Regulatory Affairs

“If a Trade Association does nothing else – it should act as a voice for its industry amongst politicians and senior government decision makers!”

regulatory-affairs-1Lord Sir Digby Jones

When Lord Sir Digby Jones spoke those words he captured the essence of why many trade associations were conceived.  Indeed, many associations do little more than lobby Government and there is no doubt that such activities should be a staple membership service for any body claiming to represent the best interests of its members.

In the past few years the BFPA has steadily increased its activities in this area and with the arrival of their current CEO who spent a period of secondment to the UK Cabinet Office whilst with BAE Systems, the lobbying activities of the Association have increased exponentially.

Reports & details of key stakeholders

BREXIT- How the UK voted- by Lord Ashcroft

The UK has voted to leave the European Union. On referendum day I surveyed 12,369 people after they had voted to help explain the result – who voted for which outcome, and what lay behind their decision.
The demographics
• The older the voters, the more likely they were to have voted to leave the EU. Nearly three quarters (73%) of 18 to 24 year-olds voted to remain, falling to under two thirds (62%) among 35-44s. A majority of those aged over 45 voted to leave, rising to 60% of those aged 65 or over. Most people with children aged ten or under voted to remain; most of those with children aged 11 or older voted to leave

• A majority of those working full-time or part-time voted to remain in the EU; most of those not working voted to leave. More than half of those retired on a private pension voted to leave, as did two thirds of those retired on a state pension.
• Among private renters and people with mortgages, a small majority (55% and 54%) voted to remain; those who owned their homes outright voted to leave by 55% to 45%. Around two thirds of council and housing association tenants voted to leave.
• A majority (57%) of those with a university degree voted to remain, as 64% of those with a higher degree and more than four in five (81%) of those still in full time education. Among those whose formal education ended at secondary school or earlier, a large majority voted to leave.
• White voters voted to leave the EU by 53% to 47%. Two thirds (67%) of those describing themselves as Asian voted to remain, as did three quarters (73%) of black voters. Nearly six in ten (58%) of those describing themselves as Christian voted to leave; seven in ten Muslims voted to remain.
• The AB social group (broadly speaking, professionals and managers) were the only social group among whom a majority voted to remain (57%). C1s divided fairly evenly; nearly two thirds of C2DEs (64%) voted to leave the EU.
How the parties divided:

• A majority of those who backed the Conservative in 2015 voted to leave the EU (58%), as did more than 19 out of 20 UKIP supporters. Nearly two thirds of Labour and SNP voters (63% and 64%), seven in ten Liberal Democrats and three quarters of Greens, voted to remain.

• Conservative voters constituted just over three out of every ten remainers, and four in ten leavers. Labour voters made up four in every ten remainers, and two in ten leavers.

When they decided

• Just under half (43%) of voters said they always knew how they would end up voting or decided more than a year ago. Nearly a quarter (24%) decided in the week before referendum day; and one in ten decided yesterday, or on the day they filled in their postal vote.
• Leave and remain voters were almost equally likely to have decided on the day. Labour and Lib Dem supporters who voted leave were more likely to have decided late than Conservative leavers.
Reasons to leave, reasons to remain

• Nearly half (49%) of leave voters said the biggest single reason for wanting to leave the EU was “the principle that decisions about the UK should be taken in the UK”. One third (33%) said the main reason was that leaving “offered the best chance for the UK to regain control over immigration and its own borders.” Just over one in eight (13%) said remaining would mean having no choice “about how the EU expanded its membership or its powers in the years ahead.” Only just over one in twenty (6%) said their main reason was that “when it comes to trade and the economy, the UK would benefit more from being outside the EU than from being part of it.”
• For remain voters, the single most important reason for their decision was that “the risks of voting to leave the EU looked too great when it came to things like the economy, jobs and prices” (43%). Just over three in ten (31%) reasoned that remaining would mean the UK having “the best of both worlds”, having access to the EU single market without Schengen or the euro. Just under one in five (17%) said their main reason was that the UK would “become more isolated from its friends and neighbours”, and fewer than one in ten (9%) said it was “a strong attachment to the EU and its shared history, culture and traditions.”

Overall, small majorities of voters thought EU membership would be better for the economy, international investment, and the UK’s influence in the world. Leaving the EU was thought more likely to bring about a better immigration system, improved border controls, a fairer welfare system, better quality of life, and the ability to control our own laws.

Next Conservative Party Leader

• For 2015 Conservatives who voted to leave the EU, Boris Johnson was the preferred successor to David Cameron for 43%. Michael Gove was second with 19%, and Theresa May third with 15%.
• For Conservative supporters who voted to remain, Theresa May was the most popular choice of successor for 28%, followed by George Osborne (22%). Boris Johnson was third, with 12%, just ahead of Ruth Davidson on 10%.
• Among voters as a whole, the most popular choice for the next Conservative Prime Minister was Boris Johnson (28%), followed by Theresa May (18%) and Ruth Davidson (10%). George Osborne (8%) came fifth after Michael Gove (9%).

National Identity

• In England, leave voters (39%) were more than twice as likely as remain voters (18%) to describe themselves either as “English not British” or “more English than British”. Remain voters were twice as likely as leavers to see themselves as more British than English.
• Two thirds of those who considered themselves more English than British voted to leave; two thirds of those who considered themselves more British than English voted to remain.
• In Scotland, remainers (55%) were more likely than leavers (46%) to see themselves as “Scottish not British” or “more Scottish than British”.
Social attitudes

• A small majority of those who voted to remain think that for most children growing up today, life will be better than it was for their parents; leavers think the opposite by 61% to 39%. Leavers see more threats than opportunities to their standard of living from the way the economy and society are changing, by 71% to 29% – more than twice the margin among remainers.
• Nearly three quarters (73%) of remainers think life in Britain is better today than it was 30 years ago; a majority (58%) of those who voted to leave say it is worse.

• By large majorities, voters who saw multiculturalism, feminism, the Green movement, globalisation and immigration as forces for good voted to remain in the EU; those who saw them as a force for ill voted by even larger majorities to leave.

Political Engagement

• Those who said they paid a great deal of attention to politics were evenly divided between leave and remain. Those who said they paid little or no attention to politics voted to leave the EU by 58% to 42%.

What did they expect?
• Seven voters in ten expected a victory for remain, including a majority (54%) of those who voted to leave. Leave voters who voted UKIP at the 2015 election were the only group who (by just 52% to 48%) expected a leave victory.

The impact
• More than three quarters (77%) of those who voted to remain thought “the decision we make in the referendum could have disastrous consequences for us as a country if we get it wrong”. More than two thirds (69%) of leavers, by contrast, thought the decision “might make us a bit better or worse off as a country, but there probably isn’t much in it either way”.

REPORT - We can make a difference – we just have to go about it in the right way… BFPA CEO Chris Buxton

If there is one thing that a Trade Association should undertake to achieve, it is to “work effectively to represent the sectors interests at all levels of the legislative and regulatory process.”  So states the Trade Association Forum (TAF) in describing the model Trade organisation.  As a CBI sponsored body acting as the ‘trade association for trade associations’, TAF is well placed to make such judgements and defines what is widely accepted as best practice in the Association world.

Unfortunately, all too many trade association members are sceptical as to the likelihood of ever being able to influence the regulatory process and consider such lobbying activities on the part of their trade association as at best, ineffective and at worst – futile. However, such scepticism, whilst understandable, is ill-founded.  During an earlier period in my career I was fortunate enough to go on secondment to the UK Cabinet Office from what was then my current employer; BAE Systems.  Amongst the many things that I learnt from the experience was the fact that undertaken in the correct manner, (i.e. with empathy and constructive professionalism), lobbying is not only effective but is an essential element in the smooth running of any democratic Government and is actively sought-out by Government regulators and Whitehall civil servants alike.  As lobbyists we are ‘pushing on an open door.’  But such engagement has to be undertaken properly to be successful.

In effect, lobbying is a form of selling.  One party is trying to convince the other of the benefits of its policy or views.  It is a process of persuasion.  As any good Sales person knows, success comes from understanding the needs of their customer; that is; being able to empathise with the recipient of the messages that are being delivered!  Too many lobbyists, especially the smaller, less well informed organisations do not follow this simple principle and then complain that lobbying is ineffective.

Essentially, there are three fundamental steps in this process:-

1) Clearly identify your customer (in the case of lobbying this is the person or people that can actually implement the changes that you are seeking),

2) Understand him/her (i.e. determine their drivers), and understand how their organisation works, i.e. the policy-making process.

3) Tailor the lobbying proposal in such a way that it addresses the key attributes and expectations of that customer. (Whilst accounting for the political as well as the economic impacts of the proposal.)

The most important of these steps is the first.  Too many lobby groups secure a meeting with a Minister but neglect the team of civil servants who will actually develop, influence and implement the relevant government policy.  Like any good sales process, the lobbyist needs to identify the ‘decision making unit’ and engage with all of the influencers in the policy making process – up and down the echelons of Government. Another mistake often made by lobby groups is to believe that they can ‘go-it-alone’.  Such arrogance is misguided and naïve.  There are thousands of different trade associations in the UK and regulators are invariably under pressure from a plethora of different lobby groups, each with a different issue.   Consequently, they are constantly trying to ‘keep all of the people happy all of the time’, invariably with insufficient resources – an impossible aspiration. In this kind of environment it is imperative that a given industry speaks with one coherent and ‘loud’ voice if they are to be heard above the background noise.  By ‘loud’ we invariably mean with a view that represents as large a number of individual voters as is possible! In politics, votes speak volumes in every sense of the word!  No one individual, organisation or company will successfully change the regulatory landscape on their own.  That is why the BFPA has joined forces with the Engineering and Machinery Alliance, (EAMA), an alliance of twelve like-minded trade  associations, all in the engineering sector but most importantly – with common regulatory issues and aspirations. Collectively, they represent thousands of individual employees across well over a thousand companies.    Representation on this scale can begin to influence the voting landscape thus politicians are more inclined to listen.  This weight, augmented by experience of government policy-making and a professional approach to engaging with the regulators at all levels, positions EAMA and BFPA as one of the key stakeholders with whom Government engages when determining policy.

Can BFPA or EAMA claim sole credit for a whole tranche of regulatory changes?  Probably not – no one organisation can, but we can claim to have been critical and major influencers in the development of a significant range of regulatory processes which will and already have, had a major impact upon UK Engineering firms – including BFPA members.  The policies that the Chancellor announces in the annual budget are not formulated in isolation.  They are developed in conjunction with credible and established lobby groups such as EAMA and the BFPA. Topics upon which we have already been active have included Capital Allowances, Small business rate relief and property rates, improved access to finance, the new Business Bank, fuel duty, late payments, R&D Tax Credits and the all-important issue of skills and training – to name but a few.  More recently and most notably we have been successful in securing an exclusion of waste hoses and associated PPE from the hazardous framework directive saving the industry and our members £18 Million pounds a year.

The BFPA Mission is essentially to help our members improve their businesses.  In other words, to help members sell more products and services.  Some of the services that we offer achieve this aim directly through cash discounts on none-core business services or web-based advertising channels but our ability and commitment to speak on behalf of the industry in the ‘corridors of power’ is perhaps one of the least well recognised and most important services that we offer.  ‘Together we stand – divided we fall!

REPORT - Can we seriously influence Brussels?  The BFPA position - BFPA CEO, Chris Buxton

It is widely recognized that a large proportion of UK legislation is dictated by EU law.  However, determining the exact amount has eluded many pundits.  Sometimes a figure of 70% is used — including in February 2014 by Viviane Reding, the Vice-President of the European Commission — but this is actually the percentage of EU laws that the European Parliament (elected representatives of each EU country) and the European Council (representatives of the governments of each EU country) have had an equal say on.

The rest are either decided solely by the Council, or with Parliament giving the Council consent to them being passed. In other words, it’s the percentage of EU law that the UK-elected politicians to the European Parliament have as much say on as our national government! Either way, it is safe to say that any trade association meeting its member obligations has a duty to try and engage with Brussels.

The challenge arises in that lobbying the EU is a very resource intensive and expensive process. The situation is further complicated in that not only is the structure of Brussels complex but it only allows lobbying via a number of recognised bodies and organisations.  Each of these bodies tends to specialise in a given group of sectors. They also carry what is usually an expensive membership subscription.

The BFPA, through its membership of EAMA, is a member of ORGALIME, an EU lobbying organisation with a focus upon the Engineering sector. EAMA members still find staying abreast of the activities of ORGALIME a challenge but for a small Trade Association such as the BFPA it is the only realistic way of having (a) any knowledge of what is coming down the EU regulatory pipeline and (b) having any influence on it.

The current BFPA CEO is an EAMA Board member and as part of the 2015 strategy will continue to engage with ORGALIME as much as is realistically possible. However, it will not be a major thrust in the activities of the BFPA in the short term and will act primarily as a source of information on the activities of Brussels and the extent to which they will impact upon the membership. There is also a close connection between the Technical and Standards committees managed by the BFPA and the relevant EU departments in Brussels. These activities also overlap with CETOP.

REPORT - A View of the primary political influences in the BFPA Market - BFPA CEO , Chris Buxton

1) Renewed Government focus upon manufacturing & specifically engineering and other Science Technology, Engineering & Mathematics (STEM) subjects.

Since the ‘fall from grace’ of the finance sector in the 2009 crash the UK Government has recognised that a successful economy depends upon trade and manufacturing. This has given impetus to a tranche of new initiatives aimed at supporting the Engineering and manufacturing sector at all stages in the supply chain. Much of this focus has tended to be biased towards the Aerospace and automotive sectors where Government believes it can realise the best returns for what are limited resources but this nevertheless has a positive impact on all suppliers to these sectors and related areas. In 2014 they published an industrial strategy; (www.gov.uk/government/uploads/system/uploads/attachment_data/file/306854/bis-14-707-industrial-strategy-progress-report.pdf) which developed specific strategies for what have been ten sectors; specifically:-

  1. Aerospace
  2. Agricultural Technologies
  3. Automotive
  4. Construction
  5. Information Economy
  6. International Education
  7. Life Sciences
  8. Nuclear
  9. Offshore Wind
  10. Oil and Gas These sectors have been underpinned by the identification of five cross-cutting themes:-
  1. Technology
  2. Skills
  3. Access to Finance
  4. Procurement
  5. ‘Other issues of cross-sectoral significance ‘

The result is a two dimensional matrix strategy in which each of the primary sectors has been given ministerial sponsorship and a number of specific initiatives to further their cause. Recognising that many sectors (including that of the BFPA) do not naturally fall into the primary industries identified in the government strategy, BIS has agreed to provide support on a case by case basis for other sectors willing to undertake their own initiatives and ‘dove-tail’ their strategies into that of the Government. BFPA in conjunction with EAMA has undertaken one such initiative for the Engineering and machinery supply sector. This initiative is still in the early stages of development and the BFPA CEO sits on the steering group managing it.

2) Access to funding

For some years access to funding for companies in the manufacturing sector has been a major issue – especially in the SME sector where risk of non-repayment of loans is highest. Consequently much work has been undertaken by organisations such as the BFPA in lobbying government to put the finance sector and banks under pressure to reduce or remove what were widely accepted to be disproportionate terms of business. One consequence of this inflexibility has been that many companies have found alternative means of funding their activities and with the return to healthy economic growth many now have strong business pipelines and no longer require the kind of support previously required from their banks. In essence, the tables have turned somewhat and banks are now seeking to repair their reputations as unco-operative and parasitic institutions and become much more business friendly. Whilst we shall never see a return to the old personalised banking of the sixties and seventies many banks, notably Lloyds have made significant progress in this aspiration and with the support of government there are now a number of new sources of finance available from both the banks and a number of government departments. E.g.

    1. The Advanced Manufacturing Supply Chain Initiative (AMSCI)
    2. The new Regional Growth Fund initiative (RGF)
    3. The Growth Accelerator Programme
    4. The R&D Tax Credit system (hmrc.gov.uk/ct/forms-rates/claims/randd.htm)
    5. Funding Circle (www.fundingcircle.com )
    6. The new business bank www.gov.uk/government/uploads/system/uploads/attachment_data/file/203148/bis-13-734-building-the-business-bank-strategy-march-2013.pdf                     Business banking insight website
    7. Lloyds SME engagement strategy (Business Finance Guide now available)
    8. whilst the Governments ‘Business is Great’ campaign and website now offer a selection of related services at:- www.greatbusiness.gov.uk/
    9. Another very good source of information relating to access to funding is now available at: www.gov.uk/government/uploads-sme-access-to-finance-measures

3) Prompt / late payments:-Like access to funding, late payment regimes and disproportionate terms of business, particularly amongst tier one suppliers in the manufacturing and engineering supply sector have long been the catalyst for complaints and lobbying initiatives. The Government recently undertook a public consultation on the subject and the CBI is developing a policy document on the subject as part of a new lobbying initiative. BFPA contributed to the consultation exercise and are involved in the associated CBI workshop. The problem is not easily addressed as any robust action puts the customer relationship at risk and SME’s, particularly those at the lower end of the supply chain, are loath to be too stubborn or proactive. Nevertheless, the BFPA continues to work on this topic and Government interest in the subject can only help. Threats to instigate a ‘name and shame’ policy would appear to be having some effect but there is still a long way to go and government are afraid of upsetting the larger companies so close to an impending election. Perhaps one of the more encouraging developments was the publication of the Governments new Small Business, Enterprise and Employment Bill in June 2014, which includes a number of clauses relating to companies having to publish their payment practices whilst smaller companies now have greater rights to invalidate contractual terms that are disproportionately restrictive or quite simply, demonstrably unfair.

4) Skills shortages

With improvements in access to finance, the UK skills shortages in the engineering sector have long since been the primary obstacle to business growth. The statistics are well known:- 80% manufacturers are experiencing recruitment difficulties and two-thirds of those say this is because candidates lack technical skills:

– 146,200 job vacancies (22%) in 2013 were unfilled because of inadequate skills, compared with 91,400 (16%) two years earlier. (UKCES SURVEY)
– 100,000 STEM graduates are needed a year just to maintain the status quo (The Royal Academy of Engineering)
– In the UK some 23,000 engineers are graduating every year. (But India is producing eight times as    many, and China 20 times as many.)
– 830,000 graduate-level STEM experts and 450,000 technicians will be needed by 2020 Government is seeking to address this problem with a number of new initiatives:-
– Instigation of the UK Commission for Employment & Skills
– Established University Technical Colleges (UTC’s) www.utcolleges.org – New £30M fund to secure supply of engineers and boost number of women in sector
– New support for apprentices (Trail blazer initiative)
– Raft of new NGO initiatives such as Engineering UK
– The Talent Retention Scheme. (TRS) This list is not exhaustive and the plethora of apparently un-coordinated initiatives in this area, many spawned from well-meaning, semi-private organisations frustrated by government inaction does little to provide clarity.

5) Export

Inward investment into the UK economy created or secured more than 112,000 jobs in 2011 to 2012 according to UKTI’s inward investment report for 2012 to 2013. The government wants to double the UK’s exports to £1 trillion by 2020 and attract more inward investment in UK infrastructure projects. A challenging target in language!

They claim that; “We are determined to remain one of the top countries for ease of doing business, by providing more support for British businesses to export their goods and services, and reducing corporation tax to competitive levels.” A worthy aspiration.

One of the steps that they have taken includes the establishment of a government department called UK Export Finance.

UK Export Finance supports exports through a range of products and services. These include guarantees to banks for loans used to purchase UK exports and insurance against non-payment. Its remit is to complement and not compete with the export insurance and finance available from the private sector.

In 2011 UK Export Finance broadened its business domain and product range to provide support for exports sold on short terms of payment. It offers a Bond Support Scheme and an Export Working Capital Scheme and, to help smaller exporters access the right support, it operates a network of regional Export Finance Advisers.

UK Trade & Investment (UKTI) offers services to businesses who are looking to or already exporting overseas. They also help overseas companies who want set up and invest in the UK.

International trade advisers are able to provide advice on a range of UKTI services to UK companies, including financial subsidies, export documentation, contacts in overseas markets, overseas visits, e-commerce, export training and market research. They are located in over 40 local offices around the country. UKTI also has sector specialists who can provide support to specific industries. Companies can book a face to face meeting with a trade adviser.

UKTI trade teams located in embassies, high commissions and consulates work with companies to identify overseas opportunities or the right contacts and potential partners in a specific country though the Overseas Market Introduction Service (OMIS) although much of the data in the OMIS reports is derived from the sector Trade Associations and they are not inexpensive.

UKTI’s Passport to Export is an assessment and skills-based programme that gives new and inexperienced exporters the training, planning and ongoing support needed to succeed overseas. Passport to Export also helps companies to research and visit selected markets.

The Tradeshow Access Programme (TAP) provides grants to help businesses who want to take part in overseas trade exhibitions and increase their knowledge about markets.

Experienced exporters are able to apply for the UKTI Gateway to Global Growth scheme which offers a 12 month programme of specific support focused on their needs.

UKTI’s Export Communications Review gives companies advice on language and cultural issues to improve their competitiveness in export markets.

UK companies can get free independent advice on how to carry out marketing research through UKTI’s Export Marketing Research Scheme. It can help them decide if they should export to a new market and how best to deliver products and services. It can also provide financial support for a marketing research project in certain circumstances.

UKTI established the UK Advisory Network in 2007 so government and the private sector could work closer together on giving help to investors setting up in the UK. The network gives companies easier access to private sector expertise.

The government is also simplifying and reducing corporation tax to encourage inward investment. The current rate of corporation tax is 21% making it the fourth lowest in the G20. The government is lowering the rate of corporation tax to 20% in 2015 which will be the joint lowest in the G20

Through their UK networks overseas, the Foreign and Commonwealth Office provides information to UK businesses to help guard against risk when operating overseas. They also offer timely political and economic updates which highlight key factors in emerging markets and help businesses identify and pursue new opportunities.

The Foreign and Commonwealth Office is establishing a new government-owned company, the British Inter-governmental Services Authority (BISA), to help the UK benefit from government to government contracts with other countries.

BISA has been specifically set up to manage these contracts and help facilitate and deliver opportunities for British companies across the entire supply chain, from major prime contractors to SMEs. It is not yet trading but in 2014 it is expected to grow into a fully operational company, with its own chief executive and board. More information can be derived from Jolyon Welsh, Head of Government to Government Contracting, FCO, by email at jolyon.welsh@fco.gov.uk

The FCO’s Business Charter, published in 2011, shows how Foreign & Commonwealth Office (FCO) resources can meet the needs of British business. It is part of the FCO’s work to create lasting prosperity for the UK, explaining the specific contribution that the FCO makes to support business across the world.

UKTI has an ongoing programme of research that looks into the effect of exporting on UK companies across the economy.

UKTI’s publication ‘Bringing home the benefits: how to grow through exporting’ found that for many UK companies the decision to grow through exporting has been profitable. Those companies who venture into new export markets tend to be rewarded both directly through boosted turnover, and indirectly through improved levels of efficiency, innovation and credibility. Early analysis of BFPA member companies suggests that the full export potential in our sector is not being fully realised and there would be merit in exploring this issue further.

REPORT - An Industrial Strategy for the Machinery and Component Supply Chain Sector - BFPA CEO , Chris Buxton

In 2011, when the Government announced its intention to develop a cross-sectoral industrial strategy it represented a major milestone in their recognition of the crucial role to be played by UK manufacturing in ensuring a successful ‘post-banking-crisis’ economy.  Unfortunately, whilst the much publicised, high profile sectors were recognised in the strategy (Aerospace, Automotive etc), limits in available rersources meant that a number of equally important, if lower profile, sectors were omitted. One such sector was our own machinery and component supply sector. Some stakeholders will be aware that as part of an initiative championed by BFPA through EAMA, our sector, with the support of both Member and Non-member Trade Associations, managed to secure government support to instigate a strategic planning process that would ultimately enable the supply chain industries to establish a role in the Governments overall strategy and to attract Whitehall consideration when it comes to establishing policy, support and regulation that will impact upon our sector. The agreed process; developed in conjunction with the Institute for Manufacturing in Cambridge; (IfM) comprised of two stages; an initial scoping study and a consolidated final strategic plan.  The first of these two stages was initiated in mid-2014 and reached a successful conclusion at the close of the year. It was made possible through contributions made by the trade associations involved, augmented by Government funding through BIS.

Such a strategy needs to ensure alignment between the sector’s interests and Government priorities:

  • the UK Government has led the development of industrial strategies focused on ‘end-use’ sectors
  • a typical company under the EAMA umbrella is an SME that operates within several value chains, supplying machinery and/or product and service packages to different ‘end-use’ sectors

BFPA and EAMA are adopting a two-stage approach to strategy development.  The first was to undertake a scoping study.  The output of this study will provide the basis for the greater part of the Industrial Strategy development.

The scoping study, which won broad support from those consulted, has illustrated that there are significant opportunities to build the core manufacturing base through re-shoring and export growth in support of the Department for Business, Innovation and Skills (BIS) sector and technology strategies. This may be through input to wider initiatives already under way, and/or new initiatives, in innovation for growth and efficiency.

The Institute for Manufacturing Education and Consultancy Services (IfM ECS) is assisting EAMA develop the strategy. The objectives of the first stage of work were to:

  • begin development of the machinery and component supply sector strategy
  • provide an opportunity to align the strategy with Government priorities and language
  • allow the strategy developments to be open to, and supported by, wide representation from the sector both within and beyond EAMA membership

Deliverables of the scoping study have been to:

  • scope the work needed for a full sector strategy
  • recommend how the implementation study should be structured and managed to tackle/deliver on the issues identified
  • gauge support for the concept
  • help identify a budget to cover the development of the full strategy
  • provide a preliminary pass on the issues and priorities.
  • report by way of summary outputs (with a simplified visual roadmap) and short paragraphs describing the key areas identified and developed

The study focussed on a Roadmapping workshop (13th November 2014) when some twenty delegates from across the EAMA alliance including BFPA members and other stakeholders developed a ‘landscape’ for the sector and identified key topics for scoping.

The landscaping work required identifying linked, trends and drivers, industrial capabilities (products and services), industrial competencies and enablers, in order to generate proposals (key topics) for scoping. Delegate syndicate groups produced topic roadmaps and mini-business cases, then summarised their feedback for plenary ‘exhibition-style’ review.

After the workshop had scoped an initial set of topics, the project steering team reviewed the workshop’s outputs to ensure both scope and context for the full strategy are comprehensive. In the end the steering team made a number of additions, shown in the following synopsis:

Innovation for growth

Key rationale: OEMs demanding supply chain innovation and companies taking on new lines and services

Topics:

  • Building depth in additive manufacturing
  • Mass customisation
  • Exploiting the Internet of Things and modeling in both the factory and wider supply chain
  • Mass customisation

Innovation for efficiency

Key rationale: essential in the drive for re-shoring and re-industrialisation

Topics:

  • Manfacturing automation (note: also contributes considerably to innovation for growth)
  • Global best practice, capability and capacity self-assessment benchmarking for continuous improvement in productivity

Enabling initiatives

Key rationale: to enhance collaboration across the value chain – both with original equipment manufacturers (OEM) and between SMEs – and communication, the image of the sector and improve the record on equipment and skills investment

Topics:

  • Technical and business skills development, possibly through a trade association sponsored national academy
  • Small set of competency/technology based innovation centres focused on SMEs but linked to the Catapults
  • Fiscal and taxation environment
  • LEPs: local delivery opportunities for strengthening supply chain economics
  • IP protection services
  • Profile of UK machinery makers and component manufacturers in education, and with OEMs and Government

It is recommended that the implementation study adopts a four-stage approach to strategy development over a period of eighteen months.Stakeholder discussions early in the implementation study will segment the proposed projects prior to confirming the approach and resource allocation. Projects will be segmented as:

EAMA giving support and input to initiatives already running

  1. Focused EAMA effort required to ensure members’ needs are met.
  2. New territory in which EAMA will take a lead (initially)Support will need to be sought for this work in the first half of 2015.
REPORT - Addressing the culture of late payments - BFPA CEO, Chris Buxton

Government to crack down on late payment culture

BFPA CEO Chris Buxton reports on current steps being taken by UK Government to address the cultural malaise of late payment and the role being played by the BFPA.

Anyone who has spent any amount of time in a customer supplier relationship has encountered it – late payment of bills.  We’ve all heard the phrase; “The cheques in the post – haven’t you received it yet?” Another favourite trick is to query the most trivial of details and to use it as an excuse not to pay what is often a very substantial invoice!  Let’s be clear from the out-set; late payment of bills is not a clever strategic initiative to improve cash-flow – it’s a crude, un-ethical breach of contract!  It can have devastating effects upon totally innocent parties and reverberate all the way down the supply chain!  It doesn’t matter how those that do it want to ‘dress it up’ – it’s just plain wrong!

Late payment is not a new issue but the problem has worsened since the financial crisis of 2009 and particularly affects small and medium sized firms. Between 2008 and 2012, the overall level of late payments due to these businesses almost doubled from £18.6 billion to £35.3 billion. As of February 2013, the overall level of late payment owed to small and medium sized businesses stood at £30.1 billion – an improvement on 2012, but well above pre-2008 levels. The average amount owed to a small business stood at £31,000 and 85% said they had received a late payment.

It doesn’t require a PhD in Economics to appreciate the negative effect that this kind of culture has on UK GDP and in particular, those companies that tend to be SME’s in the ‘middle’ of the supply chain – exactly where most BFPA members operate.  That is why the BFPA, along with sister associations in the Engineering & Machinery Alliance (EAMA), have been working with other stakeholders such as the British Bankers Association and Government departments to try and address the problem.  2014 saw us engage in government consultations on the subject, the associated research from which showed that:-

  • Small businesses on average spend 130 hours each year chasing late payments, which equates to just over three weeks of work, at an average cost of £1,500 per business.
  • 34% of companies report that they have sought external finance to cover gaps in cash flow caused by late payment. The Federation of Small Businesses states that this has led to £180 million in debt interest charges – money that could otherwise be used for investment and growth.
  • In 2011 124,100 businesses were almost put out of business due to their customers paying late. In 2008, 4,000 UK businesses became insolvent as a direct consequence of late payment.
  • Good cash-flow is vital in enabling businesses to continue to raise finance and invest when required and late payment has a major negative impact on businesses ability to access finance. According to Professor Russel Griggs, the independent external review of the major banks’ Appeals Process, in 2012/2013 48% of declined finance applications over £25,000 were rejected on ‘affordability’ grounds – the ability of an SME to service the debt from its existing cash-flow.

As we go into 2015 the government is introducing measures to encourage prompt payment by obliging bigger companies to publicly report their payment performance. These measures formed an important part of the Small Business Enterprise and Employment Bill and government has said that it will consult with industry on the best way to address it. BFPA is at the heart of those consultations and is encouraging a ‘name and shame’ policy. Conversations with members reveal a great deal of support for what we are doing.

The details of exactly how these measures will be implemented is still under discussion and great care is being taken not to undo all the good work that has been done to reduce the regulatory and administrative burden on UK companies at all levels – but the current culture has to change. The current view is that if the large tier one companies can be encouraged to improve their performance through a mixture of ‘carrot and stick’ regulation, the improvement will ‘ripple-down’ the supply chain and improve performance at all levels.

As Vince Cable, the Ex-Secretary of State for Business Innovation & Skills stated; “Some of the options [being] explored are quite radical, and I make no apology for that – the importance of the issue demands it!”

Late payers beware – your days are numbered!

Much of the work that the BFPA has been undertaking in this area has been in cinjunction with EAMA and the British Bankers Association (BBA)

(This piece appeared in the trade press in March 2015.)

The Engineering & Machinery Alliance (EAMA)

The Engineering & Machinery Alliance EAMA, the Engineering and Machinery Alliance was founded in 2001 by a group of Engineering Trade  Organisations (the EAMA website details current membership).
The sole purpose of this Alliance was to form an effective lobbying and communication body with government, NGOs and other industrial organisation (i.e. CBI, EEF).
The Alliance was formed, (with a sizeable DTI grant which ran out mid 2004) as a direct response to what was seen as a failure by METCOM to effectively lobby on behalf of the engineering and manufacturing sectors.
At the time of EAMA’s formation the Engineering Industries Directorate (EID) of the DTI, now closed, was
pro-actively trying to support the engineering sector to get a constructive package of assistance from DTI and Trade Partners UK (a sub division of DTI and FCO which is now called UKTI.
With the arrival of Mrs Hewritt as Minister the whole DTI structure was placed under review which led to a complete paralysis of action for 18 months and the dismantling of EID and any effective direct contact points with engineering industry groups.
EAMA undertook a number of activities and involved itself with a major research project which produced a comprehensive report on the Two Tier Economy and helped to organise a conference where a government minister (then Jacqui Smith) and senior civil servants actually had to face direct questions from SME company directors/owners.
Its first president Mike Legg, was also very active with letters to ministers and interviews. A number of articles were published in the national press so EAMA gained a high profile very quickly and the ‘background noise’ was that DTI were pleased that EAMA was helping it fight its corner with the Treasury.
Sadly this did not lead to an extension of the financial support beyond March 2004. This led to a number of the original Associations, including Metcom, (who had joined EAMA by invitation), to withdraw as they could not afford the likely subscription which would be queried to keep the Alliance going. This left six Associations to decide whether or not to wind up EAMA or keep it going in a very focused and cost
conscious way.
The latter route was chosen and three of the six including, MTA and PICON, resigned from Metcom to switch
the funding to EAMA. A new secretary was appointed – Rupert Hodges – and he was given a clear brief on the aims and objectives of the Alliance.
The secretary is normally based at the MTA’s offices in Bayswater and uses their resources. However, in effect Rupert Hodges has his own office in London and tends to work from there. The lobbying resources available through MTA are useful and these are provided on a gratis basis for the present.
The current Chairman of EAMA is Martin Walder of Rockwell Automation.
It is well connected and does open doors in high places. It is a primary means of contact with the UK Government. HMG simply do not regard individual Associations as important enough unless they are in a strategic industry (i.e. Defence, Aerospace and Chemicals). In 2008 EAMA also joined ORGALIME providing a channel for EU lobbying amongst Association members. BFPA has been a member of EAMA since early 2014.

ORGALIME

Orgalime is the Brussels based lobbying organisation for all engineering sectors.  It is not a UK organisation but a pan European body funded by engineering organizations from all over the EU.  It is headed by a Britain, Adrian Harris and no individual TAs can belong.  The UK members are BEAMA, GAMBICA and EAMA.  Membership of one of these bodies allows access to Orgalime and its activities.

Much of Orgalime’s work is in monitoring the flow of new legislation and regulations coming from the European Commission and preparing position papers and lobbying on behalf of its membership.  Most of the time it is trying to stop more regulations on undertaking impact assessments on existing regulations.    It is a very vociferous organisation and battles very hard against the tide of proposals which seem to come in never ending waves from the Commission and/or Parliament.   It has fought successfully on behalf of its constituents on many fronts i.e. delaying the revision of the Machinery Directive, watering down the impact of REACH on use of industrial chemicals and helping to get capital equipment such as processing and packaging machinery excluded from the first implementation of WEEE (Waste Electronic and Electrical Equipment Directive).  They have a useful website which has up-to-date briefing documents and details of legislation passing through the EU commission etc.

Orgalime is a vital source of information regarding EU activity and co-ordinates much useful lobbying on behalf of the whole engineering sector.

The equivalent for the Compressed Air community is PNEUROP.

Contact:- Adrian Harris, Tel. 00322 706 82 35, Email: secretariat@orgalime.org or website www.orgalime.org

CETOP

CETOP www.cetop.com is the acronym of Comité Européen des Transmissions Oléohydrauliques et Pneumatiques. CETOP is the European Fluid Power Committee.  It describes itself as:-

“The communication platform for fluid power in Europe.  The international umbrella organisation for national fluid power associations in Europe.”

Through the 18 national associations which are member of CETOP, all well-known companies in Europe belong to the European Committee. Many of these companies are leading fluid power manufacturers and major players in the international markets.

CETOP represents more than 1,000 companies – mainly manufacturers, but also some distributors – with almost 70,000 employees and a market value of about 13 billion EURO. These account for a very high proportion of companies active in these fields – 80-90% in most countries.  CETOP cooperates with ISC – the International Statistics Committee with the aim of getting global Fluid Power Statistics, following commonly agreed definitions and nomenclatures. The following associations belong to ISC: CETOP (Europe), CHPSA (China), FPSI (India), JFPA (Japan), NFPA (USA), and TFPA (Taiwan).

The BFPA has been and continues to be very active in CETOP.  Indeed, through its direct involvement CETOP authored a comprehensive set of recommended academic criteria for training in Fluid Power. (CETOP levels one two and three.)  The BFPA CEO attends the CETOP Assembly meetings and sits on the EU Marketing Commission.  BFPA technical consultants continue to be active on the technical commissions and committees.

The Trade Association Forum (TAF)

The business sectors that individual trade associations represent may be unique but the organisational and policy issues that they face are not.

Since its formation in 1997, the Trade Association Forum has been encouraging the development and sharing of best practice among UK trade associations and promoting the role of effective trade associations to government, industry and the wider public.  The current BFPA CEO is a Board Director of TAF.

Through the Directory the Forum provides comprehensive links to information on UK trade associations and the business sectors they represent.

The Forum provides its members with a range of services and activities designed to assist them in the strategic development and day to day running of their organisations but is not a policy setting body.

Funded by its members, the Forum is an incorporated body operating with guidance from a Board of Directors consisting of trade association representatives. The Forum is based in Waterloo.

Manager:                                                   Linda Cavender : 020 3170 0898

Events & Sponsorship:                           Jocelyn Rudnick: 020 3170 0898

Finance & Benchmarking Officer:       Peter Cload : 020 3170 0898

Benchmarking Officer:                          Richard Fairclough : 020 3170 0898

PNEUROP

Pneurop is the European Association of Manufacturers of Compressors, vacuum pumps, pneumatic tools and allied equipment, represented by their national associations.  Pneurop members are national associations representing more than 200 manufacturers in eight EU member states in Switserland and Turkey.  The European market for the sector exceeds twenty billion euros.

Pneurop speaks on behalf of its members in Eu and international forums regarding the harmonisation of technical, normative and legislative developments in the fields of Compressors, Vacuum pumps, pneumatic tools and allied equipment.  It is the preferred EU alliance for the British Compressed Air Society BCAS.

The British Bankers Association (BBA)

The BBA is the leading trade association for the UK banking sector with 200 member
banks headquartered in over 50 countries with operations in 180 jurisdictions worldwide. As such it is an important stakeholder and associate of the BFPA and regular meetings are held between the two organisations. Eighty per cent of global systemically important banks are members of the BBA. As the representative of the world’s largest international banking cluster the BBA is the voice of UK banking.
They have the largest and most comprehensive policy resources for banks in the UK and represent their members domestically, in Europe and on the global stage. Their network also includes over 80 of the world’s leading financial and professional services organisations. Their members manage more than £7 trillion in UK banking assets, employ nearly half a million individuals nationally,contribute over £60 billion to the UK economy each year and lend over £150 billion to UK businesses.
The BBA supports and promotes policies and initiatives that balance both the interest of banks, and the wider public benefit. Their work is underpinned by three core priorities:
• Helping customers – both consumers and businesses
• Promoting growth, including supporting the UK as a global financial centre
• Raising standards – both professional and ethical
Their mission statement sets out further details about the aims and values of the organisation.

The CBI

The CBI claims to be the UK’s leading business organisation, speaking for some 190,000 businesses that together employ around a third of the private sector workforce.
With offices across the UK as well as representation in Brussels, Washington DC, Beijing and New Delhi, they aspire to coordinate the voice of British business around the world. BFPA has been a member of the CBI for many years and the current CEO occasionally takes part in working groups; which help the CBI to define its lobbying policy, and other networking events which generally help in terms of deriving wider economic and market intelligence.

The ‘down-side’ of the CBI is its generality as it has to represent the interests of all sectors. To this extent, the BFPA engages on generic issues rather than industry specific topics. E.g. formulating policy on late payments or skills shortages.

The ‘upside’ of the CBI is their relationship with UK Government and the fact that in general, they have the ear of major government decision makers. To this extent BFPA’s membership provides access to and a degree of influence over Government policy and excellent access to information and Government activities.

The British Standards Institution (BSI)

BSI Group, also known in its home market as the British Standards Institution (or BSI), is a multinational business services provider whose principal activity is the production of standards and the supply of standards-related services.

BSI Group was founded as the Engineering Standards Committee in London in 1901.  It subsequently extended its standardization work and became the British Engineering Standards Association in 1918, adopting the name British Standards Institution in 1931 after receiving its Royal Charter in 1929. In 1998 a revision of the Charter enabled the organization to diversify and acquire other businesses, and the trading name was changed to BSI Group.

The Group now operates internationally in 150 countries. The core business remains standards and standards related services, although the majority of the Group’s revenue now comes from management systems assessment and certification work.

BFPA is the external secretariat for 500 of the 7000 standards for which BSI is responsible.  This is a key work stream for the organisation and a clear differentiator amongst other trade associations.

All formal standards are developed with a period of public enquiry and full consultation. They incorporate the views and expertise of a very wide range of interests from consumers, academia, special interest groups, government, business and industry. As a result, standards represent a consensus on current best practice.

Standards are designed for voluntary use and do not impose any regulations. However, laws and regulations may refer to certain standards and make compliance with them compulsory. For example, the physical characteristics and format of credit cards is set out in standard number BS EN ISO/IEC 7810:1996. Adhering to this standard means that the cards can be used worldwide.

As the UK’s National Standards Body, BSI is responsible for producing and publishing British Standards and for representing UK interests in international and European standards organizations such as ISO, IEC, CEN, CENELEC and ETSI.  Formal British Standards are titled BS (for British Standard) XXXX[-P]:YYYY where XXXX is the number of the standard, P is the number of the part of the standard (where the standard is split into multiple parts) and YYYY is the year of publication.

BSI produces standards on a wide range of products, services and processes; from nuts and bolts to sustainability, risk, business continuity management and nanotechnology.

BSI produces British Standards, and, as the UK’s National Standards Body, is also responsible for the UK publication, in English, of international and European standards. BSI is obliged to adopt and publish all European Standards as identical British Standards (prefixed BS EN) and to withdraw pre-existing British Standards that are in conflict. However, it has the option to adopt and publish international standards (prefixed BS ISO or BS IEC).

In response to commercial demands, BSI also produces commissioned standards products such as Publicly Available Specifications, (PAS’s), Private Standards and Business Information Publications. These products are commissioned by individual organizations and trade associations to meet their needs for standardized specifications, guidelines, codes of practice etc. Because they are not subject to the same consultation and consensus requirements as formal standards, the lead time is much shorter.

BSI Group is the world’s largest certification body. It audits and provides certification to companies worldwide who implement management systems standards. BSI also provides a range of training courses regarding implementation and auditing to the requirements of national and international management systems standards.

It is independently accredited and delivers assessments for a wide range of standards and other specifications including:-

  • ISO 9001 (Quality),
  • ISO 13485 (Quality management systems for medical devices)
  • ISO 14001 (Environment),
  • ISO 50001 (Energy management systems),
  • OHSAS 18001 (Occupational Health and Safety),
  • ISO/IEC 27001 (previously BS 7799 for Information Security),
  • ISO/IEC 20000 (previously BS 15000 for IT Service Management);
  • PAS 99 (Integrated Management),
  • BS 25999 (Business Continuity),
  • Greenhouse Gas Emissions Verification,
  • SA8000 (Social Accountability) and
  • Food Safety standards and specifications, including ISO 22000.
  • AS9100, AS9110, AS9120 Aerospace
  • EU Emissions Trading System (EU ETS)

BSI certifies approximately 60,000 locations in over 124 countries and operates across the UK, CEMEA, Asia Pacific (including Japan and China) and the Americas.

Subsequent to an acquisition in 2006, BSI also offers a web-based integrated management system software service called Entropy Software, which specializes in helping large organizations manage risk and compliance issues.

BSI Group also offers a range of training services on how businesses can implement and audit management systems effectively.

BSI also publishes standards-related books, CD-ROMs, subscription products and web-based solutions as well as providing training on standards-related issues.

Within Testing Services, BSI’s best known product in the UK is the Kitemark, a registered certification mark first used in 1903. The Kitemark – which is recognized by 82% of UK adults – signifies products or services which have been assessed and tested as meeting the requirements of the related specification or standard within a Kitemark scheme.

BSI also conducts testing of products for a wide range of certifications, including for CE marking. CE marking must be applied to a wide range of products intended for sale in the European Economic Area. Frequently manufacturers or importers need a third-party certification of their product from an accredited or ‘Notified’ body. BSI holds Notified Body status for 15 EU Directives, including construction products, marine equipment, pressurized equipment and personal protective equipment.

BSI also conducts testing for manufacturers developing new products and has facilities to test across a wide range of sectors, including construction, fire safety, electrical and electronic and engineering products.

Within Healthcare, BSI provides regulatory and quality management reviews, and product certification for medical device manufacturers in Europe, the United States, Australia, Japan, Taiwan, Canada and China. It is the market leader in the USA, the world’s biggest healthcare market

Local Government

UK Local government is subject to extensive lobbying, which is reasonable given the greater importance of the local public sector in large welfare states. Most of the scholarly attention has understandably been focused on lobbying at the national level. Contrary to common misconceptions, generally local representatives seeking re-election are contacted more frequently by interest groups.  Interest groups target their lobbying activities toward politicians who are members of the relevant council committees, and they exert stronger pressure on members of the executive board and active representatives who perceive themselves as influential. Interest groups tend to be more active in the richer local governments. The demands of the residential population also impact weakly on lobbying efforts.  Recent Government efforts to decentralize a number of initiatives e.g. The local Enterprise Partnerships (LEP’s) that replaced the Regional Development Agencies (RDA’s), and spread the cost of policy implementation have meant that there are a number of localized initiatives and opportunities that merit BFPA attention and by implication, that of its members.  However, only the very largest of trade associations can afford the overhead of focusing on local issues on behalf of an individual or small group of members.  They can however, provide guidance to members on how they might undertake their own local initiatives.  A topical example of this is the Government Business Growth Accelerator program which is implemented at a local level through approved parties operating under a policy framework dictated by central government.  The BFPA therefore needs to remain aware of locally implemented initiatives and advise where possible, members in taking their own action should they wish to allocate the necessary resources.

Understanding the new Government departments designed to help business

BFPA CEO, Chris Buxton seeks to shed some light on the structure of at-least part of the new Government Structure that seeks to help UK Business forge a strong future in the post-Brexit economy.

In what is still only a matter of weeks since the seismic event that was not just a Brexit vote but a complete restructuring of the UK Government, it would be a brave person that could claim to understand all of the structural changes that have taken place or indeed, those that are bound to follow when the inevitable after-shocks of this particular earthquake bring further change and confusion.

However, as the dust settles and trade associations, including the BFPA, seek to re-engage with the ‘walking wounded’ currently staggering around Whitehall a clearer picture is slowly emerging and I would submit; even speaking as a strong ‘remainer’, there is much for business to be pleased about.

The most obvious change has been the evolution of our much loved Department for Business Innovation and Skills (BIS) into the department for Business, Energy and Industrial Strategy or BEIS for short; (pronounced phonetically; ‘baze’). BEIS is in fact a merger of BIS and the Department for Energy and Climate Change (DECC) and now consolidates responsibilities for business, industrial strategy, science, innovation, energy, and climate change under one authority.
To this extent they will be responsible for:
• developing and delivering a comprehensive industrial strategy and leading the government’s relationship with business
• ensuring that the country has secure energy supplies that are reliable, affordable and clean
• ensuring the UK remains at the leading edge of science, research and innovation
• tackling climate change

As businesses, the first of the above bullets will be of prime interest but where, you may well ask, have ‘Skills’ gone? The answer is a logical one – the Department for Education. However, for those of us who have been around Whitehall long enough this will raise alarm bells. The importance of skills as an integral part of any industrial strategy is paramount and Government departments are renowned for being ‘stove-piped.’ Like fiefdoms, they are reluctant to cross communicate let alone co-operate. Again Business can take comfort. Recognising this failing, the May Cabinet has established a new Ministerial Commission comprising of eleven Cabinet Ministers and Chaired by the PM herself. One of their primary roles will be to ensure that the required cross departmental co-operation actually takes place and they have introduced a stakeholder engagement plan which includes a range of key interested parties such as Unions and Local Councils but significantly, the UK Trade Associations. BFPA is currently the Chair of the UK Trade Association Forum and we have been invited by the new team to have discussions around key issues for our membership.

The key staff within BEIS are:-
• Rt Hon Greg Clark MP, Secretary of State for Business, Energy and Industrial Strategy
• Nick Hurd MP, Minister of State for Climate Change and Industry
• Jo Johnson MP, Minister of State for Universities, Science, Research and Innovation (joint minister with Department for Education)
• Baroness Neville-Rolfe, Minister of State for Energy and Intellectual Property
• Margot James MP, Minister for Small Business, Consumers, and Corporate Responsibility
• Jesse Norman MP, Minister for Industry and Energy

These new ministerial portfolios; (so claims the new Cabinet), “reflect the key priorities for the department to develop a comprehensive industrial strategy; continuing to ensure the UK remains at the cutting-edge of science, research and innovation; tackling climate change; and ensuring affordable, clean and secure energy supply for the UK.”

(Gregg Clark’s September 27th address to the Institute of Directors on the importance of Industrial Strategy can be read verbatim at www.gov.uk/government/speeches/the-importance-of-industrial-strategy)

So; this covers Business interests and Industrial strategy. What about Trade? This activity is going to be the focus of a new department called, not surprisingly; the Department for International Trade or DIT – not, I am told by its new Director, Rosa Wilkinson, to be pronounced ‘ditt’ but to be spelt out in full; D. I. T.

The Department for International Trade has overall responsibility for developing, coordinating and delivering a new trade and investment policy for the UK, including preparing for and then negotiating Free Trade Agreements and market access deals with non-EU countries. Working side by side with the Department for Exiting the EU (see below), the Department for International Trade will help support the negotiation of the UK’s new relationship with Europe.
Working across the whole of government, industry and the UK’s extensive overseas network, the Department supports UK businesses in scaling up and taking advantage of the global appetite for British goods and services, as well as to demonstrate that there has never been a better time for international companies to partner with UK suppliers. It is a specialist body, with significant new trade negotiating capacity, and Government claims that it is revolutionising the way UK businesses access international markets.

There are three groups in the Department for International Trade:
1) The Trade Policy Group, led by John Alty.
2) International Exports and Investment (ITI, formerly UKTI), led by Catherine Raines.
3) UK Export Finance, led by Louis Taylor.

These activities remain essentially as they were under the old regime but under new guidance and authority.

The purpose of the Trade Policy Group is to promote open and fair international markets for the UK.
This means:
– Identifying our detailed policy priorities and flexibilities.
– Securing ambitious free trade agreements.
– Ensuring effective implementation of trade and investment rules.
– Supporting the interests of developing countries.
– Delivering efficient and effective import/export licensing services.
– Engaging with stakeholders in government, business, civil society & internationally to explain, advocate and deliver Government goals.

The purpose of DIT’s International Exports and Investment Directorate is; (as it was as UKTI), to drive growth in the value of UK exports and attract the highest value foreign direct investment into the UK.

This means:
– Working overseas to identify and deliver high-value export campaigns in the markets and sectors of highest value.
– Working with commercial and public partners in the UK to prepare businesses to export, or to work with businesses to grow their exports.
– Working with local partners and sector experts to deliver high-value foreign direct investment and capital investment into the businesses and areas where it will most benefit the UK economy.
– Delivering scalable export and foreign direct investment support solutions to ensure that mass market export and investment support are ‘digital by default’.

The purpose of UK Export Finance (UKEF) – the UK’s Export Credit Agency – remains essentially unchanged and is to provide assistance and support to exporters and investors where the private sector cannot. This is principally in the form of insurance to exporters and guarantees to banks against non-payment of contract sums or loans. UKEF also provides loans directly to foreign buyers for the purpose of buying UK goods and services. As it always did, UKEF works closely with banks and insurance brokers as well as with exporters and overseas buyers.

So; we now have Business, Industrial strategy, Trade and Exports covered. We then come to the all- important role of managing our exit from the EU.
This, it seems, will fall to the new Department for Exiting the European Union. (No-one can say that it doesn’t ‘do what it says on the tin!’ ) This is such a new concept that policy is still emerging but the Government states that it is ‘responsible for overseeing negotiations to leave the EU and establishing the future relationship between the UK and EU.’ This is perhaps the most challenging and hazardous Government portfolio.

Their remit includes:
– the policy work to support the UK’s negotiations to leave the European Union and to establish the future relationship between the EU and the UK
– working very closely with the UK’s devolved administrations, Parliament, and a wide range of other interested parties on what the approach to those negotiations should be conducting the negotiations in support of the Prime Minister including supporting bilateral discussions on EU exit with other European countries
– leading and co-ordinating cross-government work to seize the opportunities and ensure a smooth process of exit on the best possible terms
Early discussions reveal that their priorities will be:-
– ensuring the government is able to take initial decisions on the UK’s withdrawal on the basis of the best possible advice
– strengthening capability across government in preparation for the work ahead
– reaching out to stakeholders in order to understand and capture their views
– establishing the department and setting it up to succeedOne would hope that the latter point was never in question!

The key senior management team in this new venture includes:
>Oliver Robbins CB, Permanent Secretary
>Sarah Healey, Director General
>Creon Butler, Director of Analysis
>Chris Jones, Director of Justice, Security and Migration
>Joanna Key, Director of Strategy and Planning
>Antony Phillipson, Director of Trade and Partnerships
>Thomas Shinner, Director of Cross-Government Policy Coordination
>Catherine Webb, Director of Market Access and Budget

For those of us with a need to engage with this team the following organogram has been published:-

So there we have it.
A new set of politicians and civil servants with whom to engage and a future which we would all have to admit, may be precarious but is at the very least – exciting!
As Rupert Hodges (secretary to our Engineering & Machinery Alliance) put it; “UK Manufacturing – What’s not to like?” His question may have been rhetorical but it is born of a widely held and arguably, justifiable optimism amongst those of us who engage with Whitehall.
He went on;
“You have to admit it’s an unexpected and impressive list.
• A cabinet committee chaired by the Prime Minister with the remit to drive the economy and an industrial strategy for the nation
• A network of seven world leading open innovation centres where industry and academics can collaborate using highly advanced machinery to speed commercialisation of new UK processes and products and help ensure they come to market here rather that in another country [part of the Catapult network]
• A tax structure that encourages both research and development and even pays up on past activity that’s not been claimed before
• A permanent annual investment allowance of £250,000 that supports industrial investment
• A new government department that’s identified export potential for UK companies in certain overseas markets for sectors such as pumps, taps and valves and fluid power [ITI]
• Six national initiatives helping firms explore new technologies such as flexible manufacturing, mass customisation, additive layer manufacturing/3D printing, the internet of things and through life engineering support services for new business opportunities.”

I have to agree with him. The building blocks for a strong UK economy; which means a strong industrial base whether in supply or manufacture, are, in many ways for the first time, now in place. Only time will tell if the full potential of all of this new ‘machinery and resource’ is realised. Certainly the BFPA will continue to work hard on behalf of its members in contributing to the efforts associated with doing so.

Chris Buxton
27th September 2016