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
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.
Notes to Editors:
- The interview texts are available
on request (tel 020 7298 6450, e-mail firstname.lastname@example.org)
- 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)