Stort Chemicals managing director Richard Gilkes on the Brexit issues facing the UK chemicals industry
We have heard a lot in the news recently about the merits or otherwise of 'regulatory divergence' from the EU following the Brexit transition period. It is clear from the noises emanating from the Government 'big guns' that this will be a key UK stance during the forthcoming negotiations, writes Stort Chemicals managing director Richard Gilkes.
It is worth considering what this actually means in reality for an industry close to my heart and one of the major manufacturing industries in the UK, employing more than 100,000 people and generating over £30 billion of exports, the majority to the EU. An industry which is often maligned but which is critical to the health and future prosperity of the UK – the chemicals industry.
Chemicals are found in almost everything we see and touch in our everyday lives. From paints on our walls and on our cars to inks on our food packaging and the magazines we read, the perfumes and hand creams we put on our skin.
It is obviously important that they are safe for use. As part of the EU, chemicals entering the UK market, either by manufacture or import, have been subject to a regulation called REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) since 2007. This is possibly the strictest regulatory regime for chemicals in the world and has ensured that chemicals used and made in the UK are fit and safe for use. Millions of euros (and pounds) have been invested by the chemical industry to ensure the products that we use every day in the UK will not harm us.
However, there is a real possibility that the mantra of 'regulatory divergence' will mean that we will be forced to leave EU REACH in January 2021 and a parallel regime called, imaginatively, UK REACH will commence where all chemicals placed on the UK market – again either manufactured or imported – will need to be registered, irrespective of whether they are already registered under EU REACH. Massive duplication of cost, mostly borne by UK companies, and, more tragically, of animal testing will be the inevitable result.
Equally inevitably, thousands of key raw materials for the products we all buy every day will disappear from the UK market as suppliers and importers make the commercial decision that the cost of registration will outweigh the money to be made by making or importing the product. These are products which will still be freely available to EU manufacturers and consumers – we may have to jump on the Eurostar to buy that particular shade of paint or brand of sun cream that has previously been on the shelves of our local shop!
It is not too late, however. We are fortunate to have an enlightened local MP in Julie Marson who realises the importance of avoiding 'divergence for divergence sake' and of ensuring that the opportunities which may result from Brexit are managed in a sensible and rational way for all. She was able to arrange a meeting recently with a senior minister in Whitehall responsible for post-Brexit regulation with myself and my fellow Bishop's Stortford-based chemical industry business owner Dr Neville Prior, the chairman of Cornelius Group.
The Government seems willing to listen to the concerns of the chemical industry and to help us all find a way to reduce the duplications of cost and animal testing under a new regime. Let's hope it is not just listening but acting too.