John Major said he had no doubt the Commons trade and industry committee would wish to conduct its own inquiry to which the Government would give its fullest co-operation, but he warned that the diminishing market, lower prices and mounting stockpiles could not be ignored.
Facing the Commons for the first time since the Conservative conference row over Europe, Mr Major was also urged by Tory backbench critics of closer EC union to delay bringing the Maastricht Bill back to the Commons. But he maintained that it was now clear how the 'Danish difficulties' would be resolved, leaving the way clear to bring back the legislation. The Government is understood to want the committee stage of the measure, the European Communities (Amendment) Bill, to begin next month.
In the first Smith-Major Question Time clash, the Labour leader tried to exploit Tory criticisms of the colliery closure plan by calling on Mr Major to agree to establish 'a genuine and independent review' before any pit was closed forever. It was 'crystal clear' that Michael Heseltine, President of the Board of Trade did not announce a review in his statement on Monday, Mr Smith said.
Mr Major replied that he did not want there to be any dispute or misunderstanding in the House on the position of the 31 pits. The 10 specifically named for closure had, in the Government's judgement, no sustainable economic future but would go through the full statutory review procedure.
'During the moratorium on the other pits, the trade and industry select committee, I have no doubt, will wish to hold their own inquiry and the Government will give that their fullest co-operation. During the moratorium Mr Heseltine will himself take views and evidence to consider, alongside the information already available to him on all matters. In due course, he will publish that in time for consideration by this House before any future debate in the Commons.
'His statement will be set in the context of the Government's energy policy and will set out the consequences of that policy for British Coal, the implications for individual pits and the employment prospects for the industry. It is after that debate that future decisions will be taken.'
Repeating his demand, Mr Smith said: 'If the Prime Minister really believes he has a strong case, what has he to lose from an independent inquiry? What is he afraid of?'
Mr Major replied that when the consultation and examination had been completed there would be every opportunity for every view to be taken into account. But Mr Smith said the only satisfactory alternative to the 'constantly shifting statements' from Mr Major and Mr Heseltine and the 'unseemly Dutch auction' on the Tory back benches was for MPs to refer the whole matter to the select committee.
Paddy Ashdown, leader of the Liberal Democrats, said that the Government was asking its backbenchers to accept that 'having been found out seeking to close the coal industry quickly by rigging the market, it now asks to be allowed to close down the industry slowly by rigging the review'.
Rejecting the assertion, Mr Major said coal stocks were growing daily, the market was contracting and prices would be noticeably lower in future. 'That is a problem the Government cannot ignore. The sooner the Government deal with that problem, the sooner we will comprehensively be able to put in place the sort of assistance measures that will provide alternative employment, alternative security, in areas where people know the existing jobs have, at best, only a limited life.'
Robert Adley (C, Christchurch) said there was a linkage between electricity privatisation and the problems of the coal industry. British Rail had told him that if the pit closures went through it would face a bill of pounds 200m in lost revenue and redundancies. He called for a 'full cost benefit analysis' before any further industries were privatised.
Mr Major said that many of coal's problems preceded the electricity privatisation. The industry faced severe contractions in Germany, France, Belgium and elsewhere.
Patrick McNair-Wilson (C, New Forest) said concern about closures was bound up with wider concern about the direction of the economy following withdrawal from the European exchange rate mechanism. 'With a lower value for sterling, it really is essential we have a policy for import substitution, buy-British and not building gas-fired power stations when we already have 50 per cent too much generating capacity. If the Prime Minister were to put these facts into the review, he would find the enthusiastic support of people like myself, who are deeply concerned about what is being proposed,' he said.
Stressing the opportunities offered by a lower exchange rate, Mr Major said he wanted to build a 'proper level of growth' for the British economy and industry. He told MPs: 'We are seeking the right policies that will bring back not just recovery to this country, but recovery with low inflation. I believe the reductions we have been able to make in interest rates and the increasing competitiveness of the exchange rate will enable us to lead this country back to recovery with the low inflation and sustained growth that we need.'
In a subsequent statement, Mr Major claimed last Friday's Birmingham EC summit had re-established the confidence that was vital to stability, recovery, growth and jobs in member countries.
But with the Maastricht Bill in mind, Tony Marlow (C, Northampton North) asked which was more important to the Prime Minister - 'the goodwill of a couple of elderly European politicians intent on imposing their blueprint on an increasingly reluctant Europe or the goodwill of his Conservative MPs? If it is the later, wouldn't it be the height of political wisdom if he were to delay the return of the Maastricht treaty to this House until such time as the Danes have ratified it. And God willing they will never do so.'
But Mr Major said that it was now clear how the Danes were going to resolve their difficulties. They had set out the options and were negotiating on them in readiness for the Edinburgh summit. He warned the Euro-critics: 'It may be the ambition of some to see this country isolated as a sour little outpost of western Europe, but it isn't my ambition.'
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