§ Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Clelland.]2.30 pm
§ The Minister for Housing and Planning (Mr. Nick Raynsford)
I am pleased to have the opportunity to initiate this debate on the future of the construction industry. It is entirely appropriate to use the facilities of Westminster Hall for a debate that, I am delighted to see, has attracted a significant number of hon. Members from different parties, which reflects the importance of the industry. It is not appropriate to refer to both sides of the Chamber because there is a lot of overlap, which is thoroughly healthy.
The construction industry is important for a number of reasons, one of which is its scale. It has an annual turnover of £65 billion—some 8 per cent. of gross domestic product—it employs 1.4 million people or 1.7 million if the professionals and consultants are included, and it consists of 160,000 companies. But it is not just size that matters. The construction industry is important because of its vital role as a key delivery mechanism for the improvement of our economic and social infrastructure. The public sector alone accounts for some £25 billion of the industry's turnover, which is 40 per cent. of the total. Railways and other public transport facilities, hospitals, schools, universities, housing and other public services depend on high-quality construction. Similarly, in the private sector, services and industries depend on efficient, reliable, good-value construction for the delivery of plans to improve their services to consumers.
The Government came to power with a commitment to invest in the modernisation of Britain and to improve its economy and social infrastructure. Construction plays a vital role in the delivery of those improvements. British construction companies are world leaders in many respects. They are renowned for innovative engineering, high-quality design and architecture, and they are world leaders in project finance. They are major players in the supply of materials and components, project management and professional consultancy. They earn around £10 billion a year in overseas earnings.
However, the industry also has problems. It has traditionally been fragmented and even the largest United Kingdom contractors are small in comparison with the major continental, American and Japanese companies and, in a globally competitive market, that sometimes matters. Profit margins have traditionally been low and construction companies have seen relatively poor stock market valuations.
The industry is one of the UK's worst polluters. Every year it produces some 70 million tonnes of waste material, with some 13 million tonnes of that being material that is delivered to sites but never used. The 114WH industry does not have a good record on training, despite the sterling efforts of the Construction Industry Training Board. It has one of the worst records of any industry for health and safety with around 4,000 serious accidents and only rarely fewer than 80 deaths a year. The work force is ageing and has a very small proportion of women and representatives of ethnic minorities. Only 3 per cent. of construction professionals and 1 per cent. of craft operatives are women and only 1.7 per cent. come from ethnic minorities, compared with 6 per cent. in the total work force. In the domestic sector, the industry's reputation is tarnished by the often outrageous activities of cowboy builders.
Our task is to help the industry to build on its strengths, to continue the process of improving its standards and at the same time to bear down on the problems and difficulties that hold it back.
Aware of the vital role of construction, and of the need for radical improvements in performance, my right hon. Friend the Deputy Prime Minister asked Sir John Egan to chair a construction task force to review the performance of the industry and to recommend changes to improve its delivery and effectiveness. Sir John and his team reported in July 1998. "Rethinking Construction" is an excellent report, which built on, supported and extended the work and recommendations of Sir Michael Latham's equally important report "Constructing the Team" which was published a few years earlier. We owe a considerable debt of gratitude to both Sir Michael and Sir John for their mould-breaking contributions to improving the culture and performance of the construction industry.
"Rethinking Construction" came to radical conclusions, yet it reflected a substantial consensus emerging among many leading figures in the industry. Its recommendations have won wide acceptance, not in every detail but as a strategy that points the way forward and gives urgency to the process of reform. I shall not delay the proceedings by trying to summarise in detail the report's many recommendations.
The key conclusions were that capital costs and construction time could be reduced by 10 per cent. a year, year on year; performance on predictability in relation to budget, time, defects and accidents could be improved by 20 per cent. a year, year on year; and productivity, turnover and profits could also be increased by 10 per cent. a year, year on year. At first sight, those appear to be bold targets. However, they are only modest advances on the targets that Sir Michael Latham set out in his earlier report. As the task force pointed out, the best clients and suppliers are already close to achieving them.
The task force identified a need for leadership by clients, and especially by Government and the public sector. That leadership would demonstrate what could be achieved and would disseminate those lessons across the industry as a whole. That represented a major challenge for the Government, the public sector and UK plc. It was also a unique opportunity. We have responded to that challenge and grasped the opportunity.
The construction industry is large and varied. It is deeply embedded in the fabric of our economy and society, and I do not pretend that there are any magic 115WH wand solutions. Success will depend on concerted and sustained action across a broad range of issues, which must be pushed forward boldly, pursued persistently and stuck to resolutely. It is less than two years since "Rethinking Construction" was published, but I am pleased to say that there are already signs of substantial progress.
Before I outline what has been achieved, I must stress the importance of the broader context within which the construction industry must operate. As an investment industry, it is especially vulnerable to wide swings in demand. Anyone in construction can tell us that the boom-and-bust approach that characterised the economic management of the previous Government had a disastrous impact on the industry.
The first, and perhaps most important, role for the Government is to manage the economy so as to deliver the steady growth that is vital to a healthy construction industry. Because of prudent macro-economic management, construction is benefiting from an economy that is growing steadily. The prospects for continuing steady low-inflation growth have rarely looked better. That is true for the United Kingdom domestic economy and for export markets on the continent. It is beginning to come true in south-east Asia, where Japan and the other tiger economies are now recovering from the shock of their recent collapse.
Secondly, apart from creating the right macro-economic environment, the Government have also broken away from the pernicious tradition of annuality in Government spending. With three-year spending plans and the move towards resource accounting, not least for local authority housing revenue accounts, we are enabling public sector clients of construction in both local and central Government to plan their spending over a period of years. That will enable them to secure a steadier and more cost-effective programme of construction work, and to build longer-term relationships, which is a fundamental element of the partnering approach that is advocated by Sir Michael Latham and Sir John Egan. From next autumn, local authorities will be required to draw up business plans to help all concerned to plan for the most effective use of resources. The best value reviews, assessments and performance measures will also contribute a powerful incentive to improve whole-life value through construction.
Thirdly, we have provided for sustained programmes of expenditure on the extension and improvement of many public services, notably hospitals, schools, social housing and transport infrastructure. As announced in the Budget, spending on gross capital formation will increase over the next five years from £24.1 billion a year to £41 billion a year.
In those three ways, the Government have played a key role in helping to ensure that the construction industry benefits from a steadier and more predictable work load than for many years. That gives the industry a secure base and the prospects that it needs to make essential major investments in new technology, improved processes and recruiting and training a high calibre work force.
116WH We have also taken a series of measures to promote the radical reforms advocated in "Rethinking Construction". First, 18 months ago, we helped the industry to set up the Movement for Innovation—M4I—board and the housing forum to promote and disseminate innovation in the industry at large and in the housing sector. We invited the leading plants and suppliers to propose demonstration projects that would illustrate innovative approaches, measure their performance and share and help to spread their experience and lessons. I am pleased to report that 235 demonstration projects, worth about £3.5 billion, have been submitted, including 56 housing projects and 179 non-housing projects. That is seven times the level for which Sir John Egan called in his report. It is a great tribute to the construction industry that it has responded with such enthusiasm, and on such a scale, to the challenge laid down in "Rethinking Construction".
Secondly, we established the central and local government task forces to promote radical improvements in the performance of public sector clients. In April last year, my right hon. Friend the Chief Secretary launched the achieving excellence campaign, with challenging targets, action plans and regular measurement and monitoring of performance to raise the performance of Government Departments and agencies. The pioneering building down barriers project, which is run by the Ministry of Defence and supported by my Department, has shown impressive results. Whole-life costs are down by between 7 per cent. at Wattisham and 14 per cent. at Aldershot. Construction time has been reduced by 20 per cent., and wastage has been almost eliminated.
Turning to local government, the Deputy Prime Minister and Sir Jeremy Beecham wrote to local authorities last July, inviting them to commit themselves to similar targets and programmes as part of the best value initiative. The local government task force had its first substantive meeting in January this year, and launched its campaign at a conference six weeks ago. We already have 70 demonstration projects from local authorities, including road repairs, bridges, schools and housing.
Thirdly, also last July, and again building on Sir John Egan's recommendations, we challenged the leading clients from both the public and private sectors, to draw up a clients charter to encapsulate and drive forward a radical improvement in client and industry performance. A draft of the charter is currently out for consultation. I am confident that by around the end of the year, we will have achieved our target of getting enough clients signed up to account for 50 per cent. of construction procurement. That will provide a major impetus for improvement across the industry.
Fourthly, we have set in hand an important initiative to improve the industry's performance on respect for people issues—that is, valuing the people who work in the industry and encouraging policies that promote diversity, health, safety, good site conditions, welfare and training. That has been widely welcomed—not least by industry leaders, who appreciate that their growing recruitment and retention problems can be resolved only by delivering radical improvements in the way in which they treat their work force. That includes attracting more women and ethnic minorities to view construction as a potential career. This autumn, we 117WH hope to start trialling, with the demonstration projects, a set of performance measures on respect for people issues.
Fifthly, we took the initiative to improve the industry's performance in respect of sustainability and minimisation of waste. In February last year, we issued a consultation paper and encouraged the establishment of an industry group, under Sir Martin Laing's able chairmanship, to raise awareness, demonstrate the business case for sustainable construction and help the industry to measure its performance. Last month, we published the strategy paper "Building a better quality of life". It sets out our priorities, including better use of existing assets, improved design to minimise waste, minimising whole-life consumption of energy, and a variety of other measures designed to achieve improvements in environmental performance and greater profitability for the industry. The assumption that environmental targets can be met only at a greater cost is one of the fallacies of the current debate. Cutting out waste saves money, and many environmental improvements will benefit the profitability of the industry.
Sixthly, we are taking steps to encourage improved design. In particular, we want public sector clients to lead the way by adopting a team-based approach to design. Design should be visually attractive and imaginative, respect its locality and environment, allow quick, reliable and safe construction, and deliver maximum value, effectiveness and efficiency. As recently as this week, we launched a new design guide to encourage quality design throughout public planning.
§ Mr. Tony Baldry (Banbury)
I should be grateful if the Minister would explain to what extent the house-building industry has been consulted on the design guide. Those in the industry seem to feel that the Minister was criticising them for not executing good design. What was the policy imperative that brought about the design guide? Was it simply that, in future, building density will be far more concentrated?
§ Mr. Raynsford
The hon. Gentleman raises a valid point about the purpose of the design guide. I shall return to his earlier question on consultation in a moment, but the purpose of the design guide is to improve standards of design. Those who look at the performance of designers in this country will know that, at their best, they are world class. Sadly, that high quality is not to be seen in all the buildings that we construct. There are too many examples of shoddy, second-rate buildings that damage our environment, and we want to raise the general standard. I should say in a completely non-partisan way that the Secretary of State for the Environment in the previous Conservative Government, the right hon. Member for Suffolk, Coastal (Mr. Gummer), had an equal passion for improving the quality of design. We are simply pursuing and developing that agenda.
I have met regularly with house builders, and forcefully made the point that we are keen to improve standards of design, so they are well aware of our views. It is in everyone's interest that the guidance is followed. It is not restrictive; it does not try to impose a blueprint; it does not say, "We know best"; but it does say, "We want to improve the quality of design in the interests of the environment, the public and good quality building".
118WH In respect of measures relating to the construction task force, I turn to the publication last May of the first set of key performance indicators, which were based on the "Rethinking Construction" targets to which I referred. Last month, we published figures for the end of the first full year, which showed improvements in some areas but plenty of scope for progress. Measurement is a key to driving forward improved performance—whether in terms of value for money, construction time and predictability, health and safety, diversity or sustainability. It will enable individual companies or projects to compare their performance with others, identify areas of weakness and provide a tremendous motivation for continuous improvement. We are steadily improving and extending the measures, so that, before too long, they will cover the full range of issues to which I have referred. In time, they will provide a powerful incentive and tool for improving performance.
The construction task force suggested that its recommendations would be widely taken up only when they were seen to be successful, hence the emphasis on demonstration projects. We must show what can be achieved, before we start to disseminate the lessons.
We must create the mechanisms to help the industry to be aware of and understand the lessons. That is why, 18 months ago, we established the construction best practice programme. It is has grown increasingly popular, and, so far, there have been more than 70,000 requests for help or advice. Next week the M4I board will launch the knowledge exchange, a net-based system to help the industry to hear about good practice and exchange experience.
It is still early to judge the impact of the initiatives. It is scarcely 18 months since we began the drive to promote the implementation of "Rethinking Construction". The main representative bodies of the industry—the Construction Industry Training Board, the umbrella groups and the professional bodies—agree that "Rethinking Construction" has given an invaluable impetus to reform. Unquestionably, the initiatives that I have described have aroused real enthusiasm across a wide swathe of the industry and a real determination among many leading clients and suppliers to rethink construction.
I have focused on our efforts to improve the performance of the industry. However, we have also taken important initiatives to protect consumers and improve standards in the domestic sector. In April 1998, we published a consultation paper on tackling cowboy builders. In July 1998, in response to the views expressed about that paper, we brought together a working group, under the chairmanship of Tony Merricks, to develop a practical scheme to tackle cowboy builders. The group reported to me in August 1999, and we accepted its recommendations. Last month, we launched the first of two pilots in Birmingham. Once sufficient numbers of builders have been assessed and registered, the scheme will be open to consumers in Birmingham, probably in June or July this year. A second pilot will be launched in Somerset next week. By the end of the year, we should have gained enough experience from the pilots to decide whether the scheme should be extended nationwide.
§ Mr. Baldry
I am grateful to the Minister for giving way a second time. We have a strange format here, Mr. Deputy Speaker, which does not encourage 119WH interventions and lulls us into a false sense of consensus. That is why our forefathers were wise not to have a horseshoe shape for the main Chamber.
Is the Minister concerned that, in the whole of the midlands, only about 100 building firms have signed up for the pilot scheme? That suggests that a purely voluntary scheme will not work, particularly if it is a complicated scheme for which people have to fill in huge numbers of forms. Clearly, firms are not supporting the scheme, and many of them probably feel that they are better off with the cowboys.
§ Mr. Raynsford
I rather value the horseshoe shape in this Chamber. I believe that encouraging consensus, where genuinely possible, is a thoroughly good thing.
I would have thought that there would have been consensus on this issue. I have with me a copy of a report from the beat the cowboys working party produced by the previous Government. It was published in 1988.
§ Mr. Raynsford
The hon. Gentleman, who served as a Minister with responsibility for construction in the intervening period, will, no doubt, wish to explain to the House why the previous Govt took no action to implement the recommendations of that working party. So far, about 250 builders in the Birmingham area have registered an interest in the new quality mark scheme, although we have not yet launched the formal publicity and marketing campaign. The reports suggesting that there is no interest are wide of the mark.
Such schemes will always have a chicken and egg problem. Builders will not be keen to sign up until they see positive results, as consumers start placing their orders. Equally, the scheme cannot be promoted to the public until enough builders have signed up and there is a reputable group from which the public can choose. That is the chicken and egg issue. We are determined to have a strong and reputable group of builders in place, before we launch the scheme to the public. I am confident that we will achieve that. In that way, we will ensure effective action to tackle cowboy builders 12 years after the previous Government talked about it but failed to act. More than 200 builders in Birmingham have shown sufficient interest to join the scheme and have been sent registration packs—and that is before serious marketing has started.
Finding a builder who delivers competent, reliable work is never easy. The quality mark scheme is aimed at giving domestic consumers the information that they need to choose a competent builder or tradesman to maintain, repair or alter their homes. Builders who register with the scheme will be assessed against basic criteria of technical competence, financial soundness and training, including management, and craft skills. They will agree to follow a code of practice, to conform to a complaints procedure and to use an insurance-backed warranty scheme. We will develop the scheme carefully, building on the experience that we gain from the pilots. It represents an historic innovation and a major step forward for the industry and especially for consumers. We must not let them down. If it takes a little time to get it right, it will be time well spent—not 12 years, I hasten to add, but a matter of months.
120WH Some feel that a voluntary scheme may not be sufficient to curb the cowboys. We agree that tougher measures are needed. In parallel with my Department's initiatives, the Department of Trade and Industry published in July last year the White Paper "modern markets: confident consumers". That included proposals to amend the Fair Trading Act 1973 to provide a power for the courts to grant injunctions against specific practices carried out by specified trades, a power for the courts to ban from trading for a period traders with a history of disregarding their legal obligations and a power for the Secretary of State to make orders by secondary legislation to specify that certain unfair practices should become criminal offences.
Rogue traders usually operate at local level. Colleagues at the Department of Trade and Industry propose that the new powers should be available to local authority trading standards officers as well as to the Office of Fair Trading. Those legislative changes, taken together with our quality mark scheme. will in time have a major impact in helping consumers to find a trustworthy builder or tradesman and in helping consumers and trading standards officers to put a stop to the outright rogues.
I have outlined a number of initiatives that we have taken to promote a radical improvement in the performance of the construction industry and to protect consumers from cowboy builders. Time prevents me from covering many others, such as changes to the building regulations to assist people with disabilities and improve energy efficiency in buildings as well as the measures that we have taken to assist British construction companies to compete successfully and secure work in overseas markets.
Our initiatives have been widely welcomed by all the representative bodies. Perhaps most encouraging of all, the old adversarialism, which was the bane of construction, has begun to give way to a genuine determination among leading clients, professionals, contractors and suppliers to work together to promote innovation.
§ Mr. David Drew (Stroud)
I do not want to put my hon. Friend on the spot, but I was pleased to receive a submission from the Federation of Master Builders. The first point that it identified was the equalisation of the VAT regime to help with repair, maintenance and improvement. I know that that is subject to review by the Treasury, but, given the strong support from the Rogers urban task force, I hope that anything that the Minister can do in his Department, which I have to believe is in favour of the move, will help the construction industry by making sure that we have a level playing field from the outset.
§ Mr. Raynsford
My hon. Friend raises a fair point, which exercises many people in the industry and in the House. While taxation is a matter for the Chancellor, there is genuine interest across Government in the way in which we can use economic instruments more effectively to promote our objectives. Following the Budget, there has been a move to consult about changes to stamp duty and to encourage activity in urban areas. A wider debate about the use of economic instruments, 121WH including VAT, is likely in the months ahead. We shall make clear our response to the important Rogers report in the forthcoming urban White Paper.
With a sound economic basis for solid growth and a real sense of excitement about the scope for transforming the industry's performance and profitability, prospects for the future of the construction industry are better than at any time during the past 20 years. However, this is no time for complacency. The clear lesson from the past few years is that British construction has the capacity to be—and at its best, it already is—a world-class industry. A commitment to continuous improvement and a determination by the industry and the Government to work together to drive forward the Egan agenda, are the only ways to ensure that the industry can take on and beat the best in the world. That is our objective, and we are determined to achieve it.
§ 3 pm
§ Mr. Robert Syms (Poole)
I should start by declaring an interest. The Register of Members' Interests shows that I am the director of a family property company that has a subsidiary that is involved in building, and I am a fellow of the Chartered Institute of Building. For three years, I have tried to avoid getting involved in debates on the building industry, but because my colleagues are serving on Committees upstairs, I volunteered to participate in this debate.
It may be the effect of this Chamber's shape or the fact that it is Thursday afternoon, but I have to say that I agree with quite a lot of the Minister's comments—I am sure that many other hon. Members do too.
The building industry is difficult to measure. When I was doing some research for this debate, I found that some sources suggested that the appropriate figure was more than 5 per cent. of gross domestic product, others put it at 9 per cent. and the Minister gave the figure of 8 per cent. One source states that the industry employs 1.4 million, but that figure can be worked up to nearly 2 million if one includes professionals and those who supply the industry.
During the past three years, I have observed that on occasion statements are made in the House because a particular firm or industry has problems, but on other occasions hundreds of jobs, or a few thousand, may be discussed. The building industry involves thousands of jobs. I do not need to remind hon. Members that dividing the number of people who are employed in the industry by the number of constituencies shows that, in our constituencies, more people are employed in building and its allied industries than in any other industry.
What the industry produces is vital. In the modern age, we spend most of our day in a product of the building industry. The importance of producing decent, quality buildings has become more pressing with our move from the previous century to this one.
The building industry always has certain problems—it is a cyclical industry. The Minister said that boom and bust had been eliminated, but that remains to be seen. Throughout my lifetime, and those of my father and grandfather, both of whom were builders, there have been cycles. Sometimes, the upside of a cycle can be just as devastating for the industry as the downside. When 122WH one is competing for contracts and hoping that one will have the labour for a particular job six or 12 months hence, a housing boom may cause one concern because someone may come along and offer one's workers higher wages, and one might be left with labourers who are not sufficiently skilled to complete the contract.
Those who work in the industry experience terrible problems getting paid—customers do not always provide builders with their due. If one supplies a person with a refrigerator, one can always take it back, but if one has built an extension on a house, and a long legal argument ensues, it is much harder to do that. Bills and cash flow are important to the industry.
The industry has a tremendous image problem. Much of the difficulty involves cowboy builders, who were discussed earlier. People who have visited me in my surgery because of problems with builders usually thought that they would make a saving, perhaps by making a cash payment. They experienced difficulties because they did not go to someone who was reputable and were not willing to pay a proper price for a proper job. People sometimes get caught in that way.
I welcome the Government's and the industry's initiatives.
§ Mrs. Claire Curtis-Thomas (Crosby)
I was interested by the hon. Gentleman's comments on debt and cash flow in the building industry, which may be an historical problem. Does he agree that the introduction of the Late Payment of Commercial Debts (Interest) Act 1998 has done much to help small businesses, especially those in the construction industry?
§ Mr. Syms
The 1998 Act has been helpful to some businesses, but a real problem remains. People sometimes commit to building jobs, but do not appreciate the full cost or the expense of additional extras. They may suddenly find at the end of a job that they do not have the resources to pay for it. One ends up in arguments or litigation much more frequently than one used to years ago.
The biggest enemy of cowboy builders is the industry itself, as those who work in the industry appreciate the damage that they do to it. The quality of work must be secured. I am glad that the Treasury is considering the VAT regime, but at present it does not provide great incentives for getting rid of cowboy builders because people often try to save a little by avoiding tax.
I welcome Michael Latham's report; it was a good start in the effort to create a strategy for the industry. Sir John Egan's report is also very good. Of its key points, I think that we would all agree with the need for committed leadership for the industry, a focus on the customer—these days, one lives and dies by the way in which one treats one's customers—integrated processes and teams, a quality-driven agenda and a commitment to people. All those aims are vital for the industry.
While echoing the caveats of my hon. Friend the Member for Banbury (Mr. Baldry), I welcome the attempts at the quality mark scheme in Birmingham and Somerset. One needs a critical mass in these matters, but there must also be a method of differentiating quality builders who will provide a decent product from those who are less good. We hope that the industry will adopt that scheme and give it an opportunity to run. If it does not work, we shall have to try something else.
123WH There is also a problem, as always, in relation to employment training and skills shortages. Because of the cyclical nature of the industry, qualified people often leave it and do not return, perhaps because they get work in factories, where they find the temperature warmer and the work easier. At the moment, there is labour market pressure because of the years of economic growth that we have experienced, and because of events in Ireland. Growth rates are quite high, and there is a construction boom over there. Women and ethnic minorities were mentioned, and it is true that there are not enough members of either group in the industry. However, anyone who has worked in the construction industry will appreciate the contribution made by the Irish contingent, and its absence might be causing a problem.
§ Mr. Stephen O'Brien (Eddisbury)
It is important to recognise that in Ireland a great deal of the construction spend is a combination of catch-up from a very low base and a culture in which a replacement building is put in place, especially for family dwellings, without demolishing the previous one. In this country, we have one of the world's longest tail demolition rates—a fact that will help when making a comparison. Furthermore, a great deal of Irish construction is still financed by European Union grant aid, because Ireland is on a different base formula.
§ Mr. Syms
My hon. Friend makes a good point. I am aware of the fact that there are many experts and people with many years' experience in the industry here today.
In terms of skills shortages, the number of applicants for civil engineering courses has fallen from 5,100 in 1994 to 3,800 in 1997. That trend must be reversed, and we must make the industry more attractive to those looking for a long-term career. Everyone these days seems to want to go into the media, but one can have a worthwhile career in the building industry.
We must continue the line adopted by Latham and Egan in terms of the need for better leadership in the building industry, and the need to do all that we can to weed out the cowboy builders who give the industry such a bad name. The industry also needs a stable economic environment, and I hope that the economy continues to grow. As I have said, economic cycles have always been with us, and I believe that they always will be. However, if we can maintain more balance between the upswings and the downswings, perhaps we shall stand a better chance of succeeding.
The Government have got one thing badly wrong. That is the construction industry scheme, in relation to the tax scheme that has been introduced. I know that it had its genesis under the previous Government, because I had a go at Ministers about it then, although they did not seem to listen. The present Government made several changes when they introduced the scheme. Under the old scheme, using the 714 certificate, one could fax through and photocopy certificates, which worked pretty well. It is unbelievable that anyone could introduce a scheme in which people now have to drive around and physically show the certificate to the person with whom they are doing business. In the age of 124WH electronic commerce, that is not a terribly good idea. However, I am glad that the Government have taken on board some of the problems and started to amend the scheme.
Treasury officials always complain that the industry does not pay its full whack of tax and national insurance, but it is difficult for it to do so, given its structure. In trying to crack down under successive Governments, the Treasury has not thought through the consequences, and has sometimes done the industry great harm. As always, those who are law abiding and try to do what the Government want by obeying regulations do not benefit, as opposed to those who ignore the regulations and work in the cash economy.
This is a vital industry: if it prospers, the nation will prosper. Provided that we can find decent leaders and encourage young people to attend appropriate university courses and training schemes, we can provide better buildings that will benefit everyone in this country.
This is a good subject to debate in this Chamber. It has not been discussed sufficiently, whether in the House or in Standing or Select Committees. I hope that this will be the first of a number of debates on the construction industry, and I look forward to members of all parties bringing their experience to the subject.
§ Mr. Deputy Speaker (Mr. John McWilliam)
Order. Before I call the next speaker, I should say that several hon. Members are seeking to catch my eye. If all want to speak, could they please try to be as brief as possible?
§ Mr. David Chidgey (Eastleigh)
I will take your words to heart, Mr. Deputy Speaker, and give other hon. Members the chance to bring their experience to bear on this important debate.
I should begin by declaring an interest. I am a civil engineer—non-practising, but I am hoping to do better—and a fellow of the Institution of Civil Engineers. It is good to see that many of the hon. Members who are chartered engineers are present today, and I shall extend that observation even to the odd architect. [Laughter.] He is a good chap really.
§ Mr. Deputy Speaker
Order. The hon. Member for Chipping Barnet (Sir S. Chapman) has been a Member of Parliament for a long time. He has been called lots of things, but never odd. [Laughter.]
§ Mr. Chidgey
I shall contemplate your intervention, Mr. Deputy Speaker, when time permits.
I want to deal with three points in this debate, which is concerned primarily with the construction industry. However, we have spent time discussing the somewhat different issue of housing, and with regard to the Minister's response to an intervention on tax regimes, a little more support for the use of tax regimes to encourage housing development on brownfield sites, rather than greenfield sites, would have been helpful. That is an area in which much can be done.
Before developing my main argument, I should repeat an apology. Because of a constituency engagement, I cannot stay for the end of the debate. I have already spoken to the Minister about the matter, so I am sure that he will understand.
125WH There have been mammoth changes in the construction industry in my professional life, and we must prepare for the future challenges. The construction industry has formed a very important part of our employment base for many decades, if not centuries. As has been said, when there is a recession, the construction industry always bears the brunt and experiences the first fallout. We are not talking about the loss of a few thousand jobs; often, as many as half a million jobs are lost in a short space of time. In the main, those people do not return to the industry, even when the economy picks up or there is a boom, so the industry is always playing catch-up.
Changes in the construction industry in the past few decades are important to the way in which we view its future. When I started as a professional civil engineer in the 1970s, the construction industry was benefiting greatly by the oil boom in the middle east, and British contractors and consultants led the way because of our long-standing ties with those countries and Governments. That was a great source of export income for this country, and presented significant opportunities for the industry and the development of its skills. Of course, it did not start there. In the 1950s, the industry had a great dowry from the days of empire. In post-colonial times, local civil services continued to award contracts to British contractors and consultants because that was the system that they knew and respected; they understood the way that we worked and were reassured by that. The problem was that people sometimes became complacent in the knowledge that work would come their way.
At that time we had a huge, worldwide export market, in which the construction industry was a major player. The Minister's comment that our industry has the potential to be world class rather shook me, because, until fairly recently, I had always thought it to be so. Traditionally, it has been world class and a world leader. I accept that it has to change: we can no longer scour the world to pick up civil engineering contracts in roads, bridges and railways. Times have changed since the days when thousands of men could be put on-site for a job somewhere on the sub-continent of India. The middle east market is much smaller than it was, and is serviced mainly by local employees, technicians and engineers.
The internationally funded projects that we used to bid for, and win, are nowadays too few, and too unprofitable—far too many British firms compete for returns that are far too small. For example, a few years ago there were some 4,000 registered consulting engineers in this country. Whenever those 4,000 engineers bid for a European-funded project, they were bidding for a place on the shortlist for the European contender. That was an almost impossible situation.
§ Mr. Lawrie Quinn (Scarborough and Whitby)
In 1998, professionals in the construction industry who worked in overseas markets contributed £2.3 billion to the British economy in invisible earnings, which equates to 20 per cent. of the total. Is that not a sign that we are world leaders and world class, and that we should continue to market that throughout the world?
§ Mr. Chidgey
I am grateful to the hon. Gentleman for making the important point that 20 per cent. of our invisible earnings come from the professional and 126WH technical skills of the construction industry. However, two decades ago the proportion was 40 per cent. or more. The industry vied strongly with the financial institutions, which are always quoted as the main source of invisibles. Yes, we are still major players, but we will not be in any shape to continue along those lines unless we look to the future and address the problems.
The high-value overseas markets for our construction industry, in terms of construction management and engineering skills, are no longer in the world as we used to know it, but in north America and Europe.
§ Mr. Jim Cunningham (Coventry, South)
Does the hon. Gentleman agree that when we talk about the value of the construction industry in relation to exports, we should consider the fact that Berlin, for example—especially east Berlin—is a vast construction camp where many British companies are involved?
§ Mr. Chidgey
I am grateful to the hon. Gentleman for that intervention. I recently had the good fortune to visit Berlin on parliamentary business, and saw the latest developments in the German Parliament's move from Bonn to Berlin, which is probably the biggest construction project of its type in the western world.
I do not know whether there are opportunities for the British construction industry beyond those that we have grasped, because I am not involved in that day-to-day aspect of the profession. The point that I am trying to make is that the market has changed dramatically. The industry has made great strides in recognising that, in order to stay in business, but the Government must recognise it too.
Consulting engineers and contractors have changed their way of operation in response to the Latham report and they are responding now to Sir John Egan's efforts in the Movement for Innovation board. I welcome that, because it is a good initiative. We can do a lot more, and I hope that the Government will be minded to take the necessary interest to ensure that we do more to introduce best practice, initiatives and progress.
I am aware that other hon. Members want to speak, so I shall be brief in my final comments. Much more could be done in the United Kingdom. We have an horrendous legacy of decaying infrastructure, which is inevitable because we were one of the first countries to industrialise, so our infrastructure is that much older. It needs attention and we must consider how to maintain, improve and develop it to meet the needs of society in transport and public buildings. We must examine more closely and work more readily on sustainable development. I want to place on record the work of the Institution of Civil Engineers in throwing off the image of dusty, dog-in-the-manger engineers which the profession had and being forthright and visionary in their approach to sustainable development. We should welcome that and pursue it, and the Government have a role to play.
Our export market presents a tremendous challenge in sustainable development and the environment. When we consider a healthy environment, we tend to think of reducing the pollution and fuel consumption of cars on motorways, but for people in much of the world it means clean water, sanitation and food that they can rely on, and that presents tremendous opportunities for British companies.
127WH We have the opportunity to develop sustainable skills. There are too few engineers and technicians. I heard today that half the structural engineers employed in this country are now imported not just from Europe, but from further afield. We are importing the basic engineering skills that we have taken for granted since Victorian times, which is an illustration of how far we have gone in being unable to sustain the skills that we need to drive our economy.
There is a huge problem with the public attitude that engineering and manufacturing is a dying industry. With the problems at Rover and Ford at Dagenham, parents do not encourage their children to go into engineering because they believe that there may be no decent jobs available. Nothing could be further from the truth. Engineering is the essential industry that drives our economy and sustains the quality of life that the people of this country have the right to expect. The Government have a duty to ensure that they can achieve that.
§ Mr. Jim Cunningham (Coventry, South)
Unlike some Opposition Members, I would not claim to be an expert on the construction industry. I am a layman, but I want to raise a number of issues. I welcome the report and the Government's intention to take action and to set up pilot schemes. It is always wise to set up pilot schemes because mistakes can be discovered as well as the good points.
The construction industry is important to the economy not only because of the jobs that it provides locally, but because of exports, especially hidden exports. When I intervened earlier, I alluded to Berlin, which I visited 18 months ago. There is a vast construction camp in east Berlin, for which British companies provided designs, skills and know-how. Some projects are massive, including the German Parliament building and others in places such as Dresden, which was bombed during the war.
The Construction Industry Training Board has projected an average annual increase of 2.5 per cent. in construction output in the west midlands, matching the national average, and there are more people employed in the construction industry in the west midlands than in many other parts of the United Kingdom, but people do not often think of that.
Large projects such as Coventry City stadium, which is in my constituency, and the Bull Ring in Birmingham involve a huge number of people from the industry in designing, planning, building and maintaining major schemes, and many smaller industrial projects are up and running or set to start later this year. It is good to see a buoyant forecast for the construction industry, especially after the lean years of the early 1990s, but there are still challenges to face, some by the Government, which I am sure that some of my hon. Friends will mention, and some by the industry.
On industry challenges, Sir John Egan's report "Rethinking Construction" raised such themes as a better response from industry employers to clients' needs, greater respect for people in the industry and the dissemination of best practice to maximise value for money, profitability, reliability and respect for people.
128WH The quality mark initiative, a Government-sponsored scheme aimed at raising the standard of workmanship in the domestic repair, maintenance and improvement sector, is a great start, and I am pleased to see that consumers, builders and all the major stakeholders, including the construction industry and consumer groups, had a hand in developing the scheme from an early stage.
We welcome the news that consumers will be able to select reputable builders who have shown independent assessors that they have the skill to complete work to a high standard. That will enable firms to identify themselves as a quality enterprise and to differentiate themselves from the cowboys. I will watch the pilots in Birmingham and Somerset with interest.
In August last year the cowboy builders working group published a report that made recommendations aimed at protecting consumers from unfair practices, largely in the domestic repair and maintenance sector. The report's proposals have major implications for training in the industry at all levels and for the industry's operative registration schemes. The final report recommended that an independent body be established to own the quality mark and supervise its operation. Together with representatives from the construction industry, consumers and local authority interests, the group is charged with implementing the quality mark and ensuring that cowboy builders are corralled as far away as possible from trusting consumers.
There will always be groups who are more vulnerable and susceptible to cowboy builders than others. Nationally, Age Concern has decided that it, too, wants to take action against cowboy builders, who often prey on the elderly and the housebound. Its new scheme, First Checkpoint, is a way of doing just that. It has launched pilot schemes in three areas to protect vulnerable older people from cowboy builders and other rogue home maintenance tradespeople. Its aim will be to help older people to obtain good-quality home improvements on fair terms from the right people. The scheme already has community-wide backing in each area from trading standards, social services, crime prevention officers and neighbourhood watch associations.
One of the pilot areas is Coventry, and I am happy to give it my full support to stop disreputable and untrustworthy builders and tradesmen giving the construction industry a bad name. The cowboys damage the reputation of decent professionals, because even older people who do not suffer directly are put off having work done because of the stories that they have heard.
Some of the scams that people try to get away with are incredible. An 86-year-old housebound woman in Coventry was driven to her building society by a boiler installer to withdraw her £900 savings. The boiler that he installed failed to heat the water, and she had to spend another £700 having the work put right. A blind pensioner from Bradford was talked into signing a cheque for £180 to tarmac a drive, which was left unfinished. The firm in question had spent just two hours on the job. In another case roofers charged a disabled pensioner £40 for a roof inspection. They told him that the battens were rotten. Another roofer who 129WH later checked the roof found that the tiles had been deliberately removed to expose the battens to the elements.
Shoddy home improvements cause distress, inconvenience and serious financial loss to vulnerable older people and their families. Accredited and experienced builders, architects, surveyors and home improvement professionals such as glaziers, plumbers and electricians, many of whom have been recommended, will be invited to register with Age Concern. They are needed either on a paid-for basis to carry out work for older people at the going rate or on a voluntary basis to help to ensure that the scheme is successful.
Age Concern has taken steps to protect older people from being ripped off by builders and tradespeople who join the scheme. Participating home improvement professionals will be able to provide three references from the previous year and will be fully insured. They will sign up to a code of practice and agree to site inspections by local Age Concern First Checkpoint schemes.
Last year, according to a survey by Coventry trading standards officers, there were 138 incidents involving cowboy builders and other rogue traders preying on local people. I am informed that that is just the tip of the iceberg. Before our debate, Sandra Williams, an advocacy officer for Age Concern, told me of a recent case in Coventry, in which a retired couple in their 80s noticed a leak in their bathroom. Their daughter, who would normally have helped them with such matters, was on holiday, so they found someone in the "Yellow Pages" and asked him to look at it. He claimed to be a member of the institute of planning and gave them a price, to which they agreed.
He did the work—poorly, it turned out—in a couple of hours and offered to drive the 80-year-old lady to the building society. She refused to go for the cash, pointing out that the invoice was for far more than had been agreed. Many people fail to do likewise, and there have been cases of people being taken to banks and building societies to withdraw hundreds of pounds. In the case of the couple in Coventry, the builder issued an invoice for £130 for materials and £90 for labour. An independent assessor said that the parts would have been £45, at most, and that the labour would have taken no more than an hour.
Why should lay people have to argue with those who are employed to do a job for them? We should be able to have confidence that we are not being ripped off, every time that we employ a tradesman or tradeswoman to fix a problem. In conclusion, I applaud the work done by the Department of the Environment, Transport and the Regions, and by my hon. Friend the Minister in trying to address the issue of accreditation. I ask the Minister to help organisations such as Age Concern, which have very little funding, but provide a valuable service in addressing the problems caused by cowboy builders.
§ Mr. Nick Hawkins (Surrey Heath)
I begin by declaring an interest as parliamentary consultant to the British Cement Association. Moreover, as a barrister, I did a number of construction industry cases and, as a 130WH corporate lawyer, I have worked for construction companies and other companies involved in building and property. I therefore come to this afternoon's debate with a considerable interest.
We should all be aware that a balance should be struck between the interests of our constituents, who wish to preserve the environment and the green belt from excessive development, and the interest of the country in high-quality development and the replacement of inadequate buildings with good ones. I know that the Minister shares my commitment to achieving that balance, not least because we were the only two Members of the House who attended the construction industry awards dinner. The Minister was present to give out the awards, and I agreed with much of his speech on that occasion, as I have agreed with what he and my hon. Friend the Member for Poole (Mr. Syms) have said today.
There can often be a measure of agreement in debates such as this. We all accept that there are challenges to be faced and a great deal of work to be done, but everyone involved in the reputable side of the construction industry has a great deal of which they can be proud. As many hon. Members, including the hon. Member for Eastleigh (Mr. Chidgey), have said, it is important to recognise that British construction companies are earning huge amounts abroad by producing high-quality buildings. I can tell the hon. Member for Coventry, South (Mr. Cunningham)—whose concerns I share—that what he saw in Berlin 18 months ago still applies. I was able to visit our German counterparts in Berlin during the Easter recess, where I saw how British companies continue to play a major part in the reconstruction work there, as in many other countries.
The Minister would also agree that, just as he faces challenges in his discussions with his counterparts in the Treasury, every level of the construction industry faces great problems. My hon. Friend the Member for Poole and other hon. Members who have spoken have rightly expressed concern at our failing to get taxation arrangements right. I therefore urge the Minister to continue the pressure that I know he has already sought to put on his counterparts in the Treasury. When amendments are debated by the Committee considering the Finance Bill, and perhaps in future legislation, it will be essential to realise that for small companies taxation arrangements and issues such as the replacement of the 714 form scheme—I think that everybody now accepts that the changes originally introduced by the Government were not helpful—can make the difference between profit and loss and between survival and prospering and bankruptcy. I see the Minister nodding and making notes. I am grateful to him, because I know that he has taken these issues seriously.
Further work still needs to be done on CIS 5 and CIS 24. I apologise to the Minister for the fact that, like the hon. Member for Eastleigh, I will be unable to stay until the end of the debate, but I hope that he will at least be able to say a little about those. I cannot stay until the end because I have to attend a meeting with one of his ministerial colleagues, but I apologise to him and to other hon. Members for leaving early.
I want to turn to some of the other issues, on which I think the Minister and I will again agree. First, much new housing construction is of high quality. The Minister may be aware of the green leaf awards for 131WH environmental standards. He will probably be pleased to know that last Friday I presented two of those awards to successful projects in my constituency. He is certainly aware that in my constituency there is a great deal of Ministry of Defence land, which will now be developed, and other brownfield sites.
When I presented the green leaf award certificates last Friday morning, I was pleased to see that one of the developments was a high-quality, low-cost development on a brownfield site. The developers, Barratt, and people from the Housebuilders Federation told me that the houses had replaced a disreputable nightclub that had had to be closed down, having been an enormous nuisance to people living in the area, and had then become a derelict site with crime, criminal damage and use by drug addicts and squatters. Local people, who in other circumstances might not have wanted the site to be developed for housing, were delighted to see it cleared and good-quality, low-cost affordable housing built on it. The high-quality developers are looking out for such sites.
The second site was an extremely high-quality development for retired people by English Courtyard at Mytchett Heath in my constituency. Having seen that large site being developed over the past three or four years, I know how greatly those who live in it appreciate the good balance between the number of housing units and the preservation of an arboretum, an open-air theatre and other high-quality facilities. The developers did not seek to cram in the maximum number of units. Again, the Minister nods. He shares my praise for developers who develop sites sensitively.
I want to make a final constituency point, of which I think the Minister is aware. It is agreed in the local plan that one of the larger Ministry of Defence sites will be developed—the former Alma-Dettinger barracks. A group of concerned residents, led by my constituent, Mrs. Shirley Coveney, is working with the developers—once again, Barratt—on a large site to try to preserve some of its best features and not allow everything to be knocked down, and to have a development along the same environmentally friendly lines as the Poundbury model village that His Royal Highness Prince Charles has so strongly supported on his estate.
I hope that there will be cross-party agreement on some of those issues, but many in the construction industry continue to be concerned about the effects of the climate change levy. On behalf of a range of industries—not merely those in construction but those in horticulture and others—I should tell the Minister that there are severe concerns. He and other hon. Members may not have focused yet on the impact that positive environmental measures have had on many people involved in construction, particularly in cement and concrete, in recent years. I know that he is aware of the environmentally friendly use of recycled waste tyres in cement and concrete production, and I hope that he will continue to support that, but I hope that he recognises that further progress is necessary and that he and Ministers not only in his Department but in all Departments, especially the Treasury, will take seriously the concerns that have been expressed by industry leaders.
132WH Cement and concrete can help to prepare brownfield sites for new home development, because in-situ cement mixing can physically and chemically mobilise contaminants in the ground. The British cement industry, other industries and the university of Greenwich's centre for contaminated land remediation continue to collaborate on that. The Minister smiles; I know that he particularly welcomes anything involving the university of Greenwich. Once sites are decontaminated, the improved land can be used as ordinary building land. For example, the millennium dome is built on such a site, as are a new school in Leyton and housing in West Drayton.
Whisper concrete has been trialled extensively, and such experimental road surfaces can offer environmental benefits. My constituents express much concern about road noise from the M3, and nearby constituents have noise problems from the M25, so I hope that the Government will examine not only whisper concrete but other road surfaces. Some technical experts have written to me and have pressed the Minister's colleague in another place, Lord Whitty, on the possible use of Colsoft. Perhaps the Minister will consider that and examine my correspondence with the noble Lord.
I will briefly make one or two other points. Not only the construction federation but the Construction Industry Council and the Chartered Institute of Building have told me that further work should be undertaken to ensure better collaboration between some of the construction industry bodies. The Construction Industry Board, the construction research and innovation panel and the construction best practice panel sometimes experience liaison problems. Councillor Keith Bush, one of my constituents, is a diligent borough councillor and has done much work with the Chartered Institute of Building. Some bodies are partly or entirely funded by the Government, and he regularly discusses with me the need to ensure that they work together better. I am sure that the Minister will take account of that.
The plans to deal with cowboy builders need to be allied to changes in the value added tax regime, which I hope that the Minister will discuss with his counterparts in the Treasury. The Construction Industry Council believes that unless changes to the VAT payable on domestic repair and maintenance are made to help reputable builders, it will be difficult to make the cowboy builder schemes work. I am sure that all hon. Members will agree that although tougher measures are needed to tackle the cowboys, the real rogues will try to drive a coach and horses through the rules. The boys from the blackstuff, if I can caricature them as that, are not interested in schemes or rules. We must persuade people always to use reputable builders.
In answer to an intervention by my hon. Friend the Member for Banbury (Mr. Baldry), the Minister said that many building firms around Birmingham have expressed interest in the scheme. It is all very well to say that, but reputable companies must sign up for the scheme when its marketing takes effect. The acid test will be whether people use the reputable builders—I see that the Minister agrees.
Construction output is estimated at between £60 billion and £62 billion per annum. All hon. Members support a continuing increase in that, but it 133WH must be high quality, and construction firms and building companies must not be strangled by red tape. When the Minister examines his pilot schemes, I hope that he will ensure that we do not repeat the problems with the replacement of form 714 and with taxation, and that we do not create an over-bureaucratic system.
When we debate again, perhaps in the main Chamber, the way in which housing and construction should develop, we should all bear in mind the fact that in south-east England, and especially in constituencies such as mine, there is enormous pressure not to spoil the green belt or the countryside beyond it. We must ensure that we maximise the use of existing brownfield sites and preserve the best of our existing buildings. The Minister will know that I have regularly championed the conversion of existing buildings for modern uses, not only throughout my eight years or so in this House, but in articles that I wrote before entering Parliament. We have seen good examples around the country, such as Dean Clough in Halifax and the way in which marvellous Victorian industrial heritage, such as Salt's mill, has been used as art galleries. There are marvellous examples of how those projects can be developed.
I ask the Minister to bear in mind the concerns being expressed about another fine Victorian building that might be under threat, Manningham mills in Bradford, which is not dissimilar to Salt's mill. I ask him to consider carefully the comments that experts have made about that issue in the press in recent days.
I have tried to cover a lot of ground quite quickly. The Minister was right to praise all the work being done by leading industry figures, such as Sir Michael Latham, Sir John Egan and Sir Martin Laing; I echo what he said. There is great hope for the future that construction will continue to be an industry of which everyone in Britain can be proud. However, we must ensure that there is delivery and that consumers dealing with small building firms are encouraged to choose only the reputable ones. We cannot stop every rogue who is operating, but we can ensure that there is real consumer protection, so that the good firms can flourish without being strangled by red tape and the rogues can be pursued and driven out.
We must ensure that larger firms are also encouraged to have high standards, particularly in relation to safety, which I regard as of paramount importance, but which has not been mentioned a great deal so far. At the same time, we must ensure that there is no risk that even large firms will be strangled by an over-bureaucratic approach.
§ Mr. Andrew Miller (Ellesmere Port and Neston)
I do not bring with me any vested interest in the industry. I have a certain amount of experience, as the hon. Member for Eastleigh (Mr. Chidgey) knows from his earlier incarnation in materials testing and engineering geology. I suspect that I might have done some work for him when he was an undergraduate many years ago. I leave it to hon. Members to decide who has worn best. I also suspect that I have laid more bricks personally than the Opposition have dropped collectively.
I am concerned about cowboy builders, and we must get to grips with that issue. I have one case in mind from my own constituency. I shall not deal with it in any 134WH detail, because I hope that there will be a police prosecution shortly. The case is similar to that described by my hon. Friend the Member for Coventry, South (Mr. Cunningham).
I am concerned about another aspect. Again, I shall not name the firms involved, but one major construction site in Chester employs, quite understandably, a network of subcontractors. They are further subcontracting and saying to people down the chain, "We want you to work on a self-employed basis, rather than being directly employed by us." That is a clear and deliberate attempt—the owner of the principal contract understands this—to avoid paying into the national insurance fund and to avoid paying income tax. That practice must be wiped out; major companies that are subcontracting, and whose subcontractors are also subcontracting, must take action and be more responsible.
A constituent visited me a few weeks ago—a bricklayer who is nearing retirement. A company had dismissed him because he refused to work for it on a self-employed basis. He won a tribunal; the principal contractor dismissed the sub-contractor; the second sub-contractor did the same and is now in the process of a second industrial tribunal claim against the other sub-contractor. That practice is utterly unacceptable. It reflects the fragmentation to which my hon. Friend the Minister referred. In turn, that has a major impact on training, where apprentice bricklayers—the next generation of skilled workers—have been working with the contractors.
My principal topic this afternoon is health and safety. The practice that I described does not promote an effective health and safety culture. I thank my hon. Friend the Member for Corby (Mr. Hope) for bringing a Biblical quotation to my attention. I did not know that one of the qualifications for being a Parliamentary Private Secretary in the Department of the Environment, Transport and the Regions was Biblical scholarship. My hon. Friend pointed out that verse eight of chapter 22 of Deuteronomy states:When you build a house, you shall make a parapet for your roof that you may not bring the guilt of blood upon your house if anyone fall from it.Safety in the industry is crucial. We all agree that preventable accidents and ill health are unacceptable. The industry has done much in recent years to reduce the number of fatal accidents, but the latest figures are still worrying. There were 70 deaths in 1998–99; 86 in 1997–98; and 93 in 1996–97—an unacceptable number of fatalities. The number of musculo-skeletal injuries is horrific. Averaged out over the previous five years, there were 83 fatal accidents, 3,164 major injuries and an estimated 123,000 musculo-skeletal injuries. Those injuries currently cost the country approximately £180 million a year—a burden that the taxpayer should not have to bear. Responsibility lies with all players in the industry, including employees, to drive those figures down. There have been some encouraging trends, as I said, and we must further encourage participants to move towards a healthier and safer environment.
The industry is examining the all-round competence, including knowledge of health and safety, of its workers. There is significant support for the construction industry training board construction skills certification 135WH system, which covers the skills of brickies, plasterers, carpenters and other jobs of significant risk. There are currently 292,000 cardholders of the certificate of training achievement for those operating cranes and hoists, which is a positive step in the right direction.
Last week there was a fatality on a refurbishment project at Cleanaway in my own constituency, when scaffolding collapsed. It is still under investigation by the Health and Safety Executive, but that sort of incident should not occur if we drive forward standards and improve certification at all levels of the industry.
Employees and trades unions can help tremendously. There has been a greater coming together and professionalism on major building sites in recent years. I hope that the work that has been done in more static occupations such as factory environments to promote health and safety and proper representation continues.
§ Mr. Quinn
Does my hon. Friend agree that one of the main problems with the construction industry is its mobile nature, and the fact that it is not easy to employ safety representatives on sites? Does he agree that the construction trade unions should be considering some type of roving safety rep scheme to bring about the change of culture that is needed on construction sites?
§ Mr. Miller
I am grateful to my hon. Friend. I recognise his experience in this sphere. That approach ought to be considered as it may provide a solution.
I refer my hon. Friend to my earlier remarks about subcontracting, which exacerbates the problem. I am not sure where the right model lies. It is possible that parts of the country where there is greater activity might provide different solutions, but something along the lines that my hon. Friend suggests needs to be considered.
I go along with the comments of Conservative Members about VAT. This is another Tory U-turn. That is wonderful. It was their party's policy to impose VAT on construction materials. I know that only too well because it happened when I was rebuilding my derelict house and I got caught for the 12.5 per cent. that the Tories slapped on them. It also taught me some interesting things, one of which was that the whole process was rigged with loopholes, all of which surrounded not the repair and maintenance of listed buildings or churches, but the extension of them, created for the benefit of one or two people down the end of the Corridor. It was outrageous. I could understand their being used to protect listed buildings to ensure their repair and maintenance, or churches, and our heritage, but it was done to enable listed buildings to be extended. That is an absurd set of rules, which I hope the Chancellor of the Exchequer will address in due course.
Public perception of the industry has improved tremendously. As my hon. Friend the Minister said, design and architecture have improved dramatically. Exciting new developments are taking shape all around us, ranging from the London Eye to some of the superb blocks of flats on the river. Even the character of housing estates in suburbs and towns is improving dramatically. The relevant professions deserve to be congratulated on that.
136WH However, there is more to be done. I refer to the management of sites while developments are taking place in order to minimise disruption. The transfer of responsibility for roads and communal areas between developers and local authorities must be undertaken in a more systematic and tidy way. There have been a few unacceptable examples in my constituency, where I have had to persuade developers to finish work that they should have done before the transfer to the local authority. Some improvements can be made in quality standards in all areas. The public are entitled to a better recourse to the complaints process than they have through the current NHBC system, which has caused a number of problems in my constituency.
The industry is exciting. It provides a lot of work in this country. It has huge risks associated with it, but there are moves in the right direction to improve that. I urge the industry to work with all the partners, including the trade unions, to address those health and safety issues. I am sure that it will continue as an important and vibrant contributor to the British economy.
§ 4.1 pm
§ Sir Sydney Chapman (Chipping Barnet)
I am grateful to be called in this important debate. I should like to begin by congratulating all the speakers so far. The Minister is to be applauded for the tone and most of the content of his speech. I do not claim to be an expert on the construction industry, but I recognise it as one of the greatest industries in our country. Its definition varies, and that is amplified by the different figures that have been given. I would prefer to stick to the £65 billion output; last year it was £62 billion, so that it is a pretty conservative point to make.
The industry represents about 8 per cent. of our gross domestic product and, equally importantly, employs 2 million people. That figure is broken into roughly 1.25 million employees and 750,000 self-employed people. That underlines the variety in the industry, but adds to some of its complexities and problems.
Historically, the construction industry has had little influence in the corridors of power and there are two reasons for that. First, people who work in it are evenly spread throughout the country. There are no construction industry seats waiting to be swung by the drop of an electoral promise, in the way that there used to be car manufacturing or farming seats. Secondly, and this was exemplified by the hon. Member for Eastleigh (Mr. Chidgey), it is a disparate industry that almost has a genius for falling out among its different parts.
I can more truthfully describe myself nowadays as a non-practising architect, an honorary chartered surveyor and a has-been politician. I hope that the division in the industry is ending—there are some good signs for that. The Minister referred to the excellent far-reaching report of our erstwhile colleague, Sir Michael Latham. That spawned the Construction Industry Training Board and the Construction Clients Forum. Then there was the setting up of the Construction Industry Council, with 55 representative bodies. It might be appropriate at this time to declare an interest. I belong to seven of those 55 bodies. I am an honorary fellow of five of them, a member of the Royal Institute of British Architects and a fellow of the Royal Town Planning Institute. If I may declare a reverse form of financial interest, I have to pay the architects and the planning profession.
137WH I can be brief because many of the points have been made. I should like to rehearse the five principal problems facing the industry, as I perceive them. First, historically—I am not making any party political points here—the industry has suffered from under-investment. I mentioned the 8 per cent. investment. Research shows that European Union countries have an average investment of about 12 per cent. We see the result of our investment in the huge backlog of infrastructure that needs attention and the huge number of homes that need to be brought up to modern standards, and it is perfectly legitimate of the construction industry to point that out. I recognise and welcome the construction task force that was set up by the Deputy Prime Minister and headed by Sir John Egan. I hope that its plans will be implemented.
The second problem is efficiency, but since everybody has talked about that, I do not need to. The third problem, which has also been touched upon, is the quite frightening skills shortage, particularly in the engineering sector. I hope that that can be addressed. It is easy to talk about spending someone else's money, but the Government, rightly or wrongly, have introduced a scheme to encourage more teachers by offering £6,000 to postgraduates who take up certificate of education courses for one year. Perhaps we are coming into an era when such an arrangement should be targeted at parts of the construction industry to attract engineers and the other skilled craftsmen.
The fourth problem, inevitably, is regulation. As hon. Members have said, not least the hon. Member for Ellesmere Port and Neston (Mr. Miller), health and safety are paramount in our society, never mind the construction industry. However, there is too much red tape, which has been added to unnecessarily in recent years. Much of the construction industry consists of small and medium-sized businesses, which have suffered from increasing burdens. An almost byzantine structure of separate regulations applies in this huge, all-embracing industry, and many of them overlap. They govern, not only the design and construction of buildings, but their operation. I offer the House an eight-word quotation.Our regulatory framework is excessive or poorly conceived.Those were the wise words of the Prime Minister and they fit the construction sector to a T-square. Even recent employment legislation has not helped. There is a division of opinion on this, but I question the value of the working time regulations.
The fifth problem facing the industry is the VAT inconsistencies, for which the previous Government are partly to blame. All Governments are to blame, however. I know that the Government are looking at the effect of VAT on maintenance and repair of buildings and that there is an EU directive problem, but my reading of the directive is that, if minded to, the Government could reduce VAT to 5 per cent. Let us remember that the repair and maintenance sector represents almost half of the output of this great industry.
I must make the point that the climate change levy is an absurdity. We seem to be encouraging the domestic sector to spend more money on energy while also taxing every other sector on the amount that it uses. Exceptions have to be made for big energy users so that, although they pay a huge penalty—and will continue to do So— 138WH they will get some recompense, which will not happen for more modest building material producers. The building products business is a big part of the construction industry. I feel strongly that in introducing the aggregates tax the Government have got it wrong. The aggregates industry proposed an improvement programme that would be far more protective that the aggregates tax ever could be.
The construction industry has a vital role in sustainable development. I define this as using resources to meet the needs of people today without irrevocably damaging the world for future generations. We must maximise the use of renewable energies and the recycling of waste. We must minimise contamination of land and water and stop poisoning the air. We must reuse existing buildings wherever practicable. The Government must implement a comprehensive waste strategy. I am confident that they will begin to do so. They must insist on the minimum use of energy in construction works and ensure that buildings are designed for maximum energy conservation.
The Government have promised to take the lead, and rightly so, as the biggest single client in the construction industry. I understand that they want to see buildings designed, procured and constructed in a more environmentally friendly way. The Under-Secretary, the hon. Member for Stretford and Urmston (Ms Hughes), rightly observed that Government action alone will not make construction more sustainable. There is a genuine challenge to the industry. Building a better quality of life must begin with a more sustainable built environment.
I am grateful to have had the opportunity to speak in the debate. I end simply by echoing what has been said about where we build in the future. We must build on brownfield sites wherever possible, if necessary, giving tax incentives to people to do so. We must build on greenfield sites only as a last resort—I realise that we shall have to build on some of them. We must never build on what is perhaps one of the most successful examples of post-war planning policy—green belt land.
§ Mr. Deputy Speaker
Order. Before I call the next hon. Member, I want to make it clear that payment of professional fees by Members is not a declarable interest any more than is the fact that I found a couple of my old slide rules the other day.
§ Mrs. Claire Curtis-Thomas (Crosby)
I am grateful, Mr. Deputy Speaker, to be able to speak in this important debate. I declare several interests. I am a passionate engineer, a fellow of the Institution of Mechanical Engineers, a senator on the Engineering Council, which regulates our professional body, an honorary fellow of the Institute of Chartered Surveyors and a devotee of one of the most outstanding professions in the United Kingdom that contributes more to the quality of life than any other discipline that I can think of.
It has been a great privilege to work in the engineering business for the past 20 years. I am sorry that I did not get into the construction business. Fortunately—I am 139WH pleased that some of my colleagues are not with me today—I entered the mechanical engineering business, but had I known more about the civil engineering business I would probably have gone into that. There can be no greater tribute to individuals than to see their legacy stand after their demise. Some of the United Kingdom's building structures are first class. They are outstanding, and they draw visitors from all over the world—not least the building in which we stand today.
As an aside, I have to tell hon. Members that when the original plans for this building were submitted there was such an outcry—which continued before and after its construction—that, unfortunately, it led to the suicide of the original architect. That is terrible but it illustrates the way in which views about the edifices around us—I am thinking in particular of the millennium dome—change after a suitable period for reflection.
§ Mrs. Curtis-Thomas
I turn to the serious matter of skills shortages and gaps, and regulation. Most of us who have lived through the latter part of the 1970s and right through the 1980s and 1990s witnessed the decimation of the construction industry. It went quickly from being a booming business, with more projects than it knew what to do with, into major recession. The skilled and semi-skilled work force at both technician and professional levels moved from the industry into other work. Some in the vocational and craft industry did not; they went into employment.
That was fine, but unfortunately it had a tremendous impact on further education colleges, higher education colleges and universities. There was a lag of some three to four years between the demise of the construction industries and the impact on the academic and training institutions—but that impact is still felt today. FE and HE colleges simply could not attract enough recruits through their doors to support the courses that they had offered previously. Therefore, the people who generated the skills and academic requirements for the business slowly diminished. Excellent lecturers and facilities in small FE and HE colleges and in universities diminished gradually but surely over time.
In the latter part of the 1990s, we began to see a welcome resurgence of the construction business. However, the skills and requirements needed to underpin it were in short supply. Many companies were unable to fill order books or respond to demand simply because they could not find recruits. The Government have taken a number of significant initiatives to tackle that, but Government action alone is not sufficient.
Last year I attended a conference under the banner "From Skills to Prosperity" in the north-west that brought together businesses and the academic community. It sought to match academic output with skill requirements in the region. The reality today is that there are many academic institutions with reasonable facilities that produce individuals who do not match local employers' requirements. Many local employers 140WH require skills that are not articulated by the academic and training institutions that could satisfy those demands. I would applaud any dialogue that encourages academic and training institutions better to fit their courses and training programmes to meet the needs of local employers. The lag in producing courses that meet demand is about three to four years, so I am seriously concerned that the current shortages will become significantly worse in the coming two to three years.
I am greatly disappointed that this nation now has to import such expertise. We stand to benefit a great deal from bringing engineers from other parts of the world, gaining from their experience and learning from their academic and professional courses.
§ Mr. Deputy Speaker
Order. Will the hon. Lady speak to the microphone? The people who transcribe the debate are not in the Room and they rely on the signal from the microphone.
§ Mrs. Curtis-Thomas
The arrival of engineers from other parts of the world is welcome because we learn much from them in terms of their approach to training and to our work. However, we are failing to tackle the crisis in our universities.
The perception of engineering was mentioned earlier. I will touch on this because it relates particularly to women. A significant number of mathematics and science graduates are coming out of universities. Much to my delight, women achieve far better grades than their male counterparts. It might be thought that the most wonderful resource is therefore available to us, but unfortunately, it is not interested in the construction industry. It is a source of personal sadness, because I know that the business offers opportunities for every sort of skill and intellect. I know that the Department of the Environment, Transport and the Regions is tackling the problem. I am pleased that there has been some improvement, but much work remains to be done.
I want to move on to the budget allocated by several different Departments to the public understanding of science. That budget is currently fragmented, so the impact of the collective budget is also fragmented. Many of us would agree that we should make considerable effort to improve the recruitment and retention of people in key United Kingdom industries. The budget, which is intended to encourage the public understanding of science and support the crucial industries, should be realigned to meet the needs of industries that underpin the UK's economic contribution.
Finally, I want to deal with regulation. I received some useful literature from the Construction Federation—two notes, one of which referred to the burden of regulation and excessive red tape. Because I am an engineer, I tend to the objectives, so I did not hesitate to ring up and say, "You referred to burdensome regulation and red tape. Please supply some details." I received a three-page note today, some of which I should like to share with hon. Members.
The concern expressed by the Construction Federation is not unique to this particular engineering discipline, but is shared by all the other disciplines. The regulations are generated by several Departments. The main ones that affect the industry include the Health and 141WH Safety at Work, etc. Act 1974, the Fire Precautions (Places of Work) Regulations 1992, the MOD building regulations and the Disability Discrimination Act 1995.
There is no doubt that regulation is necessary, but there is concern that the co-ordination and impact of regulation is not as effective as it could be. I am heartened by the work of the better regulation unit and the insistence of both the previous and the present Administration that newly drafted regulations should have an accessible structure and a deliverable and enforceable mode of execution. We are not in a perfect position, but significant progress has been made to make the impact of regulation less burdensome.
Finally, I want to congratulate the Department of the Environment, Transport and the Regions on today's debate. I have enjoyed all the contributions. The construction industry is an unsung hero in terms of the excellence and wherewithal of our nation.
§ Mr. Tony Baldry (Banbury)
The hon. Member for Ellesmere Port and Neston (Mr. Miller) referred to vested interests, but there are no vested interests in this Chamber—only registered interests and experience. The hon. Member for Crosby (Mrs. Curtis-Thomas) demonstrated in her contribution how valuable it is to have people in the House who can draw on such genuine experience.
The Register of Members' Interests will show that I have several registered interests relating to the construction industry, though I do not intend to deal with any of them specifically this afternoon. I also have experience at the Bar where I specialise in construction disputes, and as an adjudicator for the Housing Grants, Construction and Regeneration Act 1996.
The debate is the first that I can recall to have been held specifically on the construction industry. Given the size of the industry, it is a good development. I hope that the debate will become annual, and perhaps the Minister will confirm that.
I oppose consensus, but the Minister keeps on making reasonable speeches. That is dangerous because it lulls people into a false sense of security. Ministers are not meant to do that. I sometimes think that I or the shadow Leader of the House, my right hon. Friend the Member for North-West Hampshire (Sir G. Young), might have made such speeches, with a few tweaks, when we were the Ministers responsible for construction, so I suppose that some continuum exists. The Minister did extremely well to avoid standing as a candidate for London mayor, and has done well to remain as the Minister responsible for construction for three years.
It was perfectly fair for the Minister to say that the previous Government published a report on cowboy builders in 1988. That was before I entered the Department, which had moved on to other issues by the time I entered. In fairness, during my tenure, we established a construction sponsorship directorate, we started to have fortnightly meetings with the industry and we initiated the Latham review, which produced the Latham report. However, dealing with cowboy builders was unfinished business.
I fully understand why Ministers are always reluctant to introduce statutory measures, because competing for legislative time is difficult and involves participating in 142WH the requisite Cabinet committees. However, I hope to show that statutory underpinning to a scheme for dealing with cowboy builders could be achieved within the existing law.
The public's perception of the construction industry is often based on their feelings for cowboy builders, and the reports that they read on them. Such builders are the bane of the responsible construction industry. Figures from the Office of Fair Trading show that home repair and maintenance is the fastest-growing source of consumer complaints. Builders receive proportionately more complaints than do car mechanics, estate agents or anyone else. That is a matter for concern. All hon. Members can give examples, from their constituency surgeries or postbags, of people who have been ripped off by cowboy builders, and one or two of those cases have been mentioned this afternoon.
Sadly, the constituents who are cheated are often among the most vulnerable, and can least afford such treatment. The Government's response has been unnecessarily timid. They are moving in the right direction, and the working group to consider the problem of cowboy builders was good news. The group recommended establishing a nationwide register to cover all building work, and the Government accepted its recommendation on the quality mark scheme for construction.
Earlier this year, the Government launched a pilot scheme in Birmingham, and parliamentary written questions could be tabled to tease out the disputed numbers involved in that. In response to my intervention, the Minister said that more than 240 builders in Birmingham had evinced an interest in taking part in the pilot scheme. If that is true, there must have been a sudden rush in the past few days.
I once told someone that I found Building magazine and Construction News compulsive bedtime reading, and that person said that I had a sad life. Undeterred, I read the 4 May edition of Building magazine, which said:Midlands builders snub cowboy pilotFewer than 100 firms have called government hotline to join Birmingham quality mark trial.Clearly, there is dispute over the figures, but the number remains proportionately small whether it is 100 or 240. The reason for that may be the amount of time that a builder must waste in providing proof that he is a competent builder, as described in the application packs. The packs appear to be prohibitive, as they are complicated, and at £500, the registration fee is fairly substantial. I fully appreciate the Minister's point that there is a chicken and egg element about this. However, if one does not achieve sufficient coverage of a quality mark scheme, one is further penalising good builders. It is they who take the time to fill in the registration forms and pay the fee, yet they do not benefit from the quality mark.
As I said when I introduced a ten-minute Bill on the scheme last year, it is more than patent that there will be several difficulties when voluntary schemes are not backed by the force of law. Consumers must come to terms with yet another identification mark, when a plethora already exists in the construction industry.
I was interested in the comments by the hon. Member for Coventry, South (Mr. Cunningham) on the scheme being introduced by Age Concern. It sounds perfectly 143WH worth while and valuable, but will doubtless involve yet another logo or identification mark with which consumers in Coventry and elsewhere must come to terms. It will take some time before a voluntary quality mark achieves the necessary recognition among consumers to ensure that builders who have become sufficiently competent to acquire it are seen as such by consumers. As the Constructors Liaison Group said,for any scheme to be effective consumers must be sure that the company they choose is technically competent. CLG is concerned that the pilot schemes as they are currently instituted do not adequately ensure this.The Birmingham pilot does not seem to be commanding support, and that seems to be because it is impractical for small buildings firms. The greatest difficulties often exist in small firms. The forms issued require information about management systems and procurement systems that may be partially irrelevant to the average one-man band or smaller building company. It is more than plain that the lack of interest may be due in part to the six-part forms. As the chief executive of the Specialist Engineering Contractors Group observed,The amount of time a small builder will have to waste providing proof that he is a competent builder laid out in the application packs is prohibitive…a good builder might feel he's better off with the cowboys.Therefore, it is no surprise that not many firms in the midlands—the Minister's figure is 240, Building magazine says 100—have called the Government to register. Sadly, that lack of interest will, I suspect, mean that the trial is again delayed.
The Birmingham pilot highlights the real need for the Government to reconsider their approach. I firmly believe that the best way to combat cowboy builders is compulsory measures. Time and again, surveys have clearly shown that consumers want a Government-sponsored approach to cowboy builders. Why then do the Government not build on their existing proposals and combat the cowboys through statutory regulation? They could use the Building Act 1984 to extend building regulations and establish a new category of minor works. That would provide a framework for the regulation of builders and would be linked to membership of a professional body or trade association and third-party inspection.
Such an approach would give clear statutory underpinning to any quality mark scheme and would provide a clear incentive to those within the construction industry to achieve quality mark status, which could only be good news for consumers. It would also place the onus on local authorities to police more effectively the activities of unqualified builders. Above all, it would send the clearest possible signal to the consumer about who are, and who are not, quality mark builders. That signal would be far clearer than those offered by the Birmingham pilot.
This is not a new idea. It already enjoys widespread support throughout the construction industry. The Federation of Master Builders has said that it is doubtful whether the voluntary nature of the quality mark scheme will lead to better regulation of the industry and drive out cowboys. It believes thata combination of simple, but formal registration, a mandatory requirement to provide an insurance backed and a reduction in VAT would be the ideal solution to curb rogue traders.144WH The FMB has a point about VAT. In France, VAT has been reduced and so has the black economy. It is not a point that I will pursue, but the essence of its comments remains the same: the Government's proposals will not work as effectively as we should all like.
It seems strange that the Government are not acting in that way because the final report of the working group on combating cowboy builders recommendedthat DETR continue to consider how amendments to the building regulations, including their extension to repair and maintenance sector could be affected to reflect and complement the objectives of the quality mark.Why do they not develop their proposals into a statutory obligation? It seems even stranger when one considers that the Government published a consultation paper only last year on the Building Act 1984 which acknowledged that the development of a quality mark scheme identifying competent building firms should be central to the effort to tackle cowboy builders. The DETR's new consultation paper states:by having such powers at its disposal, the department may be able to introduce new regulations in response to changing national requirements without these becoming an onerous burden either on business, the householder or third party building control.In other words, it readily acknowledges that it would be possible to give statutory underpinning to a quality mark scheme for construction to protect consumers without it placing any particular burden on the construction business, the consumer or local authorities.
The voluntary approach will not be effective. Only time will tell whether my fears are well founded. I simply hope that if it appears that a voluntary scheme is not attracting sufficient registration from builders or sufficient recognition from consumers, the Government will not be too proud to reconsider the issue, particularly when it is clear that the consensus in the construction industry favours mandatory underpinning.
I now wish to raise an entirely different matter. The Government have introduced new design proposals this week. I was interested in the Minister's comments about their origin. He was certainly right that previous Conservative Ministers, not least my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) had particular views on design. Sometimes I thought my right hon. Friend's views were particular to himself, but none the less he sought to encourage good design. The Minister's introduction goes part and parcel with new pressure for builders to intensify the amount of new housing that they put on land and increasing the density from 20 houses to 30 houses an acre. To put that into perspective, it would mean putting 30 houses on an area the size of Banbury United football pitch. It is the sort of density that we see in the back-to-back houses in the opening credits of "Coronation Street"—a programme that we watch when we are not reading Building magazine or Construction News.
The Government have got themselves into this position. They are trying to ensure that sufficient houses are built in the south-east, but they are also conscious of the considerable concern that too much land and green fields will be taken up for housing. Part of their approach to square that circle is to encourage builders to increase their housing density. Is that appropriate? Will there be sufficient space for play, recreation and family life if one encourages that degree of housing density?
145WH Perhaps we should rethink the way in which housing numbers are determined and give local communities a greater say over the speed with which their towns and villages expand. In my constituency, there is considerable and growing resentment about the fact that large numbers of new houses have been imposed on towns such as Banbury and Bicester, which want to stabilise at their current size. I hope that the Government will reconsider the density figures. I cannot believe that building new housing at the specified level of density will be good news for future generations.
Those who work in the construction industry often bemoan the fact that there is insufficient interest in construction. Today's debate demonstrated that there is interest in and considerable knowledge about the industry. I hope that we shall have similar debates in future—that would be good news for the construction industry and those in the House who take a genuine interest in the subject.
§ Angela Smith (Basildon)
I thank those hon. Members who kept their contributions brief so that as many speakers as possible could participate. Rather than repeat points that have already been made, I associate myself with the comments that were made by my hon. Friends the Members for Ellesmere Port and Neston (Mr. Miller) and for Coventry, South (Mr. Cunningham) on cowboy builders and on health and safety at work.
§ Mr. Deputy Speaker
Order. Perhaps I can assist the hon. Lady, who encouraged hon. Members to be brief. There are rules about being near live electrical equipment in thunderstorms.
§ Angela Smith
In that case, perhaps I should be extremely brief. If the electricity supply allows me, I want to discuss the Minister's comment on whole-life value in construction and the way in which the construction industry is key to the delivery of economic and social improvements.
The construction industry does not simply build houses—it also builds homes and communities. We need to examine the impact that housing design and construction have on communities. I welcome the Minister's response to my question earlier this week, when "By Design", which involves urban design, was published. When we discuss the quality of the environment, we often refer to the countryside. However, those of my constituents who live in heavily populated urban areas also need to maintain their quality of life and the quality of their environment. I welcome the approach that the document adopted.
I speak with no expert knowledge, I do not read Building magazine at bedtime and I have no professional qualifications or recent academic qualifications in this area, but many of my views are shared by the experts. The Egan report and the report by the social exclusion unit on neighbourhood renewal touched on relevant matters.
I speak not as a professional but from my experience and that of my constituents. At the age of nine I moved to Basildon, where I was brought up in what was then called council housing, which has been renamed social 146WH housing. When I left home and went to college, many of my peers thought that I was wealthy because I had mentioned the gardener on my parents' estate. It had not occurred to them that I was referring to the gardener on a council estate.
The house in which I grew up and in which my parents still live is typical of the good-quality homes that can be found in my constituency. I still remember my excitement at the age of nine when I moved to Basildon. However, with a little extra cost, imagination and thought, the pitfalls and problems that may affect future generations could have been avoided. I shall highlight some of those problems and some of the solutions that have been found locally.
New towns, by their nature, have high-density housing. Basildon is just 51 years old—a sparsely populated area quickly became a large and busy new town. While the relevant housing policy was generally good, designers occasionally appeared to be experimenting with us. I should have the support of most of my constituents if I proposed a ten-minute Bill that suggested that all house designers and builders should live on the council estates that they create for at least five years after they have designed and built them.
It is easy to see the problems with hindsight. The unprecedented and unpredicted growth in car ownership meant that garage space was quickly filled. People had to park their cars in parking areas a long way from home and car crime increased substantially. At that time, privacy for the individual was greatly prized in house design. As a result, there were no front gardens and houses were created around courtyards with high brick walls. Windows tended to face the back, so those who walked through the estate did not enjoy the security of being observed by people at their windows or in their gardens. In addition, some of the new heating systems proved inadequate.
We have looked at the work that can be done, some of which is mentioned in the "By Design" document. I hope that the final act of regeneration will be to rename the Vange 3/4 estate, although that is merely window dressing. We were concerned about the physical condition of homes. Structural repairs were needed and heating and ventilation were poor.
We have worked with the Rev. David Eaton and St. Chad's church, among others, to identify economic and social problems. There is high unemployment and far lower academic achievement than our children are capable of.
The council has used the estate renewal challenge fund to kick-start partnership with the Anglia housing association and set up the Vange community housing association and its board of volunteers. All the volunteers have put in considerable time and effort, but I shall flag up only a few. Councillor Paul Kirkman, who is chairman of housing, Lyn Beaumont, Julie Estarbrook and Keith Pocket have worked hard to ensure that the project was a success. There was a recent visit by the Archbishop of Canterbury, which was hosted by St. Chad's church, and the Barge pub has also participated. Although it is welcome, I cannot think of many projects where a church and pub have come together for the benefit of the community.
The Minister will be aware of the planning for real concept. In keeping with that concept, Bardfield junior school constructed a scale model of the estate and local 147WH community. We asked residents about the problems that they experience in their environment and homes. As well as matters relating to their homes, they mentioned crime, safety, the environment, traffic, leisure and community facilities, jobs and training, and health. All those issues have impacted on the quality of life on the estate.
We have brought together partners from the various agencies. Lack of time prevents me from going into detail, but by investing in the construction and improvement of homes, we have also rebuilt the community. Similar work has been undertaken on the five links estate by using money from the single regeneration budget, social housing grants and private finance. The part of the estate that has been completed is excellent. Unpopular blocks of flats, underground car parking areas and garages have been demolished. My assistant, Lynda Gordon, and I have visited several people in their new homes and they are delighted. I am very envious of Lynda. She is a former resident of the flats, so she was allowed to knock part of them down with a huge crane. I was not, and I shall never forgive her for that.
Crime and the fear of crime were the main factors that residents identified, but they feel unsafe in their own homes and environments because of poor housing design. Although I have stressed how wonderful the project is, it has tackled only half the estate and the Minister will forgive me for taking this opportunity to mention that we need the SRB6 bid to complete the work. I emphasise that point because my constituents need that money and I hope that he will ask his ministerial colleagues to look favourably on the bid.
Our aim has been to stop regarding the construction of housing and the construction and rebuilding of communities as separate issues. As I have said, when we construct homes, we construct communities. It is not simply a question of the homes themselves, but of how we treat the surrounding environment. Sadly, many years ago, the high street was knocked down and a private shopping centre built. Crime is rife because of the design of the shopping centre, and it is proving difficult to force the private owners to do something about it. Builders and all who are engaged in construction have an obligation to the families who will live in their homes and communities. That goes far beyond ensuring that the fabric of the house is safe—it is an obligation to the fabric of the community.
Government is about quality of life. The Minister mentioned the respect for people initiative in relation to those who work in the industry. I should like that to extend to the people who live in the council estates and housing estates that are provided by those contractors and constructors.
All hon. Members meet people with housing problems. With hindsight, it is easy to say that councils, Government builders and estate designers have created those problems, but allocating blame does not help the situation. What will help is learning the lessons from the mistakes that we have made and ensuring that we do not repeat them.
§ Mr. Stephen O'Brien (Eddisbury)
While I was waiting for the debate to begin, I had a brief interchange with the Minister about the difficulties involved in knowing where to sit in this hemicycle Chamber. I have moved as close to him as I possibly can, but can go no further. I hope that he realises that I have taken centre stage, rather than the middle ground.
Before I entered the House last July, I was involved in the construction sector—especially the building materials side—for 10 years. I worked for Redland plc, an international FTSE 100 company that makes roof tiles, bricks and aggregates in 32 countries. I was also, for five years, chairman of the public and parliamentary affairs committee of the National Council of Building Material Producers, which subsequently joined with the Alliance to become the Construction Products Association. I no longer have any declarable interests in that regard, although I should say that I am an unremunerated member of the parliamentary panel for the Association of Consulting Engineers.
Perhaps I should challenge the hon. Member for Ellesmere Port and Neston (Mr. Miller) as to which of us has laid more bricks.
§ Mr. O'Brien
I have not had as much time as the hon. Gentleman in which to do so. More importantly, he has worked on only one house; I assure him that I have worked on many more roofs. I have to say to the hon. Member for Corby (Mr. Hope) that the parapet referred to in Deuteronomy has now given way to the soffit board.
As has been widely acknowledged during today's debate, the health of our economy is dependent on a vibrant construction industry. The industry is capable of sustained growth. The signs of that—the number of tower cranes that can be seen or the number of track homes that are being built—can be identified in this country or in any other part of the world. The old truth about construction—that it was essentially a local business, in terms of materials or building, with radial markets—has disappeared, principally because of the value-to-weight ratio of building materials.
The construction industry is undeniably vital to the health and prosperity of the nation, because we spend 80 to 90 per cent. of our lives in or on the built environment. That applies to leisure time, home life, work life and transportation and movement. The industry represents 8 per cent. of gross domestic product and a huge number of jobs.
I felt that the Minister demeaned himself during his opening remarks by using the Chancellor's hackneyed phrase "boom and bust", because he has a great deal of experience of the industry—indeed, he and I met many years before I entered the House. The industry has been, and is likely to remain, fundamentally cyclical—although the degree of cyclicality is open to question. That is due primarily to the fact that the marketplace has two main drivers, in addition to the normal laws of supply and demand.
The first is that most of the materials for construction are commodity materials and it is difficult for competitors to make distinctions between their different 149WH materials. A welcome degree of innovation and a great deal of effort are going into research—especially, these days, into the environmental aspects of the market. However, whenever there is a variation in supply and demand in commodity markets, in relation to the people, office space or factory space required, the price will be the factor that collapses. For example, a company making bricks will commission the factory when it sees the curve going up. However, by the time the commission period—usually a minimum of 18 months—has passed, the market could have peaked. That will put more overcapacity into the market and perpetuate the cyclicality. That is inevitable because competitors in a free market—a welcome state of affairs—habitually compete for market share.
The other driver, apart from the normal supply and demand criteria, is the land turn. In the construction industry, the idea exists that it is the building that matters. The building is phenomenally important to our identity, culture and national pride. Much of what we see when we look around us is a definition of what we believe we are. However, the driver for the financial base of construction is the land turn. In this country, particular issues arise from that because of our planning laws and because we are an island with a restricted amount of useable land—not least if we preserve the green belt, as my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) mentioned.
Land has a scarcity value. There is, therefore, an added premium on the land turn. The speed with which value is added to land is often the determining factor in its profitability. As the Minister rightly said, we might argue in favour of increasing the work load within the sector, for the health of the economy. The fact that, in Europe, construction accounts for an average of 12 per cent. of gross domestic product has been mentioned. Even if we take away the rather oddly funded European Union grants, that figure would still be about 11.5 per cent. An example of those grants can be found in Madeira, where tunnels and motorways are being built all over the island. That seems to be the last place one would want such construction, but that is where the European Union has decided to put its money. The United Kingdom's figure is 8 per cent. of GDP. We have a serious deficit in terms of infrastructure, replacement housing and remodelling. That is one of the main issues relating to what is to drive the two main concepts that the built environment represents: our quality of life opportunities and competitiveness.
Politicians have a role to play in bringing value to the construction industry. It is not good enough that people are badly housed or that they do not have sensible work places—an increasingly environmentally sensitive area. Furthermore, it is no good producing commodities if one cannot get them to market—for example, to the docks at Southampton.
I cite the example of the dispute over Twyford down. Irrespective of the politics behind that decision, had we been minded to invest more in the scheme, a solution might have been to put a tunnel under Twyford down. In my opinion, that would have been a better way, although I understand why the decision was taken to build the M3 corridor in the way that it was; it was vital to our competitiveness. There was no dispute that the M3 had to be properly linked to Southampton. It would have been a good idea to spend more money, but the 150WH general tenor of public opinion at the moment is that it is difficult to persuade people that raising taxation, which such a proposal might have entailed, is a good thing. However, that was a trade-off that I want to place on the record.
When we look to the future of the construction industry, the essential commodity is confidence. It drives the necessary planning and investment and although we have mentioned cyclicality and the opportunities of economic growth, certain factors are dragging confidence down. I shall touch briefly on those issues, given that so many have already been well argued and addressed. I applaud the initiatives of the Government and the previous Government in trying to get best practice to demonstrate best value, both in the private sector and in the major client sector—the governmental and quasi-governmental organisations that commission work—but there is a drag on that because the very best practice may mean giving up some competitive advantage. That is one area in which trust must be created. Trust and confidence in the construction industry are necessary if there is to be added value benefit.
Other hon. Members want to speak and time is pressing, so I shall skip my detailed arguments because they have been adequately covered, but I will refer briefly to the calibre of those who go into our industry. The hon. Member for Crosby (Mrs. Curtis-Thomas) made a valid point. I used to be involved with the Cambridge university career service and it was a great disappointment to find that only 4.8 per cent. of Cambridge graduates went into manufacturing industry, primarily the construction industry. My aim was to increase that figure to 10 per cent., but I failed. It got to 9 per cent., but has since fallen back to 7.6 per cent. If we are to encourage high-calibre graduates, including women—who are proving to be very successful in their attainments at graduation—into the industry, we must change the perception that it is a dirty, working-site sort of business. It is a highly sophisticated, innovative, science-based industry.
I urge the Minister, when considering the arguments that have been made today, to do his best to encourage the Chancellor to take a positive step to align the fiscal incentives to all the initiatives that have been suggested today by various hon. Members and by the Minister. Those incentives make a difference and will enable the construction industry to have a secure future.
§ 5.2 pm
§ Dr. Ashok Kumar (Middlesbrough, South and Cleveland, East)
I shall try to be brief because I know that my hon. Friend the Member for Scarborough and Whitby (Mr. Quinn) wants to speak.
The aspect that I want to focus on and to which my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) referred is the image of the construction industry and how young people perceive it. No one in the Chamber has focused on that during our debate, but young people are the future engineers, carpenters, bricklayers, painters and so on. The Construction Industry Training Board recently commissioned a poll from MORI on young people's perception of the construction industry. Young men and women aged 15 to 19 were asked whether they would consider entering 151WH the industry as a career choice. One in five found the idea of a career in construction very or fairly attractive, but the majority—65 per cent.—found it unattractive, with more than half of those finding it very unattractive. The disadvantages, with which more than 40 per cent. of respondents agreed, included long hours, dirty, dangerous, outside work, and hard physical work. That was hardly an encouraging response from an age group that is needed to maintain the industry's productivity. The Minister must consider that because the future of the construction industry needs quality young people.
I want to focus on the Teesside tertiary college in my constituency, which is a good example of a local training provider and tries to narrow the skills gap to which hon. Members have referred. The college offers NVQ courses at various levels in the built environment, painting and decorating, wood occupations, plastering, plumbing and so on. Recently, it has offered taster sessions in construction to local secondary schools to try to raise understanding of construction activities and awareness of opportunities available in the industry.
The Minister referred to the problem of promoting women in the industry, but I am sure that he will be pleased to know that Teesside tertiary college has been making a tremendous effort to promote women and disabled students. More women students are attracted to the construction courses than to other engineering courses, and the college has two deaf students, who are supported by a sign language interpreter.
I also want to draw to the Minister's attention an article in the Daily Express earlier this week about the Oxford women's training scheme, one of a handful of United Kingdom schemes providing training, employment development and support in non-traditional skills for women. Of course it is limited, but it is an achievement, and there should be more such schemes.
Teesside tertiary college has also seen a marked increase in the number of modern apprenticeships and new deal students registering for its courses. From September 2000, school leavers will be offered the opportunity to combine academic A-levels with vocational training in the built environment. Most of those students are self-motivated. While links with employer organisations such as the Engineering Construction Industry Training Board and Building Engineering Services Training are good, employers do not fund training except by providing day release. Consequently, some students find it hard to be motivated to complete a course that their employers do not appear to value and they leave, adding to the semi-skilled work force that causes so many problems.
An encouraging report published by the Minister's Department on Monday, which was written by a working group of the Consultative Committee for Construction Industry Statistics, found that the number of companies providing support went up by 10 per cent. between 1998 and 1999. The Minister should encourage that sort of training in colleges and provide future support.
§ 5.6 pm
§ Mr. Lawrie Quinn (Scarborough and Whitby)
Before I begin, it would be appropriate for me to draw everyone's attention to my interests listed in the Register 152WH of Members' Interests. I am proud to be a chartered civil engineer. I worked in the railway industry for 20 years and I am glad to say that, should I ever need to find alternative employment, my former employer, Railtrack, has offered me first refusal if I want to return to that career, so I have duly listed it. That neatly brings me on to one of the recurring themes of today's debate—the future of the construction industry and a desperate skills shortage.
Recently, the industry's widely read magazine New Civil Engineer reported the lamentable fact that we are now having to recruit engineers from the Indian subcontinent to deliver the prestigious west coast main line infrastructure project. That is the thin end of the wedge. I join the hon. Member for Chipping Barnet (Sir S. Chapman), who displays a considerable knowledge of the construction industry, in urging the Government to look closely at the crisis point at which we are arriving. We need to focus on these skill shortages; we need classic, joined-up government across all Departments to look at construction professionals for the future; and we need to provide people with an opportunity to become flourishing engineers and construction professionals, so that they can contribute to the overseas earnings delivered by construction—20 per cent. of invisibles, as was mentioned earlier. It is an important part of the British economy that we cannot afford to lose.
In the limited time that I have I want to refer to an important conference that will take place in Birmingham next week. I congratulate the Minister on facilitating this debate, because I know from visiting the millennium dome, which is a good example of British engineering and innovation, that an important event is taking place in his community today. When I met the person who is now the mayor of Greenwich borough, I gave her an alibi for the Minister—not that he needed one. I told her that he was involved in an important debate in the House and that I was hoping to catch Madam Speaker's eye. She understood, and I am sure that she would want me to pass on her best wishes. The Minister and the Deputy Prime Minister have supported the Movement for Innovation initiative throughout. Next week, it is holding an important national conference entitled, "Rethinking construction—profiting through innovation".
The considerable time that I have spent in the construction industry has taught me that construction involves teams and partnership and it requires people to work together. It is appropriate that we had our debate in this Chamber—we all want to focus on the future of this vital industry, and there has been a consensus throughout.
Some hon. Members who spoke earlier may not have passed on due credit to the many learned organisations that work in construction, including the Institution of Civil Engineers, to which I belong, and the Institution of Structural Engineers. The chartered surveyors organisations have done much important work. All such groups have been batting for Britain—they helped to ensure that the world's engineering opportunities have been met by British engineers and, recently, they have helped to develop the skills of engineers abroad, especially those in the developing world. I commend all those engineering institutions, which have worked closely with and offered learned expertise to the Republic of China.
153WH We need to focus on world markets and the skills of engineers. I hope that under this Labour Government, engineering and construction will move from its current high point to even better times.
§ Mr. Raynsford
We have had an absolutely excellent debate. My opening speech was followed by those of 12 hon. Members, and if my concluding remarks are added, there will have been 14 speeches in all. Our debate ranged over many subjects, all of which are of considerable importance and relevance to construction.
Our debate was characterised by the expertise of the hon. Members who have spoken—we have had an incredibly well-informed debate—and by the many different perspectives that have been represented. We have benefited from, for example, the professional and technical expertise of my hon. Friend the Member for Scarborough and Whitby (Mr. Quinn) and from the business expertise of the hon. Member for Eddisbury (Mr. O'Brien). We were given some interesting insights into professional backgrounds. My hon. Friend the Member for Crosby (Mrs. Curtis-Thomas) clearly went the wrong way in her training when she studied mechanical rather than civil engineering. I was delighted by her contribution to our debate.
There is a risk of a brick-laying competition between my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) and the hon. Member for Eddisbury, and there may be a bedside-reading competition between the hon. Member for Banbury (Mr. Baldry) and other hon. Members, who may choose to read alternative construction publications at night. We have discussed several immensely serious issues that matter greatly to the industry and which will affect its future.
The hon. Member for Poole (Mr. Syms), the Opposition spokesman, opened the debate in his characteristic way. I became well accustomed to his style during our exchanges on the Transport Bill, when we sat on opposite sides of a Committee Room, which is a more confrontational venue. He displayed the sweet reasonableness that characterises his contributions, not only in this debate, but elsewhere. He highlighted certain specific problems, notably those of people in the construction industry who were not being paid on time. I am happy to be able to say that, because of the recommendations in the Latham report and the action taken to put them into effect in the Housing Grants, Construction and Regeneration Act 1996—introduced by the previous Government, but brought into effect by this Government—we are making inroads into the issue. It is widely accepted that that Act has made things better. However, there are still some problems, and we shall consider those as we review progress on that legislation.
The hon. Gentleman also highlighted the problems with the construction industry scheme. One of the curiosities of the old 714 scheme was that it required people to present their 714 certificates in person. That is not widely known, because virtually no one did so. The problem with the use of fax is that it is difficult to authenticate material sent through electronic communication systems; it is easy to present bogus certificates. Presentation in person should provide an 154WH extra element of security. We are aware of the anxieties that have been voiced about the scheme. As the hon. Gentleman acknowledged, a review is under way. We are looking for ways to simplify the scheme, while preserving the basic principle that we should provide proper safeguards against abuse and tax evasion. We want to create a framework in which the industry will find it easier to operate and which will cut out unnecessary red tape—a theme that came up repeatedly in the debate.
The hon. Member for Eastleigh (Mr. Chidgey) mentioned his experience in civil engineering in the middle east in the 1970s. He described the dominant position of the British construction industry at that time. He was concerned that we should continue to push our interests in that part of the world, as well as elsewhere. I am pleased to be able to put on record—the hon. Gentleman explained courteously that he could not stay for the winding-up speech—that, in the past three years, the Department has led construction trade missions to several countries in that region.
I have led missions to Egypt, Jordan, Lebanon and Turkey, the last leading to a successful joint venture between the British construction industry and the British Government to prepare a master plan for reconstruction in the Yalova area, which is one of the areas most devastated by the terrible earthquake in Turkey last year. That is a practical example of industry and Government working together to help where it is needed overseas, thereby helping the British construction industry to compete more easily and more successfully in those markets. We are committed to that.
My hon. Friend the Member for Coventry, South (Mr. Cunningham) spoke with great knowledge and passion about appalling examples of abuse of vulnerable people by cowboy builders. Nothing angers hon. Members more than stories about elderly people and other vulnerable people being scandalously ripped off by rogues who masquerade as builders and, by doing so, blacken the reputation of the whole construction industry. That is why we are determined to drive forward our programme to tackle the evil of cowboy builders. I shall return to that issue in response to the points raised by the hon. Member for Banbury.
Before I do, I will refer to the contribution made by the hon. Member for Surrey Heath (Mr. Hawkins)—also, unfortunately, unable to stay, as he explained courteously. He rightly highlighted the difficulty of achieving a balance between conflicting interests. He mentioned the importance of high-quality building while preserving the countryside. That is one of the great dilemmas of our time—how can we ensure that we meet the great need for housing in areas under great pressure without damaging or destroying our priceless countryside unnecessarily? We are trying to do that through planning policy guidance that seeks less profligate use of land without downgrading the quality of the environment.
To refer to a point made by the hon. Member for Banbury, the densities of some of the most desirable and most well designed buildings in our cities—for example, Georgian houses in London and some of the much praised new developments such as Poundbury in the west country and even the millennium village in Greenwich in my constituency—are far higher than the 23 per hectare which has been the average for house- 155WH building in the south-east in recent years. If a high-quality environment can be provided at 30 dwellings per hectare, housing needs can be met and further unnecessary land-take avoided. That is a prize that we must achieve. We are discussing not poor-quality, tawdry environments but high-quality design to create environments such as Poundbury, Greenwich, Chatham Maritime and the Georgian terraces in London. We want to provide good environments where people will want to live. That is how we can achieve the balance that the hon. Member for Surrey Heath rightly wants.
My hon. Friend the Member for Ellesmere Port and Neston rightly highlighted problems with employment practices under which self-employment regulations were abused for a variety of reasons that were endemic in the industry. He stressed the importance of a new approach and an end to the old adversarialism in the industry. We are making progress, but there is a long way to go. Above all, we are getting the message across that it is important for the industry to have a well trained, loyal work force instead of depending on individuals who are simply hired on a casual basis. Many of the evils of poor employment practice and poor construction can be attributed to those patterns of the past and we are trying to move away from that.
My hon. Friend also highlighted the safety issue, which is of great concern to him and many other hon. Members, as well as the trade unions, which have played an important part in highlighting practices in the industry that have led to an unacceptable level of accidents, injuries and fatalities. There are currently around 80 fatalities a year, which is too high, and too many people suffer serious health problems and injuries as a result of unsatisfactory working practices.
There is no complacency and we continue to work to improve standards and to ensure that the Construction, Design and Management (Health and Safety) Regulations 1994 are carried forward to improve working practices. I know that the Health and Safety Commission is extremely vigilant in pursuing the matter. The "Working Well Together" initiative is a ground-breaking campaign developed by the Health and Safety Executive's construction industry advisory committee to refocus the industry on the principles of the 1994 CDM regulations and provide impetus for change. We shall continue to maintain a high focus on that.
The hon. Member for Chipping Barnet (Sir S. Chapman) has great experience and knowledge of the construction industry, having worked as an architect and having retained his interest and understanding of the issues relating to architecture, planning and construction. He raised a number of important matters. He questioned why the construction industry has had less political clout that it deserves. I hope that we can begin to change that.
In response to a challenge from the hon. Member for Banbury and in advance of my comments on his speech, I should say that we initiated this debate because we thought that it was right to have it. It is not for me to decide whether we should have such debates annually, but our debate today has been informed and serious and the House would benefit from similar debates. We 156WH would have no difficulty with that, and it might help to raise the political profile of the industry, which would be a thoroughly good thing.
The hon. Member for Chipping Barnet asked about the climate change levy and the aggregates levy, while stressing the importance of sustainability in construction policy. If we want to achieve sustainability, we must discourage profligate use of materials. There is no doubt that economic instruments can play a role in discouraging unnecessary use of certain materials. Whether the aggregates levy is the right method is a matter that we shall continue to debate for some time, but the voluntary package put together by the Quarry Products Association has failed in a number of respects to meet the objectives essential to an effective voluntary scheme.
More seriously, many small quarrying companies declined to participate, and made it clear that they totally opposed the voluntary package. In my view, one cannot have a voluntary package to which a significant number of players in the industry—albeit small ones—have not signed up. That creates competition distortions between those who are prepared to pay a voluntary levy and those who are not. That factor led my right hon. Friend the Chancellor to decide that a voluntary scheme was not feasible, and that it was necessary to move towards an aggregates levy.
My hon. Friend the Member for Crosby rightly highlighted the problems associated with excess regulation, and the important work of the better regulation task force. I am pleased to say that we are working on those themes in a number of areas, including building regulations and certain aspects of planning policy. We are trying to establish proper safeguards to ensure compliance with requirements that are essential to safety and good performance. However, we do not intend to produce unnecessary red tape or impose unreasonable burdens on industry. There is a balance to be struck, but we believe that there is further scope for improvement in the regulatory framework, enabling us to achieve what is necessary while avoiding the imposition of an unreasonable burden on business.
I introduce comments on the speech of the hon. Member for Banbury with such remarks because he is an advocate of a statutory scheme to deal with cowboy builders. I put it to him that trying to regulate an industry consisting of 160,000 separate companies gives rise to problems of red tape. There is a tension between statutory regulation and the argument—which has been voiced widely in this Chamber—for reducing the regulatory burden. I say to the hon. Gentleman, as I have said to others, that if it became clear that a voluntary scheme could not work, we would not hesitate to look at the matter again. There would be no question of pride about our previous commitment to a voluntary scheme; we would be prepared to review the need for a statutory scheme.
Nevertheless, the Merricks committee recommended a voluntary scheme and that is what we are pursuing. We believe that it can work, and the evidence from Birmingham is encouraging. I have great respect for Building, but the hon. Gentleman should not believe everything that he reads in it. The figure of 250 is ours, and I hope that he will read my letter, which will correct 157WH the figures that he quoted from the most recent issue. We believe that the voluntary approach should be pursued, and we are keen to do so.
My hon. Friend the Member for Basildon (Angela Smith) gave a warm welcome to the "By Design" document that was published at the beginning of this week, and highlighted some specific issues in her constituency, where planning-for-real exercises can put right some past mistakes and create a better environment. She used that as an ingenious way to promote a single regeneration budget bid, but she will understand that I cannot comment on that.
The hon. Member for Eddisbury, who has great expertise in the construction field, made a number of useful points. He highlighted the conflict between land use, planning issues, quality of life and competitiveness, and used Twyford down as an example, although many others could be given. I agree wholeheartedly that those are difficult challenges which must be met intelligently. We must strike the best possible balance between 158WH competing claims. He emphasised the importance of trust and confidence to the future of the industry, and I wholeheartedly agree.
My hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) talked about the importance of attracting young people into the industry and the negative messages that are sent by poor site conditions and other discouraging factors. We must do more to encourage an active interest in the industry, so that more young people with talent and skills will enter it.
My hon. Friend the Member for Scarborough and Whitby, who also has great expertise in this field, talked about the importance of construction as a team game. He is right, and this afternoon's debate has been a team exercise. It has also been a credit to Parliament and the industry—the future success of which we want to promote.
§ Question put and agreed to.
§ Adjourned accordingly at half-past Five o'clock.