Carbon Price Support (Land Reclamation)

Debate between Cathy Jamieson and Sandra Osborne

Tuesday 6th January 2015 Westminster Hall

[Sandra Osborne]

Indeed, that is entirely true and I hope that the Minister, in his response, will refer to what can be done in that regard.

I am part of the coal taskforce that was set up by Scottish Government and I welcome the work being done by the various bodies involved, which I hope will go a long way towards ensuring that there is better regulation and financial insurance in the future, so that this situation can never happen again.

As I have outlined, however, the bottom line is that substantial funding is required, and so far it has not been forthcoming from the Scottish Government or from anywhere else. East Ayrshire council is working with the two current operators to ensure that restoration is maximised. So far, around 43% of the bond money has been achieved, and to date there has been a success rate of around 80% of the upper total values. However, it is vital to recognise that the remaining balance will be much more difficult to achieve and will undoubtedly result in much lower awards.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I congratulate my hon. Friend on securing this debate on an issue that also affects my constituency, which is also part of East Ayrshire. Does she agree that constituents in our local areas have indeed made a huge commitment to the coal industry over the years and now expect to see everyone—the Scottish Government, the UK Government and indeed the local authority—working together to find a solution? Also, does she agree that it would be very helpful indeed if the Minister would consult with his colleagues in the Treasury to see what solutions might be possible to ensure that the necessary funding is provided?

[Sandra Osborne]

I thank my hon. Friend for that intervention and I totally agree with everything she said. I also thank her for the work she has been doing, alongside me, on this issue from the very beginning.

Even with the moneys now banked with the council, only restoration schemes of a greatly reduced quality will be delivered. Therefore, additional funding is vital and that is why the Hargreaves request for a technical change to extend the coal slurry carbon price support exemption to include coal derived from schemes supporting restoration projects is worthy of serious consideration.

It is not possible to over-emphasise the urgency of the situation that we face. The objective is to achieve remediation and the avoidance of long-term blight; already, the existing blight is getting worse with each passing month. The sites also present an ongoing health and safety risk. They are so large they cannot be effectively secured from trespass and they are dangerous places. Unstable head walls and extremely deep water bodies with vertical drop-offs make for dangerous playgrounds, and they are often quite close to villages and houses. I, for one, live in dread that an accident could occur at any time.

Recent wet winters have accelerated the rate of flooding of voids, making ultimate restoration longer, harder and more expensive. The longer we go on without a planned and properly funded restoration, the worse this will get, and in the meantime there are two restoration schemes progressing in East Ayrshire that are far from ideal. An early decision on this proposal would mean that abortive work might be avoided.

The Minister is only too aware that the coal industry is on a downward spiral at present, given the importing of cheaper coal, which will mean that in 12 to 18 months annual UK coal production will have fallen to less than 4 million tonnes, with no prospect of recovery in the immediate future. This can only lead to cessation of production thereafter, with no betterment of these legacy sites—and other sites—and indeed their potential abandonment a second time.

Of the 311 East Ayrshire people made redundant in 2013, 167 are now in employment, but these are not all within the coal sector and not all are within East Ayrshire. Depopulation of our rural areas continues. According to the Hargreaves proposal, we could see the legacy sites across the country all restored effectively to their original quality within a five-year period. Providing an incentive for an industry-led solution would make the difference in East Ayrshire in particular to the value of around £161 million, against less than £20 million at best recovered from bond moneys and a poor level of restoration not worthy of the name. For that five years there would be guaranteed employment of a local work force. Hargreaves estimates 1,000 plus indirect employees, but to be honest, in the position we are in, any and all employment opportunities are most welcome and badly needed.

Rightly, questions have been asked about the impact of such a proposal by the Scottish Opencast Communities Alliance and others. It is hardly surprising that people are suspicious of the motivations of operators, given how much we have been let down in the past and the way that our priority to bring jobs to the local area has undoubtedly been manipulated; for example, with planning extensions being applied for in the full knowledge that planning conditions would not be met. I bow to no one in the anger I feel about this and I will continue to seek justice for the community regarding those who were guilty of it. However, Hargreaves is not the culprit and thus far it has been the only show in town. If there is even a chance that this could provide a solution, I am willing to grab it with both hands.

There are those who think that no taxpayers’ money should be spent on clearing up the mess, that no funding should be directly applied, and that no tax incentive should be solely for restoration. In saying that, I am aware that if an exemption was applied to the completion of the restoration, this could be regarded as tax hypothecation, a practice not generally adopted by the Treasury. I welcome the Minister’s views on this.

I am clear about this. I have raised requests for funding from both the Scottish Government and here at Westminster from day one and I still do so today. However, in reality there are no clear alternative funding sources forthcoming, so I think we must look at each and every option. We must do so with the proviso that the bottom line for support of any kind is that there should be no opportunities for companies to profiteer, use any support to substitute for their ongoing restoration responsibilities or escape adherence to an upfront restoration plan with transparent and appropriate independent monitoring.

I refer the Minister to the position of Coalpro, which as he knows represents the majority of the UK coal producers. It supports any mechanism that assists in restoring both the sites left behind by former operators and the reputation of the responsible operators who remain and have continued to work in Scotland throughout this period of falling coal prices. Although opposed to the carbon price support mechanism, it is in favour of an exemption in the short term, if this would enable abandoned and orphaned former mine sites to be restored to beneficial future use. So the industry supports this, which is obviously very important.

According to Hargreaves, a targeted carbonyl sulfide exemption would have no overall impact on coal burn and CO₂ production—only a small substitution effect, with imports from Russia and Columbia—and the measure would not overly profit or extend the life of the UK coal extractive industry, but would merely enable it to clear up its own mess before winding down. However, it would help maintain capacity for the next five years: a major benefit if the UK is to consider pursuit of carbon capture and storage projects.

The scheme would only relate to “orphaned” restoration liabilities, where owner and operator were bankrupt or liability has fallen back on the state, so there is no breach of the “polluter pays” principle, and the exemption would be limited to the amount of restoration coal necessary to make the scheme viable.

The proposal is that this is policed by the local authorities and the Coal Authority independently. There are plenty of examples of and precedents for using taxes to incentivise environmental benefits across a wide range of taxes, including low road tax on CO₂-efficient cars; lower VAT rate for the supply and installation of energy saving materials; and recycled aggregates being exempt from aggregate tax levy. There are plenty of examples where tax has been used to promote restoration and remediation schemes, such as the obvious precedent that coal slurries have been exempt from carbon price support since 2013, with about 1 million tonnes per annum, which is about the same as the estimate for restoration coal. That exemption has worked well and has caused no ripples or issues in the markets. Most deep mine slurry ponds are already capped off: they are inert and present nothing like the environmental and health and safety risk presented by the orphan open-cast sites, so it seems a simple and logical extension.

The Minister will be interested to know that Hargreaves has received legal advice on competition law and state aid on restoration-related coal and will not be surprised to learn that it believes there are compelling arguments about why the proposal would not give rise to concerns about these matters. I do not have time to go into detail about that. In any case, this is clearly something the Government would wish to assess for themselves.

There are many questions from the community and the companies, and many questions that the Government would have to consider, but I do not have time to go into those in this short debate. My main purpose today is to emphasise the extent of the environmental and financial problem, the fact that it needs to be dealt with as a matter of urgency and the absence of any clear alternative, and to make a plea for this proposal to be considered seriously and as soon as possible. We have already lost another winter, but I am realistic: an announcement at the Budget—if not before—would be extremely welcome.

Although arguments continue about how this all came about in the first place—the negligence of the operators involved and the lack of monitoring by the planning authority and how they should be held to account—no one can argue that this should not be fixed, and fast. This is a national environmental disaster for Scotland, the extent of which has never been seen before. In the medium to longer term, this will take several years of concerted and focused effort, but big problems need big, bold, decisive and effective solutions. I hope the Minister will agree that this could potentially be the answer we have been looking for. I look forward to his response.

Housing Benefit

Debate between Cathy Jamieson and Sandra Osborne

Tuesday 12th November 2013 Commons Chamber

[Sandra Osborne]

Indeed. Councils face massive cuts in their budgets and daily increases in the demand for services, and they are inadequately funded to provide discretionary assistance to those who face bedroom tax arrears. That is not helped by the kind of council beauty contest that the Scottish National party has encouraged between Labour-led and SNP-led councils, or any other combination of council leadership, about who is doing most to protect tenants from eviction. All councils, I am sure, are doing their best to protect tenants in difficult circumstances.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Does my hon. Friend agree that one thing that could be done in Scotland would be the enactment of the Member’s Bill introduced by my former colleague, Jackie Baillie MSP, in the Scottish Parliament?

[Sandra Osborne]

I am going on to refer to that.

In East Ayrshire council, 2,300 tenants are caught by the bedroom tax, and more than 1,400 are already in arrears as a result—that is 62%—and the figure grows every month. The council estimates that it will have £500,000 of arrears by the end of the financial year as a result. In Scotland, as my hon. Friends have said, we have the added dimension of an SNP Government on pause, while they throw everything into their referendum campaign.

Rail Freight Traffic

Debate between Cathy Jamieson and Sandra Osborne

Wednesday 24th October 2012 Westminster Hall

[Sandra Osborne]

I certainly do agree, and I intend to raise that point later in my speech.

The charge would exclude Scottish-produced coal from the English market, resulting in a reduction in output of up to £3 million tonnes a year and, as my hon. Friend said, its replacement by imports. More than 1,000 direct jobs will be lost in an area of already high unemployment, particularly in the west of Scotland. Even the threat of the proposal is constraining investment, and it is imperative that it is withdrawn immediately.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I assure my hon. Friend that I can understand her Ayrshire accent perfectly well this morning, even though she has a cold. Does she agree that it is concerning that the ORR seems to be suggesting that the electricity coal industry can afford to pay the increases, when there are problems in the industry in Ayrshire and jobs are under threat?

[Sandra Osborne]

Yes, totally. I intend to cover that topic later in my speech.

We are only too aware that the charge is proposed in a context of revenue-raising efforts and cuts across the board. The Government seek to end what they regard as a subsidy to the power industry. I argue that the proposal is ill thought out, counter-productive, at odds with existing Government policy and amounts to a possibly fatal attack on the coal industry, especially in Scotland and my constituency.

I will provide some background to the current position of the coal industry in Scotland. It is well publicised that coal mining in the UK is struggling. Contrary to the statements in the consultation documents about high international coal prices, the reality is that coal prices have fallen by some 30% so far this year. The recent trading announcements from a number of coal industry companies, which show an industry under severe financial pressures, reflect that. Margins are wafer thin and there have already been redundancies in Scotland, including in my constituency. Scottish Coal, for example, is consulting on 100 redundancies on top of a 10% cut in wages for the whole work force—hardly a thriving industry.

An increase of £4.50 a tonne in freight charges for supplies to England will lead to an immediate reduction in output, as high-ratio coals within existing sites are abandoned, with the possibility of some sites closing altogether. The suggested track charge increase could double the cost of coal transport from east Ayrshire to customers in England. That increase will impact heavily on the viability of coal operations in Scotland, with the very real prospect of mine closures. If operations involving the three companies in my constituency close, it will have a devastating impact on employment—direct and indirect.

We, of course, have already experienced the devastation of mine closures in our communities, so we know the results only too well. The area has never really recovered from the closure of deep mining in the ’80s, but open-cast mining has thrown us a lifeline, with well-paid jobs and community benefit. History has shown that local people are prepared to tolerate inconvenience and blight on their landscape, because they know how important the jobs are for every generation.

[Cathy Jamieson]

My hon. Friend has rightly identified that people have been prepared to accept the surface mining open-cast industry in many of our communities. Does she agree that that will be put at risk if coal is transferred back to the roads, rather than transported by rail?

[Sandra Osborne]

Yes, and some of the companies are not in a position to do that, even if they wanted to.

In 2012, 1,196 people are directly employed in open-cast mining in Scotland and 704 in east Ayrshire, which has the greatest number of coal sites in Scotland and the highest number employed in the industry. It produces more coal than any other area in Scotland and that is worth some £9.4 million to the local community. Following the decline of the deep mining sector and the devastation that followed, decline has set in and has been difficult to shift. The area has had consistently higher than average unemployment rates, population decline and trends of low economic activity and a high percentage of jobs in the public and retail sectors and areas of high relative deprivation. I am sure that the Minister gets the picture, but, if not, he is welcome to come to see for himself. The bottom line is that under no circumstances can we afford to lose the relatively secure, well-paid, private sector employment and input to the local community that the open-cast mines bring.

The consultation includes a range of suggested charge increases, but an increase of £4.50 a tonne is forecast. The consultation states that coal producers could absorb that increase in track charges, but no evidence base is presented to support the assertion and it appears to be just an arbitrary statement. Furthermore, the consultation proposes that the coal and the nuclear industries be singled out to be burdened with the increased track charges. A cynical view would be that the ORR sees those industries as a captive market without the ability to revert to road transport.

Scotland (Poverty)

Debate between Cathy Jamieson and Sandra Osborne

Wednesday 30th November 2011 Westminster Hall

[Sandra Osborne]

That is the whole point of raising this debate today.

All this has happened despite the fact that when the Chancellor announced the rise in tax credits he said that it would support 4 million lower-income families, helping to ensure that there would be no adverse impact on child poverty. As the Minister knows, there is now a law relating to child poverty. The Chancellor has now taken that extra support away from the 4 million families. In its distributional analysis of yesterday’s measures, the Treasury has admitted that, as a result of the decisions taken by the Government, the number of children living in households with incomes below 60% of the median will increase by 100,000 in 2012-13—which will mean more children living in poverty.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I thank my hon. Friend for giving way and for securing this debate. When we talk about big numbers, medians and so on, it can sometimes be difficult for people to understand how changes impact on their lives. Is my hon. Friend aware of research done by the Union of Shop, Distributive and Allied Workers which shows that, already, some £989 has been taken from a low to middle-income family as a result of changes to tax credits? That is even before this latest broken promise, with £110 being taken from child credits.

[Sandra Osborne]

My hon. Friend is absolutely right. We are concerned about the impact on ordinary people. The quicker they realise exactly what this Government are up to, the better.

Who are these people? Alongside children, certain groups are at particular risk of poverty. They include lone parents, women, people who are not working, people affected by disability and people from ethnic minorities.