§ 4.45 p.m.
§ Lord Dormand of Easington rose to ask Her Majesty's Government whether they are satisfied that the powers and resources available to the British Standards Institution are sufficient to maintain the rising standards required in a modern society.
§ The noble Lord said: My Lords, I ask this Question this evening for a number of reasons. The basic reason—I hardly need say it—is that standards are needed by everyone including consumers, industry and government. That reason is more important now than it was 20, 10 or even five years ago because we now live in a consumer society. It is a society in which television, radio and newspapers are constantly bringing complaints, suggestions and problems to the notice of the public; and in so doing, they involve government, local authorities, manufacturers and the service industries.
§ If one asks colleagues in another place about their postbags, they will tell you that they are 10 times heavier than they were a decade ago. I have personal experience of that. People who write to their MPs on such matters nowadays would not have dreamt of doing so not very long ago. It is significant that your Lordships are now sometimes the recipients of such letters. At one time that was unheard of. Therefore, an independent organisation is needed now more than ever. This country is fortunate in having the British Standards Institution. That is an expert body with more than 30 years' experience in seeking constantly to raise standards.
§ The BSI is not just concerned with Britain in the narrow sense. It is this country's voice in European and indeed world standardisation. It puts the point of view of industry and consumers and brings back information on changes that will affect them. When I say "them", I mean the country as a whole. Quality means good design, efficiency, cost-effectiveness—that will be a matter of particular interest to this Government—and reliability. More and more, consumers demand those benefits of the products and services which they buy. Manufacturers particularly need them if they are to succeed in fiercely competitive world markets.
§ Some people say, "Yes, we know all that. There is no need to preach about it". They say that competition will take care of it. Nothing could be further from the truth. In today's economies, both here and abroad, low standards are seen in shoddy and even dangerous products. Some are deliberate, brought about largely by the need to maximise profits. But others derive from innocent ignorance; ignorance of the fact that a body such as the BSI can be of immense help.521
I have mentioned the products on two occasions, so perhaps at this point I should emphasise that service industries should equally be subject to standards. As one who has a particular interest in education, I was delighted to know that a primary school achieved registration early this year, the first one to do so. The report stated:
BS 5750 procedures have sorted out administrative and planning headaches, which has resulted in teachers' time being free to get on with the main business of the school, teaching their pupils.
I shall bear that in mind when I speak on education in the future.
§ At all times in considering the BSI, some fundamental questions need to be asked. Are the standards which the institution sets high enough to meet the ever-growing demands of a constantly changing society; and, closely related to that question, are the resources available to it sufficient to enable it to achieve its objectives?
§ Let us look at some of the basic facts. From my knowledge of the BSI, it can be said that there is the total commitment of its staff allied to a high degree of expertise. They are supported by more than 26,000 committee members working in a voluntary capacity. The involvement of them all is fundamental to the work of the BSI; and its achievements, as I am sure your Lordships will know, speak for themselves. They are the human resources and one could have said much more about them had time permitted.
§ But, what about financial resources—an issue of obviously critical importance? The BSI is an independent, non-profit distributing organisation; and any surplus generated has, under its charter, to be reinvested to advance the objectives of that charter. It has three main sources of revenue: first, receipts from sales; secondly, membership subscriptions; and, the remainder from government funding.
§ Perhaps I should mention that all of the national standards bodies in the European Community and EFTA countries receive funding from their governments. In Germany the figure is 14 per cent., and in France it is 27 per cent. In its last allocation, the BSI received 15 per cent. Perhaps I should also mention that the main income source for all standards bodies in Germany, France and the UK is from sales of standards. No less than 25 per cent. of BSI's income comes from its subscription scheme, a figure very much higher than those of Germany and France. I am sure that the Minister will realise that that is largely due to the self-help efforts of BSI and very much to its credit.
§ When the White Paper called Standards, Quality and International Competitiveness was published in 1982, the Government matched pound for pound what BSI received from its subscribing members; but the situation has now changed. Over the past five years it has fallen from 28 per cent. of the total standards budget to 15 per cent. I have to say that I am puzzled by such a dramatic reduction. I do not believe that the Government are losing their interest in standards or that they are any less committed to them; indeed, they are represented on no less than 60 per cent. of the BSI committees.522
§ Similarly, it cannot be argued that BSI needs less money; in fact, the opposite is the case as it requires more money. I shall give your Lordships an example of the difficulties that can arise. Producing publications on standards is an expensive operation which is sometimes met by sales. However, there are standards which are no less vital but which sell only a few copies to a limited customer base. It will be readily appreciated that they make up the majority of all standards published. However, they are no less costly to prepare. Therefore, if BSI standards were to be run on a purely commercial basis, such projects would be seriously affected. It would mean that the institution would not be able to fulfil its major role of benefiting the public interest.
It cannot be said that BSI is a "begging bowl" organisation. I believe that its record demonstrates that fact. I welcome the recent statement by the institution's energetic and dedicated chairman, Vivian Thomas. He said:
Given the lower sales income resulting from the growing proportion of European and internationally derived standards, we intend to minimise operational cost and maximise efficiency in order to maintain our position and advance our global reputation as the preferred supplier for all of our services.
I suspect that there are words in that quotation which, again, particularly appeal to the philosophy and practice of the Government.
§ I am sure that BSI will demonstrate that the aforementioned are not idle words, especially when one looks at the record over the past two years or so. The time to edit and publish standards has been greatly reduced. At the same time, actual output was increased by some 80 per cent., so that it is now running at 1,200 publications a year. That is a quite remarkable achievement.
§ BSI does not itself write or create standards. I mentioned earlier that 26,000 representatives are involved. They are on 3,000 BSI committees and come from manufacturers, user and consumer groups, central and local government, professional bodies, trade unions and other interested parties. I mention those details because all of them arise from voluntary work. The Government and the nation benefit from a wonderful bargain. It would be entirely proper and necessary for the Government to bear that in mind when grant is being considered. However, I believe that the overall picture gives some cause for concern. I hope that the Government will look very carefully at the financial position with a view to increasing the grant-in-aid.
§ The 1982 White Paper remains the basis of the relationship of the Government with the BSI; but the role and effectiveness of the BSI has been reviewed by Parliament on a number of occasions since the publication of that White Paper—after all, the latter is now 13 years old. I shall mention three of those examinations. In 1984, your Lordships' Select Committee on Overseas Trade inquired into the causes and implications of the deficit in the UK's balance of trade in manufactures. The committee said it was clear that there was a considerable increase in international standardisation activity and that increased government funding was necessary if the Government's policy of maintaining and strengthening international standardisation was to be met.523
§ Somewhat later, in 1990, the National Audit Office published a report entitled, Department of Trade and Industry: Promotion of Quality and Standards. When that report was examined by the Committee of Public Accounts, members of the committee raised what they saw to be a failure to increase in real terms the financial support available to BSI standards through the DTI grant-in-aid.
§ As recently as May 1993, the House of Commons Select Committee on Trade with Europe (in its second report) examined the position and made two recommendation relating, first, to the slow production of European standards and the consequential backlog of work; and, secondly, to the need for increased participation in European standards work, which it stated is the key to achieve standards acceptable to the UK. On both matters the Select Committee said that financial support was required.
§ The Government are fully aware of the reports to which I have briefly referred (and of other instances relating to grant-in-aid) but they do not appear to have acted upon any of the comments or recommendations made. I hope that the Minister will—indeed, I am sure that he will—refer to such matters, including grant-in-aid, in his reply.
§ Perhaps I should make it clear at this point that I have no personal connection in any way with BSI. My Question today, and all the remarks that I have made, arise from a conviction that the successful working of such an organisation is of the utmost importance to the country. I am simply an innocent bystander—that is, a simple but enthusiastic bystander—who wishes to see its high standards maintained and improved in fulfilling its objectives. Let us just imagine the position if there was no BSI—indeed, it really does not bear thinking about.
§ I hope that BSI will be able to continue its splendid work. If there appears to be a little hesitation in that remark—and there is—it is because of the ever-increasing range and workload of the organisation. I have in mind, for example, the implications of the single European market, the special problems of small businesses and the sheer size of the operation. That is perhaps best illustrated by the fact that there are now more than 3,500 firms registered which range from small businesses to multinational companies. I think, too, of the vast changes which have taken place since the publication of the White Paper in 1982. Perhaps it is time for another White Paper. In this connection, I feel that the DTI's consultation paper of June 1993 is timely and is to be welcomed. I hope the Minister will agree that the BSI's response of 24th September—I am sure he has read that—could not be more comprehensive and relevant.
§ One of the main requirements of government is to ensure that standards are prepared in the national interest. That national interest has three aspects: in relation to domestic policies; in support of UK firms' competitiveness in European and international markets, and last but by no means least, in the safeguarding of UK users and consumers. In asking this Question today, I believe that the BSI's objectives are largely being met; but it appears to me that the European and world 524 situation in such matters may be changing. In such circumstances, it seems that a reappraisal of the Government's role is not only necessary but of some urgency. I hope that view will be reflected in the Minister's reply today.
§ 5.1 p.m.
§ Lord Lucas of Chilworth
My Lords, the noble Lord, Lord Dormand of Easington, has chosen a particularly unique time at which to table this Question. He does so, of course, against the background of the Department of Trade and Industry's consultation paper to which he has just referred, and against the background of what I can only call some internal differences of opinion about the operation of the British Standards Institution. I wish to touch on both those points this evening.
I do not quarrel with the noble Lord, Lord Dormand, as regards his general survey of the work being done by the BSI. I, like him, pay tribute to the 22,000 to 25,000 volunteers who create, make and write the standards for no financial reward whatsoever. It is against this background that one should look at the finances of the BSI. I shall come to that in just a moment. The noble Lord also mentioned the matter of the BSI's standing both in European and in international affairs. He mentioned the French (AFNOR) and the German (DIN) standards institutions. He will agree with me that they have been created more to favour national industries than to subscribe to a heightening of general standards, particularly in engineering terms. I do not believe the noble Lord would disagree that our own standards, particularly those accepted by industry, are in the main considerably higher than those obtaining on the main Continent of Europe.
It is important that our BSI should maintain those standards. There is a problem here, in that it has a dual role. The dual role is that provided under the Royal Charter; namely, that of being the body which shall, with government funding—the grant in aid—set standards, issue and sell them. The institution has in more recent years taken another route of providing financing—although it claims that the two are kept separate—which is that of commercial activities in selling what I would have called service quality assurances.
When I was in the Department of Trade and Industry in the mid-eighties, my honourable friend Mr. John Butcher was the Minister responsible for quality in manufacturing industry and I suggest that he did a good job at that time. The department not only provides grant in aid to the BSI but also subscribes actively to the raising of standards whether in manufacturing or service industry and I do not criticise the Government for their endeavours in the area of standards and the raising of them.
The Department of Trade and Industry, on behalf of the taxpayer, subscribes about £4 million to the BSI and the institution's commercial activities contribute perhaps another £4.5 to £4.7 million. I can see no difficulty in the paymaster having a good searching look to see whether the DTI's money is being well spent and whether the department should, or indeed needs to, 525 make further contribution. I suggest that it might need to in terms of our international responsibilities on standards setting boards. I would like to see that element of the activity of the BSI kept quite separate from its run-of-the-mill commercial activity. The present position has led to the current problems—I put it no higher than that—that now rage through the higher echelons of the BSI. I absolve my noble friend Lord Keith of Castleacre, the president of the BSI, from those ragings because of course they are not the responsibility of the president but of others.
I find it extraordinarily sad that these differences should have led the chief executive to resign and that many of the members who provide the real funding should have been prevailed upon as regards expressing the view that the commercial activities should be run not as a plc organisation but more as a standard setting institution. Until that position is resolved, I would find it difficult, were I in the position of my noble friend the Minister, to give a firm decision on what stance the department should take. I hope he will resist the temptation tonight to provide a complete answer.
If the BSI is to be an institution reflecting governmental domestic policies, and indeed international policies, it should have a say in the way the organisation is run. If the BSI is to be the Government's chosen tool for setting international standards, it should take a more positive role than hitherto. If, however, the institution is to be run purely on commercial lines, subject to the vagaries of the market, the sale of its products and other such matters, then the Government need not provide it with taxpayers' money.
I refer to one example in this connection. It is the example I know best. BS 5750 is a standard of quality assurance. In the retail motor industry it was hailed as the great new standard that would improve everyone's competitiveness and profitability and would deliver better goods to the consumer. In rushed a number of organisations, not least the BSI, to teach everyone how this was to be achieved. It was suggested that costs of anything between £2,000 to £4,000 and £10,000 to £15,000 should be charged for the accreditation system for BS 5750. At the end of the day it is a self-assessment exercise. There are forms to fill in. You fill in your answers and monitor yourself against the answers that you put down. It is now not seen to be the real answer to enhancing standards within the industry.
I therefore wonder whether some of the commercial activities of BSI are in the public interest, in the taxpayers' interest or in its own interest in deriving funds to expand its own operation. There has to be a division of responsibility as regards its different activities. A Chinese wall will not do.
I hope that my noble friend the Minister will give due consideration to those thoughts which I have put before your Lordships this evening.
§ 5.10 p.m.
§ Baroness Dean of Thornton-le-Fylde
My Lords, I come to this debate with experience in an industry which many years ago was criticised for not having any standards, for poor quality and poor delivery. The 526 situation has changed considerably, thank goodness. I remember clearly the encouragement I derived when I visited factories or mills which had achieved BS 5750.
I can tell the noble Lord, Lord Lucas, that those factories and mills did not see BS 5750 as a simple matter of assessing themselves against a check-list in order to achieve BS 5750. It was a painful process, usually taking anything up to a year, involving a great many internal resources within the company and also the introduction of strong disciplines which probably had not previously existed. When a company gained BS 5750 that gave a feeling of achievement, not merely among the management but also among the whole workforce, because one cannot achieve accreditation unless the whole of the company has played its part. Whether it is the waste at the end of the process—as we have just heard—or simply sending goods to the customer, the standards apply right the way through from production to the administrative process.
In 1982, when the Government brought forward their initiative which was the beginning of BS 5750, no one expected that it would be the runaway success that it has proved to be. There is no doubt that it has been a success. Some 22,000 organisations now have accreditation. Woe betide any individual organisation if within one year its standards, processes and methods slip to the point at which it loses its accreditation. That will have a profound effect upon that company's ability to keep its customers.
I suggest from my own experience that BS 5750 has been a success. I do not believe that that view is challenged. In marketing terms one could say that BS 5750 is the brand leader in this field.
My noble friend Lord Dormand mentioned that in 1982 the Government matched BSI funding pound for pound. That figure has now dropped to about 15 per cent. Approximately 81 per cent. of BSI's standards turnover is provided by sales and membership subscriptions. Because of BSI's role in the development of BS 5750 and because of the general impression that it is the brand leader, the lay person could be forgiven for thinking that BSI has a monopoly. It does not. There are competitors in the field. One of the strongest is a company called Lloyds, which has a long and honourable record in the certification of standards. There is also a relative newcomer. As a curtain-raiser we can see what may happen if we change our present structures fundamentally when we consider that relative newcomer, which is SGS Yardley. I wondered what SGS stood for. It was a small British company which was bought out by Société Général de Surveillance, which is a Swiss-owned company. Therefore there is competition in the field and there is an external influence within our own market. The fact that BSI is an international organisation is not unique in this field.
I suggest that BSI is a success story. It does not shout that loudly enough. Perhaps that is one of the reasons for some of its present problems. Yet no one would disagree that it has problems today. Like any business it needs to review where it is, to change its structures and to listen to what its members have to say. However, that is an insufficient argument for throwing the baby out with the bathwater. Yes, it has to be more outward looking and 527 market oriented. It probably needs better business management, although I have no personal knowledge of that aspect.
Some 84 per cent. of BSI's work is undertaken overseas. I can recall business people—usually businessmen, because business in Britain is run mainly by men at the moment—continually saying to me that when they went to a committee a particular country, usually Germany, was trying to set the standards. Part of the success of BS 5750 is that it does not relate solely to UK standards; it was adopted largely unchanged as the European standard (EN 29000) and the international standard (ISO 9000). There we have a British success. It is an achievement which has been regarded by industry as a major step forward.
Turning now from those global markets and standards, we must not forget our own back garden. Small businesses have been complaining that BS 5750 does not relate to them. Some argue that large companies adopting the standard and being accredited are saying to them as small suppliers that they too must comply and if they do not they cannot tender for their work. That is an issue which BSI itself has taken on board. It needs to do so. However, I suggest that we should not always worship at the shrine of small business. We have many large and medium-sized businesses in Britain which are very successful and which themselves have a right to succeed and to be listened to. Therefore, I hope that when the BSI board considers the justified criticisms of small companies it does not go overboard and move from one extreme to the other but bears in mind the relative success of BS 5750.
In addition, we have to be careful in any review. In any organisation everything comes at once. We see that when governments have difficulties; they do not come in ones but several at a time. BSI is subject to the DTI review. It is right that that should take place. It also has its own internal review. I hope that the good and progressive aspects, together with the deficiencies which the organisation itself has recognised, are allowed to be dealt with internally using its own procedures. I hope that the organisation's commercial success will not be held against it. I hope that it will not be told that it can no longer do this, and that it will not be penalised for its commercial success as an organisation.
I hope that the Minister will be able to respond to some of those points. No one would say that we live in a perfect world, and BSI is certainly not perfect. But it is the best we have and, as an earlier speaker asked, if we did not have it, what would we do? We have an organisation of long-standing, with good standards which are recognised internationally. I hope that what is recognised internationally as good quality will not be denigrated and changed in such a way here in Britain that the organisation itself becomes merely a skeleton and cannot function in the constructive way that it has so far.
§ 5.20 p.m.
§ Lord Carmichael of Kelvingrove
My Lords, I speak on behalf of my noble friend Lord Graham of Edmonton, who is unable to be present. I have learned 528 a great deal from this important debate. We hope that the Minister will clear up a number of points. Perhaps it will be possible to have a further debate at a later date after having listened to the information that we shall receive from the Minister.
As my noble friend Lord Dormand of Easington pointed out, in a world of multinational companies, with goods arriving from many countries, protection of the public cannot be achieved cheaply. Noble Lords who have spoken have an expert knowledge of the British Standards Institution. I used to be more familiar with that body; in the engineering industry its standards were considered the absolute bible. The noble Lord, Lord Lucas of Chilworth, has far more up-to-date knowledge on the subject than I have.
What is the standing of the BSI in Europe today? Does it have the same standing as before, or has there been a reduction in standing because of engineering and other advances made in other countries? Does the old British standard still have a high recognition of quality?
The noble Lord, Lord Lucas, made an interesting point when he said that there is a decision to he made on this question which bedevils much of modern business. Is the BSI a standards institution or should it operate as a plc? That is one of the issues that we should discuss with great care.
I have received information from the Consumers' Association. It has serious concerns about the function of BS 5750. That body accepts that product standards should be a positive guide to safety and specific performance rather than "quality", which is a subjective term. Introducing subjective criteria to standards is potentially damaging. In the role of the Consumers' Association as a testing organisation, it is difficult to identify the practical contribution of BS 5750 to product quality because the standard relates only to the quality of the systems employed by a company. That is not necessarily an indication of the quality of the product. There may be a system, but what are the checks which follow from that? Such a judgment is further hampered by there being no requirement for certification bodies to be registered with the National Accreditation Council for Certification Bodies nor any apparent uniformity among certification bodies as to the interpretation of certain aspects of the certification process. For example, there would appear to be no agreement on what proportion of a company has to pass the assessment before it can advertise itself as a BS 5750 company. That issue will need clarification from the Minister. I am not being critical of the Minister; I am seeking information.
There is also worry about the use by some companies of the certification in their advertising materials. Some imply that the standard is a mark of product safety or performance. That is not helped by the confusion created by the use of "BS" in the standard—for many years it has been associated with safety and performance of products—and the use of a symbol similar to the Kitemark to denote a "BSI registered firm", meaning that it is certified to the BS 5750 standard by BSI.
Other points may appear to noble Lords to be a little distant from the debate. I refer to the question of financing consumer associations and the BSI. How do 529 British standards equate with those in Europe? Are we being over-protective? The journal of the Consumers' Association of December 1993 raises the question of seat-belts on vehicles, an issue which is tragically current. Is there a European standard? I understand that the European Community has been slow to act as a result of disagreement among member states. Yet last year 16 passengers were killed in the UK alone in bus and coach accidents. Ten days ago there was the tragedy involving a school coach in which no seat belts were fitted. These points may seem small until a tragedy occurs. They then become front page news in our national newspapers and perhaps become over-sensationalised.
The subject of children's high chairs has been raised. The British standard is quite different from the European standard. Babies and young children are particularly vulnerable to accidents. It is especially important that they are adequately protected. Yet the new European proposals on high-chair safety will mean that they are left in greater danger because some of the UK's stringent rules will be replaced by much weaker safeguards.
Under the current draft European regulations for many types of gardening tools, in particular power tools, some European standards are higher than ours. However, I understand that others are much below the standards that we hope to attain. An important standard relates to garden hedge shears, where the stopping time for blades after the power is cut is far too long; they could still inflict damage.
We should consider such issues with considerable care. We recognise that such standards cost the Government and/or industry money. When one considers the end product, with the security that such standards can give when items are made to the standards of the British Standards Institution, the amounts are not so large that we should be unwilling to pay them.
I hope that the Government will clear up some of the points made by noble Lords who are far better versed in the subject than I am. Listening to the debate, I have become interested in some of the points raised. I hope that the subject will raise interest outside this House.
§ 5.29 p.m.
§ Viscount Goschen
My Lords, I first thank the noble Lord, Lord Dormand of Easington, for giving us the opportunity of discussing this important subject today.
The British Standards Institution—commonly known as BSI —is an independent and unique body and it is not part of Government. Its prime purpose is to facilitate the preparation of standards and there are now more than 12,000 British Standards. It is a non-profit distributing organisation, formed by subscribing members and committee members, and was incorporporated by Royal Charter in 1929. There are more than 29,000 subscribing members of BSI, and over 26,000 individuals contribute to the work of over 3,000 committees, of which about 1,000 may be active at any one time. It provides the gateway for United Kingdom representation in European and international standards organisations, and I believe it is important to address 530 those points raised by the noble Lord, Lord Carmichael, that the BSI is the United Kingdom's main representation on the determination of European and international standards.
BSI has the role of facilitating the preparation of standards. As the noble Lord, Lord Dormand, stressed, to enable it to perform that role it has to rely on the considerable and sustained effort of the vast number of volunteers from industry and elsewhere who give their time and the resources of their companies and trade associations to serving on committees both in this country and overseas. We are well-served in this country, and I should like to take this opportunity to pay tribute to the army of volunteers who play such a vital role in ensuring that suitable and appropriate standards are produced.
Standards are in essence simply technical descriptions of what things are, how to do things or how to make things. Standards are developed by their prospective users and others with an interest on a voluntary part-time basis. The preparation of appropriate standards is therefore very much a partnership between BSI on the one hand and industry and other interested bodies on the other.
The noble Baroness, Lady Dean of Thornton-le-Fylde, and the noble Lord, Lord Carmichael, both raised the point that one standard which has attracted particular comment recently is the standard for quality management systems, BS 5750, which was drawn up by industry and published as a British standard by BSI in 1979. When used in appropriate circumstances and for the correct reasons, BS 5750 is a useful and progressive step towards quality. Indeed, it was a world first for the United Kingdom and it has become a successful international standard. Certification of United Kingdom firms has had a beneficial impact on the overall quality process.
Indeed, feedback from businesses of all sizes that have adopted BS 5750 indicates that the cost-benefits of improved internal efficiency and of not having continually to meet differing quality requirements generally more than compensates for the initial costs.
The Government are aware, however, of anxieties about the accessibility of the standard and the need for care in implementation, as has been raised by your Lordships this evening, particularly in the case of smaller businesses. The Government, BSI and the certification bodies themselves are treating those worries seriously. BSI has set up a policy committee for small businesses whose first priority task has been to consider those matters and to recommend ways in which the benefits of BS 5750 can be made as accessible and attainable as possible to all organisations, irrespective of size.
In addition, the National Accreditation Council for Certification Bodies, in conjunction with the Association of British Certification Bodies, has set up a working party to consider problems identified by small firms. The two groups have been working closely together and the Government will look closely at the recommendations of both committees, when they are available, to determine whether action is required on our part.
531 Since 1982, BSI's relationship with the Government has been governed by a memorandum of understanding, drawn up following the White Paper: Standards, Quality and International Competitiveness. BSI is recognised as the national standards body and for some years now the Government have supported its standards writing operations with a grant-in-aid. However, the main direct funding for BSI's standards activities comes from the subscriptions paid by its members and the sales of standards and other information services provided by the organisation.
My noble friend Lord Lucas of Chilworth raised the point that BSI also has separate divisions for testing and certification activities which operate in a commercial environment. Those activities receive no government funding and are not subsidised in any way by BSI's standards-writing activities. Although the Government are not responsible for the corporate structure of BSI as a Royal Charter body, we take note of the anxieties expressed on the issue.
The Government recognise the importance of the work of standards writing and its contribution to the maintenance and improvement of competitiveness. It is for that reason that we are providing substantial funds towards the preparation of standards. For 1993–94 the Government are contributing a grant-in-aid of £4.5 million to the income of BSI standards, and a further £2.8 million in support for standards-making purposes.
As raised by many noble Lords in the debate this evening, the grant-in-aid has declined as a proportion of total income to about 15 per cent., as sales income and subscriptions have grown. The Government are only one contributor among many to BSI and there may be more effective ways of channelling public funds into the overall process of preparing standards. As I mentioned, the Government have decided as part of their review to look at the arrangements for funding. To address the point raised by the noble Baroness, Lady Dean, I should add that the income which BSI received from its quality assurance businesses has grown significantly. But in deciding upon the future arrangements for government funding, we shall be taking careful note of the view that it would be inappropriate to use this as a support for the standards-making activities.
As I have mentioned, industry is the largest contributor to the preparation of standards, both directly to the income of BSI through subscriptions and purchases of standards and related services, and through the very important provision of committee members. That is only right, as industry is the prime beneficiary of standards. The contribution of industry cannot be underestimated and we are happy to acknowledge that.
As has been stated, much has changed since the Government's memorandum of understanding with BSI in 1982. First, the standards published by BSI are now predominantly European and international; secondly, BSI's income from its quality assurance and testing businesses is now substantial. In 1982, BSI's work predominantly related to national standards work; by 1987 this had fallen to just below 50 per cent.; but today it is down to about 15 per cent. That trend is expected 532 to continue. Thus, about 85 per cent. of the work of BSI is directed in support of European and other international standards work.
To address further points raised by the noble Lord, Lord Carmichael, on his anxiety about British standards being overtaken by European and international standards, it is worth adding that the UK participates in the European standards-writing committees, as well as the EC Council decisions and has every opportunity to ensure that the standards are not disadvantageous to industrial interests, particularly within the UK.
It is widely recognised that differing national standards can impede the free movement of goods between member states. The development of common European standards has consequently become an essential part of the removal of technical barriers to trade. Common standards throughout Europe will help our industry to compete more effectively. They will make it easier to sell products in other European markets and will reduce costs, since. it will be necessary to manufacture to only one agreed standard rather than numerous different national standards.
The changing role of BSI in the world of standards-making made it appropriate that the Government should review the contribution they make to the process and to initiate a wider debate on the value of standards. In June this year, my right honourable friend the President of the Board of Trade announced a consultation exercise on future United Kingdom resourcing of the preparation of standards.
The review sought views on the way in which standards should be prepared in the United Kingdom, Europe and internationally; the type of standards needed to enhance competitiveness; the link between quality systems standards, product standards and quality; and the need for government funding and the form that such funding should take.
We invited comments from a wide range of industry and other interested parties. As a result, the Government have received over 400 responses to the consultation from a wide range of companies—from blue chip companies to small and medium-sized ones; from trade and professional associations; and from other interested bodies and individuals. The overwhelming message from the responses was one of support for the continued role of BSI as the national standards body. The funding which government provide to BSI was seen by many as important in maintaining BSI's independence, as well as being a necessary recognition of the contribution of standards to the wider public interest. Those views will of course be taken into account when we consider whether, how and to what extent the Government should make a financial contribution in the future.
While supporting BSI's continued role, industry responses in particular have provided some useful insights into areas where BSI can further improve its service to its members. Industry has commented that economic pressures clearly require a sharper focus on the management of programmes and on decisions about priorities and resource planning by BSI and by the European and international standards organisations. That also suggests a need to target Financial support—especially perhaps towards standards required 533 for the single market—and a possible need for more direct support to industrial participants in overseas committees. Indeed, it is only right to acknowledge that BSI constantly keeps under review the scope to enhance its efficiency. Furthermore, it is already taking steps to improve its efficiency and its service to its members. It is undertaking a major reorganisation of its internal management, as described by my noble friend Lord Lucas, with the prime aim of ensuring that it can provide an efficient and effective service to represent the needs of the United Kingdom in negotiations towards European and other international standards. As part of that reorganisation it is also streamlining the higher level committee structure better to enable it to deliver the kind of programme management which industry and others expect.
We are aware that some concern has been expressed about the effect of these changes and whether they indicate an organisation which, rather than consulting its members, is becoming more centralised. However, that is not BSI's intention and the new committee structure is intended to facilitate and improve real and effective input from industry and others to the programme management and priority setting which are so essential. The department naturally supports those aims and sees no reason why BSI's organisational changes should not be a significant step forward.
All organisations need to adapt to changing demands. I should like to take this opportunity to encourage industry and others to work with BSI to ensure that, as the organisation moves into the 21st century, it is well equipped to meet the challenges ahead.
The Government are now considering carefully the results of their consultation and discussions with BSI. One area for particular attention will be to ensure that there is as much input as possible from industry when decisions are made on priorities and resources, including the use of any future government funds. We shall of course announce our conclusions as soon as possible.
Finally, may I say that BSI is a national asset of which we can rightly be proud. It is already recognised 534 as a world leader among national standards-making bodies, and many other countries around the world consult it for its expertise. To maintain that position it must constantly be ready to adapt and develop. By managing change well it can enjoy continuing success and contribute significant benefits to the wealth of the nation. It is a key component in the United Kingdom's competitiveness.
Like many organisations and businesses, BSI has had to look long and hard at its activities and how best it can deliver the needs of its members and the country as a whole. We are confident that it is rising to the challenge of providing an efficient and cost-effective service which can best meet the needs of industry and others. With the continued assistance and good will of industry in particular it will continue to have the resources to carry out its important role of ensuring that the appropriate standards which are required in today's world are available.
§ Lord Dormand of Easington
My Lords, before the noble Viscount sits down, will he be kind enough to try to give some more accurate information on the Government's statement on the result of the consultations? He very properly placed importance, as I did, on that consultation, and we are grateful for the information that he has given. But he said that he would give us the information on the Government's decision "as soon as possible". Can he tell us whether that is likely to be in one month, two months or six months, and also in what form the Government's decision and findings will be made known to the House?
§ Viscount Goschen
My Lords, I thank the noble Lord for his comments, but I cannot go any further to satisfy him than to say that we shall announce our conclusions as soon as possible. I do not believe that I can be any more specific either about the form that the publication of those conclusions will take or about the timing.
§ House adjourned at a quarter before six o'clock.