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It often works out that hon. Members become agents on behalf of their constituents, yet there are agents who are supposed to be working for them. They are not doing their job. For a start, they are taking on too much work. They keep small staffs and they cannot handle the situation properly. The result is that constituents suffer in their homes.
Tilt is the main problem with a number of properties. The board does not want to know if there is tilt. One can walk into some properties, and it is like being in a rowing boat in the middle of the Atlantic. How can the Secretary of State and Ministers in the Department of Energy put up with that? They should go and look for themselves. I would welcome the Secretary of State visiting the beautiful county of Nottinghamshire and looking at some mining subsidence problems. He could spend the day there and open his eyes to the suffering that is going on in hon. Members' constituencies. People can be transferred from their own homes to other homes while serious repairs are being done. People
Column 196have been out of their homes for as long as two years before they could get back into their properties. The reason is that the contractor, who has been employed by British Coal, is never on the job. The result is delay after delay. People come to hon. Members' surgeries and, once again, hon. Members act as agents and make representations. The agent is supposed to look after and represent people with problems with British Coal. Oh, no--because he is an easy touch, the hon. Member has the problem dropped in his lap. I have a filing cabinet full of letters about mining subsidence problems. The Minister might not believe that, but it is true. I am sick to death of it. I am fed up. It is a nightmare. I have had problems with social security or housing, but the subsidence problem has been with me all along, and I have had enough. Hon. Members are looking for help for the people whom we represent. They have been getting a raw deal for far too long.
The hon. Member for Ellesmere Port and Neston (Dr. Woodcock) knows about subsidence. He has had properties in my constituency. He has suffered just the same as others have. He could not get repairs done, simply because the board would not find the money to do them. The board says, "Well, regulations have been laid down by the Government." Opposition Members want the Government to get off their backsides and do something about the problem.
I hope that the hon. Member for Worcestershire, South, the Under-Secretary of State for Energy will keep his eye on the problem. He has a responsibility in this housing matter. In the main, we are talking about domestic properties. Of course, there are serious problems with factories, schools and so on, but, in the main, we are talking about people's homes. I recently told the Prime Minister herself that her Government encourage people to own their own homes, yet many homes are being destroyed by mining subsidence.
We have a real problem. I ask the Secretary of State please to grab hold of the new clause. It should be in the Bill so that we can deal with the problem now and not wait until later. The problem is big enough and serious enough, and we want some action. I ask the Secretary of State to vote for the new clause and let us have it in the Bill.
Mr. Skinner : I am pleased that my hon. Friend the Member for Ashfield (Mr. Haynes) raised those points. Some of my other hon. Friends have also dealt with the matter at length. The Secretary of State will know that I have referred to the problem of subsidence in Bolsover church. For several years, negotiations did not proceed at any level between British Coal and Bolsover church, partly because of some negligence on the part of British Coal and the fact that there was no vicar for a period. I had to take over-- [Laughter.] It's the way I tell them. I had to take over as an intermediary. Several years ago, I was approached about whether I could get negotiations started. I told British Coal that I would be prepared to challenge it to a debate in Bolsover church so that the whole community could take part in it. That cracked it. British Coal then decided to start negotiating.
I raised the matter with the Church Commissioners and I was promised an investigation. I have no doubt that my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) will see a reference to that on the valuable list that he produced. In the past few days, I received a further letter from the newly installed vicar, John Easton, of
Column 197Bolsover parish church. I am sad to report that, despite all the efforts that have been made, there is a deadlock. I ask the Secretary of State for Energy to take note of the point that I am making. There is no doubt that some of his advisers will know that this matter must be resolved.
As my hon. Friend the Member for Ashfield said, it is mainly housing that is affected by subsidence. We know that a terrible backlog has accrued in the past few years. When promises are made in the House on behalf of the Church Commissioners, the matter should be resolved. It was raised a considerable time ago. The vicar and the church wardens have jointly written, stating :
"We have waited expectantly over the last six months for the fulfilment of the offer from British Coal but to no avail. We now agree with our architect and our solicitor who reluctantly conclude that British Coal are deliberately delaying payment with new quibbles about the wording of the document of acceptance."
That is how British Coal plays the game. That will register a chord with thousands of people in our constituencies--the idea of quibbling about exact words. They went on to state :
"We thank you for your interest and help in the past and hope that you will now be able to help in determining why payment has not been made."
This stage of the Bill's proceedings is an admirable opportunity for me to place that matter on the record.
There is a history to the backlog, and it is as well that the relatively new Secretary of State for Energy knows that. We also have a new Minister. He should be apprised of the reasons. Subsidence cases have not been raised in the same numbers since I have been an hon. Member. In the main, the backlog occurred during 1983, when suddenly it was found that some agents operating and acting on behalf of tenants and property owners were lining their pockets with large commission payments out of subsidence claims. Certain people became more involved in the matter. It received a lot of media attention. There was tremendous publicity about a few cases and about some people who were at arm's length from the problem--people who were making money on the side. Literally scores of thousands of residents with subsidence problems suffered.
British Coal asked "What will we do? We will tighten up." Rather than agents and people who obtained the commission, people such as those at Bolsover parish church and thousands of others about whom hon. Members know have suffered. That is why the rule was changed to what is commonly known as the "six-year rule" and it was made more difficult for the honest-to- goodness residents to get that compensation.
I hope that the Government's two representatives--Ministers who are relatively new to this--are fully apprised of why the change took place and why my hon. Friend the Member for Mansfield (Mr. Meale) has suddenly taken an interest and devotion in this matter that is far greater than that taken by his predecessor. There is a good reason for that--and point number one is that my hon. Friend succeeded his predecessor. However, my hon. Friend became interested because of the problem. Among others, my hon. Friends the Members for Ashfield and for Derbyshire, North (Mr. Barnes) have raised this matter because of the tremendous backlog in dealing with these cases and because of the Select Committee report that drew a lot of attention to the problem. I am not knocking that--I am simply saying that once attention has been drawn to the problem, it should be remedied in the proper way.
Column 198Let us not cause something to happen that means that the local residents will suffer. I can understand the agents losing their villas in Spain--not that they have, as a matter of fact--but it is unfair to lump the problem on to those people who are suffering. If there is plenty of money in the country to put pearly gates outside No. 10, there must be a bob or two left for people such as our constituents. We could give a litany of the ways in which the Government could spend money. We could also say the same about British Coal. If it can use some of its money for two-inch-deep carpets all around Hobart house and provide the wherewithal for all the luxuries and God knows what else there, it has a duty to assist in this difficulty.
The Secretary of State for Energy has a chance to make a name for himself in the last two years left to this Government. Of course, it might be less than that, because Ministers are now shunted around very quickly. The previous Minister for Coal, the hon. Member for Worcestershire, South (Mr. Spicer) is sitting behind the Secretary of State. The hon. Gentleman was halfway through the Bill--he did not expect it--but he suddenly got a telephone call from inside the pearly gates, saying, "You are wanted. We have run out of real Right wingers. You're about the only one left." That was not the greatest compliment of all time to be paid by Bernard Ingham, but the Minister was shifted.
That is why I am advising the Secretary of State and his new Minister for Coal that my hon. Friend the Member for Ashfield put the situation in the right context when he said, "Grab hold of it." There are many problems and they are not associated with Opposition Members only. Many Tory Members have these complaints. My hon. Friend was absolutely right to say that we get more complaints about subsidence now than about almost any other subject.
Let us deal with this matter in a general way and take on board the points that were raised by my hon. Friend the Member for Holborn and St. Pancras and other hon. Friends. The Government should make sure that there is no more waffling, because there has been some on this issue. When my hon. Friend opened the debate, he gave an account of the way in which the Government have pushed the issue to one side. There is no doubt that the Government have done that with the Waddilove committee and all the rest of it. They have been buying time, but we have now reached the point when the buying of time should end.
Let us get on with the job. If the new clause cannot be accepted, that is one thing, because we are simply saying that the Government should accept that kind of clause if they intend to do something about resolving the problem for the thousands of people who are suffering and losing money and who, in many cases, have not been given any money at all for their genuine claims of subsidence against British Coal.
Mr. Wakeham : May I say at the outset that I welcome the opportunity to discuss subsidence? It is an aspect of the coal industry about which there is widespread interest and concern among hon. Members of all parties. The hon. Member for Holborn and St. Pancras (Mr. Dobson) and his hon Friends have done the House a great service in raising the issue for debate on this new clause. One cannot come to this issue without one thing being crystal clear--that the present state of affairs is not satisfactory.
Column 199Rather than being a substantive point, perhaps my first point should be regarded as an audible aside. Opposition Members have made several attempts to draw a connection between the problems of subsidence and coal privatisation. The Government have a clear commitment to bring forward legislation on the problems of subsidence quite independent of the privatisation, about which I shall speak later. The Government have also clearly stated their proposals for coal privatisation, which will be dealt with in the next Parliament. However, as I have spent a considerable amount of time on the subject, perhaps I may draw an analogy from the electricity privatisation. To put the matter at its lowest, there seems no possibility of privatising British Coal without first clearing up the questions of the liabilities and problems of subsidence. I am not saying that there is a connection between the two, but as an aside to what some hon. Members have been saying, I should add that I do not think that some Opposition Members took the logic of the points that they themselves were making.
The new clause, in fact, goes rather wider than subsidence, because it seeks to extend deficiency grant to cover not only British Coal's subsidence liabilities, but also all its loans as well. Perhaps it could be convenient for the House, therefore, if I were to deal with all the other matters first and then devote the remaining part of my speech to dealing with points on subsidence.
In these other matters, the new clause would go well beyond what the Government have in mind and what is necessary. The basic purpose of the capital reconstruction is to recognise that the corporation's asset base has been severely eroded by the events of recent years, and to restore the corporation to a position where I can properly continue to advance loans to meet its day to day cash requirements. It has never been our proposal that we should write off all British Coal's debts, but we do believe that it is necessary to bring them into closer alignment with the true value of its colliery assets. Our Bill will achieve that. The Opposition's new clause would not only wipe out all the corporation's debts, but would also endow the corporation with many billions of pounds of spare cash. That would, quite rightly, be unacceptable to my right hon. Friend the Chief Secretary to the Treasury as well as being contrary to European Community rules on state aids.
Quite understandably the Government have been asked how much the deficiency in British Coal's accounts is likely to be by the end of the financial year. I said on Second Reading that it was likely to exceed £5 billion, and that there was a wide margin of uncertainty at present about certain elements, particularly the valuation of the corporation's assets.
This margin of uncertainty could be as much as £2 billion and it may be several months before we are able to arrive at a more precise figure. This is because the revaluation of each colliery will be based on a detailed review of its future cash flow and, of course, there will need to be detailed discussion of the strategic assumptions underlying the cash projections, and particularly the assumptions for prices, output and productivity.
Questions have also been asked about the valuation of land and coal reserves in the accounts. Land and buildings
Column 200are included at cost, but the annual accounts also give information on its value at current prices. At March 1989, British Coal's estimate of the current market value was £584 million, compared with a book cost of £207 million.
I can assure Opposition Members that British Coal is in no financial position to hoard land. In fact, it has stepped up its sales of surplus property to nearly £100 million in the course of this financial year and will have to continue to sell its land if it is to generate cash for reinvestment in the industry.
Mr. Wakeham : The hon. Gentleman has anticipated my next paragraph. Unworked coal reserves are not included in the balance sheet, but they represent an immense and vital national asset. If they were sold, they would, of course, have to be valued, but I am certainly not envisaging that unworked reserves, as distinct from the coal mining industry, would ever be privatised. Nevertheless, I understand the feeling expressed in Committee, that, as steward of our coal reserves, British Coal might provide a fuller and more regular analysis of the volume of reserves in each coalfield. It is important information and I shall certainly draw the matter to the attention of Sir Robert Haslam.
Mr. Alexander Eadie (Midlothian) : This is an important point. I am sure that some of my hon. Friends will be confused about assets and reserves. The Secretary of State must be aware that pits have closed, not because there was no coal in them, but because it was considered that the economic climate had changed. Pits were deemed unprofitable even though the coal was still there. That coal may even be worked some day, when there is a more realistic appreciation of the value of coal resources. Our worry is that the closure of some pits was a piece of vandalism and that coal was sterilised for all time.
Mr. Wakeham : I shall leave aside part of what the hon. Gentleman said and come to the central point. I agree that it is not possible to value coal reserves. It is not our intention to do so. We do not envisage privatising that part of the coal industry. We do not believe that it is proper to value coal reserves. The hon. Gentleman will agree that a fuller and more regular analysis of the volume of reserves in each coalfield is more important than artificial and meaningless assessments of their value.
I shall make a request to Sir Robert Haslam to make more information about the volume of reserves available. Many people involved in the coal industry would like to have such information. I agree that it would not be fruitful to attempt to value coal reserves.
Clause 1 provides that I may pay deficiency grant up to the level of the deficiency shown in British Coal's accounts. I cannot guarantee that I shall fully extinguish the deficiency to the last penny. For one thing, part of the grant represents state aid requiring the approval of the European Coal and Steel Community. The level of grant will have to be sufficient to clear up British Coal's balance sheet to the point where I can properly continue to lend to the Corporation. In other words, there must be a genuine
Column 201prospect that it can service and repay its remaining debt. This means that a very substantial amount of deficiency grant will be required.
I now turn to the subsidence aspects of the new clause. First, I assure the hon. Member for Holborn and St. Pancras (Mr. Dobson) that the deficiency already allows sums to cover its estimated liability for compensation for subsidence damage. The adequacy of these sums will automatically be reviewed by British Coal's auditors at the end of each year. The sums do not allow for the effect of further legislation on subsidence. It is not possible to make a proper assessment of any increase in the liability on this account until details of the Government's legislation are finalised. I do not expect that the extra liability will be significant.
In response to the point raised by the hon. Member for Mansfield (Mr. Meale), whatever British Coal's financial difficulties or liabilities in the past--I hope that such difficulties will not continue--there is no question that any properly settled claim would not be met by British Coal. It could not reasonably plead poverty in settling its debts. That would be unacceptable. I hope that that will help the hon. Member for Mansfield to deal with the human problems in his constituency and in others. I shall deal with the negotiation and settlement of claims later in my speech.
Mr. Wakeham : Fine. I appreciate friendly comments, wherever they come from. The hon. Member for Ashfield (Mr. Haynes) occasionally makes such comments, but they often have a sting in the tail. Many claims are already being met by British Coal. I am pleased to tell the House that the trends are encouraging. The number of new claims continues to fall. In 1988 -89, British Coal received 9,600 new claims, some 2,300 less than the previous year. British Coal settled about 10,000 claims, at a cost of nearly £50 million. A further 4,600 claims were rejected, with the result that the total number of cases outstanding fell by about 5,000 compared with the previous year, to a little over 26,000. That compares with backlogs of 37,000 in 1986-87 and 52,000 in 1983-84.
It may be helpful to the House to run through what has happened since the Waddilove committee on subsidence reported in 1984, and the Government's White Paper response was issued in 1987. As the hon. Member for Holborn and St. Pancras said, the Waddilove report on repair and compensation for coal mining damage made 65
recommendations, not all of which required legislation to be implemented. It is worth recalling that the report did not call for a radical overhaul of the existing system. It concluded that the thrust of the existing legislation was broadly right but needed strengthening in a number of areas. I draw the attention of hon. Members to paragraph 169 of the report.
Between the publication of the Waddilove report and the Government's White Paper response, British Coal introduced several improvements to its management procedures. The result was that, by the time that our White Paper was published, over half of Waddilove's recommendations had been implemented, wholly or in part. In response to a question from my hon. Friend the Member
Column 202for Ellesmere Port and Neston (Dr. Woodcock), the Official Report listed those improvements in January last year.
For example, British Coal now acts in accordance with Waddilove's recommendation that priority should be given to the repair of damage and that payments in lieu should be made only in exceptional circumstances. It also repairs all property to a good standard, even though the Coals Mining (Subsidence) Act 1957 requires British Coal only to make the property "reasonably fitted" for use.
British Coal does not strictly apply the time limit in the 1957 Act, which requires a claim to be made within two months of the damage becoming apparent and will generally accept claims up to six years after the damage occurred. Several hon. Members spoke about the time limit. I recognise that that causes problems. That is why we propose a change in new legislation to make the position abundantly clear. I am advised that claims will be allowed up to six years from when the claimant first had reasonable grounds to believe that damage had occurred. That is six years, not from when the mining took place, or from when the damage occurred, but from when the damage appeared. I hope that my comments will be of help to people who are in any doubt about that.
Mr. Dobson : Does the Secretary of State accept that there are still problems? When a person claims that his house has been damaged, it is possible for the Coal Board to say, "The houses on either side were damaged four years ago, so you are out of time." As the hon. Member for Ellesmere Port and Neston (Dr. Woodcock) said, the Coal Board can say in effect, "You have suffered from the damage for so long that we will not pay you any compensation."
Mr. Wakeham : I recognise that the position is not entirely satisfactory, but I said what I did in order that the legal position should be as clear as I am advised that it is. But we recognise that legislation is necessary to make that crystal clear.
Some hon. Members have suggested that more should be done in advance of legislation. We agree, and I am actively looking to move things forward. That is why we are preparing a new version of my Department's advisory leaflet, often refered to as the Green Book. That will describe new procedures agreed between the Department and British Coal for dealing with subsidence claims. Those procedures will, as far as possible, incorporate the best aspects of both the existing Acts and anticipate our proposals for legislation. I am well aware of the anxiety that claimants may suffer simply from not knowing how to proceed. I hope that that will go some small way to reduce uncertainty in the minds of claimants until such time as our new legislation is implemented.
Secondly, the House may recall from the White Paper that we said that we would conduct an attitude survey to assess public satisfaction with British Coal's notification procedures. If the existing arrangements are found to be unsatisfactory, British Coal will be required to notify individual households. The fieldwork for that survey is now complete and I expect a report shortly. Thirdly, because of the prospect of early legislation we have brought forward the review of disputes procedures which Waddilove recommended should take place in 1990.
Column 203That, in part, answers some of the points raised by the hon. Member for Pontefract and Castleford (Mr. Lofthouse). That review is now under way and will look at a range of options. We shall shortly be consulting more widely and I hope that the outcome will be a simpler, quicker and cheaper way for claimants to resolve disputes with British Coal.
The options that we are looking at include a better defined and more widely available form of independent adjudication ; lower-tier to the Lands Tribunal, roughly equivalent to a small claims court ; an ombudsman ; a legal advice centre, and a disputes procedure based on the rules of the Institute of Arbitrators. At this stage it is not possible to anticipate the outcome of this review or when and how its findings will be implemented, but it may be possible for a new system to be agreed and established without legislation.
I shall consider carefully all the points that have been made by my hon. Friends the Members for Broxtowe (Mr. Lester) and for Cannock and Burntwood (Mr. Howarth), and the hon. Members for Bassetlaw (Mr. Ashton) and for Mansfield, along with the other helpful suggestions that have been made.
The Government remain committed to introducing a Bill on subsidence at the earliest possible opportunity, but subsidence is a complex area. There are two Acts which currently apply. We are not only introducing positive improvements, we are also consolidating two Acts into one Bill. Some of the provisions of these Acts, while desirable, are not always as clear as they should be.
Many hon. Members will be only too aware of the uncertainties surrounding the interpretation of the six-year rule, on which we have already had exchanges. I accept that fully. Unravelling those Acts and replacing them with a lucid and comprehensive new Bill will involve a lot of "lawyer's law" which will require careful drafting and careful scrutiny by the House and in Committee. Moreover, a great deal of work and further consultation is going on and we want the legislation to reflect its outcome.
For those reasons, it would be neither practical nor desirable to tack subsidence provisions on to the present short, primarily financial, Bill which is urgently required by the end of the financial year. I was responsible for the business of the House for long enough to know that I cannot predict when the legislation will be introduced. That is a matter for decision elsewhere. But I am sure that the Government, in reaching their decision on the timing of a Bill, will wish to take full account of the views expressed today, and I hope that on that basis the Opposition will withdraw the new clause.
Mr. Dobson : We do not want to withdraw the new clause, because this is an urgent matter. It is getting on for six years since the Waddilove committee reported. Its recommendations are sufficiently clear, and they should be implemented now.
If the Secretary of State is not prepared to amend the Bill at this point or to see it amended in the other place, let me remind him of his previous incarnation as Leader of the House. In the previous Session of Parliament, we saw through the House the lowest number of Bills in an ordinary Session since the second world war, and in the Session before that we saw through the lowest number of Bills ever seen through the first Session of a Parliament
Column 204since the second world war. We are promised that there will be even fewer Bills in this Session, so there must be room in the Government's legislative programme for this important measure. If the right hon. Gentleman wants his hon. Friends to drop the National Health Service and Community Care Bill, or the Education (Student Loans) Bill, we shall facilitate that.
Question put, That the clause be read a Second time :
The House divided : Ayes 175, Noes 246.
Division No. 36] [6.35 pm
Abbott, Ms Diane
Ashley, Rt Hon Jack
Banks, Tony (Newham NW)
Barnes, Harry (Derbyshire NE)
Beith, A. J.
Benn, Rt Hon Tony
Bennett, A. F. (D'nt'n & R'dish)
Bray, Dr Jeremy
Brown, Gordon (D'mline E)
Brown, Nicholas (Newcastle E)
Buckley, George J.
Campbell, Menzies (Fife NE)
Campbell, Ron (Blyth Valley)
Campbell-Savours, D. N.
Carlile, Alex (Mont'g)
Clark, Dr David (S Shields)
Clarke, Tom (Monklands W)
Clwyd, Mrs Ann
Cook, Robin (Livingston)
Davies, Rt Hon Denzil (Llanelli)
Davies, Ron (Caerphilly)
Davis, Terry (B'ham Hodge H'l)
Dunwoody, Hon Mrs Gwyneth
Evans, John (St Helens N)
Field, Frank (Birkenhead)
Fields, Terry (L'pool B G'n)
Foot, Rt Hon Michael
Garrett, Ted (Wallsend)
Godman, Dr Norman A.
Golding, Mrs Llin
Griffiths, Nigel (Edinburgh S)
Griffiths, Win (Bridgend)
Heffer, Eric S.
Hoey, Ms Kate (Vauxhall)
Howarth, George (Knowsley N)
Howells, Dr. Kim (Pontypridd)
Hughes, John (Coventry NE)
Hughes, Robert (Aberdeen N)
Hughes, Roy (Newport E)
Hughes, Sean (Knowsley S)
Jones, Barry (Alyn & Deeside)
Jones, Ieuan (Ynys Mo n)
Jones, Martyn (Clwyd S W)
Lloyd, Tony (Stretford)
McKay, Allen (Barnsley West)
Mahon, Mrs Alice
Marek, Dr John
Marshall, Jim (Leicester S)
Michie, Bill (Sheffield Heeley)
Michie, Mrs Ray (Arg'l & Bute)
Mitchell, Austin (G't Grimsby)
Moonie, Dr Lewis