British Coal (Cannock Site) (Hansard, 26 July 1990)

§ Mr. Gerald Howarth (Cannock and Burntwood)
It is said that the finest wines are always left until the end. Approaching the end of the Session, we have been privileged to listen to the vintage port contribution of my hon. Friend the Member for Watford (Mr. Garel-Jones). It was wonderful to see the ease with which my hon. Friend made his "maiden" speech for the first time in eight years, and how he has translated himself with such dignity and simplicity from the centre of the spider's web to the centre stage. As he is a member of the distinguished Watford football club, perhaps I can say that he has moved from goalkeeper to centre forward.
As one of the few hon. Members who can genuinely say, "Ich bin ein Hamburger"—that is a reference not to McDonald's, but to my childhood which was spent in Hamburg—I took great interest in what my hon. Friend has just said, as, I am sure, did the whole House. Just as he has been watching us over the past eight years, so we shall now have great pleasure in watching him and making sure that he does not swallow too fully some of the Foreign Office briefs. On this, his first outing, he has clearly shown the characteristic independence of spirit that we have come to associate with him.
To enable my hon. Friends to depart on holiday, I now turn to my Adjournment debate. It is a privilege to have the opportunity of being the tail-end Charlie of the parliamentary Session and to initiate our final debate before the summer recess. However, I fear that it is a corresponding duty for my hon. Friend the Under-Secretary of State, upon whose shoulders the response falls. I apologise if I have detained him from travelling to his delightful constituency of Banbury, where I was at school I am delighted to see him on the Front Bench and hope that he will take some of my points on board.
I begin by setting the debate in context. I represent the constituency of Cannock and Burntwood, which measures approximately 10 miles by five. In 1945 there were no fewer than 22 coal mines in my constituency, whereas today there is not one. There are two deep mines just outside, at Littleton in the constituency of my hon. Friend the Member for Staffordshire, South (Mr. Cormack), and at Lea Hall, in the Mid-Staffordshire constituency. There has been some opencast work in my constituency and British Coal has submitted an application for a further substantial opencast site.
Although there is no mining activity in my constituency at the moment, there is nevertheless a strong mining culture. Many of my constituents have either worked in the coal industry or have come from families which, for generations, have contributed to the winning of coal, which is often a difficult and dangerous task. As I have said, there is therefore a strong mining culture in the area. I have repeated that because it is important for what I shall say later.
I have sought to detain the House on this matter because British Coal owns a substantial amount of land in the area and, in 1984, sought planning permission for a substantial private residential development, which would ultimately lead to the construction of about 2,400 houses. The site is to the east of Cannock—my hon. Friend has a map so that he might better identify the area—and to the west of Heath Hayes. It is a substantial development. In 727 recognition of the size of the development, the local authority entered into what is known as a section 52 agreement on 17 January 1985.
One of the essential features of that section 52 agreement is the safeguarding of a site called the school site. It imposed a restrictive covenant on the site prohibiting non-school development and gave Staffordshire county council an option to purchase the site after 700 houses had been built. After 1,500 houses have been built, the developers may require the county council to choose between purchasing the site and cancelling the option and restrictive covenant. That agreement applied when British Coal sought planning permission for the development that is now taking place.
There are two schools in the area—the Fiveways school and Gorsemoor primary school. I shall concentrate on the Gorsemoor primary school, which is more important to my argument. It has 508 pupils and accommodation for about 390 places, plus temporary accommodation for another 180 pupils. The school is grossly overcrowded. There are two large classes of 35 children each. The headmaster and the teachers would prefer to divide the pupils in those classes into three classes of a more manageable size. There are two Portakabins, with no running water and no computer facilities, and pupils have to brave the elements and sometimes walk through rain and snow to reach the main school buildings. My constituents find that unacceptable. They are up in arms because the school is overcrowded.
Many of the people buying houses on the new estate on Hawks Green have young families. The houses arc not cheap—about £90,000 to £100,000 for a three or four-bedroomed house. People have moved there from other parts of Staffordshire and from other parts of the country to that very fine estate. Many of them have moved there taking into account the fact that when they go around the estate they can see a large site behind the supermarket which they have been told by their legal advisers has been earmarked for a school.
When parents move house, they consider what school facilities will be available for their children.
What has happened since that section 52 agreement in 1985? There have been no negotiations whatsoever with British Coal. Although 700 houses have been built and the county council has informed British Coal that it wishes to negotiate about using that site for a school, British Coal has not negotiated in earnest.
No real progress has been made because British Coal has claimed a value for the site based on commercial or residential alternatives. On that basis, British Coal is claiming that the land is worth about £1.5 million. Clearly the county council cannot pay £1.5 million for the site. British Coal entered into an agreement which is headed quite simply, "The School Site"—it could not be less equivocal than that—and it is quite clear that that site has been earmarked and reserved for a school.
It is scandalous that British Coal is arguing that the valuation of the site should be based on its residential land value. Clearly, if it was unable to sell the site for the development of houses, it would be worth only a matter of thousands of pounds. We are talking about £10,000 at 728 most for the value of open space land or £1.5 million which, it is correct to say, would probably be the valuation if it were to be developed for housing.
The point is that it was never intended that the site should be developed for housing. It should be developed in that way only if the county council decided not to exercise its option which was built into the agreement by which planning permission was given to develop the site for a school.
It is outrageous that British Coal is dragging its feet in this way. Clearly Staffordshire county council is not in a position to pay £1.5 million, and the district auditor would think that it was off its rocker if it did so.
When my constituents raised this issue with me, I sought some satisfaction from the county council. It told me that the negotiations had run into the sand. I wrote to the chairman of British Coal, Sir Robert Haslam, and received a reply from the deputy chairman, Robert Kendall. The letter said: As you know, the difficult financial position facing the Industry at the moment means that it is necessary for us to achieve the best possible proceeds from the sale of our assets. The financial reconstruction to which you refer"— I referred to the £6.5 billion that the Government have contributed to British Coal for its capital reconstruction—
does not lessen this responsibility—indeed, it makes it all the more incumbent on British Coal to behave in a responsible, commercial fashion and justify, through our results, the faith the Government is showing in the coal industry through this important and welcome step … we appreciate the need for appropriate services to be provided, including the need for education facilities to be made available for the new residents moving into the development. However, this does not lessen our need to ensure that a realistic price is agreed for the land in question. I understand that British Coal has an obligation to ensure proper stewardship of the public funds paid to it —it is taxpayers' money. However, since the coal industry has been under the auspices of the Government, it has improved its profitability and productivity and my constituents, no less than others around the country, have made their contribution to its improved success.
I find the attitude of British Coal's deputy chairman contemptible. I do not say that lightly. Only an industry that is completely unaccountable and had no shareholders could behave in that way. However, nominally, Mr. Speaker, you and I are shareholders, as is my hon. Friend the Minister and everyone else in the country. The truth of nationalisation is that nobody owns the industry and those who run it are, effectively, a law unto themselves. In my view, no private sector business could conduct its affairs in the way that British Coal does. My constituents on the Hawks Green estate at Heath Hayes feel aggrieved about the way in which they have been treated.
I recognise that my hon. Friend the Minister can do nothing about this for the time being because, under the nationalisation legislation, the coal industry is solely responsible for determining the national interest. I know that he will tell me that he does not have day-to-day responsibility for British Coal. By raising this matter today, I am seeking to impress upon the management of British Coal that it cannot go on behaving as if it is a law unto itself. It has responsibilities, and it is time that it faced up to them. I do not believe that a private sector company would ride roughshod over people in the way that British Coal has. It would consider it extremely disadvantageous to its commercial and trading prospects so to upset a large 729 section of the community in which it worked and would ensure that it avoided the situation in which British Coal has got itself.
Despite the undertaking given by the deputy chairman of British Coal that he would ask his officials to enter into negotiations with Staffordshire county council in good faith, I am sorry to say that those negotiations again appear to have run into the sand.
I mentioned the context in which I wished to set my remarks—the strong association of my constituency with the coal mining industry, the lives of my constituents and their forebears that have been lost in the winning of coal and the strong coal culture that remains. I find it astonishing that British Coal, whose heavy lorries trundle through my constituency to the aggravation of many of my constituents, whose work undermines the houses in which my constituents live—then it quibbles about compensation for coal mining subsidence—which wanted to mine about 1,300 acres of open field to win coal by opencast methods and which rely on the good will and work of my constituents to win its coal can so slap them in the face over a matter as important to them as the education of their children.
Even if my hon. Friend the Minister is unable to say that he can resolve the problem to my satisfaction, I hope that he will be in no doubt, and that he will convey the feeling to British Coal, that my constituents are fed up to the back teeth with its cavalier treatment and want the industry and its senior management to respond to their concerns.
It will be no good saying that Staffordshire county council is making contingency plans to expand the Fiveways school. That is plan B; plan A was stymied by British Coal. The county council had to do something in the meantime, so it proposed to expand the Fiveways school. That alternative is not acceptable to my constituents, because that school is further away and it involves primary school age children crossing a fairly busy road. They bought their houses in the firm expectation that a site marked "The School Site" in the agreement with the county council would indeed become the school site. They had not reckoned on the prevarication and duplicity of British Coal.
It will not be a sufficient get-out for British Coal to say that the county council has made alternative plans. The county council has indicated to me its desire is to build a school on that site and that it will be needed. About 800 or more houses have been built on the estate, and the total number planned is 2,400. It will be an enormous estate. The downturn in the property market elsewhere is not affecting sales and the likelihood is that there will be increasing pressure on scholl places.
That site is therefore needed, and I hope that by raising the matter this afternoon on the final day of the Session before my hon. Friend the Minister departs to take a well-earned holiday—indeed, after all your endeavours in the Chamber, before you, Mr. Deputy Speaker, take a well-earned break—and before British Coal's directors gather their buckets and spades to go to the seaside, they will note that some of us are extremely angry with British Coal's performance.
When I tried to telephone the deputy chairman at 5.50 pm last night, neither he nor the chairman was available and I was able to obtain only the press department. By contrast, I was able to telephone the Department of Energy at seven o'clock, and the Minister's team were on 730 hand and able to assist a Member of Parliament. I was most impressed by that, and my hon. Friend could give a clear lesson to British Coal on how to manage its affairs.
The final lesson that I hope my hon. Friend the Minister will take on board is that there is only one answer for British Coal: the sooner it gets into the private sector and is exposed to all the rigours of free enterprise and the need to satisfy customers and live at peace with its neighbours, the better the country will be served and the more likely we are to win coal competitively.

§ The Parliamentary Under-Secretary of State for Energy (Mr. Tony Baldry)
I congratulate my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) on his success in the ballot today. This subject is of understandable concern to him and to his constituents, and he put his case with characteristic clarity and in his own way.
I should like at the outset to make a couple of general points. First, my Department does not have a role in matters of this type. As my hon. Friend knows, the Government take the view that it is not their function to tell industry how to run its business. Even with the remaining nationalised industries, we believe that, wherever possible, they should be allowed to get on with their business, make their own decisions and stand by the consequences. In the case of British Coal, decisions on the disposal of property are quite rightly one of the matters that we leave to the judgment of British Coal's management. Only the management understand British Coal's operational needs and consequently how best to make use of the property that it owns.
The second general point which I should like to make, and which I hope my hon. Friend will appreciate, is that the Goverment must expect the corporation as a general rule to maximise the proceeds from the sale of its assets. A private sector company is obliged to get the best deal on behalf of its shareholders. British Coal, whose shareholders are effectively the taxpaying public, cannot behave any less responsibly in these matters, as my hon. Friend fairly acknowledged.
My hon. Friend was right to point out that British Coal is a large organisation and, moreover, an organisation which has just recently undergone a substantial restructuring of its finances with the passage of the Coal Industry Act 1990. However, British Coal is expected to record a substantial loss in the last financial year. It was operating in a difficult and increasingly competitive market; it had its third mild winter in succession; and it has been undergoing an extensive programme of restructuring over the past five years. Restructuring is essential for the long-term well-being of the corporation, but it does have considerable short-term costs.
It is also important to be clear that the new Coal Industry Act does not simply represent a largesse of cash on the part of Government and taxpayers which will allow the corporation to spend freely. The purpose of the Act was to eliminate the bulk of the corporation's accumulated deficit, hence reducing the burden of interest payments it previously had to carry. It was not our intention to insulate the corporation from the realities of the marketplace, hence encouraging it to act in an uncommercial or uneconomic way. Our intention was rather to give British Coal the chance to compete and 731 succeed in a difficult market, as I believe it will. It is up to British Coal to honour the trust that the Government have put in it.
I hope that my hon. Friend does not assume from the stress I have laid on these general principles that I do not appreciate his concern on this matter. As he acknowledged, I will not be able to resolve the question here today, nor would my hon. Friend expect me to do so. However, I do believe that the parties involved should be able to reach a solution in time.
I understand that the point at issue is that British Coal sold the land in question to a developer at the rate for agricultural land and subject to an agreement under section 52 of the Town and Country Planning Act 1971 reserving the land for educational purposes. British Coal would at a later stage receive from the developer the difference between what it had already received and the price that the developer received from the local education authority. The dispute is about whether the section 52 agreement has reduced the value of the land, and hence the amount of the payment still due to British Coal, and, if so, whether the developer and British Coal are entitled to compensation.
A very similar case is currently before the Lands Tribunal. The outcome of that case will clarify the current legal position, and permit negotiations between Staffordshire county council, the developer and British Coal to take place on a much firmer basis than before.

§ Mr. Howarth
My hon. Friend has referred to the outstanding Lands Tribunal case. Is he aware that in that case the council—Nottinghamshire county council, I belive—has been in litigation since 1984? Frankly, my constituents are not prepared to wait yet another six years while British Coal drags its feet and tries to misrepresent what was a clear agreement, to try to screw more money out of the county council.

§ Mr. Baldry
I understand that both parties—Staffordshire county council and British Coal—accept the need to await the outcome of the other case and are content to let matters rest in the meantime. Knowing of 732 this debate today, I asked officials in my Department to investigate and, as far as I am aware, neither side is accusing the other of delay or procrastination.
Against that background, I hope that my hon. Friend will agree that the most sensible course—which appears to be the course being adopted and advocated by the parties concerned—is to await the outcome of the case before the Lands Tribunal. However, as I have said, I appreciate the strength of my hon. Friend's feeling on this matter and his understandable desire that it should be resolved speedily and equitably. I will therefore ensure that the points that he has raised in his speech are brought without delay to the attention of the chairman of British Coal and I will ask the chairman to ensure that when the Lands Tribunal has reached its decision on the other case the matter is resolved as quickly as possible.
On a lighter note, may I say that I am aware that mine will be the last speech from the Dispatch Box before the House rises for the summer recess. For Government Departments and Ministers, it will be business as usual, but to those who have some spare time during the recess, may I recommend the third edition of British Coal's "A Guide to Steam Trains in the British Isles", compiled for the Association of Railway Preservation Societies with sponsorship from British Coal. In it, one will find the details of more than 120 Steam Railways, Steam Centres and Museums where you can see on operating days steam locomotives of all sizes from the narrow guage to main line express types. In addition for the first time this year there are details of regular steam trains operating over the main lines of British Rail. From Bangor to the Bluebell line, there are some excellent excursions to be had, and I hope that those of my hon. Friends—and perhaps you, Mr. Deputy Speaker—who may have some free time will be able to take advantage of an enjoyable day out looking at some of Britain's great industrial heritage.

§ Mr. Deputy Speaker (Mr. Harold Walker)
May I add to what the Minister has just said by wishing all hon. Members and all those who serve us a happy and enjoyable recess? I hope that every one of them gets a holiday, including Ministers.