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Lord Williams of Elvel: I am most grateful to the noble Earl, who has now changed from being King Lear to being a listening, caring government Minister. We are very grateful for that. I very much hope that he will listen not only to my arguments but to those of his noble friend Lord Ullswater. Coming, as they do, from his own Benches, they may be equally persuasive as the arguments coming from this Dispatch Box. They make sense.

Earl Ferrers: The noble Lord should not try to drive the screw in too far. Of course I listened to my noble friend with deep interest.

Lord Williams of Elvel: I shall drive in any screw or knife that I have as far as I wish. However, I am grateful to the noble Earl. On that understanding, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.15 p.m.

Lord Williams of Elvel moved Amendment No. 138:


Page 59, line 34, at end insert--
("( ) Any order made under subsection (4) is subject to approval by resolution of each House of Parliament.").

The noble Lord said: This amendment responds to a concern expressed by the Delegated Powers Scrutiny Committee of this House. The committee called attention to the Secretary of State's powers to amend the primary legislation under Clause 102 simply by negative procedure.

It is our belief, a belief reinforced by discussions we have had, that because these definitions lead us into all sorts of grey areas, if the Government (any government) wish to change the definitions and exclusions in Clause 102 it should be for them to come forward and make a case before both Houses of Parliament. It is not enough simply to have a negative resolution amending primary legislation in an important matter such as this.

The Committee will be aware of the report of the Delegated Powers Scrutiny Committee. I do not wish to elaborate on that. It will be aware of the large print in that report drawing attention to this point. I believe that the committee is right, and that the amendment I have tabled would satisfy those concerns. I hope it satisfies the Committee. I beg to move.

Earl Ferrers: We must make sure that contract legislation can move in step with the way industry goes. It has to take account of new developments.

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Most of the changes that we are likely to make will be very small and detailed. However, I entirely agree with the noble Lord, Lord Williams. The modification of primary legislation is something that we should take very seriously indeed. The noble Lord made a good case for suggesting that this provision should be subject to affirmative resolution. I am not sure that his wording is quite right. However, if he will withdraw his amendment at this stage, I will see that an appropriate amendment is brought forward at a later stage.

Lord Williams of Elvel: I am most grateful to the noble Earl. On that understanding I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Howie of Troon moved Amendment No. 139:


Leave out Clause 102 and insert the following new Clause--

Meaning of "construction operations"

(".--(1) For this Part "construction operations" means, subject to subsection (2), operations of any of the following descriptions--
(a) construction, conversion, alterations, repair, extension, fitting out, maintenance, restoration, demolition or dismantling of buildings or structures or works above or below ground, including certain off-shore installations (whether permanent or not);
(b) preparation for intended buildings or structures, including but not limited to site clearance, earth moving, exploration, investigation and excavation, tunnelling and boring, erection of scaffolding, site restoration, dredging, landscaping provisions of roadways and other access works, and laying or installing the foundations of buildings, structures or other works, including the provision of temporary services;
(c) construction, alteration, conversion, extension, demolition or dismantling of any works forming, or to form, part of the land, including walls, roadworks, power lines, telecommunications operations, aircraft runways, docks and harbours, bridges, tunnels, railways, inland waterways, pipelines, drains and reservoirs, water mains, wells, sewers, process plant, industrial plant and installations for the purpose of land drainage, flood control, coastal protection and defence and including light houses, whether on-shore or off-shore;
(d) installation, conversion, alteration, repair, extension, restoration, demolition, dismantling or maintenance in or on any building or structure, or works of systems or components of systems, including but not limited to control systems, heating, lighting, air, hydraulics, drainage, sanitation, water supply and distribution, fire protection and alarms, security systems, intruder alarms, closed circuit television, public address systems, lifts, escalators and elevators;
(e) painting or decorating, repair, redecorating, cleaning and other maintenance or finishing including water proofing or application of internal or external finishes.
(2) The following operations are not construction operations within the meaning of this Part--
(a) off-shore drilling for, or extraction of, oil or natural gas;
(b) extraction (whether by underground or surface working) of minerals except insofar as this is borrow pit working for spoil for construction works;
(c) making and repair of artistic works being sculpture, murals and other works which are wholly artistic in nature.
(3) References in this Part to construction operations shall be taken as including--
(a) the work of individuals participating in the carrying out of such operations, and

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(b) the professional work of all consultants in relation to such operations, including but not limited to the management of such operations, and the preparation of designs, plans, drawings, specifications, reports, feasibility studies and surveys.
(4) The Secretary of State may by order made by statutory instrument add to, amend or repeal any of the provisions of subsections (1), (2) or (3) above, as to the operations and work to be treated as construction operations for the purposes of this Part and any such order shall be subject to approval by resolution of each House of Parliament.").

The noble Lord said: This very large amendment seeks to leave out Clause 102 and insert a new and better clause.

I have followed the general shape of the clause as drafted in the Bill, but I have changed the contents to some extent, largely by transferring some of the present exclusions in subsection (2) of the existing clause to the inclusions subsection. I did so having taken the advice of the Institution of Civil Engineers, the Contractors Liaison Group, the Construction Industry Council, the Federation of Civil Engineering Contractors--which agreed with me, but had slight, modest reservations--and sundry other bodies that I shall not list.

None of the people to whom I have spoken in the past week or so believe that the clause is satisfactory as it stands. As I said earlier, I have not excluded the process construction engineers; I have an open mind about them and I listened carefully to the comments of the noble Viscount, Lord Ullswater, in that regard. I wanted the Minister to put on record his reasons for excluding them and he has done so, so I shall not repeat them now.

As I understand it, from my recollection of what the noble Lord, Lord Lucas, said at Second Reading, Clause 102 is based on a definition in the Income and Corporation Taxes Act 1988. I looked at the Act and found it to be enormous, but I am glad to say that the clause itself is only small. The Latham Review Working Group 10 also looked at that definition and came up with a definition broadly based on it, but rather more inclusive than the Government's definition. It is interesting that the WG10 definition is much nearer to mine than it is to the Government's--that is because I largely based it on WG10's work with modifications which were brought to me from elsewhere.

There are many projects which involve large numbers of contracts and subcontracts. It is right to legislate for payments, methods of adjudication and so forth. Where there are a large number of contracts and subcontracts it makes sense that they are all based on the same presumptions and general rules. The exclusions therefore should be kept to a minimum. The Committee will see from my amendment that I have reduced them as far as I reasonably could.

I do not intend to go through this large amendment in any detail. However, under paragraph (a) I included offshore installations, which the Government did not include. By that I mean constructions such as lighthouses, breakwaters and the kind of jetties that I mentioned earlier, none of which are mentioned in the Bill and all of which are important.

As the Committee goes through the amendment it will be apparent that I tried to identify as many obvious operations as I could. I know that there is a danger of

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including too much and causing lawyers a certain amount of joy. But the Government included a fair number and I have merely added a few more. At this stage I want to make just two points. The noble Lord, Lord Berkeley, will be pleased to note that in subsection (2)(b) I amended the part concerning extraction to say,


    "except insofar as this is borrow pit working".
The noble Lord's point is a good one and I am sure that the Government will take it on board.

The last minor point I want to make is this. I notice with a little surprise that the Bill, in subsection (3)(b), speaks of,


    "the professional work of--


    (i) architects or surveyors, or


    (ii) consultants in building, engineering, interior or exterior decoration or in the laying-out of landscape".

That was taken from the income tax Act I mentioned earlier. But, oddly enough, in that Act those groups of professionals are not split into two--there is no reason why they should be because they are all doing construction work. I covered that in a rather different way in subsection (3)(b) of my amendment.

I do not want to take up any more time on this because the major points of the new clause were discussed and debated in the amendments we have been considering for the past hour or so. It is a much simpler matter than the Government seem to think. They could have solved a lot of their problems if they had taken up the sixth edition of the Institution of Civil Engineers' standard conditions of contract or perhaps the new engineering contract on which Sir Michael Latham was quite keen and which he used as a basis.

I hope that the Minister realises that Amendment No. 139 is intended to assist him and to clarify what he must by now see is a clause in his Bill which produced a certain amount of confusion and misunderstanding, not only here, but also outside in the industry. I beg to move.


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