Cost of Energy: Ceramics Sector
Debate between Nusrat Ghani and Jack Brereton(1 year, 11 months ago)
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The Minister for Industry and Investment Security (Ms Nusrat Ghani)
I congratulate my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) on securing the debate. As usual, he made a sensible and well-rounded speech. He is always lobbying the Department very hard, and he continues to be a champion for UK ceramics manufacturers. I am grateful to him for describing the impacts on the sector so clearly, and I can confirm that we in the Government are indeed steadfast in our support for it. Following Putin’s barbaric invasion of Ukraine, we committed billions of pounds to help households and businesses keep the lights on this winter, and I can reassure Members that we want to keep the kilns firing as well.
The Government recognise the significant contribution that energy-intensive industries make to this country. We know how valuable they are to local economies and communities, providing about 375,000 jobs directly, and millions more in the industries that they support through supply chains. That is particularly true of Stoke-on-Trent North, the birthplace of Wedgwood, some of whose china now sits proudly in my hon. Friend’s former Department, and whose strong connection with the ceramics sector continues to this day.
My right hon. Friend the Prime Minister has set out our objective, which is to grow the economy with better-paid jobs and improved opportunities throughout the country. If we are to meet that objective, energy-intensive industries such as ceramics, glass and steel will be crucial. As we continue our transition to net zero, about which my hon. Friend spoke so passionately, they will also be crucial to the manufacture of everything from electric cars to wind turbines, and we will do all we can to support them. In my role as Minister for Industry, I have engaged with business and trade associations, and have witnessed at first hand their drive and passion to work with the Government to find a sustainable solution to those challenges that works for us all.
We can all agree that the last few years have been exceptionally difficult for everyone, and energy-intensive industries were no exception. Looking forward, however, I am confident that we can deliver a better future, unlocking the opportunities that net zero offers to build resilient industries bringing growth and jobs to communities across the country and providing security, opportunity and prosperity in the years to come. We have already made enormous progress: between 1990 and 2019 we grew our economy by 76% and cut our emissions by 44%, decarbonising faster than any other G7 country.
However, there is a long way still to go, and given our present economic conditions it is more important than ever to accelerate the move away from fossil fuels and towards clean, affordable energy. We are clear about the fact that we must do all we can to ensure that we drive the green transition in a way that is resolutely pro-business and pro-growth, ensuring that no one is left behind on our journey to a low-carbon future, and as we do so we will consider carefully the recommendations of the Skidmore review, published last week.
My hon. Friend talked about low-carbon hydrogen and carbon capture. We know that there is a huge amount of potential in those transformative forms of energy, which will support the UK on its journey to energy independence and offer vital British industries such as the ceramics sector an opportunity to make the transition away from expensive oil and gas. These are technologies in which we are at the cutting edge globally, and we have set our ambitions high. We are aiming for up to 10 GW of low-carbon hydrogen production capacity by 2030, including four carbon capture, utilisation and storage clusters, and we are delighted that industry is doing the same. We support the British Ceramic Confederation’s ambition to use hydrogen technology, and we would be happy to discuss its plans further.
In recognition of the increased pressure facing all businesses, the Government took bold action. In October 2022 we announced the introduction of the energy bills relief scheme for Great Britain and Northern Ireland, which provides a price reduction to ensure that all eligible businesses and other non-domestic customers are protected from excessively high energy bills over the winter. The relevant price reduction for each business is being automatically applied to its bills by its supplier on the basis of eligibility, but I will come to the case that my hon. Friend mentioned.
As soon as that scheme was under way, we started a review of it to help to inform our next steps when it comes to an end on 31 March 2023. Last week we announced the successor to the energy bill relief scheme, which will be called—they love their titles—the energy bills discount scheme. As with the current scheme, the new one will be aimed at everyone on a non-domestic contract, including businesses, voluntary sector organisations and public sector organisations such as schools, hospitals and care homes. This will provide a discount on gas and electricity unit prices for energy bills during the 12-month period from April 2023 to March 2024, subject to a maximum discount. The relative discount will be applied if wholesale prices are above a certain price threshold.
Also as with the current scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers. Recognising that some non-domestic energy users in Great Britain and Northern Ireland are particularly vulnerable to high energy prices due to their energy intensive and trade exposure, these sectors will receive a higher level of support, subject to a maximum discount. The ceramics sector forms part of this group. These businesses, which we refer to as energy and trade-intensive industries, will however need to apply for the higher level of support, and we will work with the sectors, including ceramics, over the coming weeks and months as we finalise the details of this part of the scheme. I spoke to my hon. Friend the Member for Stoke-on-Trent North earlier today to confirm that he will be invited to those meetings.
Additionally, the Government are determined to secure a competitive future for our energy-intensive industries for the long term. In recent years, we have provided extensive support, including more than £2 billion to help with the cost of electricity and to protect jobs. This support includes electricity price relief schemes for eligible energy-intensive industries such as chemicals, cement, ceramics, paper, glass and steel. One of the specific EII schemes is the exemption scheme, which provides relief for a share of the indirect costs arising from the renewable levies. Eligible businesses receive a discount on their electricity bills and the UK ceramics sector received around £17 million from this scheme between 2016 and 2021. I know that my hon. Friend will want more, and we will obviously keep an eye on this.
In addition, there are several other funds in place to support businesses with high energy use to increase efficiencies and reduce emissions, including the £315 million industrial energy transformation fund, which will help to enable the sector to go green. As my hon. Friend will be aware, the ceramics sector recently secured £18.3 million for the Midlands Industrial Ceramics Group from the Government’s Strength in Places fund to help establish a global centre for advanced technical ceramics. This will ultimately lead to the creation of 4,200 jobs by 2030.
Jack Brereton
The Minister mentioned the fund that is available for energy-intensive sectors. Given that 97% of the sector is small and medium-sized enterprises, they are often excluded from the funds while the larger energy-intensive industries get them. Can we not have some dedicated funding for the ceramics sector, given that it is mainly made up of SMEs and has previously been excluded from bidding for a lot of this funding?
Oral Answers to Questions
Debate between Nusrat Ghani and Jack Brereton(6 years, 1 month ago)
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Jack Brereton (Stoke-on-Trent South) (Con)
Ms Ghani
Absolutely. The Bus Services Act 2017 introduced a number of new tools to help local authorities to improve local bus services, including through partnership working and franchising. Stoke-on-Trent City Council has not yet engaged with my Department about using the new powers available, but we are working together to develop its proposals for the transforming cities fund. I was delighted that the council successfully applied for a share of the £1.7 billion fund.
Oral Answers to Questions
Debate between Nusrat Ghani and Jack Brereton(6 years, 9 months ago)
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Jack Brereton (Stoke-on-Trent South) (Con)
The Parliamentary Under-Secretary of State for Transport (Ms Nusrat Ghani)
I know that my hon. Friend is concerned about the impact of traffic in his constituency; indeed, we discussed it when he came to the Department just last week. HS2 Ltd is already working with Highways England and local highways authorities to mitigate the effects of construction traffic, and will continue to do so as the High Speed Rail (West Midlands - Crewe) Bill progresses. The planning regime established under the Bill includes powers for local planning authorities to approve final construction routes for large goods vehicles. We will work closely with local authorities to make sure that impacts on local communities and traffic are appropriate.
Jack Brereton
Will the Minister update the House on the measures that will be put in place to tackle and mitigate the impact of traffic, and particularly its effect on junction 15 of the M6, resulting from the construction of phase 2a?
Ms Ghani
Indeed, we recognise the need to keep traffic moving on local roads during construction, primarily for the benefit of residents and businesses. Under current plans, junction 15 of the M6 is an important access route for HS2 construction traffic. We recognise that it also provides an important access route to the Stoke-on-Trent area. HS2 Ltd is working closely with Highways England to minimise the impact on the M6 and consider any opportunities for co-ordinated delivery with a smart motorway.
The Parliamentary Under-Secretary of State for Transport (Ms Nusrat Ghani)
Bus services, what journeys they take and how frequently they are run, are down to the local authority. I therefore urge the hon. Gentleman to discuss this matter with his local authority, which can take it forward with local bus service providers.
Jack Brereton (Stoke-on-Trent South) (Con)