Government must change direction to help ceramics firms

Ceramics manufacturers are calling on the Government to review its policy on energy taxes to give them a better chance to compete on the world stage.

UK ceramics companies spend up to 35 per cent of total production costs on gas and electricity, with prices in the EU already two to four times higher than in countries such as the USA and Russia. Now, national trade association, the British Ceramic Confederation (BCC), is demanding measures to create a more level playing field with overseas competitors. Chief executive Dr Laura Cohen has written to Chancellor George Osborne outlining her concerns and urging him to address the situation in his forthcoming Budget. She wants greater capital allowances to help improve energy efficiency and is calling for a higher proportion of environmental taxes to be returned to the sector.

Dr Cohen said: “The need to maintain diversity and security of energy supply and the scale of emission reductions targets must be balanced against the ability of manufacturing industry to pay. Many firms have already invested in the latest technology to improve efficiency to the maximum level possible. The cumulative UK energy tax regime is extremely challenging and threatens company survival in the medium term as extra green taxes are likely to exceed current profits in many more companies within the next few years. None of our members are currently receiving any compensation in the Government’s package of measures for energy intensive industries …and all are being left for now fully exposed to the impact of other UK only taxes such as the Carbon Price Floor, Renewables Obligation and Feed in Tariffs.”

She continues: “A radical change in direction is required and, for UK industry to remain globally competitive, it’s fundamental that the Carbon Price Floor is either removed or maintained at its current level. We would welcome any opportunity to adjust the trajectory of the Levy Control Framework to reduce the future cumulative impact of climate policy measures on electricity prices”.

Poor perceived energy security for industrial users in the UK had, she added, also adversely affected investment decisions. Dr Cohen said there were several other practical measures that could be introduced to help investment in ceramics manufacturing.

“Greater capital allowances for a much wider range of energy-efficient technologies would help improve energy efficiency. The Government could also return a much higher proportion of environmental ‘taxes’ to the sector through co-funding for development of critical energy efficiency/emissions reduction technologies”.

Dr Cohen is also calling on the Chancellor to extend the Annual Investment Allowance beyond the current cut-off date of January 2015 and wants clarification on what will happen to the ‘Help To Buy’ scheme next year for members making construction products used in house building.

A full copy of the BCC letter sent to the Chancellor can be viewed at

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