The Chemical Industries Association reacts to the Chancellor’s 2024 Budget
Following Labour’s first budget in over 14 years, unveiled by Chancellor Rachel Reeves today, the Chemical Industries Association (CIA) has welcomed key elements of the Chancellor’s 2024 Budget, recognising positive developments for the chemical sector in areas such as industrial strategy, net zero growth, investment in skills, and innovation. CIA Chief Executive Steve Elliott commended the support for aerospace, automotive and life sciences as key advanced manufacturing sectors linked closely to chemical businesses.
Responding to the Budget statement:
Steve Elliott, Chief Executive of the Chemical Industries Association said “This is a Budget with many positive points for chemical manufacturers, answering a number of our calls in announcing or reconfirming action in four key areas - industrial strategy, net zero growth, investment in people and fostering innovation. I am also particularly pleased to see support for aerospace, automotive and life sciences as key advanced manufacturing and customer industries for chemical businesses”
On Industrial Strategy, the Association’s Head of Economics Michela Borra said “The commitment to delivering something that is long overdue for our country is welcome. We are pleased to see increases in investment after the UK has been in the bottom of the G7 for investment as a share of GDP for 24 of the past 30 years - but we must recognise that today’s higher spending commitments from the Chancellor come off the back of a change in debt rules”.
Commenting on the detailed changes to energy and environment, Policy Director Nishma Patel said “The £2bn over 5 years for zero emission vehicles and its supply chains will be good news for a number of chemical businesses who deliver battery and other key advanced materials. So too is the continued support for Energy Intensive Industries through around £350 million relief from indirect carbon costs passed through on industrial energy bills across 2024-25 and 2025-26, albeit the original tax is no longer necessary. Confirmation of the £163 million to continue the Industrial Energy Transformation Fund over 2025-26 to 2027-28 is also welcome. The hoped-for benefits from funding Carbon Capture and Storage and the 11 green hydrogen plants is going to help. Of great importance to our sector is being able to use a mass balance approach for chemically recycled plastic – it’s the right decision and something we have been urging Government to do for a long time.
On reforming and expanding the Office for Investment, Ian Cranshaw Head of International Trade said “We are now getting some certainty and I hope stability in an approach to investment and clarity on where responsibility sits. We welcome the funding for the Investment Zones and Freeports programmes, but they will need to appeal to business decision-makers, and at the moment that is not happening”
Steve Elliott concluded: “Capital intensive sectors such as chemicals will welcome this Government’s commitment to longer term policy stability – be it through its industrial strategy; its corporation tax roadmap or its full expensing regime to encourage investment in plant and equipment. That’s great, but it’s now all about delivery as the UK and wider Europe has become increasingly unattractive to global investors in manufacturing. Urgent action – and in many cases partnership between industry and Government - is required if UK chemical businesses are to boost their already significant contributions to the macro-economy; strengthen their resilience in supporting the nation’s critical infrastructure and enable the country’s transition to a net zero future. Let’s get on with it!”
