Intelligence Briefing 18th June 2015

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In this issue: Weekly Focus: EEF publishes annual Sickness Absence survey | Productivity on the agenda in meeting with Chancellor | Influence the immigration policy agenda with EEF’s Immigration Working Group | EEF submits evidence to Treasury review of business rates | Climate, Energy and Environment Committee meets with Committee on Climate Change Chief Executive | European Manufacturers debate EU Digital Single Market Strategy | Call for National Women in Engineering Day | Invitation to Industrial Injuries Advisory Council public meeting | Invitation to Aldermore Leeds business lounge opening | In Parliament | In the Media | Week in Review | The week ahead | Blogs from this week

Weekly Focus: EEF publishes annual Sickness Absence survey

This week EEF published its annual Sickness Absence survey with Jelf Employee Benefits, which reveals employers and GPs are struggling to address mental health issues in the workplace and growing concerns at long-term absence trends.

According to the survey, overall sickness absence remains low at 5.1 days (2.2%), with half of employees having zero absence. However, this masks evidence that ‘sickness presenteeism’, which marked the period of recession, is fading away. Absence levels increased slightly by 0.2 days, the number of manual workers reporting zero absence fell away for the first time in five years, and only 55 per cent of companies hit their absence target, the lowest since 2008.

While overall absence levels remain low, long-term absence has seen its largest increase in five years. Two fifths of companies reported an increase in long-term absence, with back pain and musculoskeletal disorders remaining the top cause of long-term absence (37%), and stress and mental health disorders the main cause for one in four companies.

Stress and mental health is regarded as the most difficult form of absence to make workplace adjustments for, and EEF is calling on government, employers and GPs to tackle the rising levels. Worryingly, a third of employers said they do not have approaches for managing mental health related long-term absence, and evidence suggests GPs also find it difficult to suggest workplace adjustments, highlighting the need for more training in this area. Just one in ten companies provide training for line managers on mental health issues, suggesting business matches society in finding it a difficult issue to address.

The survey also shows that employers’ approach to managing absence remains mixed. More companies are setting absence targets and two fifths can make workplace adjustments or provide training to manage long-term absence. However, almost three quarters of companies do not measure the cost of sickness absence and 70 per cent do not measure the return on their investment for the health and well-being benefits they offer.

EEF believes the new Fit for Work service will be critical in reducing long-term absence but doubts whether the current tax incentive offered is sufficient enough to encourage employers to pay for treatment. EEF has therefore made the following recommendations for the service to success:

  1. Ensure the service is resourced with healthcare professionals with knowledge of different industries so that appropriate interventions and adjustments can be made.
  2. Ensure return to work plans are discussed with all relevant parties before they are agreed and finalised.
  3. A discussion between the employer and Fit for Work service before it is agreed with the employee.
  4. Introduce health tax credits or allowable business expenses to incentivise employers to pay for treatment recommended by the Service or Occupational Health provider.
  5. Mandatory referral of employees who are likely to be absent for more than four weeks.
  6. Statutory Sick Pay paid only on condition the employee co-operates with the Fit for Work Service.
  7. Restrictions on GPs signing employees off for more than four weeks unless the patient engages with the service.

For more information about the report contact Terry Woolmer, Head of Health and Safety Policy

Productivity on the agenda in meeting with Chancellor

EEF met the Chancellor of the Exchequer, Rt Hon George Osborne MP, to discuss key productivity issues facing manufacturers. We emphasised ways the government could prioritise spending to best support industrial productivity and competitiveness. EEF stressed that actively supporting investment, innovation and training by manufacturing companies would contribute to the government’s overall goal of increased productivity, creating 3 million new apprenticeships and boosting exports. We also discussed energy taxation and exports. EEF will continue to engage with the Chancellor and the Treasury to ensure that government policy supports manufacturers that are working to improve their competitiveness.

For more information contact Paul Raynes, Policy Director

Influence the immigration policy agenda with EEF’s Immigration Working Group

EEF is acting on a series of key Government announcements on immigration reform. In order to have a strong evidence base and mitigate the negative consequences these announcements will have in advance, EEF is looking for members interested in joining its Immigration Working Group. The Group will play a fundamental role in shaping EEF’s policy position on the below issues, and wider immigration debate.

Removal of job roles on shortage occupation list: The Prime Minister has asked the Migration Advisory Committee (MAC) to review the shortage occupation list again and remove many of the job roles currently on it, in order to reduce employers’ reliance on workers from outside Europe. The list currently allows employers to recruit outside of Europe without having to undertake the Resident Labour Market Test, which requires employers to advertise the vacancy in the UK for a minimum of 28 days first.

Introduction of skills levy on firms that recruit from overseas: The Immigration Bill includes provisions for a new levy to be imposed on employers recruiting outside of Europe to fund UK apprenticeships. It is likely that the levy will apply to Tier 2 General visa and potentially Intra-Company Transfers. It is not clear yet how the levy will be imposed, collated or distributed, but more information will be announced ahead of a consultation due in September this year.

Monthly cap on restricted certificate of sponsorships met: For the first time, the cap on the number of restricted certificate of sponsorships, allocated to employers to recruit highly skilled workers from outside of Europe, has been met. This is the first time that firms have seen requests rejected, even for job roles which are paying a significant salary. It may now be the case that in the coming months the number of workers businesses can recruiting from abroad is limited further, due to the annual cap of 20,700 now more likely to be met.

EEF will be responding to the MAC review of the shortage occupation list and the skills levy consultation. We will also be talking directly to senior officials at BIS, the Home Office and the MAC to mitigate the negative consequences these announcements will have in advance.

For more information on any of these issues or to join EEF’s Immigration Working Group, contact Verity O’Keefe, Senior Employment and Skills Policy Adviser

EEF submits evidence to Treasury review of business rates

EEF has submitted evidence to the HM Treasury consultation on the structural review of business rates, highlighting the impact of the system on manufacturers. Our main recommendation was for plant and machinery to be removed from the calculation of site assessments in the future. Our evidence shows that Britain is in the minority when it comes to taxing equipment and machinery - a burden that weighs more heavily on investment intensive sectors such as manufacturing.

In addition to our previous recommendations we also called for business investments which improve the use of energy, and with it business productivity, to be treated in a neutral way. At present such investments lead to an increase in the business rates liability of properties.

For more information contact Christopher Richards, Senior Business Environment Policy Advisor

Climate, Energy and Environment Committee meets with Committee on Climate Change Chief Executive

EEF’s Climate, Energy and Environment Committee hosted Matthew Bell, the Chief Executive of the Committee on Climate Change (CCC), at its annual dinner in Cambridge. Mr Bell outlined the CCC’s work programme for the forthcoming year, including advice to government on the size of the fifth carbon budget (covering 2028-32), its annual progress report to Parliament published this month, and forthcoming advice on the compatibility of UK shale gas production and emissions reductions. His speech was followed by a robust discussion on the importance, impact and relevance of carbon budgets to the UK’s manufacturing sector.

The dinner followed on from the Climate, Energy and Environment Committee’s visit to Cambridge University’s Institute for Manufacturing’s EPSRC Centre for Industrial Sustainability, where it was introduced to ground-breaking research on industrial sustainability and sustainable business models. EEF will continue to engage with the CCC and other stakeholders on the progress of carbon budgets and its effect on UK manufacturers.

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

European Manufacturers debate EU Digital Single Market Strategy

EEF took part in a debate on the European Commission’s Digital Single Market Strategy at the European Forum for Manufacturing. Eric Mamer, lead representative on the subject in the Cabinet of the Commissioner for Digital Economy, presented the Commission’s current proposal and responded to interventions from MEPs and industry representatives. The debate covered topics such as production technologies, security of networks and standardisation, and was chaired by Conservative MEP Vicky Ford, who is Chair of the Parliamentary Internal Market and Consumer Protection Committee. The forthcoming EU Netherlands Presidency also made a presentation on their plans in this key policy area for manufacturing. EEF will continue to engage with MEPs from all parties and industry representatives to secure a Digital Single Market Strategy that works for manufacturers.

For more information contact Fergus McReynolds, Director of EU Affairs

Call for National Women in Engineering Day

Tuesday 23rd June is National Women in Engineering Day – designed to raise the profile and celebrate the achievements of women in engineering. It’s a great opportunity to raise awareness amongst young women, their parents and teachers about the range of rewarding jobs and careers available in our sector. With this in mind, EEF aims to drive discussion on the day through media and social media and wants to hear from any inspiring women working in manufacturing who would be interested in acting as a case study on the day, should the media be looking to interview any companies. If you or any female apprentices in your company would like to take part or for more information about how to get involved, contact Verity O’Keefe, Senior Employment and Skills Advisor

Invitation to Industrial Injuries Advisory Council public meeting

The Industrial Injuries Advisory Council (IIAC) is holding its annual public meeting at Mary Sumner House in London on 2nd July. This is an opportunity for members of the public and those with an interest in occupational disease to learn about the work of the IIAC, find out what they have been working on and ask questions.

To find out more or to register to attend visit the Government website.

Invitation to Aldermore Leeds business lounge opening

Aldermore Bank is inviting local microbusinesses, businesses employing less than 10 people, to a free seminar in Leeds on 9th July as part of the opening of its new business lounge in Leeds. Microbusinesses will have the opportunity to learn about pension auto enrolment and hear from Enterprise Rockers co-founder Tony Robinson OBE about enterprise tips. For more information about the Business Lounge or to register for the event, please email

In Parliament

During the second reading of the EU Referendum Bill in the House of Commons, Phil Wilson MP echoed EEF’s message that British manufacturers remain overwhelmingly in favour of remaining in the EU.

In a House of Lords debate on the Queen’s Speech, Lord Northbrook referenced EEF’s comments on the proposed visa levy on businesses employing foreign labour. Lord Fox also mentioned the latest Manufacturing Outlook report in the context of productivity.

In the media

The findings from our annual Sickness Absence survey featured in The Times (link unavailable).

EEF’s Chief Economist Lee Hopley was interviewed on this week’s trade figures and exporting on BBC Newsnight.

EEF’s call for the EU referendum to be held as soon as feasibly possible to avoid business uncertainty was repeated in The Daily Mail.

For more information contact Sophie Carroll, External Affairs Executive

Week in review

Consumer prices

The annual rate of CPI inflation increased to 0.1% in the year to May, on the back of easing downward pressures from food and motor fuel prices. The most significant upward contribution came from transport services, namely from air fares, likely down to the timing of Easter in April this year.

Labour market statistics

The number of people in employment up by 114,000 in the three months to April compared with the previous three-month period. And the ILO measure of unemployment fell by 43,000 in the three months to April. While still an improvement, this was the smallest quarterly fall in unemployment since the three months to September 2013.

Similarly, the Claimant Count measure of unemployment – which records the number of people claiming Job Seekers’ Allowance – fell for a thirty first consecutive month, but the number of claimants fell by the smallest amount since February 2013.

Manufacturing jobs

In line with the positive picture for the whole economy, the number of jobs in manufacturing has continued to grow, with employment up 1.3% in the first quarter of 2015. However, in contrast to the whole economy, the pace of growth was the fastest since 2012 Q1.

The week ahead

No major UK statistical releases expected

Blogs from this week

15 Jun 2015 - How the government can improve the business rates system for manufacturers by Chris Richards

15 Jun 2015 - Week ahead 15th June by Felicity Burch

16 Jun 2015 - Inflation back in positive territory by George Nikolaidis

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