Examination of Witnesses (Questions 80-97)
CONSTRUCTION CONFEDERATION,
CONSTRUCTION INDUSTRY
COUNCIL, CONSTRUCTION
PRODUCTS ASSOC.
23 OCTOBER 2007
Q80 Chairman: It has roughly doubled
in my constituency in the last two or three years.
Mr Colley: I think at the moment
it is about £23, something like that, and it will go to around
about £30 next time round. I think it is also quite fair
and reasonable to give an indication of where it is going in the
future so the industry can plan to do something about it, which
it is doing. So, for my mind, this is a tax I agree with. There
are plenty of others I do not, but that one I do.
Q81 Chairman: You might discuss how
you could use some of the sums raised to help some of the people
who are suffering from its consequences. More seriously, you talked
about your industry's response to rising energy prices, but has
not one of those responses been to move jobs abroad, particularly
the glass sector, for example, which has moved very extensively
abroad? Have we not just exported jobs and carbon dioxide emissions?
Mr Colley: I think it is always
a danger that as you get higher regulation (and, effectively,
that does create higher costs of production, particularly compared
to the Far East, which I think is largely unregulated) it is likely
that much more carbon will be produced in producing some items
than perhaps in a country like this. To some extent it can be
not just exporting the problem, but it can be exporting and making
the problem worse, so I think that can be a concern.
Q82 Chairman: Can we turn briefly
to research and development. Mr Fison, I was very struck by some
of the things you told us when we came to see you on that visit
to the hospital about the fragmentation often in the house building
sector in the UK compared with Sweden, I think it was, where a
much more coherent sector has enabled much more R&D by Skanska
in its products. Is that one of the reasons the construction industry
has such a poor reputation for R&D, the fragmentation? Is
the poor reputation fair? If it is not, what can be done to improve
its reputation?
Mr Fison: I think there are three
parts to this. It should be responded to in three ways. From a
contractor's point of view, you are absolutely right, Peter. The
UK contracting market is incredibly fragmented and as such the
amount of money that we have available for R&D in an industry
which makes 2% profit is not large, and I think that is a hold-back.
There is a benefit of size for some players. In the Swedish market,
which we were talking about, the industry divides between three
or four players. There is a consequence to that. They happen to
make twice as much profit there as we do, but it does enable them
to invest in R&D. So I think there is an issue to be addressed
in fragmentation of the UK market.
Mr Colley: I am not sure these
criticisms entirely apply to the manufacturing sector in part
because it is quite concentrated, it is quite a size, the players
are quite big in it, and there is quite substantial R&D which
is done in the UK. We have something in the region of 50 or 60
people with PhDs or similar qualifications who work for us in
the UK on research products and process research, and I suspect
we are not alone in that in terms of the manufacturing industry,
so I think size does help.
Mr Raynsford: If I can add the
third dimension, there is an element of research which is necessary
for the industry but which is unlikely ever to be commercially
attractive because there is no immediate market application, and
I am very conscious that looking back when I was construction
minister we had a budget of around £23 million in the DETR,
as it then was, for construction research precisely for this need.
There is worry among the research community that the disappearance
of that (because the DTI approach was very much towards generic
rather than industry specific research) has resulted in some very
necessary work for the industry not being undertaken, and I think
that is an issue.
Q83 Chairman: We will have a more
detailed section on research again in our evidence sessions later
on in this inquiry. Have you got any particular views on the Building
Research Establishment?
Mr Raynsford: It is an organisation
that does very important work and is a valuable source of expertise
and information for a huge range of players in the industry.
Q84 Chairman: I will tell them you
said that. Can you tell me anything about the national platform
for the modern built environment?
Mr Raynsford: It is a product
of—
Q85 Chairman: It is not a general
knowledge question!
Mr Raynsford: No, it is important,
because it is an industry-led approach towards identifying the
needs of the industry and it has very much the support of the
Strategic Forum.
Q86 Chairman: Is it helping on the
question of R&D?
Mr Raynsford: I think it is generally
seen as positive, but that does not substitute for the gap that
I have already mentioned.
Q87 Chairman: Can I express my particular
gratitude for your memorandum, which I really enjoyed reading—perhaps
enjoy is the wrong word—dated 27 June with factual examples
of the problems of regulation. I get rather fed up with industry
whingeing about the generality and not providing the specifics,
and you have done a magnificent job of providing the specifics.
One of the themes that comes out of this excellent, very useful
and rather chastening document is the Building Regulations, where
often some even conflict with each other. What can we do about
building regulations to maintain their effectiveness, which you
have highlighted the importance of in some of your answers today,
without making them a problem?
Mr Fison: I think that is a very
difficult one. I certainly think the regulations, in general,
have moved us in the right direction. They sometimes seem to change
a bit frequently and expand a bit rapidly but, having said that,
maybe more advice about where the regulations are going in advance
so that we can see it. There are conflicting ones from time to
time where you think, "That is stupid", and you have
got people in direct conflict. How the hell you get rid of those
stupid examples I am not sure.
Q88 Chairman: Mr Colley has particularly
made the point about timeliness and Worcester Bosch, if I can
make this point about some of the requirements on new boilers,
announcing them very late in the day making it very difficult
for manufacturers to respond.
Mr Colley: Yes, and I think sometimes
some of the issues around building regulation are actually resolved
very late on before enactment. My own feeling is that the best
way of avoiding this kind of thing is for consultation with the
industry before getting to that point, which I am sure would avoid
some of these issues arising?
Mr Raynsford: And it does involve
keeping out of the silos, because I think one of the illustrations
that we gave was the conflict between Part B, which is fire safety,
and Part M which is disabled access. If either had been looked
at just by the respective communities, they will focus on their
particular concern, and the issue was not identified perhaps as
quickly as it should have been, so an approach across the range
rather than just looking at the individual set of regulations
is important.
Q89 Chairman: Hansen was one of the
very first examples of acoustics, sound requirements and thermal
requirements as well.
Mr Raynsford: Yes.
Q90 Chairman: Part L, I think it
was, a roofing contractor was having to do much more work than
customers wanted to comply with the Building Regulations and being
blamed for inventing unnecessary work. Has that been a frequent
problem? I think it is Part L from memory.
Mr Raynsford: Part L is the one
that has probably had the most concern because it was recently
issued and there was a real problem with the relatively late issue
of the supporting guidance and documents, but that is the area
where there is probably the greatest scope for giving advance
notice with the steps towards the 2016 target.
Q91 Chairman: So what can government
do? Keep out of the silos and be more timely is the summary answer.
Mr Raynsford: Very good; absolutely
right.
Chairman: Anne Moffat.
Q92 Anne Moffat: I must say, I have
really enjoyed this session, I have learnt an awful lot today
and thank you all for participating. I am going to ask you: if
you could implement one piece of industry best practice from any
country, what would it be?
Mr Colley: Perhaps it is a question
of how wide I am allowed to have this wish really.
Q93 Anne Moffat: This is a huge session,
so go for it.
Mr Colley: Much of shall we say
the regulation which affects the construction industry does really
emanate from Europe these days. My own feeling is we are not influential
enough there in the construction and the creation of this regulation
in the first place. I think some of it may be things like funding
issues with BSI, these sort of areas, but I think it is something
that we need to be much better at, and if that was a wish, that
is the area we would have more influence.
Mr Raynsford: If I can start by
saying that the professional side of construction is in many respects
seen as a model internationally by other countries, and we are
not just achieving two and a half billion pounds worth of overseas
sales designing all sorts of things. Eco-towns are now part of
the agenda here, but British consultants are doing eco-cities
for China already. So, this is an industry which at its best is
world-class and what my concern is that we extend that capability,
that world-class performance, much more widely through the industry,
and I do think better integration through the supply chain as
part of the process is vital to that.
Mr Fison: I would reintegrate
parts of the industry if I had a magic wand; I would start putting
back what I consider has been a series of salami cuts and try
to cut out the waste that occurs between each of those different
parts, and that might well result in some bigger players in the
industry and those bigger players I think would then suck the
rest of the industry along, not only in the UK but as a worldwide
resource. So I would reintegrate and allow some consolidation.
Q94 Mr Bone: Can I go back to your
answer, Mr Colley. I find it hard to believe that it is not that
the Government is not trying hard enough to get the regulations
from Europe right for this country; I think it might be more that
our European colleagues are not listening to us. I find it hard
to believe that the Government would not have the expertise or
would wish to get the things right but are having problems on
the other side of the channel. Do you think that would be a fairer
way of putting it?
Mr Colley: Yes, I suspect it is.
For instance, waste regulation coming in from Europe, they can
sometimes hit the industry in quite unexpected ways in that products
can be defined as waste which are not waste. We have had a whole
series of these. If they are defined as waste, then you are put
to enormous expense in terms of things you have to do in terms
of dealing with them and covering them and these sort of issues,
and so I think sometimes there are issues there which can perhaps
be resolved but which originally were, if you like, created through
European legislation which if perhaps the way it was constructed
in the first place would have perhaps avoided some of these issues.
Q95 Mr Bone: If it had been a local
decision here, of course we would be able to go back and correct
that, but it is much more difficult if it is emanating from the
European Union.
Mr Colley: That is right, because
there is always an element of interpretation as to what Europe
intended, what they want and what is going on in other countries.
Q96 Chairman: Gentlemen, this was
very much an introductory session. I hope we have tried to reflect
the issues that you gave us in your written evidence as being
important to you, but before I bring things to a conclusion, just
one or two last points. Is there anything you would like to add
or qualify before we finish that you feel we have missed out that
you have not done justice to? No. Excellent. I will give you chance
to reflect on your notes for a second. While you are doing that,
this inquiry will to run until late January; so further clarification,
written submissions from you or any other witnesses are welcome
through the whole process. If there is nothing else you want to
add, I have one problem always. When we come to publish our report
some time probably in February or at Easter the press always want
a headline in the report because they are only going to have one
story. We have dealt with a bewildering range of stories today,
so following on from Anne's question, if you were now writing
the press release for our report what headline would you like
to see on it? In other words, what is the most important thing
you have told us today?
Mr Colley: Construction industry
found to be efficient.
Chairman: Shock horror!
Mark Hunter: Can I suggest: can we fix
it? Yes, we can.
Q97 Chairman: That is The Sun
headline. I am thinking more Financial Times? Mr Fison
has not got an idea.
Mr Fison: I was not going for
the Financial Times. I would have had: a great place to
work. I think we need to improve the quality of the people entering
the industry and we need more of them.
Mr Raynsford: My ambition would
be: the product is great, the people who make it are also great—that
point about negative perception of the industry and a positive
perception about the product and countering that.
Chairman: Excellent. Thank you very much
indeed, gentlemen. You have been, if I may say, as I expect of
you, Mr Raynsford in particular, model witnesses. You have trained
your colleagues very well indeed. We have really enjoyed the session.
You have been informative, useful and commendably brief in your
answers. We will expect to meet again on 13 November, if the House
of Commons concedes to reforming our Committee over the prorogation,
when we will continue our investigation with a new list of witnesses.
Thank you very much indeed.
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