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ON THE RECORD
RECORDED FROM TRANSMISSION BBC-1 DATE: 28.3.93
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JONATHAN DIMBLEBY: Good afternoon and welcome to On The
Record. Today, on the eve of a critical debate in the House of Commons, I'll be
asking the President of the Board of Trade to justify his proposals for the
future of British Coal.
If Michael Heseltine had got his way
five months ago, more than half of Britain's coal mines would have been closed.
thirty thousand jobs at least would have gone. But at the last moment he was
stopped in his tracks and forced to think again. The result: a new White Paper
published three days ago. In what will be his first full interview since then,
I'll be trying to find out what his reprieve for twelve of those thirty one
pits really means. Are they saved? Or has he merely deferred an execution?
We'll be reporting from the coalfields
and also reflecting on the key pressures now facing Mr Heseltine as he seeks to
restore public confidence in his handling of a political crisis which did so
much damage both to the Government and to his own reputation.
On the morning after, the newspaper
headlines gave Michael Heseltine's White Paper a broad welcome. But in the
forty-eight hours or so since then a very much more sceptical attitude has
emerged - not least among those most directly affected. Michael Gove
reports.
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DIMBLEBY: Tomorrow the President of the Board of
Trade takes his case to the Commons, and will hope to secure a majority in
favour of his White Paper. It will not be an easy task. After those reports
yesterday about possible closures to come, Winston Churchill has now demanded,
I'll quote him, 'very precise and categorical assurances about the future of
the pits that have been reprieved'. Will he get that guarantee. This morning
near Michael Heseltine's home in Northamptonshire I sought to find out.
Can we first get the background clear.
You believed five months ago that the case for the closure of thirty-one pits
was to use your words "unanswerable". You were driven to offer this present
stay of execution by the political pressure from the British public and the
threat of defeat at the hands of your own backbenchers. Is that correct?
MICHAEL HESELTINE: Well, I think it is important to get the
background clear, and can we just start by saying that the introduction that we
just had to this programme, the politics of it is garbage, it bears no
relationship to actually what happened, but I'm not prepared to reveal the
privacy of Cabinet discussions in a way that I would have to do if the whole
story should come out.
DIMBLEBY: But you would say it was love and
harmony?
HESLETINE: The second thing that I want to make
absolutely clear about, when I see Robin Cook being seriously quoted on a
programme, I remember this is the man who told us the Health Service couldn't
be privatised, he told us that there would be acute problems in the Health
Service, he frightened the nation, actually a million more patients are now
being treated in that Health Service because of the hospital trusts. So let's
just put the background now, I'm quite happy to talk about your questions, but
I'm not prepared to allow that sort of introduction to go unchallenged.
DIMBLEBY: Yes, well, given that you think that
about Robin Cook and given that it was all harmony in the Cabinet as you
discussed amicably these discussions..
HESELTINE: It was extremely harmonious actually.
DIMBLEBY: My question to you as you'll remember,
is - you were driven to shift your ground from the economic commitment that you
had made to closure by political considerations of defeat in the House of
Commons at the hands of your own backbenchers.
HESELTINE: Well, the position is absolutely clear,
I told the truth in October, and the truth is often uncomfortable, and it's
very rarely popular, but it was the truth about the economics of the decision
that I faced. It was a very lonely, very anguished decision and any
alternative would cost hundreds of millions of pounds and of course all those
people who argue for a different decision they'll be the first to say why can't
we have more schools or more roads, or more money for research, or more
training, forgetting that hundreds of millions of pounds now are on offer, in
order to give this opportunity to British Coal.
We have certainly, we have taken into
account the very considerable public reaction and political reaction to what I
said last October.
DIMBLEBY: But you don't budge from the judgement
you then made in economic terms?
HESELTINE: Oh, you can't. I mean there is no way
in which you can find a larger market for coal unless you subsidise coal to an
even bigger extent than we presently do.
DIMBLEBY: And you don't budge from you view then,
that subsidies are highly undesirable, because of your commitment to the market.
HESELTINE Well, subsidies cost taxpayers money.
They cost jobs in other industries, they distort the market place, they prevent
often the cost efficiency that enables British industry to compete, so of
course one is acutely aware of the dangers of subsidies. One of the problems
of British Coal is that for decades people said you can subsidise this
industry, you can protect this industry, and the fact is we didn't succeed in
doing that because we ran down British Coal, but we didn't give it the
opportunity to get the productivity gains that would have enabled it to
actually go into the market place and win, and perhaps therefore forestall the
growth in, for example gas, that took place because people believed there was a
better opportunity.
DIMBLEBY: But given the strength of opinion you
have on that, it is only thanks to a handful of your own backbenchers that
those pits aren't already doomed, all of them.
HESELTINE: Well that would have been the subject of
a consultative process but my colleagues reflected public opinion. I am the
first to recognise that. There was very strong public opinion, as a matter of
fact I think it was involved with a lot of other things. I think there was a
very great unease in the economy, I think we'd just left the Exchange Rate
Mechanism and I think the coal announcement coincided with that and reflected
the sense of public unease, but that's history, that's where we were.
DIMBLEBY: Now, you got public opinion wrong then,
by your own admission. My doubt is whether you got it right this time, and let
me suggest to you why. The headlines after the publication of the White
Paper talked in terms of pits saved, pits reprieved. There's no guarantee of
that at all is there?
HESELTINE: I'm not quite sure whether you or I are
living in the real world. I mean my job depends on a phone call from the Prime
Minister. You could lose your job tomorrow if someone thinks you're not doing
it properly. There were three million people out of work in this country whose
jobs went in the recession and I just do not understand how anyone suggests
that what I have done for British Coal is not a dramatic opportunity for them
to go out and win a market place in the competitive and difficult world that we
face. I've committed hundreds of millions of pounds of your taxpayers' money,
your taxpayers' money, all the people listening to this programme, hundreds of
millions of pounds, to giving British Coal the chance to find a market, and
people say "Well, will you actually sign up in blood". I mean how do you sign
up in blood, when you've given people an opportunity?
DIMBLEBY: That being the case, and I'm not
suggesting to you that you can or you can't, I'm trying to clarify, that being
the case you cannot give any undertaking that all those twelve pits will be
open two years down the road from now.
HESELTINE: I think you haven't again followed what
I've done. Of the twenty-one pits two I am advised should go into the
consultative process because their reserves are very short-term, and that must
be a matter of investigation in the consultative process.
DIMBLEBY: But probably down the tubes.
HESELTINE: Well, that's a matter for British Coal
and the consultative process, but if they haven't got the coal as it's
suggested, it's very difficult to see what alternative could come from that
consultative process but we must allow it to proceed. Secondly one of the
pits, Maltby, we've said has the potential to be a world class pit into the
next century, and in order to get it into that position we're going to withdraw
it from coaling, that's the proposal British Coal will consult about, invest
twenty-nine million pounds in it - it doesn't mean to say - I don't think you'd
do that if you're trying to close it down, twenty-nine million pounds in it in
order to give it the opportunity to be really competitive. We've then got
British Coal proposing to stop the coaling at six pits and to put them onto
care and maintenance. Now why they are putting them onto care and maintenance,
so that if they find the market place, they can re-activate those pits and then
finally you've got the twelve pits which are going on, whilst British Coal take
advantage of the hundreds of millions of pounds that I've been able to persuade
my colleagues in government to make available, to find a market place.
The other side of the coin is the market
place. What have I done? I've announced a range of things that are possible.
First of all we all know we've now seen firm intentions by the generators to
enter into the base contracts and that's very important and a significant step.
Secondly, we have seen from those self-same generators letters saying they're
prepared to negotiate supplemental contracts. Thirdly we've seen a reduction
in the oil emulsion imports, fourthly we've seen a changed environment with the
EDF, fifthly we've seen a reduction in the forecasts for open cast coaling, so
all of these things are about enhancing the coal market into the bigger market
potential we're enabling British Coal to go, and then on top of all that we're
saying that the private sector will get a chance of any pit faced with closure,
and I saw, I was very excited, on was it, yes, Friday night, I saw people
coming out of their meetings with Tim Egger, (phon) saying that they were
prepared to make serious discussions with British Coal about various of the
pits facing closure. So this is a big opportunity.
DIMBLEBY: Right. You're sounding extremely
upbeat, a big opportunity, I come back to this single point in respect of those
twelve pits. You believe they've got a big opportunity, but you cannot, that's
what you're saying, it's a perfectly fair thing to say, you cannot offer a
categorical assurance that they're going to be open in two years' time, because
despite the market advantages that may be found by British Coal, it might not
be enough to keep all of them open. (INTERRUPTION) Is that true or not?
Is it true?
HESELTINE: No, this is the classic British
journalist's trick. You produce a package, you put hundreds of millions of
pounds behind it, you have a whole range of new opportunities, and before you
know where you are, Fleet Street has majored in on one hypothetical doom-laden
scenario and tried to write it into the objective, when nobody else in this
economy has got those sort of guarantees.
DIMBLEBY: But the problem is that the British
public believe politicians have tricks as well, not only journalists, and you
may not think you are up to any tricks, but they might think you are, that's
why you ask the questions. Now given that ....
HESLETINE: I'm up to three-hundred, four-hundred,
who knows how many hundreds of millions of pounds-worth of subsidy for British
Coal in order to find them an opportunity.
DIMBLEBY: Three-hundred, four-hundred millions,
three-hundred-four-hundred million is a guarantee of available subsidy if
necessary?
HESELTINE: No, no, no, I'm talking about hundreds
of millions of pounds. I illustrate it, no-one knows exactly what the figure's
are.
DIMBLEBY: I could be three or four hundred?
HESELTINE: I've said hundreds, it can't be less
than three, because it wouldn't be hundreds if it was, but I mean it could be
more, so it's a matter of what the figures will be.
DIMBLEBY: Now, the reason why I put the question
to you, is not just out of a vague curiosity. It's because Winston Churchill
who leads the group that nearly threw you out last time on this issue, is
saying now that he's rather disturbed having heard that British Coal is talking
about the possiblity of more closures this very morning, he's reported as
saying he wants categorical assurances from you that these pits stay open.
You're saying "I can offer good opportunity, but I can't give you categorical
assurance because it wouldn't be right to do so".
HESELTINE: But, I said in the House of Commons very
clearly on Thursday precisely what the situation was. There are no such things
called guarantees in these sort of circumstances, and so to that extent
someone could always go and say "Well look, this is not actually set in
concrete, this is not a legal contract", and how can it be if you haven't
negotiated the additional contracts, but I believe that any fair-minded person
will see that with the backing of these hundreds of millions of pounds British
Coal has got a very exciting opportunity, and who was the first person to say
it, the Chairman of the Coal Board.
DIMBLEBY: But some of what we have now, given the
uncertainty of the market, given as your White Paper points out very
unambiguously that it's overall a contracting market, some of the stay of
execution, the deferred execution that you have offered in the White Paper,
will be, in the words of the White Paper, "to enable British Coal to phase in
the inevitable closures needed".
HESELTINE: Yes, but you see, I think you've put the
contracting market in a false context. What we're talking about today is the
possibility of increasing a market opportunity for British Coal over and above
the base contracts. Last October we were assuming that without subsidy they
couldn't get more than the forty million tonnes in the first year starting
next April the First, and then thirty million in each of the next four years.
That was the basis of the judgement we made. Now it's perfectly true the
market for coal has been contracting, but above those base contracts there's a
very considerable set of opportunies and I have - it refers to many of them. I
haven't mentioned to import substitution which is another one of them, so how
much of that can British Coal get, that's the issue. The market is there we
know that because I set up consultants to examine it, they pointed to it, we
know it because the Select Committee examined it, they came to suggestions
where there might be a market. British Coal knows where there may be, and the
generators themselves already recognise this.
DIMBLEBY: Given that, when the White Paper talks
about enabling British Coal to phase in the inevitable closures that are needed
you must be referring to something that despite that potential market British
Coal cannot keep all those pits open indefinitely.
HESELTINE: That's why, they're already consulting
about ten pits for closure. I don't know the outcome of those consultations,
but they're already consulting about it and the review didn't cover those ten
pits.
DIMBLEBY: But you weren't referring to those in
the White Paper.
HESELTINE: I know, but we know ....
DIMBLEBY: You were referring to these other pits
that you are dealing with ...
HESELTINE: We're talking about a whole range of
different pits in different categories. I've just mentioned to you the ten
which are outside the review. We then have two, which as I've said are facing
exhaustion.
DIMBLEBY: Yes, we have been through that.
HESELTINE: But these are closures, I mean these are
closure procedures. We then have six which are not continuing to coal, so
those are a whole range of options which everybody fully understands. What
we're talking about however, specifically, is whether British Coal can find
those markets which will enable the pits that have been the subject of the
review of the twenty-one, and which at the moment are continuing to coal, to
find their place in tomorrow's market and it they can't whether the private
sector can find it for them.
DIMBLEBY: You said in the list that you gave me of
the possibilities ahead that you had - I think I heard you say - that you had
a, letters from the generators indicating that they would do deals for coal over
and above the forty million to which they've already said they will definitely
do a deal. Is that what you said?
HESELTINE: I said, certainly, that I have letters
which indicate that they're prepared to negotiate for supplemental contracts.
That's been the point. Indeed, frankly, if the background to this is important
- and I mean it is to me and I am sure it is to many people listening to this
programme - we have been discussing these supplemental contracts for some time
and I had to make a judgement just, oh, I suppose, about two weeks' ago - did I
go on negotiating for the base contracts and the supplementary contracts, both
together, with the risk that I would get neither because of the complexity of
these negotiations - they're very, very complex - or did I say well, look, go
for the base contracts which actually establishes a certainty in respect of a
very significant part British Coal's future demand and we'll deal with the
supplementary contracts at a slightly slower pace because I could then see that
at that time I could keep open a significant number of pits whilst we were
still negotiating the supplementary contracts. Now that is the position.And
the generators themselves are prepared to talk about supplementary contracts.
DIMBLEBY: I presume they wouldn't shut the door.
Are they saying - are they giving you reason to believe that the twelve pits
which produce what, twelve point eight million tonnes of coal, will be able to
sell that if you can come to a deal to them?
HESELTINE: Well the generators are obviously going
to take their own point of view. They can negotiate extremely toughly.
Anybody would in those circumstances. I've got no powers over them. And so
it's now up to British Coal to conduct those negotiations and it will, of
course, be in the end a matter of the size of the market that exists. One of
the things about the review that I think is important is that we have widened
the potential market for British Coal in the ways that I listed, but then
there's also import substitution. Now it's a matter for British Coal to get
out there and negotiate.
DIMBLEBY: But are you confident that when you
chose, or agreed, that those twelve pits should be spared execution, that they
will be able to sell their coal in these deals that you are saying that you've
got indications might take place?
HESELTINE: Well, you've got a whole range of
options, as I've made clear. You've got the supplemental contracts the
generators might enter into, you've got the private sector opportunities if
that doesn't come off, you've got the larger market, and one of the problems...
DIMBLEBY: You talk about a larger market, but the
generators are the overwhelming market for British Coal. It's tiny amounts and
the margins are less.
HESELTINE: No, no, no. Let me help you with
another aspect of this difficulty. That if you're looking for the size of the
market and you are a major purchaser, you will not want to commit yourself
beyond what you might call "rock certainty". Why should you, if you've got
large stocks, and there's a spot market for coal - you could import the coal -
and so you act as a customer naturally acts. But as you get closer to the
point at which you can see the certainty of the market, then you buy the coal
you need for it.
One of the discussions that I've had
with the generators - there's bound to be a conflict of interest between us - I
say to them, or British Coal says to them (depends who's doing the
negotiating): "Look, we know you're going to need this coal", and they say,
"Yes, we probably are. We can't absolutely guarantee it today and we will
almost certainly will buy it then, but we can't contract for it today, that far
ahead, because we can't be absolutely sure what's going to happen". So, fine.
Then British Coal, in those circumstances knows that it's got the backing of
the subsidy that I've announced and it's in a position to produce the coal that
British Coal believes, in the circumstances, will be taken up in these
supplemental contracts closer to the date.
Now that's the sort of natural
negotiating position - but what it doesn't do is enable you to pin down
precisely a year - two years, three years in advance, whatever it may be -
exactly how much tonnage will go.
DIMBLEBY: Does that mean that if British Coal
can't get a deal for the coal from these twelve pits over the next three
months, six months, nine months, twelve months, they could still go on
producing the coal...break in tape...
HESELTINE: Oh yes, they could. They could stock
it, waiting for the market. They could stock it because they know the market
is actually going to come, but they haven't actually signed up for it because
the generators - for whatever reason - are holding back. I'll give you another
reason why the generators might want to hold back, and they might simply say
"Well, our judgement is that the world price of coal will be rather lower in
"X" years or months or whatever it may be, so we won't actually sign specific
contracts". British Coal, therefore, has to take a judgement as to what level
of subsidy will be necessary. British Coal might take exactly the opposite
view. They may say to generators - "Your view about the world market price of
coal is too harsh - we think it's going to be higher, so we will sell you spot
coal closer to the time without contracting in advance".
DIMBLEBY: But this runs the very real prospect of
huge stockpiles of coal and I remember you saying to me just before you had to
reverse your decision five months' ago, when I put to you that you could
stockpile coal and you said - "No, we can't stockpile coal; what am I to do?
Twenty-five million tonnes; it's going to cost dramatic sums of money. We
haven't got a market for that". That's what you told me.
DIMBLEBY: I understand - that's exactly the
dilemma that we were facing when there was no offer of subsidised British Coal,
but the difficulty that one of the... another point of the complexities of this
situation is the generators have got very large stocks of coal - something of
the order of thirty-three million tonnes - which they want to run down.
Because if, of course, as far as they're concerned it's just cash tied up in
coal stocks. The rate at which they do that is very material to the future
demand for British Coal and it's perfectly up for British Coal in the new
circumstances to decide that they will increase their stocks because they see a
market for that coal. But these are judgements that people have to make in a
commercial sense.
DIMBLEBY: Next year, what the Coal Board has to do
if they are to keep these pits open - producing their twelve point eight
million tonnes - is to find additional markets for twenty-two million tonnes,
because they're also having their guarantee from the generators cut, from forty
million tonnes next year to thirty million tonnes.
Now, that twenty-three million tonnes is
a seventy per cent increase on what they are guaranteed next year from the
generators. Are you seriously saying that you expect them to achieve that and,
therefore, the pits stay open?
HESELTINE: Well, what I'm saying is that I am
providing the opportunity. The opportunity is one of very considerable
potential subsidy. It is one that guarantees that if any pit faces closure,
the private sector can have an opportunity to exploit its opportunities and to
sell that coal wherever the market may be. And, I'm being even going further
than that. I've actually said that if the private sector can come along and
show additional new markets, then we will consider providing a subsidy for
that.
And, what, you, I think, are not taking
into account is that, whilst you talk about all these new markets and how the
difficulty they are to find - and isn't it incredible is the full thrust of
your question - the Select Committee. They indicated that these markets
existed and so what I've done is to say: look, there are reasonable grounds for
saying that these markets could be found at world market prices and, I have,
therefore, taken the central recommendation of the Select Committee, put these
hundreds of millions of pounds behind British Coal and the market is now for
British Coal to find.
DIMBLEBY: You see, why I put this to you, again,
is that in your White Paper, which we're supposed to believe is the principle
on which you are operating, you say - I'm quoting - "the demand for coal in
this market (that's the generator's market) is set to decline significantly.
There is no likelihood of significant growth of demand in other markets. And,
in addition, we have the Coal Board saying yesterday - which is what's caused
Churchill and others concern this morning - which is why you are, as it were,
back in the fire again, he's saying...
HESELTINE: Just a moment, I'm not, I'm not at back
of the fire.
DIMBLEBY: We face a very difficult-
HESELTINE: You arranged this programme, some time
ago. I'm here because I, politely kept my appointment...
DIMBLEBY: It's terribly nice of you.
HESELTINE: It's nothing to do with Winston
Churchill, who's done a marvellous job, in my view.
DIMBLEBY: I'm not suggesting..
HESELTINE: The idea I'm in trouble. I've been
dragged here, kicking and screaming. I'm delighted to come and talk to you.
DIMBLEBY: And, there's one thing I'm very happy to
say to you - you were never dragged anywhere kicking and screaming. You always
stick to your appointments and it's jolly nice of you to do so.
HESELTINE: Well, let's not pretend that I've
somehow been sort of carted into it..
DIMBLEBY: No. No. No, no, no. This is a long
standing thing. What I'm saying is that, politically, on Thursday you looked
in a good position. Now, with people like Churchill saying: I'm worried,
you're not in quite such a good position. And he's saying it because you have
someone from the Coal Board yesterday - their spokesman - saying, and I quote
again: "We face a very difficult situation. We may have to close down more
capacity."
HESELTINE: Yes. No, no, that wasn't the way it was
done, at all. I mean, what actually happened is that someone was theorising
about a whole range of possibilities and, at one end of the spectrum, as I
understand it, remarks of that sort were included in what somebody said. The
fact of the matter is, everything else was left out of all the reporting. And
Winston Churchill, who's played a valiant role in explaining the concerns of
the miners, obviously, wants to know answers to the questions. Many of the
answers I've already given you, as I've already given him.
DIMBLEBY: OK. You say: I'm offering opportunities
which weren't there before. You agree that they have to find twenty-two
million tonnes of coal next year if they're not going to have to cut output.
Your White Paper says - I put it to you, again: - "The market is going to
decline significantly. There is no likelihood of significant growth in other
markets. How do you square the circle?
HESELTINE: Jonathan, well, we missed - you've
missed the link to the question which you asked, which was very much that
question, about ten minutes ago. And, basically, the answer is, as I gave then
- that there is a base contract, which we've put in place now. It looks as
though they're going to better it.
DIMBLEBY: Which falls by ten million next year.
HESELTINE: Yes, yes. But you're talking about the
overall market falling as though that is the overall market. That is not the
overall market. The market is significantly above that. The problem, which
we've all faced, is to persuade people to sign up contracts in that area where
doubts can, obviously, exist simply because you're trying to forecast
accurately the precise size of a market. But, the precise size of the market
is up somewhere around here, whereas the base contracts are there and the
problems have been about getting people to sign in the middle.
And, what we're now doing is saying -
take one major part of that middle area - imports. We're now saying: Look,
instead of importing, we will give British Coal the cash in order to subsidise
its production costs down to what they would import at. Now that is a market
over and above the base contracts. That's the sort of area they can go for.
DIMBLEBY: Well, you could - as, indeed, you refer
to the Select Committee - as the Select Committee suggested, you could have
prepared to guarantee more coal sales from British Coal if you'd been prepared
to insist that the generators should buy British Coal rather than subsidised
foreign coal, or unsubsidised foreign coal.
HESELTINE: Oh, yes, but then you've got to fix the
prices, and it is very important that the price that is available to British
industry is genuinely a competitive price and the best way to do that is to
negotiate.
DIMBLEBY: But, you're fixing the prices with the
subsidy, aren't you?
HESELTINE: No, no. You're negotiating. You're not
fixing. I mean, what you've now suggested is that I take legislation through
Parliament in order to fix the terms of a contract. Now if you think
Parliament would do that with private sector companies, it's an interesting
idea but I doubt if they would. The sort of complexities of it, the
interference of it would seem to me extremely unattractive and I don't believe
my colleagues want to see that.
But the other thing, of course, that you
haven't touched on is the industries that are also supplying this market
place. And, one of the things that I've been particularly aware of is the
representations from the Trade Unions, from employers, from the consumers,
people who get electricity from the nuclear industry, from the gas industry.
Don't cut back there because there are jobs at stake there. I mean, if you
remember, on Thursday, I announced the go-ahead for Connis (phon) Quay - five
thousand jobs in construction in building a new gas-fired station in north
Wales, and people have got to realise that we're not just talking about saving
jobs in the pits. So often, it can be saving jobs in the pits at the expense
of jobs in other industries.
DIMBLEBY: But had you legislated? Had you, for
instance-
HESELTINE: Yeah, but.. you can't.. Do you think
Parliament would have agreed to put through legislation saying: you British
companies, private sector companies, will take this much coal, at this price,
regardless of your ability to use it? Would you think they'd have agreed to
do that?
DIMBLEBY: Well, it's certainly true that your own
backbenchers, from time to time, don't agree and don't let the Government do
what it wants. But I'm not suggesting that's what the public..
HESELTINE: Yes, but that's not..that doesn't
answer your question.
DIMBLEBY: -that's what's the problem. I'm
answering. Luckily, I didn't have to answer them.
HESELTINE: Well, you're very lucky, indeed! I do
have to answer them!
DIMBLEBY: My question back to you is what the
Select Committee wanted it and you said that the rebels in the Party were
reflecting public opinion.
HESELTINE: I do not believe. I do not believe that
my colleagues- Jonathan, I- Jonathan,
DIMBLEBY: They don't. The public opinion does not
surely, Mr Heseltine, want foreign coal rather than British coal when it's the
coal users that go down the tubes of Corbally (phon).
HESELTINE: There is a reference in the Select
Committee Report to requiring the generators. I accept the use of that word.
I will be very surprised if my Conservative colleagues on the Select Committee
say that by that they meant legislating in order to prescribe a contract fixed
in quantity, fixed in price, for coal which the generators say they don't need.
Now, that would be the extreme case and I don't believe the Conservative Party
would want that.
DIMBLEBY: You said, earlier in this interview,
that you accepted that the rebels in the Party, who threatened to overturn the
policy, reflected public opinion. You will not need reminding how strong
public opinion was, the lights being turned out in support, the marches in the
south, as well as in the north, the passionate feeling that there was. You
said to that public opinion: I'm not prepared to rig the market more than the
subsidies. You've said: I'm not prepared, for instance, to slow down the dash
for gas in order to preserve the jobs and communities in the coal industry
that are there now.
HESELTINE: Do you want me to force more expensive
electricity onto you - everyone watching this programme? Do you want me to
make British industry less competitive by making its prices higher? Do you
want me to choke off the excellance of North Sea oil and gas? Do you want me
to deny people the cheapest electricity that's on offer, which is from the
nuclear plants? Do you want me to do all that? Of course, you don't. The
difficulty about public opinion and I've got no complaints about this, is that
faced with the anguish of last October, which no one shared more than I, there
was a reaction but I think that people have come to realise that the background
to that decision was a great deal more complicated than people realised. They
realise now that if you save pits by subsidising them in the- jobs, by saving
'em in the pits, you are probably making a choice about losing somebody's elses
job somewhere else in another industry. So, it's a balance and, I think, the
Government has gone a very long way in order to recognise public opinion and it
is at the expense of hundreds of millions of pounds.
DIMBLEBY: Put another way, you could have
guaranteed those pits staying open, those communities staying alive. You could
have guaranteed it but the price would have been other people suffering, in
your judgement and increased prices and, so, you say back to that public
opinion which says to you: you should have done more: yes, I could have done
more but the price of it would have been more expensive electricity.
HESELTINE: No, I say something rather different. I
said that an all Party Select Committee looked at this issue, just at the same
time that I was doing it. They didn't ask for any guarantees, they didn't tell
me that I should guarantee that every pit should exist in such a form, for such
a time. They didn't do that because they realised Labour and Conservative and
Liberal Members of Parliament - they all realise - the complexity of this.
What they said to me: give these people a chance, give them subsidy. Let them
fight for that opportunity against the market. That's what I've done.
DIMBLEBY: How long does the subsidy last?
HESELTINE: That's what I've done.
DIMBLEBY: How long does the subsidy last?
HESELTINE: Well, it goes up to privatisation as a
potential on offer to British Coal and after that-
DIMBLEBY: Two-two years away?
HESELTINE: -after that. Yeah, I think so. But
after that, after that, the private sector gets the chance to make a success of
this. And, of course, they will offer to buy those pits at a price which
reflects what they can sell the coal for.
DIMBLEBY: One final question to you, prefaced by
this. Last time we talked, I suggested to you that you should have a
moratorium, that you shouldn't press on. You said: I've got to press on. You,
then, turned around because of the force of Parliamentary opinion. Would it
not be wise now to defer the vote tomorrow on this issue, to give public
opinion more time to assess what you've said, for instance elaborately and
interestingly in this interview, rather than rushing it through on the back of
a White Paper before anyone's had real time to make any judgement?
HESELTINE: Well, Jonathan, I think, that people
understand the arguments extremely well. My colleagues in the House of Commons
know them fully and the truth is that there are a whole range of experts, whose
views often- based upon their own judgements about the energy industry-they
won't change their mind - they understand these things. But what you are, in
effect, asking for is more uncertainty, more delay, more cost. And, whilst you
are very well entitled to say that public opinion watching this programme
should be given a chance to digest its contents, if you or I actually thought
that the whole of the British political world was watching this programme,
you'd be more successful than it is.
DIMBLEBY: I- may well be true. But you are
prepared to accept the risk that people will say to you: what he's done is -
Michael - he's done a quick political fix and he's done it to reprieve himself.
HESELTINE: I mean, the Cabinet is a fairly sort of
tough environment in which to make decisions. I don't think my colleagues
looking at the facts and figures said: well, what we've got to do is fix this
for Michael. I don't think that's what they were doing. They were trying to
respond to public opinion, they were trying to give the Coal Board a chance
and, I think, that people - fairminded people - will think we've gone as far as
we properly should.
DIMBLEBY: President of the Board of Trade, thank
you.
HESELTINE: Thank you.
DIMBLEBY: Michael Heseltine, in fighting form,
talking to me a couple of hours' ago.
...oooOooo...
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