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EAMA - Engineering & Machinery Alliance Press Release

Tuesday 12 October 2004

 

UK manufacturers employ an extra person just to deal with red tape
SME survey for HM Treasury Regulatory Review

 

SME manufacturers have to employ an extra person to handle red tape according to a survey carried out by the Engineering and Machinery Alliance (EAMA).

In its submission to HM Treasury's Hampton Review, EAMA says that its manufacturing members spend between £20,000 and £50,000 a year on staff time related to the introduction of new regulations and regulatory inspections.

Typically the managing director of a Midlands component manufacturers said:
"A new compliance issue means understanding the requirements and putting new systems in place to ensure that we do it right. I reckon that it takes half of my time and the time of other people in the business equivalent to at least £50,000 in money terms, when profits have been running at £30-50,000 for the last three years."

The main conclusions were that most companies rated their inspectors as good and believe that they are treated fairly. ISO standards, which are used as a commercial framework to set process standards, help simplify regulatory inspections.

However, regulation affects manufacturers much more than service companies.

Too many of the regulations are ambiguous and a source of conflicting advice where there is a high turnover of inspectors.

The complexity and ambiguity of the VAT regulations on exports is such that the CEO of the packaging sector company said that it would be easier for him to export the identical machine made in his US factory than to export it from the UK.

New employment guidelines issued with good intent on issues such as stress at work became a 'rogues charter', feeding the claimants' culture and giving work to the legal profession.

EAMA is an alliance of trade associations representing 1,000 SME manufacturers with a combined turnover of £3 billion. For its Treasury submission it interviewed executives in five different manufacturing sectors, packaging, machine tools, components, printing and engineering and one in sales and service for robotics.

(ends)

Notes to Editors:

  1. The interview texts are available on request (tel 020 7298 6450, e-mail eama@mta.org.uk)

  2. EAMA's six member associations are: British Automation and Robot Association (BARA), British Turned Part Manufacturers Association (BTMA), Gauge and Toolmakers Association (GTMA), Manufacturing Technologies Association (MTA), Printing, Papermaking and Converting Suppliers Association (PICON), Processing and Packaging Machinery Association (PPMA)