The chemical and pharmaceutical industry is the pride of UK manufacturing – it adds £15bn of value to the UK economy every year and is the largest manufacturing exporter with annual exports close to £50bn.
It employs a vast swath of workers in the UK – some 140,000 people work directly for the sector; an additional half a million workers across the economy are supported by the sector, too.
But all this could be at risk if, on June 23, the UK votes to leave the European Union.
Unite national officer for chemicals and pharmaceuticals Tony Devlin explains that while a potential Brexit would be a step into the unknown – we have no idea what the exact economic outcome would be – one thing is certain: many of the protections workers now enjoy would go straight out the window.
“A very significant part of employment legislation that protects all of us comes from the European Union,” he said. “Can you imagine what some of these large multinational companies would do in an environment with no restraints on them coming from Europe?”
Indeed, a small sampling of the EU-based employment rights and protections we now enjoy include 28 days paid annual leave including bank holidays; parental leave; anti-discrimination rules on race, sex, disability, age and sexual orientation; data protection rights; maternity rights; additional rights for agency, temporary and part-time workers; and working time, which includes a maximum 48-hour week unless you agree otherwise as well as minimum rest breaks each day.
“Think about what you have now – what protections you have now,” Devlin said. “Do you want to lose that?”
Mergers on the horizon
Devlin noted that the chemical sector in the UK is going through a period of change – many mergers may be on the horizon, such as a massive impending deal between DuPont and Dow.
This change is already creating a climate in which workers’ jobs are at risk, and negotiating good terms and conditions is an uphill struggle, one which would become nearly insurmountable without the employment legislation afforded by the EU.
The added uncertainty of the UK leaving the EU could mean chemical and pharmaceutical businesses scaling down on future investment and working people would bear the greatest burden as a result.
“The uncertainty that Brexit creates in the markets has huge ramifications for our members,” he said. “If businesses have any fear about uncertainty of their medium to long-term future, then the only people who really suffer from that are the workers – our members. That’s because the business decisions that are then taken in this climate of uncertainty are to make deep cuts.
“And we’ve seen once you lose well-paid, high-skilled, secure employment in the manufacturing sector in the UK it very rarely comes back and is hardly ever replaced,” he added.
Indeed, this sentiment is already being echoed from businesses across the chemicals and pharmaceuticals sector.
BOC, the largest supplier of industrial gases and related equipment in the UK, highlighted the increased level of risk businesses would be exposed to in the event of a Brexit.
“In an increasingly volatile world there is a perceived level of ‘safety’ in being a member of a club, in this case ‘Club EU’,” BOC noted in recent statement.
“Going it alone in Europe would bring added uncertainty, and uncertainty equals risk. Risk makes it more expensive to borrow money and increases volatility within exchange rates. Consequently the UK becomes a less attractive place to do business.”
Proponents of Brexit often cite the argument the high EU standards on products and manufacturing processes increase the cost of doing business, which makes the UK less competitive globally. But both the BOC and Devlin argue that withdrawing from European standards may in fact make it more difficult for British businesses to export their products.
“While less onerous standards might on first glance seem a good thing, they would be bad news for manufacturers who wanted to export but found their products no longer met higher EU specifications,” the BOC noted. “Conversely, it might result in the UK producing goods that are over-engineered and/or too expensive for the wider market.
Devlin noted that when it comes to chemicals and oil, particularly in the manufacturing sector, “pretty much everything people do, whether it be European-wise or globally, is done to an EU standard”.
“Because we will no longer have EU specifications for our products, over-engineering to try to meet these high specifications is a serious risk and could significantly increase costs,” he explained. “If you’ve got a product that’s too expensive to make and does not meet the standard for the market you’re trying to sell it to, ultimately this would impact our members’ job security in the future.”
In a recent survey carried out by the Chemical Industries Association (CIA) of its 93 member companies, a full 62 per cent said the UK should remain a member of the European Union, while the remaining 38 per cent said they had decided not to take an opinion.
“For an internationally exposed industry such as chemicals, the free movement of goods, services, capital and people as well as proportionate regulation are critical success factors in terms of global competitiveness,” said CIA chief executive Steve Elliott.
But the risks that a Brexit could potentially pose for the chemicals and pharmaceuticals sector go well beyond the sector itself.
That’s because no matter who you are or where you work, chemicals and pharmaceuticals are part of our daily lives.
“There are chemicals in everything we use these days, from toothpaste to the clothes that we wear,” he said. “And everybody, at some point in the life, will need medication, whether it’s a simple painkiller for a headache or treatment for a more serious illness.”
Because we’re in the EU, Devlin explained, consumers can be sure that these products are manufactured to a safe and high standard.
“Consumers understand EU standards and they understand that companies are operating in an environment that assures they have to make, sell, deliver and use these products in a safe way,” he said.
In the end, unregulated markets without the employment and consumer protections afforded by the EU create a Wild West that allows companies to compete with each other by ruthlessly reducing costs.
And, Devlin notes, this will almost always entail either cutting workers’ employment conditions or sacrificing the quality and safety of their products.
“When you start to whittle away at all these things, you need protections somewhere to stop this all from happening,” he said. “The EU is by no means perfect but it grants us a level of protection that we simply would not have if we go it alone.”