Rural Paper Industry

Iain McKenzie Excerpts

Wednesday 2nd July 2014 Westminster Hall

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is a pleasure to serve under your chairmanship once again, Mrs Riordan. I thank the Minister for coming along to give his thoughts on the Government’s position on securing and enhancing our rural economy.

Creating business opportunities and increasing jobs rightly continues to be an important focus of this Parliament. There is no greater challenge than bringing jobs and business to all areas of the UK, be they rural or urban. My constituency has both rural and urban communities, and the more rural areas are growing. Although those communities can be sustained by people travelling to towns and cities for employment, for various reasons we still need to provide work for the rural population.

With that in mind, I recently visited a new business venture in my constituency called West Coast Woodfuels. The business, which was set up in the hills behind the village of Inverkip, uses sustainable forestry management to produce and supply wood chip for biomass energy. However, the sustainable forest maintained for that purpose relies on servicing a limited number of biomass customers. The plan was always to establish a green industry, acknowledging that the UK’s forest and timber industries are virtually carbon neutral.

Forestry management maintains vital investment in rural economies and plays an important role in the construction, renewable energy, paper and tourism sectors. Historically, forests were planted, maintained and harvested to provide wood and building materials, as well as tools and timber for industry. Britain saw a serious decline in its forested land in the 19th century, when deforestation occurred at an alarming rate to meet agricultural and industrial demands. The 19th century also saw wood pulp from trees gradually replace other sources of fibre used for paper making, such as straw, grasses and rags. Our history shows that the recovery from world war two did much to focus minds on the need to rebuild industries and the economy. As a result, forests were intensively harvested primarily for timber production.

[Guy Opperman (Hexham) (Con)]

I congratulate the hon. Gentleman on securing this important debate. I speak as the representative of the constituency with the largest forest in the United Kingdom—Kielder. Egger, in my constituency, has a cross-border interest in Barony, which is in Ayr, and in Hexham. As a supplier of wood chip, it is very dependent on the businesses the hon. Gentleman is talking about. Does he agree that this and future Governments must consider the commercial forests of the future so that we have an ongoing forestry ecosystem?

[Mr McKenzie]

The hon. Gentleman is absolutely spot on: forestry must be managed for the future, to provide not only raw materials but jobs and industry in the areas I am talking about.

The trend towards deforestation has now been arrested, but even though the UK has favourable growing conditions, only 12% of its land is forested, compared with 28% in France and 32% in Germany. Since the 1950s, increasing quantities of paper have been made from recycled sources, but the rest comes mainly from virgin wood fibre from coniferous trees grown in sustainably managed and certified forests. On the whole, that makes good economic and environmental sense in the densely populated but under-forested UK.

Of the timber extracted in the UK, less than 5% is used in paper and pulp production, compared with about 11% in other countries. That timber is lower-grade conifer logs and forest thinnings. Higher-grade timber is generally used by other industries, such as construction and furniture making.

Clearly, the paper industry depends on trees and needs new, thriving forests. It is very much in the industry’s interests for trees and forests to be used sustainably and to remain available as a raw material for future generations and as a source of future employment. The industry employs thousands of people across the UK and indirectly provides even more jobs in sectors such as publishing and packaging. That helps to generate wealth, and it creates jobs in predominantly rural areas, where it can be the only source of revenue for local populations.

In many ways, the pulp and paper industry is a business model of sustainability, and 2013 was relatively successful for it—more so than recent years. Increased consumer spending helped the packaging sector and other sectors. Looking to the recent past, we see that peak employment directly in the paper industry was reached in 1959, when it employed 100,000 people. By 1960, UK paper consumption exceeded 4 million tonnes per annum for the first time. However, by 1981, imports of paper and board exceeded UK production for the first time. Since then, this employment has declined, along with the number of mills. However, tonnages have continued to increase. By 2012, there were 53 mills in the UK, producing an estimated 4.4 million tonnes of paper and board.

Paper mills use recycled paper to produce 70% of the fibre for paper making in the UK. However, paper can be recycled only a set number of times—I am told the maximum is about seven. After that, the paper loses its fibre and is no longer useful for making good quality paper, so forestry still underpins the industry.

Virgin pulp comes from northern England, Scotland and abroad, and 5% of harvested UK timber is used in paper making. As I said, UK timber can also be used in biomass energy production, making biomass an ever-growing additional competitor of the paper industry for new wood, and suggesting that more forests are needed. Forests are a renewable, sustainable resource. They are carbon neutral, and they also create pleasant environments for leisure activities. In the UK, there is consensus that improved forest management would increase rural employment.

What, then, of the impact of recycling as we steadily improve our performance on our recycling targets up and down the country? Since the 1950s, UK paper makers have steadily increased their use of recovered paper, and nearly 70% of the fibres used to make paper in the UK now comes from paper that has been collected and recycled. As I said, however, there is a limit to the number of times paper can be recycled. There is also an ever-growing and fiercely competitive market for recycled paper, so new pulp needs to be sourced.

It is not only the paper industry that requires access to new pulp. The UK packaging manufacturing industry also requires it. It has annual sales of £11 billion and employs 85,000 people, and represents 3% of the UK’s manufacturing work force. It is a powerful addition to those demanding access to new sources.

I have visited a packaging firm in my constituency. McLaren Packaging, which produces packaging for more than 100 whisky products, has invested in cardboard tube manufacturing with great success. In fact, most of the whiskies that are on display in shops or exported will feature distinctive packaging from McLaren Packaging in Port Glasgow.

The cardboard packaging industry’s main product segment, however, is corrugated cardboard boxes, with additional cartons and cases. Such products are made of three layers of cardboard sheeting, with a corrugated sheet in the middle, making the box more durable than standard containers. Cardboard boxes have a wide variety of applications and are used to package many products across a range of sectors. Its customers include manufacturers, wholesalers, storage owners and retailers. In general, demand for cardboard boxes correlates with demand for consumer goods as greater manufacturing output triggers a greater need for packaging.

In my part of the UK, forestry is sometimes described as the secret industry. About 40,000 jobs would disappear from the area if there were no forests or forest industries. Every week, some 4,000 lorry loads of harvested wood are transported to mills for conversion into timber for house building, quality paper and many other essential products. After felling, more trees are planted and the cycle continues. That makes forestry truly sustainable. It promotes economic activity in rural areas in ways that protect and conserve the natural environment and wildlife. Forests also support a network of interdependent businesses, including those of forest owners and managers who produce wood while creating wildlife habitats and providing recreation facilities. There are forest nurseries, where young trees are grown. In addition, contractors harvest the wood, and hauliers transport it, and there are businesses that process wood, such as the paper industry.

The development of wood-processing industries really took off in the 1980s. That was when the forests created during the middle part of the 20th century began producing significant volumes of softwood. However, careful management of the forests can also produce the energy for manufacturing of paper through energy biomass. Thus there is a natural resource that can not only be transformed into a product but can fuel the manufacturing process to create the product. More than half the energy used in the EU paper industry now comes from biomass, and the UK paper industry is using biomass with increasing frequency. That means that more forests will be needed to provide adequate supplies for both energy biomass and other industries, such as paper. Creating a rural paper industry next to a forest would seem as natural and logical as it was in the past to match up a mill with a stream for hydro power.

The European pulp and paper industry is in many ways a business model of sustainability, and it is largely rural.

[Guy Opperman]

The industry experts to whom I have spoken on both sides of the border are opposed to Scottish independence and the impact that that would have on the businesses we are concerned about. Does the hon. Gentleman agree?

--- Later in debate ---

[Mr McKenzie]

I thank the hon. Gentleman for bringing in the Scottish question, which I think will come into just about every debate from now until September. Yes, clearly, as he pointed out, in the context of the industry, independence would create another problem for the population of Scotland.

A need has been identified for more forests in the UK, and it would seem that a clear start could be made by creating more forests in the rural north of Britain. Related manufacturing industries could then be attracted to forested rural areas, bringing even more jobs and business to areas of the UK where we can tap into a sustainable natural resource. The Confederation of Paper Industries, which has 68 member companies employing 25,000 people directly, tells us that there is a need for access to new sources of paper, to sustain demand and enable the industry to grow. Also, the paper industry is said to support a further 100,000 jobs indirectly. The turnover of CPI member companies is reported to be in the region of £6.5 billion. Competition for recycled paper and the limits on the number of times paper can be recycled mean that new sources are increasingly in demand. Great quantities of paper are never recycled—we need think only of the volume of paper being flushed away each day that will never be recycled.

Will new technologies ever truly replace paper? That idea is used as a counter-argument—against increasing the number of sources of new paper and pulp fibre. We strive for the paperless office, but we are miles away from achieving it. Merely looking around Parliament provides evidence of that. Paper and card will always be necessary for packaging. Paper is more environmentally undisruptive than plastic. Even paper for print and writing is unlikely to die out, despite e-books. Some 80% of social network users—diehard committed onliners—say they still require paper. Demand for paper and paper products can only increase. Even the mighty iPad requires packaging.

Rural and semi-rural areas can only benefit from sustainable management of their forests and attracting a paper industry with access to new material and an energy source. That would hopefully mean an increase in jobs, business and population for rural areas. Let’s try to see the wood from the trees.