Intelligence Briefing 4 May 2012

News

Debating health and safety with key Minister

This week EEF hosted an Enterprise Forum breakfast discussion with Chris Grayling MP, Minister of State for Work and Pensions. The roundtable discussion centred on the government's progress on implementing the recommendations of Professor Lofstedt, who has set out proposals for simplifying health and safety regulations. There were also discussions around how this relates to EU policies and the government's ongoing Red Tape Challenge initiative.

For more information contact Rocky Lorusso, Senior External Affairs Adviser

EEF urges government to focus on using incentives to reduce waste

The role of service-based business models in reducing waste was the theme of a meeting with Defra this week as it explores ways to prevent waste from occurring. Under the revised Waste Framework Directive the government is required to put into place a waste prevention plan by the end of next year. This could include new regulation if Defra thought it appropriate.

The government is increasingly interested in the role of service-based models to extend the life of products. They think this could help to reduce the amount of waste that consumers generate. EEF urged government to think more about how they can use incentives to encourage action rather than regulation. For example, we suggested that they consider how manufacturers could be credited for producing durable products, repairing or remanufacturing their products under the waste electrical and electronic equipment regulations. EEF will be doing some more work on how the government could use incentives more effectively in this area.

If you have thoughts, views or comments then contact Susanne Baker, Senior Climate and Environment Policy Adviser

Access government funding to address your skills need

This week EEF met with Michael Davis, Chief Executive of the UK Commission for Employment and Skills, the stand-alone body set up by government to provide strategic leadership on the UK’s skills needs. One of the issues discussed, is an ongoing new scheme that is designed to give employers a greater say in how skills funding is spent – the Employee Ownership of Skills project.

Last week, the first round of challenge funding for employers wishing to invest in Skills and Training closed. The scheme, overseen by the UK Commission for Employment and Skills offers employers the opportunity of direct funding from Government for skills development and training which the employer wishes to invest in. This pilot offers all employers in England direct access to up to £250 million of public investment over the next two years, to design and deliver their own training and skills solutions.

The initial round of funding was limited to £50 million. A second round of funding with £200 million available is anticipated to commence in the Autumn and will give businesses a greater opportunity to secure direct funding. Some restrictions which existed in the first round of funding, such as the minimum value of £250,000, may be relaxed; employers who were unsuccessful in the first round should check before resubmitting their applications as any new rules may allow greater scope for groups of smaller businesses to successfully bid.

More information is available from the UKCES website.

Weekly focus

What to make of the PMI numbers?

The manufacturing PMI remain about 50 in April signalling the fifth consecutive month of expanding activity. However, the pace of growth slowed, largely on the back of a reduction in new export orders. The survey noted particular weakness in European demand, tallying with the continuing slide of manufacturing activity indicators across the EU. Continuing concerns – both economic and political – are weighing heavily on confidence in both manufacturing and services.

In line with recent EEF surveys there is a contrasting picture by sector, with manufacturers supplying consumer goods reporting more difficult trading conditions compared with intermediate and investment goods sector still seeing rising production levels. There were other positive elements within the survey – price pressures abated somewhat in April and there were some signs of recruitment across the sector.

Overall the survey notes a reasonably positive start to the second quarter for manufacturing, but ever-present eurozone woes are still bearing down on the short term outlook. The ability of UK manufacturers to tap into growing global demand has been an important source of growth; without this the uncertainty about whether we can regain significant momentum behind the recovery will remain.

EEF’s own quarterly Trends survey is currently in the field, to be released in June, and should help to give us a clearer picture of how our members are faring.

For further information contact Lee Hopley, Chief Economist

In the news

You can read our response to the PMI in the Telegraph and on the BBC’s website. Our message on the danger to business competitiveness from continuing high energy costs was featured in a story in the FT, an issue on which we are continuing to campaign.

Week in review

The week ahead

Thu 10th: MPC decision; Index of Production
Fri 11th: Producer Price Index

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