Coal Industry

– in the House of Commons at 3:30 pm on 25 March 1993.

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Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade 3:30, 25 March 1993

With permission, Madam Speaker, I should like to make a statement on the conclusions of the Government's coal review. I must ask the indulgence of the House for what will be a lengthy statement. I understand that my right hon. Friend the Leader of the House will be making arrangements for a debate early next week.

The House will recall that this wide-ranging review was to look at the prospects for the 21 pits proposed for closure by British Coal last October in the context of the Government's energy policy.

First, I should like to pay tribute to the Trade and Industry Select Committee for the detailed work in its report.

I have a number of important new announcements to make about future opportunities for the British coal industry. I am pleased to be able to tell the House that the generators and the regional electricity companies have now formally confirmed their intention to enter into base contracts and the necessary back-to-back contracts which will enable British Coal to supply 160 million tonnes of coal over five years, with 40 million tonnes in the first year and 30 million tonnes in each of the next four years.

The Select Committee identified the central issue—that it is only sensible to produce coal for which there is a market. The key question then becomes how big that market is. There is inevitably great difficulty in predicting the size of a long-term market as complex as the one for coal. The dominant market is in the England and Wales electricity supply industry. Estimates of the size of this market vary widely and a number of different fuels compete for it.

It is central to the Government's energy policy to help create competitive energy markets within which consumers can obtain electricity produced from a diversity of sources at competitive prices. This is the best way to keep consumers' costs down and thereby strengthen our industrial competitiveness. Let me comment therefore on the fuel sources that compete with British Coal: gas, oil, nuclear, orimulsion, coal from various sources and electricity supplied through the interconnector with France.

I agree with the Select Committee that it would be wrong not to take advantage of the massive public investment in nuclear power. Electricity produced from existing nuclear stations has the lowest marginal cost. The benefits should not be denied to British industry and other consumers. We will, however, wish to look closely at any requests from Nuclear Electric for approval for capital investment in relation to proposals for extending the life of any Magnox stations. We will also be bringing forward our review of the future prospects for nuclear power.

Let me deal next with gas. It has been suggested that I should withhold further planning consents for gas-fired power stations. In considering this, I must have regard to my statutory powers and responsibilities. I do not intend to interfere with existing power station consents, or to alter my policy in taking future consent decisions under section 36 of the Electricity Act 1989. Consequently, matters such as the need for a generating station, its capacity, choice of fuel and type of plant remain commercial matters for applicants.

The House will appreciate that, whatever decisions I might take on new section 36 consents, they could not be relevant to the market for coal for at least another three years, since it would take at least that long for any new station to be brought into operation. In this context, I have decided that the Connah's Quay development in north Wales should be allowed to proceed. This is a sour gas project of a kind that the Select Committee favoured. I am also today granting consent to two smaller projects, one using sour gas at Ryedale in North Yorkshire and a combined heat and power scheme at Aylesford in Kent. Together, the three projects will involve investment of over £2 billion and will lead to the creation of over 5,000 construction jobs, as well as several thousand in related industries.

I have considered carefully the position of orimulsion. As my right hon. Friend the Chancellor of the Exchequer announced on 16 March, orimulsion, like other oil substitutes, will be subject to hydrocarbon oil duty. As such, it will bear duty at the same rate as heavy fuel oil. It will also be subject to the normal environmental controls for which Her Majesty's inspectorate of pollution is responsible. There are existing binding contracts for the import of orimulsion into the United Kingdom, with which the Government have no powers to interfere. The Government have, however, been informed that orimulsion imports to the United Kingdom are likely to be reduced by at least 500,000 tonnes equivalent of coal a year from current levels and to remain at the minimum contractual level for the foreseeable future.

In one area I have been driven to a different conclusion from that reached by the Select Committee. It recommended that I should remove Electricité de France's non-leviable status and ensure that British-produced electricity should gain access to the French electricity market and to third markets through France. I have considered this carefully and I published on 18 March a summary of the legal advice that I had received. The position is clear. Any governmental measure to prevent or restrict imports of electricity across the interconnector with France would run counter to article 30 of the treaty of Rome. Further, the Government would be at financial risk under the indemnity given to the National Grid Company at the time of electricity privatisation and reported to this House.

Electricité de France's electricity's non-leviable status could not be removed without giving EdF the benefit of levy payments. In other words, EdF could have to be given the same premium for its electricity as is now given to Nuclear Electric and financed by the levy. Far from reducing imports from France, this would reinforce their position, and our consumers would end up paying more for their electricity.

I have to tell the House that I see no prospect of reducing the net amount of electricity coming across the interconnector to zero, as indicated by the Select Committee. However, my hon. Friend the Minister for Energy and I have explored the scope for sales of electricity to France across the interconnector. The Minister has had talks with his French counterpart and the indications for sales in later years are good. Confirmation of this came in the announcement earlier this week of an eight-year export contract representing potential sales in excess of £100 million from the United Kingdom to France. The House will also wish to note that the latest forecast shows that sales by EdF in the United Kingdom are likely to decline progressively and significantly.

I must now address that section of the market which is supplied by deep-mined, opencast and imported coal. The base contracts that I have just announced secure 160 million tonnes over five years at a value of £5·5 billion. This leaves British Coal as one of the world's largest coal producers. Opencast coal is a significant generator of employment providing jobs, whether directly or indirectly, for some 17,000 people throughout the United Kingdom. It is an economic source of energy which needs no subsidy from consumers or taxpayers. It can also play an important role in reclamation and redevelopment of derelict land.

While the Government do not think it would be right to impose arbitrary limits, British Coal has indicated in its evidence to the coal review that it expects its opencast output to fall over the next five years from the current level of 16 million tonnes to 12 million tonnes. British Coal's latest expectation is that opencast output will be lower still.

I welcome the increased scope for deep-mined coal which this represents. It will not affect British Coal's current contracts with companies that operate their opencast sites; nor will it affect the private sector opencast producers licensed by British Coal. My right hon. and learned Friend the Secretary of State for the Environment is currently reviewing the guidance to planning authorities on opencast coal. He will be announcing today how we will be carrying this forward in the light of the White Paper.

British Coal's prospects of winning and holding a share of the wider market for coal depend on increased competitiveness. There is a critical role here for the private sector. We believe that privatisation is the only way of enabling this industry to take full advantage of the opportunities that the market offers. British Coal will therefore begin immediately to prepare for full privatisation. It has confirmed that, in advance of full privatisation, any pits which the corporation does not itself wish to keep in operation will be offered to the private sector. The Government will be making available up to £1 million to assist in funding consultancy studies for management and employee buy-outs.

To provide a further impetus for this, I intend to appoint a board member who will have special executive responsibility for privatisation. This will be supported by a new unit within my Department. The Government will consider legislation to remove the manpower limit for private mines if this proves necessary.

The Government have looked carefully at the position of large electricity users. I am working with the Director General of Electricity Supply to examine the circumstances under which they might bypass the pool. I will also embark shortly on further consultations with the director general, the electricity industry and large users on whether demand-side bidding would improve the workings of the electricity market. In addition, the Government are reviewing the current regulation of on-site generation, which could offer large users an alternative source of electricity.

I turn now to the most important of the Select Committee's recommendations. I have authorised British Coal to negotiate for future contracts on the basis that it would supply at a world market-related price. The Government are prepared to subsidise the difference between this price and British Coal's cost of production. This subsidy will apply for any additional tonnages that British Coal is able to sell to the generators, whether or not these are on long-term contracts. The subsidy will reduce progressively over the period to full privatisation. The amount of subsidy will depend on the outcome of commercial negotiation, but we are prepared to embrace the range of figures put forward by the Select Committee. These arrangements will be notified to the European Commission under the relevant state aids provisions.

Private sector mines will also be able to seek Government financial backing for supplementary sales at world-related prices on the same basis as British Coal and consistent with the relevant EC provisions, provided that they can demonstrate that this was for genuinely additional tonnages.

I cannot guarantee that supplementary sales will be achieved by British Coal, but both generators have said that they will continue negotiations for such sales. To the extent that these sales fall short of the level envisaged by the Select Committee, expenditure will of course be less than that which they estimated.

I am also aware that coal stocks are at very high levels. There are 33 million tonnes with the generators and a further 12 million tonnes at the pithead. Some reduction in coal output is therefore essential.

As the House would expect, we have kept British Coal closely in touch with our thinking and we have provided it with an advance copy of the White Paper. Having considered this, British Coal has announced today that it is to consult on closure proposals for two of the 21 pits under review—Bolsover and Sharlston—whose reserves will shortly exhaust. Any redundancies will be subject to statutory consultation and notification requirements.

British Coal has also announced that, again subject to consultations, it proposes to place the following six pits on a care-and-maintenance basis—Bevercotes, Clipstone, Easington, Rossington, Shirebrook and Westoe. These six pits and the two proposed for closure in the coming months will be made available to the private sector.

Twelve of the 13 remaining pits will continue to produce while British Coal, with Government financial backing, looks for additional sales at world-related prices. British Coal is proposing that, again subject to consultations, one further pit—Maltby—will be placed on development. This will help to ensure that its reserves are available into the next century. The future of coaling in individual pits will depend on the extent to which intensive efforts over the coming months identify a market for their product or realistic prospect of sale to the private sector.

Safety must continue to be paramount. The Government are determined to ensure, in consultation with the Health and Safety Commission, that the existing high safety standards in such mines are maintained after they pass into the private sector.

I have a general responsibility for competition, which of course includes the electricity market. Both I and the Director General of Electricity Supply have a statutory duty to exercise our functions under the Electricity Act 1989 to promote competition. The director general has the full support of my Department in rigorously policing the competitive electricity market.

I have taken the opportunity of the review to consider a number of long-term issues about the future of the industry. Clean coal technology will be vital to ensuring that coal continues to play a long-term role in the energy industries. The Government intend to make available an additional £12 million over the next three years to secure the future of the Coal Research Establishment before its transition to the private sector. The Government also intend to encourage links with international research programmes.

The Government intend to publish an annual energy report to provide information relevant to business and investment decisions. In keeping with a recommendation of the Select Committee, the Government, in preparing the report, will be advised by a new energy advisory panel of independent experts.

The Government are acutely aware of the impact that any mining closures have on miners, their families and their communities. We announced a substantial package of measures in October to help areas that might be affected by closures. The Government have decided to increase the amount available to £200 million. The additonal funds will allow major new projects to go ahead. These include a flagship business park in the Nottingham area and advance factory provision in several areas. The regeneration measures are to be co-ordinated by Lord Walker.

I can also announce our intention that the headquarters of the new coal authority proposed under our privatisation measures will be located in Nottinghamshire. In addition, my Department will support the establishment of a new regional development organisation based in Nottingham to attract inward investment to the east midlands.

Finally, let me remind the House of what I said earlier. There can be no guarantees. The market for coal is complex and unpredictable. Even among the experts, opinions differ. I have done all that I reasonably could, consistent with economic realities and legal constraints, to increase the opportunities for British Coal.

It is now for British Coal to make the most of these opportunities. The outcome will be settled, as it should be, in the marketplace. Our policies will give the industry every chance of strengthening its position and achieving future success. It is now up to the people who work in the industry to build on this.

Photo of Robin Cook Robin Cook , Livingston

The House has just heard a comprehensive admission of failure. There was little in what the President of the Board of Trade said to the House that he could not have said on 13 October and there was much in the statement that he did say on 13 October.

The right hon. Gentleman promised that he would look for new markets for coal. He has just admitted that he has failed to find a market for one single extra tonne of coal. The contracts, which the right hon. Gentleman was pleased to announce to the House today, are precisely the same tonnage as the contracts on 13 October which forced the closure of 31 pits. How can the right hon. Gentleman claim to have saved 12 pits when he has not sold a single additional tonne of coal?

Will the right hon. Gentleman concede that his negotiating skills have delivered a bargain in which he has provided a subsidy on coal to the generators without getting them to agree to one extra tonne of coal? Does he really believe that a two-year subsidy will change anything? That is not a rescue plan; it is only a stay of execution.

Why does not the right hon. Gentleman admit that the period of two years has nothing to do with the time to turn round those pits and everything to do with his timetable to privatise the coal industry and wash his hands of it? The right hon. Gentleman complained that coal is a complex market in the electricity system. He should know: the Government created that complex market. They created a rigged market which is denying coal a fair chance to compete.

Why did the statement do nothing to cool the dash for gas which is closing the coal mines? Why does not the right hon. Gentleman challenge the sweetheart deals between the electricity companies and the new gas-fired power stations which guarantee them sales, not for two years, but for 15 years? Is not the conclusion from the statement that the only thing that the right hon. Gentleman is prepared to do about the dash for gas is to license three more contracts for new gas-fired power stations?

Why does the statement—[HON. MEMBERS: "What about jobs?"] What about jobs? Conservative Members should consider the 30,000 miners' jobs, the 20,000 people who work in factories, the 10,000 people who shift coal on the railways and the 100,000 who will be made unemployed as a result of the statement.

Why does the statement do nothing to check imports of electricity from France—electricity which is more expensive than electricity produced from British Coal? Does the right hon. Gentleman or any Conservative Member imagine that the French Government would import electricity from us if they had to close French pits to do that? Why do we continue to accept that Community rules oblige us to import electricity from France when we cannot get the French to agree to carry our electricity to Spain?

Why does the statement do nothing to create a level playing field for competition between coal and nuclear electricity? Does the right hon. Gentleman appreciate that, if coal received subsidy as large as that received by Nuclear Electric, it could deliver half its coal to the power stations for free? What kind of competition is that?

Why does the White Paper do nothing to provide stability for coal sales by postponing next year's cut in the guaranteed market to the power generators? Is that why PowerGen withdrew its offer of 4 February to take an extra 55 million tonnes over five years? Why is it that, the longer the review has continued, the less the right hon. Gentleman has been able to deliver?

Can the right hon. Gentleman confirm that we are about to hear in the business statement that the House will be expected to debate a White Paper on Monday which has only just been placed in the Vote Office? Is not the reason for that panic timetable the fact that the right hon. Gentleman is afraid that, the longer the public consider the White Paper, the more they will see through it? The right hon. Gentleman has taken five months to write a White Paper which he dare not allow the House five days to analyse.

Britain's pits have doubled productivity in eight years. They are modern and efficient pits which have cut the price of coal by one sixth in the past five years. What a contrast that is with a Government who have just put up fuel bills by one sixth by slapping VAT on them.

The White Paper does not save a single pit beyond two years; it does not save electricity consumers from paying, through their bills, the extra costs of constructing new gas-powered stations; it does not save the balance of trade from the extra costs of importing coal and gas; it does not save public spending from the cost of closing pits which it would be cheaper to keep open; and it will not save the right hon. Gentleman's reputation.

This mix of short-term subsidy and long-term betrayal may be enough to buy off the rebels on the Government Benches, but it will not buy off the nation, who will not forgive the Government for abandoning Europe's richest coal reserves.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I think that the whole House will have noted the central accusation of the hon. Member for Livingstone (Mr. Cook) that this was an admission of failure. It is, if I may say so, characteristic that when I have committed hundreds of millions of pounds of taxpayers' support and agreed with the Select Committee report in substance, the hon. Gentleman should think that is a question of failure.

The fact of the matter is that an all-party Select Committee with a majority of Labour members [Interruption.]—a majority of Conservative members and a Labour Chairman—indicated the way forward and I have broadly accepted the thrust of its central recommendation. That is not failure; that is listening to the House of Commons and responding to it.

It is characteristic that, whenever the Government provide an opportunity for British industry to win, the first thing the hon. Gentleman does is to run down the prospects of success. It is quite apparent that he has missed the central point about the nature of the market which the Select Committee and I have identified. What he has done is to fall back on the old arguments about a rigged market.

Why did I not suppress the demand for gas? First, because it is efficient; secondly, because the market has demanded it should be there; thirdly, because a large number of jobs are dependent on it; and, fourthly, because I agree with the Select Committee that we should not do it.

Let us consider the easiest response to the hon. Gentleman. "Why did you not deal with the French?", he said. In the House, on 3 August 1978, the right hon. Member for Chesterfield (Mr. Benn), when Secretary of State for Energy—[Interruption.]—had this to say: I am informing the Central Electricity Generating Board that it has my approval in principle for investment in the proposed 2,000 mw cross-Channel electricity cable to be constructed and operated jointly with Electricité de France… The expected cost to the CEGB is £131 million. The link is planned to come into operation in stages, the first 1,000 mw in 1982 and the second in 1983."—[Official Report, 3 August 1978; Vol. 955, c. 545–6.] The problem is that, when he gave permission in principle to the CEGB, he had not wrapped up the details of the contract.

I do not think that we want to preoccupy ourselves only with the unreconstituted left. The right hon. Member for Copeland (Dr. Cunningham) was the Parliamentary Under-Secretary of State for Energy all through the time when this was going on. The right hon. Member for Chesterfield might say that he was only a little fish. The Leader of the Opposition, the right hon. and learned Member for Monklands, East (Mr. Smith), however, was Minister for Trade.

Hon. Members:

Resign.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. The House must come to order. A great many hon. Members want—and are expecting—to put questions. Therefore, time should not be wasted with a lot of noise.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

It was not rigging the market; it was selling out the market. That is what the Labour Government did.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

No, shame on the party that did it.

The next phoney accusation of selling out is the nuclear allegation that the hon. Member for Livingston paraded before the House. Once again, the right hon. Member for Chesterfield, on behalf of the Government of which he was a Member, explaining what he felt to be the future for nuclear provision, said: If we look ahead at the mix of fuels which we think we shall need in this country in the year 2000, it is not possible to abstract the nuclear component without running a serious risk which no energy Minister could recommend to this House.—[Official Report, 15 May 1978; Vol. 950, c.174.] That is the argument that has to be presented. I join the right hon. Gentleman, for the first and perhaps the only time in my life, in presenting that argument to the House.

The right hon. Gentleman gave the figure. On 25 January 1978, he told the House—

Several Hon. Members:

On a point of order, Madam Speaker.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. I remind the entire House, including Ministers, that we are not into debate. Debate comes on Monday. [Interruption.] Order. I am on my feet. Hon. Members are expecting to be called, so they should keep quiet now and they might then be called. I seek brisk questions—[Interruption.] Order. Allow me to finish. Equally, I seek brisk responses to those questions so that we might make some progress this afternoon.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I fully understand your ruling, Madam Speaker. I was merely trying to respond to the inquiries from the hon. Member for Livingston. Let me help you, Madam Speaker. I believe that we have shown British Coal the way forward. We have offered it a chance. We have recognised what the Select Committee said and I commend the White Paper to the House.

Photo of Dr Michael Clark Dr Michael Clark , Rochford

Does my right hon. Friend accept that Conservative Members appreciate his statement this afternoon and would like to compliment him on his hard work and diligence in coming up with a statement that will be so helpful to the British coal industry? Is my right hon. Friend aware that, in recent years, British Coal has been saying that, by 1995, it will be able to produce and sell coal at world market prices if it is given the opportunity to have assistance through to 1995? Does my right hon. Friend agree that his statement this afternoon gives British Coal not only that very opportunity but the opportunity to have a long and viable future?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I say at once to my hon. Friend and to his colleagues on the Select Committee on Trade and Industry that I have listened as carefully as possible. It has been an extremely constructive dialogue and I am extremely grateful to my hon. Friend, who has particular knowledge and expertise. I and the Government are trying to give British Coal and, as soon as it can be arranged, the private sector the opportunity to seek markets with a competitive price for their product. We are all well aware that the more we have privatised the former nationalised industries, the more they have gone out into the world and won for Britain.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Trade and Industry)

Will the Secretary of State accept that we welcome the fact that he has listened to the recommendations of the Select Committee on Trade and Industry? However, he should not anticipate that he has the Committee's whole-hearted support, because he has not been able to accept the recommendations in full or to an extent that would have saved more of the pits. I welcome his assurances on gas, but does he acknowledge that it is unfortunate that the Chancellor of the Exchequer did not consider the confidence of the North sea oil and gas industry when he introduced the tax change in the Budget? There could have been a more helpful combination.

The energy industry is in its present state precisely because of the Government's privatisation of gas and of electricity, which was carried out in ways that failed to create a genuinely competitive market. Is not that why Sir James McKinnon now demands the break-up of British Gas? Is not it high time that the Secretary of State reorganised the electricity industry to make the market work? Will he, therefore, accept that the only consistency of Government energy policy is not to have had a policy for the past 13 years? Is not that a denial of the White Paper, which he claimed was to be a comprehensive energy review? There is no mention of an energy review, but just a discussion of a market for coal. This is a short-term fix, which does not meet the long-term needs of the nation.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman must have failed to hear what I said. I said that there would be an independent group of energy experts and that there would be an annual energy report. Those ideas were included after consultation with my colleagues, as a result of the Select Committee's proposals.

I disagree with the hon. Gentleman's views about the North sea. When a tax regime is changed, some win and some lose. Many companies in the North sea can look forward to an improved position from the lower levels of petroleum revenue tax which have been announced by my right hon. Friend the Chancellor of the Exchequer. The hon. Gentleman would not expect me to be drawn on the issue of British Gas because it is the subject of a Monopolies and Mergers Commission inquiry.

Photo of Mrs Elizabeth Peacock Mrs Elizabeth Peacock , Batley and Spen

Is my right hon. Friend aware that I recognise the work undertaken by him, by the Minister for Energy and by many in his Department to produce the White Paper? However, will he assure the House today that the White Paper provides an extra and further market for coal? If it does, what will be the immediate effect?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend has taken an acute interest in the matter and I have been especially grateful to her for her advice on the ways in which we should make speedy progress towards privatisation. What both the Select Committee in its report and the Government in the White Paper have emphasised is that we are dealing with the marketplace. One can analyse and make predictions about the marketplace, but in the end one is dependent on customers. British Coal must now, with the advantage that we have given it of being able to compete at world market prices, secure that market. We shall give British Coal every help in doing that.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Did not the Select Committee make it clear that its recommendations should be taken as a comprehensive whole? It is therefore wrong for the Secretary of State to pick the bits that suit his case and then to claim to support the report. Is he aware that his statement today is an economic disaster for Doncaster? He talks about the marketplace. I am concerned about the job marketplace in Doncaster through which the right hon. Gentleman has driven a big hole today. He spoke in October about the support that would be given to areas affected, yet we have seen none of that yet in my area. When will we get that support? What does he intend to do about the disaster that he has created for my constituency?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I think that I can help the right hon. Gentleman. I am very concerned to ensure that where closures take place, there is the help that I have announced. It is self-evident to those who understand these matters that no one is allowed to prejudge consultative procedures that are under way. Until British Coal comes to a conclusion, through the consultative processes, about the way forward, we do not know exactly what closures will take place. It is therefore not possible to anticipate and to start spending money.

The House will understand that one of the great advantages of Select Committees, which I strongly supported when they were extended in 1979–80, is that they can range over a subject and put forward many different proposals. The Select Committee on Trade and Industry has done a commendable job. However, nobody believes that a Select Committee is a substitute for Government. We have to study the Select Committees' proposals and we have to take the decisions. There are often lonely questions about the allocation of priorities. I hope that, on reflection, the Select Committee will feel that its work has been taken extremely seriously.

Photo of Mr Michael Grylls Mr Michael Grylls , Surrey North West

Does my right hon. Friend accept that his statement proves that the Government are determined to do all that they can to help the British coal industry—whether it is in the private sector or the public sector—to become competitive so that it can supply coal to the market at the price that the market demands? Will he ensure that the subsidies are prudently spent, because they come from taxes paid by other successful businesses throughout the country? It is very important that they are spent carefully.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend is absolutely right. He addresses the central issue that faced me last October and has faced my colleagues ever since. If my announcement leads to extra contracts, it will cost the taxpayer hundreds of millions of pounds. We will therefore ensure that the negotiations that lead to such potential are carefully and rigorously conducted and that they are of a tapering nature to ensure that British Coal continues to have the incentive to improve productivity.

Photo of Richard Caborn Richard Caborn , Sheffield Central

Will the President of the Board of Trade, through the usual channels, allow a debate on Monday not just on the White Paper but on the 39 recommendations made in the Select Committee report to give the House the right to make decisions on them? I am concerned that, after six months of delay by the Government—the President of the Board of Trade knows that the Select Committee report was published on 29 January—we are now to be forced to debate a serious issue in an unacceptable time span of about 48 hours. I ask the usual channels to allow a little more time not only for the House to reflect on the issue, but—[Interruption.] As the President of the Board of Trade has raised the subject of the Select Committee report, and if it is not too much for Conservative Members to listen, the Chairman of the Select Committee has the right at least to put down one or two markers.

May serious consideration be given to the report to allow the nation time to reflect on the content of the 152-page White Paper, which will be debated on Monday? My quick analysis—and it has been quick—of the main provisions of the White Paper suggests that all 31 pits will be closed in the next three or four years. That will cost the British taxpayer about £2 billion. Eighteen of those pits and 18,000 jobs will be lost this year alone. This package is merely a change of tactics—[HON. MEMBERS: "Ask a question".] I want to deal with the points that the President made—

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. I know that the hon. Gentleman heard me earlier when I reminded the House that hon. Members should not ask questions. A debate will be held on Monday. We want to hear the hon. Gentleman put his question to the President of the Board of Trade.

Photo of Richard Caborn Richard Caborn , Sheffield Central

I will ask the President of the Board of Trade specific questions. Why has he, again, failed to question whether there is a larger market for coal—the very question he posed to the House on 21 October? Why has he chosen price support for British Coal in the full knowledge that his proposals do not provide the market beyond the 40 million tonnes this year and 30 million tonnes in the subsequent four years? Why has he not answered the Select Committee report, which addressed the question whether there is a larger market for coal? Will he now answer questions on the licensing of gas, on the baseload of gas, on the letter that I wrote to him about EDF and on opencast mining by British Coal and the private sector? Why has he chosen not to comment on the franchising of the regional electricity companies—which is mentioned in the report that he has ignored—which would make a further market for 20 million tonnes? The right hon. Gentleman has ducked those questions this afternoon, but he should answer them.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman, who, as the House knows, is Chairman of the Select Committee on Trade and Industry, misunderstands the nature of what I have said today. While it is entirely for my right hon. Friend the Leader of the House to determine the subject of the debate, within my White Paper there is reference to every recommendation of the Select Committee and a Government response to it. It would be difficult for us to debate the issue without referring to the Select Committee report. We are under pressure to make progress on the matter because the contracts for British Coal run out on 31 March, so there is great uncertainty in the industry and it is important that the House has an opportunity to debate the matters.

The hon. Gentleman mentioned the central issue, to which I have referred many times already—the market-place. As I understand it, the view of the Select Committee about the market place is that we should do certain things to expand it, some of which I have been able to do in part. Secondly, it recommended that we should provide a subsidy to enable British Coal to obtain part of the additional market space. I have accepted that recommendation. It named certain rates of subsidy that might be necessary and I have already said that I am prepared to embrace figures broadly in line with those of the Select Committee.

The only issue is whether I could have been expected, by now, to have seen British Coal sign up the additional contracts. The Select Committee never told me to come back to the House with signed contracts. It told me to allow British Coal to go out and negotiate for contracts. That is what I have announced that I shall do.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedfordshire North

I congratulate the President of the Board of Trade on maintaining a competitive energy industry and on his recognition of the fact that it is no good curing unemployment in one industry only to create it in another. Will he keep a watchful eye on coal stocks which, at 45 million tonnes, are excessive, so as to ensure that they do not deteriorate and go to waste?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend touches on another central dilemma in the debate. It is that it is often a question not of protecting jobs in general but of protecting jobs in one industry or another. The more that one chokes off the market to enable coal to fill it, the more one destroys jobs and confidence in a range of alternative industries, many of which are doing extremely well. The House will have recognised that I have today announced the go-ahead for a project with which 5,000 jobs are associated. It is very much a question of priorities, but British Coal now has a chance to compete in the market place with a product that is priced competitively.

Photo of Mr Tony Benn Mr Tony Benn , Chesterfield

Is the Minister aware that what he has done today is to confirm unemployment for between 80,000 to 100,000 people and condemned to death the communities whose pits will close at a time of mass unemployment and that, for those people, his statement will have been the most cynical, arrogant and inaccurate that has been heard in the House for many years? That is so not least because the aim of the interconnector with France was to export British coal to France. As he knows, that is the purpose. The Labour Government launched the Selby coalfield and authorised the Drax B coal-fired station.

The most dishonest thing of all is that the money that was supposed to be given to help the areas has been diverted to subsidise the pits for privatisation. When private owners buy pits, they will find them already subsidised. If the Minister is interested in history, will he look back and find that, when the pits were last privately owned, in the 1930s, 1,100,000 miners were injured and 7,800 killed?

The amount of money made available, allegedly to help that group of people whose livelihood is ended, contrasts with the £10 billion made by market forces when the currency collapsed last September. The Minister has made an utterly unacceptable statement and, apart from the cheering crowds behind him, nobody in the country will believe that he has done anything but confirm the betrayal of his earlier statement.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

When the right hon. Member stands before the House and says that really what the EdF deal was about was exporting to France—he nods his head—I can only ask the House who is misleading whom. I will quote from Hansard. The right hon. Member, when he was in power, said: The link will add to the security and diversity of the CEGB's sources of electricity".—[Official Report, 3 August 1978; Vol. 955, c. 546.] Who, I ask again, is misleading whom?

Photo of Mr Cranley Onslow Mr Cranley Onslow , Woking

I assure my right hon. Friend that, just because an hon. Member happens to be Chairman of a Select Committee, that does not mean that he owns the Committee or speaks for it. As a member of the Select Committee, I can assure him that some of the criticisms which the hon. Member for Sheffield, Central (Mr. Caborn) has levelled at him are not shared by the majority of the members of the Committee. We are very willing indeed that this matter should be debated as soon as possible so that we have an opportunity to emphasise what really matters. British Coal must save itself by its exertions and my right hon. Friend has given it the opportunity, with privatised industry, to do just that.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My right hon. Friend has been immensely helpful to me in advising me on many matters in this connection. I believe that the views that he has expressed represent the views that anyone reading the Select Committee report would form. I very much welcome the fact that the Select Committee said as clearly as it did—and, in the report it published, as fairly as it did—what the reality of the opportunities was.

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Work and Pensions)

May I ask the President of the Board of Trade what I should say to my constituents who work at Maltby colliery, the most modern deep mine single complex in Europe, which has just had £190 million spent on it, now that it has been announced this afternoon that the work force is to be sacked?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Member should tell his work force that we intend to put the pit into a development phase in which £30 million of taxpayers' money will be invested in order to carry on the life of that pit into the next century. If the hon. Member would look to the positive opportunities and stop trying to undermine every opportunity created, his constituents would be better off.

Photo of Mr Winston Churchill Mr Winston Churchill , Davyhulme

I thank my right hon. Friend for the very considerable distance that he has travelled since 13 October last year. Can confirm that the purpose of providing a short-term subsidy to these 13 pits is to put them in a position to carry forward into the future once they have reached world market prices, and that he and the Government will use their best endeavours to help carve out a wider market for coal? Specifically, can he undertake that the Government, once there is a new French Government in place in Paris, will conduct political discussions at the highest level in order to arrive at a situation in which there is a more neutral flow across the interconnector and for exploring the prospects for exports to third countries?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend has taken a particular interest in this matter and I am most grateful to him for what he has now said. Within the legal constraints which I have explained to the House and on which I have taken advice, we are in discussion with the French Government. This is not, perhaps, the best moment in history at which to pursue these discussions, but I certainly give my hon. Friend the assurance for which he asks: they will be continued. We have seen some welcome developments since these discussions got under way and my hon. Friend has played a conspicuous part in that.

On the central issue which my hon. Friend put to me, we are trying to give British Coal the opportunity to seek out these additional markets, partly because we have been able to show where some of those markets will be and partly because the generators are now saying that they wish to negotiate supplemental contracts over and above the base contracts which have been concluded effectively today. So the only lasting position for their future is to seize that opportunity at a moment when there is a drive to competitive positions.

Photo of Mr Doug Hoyle Mr Doug Hoyle , Warrington North

Does the President of the Board of Trade realise that his statement today does nothing for the long-term energy future of this country? Nor, indeed, does it do anything to save Parkside, the last pit in the north-west that is viable and has long-term reserves. What has happened to the right hon. Gentleman's promise to intervene? Does he no longer eat breakfast, lunch and dinner? Does he not realise that his reputation and career are in tatters?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The pit to which the hon. Gentleman refers is one of the 10. He will know that it is now subject to consultation and it would be inappropriate for me to comment on it. If British Coal is determined to proceed to closure, there will be an opportunity for the private sector to make arrangements to take it over.

Photo of Mr Tom King Mr Tom King , Bridgwater

While everybody regrets the loss of any jobs, particularly in the mining industry, is not the truth that no Government of either party has been able to guarantee jobs in the mining industry, an industry which as recently as 1955 employed no fewer than 750,000 people, and that the only guarantee comes from the level of the market?

Does my right hon. Friend accept that his statement will be seen as a genuine and thorough attempt to give the coal industry the best chance for the future without undermining the competitive position of the rest of British industry? Will he also give an assurance that the energy market, the review of the Magnox stations and new investment will be looked at fairly, on their merits?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My right hon. Friend knows a great deal about this market and I can readily give him the assurance that he has sought. I am grateful to him for the way in which he has described the work that we have tried to do. This is about an opportunity, but I think that British Coal is only too anxious to respond to that opportunity. Some of the recent productivity gains that have been achieved will help them on their way.

Photo of Dennis Skinner Dennis Skinner , Bolsover

Is the Minister aware that he has just delivered a confidence trick that would have done Paul Daniels proud? This is set against a background of more than 4 million people out of work, so I plead with the Government not to weep crocodile tears today about unemployed people. More than 50,000 people will lose their jobs in the mining industry and elsewhere as a result of this statement. The Minister said that his hands were tied, but if he had taken the import levels back to 1979 and the opencast levels back to 1979—he always quotes that year—and if he had stopped orimulsion, he would have saved 25 pits. If he got rid of the Magnox nuclear reactors he would save another five pits and if he had had the guts to say to the French that we were not going to have their electricity sold here in Britain, just as the French are saying that they will not buy our fish, we could have saved another six pits and thus saved all 31.

The truth is that we are faced with a gutless and spineless Government who should be got rid of as soon as possible.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The real question for the hon. Member is, what was he doing before 1979 pursuing policies, the logic of which we are discussing today?

Photo of Mr Timothy Devlin Mr Timothy Devlin , Stockton South

Is my right hon. Friend aware, that since this review began, not one new exploration platform has been authorised for the North sea and not one new platform has been commenced at any yard in the north-east of England? While all of us in the north of England want to save the coal industry in our part of the country, by any means that we can, we also realise that the benefits of the future rest on the North sea and the riches that it possesses, and we look forward from today's statement for a further development there in the very near future.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend comes to the heart of the matter. The announcement I made today about Connah's Quay is very important to British industry. Creating jobs there might have a very attractive long-term potential, for work not only in the North sea but in the international exploration industry.

Photo of Mr Greville Janner Mr Greville Janner , Leicester West

Why did the President of the Board of Trade studiously ignore, in his statement, the unanimous report of the Select Committee on Employment on the employment consequences of the pit closures? Could it be because it was the unanimous view of all the members of the Committee, whatever their political views, that both the true national costs and the social effects of pit closures should have been, and were not, taken into account and that no pit should be closed, unless and until there has been full consultation and complete consideration of all the factors in that unanimous report, and every effort had been made to safeguard not only the miners concerned, but the other affected workers, of whom there are twice as many?

Why did not the Government permit their response to the report to be made available to members of the Committee until after the President had sat down, when the report was placed in the Library? Could it be because the Government's response to the unanimous report included this disgraceful sentence: The Government considers that the estimation of the financial costs of unemployment referred to in the Select Committee's conclusions would not be meaningful"?

Surely it is meaningful that there are national costs, personal costs, social costs and misery in the devastating effect referred to in this unanimous report on all the pit closures. Will the President please consult the Employment Secretary and come back with a worthy reply that will help the people whose lives will be wrecked by his statement?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. and learned Gentleman will know that my right hon. Friend the Secretary of State for Employment has replied to the Select Committee's report—an entirely proper course. Let me take one central issue. When jobs are created, very few people go round multiplying the number by three to indicate the number of potential jobs in the economy. However, when jobs are destroyed, people immediately multiply the number by three in order to show the harm that is being done. In my view, in both cases people are likely to be far short of the real world.

Photo of Mr Michael Alison Mr Michael Alison , Selby

Does my right hon. Friend recognise that the new hopes and the new opportunities that his statement gives to British Coal as a whole will be even more advantageous to the low-cost, high-productivity, Conservative-financed pits, such as the Selby complex? Does he recognise that he may even have underestimated the scope for exporting British coal to Europe, particularly from pits like Selby, where the cost of production is already at the low world-cost level?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My right hon. Friend has a deep interest in the matter. I am very well aware of the excellence of the Selby pit. British Coal is now beginning to achieve remarkable advances in productivity. The sad reflection—indeed, the tragedy that lies behind this entire debate—is that, if there had been such achievements years ago, we should be having a very different sort of debate today.

Photo of Mr Bill O'Brien Mr Bill O'Brien , Normanton

What we have had from the President of the Board of Trade today indicates that he has no knowledge of the mining industry. The fact that he has named Sharlston colliery—my colliery—for early closure amounts to a stab in the back for 700 men who work at that pit. Will the President of the Board of Trade explain to those men why, with the fuel fossil levy that all of us pay through our electricity bills, which will be 10 per cent. of the total account from next April, they cannot have a share of that levy to help save the pit? The reserves are there. What we need is investment and a visit to Sharlston by the President of the Board of Trade to hear what the men have to say about his decision to close their pit early.

Will he also explain why, in an area where there is to be early closure of pits, assisted area status is not being afforded to the local authority? What we are witnessing is a stab in the back from the President of the Board of Trade for miners in general, but for Sharlston in particular.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Member will be fully aware that decisions about moving a pit to closure are a matter for the board of British Coal. It is a little unwise of the hon. Gentleman to suggest that the members of that board do not bring a very great degree of expertise to such matters. It would not be appropriate for me now to comment on the individual pits that are the subject of this announcement. [HON. MEMBERS: "Why not?"] Because they have to move to statutory consultation procedures. That is a matter for British Coal to continue, which is what it will do.

Photo of Mr Richard Alexander Mr Richard Alexander , Newark

Is my right hon. Friend aware that, despite the decision to locate the headquarters of the energy commission in Nottinghamshire, the pit closure programme that he has announced today will cause devastation in north Nottinghamshire, particularly at Bevercotes, where I have 500 constituents who will be out of work immediately? Does he recollect giving an undertaking to the president and secretary of the UDM that he would do everything that he could to keep UDM pits open? [Interruption.] How does he square that with the fact that, at the end of the day, only three of the formerly seven UDM pits will remain open?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I am aware of the acute interest that my hon. Friend has in today's announcement. It is not possible for me or British Coal to distinguish between pits on the basis of which unions happen to represent them. We are acutely aware of the remarkable contribution that the UDM made towards the advances of the industry in the early 1980s. While that is true, it is not a factor that can enter into the consultative procedures.

My hon. Friend said that there would be an immediate change and people would lose their jobs. That is not the case. The procedure is that the pit moves into a closure consultation procedure, not for closure, but for a regime of care and maintenance, so that, if the market should prove to be even larger than we are talking of in respect of those that remain open, there is the possibility of reactivating the pits.

But should Bevercotes move through the consultation procedures and as a result British Coal decides that it should close, at that stage there would still be the opportunity for the private sector to make an offer to take it over.

Photo of Mr Ted Rowlands Mr Ted Rowlands , Merthyr Tydfil and Rhymney

Is the right hon. Gentleman aware that, if Taff Merthyr colliery closes, it will be the end of one of the greatest and proudest traditions, the end of mining in the Merthyr valley, even though that valley has more than 20 per cent. of men out of work and another 20 per cent. economically inactive? We passionately believe that we have economic reserves that could go to a power station no more than 15 miles down the road by direct rail line. Will the so-called consultation procedures now allow us to put before an independent review body the case that we want to make for Taff Merthyr colliery?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My reply to my hon. Friend the Member for Newark (Mr. Alexander) is relevant to the questions that the hon. Gentleman is asking. If British Coal determines that the pit should close, it will be available for sale to the private sector. It is already in the consultative process and it would not be right for me to interfere in that process. Anyone who knows south Wales as well as the hon. Gentleman does—and I have some knowledge of the area—knows that there has been a dramatic rundown in the coal mining industry in recent years, a wide diversification of the Welsh economy and a substantial improvement in prosperity as a result.

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland and Lonsdale

Is my right hon. Friend aware that few fair-minded people will wish to argue that he and the Select Committee have not worked extremely hard to find as good a future for the coal industry as is reasonable? How much will the package that he announced today cost the taxpayer? He said that it could cost several hundred million pounds. I am sure he had to be more specific than that with the Treasury. How much is it likely to cost, and did the Chancellor of the Exchequer include that sum in the PSBR estimates that he gave in the Budget last week?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

There is a complication about the questions that my right hon. Friend asks. I cannot know what level of contracts will follow from the opportunites that I have created, so I have given an indication. The Select Committee mentioned rates of subsidy that would, in its judgment, take the price of British coal from the present production costs to world market prices. The language that I chose, to indicate as much support as I could, was that I would embrace the range of figures that the Select Committee had given.

But I am not prepared—the House will understand—to put a sum of money on the table in public, because we are negotiating with private sector companies, which have their own self-interest for which to negotiate, and the moment they see our price, they will seek to increase it or to give less for it than we would wish to achieve.

While I have discussed this matter fully with my right hon. Friend the Chancellor of the Exchequer, it would be naive to put one's negotiating cards face up on the table.

Photo of Mr Lawrence Cunliffe Mr Lawrence Cunliffe , Leigh

Why does the right hon. Gentleman not accept what every financial fuel consultant and accountant in the energy industry accepts, that the aging Magnox power stations are the most expensive fuel on base load for the electricity grid? [Interruption.] Hon. Members can say what they want. It is a fact. Why does not the right hon. Gentleman understand that even half the £1,270 million subsidy to the nuclear industry, which is roughly the amount that should have been given in an answer to the hon. Gentleman from the Chancellor of the Exchequer, or about £500 million, would save seven collieries, not only in the short term but guaranteeing their long-term security for nearly 15 years?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

On reflection, the hon. Member may feel that he has not totally reflected the situation as it is. British Coal today is coming to the end of a contract which was worth something like £1 billion a year to it in the prices that it was receiving, over and above the market price of coal. In addition, as my right hon. Friend the Prime Minister said during questions, about £18 billion has been put into the industry since 1979, so there is no question but that the coal industry has received, and is receiving, substantial subsidies.

Photo of Mr Keith Hampson Mr Keith Hampson , Leeds North West

Is my right hon. Friend aware that all the members of the Select Committee agreed that there were severe limits on how far one could extend the coal-generated electricity market? There are no easy answers such as the acceleration of the closure of Magnoxes. The 16 million extra tonnes we thought might be possible could not be written in stone, simply because it was predicated on a total closure of the French link. Will he therefore confirm that, in offering his subsidy to British Coal, he is seeking to increase the market in that range of 12 million to 15 million tonnes a year, and will he confirm that to bring the price of British coal down to import price levels, it is vital that the productivity of British pits is enhanced as quickly as possible? That will need assistance from the House, enabling British Coal to improve management practices and working practices in the pits and enabling the private sector to do a better job than it otherwise would do.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

As a member of the Select Committee, my hon. Friend knows a good deal about the subject. He is right to point to the essential need for British Coal to achieve its productivity levels, not just in the pits but in the management of individual pits and in headquarters staff. These gains must be achieved if there is to be a competitive future for British Coal. I am assured by the management of British Coal that it intends to move forward with dispatch in this direction.

My hon. Friend then asked whether I would give a broad indication of market. I would have to say, having looked at the Select Committee report, that even if one takes out the calculations included for EdF, the assumptions of the Select Committee are still at the top end of the range. They are significantly above, for example, what my own consultants, Caminus, indicated and Caminus are above what British Coal indicates as the likely market, so there is a judgment to be made. The only way to determine the market, however, is for customers to sign contracts, and the customers in this case are bound to be, significantly, the electricity supply industry. It has its own views of what the market will be. It is only on that view or any other market that we can find that contracts will be forthcoming.

Photo of Mr John Evans Mr John Evans , St Helens North

Is the President of the Board of Trade aware that 800 miners and their families at Parkside colliery in my constituency will have listened to his statement today with anger and dismay? In a 20-minute presentation to the House, he said not one word about Parkside and the other nine collieries which, it would appear from his statement, are doomed. Will he confirm that British Coal is determined to close Parkside colliery, a colliery that has been profitable in each of the past six years, and throw 800 miners on to the scrap heap in an area where there is already more than 15 per cent. unemployment, at considerable cost to the taxpayer? Is it not a fact that the short-term fix that he has offered to the House today will do nothing for the British mining industry and, in fact, seeks to save his own job?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Member will be aware that 30 per cent. of the miners from Parkside have already accepted since last October the redundancy terms that we have made available to them. [Interruption.] He will also be aware that the reason why I did not mention the 10 collieries in my statement is that they are subject to the procedures of consultation and it would be wholly inappropriate for me to refer to them.

Photo of Patrick Cormack Patrick Cormack , South Staffordshire

In view of the immense time and trouble that my right hon. Friend has taken to produce this report, for which I thank him, and in view of the detail that it contains, would not it make sense if we debated it slightly later next week, when people have had a chance to digest it and make representations to hon. Members? If we were to debate it on Wednesday or Thursday, it would still be before Easter.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend raises a matter that is essentially for my right hon. Friend the Leader of the House. I must allow him to judge the order of priority of Government business.

Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw

Is the Minister aware that he has offered nothing to the coal-mining industry today? Will not the subsidy simply come out of the VAT that is to be levied on electricity in a year's time? Will that subsidy simply go to encourage the privatisation people, who will come into the industry to try to lower wages arid make miners work longer hours and then, if the miners refuse, close the pits because they are not interested in digging coal, but rather in getting cheap land, railway sidings, the property, everything else that is attached to a pit—

Photo of Mr Eric Clarke Mr Eric Clarke , Midlothian

Yes, and miners' pension rights.

Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw

And pension rights, as my hon. Friend says. They will use his subsidy to make massive profits without producing one extra tonne of coal.

Why has the right hon. Gentleman said nothing about assisted area status? He quotes 1979, when my area was given assisted area status by the Labour Government, but his Government took it away, with no promise at all of ever putting it back.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I assure the hon. Member that there will be no threat to any pension rights of any miners in whatever circumstances develop. [Interruption.] The longer Labour Members tell their constituents the sort of things that we are hearing in the House, the longer the threat to British Coal will exist. If we had faced the need to modernise the coal industry throughout the early decades of this past half-century, we would have seen the coal industry of this country enjoying a far larger market than it currently does. It is because the Labour party told them that there was some other way that we have delayed making many of these difficult decisions.

Photo of John Butterfill John Butterfill , Bournemouth West

Does my right hon. Friend accept that the Select Committee will wish to study in some detail the White Paper that he has presented to the House today? We are all very grateful that he has accepted our principal recommendation, that British Coal be given a subsidy to enable it to become world-competitive over the next few years. As my hon. Friend the Member for Leeds, North-West (Dr. Hampson) said, that will require considerable productivity gains. While we accept that he has done a great deal to try to influence the French, will he also accept that, whatever the legal technicalities may be, it is not really acceptable in terms of Community spirit that the traffic across the interconnector should be all one way?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend is right. I can assure him that, of all the subjects we have had to look at in the context of this review, it would be fair to say that the interconnector has taken a disproportionately large amount of time. It merited a great deal of time, and I was the first to recognise that, but I had no choice but to publish for the House the summary of the legal opinions—because I did not rely on one alone—that I was presented with. I could find no way through and I have published it for the House. So one must adopt the only alternative route, which is to discuss the thing with our French opposite numbers. This my hon. Friend the Minister of State has done, and I believe that we will have an improved position as a result.

Photo of Adam Ingram Adam Ingram , East Kilbride

Is it not the case that the President of the Board of Trade inadvertently misled the House this afternoon when he said that he had considered every recommendation of the Select Committee report? Having read through it very quickly, I do not think that that is the case, and the record will prove different. Is he aware that Scottish Power and its Scottish consumers take a disproportionate share of the sulphur dioxide emission reductions? What guarantee can he give Scottish consumers that their electricity prices will not go up and that they will not be further disadvantaged by his statement today?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I hope that the hon. Gentleman is wrong; certainly, he is describing something entirely different from my intention. I have assured the Select Committee, and instructed my Department, that I want the White Paper to respond thoroughly and comprehensively to the report that I have praised in the House. I believe that the White Paper covers each of the Select Committee's substantive recommendations. Of course, we shall debate these matters further; if the Select Committee wishes to pursue them with me in its own way, it is fully entitled to do so and I shall co-operate.

The hon. Gentleman asked me for assurances about future prices. That is not a realistic question to put to a Minister, who cannot be expected to give hard and fast views on prices in a complex marketplace without any time constraints.

Photo of Michael Spicer Michael Spicer Chair, Parliamentary Office of Science and Technology

Opencast coal is cheap and sulphur-free; there are large stocks of it and, when blended with deep-mined coal, it greatly improves the marketability of such coal. Will my right hon. Friend tell us a little more about why he believes that production of opencast coal will fall from 16 million tonnes a year to 12 million?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I have consulted British Coal about that. As I said in my statement, in evidence to the Select Committee, British Coal anticipated that the present output of 16 million tonnes would fall to 12 million; it now believes that it will fall further.

I appreciate the considerable advantages of opencast mining, particularly in derelict land reclamation. I also understand the arguments for fuel mix, which render opencast coal especially important in terms of both price and technical qualities. There is another side to the matter, however. My right hon. and learned Friend the Secretary of State for the Environment will this afternoon publish his planning guidance, which suggests that the environment and its protection must also be weighed in the balance. It is on that basis that judgments can be made in the future.

Photo of Eric Illsley Eric Illsley , Barnsley Central

Is it not the case that 12 pits will close now, six will be mothballed—which means that they will never open again—and one, Maltby, will gain development status? Nineteen pits will be closed, while 12 will not be subsidised for two years, until the union members accept the redundancy terms that they will be encouraged to accept during that period.

The right hon. Gentleman talks of the market and the loss of the market. Has not the market been rigged against coal ever since privatisation? Gas-fired stations can bid into the pool at a negative price: in other words, they bid their electricity into the pool at nothing, knowing full well that they will then be brought on to the grid. They must compete with orimulsion—which can be piped in for next to nothing because it comes from Venezuela—and with opencast coal. Such coal is not from derelict sites; 93 per cent. of it comes from green field sites that are left as green field sites afterwards. It is a rigged market, and the right hon. Gentleman knows it.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I know that the Select Committee raised some aspects of the hon. Gentleman's point, but, although the Committee asked me to examine the question of bidding into the pool, I felt that it was not convinced that a simple solution existed. Having considered the issues, I concluded that the Committee was right to have its doubts.

I wholly reject the suggestion that the market is rigged. As I said in my statement, even if British Coal secures no further contracts, it will still be a substantial company in world coal terms. That in itself is an opportunity. I also wholly reject Labour's defeatist view that when I accept the Select Committee's recommendations, I enable British Coal to negotiate for additional markets. The thrust of Labour's view is that there is no additional market, but I do not accept that.

Photo of Mr Rod Richards Mr Rod Richards , Clwyd North West

Is my right hon. Friend aware that his statement will be widely welcomed in north Wales, especially by those who work in Point of Ayr colliery? Is he further aware that the section 36 consent that he has given to the Connah's Quay power station heralds a new economic era for north-east Wales, generating thousands of jobs and many hundreds of millions of pounds in investment?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend is absolutely right. The Connah's Quay announcement is a good one. Along with my right hon. Friend the Secretary of State for Wales, my hon. Friend will know better than most that we went through a similar difficult readjustment in the context of Shotton. Without doubt, the Shotton area has experienced a transformation as a result of investment and diversification. We must always look at how we can help declining industries to reach a position where new jobs, investment and companies and a better future are on offer.

My hon. Friend is absolutely right to point to Connah's Quay. Not only will it help jobs in north Wales, which is extremely welcome; it will be a signal to one of Britain's most successful industries.

Photo of Geoff Hoon Geoff Hoon , Ashfield

The right hon. Gentleman seems to be keen on quotations. May I draw his attention to page 68 of the White Paper, which states: The United Kingdom undoubtedly has the lowest cost coal in the Community. How will the Secretary of State explain to the miners of Silverhill—whom he appears today to have finally condemned to lose their jobs—that the German, French and Spanish industries will continue to produce 100 million tonnes of coal? Why are those countries' Governments so successful at subsidising their industries, while our Government sell our miners so short?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I am afraid that the hon. Gentleman is misinformed about what is happening to the coal industry in Europe. I, too, have looked at the figures and perhaps on Monday we shall have a chance to debate these matters. By and large, the coal industry is in decline across Europe and in Community countries such as ours.

Photo of Mr James Pawsey Mr James Pawsey , Rugby and Kenilworth

Can my right hon. Friend elaborate on the part of his statement that referred to privatisation? Can he say what interest the private sector has displayed in acquiring the pits that it is proposed to mothball? How many pits will be involved and how many jobs?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

It is encouraging that we have received a number of inquiries, but it is fair to add that, at the stage that we have reached, such inquiries are bound to be tentative. My hon. Friend the Minister of State, in partnership with British Coal, hopes tomorrow to see a number of people who have approached us in the context of privatisation.

I very much hope that, as the position has now been clarified, we shall be able to see how far the interest that has been expressed can be extended. As I told the House, I have announced £ million of Government support for those who want to prepare management buy-outs. As I have said before, I do not wish miners to buy into pits that have no significant future, as an emotional reaction to admittedly traumatic circumstances. I shall do my best to warn them of the difficulties; I think that that is only fair.

Photo of Michael Clapham Michael Clapham , Barnsley West and Penistone

Today's statement shows that the President of the Board of Trade has not been listening and has not been reading. He talks of the subsidy. The Select Committee suggested that the subsidy paid to British Coal as price support should be paid within the context of the franchise market, but there has been no mention of the franchise market. Has the right hon. Gentleman explored the possibility of extending that market? Has he examined the other recommendations to which my hon. Friend the Member for Sheffield, Central (Mr. Caborn) referred? Has he looked at the conclusion of the Select Committee report, which states that there is a substantial market in excess of that which the Select Committee recommended for price support?

The Committee's recommendations add up to a market of 62 million tonnes, enough to keep all 50 collieries working. It should be borne in mind that seven of those collieries will be exhausted in the next five years. Will the right hon. Gentleman confirm that his recommendations, and today's statement, have more to do with preparing the industry for privatisation than with developing an energy policy?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

Preparing the industry for privatisation is a very important part of an energy policy. I believe that, with hindsight, that will prove to have been the case with coal, as it has proved in so many other privatised industries that have been able to develop potential in the private sector that they were denied in the public sector.

I have considered the protection of the franchise, but I decided that it would not increase the size of the available market. I have said that the subsidy that we are prepared to make available is not dependent on extending the market. It is an offer that British Coal and the private sector—if it can find additional markets—are now able to exploit.

Photo of Mr Barry Porter Mr Barry Porter , Wirral South

I am the one member of the Select Committee who did not vote for its report, on the basis that I thought that the extension of the market was on the optimistic side. I am grateful, however, to my right hon. Friend for dealing in detail with the Committee's recommendations. His response has been extremely realistic and sensible. I wish to thank him especially for the decision that has been made in respect of Connah's Quay and gas.

We must accept that there will be severe social difficulties in the mining communities. Will my right hon. Friend examine again, in the context of the entirety of the White Paper, what redundancy payments can be made to miners? Bearing in mind that it must be accepted that jobs will go, let us make the terms of redundancy as sensible and remunerative as possible, as we did for the dockers in days gone by.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I am grateful to my hon. Friend. I hear what he says about not having voted for the central recommendation contained in the Select Committee's report. As I have done my best to praise that recommendation, I hope that he will not hold that against me when it comes to any decisions that the House might have to make.

The redundancy scheme that I announced last year is a generous one. It is almost without parallel anywhere else in the public or private sectors. It would be to let down the members of the coal industry who have accepted it over the past few months if I were now to increase the payments. The Government have no plans to increase the level of the already extremely generous redundancy scheme.

Photo of Mark Fisher Mark Fisher , Stoke-on-Trent Central

As the President of the Board of Trade has not mentioned the 10 pits that are to be closed, will he undertake to return to the House to make a further statement, or are they condemned to closure in silence? Does not he understand that the deep anger that people expressed following his closure statement in October 1992 will be refired and redoubled by his statement today? Last October, the British people expected the right hon. Gentleman to work for a proper, unrigged market for coal and an energy policy that made use of all our assets. What they have instead is a political stitch-up that will destroy industry and create only unemployment. Does the right hon. Gentleman realise that the British people will not forget the smirk that played over his face when he answered questions following a statement which condemned hundreds of thousands to unemployment in the years ahead? He smirks and they will suffer.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

When the hon. Gentleman and his colleagues can get elected to speak for the people of Britain, I shall listen to what they say on behalf of the people of Britain. I reject the sneering and contemptible way in which he has dismissed one of the best offers that I have been able to make to the coal industry.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

Is my right hon. Friend aware that what he has said this afternoon will substantially reassure the many hundreds of people who contacted me in my constituency last year? Does he agree that there is a conclusion that they could draw from his statement and the evidence to which he has referred? That conclusion is that the economic analysis that my right hon. Friend made last year was right then and is right now. He has enabled those within the industry to face the consequences of that analysis.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

Certainly, my hon. Friend is right. The decision that I announced in October 1992 was an extremely harsh one, and I felt anguish at having to make it, but economically the arguments were clear. Public opinion took the view that it did. As a member of a democratic political forum, I would be the first to recognise the strength of public opinion in such circumstances. We have come forward, therefore, with a set of proposals that have the virtue of maintaining a realistic background but giving a new opportunity, at least in part, to significant parts of the industry. It is possible to do that only at a cost of hundreds of millions of pounds to the taxpayer. That means that other people in other industries will have to pay the bills that are necessary to make my announcement possible today.

Photo of Mr George Stevenson Mr George Stevenson , Stoke-on-Trent South

Does the right hon. Gentleman understand that as a result of today's announcement, which must be described as one of the greatest examples of industrial butchery that the country has ever seen, he will qualify his nickname of Tarzan to become the political equivalent of Hannibal Lecter? He never mentioned the unemployment that will be created when the measures contained in the statement are implemented. Similarly, he did not refer to the fact that he has been presented with effective arguments on behalf of the 10 collieries that are earmarked for immediate closure. Those omissions will be seen as nothing short of a national disgrace and a betrayal of his commitment to intervene in the market.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman has heard me say many times that I cannot comment on the 10 pits that are subject to the consultative processes. British Coal must undertake those processes and reach conclusions on the basis of them. I cannot interfere in that.

Photo of Mr Jacques Arnold Mr Jacques Arnold , Gravesham

May I welcome the emphasis that my right hon. Friend put on measures to help large electricity users? Is it not the position that excessive electricity costs in heavy industry, such as the Blue Circle cement works, Scotts and other plants in my constituency, put thousands of jobs at risk? We have heard nothing from Opposition Members about jobs outside the coal mining industry.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend, as I would expect, seeks to preserve the proper balance. A huge number of customers and a great deal of British competitiveness are at stake as a result of the issues that we are discussing. There is an important opportunity to enter into discussions—I cannot predict the outcome of them—with the large users.

Photo of Mr Derek Enright Mr Derek Enright , Hemsworth

Did not the President of the Board of Trade have the opportunity to put in place a long-term strategy for energy? Instead, he has produced a mish-mash of contradictory tactics. I ask him a specific question concerning the 10 pits that are destined for closure. Bearing in mind the fact that the right hon. Gentleman has had much to say about the consultation process, will he condemn British Coal for announcing in its press release, on the day that it announced that it would undertake consultation procedures, that it would close all 10 pits? Will he defend the 10 pits from closure, or will he hand them over to his right hon. Friend Herr Himmler, the Secretary of State for Social Security?

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. I am sure that the hon. Member will do the honourable thing and withdraw.

Photo of Mr Derek Enright Mr Derek Enright , Hemsworth

I shall certainly withdraw, Madam Speaker.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman may feel that his observations are not in keeping with the reality. He must be fully aware that I cannot and will not become involved in the slagging match that he requests over the management of British Coal.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

In his welcome and balanced statement my right hon. Friend spoke of the continuing negotiations between the generators and the coal industry and of the privatisation process. In that context, will he be encouraging those who will be seeking to put pits and coal-fired power stations together so that coal can have more direct access to the energy market?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend understands one of the potentials. It is not easy to see precisely how to bring about what he says, but it is something that is on the table for discussion. Many complex arguments are involved and I have had discussions which have focused on them. There are no announcements that I can make today.

Photo of John Cummings John Cummings , Easington

Is the President of the Board of Trade aware that the consequences of the closure of the Vane Tempest colliery and the mothballing of Easington are not confined to the many tens of millions of tonnes of coal lying under the North sea, which will never be extracted by means of an opencast operation? In Easington, with a population of 20,000, 1,693 unemployed people are chasing 12 vacancies. It is clear that unemployment will rise to over 20 per cent. Does not he believe that there are markets around the Thames and in Europe and that we can provide the necessary resources—for the benefit of the people of Easington and of Europe?

Has the right hon. Gentleman applied himself to the question of the pumping arrangements that are absolutely necessary in the county of Durham to prevent an ecological time bomb from going off? Will he join me in applauding the magnificent efforts of the miners since October last year? They have broken all productivity records—a fact that the right hon. Gentleman failed to mention.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman will know that more than 51 per cent. of the miners in Vane Tempest have already gone. I believe that some of them have already secured alternative employment.

The hon. Gentleman has raised an important subject which I happen to regard as one of the most tragic aspects of this whole affair. In February, the shortest month, British Coal mined at an annual rate of 60 million tonnes, with 10 pits not coaling and with 9,000 fewer workers. Had that escalation of productivity been going on earlier, British Coal would have been incomparably more competitive. The longer the Labour party denies this, the longer they deny the spirit and determination of the miners, who have to go and negotiate the supplementary contracts that I am talking about.

Photo of Mr Stephen Milligan Mr Stephen Milligan , Eastleigh

May I add my congratulations on my right hon. Friend's statement? I notice that it received a near-unanimous welcome among Conservative Members. It struck a balance between the interests of preserving coal miners' jobs at a time of high unemployment and developing a real market which is in the interests of other industries. Does my right hon. Friend agree that it is hypocritical of the Opposition to accuse the Government of rigging the market when it is their policy to keep every pit open, regardless of the economics and even if the coal has been exhausted?

What would be the likely cost in terms of jobs in other industries and the likely bill to the taxpayer if we adopted the foolish policies of the Opposition?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend is right. The Labour party is talking the language of opposition. It never talked that way when in government, when it closed pit after pit—and Opposition Members know it.

Photo of Mr Eric Clarke Mr Eric Clarke , Midlothian

May I put the record straight? I have fought the pit closures imposed by all Governments, including the Labour Government. I am here today to say the same as I told the Labour Government in the past.

I am disappointed. This has been a wasted opportunity to maintain a viable coal industry and the freedom to have cheap indigenous fuel. I must tell the right hon. Gentleman that many bitter people back home will not even be disappointed, because they are cynical enough to realise that he is going to sell them out. How can the Secretary of State claim to have negotiated? The Government own 100 per cent. of the coal industry and 40 per cent. of the electricity industry, yet they cannot do a deal. The right hon. Gentleman must be some Minister.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman illustrates the dilemma. I do not dispute his sincerity in fighting for pit after pit. The real test, however, is whether his colleagues, if they were sitting on the Treasury Bench and had to confront the decisions that I face, would have acted any differently. They did not—and the hon. Gentleman's remarks clearly show that, although he fought, he always lost.

Photo of Mr Raymond Robertson Mr Raymond Robertson , Aberdeen South

Is my right hon. Friend aware that he has today allayed the deep fears of tens of thousands of workers in the North sea oil and gas industries who know all too well that, had the Labour party had its way, the miners' subsidy would be their redundancy notice? Does he accept that I care just as passionately about the jobs in my constituency as Opposition Members care about the jobs in theirs? Just as it is unacceptable for them to tell their constituents to prepare for redundancy, it is unacceptable for me to go to mine and say the same?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

There is no more eloquent case than the one that my hon. Friend has paraded. That is the dilemma. My hon. Friend represents a constituency at the heart of one of Britain's great industries. Am I to subsidise and keep going the pits, the effect of which will be to keep jobs in the pits which will be denied to the North sea oil industry? That is the choice; there is no escape from it. I therefore agree with my hon. Friend.

Photo of Joan Walley Joan Walley Shadow Spokesperson (Transport)

The right hon. Gentleman is the President of the Board of Trade. He has had 14 years to produce a coherent energy strategy, but none has been forthcoming.

Why has not the right hon. Gentleman mentioned what is to happen to the 10 pits earmarked for closure? How can he pretend that the contracting procedure is nothing to do with him? He is the President. We need a proper energy policy. We do not want coal imports coming into our ports. We want a coherent opencast policy. What am I to tell constituents when they hear the results of this statement?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I think that I can help the House, because I have with me the "Plan for Coal" published in 1974—[Interruption.] This was the heyday of national planning; it was all about prediction—[Interruption.] I know that the Labour party does not want to listen, even though Opposition Members keep harking back to how they would have done things differently—forgetting what they actually did. So I shall tell them what they did. They published the "Plan for Coal". This is what it said—[Interruption.]

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

On second thoughts, I will forbear. There is a debate on Monday.

Photo of Jacqui Lait Jacqui Lait , Hastings and Rye

My right hon. Friend referred to special measures to help the large energy users. Has he any estimate of the number of jobs that would be lost in steel and chemicals if they were not recipients of energy at internationally competitive prices?

My right hon. Friend referred to the nuclear review. Can he give us an estimate of whether we can expect it this year?

As there is 14 per cent. unemployment in my constituency, can my right hon. Friend assure me that we will have a statement on the assisted areas map before we rise for the Easter recess—

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. That last question is totally out of order. It should be addressed to the Leader of the House—if ever we get to business questions.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I can assure you, Madam Speaker, that I share your ambition to get to business questions.

My hon. Friend raises an important point about the large industrial users. They are a tough lot. They will tell me what they think potential job losses are. I have to stand back a little before accepting their forecasts hook, line and sinker, but I accept that there is a case. I intend to examine it in the way that I have described. My hon. Friend was right to bring it to my attention.

Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire

Today we have witnessed a performance by the Secretary of State and he has promised us another on Monday. It was silly, knockabout, political stuff when what we needed was an act of statesmanship. That is what my constituents, many of whom are miners, want for their future.

The Opposition, the Liberal Democrats, the Nationalists and the Unionists should unite in opposition to the White Paper measures, and we hope that those in the Conservative party who say that they are rebels will join us.

Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire

If we unite against the proposals successfully, will the Secretary of State resign?

Photo of Mr Keith Mans Mr Keith Mans , Wyre

Will my right hon. Friend look again at the £95 million levy paid to EdF each year, with a view to stopping this money being paid to the French until they make it clear that it is being used to pay for the decommissioning of their nuclear power stations, not to subsidise their operating costs?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

Complex discussions about all these matters are being held with EdF, so I ask my hon. Friend not to draw me too far on that one. The discussions have moved in a positive way and I will continue to hold such discussions—I hope, with the new French Government.

Photo of Chris Mullin Chris Mullin , Sunderland South

Is the President of the Board of Trade aware that I have constituents working in four of the pits on his original hit list and that they will not be under any illusions as a result of the statement? We have heard the nonsense about care and maintenance before when the right hon. Gentleman's Department came for our shipyards. There is now a large, deserted hole in the ground where the shipyards used to be. Everyone knows that, to understand why we are in the current situation, we need go back no further in history than to the moment of electricity privatisation. Would it be in order for the right hon. Gentleman to say a small "Sorry" for that folly for which we are all now paying the price?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I am sure that the hon. Gentleman would wish me to convey his message to the 5,000 new job holders that I announced this afternoon.

Photo of Alan Williams Alan Williams , Swansea West

During the past week, the Government have tried to justify VAT on fuel in terms of energy efficiency. In that context, what sense does it make to be burning large quantities of our gas resources in power stations with 40 per cent. efficiency, when that gas could be used in our homes and factories with 80 per cent. to 90 per cent. efficiency? Is not today's statement a frittering away of our gas resources? Does not it sound the death knell of the coal industry which we will desperately need in the longer term?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

That argument was carefully explored by the Select Committee and the hon. Gentleman will find that it did not accept his analysis. However, I am sure that the hon. Gentleman will recall that the Labour party and the whole House are committed to achieving our environmental targets. We cannot achieve those targets without taking decisions about constraints on energy use.

Photo of Mr Gerry Bermingham Mr Gerry Bermingham , St Helens South

Will the right hon. Gentleman give me a little assistance? I represent a constituency which had two coal mines, at Bold and Sutton Manor, which have both now closed. The employees of those mines went to Parkside in the constituency of my hon. Friend the Member for St. Helens, North (Mr. Evans) which is now about to close. In other words, the mining fraternity has nowhere to go in St. Helens. Can the right hon. Gentleman tell me, so that I can tell them, what he is going to do for areas like St. Helens which have lost a whole industry?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

What we did for Shotton, for Corby and for the whole of the south Wales mining industry. We will provide an opportunity for new investment, new jobs and diversity of hope and the opportunity to spread employment in a range of new industries that will cope with the market of tomorrow.

Photo of Mr Jimmy Boyce Mr Jimmy Boyce , Rotherham

Is the right hon. Gentleman aware that the people in the mining industry, in engineering and in all the other industries that will lose workers as a result of the plan are not the slightest bit interested in what happened 15, 20 or 40 years ago? They are interested in what will happen in the next six months. Is the right hon. Gentleman further aware that his squalid attempt to link the report of the Department of Trade and Industry with the report of the Select Committee, to which, after all, the Government referred the matter, fools no one? If he is serious about the Select Committee recommendations, why will not he follow the recommendation to return the 10 pits to coaling and go immediately into the review procedure? Or does the right hon. Gentleman not have the guts to do that?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I realise that it may be necessary for the hon. Gentleman to say those things. Of course the people who face the uncertainties and who may lose their jobs are not interested in what happened five weeks ago, let alone five or 15 years ago. That is not the real issue for the House. The issue is whether we should tell those people the truth and the truth was as clear and as truthful for the Labour party when it was in government as it is for me. I can no more save the industry artificially than the Labour party could when it was in Government. However, now that Labour is in opposition, it tries to pretend that that is not the case. If there has been a time when Labour refused to close pits because it had some magic way of saving them, I would listen to Labour Members. The Labour party has forgotten what it did.

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

The right hon. Gentleman will accept from me that it would be grotesque in the extreme if Parkside pit, in the constituency of my hon. Friend the Member for St. Helens, North (Mr. Evans), was closed while, at the same time, British Coal was allowed to opencast what is essentially a huge area of green belt in my constituency and that of my hon. Friend the Member for Leigh (Mr. Cunliffe) in the not too distant future.

The right hon. Gentleman's contribution on opencast was a little disingenuous. He talked about 17,000 people being employed in the industry. In most opencast sites that I am aware of, there is also a downside. Many industrialists and businesses go out of business as a result of the intrusion of opencast in their areas. In addition, areas with hugh opencast sites discourage inward investment. There are two sides to the story and I urge the right hon. Gentleman to take that into account.

The figures to which the right hon. Gentleman referred do not bear any relationship, in terms of tonnage, to the information given by British Coal to the Select Committee.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The information that I gave to the House was the information that I received from British Coal. Naturally, British Coal will read what the hon. Gentleman has said. However, with regard to opencast, I hope that the hon. Gentleman heard my words because, frankly, they were almost indistinguishable from the comments that he made.

Photo of Mike O'Brien Mike O'Brien , North Warwickshire

Is the right hon. Gentleman aware that up to 20,000 people in north Warwickshire face the threat of opencast and that 587 miners at Daw Mill pit face redundancy? If he really wanted to save miners' jobs, should he not have accepted the Select Committee's plan virtually to halve the production of opencast by giving local people a veto—the right to say no to opencast?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman knows that we cannot just say that local people have the right to say no. There is no way of measuring how to judge the right of an individual to make such a decision, over a particular period or in which representative forum. We therefore have a planning regime. Hon Members will want to consider the new planning regime that my right hon. and learned Friend the Secretary of State for the Environment published this afternoon.

Photo of Sir Peter Emery Sir Peter Emery , Honiton

Having sat through all the questions this afternoon, may I ask my right hon. Friend whether he will accept the point made by the right hon. Member for Chesterfield (Mr. Benn), as I was the respective Minister before him? When the cable under the channel was first considered, it was to be introduced to bring electricity into this country for peak shaving purposes. Will my right hon. Friend also emphasise the fact that every Minister since Alf Robens has tried to present at the Dispatch Box a way in which the coal industry could save itself? That dates back decades. In my judgment, no Minister has tried, from the Dispatch Box, to put together a better package to assist the coal industry than my right hon. Friend has today.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

Since I have been a Member of this place, I have been aware of my right hon. Friend's deep interest in and knowledge of the industry. I deeply appreciate what he said. We have done our best to respond to the work, which I have praised, of the Select Committee. We have tried to recognise that, in the end, it is about competitiveness and marketplaces, as the Select Committee indicated. We have given British Coal the best chance that we prudently think that we can, within the constraints of public expenditure, to go out and win a place in that marketplace. I cannot do more than urge hon. Members to encourage their constituents to recognise that there is a huge opportunity here, which is not to be disparaged or undermined by the language that Opposition Members have used to describe it.

Photo of Mr Martin O'Neill Mr Martin O'Neill , Clackmannan

May I remind the right hon. Gentleman that, on 21 October, he said that he would examine the ways and means to increase the use of coal? However, paragraph 31 of the report states that the increase in stocks, which I realise are not the right hon. Gentleman's responsibility as the good winter has been a major contributory factor, has resulted in the need for a reduction in coal output. He said that he cannot guarantee supplementary sales. Does he accept that the Minister for Energy, sitting next to him, has already indicated that there will be a 2 per cent. drop in coal output this year as a consequence of the imposition of VAT?

In all these matters, the statement today is a testament of failure. The right hon. Gentleman said that the coal industry, and anyone else who can do so, will have the opportunity to find new markets. No Opposition Member is impressed by the failure, after five and a half months of hand-wringing, to provide any new or substantial markets for coal.

Will the right hon. Gentleman tell us how many people will be made redundant as a consequence of the announcement? We know that six collieries will be placed on care and maintenance and that Maltby will go into development. Development work is not carried out by British Coal employees but by contractors. Will he say what will be the net effect on jobs at those seven collieries of the development work which is to be carried out?

A number of people are not prepared to be impressed by the failure that the right hon. Gentleman has announced or by his soft-soaping and avoidance of giving us the serious figures of the unemployment which will follow as a consequence of today's statement.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

There has been an immensely depressing response from the Opposition. If the House were considering today a review by the Government, it would at least be understandable if it were criticised by Her Majesty's Opposition, but when an all-party Select Committe has crawled over every conceivable opportunity—and I have accepted the bulk of its recommendations—it is lamentable that the Opposition are now trying to wriggle away from what was an agreed all-party report. It undermines the credibility of the Select Committee procedures of the House.

I hope that the Opposition will not mislead their constituents into thinking that there is nothing in the opportunities of the sort that I have provided.