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The Earl of Home: My Lords, I am not surprised to see that some fairly major changes were made to the Bill during its passage through another place. Despite quite lengthy and good discussion in your Lordships' House, the Bill was perhaps not a perfect document when it left us. I fear that it is still not a perfect document. We had hoped, for instance, that the Government would listen to the points, which were not at all party political. However, that was not to be. I am

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pleased that they have obviously listened to some of the practitioners, as far as Amendment No. 1 and the consequential amendments are concerned.

We on these Benches agree that Clause 2 now provides further clarification and covers more eventualities. One would perhaps have hoped that, with all the drafting skills at their beck and call, Ministers might have come up with something akin to this clause in the first place. I know that it is hard to legislate for every eventuality. My colleagues in another place described in Committee other situations which might occur. From the Hansard report of that debate, I do not believe they received proper answers. I therefore feel that the Bill may still not be quite as complete as it might be.

I come from north of the Border and draw some personal comfort from the amendment to Clause 2. It indicates that the Government now recognise that Scotland actually exists. Perhaps it has something to do with a rather important fixture that Scotland has in Paris in around one-and-a-half hours. I am sure that your Lordships will want to join me in wishing the Scottish team well this afternoon.

Noble Lords: Hear, hear!

The Earl of Home: My Lords, we will not oppose the amendment, particularly as it is supported by the bodies representing both small and medium-sized industries. Of course we wish to support them as well.

Lord Ezra: My Lords, I too express appreciation to the noble Lord, Lord Clinton-Davis, for having the courtesy to write to us in regard to these amendments and to explain their background. I find the amendments entirely reasonable in that we want to make the Bill as watertight as possible. If it was suspected that contracts which comprise both goods and services would have escaped the intentions of the Bill, it is right that that should be corrected.

I agree with the noble Earl, Lord Home, that perhaps the amendment could have been introduced at an earlier stage when we would have had an opportunity of expressing our opinions on it in this House. Nonetheless, I welcome the amendments; I believe that they improve the Bill.

Lord Clinton-Davis: My Lords, I thank the noble Earl, Lord Home, and the noble Lord, Lord Ezra, for their comments. Listening to the noble Earl, Lord Home, one might be tempted to think that no government in the past on either side had ever introduced amendments to their legislation. My memory does not accord with that.

The amendments are narrow in scope. However, I join with the noble Earl--though I have not consulted with the Scottish Office about this--in wishing the Scottish team every possible success, right through to the final when, of course, they will be playing England.

On Question, Motion agreed to.

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COMMONS AMENDMENT

2

Clause 4, page 3, line 4, after ("debt") insert ("or (where that amount is unascertained) the sum which the supplier claims is the amount of the debt")

Lord Clinton-Davis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 2.

This is a single technical amendment which seeks to improve the transparency of the text. It makes clear from when interest would run where the contract did not stipulate a price and the Sale of Goods Act 1979 or the Supply of Goods and Services Act 1982 supply a duty to pay a "reasonable price". An example of such a contract would be where someone was called out to fix a boiler. No price would be agreed ahead of the service being rendered but there would be a duty on the customer to pay a "reasonable price". The amendment provides that the default credit period should start to run from the time that the debtor has notice of the amount the creditor claims. This is so even if the debtor turns out to have good cause for disputing the amount. Interest would only run on the reasonable amount. If the creditor's conduct caused delay, Clause 5, on remission of interests, could then be used by the debtor to remit any undeserved interest.

Moved, That the House do agree with the Commons in their Amendment No. 2.--(Lord Clinton-Davis.)

The Earl of Home: My Lords, the Minister gave an example of someone being called out to fix a boiler when no price had been agreed before the service was rendered. That is a rather unfortunate example as anyone who ever comes to fix my boiler invariably says that it is unfixable. In those circumstances, no service is rendered and yet a call-out charge is levied. Perhaps the Minister would be kind enough to give me the name of his boiler fixer.

The Minister in another place, Mrs. Roche, said that the amendment was not a charter for suppliers to start claiming out of order. With that assurance, we accept the amendment.

Lord Ezra: My Lords, we too accept the amendment. Perhaps I can respond to the problem posed by the noble Earl. I am in the boiler business. If he has any difficulty--we deal with large installations and no doubt he has a large installation in his home--we shall be pleased to help.

I should like to ask the Minister one question in relation to the amendment. Where the price is not stipulated beforehand and the interest runs from the time when the account is rendered, the recipient of the services might well say that the amount is somewhat excessive. It appears that the only recourse the recipient then has is to resort to court proceedings. Is that the case?

Lord Clinton-Davis: My Lords, I believe that is right. Apart from the noble Lord, Lord Ezra, so nobly volunteering his services to the noble Earl, Lord Home,

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the man I had in mind was Augustus Horatio Bloggs--with whom noble Lords will be familiar. I thank noble Lords for their response to the amendment.

On Question, Motion agreed to.

COMMONS AMENDMENT

3

Clause 4, page 3, line 6, leave out from ("sum") to end of line 7 and insert ("due in respect of a period of hire of goods")

Lord Clinton-Davis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 3.

Moved, That the House do agree with the Commons in their Amendment No. 3.--(Lord Clinton-Davis.)

On Question, Motion agreed to.

COMMONS AMENDMENT

4

Clause 11, page 5, line 23, leave out from beginning of line to end of line 29 and insert--


(".--(1) A qualifying debt created by virtue of an obligation to make an advance payment shall be treated for the purposes of this Act as if it was created on the day mentioned in subsection (3), (4) or (5) (as the case may be).
(2) In this section "advance payment" means a payment falling due before the obligation of the supplier to which the whole contract price relates ("the supplier's obligation") is performed, other than a payment of a part of the contract price that is due in respect of any part performance of that obligation and payable on or after the day on which that part performance is completed.")

Lord Clinton-Davis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 4. I shall speak also to Amendment No. 5. This is a technical amendment.

Following the Committee stage in the other place, we reviewed the Bill to ensure that none of the amendments made during the passage of the Bill had inadvertently caused things to fall outside the Bill which should be covered. This amendment picks up the one issue that we identified. The purpose of the amendment is to ensure that the Bill operates on stage payments; that is, interim payments in respect of work actually done.

During discussion in the Moses Room, the Government brought forward an amendment to clarify the operation of Clause 4 on the period for which statutory interest runs. Inadvertently, however, the amendment put stage payments into a state of limbo as they are caught by the definition of an advance payment in Clause 11, but the clause does not stipulate from when interest will run.

Rather than invent a "rule" in Clause 11 for genuine stage payments, we feel that the best approach is to take them out of Clause 11 altogether. That is achieved through Amendment No. 4. The effect of the amendment is that stage payments, where the payments are for work already done, are dealt with under Clause 4(3) and (5) as appropriate.

Amendment No. 5 is consequential to Amendment No. 4. The new wording for Clause 11 requires a change in the word structure in Clause 11(4). It also serves to

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remove an element of ambiguity as the obligation to pay the price is, in one sense, always present in a supply contract. I beg to move.

Moved, That the House do agree with the Commons in their Amendment No. 4.--(Lord Clinton-Davis.)

The Earl of Home: My Lords, as the Minister said, this clause has been rather chopped and changed in the course of attempting to get it right. An amendment as important as this shows that despite the claims that they consulted widely on producing the Bill, the Government did not understand the implications. The alternative is that the Government are playing fast and loose with Parliament. Had I thought the latter, I would have created more fuss. However, the Minister was kind enough to write to me explaining the reason for the amendment. As he said, the previous amendment inadvertently put stage payments into a state of limbo.

I am sure that what the Minister said to the House was said in good faith and I accept it in good faith. We shall watch carefully to see how this and the other clauses work in practice and will no doubt return to the matter in due course. In the meantime, we will not oppose the amendment from these Benches.


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