Ceramics and Chemicals Industries

This statement provides an update on the Government’s support to ceramics and critical chemical producers, two of the foundational sectors underpinning our industrial strategy.

The Government are today announcing the launch of the ceramics industry support scheme of £120 million to support the transition of the ceramics sector to a more cost effective and less carbon intensive means of production. Supporting this transition continues to deliver on our mission to decarbonise the economy, helping businesses to invest and grow across the country.

The ceramics industry has a rich cultural heritage, notably in the Potteries in the Stoke-on-Trent area, and it remains a large source of employment in Staffordshire and neighbouring Derbyshire, as well as in areas across the UK from Devon to Dumfries.

However, in recent years the sector has faced a number of difficulties, including a challenging global trading environment, and the cost of reliance on volatile fossil fuels, which have seen costs increase significantly since the Russian invasion of Ukraine. These challenges have led to a pattern of decline and resulted in the closure of historic sites such as Johnson Tiles, Moorcroft Pottery, the liquidation of Royal Stafford, loss of jobs at Armitage Shanks, and the recent administration at Denby pottery.

This Government are clear that industrial decarbonisation must not be achieved by deindustrialisation, and reducing operating costs for businesses will support a successful transition to more efficient and cost-effective forms of production. However, we recognise the challenges faced by ceramics producers, and that Government support will be necessary to help the sector.

That is why the ceramics industry support scheme is being introduced: £60 million of this funding will support capital investment from ceramics firms into more efficient and decarbonised means of production, including electrification of relevant processes. This will both attract business investment in efficient new technologies, and enhance our energy security by reducing our reliance on volatile fossil fuels. This fund will be delivered on a competitive basis, with successful companies demonstrating corresponding co-investment of their own. The expectation is that the package will support a small number of high capital projects, likely from larger companies, as well as smaller projects from established trading SMEs.

To ensure that all eligible companies are able to effectively take advantage of this support in practice and invest in the future of this industry, the ceramics industry support scheme will include an additional £60 million to support operational costs for firms that make successful capital bids but demonstrably need additional support to manage the transition.

We will continue to engage with the sector and explore both fiscal and non-fiscal policy options that can continue to support and sustain a modern, thriving ceramics sector. This includes ensuring that our trade remedies regime works appropriately to protect the sector from injury as a result of unfair foreign trading practices. I strongly encourage industry to engage the Trade Remedies Authority and share new evidence to make sure we have the right trade protections in place.