LONDON—United Kingdom 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.
Half of all delegates surveyed at the CIA conference, held Nov. 17 in London, said they expected the U.K.'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 percent expected Brexit to make no difference while the remaining 21 percent foresaw benefits for chemicals manufacturers.
In reply to a separate question about their feelings on the likely outcome coming U.K.-EU Brexit negotiations, 56 percent6 pressed the pessimistic ‘button', compared to 44 percent who were optimistic.
When asked to choose from a list of U.K. government's priorities when negotiating departure, an overwhelming majority (60 percent) said the U.K. 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 U.K.'s industrial demise, particularly in the north of England.
Manufacturing industry, said Ratcliffe, represents around just 9 percent of the U.K.'s GDP today, compared to 23 percent 20 years ago. In that timescale, he added, 20 chemicals plants had closed in the U.K., 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 percent of GDP—and the U.S., which in recent years had invest $140 billion on the back of its shale-gas revolution.
“U.K. manufacturing has completely collapsed,” said the Ineos boss, noting that this “deindustrialization” had hit northern 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 U.S. 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,” Ratcliffe said.
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 emphasized 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.