Intelligence Briefing - 22 January 2010

Published: 22/01/2010

EEF's weekly briefing on the issues affecting manufacturers, including an update on our campaigning against a change on new directors' health and safety law, as well as our regular round up of how we are representing manufacturers and the latest economic indicators.

Minister challenged on Better Regulation

Government must include climate change within its efforts to simplify regulation. That was the message we gave this week at the latest meeting of the Department for Business’s Ministerial Challenge Panel. The government is about to embark on the latest stage of its efforts to reduce administrative burdens on business, but we urged Business Minister, Ian Lucas MP, to ensure that climate change policy is not treated as a special case, which should be kept exempt. We also argued that government needs to communicate its plans to business more clearly.

For further information, contact Stephen Radley, Director of Policy and External Affairs

Treasury urged to reverse decision to cut energy tax rebates

EEF has continued to press Treasury to reverse its decision to cut energy tax relief for energy intensive businesses. Companies which meet energy efficiency targets set by government qualify for a rebate from the Climate Change Levy through existing Climate Change Agreement. But changes outlined in the Pre Budget Report, will amount to extra costs of £50m on industry. We are arguing that this change is extremely damaging, especially in the current economic climate. We will continue to push ministers to rethink this decision.

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

EEF presses home post-Copenhagen concerns

Officials at the Department of Energy and Climate Change and the Business Department were warned this week by EEF that the UK manufacturing still faces competitive threats following the climate talks in Copenhagen. We stressed that in light of the weak agreement brokered in Copenhagen, it is now vital that the government does not place any additional burdens on industry. Instead, it should also seek to strengthen industry by increasing financial support for research, development and demonstration (RD&D) projects to develop crucial breakthrough technologies, which can provide new jobs in the UK and yield substantial reductions in global emissions.

For further information contact Susanne Baker, Senior Climate & Environment Policy Adviser

Government publishes Agency Workers regulations

The Agency Workers Regulations have been laid before Parliament this week. Following EEF lobbying, it has been confirmed that this legislation will come into force in October 2011, resisting pressure from the Trade Unions for its earlier implementation. However, we remain concerned about the costs and administrative burdens that this new legislation will impose on employers. We have also called for clear and early guidance. The issue of Agency Workers was one of the major issues of concern to emerge from EEF’s Employment Survey 2010, which is now available on our website.

For further information contact David Yeandle, Head of Employment Policy


In the news

There have been a number of issues for us to get hot under the collar about this week. We were critical of proposals on equal pay, which we believe were altered for political reasons, as well as Conservative proposals on flexible working. Earlier in the week we had also warned of the potential damage to investment from Conservative proposals on tax. In a general economic piece the Sunday Times referred back to our economic forecasts and The Economist featured our recent report on companies bringing production back to the UK as part of a feature on the Cadbury deal. Finally we commented on the guidelines for Agency Workers in Personnel Today.

Weekly focus

Decision on new directors’ health and safety law

In February the Health and Safety Executive Board is due to decide whether to recommend further personal legal duties on company directors. If found guilty of an offence a director would face up to two years in prison. Options include a general duty to take all reasonable steps to ensure health and safety and specific actions, including appointment of a health and safety director.

The HSE Board last discussed the issue in 2006 and decided then to keep the law unchanged and instead to run a 3 year promotional campaign before reviewing progress. They are now coming under great pressure from trades unions and safety campaigners to impose additional duties. Their decision remains very much in the balance.

EEF is campaigning hard against a change; speaking to HSE Board members, officials and politicians to ensure they are well aware of the arguments. Our 2008 health and safety survey showed a dramatic change in the involvement of directors over the previous 3 years, demonstrating that the current approach is working. We will shortly launch our latest survey report and will be sending copies to HSE Board members.

Current legislation is quite adequate. It allows directors to be held to account if their action, negligence or connivance causes their company to commit an offence. Following recent legal changes, the maximum penalty is now 2 years imprisonment and / or an unlimited fine. A further, specific duty could well result in boards spending more time ensuring that paperwork is watertight to protect them from prosecution, and less time on practical action to protect workers from harm.

It also makes no sense to impose a new law when recent changes are still working their way through the system. We have yet to see the first trial under the Corporate Manslaughter Act or the application of new penalties, including imprisonment for offences committed by an individual.

EEF will continue pressing for the current approach to be maintained.

Week in review



CPI inflation rose to an annual rate of 2.9% in December, up from 1.9% in November and 1.5% in October. RPI inflation excluding mortgage interest payments jumped to an annual rate 3.8%.

Average earnings

The annual rate of earnings growth across the economy was 0.7% in the three months to November, up 0.1 percentage points from October. In manufacturing, annual average earnings growth including bonuses was unchanged at 1.6% in the three months to November.

Labour market

The ILO measure of unemployment fell by 7,000 to 2.458 million in the three months to November. The three-month unemployment rate came in at 7.8%.The claimant count measure of unemployment – which records the number of people claiming Job Seekers’ Allowance – fell by 15,200 to 1.607 million, the second consecutive decline.

Retail sales

Retail sales rose by 2.7% in the last three months of 2009, compared with the previous year.

MPC minutes

The MPC voted unanimously to keep its Bank Rate at 0.5% and maintain its £200bn quantitative easing programme. The overall message from the meeting was that little had happened to change the economic and inflation outlook since November, and so no change in policy was warranted.



The week ahead

Tuesday 26th: GDP
Friday 29th: Consumer Confidence

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