View from the UK: Record-breaking election results to impact coatings sector

David Park, British Coatings Federation, writes for PPCJ about what the recent election results and a new government might mean for the UK and Europe’s coatings industry

On 4^th July the UK held a General Election. The Conservative Party, which had governed for the past 14 years in one form or another, suffered a comprehensive – indeed record-breaking – defeat. They are replaced by the Labour Party, under Sir Keir Starmer, which won a majority of over 170 seats. Unlike many countries around the world, which have a transition period between administrations, the UK is brutal and swift: a new Cabinet was announced, and took up their posts, on the 5^th July and as I write, junior ministerial positions are being filled.

This change of Government matters: while there is not much money for the new Chancellor of the Exchequer to splash around, the style and approach of the new PM and Cabinet could have a big impact on the coatings sector in the UK. Here’s how.

Firstly, there is the stated aim of achieving a new relationship with the EU. During the election, Sir Keir Starmer ruled out the UK applying to rejoin and also stated that membership of the Customs Union and/or Single Market were also out of the question. However, there are plenty of positions that fall short of those outcomes but could still deliver much closer trading, social and diplomatic ties. Specifically on chemical regulations, the now Chancellor of the Exchequer, Rachel Reeves, said during the election campaign that “I don’t think anyone voted leave because they were not happy that chemicals regulations were the same across Europe,” and went on to state that a Labour Government would seek to negotiate a “bespoke” arrangement for the chemicals industry, to try to avoid costs connected to having to register products with a UK system. This sounds a lot like the ‘Swiss model’, which the British Coatings Federation and other associations and NGOs had pushed for in the past. This would almost certainly apply not just to REACH but other chemical regulations like BPR and CLP.

However, any such approach would presumably need the EU to agree to such a bespoke arrangement: Michel Barnier has previously said the EU will expect free movement of people in exchange for changes to the current Trade and Co-operation Agreement, so whether it is achievable remains to be seen. Indeed, the Theresa May Government had attempted to negotiate an ‘associate membership’ of ECHA, including access to data, way back in 2017 but failed as the EU saw this as ‘cherry-picking’. But it is a change of direction that could work, so we at the BCF are keen to see how it develops.

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View from the UK: Essential Coatings

Secondly, as a consequence, this will probably mean yet more delays before we know what the medium- to long-future of chemical regulation in the UK looks like! Defra is consulting on its own new proposals for UK REACH at the moment: the consultation closes on 21^st July. What does the likely new Labour approach mean for this plan? It is likely the consultation will be allowed to conclude to enable interested parties’ views to be formally recorded. However, if the ‘bespoke arrangement with the EU’ plan is to be followed instead, the proposals being consulted on could end up in the bin fairly quickly. When the BCF met with the then Shadow Chemicals Minister, Ruth Jones, we made the point that whatever direction is favoured, we cannot spend another two or three years in a state of flux putting together the detail. Business needs certainty and Government needs to move swiftly to provide it. BCF and others will be pushing the incoming Ministers to make providing this certainty a priority.

Thirdly, there is the new Government’s commitment to creating a modern industrial strategy for the UK’s manufacturing sector. This would go above and beyond the Conservative administration’s ‘Advanced Manufacturing Plan’ and which could clearly have an impact on the coatings sector in Britain. Exactly what this strategy will look like, as with so much else at the moment, remains to be seen – but it is something the UK’s manufacturing industry, including the BCF, has been calling for in principle and we look forward to engaging with the new Business Secretary, Jonathan Reynolds, and his Ministerial team on the content.

Finally, there are commitments to fast-track the move to more green energy, with planning applications made easier for large-scale, national infrastructure projects. We all know that true progress against net zero targets can only be made by a greening of the national grid and, in some cases, only by the use of alternative fuels like green hydrogen. The aspiration from the new Government is clear but the concern remains where the money will come from to finance this. What will be the impact on business’ energy bills? The suggestion is funding will be raised through the private sector, with the Government priming the pump with substantial sums of taxpayer money. To sound like a broken record, we will have to see how the detail pans out.

The next update from the UK should revert to more granular updates on policy and regulation!