UK Chemical Trade Bodies: 'Soft' Brexit Now More Likely

UK prime minister Theresa May’s failure to secure a majority for her Conservative party at the general election last week could mean a ‘soft’ Brexit is more likely, according to chemical industry associations.

A ‘soft’ Brexit, they say, might mean the UK retains access to the EU single market, the Customs Union and free movement of skilled labour. This contrasts with the ‘hard’ Brexit Ms May set out prior to the general election, in which she said the UK would leave the market and not pursue full membership of the Customs Union.

Despite the unexpected election result, Ms May says the government will begin Brexit negotiations this month as planned.

The UK chemicals industry has consistently said that it prefers to be in the EU single market, and especially to remain a part of the EU’s REACH Regulation. Peter Newport, CEO of the Chemical Business Association (CBA), says that stance has not changed following the election result.

"Relatively speaking the likelihood of a softer Brexit has grown," he says. However, it will now become a "more complex negotiation because there is no clear mandate for a 'hard' Brexit any more". And it means there will be bilateral negotiations within the UK, as well as with the EU 27, he says.

Steve Elliott, chief executive of the Chemical Industries Association (CIA), says a soft Brexit "is possible" and that the association "hopes" that will be the case, "but there are many significant political voices still pushing for the 'hard' approach".

Industry has been quite clear, Mr Newport says, that under the so-called Great Repeal Bill it wants to align with existing EU legislation. "Companies that serve the markets in the EU want to align as closely as possible on an ongoing basis."

It is in the interests of both the UK chemical industry and the EU, he says, to come to an acceptable solution. "We have never subscribed to a punitive approach from Europe because it is in their interest to come up with a solution as much as it is ours."

In the coming months, Mr Elliot says he would like to see "greater certainty" over where talks are going and "more recognition of the business arguments about attracting investment and trading successfully with Europe".

Brexit panel

The CBA has set up a panel to respond to government questions about chemicals during Brexit negotiations.

It was formed shortly before the UK’s general election and will feed into an existing government mandate for more information from the national chemicals industry.

Comprised of CBA members representing various parts of the industry, the panel will be a "rapid response sounding board", Mr Newport says.

"We have a new cabinet and [...] there will be a series of questions as the negotiations progress that we will need to be able to answer as quickly as possible."

In pre-election meetings, Mr Newport says government departments have been "very clear" and "consistent" in what they are looking for. He says he expects their questions to start coming next week, when formal Brexit negotiations are slated to begin.