In a year-end letter to members, Steve Elliott, Chief Executive of the Chemical Industries Association, set out his review of 2018 and the sector’s priorities for 2019. The sector is the UK’s biggest manufacturing exporter.
On 2018, Steve said:
“We have as a sector, like others, been gripped by Brexit. The final outcome is critical to the continued success of the chemical industry in the UK. The country needs to get this right - not just for the sake of our industry but also for the wider business community and the UK’s future economic prosperity.
“Stepping back, we have two positive points to take from Brexit developments so far. First, the importance of the industry to the wider economy, to people’s jobs and to society’s everyday needs, has, I believe, never been better understood by officials and politicians than it is today. Second, there has remained complete unanimity between the UK chemical industry and the EU27 chemical industry in focusing on our key desired outcomes from the negotiations – namely, minimal disruption to our trade and investment through frictionless free trade, regulatory consistency and continued access to skilled people.
“The chemical sector has worked hard during the year in continuing to meet the demands of customers, shareholders and wider environmental responsibilities including employment in some of the UK’s regions where it is most needed.
“Many investment decisions have held up, but there is no doubt that a Brexit deal - with a minimum 18 month “no change” transition period - is urgently needed if significant long-term commitments to the UK are to be made.
“Despite the dominance of Brexit, we have not lost sight of our wider responsibilities. The progress made on issues like health & safety, the environment, employment, trade and chemicals policy has been positive but there is still much more to do – especially with regard to energy and climate change costs, where UK chemical businesses continue to face electricity costs that are anything between 50% and 80% higher than those paid by their EU27 counterparts, let alone the more competitive prices paid by chemical companies in other parts of the world.
“Away from the policy agenda, the rebranding of our Chemistry Growth Partnership with Government to the new Chemistry Council, and our new strategy “Sustainable Innovation for a better world” offers optimism as we end the year.
“We also launched Solutions for our future – a film that showcases the chemical industry and the contribution we make to everyone’s lives.
On 2019 Steve said:
“While 2018 has produced some successes, the hard work will continue. To maintain and grow investment in the UK we need to further improve the overall framework in which we operate. UK chemical businesses are not looking for a weaker regulatory regime; indeed, we have spent most of the past year arguing for the maintenance of a robust one, with a continued commitment to REACH at its heart. However, companies do have choices in terms of future investment, so we need that Brexit clarity as soon as possible. The Brexit deal agreed between the Prime Minister and the EU offered most of what our industry is seeking but we now need to make sure there is an agreement that can be supported by the UK Parliament and, from the 2nd January, CIA will be redoubling its efforts to make sure a positive outcome is secured.
“I hope and believe we will get a Brexit deal in time for our 29th March departure date - either by some changes to what has currently been agreed or by Parliamentarians on all sides being clear on the hugely negative consequences of the UK departing without one and acting accordingly to avoid such an outcome”.
“While I suspect Brexit will be our number one topic at least for the start of 2019, I want to ensure we get everything else in as good a position as possible for the future
On energy, he said:
“We have to get this right. If costs are not lower then more decisions will be made to invest outside of the UK, regardless of what happens with Brexit. For far too long, UK chemical businesses have been paying significantly over the odds for their power – and to some extent their gas – and now also face the prospect of higher electricity transmission costs. If our government is serious about strengthening manufacturing in the UK and if it is serious about delivering an effective long term industrial strategy , then it must act now to address the competitive mis-match we face with the rest of Europe, let alone the likes of the US and the middle east.
On chemicals policy, he said:
“We want our Government to remain a part of the EU Chemicals Agency and for the UK industry to stay connected to the EU REACH regime - a position supported by the Prime Minister and her Cabinet and an intent referenced in the agreed Political Declaration under Brexit. What we don’t want is the prospect of paying again for all our sunk REACH registration costs in the event of “no deal” – hundreds of millions of pounds for a UK REACH alternative that will offer absolutely zero additional benefit to our health or environment.
On safety and security, Steve said:
“So far relatively unaffected by Brexit, our safety and security work continues to attract international acclaim. Not for one minute will we be complacent on either of these issues; they are at the top of the agenda of our companies as we seek continuous improvement. Central to this work will be striking the right balance with regard to our responsibilities as a sector now falling under the Government’s critical national infrastructure. 2019 also marks the 30th anniversary of Responsible Care in the UK and we will be building on the high standards we have developed to ensure the next 30 years show an even more responsible approach.
On education and skills, he said:
“We have very little time to get industry and education properly working together on answering the challenges of the UK having a skilled workforce for the future and a fully functioning education sector that gives opportunities for everyone. We need to better prepare and then support people as they enter the workplace. Our careers advice has long been questioned, as have the opportunities to interact with work while in education. At the same time we in industry need to play our part - building on some excellent outreach programmes to ensure the STEM opportunities are available to all. We will also work to further transform the Apprenticeship Levy so it works for industry, for Government and, most importantly, for apprentices themselves.
On innovation and sustainable development, he said:
“Sustainable innovation for a better world shows how the UK can accelerate a ‘Create and Make’ culture. Creating world class innovation and making the next generation of products and solutions. In the not too distant future, products that respond to the sustainability challenge will be the preferred solutions for all, representing a golden opportunity for our sector. We will better commercialise our sector’s innovation, reinforce our supply chains and develop our regional presence and infrastructure to strengthen the UK economy and deliver benefits for society. Chemical businesses – through their products, solutions and their brains – are essential to the delivery of this and in 2019 we will show real progress, working to deliver an exciting sector deal in partnership with Government.
NOTESFor further information, please contact Simon Marsh on 07951 389197 or [email protected].
- The chemical and pharmaceutical industry adds £18 billion of value to the UK economy every year from total annual turnover of £50 billion.
- In addition to gross value added, the sector also contributes to the UK economy in its position at the head of many supply chains within manufacturing and its employment of a well remunerated, high-skilled workforce. We support 500,000 jobs both directly and indirectly Chemical manufacturing adds £9 billion in gross value added annually and pharmaceutical manufacturing £9 billion.
- The wider chemical and pharmaceutical sector (manufacturing plus distribution) is the largest exporter of manufactured goods with annual exports of over £50 billion. The export of motor vehicle, trailers and semi-trailers is the sector with next highest exports of £35 billion. Aerospace is £32 billion.
- 63% of companies in the sector export what they make to the world, the highest proportion of any goods manufacturing sector in the UK economy. 60% of our exports go to the European Union and 75% of our imports and raw materials come from the European Union.
- The sector’s level of business investment is £4.3 billion, compared to automotive £2.7 billion and aerospace £2.1 billion, while the expenditure on research & development is £5.0 billion (automotive £2.7 billion and aerospace £2.1 billion).
- The products and technologies of the Chemical industry are essential parts of medicines, food & drink, telecommunications, energy-saving, I.T, clothing and much more.
- For every tonne of Greenhouse Gas (GHG) emitted, our products and technologies enable over 2 tonnes of GHG emissions savings.