Ian Swales MP writes… Making the industrial strategy work on Teesside

The chemical industry is vital to the UK.  It is already the biggest export business in the UK at £43 bn. However imports have risen after various shut downs, and the amount we are importing is, in my view, unnecessarily high.  There are major opportunities for new investment to bring production of key materials back into the UK and bring jobs, growth and expertise with it.

My constituency of Redcar is part of an area which has traditionally been a hub of the UK chemical industry. Chemicals are key ingredients in almost everything we buy. Whether it is through plastics, resins, coatings, lubricants or fuel additives, chemicals play a vital role in any number of industries. The Government has a strategy to bring supply chains into the UK as much as possible in order to maximise the efficiency, growth potential and economic impact of each industry. For example there is a company in Stockton now making many of the plastic parts for cars yet they have to buy all the plastics from abroad. As Chair of the Chemical Industry All Party Group, I thoroughly welcome the Government’s supply chain strategy which will help chemicals industry grow and underpin strong economic recovery.

A healthy innovative chemical industry can strengthen a strong manufacturing sector. The Teesside chemical industry has reduced in scale but is still a vital part of the national economy. At one time it looked as though it was in terminal decline however with the building up a of centre for research excellence and joining the industry together as a process industry ‘cluster’ the rot has now stopped and new investment is pouring in. Further opportunities are occurring in green technology through biological routes to production and recycling chemicals from waste. There are now over 50 companies in the Teesside chemical industry cluster all bringing jobs and growth to the local and national economy.

Chemicals and pharmaceuticals remain industries in which the UK excels. It is very frustrating to hear employers say they can’t find local employees with the skills they need. Science education has been downgraded in schools and the UK just hasn’t been producing the scientists and engineers the country needs. It is one thing bringing the jobs to the UK, but if we also need to bring the workers then that makes no difference to our pool of unemployed people. There has been an encouraging upturn and emphasis on maths and science education but a lot more needs to be done.

I am pleased to see the Government investing more in science and setting up Technology Innovation Centres. With the right support the chemical industry can remain a powerful engine of wealth creation for the UK.

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  • I am a scientist (chemist) from the UK who has recently emigrated to the continent. The pay and the respect given to scientists over here is in marked contrast to the contempt and harassment we observe in Britain

    Why there is some a dislike of science in the UK is difficult to understand but involves many factors

    The sentiment in the article is just but as someone with a PhD in chemistry why should I accept less money than many other occupations – no wonder so many of us go to work in the City. The pharma industry is downsizing and so the incentive for people to study the sciences is probably lower than any time that I can remember

    All the time we here there is a shortage of scientists – baloney I say. There is a shortage of good jobs for them

  • Richard Dean 11th Dec '12 - 5:51pm

    Good news for Redcar. But the strategy to bring supply chains into the UK is essentially a protectionist one. It’s good old “Buy British” in disguise, perhaps a ay of getting around some international agreement not to do this.

    Unless the supply chains or the overall industry gets more efficient as a result of being brought here, the long-term effect may be to damage us through the damage it does to the places the chains are removed from, and the reactions of the people there in terms of removing their supply chains from the UK.

    Well I hope Redcar and Teeside does well. Let’s hope low salaries are not an aspect of the increased efficiency. Has science education really been downgraded? That certainly seems like bad news.

  • Liberal Eye 12th Dec '12 - 6:48pm

    I hope people are taking note of what Ian Swales has to say. Some specific comments.

    We are about to see a wave of dramatic innovation based on new materials (including but not limited to nanomaterials) coming out of the labs and into production. If UK plc misses this wave we will all be poorer for it.

    It’s criminal that the education system isn’t delivering. The reasons are complex and the necessary fixes even more so but one thing is obvious – too much of the government-driven reform of recent years has been ‘producer push’ aimed at getting good headlines for politicians rather than building a ‘consumer pull ‘system that, once launched, could be left to look after itself and respond to the changing job opportunities.

    When it comes to getting the staff, maybe the companies need to pay more – in status as much as money per Bazzasc’s comment. There seems to be a longstanding problem here but what exactly?

    @ Richard Dean – I disagree. There are powerful network synergies in having more firms and more of the supply chain locally including but not limited to the pool of skilled staff, specialist support services/experts within legal and accounting firms etc. These increase the chances of success of every firm, especially startups. As for being covert protectionism, I doubt it. The place that has been most damaged by having supply chains removed in recent years has to be Britain as successive governments foolishly concluded that manufacturing was old hat.

  • Richard Dean 12th Dec '12 - 7:13pm

    If there are “powerful network synergies” that make for greater efficiency, then you are actually agreeing with me! One of the problems though is that focussing on one industry like this can make the area less robust against shocks that affect that industry. Suppose someone else gets the new patent first – then the whole caboodle here might crash, devastating the area rather than just knocking it.

    Focus can certainly be good – and much of our industrial history shows that – but in modern times diversity may be vakuable too. Can the internet not supply “network synergies”, at least in terms of information, management, sequencing, timing, etc? Having suppliers all in one area can also have disadvantages in terms of the competetitive and power relationships of suppliers, buyers, and workers.

    I very much doubt that anyone has sufficient knowledge to predict the potential scale of the counter-measures that foreign firms may take in other industries. But really it’s pretty simple. If we remove a supply chain worth a thousand jobs from France or Spain, those workers are going to be looking for other work. They’ll be available to compete against us in other industries, and maybe for more competetive wages.

  • ” If we remove a supply chain worth a thousand jobs from France or Spain, those workers are going to be looking for other work. They’ll be available to compete against us in other industries, and maybe for more competetive wages.”

    No-one’s talking about removing anyone else’s supply chain. The aim is to rebuild the networks that already existed before in the UK and were ripped apart by sell offs, shut downs and lack of an industrial policy.

    We’re just talking about what other industrial countries have been doing for years – because it makes sense!

    As for the argument about specialisation, in a global economy, you can’t be a generalist because then you don’t have any competitive advantage in research or expertise. You don’t catch the Germans worrying about having too much of a car industry.

  • Richard Dean 12th Dec '12 - 9:48pm

    Thanks for the correction, RC, I probably got confused with something else. Some of what I said still stands though – focussing in one area is only helpful if there really are efficiencies from geographical proximity, it does run the risk of taking jobs from some other geograhical area, and there can arise some competitive and power relationship issues.

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