Intelligence Briefing - 23 July 2010

This is the last Intelligence Briefing before the Summer - we will return in early September 2010.

Low carbon priorities discussed with government Ministers

EEF participated in a roundtable discussion with Ministers from BIS, DECC and DEFRA on the low carbon economy this week. Ministers were interested in what more government could do to overcome some of the barriers to maximising business opportunities from low carbon and clean technology development. The message from EEF and other participants was that the government needed to quickly show leadership and prioritise resources and support on technologies the UK can exploit and bring to market. But all Departments needed to deliver a supportive business environment for emerging sectors – including tax, skills policy, procurement and access to finance.

For further information contact Lee Hopley, Chief Economist

DON’T MISS OUT – Future Manufacturing Awards entry deadline less than 1 week away!

It’s not too late – there’s still one week left to download your entry forms to enter our prestigious manufacturing awards.

Entry is free and open to all UK manufacturers and many of last year’s winners have proven to be excellent case studies helping in our lobbying efforts on behalf of industry.

With just 3 simple questions to answer, it won’t take long to fill out your form. We’re happy to help too, so give us a call or drop us an email if you need a hand.

Contact the awards team on 020 7654 1509 with your queries, or visit the website: www.eef.org.uk/awards

EEF cautions DEFRA on its waste enforcement proposals

The decision to put forward a number of enforcement options for the separate collection of waste in the consultation for the transposition of the revised waste framework directive was criticised by EEF at a meeting with DEFRA this week.

Having recently introduced a new range of civil sanctions for environmental regulators, we argued that the government must now support these measures as the principal civil enforcement mechanism and not seek to introduce further complexity and uncertainty. We will further articulate our concerns in a formal response to the consultation which closes for comments on 16 September.

Members with concerns/comments are encouraged to contact Kevin Considine, Senior Climate & Environment Policy Adviser.

Clarification achieved on health and safety enforcement

EEF has resolved confusion about control of asthma risks from metalworking fluids by agreeing guidance with the Health and Safety Executive. HSE had been taking a robust enforcement line where it found cases of occupational asthma and a lung condition called alveolitis, but had not been willing to provide clear guidance on the controls it expects at different machines. EEF has therefore drafted comprehensive guidance and agreed this with HSE. It identifies a 6 point approach to managing the risks as well as the types of controls appropriate for different engineering processes.

For further information contact Steve Pointer, Head of Health and Safety Policy.

EEF leads REACH sector action

We have chaired a meeting of key sector organisations with significant concerns over the current lack of certainty surrounding the ‘registration’ of chemicals under REACH and the business continuity risks this poses to UK manufacturers. Sharing intelligence on current REACH concerns and activity the group agreed to coordinate future efforts, where possible, to ensure greater consistency in messaging and government lobbying, ahead of the December registration deadline. Highlighting our concerns on REACH in a recent national news article we have called on government to carry out a review of the risks REACH poses to industry.

For further information contact: Kevin Considine, Senior Climate & Environment Policy Adviser.

Weekly focus - review of Pensions Auto-enrolment

An integral part of the previous Government’s pension reform programme, which EEF had supported, was the introduction of auto-enrolment into a qualifying pension scheme including the new National Employment Savings Trust (NEST) on a staged basis from 2012 with a compulsory employer contribution of 3% of a band of earnings for those employees who did not opt out.

The new Coalition Government has stated that it supports the introduction of auto-enrolment from 2012 but it has recently asked a team of 3 independent experts, including David Yeandle, EEF’s Head of Employment Policy, to consider how best to support the implementation of auto-enrolment. The independent review team has been asked to report back to the Government with its analysis, conclusions and recommendations by 30 September 2010.

You can read the full terms of reference for this review here, but some of the key issues that the review team will be examining are:

• Whether the current approach strikes the right balance between cost and benefits to individuals, employers and for the taxpayer, particularly in the light of current economic conditions?
• Should the target group for auto-enrolment remain the same?
• Is NEST, as currently envisaged, the most effective way to deliver future access to workplace pension saving

The review team, which is being led by Paul Johnson of Frontier Economics and also includes Adrian Boulding from Legal and General, has already had a series of discussions with key stakeholders and is now holding seminars with representatives of employers and some individual employers, the private pensions industry and representatives of employees and consumers.

If EEF members have any comments on this review and the issues that David Yeandle and his colleagues will be examining, they should send them to David Yeandle at dyeandle@eef.org.uk or to caxtonhouse.auto-enrolmentreview@dwp.gsi.gov.uk by 13 August 2010.

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In the news

Our Senior Economist's view of the increase in GDP figures was included in The Guardian's round up of views.

This week saw further follow up to EEF’s energy action plan and emissions reduction debate with the Director of UK Steel Ian Rodgers appearing in debates on Radio 4 Today programme and Radio 5 Wake up to Money, whilst our views were the subject of an editorial column in Utility Week.

Our latest opinion column also appeared in Manufacturing Digital magazine where we have also taken the chance to call for final entries to our awards scheme. Our Policy Director, Steve Radley, had his latest opinion column in The Manufacturer.

Week in Review

	Public Sector Borrowing	Public Sector Net Borrowing in June was £14.5bn, slightly higher than was expected. Public Sector Net Debt is now £903bn, equivalent to 64% of GDP.
	MPC minutes	The MPC minutes showed, as with last month, that all members but Andrew Sentence – who called for a 0.25pp rise in interest rates – voted to keep interest rates and QE on hold. Whilst it was generally felt that government spending cuts and spare capacity would have a dampening effect on inflation, concerns were raised about the extent of this spare capacity and consumers’ expectations after several months of above-target inflation.
	Retail sales	Retail sales volumes (excluding volatile petrol sales) rose by 1.0% on the month in June, with each component of the measure rising. In particular household goods and general stores saw strong sales growth of 1.6% and 1.5% respectively.
	GDP (Q2)	Initial estimates for GDP in q2 showed 1.1% growth over the quarter – considerably higher than was expected (the consensus estimate was 0.6%) – the largest contributors to growth were business services and finance, and construction.
	Index of Services	Compared with May 2009, output in the service sector was 2.1% higher in May 2010, with growth in all five component sectors. Business services and finance was the largest contributor to growth, growing at 2.5%.

The week ahead

Fri 30th: ONS Blue book; ONS pink book; GfK consumer confidence.

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