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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Lee Rowley)
It is a pleasure to serve under your chairmanship, Mr Efford. I am grateful for the opportunity to contribute to the debate today. I congratulate my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) on an important and timely debate. I have already spoken to Members about the issue. We have had a good, constructive debate that has got to the heart of the challenges. Members have recognised the challenges that we face both globally and domestically, as well as the long-term and short-term objectives that we are trying to meet, and they are right to highlight the issues on behalf of their areas and the companies and organisations in them. My hon. Friend the Member for Stoke-on-Trent South eloquently articulated the challenges. They are noted and we in the Department continue to work through what might be possible. I hope everyone in the Chamber acknowledges that there has been a substantial amount of support for energy-intensive industries in recent years.
We accept that energy-intensive industries are important, as all manufacturing is, for the United Kingdom. They are hugely important to the regions represented in this room, from the north-west to Lincolnshire, from my neighbouring county of Staffordshire—so ably represented by many of its MPs here today—to Scotland and Wales. We know that hon. Members here today attach great importance to the issue, whether it be steel, paper, cement, lime, chemicals, or any of the nearly 70 sectors that the hon. Member for Southampton, Test (Dr Whitehead) read out a number of.
I cannot avoid pointing out ceramics, given that that is the genesis of this morning’s debate. Colleagues in Stoke-on-Trent South and beyond have been eloquent champions for the future of the ceramics industry. We are glad to see its continued renaissance and we hope that will continue in the years ahead. It is a great British success story and we want to ensure that that continues.
More broadly, it is vital that we put energy-intensive industries, and manufacturing as a whole, on a sustainable, resilient and reliable footing—a point made by my hon. Friend the Member for Bolton West (Chris Green). That is important for the communities represented here and for levelling up in general.
The hon. Member for Aberavon (Stephen Kinnock) has been extremely welcoming and helpful to me in my first few weeks as a Minister, and I am grateful for his time. However, I will gently disagree with him on the point about manufacturing. Although I accept that manufacturing has had challenges for many decades—I have seen that in my own part of the world—we have seen an increase in jobs over the past 10 years, and it is important to note that. Energy-intensive industries and manufacturing have faced a particular set of circumstances in the last year with the real challenge of coronavirus. We are very glad to see that moving on, but a set of new challenges, as articulated by colleagues, face those industries. We can overlay that with the long-term transition plan to try and ensure that we walk more lightly on this earth and that the industries leave less of a legacy on this earth.
We know that the industry faces a set of unique challenges. As my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) highlighted, we cannot get far without needing steel. We need ceramics and many of the important high-tech industries that we rely on. Glass has a hugely important part to play in our transition. Those are the key building blocks that we need to understand and then formulate policy around in the coming years and decades.
I am two months into this role. On a personal level I have tried to take an interest in the role—of course I have tried to take an interest. I should have taken an interest in the role, given the amount of paperwork that I have had to read in the last two months! I have met users of the energy-intensive sectors. Last week I was with the chemicals sector and I visited a steel location. I look forward to coming to see ceramics in Stoke-on-Trent at the earliest possible opportunity.
Jim Shannon
In my contribution I referred to Shorts Bombardier—Spirit as it is now—and the £85 million project it is trying to develop in Belfast. Has the Minister been to see that project or talked to Shorts Bombardier Spirit to ascertain what it is doing and what could be replicated elsewhere in the UK?
Lee Rowley
I am grateful for the hon. Gentleman’s intervention. He anticipates some of my speech. To pick that up now, there is an incredible amount of work going on across the four nations of the United Kingdom. I am looking forward to coming to Northern Ireland as soon as I am able. We are currently trying to organise a visit, and I am keen to talk to him further about the example that he highlights.
Alan Brown
The Minister mentioned the chemical industry. Does he understand that INEOS at Grangemouth is part of the Scottish carbon capture cluster, and at the moment INEOS is one of the biggest emitters of carbon dioxide in Scotland? The Scottish CCS would obviously alleviate that problem. Will the Minister look into that, promote the Scottish carbon capture cluster and take it away from being reserved, as it is classed at the moment?
Lee Rowley
I am grateful for the hon. Gentleman’s intervention. I do acknowledge the challenge of the Grangemouth plant and the excellent work that goes on there. I have spoken to INEOS on several occasions since taking up my post. He and his colleagues have contributed to the carbon capture and storage debate actively and noisily over the past few weeks. He knows that an initial two sites have been announced and the intention is to have four by 2030. The Minister of State, Department for Business, Energy and Industrial Strategy, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) has articulated that we want to continue to work with the Scottish cluster to see what is possible there.
I want to touch on a number of points that individual Members made. My hon. Friend the Member for Stoke-on-Trent South rightly highlighted—along with many Members—the challenge of energy prices. We acknowledge and accept there are challenges with energy prices. My hon. Friend the Member for Scunthorpe highlighted price spikes noted in just the past few days. From conversations I have had, this debate and wider discussion within industry, we know that there are challenges. I thank colleagues, unions, industries and trade bodies for articulating that in recent months.
There is significant price volatility, which it is important to acknowledge. Prices have spiked and started to float down over recent weeks. I hope all Members would accept that in the past two years alone we have had very low prices and very high prices. We are at a particular place in the market at the moment.
Holly Mumby-Croft
Will my hon. Friend comment a little more on those lower prices? Although we might have seen lower prices, we are still at a significant disadvantage in the steel industry compared with competitors in the EU. Although he has made an important point, it does not negate the issue we are talking about.
Lee Rowley
I am grateful to my hon. Friend for her intervention. She is right to point out that there two factors here. One is the volatility and how the price has moved and the second is the compactor. The latter point is well made by colleagues from all parties. I know hon. Members will acknowledge that we have provided more than £2 billion of support in under a decade in price-release schemes for energy-intensive industries. I accept that there are significant concerns about the position we are in and where we are seeking to go. I hope that that will be acknowledged and contextualised within that reality.
When formulating where we do or do not go in future, I hope hon. Members will accept that the situation is extremely complicated. We have a very diverse group of energy-intensive industries—more than 70 sectors—as the hon. Member for Southampton, Test highlighted. We have a range of exposures, challenges around efficiencies and hedging strategies. My hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) pointed out the challenge of hedging strategies in recent months. Other forms of mitigation might be possible.
Lee Rowley
If my hon. Friend does not mind, I have to make progress. If I have a moment at the end, I will happily give way. This is a diverse sector, but we are seeking to see what may be possible. Announcements will be made in due course, should they be possible.
My hon. Friend the Member for Stoke-on-Trent South made a very good point about eligibility criteria. He is aware—it has been referenced already in the debate—that a review is under way at the moment. A consultation ran between June and August. There were more than 30 responses, and we will make further announcements in due course. He is absolutely right to highlight the longer term, as other hon. Members have done. The Prime Minister mentioned that point in his speech on Monday. He highlighted the importance of manufacturing, of energy-intensive industries and of making sure that electricity prices over the long term are in place, so that the viability and competitiveness of those industries are ensured. He highlighted nuclear. I know there are a range of views in the room about nuclear, although happily the majority of us seem to be in favour of making progress. I hope we can do so in the months and years ahead.
I want to give my hon. Friend a couple of minutes at the end of the debate to wind up, but I have a couple of points on the long term. Obviously, we are in a long-term process of decarbonising our electricity grid. That continues and will have a real impact over the long term for energy-intensive industries, and elsewhere. There is a lot of work under way, a lot of schemes, a lot of funding and a lot of Government subsidy that has already been announced, such as the £315 million industrial energy transformation fund, £40 million of which has already been awarded, including to steel companies such as Celsa, to brick manufacturers, to glass and to metal casting. The second stage will close on 6 December.
Chris Green
With the £96 billion investment in the railways—we have a debate on the headquarters of the Great British Railways to come—will the Minister do all he can to ensure that Severfield steel in my constituency gets its fair share of the contracts, whether that is for bridges or other infrastructure projects?
Lee Rowley
I thought I was about to be asked about the headquarters of Great British Railways. We are of course seeking to find an equitable distribution of support across the country.
On ceramics, my hon. Friend the Member for Stoke-on-Trent South will be aware of the establishment of a global centre for advanced technical ceramics, which is good news. We are also supporting some transformation in glass and there is extensive ongoing work on decarbonisation options, including in steel. We are working with trade bodies at the moment and look forward to announcements in due course.
I am grateful to my hon. Friend for bringing this debate to the Chamber. I am grateful to all Members for their constructive contributions. The Government are aware of the strength of feeling in the communities represented here and more broadly. We acknowledge the importance of those industries for the regions and for our country as a whole. We look forward to working with you all in due course over the coming months to see what is possible on these important issues for our country.