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Coal Industry (Finance)

Volume 897: debated on Monday 4 August 1975

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asked the Secretary of State for Energy what percentage increase in the price of coal would be necessary—taking no account of the elasticity of demand—for the National Coal Board to cover its costs including interest on capital.

The board aims to break even in the current financial year after covering its costs, including interest on capital.

I am glad to hear that. Is there any chance of recouping some of the enormous amount of capital we have written off for the National Coal Board in past years? Does the Minister agree with Mr. Arthur Hawkins that there is now no scope for increasing the price of coal without making it un-competitive against the price of oil?

I think that the hon. Gentleman is on another tack and is hiding his chagrin at the substantial progress that is being made by the coal industry. Mr. Arthur Hawkins must be responsible for his own statements. We live in a world in which energy must become more and more expensive.

Does the Minister agree that one of the best ways of improving the National Coal Board's finances would be to increase productivity? Will he explain to the House why productivity has been falling since March although recruitment has been increasing?

The hon. Gentleman is correct. In two months—I think in May and June—to some extent productivity fell. The hon. Gentleman will probably have read in the Press that the unions and the National Coal Board are to cooperate and hold meetings to discuss the reasons for this fall. One reason is the training problem with new entrants to the industry. As the hon. Gentleman is well aware, there are also serious geological problems.

Does the Minister agree that if we could get our productivity even within striking distance of the productivity achieved in Germany, Luxembourg and France, it would have a dramatic effect on prices and the general cost of coal in this country would go down very sharply?

I do not agree with the hon. Gentleman's precise analogies. I have been to Western Germany and seen how coal is produced there and some of the technological progress which has been made. Although Germany has made technical progress, I think the hon. Gentleman will like to know that we in this country have nothing to be ashamed of in our technological progress. I have already said that the men, management and unions are seized of the problem of trying to increase productivity. They have substantially increased productivity over a period.