Heseltine considers organised market

MICHAEL HESELTINE, facing renewed demands for his resignation, said he was looking at ways of 'organising the market' for coal which could secure the long-term future of some of the pits threatened with closure.

The options for expanding the market are almost certain to require legislation. A cross-party Commons select committee is expected to call for a statutory commission to take overall responsibility for supply of electricity.

An interim report by the Department of Trade and Industry this month also raised the possibility of legislation to force National Power and PowerGen, the two privatised power generators, to buy more from British Coal.

The committee is likely to recommend the use of part of the pounds 1.3bn subsidy for nuclear power to pay for desulphurisation equipment on power stations, to allow more British coal to be burned instead of cheaper, cleaner imported coal. That, too, would require primary legislation.

Without expanding the market for coal, Mr Heseltine may be forced to go ahead with the closures, making the High Court judgment against British Coal little more than a breathing space.

The President of the Board of Trade said: 'The market for coal was defined by the market that Mrs Thatcher had put into place . . . During the privatisation of the electricity industries, the contract was entered into for British Coal for three years for 65 million tons. It runs out in March, next year. There is no alternative contract afterwards.'

British Coal could not expect to sell more than 40 million tons from March. 'All comments have to be judged against how you address the difficulty of producing coal from the present number of pits if there is not a foreseeable market in March next year,' Mr Heseltine said on BBC radio. Asked why he did not organise a market, Mr Heseltine said: 'That is precisely what we are doing.'

Labour kept up the pressure by delivering a petition with 600,000 names to Downing Street calling for a reversal of the closure programme. 'We really do need a clean pair of hands looking at this issue. It is not good enough to leave it to Michael Heseltine to review his own mistakes,' Robin Cook, Labour's spokesman on trade and industry, said.

Heseltine overruled, page 4