Viewpoint: Securing a Chemical Manufacturing Future for the UK
Paul Shelley urges changes to the UK’s industrial strategy to secure opportunities for today’s graduates — and warns of the risks to the chemical industry if action isn’t taken
Viewpoint in brief
- Structural and policy weaknesses are driving UK chemical plant closures: UK sites are often shut over European ones due to weaker protections and the absence of a clear industrial strategy
- High energy costs and policy instability deter investment: A lack of consistent energy and industrial policy makes the UK less attractive for long-term manufacturing investment
- Innovation potential exists but is underused: The UK’s strong research base needs better, simpler support schemes like streamlined KTPs to benefit industry more effectively
I GRADUATED from Loughborough University in 1983 with a degree in Chemical Engineering. This degree has enabled me to have a fulfilling career doing what I enjoy, engineering and manufacturing. But as I reflect on those 40 or so years, I ask the question: will the opportunities I benefited from be available to chemical engineers graduating today? In fact, will there even be a chemical industry of any size and scale in the UK in ten years’ time?
I have worked at five different chemical production sites in the UK. As I look back at these, only my current site in Warrington is still in full operation. All the other sites have either been completely closed or substantially so. It should be stressed, that in most of these cases, the equivalent European plants are still running, albeit with some under changed ownership.
These aren’t exceptions. Looking more generally at chemical production in the UK, we have recently stopped making several key chemical basics like sulfuric acid, ammonia and hydrogen peroxide. You must ask why? For example, why did Solvay shut down their Warrington hydrogen peroxide plant in 2024 rather than one of the European ones? Was it that uncompetitive? I don’t think it was. I firmly believe that our free-market attitude in the UK coupled with our softer employment protection and significantly lower statutory redundancy payments compared with our European counterparts have played a major part in the demise of our industry. I have direct experience of this. A company I was working for was faced with a situation where it had four manufacturing locations spread across Europe, but only sufficient market demand for three. The closure decision ended up between a site in France and one in the UK. The UK site was chosen despite being significantly lower cost to operate because it was much cheaper and easier to shut it down than the French site.
Manufacturing has also been undervalued as a key export-driven source of income essential to any major economy. The contribution of chemical manufacture, which is more foundational, is probably even less understood than industries such as car and aero manufacture. It has the further disadvantage of generally being more energy intensive. Figures from 2024 quoted by the Chemical Industries Association show chemicals to be one of the UK’s largest exporters, with over £61bn (US$81bn) of exports. The gross value added per employee of £200,298 is 302% higher than the economy average and 236% higher than manufacturing.1
Strategy and energy
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