My hon. Friend pre-empted part of my speech. She is absolutely right that we need more houses, and that it makes absolute sense for the bricks for those houses to come from local businesses in the UK.
The loss of the free allocation I have described will, when combined with an escalating market price for carbon allowances, significantly increase the cost of production. Meanwhile, competing construction materials, such as cement, will retain free allocation, creating market distortion. The situation is particularly acute in the UK as the carbon price floor, a UK-only policy instrument, adds further costs to the EU ETS carbon price for power producers. That additional cost is being passed on to businesses via electricity prices, with manufacturers being unable to pass them on to customers. Countries such as Germany and Italy are compensating for renewable electricity charges, but the UK is not. That further reduces the competitiveness of the UK brick and clay roof tile industry.
Wienerberger has factories across Europe, including in countries with significantly lower electricity costs than the UK. Any increase in UK production costs makes future investment in its UK factories far less attractive than investment in other European countries.