11:00 Mark Pawsey (Rugby) (Con)

I want to consider the difficulties faced by an important industry in the UK: producers and distributors of packaging products. The matters I want to raise fall broadly into three categories: issues affecting industry generally; the cost inputs by which the packaging industry is affected, particularly energy and international competition; and the impact of packaging on the environment. I realise that of those three items only the first is specifically the responsibility of the Minister and his Department, whereas the second is broadly that of the Department of Energy and Climate Change, and the third of the Department for Environment, Food and Rural Affairs, but I am pleased that the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk), is to answer, because I want to dwell on the broader issues affecting an important business sector.

The Government aim to reduce carbon dioxide emissions to 50% of the 1990 level by 2027. The packaging industry fears that that objective, together with other plans, will put UK manufacturers at a greater disadvantage than those located elsewhere in the world. It feels that the UK expects too large a carbon reduction in too short a time.

I thank my hon. Friend for giving way so many times. Although it is undeniable that we need to deal with climate change, is he not worried that we might not only lose industry abroad, but offshore our CO 2 emissions, which effectively means that we do not deal with the problem at all?

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11:54 Ian Lucas (Wrexham) (Lab)

We all agree with, and all three main parties supported, the Climate Change Act 2008, which will be the fundamental driver of industrial policy, and packaging policy specifically, in the UK for years to come. The Act has compulsory targets that we must achieve, because we all believe that it is important to deal with climate change. It is important that we convey the importance of that to the general public. I still do not think that most individuals—it was interesting to read about this in the papers that I received from the all-party group on the packaging manufacturing industry—recognise that climate change should be a driver in the decisions that they make when they purchase items. The fundamental driver, particularly in these difficult times, is cost. If we are serious about dealing with the profound challenges that climate change poses, we have to get across to everyone how important it is as a driver.

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12:10 The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)

I want to make a small plea. This subject relates to substantial areas that are far beyond my remit and come under the Department of Energy and Climate Change and the Department for Environment, Food and Rural Affairs. We work closely together, and I will do my best to answer hon. Members without creating new policies for my ministerial colleagues.

It is also important to bear in mind—several hon. Members made this point—that it is not only the hard capital issues that matter, because soft capital issues and skills matter, too. That is why we have made a determined change in the investment in and development of apprenticeships. During this Parliament, 250,000 additional apprenticeship places will be created. That is particularly important in an industry such as packaging, because it has to adapt and to be able to cope with conventional packaging issues and the growing issues around climate change and the environment. It is a crucial part of the equation for the packaging industry to be able to reskill its work force.

On energy costs, we recognise that our impact, when we look to set the right energy and climate change polices, needs to reflect both generators of electricity and their users. That is a natural tension in any form of energy or climate change policy. It is also important to stress that we, as a Government and not just as a Department, want to ensure that industry, and especially industry with a high or intensive use of energy, remains competitive. There is an issue about how different forms of energy have risen in price. Information from last year shows that, in the past five years, average industrial electricity prices have gone up by approximately 35% in real terms. In that same period, average gas prices have increased by 10%. It is therefore clear that there is a specific issue around electricity pricing, which might pose a risk to the competitive future of those sectors.

The hon. Member for Wrexham rightly pointed to a joint report by the TUC and the Energy Intensive Users Group. That is a powerful document that highlights the estimated cumulative impact of the future energy price in the coming years. That is why not only the Secretary of State in my Department, but our colleagues in the Department of Energy and Climate Change and in the Department for Environment, Food and Rural Affairs, are working together with the encouragement and involvement of Downing street to ensure that we specifically look at and address those concerns around industry.

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