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Queen's recommendation having been signified--

Motion made, and Question put forthwith, pursuant to Standing Order No. 52,

(a) any expenditure incurred by a Minister of the Crown under the Act; and
(b) any increase attributable to the Act in the sums payable out of money so provided under any other enactment.--[Mr. Betts.]

Question agreed to.




18 May 2000 : Column 564

Hard Flooring

Motion made, and Question proposed, That this House do now adjourn.--[Mr. Betts.]

7.15 pm

Mr. Martin Linton (Battersea): I am grateful to Madam Speaker for giving me the opportunity to introduce this Adjournment debate on what may, at first, seem a rather recondite subject--the application of the construction industry training board levy to hard flooring firms. It is not a subject that is often discussed at bus stops and bars in my constituency, and it has not sent right hon. and hon. Members rushing into the Chamber to hear what it is about.

I am raising the subject because of an injustice in how the system operates. I understand that hard flooring firms all over the country suffer from it. I make no apology for the fact that I raised the issue with regard to a particular firm, Wright's Flooring, and its owner, Brian Wright, who lives in my constituency.

Many of us have green filing trays on our desks, marked "In", "Out", "Filing" or "Case work". I also have a tray marked "TD" which is short for "Too Difficult". That is where I put difficult problems that require too much work--problems that have a long history, that involve two or three Departments, or that have been described in an unnecessarily complicated way. I confess that I would have been tempted to put this problem into that tray, where it would have languished for a long time--probably for ever--were it not for the fact that Mr. Wright is such a palpably honest and hard-working man, and he has a very good case.

I have to do four things in my allotted time: explain the nature of the injustice; describe briefly the history that has led to it; suggest what can be done to resolve the problem; and suggest whose responsibility it is.

The nature of the injustice is simple. Mr. Wright is paying a training levy to the construction industry training board. His competitors, on the whole, do not pay it. He does not object to paying the levy. He is not a critic of the CITB; on the contrary, he sends apprentices to be trained in the arts of laying vinyl and other hard floors through the CITB at Erith. He thinks, by and large, that the CITB does a good job, as do I. However, he objects to paying the levy while others do not.

Mr. Wright does not claim that the money that he pays is extortionate. He pays about £3,300 a year on a turnover of about £500,000. Of course, that is rather misleading. The levy is a very small proportion of the wage bill, but a much higher proportion of the profits. He works in a highly competitive business, and if his profit margin is only about 5 per cent., that comes to about £30,000 a year. That is all that he gets from running the business, and out of that he has to find £3,300, which is quite a sizeable chunk.

It is not so much the percentage that matters as the principle. Why does he pay but not his competitors? To understand that, I shall briefly go over the history. Hard flooring firms are considered part of the construction industry, whereas carpet layers are considered to be part of the furniture industry. The law decided some years ago that sticking lino on the floor with glue constituted construction, whereas fitting carpets constituted furnishing. It is the glue that makes the difference. There

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is an arcane argument about what happens with carpet tiles, which are also glued. I think that it was ruled that that glue was a removable adhesive and therefore did not count as proper glue. So hard flooring firms pay the levy and carpet layers do not because there is no longer a furniture industry training board. That is not a big problem. The significant problem is that firms are classified according to what they mainly do. Firms that lay fitted carpets will almost invariably also, if asked, fit hard floorings.

In this instance, Mr. Wright is a specialist hard flooring contractor. He prefers to remain with what he is best at, which is hard flooring. By and large, his competitors are carpet laying companies that also engage in hard flooring. They are usually much larger than Mr. Wright's firm. The hard flooring work that they turn over, though only a small part of their business, or at least less than half of it, is often much greater than Mr. Wright's. They do not pay the levy and he does.

It would be understandable if the smaller companies did not pay the levy and the larger ones did. In this instance, however, it is the smaller specialist companies that pay while the larger ones do not. The smaller companies have to charge the same rate per square metre as the larger companies. If they did not, they would be driven out of business. The smaller companies have to absorb the cost of the levy as well as the diseconomies of scale that they are bound to suffer.

When the system was set up originally, every firm had to pay a training levy, if not to the construction industry training board then to another training board. I do not need to remind you, Mr. Deputy Speaker, that there were 28 training boards covering all industry. If an employer did not pay to one, he paid to another. It did not matter that a firm was classified according to what it mainly did. There were no ragged edges because the whole of industry was covered.

However, in the 1980s all but two of the training boards were abolished. In my view that was a retrograde step, but as that is not my central argument, I shall not pursue it. The present situation is that the ragged edges matter. The House will understand that ragged edges are anathema to hard flooring layers. That is what they are paid to avoid. We like floor covering to go right up to the wall and we like the join to be invisible. I think that they are entitled to expect that the Government will deal with the ragged edges in the training levy system with the same care and precision.

What can be done to resolve the problem? I wrote to the Minister and he made a couple of suggestions. First, he said that it is open to a trade association to ask the responsible Minister to remove its sector from the scope of the CITB levy. It would have to satisfy the Minister that the majority of its members wanted to stop paying the levy, and that satisfactory voluntary training arrangements were in place. I have put the matter to the Contract Flooring Association, which is based in Nottingham. It replied:

The association asked me to make it clear that the objection has never been to the CITB itself, and that it is recognised to be doing an excellent job in many

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construction skills. Scaffolding and steeple-jacking are good examples of that. The problem is not the quality of its work but the fact that some firms pay the levy and some do not. The situation seems haphazard and unfair.

The majority of the CFA's members are already outside the scope of the levy as a result of a case brought to an industrial tribunal by Tyndale Carpets. When that firm won its case, the CITB did not appeal. As a result, nearly all the flooring companies came out of the CITB, leaving only a few hard flooring companies in its scope. Ironically, Tyndale is now one of the competitors that Mr. Wright faces. It does far more hard flooring work than he does, but it does not pay the levy.

In any event, Mr. Wright does not want to come out of the scope of the CITB levy. Instead, he wants everybody to compete on a level playing field. The problem lies not with the levy but with the rule that it applies to firms mainly engaged in hard flooring. One obvious solution would be for firms to pay the levy on the proportion of their wage bill that relates to hard flooring. I put that to the Minister in my letter. He replied:

I sympathise with his problem, but who has the responsibility for finding the solution? The remedy may be in the hands of the trade associations. I encourage them to pursue that--if possible--if they can agree that all hard flooring companies should come out of the CITB.

However, that might merely move the ragged edge further along. The real problem is that, since the abolition of almost all the training boards, it is the Government's duty to find a fair way of deciding who pays and who does not. It is not enough to observe that it is difficult to think of a solution that would not create more problems.

If Mr. Deputy Speaker, you hired people to lay vinyl in your kitchen and they did not lay it under the fridge because the fridge was hard to move, you would say that it was their problem; it would be their job to solve it. It is exactly the same for the Government. Since the abolition of all the other training boards, we have been left with a ragged edge around the construction industry. On our own admission, that creates several anomalies. The job of Government is not to say that the problems are difficult to solve, but to find ways of solving them.

Many firms find a way out of the problems through dishonesty. They have only to state that the majority of their work comes from carpet laying and they are in the clear; or, if they fail to declare their full wage bill, they do not need to pay the levy. In fact, they do not even need to tell the CITB of their existence. The onus is not on the business to pay the levy, but on the training board to collect it--unlike the Inland Revenue and Customs and Excise. As 30,000 firms join or leave the industry every year, that is hard to police.

However, the situation is also hard for small, specialist, long-established firms such as Wright's Flooring. Mr. Wright has been running the business since 1962. He employs about 10 skilled craftsmen. He believes in training youngsters and, as a result, has often had father-and-son teams in his work force. Such small firms are exactly what we need in my constituency; they are specialised, skilful and reliable, and do not try to do what they are not good at.

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Mr. Wright has a strong belief in training people for the job, and in treating people--and being treated--fairly. That is why he objects so strongly to the situation in his industry. Why should he pay, while others do not? Sadly, he often thinks of giving up his firm--even though he has a full order book--because he feels unfairly treated.

What is especially galling is that everyone agrees that he is being unfairly treated. The CITB agrees that he has a case, although it still charges him the levy; the Minister agrees that there is an anomaly; and, as Mr. Wright's representative, I certainly agree that he suffers an injustice. The problem is that he can do nothing about that injustice; it can be remedied only by Parliament and the Government--he looks to them.

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