The Chemical Industries Association (CIA) has called on the Government to go much further in tackling the competitive pressures facing UK chemical manufacturers, warning that measures to ease household energy bills must be matched by a clear plan to restore industrial competitiveness, attract investment and protect strategically important domestic production.

 

Steve Elliott, Chief Executive of the Chemical Industries Association, said:

“Helping households with the cost of living is important, and we recognise the pressures facing the Chancellor. But Britain also needs to address the cost of making things here.

“Chemical manufacturing is fundamental to the UK economy. Our industry supplies the materials and ingredients needed by pharmaceuticals, food production, construction, defence, advanced manufacturing and clean energy. When domestic chemical production declines, the consequences reach far beyond our own sector.

“The Government must move from recognising the strategic importance of chemicals to urgently delivering the practical measures that will secure its future. Businesses need internationally competitive energy costs, confidence to invest, effective infrastructure and a tax and regulatory framework that rewards production and innovation in Britain.

“Several of today’s measures are good news. The increase in the trading allowance, a new Founders Relief, reforms to support highly skilled workers, investment through the National Wealth Fund and British Business Bank, backing for major infrastructure projects and AI, and the reconfirmation of the previously announced British Industrial Competitiveness Scheme are all positive steps.

“I am pleased by the commitment to cut electricity bills by up to 25% from April 2026 and by proposals aimed at delivering cheaper, faster grid connections. The new Cost Control Framework also sounds positive and I am keen for the Government to engage with chemical businesses on how these measures can best support energy-intensive industries.

“The £350 million Critical Chemicals Resilience Fund was, as we have said since its announcement last May, an important recognition of the challenges facing our industry. The next step must be a wider programme that strengthens competitiveness, attracts new investment and supports the long-term renewal of UK manufacturing.”

“Britain cannot deliver a stronger manufacturing economy if the industries supplying its essential materials are unable to compete and invest. I just hope we have not left it too late.

“The test of this Budget will be whether it helps create the conditions for businesses to commit capital, modernise plants, develop new technologies and maintain production in the UK or whether it is another missed opportunity to tackle U.K. manufacturing costs and competitiveness in a meaningful way

“We want to work with the Government to turn its ambitions for growth and national resilience into a practical programme of industrial renewal. The UK chemical industry has the capability, expertise and willingness to invest. What it needs is a competitive environment in which that investment can succeed.”

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