Open-cast Coal Sites (Restoration)

Ian Lavery Excerpts

Thursday 29th January 2015 Commons Chamber

[Ian Lavery (Wansbeck) (Lab)]

First, I want to say that we need to dispel the myth that coal is a fuel of the past. I am a bit of a geek now and I was looking at the app on my iPhone 6 just before we came in, and, as of only 20 minutes ago, coal is producing 36.2% of the electricity generated in the country. That is 16,767 MW, and that shows the importance of coal.

Coal is not going away either in the UK or globally. Last year we imported about 42 million tonnes of coal, and we burned about 50 million tonnes. We imported about 50% of that 42 million tonnes from Russia—hardly a politically stable country, to say the least—and we also imported coal from Colombia, where they use child labour to mine the coal.

We need to embrace the fact that coal is not going away. As I have discussed with the Minister on numerous occasions, we need to ensure that coal is embraced—indigenous coal, together with carbon capture and storage, which will ensure we can continue burning coal with zero emissions. We must also secure state aid for Kellingley, Thoresby and Hatfield in the deep-mine sector. We have had discussions on that with the Minister as well.

I welcome this timely debate on open-cast sites and restoration, and the lack of it in some areas, some of which have been blighted for quite some time now. That is of great concern. This issue and the needs of the communities concerned were raised by the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith). They need assurances, and why not? When it is said that an area is to be open-casted, the people there deserve the right to be assured that the land will be restored to a state at least as good as that before the open-casting. We must ensure that.

We cannot have private companies raiding the countryside, ripping it back like the proverbial sardine-can and taking the coal out, and then leaving without restoration. We cannot accept that. From now, any company, or any director who is involved in a company, that produces coal and then leaves things in such a state should never be allowed to be part of an application in the future. That should be fundamental—it should be basic—and it would protect the people we represent.

I have a huge problem with Potland Burn in my constituency. It has already been mentioned by the right hon. Member for Berwick-upon-Tweed. It is a perfect example of the chaos that a private company can cause by abdicating its responsibilities. Potland Burn was operated by the then UK Coal. Somebody mentioned cowboys. “Cowboys” and “UK Coal” are often said in the same sentence. UK Coal operated this site, and then it went into liquidation. It then formed a new company called UK Coal Surface Mines, and it is now in charge of the open-cast site in my constituency. The company says that there is a £3.86 million shortfall, which means that it cannot restore the land. It has a £1.67 million fund with the county council, and £60,000 with the Coal Authority. That means that the site might never be restored.

The only option would be for the local authority to step in to help a private company, but that would mean that taxpayers would be paying out of their backside pockets to restore an open-cast site after the company has been in and raided it, exploited the coal and run away with the profits. That would be totally unacceptable. It would not happen in many other industries, but it is happening in the UK coal industry. The companies are blackmailing the local authorities by saying, “Sorry, we can’t restore this one, but if we get planning permission for another one, we will have the money to do it.” That is happening, and it is an absolute disgrace. It should be illegal. We should be putting these people in front of the general public.

This is happening at sites across the country. Scotland and Wales have their own huge problems. I am aware of a letter having been sent to the Secretary of State for Energy and Climate Change about a potential deal on carbon price support, with a request that the tax be withdrawn for certain coals in and around open-cast areas. At least that is an attempt to find a solution, which would help, but it raises many questions as well. We need a UK-wide pot. Coalpro, the trade organisation, has come up with a wonderful idea. It has proposed a £1 levy on every tonne of coal burned in the UK. That would provide £50 million for a communal pot for the UK, which could be used by the Coal Authority to ensure that local authorities had enough money to restore every site, regardless of whether it was in England, Scotland or Wales.

[Natascha Engel]

I agree that that sounds like a good idea, but would it not allow those people—who I think we both agree are cowboys who have made an awful lot of money from excavating the coal—to get away scot-free?

[Ian Lavery]

I fully agree with that, but I am looking at this from the perspective of the people who live next to those sites. They have had to endure the conditions created by the open-cast mines for quite some time. If there are legal processes available—as there should be—they often take a long time, but that is not to say that we should not challenge those companies for every single ha’penny we possibly can.

Coal has been a political football for quite some time; it has been kicked from pillar to post for generations. It has much to offer, however. Perhaps the real answer to the question of the cost of obtaining the indigenous coal reserves that we are blessed with would be to abolish the carbon price support in its entirety. I am merely suggesting that. I am not sure whether the Minister would consider it, but I would welcome his views on the matter.

[Several hon. Members]

rose—

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[The Minister for Business and Enterprise (Matthew Hancock)]

I join others in congratulating the hon. Member for Bridgend (Mrs Moon) on bringing this debate to the Floor of the House and opening it so clearly and strongly. I agree with the shadow Front-Bench spokesman, the hon. Member for Hartlepool (Mr Wright,) that there is broad consensus across the House on the scale of the challenge, which I acknowledge and which was described by the hon. Members for Bridgend and for Ayr, Carrick and Cumnock (Sandra Osborne), and by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) in strong and lyrical terms. I acknowledge the scale of the difficulties and I look forward to working with Members on all sides to try to resolve them.

There is also consensus that the operation of open-cast mining involves a resource that can be brought out from under the ground, and therefore that the burden of restoration should fall not on the taxpayer but rather on those who benefited from the excavation and sale of the resource. In the time available I hope to address as many of the questions that were raised as possible.

Several hon. Members, including the hon. Member for Bridgend, commented on the time taken for a planning application to be approved, the different and complicated mechanisms needed, and the number of authorities involved. I acknowledge that and the further complication that the devolution settlement leaves responsibilities both for the UK Government, which are mostly executed through the Coal Authority, and for devolved Administrations. It is therefore important that the devolved Administrations are part of the solution. The hon. Member for Carmarthen East and Dinefwr described clearly the responsibilities of the Welsh Government. I spoke to Fergus Ewing, the Minister for Energy, Enterprise and Tourism in the Scottish Government, about the matter yesterday in advance of the debate today. Although it is disappointing to see that no SNP Members are in the Chamber, I made the Scottish Government aware of their responsibilities in relation to the difficulties that are most apparent in the south of Scotland.

The Chair of the Backbench Business Committee, the hon. Member for North East Derbyshire (Natascha Engel), asked what we can do to ensure that those who do not fulfil their obligations in a reasonable way can be debarred from future operations. I thought that was a good suggestion and I will explore the possibility of the Coal Authority having a role in vetting open-cast licence applications to examine past conduct. I cannot give the hon. Lady the full commitment on policy today, not least because this is the first time the possibility has been raised with me directly, but it is a sensible proposition which I will take away, and I will get back to her on that.

In a debate largely driven by consensus, it was good to have the hon. Member for Wansbeck (Ian Lavery), the representative of king coal, in full flow. He demanded that I reach this Dispatch Box and immediately change the tax regime of the United Kingdom to end the carbon price floor. I am sorry to have to disappoint him by saying that that is a matter for the Chancellor in a Budget, so far be it from me to announce it today. The hon. Gentleman will know that from next year we have frozen the carbon price floor and we have taken action to ensure that although we commit to our international obligations on tackling carbon emissions, we also support energy-intensive industries. As he said, carbon capture and storage represents a long-term future for coal consumption in energy production and potentially for UK production of coal.

The hon. Member for Hartlepool asked about the case for state aid for UK Coal. This debate is about open-cast mining, but of course we have a long and strong tradition of deep mining. We have received an application from UK Coal for state aid from Government. We are currently considering that application, and I do not want to prejudge any decision.

[Ian Lavery]

That is good news. When will the Government be in a position to reply to that request?

[Matthew Hancock]

I saw it for the first time this week, and it is under active consideration. I would expect to be able to respond in a matter of weeks, certainly before the Dissolution of Parliament.

As the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) said, restoration bonds are not only about open-cast coal mining; they are also about deep mining, as well as things like the fire in his constituency that raged for months and that he and I have discussed before. It is vital to get restoration liabilities and restoration cash tied together better.

The hon. Member for Hartlepool quite reasonably asked about questions of the past and questions of the future. In getting the future right, it is vital that we have a regime, including depositing money in escrow accounts and restoration bonds, that is watertight. On privatisation in 1994, the calculation of the costs of restoration was part of the decision as to how much companies paid for the opportunities they bought when they bought rights to a site. That was taken into account at the time. It is therefore not reasonable to say that money was put into a fund, with the taxpayer paying for the restoration at the end of the process. The money paid to the taxpayer for the coal that was bought, which was then in the ground and was going to be extracted, had set against it the future costs of restoration. That was encapsulated in the cost at which the companies purchased.

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[Matthew Hancock]

The expected cost of future restoration was taken into account in the amount that the companies paid at the time for the right to mine.

We will work with all parties on this. I look forward to working with Treasury civil servants and, I hope, Ministers, but also with Members in the House today, with the Coal Authority, which has an important role to play, and with devolved Administrations and local government. I confirm the offer of the meeting that we discussed earlier this month. I will ask the Coal Authority to make sure that it makes itself available to Members to discuss, in particular, the detailed issue of having the often highly specialist expertise needed within mineral planning authorities to tackle these problems.

I want to turn to the Hargreaves proposal, which was recently discussed in Westminster Hall. The suggestion is that if available resources at unrestored sites orphaned by failed companies could be mined and sold exempt of carbon price support payments, sufficient revenue could be generated to restore the sites to a good standard. The proposal is unusual because it suggests using a tax exemption to pay for a cash obligation. Employment creation and retention and the offsetting of tax generated are cited as additional benefits, above and beyond the core environmental question.

We are working with the Treasury on whether there can be exemptions from the carbon price floor. The Treasury has the lead on the carbon price floor because it is a tax, but that issue is worth considering. The CPF exists to enable us to meet our climate obligations, and it is an important part of our armament for tackling climate change. We have capped the carbon price floor—we have fixed it, so to speak—but I am happy to look at that and to continue to discuss it with my hon. Friends.

[Ian Lavery]

The Hargreaves proposal only relates to Scotland. Is the Minister happy to meet CoalPro, which represents open-cast operators in the UK, to discuss a UK-wide solution based on the Hargreaves proposal?