Open-cast Coal Sites (Restoration)

Iain Wright Excerpts

Thursday 29th January 2015 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

This has been a really important debate. I thank the Backbench Business Committee and all who have participated, particularly my hon. Friend the Member for Bridgend (Mrs Moon), for ensuring that the debate took place.

Ensuring that sufficient resources are available to restore open-cast coal sites to a proper state is important. It is universally agreed, I think, that a key principle for the approval and ongoing use of open-cast mines is that operators have an obligation to both local communities and the environment to clean up after themselves, and that financial provision should be made to allow that to happen. The debate has rightly and expertly focused on what happens when the obligation breaks down and what can be done to make sure it is fulfilled.

It is clear from the debate that all parts of the United Kingdom are affected, with speeches from Members representing Northumberland, Durham, Derbyshire, Scotland and Wales, although I was surprised that no Scottish National party Members attended to discuss the subject. Seven mines in Ayrshire, Lanarkshire and Fife closed when Scottish Coal ceased operations in 2013, and my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) has worked diligently to make sure that operators are held to account. Rising water levels, contaminated lagoons and erosion lead to increased health and safety risks, environmental damage and the threat that the taxpayer will have to pick up the bill.

I was pleased to hear the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) talk about Northumberlandia. I have visited and walked my dog there. It is a fantastic example of what restoration and open art can do. My hon. Friend the Member for North West Durham (Pat Glass) rightly raised concerns about the financial viability of UK Coal and the fire sale of several open-cast sites, calling into question the operator’s ability to meet its obligations to restore the sites after the coaling phase is complete. We have also heard from Wales. My hon. Friend the Member for Bridgend (Mrs Moon) has mentioned two sites—East Pit in Neath Port Talbot and Parc Slip in Margam. There is huge concern about how the restoration of those sites will be paid for. I understand that only £2.5 million of the estimated £115 million has been identified and allocated for East Pit, while at Parc Slip about £5.5 million has been set aside against a total estimate of £57 million.

We have heard time and again in the debate that local communities often had to deal with disruption and pollution for some considerable time while the open-cast mines were operating. Now that the mines have ceased operating, I think the whole House agrees that we do not want the communities to suffer a permanent and dangerous scar on their landscape. I have a number of questions to put to the Minister arising from the debate. They essentially fall into two main categories: how did we get into this position, and what do the Government need to do next to resolve the problem?

My hon. Friend the Member for Bridgend said with regard to the Parc Slip site that nothing illegal had taken place between Celtic Energy and Oak Regeneration. I do not want to say anything that compromises the ability of the judiciary to make independent rulings, but I have a number of questions. My hon. Friend mentioned that in 2010 Celtic Energy held a sum of money for restoration purposes totalling £136 million. Within 12 months, that sum had been reduced by £63 million, with no evidence or assurance that it had been spent on restoring the mine. It is perfectly legitimate to ask where that money went. My hon. Friend said that it was considered a provision within the accounts of Celtic Energy. That brings me to my old accountancy past.

I consider that a liability is a current obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits. There seems to be quite a clear liability rather than a provision that is unknown. I am surprised that that entry in the accounts has been reduced. What conversations took place in 2010-11 between Ministers, officials and the company to determine what was being done with that money? Is the restoration fund for operators routinely monitored or audited by the Minister’s Department to ensure that any liabilities can be matched by sufficient resources? What work takes place between his Department and counterparts in the devolved Administrations to ensure that this is adequately dealt with across the United Kingdom? What assessment has he made of the adequacy of other restoration funds at other sites? In the light of question marks over the sufficiency of funds to cover the costs of restoration, does the Minister believe that the existing framework for guaranteeing the maintenance of a restoration fund is adequate? What reforms and recommendations need to be put in place to ensure that it does meet the needs of local communities?

Unrestored sites are unacceptable as they pose a risk to local communities. Equally, I would question whether it is for taxpayers to pick up the bill, especially when the selling of the coal generated cash and profits for the company, a proportion of which should have been apportioned to the costs of restoration. An additional complication is the falling world price for coal, which means that operators may not generate the revenue anticipated, but will quite rightly be expected to bear the costs of restoration.

How do we settle this matter? My hon. Friend asked what assessment the Minister and his Department have made of the original 1994 agreement, and how the Government can ensure that its terms are complied with. Can we see the original agreement? If the purchase of the land from British Coal and the granting of planning permission were conditional on restoring the site on decommissioning, who, in the Government’s view, remains liable for ensuring that this is done? What powers will the Government use to ensure that this liability will be met?

I understand that UK Coal has submitted a state aid application. Will the Minister update the House on what progress has been made on that specific matter? I have questioned him several times on state aid approval, and on matters of urgency and priority on steel and energy costs. I hope that he can update hon. Members today on the current status and expected progress of the state aid application with regard to UK Coal.

My hon. Friend the Member for Ogmore (Huw Irranca-Davies) summed this up succinctly when he said that a company can walk away from its responsibilities without any repercussions. The debate today has shown how the House rages against that and wants to make sure that appropriate procedures are in place so that companies cannot walk away from their responsibilities. I think the Minister will agree. What steps will he take and what measures will he put in place to ensure that those liabilities are met and the restoration of open-cast coal sites is undertaken, leaving less of a blight on the local community?