HOUSE OF COMMONS
Second Standing Committee on Statutory Instruments, &c.
FURNITURE AND FURNISHINGS (FIRE) (SAFETY) (AMENDMENT) REGULATIONS 1993
Thursday 13 May 1993
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The Committee consisted of the following Members:
Chairman: Mr. Joe Benton
Aspinwall, Mr. Jack (Wansdyke)
Banks, Mr. Matthew (Southport)
Beresford, Sir Paul (Croydon, Central)
Booth, Mr. Hartley (Finchley)
Budgen, Mr. Nicholas (Wolverhampton, South-West)
Campbell, Mr. Ronnie (Blyth Valley)
Congdon, Mr. David (Croydon, North-East)
Duncan Smith, Mr. Iain (Chingford)
Fabricant, Mr. Michael (Mid-Staffordshire)
Hall, Mr. Mike (Warrington, South)
Jones, Mr. Ieuan Wyn (Ynys Môn)
Loyden, Mr. Eddie (Liverpool, Garston)
Mitchell, Mr. Andrew (Gedling)
Mudie, Mr. George (Leeds, East)
Needham, Mr. Richard (Minister for Trade)
Randall, Mr. Stuart (Kingston upon Hull, West)
Smith, Mr. Llew (Blaenau Gwent)
Wicks, Mr. Malcolm (Croydon, North-West)
Dr. P. C. Seaward, Committee Clerk2 3 Second Standing Committee on Statutory Instruments, &c. Thursday 13 May 1993
[MR. JOE BENTON in the Chair]
The Minister for Trade (Mr. Richard Needham): I beg to move, hat the Committee has considered the Furniture and Furnishings (Fire) (Safety) (Amendment) Regulations 1993. (S.I. 1993, No. 207). The Committee will be aware of the unacceptably high death rate from house fires that have started in upholstered furniture. In 1987, there were more than 3,800 such fires, which resulted in 173 deaths and just under 1,400 people injured. In response, my Department made the Furniture and Furnishings (Fire) (Safety) Regulations 1988, which lay down fire resistance requirements relating to the supply of domestic upholstered furniture. I am glad to say that, since 1988, there have been welcome reductions in the number of deaths. The 1988 regulations provided a phase-in period of five years up to March 1993 for second-hand furniture. Unfortunately, when the regulations were made, it was not clear that they would apply to furniture in holiday homes, furnished flats and bed-sits. That inclusion was clarified in 1991 when the holiday homes sector was advised accordingly. We subsequently decided to consult the holiday homes industry and other interested parties with a view to extending the phase-in period. Our initial suggestion was to extend it to 1 March 1994. That consultation showed that the industry considered that it needed a longer phase-in. Some suggested a delay until 2003 and others, such as the English tourist board, considered 1999 a more appropriate date. I have considered those arguments most carefully. There is much disagreement over the cost of implementing the regulations in the shorter time frame. No doubt hon. Members will wish to comment on that. The Committee will, I hope, agree that the safety of the public must be of paramount importance when considering the introduction of the regulations. The number of deaths and accidents is still far too high. In 1991, there were 117 deaths and 1,500 injuries. We have agreed to extend the phase-in to 31 December 1996. However, in the light of those figures, lives should not continue to be damaged and destroyed for a day longer than necessary.
Mr. Cynog Dafis (Ceredigion and Pembroke, North): The regulations were issued for consultation 4 on 27 July 1992. It was, I understand, at that time that it became known to the trade that the regulations were to apply to the letting of furnished accommodation for residential and to holiday homes let as part of a commercial enterprise. My interest centres on the latter aspect, holiday homes. The regulations caused great concern as soon as their import was understood by the industry. The Wales tourist board consulted tourist associations and businesses. "who have expressed the greatest alarm about the likely impact of the proposed regulations". The tourist board said: "The impact on the Welsh tourist industry is likely to be so serious if the regulations proceed as drafted" that a meeting should be called between Ministers at the Welsh Office and the Department of Trade and Industry to discuss the matter that was regarded with such alarm. I refer specifically to the Welsh situation and to my constituency because they directly concern me and I know something about them. However, I am sure that my account will illustrate the anxiety that I understand is widespread throughout the United Kingdom. It is difficult to overestimate the importance of tourism in the rural economy of west Wales. As agriculture undergoes radical structural changes and difficulties, tourism is advocated as a way of diversifying. Self-catering units, involving, for example, the conversion of redundant buildings as well as newly-built ones, are a significant component of that. Self-catering units provide one element in a livelihood that draws income from many different sources, which is typical of a rural economy. Such sources may include farming, agricultural contracting, bed-and-breakfast accommodation, a shop, a post office and a garage. The loss of income from one of those sources could imperil a whole family business. The survival of a family farm, for example, might depend on income from the self-catering units. It is estimated that there are about 100,000 self-catering holiday units in the United Kingdom, of which between 10,000 and 13,000 are in Wales, concentrated particularly in the west, in constituencies such as mine. Sixty per cent. of those units are in groups of fewer than 10 units, which confirms that they constitute one element in a broader family livelihood. I gather that the average turnover per unit is about £3,000. Profit margins are slim and, in addition, the recession has meant reduced occupancy rates. Bearing that in mind, the cost of replacing furniture within the time scale required by the regulations—even as they are modified—will be crippling for many people in the industry. The Wales tourist board gives figures obtained from MFI, the furniture suppliers, on special offer of, for example, £350 for a single bed, £520 for a double bed and a minimum of £1,000 for a three-piece suite. That 5 is a total of £1,870 as the replacement cost for a three-person unit. As the average unit probably accommodates between five and six people, the industry is being conservative in its estimate that the actual replacement cost per unit is between £1,500 to £2,000. It is likely to be more in many cases, and considerably more in some. With an average annual turnover of £3,000 and slim profit margins, compliance will be a great problem. There is little doubt that businesses will cease operating and that some will fail. Others may go unofficial and operate without complying. That raises anxiety about insurance cover in the event of a fire and about health and safety. I agree with the Minister that all responsible people recognise the need for safety and to minimise the risk of injury or loss of life, and that regulations are appropriate instruments to that effect. Howeer, it is worth bearing in mind that regulations were introduced because of the great loss of life resulting from fires starting in upholstered furniture, predominantly in conventional residential accommodation. No figures are available for holiday self-catering units, but I imagine that they would be radically different from those for conventional residential accommodation. The Government accept that, in achieving improvements, costs must be considered. For example, caravans built before 1 March 1990 are exempt because, as Baroness Denton wrote in a letter to me, "the cost of upgrading upholstery in them would exceed the value of the caravan." Therefore, cost is a consideration and it would be unreasonable if the cost of complying with the regulations crippled the industry whose standards those regulations were intended to enhance. The Wales tourist board reckons that the cost to the industry for the United Kingdom—I am sure that the English tourist board agrees—is likely to be about £200 million, or £225 million if interest payments are included, as they should be. There is considerable scepticism about whether banks would be prepared to advance loans for such replacements. The Department of Trade and Industry claims that, on the basis of £850 per unit, the total cost would be only £85 million. That is a very different estimate. By further calculation, the figure is broken down to give a cost to the operator of £5 per property per season, or 20p per week. That is the crux of the matter and was a mystery to everyone until an explanation was offered by Miss Williams-McGhee of the deregulation unit in the Department of Trade and Industry. In a letter of 25 February 1993, she wrote: "The total cost of bringing forward furniture replacements was estimated at £5 million; this should not be confused"— she is quite right about this— "with the total cost of purchase which would have been undertaken anyway. Over a ten year replacement period with 100,000 holiday homes this averages out at £5 per property per year." However, I know of no explanation of how the figure of £5 million was arrived at. I claim that it is based on a 6 serious underestimate of £850 a unit. There is something peculiar about that. I do not propose to enter into a debate about accounting procedure. Those who know me will realise that I would be very rash to do that. However, the figures of £5 a season and 20p a week are so remote from reality and the actual cost of replacing furniture as to be seriously misleading and unrelated to common sense. There is something wrong with a process of calculation that arrives at such a result. The replaced furniture is unsaleable because of the regulations. As from March 1993, the furniture cannot be sold. High-quality furniture, which has been urged on the industry by the tourists boards to raise standards, has a lifetime of well over 10 years. Those operators who invested in high-quality furniture before 1 March 1990, and there are many of them, will suffer the most. They will be faced with considerable compliance costs. The holiday home industry is very professional and its emphasis is on raising standards at considerable cost. That leads to questions about the validity of the cost compliance assessment. Ms Lynda Spiker of the Department of Trade and Industry consumer safety unit, in a letter to one of my constituents, wrote: "As holiday homes are known to be available for 2, 4 or 6 persons, we used an average of 4 persons, and estimated the furniture cost at £850 for such an unit." As I have suggested, the average unit is probably for somewhere between five or six persons so, on that basis, the figure would be more than £850. However, perhaps, that is a marginal consideration. The letter from Miss Williams-McGhee of the deregulation unit, to which I referred earlier, is more revealing. She says: "My colleagues responsible for the preparation of the CCA advise that they appreciate the lack of clarity of the CCA, but that the calculations within it were based on the best information available to them at the time. Very limited information was made available during the consultation period to suggest the assumptions were off the mark". Ms Spiker's letter complains: "None of the organisations who responded attempted to provide a cost figure for their membership as a whole nor did they provide any information on the proportion of their existing stock of furniture that would need to be replaced". The assumption in that sentence is that tourist organisations should be responsible for providing the kind of detailed information suggested, but that is an unreasonable expectation. In any case, they were not asked to provide that information. What the organisations certainly did was point out that they regarded the DTI's assessment of costs as a gross underestimate. The consumer safety unit should obtain the necessary detailed information. It is clear that the cost compliance assessment was based on inadequate information. That seems to be admitted in the correspondence. I have read some 7 sections of the guide to compliance cost assessment published by the deregulation unit of the DTI. Section 1, paragraph 9 states: "When consultation on regulatory proposals takes place, a preliminary assessment by officials of the likely compliance cost to business should be included. This and any subsequent drafts should be cleared with the Departmental Deregulation Unit and their comments taken into account. Business should be encouraged to comment critically on the assessment so the final assessment is as accurate as possible." It is worth asking whether the various drafts were cleared with the deregulation unit and whether its comments were taken into account. The same guide provides a formula based on a typical business in section 2, paragraph 10. Paragraphs 13 and 14 emphasise the need to consider the effect on less typical businesses. This is where we get near to the crux of the matter. Paragraph 13 states: "If depicting a single 'typical business' gives a misleading impression, show the impact on different notional businesses likely to be affected. This is particularly important where the impact is disproportionately greater on part of the sector (eg small firms). Careful thought should be given to the timing of proposals as costs may be influenced by when legislation is introduced or the length of the transitional period." Paragraph 14 states: "Give a brief 'pen picture' of each of the types of 'typical' business likely to be affected and for which an estimate of costs has been made. Give an indication of the numbers of companies or establishments each represents." It is worth asking whether that was done. In relation to the various kinds of typical business, size is one consideration. Large units can obtain more favourable terms for replacement furniture. Even more important is the enormous variation in the cost of compliance according to how new the furniture in any unit may be. Those points about the cost compliance assessment process were made in letters dated 15 March from my constituent, Mr. Ray Cori to Miss Williams-McGhee and Ms Spiker. Hitherto, no reply has been received and I should be interested to know why. The industry is glad that a concession was eventually made delaying implementation of the regulations until 1 January 1996. That implies that the original cost compliance assessment was inadequate. There would have been no need for such a concession if the real costs were £5 per season or 20p per week. However, it is not known on what basis the new date was decided. There does not seem to have been a recalculation, so the concession appears somewhat arbitrary. It still means severe costs for the industry in the next three-and-a-half years. The danger remains that people will be forced out of business, causing significant economic damage and/or they will leave the policed official sector which is covered by tourist board visits under, for instance, the verification and grading scheme. That would mean that compliance would not have been secured anyway, which has implications for insurance cover. 8 The trade's request for a 10-year compliance period seems to be perfectly reasonable. The request of the Wales tourist board and the English tourist board for an extension to 1999 seems even more reasonable. In the meantime, a requirement to provide fire extinguishers, fire blankets and smoke detectors would be likely to secure near-universal compliance and would therefore be more likely to save lives. That, of course, must be the central consideration. The general impression is that hotels and guest houses are subject to the same requirement, but, as I understand it, they are not. The Home Office guide to fire safety management in hotels and boarding houses, which was circulated fairly recently, states that when refurbishment or replacement of furniture and furnishings, beds and so on takes place, managers ensure that the materials chosen conform to the relevant British standard. Bearing all those points in mind, I hope that the Minister will consider offering a further concession and that the lessons of the case that I described will be learnt and used in the introduction of regulations and the conduct of cost compliance assessments in future.
Mr. Nigel Griffiths (Edinburgh, South): For everyone, inside and outside the House of Commons, public safety is paramount. The Minister told us that the industry was first informed about the regulations in 1991. Full consultation took place in 1992. A deadline of March 1994, which many people considered reasonable, was set. However, after considering representations from the trade for an extension to 2003, which is hard to justify, and from the English tourist board for an extension to 1999, the Government have extended their deadline from 1994 to 1996. That gives the industry three years to bring itself into line. The Government have been criticised by hon. Members on both sides of the House for extending a deadline in a matter that affects public safety. However, I do not wish to divide the Committee. I pay tribute to my hon. Friend the Member for Makerfield (Mr. McCartney) and other hon. Members who fought hard for new regulations on foam-filled furniture and who have done so much to influence opinion in Britain and in Europe. The hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) concentrated on the financial consequences of the regulations. He used the unfortunate phrase "crippling the industry". We are worried about the crippling of individuals in fires. For what better purpose could rents that are collected from holiday cottages be used than to ensure the safety of holiday-makers? The trade should focus more on safety instead of pleading for further delays in implementing the regulations. The industry should be satisfied with the clear two-year extension, and it should work towards meeting that deadline. Many of us are worried about any delay that could threaten public safety. None of us wishes to have on our consciences the deaths or horrific injuries that may occur if foam-filled furniture catches 9 fire between 1994 and 1996. That will weigh heavily on us if the Committee is divided on the matter.
Mr. Malcolm Wicks (Croydon, North-West): I too am worried about the delay. It affects not only holiday lets but rented furnished accommodation, which can be especially at risk. Some rented furnished accommodation is at the luxury end of the market, where foam-filled furniture is perhaps not so prevalent. At the luxury end, such accommodation may include smoke alarms and heating systems that are less likely to cause fires. However, at the other end of the market, there is rented furnished accommodation in multiple-occupancy dwellings, where there may not be adequate fire escapes. Such accommodation may include heating systems that are most likely to cause fires, for example, paraffin heaters and free-standing gas fires. Often, homeless families are placed in such accommodation by local authorities. Students, including those in Wales, tend to live in such accommodation. I had connections with Bangor university, where many students live in accommodation that is at risk. For all those reasons we should be careful about agreeing to further delay. It is difficult to give accurate statistics but, given the evidence of the number of deaths and injuries associated with furniture of this type, there could be about 100 injuries—perhaps significantly more—in the coming few years, and if we allow further delay, some of those people will die. I was surprised by a quotation supplied by the Consumers Association, which I telephoned yesterday. It quoted a leading fire officer who once said: "Firemen the length and breadth of the UK, particularly in our big cities, are sick to their stomachs of going into blackened bedrooms and bringing out the charred bodies of men, women and especially children." I am not being emotional or unduly alarmist when I say that if we delay until the end of 1996, presumably some people in holiday lets and furnished accommodation will die in fires associated with furnishings of this type. It is possible that some lives will be lost even if the regulations come into force now, or a year or two earlier than the Government intended originally. That is the serious factor. I have never understood why the vested interests who write to Members of Parliament on such occasions—in this instance, the English tourist board and others—always represent the industry but never the tourists. Who speaks for the tourists on these matters? I do not understand why the leisure and tourist industries always attack improving standards. Surely it would be good news for English and Welsh tourism if people who let accommodation are confident that it is of the highest standard and that tourists and their families are protected against fire. I note that no one has proposed that, if we agree to delay until the end of 1996, a feature of the regulations 10 must be that until that time we must ensure that all furnished accommodation and holiday lets have smoke alarms. They are readily available and are not expensive. If we are to agree to the delay, why has that condition been included in the regulations? I am worried about delaying because there will be many injuries from fire in some of the more risky accommodation—I emphasise that—and there may be fatalities. We should ponder the matter more carefully.
Mr. Needham: We have had an interesting and worthwhile dash round the course, with both sides of the argument being aired. Who am I not to stand in the middle? The hon. Members for Croydon, North-West (Mr. Wicks) and for Edinburgh, South (Mr. Griffiths) raised serious points about the timing of the regulations. It is true that if we permit unreasonable delay we put lives and health at risk. That is a matter of considerable importance. I appreciate the point about families in multi-let households made by the hon. Member for Croydon, North-West. However, the purpose of the 1988 regulations was to regulate the fire safety of upholstered furniture at the source of supply. It so happens that a holiday let is a source of supply, which was not immediately clear when the legislation was introduced. The final destination of the furniture will generally not be known to those who sell it. Therefore the basis of the regulations was to ensure that dangerous furniture could not be sold. If the hon. Gentleman wishes to take further the matter of fire safety in houses of multiple occupation, he must do it by means other than the regulations. Local authorities have powers under the Local Government and Housing Act 1989 to require houses of multiple occupation to provide adequate means of escape. If adequate means of escape do not exist, for whatever reason, that is the responsibility of the local authority. The Department of the Environment has issued a guidance circular about fire standards in homes of multiple occupation. That is the route that the hon. Gentleman should take on that issue. In answer to the hon. Member for Ceredigion and Pembroke, North—I have done even worse in my pronunciation of the hon. Gentleman's constituency than the hon. Member for Edinburgh, South whose Celtic knowledge brings him closer to Wales than my Irish roots do me—I would say that we have heard quoted this morning figures of £220 million, £5 million and £5. We have a pretty good span of numbers from which to determine where the truth lies. It is rather more sensible to examine the figures on which we can agree. I am as confused about the compliance cost assessment figures as the hon. Gentleman is and I do not wish to use them. Let us consider the hon. Gentleman's figures because I think that they are important. He said that the cost of replacing furniture in the homes concerned, 11 was, according to the Wales tourist board, between £1,000 and £2,000. I do not wish to quibble with that, although I think that we could do better than those figures in some MFIs. Let us accept that £1,500 is not a bad middle-of-the-road figure to take and that £3,000 per year rent is an average figure. We must then assume when the furniture would be purchased. The last time that someone would have been able to spend money on new furniture would have been 1989—I am trying to develop the worst scenario to assist the hon. Gentleman—that was the last year before all the fire-resistance requirements of the 1988 regulations applied to new furniture. There is also second-hand furniture, but the value of such furniture would obviously be less. Let us take the expected life of the new furniture to be 10 years. Some might, I agree, last longer—12 or 15 years—but I take the point made by the hon. Member for Edinburgh, South that the tourist industry would want to tell people that it had nice, new modern furniture that was safe and in the tourists' interest. It might even help to raise rents a little. Ten years does not seem unreasonable. We have suggested in the regulations that the date of implementation be extended from March 1994 to December 1996. The lost value over 10 years—because this furniture must be depreciated in the business's accounts—would be around 25 per cent., because taking the period 1989 to 1996, a period of two-and-a-bit years, or three years of normal life for the furniture would remain to run. We are therefore talking about a figure of about £400 or perhaps £500 maximum. Averaged out over the total period of lets—my figures may not be exact, but they are not far wrong—that comes to an extra £8 to £10 per week in the period concerned. Let us be pessimistic again and assume a 20-week letting period. At £8 or £10 a week, we should be 12 dealing with £200 against an income of £3,000–8 per cent? I do not believe that the hon. Member for Ceredigion and Pembroke, North can disagree with those figures. I am considering the matter from the point of view of a practical, medium to small business man calculating what he would have to spend, spread over that period, if he had bought new furniture, which was not safe, at the last allowable moment. I agree with the hon. Member for Edinburgh, South that safe furniture on holiday is worth £8 to £10 a week to my family and, I am sure, to yours, Mr. Benton. There is no doubt that it would be intolerable not to introduce the regulation at the first available moment—without, of course, unnecessarily damaging the industry. I hope that the hon. Member for Ceredigion and Pembroke, North will consider the figures that I have given him, which we have carefully worked out on the realistic assumption of what will happen in the worst scenario. I am sure that most cases will not be as bad as that. I hope that the hon Gentleman will consider that that is not an unreasonable price to have to pay given that the regulations that are being introduced are extremely important for the reduction of the horrific figures that I have quoted. I have listened carefully to the hon. Gentleman, but I cannot suggest to the Government that we go back on the dates that we have suggested. I commend the regulations to the Committee.
Question put and agreed to.
Resolved, That the Committee has considered the Furniture and Furnishings (Fire) (Safety) (Amendment) Regulations 1993. (S.I. 1993, No. 207).
Committee rose at five minutes past Eleven o'clock.
THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:
Benton, Mr. Joe (Chairman)
Banks, Mr. Matthew
Beresford, Sir Paul
Duncan Smith, Mr.
Mitchell, Mr. Andrew
The following also attended, pursuant to Standing Order No. 101(2):
Dafis, Mr. Cynog (Ceredigion and Pembroke, North)
Griffiths, Mr. Nigel (Edinburgh, South)
Llwyd, Mr. Elfyn (Meirionnydd Nant Conwy)
Rowe, Mr. Andrew (Mid-Kent)