UK Chemical Industry: Regulatory Divergence

Part of the debate – in Westminster Hall at 4:52 pm on 26th February 2020.

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Photo of Dave Doogan Dave Doogan Shadow SNP Spokesperson (Agriculture and Rural Affairs) 4:52 pm, 26th February 2020

The hon. Member is right, and the risk that the United Kingdom runs in seeking to pursue some alternate regulatory framework is exactly as he sets out: industry will produce its products to be compliant with the regulation consistent with the size of the market opportunity—it is not a blanket approach. If a market is subject to a particular regulatory framework, but that market is not big enough for the industry to comply with the framework, they simply will not comply and those products will not be available in a post-Brexit, post-REACH-regulation United Kingdom.

As we roll the dice on this issue, it is important to understand the slightly rarefied position occupied by the chemical industry in the United Kingdom. It has a turnover of £56.6 billion, but a very enviable gross value added of £19.2 billion. The Government must tread carefully and pay close attention to the members within trade organisations, such as the Chemical Industries Association and others, who are very clear with their call for regulatory alignment.

We have heard an awful lot about the cost of the re-creation of some successor to EU REACH, which is as yet unspecified, but I genuinely, thoroughly believe that the point is moot. As Members have said, the industry will offshore the UK manufacturing of chemicals. Other industries within the UK that rely on the products of the chemical industry will be subject to buying from another market. That will in all likelihood be the European Union, so we will then face the farcical situation of having dispensed with REACH regulations here—which will have cost us our industry, or a large part of it—and of then being in possession of the very same standard of product purchased from the EU, just without the £56.6 billion of turnover, or a large part thereof, and the jobs that went with it. The stakes are no lower than that! Having said that, were the UK to press ahead with some parallel regulatory framework for chemicals, the resultant animal testing, as others have mentioned, would be held in contempt by society, and rightly so. It is important to bear that in mind.

The regulation and supply of chemicals is yet another area of huge complexity in that Brexit ambition. Brexit will have an impact on the chemical industry driven by changing regulatory requirements, as others have mentioned, and by other trade barriers, potentially including tariffs and quotas. The REACH chemicals regulations are but one example of directly applicable EU legislation that is not straightforward to copy across into UK law. The principal objective remains, however, to ensure that those regulations still have priority in a post-Brexit United Kingdom dynamic. That is because the regulations rely on the European Chemicals Agency and are closely tied to the needs of the single market. The UK and EU chemical industries both want trade deals to ensure frictionless trade and regulatory consistency between the UK and the EU. That points to the complex supply chains that exist for the manufacturing sector.

I am very glad that the hon. Member for Sefton Central, who secured the debate, mentioned potassium chromate. As a former aircraft engineer, I still remember keenly the sweet smell of that sticky green substance which was difficult to get out from under the fingernails. Its role in preventing dissimilar metal corrosion in aircraft is well known and vital. That had the effect of taking me slightly down memory lane.

In conclusion, as a Scottish and a Scottish National party MP, I have no hesitation in supporting the ambitions of the hon. Member. The UK is a key global player in the chemical industries just now. As far as I can tell, the only chemical company in the UK in the top five chemical companies in the world is INEOS, which has a major presence in Grangemouth in Scotland. The Chemical Industries Association also covers the pharmaceutical industry, and I am very privileged to have in my constituency of Angus an extraordinarily large and important GlaxoSmithKline plant. Nowhere does interdependence and mutual reliance on common regulation apply more than in that plant.