Energy Prices: Energy-intensive Industries

Gareth Snell Excerpts

Thursday 1st May 2025 Commons Chamber

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

To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on the Government’s approach to reducing energy prices for energy-intensive industries.

[The Minister of State, Department for Energy Security and Net Zero (Sarah Jones)]

I relay my thoughts to the workers in my hon. Friend’s constituency, for whom I know this is a worrying time. I thank my hon. Friend for raising the issue. He is a tireless champion for workers and businesses in his constituency. We have spoken and will continue to speak regularly about these issues and the importance of the ceramics industry in his area in particular.

This Government recognise the challenges high energy prices pose to UK businesses. We know that the ceramics sector is particularly affected; my hon. Friend has raised the issue in Parliament on other occasions. The Government are working closely with Ceramics UK and local Stoke MPs to work out how we can support the sector.

For energy-intensive industries overall, our clean power 2030 target is the key to long-term sustainable price reductions. Clean home-grown energy is the best way to protect bill payers and boost Britain’s energy independence. We are already bringing energy costs for UK industries closer into line with other major economies through the British industry supercharger. That will fully exempt eligible firms, including some but by no means all of those in the ceramics sector, from certain costs linked to renewable energy policies, particularly those exposed to the high cost of electricity.

Using more electricity and less fossil fuel is the future for UK businesses. The latest advice from the Climate Change Committee expects electricity to meet 61% of industrial energy demand by 2040, so we are developing options to enable businesses to do that.

We are already taking action. When my hon. Friend raised this important issue in a Westminster Hall debate in March, I noted:

“We are working on how to remove undeveloped, speculative programmes from the grid connection queue and prioritise others.”—[Official Report, 4 March 2025; Vol. 763, c. 109WH.]

Just last month, we announced pro-growth reforms to help unlock £40 million of mainly private investment a year in clean energy and infrastructure, so that so-called “zombie projects” will no longer hold up the queue for connection to the electricity grid.

We recognise that we need to support a range of energy-intensive industries, including industries such as ceramics, that are essential to our UK economy and our missions, for example to build the 1.5 million homes and the clean energy infrastructure products in which this Government are already investing. Following years of economic chaos and instability under the previous Administration, this Government are implementing a modern industrial strategy that will drive growth and the creation of good high-quality jobs in communities across the UK.

I look forward to continuing to work with my hon. Friend and other hon. Members from across the House. We are meeting next Wednesday and I hope to be able to progress things further at that stage.

--- Later in debate ---

[Gareth Snell]

I thank the Minister for her engagement on this issue, because she has genuinely and authentically tried to look for a way forward. When my hon. Friends the Members for Stoke-on-Trent North (David Williams) and for Stoke-on-Trent South (Dr Gardner) and I had a meeting with the Minister six weeks ago, we warned her that other factories were going to fail, and we stand here following the closure of Moorcroft yesterday. She will be aware that other factories in Stoke-on-Trent are working on short time as a way of reducing costs so that they can put more money into meeting their ever-increasing energy bills.

I thank the Minister for the outline she has given, but she will know that we have previously talked about most of the things she has raised today, and they do not apply to the ceramics sector or to great swathes of the energy-industrial sector as a whole. The supercharger scheme does not work for the ceramics sector; indeed, ceramics companies end up having to subsidise other energy-intensive industries, because they are not part of the supercharger scheme. We have been told that we cannot see an exception to that. We have asked about the emissions trading scheme and free trade allowances and have been told that some are available for ceramics, but that does not go far enough to meet the demands we have today.

We have been constantly promised jam tomorrow, by the last Government as well as this one—well, jam is no good if you are dead, and the ceramics sector in Stoke-on-Trent is on life support. We are at a point where good manufacturing jobs done by proud people are falling away every month. This is not new: it started in 2019, with the closure of Dudson, and continued with the closure of Wade in 2022, Johnson Tiles in 2023 and Royal Stafford and now Moorcroft in 2025. The energy-intensive industries in this country are pivotal to manufacturing. If we see them fall away, manufacturing in this country will fall away.

I ask the Minister three very simple questions. Will she look at a wholesale change to the way in which we do subsidies and energy prices for energy-intensive industry in the short term, before GB Energy comes online? As well meaning as GB Energy is, it is too far away to help. Will she rule out specifically moving any policy costs on to gas costs? Gas is the big cost for the ceramics sector; electricity is a small proportion of what we do. Will she take the opportunity to make a clear commitment at the Dispatch Box, as the Secretary of State for Business and Trade just did when he talked about a sector falling on its knees? Ceramics is there. We do not need the same level of investment that steel does; we need a tiny fraction of it. Can we have it, and can we have it soon? If we have to come back here in six weeks, there will be no sector left to defend.

[Sarah Jones]

I agree with my hon. Friend and recognise the challenge. We lost 1,250 jobs in the ceramics sector between 2015 and 2023. It has been a very sad decline, and we want to turn that around.

The whole point of an industrial strategy is to have a Government who are proactive in supporting our industries. We will not put extra cost on the ceramics industry; we are looking to see how we can help and support. My hon. Friend has my word on that. We are working on every single one of the suggested policy reforms in the package that Ceramics UK has put forward, and we will meet him next week to talk about these things.

I cannot make promises at the Dispatch Box on areas that are not my responsibility and rule out whole swathes of policy, but I assure my hon. Friend that we will not put extra costs on the ceramics industry. We are looking to do more and to support, and we will come back. I completely understand his point about the timing and the need to act quickly.