HC Deb 14 June 1978 vol 951 cc995-6
12. Mr. Tebbit

asked the Secretary of State for the Environment if he now expects to be able to give any advice to local authorities concerning the blacklisting of companies which have breached phase 3 of the Government's pay policy, on the lines of the circulars which he issued concerning phases 1 and 2 of the policy, before the end of phase 3.

Mr. Shore

New clauses in Government contracts were introduced in April. I am still considering the question of advice to local authorities, following up that given in circulars 123/75 and 103/76.

Mr. Tebbit

Is the right hon. Gentleman not aware that he has been telling me that for months and that there are now only a few weeks left to the current pay round in which he has time to issue advice? Has he not been advised that councils which incurred needless extra expenditure through refusing the most advantageous tender, merely to comply with a Government policy which lacks the force of law, would risk a surcharge of their councillors for that offence? Is not that why he has failed to issue a circular so far?

Mr. Shore

No. The hon. Gentleman is right to say that we are coming towards the end of the current pay year—that is a perfectly legitimate point to make—but there has been a long series of negotiations with both sides of industry. The Government did not make clear or decide about their own clauses in contracts between Government Depart- ments and agencies and the building industry until, I think, the end of March and the beginning of April. So there has not been all that much time since then. There is something in the further point that the hon. Gentleman made. It would be for a council to decide whether its actions could be justified if they were challenged by a district auditor or in a court of law. Since the whole purpose of pay policy is to achieve what we consider to be a major policy in the national interest, I should be most surprised if local authorities were to get into any difficulty on that account.

Mr. Molloy

Is my right hon. Friend aware that a much more serious issue affects the London borough of Ealing through the activity of the council? Since we have had the new Conservative council there has been the cancellation of large council housing estates and swimming pools, which had been designed and for which the contracts had been signed and building firms engaged. Compensation is to be paid, but the council is to deny people these amenities and will make its contribution to rising unemployment.

Mr. Shore

I know very well the misfortune that Ealing suffered in the May elections, but I was not aware of the matters raised by my hon. Friend. If he would like to give me further details I should be glad to receive them.

Mr. Rossi

Is it the Government's policy to set up a public procurement agency for the co-ordination of the laying out of contracts in the public sector, as required by the unanimous vote at the Labour Party conference last October? Would such an agency have regard to the black list of companies when coordinating the offering of contracts for public works?

Mr. Shore

I do not think that I can help the hon. Gentleman on the last part of his question, because he is raising hypothetical matters. However, if he is asking whether we are thinking how best we can co-ordinate purchasing for public contracts, I can tell him that in so far as we are able to smooth the flow of orders nationally and regionally, that would be of great benefit to everyone, but no one should pretend that that is easy to achieve.