rate of £15 a tonne. I request that a cost benefit analysis be instituted by the Government.
I oppose the decision on energy grounds because, beyond the nostrums of the free market and laissez-faire, the Government have no energy policy. A free market is the last thing that we have. It is a rigged market, in which the dice are heavily loaded against British Coal and British miners. A nuclear subsidy of £1.2 billion a year is paid for by an 11 per cent. surcharge on every consumer's gas bill. Meanwhile, the regional electricity companies have a direct incentive to embark on a dash for gas because it provides the quickest way to establish generating capacity and not because it provides cheaper electricity. They are allowed to pass on the cost to the consumer.
Nigel Lucas, professor of energy at Imperial college in London, said recently on BBC television:
By buying gas-fired electricity from independent power producers, the RECs are probably paying up to 50 per cent. more than the price of electricity which might be available to them from existing coal-fired stations.
The dash for gas will almost double the rate at which we are using up our North sea gas supplies, which will run out in the early decades of the next century. What then? Pipelines from Siberia, at vast expense, or tankers from Algeria? The costs will be enormous.
World energy prices are low, but what if there were to be another middle east crisis—we have had those in the past—and there were a shortage? Prices would go through the roof. We would have no security of supply and would rue the day that we abandoned British coal.
Government policy—if such it can be called—is driven by opportunism and short-term considerations. That is something that must change.
I welcome the major change in Government policy and thank them for it. It represents a victory for common sense. If people power in my Manchester Davyhulme constituency, and in every other constituency, has played its part, let us not forget the silent and lonely vigil kept by an elderly miner 1,200 ft under ground in Silverhill pit—Roy Lynk, to whom the House and the Tory party in particular owed a debt of gratitude when parliamentary democracy was threatened by the Scargill strike of 1984.
I am grateful to the Government for heeding requests for a full and wide-ranging review of energy policy and for the assurance that I have received from the President of the Board of Trade that his review will tackle the unlevel playing field which operates against British Coal.
On that basis, I shall support the Government in the Lobby tonight, but that is not the end of the matter. This is just the first round. Ahead of us lie three months of hard pounding. The Government have to convince us in the debate on the Floor of the House early in the new year. The Government have 90 days to come up with a detailed, coherent energy policy—
It must be an energy policy in which British Coal and British miners have a central part to play in the provision of base load electricity during the decades ahead.
It is no good my right hon. Friend the President of the Board of Trade saying that there is no alternative. He must make it his task before the 90 days expire to come up with an alternative; he must set his Department the job of finding an alternative. If he fails to do so he will be selling short future generations and the security of Britain's energy supplies. He will be failing the Government and the Prime Minister. He will be letting down the nation. He will rekindle the anger and outrage that he has stirred up, and will lead the Government to defeat on the issue when we have the substantive vote. It is not only the 23,000 miners who have been granted a 90-day stay of execution; the same is true of the President of the Board of Trade.
I am grateful to be called in the debate, and I have promised my colleagues that I shall be brief.
I was anxious to speak in the debate as two of the 10 collieries that are to close are in my constituency: Houghton Main and Grimethorpe. I worked at Houghton Main for 26 years and I am familiar with its reserves. Those two collieries are linked, and many is the time that I have walked the two and a half miles underground to Grimethorpe colliery, so I am also familiar with its reserves.
The argument is not about reserves, but about losses. When I investigated the position at Grimethorpe colliery I found that it had made a profit in the past two years. In recent months it has produced coal at £1 a tonne cheaper than imported coal that the generating industry has attracted to this country.
Some four or five collieries have been closed in my constituency. The closure of a further two will mean an additional 2 per cent. on the already high unemployment figure. The Barnsley metropolitan authority has lost between 25,000 and 30,000 mining jobs in recent years. We have been concerned about that and have looked to the Government to assist us in rehabilitation. They have promised help once again. But our experience has been that any movement has come from the local authority in spite of the Government, whose standard spending assessment has always worked against the Barnsley local authority.
There have been many arguments in the House about the RECHAR money, designated to assist our district. We finally received a commitment, and central Government tried to take the credit for that allocation, which came from Europe. As yet, we have not had a penny of that, and I blame that delay on the Government. Therefore, it is easy to understand the cynicism that we feel about promises made about replacement jobs.
Grimethorpe colliery is profit making. Houghton Main colliery had some trouble a few months ago, but has now settled down and is making profits. The reason for the trouble was that the management insisted on throwing money down the drain on an area of coal that the local branch of the National Union of Mineworkers knew was a waste of money. If we are to have moratoriums and investigations, and if British Coal is to report to the Select Committee, will the conclusion be that the pit could have been profitable but the management persevered and lost it millions? There must be a detailed analysis that goes much wider than merely studying a broad spectrum of pits. I would not expect the colliery manager of any of the pits involved to say that it was his fault and he was sorry about the bad mining practices. We must make a deep and clinical analysis of the profit and loss.
I listened carefully to the President of the Board of Trade this afternoon and I still do not understand the position of the 10 named collieries—I do not know whether they are in or out of the review. The President's speech this afternoon tended to confuse me more. We are dubious about what he has said, as we have experience of previous reviews.
When the news was announced in my constituency that we were to lose Houghton Main and Grimethorpe collieries, there was shock, outrage and disbelief. Then the moratorium was announced and we could not honestly believe how the Minister or British Coal could have decided that 10 out of the 31 collieries would not be treated in the same way and would not have the same review or investigation.
One of the main problems that has faced Houghton Main and Grimethorpe has been the ever-moving targets. One week the staff were told that they were doing well if they had made a specific advance, and were given a pat on the back and told to go home and play. The next week a different target was put forward. I do not entirely blame British Coal for the moving targets, as I do not believe that it knew what was happening. It has been blackmailed by the generating industry with overseas coal and for too long it has not had proper answers. It has also been blackmailed due to the dumping of coal in Europe, about which it has complained to the European Commissioners. It has received no assistance from the British Government for the two to three years that the dumping has occurred.
The Government can do nothing about energy because they have neglected their responsibilities. They have sold off the power generators who are now dictating the terms. I do not expect PowerGen to be concerned about the state of the country. I expect its loyalty to be to its shareholders. What matters to it is its shareholders, not the balance of payments, who pays for unemployment and the loss of revenue through loss of taxes. It has no responsibility for those aspects, yet it dictates our energy policy.
I accuse the Government of having no say in this country's present energy policy. They have been happy to see our manufacturing base smashed. We have become the laughing stock of people all over the world who cannot believe that a country such as this, which is so rich in energy sources and indigenous fuels, has got itself into this mess.
I understand that the review will analyse what has been called the uneven playing field. However, I have already heard Ministers saying how much has been put into the industry. We have had to repay with interest a large chunk of capital investment, while the Government have made out that the money was a gift of assistance. However, a major slice of the money was used for redundancies, not to support the industry. We remain cynical and angry.
Whatever the review or the Government's amendment says, I cannot accept that the people who made the initial blunder in introducing such a policy in the way that they did will change their minds when they hear the results of the review. We are setting those same people up as judge, jury and executioner.
I do not expect Ministers to change their minds radically, but I hope sincerely that they will stand back and look at the overall impact on the economy. When they consider not only the number of jobs that are likely to be lost, but the effect on the rail and steel industries, the energy market, transport and local traders in my constituency, I hope that those Ministers do not remain sitting back. I hope that they will at least put the 10 pits alongside the other 21, and treat all 31 in the same way. I hope that they will consider the overall economic impact on the United Kingdom of their stupid decision.
There would be little point in using the short time available to me tonight to flagellate the Government further for the errors of judgment in last week's announcement. The situation has changed significantly over the past five days. I want tonight to be constructive and to make a number of suggestions to the Minister about the way ahead.
I speak as a Nottinghamshire Member of Parliament whose last pit closed shortly before the last general election. I want to express my gratitude to the President and the Secretary of State for Wales, to whom I spoke over the weekend. I fear that I called him out of his constituency surgery. I am grateful for the clear hearing that I received from both of them.
The Government have made it clear that they want to look again at these issues. I trust what the Government have said. I have five suggestions to make.
The first is that there is immense confusion over the relative prices of coal and gas. There is a real fear that gas is being wrongly favoured and that the treatment of written-down power stations that produce from coal is not correct.
As I understand it, the regulator has all the powers that he needs. Condition 5 of the licence granted to the regional electricity companies makes it clear that electricity must be produced
at the best effective price reasonably obtainable having regard to the sources available".
In a recent announcement the chief executive of Powergen, Ed Wallis, made it clear that
our portfolio of coal-fired plant is able to generate more cheaply than most of the independent gas-fired plant which is now threatening to displace it.
We need these matters urgently investigated by the regulator; and we need a report, to be issued rapidly.
In this country, unlike in the United States, the regional electricity companies can invest in gas projects and guarantee the offtake from them. In the United States that would be illegal. I hope that that will be considered too, because two can play at that game. If it is acceptable for the industry, why could not the Government, when they come to privatise the mining industry, include in that package the 40 per cent. stake that the Government hold in the generators? We need a level playing field in this area.
My second constructive point is that there are serious question marks hanging over the judgment and management skills of British Coal at the most senior level. I am not talking about area management; I have the greatest possible respect for people like John Longden who try to manage the Nottinghamshire coalfield. But there is little confidence in the negotiating skills at the top of British Coal. I am delighted that the Secretary of State has once again called in Boyd to advise him, and I know that an earlier Boyd report made a number of recommendations making it clear that British Coal is not well managed at the top.
We all accept in Nottinghamshire—I hope that we are realistic—that coal is under great pressure, and I accept that manpower will have to decline. But some of the old mines can be worked for two or three years by a relatively small number of miners—the coal comes out for practically nothing. These are the sort of management decisions that we need to examine.
We need to look at Richard Budge's suggestion, announced last night from his company RJB. I cannot understand why Calverton—not in my constituency but not far from the border—was in the list of pits originally proposed for closure. It sells about 70 per cent. of its coal to the private sector—70 per cent. does not go to the electricity industry. Obviously the pit should not be closed down; the 70 per cent. should be expanded to 100 per cent.
Some pits have access to huge reserves and it is clearly futile to close them. Perhaps they need to be mothballed, but certainly not shut. Above all, I urge the Government to use the expertise and advice of Malcolm Edwards. He is respected throughout the industry; he is a realistic friend of the coal industry; he is a keen privatiser; and he is an adviser to the Union of Democratic Mineworkers. The Secretary of State should see him urgently and hear what he has to say.
My third suggestion is that the Government follow the lead given by Commissioner Cardoso, who in his latest initiative said that coal capacity in Europe may need to be reduced. But he asked: why start with Britain—the lowest cost producer'? The German industry is contracting. Let us put flesh on the idea of the single market. British coal could be delivered to central Germany, including all transport costs, at a saving to the German economy of £40 per tonne. These are important matters relating to the single market, and I urge the Government to pursue that initiative.
Moreover, British Coal has launched an anti-dumping complaint which may have fallen foul of subsidiarity. Will the Government look into that again, and allow British Coal to pursue the complaint?
My fourth suggestion has to do with coal stocks, which are very large. They need to be. British Coal carries the whole strategic reserve. We cannot store hydro-electricity or nuclear power, gas, or very much oil, but we can store coal. At the moment British Coal is carrying 14 million tonnes, which is probably 4 million tonnes too much, and the generators are holding 33 million tonnes; but if, as we hear, the generators are seeking to run down 10 million tons in one year that would cause a massive distortion of the market. We need to be wary of temporary expediency affecting long-term strategic judgments about size.
In the House I have consistently opposed the arguments for imported coal. Half the coal that comes into this country through the ports is not necessary. 1 notice that the original plans which the generators had in respect of new port facilities—I voted against them in the House—are not proceeding at the moment, which is evidence that the economic case for imported coal has not been made.
My fifth constructive point is this. There will be similar problems in the nuclear industry unless we announce as soon as possible that the nuclear levy is to be dismantled between now and 1998. The facts are well known: if the same levy were available to the coal industry, coal could be delivered free of charge and still show a profit of between £10 and £15 a tonne. Bradwell, the old Magnox reactor, is being kept open until 1998 purely because of the levy. That is not a level playing field; it hopelessly distorts the market. We must dismantle the levy.
I want to make it clear that I am not starry-eyed about the coal industry—I understand the pressures that the industry is under. They are many and various. There has been a long-term contraction in the coal industry and that contraction will not end overnight. It will continue, and I accept that.
The emissions targets to which both parties signed up almost toll the bell for the industry. But our aim must be to give coal a fair deal. These matters must be handled sensitively, not in the manner of some 19th-century mill owner. I genuinely believe that the coal industry deserves better—none more so than the UDM, whose members have met every single productivity target set for them. They have done everything management has asked. They have negotiated for the industry—the NUM has not had a look-in in recent years. They ushered in modern, forward-looking, constructive trade union practices and sounded the death knell of a peculiarly unpleasant form of militant trade unionism—and saved this party and this country's bacon in 1984. Many of the UDM and their families paid a high personal price during the strike and the national contribution of Roy Lynk, one of the heroes of the 1980s, has been greatly underestimated.
In the public interest there should be 10-year contracts with the generators. That is what happens around the world wherever deep mines are worked except when pits have an arrangement with a captive power station. The UDM has earned the right to these contracts, not for reasons of sentiment but because of its record of reliability and on economic grounds.
These are five constructive suggestions. I invite the President and Lord Walker, who achieved remarkable success in regenerating Wales, to visit Nottinghamshire as soon as the plans for the East Midlands development office are further advanced. I want them both to come to Nottinghamshire to talk to local people, to those in the industry and to all the many bodies concerned about regeneration there.
I shall support the Government tonight. It would be churlish not to in view of the change in their position of the past five days. I believe that the review is real, and I and my constituents will be among the first people to contribute to it.
I intend to speak for less than 10 minutes even if the rule does not apply.
The hon. Member for Gedling (Mr. Mitchell) has done himself a disservice, as do other Tory Members who have enjoyed a great deal of publicity defending the coal communities, if they deny the words that they uttered a few days ago and go into the Lobby with the Government. Certainly there have been many promises, but many of the touches that the Government have applied to their policy in recent days have been cosmetic.
I tried to intervene in the Secretary of State's speech because I wanted to ask him whether, during the review, he intended to give licences to the gas-fired stations which are now in the planning process. I intended to ask whether, if the review revealed that an arrangement of great disadvantage to the electricity consumer applied, he would revoke the licences that he has already granted. I would have asked for a guarantee to the House that the legislative base upon which faulty licences were issued would be amended during this Session.
The right hon. Member for Selby (Mr. Alison) spoke about the splendid productivity at the Selby pits. Enormous productivity matching that at Selby has been achieved in many other collieries. The right hon. Gentleman failed to understand that even the most profitable pit is likely to disappear by the end of this century unless a different regime applies, because collieries will not have access to baseload electricity. If coal is to be allowed to work only on the margin of peak demand, no one will wish to work in collieries, because they will be at an appalling disadvantage.
Hon. Members who seek to defend the industry should pause before deciding to vote with the Government, because the Secretary of State joined in the rejoicing of some Conservative Members who spoke about the importation of coal from Colombia. That coal is mined by children in dangerous pits. I represent not only my constituency, which has been devastated by Government policies, but NACODS, the colliery association of underground officials who have made such an enormous contribution to mine safety. That contribution has enabled Britain to have a proud record, but apparently that record is not admired by some Conservative Members. Because of the success and safety record of British mines and mining technology, a considerable export market can be maintained.
It is time that Conservative Members started to consider the economy and the balance of payments deficit, because the fundamental weakness of the British economy is the failure to export. Sooner or later, the enormous trade deficit will have to be resolved or Britain will continue the decline which has marked the Conservative years. To write off the export potential of coal and mining engineering would be irresponsible. However, I have not detected any great concern about that in what the President of the Board of Trade and his colleagues have said.
The Secretary of State for Wales visited my area when he held another office and will remember the work carried out by David Trippier in securing, or attempting to secure, the future of the Dearne valley, which has been viciously assailed. In the last few weeks, the Environment Minister who was supposed to be caring for the Dearne valley has been replaced by an Under-Secretary of State for Social Security. That means that, instead of speaking to a Minister in the Department of the Environment, I have to speak to a Minister whose responsibility is social security. Does that mean that the Government have now written off my area, and that, although cosmetics have been applied to try to bring Tories into the Government lobby, we are not to have the sincere and serious review that an energy policy requires?
I have real reservations, and my questions about the licences need to be answered quickly, as do the questions posed by my hon. Friends. If the answers are not satisfactory—and so far they have not been—I hope that the hon. Members for Batley and Spen (Mrs. Peacock) and for Davyhulme (Mr. Churchill), who have been eager to secure publicity for their championing of the mining communities, will act with some consistency and vote with us.
We have heard much about the importance of jobs and communities in mining areas. Those matters are important, but I wish to speak about the jobs and communities which depend on gas-fired power stations. There are no coal mines in the county of Cleveland, nor does it have a coal-fired power station. It has a nuclear power station, and a gas-fired station is under construction.
Two important companies, ICI and British Steel, are desperate for cheap energy and jobs, and communities depend on those companies. The lobby of Parliament has been impressive in terms of the number of people who came to London and those who wore lapel badges in support of the coal industry. However, workers in the gas supply industry have families and mortgages and live in communities as well.
The gas supply industry is important. In parts of my constituency, unemployment is as high as in any of the mining areas. Gas will soon be delivered via the new CAT pipeline from the North sea into Teesside at Seal Sands. That represents a capital investment by Amoco of £500 million. That is important for the local economy, and jobs have been created not only because of the pipeline but because of the gas exploration platforms.
I shall not give way, because time is short.
Those two gas and oil exploration platforms were constructed in Scotland. Gas is already being piped ashore, and the Enron power station represents a commitment of about £1 billion of capital investment. Some 2,000 jobs in my area depend directly on the construction of that power station. Another gas-fired power station, the Neptune project, is on the drawing board. It is likely to be constructed and that will mean more than 2,000 construction jobs. The pipeline is delivering about 300 million cu ft of gas per day and has the capacity to bring to Teesside about 1,500 million cu ft of gas per day. That will have a dramatic effect, not only because direct jobs will be created in two new gas-fired power stations, but because some of the gas will be processed to produce propane, butane and naphtha.
The Opposition talk with vigour and determination about the balance of trade. Naphtha is used by companies such as ICI and BASF in Cleveland and is currently imported from Rotterdam. By 1996, Teesside will be able to export to Rotterdam gas derivatives such as propane and naphtha. I hope that all hon. Members agree that that industry is important to us. About 4,000 to 5,000 jobs depend upon it in my area, and just because the general election is over we cannot ignore the environment.
Gas-fired power stations produce less than half the CO2 emissions of coal-fired power stations that contribute to the greenhouse effect. Nitros oxides are crucial when it comes to protecting our environment, and these are key concerns. As I have said, industries in the north-east need to be competitive as a result of cheap energy. I have in mind ICI, BASF, British Steel, Nissan and British Alcan. Thousands are dependent on cheap energy.
Some say, "Listen, is there that demand? Is it really going to be cheaper?" Would companies be investing about £2.5 billion if they thought that the plants would not be effective? Would AMOLO be investing £500 million in a 250-mile pipeline out into the North sea if it were not to be cost-effective? Of course these projects will be effective.
In the north-east, I am second to none in acknowledging the part that the coal mining industry has played in the past. I do not deny that role. However, the strength of the north-east has always been its ability to look to the future. In the 1890s and the early 20th century, much of our wealth and prosperity depended on coal, but the prosperity of the region and of industry generally in the 1990s and early 21st century will depend upon gas, and that industry should have our support as well.
Entirely lacking from the Conservative party has been any awareness of the sense of public outrage that people could be treated as the President of the Board of Trade did when he announced the closure of 31 pits. Of course, individual Members may take a different view, but I say that it was callous and brutal. That treatment came from a party that prides itself upon a citizens charter and a classless society. That is why hundreds of thousands are marching in London today. The little seminar on gas prices does not get near what the real argument is all about.
All my right hon. and hon. Friends know that these events are part of a sustained attack upon the mining industry. It is taking place because the previous Prime Minister regarded the National Union of Mineworkers as the enemy within. That term was coined for that reason. It gives me huge pleasure that the Tory party threw out Thatcher and the miners re-elected Scargill. That man told the truth, and truth still has value in the politics of our society when all the lies, half truths and half promises about independent reviews are dismissed.
The President of the Board of Trade said that he agonised over the decision that was before him. He is not the one who will suffer agony if pits are closed. If he agonised, why did he not have a review during that process? If there had been a review, others could have submitted other views while his discussions took place.
I have a letter that came from the office of Cecil Parkinson when he was Energy Secretary. It is a response to someone who wrote from Derbyshire, and states that the privatisation of the electricity industry will have no effect on pit closures. Ministers have lied, lied and lied again about the mining industry. That is why people are so incensed.
Do not tell us that this is all about market forces. If those forces applied to the farming industry, half the farms in Britain would have closed years ago. We could get cheaper food from New Zealand and Australia. Of course, the Tory party depends on the farmers and so it supports them. I am not in favour of applying market forces to farms. It is not possible to close a farm one year and open it the following year. We all know that the miners have not received set-aside grants. They have not been given money to stop producing coal. That is the reality of the debate.
There was a preparedness to pay a great deal of money to the gamblers two weeks ago when so-called market forces were working on the currency. That, I think, has played a part in these matters.
I am intensely proud that I had a role to play in the energy policy of the Labour Government. That Government authorised the Selby project, as we authorised the Drax B coal-fired power station. We encouraged 42 million tonnes of extra capacity to be found. Selby was opened and there was an assisted burn scheme. We recognised that the then Central Electricity Generating Board needed a small grant to change the merit order of the power stations so that more coal could be burnt. We introduced earlier retirement for miners, something for which they had pressed for a long time. We then—[Interruption.] Closures took place after negotiation and agreement. They concentrated mainly on pit exhaustion and dangerous working. As the then Secretary of State, I offered the NUM a veto on all closures. I discovered that Australian coal had been imported on the instruction of the now Lord Walker when he was Secretary of State for Energy. When it arrived it was so expensive that the generating board sold it to France at a loss.
I shall not give way for one moment.
We require a re-examination of energy policy that brings fuel suppliers, fuel industries, customers and unions together. There was such a re-examination from 1976 onwards; the papers were published and the discussions were serious. When that process takes place it will be necessary to determine the objectives of the energy policy, and one of the objectives of the Labour Government was extremely simple. It was that everyone should have heat and light at home. That was not a bad energy policy objective. It was a recognition of the fact that in the end an energy policy is judged by whether people can get hold of energy.
It has been said, "If there is surplus coal, why not give it to pensioners?" That is a sensible argument. Coal could be supplied free of charge to the generators to pump it down the wire, as it were, in the form of cheap electricity. There are those who shake their heads in dissent, but that is an energy policy. It is one in which Conservative Members do not believe, because they believe in profit and not in people. That is what the argument is about.
We must think about imports and opencast mining.
I hope that the time taken by that point of order is taken into account, Madam Deputy Speaker. I am advancing a serious argument that has more in common with what those outside this place are thinking than with the little arguments that we have heard from Conservative Members.
It is necessary, of course, to consider opencast mining. The environment of a village is destroyed by stripping it, as it were, for opencast mining. We must have regard also to desulphurisation, assisted burn and winter fuel concessions. As many have said, how can we justify subsidy by way of the nuclear levy, a fuel that is three times as expensive as coal?
The House should not think that that for which I am arguing cannot be done. In 1945, Winston Churchill as Prime Minister, a distinguished predecessor, presented the Fuel and Power Act—I operated under it and so does the President of the Board of Trade—which, when enacted, charged the Secretary of State with the general duty of securing the effective and co-ordinated development of coal, petroleum and other mineral resources—fuel and power—in Great Britain. That is the statutory responsibility of the President of the Board of Trade. He is not merely a spectator of market forces. Indeed, in 1973 he was a member of a Government who introduced the Fuel and Electricity Control Act which bore on every fuel transaction in the country. When the right hon. Gentleman was a junior Minister he controlled the supply of fuel to the aircraft industry.
The result of tonight's Division will not determine the issue that is before us. If anyone thinks that it will, he or she is making a great mistake. In fact, the British public have been awakened to the realities of the mining industry and to the rotten philosophy of the 1980s. We were told that everything was about cash and that chartered accountants had to be brought in to tell us what to do. That is not what it is all about. The issue is whether our society puts people in a place of dignity and serves them or whether we hand over money to gamblers who create no wealth. Arthur Scargill has been rehabilitated more quickly than any man I have known. Within 24 hours, everyone knew that he was right. The miners certainly did.
What has happened—I warn the Government about this—is that after 10 years during which people took things that they should never have taken, there is a return of self confidence and hope. It was that sort of self confidence and hope that got Mandela out of prison and got the Berlin wall down. Next it will get the President of the Board of Trade out of his office in favour of a better society.
I have to advise the right hon. Member for Chesterfield (Mr. Benn) that the spectre of Arthur Scargill is one that would unite those on the Conservative Benches and our constituents as never before.
When the pit closure programme was announced last week a wave of anger swept over north Nottinghamshire such as I have never known before. In a time of deep recession that decision was brutal. I therefore called, together with other colleagues, for a moratorium for the sake of people's lives, their hopes and their aspirations. Until then, there had been no hope, no appeal, no reprieve. Therefore, I welcomed the decision to have a review and a moratorium on the closures. My immediate reaction was that they would give the pits a breathing space in which to prove themselves. I regret that that has not apparently proved acceptable to my constituents, but perhaps one can see why.
In my area of north Nottinghamshire—Opposition Members also represent that region—those closures, any closure, mean devastating unemployment in our travel-towork area. The pit closures mean that possibly up to an extra 20 per cent. of the local population will be unemployed in that travel-to-work area and 30 per cent. extra in the villages. I am articulating those concerns to the House tonight. There are 3,000 jobs in the industry and 6,000 ancillary jobs at risk. My constituents have said that I should look after their interests and express them in the House tonight.
It is a Member of Parliament's duty and task to look after his constituents. I recognise that even the potential closure of some of the pits, in such large numbers and even after a review, is unacceptable to my community. If I vote against the Government tonight, would I be acting in accordance with unacceptable pressure, or would I be acting in accordance with the wishes, and indeed instructions, of literally thousands of people outside who have asked that I should express a view in such a way?
I have never faced such a difficult decision on behalf of my constituents. I accept that I am not the only one with such a difficult decision, but perhaps with the number of people involved, the pressure on me is greater. Tonight I voice that anxiety to the House and I express the words of pressure that I received this afternoon and continue to receive tonight.
My constituents, of all political parties and at all levels of society, have told me that they require a full and independent—I stress the word—inquiry, which must include the 10 pits which are subject to closure. I accept what my right hon. Friend the Secretary of State has said about the problem with some of those pits which are unprofitable. However, the hon. Member for Ashfield (Mr. Hoon) has told me that one of those pits, Silverhill, which is next door to my constituency, has been profitable over the years. We are considering the future of the coal industry and the Government have said that we will have a review of it, but it will exclude one large pit in my area which, on the figures given, is profitable.
A difficult decision must be made. It is not the viability of the Silverhill colliery as such that is really at issue, but all the pits. If we are to have a review it must be a complete one.
I have asked my right hon. Friend the Secretary of State to ensure that during the review it is business as usual. I have put to him two or three specific examples about how the work force felt that that might not happen. In fairness to my right hon. Friend and my hon. Friend the Minister, I should say that I have been given absolute assurances about those anxieties. I have referred those assurances to my constituents, but I received a fax today from one firm in my constituency, Northern Specialised Site Services Limited, which said:
Development work at Bevercotes"—
that is in my constituency—
like other threatened collieries has been stopped".
I accept from my right hon. Friend that he has given instructions that that work will recommence, but, as I said earlier, I must recognise the fears of my constituents. Until they actually see that work recommencing, they will not believe that that will happen. I repeat that I am not casting any slur on my right hon. Friend and I recognise the considerable steps that he has taken.
For the avoidance of doubt by my hon. Friend and his constituents, may I repeat that development work will continue at Bevercotes. If he or his constituents come to me with clear evidence or statements to show that development work is not continuing, I will personally instruct the chairman of British Coal that that development work should recommence.
Does the hon. Gentleman agree that all of us whose constituencies are home to the collieries in the 10 areas chosen for closure by the Government share the views of his constituents? If there is a case for development work to continue in the hon. Gentleman's colliery, surely exactly the same argument applies to each of the other nine collieries, including Trentham in the north Staffordshire coalfield. I am grateful to the hon. Gentleman for giving us the benefit of his views, but whatever assurances he has been given by the Minister, he should note that, last week, an all-party delegation from north Staffordshire, including the Bishop of Stafford, visited the Department of Trade and Industry and we were not given such assurances. I want the Minister to give me such an assurance tonight.
The hon. Lady intervened to make a specific point, to which I do not think she expected me to respond, but no doubt it has been noted elsewhere.
The review must start with the most recent report of the Select Committee on Energy which concluded that electricity consumers had nothing to gain from a hasty rundown of the coal industry. The review must then look at some of the industrial practices in our coal mines, all of which have a bearing on profitability.
I make no criticism of trade union practices, but ours seems to be the only country that works only a full 15 shifts out of an available 21 in any one week. The first shift on a Monday therefore spend a lot of time making their working conditions safe, whereas if 21 shifts were worked, including at the weekend, mines could be much more profitable.
Why is Britain the only country that throws away 50 per cent. of the material that is brought to the surface, in the form of dust and rubble that is put on spoil tips? Other countries are much more selective in the material that they extract. I repeat that only a wide-ranging, independent review will do.
Does not the hon. Gentleman agree that the review should include imports? Should not the Minister for Energy get on the phone to the Ministry of Defence, which in the next day or two is to announce the purchase of 300,000 tonnes of imported coal for Aldermaston, and 200,000 for Bicester? The British Government try to shroud themselves in the British flag while Russian coal is used to power the Aldermaston nuclear defence station. That is a pity and a shame.
Order. Although I appreciate the strength of feeling that exists, I remind right hon. and hon. Members that interventions must be kept short—particularly in a debate of this nature.
I am glad that a recent announcement by my right hon. Friend the President of the Board of Trade indicated that if British Coal cannot continue to work a pit economically, the private sector could become involved. That should have been done long ago. If British Coal cannot support a particular colliery, that is no reason to say that it can no longer operate. At present, British Coal would rather close a mine than allow anyone else to work it, and that must be wrong. I am glad that steps may be taken to make changes.
There are opportunities for private sector involvement in coal mining before it is run down and collieries are closed. There would be cost savings, greater competition, and an erosion in the level of imported coal. The private sector has a place in using its skill, technology and risk capital to revitalise the industry. Closures now would make it irrecoverable.
I ask for an independent review before our areas are devastated and the taxpayer has to foot a £1,000 million bill for social security and other payments. Nottinghamshire miners brought common sense, sanity and moderation to the ugly situation that arose in 1984, and I join other right hon. and hon. Members in paying tribute to Roy Lynk of the Union of Democratic Mineworkers for his role in that. Nottinghamshire miners did so often at great personal and family cost, and that is still continuing. Now they ask for common sense, sanity and moderation—and we owe them that.
I must first declare my interest as secretary of the parliamentary miners group, and as someone who worked down the pits for 21 years and is sponsored by the National Union of Mineworkers. I have a badge to prove it, and unlike Roy Lynk I am not sending it back. I am proud of my NUM affiliations.
I am concerned about this debate not for parochial reasons but because if the proposals are pursued, every pit in Derbyshire will be wiped out by the end of the current financial year. Shirebrook, Bolsover, Markham and High Moor will all go.
I took part in a magnificent rally today—and this time the march took a different route. Instead of going towards Trafalgar square, we marched around Chelsea and Kensington—and we captured Chelsea and Kensington for Labour today. I have never seen so many people hanging out of windows, including those at the Kensington Gardens hotel—and, by Christ! is it posh. The people were cheering us on—"Good old Arthur." It was the return of the prodigal son, except that this time we will not kill the fatted calf because half of us are vegetarians. My right hon. Friend the Member for Chesterfield (Mr. Benn) is anyway.
It was an exhilarating experience. Normally, the odd person makes a challenge or shouts an insult—but not today. As we passed the end of the road in which Princess Di lives in Kensington palace, I am certain that I saw her there with a bucket.
A catalyst has been at work in the past few days and has overwhelmed us all. We did not appreciate the extent to which the closures had got up the nose of many Tories and others of no political affiliation. We have all been swamped with letters from our constituents. The Government might have cobbled something together over the past 72 hours, but it will not work. The public will turn this Government over—and whether that happens this week, next month, or next year, you can bet your bottom dollar that that political sea change will make sure that this is the last run for home.
We all knew that the poll tax would produce a lot of support for the Labour movement, but we did not expect so much over this issue. It is not a case of people holding a romantic view of miners. They have always done that, and I am not agin it. But unlike 1984, many people—Tories as well—now acknowledge that there is an economic argument to answer. There was in 1984, but we did not convince the public. This time, they have grasped it. The other day, I was on a bus from Chesterfield to Bolsover and heard some 11-year-old kids say, "Coal is 30 per cent. cheaper than gas, and 350 per cent. cheaper than nuclear." They knew. That is why I am convinced that the case is for real.
I will not troop through all the arguments, but it is common sense that if the price of industrial coal has not increased for six years, it must be getting close to being competitive. Let us also get rid of the nonsense about a £18,000 million subsidy. When such a claim comes from the mouths of the people who make it, it is bound to be a lie. There is no such thing as an £18,000 million subsidy. British Coal repaid £574 million to the taxpayer last year in interest on the money that it borrowed way back to pay for investment and redundancies. The nonsense about a £18,000 million subsidy has nothing to do with the real arithmetic.
Today, we are quids in. Everyone knows that after devaluation of between 12 per cent. and 15 per cent., British coal can compete with many imported coals. We thought that we might be able to do that some years ago, but now we know that is true. We should be having an export drive—selling coal to the Common Market. Where is the level playing field when German coal is coming into Britain at £110 a tonne? We should be selling them our coal, which after Black Wednesday is about £37 a tonne.
What is all this talk about money? Around £10 billion went down the drain on Black Wednesday. That would provide money for the miners. It would give every single miner currently employed by the industry money for 10 years—and there would be money for the pensioners and a bit for the health service as well.
A bit of a change has taken place. I think that we are on to something big, politically. It happens every so often. I have never believed in the idea that you are going to win every time you wake up in the morning, but sometimes things turn full circle. Nelson Mandela had to wait 27 years before that happened. The last time that we experienced such a change in the political and economic landscape was in the early 1970s; as a result, the Tory Government of the day had to put the Industrial Relations Act on to the back burner, and they had to settle with the miners in 1972. It finished with their being kicked out of office in 1974. History will not exactly repeat itself in this instance, but I think that it will come very close to doing so.
Let us put something else on to the agenda. It is not just a question of the miners; 3.5 million are without jobs. People will be living in poverty this winter, and there are pensioners who could do with some of the stocked coal to keep warm. The Government should use that coal instead of talking about the £100 million a month that it will cost to stock it.
What else is going to happen this winter? The Government are up to their neck in it economically, and, as a result, public expenditure cuts of about £14 billion are likely to be made. It looks as though there will be a pay freeze, or wage cuts, for millions of public-sector workers. We shall go into the autumn and the winter with more than just a small army from the NUM; millions of other people will be involved, right across the trade union and labour movement.
Make no mistake: the Government had better watch out. Things are going to change. The 1980s were miserable; the retreat has gone on for too long. I cannot wait to see the change. The 1990s have put socialism back on the agenda. They have helped us a little—and by Christ, we are going to see the results.
We have heard a traditionally enthusiastic, if somewhat unrealistic, speech from the hon. Member for Bolsover (Mr. Skinner), and we have all thoroughly enjoyed it. What would have happened if this Government had closed down as many mines as the Government of which he was part when they were last in office? It was uncharacteristically modest of the hon. Gentleman to suggest that, when he walked past the Royal Garden hotel, he was less of an attraction than Arthur Scargill. Perhaps we shall see more of that modesty in the future: if so, it will be welcomed by the whole House.
On Monday, I had quite made up my mind to vote with the Opposition, against the Government. [Interruption.] Hear me out. I was appalled at the way in which the Government were proposing to treat whole communities. I come from the Royal Forest of Dean, which is a former coal-mining area, and I have seen at first hand how the transition can be made from a community that is dependent on a single industry to one that is much more broadly and securely based. It takes time, however.
Years ago, when the mines in the Forest of Dean began to be run down, Rank Xerox was in the process of development and gave alternative employment to those who no longer worked in the mines. Then, in the early 1980s, Rank Xerox wanted to reduce its workforce substantially, from over 5,000 to just over 1,000. That, however, was done piecemeal: Rank Xerox invested heavily in small workshops and other facilities, so that its ex-employees could either create work for themselves or find alternative jobs. The initiative was firmly backed by the Forest of Dean district council, led by the late Arthur Cooper, who—with others—set about developing small industrial estates in the district. With the council's help, I persuaded the Government to make the Forest of Dean an assisted area. The transformation has been a great success, but it has taken time: such action must be taken gradually.
It was the lack of time, and the indecent haste with which the pit closures were proposed, that turned me—along with many of my constituents—against the Government's initial proposals. The letters of protest from my constituency have had to be weighed rather than counted, because there are so many. It is not that the people of the Forest of Dean want to support inefficient pits or an outdated mechanism; they were concerned about the way in which the Government proposed to treat whole communities.
I am very pleased that my right hon. Friend the President of the Board of Trade has now changed his mind, and has agreed to a full and open review to keep all the interested parties abreast of what is going on. I am glad that he has also agreed to bring the results of his inquiry back to the House in January, in the form of a White Paper.
I believe that it takes a strong man to admit that he was wrong, and to do something to put matters right. My right hon. Friend the President of the Board of Trade has done just that, and, rather than cursing him, we should give credit where credit is due. He has seen the error of his ways, and has made an effort to remedy the position. I thank him for initiating a review.
The coal industry now has a chance to prove its case, and we, who do not know the details, have an opportunity to learn the full truth behind the allegations about cheap German coal, price rigging, the running out of our gas supplies and the role of nuclear power. Nothing is to be hidden; nothing is to be done behind closed doors. This is the first-class outcome of what was a first-class blunder.
I spoke earlier about the success of the industrial development of the Forest of Dean, and the way in which it has rebuilt hope. In the heat of today's debate, however, it is important to remember that developing businesses need cheap and reliable energy. We must not lose sight of that. I have observed it at first hand in another industry, in my capacity as parliamentary adviser to the British Scrap Federation. [Interruption.] Hon. Members may snigger, but the industry is very important to this country. It does a great deal to preserve the environment, and to save energy costs.
In the course of my duties this summer, I had occasion to visit a gigantic steel works in Rotherham. Opposition Members may know of Rotherham Engineering Steels, whose entire feed stock is scrap metal. The cost of electricity is one of the plant's major production costs. Its annual electricity bill currently runs at £42 million, and the cost per kilowatt hour is 3.4p. In Holland the cost would be 2.2p; in France 2.3p; in Germany, 2.9p. Most of those prices are one third lower than the United Kingdom price. That high energy cost adds about £14 million a year to the running costs of Rotherham Engineering Steels.
High energy costs disadvantage manufacturing industry in this country: we should not forget that. We cannot go on indemnifying home-mined coal when it cannot be burnt at home or sold abroad. The right hon. Member for Chesterfield (Mr. Benn) made that point. The same applies to the farmers: they cannot go on producing cereals that cannot be eaten in this country or sold abroad, and they are gradually being run down. The agriculture industry is gradually changing its ways—but such things take time.
Let me emphaise that today's debate is about people and their future, and about options. That is why I welcome the proposed wide-ranging review and the Select Committee's inquiry into the coal industry, which will enable us all to understand the pros and cons and plan the way forward.
I wonder whether there is any point in asking for voluntary redundancies throughout the coal industry at this time, so that when the review is over those who wish to remain in the industry but who are currently attached to unprofitable pits can be moved to more profitable ones and have a successful career underground. The economic argument for cheap energy remains unassailable but today the need, above all, is for care and understanding and a new opportunity for those who are no longer required in the mining industry. That care and attention has been applied before to the rundown of pits in south Wales. It will be done again. There is nobody better qualified than Lord Walker to ensure that the job is done properly. I am very pleased that he has taken the job.
In view of the changes that have taken place since Monday, I am happy today to give the benefit of the doubt to the Government and to vote in favour of their amendment so that everybody can take a fresh look at the facts, come back here in January and discuss the White Paper.
My constituency is not a coal mining area. It lies at the centre of Birmingham—what used to be the heart of manufacturing industry in this country. For 36 years the constituency was represented by Denis Howell, who has now, rightly, been elevated to another place.
I am speaking tonight because I wish to point out a few facts. Unemployment stands at 74,000 in Birmingham. Seventeen per cent. of the work force in the city are unemployed. Four out of 10 people in Birmingham have been jobless for more than 12 months. In my constituency, 26 per cent. of the working population are unemployed.
I state those facts because I wish the House and, in particular, my colleagues who represent mining constituencies to know that my constituents know what it is like to experience long-term unemployment—an experience which, I fear, will be shared by many people in Nottinghamshire, Derbyshire and Yorkshire in the very near future.
I also mention these facts because the impact of the closure of these pits will be felt not just in the mining communities. More than 30,000 jobs will most certainly be lost in the mining communities, but three or four times that number of jobs will be lost in the many firms that supply the mining industry. Many of those firms come from Birmingham. Many of those jobs are in the west midlands.
I know of firms in Birmingham that supply cable belts and winding ropes to the mining industry. They are not small contracts; they run into many hundreds of thousands of pounds. What is more, these firms export winding belts and cables. They need a secure base in this country. The closure of the 10 pits means that many of these firms will have to lay off workers and that a number of them will go out of business. The exports that those firms contribute to the balance of payments will be lost to this country.
The question that my constituents and the people of Birmingham ask is, what is the justification for the carnage that was announced by the Government last week? We are told a lot about the dash for gas and that it will result in lower electricity prices. I have heard nothing during the last seven days to convince me that that argument is proven—that there will be lower electricity prices which will benefit the consumer. What I can believe is that the electricity companies will make larger profits. Nobody has yet produced figures, however, that convince me that this country's consumers will benefit from the dash for gas.
Even if the economic argument for the dash for gas were proven, there are many other important factors that need to be taken into account. We all know that in this country there are 200 years' worth of good-quality coal available for the use of this country. At best, we know that there might—and I repeat "might"—be a 50-year supply of natural gas. We all know, too, that the nuclear power industry is beset by problems. Nobody in his right mind would base a national energy policy on the use, solely and simply, of nuclear power. Furthermore, we know that this country has a limited amount of oil reserves, but, once again, nobody will base the basic energy needs of this country on oil. Are we, therefore, really acting sensibly by abandoning Britain's rich coal seams for ever? Once the coal mines are closed, those seams will never be used again, those mines will never be used again.
What will happen if the Government's projections for gas are proved wrong? Shall we end up with the country's basic energy needs having to be accounted for by imported gas and imported coal? Above all, what will future generations think of us here today if we make them, and their grandchildren, totally dependent on other countries for this country's basic energy needs? I am sure that I do not need to remind hon. Members of the many conflicts that have taken place in the world over energy resources. That is what the Gulf war was about. Nor do I need to remind hon. Members of what happened in the early 1970s when this country was held to ransom by an oil cartel, the Organisation of Petroleum Exporting Countries. Do we really want to place ourselves in a position where we can be held to ransom in the future over this country's basic energy resources and energy needs?
Even if there were a justifiable economic argument for the dash for gas, there surely has to be an even more important consideration—the community and social argument. Closure of these mines will destroy whole communities. There is no prospect whatsoever, whatever the Minister may say, that in the middle of a massive slump new industries will be brought into those communities. Thousands of redundant miners will not suddenly become thrusting, entrepreneurial business men, setting up their own businesses. It will not happen. What will happen is that those communities will wither and die. They will die as their coal resources die.
What will happen then? Hon. Members who have served as local councillors know what happens when communities die. Vast amounts of money will not go into council coffers and the Government will lose huge amounts in taxes and national insurance contributions.
Tonight, the hon. Member for Davyhulme (Mr. Churchill) openly said that he asked the Minister for a cost-benefit analysis of the closures. The Minister's answer was that one had not been carried out. The Government cannot tell the British people how much the closures will cost. The unofficial figure is £1.4 billion. The question that I have to ask is, why? That is what my constituents are asking. What is it all about? It is about figures on a balance sheet. It is about accountants drawing up a profit and loss account and deciding that, as loss wins, communities must go by the board. A civilised society cannot be run on the basis of accountants' profit and loss accounts.
Why did the Government reach this decision? I believe that the answer is to be found in the way in which it was done: "Three days' notice, and then your jobs are gone. Do not say anything and do not complain or your redundancy pay might be cut." That was brutal, heartless, uncaring and illegal.
I am not alone in believing that the roots of the Government's decision go back not five or 10 years but to what happened in 1974 right in the middle of my constituency at the Saltley gas works. During the miners' strike, an unknown NUM official from Yorkshire and a large number of Yorkshire miners picketed the works and prevented coal from being delivered, which resulted in the defeat of the Tory Government at the general election. I believe, as do many others, that what happened in 1974 figured very much in the minds of Ministers when they made their decision last week. The decision was not about economics or whether coal is better than gas but about revenge—the Tory party exacting revenge on the miners of this country for the Government's defeat in 1974. All hon. Members who want to see a future for the coal industry must support the Opposition motion.
It is an honour to follow the maiden speech of the hon. Member for Birmingham, Small Heath (Mr. Godsiff). I congratulate him on choosing an important debate in which to make it. I appreciate that I have only a few minutes in which to speak, having sat here for almost seven hours waiting to do so.
When the announcement was made by my right hon. Friend the President of the Board of Trade, I was shocked. In fact, I was ashamed that a Conservative Government had made it. Not only did it have an effect on me, but within 10 minutes almost all my constituency was clamouring to come into my office or was ringing. Since then, my telephone and fax machine have not stopped working and I have received hundreds of letters, not only from my constituents but from the great British people, who have risen up because of the decision.
As well as being a Member of this House, I am president of Yorkshire Conservative Trade Unionists. Having worked for so long in the area, I know that, as the hon. Member for Rother Valley (Mr. Barron) said, they feel that we have let them down badly.
I must acknowledge the great step forward that my right hon. Friend the President of the Board of Trade has taken in the past week, which I welcome. It is a serious step forward along the route that I asked him to take. I welcome the review and the fact that 21 pits are included, but, as my right hon. Friend knows very well, I do not welcome the fact that he was unable to include the other 10. The wider public outside are always concerned to ensure a sense of fair play.
I take the economic arguments. Representing a manufacturing area, and having fought for the textile industry for 10 years, I know about imports and that businesses must be competitive, but, having taken the decision to have the review, why did not my right hon. Friend include the other 10 pits? Had he done so, he would have had the backing of the House and of the country. We are talking not about 30,000 jobs but about 100,000.
We have heard some hon. Members say that the argument is about revenge and about trade unions. It is not; it is about people. Our industries and our communities are always made up of people. We cannot take the heart out of communities without causing misery, devastation and worry for many of those families. Of course, there is always rationalisation in industry, but does it all have to involve such huge numbers, in such a way that whole pit villages and mining communities disappear altogether'?
I must say a few words about a lonely man sitting at the bottom of a pit shaft. He must really feel that he has let his members down—and they feel that he has let them down. But he must also feel that the Government have let him down. That man helped to keep the lights on in 1984 and 1985—perhaps against the advice of many people who talked to him. He took a band of men with him, and they kept this country afloat and alight. We owe him a much greater debt of gratitude, and I hope that we find a better way to reward that man for his eight years' work—I hope that he is listening.
I do not want to see our country held to ransom on energy policy in the future. I should like to think that in the years to come, when the history of this period is written, the Conservative Government will not be seen to have abandoned the miners and this country's energy policy. I would not wish to see myself depicted as having abandoned those miners and the whole coal industry, either. I regret to have to say to my right hon. Friend the President of the Board of Trade that I cannot support him.
I have been reminded by one of my hon. Friends that in the Betws drift mine there is a famous Peacock vein of anthracite coal. We hope that the Peacock vein will survive, just as we hope that the hon. Member for Batley and Spen (Mrs. Peacock) will survive after she has joined us in the Lobby tonight. I hope, too, that she will not be alone in joining us there.
We have heard several fine speeches tonight. I congratulate my hon. Friend the Member for Birmingham, Small Heath (Mr. Godsiff) on his maiden speech. We hope that in the years that lie ahead he will be able to participate in the pertinent and concise way that he has tonight. We have also heard other speeches from Opposition Members—
In a moment.
We have heard several speeches from those of my hon. Friends who, before coming to the House, spent their lives in the mining industry. They spoke movingly about the collieries in which they have served. From their experience both at work and in the service of their constituencies they know of the problems facing the condemned 10 pits. Indeed, my hon. Friends the Members for Barnsley, East (Mr. Patchett), for Easington (Mr. Cummings), for Clydesdale (Mr. Hood), for Rother Valley (Mr. Barron) and for Bolsover (Mr. Skinner) all spoke with great authority on the unjustified choice made between the condemned 10 pits and the other 21.
My hon. Friends drew attention to the fact that the debate has become the political fault line of the new Session of Parliament. Almost prematurely—certainly far earlier than we expected—the debate has brought up the whole question of how this country should be run.
That is not a new question; its genesis lies in the previous Parliament. It all goes back to the nature of the privatisations of gas and electricity, and especially to the regional electricity companies' ability both to distribute power and to own shares in the gas-fired production. We can pick over the bones to try to establish whether that was the intention of the original legislation, but the consequence has certainly been that the RECs can both generate and distribute electricity. The relationship is not only dubious but questionable in that those companies have sizeable shares in the new power stations. If they have to pay an increased charge for gas-fired electricity, that can be passed on to their monopoly customers. They have no choice. What the gas-fired generators charge can be passed on to individuals and can be reflected beneficially in the balance sheets of the companies to which I have referred.
More importantly, the Government's protector of the public interest—the regulator—seems to be supine and paralysed. He is hiding behind the inaccessibility of evidence saying that he does not have the evidence upon which to act or make recommendations. If he does not act quickly, the exercise will be academic because the collieries will not exist and the future of our mining industry will be thrown into doubt.
We have been along this road before. Hon. Members on both sides of the House have referred to past oil prices and the sensitivity of this country to oil price rises. Reference has been made to the effects of political instability and in recent days we saw once again the impact of the variance in the rate of exchange.
We saw what happened when oil prices changed in the 1970s and 1980s. Let us not forget that gas prices are linked inextricably to oil prices and the two phenomena that occurred in the past could well be repeated. Some hon. Members have tried to lecture the Opposition about the comparative records of Governments in respect of redundancies. We have heard about the willingness of the Labour Government to introduce redundancies and pit closures. My right hon. Friend the Member for Chesterfield (Mr. Benn) explained the manner in which he conducted many of the closures when he had responsibility for them.
Over the past few days, we have also heard about the record of the 1960s. It is worth placing on the record the fact that between 1960 and 1970 there were 300,000 voluntary redundancies. Between 1960 and 1964 under Conservative rule, there were 114,000 redundancies. Between 1964 and 1970 there were 186,000 redundancies. That works out at 28,500 a year under the Conservatives and 31,000 under Labour.
There is little to choose between the two. Certainly, there is little to choose between the two when we take account of the unemployment levels prevalent in the 1960s when the people who lost their jobs had an opportunity to go to other employment. They were given the chance of new work. During that period, both Labour and Conservative Governments were prepared to participate in and pursue energetic regional policies.
It is significant that it was the Macmillan Government who facilitated the construction of the Ravenscraig plant in Lanarkshire to create work for the miners who lost their jobs when the Lanarkshire coalfield closed. It is significant that the present Conservative Government have merely facilitated the closure of Ravenscraig and the decline of manufacturing industry in that part of Scotland.
We will no doubt receive promises and Government initiatives, task forces and visits from Prime Ministers. Some jobs will be created. Nevertheless, there is a feeling throughout the country that too little is taking place far too late. Certainly, the experience that I have instanced in respect of Ravenscraig is mirrored throughout the country. There is a profound feeling that the tidal wave of redundancies and closures must stop.
When the first rumours of pit closures emerged, the Government assumed that they would be received by the people in the way in which other lay-offs have been received. Somehow people would think, "Bad luck, but thank God it's not me." Only when the scale of the redundancies and their impact on whole swathes of the country became apparent did our people realise that enough was enough.
Conservative Members have referred to their mailbags, interruptions and demonstrations that they have had at their surgeries. They realise that people in Conservative constituences know that what is happening in mining areas will be happening in their areas before too long unless something is done about it.
When one industry—the mining industry—represents the sole source of employment for an area, it becomes all too clear how fallacious and criminally wrong was the Thatcherite view that there is no such thing as a community, only individuals and families. It is exactly because miners and their families make up what we know to be coalfield communities that public indignation rose to such levels. People became aware that not only the 30,000 British Coal employees but the 3,000 to 4,000 coal workers who are employed by the private contractors who drive the roads under the mines to facilitate the winning of coal will lose their jobs. About 72,000 people are employed by members of the associated British mining equipment companies. It is suggested that, pro rata, for every 1,000 jobs lost in coal mining another 600 will be lost elsewhere. The hon. Member for Davyhulme (Mr. Churchill) suggested that 100,000 people will be affected, costing the Exchequer £1.25 billion per annum in lost tax, in social security and in unemployment benefits. On top of that there will be nearly £1.2 billion in redundancy payments.
The impact on areas where mining is the sole source of employment will be almost incalculable. What the Government—
I am sorry to interrupt the hon. Gentleman, but there is now a buzz of conversation, which is discourteous to the hon. Gentleman who has the floor. I ask the House to be very much quieter.
The Government have not realised that there is tremendous public respect and admiration for miners and for mining communities. In 1972 the public recognised that the miners had a case, and in 1974 the British public threw out the Tory Government who sought to make the miners dispute a pretext for the general election. In 1984, almost perversely, the British public backed the miners in two ways. One section supported the NUM in its valiant struggle to defend jobs and communities from the threat which tragically became the reality of closure and contraction, while the other section of the public fought miners who refused to strike and carried on working. But none of those who wanted to see the mining industry destroyed and none of those who supported the miners wanted the social and economic devastation which last week's statement unveiled. Faced with an outburst of public feeling on such a scale, it takes a monumentally inept Government to embark on such a course of action.
It is perhaps unfair to blame the whole Government. After all, it was only the magnificent seven who made the decision, but the magnificent seven, like their Japanese forebears, the seven samurai, were supposed to defend villages against tyrannical oppression. The Tory Government make the job of the magnificent seven to act as plundering vandals laying waste to villages, in much the same way as the United States general justified laying to waste a Vietnamese village on the basis that that was the only way in which the village could be saved.
By closing 27 mines British Coal would be left with 21 pits, four of which would be put on a care and maintenance basis, and there would be 17 pits producing coal. The output from the 17 pits will be 31.5 million tonnes in 1993–94 and 29 million tonnes in 1994–95. Output will not be 40 million tonnes because 11 million tonnes will be accounted for by coal which is already in the coal stocks. The Secretary of State for Wales might care to tell the House how, in 1994-–95, we will achieve 2.5 million fewer tonnes of production. Will that come from an additional round of pit closures? If so, which other collieries will be closed? I say that not in a frivolous way; I speak as the hon. Member who has the Longannet mine in his constituency. It was announced last week that another report had suggested that—
Something will have to be done about spurious points of order. I hope that the Chair—[Interruption.] Make no mistake about it: both sides of the House are using spurious points of order as a means of interrupting debate and spoiling the flow of discussion. That is something that must be considered. The inept interruption of the hon. Member for Ayr (Mr. Gallie) suggests that something must be done quickly.
There is a distinct possibility that in 1994–95 the size of the coal industry will be reduced further to accommodate the fall in production of 2.5 million tonnes that is anticipated between now and that time. There has been a drop in morale and production at the mine in my constituency, which was mentioned earlier as one of the possible candidates for closure. When people recognise that closures are taking place, they immediately feel vulnerable to a possible further round of closures. I urge the Secretary of State to clarify the position this evening.
We are not here tonight solely to talk about which mines should or should not be closed; we are talking about whether it is necessary for coal production in Britain to fall from 65 million tonnes to 31 million tonnes. Why have certain collieries been designated as running at a loss when we know that in recent years about 35 collieries have gone from loss to profit within 12 months? We also know that five of the 10 collieries that are on the hit list are in that category. It is suggested that six out of the 10 collieries are making a profit. There is no question of their being involved in making a loss.
It has been suggested by Lord Wakeham in the other place that an inquiry should be held to consider the future of the industry and the reduction in the size of the coal take. In the past few days we have seen the politics of the rolling statement. A little more has been disclosed in every discussion, every television programme, and every parliamentary speech. Yesterday, Lord Wakeham identified six points. He said that each colliery should be examined to see whether a case for closure could be sustained. We want to ensure that not just the 21 collieries but the other 10 are included in such an examination.
It has already been suggested today that Trentham is on one list and may go into the other. If that is good enough for Trentham, it is good enough for the other nine. We also want guarantees that, if the colliery review procedure is carried out in respect of the 10, they will not be disadvantaged by the failure to invest. We have had assurances for the 20, but we have not had assurances for the other 10. We need those assurances if the collieries are to have a future.
I confirm beyond any question of doubt that exactly the same comments I made about Trentham apply to the other nine. It is the responsibility of the Coal Board to conduct its statutory consultation. lf, as a result of that consultation, it is decided that any one or all of the 10 should continue, the Coal Board must preserve those pits during the consultation so that they can continue to exist.
The President of the Board of Trade has not cleared up the matter to everyone's satisfaction. There is a simple way to do so. He could again intervene with British Coal, as he has done during the past two days, and require all 31 pits to be treated equally, so that throughout the British coalfield there will be a sense that justice is being done.
I am grateful to the hon. Member for giving way again in limited time. I have spoken to the chairman of British Coal—the hon. Gentleman may call that intervening—to establish that it is British Coal's responsibility to keep open the option that, if consultation provides such a conclusion, each or all of the 10 pits may continue in existence. I have also agreed with the chairman of British Coal that development will be kept going at the other 21 pits during the review so as not to prejudice their continued operation in any way.
I think that that tells us that there will be o development in the 10 pits, but that there may be in the other 21.
During the debate we have heard instances of miners being sent home from collieries—the right hon. Gentleman would have heard them if he had been present. That is not the way to keep a level playing field for the condemned 10, and until he can give us an assurance that he will intervene in that matter we shall not be prepared to believe what he tells us.
That is obviously a critical issue. As regards the 10 pits, it is necessary for British Coal to take what measures are appropriate during the statutory consultations to maintain viably the option for them to continue. That does not mean that they will be operating at full production during the statutory period, but that British Coal must be able to ensure that the option to continue exists at the end of the 90 days.
Will my hon. Friend seek clarification of which 90-day review period is under discussion? As I understand it, the 90-day review period is the statutory consultation period for redundancy under the employment protection legislation. It has nothing to do with the future of the colliery or with the profitability, or lack of it, of the pits. The other review procedure is the independent voluntary review established after the 1985 strike—it is voluntary and it is up to both sides to agree to enter that procedure.
I am grateful to my hon. Friend, as that is a valid question. There is confusion. There are two 90-day procedures and we are not clear which of the two is being applied. It is fair enough if we are saying that there is a review procedure which is totally independent of the redundancy payment requirements, but that matter should be clarified during the right hon. Gentleman's winding-up speech—[HON. MEMBERS: "Now."].
It is the statutory period under the employment legislation—[HON. MEMBERS: "Oh!"]. But the matter of concern to the House is that the option to continue those pits in operation is preserved.
The situation is now clear. The President of the Board of Trade, probably inadvertently, misled the House this afternoon by confusing the statutory redundancy procedures with the review procedure, which was arrived at after 1985. Those of us who have been involved in collieries where the review procedure has been brought into play know from bitter experience that it is very difficult to win an argument with British Coal when it has decided to put a colliery into that procedure.
Yesterday, Lord Wakeham said that there would be discussions with the generators and the 12 regional electricity companies on the market prospects. I hope that the President ensures that the talks do not prejudice the prospect of coal share being maintained at 65 million tonnes by assuming that all the proposed gas-fired power stations will be allowed to proceed. We should like a response this evening to a question posed on a number of occasions: what is to happen to the future applications and those that are in the final stages of consideration? Will they be given the rubber stamp, as has happened in the past, or will there be an attempt to ringfence whatever figure is decided for the coal industry?
We have had an undertaking that there will be a belated examination of the dash for gas. I say "belated" and I am mindful that, yesterday, Lord Wakeham said:
There is no question but that gas is cheaper."—[Official Report, House of Lords, 20 December 1992; Vol. 539, c. 673.]
But the Government are supposed to be an open-minded Government who will take everything into consideration.
Lord Wakeham continued—this is the disturbing part—by saying that if the regional electricity companies chose gas in preference to cheaper energy sources and passed the cost on to the consumer in increased prices, they would be in breach of their licence conditions. That will be a fat lot of good to the mines if the closures have already taken place and it is impossible to reopen them. There is no threat to punish a breach of the licence provisions if the measure cannot be enacted quickly enough to restore to the collieries their right to supply coal to the power stations.
Consideration has been promised on the mothballing of some of the pits that are due for closure. The Frances colliery in Kirkcaldy has been operating on a care and maintenance basis for some time. Last week it was announced that, instead of being sustained, it would either be closed or sold if a buyer could be obtained. That does not bode well for the possibility of mothballing in future.
The last undertaking given in the House of Lords yesterday was to look at the proposed level of imports to see whether it was appropriate.
Will the Secretary of State and the President—the great interventionist—say whether he has now picked up the phone to stop Russian coal being burnt at Aldermaston? He gave us a lecture earlier about another local authority. Will he stop 300,000 tonnes of coal from Russia being burnt at Aldermaston?
I think that the Secretary of State can answer that question when he winds up the debate. We all want to know what the attitude will be towards a wide range of imported coals and what the Government propose to do about the importation of coal from Colombia, which has risen by a phenomenal amount to 2.5 billion tonnes.
Leeds council has yet to sign a contract. Under the competitive tendering process, Leeds council exchanged letters of intent with the coal company. That undertaking has now been revoked. Until the competitive tendering legislation was introduced, there was an agreement whereby all coal burnt had to come from Yorkshire collieries. Therefore, we do not need any lecturing about Labour authorities being forced into taking on responsibilities.
The level of imports does not merely involve numbers, but quality. We want to ensure that orimulsion plays no part in the future energy mix of this country. We want to ensure that a potential pollutant of that character has no part in our energy mix.
It is assumed that if there is a second look at the closure programme it will involve little more than tinkering at the margins. There is certainly a feeling that the people who advised the Secretary of State on the initial statement are those who are to act as judge and jury on the review. In our judgment they are not people to be trusted. We do not have confidence in them or in the way in which they have carried out their responsibilities so far.
The Opposition believe that there is another way to carry out the review. We believe that our motion provides the means whereby the Government can enjoy the respect and confidence of the people of this country—if they carry out the review independently, if they afford the Select Committee proper access to all the materials, and if they require the companies to provide the information on which the Select Committee can make its judgment.
The coal industry does not ask for special pleading. It responded like no other industry in the 1980s to the challenges of new technology and of change, and miners have carried out their work in a way that has resulted in the country respecting them. Everyone—apart from Ministers—respects British Coal and the industry.
If the Government are to discharge their responsibilities in respect of energy policy they need to secure and enjoy public trust, the trust that springs from the belief that the Government are in full possession of the facts and are acting rationally. The events of the past week suggest neither. Our motion offers a way forward which will enjoy the support of those affected by colliery closures. It will enjoy the backing of the country and the agreement of the Labour party. I urge Conservative Members to join us in the Lobbies in support of the motion.
This has been a wide-ranging and comprehensive debate. We have heard 28 speeches and I, like some other Members, have not missed a word of them. I congratulate all who have contributed—especially the hon. Member for Birmingham, Small Heath (Mr. Godsiff) on his maiden speech. He spoke with great compassion and vigour. It was a good speech; we will hear many more from him. I note that he is a supporter of Charlton Athletic, who are second in the first division and unbeaten this season. I am sure that the hon. Gentleman will score many goals for the Opposition in future speeches.
We heard at length from the hon. Member for Livingston (Mr. Cook), but we did not hear an alternative policy from the Labour party. Indeed, the hon. Member for Clackmannan (Mr. O'Neill) said at the end of the debate that there was little to choose between Labour and Conservative Governments when it came to who had closed most pits. He is wrong. I have the figures. The Government who closed most pits and put most people on the dole were the Labour Government between 1964 and 1970. It is about time we had the facts in this debate. Between 1967 and 1968 there were 59 colliery closures. I have a list of every year since 1946, and there have never been as many closures as that in one year since the war. [HON. MEMBERS: "What about today?"] I am answering the point made by the hon. Member for Clackmannan. It is no use the Labour party thinking it can get away with cheap points without reply. In 1968–69, 46,146 people in the coal industry were put on the dole—so the Labour Government clearly hold the record.
My hon. Friend the Member for Rochford (Dr. Clark) asked a number of questions. He will know that I have always taken his points very seriously indeed. I have great respect for his expertise in this matter. He asked whether the Select Committee report, which has been quoted by several hon. Members, would be taken seriously. I assure him that it will, but I remind him that it said that no overseas experience is relevant to how the energy industry in England and Wales will develop. I have carefully read that important report which must be taken into account in the review.
My hon. Friend the Member for Bedfordshire, North (Sir T. Skeet), who has always been noted for knowing a great deal about the energy industry, raised some important facts. Opposition Members who were not present during my Friend's speech should read it in Hansard. In it they will see some facts of which they were unaware, if one takes their speeches at face value.
The hon. Member for Gordon (Mr. Bruce) asked whether the review would be serious. The answer is yes. He also asked whether Liberal Democrat submissions would be accepted. Of course they will, if they are acceptable. I hope that the hon. Gentleman will do no other than to put to the Government all the facts that he and his colleagues wish to put.
I shall not give way. I am replying to issues raised by the hon. Members who spoke in the debate.
The hon. Member for Rother Valley (Mr. Barron) has much experience of the National Union of Mineworkers and I respect his expertise on the coal industry. I respect also the expertise of the hon. Member for Wentworth (Mr. Hardy) who for many years has represented NACODS. I ask both hon. Gentlemen to respect the expertise of my hon. Friend the Member for Langbaurgh (Mr. Bates) who said that we must consider not only coal communities but the jobs and communities which depend on power stations and gas exploration and the manufacturing industries in the United Kingdom that depend on cheap energy.
I shall give way in a moment, but I should first like to respond to the important issues that have been raised. I shall respond in writing to those that I am not able to deal with now.
I hope that people will pay attention to the speech by my right hon. Friend the Member for Selby (Mr. Alison). It was an important statement by a Member who represents a large number of coal miners in one of the most productive collieries in the world. He said that we should look to the future. I have gone underground at the Selby pits which are now reaping the product of a £1,300 million investment by producing 12 million tonnes at a rate of 30 tonnes per man shift. That is quite remarkable. I refer the hon. Members for Clydesdale (Mr. Hood) and for Bolsover (Mr. Skinner) and the right hon. Member for Chesterfield (Mr. Benn) to the speech of my right hon. Friend the Member for Selby. They may well look back with some pride to the past—all hon. Members have a right to look back with pride at the coal mining industry—but we must not become rooted in the past. We must look to the future. We cannot shore up any pit, however uneconomic. On 29 January 1985 the right hon. Member for Chesterfield said:
There is not a single pit in Britain which is uneconomic.
He probably still holds that view. The greatest threat to the coal industry would be any attempt to average up the cost of economic low-cost pits to subsidise pits that can only be a burden on the economy in general and the coal industry in particular. Those were the words of a right hon. Member who was a Minister for power under a Labour Government.
The Secretary of State for Wales was in the Chamber when I spoke earlier. I said that I had no disagreement with the right hon. Member for Selby (Mr. Alison) about the long-term future of British coal. The Secretary of State heard me say that there is a colliery in my constituency that has recently completed a £183 million investment programme. As a single pit, it has reserves that are better than any of the Selby pits. Last week, the 1,300 who work there—many of them sat in the same classroom as myself as children—were told that they were sacked because it had been decided that the mine would be mothballed. How is that looking after the nation's future?
I shall reply directly to the hon. Gentleman—[HON. MEMBERS: "Answer."] I shall answer. I still rely on my right hon. Friend the Member for Selby, who talked about looking to the future. I say to the hon. Gentleman that in the 1960s there were many pits that had large economic reserves of coal. Machinery was in those pits. They were closed so quickly by the then Labour Government that the machinery was lost. I say directly to the hon. Gentleman—
The hon. Member for Rother Valley knows that there have always been different views. I am sure that he has been present during review procedures. There are always differences of view about what is an economic pit.
Does my right hon. Friend agree that what the hon. Member for Rother Valley (Mr. Barron) has just said—much information has been brought to some of us this week—is a good reason for including the 10 pits in the review? If my right hon. Friend can give the House the assurance that they will be included, he will persuade me not to vote against the Government this evening.
I note that the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) is in his place. Taff Merthyr is one of the 10. I understand from the Taff Merthyr work force that the pit has serious problems. I know that the hon. Gentleman will disagree, but the closures of Taff Merthyr and Betws were announced on 20 August and not last week. They are part of the 10, but, as I have said, the closures were announced not last week but on 20 August. The men met and, as I understand it regrettably—for them—they had to accept that the pit did not have an economic future.
I intervene because the Secretary of State for Wales has referred specifically to Taff Merthyr. There is a sense of resignation because a good and reasonable plan was put forward but rejected—it was not listened to—by British Coal. We are asking only that that plan should be submitted to a new review procedure and not to the same people who turned it down. The plan should be reconsidered during the 90 days.
In the Taff Merthyr area nearly 25 per cent. of the men are out of work. There has been a loss of 4,000 jobs in manufacturing. Thorn has been closed. There is now the prospect of another 380 job losses, and three other pits are being closed. Is the right hon. Gentleman offering us more of the same?
No, not at all.
I know that the hon. Member for Merthyr Tydfil and Rhymney will disagree with the miner whose words I am about to quote, but when asked about whether he would fight for the future of the pit on BBC Wales he replied:
Why should we fight when we run out of reserves next year?
I tell my hon. Friend the Member for Batley and Spen (Mrs. Peacock) that British Coal has told my right hon. Friend the President of the Board of Trade that the 10 pits are currently loss making and that there is no prospect of viability in the foreseeable future.
Will my right hon. Friend confirm that the men employed in the 10 pits subject to the review procedure will be laid off work on full pay for three months whereas in the 21 pits that are subject to the moratorium the miners will be mining coal for three months and earning bonuses? The difference is that both sets of men will be paid while one set is mining no coal and the other set continue to mine. What sort of economic sense is that?
Just one moment.
It must be a genuine consultation. British Coal has given the criteria to show that those pits are currently loss making and have no prospect of viability in the foreseeable future. If there is any serious doubt about whether those criteria apply, British Coal will have to demonstrate that that doubt is removed and that the criteria have been met, because, under the legislation, it not only has to give reasons for closure, but it must prove that the consultation is a genuine one. That is absolutely clear.
On the review, can my right hon. Friend say whether the best possible estimates can be given for all costs, whether direct or indirect, which would be incurred by all Government Departments for each option under review?