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Trade associations key to UK growth says report

Dec 19, 2012
Lord Heseltine launched his long awaited government commissioned report, ‘No Stone Unturned in Pursuit of Growth’, on 31 October. Among the 80 or so recommendations Hestletine sighted the close involvement of trade associations with government as a key element in the nation’s road to recovery with lead associations appointed to represent specific industry sectors.
The British Association of Removers (BAR) was one of only a handful of trade associations to be consulted on the report and focussed on the need for smaller sectors like the removals industry to be represented properly and not be side-lined by broader sectors such as the wider logistics industry. BAR also called for improved standards, clarification of the role of trade associations and a code of practice.  It also called for a clear divide between legitimate trade associations
such as BAR and other organisations claiming to represent the sector.

Extracts from the Heseltine report:

3.99 Trade associations clearly have a key role to play in improving government’s engagement with business sectors. The problem is the reality on the ground. In general sectoral representation in the UK is fragmented, duplicative and often poorly resourced. There is no legislation governing trade associations and no requirement on them to be registered. Anyone can set one up.

3.100 The result is a proliferation of bodies of variable quality. The Trade Association Forum estimates that there are currently as many as 3,500 trade associations in the UK. There have been various attempts to address the problems of business representation dating back to the Devlin Commission in 1972, but the issues of fragmentation and proliferation are still very much alive today. There has been little effective action to address these issues since that report.

3.101 Many of these issues are for business to sort out for itself – I discuss this further in Chapter 5. However, through the way it chooses to engage with sectors, government can provide powerful incentives for trade associations to improve and rationalise.

3.102 First it needs to reintroduce the concept of lead associations. This would require government to nominate a trade association as the focus for its engagement with a particular sector. Government would then channel all of its engagement, such as consultations, through the lead association. Permanent secretaries and ministers should specifically ask whether policy has been developed in consultation with the lead association. This does not involve any sort of veto on government policy. It is designed to ensure a deeper understanding of the issues and opportunities involved. It simply ensures, as a minimum, proper consultation. Again it is common practice overseas.

3.103 A condition of nomination must be that the lead association takes on responsibility for ensuring that the views of the entire sector are fairly represented, and that steps are taken to draw all trade associations operating in a particular sector into new, more strategic working arrangements. This can be done, not only through mergers, but through the creation of umbrella bodies. The creation of the Construction Products Association is an example of what is possible. So too is the formation of ADS in 2009 through the merger of the Association of Police and Public Security Suppliers, the Defence Manufacturers Association and the Society of British Aerospace Companies. It would be a welcome initiative if industry more widely examined the plethora of such bodies with a view to streamlining and improving focus where appropriate. In the end they are paying for these bodies and should ensure that they are getting the best value for money.

Hestletine expressed a cautionary note regarding the concept of lead organisations following his experiences during the 1990s when President of the Board of Trade.

3.106 I introduced the concept of lead associations in the 1990s but it did not survive. This stop, start approach does not work. Effective trade associations can make a major contribution to the development of productive partnerships between government and the private sector. They are a prize worth striving for, but they need nurturing. The point has been made to me that government gets the trade associations it deserves. If it wants to see trade associations raising their performance, government needs to show a consistent approach and a sustained commitment to joined-up partnership working.

 
To read the full report visit www.bis.gov.uk/publications.

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