Tories 'blocked' plan to increase coal productivity: Consultants told the Government before its pit-closure announcement that British Coal could cut costs by changing working practices. Jonathan Foster reports

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MINISTERS deliberately blocked proposals to improve coal-mining productivity by more than 30 per cent in favour of retaining traditional working practices. The effect was to make British coal more expensive than alternative gas and nuclear supplies favoured by the Government, according to researchers in Britain and the US.

John Wakeham, Secretary of State for Energy in the last parliament, and two parliamentary under-secretaries, Colin Moynihan and David Heathcoat-Amory, were responsible for a crucial policy decision in January which led nine months later to the announcement that 31 collieries would close or be mothballed.

A confidential study of 28 pits by John T Boyd Company, the Pittsburgh-based mining engineers, estimated last December that costs could be reduced to pounds 1.15 per gigajoule of energy generated - on current British Coal contracts the cost is pounds 1.86.

The Boyd report, commissioned by the Department of Energy, has not been published by the Government, and the Department of Trade and Industry has refused to discuss its conclusions. But leaks of drafts of its recommendations suggest that British Coal could cut costs drastically - and secure a large, long-term market for coal - by adopting US and Australian mining techniques.

In its submission to the Trade and Industry Select Committee, the Union of Democratic Mineworkers said: 'When John Wakeham, as the minister responsible, created the 'dash for gas' he did not take into account the coal industry's ever-improving results. There have been vast increases in productivity in the coal industry which has effectively doubled in the past six years.'

Boyd said mining legislation would need reform and British Coal's management structure would need radical change if overseas standards were to be matched. Since the announcement on 13 October of 31 pit closures, consultants acting for US and Australian mining companies have calculated that UK pits deemed 'uneconomic' could be profitable under new regimes.

Consultants claim the Government could have encouraged British Coal to begin working toward the pounds 1.15 per gigajoule target, a price at least 10p cheaper than British Coal's best estimates for a much smaller industry. But the Department of Energy pressed Boyd to base its recommendations on the assumptions of only minor changes to working practices and mining regulations.

Boyd revised its calculations to produce a projected average cost of pounds 1.33 per gigajoule. It is now producing a report for the DTI on prospects for 21 of the threatened pits. It is likely to repeat the conclusions of last year's consultancy, from which British Coal emerged as a technologically backward mining corporation, restrained by Government reluctance to reform 40-year-old mining laws.

Abolition of restrictions on working hours to allow six and seven-day production, instead of the existing five-day pattern, could contribute to 20 per cent lower costs, consultants including Boyd have predicted. Several branches of the National Union of Mineworkers - including Shirebrook colliery, Derbyshire - have already suggested different working regimes and welcomed the opportunity to meet Boyd consultants.

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