Ceramics Industry Debate
Full Debate: Read Full DebateGavin Williamson
Main Page: Gavin Williamson (Conservative - Stone, Great Wyrley and Penkridge)Department Debates - View all Gavin Williamson's debates with the Department for Business and Trade
(1 month ago)
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It is a pleasure to serve under your chairmanship, Dr Murrison. I congratulate my constituency neighbour, the hon. Member for Lichfield (Dave Robertson), on securing this debate. As one of probably a few Members of Parliament who have worked in the ceramics industry, this is not just about jobs for me; it is about who we are, identity and what it means to make something tangible and real that can make a difference to our economy. It contributes £2 billion to our economy, including £600 million worth of exports from a country that, sadly, exports too little.
The situation we are in is a tragedy. Ceramics is not just cups and saucers, plates and bowls; it is the tiles on our homes and the bricks. I have some amazing ceramics businesses in my constituency, whether that is Dunoon, Lucideon, AMRICC and, of course, Ibstock, which makes the iconic Staffordshire blue brick. It is crazy that we are in a situation where bricks are being imported into this country from India, Turkey and the Netherlands, and British manufacturers employing British people and providing British exports are being priced out of the market.
The core issue here is energy costs—energy costs first, second and third. It would be disingenuous of me not to thank the Government for the action that they have taken to support the ceramics sector, but we will continue to see a decline in ceramics unless we address that core issue of energy. The Government have taken important steps to address it. The supercharger is important, but the reality is that only 10% of ceramics businesses are able to apply for that, for the simple reason that gas is not included, or not in the way that they are able to access it.
Some 86% of the energy costs for ceramics manufacturers come from not electricity but gas. That is not through choice; it is necessary in order to make the product. They are not sat there thinking, “I don’t want to do the transition to electricity;” they cannot make that transition and, as the hon. Member for Lichfield rightly pointed out, hydrogen will not be able to come to the rescue and save those jobs.
I am conscious that many people want to contribute, so I come to my ask of the Minister. I know that he is incredibly knowledgeable and passionate about this sector. I urge him to look at setting out a timetable for a review of extending the supercharger so that it can cover gas costs. If he is unable to do that and we are unable to get the support required, more British businesses will sadly go under; more British manufacturing businesses will no longer be manufacturing or exporting, and firms from across the sea will step into that gap. That is not something that anyone wants to see, whether in Staffordshire or across the United Kingdom.
Chris McDonald
My hon. Friend put it exactly right. We need to take both capital and operating costs into account. Fundamentally, the issue comes down to a belief or view—or, in my case, looking at the economic evidence and corporate finance. Is it possible to decarbonise and reindustrialise? Yes, of course it is, and that is precisely what the Government want to do. No one in the industry is asking us to tear up climate policy—they are using the policy to invest, and have invested £100 billion since the general election on that basis.
Many people mentioned the supercharger scheme, which currently supports around 10% of the ceramics industry. Quite obviously, 10% is not 100%, but the recent uplift in the scheme to 90% compensation has benefited members. The British industrial competitiveness scheme will offer further support on advanced and technical ceramics from 2027, backdated to the current year. That will reduce electricity bills by up to £40 per megawatt hour.
Chris McDonald
I will continue, but I will address a point that the right hon. Gentleman raised. He focused on the parts of the sector that are unable to electrify, which I am also very concerned about. Larger brick kilns and some sanitaryware items, which my hon. Friend the Member for Lichfield spoke about in relation to his constituency, are difficult to electrify. The main decarbonisation options on the table are hydrogen, or biogas —that was not mentioned today but it could be a solution—but it is important that businesses remain competitive and able to raise capital until such a time as those occur.
I reassure the right hon. Member for Stone, Great Wyrley and Penkridge that I am focused on that issue. I am not pretending that processes that cannot be electrified can be, but the policy is to electrify first, where that can happen. However, I realise that I need to work with the brick sector and others. I am also concerned about capacity utilisation in the brick sector currently, which was mentioned by other hon. Members, because that situation, of course, makes everything much more difficult.
Many people talked about international trade. I presume that all hon. Members in the room are in favour of free trade on a level playing field basis; unfair trade was what was particularly referred to. That can be an issue of energy—overseas companies having access to energy from sources that we would not use in the UK, such as Russian gas—or, as we have heard about, some have inappropriate labour practices. When the Government decide to enter into a free trade scheme and liberalise tariffs we are always cognisant of the overall economic benefit to the country but, ultimately, we want free trade.
The shadow Minister, the hon. Member for West Worcestershire, asked about interaction with the Trade Remedies Authority, which is our means of correcting that. I am incredibly keen to continue to encourage the sector to engage with the Trade Remedies Authority. If there are any difficulties with that, I want to know about it.