Industry Issues

GOVERNMENT LEGISLATION

Queen's Speech:
Crossrail Bill
Olympics Bill

Other areas of interest:
Secure and Sustainable Buildings Act
Railways Bill
Sustainable Construction
Climate Change Levy

EUROPEAN LEGISLATION

Review of the Working Time Directive and the UK's Opt Out
Construction Products directive
EU Chemicals Policy
Integrated Product Policy
EU emissions trading scheme
Other areas of interest

Government Legislation

Queen's Speech:

The following pieces of legislation are of interest to the Association's members:

Crossrail Bill

The Association welcomes the announcement of the Government's bill to authorise the construction of Crossrail. It remains concerned however that the Government has not given any clear signal as to how Crossrail will be funded. The total cost of the project is now estimated to be in excess of £10 billion.

Olympics Bill

Winning the Games is a tremendous boost to the capital's economy and will provide a heritage of improved sports and transport facilities. The London bid set out an impressive £10 billion programme for sports stadia, accommodation and infrastructure investment, with the construction bill alone expected to be £2.5 billion. Building work has, in fact, already started on two key venues - the £70 million Aquatics Centre and the £30 million Velopark.

The Olympic Village itself will make use of an already planned £650 million public-private regeneration scheme and will be converted from Olympic use to become a mixed-use community of 3,600 new apartments and town houses, which will deliver badly needed housing to the east of London.

The new challenge for the Olympic bid team and the construction industry is to ensure the timely and cost effective delivery of the promised facilities. Construction products manufacturers are ready to build on the Egan agenda and work together in a truly integrated way with the client, designers and contractors to realise this huge programme of much needed investment and regeneration in our Capital City.

Other areas of interest

Sustainable Construction

The Sustainable Buildings Task Group's report was published in May 2004 with a list of recommendations on how the industry can be improved to meet future needs. One of the recommendations specific to the construction products industry included the introduction of a Code for Sustainable Buildings where clients, (focusing primarily on the public sector) will look to procure to achieve a performance which is slightly higher than building regulations. There are also recommendations to improve energy efficiency and water efficiency in homes as well as recommendations for material efficiency, waste minimisation and durability & serviceability requirements. A senior steering group has been set up of which the Association is a member and work is ongoing within ODPM to ensure the Code is finalised before roll-out by March 2006.

Further details are available from the link below:

www.dti.gov.uk - Sustainable Construction

Climate Change Levy

The Construction Products Association recognises the importance of the Government responding to the issue of climate change and our Kyoto obligations. We, however, strongly oppose the way the Climate Change Levy has been set up because:

• It is not revenue neutral for manufacturing industry

• The levy is not recycled through measures to encourage greater energy efficiency, but instead through a blanket reduction in NICs (the value of which has been taken away.

• The basis which determines which sector/companies are eligible to enter into negotiated agreements is totally unsatisfactory and unfair.

• The procedures associated with establishing and monitoring negotiated agreements is a major administrative burden, particularly for smaller companies.The Association has made representations to Treasury and HMC&E on its review in the distortions that currently exist due to the eligibility criteria employed for the Climate Change Agreements.

Energy intensity of installations is being considered to allow entry of those installations currently outside the CCA scope due to the 50MW.The Association has been arguing for a widening of the Climate Change Agreements (CCA) to all manufacturers. The Treasury completed exploring options for redefining the criteria for energy intensive sectors to bring in other energy intensive sectors currently outside the scope for climate change negotiated agreements.

Following a consultation on expanding the eligibility criteria for Climate Change Agreements on the basis of Energy Intensity Threshold Values, in his Budget statement, the Chancellor set a threshold value of 12% of production value, with a 3% lower threshold for industries which can demonstrate particular issues of global competitiveness.

European Union Legislation

Review of the Working Time Directive and the UK's Opt-out

At a meeting of Employment Ministers no agreement was reached on the Commission's revised proposal following the vote in the European Parliament to dispense with the UK's opt-out. This means that the UK's opt-out remains. Amongst those supporting retention of the opt-out were Ministers from Germany, Poland, Austria, Hungary, Malta, and Cyprus. Opposition to the opt-out was led by France and included Belgium, Sweden, Spain, Greece, Finland, Lithuania and Hungary. The issue now returns to Parliament and the debate is likely to continue into 2006.

The Association welcomes the stand made by the UK Government in Council and hopes that it is able to retain the support of the current blocking minority throughout the protracted discussions which inevitably lay ahead.

Construction Products Directive

Over the next few years some 400 new harmonised European Standards for construction products will be released, replacing National Standards. This is part of the Construction Products Directive, designed to allow a single market in these products.

A range of products now have harmonised standards and can be CE marked. More are being added as standards are completed. The process is currently being challenged by the actions of a number of delegations, particularly Germany, which state that the standards do not meet all their regulatory requirements. The UK position, supported by the Association, is that Member States should have advised CEN of their requirements at the beginning of the standardization process, not wait until the end and then veto standards. There remain a number of standards where Member States are maintaining national requirements, which is illegal. Where companies are willing to make formal complaints, the Association will support them.

The Commission is now working on a review and possible revision of the CPD. Consultants are carrying out a study on the CPD and its effect. Any changes would come into effect around 2008.

EU Chemicals Policy

The European Council & Parliament have begun debating the REACH (Registration, Evaluation and Authorisation of chemical substances) proposal and in particular, the joint UK & Hungary joint proposal for 'one-substance, one-registration'. The Regulations will have an impact on construction product manufacturers both as producers and as downstream users since the scope of the regulations will include a wide range of substances including cement & steel. The Association supports the UK-Hungary proposal but has some concerns with issues regarding commercial confidentiality, mandatory consortia and cost-sharing which have not yet been resolved. The Association is keen to see the scope narrowed to avoid duplication with other existing Directives, a risk rather than volume based approach used for registration, and exclusion of wastes from the scope of the proposal.

Integrated Product Policy

The Commission has adopted its long-awaited Communication on Integrated Product Policy (IPP) favouring a voluntary approach and multiple stakeholders' consultation over concrete legislative measures. The Communication outlines a two-phased strategy to implement IPP aiming at:

• Improving the coherence of existing tools that cover many different products

• Focusing on those products that have the greatest potential for environmental improvement

The Commission will in parallel focus its action on some products that are environmentally damaging to develop a methodology for identifying these products in co-operation with stakeholders. The Commission will issue a practical handbook on best practice with Life-Cycle Assessment (LCA) and a discussion document on the need for product design obligations on producers in 2005. The Association, through its European organisation, is liaising directly with the Commission to develop this Policy

EU Emissions trading scheme

The Scheme commenced in January 2005. The Government's National Allocation Plan which was submitted in November 2004 was rejected by the Commission and therefore the Government has had to set allocations based on its draft April 2004 Plan which was based on 20 million tonnes less of allowances.

The UK Government has however launched legal proceedings against the Commission for rejecting its November 2004 Plan.

In addition, industries have faced considerable hikes in gas and electricity prices of up to 40% in recent months which have added to their concerns of being competitively disadvantaged in comparison with their European counterparts. The Association is continuing to press Government to ensure the second phase discussions are started as early as possible and that harmonisation of definitions are adopted across Member States. Government must also ensure that it does not set tougher targets than needed under the Kyoto agreement to ensure a level playing field under this Scheme.

Other areas of interest:

Packaging Waste

Waste Electrical and Electronic Equipment Directive

Environmental Liability

Water Framework Directive

Energy Policy Review

Energy Performance in Buildings

Physical Agents Directive

For information on all of the European legislation which the Association is currently monitoring please download a copy of our latest edition of European Notes.