Chemicals sector is our foundations

FOR the first time in my life, economists are stating that manufacturers will lead the UK out of recession.

FOR the first time in my life, economists are stating that manufacturers will lead the UK out of recession.

This is strong positioning for the North East – a region built on engineering and industrial strength. However, the broad term manufacturing fails to recognise many hidden strengths of the UK economy, some of which are significantly threatened by current Government action.

The role of the chemicals industry is still under-recognised. Chemicals industries provide the materials for all the products we use and underpin some £880bn of UK economic activity. They are the hidden part of the UK’s industry iceberg and, as the UK looks to rebalance its economy, it must ensure we capture the whole value chain and not simply become an “assembly economy”.

Particularly as these businesses are innovators. They invent the materials and processes which are then converted into practical products. The Government needs to recognise the critical role played by this industry and the impact losing these companies would have on a wide range of sectors such as automotive, aerospace, construction and defence.

Furthermore, we need to recognise the impact that losing key parts of the UK’s competency would have on our future ability to innovate new products and processes. Without the core inherent chemicals competency base, the UK will not be able to produce new technologies.

As major manufacturers with a significant global footprint, chemical industries are targeted by global and domestic energy and climate change measures. The industry recognises its responsibility to play its part in increasing energy efficiency and climate change adaptation, and has made major advances in the design and running of chemical manufacturing plants in recent years.

Regulated by a wide variety of EU measures, in particular the Industrial Emissions Directive, today, most large chemical-using factories emit little by way of pollutant gases or liquid effluents. In fact, for every one unit of CO2 emitted, the products made by the industry enable a CO2 saving of twice as much. The UK Government must recognise the cost impact of its policies on energy intensive industries in the UK and develop a strategy to support the industry. Inappropriate legislation undermines efforts to attract investment in the Uk and increases the potential for carbon leakage abroad.

CBI will be working with the chemical industry across Government departments to highlight the critical role this sector plays in the UK value chain.

:: Sarah Green is regional director of CBI North East

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