The costly impact of Brexit
As politicians grapple with the issues raised by Brexit and debate the ‘right’ outcome for the country, it is worth bearing in mind that following the 2016 referendum and the subsequent triggering of article 50, it is estimated that Brexit has already cost the economy £17bn1
The Centre for European Reform suggests that the UK economy is 2.3% smaller than it would have been had the result of the referendum been remain, or to put it another way, the treasury has around £320m less to spend per week. The impact of this is not just on public services. The CER’s research suggests that regardless of the outcome of Westminster’s debates and discussions, the British economy has already been heavily impacted.
As early as February 2016, Euler Hermes2 were predicting that the Chemicals sector could lose as much as £7bn, of its’ total sales value of £55bn, should a successful free trade agreement not be created. This downturn far surpassed that predicted for the automotive sector, estimated at £3.5bn, driven by the fact that more than half of the chemical industry’s exports are sent to Europe. A reduction in trading with these partners puts pressure on the supply chain and jobs.
As part of their deliberations, MP’s need to think about the repercussions carefully for the chemical sector – not just in terms of immediate trade or production, but for the long-term health of the industry. Heavily reliant on highly qualified staff3, there has long been a focus on recruitment of graduates and apprentices with an emphasis on constant training to keep pace with both new innovations and changes in manufacturing practices to ensure the UK continues to be world class. Labour has been forthcoming from all across the globe to work within the speciality businesses, adding to this status. In order to continue to attract this talent and ensure this focus on training and development of people, it is important to ensure that the prospects for the sector remain positive and that the dire predictions are not realised.
1 Independent, 26th January 2019
2 Chemical Industry Journal February 2016
3 ONS Business Registers and Employment data