Coal industry told that it must compete: Angry scenes in Parliament as Heseltine's 'bravura performance' staves off the prospect of a Conservative rebellion over the pit closures programme

THE GOVERNMENT'S long-awaited White Paper on the coal industry reaffirms that promotion of competition will continue to drive energy policy in Britain. The report states that coal must find its own way within a competitive market and at the same time warns that demand for the fuel will significantly decline.

In spite of this, the paper reaffirms the Government's intention to press ahead quickly with the privatisation of British Coal. A new body, the Coal Authority, will be set up to license all coal-mining activity, including that in existing British Coal mines and any current or future private mines. In advance of privatisation, the White Paper also promises that any mines earmarked for closure will be offered to others to operate. In a move which is likely to be fiercely opposed by unions, the Coal Mines Regulation Act 1908 will be repealed so that more flexible working can be introduced, increasing time spent underground.

Legislation will be introduced to ensure that British Coal can in future license mines in which more than 150 people may work underground. The White Paper stops short of measures to expand the market for British Coal at the expense of other fuels. The Government has promised subsidies to help British Coal to compete with coal imports.

Ministers appear to be willing to provide up to pounds 500m - in line with recommendations by the Trade and Industry Select Committee - but the White Paper says that the level of subsidy will be a matter for negotiation.

Department of Trade officials said yesterday that the amount of subsidy for individual deals would not be revealed until contracts between British Coal and potential purchasers - effectively the generators, National Power and PowerGen - were on the point of agreement. This is to stop the practice of negotiating 'up to the limit' of the subsidy. At the same time, the White Paper acknowledges that even with financial help, the extra coal sales needed to save mines will have to be agreed between British Coal and the generators.

In spite of intense lobbying by coal supporters, the Government has done nothing to stop the dash for gas in electricity generation. The select committee had said that all gas-fired plants already committed should go ahead, but that ministers should be cautious in considering applications for future plants.

However, the White Paper says that the Government 'intends to maintain its existing policy that as a general rule, matters such as the need for a generating station, its capacity, choice of fuel and type of plant are commercial matters'.

The Government sees no need to ask Nuclear Electric, which is state- owned, to close any Magnox power stations before the planned end of their lives.

Orimulsion, the latest fuel to pose a threat to coal, has also been offered a reprieve. The White Paper indicates that legal problems prevent interference with import contracts. As previously predicted, the Government has also decided not to intervene to stop the import of electricity from France, which displaces about 6 million tons of coal a year.

The White Paper acknowledges that opencast mines can be intrusive and objectionable, and predicts a review of planning guidelines for the mines.

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The package of closures and reprieves are: Closure due to impending exhaustion: Bolsover (327 jobs); Sharlston (639).

Care and maintenance: Westoe (1,040); Easington (1,109); Rossington (496); Clipstone (636); Bevercotes (478); Shirebrook (597).

Development as a low-cost mine, with possibility of reopening: Maltby (892).

Remaining in production: Wearmouth (780); Prince of Wales (558); Bilsthorpe (714); Rufford (709); Calverton (658); Bentley (530); Hatfield/Thorne (274); Frickley (803); Kiveton (598); Markham (673); Point of Ayr (321); Silverdale (540).