Intelligence Briefing - 12 February 2010

HM Treasury hears from manufacturing ahead of the Budget

EEF economists met with HM Treasury officials this week in advance of the Budget in March. As part of our regular engagement with the department we updated civil servants on the state of manufacturing and our forthcoming research on exports and business support. And in relation to the Budget, we cautioned against new spending commitments at a time when businesses are looking at a higher tax burden from April 2010.

For further information contact Lee Hopley, Chief Economist

Skills Funding or Skills Fudge?

EEF has this week written to the Skills Minister, Kevin Brennan MP, outlining our concerns about the creation of the new Skills Funding Agency (SFA) in April 2010. After a decade of seemingly endless transformations of the skills system we believed another round of upheaval in funding arrangements could be justified if the outcome was a flexible and demand-led system of funding. However, the new SFA will be run by the team that headed up its predecessor - the Learning and Skills Council. It is unclear how this new agency will be substantially different from the old one without the culture change that is really needed across the organisation. Therefore, a further reshuffle which results in the many of the same people undertaking the same roles under new titles would be the worst of all worlds. And if we are to develop world class skills we need a system that is responsive to the training needs of both employers and individuals. EEF has been engaged in this debate since the Leitch Review of Skills back in 2004. Our lobbying will continue with a general election and potential change of government.

For further information contact Nigel Fletcher, Skills Policy Adviser

EEF presses Chancellor on CCL relief cut

As Chair of the Manufacturers Climate Change Group (MCCG), EEF has written to the Chancellor, Alistair Darling urging HM Treasury to reconsider the decision set out in December’s Pre Budget Report to reduce the relief from the Climate Change Levy for participants of Climate Change Agreements from 80 per cent to 65 per cent. Providing convincing evidence to substantiate our case EEF and MCCG believe the decision to cut the relief rate is perverse in the current economic climate.

For further information contact Gareth Stace, Head of Climate & Environment Policy

In the news

Education, Employment and the EEF awards led coverage this week. We released a letter to the media which we had sent to the Skills Minister, Kevin Brennan MP regarding our concerns on the make up of the new Skills Funding Agency, reported in the Financial Times, Personnel Today and People Management. Coverage is still following on from the Manufacturers' Dinner where our key messages formed last week's business editorial in The Observer and the Daily Telegraph. Our views on the default retirement age were reported in Personnel Today and the success of our first ever EEF Awards is coming through in the regional coverage with regard to companies and the winning apprentices in the Sheffield Star and the Peterborough Telegraph.

Weekly focus

Climate & Environment Survey focuses on core environmental issues

This week sees the publication of our second environment survey from 2009, entitled ‘Measuring Performance’. Here the theme moves from our recent survey 'Seizing the Initiative' that highlighted manufacturing action on climate change, to take a closer look at core environmental issues, such as waste and resources.

This report focuses on UK manufacturers’ approach to environmental issues, and reveals several interesting findings for both manufacturers and policy makers. We found that whilst businesses had adopted a range of practical measures to manage environmental impacts, recycling was the most common measure adopted, with arguably more beneficial and integrated approaches, such as eco-design, only being considered by a small proportion of EEF members.

Although cost saving projects are being identified, the limited availability of credit to kick start these environmental schemes has been a limiting factor in take up. With clear evidence that UK manufacturers can drive down the costs in their businesses by adopting a more resource efficient approach, it is vital that key barriers to success, such as the availability of finance and awareness, must be urgently tackled by both manufacturers and government, if long term change is to be achieved.

A clear message to government is that regulation should be designed so that it facilitates organisations to improve efficiency within their processes and encourage behavioural change, to ensure that environmental projects are firmly embedded into the business strategy. In reality, we found that businesses see regulation as a costly bureaucratic burden. We therefore support the government efforts to simplify and streamline business support and review the policies for resource efficiency. If such a review is to be a success, then government must listen carefully to the manufacturing sector, to understand what works best within the business environment.

For more information contact Kevin Considine, Senior Climate & Environment Policy Adviser

Week in review

The week ahead

Tuesday 16th: Consumer Price Index
Wednesday 17th: Labour market statistics; MPC Minutes
Friday 19th: Retail sales

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