No-deal Brexit threat to ‘billions of pounds’ of chemicals

A no-deal Brexit threatens billions of pounds of chemical imports, the head of the Chemical Industries Association, Stephen Elliott, has warned.

He says secondary legislation, needed to copy EU regulations into UK law, contains “significant gaps”.

The loophole could halt UK imports of chemicals by EU-registered countries from countries outside the EU, he says.

“Put simply, the drugs don’t work, the cars don’t run and the planes don’t fly without chemicals and chemistry.”

Unless the law is changed, he says, the import of “billions of pounds worth of chemicals,” used across UK manufacturing, would have to come to a sudden halt if the UK left the EU with no deal on 29 March.

Defra said the government was working closely with industry stakeholders to ensure they are prepared in the event of a no-deal Brexit.

“Our approach will maintain regulatory standards, provide continuity for business and reduce the risk of interruption in supply chains.

“The transitional arrangements, as established in the REACH SI, will ensure the continued access of chemicals to and from the UK market, including the import of products from outside the EU”, it said.

The UK imports roughly £33bn of chemicals from the EU every year, and about £27bn from the rest of the world.

Part of the problem is the huge amount of work that needs to be done, and the speed with which legislation is being pushed through parliament as a result.

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“I think the average politician is not one hundred per cent across all the details of where the gaps are, so it’s left to business to pick up the pieces,” says Allie Renison, who heads Europe and Trade Policy at the Institute of Directors.

There is plenty of expertise in the system, Ms Renison adds, but civil servants are trying to create entire regulatory systems that have not existed before.

“Taking the chemicals regulatory framework as an example, that’s a big change that no-one has any experience of doing, and the government is in a rush to get it all passed before Brexit day.”

The uncertainty in the political process has percolated down through the industry.

At Robinson Brothers, a 150-year-old chemicals company in West Bromwich, the managing director Adrian Hanrahan struggles to put a figure on the amount of money he has had to spend to prepare for the possibility of a no-deal Brexit.

“But,” he says, “if you put a number on time, it’s been hellishly expensive.”

An enormous of amount of time has been spent on the administration and paperwork of preparing for no deal.

“We could employ ten people to keep us on the straight and narrow,” Mr Hanrahan says, “but we’re a small company, and it’s quite difficult.”

Robinson Brothers has also spent hundreds of thousands of pounds stockpiling extra supplies of the odorant that gives gas its distinctive smell.

The company normally holds six weeks stock, but it is increasing that to four months.

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“You can’t distribute gas without it,” Mr Hanrahan says, and “networks are panicking.”

“We’ve got twitchy as well,” he says, “because we’re under contract to supply, and we want to make sure we fulfil our obligations.”

Everyone in the industry is determined to provide continuity of supply of all the chemicals on which the UK depends, but the Chemicals Industry Association is worried about disruption if some imports can’t take place.