Madeleine Moon
Main Page: Madeleine Moon (Labour - Bridgend)(9 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mrs Madeleine Moon (Bridgend) (Lab)
I beg to move,
That this House has considered financial support for restoration of opencast coal sites.
I thank the Backbench Business Committee for facilitating this debate. I also thank Jan Adamson, Councillors Huw David and Philip White and fellow south Wales MPs and AMs, among others, as well as many right hon. and hon. Members who have altered their travel plans to be here today to fight for their communities.
We have a national problem. There are currently 34 open-cast mines across the UK—17 in Scotland, nine in south Wales and eight in England. There are also an unknown number of unrestored and orphaned sites, where developers have declared bankruptcy and disappeared. The fate of all those sites is of great importance. The Coal Industry Act 1994, passed under the Major Government, privatised the remains of British Coal and gave the then Department of Trade and Industry powers to ensure full continuity from the coal corporation to private companies.
In 1995 the then Minister for Industry and Energy, when pressed by my hon. Friend the Member for Lanark and Hamilton East (Mr Hood) on the issue of Coal Authority responsibility, replied:
“I assure him that those matters are being dealt with. The Coal Industry Act 1994 gives the Department of Trade and Industry powers to ensure full continuity from British Coal to the successor companies, which have the same rights and obligations as British Coal. Planning consent and the enforcement of planning conditions remain matters for the planning authorities. With regard to…concern about the ability to meet obligations for opencast sites, the Department checked carefully the financial status of the successor companies as part of the bid process.”—[Official Report, 8 February 1995; Vol. 254, c. 334.]
More recently, in March 2011, my hon. Friend the Member for Aberavon (Dr Francis) asked what assessment had been made of
“the effectiveness of land remediation following the closure of open-cast mining operations”.
He received the following reply from the then planning Minister, the hon. Member for Bromley and Chislehurst (Robert Neill):
“This Department has not carried out an assessment of this type but we would expect mineral planning authorities in England, when granting planning permission for open-cast mining, to set site aftercare and restoration conditions…to secure the high standard of restoration of the land concerned.”—[Official Report, 9 March 2011; Vol. 524, c. 1127-28W.]
Those are mixed messages about the responsibility for restoration.
Yesterday, I received an e-mail from Will Watson, chief executive of Celtic Energy. That company took over 13 south Wales sites in 1994. Nine have completed coaling and been restored, two are working, one pit is subject to a planning application and one, Parc Slip Margam, is a highly controversial site located in my constituency and that of my hon. Friend the Member for Ogmore (Huw Irranca-Davies). When Celtic Energy took over Parc Slip, also known as Margam, it did not provide a restoration bond. According to Will Watson, that was due to the Government’s decision in 1994 to take a larger cash receipt for the sale to the company in return for a 10-year bond-free period.
Nia Griffith (Llanelli) (Lab)
Does my hon. Friend find it extraordinary that Celtic Energy was given an exemption from any form of restoration bond, whereas all the other private operators in the area had to pay such a bond? It made for a completely uneven playing field.
Huw Irranca-Davies (Ogmore) (Lab)
My hon. Friend’s constituents in Pyle, my constituents in Cefn Cribwr—whom she used to represent—and others are deeply affected by this. They think it is totally unjust that the company seems able to walk away from its responsibilities for remediation and doing well by that community. Does she agree that it is astonishing that at some point in the distant past a deal was done—which our constituents regard as a dirty deal—to allow the company to renege on its responsibilities and walk away? It is not good, and it does not reflect well on the Government of the time either.
Mrs Moon
My hon. Friend is right. It does not reflect well on the Major Government or on Celtic Energy, which has had a good reputation in Wales. Now its reputation is deeply tarnished, and I am sure it will want to make whatever restitution it can to restore that reputation because I know that it wants to keep operating in Wales.
Will Watson says that
“had escrow funds been put away for Parc Slip at today’s level of around £10m per year for the years 1994 to 2004, then that fund would now stand at around £155m (assuming it was invested to simply cover inflation).”
My hon. Friend and I would be very confident if we had £155 million to restore that site.
Mr Watson also said that
“the Government in 1994 had £100 million in their restoration fund, (worth around £178 million today) that could have been made available for restoration.”
In his opinion, it seems reasonable to ask the UK Government to contribute to a solution at Margam and potentially at East Pit. If Mr Watson is correct, the Government took money that would otherwise have gone to restoration. There was a significant benefit to the Treasury in 1994. Where did that money go? How do we get it back?
My local residents argue:
“The Coal Authority, the government’s agent which sold the leases and licences was empowered to impose obligations on the private companies to ensure restoration and it failed to do so.”
Can the Minister confirm whether this was the case and why no obligations were imposed? Can he confirm the existence of a British Coal lump sum for this site? Where was it held and when was it imposed? What happened to it and how much was it worth?
The Scottish and Welsh Governments have published papers on failure to restore open-cast sites and talk of a £2 per tonne levy imposed by the Coal Authority. Despite questions to the Treasury and the Department of Energy and Climate Change, I have been unable to clarify if the levy was imposed at Parc Slip Margam, how much was collected, where it was held and which mines were affected.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
My hon. Friend obviously has some knowledge of what happened in the Scottish situation. She will be aware that we have asked for some of the coal levy to be returned for restoration, but the Government have refused to do that. Does she agree that that is unreasonable?
Mrs Moon
I have awful news for my hon. Friend. DECC has informed me—this is such a sad thing to hear—that much financial information was unavailable because it relates to business practices from nearly 20 years ago. I have friends who have their bank accounts from 20 years ago! I find it incredible that the Department does not have records just because this happened 20 years ago under another Government. Unbelievable.
Parc Slip Margam is mostly in the constituencies of my hon. Friends the Members for Aberavon and for Ogmore, but the residents affected are mostly mine. Cynffig Hill is about 300 metres south of the void. The site is over a mile long and half a mile across, and includes a huge void that is filling with water. A pump in an old mining shaft that was supposed to send water into the nearest water course failed to function, and Celtic Energy began pumping on 20 January as the water had filled to 40 metres. When it went above that it posed a risk to the community below.
Mr Watson informed my office that Celtic Energy will be pumping water out of the void for at least three months, and would give three months’ notice before stopping. He stressed this was a good-will gesture. He indicated no liability and that his company would not be willing to continue to incur these costs. The water, I am told, goes through filtering ponds into tributaries of the River Kenfig. Water samples have been taken, although the analysis is not yet complete.
I have to admit family connections to these developments. My husband, when county ecologist for Mid Glamorgan, opposed the extension sought by British Coal in 1993. If only he had been successful. I spoke against the extension in 2007. If only I had been successful. Coaling ceased in 2008. At one point, it was hoped that the problem would be resolved by the opening of the drift mine by Tata. My hon. Friend the Member for Ogmore will remember being at the meeting when that was discussed. Coal from a slip mine into Margam mountain would have put the spoil into the Margam Parc Slip void. That failed to happen.
In 2010, Celtic Energy sold the land rights of Margam and three of the sites to Oak Regeneration, a company based in the British Virgin Islands, for £1 each. The Serious Fraud Office investigated the transfer, but legal proceedings failed twice as they were found to be wrong in law. According to Private Eye, after the sale, Celtic’s owner, finance director, solicitor, assistant solicitor and senior partner—five individuals—received bonuses and loans in excess of £10 million pounds from companies in the British Virgin Isles.
According to Celtic, however, it has no funds available and the restoration has become entirely the legal responsibility of Oak. My local authority, in a report to its development control committee, referred to Oak on 8 January, stating:
“it is…evident that serving an enforcement notice is unlikely to secure restoration of the site, nor do either of the Councils have the financial means behind them to secure the restoration of the site in default.”
Mr Watson yesterday said I was misinformed when I stated on 13 January that in 2010 Celtic Energy had £136 million in a restoration fund, and that the fund had reduced by £63 million by 2011. He said:
“This is simply not correct. The figures you quoted are ‘provisions’ for liabilities on the balance sheet and do not represent assets in any form...The provisions were reduced when the land was sold along with restoration liabilities to Oak Regeneration Incorporated in September 2010. That transaction was the subject of the SFO investigation which has now closed. During the course of the SFO investigation it was not clear whether the transaction had been effective in transferring liabilities and so the accounts were amended to put back the provisions until the matter was resolved. That position will now be re-visited once more.”
Wherever the money is, let us have it back in some form of restoration fund for Parc Slip Margam.
“None of these changes in the provisions in the statutory accounts make any difference to the cash the company is holding, nor to the restoration escrow funds”,
which it claims are £46 million and
“held by local authorities.”
Bridgend county borough council has said that the restoration fund for Parc Slip Margam, which is in an escrow, stands at £5.7 million and that the estimate to secure the full restoration is between £30 million and £40 million. Oak Regeneration has submitted planning proposals, which have been rejected, including for the building of 2,500 new homes, heated and cooled using geothermal energy; a railway station; a new road to the M4; and five years of open-cast coal extraction.
The mining company Hargreaves has proposed tax exemptions, and my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) has argued that these proposals be considered. I do not want to steal her thunder, but I would be interested to hear more about those issues.
Coalpro represents the majority of UK coal producers. It supports any mechanism that helps to restore sites left behind by former operators. Although opposed to the carbon price support mechanism, it is in favour of a short-term exemption if this would ensure that abandoned and orphaned sites are restored for beneficial future use. The industry supports this, which is important, and I look forward to hearing what the Minister has to say.
Huw Irranca-Davies
I commend the forensic way in which my hon. Friend has researched and is explaining this complex situation. It often seems like one of those conjuring tricks with the three cups and trying to find the pea—only in this case, it is money, not a pea. Will she reflect on the fact that although pumping is taking place—temporarily at least—and people should not be worried at the moment, this is not a long-term solution? I hope to hear a way forward from the Minister, because we cannot keep pumping this stuff out when it is so close to the top.
Mrs Moon
My hon. Friend has been sneaking into my office and reading my speech. In fact, when I originally wrote it, I used the words “pass the parcel”, because every Government agency and Department I have spoken to has passed the parcel. It has been shocking.
The scheme will relate only to orphaned restoration liabilities where owners and operators are bankrupt or liability has fallen back on the state, meaning 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. If it is not the responsibility of companies, it cannot be right for the responsibility for open-cast coal sites to be devolved to the Scottish or Welsh Governments, or even to the mineral planning authorities, without the finance also being devolved. That is just not right. As I have demonstrated, the Treasury and its agencies have benefited before and since privatisation. The funding must go with the responsibility.
The problems affect everybody living close to the mines. Peoples’ lives have been blighted by ideologically driven legislative failures. As a Parliament, we have to give people a plan of action and a sense of hope that we are taking responsibility and tackling this problem, and we need a grown-up Government who will co-operate with devolved Governments. Gwenda Thomas, the Assembly Member for Neath, has issued a statement, which I fully concur with, as I am sure my hon. Friend the Member for Ogmore does, calling on Celtic Energy to take decisive action to demonstrate its commitment to restoration. Celtic used to have a reputation in our area as a model of responsible mining. It needs to stand up and rebuild the respect our communities had before it ripped the profits from the valley, endangered local people and walked away.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I hesitate to interrupt the hon. Lady, and I do not want to take time doing so, but she has exceeded the normal time for a speech of this kind, and she will be aware that many of her colleagues also wish to speak. I do not suggest she stops immediately, but perhaps she can draw her remarks to a conclusion soon.
Mrs Moon
Madam Deputy Speaker, you too have been looking at my speech. It is not fair. People are sneaking into my office.
The Treasury has profited. Businesses have profited. Somebody has to hold up their hand and take the moral, social, political, financial and ethical responsibility. Nothing will change unless politicians do that. We must accept responsibility. We cannot let the private companies get out of this with a responsibility-free zone. Inadequate legislation failed; inadequate regulation failed; the mining industry has failed. We have passed the parcel of responsibility for too long. Let us stop the music, and make the changes our communities need, expect and deserve.
Matthew Hancock
That is exactly the issue at hand for the mines that are reaching the point at which they need restoration. The liability lies with the company, but, as we have heard from the many testimonies today, getting it to act is too difficult. That is the challenge that we face.
I turn now to the future, because the question that we all want to answer for our constituents is how we can solve this problem.
Mrs Moon
Celtic Energy is saying that it was given a 10-year exclusion from having to carry out any restoration because it paid a higher price for the licence. In 1994, the Government said that it did not have to put money aside. Is the Minister saying that it is wrong, and in fact the price it paid implied that it had to put more money aside rather than put no money aside?
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.
Mrs Moon
This has been an excellent debate. We have been told that good and responsible companies are making tremendous efforts on restoration, and some sites are an asset in their local communities. We have been told not only that we need restoration bonds, but that they must be at the right level. We have heard about far too many eyesores that have blighted lives and communities.
The problem is poor legislation, which is exploited by cowboy builders. Now is the time for joint working, and for accepting that the problem exists and that solutions must be found. I am worried that we seem to have moved from pass the parcel to hunt the thimble. Where is the money? Money has clearly been generated, but we need clarification of how we can make it available to the local authorities that have been left with the problem of restoration.
Question put and agreed to.
Resolved,
That this House has considered financial support for restoration of open-cast coal sites.