“No-deal would be catastrophic,” so said Dr Dani Loughran on a recent edition of Question Time, when speaking of the impact of leaving the European Union.
Dani’s words clearly resonated with the audience, viewers at home and followers on social media for she was deemed an “absolute star”. “Make her PM” declared one twitter-user.
So in this issue of the Chemical Industry Journal, we thought it was time to catch up with Dani and discuss her concerns in more detail.
For those not in the know, Dani is the Managing Director of Aston Chemicals in Aylesbury, an independent distributor of speciality chemicals, founded in 1990, which supplies raw materials to the European personal care industries.
“Over the past 30 years, we’ve grown from nothing to a medium-sized company employing 37 people, bringing products into the UK from around the world and selling them on in the UK and in Europe,” Dani explained.
“As well as our employees, we have a supply chain of UK companies with whom we work from freight partners to marketing companies. However, the trade barriers being put up as a result of Brexit, the duplicated regulations and massively increased costs, mean we are now having to bypass the UK for half of our business. Affecting both our UK business and those businesses that are a part of our supply chain.”
“We are shipping products from all around the world and because of the uncertainty, we are planning much further ahead so that we don’t run out of supplies or let our customers down.
“Even if there are no trade tariffs after Brexit, the barriers, customs checks and extra paperwork will lead to delays. Getting products backwards and forwards will become much more difficult and time consuming.
“The EU has frequently been criticised for creating red tape, but leaving the EU will create much more bureaucracy and extra work for no gain, especially given we will have to try to put in place so many new regulations and trading agreements.”
The implications for the chemical industry in setting up a UK version of REACH is an enormous concern for Dani. “Once we leave the EU, creating a REACH system for the UK will be a huge undertaking, it’s not as simple as replicating what already exists.
“Issues around intellectual property mean UK companies can’t simply access and duplicate the documents previously submitted for REACH registrations.
“Copying and pasting the REACH database into UK law isn’t possible, as MP Mary Creagh rightly pointed out. Yet it became quite clear during the debate in Parliament on 25th February, that the Minister concerned simply didn’t understand this.
“In addition, the budget set aside to establish a UK REACH database is wholly inadequate at just £13 million, given that the European Chemicals Agency (ECHA) which currently manages REACH costs more than €100 million a year to run.
“The same chemicals are used in the UK as in Europe so there will be the same number of registrations to process. 21,000 chemicals have already been registered through REACH, 5,000 of which were registered by UK companies, and these will all have to be registered again with UK REACH.
“How can the new UK system, on such a small budget hope to record as many chemicals as thoroughly? What is being proposed is deeply flawed and the British people do not want standards to slip or any increased risks to people or the environment.
“Companies all over the world have spent 11 years, billions of pounds and a huge amount of work preparing for REACH regulations. At Aston Chemicals, our team spent 11 years preparing for REACH and we were not alone in this.
“It has been estimated that UK companies have spent over £600 million registering thousands of chemicals for REACH, and many of these are small and medium sized companies like us.”
Indeed, back in late 2018, the Alliance of Chemical Associations estimated that the cost to companies of submitting data for a UK-wide REACH system could amount to as much as £1bn.
“There will be chemical manufacturers who simply won’t want to do this solely for the UK market,” observes Dani. “The size of the UK market will not justify the huge costs involved, so it may be that some products will become unavailable after Brexit.
“For some companies, it will simply be more straightforward to manufacture their products in the EU rather than the UK. There is a risk that the UK will become an expensive, unfavourable and difficult place in which to base manufacturing.”
The chemical industry is the second largest industry in the UK and 60% of the UK chemical industry’s exports go to the EU. In Dani’s words the EU is “our biggest trading partner”, so you can understand why a no-deal scenario could be construed as catastrophic, and any form of Brexit will be severely detrimental to many UK industries.
The EU is after all the world’s biggest trading block and it is also close, and as economic models show, most countries do most of their trade with those countries geographically close by, due to factors such as easier, faster and cheaper transport between countries, aligned regulations and common standards and expectations.
Moreover, in the view of the vast majority of economists, EU membership has been overwhelmingly good for the British economy. Even Brexit-supporting economist Patrick Minford has said, “if we left the EU, it seems likely that we would mostly eliminate manufacturing”.
Dani clearly feels passionate about her company and the industry, but her concerns about Brexit go beyond her immediate commercial concerns, for she is worried about the broader impact on society too.
“I’m concerned about the decline in industry and the reduction in tax revenues and cuts to public services that are likely to come about as a result of Brexit. I feel the negative impact of any Brexit, and particularly “no-deal”, has been deliberately underplayed by hard-line brexiteers.
“There are issues with so many things we didn’t know would be the case back in June 2016 and questions that were never asked before the referendum. That is why I’d like to see a people’s vote, with a campaign based on verifiable facts.”
As Dani robustly put the case on Question Time: “We are all going to lose employment, taxes and our underfunded and overstretched public services are going to suffer.
“And when that happens it’s not going to be the Rees-Moggs and the Johnsons that are going to suffer, it’s going to be us – the working people of the UK.”