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Lord Ashley of Stoke: My Lords, does the Minister recall that he played a prominent part in the setting up of the scheme which has been successful and cost-effective, helping many thousands of disabled people to retain their jobs and thousands more to obtain jobs? If the Government go ahead with proposed cuts from £19 million to £12.9 million the jobs of many disabled people and their lives will be seriously affected. A realistic budget has been placed at £23 million. That money should be paid to keep the scheme.
Lord Henley: My Lords, I remember, as does the noble Lord, the launch of access to work. I agree with him that it has been successful. I reject his allegations that we are cutting the budget. We launched access to work with a budget, first, of some £14 million, and for subsequent years, as the noble Lord will remember--this was made clear--of some £12.9 million. The nature of the scheme caused it to grow beyond that figure and we were able to borrow money from other parts of the department. That cannot continue in the longer term. We are restricting it to its budget of £12.9 million. That is why we had to impose certain limitations on the scheme in December last year. As the noble Lord knows, we are committed to keeping the scheme. That is why we are reviewing it and ensuring that it is properly targeted upon those whom it can benefit most. I believe that the noble Lord will remember some figures that I quoted to him previously. Currently, about 80 per cent. of those being assisted by access to work were already in work. The aim of the scheme, as my right honourable friend Mr. Hunt made clear when we launched it, was to try to give priority to those out of work and to help them into work.
Lord Molloy: My Lords, does the Minister accept that the Royal British Legion naturally has an interest in the Question? Will he, as Ministers have done hitherto, keep us closely informed of any developments whereby former servicemen and women who were wounded and are now crippled can be helped by this House and by all those who have sympathy and understanding for British men and women disabled in wars?
Lord Henley: My Lords, like the noble Lord, Lord Molloy, I have the greatest respect for the Royal British Legion. I believe that the whole House has respect for the work done by the noble Lord in the Royal British Legion. As I believe I made clear, we will have discussions with all appropriate organisations as we consider the appropriate changes to access to work. If the Royal British Legion wishes to make any comments to me or to my ministerial colleagues, I shall be more than happy to listen to them. As it is, I do not believe that it has asked for a meeting, but again, should it wish to have such a meeting, I shall be more than happy to consider it.
Lord Henley: My Lords, what I am aware of is the rather scurrilous press release from the party opposite which claims that 7,500 people will lose their jobs as a result of the changes. There is no truth in that whatever. Obviously, we had to make changes because the budget was growing out of control. The programme was never supposed to be demand led. It was launched with a specific budget. We want to keep the programme within that budget.
Lord Addington: My Lords, as the programme has shown itself to be of benefit to the Treasury because it has resulted in getting into work people who now pay taxes, is it not illogical, even from the Treasury's point of view, that it should be restricted or cut back?
Lord Henley: My Lords, I suspect that the noble Lord did not listen to the figures I quoted earlier. I made clear that some 80 per cent. of those whom the programme helped were already in work and only 20 per cent. were out of work. We see it as more important to help people into work, and that is why we should like to target it in that respect. Whether the noble Lord can prove there were benefits to the Treasury as a result is another matter. It is arguable that many of those being helped were in work and would have retained their jobs whatever happened.
Lord Rochester: My Lords, does not the Secretary of State's recent announcement that government funding for the access to work scheme is to be given to the unemployed, as he said, mean that disabled people will inevitably suffer?
Lord Henley: My Lords, that is not what we said. We said that in the first year or so of the scheme's operation there was a bias in favour of the employed. The original intention was that there should be a bias, although not a total bias, in favour of the unemployed. We want to ensure that the scheme is focused properly on the unemployed. We want access to work together with the many other schemes we have to help disabled people into work--I must stress that access to work is only one of many and only one part of our expenditure in this field--to assist people into work.
Lord Ashley of Stoke: My Lords, is the Minister aware that the reason for the overspend is that the original financial allocation was inadequate? In terms of pure public relations the Government should be careful because the volume of protests from disabled people and their organisations, if the cuts are made, will be so great that they will obscure the fine work the scheme has done. In pure public relations terms the Government should give the scheme more money.
Baroness Turner of Camden: My Lords, is the Minister prepared to look at the cases which the RNIB has advanced concerning people who have difficulties caused by their wish to change jobs as a result of the changes introduced in December 1995? I understand from the institute that there are a number of cases of people wanting to change jobs who are disadvantaged as a result of the changes.
Lord Henley: My Lords, obviously I shall look at any cases the RNIB brings before me. I can give the noble Baroness the assurance that I and my right honourable friend the Secretary of State will be seeing the RNIB very soon.
Lord Strathclyde: My Lords, at a convenient moment after 3.30 p.m., my noble friend Lady Cumberlege will, with the leave of the House, repeat a Statement on mental health services that is to be made in another place.
Baroness Nicol: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
The Bill will assist the construction industry by speeding up the resolution of contract disputes and improving payment procedures; it will reform the arrangements for registering architects; it will give local authorities the freedom to decide their own priorities for tackling "unfitness" and disrepair in private housing; and it will extend powers to give financial assistance for the regeneration and development of derelict and rundown areas.
This is a fairly large Bill of 145 clauses and three schedules. It is long not only because it makes important changes to legislation but because it has been drafted largely to include and to restate previous legislation rather than simply to amend it. It therefore avoids the maddening consequence of having to read the Bill and having constantly to refer in cross-reference to existing statutes. I hope that your Lordships will find that at least to be of convenience.
When one introduces a Bill one normally starts at the beginning of it and progresses through to the end. However, I thought that on this occasion I would take a different course, if I may, not merely in order to muddle the noble Lord, Lord Williams of Elvel, if he is so muddled, but because I prefer to describe first the proposals in the Bill which I know will be of particular interest to a number of your Lordships. They are the proposals relating to construction contracts and they are contained in Part II.
The construction industry is one of the biggest industries in the country. Last year new construction orders were worth £50,000 million. The industry employs some 1.5 million people. Around three-quarters of them are self-employed or are employed in small firms which provide specialist services on construction sites; for example, electricians, plasterers, carpenters and steel erectors. These small companies are sub-contractors to larger contractors who, in turn, are under contract to the main contractor who in his turn is under contract to the client. In addition, the clients and the large contractor may also retain professional advisers--for instance, architects and surveyors--to help them design and manage the construction project.
The picture is one of a complex hierarchy of different contractors. Given the complexity of a large building site where things need to be done in the right order, and given the number of contracts involved, it is not surprising that the industry has a record of contractual disputes; and then, of course, people do not get paid. In every industry cash flow is important but it is particularly important in the building industry.
The payments are made by the client to the main contractor. The main contractor then passes a share to the sub-contractors, who are responsible for the heating, lighting, water services and so forth. They then pass a share on to their sub-contractors, and so it goes on. If a payment is held up, particularly if it is at the top of the chain, like a goods train shunting it knocks everyone down the line in turn. They all become affected by the lack of payment whether, as it were, it was their fault or not. For the large contractor this could mean serious inconvenience but for the small sub-contractor it could mean insolvency.
It is against that background that we have proposed legislation with two purposes. The first is to speed up the flow of payments and information about payments on construction contracts. The second is to provide a reliable means of resolving disputes quickly. This is not the Government trying to boss the industry about. That is not what this Government do or would seek to do in any event. Therefore, if the noble Lord, Lord Williams, wished to say anything nasty along those lines he might care now to rewrite his speech. We were asked by the industry to introduce this legislation and, being accommodating, we have done so.
The Bill arises originally from a report which was commissioned jointly by the Government and the construction industry and which was prepared under the chairmanship of Sir Michael Latham. As the industry is so large and so diverse, there are bound to be differences of emphasis in the way in which the Bill is perceived. There are those who will say that we have gone too far and there will be others who will say that we have not gone far enough.
We have tried to strike a balance and I believe that we have established a consensus in the industry in favour of the proposals. However, we are not proposing the legislation just because the industry has asked us to do so. We are proposing changes to construction contracts because the present arrangements are putting up our industry's costs and damaging its competitiveness. The Latham Report concluded that the costs of the construction process in this country were 30 per cent. higher than they need be. That is a large sum.
A great deal of British industry has learnt the need to be outward looking; to work in co-operation with both its customers and its suppliers in order to try to improve the quality and the presentation of its product; and to hold down costs. But the construction industry is only just embarking on that process. It is still at the bottom of the learning curve. It is our judgment that it will not advance further up the curve unless it becomes less adversarial and confrontational. It has to learn the simple lesson that delaying payment without good reason is not part of the ethos of "working together".
What the Bill does in Clause 107, therefore, is to provide that there should be an adequate mechanism for determining what payments become due under the contract and when. We want it to be perfectly clear to both the payer and the recipient what payment can be expected and when.
We are also providing a right as regards contracts which are of longer duration--60 days or more--for payments to be made in instalments. The purpose of this is to ensure that in so far as is possible there is some regularity in the flow of payments and that people can expect interim payments and do not have to wait until the end of the contract period before being paid.
We are also providing a right to information about individual payments. That is most important. It is quite possible that there could be legitimate reasons why payment should be withheld. No one wants defective workmanship but, if that were the case, it would be reasonable for someone to delay payment. There is
We are also proposing to restrict the notorious practice of using pay-when-paid and pay-if-paid clauses in construction contracts. It does not take a Mensa-type brain to realise that there is considerable financial advantage in not paying the contractor below you until you yourself have been paid. That is a pretty common practice within the construction industry but it is a much despised one since the smallest contractors may have to wait months for their money--
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