Michelin Factory: Ballymena

Jim Shannon Excerpts

Tuesday 17th November 2015 Commons Chamber

[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.

--- Later in debate ---

[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.