Tories try to make coal deal with Ulster MPs

THE GOVERNMENT has opened negotiations with the Ulster Unionists over energy concessions for Northern Ireland, amid growing fears that it faces potential defeat in the Commons over its pits rescue package.

The move underlines the pivotal role which the nine Unionist MPs will play if, as expected, ministers save only around 13 of the 31 threatened pits and disappoint a potentially rebellious section of the Conservative backbenches.

Further delays have hit the white paper and the proposals, being drawn up by Michael Heseltine, President of the Board of Trade, are now unlikely to go to Cabinet this week as had been expected. Some Cabinet ministers are still thought to be battling for a settlement which would save as few as eight pits.

At least one meeting has taken place between Tim Eggar, the coal minister, and Roy Beggs, MP for Antrim East, who was given a specific assurance by a Cabinet minister last year that Northern Ireland would be considered in any energy review. After that pledge, the Unionists abstained in the previous Commons vote on pit closures.

Sources in Whitehall and Belfast were optimistic last week that the Government would meet a substantial number of the Unionist demands. Further informal discussions, possibly with the Northern Ireland Office, are expected to take place in the run- up to the statement on coal. The Unionist 'submission' to the department asked for include commitments on:

Construction of a gas pipeline between the mainland and Northern Ireland

An electricity cable from north of Stranraer to Island Magee in Northern Ireland

A bigger market for lignite, a soft brown coal available in large quantities in Northern Ireland.

Further informal discussions, possibly with the Northern Ireland Office, are expected in the run-up to the statement on coal. No formal deal has been struck and the Unionists' parliamentary party has not debated the issue. It is expected to reserve its voting intentions until the last minute. But one source said that discussions and reaction to the party's submission were going in the right direction.

The party, while determined to further Northern Ireland's interests, is not keen to do the Conservatives' 'dirty work', by helping it push through the closure of more than 15 mainland pits, or to bring the Government down.

Ministers may be able to make a number of pledges without promising large additional resources. British Gas is already planning to build a gas pipeline across the Irish Sea although no final decision is expected until the end of the year, when after the Monopolies and Mergers Commission has reported on the gas industry in Britain.

The pounds 200m cable - or interconnector - project has been planned by Northern Ireland Electricity, which expects to hear this week about its application for up to pounds 70m in grants from the European Community. The link, which would allow Northern Ireland to cater more easily for peaks in demand, will be paid for by the company.

The easiest way to expanding lignite use would involve the construction of a new power station in the province. The Northern Ireland Office and its Department of Economic Development will have an important say in determining the type of power station which observers believe will be needed within the next decade.

(Photograph omitted)