Court digs a pit for ministers: British Coal faces heavy costs after closures ruled illegal - Privatisation Bill in doubt

GOVERNMENT policy for the coal industry was in disarray again last night after the High Court ordered independent scrutiny of the decision to shut 10 pits.

British Coal management was considering whether to appeal against the judgment, which will land the corporation - under pressure from ministers to make a profit - with a multi-million pound bill. Since the closure was ordered in October it has spent about pounds 25m on wages at the 10 pits, only one of which is producing coal.

Leaders of the National Union of Mineworkers, the pit supervisors' union Nacods and the Union of Democratic Mineworkers hailed the decision and called on British Coal to restart production. That would land management with further costs, running into tens of millions at some of the collieries where faces have deteriorated or been lost.

The judgment means that the 10 pits are unlikely to close until next summer; the previous deadline for consultation expired at the end of next month. It also puts in doubt the Bill to privatise the industry, which was due to start its parliamentary process next October.

Lord Justice Glidewell, sitting with Mr Justice Hidden, ruled illegal both the decision in October to close 31 collieries, with the loss of 30,000 jobs, and the plan to shut 10 mines, proposed later after a public outcry. After a backbench rebellion by Conservative MPs, Michael Heseltine, President of the Board of Trade, announced that 21 pits would be the subject of a moratorium.

The judges suggested yesterday that Boyds, the US mining engineers, should be appointed as independent experts to assess the viability of the 10.

The consultants have been employed by the Government to review the 21 pits reprieved. Boyds said in a report this year that five of the 10 pits on the closure list were sufficiently viable to be privatised.

British Coal's head of legal affairs, Philip Hutchinson, conceded that it was a 'difficult judgment' for the corporation. 'We will be considering the implications as a matter of urgency. The ability of each of the collieries to survive depends on the size of the market for coal, and that will be clearer after the Government's review is concluded.'

Mr Heseltine refused last night to discuss the judgment when he met UDM leaders at his London office, although he promised to see them again after

Christmas.

But speaking on Channel 4 News, he said: 'We got it wrong because in taking the decision that it was necessary to reduce the capacity of British Coal, the consultation was not considered by British Coal at that time to be necessarily along the lines the courts have now indicated.'

He added that he was not resigning over the ruling: 'My position has not changed. Nothing today has added or subtracted to the controversy of the closure announcement. It was seen then - and this makes it clear - how difficult it was.'

Later, speaking on Newsnight, Mr Heseltine said that none of the 10 pits would need to restart production because the court had made no mention of it. He agreed with the court's suggestion that Boyds would be best placed to conduct the review.

Responding to the unions' call for production to restart, British Coal said it was a 'very, very complex' judgment and that it was not in a position to decide.

The ruling was welcomed by some senior Tory MPs, including Dame Jill Knight, a member of the executive of the 1922 Committee, which expects more pits to be reprieved following the Government's review of energy policy.

Robin Cook, Labour spokesman on energy, said it was a humiliation for the Government. 'We always knew the policy was wrong, but what we have seen today is that it was pursued with shambling incompetence by ministers not even following their own laws.'

Tory MPs rallied behind Mr Heseltine by blaming British Coal. Elizabeth Peacock, who resigned as a parliamentary private secretary after voting against the Government over the closures, said: 'The buck stops with British Coal. They are running it. He (Mr Heseltine) is not.'

But Conservative MPs said privately that the decision had damaged Mr Heseltine's authority. 'It weakens Heseltine - there is no doubt about that,' said one former ministerial aide. Ann Winterton, another Tory rebel, described it as a 'slap in the face'.

Mr Heseltine said that the Government would publish its review on the pit closures due early next year and British Coal would continue to maintain the pits.