ACCOUNTING FOR THE PRODUCTIVITY PERFORMANCE OF BRITISH COAL 1985–94

Labour productivity in British Coal (BC) increased by 10 per cent per annum between 1985 and 1994 and in 1993–94 it rose by 38 per cent. Our analysis reveals the following key points. The 'official' labour productivity figures for deep-mined coal as announced by BC overstate the true position by as much as 5 per cent per annum. Nevertheless a considerable record of growth remains to be explained. In contrast to most previous studies we argue that capital expenditure was a key determinant and that colliery closures also had a significant, positive effect. Finally we question the standard historical narrative on the British coal industry which suggests that it has been in terminal decline for most of this century. Using Salter's stylised model we conclude that the industry's recent performance does not fit with a generalised model of a declining industry.