Exclusive: Red tape burden is damaging UK, says Fenner

In an outspoken attack on the Government, Mark Abrahams, the chief executive of Fenner, urged policymakers to adopt a more business-friendly approach to manufacturing which would give companies the confidence to continue investing in their UK operations.

The FTSE-250 company is a global leader in heavyweight conveyor belting and employs around 4,000 people. It turns over more than 400m a year and has a presence in five continents with 29 manufacturing facilities around the world.

Mr Abrahams said businesses and manufacturers in particular "have at least one hand tied behind our backs" because of over-zealous regulators and lawmakers.

He added: "We have higher standards of health and safety than many companies. We have that sense of responsibility. I doesn't need any government to tell us that.

"If you took the legislation away it would not make any difference to what we do."

Multinational companies may think twice about establishing bases in the UK to serve European markets, said the 54-year-old.

"If you had to stick a pin in the map to serve Europe, what are the reasons for sticking the pin in the UK? One of the problems you are up against is if you look at the manufacturing infrastructure it is a damn sight smaller than it was.

"That's not to say you close a factory in the UK and head to Eastern Europe. But bit by bit as that infrastructure goes and as critical mass of manufacturing goes out of the UK it becomes harder and harder to deal with.

"When good toolmakers go out of the country and you have to source from elsewhere in Europe that's a greater cost than your competitors have."

Mr Abrahams said: "There is no silver bullet. To be world class at manufacturing you have to be doing it for years and years. It needs stable conditions without too many logs rolled in your path. We need a period of stability and policies that say 'we want manufacturing and we love manufacturers' because, by god, do we need exports at the moment. But we don't have the infrastructure to support the expertise we do have."

With the weak pound, UK manufacturers are estimated to have a 10 per cent currency advantage against those in the Eurozone, but any competitive advantage is eroded by additional infrastructure costs, he said.

Mr Abrahams also warned against a knee-jerk policy response of subsidising the manufacturing sector through grants as this would create an artificial situation with no long-term sustainability.

He gave an example which he said illustrated the absence of a co-ordinated approach from local and central government towards important manufacturing businesses.

Fenner was founded at a site in the east of Hull in 1861. It is well known in the area and many of the staff live nearby. The local council recently gave planning permission for new homes to be built close to the factory, to which Fenner objected, warning against noise from its round-the-clock operations.

The homes were finished about two years ago and soon after came complaints from new residents about noise. The company has since had to spend hundreds of thousands of pounds on reducing noise disturbance at the factory, said Mr Abrahams.

"What does the council want us to do? Move to Poland where our market is? Once more it is chipping away at what makes us viable in the UK. Do you think our Polish and Chinese competitors have these issues? Of course they don't."

The 'to stay or not to stay' dilemma

If he was to locate his business based solely on the customer base, Mark Abrahams would up sticks and take Hessle-based Fenner abroad in an instant.

In reality though, broader considerations come into play.

Mr Abrahams said: "At the end of the day we have a highly skilled workforce. We are the technical centre of the world in respect to many of the products and we have to treat that with kid gloves.

"The lifestyle of those people has to be considered. It's not easy to move to Poland. That's primarily what's keeping us.

"In the future, if I have a choice of recruiting new people do I recruit in China, Poland or the UK?

"The government is making the decision easy for me. I am not very proud to be saying that, but I have to be doing what's right for the company."

Around one fifth of Fenner's 4,000 employees are in the UK. The company has sites in Hull, Lincoln, Hampton and Leeds.

The Department for Business, which is headed by Lord Mandelson, said: "We take costs to business seriously and have sought to timetable the introduction of any new measures to avoid extra costs during the recession."