Ceramic and Brick Industries

Debate between Robert Flello and Wendy Morton

Wednesday 15th June 2016 Westminster Hall

[Wendy Morton (Aldridge-Brownhills) (Con)]

I beg to move,

That this House has considered the ceramic and brick industries.

It is a great pleasure to serve under your chairmanship today, Mr Chope, and to see Members from both sides of the Chamber here in Westminster Hall. As vice-chairman of the all-party group on ceramics, and because the brick industry is in my constituency, I felt that it was important to raise this issue with the Minister.

The ceramics industry employs around 20,000 people in the UK, generating £2 billion in sales and exporting products all over the world. It is undoubtedly an industry of huge importance to our country.

In my constituency of Aldridge-Brownhills, there has been a large ceramics presence in the area since the early 19th century, when clay and coal mining boomed in the district. The availability of jobs in mining resulted in a population surge in Aldridge, to 2,478 by 1901, and by 1906 two of the mines—known locally as Drybread, which is near Coppice Road, and Bare Bones, at Leighswood—employed nearly 1,500 people between them. There is also the Brownhills Miner. If anyone is travelling through Brownhills or is on the A5, please make a detour to see Jigger, a 40-foot statue standing at the end of Brownhills High Street. It is a wonderful reflection of a proud industrial heritage.

Aldridge-Brownhills is now home to four companies working in the ceramics industry, which directly employ around 300 people across five sites. Some of the most famous clay products in the world originate in Aldridge, from the beautifully hand-crafted Imperial Bathrooms products, which are exported all over the world, to the bricks made at the Ibstock and Wienerberger sites, which are used to build new housing stock in the UK. Recently, some of the clay for the stunning art installation by Paul Cummins called “Blood Swept Lands and Seas of Red”—the poppies, as many will know, that were installed at the Tower of London—came from the Potclays quarry in Brownhills.

[Robert Flello (Stoke-on-Trent South) (Lab)]

I congratulate the hon. Lady on securing this debate. May I ask her to say a word not only for the fantastic ceramics industry itself—I am truly blessed in Stoke-on-Trent South with some wonderful businesses that are directly involved in ceramics—but all the ancillary businesses, which do related work such as designing or maintaining kilns?

[Wendy Morton]

Absolutely. The hon. Gentleman makes a very valuable point. In any discussion about business, it is always worth reminding ourselves that it is not only the one business that matters but all the other businesses that feed into it, be it businesses that work with kilns, businesses that provide paint brushes or businesses that do a whole host of other things. Also, there are all the other businesses, which are often family businesses, around the area, which perhaps provide sandwiches or other things for the people working in all these companies.

However, the ceramics industry is approaching a worrying period of uncertainty. The European Commission published its legislative proposals for the emissions trading system phase 4 in July 2015. These proposals cover the period from 2021 to 2030 and propose a target of achieving at least a 40% reduction in EU greenhouse gas emissions by 2030. The key issue for ceramics within the EU ETS proposals is carbon leakage, notably the evaluation of industries so that they are deemed either at risk or not at risk of it. Some sectors are likely to meet the proposed carbon leakage quantitative threshold, but the situation for other sectors, mainly the heavy clay industries and particularly those that produce bricks, clay roof tiles and clay pipes, is less clearcut, which is why I felt there was a need for this debate.

The UK Government recently announced their position on the EU ETS phase 4 and suggested that free allowances should be focused on only a handful of sectors, with other sectors receiving a lower-tiered proportion. The ceramics industry is extremely concerned by this tiering proposal, as ceramic manufacturing sites would need to purchase significantly more allowances. Indeed, it is predicted that heavy clay producers such as those in my constituency would have to buy all their carbon allowance after 2027. A number of ceramic manufacturers have said that that charge alone is likely to exceed their profits.

As part of its Ceramic EARTH campaign, the British Ceramic Confederation has used figures from the Department of Energy and Climate Change to estimate that UK heavy clay construction product manufacturers will pay more than £40 million by 2030 under this proposal, which equates to almost £1 million per year per factory on average.

Clearly this situation concerns me and many other people, because businesses, jobs and investment are at stake. Therefore, I ask the Minister to continue to look at this proposal, which is for a system that supports only a few energy-intensive industries at the expense of many others. I genuinely fear that the UK proposal will burden businesses with very high extra costs. In fact, energy costs and climate-related taxes already make up around 30% of a brick maker’s production costs, and I fear that this proposal will only add to the issues that they face.

I am sure that others in Westminster Hall today are aware that there is a growing demand for housing in this country—we often discuss and debate it in the Chamber. Construction of houses is at an eight-year high and therefore the demand for materials is growing too. Brick is the most popular cladding material for building walls, with over 80% of new homes using bricks. Brick is unmatched for its durability, low maintenance costs, aesthetics and lifetime sustainability.

I recently had the pleasure of visiting one of the brick factories in my constituency and it was an inspiration to follow the production of bricks, from the clay pit behind the factory all the way through to the finished product at the end. It was only when I stood on top of the huge kiln that I really appreciated just how much energy goes into such large kilns to produce bricks for us.

--- Later in debate ---

[Wendy Morton]

My hon. Friend makes an important point. The subject of the debate is important, because behind it are jobs and our local economy. I do not wish to see de-industrialisation. The UK has a proud industrial history. We should also recognise that importing products from outside the EU would defeat the point of the emissions trading system. Overall, manufacturers outside the EU are not as well regulated. The electricity generation and the fuels used are more carbon-intensive, and the transportation of goods to market emits additional carbon.

As I said, the matter of housing is frequently raised in the House. The British Ceramic Confederation estimates that the Government’s programme of house building has the potential to create more than 3,000 direct ceramic manufacturing jobs in the UK and give a big boost to the sector and GDP. However, that is not being realised because of the threat of carbon leakage loss and the uncertainty that brings.

Turning to energy costs, brick makers in the UK pay about 80% more for their electricity than the EU average price, according to Eurostat. Despite much mention of the renewables compensation scheme for energy-intensive industries, brick makers are not compensated at all in the UK for renewables costs. I am sure my right hon. Friend the Minister will know that seven ceramic manufacturers in the UK are likely to receive renewables compensation, in contrast to more than 100 German ceramic and clay sites. Clearly we do not have a level playing field, and we need one.

[Robert Flello]

Given that a lot of the players in this market that have factories in the UK also have factories in such places as Germany, surely one pressure comes from saying to those companies, “You can get compensated in Germany. Put your production in Germany, not the UK.”

[Wendy Morton]

The hon. Gentleman is absolutely right. At the end of the day, I want a level playing field for our industries in the UK so that we can compete. We need to extend the number of companies that the compensation covers. I am pleased to note that the hon. Member for Stoke-on-Trent North (Ruth Smeeth) is here today. She is chair of the all-party group on ceramics. I am sure she will make reference to and, I hope, welcome the Chancellor’s announcement of the ceramic valley enterprise zone status in her constituency. That is welcome news, and I am sure she will have more to say on that, but we need the right energy and carbon policies to unlock investment at this critical time when we continue to secure the country’s economic recovery.

The Government have set a key target in their construction strategy of a 50% reduction by 2025 in the trade gap between total exports and total imports for construction products and materials. Ceramics and bricks can make a real contribution to that target, but that will happen only if we have a level playing field that enables us to compete.

The ceramics industry does not just face issues within Europe. As a result of dumped imports, between 2006 and 2011 a huge number of direct jobs were lost in the ceramic tableware and kitchenware industry within the EU as Chinese exports tripled. Since the EU anti-dumping measures were introduced in 2011 for tiles and in 2013 for tableware, the industry has stabilised its production, brought manufacturing processes back to the EU and created jobs and investment opportunities, including with clay and other materials suppliers.

The ceramics industry is, I fear, one of the most vulnerable to overcapacity in the Chinese economy. If market economy status is conferred on China by the EU, despite it only meeting one of the five necessary criteria, it will make the maintenance of adequate and meaningful anti-dumping measures, which currently protect tiles and tableware, impossible, the progress the industry has made since 2011 will be lost, and the industry will once again be put at risk. It would also further add to the uncertainty the sector is facing. What assessments have the Government and the Minister made of the impact of market economy status for China on the ceramics industry? Will they continue to listen to the views of the industry? Colleagues in the European Parliament recently rejected MES for China in a plenary vote.

I come from a business background. I believe in manufacturing. Businesses need continuity and stability to invest, innovate and thrive. As a country, we cannot decarbonise by de-industrialising and shifting our carbon emissions to another part of the world. Will the Minister look seriously at this issue? I want our industries to prosper and thrive. The ceramics industry needs competitive energy prices and the rejection of market economy status for China, but above all it needs a level playing field. That is why I am asking the Government to recognise the strategic importance of the ceramics industry and, in particular, bricks, pipes and roof tiles. I am sure that other Members will mention other products, too, and I leave that to them. We need the Government to look at today’s industries to see how they can be best be supported to thrive in tomorrow’s markets.