Industry sets out strategy for survival

Nov 20 2009 by Karen McLauchlan, Evening Gazette

THE chemical industry has set out its wish list for government in advance of a regional strategy designed to ensure the survival of the Wilton complex.

The Chemical Industry Association document was unveiled at the CIA annual dinner in London last night attended by Business Secretary Lord Mandelson alongside representatives from many of the operators on the Teesside site.

It called on the government to put the process sector at the heart of its manufacturing strategy and address competitiveness issues, including what many believe to be one of the most important factors leading to the closure of foreign owned plants in the UK - the government's refusal to subsidise short-time working through the downturn in the way that others in Europe have chosen to do.

Outgoing CIA president Bob Tyler called on all political parties to correct the PR deficit that has led to the process sector falling off the radar of many key decisions makers and the general public. More than half a million jobs depended on chemicals and pharmaceuticals, he said, generating £60bn a year for Britain.

But he added: “At least 75% of the chemical industry in the UK is foreign owned. If these companies are not supported, we will lose both jobs and activities and if you lose chemical activity you will lose other manufacturing jobs along the way.”

According to CIA figures, 10% of jobs in the sector have already been lost - including more than 1,000 in the North-east since last year.

“We need government support for industries that have a sustainable future in the UK - not lame ducks,” said Mr Tyler.

Describing the process sector as “the most important industry in the UK”, Lord Mandelson said the last two years had been tough precisely because it was fundamental to the economy. But he warned that even when growth returned it would be “a difficult business to be in”, particularly since it faced one of the largest challenges of any sector in the move towards decarbonisation due to its heavy reliance on fossil fuels.

“The chemical industry faces a huge and radical reinvention of itself,” he said, but that would present a “massive global opportunity for our advanced manufacturing businesses”.

To help industry make the most of that opportunity, Lord Mandelson said he would defend the science budget, due to top £6bn next year - making Britain the second biggest spender after the US - and press on with plans to create a “technician class”, as outlined last week in proposals to create 35,000 science-based apprenticeships for 19-30-year-olds.

The unveiling of the CIA document will give added impetus to the regional strategy being mapped out for Teesside, which is due to be delivered in the next two weeks.

Its challenge is to come up with a private sector solution to managing the transition from a petro-chemical based site to one driven by renewables and protecting jobs in the short term.