Written evidence from the Federation of
Small Businesses
INTRODUCTION
The Federation of Small Business ("FSB")
is the UK's leading and largest non-party political lobbying group
for small businesses. It exists to promote and protect the interests
of all who own and/or manage their own businesses. It has over
185,000 members across the UK and some 8,000 in Wales operating
small and medium sized businesses.
Small and medium size businesses contribute
over 50% of GDP in the UK with a combined turnover of over £500
billion. 97% of all businesses in the UK employ less than 20 people.
The FSB's membership across the United Kingdom
employs an estimated 1.25 million workers of which some 800,000
are full time employees. Manufacturing operations account for
some 13% of FSB membership.
The FSB in Wales very much welcomes the opportunity
to respond to the Welsh Affairs Committee's investigation into
manufacturing and trade in Wales. We also welcome the National
Assembly Government's recently-established Manufacturing Steering
Group in Wales and hope that the result of the inquiry and this
new level of discourse with employers will be enhanced evidence-based
policy-making for the benefit of Welsh companies and the economy
at large.
INFORMATION PROBLEMS
It is worth briefly pointing out to the Committee
the problems that face anyone looking at the manufacturing sector
in Wales, especially as far as smaller manufacturing operations
are concerned.
There is currently little, if any statistical
information which would indicate the health of the manufacturing
sector in Wales short of information gathered by individual business
organisations and the FSB feels strongly that this does little
to help the development and support of the sector.
Much of the information contained within this
document is gleaned from information gathered from FSB members
in Wales. However, there seems to be no mechanism for governments—either
at the Assembly or in Whitehall—to access up-to-date statistical
information depicting the health of the sector overall.
The FSB in Wales feels that the gathering of
such information should not be left to individual organisations
but should be the responsibility of the Office for National Statistics
in order to get a comprehensive and wide-ranging statistical base.
We trust that the Committee appreciates the value of comprehensive
and accurate data in the formation of economic policy and hope
that a recommendation for such data gathering comes out of this
Inquiry.
GENERAL
The manufacturing sector in Wales in 2003 accounted
for some 16.4% of employee jobs.[1]
This was down 1.5% on the previous year, highlighting a trend
that should be not only of concern for manufacturers themselves
but to the Government.
Information compiled by the Office for National
Statistics shows that the index of production and construction
for Wales fell by 3.1% in 2002-03 compared to an overall UK increase
of 0.6%.
The trend of GVA (formerly GDP) in Wales (see
table below) is an issue of significant concern to manufacturers.
Table 1[2]
The general decline of the last 15 years culminates
in recent figures, which disappointingly show that GVA per head
in Wales is now only some 78.8%[3]
of the UK average. This is lower than the figure assumed when
the National Assembly for Wales formulated and launched its National
Economic Development Strategy A Winning Wales.
To attain the targets for growth set within
that strategy (90% of the UK average by 2010), the Welsh economy
would have to grow at a rate, which would outstrip any trend previously
recorded. This is obviously highly unlikely to happen and so now
is the time, with increasing and significant pressures stemming
from the haemorrhaging of jobs and contracts to other countries,
for the Assembly Government and the Labour Government in Westminster
to work together, listen to the needs of Welsh manufacturers and
re-evaluate its preferred strategic direction for the Welsh economy.
There is increasing concern among small-scale
manufacturing at the state of the sector in Wales. High profile
problems facing multinationals such as Panasonic and Corus highlight
the plight of the sector overall but do little to promote the
cause of the smaller-scale manufacturers who may also face other
economic problems but do not have the capacity to "ride out
the storm".
The Accession of 10 further countries to the
EU will inevitably place significant pressure on the already struggling
Welsh manufacturing sector and while larger companies may again
have the ability to export work to countries with lower labour
costs in order to survive and thrive, smaller operations who do
not have that capacity are likely to find it very difficult to
consolidate their position let alone expand.
Relocation of larger businesses not only has
a significant impact on the relative wealth of communities in
terms of loss of jobs within those particular operations but also
impacts heavily on smaller manufacturers who may be reliant on
larger manufacturers. At best, this can mean a reduction in capacity
and profitability. At worst it might mean the end of the businesses
completely.
The foreign trade capacity of manufacturing
in the SME sector obviously does not reflect the trends apparent
among larger operations.
The FSB's 2002 report Lifting the Barriers
to Growth, showed that only 21% of respondents had customers
located in the rest of the EU and 12.9% in North America[4].
A number of respondents were dissatisfied with access to overseas
markets. It is important to remember, therefore, that the domestic
market is of intrinsic importance for SME manufacturing and trade.
In general, however, the proportion of export
sales overall among SMEs increases with the size of the business
and this trade is reflected across the United Kingdom.
Overall, the picture for the manufacturing sector
is at best mixed. The British Chambers of Commerce survey for
Q3 2003[5]
confirmed the continuing downturn in manufacturing sector sales
and orders despite some promising signs from the CBI's survey
for the same period.
Welsh manufacturing has not performed as well
as one would have hoped over the last year. The sector in Wales
showed a drop in output of some 4.9% in 2003 compared to 2002.
The figure for the same period across the United Kingdom as a
whole was just 0.1% down on the previous year.[6]
However, there are signs that at the very least,
manufacturing confidence is improving somewhat and recent FSB
statistics show that desire for business growth is healthy despite
evidence indicating that only just over half of UK SME manufacturing
operations report an increase in sales. For some though, the picture
is more encouraging.
This issue of confidence is vital to the survival
of the sector in Wales. Manufacturers will be looking to the Government
to do all it can to promote their interests in the coming vital
months and years which, with EU accession, may prove to be the
"make or break" period for manufacturing.
UK AND EU ASSISTANCE
There is no doubt that grant assistance has
played an important part in the development of the manufacturing
and trade sector in Wales. Assistance has, in the past, proved
highly successful in attracting foreign investment and has been
successful in maintaining the effectiveness and productivity of
many indigenous manufacturers.
The FSB certainly recognises the successes of
the past and commends both the Assembly Government and the DTI
for their hard work in a difficult economic climate.
However, it is apparent that some schemes are
proving to be more effective and more flexible to the needs of
the sector than others.
This issue of effectiveness is one that we feel
needs to be addressed as a matter of some urgency and this applies
to all funding schemes.
There is some concern among the sector that
in many cases, conflict exists between the needs of the sector
and the stated aims of the grants. Some key areas are outlined
below.
1. RSA has been a vital factor in attracting
and securing significant investment in Wales and the relative
success of this scheme should be welcomed.
However, although the FSB welcomes and shares the
desire for full employment in Wales and welcomes recent figures
suggesting success in the effort to achieve that aim, the requirement
of some schemes such as RSA to protect or generate jobs often
means that schemes become restrictive or closed to some businesses.
This requirement for job creation can be a significant
problem. If a company sought to automate its operation for example,
funding may often be unavailable because it would mean zero job
creation and might even result in redundancies in some circumstances.
However, automation might well mean that a company becomes more
productive and cost efficient—both necessary for sustainable
viability.
We feel, therefore, that in the approach to "full
employment" in Wales, now is a good time to reassess criteria
and place the emphasis on value from investment rather than simply
its impact on employment.
We would also like to see that the rules for "additionality",
which ensure that support is targeted to areas in need of support,
are implemented in a consistent manner across the whole of the
European Union. It is often the case that more relaxed approaches
to additionality are in operation in other EU States. It is critical
that there is parity in order to encourage competitiveness. This
would obviously not only rely on the dynamic relationship between
MPs and MEPs but would require DTI interaction with EU counterparts.
It should also be noted that the existing profitability
of a company is not currently part of the criteria for RSA funding.
We feel that this should be included when judging applications.
As has been briefly mentioned, one of the key issues
about the culture of grant funding is the tendency to place the
onus on job creation. Definition needs to be made about whether
such schemes exist primarily for the purposes of sustaining jobs
or wealth creation. Grant funding needs to be flexible to respond
to demands from individual businesses and the economy as a whole.
2. There is some concern among the
business community about the impact of Objective 1 funding in
Wales. The complexity of applying for such funding and the priority
given to public sector initiatives have so far resulted in a disappointing
level of impact on the economy of Wales. Within this and other
funding programmes, more attention need to be paid to the private
sector and significantly more attention needs to be paid to the
concept of wealth creation as a driver of local and regional economies.
The FSB in Wales feels strongly that more priority
needs to be given to developing and improving physical infrastructure
to meet the demands of the economy in the 21st Century. However,
we are very pleased to note the commitment given to the development
and promotion of Broadband in Wales, which has partly been boosted
by the availability of Objective 1 funding.
3. Although there is a measure of concern
about the delivery of certain funding in Wales, the FSB very much
welcomes the advent of Business Eye to replace Business
Connect. We also welcome certain changes, which mean that
the agency is a facilitator of funding and funding advice rather
than simply a source of funding. This means that customers in
theory receive impartial advice tailored to individual needs.
4. More generally, however, the FSB
would like to see the phasing out of grant funding within Wales
in favour of a more flexible and positive system of "soft
loans".
State aid made available to manufacturing in the
UK is among the lowest in the EU. Generally, it is less than a
third of the average level of state aid to manufacturers in some
other EU States. In other States, aid is much more likely to be
offered in the form of soft loans than in the UK where aid is
normally offered in grant form.
Whilst we acknowledge the importance of some grant
funding in attracting inward investment, there is little evidence
to suggest that the plethora of available grants especially those
available to small businesses are contributing substantially to
the process of wealth creation.
In terms of "on the ground" funding more
generally, we feel strongly that the delivery of funding advice
and support has become an industry in itself. It is often needlessly
bureaucratic and restrictions and provisos of funding can often
be off-putting for businesses. The FSB in Wales advocates the
initiation of a structure of "soft loans" that is reactive
to the needs of businesses and the economy and could, in theory
become self-sustaining in time.
CREATING A
LEVEL PLAYING
FIELD
Wales is fortunate to have a good level of dynamism
and innovation within the SME sector. Despite market and economic
pressures, Welsh businesses do well to manufacture high quality
products and are responsive to demands.
However, there is concern among the sector that
the ability to compete in the global and European markets is becoming
more and more difficult. This pressure is likely to increase substantially
with the accession of new EU states.
There is concern that enforcement of both EU
and domestic legislation is stricter in the UK than it is in other
European States. UK manufacturers are currently mired in a disproportionate
amount of legislation, which for smaller operations particularly,
blights competitiveness and can cause them to lose any level of
competitive advantage. Overall, there is the age-old and overriding
suspicion that legislation is "gold-plated" by the UK
Government before it is enacted in the UK.
The result of this is an erosion of faith in
the UK Government's ability to protect manufacturers and the markets
in which they operate. It also provides little incentive for foreign
operations to invest in Wales.
The FSB in Wales believes passionately that
with accession of new States into the EU and with the rapid growth
of International economies such as that of China, the UK Government
needs to listen carefully to businesses to see where productivity
and competitive advantage is being stifled and what can be done
to remedy these problems to ensure that Welsh production remains
viable. Again, we welcome the Committee's move towards this goal
but the overall picture shows that there is much more to be done.
Implementation of legislative articles such
as the Climate Change Levy (CCL) already place a logistical and
financial burden on businesses. The reclassification of hazardous
waste for instance will mean extra costs—sometimes significant—for
some manufacturers and the absence of any landfill sites in Wales
able to take hazardous waste will also mean that businesses incur
additional expense for processing or transportation.
Last year's rise in National Insurance (NI)
contributions has obviously impacted on the Labour costs associated
with small businesses reflected in a British Chambers of Commerce
report of March 2003 which stated that one in five businesses
anticipated laying off staff as a result of the increase in employers
contribution to the scheme[7].
In short, there is concern that competitors
in other EU States are not subject to so much restrictive and
ultimately expensive legislation or that legislation that is in
place, is not so rigorously enforced, therefore giving these States
an advantage not only in terms of freeing businesses from burden
but also making these regions more attractive for inward investment
opportunities.
The issue of creating a level playing field
also relates to protection of UK manufacturers within markets.
There is obviously a reluctance to impose any
measure, which does anything to restrict the operation of a free
market. However, manufacturers in Wales see the US Government
imposing customs tariffs on many items manufactured in and exported
from the UK (not simply steel) but by the same token, Chinese
manufactures are able to export similar items to the UK without
having to pay any such tariffs.
Arguably one of the most significant burdens
facing employers in the SME sector is the dramatic and crippling
increase in insurance liability premiums which have not only caused
some business to reduce employee numbers or generally cut the
size of their operation but have also led to some businesses being
forced to operate illegally or close completely.
It is very often the case that insurance is
difficult to find and where it can be found, is prohibitively
expensive and there is usually little time between the notice
of renewal and the end of the policy to shop around for better
deals.
A recent FSB survey indicated 13% of manufacturers
across the UK were finding it difficult or impossible to find
insurance and a number of respondents were currently operating
without employers liability compulsory insurance as a result of
such difficulties. An overwhelming number of respondents (60%)
across all sectors reported a decrease in profitability.[8]
This problem is showing little sign of abating
in any meaningful way that will relieve the pressure on the small
business sector. However the FSB has been influential in achieving
two major changes to the system, one being a proposal which ensures
that liability insurance policy holders now get a minimum of 21
days notice of renewal and the other being the plan to exempt
more than 300,000 small limited liability companies from rules
forcing them to buy ELCI.
Despite these welcome developments, the FSB
would like to see the UK Government take a more proactive stance
in supporting the cause to reduce the burden placed on manufacturers
by this unfair hike in premiums.
LABOUR AND
SKILLS
Legislation such as the EU Working Time Directive
is just one aspect impacting upon burdens—both administrative
and financial—for manufacturers and their ability to employ
the number of workers needed and remain productive.
The implementation of the 48-hour week, allied
with the poverty of skills in Wales has the potential to cause
significant and far reaching problems and will mean substantial
and at times prohibitive investment by employers. This not only
impacts on productivity, but may well impact on employee numbers
as well. As such, we are strongly opposed to the concept of a
48-hour week.
The National Minimum Wage (NMW) has so far caused
fewer problems than was originally anticipated. There is little
evidence to suggest that the NMW has, to date, caused manufacturers
to substantially cut back their workforces or generally reduce
the level of their operations. However, there is significant concern
about the possible impact of further increases in the NMW.
There is also concern at the timing of proposed
increases. We feel that further increases in the NMW could cause
major problems for manufacturers. The nature of this legislation
means that the burden is placed solely upon employers with little
Government action in other areas (reducing legislative and bureaucratic
burdens, for example) to offset these increased costs.
With manufacturing currently experiencing such
difficult times and with an uncertain future ahead, the FSB feels
that more emphasis should be placed on consolidating the viability
of manufacturing in Wales rather than up-rating existing legislation,
which would mean that employers would incur substantial additional
costs.
The message, therefore is although the NMW has
so far been absorbed by employers, further increases in the NMW
would not only mean substantial investment by employers already
trying to undertake competitive, "lean" practices but
would also make Wales less attractive as a destination for foreign
investment.
This is not an EU issue but an issue for the
attention of the UK Government and so we feel that effective dialogue
needs to be undertaken resulting in defined action.
Arguably one of the greatest problems affecting
manufacturers in Wales is the substantial, almost critical shortage
of skills. Although the FSB recognises that this problem falls
largely within the remit of the National Assembly for Wales, we
feel that it is of utmost importance that the Committee be made
aware of this problem in order to inform its deliberations.
It is also a problem that is being experienced
across the UK and so action is needed at all legislative levels
to address this problem. There is little point in radical action
being taken in Wales for employers only to lose skilled Welsh
Labour to other regions of the UK due to significant regional
disparities in skill levels!
Evidence indicates that a substantial percentage
of employers have significant problems in recruiting skilled workers.
In addition to this, many also report problems in recruiting unskilled
labour. With manufacturing operations employing on average more
people per business than other small businesses, this is a significant
barrier to productivity and success.
Businesses within the manufacturing sector are
among the most likely to report that they have undertaken no formal
staff training. The greatest barriers to this problem are the
time and cost involved in training.
The FSB in Wales feels that a major part of
the problem has arisen from the decline in the number of students
undertaking apprenticeships in the era that has followed the decline
of more traditional heavy industry in Wales.
There is little doubt that the education system
in Wales is geared towards encouraging pupils into higher education
and we welcome the fact that record numbers of students now have
the opportunity to pursue this avenue if they so desire.
However, the expectation that a pupil should
progress into the 6th form and then onto University means that
there is little opportunity for students to pursue a more practical
application of particular skills—an application that has
been traditionally provided by Apprenticeships.
We feel that an enhanced "technical stream"
needs to be encouraged and nurtured at secondary school level.
Pupils need to be made aware of alternatives to University education
at the start of their secondary education.
However, there is also currently little incentive
for the employer to take on apprentices.
The first year of an Apprenticeship means substantial
investment for the employer not only in paying the candidate but
also in the costs associated with ensuring that there is always
a "tutor" to supervise the candidate in the various
tasks associated with the job. We would therefore like to see
funding allocated for paying employers to take on those undertaking
apprenticeships and other training opportunities.
There is also a significant paucity of candidates
suitably qualified at a graduate level. This is of concern to
employers of all sizes and there is well documented evidence to
suggest that fewer and fewer students are choosing to study subjects
which would provide the base of candidates needed for a dynamic,
responsive and productive manufacturing sector.
Although we welcome attempts made by both the
Assembly Government and the Government in Westminster to address
this problem, we feel that solutions could lie in ensuring a greater
emphasis on science and maths at secondary level as well as ensuring
that education support at university level is biased towards developing
the skills required by employers.
The latter might reflect current Government
arrangements surrounding the support of nursing students.
In short, we feel that education, whether secondary,
practical or at graduate level needs to be made less responsive
to statistics and more responsive to the needs of the developing
economy in Wales.
NURTURING SMALL
BUSINESSES
One of the key problems affecting all businesses
in Wales and therefore, manufacturing operations, is the average
age of business ownership. The majority of businesses in Wales
are run by people 45-55 years old. This therefore, poses us with
a potentially serious problem for the near future.
Although there are encouraging signs indicating
an increasing number of VAT registered business starts ups in
Wales, it should be of some concern that these barely balance
with the number of business failures. Many businesses find it
impossible to survive the vital first 18 months of operation.
This matter is particularly of concern to the
manufacturing sector as the time from start-up to profitability
can be significantly greater than that of many other types of
businesses. A successful manufacturing operation will have established
and productive relationships with its suppliers and will inevitably
establish a reliable order book on which it can depend. Such order
books and relationships can take many years to nurture.
The FSB in Wales would like to see the Government
encouraging people to "buy in" to established and productive
businesses where the owner/operator is facing retirement. This
not only benefits the business by protecting employment and addressing
demands from existing customers but also helps to ensure a more
favourable decline in the rate of businesses closing down.
In short, emphasis needs to be spread between
business start-ups and business survival, the figures for the
latter are often far more representative of the relative health
of the economy.
TRANSPORT INFRASTRUCTURE
There is little doubt that transport infrastructure
in Wales is in need of sustained, long-term investment and modernisation.
This applies not only to the infrastructure that allows manufacturers
to access their markets around Wales, but perhaps more crucially,
infrastructure that enables manufacturers to access markets with
the rest of the UK and beyond.
Among the most desperately needed improvements
are the enhancement of the M4 (principally around Newport) the
A40 though Pembrokeshire and the A55/A550 in the North. These
are all routes that provide vital links to the "extremities"
of Wales and improvements are required to guarantee the long-term
viability of the regions they serve for economic development and
investment in manufacturing.
In addition, there is significant concern about
the A470 and A483 and their ability to provide a suitable link
from north to south. It is imperative that improvement of such
routes is seen as part of an efficient, responsive network linking
manufacturers and their markets.
We very much welcome the commitment to air services
in Wales and the UK shown by the Assembly and UK Governments respectively.
It is essential, however, that increased commitment is shown to
the development of Cardiff Airport as a key part of any transport
network. Extensive overland improvements are desperately needed—principally
from the capital and the M4—if we see the airport as a significant
driver and facilitator of investment.
We are heartened to see recent developments
emanating from the Transport Select Committee realising that as
welcome as increased investment in Britain's railways is, it is
imperative that substantial change and improvement comes from
such investment.
RESEARCH AND
DEVELOPMENT
Although worryingly under-funded by monies from
the public sector, the FSB in Wales welcomes the progress that
has been made so far in the development of the R&D sector
and the very positive partnerships that have been developed under
the auspices of Technia. These have proven to be a revolutionary
way forward and an innovative link between Universities, the WDA
and business.
We would urge caution however and suggest that
there is a long way to go in developing a structure of R&D,
which is fully responsive to the needs of the economy although
we recognise that there will be limited capacity in the SME sector's
development of R& D due to cost implications.
In Wales, private sector investment in Research
and Development has decreased compared to a rise in the rest of
the United Kingdom.
Wales now accounts for only 1.1% of total R&D
undertaken within the UK. This reflects a long-term trend in the
low level of private sector R&D and, for the first time, R&D
spending by private businesses in Northern Ireland has overtaken
Wales.
In reviewing the state of R&D in other countries,
the most striking fact is that Wales does not actually have a
science policy to drive forward the R&D agenda. In contrast,
the Scottish policy—A Science Strategy for Scotland—has
clear objectives:
(1) To maintain a strong science base fully
connected to UK and international activity and funding sources.
(2) Increase the effective exploitation of
scientific research and to grow strong Scottish businesses and
provide cutting edge science to meet the needs of the people of
Scotland.
(3) Ensure that enough people study science
to a standard, which will enable the future needs of the country
to be met.
(4) Promote the awareness, appreciation and
understanding of science across society and ensure the effective
use of scientific evidence in policy formulation and resource
allocation by government.
Most worryingly for Wales, the English regions
through their Regional Development Agencies are now constructing
science policies to develop their R&D potential—both
the North East and the North West of England last year published
their science policies and it is expected that other regions will
follow suit.
An analysis of the situation in other countries
shows that a science policy is a key part of government policy.
At the simplest level, there is usually an advisory body, comprising
leading scientists and technological industrialists, who provide
guidance on key issues affecting science and technology.
For example, Australia has the Prime Minister's
Science, Engineering and Innovation Council (PMSEIC), which acts
as the Government's principal source of independent advice on
issues in science, engineering and innovation and relevant aspects
of education and training.
The FSB in Wales believes that the DTI, in partnership
with the National Assembly, should seek to establish a Welsh equivalent
to the Republic of Ireland's very successful Science Technology
Innovation Advisory Council consisting of leading science academics
and technological industrialists and entrepreneurs. Its sole remit
would be to develop a science and technology policy for Wales.
Such a body would report back with a detailed
plan of action and make clear recommendations for the future of
Welsh science in the public and private sectors.
This policy is long overdue and could play a
vital part in securing a strong future for the nation as a vibrant
knowledge-based economy. In the constantly expanding marketplace,
this would help to make Wales competitive and more attractive
to inward investors.
CONCLUSION
The manufacturing sector in Wales has weathered
some very difficult and economically troubled times in recent
years. Despite this, however, there is evidence that smaller operations
are managing to remain productive and are finding customers to
sustain them. There is also evidence that manufacturing confidence
is increasing. These are welcome realities and we certainly applaud
the efforts of Governments in Cardiff Bay and Westminster to support
this.
However, there is significant concern about
the years that lie ahead and the impact of expanding competition
not only from within the European Union but from countries such
as China and India.
Manufacturers will inevitably find it more and
more difficult to compete with increasing production costs and
increasing costs of employment and legislation.
The manufacturing sector in Wales has been radically
transformed in the last 20 years. No longer can the Welsh economy
rely on significant numbers of large, high profile foreign investment
opportunities and no longer can we necessarily rely on favoured
status within European and Global markets.
The FSB feels strongly that there is a definite
need for a change in the way legislatures think about manufacturing
in Wales.
Policy-making and legislation is still targeted
towards large-scale manufacturing operations such as those that
exist within the automotive and electronics sectors for example.
We would also echo the sentiments of the CBI in Wales in asserting
that high value is not necessarily high tech. High value is about
service and efficiency and the ability of manufacturers to respond
to customer demands within diminishing timescales.
We are becoming increasingly concerned that
policy-making is preoccupied with the concept of "leaness".
Whilst we recognise that domestic manufacturers need to operate
in such a way to remain competitive on a global stage, we would
point out that not only does this mean very little to smaller
manufacturers which make up the vast majority of the sector but
that it is not only Wales and the UK that have adopted the lean
concept—this is something that China, for instance, is well
ahead in realising and implementing. Wales needs to look further
than "lean" towards different, more responsive working
practices.
In the same way that manufacturers must respond
to the demands of the markets in which they operate, so must policy
making and support be adapted to respond to the structure of the
manufacturing sector itself. There needs to be a change in the
mindset of decision makers and a shift from the bias of policy
making towards larger businesses.
Due attention needs to be paid at all levels
to the concept of wealth creation, which lies at the very heart
of all successful economies. We feel that it is not unreasonable
to assert that all measures and policies emanating from Government
relating to the manufacturing sector should be tested for their
impact on wealth creation.
Politicians need to be aware of the need to
create the right environment for wealth creation and manufacturers
too need to be aware of their role in effectively operating within
that environment.
If the manufacturing sector in Wales is to consolidate
and replicate success and become more efficient and productive
within growing, more ruthless markets, tough policy decisions
will have to be made which will mean the Government protecting
the sector in terms of reducing the legislative and bureaucratic
burden on employers, targeting support more efficiently and vigorously
fighting for Welsh manufacturers at the European level to ensure
fairness and an equal chance to compete with other EU manufacturers.
Again, we would like to see the UK Government looking carefully
at legislative and regulatory proposals to test their potential
impact on businesses and business productivity.
We very much welcome the willingness that has
been shown by politicians in Westminster and Cardiff Bay to engage
with the manufacturing sector in Wales in an effort to assess
where we are and where we need to go and we look forward to the
recommendations of the Committee in due course.
26 April 2004
1 Office for National Statistics Statistical Bulletin
March 2004. Back
2
Office for National Statistics-IWA Agenda Winter 2002-03. Back
3
ONS Statistical Bulletin February 2004. Back
4
FSB Lifting the Barriers to Growth 2002. Back
5
BCC Quarterly Economic Survey Q3 2003. Back
6
ONS Stats Wales Welsh Index of Production & Construction
April 2004. Back
7
BCC Productivity Survey March 2003. Back
8
FSB Small Businesses in the Liability Insurance Market 2003. Back
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