Economy: North-East England

Earl of Shrewsbury Excerpts

Thursday 31st January 2013 Lords Chamber

[The Earl of Shrewsbury]

My Lords, I congratulate my noble friend Lord Bates on securing this important debate this afternoon. I shall keep my comments brief. They do not relate specifically to the north-east region, but the type of situation I shall describe is commonplace throughout industry and, doubtless, affects industry in the north-east just as it affects industry in every other region of the UK.

My home county of Staffordshire was closely involved in the roots of the industrial revolution, and today is an area within the West Midlands proud of its reputation for industrial innovation and skills. Unemployment there is considerable, and SMEs are struggling to survive and prosper. This must be exactly the same case as that affecting the north-east.

JBMI Group Limited, based at Hixon, near Stafford, is a highly successful medium-sized business employing 67 people, turning over £33.7 million a year and making a pre-tax profit of a very healthy £2.74 million. Over the years since the company was founded, it has won numerous awards for its achievements. The company therefore makes a very significant contribution to both the local and national economy. Without doubt, this is a true story of commercial success. JBMI's expertise lies, in general, in the field of metal recycling, but more specifically in that of the manufacturing of alloys and the recovery of those metals. Its product is exported to numerous countries and in the UK it supplies product directly and indirectly to Jaguar Land Rover and Toyota—probably also to Nissan as well, in the north-east—to name but two or three global companies.

In addition, JBMI has made significant investment in developing a suite of sustainable products, manufactured from a wide range of waste materials which would otherwise be disposed of in massive quantities to landfill. JBMI's products have to meet the demanding customer specifications and product standards of the relevant construction-related industries that actively seek these products. The JBMI processes exemplify how British industry can effectively and sustainably recycle in order to meet our EU obligations in that respect. They thus make a significant contribution to the vital agenda of landfill diversion—an area where sadly, as a nation, we still lag behind others. This is all highly commendable; good for the environment and good for the economy.

However, as the correspondence in this file demonstrates, JBMI has invested very considerable sums to prove and justify that its processes and recycled products comply with the demanding standards and criteria laid down under EU law. It has sought and received specialist legal advice on this complex area, both from its solicitors, Semple Fraser, and from one of the leading QCs in this field. At almost every stage, however, it has met systematic resistance, long delays in timing of responses, delaying tactics and completely irrelevant questions and arguments from the Environment Agency and specific officers in particular.

It is clear from the dealings between the company and the Environment Agency that the agency is inexplicably hostile to this worthwhile project, and for no sound environmental reason. It appears that we have a government agency working way beyond its remit of regulation and moving into law-making, which is surely the remit of the other place and this House. In addition, it is ultimately driving the company to seek a judicial review—an unnecessary and costly process which will be funded by the public purse.

In the mean time, a competitor has suffered from no such difficulties from the Environment Agency and, it would appear, has been treated by it in a completely different and relaxed manner. It appears that the agency is acting in a manner which even to the most naive would be classed as grossly unfair, inconsistent, discriminatory and anti-competitive. The result to date is that JBMI has lost out on business that is likely to have amounted to over £1 million in lost corporation tax revenues for the Government per annum and, in employment terms, some 15 to 20 extra jobs in an area of the country that is crying out for employment opportunities.

While I have had to oversimplify the situation in the pursuit of brevity, I mention it to bring attention to all such similar problems facing industry not only in the Midlands and the north-east but doubtless in all the other regions of the UK in which industrial activities take place. It is holding back employment and the economy. I am aware that JBMI’s lawyers currently have a number of similar cases of oppressive and unnecessary “overregulation” by the agency of conscientious British companies, for no obvious environmental reasons. This particular case with this particular company is the most obvious but it is not the only one. The fact that this is applied in an uneven and inconsistent manner as between different companies and at a time of woeful economic conditions for the people who create the wealth, and the tax revenues, in this country is nothing short of scandalous. I should be grateful if my noble friend the Minister would use his best endeavours to convey this message to his ministerial colleagues at the Environment Agency.