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The Budget

I did not expect to be called so early. In view of your earlier comments, Mr Owen, I will concentrate my remarks on the Budget, and given the comments from Government Members, I will speak about private sector jobs in Wales. I want to return to the carbon floor price, to which my hon. Friend the Member for Llanelli referred in the last Welsh Grand Committee. Although on that occasion the Minister did not have the chance to address her points in his concluding remarks, I ask him to take on board the real concerns of hon. Members who have an interest in steel in their constituency and listen to what we are saying. We have heard much from Government Members about Wales being open for business, and the need for private sector growth and increased manufacturing. In the Budget, however, after a paltry six-week consultation over the Christmas period, the Government introduced the carbon floor price, which will hit hard some of our largest and biggest employers that are intensive energy users, such as Tata Steel in my constituency. This not only relates to steel; the measure will also hit producers of ceramics, papers, cement and glass, who employ about 250,000 people in the UK. Obviously, the steel industry is also a huge employer. The inaugural meeting of the glamorously titled energy intensive industries all-party group two weeks ago was one of the largest such meetings that I have ever attended. All those industries were represented and it demonstrated the strength of feeling from industry about the measure. I appreciate that the aim of the carbon floor price is laudable in seeking to encourage investment in low-carbon generation. In his Budget speech, the Chancellor made great play of the fact that the UK will be the first country to implement such a measure. However, he has taken no account of the fact that it will involve a significant extra cost for intensive energy users. A balance must be struck. Tata Steel warns that any potentially positive measures in the Budget were overshadowed by the introduction of the carbon floor price, which will apply only in the UK and ““represents a potentially severe blow to the sustainability of UK steelmaking.”” I noticed today during Prime Minister’s Question Time that in response to my hon. Friend the Member for Swansea West, the Prime Minister seemed to suggest he knew better and spoke about investment in steel. Nevertheless, that was Tata Steel’s response to the Budget. This is a unilateral tax that no other country in Europe or the world will enforce. Steel produced elsewhere in the world will not be subject to the extra cost, thereby making UK steel less competitive. Many of the industries affected are owned by foreign companies that can choose where to invest. There is a real threat to the UK if it adopts different policies to the rest of the world.