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Johnson & Davis claim chemicals industry will be Brexit winners – so where are the firms clamouring to leave?

Part one of a three-part-series: Will Brexit mean a toxic chemicals BREACH?

Brendan Montague
15 February 2019
Chemical_Sunset_-_geograph.org_.uk_-_8063.jpg

Image: Sunset over chemical works, UK. Credit: Geograph, CC 2.0.Ask a leading Brexiteer what Brexit is actually for and they tend to extol the virtues of rolling back regulation to liberate UK businesses. Take Boris Johnson, for example, who set out in his Telegraph column My plan for a better Brexit that the “one size fits all EU model of regulation” had lost the equivalent of “about 7 percent of GDP” and sometimes appeared “expressly designed – and at the behest of continental competitors – to make life difficult for UK entrepreneurs and innovators.” Johnson concluded: “regulatory divergence [is] one of the key attractions of Brexit”, echoing the Institute of Economic Affairs’ controversial ‘Plan A+: Creating a prosperous post-Brexit UK’ report, which said that regulatory divergence was essential to “capture the Brexit Prize”.

But it’s often been wryly observed that if you ask a Brexit supporter to actually name an EU regulation they object to, they often struggle to do so.

A Rapporteur at the Council of Europe, Geraint Davies, asked Boris Johnson that very question. Davies reports that, “after complaining about bananas, [Johnson] named REACH” (REACH being the EU’s main chemicals related regulations, the Registration, Evaluation, Authorisation and Restriction of Chemicals rules).

And similarly, David Davis, the former Secretary of State in charge of the Department for Exiting the European Union, told millions of BBC Question Time viewers that the UK chemicals industry would benefit from Brexit.

So if leading Brexiteer politicians are holding up the UK chemicals industry as one of the best examples of an industry that’s being strangled by the EU’s regulatory regime - then presumably, the industry itself is desperate to escape the clutches of REACH?

Well - not at all, actually. But we’ll get on to that in a moment.

Why REACH matters to our jobs, health and environment

Firstly, let’s have a look at why REACH matters for everyone, not just those directly involved.

The chemicals business is Britain’s second largest industry, and chemicals our second biggest export to the European Union, after cars. The industry has a £32 billion a year turnover, with £10 billion ‘gross value added’. Kate Green, a backbench Labour MP, told Parliament there were 1,250 jobs in chemical companies - and 7,000 manufacturing jobs dependent on them - in her constituency alone. The industry has been identified as one of the five most impacted by Brexit.

And it matters in terms of health. More than 30,000 chemicals bought and sold in Europe are now registered under REACH. This includes “coating on a non-stick frying pan, flame retardants in sofas, carpets and curtains, and medicines”. Britain is second only to Germany in the number of different chemicals now being regulated.

The chemicals causing concern include phthalates, which have been linked to “asthma, attention-deficit hyperactivity disorder, breast cancer, obesity and type II diabetes, low IQ, neurodevelopmental issues, behavioural issues, autism spectrum disorders, altered reproductive development and male fertility issues.” Bisphenol A, used in packaging, is now linked to “obesity, diabetes and fertility problems”.

Dr Philippe Grandjean, of the Harvard School of Public Health in Boston, was quoted in the Daily Mail back in 2014 warning of a “pandemic of neurodevelopmental toxicity” from chemicals now banned by REACH, affecting children in particular.

And of course, there is the environment. Blueprint for Water has estimated that 27 percent of total ecosystem losses are due to chemical pollution. Kerry McCarthy, the Labour MP and former shadow secretary of state for environment, food and rural affairs, told a Parliamentary committee: “Reduced [regulatory] capacity could further expose humans and animals to numerous cancers, disrupted reproduction, immune dysfunction, DNA damage and deformities, to name just a few concerns.”

So this is yet another example of industry in Britain wanting carte blanche to pollute, with the Tories supporting them and environmentalists and health professionals freaking out? If the chemicals industry in the UK is clamouring to leave the European Union and REACH, then the free market think tanks and pro-Brexit MPs should easily be able to identify British chemicals companies that want to scrap REACH – right?

Well, no.

If the chemicals industry really wants to leave REACH, why aren’t any of them saying so?

I asked Shanker Singham, the director of the IEA’s international trade and competition unit and author of its report to name a company that favoured divergence from REACH. Silence.

I asked the co-author, Radomir Tylecote, named as a senior research analyst at the same unit, if he could put me in touch with any such companies – and he said he couldn't.

I also asked Professor David Collins at City University, who is acknowledged in the report, if he could point to any companies who want divergence from REACH. He responded: “[U]nfortunately I don’t know anyone who fits this description.”

I went beyond the IEA to other hard line free market think tanks who have supported Brexit. Tim Worstall, a senior fellow of the Adam Smith Institute, was blunt. He said in an email: “I think that REACH is a disaster myself, an entire, a complete disaster...But admittedly, I'm an extremist. As to industry people willing to say such things, sorry, not a scoobie.”

So have politicians themselves been deluged with lobbying materials from chemicals companies attacking REACH? I contacted the offices of Boris Johnson and Jacob Rees-Mogg but thus far there is no response. Julie Girling, an MEP who was effectively kicked out of the Conservative party over Brexit, did respond. She told me: “I have no knowledge of any company that wants to leave REACH. On the contrary most companies feel that they have made significant investments and want to reap the benefits of the REACH system in the future.”

Ms McCarthy, who sits on the Environmental Audit Committee, said: “I’m not aware of any companies that have said things would be better out of REACH.” She added: “I met with a company in my constituency yesterday, which is one of the world leaders in producing clingfilm. Apparently US clingfilm is banned in the EU, as possibly carcinogenic, so that’s something else we have to worry about post-Brexit, along with chlorinated chicken!”

Angela Smith MP, an environment, food and rural affairs committee member, agreed: “As for I know and from the conversations we had with the industry bodies and companies all want to maintain regulatory alignment and the best way to achieve that is by keeping REACH.”

Professor Ragnar Lofstedt, of the Kings Centre for Risk Management at Kings College, London, was writing about REACH in 2003, before it was introduced. His article, Expert View: A toxic shock for manufacturers quoted sources claiming it would lead to 150,000 to 2.35 million job losses in Germany alone. Perhaps he could name a UK company that now wanted to leave REACH.

“I have reached out to a number of individuals and as you note I have not heard from any UK chemical company who wants to leave REACH post Brexit,” he said. “It seems that they have invested a lot of resource in complying and don't want to reverse this. That said I would think that small chemical companies who only produce for the UK market could consider moving away from REACH post Brexit - but I haven't heard from any of these.”

Curiouser and curiouser….

So – the pro-Brexit politicians and think tank crowd would have us believe that the UK chemicals industry itself wants divergence from EU regulations, but presumably are too shy to say so in public.

Except when I actually spoke to the chemicals industry itself, I got a very different story. It’s just not a story that suits the Brexiteers narrative – because the industry is more than willing to talk about how much they actually want to stay in REACH, and how bad leaving the EU’s stable regulatory regime will be for their business, as I’ll explore in my next article in this mini-series. And I’ll conclude the series with a look at what interests are really driving the Brexiteers’ opposition to REACH – including those on the other side of the Atlantic.

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