UK Coal Operations Ltd

Heather Wheeler 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.

--- Later in debate ---

[Mr Mark Spencer (Sherwood) (Con)]

I am grateful for your compliment, Mr Hollobone. It is a pleasure to serve under your chairmanship. I pay tribute to the hon. Member for Mansfield (Sir Alan Meale) for calling this most important debate. While I am doing my thank yous, I should also thank the Union of Democratic Mineworkers, which has been active in pursuing this issue and is based in the hon. Gentleman’s constituency.

Before we get to concessionary coal, it is worth reflecting on where we are and how we got here. We could be debating the tragic loss of 2,000 jobs, not only in my constituency but also at Kellingley colliery in Yorkshire, and that would be an entirely different debate. That loss has caused enormous financial distress in my constituency and in other parts of Nottinghamshire and Yorkshire.

It is worth giving credit to the Minister for his work and support when the Daw Mill colliery caught fire and the pit got into difficulty. It is also worth paying tribute to the work of the Minister without Portfolio, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), who was the Minister’s predecessor and who played an active role. It was a tragic position with enormous financial pressure on UK Coal. There was a moment when I worried that we were about to lose all those jobs, and the implications of that would have been enormous. Thankfully, with the support of the ministerial team and the work of UK Coal and a number of others, we were able to secure those jobs.

We should reflect on the implications for those who find they are losing the benefits they have built up. I hesitate to use the word “benefits”, because the hon. Gentleman said we should not call them that, but the scheme was part of the terms and conditions of working down a colliery. It was not only a perk, but part of the employment contract. While working in a pit, the person could see that their family was secured for life for energy provision.

The Government often say that we should support hard-working people who do the right thing, and no career is harder than working in a coal mine. Anyone who has had the opportunity to go down a mine will understand how difficult and hard the work is. These people worked hard and they did the right thing. We have a moral obligation to assist those who worked in the mines, as well as their spouses who might be widowed and find themselves under enormous pressure. As my hon. Friend the Member for South Derbyshire (Heather Wheeler) pointed out, many of these people have coal-fired central heating systems, and the financial cost of moving to another energy source and installing a gas boiler is way beyond their means.

I had the opportunity to go round to some of my constituents with Newark and Sherwood Homes, which is a local authority housing provider. Some of its tenants use the free coal to heat their homes. Newark and Sherwood Homes said that it had given some of its tenants the opportunity to change to gas-fired central heating at the cost of the housing provider, but one of the tenants said to me that he did not want to do that, because his whole lifestyle revolved around getting out of bed in the morning, lighting the fire and heating his water. His reason for getting out of bed in the morning was to light that fire. To understand how these things operate, people have to live in a coalfield community.

[Heather Wheeler]

I put on the record again that some of my villages do not have gas, so they do not have another way to heat their properties. If we could change them to gas, I am sure that we would have done. I thank my hon. Friend for stressing that it is a lifestyle choice for some people, but for others there is no choice.

[Mr Spencer]

I am grateful for that intervention. We are fortunate in north Nottinghamshire to have gas to most properties, but some of my constituents will be in the same position, and it is worth making that valid point.

While I have the floor, I will abuse your good will, Mr Hollobone, to a certain degree. I draw attention to the future and how we will move forward in this fantastic industry. I am conscious that Thoresby colliery, in my constituency, has a lifespan that will end sometime between 2016 and 2018. We need to think about how we will accommodate those employees and continue to provide our great nation with home-produced coal.

Just over the border in the constituency of my neighbour, the hon. Member for Bassetlaw (John Mann), is Harworth colliery, which is currently mothballed. I hope that the Government are considering how to reopen it at some point, if it becomes economically viable, and I will continue to discuss that with the Minister.

I implore the Minister to continue to talk to the Treasury about how to accommodate people in this very difficult position. I know that he has given the matter great thought. I hope we can soon accommodate those hard-working people who have done the right thing and should be supported by the Government.