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UK Chemical Industry

It is a great pleasure to serve under your chairmanship, Mr. Wilshire. I wish you well in your retirement. I think that this will be my last speech in this place, as well. It is a great pleasure, also, to see my hon. Friend the Minister here, because he has shown quite an interest in some of the subjects in which I have been interested. I dedicate this debate to Dr. Ashok Kumar, the late Member of Parliament for Middlesbrough, South and East Cleveland. I succeeded Ashok as chairman of the all-party parliamentary group on the chemical industry, which is administered by the Chemical Industries Association. It was his intention to become chairman of the all-party group again after my retirement. I am sure that we all agree that Ashok will be sadly missed in this place, and I send my condolences to his family and friends. The UK chemical industry, including pharmaceuticals, is a £60 billion business, which employs over 600,000 people. It adds £30 million to our balance of trade every working day and represents 12 per cent. of total UK manufacturing—twice that of aerospace. Throughout the 1990s, 16 countries produced 80 per cent. of the total world output of chemicals. The UK was sixth behind the USA, Japan, Germany, China and France. According to figures produced in 2005 by CEFIC, the European Chemical Industry Council, the EU chemical industry leads all EU manufacturing in terms of value added per employee, and is second only to the USA in world output. Therefore, for both the UK and Europe, the chemical industry is a valuable contributor to our economies. The chemical industry's current major concerns are the cost and security of energy supplies, skills training and recruitment, the availability of capital for investment in developing new products and acquiring new plant and equipment, the costs of transport, and the regulatory burden placed on the industry in recent times, which has had the biggest impact. The election manifesto just published by the CIA expands on those concerns. Our Government have decided that energy security is a major concern, and major changes in energy supplies are under way, with less reliance on imported oil and gas in future years and more reliance on a basket of renewable energy generation technologies and nuclear fission. Coal will play a major role in future, but only if either pre- or post-combustion carbon capture technologies are incorporated in new plant, or retrofitted to old plant. That will require massive capital investment which, in turn, will result in increased energy costs.