DOCUMENT IS THE P R O P E R T Y O F H E R B R I T A N N I C M A J E S T Y ' S G O V E R N M E N T
C P ( 7 2 ) 144
C O P Y NO
g fl
6 D e c e m b e r 1972
CABINET
C O A L P O L I C Y : REVISED D R A F T S T A T E M E N T
N o t e b y t h e S e c r e t a r y of S t a t e for T r a d e a n d I n d u s t r y
I w a s i n v i t e d b y t h e C a b i n e t y e s t e r d a y to r e v i s e i n t h e l i g h t of o u r
d i s c u s s i o n t h e d r a f t s t a t e m e n t a t t a c h e d to m y Note C P ( 7 2 ) 135.
The
r e v i s e d d r a f t of a s t a t e m e a S which,, with t h e a g r e e m e n t of t h e H o m e
S e c r e t a r y and t h e L o r d P r e s i d e n t I w o u l d p r o p o s e to m a k e on M o n d a y
II D e c e m b e r , t h e d a y on which t h e C o a l I n d u s t r y B i l l w i l l be i n t r o d u c e d
in t h e H o u s e of C o m m o n s , i s a t t a c h e d .
P W
D e p a r t m e n t of T r a d e and I n d u s t r y
6 D e c e m b e r 1972
DKAET STATEMENT ON COAL POLICY
W i t h p e r m i s s i o n , Mr S p e a k e r , I w i l l make a s t a t e m e n t
about t h e c o a l i n d u s t r y .
T h e r e i s r e a l u n c e r t a i n t y a b o u t f u t u r e p r i c e s of f u e l s
and an i n c r e a s i n g a w a r e n e s s t h r o u g h o u t t h e w o r l d of t h e
danger of a s h o r t a g e o f e n e r g y .
I n t h e UK we must e n s u r e
that our n a t i o n a l energy a s s e t s are w i s e l y u s e d .
Last
y e a r , t h e N a t i o n a l C o a l Board l o s t £157m- - They a r e now
l o s i n g around £100 m i l l i o n a y e a r .
W i t h o u t Government a i d
t h i s would i n c r e a s e and c o u l d o n l y b e e l i m i n a t e d b y m a s s i v e
contraction.
We a r e n o t p r e p a r e d t o s e e s u c h a r a p i d r u n d o w n .
I t s s o c i a l and human c o n s e q u e n c e s a r e t o t a l l y u n a c c e p t a b l e .
For t h e s e r e a s o n s t h e c o a l i n d u s t r y m u s t b e g i v e n t h e o p p o r t u n i t y
t o r e - e s t a b l i s h i t s e l f a s t h e s u p p l i e r of a c o m p e t i t i v e f u e l ­
w i t h o u t b e i n g a p e r m a n e n t b u r d e n on t h e t a x p a y e r .
A g a i n s t t h i s b a c k g r o u n d my h o n E r i e n d , t h e M i n i s t e r f o r
Industry, t o l d t h e c o a l i n d u s t r y i n August t h a t b e f o r e
c o n s i d e r i n g what h e l p from p u b l i c f u n d s m i g h t b e p r o v i d e d , t h e
Government w i s h e d t o know what t h e i n d u s t r y c o u l d do t o h e l p i t s e l f .
As a r e s u l t , t h e Board and t h e u n i o n s p u t t o u s j o i n t p r o p o s a l s
for a c t i o n b o t h "by t h e i n d u s t r y and b y t h e G o v e r n m e n t .
We welcome t h i s j o i n t a p p r o a c h and t h e d r i v e w h i c h t h e B o a r d ,
with t h e f u l l c o - o p e r a t i o n of t h e u n i o n s , a r e making t o s t i m u l a t e
s a l e s and m a r k e t i n g , i m p r o v e q u a l i t y , r e d u c e o v e r h e a d s and
increase p r o d u c t i v i t y .
T h e s e e f f o r t s p r o s p e r and o u t p u t p e r
manshift h a s j u s t r e a c h e d a new r e c o r d .
The u n i o n s h a v e u n d e r t a k e n
to c o - o p e r a t e w i t h t h e B o a r d i n a r e v i e w of t h e p e r f o r m a n c e a n d
p r o s p e c t s of p i t s .
The B o a r d a r e a l s o r e v i e w i n g t h e i r l a n d and
property h o l d i n g s t o e n s u r e t h a t t h e y a r e p u t t o the most e f f e c t i v e
use and, i f s u r p l u s t o n e e d , a r e s o l d .
1
The i n d u s t r y s j o i n t p r o p o s a l s s i g n i f y a d e t e r m i n a t i o n t o put t h e i r own h o u s e i n o r d e r and t h e Government t h e r e f o r e h a v e .
decided t o t a k e po\\rers t o s u p p o r t t h e i n d u s t r y i n t h i s t a s k . Eirst:
We i n t e n d t o make a s p e c i a l r e g i o n a l g r a n t t o
h e l p t h e Board p r e s e r v e j o b s , e s p e c i a l l y i n a r e a s o f
h i g h unemployment. N e v e r t h e l e s s t h e r e w i l l be
r e d u n d a n c i e s and we t h e r e f o r e i n t e n d t o i n t r o d u c e
improvements i n redundancy t e r m s , which w i l l a p p l y
from t o - d a y . We s h a l l s e e t h a t e v e r y e f f o r t i s
made t o p r o v i d e new j o b s and we w i l l make f u l l u s e
of t h e I n d u s t r y A c t and a v a i l a b l e E u r o p e a n c o a l
and s t e e l community f u n d s .
/Second:
..
Second:
We i n t e n d t o t a k e p o w e r s t o c o n t i n u e g r a n t s t o w a r d s
t h e Board's s o c i a l c o s t s , to c o n t r i b u t e towards the
c o s t t o t h e Board of h o l d i n g s t o c k s and t o c o v e r
l o s s e s i n c u r r e d a s a r e s u l t of s p e c i a l a g r e e m e n t s
with the e l e c t r i c i t y generating boards to burn extra
c o a l . At t h e same t i m e we p r o p o s e t o f o l l o w t h e
community p r a c t i c e and g i v e s u p p o r t t o c o k i n g c o a l .
Third:
We p r o p o s e t o w r i t e o f f t h e B o a r d ' s a c c u m u l a t e d
d e f i c i t a s a t March ^973 and t h e amount b y w h i c h
the Board's c a p i t a l a s s e t s are overvalued.
This
w i l l c o n s i d e r a b l y r e d u c e t h e B o a r d s i n t e r e s t and
depreciation charges.
1
L e g i s l a t i o n w i l l he i n t r o d u c e d f o r t h e s e p u r p o s e s and a
B i l l w i l l b e p u b l i s h e d t o d a y . U n t i l t h i s becomes law any­
necessary advances f o r p u r p o s e s a u t h o r i s e d under t h e Coal A c t s
w i l l c o n t i n u e t o b e made from t h e N a t i o n a l Loans F u n d .
These m e a s u r e s w i l l d e a l w i t h t h e B o a r d ' s i m m e d i a t e f i n a n c i a l
problems and e a s e t h e c o n s e q u e n c e s o f any u n a v o i d a b l e c o n t r a c t i o n .
But s u b s t a n t i a l a s s i s t a n c e from p u b l i c f u n d s c a n n o t b e j u s t i f i e d w i t h
out e f f e c t i v e and s u s t a i n e d e f f o r t s b y a l l s i d e s of t h e i n d u s t r y
t o improve i t s c o m p e t i t i v e p o s i t i o n , c o n t a i n c o s t s and r e - e s t a b l i s h '
viability.
Indeed i t i s o n l y t h r o u g h such e f f o r t s t h a t t h e
i n d u s t r y w i l l b e a b l e t o t a k e f u l l a d v a n t a g e of t h e o p p o r t u n i t i e s ,
not l e a s t i n E u r o p e , w h i c h t h e f u t u r e h o l d s .