Reacting to the Chancellor’s Budget Statement, the chemical sector has breathed a sigh of relief on some key regulatory measures.

Steve Elliott Chief Executive of the Chemical Industries Association commented “The Chancellor’s financial room for manoeuvre was obviously limited, so it’s a relief to see that some progress has been made on minimising additional cost to UK chemical businesses. In particular, the reversal of Treasury thinking on the revision of the landfill tax – retaining the standard and lower rates rather than combining at the higher level – exempting green hydrogen from the climate change levy and certainty around the plastic packaging tax are all helpful decisions.

There are also supportive moves on increasing apprenticeship places and funding, but we are still stuck with an intransigent levy system that does not allow companies to properly invest in a way they could. Looking to the future, the promise of funding for UKRI and expansion of more support for science is welcome – as long as we see that innovation is turned into manufacturing at scale here in the UK.

Returning to the here and now however, the OBR’s downwards revision of economic growth projections out to 2030 provides a stark illustration of the need for urgent support on the fundamental constraints facing UK chemical companies – namely the cost of energy and carbon. Confirmation that the Government is consulting on wider energy relief under the British Industry Competitiveness Scheme is good news, but many chemical companies need to get through the next 18 months before that becomes meaningful”.

ENDS

For any further information please contact Simon Marsh at MarshS@cia.org.uk, 07951 389197 or Diana Tamayo at TamayoD@cia.org.uk, 07885831615.

  • Businesses who make chemical products and solutions are integral to something like 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.
  • The Association’s Budget Submission sets out 19 asks. You can read it here.
  • 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.
  • Roughly 140 thousand people are employed in the sector and nearly half a million have roles that are dependent on the sector. Chemical workers typically earn around 21% more than other manufacturing industries and almost 27% more than the average worker.
  • From Runcorn to the Humber Bank; from Teesside to Grangemouth, chemical businesses and their employees right across the country are essential to the Government’s levelling-up agenda.
  • We are the country’s second biggest manufacturing exporters, sending goods to the value of more than £60 billion to other countries. The EU represents our biggest market, but we continue to work closely with Government to inform and secure UK trade deals with other key chemical markets such as India and the USA.

 

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