§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]10.18 pm
§ Mr. Speaker
Order. That matter has been dealt with. I do not think that points of order arise from it.
§ Mr. Donald Coleman (Neath)
I appreciate the opportunity to raise the matter of Abernant colliery. The recent announcement by British Coal that it intends to close the colliery and Wernos washery is a severe blow, not merely because of the loss of jobs in an area which at present has one of the highest unemployment rates in the United Kingdom, but because the hopes of the whole Welsh—[Interruption.]—
§ Mr. Speaker
Order. Will hon. Gentlemen and hon. Ladies who are not staying for the Adjournment kindly leave the House quietly?
§ Mr. Coleman
As I was saying, Mr. Speaker, the closure is a blow to the employment prospects of an area with high unemployment, as well as to the Welsh anthracite coal industry. About 800 men will become unemployed as a result of the closure.
I am well aware of a meeting with the men at Abernant this week, when the previous decision to fight the closure was set aside. I understand clearly the reason for it—that the £5,000 severance money on offer will not be available after March. No one can expect men to pass up such a sum of money for something uncertain. The Minister should reconsider the matter. I ask him to urge British Coal to extend the time limit for this payment, as I want to demonstrate that the closure of Abernant is not in the national interest.
South Wales is the only area in Britain where anthracite is mined. It is the prince among coals, being naturally smokeless, and it is much sought after by merchants and domestic consumers alike. It is perennially in short supply. In 1987, this country imported more than 500,000 tons of anthracite, much of that at inflated prices and of relatively poor quality.
In addition, we imported at least as much again of anthracite substitute, often at a higher price. The average cost of anthracite imports was £84 a tonne. That meant that the country's balance of payments was worsened by no less than £42 million last year, simply because the pit closure programme denied men and management in south Wales the opportunity to mine and wash our abundant reserves of anthracite.
For those who believe that all coal is dirty stuff taken by the trainload into English power stations, let me explain about Welsh anthracite. In every respect, it is a clean and prized fuel. It does not pollute the atmosphere with sulphurous and nitrous emissions. It is smokeless and has the highest calorific value by weight of any coal. It is now, 1254 and will be in the future, a real and acceptable alternative to the increasing problem of obtaining imports of natural gas for domestic, industrial and public heating systems.
As our North sea reserves run out in the 1990s, so our dependence on imports of fuel will increase. If we do not secure our capacity to mine anthracite now, we will find ourselves in the same kind of dilemma as we were in after the OPEC price rises in 1973 and 1979. We were paying through the nose for imports of vital fuels. The supply of fuels will be under the control of profiteering foreign cartels.
During the final months of 1987 and the early weeks of this year, the coal industry witnessed an all-out assault on the European anthracite market by Chinese coal exporters. The Chinese Government are allowing their coal agents to undercut prices wherever and whenever they recognise the opportunity to capture a permanent niche in an important market such as the one in this country. They are systematically dumping their coal, and their prices, which do not in any way reflect the costs of production and transportation, to wipe out bulk anthracite production in areas such as south Wales. They wish to create for themselves a captive market within which to generate future profits.
In 1987, Abernant colliery was selling its coal at an average price of £66 a tonne, a price that compares favourably with £84 a tonne of imported anthracite. Its best quality coals are generating revenues of up to £100 a tonne; far higher, for example, than those of any pit on the British mainland outside south Wales.
There is no doubt about Abernant having immediate access to huge reserves of high-quality anthracite. Its reserves are not in question. The immediate problems arise from the fact that the pit is going through a period of upheaval and transition. It is shifting the focus of its production to a new seam and a new underground district, and as a result is forced to carry unusually high development costs at a time when output has necessarily been low. All collieries go through these phases. That is the nature of coalmining, and it will never change. What has changed, however, is the determination of British Coal to secure the permission of, and adequate resources from, the Government to enable it to pass through difficult times in order to secure a good future for collieries such as Abernant.
British Coal is abandoning its sane long-term strategy for the regeneration of the anthracite area, and appears to be going for a crash programme of profit generation by closing its deep mines and proliferating its opencast sites. This policy only brings more hardship to south Wales in the form of unemployment, along with resentment, in the mining communities, which see the landscape ravaged, with very little employment resulting. There is no logic in this. It is a policy that is rejected throughout south Wales, and there is growing evidence of public resistance to it.
The Minister should understand the depth of this resentment. He should recognise the anger, frustration and despondency that these policies are causing in the hearts of men and women as they see mine jobs replaced by a scarred landscape and foreign imports. We shall reap a bitter harvest if the Government do not look again at the need to transform collieries such as Abernant rather than close them. The harvest will be higher fuel prices, anthracite shortages and the generation of resentment at the unnecessary tragedy of unemployment.
1255 I urge the Minister to look again at the decision over Abernant and to put aside short-term financial considerations, which must not be allowed to determine this country's energy future. If he does that, he will help unleash the potential of our coalfields, not destroy them.
§ Mr. Alan W. Williams (Carmarthen)
I thank my hon. Friend the Member for Neath (Mr. Coleman) for giving me a few minutes of the time available in this Adjournment debate.
The closure of Abernant colliery affects my constituency too, because about one third of the work force in Abernant live in the upper Amman valley in my constituency. Also, British Coal announced that in closing Abernant colliery, it is going to close Wernos washery. It was a bolt out of the blue for the work force there, because for the last 15 years it has been involved in washing the coal from Betws colliery, a new mine in south Wales since the war, so it thought that its future was secure. But British Coal has decided that it will close Wernos washery and use the redundant washery at Abernant. So the knock-on effect for me is about 100 jobs lost in Wernos and the loss of the jobs of about 200 of the Abernant work force who live in my constituency.
The effects in terms of unemployment in the upper Amman valley are quite devastating. Her Majesty's inspector of schools and colleges, a quite neutral source, produced a report on the further education college in Cwmaman, stating that the upper Amman valley has lost virtually all its industrial base, and that unemployment at present is around 50 per cent. overall, with some 36 per cent. of the young people out of work. Those are not my figures; as I say, they are from a neutral source. If the closures go ahead, that 36 per cent. will climb rapidly towards 40 per cent., with the knock-on effect of taking the miners' income out of my constituency.
Over the weekend, I learnt that the average age of the work force in Abernant is, unbelievably, just 32. That is because there have been so many colliery closures in south Wales during the past few years that all the older men have left the industry. When the Government came into office, there were 50 mines there; now there are only 12, and if these closures proceed we shall be down to 10 in a few months. These are young men with families and mortgages, who are anxious to carry on in a working life for the next 20 or 30 years.
When it was first announced, the Abernant miners decided to contest the closure. That was a courageous decision. Unfortunately, when redundancies are involved, the buying of jobs is all too common, and the fight has largely been lost, even in the coal industry. During this week, people have had second thoughts and decided to accept the closure, but the decision has been made under very unfair circumstances. They were told that if they decided quickly — before the end of March — each employee would receive an extra £5,000 in redundancy pay. That is bribery and blackmail.
However, there is a more sinister threat. Young members of the work force have been told that if they go quietly now it will be classed as voluntary redundancy, and there will be a possibility of jobs in other mines. If, however, they delay beyond March, the redundancy may become compulsory. With that kind of threat hanging over them, it is no surprise that the young work force decided to accept the closure.
1256 Even at this late stage, I ask British Coal, through the Minister, to reconsider the decision to close Abernant. The pit is modern; it is only 30 years old. It is not an 18th or 19th century pit. Moreover, as my hon. Friend the Member for Neath said, it has massive reserves of coal. It has become known in south Wales as "the sleeping giant" because of its enormous reserves of high-quality anthracite. During the past few months, the pit has been producing about 90 per cent. of its target output, and its losses are marginal—about £10 a tonne.
Earlier this week, we heard that in 1992 we would be moving towards a single European market. For better or worse, we shall have an industrial common market with France and Germany. Why cannot that apply to coal? The coal mined in Britain is the cheapest in Europe. If Abernant were anywhere in France, Germany or Belgium, there would be no question of its closure.
I appeal to the Minister to think again.
§ The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer)
I listened carefully to the hon. Member for Neath (Mr. Coleman) and I pay a sincere tribute to him for raising so forcefully the Abernant colliery closure. In particular, I listened to his well-informed remarks on anthracite. I also listened to what the hon. Member for Carmarthen (Mr. Williams) had to say about the Wernos washery in his constituency.
As hon. Members will know, decisions about the closure of individual units are the management responsibility of British Coal. The colliery review procedure, agreed between British Coal and the mining unions, provides for the detailed scrutiny of proposals for closure through three possible levels—local discussions, national appeals and, finally, the independent review body.
The consultation procedure for considering closure proposals is the most comprehensive consultation process available to any industry. It allows all those with a direct interest in the proposals to bring evidence throughout the three stages of the proceedings, including the independent review body.
The Government are not a party to closure decisions taken by British Coal or to the closure procedure, but I suspect that it would be helpful to the House if t were to fill in a few details of the background of this particular closure.
Abernant colliery, as has been said, has been worked for only 30 years, producing anthracite from the red vein seam. It was completed in 1958 at a cost of £10 million and is one of four anthracite mines in the locality. Output has been sold mainly to the domestic market, to the Aberthaw power station and to the furnacite plant at Aberconwy. A little goes for export.
The pit has consistently made a loss for over 15 years.
§ Mr. Spicer
We are not debating farmers tonight, we are talking about the coal industry. The hon. Gentleman seems to forget that the coal industry is currently receiving subsidies to the tune of well over £1 billion a year. He conveniently tends to forget that whenever we sit here together. He tends to forget the tremendous support that the industry that he purports to support receives from the Government.
1257 Since 1975, the accumulated losses have totalled over £47 million, with annual losses of £7.6 million and £4.4 million in 1982–83 and 1983–84 respectively. So far this year there has been a loss of £3.7 million In an attempt to bring the pit into profitability, new heavy duty face equipment was installed in the W20 face in September 1986 at a cost of £3.5 million. The expectation was that with that new investment output could be increased on that face to 1,300 tonnes per day. But— this is the crucial point — because of the pit's difficult geology, production has never achieved half that target.
In April 1987, local management advised the men that new shift patterns were necessary to improve productivity and to enable the pit to continue working. After a one-day strike, subsequent co-operation between the men and management resulted in some improvement in performance, but unfortunately not enough to make the pit viable.
In August 1987, at a further reconvened colliery review meeting, the area director expressed his concern over the continuing losses and a new plan of action was agreed with the aim of making the pit viable. I fully recognise the tremendous efforts that were made over the succeeding four months by men and management, which resulted in a small profit of £22,000 being achieved in November. If that sort of result had been sustained, it could have ensured the future of the pit. Regrettably, there was a considerable decline in output in December and January due to geological disturbances in S14 and W20 faces and an ingress of water into W9.
At a further review meeting on 3 February, the area director said that he could see no justification for keeping the colliery open and would be recommending its closure. In addition, he proposed to close the Wernos washery, because coal washing at Betws colliery could be transferred to the Abernant washery, which had sufficient capacity.
British Coal explained that the severe geological difficulties that had been encountered at Abernant in the current faces and in the future development area would result in continuing losses, which would be unacceptable. The options for slimming down production faces or carrying on development alone had also been examined, but offered no solution. For example, continuing development on its own, using 300 men, would have meant an annual loss of £10 million. It would have taken 12 months for the F1 development face to be ready for production, assuming no geological problems. Even then, the likelihood is that production would have been at a loss.
The area director made it clear that the decision to close the colliery had not been taken lightly and that it had been based entirely on the physical conditions of the pit. In the management's view, there was no prospect of an improvement. I note—this has already been noted in the debate—that the men, too, have recognised the reality of the situation and voted overwhelmingly on 16 February to accept that decision.
I recognise the concern of the hon. Members for Neath and for Carmarthen about the effects of the closure on employment in the Pontardawe area. Therefore, in the remaining few moments, I should like to draw attention to the measures that British Coal is taking to mitigate the 1258 effects of the closure. British Coal has stressed that voluntary redundancy would be offered, or there would be opportunities for those wishing to stay in the industry to transfer to the nearby Betws, Cynheidre or Tower collieries.
The hon. Member for Neath mentioned redundancy terms and the £5,000 lump sum. That sort of offer is not available in any other industry that I can think of. British Coal's redundancy terms are a matter for the corporation itself and reflect its assessment of the needs of the industry. Even without the current £5,000 supplement, the terms are exceptionally generous, providing up to about £35,000 including the statutory lump sum and cash in lieu of concessionary fuel — depending, of course, on age and length of service.
The supplementary £5,000 was introduced by British Coal as a temporary measure to help the industry to adjust to adverse market conditions. It has always been made clear that the supplement would end on the last day of British Coal's financial year — 26 March this year. I understand that the corporation does not intend to extend it beyond that date. However, I assure hon. Members that any mine worker who leaves the industry on redundancy before 26 March will be entitled to the £5,000 supplement.
Finally, we recognise that coal that can be mined commercially is one of our country's great national assets. I suspect that that is something which Opposition Members and the Government have in common. What is more, we believe that coal will be the fuel of choice for the great bulk of our electricity supply industry for many years to come. So long as it is competitive, which we are confident it can be, the coal that the electricity industry will buy will be British. However, it is no secret that British Coal is having to face extremely tough market conditions—much tougher, indeed, than had been expected even a year ago. It is against that background that the corporation has had to decide to close pits such as Abernant. It is also why a total of 16 pits have had to close or merge during this financial year.
I remind the House that Sir Robert Haslam has made it clear that the number of closures needed next year will be quite small, unless there is sustained industrial action. Perhaps I could say direct to the hon. Member for Bolsover (Mr. Skinner), who has influence in such matters, that he has it within his grasp to assist the industry in that respect. The chairman is absolutely clear that, unless there is sustained industrial action, which will damage the prospects of those pits which are marginal, the industry has a sustainable and bright future.
The Government are backing British Coal with £2 million every working day, including investment in new pits and new seams, which quite often is forgotten. We would not be doing so if we did not believe that the industry has a bright future. It will have a bright future as long as it faces up squarely to the competitive pressures that are growing daily.
The problem with the Abernant pit is its geology, but the industry as a whole has a bright future and will be able to service our electricity industry as long as those working in it accept that it must be fully modernised and competitive.
Question put and agreed to.
Adjourned accordingly at fifteen minutes to Eleven o'clock.