The UK’s biggest manufacturing exporter has questioned whether the Chancellor has done enough to retain and grow future industrial investment.
The organisation that represents chemical and pharmaceutical businesses, the Chemical Industries Association, has welcomed the Research and Development spending pledges, but has warned about the failure to link such commitments to manufacturing.
Speaking as the Chancellor finished presenting his Budget to MP’s, the Association’s Chief Executive Steve Elliott said “there are measures that Phillip Hammond has introduced which will please chemical and pharmaceutical companies. The R&D investment (coming on the day when official data shows that annual R&D spending in UK chemical companies increased by 22% to £1 billion, with 85% of that coming from companies themselves, 1% from Government and a significant 14% from overseas), the business rate savings including energy efficiency initiatives and commitment to further discussion on the apprenticeship levy are all steps we have called for and agree with. I also want to praise the Government’s investment in maths and technical education – these important areas will benefit the whole country.
CIA’s Economist Stephen Le Roux said “We are concerned, though, that these measures need to be joined up including incentives to make sure R&D encouragement is linked to manufacturing in the UK and not then transferred to competitor countries. This is especially important for our post-Brexit future”
Steve Elliott added “It is a serious failure that there was no acknowledgement of the spiralling energy costs for manufacturers in the UK. Transforming these costs will see chemical businesses deliver a low carbon future across all sectors.”
Elliott concluded “The industrial strategy white paper (to be published on Monday) we hope will provide more detail on how we create a more competitive industrial economy that continues to attract and grow investment in our future”
• For further information or comment from/interview with Steve Elliott please call Simon Marsh on 07951 389197
• The chemical and pharmaceutical industry adds £18 billion of value to the UK economy every year from total annual turnover of over £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. Chemical manufacturing adds £9 billion in gross value added annually and pharmaceutical manufacturing £9 billion, making the whole combined sector the second largest in the UK – behind food and drink.
• The wider chemical and pharmaceutical sector (manufacturing plus distribution) is the largest exporter of manufactured goods with annual exports of close to £50 billion. The export of motor vehicle, trailers and semi-trailers is the sector with next highest exports of £35 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.