Pit Closures

§ Madam Speaker

I have selected the amendment standing in the name of the Prime Minister. I should also tell the House that more than 70 Members wish to participate in the debate. Therefore, it will be no surprise to the House to know that I have limited speeches between the hours of 6 and 8 pm to 10 minutes and I shall expect those Members who speak outside that time to exercise a great deal of voluntary restraint.

§ Mr. Robin Cook (Livingston)

I beg to move, That this House regrets the failure of the President of the Board of Trade in his statement on Monday 19th October to provide for a review of the programme of pit closures; and demands that no pit be closed until the Select Committee on Trade and Industry concludes a review of the costs and benefits of closing the pits and the comparative costs and benefits to the nation of retaining them in production. Last week, when we announced this debate, it was dismissed by one of the newspapers as a parliamentary ritual. Far from proving a parliamentary ritual, the debate has already proved a parliamentary first. It is the first occasion in the history of Supply days on which most of the Opposition motion has been conceded by the Government in the 48 hours since it was tabled.

We begin our motion by regretting the failure of the President of the Board of Trade to announce a review in his statement on Monday. We now have it, on no less an authority than the Prime Minister in his briefing yesterday, that it was always the intention of the President of the Board of Trade to announce a review. Somehow, in two hours of statement and answers to questions, he ran out of time to announce it. We are told that the great communicator was unable to express himself lucidly in the frenetic atmosphere in the House.

In the motion, we also call for the review that the President of the Board of Trade did not announce on Monday. The right hon. Gentleman will remember that I called on him to give us a review. This is what he said: A review … will … raise a range of conflicting arguments upon which there will he no agreement before, during or after the review … I am responsible for the Government's energy policy … and I shall make clear the basis on which we intend to proceed."—[Official Report 19 October 1992; Vol. 212, c. 233.] That was on Monday. On Tuesday, Lord Wakeham made clearerer the basis on which they intend to proceed. It is appropriate that Lord Wakeham should have been chosen for that role. After all, it was Lord Wakeham who, during the last general election, issued a press release with the heading "Labour's plans for coal would mean lost jobs." For good measure, the following week he added another press release, in which he said: I want to set the record straight, by restating the profound commitment of this Conservative Government to the coal industry and to everybody who works in it. I understand why Lord Wakeham would wish to rescue his credibility from the assault on it by the President of the Board of Trade. On Tuesday, Lord Wakeham made it plain that there was going to be a wide-ranging review, that the issue of how much coal was burnt by the electricity industry would be a part of it, and that we could look again at whether gas should substitute for coal and whether it made sense to import so much coal.

I must ask the President of the Board of Trade: who is responsible for Government energy policy? Is Lord 440 Wakeham still responsible? He has done more to make clear the basis on which they will proceed than the right hon. Gentleman did in two hours on Monday.

Finally, our motion calls for the Select Committee on Trade and Industry to carry out an inquiry. On Monday, the President of the Board of Trade managed to address the House for two hours without once uttering the words "Select Committee." By Tuesday, the Prime Minister was telling us how pleased he was that there might be a Select Committee inquiry and how full the co-operation with it would be. My only regret is that, when we tabled the motion, we did not call for a general election now, in the hope that they might call for that too.

I notice that the Government have sufficiently retained the habits of parliamentary ritual that they are not able to accept our motion but have tabled an amendment. If they meant what they were saying yesterday, why cannot they accept our motion after swallowing so many parts of it?

I do not flatter myself that it was the cogency of our arguments that convinced them. What shifted Ministers was a nation united in anger at the destruction proposed for Britain's mining communities—an anger that transcended party political differences. I know that, because my office has been inundated for the past seven days by calls from Conservative supporters from Surrey to Somerset. Conservative Members know it, because they have had the same experience with Conservative voters in their constituencies. The President of the Board of Trade knows it, because he knows to what extent he has had to shift his position during the past three days.

We await the right hon. Gentleman's speech with eagerness to find out how much further he has moved today, because there are still two flaws in the Government's broad promise of a review. First, it will be a review of only two thirds of the closure programme. The amendment is adamant that the review will affect only 21 of the 31 pits. We are told that the other 10 are uneconomic and must close. Grimethorpe produces coal at £32 a tonne. That is cheaper than the coal imported to Britain.

But the review promised by Lord Wakeham went wider than simply a pit-by-pit examination of whether any one pit was profitable. The review promised in the House of Lords yesterday was to look afresh at whether it made national sense to burn gas rather than coal. If it is to be a real review considering broad questions of energy strategy, why should one fifth of the British coal industry be shut down before we receive the answers?

Another flaw tempers our joy at the change of heart. Yes, the Select Committee may carry out an inquiry, but it is clear from the Prime Minister's amendment that the review that the Government have in mind is a review by the Government—by the Department of the right hon. Gentleman who made the decision. How seriously can we take the proposition that, having made the immense blunder, the President of the Board of Trade is the right man to make a success of reviewing it? If we are to take it seriously, we must hear today from the right hon. Gentleman which part of the decision he now thinks that he may have got wrong and needs to be reviewed.

§ Mr. Derek Conway (Shrewsbury and Atcham)

Will the hon. Gentleman give way?

§ Mr. Cook

I shall give way on this occasion, but I am conscious of what Madam Speaker has said about the number of people who wish to speak.

§ Mr. Conway

I am grateful to the hon. Gentleman for giving way. While he is on the matter of responsibility, will he explain to the House on what basis the leader of his party, when in Cabinet, agreed to the closure of 277 pits?

§ Mr. Cook

The hon. Gentleman flatters my right hon. and learned Friend the Leader of the Opposition too highly by suggesting that in the few months that he was a member of the last Cabinet quite so many pits were closed—[HON. MEMBERS: "Answer the question."]

I shall take up the hon. Gentleman's point. I have several times heard the President of the Board of Trade reciting the figures for the closure of pits since 1945. That means—I think that this was the thrust of the claim of the hon. Member for Shrewsbury and Atcham (Mr. Conway)—that what we see now is not a new energy strategy but the continuation of previous trends. A large number of pits were closed in the 1950s and 1960s as the demand for house coal collapsed, but there was a new market for coal for the power stations.

During every Government since 1945, be it Conservative or Labour, there has been an increase in the amount of coal going to power stations to be turned into electricity. The Government elected in 1992 will be the first post-war Government to propose reducing the amount of coal being burnt for electricity. That is the source of the current crisis in Britain's coal industry. The Secretary of State for Trade and Industry who sits before us is the Minister with responsibility for industry; he shares with the Chancellor the responsibility for pulling industry out of recession and putting the economy on the road to recovery.

Last week, there was another announcement: the unemployment figures, which show an increase of 32,000 in the number of people out of work. The level of male unemployment is higher than at any time since the 1930s, even after the many times that the right hon. Gentleman and his colleagues have manipulated and massaged the unemployment figures.

There can be no higher aim of economic policy than reducing unemployment and getting Britain back to work, yet, in the same week, the President of the Board of Trade added another 30,000 to the unemployment total. For the men who live close to each other in the small communities that were shattered by last week's blow, the offer of retraining is an insult unless someone tells them where the jobs are for which they are to be retrained.

It was not just the miners who lost their jobs because of the right hon. Gentleman's statement. They are only the first wave. There are the 5,000 staff at the coal power stations who also will not work if the mines cease to produce the coal to burn. There are the 10,000 men who work the freight trains and lorries who also will not work if there is no coal to transport. There are people with jobs in the factories that supply the mines, 20,000 of whom are likely not to work if there are no mines to supply.

That will bring redundancies to places far from the coalfields—to Tewkesbury, where they make the pit chocks; to Basingstoke, where they make the cable belts; to Pudsey, where they make the underground motors; to Worcester, where they make the mining chains; to Chippenham, where they make the electronic controls. 442 These redundancies will reach every part of Britain including the Tory part. The real casualty list of last Tuesday does not number 30,000; the total number of jobs destroyed by that statement is more than 100,000. The country was looking for a decision that would expand the economy, not tear another great hole in the demand in the economy.

We must therefore ask the President whether he will now admit that he got this part of his decision wrong and that the damage to the economy is a powerful argument for reviewing his decision.

§ Mr. Eric Pickles (Brentwood and Ongar)

What message will the hon. Gentleman give to the Yorkshire miners who will lose their jobs because Labour-controlled Leeds city council has decided to use imported Colombian coal?

§ Mr. Cook

The right hon. Gentleman has just joined us in this House—[HON. MEMBERS: -A promotion."] I have to confess that I have flattered the hon. Gentleman, in that not even his Front-Bench colleagues love him enough to make him a right hon. Member. I understand, however, that he knows something about local authority law. It is therefore disingenuous of him to come to the House and protest about the consequences of the law on competitive tendering which the Conservative Government passed and which removed freedom of action from local authorities.

To return to the present troubles, the President of the Board of Trade is fond of reminding the world of his title—that he is indeed President of the Board of Trade. Our economy faces another challenge on another front as well. We have a trade gap with the rest of the world which is mounting at the rate of £1 million an hour. That is a major challenge to our economy. If the right hon. Gentleman closes these pits, in the short run Britain will survive only by increasing its imports and in the long run Britain's industry will continue in production only if it imports gas to run the power stations that will replace the coal power stations.

§ Mr. Gyles Brandreth (City of Chester)

Will the hon. Gentleman give way?

§ Mr. Cook

No.

On Monday, the right hon. Gentleman told us that North sea gas will last for 50 years. His own Department does not believe him. It has published a thick assessment of the reserves of North sea gas which shows that proven gas reserves will last for 10 years. The undiscovered possible reserves may last for 50 years, but, as the Department says, those are the reserves to which least certainty can be attached. They may exist, but they will certainly not come in at the price of gas from the North sea today, as we move into the deeper water.

There is another reason why we know that the Department does not believe the right hon. Gentleman. Last month it published energy paper 59, which contains the Department's scenario for the year 2020, well within the right hon. Gentleman's 50 years. It makes it plain that, in the year 2020, Britain will be dependent on importing its gas from Siberia, Algeria and Norway. By the year 2020 Britain will be importing three quarters of its primary energy needs—this in a nation that five years ago was self-sufficient in its energy demands.

How much will that add to the trade gap? How many more export orders will our declining engineering industry 443 have to find to pay for the gas on which it will depend to run, and what other country in Europe would be daft enough to make itself dependent on imported energy when it is sitting on hundreds of years of coal reserves? Will the President now admit that he got it wrong when he endorsed a strategy to replace British coal with imported sources, and that the impact on the balance of trade is another reason for him to admit that he was wrong and to review his decision?

§ Mr. Phillip Oppenheim (Amber Valley)

Can the hon. Gentleman name one occasion during the huge rounds of pit closures in the 1950s, 1960s and 1970s when a Government of any colour initiated an independent review of those pit closures?

§ Mr. Cook

I will answer the hon. Gentleman's question when he tells me of a single compulsory redundancy under the last Labour Government. He knows perfectly well that there has not been one compulsory redundancy in the mining industry, not just under any previous Labour Government but under any previous Conservative Government either.

§ Mr. Oppenheim

On a point of order—[Interruption.]

§ Madam Speaker

Order. I seem to have a point of order. It had better be a point of order to me in the Chair, and not a matter for debate.

§ Mr. Oppenheim

Lest the hon. Gentleman wishes inadvertently to mislead the House, may I point out that miners in my constituency—

§ Madam Speaker

Order. The hon. Gentleman must resume his seat. He is debating with me and I am not in a position to debate with him. He must wait to be called. If he is fortunate, he might catch my eye.

§ Mr. Cook

There is another portfolio in the President's lap. As well as our Secretary of State for Trade and Industry and our President of the Board of Trade, he is now Britain's energy Minister. Therefore, his decision must be judged on whether it adds up to a sensible energy strategy for Britain.

What is most worrying about last week's decision is the fact that it is impossible to glimpse any energy strategy behind it. I hope that, when the President addresses us, he will spare us his solitary claim to justify that energy strategy that, as he has claimed in the past seven days, gas-fired electricity is cheaper. It is not, and nobody outside the DTI believes that it is. The Select Committee on Energy, which has a Conservative majority, does not believe that it is.

§ Dame Elaine Kellett-Bowman (Lancaster)

It is much cleaner.

§ Mr. Cook

I would take the hon. Lady's sedentary intervention more seriously if her Government were not importing orimulsion, which is the dirtiest fuel known to mankind.

The Select Committee's report in February said that electricity from present coal power stations would be generated at prices of up to 2.2p per kWh; that electricity from the new gas power stations which will replace it will start at 2.6p per kWh; that it is almost impossible to 444 discover a single new gas power station which will generate electricity that will not be more expensive than the existing coal power stations; and that the one gas power station which has started to generate electricity is doing so at 3p per kWh, which is more expensive than almost all the coal power stations.

Last week, the chief executive of PowerGen said: Our coal-fired plant is able to generate more cheaply than most of the gas-fired plant which is now threatening to displace it.

§ Dr. Keith Hampson (Leeds, North-West)

Will the hon. Gentleman give way?

§ Mr. Cook

I shall give way on this occasion, but it must be the last.

§ Dr. Hampson

It happens that the Select Committee also stated: if improved technology had not been available there might have been no new entrants to power generation in Britain. It added that combined-cycle gas turbines are much the cheapest form of new generation, but are economic at smaller sizes than conventional coal-fired stations. If the hon. Gentleman reads the submissions that many of us have received from the electricity trade unions, he will find that they too agree that gas-powered stations are more economic.

§ Mr. Cook

The hon. Gentleman, as my hon. Friends will have noted, has made an elision in referring to comparisons between new gas-powered stations and new coal-powered stations. The question that his right hon. Friend the President of the Board of Trade has to answer is, why should he shut down coal-powered stations that have another 10 or 15 years of useful life, stations that have been built and paid for and are therefore producing electricity more cheaply than a new power station can possibly do?

§ Dame Elaine Kellett-Bowman

Will the hon. Gentleman give way?

§ Mr. Cook

I know from long experience that one might as well get the pain over with.

§ Dame Elaine Kellett-Bowman

The hon. Gentleman is referring to power stations that have been written down and are therefore producing cheaply. A power station that my husband went round the other day—[Laughter.]

§ Madam Speaker

Order. It was not very funny.

§ Dame Elaine Kellett-Bowman

The Opposition evidently do not wish the be informed. The power station has been written down to £195 million. Alongside it, a cleaner plant is being constructed at a cost of £220 million. The surrounding landscape will be devastated, because it is necessary to extract the limestone. Production now is cheap, but if we take into consideration the cost of the cleaner plant—as I have said, it will be £220 million—production will be jolly expensive.

§ Mr. Cook

First, I bow to the authority and expertise that is the basis of the hon. Lady's intervention. Secondly, I refer her to the Select Committee. As well as taking into account comparisons between new gas-powered stations and existing coal-powered stations, it considered price comparisons once existing coal-powered stations had been desulphurised. The figures showed—even after allowance 445 had been made for that cost—that existing coal-powered stations were still producing electricity at a lower price than new gas-powered stations.

If the hon. Member for Lancaster (Dame E. Kellett-Bowman) is serious about wishing coal-powered stations to be fitted with clean technology, she must ask those who occupy the Government Front Bench why, even now, only two coal-powered stations are being retrofitted, when every coal-powered station throughout Germany has been fitted with clean technology. Indeed, Germany has done so time and again by using technology developed in Britain that is not being applied here.

The two chief executives of both Britain's generating industries have gone on record as saying that electricity from their coal-powered stations is cheaper than the electricity that will be generated by the new gas-powered stations. I must tell the President of the Board of Trade that the statements of those two chief executives carry more credence than his promises of the flat opposite.

I remind the right hon. Gentleman of his case. Last week, his case was that his decision would produce cheaper electricity, which would support industry and create jobs in industry. If the chief executives of our two major generating companies are right—that the decision will result in dearer electricity—by his own logic he is imposing a penalty on industry and destroying jobs in industry.

Over the past eight days, however, I have noted another interesting shift in the right hon. Gentleman's presentation of the economic case. When he discovered that he could not demonstrate that electricity from gas would be cheaper, he shifted his ground to inventing a subsidy. By last weekend, he was quoting a subsidy to the coal mines of £100 million a month. That has turned out to be a complete mystery to British Coal, which was unaware that it was receiving £100 million a month. It turned out to be a complete mystery to the right hon. Gentleman's officials at the Department, who were unaware that they were paying £100 million a month.

In yesterday's edition of The Daily Telegraph, one of those officials was quoted as saying that the President of the Board of Trade had in mind "a theoretical subsidy". I must say to the President of the Board of Trade that the job losses are not theoretical; the hardship to the families and the destruction of coal mining communities is not theoretical. In the months of his review, the right hon. Gentleman will have to find a harder financial case for closing those pits than a theoretical subsidy that nobody is paying them.

The Secretary of State then fell back on another position when he discovered that he could not justify the subsidy. He took refuge in the sweeping assertion that, because the electricity supply industry wants to produce electricity from gas, it therefore must be cheaper. That is the way markets work, he tells us. They always give the consumer the best deal. They are never distorted by the commercial interests of the company selling the product, are they?

The first thing that the President of the Board of Trade should note is that there is no market in electricity consumption. The consumer does not have a choice. The consumer does not wander to the wall and wonder, before he turns on the switch, "Will I go to LEB or NORWEB tonight? Who is offering the best spot price?" What the right hon. Gentleman and his colleagues have created are private monopolies in which the consumer has no alternative.

446 The second point that the President of the Board of Trade must take on board is that the regional electricity companies have shares in most of the gas power stations being built. It does not matter to them if they pay more, because they cream off the profits as owners of those power stations. The only reason they are doing that is that they see it as a way of undercutting PowerGen and National Power. What will we be left with?

§ Mr.Geoffrey Dickens (Littleborough and Saddleworth)

What about the regulator?

§ Mr. Cook

The hon. Gentleman has asked about an official appointed by his own Government—an official chosen by his Government after, we are told, an earnest process of head hunting. And lo, that earnest process of head hunting came up with the choice of the man who had advised them on the privatisation of the electricity industry—a man who is plainly under judicial review at the present time for being in default of his powers under the Electricity Act 1989.

To sum up, we are now left with an energy strategy that makes no sense to the consumer because it results in higher prices, no sense to the economy because it results in higher unemployment and deeper recession, and no sense to national security because it writes off access to our coal reserves. It does make commercial sense to those electricity companies. Is the right hon. Gentleman really going to let Britain's energy strategy be decided by what is in the commercial interests of those electricity companies, even if it is against the national interest?

It is no good the President of the Board of Trade spreading his hands in innocence and saying that all the gas stations were the decision of the electricity industry and not his decision. Every one of the gas-fired generating stations coming on stream was given a licence to do so by Ministers. As late as August, the President of the Board of Trade himself approved two further licences—that at a time when, as the right hon. Gentleman would have us believe, he was agonising over the number of pits that he would have to close. If the right hon. Gentleman really was agonising about the effect on the coalfields, why did he approve two more licences for two more stations that will take out two more pits?

On Monday, the President of the Board of Trade said that the electricity companies would not sign a coal contract, even though he had spoken to them nicely. He may even have spoken to them rudely, but he said that they would not sign up, and asked what he could do.

The remedy is in the right hon. Gentleman's own hands. Condition V of the licence makes it explicit that the electricity supply industry must buy electricity from the cheapest source. It is not doing so, but is closing pits to buy from a more expensive source—and the right hon. Gentleman should not let it get away with that. The President of the Board of Trade should no more let the electricity supply industry break the law in its purchasing than he should have connived with British Coal in breaking the law over its redundancy package.

The pits that are being abandoned contain some of the richest coalfields in Europe—seams that are about to be flooded. No wonder the rest of Europe thinks that we have gone mad. The President of the Board of Trade says that he must not let his heart rule his head. I will not quarrel 447 with that—I do not want the right hon. Gentleman's heart to rule his head—but I ask him to use his head in providing an energy strategy that is in Britain's interests.

I agree with the right hon. Gentleman, however, that the plight of Britain's mining communities has touched the heart of the nation, which has been moved by reaction to the statement that the right hon. Gentleman is destroying not just jobs but the virtues of close-knit, loyal communities based on a work force that understands that solidarity is important not just to the output of the shift but to the lives and safety of its members.

Another characteristic of mining communities is the courage that they have shown in mining coal from the earth, and in rescuing workmates trapped under that earth. But there is another kind of courage than physical courage—the courage to admit that one was wrong. It does not carry the same risks of danger, but it demands some humility.

The President of the Board of Trade owes it to miners to show that courage and humility. He should admit that he got it wrong and promise a real review of energy strategy, that no pit will cease production until it has been proved that the nation does not need its coal, and that he will intervene to challenge the electricity industry's short-sighted priorities.

If the right hon. Gentleman will do those things, I will applaud his courage. If he will not, I warn him that we will harry him at every turn. We will press the miners' case before breakfast, before lunch, and before dinner—and we will get up and do that again the next day. We will mobilise the public anger that the President of the Board of Trade has aroused until he admits that he was wrong, agrees that the British economy needs the British coal industry, and removes the axe that he has poised over 31 pits.

§ The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)

I beg to move, to leave out from "House" to the end of the Question and to insert instead thereof: recognises the difficult economic judgments the Government had to make in accepting British Coal's proposals to close 31 collieries; endorses the Government's conclusion that British Coal should introduce a moratorium on the closure of 21 of these pits unless the workforce agree otherwise; welcomes the speedy action of the Government in introducing special assistance measures for coal mining areas; and notes that the moratorium will enable the Government to take views and evidence on the future of the pits in question and to consider these in the context of the Government's energy policy, including the consequences of that policy for British Coal and the employment prospects for the industry, and allow the Trade and Industry Select Committee to consider the issues as it thinks fit, and the House to debate the issues that will be presented to it in the New Year before decisions are reached about future closures.". I think that the whole House will have listened to the hon. Member for Livingston (Mr. Cook) rehearsing broadly the same approach to nationalised industry that caused such devastation to so many industries under the Labour regimes. Regardless of the advice of management, difficult decisions were put off, costs were subsidised and change was prevented, at considerable cost to the rest of our economy, and cost to the consumer as a consequence.

Everyone will have realised that, in setting out his arguments today, the hon. Gentleman gave no concept of 448 the cost of the implications behind his words. He gave no indication of how he would carry his policies through, or of the consequences for the industry itself and its customers; he gave no indication of the costs, or of the competitiveness of the industries that depend on the electricity generating industry.

On Monday, I made a statement to the House in which I acknowledged the existence of widespread concern at the speed of the proposed rundown of the coal industry under the previously agreed proposals. Consequently, I announced that British Coal would be allowed to proceed with the closure of only 10 clearly uneconomic pits, after the statutory consultation period had been completed. I also announced that the remaining 21 pits originally identified for closure would be the subject of a moratorium until early in the new year, and I confirmed that there would be no compulsory redundancies during that period, although voluntary redundancies would still be allowed to proceed under the terms announced by British Coal last week.

§ Ms. Joan Walley (Stoke-on-Trent, North)

Will the right hon. Gentleman give way?

§ Mr. Heseltine

I certainly intend to give way during my speech, but it is important for me to set out the answers to important questions for the benefit of the House. I hope that I shall be able to answer a great number of the questions raised by right hon. and hon. Members on both sides of the House, and it may be helpful if I am able to do that in an orderly way so that the comprehensive nature of what I intend to say is available to the House before we discuss its implications.

Finally, I announced a substantial and very wide-ranging package of new measures to assist the coalfield communities as and when they suffer job losses, or in anticipation of such losses.

The consequences of the introduction of the moratorium will be as follows. First, it will enable negotiations to continue between British Coal and the electricity generators on new coal contracts. Secondly, it will enable a widespread process of consultation to take place with all the principal providers and consumers of energy, the trade unions and other interested parties. That process of consultation will allow us to examine in detail whether the case for further closures has been made, and whether ways and means can be found to increase the use of coal and, as far as possible, to lessen the impact of any closures.

Self-evidently, those who wish to make representations or submit evidence to us are full masters of any decision about whether that should be published. I neither seek nor have the powers to prevent whatever publication they choose. I shall commission my own inquiries. I intend—with one exception to which I shall refer immediately—to make public the findings of such inquiries.

§ Dr. John Reid (Motherwell, North)

Will the right hon. Gentleman give way.

§ Mr. Heseltine

No.

§ Madam Speaker

Order. The President of the Board of Trade has made it clear that he will give way later.

§ Mr. Heseltine

The exclusion that I must make is that I shall not be able to publish information with which I am provided in confidence and which is commercially 449 sensitive. Unless I give that assurance, it is inevitable that private sector companies could well withhold relevant facts and figures from my inquiry. I assure the House—

§ Mr. Jimmy Hood (Clydesdale)

On a point of order, Madam Speaker.

§ Madam Speaker

I appear to have a point of order. I hope that it is a point of order for me to deal with and not a matter for debate.

§ Mr. Hood

It is a point of order for you directly, Madam Speaker. Is the amendment in the name of the Prime Minister in order if we are now told by the President of the Board of Trade that information will be withheld from the Select Committee which is to hold the inquiry?

§ Madam Speaker

I must inform the hon. Member and the House that the amendment would not have been printed were it not perfectly in order.

§ Mr. Hood

Further to that point of order, Madam Speaker.

§ Madam Speaker

Is it further to the original point of order?

§ Mr. Hood

Yes, it is, Madam Speaker. The President of the Board of Trade has said that some of the information presented to him will be kept from the Select Committee.

§ Mr. Heseltine

indicated dissent.

§ Mr. Hood

He has. Will he now clarify that statement, and if he cannot do so—

§ Madam Speaker

Order. If the House were to allow the Minister to proceed, we should know exactly what he was talking about.

§ Mr. Heseltine

Let me make it absolutely clear that I have no powers to constrain a Select Committee in any way. It may make any inquiries of any parties. It has very powerful weapons at its disposal to compel attendance and to secure what information it requires.

§ Several hon. Members

rose—

§ Dr. Reid

Will the Minister give way on that point?

§ Mr. Heseltine

No.

§ Madam Speaker

Order. I understand the anxiety of hon. Members, but the Minister has barely got a word out of his mouth.

§ Mr. Heseltine

I think that the House appreciates that I have no power to constrain the proceedings of a Select Committee, and I would not be involved in that process.

§ Mr. William Cash (Stafford)

Will my right hon. Friend give way?

§ Mr. Heseltine

I shall give way to my hon. Friend.

§ Several hon. Members

Oh!

§ Mr. Cash

My right hon. Friend referred to the Select Committee inquiry. His own inquiry will deal with questions that would exclude the 10 pits that are to be closed. Therefore, I ask him, his having considered the letter that I wrote to him this morning, to be good enough to give me an indication of whether he would take the Trentham pit out of the 10 pits that have been listed, in the light of the evidence that I have given to him in that letter.

§ Mr. Heseltine

I want to deal seriously with the point made by my hon. Friend, although I should have come to a part of the speech where it would have been easier to do so. However, my hon. Friend has put the question to me. He gave me notice yesterday lunchtime of specific information that he had available about Trentham. I received that information around lunchtime today. I have, of course, made as early an inquiry as I can from the Coal Board in what are obviously very limited circumstances. I cannot tell my hon. Friend that I can withdraw the Trentham pit from the list of 10, in the light of the reply that I will be sending him and the information that the Coal Board has made available to me, but I think that I am able to help my hon. Friend, in that—and I shall say this a little later in my speech—when a colliery is going through the consultative process it is the responsibility of the Coal Board not to prejudice the outcome of that consultative procedure. By that, as I understand it, it is the Coal Board's responsibility not to do anything that would preclude the continuation of that pit, should the consultation produce evidence so to justify. I hope that my hon. Friend will understand that that is as full an answer as I can give in the circumstances and in the time.

§ Several hon. Members

rose—

§ Mr. Heseltine

I shall give way to the right hon. Member for Chesterfield (Mr. Benn).

§ Mr. Tony Benn (Chesterfield)

May I ask the Secretary of State to explain one point arising from his last answer? Is he saying that if evidence in the review is brought to bear that could affect the fate of the 10 pits that he has sentenced already, that, too, would change the view on the 10? It is a factual question. It is very difficult to understand the argument. Is he saying that the 10 pits could be reprieved in the review, when they have already been closed under a decision taken without proper consultation?

§ Mr. Heseltine

The right hon. Gentleman has raised the generalisation that flows from what I said to my hon. Friend the Member for Stafford (Mr. Cash). The statutory consultative process is now beginning in respect of the 10 pits. It must be a genuine consultation, and it is the responsibility of the Coal Board so to manage those pits during that consultative process that if it is persuaded that there is a case to continue the pits it will not have prejudiced that position during the consultative process.

§ Mr. Benn

If it is true that that is open to British Coal in the light of the consultation, which the right hon. Gentleman says is now to be resumed, why was the decision announced on Monday that, whatever happened, the pits would close? The Secretary of State has prejudged the consultative process, which he has now used to try to win support from his own Back Benchers. What is the position of the 10 pits? Are they able to be saved, and if so why did the right hon. Gentleman say that they would all have to close?

§ Mr. Heseltine

As the right hon. Gentleman and the whole House know, British Coal has advised me that these pits are uneconomic. [Interruption.] It is no use the Labour party arguing against a consultative procedure that it followed when it closed pits. British Coal is 451 proceeding along that path, and I have made it absolutely clear that it must fulfil that statutory obligation. That is the position.

§ Mrs. Elizabeth Peacock (Batley and Spen)

My right hon. Friend will be aware of my question, because I have discussed the matter with him. There is much confusion about this point. It is not understood exactly what has been said. Does he mean that there will be care and maintenance in those 10 pits for the whole of the consultative period, because in the High Court yesterday Charles Falconer QC, on behalf of British Coal, said: But we give an assurance that what we do will not prejudice the outcome of the consultations". Does that mean full care and maintenance, because there is much confusion about whether it does?

§ Mr. Heseltine

My hon. Friend, who has taken a vast and proper interest in these matters, is asking me to reaffirm the very point that I made to my hon. Friend the Member for Stafford and the right hon. Member for Chesterfield. The Coal Board is compelled by the procedures to maintain the option of continuing with the pit. It must indulge in the appropriate care and maintenance to keep that option open. I do not believe that I could have said it more clearly.

§ Several hon. Members

rose—

§ Mr. Heseltine

I must get on.

Early in the new year, I shall publish a White Paper setting out the results of my inquiries set in the context of the Government's energy policy and making clear the consequences of this for British Coal, the implications for individual pits and the employment prospects for the industry.

§ Dr. Michael Clark (Rochford)

I am most sorry to interrupt my right hon. Friend as he is moving on, but I still believe that the issue of the 10 pits is of paramount importance to many Conservative Members.

If those pits are left on a care and maintenance basis, and if there is consultation, does that mean that at the end of the consultation period they can continue open, and continue to produce coal, if the consultations and the Coal Board's decision suggest that that should happen? If so, how are the 10 pits different from the other 21? Why are they not all subject to the moratorium?

§ Mr. Heseltine

My hon. Friend has asked the question to which I have already, in part, given the answer. The distinction, for which the House is fully entitled to ask, is that those 10 pits are actually losing money now—[Interruption.] They are losing money now, at the prices that prevail now—and British Coal knows that from next April it will not obtain those prices. That is why those 10 pits will be subject to the procedures that will make it possible to close them. [Interruption.] I confirm to my hon. Friend—

§ Mr. Robert Hughes (Aberdeen, North)

On a point of order, Madam Speaker.

§ Several hon. Members

rose—

§ Madam Speaker

Order. There is another point of order.

§ Mr. Robert Hughes

On a point of order, Madam Speaker. It would help the House considerably, and it would probably help you too, if the President of the Board of Trade would use the microphone and address the Chair, instead of turning his back on the House and addressing his Back Benchers.

§ Madam Speaker

That is a helpful point of order for me, because I cannot hear the President of the Board of Trade at all.

§ Mr. Heseltine

I am finding it difficult to hear myself, Madam Speaker, so I appreciate your difficulties.

§ Several hon. Members

rose—

§ Mr. Heseltine

May I reply to my hon. Friend the Member for Rochford (Dr. Clark), and reiterate what I have said? The statutory procedures for closure must not prejudice the outcome of those procedures, but the advice of the Coal Board is that those pits are now losing money, and therefore the board's advice to me is that they should proceed to closure. There is no case that I can see for waiting until the end of the moratorium in order to begin the consultative procedures; the advice from the management of those pits is clear—

§ Several hon. Members

rose—

§ Madam Speaker

Order. Hon. Members should not persist. The Minister is making it clear to me that he is not giving way at the moment—[Interruption.] Order. I am sure that the Minister will make it clear when he wants to give way, and I ask hon. Members to let us proceed with the debate until then. I want to hear more Members speak. I want to hear not only the Front Benchers but the Back Benchers, too.

§ Mr. Heseltine

Early in the new year I shall publish a White Paper setting out the results of my inquiries in the context of the Government's energy policy, and making clear the consequences of that policy for British Coal, the implications for individual pits and the employment prospects for the industry. Before then the Select Committee on Trade and Industry will have a full opportunity to consider all those issues as it thinks fit. Members of the House will also have an opportunity to debate the issues fully. I shall present the conclusions and future decisions to the House.

I shall now set out in detail how I intend to proceed with the review. I say at once that I have—

§ Dr. Reid

On a point of order, Madam Speaker. I am sorry to interrupt now, but I have been trying to intervene and refer to the question asked by—[Interruption.] I have been trying to raise a point of order, subsequent to that raised by my hon. Friend the Member for Clydesdale (Mr. Hood)—a point of order about the resolution itself. The question is whether the resolution is in order—[Interruption.] I am sorry, the question is whether the Government's amendment is in order. It would be in order only if it could be shown that the information available to the review would be equal to that available to the separate inquiry that has just been announced.

If the amendment was accepted as being in order prior to the knowledge that there were to be two reviews, one by the President of the Board of Trade and another by the Select Committee, and that the information available to the President of the Board of Trade under commercial 453 confidentiality could be used by him to overrule the Select Committee, surely it cannot be in order now, because that information undermines the basis of the amendment. That is what the President of the Board of Trade is trying to present to the House. He will overrule it on the basis of information that is not available to the Committee—[Interruption.]

§ Madam Speaker

The hon. Gentleman has been rising to intervene on the President of the Board of Trade by saying that he wanted to refer to the White Paper. He now raises with me a point of order which has already been raised. The amendment would not be acceptable and it would not have been selected by me unless it was perfectly in order. I have already dealt with that matter.

§ Mr. Heseltine

I want now to set out in detail how I intend to proceed with the review. I must say at once that I have listened most carefully to the many points that have been put to me, particularly by my right hon. and hon. Friends. I believe that I will be able to address their concerns. I intend to look separately at every one of the 21 pits in question and decide whether the case for closure has been fully made.

I have today invited Boyds, an international mining consultancy of world repute, to report to me on the viability of those pits. I also intend to appoint consultants to report on the prospects for British Coal, including any alternative markets that may exist for this product, and to comment generally on the competitiveness of British Coal as an organisation. I shall be having discussions with the generators and the 12 regional electricity companies to satisfy myself that the market prospects for coal have been correctly assessed and that no company is abusing its position in the marketplace.

I will, of course, consult the regulator charged by Parliament with this responsibility. I will report to the House on the level of coal stocks, both at the pithead and at the power stations. I will consider whether plans to run them down are sensibly phased. I will set out for the House the consequences of the switch to gas and the whole question whether gas is cheaper.

I will produce for the House the latest estimate of the likely reserves of gas and the conclusions that we draw from that. I will report to the House on the present scale of gas-generated power stations in production, in build and in the planning process. I will review the use of the consent powers as foreshadowed by my predecessor in his statement of 9 March. I will consider whether it is sensible to mothball—

§ Mr. Robin Cook

Before the right hon. Gentleman concludes his list, will he answer a simple question to which the House is entitled an answer? Why did he not do all those things before announcing last week's decision?

§ Mr. Heseltine

The hon. Gentleman is fully aware that we have considered all those things, but the House wants further and better details—[Interruption.] It is because we are persuaded that that is the right way to go that I have promised the House that I will set out these issues and that the House will have a full opportunity to consider them. [Interruption.]

§ Madam Speaker

Order. The House must come to order.

§ Mr. Heseltine

I will be considering whether it is sensible to mothball some of the 21 pits which were due to close. I will explore once again the opportunities for the private sector in the production of coal. Finally, I will report on the existing and anticipated level of imports and the wider economic implications of this.

Throughout that process, I will be pleased to receive the views of all interested parties, both inside and outside this House. Let me also promise the House this: the consultation process will be aimed at considering all views without restriction. It will have no pre-ordained outcome. The concerns of the House will be met fully in this respect. It will be a genuine review.

§ Mr. Hugh Dykes (Harrow, East)

I am grateful to my right hon. Friend for his most helpful and detailed clarification of the parameters and elements of this thorough review. The words used towards the end of the amendment are very important. They are the Government … allow the Trade and Industry Select Committee to consider the issues as it thinks fit". Is it not therefore, in the light of what my right hon. Friend has just said most helpfully, the same thing as saying that he will accept the recommendations of the Select Committee?

§ Mr. Heseltine

The House knows that I have always tried to be as helpful as possible to Select Committees. However, I have to say that no Minister can give a blank cheque to a Select Committee.

At the end of the three-month consultation period, I will present a White Paper to the House taking into account all the arguments that have been presented and setting out our full conclusions and their implications for the coal industry within the context of our wider energy policy.

§ Mr. Patrick Cormack (Staffordshire, South)

rose—

§ Mr. A. J. Beith (Berwick-upon-Tweed)

On a point of order, Madam Speaker. Is it not a tradition and courtesy of the House that when Ministers give way—which is entirely voluntary—they should do so on a basis that recognises that there are different sides and different parts of the House?

§ Madam Speaker

It seems to me that the President of the Board of Trade has hardly got into his swing yet. He will probably do that later.

§ Mr. Cormack

rose—

§ Madam Speaker

Order. I believe that the President of the Board of Trade was about to give way to the hon. Member for Staffordshire, South (Mr. Cormack).

§ Mr. Cormack

Those of us on the Conservative Benches, and there are many of us who have been extremely concerned over the past week, much appreciate the thoroughness of the review that my right hon. Friend has announced. It is for that reason alone that many of us will support my right hon. Friend in the Lobby this evening. If, by any chance, the review is not as thorough as he promised—although I fervently believe that it will be—we will still have the opportunity to vote against the closures.

§ Mr. Heseltine

I can only say that that thought had occurred to me.

§ Mr. Dafydd Wigley (Caernarfon)

If the review is to be as far reaching as the right hon. Gentleman has said, does he accept that it could affect the profitability or otherwise of pits, including the 10 pits that the right hon. Gentleman has on his list for closure, one of which, Taff Merthyr, was said to have made a £5 million profit? Will he also give an assurance that there is absolutely no substance in the report in today's Guardian which suggested that seven more pits, including Tower in Wales, could be on the hit list?

§ Mr. Heseltine

I will come to an important part of that, but let me give a categorial assurance that I have instructed British Coal that there is to be no change in the number of pits on the closure list. It is 10 and there will be no change in that position. I hope that there will be no room for doubt about that position. I hope that that reassures the hon. Gentleman.