Carbon Price Support (Land Reclamation)

Mark Spencer Excerpts

Tuesday 6th January 2015 Westminster Hall

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

Thank you, Mrs Main, for calling me to speak. It is a pleasure to speak under your chairmanship today.

Before the demise in 2013 of the two principal operators—Scottish Coal and ATH—the East Ayrshire coalfield produced 25% of all UK surface/open-cast coal, and 50% of that produced in Scotland. Given the history of deep mining, the communities of East Ayrshire have a long standing commitment to the coal industry. So, when the companies went into liquidation, the effect on East Ayrshire was greater than on anywhere else in Scotland, with the resultant environmental dereliction across the coalfield communities of the area extending to almost 20 sq km of disturbed and unrestored land, including 22 voids, 16 of which were water-filled. To put that into some context, the whole of the City of Westminster is just under 21.5 sq km. That gives some indication of the huge extent of the problem in East Ayrshire.

In mid-2013, East Ayrshire council commissioned an independent assessment of the true cost of restoring the land to the level required under the original planning consents; that restoration work should, of course, have been carried out, but was not carried out. The cost was £161 million and Hargreaves has estimated that, as of today, in excess of £300 million of restoration work is required across Scotland. However, the bonds available to carry out such restoration work in East Ayrshire totalled just over £28 million, so clearly in that area alone there is an enormous funding gap. That is the legacy that these communities have been left with, through no fault of their own.

Before I go any further, I would like to say to the Minister that when his right hon. Friend the Secretary of State for Defence was an Energy Minister he was given a map showing the dereliction in East Ayrshire and he was completely shocked. To his credit, he immediately recognised the scale of the problem. So I invite the Minister who is here in Westminster Hall today to visit the area to see the devastation for himself.

At this point, I would also like to say that the Under-Secretary of State for Scotland, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), has been involved in this issue from day one. His constituents are also affected and he has been extremely helpful throughout. No doubt he will wish to discuss this matter with the Minister himself, but I know that he also believes that it should be given urgent consideration.

This is not and should not be a party political matter, although I fear that we have the usual pattern of the Scottish Government seeking to point the finger at Westminster, to take the focus away from their responsibility in this area as far as funding is concerned. I previously secured a debate about the proposal for increased freight charges, which would have adversely affected the coal industry and cost jobs, and I am pleased to say that the Government listened to that argument.

I have also pressed the Government to return funding to Scotland from its contributions to the coal levy. From recent correspondence, we know that the Government do not see that as a possibility, arguing that the matter of restoration is devolved. That is true, but I do not see how it prevents a contribution being made from the coal levy, which Scotland has paid into. Equally, however, it is clear that the Scottish Government should also consider funding for restoration.

[Mr Mark Spencer (Sherwood) (Con)]

I congratulate the hon. Lady on bringing this topic to the House, and I sympathise with her for having to wrestle with the Scottish National party. However, I hope she recognises that of course this issue affects England as well. The Department for Business, Innovation and Skills has been quite supportive, but it is the Treasury where the real challenge lies. We need to get the Treasury to recognise that changing this situation can lead to regeneration of these coal tips and the creation of some nice country parks and other pleasant areas for our constituents.

[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.

--- Later in debate ---

[Matthew Hancock]

Of course, I was going to come on to that point. Action has been taken and needs to be taken through the task force, especially on the employment side. We have to recognise the role that the industry continues to play and has to play in the future. As the hon. Lady said, in particular we have to recognise the role that Hargreaves plays and the significant commitment and investment in the Scottish sector that it made in stepping into the shoes of the failed companies. As she said, it is not the fault of Hargreaves. It is part of the solution and should be thanked for its continuing contribution, along with others, to local economies. Hargreaves provides 500 direct employment opportunities where there might have been none, had it not acted as a replacement for the companies that went bust.

[Mr Spencer]

Since the Minister’s appointment, he has built a long record of knowledge of and support for the coal industry, particularly in Nottinghamshire. Does he recognise that the industry can help itself if the Treasury assists in changing some of the tax laws around the carbon floor price? Can we assist him in lobbying Treasury Ministers and getting that message across to the Treasury?

[Matthew Hancock]

I am glad my hon. Friend said that, because I was just about to come on to that issue. Carbon taxes bear down on carbon-producing industries, and that has an impact on coal, which is at the core of today’s debate. The carbon price floor policy sets out the future cost and the trajectory to 2030. We have brought that trajectory down in recognition of the impact on carbon-intensive industries. The carbon price floor is designed to drive the uptake of low-carbon investment.

The question of whether we should look for an exemption is at the core of the debate on the future. There are a number of different issues, including the question of whether using a tax offset to deal with what is essentially a problem of spending is the best solution. I am happy to meet with the hon. Lady, Treasury colleagues and the Under-Secretary of State for Scotland, my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), whom I spoke to this morning about this issue, in which he takes a close interest. There is also the vital question of value for taxpayers’ money. We are living in times when taxpayers’ money is scarce and there is not much money around.