Intelligence Briefing - 08 April 2011

Invitation for focus groups on the revised WEEE Directive

In early March, political agreement was reached on some aspects of a revised Directive on waste electrical and electronic equipment (EEE). The proposals could potentially have significant financial and administrative implications for manufacturers of a broad range of electronic equipment.

As it stands manufacturers would be required to pay for the collection of significantly higher amounts of EEE than is currently the case (65% by 2020 compared to 36% now). Local authorities are fighting for this to cover collections from people’s homes. Manufacturers would also have to pay for this EEE to be treated to much higher standards. The type of EEE captured by the Directive might encompass a much wider range of equipment than is currently the case, bringing in a much broader range of products, professional and industrial, as well as consumer products.

To fall under the Directive, EEE must: be dependent on electric currents or electromagnetic fields in order to work properly, including equipment for the generation, transfer and measurement of such currents and fields; be designed for use with a voltage rating not exceeding 1,000V for alternating current and 1,500V for direct current.

EEF is working collaboratively with other manufacturing groups producing EEE and is preparing to represent the interests of UK manufacturers as the Directive goes through second reading in Brussels during the latter half of the year. The aim is to lobby for a Directive which is cost-effective and achievable with the minimum administrative burden placed on manufacturers. Lobbying of our national government will commence with a meeting on 10 May.

In advance, we will be holding focus groups in April with potentially affected members in order to discuss the themes in the Directive, identify the potential issues and possible solutions. If you might be/are affected and would like to participate in a focus group please contact Susanne Baker

Major UK Banks Make Start on Better Bank-Business Relations

The major UK banks have started to deliver on their October 2010 Business Finance Taskforce commitments to improve customer relations with business by pledging adherence to a new Lending Code for micro-businesses (turnover up to €2 million pa), lending principles for larger SMEs (turnover up to £25 million pa), and a monitoring and appeals process for declined loan requests. Under the Code and principles you can expect:

• SMEs will be allowed to bring advisers to all talks with bank managers;
• In-house guides or industry-standard literature will be used to provide guidance on factors that influence lending prices;
• Customers can always expect to be informed how long a lending decision will take;
• Effective review processes will be in place for declined lending requests;
• Clear feedback will be provided on why loans are declined to customers concerned;

The major banks included are: RBS, Lloyds, HSBC, Barclays, Santander, and Standard Chartered. The Code, principles, and appeals process should be known by your local bank and we would like to hear about it if your bank manager is not aware of these.

EEF has put out a formal statement on these changes is available and an EEF blog post can be read here . The lending code can be read here and the lending principles are here .

For more information contact Andrew Johnson, Senior Economist

EEF Joins New MoD Forum on SMEs

In March the Secretary of State for Defence, Dr Liam Fox, announced he would set up a Defence Supplier Forum comprised of senior industry executives to ensure the MoD works better with its suppliers. The MoD has also set up a sub-group, chaired by Defence Minister Peter Luff, to focus on SME-specific issues and EEF was one of a small group of business organisations invited to join the group. The purpose of the group will be to help the MoD increase the value and innovation it gets from SMEs.

The initial meeting focused on whether the MoD fully understood the needs of SMEs and the Government’s efforts to increase SME engagement. EEF suggested that a risk-averse MoD likely had a poor understanding of SMEs and supply chains. This risk aversion led it to prefer engaging with prime contractors rather than directly with SMEs, adding to costs, reducing competition and eroding the MoD’s institutional knowledge of the supplier base. For many manufacturers, defence contracts could often be only a small proportion of turnover. Consequently, EEF noted, the onerous and time-consuming process of tendering for defence contracts put many SMEs off from supplying to the defence industry.

Although the attendees at the initial meeting were solely from trade associations, the Minister wants SME involvement at future meetings. The SME sub-group will meet three times a year, so please let EEF know if you are interested in contributing to this group and, potentially, attending future meetings.

For more information contact Jeegar Kakkad, Senior Economist

Economic news led our press coverage this week. We began the week by urging the Bank of England to leave interest rates on hold which was the lead story in The Independent . Following the Bank’s decision our response led the BBC coverage and was also reported in the Daily Mail and heavily across the regions. Our views on the damage to competitiveness from the Carbon Price Floor was reported in the FT , whilst on employment related issues our Director of Apprentices & Skills Peter Winebloom was featured in a Daily Telegraph article on apprenticeships. Furthermore, interviews were given by Lee Hopley, Chief Economist to Radio 5 drive time on the PMI numbers and Policy Director, Steve Radley, to Sky News on Interest Rates.

Tue 12th: CPI; UK Trade

Wed 13th: Labour Market Statistics

Thu 14th: EEF Pay Settlements

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