A report from a group of Conservative MPs has called on the Government to adopt a more resource efficient economy for the UK.
The 2020C Productivity and Efficiency group, chaired by Thanet South MP Laura Sandys, recommends a new drive for competitiveness and a new ambition for greater focus on margins.
In the report, Sweating our Assets, it says there is a clear opportunity to deliver quick economic wins through being more resource efficient and productive and that manufacturers could increase profits by 12 per cent by doing so.
It also says that the economy can no longer be solely judged on top line sales as global competitiveness will be framed around profitability, greater resource productivity and improved efficiencies.
Laura Sandys said: “Normally productivity means focussing on labour productivity, but this report rebalances the debate from labour productivity to resource productivity.
“In addition, it calls for support for a new growing business sector called ‘Remade in Britain’ – thereby ensuring that resources are regarded as assets with a second and third life.”
According to the report, the gains from becoming more resource efficient, more productive and resource resilient are significant:
- A 12 per cent increase in profits per annum for manufacturers
- Over 300,000 new jobs in the remanufacturing sector
- Improving our balance of payments by £20 billion by 2020 as a large percentage of finite resources are imported
- £3 billion in savings from avoiding landfill costs and retaining resource value.
Among the recommendations in the report, it calls for landfill bans on key materials and for waste policy to be diverted to the Department for Business, Innovation and Skills away from Defra. This would ensure that resource efficient policy was more closely aligned as a business issue.
In his foreword to the report, EEF – The Manufacturers’ Organisation chief executive Terry Scuoler wrote: “We need a policy framework in place that encourages and supports businesses to drive efficiency through their business models. To date there has been a real lack of vision and ambition and arguably a lack of foresight in identifying the challenges that lie ahead.
“Other strong manufacturing nations, such as Germany, the US, Japan and South Korea, have grasped the nettle and are preparing themselves. It is now time for the UK to pick up the mantle.
“I am delighted to see that the focus of the Commission is on productivity and efficiency as a means of improving resilience and bolstering growth. The recognition in the report of the role of these business models in the future portfolio of UK manufacturing activity is very welcome.
“Co-ordinated Government action and support is an essential ingredient. As a first step we need to see waste redefined, both legally and as a business issue, by moving responsibility for waste policy to the Department of Business, Innovation and Skills.
“Focussing on remanufacturing as a discrete sector will enable a fresh focus on the market barriers and regulation that is restricting its growth and help to focus innovation and support where it is needed.
“Moreover, we want to see a new financial incentive to encourage more investment in this area, driving further efficiencies and potentially providing help to shield companies from the price volatility in input costs they have experienced in recent years.”
Along with Laura Sandys MP, the group members include David Ruffley MP, Nicola Blackwood MP, Steven Barclay MP and Baroness Wheatcroft.