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APPENDIX 1
UNECONOMIC PITS AND THE AGREED PLAN FOR COAL
A Breathing Space
In 1973, Heath's Conservative government carried a Coal Industry Act, through Parliament, the most important element of which (clause 9) aimed to:
"...enable the (national coal) board to moderate contraction in the regions and to give the industry breathing space in which to re-establish itself and achieve viability."
(Tom Boardman, Minister for Industry, Hansard, vol.878,col. 1607).
As another Government spokesman, Mr. Gibson Watt explained to the Standing Committee, £210 million was to be made available to the NCB in the years 1973-76:
"....because of the main problems of possible rundown of pits which may not be 100% economic, in most cases in the assisted areas, the National Coal Board could with the approval of the Treasury and the Minister, have moneys to help with any particular pit." (Official Report, Col.112)
In short, the Coal Industry Act 1973 provided £210 million over three years to phase out the closure of uneconomic pits in the short term while a plan was drawn up for a longer term restructuring of the industry.
The basis of that plan was set out in the National Coal Board document "Plan for Coal". "Plan for Coal" was first thought of under a Conservative government. It was written up under a Conservative administration and inherited by the 1974 Labour Government for which it formed a basis for tripartite discussions.
Original and Unagreed
The original NCB document, "Plan for Coal", was agreed by no one. It merely formed the basis for tripartite discussions between the government, NCB and unions.
The original, unitlateral and unagreed "Plan for Coal" was clear enough about the need to make the industry competitive.
In his introduction, the then NCB chairman, Derek Ezra, wrote:
"Of course, the size that we can make Britain's mining industry rests ultimately on our ability to remain competitive, particularly with oil. That means improving our performance, in tons and productivity. We have the capacity to do that now, as we enter a new era for coal."
Elsewhere it states:
"The majority of investment for boosting production capacity at existing pits will be at general purpose collieries where production costs are significantly lower than average." (p.11.)
"To maintain coal's competitive position, increased investment must result in higher productivity. The investment proposed will lead directly to productivity improvements, with increasing concentration of output at the most productive collieries bringing obvious benefits in greater efficiency."
(p.14.)
But on pit closures, it says merely:
"This massive investment in additional capacity will be required to offset the loss in capacity due to exhaustion and mining difficulties and to provide a platform for future expansion." (Introduction)
and
"Coal is an extractive industry, and our pits have an average life approaching 80 years. Losses through exhaustion of capacity are likely to average 3 million tons a year over the next few years." (p.10.)
Tripartite and Agreed
After the 1974 election, the NCB's "Plan for Coal" served as the basis for tripartite discussions between the new Labour Government, the Coal Board and unions. Those discussions resulted in the "Coal Industry Examination Report" which was presented to, and accepted by Parliament in November 1974. It was agreed and signed by representatives of the three parties. Joe Gormley, Lawrence Daly and Mick McGahey signed it on behalf of the NUM.
This agreed plan for coal was just as insistent as the original NCB document about the need for a viable coal industry to be price competitive. With regard to pit closures it want even further, stating:
"...the need to close pits on economic grounds should be much reduced but inevitably some pits will have to close as their useful economic reserves of coal are depleted. The Board will make every effort to make local use of the valuable pool of trained and experienced manpower which will result from such closures." (Coal Industry Examination Report, November 1974, p.12.)
The original, unilateral, unagreed plan for coal spoke merely of loss of capacity "due to exhaustion and exceptional mining difficulties". The agreed, tripartite, plan for coal to which the NUM was a party and to which Arthur Scargill has pledged himself advocates in the most specific and unambiguous terms the closure of uneconomic pits.
Benn for Coal
For several years during the Labour Government of 1974-79 Tony Benn, as Secretary of State for Energy, was responsible for the implementation of the agreed plan for coal. He displayed no inhibitions about insisting on competitive pricing, the phasing out of government subsidies, self-financing and the closure of uneconomic pits.
Listen to Benn in power.
"It is the Government's policy to phase out subsidies to the nationalised industries. In line with this the Government hope that the coal industry will be able to operate without the need for assistance, apart from the social grants." (27.11.75, Hansard, Vol.901, Col.1062)
"What is needed is a viable industry to get the coal out of the ground. And get it out at competitive prices." (Colliery Guardian, May 1976.)
"The rate of investment is now running at about £300 million to £400 million a year. The National Coal Board expects its own financial out-turn to rise towards 50% self-financing....whereas in the past public money was provided to write off old debts, the new debts acquired as part of expansion will, to the extent to which I have referred, have to be paid off." (2.3.1977, Hansard, Vol.927, Cols.443-44).
That last extract comes from Benn's introductory speech in the second reading of the 1977 Coal Industry Bill. At the end of the debate a money order was proposed and agreed:
"That for the purposes of any act of the present session to increase the borrowing powers of the National Coal Board and to provide for grants by the Secretary of State to the Board and other persons it is expedient to authorise."
Among the measures which it was felt expedient to authorise we read, under the heading "Pit closures":
"3. Grants out of money provided by Parliament to assist in the redeployment of the manpower resources of the Board and the elimination of uneconomic colliery capacity,.." (Hansard, Vol.927, Col.557.)
Benn did not merely steer legislation through Parliament to facilitate the closure of uneconomic pits, he also presided over the closure of uneconomic pits. Answering a question on 4.12.78, he stated:
"I am reluctant to engage in the House in discussion of individual pits, for the reason that I have given, namely, that there is a proper procedure and that where necessary the NUM can come to me and I can raise the matter with the NCB.... I have never found the NUM in any way unreasonable where closures are necessary because of exhaustion or because pits are out of line in economic terms." (Hansard, Vol.959, Col.1015.)
Unsteady Eadie
Benn in the days of his power used economic criteria in deciding on pit closures. In so doing, he was acting entirely in accord with the principles, the letter and the spirit of the agreed plan for coal. Had he departed in any way from that venerable document his Undersecretary of State was there to put him back on the rails.
Between 1974 and 1979 Alex Eadie, MP for Midlothian, was Undersecretary State for Energy. He was one of the Government signatories to the agreed, tripartite, plan for coal. He was also in no doubt that the implementation of that plan required the closure of uneconomic pits.
On 25.3.76, Eadie made the position very clear:
"Although we all sincerely believe that the sort of colliery closure programme that we saw in the late 1960's and early 1970's has gone for ever, mining is an extractive industry, its working medium is constantly changing, and from time to time pits will inevitably have to close because reserves have become exhausted or grossly uneconomic ....some (miners) have to be made redundant....The Government have therefore thought it right to continue for a further period the arrangements which have been in existence since the middle 1960's for paying benefit to men who find themselves in these unfortunate circumstances." (Hansard, Vol.908, Cols. 717-718.)
On 20.3.78 Eadie was speaking in similar vein.
"Although the number of colliery closures is much smaller than in the 1960’s collieries still become exhausted or geological difficulties make them uneconomic to work. In these circumstances they have to be closed and men are made redundant or are redeployed in the industry." (Hansard, Vol.946, Col.1198.)
Conclusion
The Heath Government's 1973 Coal Industry Act was designed to provide a three year breathing space during which uneconomic pits would be subsidised and plans drawn up for an economically viable, price competitive industry.
Wilson's Government (brought to power as an unintentional by-product of the 1974 miners' strike) inherited the first draft of such a plan. The plan for coal then agreed between the NCB, Government and unions was unambiguous about the need to eliminate uneconomic capacity. Tony Benn and Alex Eadie operated it in precisely that spirit. They closed uneconomic pits.
Benn and Eadie are now attempting to cover up their activity in those years when they were responsible for the coal industry. Unfortunately for them the record speaks for itself. During Benn's period at the Department of Energy, 22 pits were closed and 17,000 miners were made redundant on terms grossly inferior to those currently on offer. As Benn made clear at the time, economic criteria were applied in deciding on those closures.
Arthur Scargill has claimed consistently in the course of this dispute that the agreed plan for coal makes no mention of closing uneconomic capacity. We would advise him to read the document, to which, as he constantly points out, both his union and the government were signatories. Should he ever do so, he will find that the NUM and its Labour allies committed themselves to the "inevitable" closure of pits "as their useful economic reserves of coal are depleted".