Hatfield Colliery

Angela Rayner Excerpts

Thursday 2nd July 2015 Commons Chamber

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

I congratulate the right hon. Member for Doncaster North (Edward Miliband) on securing the debate. I also pay tribute to all the men who have served at Hatfield and who now face the end of that work, and to their families. I say “served” because there is a service in the working of coal, especially when it takes place underground in a deep pit.

I absolutely understand about the age of those men, and, as the right hon. Gentleman knows, I understand—perhaps better than many Members, including those on the Opposition Benches—the effects of coalmining, and of the closure of a mine, on a community. I was brought up in Worksop, next door to Manton colliery, and I went to the comprehensive school that served the Manton estate. Because of my background, I fully understand the huge sacrifices made by men when they work underground. I will be frank: they are indeed lions, often led by donkeys in my experience.

I have never understood, however, why there has been such an over-sentimental attachment to working underground in, often, the most appalling conditions. As a girl, I was never allowed underground, but at Manton we built a coalface on the top: we could all visit, and see the photographs and understand the experience of men who were stripped to the waist and often worked squatting for long shifts in the most appalling conditions, as these men will have undoubtedly done at some stage in their lives. It is indeed darned hard work and it is a service.

I want to make it absolutely clear, however, that the right hon. Gentleman is effectively saying that millions of pounds of taxpayers’ money should now go, and continue to go, to keep open this mine until next August even though, unfortunately, it has failed to secure a single contract, despite all the hard work and efforts of its board and the will and determination of all those involved in the pit.

[Angela Rayner (Ashton-under-Lyne) (Lab)]

My right hon. Friend the Member for Doncaster North (Edward Miliband) talked about the economic benefits of keeping the mine open at the moment. The Minister’s earlier rhetoric was really positive, but what comes out of this same old Tory Government are ideological attacks on the miners. When will the Government give them a break and give them what they deserve?

[Anna Soubry]

I am afraid I am going to treat that contribution with the contempt it deserves and will continue with my speech.

We have made a commitment, and this is what we have done. In May 2015 the Government announced we had agreed to provide Hatfield with a longer-term repayable grant of up to £20 million to enable the colliery to continue operating until its planned and agreed closure in August of next year. This funding is state aid which has been approved by the European Commission. Further funding would require further state aid approval.

Last week the directors of Hatfield Colliery Partnership Ltd told my officials they had been unable to secure sufficient customers for their coal, thus calling into question the viability of the original closure plan. Since being advised of this position, the Government have done all we can to assist the directors of Hatfield, including reiterating our earlier commitment to provide up to £20 million to help the company achieve an orderly and safe closure, and accepting that this funding is, in the light of developments, now unlikely to be repaid. Despite this, the directors concluded it was not economically viable to continue mining and so took the decision to stop coal production on 30 June. It was their decision.

To understand the cessation of mining at Hatfield, it is important—[Interruption.] No, we did not pull the plug on it; absolutely not. We said we would give £20 million. We will continue to give up to £20 million. The decision was taken by the directors because they failed to secure the contract. This is the history, which I hope the hon. Member for Hemsworth (Jon Trickett) will listen to.

Hatfield’s difficulties go back some time. I believe it closed in 2001 and 2004. Most recently it entered administration in 2010—[Interruption.] If the hon. Member for Ashton-under-Lyne (Angela Rayner) continues to mutter in the way she is doing, I will take great exception, especially if she makes sexist comments.

[Angela Rayner]

rose—

[Anna Soubry]

And no, I will not give way. I have already heard what the hon. Lady has to say.

Hatfield was restructured at the end of 2013,and in September 2014 had to secure a £4 million loan from the NUM to allow mining to continue. Owing to the continued deterioration in world coal prices, together with production issues, the NUM funding was fully utilised by November, so all that money had already been spent.

Unable to secure further funding elsewhere, Hatfield approached the Government in November of last year to request funding. In January of this year, the Government provided Hatfield with a short-term commercial bridging loan of £8 million. The intention was to provide time for the Government to consider options for longer-term financial support, which would allow mining to continue at Hatfield until 2016.

In undertaking the due diligence, and owing to changing conditions in the coal markets, it became clear that Hatfield would require funding in excess of the initial £8 million bridging loan and that longer-term support could not be delivered commercially. The Government worked extensively with the company directors and the European Commission to facilitate further support, and approval for state aid was quickly agreed with the Commission. I know that the right hon. Member for Doncaster North has paid tribute privately to, and I know he will join me in thanking publicly, all the officials in my Department for the really hard work that they put in to secure that arrangement.

It has been suggested that the Government could have provided Hatfield with additional support in the light of possible offers to buy Hatfield coal which might have kept the mine open until August 2016. The directors’ managed closure plan had assumed that replacement contracts, from June this year onwards, would be secured for all Hatfield’s coal output at pricing similar to what had been achieved before. I am aware that there was a possible offer—I have seen the email—from one company for about 50% of Hatfield’s coal output, in addition to other possible commitments and bridging loans. Those offers were at a significantly lower price than the previous contracts that were being replaced. That level of interest was deemed insufficient by the directors—it was they who made the decision—to support the planned closure through to August 2016, and, as we know, no contract was even drafted, even less signed.