Ninety per cent of ceramics manufacturers across the UK are set to miss out on the recently announced government energy support discounts. According to Ceramics UK, only ten per cent of its members will be entitled to the support outlined in a consultation released today, 18 July.
The trade body says this is the latest blow for the multi-billion-pound sector, after promises of support ahead of the Spending Review and the Industrial Strategy failed to materialise.
Rob Flello, CEO of Ceramics UK, said: “The government says it is delivering on its promise in the UK’s modern Industrial Strategy to slash energy costs for heavy industry, as it launches a four-week consultation on plans to increase the discount on businesses’ electricity network charges from 60 per cent to 90 per cent.
“However, we have grave concerns about this latest announcement and the details set out in the consultation. Only ten per cent of Ceramics UK members would currently be entitled to support, despite the sector being a high-energy user.
“Members who could potentially be eligible are excluded by the government’s business-level test, which uses an artificially low electricity cost figure, and many gift and tableware manufacturers will be unable to access support all together, as they do not have the correct manufacturing category code.
“We are also concerned that the scheme is self-funding, meaning ineligible members effectively subsidise those who are eligible. This directly contradicts the government’s statement on 1 May on the floor of the house that no new costs would be added to our industry.
“Furthermore, there is a need for clarity on who will cover the increased costs associated with moving from 60 per cent to 90 per cent support.”
Last month Ceramics UK, which represents the interests of manufacturers across all sectors of the industry, said the government had completely misunderstood the fundamental operations of the vital sector after the promises of support for the industry in the months leading up to both the Spending Review and the Industrial Strategy did not materialise.
Rob added: “We were deeply disappointed with the government’s Modern Industrial Strategy and felt misled.
“The UK ceramics sector is predominantly gas-intensive, with a significant proportion of our members depending on natural gas for high-temperature processes that are currently not economically or technically viable to electrify.
“As such, while this reform may bring relief to certain energy users, it will offer little benefit to the majority of ceramics manufacturers, many of whom continue to face unsustainable energy costs that impact their competitiveness and long-term viability.
“The Department for Business, the Department for Energy, and the Treasury still do not seem to understand that energy-intensive doesn’t just mean electro-intensive.
“Ceramics need help with gas prices. We need the government re-evaluate its plans and work with us to back one of the UK’s most enduring and strategically important manufacturing industries.
“We are world-leaders in the production of both traditional and advanced ceramic materials, supporting industries ranging from giftware through to aerospace, defence, construction, clean energy and electronics.
“The industry contributes more than £2bn directly to the UK economy annually and employs approximately 20,000 people as well as enabling tens of thousands of other jobs from advanced manufacturing, through steel and glass workers, to bricklayers and more besides.
“The proposals need to be rebalanced and ensure that critical manufacturing sectors are not left behind.
“Our members have more than 150 operating sites across the UK and the sector is already an essential part of Britain’s industrial future – but we cannot do that if government continues to misunderstand the fundamentals of our industry.”
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