Enterprise and Regulatory Reform Bill

Supplementary Memorandum submitted by EEF (ERR 21)

Enterprise and Regulatory Reform Bill Committee.

EEF, the manufacturers’ organisation, is the voice of manufacturing in the UK, representing all aspects of the manufacturing sector including engineering, aviation, defence, oil and gas, food and chemicals. With 6,000 members employing almost 1 million workers, EEF members operate in the UK, Europe and throughout the world in a dynamic and highly competitive environment.

EEF has the following observations upon Parts 1 and 5 of the Bill:

Clause 1: The Green Causes

EEF supports the idea behind the Green Investment Bank (GIB) – the need to attract more capital, more quickly, into the UK’s emerging green economy. The GIB is designed to act as catalyst to expand the pool of private investors and capital available to fund the nation’s transition to a greener economy.

However, given that the GIB is being capitalised with tax payers’ money and is explicitly designed to support the greening of the nation’s economy, it is essential that its activities are focused supporting projects which directly benefit the UK. For the purposes of the Bill, this means specifying in Subsection (1) of Clause 1 that each of the ‘Green Purposes’ that direct its activities relate to improving the UK environment – i.e.:

(1) The green purposes are-

(a) the reduction of greenhouse gas emissions in the UK;

(b) the advancement of efficiency in the use of natural resources in the UK;

(c) the protection or enhancement of the natural environment in the UK;

(d) the protection or enhancement of biodiversity in the UK;

(e) the promotion of environmental sustainability in the UK

As currently drafted, the GIB could focus its efforts entirely on projects that support cutting greenhouse emissions and improving the natural environment overseas.

Schedule 17 - Unnecessary regulation: miscellaneous

This schedule of the Bill, which repeals a small number of redundant regulations, reflects the limited achievements to date of Government initiatives such as the Red Tape Challenge (RTC).

EEF appreciates that potentially significant employment law reforms, such as some of those in the Bill, are in the pipeline. However, the general perception amongst manufacturers is that the RTC has delivered little of practical value to date despite seeming to consume significant resource for over a year, and counting, within Government.

A key reason for this perception is that the issues that matter to manufacturers, as reported in our submission to the RTC based on a wide-ranging member engagement exercise, were deemed out of scope for a variety of reasons, for example the regulations were part of the commitments in the coalition agreement and/or European in origin.

Altering this perception requires a significant ‘out’ that affects the majority of businesses (e.g. employment law) rather than minor changes on niche issues.

The Government should focus its efforts on tackling the stock of existing regulation and implementing the best ideas emerging from the RTC, rather than rerunning the exercise. The likelihood is that a second iteration of the exercise will deliver ever diminishing returns.

June 2012

Prepared 29th June 2012