Letter: Coal industry shutdown 'will have a demoralising effect on the whole nation'

Sir: Let us assume, for the sake of the argument, that the Government has got its calculations on the cost-effectiveness of pit closure right, though recognising that the opacity of its economic reasoning precludes clear judgement. Let us assume that the former protestations of natural gas suppliers - that gas was simply too valuable a raw material to be burnt under boilers - were simply a temporary aberration.

Nothing, however, can palliate the brutality of the manner in which the decision has been made, reflecting the worst traditions of management. Nothing could raise in more acute form the obligation that an industrial enterprise has not just to its shareholders (whether the state, as in this case, or private), but also to its employees and to the community in which it works.

Coal mining, like any other industrial enterprise, can only operate with the consent of its workforce and of its community. Its freedom to operate, indeed its success, depends on the 'licence to operate' implicitly accorded by that community. It is an implicit contract which cannot be trampled on and abrogated unilaterally without significant damage not just to the locality concerned, but also to the whole concept of the legitimacy of a company being accountable only to its shareholders.

Redundancy money and provision for diversification are an inadequate compensation for the damage done. Time and consultation are required if the harm from a change of this magnitude is to be minimised. And if the decision was made in such haste in the fear that time and consultation would lead us, the public, the shareholders of a state enterprise, to disapprove of what was done in our name, then it raises even deeper questions about the legitimacy of the action.

Perhaps at least this whole disgraceful episode may force us to think more clearly than we have been prepared to do in the past about the obligations and responsibilities of the public company.

Yours faithfully,

GEOFFREY CHANDLER

London, SE10

15 October