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Tristram Hunt (Stoke-on-Trent Central) (Lab)
I beg to move,
That this House has considered Government support for the ceramics industry.
It is a great pleasure to serve under your chairmanship, Mr Hollobone.
I shall begin with a quotation from Arnold Bennett, the Tolstoy of the potteries. In his masterpiece, “Anna of the Five Towns” he described Henry Mynors working the potter’s wheel as follows:
“He knows all its tricks and aptitudes; when to coax and when to force it, when to rely on it and when to distrust it…Clay is always clay.”
Those of us who were lucky enough to catch the recent excellent BBC series, “The Great Pottery Throw Down”—filmed in Middleport in the constituency of my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth)—know just what wonders clay can conjure. From the success of the British ceramics biennial to the continuing allure of Emma Bridgewater’s earthenware, Britain has rediscovered its love for cups, saucers and tableware.
More than that, the defining image of the first world war centenary commemorations has been the ceramic poppies installation, filling the Tower of London moat with a sea of red. Designed in Derby and fired in Stoke, the tens of thousands of hand-crafted poppies symbolised a revival based on not just artistic innovation but industrial might. We therefore hold this debate in a moment of optimism about the future of the ceramics industry and that of the greatest ceramics city in the world, Stoke-on-Trent. Yet, if we are to secure the continued revival of earthenware, china, clay, tile, roofing and other ceramic industries, we need a Government committed to an industrial strategy that supports and grows pottery businesses throughout the UK.
The history of pottery in Stoke-on-Trent is long, stretching back a good 500 years. Out of the brown and yellow north Staffordshire clay came butter pots and flower pots. In the sun kilns of Bagnall and Penkhull, local artisans started to glaze their wares and develop a reputation for craftsmanship. But Europe’s ceramicists remained in the shadow of China, which had long mastered the magic of porcelain, the famous white ceramic formed by kaolin, named after the hill just outside Jingdezhen. Only in 1768 did the Plymouth apothecary William Cookworthy crack the recipe. With the help of Cornish clay, Britain joined Meissen and Sèvres in porcelain production. China—Britain’s new word for pottery and porcelain—became the eighteenth century rage. No one exploited the new era of industrial production, design and innovation more than Josiah Wedgwood. From his Etruria factory, he unleashed a volley of fashionable new designs that caught the attention of Queen Charlotte and Britain’s expanding middle class. His trademark jasper and basalt production followed.
In 1934, J.B. Priestley visited Stoke-on-Trent on his celebrated English journey. He, too, fell for the elemental, timeless attraction of ceramics. He celebrated the fettlers, the mould-makers, the dippers and the master potters for
“doing something that they can do better than anybody else…Here is the supreme triumph of man’s creative thumb.”
Priestley caught the industry at its peak. The decline of the British ceramics industry arguably began with the Clean Air Act 1956 and the dismantling of some 2,000 coal-fired bottle kilns. For all the benefits of open skies and modernised plant, the law imposed sudden and significant costs on the manufacturing process. In an attempt to offset those costs, the industry embarked on a round of mergers and acquisitions, resulting in an over-concentrated ceramics sector. The high interest rates and exchange rates of the 1980s hammered exports. The rise of takeaways and the end of wedding lists undermined demand. Most damaging of all was the growing threat of the far east. Labour and energy costs in China put British production at a marked disadvantage.
Wedgwood went bust and Spode went into receivership, and between the early 1980s and 2010, some 40,000 jobs were lost in the ceramics industry. With them went Stoke’s cityscape and parts of its culture. The Minton factory, where Pugin’s tiles were fired for the Houses of Parliament, was turned into a Sainsbury’s. Then the final insult: in 2010, the entire collection of the Wedgwood Museum was threatened with disposal.
Six years on, the Wedgwood Museum has been saved and the industry is making profits, creating jobs, finding export markets and coming up with new designs. There is excitement and enthusiasm about British ceramic design. There is a new competitiveness in great companies such as Steelite, Churchill and Portmeirion. There is a new culture of partnership.
Jeremy Lefroy (Stafford) (Con)
I am most grateful to the hon. Gentleman for securing this debate. Does he agree that Dudson, Steelite and many other companies have a strong record of exporting around the world? The last time I looked, ceramics make a net contribution to our balance of trade. It is one of the few industries that does.
Tristram Hunt
The hon. Gentleman is exactly right: it is a great export industry. It is interesting that the companies that stayed in the UK, did not offshore all their production, invested in research and development and design, and supported innovation, are growing. As I am sure my hon. Friend the Member for Stoke-on-Trent North will explain, her constituency is pretty much dominated by Steelite, which grows every week. That is only to be admired.
A new culture is emerging among trade unions such as GMB, the British Ceramic Confederation and local businesses, and a new culture of research and innovation is coming out of facilities such as Lucideon in Stoke-on-Trent—our ceramics research hub. Today, as the hon. Member for Stafford (Jeremy Lefroy) suggested, the ceramics sector exports £500 million a year, employs about 20,000 people directly and enjoys annual sales of about £2 billion.
To sustain that success, I have some requests for the Minister. The ceramics industry is an energy-intensive sector. Energy comprises up to 30% to 35% of production costs. We are severely disadvantaged by the current plethora of UK and EU policies. For example, only seven ceramics manufacturers in the UK are likely to receive renewables compensation, in contrast to more than 100 German and 140 Italian companies. Policies relating to the EU emissions trading scheme are very important for competitiveness. The question for the sector is: which processes will be awarded carbon leakage status for phase 4, which will begin in 2021?
There are particular worries about the tiering on just a handful of sectors, and concerns, which my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) might pursue, about the roof tile and brick businesses. The Government’s much-vaunted house building programme should not be carried out on the back of Polish, Belgian or Dutch bricks. We should produce them in the UK.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Does my hon. Friend agree that, although of course we are all concerned about the future of the steel industry, it is very important in our discussions with Brussels that the ceramics industry is not disregarded or harmed as a by-product of our attempts to help the steel industry?
Tristram Hunt
My hon. Friend, who has been a brilliant campaigner for the brick business over many years in our part of the world, is exactly right: we would be shooting ourselves in the foot, in terms of industrial policy, if the advances that we want to make in the steel industry undermine the ceramics industry. They are both energy-intensive sectors, so they share similar challenges relating to energy costs.
We would like to hear that the Minister is fighting to ensure that heavy clay producers are also awarded carbon leakage status. We welcome the ceramic valley enterprise zone, but without support on the EU emissions trading scheme, even state-of-the-art facilities will be punished for their carbon costs. We serve neither British industry nor the global environment if we rack up industrial energy prices, export jobs from Britain and import carbon emissions.
It is very important that consumers know where products are made. The outsourcing of production is nothing new in the ceramics business—indeed, during busy periods, Josiah Wedgwood himself sometimes asked other manufacturers to make up blanks for him—but in an age of brand value, the back stamp remains all-important. In Stoke-on-Trent, we are proud to house the turnover club, whose members flip the crockery in restaurants and even dinner parties to find out where it was made.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
Dinner parties? Good heavens!
Tristram Hunt
Not while the food is on it, Minister. [Interruption.] Well, sometimes.
For a long time, manufacturers have made products abroad and backstamped, “Made in England”. The rules are clear: the country of origin is where the blank is fired. In an age of global trade, it is perfectly right that products are made in China, Thailand or Indonesia, but consumers also have a right to know whether their purchases are subsidising poor environmental standards and weak labour laws. For an embarrassingly long time, the free market fundamentalists at the Department for Business, Innovation and Skills have opposed the European Union’s compulsory country of origin proposals. Will the Minister tell us whether that is still the case today?
As I am talking about Europe—I subject I know you care passionately about, Mr Hollobone—this is a good moment to reflect on the merits of being inside the European single market for the ceramics industry. It is not only that Stoke-on-Trent and Staffordshire have been helped by £130 million of EU funds and that Europe is a crucial export market; it is thanks to being part of the European Union that our ceramics industry has benefited from the anti-dumping tariffs of between 13% and 36% that are placed on Chinese kitchenware and tableware. Those tariffs have played an important role in the pottery industry’s regeneration. Will the Minister confirm that we will support their extension in 2018, that being part of Europe has helped us—although, I hate to say it, the Government have always opposed those measures—and that if we were outside Europe, tariffs would be placed on British ceramics manufacturers exporting to the single market?
I might be guilty of over-concentrating on the history of the ceramics industry—[Interruption.] Never! Our heritage is part of our brand and our pride. We have to build the careers, apprenticeships and markets of the future. I support the Government’s apprenticeship levy, and I hope that Staffordshire University will forge new partnerships with other higher education institutions to increase the number of designers and manufacturers. I hope to see new factories in the enterprise zone, and I fully back the Materials Processing Institute’s plans for a materials catapult centre to benefit research and development in the ceramics industry. Will the Minister ensure that the materials catapult is given a supportive hearing by her Department?
This week we heard that the Government will centralise all school expenditure as part of the funding review. As a Stoke-on-Trent MP, it drives me mad to see schoolchildren eating off trays, rather than plates, as if they are being set up for life either in prison or as airline passengers. Education Ministers love to micro-manage, so will we see them urging schools to buy and use ceramic plates for their pupils?
New jobs, new orders, new businesses being started, and even another series of “The Great Pottery Throw Down” being commissioned—these are exciting times. Thanks to automation and globalisation, we will not return to the tens of thousands employed in the ceramics and pottery industries in previous decades, but we can build a new high-wage, high-skills ceramics industry of the future, trading on Stoke-on-Trent’s heroic past while taking products and processes into the future. I very much hope that we may take from the debate the Government’s support in that endeavour.
Several hon. Members rose—
Mr Philip Hollobone (in the Chair)
Order. The debate finishes at 5.58 pm. I will call the first of the Front-Bench speakers no later than 5.36 pm. Two Members are standing, so you have about 12 minutes each.
Steve Double (St Austell and Newquay) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone.
I congratulate the hon. Member for Stoke-on-Trent Central (Tristram Hunt) on securing the debate on a subject that is close to my heart. The motion is about Government support for the ceramics industry, and the starting point of any industry is the raw material—I am speaking about china clay. If we are to support the ceramics industry in the UK, we need to support the china clay industry as well.
I am incredibly proud to speak not only as a Cornishman who grew up surrounded by the china clay industry in and around St Austell, but as the Member of Parliament for the area, which has been at the forefront of china clay production for hundreds of years. The sky tips dominate the landscape of mid-Cornwall, reminding us every day of our great heritage and our history of clay production. Generations of Cornish families, including my own, have worked in the industry. Barely any part of my constituency has not been touched directly by china clay production.
China clay has long been big business in Cornwall. St Austell’s relationship with it, as the hon. Gentleman rightly pointed out, goes back more than 200 years, to when William Cookworthy first made the discovery in Cornwall. At the height of the trade, literally millions of tons of china clay were being exported to all corners of the world. Cornwall soon got a reputation for the highest-quality clay in the world, so it is no surprise that that was quickly recognised by the ceramics industry, establishing the connection with places such as Stoke-on-Trent.
A large proportion of Cornwall’s china clay production has moved overseas in recent years, but the industry remains extremely important to Cornwall. In fact, it is difficult to overstate its importance to Cornwall and, in particular, my constituency. Although employment in the industry has declined over the past 20 or 30 years, it is still the largest private sector employer in the area. The majority of the clay produced in Cornwall is exported. In fact, china clay contributes about £150 million a year to the UK’s balance of payments, and that should be preserved. The industry has also shaped our heritage in mid-Cornwall, and that is of great importance to us. As I said, every day we see the marks left on our landscape—for example, the Eden Project is built in a former china clay pit.
With the clay and ceramic industries so important, we should look at ways in which the Government can support the industries and the thousands of workers throughout the country employed in them. As producers in Brazil and China emerge, undercutting exports, there are fears that problems could be exacerbated if action is not taken and if the existing proposals for carbon leakage protection are pursued.
In my constituency, Imerys is the only remaining company that produces kaolin and ball clay. Such operations, by their very nature, are highly energy-intensive processes, and energy represents about 27% of production costs. Consequently, energy consumption has always been a major focus for the industry and is minimised by it wherever possible. Imerys has been at the forefront of energy efficiency and the use of alternative and renewable energy sources for many years. However, the fact remains that, given the international market for its products, further increases in production costs could result in it losing business to European Union and non-EU competitors.
That brings me to my key point: what will the Government do to support the ceramics industry and, specifically, the china clay industry? Kaolin and ball clay operations are deemed to be at risk of carbon leakage. They therefore received a free allocation of allowances. However, there are concerns that, under the UK’s preferred approach to carbon leakage protection post-2020, Imerys is likely to receive what it feels is an inadequate level of free allowances to remain internationally competitive.
The reduction in the free allowances will have a significant impact on the industry and force the company to purchase a significantly greater proportion—possibly all—of its allowances to cover future carbon emissions. That will obviously severely damage its global competitiveness and disadvantage the kaolin and ball clay sector against competing suppliers that may receive higher levels of carbon leakage protection.
Angela Smith (Penistone and Stocksbridge) (Lab)
Does the hon. Gentleman agree that when we talk about rebalancing the economy, we are talking not only about the midlands and the north of England, but about areas such as Cornwall, which desperately need to maintain this kind of economic activity? Surely it is incumbent on the Minister to remember that when thinking about the relevant policies.
Steve Double
I wholeheartedly agree. It is well known that the Cornish economy, and that of the south-west in general, fall way behind the UK national average. It is crucial to do all we can to bridge the gap, but I would say that the Government are doing a great deal, investing record amounts of money in the south-west and already supporting the Cornish economy in many ways.
I am, however, addressing the specific sector of the china clay industry in Cornwall. I do not want to see it put at greater disadvantage on the world market, so no decisions that make it less competitive on the world stage should be made. Based on existing emission levels and forecast prices of carbon, the proposed carbon leakage changes could add £1 million a year to Imerys’s production costs. We should, however, not only be proud that the UK produces the best-quality china clay in the world, but be doing all we can to protect and support the industry as a world leader.
Recently, we have seen the impact of uncompetitive production costs, driven in particular by energy costs, on a major industry: our steel industry. We cannot allow the same fate to fall on the china clay industry. We cannot sacrifice the china clay and ceramics industries in order to save other sectors. I simply urge the Government to look carefully at their approach to the carbon leakage allowance and not to make any decisions that will reduce the competitiveness of an industry that is vital to Cornwall.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
It is a pleasure to be here under your chairmanship, Mr Hollobone. It is an honour to follow the hon. Member for St Austell and Newquay (Steve Double).
I thank my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) for securing such an important debate. I, too, am proud to represent the potteries, the beating heart of the British ceramics industry since its birth, and I am the chair of the newly formed all-party group for ceramics. I have the privilege of representing Burslem, the mother town of Stoke-on-Trent, where—I hate to challenge my hon. Friend—a thriving pottery industry has existed since as far back as the 12th century. Today, it is the home of such fantastic British companies as Steelite, Royal Stafford and Moorcroft. Those businesses are complemented by competition from Dudson and Churchill, based in Tunstall, and are supplied with raw materials from my hon. Friend’s constituency by our very own Furlong Mills.
Those companies live up to our heritage and represent the very best of modern British manufacturing. In Middleport, home of our historic Burleigh Ware, we see the firing up of a new generation of master potters on “The Great Pottery Throw Down”, which I am delighted to announce has been recommissioned for a second series by BBC Two—I urge all hon. Members to apply for next year.
Today, more than 2,500 people are directly employed by the ceramics industry in my constituency, fuelling world demand for high-quality ceramics from tiles to tableware. The industry remains the single largest employer in Stoke-on-Trent North and Kidsgrove. It continues to innovate, invest in new technology and fulfil its commitments to green and sustainable manufacturing. While I am touching on the industry, it would be remiss of me to suggest that ceramics is only tableware and tiles. Many other products are reflected in the industry.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
Raeburn Brick in my constituency is Scotland’s only remaining clay brick company, making 15% of the bricks used in Scotland—the other 85% are imported—and it operates as a highly energy-efficient company. Does the hon. Lady agree that we must do all we can to support this local employer and that, with tens of thousands of new houses to be built throughout Scotland in the coming years, it is in our economic interests to do so?
Ruth Smeeth
I wholeheartedly agree that investment in ceramics is as much in our national interest as it is part of our wider economic interests. Like our city, the industry has a proud past, but it could have an even brighter future if the Government are prepared to support it. My local businesses are keen to invest in research and development, to expand production and to create jobs, but a toxic cocktail of policies is creating great uncertainty. If future profits are seen to be at risk, investment will stall and our economy will suffer.
I am proud to support the British Ceramic Confederation’s EARTH campaign, which is doing vital work to bring policies to light. One such policy is the decision to confer market economy status on China, which would prevent meaningful anti-dumping measures against unfair Chinese export practices. The Government have tried to claim that granting China market economy status would not affect the ability to protect British industry and that anti-dumping measures could still be put in place, but that fails to take into account the fact that anti-dumping measures are calculated at a far lower rate for free market economies.
If China were to be granted market economy status, any anti-dumping measures placed on it would be calculated on the basis of the domestic cost of production in China, which is greatly subsidised by state support and kept lower by the cheap cost of labour employed in appalling conditions. The result would be so-called protections that in practice would be virtually worthless and nothing to stop European markets from being saturated with Chinese productions at extremely cheap prices.
Paul Farrelly
Does my hon. Friend agree that the industry’s concern for many years has been not just dumping from China, but counterfeiting? Many companies such as Doulton and Wedgwood have found themselves in a position where, weeks after producing new designs, professional salesmen from Chinese industrial complexes are going around Europe with portfolios of copies of their designs marketed at a third or a quarter of the price. That remains a concern.
Ruth Smeeth
I very much agree with my hon. Friend and would suggest that one reason we need to protect our industry is the quality of what comes out of our factories as well as the design and investment.
Angela Smith
My hon. Friend is illustrating perfectly why MES for China would be damaging to our ceramics industry. Our steel industry, which is already under severe stress, would also be threatened by such a move. Does she agree that the Government ought to think again about their support for MES for China, given the risk it poses of potentially permanent damage to two of our important foundation industries? As parliamentarians, we need to support both industries in their bid to create a level playing field in terms of both cost and competitiveness.
Ruth Smeeth
Of course I agree with my hon. Friend, who speaks with authority as one of the few Members who represents both the steel industry and the ceramics industry, both of which could be heavily damaged by China’s market economy status.
China currently meets just one of the five criteria required for market economy status, a fact that has been confirmed by the Minister. However, simply to say that China does not meet the criteria is to grossly underestimate the extent to which the Chinese economy is rigged in its own favour to the detriment of British and European industry. A recent report by the European Parliament—those may be words to avoid—concluded that state-led distortions in the financial sector are rife, that bankruptcy systems are malfunctioning and that political influence can be seen in close to 100% of China’s biggest firms. Far from being anything resembling a free market, 38% of China’s industrial assets are state owned.
Yet while the EU recognises the threat posed by granting MES to China, the Government appear to be supportive of the bid. The effect of that would be catastrophic for British ceramics and devastating to the British economy as a whole, affecting about 3.5 million jobs and up to 2% of GDP in the first two years. Import-sensitive sectors such as tiles and tableware would be especially hard hit, as they have no defence against Chinese dumping. Companies such as Johnson Tiles, based in my constituency, are at the forefront of modern production, but if we are not careful, their reward for innovation will be to be undercut in a market that they have pioneered.
It should come as no surprise that the Government have been equivocating on this issue. Their approach to China has resembled less of a negotiation than a fire sale. From steel to real estate and our nuclear reactors, the message coming out loud and clear is “Everything must go.” When it comes to supporting ceramics specifically, the Government talk a good game, but a significant proportion of the tableware used in the Department for Business, Innovation and Skills is made in China. Far from celebrating “Britain is GREAT,” the Minister eats from tableware at the Department—
Anna Soubry
I do not normally intervene, but it is really important that we do not mislead. I certainly have never had any tableware of any origin in the Department. If I do eat there, it is a takeaway sandwich in plastic wrapping or a plastic box.
Anna Soubry
I accept that is wrong, but I will not have misleading information.
Ruth Smeeth
As a former trade union officer, I urge the Minister to try to get better terms and conditions and to eat a meal. I suggest that, for her colleagues who sit down to eat, 60% of the crockery used in the Department is made in China. That statistic was secured through a parliamentary question. When will “Buy British” be a policy and not just a slogan?
We have already seen from the devastating impact on the British steel industry of what happens when the Government sit back and do nothing to defend British jobs and trade, and we cannot afford for the ceramics industry to suffer the same fate. Our ceramics businesses are doing everything right. They just have the misfortune of living, as the Chinese might say, in interesting times. However, I am in no doubt that the industry can continue to thrive if the Government are prepared to stand up for British business.
All we ask for is a level playing field. Our ceramics industry is the best in the world, but we cannot compete fairly if state-funded Chinese companies are allowed to flood our domestic market with cheap products. For generations, the lives and livelihoods of my constituents have been shaped by the ceramics industry, as the clay beneath our towns was shaped by the potters’ hands. A world-beating industry was born in the kilns of Stoke-on-Trent and wherever we travel today we will find products proudly bearing our back stamp. We cannot let that great industry go up in smoke.
Mr Philip Hollobone (in the Chair)
We now come to the Front-Bench speeches. The SNP gets five minutes, the Opposition get five minutes and the Minister gets 10 minutes—not my rules; they are the guidelines for the House.
Dr Paul Monaghan (Caithness, Sutherland and Easter Ross) (SNP)
I congratulate the hon. Member for Stoke-on-Trent Central (Tristram Hunt) on winning the debate and his entertaining account of the industry. As my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) noted, ceramics are enormously important to Scotland’s economy and to my constituency. Anta pottery in Fearn, Highland Stoneware in Lochinver and Northshore Pottery in Caithness are examples of companies that produce ceramic products in Scotland.
Anta is one of the largest employers in Easter Ross outside of the manufacturing and oil industries. Highland Stoneware is based in Sutherland and has a smaller factory in Ullapool in Ross-shire. It is a major employer in the local economy, with a reputation for producing some of the finest hand-crafted ceramics in the world, completing more than 700,000 orders each year—a remarkable achievement. Northshore Pottery operates in a far north-western corner of Scotland, close to Wick. The company is owned by a lady called Jenny Mackenzie Ross, who reflects Norse culture in her work and specialises in architectural ceramics. These are very different companies. Each operates in remote and rural areas, supports a range of local tradesmen in completing their work and, of course, returns approximately 65% of turnover to staff wages.
As the hon. Member for Stoke-on-Trent Central noted, the ceramics industry is very energy-intensive. In 2014, some ceramics manufacturers reported that their energy bills made up 35% of their total overhead costs. In addition, its energy demands are inflexible and cannot be easily tapered depending on the time of day. Energy costs appear critical to the success of the industry. Ceramics producers, including brick makers, have been critical of the fact that the steel industry has received exemptions from UK renewables taxes, while ceramic producers have not, rendering the industry unviable. Closing down energy-intensive industries will not make a difference to global carbon output, but will export jobs from an industry that makes a net contribution to the economy, as the hon. Members for Stafford (Jeremy Lefroy) and for St Austell and Newquay (Steve Double) noted.
The British Ceramic Confederation criticised the UK Government’s autumn statement for failing to provide certainty on, among things, energy costs for this industry. The hon. Member for Penistone and Stocksbridge (Angela Smith) mentioned the confederation’s submission made in January in respect of the Budget. As part of its EARTH campaign, the confederation listed five actions that the UK Government should take in order to create a level playing field internationally. It called for an EU emissions trading scheme to ensure that all ceramic subsectors receive full mitigation measures to guard against leakage of carbon, investment and jobs to competitors outside the EU, as well as action to reduce the cumulative costs of energy, climate and environmental policies that are harming the sector’s ability to remain internationally competitive.
David Mowat (Warrington South) (Con)
I am glad to hear the hon. Gentleman talking about energy in that way, because it seems fundamental. It is important we understand that, in Germany today, ceramics manufacturers are paying approximately half what manufacturers are paying in the UK. All of us have a role to play in getting the balance right between green taxes and lower energy costs, because it is vital for these industries.
Dr Monaghan
I absolutely agree; it is vital. These industries are struggling in the UK and need support from the Government to create the level playing field that the hon. Gentleman speaks of.
The confederation calls for long-term partnership working with the UK Government and funded assistance for the sector to accelerate investment in existing technologies and the development of breakthrough decarbonisation technologies. The confederation has also called for the rejection of unilateral recognition of China as a market economy, which would leave manufacturers inadequately defended against a rising tide of cheap imports, about which we have heard today. Finally, it called for the UK Government to achieve higher levels of economic growth through a revised housing policy, to enable investment in the supply chain in the UK rather than overseas.
The Scottish Government recognise the importance of Scotland’s manufacturing sector and are committed, through their new manufacturing strategy, to continue doing whatever is necessary to support the sector. Through their enterprise agencies, that demonstrable commitment is focused on strengthening and supporting Scotland’s economic links with overseas markets. The Scottish Government will continue to invest in and promote exports to help to build sustainable economic growth for Scotland. Similar affirmative action by the UK Government would be of enormous benefit.
Yvonne Fovargue (Makerfield) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) on obtaining this debate and speaking so passionately about the importance of the ceramics industry to his constituency. The UK ceramics industry has a proud heritage in the area, as so eloquently described by my hon. Friend, but it is also in the vanguard of novel material development and advanced manufacturing. Some of Britain’s most iconic brands have been, and still are, found in the ceramics industry—I hope that my hon. Friends will not fight about which ones came first. However, as we have heard, the full growth potential of the industry is not being achieved, as a combination of policies is undermining investment, trade, growth and jobs.
The British Ceramic Confederation launched the EARTH campaign in January this year, with five asks of the Minister, to ensure the level playing field that we have heard so much about and secure thousands of jobs in the UK ceramics industry. I thank my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) for taking up the baton and forming an all-party group for this industry.
The confederation’s first ask is on the EU emissions trading scheme. A tiered approach to the next phase of the EU ETS will not help this industry, as only a few energy-intensive industries will benefit at the expense of others. Indeed, the Department of Energy and Climate Change paper co-authored with other member states understates the effect of the tiered approach on the ceramics industry by using the floor and wall tiles sector as a proxy for the whole industry, which underplays how unfavourable a position the heavy clay subsector would be in should that be adopted. What discussions has the Minister had with her colleagues in DECC regarding that issue?
Secondly, the industry asks for action on the cumulative cost of compliance. There is a package of renewable compensation measures for electro-intensive industries, but—due to the design of the scheme—only a handful of confederation members will receive any compensation. In fact, as we have heard, only seven members are likely to be compensated in the United Kingdom—none of which are in Stoke-on-Trent North—compared with more than 100 in Germany and 140 in Italy. Will the Minister look again at the design of the scheme?
The third ask is to reduce carbon emissions through a long-term industrial policy. The British Ceramic Confederation is working with partners, including academics and the Knowledge Transfer Network, to share good practice and inform Government policy. I also hope that the catapult centre will take root in Stoke-on-Trent, as we need more of those centres outside the M25 corridor.
As we heard from the hon. Member for St Austell and Newquay (Steve Double), China’s dumping is already causing a problem with trade, but it is now applying for market economy status. My hon. Friend the Member for Stoke-on-Trent North spoke knowledgeably and passionately about the problems that that would cause. Although trade is an EU matter, the Government are influential. Surely the matter would be better decided through the World Trade Organisation. What is the Minister’s view on that? How will she ensure that any granting of MES with exemptions will not lead to problems similar to those already being faced by other industries—for example, the steel industry, for which my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) is a doughty campaigner?
I turn finally to housing. Joined-up working is needed to ensure that quality British products are used in the housing sector and that the opportunity is spread to all sections of it. How will the Minister engage with the industry to ensure that that is the case? Indeed, I hope that the people inside the houses will be turning over their pots to make sure that they are British-made; I hope that the Department for Business, Innovation and Skills will do so as well.
More than 20,000 people are employed in the ceramics industry, which pays £500 million a year in wages and national insurance. More than that, it is in the DNA of Stoke and the surrounding area. The Government must act now to protect this historic yet forward-thinking industry.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
It is a pleasure to serve under your chairmanship, Mr Hollobone. May I begin by congratulating the hon. Member for Stoke-on-Trent Central (Tristram Hunt) on securing this debate? I congratulate everyone who has taken part in it. A number of issues have been raised, and I will try in the time available to address all of them.
First, I would like to pay tribute to all those working in our ceramics industry. It is a very important part of the manufacturing base of our country and, as we have heard, a significant part of various products. More than just cups, plates and bowls are made in the ceramics industry and exported, and that is very important to us. The industry is not just about beautiful cups and saucers made over decades by outstanding British companies such as Royal Doulton and Spode; it is also about the funky ware—if I can put it in that way—being made by people such as Emma Bridgewater, who has been doing a sterling job in Stoke-on-Trent, and about tiles and bricks. There are also technical ceramics. The electronics, aerospace, automotive and healthcare industries all benefit from this wide and very important sector. Several high-profile firms have unfortunately closed, as the hon. Member for Stoke-on-Trent Central described, in giving us—as I would expect from him—a very eloquent history lesson. I need not repeat the fact that unfortunately, in north Staffordshire, the number of jobs fell from 52,790 in 1979 to 7,200 in 2008. That really does speak volumes about the decline of an industry, certainly in terms of the huge numbers of people affected.
As we have heard, there is a lot of good news. We have heard about investment in technology and factories and about distinguished names such as Waterford, Wedgwood, Royal Doulton, Wade and Steelite—that company is new to me, I have to confess; I hope that nobody holds that against me. I am very happy to go and see it, if it is in the constituency of my hon. Friend the Member for Stafford—
Anna Soubry
Wherever the company is, I am more than happy to go and see it, if I can. I would love to—[Interruption.] Stoke-on-Trent North is where it is; it sounds very interesting.
Jeremy Lefroy
Just very quickly, I point out to the Minister that she can see these products all over the world, because these companies have made huge inroads into the hospitality sectors around the world. If she cares to look in pretty much any tourist hotel anywhere in the world, she may find these products there.
Anna Soubry
As you might imagine, Mr Hollobone, I do not have time to go swanning off around the world; I am far too busy. I can barely get out of my office where, I can assure you, I do not have food on plates.
We will move on, because there are some seriously important issues to be discussed and debated—I am going to cut the next part of my speech, because I want to get to the real heart of this debate. As we have heard from a number of hon. Members, including my hon. Friend the Member for St Austell and Newquay (Steve Double), there is very serious and real concern about the high cost of energy. Like many industries that rely heavily on using a lot of energy, the cost of energy is of serious concern, as is carbon leakage, tiering and a number of other issues that look as though they are coming down the track, if I may put it that way.
On the positive side, it has to be said—if I may say this to Opposition Members— that the Chancellor of the Exchequer should be congratulated on announcing, in the November 2015 spending review, the exemption of energy-intensive industries from indirect costs of the renewables obligation and small-scale feed-in tariffs. We have made all those advances over in the EU, with compensation coming forward. In fact, we have now said that from 2017, EIIs will have an exemption from those particular obligations—those particular taxes.
Hon. Members then say, “Well, that’s all great, wonderful and brilliant, but unfortunately, it doesn’t affect the ceramics industry enough.” I absolutely hear that message and understand that that is deeply concerning for all those who work in the industry. However, we have something called the industrial 2050 road map—that is a very good example of Government using dreadful language. “What on earth is a road map in the ceramics industry?” I asked, and my brilliant officials, as ever, helped to tell me. I went to a conference yesterday in the Department for Business, Innovation and Skills, which was attended by the equally brilliant British Ceramics—I cannot remember the next part of its name. Somebody will tell me in a minute, but anyway, it is brilliant. It is basically the industry’s group, which gets together all the businesses involved in the ceramics industry and represents them extremely well. Its representatives have been to see me, and I am more than happy to see them on a regular basis.
Yesterday, by way of example, we had a conference in which we looked at what we are doing as a Government and how to improve, such as by achieving more compensation, perhaps, and by looking at how we get cheaper energy, because that is the real solution—ensuring that we have an abundance of cheap energy. However, it is also about ensuring that we do everything that we can to reduce the amount of energy that these industries use. The road map is basically a plan—it is a strategy—that looks at how we can reduce the burden of high energy prices through the reduction of usage and through better usage, and so on and so forth, for ceramics and others.
I attended that excellent event only for a short time, unfortunately, but that is the sort of work we are doing, because we certainly get that there is a problem, and I am absolutely determined to do all I can to be a champion for this excellent part of our manufacturing sector, to achieve a better deal and to ensure that we indeed achieve that level playing field. In that respect, I think the hon. Member for Stoke-on-Trent North and I absolutely agree, as I think the hon. Member for Makerfield (Yvonne Fovargue) does, that all this industry asks for is a level playing field—not subsidies or special treatment—and I agree with it.
Opposition Members and I are now going to have a falling out, because they make much of the market economy status and China. I do not intend to use a pun, but that is a complete and total red herring, because Russia has market economy status but it is not precluded from tariffs being imposed on it—and rightly so—by the European Union. Therefore, the idea that tariffs cannot be imposed on China if it were to receive MES is not true—it really is not the case.
Angela Smith
Surely the issue is that the tariffs will not be of a sufficiently high rate because of the market economy status that is enjoyed by those countries.
Anna Soubry
No, I do not know of any reason why not. Russia does not at all have a lower tariff because it has MES, so this is a red herring.
I think, however, that we can find some common ground on dumping. The critical point with dumping—there are many examples from the steel industry and two recent examples in ceramics, although when I say “recent”, I mean from the last five years or so—is getting the balance right. If the tariff is too high, it is not a question of the British Government being difficult; it is actually people in the industry who often do not support the tariffs being put on, and there will be other sectors of the British economy that are against tariffs—
Anna Soubry
I will in a moment—sorry, I am just on a bit of a roll and I want to make this point, because it is really important. What we do—certainly what I do—is look at each case on a case-by-case basis. For example, a particular type of steel was used by a particular part of our economy. The buyers—the users—of it said, “Please do not vote in favour of tariffs, because it will have a direct impact on British jobs”, so in that instance, we abstained. However, on two other issues of tariffs on steel, I did not hesitate to give the direction—telling the officials—to vote in favour of tariffs, but we look at it on an individual basis. I will quickly give way to my hon. Friend.
David Mowat
I am interested in the point about MES, because industry—whether it is aluminium, steel or ceramics—is telling us quite the opposite. I am interested to understand which of our sectors, in the Government’s view, benefit from giving China MES, because it is not these ones. Is industry really so wrong in what it is telling us, and BIS is right?
Anna Soubry
Let us get this point about market economy status absolutely clear. First, that will be decided by the European Union, and that will be with all the benefit of everybody being involved. When I went over to Brussels about two or three weeks ago, I was told that this is absolutely the hot topic for the EU. It looks as though—as we might imagine with the EU—there will be some sort of fudge or middle way, but it will be for the EU to decide and it will be the hot topic. My point, however, is that if China were to get market economy status, that does not preclude it from being subject to tariffs, because Russia has market economy status and it can have tariffs put on it. There is no debate about that: Russia can have tariffs put on it. I have had this argument with the steel industry, but that is a fact. Tariffs can be put on a country even if it has market economy status. Whether China should have market economy status and the arguments for and against whether it should are a different matter, but do not conflate tariffs and MES.
What time do I have to finish, Mr Hollobone?
Mr Philip Hollobone (in the Chair)
I am going to be very generous to the Minister, because I feel that she has engaged the House and Members are intervening. My blind eye is turned towards the clock, so the Minister has a few more minutes left.
Anna Soubry
Right, so I am basically running out of time. That is very sweet of you, Mr Hollobone; I am very grateful.
Anna Soubry
The hon. Gentleman will have to be quick, or I will be in trouble. Go on.
Paul Farrelly
May I briefly suggest—and thank you, Mr Hollobone—one more subject for the Minister’s road map? For many years, we have pursued the issue of mandatory origin marking, in part to combat counterfeiting from China, as well as on product safety grounds, but the Department has always resisted it, because it feels that it is protectionist. Will the Minister look afresh at that and tell us, perhaps in writing, where this issue stands in the Department and, at the moment, in discussions in Brussels?
Anna Soubry
I was about to come on to that issue, so that is good timing. We did a study on mandatory country-of-origin marking, which was published on 2 March 2015. I have to tell the hon. Gentleman that the majority of companies that took part did not believe that compulsory origin marking would enhance product safety or tackle counterfeiting. However, I do not doubt that more work can be done, because there is marking that is misleading. There are all sorts of things that I will not go into now, Mr Hollobone, because that really would have me here all night, but I am not happy about the markings on lots of products that make out that they are British when actually they are largely made somewhere else. More work can be done on that, and I am very happy to do it.
We are looking at catapult status for the Materials Processing Institute. I am in all sorts of discussions with other hon. Members, notably from Redcar and the north-east, and that will continue. It is something that we are revisiting and looking at, and we will judge it on its merits.
Hon. Members asked about the European Union. It is undoubtedly the case that we are stronger, safer and considerably better off by remaining within the EU. We are making huge strides by ensuring that on dumping, for example, the EU is acting much more quickly and also reducing regulation, and ensuring that it, too, is getting the message on energy. I will finish on this very strong line, if I may. When I went over specifically for the energy intensive industries competitiveness meeting two or three weeks ago, the various sectors did not hold back in making it absolutely clear that we have to have sensible energy prices. We must not overly burden people with taxes. We must create a level—
Angela Smith
Mr Hollobone is being very generous, and so is the Minister. On energy prices, I completely agree with her that we are better off in the EU and we need to keep working with the EU on those prices, but surely the unilateral imposition of the carbon floor price is doing as much damage as anything that the EU has introduced in terms of energy taxation, and surely the Minister ought to be lobbying the Exchequer to do something about that.
Anna Soubry
As you might imagine, Mr Hollobone, I do not just lobby the Exchequer. I also—and actually it is a genuine pleasure—work with my right hon. Friend the Secretary of State for Energy and Climate Change and other Government colleagues, because we absolutely get that there is a problem. As I keep saying and as is absolutely the case, all the industry asks for is a level playing field, and that is what I will seek to achieve, as their ministerial representative, to ensure that we do the right thing. On that hopefully more positive and happy note, thank you for your generosity, Mr Hollobone, and if I have not answered all hon. Members’ questions, I will write to them.
Tristram Hunt
This has been an excellent debate. I thank my hon. Friends the Members for Stoke-on-Trent North, for Newcastle-under-Lyme and for Penistone and Stocksbridge (Angela Smith), all the Front Benchers and the hon. Members for Stafford and for St Austell and Newquay (Steve Double).
I thank the Minister for her summing-up. She should be in no doubt that we will return time and again, with the British Ceramic Confederation, to energy pricing. As she says, we want a level playing field and we want effective compensation for these highly energy-intensive sectors, particularly the heavy clay producers. The Minister would also do well, when she talks to her colleagues in the Department of Energy and Climate Change, to think about gas storage. We face a great deal of tightness on gas usage; we are very vulnerable in terms of gas storage capacity in the UK. That is a real worry for energy intensive sectors.
I hope that the Minister will continue to support the tariffs on dumping for the ceramics sector. Yes, she should always listen to the CBI and the British Retail Consortium, but if we want to keep our manufacturing industry going, we should also listen to its voices, because these are good, well paid, long-term jobs that have a trickle-down in terms of the broader ecology of the British economy and need support.
I urge the Minister to stay on top of the country-of-origin issue, which is very important for the ceramics sector. Locally, we certainly make our displeasure known when businesses are making a product abroad, decorating it in north Staffordshire and suggesting that it was made in England. It has to be fired properly in England. I also hope that we will have a good result on the materials Catapult centre.
I thank the Minister for listening. Clearly, the major issue to come out of this is the great 12th century/16th century debate on the precise level of ceramic production in north Staffordshire. Of course, though, on the Isle of Thanet, ceramics dating back 2,000 years have been found, so we might be blown out of the water in north Staffordshire by Medway.
Question put and agreed to.
Resolved,
That this House has considered Government support for the ceramics industry.