UK Coal Operations Ltd

Alan Meale Excerpts

Wednesday 6th November 2013 Westminster Hall

[Sir Alan Meale (Mansfield) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. We have known each other for a long time, and I am grateful to you for being here today. I am also grateful for the opportunity to hold this debate on a matter that causes acute concern in my constituency and many other mining constituencies across the length and breadth of Britain. Many Members either have a direct interest in the people and the pits concerned, or represent people who have moved to their constituencies from mining towns.

Before I begin, I want to make a complaint. Yesterday morning, I was contacted by the BBC about the debate. I was told that the BBC wanted to cover the whole issue on television and radio, and that someone would contact me later in the day, which they did. The problem was that they rang up late last night and changed the whole basis of the programme, and I was told that it would now cover energy prices, MPs’ expenses and concessionary coal, which are entirely different matters. It is appalling that the BBC has not treated the matter as seriously as it should have done, and I want to put that on record.

Let me set out the background to this debate. Since the collapse of UK Coal—the company that the Government chose to run the coal industry—after a fire in Daw Mill pit a few months ago, most of the mining jobs have been lost and the liabilities are at risk, which are both very serious. That occurred because during the nationalisation of the coal industry, liabilities were transferred from the public sector to the private sector under TUPE arrangements. As I recall, my hon. Friend the Member for Bolsover (Mr Skinner), and my hon. Friend the Member for Wansbeck (Ian Lavery), who is sitting next to me, warned some months ago of the collapse of the company and the subsequent fallout. They predicted that unless immediate action was taken, the scenario that we have seen would come about. I am grateful to them for that prediction, but it is sad that they have been proved correct.

I remind the Minister that when the Government privatised coal mining in Britain—against the wishes of those who worked in the industry, retired from it, or lived or ran businesses in communities around it, and against the wishes of the vast majority who expressed an opinion on the matter—they promised to honour all obligations and to guarantee them after the transfer, so that the obligations were at no risk whatever. It is clear from debates at the time that they were regarded by the Government as obligations governed by collective agreements established since nationalisation in 1947, but particularly negotiated in the ’60s, ’70s and ’80s. Indeed, it can be argued that some of the agreements date back to the beginning of the last century, and I will provide some examples of that later.

Many people say that the obligation to provide concessionary coal represents a benefit in kind, but it is no such thing. It is a negotiated arrangement by which a portion of the coal dug was pooled for concessionary coal deliveries, both at the time and in the future, to anybody who had worked in the industry for more than a specified number of years. People sometimes speak of the concessionary coal purely as a benefit when it has, in fact, already been earned.

I realise that the Minister is likely to argue that his Department has no legal obligations to UK Coal or the individuals concerned, but I fervently dispute that. I believe that the Department has a moral and financial responsibility to those who were promised concessionary fuel as part of their employment package, and who now find themselves at sea. The national concessionary fuel scheme for employers was never designed to be put at risk. No agreement on privatisation would have been reached in this place if Members had thought that the arrangements might ever be put at risk. That is why the Government made it perfectly clear in Bill Committee and on the Floor of the House that they regarded that obligation as an essential part of the privatisation arrangements. I do not think that anybody who was involved in that would assert anything to the contrary.

Members on both sides of the Chamber want to participate in the debate, so I will be fairly brief, but I want to look at the facts. More than 2,000 ex-mine workers and their widows have lost their historical entitlement to concessionary fuel, or cash in lieu of fuel.

[Heather Wheeler (South Derbyshire) (Con)]

I congratulate the hon. Gentleman on securing this important debate. Constituents from Swadlincote, Woodville and Netherseal have contacted me about this issue. We have had meetings with the Minister, and letters have gone backwards and forwards. The hon. Gentleman makes a really important point about the fact that the resources have been set aside for future payments. The workers did not take that as pay at the time; it was set aside, and the coal would be there, or they would receive cash in hand, later on. Some of my constituents live in properties with coal-fired central heating. They do not have gas, and there is no other way of heating their property, so what are they supposed to do? The situation is costing my constituents £1,300 a year, which is an awful lot of money.

[Sir Alan Meale]

The hon. Lady is perfectly correct. We are talking about entitlements, and the amount of money that is being taken away from those people is absolutely outrageous. In any other industry, there would be uproar throughout the community. I am grateful to her for expressing her view.

About 400 of the 2,000 mineworkers retired on the grounds of ill health, either because of injuries that they sustained while working in the coal industry or as a result of pneumoconiosis, emphysema, silicosis, asbestosis, chronic bronchitis or a range of other serious illnesses. If hon. Members have ever seen anybody who is chronically disabled by those diseases, they will understand why concessionary fuel and other arrangements—particularly those concerning pensions—are so important.

I will not make too much of this, but I know about such illnesses because my grandfather died of pneumoconiosis when I was six years old. He had to be taken away from his home because he was in such pain, and he lived for about six weeks in hospital care before he died. He drowned in his own blood; his lungs collapsed. We are talking about not one miner, but hundreds. We can see the seriousness of the issue from the fact that among the 2,000 mineworkers that we are discussing, there are an awful lot of widows. The proportion of widows is much higher than it would be if we were talking about any other industry. Mineworkers die on the job; their lives are shortened by the work that they do, and we should be proud of them and support them in their old age. We should not think of trying to remove any entitlement that they have gained through their work.

The Minister can and must try to resolve the matter. It is not acceptable for him to do nothing to change the situation. He can change it, and he knows that. He can use section 19 of the Coal Industry Act 1994, which states:

“The Secretary of State may, out of money provided by Parliament, make such payments to such persons as he may think fit for the purpose of securing…supplies of concessionary coal…made on and after the restructuring date to persons who would have received such supplies from the Corporation under relevant arrangements if those arrangements had not been affected by steps taken in connection with the restructuring of the coal industry”.

The reality is that he can do it.

What are the costs of the scheme? The Government are getting away with this cheaply. In 1994-95, they received £800 million from the private sector in the privatisation of the coal industry. There are surpluses in the miners’ pension scheme and the British Coal staff superannuation scheme. I was a Minister in the Department of the Environment, Transport and the Regions, and every year we talked about how much the surplus was worth. We formed and built the Coalfield Communities Campaign out of some of the reserves. There are hundreds of millions of pounds of surplus every year. The Government have taken that, both before and after privatisation, and that is a scandal, because that money should be paid to the miners who earned it, although that is another matter. The Government should make arrangements to settle the matter from that money. The estimated cost of picking up the concessionary fuel liability in its entirety is £34 million. If we are talking about hundreds of millions of pounds every year and the Treasury gaining £800 million from the denationalisation of coal, a mere £34 million is not very much. The Minister knows that the administrative structure is already in place, so no additional cost is attached to sorting this matter out.

I know that this does not directly come under the subject that we are discussing, but workers have also lost 10% of their pension because of the demise of UK Coal. Now their concessionary fuel will be lost. Either loss is too much. Many of them had previous service in the nationalised industry. Some worked loyally for the Conservative Government during the strikes of 1984-85. I did not agree with that, but they did not stand idly by; instead, they supported the Government in keeping the pits open. Many of the people involved in this matter are the same people who were involved then. A lot of them are thankfully in a different organisation now, but they showed loyalty to the Government, and the Government should begin to think about how they can reward that.

I will help the Minister: it is not just the 1994 Act that he can use. The European Council made a decision on 10 December 2010 on state aid to facilitate the closure of uncompetitive coal mines. That allowed the Government to make provision to ensure that key liabilities were transferred from past employers to any new entity, and were funded, so that UK Coal’s former contractual obligations were met, including those on pensions and concessionary fuel. It is therefore not true that nothing can be done. The EU decision allows the Government to make the payments outside the statutory system. The question is whether they will. It is possible, legal, just and fair. Let’s do it.

[Several hon. Members]

rose—

--- Later in debate ---

[Ian Lavery]

I sincerely hope that the hon. Gentleman is right, because, as the Member who represents the former Selby coalfield, I have in my constituency more men, women and, potentially, widows, than any other area in the national coalfield.

We must consider the moral obligation. No Government of any political persuasion or colour should have any problem with giving hard-working people what was agreed when they started employment. That is the issue. Some people suggest that there is an obligation to the taxpayer—there is, but that can easily be overcome.

[Sir Alan Meale]

My hon. Friend is touching on the responsibility of the Government. If we go back to the 1947 legislation relating to the nationalisation of the coal industry, we can see that some private mining companies had concessionary coal agreements with their work force, and those obligations were taken on by the nationalised industry. The Government therefore have a legal and moral responsibility to try to keep the arrangement going.

[Ian Lavery]

I sincerely agree with my hon. Friend’s comments, and I want to turn to how the Government could approach this important issue. I intended to read out section 19 of the Coal Industry Act 1994, but my hon. Friend has already done so. It clearly begins:

“The Secretary of State may, out of money provided by Parliament, make such payments to such persons as he may think fit for the purpose of securing any of the following, that is to say—”

I will not ramble on, as the provision has already been placed on the record, but it is from the Coal Industry Act, and we have to ask why it is there. It is there for a reason—to tackle the problem we face today. It is not there for any other reason. It is not there because it was thought that things would not happen, but because of the debate that was had at all stages of the privatisation of the coal industry in 1993-94. I urge the Minister to look at the situation and take advantage of what the Secretary of State is allowed to do in accordance with the 1994 Act. The matter was discussed at great length, and it is very interesting to read. People should take the opportunity to read Hansard at all stages to see how much of the debate was taken up by this issue, which is very important for many miners.

If the industry had not been privatised, such a situation would not have arisen. The only people who are suffering are those who have worked hard in the industry. It is not the Government who will suffer and it is not UK Coal, which has moved on to pastures new, that will suffer— it is the 2,000 people in the mining communities. As politicians, we have a responsibility to try to help those people.

We have already discussed the vulnerable people in the community—the widows and the elderly people—who have served a lifetime in the industry. They do not have any ability to earn in the future. As the hon. Member for South Derbyshire (Heather Wheeler) mentioned, many of those people live in remote communities. They have only coal-fired power; they do not have gas. How will they afford to renew their heating systems and, on top of that, pay the horrendous hikes in prices for gas and oil, which we are discussing later today in the main Chamber? It is just impossible for them. We should not be putting such a burden on to people who have given their lives not just for the coal industry but for the people in this country.

People face a dilemma: do they get gas, oil or electricity? The price is all that they can look at—and whether they can afford it. We have problems with miners who, having started at the pit on the same day and worked side by side, have finished work under different circumstances. They have all put in exactly the same amount of time, and, under the national concessionary fuel scheme, had a lifetime entitlement to coal. Now, because of UK Coal’s failure, some people have that allowance and some people do not. It is discriminatory to say the least. How can UK Coal get away with creating such social destruction? It abandoned the coal industry one day and moved on to pastures new, leaving carnage behind. It left people in the mining community to pick up the pieces from big business, and they will fail. As politicians, have we not got the common decency to put that right?

A number of firms in the north-east are owed huge amounts of money by UK Coal, which moved on the next day to secure Thoresby, Kellingley and up to six open-cast mines. That was welcomed, but we should not look at that and say it was brilliant and leave the other people behind to pick up the pieces. That is just not acceptable.

UK Coal owes lots of money to companies in my area. It owes M J Hickey, a plant hire firm, £30,000; that could put the company out of business. It owes Northumberland county council £620,000, which will put huge strains on the local community. This is not good enough. I agree with what the hon. Member for Sherwood (Mr Spencer) said; of course we wanted to secure up to 2,000 jobs. I compliment the Minister on his assistance in that regard, because it is just so, so important. However, we must look at what is left behind.

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[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

Thank you, Mr Hollobone. I was going to say that it was a pleasure to serve under your chairmanship.

I congratulate my hon. Friend the Member for Mansfield (Sir Alan Meale) on securing the debate. I should declare an interest, in that my grandfather was briefly a miner in a pit in my hon. Friend’s constituency, although I should reassure him that, as I have explained to my constituency neighbour, my hon. Friend the Member for Lanark and Hamilton East (Mr Hood), that was on my mother’s, not my father’s, side of the family, so it is just a coincidence that my surname is Greatrex.

The Minister has rightly been asked a lot of questions by Members on both sides, who represent constituents directly affected by the changes at UK Coal and who have a long and proud record of standing up for their constituencies and mining communities, so I will endeavour to speak for less than 10 minutes to give him the maximum opportunity to reply.

My hon. Friend the Member for Mansfield and others have set out the background, so there is no need for me to go over it. However, I would make the point that this issue garnered a lot of attention from the Minister’s predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes), following the fire at Daw Mill and the break-up and liquidation of UK Coal. During that time, the Minister’s predecessor, Members from across the House, representatives of the unions and others were involved in a number of discussions, which primarily focused on securing the jobs. As the hon. Member for Sherwood (Mr Spencer) said, we welcomed that, but issues were also raised about the liabilities and the potential effects on the people we are talking about.

It is worth reflecting on the point that this issue has been raised on both sides of the Chamber this morning, by people who do not necessarily normally agree with each other on a number of issues. However, given today’s comments, the Minister will be aware that there is a unanimous view that the situation we are discussing is unjustified and unfair for the people concerned.

I was looking at a written answer from the Minister from June, which demonstrated that the number of households in receipt of concessionary fuel under obligations on the Department of Energy and Climate Change fell from 132,158 in 2003 to 70,419 in 2013, for obvious reasons. However, between 2012 and 2013, it fell from 75,061 to 70,419, so the number of people we are talking about is approximately half the fall in the number of households in receipt of concessionary fuel under the current DECC scheme. It is worth making that point about the scale of what we are talking about, because the number of people entitled to concessionary fuel under the scheme as part of DECC’s obligations fluctuates and falls. DECC may well make projections of those numbers, but it may not be absolutely sure what they are, so if we are talking about 2,000 people, that should borne in mind in relation to DECC’s larger liabilities.

I have a couple of questions for the Minister. The first relates to a point made almost in passing by the hon. Member for Selby and Ainsty (Nigel Adams), and, in a different context, by my hon. Friend the Member for Bassetlaw (John Mann) and my right hon. Friend the Member for Rother Valley (Mr Barron), about some of the other liabilities and unpaid debts of the remaining parts of UK Coal, particularly to small and local businesses. That is an important point, although it does not relate directly to the concessionary scheme. Ministers would normally say that this is a matter for the Department for Business, Innovation and Skills, but given that the Minister is also a Minister in BIS, he can perhaps give us an answer.

Secondly, what assessment has DECC made of the impact of the loss of the national concessionary fuel scheme on ex-employees and on fuel poverty, because the Department has responsibility for those issues? As we have heard, a significant number of people are off the gas grid and have no alternative to the scheme. Their situation in relation to fuel poverty will be significantly affected by the liquidation of UK Coal and the ongoing issue we are dealing with.

I note that a written answer the Minister gave my hon. Friend the Member for Clwyd South (Susan Elan Jones) on 16 October suggested the Government had a pretty closed mind on this issue. I hope the response I heard the Chancellor give the hon. Member for Selby and Ainsty in the main Chamber yesterday, which my hon. Friend the Member for Wansbeck (Ian Lavery)referred to, is a sign that, although there are, as my hon. Friends have shown, potentially legal powers available to the Minister, as well as duties and responsibilities he can use, the Government recognise that there is a moral responsibility that goes beyond those issues. Ministers have to be careful when people start making arguments about moral responsibilities on the Government, but I underline that we are talking about a relatively small number of people.

[Sir Alan Meale]

My hon. Friend is talking about moral issues. The hon. Member for Nuneaton (Mr Jones) said he did not think there was a legal responsibility. Of the 2,000 people concerned, the majority are injured, ill or widowed. For those who are ill with silicosis, pneumoconiosis, emphysema and other such illnesses, the effects build up over a number of years. They would have contracted their illness in the period when the National Coal Board existed, so there is a legal responsibility, which could be challenged.

[Tom Greatrex]

I thank my hon. Friend for his intervention. I was about to say that a number of people have, as my hon. Friend the Member for Bassetlaw said, been forced, through no fault of their own, to leave work early, and the scheme’s provisions were part of their settlement. Therefore, there is—at least in some of those cases—almost certainly a legal duty, as well as a moral obligation.

To conclude, the Minister will have heard the strength of feeling. He will have heard about the legal opportunities open to him. He will also have heard the moral case. I hope he will take those points away, reflect on them and, in the further discussions he may have with the Treasury in the next couple of weeks, make it clear to the Chancellor and others that the message from both sides of Parliament—from every person who has spoken in this debate—is that there is a strong case for saying that he not only can, but should, act to ensure that people are not disadvantaged through no fault of their own.