Pit Closures

§ Madam Speaker

I have selected the amendment in the name of the Prime Minister. I shall limit speeches to 10 minutes between the hours of 7 pm and 9 pm.

§ Mr. Harry Barnes (Derbyshire, North-East)

On a point of order, Madam Speaker. The motion that we are to debate ends with a reference to measures that would ensure a fair opportunity for coal to compete for a wider market. No. 36 in the Remaining Orders of the Day and Notices of Motions—last, but not least—is the Energy (Fair Competition) Bill, which would introduce measures such as those referred to in the motion. In those circumstances, is it not right that we should be given an opportunity to consider that measure following today's debate? The Bill could do what the Secretary of State has not done to save the coal industry in this country.

§ Madam Speaker

The hon. Gentleman will be aware that that is not a point of order for me. He is a good publicist, though: I note that it was his own Private Member's Bill to which he referred.

§ Mr. Robin Cook (Livingston)

I beg to move, That this House recalls that Her Majesty's Government encouraged the belief that the proposals in the White Paper, `The Prospects for Coal' would reprieve 12 pits and widen the market for their coal by providing a subsidy for their output; notes that within three months of its publication two of those pits have already closed and no extra contracts have been secured for the coal of the other ten pits, which therefore remain at risk; records its concern at the damage from the continuing closure of Britain's coal mines to the coalfield communities, the mining equipment industry, and the long-term security of energy reserves; and demands that Her Majesty's Government now acts to secure the future of the remaining pits and adopts the recommendations of the Trade and Industry Select Committee in its Report, 'British Energy Policy', which would ensure a fair opportunity for coal to compete for a wider market. Three months ago, the House debated the White Paper on coal. The press reports on that White Paper were all quite clear about its bottom line—that 12 pits had been saved. Most of them put that bottom line in their headlines. The Daily Telegraph announced: 12 pits reprieved by Heseltine". The Financial Times carried the headline: Government to save 12 pits". The Independent—marginally more optimistic than the rest —said: 13 pits have hope of survival". In Today, we read: £500 million bill for taxpayers to reprieve a dozen pits". The Daily Express—the official organ of the state, which saves us from speculating what Conservative central office is saying by faithfully reprinting every word—announced: 36 12 pits and 7,000 jobs are saved". Those half-dozen newspapers did not all reach the same conclusion by accident. They were all heavily briefed, lobbied and guided to the same conclusion—that 12 pits would be saved. But the educational effort that was mounted to get the message across to the press was as nothing compared with the one-to-one tutorials set up to convince Conservative Back Benchers—and many of them believed what they were told.

I see that the hon. Member for Davyhulme (Mr. Churchill) has temporarily absented himself from the Chamber. He was quoted by the Press Association a fortnight ago as saying that Had he known then what he knew now he would have voted against the White Paper rather than merely abstaining. I hope that the Patronage Secretary's representative will convey to the missing Member our hope that we are tonight giving him a second chance to redeem himself. We can assure the hon. Gentleman that there will be more rejoicing tonight in our Division Lobby over the one prodigal who returns to it than over the 295 who got it right last March.

At least the hon. Member for Davyhulme abstained. The hon. Member for Rochford (Dr. Clark), who I am pleased to see is with us, voted with the Government. During the March debate, the hon. Gentleman said: While we hoped that we might have been able to save more pits than the 12 … which we will save, at least we have 12".—[Official Report, 29 March 1993; Vol. 222, c. 58.] I am sorry to say to the hon. Gentleman that we are now 10. Only three months later, we have lost two of those pits. At Rufford, the decision has been taken to close the pit, which will cease production when the current face is exhausted—probably in a couple of months' time.

The hon. Member for Wells (Mr. Heathcoat-Amory), the Minister of State, Foreign and Commonwealth Office, who was then Minister responsible for coal, visited Rufford in February last year. This is what he said to the local paper: Rufford is a fine example of how a loss-making pit can turn round to become a remarkable success. Barely a month before a general election, in a marginal Tory constituency, Rufford was a remarkable success. Now, barely a year into this discredited Tory Government's term of office, Rufford is an expendable failure.

At Markham, production has already ceased. As it happens, I have been down to Markham. Only six months ago, when I visited Markham, there was machinery still in service. It was new machinery—machinery that they were still stripping down to install underground. It was modern machinery—machinery that had helped to make that pit highly efficient and to double its productivity in eight years. It was expensive machinery—machinery that is now among the millions of pounds' worth of machinery that is being left underground in Britain to buckle under pressure and be buried under roof faults.

I hope that, in his reply, the Minister will spare the miners at that pit and at Rufford the humbug that it is they who choose to close the pit by accepting redundancy. In those cases, they had no choice. Those at both pits were told that they could stay open until next year, when the coal contract drops by 10 million tonnes, or they could vote to close this year. The difference was that, if they voted to close this year, they would each get an extra £10,000 on top of their redundancy. We have all contested 37 elections; that is how we got here. I doubt whether any of us would care to contest an election in which the voters for our opponent qualified for a £10,000 bonus.

I fully understand why those miners voted for extra redundancy money. The only thing about which they were being consulted was whether their pit would close this year or next. It is a grotesque travesty of the language to say that any of them have taken voluntary redundancy. Let us at least give them the dignity of recognising 'what the Government forced on them—compulsory redundancy in all but name.

§ Mr. Peter Thurnham (Bolton, North-East)

Will the hon. Gentleman make it clear how he intends to pay to keep pits open? Does he intend to keep all 31 pits open? Does he recollect that previous Labour Governments closed 277 pits without any of the generous redundancy payments that this Government have offered?

§ Mr. Cook

That Labour Government did not make one miner compulsorily redundant. That Labour Government saw an increase in the amount of coal going into electricity generation. I do not take any particular kudos for that Labour Government, as it was like every Government since the war except this one. This is the first Government to see a reduction in the amount of coal for electricity generation. That is why we have a crisis in our coal industry. The hon. Gentleman helpfully brings me on to the reason for the closure of those pits, and the reason why the other 10 are still at risk. It has nothing to do with miners wanting to go.

Neither the White Paper nor the three months since it was published have produced a contract for one extra bag of coal from those pits. That is why they are closing. It will not do for Ministers to say that it is nothing to do with them, that it is not their fault, it is the fault of British Coal for not selling the coal, or the fault of the generators for not buying the coal, or, as the Minister appeared to suggest this morning, the fault of Michael Fish because it has been too warm for the past three months to sell the coal.

It will not do, because it was their idea. It was they who came up with the lifeline of a subsidy to find a bigger market. It was they who let the press believe that that would save 12 pits. Now that it is not working, it is they who, for just once in their ministerial careers, must accept responsibility for it not working. We warned them that it would not work. It would not work because the problem for coal is not its price. One cannot sell coal at any price in a market that has been specially rigged to keep it out.

§ The Minister for Energy (Mr. Tim Eggar)

indicated dissent.

§ Mr. Cook

The Minister may shake his head, but I address my point to him. If there is one thing for which I am grateful to him and his colleagues in the Cabinet, it is that in the past three months they have proved our case about the rigged market. They set out to test the market. The result of that test is already in: two pits have failed it. The result of that test confirms that we are dealing with a rigged market. Let us review the evidence.

Since March, British Coal has relied on the subsidy to offer extra coal for sale to generators at a sharply reduced price. The price is supposed to be a commercial secret, but since no one is buying it, let us give it some more advertising space. The price at which it is offering coal is 38 93p per gigajoule. That is 40 per cent. below the base price in the contract. At that price, generators could produce electricity at a penny-ha'penny per kilowatt hour. That is cheaper than they can produce electricity from the new gas-fired stations, at tuppence per kilowatt hour.

It is cheaper than they can buy electricity from France at threepence ha'penny per kilowatt hour. It is cheaper than they can buy electricity from nuclear power stations, at almost 4p per kWh hour. If ever more proof were needed that we are dealing with a market rigged against coal, what better proof could there be than that the generators will not buy it even when it would give them cheaper electricity?

The largest consumer of electricity in Britain is ICI. It is not a dangerous, leftist front, even if it makes donations to the Tory party. Its power services manager has prepared a comparison which shows how ICI has been disadvantaged by the generators' refusal to buy that cheap, subsidised coal. I shall read it in full, as it is worth sharing with the House: Utilising internationally priced coal … Fiddler's Ferry power-station, 5 miles from ICI in Runcorn, is capable of generating electricity in the range of £10–15/vcMWh. For a high proportion of the time, this power station"— a coal-fired power station— and others like it are underloaded, yet new gas-fired power-stations which require an income of £25–30/MWh are being built and prosper within the market. Generation costs are therefore higher than necessary. He ends by saying: We invite a rationalisation of this economic behaviour. The question that the Secretary of State must answer is this: how can he rationalise that perverse outcome? While he is at it, can he explain why the Government are still approving more gas power stations? Last month, his colleagues at the Department of Trade and Industry approved a new gas power station at King's Lynn. It is an interesting case, because the King's Lynn power station will be wholly owned by the local electricity company. All profits from its sales will go to Eastern Electricity.

I invite the House to speculate on what will happen once that power station, approved by this Government, is up and running. Will Eastern Electricity play the market? Will it whoop with delight when it discovers that a coal-fired power station could give its consumers cheaper electricity than the one that it has just built? If Ministers are so wet behind the ears as to believe that that will happen, they should have taken not the money from Octav Botnar but lessons in how markets work in the real world.

Eastern Electricity will fix its purchasing so that it will take all the output that can be produced by that station, and to ensure that that is what will happen it will do what every other electricity company has done : it will give the new power station a 15-year contract, which guarantees that it will take all the electricity that the power station can produce.

§ Mr. George Stevenson (Stoke-on-Trent, South)

It is called competition.

§ Mr. Cook

My hon. Friend takes my punchline. I have marked him down and will bear it in mind against him.

The Government tell us that this is widening competition. It is not widening competition but closing down competition. Nobody else can compete, whatever their price, for the share of the market that those contracts 39 guarantee the new gas-powered stations. In the next three years, one third of the entire electricity market will be sewn up in these sweetheart deals.

§ Mr. Rod Richards (Clwyd, North-West)

In view of what the hon. Gentleman said about Fiddler's Ferry power station, will he tell the House whether he and his party are for or against the construction of the Connah's Quay power station?

§ Mr. Cook

I remind the hon. Gentleman it is fresh in my mind because I re-read my speech last night—that he made the same request in my last speech. I have to give him the same answer, and it is straightforward: Labour sees no objection whatsoever to the Connah's Quay project, because it is proposed to use sour gas, which cannot be used to heat homes direct and cannot be used in ovens. Our objection is to sweet gas—a premium fuel—being turned into baseload electricity with the loss of half its calorific value. That is not only bad for coal mines but is a daft energy strategy. I hope that the hon. Member for Clwyd North, West (Mr. Richards) is capable of remembering that for the time when we debate coal again in the autumn.

That is why the Select Committee recommended that we should stop handing out licences to every new gas station and that we look at downrating electricity stations to meet peak demand, not running them flat out to meet baseload. The Government totally ignored those recommendations.

There is one other aspect of the rigged market on which I want to bring the House up to date—the interconnector with France. In the White Paper, Ministers welcome changes in the contract with France, which from April will ensure that exports will occur"— that is to say, exports of electricity from Britain to France. It is paragraph 7.106 if the Minister wants to look it up.

I checked last week with the National Grid Company on what exports have occurred since that statement that the changes will ensure that exports will occur. In April, Britain exported to France zero electricity. In May, Britain exported to France zero electricity. In June, Britain exported to France zero electricity. There was a change —I would not wish to deny to the House that since the White Paper there has been some change in our relationship with the French interconnector. The change was that, in each of those months, imports of French electricity were up on the same month one year ago.

I remind the House that we are paying more for the electricity from the French interconnector than we would for electricity from coal—from the pits that we are shutting down. I will happily give way to any Conservative Member who is capable of believing for one minute that France would dream of importing electricity from a foreign source at a higher price and at a cost of shutting 31 French pits. I am not surprised that there are no takers, because we all know that there is not the remotest prospect of the French paying over the odds for an import that will damage their domestic industry, which is precisely what we are doing.

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

As in so many areas, the hon. Gentleman does not seem to have understood the Select Committee report, if he has read it. The report clearly states that most of our electricity 40 companies purchase French electricity because it is cheaper for the company. Although the distortions of the nuclear levy might ultimately make it more expensive, for the companies it is cheaper.

Is he saying that companies should deliberately buy more expensive electricity rather than take what is cheap and on offer? Does he accept that some electricity companies, such as Yorkshire, are buying less energy from the interconnected? Indeed, Yorkshire is not buying any French electricity this year, compared with last.

§ Mr. Cook

The net effect is an increase. In one sense, I welcome the hon. Gentleman's intervention, because it takes me on to my next point. He is absolutely right. The reason why the electricity companies find it profitable to pay more to import French electricity is because—

§ Dr. Hampson

They pay less but the nonsense of the levy makes it ultimately more costly.

§ Mr. Cook

They claim it back. We are daft enough to pay them the nuclear subsidy on all electricity from France. Since March, the Government have not paid a penny in the subsidy that they promised to British coal mines, but they have paid millions of pounds to subsidise electricity imports from France. I remind the hon. Gentleman, who seems to have forgotten it, that recommendation (7) of his own Select Committee was: Electricity supplied from France should cease to be non-leviable. EdF's ability to negotiate contracts to supply-baseload … should be made conditional on UK generators having non-discriminatory access through the French network. Again, those recommendations were ignored by Ministers.

§ Dr. Hampson

indicated dissent.

§ Mr. Cook

That is what the hon. Member recommended to his Government.

There is a contradiction here. Ministers have consistently rejected all the recommendations of the Select Committee to challenge the rigged market. Ministers tell us that they accepted the recommendation of the Select Committee. What they mean—I have listened carefully to what they say—is that they accepted the recommendation of a subsidy. But I again have to say that that was not what the Select Committee recommended.

Before the Secretary of State tries to pull that one on the House, let us be quite clear what the Select Committee recommended. Yes, it recommended a subsidy of 16 million tonnes for electricity generation, but it did so with the parallel recommendation that there should be a requirement on the generators in return to contract for 21 million tonnes of additional coal. What the Government did was to offer generators the subsidy without making them give a commitment to buy any extra coal.

Instead of buying that extra coal, the generators are running down coal stocks at power stations. I have two observations to make about those coal stocks. First, I would have more sympathy with the generators' claim that they have more coal in stock than they need if they had not been so busy importing coal for the past five years. According to their own calculations and their own logic, those imports must now be a mistake. If they do not need all those coal stocks at the power stations, they did not need all the imports that have added to our balance of trade deficit, thus increasing pressure on manufacturing industry to achieve more exports to pay for the coal that they did not need.

41 My second observation is addressed more to the Government than to the generators. In the three months since we last debated the issue, Lord Ridley has passed on, but I debated against him often enough to know that he would not want his role to go without recognition just because he is not here to listen. It was Lord Ridley, after all, who–15 years ago—wrote the strategy that the Government have followed so faithfully. He composed a paper before the Government came to power, explaining how a Conservative Government could run down the coal industry and weaken its power. I looked at it again this morning, and noted that its first recommendation was for the Conservative Government to build up maximum coal stocks, particularly at the power stations". That is why, throughout the Government's term of office, we have had large coal stocks. The aim was to prevent miners from stopping work; now there is a danger that those same stocks will be used to put them out of work for good. That is why the Select Committee recommended that the generators should be required to hold not less than 20 million tonnes of coal—double the level at which they are apparently aiming.

The White Paper, for once, did not ignore that recommendation. In paragraph 13.23, Ministers committed themselves to having talks with the generators, about stocks "as a matter of urgency". May I ask the Secretary of State what happened to those stocks? What is his definition of urgency? Why are the generators behaving as though the White Paper had said nothing about the level of stocks? When the generators have run down the stocks, there will be no point in turning around and asking Britain's coal mines to increase output; by that time the mines will be closed. They will have been filled in and flooded—and not just the 12 that the White Paper claimed to have saved.

The House must now face up to the gravity of the crisis in the coal industry. Between them, the pits not included among the 12 are already producing more than 30 million tonnes. That is all that the generators will buy from next year onwards. On present markets, not only will all those 12 pits go by March; so will some of the others that have yet to figure on any closure list. That will be a tragedy for the surrounding communities—communities that were built because a pit was there; communities that will have no work when the pit is gone. It will also be a tragedy for the nation, because with those pits will go our access to our coal reserves.

Silverdale has figured in the press as one of the pits that may be next for closure. The shaft and tunnels at Silverdale give access to 30 years' supply of coal. No one else in the world would be filling in shafts that give access to such an immense national resource.

The other week, the Chancellor of the Exchequer shared with us his insight into the economics of the coal industry, observing: Coal is a rather old-fashioned way of generatiing electricity. I concede that it is rather old-fashioned in the Chancellor's constituency, where his Government have just closed the last pit; but if it is so old-fashioned, why have the last two dozen power stations ordered in the United States been coal-fired? Why does the United States expect coal consumption to rise by one fifth in the next decade? It should not be difficult for Conservative Members to obtain 42 the United States coal figures: they need only ask that notable donor to the Tory party, Lord Hanson, who owns most of the pits. He may not take kindly to the news that the party into which he has poured so much money is describing his operations in America as old-fashioned.

Not only have we the largest coal reserves in Europe; as Conservative Members want to talk about the cost of production, let me tell them that we have the most efficient coal mines in Europe. We are busy closing them down, while other Governments are working hard to keep open the least efficient pits in Europe. The case for saving Britain's pits is not based on nostalgia for the past; the case for saving our coal industry is based on their success in the present.

§ Mr. Graham Riddick (Colne Valley)

What percentage of the coal that will be burnt in the new coal-fired power stations in America has come from opencast mines?

§ Mr. Cook

A number of mines in America are not as deep as ours, but they are not opencast mines by any stretch of the imagination. [Interruption.] Pearson and Hanson, which owns them, runs deep mines, but they are not as deep as ours. Pearson is a wholly owned subsidiary of Hanson. [Interruption.] I hear an hon. Member ask where else in Europe Governments are seeking to keep pits open. Germany is now providing its coal industry with three times the amount that our Government have contributed to the British industry.

America has opencast and deep mines, as has Britain. It is for that very reason that the majority have been closed. If the hon. Member for Colne Valley wishes to make a case on behalf of opencast, he must consider the point that I have been making throughout my speech about the market for coal. If the current position continues, opencast as well as deep mining in Britain will be in trouble.

§ Mr. William Cash (Stafford)

The hon. Gentleman referred to Germany. Does he concede that, according to the most recent figures available to us, in 1991 the German coal industry received £9 billion—pounds, not ecu—of authorised state aid through the European Commission? Does he accept that we should investigate the imbalance vis-a-vis the British coal industry?

§ Mr. Cook

I congratulate the hon. Gentleman on getting in a pro-coal and an anti-European point simultaneously. I agree with the thrust of his remarks, which is essentially correct. If we take the European perspective—although I suspect that the hon. Gentleman may not wish to do so—it is insane that in Europe we are closing down the most efficient pits, which produce the cheapest coal, while other Governments are providing substantial subsidies. The German Government, supported by the Common Market, are doing so to keep open pits that produce coal at three times the price at which it is produced in Britain.

§ Dr. Hampson

Will the hon. Gentleman give way?

§ Mr. Cook

I have already given way to the hon. Gentleman once.

As I have said, the case for Britain's pits is not based on a nostalgic affection for the past; the case for saving our coal industry is based on their present success. Ironically, only last week British Coal issued a press release showing 43 that productivity had risen by a quarter in the past year, and that, in the past eight years output per man had arisen by 300 per cent.

If any other industry had shown such spectacular advances, Ministers would have showered it with Queen's awards; they would be queuing for photo-opportunities with the success story. The Prime Minister would be memorising statistics in front of a mirror, in order to reel them off at Question Time. Instead, because it is the coal industry, this industry is treated with vindictive vandalism by Ministers who are determined to prove that they were right all along when they told us that 31 pits would have to close.

The White Paper was not about how to keep miners' jobs; it was about how to keep their own jobs while ending the miners' jobs. The White Paper was always a fraud and, since the two closures, it can be seen to be a fraud. It must be seen to be a fraud even by the Conservative Back Benchers who were taken in by it last March. I forgive them for being taken in at the time; I am prepared to accept that they voted in good faith, thinking that they would save 12 pits, but they now know that they did not. We shall not forgive them—and the miners will not forgive them—if they let themselves be taken in again.

I give Conservative Members this warning: if the Government get away with it tonight, more of the 12 pits will close before the House returns from the summer recess. If Conservative Members want to save those pits, they must do it tonight. They will not get a £10,000 bonus if they vote with us tonight—that is a cynical ploy used by the Government—but they will stop more pit closures, halt the destruction of more coalfield communities and prevent the loss of more coal reserves. That is what we shall vote for tonight; it is what the nation wants the House to vote for tonight, and it is what Conservative Members should join us in voting for.

§ The Secretary of State for Employment (Mr. David Hunt)

I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof: 'welcomes the Government's acceptance of the principal recommendations of the Report by the Trade and Industry Committee "British Energy Policy and the Market for Coal" (HC 237), and in particular the offer of a transitional subsidy for additional sales of United Kingdom underground coal for electricity generation, the wide ranging package of measures to assist the regeneration of coal field areas, the commitment by British Coal that they will offer to the private sector pits which they do not themselves wish to keep in production, and the Government's intention to bring forward as rapidly as possible the legislation necessary to privatise British Coal.'. The amendment stands in the name of several of my right hon. Friends, including the President of the Board of Trade. I am sure that I speak for all hon. Members when I say how pleased we are that he has been able to return home and that we wish him a speedy recovery to full health.

I have participated in many coal debates in the past 10 years, for several years as the Minister with responsibility for coal, then as Secretary of State for Wales and now as Secretary of State for Employment. I hope that the many hon. Members who have participated in the various debates will accept that there is no monopoly of concern for the coal industry from one party rather than another.

44 If Labour Members reflect for a moment and read the reports of the many debates in Hansard, they will find that concern for the coal industry and its employees could be found in all parties.

My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) scored a magnificent try against the hon. Member for Livingston (Mr. Cook) when he pointed out that, under a period of Labour Government, 277 pits had closed. The hon. Gentleman immediately leapt to a conclusion; Hansard will show that he used statistics relating to the last period of the Labour Government, but he made a fatal error. My hon. Friend was, of course, referring to the period of Labour government between 1964 and 1970. During that period, 277 pits closed. In 1967, just about 60 pits closed.

§ Mr. Ronnie Campbell (Blyth Valley)

rose—

§ Mr. Hunt

The hon.Gentleman may not like the facts, but I am going to give them to the House.

Under that period of Labour government, in one year, 60 pits closed and, in the following year, just under 60 pits closed, so just over 120 pits closed within two years. If my right hon. and hon. Friends refer to Hansard of that time, they will read the barrage of criticism from all parties against the then Labour Government because 185,000 coal industry employees lost their jobs in their local collieries.

§ Mr. Campbell

rose—

§ Mr. Hunt

I shall give way in a moment.

As I said, 185,000 jobs were lost in the collieries, and there were no generous redundancy schemes then. The amount of money received by someone leaving the coal industry at that time was pretty mean, and Labour Members said so at the time. There was no enterprise company charged with bringing new life to coalfield communities,and there was no opportunity for employees leaving the coal industry to find another job or another chance. When the hon. Member for Livingston seeks to put on one side that period of Labour Government, he does himself and his party an injustice. The concern expressed at that time was expressed by all parties. The hon. Member for Livingston is right to recall that there were substantial further pit closures in the 1970s under a Labour Government. I think that by 1979 the number had grown to 353. We have to ask why that happened.

§ Mr. Joseph Ashton (Bassetlaw)

Because they were all worn out.

§ Mr. Hunt

No, not because they were all worn out. Of course, that was true in some cases, but—

§ Mr. Ronnie Campbell/

rose—

§ Mr. Hunt

I shall not let a rather silly comment pass —I am going to deal with it. I ask you to note, Mr. Deputy Speaker, that the hon. Member for Blyth Valley (Mr. Campbell) is trying to change the subject quickly, but I shall not let the hon. Member for Bassetlaw (Mr. Ashton) get away with it. I shall give way, but I am going to deal with the point raised. [Interruption.] Labour Front-Bench Members should not get excited.

§ Mr. Ashton

rose—

§ Mr. Hunt

I shall deal with the sedentary comment made by the hon. Member for Bassetlaw who can then 45 respond. The pits were not closed because they were all worn out. He has only to read the statements made at the time by Labour Ministers: the pits were closed because there was no market for their coal. He has to ask himself why. It was because the domestic market contracted dramatically; people stopped burning coal in their homes and started burning what the hon. Member for Livingston referred to as the sweet premium fuel called gas. He forgot to mention, however, that its calorific value is much higher than that of coal.

If the hon. Member for Bassetlaw reads Hansard, he will find statements made by Labour Ministers in which they said that, sadly, there was no market for the coal and it would therefore be wrong to keep the pits open, even though there were still a number of substantial recoverable reserves.

§ Mr. Ashton

I came to the House a year or two before the Minister. I arrived in 1968 in a by-election, during a pit closure in my constituency. Unemployment was running at 1 per cent. and miners who wanted to move to another pit were found jobs—they were not forced into redundancy. One of the reasons for the closure, which the Secretary of State has not mentioned, was the price of oil. It was at rock bottom until the war between the Arabs and the Israelis in 1973, which caused it to rocket. The price trebled around the world and, incidentally, it also caused inflation to treble, a problem for which he has always blamed the Labour Government. Every miner who wanted a job at another pit was moved. Thousands moved to my constituency where there are still three profitable pits. The Secretary of State offers only half-truths, like all solicitors and cheapjack lawyers who do not have a brief.

§ Mr. Hunt

The hon. Gentleman offers a lot of bluster but very few facts, as befits an occasional columnist for a newspaper—I shall not embarrass him by saying which newspaper. He should reflect on what he said. I will not embarrass Opposition Members by asking how many of them burn coal in their own homes—[Interruption.] I suppose that the record will not show that there was a small smattering of individuals.

§ Mr. Kevin Barron (Rother Valley)

Will the Secretary of State give way?

§ Mr. Hunt

I will give way in a moment.

The point that I was making stands. There was a savage contraction in the domestic market for coal.

§ Mr. Ronnie Campbell

I am not surprised that the Government want to close the 12 pits. A few years ago, the Secretary of State was the Minister responsible for coal and at that time I worked in Bates colliery. We went through the colliery review procedure, which was fairly new at the time, and Bates colliery won. The right hon. Gentleman was the Minister responsible for coal and that pit still shut. I was a miner at that pit and I know all about it. There were still 29 million tonnes of coal in that pit and it could still be working today.

§ Mr. Hunt

The hon. Gentleman will recall that British Coal spent some time considering the report of the independent—

§ Mr. Ronnie Campbell

rose—

§ Mr. Hunt

I hope that the hon. Gentleman will accept that British Coal spent some time considering the report and, in the end, it did not accept the view that the hon. Gentleman has just put forward.

The hon. Member for Blyth Valley has just made a point that I made earlier. Pits closed when they still contained a substantial amount of coal because the market changed. I examined the case for Bates colliery very carefully at the time. I was convinced that British Coal had made the right decision. However, it was a matter for British Coal to determine.

§ Mr. Riddick

Will my right hon. Friend give way?

§ Mr. Hunt

Yes, in just a moment.

The issue raised by my hon. Friend the Member for Bolton, North-East should not be shrugged aside easily. From time to time, coal must face substantial changes in the energy market.

§ Mr. Riddick

A few moments ago, my right hon. Friend challenged Opposition Members to say how many of them burnt coal in their own homes. Is he aware that my local Labour-controlled council—Kirklees council—has, over the past year, forced hundreds, if not thousands, of my constituents to stop burning coal by imposing unnecessary smokeless zones on the rural parts of my constituency, despite the fact that emission figures of smoke and sulphur dioxide in those areas fall within the guidelines set by the Department of the Environment and the European Community? Is that not plain Labour hypocrisy?

§ Mr. Hunt

rose—

§ Mr. Martin Redmond (Don Valley)

On a point of order, Mr. Deputy Speaker. Will you draw the attention of Conservative Members to Government legislation regarding smoke control zones?

§ Mr. Deputy Speaker (Mr. Michael Morris)

That is not a point of order for the Chair.

§ Mr. Hunt

My hon. Friend the Member for Colne Valley (Mr. Riddick) has raised a very important point. I wonder how many Opposition Members have been councillors in local authorities that have decided not to install coal-fired units in local accommodation. I could quote many examples of that. However, I simply raise that matter to refute the point made by the hon. Member for Livingston.

I want now to consider what happens today.

§ Mr. John Evans (St. Helens, North)

rose—

§ Mr. Barron

rose—

§ Mr. Hunt

I should give way to the hon. Member for Rother Valley (Mr. Barron).

§ Mr. Barron

I should like to take the Secretary of State back to the point about pit closures. Will he name any Conservative or Labour Government who have ever closed coal mines in this country for foreign coal imports?

§ Mr. Hunt

There has always been a level of imports from other countries and that has been the case under all Governments—[Interruption.] I am answering the point raised by the hon. Member for Rother Valley. I have always seen a level of coal imports—

§ Mr. Barron

What about power stations?

§ Mr. Hunt

I have been present in many coal debates when Opposition Members have urged the Government to put a cap on the level of imports as if protectionism was the answer for the coal industry. I reject that argument. The coal industry now faces a substantial change in the energy market and that must be faced with reality instead of trying to introduce open-ended subsidies, which the Select Committee on Trade and Industry did not suggest but which was implicit in the comments of the hon. Member for Livingston.

§ Mr. John Evans

The Secretary of State has referred to the difficult period in the 1960s and 1970s when quite a number of collieries closed. The Secretary of State represents a north-west constituency and he will acknowledge that a substantial number of small collieries in St. Helens and Wigan closed for two major reasons. The first was because they were reaching the point of exhaustion and the second was that many of their reserves could be exploited from a brand new big colliery called Parkside.

Will the Secretary of State acknowledge that the vast difference between that period and the closure of Parkside is that Parkside has about 30 million tonnes of coal reserves which will now be lost to the nation and will remain in the ground for ever?

§ Mr. Hunt

I will deal with that point by referring back to the point made by the hon. Member for Bassetlaw, who said that the pits closed because they were worn out. The answer is not as simple as that. Some pits were exhausted while some were economically exhausted. Some could be accessed from other shafts in other mines. I am aware of all that. Equally, some pits had a substantial amount of coal which could still have been mined. However, the market, in the phrase used by a Labour Minister at the time, had collapsed.

I am trying to explain how I believe coal has a future. However, it will not have such a future if we go down the route advocated by some Opposition Members of trying to introduce an open-ended subsidy and of trying to keep alive uneconomic pits.

§ Mr. Peter Hardy (Wentworth)

Will the right hon. Gentleman give way?

§ Mr. Hunt

I will give way in a moment, but I want to make this point because it is very important.

The hon. Member for Livingston said that output per man shift in the past few years has increased substantially. That is true. Since 1979, this Government have invested a substantial amount of money in support of the coal industry. The figure now totals £18,000 million. In the last financial year, that support has enabled British Coal to have a fixed capital programme of more than £180 million. There will be a similar figure in this financial year. It is good that the industry has responded by improving its output per man shift.

§ Several hon. Members

rose—

§ Mr. Hunt

I will indicate when I am ready to accept interventions, which will be in just a moment after I have made my next point.

The hon. Member for Livingston should consider what happened during the period of the Labour Government between 1974 and 1979 to which he thought my hon. Friend the Member for Bolton, North-East was referring. 48 Listening to the Labour party, one would think that Labour has a monopoly of concern for improving output per man shift. However, I will remind the House of the figures.

In 1974, when the Labour Government took office, output per man shift was 2.94 tonnes. What was the output per man shift by 1979? Having listened to the hon. Member for Livingston, one would have thought that output per man shift had increased substantially by 1979. In fact, it had declined from 2.94 tonnes to 2.89 tonnes.

In the period that I have referred to, there was half a decade of inaction in respect of the support being given to coal and in respect of the response of those who worked in the industry. Opposition Members should reflect on that for a moment before they quote the nonsensical figures that they have put forward from time to time—[Interruption.] The hon. Member for Livingston cannot dispute the figures for output per man shift. [Interruption.] The hon. Member for Bassetlaw keeps shouting, "Nonsense". He thinks that he has made a point. He has not made a point at all, because output per man shift has been calculated on the same basis over the period that I am talking about, and, of course, it relates production to the number of people in the industry.

Let me deliver the figures again. In 1974, it was 2.94 tonnes per man shift, and in 1979, it was 2.89 tonnes.

§ Mr. Ashton

What was the total tonnage?

§ Mr. Hunt

I am responding to the points raised by the hon. Member for Livingston. That is what debating is all about, even if the hon. Member for Bassetlaw does not understand it. Output per man shift was announced by British Coal just a short time ago as having reached 8–5 tonnes per man shift.

§ Mr. Ashton

What is the total tonnage?

§ Mr. Hunt

That is a creditable achievement.

§ Mr. Deputy Speaker

Order. I keep hearing a sedentary intervention from the hon. Member for Bassetlaw (Mr. Ashton), "What is the total tonnage?" If the hon. Gentleman wishes to intervene, he should rise in his place and see whether the Secretary of State will give way; otherwise he should stay quiet.

§ Mr. Hunt

I am going to answer the hon. Gentleman. Do not let me miss an opportunity to put the hon. Gentleman right.

I now quote from the National Coal Board, as it then was, summary of statistics. I can now confirm that all undergound output per man shift in 1974 was 2.94 tonnes and in 1979 it was 2.89 tonnes. What about the output? National Coal Board mines output in 1974 was 116.9 million tonnes, and in 1979 it was 109 million tonnes.

§ Mr. Ashton

rose—

§ Mr. Hunt

The hon. Gentleman should heed your words, Mr. Deputy Speaker. It is about time he stopped his nonsensical sedentary interventions. I have been seeking for the past few minutes to deal with the points that were raised by the hon. Member for Livingston. The speech of the hon. Member for Livingston read rather like the curriculum vitae for George Orwell's Minister of Truth. I have never heard such a rewrite of history.

§ Mr. Ashton

On a point of order, Mr. Deputy Speaker. You rose to your feet and criticised me—probably quite 49 rightly—for making interventions from a sedentary position. The Minister will not give way, although he keeps challenging me. What is the total tonnage for this year and what is the forecast for next year?

§ Mr. Deputy Speaker

The hon. Gentleman is not being fair to anybody—either myself or the Minister. I heard him ask from a sedentary position, "What was the total tonnage output?" I heard an answer given. Whether or not the hon. Gentleman likes the answer is another matter, but the Secretary of State gave way.

§ Mr. Hunt

We go from bad to worse with the hon. Gentleman. We are, of course, dealing with tonnages which are well known to the House, and up-to-date figures are set out not only in the energy review but in the Select Committee's report.

§ Several hon. Members

rose—

§ Mr. Hunt

Just one moment. I was dealing properly with the hon. Gentleman's sedentary intervention. I do not want to occupy the House any more with his sedentary interventions, but I was giving the output per man shift figures for 1974 and 1979, and his sedentary intervention was, "What was the total output?" I have now given the total output figures for 1974 and 1979, and he is still not satisfied, but, of course, those figures do not prove his point.

The point that I was making is that we should concern ourselves in this debate–1 hope that hon. Members will address the real issues, and the real issue which the hon. Member for Livingston did not address—[Interruption.] I would be obliged if Opposition Members did not criticise their hon. Friend so much by saying that he has not dealt with the issues. I am dealing with issues to refute the hon. Gentleman's point.

§ Several hon. Members

rose—

§ Mr. Hunt

Just one moment. As we look forward to the future, let us consider the consequences of the second substantial shift in the marketplace for coal that is now used for electricity generation, just as we considered the first substantial shift in the marketplace away from coal being used in the—

§ Mr. William O'Brien (Normanton)

Will the Secretary of State give way?

§ Mr. Hardy

Will the Secretary of State give way?

§ Mr. Hunt

I shall give way again in a moment.

The point that I am making is that we have to address the substantial shift in the market for domestic coal, just as we did between 1964 and 1970; now, we look at the shift in the market for coal for electricity generation.

The Government carefully read the report of the Trade and Industry Select Committee and accepted its main thrust. Specifically, if Opposition Members will recall, we accepted the main recommendation and offered a temporary and declining subsidy for additional sales of British deep-mined coal. We have asked the industry to provide us with firm evidence of the additional sales that it believes that it can secure and the amount of subsidy that it will require.

If hon. Members look at the Order Paper, they will see that, immediately following this debate, there is a motion on financial assistance to industry, which 50 authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance … sums exceeding £10 million in total but not exceeding 120 millon in total to support sales of coal produced from underground mines in the United Kingdom.

§ Several hon. Members

rose—

§ Mr. Hunt

I shall give way later.

That motion, of course, releases the necessary funds to keep the commitment that was made by my right hon. Friend the President of the Board of Trade. I shall put the record straight again and report exactly what my right hon. Friend the President of the Board of Trade said in his statement on the coal industry on 25 March. He said: I cannot guarantee that supplementary sales will be achieved by British Coal. Later, he said: 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."—[Official Report, 25 March 1993; Vol. 221, c. 1230–31.] I had to quote that statement because the hon. Member for Livingston did not quote Hansard. He confined himself to quoting newspapers. When we quote newspapers, we deny the existence of debates and statements in the House. Nothing could have been clearer than my right hon. Friend's point, and I have quoted it in order to put the record straight.

§ Mr. Hardy

Is it not incredible that, a few moments ago, the Secretary of State boasted about the vast amount of public money that the Government invested in the coal industry and yet the same Government have been party to rigging the market to prevent the coal industry from taking advantage of the most astonishing increases in productivity to which the right hon. Gentleman might refer?

Is the Secretary of State aware that, a few weeks ago, before the President of the Board of Trade was taken ill —one hopes that he will be quickly back to the House to maintain the debate—his hon. Friend the Member for Rochford (Dr. Clark) and I were present at a meeting at which the President of the Board of Trade said, "Isn't it a pity that the enormous increase in productivity in the mining industry did not take place earlier?"

The previous chairman of the board had to get to his feet to contradict the President of the Board's point, because that increase in productivity has been taking place almost consistently for the past four or five years. Having achieved record productivity, unmatched in the rest of British industry, is it wise for the Government to write off their investment in mining communities as they are doing?

§ Mr. Hunt

I very much welcome the hon. Gentleman's comments about my right hon. Friend the President of the Board of Trade. I am grateful to him for ensuring that they were made by the Opposition. So far as the allegedly rigged market for energy is concerned—[Interruption.] All right— so far as the rigged market for energy is concerned, it is rigged in favour of coal because—

§ Mr. Stevenson

rose——

§ Mr. Hunt

Let me answer the point.

As the President of the Board of Trade pointed out, there is a subsidy of about £1 billion a year, which goes directly to ensuring that the market is weighted in favour of coal. We are now dealing with a market that is becoming freer, and decisions are being made by energy generators in the context of that freer market.

If Labour Members re-examine the report of the Select Committee on Trade and Industry, they will see that several recommendations have been broadly accepted by the Government. The Government have accepted the first recommendation relating to the reform of working practices. They have accepted the broad thrust of recommendations Nos. 14, 15, 16 and 17 relating to the subsidy for additional sales of coal and recommendations Nos. 27, 28 and 29 relating to the establishment of an independent licensing authority. The White Paper in paragraphs 30 and 31 proposes extra funding for the support of clean coal technology. In the White Paper, the Government have broadly accepted paragraph 32 relating to the annual report of the energy commission and the energy advisory panel.

As I said previously, the future of the coal industry has been debated in a way in which such matters should be debated—with informed reports from Select Committees. However, the Government are not bound to accept all of the recommendations. For example, as my hon. Friend the Member for Leeds, North-West (Dr. Hampson) pointed out earlier, it would be illegal to accept recommendation No. 7.

Recommendation No. 11 relates to the reduction in output from opencast mining. I simply ask those Labour Members who are sponsored by the Transport and General Workers Union and who have made it clear that they do not want to see any reduction in jobs in the opencast coal industry and the nuclear industry to reflect for a moment. Trade unions throughout the country have made it clear that they do not want to see any reduction in jobs in the oil and gas industry.

§ Dr. Hampson

My right hon. Friend will appreciate that the Select Committee tried to strike what we called a "balanced energy policy". In a way, that "balanced energy policy" could be interchanged with what the Leader of the Opposition called an "integrated energy policy" in a debate in December 1975. I remind my right hon. Friend that the Leader of the Opposition said that the Labour Government had an effective policy for the development of oil and gas resources but a policy for our coal industry and also for our nuclear industry. His balance was interesting—he did not put the coal industry first. He said: This is a policy of which we should be proud". —[Official Report, 8 December 1975; Vol. 902, c. 164.] That sort of balance and integration was at the heart of the Select Committee's proposals.

§ Mr. Hunt

I am grateful to my hon. Friend for putting the record straight.

§ Mr. Terry Lewis (Worsley)

First, I declare that I am sponsored by the Transport and General Workers Union. I also have a local interest in opencast mining. Many of us are fearful of, and opposed to, the extension of opencast mining on green belt land and land that is contaminated by previous workings. Some of us want to see a more strenuous approach taken by the Secretary of State and his 52 colleagues, especially with regard to mineral planning guidelines, so that local authorities and local communities can make their own decisions—and not be pressed by Whitehall into accepting the national needs as perceived by Ministers—and safeguard the environment at a time when British opencast miners submit their hideous opencast applications.

§ Mr. Hunt

The hon. Gentleman criticised me previously for the length of my speech. I simply point out to Labour Members that I am prepared to give way, but they must accept that my speech will be much longer as a result—[Interruption.] I will deal with the point, although the shadow Secretary of State for Employment criticised me for making too long a speech in a previous debate after I had given way to 25 interventions. I believe that Ministers and Opposition spokesmen should give way and I now respond. However, in giving way, I hope that Labour Members will recognise that my speech will be longer as a result.

§ Mr. Robin Cook

rose—

§ Mr. David Hunt

Let me deal with that point. I understand that the hon. Gentleman has already given considerable advocacy to the views of his constituents on environmental issues not only to the Minister for Energy but to the Secretary of State for the Environment. He will know that there are checks and balances in the system to ensure that environmental considerations are taken properly into account.

§ Mr. Cook

I think that my hon. Friends are concerned not about the length of the right hon. Gentleman's speech but about the fact that, in the 35 minutes that he has been speaking, he has not once addressed the crisis in the coal industry. If he maintains that the crisis is caused by a free and open market, which I think he referred to earlier, will he now address himself to the central point of our case, which is that British Coal cannot sell coal to the generators at a price that would produce electricity to the consumer at a cheaper price than from any other source?

§ Mr. Hunt

I have already said that we must deal with a dramatic contraction in the market for coal for electricity generation. To deal with the hon. Gentleman's specific point, my right hon. Friend the President of the Board of Trade made it clear to the House that he accepted the broad thrust of the Select Committee's recommendation that a subsidy should be provided to ensure that genuinely additional sales of coal for electricity generation could be provided by ensuring that the difference between world energy prices and the cost price was covered by such a subsidy.

§ Mr. Stevenson

rose

§ Mr. Hunt

I shall deal with the point raised by the hon. Member for Livingston and then I shall give way.

The subsidy is there and available not only to British Coal but to the private sector to ensure that the private sector can take advantage of genuinely additional sales of coal to the electricity generators.

§ Mr. Robin Cook

The House is aware that the subsidy has been in place since March. The question I put to the Secretary of State is this: now that the subsidy is in place and the price of coal could provide cheaper electricity than any other source, and if it is a fair market, why will the 53 generators not buy it? If the Secretary of State will not answer my question, will he answer the question from ICI? Why is ICI being asked to pay twice the price for electricity that it would pay if the generators bought that coal?

§ Mr. Hunt

I remember another recommendation made by the Select Committee [Interruption.] This directly answers the point made by the hon. Gentleman. The Select Committee recommended that electricity generators should keep a minimum of 20 million tonnes at the power stations. At present, the figure is 30 million tonnes. That 30 million tonnes at the power stations obviously has an effect on the market. I have made it clear that the subsidy is there. Provided the House approves the subsequent motion on the Order Paper, the subsidy will be in place and the money will be available. It will then be for British Coal to ensure that it secures those additional contracts.

§ Mr. Cook

I am delighted that the Secretary of State referred to the same commitment that I referred to earlier—that is, that the generators should maintain stocks of not less than 20 million tonnes. Currently, the two generators propose to reduce their stocks to 10 million tonnes. May I take it from what he said that the Government will order the generators to maintain a level of 20 million tonnes, which will release additional markets?

§ Mr. Hunt

As far as the tonnages kept at the power stations are concerned, I understand from my hon. Friend the Member for Rochford (Dr. Clark) that we are discussing with the electricity generators what the level should be. What I said is true: although the recommendation was 20 million tonnes, the amount at the generators today is 30 million tonnes.

§ Dr. Michael Clark (Rochford)

My right hon. Friend has referred to what the Government have offered to do to help British Coal to bring its price down in order to enter markets that would otherwise not be open to it. He has also mentioned that it is up to British Coal to find those markets and, in many ways, I agree with him. Does he accept, however, that it is very difficult for British Coal to find all the markets that it might want for generation if the generators are insistent on building new gas-fired power stations and will not offer coal-fired power stations for sale at a reasonable price?

Would not it help enormously to overcome the problem of finding markets for British Coal if the generators were reminded of their duopoly position and of the obligations they have? They should be encouraged to sell surplus coal-fired power stations at a realistic asset price rather than try to sell them at a price equivalent to the cost of building new high-technology power stations that those sold-off power stations would then have to compete against?