23:04 Andy Sawford (Corby) (Lab/Co-op)

The announcement in the Budget of a 100% exemption from the climate change levy is good, and I am sure the Minister will remind us of that, but we must remember that it was already at 90%. The Chancellor made much of the specific exemption for the ceramics industry, which did not previously qualify for mitigation. That has been hugely welcomed and we should welcome it tonight. I pay particular tribute to my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) for his campaign, in which I know other Members are involved. I hope the Minister will not mind me describing the situation in these terms, but all those measures put together look like a sticking plaster. He must acknowledge that our energy-intensive industries have a long-term problem, certainly a long-term challenge.

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23:16 The Minister of State, Department of Energy and Climate Change (Gregory Barker)

Let me say at the outset that I would be delighted to visit Corby. I think there had been an invitation from his distinguished predecessor but it fell with the by-election. I would be happy to visit Corby, not least as the Minister with responsibility in the Department of Energy and Climate Change, but also, wearing my other hat in government, as the Minister for business engagement with India. I am a huge admirer of the extraordinary achievements of the Tata group. I regularly meet its people, from both the steel part and the other parts of the company, but I have not yet had the opportunity to visit the Corby steel plant, so I would be happy to explore how I can find a date to do so.

I welcome this debate, not least because our energy-intensive industries make an important contribution to the UK economy and it is vital to keep them competitive. These industries are also vital to regional economies, particularly because, as the hon. Gentleman pointed out, not only do they support jobs—good, well-paying, satisfying jobs that people can build careers on—but their products are important in the transition to a low-carbon economy. Some people might think it strange that, as the Minister with responsibility for tackling climate change, I have made a point of making the case for recognising the contribution that energy-intensive industries make to our economy and urging that they get special treatment, but I see no contradiction in that at all. I have made it clear since coming into this job in 2010 that we take the challenge of decarbonising the economy very seriously and are determined to deliver our commitments, in line with the Climate Change Act 2008, which was passed under the previous Government. However, we are equally clear that decarbonisation must not mean de-industrialisation. On the contrary, if we are going to build the low-carbon infrastructure—the renewable energy assets—that we need in the UK, we will need to bring forth a new age of engineering. There are huge opportunities, in not only steel, but a range of sectors that are necessarily energy-intensive. There are huge opportunities to become more energy-efficient, to drive innovation and to become more competitive, but these industries cannot subvert the laws of physics. There is only so much that many of them can do.

I was told when I first came into the job that those industries were not suffering in quite the way they suggested and that the playing field with Europe was not so uneven, but I was continually lobbied by a number of industries, not least the ceramics industry, which does a very good job, and decided that I would only get to the bottom of it if I went to Germany myself. It is no coincidence that Germany, which over the past decade has seen a massive increase in its share of the global market for manufactured goods, particularly those from advanced manufacturing, saw at the same time a massive deployment—probably the largest single deployment in Europe—of renewable energy. The two have gone neatly hand in hand, and Germany has managed much more effectively than we have to ensure a better balance of policy, supporting the deployment of renewables with the necessary subsidy to drive those nascent industries to cost competitiveness with their fossil fuel equivalents while being sufficiently differentiating in its approach to protect energy-intensive industries.

In the Budget the Chancellor was able to go further and to take another step towards building a more differentiated package, with the announcement of an exemption for mineralogical and metallurgical processes from the climate change levy—the ceramics sector. That is allowed for under the energy taxation directive.

We recognise the need to minimise regulatory impacts on industry. We have taken steps to simplify our key schemes on energy efficiency and carbon reduction. We have taken measures to simplify climate change agreements, the carbon reduction commitment and the EU emissions trading scheme to remove overlaps and reduce administrative burdens. Actions we have taken include consulting on and simplifying climate change agreements and introducing an opt-out for the EU emissions trading scheme for small emitters and hospitals. We have consulted on a process for the simplification of the CRC and on new regulations to implement the EU emissions trading scheme in the UK from this year.

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