Brexit: Chemical makers fearful, Ratcliffe slams industrial demise

London –  UK chemical makers are fearful about the impact of Brexit over the next few years, according to a survey of delegates at a Chemical Industries Association (CIA) conference about the impact of the UK’s departure from the EU on the industry.

Half of all delegates surveyed at the CIA conference, held 17 Nov in London, said they expected the UK’s departure from the EU to have a negative impact on the chemicals sector over the next five years.

In the straw e-poll of 124 industry leaders and government civil servants another 29% expected Brexit to make no difference while the remaining 21% foresaw benefits for chemicals manufacturers.

In reply to a separate question about their feelings on the likely outcome coming UK-EU Brexit negotiations, 56% pressed the pessimistic ‘button’, compared to 44% who were optimistic.

When asked to choose from a list of UK government’s priorities when negotiating departure, an overwhelming majority (60%) said the UK government must strive to maintain free trade with the EU. This far outweighed other suggested priorities such as access to skills and the burden of EU regulations.

In a keynote address to the CIA conference, Ineos chairman and CEO Jim Ratcliffe paralleled the referendum vote to the UK’s industrial demise, particularly in the north of England.

Manufacturing industry, said Ratcliffe, represents around just 9% of the UK’s GDP today, compared to 23% 20 years ago. In that timescale, he added, 20 chemicals plants had closed in the UK, while there had been no new-builds.

This was in contrast to Germany where manufacturing had maintained a strong component of the economy – contributing up to 24% of GDP – and the US, which in recent years had invest $140 billion on the back of its shale-gas revolution.

“UK manufacturing has completely collapsed,” said the Ineos boss, noting that this “deindustrialisation” had hit the north of England – where people had mostly voted for Brexit – particularly hard.

Ratcliffe likened the plight of northern industrial towns in this region to those in the ‘rust belt’ of the US and contrasted their fate to the continuing prosperity of areas like Chelsea and Kensington in London, “where the government lives.”

“I think the decline in manufacturing is very important, especially for the north of England, and we should stop it,” said the keynote speaker, pointing to the need to stimulate industrial investment in the country.

However, as a result of “messing around” by successive governments, Ratcliffe said the UK lacked a USP for attracting investors in terms of skills, industrial relations and most importantly energy costs, which he said were among the highest in the world.

Ratcliffe further emphasised the need for government support, noting that UK ministers only rarely meet with industrial leaders, but will have lunch once a month with people from the financial sector.