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Lord Howie of Troon: My Lords, I believe I heard that reply not so long ago. It was virtually the same reply I received in relation to an earlier amendment when the Minister said that he and his hard pressed officials had been reflecting for a week and intended to reflect further. The noble Lord, Lord Ezra, may agree with me that it would be a good idea to call us in and then we could reflect with them, or take over the reflections from them. We would do that without pay.

This is a serious matter. There is no difficulty. The noble Lord, Lord Ezra, when he was chairman of the Coal Board, had no difficulty distinguishing between mining and civil engineering operations under his direction and dealt with them accordingly. I know that the noble Lord, Lord Ezra, is a clever man and would be expected to see things more clearly than many others. But this is not a difficult matter and should be sorted

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out with a little further reflection. I hope that the Government can sort it out before we reach the stage of passing the Bill. With those thoughts, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Howie of Troon moved Amendment No. 8:

Page 58, line 45, after ("plant") insert ("or").

The noble Lord said: My Lords, Amendment No. 8 is grouped with Amendments Nos. 9 and 10, and I can be brief almost to the level of insignificance. We discussed this amendment in considerable detail and with tenacity at earlier stages of the Bill. The Minister led us to believe that he would at least reflect upon matters although he did not use that phrase. Perhaps he can tell us how the Government are getting on. Have they anything to tell us and, preferably, have they anything to tell us that we would like to hear? I beg to move.

Viscount Ullswater: My Lords, the purpose of this clause is to assist the construction industry in its interpretation of what is to be included and what is to be excluded from construction operations and thereby of what is covered by the subsequent clauses in this part of the Bill. I have understood the Government's desire to recognise the difference between the process industry in its contracts and the building and civil engineering industry in its contracts. Like a number of noble Lords, I have always supported the Government in their desire to keep this distinction but I wish to achieve clarity for the interpretation of this part of the Bill by the industry.

At the Committee and Report stages my noble friend Lord Lucas recognised that there remains confusion as to the inclusion of the words "construction" and "steelwork", which is the subject of one of the amendments we are discussing in this group, in subsection (2)(c). I would hope that my noble friend could confirm that steps will be taken in another place to clear up this confusion for the sake of the industry. I do not believe that this is an exercise in semantics. It is an important concern to the industry which needs the improved climate in which to work, which the Bill seeks to achieve.

Lord Berkeley: My Lords, in supporting the amendment of the noble Lord, Lord Howie of Troon, I have been concerned about the definitions in subsection (2)(c). Because I was uncertain about the inclusions and exclusions, I moved an amendment at Report stage which I hoped would take the sting out of the argument by making all contracts, even within the excluded category, included unless both parties agreed that they should be excluded. The Government did not accept the amendment but I was pleased to hear the comments of the noble Lord, Lord Lucas, at Report stage when we discussed Clause 104 in which he explained his views on the definition of "construction". If I have understood him correctly, it is certainly my view that the industry does not have quite so much to fear from these exclusions as we originally thought.

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At the risk of detaining the House for just a few minutes, I should like once and for all to clarify my interpretation of some simple definitions, perhaps as a kind of going away present for the Bill as it goes to another place, which possibly are sadly missing. "Process plant" is the equipment, pumps, vessels, motors, generators, coolers, heaters, pipes, cables and so on which enable the plant to operate. It is all manufactured or fabricated, mostly away from the site, and it is brought to the site for installation or assembly. It is my belief that these items are not constructed, which is where I have a problem with the clause, and they are certainly not constructed within the definitions of what I would call a construction-related Bill.

There are different types of process plant, which we have discussed to some extent ad nauseam--nuclear, water, sewage treatment, power stations, petrochemicals. But nearly all process plant is installed or erected on steel or concrete foundations or supports. It may be enclosed in steel or concrete framed buildings which may require earthworks and other foundation work to form a secure base on which the process plant can operate safely. It is important that, as such, steel foundations or framework is normally referred to as structural steelwork to differentiate it from the process plant, which, of course, may also have been manufactured in whole or in part out of steel.

Turning to the exclusions in the subsection and the comments of the noble Lord, Lord Lucas, at Report stage, manufacture, fabrication, installation and assembly of process plant is excluded. That includes the person and the firm using the cranes to install pumps on foundations and so on. The construction of foundations, the manufacture and the installation of structural steelwork are, or definitely should be, included, and that is a matter that we shall be discussing soon. I mentioned at Report stage the strong pressure and comments from the steelwork manufacturers that they should be included. But they are the structural steelwork people rather than the manufacturers of process plant. I certainly believe that if the definition is correct they should be included. They are not process plant manufacturers.

I am not really expecting an answer from the Minister to this rather long definition, but I hope that it may help the Government, when they come to the next revision of the Bill in another place, to clear up the wording and, in particular, to remove what has become something of a bogey word--construction--from the process plant. Much of the industry would then be happier.

Lord Williams of Elvel: My Lords, your Lordships will be aware that these matters were discussed at considerable length both in Committee and on Report. I support the remarks of my noble friend Lord Howie of Troon. I was hoping that we might have a government amendment in line 45 of page 58 to leave out the word "construction" in subsection (2)(c). I understood that the Government might have been prepared to do that. An amendment to that effect was moved at an earlier stage. As my noble friend Lord Berkeley said, that would clarify the position.

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I am interested in Amendments Nos. 8 and 9, but I and my advisers are particularly interested in Amendment No. 10. As I have emphasised to the noble Lord, Lord Lucas, it is believed that water and effluent treatment are essentially construction operations and are not process engineering or process operations. Since the Report stage I have received confirmation that that was the original intention of the authors of the Latham Report. Therefore, I hope that when considering the matter the Government will bear that fact in mind.

Lord Lucas: My Lords, the noble Lord, Lord Howie of Troon, has made it quite clear that, with these amendments, he is pressing the Government to explain their intentions on process engineering work. At Report stage I said that we were looking again at the introduction of Clause 104 (2)(c) to make sure that the right line was drawn between process engineering and other types of construction activity. Although that process will not be complete until we are in a position to lay amendments in another place, I am now able to give the House some clear assurances. In view of the amount of time that your Lordships have spent on this in debate, I should like to spend a few moments explaining our intentions.

First, on steelwork, which is the subject of Amendments Nos. 8 and 9, the arguments of noble Lords opposite have not convinced us that all steelwork on a process engineering site should be subject to the provisions of the Bill. However, we believe it is possible to distinguish between steelwork which is directly and necessarily connected to plant and machinery--steelwork, which forms, if you like, an integral part of the machinery--and other steelwork on the same site. We intend to bring forward an amendment which places integral steelwork squarely within the process engineering exclusion, but which would leave the remainder subject to Part II. Steelwork in a factory roof, a canteen or a visitor centre--just to take a few examples--would then be covered by the main provisions of the Bill.

Secondly, we have been convinced by the argument behind an amendment put forward by the noble Lord, Lord Williams of Elvel; namely, that the word "construction" at the beginning of subsection (2)(c) is misleading. While we would not go quite so far as the noble Lord, Lord Berkeley, who claimed that the term "construction" was never used in the putting together of plant and machinery--I certainly remember constructing plant and machinery out of Meccano--we certainly agree with him that it is unhelpful here. We shall bring forward an amendment as soon as possible to remove this source of confusion.

To reiterate and summarise our position, it is not, and never has been, our intention to exclude from the Bill all construction work on a process engineering site. We wish to exclude work only on plant, machinery and such steelwork as is necessarily connected to plant and machinery. Ordinary civil and building work would not be excluded.

Finally, I wish to deal with Amendment No. 10, which is identical to one put forward at Report stage by the noble Lord, Lord Williams of Elvel. There can

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be no doubt that the treatment of water and effluent are processes, and that the water and sewerage industries are process industries. I have already pointed out at Report that they spend about £500 million a year on process plant and machinery. It is quite true, as the noble Lord, Lord Monkswell, has suggested, that a lower proportion of their capital expenditure is on plant than in some other process industries--some 18 per cent. in water and sewerage as opposed to 52 per cent. in nuclear reprocessing and 75 per cent. in petroleum refining. However, since it is only work on plant, machinery and connected steelwork that will be excluded from the Bill, I hope that your Lordships will accept that this will leave a great deal of water and sewerage work to be classified as normal construction operations. Some of the illustrations of reservoirs, tunnels and other operations of that type that we have had from the noble Lord, Lord Howie of Troon, at previous stages of the Bill, are clearly within the construction ambit rather than the process ambit, and therefore come within Part II of the Bill. In view of what I have said, I hope that the noble Lord will feel able to withdraw Amendment No. 8, and that he will not move Amendments Nos. 9 and 10.

5.30 p.m.

Lord Monkswell: My Lords, before the Minister sits down, perhaps I may point out that he has mentioned the word "construction" and the suggestion made by my noble friend Lord Williams of Elvel previously, that it was misleading to have it in an exclusion clause for construction operations. I am very glad that the Government seem to have listened to that, albeit that they may be seeking to change the situation in a slightly different way.

Can the Minister also look at the word "demolition"? I hope that he will make a distinction. One speaks about "process plant" and a distinction between "installation" and "dismantling", which might be broadly considered to be process plant activity, and construction and demolition which can generally be expected to be within the construction industry regime. I am getting nods of assent from my noble friend Lord Berkeley, so I believe I am on the right track. Obviously, the Government cannot respond immediately, but I hope that they will bear this point in mind when they come to reconstituting this part of the Bill--as they appear to have promised that they will--in another place.

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