Key policies on business support, trade, energy, housing and industrial strategy are needed to ensure ceramic manufacturers in the UK continue to support the UK economy, and can unlock further growth in the sector.
We need a government that is unashamedly supportive of UK manufacturing, making the UK an investment magnet. The last recession exposed the need for stronger manufacturing to help re-balance the economy, increase GDP and reduce the country’s trade deficit. As the Brexit uncertainty continues, ceramic industry leaders are calling for:
- A level playing field on regulation is needed to continue to compete internationally, prevent deindustrialisation, and avoid job losses.
- A no deal Brexit would be extremely damaging, putting business, jobs and investment at risk.
- The threat of unilateral zero import tariffs must be binned, it would lead to a flood of imports, creating massive trade distortions and destroying many manufacturing sectors in Britain.
- A comprehensive tariff and barrier-free UK-EU trade settlement is essential. Close to 60% of the ceramic sector’s exports are sold to the EU. If the new parliament can reach consensus on a permanent customs arrangement, protecting people’s rights at work and environmental and consumer standards, the confederation would support this.
- Any transition period should be ‘as short as possible but as long as necessary.’ To avoid a cliff edge at the end of this period, realistically it will need to be much longer than end 2020.
1. Business support
- Cash flow support is needed for all sizes of UK manufacturers as they continue to face significant upfront costs and potential changes to VAT arrangements and customs duties.
- EU structural funds should be fully replaced to provide funds to help local areas grow. Funding is needed to rebalance the economy away from London, support investment in innovation, businesses, skills and employment, and to create jobs.
- Enhanced bank lending should be available to SMEs in manufacturing sectors like ceramics. In the last recession, insufficient financial support was available to businesses to help in difficult trading periods.
- The £1m Annual Investment Allowance should be extended beyond December 2020 to ensure UK investment opportunities are maximised.
UK ceramic manufacturers make products that are exported around the world. Free trade is welcomed by our members, provided it is on a level playing field.
- A comprehensive tariff and barrier-free UK-EU trade settlement is a crucial for the future of ceramic manufacturing in the UK.
- We welcome new Free Trade Agreements with mature market economy economies with a realistic prospect of bilateral trade in goods. Existing EU FTAs such as Japan and Canada must be replicated by the UK after Brexit, we know zero-tariffs have been problematic here.
- The UK must develop and deploy adequate trade remedies, e.g. anti-dumping duties to protect UK manufacturers against distortions in free trade. This must include the ability for a level playing field with trade-distorting non-market economies such as China.
- Increased funding is needed for trade missions, alongside a specialist trade advisor for the sector to support exporters entering new markets.
3. Energy and net zero carbon
Ceramic manufacturers compete in a fiercely competitive global market and the success of the sector is largely dependent on internationally competitive energy, climate and environmental costs. The new government must ensure the UK does not decarbonise by deindustrialising.
Many of our members, particularly those making products for building new homes, are mandated to participate in the EU Emissions Trading System (ETS) to incentivise decarbonisation. If the UK leaves the EU single market, more of an incentivising / supportive approach should be adopted to reduce carbon emissions. A big challenge is our members pay 80% more than the EU average for electricity. The new government should:
- Abolish the UK-only Carbon Price Support tax and use new state aid flexibility after Brexit to expand relief on renewables / ETS indirect costs (on electricity) to many more ceramic manufacturers.
- Improve UK energy security – unplanned loss of gas or electricity would cause major safety problems and millions of pounds worth of damage to kilns. We support measures to increase UK gas storage.
- Ensure very significant co-funding over an extended period to help the industry decarbonise by implementing proven technologies and developing breakthrough technologies.
4. Housing and construction
Ceramics is a foundation industry, critical in the construction supply chain and delivering housing and infrastructure ambitions, including emerging off-site construction methods.
- UK-manufactured materials must not be disadvantaged and a new parliament must not distort the market by subsidising imported construction materials or untried technologies.
- With a level playing field, meeting the currently-projected housing need of at least 300,000 new homes a year including significant social and affordable housing, could result in at least a 60% uplift in ceramic construction material production capacity. This would create up to 6,500 new UK ceramic manufacturing jobs and add £800m extra turnover, as well as leading to more investment. But the clay reserves to build these homes must be secure and readily-accessible.
- A key target in the UK 2025 Construction Strategy is a 50% reduction in the trade gap. To achieve this, we need genuine partnership with Government and cross-department working.
5. Industrial Strategy
The ceramic sector is rightly proud of its track record in innovation, developing new products and implementing technology to improve energy efficiency in the sector and society. The new parliament should:
- Strengthen Government and industrial partnerships by creating a ceramic council with officials and ministers to work collaboratively on challenges such as net zero carbon, productivity and skills shortages.
- Support for energy efficiency investments in manufacturing, such as grants and interest free loans.
The British Ceramic Confederation represents the collective interests of all sectors of the UK ceramics manufacturing industry, safeguarding the industry’s prosperity, and acting on its behalf in discussions with government.
The sector includes: industrial ceramics, refractories, table and giftware, materials suppliers, bricks, clay roof tiles, clay drainage pipes and sanitaryware.
- £2bn annual sales including supply chain
- £500m annual export sales
- 20,000 people directly employed in UK industry and suppliers
90 parliamentary constituencies are home to ceramic production sites.