UK Coal Operations Ltd

Nigel Adams Excerpts

Wednesday 6th November 2013 Westminster Hall

[Ian Lavery]

I understand exactly what the hon. Gentleman is saying, but I think that there is a moral obligation. I will come to why I think there is more than a moral obligation.

Some 1,600 to 2,000 people will be affected, including widows—women whose husbands died underground—and, as my hon. Friend the Member for Mansfield explained, those who left the industry under ill-health retirement. For some of the people who had accidents and retired, the judge agreed that they would have compensation, but that was sometimes reduced to the amount of concessionary fuel they would receive well into the future. All those things need to be looked at.

[Nigel Adams (Selby and Ainsty) (Con)]

A few seconds ago, the hon. Gentleman hit the nail on the head. We are talking about 1,600 to 2,000 people in this country, so the scale is not enormous. The amount of money could be found, and I am hopeful that it will be found. I passionately believe that the Government have a moral obligation to step in and right this wrong.

[Ian Lavery]

I sincerely hope that the hon. Gentleman is right, because, as the Member who represents the former Selby coalfield, I have in my constituency more men, women and, potentially, widows, than any other area in the national coalfield.

We must consider the moral obligation. No Government of any political persuasion or colour should have any problem with giving hard-working people what was agreed when they started employment. That is the issue. Some people suggest that there is an obligation to the taxpayer—there is, but that can easily be overcome.

[Ian Lavery]

I sincerely agree with my hon. Friend’s comments, and I want to turn to how the Government could approach this important issue. I intended to read out section 19 of the Coal Industry Act 1994, but my hon. Friend has already done so. It clearly begins:

“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 any of the following, that is to say—”

I will not ramble on, as the provision has already been placed on the record, but it is from the Coal Industry Act, and we have to ask why it is there. It is there for a reason—to tackle the problem we face today. It is not there for any other reason. It is not there because it was thought that things would not happen, but because of the debate that was had at all stages of the privatisation of the coal industry in 1993-94. I urge the Minister to look at the situation and take advantage of what the Secretary of State is allowed to do in accordance with the 1994 Act. The matter was discussed at great length, and it is very interesting to read. People should take the opportunity to read Hansard at all stages to see how much of the debate was taken up by this issue, which is very important for many miners.

If the industry had not been privatised, such a situation would not have arisen. The only people who are suffering are those who have worked hard in the industry. It is not the Government who will suffer and it is not UK Coal, which has moved on to pastures new, that will suffer— it is the 2,000 people in the mining communities. As politicians, we have a responsibility to try to help those people.

We have already discussed the vulnerable people in the community—the widows and the elderly people—who have served a lifetime in the industry. They do not have any ability to earn in the future. As the hon. Member for South Derbyshire (Heather Wheeler) mentioned, many of those people live in remote communities. They have only coal-fired power; they do not have gas. How will they afford to renew their heating systems and, on top of that, pay the horrendous hikes in prices for gas and oil, which we are discussing later today in the main Chamber? It is just impossible for them. We should not be putting such a burden on to people who have given their lives not just for the coal industry but for the people in this country.

People face a dilemma: do they get gas, oil or electricity? The price is all that they can look at—and whether they can afford it. We have problems with miners who, having started at the pit on the same day and worked side by side, have finished work under different circumstances. They have all put in exactly the same amount of time, and, under the national concessionary fuel scheme, had a lifetime entitlement to coal. Now, because of UK Coal’s failure, some people have that allowance and some people do not. It is discriminatory to say the least. How can UK Coal get away with creating such social destruction? It abandoned the coal industry one day and moved on to pastures new, leaving carnage behind. It left people in the mining community to pick up the pieces from big business, and they will fail. As politicians, have we not got the common decency to put that right?

A number of firms in the north-east are owed huge amounts of money by UK Coal, which moved on the next day to secure Thoresby, Kellingley and up to six open-cast mines. That was welcomed, but we should not look at that and say it was brilliant and leave the other people behind to pick up the pieces. That is just not acceptable.

UK Coal owes lots of money to companies in my area. It owes M J Hickey, a plant hire firm, £30,000; that could put the company out of business. It owes Northumberland county council £620,000, which will put huge strains on the local community. This is not good enough. I agree with what the hon. Member for Sherwood (Mr Spencer) said; of course we wanted to secure up to 2,000 jobs. I compliment the Minister on his assistance in that regard, because it is just so, so important. However, we must look at what is left behind.

[Nigel Adams]

I could not agree more with the hon. Gentleman. Lots of companies have been left with huge debts following the restructuring of UK Coal. Perhaps we need time to look at the pre-pack administration and the way in which large companies restructure following failure. A cleaning contractor in my constituency is thinking of getting out of the business because UK Coal at Kellingley has left unpaid a debt of several thousands of pounds, which will cost many, many jobs. The time has come for the Government to look at how companies can be operating one day and then be collapsing the business, going into pre-pack and reforming the following day.

[Ian Lavery]

Absolutely. That is the point I was making, so thanks for that. With regard to UK Coal, our fear is that there will be pennies left for people left behind. At the same time, as the hon. Gentleman has said, UK Coal is forging ahead under a new name, with the directors making fortunes and the company earning profits. It just cannot be right.

With regard to the obligation to the taxpayer, I have a letter from the Minister who wrote to my hon. Friend the Member for Barnsley Central (Dan Jarvis) about the concessionary fuel. He said:

“I do not believe it would be fair to expect the tax payer to meet these additional liabilities on an ex gratia basis.”

That is terrible and it is not acceptable. The Treasury has creamed off—some people say stolen—up to £4 billion from the pensioners in the mineworkers’ pension scheme and other pensions from the surpluses that have been generated since privatisation. Is that not good value for the taxpayer?

I am talking about £4 billion, and it is rising as we speak. If we think that it is good enough for the taxpayer to continue to get a feedback in financial incentives from the mineworkers’ pension scheme, surely consideration should be given to paying 2,000 members concessionary fuel, which was part of their arrangements when they started work. I had said that the Government should get £2 billion from the pension schemes. That figure is now £4.4 billion.

As I am sure the Minister is aware, UK Coal was fined £200,000 only two weeks ago for an underground accident that killed an individual. It was also fined £50,000 for failing to prevent an underground explosion. Those moneys will be paid by the administrator, but what it means, if this goes to the nth degree, is that the people on the list—the 2,000 beneficiaries who hope to get something from the administrator—will be put into the same pot as the £200,000 fine for killing somebody and for an underground explosion.

What people need to realise is that the widow of that miner who was killed—the reason why UK Coal was fined £200,000—could suffer as a consequence. She could get reduced finances from her benefits to cover those fines, which were imposed for killing her husband. That cannot be right, can it? I hope that people understand exactly what I am saying. If not, I will try to explain it in more detail later. Basically, the situation is so perverse it is unreal.

The Government have an option. They have a responsibility under the Coal Industry Act 1994 to take care of those who are set to lose out and to correct an unjust situation that could cause financial problems for more than 2,000 people. I take solace from the reply that the hon. Member for Selby and Ainsty received from the Chancellor yesterday. The Chancellor said that he understood the situation—I cannot quote him exactly—and that he hoped that there would be good news soon. I hope the Minister can tell us what that good news is or at least what we can expect.

In summary, we have been talking about not free coal but an entitlement. It is an implied contractual obligation and an arrangement agreed and forged over generations of coal miners. I ask the Minister to urge the Government to treat those individuals fairly and in the spirit intended in the Coal Industry Act.

--- Later in debate ---

[John Mann (Bassetlaw) (Lab)]

I congratulate and thank my near-neighbour, my hon. Friend the Member for Mansfield (Sir Alan Meale), for calling for and securing this timely debate. I hope that the Minister, who is listening hard to his party’s MPs, is already mulling over how the Government’s commitment to abolish green taxes will only mean anything in reality when Harworth colliery is reopened and re-mined. The coal there—there is enough for at least 30 years, and the possibility of more, if more shafts are sunk in the mine, which is on my constituency’s Lincolnshire border—would provide him with the perfect opportunity to demonstrate that the Government are serious about that commitment.

I hope that we will not have to take legal action for one sub-group of those affected by the issue that we are discussing—the former miners who have had accidents, and the widows of those who died in accidents. There are up to 2,000 of them; my hon. Friend the Member for Wansbeck (Ian Lavery) has already spoken about them. Some legal settlements relating to accidents incorporated the issue of concessionary coal, and therefore the obligation for that sub-group or subset will almost certainly fall legally on the Government. That is because those people who had accidents—by definition, through no fault of their own—including some of my constituents, settled for an amount from the National Coal Board based on concessionary coal being part of their compensation. For that subset of people, the Minister has no choice. I hope that common sense will be used, and that they do not have to waste our time and his, or pay legal costs to pursue compensation through the courts.

I will leave some time for my right hon. Friend the Member for Rother Valley (Mr Barron) to speak. However, I must mention the issue of gas. In Bassetlaw, which is in north Nottinghamshire, 6,000 properties are without access to gas, so using gas is not an option for their owners. Indeed, some of those properties, which include terraced properties, could not safely have oil either. With fuel poverty, sometimes a calculated choice is made, but often there is no choice at all. Indeed, I and others have battled to get gas to particular streets, in order to provide that choice for those who want it, but the costs involved are prohibitive, because installing a gas main is not the cheapest thing in the world, and villages may be many miles away from other places. For many, when it comes to fuel poverty, there is no choice. The most vulnerable, and the most vulnerable to fuel poverty, are among my constituents.

Further clarification is needed, because the term “concessionary coal” suggests a give-away or perk, but the coal is part of the employment conditions and part of the pension. A good comparator would be Ministers and Members of Parliament who require remuneration for a second home. They need a second home to do the job and rightly are not taxed—indeed, they get the money back—on something that is legitimately used to do the job. It is right and proper that that is not a taxable benefit. There are many other areas of life where there are similar comparators. Exactly the same applies to concessionary coal. It is not a perk; it is part of the retirement pension.

I have only two more things to say, but one will take a little time. First, though, I want to refer to the letter recently received by my constituent, Mr Philip Hall of Manton, who is one of those affected. Mr Hall has received what has twice been described by the administrator as a “generous offer”. He is being offered two sacks of coal—not a week, a month or a year, but two sacks of coal for the rest of his life. He wants me to make the point that he does not feel that that is reasonable or generous. He feels that it is an insult.

[Nigel Adams]

The hon. Gentleman makes a very good point. I, too, have been made aware by one of my local retired miners that they have been contacted, I understand, via UK Coal and offered coal at a price that is higher than they would pay if they went down the local coal merchant’s to buy it. It seems a rum do, if the hon. Gentleman does not mind my saying so.

[John Mann]

No wonder the administrators are calling Mr Hall’s offer generous. By comparison it is, but a country in which people living in fuel poverty are given two sacks of coal for life, for their pension, is not the kind of country that we aspire to have, or that the Minister aspires to have. I am sure that he would not want that to be part of his legacy as a Minister.

The second and final issue of substance that I want to raise is a matter that I have referred this week— the Minister has been copied in to the letter; it will be arriving—to the Serious Fraud Office. I hope that the Minister, not now but in the next few days and weeks, will investigate this fully. I do not believe that the splitting up of UK Coal has been done properly. I am not referring to the old logo being used in adverts at the moment, because that is peripheral. The company was split in two on 10 December. The land assets were put into a separate company called Harworth Estates Property Group Ltd, and that is where the value is—the huge value of those land assets—because this Government and Her Majesty’s Opposition are keen on house building, and they want the houses built in places such as Harworth. These are former coal sites, brownfield sites. There would be consensus, if the relevant Ministers were here, on building housing in these places. They would be saying, “Yes, this is exactly the kind of land on which we want to see lots of houses.” It is a huge asset—a fortune—that this company is sitting on.

I am not an expert on the legalities of splitting up companies, which is why I have referred the matter to the Serious Fraud Office and to the Minister, but I am pretty sure that people have to be honest about the values of companies. On 10 December, the company was split. I have with me a planning application dated 14 December. The planning application is from UK Coal Mining Ltd—a company that does not appear to exist any more or, if it does, is the one that we are talking about today, which owes the miners the money and the coal. The application is dated 14 December—four days later. This was over a weekend, so it was even fewer working days later. It is a planning application to Bassetlaw district council for 996 houses and other employment opportunities that was put in by this company. The profit on just this one piece of land is worth more than the money required for these miners and widows for the rest of their lives, and the application was put in a few days later.

The reason why I have referred the matter to the SFO is that things have to be done in the open when company changes are taking place, as far as I am aware, and I see on the application that the box has been ticked, and the officers have been named, for pre-planning application discussions. A little fee has been paid to Bassetlaw council, and there have been discussions with three named officers. Documents that I have seen demonstrate that the applicants are told that they will get approval. They know that the council, which is required by Government to have housing, wants housing built in that place. These people put the application in, having split up the company.

Which half of the company will see the profits from this when the application is in the name of UK Coal Mining Ltd? This seems to me very straightforward, and this is where we will need Government intervention. It will need to be the bit that owns the liability, because it seems to me that that is the name in which the application has gone in. It is the basis on which these people split the company up, and the basis on which they approached people, including me, to argue the case for developing the land assets in order to allow the mining operations to continue.

I went to my council of many years and persuaded it that what we want is not just a coal mine in Harworth. We want the land used for industry and for housing. We want a deal doing to allow the industry to survive, and to ensure that it is meeting its proper obligations to the retired. That is exactly what I did, in exactly those terms.

The company restructured just before it put in the application. I have a redacted copy of the application, but I see that it was put in by the applicant just days after the split-up. If that is not fraud, I do not know what is. These people have split a company up, knowing that there is a hidden value there—because they have had the discussions with the council—that needs to be built into the calculations. That value should be with the part of the company with the liability. They should not be allowed to get away with this. I am looking forward to hearing how the Minister will tackle his obligations and give the guarantees, in the language and detail that the Chancellor of the Exchequer used yesterday, and also how he will hold to account these people, who have stolen this asset from the taxpayer, miners and former miners, and ensure that they do not get away with it.