BLOG ARTICLE: 04/09/2019

PRESS RELEASE: Ceramic sector response to Chancellor’s Spending Review


PRESS RELEASE: Ceramic sector response to Chancellor’s Spending Review

Government must be clear on support for UK manufacturers   

Sajid Javid’s first fiscal event, held in ‘unprecedented times’, includes a number of welcome announcements for ceramic manufacturers, but lacks clear commitments in many areas.

Plans for a national infrastructure strategy demonstrate a commitment to investing in improvements across the country. The British Ceramic Confederation welcomes the announcement and urges Government to ensure manufacturing sectors are both consulted and recognised in the development of the strategy. This also needs to be sufficiently wide-ranging to include energy, minerals and housing.

To support business growth in the ceramic sector and to remain internationally competitive, UK manufacturers need secure and affordable energy supplies. Industrial electricity prices are amongst the highest in Europe and the UK is becoming increasingly dependent on imported gas. In advance of the infrastructure overhaul, we look forward to the publication of the energy white paper, expected to outline the progress on the Conservative manifesto pledge of 2017, to ‘deliver the lowest business energy costs in Europe’. With energy costs representing up to a third of production costs for many businesses in the ceramic sector, plans to address this vital part of the national infrastructure are good news.

A planned and secure supply of UK minerals, such as clay, is also essential to our economy and these must be included in an infrastructure strategy.

UK manufacturers are a key part of the mix in delivering infrastructure improvements and increasing the national GDP. The ceramic sector in the UK provides the bricks, roof tiles, clay drainage pipes and many more products critical to the construction sector. We welcome the announcement to use Government resources to ‘kick-start the infrastructure revolution’. Our 90 member companies are located in every region across the UK, and improvements in transport and connectivity will help to boost growth in the sector and support regional development.

We’re disappointed the spending review did not make explicit commitments to address the housing shortage. Housing is part of the ‘vital infrastructure’ of society, and with current calculations pointing at the need for 340,000 new homes a year, further action is urgently needed. It is important too that use of UK sourced durable construction products are included to maximise the benefits to the UK economy.

The £241m for the Towns Fund to support regeneration of local economies, alongside the continued funding for Midlands Engine and Northern Powerhouse, are good news for many ceramic manufacturers, who provide vital jobs, often in disadvantaged areas. Government should recognise place-based regeneration and stronger clusters of industry are intrinsically linked. Targeting this funding can help to deliver a boost to local economies and productivity.

We welcome the additional £30m to accelerate progress on developing decarbonisation schemes. However, we believe Government needs to go very much further to support the roll out of proven technologies and the development of new technologies to achieve the ambitious 2050 target, to support and grow UK manufacturing. Future technologies, essential to the ceramics sector include hydrogen, biomass, syngas and large scale electric continuous kilns, all of which need to be developed now to help the sector decarbonise. Our UK ceramic manufacturers must remain internationally competitive to avoid exporting jobs and importing carbon, potentially leading to increased global emissions by importing goods from less efficient producers, and transporting them, often over great distances.

We also welcome the £30m increasing funding for air quality, but await further details on how this could benefit manufacturers to reduce industrial emissions.

Many ceramic companies are strong exporters, with £600m of export sales in the sector. The £60m extension of the Great campaign, announced today, is good news. One of our members, Royal Crown Derby has recently become an export champion, following support from the Department for International Trade. We hope this additional funding will lead to increase trade missions, allowing even more of our members grow their exports and enter new markets. We also welcome the additional funding to deliver ambitious free trade agreements and funding for the new trade policy framework as the UK leaves the EU.

While the additional £2bn of Brexit funding is welcome, we need clarity on measures to safeguard against the economic fallout which has already started. The continued uncertainty over Brexit has deterred capital expenditure for more than three years, choking improvements in productivity and capacity. For example, the announcement of additional border customs officers and the ‘more flexible regulation’ is welcome but businesses need more detail on changes to regulations to ‘cut the red tape’.


Notes to editors

The British Ceramic Confederation is the trade association for the UK ceramic manufacturing industry, representing the common and collective interests of all sectors of the industry. Its member companies cover the full spectrum of ceramic manufacturing, including the supply of materials, and comprise over 90% of the industry’s manufacturing capacity.

CSR submission