Coal pledge to pit rebels

MICHAEL Heseltine, President of the Board of Trade, will promise to introduce an early Bill to privatise the coal industry at the same time that he announces a pounds 500m pit rescue package. This will probably keep open 13 mines earmarked for closure last October.

The prospect of a coal privatisation Bill in the next session of Parliament will help to quell simmering discontent on the Tory right about Mr Heseltine's plan for further subsidies as he retreats from the plans to close 31 pits.

Although the Cabinet remains divided over what - if any - long-term prospects the reprieved pits will have, the Prime Minister, John Major, has thrown his personal weight behind the plan, which will still mean that more than half the pits originally threatened will be shut.

Ministers regard the report from the all-party Commons Trade and Industry Select Committee as having pointed the way to a solution of the crisis. But privately they have rejected the conclusion of its Labour chairman, Richard Caborn, that it could lead to a reprieve for 20 or more of the threatened pits.

While ministers are relieved that the committee has accepted the case for closing some pits, they are sceptical whether the total of extra coal production can pushed as high as 16 million tonnes, as suggested in the report.

Mr Major's backing for Mr Heseltine is in tune with an assessment of backbench opinion by the Chief Whip, Richard Ryder, and follows a fierce Cabinet debate over the extent of the reprieve. Some hawkish senior ministers pressed for a 'social approach', concentrating more money into helping redundant miners rather than on keeping pits open.

At the last Cabinet meeting 10 days ago, Mr Major issued an unprecedentedly strong reprimand to colleagues over leaks of the Cabinet's differences. Cabinet members passed on this ban on discussion of the coal crisis to junior ministers at a series of Whitehall meetings. But it has emerged that advocates of the 'social approach' included right-wingers such as Michael Howard, the Environment Secretary, and Michael Portillo, Chief Secretary to the Treasury. Strong reservations were also expressed by Gillian Shephard, the Employment Secretary, and Kenneth Clarke, the Home Secretary. Further debate is likely over the extent to which the reprieve should be presented as offering long-term hope for the future of the pits, and whether the susbidy should be financed directly from taxation, or, as looks increasingly unlikely, as a surcharge on electricity bills.

As a Nottinghamshire MP, Mr Clarke is said to have been particularly disturbed that miners at 10 of the 31 pits identified as the most viable belonged to the National Union of Mineworkers rather than the Union of Democratic Mineworkers, whose members worked during the 1984-5 strike.

Senior ministers dismissed claims by Robin Cook, the Opposition trade and industry spokesman, that a speech on the coal industry given by Lord Wakeham on Friday night had been an attempt to 'sideline' Mr Heseltine. Lord Wakeham, who chairs the ad hoc coal committee, had a long standing engagement to talk to Leeds Chamber of Commerce, and cleared the entire speech in advance with Mr Heseltine.

Senior ministers are increasingly confident that they can see off right-wing discontent over the rescue package by pointing out that the industry has been subsidised up to now at a level of pounds 1bn a year. Instead of ending this in one fell swoop, it merely intends to phase it out over three to five years.

Mr Cook called for the immediate reopening of 10 pits whose closure was ruled unlawful by the High Court in December, while Neil Kinnock, the former Labour leader, told a rally that there was a 'very strong case' for keeping every one of the 31 pits open because 'Britain can use the coal.'