MPs condemn plan to protect pits

Coal mining: The Government has been embarrassed over its attempt to prevent further closures in the industry

GOVERNMENT PLANS to safeguard the coal industry by blocking further gas-fired power stations were attacked yesterday by a Labour- dominated committee of MPs.

In a hard-hitting report criticising the Government's lack of an energy policy, the Commons Trade and Industry Select Committee said there was no case for imposing a ban on grounds of either security or diversity of supply. It also called on ministers to plan for Britain's future energy requirements on the assumption that there may be a need for further nuclear power stations over the next 20 years.

The timing of the report is an embarrassment for the Government, coming as it does as the President of the Board of Trade, Margaret Beckett, and the Paymaster General, Geoffrey Robinson, prepare to announce a rescue plan for the pits following a six-month energy review.

The package is likely to involve a continuation of the moratorium on planning consents for gas-fired stations and new agreements between the electricity generators and the coal industry to guarantee a market of about 25 tons of coal a year. Controversially, ministers are also considering blocking the construction of some gas stations which already have planning consent but which still require approval to burn gas.

The plans have already come under attack from power station developers for jeopardising job creation and yesterday the select committee added its voice, saying there was no danger of Britain becoming over-dependent on high-priced imported gas, as the Energy Minister John Battle has suggested.

"There are no reasons in terms of confidence in long-term availability, to resist the growing use of gas," the report says. "Nor is the resultant decrease in diversity over the next ten to fifteen years a dramatic one: UK energy supply would still be considerably more diverse than it has been for most of this century."

The committee, chaired by the senior Labour backbencher Martin O'Neil also criticised the way the Government let so much time pass last year without undertaking its energy review, creating uncertainty for the coal and offshore gas industries.

John Redwood, the Conservative spokesman on trade and industry, backed the MPs call for an end to the moratorium, adding: "The Trade and Industry Select Committee is right to slate the Government for its failure to deliver an energy policy, for its failure open up energy markets and for the sidelining of the DTI."

The coal rescue package being prepared by ministers is designed to prevent about half the ten pit closures that would otherwise take place following the end of long-term contracts with the generators.

The committee said there was a "sustainable case" for a policy which safeguarded an indigenous deep-mined coal industry.

But in a surprise conclusion, it also suggested there was a role for nuclear power. Despite the unfavourable economic climate and the major effort that would be required to turn around public opinion, the question of new nuclear power stations "cannot and must not be ducked any longer", says the report. "We recommend that a formal presumption be made now for the purposes of long-term planning that new nuclear plant may be required in the course of the next two decades."