Cost of Living: Support for Farmers

Justin Madders Excerpts

Tuesday 12th July 2022 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair, Mr Hollobone. I thank the hon. Member for Rutland and Melton (Alicia Kearns) for her excellent introduction and for raising a comprehensive range of issues. I will focus on just one of the issues she mentioned, which is fertiliser production, as I have a significant constituency interest in the matter.

As we know, fertiliser is critical to food production. An increase in its cost has an impact on yields. We are in a cost of living crisis and I am afraid that this could make matters significantly worse. We should want to encourage as much UK-based fertiliser production as possible. Indeed, maximising self-sufficiency is one of the aims of the food strategy. If the past few months have shown us anything, it is that the risk associated with food security leaves us exposed to global shocks. We are hearing how the recent increase in energy costs, as well as the increase in fertiliser costs, has had an impact on our farmers, but I am sorry to say that that could be just a taster of the trouble we will face if action is not taken now.

I want to make it crystal clear that I am extremely worried that we may be sleepwalking into a desperate situation of too much pressure on fertiliser costs and consequentially on food prices, because of the situation at CF Fertilisers in my constituency. As the Minister knows, CF Fertilisers is a longstanding plant in Ince, near Ellesmere Port, which employs over 300 people and has been a historical and significant source of fertiliser for the UK agricultural community. Last month, its American owners announced their intention to close the plant and begin consultation on the consequent redundancies with the trade union.

I am grateful to the Minister for her offer to have further discussions on the matter and to the Secretary of State, who met with me last month to discuss the situation. At that point, there was still some hope that a commercial solution could be found. After all, the site has been profitable for many years and has a highly skilled and committed workforce, which we want to retain in those valuable jobs. Unfortunately, various newspaper reports over the past few days have indicated that a sale agreement is unlikely to go ahead. That is extremely worrying. The concern I have, which has been conveyed to me by a significant number of the workforce, is that it is not in the parent company’s interest to sell the site as an ongoing concern.

If the site closes, CF will have no domestic competition for fertiliser sales. It plans to retain its site in Billingham in the north-east—for now, at least—but like every other site, that site can be closed at short notice for technical reasons or, as we saw last year, financial ones. It also requires shutdowns for several months at a time every three years or so. Given what we know, it is not a prudent strategy for the nation to put all its eggs in one basket, particularly when that basket is owned by an overseas company that has shown it is ruthlessly guided by the bottom line.

The fear articulated to me by many people is that CF do not want to sell the site to a potential competitor. It would rather see the machinery and plant equipment sold for scrap than lose its monopoly position in the UK market. Look at its financial performance: it makes an awful lot of money. Its earnings before interest, taxes, depreciation and amortisation in the first quarter alone was $1.68 billion. It increased its dividend by 33% in the first quarter of the year. CF could give the site away for nothing and it would not materially affect its bottom line, but it does not want to do that because it would deny them the opportunity of seizing every last penny from UK farmers. How is it in the national interest to let that happen? How is it sensible to allow a situation in which we know this course of action will put even more pressure on food prices? How is it levelling up to allow 300 highly paid, well-skilled jobs in the north-west go, when we know that there is a viable business there? If there is a way forward, it should be allowed to continue.

I cannot overstate to the Minister just how concerned local people are about the parent company’s true intentions. It is clear from talking to them just how little trust they have in CF now and how they believe the consultation process to be, frankly, a sham. The process ends in just a few weeks and, unless there is a dramatic change of approach, we will lose all those jobs and be in a hugely exposed food-security position in future. This cannot wait for a new Prime Minister. I urge the Government to intervene and for members of the Cabinet, for a minute, to stop jostling about their own jobs and to think about my constituents’ jobs, because those will be gone in a few weeks, with knock-on effects on jobs in the agricultural sector generally.

Please, will the Minister do everything in her power to keep the plant open? I want to be clear: if it is allowed to close, the ramifications of that decision could be felt for years to come. People will rightly ask, “What did the Government do to stop it?”