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Orphaned Open-cast Mines

Volume 599: debated on Wednesday 9 September 2015

[Philip Davies in the Chair]

I beg to move,

That this House has considered Orphaned Opencast Mines.

I am grateful for your chairmanship today, Mr Davies. This will be quite a complicated discussion, because I am aware that several colleagues from other areas of the United Kingdom want to take part in the debate. I have said that I will take one intervention from each of them so that they can be engaged, but I feel that it is important that we move forward in tackling this issue.

This is my fourth debate on the subject, in which there is cross-party interest. I am so sorry that I did not look for a 90-minute debate or another Backbench Business debate, because the level of interest would have made that feasible. The Minister is the third Minister I have discussed the problem with. Let us hope that this is the last debate needed and that she is the one who will finally address the problem of open-cast sites, so that communities up and down the country can at last feel that their problems are being addressed and that help is at hand.

Equally, let us hope that the companies that have abandoned sites and not completed their commitments to restoration understand that they cannot ravish the countryside in the name of profit and greed and then simply walk away, leaving their responsibilities for others to take on and finance.

It is a pleasure to serve under your chairmanship, Mr Davies, and I congratulate my hon. Friend on securing the debate. I agree entirely with her point about land restoration and companies not running away from their responsibilities. Does she agree that we must also ensure that the application process is a broad one, which takes into account public opinion and anticipates future problems?

I assume that my hon. Friend is talking about the need to take into account public opinion in the restoration process. That is absolutely critical. My community of Cynffig Hill are very clear that they want the void on the Parc Slip site to be filled in, because they think it is highly dangerous, and any restoration must include that.

The Coal Industry Act 1994, which received Royal Assent 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. The Department committed to checking carefully the financial status of successor companies as part of the bid process. Too many communities have found those to be empty promises, and the result has been environmental devastation, pollution and failure.

In the case of Parc Slip, the company that eventually became Celtic Energy bought the site with the inclusion of a 10-year restoration bond-free period. For 10 years, no money was put aside for restoration, the company having paid up front to the Major Government a sum that was, it argues, to include the cost of that 10-year restoration. The Government took the sale money and coal levy payments for 13 years; Celtic took the coal; and the communities of Margam, Cefn Cribwr, Cynffig Hill and Pyle have been left with the consequences.

Parc Slip is mostly in the constituencies of my hon. Friends the Members for Aberavon (Stephen Kinnock) and for Ogmore (Huw Irranca-Davies), but most of the residents affected by the site are in Cynffig Hill. Most of them live about 300 metres south of the void. The site is more than a mile and a half long, and half a mile across. It includes the void, which contains foul water that rises and falls with the seasons. At one point this winter, there was huge fear that the void would overspill and water would cascade down into the community in Cynffig Hill.

After further planning applications, an escrow account was belatedly established, which contains £1.5 million. However, the full restoration costs of the site are estimated at £57 million. Roads, footpaths and farming land have been lost, and promises to restore them and sell back the farmland have been reneged on. I do not intend to repeat the horrific story of Celtic selling off its restoration liabilities to Oak Regeneration, which is based in the British Virgin Islands, and the subsequent dispersal of £73 million elsewhere in the company—millions of pounds that could have paid for the restoration went to pay those involved in establishing paper offshore companies.

The Serious Fraud Office and the judiciary have also failed my community. In February 2014, fraud charges against six individuals, including members of Celtic Energy, were dropped. They had been charged with conspiracy to defraud Neath Port Talbot, Bridgend and Powys Councils, as well as the Coal Authority; and with

“deliberately prejudicing their ability effectively to enforce obligations to restore cast mining sites to open countryside and/or agricultural use”.

That relates to the Oak conspiracy.

Mr Justice Hickinbottom said that there had been no economic injury to the local authorities or the Coal Authority. He said that although the transactions may have been dishonest, they were not illegal, and that Celtic was obliged to restore the land to countryside and agricultural use once mining was complete. I cannot begin to tell the Minister—or you, Mr Davies—how that decision is viewed in Cynffig Hill, or indeed in Cefn Cribwr or Margam. It is felt that everyone has turned their back on their responsibilities to this site, and the community is left to live with the most horrific situation.

According to the results of the court case, Neath Port Talbot and Bridgend Councils were not adversely affected, but the reality is that they have been gravely adversely affected, because they have no funds at all to restore the land. Bridgend Council has had a £50 million budget cut. Both planning departments failed to protect the local community over a number of planning applications and conditions applied. One thing is clear, however. Whatever restoration comes out of any discussions between the planning departments and Celtic—however minor the results that £5.5 million can achieve—the void must be made safe.

I congratulate my hon. Friend on securing this important debate, and I thank you, Mr Davies, for your chairmanship. Does my hon. Friend agree that the situation has now become a serious health and safety issue? Whatever the questions around who owns what—is it Celtic? Is it Oak Regeneration? It seems as though we will be constantly bamboozled by those two companies as they sneak away from their responsibilities—it is for the Government to take responsibility for the health and safety of my hon. Friend’s residents and of others in the surrounding areas. The situation is a ticking time bomb. Something needs to be done, beyond economic and small-scale political considerations, because we are talking about the health and safety of human life. We need to see the matter in that context, and urgent action is required by the Government immediately.

I absolutely agree with my hon. Friend. I am talking today about the open-cast coal site in Parc Slip, but I am sure that across England, and particularly in Scotland, there are sites that are equally dangerous and hazardous to local communities.

I congratulate my hon. Friend and neighbour on astutely and carefully laying out the case as it is. Most people have run from any liability or responsibility, and it is not right that this now falls on local taxpayers or the Welsh Government. There needs to be a solution. I constructively suggest that she, the people involved and the Minister consider a proposal such as the one suggested by the Royal Society for the Protection of Birds and others for some sort of levy to address those sites where no bond can be found, where no money has been put aside and that are sitting there presenting a real danger to the local public, as well as being environmental disasters.

Yet again, my hon. Friend, my constituency neighbour, has been sneaking into my office and reading my speech. I accused him of that the last time I secured a debate on this subject, and he has done it again. He cannot be trusted.

I congratulate the hon. Lady on her hard work on this issue, on which she has secured many debates in Parliament. Further to the point raised by the hon. Member for Aberavon (Stephen Kinnock) and the hon. Lady’s point about health and safety, is it not true that the operators are blasé? The restoration plan for the massive development at East Pit mine, on the border between my constituency in Carmarthenshire and Neath Port Talbot, revolves around building a lake in the hole in the ground following the completion of mining activities. That is clearly not good enough, is it?

I agree with the hon. Gentleman that it is not acceptable. The water, certainly at Parc Slip, is foul. It is rain-fed, and there is no way of cleansing it. There is a huge risk of children seeing the water as somewhere to go, have fun and swim. Depending on the level of the water, they are at grave risk of injuring themselves as they try to gain access, which is a real problem.

I echo the hon. Lady’s comments. Although I am a new Member, I know about her hard work over the past couple of years. On health and safety, does she agree that the only way of addressing the situation, including the environmental concerns, is through some form of restoration? The only way that can be achieved is through some sort of UK Government measure. Local authorities do not have the money. The restoration of my local authority’s sites is estimated to cost up to £200 million, and the authority faces a £35 million budget cut over a five-year period. The devolved Administrations are suffering budget cuts. The UK Government have received the main tax income over the years, and a UK Government-driven scheme could target the appropriate sites across the UK.

As I have already said: Westminster Governments have taken money from the sale of the sites; Westminster Governments have taken the coal levy, and Westminster Governments have failed to ensure through legislation that companies are restoring the sites. In the case of Parc Slip, the 10-year bond-free period was an unmitigated disaster. The Welsh Assembly Government have lost £1.5 billion in funding. They have had no financial gain from Celtic’s bond or the coal energy, and they do not have the powers to place limits on companies or to raise funds in Wales to do any of this work.

When these companies that have abandoned their responsibilities make subsequent planning applications, or take the form of another company, I hope that the Welsh Assembly Government or the Scottish Government will be able to say, “No. If you want to work and do business in our communities, you have to meet your responsibilities. Your reputation is your bond. Never mind any deal that you did elsewhere.”

That leaves Her Majesty’s Government. Following my first two debates I met the right hon. Member for West Suffolk (Matthew Hancock), who was then the Minister for Business and Enterprise and the Minister of State, Department of Energy and Climate Change. I know him to be an honourable man, and in a meeting literally days before Parliament was dissolved he told me that, over the general election period, civil servants would be putting together a plan to cover all the orphaned coal sites across the UK. He acknowledged that there was a major problem and said that it would be addressed by whatever Government, of whatever form, was formed following the election.

Sadly, the right hon. Gentleman moved, but we had a new Minister for Small Business, Industry and Enterprise, the right hon. Member for Broxtowe (Anna Soubry). I met her, and she promised to take an active interest. Sadly, the issue was then moved to the Department of Energy and Climate Change, and it has taken me five months to secure this debate. The Minister of State, Department of Energy and Climate Change has also generously agreed to meet me, and hopefully other Members present, after this debate so that together we can work out a solution for all our communities, which is how we need to move forward—through a joint approach.

There has been one change since March in relation to Celtic. Consent for a further extension to East Pit, which is in the constituency of my hon. Friend the Member for Neath (Christina Rees), was gained under the guise of the “lakes development.” The development significantly reduces Celtic’s restoration obligations from £115 million to £23 million. The section 106 agreement for the new consent would not otherwise have been agreed—I am sure she will correct me if any of this is incorrect. The freeholds of East Pit, Selar and Nant Helen have been returned to Celtic. It is therefore possible for Oak Regeneration, in the right circumstances, to move responsibility for restoration back to Celtic. Oak Regeneration has not restored the rights to Parc Slip to Celtic, and I hope we will work together to ensure that that happens.

I congratulate my hon. Friend on all her hard work. Although I represent Neath, I was born and brought up in Cynffig Hill, which is close to my heart.

Celtic has made a planning application to restore East Pit, but people do not want it to be restored in the way Celtic has proposed. They do not want a lake or a hotel up there. There is also a balance of jobs. By again setting work out there, jobs are saved. I hope we will have a similar situation with Parc Slip in the future, and I will help in any way I can.

I thank my hon. Friend.

We now come to the Government’s plan. Where is the plan that we were promised would be in place after the election? How do we move forward? How are Celtic and other companies to be held to account? What role does Her Majesty’s Revenue and Customs play in examining the movement of money that would have been used for restoration? What powers does the Minister have to see the return of the freehold of Parc Slip to the ownership of Celtic? Has the Minister considered the establishment of a restoration investment fund financed through a proportion of carbon price support revenue from coal generation? That approach would support restoration jobs and maximise benefits for the community and the environment.

There are also suggestions for a carbon price support exemption for coal extraction at sites with legacy restoration problems. That proposal is opposed by the RSPB, as my hon. Friend the Member for Ogmore and others mentioned, as it poses additional risks. I hope the Minister is willing to work with us all to find a solution. All these communities have given money and coal and have sacrificed their environment to the wellbeing of the UK. It is now time for us to acknowledge what they have done and take up our responsibilities here in Westminster.

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Bridgend (Mrs Moon) on her efforts in getting the debate on this very important subject. She will be aware that I have also met Welsh Minsters to discuss the topic. I am delighted to be meeting her and some of her constituency colleagues later today.

I fully appreciate the concerns of hon. Members and their local communities about the lack of restoration work at the former open-cast sites. I can understand that they are looking to local and national Government to address the remediation of the sites so that they can become local assets. My office has looked carefully at what was said by the previous Energy Minister, and I can confirm that he agreed that the Treasury and the Department for Business, Innovation and Skills would look at potential solutions, including tax exemptions. To clarify the situation, the Exchequer Secretary sent a letter today confirming that a tax exemption would not be possible for future coaling in those open-cast mines.

As the hon. Lady explained, of particular concern in Wales are the sites that transferred at privatisation in 1994 to the Welsh successor company to British Coal. The new company acquired a number of operational sites and also British Coal’s land ownership and planning consents at a number of “prospective” sites. Having developed and worked those sites for several years, the company transferred the freehold ownership of the remaining sites to another company, which is registered in the British Virgin Islands. As I understand it, that company has taken the view that they cannot afford to restore some of the sites unless they are awarded planning consent to undertake further surface coaling. That of course places the local authority and the Welsh Government in a very difficult position. On the one hand, there is local resistance to yet more coaling in the area and on the other hand, any attempt to enforce restoration risks precipitating the insolvency of the company involved. Such an insolvency could allow the liquidators to “disclaim” the land assets, rendering them effectively ownerless; the land would be left unrestored unless there were costly public sector intervention.

As set out by the Prime Minister and in the Wales Bill announced in the Queen’s Speech, the UK Government are committed to delivering extensive new powers to Wales, building on the Government of Wales Act 2006, though which the National Assembly for Wales took on responsibility for town and country planning. As the hon. Lady knows, part of those responsibilities is the need to meet the liabilities, both future and historical.

Obviously the issues do not affect communities only in Wales; in Scotland and England there are other examples, and we can all learn from each other’s experiences. One such experience is that of Northumberland County Council, which in July this year approved an extension to the existing Potland Burn open-cast site, so that UKCSMR Ltd—the not-for-profit company established to deal with a number of UK Coal’s mines—could mine an additional 164,000 tonnes of coal and 50,000 tonnes of brickshale, to help meet the financial commitment of restoring the site.

I listened carefully to the hon. Lady. I truly admire her strong support for her constituents. Although I appreciate that hon. Members and their local communities will be disappointed, I find it difficult to see that it would be right for the Government to intervene in Wales while there continues to be a solvent site owner and while discussions with local planning authorities are ongoing. I am looking forward meeting the hon. Lady, along with the hon. Members for Ogmore (Huw Irranca-Davies) and for Aberavon (Stephen Kinnock), after the debate to discuss the matter further. That will follow on from the meeting I had with the Welsh Government Minister for Natural Resources recently, at which I offered the support of my officials to look at other private-sector led possibilities to address the funding required.

The Minister still has not addressed the fact that a 10-year bond-free period was given to Celtic, with an advance payment made to the Major Government, which would otherwise have been put into an escrow account that would have paid towards the restoration. Some of the money for restoration rightly rests with Westminster because the Government had the money for restoration in advance.

I would have to take up that specific point separately with the hon. Lady. It is not something that I particularly addressed. Obviously, she is telling me that, and it may indeed be the case, but I would want to look into that carefully with the Department.

My officials will shortly visit Wales to see one of the sites for themselves and have discussions with interested parties. I am sure that the hon. Lady will want to be involved with that.

Many of the problems our communities experience are a result of the privatisation of coal by the Coal Industry Act 1994 and the fact that the restoration protocols were not watertight. The UK Government have been receiving the revenue for the Treasury from the mining activities, so I find it very difficult to understand why the Minister thinks responsibility falls on the Welsh Government.

Governments do not allocate specific revenue lines to specific activities. I do not accept the premise of the hon. Gentleman’s point.

Importantly, my Department’s non-departmental public body, the Coal Authority, now provides to local authorities its expert advice on calculating the level of bonds required for future surface mine operations, to ensure that restoration costs are covered should the mining company in future no longer be in a position to carry out the work. The Welsh Government have recognised that work. The Minister for Natural Resources announced in April 2015 that the authority would continue that work and provide further advice on active surface mine sites in Wales. The authority is also working with the coal industry, national Governments and local authorities to provide the specialist skills needed to manage sustainably the risks presented by the decline of the industry. The Government have done as much as possible to support the coal industry throughout its recent challenges. They have provided financial support to help UK Coal and Hatfield colliery, for example, with their efforts to avoid insolvency and achieve a more orderly closure of their deep mines, and with the impact on those directly affected.

With the closure of Thoresby and Hatfield earlier this year, and impending closure of Kellingley later this year, surface-mined coal is now our major remaining source of indigenous supply. Production of surface-mined coal has been relatively static over the past four to five years, when it overtook deep mine production as the majority source. The future of the industry is closely linked to that of the power sector. Coal generation has been a critical element of our electricity generation mix for a long time. As hon. Members know, there will be no long-term role for unabated coal as we move to a low-carbon energy environment, and the Prime Minister has publicly pledged to end its use for power generation. As we move to decarbonise the power sector substantially, the role of unabated coal will diminish. Coal supplied 29% of our electricity in 2014, which is down from 40% in 2012. We expect that trend to continue.

I presume that the Minister is aware that in the current climate most coal burned in the UK is imported from Russia and Colombia. There is therefore still a market for UK domestic coal. Moving towards carbon-free energy provision in the future is not necessarily an argument against further coaling in the UK at the moment.

I thank the hon. Gentleman; I completely accept his comments and I will address his point.

Any longer-term role for coal will be dependent on the successful deployment of cost-competitive carbon capture and storage. The Government have put in place one of the most comprehensive programmes on CCS in the world; we have committed £1 billion to our CCS competition, plus operational support under contracts for difference. There could still be demand for coal in the UK power generation sector in future, but, unfortunately, continued demand for coal for power generation has not necessarily translated into opportunities for domestic production, as the hon. Gentleman points out. The industry as a whole is in decline, with indigenous production at less than 12 million tonnes in 2014—around 95% lower than the levels some 60 years ago.

That point brings me back to the heart of the matter we are debating today: balancing the challenges facing the industry going forward and addressing the significant legacy it has left behind. There is an important role for those involved in the industry in achieving that balance. I assure the hon. Lady that the Government will continue to provide support and advice wherever we can.

Question put and agreed to.