UK Coal Operations Ltd

Philip Hollobone Excerpts

Wednesday 6th November 2013 Westminster Hall

[Several hon. Members]

rose—

[Mr Philip Hollobone (in the Chair)]

Order. It is my firm intention to ensure that everyone who wants to speak in this debate gets to do so. At 10.40 am, I will call the Front Benchers, although we might get to them before that. The running order that I propose is Mr Mark Spencer, Ian Lavery, Mr Marcus Jones, John Mann and then Mr Kevin Barron. Sporting an early entry for Movember, we start with Mr Mark Spencer.

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[Mr Philip Hollobone (in the Chair)]

I understand that Ian Lavery is the chairman of the miners group of MPs, so he is the next speaker.

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[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.

[Mr Philip Hollobone (in the Chair)]

We will now hear from an ex-miner, Kevin Barron.

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[Mr Barron]

I do not have much time, and I want to get this on record. I will give way if I get the opportunity.

The report continues:

“The second half of the bonus (of up to 75% of salary) was to be paid on successful implementation of the restructure plan…but will be deferred until the end of 2013 and was conditional upon the continued employment of Messrs Williams and Michaelson.

As part of the restructuring…Messrs Williams and Michaelson transferred respectively to Mine Holdings and Harworth Estates. However, it was agreed and announced at the time of the completion of the restructuring that Mr Williams would leave the Mine Holdings business in early 2013. The Committee has determined that although Mr Williams broadly achieved the safety performance required, the operational and financial performance of the mines put the mines in such difficulties that they will not recommend to the directors of Mine Holdings that the bonus is payable (2011). Mr Williams also benefitted in 2011 from an award of 500,000 shares which will vest during 2013…The Committee reviewed Mr Michaelson’s performance in the year and will recommend to Harworth Estates that a bonus of £152,500 (2011: £114,900) is payable in respect of the operational and financial performance in the year.”

The company has serious problems, yet the report continues:

“In anticipation that Mr Brocksom would leave the business on completion of the restructuring, his enhanced bonus for 2012 was agreed at a lower level of 100% of salary, with no deferred bonus, following the successful implementation of the restructuring plan. He will receive this enhanced bonus of 100% of his base salary £242,888”.

I realise that I will have to sit down in two minutes, but the report states that

“Mr Cox, Chairman, was recruited on a base salary of £350,000 per annum on the basis he provided three days per week. In the light of the time Mr Cox was required to provide in 2012 in relation to the restructuring and on-going business, the Committee agreed to supplement Mr Cox’s base salary by £120,000 for 2012”.

That is for a three-day week, although I assume he may have worked a bit of overtime:

“However, this was not paid until the sufficient short term recovery of the mining business and the proposals for December 2012 restructuring were fully developed”.

I will sit down very shortly, but the report goes on to say that

“Mr Cox was granted the following awards pursuant to the authority contained in Listing Rule 9.4.2R(2):

A Long Term Award to acquire up to 2,800,000 ordinary 1 pence shares which will normally vest on 15 November 2013 (being the third anniversary of Mr Cox’s appointment)…An Award over 1,520,000 shares which was to normally vest on an annual basis in three equal tranches subject to Mr Cox’s continued employment”.

I also understand that UK Coal paid lawyers millions of pounds from the restructuring, yet George Fowler, and 2,300 others, have had their concessionary coal removed by the company. I do not know whether that is illegal, but it is obscene at a time when George Fowler and thousands of others have to suffer having the entitlements they worked for in the coal industry taken from them because of the scheme’s so-called liquidation. I hope the Minister will address some of those issues in the not-too-distant future.

[Mr Philip Hollobone (in the Chair)]

I call another Member who has made an impressive start to Movember: Tom Greatrex.