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Energy-intensive Industries

Volume 578: debated on Thursday 3 April 2014

We recognise the competitiveness concerns of electricity-intensive industries, which is why the recent Budget included new compensation for the costs of the renewables obligation and feed-in tariffs, and capped the carbon price support mechanism. We are also providing compensation for the costs of the European Union emissions trading scheme, and to date we have paid out £31 million to 53 companies.

Following the £7 billion package of support for the energy-intensive industries, EEF, the manufacturers’ organisation, said that it will

“help to level the playing field these companies need to compete effectively with others around the globe, and keep production here in the UK.”

What estimate has my right hon. Friend made of the potential for reshoring in the chemicals sector, now that conditions are so much more attractive to investors?

I am grateful to my hon. Friend for her question. By 2018-19, British business will have saved some £4 billion from the measures we have put in place. We have cut green taxes for households and now we are cutting green taxes for business. That should be a further incentive for the chemical industry not only to grow in this country, but to bring further investment back to the UK.

Will the Minister take this opportunity to guarantee to energy-intensive industries that the compensation for the carbon floor tax that this Government introduced will be backdated to the date from which the Government have promised compensation, which is April 2013?

Carbon price floor compensation is something that we are still pursuing with the Commission in Brussels. I am hopeful that that will be agreed soon. The state aid clearance procedures are lengthy in these cases. Obviously, we are continuing to press the case for backdating.

The carbon price floor tax introduced by this Government makes it four times harder for UK industry to compete with EU competitors. How many companies have received compensation for the carbon price floor tax? Is it more than one or fewer than one?

We have introduced compensation for the EU emissions trading system, as I have said. We have already paid out compensation to more than 50 companies in the steel, paper and chemical industries. Some of the major industries concerned have welcomed the further proposals that the Chancellor announced in the Budget, including Tata Steel, which said that the measures that were announced in the Budget

“will make an important difference to Tata Steel in the UK.”