Energy-intensive Industries

Chris Green Excerpts

Wednesday 24th November 2021 Westminster Hall

[Chris Green (Bolton West) (Con)]

It is a pleasure to serve under your chairmanship, Ms Nokes. I congratulate my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) on securing such an important debate at such an important time. I wholly agree with and endorse much of what has been said so far.

One of the key starting points for energy-intensive industries—the focus of this debate—is having affordable energy, but we must have reliable energy too. One of my concerns is that the energy mix we get in the coming years must be reliable, not just in its provision—there are obvious concerns with wind turbines and solar panels—but in the costs. We ought not to be susceptible or vulnerable to these massive price fluctuations that can jeopardise businesses.

I do have a broad interest in the nuclear sector, as a north-west Member of Parliament. Much of the UK’s nuclear industry is based in the north-west of England, and the Springfields fuels centre, near Preston, is not too far away. Warrington is also a key centre. If we go down the small or advanced modular routes, the leadership scene in Rolls-Royce, in Derby, will also provide very powerful growth within the UK. If we can capture the market early on and have that manufacturing and intellectual property side in the UK, we can then sell further afield.

[Sir William Cash]

Does my hon. Friend agree that the nuclear delivery group is doing an extraordinary job? In the last two months, we have moved, very substantially, down a strong, stable route towards getting better nuclear delivery.

[Chris Green]

I agree entirely. It is welcome that the Government have renewed their focus on nuclear organisations, and that groups of colleagues within Parliament are increasingly giving that focus to the nuclear sector. I appreciate that is not universally appreciated, but the narrative and strength of argument is building up for the sector. If we want to have energy-intensive industries, we need that strong foundation of reliable energy. Even if it is a little more expensive than some alternatives, that certainty of production is immensely important, because if a business is going to invest, it has to have that confidence in the first place.

When we discuss levelling up, we have to think about the energy-intensive industries in the north of England and the midlands from ceramics to the steel industry, glass and chemicals. We have to think of levelling up as focusing in a significant sense on manufacturing—and heavy manufacturing—that requires that intensive provision of energy. It would be a positive thing if the Government set out more clearly their support for those sectors. I was concerned with the Cumbrian coal mine, which was going to produce metallurgical coal for the steel industry, but that has been challenged, not because it is going to produce thermal coal, which is a different type of coal used for different reasons. We have to have that clarity and be able to support the industry when it needs it.

We have had a trend over many years of offshoring manufacturing and allowing other countries, perhaps with lower environmental standards than ours, to take our manufacturing industry. If we are looking at COP26 and the agenda that so many countries around the world focused on and championed, we have to recognise that in recent years we have been exporting manufacturing, therefore manufacturing jobs, carbon and other emissions for domestic consumption. We do not have the emissions in the UK, but we are still creating those emissions overseas.

My hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) captured the sense very well when she talked about free markets. We all ought to champion and support free markets, but we ought to be cautious when other countries around the world do not champion free markets and do not have the same appreciation of a level playing field that we do.

I welcome the Government’s direction of travel. I wish they would be even more supportive. There will be many more ways, especially listening to my hon. Friend the Member for Stoke-on-Trent South, to make it more competitive to invest in energy-intensive manufacturing in the United Kingdom.

--- Later in debate ---

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Efford. I congratulate the hon. Member for Stoke-on-Trent South (Jack Brereton) on bringing forward the debate. At the outset, he rightly highlighted the energy supplier crisis. I am sure he agrees that the Government need to do more about this crisis. He highlighted coal and the bygone days of coal, and certainly that should be a reminder to Government in terms of the lack of support that was given when the coalmines were shut down. It still has a legacy, and it is a legacy that lives on in my constituency. It is something that cannot be repeated, and that is why we need a just transition commission for the UK Government, like the Scottish Government have. We need that support as we move from a reliance on fossil fuel towards renewable energy.

The hon. Member for Stoke-on-Trent South is a vocal advocate for the ceramics industry, and he should be commended for that. I hope the ceramics industry has a strong future because we need to retain all the manufacturing that we can. Support like that is welcome, and hopefully the Government will listen. The key thing is that there needs to be support for decarbonisation. Other Members spoke about tariff reductions and reducing energy costs. Energy is too high at the moment, but the Government really need to be helping industry decarbonise, and proper investment and support from Government is required. That should put some of these industries ahead compared to those elsewhere. That is where, for me, the investment needs to come from Government to help them decarbonise.

We heard from the hon. Member for Newport East (Jessica Morden), who is clearly a big advocate for the steel industry. I was pleased to visit the works in her constituency, and I repeat: investment is needed to help the steel industry decarbonise. That is the future. We talk about clean green steel, and that is where Government investment is needed.

The hon. Member for Bridgend (Dr Wallis), who is not in his place, also spoke about the steel industry and highlighted the fact that there is not enough money in the UK Government’s hydrogen strategy by comparison with members of the EU. I agree with him that more needs to come from the UK Government in terms of the hydrogen strategy.

We heard from the hon. Member for Aberavon (Stephen Kinnock), who has also always been a strong supporter of the steel industry and a strong advocate in this House. His key message to the UK Government seemed to be that it is not a sunset industry, and I agree. In fact, that message was so strong that he said it twice—in an intervention and in his speech—and I agree: the UK Government need to support the steel industry.

The hon. Member for Scunthorpe (Holly Mumby-Croft) is another advocate for the steel industry—I am kind of repeating myself here, but investment in clean green steel and decarbonisation is important. I commend her for being the only one who got something out of the Prime Minister’s speech on Monday other than Peppa Pig, so congratulations on that.

We heard from the hon. Member for Strangford (Jim Shannon), who always turns up at these debates and always makes a useful contribution. Again, he highlighted the importance of manufacturing and Government support for decarbonisation.

What I took out of the speech by the hon. Member for Bolton West (Chris Green) was that nuclear energy is indeed more expensive. He is an advocate of nuclear energy, but it is more expensive. We are talking about taking away tariffs for renewable energy, but nobody is talking about taking away tariffs for nuclear energy or addressing the eye-watering costs.

[Chris Green]

Energy costs are clearly important, but reliability and stability of supply is also a key feature, which nuclear power would provide. Does the hon. Gentleman think that that is an important feature that we should have?

[Alan Brown]

That inflexible reliability that comes from nuclear energy means that, while we talk about the wind not blowing, the amount of base-load it pumps on to the grid means having to curtail other, renewable energy sources, because nuclear is so inflexible. So no, I do not agree. That is the problem: nuclear is the wrong energy to mix with renewables, and it really is not the future.

I was talking about tariffs and the cost of nuclear energy. There is £1.7 billion in the Red Book just to develop Sizewell C, before we get to the final investment decision. Think what that £1.7 billion could do for the steel industry, the ceramics industry or decarbonisation—and that is only to get to the final investment decision, before the Government then rush to spend £20 billion on the capital investment for Sizewell C. Then that will be added to our electricity bills under the RAB—regulated asset base—model, for the 10 to 15 years of construction of the nuclear power station, and then a 60-year contract thereafter. So do not let us talk about taking away levies for renewable energy; let us look at what nuclear energy will cost us. I urge the Government to spend that money more wisely, rather than on nuclear energy.

Finally, the hon. Member for Stoke-on-Trent North (Jonathan Gullis), who is obviously another advocate for the ceramics industry, made an interesting point about the lack of ceramics from Stoke-on-Trent in this place. I suggest to him that he make an investment: buy a lot of mugs and pottery and donate it to this place. That will help the industry and promote it here.

I am coming to the end of my remarks, and I do not want to be too flippant, because this is a very important debate. We need to see support for ceramics and manufacturing, and we need to look at how we decarbonise. Carbon capture has been mentioned. I urge the Minister to reconsider the disgraceful decision to make the Scottish carbon capture cluster a reserved cluster. That should have been given the go-ahead and it should have been one of the track 1 clusters. It incorporates carbon capture, hydrogen production, which has been mentioned as part of the future of decarbonisation, and direct carbon capture from air. It is a really important, innovative cluster and it should have been given the go-ahead. Why was it not selected? I want the Minister to answer that. Equally, I would like to hear what proper investment will be made available to help and support the manufacturing sector to decarbonise.

--- Later in debate ---

[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.