UK industry ‘disappointed’ by Brexit vote

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A crushing defeat for UK prime minister Theresa May who failed to win parliamentary approval for her Brexit deal on 15 Jan, has raised disappointment within the chemicals industry.

In comments on 16 Jan, Steve Elliott, chief executive of the Chemical Industries Association (CIA), noted there was “of course general business disappointment” with the current position.

“We continue to lack the certainty that business has called for since the day after the 2016 referendum, in order that investment decisions can be made,” he went on to say.

In response to what he described as “part of a democracy”, Elliott said the CIA would continue to “advise of the consequences”, adding that these are becoming more critical in terms of contingency plans and actions.

“Every delay risks either no decision on UK investment, trade and jobs or, worse than that, irreversible decisions,” he warned.

The official called on all the MPs to work together to identify common ground and the basis of a “plan B” in order to secure a deal by the close of business on Monday,  21 Jan, the date by which a new plan must be agreed with Europe and presented to UK lawmakers.

“In the chemical sector… we continue to call for minimal disruption. The whole industry is seeking frictionless free trade, regulatory consistency and access to skilled people,” Elliot added.

In the days leading up to the vote, the British Plastics Federation (BPF) also expressed its concern that a ‘no deal’ scenario would have negative impacts on the plastics sector, which is the country’s third largest employer within the manufacturing industry.

In a BPF survey conducted in December last year, and participated in by 100 companies, two-thirds of respondents said they did not expect Brexit to benefit their business. Only 7% of respondents expected Brexit to be beneficial.

Some 76% of respondents stated that a no-deal Brexit would have a “negative” or “very negative” impact on their business and 53% are making contingency plans in case it occurs.

Additionally, 63% of plastics companies are expecting Brexit to cause “significant disruption” to their supply chain, while 17% believe it will not.

The survey also highlighted the following as issues that companies are “concerned” or “very concerned” about:

• Customs and border delays (88%)
• Material supply (78%)
• Tariffs (77%)

• Regulation (66%)
• Labour (54%)

The survey also found that 21% of plastics companies have lost staff due to Brexit, mostly from non-management, technical and shop floor roles. One-quarter of companies believe Brexit has made recruiting more difficult.

“Brexit remains a deeply divisive issue to this day. But this data shows our industry would clearly prefer to stick with EU regulations and indicates that the benefits of Brexit – from a plastics manufacturer’s or recycler’s perspective – are hard to see at this point in time,” said president of the BPF’s Brexit taskforce Mike Boswell.

Another strong reaction was by the German machinery trade association VDMA, which called the MPs’ rejection of the deal “simply irresponsible”.

In a statement on 16 Jan, VDMA president Carl Martin Welcker said the House of Commons had “missed an opportunity” to avert a hard Brexit and to “lay the foundations for a close relationship with the EU.”

“It is simply irresponsible that the British government coalition is still fighting for a unified position ten weeks before the resignation date,” he added.

The UK is set to exit the European Union on 29 March. Theresa May is yet to secure a deal with the EU on the terms of its departure or otherwise face a so-called no-deal Brexit, which can disrupt trade and freedom of movement between the two sides.

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