Critical Minerals Strategy
Debate between Chris McDonald and Gareth Snell(4 days, 20 hours ago)
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Chris McDonald
I am delighted that my hon. Friend has raised the issue of copper; I raised it nearly 10 years ago. Copper was not included in previous strategies because it was not regarded as a critical mineral. I am pleased to say that the new strategy creates a new category of growth minerals: minerals that do not fit the definition of critical minerals but are important for the future, and which we need in order to grow. The recycling and secondary refining aspect is also a priority for me; all of our copper is currently extracted and taken overseas for smelting and refining, but there is a good opportunity for us to do that in the UK.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The Minister talks about things that are smelted, melted, forged and formed, and he will know that ceramics are crucial to those processes. He will also know that to deliver his ambitions for growth and recovery, and for virgin production, there will need to be an expansion of those processes. Is he having conversations with British Ceramics about how we can get refractory level ceramics in a better position to compete? Today’s announcement of the British industrial competitiveness scheme mentions foundational industries with a “certain threshold” of electrical usage. He will know that the processes he needs to get the strategy that he wants require gas, so are conversations happening about how the gas prices will underpin this strategy as well?
Chris McDonald
My hon. Friend correctly points out the essential role of ceramic refractories in the production of any high temperature processes, including critical minerals. I would be very happy to meet him later this evening to discuss both issues further.
Specialist Manufacturing Sector: Regional Economies
Debate between Chris McDonald and Gareth Snell(1 week, 2 days ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)
It is a pleasure to serve under your chairmanship, Dame Carolyn. I thank my hon. Friend the Member for Calder Valley (Josh Fenton-Glynn) for securing this debate, and for his opening remarks.
Hon. Members may have thought, when they heard that Stoke-on-Trent had been “moulded by ceramics”, that it was the worst joke they would hear in the Chamber today, but I will try my best. When I heard my hon. Friend refer to valve valley, I wondered, as a cornet player, whether it was a reference to the famous West Riding brass bands: the Brighouse and Rastrick brass band, the Elland Silver band and my personal favourite, the Friendly band of Sowerby Bridge. I am sure that they use their cornet valves to lower or raise the tone just as effectively as we did in this debate. Cornet valves, of course, respond well under pressure—I shall see how I do with that.
Maybe, after this debate, the particular expertise of the valve industry in Calder Valley will be better known to the country. It is not difficult to see the impact that manufacturing, and the valve industry in particular, has on Calder Valley. I have seen, as I am sure those watching will have, the pride and importance that hon. Members across this House recognise in the manufacturing industries in their particular areas. These companies are the heart of British manufacturing.
In the valve industry, we have companies such as Hopkinsons, established in Huddersfield in 1843, which continues, as part of Trillium Flow Technologies, to export valves globally. Its valves are used in applications ranging from boilers to power plants, in oil and gas, and in petrochemicals. In Fort Vale, founded in Calder Valley, we have a global manufacturing presence making valves for transportable tanks. Last year, Fort Vale received its fifth King’s award—formerly the Queen’s award—for international trade. Blackhall Engineering is another astonishing story of a link between our Victorian heritage and modern engineering. It supplies valves for the New York City water board, replacing originals installed by its predecessor company a century earlier.
We need to recognise the local pride in Calder Valley, and in all parts of the country with a strong manufacturing heritage, and recognise the economic opportunity of wages and real value that manufacturing brings to these communities. But there are, of course, significant challenges, including those that hon. Members raised in this debate. I wish to address the challenges in procurement, skills and energy costs, as well as the challenges that have been mentioned for small businesses.
The framework through which the Government are working with industry and manufacturing is, of course, our industrial strategy, which attempts to respond to those challenges and to deliver productivity and growth, and is unashamedly place-based in the regions that matter to manufacturing. Some 84% of manufacturing jobs are located outside London and the south-east. I want to mildly disagree here with my hon. Friend the Member for Stoke-on-Trent South (Dr Gardner), because she mentioned deindustrialisation—a word that I do not particularly like to use in this sense. The UK is very much an industrial country; we have just chosen to locate our industry elsewhere, and part of my mission is to ensure that we regrow and restore that manufacturing here in the UK. I know that she would agree with that.
The hon. Member for Taunton and Wellington (Gideon Amos) spoke of regional growth, which is also vital. Our industrial strategy is about securing competitiveness not only for sectors, but for regional prosperity, and we recognise that manufacturing is key to the resilience of our national economy.
Gareth Snell
A lot of Members have talked about the importance of defence manufacturing; the Minister has talked about our economic resilience, but a big part of this is our sovereign capability and our national security resilience. I know that he has done work on that, so can he say more about how his work aligns with the work of the Ministry of Defence team to ensure that the manufacturing capability in the UK is about not just economic growth, but our national security and safety?
Chris McDonald
That point is well made. Of course, alongside our industrial strategy, we have our defence industrial strategy. When I come to talk about procurement, I may say more about that, and many hon. Members have talked about defence.
When we talk about our manufacturing sector, it is important to highlight some of the headline statistics. Manufacturing pays higher wages and has generally higher productivity in the areas where it is located and, when it comes to the balance of trade, although around 10% of our employment is in manufacturing, it accounts for around 50% of our exports. Those outputs, jobs and exports consist of thousands of specialist manufacturers, large and small, up and down the whole United Kingdom. Those exports are global and, as we have heard, we also export into space.
On procurement—I know that this area has been a major concern for many hon. Members, and particularly Government procurement—I have great sympathy for the comments of my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell), and I am happy to pursue the specific issues that he raised. I see it as vital to our manufacturing and industrial sectors that we ensure that the money that we as a Government, or our regulated sectors, spend is significant and is concentrated as effectively as possible in the UK, for both its economic and its social value. We need to raise awareness of the opportunities. We must ensure that those opportunities are open to UK manufacturers and that our UK companies are competitive enough to win those contracts. The industrial strategy plays a part in ensuring that those companies can do that.
To increase business investment, we must also ensure that we have a real market opportunity, both at home and overseas. Our clean energy strategy is introducing measures aimed at directly increasing UK beneficiaries in Government procurement. The clean industry bonus for offshore wind, for instance, is designed to encourage investment in Britain’s coastal industrial areas and supply chains. We also want to see robust local content targets. We are examining market demand guarantees to encourage UK scale-ups and introducing a clean energy supply chain fund to support UK-based clean energy manufacturing.
The defence industrial strategy, which I mentioned earlier—the defence industry is, of course, another user of valves—sets out a major reform agenda for procurement to grow our UK industrial base. We will be speeding up procurement processes and reducing bureaucracy, while ensuring greater visibility of defence procurement and taking steps to ensure that small and medium-sized enterprises will have greater access to our supply chains. Our procurement and capital programmes are key to anchoring manufacturing here in the UK and then encouraging businesses to secure investment and export overseas.
UK manufacturing, however, ranks just 24th globally for robotics and automation. Here I move to the topic of productivity, which is of course a key element in profitability and competitiveness. That is an area where, as a nation, we need to work more. If we are not working digitally, we cannot adopt automation and move as fast as our competitors. Our Made Smarter adoption programme, with up to £99 million of additional funding, will help with this. It will support more manufacturing SMEs to take up new technologies and improve their digital capabilities. We have had reference today to the High Value Manufacturing Catapult, which I know from personal experience is a great supporter of improving competitiveness, robotics, automation and productivity in our supply chains.
Skills was also an important feature of today’s debate. They were raised by my hon. Friend the Member for Calder Valley, with his inspiring story of Stuart Billingham —maybe we all need to see more Stuart Billinghams in our lives. The hon. Member for East Londonderry (Mr Campbell) also mentioned regional skills development. I know that persistent skills shortages and the availability of good applicants are a concern felt across our manufacturing sectors. That is certainly an area for Government and industry to work closely together on, to encourage talented people from across the UK to seek jobs in our manufacturing sector. Fort Vale in Calderdale has a strong tradition in apprenticeships, and I understand that it receives over 140 applications each year for the opportunities it provides. That experience of high numbers of applications for apprenticeships is something I see across the country. I applaud the work of the West Yorkshire Manufacturing Services charity and its partnership with Calderdale college on the Industry 4.0 hub, which addresses exactly those digital issues.
Chris McDonald
Small business owners might be concerned, but I know from personal experience that with the right level of support, it is perfectly possible to manage a business with these employment rights. I suggest support, rather than scaremongering, is the way to go. We heard from the hon. Member for Tiverton and Minehead (Rachel Gilmour) about the support a previous local industrialist gave to their community. Although I commend that, Labour Members think that good pay and conditions are a right rather than a gift.
Energy costs are clearly the major competitiveness issue for industry. I agree with the shadow spokesperson, the hon. Member for Reigate (Rebecca Paul), about the lack of competitiveness of UK energy costs—she cited a figure from the International Energy Agency showing they were 46% above European averages, and that is a figure I recognise. However, our clean power mission will ensure that we are weaned off the international gas markets, to which we were enslaved by the previous Government for such a long time. The shadow Minister mentioned Mossmorran, which is a good example of a business that sustained losses for years and was unable to justify investment as a result of the previous Government’s neglect of manufacturing and industry.
We recognise that, beyond our clean power mission, we must do more and act quickly to support sectors with high growth potential and significant exposure to high electricity costs. We are increasing the support available for energy-intensive companies through the British industry supercharger, and from 2027 we will introduce the new British industrial competitiveness scheme, which will reduce electricity costs.
Gareth Snell
I make my regular plea to the Minister to consider extending the supercharger scheme to energy-intensive industries that are not currently covered, ahead of the introduction of the British industrial competitiveness scheme.
ExxonMobil: Mossmorran
Debate between Chris McDonald and Gareth Snell(1 week, 3 days ago)
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Chris McDonald
As I pointed out earlier, the business has suffered from a lack of competitiveness for the last five years, in part due to the relative lack of competitiveness of UK energy prices, and it is important to point out the things that we have done and are doing to address that. We have the energy-intensive industries support scheme and the supercharger scheme, which is providing up to 90% relief. We also have the British industrial competitiveness scheme, which will reduce prices for over 7,000 businesses by £40 per unit of power over a period of time. Of course, with this business, the energy input was gas. We are competitive on gas with Europe, but the issue has been the much cheaper gas prices in the US; the ethylene imports coming into Europe are primarily coming from the United States of America. On that basis, as an exporting business in the UK, the competitiveness issues are fundamentally why the business does not see a future in the plant.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
I think any of us who represent an industrial constituency cannot help but feel a tinge of sympathy for my hon. Friend the Member for Cowdenbeath and Kirkcaldy (Melanie Ward) this evening. We have all seen factories and manufacturing businesses in our constituencies close. While I accept what the Minister says about the fact that we are competitive on gas price with Europe today, the reality is that the gas price today is significantly higher than it was three, four or five years ago. Often the products that are being made in these places cannot absorb those overheads, which makes us uncompetitive on the world market. We have to look at how we can subsidise those costs here.
On industrial electricity, we are out of step with the rest of the world and we need those prices to come down. The Minister mentioned the British industrial competitiveness scheme, but that will not come online until 2027. He mentioned the energy supercharger scheme, but that does not include whole swathes of industry, including ceramics. Is there anything that the Minister can do in the short term to ensure that we end up with help today for those sectors that need it, so we can prevent future closures of big manufacturing sites?
Chris McDonald
I know that my hon. Friend is particularly concerned about the ceramics sector, but his comments could read across to other energy-intensive sectors. I said that once quality costs have been taken into account, UK gas prices are competitive with the rest of Europe, but in the sector that he mentions, many of those imports come from Turkey. In some other sectors in the chemicals industry, the issue is about over-capacity, over-supply and the dumping of products in the UK that have been produced in the far east—there are quite a number of issues, and I continue to work on all of them across the heavy industry sector to ensure that we can improve the business environment as a whole.
Oral Answers to Questions
Debate between Chris McDonald and Gareth Snell(4 weeks, 1 day ago)
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Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
To make steel in this country, we need ceramics. To build houses in this country, we need ceramics. Five of the eight industrial strategy growth sectors require ceramics. Ahead of the launch of the British industrial competitiveness scheme, might there be any interim relief from energy prices for energy-intensive industries?
Chris McDonald
My hon. Friend is a fantastic champion for ceramics. This is only my second time at the Dispatch Box, but it is also the second time that he has asked me about this. He and I have already met to discuss it, and I am happy to have further conversations with him and industry about everything we can do, as soon as possible, to support the sector with its energy costs.
Oral Answers to Questions
Debate between Chris McDonald and Gareth Snell(1 month, 2 weeks ago)
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Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Chris McDonald)
I am delighted that my first outing at the Dispatch Box is to answer a question from my hon. Friend, and on a topic that we have worked on so much over the past year. We on the Labour side know that net zero is the greatest economic opportunity of our generation. Unlike the previous Conservative Government, which allowed industry to wither, we do not accept that decarbonisation means deindustrialisation. Through our modern industrial strategy, we are working with business to help it to invest, grow and meet our climate ambition.
Gareth Snell
I congratulate the Minister on his well-deserved elevation to the Front Bench. He has worked quite hard with the ceramic sector on this issue. Energy-intensive industries, such as ceramics, are at the mercy of an international gas market over which very few countries have direct control, but one of the things that could help is looking at electricity costs. May I therefore encourage the Minister, in his new role, to consider expanding eligibility for the supercharger scheme so that energy-intensive industries, such as ceramics, can benefit from the support available until the supercharger scheme comes online in 2027?
Chris McDonald
My hon. Friend raises an important point about the scope of the supercharger, which we are going to look at in 2026. He will be aware that some parts of the ceramics supply chain can access the supercharger, but I too am concerned about the impacts of high energy costs on the ceramics sector. I will meet the head of Ceramics UK this month, I am chairing a meeting of the Energy Intensive Users Group, and I look forward to further engagement with the sector in the new year.