Intelligence Briefing 3rd December 2015

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In this issue: EEF hosts roundtable discussion with Business, Innovation and Skills Committee Chair Iain Wright MP | Politics and business issues discussed with Downing Street adviser | Steel on the agenda with Secretary of State for Wales | Science and Technology Committee keen to hear members’ reactions to Spending Review | Meeting with Chair of Transport Committee | Transport Committee inquiry into skills and workforce planning in the road haulage sector | EEF briefs peers on the new Apprenticeship Levy | EEF responds to cancellation of UK Carbon Capture and Storage projects | EEF voices concerns over the feasibility of the Fifth Carbon Budget | HMRC launches advanced assurances scheme for R&D tax relief | In Parliament | In the Media | Week in Review | The week ahead | Blogs from this week

EEF hosts roundtable discussion with Business, Innovation and Skills Committee Chair Iain Wright MP

EEF hosted a small roundtable dinner for members to discuss policy issues with the Chair of the Business, Innovation and Skills Committee, Iain Wright MP. Mr Wright briefed members on his committee's work programme, including its review of productivity and the steel industry. He also invited members to bring forward ideas for future select committee inquiries.

For further information please contact Hywel Jarman, Director of External Affairs

Politics and business issues discussed with Downing Street adviser

This week EEF’s Government Affairs Group held a roundtable dinner with Daniel Korski, Deputy Head of the Downing Street Policy Unit, as part of its regular engagement with key advisers. Main topics of discussion included the implementation of the Apprenticeship Levy and Modern Slavery Act, prospects for boosting trade, and the ongoing EU renegotiation and forthcoming referendum and the role business will play in the debate. As always, EEF will continue to engage with senior advisers and officials across Government, particularly in the lead-up to the next Budget Statement, which has now been confirmed for 16 March.

For further information please contact Rocky Lorusso, Head of Government Affairs

Steel on the agenda with Secretary of State for Wales

EEF and UK Steel met Rt Hon Stephen Crabb MP, Secretary of State for Wales, to discuss the Government’s strategy for the UK steel industry and key themes ahead of the 2016 Welsh elections. We discussed the need for Government to deliver a comprehensive industrial strategy to rebalance the Welsh economy and support manufacturing, as well how they can support the UK steel industry in both the short and long term. The Secretary of State was supportive of EEF and UK Steel’s key asks and agreed that the steel sector is an important part of the UK economy. We will continue to engage with Ministers on support for the steel sector.

For further information please contact Gareth Stace, Director of UK Steel

Science and Technology Committee keen to hear members’ reactions to Spending Review

EEF met Nicola Blackwood MP, Chair of the Science and Technology Committee. We discussed recent trends in innovation in manufacturing, the Committee’s recent report into science funding, and manufacturers’ reaction to the Spending Review. The Science and Technology Committee are interested in hearing more on members’ reactions to Spending Review announcements on increased funding for Catapult centres, and the move of some Innovate UK support from grants to loans.

If you would like to provide any comments please contact Felicity Burch, Senior Economist

Meeting with Chair of Transport Committee

EEF met Louise Ellman MP, Chair of the Transport Committee, to brief her on manufacturers’ infrastructure priorities. We highlighted the need for the recently-announced Roads Fund to be extended to cover the local road network and discussed the importance of Heathrow expansion to manufacturing. EEF will continue to meet and brief Parliamentarians on the key issues that can contribute to making Britain a better place for the manufacturing sector to thrive.

For further information please contact Christopher Richards, Senior Business Environment Policy Adviser

Transport Committee inquiry into skills and workforce planning in the road haulage sector

The Transport Committee is currently conducting an inquiry into skills and workforce planning in the road haulage sector. The Committee is keen to talk to companies directly as part of their inquiry, particularly those who manage their own fleet or have an in house logistics provider. The inquiry covers the following points:

  • The role of Government in supporting recruitment, and encouraging a diverse workforce, for the road haulage industry.
  • The role of the Driver Certificate of Professional Competence (CPC) qualification in improving the professionalism and safety of drivers from the UK and abroad on UK roads.
  • Aspects of current Government policy which may deter new entrants to the workforce e.g. proposals to ban daytime deliveries in cities.
  • The quality of daytime and overnight facilities for road freight drivers.

The full terms of reference, including how to get in touch with the Select Committee to make a submission, can be found here.

EEF briefs peers on the new Apprenticeship Levy

Following the announcement of the new levy on larger employers, EEF has continued to raise its concerns with peers, recently meeting with Lord Aberdare. The Lord, who has a particular interest in apprenticeships, was concerned by the potential consequences of the levy, and the reduction of manufacturers’ ability to directly invest in apprenticeships if the levy did not allow an easy route to employer funding. The levy will require primary legislation, and will be subject to Parliamentary scrutiny next year in the House of Lords, when the impact of the levy on high-quality apprenticeships will be raised.

For further information please contact Tim Thomas, Head of Employment Policy

EEF responds to cancellation of UK Carbon Capture and Storage projects

Last week’s Spending Review included the decision to withdraw the £1 billion of capital funding for two power sector carbon capture and storage (CCS) projects. EEF has warned that the effective cancellation of the UK’s CCS programme means that the costs of hitting decarbonisation targets are likely to rise significantly, with the additional burden falling largely on energy consumers. Furthermore, it could leave sectors such as steel and cement exposed to increasing carbon costs. EEF will be working in the coming months, particularly through the 2050 Industrial Decarbonisation Roadmaps project, to try and help establish a new way forward in this area.

For further information please contact Richard Warren, Senior Energy and Environment Policy Adviser

EEF voices concerns over the feasibility of the Fifth Carbon Budget

The Committee on Climate Change’s (CCC) advice on the level of the Fifth Carbon Budget, the UK’s legally binding emissions reduction target for the period 2028 to 2032, was published last week, calling for a reduction of 57% by 2030. There are, however, growing concerns regarding the mismatch between our targets and the policy drivers in place to deliver them. It is essential that Government demonstrates an alignment of ambition, policy and financial commitment. EEF will be engaging with both the CCC, Government officials and Ministers in advance of the Government’s response to the advice due, by June 2016.

For further information please contact Richard Warren, Senior Energy and Environment Policy Adviser

HMRC launches advanced assurances scheme for R&D tax relief

On 30 November, HMRC launched an advanced assurances scheme for small companies seeking to claim R&D tax reliefs for the first time. The scheme is designed to provide companies with certainty about their first few R&D tax credit claims. In order to receive advanced assurances, eligible companies provide HMRC with details of their R&D prior to making formal claims in company tax returns. Specialists at HMRC will then review applications received, and advise the company applying whether or not the activity qualifies for relief, and whether the costs claimed are qualifying costs. Once received, advanced assurances mean that for the first three accounting periods of claiming R&D tax relief, HMRC will allow a company’s claim without further enquiries. The scheme is currently open to first-time R&D tax credit claimants with a turnover below £2mn and fewer than 50 employees.

For further information please contact Felicity Burch, Senior Economist

In Parliament

Responding to a question on the apprenticeship levy, Parliamentary Under-Secretary for Business, Innovation and Skills, Baroness Neville-Rolfe, said her department was having ‘continuous dialogue’ with EEF as a major representative organisation.

Shadow Business Minister, Stephen Doughty MP, referenced EEF in a debate on Government’s ability to levy a charge on trade unions, saying the legislation could apply to employers’ organisations.

Cardiff Central MP Jo Stevens quoted a speech by former Business Secretary Vince Cable on tribunal fees, referencing that is was delivered at EEF’s national conference.

In the media

EEF and UK Steel’s responses to last week’s Spending Review announcement were widely reported in The Financial Times (£), The Daily Telegraph (£), The Guardian and The Daily Mail . Chief Economist Lee Hopley was interviewed on BBC News. The Guardian and Sky News quoted EEF’s response to the decision to cancel the carbon and capture storage competition.

EEF’s response to the latest GDP data featured in The Financial Times (£), The Guardian, The Independent and The Evening Standard, and Chief Economist Lee Hopley was interviewed on BBC Radio 5 Live. The Financial Times (£) and The Independent quoted our response to the latest PMI data.

For more information contact Sophie Carroll, External Affairs Executive

Week in review

Manufacturing PMI

The manufacturing PMI eased back to 52.7 in November, from a revised figure of 55.2 in October. This marks the thirty-second consecutive month of expansion in the measure. Despite the weakening from last month, the result remains above survey’s long-term average (51.5).

The week ahead

8th December: Index of production, index of manufacturing
10th December: UK trade

Blogs from this week

30 Nov 2015
A Monday morning look at this week's data and statistics relevant to UK manufacturing by Felicity Burch

1 Dec 2015
PMI shows a mixed story for UK manufacturing by Zach Witton

2 Dec 2015
Your response to the survey will allow EEF to speak more authoritatively on this crucial subject by Chris Richards

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