Anyone who has ever tried to un-pick the complexities of the regulatory machine that is the UK Parliament will know just how challenging an undertaking it can be. Over the past century, consecutive UK governments have evolved into a complex network of different departments, sub-departments, agencies and committees, each driven by their own political or private agendas and seemingly operating in an environment in which none has any direct authority over any of the others.
As if the UK system were not complex enough, we are now subject to the activities of the European Union and the lion’s share of UK legislation now emanates from Brussels. Even worse is the fact that it is often ‘gold-plated’ by over-zealous civil servants before finally finding its way onto UK statute books.
All of this activity has resulted in UK industry being subjected to what the Government quaintly refers to as ‘regulatory burden.’ This is, of course, a euphemism for the ball and chain that government has placed around the ankles of the already over-taxed private sector who are desperately trying to compete in world markets where many of their competitors are almost free from any such burdens and in many cases are given significant government funding support.
SMEs need help
Larger corporations actually employ whole public affairs departments to help them to deal with this burden and to manage the all-important relationships with the regulators. Depending upon their political influence, they meet with varying degrees of success but not without considerable investment of time and money.
So where does this leave the small to medium-sized companies like my own organisation, Endoline, which contributes significantly to what the pundits claim is approximately 85% of UK GDP? We certainly can’t afford to employ Public Affairs departments. It is estimated that the UK’s mechanical engineering companies may be spending in excess of £430 million a year on red tape. On average this is £33,000 per company where the average turnover is just £2.5 million.
Apart from being chairman and MD of Endoline, I am also president of the Processing & Packaging Machinery Association (PPMA). Our CEO, Chris Buxton, is often quoted as stating that ‘governments rarely listen to individuals; they rarely listen to individual companies; but when an entire industry sector speaks with one voice, the voting landscape can be influenced and governments pay attention’. A fundamental obligation of our trade association is to provide that single voice and represent our member companies, including my own, in the corridors of government.
A united voice
To achieve this aim it is most important that the voice with which we speak is of a credible size. Accordingly, some years ago PPMA was party to founding an alliance of like minded trade associations called the Engineering & Machinery Alliance, (EAMA). Collectively, this alliance, comprising of 10 associations, represents over 1,400 companies, 60,000 employees and a combined turn over in excess of £7 billion.
Since its inception, our alliance has made significant progress in many key areas of government policy and legislation which impact directly upon SMEs in the packaging sector and beyond. In the early days we were particularly successful in delaying unwelcome revisions to the ubiquitous Machinery Directive and made great inroads in diluting the impact of the REACH regulations on the use of industrial chemicals. We were also active in getting capital equipment such as packaging machinery excluded from the first implementation of the Waste Electronic and Electrical Equipment Directive, (WEEE).
More recently, our focus has been on the desperate skills shortages in our industry and in securing dispensations for SMEs from the Government’s so-called ‘familyfriendly’ policies. Regular meetings with Treasury have led to a doubling of first year capital allowances to help encourage long term investment and there has also been a relaxation in business rates for SMEs in the form of a two-year dispensation extension.
All of these initiatives and others not mentioned here serve to illustrate how with the correct approach, government and industry can engage constructively in meeting common goals that are in the interests of all concerned. Like most things in life, it’s all about effective communication.
Views expressed on this page are those of the author and may not be shared by this publication.
Alan Yates, chairman and MD of Endoline Machinery Ltd, and president of the PPMA Alan Yates
