Speaking immediately after the Chancellor’s 2018 Budget Statement to Parliament, the Country’s top manufacturing exporter has welcomed key announcements supporting manufacturing investment, but expressed concern over the complete absence of any explicit signal of support for businesses facing long-standing and increasingly uncompetitive energy costs.
The Chemical Industries Association (CIA) calls for an increase in the annual investment allowance threshold, from £200,000 to £1 million, and no adverse change to Corporation Tax have both been positively responded to in today’s speech by the Chancellor – and the apprenticeship levy relief to SMEs is also good news. However, nothing in today’s statement did anything to suggest that foundation industries concerns over UK gas and power costs have been addressed.
Steve Elliott, Chief Executive of CIA, said “The Government has gone some way to recognise the way in which business can support the needs of the country by increasing the annual investment allowance threshold to £1 million and remaining committed to its 2020 ambition to reduce Corporation Tax to 17%. The issue of plastics tax is something we need to consider carefully and I fully appreciate the concerns around the use and disposal of plastics. We believe reform of the Packaging Recovery Notice system would deliver a better environmental performance. However, I am extremely concerned – and surprised – that the Chancellor failed to mention the extent to which chemical businesses are facing crippling energy costs - a key issue for the many sectors who will drive the industrial strategy”.
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- 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.