A speech by Robin Walker, Parliamentary Under Secretary of State at the Department for Exiting the European Union, to the Chemical Industries Association Conference
Thank you to the CIA for the invitation to engage with you once again today.
This conference that you’re having today addresses a really crucial question, and I’m pleased to be here to continue the conversation we have started between Government and the chemicals sector.
I want to thank all those of you who have already contributed to the Government’s work on Brexit.
I want to make sure that the negotiating position we develop continues to fully draw on your industry’s expertise and insight.
I want to explain what we are doing to prepare for the process of exiting the EU.
I want to further understand the opportunities and challenges for the chemicals sector as we forge new global relationships and a new global position for the UK.
We are here to get the best deal for Britain and our businesses, and that means continuing to work closely with every part of industry throughout that process.
Before we get into that, it’s important to remember some of the context that surrounds this issue.
The decision by the British people on 23 June that we should leave the European Union, is the most significant political event in the UK of my lifetime.
There was high turnout – over 33 million people from across the United Kingdom had their say – and 52% of those people voted in favour of leaving the EU.
A majority of 1.3 million.
As a Government, we received clear instructions from the electorate and we have to deliver British withdrawal.
Under our Prime Minister, Theresa May, we are working hard to prepare the way for negotiating the best arrangements for Britain’s future relationship with the EU.
Recently, the Prime Minister made two very important commitments on our plans for these negotiations.
First. The formal process for leaving the EU begins when the UK triggers Article 50 of the Treaty on European Union.
As she has made clear she still plans for us to trigger Article 50 before the end of March 2017 – that plan has not changed.
Second. Prior to that, the Government will put before Parliament a Bill to repeal from the statute book, the European Communities Act of 1972 to take effect at the moment of our withdrawal, at the end of the Article 50 process.
In doing that, we will convert the whole body of existing EU law into British law.
This is important for two reasons.
First, it sets in train the timetable for the start of UK/EU negotiations. It therefore provides certainty to exporters, investors, and the markets.
Second, it provides certainty for investors and exporters now that the same rules and regulations they deal with today as part of the UK’s membership of the single market, will be in place during and after the Article 50 process has been completed.
That said, for now – and until final withdrawal - we remain full members of the EU; and all our rights and obligations will continue to apply.
That means we will still be sitting at the table where decisions are made and we will engage fully with all those decisions.
That means there will be no immediate change in the way our goods move or the way in which services can be sold.
The UK chemicals sector is a strategically important industry for our country. Its products underpin the UK economy, from supplying the automotive and aerospace sectors to pharmaceuticals and agriculture.
In the UK, we are global leaders, and we are determined that you continue to be world-leading in this space.
British manufacturers have been highly successful in exporting – the world values our products.
That’s why the sector is one of the largest UK manufacturing export sectors.
But it’s also important to people at home, supporting almost 100,000 high skilled, well paid jobs.
Many of these are located in less well-off regions of the UK and the apprenticeship routes into the industry and the investment in skills that you make is incredibly valuable for our whole country.
Therefore it’s vital for the nation that we lay the foundations for the UK to continue to be a world leader in chemicals after we leave the EU.
Let me be clear: we are determined to make sure that the conditions for continued investment here in the UK are strong.
These negotiations present many challenges and opportunities, and they will require significant expertise.
Now, of course we can’t lay-out at this stage a step-by-step walkthrough of red lines and final outcomes that we want to see - that would undermine our negotiating position.
But we can provide an explanation of the work we are undertaking to prepare the UK for the negotiations within my Department which has grown to 300 people already.
First, we are committed to building a national consensus, and have been talking to organisations, companies, industries and the civic society in all parts of the United Kingdom.
We want to identify the key issues and opportunities for British businesses, and the labour force, which will affect our negotiations with the EU.
Second, my Department has been collaborating closely with other Departments across Government.
We have been drawing on the deep expertise that we have available, to understand the issues facing different sectors of the UK economy.
Looking at chemicals specifically, we have been working with the Department of Business, Energy and Industrial Strategy, the Department for Environment, Food and Rural Affairs and with industry to understand the key issues for the sector.
Last month I held a roundtable with senior figures from the industry at BEIS.
I was struck by the pragmatic nature of the discussion that allowed me insight into the opportunities we can exploit, as well as the challenges we face.
We discussed research and development, energy supply, the regulatory framework and skills provision.
I heard clear messages on skills, the need for continued investment in research and development, and the benefits of maintaining regulatory equivalence.
We also covered the opportunities that are offered by Brexit; including the potential for a more competitive energy policy and a potential to minimise bureaucratic legislative burdens.
Allow me to reiterate the value I, and the Government, place on discussions like these.
Continuing this dialogue between Government and industry is key to ensuring we find solutions that works for all.
That is why we are holding roundtables with organisations across the country to ensure all views are reflected in our analysis.
Once that preparation is complete, we will be able to negotiate a new relationship for the UK with the EU.
The Government is clear that this relationship will be bespoke for the UK.
Whilst there are many different existing models, our economy is unique, and we will be seeking the best possible deal on trade in both goods and services.
Finding the right balance for the different needs of the goods and services sectors will be central to any deal for the UK.
Some issues will inevitably affect all sectors, such as the movement of people and the availability of skilled labour.
Other issues will have an impact on particular sectors.
Goods sectors, including your own, will be affected by decisions on the customs union.
For example, how customs procedures align with the demands of your highly sophisticated, and integrated supply chains.
We are working to ensure that, whatever the outcome of the negotiations, we support business and help to mitigate any impacts.
Similarly, the UK’s membership of international regulatory standards, such as REACH and the ECHA, will be in the front of your minds.
At the roundtable last month we discussed the importance of maintaining a regulatory framework to safely manage chemicals in the UK and enable UK companies to access the single market. We recognise the role that REACH plays in enabling exports to the single market and we will seek to maximise opportunities for UK businesses in our negotiations.
We are looking across the piste, and will be seeking a deal that serves the interests of all sectors of our economy.
Clearly there is also a challenge to balance access to the Single Market with changes to the free movement of people.
The Government is clear that we want to give British companies the maximum freedom to trade with and operate in the Single Market, but that there is no mandate to accept the existing free movement of people arrangements within the EU.
We must recognise, however, that there isn’t a binary trade-off between free-movement of people and market access, and we will be seeking the best deal for the UK on both issues.
Let me be clear that pulling out of the European Union does not mean pulling up the drawbridge. That is not in our national interest and nor would it be in the interest of businesses across the UK and across sectors.
We will always welcome those with the skills, the drive and the expertise to make our nation better still. If we are to win in the global marketplace, we must win the global battle for talent.
Above all, we must remember that leaving the EU will give the Government and UK businesses new opportunities, and our Department is currently exploring these opportunities with industry.
One such opportunity is to forge a new role for ourselves in the world: to negotiate our own trade agreements and to be a positive and powerful force for free trade.
Across the world, we are going to move full steam ahead to boost our trade: working with our missions overseas to promote the UK as a place to do business and trade with; driving inward investment; and, in time, negotiating new trade agreements.
We will also be working hard within international organisations to promote our values and work towards freer trade across the globe.
As a high-value, high-growth and export focused industry where Britain leads the world, we will be looking to you in the chemicals sector to be at the heart of this work.
We value your input on how the Government can help you to thrive and grow as we leave the EU and reshape our relationship both with it, and with the wider world.
The Prime Minister has been clear that building a productive, open and competitive business environment is vital to delivering an economy in which everyone who works hard is able to enjoy wage growth, job security and opportunities to progress.
The Government is working on a new Industrial Strategy.
This will be focused on growth, improved productivity, and supporting industries that can give the UK a competitive advantage.
A business-friendly energy strategy is intertwined with the Industrial Strategy. The merging of the Department of Energy and Climate Change and the Department for Business, Innovation and Skills to create the Department for Business, Energy and Industrial Strategy shows that this is a central priority for Government.
Research, development and innovation is at the heart of this, and I know it is an important issue in the sector.
The Government is committed to ensuring that the UK remains a world leader in international research and innovative collaboration, and we expect to ensure that close collaboration between the UK and the EU in science continues.
We will also continue to support research which is crucial to improving productivity, and we want to see a better R&D policy that rewards firms for making the right investment decisions.
To conclude, the chemicals industry is crucial to our mission of building an outward looking, global Britain and seizing the opportunities that exiting the EU presents.
We want to support you as you grow our exports and explore new markets.
I hope that today gives you the chance to consider the options and opportunities you see, and how we can best work together to seize these.
Let me finish on an invitation for you to continue to engage directly with my office, directly with the Government, to make sure that we meet both the challenges and the opportunities this process presents.