Government in crisis: Wakeham promises a full and open review

LORD WAKEHAM, leader of the Lords, yesterday promised 'a full and open review' of the pit closures. It was a shift from Michael Heseltine's statements the previous day that the closure moratorium would merely allow the Government and British Coal to 'set out the full case for the closures which British Coal planned and to which I agreed'.

Lord Wakeham held out the implication - but by no means the promise - that some of the 21 pits under the moratorium might be saved.

But while his Lords statement differed in tone from Mr Heseltine's insistence that there was 'no economic alternative' to the closure programme, it offered no guarantees that the closures would finally be any different.

The Government review, he told peers, would cover 'the full range of issues', including the switch to gas. But he implied that that would be limited to whether regional electricity companies were currently buying gas-fired power more expensively than they could obtain it from other sources.

The Government accepted, he said, British Coal's view that there was an 'unanswerable' case for closing 10 pits. But any offers to buy them would be fully considered by British Coal.

The review would include:

Looking at each pit and asking whether the case for closure had been made. It would also consider whether some pits should be mothballed or released to private operators. Mr Heseltine on Monday told MPs there had been 'a few' inquiries, but 'I would not wish to give any sign . . . that there is a significant market for a significant number of those pits'.

Further talks with the generators and regional electricity companies, would be held, Lord Wakeham said. 'We will need to be satisfied that the market prospects for coal have been correctly assessed. We shall be looking again to ensure that no company is abusing its market position.'

Stocks at pits and power stations would be examined to ensure plans to run them down were 'sensibly phased'.

Mr Heseltine would want to look at proposed import levels and 'satisfy himself it is appropriate'. Mr Heseltine on Monday said that was 'not a matter for which I have any direct responsibility . . . It is not a matter for me.'

Lord Wakeham also told peers: 'We shall look again at the switch to gas.' He added, to Opposition protests: 'There is no question but that gas is cheaper.'

However: 'If the regional electricity companies had an interest in a gas-fired power station which is more expensive than the electricity they can buy from another source, then in my judgement they are in breach of their licence.'

Mr Heseltine said on Monday it was the responsibility of the regulator to ensure that electricity producers obtained their fuel at the best price.

He told peers in phrasing that yesterday bought off some backbench rebels: 'There would be little point in having a pause, a moratorium, on the proposed pit closures if it was merely a device for getting the Government off the hook for today or tomorrow.

'The purpose of the pause is to look again at the issues and report to Parliament as to whether the case for closures has been made, or whether ways and means can be found to increase the use of coal and as far as possible to lessen the impact.'

He cautioned that it would be 'wrong to be too optimistic about the outcome of the review, but also wrong to be too pessimistic'.

Mr Heseltine had told MPs on Monday: 'I shall not say that at the margin there will be no change in policy,' but 'the message is that we are giving time for a wider understanding and a slower pace in certain circumstances. But that does not create a market for coal.'