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Taxpayers to meet £30 million bill for UK Coal staff

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World Coal,

Taxpayers are poised to fund a multimillion pound bill to help workers at two of the UK's remaining deep coal mines as part of preparations for their closure, ministers are expected to disclose this week.

The Government will propose amendments to the Small Business Bill to facilitate so-called concessionary coal payments to hundreds of UK Coal workers.

The commitment to the payments would come just weeks after ministers reiterated earlier rejections of a trade union plea for £300 million of state aid to keep the sites open.

A source with knowledge of the latest plan said that if it proceeded, concessionary coal payments to workers at UK Coal collieries would be made in July and December.

They said the aggregate sum involved was unclear but added that between £28 million and £30 million was "a sensible estimate".

The development, which was the subject of talks in Whitehall, followed a pledge by George Osborne in 2013 to guarantee free coal deliveries or a substitute cash sum under a scheme dating back to the 1980s.

The UK coal mining industry has been in long-term decline, accelerated by falling prices on international markets.

Under a deal struck with UK Coal last September, the Government agreed a £4 million loan on commercial terms to ensure the managed closure of deep mines at Kellingly in North Yorkshire and Thoresby in Nottinghamshire.

More than £15 million was received from suppliers, customers and other stakeholders to prolong the sites' operations alongside the Government loan.

The mines' closures, which are due to take place later this year, are expected to cost up to 1300 jobs.

A separate £8 million loan to prevent the insolvency of Hatfield colliery in South Yorkshire was agreed in January.

A putative attempt by employees and the National Union of Mineworkers to buy UK Coal was aborted last year.

The Pension Protection Fund has said it had agreed to sell its stake in Harworth Estates, UK Coal's former property arm, in a deal worth £150 million.

Vince Cable, the Business Secretary, said in August that the mines had "no long-term future unless very large amounts of taxpayers' money are involved".

"The state aid case remains unaffordable, particularly given the fall in the price of coal," a source said.

A Government spokesman said: "The Government is working closely with UK Coal to keep these two coal mines open.

"We will make sure UK Coal miners receive the security they are entitled to through concessionary payments."

Edited from source by Joe Green

Source: Sky News

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