British Coal managers may mount buyouts: Most interest is likely in areas where the deep mines have gone

BRITISH Coal managers in Wales and Scotland and possibly in the North-east of England may attempt management buyouts in their regions, but their main interest is likely to be in open-cast workings rather than deep mines, it emerged yesterday.

The disclosure by Neil Clarke, chairman of British Coal, on the BBC Radio 4 Today programme that he would not be surprised if some of his senior managers were interested in buyouts sparked a political row.

Labour said there was a serious conflict of interest and accused managers of feathering their nests, while Arthur Scargill, the miners' leader, said privatisation would be opposed by every means available.

Mr Clarke said his managers knew 'a great deal about the business, its risks and its potential, and certainly in the regional areas, Wales and Scotland, I would not be at all surprised that they will be willing to have a go when privatisation comes into place.'

British Coal later made clear that because the commercial risks and capital investment required for deep mines were high, buyouts were most likely in peripheral areas where most of the deep mines have gone.

In Scotland only Longannet survives among the deep mines and in South Wales Tower Colliery, near Hirwaun, Mid Glamorgan, the last deep mine in the area, won a reprieve yesterday after more men came forward to take redundancy.

In November, British Coal warned that Tower's future would be reviewed after Christmas unless about 40 further jobs were cut and output improved to 11,500 tonnes of coal a week.

Mr Clarke said: 'It may be rather premature to rule anybody out as a potential buyer. Big companies will look at the risks. They will see there is a three-year contract (for supplying coal) at the time of privatisation and a rather uncertain future.

'They will also see the enormous progress that the business has made and they will have to weigh up the risks and benefits for themselves at that stage.'

Mr Clarke pointed to a productivity increase of one-third in the past year and a doubling of productivity in the past three years.

British Coal said any decisions about buyouts were still a little way off. 'The Government has not clarified the regional asset packages and neither has it been precise about the liabilities attached to them.' The Government has said it will sell the industry in five units, but keep some of the long-term liabilities of British Coal itself.

Labour hit out at suggestions of a buyout by managers. Kim Howells, MP for Pontypridd, said: 'I believe they were given the task directly by the Government to run this industry down. They did not complain about it. They simply closed down one pit after another. This has all the signs of an expedient management buyout and that they were feathering their own nests for the future.'

Mr Scargill said he did not think a management buyout was a good idea. 'We will oppose privatisation in whatever form it takes. We will also argue that we have a highly efficient industry owned by the British people that has been systematically butchered on the altar of free enterprise - but with one essential difference. It is that free enterprise is being allowed to destroy itself on the so-called altar of a distorted market.'

The coal privatisation bill threatens to be one of the toughest John Major has had to steer through Parliament.

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