Britain’s chemical industry fuelling UK growth

The next government of the United Kingdom faces a huge challenge in delivering prosperity for all parts of the country. It will be judged over many issues but its performance with regard to economic growth, environmental progress and social inclusion will ultimately determine success or failure. The good news, in addressing that three-pillared agenda, is that any new government will not be alone in facing up to the challenge. Partnership with business and, in our view, partnership with a vibrant advanced manufacturing sector, delivering innovative clean technology solutions and jobs, will be essential for a resilient, sustainable and inclusive economic future.

As a key building block of the economy, we also believe that the UK chemical industry should be at the heart of that economic, environmental and social ambition. Our starting point is a strong one – the sector is the country’s largest manufacturing exporter; it has already reduced emissions by 80% over the past 30 years and thousands of highly skilled and well-rewarded jobs are located in parts of the country that really need them. Chemical businesses have also demonstrated their criticality to the country and society at times of national need – providing essential solutions such as hand sanitisers and COVID vaccine ingredients to help tackle the pandemic. In short, it is our view that every modern economy needs a chemical industry.

However, the clock is ticking if the UK is to secure its place as an attractive and competitive location for the investments and jobs of the future. The past five years has seen a significant fall in the nation’s year to year “flow” of inward investment, and other parts of the world – most notably the US, the EU and China – are moving decisively, through funding and policy stability around clean technology and infrastructure, to win that international capital. There is still time, and the autumn 2023 package of support to incentivise advanced manufacturing is a very welcome development, but so much more needs to be done – and urgently – if we are to arrest that fall down the investment league table.

To help inform and support the next government’s agenda for growth and prosperity, we are proposing a number of recommendations. Chief amongst these are a commitment to a long term industrial strategy, with chemical businesses at its heart, and a stable UK policy environment. That long-term partnership and predictability of policy will help boost investor confidence, as will a focus on our other priorities, including the need for us to bridge the gap between innovation and manufacture and to finally address the long-standing lack of competitiveness of UK industrial energy costs. The cost of energy – both current and future sources – will be a critical factor in the country’s ability to meet its net zero commitments, so we urge the next government to provide a policy and funding climate that will ensure a challenging but achievable net zero transition. As UK manufacturing’s leading exporter, the chemical sector has a keen interest in informing the country’s free trade agreement negotiations and, as we move to address those more ambitious deals such as India, the US and, of course further progress opposite the EU, we simply ask that we are able to play as early and as full a part as possible in those negotiations. Finally, there isn’t an organisation in the land that isn’t struggling to meet its skills and labour challenges. With that in mind, our final proposal is that we commit to a UK education and visa system that provides people for industry – both in the short and long-term.

Whoever wins the next general election will find an engaged and committed UK chemicals sector. Beyond the fine words, that government will also find that chemical businesses throughout the land stand ready to provide those much-needed economic, environmental and social solutions. It’s what we do, and we can do so much more given the right policy and funding landscape.