Labour-only Sub-contracting

HC Deb 11 March 1969 vol 779 cc1154-6

23. Mr. Judd

asked the Minister of Public Building and Works whether he will introduce a clause into all future contracts made by his Department with private firms to the effect that there will be no labour-only sub-contracting by them.

Mr. Mellish

As my hon. Friend will know, I and my right hon. Friend the Secretary of State for Employment and Productivity are at present having discussions with both sides of the industry on the recommendations of the Phelps Brown Report. Meanwhile, my Department is chairing a thorough interdepartmental review on labour-only sub-contracting with the co-operation of representatives of the unions and employers. I cannot anticipate the results of these negotiations.

Mr. Judd

I thank my right hon. Friend for that reply. Would he agree that within the sphere of his own Ministry fairly urgent action is necessary to overcome the problems relating to standard of workmanship and the evasion of tax and Government regulations, which is seriously affecting the morale of his own employees?

Mr. Mellish

I understand that. My hon. Friend will know that there is what is known as National Working Rule 8 of the National Joint Council of the Building Industry which warns of the dangers of using self-employed labour-only subcontractors. Whether this is being fully observed, I am not sure. But to ensure that Government contractors understand this we are immediately sending out a circular to try to strengthen it. Meanwhile I am having discussions with my right hon. Friend the Secretary of State for Employment and Productivity about Phelps Brown generally.

Mr. Speed

Will the right hon. Gentleman treat this matter with great urgency? He may be aware that recently in Coventry the Department of Employment and Productivity carried out a survey and found that there were many contract fiddles going on all over the city. A great deal of money is being lost to the taxpayer and social security through these abuses.

Mr. Mellish

I am grateful for the the hon. Gentleman's support. When we introduce legislation, as no doubt we shall apropos Phelps Brown to deal with this menace, I hope we shall have his full co-operation.

Mr. Ashton

Is my right hon. Friend aware that several local authorities have introduced such a clause into their contracts and that it can be implemented by the clerk of works having authority to investigate the National Insurance cards of sub-contracted employees?

Mr. Mellish

A lot can be done. What we must do is not to outlaw labour-only sub-contractors but to legalise the matter so that if anybody is employed under such conditions he pays his full tax liability.

Mr. Chichester-Clark

Would the Minister take every opportunity to make clear the sharp and necessary distinction between labour-only sub-contractors who observe Working Rule 8 and those irresponsible groups of self-employed people whom neither side of the industry smiles upon?

Mr. Mellish

I take the hon. Gentleman's point. We can use general terms and ignore the fact that some labour-only is quite legitimate and proper. Our problem is how to define the matter and how to make the spivs of the industry pay their debts and dues.