HC Deb 03 May 2001 vol 367 cc971-2
7. Mr. Derek Twigg (Halton)

What contribution the chemical industry in (a) the UK and (b) the north-west made to GDP in the last year for which figures are available. [159064]

The Minister for Competitiveness (Mr. Alan Johnson)

In 1997, the chemical industry nationally accounted for 2.2 per cent. of the UK's GDP, with approximately 0.5 per cent. attributable to the north-west.

Mr. Twigg

I thank my hon. Friend for that answer. Does he recognise the strategic importance of the Ineos Chlor firm in Runcorn, in my constituency? It is the second biggest chlorine producer in Europe and employs about 2,000 people. Will he do all that he can to ensure that the firm's grant application comes to a successful conclusion soon? The background is that there have been 450 redundancies in my constituency, and that ICI may not have given the firm all the details and information necessary to make investment decisions before it was sold.

Finally, will my hon. Friend do what he can to help the employees and managers at Bush Boake Allen Inc. in my constituency? They are in the middle of a management buy-out at the moment, and redundancies are also possible there.

Mr. Johnson

We are in touch with both companies. Ineos is one of the most important chlorine producers in the country. We are in close touch with Ineos and the regional development agency in connection with future support for the company. As we speak, we are discussing a regional selective assistance application for the plant.

We are also in close contact with the other company mentioned by my hon. Friend. The chemicals industry is very important to the country, and in fact is the largest manufacturing sector. It is especially important to the north-west. Last year, my right hon. Friend the Secretary of State launched the north-west chemicals initiative. We intend to ensure that the sector and the region get the fullest support from the Government.

Mr. Graham Brady (Altrincham and Sale, West)

The Minister will know that the Government's new energy tax will hit manufacturing and chemical industries in the north and the midlands especially hard. It will not hit service industries in the south so hard. What calculations has he made of the net outflow of tax revenue from the north and the midlands that will occur because of the introduction of the climate change levy?

Mr. Johnson

The DTI has negotiated successfully with the chemicals industry the levy discount scheme of up to 80 per cent., which the industry has greatly welcomed. The plant that has just been mentioned—Ineos—pays no climate change levy. It is exempted because it is part of the electrolysis process, which is very important.

Mr. Alan Duncan (Rutland and Melton)

E-business.

Mr. Johnson

Yes, but I think the hon. Member for Altrincham and Sale, West (Mr. Brady) is exaggerating the effect of a very important process in ensuring that we keep to the Kyoto commitments, which I believe all parties should fully support.

Mr. Andrew Miller (Ellesmere Port and Neston)

Given the importance of the sector to the north-west, and the fact that, as it is a higher paid industry with lots of housing associated with former workers close by, pockets of deprivation have inevitably been created close to the industry, will my hon. Friend enter into discussions with the Department of the Environment, Transport and the Regions and the industry to see what positive measures can be put in place to help to regenerate employment in areas close to the sector?

Mr. Johnson

My hon. Friend makes an important point. The chemicals industry is so important to the north-west because of the points that he makes. The RDA has made the chemicals industry a priority for that region. However, it is important to emphasise that the growth in chemicals has consistently outpaced the growth in the economy overall. Indeed, the growth in the chemicals sector last year was double that of manufacturing in general. The industry has a good future, but we must ensure, as my hon. Friend says, that we deal with some of the problems that we inherited from the past.