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Britain has set itself some tough targets. We were the first, with the Climate Change Act 2008, to introduce climate change legislation. That Act enshrined in law the reduction of UK CO2 emissions by 80 per cent. by
2050. The EU emissions trading scheme, which works on a cap-and-trade basis, is central to the UK's long-term policy of reducing CO2 emissions. Under the emissions trading scheme directive, large emitters of CO2 in the EU, including in the energy-intensive chemical industry, must monitor and report annually on their emissions of greenhouse gases, and are obliged to return emission allowances equivalent to their annual emissions, currently to the Government. To do that, they may have to buy or sell emission allowances on the market.
Minds are now turning to using the CO2 emitted into the atmosphere to synthesise other chemicals. Methanol, which can be synthesised from CO2, can be used instead of ethanol as a transport fuel. Lotus cars have already developed engines that will run on pure methanol. An article appeared in the 22 February edition of "Chemistry and Industry" on the world's first resins made from polyols using CO2 as a feedstock.
Probably the most significant piece of legislation on chemicals introduced by the EU has been REACH--the registration, evaluation and authorisation of chemicals-with which all European countries are expected to comply. It is being implemented in stages by the EU Chemicals Agency, based in Helsinki; by 2018, it will have dealt with all the 30,000 chemicals that are supplied in quantities of more than 1 tonne a year. That legislation replaces more than 40 pieces of previous legislation, but 20 pieces of connected legislation remain in place. Implementation of REACH has proved more difficult and more costly than forecast. Instead of the expected 200,000 pre-registrations, the EU Chemicals Agency has received 2.75 million.
Chemists still have a difficulty in explaining, and the general public in understanding, the relationship between hazardous substances and their risk to society. However, the good safety record of the chemical industry is noteworthy when compared with the rest of manufacturing, and especially with the construction and farming industries.
At a recent meeting of the all-party group on the chemical industry, it was reported that some chemical manufacturing previously displaced offshore-for example, to China or even elsewhere in Europe-is returning to Britain. That is being encouraged by taxation changes, a good working relationship between employers and employees-including a responsible approach by the industry's unions-and a recognition that this country produces high-quality products.
At the high-value end of the market, the availability in the UK of a highly skilled work force, graduate or otherwise, is another important factor. In addition, the supply chain in the UK and Europe is better than in developing countries. The changed image of the chemical industry has attracted more people to consider working in it. That has been helped by the fact that wages and salaries, as well as working conditions, are also good in comparison with other industries; for instance, workers can earn up to 20 per cent. more than in other manufacturing industries.
There are further challenges ahead for the UK chemical industry, but I am confident that it is capable of meeting them. However, 70 per cent. of chemical and pharmaceutical businesses operating in the UK are foreign owned. It is
therefore important to create the right financial and regulatory conditions to retain those businesses in this country.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas): It is a privilege, Mr. Wilshire, to serve under your chairmanship. I think that this is the first time that I have done so, and it may be the last.
It was a privilege to listen my hon. Friend the Member for Bolton, South-East (Dr. Iddon), who has just demonstrated why he will be missed in the next Parliament. I welcome my hon. Friend's dedication of this debate to our former colleague, Ashok Kumar. As my hon. Friend said, the late Member for Middlesbrough, South and East Cleveland will be sadly missed. He brought a formidable knowledge and a quiet intelligence to the business of Parliament, especially when considering matters relating to the chemical industry. Coincidentally, I attended an award ceremony last Wednesday, when I spoke to a Cluster Mark group from Teesside. They spoke very warmly of Ashok, and expressed their profound shock at his death. He was highly regarded in the north-east, in the chemical industry and, of course, in the House.
I pay tribute to my hon. Friend the Member for Bolton, South-East, for his long and distinguished academic and parliamentary career. I am genuinely pleased to have the opportunity to respond to this debate. I think that I first spoke to my hon. Friend at an aerospace lunch. He may remember that we had a discussion on nuclear power in the UK, which he has always supported. At that time, it was not as politically fashionable as it is now, but he has always shown a quiet intelligence and maintained a logical argument.
We heard today that he has a wide knowledge of scientific matters; I speak as a lawyer, and I am sorry to say that his knowledge was not as much in evidence in the House as it should have been. His commitment to the chemical sector has been demonstrated in Parliament since 1997, and is shown by his involvement with universities and learned societies. Through his support for organisations such as the Catalyst discovery centre, the Bolton Technical Innovation centre, and through his own magical chemistry demonstrations, I am sure that he has encouraged many young people and adults to take up careers in the chemical industry.
In Parliament, my hon. Friend has maintained a focus on chemical industry matters, including through the constructive work of the all-party group on the chemical industry. His interests extend far beyond that to embrace drug misuse, policies on higher education, skills research and British-Palestine relations. As a Back Bencher, he has made an important contribution to
marine safety, and his private Member's Bill became the Statistics and Registration Service Act 2007. It is therefore with real sadness that I note that my hon. Friend will be retiring from the House. I am sorry that we will lose his considerable knowledge and experience, but I do not envisage him sitting back in an armchair with pipe and slippers. I suspect that he will be very active in his so-called retirement, and I look forward to hearing from him on a regular basis in the future.
I agree with what my hon. Friend said about the significance of the chemical industry for direct and indirect employment and the balance of trade, and also with what he said about how important chemicals are to our manufacturing base. The industry invests heavily in research and development, and provides some of the highest quality, best paid employment in UK manufacturing. The chemicals industry underpins most of our manufacturing. For example, if we look at the supply chains in most of the UK's manufacturing industries, we will find a chemicals producer in there somewhere. It is easy to lose sight of the fact that chemicals are essential for a vast array of everyday products, ranging from packaging and pharmaceuticals to car interiors and personal care products.
The chemical industry, like many other sectors, has had to face some very tough trading conditions due to the global recession, particularly where downstream customers have been struggling. The Government have, therefore, been supporting the industry in various ways over the past 18 months to enable it to face the challenges ahead.
Today, we announced details of our support for the industry in the north-east, where the UK's largest chemical cluster is located. As a result of working with the regional development agency and making good use of the strategic investment fund, a total of £7.5 million will be invested in the region. That is just part of the £60 million support package that was announced last November, which will help to create about 3,000 jobs in the region, and some 150 apprenticeships. The £7.5 million investment will help some promising projects. For example, £2 million will go to MSD Biologics UK, which is based in Billingham, creating 75 jobs over the next three to five years; £2 million will go to PYReco, which is based at Wilton, to help with the development of a new processing plant to reclaim and recycle material from tyres, creating 52 new jobs, and a further 240 construction jobs; and £1.34 million will go to GrowHow's environmentally essential project to tackle nitrous oxide emissions at its Billingham plant.
Mr. Cash: I should like to place on record my admiration both for the hon. Member for Bolton, South-East (Dr. Iddon), with whom I have debated often, and for you, Mr. Wilshire. As well as being an hon. Friend, you have been a very good friend of mine.
The Minister presents a picture of numerous grants being made, of aid being given, and of systems being put in place to help the chemical industry, but what about the problem of over-regulation, which the hon. Member for Bolton, South-East, mentioned? Both at a European and a domestic level, many industries are heavily over-regulated, which causes massive unemployment.
According to Lord Mandelson, 4 per cent. of GDP is lost in over-regulation, which must affect the chemical industry as well. Does the Minister not agree that it would be in our national interests to override European legislation and instead pass legislation here?
Ian Lucas: The hon. Gentleman puts an interesting proposition to me, which, unfortunately, I shall decline. As a Minister responsible for regulatory reform, I am well aware of the importance of better regulation. Regulation in the chemicals industries is extremely important. My hon. Friend referred to the perceptions among the general public about safety in the chemicals industry. The relationship between risk, safety and regulation is vital to the continued confidence of the British public in the chemicals industry. We heard from my hon. Friend that the chemicals industry has a very positive safety record, and that depends on good regulation being properly and intelligently enforced. I say to the hon. Member for Stafford-
Ian Lucas: I am sorry, but Stone is in Staffordshire. I apologise to the hon. Gentleman from Staffordshire who represents Stone. On this issue, it is important that regulation is based on logical and-I hesitate to say it-scientific criteria, and that it is intelligently drafted and applied. It is very important that at both European and national level, we consider the effects of legislation at an early stage. Regulation is very important. We have to command the views of the general public, but be conscious of the necessary impact that regulation will have on business.
Mrs. Betty Williams (Conwy) (Lab): Let me first say what a pleasure it is to be in this Chamber under your chairmanship, Mr. Wilshire. May I also wish you all the very best in your retirement? I congratulate my hon. Friend the Member for Bolton, South-East (Dr. Iddon) on securing this debate and thank him for devoting it to our late friend, Dr. Ashok Kumar, for whom we all had great respect.
Will the Minister tell us whether we are likely to see further regulation concerning safety? I am talking about the safety of transporting chemicals along our roads. I serve a north-west Wales constituency, and transporting chemicals has been a particular concern of mine.
Ian Lucas: My hon. Friend raises an extremely important point. I know that there is genuine and profound public concern about the transportation of chemicals. However, we have a very good safety record in that regard, which we must maintain. That will involve co-operation between Government, the industry and trade unions, and it will involve presenting the good practice in the industry to the general public.
The chemical industry has faced difficult times over the past 18 months, and the Government have been supporting it in the best way that they can. It is clear that the high level of skill required in the industry needs to be built on, so we must focus on developing highly skilled technicians in the sector. Moving to a low-carbon economy is not an easy task for an industry that has been highly dependent on fossil fuels.
I visited the INEOS plant at Runcorn, which is contributing to the reduction of the carbon footprint of the sector. I heard at first hand how the municipal waste from the north-west will be used to generate power for INEOS's chemical processes. That is a model approach to change in the industry, and one that should be greatly encouraged.
I also had the good fortune to visit the Wilton plant in the north-east, where major progress is being made. Innovative approaches are being taken to the use of new technologies, new sources of energy and new fuels. The industry is long-established-I heard about the industry's Roman roots while I was in the north-east-and it has the capacity for change.
Bob Spink: I, too, wish you well in the future, Mr. Wilshire. Particle physics and, eventually, chemical engineering will change drastically as a result of the experiments taking place with the large Hadron collider. While promoting near-market development, will the Minister also agree that innovation is important for the industry? Will the Government continue to fund blue skies research, such as that done through the LHC?
Ian Lucas: I think that the hon. Gentleman has been slipped a copy of my speech, because I was just about to move on to the importance of innovation. Blue skies thinking is very important, and it is something that we have been good at in the UK in the past. We should be proud of our science and innovation record and of this Government's massive investment in the university sector since 1997, which is evident when I travel round the country visiting universities. What we also need to do better is translate some of that blue skies thinking and innovation into manufacture. We must carry forward the powerful ideas from the universities to create manufacturing capacity and employment in the UK.
The Government, and my Department in particular, have made a strong commitment to ensuring a constructive and positive relationship between industry, trade unions and Government. We believe that such a relationship is essential to building the foundations of a sustainable manufacturing industry in the UK that has the capacity to change in a low-carbon world. We have tremendous potential in this country. We were the first industrial nation-
Mike Penning (Hemel Hempstead) (Con): May I also pay tribute to the work that you have done in this House, Mr. Wilshire, in your time as a Member of Parliament and as the Chair of important Committees and of Westminster Hall? I wish you well in whatever else you go on to do.
I asked for this debate out of the anger and real frustration that I, my constituents and indeed everyone in the country has experienced at the fact that our great country and our excellent road network are being blighted by the rubbish that is continually being discarded; the network in my own part of the country is being particularly blighted. That rubbish is either being dumped from vehicles or it is escaping from the top of waste disposal vehicles or skips on to the highways. I am very aware that there is legislation in place to deal with this problem. Frankly, however, having driven around the highways and byways of Britain, particularly our motorways, I know that it is not working.
At this stage, I would like to pay tribute to Keep Britain Tidy and the Campaign to Protect Rural England. Those organisations did not lobby me to secure this debate, but once I had secured it they were very quick off the mark to contribute and their briefings have been very useful.
As someone enters this country, or as they enter a town or one of our great cities, there are first impressions that will stick in their mind. If someone leaves the great city of London and travels up the M1 from Brent Cross, they are driving through a rubbish tip-there is no other way to describe it. Sadly, as I travel on that motorway all too frequently, I know that traffic builds up and drivers sit there, waiting for the traffic to move on. As they do so, they glance to the side and they see a build-up of rubbish that has obviously been thrown from private vehicles or that has escaped from commercial vehicles. Clearly, that rubbish has been there for some considerable time. That is obvious, because a modern drinks can takes an awful long time to break down, as does a crisp packet.
Indeed, the other day I was amazed to see a Marathon bar wrapper that had been discarded. Marathon bars have not been for sale in this country for some considerable time; they have been renamed "Snickers", or whatever the company wants to call them these days. I do not actually eat those bars, but I am aware that they have not been called Marathon for some time. I tried to find out when the brand or name of "Marathon" went out of use, but I could not find that out. However, it is certainly several years and yet these Marathon bar wrappers are still sitting on the side of our highways and byways. They are the type of awful litter that is blighting the countryside around us.
That is unfair on towns such as Hemel Hempstead and in particular on local authorities such as my own, Dacorum, which do everything they can to clear up the refuse and litter that is thrown around, for whatever reason. My town of Hemel Hempstead is very clean; I am very proud of it.
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