Pulp, Paper and Board Industry

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 6th June 1984.

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Photo of Mr Harvey Proctor Mr Harvey Proctor , Billericay 12:00 am, 6th June 1984

asked the Secretary of State for Trade and Industry if he will make a statement on the prospects for the pulp, paper and board industry.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

I do not differ from the industry's opinion that 1984 should be a reasonably good year for papermakers.

Photo of Mr Harvey Proctor Mr Harvey Proctor , Billericay

Is my right hon. Friend aware of a recent energy survey in the pulp, paper and board industry, which shows that in 1983 the industry used 8 per cent. less energy per tonne of paper produced? Will my right hon. Friend take this opportunity to congratulate the United Kingdom industry on this achievement in industrial efficiency?

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

Yes. The industry's energy costs are very high. I congratulate it on taking steps to save about 8 per cent. of its energy costs through a scheme operated by the Department of Energy. I pay tribute to the industry's success and to the work of the Federation of the Paper Trade in promoting the scheme more widely.

Photo of Mr Robert Litherland Mr Robert Litherland , Manchester Central

Does the Minister agree that the recent dramatic escalation in the price of wood pulp will lead to further redundancies and closures? Does he agree that the Government's policy towards the industry will mean a very dim future with no chance of recovery?

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

The hon. Gentleman is far too gloomy. Changes in international prices have effects right across the world. The remarkable factor about the industry in the past two years has been the substantial investment from overseas sources in the Liverpool area and in north Wales. When those pulp mills are operating, the United Kingdom will be the second largest newsprint producer in the EEC.

Photo of Mr David Sumberg Mr David Sumberg , Bury South

Is my right hon. Friend aware of the great importance of the paper industry to my constituency in Bury? Is he further aware that the industry faces very stiff foreign competition which is often subsidised by Government money and cheap energy? Will my right hon. Friend give me an assurance that if that continues the Government will take positive action to ensure that the industry can compete on fair terms?

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

The answer to all of my hon. Friend's questions is yes.

Photo of Alan Williams Alan Williams , Swansea West

We join hon. Gentlemen in congratulating the paper industry on its 8 per cent. gain in energy efficiency, but does the Minister realise that despite that gain in efficiency the industry's competitiveness is being undermined by high energy costs, especially when compared with the costs in France, Italy and Germany?

Does the Minister agree that competitiveness is further undermined by artificially high rates of sterling in relation to the Euro currencies, and that future investment in such a capital-intensive industry has been severely prejudiced by the Chancellor's Budget decision to phase out capital allowances?

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

The right hon. Gentleman says that energy costs are high. Why are electricity and other energy costs so high in the United Kingdom?

Photo of Alan Williams Alan Williams , Swansea West

The right hon. Gentleman put them up.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

On the contrary, in the past two years the price of electricity to industry has been maintained. The reason why electricity costs are so high in this country is that the cost of coal is so high.