Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Ezra: I thank the noble Lord for the full reply he has given. It is clearly a most important issue, and I am glad that we shall be able to come back to it at Report stage, because the Minister has indicated that he would look seriously at the proposal, for example, that large businesses might be able to claim against large businesses in the first phase. I think there are a number of arguments in favour of that view, which I hope we will be able to deploy in more detail later.

I understand that in the case of other European countries which have already introduced these measures, there was in fact no preliminary period; they went straight in and they do not seem to have suffered as a result. I hope that the noble Lord will consider their experience as well when we come back to look at this again, as I am sure we will, and report at the next stage. In the meantime, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Earl of Home had given notice of his intention to move Amendment No. 26:

Page 7, line 24, after ("force") insert--
("( ) as respects contracts where both the purchaser and the supplier employ more than 50 persons, at the end of the period of three months beginning with the day on which this Act is passed;
( ) as respects any other contract,").

The noble Earl said: In respect of my amendments I thank the Minister for undertaking to cogitate on some of these topics--

Lord Clinton-Davis: I would not put it as high as that.

The Earl of Home: Perhaps "reflect on" would be a more appropriate phrase. I am afraid I do not know the Latin for "reflect".

28 Jan 1998 : Column CWH32

The effect of this phrasing and the problems of defining a small company is that until there is a free-for-all and anyone can sue anyone, I do not think that small firms will go through the rigmarole and expense of going against someone who is roughly of the size between small and big. I believe that people will not take advantage of this Act for some considerable time, which is a pity.

However, as the noble Lord has kindly agreed to reflect, I shall not move the amendment.

[Amendment No. 26 not moved.]

[Amendments Nos. 27 and 28 not moved.]

Lord Haskel moved Amendment No. 29:

Page 7, line 25, leave out ("made by statutory instrument").

The noble Lord said: I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Haskel moved Amendment No. 30:

Page 7, line 30, leave out ("made by statutory instrument").

On Question, amendment agreed to.

The Earl of Home moved Amendment No. 31:

Page 7, line 35, leave out ("contracts") and insert ("debts").

The noble Earl said: In relation to this amendment I have no particular worries when the supply comprises a genuine package of obligations and prices are agreed before the Act comes into law. However, with an existing contract which is in effect an umbrella contract that covers only the general terms of supply and does not specify the obligations and prices, each new supply is in effect a new supply and should be catered for in this Bill.

A good example of this was given to me--that of a developer having a general agreement with a supplier to provide bricks for a housing development. The requirement for bricks may be over a considerable period of time, depending on the demand for housing in the area. The period could be months or it could be years. It does not seem fair to exclude the brick supplier who has entered into this umbrella agreement, securing what he hopes will be for him a valuable long-term contract, although obviously by considering this Bill we are anticipating that there may be hiccups at some stage during the supply of his bricks. I beg to move.

Lord Meston: I support this amendment in so far as it raises an important point. I wonder what consideration has been given to the effect of the Bill, as it is presently drafted, on running account arrangements.

Lord Clinton-Davis: I am surprised in some way by this amendment, although we are talking about discussion at this stage and there is no reason why what I think must be a probing amendment should not be put down. All amendments, as I have said before, are probing amendments at this stage in this place. It would be wrong to apply this Act retrospectively. It would amount to the Government providing the way for goal posts to be moved by making the parties to a contract subject to a sanction which they had not foreseen when

28 Jan 1998 : Column CWH33

they had agreed the contract. I do not believe that that would be appropriate. The whole purpose here is to ensure that the parties have some knowledge and certainty in the contractual relationships which would be enhanced by the provisions of the Bill. We do not want to detract from that position, which I believe would be the essence of the situation if these amendments were to be included.

It is critical that the parties to a contract should know what the legal position is and what their obligations are contractually. That is important before the terms are agreed. I therefore feel that what is proposed here would lead to a good deal of commercial uncertainty for parties currently agreeing contracts. That is the rationale of the objection that I have taken to the amendments.

I thank the noble Earl for raising the issue because it is pertinent to our discussions today that all those angles should be properly considered. However, I hope that the Committee will appreciate the points that I have raised. We are not in favour of retrospection as far as the provisions of the Bill are concerned.

Perhaps I may say also that I notice that the noble Earl, Lord Home, has raised umbrellas now on two occasions in our deliberations today. I have detected no sign of a storm, let alone a tempest.

5.45 p.m.

The Earl of Home: The very essence of the thinking behind the Bill is that we may get some rather nasty hailstones coming if some of the contracts go wrong, or late payment goes wrong, which leads to suppliers taking advantage of the Bill. We hope that the economy will continue to prosper as it did in the past so that this becomes less and less necessary as time goes on.

This was indeed something of a probing amendment. I shall continue to use the term "umbrella" rather than "parasol" because I believe that this is for rain, not for

28 Jan 1998 : Column CWH34

sun. There are quite a lot of examples where such umbrella agreements discriminate particularly against small suppliers such as in the example that I gave who have no idea what the situation might be as a development goes along: they are a long way from agreeing any price or other conditions in relation to a particular supply of bricks.

The noble Lord has kindly said that he will consider this along with the other amendments that I have put forward today, and I look forward to seeing what will come out on Report. In the meantime, I thank the noble Lord for his courtesy in not tearing me to bits in my debut on this side of the House--

Lord Clinton-Davis: Before the noble Earl sits down, I should say that I gave no undertaking on this amendment that I saw cause for reconsideration in the light of the argument that I sought to adduce in reply to the noble Earl. He is right in saying that we will study carefully everything that has been said in this debate, but I can certainly give no undertaking that there will be an amendment proposed in this regard.

The Earl of Home: I apologise to the noble Lord for my lax use of wording. I am grateful to him for at least considering the points that we have raised, if only to reject them. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 32 and 33 not moved.]

Clause 15, as amended, agreed to.

Title agreed to.

Bill reported with amendments.

The Deputy Chairman of Committees: This concludes the Committee proceedings on the Bill. I thank your Lordships for your indulgence.

        The Committee adjourned at ten minutes before six o'clock.

Next Section Back to Table of Contents Lords Hansard Home Page