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Hatfield Colliery Partnership Limited

Volume 597: debated on Tuesday 30 June 2015

I want to update the House on matters concerning Hatfield Colliery Partnership Ltd (HCPL).

The previous Minister of State for Business, Enterprise and Energy, my right hon. Friend the Member for West Suffolk (Matthew Hancock), informed Parliament on 7 January 2015 that the Government have provided HCPL with a short-term commercial loan of £8 million to avert the company’s imminent insolvency at that time. The intention was to provide time for HMG to secure the appropriate legal basis for longer-term support which would allow HCPL to continue operating until 2016.

In May 2015, the Government announced they had agreed to provide HCPL with a longer-term, repayable grant of up to £20 million to enable the colliery to continue operating until its planned closure in August 2016. This support was state aid for which Government have secured approval from the European Commission, a strict condition of which was that the mine does not remain open beyond August 2016.

The directors managed closure plan assumed that replacement contracts from June 2015 onwards would be secured for all their coal output at pricing similar to what had been achieved before. In June 2015 the directors of HCPL approached the Government to advise that the current UK demand for coal was weak with UK power companies already largely fully stocked for 2015.

Since being advised of this position, the Government have done all they can to assist the directors of Hatfield, including reiterating their earlier commitment to provide up to £20 million towards the costs covered by the state aid approval to help the company achieve an orderly and safe closure.

Despite this the directors have concluded it is not economically viable to continue mining and so took the decision to stop coal production on 30 June 2015.

Our priority now is to support the workforce and to close the mine safely.

I understand this is a very difficult time for the individuals affected. The Jobcentre Plus rapid response service will be available to help support Hatfield’s workers into new employment, and to arrange re-training where needed.