Michelin Factory: Ballymena

Sammy Wilson Excerpts

Tuesday 17th November 2015 Commons Chamber

[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.

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[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.

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[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.

[Sammy Wilson]

rose—

[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?