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Police Bill [H.L.]

3.30 p.m.

Read a third time, and passed, and sent to the Commons.

Housing Grants, Construction and Regeneration Bill [H.L.]

Earl Ferrers: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

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Moved, That the House do now again resolve itself into Committee.--(Earl Ferrers.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 101 [Construction contracts]:

Lord Williams of Elvel moved Amendment No. 125:

Page 58, line 8, at end insert ("and such operations shall be specified in the agreement").

The noble Lord said: At this point we enter a new phase in the Bill which deals with the construction industry and the results of the report. Sir Michael Latham chaired the proceedings with distinction. Construction operations, which will be a matter of some contention as we move through these clauses, should be specified in any contract which is concluded under the specifications of Clause 101, which is an introductory clause. I introduce this amendment to show that there is a great deal of confusion about what a construction operation really is. I do not believe that the industry can properly function unless that confusion is cleared up.

One of the ways in which that can be done is by ensuring that each contract should specify which particular parts of it are covered by the Bill which is before the Committee. That may be a useful addition, and I put the amendment forward without prejudice to discussions which will take place at a later stage in Committee about the nature of such operations. I beg to move.

Lord Howie of Troon: I support my noble friend in this amendment for this simple reason. Clause 101 refers to a construction contract and this part of the Bill deals with such matters. Contracts relate to construction operations which are then defined in Clause 102. Those Members of the Committee who remember the Second Reading will recall that many of us felt that the definition of construction operations in Clause 102 was defective and confusing in the sense that operations which many of us thought, with our long experience in construction, were construction operations were in fact excluded from the part of the Bill included in Clause 102. I wonder whether it might be helpful, as my noble friend has suggested, for the contracts themselves to define those construction operations to which they are intended to refer, rather than for us to fall into the confusion which is apparent in Clause 102. I support my noble friend in this amendment.

Earl Ferrers: As the noble Lord, Lord Williams, said, we are moving into a different area of the Bill. I say at the outset that it is quite a complicated area. I quite see why the noble Lord wishes to make the position as clear as possible. We shall always consider his suggestions carefully.

As I see it, the amendment is designed to assist where a contract covers both construction and non-construction operations. It would require all the elements of work which fall within the construction definition to be

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specified in the contract agreement. That is what the noble Lord, Lord Howie of Troon, would like to see. He would like to see everything written down. The trouble is that when everything is written down, anything that is not written down is considered to be outside the provisions which are written down. So one has to be careful.

I believe that this amendment will be a cause for confusion for this reason. As the Bill is currently drafted, if, for example, a bricklayer was building a wall, he would know that he was entitled to the fair treatment which the Bill provides. But with the noble Lord's amendment in place, if his wall-building was not specifically mentioned as a construction activity under the contract, he would wonder where he stood. Would he still be entitled to these fair contract provisions or would he face a legal battle to establish that his work should have been specified from the outset? I believe that lawyers would have a field day over this. At worst, he could be persecuted, but incorrectly, that the contract document effectively ruled his work outside the Bill. That is something which I do not believe noble Lords would wish to do or we would wish to see happen. Small firms, the self-employed and everyone else engaged in construction work should have clear rights to the measures on adjudication and payment which we are trying to provide here.

At the moment, the activities either fall within the definition of construction operations as specified in Clause 102 or they do not. Although we have tried to draft the Bill so that there are as few grey areas as possible, one is bound to accept that some will remain. That is inevitable and in some ways it is not a bad thing. It would certainly be good practice for contractual parties to get together to make sure that they know which parts of the contract are construction operations in terms of the Act. Of course, they would be quite within their rights to apply the same sort of terms, by agreement, to any work that fell outside the definition. But I do not believe that we can require parties to specify construction activities in their contracts. I understand the reason why the noble Lord has tabled this amendment, but I believe that the context would be best without it because it allows for less doubt and would give fewer problems later on.

Lord Howie of Troon: The Minister's interesting reply does not wholly convince me. I know that the Bill is complicated and detailed but I had not thought that it went into such detail as a single brick and a single bricklayer. In my noble friend's amendment the definition of construction operations is not concerned with a wall but a building, or something of that nature, of which a brick is part. The activities of the bricklayer will be defined in the specification which will be part of the contract as a whole. I do not believe that the Minister has grasped the point.

Lord Monkswell: The Minister referred to bricklaying. There are situations in which bricklaying can be carried on and is effectively excluded from a construction contract under Clause 102. I call in aid the Ideal Home Exhibition, which I believe opened recently.

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I understand that within that exhibition a number of houses have been constructed. When one looks at Clause 102(2)(f) one sees that what is excluded is,

    "the making, installation and repair of artistic works, being sculptures, murals and other works which are wholly artistic in nature".

The construction of a whole house in the Ideal Home Exhibition, which can be defined as a temporary structure of an artistic nature, may not be considered to be "construction". This highlights the difficulty we face. I ask the Minister to comment.

Lord Elton: Perhaps I may encourage my noble friend to treat the regulation of the exhibition industry as a wholly distinct issue from the regulation of the construction industry.

Earl Ferrers: The noble Lord, Lord Howie, says he is not convinced by what I said. I always regard it as a matter of regret if I cannot persuade him that what I have said is right. Either one lists everything or one leaves a certain amount to reasonable common sense. The Bill provides in Clause 101(2):

    "Where an agreement relates to construction operations and other matters, this Part applies to it only so far as it relates to construction operations".
That can include a whole lot of matters. If one puts in the words suggested by the noble Lord, Lord Williams, one has to specify what those construction operations are. I know that the noble Lord, Lord Howie, would not wish to exclude the bricklayer. My fear is that if those words were put in the bricklayer would be excluded. One would have to specify what construction operations were covered.

I thought that the noble Lord, Lord Monkswell, had had a rush of blood to the head when he said that the Ideal Home Exhibition and the houses built therein could be described as,

    "the making, installation and repair of artistic works, being sculptures, murals and other works which are wholly artistic in nature".
Whenever I visit the Ideal Home Exhibition my experience is that wonderful houses are put up. One says that they are exactly what one wants because they are so convenient, cheap, and so on. One does not consider them beautiful objects to be looked at in an artistic manner. I do not believe that the Ideal Home Exhibition comes into it. I hope that I have been able to satisfy the noble Lord, Lord Monkswell, on that point.

I return to the remarks of the noble Lord, Lord Howie. I believe that we must keep the Bill as simple as we can. My fear is that the proposed words would make it more complicated in the result, not the intention.

Lord Williams of Elvel: I believe that in reply to my noble friend Lord Howie, the noble Earl said that in such a contract it would be normal to specify various procedures and operations carried out under the contract. Normally, any good lawyer negotiating such a contract would wish to say what was and what was not covered by the Bill. The specification for an operation of any kind is a complicated business. I agree that we should keep it as simple as possible. Nevertheless, these are complicated matters. I do not believe that it would be

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difficult for a contract to specify, say, in an appendix, that A was covered by the Bill, B was not covered, and so on. That would be agreed between the parties and lawyers concerned. It would make the position absolutely clear. We do not want to write matters into the Bill which make it more complicated. I would have thought that my amendment makes the whole position much clearer for those people engaged in construction activity within or outwith the Act, as it will be.

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