Engineering Employers' Federation
response to the consultation on the Powers of the National
Assembly for Wales
|
| Introduction |
| The Engineering Employers’
Federation (EEF) is the voice of the engineering and manufacturing
sector with a growing national membership of over 6000
member companies, employing around one million people.
Membership of the EEF in Wales is similarly growing with
a broad cross section of the manufacturing sector represented. |
| The EEF is pleased to be given
the opportunity to engage in this consultation process
that will assist in determining the future shape and scope
of the National Assembly for Wales. |
| The views of EEF member companies
in Wales have been canvassed upon the key questions set
out in the consultation document. As one might anticipate,
there has been a mixed response: this document attempts
to synthesise those responses into a constructive input. |
| Many respondents to our survey
reported that they found it difficult to respond to questions
posed in the consultation given their very broad nature.
Another common theme running through the responses received
has been that companies find it difficult to determine
precisely how the National Assembly impacts upon their
business interests as there is some confusion over which
issues are currently the responsibility of the Assembly
and which continue to rest with Westminster. |
| However it should be noted that,
in general, EEF member companies are very clear about
the relationship they have with the Assembly is via its
principal agencies, ELWa and the WDA, and there are much
clearer views about how relationships are working with
these bodies and how their activities impact. |
| It is against this background
therefore, that we have attempted to respond to the key
issues raised in the consultation document. To assist
clarity of interpretation, our response has been structured
in relation to each of the key questions raised. |
| Responses. |
|
Q.1. In what practical ways do the powers
of the Assembly, or the limits on its powers, impinge
on you, your organisation or the people whom you serve
and what are the best examples of this from your point
of view? |
|
The Assembly has significant potential to
impact upon the interests of EEF member companies. Its
powers enable it to effect an environment in which businesses
can either flourish or fail. It has critical powers and
responsibilities in the areas of Planning, Environment
and Transportation and in Education and Training. It is
also responsible for commissioning support for businesses
through the WDA and ELWa and it plays a key role in the
deployment of European Funding. |
|
It is probably in the field of Education
and Training that policy in Wales has begun to diverge
most rapidly from that in England. There have been some
positive impacts as a result. For example, the removal
of the upper age limits on the Modern Apprenticeship Scheme
in Wales has resulted in the introduction of greater flexibilities
for businesses. Conversely, there have been negative impacts
resulting from, for example, recent structural changes
to the Education and Training system in Wales where the
key support body is perceived to be less supportive of
business than was the case in the past. |
|
Another key area where the powers of the
Assembly impact upon member companies is in relation to
transportation. The existence of an adequate and efficient
transport infrastructure is a pre-requisite to business
competitiveness. EEF member companies clearly perceive
that significant opportunities continue to exist to improve
the strategic transport network in the Principality. |
|
Q.2. Does the Government of Wales Act
provide the Assembly with the powers it needs to operate
effectively and meet the expectations of the people of
Wales? |
|
There are mixed views on this issue, which
in part may stem from a lack of a clear understanding
of the extent of the current powers. Many respondents
to our survey believe that the Assembly has yet to demonstrate
that it is able to utilise its current powers in securing
desired improvements to both infrastructure and service
delivery. Some have argued that the barriers to progress
are not legislative but more to do with process: that
in some areas process has overtaken purpose. There is
therefore a widespread feeling that the Assembly has yet
to demonstrate credibility across a range of policy areas
and that there needs to be more time for the change process,
started four years ago, to bed in before further change,
including the allocation of additional powers, is considered. |
|
Q.3. Whether, and if so how, the powers
should be extended, strengthened or changed and whether
they should include tax varying powers? |
|
There are very mixed views about this issue
amongst EEF member companies. Many members take the view
that there should be no extension of the powers available
to the Assembly at all. There is a clear general feeling
that the Assembly is still in its infancy and has yet
to demonstrate a real capacity to manage its existing
powers effectively. In broad terms, the feeling is that
any extension of powers should only be considered in relation
to areas where competence to deploy existing powers has
been demonstrated and only where the powers are necessary
to effect changes of strategic benefit to Wales. |
|
EEF member companies are very nervous about
suggestions that the Assembly should have additional tax
raising powers as there is a perception that this could
lead to an additional and disproportionate cost burden
for businesses. Such a development would undoubtedly have
serious consequences for the hard-pressed manufacturing
sector in Wales. It is clear that, in considering whether
the Assembly is to be given tax raising powers, it will
be important to distinguish between replacement and additional
taxes and the manufacturing sector would require further
detail to make an informed judgement |
|
Q.4. If the Assembly were to acquire
greater law making powers – is it inevitable that
it would need to be reconstituted on the Parliamentary
model? |
|
There is no real support for this proposition
amongst EEF member companies. |
|
Q.5. If so what organisational changes
would be needed to support this model and what would be
the gains and losses from making this change? |
|
It is not generally believed that complete
independence could be a real option for a revised Assembly.
There is a serious concern that any further organisational
change may result in yet more complicated structures and
an associated increase in the cost burden for businesses
in Wales. |
|
Q.6. How effective has the Assembly been
in influencing UK Government policy making in relation
to Wales – what are the practical examples which
illustrate the strengths and weaknesses of the process? |
|
The general perception of EEF member companies
is that the Assembly has not been effective in influencing
the UK government on key issues of significance to the
manufacturing sector. The Assembly is perceived as being
unable to influence the negative impacts associated with
policies such as the Climate Change Levy and that it has
exercised little power of influence over recent issues
of concern to the manufacturing sector, for example, extraordinary
increases in Employer Liability Insurance premiums. |
|
Q.7. What are the advantages and disadvantages
in principle of having a law making process which is shared
between Cardiff and Westminster and what are the respective
contribution of AMs, MPs and Peers? |
|
The principal advantage of having a shared
process is perceived to be a degree of commonality between
the legal frameworks operating within England and Wales
but with the existence of sufficient flexibility to allow
for regional variations where this is appropriate. |
|
From a business perspective the key issue
is ease of interpretation of the law: more complexity
is perceived as likely to generate more red tape and additional
cost in due course. |
|
The role of AMs is perceived to be to ensure
that secondary legislation is sought where regional issues
are such that there is a need for a distinct approach.
The role of Welsh MPs and Peers is seen as supporting
the case for and development of such secondary legislation
as required. |
|
Q.8. What would be gained or lost if
powers to make fundamental policy changes through primary
legislation were passed from Westminster to Cardiff? |
|
The key gain were this to happen would be
a greater ability on the part of the Assembly to bring
more focus to the resolution of regional problems and
issues. The potential downside, depending upon the scope
of the primary legislation envisaged, could mean that
companies operating across the UK need to comply with
differing requirements and this could result, in some
cases, in an unwelcome increase in complexity and cost.
|
|
Q.9. How would Welsh interests be affected
if the role of Welsh MPs were to be reduced as a consequence
of the acquisition of primary law making powers by the
National Assembly? |
|
It is clear that, in the event that the
Assembly were to acquire primary law making powers, there
will still be a critical need for Wales to be able to
represent its views on a broad range of issues in the
UK context. In the event of any change, it would be vital
that these issues are properly identified and that mechanisms
continue to exist to allow effective representation. Any
reduction in the role of Welsh MPs would need to be judged
against this background. It may be that, in some cases,
other mechanisms might usefully be developed to mitigate
any reduction in the role of Welsh MPs. |
|
Q.10. How would Welsh interests be affected
if the Secretary of State’s role was reduced as a
consequence of the acquisition of primary law making powers
by the Assembly? |
|
Our members consider that much would depend
on how any changes impact on the current role of the Secretary
of State. Conceivably elements of the role will become
redundant, but there is a general consensus that Wales
will need to have continued representation at Cabinet
level. |
|
Q.11. What would be gained or lost if
there was a clearer separation between England and Wales
in policy development and implementation? |
|
It is clear that where policy development
and implementation relate to regional issues there should
be greater focus and relevance achieved through clearer
separation. There is some evidence of this emerging where
policy divergence has already commenced. |
|
Q.12. How should we evaluate the costs
and benefits of moving to a different form of devolution
in Wales? |
|
It has been suggested that the starting
point should be to measure the actual costs and the benefits
that have accrued since the creation of the National Assembly
in 1999. There is a general perception amongst EEF member
companies that the business case for the changes already
introduced has yet to be evaluated and proven. |
|
Critical to any evaluation, whether adopting
an historic or forward-looking perspective, will be the
need to consider the additional costs generated by the
process and which feed through to the manufacturing sector
and which then impact negatively on already depressed
margins. |
|
Q.13. What are the benefits which should
be included in this evaluation – and what values
should be attached to them? |
|
It is clear that before the range of benefits
can be defined, it will be necessary to have modelled
the revised form of devolution in some detail. It is only
once there is a specific proposal that it will be possible
to develop an appropriate evaluation strategy. |
|
It is of course recognised that a very broad
range of benefits will need to be taken into account in
any evaluation and that these will go beyond the direct
interests of the business community: considering both
individual and community perspectives. However, there
is a strong feeling that whatever benefits are included
in any evaluation, they must be an analysis of how any
proposal either contributes to or detracts from the competitiveness
of companies based in Wales. |
|
Q.14. In some policy areas there is uncertainty
about funding streams in relation to areas where responsibilities
that are devolved overlap with responsibilities that remain
within the control of the UK Government. Is this an issue
for you or your organisation – if so what have been
the practical problems and how might they be resolved? |
|
This is not an issue of direct relevance
to our organisation. |
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