Vote for chemicals

The chemical sector is a “foundation industry” – without its processes and “building block” products, most of the rest of manufacturing could not take place.

It is at the head of a wide variety of supply chains. The industry is the UK’s top manufacturing exporter – around £50 billion a year.

It also regularly achieves a trade surplus - £3 billion in 2013, while the rest of UK manufacturing had a deficit of almost £90 billion.

Our continent seems obsessed with leading the world on renewable energy, at the expense of German, French or British chemical industry jobs

As we approach a May general election [next year] I would like to highlight those areas where we believe policy and related actions are, more or less, working well and do not need changing, followed by those areas where we still need either acceleration of a change in direction.

Working well

Our industry is export-dependent and is a significant contributor to the UK’s overall balance of trade.

As such, we are pleased with our recognition as a priority sector by UK Trade & Investment (UKTI). We now have more direct financial support for SMEs and we have greater resource in target markets.

For example, in April the first Chemistry Growth Partnership (CGP) trade venture saw 21 companies join the Chemical Industries Association and UKTI on a mission to France, Germany and Switzerland.

Industry now also has access to a £32 million pot to help deliver over 1,300 apprenticeships, 250 traineeships, 150 industry degrees, 230 masters, nearly 6,000 workforce development opportunities and the intent to deliver a cross-sector proposal to attract young people into Science, Technology, Engineering and Maths (STEM) based jobs.

When it comes to innovation, the groundwork has been laid through Innovate UK (formerly the Technology Strategy Board) and the creation of the sector-specific Catapult innovation centres.

The chemicals and chemistry-using sectors are gaining a larger slice of this particular pie, and we look forward to support in the autumn statement for a national formulation centre.

There are positive things happening when it comes to industrial strategy too, with the creation of the CGP leading to a joined-up approach between business, trade unions and government on securing the long-term future [of the industry].

It is early days but there has been some success from the CGP already with budget measures in support of energy-intensive industries, the on-shoring initiatives in the pharmaceutical and agchem sectors, plus the recent investments by Ineos in Grangemouth and SABIC on Teesside.

Needs improvement

When it comes to tackling the challenge of competitive and secure energy supply, some progress has been made on the shale gas front, but not enough from our perspective.

This is a key opportunity for feedstock competitiveness against the rest of Europe and of course the US.

Our continent seems obsessed with leading the world on renewable energy, at the expense of German, French or British chemical industry jobs. I’m told that this winter might see power cuts in Belgium.

It will be interesting to see whether we have any more urgency on the issue of energy when the lights start to go out.

Over the coming five to 10 years, the UK chemicals sector will be facing a potential £1 billion bill to comply with the Industrial Emissions Directive – new capital investment to monitor and control emissions that both industry and regulators question in terms of demonstrable environmental improvement.

In addition, we are also seeing additional measures on the horizon with the introduction of requirements to control emissions from Medium Combustion Plants and through the National Ceilings Emission Directive.

These measures do not talk to one another and, what’s worse, consideration of the competitiveness and jobs impact has been insufficient.

What is needed is a strategic approach to environmental law at EU level, with early engagement by the business and enterprise national ministries and at the Commission – working in partnership with their environment colleagues.

Most significant is Europe’s commercial importance – just over 50% of UK chemical exports go to rest of the EU. Germany is a key trading partner.

The UK must play its part in terms of influencing the industrial policy and regulatory framework – the politics are currently difficult but essential, and the role of civil service crucial in ensuring that we are awake to the urgent supply side threat from the US and the Gulf, and a demand threat from the Far East.

Another area of concern is education. We need an education system that offers young people an understanding of science and clear and informed signposting to career opportunities (whether it be by schools, careers advisors or employers).

This will be greatly assisted by a more proactive engagement campaign by the industry and its stakeholders – demonstrating the exciting and essential role the industry has to play in delivering on the global challenges.

This article based on the speech given by CIA chief executive Steve Elliott at each of the main political parties’ autumn conferences.