UK pledges £120m for ceramics, but gas-price gap remains

The UK government on 21 May 2026 committed £120 million to support the country's beleaguered ceramics industry, the most substantial sector-specific intervention since gas prices spiked after Russia's 2022 invasion of Ukraine. The funding is split evenly between £60 million in capital grants for energy efficiency and decarbonisation equipment and £60 million to ease operational costs, according to the BBC. Eligible manufacturers across refractory products, clay building materials, household ceramics and technical ceramics will be able to apply when the scheme opens later this summer.

The ceramics money sits inside a wider £470 million package that also includes a £350 million Critical Chemicals Resilience Fund, the Department for Business and Trade confirmed. Chancellor Rachel Reeves announced the funding alongside Business Secretary Peter Kyle.

"The chemicals and ceramics industries underpin our economic resilience and support skilled jobs across the UK," Reeves said. She added a pointed nod to the most prominent recent casualty: "We are backing UK ceramics. We want to find a future for Denby."

A turning point, with caveats

For the sector's lead trade body, the announcement closes out a frantic spring of lobbying that drew in MPs, the GMB union and a Denby Pottery public petition that surpassed 38,500 signatures. Ceramics UK chief executive Rob Flello called the decision "a turning point" and confirmed his organisation has been asked to work with civil servants on scheme design.

Flello told Yahoo Finance the package was "a fantastic recognition of the importance of the UK ceramics industry," and told Business Matters he couldn't "wait to get sleeves rolled up and work out how we're going to spend it."

Manufacturers were broadly positive but measured. Iain Martin, chief executive of Emma Bridgewater, who has said his business absorbed a £1.4 million loss against soaring input costs, called it "a very welcome support from the government, which I think the whole industry will be very pleased with."

The gas problem the money doesn't solve

The structural issue at the heart of the sector's distress is gas pricing, and £120 million does not fix it. Ceramic kilns must be held above 1,000°C for extended periods, and gas accounts for roughly 90% of the energy consumed in production. That makes previous interventions aimed at electricity bills largely beside the point.

The industry felt that mismatch sharply in April 2026, when the government's British Industrial Competitiveness Scheme, designed to cut electricity bills for 10,000 energy-intensive firms, excluded most ceramic manufacturers. The exclusion triggered the petition campaign and intensified pressure from Stoke-on-Trent Central MP Gareth Snell, who chairs the All-Party Parliamentary Group on Ceramics.

Listed homewares group Portmeirion, whose brands include Spode and Royal Worcester, signalled the scale of the underlying cost problem in a regulatory statement welcoming the package. The company's UK energy costs in FY25 totalled approximately £2.8 million, against a workforce of 660, including 433 in Stoke-on-Trent. Capital grants will help, but only firms that survive the next gas-price cycle will get to spend them.

Too late for some

The timing question hangs over the announcement. Royal Stafford has collapsed. Moorcroft survived only after a rescue by the founder's grandson in 2025. Denby Pottery entered administration earlier this year, citing rising energy and labour costs, and ceased manufacturing in April with the loss of more than 100 jobs.

Research commissioned by Stoke-on-Trent City Council and carried out by KADA and Ortus Economic Research found the number of ceramics firms in North Staffordshire fell from 137 in 2018 to 123 in 2024. Council leader Cllr Jane Ashworth, presenting the report alongside a cross-party call for action, said: "This report makes clear that ceramics isn't just part of our past, but our future, too."

The dual-track sector

That future is not only tableware. The same KADA/Ortus research found supply-chain turnover in advanced and technical ceramics, sanitaryware and refractory products grew 35% between 2018 and 2024, driven by demand from aerospace, defence, medical implants, clean energy and electronics.

That split matters for how the £120 million is spent. A scheme weighted toward capital decarbonisation grants could disproportionately benefit larger technical-ceramics manufacturers with the balance sheets to co-invest, while the operational-cost tranche is likely to be more decisive for smaller heritage tableware firms running on thin margins. Ceramics UK's role in scheme design will shape that balance.

In the chemicals sector, which received the larger slice of the £470 million envelope, Chemical Industries Association chief executive Steve Elliott called the package "a very welcome first step," language that echoed the cautious tone from ceramics manufacturers. Applications open later this summer. The harder conversation, about how the UK prices industrial gas relative to European competitors, has only been deferred.