§ 3.6 p.m.
§ Baroness WHITE rose to move, That this House takes note of the Sixteenth Report of the European Communities Committee on the approximation of laws relating to construction products (R/3289/78) (H.L. 64). The noble Baroness said: My Lords, I beg to move that this House takes note of the 16th Report of the Select Committee on the European Communities which deals with construction products. This may sound rather a dull subject for those who are not specialists in the matter, but in fact this report on a draft Directive and a draft resolution considers matters of quite considerable importance in the constitutional and administrative arrangements of the European Community.
§ In an accompanying memorandum, included in the report from the Department of the Environment, it is made quite clear that these documents may be regarded as a test case, and therefore it was the view of the Select Committee that we should draw the attention of your Lordships' House to these matters. The report was published on 23rd August and a Press notice was issued—again, because we felt that the matter was of concern not merely to those directly interested in the construction industry in the United Kingdom or elsewhere, but also because it raised these wider matters.
§ This is one of the relatively few occasions when I may express gratitude to the other place, because they had in fact looked at these draft documents before we did. We decided that it would be a waste of the time and effort of all concerned if we took further evidence from certain bodies who had already communicated to the appropriate committee in the other place. We obtained consent to take cognisance of those documents, and to that extent therefore this is a joint effort of both Houses of Parliament. The committee in the other place had, I think, hoped to have 16 a debate but other matters intervened, and this was frustrated in the interests of the General Election.
§ As I said, we should make it plain that this is not just a run-of-the-mill draft Directive. There are, in fact, two documents directly before us; namely, a proposal for a draft Directive and a further one for a resolution which deals with the list of priority products which should be included in this operation. These documents were issued on 4th December last year, since when there have been further documents proposing some slight amendments to both the Directive and the resolution, to which I may turn in a moment. I am hoping that my noble friend Lord Hinton will deal with what I might call the practicalities of these matters, because I think no one in your Lordships' House could claim to have greater experience of harmonisation and standardisation of products than my noble friend. But I shall leave him to speak for himself.
§ I hope to deal more particularly with the procedural matters which are of more general interest and require, if I may say so, rather less specialist and technical knowledge than I possess. When I mention that I should perhaps, just by way of illustration, produce one item of information for your Lordships' House. There are no fewer than 17 pages of printed matter on the rule for the assessment of punched metal plate timber fasteners and, if you apply comparable instructions for every product that you can think of in the construction industry, you will see that to deal with that adequately you need an expertise which few of us possess.
§ Before I deal with the two principal documents in front of your Lordships, I think I should draw your attention to an extremely useful little periodical called European File which is issued by the Commission of the European Communities, the Directorate-General for Information. It is No. 12 in the current year's issue and it deals directly with the matter which is the substance of these proposals; namely, the removal of technical barriers to trade. It was issued in June of this year and was followed by two other booklets in the series which are also germane: No. 13, The European Community and Consumers and No. 14, European Competition Policy. For those of us who are not directly concerned with 17 these matters but who like to keep ourselves as well informed as possible, these booklets are very useful.
No. 12, The Removal of Technical Barriers to Trade—which is what this exercise is all about—gives a very persuasive background, urging that this is a desirable exercise. It starts by suggesting that standardisation will help large-scale production, which ultimately, therefore, by economies of scale, should help the consumer. It is also necessary within the Community to protect consumers' health and to promote users' safety, and it continues:
These norms should theoretically help to expand trade, but this is not always the case".
It points out, further, that each country sets its own norms but that rarely are these different national norms compatible with each other; and the creation of national norms sometimes has the undeclared objective of protecting national manufacturers, which can be very tempting in periods of economic crisis.
§ It gives various examples, one of which interested me as a housewife. Swiss producers have adopted standardised and completely original dimensions for their kitchen units and the structures into which they are to be fitted. The Swiss housewife can thereby not use kitchen units produced abroad alongside those manufactured in her own country. We can think of many situations in which similar practices might well prove very tempting indeed. It then points out that as early as 1969 the Community began this attempt to harmonise the norms in force in Member countries, with the objective of eliminating the technical barriers which restrict trade. There are a number of other non-tariff barriers to trade, but I think that we all agree that technical barriers are indeed among the most important.
§ If one were successful in this mammoth task of harmonising these various products which may be subject to trade between the members of the Community, then one would have an Economic Community of some 260 million consumers, and that might indeed be regarded as one of the main objectives of the Community. However, it is made very clear that this is bound to be an extremely slow process. Our booklet says that the elimination of technical barriers is a long-term project. 18 It indicates that in the 10 years which have elapsed there have been no more than about 130 harmonisation exercises which are now actually operative—a not very rapid rate of progress—and it considers that there should be a minimum objective of 300 harmonisation Directives in the industrial field. They give no justification whatsoever for this particular number but simply seem to assume that that is about the limit of what is practicable, given the staff at their disposal in Brussels. They point out that no sooner have you settled one harmonisation exercise than another one comes up on the horizon. New barriers are, of course, being created every day.
§ As at the time of writing this descriptive booklet they had only, I think, 30 persons engaged on this exercise—who also had to keep up with updating earlier harmonisation proposals—the speed with which one can do anything is bound to be extremely slow. As they rightly say, it only needs one national civil servant to lay down a technical norm incompatible with those in other countries to create a technical barrier to trade. So the possibilities are endless.
§ It was because of the slow progress that was being made that the nominated European Parliament which was dissolved in the summer made some very vehement protests at the snail's pace at which this desirable procedure was being conducted and made it very clear that in their view a different procedure really must be adopted. The proposals which are before us this afternoon are partly, at any rate, the fruit of those protests at the slow pace at which these matters were being dealt with.
§ It is very easily understandable why our colleagues in Brussels have made the proposals that we are considering this afternoon. Originally, one would have had to use the procedure of Article 100 of the Treaty whereby these matters would go to the appropriate Council of Ministers who would have to decide, on a unanimity basis, as to whether or not the proposals were acceptable. It is quite plain from what I have already indicated that you cannot expect Councils of Ministers to go into the sort of details which have to be considered in draft Directives of this kind. Therefore the 19 proposal now before us is that implementing committees should be established which would have representatives of all the Member States but which would proceed, not by a unanimity rule but by a qualified majority. This would be under Article 155.
§ It is this proposal which has caused such considerable heart-searching among the members of our own Select Committee on the European Communities. It would alter very considerably the weight of authority in the Community and would have, in our view, certain extremely important practical disadvantages. At the present time, if we have the kind of draft Directive to which we are accustomed it is published in full text and can be, and is, commented on, and in our case is reported, if required, to your Lordships' House. And consultations can take place openly.
§ What we are very much concerned about with this new proposal is that we have no guarantee at all that the full details will be published, that the consultations will be open and that it will be possible, if necessary, to report more information to the parliamentary institutions in the Member States. So we are very much concerned both about the principle and to a somewhat lesser degree as to whether in fact this test case has been brought forward in an appropriate field; namely, the field of construction products.
I should perhaps say that, in the consultations which we have had with the interested parties in the United Kingdom, differing views have been expressed as to whether this is in fact an appropriate area in which to conduct this new and to some extent experimental procedure. The National Council of Building Materials Producers are quite blunt about it. They wrote to us as follows:
We find it very difficult to understand the need for this directive when work is currently and satisfactorily proceeding towards the harmonisation of standards for a very wide variety of products".
§ On the other hand, only this morning I received correspondence from the British representative on the European Union of Agrément, which deals with innovatory products—new products which have not been fully accepted by the standards institutions in the various countries but 20 which are nevertheless passed as being suitable for use or operation. They point out that the building materials producers in this country are among the more conservative element in the building trades, whereas their members are the active exporters, and they suggest that their members might perhaps see greater advantages in the proposed harmonisation than our building materials producers seem to find evident.
The chairman of the European Union of Agrément says:
There might be opposition to the EEC framework directive from the traditional sector who have no interest in export but who expect that the imposition of international standards might in some instances allow the use of materials in the United Kingdom of a lower quality than before".
The letter proceeds:
It is difficult to say to what extent exports might increase if barriers in Europe were removed. The Agrément Board knows of a number of cases where the time and cost of obtaining approval in Germany or France has made manufacturers decide to forego export to those countries.
I am in no position to judge as between these two organisations, or others who have expressed opinions, but it is clear that there are some differences of view and not unnaturally they vary largely according to whether one is or is not directly engaged in the export business.
§ To revert to the major matter of procedure, I should perhaps have pointed out, as we do in our report, that whether or not one is directly engaged in the export business the construction industry is a major component of our industrial scene, with some 14,000 firms employing nearly half a million people and with a turnover of over £6,500 million a year. So it is an area where what happens in the EEC context is of some considerable consequence.
§ I do not wish to go into too much detail on the procedural proposals that are before us because I think they are set out with great lucidity in the 16th Report which we are considering and I should be most interested to hear the views of other Members of your Lordships' House on the matters which are worrying us. I should perhaps make clear that in the procedure which is now proposed the aim might be total harmonisation which would be obligatory for all the products covered in all the Member States. Or there could be optional harmonisation; this would 21 mean that the Member States could not object to the import of products from other Member States which comply with the implementing Directives, but they could nevertheless permit the use of other products or plant which did not comply with the European standards but which were permitted under the national standards. If the proposal for the construction industries were for total harmonisation, then frankly I think we should be in serious difficulty, but fortunately the attitude of the Commission, so far at least, is that total harmonisation should normally be reserved for matters where either health or safety are at risk and that for industrial products of a more general nature the optional rule should prevail.
§ What we are really most concerned about is that we are apprehensive that rules may be accepted without adequate publicity and with no right of appeal. That is really the gravamen of the situation so far as we can understand it. It is true that in the amendments issued last month to the proposals before us it is suggested that the implementing committee should issue an annual report of what it has done, but of course that is ex post facto and is not going to help very much, apart from just having it on the record. It was also suggested that the committee should indicate the areas in which it is likely to proceed with harmonisation during the next two years, but there is no indication—still less any guarantee—that this will be more than a general indication of an area or a group of products in which it will be operating. That is a very different thing from publishing and having completely open to view to all concerned the precise proposals which are intended. If you are in the trade or business what you need are not general indications but the precise details of what it is you are going to be obliged to comply with. We feel that this is the very least one should insist upon if any matter is to be considered by this implementing committee, which is either able to make this decision itself on a qualified majority vote or is able, if it prefers, to send it up to the Council of Ministers and, if the Council of Ministers does nothing about it for a period of three months, the proposal becomes operative notwithstanding.
§ So we feel that absolutely maximum publicity is essential. We do not think it 22 is sufficient to say that there will be consultation with experts or with interested parties, because there is no guarantee as to who is going to be consulted. If it is carried on behind closed doors we think it will be a grossly unsatisfactory way of conducting the matter and we believe in any case that, at least until we have had greater experience of this type of procedure, even if the matter is delegated to an implementing committee—which would indeed save a great deal of time at the ministerial level—we should adopt the unanimity rule and not the qualified majority rule, if only until we see how this kind of operation works and how satisfactory it is. So we make this point plain in our report, that if there were a total harmonisation—which we are not dealing with in this particular report—it should go to the Council under Article 100 as it does now. If it is optional we can see the point of having a committee of implementation, but it should publish its precise proposals at the outset and it should adopt the unanimity rule. We suggest that there should be a review of the procedure, we say possibly after five years, to see how we are getting on. It might then be that we would have such confidence in the way things were being conducted in Brussels that we could agree to a qualified majority rule, but at the present time we think that that is premature.
§ My Lords, I hope I have indicated the reasons why we have apprehensions about this particular procedure. We see the possible advantages in certain areas. I would not myself wish to go into the second document this afternoon, which gives the proposed list of priority products to be dealt with, beyond saying that again there are strong differences of view as to whether or not those particular products are the right ones to start with; but I would regard that as being too technical to be appropriate for discussion. I hope that your Lordships will agree, from what I have very briefly indicated to be the main problems in this area, that the committee was justified in bringing it to your attention. I beg to move.
§ Moved, That this House takes note of the Sixteenth Report of the European Communities Committee on the approximation of laws relating to construction products. (R/3289/78) (H.L. 64.)—(Baroness White.)23
§ 3.32 p.m.
§ Lord HINTON of BANKSIDE
My Lords, as the noble Baroness, Lady White, has indicated, there was some debate in your sub-committee as to whether the procedure which is proposed in this Directive was entirely appropriate. I do not propose to deal with that question, but rather to leave it to those Members of this House who are better qualified to talk about it than I am. My intention is to confine myself to the purely practical problems of standardisation. It so happens that I have been more than normally exposed to those problems during my career.
Although the British Standards Institution was formed in the late 1920s, the first real attempt at firm standardisation was made by Imperial Chemical Industries in the early years of the 1930s. At that time I was chief engineer of their alkali division and I was given the additional task of doing standardisation for the whole of ICI. That work was done by a committee which was made up of representatives from all of their divisions. It was a herculean job. It took several years, and it was not merely outstandingly successful but also was taken as a model by many other firms who wished to have true standardisation in their organisation.
At the outbreak of war I was seconded to the Ministry of Supply and there I was in charge of the Royal Filling Factories and carried through a standardisation scheme for all the small tools and the many thousands of fillers' components that are used in the final assembly of explosives stores. After that I moved to atomic energy where I standardised all of the general stores and engineering materials for their industrial establishments. From there I moved on to the Central Electricity Generating Board where I did a similar job. So I have seen something of standardisation in my time.
It is, I think, almost axiomatic that if you have one supplier and one purchaser standardisation is easy. If you have two suppliers and two purchasers, it becomes quite extraordinarily more difficult, and the difficulty of standardisation increases pretty well exponentially as the number of suppliers and number of purchasers increases. But not only does the difficulty of standardisation increase with the increase of numbers of suppliers and 24 purchasers who are concerned, the quality of the standards specifications also tends to fall. There is a very good and simple reason for that. All standardisation is a compromise between the views of a number of manufacturers and a number of buyers, and the more manufacturers and the more buyers you have concerned the more compromises you have to make and the more flabby your standard specification becomes.
Your sub-committee was told in evidence that there are in the United Kingdom some 14,000 firms producing materials for the building trades, and the number of purchasers for those trades must be even greater. The difficulty of standardising with such a large number of manufacturers and such a large number of purchasers is, I think, obvious. It is true that there is some rudimentary standardisation in the building regulations, although it is interesting to note that they are not standardised for the whole country in that the London building regulations are different from those in the Provinces. But that standardisation under building regulations aims only to ensure the stability, the safety, the sanitation and the fireproofness of the building and does not attempt to go further than that. If I can give a simple example of how far it falls short of true standardisation; my own house, which was built within the last 20 years under LCC building regulations, has got, I can easily count, six different doors in it and not merely do those doors differ in method of construction but they differ also in outside dimensions.
Your committee was told that the British Standards Institution have got a staff of 23 working on standardisation of construction materials, and in addition to that technical staff of 23 there is a supporting staff of about 40. But what matters most is that that staff merely supports and services the committees which do the actual standardisation, and the number of members of those committees which are considering standardisation within the construction industries is something between 2,000 and 3,000 men. If a working force of 2,000 to 3,000 people fails to do full standardisation of building construction materials for a small country like ours, the imagination almost boggles when one tries to think of the size of the organisation which would 25 be needed to do similar standardisation for all the nine countries of the EEC. There are, it is true, national standardisation organisations in most if not in all of the Member countries of the EEC, and the work of those national standardisation organisations is co-ordinated by a body which is known as the Comité Européen de Normalisation, CEN for short. Standardisation over a still greater number of countries is carried out by the International Standards Organisation (ISO). In addition there is, as the noble Baroness mentioned, a body called Agrément, but its decisions have far less force and are far less useful than the decisions of the two standardising organisations.
I am told that the standards which are produced by both CEN and ISO are less precise than those produced by the British Standards Institution. That is naturally the case because they have more bodies with whom they have to reach compromises and therefore decisions become more difficult to reach and more flabby when they are reached. Both CEN and ISO are producing results less quickly than is desired by the EEC and it is for that reason that the proposals contained in the Directive are put forward. I think that none of us would dispute the desirability of obtaining normalisation between the components concerned as quickly as possible.
On first reading, the Directive appeared to imply that the EEC desired to set up its own co-ordinating organisation, thus duplicating the work which is being done by CEN and ISO. If such a new organisation was initially in the minds of the Commission, I understand that that is no longer its intention and that its present proposal is to expedite the production of international standards by encouraging and helping collaboration with CEN and ISO, rather than by setting, up its own new organisation. I understand that fruitful discussions between the EEC, CEN and ISO are going on and I suggest that they should be allowed to take their course, with some encouragement. But in no case would I feel that it was wise for the EEC to build up a staff of its own to expedite the standardisation of construction materials and components for the whole Community.