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JOHN HUMPHRYS: In a few weeks from now the
government will decide the fate of Ellington Colliery, the last pit in
north-east England. Its owners say it can't survive without government
subsidy... a word that's been written out of the New Labour lexicon. Nine
more mines are under threat and, as Iain Watson reports, the government
has to decide between alienating some of its loyal supporters and jeopardising
its own credentials.
IAIN WATSON: This is living history - The
last working pit in Northumberland. It's already been granted one reprieve
by its owner. The 380 miners here feel they are living on borrowed time.
They know that, very soon, they could be clocking off permanently. Time
is running out at Ellington ...this pit will close by the end of the month
unless the government steps in with enough subsidy to secure its future.
And its owners - RJB mining - say that nine more pits could close over
the next two years unless the government intervenes. Labour's core supporters
- those who kept faith with the party during the long years of Conservative
government - are now saying 'it's payback time.'
KEVIN CHARLTON: Everyone's down, really down.
I mean you've seen one or two lads there coming through, their heads is
down, you know. Miners have always voted Labour we're labour through and
through, bit disappointed with the response we're getting from the Labour
Party, we're expecting them to do something.
DENIS MURPHY MP: Whether it's a debt of honour,
or it's just, I think the phrase is 'fairness not favours,' I think it
is perfectly reasonable for people here to ask for their government's help,
a government and a party that they've supported for many, many years loyally..
Equally I think the government have a responsibility to ensure public
money is spent wisely. I could think of no better way of spending public
money than supporting the miners here
GEOFFREY ROBINSON: I think the Prime Minister and
the Chancellor have difficulty subsidising the coal industry, traditional
Labour, extractive industry and we wouldn't make that a major point of
policy but it does seem to me we have the coal, we have the miners, once
you close them you won't , you won't open them again you won't get people
to go back down again, so we've got the coal, the miners, we've got the
communities, and supplying a very valuable part of our energy needs at
the moment - why close it down?
WATSON: The coal industry is, once
again, in crisis. With a strong pound, it's cheaper for the electricity
generators to buy their coal from abroad. So, RJB Mining - the private
owners of most of Britain's deep mines - has asked for government help.
The Department of Trade and Industry say that they are still sifting through
the figures. But a former Ellington employee is urging his government
to overcome any ideological barriers to state subsidies.
DENIS MURPHY MP: We haven't yet recovered from
the colliery closures of the 1980s and 1990s. Unemployment within the
region, within the constituency has remained stubbornly at more than twice
the national average. We are very good at mining coal - this is the last
colliery in the great northern coal field - I would like to see it remain,
not just for emotional reasons - though I think that's part of it - but
because it provides and helps underpin the local economy.
WATSON: Back in the eighties Ellington
was at the sharp end of the action in the miners strike. When Ian McGregor
took over as coal boss, the industry employed around 200,000 people. This
has fallen dramatically - just 12,000 are left today. The fight to save
the remnants of the industry has moved on and government is being asked
to provide subsidy. They say they might face resistance from the European
Commission. Bailing out an industry from scratch is more difficult than
simply continuing with firm state support. But a former Treasury minister
says all they have to do is ask.
ROBINSON: We can - without any
problems in Europe, I'm quite sure subsidise our coal, it's not a huge
output, it's not a huge industry any longer - I mean the Germans subsidise
theirs to the tune of about two and a half billion pounds a year. There's
no problems if we want to subsidise ours, nobody is going to challenge
it in the courts or with the Competition Commission in Brussels - no I
don't think there is any danger to that at all.
WATSON: But the attitude of the
European Commission has yet to be put to the test. The Department of Trade
and Industry has not even applied for permission to subsidise British
Coal. They say that, morally, it would be more difficult to argue against
foreign coal subsidies if they start pushing for some of our own. But
the European Commission is keen not to be seen as the excuse for British
government inaction. In a series of letters they've sent to the mining
unions they clearly state: "the decision on whether to offer financial
assistance to the coal industry remains the choice of the government of
the member state concerned." If the government does ask for permission
to subsidise coal, some say that Europe may not process the application
quickly. Subsidy sceptics like the Competition Commissioner Mario Monti
may demand that the industry goes further in improving productivity.
MARTIN O'NEILL: I think the issue of state
subsidy is very much one of yesterday's debates and I think that the Director
General in the commission and the commissioner himself, they are all antagonistic
to allowing this. If the government is minded to provide support for the
coal industry it will have to be a scheme which enjoys the confidence of
Europe or it will founder, and it ought to, I think, in order to protect
the interests of the British tax payer, it ought to impose strong conditions
on the current coal owners whose performance to date has not impressed
anyone.
WATSON: The Selby constituency
in Yorkshire is dominated by smokestack industries. The local MP wants
short term government support for the local coal mine, and says Europe
should not be used as a get-out.
JOHN GROGAN: I think the real obstacle
to the DTI is Treasury funding, whether the Treasury would approve funding.
because ultimately it's a British government decision and its a convenient
argument , if you like, that all these evil people in Brussels who might
not agree to a coal subsidy, but I think they would, and having gone
over there and spoken to the officials it's not, the problem isn't in
Brussels it's the political argument here in Britain whether we want to
subsidise coal or not.
WATSON: The control room of the
mighty Drax power station recalls the denouement of just about every James
Bond film. And, in the traditions of the genre, there is a countdown to
disaster. In 1998, the government brokered a deal which locked Drax into
buying coal from the nearby Selby superpit. But that deal is now coming
up for renewal. In other words, Drax will have a licence to kill the local
mine.
DAVID MCMILLAN: We have to make a decision by the
end of the month to extend an option with RJB to continue using coal for
another couple of years or not. There are very intense negotiations occurring
right now to try and make that work; we are going to London to see some
people about what we can do to get some government help. If we do not get
that sort of help, at least in the short term, that come the end of the
month, we'll have to tell our people that we're not going to utilise the
option. That -and I think that when that happens that the Selby coal fields
will be in extreme danger of shut down almost right away.
WATSON: Coal arriving at Drax
from nearby Selby costs 15% more than coal which could be bought on the
world market -even with higher transportation costs. The owners of both
Drax and Selby will meet the Energy Minister Helen Liddle later this month
to ask for government help, to keep their current agreement on track. But
it may not arrive on time. The man who sealed the deal two years ago warns
against having image, and not industry, uppermost in ministerial minds.
ROBINSON: Why I got involved was
because I woke up one Sunday morning to read that half the pits were
going to go and I think it was ten thousand redundancies, something like
this, five or ten, I can't remember now, but large numbers of redundancies
and I thought, why are we doing this? And the only concern at the time
was how the thing should be presented, not whether it was the correct policy
or not.
WATSON: With problems in the
coal industry piling up once again, Geoffrey Robinson hopes the landscape
has now changed. He says it's time the government came clean on its long
term energy strategy. If coal has a part to play, then so too should short
term subsidy.
ROBINSON: I do think the country
has to seriously think about, does it want to have a balanced mixed coal,
energy policy or not, or is it quite prepared to face a future which will
be within a couple of decades or so, within a couple of decades where our
own gas reserves are exhausted and we are dependent for imported gas from
dangerous parts of the world. If on the other hand you want a balanced
output, you want alternative fuels which I happen to think is the sensible
commercial policy then you may have to pay some small premium in times
when sterling is particularly high to enable the generators to buy coal
which isn't prohibitively expensive.
WATSON: But others say that it
is those who run the coal industry who should carry the can for the current
crisis - the government itself has little room for manoeuvre.
O'NEILL: We're not in a position
to restrict imports in a globalised liberal market. You can't do that.
You can't restrict imports and you're severely constrained in subsidising
the indigenous mining industry. So really the mining industry has got to
become more efficient and it's a question then of whether good money should
be thrown after bad.
WATSON: The government intends
to take the heat off the coal industry in the Autumn. They say any bias
in the energy market against coal-fired power stations such as Drax will
be ended. But critics say that this does not address the fundamental problem
- the electricity generators may still find it cheaper to use foreign coal
- placing mining communities under pressure.
GROGAN: I think there would be
real anger in the Selby area if the Selby coal field was forced to close
because the new owners of AES decided to import their entire coal requirement
and I don't think the new owners of Drax particularly want to do that neither,
though they are under some financial pressure I think to cut costs
WATSON: So a powerful new coalition
has been forged. Both big business and the traditional Labour left are
uniting to pile on the pressure to get government help to save British
coal. But others say that these 'unlikely bedfellows' represent the dreaded
forces of Conservatism and that Britain's energy policy must make a decisive
break with the past
GREEN: Most people in the
energy world accept in the long term there's a transition to a non fossil
fuel based economy. I think ministers have got a responsibility, the government's
got a responsibility to be clear with voters, to be clear with consumers
about the direction of policy to make it clear there are going to be the
costs of transition. The government is not abandoning those communities,
it is going to invest in new opportunities and new enterprise in those
communities, and that way to give people the confidence to move from where
we are now, the traditional industries of yesterday to the future industries
that will stimulate jobs for the long term for those communities.
WATSON: But this view does
not go down too well in Labour's heartlands. While MPs who represent industrial
workers would be keen to attract new jobs into their constituencies, they
are equally insistent that traditional industries could have a bright future
too.
ROBINSON: If we have another twenty
years of good coal I see no point phasing it out ahead of time with all
the community distress and hardship that would cause, so I think we really
have to move away from old Labour and new Labour and take a view.
O'NEILL: They know that three years
ago the Labour Government responded to the call from the miners to give
them support and the transition into the new contracts. That support was
given by government. The breathing space was given to the coal owners.
The have done nothing with it and I think that the people in mining communities
across the country like my own recognise that unless the coal miners rise
to the challenge it is not the fault of the government or the workers.
WATSON: But others say Labour's
traditional supporters might not be so understanding. They need at least
a glimmer of hope from the government.
GROGAN: New Labour has to give
clear signals to Old Labour if you like, to the more traditional Labour
areas that New Labour cares not just about the new industries but also
about the old industries, so I think it's extremely important that new
Labour doesn't let coal mining die.
WATSON: Labour doesn't want its
long standing supporters to vote with their feet. Subsidising coal won't
be easy. But failure to do so may prove more costly. If our remaining
mining jobs disappear, Labour's support in its heartlands may also begin
to fade
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