Energy Prices: Energy-intensive Industries

Debate between Sarah Jones and Gareth Snell

Thursday 1st May 2025 Commons Chamber

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op) (Urgent Question)]

To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on the Government’s approach to reducing energy prices for energy-intensive industries.

[The Minister of State, Department for Energy Security and Net Zero (Sarah Jones)]

I relay my thoughts to the workers in my hon. Friend’s constituency, for whom I know this is a worrying time. I thank my hon. Friend for raising the issue. He is a tireless champion for workers and businesses in his constituency. We have spoken and will continue to speak regularly about these issues and the importance of the ceramics industry in his area in particular.

This Government recognise the challenges high energy prices pose to UK businesses. We know that the ceramics sector is particularly affected; my hon. Friend has raised the issue in Parliament on other occasions. The Government are working closely with Ceramics UK and local Stoke MPs to work out how we can support the sector.

For energy-intensive industries overall, our clean power 2030 target is the key to long-term sustainable price reductions. Clean home-grown energy is the best way to protect bill payers and boost Britain’s energy independence. We are already bringing energy costs for UK industries closer into line with other major economies through the British industry supercharger. That will fully exempt eligible firms, including some but by no means all of those in the ceramics sector, from certain costs linked to renewable energy policies, particularly those exposed to the high cost of electricity.

Using more electricity and less fossil fuel is the future for UK businesses. The latest advice from the Climate Change Committee expects electricity to meet 61% of industrial energy demand by 2040, so we are developing options to enable businesses to do that.

We are already taking action. When my hon. Friend raised this important issue in a Westminster Hall debate in March, I noted:

“We are working on how to remove undeveloped, speculative programmes from the grid connection queue and prioritise others.”—[Official Report, 4 March 2025; Vol. 763, c. 109WH.]

Just last month, we announced pro-growth reforms to help unlock £40 million of mainly private investment a year in clean energy and infrastructure, so that so-called “zombie projects” will no longer hold up the queue for connection to the electricity grid.

We recognise that we need to support a range of energy-intensive industries, including industries such as ceramics, that are essential to our UK economy and our missions, for example to build the 1.5 million homes and the clean energy infrastructure products in which this Government are already investing. Following years of economic chaos and instability under the previous Administration, this Government are implementing a modern industrial strategy that will drive growth and the creation of good high-quality jobs in communities across the UK.

I look forward to continuing to work with my hon. Friend and other hon. Members from across the House. We are meeting next Wednesday and I hope to be able to progress things further at that stage.

--- Later in debate ---

[Gareth Snell]

I thank the Minister for her engagement on this issue, because she has genuinely and authentically tried to look for a way forward. When my hon. Friends the Members for Stoke-on-Trent North (David Williams) and for Stoke-on-Trent South (Dr Gardner) and I had a meeting with the Minister six weeks ago, we warned her that other factories were going to fail, and we stand here following the closure of Moorcroft yesterday. She will be aware that other factories in Stoke-on-Trent are working on short time as a way of reducing costs so that they can put more money into meeting their ever-increasing energy bills.

I thank the Minister for the outline she has given, but she will know that we have previously talked about most of the things she has raised today, and they do not apply to the ceramics sector or to great swathes of the energy-industrial sector as a whole. The supercharger scheme does not work for the ceramics sector; indeed, ceramics companies end up having to subsidise other energy-intensive industries, because they are not part of the supercharger scheme. We have been told that we cannot see an exception to that. We have asked about the emissions trading scheme and free trade allowances and have been told that some are available for ceramics, but that does not go far enough to meet the demands we have today.

We have been constantly promised jam tomorrow, by the last Government as well as this one—well, jam is no good if you are dead, and the ceramics sector in Stoke-on-Trent is on life support. We are at a point where good manufacturing jobs done by proud people are falling away every month. This is not new: it started in 2019, with the closure of Dudson, and continued with the closure of Wade in 2022, Johnson Tiles in 2023 and Royal Stafford and now Moorcroft in 2025. The energy-intensive industries in this country are pivotal to manufacturing. If we see them fall away, manufacturing in this country will fall away.

I ask the Minister three very simple questions. Will she look at a wholesale change to the way in which we do subsidies and energy prices for energy-intensive industry in the short term, before GB Energy comes online? As well meaning as GB Energy is, it is too far away to help. Will she rule out specifically moving any policy costs on to gas costs? Gas is the big cost for the ceramics sector; electricity is a small proportion of what we do. Will she take the opportunity to make a clear commitment at the Dispatch Box, as the Secretary of State for Business and Trade just did when he talked about a sector falling on its knees? Ceramics is there. We do not need the same level of investment that steel does; we need a tiny fraction of it. Can we have it, and can we have it soon? If we have to come back here in six weeks, there will be no sector left to defend.

[Sarah Jones]

I agree with my hon. Friend and recognise the challenge. We lost 1,250 jobs in the ceramics sector between 2015 and 2023. It has been a very sad decline, and we want to turn that around.

The whole point of an industrial strategy is to have a Government who are proactive in supporting our industries. We will not put extra cost on the ceramics industry; we are looking to see how we can help and support. My hon. Friend has my word on that. We are working on every single one of the suggested policy reforms in the package that Ceramics UK has put forward, and we will meet him next week to talk about these things.

I cannot make promises at the Dispatch Box on areas that are not my responsibility and rule out whole swathes of policy, but I assure my hon. Friend that we will not put extra costs on the ceramics industry. We are looking to do more and to support, and we will come back. I completely understand his point about the timing and the need to act quickly.

British Steel

Debate between Sarah Jones and Gareth Snell

Tuesday 22nd April 2025 Commons Chamber

[Sarah Jones]

I need to be clear on this point, because I know that there has been lots of speculation. We are not aware of any deliberate acts of sabotage. There was an issue with people coming on site who did not gain access. No Jingye officials are on site at the moment. We are talking to Jingye in a respectful way about what happens next. That said, it was the case that we had been negotiating in good faith, and we felt that that good faith had ended in the way in which Jingye was not securing the raw materials that we were really clear it needed to secure, so there was a breakdown there. The position on Jingye is a position about it as a company; it is not a position about our wider view of China. Because we have hundreds of thousands of jobs that are dependent on trade with China and because it is our fourth-largest trading partner, our position remains that we need to be mindful of that, but we also need to be mindful of security, and we always will be. There will always be a very specific and deliberate account of the security implications of any investors in the UK.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

We cannot make British steel without British ceramics. High temperature-resistant refractory ceramics are needed to line the blast furnaces to keep them alight, but the Minister is acutely aware that the ceramics sector in this country, much like the glass and chemicals sectors, is being crippled by energy prices, because of both wholesale costs and policy costs, which the last Government chose to put on and which were continued by this Government. When the Minister talks about backing British industry and manufacturing, can she say when glass, ceramics and other foundational industries will get the support they need to prop up and support the advanced manufacturing that we are all so proud of? The cost of that will be a tiny proportion of what has been committed to British Steel.

[Sarah Jones]

My hon. Friend is quite right to raise ceramics and their importance in blast furnaces. We have all become steel experts through the many podcasts that everybody has been listening to over recent weeks. One of the issues with shutting down blast furnaces immediately without proper provision is not just that the metal hardens, but that the ceramics crack and fracture. That was the risk with Jingye refusing to bring in those raw materials. My hon. Friend knows that the ceramics industry is very important to the Secretary of State and to myself, and the wider foundational industries are very important too. He is right to raise issues that we have talked about many times in terms of energy prices. The Government are working at pace to try to alleviate that problem and many others that he has raised, whether cheap imports or other issues.

North Sea Energy

Debate between Sarah Jones and Gareth Snell

Thursday 6th March 2025 Commons Chamber

[Sarah Jones]

I can reassure the hon. Gentleman that I am on planet Earth and that we are well aware of what we are doing. We look at the world around us and see the enormous hike in energy prices, which is linked to our being attached to the global market for oil and gas. The previous Government spent tens of billions of pounds of taxpayers� money in order to protect people against the price hike, and we cannot allow that to happen again. It is absolutely right that we push for cheaper renewable energy, and I remind the hon. Gentleman that I sit in two Departments: the Business Secretary is my boss, and the Energy Secretary is my boss. They both agree with this policy, as does the Chancellor, because it is the right thing to do.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Through support for jobs, support for skills, the prominence of the industrial strategy and support for a clean transition, the Minister has demonstrated what is possible when there is political will. To quote her words back to her, when will we be able to give the sector the support and clarity it needs to continue operating for some decades? The ceramics sector would love a package like this�or is the ceramics sector not sufficiently important enough?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I ask the Minister to keep her responses short.

North Staffordshire Ceramics Industry: Energy Costs

Debate between Sarah Jones and Gareth Snell

Tuesday 4th March 2025 Westminster Hall

[The Minister for Industry (Sarah Jones)]

It is a pleasure to serve under your chairmanship, Sir John. I am grateful to my hon. Friend the Member for Stoke-on-Trent North (David Williams) for securing this important debate. I begin by echoing his thanks to the trade unions, the industry and Ceramics UK for all they do. I have engaged with Ceramics UK quite a bit since taking up this role, and previously in opposition, and I work closely with the unions and the industry.

My hon. Friend clearly laid out the challenges we face, as well as the challenges facing his community’s disposable household incomes, and the importance of getting this right. He is right to look to the future of ceramics, not to the past. There are several industries that we want to grow in the UK, but we have historically focused on the past—steel is a case in point—not the future.

My hon. Friend talks about new advanced technologies, and the important uses of ceramics in our mobile phones, our aircraft, our defence and our medical equipment are clear to see, though little understood by those outside this sector. We can all do more to make sure people understand the ceramics industry and what it is for. The industrial strategy is one way to do that.

As my hon. Friend knows, the industrial strategy is coming out in the spring. We promised it for years in opposition, and the previous Government but one tried, but they did not persevere. We have identified eight growth sectors within the strategy—advanced manufacturing is one of them—but foundational industries have to power those growth sectors, which is where ceramics is important.

I nod to my hon. Friend’s well-made point about defence, which is one of the growth sectors in the industrial strategy. Over the last few days, we have seen this Government’s commitment to increasing our defence spending. The Chancellor spoke at the Make UK conference today about how we can change defence procurement to include more of this country’s SMEs. We have also been creative in using UK Export Finance to create jobs with Thales in Belfast. There is more we can do, and I will take away my hon. Friend’s point about advanced ceramic carbon filters. I suspect there are other potential applications in this space.

I acknowledge and appreciate the very real challenges that my hon. Friend raises. The cost of energy bills is very difficult for the ceramics industry and other energy-intensive industries. Every one of us has suffered from the huge price hike after Russia invaded Ukraine, although our energy costs are not comparable with those of our neighbours.

My hon. Friend also highlighted how electricity costs so much more than gas and the challenges that will bring as we decarbonise. He mentioned the emissions trading scheme and the ongoing consultation on free allowances. I also heard his well-made points about the low carbon transition and the challenges for sectors such as ceramics, where its up-front cost is potentially prohibitive.

[Gareth Snell]

The Minister probably knows as much about ceramics as those of us from Stoke-on-Trent, as she is constantly on her brief.

On the transition, one of the challenges facing ceramics companies in Stoke-on-Trent and around the country is that the margins on their products are not sufficient to allow big up-front capital investments, which means that going from a gas kiln to an electric kiln is often beyond their reach as they simply do not have the cash flow.

One solution that the Minister could potentially take back to the Department is some sort of VAT exemption for energy-intensive industries and companies that are looking to move towards more low-energy, low-carbon equipment. Perhaps the public sector decarbonisation scheme, which is currently undersubscribed, could be used in some way to help energy-intensive private companies to access new technology that would reduce not only their carbon output but their long-term energy costs through efficiencies.

[Sarah Jones]

I thank my hon. Friend for those points, which he has previously raised with me. I can certainly take away the point about the public sector decarbonisation scheme. Bizarrely, as he knows, it is not part of my brief, but that does not matter. This Government work across Departments and across barriers, and I will endeavour to look into it. The point is well made that it can be challenging when a company has small margins and big up-front costs, especially in these industries where there has not been infrastructure investment for a long time. A lot of places need general infrastructure investment, and we are looking actively at this issue through the spending review process.

Happily, I can say that we are looking to answer all the questions asked by my hon. Friend the Member for Stoke-on-Trent North. I cannot promise what the answers will be at this point, and I cannot promise that we will do everything we seek to do, but we are well aware of all his points and are looking at them in depth.

We are looking at subsidies on energy costs. My hon. Friend said that the Department for Business and Trade and the Department for Energy Security and Net Zero should work together. I sit in both Departments, so I have conversations with myself about these issues. There are competing vantage points that we need to grapple with, but the advantage of my sitting in both Departments is that officials from the two Departments meet to find solutions before speaking to me, which is helpful. They are working well together.

We are also looking at the energy-intensive industries exemption scheme. As my hon. Friend knows, grid connections are an issue across the board. We are working on how to remove undeveloped, speculative programmes from the grid connection queue and prioritise others. One of my roles as the Minister for Industry is to point to the need not to forget our existing industrial base and the need for it to connect to the grid, as well as the need for the important data centres, artificial intelligence and new technologies and new investment that we want to come to the UK. If we cannot get our own industry connected in the way we want, we are getting something wrong, so my hon. Friend is right to make that point.

I met representatives of the energy-intensive industries last week, including Rob from Ceramics UK, and I am following up on all these things with the Treasury and with officials. We agreed on a couple of things at that meeting, and one is to have a session with the industrial strategy team and the energy-intensive industries to make sure we are all working towards the same outcome. Another is to talk to the Treasury about the challenge we face in how the ETS and the CBAM align and fit together, or not, depending on policy. These things are enormously complicated, as my hon. Friend knows, and CBAM is a Treasury lead. However, I am very aware of the need to get that relationship right; otherwise, the system does not work at all.

My hon. Friend talked about hydrogen, which is very important and is part of my brief in the Department for Energy Security and Net Zero. We are developing a kind of hydrogen network. We have had what we call HAR1, or hydrogen allocation round 1, which was the initial agreement to fund 11 hydrogen projects—electrolyser projects—around the country. There is hydrogen in the carbon capture and storage clusters that we are developing, and we are currently looking at what the next phase of the hydrogen roll-out will be.

My hon. Friend knows that hydrogen is currently very expensive. We need to work out a path to reduce costs, which is what we are grappling with at the moment, in a climate where it is difficult to bid for money in the spending review. How can we unleash the hydrogen industry and give certainty to businesses that want to invest but need the right signals? How can we do that and use money wisely? And who pays for it? People are very interested in hydrogen, whether in steel, in transport or in the green energy space—it has a lot of uses. We need to make sure we are making the right decisions. I will speak to the hydrogen team about ceramics, and I will ask what we are looking at in that space.

[Gareth Snell]

Again, I am grateful to the Minister for her generosity in giving way. My hon. Friend the Member for Stoke-on-Trent North (David Williams) is right that hydrogen could be the thing that helps our industry, but electrolysis requires electricity. Electricity generation is capped to the gas price, and therefore the gas price drives the hydrogen price. Unless there is a way of decoupling that rather difficult circuit, we will find ourselves replenishing fuel without a particular discount.

Our other unique challenge, as my hon. Friend expertly laid out, is that these factories are in communities, because that is how ceramics worked—a potbank was built and then houses were built around it. Connecting to hydrogen would not be suitable if the hydrogen has to be contained in large towers, which are better suited to large out-of- town factories.

Although I welcome the Minister’s commitment to hydrogen, I hope she can bear those two points in mind, because ceramics are a unique challenge. However, we are willing to work with her to find a solution.

[Sarah Jones]

My hon. Friend articulates his concerns very well. Connecting the gas sounds like a song: “The hip bone’s connected to the thigh bone.” It is very challenging, and he is right to say so. The challenge with hydrogen is getting it to a point where we can deliver it at the scale we want. Or will it always be used in certain areas for certain things, as we will never get the cost down? That is what we are grappling with. On the potential jobs, potential growth and potential exports, these are huge opportunities for the UK, but we need to work out how we take it forward.

Finally, my hon. Friend the Member for Stoke-on-Trent North mentioned the huge challenge of counterfeiting. He nodded to the actions taken by the Trade Remedies Authority. I know that Ceramics UK and ceramics manufacturers have responded to that review and a final recommendation is due in July. Of course, I will make representations where needed. I recognise the challenge that my hon. Friend highlights.

Trade officials regularly meet representatives of Ceramics UK. I do not wish to add to the burden of my colleagues, but it might also be good for my hon. Friend to speak to the Minister for Trade Policy and Economic Security, my right hon. Friend the Member for Lothian East (Mr Alexander), if he has not already done so, about some of the challenges we face.

Hopefully, I have answered my hon. Friend’s questions. I congratulate him again on securing a debate on such an important issue, on behalf of his constituents who work in such a fantastic industry for our country, and hopefully we can work together to fix some of these challenges.

Question put and agreed to.

Oral Answers to Questions

Debate between Sarah Jones and Gareth Snell

Tuesday 17th December 2024 Commons Chamber

[Sarah Jones]

I would be delighted to meet the hon. Member and talk about her plans.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

What assurances can the Minister give me that energy-intensive industries in Stoke-on-Trent, such as ceramics, will benefit from the investment coming from this Government and will not get left behind in our transition to net zero?

[Sarah Jones]

My hon. Friend makes a very good point. We were talking about this issue in the Tea Room only this morning, and I will meet the ceramics sector and him first thing in the new year to talk about some of the challenges it faces. We are absolutely committed to supporting the sector.