The Rt Hon Theresa May MP Stephen Phipson CBE - Daniamant
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2017 / 2018
MANUFACTURING & SERVICES
A YEAR IN PERSPECTIVE
FOREWORDS
The Rt Hon Theresa May MP
Stephen Phipson CBE
E L E C T R O N I C R E P R E S E N TAT I V E S
Ultra Electronics Communication & Daniamant Ltd
Integrated Systems (CIS)
Pattrick Brothers Communications
Electrocomponents
Aston Microphones
Precision Devices
AP Technology
RF Solutions Ltd
Qualitrol UK
Intratest
KIGG
Glensound Electronics
Aquavision
CC Electronics
F E AT U R E S
Review of the Year
Review of Parliament
©2018 WESTMINSTE R PUB LI CATI O N S www.theparliamentaryreview.co.uk
Foreword
The Rt Hon
Theresa May MP
Prime Minister
British politics provides ample material for analysis in the leading in changes to the future of mobility; meeting the
pages of The Parliamentary Review. For Her Majesty’s challenges of our ageing society; and driving ahead the
Government, our task in the year ahead is clear: to revolution in clean growth. By focusing our efforts on
achieve the best Brexit deal for Britain and to carry on our making the most of these areas of enormous potential,
work to build a more prosperous and united country – we can develop new exports, grow new industries, and
one that truly works for everyone. create more good jobs in every part of our country.
We have already made good progress towards our goal Years of hard work and sacrifice from the British people
of leaving the EU, so that we take back control of our have got our deficit down by over three quarters. We are
laws, money and borders, while negotiating a deep and building on this success by taking a balanced approach
special partnership with it after we have left that is good to public spending. We are continuing to deal with our
for jobs and security. The EU Withdrawal Act is now on debts, so that our economy can remain strong and we
the statute books to provide legal certainty at the point can protect people’s jobs, and at the same time we are
of exit. We have reached agreement on protecting the investing in vital public services.
rights of EU citizens living here in the UK and British
I believe that Britain can look to the future with confidence.
citizens living in the EU, on an implementation period to
We are leaving the EU and setting a new course for
give businesses time to prepare, and on a fair financial
prosperity as a global trading nation. We have a Modern
settlement. We are now pressing ahead to reach an
Industrial Strategy that is strengthening the foundations of
agreement with the EU on our future relationship that
our economy and helping us to seize the opportunities of
honours the result of the EU referendum and sets the UK
the future. We are building on our country’s great strengths
on course for a prosperous future.
– our world-class universities and researchers, our excellent
Getting the right Brexit deal is essential; but it will not services sector, our cutting-edge manufacturers, our vibrant
be sufficient on its own to secure a more prosperous creative industries, our dedicated public servants – we can
future for Britain. We also need to ensure that our look towards a new decade that is ripe with possibility.
economy is ready for what tomorrow will bring. Our The government I lead is doing all it can to make that
Modern Industrial Strategy is our plan to do that. It means brighter future a reality for everyone in our country.
Government stepping up to secure the foundations of
“
our productivity. It is all about taking action for the long-
term that will pay dividends in the future.
British politics provides
That is why we have set an ambitious goal of lifting
UK public and private research and development
investment to 2.4 per cent of GDP by 2027. It is why we
are developing four Grand Challenges, the big drivers
ample material for analysis in
the pages of
“
of social and economic change in the world today: The Parliamentary Review
harnessing artificial intelligence and the data revolution;
FOREWORD | 1
Foreword
Stephen Phipson CBE
Chief Executive, EEF
Britain’s strength is as a manufacturing and innovation and 4.7 per cent for chemicals, when exported as the
trailblazer. Our industry has a trading relationship finished product to the EU.
characterised by supply chains that weave between the
On leaving the EU Customs Union, and in the absence
UK and Europe in complex patterns. For many British
of a similar robust agreement, manufacturers in the UK
manufacturing companies that trade with the EU, this is
will face the imposition of customs administration when
the only trading environment they’ve ever known.
exporting and importing goods to and from the EU. Even
The UK government estimates that 132,000 traders and if systems are digitalised and streamlined, there will be
businesses will have to make customs declarations for the time and transaction costs currently not experienced in
first time once the UK leaves the EU. the form of import and export declarations, levying of
new duties, the production of origin certificates and the
In 2015 around 55 million customs declarations were
likelihood of physical inspections.
made. The UK’s exit from the EU could see the number
of customs declarations which HMRC must process It is vital therefore that a future UK customs code is
each year increase five-fold to 255 million. This is aligned with the current Union Customs Code.
unprecedented and new territory for everyone. The
This can ensure a range of pre-authorisations in
negotiations on exiting the EU were always going to be
documentation, reductions to inspections and checks
complex.
of consignments at or in the proximity of the border
For manufacturers, there is now an acceptance that the between the UK and EU, and harmonisation of customs
nature of the trading relationship with the EU could and trade facilitation systems between the UK and EU
change. There is likely to be friction and added costs member state authorities on both sides of the border.
of doing business. Although business recognises it will
EEF is calling for continued access to the preferential
have to change, there remains the need for a gradual
trade arrangements. We want to retain preferential
adjustment process to the final new arrangements.
access to third country markets provided by the
For UK companies to flourish post-Brexit, we want and EU’s existing agreements. Many of these markets,
need a bespoke trade arrangement between the UK and including Switzerland, South Africa, South Korea and
EU to become a reality. the Mediterranean area, have become critical bases
supporting EU/UK supply chains.
Maintaining zero rate tariffs is critical to the manufacturing
“
industry and the frictionless movement of goods to
and from Europe. Any new arrangement must provide
continuity of market access for our manufacturers and For UK companies to flourish
be a genuine free trade arrangement, where the tariffs
applied on exports remain at zero.
post-Brexit, we need and want
For many of our members, facing even relatively low
percentage tariffs would have significant cost implications.
The introduction of tariffs on WTO terms, as some in
a bespoke trade arrangement
between the UK and EU to
“
the government want, would see a ten per cent tariff on become a reality
cars, 20.5 per cent on sugar and confectionery items
2 | FOREWORD
A message from
Lord Pickles and Lord Blunkett
The ability to listen to and learn from one another And it is why we, as former Labour and Conservative
has always been vital in parliament, in business and in cabinet ministers and current members of the House
most aspects of daily life. But at this particular moment of Lords, feel it is important to put aside our political
in time, as national and global events continue to differences and work together to ensure these stories
reiterate, it is uncommonly crucial that we forge new are given the platform they deserve.
channels of communication and reinforce existing ones.
In this publication, you will find an insightful take on
With ongoing fractures in Westminster, the the past year in politics from the BBC’s Andrew Neil
reverberations of which are being felt across the and a concise rundown of key events in industry and
country, it is essential that politicians have a firm parliament. Most importantly, you will be able to read
understanding of the challenges with which British in-depth accounts from the individuals and organisations
organisations must contend; and that leaders in who make The Parliamentary Review what it is.
both the public and private sectors are aware of the
difficulties faced by those working in all levels of In this publication, some representatives display
politics, from local government to the national arena. concerns over access to markets and labour. Other
concerns raised in this document are over regulations
This is why The Parliamentary Review combines political and difficulties in compliance, with some representatives
content with stories from a wide range of organisations linking the two issues with Brexit. It is our great honour
– small and large; new and old; those at the peak of and pleasure to have helped provide the platform for
their powers and those who have peaks to surmount. these issues to be aired. We hope that you find these
It is why these stories seek to inspire and challenge all articles – which begin on page 15 with a piece from CIS
who read them. – as thought-provoking and informative as we do.
Rt Hon The Lord Blunkett Rt Hon The Lord Pickles
Co-chairman, The Parliamentary Review Co-chairman, The Parliamentary Review
INTRODUCTION | 3
Andrew Neil
Economy thrives while politics divides
It’s been over two years since the state when it comes to the customs The Parliamentary Review last year,
country voted to leave the European union, the Irish border, immigration is the resurgence of the two-
Union, but Brexit continues to policy and the single market. Only party system in England, another
hang over British politics like an recently, with the Article 50 deadline consequence of Brexit. At the 2017
all-encompassing dark, brooding looming, has some clarity emerged general election, the Leaver Right
cloud, discombobulating established – and not always. I believe this collapsed into the Tories and the
relationships and upturning widespread prevarication has added Remainer Left flocked to Mr Corbyn’s
traditional verities wherever we look. to voter disillusion. Labour party. It is beyond strange that
the two main parties should be doing
Social class no longer largely Just as important, nearly all non-
so well when many regard them
determines how you vote in the UK. Brexit matters have been swept
as weaker, less talented and more
The latest polls suggest the Tories into a Brexit-induced Bermuda
Triangle. This is understandable. But divided than they’ve been in living
now enjoy a lead among working-
class voters. They’ve always won it has added to the gulf between memory. But they got easily over 80
a chunk of working class votes – parliament and the people. per cent of the English vote between
Disraeli called them his “Angels in them in 2017 and all polls since
The impact of Brexit on the suggest that is the new status quo.
Marble” – but never a majority.
parliamentary process has been
As for Labour, even under its generally unpredictable and often The fundamental parliamentary
most left-wing leader ever, it now amusing. Left-wing Remainers now fact in this post-referendum era is
garners considerable support among speak of the House of Lords as a that there is no majority for what
the professional middle classes, bastion of democracy. Right-wing hardliners on either side of the Brexit
especially in the major metropolitan Leavers sound increasingly like divide would like. So, when it comes
conurbations. peasants with pitchforks, determined to determining the eventual shape
to bring the whole edifice of the of Brexit, parliament is very much in
The reason for this psephological the driving seat, as the government
upper house tumbling down.
seachange is Brexit. If you voted has found out the hard way.
Leave, you are now more likely to Jeremy Corbyn, who’s spent his The problem is it’s not sure what
vote Tory; if Remain, Labour. political career railing against the parliament wants that shape to be.
iniquities of the market economy,
Brexit is now the dividing line within Business might despair at what it
now poses as the champion of
Labour and the Conservatives. It splits sees as an increasingly dysfunctional
business (up to a point). Brexiteer
the cabinet and shadow cabinet, political system. But it should
Tories regularly mutter anti-business
backbenchers of both parties and take comfort from the fact that
sentiments in unprintable language.
their voters in the country. The Tory economics and politics are, for the
divisions are more obvious to see Overarching all this turmoil and moment, going their separate ways.
because they are the governing party uncertainty, as I explained in No matter how much you might
and make big news. But Jeremy think politicians are mucking it up,
Corbyn has managed to lose 103 the economy in general and business
frontbenchers, often through Brexit- in particular continue to defy them.
related resignations, which doesn’t
quite have the impact of Boris Johnson I have thought for sometime that
or David Davis walkouts, but must be business and the economy are in
something of a record nevertheless. much better shape than established
opinion would have it. There were
Brexit has also induced something of signs in the early summer of 2018
rigor mortis on both frontbenches. that this was indeed the case. But,
For nearly all of the past by the time you read this, you’ll have
parliamentary year, cabinet ministers a much better idea if I’m right. Keep
and leading Labour spokespeople your fingers crossed – not for my
have been unable to answer the
sake, but for the country’s!
simplest questions on our post-Brexit
Neil believes the two-party system
is the new status quo
4 | ANDREW NEIL
Review of the Year
Breakthrough batteries
the economic benefits, in the global
transition to a low carbon economy.
“The new facility, based in Coventry
and Warwickshire, will propel the
UK forward in this thriving area,
bringing together the best minds from
academia and industry together to
deliver innovation and R&D that will
further enhance the West Midlands’
international reputation as a cluster of
automotive excellence.”
Researchers at Imperial The Faraday Battery Challenge will see
College London have £40 million distributed to 27 projects,
announced what has In March 2018, researchers at Imperial including the development of battery
been described as a College London announced they had
“paradigm shift” in materials and cell manufacturing,
battery technology managed to fuse living and non-living improving thermal management and
cells together in a way that could allow the recyclability of battery packs.
batteries powered by photosynthesis.
Innovate UK chief executive Ruth
Imperial’s Professor Oscar Ces said the McKernan said “for the first time
breakthrough was a “paradigm shift” [there is] a co-ordinated programme
and could have other uses including of competitions across research,
tailored drugs. innovation and scale-up.”
The news came after the government Meanwhile a team at the University
signalled a major drive to make the UK of Southampton invented a new
a world leader in battery technology. design method for electronic systems,
In November Greg Clark, the business combining the computing power of
secretary, confirmed details of the £120 analogue with the energy efficiency of
million Faraday Battery Challenge. digital technologies.
Of this, £80 million is being invested The team published a paper in Nature
in battery development for the car Communications titled “Seamlessly
industry also, with a facility dedicated fused digital-analogue reconfigurable
to this due to open in the West computing using memristors”.
Midlands following a bid by Coventry
New Electronics magazine reported
and Warwickshire Local Enterprise
that this “could prove a significant
Partnership (LEP) and Warwick
stepping-stone towards the next
Manufacturing Group.
generation of ultra-low power, high
Mr Clark said: “Battery technology is battery life and adaptable electronics.”
one of the most game-changing forms
It quoted the lead author of the paper
of energy innovation and it is one
on the benefits the energy efficiency
of the cornerstones of our ambition,
could bring.
through the Industrial Strategy and
the Faraday Challenge, to ensure that Dr Alexantrou Serb said: “Over the last
the UK leads the world, and reaps five decades we have processed digital
REVIEW OF THE YEAR | 5
THE PARLIAMENTARY REVIEW
Review of the Year
signals and have computed using digital interest as a next generation memory
techniques, which has taken us very far. technology by being smaller, more
power efficient and yet being able to
“However, if we are to truly compute
support more memory states when
at the limits of energy efficiency, that
compared to existing technologies that
the laws of physics allow, it would
are routinely used in our smartphones
seem imperative that we need to
and computers.
move towards analogue computation
techniques whilst being much savvier “We soon realised that there is much
about how to mix analogue and digital more to be learned by employing this
signals for maximum effect.” technology beyond its obvious memory
Previous memristor technology applications and have previously
developed at the University of demonstrated how memristors can be
Southampton had managed to pack used to emulate biological learning.”
four times as much data onto a device
In the recent past, data processing in
as previously.
electronics has relied on integrated
Professor Themis Prodromakis, head circuits featuring large numbers
of the electronic materials and devices of transistors – the promised
research group at Southampton’s improvements from the memristor
Zepler Institute, told the magazine: technology could change all that as
“Memristors have gathered a lot of transistors reach their limits.
Chips with everything
In October 2017, the UK Electronic
Skills Foundation reported that
Great Britain had the sixth-largest
electronics industry in the world and
that 90 per cent of all smartphones
had components manufactured in the
UK in them. One million people were
employed in related jobs, and the
electronics sector contributed 6 per
cent of the country’s GDP.
Britain now has the
In February the Financial Times carried an sixth-largest electronics
but larger semiconductor companies. It industry in the world
interview with the chief executive of Arm
is an expensive game and you need a
Holdings, one of the world’s biggest
lot of scale. The sophistication [of the
producers of chips which power most
technology] is very high and the volume
smartphones. The Cambridge-based
of chips is not going down.”
firm was one of the biggest tech firms in
the UK until it was bought by Japanese Arm designs have been used in more
bank Softbank in January 2016. than 50 billion chips since 2014 and
the executive said he expected that rate
Simon Segars responded to
to double with the arrival of the next
concerns that a consolidation in the
generation 5G mobile network. This is
semiconductor industry would damage
expected to connect even more devices
its market position.
to the internet, even as sales in the
He told the FT: “What does this mean smartphone market fell last year, for
for us? Fewer semiconductor companies, the first time. The Japanese bank paid
6 | REVIEW OF THE YEAR
MANUFACTURING & SERVICES
robots continues at an impressive
pace worldwide.
“Key trends such as digitalisation,
simplification and human-robot
collaboration will certainly shape
the future and drive forward rapid
development.”
In May one manufacturer warned of an
imminent drought in chip resistors.
The chief executive of Anglia
Components told EE News Europe
global demand is significantly
outstripping supply, driven by
Current market
increasing electronic content in cars,
conditions mean that
the demand for chip £24.3 billion for the company in 2016, and industrial and consumer products.
resistors is presently and Mr Segars said it had increased
outstripping supply Steve Rawlins told the magazine:
the size of the company, with staff
significantly “We are constantly looking at ways
numbers expanding.
to help our customers and ensure
Chips were not the only growth area that they are aware of the current
for electronics. market conditions. We foresaw that a
shortage in chip resistors was coming
The International Federation of Robotics
about six months ago and invested
(IFR) reported in June that global sales
heavily in inventory.
of industrial robots rose by 29 per cent
in 2017, hitting a record 380,550 units. “It’s ironic that a chip resistor might be
one of the cheapest items, but without
Nationally, the demand was driven by
it, you can be looking at thousands
China, which saw an increase of 58 per
in lost revenue if you are not able to
cent. Roughly 138,000 industrial robots
complete the assembly of the end
were installed in 2017, with South
product it is going into.”
Korea second with 40,000 and Japan
with 38,000. The United States and In June UK manufacturer TT Electronics
Germany installed 33,000 and 22,000 bought Minneapolis-based Precision Inc.
respectively.
Precision works in the same sectors as
However an IFR report in February TT Electronics – the industrial, aerospace
showed Europe and America were and medical markets – but TT also
still ahead of Asia in terms of overall works in the transport industry across
density. The continents had 99 and Britain, the United States and Asia.
84 robotic units per 10,000 human
The British firm has a turnover of
employees respectively. Asia had 63.
almost $500 million, and chief
By sector it was the metal industry executive Richard Tyson said in a
that led the way, growing by 54 per statement: “The acquisition of Precision
cent year-on-year. After that was the is an excellent fit with both our
electronics industry itself at 27 per cent, business and our strategy for growth
automotive at 21 per cent and the food and higher margins.
industry at 19 per cent.
“It has a strong position in markets
President of the IFR Junji Tsuda where the proliferation of electronics is
said: “The growth of industrial increasingly important.”
REVIEW OF THE YEAR | 7
THE PARLIAMENTARY REVIEW
Review of the Year
WEEE
More than £8 million was raised by
the fees charged as part of the Waste
Electrical and Electronic Equipment
directive in 2017, it was announced in
June.
The Joint Trade Association (JTA) said
the money would be spent on a range
of projects to further increase the
recycling and reuse of electrical and
electronic waste.
Roughly £4 million will be invested in
local schemes, with a further £1 million
in research over the next three years,
with the fund accepting submissions The Waste and Electrical
for ideas for projects. The remaining £3 Equipment Directive is
million will be spent on communications More than 522,000 tonnes of WEEE a European Community
directive which has set
and behaviour change projects. was collected in the UK last year. collection, recycling and
recovery targets for all
Website Government Opportunities In March WasteCare Group called on types of electrical goods
said the £8 million fund marked a Department for the Environment, Food
significant increase on the sums raised and Rural Affairs to increase the 2018
in previous years, giving 2015 as an WEEE collection targets.
example of when only £45,000 was
Website Letsrecycle.com reported the
raised and used to fund technical
group’s concerns about the difference
research projects only.
between the amount of waste collected
JTA chair and head of TechUK’s and the amount then placed on the
environment and compliance market.
programme Susanne Baker said: “The
size of this year’s fund means that we In a statement it said: “Our concern
can make a significant difference to is that the potential risks to the
how the UK WEEE regime operates and environment of this missing tonnage
functions. from the formal treatment and recycling
routes are not being taken into account
“There is no urgency to spend the in considering the targets.”
money quickly; the focus will instead
be spending the fund carefully on The European Union target for WEEE
projects that can deliver genuine and collection is 65 per cent, whereas since
lasting improvements to the system 2013 the proportion collected through
with the buy-in and support from the UK’s compliance system has been
the community of local authorities, around the 40 per cent mark.
businesses and civic society groups that
The website said some attributed this
manage and deal with these products
to “changing consumer behaviour,
at the end of life.”
suggesting consumers are now
One project already confirmed will ‘hoarding’ electricals in their homes”,
look at persistent organic pollutants with others saying simply not enough
in plastics used in waste electrical is being done to collect it, particularly
products and electronics. smaller waste items.
8 | REVIEW OF THE YEARMANUFACTURING & SERVICES
The Leeds-based firm called for a 3 per ERP UK general manager John
cent increase in the 2018 target. Redmayne said: “The move to flat
screen [TV]s drove change throughout
It added: “As has been seen with the
the system. We had to change how
current crisis on paper and plastic
waste was collected, stored and sorted
exports, to simply adopt the lowest at local authority level, and in the
cost free-market approach undermines decommissioning and separation of
the UK’s ability to not only meet elements carried out by our partners
the directive requirement, but also further along the chain.”
the government’s aim to leave the
environment in a better condition than He said mobile phone usage had
when it started.” increased significantly since the turn
of the millennium, with the number
The government changed the rules on of households with a mobile phone
the way WEEE works in 2013. rising from 47 per cent to 95 per cent
last year. In 2007, when WEEE began,
In September last year the European
usage was 78 per cent.
Recycling Platform (ERP), the umbrella
organisation for producers, released Mr Redmayne said: “If we assume two
a report showing how far the sector phones per household are changed every
had come in the ten years since the two years, it adds up to an eye-watering
regulations were introduced. 247 million phones in the last 10 years.”
Industrial strategy takes shape
accompanied by an announcement
of a £725 million “Industrial Strategy
Challenge Fund” and “sector deals” for
artificial intelligence construction, the
life sciences and automotive industries.
The announcement also set four
“grand challenges” to the sector to put
the UK at the forefront in developing
the technologies of the future.
The £725 million fund will be spent
over three years with £170 million
earmarked for the construction industry
The Department for and up to £120 million to stimulate the
Business, Energy and development of precision medicine.
Industry Strategy has In April 2017, the government’s
announced a £725 consultation on the green paper for its The first wave of Industrial Strategy
million “Industrial Challenge Fund projects had already
Strategy Challenge industrial strategy closed.
Fund” committed £246 million to the next
Since then there has been a general generation of battery technology and
election, a number of announcements, £86 million in robotics.
the autumn budget and an industrial
Longer term, the government hopes
strategy white paper.
to increase the level of investment in
The latter was introduced by Theresa research and development from the
May and the business secretary, current 1.7 per cent to 2.4 per cent of
Greg Clark, in November and was GDP by 2027.
REVIEW OF THE YEAR | 9THE PARLIAMENTARY REVIEW
Review of the Year
The prime minister said the strategy
would “support businesses in seizing
the big opportunities of our time”,
citing artificial intelligence and big data
in particular.
She said: “As we leave the European
Union and forge a new path for
ourselves, we need to focus on building
a better future for our country and all
the people who live in it.”
The strategy defined the “grand
challenges” as harnessing artificial
intelligence, making sure UK industry Greg Clark, the
business secretary, has
led on clean growth, meeting the
and life sciences, to fintech and creative announced “sector
needs of an ageing society and deals” for artificial
industries.”
becoming a “world leader in the way intelligence construction,
people, goods and services move”. Policies include increasing the rate the life sciences and
automotive industries
of the research and development tax
Greg Clark said: “The way we earn and
credit to 12 per cent and investing an
live our lives as workers, citizens and
additional £406 million to try to make
consumers is being transformed by new
up some of the lost ground in the skills-
technologies. The UK is well placed
shortage areas of science, technology,
to benefit from this new industrial
engineering and maths.
revolution and we start from a position
of significant strength. We have a Infrastructure investments include
thriving research and science base and £500 million to support electric vehicles
are home to a wide range of innovative and working towards local industrial
sectors, from advanced manufacturing strategies.
Countdown to March 29
With a leaving date of March 2019, this They warned the effect might not
year will be decisive for companies trying be confined to low-tech parts of the
to prepare for the impact of Brexit. manufacturing sector, saying “High,
medium-high and medium research
In February a study from the University of
and development-intensive sectors all
Sussex was widely quoted in the media,
seem likely to suffer more from the
with The Guardian reporting that Brexit
effects of Brexit.
could see manufacturing exports cut
by a third, with “leave-voting areas like “This is an important result since the
Sunderland, Coventry, Derby and County UK government’s industrial strategy
Durham suffering most as a result”. seeks to promote high-tech sectors:
The academic analysis from the UK Brexit might make it harder to achieve
Trade Policy Observatory assessed the this objective.”
impact of different Brexit scenarios It estimated that the air and spacecraft
across 122 different sectors and
industry would contract by 8.1 per cent.
said even if the government struck
free trade agreements with every Wired magazine quoted one of the
other major country it could still see study’s authors, Michael Gasiorek, saying:
significant falls in exports. “Brexit will have very complex impacts
10 | REVIEW OF THE YEARMANUFACTURING & SERVICES
Significant swathes of industry were
preparing for the former scenario,
according to a survey carried
out by EEF, the voice of Britain’s
manufacturing sector.
A research paper it published in January
said of the members prepared to give
a view, one third were planning for the
effects of a no-deal exit.
The EEF said in their sampling, larger
companies were more likely to consider
this than smaller firms. The report said:
Hennik Research’s
Annual Manufacturing “Anecdotal feedback suggests these
Report said nearly 75 per on industries ranging from impacting plans range from workforce planning to
cent of manufacturers considering supply chain restructuring.”
on imports and exports both because of
were confident about
the prospects of possible tariff barriers and also complex
But other findings from the research
overseas trade after non-tariff barriers (such as mutual
Brexit pointed to the mixed picture, and
recognition of testing and certification
emphasised that a lot was still unknown
– ie proving that you produce to the about the final shape of Britain’s trade
right standards), impacting also supply relationship with the Continent.
chains both in terms of manufacturing
and service inputs. That is not 55 per cent said the euro hitting a one-
something that industrial strategy could to-one parity with sterling would have
easily counteract.” a negative impact. A weaker pound
has traditionally helped exporters, and
The study considered five scenarios, roughly 15 per cent has been wiped
from leaving with no deal to remaining off the value of the pound since the
a part of the European Economic Area. leave vote.
Apprenticeship levy – one year on
The one-year anniversary of the The levy was an attempt to address
apprenticeship levy saw a chorus of the skills shortage and covers 20,000
condemnation from business leaders. businesses, bringing in around £2 billion
a year. The government’s target is for
The Daily Telegraph said in April: “As
three million people to have started an
anniversaries go, the apprenticeship
apprenticeship by 2020.
levy’s first is one the government might
want to forget” and said it had drawn In April The Times reported the CBI’s
“heavy criticism” in the 12 months criticism of the scheme as “not fit for
since its launch. purpose”.
The levy requires businesses with a The lobby group’s head of people and
paybill of more than £3 million a year infrastructure, Neil Carberry, told the
to pay 0.5 per cent of it into a training paper: “It doesn’t incentivise businesses
fund. The Telegraph said complaints and it doesn’t encourage the creation
ranged from it being too bureaucratic of the kind of training hubs that are
and inflexible to simply being a tax on characteristic of countries where [a
business. levy] is working really well”.
REVIEW OF THE YEAR | 11THE PARLIAMENTARY REVIEW
Review of the Year
In a tacit acknowledgment of some In July 2017 it warned “The
of the criticism of the bureaucracy Apprenticeship Levy is one of the
involved, the spring statement from the most significant changes to the
chancellor, Philip Hammond, said £80 training and development of engineers
million would be set aside for small and and manufacturing talent in recent
medium-sized firms to navigate their memory” and said many companies
way through the system.
were “understandably concerned
Manufacturing trade body the EEF is one about getting the most out of their
of the biggest critics of the scheme. Levy funds.”
The fourth industrial revolution?
In March The Times carried a piece by
EEF chief executive Stephen Phipson
saying manufacturing was “on the cusp
of the fourth industrial revolution”.
He said this period would see new
technology and techniques that would
alter the kind of products the sector
produced and the way it made them,
as well as the relationships between
different parts of industry.
The fourth industrial revolution is
considered to be the combination of Businesses are being
urged to address the
cyber-networks and physical production impact of the next
Union referendum, faced with this
processes that create new, largely industrial revolution
pace of change happening globally, it
autonomous networks.
cannot afford to stand still if it is going
The EEF gave the textiles sector as to deliver greater value to customers,
an example, saying soon customers improve productivity and remain
would be able to personalise and competitive on the world stage.”
3D print their own clothing at
He said on the Continent the
home. Business planning, supply
European Union was leading a series
chains and production could be run
of programmes under the Digitising
more efficiently as communications
European Industry banner. Countries
technology improves.
leading their own change programmes
Chris Richards, EEF’s head of business on this front included Germany’s
environment policy, said it was important Industrie 4.0, Sweden’s Produktion
to note that like previous industrial 2030, Fabbrica Intelligente in Italy and
revolutions, change was largely bottom- Industrie du Futur in France.
up and was largely only recognised
An EEF survey of its members said 80
in retrospect. He warned of the
per cent believed they had to invest in
accompanying risks, like cyber security
new technology as market expectations
and Britain’s poor digital infrastructure.
evolved, and three quarters said
Mr Phipson wrote in The Times: “While technology would fundamentally
the sector has hit a period of uncertainty change what customers expected from
following the outcome of the European the sector.
12 | REVIEW OF THE YEARMANUFACTURING & SERVICES
The publication of the Taylor Review
quantity. But there was no firm
commitment to implement any of the
recommendations.
Matthew Taylor was commissioned to
do the review in 2016 in response to
concerns about the “gig economy”
and the changes technology is making
to the modern labour market.
The work followed a number of high-
profile employment tribunals and other
legal action around individuals who
were technically self-employed but
argued they were actually employees or
workers.
The Taylor Review was
“Good Work” saw a critical response
commissioned by the
government to look In February 2018 the government from unions who saw it as an attempt
into modern working published its long-awaited response to to kick lots of the most contentious
practices
the Taylor review of modern working issues into the long grass.
practices.
The government said in four specific
Theresa May said: “We recognise the areas there would be further
world of work is changing and we consultation – each of which the EEF
have to make sure we have the right said had the “potential to trigger far-
structures in place to reflect those reaching changes”.
changes, enhancing the UK’s position
It had recommended the introduction
as one of the best places in the world
of a new “dependent contractor”
to do business. We are proud to have
status under employment law and
record levels of employment in this
noted that it was “almost impossible”
country but we must always ensure
for individuals to understand the
that workers’ rights are always upheld.
complex principles developed in
“Our response to this report will mean case law that determine someone’s
tangible progress towards that goal as employment status.
we build an economy that works for
This would essentially extend to them
everyone.”
some of the protections available
The response, entitled “Good Work” to workers, including paid holiday,
said the government was committed the right to the national minimum
to improving the quality of work wage and the right not to be
in the country, rather than just the discriminated against.
3D Britain
This nation has one of the top five 3D Research from HP and A.T. Kearney
printing sectors in the world, it was across 30 different countries placed the
reported in June. UK fifth overall in terms of readiness
REVIEW OF THE YEAR | 13THE PARLIAMENTARY REVIEW
Review of the Year
to adopt 3D printing technology –
coming in behind the US, Germany,
Korea and Japan. It is the world’s third
fastest-growing 3D printing market,
also, being outperformed only by Italy
and South Korea.
Britain was pipped only by Germany
among European nations.
HP’s managing director for the UK
and Ireland, George Brasher, said the
government must focus on three key
areas to increase efficiency in this sector
– adoption, incentives and education.
He said: “The UK is at a critical juncture
in these early days of the Fourth
Industrial Revolution. We are well 3D printing is set to
placed to lead the world in 3D printing, revolutionise Britain’s
Duke, an Irish retriever and rescue dog, manufacturing sector
but there is no room for complacency
was born with a defect in his front right
when preparing the workforce for next-
leg and faced amputation.
generation manufacturing.
But Swansea-based printing firm CBM
“The government can accelerate
made him a leg similar to the blades
the domestic market by being an
used by runners at the Paralympics.
early adopter through its procurement
policies, and by supporting uptake Owner Phil Brown, from Bristol, told
among small businesses. Eliminating the corporation: “This is an absolute
customs duties and other trade barriers life changer for him, it really is. He can
on 3D printers and materials is also now walk on it, he can now run at a
essential. slow speed.”
“Government can nurture the growth CBM is a research company spun out of
of a sustainable 3D ecosystem in the University of Wales Trinity St David.
Britain, by encouraging investment
The leg took roughly a year to make and
in digital manufacturing capabilities
“was entirely printed out of a machine
through tax breaks and direct grants.”
apart from a rubber foot, some Velcro
An All-Party Parliamentary Manufacturing and foam at the top to make it more
Group met with the firm and other comfortable for Duke”, the BBC said.
industry experts in June. The group
CBM product designer Benjamin
noted the forward-looking facilities at
Alport said the project had been a
the University of Nottingham and the
real challenge for his team and that
Manufacturing Technology Centre.
they had worked with a consultant
The meeting was chaired by veteran orthopaedic surgeon on the design.
Labour MP for Huddersfield Barry
3D printing is just one technology that
Sheerman.
is in the process of revolutionising
In February the BBC reported that a British manufacturing. Others are
dog which could hardly walk was given alighted upon in the following articles
a new lease of life after a 3D-printed from this year’s Parliamentary Review
leg was made for him. representatives.
14 | REVIEW OF THE YEARMANUFACTURING & SERVICES
Ultra Electronics Communication
& Integrated Systems (CIS)
Rugged, reprogrammable crypto devices
are future-proofed and long-lasting
Gavin Newport, managing
director
U
ltra Electronics Communication & Integrated Systems
(CIS) produce market-leading secure communication
systems, electronic warfare simulation, intelligence
gathering and situational awareness technology for the world’s
most challenging environments, from fighter jets to the
Sahara desert. Ultra CIS is part of the Ultra Electronics group, FACTS ABOUT
a world leader in the defence and aerospace, security and ULTRA ELECTRONICS
cyber, transport and energy markets, with a turnover of over COMMUNICATION &
INTEGRATED SYSTEMS
£785 million. The group has a small head office and executive
team that provide to individual businesses the same agile, »» Managing director:
Gavin Newport
responsive support that they provide to customers, as well as
»» Established in 2009
formulating Ultra’s overarching corporate strategy. This provides
»» Based in Greenford, London
CIS with the advantages of a small business mentality and
»» Services: Production of
agility together with big business backing. Here to describe the defence solutions
company at length is their managing director, Gavin Newport. »» No. of employees: 300
»» They work with MoD and
Nato
Our modus operandi »» www.ultra-cis.com
CIS has grown from being a spin-off of the communications and sonar business
into a standalone organisation comprised of four units, with a turnover of
£80 million and over 300 employees. This success has been built on providing niche
secure communication solutions for a range of military and commercial systems.
This has been achieved by forming a team of specialist engineers, coupled with
manufacturing capability to assemble systems to the highest production standards in
ULTRA ELECTRONICS COMMUNICATION & INTEGRATED SYSTEMS (CIS) | 15THE PARLIAMENTARY REVIEW
Highlighting best practice
a secure environment. Our customers in advance of, the changing threat.
demand that we protect their data The practical solutions to this are
both in the field and back home in the programmable devices (software-
factory – a demand we meet. defined) and agility in being able to
produce new functionality at pace.
Ongoing support to our systems
This functionality needs to work first
“
is of great importance. We supply
time and continue working, so – to this
comprehensive packages to ensure
Our customers our systems serve our customers well,
end – we have invested in substantial
capability, in both automated
demand that whether that is guidance in its use and
deployment or in field repair. This close
functional testing and environmental
test solutions.
we protect proximity to our customers helps us to
understand their needs and, in turn, Another area that increases our agility
their data develop future systems to match their is the utilisation of core IP across
both in the requirements. a number of developments and
technologies. The aim is to design
field and back What we are solving functional elements once, and then be
able to utilise these elements across
home in the Our solutions are used by governments our portfolio. This is to underpin our
factory – a
demand we
“ and commercial organisations
to protect against corruption or
information theft. This includes
cryptographic solutions, secure
technology, after which customised
elements are added to tailor the
solution to the customers’ needs. This
meet communication, situational awareness
is a mix of ingenuity and innovation:
ingenuity, that is, to make the most
and electronic warfare simulation use of existing capability, coupled
and test systems. What is common with innovation to future-proof our
throughout is that the threat is solutions.
increasing, and therefore there
exists an ongoing demand for these
solutions. Another common theme
Examples of our capability
is that the necessary systems and As part of the ECU RP programme,
CIS tests all items produced solutions must be flexible and have Ultra developed a modern,
to ensure that they can the ability to change in pace with, or programmable, high-grade
operate in the toughest
cryptographic solution that could
environments
replace legacy units. Physically, it is
comprised of a considerably smaller
core unit that can be housed in a
range of enclosures to provide form-fit
replacement for on-platform crypto,
enabling quick integration without
costly platform modifications. Designed
to be future-proof, the software-
definable technology enables it to be
upgraded anywhere, anytime.
This programme enabled us to develop
a close relationship with both the MoD
and GCHQ – or, more specifically,
NCSC. This close relationship, in
tandem with collaboration with other
suppliers, has resulted in a community
that can fulfil the UK’s requirement for
sovereign crypto and cyber solutions,
16 | ULTRA ELECTRONICS COMMUNICATION & INTEGRATED SYSTEMS (CIS)MANUFACTURING & SERVICES
while also building capability within
UK industry to take into the export
market. The export campaigns can
be direct Nato derivatives or expertise
that influences the design of our
commercial products.
In the communications sector, CIS
developed the HIDL (High Integrity
Data Link) radio, which has been
utilised on the Watchkeeper UAV
(unmanned air vehicle) to provide
robust command and control to
multiple UAVs and associated ground
stations. The HIDL unique waveforms
deliver a low probability of interception
and detection with networked secure
multi-way anti-jam communications.
The initial technical development has
continued to be refined and utilised Integrated multidisciplinary
in a variety of products including the teams are essential for the
developing the engineering teams successful delivery of our
Hawk jet trainer. In the Hawk, HIDL is
programmes
used to provide an air network which to provide the expertise needed to
is used for radar simulation. continue expanding in a specialised
and technical field is a challenge. CIS
We also have a range of products works hard to develop talent, such
that incorporate protection of critical that we can provide the necessary
national infrastructure. This includes skills through a focused graduate
situational awareness systems that development programme and
protect oil and gas platforms, harbours,
involvement in STEM schemes.
and even coastal diamond mines.
“
It should be noted, though, that it is
Looking to the future becoming increasingly difficult to find
engineers with experience of these People are the
CIS has seen its market change
significantly, with growth in export and
types of development. There’s a lot
of talent that has followed the path
heartbeat of
solutions for the commercial market.
Export has increased partly through
of software application development, all business,
necessity as spend within the UK and
Nato is challenged. This has presented
opportunity where we have developed
and the more embedded engineering
solutions are not as common as they
once were. Finding people with this
experience, therefore, is difficult.
and nurturing
them is crucial
“
solutions that have wider applicability,
but it has also had its challenges. There
Consequently, a combination of to success
requisite training, enhancing existing
are areas where clearer guidance for
skills, nurturing young talent from
ability to export products to specific
apprenticeship schemes and university
nations would be beneficial. Moreover,
assistance with financial mechanisms engagement is necessary.
to assist with ensuring payment would As technology develops, the challenges
be welcome.
increase, but so do the opportunities
People are the heartbeat of all available – something to which we
business, and nurturing them is look forward.
crucial to success. Recruiting and
ULTRA ELECTRONICS COMMUNICATION & INTEGRATED SYSTEMS (CIS) | 17THE PARLIAMENTARY REVIEW
Highlighting best practice
Electrocomponents
New Electrocomponents headquarters
in London’s Pancras Square
Lindsley Ruth, CEO
B
ased near King’s Cross, London, Electrocomponents
is a global, multichannel distributor of industrial and
electronics products. Offering over 500,000 products
FACTS ABOUT from 2,500 leading suppliers, they ship more than 50,000
Electrocomponents parcels daily to over one million customers. Their operations
»» CEO: Lindsley Ruth span 32 countries, and 61 per cent of their global revenues are
»» Established in 1937 digital. The Electrocomponents headquarters are located on
»» Based in London Pancras Square – the recently rejuvenated area of King’s Cross
»» Services: Global distributor of in London. Their vision is to become first choice for customers,
products for engineers suppliers and employees, with a strong commitment on top of
»» No. of employees: Over 6,000 that to managing the environmental impacts of their business.
worldwide
Expanding upon this is their CEO, Lindsley Ruth.
»» Operations in 32 countries
»» More than 500,000 products
»» Over one million customers
Who we are
»» Ships more than 50,000
parcels a day Our operations in the UK, under the trading brand RS Components (RS), represent
»» Over 2,500 leading suppliers around 24 per cent of the company’s global revenue and employ nearly 3,000 people
»» £1.71 billion revenue for the across the country. We have two distribution centres in the UK: one in Nuneaton,
year ending March 31, 2018 Warwickshire, and the other in Corby, Northamptonshire, where our UK headquarters
are also based. In addition to this, we have 16 RS Local trade counters nationwide.
»» FTSE 250 listed
»» www.electrocomponents.com Corporate responsibility is an integral part of our business and we strive to align
our values and strategy with responsible and ethical business policies and practices.
The group’s key environmental impacts include energy use and the attendant
CO2 emissions, waste and recycling, packaging use and water consumption.
18 | ELECTROCOMPONENTSMANUFACTURING & SERVICES
Our environmental policy articulates company within our industry sector
our commitment to protect the to receive the certification. Working
environment and to use energy and towards CEMARS and ISO 14064-1
other resources efficiently to provide accreditation means we have learnt a
our products and services. Our target is lot. With this knowledge we now have,
to continuously improve environmental we can also help our customers reduce
performance in all key areas. their carbon footprint.
We manage our environmental In fact, we routinely work with our
“
performance through a group- customers and suppliers to reduce CO2
emissions, and with our providers of
wide reporting and measurement
process. We encourage sites to gain third-party logistics, too, to assess CO2 We strive to
certification to the ISO 14001:2015 emissions due to our use of their services
and those of their subcontractors. This
align our values
Environmental Management Standard
where this supports our business work is ongoing and helps to reduce and strategy
objectives. Twenty-two of our sites
worldwide are currently certified. The
the carbon footprint of our distribution
supply chain.
with responsible
group also complies with the CRC
(Energy Efficiency) regulations.
Throughout 2018, we undertook a
series of projects and environmental
programmes to help improve
and ethical
business policies
“
Energy usage performance in the UK: and practices
RS UK has led the way in addressing »» We have invested £400k for further
its environmental impact and over the lighting upgrades in our Corby
past five years has reduced its CO2 and Nuneaton operations. We’re
emissions relative to sales by 37 per also investigating an IoT initiative
cent. A customer audit (UVDB) of our for monitoring equipment so
environmental management systems that visitors can see our gas and
and operational control, which was electricity consumption. In the last
carried out by Achilles, resulted in a year, we’ve reduced energy usage
score of 100 per cent. by over 15 per cent and taken the
opportunity to ask for advice on
We have participated in the annual energy reductions.
Carbon Disclosure Project (CDP) for Voice-automated picking
ten years, and, in 2017, we were the in RS warehouse
top company out of 44 in the FTSE350
Information Technology sector with a
score of A-, placing the group in the
CDP “Leadership” category.
For the eighth consecutive year, RS
UK received the Carbon & Energy
Management and Reduction Scheme
(CEMARS) Gold Certification Award.
We have retained this certification
by achieving the annual target of
reducing, by at least 2.5 per cent,
the principal sources of emissions
relative to turnover. Over the past five
years, we have continued to reduce
carbon emissions (in scopes 1, 2, 3)
by 27 per cent. Indeed, we are one
of 180 organisations and the only
ELECTROCOMPONENTS | 19THE PARLIAMENTARY REVIEW
Highlighting best practice
commercial waste from our operations.
By introducing digital devices and
voice-automated picking, we have
reduced the amount of paper we use
in addition to increasing the accuracy
of our deliveries. We also work with
our customers and suppliers to increase
the use of reusable packaging.
Our UK operation is a zero to landfill
company with a recycling rate of 83
per cent. Zero to landfill is our target
for all markets over the next five years.
Furthermore, we aim to have 100 per
cent recyclable packaging across the
world by the end of March 2019.
Packaging
We continue to seek opportunities
to reduce the quantity of packaging
consumed per order, while also
Planting trees to offset
CO2 emissions
ensuring the effective protection of
»» Automatic meter reading (AMR) customer orders during transit. We
has been installed, and, combined continue to review our packaging
with regular reporting, is helping and to train packaging teams about
to improve energy awareness and the importance of the efficient use of
to drive down usage. This has been materials in preparing customer orders.
supported by upgrades to heating, Packaging use per £1 million in sales
ventilation and air conditioning was down by 17.5 per cent over the
last financial year.
“
systems in the RS Local trade
counters across the UK; moreover, a
For the second consecutive year, we
Over the past number of the trade counters have
have actively supported Earth Day,
been moved to newer, more energy-
five years, we efficient buildings.
a global initiative which, this year,
focused on the increasing risk of
have »» Electric car charge points have been
installed at a number of our UK
plastic pollution. Employees across
the business organised a variety of
continued to locations, and we are encouraging activities to support this initiative,
reduce carbon the use of hybrid and electric
vehicles, of which we now have 25
such as donating a number of 100
emissions (in
scopes 1, 2, 3)
“ on the company car fleet.
»» We are partnering with Carbon
Footprint Ltd and a number of local
per cent recycled plastic benches to
local schools.
We are proud of our environmental
by 27 per cent schools to plant 500 trees. This will performance to date, but know
that there is always more that can
help offset the CO2 emissions due to
air travel on company business. be done. We have many exciting
plans for the future, and aim to
continue demonstrating good
Waste generation and recycling environmental stewardship. Our hope
Our primary waste streams include is to remain a leading proponent of
card, paper, wood and plastics (all of environmental excellence.
which are recycled), as well as general
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