The Government's negotiating objectives: the White Paper Contents

Annex 2: Note of meeting in Stoke-on-Trent, 19 January 2017

Roundtable with local businesses

Stephen Dixon

Managing Director of Johnson Tiles and British Ceramics Confederation (BCC) President

Paul Farmer

Managing Director of Wade Ceramics Ltd., President of Staffordshire Chambers of Commerce and BCC member

Karl Woodcock

Managing Director of Unifrax Ltd (UK) and Saffil Ltd and BCC Board Member

Jon Cameron

Group Finance Director for Steelite International Ltd and BCC Member

Philip Ray

Group Company Secretary for Steelite International Ltd and BCC Member

Andrew McDermott

BCC Technical Director

Tom Reynolds

BCC Policy Manager

Sara Williams

Deputy Chief Executive, Staffordshire Chambers of Commerce

Thomas Busby

Mike Cole

Fruit farmer

Head of Public Affairs, Michelin

Sarah Robinson

Principal, Stoke College

Members heard how the farming industry had changed the Seasonal Agricultural Worker (SAW) system had been in place. Polytunnels have helped local farms extend the soft fruit production up to nine months. Consequently, the number of months a year they needed labour had grown. Fruit farmer paid over £7 an hour, which could be improved depending on the productivity, but they found it difficult to recruit local workers. The businesses would not be viable without access to EU workers.

Other employers said factories in Stoke offered £8–£9 an hour and could not recruit local labour. Immigrants, some over qualified, had shown a willingness to take the jobs. They now were looking for better jobs.

Participants discussed how the Common Energy Market and EU Emissions Trading Scheme (EU ETS) could be improved. It was suggested that Brexit was an opportunity for the manner in which climate change targets can be met. Members heard that incentives for hitting targets must change. There need to be more positive incentives to invest in energy efficient and low carbon technologies, for example through the tax code. As an energy-intensive sector, it was noted that the ceramics sector was already becoming more energy efficient in order to reduce bills. They complained that they were being penalised for this under the EU ETS scheme, while Climate Change Agreements were more effective at delivering climate ambition, whilst preserving competitiveness.

Ceramics industry is a high energy user. They wanted secure and affordable access to electricity and gas from the continent, and to know if the UK would still be involved in the single energy market. They did have the ear of Government on energy through the Department for Business, Energy and Industrial Strategy.

It was noted that 14% of business in Stoke-on-Trent export, compared to a national average of 11%. Members of the Staffordshire Chambers of Commerce are buoyant and positive about Brexit as few are exporters.

However, for the ceramics sector a large proportion of stock is exported, with 50% of exports sold in the EU. Therefore a UK–EU FTA is vital for those businesses. The ceramics sector’s second largest export market is the US, where manufacturing in ceramics is very small and therefore an FTA with the US would be welcomed. Members heard that the article 50 discussions would need to secure transition arrangements for certain EU measures, such as anti-dumping, to maintain a level-playing field with China.

Businesses wanted clarity over if the UK would remain in the customs union as soon as possible, so they could plan for the possible tariff rates and the extra administration. Uncertainty about possibility of delays at the border, especially for time sensitive products, and asked if UK ports had the capacity to process more items needing checks. Big businesses would have IT systems to help them manage, SMEs would need more help. The bigger the changes from the status quo, the more need for a transition period.

Johnsons Tiles told the Committee that the single biggest change since the referendum had been the fall in the value of the pound, which had led to rises in domestic costs. It was noted that they had had to delay purchasing new equipment as a result. SMEs had raised concerns about currency fluctuations and the difficulty of managing unstable prices. Many SMEs did not see themselves as exporters but they inputted to a supply chain that led to an exporter.

Michelin facility exported millions of tyres a year, 90% to non UK market, including 80% to Europe. Also imported several million tyres for sale in UK market. Barriers either way which increased costs or delays would be difficult. Further, while they had three sites in the UK, they had 30 sites across Europe so they had options where to produce tyres and investment tended to go to competitive sites.

The Chambers of Commerce said they were exploring how EU structural funding had been used in the region, so they could make the case for what replaces it.

3 April 2017