Britain’s biggest manufacturing exporter – the chemical industry - has welcomed many of the measures in the Chancellor’s Budget Statement.
Giving an initial reaction after listening to Rishi Sunak, the Chemical Industries Association (CIA) highlighted areas of opportunity for the UK.
Steve Elliott, Chief Executive of CIA said “From a business perspective and from an industry where plant and machinery investment is critical, the ‘super-deduction’ over the next two years is good news. It is a real chance for companies to invest now and get help with tax bills. I warmly welcome that. As a sector which spends more than £5 billion each year on capital investment this is good news.
He continued “I am also pleased to see a variety of ‘people’ measures that will be central to the UK chemical sector workforce planning. We are one of the most productive of all manufacturing sectors; any success we have is people based. The extension of the apprenticeship hiring incentive is an important signal of support for industries like ours which place so much faith in people at the start of their working life. I am also pleased to see money for the new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector. The other pleasing people measure is the reform of the immigration system and it is something we have long called for, so to make sure our chemical business workplaces can attract the best is good news. Also on people, I am relieved that the furlough scheme is being extended. Whilst not major users of it ourselves, our customer industries such as automotive, aerospace and many others are. This move not only gives them support, but hopefully provides indirect benefit to their chemical suppliers”.
Elliott added ‘‘Many of the Freeport locations announced today are at the heart of where our sector is located, so we welcome the potential tax advantages that chemical companies in the Humber, Liverpool and Teesside regions in particular might benefit from”.
He concluded “While I am happy with this as a start, we urgently need a framework for growth. Recent news that the industrial strategy is coming to an end with its likely replacement by a new Treasury-led growth plan should be confirmed as soon as possible. What we have is a series of individual measures – many of which are welcome – but with little in the way of a joined-up approach that makes engagement easier for business. As a key building block for UK advanced manufacturing, the chemical industry has a critical role to play in the UK addressing net zero, levelling up, becoming a science superpower and winning business around the world. A framework for future innovation and growth would help accelerate that contribution and send a powerful signal to investors around the world that the UK is an increasingly competitive place to do business”.
For further information or the chance to speak to Steve Elliott please call Simon Marsh on 07951 389197
Chemical businesses are located throughout the UK, with many of them clustered together in the North East of England, North West of England and Central Scotland. These factories and laboratories, operated by a highly trained and skilled workforce, make a significant contribution towards the UK’s productivity performance. At a national level, chemical productivity, as measured by GVA per employee, is 82% greater than the manufacturing average and 92% higher than the working economy while in some regions, such as the North West, these figures are significantly higher with chemical productivity in the region being over double that of the manufacturing sector and triple that of the working economy. Nearly half a million people are employed in the sector or have roles that are dependent on the sector. Chemical workers typically earn 35% more than other manufacturing industries and 54% more than the average worker. From Teesside to Grangemouth; from Runcorn to the Humber Bank, chemical businesses and their employees right across the country are essential to the Government’s levelling-up agenda. Businesses who make chemical products and solutions are integral to 96% of all manufactured goods. Whether it is ingredients for food and medicines; paints and coatings for cars and planes or materials for mobile phones and electric vehicle batteries, the Chemical Industry is truly the “industry of industries” – also playing a critical role in the nation’s response to Covid-19 through its supply of hand sanitiser, PPE and vaccine ingredients. It is the Country’s biggest manufacturing exporter, sending goods to the value of more than £57 billion to other countries.