The Decline of the UK Coal Industry

In the 1930s, George Orwell volunteered to spend time down a coal mine to find what life was like for coal miners. For the six foot, middle class, old Etonian, the experience of going down a mine was a real shock. The experience left him sore and full of admiration for those who worked down the mine. But, as Orwell remarked, coal was essential to the British way of life.

” Our civilization, pace Chesterton, is founded on coal, more completely than one realizes until one stops to think about it. The machines that keep us alive, and the machines that make machines, are all directly or indirectly dependent upon coal. In the metabolism of the Western world the coal-miner is second in importance only to the man who ploughs the soil. He is a sort of caryatid upon whose shoulders nearly everything that is not grimy is supported. “

– George Orwell, Down the Mine

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UK coal miners in Wales. Photo UK National Archives – no known copyright.

At its peak, the British coal industry employed over a million men, and was one of the most important industries in the UK. Transport, power and related industries were all heavily reliant on coal. Even in the mid 1960s, British Rail was still running on coal power (steam). In the 1970s, a strike by coal miners, left Britain on the infamous three day week. Coal was Britain’s life blood, and without it, the economy could come to a standstill.

The decline of the British coal industry started after the First World War. But was accelerated after the Second World War, and in particular, after the miners strike of 1984.

Between 1923 and 1945, employment in the industry fell from 1.2 to 0.8 million, and the British share of the world coal market dropped from 59% to 37%. In part, this can be explained by increased competition, not only from other countries producing coal but also from cheaper substitute fuels. Before 1914 demand for coal was rising at an annual rate of 4%; after the war British exports of coal plummeted and domestic demand remained stagnant. Coal in decline

Employment in UK Coal Industry

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Source: Coal Industry
  • Employment in 2010 – 6,000

Little more than 60 years after the end of the Second World War, Britain’s last coal mine producer (UK coal) is fighting for survival. Despite producing around 44% of British power needs (from just 39 mines employing 6,000 people – UK Coal) , even the UK coal industry knows it is an industry in decline. As the chairman of UK coal stated:

“I recognise fully that coal, as it is currently used to produce power, has a finite lifetime, because we have to decarbonise the energy supply chain,” he says. “This industry is towards the end of its life. Let’s give it a managed landing, rather than a catastrophic insolvency.” (UK coal makes final bid for survival at Telegraph)

Reasons for the Decline in the UK Coal industry

energy sources UK

  • Over time, the UK coal industry has become uncompetitive on a global scale. With higher wages and unit costs of production, coal is cheaper to import from abroad. For example, UK power stations import considerable amounts of coal from Argentina.
  • New Sources of Energy. From the 1960s, the UK discovered cheaper sources of energy, such as north sea gas and oil. Also the nuclear power industry provided a new source of energy. With new energy sources, we became less dependent on coal.
  • Decline in demand for coal. Even as late as the 1960s, British railways were run coal power. But, steam power soon vanished in place of diesel and electric. Households used to burn coal for central heating. But, after the Clean Air Act of the 1950s, this rapidly declined as people switched to more modern forms of central heating.
  • Political Issues. The coal industry had the most powerful unions in the country. Unions were highly organised, often by leaders with strong political (left wing) allegiances. Miners strikes, such as 1924, early 1970s and 1984 Miners strike had the capacity to bring the country to a standstill. Right wing politicians, such as Mrs Thatcher were determined to break the political and economic power of the coal miners. Arguably, the miners strike of 1973 was a key factor in the defeat of the last Conservative government, run by Edward Heath. Mrs Thatcher staked her political fortunes on defeating the coal miners in the 1984 strike. After being on strike for nearly a year, the miners reluctantly drifted back to work – defeated, their political and economic power never recovered. The unions were then powerless to prevent a steady stream of mine closures.
  • Nationalisation. In 1947, the coal mines were nationalised. This was partly ideological and also a reflection of their depressed economic fortunes. Some argue that nationalisation held back the industry. Combined with strong union demands, it was hard to invest and implement new working practises to improve productivity. However, it is not clear a private sector coal industry would have been able to prevent this long-term decline because it was declining even in the 1920s and 1930s.
  • Privatisation. Others suggest that privatisation was the final nail in the coffin for the British coal industries. In the private sector, without government support, the coal industry is struggling to compete against foreign competition.

coal-power

  • Global Warming and the need to reduce CO2 emissions. From the late 1980s, there was increased awareness of the environmental cost associated with burning coal. As a result, the government is committed to reducing carbon emissions to combat the problem of global warming. Given these environmental targets, there is no longer any incentive to subsidise an industry with very high external costs. As the chairman of UK coal admits in the above passage – coal is a declining industry because of the need to replace with greener sources of power.

Impact of Declining Coal Industry

The nature of economics is that industries decline and grow. It is not a bad thing that the share of labour working in agriculture has fallen from 97% pre 1800, to 3% in 2012. Neither should it be a bad thing that employment in the coal industry has decline from 1 million  in 1908 to 6,000 today. It would have been impossible or foolish to try and keep all those 600,000 people working in a dangerous and declining industry.

However, the nature of the coal industry has meant that mine closures have often caused great economic and social cost.

When people slowly leave the land to take manufacturing jobs in the cities, this was easier to absorb and didn’t cause mass structural unemployment.

However, coal mines were such a dominant employer in a mining communities that when a mine closed down, the economic effects were often devastating. When a town is so reliant on one major employer, the closure means that local unemployment could often be very high – 50% plus. Therefore, it was very difficult for the unemployed coal miners to find new employment. The coal miners faced significant geographical and occupational immobilities. (e.g. a miner may have no academic qualifications (not needed in mining)). After mine closure, it is hard to take jobs in the new service sector based economy. Therefore, there was understandable resistance to the closure of mines from local communities.

It’s a difficult economic problem. From a wider perspective, there is a certain inevitability to the decline of the industry. But, from a local and practical point of view, there is a tremendous personal cost. Perhaps the real government failure was not the refusal to keep the industry afloat. But, more could have been done to quickly promote economic regeneration and find new work for the miners who lose their jobs.

3 thoughts on “The Decline of the UK Coal Industry

  1. Exactly! Britain’s big mistake up until the 1970’s was to fail to develop new industries instead of keeping dying industries like coal going by subsidies because of the political commitment to “Full Employment at all costs.” What we should have done was to encourage the develop of our own Mittelstand. Thatcher certainly made mistakes but if Atlee, Churchill, Macmillan and Wilson had faced up to the underlying reasons for our economic problems Britain would be a very different place today!

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