Energy-intensive Industries

Lee Rowley Excerpts

Wednesday 6th July 2022 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Lee Rowley)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I am grateful to the hon. Member for Bradford South (Judith Cummins) for calling this debate today. It is an important issue and it is right that we debate it in the detail and depth it deserves. I recognise how important this issue is in many parts of the country, both from the perspective of my constituency and from being a Minister for the past 10 months. I know that there are hon. Members, both present and not in attendance, who have a very extensive interest in this and are very concerned about the challenges— which we hope are temporary—that the industry faces. We recognise those challenges.

First, lest it be suggested otherwise—I am sure that is not the intention of the hon. Lady—I want to say that energy-intensive industries are important to the United Kingdom and important to the UK Government. They are important because they provide resilience within our supply chains over the long term; are representative of British manufacturing and the fantastic things it does; and provide a historic link to our past and our proud energy and manufacturing background.

That importance is why I have spent much of my time as a Minister over the past 10 months talking to our energy-intensive industries. I speak almost weekly with at least one representative—sometimes more—from the energy-intensive industries. I have been on regular visits, including to glass factories in the north-west, paper mills in the east midlands, steel factories in Wales—the UK Steel representatives in the Public Gallery are very welcome—and chemical factories in Teesside. Over the past 10 months, I hope that I, as Minister, have demonstrated to the industries that I am interested in hearing their views—views that the hon. Member for Bradford South has articulated—and in engaging in open dialogue.

We want to understand the industries’ concerns and issues and to work through them in a careful, calmed and reasonable process—in the way that public policy should be created—to work out what is reasonable and proportionate. We discussed the issues on Monday in one of our regular UK steel discussions with unions and companies representing the industry. At those meetings, we come together and have exactly the kind of strategic dialogue that the hon. Member for Bradford South was talking about. The Government will continue to do that in the coming months. I want to make very clear that energy-intensive industries are important in terms of what has been done, and we need to ensure that they are listened to and heard on an ongoing basis.

I want to be clear that there is a challenge. When I speak to colleagues, including my hon. Friends the Members for Scunthorpe (Holly Mumby-Croft) and for Stoke-on-Trent South (Jack Brereton), and Opposition Members who feel just as strongly, I know how important it is that we acknowledge that there are difficulties. There are global difficulties because of unprecedented circumstances—we all accept that—which we did not anticipate. It is very difficult to anticipate the first invasion of a sovereign country on European soil for 70 years, which is what Putin did. It is difficult to anticipate the price spikes and the volatility in the market that comes from that. That is not something that can be easily managed away, but none the less it has caused issues for a number of energy-intensive industries as well as the wider sector. The Government are working through how they can support that.

We recognise that this follows a number of years where energy-intensive industries have been clear that while the Government have brought forward support, undertaken dialogue and are doing what they can, there is a price differential compared with Europe, and we understand that. That is one reason why we brought forward the British energy security strategy in April. It includes many elements, addresses the long-term approach to energy and indicates our continuing support for industry.

[Jack Brereton (Stoke-on-Trent South) (Con)]

The ceramics industry in Stoke-on-Trent has been incredibly successful since the Conservatives came to power. We have virtually doubled gross value added. However, we now face serious challenges, particularly because of energy costs. Most or all of the ceramics industry has not been eligible for Government support because most of the industry is too small and many of the NACE codes do not qualify. Does my hon. Friend agree that there must be a level playing field and we must address this issue to ensure that support in place for the ceramics industry?

[Lee Rowley]

My hon. Friend is an absolute champion of the ceramics industry, and I know how important it is for his constituency. As he indicates, it has been a real success story for our country, and we want to ensure that it continues to be a success story. His advocacy in this place is absolutely the way to ensure that that happens. We accept that there is a challenge—there is no question of that. Over recent months, the Government have acknowledged that challenge in papers such as the British energy security strategy, which is important and has been welcomed by a number of industries as part of our ongoing dialogue, and have started doing things to address it.

I am glad the hon. Member for Bradford South has acknowledged and welcomed the compensation scheme. It is not something to quickly pass over; it is a substantial increase in money—if that is the yardstick we are using. It is substantial confirmation that we are serious about supporting our energy-intensive industries. From the extensive conversations I have had with colleagues in this place and with the industries themselves, the changes coming from that have been welcomed. When people say, “The Government need to do something”, the Government have done something.

The energy security strategy is clear that there will be a further consultation on a further element of what we are seeking to do, and I expect that to begin shortly. We are considering using that strategic dialogue, which the hon. Lady indicated is important, about what else is reasonable and proportionate to do over a longer period of time. None of these issues is straightforward or has a simple solution; otherwise, this Government or previous ones, including the Labour Government pre-2010, would have done it. It is a difficult and challenging problem and we need to do something about it, as the Government have done, and look at what can be done in the future.

I will address a few of the hon. Lady’s points. Unless we contextualise this conversation and conduct it in a reasonable manner, it will go off in all sorts of directions that are ultimately unhelpful. I understand that ultimately it is for other people to choose their words, focuses and emphases, but there has been progress on this agenda in recent months and that should be acknowledged. It is recognised that the Government are absolutely serious about supporting these industries.

[Judith Cummins]

I take that as some kind of criticism of my words, many of which were given to me to represent British industrial businesses. We have heard so much from the Minister about the difficulty, accepting that there is a challenge and listening, but he needs to act because British businesses and energy-intensive businesses are suffering and crying out for more help.

[Lee Rowley]

Those are exactly the kinds of statements that I think, with the greatest of respect, are not entirely helpful. The Government have acted, and it should be acknowledged that we have done so. Hundreds of millions of pounds have been brought forward in recent weeks, which should be acknowledged as a significant step forward. As I have already said during the past 10 minutes, we accept there is a challenge, and we are going to do more. We have already committed to bringing forward at least one additional consultation—

[Judith Cummins]

rose—

[Lee Rowley]

I am happy for the hon. Member for Bradford South to take some of my time. What exactly should we do?

[Judith Cummins]

I am happy to take up some of the Minister’s time. Shall I repeat the eight questions that I asked in my speech that he has not—[Interruption.]

[Judith Cummins]

I am happy to send the Minister a copy of the eight questions I asked him in my speech. He is yet to address a single one of them.

[Lee Rowley]

The challenge with this debate is that we all accept there is a problem, and we all accept that there is a wider context of global issues—some of which are beyond our control—but ultimately, the hon. Lady needs to propose as well as oppose. If she has a proposition, I would be very happy to hear it, as would the Government, but I did not hear a proposition in the 20 minutes that she spoke for.

“Do more” needs to be followed by another sentence that says precisely what to do, because when you talk to energy-intensive industries—I am not suggesting that the hon. Lady does not—and have detailed dialogue with them, you realise that there is a significant amount of nuance underlying this discussion. As my hon. Friend the Member for Stoke-on-Trent South has outlined, you have some energy-intensive industries that are very heavily based on gas. You have other energy-intensive industries that are very heavily based on electricity, as my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) has indicated. Other businesses that are not energy-intensive industries are also reliant on some unusual ways of procuring and using energy, and if we do not recognise that nuance in any solutions that we propose, ultimately—

[Graham Stringer (in the Chair)]

Order. I have let it go so far, but I do not have views on these things when I am in the Chair. The hon. Gentleman is not the only Member who has transgressed that rule during the debate, but can he refer to hon. Members, not “you”?

[Lee Rowley]

My apologies for not using the correct nomenclature, Mr Stringer.

The point I am making is that there is a variety of nuances underlying this discussion. We have energy-intensive industries that are heavily dependent on one source of fuel, and energy-intensive industries that are heavily dependent on another. We have some industries that are very heavily hedged and some that are not. We have some differences when it comes to the significance of the change in energy costs. We have some industries that are within the compensation scheme, and some that are without it. Some are in other schemes, and some have already applied for schemes that are already open, including the industrial energy transformation fund, which is another £300 million of Government funding—of taxpayer subsidy—to help the sector.

The point I am making to the hon. Member for Bradford South is not that there is not a challenge—I have repeatedly indicated that there is. It is not that we do not value energy-intensive industries, nor that I do not want to listen, and I accept that she is acting completely in good faith in trying to record and highlight the challenges that energy-intensive industries in her constituency face. However, the question is exactly what we do about it, and that strategic dialogue is under way at the moment.

[Mike Amesbury]

CF Fertilisers, which employs many people from my constituency of Weaver Vale, is located in the constituency of my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) and also has many employees there. Over 300 of those people now face losing their jobs. I know there have been discussions with a consortium that has come forward and some reference to a bridging loan, but that would require some intervention, hopefully from the Government, with a potential purchase. It may be beyond the scope of today’s discussion, but I would be interested to know how that is progressing.

[Lee Rowley]

I thank the hon. Gentleman for his intervention. I know that this matter is important to employees at the Ince factory, just as it is important to those at the Billingham factory. I have 50 seconds left of my speech, so I am afraid I cannot address that issue directly, but the hon. Gentleman has absolutely made his point and has been clear about the implications for that locality.

In the few moments I have to sum up, the key point I want to make is not that the Government do not agree there is a challenge, or that we do not think energy-intensive industries are valuable to the United Kingdom—they absolutely are. The point I am trying to highlight is that we are talking to those industries in a careful, calm and methodical manner, working out all the nuances and differences that underlie this issue, and seeking to determine how, over time, we can bring forward solutions that work for the long term. However, we must also recognise that £2 billion in support has been provided since 2013, and that we have done much in recent weeks, too.

Motion lapsed (Standing Order No. 10(6)).