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Richard Budge, RJB Mining
"Coal the cheapest power for the consumer"
 real 28k

Monday, 17 April, 2000, 11:25 GMT 12:25 UK
Coal industry's stay of execution
Ellington colliery
Miners at Ellington colliery can breathe easier - for now
With the government promising fresh subsidies to support UK coal mines, the BBC's industry correspondent Stephen Evans examines whether the industry has a future at all.

It's not about the number of jobs. About 10,000 people work down the pits these days, compared with a 175,000 when the coal strike ended in 1985.

Coal is dwarfed today by hotels as an employer (1.275m), teaching (1.876m), agriculture and fishing (298,000) or even the BBC (30,000).

Nor are there that many villages which depend on the local pit anymore. Because miners were offered alternative work, often at faraway collieries, when their own closed down, they often travel far to their current place of work.

But, there's no denying the political pull of coal even now.

The Conservatives realised it when they tried to close 31 collieries and brought middle-class people literally onto the streets in protest, literally in their tens of thousands.

Labour ministers now recognise the same, particularly with job losses in Rover, steel and ship-yards on the way, all in Labour's heartlands.

The 100m subsidy definitely saves two collieries directly from closure (Ellington in Northumberland and Clipstone in Nottinghamshire) and probably keeps Selby in Yorkshire in business.

Miners in Tower in South Wales - a colliery they themselves own - will also breathe a sigh of relief.

A stay of execution

They would, though, be unwise to rejoice too much.

The grants probably give some collieries no more than a stay of execution. It may or may not be significant that the term of the grant is two years, just taking it past the general election.

Part of coal's problems now are to do with the low world price of the fuel.

Clearly, it may rise and that would relieve the burden over the next two years - but nobody's banking on that.

In British coal's favour is high productivity. German mines, for example, have much higher subsidies. They produce a little more coal but with ten times the number of miners.

The politics of coal

But it's the politics which is intriguing.

Under Mrs Thatcher the rules for intervention seemed pretty clear: best not to do it. (Her Industry Secretary, Nicholas Ridley, was a heavy smoker and a strong believer in the power of the unfettered market - it was said of him at the DTI that he had an empty in-tray, an empty out-tray and a full ash-tray).

His successor, Stephen Byers, has a tougher task.

Labour came to power claiming to be the "party of business", but what that would actually mean in terms of when to intervene and when not to intervene was never made clear.

The tests of the criteria now come at Mr Byers by the week - Rover, ship-building, BNFL, the subsidy to Airbus to build the "SuperJumbo".

Coal does seem to have more politics wrapped up in it than most.

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See also:

05 Dec 99 | Business
The fall of King Coal
05 Apr 00 | Business
Mines at risk as losses mount
24 Nov 99 | Business
Mine 'saved from closure'
31 Oct 99 | The Company File
Jobs under threat from pit closure
01 Nov 99 | The Company File
Coal boss's plea as mine closes
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