Coal Industry

Part of Prayers – in the House of Commons at 10:28 am on 10th November 1999.

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Photo of Mr Eric Clarke Mr Eric Clarke Labour, Midlothian 10:28 am, 10th November 1999

I congratulate my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) on securing the debate and on his very able speech. I must declare an interest: I am a consultant to Scottish Coal. My speech will concentrate on the critical financial difficulties in which the Scottish coal industry finds itself due to the problems of delivering opencast coal to customers down south in England.

The problem arises from the fact that a rail company, EWS, has given priority to moving by rail foreign coal that is unloaded at the deep-water port of Hunterston. EWS has a near monopoly in handling bulk freight, and has taken capacity from indigenous coal producers in order to satisfy the contract for imported coal. The loss of revenue to Scottish Coal from the sale—or non-sale—of coal costs £500,000 a week. The knock-on effect is obvious.

The coal produced in Scotland is low in sulphur and is blended with high-sulphur coal from deep mines in England, which makes the coal acceptable to generating units. The resulting cash flow problems in Scotland and England affect the viability of deep mines and miners' jobs.

The haemorrhage of money cannot go on. Foreign coal poses a threat due to the strength of the pound and direct and indirect subsidies by foreign Governments and multinationals. In South Africa, rail companies are subsidised to bring coal to ports. Polish coal subsidies have been mentioned, while in the case of Colombian coal, negotiations take place at the point of a gun.

If we are to have a coal industry in the United Kingdom, the Government must step in. All foreign coal is bought in American dollars, and that causes a balance of payments crisis. Every tonne of British coal that is burnt represents a saving to the Exchequer and a job in the UK. It is logical that the Government should take an interest, in the short term and the long term, if the coal industry is to survive.

I make one special plea. The freight problem cannot wait to be solved. It must be given a higher priority, because a week of costs at £500,000 is a week too long.