Ceramics Industry

Debate between Angela Smith and Steve Double

Tuesday 8th March 2016 Westminster Hall

[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.