Ian Paisley
Main Page: Ian Paisley (Democratic Unionist Party - North Antrim)Michelin Factory: Ballymena
Ian Paisley Excerpts
Ian Paisley (North Antrim) (DUP)
Thank you, Mr Deputy Speaker, for calling me to speak in this important debate about jobs in my constituency of North Antrim.
Tuesday 3 November was a sad day that will be remembered by up to 1,000 people in the Ballymena area. The Michelin factory, which is one of the few public limited companies in Northern Ireland, has produced tyres in my constituency since 1969, and the news that it was to close broke on 3 November. The 860 directly employed workers—dedicated manufacturing staff—learned of their fate that day. More than 500 other people who are indirectly associated with the factory are also affected by that apocalyptic news.
I want to put the issue in context. If my constituency happened to be called Northampton rather than North Antrim, or if Ballymena were called Birmingham, we would be talking about the loss of 30,000 jobs. That is the job loss equivalent. It is important to put the announcement in its national context. That is why I welcome the fact that it is the Minister for Small Business, Industry and Enterprise, not a Northern Ireland Office Minister, who will respond to the debate. I would, of course, have welcomed a Northern Ireland Minister to the Dispatch Box, but it is important to view the job losses in their national context.
A few weeks ago I expressed concern that Northern Ireland was in danger of being viewed by this House as a place apart. Our Province’s peculiar employment issues are sometimes regarded as unrelated to the national picture and national politics.
Sammy Wilson (East Antrim) (DUP)
Does my hon. Friend agree that Northern Ireland is not that different, and that what is happening in Northern Ireland—whether it relates to Michelin in his constituency or to Caterpillar in my constituency—is no different from what is happening in other parts of the United Kingdom? Energy intensive industries are being hit by an energy policy that is making energy much more expensive for them than it is for our competitors, and that is putting us at a competitive disadvantage.
Ian Paisley
Many of the employees of the Michelin plant in Ballymena hail from East Antrim. My hon. Friend has put his finger on one of the key issues, which I hope to return to in a little more detail during the course of my speech. He has identified one of the key reasons why this issue is of national importance and has to be addressed nationally. It would be very easy to say that it is a matter for the devolved Administration and that they should sort it out, but this matter is beyond their reach. It would be a mistake to think that our employment policies are a place apart. They are of national importance.
A year ago, the loss of 1,000 jobs in another factory in my constituency was announced. In the wake of the two announcements—and, indeed, of the Caterpillar announcement in my hon. Friend’s constituency—several hundred jobs are being lost year in, year out in the manufacturing sector. That is why I described the announcement by Michelin on 3 November as apocalyptic not just for my constituency, but for the Northern Ireland manufacturing sector.
Before the closures, my constituency boasted of plus 20% of Northern Ireland’s total manufacturing jobs, but come 2018, when the factories close, it will be sub 20%. That will have a devastating impact on local employment, local confidence, local spend, local schools, local businesses all around the district. By 2018, more than £100 million of wages will have been taken out of my local economy, meaning that £100 million will no longer be spent in local shops and the local community. The local economy is renowned for its thriftiness and the local community is renowned for being very proud of its work ethic, but those huge pillars of employment have been slowly but surely knocked down. That will have an impact on confidence, and the Minister does not require me to spell out the effect of that on a community or the impact of such a loss.
Lady Hermon (North Down) (Ind)
The hon. Gentleman will be well aware, as will other hon. Members, that we have just had the final Committee stage of the new Trade Union Bill. Will he give us an insight into how helpful—not otherwise, I hope—trade unions have been in the Michelin factory and how positive they have been in looking after their workforce?
Ian Paisley
That gives me the opportunity, on the back of the intervention by my hon. Friend the Member for East Antrim (Sammy Wilson), to pay tribute to Unite the union for the great work it has done in my constituency. I have had regular meetings with Unite over the years since I became a Member of Parliament, and I have a very good working relationship with it. It is dedicated to ensuring that manufacturing is maintained there, which is why it has been incredibly flexible about the workforce agreeing to reduced hours over the years. It has been very helpful about working conditions that people would not normally tolerate: it has been prepared to work with companies and help them to bring working conditions up to a standard in their own time through investment on their own terms. It has been incredibly helpful, so this gives me the opportunity to pay tribute to the unions with which I have worked both on this factory closure and on other serious issues. In fact, what has been very helpful has been the sense of warmth—it is hard to find another word for it—felt by some of the employees from their union actually standing up for them, and coming out and saying, “Look, how can we help? How can we embrace this situation and try to address some of the key issues?”
Another organisation that also stands out for praise, particularly with Michelin, is the Prince’s Trust. It has already made itself available to all the employees in the factory concerned. It has identified 80 people between the ages of 18 and 30 who were probably looking forward to a lifetime career of making tyres in the factory for the next 40 years, as their fathers did before them, but are now expecting not to have a manufacturing job. The Prince’s Trust, along with the unions, has been very useful in trying to say: “Let’s see if we can find a way of helping these young people become entrepreneurs and to find new jobs in the years ahead.”
Jim Shannon (Strangford) (DUP)
I congratulate my hon. Friend on bringing this matter before the House for consideration, and I commend him for the hard work that he does on behalf of all his constituents all the time, but especially on this occasion. One of the things that concerns me is the redundancy packages. Will he confirm that the redundancy packages offered will be such as, first, to allow people to retrain, but secondly, to be equally as helpful for those on the factory floor as for those at managerial level? I am a wee bit concerned that management sometimes get better redundancy packages than workers.
Ian Paisley
That is a very helpful intervention because it allows me to put on the record that the first thing I raised with the employer when the announcement was brought to my attention was, “How are you going to look after the workers that have made you billions of pounds as an international company over the years?” I am pleased that Michelin put into its statement on 3 November a commitment that the support from the factory will include enhanced redundancy payments and a retraining package, as well as the deployment of what is called the Michelin development community fund. I have managed to help to secure an additional £5 million for my constituency, which will allow for the retraining of people and will help them to set up local businesses. That fund has been used over the years to create an additional 400 jobs that are not associated directly with Michelin. I hope that the deployment of that fund over the next 10 years will see job opportunities slowly created for these people, who would otherwise be told that they do not have a job.
It must be stressed that Michelin will make job offers to those who feel able to travel to Dundee or Stoke on the mainland, although those jobs will not be in the manufacturing of large truck tyres, which is what we have done in Ballymena. I imagine that very few people will do that, but at least those job offers will be made.
Kate Hoey (Vauxhall) (Lab)
I congratulate my hon. Friend on securing this debate. If this was happening in any constituency on the mainland, it would be a huge story. Can he explain very simply why Michelin has decided to close the factory and move to two other parts of the United Kingdom, rather than to move out of the United Kingdom?
Ian Paisley
I thank my hon. Friend, who shares my passion for the North Antrim constituency, given her roots in County Antrim. She will have been contacted by friends and family who have been affected by the closure. I appreciate the support and encouragement she regularly gives me to continue to fight for the interests of my constituents.
Michelin has identified three key reasons why it has to close the factory, and they are sad reasons. As I have said, I am glad that the Minister for Small Business, Industry and Enterprise is here and that the Government see that there is something that they can do for us nationally. The Michelin statement put three key reasons into the public domain.
The first reason was as follows:
“The proposal to run down the truck tyre factory in Ballymena has been made in the light of the significant downturn in demand for truck tyres in Europe since the financial crisis of 2007”.
That is beyond the control of anyone on these Benches. It is a fact of life that there has been an economic downturn. For 20 years, the factory in Ballymena made truck tyres for the north American market. That market was taken from it through an internal decision by Michelin and those truck tyres have since been made elsewhere in the Michelin portfolio. After losing that market, Ballymena was solely making truck tyres for Europe. The downturn then hit us with a vengeance and we are reaping the consequences. The demand for truck tyres has decreased by more than 5 million tyres a year. That has had a catastrophic effect on the business.
The second reason Michelin put into the public domain was
“the huge influx of tyres made in Asia, which have doubled in the last few years, and increased competition.”
Most of those have been made in Korea. The workers in my constituency never feared competition or the need to be competitive. They believed in the quality of their product, which was of award standard. However, when a cheap tyre comes in during an economic downturn, it has a devastating effect on business.
The third reason was that the tyre building machines at Ballymena were not capable of making the new standard of tyres. An investment of at least £50 million was needed to reappoint the factory. The company had to decide whether to make that investment or cut off the Northern Ireland arm and move everything to the mainland. That goes to the heart of the point that my hon. Friend the Member for East Antrim made. Energy costs are so astoundingly high in Northern Ireland that they forced the hand of the company when making that decision. I will come on to energy costs in a moment.
The Member for Vauxhall (Kate Hoey) said that if this had happened in any other part of the United Kingdom, there would be huge interest. I welcome the fact that there are 16 Members in the Chamber for this debate. I salute every one of them for being interested enough to turn up. Usually when we come to the Adjournment debate, apart from my hon. Friend the Member for Strangford (Jim Shannon), no other MP makes a contribution. I know that, at times, the Minister feels as if she is being stalked by the hon. Gentleman. I pay tribute to the fact that there is wide interest in this debate, and I am delighted that the hon. Member for Ealing North (Stephen Pound), who has visited my constituency, is also here.
Danny Kinahan (South Antrim) (UUP)
I congratulate the hon. Gentleman on securing this debate. Did we get any early indication that this cut was going to happen? Had the company spoken about the workings behind this move? Did the Minister in Northern Ireland know that it was happening, and was he able to offer any support? What was going on between the Minister and the company that allowed this to happen without any of us knowing? The hon. Gentleman has already indicated that there are many good reasons for why it was happening, but we did not seem to know when or exactly why at the time.
Ian Paisley
I want to be gentle in the way I respond to that. It would be easy to stand here and blame people. I could blame the local Minister, Invest Northern Ireland and everyone else but ourselves, but that is the coward’s way out, and we must make that clear. That is not the response that employees in Ballymena, North Antrim, South Antrim and East Antrim need. My constituents will not be bought off with the cheap excuse that this is someone else’s fault. They are intelligent people who understand the word “market”.
In the last year, my constituents have witnessed a Goodyear tyre factory close on mainland Britain, and they know the pressure that the industry was under. At one point they were reduced almost to a three-day week. This was not a shock; what was shocking was the fact that eventually the decision was made on the day it was made, but there was a lot leading up to that decision. What people want now is a comprehensive strategic response to get things moving again, and it is important that we hear that from the Minister.
The hon. Member for South Antrim (Danny Kinahan) made a number of points that it is important to address. The key issue behind why this factory has been under so much pressure is electricity prices in Northern Ireland—the underlying issue is energy costs. To give one stark statistic, it is 15% more costly to manufacture in Northern Ireland because our electricity costs are 15% higher. That point has been made to me over and over again, and it has driven the issue home.
The hon. Gentleman asks why this closure was such a shock and whether discussions were going on. I have an email that was sent to me in 2013 from the then Ballymena plant manager, Wilton Crawford. I raised this issue with him, and he said that the
“No.1 cost threat to our long-term sustainability”
for manufacturing in Ballymena was electricity prices. That issue must be urgently addressed.
Sammy Wilson
Energy prices and energy policy are national issues that must be addressed by the Government centrally. Does my hon. Friend accept that the Northern Ireland Executive were looking for what they could do locally? Indeed, today’s deal, which will result in corporation tax being reduced to 12.5% by April 2018, is one way in which the Executive are seeking to help industry in Northern Ireland. However, there must be a national response to our current mad energy policy that forces firms to use expensive renewables.
Ian Paisley
In 2013, with that point in mind, I wrote to the First Minister and Deputy First Minister about this issue. I said that I feared not only for the future of this company in my constituency but for other large energy users if we cannot get a national policy to resolve the problem. This issue has been identified time and again—including in 2013, half way through the last Parliament.
The cost differentials are staggering. In 2013, I wrote to the then Minister in the Department of Enterprise, Trade and Investment, my colleague Arlene Foster, and I said that the changes that Michelin was being asked for would increase its electricity costs by 44%—that is a 44% increase due to the new charges mentioned by my hon. Friend the Member for East Antrim.
The Minister was brilliant in her response. By that point, Michelin was already paying £1.2 million a year to its electricity provider. The climate change levy would have seen an increase of £350,000 on top of that, but the Northern Ireland Government were able to hold off those charges between 2001 and 2007. I went back to them in 2007 and said that the increase still needed to be held off. The additional charges on the use of electricity—the distribution use of system and transmission use of system charges, or DUOS and TUOS—would have hiked the cost to the factory by 46%. The Minister went back again in 2007 and made sure that those charges were held off. That saved the company an additional payment of £212,000 for the next four years.
Unfortunately, in 2013 the bullet had to be bitten. The Minister wrote to me to say:
“Article 5 of Directive 2003/96/EC (‘Restructuring the Community framework on the taxation of energy products and electricity’) dictates that the lower rate of CCL for supplies of natural gas in Northern Ireland must end at 31 October 2013.”
As a result, the company saw its electricity prices go from £1.2 million to more than £2 million a year.
No company can sustain that level of increase. That was not the fault of the Northern Ireland Government or the lobbying by local politicians who were working with the companies. It was not the fault of Invest Northern Ireland, which was campaigning hard behind the scenes for a change in policy. It is a national issue that must be addressed.
Jim Shannon
I understand that it was announced this week that Shorts Bombardier will build a new energy-efficient plant in Northern Ireland that will reduce its costs dramatically. It is one of the biggest employers in Northern Ireland, with 5,500 employees, and the Department for Enterprise, Trade and Industry helped to make that happen. The example of Shorts Bombardier —at least in the building of the plant—could be followed across Northern Ireland.
Ian Paisley
Shorts Bombardier is a case apart because of its scale and the amount of money it has to invest. Michelin, a plc, invested in two huge wind turbines to reduce its energy costs, but although they saved the company between £100,000 and £150,000, that was nowhere near sufficient to cut its electricity costs.
Ms Margaret Ritchie (South Down) (SDLP)
I congratulate the hon. Member for North Antrim (Ian Paisley) on obtaining this debate on an important subject for his constituency. Can he confirm the nature of the meetings and lobbying that took place between Ministers in the Northern Ireland Executive and the then Secretary of State for Business, Innovation and Skills and his Ministers on this subject?
Ian Paisley
The hon. Lady has read my mind. On 25 November 2013, the Secretary of State for Northern Ireland, the right hon. Member for Chipping Barnet (Mrs Villiers) visited the plant at my invitation. She met the plant owners and recognised the huge issue of electricity costs. The suggestion made at that meeting was that because Michelin has plants in Scotland and England, as well as Northern Ireland, a united front was needed from the Scottish Secretary, the Northern Ireland Secretary and the Business Secretary to ensure that some special pricing code was put in place to assist the company. I put that point in writing to the company, saying that
“we should make a very direct approach at Cabinet level with the help of the Secretary of State and our own Minister of Enterprise, Trade and Investment along with other Michelin Plants in the United Kingdom for a special case for a high energy user like Michelin to have some sort of special status when it comes to the cost of energy use.”
I am glad to say there was a response from central Government: the Energy Intensive Industries initiative, which the Prime Minister introduced a short while ago. In an answer to a question put by my right hon. Friend the Member for Belfast North (Mr Dodds) in Prime Minister’s Question Time just last week, the Prime Minister indicated that EII is something companies such as Michelin should look at. I seized on EII some time ago. I wish the Prime Minister had not used that argument, because Michelin, by its structure, is actually excluded from benefiting from EII. EII is framed so narrowly that one of the single largest energy users is actually excluded from using it.
Michelin has explained to me in some detail that it would have to go away and re-establish itself as a company, and go through a lot of red tape, to have a chance of qualifying for EII. That would be quite difficult. I think the Minister would accept that the legal due diligence alone for a plc would be costly and put it out of remit.
Danny Kinahan
Should we not also be concentrating on the supply of electricity to Northern Ireland? The Moyle interconnector is not working well at the moment. The underground cabling we were hoping to get for the new interconnector is not coming in due to differences of political opinion. Does the hon. Gentleman not realise that, on a bigger scale, we need to try to find ways to get these problems sorted out, and that we need the help of Westminster to do so?
Ian Paisley
I agree wholeheartedly and that is why I wanted this debate. I am delighted the Minister is here, because this is not just a matter for Northern Ireland but a matter for us all. The issue also faces our colleagues in England. It is why Tata Steel and SSI are closing and why there is such anger from Members, who are seeing the livelihoods of many people go.
Remember, the tough decisions have to be taken by us. This is what the tough decision is going to look like: ultimately, we will have to vote on whether we want jobs or cheap electricity prices for consumers. If we want to have jobs and cheaper electricity for the employer, consumer prices have to go up. That is a tough decision. Some of us are prepared to take it. Some of us have argued that if we want to keep jobs in Northern Ireland prices will have to go up for ordinary consumers. It is not a popular thing to say, but we have to face the reality.
Ian Paisley
I will give way very briefly, because I know the Minister will, at some point, want to speak to me.
Sammy Wilson
Does my hon. Friend not accept that there is another way, which is to rely less on costly energy from windmills and solar power, as it is about three times dearer than energy produced by coal?
Ian Paisley
I wish I had another half an hour to agree in detail with my hon. Friend. I absolutely accept that there is a madness behind the policy that forces electricity generators to pay more for electricity generated by windmills and then sell it on to consumers. That is absolutely wrong.
I want to salute the efforts of Invest Northern Ireland and its chief executive, as that organisation always gets it in the neck. On this occasion, it has got it in the neck from the usual suspects and critics in Northern Ireland who claim it is not doing enough. I know that behind the scenes the company, and the chief executive in particular, have worked their socks off to try to get investment in County Antrim. It is incredibly helpful. It is, effectively, trying to roll a massive boulder up a hill, fighting for jobs in a crowded space and against the many unfair competitive advantages of others.
If devolution is to be sustainable, it must be given the tools to fight and to see its energy costs reduced for its employers. That can happen only if a decision is taken here to help us. We in Northern Ireland require a national response to these national issues. This is on a par with the 15,000 job losses at Tata and SSI in the north of England. For the devolved Government to begin to compete and to replace this number of manufacturing jobs, we need support from the Prime Minister, UKTI and the Business Secretary. We need them to pull with us, batting for Ulster and batting for jobs for us around the world, so that whenever UKTI or the embassies are open for trade missions in the east, the far east or the United States, they are not just thinking of mainland Britain but Ulster too, and asking how a particular proposal could fit in with the Northern Ireland region. We want to see more of that and hear more about it, because Northern Ireland is crying out for that assistance.
I call on the Government to step up to the plate and tell us what they can do. We have a stable regime and a highly educated young workforce with advanced skills, and we are a cheaper region to invest in.
Ian Paisley
In 2018—it should have been sooner—our corporation tax rate will reduce to 12.5%. We need to offer hope to employees facing redundancy. The company is starting its official consultation with employees next week, on 23 November, and I have already mentioned that the Prince’s Trust has been incredibly helpful in offering support to the younger employees in particular.
The unions, too, have been very helpful. There have also been helpful comments in our local media, including from Wrightbus, a large employer just down the road, whose managing director, Mark Nodder, has said he is optimistic about the manufacturing sector, despite the job losses. He should know, because he employs people in County Antrim. He also referred to the University of Ulster’s economic policy centre, which predicted last week in a report that manufacturing employment in Northern Ireland was likely to grow over the next decade. It has suggested a figure of between 8,000 and 14,000 jobs. These things offer hope in a picture that otherwise would be entirely gloomy. I hope the Minister can encourage us tonight and respond to some of these key points.