Government called upon to save the coal industry

In late 1997, the UK's coal industry has been in turmoil as the Government, trade unions, employers and power generators have attempted to come to an agreement to save up to eight pits and 5,000 jobs.

Further problems have been looming in the UK's troubled and much-diminished mining industry for some time now, and came to a head at the beginning of December 1997 when the industry's largest producer, RJB, issued calls to the Government to step in to save the industry, with eight pits and some 5,000 jobs said to be at risk. The crisis was triggered primarily by the fact that RJB had failed to secure enough contracts with power generators, which argue that the company's coal is too expensive.

As the Labour Government had ruled out direct state subsidies for the privately owned mining industry, other support options mentioned included curbs on open-cast mining and on the production of electricity using gas, larger coal stockpiles and state support for clean coal technology.

Relations between RJB management and the energy minister reportedly soured during discussions. The Government first stepped in by putting a stop to the proposed building of new gas-fired power stations. While the coal industry welcomed this move, it said that the initiative addressed only the long term and that short-term responses were needed if the pits and the jobs were to be saved. Some confusion then prevailed after the Government announced that the pits would be saved for six months, giving it time to review the whole industry. The Government said that this would be done by the generating companies agreeing to extend their contracts for coal. The generating companies, however, seemed unsure exactly what they had been committed to.

Given the locations of most pits, closure usually means the destruction of whole communities or villages. The cuts could also have much wider knock-on effects when supplier and contractor companies are taken into account. Despite the Conservatives having made severe cuts in the industry when they were in government, the Shadow trade and industry minister, John Redwood, argued that the present Government's refusal to help the coal industry is putting 50,000 jobs at risk.

The issue raises serious questions about an all-embracing energy policy in the UK. Miners had expected action from the Government, which had promised to address the problem in its election manifesto. However, the Government, torn between a market approach and all-embracing policy, has been slow to react. For many commentators it is clear that the crisis has pushed the Government into considering an energy policy, whether it wanted one or not, but it is still not clear whether jobs will be saved in the medium to long term in this long-running saga.

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