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Finance (No. 3) Bill

There have been many excellent contributions, so I shall keep my comments short. As secretary of the all-party steel group, I want to speak to amendment 12, in particular to subsection 4(c) and (f). We asking for the Finance Bill to be amended because of the very significant negative impact that the carbon floor price, at the level set, is likely to have on heavy industry, such as the Trostre steelworks in my constituency and similar steelworks and energy-intensive industries throughout the UK. To provide just one example, we are talking about tens of millions of pounds of incremental costs to Tata Steel UK—costs that are not faced by its European competitors, let alone by its global competitors. We have already seen manufacturers move factories to countries where costs are much lower and environmental conditions less stringent, but up until now the European emissions trading scheme has helped to create a level playing field within Europe. The real worry is that the proposed carbon floor tax will make us uncompetitive, even compared with our European competitors, and will drive Tata to invest elsewhere rather than in the UK. We all understand the need to reduce emissions and companies like Tata have made significant improvements in fuel efficiency, but emissions affect global warming wherever they are produced, which is why we work together in the European Union on emissions and try to negotiate globally on climate change issues. There is real concern that this carbon floor price will cause carbon leakage. Because the Government are imposing these conditions, manufacturers will choose to go to parts of the world where they can get away with less environmentally stringent conditions. They can therefore continue to produce the same amount of emissions, while we have lost that industry and lost valuable jobs. Our worry is that we are putting ourselves not only in an uncompetitive position vis-à-vis the cheaper countries in the world, but at a disadvantage in respect of our European competitors. Tata has made these points very clearly, stating:"““Other European operators are likely to remain operating under an 'abatement at least cost' regime, therefore exposing Tata Steel UK to a different cost pressure and impacting on our ability to compete even inside the single market.””" We are deeply concerned that the carbon floor price will not deliver the desired investment growth. In other words, we are facing a situation where companies such as Tata Steel UK and other similar manufacturers could make long-term investment decisions based on what they see in the carbon floor price. They could turn away from the UK and decide that instead of investing here in the UK, they will take their plans elsewhere. Tata Steel UK states that the carbon floor price will be"““increasing the longer-term risk to the sustainability of our UK operations.””" That is a very stark message indeed, which is why the amendment asks for proper account to be taken of the effect of this carbon floor price on energy-intensive industries and for details to be worked out on the mitigation measures that could be put in place for manufacturing industry and on measures to encourage the green technologies that we all so fervently hope to be part of and that will be part of the growth strategy for the future of manufacturing in the UK. For those reasons, I support the amendment.