Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Elton: My Lords, both the noble Lord, Lord Berkeley, and my noble friend Lord Ullswater have advanced the cause of these amendments with a little more restraint than I would have done. I would ask my noble friend to have in mind that the purpose of the Bill is to secure prompt and adequate payment. It is not just to prevent unnecessary loss. Both the noble Lord, Lord Berkeley, and my noble friend referred to non-standard items as if those were all one wanted to protect. However, the supplier of the components needs protection from late or non-payment regardless of whether they are standard items which he can sell at a lesser price elsewhere. The principle of the Bill is to secure a proper cascade of payment

22 Apr 1996 : Column 943

from the principal contractor down to the smallest subcontractor. That is valid whether or not the items supplied are standard.

Lord Berkeley: My Lords, on a point of clarification, when I was talking about the supplies of non-standard materials, I referred to either the main contractor or subcontractor. Possibly I should have said "subcontractor or supplier". It is the same thing. I certainly take on board the noble Lord's point because he is absolutely right.

Lord Howie of Troon: My Lords, the more often that he intervenes in these debates, the more I warm to the noble Viscount, Lord Ullswater, especially as he has just commended my Amendment No. 135. He has commended it more warmly than I would have done. I bow to the inadequacies of its wording. The amendment is meant in good heart and its intention is clear. The problem with Clause 103(2)(d) is that it lumps together,

    "components or equipment, materials, plant or machinery",
as though they were all the same thing, but they are not. I can go a good way with the Government in relation to,

    "equipment, materials, plant or machinery",
but when we come to components I part company with them. The noble Viscount referred to steelwork and I need not dwell on that. It is an obvious example of a component which is wholly constructional and should be in the Bill.

I seem to recall that during the Committee stage of the Bill, the noble Lord, Lord Swinfen--he may have something to say--drew attention to components which were produced off-site by the contractor who is on-site. I have in mind a specific example. The well-known contractors Richard Costain used to produce pre-stressed concrete sleepers for railway work in a factory somewhere near Motherwell. Those components were transported to sites where Costain's was involved. The supply of these components was part of the general contract under which the company worked. It seems wholly appropriate that components made off-site by the on-site contractor should be included in the Bill. I go a little further than that. I have in mind a specific example of components made off-site by a subcontractor.

The noble Lord, Lord Elton, was right in reminding us that in this Bill we are concerned with payment on time on delivery and that sort of thing. Let us consider, for example, a dry dock, which is a great civil engineering hole in the ground lined with concrete in a very elaborate and expensive way. At the front end of the dry dock there are the gates which lean on bearings. They are called the quoins, which merely means the corners. These quoins might very well be made of highly specialised, cast, stainless steel made in a factory in a place such as Crawley, remote from the site, but delivered to it and integral to the construction process. The manufacturer of these components delivers them and he might also erect them. He is entirely dependent on the main contractor for his payment. So he is part of the contractual chain which we have emphasised over and over again.

22 Apr 1996 : Column 944

Under this part of the Bill, because he is producing a component which is essentially a structural matter rather than carrying out a structural act, he is excluded from the Bill. Therefore, he can whistle for his money unless he can exercise muscle of some sort. That is wholly wrong. I do not believe that it is the Government's intention that such a supplier should whistle for his money, but the effect of the Bill is that he does. I sincerely hope that the Government will consider the amendment of my noble friend, and even my own humble amendment, to see whether they can come up with a solution at Third Reading.

Lord Lucas: My Lords, I answer first the point raised by my noble friend Lord Elton. The material and component manufacturers indicated in consultation that they did not wish to be covered by the Bill, although they are covered by the supply and sale of goods Act. One presumes that someone who is just delivering a load of bricks to a construction site, and that is an end of it, feels that they are quite reasonably protected by the fact that, if they have delivered the bricks, they have completed what they were asked to do. That is something that cannot reasonably be argued about. Such a supplier presumably does not have the problems which gave rise to this Bill in the first place. We should respect that exclusion.

Amendment No. 134 addresses in particular a matter of common concern to us. There are those in the construction industry who do a great deal of work off-site and then deliver. They may not even do more than deliver, but they have completed a great deal of the construction contract off-site and, as this Bill is drafted at the moment, they are not included.

We are not happy with the exact wording of Amendment No. 134. I have a little difficulty in understanding it myself. I suspect that the words "if not" should either have commas around them or they should be excluded. If that is right, then I understand what the amendment is aiming at.

We have problems with the amendment of the noble Lord, Lord Howie, as he will know from a previous amendment, as regards the concept of a recognised civil engineering building contract. But we find ourselves in sympathy with the intention behind both these amendments. It is something which we discussed at length in Committee. My noble friend Lord Ferrers undertook to consider the matter. We are still doing so. We hope to be able to clarify the position at Third Reading. On that basis, I ask the noble Lord, Lord Williams of Elvel, to withdraw his amendment.

Lord Williams of Elvel: My Lords, I am again most grateful to the noble Lord, Lord Lucas, for considering these matters carefully. He is quite right in that the amendment, which I drafted myself, is slightly defective in its English and the words "if not" should be left out. The noble Lord is quite right in pointing that out. I hope that he recognises the strength of feeling not only in this House but in the construction industry about this matter and that at Third Reading he will be able to return with something that satisfies all concerned. As we keep on saying--and it cannot be said often enough--we are

22 Apr 1996 : Column 945

here to satisfy all in the industry. This is not a party political matter. We are doing our best to get the construction industry back on its feet. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment Nos. 135 and 136 not moved.]

The Deputy Speaker: My Lords, in calling Amendment No. 137, I advise the House that if this amendment is agreed to I cannot call either Amendment No. 138 or Amendment No. 139.

Lord Lucas moved Amendment No. 137:

Page 59, leave out lines 32 to 34.

The noble Lord said: My Lords, I spoke to this with Amendment No. 120. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 138 and 139 not moved.]

Lord Berkeley had given notice of his intention to move Amendment No. 140:

Page 59, line 34, at end insert--
("(2A) When agreeing the terms of individual contracts which relate to construction operations described in subsection (2) above the contracting parties may agree to contract out of the provisions of this Part, but--
(a) if one contracting party does not wish to contract out of the provisions of this Part, then the parties must agree contract terms which comply with the provisions of this Part, and
(b) if the parties fail to agree on acceptable terms which comply with the provisions of this Part, then the relevant sections of the Scheme shall apply.").

The noble Lord said: My Lords, before withdrawing or not moving this amendment, perhaps I may make two points--

Lord Elton: My Lords, on a very important but small point of order, one cannot speak except to a Motion. The noble Lord can move the amendment, and having done so he can withdraw it, but he cannot speak to it until it is there to speak to.

[Amendment No. 140 not moved.]

6.30 p.m.

Lord Howie of Troon moved Amendment No. 141:

Page 59, line 35, after ("shall") insert (" , subject to such consultation as the Secretary of State shall consider necessary,").

The noble Lord said: My Lords, the amendment states:

    "subject to such consultation as the Secretary of State shall consider necessary".
I leave it at that. I beg to move.

Lord Lucas: My Lords, I am sympathetic in principle to the amendment. Consultation has been the mainspring of the exercise to produce fair contracts legislation and the Government have a considerable consultation exercise ahead of them in bringing forward the schemes for construction contracts. Clause 103(4) allows the Secretary of State by order to amend the provisions of subsections (1), (2) and (3). That would allow the definition of "construction operations" to be fine tuned

22 Apr 1996 : Column 946

if it were not quite right. It would also allow definitions to be updated in line with developments in the industry. There is no question of any such amendment taking place without consulting the appropriate representatives of any groups affected. I hope that with that assurance the noble Lord will feel able to withdraw the amendment.

Next Section Back to Table of Contents Lords Hansard Home Page