Time for change? Priorities for UK ceramics
Dr Laura Cohen, Chief Executive of the British Ceramic Confederation, has outlined priorities for the new Government to ensure a healthy UK ceramics industry. Andrew Carp of Resource UK reports
Prior to the general election, the British Ceramic Confederation (BCC) set out its priorities for the new Government, irrespective of which political party was elected. This was to set out the issues of greatest concern and relevance to the ceramic industry.
Under this agenda, the BCC lobbied hard to impart the message to political parties and parliamentary candidates as to what we, as an industry, would be looking for when they took office. Cohen stressed that these priorities were proposed by the ceramic industry primarily, but that the BCC considers the majority to be equally applicable to the entire manufacturing sector in this country.
The key priorities were set out under two headings –
- Support for the UK manufacturing industry and aid for recovery, should explore energy, taxation, better regulation and planning.
- Aiding recovery should include financial markets, capital investment, and skills retention and development.
On the positive side, there has been some support from taxation policies, notably through corporation tax and employer’s national insurance costs being reduced or held. With an agenda firmly set on reducing the national debt as quickly as possible, this may be seen as surprising. No doubt the picture may change in the future, and indeed the Government has taken the decision to raise VAT, which could have an adverse impact on the construction industry in particular.
There are also good signs in skills retention and development through apprenticeships and vocational courses. In addition, Ministers do appear to be listening to concerns on regulation, but could be acting more quickly on matters such as cumulative UK energy taxes.
There is still a tendency for Government departments to ‘gold plate’ European Directives, putting the UK at a disadvantage in a competitive world market. There is hope that action may be taken to reduce these burdens in the future.
In the Comprehensive Spending Review, revealed in October, the Government has committed to direct support for the Renewable Heat Incentive in place of the previous Government’s proposals to fund this though a levy on users’ gas bills. We will need to see confirmation about the implications for gas prices to large intensive users. Also, revenue raised from the Carbon Reduction Commitment will be used to support the public finances, rather than recycled to participants.
Room for improvement
The areas where Government ‘could do better’ include Capital Investment. Ceramic products are used in construction, and every pound invested in construction generates £2.84 worth of economic activity as well as creating employment. Recovery means investment in new plant and machinery, alongside R&D into new products, all of which requires companies to have the confidence and the funds to commit to capital investment projects.
The nation also desperately needs affordable housing, and here the financial market is key. It is clear that the banks are still resistant to lending to facilitate capital investment, either to make our factories competitive or to encourage construction companies to start building again. After the Comprehensive Spending Review, we know that expenditure on social housing is being cut and plans for affordable housing are unclear. Added to this, the planning system is still in turmoil and needs an urgent root and branch review to ensure that vital raw materials are made available for the future and renewable energy generation is encouraged.
Cohen’s main area of concern is energy, which accounts for up to 30-35% of manufacturing costs. The construction industry needs security of gas and electricity supply at competitive rates. The UK came perilously close to running out of gas supplies not so long ago, with the dispute between Russia and Georgia.
A fair transition to a low carbon economy, without putting the UK at a disadvantage, relative to the developing world, is also critical to helping British companies flourish in the coming months and years. The industry needs recognition that its products generally have a longer lifespan and, therefore, a low carbon footprint compared with some competing products.
The EU Emissions Trading Scheme has given ‘carbon leakage status’ to all other construction materials, but not some competing ceramic materials such as bricks, clay roof tiles and clay drainage pipes. The BCC is lobbying to get this changed.
As expected, the picture is mixed. The new Government is doing some things that are supportive of the recovery of the economy and the manufacturing sector, but there are also definite areas where policies and priorities put the UK at a disadvantage. I personally am very concerned about the lack of substance in the government’s green issues and the direction of planning reform towards a local agenda. The lobbying power of the BCC is important to make sure our voice is heard.
• This report is based on a talk presented by Dr Laura Cohen at the ICTa North Staffordshire branch in September 2010. Twenty five per cent of UK ceramics manufacturing sites are located in North Staffordshire – still a major part of the economy of the Potteries. It was relevant, therefore, for Cohen to address the Branch. The ceramic industry in the area is far from dead, but it needs strong support from Government to thrive and flourish.