Why should British construction firms worry about what's going on in Brussels?
The European Union is definitely more important to the industry than people realise. We've always been a heavily regulated industry, and 80% of regulation now starts in Europe – 80%! So it's vital that we play our part in Brussels. We're not trying to stop the legislation, our aim is ensuring that the regulations are appropriate for us in Britain. People don't pay attention to European legislation because it's slow-moving and it's not sexy, but it affects their lives.
Can you give an example?
Take the Working Time Directive. By restricting the hours you can work it makes it harder to manage a business, especially with the shortage of skilled workers in the construction industry.
Why are British contractors under-represented in Brussels at the moment?
They do things differently on the Continent. The French, Germans, Belgians and so on are thoroughly united because of their war history. In Britain we've still got a degree of island mentality, although it is slowly changing. But so far, the construction industries of Germany and France have had more input into European legislation because they are more active in their lobbying.
How are European directives created?
The process is based on dialogue that requires agreement between various parties, unlike our system, which is based on first-past-the-post elections. The directive starts with the European Commission – in theory, anybody can suggest a directive to them, but it usually evolves through pressure from national governments.
First, there's a consultation process, which has to include certain designated partners – for example, FIEC is the designated partner for construction employers. Then the directive goes to the European parliament, which can amend it – it goes backwards and forwards between the parliament and the Commission until they both agree, then the Commission ratifies it at the end.
What's happening with the procurement directive that threatened PFI?
That's an example of successful British intervention in Brussels. The directive has been in the works for six years, and at one point it would have made PFIs and PPPs almost impossible. You would have only been allowed to select a preferred bidder at a much later stage, and it would have been too expensive in terms of people and time. But thanks to a strong effort through FIEC, the UK persuaded the commission to change the wording of the directive to something more appropriate for PFI.
What about reverse auctions online?
At one point, we were worried that they were going to be mandatory, which would have been terrible. In the final directive, although they will be allowed they won't be mandatory – we would have preferred them to be banned altogether. The procurement directive will probably come into force this autumn, and there will be a two-year period for national governments to incorporate it into their national laws.
Many European countries have tried to reduce VAT on domestic repairs. Would you like to see something similar in the UK?
Absolutely. This is an example of how FIEC gives us the opportunity to learn from our European colleagues. The experiments in other countries have been tax-neutral, because what you lose in VAT you make up for in extra income tax as builders are discouraged from working for cash in hand in the black economy. Construction minister Brian Wilson has been quite positive and encouraging to us, going about as far as a minister can go when the Treasury is saying no.
What difference will it make when new countries join the EU next year?
The free flow of people across Europe will be a very important issue. For example, it costs more to employ someone in Germany than it does in Portugal, but those extra taxes fund better public services. But if you're a Portuguese contractor and you send someone to Germany, they benefit from the better services there without paying for them – it's known as "social dumping". The differences in public service levels are even greater in the new member states. On the other hand, the fact that eastern European workers will be free to come and work legally on British sites will help alleviate the skills shortage.
What other issues are under the European spotlight at the moment?
There's a general move towards looking at the health of our workforce as well as their safety. The amount of chrome in cement is becoming quite contentious. There's also some asbestos legislation coming up.
Isn't there a restriction on driving vibrating vehicles in the offing?
There is a directive in progress that limits the number of hours per day you can spend on vehicles affected by vibrations. At one point the limits were ludicrous, so you got headlines like "Two hours a day on a dumper truck". The parliament threw out the limit we'd originally agreed but then the commission didn't accept parliament's version. The final compromise was quite sensible, which is why you haven't heard much about it in the tabloids recently. It's an example of how we've reintroduced common sense back into the European process.
EU law: What’s coming out of BrusselsEnergy efficiency
A directive ratified last year requires large buildings to display a certificate, renewed every five years, showing its energy efficiency. The knock-on effect in Britain is tougher Part L regs. Procurement
From November, a new directive will impose a common procurement vocabulary on OJEU (formerly OJEC) notices. British contractors headed off a different version of the directive that would have made online reverse auction bidding compulsory and threatened PFIs. Reduced VAT on repair work
Trials of reduced VAT rates for certain types of construction work, such as domestic repairs, have been carried out in France, Italy, Spain, Holland, Portugal and Belgium. Contractors are hoping the success of these experiments will persuade Britain to follow suit. CE marking standard
Plans to impose a single set of standards for construction materials using the European CE mark system are being held up by opposition from Germany, which wants its own standards to become the universal benchmark. Working Time Directive
The maximum of 48 hours’ work per week will exacerbate construction’s labour shortage. Truck drivers will also be in short supply, which means increased delivery costs will add £356m to the bill for construction materials. The Social Chapter
Now that Britain is fully signed up to the EU’s Social Chapter, British employers are obliged to offer European-style workers’ rights. Since last October, contract workers have enjoyed the same rights as their salaried colleagues; last month, statutory maternity leave rose from 18 to 26 weeks and paid paternity leave was put on the statute books.