North Staffordshire Ceramics Industry: Energy Costs

Debate between David Williams and Gareth Snell

Tuesday 4th March 2025 Westminster Hall

[David Williams]

I thank the right hon. Member for those comments. I know that she has spoken passionately about this matter in the past, and I will come on to the point about the need to support companies with their energy bills.

I was talking about how ceramics have an impact on our everyday life. Without refractories, we would not have the ability to make steel, glass and other high-temperature products. Without ceramics, we would have no cars, no buses and no mobile phones—what a scary idea. Without advanced ceramics, we would have no aircraft, defence or medical equipment.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

I thank my hon. Friend and constituency neighbour for giving way. Like me, he will have heard that advanced ceramics carbon filters are going into submarines being built not just for the UK, but for the Australian navy. With the commitment that this Government have rightly made to huge increases in defence spending, perhaps he will allow me to join him in suggesting to the Minister that one way we could help the entire ceramics sector is by redirecting some of that commitment to defence spending to ensure that those ceramic component producers get the help and support they need right now.

[David Williams]

I thank my hon. Friend and constituency neighbour for that intervention. I could not agree more; I am certain that the Minister will have heard those comments and I wholeheartedly support them.

Of course, we would be eating and drinking from wooden bowls and cups without the beautiful tableware that we enjoy—including, as I have said, many of the plates, cups and saucers we see here across the Westminster estate. The world as we know it simply would not exist without ceramics. I urge the Government to recognise that the UK ceramics industry is a critical enabler of the UK economy—used, as we have said, from building homes to high technology to steel making.

However, I repeatedly hear concerns from companies regarding their sustainability following dramatic increases in their energy bills. For energy-intensive industries such as ceramics, energy cost pressures are significant. In fact, I have heard from companies in my Stoke-on-Trent North constituency that their energy bills have trebled. One company told me that it has seen energy bills increase by 300% in 10 years. The sector was hit hard by the energy crisis, and inaction left us too dependent on tyrants such as Vladimir Putin. That has had a huge impact on both production and raw material costs, and support is urgently needed to protect these businesses. Sadly, some employers across our city are already making redundancies due to escalating costs, and that disturbing trend will only be exacerbated by inaction.

It takes a vast amount of heat to produce the kind of ceramics products we make. According to Ceramics UK, the UK ceramics industry uses about 650,000 MWh of electricity and about 4.5 million MWh of gas every single year. With gas currently costing about £47 per megawatt-hour and electricity in the region of £297 per megawatt-hour, the costs quickly add up. When we consider that gas used to cost about £11 per megawatt-hour, the impact on those businesses is clear to see.

Of course, a significant portion of those costs comes from non-commodity taxes and levies. Many ceramics companies pay high carbon taxes under the UK emissions trading scheme and ever-tighter restrictions on free allowances are pushing up costs even more. Because the industry is gas intensive, while still using a lot of electricity, very few manufacturers receive the energy-intensive industries exemption.

I am really proud that this Government take the climate crisis so seriously. A move towards green energy is desirable; if we can get to that point, wonderful. However, the reality at the moment is that companies face significant bills. That is a fixed cost that the companies cannot do anything about, and moving towards low carbon is not always straightforward. It is absolutely right, as I said, to push towards a clean energy transition, but energy-intensive industries need a higher level of support in switching to low-carbon methods. The technology to switch from gas to electricity firing is not readily available for many ceramics manufacturers, and connections to the grid are poor.

Some European countries are already taking action and have been for some years to support their ceramics sector. The European Commission recently unveiled its affordable energy action plan, which includes investing in liquefied natural gas projects to help companies to lower their costs. A number of other countries are also helping their energy-intensive industries. It is vital that the UK follows suit.

The history of our city is one of hard-working people. The ceramics industry is in our DNA. If we fail to act now, we risk losing not only the unique skills that, as we talked about before, have been honed in the Potteries for hundreds of years, but the communities formed around them. I have questions for the Minister, but I start by thanking her for agreeing to meet me, my parliamentary colleagues, Ceramics UK and the GMB union to discuss the technical details around the support the sector needs.

As a starter, however, following my discussions with Ceramics UK, the sector would like the Minister to consider the merits of offering subsidies for smaller manufacturers’ energy costs. Indeed, Ceramics UK has told me that the cost pressures can be up to six times greater than they were in 2021. For the manufacturers that can use electricity, eligibility for the Government’s energy-intensive industries exemption scheme could be opened up for all UK ceramics manufacturers, including by removing the UK business level test. The Government could also mandate priority grid connections.

For ceramics manufacturers unable to switch from gas, could the Minister consider exempting the sector from new taxes and levies on gas, in recognition of the limited alternatives currently available? Ceramics really is the hardest of all energy-intensive industries to decarbonise. Although Great British Energy will reduce energy bills in the long term, failing to reduce energy costs for the sector now could put our ceramics industry at further risk, and that is simply not acceptable.

With carbon taxes hammering the sector, I also ask the Minister to consider the merits of introducing a temporary exemption from the UK emissions trading scheme for UK ceramic manufacturers until an effective carbon border adjustment mechanism is up and running and ceramics manufacturers can apply for CBAM phase 2.

Something that might also be of great help to our wonderful small and medium-sized enterprises in the sector would be the provision of ultra-low interest loans to help to finance more energy-efficient kilns, dryers and related equipment. Hydrogen presents an opportunity for the sector to decarbonise: Ceramics UK recently unveiled a custom-built pilot kiln that runs on hydrogen. Will the Minister evaluate the hydrogen supply chain and market currently available to the ceramics industry, and how that can be better distributed? I also ask the Minister that, as we discuss the support the sector needs, the Department for Business and Trade work collaboratively with colleagues in the Department for Energy Security and Net Zero, among others, to find a solution on a cross-departmental footing.

Without a desire to move away from the topic of energy costs, it would be remiss of me not to point out one further concern that the sector often raises with me and my colleagues. Counterfeit back-stamping of tableware products from the likes of China is affecting our UK businesses. Although I appreciate the Government’s efforts to regulate against those products through anti-dumping regulations and anti-dumping duty, I am concerned that many of those products slip through the net. The fake products get listed on internet sites, so I ask for a cross-departmental approach to review tabling offences and the classifications for importing counterfeit tableware products.

I thank the Minister for coming to answer my questions, and I invite her to visit my constituency of Stoke-on-Trent North so that she can see just how brilliant our potbanks are and how important they are to our local economy and people. We must keep those pots open and those kilns fired. The time to act is now.

Town Centres: Stoke-on-Trent

Debate between David Williams and Gareth Snell

Wednesday 15th January 2025 Westminster Hall

[Gareth Snell]

The hon. Gentleman, as always, is absolutely right. He has hit the nail on the head. Whether it is Strangford or Stoke-on-Trent, the town centres and small and medium-sized enterprises, whether they are a service, a community organisation or retail, are sometimes the places that people have most affinity with because they have a personal relationship with the owner. In Stoke-on-Trent we find that the microbusinesses that can be run from someone’s garage or back bedroom thrive.

The big stores tend to be able to weather the economic climate that we find ourselves in, but for mid-sized shops the high street is probably just outside of financial reach because of business rates and because the footfall is not there. The high street is struggling because of the decisions of the last Government. Regardless of fault, things need to be addressed by the present Government. I have absolute confidence that the Minister and his team at the Department will do that.

I want to focus mostly on Hanley city centre, but I also want to pay tribute, as did my hon. Friend the Member for Stoke-on-Trent South, to the amazing work in Longton. I will not repeat what she has already adequately and wonderfully put on the record, but I want to briefly talk about Fenton and Stoke. Fenton is a town that Arnold Bennett did not really forget. He took it out of the books because he did not like his mother-in-law, but that is an entirely different debate.

The work being done around Fenton town hall to turn the area into a vibrant community hub is fabulous; I am thinking of Ben Husdan and the community interest company that he works with, and Restoke, which runs the town hall, and the Step Up Stoke charities. I hold my surgeries in the café there and when I have time off I go there to enjoy the city that I live in and call home. The events run there draw people in from all over the west midlands; they have demonstrated that, with determination and a little bit of community spirit, something wonderful can be achieved. A model has been put together that could be used in other parts of Stoke-on-Trent.

I also want to pay tribute to the work being done by Jeff Nash and his team at the Spode site in Stoke. A hub is emerging there with support from levelling-up funds. To give credit to the last Government, they put some money in, as did the city council. The site demonstrates that the heritage buildings in my constituency, which are sometimes considered to be part of our past, can actually be part of our future. And that demonstrates that with a bit of imagination and a bit of support, which I know the Government are committed to, we can deliver real regeneration, new homes and good quality jobs for the new future for the city that I think is there.

I turn to Hanley—possibly the most challenging town centre of the six towns that make up Stoke-on-Trent. The Minister is aware of that because he kindly met me, along with Councillor Jane Ashworth, leader of Stoke-on-Trent council, chief exec Jon Rouse, and Rachel Laver, the wonderful chief executive of the Chambers of Commerce. For many years Hanley has been a challenge. It has been seen as, “If we fix Hanley, we fix everything else”, and there is an argument that that is correct. But the solutions have always dwarfed the scale of the challenge.

Like Hull, Mr Turner, Stoke-on-Trent deserved more from the last Government. We were given levelling-up funds, but the last Conservative council decided that the best thing they could do with the support offered was to build a car park. An economically deprived city’s working age people in in-work poverty were told that their lives were going to be levelled up with the building of a multi-storey, colourful car park on the edge of the city centre—and “That’s your lot!” That car park, ironically, is now costing the council money because it was so poorly planned and executed that the revenue it should have generated is not there. It is now a loss for the council, which is a demonstration of the legacy of the last Government.

On top of that, the last Conservative council made grand aspirational plans for arenas and shopping centres. On paper, they looked wonderful—what the artist’s impression showed would be wanted in every town centre. But there was no plan, no money and no intention. That is something that the council learned from the last Conservative Government when it comes to economic regeneration across this country.

We look to the Government not to solve our problems for us—I want to be clear to the Minister that I am not here with a begging bowl to ask for handouts; I firmly believe that the future of our city has to be driven by our city—but for them to join us in a new partnership by putting the governmental shoulder behind our municipal wheel. If we are able to forge a new partnership for the city centre, we will meet the housing demand. We can more than meet the demands placed on us by Government, and then some, if we have the land consolidation powers that Homes England executes, and if we had a self-replenishing fund for the pump-priming work, and could look at remediation of brownfield sites.

We have the building blocks in the city centre. The work done by Richard Buxton, Jonathan Bellamy and Rachel Laver, through the city centre’s business improvement district, is phenomenal. They almost always have a bright idea about something we could do in Stoke-on-Trent to bring people into the city, whether that is food markets or their work on supplementing the municipal support they should have had from a council suffering budget cuts. That is the wardens, street cleaning and street scene work.

We have good policing led by Sergeant Chris Gifford, doing their best to ensure that the city centre feels safe. That is also a challenge because of the reduction in drug and alcohol support services that the previous Government thrust upon us, meaning that people who need help cannot get it, so they gravitate to our town centre, causing a social problem.

[David Williams (Stoke-on-Trent North) (Lab)]

I thank my hon. Friend for this important debate. He notes that crime and antisocial behaviour is an issue that can put off people coming to our town centres. I hear the point about how we use levelling-up funds or certain types of funds to make our town centres better. A key to that is how we engage with local community leaders and retailers to ensure we get the plans right. We got £20 million, including £6.5 million to make improvements to Burslem, Tunstall and Middleport, and we are looking at how we—