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Posted on 21 Aug 2012 by The Manufacturer

Terry Scuoler, chief executive of EEF, tracks the developing debate on whether green and growth are conflicting or complementary goals.

Following our ‘Green and Growth’ report, published six months ago, the CBI released its own take on the matter. It concurred with our analysis. There need not be a choice between green and growth – but having the right policy framework in place matters.

The results of a recent EEF member survey show however, that government has yet to deliver a framework to satisfy UK manufacturers.

Seven out of 10 UK manufacturers have set environmental targets that are more ambitious than legislation in areas such as waste reduction, energy efficiency and water use. Manufacturers recognise that leaner, more efficient operations are also more competitive ones.

Ironically, manufacturers see legislation targeting climate and environmental impacts as holding them back. The burden of differing and competing reporting demands results in more paperwork and less innovation. In addition, research from government itself shows that UK manufacturers in energy intensive sectors pay more in energy taxation and for climate change policy than anywhere else examined.

Our survey shows that these factors are affecting investment decisions.

While the Red Tape Challenge is starting to make an impact in areas such as employment law, the Coalition Government has overlooked the complex, costly and incoherent climate and environment landscape entirely. We are calling for a comprehensive review ahead of the next Spending Review.

“Seven out of 10 UK manufacturers have set environmental targets that are more ambitious than legislation”

To be clear, we absolutely agree with the objectives of this regulation but we think they can be met in a way which works with the grain of manufacturing. While we clearly need to meet the challenge of decarbonisation we also need to ensure that the UK is an attractive option for investment and internationally competitive.

A more strategic approach is required and EEF proposes a new green and growth ‘stress test’ – where all new and reviewed legislation is routinely assessed against these two objectives.

Finally, while government policy continues to push for more investment, our survey shows that access to finance continues to hamper the ability of manufacturers to implement new schemes and roll out new technology to improve their efficiency and cut waste, carbon and water use.

While a Green Deal for SMEs is welcomed, we need a broader debate on innovative financing models to deliver long-term green objectives.