Politics’ uncertain gains

31 Jul 2017

Uncertainty is perhaps the only thing we can be certain of in the political arena these days, after the image of a sweeping Tory majority evaporated days before the general election result, leaving a precariously hung parliament

Bad for Brexit and likewise for the process industries? At the risk of sounding Pollyanna-ish: not necessarily.

The advantage of a more substantial government majority had been that it offered the prospect of reducing the influence of the hard Brexit sentiments from the Conservative back benches.

The actual result has been a soft Brexit majority in the Commons underpinned by MPs who do not accept the government whip and an executive dependent on negotiating support in Westminster and Brussels. Whatever develops now, the uncompromising stance that threatened to undermine much of the business created by the UK process sectors is a thing of the past.

Just as well, for even the gentlest form of Brexit will create serious challenges in the short and mid-term: contraction of existing markets and transition in order to compete in new ones.

For any business, sector or industry, competitiveness depends upon an ability to grow profits and reduce cost. Where profit is concerned, the immediate worry may be about maintaining rather than growing.

Cost reductions can focus on many aspects, but few are so important in the process sectors as the control of energy supply.

The elephant in the room here is the availability of UK shale gas. As our cover feature asserts, the bar to action is political and fed by justifiable public concern.

Future circumstances will dilute some opposition, but it is up to industry to quantify the benefits in terms of jobs, growth, investment and bills for the public rather than shareholders.