Reducing Costs for Businesses

Nia Griffith Excerpts

Tuesday 11th January 2022 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

We in the Labour party recognise just how important business and industry are to our country, generating wealth and creating good jobs. We also recognise that Government have a vital role to play in providing the best possible conditions for our business and industry to flourish. It is about constructive partnership with business, with Government listening carefully to business, seeking to resolve the obstacles facing it and creating the best sorts of conditions for it to flourish, whether that is developing and updating a proper industrial strategy, training and education, work-force supply, modern infrastructure and connectivity, or developing cheap and reliable energy supplies.

It is not just households that face massive energy costs—industry does too, and in particular energy-intensive industries such as steel. Sadly, that is nothing new. Even before the current energy-cost crisis, UK steel manufacturers were facing a much higher energy cost than their continental competitors. In spite of the UK Government being told time and again about the comparative cost of energy and the devastating impact of those costs on UK steel production, they have done absolutely nothing to alleviate them.

As my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) explained, Labour has a plan for a windfall tax on North sea oil and gas production. Labour would use £600 million of that as a contingency fund to support struggling firms, including energy-intensive industries. But there is much more to do.

The question is, why are we facing a worse energy price rise than other countries? It is simply because the Government have failed to produce the renewable energy that we should be generating by now. They have not got on with it fast enough. Basically, the Government have been caught napping. The gas price hike should be a wake-up call to make up for lost time and to accelerate the development of renewables.

Lastly, I turn to procurement. During the pandemic, when supplies were hard to come by, as the whole world tried to stock up, firms across the UK stepped up to the mark and changed production lines to meet our needs. UK companies were encouraged to think that they would get ongoing business if they helped out during the personal protective equipment shortages. Many companies committed in good faith and invested in UK production to future-proof British PPE supply resilience.

For example, a local SME in my constituency switched from producing a camping gas fuel to producing hand sanitiser. It invested more than £700,000 to automate its hand sanitiser production, but now most Departments have gone back to their original foreign suppliers. What happened to “build back better”? The Government need to do much more to buy British, whether steel or PPE. That would be good for security of supply, good for jobs and good for the planet—as our production is often greener than cheap imports. It is high time that the Government decided to back British, not just wave the flag.