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The chemical and pharmaceutical industry is fundamental to modern society. With an immense variety of products, from vital medicines and foods, the construction of buildings, to transport and leisure, the industry truly does have an impact on virtually every aspect of our daily lives.
The Chemical Industries Association reacts to the Chancellor’s 2024 Budget
2024-10-30T17:01:00+00:00
Following Labour’s first budget in over 14 years, unveiled by Chancellor Rachel Reeves today, the Chemical Industries Association (CIA) has welcomed key elements of the Chancellor’s 2024 Budget, recognising positive developments for the chemical sector in areas such as industrial strategy, net zero growth, investment in skills, and innovation. CIA Chief Executive Steve Elliott commended the support for aerospace, automotive and life sciences as key advanced manufacturing sectors linked closely to chemical businesses.
Responding to the Budget statement:
Steve Elliott, Chief Executive of the Chemical Industries Association said “This is a Budget with many positive points for chemical manufacturers, answering a number of our calls in announcing or reconfirming action in four key areas - industrial strategy, net zero growth, investment in people and fostering innovation. I am also particularly pleased to see support for aerospace, automotive and life sciences as key advanced manufacturing and customer industries for chemical businesses”
On Industrial Strategy, the Association’s Head of Economics Michela Borra said “The commitment to delivering something that is long overdue for our country is welcome. We are pleased to see increases in investment after the UK has been in the bottom of the G7 for investment as a share of GDP for 24 of the past 30 years - but we must recognise that today’s higher spending commitments from the Chancellor come off the back of a change in debt rules”.
Commenting on the detailed changes to energy and environment, Policy Director Nishma Patel said “The £2bn over 5 years for zero emission vehicles and its supply chains will be good news for a number of chemical businesses who deliver battery and other key advanced materials. So too is the continued support for Energy Intensive Industries through around £350 million relief from indirect carbon costs passed through on industrial energy bills across 2024-25 and 2025-26, albeit the original tax is no longer necessary. Confirmation of the £163 million to continue the Industrial Energy Transformation Fund over 2025-26 to 2027-28 is also welcome. The hoped-for benefits from funding Carbon Capture and Storage and the 11 green hydrogen plants is going to help. Of great importance to our sector is being able to use a mass balance approach for chemically recycled plastic – it’s the right decision and something we have been urging Government to do for a long time.
On reforming and expanding the Office for Investment, Ian Cranshaw Head of International Trade said “We are now getting some certainty and I hope stability in an approach to investment and clarity on where responsibility sits. We welcome the funding for the Investment Zones and Freeports programmes, but they will need to appeal to business decision-makers, and at the moment that is not happening”
Steve Elliott concluded: “Capital intensive sectors such as chemicals will welcome this Government’s commitment to longer term policy stability – be it through its industrial strategy; its corporation tax roadmap or its full expensing regime to encourage investment in plant and equipment. That’s great, but it’s now all about delivery as the UK and wider Europe has become increasingly unattractive to global investors in manufacturing. Urgent action – and in many cases partnership between industry and Government - is required if UK chemical businesses are to boost their already significant contributions to the macro-economy; strengthen their resilience in supporting the nation’s critical infrastructure and enable the country’s transition to a net zero future. Let’s get on with it!”
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 manifesto sets out a series of offers and asks for the Government.
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 most important 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.
The Chemical Industries Association (CIA) is delighted to introduce the Sustainable Health Metrics Tool, a practical new resource designed to help companies create healthier and more supportive workplaces. The tool was launched at the CIA’s Health Leadership Workshop event in Leeds, featuring guest speakers and interactive sessions on key workplace ...
