British Glass Industry

Part of the debate – in the House of Commons at 4:14 pm on 14th July 2022.

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Photo of Conor McGinn Conor McGinn Deputy National Campaign Co-ordinator, Shadow Minister without Portfolio (Cabinet Office) 4:14 pm, 14th July 2022

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 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.