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10.22 pm

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas): I congratulate the hon. Member for Ludlow (Mr. Dunne) on securing the debate. I know that he is an active member of the all-party group on the aluminium industry and how much the industry means to him personally, as well as to his constituents. He told us of the two significant companies in his constituency and I am well aware of his deep knowledge of the industry. He is aware that I met members of the all-party group for an interesting and informative breakfast shortly before Christmas-doesn't time fly?-and have therefore heard some of the points that he raised this evening before in a less formal environment.

We are, of course, discussing an extremely important industry for the United Kingdom. I know that this has been a difficult year for Bridgnorth Aluminium, with
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business down by 40 per cent., as I understand it, and the loss that the hon. Gentleman described of many of its key partners in the UK. That is extremely significant and important. The Government need to deal with that, and we are determined to do so.

This country has a significant history in aluminium, starting with the smelting of aluminium ingots in the Scottish highlands. According to the Office for National Statistics, the UK aluminium industry is worth £425 million gross value added and employs 8,000 people. That means it is worth 0.3 per cent. of overall manufacturing value and employment. That is only part of the story, because the industry also plays an important role in the manufacturing supply chain with high technology industries such as aerospace, automotive and construction requiring high value and continually improving aluminium products.

I know that the aluminium industry also forms part of the identity of many local communities. In my constituency, we have Hydro Aluminium-a company that I have visited-and, nearby, the Novelis can recycling plant at Latchford, which is the largest in Europe. I spoke earlier about the effect of the recession on Bridgnorth, and we have also heard from my hon. Friend the Member for Ynys Môn (Albert Owen) about the closure of the primary smelter at Anglesey Aluminium, and the Rogerstone rolling mill in south Wales closed down last year with the loss of close to 1,000 jobs. Many other smaller companies have also closed, and aluminium prices, which are traded at world prices on the London Metal Exchange, fell greatly, but have recovered somewhat in recent months. As with other metals, most notably steel, demand has also suffered significantly. The Government recognise the importance of aluminium to this country, not just to the economy but to the local communities in which companies are based. That is why we have taken a number of steps to help the industry at this time.

First, it is important that we sustain demand for aluminium in the UK. That is why we have brought forward capital spending on construction, which accounts for about a quarter of the aluminium used in the UK. That policy was opposed by the Conservative party, but I know from my work in connection with the construction industry that it was greatly valued by the industry, and that the public sector work that has been undertaken has sustained the industry in what has been a difficult time. If the demand from the public sector had been taken out of the market, the pressures on the aluminium industry would not have lessened but would have increased greatly and the difficulties would have been worsened. That sustaining of the manufacturing sector by the Government, which was opposed by the Conservatives, has been an important aspect of support for the aluminium sector in the UK.

The Government are investing in infrastructure and in the wider supply chain. We introduced the car scrappage scheme, and we know that the automotive sector is important as a large user of aluminium. Only last week, I visited a Honda plant in Swindon that has been greatly sustained by the scrappage scheme and by the investment and the fiscal stimulus made by the Government to sustain the industry.

The second thing that the Government have done to help the aluminium industry is to fight consistently, and with some success, for it to be compensated for indirect emissions under the EU emissions trading scheme. Thirdly,
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we are doing all we can to secure our energy supply. We heard much about energy from the hon. Gentleman, but I must say that there is a lack of clarity about the Conservative party's policy on energy. For example, I am still unclear about the Conservatives' position on the nuclear development at Wylfa, on Ynys Môn, that my hon. Friend has mentioned. The last I recall of their position is the description of nuclear as a last resort.

Mr. Dunne: I am happy to put the Minister out of his misery. My colleagues with responsibility for energy policy have made it crystal clear that we are supportive of the rebuilding of nuclear plants, particularly on sites that have been closed and that are therefore relatively easy to get through the planning process.

Ian Lucas: I am grateful that, at long last, there appears to be some clarity on this issue from the Conservative party. However, it must accept responsibility for its failures regarding the development and sustaining of the Wylfa plant, which have been described by my hon. Friend.

The private sector is delivering important new infrastructure such as liquefied natural gas facilities, and we are backing a diverse energy mix with new nuclear power stations playing a key role alongside other low-carbon sources such as offshore and, to a limited extent, onshore wind. However, many individual Conservative Members have consistently opposed such developments in their constituencies.

We are also making sure that the market is working properly, by encouraging reform in neighbouring EU markets and further afield. We have been pressing the European Commission to implement energy market liberalisation throughout the EU, and we warmly welcome the robust actions that it has already taken, which have included anti-trust action and infraction proceedings.

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Finally, we are helping the aluminium industry through our Real Help programme. We have put forward a range of measures to help businesses survive the recession and come through in stronger shape. Those measures include the enterprise finance guarantee, which has offered almost 7,800 loans to customers with a total value of £795 million.

More than 110,000 companies have benefited from the Business Link health checks, and more than 160,000 companies have gained agreement to defer tax payments worth over £4.6 billion. I know from my own constituency, which is a manufacturing constituency, that that has been greatly welcomed by the manufacturing sector.

We also have the Manufacturing Advisory Service, which offers aluminium companies hands-on practical assistance to improve their businesses, and our Train to Gain programme provides advice and subsidised training in a range of vocational areas.

We know that a lot of activity is going on. We take the state of the aluminium sector very seriously indeed, and the hon. Gentleman asked a specific question about the climate change levy. I know that the industry has already made representations about the levy to him and to my hon. Friend. My right hon. Friend the Minister for Business, Innovation and Skills is meeting the Aluminium Federation later this week, when I am sure that the matter will be discussed further.

I recognise of course that the past 18 months has been an extremely difficult time for the aluminium industry. In particular, the closure of Anglesey Aluminium Metal Ltd was a great blow, not just to Ynys Môn and Wales but to the UK as a whole. The sector is facing real challenges: we need to confront them together, by dealing with demand, looking at energy supply and ensuring that the sector has a sustainable manufacturing base in the UK.

Question put and agreed to.

10.32 pm

House adjourned.

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