Interview with Keith Hampson, Raymond Robertson and John Marshall




       
       
       
  
   
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                                ON THE RECORD
                                                  
RECORDED FROM TRANSMISSION BBC-1                                   DATE 31.1.93 
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JONATHAN DIMBLEBY:                     Good afternoon and welcome to On The 
Record. Today - the climb down over coal; the budget; and the dole queues. 
 
                                       On Thursday Michael Heseltine and his 
colleagues will wrestle again over how many pits should be saved and at what 
cost. As the government prepares to make a spectacular U-turn, the conflicting 
views of three Tory backbenchers suggest that the Cabinet has no easy way of 
escape. 
 
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                                       We start with coal.  The Government is 
now committed to a U-turn, forced on it not by any market imperative but by the 
will of the electorate, forcibly expressed in Parliament, not only by the 
Opposition, by a host of Tory backbenchers as well.  Had Michael Heseltine 
pressed ahead with his original plan to close thirty-one pits, the Government 
would certainly have been faced with a humiliating defeat at the hands of its 
own supporters. 
 
                                       Last week the Select Committee came up 
with a way of escape for a beleaguered Cabinet, but will it work, or does the 
solution to one problem simply cereate another in its place.  
 
                                       With me now, three Conservative 
back-benchers:  Keith Hampson, a member of the Select Committee and, 
incidentally, one of those who helped run Michael Heseltine's campaign for the 
leadership against Margaret Thatcher;  Raymond Robertson, whose Aberdeen 
constituency contains a good many voters who work in the oil and gas industries 
and John Marshall, a member of the No-turning Back group and a convinced 
advocate of market forces.    
 
                                        Keith Hampson first.  With the 
subsidies that you propose to put into the coal industry, with seventy-eight 
thousand or more jobs originally at risk, how much of that gap do you expect to 
close.   How many jobs will be saved if the Government adopts your scheme? 
 
KEITH HAMPSON MP:                      Well, the report specifically doesn't 
get into the numbers of pits, which pits, or overall the jobs.  We started from 
a different angle which is, can you increase the market for coal, then it's up 
to British Coal the operators to decide how you can best do that, because 
British Coal has always had a favoured position.  When electricity was 
privatised the companies were required to have huge volumes of coal which they 
had to buy at very large prices and that's why now that the contracts are over, 
they don't want to proceed with those volumes.  So we've got to in a sense, 
re-rig the market a bit. 
 
DIMBLEBY:                              Yes, but given that you were driven by 
the political imperative of jobs and communities - that's why people were up in 
arms - you must have come up with some notion of how many pits are likely - say 
people talk about fifteen to twenty pits -  how many jobs roughly, what 
ball-park figure have you got in your mind? 
 
HAMPSON:                               We didn't go into that.  I honestly 
with ...... 
 
DIMBLEBY:                              You ignored it altogether? 
 
HAMPSON:                               We have here great depth.  How many jobs 
overall, not just in the pit industry, but in the equipment manufacturers, in 
the gas industry, the nuclear industry.  The employment consequences are 
heavily and thoroughly examined, but we do not say what our recommendations 
would have in consequence on those jobs. 
 
DIMBLEBY:                              Would it be fair though, Mr Hampson, to 
say that we are talking about if your proposals were taken up, saving some tens 
of thousands of jobs, don't be specific, but we're talking about saving tens of 
thousands? 
 
HAMPSON:                               I think at the lowest end, if these 
proposals are adopted, you could save about thirteen pits, possibly in my view 
about seventeen.   I think it's really raising expectations too far when people 
say twenty-odd, because what that means is simply you're rippingout the coal in 
the short term for about the next year or so before you actually close the pits.
DIMBLEBY:                              Okay.  So we're talking about tens of 
thousands of jobs, maybe thirteen to seventeen pits.  Raymond Robertson, 
amongst your constituents, oil workers and indeed many gas workers.  What do 
make of the proposals?                                      
 
RAYMOND ROBERTSON:                     Well, I'm concerned that the Select 
Committee is asking the Government to fundamentally change the balance between 
coal and gas in favour of coal.   Why was it right for those members who have 
mining constituencies to say to their people, "Do not.. it's wrong for us to go 
back and say to you, prepare for unemployment, yet it's right for me and other 
colleagues in Teesside and East Anglia to say to our constituents, it's 
perfectly alright for me to go back and say to them, prepare for unemployment". 
Well, I'm not prepared to do that. 
 
DIMBLEBY:                              And that's what you think you're facing 
if they pick up - if Heseltine picks up these proposals? 
 
ROBERTSON:                             It's not just me that saying that.  The 
United Kingdom Off-shore Operators' Association has estimated that over a five 
to seven year period fifty-five thousand jobs in the Northern gas sector would 
be at threat, and .. 
 
DIMBLEBY:                              And do you buy that figure? 
 
ROBERTSON:                             Oh that's backed up - it's not my 
figure, that is backed up by other consultants like County Nat-West with 
MacKenzie who have said something in the region of thirty to forty-thousand 
jobs.    
 
DIMBLEBY:                              Keith Hampson. 
 
HAMPSON:                               Well, it's not the case, if you accept 
these recommendations.   It could have been, but I - the interesting thing is 
that all the Labour members signed up to this report and in this report we say 
you do not go back on the dash for gas.  There will be at least twelve 
stations, that's about eighty - eight thousand milliwatts of electricity 
generated by gas, that's about getting on to twenty odd per cent of the market. 
We reckon you could actually, probably have another two stations.  We do not 
say that there should be no more stations.  What we do say is, that there are 
twelve consents sitting in the Government at the moment, another twelve, which 
almost all the evidence was that the economics of the market will not now 
require, people will not want to go on with them, but we do say, they could go 
on if you, as the Government, take real care as to how and why you need those 
stations. 
 
DIMBLEBY:                              Reassured not! 
 
ROBERTSON:                             No, the economics of the market 
obviously will take coal if coal is being subsidised.  The gas industry is not 
being subsidised, we have more gas than we have coal, it's cleaner and it more 
environmentally friendly than coal. 
 
HARRIS:                                But the Labour Party members would have 
liked to have said, close down what is going to happen.  Stop these gas 
stations coming on stream.  They signed up to the logic, which is there is a 
big industry there, it is successful and we're saying that gas will take 
twenty-four per cent of the energy generation market. 
 
ROBERTSON:                             So I have to be thankful we're not 
closing it down, when we're merely turning it back.  Well, I'm not thankful 
about that, and that's unacceptable. 
 
DIMBLEBY:                              When you say it's unacceptable are you 
also saying there is no way, if the Government comes up with something of the 
kind that Keith Hampson and his colleagues are proposing, you won't be able to 
go in the lobbies and say Aye? 
 
ROBERTSON:                             I'm not saying that, because they were 
too far down that road.  What we've now to got to do is to impress upon 
Government colleagues who represent the gas industry like myself (INTERRUPTION) 
... have now got to press upon the Government that we find that aspect of this 
report unacceptable. 
 
DIMBLEBY:                              How many of you roughly are there, d'you 
reckon?                              
 
ROBERTSON:                             Well, in the North-East of Scotland 
there are a clutch of members, Teeside and East Anglia.  I mean we failed to 
put the case for gas because coal is emotive, coal is sexy and really the 
Government and I'm afraid the DTI has like  (INTERRRUPTION) has allowed itself 
to be conned by the coal lobby.                          
 
DIMBLEBY:                              Now let me bring in you John Marshall -
no turning back group; thorough believer in the free market, representing, as 
it were, a group of MPs who may not be specificlaly involved as Mr. Robertson 
is, but have a broad overall view.  How do you respond to what the Select 
Committee's come up with? 
 
MARSHALL:                              I think first of all, what the Select 
Committee has shown is that when Michael Heseltine put forward his proposals he 
did so because the alternative wasn't easy.  The alternative would cost jobs 
elsewhere and we've actually seen a very interesting discussion between our two 
colleagues.. 
 
HAMPSON:                               Not in gas though - not in gas. 
 
MARSHALL:                              They will cost some jobs in gas - of 
course they will.  What we've seen is a very interesting discussion which is 
when you re-rig the market, to use Keith's words, then you cost jobs elsewhere, 
and you always cost jobs in the more successful industries in order to help the 
less successful, and this is what's going to happen as a result of this report. 
 
                                       What concerns me first of all is that 
we're going to see more money being spent over the next few years than would 
have happened under the Heseltine proposals.  At a time when the Government 
should be cutting back public expenditure - the net effect of this will be 
increased public expenditure - and I also feel that any system of subsidy never 
has the beneficial consequences that people imagine. 
 
                                       We are told, for example, that one of 
the consequences - one of the necessary conditions of this - is that working 
practices in the pits should be improved and costs should be reduced.  I think 
one has to look back at the history of British shipbuilders, British Leyland 
and other industries which have received huge subsidies, always on the promise 
that this is the last time.  Don't worry - in future working practices will be 
better.  It hasn't happened in the past, I doubt if it will happen now. 
DIMBLEBY:                              Mr. Marshall, are you saying this is 
basically back to "lame duck" strategy if we're not careful? 
 
MARSHALL:                              Well, I think there must be that risk 
involved.  I'm sure Mr. Scargill is sitting perhaps watching this programme, 
but I can't  believe that Mr. Scargill is thinking of ways of cutting costs in 
the Coal Industry.  
 
DIMBLEBY:                              Let me ask you Mr. Hampson, to deal with 
this point about the borrowing.  The charge is that this is going to cost the 
Exchequer - the cost of borrowing far more when already it is ballooning almost 
out of control. 
 
HAMPSON:                               Well, first, productivity in British 
Coal has gone up by over two hundred per cent in the last seven years.  We 
reckon - and every expert we've had come to us said - that they could go on 
improving productivity over the next five years.  That would enable them to get 
their prices down to the level of imported coal prices.  
 
                                       That is sensible, because fifty-five per 
cent of all accessible coal reserves in this country - this country only has 
twenty-five years of coal available to it from present pits - fifty-five per 
cent of that coal is in these thirty-one pits.  It's lunatic... in the national 
interest it must be right to try and get that out. 
DIMBLEBY:                              Be good enough to deal with the question 
Marshall raises....... 
HAMPSON:                               But that is the reason why you should, 
in the short term, give them a breathing space to get their costs down so that 
those energy reserves can be got at.  Now in terms of the PSBR, we're proposing 
subsidies of about a hundred-and-eighty million this first year, tapering off 
over five years to a total of about five hundred.  The cost to the PSBR of the 
redundancy package, the re-training measures and everything else, is over one 
point three billion this first year.  The Treasury, therefore, saves on this 
sort of subsidy as against what otherwise the closure programme would cost. 
 
DIMBLEBY:                              Money saved, Mr. Marshall. 
 
MARSHALL:                              Well, that just will not be true.  As 
Keith full well knows a number of pits are going to be closed this year - they 
will have the full cost that they would have had under the Heseltine package. 
What he also knows is that the pits we're talking about will probably be closed 
at the end of the subsidy period, so that, in fact, there will be their 
redundancy costs there as well.  
 
                                        What we also - what I suspect and what 
the press suspects is that the subsidy will be much higher than he indicates 
and,  finally, this report isn't about productivity and keeping costs down as 
much as possible, because you know full well Keith that the cheapest form of 
producing coal is by open-cast mining.  Yet your report recommends that 
open-cast mining should basically be ended. 
 
HAMPSON:                               No we don't sir.. 
 
MARSHALL:                              Oh yes you do.  Oh yes you do. 
 
HAMPSON:                               I wish people would read the report. We 
say that open-cast is declining anyway in the next five years and it would go 
down to ten million tonnes - well, it would go to twelve - we're saying it 
should go down to about ten, a small decrease.  However, the levy which is 
already paid to the nuclear industry we reckon is being overpaid to the nuclear 
industry and we're proposing that this subsidy for coal should be sliced off 
that.  So there's no actual cost to the PSBR in the subsidies at all. 
 
DIMBLEBY:                              It's cost free, you're saying? 
 
HAMPSON:                               It's cost free to the Treasury.  It is 
coming off the electricity consumers who are already paying it, already paying 
it for nuclear.  We're suggesting some of it should go from  nuclear into 
helping coal. 
 
DIMBLEBY:                              If the cost of coal is reduced 
internationally over the timespan of these subsidies, is your subsidy 
open-ended during that period to ensure competitiveness? 
 
HAMPSON:                               It is specifically tailored to the 
condition that British Coal lower their costs over a five-year period as 
they've said they could do.  It tapers off from the first year of a-hundred-and 
eight right down to the odd twenty million at the end of the five-year period - 
a total of around five hundred million, provided they reach the productivity 
levels. 
 
MARSHALL:                              That's the same story we've heard with 
every subsidy in the past. 
 
HAMPSON:                               We believe it's worth giving them a 
chance because fifty-five per cent of this nation's coal reserves are locked 
into those pits which you otherwise wouldn't get unless you pursue this policy. 
 
DIMBLEBY:                              Let me ask you Mr. Robertson and Mr. 
Marshall - if the Government listens to you on this and ignores what the Select 
Committee are saying altogether, there clearly is (because of the number of 
coal concerned Tories) serious risk that the Government would lose the vote.  
Do you feel so strongly about that that you are prepared in principle to 
challenge that and face that prospect? 
 
ROBERTSON:                            I honestly think that those of us who 
represent constituencies which have a gas interest didn't speak out loudly 
enough in October when all this was heppening.  As I said earlier, I'm 
frightened and I'm fearful that the Government and then the Select Committee 
really did allow themselves to be conned by the coal lobby, and that can't be 
allowed to happen again.                                                  
 
DIMBLEBY:                              Mr. Marshall next.  Mr. Marshall - on 
the substantial point, are you prepared to say "No" or in the end do you bend 
because you want to stay on that nice warm Government bench? - or back-bench 
behind the Government? 
 
MARSHALL:                              I didn't know that back-benches behind 
the Government were particularly warm, particularly nice, or particularly cosy. 
We're in the situation where the Government is seeking to make up its mind,  
it's right that all of us should be part of that policy creation process, and 
until the final policy is determined it's not for any of us to say whether we 
will support it or not.                                          
 
DIMBLEBY:                              Let me ask - it is, however, I suspect 
for Mr. Hampson to say,  and I'm sure he's happy to say it - if the Government 
falls far short of your recommendations,  will it face the prospect of upheaval 
as it clearly faced before it decided to change course? 
 
HAMPSON:                               Yes.  Can I just say that we weren't 
conned.  In here there's a whole section with at least oil companies in the 
industry citing the facts and figures, and we did on balance decide - can I 
just correct this though because we decided that the arguments of Robin Cook 
and others, that this whole crisis was to be blamed on gas was not the case.  
Labour members signed up to that.  There's going to be a huge gas industry 
supplying a quarter of our energy generation in five years' time. 
 
DIMBLEBY:                              Right.  Now answer my question if you'd 
be so kind,  briefly.  Have we got to get pretty close to what you're saying to 
be confident of getting it through? 
 
HAMPSON:                               If Arthur Scargill and the Unions can 
bring about these productivity changes, then there's a real future of getting 
prices down to import levels and British Coal will have a future but, if we 
don't,  we'll face this crisis again and the Government will have to consider 
closing pits again. 
 
DIMBLEBY:                              Mr. Hampson, do I take it that you don't 
wish to answer my question,  because if you don't do it right now you're not 
going to have a chance to.  Yes or No? 
 
HAMPSON:                               I think the Government will have to 
close pits later on unless we can get productivity down and the cost of British 
coal down. 
 
DIMBLEBY:                              Still doesn't answer my question 
unless..   We'll see what happens.   Thank you all three for demonstrating it 
is indeed going to be more fraught than some may so far have assumed. 
 


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