Outlook: Heroic, but he can't save coal

THERE seems to be an awful lot of muddled thinking going on in the Government on electricity and coal. The latest idea to be floated by Geoffrey Robinson, the Paymaster General, in his heroic one-man bid to save the British coal industry from extinction, is that those nasty electricity generators - the ones proposing to slash their orders of the best of British - be stripped of as much as 20 per cent of their capacity.

As a threat intended to cajole the generators into buying more coal, this proposal might have something to commend it, although it is a pretty worthless one since the Government has no payers to expropriate privatised assets in this way. But as a strategy for saving coal mining jobs, it seems almost wholly irrelevant. By all means enhance competition in power generation by reconstructing the pool and further breaking up the industry, but don't expect it to have any effect on coal-buying habits. Why should it?

Unless, of course, the intention is to force National Power and PowerGen to give away this capacity to Mr Budge so that he can generate electricity into the pool for the marginal cost of his coal alone. Even resurgent old Labour surely couldn't imagine the Government would get away with that one.

No, despite all the huffing and puffing from government ministers, the energy review and the best efforts of Mr Robinson, the likely end game for British coal and Richard Budge remains pretty much the same as it has been for quite some while now. The moratorium on new gas-fired power stations will buy a little more time for coal, but only at the expense of reduced competition for electricity, higher prices and a dirtier environment. Nor will it stop mine closures from this autumn onwards. They just won't be as savage as they might have been, that's all.

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