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Lord Lucas: My Lords, certainly I shall look at the situation when we have finished with the Report stage of this Bill. If it turns out that local authorities have risen up as a body and demanded the abolition of this 12 month rule which is there for their benefit--in exceptional circumstances--I do not doubt that we shall take cognisance of that. But if they are demanding it they have not told me, and if they have not told me they cannot expect me to know about it.

Lord Swinfen: My Lords, there is a small crumb of comfort there in that my noble friend will at least consider the matter. However, like the noble Lord, Lord Williams of Elvel, I have also heard that local authorities do not require this measure in the Bill. They feel they can manage perfectly adequately without having the power to delay payment by up to a year. I do not think my noble friend, or possibly his advisers, have taken into account that with delays in putting the work in hand there will possibly be rises in costs due to inflation, no matter how small. Materials rise in cost and therefore when the work comes to be done the funds are not available.

My noble friend Lord Balfour pointed out that local authorities may run out of funds. They may run out of funds but they are able to plan their work ahead in this area because it takes some months to get the assessment done. There are also instances of local authorities spending money rather wastefully towards the end of the financial year because they are desperate to spend it to make certain they get the Government grant so they have the same amount to spend the following year. That is because the Treasury has not yet learnt that a good housekeeper is able to spread her money over more than one week, or more than one month, or more than one year, and to do the job properly. It might be an idea to have a good housewife as the senior civil servant in the Treasury. I know that my wife manages to make me far more sensible with money than I would be otherwise.

I believe that my noble friend should give this matter further consideration. It is a totally unnecessary clause in the Bill. It is rather insulting in suggesting to local authorities that they cannot manage their affairs.

Because of this clause, the odd, poorly-managed local authority may use the provision as an excuse to delay payment for its own purposes, for one reason or another. Without this clause, it would not have that reason.

I was tempted to divide the House, but the hour is late. My noble friend has said that he will give the matter consideration. Therefore, I shall not risk having the House counted out. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

18 Apr 1996 : Column 865

Clause 40 [Payment of grants: conditions as to carrying out of the works]:

[Amendments Nos. 37 and 38 not moved.]

Clause 41 [payment of grants: conditions as to contractors employed]:

Lord Williams of Elvel moved Amendment No. 39:


Page 23, line 31, at end insert ("and competition between contractors for grant work will disregard that part of the estimated cost of work attributable to value added tax").

The noble Lord said: My Lords, this amendment stands in my name and that of my noble friend Lord Dubs.

Your Lordships will be aware that in Committee we discussed competition between VAT-registered contractors and those contractors who are not registered for VAT and who can therefore produce a competitive bid which VAT-liable contractors might not be able to meet.

In Committee, the noble Lord, Lord Lucas, said that he sympathised with those anxieties. He said:


    "I shall give further thought to the matters raised and how best they may be achieved and will return to the noble Lord in one fashion or another before Report".--[Official Report, 26 March 1996; col. 1669.]

I have received a number of letters from the noble Lord on various matters with regard to the Bill. I am not sure that this specific item has been covered. I am not sure that the noble Lord has made a commitment in one fashion or another to respond to the amendment that we produced in Committee.

I do not wish to go into the arguments put forward in Committee. The objective of moving the amendment this evening is to give the noble Lord an opportunity to respond "in one fashion or another" to the problem. Noble Lords will be aware of the problem having no doubt read our deliberations in Committee. I beg to move.

Lord Lucas: My Lords, I am happy to return to this matter. The noble Lord is right in saying that he raised the issue in Committee, and we promised to consider it and come back to it. And come back to it we now have. I am happy to give the noble Lord the assurance that this is an issue which we feel should be covered in guidance. This is not a matter that we find sufficiently simple or straightforward to set out on the face of the Bill.

As I am sure the noble Lord, with his accountancy skills, will realise, the matter is complicated. Contractors not registered for VAT are still required to pay VAT on the materials they acquire. On the other hand, VAT-registered contractors recover costs that they incur. In providing for equal treatment of competing estimates, we would also wish to see that covered. We would expect guidance to cover all the matters which an authority should take into account when assessing estimates submitted with grant applications. This should stress the need for genuine and full competition of estimates covering issues such as VAT registration as well as the reputation of the contractor and his ability to carry out the works to a good standard and in good time.

18 Apr 1996 : Column 866

I hope that this is satisfactory to the noble Lord, Lord Williams. I feel we think very much along the same lines and share the concern to make it more difficult for so-called cowboy builders to operate. Building is a most politically correct industry. It is the only one I know where the Indians are the good guys.

With those words, I hope that the noble Lord will feel able to withdraw the amendment.

Baroness Hamwee: My Lords, before the noble Lord sits down, perhaps I may say this. I do not normally spring to the defence of the Government. However, I received a letter on the subject from the noble Earl, Lord Ferrers, and found it convincing. In addition to casting me as the ventriloquist dummy of the noble Lord, Lord Howie, I may also have been cast as the mailbox of the noble Lord, Lord Williams.

Lord Williams of Elvel: My Lords, I am most grateful to the noble Baroness for disavowing her role as the doppelganger of the noble Lord, Lord Howie, or my mailbox. I may have received such a letter. However, I am bound to say to the noble Lord that I received copies of many letters sent by the noble Lord since Committee stage. I may have missed that one. Nonetheless, the argument is made. The fact that there is a ministerial record of what has been said this evening will be helpful. If that is in guidance, so be it.

I think that there is nothing between the noble Lord and me. We believe that it is right that there should be fair and proper competition between contractors. If that is properly expressed in guidance, given what the noble Lord said in a House of Parliament this evening, I am sure that the courts will take due notice of this in interpreting anything that may come out in guidance. I am grateful to the noble Lord for what he has said. I beg leave to withdraw the amendment.

Lord Lucas: My Lords, before the noble Lord withdraws the amendment, perhaps I may say that we believe we set out this matter in a letter to the noble Lord. However, given our previous performance to date, perhaps it was addressed to Chas. Elvel and went astray.

Lord Williams of Elvel: My Lords, I have been known by many names in my varied career but never by Chas. Elvel! No doubt officials from the Department of the Environment invent many different names for many of us. In future I shall watch whatever E-mail may come in any direction and try to pick up what the officials in the Department of the Environment wish to send me. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 [Cases in which grants may be re-calculated, withheld or repaid]:

Lord Lucas moved Amendment No. 40:


Page 26, line 13, at end insert--
"( ) the authority ascertain that the amount was determined under section 33 or 34 on the basis of inaccurate or incomplete information and exceeds that to which the applicant was entitled;").

The noble Lord said: In moving this amendment, I speak also to Amendments Nos. 41 and 42.

18 Apr 1996 : Column 867

Amendment No. 40 extends the circumstances set out in Clause 45 in which grant may be recalculated, withheld or repaid. Our intention is to cover the situation where an applicant was awarded an erroneous amount of grant. Amendments Nos. 41 and 42 in the name of the noble Lord, Lord Williams, would amend Clause 46 to cover a similar situation and also the case where the applicant deliberately has given false information or withheld information to gain excess grant.

The noble Lord, Lord Williams, spoke to two similar amendments tabled in his name at Committee stage. We considered that the noble Lord's amendments raised a point which the Bill did not adequately address and I said in Committee that we would give further thought to them.

Amendment No. 40 is the result of our deliberations. In bringing forward this amendment, we are seeking to take on board the concerns raised by the noble Lord, Lord Williams. We believe that Clause 45 is a more appropriate place to deal with the case where the wrong amount of grant has been awarded since that clause already addresses those cases where an authority is able to redetermine the amount of grant, withhold grant or require it to be repaid. By contrast, Clause 46--which the noble Lord's amendments would amend--deals only with cases where an applicant was not entitled to any grant of the description in question.

The noble Lord's Amendment No. 42 seeks to cover a specific circumstance--deliberately giving false information or withholding information. We remain of the view that much of this ground is already covered by subsections (2) to (6) of Clause 46 and by way of common law, and we see no need for the noble Lord's amendment.

I am grateful to the noble Lord for raising this important issue. I beg to move.


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