LONDON — SELLING Britain's state-owned coal industry to the private sector promises to be one of the most controversial measures in the industrial privatization program the Conservative government has been pursuing for the past decade.
Rebel Conservative members of Parliament are threatening to join the Labour opposition to try to block or heavily amend a privatization bill. They are objecting to suggestions that executives of state-owned British Coal (BC) will stage management buyouts and thus end up owning large chunks of the industry. Arthur Scargill, president of the National Union of Mineworkers (NUM), says he will oppose privatization ``in whatever form it takes'' and has warned of ``a massive battle ahead.''
Government ministers have been taken aback by the angry reaction to what they hoped would be a straightforward sell-off of an industry where many pits are being mothballed or shut down. The rumpus was triggered on Dec. 28 when British Coal chairman Neil Clarke confirmed that some managers were planning to organize the capital required to buy several pits.
This prompted Kim Howells, a Labour member of Parliament and former NUM official, to claim that BC's managers had been deliberately running the industry down with the aim of acquiring sections of it at depressed prices. He won support from Elizabeth Peacock, a senior Conservative MP, who has been critical of the government's handling of the shut down of uneconomical coal mines over the last 18 months. Mrs. Peacock says it is ``absolutely inconceivable'' that a BC management team be given preferential treatment.
``They are the very people who could not find markets for British-mined coal, and they are the reason why the industry has shrunk so sharply,'' she said. ``They should not be allowed to profit from a decimated industry.''
Unlike the privatization of other state-owned industries such as British Airways and British Telecom, British Coal shares will not be offered for sale to private and corporate investors. The industry is to be split up into five regions - Wales, Scotland, Yorkshire, Midlands, and North-east England - which will be offered for sale to domestic and overseas mining companies.
Defending the right of his managers, Mr. Clarke said: ``They know a great deal about the business, and I would not be surprised if, in Wales and Scotland, they were willing to have a go.'' Mr. Scargill, who led a year-long national coal strike in the mid-1980s, declared that ``the British people own the industry, and the NUM will help them to defend it.''
TIM EGGAR, the energy minister, is coming under pressure to rule out a management buyout on the grounds that it would involve a conflict of interest. Malcolm Edwards, a former commercial director of BC, says a buyout team would be both buyer and seller. ``There is no way you can play two roles,'' he says. ``BC's existing managers should step down and then bid if they wish to.'' This approach is unacceptable to Peacock and other Conservative MPs who opposed BC's closure of more than 20 pits last year. A total of 22 pits remain open. She says that if executives bid, there is a ``real danger'' the ``poor quality'' of BC's management will continue after privatization.
Mr. Howells contends that when Britain's North Sea gas reserves are depleted, coal will be in a position to stage a comeback in electricity generation. ``I don't want to see people who deliberately ran the industry down cherry-picking its best parts and exploiting them when the industry begins to expand again in future years,'' he says. ``There is an appalling conflict of interest here.''
Yet few overseas mining concerns have shown interest in purchasing BC. The government so far has failed to spell out the extent of the liabilities any successful bidder would be taking on, Edwards says, including pensions to mineworkers, health funds, and environmental issues. ``The one thing that will choke off investment is a significant amount of unquantifiable liability in the industry itself,'' he says.