British Ceramic Confederation calls for safeguards on UK gas supply

The British Ceramic Confederation, which represents leading UK ceramic tableware manufacturers, is calling for urgent Government intervention to protect industry from gas shortages.

It is warning that UK supplies of gas have been running perilously low and that the consequences of this are harming firms and stifling employment.

Rules governing procedures in the event of chronic shortage state that manufacturers that rely on gas for production would have to shut down at very short notice.

Currently, sites are exempt from shutdown if the potential damage to factory equipment from gas supply interruption is more than £50m. Domestic consumers are protected by separate rules.

"The Department of Energy and Climate Change (DECC) has to bring down the £50m damage threshold before it's too late. Too many vital industries are excluded by the existing levels.

"In addition, there needs to be some mechanism that allows phased shutdowns of plant such as large tunnel kilns. Just flicking the switch on these could cause very serious damage."

During March, gas prices varied between 75p per therm and £1.50 per therm as a result of concerns over supply - in particular, when an interconnector at the Bacton gas terminal in Norfolk failed.

DECC is reviewing whether it needs to intervene in the UK gas market and, if so, what form that intervention should take. A decision is expected this month.

Dr Adam Marshall, director of policy and external affairs at the British Chambers of Commerce, said: "Large-scale investment in plant is often dependent on stability and having confidence in the future. How can these industries be expected to create jobs and wealth if there are serious concerns about the fuel on which they depend?

"The Government has to work with suppliers to come up with a way of protecting provision and ironing out damaging price volatility. Significant investment in storage has to be investigated as a matter of urgency."

The TUC backed the calls of the British Chambers of Commerce and the British Ceramic Confederation.

Nicola Smith, head of economics and social affairs at the TUC, said: "The Government has to step in to reduce the damage threshold and minimise price volatility.

"Uncertainty over gas supplies hampers employment at a time when we need every job we can get. If the politicians are serious about rebalancing the economy, then they need to pay more than just lip service to industry.

"Thousands of manufacturers are dependent on gas, so supply interruptions could have a really significant effect on businesses and jobs."