Motion made, and Question proposed, That this House do now adjourn.—(David T.C. Davies.)
I am delighted to have secured this important debate on the British glass industry and I thank you, Mr Deputy Speaker, and Mr Speaker for facilitating it. Glass is synonymous with St Helens, the town I represent. I am also very pleased to see my hon. Friend the Member for Blaydon (Liz Twist) here—she may represent a constituency in the north-east, but she is a St Helens lass through and through, born and bred.
Glass made here in Britain is renowned across the globe and much of our daily lives depends on products that use it. From energy-efficient glazing in our windows to optical technologies that make internet communication and barcode scanning possible, this ever-evolving, innovating industry has—past and present—truly been a catalyst for progress in this country.
We should make no mistake: glass in Britain is giant. With 3.5 million tonnes of glass melted a year, the industry contributes some £1.3 billion to our economy annually. The industry employs 6,000 people directly and supports around 150,000 additional jobs—many located in my region of the north-west—across a diverse, dynamic supply chain. It remains a world leader, with UK manufacturers at the cutting edge of global efforts to develop sustainable glass for use in fields as wide as medicine, navigation, energy and power generation. I will use my remarks to celebrate some of the successes and to highlight, on the industry’s behalf, some of the urgent challenges that it faces.
The rise of glass as a powerhouse is a rich story and one that St Helens and the north of England is fiercely proud to be at the heart of. In 1773, the British Cast Plate Glass Company was established at Ravenhead. In 1826, the St Helens Crown Glass Company was founded by the Pilkington and Greenall families and, in 1845, its name was changed to Pilkington Brothers. Fondly known as Pilks, it remains a byword for excellence and innovation to this day. Indeed, my hon. Friend the Member for St Helens South and Whiston (Ms Rimmer), on whose behalf I am also speaking, worked for many years at Pilks and feels, like so many families in our town, a very special affinity for and connection to it.
In this country, 2022 marks a milestone year for glass. For one, it is the UN International Year of Glass—a celebration of the essential role of glass in society around the world. Along with other hon. Members, Ministers and industry representatives, I was very proud to celebrate that occasion at a special reception here in Parliament at the end of March. I know that more is planned with the Government and with us in Parliament before the end of the year.
This year also marks the 70th anniversary of the revolutionary float glass process, pioneered by Sir Alastair Pilkington. The method quickly became the worldwide staple for manufacturing high-quality flat glass and remains one of the most important post-war innovations not just in Britain, but globally. If any Member would like to know more about glass, its history and its role in Britain, they can visit the excellent World of Glass in St Helens. We have plans, too, for the historic Cannington Shaw No.7 bottle shop—a place of history for our town and the whole country, which is right at the forefront of what we are doing on regeneration.
The glass industry in Britain today is using that spirit of innovation—that rich heritage and history—to adapt to and shape the modern world and to address the challenges that we face as a country and planet, many of which we heard about in the previous debate. Nowhere is that clearer than in the industry’s imperative to reach net zero carbon emissions. As a product, glass will be critical to the national effort on that, whether we are talking about double or triple glazing for household insulation; glass for use in our solar products; or continuous filament glass fibres used in wind turbine blades and in lightweighting vehicles.
As an industry, too, glass is leading the way, supported by the industry body British Glass, to which I pay tribute for its work, and underpinned by its own ambitious net zero strategy, which was released just a year ago. That work is building on the industry’s recent success in reducing combustion and process emissions and in improving efficiency. Over the past 40 years, the energy efficiency of glass furnaces has increased by 50% and firms have significantly invested in technology to increase efficiency and reduce carbon emissions. Recycling has also been key: each time 1 tonne of glass is recycled, about 580 kg of carbon dioxide is saved through the chain.
My hon. Friend is making a powerful speech. On recycling glass, does he agree that the deposit return schemes that are being planned could be problematic for the glass industry if we have such schemes in Wales and Scotland, say, but not in Northern Ireland and England? Does he think that could be a problem for the industry?
My hon. Friend demonstrates the unity of purpose and message discipline on the Opposition Benches, because she anticipates the very point that I was just coming to. In 2020, 76% of container glass was recycled, and the industry has set an ambitious target of a 90% glass collection rate by 2030. To help those efforts, British Glass has called for glass bottles to be excluded from the scope of the UK’s deposit return scheme, which my hon. Friend alluded to, and to be collected instead through an improved system of extended producer responsibility.
Independent evidence has shown that kerbside collections are the most effective route to achieving closed-loop bottle-to-bottle recycling in the UK. The sector was pleased by the recent decision to exclude glass from the upcoming England scheme, but the industry remains concerned about the prospect of multiple diverging schemes across the UK, which would increase complexity, cost and confusion for the public and businesses alike. I wonder whether the Minister might address that point and say what work the Government are doing, alongside regional and devolved authorities, to address those concerns.
The challenge of ensuring that glass making can be built on high-value and sustainable zero-carbon products requires new solutions that fuse elements of research, design, collaboration, innovation and partnership between industry, academic life and political leaders. Not for the first time, we in St Helens are leading the way. A beacon for that is the cutting-edge project that we are working on with Glass Futures, Liverpool city region and our partners in industry to deliver a £54 million centre of excellence, in the heart of the town and our borough, for the sustainable manufacture of glass globally.
Having turned the first sod on that project in February, we are already making huge progress on delivering the 165,000 square foot state-of-the art facility, which will be capable of producing up to 30 tonnes of glass a day and will include the world’s first ever openly accessible multi-disciplinary glass-melting factory. It will give researchers and industry leaders from across the world a unique space to collaborate and experiment with different energy sources, including electricity, biofuels and hydrogen, raw materials and other emerging technologies to demonstrate solutions leading to sustainable energy usage in glass making.
I congratulate the hon. Gentleman on securing the debate. I spoke to him beforehand, Mr Deputy Speaker.
At a time when prices are soaring across the world for deliveries, containers and the movement of products, it is good to hear that St Helens is doing so well. Does the hon. Gentleman feel that now is the time to emphasise the best of British produce and manufacturing? For that to happen, the Government—perhaps particularly the Minister, who is always amenable to such ideas—should be funding the relocation of factories and firms back to our shores, as he refers to. That would give local people jobs and give consumers what they want, which is superior British goods.
I entirely agree. When the Labour party is in government, we are committed to putting at the heart of everything we do the idea that we make, we buy and we sell British. That is hugely important to our economy, not just at a national level and not just for asserting our new place in the world, but for bringing jobs to cities, towns and villages across the whole United Kingdom. I know that that is a sentiment that the hon. Gentleman very much shares.
We are very proud that these ambitious efforts locally put St Helens and the Liverpool city region front and centre at the recent COP26 summit in Glasgow, where we showcased the product not only for its environmental benefits but its social and economic ones. The boost that this will bring to St Helens and our wider region is clear, with, initially, 80 new permanent jobs, over 700 apprenticeship hours, and 100 volunteer hours committed to local green projects. In addition, 50% of project spend will be local, alluding to the point made by the hon. Member for Strangford (Jim Shannon), and 50% of those working on it will come from our city region. So we are thinking globally and acting locally, benefiting our area and its economy, and the environment.
Our efforts do not stop there because, in August last year, working alongside HyNet North West, we carried out a world-first trial with hydrogen on Pilkington’s famous float line that demonstrated that hydrogen, and other low and no-carbon fuels, could be used to fire a float glass furnace safely and effectively. The industry is ambitious to blaze a trail towards the future and those are just a couple of examples of how it is successfully cutting that path.
However, there are some urgent challenges in the present that risk putting the brakes on that and need to be addressed if the British glass industry is to continue to thrive. First, as the Minister will not be surprised to hear, the issue of spiralling energy costs is of significant concern. Like all other energy-intensive sectors, glass manufacturers have seen energy prices skyrocket at an alarming pace, experiencing gas and electricity costs as high as quadruple and triple their usual amount respectively, with prices remaining volatile. Energy already accounts for about a third of overall glass manufacturing costs, and in some cases production costs are now exceeding the price of goods themselves. Put simply, this is not sustainable and the risk to the financial viability of the sector is grave.
Yet little support has been made available by the Government to help firms crying out for short-term assistance, with, for example, the decision not to include flat or container glass in updated eligibility criteria for the compensation scheme to deal with indirect carbon costs. British Glass, on behalf of the whole industry, has written to the Department for Business, Energy and Industrial Strategy for clarity on that decision, as the assessment was based on data from 2016 to 2018, which represents a time before significant changes to imports. British Glass believes that the container sector should also be eligible. I ask the Minister to address that—if not today, then to come back to me on it and to look into the response that the Department has given to the industry. The industry is also awaiting the publication of the renewables exemption scheme consultation, which has been delayed. That is hugely important to the glass sector, which believes that increasing the relief from 85% to 100% would help to reduce electricity prices.
Secondly, energy security and supply, in and of itself, is critical. Glass production remains energy intensive and always will. Glass furnaces must fire continuously to make product in order, essentially, for the industry to survive. Indeed, with the UK’s furnace asset value estimated at in excess of £1.4 billion, closures would be devastating for the industry and wider society. Due to the shortage of refractories and workers, it could take over two years to rebuild a furnace if it lost gas supply. Labour Members have called for a £600 million contingency fund that would boost energy-intensive firms in glass, but also steel, manufacturing and other industries at the same time. I urge the Government to look at this again, as they did with our plans for a windfall tax to help domestic customers with energy costs. In the absence of any forthcoming policies of their own, we are always happy to provide some for them to take. Glass manufacturers need to be protected from shortages in fuel, and the industry has called on the Government to help to ensure this, especially over the coming winter, which is predicted to be a real crunch point. The industry strongly encourages the publication of the National Grid’s “Winter Outlook” without delay to help with preparations.
Finally, there is the challenge of competitiveness. The glass industry is recognised as being at risk of carbon leakage, which means that imposing full UK carbon costs could make manufacturing in the UK globally uncompetitive. We already have higher allowance prices than the European Union, for example. I ask the Government to look into that, and to ensure that the industry is able to remain competitive.
Past and present, glass has always been ingrained in the very fabric of our country. It is part of what makes Britain great, especially in proud communities such as mine in St Helens, where it remains a source of—indeed, a catalyst for—jobs, opportunities and economic growth. It is a symbol of this country’s manufacturing excellence and our rich past, and it remains part of the change and progress that we want to see Britain achieving. That is evident in the way in which this ever-evolving industry is using technology to address the defining issues—for instance, the climate emergency—faced by us as a society, and indeed by the world as a whole. We need concerted support from the Government to tackle the huge challenges that the industry faces, while taking the opportunities that are available.
St Helens glass is the best in Britain. British glass is the best in the world. Let us keep it that way, and let us shout it from the rooftops.
I am grateful to the hon. Member for St Helens North (Conor McGinn) for securing the debate and for outlining so comprehensively the importance of glass to the UK. I welcome the opportunity to address the priorities and challenges faced by the UK glass sector, and to explain what the Government have done, and will do in the future, to support it. As the Energy Minister, I can assure the hon. Gentleman that the Department recognises the value of glass manufacturers, and takes their concerns very seriously.
In his excellent speech, the hon. Gentleman pointed out that British-made glass is renowned around the world. I always love a good bit of history, and he took us back to 1773 and the foundation of the British glass industry—indeed, probably the world glass industry—at Ravenhead. Glass has of course been around for centuries, but that was when it was turned into an industry. The hon. Gentleman told us about the 3.5 million tonnes that are produced each year and the 6,000 people employed directly in the industry, but he also talked about the much wider impact of the sector. As a former Exports Minister and a former Investment Minister, I know that it is industries of this kind that will enable global Britain to compete on the world stage and will continue to attract foreign direct investment, which plays such an important role in the hon. Gentleman’s constituency.
Let me now deal with a few of the points that the hon. Gentleman raised. The Department for Environment, Food and Rural Affairs leads on glass recycling and direct deposit schemes, but I will pass his comments on. DEFRA has undertaken extensive engagement with the glass sector, and will do so in the future. I am sure the hon. Gentleman will agree that the Government want to make recycling as easy and efficient as possible, but we need to ensure that that does not include any perverse incentives, or any element that is likely to damage some of our key industries.
The subject of energy-intensive industries will constitute the main part of my response, but I was pleased to hear the hon. Gentleman report that energy efficiency is up 50% in glass furnaces. That is an encouraging sign as we move towards net zero. Obviously some industries will be harder to decarbonise than others, but it is good to hear that glass has made significant progress in that regard.
The hon. Gentleman mentioned HyNet North West. I was delighted to visit some of the participants in the HyNet North West carbon capture, utilisation and storage cluster last autumn. I circled near the hon. Gentleman’s constituency: I was in Runcorn and Warrington. We are moving forward with HyNet in a very good place.
Gosh, I am getting multiple invitations—was that an intervention on an intervention? In any case, I will happily have a look at the forthcoming visits schedule. It is obviously an important part of the world for our overall energy policy and energy future.
The hon. Gentleman invited me to be drawn on the energy profits levy, but I think I will avoid that for the moment. Not only is it part of a Treasury lead, but I feel that we want to concentrate on glass and energy-intensive industries. He mentioned carbon leakage, and obviously the UK is an important participant in the debate on carbon border adjustment mechanisms, which I also know about from my days at International Trade.
I shall deal in my response mainly with energy-intensive industries, particularly in relation to glass. The Government recognise the wider importance of all EIIs to this country, and their particular significance to local economies and communities, which all of us here today represent. I agree that strong and sustainable EIIs are hugely important to our national economy, particularly as we secure new global opportunities and continue our drive towards a green economic recovery. From offshore wind farms to building electric cars, we know that steel, ceramics and glass are three important EIIs that will play a big part in our low-carbon future and low-carbon industries.
In my time as a Minister in the Department for Business, Energy and Industrial Strategy, I have witnessed at first hand the skills and dedication of workers, and through my and colleagues’ engagement with the various business and trade associations, we have seen their drive to work with the Government to find a sustainable solution for EIIs that works for us all. I am sure we can all agree that the last two years or so have been particularly difficult for everybody, and EIIs have been no exception. Many workers in those industries have been engaged in activities that could clearly only be carried out on site, and in some cases they were operating equipment designed specifically for continuous use without shutdown. I would like to take this opportunity to put on record the Government’s appreciation of all those who work in those sectors in what can be challenging environments ordinarily, let alone in the middle of a pandemic. I would like to thank the essential workers who continued going to work on site and kept production going and sites safe during the pandemic.
The energy price rises that we have seen internationally in 2021 and 2022 have not helped business, particularly those with high energy usage. Increased energy demand globally as lockdown and restrictions lifted, increased demand for liquefied natural gas in Asia, upstream maintenance last year and increased demand for gas for electricity generation on the continent have all contributed to those high prices. Many large energy users will have hedging strategies in place that help to shield them from some of the effects of gas and electricity price rises, while others may be more reliant on spot market prices. We will continue to engage with businesses while higher pricing continues, and thereafter. My ministerial colleagues have regularly met the Energy Intensive Users Group, and we will continue to engage with the impacted sectors.
The energy price rises that have been seen internationally have not helped recovery from the problems caused by the pandemic, and global events in the last year have added yet more pressure—most obviously the barbaric Russian invasion of Ukraine. However, as well as facing these challenges, we are also now in a place where new global opportunities are presenting themselves, and we need to ensure that the UK is at the front of the queue with innovative ideas and solutions. Our energy-intensive industries—and notably glass—are well placed to be part of this.
This Government are determined to secure a competitive future for our EIIs. In recent years we have provided extensive support, including more than £2 billion to help with the costs of electricity and to protect jobs. This support includes electricity price relief schemes for eligible energy-intensive industries such as paper and pulp, glass fibre, iron and steel manufacture and batteries. The energy security strategy, published in April this year, set out how we will accelerate homegrown power for greater energy independence. Among the many proposals in that strategy, we committed to increasing the support we provide for EIIs over the next three years and effectively doubled the financial support that we provide. We will consider other measures to support businesses facing high energy costs, including increasing the renewables obligation exemption for eligible EIIs to up to 100%.
Furthermore, there are several other funds in place to support businesses with high energy use to increase efficiencies and reduce emissions, including the £315 million industrial energy transformation fund. Examples of sectors that have seen benefits have included the ceramics sector, which last year secured £18.3 million for the Midlands Industrial Ceramics Group from the Government’s strength in places fund to help establish a global centre for advanced technical ceramics. That will ultimately lead to the creation of 4,200 new jobs by 2030. The glass sector has also been awarded £15 million from our transforming foundation industries fund to establish Glass Futures, a state-of-the-art glass facility in St Helens, to which the hon. Gentleman referred. The co-operative work being done by Glass Futures and NSG Pilkington is already bearing fruit.
Recent trials using 100% biofuel in the production of float glass has created a product with a reduced carbon footprint of 80%—the lowest-carbon float glass ever made. This is truly innovative and exciting work, which I know the hon. Gentleman celebrates in his constituency. The Government will continue to work with Glass Futures to further support and deliver on our important objectives, and to foster an innovative, cross-sectoral working relationship. We will also continue to engage with the various councils, businesses and the Energy Intensive Users Group to ensure that their priorities are understood. The industrial decarbonisation strategy and the net zero strategy that we published last year outlined existing and new support for industrial decarbonisation that companies would be eligible for.
The Government and my Department are taking a number of steps to address the challenge of ensuring we have a secure supply of energy. We are in constant dialogue with business, National Grid and Ofgem to ensure that we get our approach right. I have outlined the energy intensive industries offering from the Department for Business, Energy and Industrial Strategy. However, many more initiatives across Government aimed at addressing these challenges are set out in the British energy security strategy, which was launched by the Prime Minister in April.
In my capacity as an advocate for British business, I am happy to use my platform to promote the exciting opportunities that are now presenting themselves to UK companies, including in the hon. Gentleman’s constituency. I remain committed to working with stakeholders to understand more about what can be done. I thank the hon. Gentleman and everyone here for participating in the debate, and for providing an opportunity for us to celebrate the contribution made by the British glass industry. We look forward to dealing with some of the energy and other challenges facing the industry, and to ensuring that the industry thrives, exports more and plays its proper part in our global Britain branding.