China Clay Industry (Job Losses)

Stephen Gilbert Excerpts

Wednesday 5th February 2014 Commons Chamber

[Stephen Gilbert (St Austell and Newquay) (LD)]

I rise tonight to speak about the recent news of significant job losses in my constituency in the china clay mining industry. First, let me put it on the record that I, on behalf of the communities that I represent, thank the emergency services, local councils, Cornwall council, the Environment Agency and scores of volunteers who have spent many hours over the past two days tackling the damage caused by the recent storms that have hit Cornwall.

In recent hours, people in Cornwall will have come together in the finest tradition of the Cornish motto, “One and all”. Although it remains my privilege to represent a part of the country that demonstrably shows such community spirit, there are issues that the Government must tackle to improve resilience to flooding events and to ensure that they do their part in the same way that local communities are doing theirs.

Mr Deputy Speaker, you and other hon. Members will be aware that the china clay industry in Cornwall is more than 260 years old and has played a formative part in Cornwall’s cultural history. On his discovery of china clay in 1746, William Cookworthy began to experiment to produce hard-paste porcelain and finally patented his formula in 1768. With control over the use of china clay and china stone for porcelain manufacture, Cookworthy opened his own pottery in Plymouth, moving to Bristol in 1770. Four years later, Cookworthy retired and transferred his business to his partner, Richard Champion, who almost immediately applied for an extension of the original patent. However, that was met with fierce opposition from the potters of Staffordshire, led by Josiah Wedgwood, who were keen to use china clay for their own wares. After Champion’s monopoly was broken by the Staffordshire companies they leased their own pits in Cornwall, but by 1830 they had given up control of production to others and bought their clay from agents or groups of adventurers who would later found the first china clay companies.

Production increased with the discovery of other uses of china clay and by 1858 42 companies were producing about 65,000 tonnes of clay a year. Today, Imerys Minerals Ltd is the single producer of china clay in the area and almost 1.5 million tonnes of clay is produced annually in Cornwall and Devon.

There is no settlement in my constituency untouched by the clay industry. Sky tips still tower above St Austell bay and intricate networks of viaducts and old settling pits still stretch out from wooded valleys. Many of the coastal towns, including Newquay, have at some point been centres of the export of china clay around the world. Like many parts of our country with a traditional industry that has dominated local employment for decades, many generations of families have worked in the industry with, until recently, a presumption that there were well-paid jobs for life.

The decline of the industry has been mirrored by the decline of some communities in Cornwall. Communities that used to be aspirational have had their sights set lower and communities that used to be outward-looking have turned in on themselves. The sad reality is that in many of the former china clay mining villages in my constituency—such as Bugle, Nanpean, St Dennis and Penwithick—we have seen a transition from generations of families working in the same industry to a generation of families not working at all. Educational attainment is low, health outcomes are poor and families struggle to make ends meet. Despite intervention from successive Governments, regenerating the communities will take time. That time means that some of the people affected will not be able to make the most of their lives.

Let us also be clear that the modern clay industry contributes significantly to the economy of Cornwall and that should not be underestimated. Worth £155 million per year, it is a huge financial asset to the duchy and is one of the UK’s most valuable mineral exports, second only to North sea oil and gas.

Globally, Britain is the world’s fourth largest producer and exporter of china clay and Cornwall is at the very heart of the industry. Indeed, china clay from Cornwall accounts for 88% of total UK sales and none more so than that from the pits around St Austell. Huge white pits make a good third of my constituency look like a lunar landscape, as anyone who has flown into Newquay airport will be able to attest.

The industry, however, has struggled in recent years. In 2010, 1 million dry tonnes of clay were sold, but in 1988 that figure was almost three times higher at 2.8 million tonnes. As with other industries, emerging markets in Brazil and China have undercut exports and alternative processes, in paper processing for example, have reduced demand. As a result the number of people employed locally has plummeted from a high point of some 13,000 across Cornwall and Devon to just about 900 today. In an industry that is located among a few small towns, the recent news of extra job losses is acutely felt.

Imerys, a French-owned company and the largest producer of china clay in the world, acquired English China Clays in St Austell back in 1999 for £756 million, along with its then 2,000 employees. Sadly, recent job losses have been all too common in the industry. In 2006, Imerys made 800 people redundant, which was a devastating blow to the communities affected in both Devon and Cornwall. At the time, the local community was told that these losses would shore up the operation and provide additional resilience and that the jobs left would be secure in the long term. However, it has been announced in recent weeks that the company will be shedding a further 70 jobs. Some hon. Members might think that 70 is a relatively small number of job losses, but it is not just 70 jobs; it is 70 families, 70 homes and 70 stories of personal hardship. The news is of course devastating for the families involved, as it will likely mean hardship and stress for months, if not years, to come.

Furthermore, some skilled, technical jobs at the Imerys laboratories in Par Moor are being relocated outside Cornwall, leaving people with a stark choice: to tear up their family roots and move up country to keep an insecure job, or to lose it altogether. Put simply, job losses, industrial decline and outsourcing of skilled work from Cornwall are exactly the opposite of what this Government are trying to achieve nationally and locally.

As if that was not bad enough for a part of the world that is already struggling, there is potentially worse to come if the Government do not act. Of particular concern is the European Commission’s current investigation into the aggregates levy. The levy was introduced over 10 years ago to discourage the use of primary sources of aggregates from deposits beside rivers and quarries and to encourage the use of recycled or secondary materials instead.

There were, and are, good environmental reasons for the levy, but the large producers do not like it, of course, and have been lobbying for its removal for some years. Last year, having failed to convince the UK Treasury, some persuaded the European Commission that the levy was unfair and should be investigated as a possible unfair state aid to those companies selling secondary aggregates and avoiding the levy. The Commission launched an investigation and the Treasury then decided to suspend the levy.

The china clay industry in Cornwall is directly affected by the suspension of the levy. The industry sells secondary aggregates as a by-product of china clay production. For every tonne of china clay produced, some 9 tonnes of waste have to be disposed of, mostly in the large tips that are a feature of the mid-Cornwall skyline. However, some of the waste can be processed further into secondary aggregates, for example for use in the construction of the London Olympic stadium at Stratford, and there is growing demand for secondary aggregates for the many building and construction projects currently under way, particularly in the south-east, where the customer wants to demonstrate a green policy by using secondary aggregates, rather than primary ones.

Secondary aggregates can be transported either by rail or by sea through the port of Fowey. It is estimated that that market could grow to over 1 million tonnes within a few years. Of course, we all know that a green alternative must not cost the customer much more, so the business relies on being exempt from the £2 per tonne aggregate levy to balance the additional cost of transport. All that is at risk if the European Commission is persuaded by the major primary aggregate producers that china clay waste is not actually a waste but is mined to sell as aggregate. It is an odd argument: who would bother to mine it when there is perhaps 500 million tonnes—the result of decades of china clay production—sitting in tips in and around St Austell?

The Commission’s consultation on the matter has just closed, and I am grateful that my right hon. Friends in the Treasury have already submitted a helpful and robust response, no doubt recognising that it is in the Treasury’s interests not only to retain the levy, but to increase it to encourage further the use of secondary aggregates. I, too, have submitted a robust response, as has Graham Watson, the Member of the European Parliament for the South West of England.

Let us be clear that between 300 and 500 jobs in the St Austell area are at risk if china clay waste loses the exemption from the aggregate levy. Tonight, I would like to reiterate my plea that the Government ensure that the European Commission is given the full facts and that Ministers lobby as hard as possible to allow the exemption to continue, for good environmental reasons, for Cornish jobs and for more revenue for the Treasury. Those are three wins for which I think it is worth us, as a Government, fighting.

The china clay industry is as much a part of Cornwall’s history as tin mining, fishing or farming. It remains one of Cornwall’s largest employers and is responsible for millions of pounds going into the wider economy each year, and it still employs just under 1,000 people. It is an industry that I am proud to have spent some time working in, as did my mother, my grandfather and many other members of my family in Cornwall. The industry deserves recognition from Government for the vital role that it plays in helping to support the Cornish economy, and recognition from all of us for the wider role that china clay plays in our lives. From paints to plastics, and pharmaceuticals to paper, china clay is one of the unsung heroes of the modern world.

I ask the Minister to recognise the industry’s role in Cornwall, to join me in meeting senior industry representatives to discuss what more the Government can do to ensure its continued success, and to work to ensure that every resource of Government is put in place to help and support those who recently found out that they have lost their jobs. The china clay industry remains as vital to Cornwall’s future as it has been to our past. I hope the Government will join me today to work towards ensuring that this is not another great British industry that we let slip out of our hands.